PIBTL in debt revamp talks

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October 07, 2021 (MLN): Pakistan International Bulk Terminal (PIBTL), the country’s first terminal for handling Coal, Clinker and Cement, is engaged with the lenders for restructuring its domestic loan which is expected to be finalized in 2QFY22.

Meanwhile, the management revealed that the company is also trying to refinance some part of the foreign loan. Once refinancing is done, the expansion would happen very soon.

Currently, PIBTL’s foreign currency-denominated debt stands at US$37mn, while its local currency long-term debt stands at Rs6.1bn at the end of FY20.

In the latest analyst briefing, the company also disclosed its plans to increase capacity up to 16mn tons with an estimated CAPEX of US$60-70mn and for that purpose majority of the CAPEX would be incurred on the conveyor belt and crane and it will take 1.5-2 years to complete that project, as per key takeaways covered by Foundation Securities.

To note, the company’s profitability had improved by 62.5% to Rs1.9bn (EPS of Rs1.04) in FY21 as opposed to a profit of Rs1.1bn in FY20 (EPS of Rs0.64), mainly due to higher volumes handled by the company and exchange gain on foreign currency debt.

During FY21, the company handled 10.1mn tons of coal, up by 17% YoY. Sharing the details of sectors relying on the company for coal handling, the Cement sector is the largest client of PIBTL that contributed 58% in overall volumes handled in FY21 followed by power with 12%, Trader with 12% while textile contributed 9% during the said period, considering the measures for economic stabilization undertaken by the Government.

These industries will continue to be sources of sustainable demand for imported coal. The GOP’s particular focus on accelerating sustainable economic growth through infrastructure development such as both small and mega-capacity / multipurpose water reservoirs/dams, construction of Special Economic Zones as part of CPEC projects, and low-cost affordable houses for the public at large are likely to raise domestic demand for cement, which in turn, should provide a surge to the demand for imported coal, the official annual document highlighted.

Further, the GOP’s reliance on coal for power generation to meet the increasing energy demand and to overcome the undersupply of the energy sector in Pakistan is gradually increasing owing to coal being one of the cheapest fuels for power generation, it added.

PIBT being the only common-user state-of-the-art Terminal in Pakistan, dedicated to coal handling remains committed to providing unparalleled services to its customers at optimized cost by operating efficiently which will enhance shareholders’ return.

It is expected that PIBTL would witness growth in volume handling during FY22/23 due to increased coal imports by cement/textile sector, general industry and COD of Lucky Electric Power Company, Usman Arif, Analyst at Foundation Securities stated.

With regards to PIBTL’s venture with JS Energy for LPG handling, JS has already bought land near the PIBTL terminal. However, despite pursuing this project for the last 2 years no approval has been received by the company from PQA. In case of approval of this project, the LPG handling would take very minimal infrastructure space of PIBTL, Abdullah Umer, Research Analyst at Ismail Iqbal Securities said.

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Posted on: 2021-10-07T09:31:03+05:00

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