PACRA Maintains Entity Ratings of Jadeed Oil Extraction (Private) Limited.

The assigned ratings of Jadeed Oil Extraction (Pvt.) Limited (“Jadeed Oil” or “the Company”) reflects strategic importance within the Jadeed Group, which maintains a well-established presence across Pakistan’s poultry value chain. The Company remains a key component of the Group’s vertical integration strategy, ensuring consistent availability of raw materials for group entities while mitigating customer concentration risk. The operating environment remains challenging, as nearly 90% of Pakistan’s edible oil requirements are met through imports, predominantly palm oil, with local production accounting for only around 10%. The Company demonstrated operational resilience amid challenging industry dynamics marked by volatile global commodity prices, exchange rate pressures, and elevated import dependency within Pakistan’s edible oil sector. Procurement challenges emerged following restrictions on GMO imports, limiting the availability of Non-GMO seeds. Management responded by diversifying raw material procurement across soybean, rapeseed, canola, and sunflower seeds, while also expanding tolling arrangements, supporting operational continuity and supply chain optimization. Revenue composition remained largely tilted towards meal sales to group companies, particularly Jadeed Feeds. However, the Company’s top line dipped in FY25, declining to PKR 8,807 million (FY24: PKR 18,752 million), reflecting subdued volumes and challenging market conditions. Profitability indicators remained under pressure due to elevated input costs, higher energy prices, alongside competitive market dynamics, keeping gross margins thin during FY25. Despite margin constraints, cash flow generation and liquidity indicators remained adequate, supported by a relatively effective working capital cycle. Notwithstanding this, performance rebounded in September 2025, with revenue recorded at PKR 1,368 million, primarily driven by tolling arrangements with Jadeed Feeds. Profitability indicators for the same period improved markedly, with gross profit margin and net profit margin standing at 36.4% and 18.4%, respectively. The Company’s financial risk profile remained adequate, as leverage indicators improved on the back of controlled expenditure and a prudent financing mix. Borrowings continue to be predominantly short-term in nature, aligned with working capital requirements, while long-term debt remains limited. The ratings also factor in the extensive industry experience and strong oversight of the sponsoring family, with their active involvement in day-to-day operations and strategic decision-making provides comfort.
The Positive Outlook reflects expectations of gradual improvement in profitability, stable demand from group companies, and better absorption of fixed costs. Sustaining the outlook will depend on the Company’s ability to maintain margins amid commodity price volatility, manage foreign exchange exposure effectively, and further strengthen cash flow coverages. Any sustained weakening in earnings, liquidity, or debt metrics could exert pressure on the ratings.

About the Entity
Jadeed Oil Extraction (Pvt.) Limited was incorporated in November 2017 and is engaged in oilseed crushing, solvent extraction, and edible oil refining. The Company has an installed crushing capacity of 180,000 MT per annum. Jadeed Oil is majority owned by Jadeed Feeds, along with members of the sponsoring family. The Company operates as a strategic support unit for the Jadeed Group’s poultry operations.