The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (16-March-2005)
    PACRA Assigns Ratings to Attock Refinery Limited (ARL)
 

 
Analyst
Maimoon Rasheed
(+92-42-586 9504)
maimoon@pacra.com

 

 

 






 

 

 

 

 

 

 

 

 

 


Disclaimer
This press release is transmitted to you for this sole purpose of dissemination through your newspaper/magazine/agency. The press release may be used by you in full or in part without changing the meaning or context thereof but with due credit to PACRA. However, PACRA has the sole right of distribution of its press releases for consideration or otherwise through any media.

  

The Pakistan Credit Rating Agency (PACRA) has assigned a long term rating of ‘AA-' (Double A Minus) and a short term rating of ‘A1+' (A One Plus) to Attock Refinery Limited. The ratings, applicable to the senior unsecured creditors of the company, denote a very low expectation of credit risk emanating from a very strong capacity for timely payments of financial commitments.

The ratings reflect ARL's sustained robust performance over the years in a high-volume, low-margin industry that is subject to volatile input and output prices. The ratings also take into account the company's very strong financial profile emanating from a virtually debt free capital structure and strong liquidity. This substantially mitigates the element of financial risk. Moreover, the strengthening equity base due to mandatory minimum 50% profit retention would continue to provide significant cushion against any future unforeseen events. Nevertheless, the company remains exposed to the cyclical nature of refining margins. However, this concern is somewhat mitigated by the recent upturn in the refining industry coupled with higher expected international oil prices. The ratings also factor in the benefits accruing to the company from its association with the only fully integrated group in the petroleum sector of the country.

About the company: Attock Oil Company Limited (AOC), incorporated in UK and a pioneer in oil refining in South Asia, started refining operations in Pakistan in 1922. ARL was incorporated in 1978 to take over the crude oil refining business from AOC, which has 52.5% shareholding in ARL. ARL is listed on all the three stock exchanges of the country and currently has refining capacity of 37,500 BPD. The company's refinery is strategically located up-country in the north of Pakistan and caters to the petroleum products requirements in its region of location.

The company is a member of the Attock Group of Companies, a fully integrated group covering all segments of oil and gas industry from exploration, production, and refining to marketing of a wide range of petroleum products. In Pakistan, the Attock Group has considerable representation in the petroleum sector through its exploration companies – Attock Oil Company Limited and Pakistan Oilfields Limited – and an oil marketing company – Attock Petroleum Limited – in addition to the refining company.

 
 
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity.

PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings.

PACRA's opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.

 

    
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