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Lahore, October 19, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and the short-term entity ratings of Attock Refinery Limited (ARL) at ‘AA’ (Double A) and ‘A1+’ (A One Plus), respectively. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payments of financial commitments.
The ratings incorporate ARL’s strong risk absorption capacity emanating from robust financial profile, sound cash flows and healthy profitability. This in turn facilitates the company to cope with the menace of circular debt. ARL’s core refining business remains exposed to vicissitude of the international crude oil and refined products pricing. However, the sizeable investment book – comprising strategic investments and bank placements – provide a stable source of income.
This provides cushion to the company’s core business in times of depressed refining margins. Moreover, the ratings consider the synergistic alliances originating from the association of the company with an integrated oil group – Attock Group.
The ratings could be impacted by volatility in international oil prices and adverse changes in the existing regulatory framework leading to depressed refining margins. The company is contemplating major up-gradation and expansion of its refining capacity. The management intends to finance the expansion projects through borrowings. Thereby, effective management of financial profile remains critical as it may impact coverage in turn, ratings.
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