Gas & Oil Pakistan Limited ('GO' or 'the Company') was incorporated as an unlisted public limited company in 2012 under the erstwhile Companies Ordinance, 1984 (now called the Companies Act, 2017).

The Company acquired an OMC license in 2014 and commenced operations in Punjab in 2015, with subsequent expansions in Sindh, Khyber Pakhtunkhwa (KPK), Gilgit Baltistan (GB), and Balochistan. The Company began its operations by providing logistics services to other oil marketing companies. It steadily built a strong logistics network that has evolved into a vital service provider for major Oil Marketing Companies (OMCs).

The Company is primarily engaged in marketing and selling petroleum products (POL). Currently, the Company operates the second largest retail network of ~1293 stations, including ~55 company-operated company-owned (COCO) sites. To support the constantly growing retail network, the Company maintains numerous storage sites and strategically located terminals throughout Pakistan with a total storage footprint of ~87.5K MT for HSD and ~81.4K MT for PMG, including a dedicated storage facility at Fauji TransTerminal Limited, with a capacity of ~36.3K MT. This enables the Company to effectively and efficiently capture its wide-spread customers. 

The Company's shareholding was initially divided among Mr. Khalid Riaz and his family and friends. However, lately, Aramco has acquired an ~40% stake in the Company. While GO holds a major stake of ~60%, out of which, Mr. Khalid holds ~51% stake in the Company.

After Aramco - headquatered in Saudi Arabia with an operational history of more 90 years - taking an equity stake in the Company, the ownership is expected to further stabilize the ownership structure. 

The Company's sponsors have extensive industry experience with a significant concentration in oil & lubricant trading and distribution & transportation to OMCs all across Pakistan. Mr. Khalid, the Company's key sponsor and CEO, possesses over three decades of extensive oil distribution and trading experience. Furthermore, with the introduction of Aramco as a key sponsor and its representation on Board and its strategic management, the Company will, over time, benefit from the vast expertise of the new sponsor, improving the operational capabilities. 

The sponsors have a firm financial footing. Aramco (rated A+ by Fitch) has a strong financial muscle with an annual turnover of ~$ 480.5bln and total assets of ~$646.3bln, providing a comfortable financial strength to the Company. 

The Board of Directors (BoD) comprises ten memberrs, out of which four Directors are the representatives of Aramco. There is one Independent Director on the BoD. Overall composition of the BoD ensures significant independence in the decision-making process.

The BoD has diversified experience and knowledge in the marketing and distribution of oil. The Chairman of the BoD, Mr. Tariq Kirmani, has 47 years of multifaceted experience in the domestic and international corporate sectors. The Directors representing Aramco have diverse experience and their induction is expected to strengthen the strategic oversight. Mr. Nader D. Al Douhan, the Director of DS International Retail at Aramco, with over 25 years of experience in downstream, upstream, and corporate services. Other representative Directors of Aramco, Mr. Abdul Aziz, Mr. Usman Hamid and Mr. Davide Crespi also carry diversified experience of more than two decades; thus, strengthening the BoD's policy formation process.

The BoD meets on a quarterly basis with complete attendance and comprehensive documentation of minutes. Two BoD Committees, namely the Board Audit Committe (BAC) and Board HR and Compensation Committee (BHRCC), monitors the operations effectively. The Committee meetings are held on a quarterly basis with adequate attendance and minutes of the meetings are recorded and documented adequately.

The External Auditors of the Company, M/s. PKF FRANTS has expressed an unqualified opinion on the financial statements for the period ended Dec-24. The firm is QCR-rated and listed on the SBP panel.

The Company's operations are divided into three primary functional areas: i) Operations, ii) Finance, and iii) Sales. Each department is managed by a department head who reports directly to the CEO. He then reports to the Board & makes pertinent decisions. While, the Head of Internal Audit & HR functionally reports to the respective Board Committee, and administratively to the CEO. 

Mr. Khalid Riaz, the CEO of the Company, has been associated with GO for over a decade and has an overall experience of over three decades. Average experience years of top management is ~27 years, reflecting a good management profile. As per the transaction with Aramco, the Chief Financial Officer and Head of the Supply Chain will be appointed by Aramco. The management team comprises seasoned professionals, each bringing a range of expertise in their respective fields.

GO has constituted two management committees. These committees include i) Procurement and ii) Credit. Committee meetings are held on a quarterly basis,  and minutes of the meetings are recorded and documented adequately. Anticipating the need for enhanced management efficacy, as Aramco joins in, management-level committees may add-in.

Top management receives a daily performance report of operations, which results in optimal monitoring. The Company’s operating environment has now been upgraded to SAP S/4HANA. This has effectively integrated with all the departments and ensures proper financial and operational control.

The Company operates an in-house internal audit department to oversee risk management, control, and governance processes. This ultimately enhances business practices by establishing standard operating procedures (SOPs).

Pakistan heavily depends on imports for its energy requirements due to limited domestic POL production. A substantial increase in POL import costs was witnessed due to global challenges. This, along with rupee depreciation, further impacted the local overall cost structure. During FY24, the demand for POL products declined by ~9% due to macroeconomic pressures. Transportation and Power sectors remain the main consumers, accounting for ~89% of the total demand. Despite having fixed margins, OMCs bear the impact of high working capital costs, which have risen sharply due to the aforementioned factors. This requires vigilance over the short to medium term for the OMC sector. Lately, many international player operating in the upstream, midstream and downstream segments - Aramco, Gunvor, Wafi and Trafigura - have enter in Pakistan's OMC market through strategic partnerships with already existing local player. This is expected to shape new dynamics for the OMC sector, going forward. 

The Company captured ~13% market share based on the sale of POL products and is positioned at 2nd among OMCs as of Dec-24. GO is the second biggest OMC in terms of retail networks operating across Pakistan.

The Company generates revenue from MS (~49%), followed by HSD (~50%) and HOBC (~1%). During CY24, the Company reported an increase of ~36.1% in net revenue to ~PKR 327.8bln, primarily due to volume-driven growth. As Aramco has joined in, the revenue has further improved during 1QCY25. The revenue stream is expected to remain sustainable while enhancing operational efficiencies. 

During CY24, the Company's gross margins declined to ~5.4% (CY23: ~10.5%) due to increased procurement costs. Similarly, the operating margin dropped to ~3.6% (CY23: ~8.4%) due to trickle-down effect. On the other hand, the Company's net margins rose to ~1.0% (CY23: ~0.7%) due to low finance costs (CY24: ~PKR 8.2bln, CY23: ~PKR 11.3bln). During 1QCY25, margins have further become favorable. Looking ahead, margins are expected to remain sustainable.

GO holds a customer-centric strategy with a contemporary vision well-aligned with the transitioning energy market. Focusing on this, a recent structural shift in the Company's shareholding has been observed by bringing in Aramco as an international sponsor, a renowned and well-positioned global giant in the energy sector managing upstream operations, downstream operations, and energy transition. This strategic introduction is expected to ease the Company's supply chain and the overall financial health. Going forward, Aramco plans to bring in food related investment to Pakistan through the Company's balance sheet. This, if managed well, is expected to further benefit the Company's overall performance.

The Company significantly improved its net working capital cycle to ~20 days (CY23: ~30 days). This improvement primarily stems from a notable increase in trade payable days from ~37 days in CY23 to ~51 days in CY24, highlighting improved credit terms for product import provided by Aramco to the Company. Stable receivable days (CY24: ~35 days, CY23: ~34 days) further strengthen the Company's working capital cycle. While inventory turnover days increased to ~36 days (CY23: ~33 days), it was primarily due to a significant increase in the Company's inventory (CY24: ~PKR 49bln, CY23: ~PKR 16bln) to support its enhancing operations. Further improvement in the working capital management seems evident in 1QCY25. As we advance, working capital management is expected to improve.

As of CY24, the Company reported FCFO at ~PKR 13.2bln, reflecting a slight decline of ~3.65% (CY23: PKR ~13.7bln). This decline in FCFO was primarily driven by a reduced impact of finance cost reported at ~PKR 7bln (CY23: ~PKR 11bln). Nevertheless, the Interest Coverage Ratio improved to ~1.8x in CY24 (CY23: ~1.4x) attributed to declining finance costs. As of 1QCY25, improving trend remains the same. As we advance, improvements in coverages are anticipated and supported by lower interest rates, resulting in reduced finance costs.

The Company reported a significant change in its leverage. As of CY24, the Debt-to-Asset ratio of the Company declined to ~49.5% (CY23: ~72.9%). The Company's total equity rose to ~PKR 32.4bln for CY24 compared to ~PKR 18.4bln for CY23 primarily due to the right issue, which raised the equity of the Company by ~10.6bln. Whereas, borrowings decreased to ~PKR 31.7bln in CY24 (CY23: ~PKR 49.6bln); majorly concentrated with STB’s ~PKR 24bln in CY24 (CY23: ~PKR 40.4bln) for working capital management. The Company's capital structure has demonstrated strength as of 1QCY25, and is expected to remain strong, going forward.