VIS Assigns Initial Ratings to Indus Sugar Mills Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- November 10, 2022 (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-1' (Single A Minus/A-One) to Indus Sugar Mills Limited (ISML). The medium to long-term rating of 'A-' denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of 'A-1' denotes high certainty of timely payment, with excellent liquidity factors and supported by good fundamental protection factors. Outlook on the assigned ratings is 'Stable'.

ISML is principally engaged in production and sale of sugar and its by-products. The shareholding of the company is vested with three families in equal proportion. ISML's manufacturing facilities are located at Kot Bahadur, Rajanpur, in Southwestern Punjab. The company also owns agricultural farms over an area of 4000 acres near the mill. The mill operates on self-generated power from bagasse fueled captive facility of 11 MW capacity.

A bumper sugarcane crop has been recorded during 2021-22 season, up by 9.4% over the preceding period due to increase in area under cultivation led by higher economic returns, favourable weather conditions and timely availability of quality inputs. Sugar production also increased in tandem with higher cane availability and largely intact recovery rates. Whilst the sugarcane production was forecasted to increase marginally during 2022-23, the recent floods have brought devastation for major crops in the country, including...