Press Release

JCR-VIS Reaffirms Ratings of Jamshoro Joint Venture Limited

Karachi, January 03, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Jamshoro Joint Venture Limited (JJVL)) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the assigned rating is ‘Positive’. The previous rating action was announced on January 19, 2016.

The ratings are supported by JJVL’s prominent position in the LPG business and largely sustained operating performance with higher capacity utilization offsetting the impact of lower volumetric sales and subdued product prices. Gas processed remains the main driver of profitability .Downward revision in operation and maintenance charges positively reflected on the margins of the company. Going forward, revenues are expected to sustain while lower product prices may put pressure on margins.

Pakistan Gasport Limited (PGPL), a subsidiary of JJVL, is in the process of establishing a LNG import tolling terminal with an on board re-gasification. JJVL has contributed 25.00% of the ordinary share capital of PGPL amounting to Rs. 1.073b. The management expects the venture to generate stable dividend stream for the company, going forward. The rating take into account the project related risks present in JJVL’s investment in PGPL.

Overall financial risk profile remained commensurate with the outstanding ratings. On account of increase in debt levels, gearing has trended upwards; these are likely to exhibit improvement going forward as a result of positive momentum in earnings and no major CAPEX requirements. Cash flow coverage of the company remained strong depicting adequate capacity of the company to timely meet debt obligations.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 (Ext. 234) or Mr. Waqas Munir, FRM at 042-35723411-13 (Ext. 8010).

Muhammad Khalid Ali

Applicable Criteria:

Oil & Gas Industry (Nov 2016)
Industrial Corporates (May 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited