According to JS Global, the Pakistan National Shipping Corporation (PNSC) has announced plans to acquire additional Aframax boats by 2028 as part of a goal to upgrade its fleet and enhance marine capabilities. During a corporate briefing, PNSC discussed its FY24 financial performance and future prospects. The company reported a combined topline of Rs 46 billion for FY24, representing a 15% year-on-year (YoY) reduction.
This loss was principally caused by a 48 percent YoY decrease in the dry cargo market due to lower average charter prices. Furthermore, slot charter operations fell by 33% YoY as government consignments fell, with no business coming from the Trading Corporation of Pakistan (TCP), which had contributed Rs 2.8 billion the previous fiscal year. Meanwhile, liquid freight income was constant at Rs 40 billion.
Other income declined by 17 percent year on year, owing to the absence of gains from vessel disposals (Rs 3.3 billion in FY23) and a lack of exchange gains in an otherwise stable currency. However, PNSC management predicts increased demand this year, led by the dry bulk market and new break-bulk orders from the government.
The business intends to replace four of its five Aframax boats, which are 18 to 19 years old. International tenders have been issued, with bids received from shipyards in the United Kingdom, China, and other countries. The contract is expected to be finalized by the end of 2024. Under the State-Owned Enterprises Act 2023, PNSC can now match its procurement procedures with international shipping industry norms, subject to federal cabinet approval.
The new vessels will meet the International Maritime Organization’s carbon reduction targets, which include a 20% decrease by 2030, 70% by 2040, and net-zero emissions by 2050. These ships will have internally coated tanks, allowing them to transport both filthy and clean liquids, increasing market ado.
PNSC proposes to finance the purchases using a combination of equity and debt, with debt financing accounting for 80 percent of the total cost. The anticipated cost of brand-new or under-construction Aframax tankers is $85 million per, whereas new-build contracts range from $73 million to $75 million. Regulatory constraints limit the acquisition of vessels older than five years. Currently, used Aframax vessels cost around $12 million, with a scrap value of $7-10 million.
The business also intends to continue its dry dock operations, with five boats slated for maintenance. One tanker will be out of service for 40-45 days, while four dry bulk vessels will be dry docked for 25-35 days.
