Transport: PAKISTAN NATIONAL SHIPPING CORPORATION LIMITED - Year Ended 30-06-2003

During the year under review PNSC concluded long term contracts of affreightment with Pak-Arab Refinery, National Refinery and Pakistan Refinery in October 2002. These contracts became effective from January 2003.
This was momentous development for the future of the corporation. The corporation posted a record operating profit of Rs 901.72 million (2001-02: Rs 613.06 million) and profit before tax of Rs 736.22 million (2001-02: Rs 502.59 million). But the corporate's operating revenue at Rs 3.631 billion was done by 21.5% from Rs 4,625 billion in the previous year.
However, the higher operating profit was due to lower fleet expenses and administration and general expenses.
The directors recommended cash dividend at 7.50% (Re 0.75 per share) for the year ended 30th June 2003.
There are some reservations about the improvement in the international business environment which continue to adversely effects earnings from its vessels. But secure cargo of crude oil is steady source of revenue.
Pakistan National Shipping Corporation (the corporation) was established under the provision of the Pakistan National Shipping Corporation Ordinance, 1979.
The corporation is principally engaged in the business of shipping including charter of vessels, transportation of cargo and other related services and providing commercial, technical, administrative, financial and other services in relation to the business of shipping. Its registered office is situated in PNSC Building Moulvi Tamizuddin Khan Road Karachi.
The corporation is listed on all the stock exchanges of the country.
The steep rise in the stock market has stimulated its stock's market value to register phenomenal increase.
The share of the par value of Rs 10 in the corporation has galvanised by incredible 252% in 52 weeks from Rs 12.75 to Rs 44.90. At present the share is trading at Rs 37.10 per share.
The company is no longer a sick loss incurring entity. It has posted profit since last year after several years of losses.
Although the share of the company is exposed to market forces by listing it with stock exchange. But overwhelming number of shares are held by the govt. 89.1% of the PNSC stock is held by the Federal Government.
The company has made large investment in the equity of subsidiary companies and associated under takings which aggregated to Rs 1.047 billion.
In addition it has invested Rs 19.65 million in the shares of Siemens Pakistan Engineering and PSO.
After the balance sheet date PNSC had purchased its first oil tanker in August 2003. The vessel was immediately inducted into service.
Negotiations were concluded for the purchase of two more oil tankers and were due to be taken by end October of last year.
In the directors report to the shareholders the Chairman and Chief Executive Vice Admiral S Tauqir H. Naqvi (Retd) mentioned that in accordance with the established routine, the corporation chartered for a single voyage an oil tanker, M.T. Tasman Spirit, owned by Assimina Maritime Limited and registered in Malta to transport a consignment of 67,532 metric tons of crude oil from Kharg island to Karachi.
While shifting from anchorage on 27th July, 2003, with pilot onboard, and reportedly caught by strong winds and current, the vessel ran a ground and ultimately broke-up which resulted in oil pollution and environmental damage.
He further stated that the vessel was perfectly seaworthy as all its trading certificates were valid.
The management of the corporation considers that the partly primarily liable for all likely claims, including pollution and environmental damage claims and clean-up costs, is the owner of the vessel.
The corporation, on its part, as the charterer of the vessel, is adequately insured under the Protection & Indemnity Cover, and no material financial impact on the corporation is expected to result from casualty.
During the year under review commercial operations of the corporation including its fourteen operatising companies and foreign chartered vessel's total cargo lifted were 14 percent higher.

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Performance Statistics                (Million Rupees)

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30 June                              2003         2002

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Share Capital-Paid-up:           1,143.41     1,143.41

Capital Reserves:                  126.84       126.84

Un-Appropriated Profit/

 Accumulated (Loss):               560.60     (411.35)

Shareholders Equity:             1,830.85       858.90

Surplus on Revaluation

 of Fixed Assets-Net of Tax:       319.57       971.63

L T Debts:                       1,488.34     1,806.60

Deferred Liabilities:              411.41       433.00

Current Liabilities & Provisions 1,040.43       705.25

Fixed Assets:                      369.80     1,023.69

Capital Work-in-Progress:           23.85            -

Investment Properties:             438.87            -

L T Investments in

 Subsidiaries & Associates:      1,046.84       190.93

L T Investments in Joint Stock

 Companies and Other Entities:      19.17         9.99

L T Loans:                           7.48        12.41

L T Receivables:                      -         503.16

Deferred Tax Asset-Net:            177.70       401.59

Current Assets:                  3,006.89     2,633.61

Total Assets:                    5,090.60     4,775.38

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Revenue, Profit & Pay Out

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Operating Revenue

 Freight (Net):                    167.40     1,599.56

Chartering Revenues:             3,310.13     2,944.54

Services Fee:                       73.89        11.41

Rental Income:                      80.01        69.82

Total Operating Revenue:         3,631.43     4,625.33

Fleet (Expenses)

 Direct & Indirect:             (2,595.04)  (3,846.38)

Admin & General Expenses:         (134.67)    (195.89)

Operating Profit:                  901.72       613.06

Insurance Claims:                   26.04        10.18

Other Income:                      230.17       262.55

Share of Net Loss In

 Subsidiaries & Associates:       (132.51)     (38.71)

Other Expenses:                   (289.20)    (344.49)

Profit Before Taxation:            736.22       502.59

Profit After Taxation:             269.30       172.30

Earnings Per Share (Rs):             4.08         2.89

Share Price (Rs) Dated 13.03.2004:  37.10            -

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Financial Ratios

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Price/Earning Ratio:                 9.09            -

Book Value Per Share:               16.01         7.51

Price/Book Value Ratio:              2.32            -

Debt/Equity Ratio:                  41:59        50:50

Current Ratio:                       2.89         3.73

Asset Turn Over Ratio:               0.71         0.90

Net Profit/Total

 Operating Revenue (%):              7.41         3.72

R.O.A (%):                           5.29         3.61

R.O.C.E (%):                         6.65         4.23

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