Lahore, November 12, 2018 (PPI-OT): The ratings reflect Noon Sugar Mills Limited’s (Noon Sugar) diverse revenue stream, which in addition to the sale of sugar and ensuing by-products, is augmented by ethanol sales. The margins in the sugar industry have been depressed lately. However, the Company is able to maintain adequate margins owing to improved sucrose recovery and better ethanol margins.
The Company turned around its operations under new management in the last two years and is undertaking several steps to improve its efficiency through BMR and expansion in ethanol capacity. Meanwhile, Noon Sugar’s financial profile is stretched, characterized by a highly leveraged capital structure and modest coverages.
The ratings are dependent on the management’s ability to reduce leveraging and improve working capital management, while maintaining profitability. Timely commencement of ethanol expansion leading to better margins and cashflows is critical. Any deterioration in margins and/or coverages will negatively impact ratings.
For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com