MAL Pakistan Limited ('MAL' or 'the Company') is an unlisted public limited company incorporated in 1996 under the repealed Companies Ordinance,1984 (now called the Companies Act, 2017).

In 96, Mobil International Petroleum Corporation (MIPC), USA, and Army Welfare Trust ('the Trust'), Pakistan, entered into a shareholding agreement to form an unlisted entity named Mobil Askari Lubricants Limited (Mobil Askari), where ~70% shares were held by MIPC and ~ 30% stake resided with the Trust. In 2007,  the Trust acquired the entire shareholding in Mobil Askari. In 2007, ExxonMobil (Exxon) entered into a distribution agreement with Mobil Askari for the sole distribution and marketing of Exxon products in Pakistan. Later, Exxon entered into a blending agreement with Mobil Askari in respect of the blending, packaging, and sale of certain Exxon products in Pakistan, under the trademark of Exxon. The agreement has superseded the distribution agreement and is renewable every ten years. This agreement was executed through ExxonMobil Asia Pacific Pte Limited, Singapore. In 2000, Mobil Askari entered into a blending and commercial supply agreement with Indus Motor Company Ltd. In 2005, a Japanese-based ExxonMobil, Yugen Kaisha, agreed to provide technical assistance to Toyota Genuine Oils and chemical products, through which a local blending sub-licensing agreement was agreed for Indus Motor Company, Pakistan. This was renewed in 2010. In 2007, the Company was renamed as MAL Pakistan Ltd. In May-25, the Company agreed with ISUZU Company Ltd. to manufacture and sell ISUZU brands in Pakistan. Today, the Company operates in collaboration with some of the big names of the lube market, both locally and internationally.

The Company is primarily engaged in the blending, packaging, and distribution of lubricants and chemical products across Pakistan. The Company operates manufacturing and packaging capabilities under various licensing and blending agreements. These arrangements enable the Company to produce and distribute a diverse range of branded lubricants and chemical products, including those under the ExxonMobil trademarks. To support its operations, the Company has established an integrated infrastructure that facilitates nationwide distribution with a capacity of 75,000MT at Hub Factory, ensuring consistent availability of its products. The Company's registered office is situated in KDA Scheme 5, Clifton, Karachi, while the Lube Oil Blending Plant is located at Hub Chowki, Balochistan.

The Company is a wholly owned subsidiary of the Army Welfare Trust ('the Trust') holding ~99.98% of the shares, with the remaining ~1.2% equally distributed between 3 Directors of the Company.

The Company's ownership structure is expected to remain stable as the Sponsors are among the well-established investors holding interests across various sectors in Pakistan.

The Trust holds considerable footing across a diverse business spectrum in manufacturing, services, and the financial sector across Pakistan. A strong affiliation with international associations of the Sponsors suits well for the Company.

The Trust holds interests in diverse businesses and a strong equity base. Stable brand image, and increased hands-on knowledge of the various sectors ensures considerable strength to the Company. Demonstrated financial support from the Trust further adds strength.

Overall control of the Company vests with a six-member Board, out of which four non-executive Directors are the representatives of the Trust. There is one Independent Directors on the BoD. Adding independence to the BoD structure would bode well in the decision-making process, going forward.

The BoD, with a diversified background and relative expertise of its members, is the key source of oversight and guidance for the management. The Chairman of the BoD, Mr. Lt. Gen Nauman Mahmood (Retd), has 35 years of experience. Other representative Directors of the Trust also carry diversified experience of more than two decades, thus strengthening the BoD's policy formation process, and their induction is expected to strengthen the strategic oversight.

Three BoD Committees, namely the Audit Committee, HR and Compensation Committee, and Planning and Strategy Committee, monitor the operations effectively. The Committee meetings are held on a quarterly and biannual basis, with adequate attendance, and minutes of the meetings are recorded and documented adequately.

The External Auditors of the Company, M/s. Yousuf Adil has expressed an unqualified opinion on the financial statements for the period ended Dec-25. The firm is QCR-rated and is placed among A category firms on the SBP panel of auditors.

The Company holds a lean organizational structure with clear and segregated reporting lines. MAL operates through Finance, Operations, Automotive, Technical Services, Internal Audit, Human Resource, and IT departments; each is headed independently. All department Heads reports to the CEO, who then report to the BoD, where pertinent decisions is discussed and drafted. However, the Head of Internal Audit and HR administratively reports to the CEO, and functionally to the respective BoD Committee.

MAL's management team comprises seasoned professionals, each bringing a range of expertise in their respective fields. Mr. Khawar Jamal, the CEO, has an overall experience of 36 years. The CFO, Mr. Tariq Farooq has an overall experience of 36 years. The average experience of the top management is ~21 years, reflecting a good management profile.

The management decision-making process is currently facilitated by a Management Committee (ManCom), comprising all departmental Heads that meets to discuss pertinent matters and evaluate strategies. Minutes of each meeting are documented comprehensively. Anticipating the need for enhanced management efficacy, management-level committees may add-in.

Top management receives a monthly performance report of operations, which results in optimal monitoring. 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. This ultimately enhances business practices by establishing standard operating procedures (SOPs).

Pakistan relies significantly on imports to meet its energy demand. During FY25, the country consumed ~16.3mln MT of petroleum products (FY24: ~15.3mln MT), an uptick of ~7% YoY. This uptick was primarily due to three reasons: higher demand following a reduction in HSD and MS prices, curtailment of smuggled oil products, and an increase in automobile sales. MS remained the volume leader with sales of ~7.6mln MT (FY24: ~7.14mln MT), an uptick of ~6%, followed by HSD (FY25: ~6.89mln MT, FY24: ~6.26mln MT), an uptick of ~10%. However, FO witnessed a sharp decline of ~23% (FY25: ~0.81mln MT, FY24: ~1.04mln MT). Currently, there are ~35 registered OMCs. There are five (5) Listed OMCs operating in the country, namely (i) Pakistan State Oil (PSO), (ii) Shell Pakistan (SHELL), (iii) Hascol Petroleum (HASCOL), (iv) Hi-Tech Lubricants (HTL), and (v) Attock Petroleum (APL). Going forward, consumption of petroleum products is expected to follow the same trajectory.

The Company captured ~7% market share based on the sale of lubricant products.

The Company generates revenue from the sale of lubricant, grease, chemical, and petroleum products. MAL's revenue stream has sustained its upward trajectory in CY25, with net revenue growing by ~13.3% to ~PKR 10,831mln (CY24: ~PKR 9,559mln). The growth is underpinned by improved sales volumes across owned manufactured and purchased product lines, supported by the Company's entrenched distribution network and continued association with global lubricant brands. The revenue stream is expected to remain on a positive trajectory as the Company expands its distribution infrastructure and taps new product segments.

The Company's business margins demonstrated a meaningful recovery in CY25. Gross margins improved to ~16.9% (CY24: ~15.7%), reflecting a combination of better pricing realization, and product mix optimization. The operating margin remained broadly stable at ~7.3% (CY24: ~8.0%). On the net level, margins improved to ~2.7% (CY24: ~2.2%), as the significant decline in finance cost to ~PKR 209mln (CY24: ~PKR 303mln), driven by a sharp reduction in the effective borrowing rate. Going forward, gross margins are expected to remain stable.

The Company is eyeing on expanding its existing network; while has already partnered with renowned and well-positioned global lubricant players. The Company and foreign investors have agreed to enter into a shareholding agreement to form Minelubes & Chemicals (Pvt) Ltd. (Minelubes), in which the Company will be holding ~60% stake. Minelubes will primarily focus on the mining sector in Pakistan. This is expected to become operational by Aug-25. Moreover, the Company has acquired ~4 acre of land in Korangi Creek Industrial Park (KCIP) and plans to setup a Lube Oil Blending Plant with an estimated CAPEX of ~PKR.1.2bln, housing a capacity of 75,000 MT. For this, the Company is eyeing on acquiring a long-term financing facility of ~PKR 1bln from UBL; while ~PKR 200mln will be injected by AWT. A chemical storage facility worth ~PKR 100mln in KCIP will also become commercially operational by CY25. Timely and successful materialization of the said initiative are expected to bode well for the Company.

MAL's working capital management exhibited a notable elongation in CY25, reflecting the Company's growing scale of operations and evolving procurement dynamics. Gross working capital days widened to ~151 days (CY24: ~74 days), while net working capital days extended to ~84 days (CY24: ~45 days). The expansion in gross working capital was primarily driven by a build-up in trade receivables to ~PKR 1,941mln (CY24: ~PKR 1,567mln), equivalent to approximately ~65 receivable days. Inventory levels moderated slightly to ~PKR 2,677mln (CY24: ~PKR 2,797mln) and remain anchored to the Company's procurement cycle for imported base oils. Trade payables rose to ~PKR 2,247mln (CY24: ~PKR 1,753mln), partly offsetting the increase on the asset side. The current ratio stood at ~1.86x (CY24: ~2.03x), reflecting an adequate liquidity buffer. The Company continues to fund its working capital requirements through short-term borrowings and FCFO. 

Interest coverage metrics improved materially in CY25. EBITDA to finance cost coverage strengthened to ~3.3x (CY24: ~1.9x), while FCFO coverage of finance cost, current maturities of long-term borrowings, and excess short-term borrowings stood at ~1.8x (CY24: ~2.0x). FCFO for CY25 was reported at ~PKR 435mln (CY24: ~PKR 596mln), while EBITDA stood at PKR 640mln as compared to PKR 543mln during the previous year. Going forward, with the anticipated drawdown of long-term financing for the KCIP plant coming on stream, finance costs are expected to rise, which will require the Company to sustain earnings growth to preserve coverage ratios at adequate levels.

The Company's capital structure remained adequately leveraged in CY25. Total borrowings stood at ~PKR 1,666mln (CY24: ~PKR 1,667mln), comprising short-term running finance facilities of ~PKR 1,565mln and lease liabilities of ~PKR 100mln. The equity base strengthened to ~PKR 1,456mln (CY24: ~PKR 1,416mln), supported by retained earnings. The leverage ratio improved marginally to ~53.3% (CY24: ~54.1%), majorly consisting of short-term borrowings at 94%. AWT's demonstrated financial support further strengthens the Company's access to capital. As the Company progresses with its planned CAPEX programme, leverage is expected to rise, though is anticipated to remain at moderate levels given the equity injection planned from AWT.