The Pakistan Credit Rating Agency Limited
Press Release


Anam Waqas Ghayour

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA maintains the Entity Ratings of Pakistan National Shipping Corporation

Rating Type Entity
(23-Dec-22 )
(24-Dec-21 )
Action Maintain Maintain
Long Term AA AA
Short Term A1+ A1+
Outlook Stable Stable
Rating Watch - -

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. Corporation's revenues in 1QFY23 and FY22 surged on the account of high demand for Oil tankers as well as with the inclusion of two oil tanker vessels M.T. Mardan and M.T. Sargodha. Procurement of ships is 40% financed through external debt. PNSC is successfully following prudent financial discipline alongside the growth trajectory. Also, corporation is persistently working to further increase the fleet size by the end of current fiscal year. Additions in managed fleet will significantly support the existing revenue base of 13 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, sagacious financial discipline is imperative.

About the Entity
PNSC, majority (89.13%) owned by the Government of Pakistan (GoP) through Ministry of Maritime Affairs, functions as a holding company with 19 wholly owned subsidiaries and an associate. PNSC group, operating on a one-ship one-company model. PNSC’s revenue emanates from two sources both from owned and charter vessels; liquid cargo and dry bulk. Dry bulk can further be subdivided into slot charter and bulk cargo. A small proportion of revenue comes from rental income too. Major customer of PNSC are the Oil refineries of the country. Over the years, the contribution from liquid cargo has increased and constitutes the largest share, followed by slot charter and bulk cargo. The Corporation is now managing a fleet of thirteen vessels, comprising five bulk carriers and eight oil tankers, with a total cargo capacity of 1,045,957 DWT. Rear Admiral Jawad Ahmed, SI (M) is the Chairman and CEO.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.