Pakistan National Shipping Corporation ends HFY23 with massive comeback

LAHORE: The Pakistan National Shipping Corporation released its earnings for Q2FY23 to the Pakistan Stock Exchange (PSX) on February 24. The company ended Q2FY23 with a consolidated quarterly income of Rs 6.59 billion, and a consolidated half-yearly earning of Rs 11.98 billion. Pakistan National Shipping Corporation’s unconsolidated quarterly earnings stood at Rs 638 million, whilst its half-yearly unconsolidated earnings stood at Rs 1.488 billion. 

The standout features of the earnings are that despite quarter-on-quarter (QoQ) changes being negligible, the year-on-year (YoY) changes are very significant. The majority of the Pakistan National Shipping Corporation’s earnings are also attributable to its subsidiary companies, rather than its core operations. This is seen in the difference between the scale of the consolidated and unconsolidated reports. 

Subsidiary Companies 

The Pakistan National Shipping Corporation’s subsidiary companies include Bolan Shipping (Private) Limited, Chitral Shipping (Private) Limited, Hyderabad Shipping (Private) Limited, Pakistan Marine and Shipping Services Company (Private) Limited – Johar Shipping (Private) Limited, National Ship Management and Crewing (Private) Limited, Karachi Shipping (Private) Limited, Khairpur Shipping (Private) Limited, Lahore Shipping (Private) Limited, Lalazar Shipping (Private) Limited, Makran Shipping (Private) Limited, Malakand Shipping (Private) Limited, Multan Shipping (Private) Limited, Quetta Shipping (Private) Limited, Sargodha Shipping (Private) Limited, Shalamar Shipping (Private) Limited, Sibi Shipping (Private) Limited, Swat Shipping (Private) Limited, and Pakistan Co-operative Ship Stores (Private) Limited based on the detail report released by the company for its  Q1FY23 earnings. 

Consolidated Q2FY23 Earnings 

The company’s sales revenue increased QoQ by a marginal 1.22% from Rs 14.43 billion to Rs 14.6 billion. However, on a YoY basis, its sales revenue increased by a whopping 170.23% from the Rs 5.4 billion it recorded in Q2FY22. Expenditure also fell by 6% QoQ to Rs 7.6 billion for a quarterly gross profit of Rs 6.9 billion. On a YoY basis, costs increased 92.49% from the Rs 3.9 billion seen the previous year whilst gross profit increased by Rs 5.5 billion YoY. Gross profit for Q2FY23 grew 10.62% QoQ from Rs 6.27 billion, and 384.75% YoY from Rs 1.43 billion. 

The Pakistan National Shipping Corporation closed Q2FY23 with a gross profit margin (GPM) of 47.1%. This is higher than its Q1FY23 GPM of 43.48%, and Q2FY22 GPM of 26.49%. 

Other notable increases included the 36.25% QoQ increase in its other income which rose to Rs 910 million. As with the theme of the earnings report, the other income represented a 461.81% YoY increase. The company’s operating profit grew to Rs 6.9 billion which represented a 14.62% QoQ increase, and a 628.15% YoY increase. The company’s finance cost also rose by 20.32% QoQ and 188.52% YoY to Rs 355 million. 

The company recorded a negative effective tax rate (ETR) of 0.4% due to the Rs 26.49 million tax refund it achieved. This is in comparison to its ETR of 6.23% in Q1FY23, and its ETR of 4.89% in Q2FY22. Finally, its final profit for the quarter rose to Rs 6.59 billion representing a 22.41% QoQ increase and a 737.74% YoY increase. 

Consolidated HFY23 Earnings 

The Pakistan National Shipping Corporation’s consolidated half-yearly earnings are characterized by significant YoY increases. Its sales revenue rose by 187.34% YoY to Rs 29 billion from its previous Rs 10.1 billion. The company’s expenditure, however, rose by only 104.91% YoY to Rs 15.8 billion. This allowed it to earn a gross profit of Rs 13.2 billion for a whopping 454.42 YoY increase. The company also managed to increase its GPM from 23.58% to 45.51%. 

The company’s other income rose by 271.93% YoY to Rs 1.4 billion, whilst its operating profit also increased by 612.59% YoY to Rs 12.96 billion. The interest expense rose by 167.54% YoY to Rs 650.5 million, and the tax expense rose by 115.82% YoY to Rs 331 million. The ETR improved from 2.69% in HFY22 to 9.75% in HFY23. 

Finally, the company recorded a consolidated HFY23 profit of Rs 11.98 billion. This represented a 742.29% YoY increase from its previous Rs 1.42 billion in HFY22.  

Unconsolidated Q2FY23 Earnings 

The Pakistan National Shipping Corporation’s standalone quarterly performance, though significant, is far more tame in comparison to its consolidated earnings. The company’s revenue and expenditure rose by 23.03% and 18.73% YoY to Rs 3.489 billion, and Rs 2.676 billion respectively. These amounts represent YoY increases of 65.82%, 50.41% respectively. The company ended Q2FY23 with a standalone gross profit of Rs 812 million. This is a 34.45% QoQ contraction from its previous Rs 1.24 billion, but 150.2% YoY increase from its Rs 324 million in Q2FY22. 

The company’s GPM improved YoY from 15.44% to 23.3%, however, this was a QoQ dip from its Q1FY23 GPM of 27.36%. 

The company’s other income rose both on a QoQ and YoY basis to Rs 707 million. This accounted for a 8.84% QoQ increase, and a sizable 555.1% YoY increase. The company’s operating profits, however, did not improve on a similar basis. Its operating profit of Rs 933 million, though a 2076.9% YoY increase, represents a 36.59% QoQ decrease. 

The company also benefited from a negative ETR due to a tax refund of Rs 57.82 million. This represented a 117.62% QoQ improvement in its tax expense, and a 388.51% YoY improvement. Pakistan National Shipping Corporation ended Q2FY23 with a negative ETR of 9.96% compared to its ETR of 27.87% in Q1FY23, and its ETR of 25.33% in Q2FY22. 

Finally, ended Q2FY23 with a final standalone profit of Rs 638.5 million. This is a 24.85% QoQ decline from its previous Rs 849 million in profit, but a 743.76% YoY improvement on its previous loss of Rs 99.186 million. 

Unconsolidated HFY23 Earnings 

Pakistan National Shipping Corporation’s HFY23 sales revenue and expenditure rose by 104.34% and 76.21% YoY, to Rs 8.021 billion and  Rs 5.969 billion respectively. This led to it clocking in a gross profit of Rs 2.052 billion with a GPM of 25.59%. The gross profit represents a 281.39% YoY increase, whilst the GPM is an improvement on its HFY22 GPM of 13.71%. 

The company’s other income rose by a significant 290.34% YoY to Rs 1.357 billion. The company’s operating profit rose by a far more significant 599.85% YoY for a total of Rs 2.4 billion. Pakistan National Shipping Corporation’s taxation expense increased by 138.05% YoY to Rs 270.38 million, whilst its ETR improved from 110.45% to 15.38%. The company ended its HFY23 with a profit of Rs 1.488 billion, which represented a 13943% YoY improvement from its previous loss of Rs 10.75 million.