Press Release

VIS Credit Rating Company Reaffirms Entity Ratings of Artistic Energy (Pvt.) Limited

Karachi, March 29, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity rating of Artistic Energy (Pvt.) Limited (AEPL) at ‘A+/A-1’ (Single A Plus/A-One). Long term rating of ‘A+’ indicates good credit quality; adequate protection factors. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-1’ reflects high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on March 16, 2021.

AEPL operates a 49.3MW wind power farm in Jhimpir, District Thatta, Sindh which was set up at a total cost of Rs 11.7b. The project was financed in a debt equity ratio of 75:25. AEPL’s assigned ratings incorporate satisfactory operating track record of AEPL, adequate financial profile and low exposure to business risk. AEPL is a wholly owned subsidiary of Artistic Milliners (Pvt.) Limited (AMPL). The assigned ratings incorporates sound financial profile of sponsor.

Business risk profile draws support from long-term Operations & Maintenance (O&M) contract in place with experienced O&M operator and track record of compliance with normative parameters stipulated in Energy Purchase Agreement (EPA) since commencement of operations. Presence of long term EPA with guaranteed capacity payments mitigates off-take risk while adequate insurance coverages are also in place. While power produced, and in turn cash flows, are susceptible to seasonality and possible variance in wind speed, comfort is drawn from surveys conducted by international consultants confirming adequate wind availability historically.
During H1’FY22, Funds from operations (FFO) was up 39%, vis-à-vis SPLY. Debt Servicing Coverage Ratio (DSCR) and FFO to Total Debt remain sound while projected DSCR is expected to remain comfortable over the rating horizon. Given collection of outstanding receivables from GoP, dividend payout of Rs. 1.7b was made to shareholders in H1’FY22. The assigned rating remains dependent on maintenance of business and financial risk metrics in line with benchmark for the assigned rating.
For further information on this rating announcement, please contact Ms. Arsal Ayub, CFA or the undersigned (Ext. 306) at 021-35311861-70 or email at .

Javed A. Callea

VIS Entity Rating Criteria: Corporates - August 2021

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 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited