Press Release

JCR-VIS reaffirms the Entity Ratings of Sapphire Textile Mills Limited

Karachi, February 1, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Sapphire Textile Mills Limited (STML) at ‘A/A-2’ (Single A/A-Two). Outlook on the assigned ratings is ‘Stable’.

Given the rise in demand of textile products, particularly yarn, in the international markets, textile sector posted exceptional results in FY11. However, prices have fallen considerably since last quarter of the out-going financial year, imparting pressure on the sector. STML has also enjoyed favorable results in the last two years, though margins have come under pressure lately.

STML is the flagship company of the Sapphire group and also one of the lead players in the textile composite sector. Over the years, STML has built a sound capital structure. Given the adequate debt servicing coverage and future expected cash flow generation, the company is likely to maintain existing capital structure while undertaking the planned expansion.

For further information on this rating announcement, please contact Mr. Javed Callea at javed.callea@jcrvis.com.pk or Ms. Sobia Maqbool, CFA at sobia@jcrvis.com.pk or call at (92-21) 35311861-70.




Syed Ziauddin Ahmed
Advisor

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 February 01, 2012 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.