PNSC Group Records Massive Profit Growth of 74% in Q1 FY21

Pakistan National Corporation Company Group managed to achieve a 74% increase in profit after tax of Rs. 859 million in Q1 FY21 versus Rs. 495 million in the corresponding period last year.

Its earnings per share increased to Rs. 6.50 compared to Rs. 3.75 last year. Cumulatively, the group achieved a turnover of Rs 3.971 billion (including Rs. 885 million from PNSC-standalone) as compared to Rs. 3.274 billion (including Rs. 569 million from PNSC-standalone) last year.

This includes substantial growth in revenue of 73% from Rs. 410 million to Rs. 709 million in foreign tankers segment and growth in revenue of 19% from Rs 2.079 billion to Rs 2.467 billion in managed tankers segment.

There was a decline in the bulk carrier segment from Rs. 586 million to Rs. 468 million during the period due to the declining average Baltic Dry Index from 2,037 to 1,521 in the current period as compared to last year. The fleet direct expenses during the period under review increased to Rs. 2.630 billion (including Rs. 438 million from PNSC standalone) from Rs. 2.256 billion (including Rs. 298 million from PNSC-standalone).

Shipping Line Remains in Losses

PNSC standalone results reflect a loss after tax of Rs. 24 million as compared to a loss after tax of Rs. 260 million in the corresponding period last year, mainly due to a reduction in the volume of slot chartering activities.

PNSC’s loss per share decreased to Rs 0.18 compared to Rs 1.97 in the corresponding period last year.

The finance cost on long-term financing decreased by 39% to Rs. 154 million in the current period versus Rs 303 million last year. Coupled with a decrease in the quantum of long-term financing due to repayments made during the period, a major reason for the decline in finance cost was due to a reduction in the discount rate by the State Bank of Pakistan (SBP).

Future Prospects

The newly approved shipping policy with extended exemption from sales tax and customs duty up to FY 2030, coupled with the availability of cheaper financing in the form of Long Term Finance Facility creates an opportunity for PNSC to expand its fleet portfolio.

PNSC is working on plans for maintenance and upgrading the existing fleet which should lead to a decrease in operating costs. PNSC also has a business expansion plan and intends to induct more vessels in the fleet of its managed vessels during FY 2020-2021.