Press Release

VIS assigns initial ratings to Al Nasr Textiles Limited

Karachi, April 30, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Al Nasr Textiles Limited (ANTL). The medium to long-term rating of ‘A-’ denotes good credit quality with adequate protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Outlook on the assigned rating is ‘Stable’.

ANTL is a medium-sized textile spinning unit primarily involved in production and trading of high quality cotton yarn. The ratings assigned to ANTL take into account its association with its parent company, volume of operations of total group companies and sizable combined production capacity of both plants. The ratings take into account positive momentum in revenues driven by better operational efficiencies, improved profitability indicators, and considerable relevant experience of the sponsors. Meanwhile, vulnerability of spinning sector to raw material prices remains a key challenge faced by the company. Going forward, the management plans to increase production in line with capitalization of demand driven market dynamics through increased market penetration. The same is supported by capital enhancement carried out to improve the operational performance of spindles. The ratings derive strength from sound financial risk profile emanating from strong liquidity position, adequate debt coverages and low leverage indicators; maintenance of which are important rating parameters.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.

Javed Callea

Applicable rating criterion: Corporates (May 2016)

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