Flow Petroleum (Pvt.) Limited

RATING REPORT | May-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
05-May-26 A- A2 Stable Maintain -
06-May-25 A- A2 Stable Maintain -
14-Jun-24 A- A2 Stable Upgrade -
16-Jun-23 BBB+ A2 Stable Maintain -
17-Jun-22 BBB+ A2 Stable Maintain -
About the Entity

Flow Petroleum (Pvt.) Limited ('Flow Petroleum' or 'the Company') was incorporated as a private limited company in 2017 under the repealed Companies Act, 2017. The Company is engaged in the procurement, storage, distribution, marketing, and import of petroleum products and lubricants. With a network of ~125 retail outlets, the Company holds ~1% of the market share in total sales and has a storage capacity of around 5,350 MT. The Company's ownership vests with Mr. M. Waris (~51%) and Mr. M. Asif (~49%). Mr. Haroon Rasheed, a Non-Executive Director, has been recently appointed as the Chairman of the Company. Mr. M. Waris heads the Company as the CEO

Rating Rationale

Flow Petroleum (Pvt.) Limited ('Flow Petroleum' or 'the Company') continues to strengthen its foothold as an emerging player in the oil marketing companies (OMC) sector. The ratings reflect a sustained improvement in the Company's business and financial profile, underpinned by strong topline momentum, improved profitability, and disciplined working capital management. The Company maintains a network of ~125 retail outlets supported by strategically located storage facilities at Fakirabad (5,623MT), Daulatpur, and Kohat, with a cumulative incremental capacity of ~12,229MT. The planned merger with Quality 1 Petroleum, which would integrate ~450 stations (~250 operational) and add ~11,095MT of storage, remains a key strategic catalyst, and its timely execution remains essential to ratings stability. The Company's affiliation with Aslam Energy (Pvt.) Limited, with its established logistics presence, continues to supplement operational efficiency. During 1HFY26, the Company recorded net revenues of PKR ~44.2bln, reflecting a robust annualized growth of ~111.7% over the prior year's base, driven by volumetric expansion and favourable price dynamics. Gross profit margin improved to 3.6% in 1HFY26 from 2.0% in FY25, while the operating profit margin strengthened to 2.9% from 0.4%, signaling recovery in core business economics. Net income for 1HFY26 stood at PKR ~938mln, a material improvement over PKR ~159mln in FY25. On the financial risk front, the Company maintains adequate coverage metrics and a stable working capital cycle. The capital structure remains modest, keeping leverage at an adequate level. During FY25, the Company acquired a controlling interest in Flow Karachi Terminal Limited (formerly TransAsia Refinery Limited), aimed at enhancing vertical integration, strengthening supply security, and improving pricing efficiency across the value chain. This transaction has been undertaken in collaboration with its related party, Aslam Energy (Pvt.) Limited, resulting in notable intercompany exposures. Accordingly, the materiality of related party balances—particularly payables to Aslam Energy—and the clarity around structured repayment arrangements remain key consideration. Timely settlement of these obligations, alongside transparent governance of related party transactions, will be critical in sustaining the Company’s financial risk profile.

Key Rating Drivers

The ratings are dependent on Flow Petroleum’s ability to improve market penetration along with business margins. Successful and timely materialization of the Company's strategic initiatives (retail expansion, making FKTL operational, and incorporating lubricants into the revenue stream) remains imperative to the ratings. Streamlining the governance framework remains crucial.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Flow Petroleum (Pvt.) Limited


Rating Analysis

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Profile
Legal Structure

Flow Petroleum (Pvt.) Limited ('Flow Petroleum' or 'the Company') was incorporated as a private limited company in Feb-17 under the repealed Companies Act, 20'17.


Background

Rana Muhammad Aslam (Late) initiated the business in the early 1980s under the name "Aslam Oil Traders"(the Group), concentrating on logistics and establishing a significant presence. Starting on a modest scale, the Company has since expanded its operations and grown its reach. In a strategic decision to enter the oil marketing sector, Flow Petroleum was established in Feb-17 and registered with the Securities and Exchange Commission of Pakistan. The Company acquired an OMC licence on April 05, 2018.


Operations

The Company is engaged in the procurement, storage, distribution, marketing, and import of petroleum products and lubricants. With a network of ~125 retail outlets, the Company has a storage capacity of 5,623MT at Fakirabad, and is also constructing two new storage sites at Daulatpur and Kohat with an approximate cumulative storage capacity of 12,229MT. Lately, the Company has merged the Group's investment in Quality 1 Petroleum with and into Flow Petroleum. This has expanded the Company's retail network to ~450 total stations out of which ~250 are operational, and the management is gradually integrating them into Flow Petroleum. The merger has added ~11,095 MTs to the Company’s storage capacity.


Ownership
Ownership Structure

Ownership of the Company lies with two brothers, Mr. Muhammad Waris, holding ~51%, and Mr. Muhammad Asif, holding ~49% of the shares.


Stability

The ownership structure has been stable since the Company's inception and is anticipated to remain unchanged in the foreseeable future


Business Acumen

Flow Petroleum benefits from its affiliation with the Group, which has been active in the petroleum, oil, and lubricants (POL) business since the 1980s. This connection provides the Company with valuable experience and industry-specific knowledge. Moreover, the Company is led by experienced professionals in Pakistan's oil sector, reinforcing its strong business acumen.


Financial Strength

The Company's sponsors have demonstrated unwavering dedication to providing comprehensive support. The Group's platform serves as a solid foundation, bolstering the Company's financial strength. The sponsors have stakes in various businesses, including Aslam Energy, Aslam Sons, and Flow Base.


Governance
Board Structure

The Board primarily comprises family members, specifically two brothers, Mr. Muhammad Waris and Mr. Muhammad Asif. Recently, the Company onboarded two Independent Directors and a Non-Executive Chairman, Mr. Haroon Rashid, who has strengthened the Company's decision-making process.


Members’ Profile

Mr. Muhammad Waris serves as the CEO and brings in an extensive experience of over 18 years in the petroleum industry. He has been actively engaged at the executive level across all stages of business operations. His exceptional mindset and leadership qualities have provided the vision and determination propelling Flow Petroleum. In addition to his technical expertise, he holds a Bachelor’s degree in Mechanical Engineering from NUST. Furthermore, the other member of the Board also possesses significant experience in the oil and marketing industry.


Board Effectiveness

The Board operates efficiently through HR and Audit Committee. Meetings of these committees are conducted on a frequent basis to address potential opportunities and devise strategic plans for the Company. However, there is room for improvement to help the Board deliver its strategic goals and objectives.


Financial Transparency

The External Auditors of the Company, M/s. BDO Ebrahim & Co. Chartered Accountants expressed an unqualified opinion on the Financial statements for FY24. The firm is QCR rated and is placed in category A of the SBP's panel of auditors.


Management
Organizational Structure

Flow Petroleum deploys a horizontal organizational structure which functions across four key areas: (i) Retail & Commercial, (ii) Finance & Accounts, (iii) Marketing & Sales, and (iv) HR & Admin. Each department is managed by respective Heads that reports directly to the CEO. He then, with consent of the Board, makes pertinent decisions. The CEO is the man at the last mile.


Management Team

Mr. Muhammad Waris is the CEO of Flow Petroleum and has extensive experience of more two decades in the Retail & Oil Transportation sector. He has been associated with the Company since its inception. He is supported by a team of skilled professionals.


Effectiveness

Flow Petroleum constituted one committee at the managerial level, Risk Management Committee, which is involved in strategic decisions. Meetings are conducted as and when required and no formal minutes are documented.


MIS

The Company has installed SAP that integrates well with all business functions, and readily generate management reports.


Control Environment

The Company has outsourced its internal audit department to M/s. PKF F.R.A.N.T.S. This partnership enhances risk management, control, and governance processes, as well as improves business practices by establishing standard operating procedures (SOPs)


Business Risk
Industry Dynamics

Pakistan heavily depends on imports for its energy requirements due to limited domestic PoL production. A substantial increase in PoL import costs was witnessed due to global challenges. This along with rupee depreciation further impacted the local overall cost structure. During FY24, the demand for POL products declined by ~9% due to macroeconomic pressures. Transportation and Power sectors remain the main consumers, accounting for ~89% of the total demand. Despite having fixed margins, OMCs bear the impact of high working capital costs, which have risen sharply due to the aforementioned factors. This requires vigilance over the short to medium term for the OMC sector.


Relative Position

During FY24, Flow Petroleum captured a market share of ~1% based on total sales.


Revenues

During FY24, the revenue of the Company witnessed a substantial improvement of ~22.6% and clocked at ~PKR 59,641mln (FY23: ~PKR 48,632mln). Improvement in revenue was attributed to price change coupled with improvement in volumetric sales. Going forward, improvement in volumetric sales is anticipated as the Company progresses to increase market concentration


Margins

Owing to high operational expenses and the mismanagement of resource deployment during FY24, the Company's overall margins posted a decline. Gross margin decreased to ~2.5% (FY23: ~5.5%). Similarly, the operating margin declined to ~1.7% during FY24 (FY23: ~4.8%), owing to trickling-down impact. The net profit margin of the Company was reported at ~0.1% (FY23: ~5.3%). Moving forward, the Company’s margins are expected to remain stable


Sustainability

The Company recently developed two new storage facilities in Daulatpur and Kohat, which will augment its storage capacity by 12,000 MT and expand its retailer network. Flow Petroleum has also acquired a ~51% stake in TransAsia Refinery Limited (TRL). The modalities of this transaction remain imperative; however, this investment is expected to enhance the operational capabilities of the Company, if and when operational.


Financial Risk
Working capital

As of FY24, Net Working Capital days increased to ~37 days (FY23: ~33 days). This increase was due to the Company's trade receivable days and inventory days increasing to  ~21 days as of FY24 (FY23: ~16 days) and ~33 days as of FY24 (FY23: ~22 days), respectively. Meanwhile, trade payable days of the Company increased to ~17 days as of FY24 (FY23: 5 days). During FY24, the Company's total leverage was reported at ~(-12.2)% (FY23: ~2.5%,) showing that the Company has no further room to safely borrow, increasing its financial risk.


Coverages

As of FY24, the Company observed a decline in the interest coverage ratio, reported at ~16.7x (FY23: ~39.0x); however, it still remains sufficient to meet short-term obligations. This reduction is attributed to a significant increase in finance costs. As of FY24,  the Company's finance cost stood at ~PKR 114mln (FY23: ~PKR 36mln). The Company experienced low net income, influenced by the high financing costs, resulting in decreased EBITDA, ultimately impacting the interest coverage ratio. Moving forward, the Company's coverage will remain stabl


Capitalization

The Company's capital structure remained leveraged; however, it showed a significant improvement as of FY24 and reported a debt-to-equity ratio of ~54.1% (FY23: ~65.6%). This positive shift can be attributed to a significant decline in credit bills for imports (FY24: ~PKR 3,993mln, FY23: ~PKR 6,890mln). On the other hand, the Company's equity increased to ~PKR 3,954mln in FY24, up from ~PKR 3,918 mln in FY23. To meet working capital requirements, the Company is highly dependent on STB, which stood at ~PKR 4,056mln in FY24 (FY23: ~PKR 6,942mln).
 
 

May-26

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Flow Petroleum (Pvt.) Limited


Financial Summary

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(PKR mln)


 Dec-25
6M		 Jun-25
12M		 Jun-24
12M		 Jun-23
12M
A. BALANCE SHEET
1. Non-Current Assets 3,672 3,689 3,308 2,018
2. Investments 0 0 0 0
3. Related Party Exposure 2,018 6,112 2,706 2,359
4. Current Assets 20,479 12,744 10,801 10,349
a. Inventories 7,853 5,067 5,918 4,932
b. Trade Receivables 8,284 4,946 3,336 3,547
5. Total Assets 26,169 22,544 16,815 14,726
6. Current Liabilities 14,688 9,824 7,859 3,211
a. Trade Payables 5,690 6,454 4,315 1,198
7. Borrowings 5,884 5,952 4,115 6,942
8. Related Party Exposure 330 2,595 548 543
9. Non-Current Liabilities 71 52 341 112
10. Net Assets 5,195 4,122 3,954 3,918
11. Shareholders' Equity 5,195 4,122 3,954 3,918
B. INCOME STATEMENT
1. Sales 44,218 41,773 59,641 48,632
a. Cost of Good Sold (42,608) (40,954) (58,151) (45,961)
2. Gross Profit 1,610 818 1,490 2,671
a. Operating Expenses (316) (666) (498) (322)
3. Operating Profit 1,294 152 992 2,349
a. Non Operating Income or (Expense) 116 975 (237) (1,414)
4. Profit or (Loss) before Interest and Tax 1,409 1,127 755 935
a. Total Finance Cost (116) (691) (114) (36)
b. Taxation (355) (277) (602) (361)
6. Net Income Or (Loss) 938 159 38 538
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 1,291 909 1,208 (1,210)
b. Net Cash from Operating Activities before Working Capital Changes 1,198 264 1,131 (1,234)
c. Changes in Working Capital (894) 2,478 (10) 263
1. Net Cash provided by Operating Activities 304 2,741 1,121 (972)
2. Net Cash (Used in) or Available From Investing Activities (39) (2,575) (1,338) (1,078)
3. Net Cash (Used in) or Available From Financing Activities (57) (94) 197 45
4. Net Cash generated or (Used) during the period 208 72 (21) (2,005)
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 111.7% -30.0% 22.6% 206.2%
b. Gross Profit Margin 3.6% 2.0% 2.5% 5.5%
c. Net Profit Margin 2.1% 0.4% 0.1% 1.1%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 0.9% 8.1% 2.0% -1.9%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 40.3% 3.9% 1.0% 22.0%
2. Working Capital Management
a. Gross Working Capital (Average Days) N/A N/A N/A N/A
b. Net Working Capital (Average Days) 2 -11 4 11
c. Current Ratio (Current Assets / Current Liabilities) 1.4 1.3 1.4 3.2
3. Coverages
a. EBITDA / Finance Cost 43.1 1.8 23.6 -30.9
b. FCFO / Finance Cost+CMLTB+Excess STB 22.3 0.3 1.0 -16.6
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.2 25.8 1.5 -0.5
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 54.5% 67.5% 54.1% 65.6%
b. Interest or Markup Payable (Days) 2.0 96.4 45.4 26.4
c. Entity Average Borrowing Rate 1.2% 10.5% 1.3% 0.4%

May-26

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Flow Petroleum (Pvt.) Limited


Rating Scale

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May-26

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Flow Petroleum (Pvt.) Limited


regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
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      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
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