Pakistan National Shipping Corporation (PNSC) has posted handsome profit for the first half of current financial year (FY20) on the back of consistent growth in its businesses and operations. The Company’s earnings per share also improved to Rs7.63 from Rs5.23.
The national flag carrier has recorded net profit of Rs1.007 billion during 1HFY20 as compared to Rs690 million recorded in the corresponding period of last financial year.
The Company made an operating profit of Rs1.68 billion during the period under review, whereas its expenses surged to over Rs532 million, including administrative and other expenses.
The growth in profitability came from increased revenues on the account of owned bulk carriers and owned tanker segment.
The Company’s revenue streams reduced due to a fall in the shipments of furnace oil which saw a reduction of import after the Government of Pakistan initiated a shift towards the use of alternative energy, which is cost-effective and environment-friendly as compared to furnace oil.
The Company managed to minimizes its exposure to exchange rate volatility as a result of effective treasury management, effective utilization of resources and owing to the natural hedge by way of its operations.
The finance cost of PNSC increased in the current period due to the financing of two new inductions of oil tankers in the managed fleet. This increase in finance cost was also kept low considering the prevailing borrowing rates in the country.
Due to current global depression in commodity trade, the market will remain under significant pressure in the near term. The only consensus within the international shipping industry at present is that 2020 is expected to be a turbulent year with foreseeable challenges that will reshape the industry. Overall, shipping markets seem to be continuing to trend forwards, despite demand pressures.