PIBTL Cargo handling declined by 39.5% YoY in 2QFY22

News Report

PIBTL’s cargo handling declined by 39.5/35.8% YoY/QoQ in 2QFY22 to 1.79mn tons as compared to 2.95mn tons in 2QFY21.

PIBTL handled 1.79mn tons of imported coal in 2QFY22 (down 39.5/35.8% YoY/QoQ).

We attribute the decline in the company’s cargo handling to lower imports by the private sector given record-high international coal prices, Foundation securities said in an alert.

The other reason was due to the slowdown of growth in the manufacturing sector and the decline in business from power plants that were earlier relying on PIBTL for shipments above 40,000 tons.

Furthermore, PIBTL capacity utilization decreased by 39/33ppt YoY to 60% in 2QFY22 as compared to 98/93% in 2QFY21/1QFY22.

Despite lower volume support to company margins is likely from avg rupee depreciation of 7.9/5.7% YoY/QoQ against the greenback in 2QFY22 due to the company’s US$ denominated revenue stream.

Coal prices have reached 10 years high

Moreover, the company will book exchange loss on its foreign currency debt due to 3.5% QoQ rupee depreciation between reporting dates.

PIBTL would have a net positive impact of rupee depreciation in FY22 as its US$ denominated debt stands at US$37mn and its net revenue after royalty charges in US$ would be US$45mn in FY22.

The company is not under our formal coverage. However, we expect the company to remain beneficiary of robust economic recovery, it said.

It will also benefit from 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.

Furthermore, Foundation security expects PIBTL to witness growth in volume handling during FY23/24 due to increased coal imports by the cement/textile sector, general industry, and COD of Lucky Electric Power Company.

However, the company remains exposed to inherent risks of resumption of coal handling by KPT which is currently suspended on Supreme Court directives and delay in expansion.