TC September-October 2021 Issue

TRADE CHRONICLE
PNSC Group has declared a profit after
tax of Rs. 2,265 million during 2021
A Chronicle Report
PNSC Group has declared a profit after
tax of Rs. 2,265 million, a decrease
of 6% compared to the last year’s
profit after tax of Rs. 2,414 million.
A significant reason for the decline
in profitability is a decrease in group
revenue from managed vessels
by 18% (Rs. 8,414 million v/s
Rs. 10,278 million last year).
At the same time, there is an
increase of Rs. 474 million (Rs.
736 million v/s Rs. 263 million
last year) in revenue from the
chartered segment.
The total cargo transported in FY
2021 increased to 11.09 Million
MT compared to 8.437 Million
MT in FY 2019-20, reflecting a
significant increase of 31.4%.
In addition, aggressive costcutting
measures were adopted
across all segments of the business.
As a result, despite an annual CPI of
8.9%, the administrative expenses
declined by 7.6%, rental expenses by
15.2% & other costs by 22.3%
PNSC having a total DWT capacity
of 831,711 metric tons, lifted cargo
of about 11.09 million tons (FY 2020:
8.437 million tons) during the year
under review, which is equivalent
to approximately 10.06% (FY 2020:
9.34%) of the country’s total 110.271
Calling it a “game-changer”, the federal
government has unveiled an ambitious
plan to rebuild Karachi’s coastline
under the China-Pakistan Economic
Corri dor (CPEC) with $3.5
billion “direct Chinese
investment” that aims to
overhaul city’s seaboard
with new berths for the
port, a new fishery port
and a ‘majestic harbour
bridge’ connecting it
with Manora islands and
Sandspit beach.
The Karachi Coastal Com
prehensive Development
Zone (KCCDZ) —
spread over 640 hectares
or 1,581 acres on the
Future Outlook
CPEC panel approves ambitious plan
for Karachi coastline development
million tons (FY
2020: 94.321 million
tons) seaborne trade
by volume.
The company remains optimistic
about the performance of the PNSC
group in the future. The tanker freights
have shown signs of recovery-albeit
gradually. The BDI is currently hovering
at ten years high, which is expected
to yield strong results for our bulk
carriers. The fleet expansion delayed
due to market volatility will be pursued
aggressively in FY 22. Materialization
of the transaction will positively impact
the revenues as well the bottom line of
PNSC. Business diversification & entry
into the marine services business is also
being followed vigorously. Persistence
of Delta variant & outbreak of newer
western backwaters
marsh land of the
Karachi Port Trust (KPT)
leading to revamp one of
the oldest city slums Machhar Colony
relocating its more than half a million
population — is an initiative of the
Ministry of Maritime Affairs.
variants of Covid remains the key risk
to the recovery of tanker freight rates.
The rising global container shipping
freight also remains an area of concern.
Tightening of environmental regulations
by IMO is another risk to profitability in
years to come. All efforts will be made
to mitigate the adverse impact of the
risks emanating from volatility in freight
markets and tightening of regulatory
framework & the associated
cost pressures.
Dividend Announcement
The Board of Directors is
pleased to recommend a cash
dividend for the year ended
June 30, 2021, on ordinary
shares at 30%, i.e. Rs. 3.00 per
share for the approval of the
members in the upcoming 43rd
Annual General Meeting.
PNSC is a shipping company
that undertakes international operations
by transporting petroleum products
from the Middle East to seaports in
Pakistan for domestic consumption and
through the global carriage of dry bulk
commodities on international routes.
The majority of PNSC’s revenue
streams are pegged to international
freight indices, inextricably linking the
Corporation and creating a dependency
on the global economy’s health.
(Abstract from PNSC annual report for
2021)
The KCCDZ is the latest addition to
CPEC projects aimed at providing
Karachi with an ultra modern urban
infrastructure zone, placing it among
the top port cities of the world.
The announcement came from the
top when a key member
of Prime Minister Imran
Khan’s cabinet sha red
some details of the project
and claimed it carried
“enormous potential for
global investors as well”.
“And the best thing of
this project is that it’s
solely based on foreign
[Chinese] investment
without any loan,” said
Minister for Mar i time
Affairs Syed Ali Zaidi while
speaking to media.
TRADE CHRONICLE - Sep - Oct - 2021 - Page # 14