VIS Reaffirms the Entity Rating of Artistic Denim Mills Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- January 09, 2023 (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 reaffirmed the entity ratings of Artistic Denim Mills Limited (ADML) at 'A-/A-2' (Single A Minus/ A-Two). The medium to long-term rating of 'A-' signifies good credit quality and adequate protection factors; risk factors may vary with possible changes in the economy. The short-term rating of 'A-2' denotes good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the ratings is 'Stable'. Previous rating action was announced on December 31, 2021.

ADML operates as a vertically integrated denim fabric and garment manufacturer. The Company's revenues are largely export-oriented. Business risk profile takes into account industry wide growth in exports over the last year; however, recent floods across the country, rising interest rates, inflationary pressures, and higher electricity costs pose risks on the sector over the medium term. Ratings are constrained by current weak macroeconomic environment globally and locally. Hence, meeting projected growth targets and maintaining financial risk profile will be important for ratings.

The assigned rating takes into account manageable financial risk profile of the Company. Sales revenue reported a three year compounded growth rate of 28% attributable to volumetric growth, USD/PKR...