PAKISTAN REFINERY LIMITED
Following is the text of press release issued by
Quote
The ratings reflect the resilient business profile of
The country's refinery sector has been going through significant challenges for an extended period, majorly pertaining to up-gradation of the refining complexes and management of furnace oil (FO) produce. The FO offtake has further obstacles on the export avenue as the IMO 2020 came into play, since Jan'20. Depressed crude and POL prices in the International market coupled with the underlying issues of the sector had hampered the performance indicators of the industry players in FY19. Adding to the woes, the global oil market was further struck by widespread uncertainty due to the outbreak of COVID-19.
Inventory accumulation, NRV adjustments and POL demand slide pressurized the GRMs and profitability margins of the sector players drastically. Nonetheless, the concerns are expected to reverse, going forward, as global prices move towards a stabilized trajectory and demand takes a gradual uptick, on account of ease in lockdown. Having said this, uncertainty still prevails as to the timeliness of complete restoration and recovery of losses that the Industry has absorbed, under the current situation.
Likewise, PRL's financial risk profile exhibited a precarious position with considerable short-term funding to cater working capital needs along with persistent net losses, which turned the equity negative.
The ratings are dependent upon the company's aptness to arrest the adversities impacting its risk profile in a timely manner. Improved performance indicators, including reversal of equity losses and sanguine financial discipline, are imperative to the ratings. Meanwhile, the ratings are placed under "Watch" to reflect the need to oversee the risk profile of the company against unavoidable challenges, going forward.
For more information, contact:
Unquote
© Pakistan Press International, source
