Press Release

JCR-VIS Maintains Ratings of Jamshoro Joint Venture Limited

Karachi, March 28, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has maintained the entity ratings of Jamshoro Joint Venture Limited (JJVL) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the assigned rating has been revised from ‘Positive’ to ‘Stable’. The previous rating action was announced on January 03, 2017.

The ratings take into account JJVL’s prominent position in the LPG business. The ratings also incorporate company’s largely sustained profitability mainly on account of higher product prices and better propane recovery. The ratings also take into account declining gas volumes, adversely impacting quantum of processing fee and product sales. Timely recoupment of capacity utilization is an important rating factor.

The quantity of gas processed declined during FY17 on account of reduced production of gas from Badin fields that resulted in lower sales revenue. However, gross margins improved on the back of higher prices of both products, improved propane recovery, and decrease in stores and spares consumed.

Despite increase in debt levels, gearing of the company decreased on account of notable increase in equity base. Funds from Operations (FFO) stood higher on account of lower mark-up and tax related payments during FY17. Given increase in debt levels, FFO to total debt remained at 0.26x (FY16: 0.27x). With declining long-term debt and the related repayments, debt service coverage remained strong.

JJVL has 25% stake in ordinary share capital of Pakistan Gasport Limited (PGPL), an LNG import tolling terminal. CoD has been achieved in Jan’18. The management expects the venture to generate stable dividend stream for the company, going forward.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.

Javed Callea

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 2018 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