Press Release
VIS Reaffirms Entity Ratings of Al-Noor Sugar Mills Limited.
Karachi, October 22, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Al-Noor Sugar Mills Limited (“ANSML” or “the Company”) at ‘A-/A2’ (Single A Minus / A Two). The medium to long-term rating of ‘A–’ signifies good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy, while the short-term rating of ‘A2’ indicates good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. The outlook on the assigned rating is ‘Stable’. The previous rating action was announced on August 26, 2024.
Listed on the Pakistan Stock Exchange, ANSML is a public limited company engaged in the manufacturing and sale of sugar and medium-density fiber (MDF) boards, supported by captive power generation through bagasse and solar energy. The Company operates under the Al-Noor Group, a diversified conglomerate with interests in sugar, ethanol, board manufacturing, insurance, and modaraba management.
Assigned ratings incorporate the business risk profile of Pakistan’s sugar sector, which is characterized by seasonal production patterns, diminishing regulatory oversight, and fluctuations in cane procurement costs and sugar pricing. Sugarcane crushing is concentrated within a limited seasonal window, with year-round inventory management industry-wide practice, thereby exposing industry players to price and interest rate volatility. Structural challenges, including low mechanization and limited investment in crop improvement, continue to restrict productivity. Elevated procurement costs driven by region-specific support prices contributed to cost pressures in MY24, although a policy transition toward market-based pricing has been implemented. Domestic consumption levels remained stable, supported by consistent demand from the food and beverage industry. Despite a reduction in production, carryover stocks provided sufficient availability, prompting approval of export quotas. In MY25, the Company’s operations were impacted by regional differences in pest infestation, affecting sugarcane supply and recovery rates across units.
The ratings incorporate elevated financial risk indicators including high leverage along with weak coverages. The profitability has remained marginal, despite growth in revenues, mainly due to increasing cost pressures, and high finance costs. However, with liquidation of the current sugar inventory aided by favorable market dynamics and essential-demand characteristics of the product, the overall financial position including leverage indicators are expected to improve, going forward. Improvement in gearing and coverage profile will be necessary to support ratings.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf