Euro Oil (Private) Limited ("Euro Oil" or "the Company") was incorporated in Pakistan on 07-Mar-16, under Companies Act, 2017 as a Private limited Company. Euro Oil (Private) Limited (“Euro Oil” or "the Company”) was established in 2016 and formally obtained its Oil Marketing Company (OMC) license from OGRA in 2018. In October 2020, BB Energy, a global energy trading and integrated energy-commodities player, acquired ~20% equity stake in Euro Oil. Subsequently, in January 2022,Euro Oil entered into an agreement with PETRONAS to market and distribute PETRONAS branded lubricants across Pakistan. These developments enhance the Company’s business profile and product offering. The Company is primarily engaged in the procurement, storage and marketing of High Speed Diesel (HSD), Premier Motor Gasoline (PMG) including PMG 95 RON, High Sulfur Furnace Fuel Oil (HSFO), Aviation Gasoline (Avgas) and Lubricants. Currently, the Company operates a retail network of ~168 stations, including ~ 18 company-operated sites. Euro Oil holds owned and leased storage capacities of ~12,800 MT at its depot located in Sahiwal, Punjab. In addition to its existing infrastructure, Euro Oil plans to add ~5,000 MT at Sahiwal, ~3,000 MT at Daulatpur in Sindh, and ~7,000 MT at Kohat in KPK. The registered office is located in Lahore.

The Company’s major shareholding lies with Mr. Umer Mujib Shami and associates (~38.5%), Mr. Adnan Nasir andassociates (~38.5%), and BBE D PTE. LTD. (~20.0%), a Singapore-domiciled subsidiary of BB Energy. and Mr. Sohail Ahmad owns (2.8%). The ownership structure is stable and closely held, with most shares in the hands of key sponsors, which lowers the chance of sudden changes in control. The acquisition of BB Energy provides further support. The mix of individual shareholders and international corporate investor also supports steady decision-making and consistency in the Company’s direction. The Sponsors bring strong business acumen backed by extensive experience in Pakistan’s energy and trading sectors. They have shown a sound understanding of industry dynamics and consistently make prudent decisions. Moreover, the precence of an international investor, who is well integrated across the energy supply chain is beneficial for the Company. This strategic partnership acts as a guidance, that adds stability and continuity to the Company’s operations, supporting steady and sustainable growth. The Sponsors hold considerable financial strength to support the Company whenever needed, and have ademonstrated history of providing such backing in the past. This continued ability and willingness reinforces the Company’s financial stability and future growth prospects. Moreover, BB Energy turnover was USD 22.89bln andgross profit of USD 298mln in FY25. This bodes well for the Company.

The Board comprises of seven members, including four Executive Directors and three Non-Executive Directors. BB Energy has ensured its presence through two Non-Executive Directors on the Company's Board. Going forward, the inclusion of independent directors may further strengthen the oversight and governance framework. The BoD, with a diversified background and relative expertise of its members, is the key source of oversight and guidance for the management. Mr. Adnan Nasir, Managing Partner at Shanns Cosmetics and Chemicals, chairs the Board with an overall professional experience of around three decades. Mr. Bachir Bassatne, CEO of BBE Retail, and Mr. Fadi Kabalan, Director at BB Energy Trading Ltd. (UK), represent BBE D PTE. Limited on the BoD. This ensures that the investors’ interests are well-represented and aligned with the company’s strategic direction. The Board met four times during the year with majority attendance. Minutes of each Board meeting were adequately documented. The Board operations are supported through four key committees, namely AuditCommittee, Financial and Risk Management Committee, IT & Innovation Committee and Human Resource and Remuneration Committee. During the year, the Audit & Compliance Committee convened five meetings, while the Financial and Risk Management Committee also met five times to oversee financial integrity and risk oversight.The IT & Innovation Committee held three meetings, focusing on technological advancement and digital transformation. Additionally, the Human Resource & Compensation Committee convened four meetings to supervise people-related policies and performance matters. The minutes of each Committee meeting were documented adequately. M/s UHY Hassan Naeem & Co., Chartered Accountants, have been appointed as the external auditor for the Company. The firm has issued an unqualified opinion on the Company's financial statements for the year ending Jun-25, which validates the integrity of its financial reporting. The Audit firm is QCR rated and on the SBPs panel of auditors in category ‘A’.

All major operational and business functions, including Supply, Engineering, Retail Sales, IT, Procurement,Consumer Sales, Marketing, Depot Operations, Business Support, Administration, HR, and Lubricants, are overseen by the Deputy Managing Director (DMD), with each department headed by its respective department head to ensure effective and streamlined operations. The DMD reports to the Chief Operating Officer (COO), who, alongwith the Chief Financial Officer (CFO), supports the Chief Executive Officer (CEO) in managing overall operationsand financial oversight. The CEO reports directly to the Board of Directors, which provides governance and strategic guidance at the highest level. The internal audit function, comprising two personnel, reports functionally to the Chairman of the Board Audit Committee and administratively to the CEO, ensuring independent oversight across the organization. Mr. Umer Mujib Shami heads the Company as the CEO. He brings over two decades of experience across the Finance, Manufacturing, and Energy sectors and previously served as the CEO of Fuel Tech Pvt. Ltd. Mr. Sohail Ahmed, COO of the Company, brings over two decades of industry experience and has previously been associated with Shell, adding significant operational expertise to the Company. Mr. Tanveer Ahmed is the CFO of the Company with an overall experience of almost 12 years. The management team comprises seasoned professionals, each bringing a range of expertise in their respective fields. To ensure effective oversight and facilitate informed decision-making, Euro Oil has established various specialized committees responsible for overseeing key operational and financial matters. These include the Strategic & Business Planning Committee, Financial & Commercial Oversight Committee, Operations & Supply Chain Committee, HSSE & Quality Compliance Committee, Regulatory & Corporate Governance Committee, Retail &Commercial Network Committee, Human Resources & Organizational Development Committee, Projects & Technology Committee and Risk Management Committee. These Committees are headed by the respectiveCommittee head, and conduct regular meetings with adequate attendance to discuss pertinent operational matters. Complementing the overall governance structure, these Committees support effective reporting and aclear delegation of authority, contributing to smoother operations and improved strategic alignment across the Company. The Company’s Management Information System (MIS) is built on SAP Business One (ERP), implemented in 2018 through Excellence Delivered (ExD) Pvt. Ltd. as the official vendor. The system is maintained under a regular update arrangement, which includes quarterly patches and an annual version review to ensure optimal performance and security. The most recent update applied to the system is SAP v10 FP 2502. 

Driven by its high reliance on imports, Pakistan's petroleum consumption grew ~6% YoY in FY25, hitting 16.7mln MT. This surge was primarily due to price reductions, and increased vehicle sales. Motor Spirit (MS) led sales at 7.6mln MT (~6% increase), with High-Speed Diesel (HSD) seeing the largest jump at 6.89mln MT (~10% increase).Conversely, Furnace Oil (FO) use sharply declined by ~28%. The market features 35 registered Oil MarketingCompanies (OMCs), including the five key players, including PSO, Gas and Oil, PARCO Gunvor, WEPL, HASCOL, HiTech Lubricants, and Attock Petroleum Ltd. The upward consumption trend is forecast to continue. Euro Oil remains a relatively small player in the OMC sector, with a market share of ~1.2% as of FY25. The Company primarily generates revenue from the sales of PMG (~78%) and HSD (~21.3%), followed by High Sulfur Furnace Fuel Oil (HSFO) (~0.3%), Aviation Gasoline (Avgas) (~0.1%) and Lubricants (~0.2%). During FY25, theCompany generated sales of ~193,732 MT (FY24: 153,650 MT), posting ~26% rise due to higher industry-wide growth and demand. Euro Oil generated PKR 61,487mln of net revenue in FY25 (FY24: PKR 53,357mln), reflecting an increase of ~15% driven primarily by higher HSD and PMG sales, which rose by ~16% and ~21% respectively.Conversely, revenue from HSFO, AVGAS, and Lubricants declined by ~94%, ~40%, and ~30% respectively;however, the impact on overall topline remained minimal given their combined contribution of less than ~1%. This indicates that the Company’s revenue trajectory continues to be anchored in its core HSD and PMG portfolio, while movements in smaller product lines carry limited influence on aggregate performance. During 6MFY26, the Company reported revenue of PKR 31,469mln. The Company is projected to close FY26 with PKR 67 bln in revenues with volumes increasing by 5.8%. OMCs generate regulated and guaranteed margins of ~ PKR 7.87 per litre; however, overall business marginsremain a function of the Company's POL procurment strategy. Euro Oil primarily (~62%) procures POL through imports, while the remaining ~38% is sourced locally. During FY25, the gross margin increased to ~3.9% from~3.2% in FY24 indicating decent operational efficiency and prudent procurement practices. The operating margin improved to ~1.8% in FY25 (FY24: ~1.2%), while the net margin remained relatively stable at ~0.6% (FY24: ~0.5%).During 6MFY26, Euro Oil reported gross margins and net margins of ~4.6% and ~1.5% on back of increase in vloume handlings at COCO sites. Going forward, margins are expected to witness a stable trajectory as the Company’s projected gross and net profit margins for FY26 are approximately 4.4% and 1.4%, respectively.

OMCs operate on the cycle of 15 days based on the OGRAs regulated pricing and manage the inventory accordingly. As of FY25, the Company’s inventory turnover days stood at ~17 days (FY24: ~14 days). Trade receivable days managed to remain stable at ~6 days (FY24: ~7 days) due to cash sales. Trade payable days posted a slight increase to ~26 days (FY24: ~20 days). Consequently, net working capital days remains stable at ~-2 days.As of 6MFY26, gross working capital days are ~34 days while net working capital day is ~-1 day. This indicates that the Company has maintained a stable working capital position while managing receivables, payables, and inventory within the industry’s 15-day pricing cycle. Coverages are driven by the Company’s free cash from operations (FCFO) and financial charges. As of FY25, the Company reported an FCFO of ~PKR 1,056mln (FY24: ~PKR 976mln), reflecting an increase of ~8%, primarily due to higher profits before tax of ~PKR 635mln (FY24: ~PKR 486mln). Interest cover improved to ~3.2x from ~2.7x, supported by lower utilization of short-term running finance. As of 6MFY26, the Company reported FCFO of ~PKR 708mln with interest cover of ~3.5x. The Company continues to manage its debt repayment effectively, OMCs typically require substantial capital, comprising a mix of equity and debt, to manage high working capital needs. As of FY25, Euro Oil’s shareholders’ equity stood at ~PKR 2,278mln (FY24: ~PKR 1,902mln), marking an increase of ~20% driven by higher profit accumulation. The Company also maintained significant debt levels (FY25:~PKR 2,468mln; FY24: ~PKR 2,371mln), resulting in a leverage of ~55.2% in FY25 (FY24: ~58.7%). To support the working capital requirements company is issuing a short-term sukuk of PKR 2,000mln, which will further raise the leveraging. As of 6MFY26,the Company’s shareholders’ equity stood at ~PKR 2,758mln, while total debt was reported at ~PKR 3,081mln,translating into a leverage ratio of ~52.8%. By the end of FY26, the Company’s equity is expected to stand atapproximately PKR 3,245 million, with total debt projected at around PKR 4,913 million, resulting in a leverage ratio of roughly 60.2%. Going forward, it will be important to monitor the balance between equity growth and debt levels to ensure sustainable leverage and financial flexibility.

Euro Oil (Pvt.) Limited is set to issue a short-term, rated, secured, and privately placed Sukuk of up to PKR 2,000 million, which includes a PKR 500 million green shoe option. The instrument carries a six-month tenor with an indicative profit rate of 6-Month KIBOR plus 150 bps, aimed at fulfilling the company’s short-term working capital requirements. The instrument features a bullet repayment of the total principal amount plus profit on maturity. The instrument is backed by a structured Debt Payment Account (DPA) build-up, requiring 100% in the final 07 days of maturity, alongside a mandatory 4x cash flow throughput requirement routed through designated collection accounts held under lien.

The Sukuk Issue is secured by ranking charge over current assets in favour of the Investment Agent, for the benefit of the Sukuk Holders, with a 25% margin over the outstanding issue amount.

The company shall maintain a dedicated Debt Payment Account ("DPA") under lien with the investment agent, to be build up in the last 60 days (last two months) of Sukuk Maturity with complete funding to be arranged 7 working days before Maturity Date.

All identified business collections of the company shall be routed through designated collection accounts maintained with Askari Bank (Arranger Bank) during the tenor of the Sukuk. The routed collections shall amount to not less than four (4) times the Sukuk issue size over the tenor. For avoidance of doubt, for a PKR 2,000 million Sukuk with a six-month tenor, aggregate collections of PKR 8,000 million shall be routed through Askari Bank, translating into approximately PKR 1,333 million per month (minimum throughput) during the Sukuk tenor. DPA shall be filled through these collections on the respective due dates and askari bank, acting as an account bank will inform the investment agent accordingly.

The Issuer shall provide irrevocable instructions to Askari Bank, the account bank, that all collections from the designated accounts to be routed directly into a Collection Account. This Collection Account shall remain under lien in favor of the trustee agent for the entire tenor of the Sukuk.

The investment agent will continue to monitor the collection account and in case of any shortfall in the minimum throughput, the company is bound to route extra cash flows to the collection account to achieve the minimum agreed throughput.