Karachi: VIS Credit Rating Company Limited has assigned initial entity ratings of ‘A’ for medium to long-term and ‘A-1’ for short-term to Maple Leaf Power Limited, reflecting good credit quality and a strong likelihood of meeting financial commitments timely.

According to VIS Credit Rating Company Limited, Maple Leaf Power Limited, a subsidiary of Maple Leaf Cement Factory Limited, which in turn is under Kohinoor Textile Mills Limited, was rated based on various factors including its operations of a 40MW coal-fired power plant exclusively supplying Maple Leaf Cement Factory in Iskanderabad, Punjab. The power plant, operational since its completion in October 2017, was financed entirely through equity and is licensed through July 2042 by the National Electric Power and Regulatory Authority.

The ratings reflect the medium-to-low risk profile of the non-renewable power generation sector and the dependency of Maple Leaf Power’s energy demand on its parent company’s power needs. Financial stability is noted with a debt-free status and strong capitalization supported by profit retention. The company’s profitability is tied to a tariff indexed to coal prices, enhancing operational efficiency. However, liquidity is constrained by the receivables from its holding company.

Future financial stability will depend on managing the volatility of energy demand from the holding company and the broader economic conditions affecting the cement sector. Maple Leaf Power’s ability to handle market shifts, manage receivables, and maintain liquidity amid potential economic challenges will be crucial for sustaining its credit ratings.