- Higher Dollar rate led to increased revenue from Cement Companies who rely on PIBTL for Imported Coal Handling
Pakistan International Bulk Terminal Ltd (PIBTL) net profit increased to PKR 1.1billion (EPS of PKR0.64/share) in FY2020 as compared to loss of PKR 2.4billion in FY2019.
Increased financial performance was attributed to better gross margins due to rupee depreciation(PIBTL Revenue is in US$) and absence of exchange losses along with lower finance cost.
PIBTL Sales Revenue has increased by 18% YoY in FY2020. As per the Management increase in revenue is due to higher US$/PKR Exchange rate along with slight increase in tariff, as volumes handled during the period remained flat at 8.6mn tons.
As per the management, Cement sector is the largest client of PIBTL which contributed ~60% in overall volumes handled in FY2020 followed by power, chemical and textile sectors contributing cumulative 33% in volumes handled during FY2020.
A good patch of recovery came from Finance Cost which declined by 38% due to significant decline in Interest Rates. PIBTL current foreign currency denominated debt stands at US$45mn, while its local currency long term debt stands at PKR6.5bn at the end of FY20. PIBTL has a step-up debt repayment schedule which will increase its debt repayments in coming period.
Company is eyeing an expansion project of setting up an LPG Handling facility at its terminal for which NoC has been received.
Outlook
The Mid-Term Outlook for the company is poised for growth as PIBTL remains beneficiary of US$ denominated based revenue stream (which is bound to increase with Rupee Depreciation), attractive dividend yield post repayment of long term debt (after 2023), and higher utilization levels as increased demand from cements and power would require company to increase its capacity to 16mn tons by incurring limited capex. Furthermore, Lower Interest Rate both in Pakistan (for domestic loans) and Globally (for foreign loan) would enhance the company’s profitability in short-term.
There is also an upside expected projected growth in volume handling during FY21 due to increased coal imports by cement, textile sector and general industry due to the revival of the economy.
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