Press Release

VIS Maintains Entity Ratings of Kohinoor Textile Mills Limited

Karachi, January 20, 2021: VIS Credit Rating Company Limited (VIS) has maintained entity ratings of ‘A+/A-1’ (Single A plus/ Single A-One) to Kohinoor Textile Mills Limited (KTML). Rating outlook has been revised from ‘Rating Watch Developing’ to ‘Stable’. The long term rating of ‘A+’ signifies good credit quality with adequate protection factors. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ signifies high certainty of timely payment, liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Previous rating action was announced on June 17, 2020.

KTML has a vertically integrated setup with presence across the broader value chain and is principally engaged in the manufacturing of yarn and cloth, processing & stitching the cloth and trade of textile products. Existing manufacturing facilities of KTML comprise two spinning units, one weaving unit and a home textile unit. The company’s head office is situated in Lahore and a regional office in Karachi. The Company has adequate power generation arrangement in place with generation sources including gas, furnace oil, solar and WAPDA. Generation mix is shifted depending on cost effectiveness of each fuel source. Besides investment in real estate, KTML the holding company also has investment in Maple Leaf Cement Factory Limited (55.22%) and Maple Leaf Capital Limited (82.92%).

The revision in rating outlook incorporate KTML’s diversified business risk profile, sound financial profile and the pandemic led boom in the textile sector. Assessment of financial risk profile incorporates healthy cash flow coverages, moderately leveraged capital structure and improving profitability indicators. Despite decline in net profitability led by higher finance costs, cash flow coverages in relation to outstanding obligations remain adequate. Gearing and leverage indicators continue to remain aligned with the assigned ratings. Ratings draw comfort from KTML’s association with Kohinoor Maple Leaf Group which has presence in textile, cement, power generation and investment management. Even though impact of Covid-19’s second wave remains elevated, VIS expects the order book for the industry to remain strong in the ongoing year, easing the business risk concerns.

For further information on this rating announcement, please contact Ms. Asfia Aziz or the undersigned (Ext: 306) at (021) 35311861-66 or email at info@vis.com.pk.








Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (April 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf

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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .