The Pakistan Credit Rating Agency Limited
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Muhammad Mubashir Nazir

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PACRA Assigns Initial Entity Ratings to Aslam Energy (Pvt.) Limited

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

The ratings reflect the stable business profile of Aslam Energy (Private) Limited. Sponsors have been engaged in the business for over three decades reflecting strong business acumen. The company is primarily engaged in two business segments namely i) Trading and distribution of diesel, petrol, related products. This segment is further split into retail and bulk units. Under the retail side, the company operates a network of ~13 retail stations which is mainly spread out in the Punjab region whereas, under the bulk segment the company provides PoL product directly to customers ii) Furnishing fleet logistic services (Carriage income) to OMCs, mainly to sister concern ; Flow Petroleum.

Company’s profits are being generated in tandem, equally from both the fleet logistic and distribution. The fleet, though small in size, is expected to be augmented. This will enhance the profitability going forward.

Financial risk profile of Aslam Energy is characterized by adequate leveraged capital structure. This along with improved cashflows help manage the financial risk. Adequate coverages lend support to financial profile; the company does not have any long term borrowings. Aslam Energy is refining its control and governance structure. An extensive ERP is being installed. The company is also bolstering its finance and audit team. The overall governance framework is also being enhanced. Aslam Energy capitalizes on strong entrepreneurial capital of its sponsors, having significant knowledge in oil trading segment from its sister concern, Aslam Oil Traders.
The ratings are dependent on the management's ability to sustain its business volumes while holding the margins. Improvement in margins would remain important. Growth in the business and financial profile along with effective changes in governance framework would be beneficial for the ratings. Meanwhile, financial transparency is considered important.

About the Entity
Aslam Energy Private Limited (AEPL) was incorporated in July 2018. The Company is principally engaged in trading of petroleum and its related products while providing transport services. The registered office of the Company is situated in Gujranwala. The shareholding of the company is equally split amongst three brothers i.e. Mr. Muhammad Waris, Mr. Muhammad Arif and Mr. Muhammad Asif. The group under the stewardship of Mr. Waris has been involved in the oil trading segment since the last three decades.

Mr. Muhammad Arif, is the CEO of the company. He has been associated with the company for over three decades. He is supported by a team of experienced personnel. The company has a three-member board which constitutes the shareholders.

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.