PACRA Assigns Initial Entity Ratings to Polaris Danah Natural Resource Development (Pvt.) Limited

Polaris Danah Natural Resource Development (Pvt.) Limited (“the Company” or “PDNRD”) is a newly established seismic survey company operating in Pakistan. The assigned ratings incorporate PDNRD's affiliation with Polaris Inc., a globally acclaimed provider of seismic exploration and geophysical services, with a legacy dating back to 1996. Polaris Inc. operates across multiple continents and has earned a decent reputation for successfully delivering projects and maintaining sound financial health. The Pakistan operations, under the leadership of CEO Mr. Abdel Latif Hakkoumi, signify a strategic move into a region with substantial potential for seismic exploration. Business development initiatives across the group are driven by Mr. Bill Mooney, the visionary founder of Polaris Inc., whose leadership has been instrumental in the group’s global success. PDNRD is currently in the process of bidding for projects and has yet to secure revenue. The Company takes benefits from the extensive expertise of its parent entity. In FY22, Polaris Inc. the Parent entity recorded revenues of $15mln (FY21: $22mln) and net earnings of $1.05mln (FY21: $2.55mln). The decline in financial performance reflects the tender-based nature of operations and the group's reliance on oil and gas exploration activities in particular region. Despite this, Polaris Inc. remains financially sound, supported by an equity base of $100,281 (FY21: $642,662) and no leverage, with working capital efficiently managed through internal cash generation. The distribution of $1.6mln in dividends during FY22 reflects Polaris Inc.’s commitment to shareholder value. The nature of business requires steady, sizable investment to develop technology and maintain its assets, which includes specialized fleet and machinery.
Ratings takes support from Polaris Inc.’s long operational history, the successful completion of numerous projects across the globe, and its strategic vision for establishing operations in Pakistan. The Company’s future performance will largely depend on the prevailing conditions in Pakistan’s oil and gas industry, as well as its ability to overcome several challenges. These include potential delays in receivable collections, timely execution of projects, cost and timeline overruns, and intense competition, particularly from established E&P companies that own seismic study facilities and provide services to third parties. Additionally, due to the inherent challenges in operations, Polaris Inc. remains exposed to financial strain from counterparties, which could negatively affect collections and cash flow. Growth depends on the Polaris Inc. ability to secure new orders. Furthermore, government policies and investment decisions in the exploration and production sector play a critical role. Any unfavorable policy changes or reductions in spending in these areas could significantly impact the group’s revenue and profitability.

About the Entity
Polaris Danah Natural Resource Development (Pvt.) Limited, established on October 30, 2023, under the Companies Act 2017, register office is in Islamabad, Pakistan. As the successor to the Polaris Group of Companies, it represents Polaris Inc.'s expansion into Asia. Polaris Inc., based in Canada, is the country’s oldest seismic company, operational since 1996, with over 1,000 completed 2D and 3D seismic projects. Globally expanding in 2008, it now operates across four continents, tackling challenging environments like arctic, desert, jungle, and transition zones. The Company has a four-member Board of Directors, including CEO Mr. Abdel Latif Hakkoumi, who oversees operations in Pakistan. The group CEO is Mr. William Bill Mooney, who brings over 35 years of expertise in seismic acquisition.