Press Release

VIS Reaffirms Entity Ratings of Maple Leaf Cement Factory Limited

Karachi, October 11, 2024: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed the entity ratings of Maple Leaf Cement Factory Limited (‘MLCF’ or ‘the Company’) at ‘A/A-1’ (Single A/A-One). 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-1' suggests strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned ratings remains ‘Stable’. Previous ratings action was announced on September 20, 2023.

MLCF, a public limited company listed on the Pakistan Stock Exchange, is primarily involved in the production and sale of cement. The Company is a subsidiary of Kohinoor Textile Mills Limited (“KTML” or “the Ultimate Holding Company”) and has its registered office situated at 42-Lawrence Road, Lahore, Pakistan. The cement factory is located at Iskanderabad District Mianwali in the province of Punjab. MLCF has a wholly owned subsidiary, MLPL, engaged in generating, purchasing, transforming, distributing, and supplying electric power to MLCF. The Kohinoor Maple Leaf Group (‘KMLG’ or ‘the Group’) has presence in textile, cement, power generation and investment management. KTML’s subsidiaries include MLCF, Maple Leaf Power Limited (MLPL), Maple Leaf Capital Limited (MLCL) and Novacare Hospitals (Pvt) Limited (NHPL).

Assigned ratings take into account the business risk profile of Pakistan's cement sector, which operates within a moderate competition environment and is supported by a stable regulatory framework. However, the sector faces risks due to high cyclicality linked to construction sector fluctuations, capital intensity, and energy price escalation. The market structure is oligopolistic, with the sector's performance heavily influenced by domestic demand, which remains subdued. Exposure to external factors, including exchange rate fluctuations and coal price volatility, adds further pressure.

Assigned ratings also consider the Company's financial risk profile. Profitability benefitted from higher selling prices and cost control measures, particularly in energy management. Liquidity remained strong, with improvements in cash flow generation reducing dependence on bank financing in meeting working capital needs. The Company's capitalization profile is conservative, with a reduction in gearing and leverage ratios due to profit retention and timely debt repayment. Coverage ratios, though declining, remain aligned with rating levels.

Going forward, the assigned ratings will be sensitive to the Company's ability to manage risks related to demand recovery, energy price volatility, and financial leverage. Maintaining the coverage metrics is important for the assigned 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

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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .