The Pakistan Credit Rating Agency Limited
26-Jan-24
Analyst
Muhammad Zain Ayaz
zain.ayaz@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Holding Company Rating | Jul-23
- Methodology | Correlation Between Long-term & Short-term Rating Scales | Jul-23
- Methodology | Rating Modifiers | Apr-23
Related Research
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PACRA Maintains Entity Ratings of Energy Infrastructure Holding (Private) Limited
| Rating Type | Entity | |
|
Current (26-Jan-24 ) |
Previous (26-Jan-23 ) |
|
| Action | Maintain | Maintain |
| Long Term | A- | A- |
| Short Term | A1 | A1 |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The ratings reflect Energy Infrastructure Holding (Pvt.) Limited's ('EIHPL' or 'the Company') association with its parent company, Jahangir Siddiqui & Co. Ltd. ('JSCL'). The Company has diversified its investments across multiple sectors. EIHPL's portfolio includes holdings in the engineering (JS Engineering Investments 1 Private Limited), LPG storage (JS Petroleum Limited), insurance, sugar, glass, and fertilizer sectors respectively. JS Petroleum Limited, however, is still in process of establishing an LPG storage terminal at Port Qasim and awaiting approval. Being an investment arm of JSCL, investment projects are predominantly funded through equity sourced from the parent company. The Company income stream remained stable with major portion comprised of dividend income received (Constituting ~95%) from insurance and sugar sector. During 9MCY23 the total investment income stood at 210mln (9MCY22: 159mln). The Company has a strategic investment (Constituting ~35%) in the associated company and a trading portfolio (Constituting ~51%) of listed equity investments for steady dividend inflows. The Company has a very strong capital structure with low leveraging of ~0.4% and continues to uphold strong coverage ratios. Materialization of long-term projects and envisioned strategies is anticipated to amplify the financial performance and investments portfolio. The Company has a strong financial profile, represented primarily by equity base and minimal debt.
The ratings are dependent on continued support from the parent company. Realization of the envisioned investment plans and formalization of a strong and effective mechanism for monitoring performance and providing holistic direction as a holding company are critical for the ratings. Strong performance of portfolio companies and stable dividends remains important.
About
the Entity
Energy Infrastructure Holding (Pvt.) Limited is a wholly owned subsidiary of Jahangir Siddiqui & Co. Ltd. The Company was incorporated in 2008 as a private limited company under the Companies Ordinance, 1984 (now the Companies Act, 2017). Mr. Muhammad Babar Din is the Chairman of the BoD. While, Ms. Noor Ulain is the CEO of the Company. The principal activities of the Company are to invest in energy, petroleum, and infrastructure projects.