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The Pakistan Credit Rating Agency Limited
Press Release

Date
27-Aug-21

Analyst
Muhammad Noor Ul Haq
noorulhaq@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA maintains Entity Ratings of BE Energy Limited

Rating Type Entity
Current
(27-Aug-21)
Previous
(28-Aug-20)
Action Maintain Maintain
Long Term A+ A+
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

The ratings take comfort from the strong sponsorship of BE Energy, the Saudi based BE Group (previously known as the Bakri Group). The sponsor has global presence in energy related businesses, including operations in the downstream oil segment, located in various countries of Asia and Africa. Historic presence of BE Group dates back to 1994, when it operated as a supplier to PSO, subsequently participating in the OMC market in 2006. BE Energy has captured market share of ~3% as at Mar-21, gained through ~389 retail pumps spread across the country. Further, the Company holds an oil storage infrastructure of 207,725 MTs distributed between six terminals, spread across Port Qasim, Machike, Shikarpur, Daulatpur, Sahiwal and Mehmood Kot. The key product portfolio of the Company comprises of four products; HSD, MOGAS, HSFO and Lubricant, with HSD and MOGAS being key revenue generators. An additional revenue stream of hospitality income is generated through subletting of unutilized storage units. The conservative strategy adopted by BE Energy has aided in the distressed times caused by COVID-19, with gradual recovery observed in the period. BE Energy has maintained an adequate financial risk profile through moderate coverage indicators and leveraging.
The rating remains dependent on BE Energy’s ability to enhance its capacity utilization, through infrastructure and supply chain development, in order to augment its market penetration and strengthen its relative position. Sustainability of bottom-line and key financial metrics, in terms of working capital ratios, financial coverages and gearing, remain crucial to the rating.

About the Entity
BE Energy Limited incorporated in Pakistan and commenced its operations in 2007. BE Energy is owned by Rawafid Investments LLC (~90.97%) based in UAE and Energy Petroleum Consultant Company (9%) based in Kuwait. The shareholding of Rawafid Investments LLC lies with the members of Bakri family. BE Group was founded in late 60's, the group provides aviation fuel services, shipping, time charter services, shipping management & marine support services in the middle east. Primarily, BE Energy is engaged in the procurement, storage, distribution, marketing and import of petroleum products and lubricants.
The board of BE Energy comprises five experienced professionals, including the CEO. Two members are sponsors of BE Group, while two members hold key positions in the group. All the directors are actively involved in the oversight of the company. Mr. Hussain Al Shammaa is the CEO of the company. He has been involved in the oil business for the last 36 years and was previously associated with Kuwait Petroleum Company (KPC). The company plans to enhance its board to seven members, while also adding independent directors.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.