November 1, 2018 (MLN): Pakistan Credit Rating Agency (PACRA) has maintained entity ratings of Popular Sugar Mills Limited at ‘BBB+‘ for long term and ‘A2’ for short term, with a ‘stable’ outlook forecast.
According to the rating agency, the ratings reflect the adequate business profile of Popular Sugar Mills Limited.
During FY18, the Company managed to maintain its margins accompanied by an increase in turnover despite depressed sugar prices.
The Company intends to improve its debt mix, which remains skewed towards short-term borrowings, by obtaining long term loans. The Company's modest leveraging and improving core coverages provide comfort to it's financial risk profile.
Furthermore, the ratings are dependent upon the Company's ability to increase its revenue base while maintaing margins and strict financial discipline/coverages.
“Continued efforts to realign the debt mix are critical for ratings. Any material deterioration in coverages and/or margins will have negative rating implications” the report added.
Popular Sugar Mills Limited is a public limited company. It acquired 100% shareholding of National Sugar Industries Limited in 2013. The Company is engaged in manufacturing and sale of refined sugar and its by-products are molasses and bagasse.
