Lahore, December 13, 2021 (PPI-OT): The ratings incorporate PARCO’s unique ownership structure – by the Government of Pakistan (GoP) (60%) and the Emirate of Abu Dhabi (EAD) (40%) along with its strategic importance to economy through operations extended to, transportation of petroleum products through integrated Pipelines, Refining, and Marketing, providing efficient, low-cost, and environment-friendly energy solutions. PARCO is also contributing substantially towards socioeconomic benefits and Foreign Exchange savings; its low business risk emanates from its leading market position, strong demand of its products and its advanced Refinery Complex technology.
In addition to spike in crude oil prices in International Market, the Country’s oil sales in the first quarter of the ongoing fiscal year (1QFY22) posted growth on the back of rising trend in sales of furnace oil (FO), high speed diesel (HSD), MOGAS. In line with industry trend, the Company’s topline also increased by 63.4% in 1QFY22. Further, the revenue stream is supported by the return on investments in subsidiaries and associates. Also, Company’s investments in dollar-based TDR cover its financial risk profile to a maximum level and also acts as an implied hedge against exchange rate fluctuations.
In 1QFY22, the Company earned a net profit after tax of PKR 9.1 billion. PARCO has initiated the development of PARCO Coastal Refinery Limited (PCRL) project, a greenfield 250-350 kbpd integrated refinery-petrochemical project, to be located in the coastal area near Karachi. PARCO also intends to develop an Oil Import Terminal to meet the growing domestic requirements for refined products. Strong capital structure and sizable equity has, historically, enabled the company to absorb hefty capital expenditures. Effective management of upcoming projects, consistency in Government policies and technological improvisation will remain critical for the ratings. Meanwhile, sustained competitive positioning is also imperative.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com