PIBTL: No time to lose

January 13, 2022 (MLN): The adverse impact of rising commodity prices has badly hit the cargo handling companies across the globe and now making its way to plague the local companies. Pakistan International Bulk Terminal Limited (PIBTL) has witnessed a notable squeeze of 39.5% YoY during October-December FY22 as the company’s handled cargo (imported coal) stands at 1.79 million tons (MTs).

The sharp decline is primarily attributed to the lower imports by the private sector given record-high international coal prices, slowdown of growth in the manufacturing sector and decline in business from power plants that were earlier relying on PIBTL for shipments above almost 40,000 tons.

Given this, PIBTL’s capacity utilization decreased by 39ppt YoY to 60% in 2QFY22 as compared to 98% in 2QFY21.

Despite being under the haze of depressed numbers, the company has more to enjoy in days to come on the back of robust economic recovery, attractive dividend yield post repayment of long-term debt, and higher utilization levels as increased demand from cement and power sectors would require the company to increase its capacity to 16mn tons by incurring CAPEX, said Usman Arif, Research Analyst at Foundation Securities.  

On the positive front, it is expected PIBTL will likely witness growth in volume handling during FY23 and FY24 due to increased coal imports by cement, textile sector, general industry and COD of Lucky Electric Power Company.

Speaking to Mettis Global, he stated that the company valuation will be on the upside in future. However, the company has no time to lose on the expansion side as it seems the only way to secure more margins. Presently, the company can handle up to one million tons of coal and if the import increases, then there will be strong chances for other players to capture the market.

Another risk which company might face is the resumption of coal handling by Karachi Port Trust (KPT) which is currently suspended on Supreme Court directives, he added.

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