Press Release

VIS Reaffirms Ratings of Syntronics Limited

Karachi, December 31, 2020: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Syntronics Limited (SL) at ‘BBB+’/A-2’ (Triple B Plus/A-Two). The medium to long-term rating of ‘BBB+’ denotes adequate credit quality coupled with reasonable protection factors. Moreover, risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on December 10, 2019.

SL is primarily involved in the manufacturing of Polypropylene Laminated Bottom Block Sacks which is used as packaging material mainly in cement industry. The company also manufactures polypropylene bags used in other industries like sugar, feed, flour, fabric etc., with a market share of 25% in cement bags market and around 8% market share in other sectors. The ratings incorporate the demand of polypropylene packaging bags and company’s association with the ‘Premier Group’.

Sales have remained largely stable on a timeline basis while share of profit from associate has provided support to the bottomline. Volumetric sales of cement sacks decreased in the review period in line with lower cement exports during 4QFY20 due to COVID-19. The company incurred higher finance cost during outgoing year on account of higher average markup rate. Some pressure was witnessed on coverages due to lower cash flows in relation to outstanding obligations. Leverage indicators, though increased marginally, have remained moderate. During the ongoing year, sales have exhibited an upward trajectory in tandem with higher cement sales. However, dependence of the company’s major part of revenues on cement sector limits the business risk diversity aspect of the ratings. The ratings also factor in possible impact of currency fluctuation on raw material prices and any adverse changes in regulatory duties. Improvement in debt service coverage and maintenance of leverage indicators at comfortable level are considered important, going forward.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 301) or email at

Faheem Ahmad
President & CEO

Applicable rating criterion: Corporates (May 2019)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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