Research Analyst
5 - 11, 2012

The National flag carrier of Pakistan, trading under the name of Pakistan National Shipping Corporation (PNSC) is engaged in transportation of dry bulk and liquid cargoes globally. PNSC is an autonomous corporation, which functions under the overall control of the Ministry of Ports and Shipping, Government of Pakistan. It manages a fleet of 10 ships, real estate and a repair workshop.

PNSC's fleet is a mix of double hull aframax tankers, panmax bulk carriers, supramax, handymax and handysize bulk carriers, all of modern vintage, having a total carrying capacity of over 666 thousand tonnes of deadweight.


2007 14 536,821
2008 14 536,821
2009 11 477,238
2010 10 633,273
2011 11 646,666
2012 10 628,409

PNSC has transported approx 80 million tonnes of crude since 1998 when it started tanker operations. At present, PNSC operates 3 modern double hull aframax tankers of 107000 DWT (fleet deadweight tonnage) capacity. These vessels provide a shuttle service from MEG ports to Pakistan for the country's oil industry. In addition to serving National trade, PNSC has also become a known name in regional markets, transporting crude oil to Singapore, Kenya, India, Srilanka and Bangladesh. The corporation transports all type of cargoes on several geographical routes covering almost entire world.

PNSC acquired its first bulk carrier namely Kaghan in 2006. Since then PNSC has been able to add further six modern bulk carriers of different type and sizes to cater for all kinds of large and small bulk trades. These include a 2009 handy size, one handy max, one supramax and another panamax of 2003 vintage. With an average age under 09 years PNSC is well placed to cater for any world wide trade. Today its bulk carriers are operating from all continents carrying iron ore, coal, grains, other bulk minerals, timber, fertilizers and other finished products. The panamax dry bulk carriers carry coal and iron ore for energy and steel production as well as grain for feedstocks.

The corporation's vessels contribute to worldwide sea borne trade in a multitude of trade routes and carry wide range of cargoes for a number of traders and chartereres of international repute. These vessels are being operated by highly qualified and competent professionals. The corporation is listed on the Karachi stock exchange.


The Shipping is a highly competitive market driven industry; its profitability is dependent on optimum utilization of vessels, strict cost controls and maximization in cargo lifting. The economic downturn has affected every sector of the maritime industry and the PNSC was no exception. Despite this PNSC remained profitable during the period under review. The Commercial performance of the PNSC translated into financial gains. During the third quarter ended March 31, 2012, the consolidated revenues of the group were Rs 2,234 million (including Rs 591 million from PNSC), making a total of Rs 6,640 million (including Rs 1,906 million from PNSC) for the nine months period under review as against Rs 6,772 million for the corresponding period last year. The corporation asked the government to direct the public sector importers to utilize the services of national shipping lines in order to share more revenue among local companies instead of depending too much on foreign shipping companies.


MARCH 31, 2012
Revenue 2,234,415
Gross profit 494,198
Profit before taxation 110,139
Profit after taxation 51,651

Although, the Net Profit after tax for the nine months to 31 March 2012 was Rs 109 million as against Rs 787 million last year. EPS for the 9 months period ended March 31, 2012 were Rs 0.83 as against Rs 5.96 for the corresponding period last year.


Pakistan once led the world in ship breaking but now occupies third place because other countries were willing to pay higher prices for the worn-out ships and because of differences in currency exchange rates. Pakistan's ship-breaking industry peaked in the 1970s and 1980s, annually feeding 1m metric tonnes of scrap metal to the steel industry. The industry started slumping in the 1990s but is turning around now. Pakistan forecasts processing 850,000 metric tonnes of scrap this year, up from 650,000 in 2011.

The clang of metal and the smell of burning steel as blowtorches cut through ship hulls are again in the air as Pakistan's ship-breaking yards enjoy a revival.

High international prices for worn-out ships, which Pakistani yards were not willing to pay, and high Pakistani duties imposed on the scrapping yards caused the industry to stagnate. Now, though, the price trend is reversing. Last year, companies had to pay $500-$530 (Rs. 42,600-48,000) per metric tonne for ships; this year, it is $450-$475 (Rs. 40,700-43,000).

That, coupled with an increase in demand for scrap steel by the construction industry, is helping ship-breaking, which employs 125,000-150,000 in Pakistan, stage a comeback. Tonnage is a more important measure of production than the number of ships, because ship sizes vary, but even ship numbers indicate a comeback. During its peak years, Pakistan dismantled 150-175 vessels per year. During the slump, the number fell to 30-40 per year. Last year, workers dismantled about 100 small to medium-sized ships; this year about 90 large vessels are expected.


International shipping market continues to be depressed due to very marginal improvement in demolition and new ships supply into the market coupled with stagnant trade volume. It also appears that fuel prices will maintain its rising trend for some time. Therefore the management is hopeful that end of this year will show signs of improvement.