According to the PNSC yearly report (1HFY24), during the current period, the pivotal financial and macroeconomic indicators USD PKR parity and interest rate (KIBOR) showed upward movement by 27% and 4%, respectively. The decline in bulk carrier time charter rates, approximately 54%, in the country’s import and export business has also significantly impacted Pakistan’s maritime sector.
Under the influence of global and local economic conditions and trends, the PNSC Group has recorded a profit after tax of Rs.9.49 billion against Rs.11.99 billion in the corresponding period last year. The Group’s net profit margin declined slightly from 41% in the corresponding period last year to 40%.
Cumulatively, the Group achieved a turnover of Rs.23.93 billion (PNSC: Rs.6.42 billion) compared to Rs.29.12 billion (PNSC: Rs.8.10 billion) for the corresponding period last year. The decrease in revenue is a decline in dry cargo segment revenue by Rs.2.47 billion, owned tankers segment by Rs.2.01 billion and foreign chartering revenue by Rs.0.72 billion, respectively. The main factor affecting revenue from oil transportation of the Group is a decrease in the average AFRA rate from 219 to 155. However, the upward trend in the average exchange rate negated the financial impact of the decline in AFRA. Additionally, the fact that the Group has an ageing fleet necessitated major dry-docking and repair and maintenance activity.
The PNSC standalone results reflect a profit after tax of Rs.2.40 billion compared to a profit after tax of Rs.1.49 billion in the corresponding period of the last year. PNSC was able to utilise the funds available during the period effectively. Thus, it could derive income from its investments amounting to Rs.3.26 billion compared to Rs.0.62 billion in the corresponding period last year.
During the current period, PNSC could fully pay the loans obtained for Bolan and Khairpur in September 2023. Thus resulting in savings on Finance Costs.
Dry Bulk Market
The outlook for the bulker market appears moderate, albeit with scope for some gradual improvements. Current projections suggest bulker demand growth (~1.5%) may fall slightly short of fleet growth (~2.3%) despite a limited delivery schedule and potentially increased demolition. However, several positive factors have the potential to support markets, including slower speeds and increased EST retrofit time as environmental regulations impact.
Tanker Market
The crude tanker demand outlook appears healthy in the medium term, with seaborne crude trade projected to grow by 2.6% in 2024, with gains led by the Americas on the back of strong production growth. The tanker order book remains historically moderate, now equivalent to 7% of fleet capacity, though up from a record low of 4% in April 2023 amid a pick-up in contracting. Emissions regulations could moderate active tanker supply; e.g., compliance with CII could potentially reduce available tanker supply through slower speeds and retrofit time.