Lahore, December 28, 2020 (PPI-OT): The ratings reflect PNSC’s strong ownership – majority owned by the Government of Pakistan (89.13%) – and its strategic significance as the country’s national flag carrier. The Corporation operates on a “One Vessel One Company” basis. PNSC’s business profile has gained significant strength in recent years on account of efficient fleet utilization and cost management measures taken by the management. Revenues emanate from a mixture of liquid and dry cargo, with liquid cargo bearing a higher weightage. Volatility in BDI index due to the impact of COVID-19 affected the bulk trade.
The foregone share in topline is, however, covered by liquid trade through expanded tanker fleet; recently, two new oil tankers have joined the Corporation’s managed fleet bringing up the total fleet number to eleven (11) and dead-weight tonnage capacity to 831,711 DWT – being highest in the history. The Corporation also operates through chartered-hire vessels to stimulate business volumes. PNSC is planning to acquire three second-hand vessels, one for each of its business segments within the current fiscal year, namely one Aframax Crude Oil Tanker (105,000 DWT), one LR-1 Product Carrier (75,000 DWT) and one Ultramax Bulk Carrier (63,000 DWT).
Procurement of ships is 90% financed through external debt. On the other hand, additions in managed fleet are expected to boost up the revenue base by their revenue contribution in existing revenue base of 11 vessels. and generate better profit margins than from chartered-hire vessels business. This factor, put along with the Corporation’s on-balance sheet liquidity, is a support to the overall risk profile. The ratings are dependent on the Corporation’s ability to generate amicable cash flows post expansion. Meanwhile, prudent financial discipline alongside growth trajectory is imperative.
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
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