The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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

Rating Type Entity
(16-Jun-23 )
(17-Jun-22 )
Action Maintain Maintain
Long Term BBB+ BBB+
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

The assigned ratings incorporate Aslam Energy (Pvt.) Ltd.’s extensive experience of sponsors and the Company’s lengthy operating track record. The ratings further factor in the strong business and financial linkages with the group company. The Company is primarily engaged in two business segments namely i) Trading and distribution of POL products. This segment is further split into retail and bulk units. Under the retail side, the Company operates a network of 56 retail stations as at Dec'22 which is mainly spread out in the Punjab region whereas, under the bulk segment the company provides POL products directly to customers ii) Furnishing fleet logistic services (Carriage income) to OMCs, mainly to sister concern; Flow Petroleum. During FY22, the revenue of the Company increased to PKR 20,758mln (FY21: PKR~7,465mln), exhibiting a sales growth of ~178%. Revenue from sales of POL products represents largest portion of total sales (~98%), whereas remaining (~2%) from fleet income. However, Financial risk profile of Aslam Energy is characterized by adequate leveraged capital structure. In addition, the Company has experienced an improvement in its cashflows, which has further contributed to its ability to effectively manage financial risk.
The rating takes comfort from stable management, prudent decision-making and consistent revenue generation. Moreover, the ratings remain dependent on AEPL'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 Oil Traders started its operations in 1980s as sole proprietor and later was incorporated as private limited concern in 2018 under the name of Aslam Energy (Pvt) Ltd (AEPL). 'The Company' fundamentally engages in the logistics and distribution of petroleum and other related products. AEPL is owned by three brothers, Mr. Muhammad Waris, Mr. Asif and Mr. Rana Muhammad Arif with 34%, 33% and 33% stake in the Company respectively. The Company's registered office is located in Lahore. Presently, the Group has three entities in its ambit: Aslam Energy (Pvt.) Ltd., Flow Petroleum (Pvt.) Ltd. and Aslam Sons and Company. The Company is in charge of the administration of ~56 filling stations during as at Dec'22, mainly located in Punjab. The CEO of AEPL, Mr. Rana Muhammad Arif is equipped with an extensive, relevant experience in the field of oil marketing and trading. The Board, comprises of three members.

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.