Lahore, November 06, 2018 (PPI-OT): The ratings reflect the Company’s diversified revenue stream – sugar, ethanol and storage tanks– enabling it to cope up with the volatility in sugar prices. Margins in sugar have been depressed lately due to surplus sugar stock in the industry. However, despite volatile market conditions, the Company has been able to post solid margins owing to improved sucrose recovery and better ethanol margins.
Well thought investment in storage terminal tank terminals provides an additional cushion to cashflows throughout the year. Ratings draw strength from the Company’s strong financial profile characterized by a modestly leveraged capital structure, strong coverages and efficient management of working capital. The positive outlook signifies the Company’s consistent performance and resilience to adverse movements in sugar industry.
The ratings are dependent on the Company’s ability to sustain its margins and healthy coverages while maintaining discipline in working capital management. Deterioration of relationship between shareholders leading to adverse impact on the Company’s profile and/or performance would have a negative impact on ratings.
For more information, contact:
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Category: General Business News