PACRA Maintains Entity Ratings of BE Energy Limited

Lahore, August 31, 2020 (PPI-OT): The ratings reflect BE Energy Limited association with a strong sponsor – Saudi based Bakri Group. The sponsor has presence globally in energy related businesses including operating in the downstream oil segment in various countries of Asia and Africa. The group has also been operating in Pakistan since 1994 as a supplier to PSO before entering the OMC market in 2006. Over the years, BE Energy has managed to gain ~3.3% as at Jun-20 market share with a presence of ~350 retail stations.

The company capitalizes on substantial oil storage infrastructure of over 182,000 MTs spread across three terminals located at Port Qasim, Machike, Shikarpur, Sahiwal Depot and one depot at Daulatpur. This has brought forth hospitality income for the company, which currently contributes sizeable chunk to the profitability.

With a diversified product mix (HSD: PMG: FO -47%: 47%: 0.3%), BE has been successful in managing the impact of the reduction in demand for FO. Amidst COVID-19, the company has been able to sustain its profitability as it embarks on a conservative strategy to avert losses due to volatility in the oil prices. BE Energy has adequate financial risk profile with moderate coverage indicators and leveraging. The revival of economic activities post June and reduced interest rate is expected to provide relief to the bottom-line.

In addition to the timely development of infrastructure and supply chain, the ratings are dependent on BE Energy’s ability to build broad-based market penetration. The company needs to strengthen its relative positioning. Additionally, revenue streams should be diversified.

For more information, contact:

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