Pakistan Credit Rating Agency Limited maintains ratings of Pakistan Refinery Limited

Lahore, June 30, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has maintained the long term and short term entity ratings of Pakistan Refinery Limited (PRL) at ‘A-‘ (Single A Minus) and ‘A2’ (A Two) respectively. The rating of TFC I of PKR3,000 mln and TFC II of PKR1,000mln have been maintained at ‘A’ (Single A). The ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The ratings reflect the strength of the business profile of PRL emanating from its sustainable operational history, strong demand of its products and its strategic importance in the domestic context. The design of PRL’s plant offers relatively limited flexibility; in turn, low margin and high exposure to volatile dynamics of international crude oil and refinery product pricing. However, with the successful commissioning of Isomerisation plant, the company experienced volumetric growth in high-margin products which boosted profitability.

The incremental cash flows are adequate considering size of the related debt obligations. In addition, the stability in oil prices may supplement the profitability and hence cash flows. The ratings could be impacted by prolonged constrain in refining margins and/or adverse changes in the existing regulatory framework leading to depressed core cash flows.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com