Lahore, February 27, 2023 (PPI-OT):The ratings draw comfort from sponsors’ extensive association with the related business “Marine Group of Companies”. The Pakistan International Bulk Terminal Limited (“PIBT” or “The Company”) has secured a distinguished position in its operating segment due to its strategic importance in the Power and Cement sector. With a fully automated infrastructure, the company’s annual capacity hovers around 12 million MT for inbound coal handling and 4 million MT of outbound clinker and cement handling.
During 1QFY23 PIBT handled 2.133mln tons of coal cargo (1QFY22: 2.78mln tons, FY22: 8.2mln tons, FY21: 10.1mln tons, FY20: 8.5mln tons) depicting a decline of approx. 23% in volume handling as compared to SPLY. Terminal utilization as of 1QFY23 reported to 71%. Going forward, the capacity utilization is expected to rebound as coal demand from power plants increases in summer season, as well as the dispatches from cement sector has started to pick up its pace due to impact of flooding in the country is receded. Amid declining volumes PIBT topline clocked to PKR 3.46bln showing a growth of 10% as compared to SPLY due to dollar – based tariff structure, which also provides comfort towards the foreign obligations.
The bottom line of PIBT turned red and posted a net loss of PKR 438mln, (FY22: loss of PKR 991mln), this accounting loss is majorly due to the impact of currency devaluation on USD denominated foreign loans. Ratings take cushion from the fact that exchange losses were largely offset by the dollar-based revenue and hence the actual strength of the company can be witnessed through cashflows generation. The capital structure remains comfortable despite hefty long-term borrowings and is improving due to timely repayments.
Major demand vests in the power producers followed by the domestic cement landscape. Since reduced competition in the market because of suspension of coal handling at KPT boded well for the company. However, with government’s initiatives towards indigenous coal-based power plants and use of Afghani coal for the cement sector, re-instigated competition, hence remain critical for the ratings.
The ratings are dependent upon upholding of strong business profile amidst unforeseen changes in the competitive landscape and the Company’s ability to successfully handle cargos through fully automated facility. Rating take comfort from the fact that coal demand from Power sector will gain momentum in summers. Self-sufficiency in meeting debt obligations is the key factor, which may be supplemented by extended support if need be.
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