VIS Assigns Initial Ratings to Alliance Sugar Mills (Private) Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- January 20, 2020 (PPI-OT)

Following is the text of press release issued by VIS Credit Rating Company Limited

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VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of 'A-/A-2' (A Minus/A-Two) to Alliance Sugar Mills (Private) Limited (ASML). The medium to long-term rating of 'A-' signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of 'A-2' denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned ratings is 'Stable'.

ASML is a wholly owned subsidiary of RYK Mills Limited (RYK) and is strategically located in Tehsil Ubarau of District Ghotki, Sindh, where sucrose content is high. ASML is primarily involved in manufacturing and sale of white crystalline sugar and its by-products. The company has gradually enhanced its crushing capacity, which is currently over 14,000 tpd.

The ratings draw comfort from the stable operations of the company during the last two years. The company has registered increase in net sales mainly on account of higher volumetric sales resulting from capacity expansions and some improvement in selling price during FY19. The ratings also factor in steady improvement in sucrose recovery rate in the last three years owing to provision of support to farmers and continued capex in energy efficiencies. The...