The Pakistan Credit Rating Agency (PACRA) has granted an Entity Ratings of Long Term ‘AA’ to Pakistan National Shipping Corporation (PNSC) in February, 2017. This rating has been raised from PNSC’s previous Entity Ratings of Long Term ‘AA-‘in 2016.
The Short Term Ratings given to PNSC this year was ‘A1+’, while its 2016 Short Term Ratings was also A1+. PNSC’s Outlook has also remained constant at ‘Stable’. The action advised for PNSC in 2017 is ‘Upgrade’, while last year the advised action was to ‘Maintain’.
As per PACRA’s report, the ratings reflect PNSC’s strong ownership – majority owned by Government of Pakistan and its strategic significance as the country’s flag carrier. On a stand-alone basis, PNSC’s business profile has gained significant strength in recent years and exhibited by continuous improvement in business margins on account of efficient fleet utilization, better pricing strategy and cost management measures taken by the management.
Sen. Mir Hazil Khan Bizenjo, Minister for Ports & Shipping remarked, “It is noteworthy that the PNSC is cruising ahead with distinction having achieved the ‘AA’ ratings at the start of 2017. PNSC being a Public Sector company has displayed resilience by adopting robust measures and stringent controls and as a consequence PNSC’s business profile has gained significant strength in recent years.”
Mr. Arif Elahi, Chairman, PNSC, said, “The PACRA Entity Ratings of Long-Term ‘AA’ upgrading PNSC to having a stable outlook is significant and a milestone in the history of the national carrier. I am delighted to report that a concerted team effort, effective management practices and decisions based on best global practices in a most challenging environment have enabled us to achieve this result; congratulations to the entire staff of PNSC.”
The ratings are dependent on the Corporation’s ability to generate envisaged cash-flows post-expansion. Meanwhile, proactive management of financial profile, while improving coverage’s remains important. Credit rating reflects forward-looking opinion on credit worthiness of underlying entity or instrument; more specifically it covers relative ability to honor financial obligations. The primary factor being captured on the rating scale is relative likelihood of default.