PAKISTAN INTERNATIONAL CONTAINER TERMINAL - PICT

MARIAM NASIR, Research Manager
May 28 - Jun 03, 2007

Pakistan International Container Terminal Limited operates as a terminal operating company in Pakistan. The company engages in the design, construction, development, and operation of a container terminal project at Karachi Port. The company was founded in 2002 and is headquartered in Karachi, Pakistan. PICT, commenced commercial operations in August 2002, within six weeks of taking over possession of the container terminal area from KPT with the existing container handling equipment of Premier Mercantile Services (PMS); henceforth, the company started generating business and paying Royalty and Land Rental to KPT within six weeks of taking the possession of the area. PICT is sponsored by the Premier Mercantile Services Group (PMS Group) that was established in 1964 with its core activities relating to the shipping industry, including stevedoring, terminal operations and shipping agencies. PICT has 4 Ship-to-Shore (STS) Quay Cranes, 2 Mobile Harbour Cranes, 10 Rubber Tyred Gantry (RTG) Cranes and other ancillary equipment. The dedicated area for the Terminal is 220,000 square meters. The Quay Wall length is 600 meters. Amongst the present container terminals in Pakistan, PICT has the deepest designed berths, with a planned alongside depth of 13.5 meters and a current alongside depth of 12.2 meters. An entire Power Generation Plant of 7.4 Mega Watt capacity is installed with Cummins (UK) generators. PICT is enhancing the capacity of the Power Plant to 10 Mega Watt. PICT is the only Container Terminal in Pakistan Sponsored and owned by Pakistanis. It is the only port infrastructure project whose shares are quoted on the Karachi Stock Exchange. It is the first port infrastructure project in Pakistan financed by International Finance Corporation (IFC) — the private sector arm of the World Bank. It is the first private sector project in Pakistan in which the OPEC Fund for International Development has participated as financiers. Ever since it's listing on the KSE in October 2003, PICT's performance at the bourse has to a large extent been at par with that of the market.

The company provides container handling services at Karachi Port to a large number of international shipping lines, which include:

•Balaji Shipping (U.K.) Limited, Dubai
•Ceylon Shipping Corporation, Sri Lanka
•Malaysian International Shipping Corp., Malaysia
•Pakistan National Shipping Corp., Pakistan
•Sea Consortium Limited, Singapore
•Safmarine Ltd., South Africa
•Wan Hai, Taiwan
•Balt Orient Line, U.K.

PICT - 21 YEARS BUILD OPERATE AND TRANSFER (BOT) CONTRACT

3-PHASE EXPANSION AGREEMENT

PICT started its operation in 2002 when Premiere Mercantile Services (PMS) was awarded a 21-year Build Operate and Transfer (BOT) contract from KPT to develop a container terminal on berths number 6-9 in three phases. PICT successfully completed phase I and phase II of its container terminal expansion projects in Mar 2004 and Jun 2006 respectively with a total cost of US$47m. The company has now commenced the phase III program, which would increase the container handling capacity of the company to 550,000 TEU per annum by Jun 2008 from current capacity of 400,000 TEU per annum. The estimated cost of the Phase III expansion is US$30m. This is to be partly financed through leasing facility and foreign debt from IFC and OPEC Fund for International Development and partly through company's internal cash generation. After the said expansion, Pakistan International Container Terminal would become the largest container terminal facility of the country, with a capacity to handle 550,000 TEU per annum. At present, the three notable container handlers hold around 1.3m (Twenty Foot Equivalent Container Units). But current PICT and KICT are undergoing expansions after which the overall handling capacity of the industry would increase to 1.55m (Twenty Foot Equivalent Container Units).

 

PHASE-I

PHASE-II

PHASE-III

Capacity After Expansion

150,000

400,000

550,000

EQUIPMENT (UNITS):

Ship-to-Shore Gantry Crane

2

1

1

Rubber Tyred Gantries

4

2

4

Reach Stacker

2

2

1

Top Lifter

1

0

0

Empty Handlers

2

0

0

Terminal Tractors

10

5

15

Trailer Units

20

10

15

ESTIMATED YEAR OF OPERATIONS:

MAR-04

JUN-06

JUN-08

STATUS

COMPLETED

COMPLETED

IN PROGRESS

Estimated cost (US$m):

29

18

30

RESULTS OUTLOOK

PICT has a decent earning pattern and company's earnings grew at 3-years CAGR of 148.8% to Rs291m in FY06 from Rs19m in FY03 whereas shareholder equity of the company also increased at 3 year CAGR of 51.8% from Rs0.43bn in FY03 to Rs1.49bn in FY06. The nine month period from July 2006 to March 2007 observed the continuity of the growth in PICT container handling volumes and revenues. PICT handles 253,719 TEU during the period under review as compared to 229,677 TEU handled during the corresponding period of last year, showing a growth of 10%. The company showed a robust growth in terms of turnover. The company achieved a turnover of Rs.1602m as compared to Rs.1286m in the same period last year. Pakistan International Container Terminal (PICT) declared profit of Rs250m and earning per share of Rs3.30 in nine month period of FY07 as compared to Rs238m (EPS: Rs3.15) in the corresponding period last year, posting a growth of 4.9% due to 10.5% growth in container handling volume. Gross margins of the company declined to 37.6% in the period under review from 39.4% in the matching period last year due to comparatively more increase in operating cost than sales revenue. Financial charges stood at Rs124m in 9M/FY07 as against Rs64m in the corresponding period last year, representing an increase of 94% due to mark up on US$ loans acquired to finance the company's expansion plan.

GOING FORWARD

The company is well poised towards a strong growth in revenue and profitability. Already operating near full capacity added in the first two phases of expansion, PICT is implementing the final phase of capacity expansion as per its contract with KPT. Rising throughput levels backed by capacity expansion will boost PICT's share in the fast growing containerized cargo market.