The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Maintains Entity Ratings of Aslam Energy (Pvt.) Limited

Rating Type Entity
(17-Jun-22 )
(17-Jun-21 )
Action Maintain Initial
Long Term BBB+ BBB+
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

Aslam Energy’s ratings incorporate the moderate business risk profile, in tandem with a favorable industry outlook post recovery in international oil prices. The ratings further factor in the strong business and financial linkages with the group company. AEPL primarily engages in petroleum marketing and petroleum logistics. The key product portfolio of the Company comprises of MS, HSD and HSFO. Further, a significant portion of the Company’s income can be accredited to the revenue generated by the transportation services offered. With a fleet of seven functional oil tankers (leased & Owned), the Company essentially offers transportation services to its sister concern, Flow Petroleum. After a two-year hiatus caused by Pandemic’19, a rise in the demand for petroleum products can be witnessed. Since AEPL has a diverse customer base comprising of clients from various sectors, the resumption in economic activities has translated into augmented revenues, stable margins and enhanced working capital management. The revenue generated in FY21 increased to PKR~7,466mln (FY20: PKR~4,149mln), exhibiting a sales growth of 79.9%. While the coverages, including interest coverage and total operating coverage, experienced a slight dip in FY21, they are still sustained at good levels.
The rating takes comfort from stable management, prudent decision-making and consistent revenue generation. Moreover, the ratings remain dependent on AEPL's ability to maintain a sound financial profile, enhance capacity utilization through infrastructure and supply chain development, increase market share and market penetration amidst rising competition, and censure effective management of trade debts.

About the Entity
Aslam Oil Traders started its operations in 1980s as sole proprietor and later was incorporated as private limited concern in 2018 under the name of Aslam Energy (Pvt) Ltd (AEPL). 'The Company' fundamentally engages in the logistics and distribution of petroleum and other related products. AEPL is owned by three brothers, Mr. Muhammad Waris, Mr. Asif and Mr. Rana Muhammad Arif with 34%, 33% and 33% stake in the Company respectively. AEPL’s office is located in Model Town, Gujranwala. Presently, the Group has three entities in its ambit: Aslam Energy (Pvt.) Ltd., Flow Petroleum (Pvt.) Ltd. and Aslam Sons and Company. The Company is in charge of the administration of thirteen filling stations, mainly located in Punjab. The CEO of AEPL, Mr. Rana Muhammad Arif is equipped with an extensive, relevant experience in the field of oil marketing and trading. The Board, comprises of three members.

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 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.