VIS Reaffirms Ratings Of MSML

VIS Credit Rating Company Limited has reaffirmed the entity ratings of Madina Sugar Mills Limited at single A minus/A-two

KARACHI, (UrduPoint / Pakistan Point News - 23rd Oct, 2020 ) :VIS Credit Rating Company Limited has reaffirmed the entity ratings of Madina Sugar Mills Limited at single A minus/A-two. The medium to long-term rating of 'A-' denotes good credit quality coupled with adequate protection factors.

Moreover, risk factors may vary with possible changes in the economy. The short-term rating of 'A-2' denotes good certainty of timely payment coupled with sound company fundamentals and liquidity factors. The previous rating action was announced on July 24, 2019, said press release on Friday.

The assigned ratings take into account MSML's association with Madinah Group, having business stake in various sectors encompassing edible oils, sugar, ethanol, power generation, mass media and steel.

The assigned ratings also factor in diversification by the company into ethanol business to curtail the impact of sugar sector . Profit margins stood significantly higher during fiscal year 2018-19 on account of higher proportion of ethanol sales entailing sizeable margins.

Some decrease in margins was witnessed during last nine months of fiscal year 2019-20 due to lower contribution of sugar segment. However, uptrend in retail prices of sugar and also ethanol rates on account of surge in demand for sanitizing products due to Covid-19 have boded well for the company. Debt service coverage has remained adequate.