Press Release

VIS Reaffirms Entity Ratings of Yunus Energy Limited

Lahore, July 03, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings assigned to Yunus Energy Limited (‘YEL’ or the ‘Company’) at ‘A+/A-1’ (Single A Plus/A-One). The medium to long-term rating of ‘A+’ reflects good credit quality, protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ indicates 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’. Previous rating action was announced on April 04, 2023.

YEL operates a 50-Megawatt (MW) wind power farm comprising 20 Wind Turbine Generators, each with a nameplate capacity of 2.5 MW, located at the Jhimpir-Hyderabad corridor. YEL commenced commercial operations (CoD) in Sept’16. The assigned ratings incorporate the sound sponsor profile of YEL as being a part of the Yunus Brother Group (YBG), one of the country’s leading conglomerates with diversified presence across several sectors. Additionally, the contractual commitment of the sponsor to fund any shortfall in debt provides further comfort to the assigned ratings. The ratings also factor in the long-term Energy Purchase Agreement (EPA) with the CPPA-G, mitigating offtake risk, as well as the Operations & Maintenance (O&M) contract with an experienced O&M operator.

YEL’s operational performance was hampered during FY23 on the back of government-led curtailments coupled with relatively lower wind resource; however, uptick in offtake was exhibited during the ongoing year. Consequently, profitability metrics reflected some variance, though remained sound throughout the rating review period. Moreover, the liquidity position remained adequate owing to sound cash flow and considerable short-term investments on the balance sheet. Debt service coverages have remained adequate. Furthermore, continuing improvement in capitalization indicators has been witnessed on a timeline period on account of profit retention, debt repayments and the absence of short-term borrowings for working capital requirements. Going forward, the ratings remain sensitive to ensuring satisfactory operational performance as well as maintaining comfortable liquidity and leverage metrics.

For further information on this ratings announcement, please contact at 042-35723411-13 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 .