PACRA Assigns Initial Entity Ratings to Euro Oil (Pvt.) Limited

Euro Oil (Private) Limited (“Euro Oil” or “the Company”) has evolved itself into a significant market player, having prominent presence in Lahore and other major cities of the Punjab province. With 12,800 MT storage depot in Sahiwal, the company’s network extends to 168 sites, of which 18 sites are CoCo. These CoCo sites provide a strategic advantage in terms of profitability and liquidity management. The volume advantage is a plus factor. These factors reinforce the assigned ratings. The ratings are further fortified by the sectoral expertise of its key sponsors and a strategic ~20% equity stake held by global energy trader BB Energy. This international partnership has been instrumental in streamlining the Company’s supply chain, a trajectory of growth further complemented by its distribution agreement with PETRONAS to market and sell premium lubricants nationwide. The company has a governance structure in place, with an eye to getting itself listed in near future. Currently managing a robust product portfolio that includes High-Speed Diesel (HSD), Premier Motor Gasoline (PMG) featuring the PMG 95 RON variant), the Company has positioned itself to expand to other provinces. The Company primarily generates revenue by PMG and HSD sales, which together account for over ~99% of the total sales volume. During FY25, the Company sold an increased quantum of PMG and HSD amounting to ~193,732 MT (FY24: ~153,650 MT). To capitalize on a 1.2% market share and a notable 15% revenue surge to PKR 61,487mln in FY25, Euro Oil is pursuing infrastructure expansion, with 5,000 extension already 80% complete at the current site in Sahiwal. The land filling at Daulatpur is done and work is progressing. Kohat will follow. The timely materialization of these projects remains a critical prerequisite for future scaling. The management is projecting a revenue base of around PKR 66,998mln and net profit of PKR 967mln by end of FY26.
The Company maintains a sound risk absorption capacity. The equity of the company was strengthened when BB Energy took a stake in the company, with 80% of the proceeds invested in the company. The working capital cycle is favorable due to supply agreement with its key shareholder. Most of the leverage is non funded. The management of financial risk is important. The management has no plan to raise long term funding, of which the feasibility might impact the financial risk.
The ratings are supported by Euro Oil’s ability to sustainably grow its business volumes and profits. Maintaining healthy financial metrics, including a controlled leverage profile. Streamlining the working capital management, along with timely and successful materialization of the strategic initiatives are pertinent.

About the Entity
Euro Oil (Private) Limited (“Euro Oil” or the “Company”) was established in 2016 and formally obtained its Oil Marketing Company (OMC) license from OGRA in 2018. The Company’s major shareholding lies with Mr. Umer Mujib Shami and associates (~38%), Mr. Adnan Nasir and associates (~38%), and BBE D PTE. LTD. (~20.0%), a Singapore-domiciled subsidiary of BB Energy. The Board comprises 7 members, including 3 Non-Executive and 4 Executive Directors. Mr. Adnan Nasir serves as Chairman of the Board, while Mr. Umer Mujib Shami leads the Company as Chief Executive Officer (CEO).