May 18, 2020 (PPI-OT)

Following is the text of press release issued by The Pakistan Credit Rating Agency Limited (PACRA)

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The ratings reflect established position of Nishat Mills as a premier export-oriented composite unit, with a sizable strategic portfolio and conservative capital structure. The Company enjoy's prominence in textile sector due to wide array of its products, extensive outreach and stable customer base. Meanwhile, the Company's revenues are consistently on a growing trajectory, a factor of continuous BMR activities, which has helped the Company in maintaining its leading position.

The diverse and sizable investment portfolio, emanating from the Company's implicit Holdco status within the Group, generates regular divided stream, supporting core income. Nishat Mills continues to maintain a low leveraged capital structure and strong coverages signifying its very strong financial profile. The Company's association with Nishat Group as its flagship entity, remains a key rating factor.

The entire textile chain is expected to be impacted due to the lockdown in Pakistan and major export destinations of the sector. The demand is expected to contract while eventual resumption of operations and recovery of the sector remains uncertain. The Company's operations and orders have suffered consequently. However, the Government and SBP have announced several initiatives to support export-oriented entities, providing some relief.

Meanwhile, the Company continues to receive sizable dividend income from its diversified investment portfolio that provides comfort to the ratings. The Company is expected to maintain its very strong financial profile despite prevailing tough conditions. The ratings are dependent on the Company's ability to sustain its core margins and profitability. Preserving low leveraged capital structure and sound coverages remain imperative. Meanwhile, inclusion of independent female members in the board structure is likely to have a positive impact on the governance of the Company.

For more information, contact:Analyst,The Pakistan Credit Rating Agency Limited (PACRA)Awami Complex, FB1, Usman Block New Garden Town,Lahore, PakistanTel: +92-42-5869504-6Fax: +92-42-5830425Email: hammad.rashid@pacra.comWebsite: www.pacra.com

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© Pakistan Press International, source Asianet-Pakistan