Press Release
VIS Upgrades Entity Ratings of Thatta Cement Company Limited
Karachi, September 12, 2024: VIS Credit Rating Company Limited (VIS) upgrades entity ratings of Thatta Cement Company Limited (‘’TCCL’’ or ‘’the Company’’) at 'A/A-2' (Single A /A Two) from ‘A-/A-2’ (Single A Minus / A-Two). Medium to long term rating of 'A' indicates good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short-term rating of 'A-2' indicates good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on May 14, 2024.
Thatta Cement Company Limited (‘’TCCL’’ or "the Company") was incorporated in Pakistan in 1980 as a public limited company and is listed on PSX in 2008. The Company's main business activity is manufacturing and sale of cement.
The upgrade in the medium to long term entity ratings is on account of sustainable improvement in TCCL’s financial performance during FY24, primarily due to increased profitability and enhanced liquidity. In FY24, TCCL’s financial performance demonstrated significant improvement with increase in revenue on account of higher dispatches and cement prices. Shift to cost-effective domestic coal from imported coal and commissioning of a 3.5 MW solar energy project contributed to a reduction in production costs which further gave an uptick to the profitability margins. TCCL’s debt servicing capacity remains strong and capitalization metrics are viewed as conservative, with no long-term debt and low short-term borrowing. Moreover, the liquidity position of the Company also remains sound.
For further information on this ratings announcement, please contact at 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