Pakistan Oil Mills (Pvt.) Limited (‘Pakistan Oil Mills’ or ‘the Company’) was incorporated in April, 1960 as a Private Limited Company.

Mr. Muhammad Ishaq and his son, Haji Muhammad Farooq, who had been involved in the furniture business set up an edible oil refinery in the 1960s with production capacity of 7 MT per day of vegetable oil/ghee, and laid the foundations for Pakistan Oil Mills. The Company has witnessed multiple business cycles since then and the production facility has been integrated over the years as Company was able to set up seed crushing unit in the 1980s. Currently, the Company’s production facility, located in Kotri, Sindh, currently has a seed crushing capacity of 400 MT per day and refining capacity of 333 MT of vegetable oil/ghee per day. The sponsors have also ventured in textiles, Fimco Tex Industries (Pvt.) Ltd.

Pakistan Oil Mills is primarily engaged in the process of seed filtering and crushing, refining of vegetable oil/ghee by mechanical and chemical processes. The Company primarily sells vegetable oil/ghee, canola meal, and other byproducts including laundry soap. During FY25, the Company produced 57,949 MT (FY24: 43,559 MT) of vegetable oil/ghee resulting in capacity utilization of 48.29%. The Increase was mainly due to reduced price and lower import volumes impacted by rupee depreciation and increase in demand of Cooking Oil. Furthermore, the Company operates in branded edible oil segment, namely Naz cooking oil/ghee, Pak cooking oil/ghee, Sun cooking oil/ghee, and Pure cooking oil/ghee.

The Company’s major ownership resides with the family of Mr. Haji Muhammad Farooq. The major stake resides with his two sons Mr. Muhammad Masood Pervez (~ 64%) and Mr. Muhammad Usman (~ 33%). The remaining stake resides with Mr. Masood’s sons, Mr. Mohsin Masood (~ 2%) and Mr. Abu Bakr Masood (~ 1%).

The Company’s ownership is notably stable, supported by presence of its sponsoring family. This strong backing spans multiple economic sectors, including edible oil, textile, shipbreaking and automobile. Such a well-established foundation ensures the company’s continued growth and stability. Moreover, the Company’s succession plan is formally documented indicating the stability of the ownership structure.

The sponsors of the Company have involved in multiple businesses across several industries, including edible oil production, textiles, and automobiles. This extensive experience positions them as influential players in their respective sectors. Mr. Muhammad Masood Pervez, who serves as the CEO of Pakistan Oil Mills and Fimcotex Industries (Pvt.) Limited, brings over 30 years of expertise in the edible oil and textile segments. His extensive background in these industries has equipped him with a deep understanding of market dynamics, operational efficiencies, and strategic growth opportunities. Under his leadership, the Company has focused on innovation and quality, establishing a strong market presence and driving significant growth in its operations. Mr. Muhammad Usman, a key figure in the family business, he boasts over 30 years of experience. Together, Mr. Masood and Mr. Usman leverage their comprehensive industry knowledge and business acumen to guide the Company’s strategic direction, ensuring its continued success and adaptation in a competitive market.

The sponsors possess a sufficient net worth, which provides a significant financial cushion to support the Company during challenging times. This strong financial foundation enables the Company to navigate periods of economic distress or market fluctuations, ensuring operational continuity and stability. In addition to their individual financial strength, the sponsors benefit from their involvement in multiple ventures and companies across various sectors.This diversified portfolio not only enhances their financial resilience but also contributes substantial strength to the Company.

The Company’s Board of Directors is comprised of three Executive Directors, all of whom are members of the sponsoring family. The lack of independent oversight can limit the diversity of perspectives and expertise that are crucial for effective decision-making.

The Board of Directors is led by Mr. Masood Pervez, who serves as both the Chairman and the CEO of the Company. With an impressive tenure dating back to 1978, Mr. Masood has played a pivotal role in shaping the Company’s vision and strategic direction. His extensive experience is complemented by his past position as the President of the Hyderabad Chamber of Commerce, Trade & Industries, and his status as a life member of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI). Mr. Muhammad Usman has been associated with the Company for over 30 years. His long-standing involvement has contributed to the Company’s resilience and strategic development. Mr. Mohsin Masood joined the Company’s Board three years ago and represents the next generation of the sponsoring family. His addition to the Board reflects the family's commitment to succession planning and the integration of fresh perspectives into the Company’s governance.

The Board lacks formal sub-committees. However, during in FY24, the Board convened four times, with perfect attendance at every meeting. These meetings primarily focused on discussing annual audit affairs. The minutes of Board meetings are adequately documented.

Lately, the Company has appointed Rehman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants as its external auditors . The firm is QCR rated and in SBP’s panel of auditors in the “A ‘category and have expressed unqualified opinion on the financial statements as of Jun-24.

The Company’s organizational structure is designed with clear reporting lines, divided into four functions: Production, Finance, Sales & Marketing, and Procurement. Each function is overseen by its respective director or department head, who reports directly to the CEO. This structure ensures effective oversight and accountability across all areas of the company.

Mr. Masood Pervez, the CEO of the Company and Fimcotex Industries (Pvt.) Limited, brings an impressive 40 years of experience in the edible oil and textile sectors. His extensive industry knowledge and deep understanding of market dynamics have been instrumental in driving the Company’s growth and operational success. Mr. Masood is supported by a dedicated team of experienced professionals who bring a wealth of expertise and diverse backgrounds to the organization. Mr. Nadeem Afzal Khan is the Director finance having an experience of over 35 years. His extensive career includes significant expertise in banking sector.

There are no management committees in place. Management meets on need basis to ensure efficiency of the Company’s operations.

The Company utilizes Oracle ERP software tailored to meet its specific operational needs, enabling efficient management of various business processes. The software is regularly monitored by an inhouse IT function. Reports are prepared on need-basis for the management and Directors. This advanced solution ensures seamless integration and optimization of all business processes, driving operational efficiency and supporting informed decision-making across the organization.

To ensure operational efficiency, the Company has setup an internal audit function, which implements and monitors the policies and procedures of the Company.

Edible oil remains one of Pakistan’s largest imported commodities, with the industry marked by substantial import dependence, concentrated consumption patterns, and strong sensitivity to global price trends. Nearly 90% of the country’s edible oil is met through imports—primarily palm oil—while local production accounts for only about 10%. This heavy reliance has positioned Pakistan among the world’s top three palm oil importers. Indonesia and Malaysia remain the dominant suppliers, underpinning the country’s annual demand of roughly 5 million tonnes of ghee and cooking oil, including 3.5 million tonnes of imported palm oil. During the 5MFY24, Pakistan imported 1.319 million tonnes of palm oil valued at USD 1.26 billion, compared to 1.248 million tonnes worth USD 1.17 billion in the same period last year. The sector continues to face cost pressures, with import prices rising to around USD 1,100 per tonne in December 2024 from below USD 900 earlier in the year. Over 9MFY25, industry dynamics were shaped by global trends, as international palm and soybean oil prices averaged USD 1,007/MT and USD 1,097/MT, respectively, prompting corresponding movements in domestic prices. While prices remained elevated in early 2025, they eased in the second quarter amid declining inflation and a more stable exchange rate. Consumption recovered modestly, supported by population growth and gradual improvement in purchasing power. Sector revenues posted a slight YoY increase of around 1%, while gross profitability improved due to better input cost management. However, net margins stayed thin, underscoring the industry’s persistent exposure to external shocks. Looking ahead, the sector is expected to maintain stable performance, supported by a stronger PKR and improving macroeconomic fundamentals. Nonetheless, long-term resilience will depend on accelerating domestic oilseed cultivation to reduce reliance on global commodity cycles and enhance supply security.

Based on the total revenue generated by the oil industry, Pakistan Oil Mills commands a market share of slightly over 1%. This positioning reflects the Company’s presence and competitive stance within edible oil sector. By leveraging its diverse revenue streams and strategic initiatives, the Company can enhance its market share and strengthen its relative position in the industry.

The Company successfully diversified its revenue streams across multiple segments, contributing significantly to its overall financial stability. In FY25, the total revenue reached PKR 25,809mln, representing robust growth of 25.5% compared to last year (FY24: PKR 20,569mln). This substantial increase, which offsets the industry's broader challenges, suggests strong sales volumes and effective market penetration. The core business, Vegetable Ghee and Oil, accounted for 82.8% of total revenue during FY25 (up slightly from 81.3% during FY24). The remaining revenue came from by-products and other offerings, which include a decreasing contribution from Canola Meal (down to 16.9% from 18.3% during FY24), which was compensated by the successful introduction of new revenue streams like Soyabean Meal and Soyabean Hull. A notable aspect of the Company’s clientele remains its institutional strength, with major defense clients, including the Army and Navy, underscoring the Company’s strong reputation and stable positioning with large-volume clients.

The Company's significant reliance on imported raw materials—specifically oilseeds and RBD palm olein—maintains a heavy exposure to foreign currency risk and volatility stemming from global supply dynamics and currency rate fluctuations. While the Company achieved significant topline growth in FY25, this period was characterized by marked margin compression across all profitability tiers. The Gross Profit Margin declined by 210 basis points, from 8.8% in FY24 to 6.7% in FY25, primarily because the Company was unable to fully offset the spike in its Cost of Goods Sold (COGS), driven by elevated costs of raw materials, fuel, and power. Correspondingly, the Operating Profit Margin decreased from 6.5% to 5.0% during FY25. Despite these operating pressures, the Net Profit Margin remained stable, settling at 2.6% for FY25, illustrating the ongoing challenge of shrinking profitability caused by rupee devaluation and higher import costs, even amidst strong sales.

The long-term sustainability of the Company is inherently tied to its ability to manage operational dependencies and contribute to domestic import substitution. As the industry remains significantly reliant on imported raw materials like palm olein and oilseeds, the Company faces continuous exposure to foreign exchange risk and global commodity price volatility, which impacts financial sustainability. To partially mitigate this, the Company has strategically invested in crushing facilities, reflected in a notable increase in its capacity utilization for edible oil processing, rising from 36.3% in FY24 to 48.3% in FY25. This improved utilization, coupled with the successful introduction of new by-products like Soyabean Meal and Hull, indicates a strategic push towards maximizing local value addition and diversifying revenue away from purely imported refined products. While explicit ESG (Environmental, Social, Governance) data is unavailable, this focus on domestic processing and diversification represents a critical step towards enhancing supply chain resilience and contributing to the national objective of self-sufficiency in the edible oil complex.

The Company's working capital management showed a marked deterioration in efficiency during FY25, characterized by a significant lengthening of the Net Working Capital cycle to approximately 47 days, up from 41 days in the prior year. This elongation was primarily driven by an increase in the Inventory Days, which rose from 40 days in FY24 to 44 days in FY25. This indicates a higher quantum of capital is being absorbed by inventory holdings, likely to secure raw materials or buffer against supply chain volatility, thereby placing increased demands on liquidity. Compounding this pressure is the highly constrained nature of the Trade Payable Days, which remained severely low at only 1 day (down from 3 days during FY24). Such stringent payment terms confirm the Company's limited ability to leverage supplier credit, necessitating a greater reliance on internal cash flows or short-term financing to bridge the operating cash gap. The resulting stretch in the net working capital cycle signals a need for proactive liquidity management to sustain operations effectively.   

The Company demonstrated a significant enhancement in its Free Cash Flow from Operations (FCFO) during FY25, reaching PKR 996 million, marking a notable increase from the PKR 823 million reported in the preceding year FY24. This improvement in FCFO led directly to a substantial strengthening of the Company's ability to service its debt obligations. FCFO Coverage of Finance Cost improved robustly to 4.4x in FY25, a significant increase from 2.3x in FY24. This indicates a strong capacity to cover interest expenses from operating cash flows. In contrast, the EBITDA over finance cost ratio experienced a marginal decline, dropping to 3.2x in FY25 from 4.0x in FY24.The divergence between the FCFO and EBITDA coverage ratios suggests that while operating cash flow generation (FCFO) has improved significantly, the core operating profitability measure (EBITDA) relative to finance costs has softened. The debt payback metric improved to 0.9x in FY25 from 1.1x in FY24, signifying that the Company requires less than one year of current FCFO to fully retire its outstanding debt. The enhanced debt payback metric confirms a favorable debt profile. The substantial increase in FCFO and the resultant strengthening of the FCFO coverage of finance costs to 4.4x underscore a commendable improvement in the Company's operational cash generation and debt-servicing capability. However, management must acknowledge the marginal deterioration in the EBITDA over finance cost ratio.

The Company maintains a moderately leveraged capital structure, with a leverage ratio of 39.9% as of FY25 reflecting an increase from 33.2% during FY24. This trajectory indicates a measured and strategic approach to leveraging, aimed at balancing operational financing needs with the preservation of a robust equity base. As of FY25, the Company’s total borrowings amount to PKR 3,894mln, up from PKR 2,575mln in FY24. The entirety of this debt comprises short-term financing facilities (81.9%), specifically availed for working capital purposes such as inventory and receivables management. Despite the uptick in short-term borrowings, the Company’s capital structure remains well-balanced and conservative. Equity has continued to strengthen, increasing to PKR 5,868mln during FY25 from PKR 5,191mln during FY24—underscoring the Company’s ability to internally fund a significant portion of its growth while mitigating financial risk. This solid equity foundation enhances the Company’s financial resilience and supports its capacity to comfortably meet debt obligations without overextending its balance sheet.