LAHORE, April 30: The Pakistan Credit Rating Agency (Pacra) has assigned a long-term rating of “AAA” (triple A) and a short-term rating of “A1+” (A one plus) to the National Refinery Limited (NRL). The ratings, said an announcement by Pacra on Saturday, was applicable to senior unsecured creditors of the company and denoted the lowest expectation of credit risk emanating from exceptionally strong capacity for timely payments of financial commitments.
The ratings reflected the NRL’s unique position in the domestic refining industry emanating from its virtual monopoly in the high margin lube business.
The company’s low business risk is reinforced by its ability to change its product mix — both fuel and lube — owing to relatively higher operational flexibility. This enables the company to capitalize upon some demand-supply imbalances with the primary focus on value added items, the announcement said.
The ratings also recognize the refinery’s very strong financial profile emanating from virtually debt free capital structure and robust liquidity. This substantially mitigates the element of financial risk. Meanwhile, the profit retention policy has also enhanced the risk absorption capacity of the company and this provides a cushion against any unforeseen contingencies, Pacra says.
