Lahore: VIS Credit Rating Company Limited (VIS) has reaffirmed the credit ratings of Yunus Energy Limited (YEL) at 'A+/A-1' for medium to long-term and short-term borrowings, respectively. This rating reflects a stable outlook and acknowledges YEL's good credit quality and high certainty of timely payment.

According to VIS Credit Rating Company Limited, the reevaluation of YEL's ratings considers several key aspects of its operation and financial health. YEL, which began its operations in September 2016, runs a 50-Megawatt wind power farm in the Jhimpir-Hyderabad corridor with 20 Wind Turbine Generators. The stable ratings are supported by YEL's strong affiliation with Yunus Brother Group (YBG), a prominent conglomerate with diverse business interests across Pakistan, providing substantial financial backing and operational support.

The assigned ratings take into account the long-term Energy Purchase Agreement (EPA) with the Central Power Purchasing Agency (CPPA-G), which mitigates the risk of energy offtake. Additionally, the operations and maintenance of the facility are managed by an experienced operator, further solidifying the operational stability of YEL.

Despite experiencing some operational challenges in FY23 due to government-led curtailments and lower wind resource availability, YEL has shown an improvement in energy offtake in the current year. This recovery has helped maintain profitability, which, although variable, has stayed robust during the rating review period. The company's liquidity position has also been noted as adequate, supported by strong cash flow and substantial short-term investments.

Looking ahead, VIS notes that the future ratings are contingent upon YEL maintaining satisfactory operational performance and continuing to manage its liquidity and leverage effectively.