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

Aslam Energy (Pvt.) Limited's (‘Aslam Energy’ or ‘the Company’) ratings reflect its affiliation with Flow Petroleum (Pvt.) Limited along with a strong business profile. The ratings factor in the sponsor's extensive experience. The Company is primarily engaged in two business segments namely i) Trading & Distribution of POL products and ii) Fleet Logistic services to various OMCs. The Trading segment is further split into retail and bulk sale units. Under the retail side, the Company sells on cash/fuel cards through a network of ~47 retail stations, primarily spread out in the Punjab region; whereas, under the bulk sale side, the Company provides POL products directly to corporate customers on credit. The Company owns a fleet of 34 lorries, where overall fleet revenue is generated from its group companies, i.e. Flow Petroleum & Quality 1. The Company experienced a consistent uptrend in revenues. During FY23, the revenue grew significantly by ~120%. The Company's prime revenue (~98%) is generated from the trading and distribution business; while ~2% is generated from carriage services. However, the Company's margins experienced a decline due to high procurement costs combined with the inflationary impact on operational expenses. Aslam Energy has strategically acquired ~65% stake in TransAsia Refinery Limited (TRL), while the remaining shares are held by Sponsors and affiliates (i.e., Flow Petroleum (Pvt.) Limited). Once the refinery becomes fully operational, this strategic investment is expected to enhance Aslam Energy’s operational capabilities. However, transpiring the modalities of the transaction as per the pre-defined timeline remains imperative.
In terms of its financial risk profile, the Company maintains adequate coverage and a stable working capital cycle, supported by a low-leverage capital structure. The recent injection of ~PKR 950mln in the equity base supports the overall equity standing of the Company.
The rating takes comfort from stable management, prudent decision-making and consistent revenue generation. Moreover, the ratings remain dependent on the Company'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 Energy (Pvt.) Limited ('Aslam Energy' or 'the Company') was incorporated as a private limited company in 2018 under the repealed Companies Act'17. The Company primarily trades and distributes Diesel, Petrol, and Lubricants, while also offering fleet logistics services.
The Company is owned by Mr. M. Waris (~34%), Mr. Asif (~33%), and Mr. Rana M. Arif (~33%). Mr. Arif serves as the Chairman & CEO of the Company. He is assisted by a team of experienced professionals.