Gas & Oil Pakistan Limited ('GO' or 'the Company') was incorporated as an unlisted public limited company in 2012 under the erstwhile Companies Ordinance, 1984 (now called the Companies Act, 2017). The Company acquired an OMC license in 2014 and commenced operations in Punjab in 2015, with subsequent expansions in Sindh, Khyber Pakhtunkhwa (KPK), Gilgit Baltistan (GB), and Balochistan. The Company began its operations by providing logistics services to other oil marketing companies. It steadily built a strong logistics network that has evolved into a vital service provider for major Oil Marketing Companies (OMCs). The Company is primarily engaged in marketing and selling petroleum products (POL). Currently, the Company operates the second largest retail network of ~1,329 stations, including ~75 company-operated company-owned (COCO) sites. To support the constantly growing retail network, the Company maintains numerous storage sites located throughout Pakistan. These sites hold a total storage footprint of ~87.5K MT for HSD and ~81.4K MT for PMG, including a dedicated storage facility at Fauji Trans Terminal Limited, with a capacity of ~36.3K MT. This enables the Company to effectively and efficiently capture its widespread customers. The Company's profile has been uplifted by the induction of Aramco.

The Company is ~40% owned by Aramco, while the remaining (~60%) shares are held by Mr. Khalid Riaz, his family, and friends. As Aramco, headquartered in Saudi Arabia with an operational history of more than 90 years, holds a considerable equity stake in the Company, the ownership is expected to remain stable. The sponsors have extensive industry experience with a significant concentration in oil & lubricant trading and distribution & transportation to OMCs in the international and local market. The Company is set to reap benefit from the sponsors vast expertise and operational capabilities. The sponsors have a firm financial footing. Aramco is rated A+ by Fitch.

The Board of Directors (BoD) comprises ten members, out of which four Directors are the representatives of Aramco. There are two Independent Directors on the BoD. Overall composition of the BoD ensures diverse experience and knowledge, along with the requisite independence in the decision-making process. The Chairman of the BoD, Mr. Shahid Mehmood Khan, possesses experience spanning over three decades across Pakistan's energy, automotive, and technology sectors. Mr. Tariq Kirmani, the Company's director, has more than 50 years of multifaceted experience in the corporate sector, both domestic and international. Mr. Nader D. Al Douhan is the Director of DS International Retail at Aramco, and holds over 25 years of experience in downstream, upstream, and corporate services. Other representative Directors of Aramco, Mr. Abdul Aziz, Mr. Usman Hamid and Mr. Davide Crespi also carry diversified experience of more than two decades. The induction of the Directors representing Aramco has strengthen the BoDs strategic oversight and policy formation process. The BoD meets on a quarterly basis with complete attendance and comprehensive documentation of minutes. Two BoD Committees, namely the Board Audit Committee (BAC) and Board HR and Compensation Committee (BHRCC), monitors the operations effectively. These Committees meet on a quarterly basis with adequate attendance. Minutes of the Committee meetings are recorded and documented adequately. The External Auditors of the Company, M/s. PKF FRANTS has expressed an unqualified opinion on the financial statements for the period ended Dec-24. The firm is QCR-rated and listed on the SBP panel.

The Company's operations are divided into three primary functional areas: i) Operations, ii) Finance, and iii) Sales. Each department is managed by a department head who reports directly to the CEO. He then reports to the Board, that makes pertinent decisions. While, the Head of Internal Audit & HR functionally reports to the respective Board Committees, and administratively to the CEO. Mr. Khalid Riaz, the Company's CEO, has been associated with GO for more than a decade. He has an overall experience of over three decades. Lately, Mr. Zahid Zuberi has joined as the Company's CFO, with an overall professional experince of ~3 decades. Mr. Zahid's appointment has been done in consensus with Aramco. Overall, the average experience of the senior management is of around three decades, reflecting a good management profile. The management team comprises seasoned professionals, each bringing a range of expertise in their respective fields. GO has constituted two management committees, including i) Procurement and ii) Credit. These Committees meet on a quarterly basis, and the minutes of these meetings are recorded and documented adequately. Anticipating the need for enhanced management efficacy, as Aramco joins in, management-level committees may add-in. The senior management receives a daily performance report on operations for optimal monitoring. The Company’s operating environment has now been upgraded to SAP S/4HANA. This has effectively integrated with all the departments and ensures proper financial and operational control. The Company operates an in-house internal audit department to oversee risk management, control, and governance processes. Furthermore, the quarterly are also reviewed by the external auditor This ultimately enhances business practices by establishing standard operating procedures (SOPs).

The Company has captured ~15% market share based on the sale of POL products as of Dec-25. The Company generates revenue from MS (~49%), followed by HSD (~50%) and HOBC (~1%). During CY24, the Company reported an increase of ~36.1% in net revenue to ~PKR 327.8bln (CY23: 240.9bln), primarily due to volume-driven growth. Gross margins declined to ~5.4% (CY23: ~10.5%) due to increased procurement costs. Similarly, the operating margin dropped to ~3.6% (CY23: ~8.4%) due to the trickle-down effect. On the other hand, the Company's net margins rose to ~1.0% (CY23: ~0.7%) due to low finance costs (CY24: ~PKR 8.2bln, CY23: ~PKR 11.3bln), which was an impact of reduced borrowing. During 6MCY25, the Company revenue witnessed an uptick of ~225%, reported at ~PKR 292.4bln (6MCY24: ~PKR 90bln) due to better volumes. While gross margin dipped to ~3.7%, due to higher discounts to capture sales volume and market share. Resultantly, the net profit margin was reported at ~0.7% (6MCY24: ~2.6%). GO holds a customer-centric strategy with a contemporary vision well-aligned with Aramco, which is a well-positioned global giant in the energy sector, managing upstream operations, downstream operations, and energy transition. This strategic introduction has considerably improved the Company's supply chain and overall financial health. Going forward, the Company's revenue are expected to grow as depicted by an uptick in volumes. Similary, profitability will also improve, while margins are expected to remain sustainable. Overall, the Company's performance is anticipated to improve.

The Company's financial risk is gauged through its working capital management, the Company's ability to built a suitable interest cover and its capital structure. GO has worked on its working capital management as reflected by an improved net working cycle to ~20 days in CY24 (CY23: ~30 days). This improvement primarily stems from a notable increase in trade payable days from ~37 days in CY23 to ~51 days in CY24, highlighting improved credit terms for product import provided by Aramco. Stable receivable days (CY24: ~35 days, CY23: ~34 days) further strengthen the Company's working capital cycle. While inventory turnover days increased to ~36 days (CY23: ~33 days), it was primarily due to a significant increase in the Company's inventory levels (CY24: ~PKR 49bln, CY23: ~PKR 16bln) to support its enhanced operations. As of 6MCY25, the inventory days improved to 36 days (6MCY24: 55 days), due to an increase in demand, whereas the trade receivable days also improved to ~25 days (6MCY24: ~53 days). Trade payable days posted an improvement to ~49 days (6MCY24: ~61 days), indicating the Company's efficiency in paying its creditors. On the net level, working capital days improved to ~12 days (6MCY24: ~47 days). As we advance, working capital management is expected to improve. The Company has managed to expedite its interest cover ability. As of CY24, the Company reported FCFO at ~PKR 13.2bln, reflecting a slight decline of ~3.65% (CY23: PKR ~13.7bln). This decline in FCFO was primarily driven by a reduced impact of finance cost reported at ~PKR 7bln (CY23: ~PKR 11bln). Nevertheless, the Interest Coverage Ratio improved to ~1.7x in CY24 (CY23: ~1.3x), attributed to declining finance costs. As of 6MCY25, the Company reported FCFO of ~PKR 6.4bln (6MCY24: ~PKR 8.6bln) due to reduced profit before tax. The finance cost also reduced to ~PKR 2.9bln (6MCY24: ~PKR 3.9bln), resulting in a stable interest coverage ratio of ~2.2x (6MCY24: ~2.2x). As we advance, improvements in coverage are anticipated and supported by lower interest rates, resulting in reduced finance costs. The Company reported a significant change in its leverage. As of CY24, the leverage ratio of the Company declined to ~49.5% (CY23: ~72.9%). The Company's total equity rose to ~PKR 32.4bln for CY24 compared to ~PKR 18.4bln for CY23, primarily due to the right issue, which raised the equity of the Company by ~10.6bln. Whereas, borrowings decreased to ~PKR 31.7bln in CY24 (CY23: ~PKR 49.6bln); majorly concentrated with STB’s ~PKR 24bln in CY24 (CY23: ~PKR 40.4bln) for working capital management. As of 6MCY25, the Company reported shareholders' equity at~PKR 34.4bln (~PKR 31.3bln), whereas total borrowings increased to ~PKR 46.7bln (6MCY24: ~PKR 33bln). This resulted in a leverage ratio of ~57.6% (6MCY24: ~51.3%). Capital adequacy of the Company is expected to remain strong, going forward.

GO has issued Long-Term Sukuk, a secured Shariah-compliant instrument of PKR 2.5 billion with a tenor of five years. The Sukuk carries a profit rate of 3MK + 1%. Proceeds from the issuance are being utilized to finance the expansion of the Company’s Company-Operated Company-Owned (COCO) retail fuel network. The instrument is secured against the Company’s existing COCO sites, with an independently assessed valuation of approximately ~PKR 3,483mln. The principal repayments will commence from the fifteenth month from the date of issuance and will be amortized through equal quarterly instalments over the remaining tenor.

The instrument is secured by a first-ranking charge over the existing COCO sites to cover the amount plus margin. The valuation of the existing COCO sites, placed as security, amounts to ~PKR 3,483mln. The valuation breakup of GO sites and Aramco rebranded sites is given in the table below:

There are no additional credit enhancement features attached with the instrument. Hence, the rating of the instrument is aligned with the rating of the issuer. The issuer has strong cashflow base, which is expected to provide substantial cover against the repayment of the principal and interest amount. As per the projections shared by the management, the proceeds of the instrument will enhance the penetration of COCO sites which will eventually lead to higher revenue generation and profitability. The cashflows of the Company will also get a boast snce the Company will be able to generate double margins on these COCO sites, i.e., dealer + OMC margins.