Press Release

VIS Reaffirms Ratings of Faisalabad Oil Refinery (Pvt.) Limited

Karachi, June 28, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Faisalabad Oil Refinery (Pvt.) Limited (FORL) at ‘BBB+/A-2’ (Triple B Plus/A-Two). The medium to long-term rating of ‘BBB+’ denotes adequate credit quality with reasonable protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on June 29, 2018.

The ratings assigned to FORL take into account its association with Madinah Group, having business stake in various sectors encompassing edible oils, sugar, ethanol, power generation, mass media and steel. The assigned ratings reflect stable business model, positive trajectory of sales and sound liquidity profile. Furthermore, ratings draw comfort from integrated production facility, profound distribution network along with well-established brand. Minimal reliance of the company on long term financing, adequate coverages and positive demand prospects of edible oil have also provided strength to the business. However, the ratings are constrained due to low margins and price volatility in imported raw materials. Also strengthening the liquidity profile while maintaining the leverage indicators at current levels are considered important, going forward.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.



Javed Callea
Advisor

Applicable rating criterion: Corporates (May 2019)
https://www.vis.com.pk/kc-meth.aspx

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