PACRA Maintains the Entity Ratings of Flow Petroleum (Pvt.) Limited

Flow Petroleum (Pvt.) Limited ('Flow Petroleum' or 'the Company') has evolved as an emerging player in the oil marketing companies (OMC) sector. The ratings reflect an improved business profile of the Company that demonstrates consistent progress toward market share expansion, supported by a network of ~125 retail outlets. The Company holds a storage facility at Faqirabad, with a capacity of 5,623MT, which is operational and fully utilized. As a part of the expansion strategy, the Company is working on two new storage facilities, Daulatpur and Kohat, with an approximate cumulative storage capacity of 12,229MT. Going forward, the Company plans to merge the Group's investment in Quality 1 Petroleum with and into Flow Petroleum. This, once materialized, is expected to gradually integrate a retail network by ~450 total stations, out of which ~250 are operational, into Flow Petroleum. The merger will add ~11,095 MTs to the Company’s existing storage capacity. The Company is also eyeing considerable hospitality income from Daulatpur and Kohat's storage facility and self-utilization. Kohat's storage facility is currently under construction and is expected to become operational by FY26. The Company's affiliation with Aslam Energy (Pvt.) Limited's presence in Pakistan's logistics sector contributes positively to the overall operations. The Company has posted a consistent improvement in performance. During FY24, the revenue significantly increased by ~22.6%, primarily attributable to price adjustments alongside volumetric uptake. Flow Petroleum has made a strategic investment of ~51% in TransAsia Refinery Limited (TRL). The Sponsors and affiliates (i.e., Aslam Energy (Pvt.) Ltd.) hold the remaining shares of TRL. TRL has lately obtained renewal of operating license from the Port Qasim Authority. Once streamlined, this is expected to enhance Flow Petroleum's operational capabilities. The current supply chain-related challenges may also improve. However, transpiring the transaction and the modalities as per the pre-defined timeline remains imperative. Currently, the Company is facing significant pressure from the increasing cost of sales, leading to a lower business margin. This has stretched the Company’s profitability. On the financial risk front, the Company maintains adequate coverages and a stable working capital cycle. Capital structure remains robust and has kept the leverage at an adequate level. Streamlining the governance framework bodes well for the Company.
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 TRL operational, and incorporating lubricants into the revenue stream) remains imperative to the ratings. Streamlining the governance framework remains crucial.

About the Entity
Flow Petroleum (Pvt.) Limited ('Flowr 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. A team of professionals assists him.