JCR-VIS Maintains Ratings of Jamshoro Joint Venture Limited –

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JCR-VIS Maintains Ratings of Jamshoro Joint Venture Limited –

March 29, 2018

Karachi, March 28, 2018 (PPI-OT): 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 more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

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