Press Release

JCR-VIS Maintains Entity Ratings of Jamshoro Joint Venture Limited

Karachi, March 20, 2015: 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). The ‘Rating Watch-Developing’ status has been removed. Outlook on the assigned rating is ‘Positive’. The previous rating action was announced on Dec 31, 2013.

The rating action takes into account settlement of issues on Gas Supply Agreement (GSA) with Sui Southern Gas Company Limited (SSGCL) reflecting positively on the business risk profile of the company. Under the new arrangement, JJVL has been granted processing rights by SSGCL to process and extract LPG and NGL from the gas being delivered from various fields. LPG produced is equally distributed between JJVL and SSGC. JJVL also holds a contract to procure and export 100% of the NGL produced. Availability of gas has improved translating into higher capacity utilization and production. Improvement was also noticed in the propane recovery rate.

During FY14 and 1H15, improvement in sales has been witnessed primarily on account of higher processing income and increased sales volumes. Gross margins, while declining on a timeline basis, continue to remain strong. With increase in sale volumes and reduction in finance cost on account of reduced funding requirements, company’s profitability has strengthened. Depending on availability of uninterrupted gas supply, positive momentum in earnings is likely to continue attributable to higher installed processing capacity.

Management has reached an understanding with SSGCL on settlement of all outstanding liabilities. Contractual repayments are likely to be comfortably met on account of improvement in internal funds generation. Moreover, leverage indicators are likely to improve.

For further information on this rating announcement, please contact Mr. Javed Callea at 021-35311861-70 or Mr. Maimoon Rasheed at 042-36610681-84.




Jamal Abbas Zaidi
Deputy CEO

Applicable Rating Criteria: Oil & Gas Industry (Feb 2004)

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 March 20, 2015 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.