Finance Minister Ishaq Dar chairing a meeting on Saudi-Pak company. PHOTO: PID
Saudi-Pak Industrial and Agriculture Investment Company Limited earned a Rs1.4-billion pre-tax profit last year, said Chief Executive Kamaluddin on Saturday, claiming that the management succeeded in turning around the entity in a span of three years.
The chief executive gave a detailed briefing about the financial health of the company to Finance Minister Ishaq Dar.
He said compared with the deteriorating financial condition three years ago, the company achieved a complete turnaround in its operating results in 2014.
“From an insolvent position in 2011 with mounting financial problems, it rose to become a top performer in 2014,” a Ministry of Finance press release quoted Kamaluddin as saying.
The chief executive said the company’s turnaround and a substantial improvement in its financial condition had been recognised by the credit rating agency JCR-VIS through an upgrade in the long-term entity rating from ‘AA’ to ‘AA+’.
In 2012, the company’s management was changed which led to positive results. The profit before tax of Rs1.4 billion in 2014 was the highest ever achieved by the company since its incorporation in 1981.
According to financial results, after-tax profit stood at Rs1.15 billion in 2014 compared with Rs764.6 million in the previous year, posting a growth of over 51%. However, one of the main factors behind the surge in income was gain on the sale of government securities.
The company gained Rs405.4 million on the sale, which pushed overall earnings significantly up.
Saudi Pak Industrial and Agricultural Investment Company is a development finance institution and provides a range of financial products and services, according to Bloomberg’s business review. It offers project finance, working capital loans, medium to long-term loans, lease financing, term finance certificates, short-term financing, direct equity investments and underwriting, non-funded commitments in the form of guarantees, syndication and trusteeship products and services.
The company was jointly established by Saudi Arabia and Pakistan and had a paid-up capital of Rs6 billion as of December 2013.
Dar directed the chief executive to devise a pragmatic roadmap for future investment ventures which could be implemented after due consideration by the company’s members from both Pakistan and Saudi Arabia.
Kamaluddin said non-yielding assets had significantly dropped by 27.9% to Rs5.5 billion from Rs7.5 billion in 2011 due to aggressive recoveries. Total assets in the period rose to Rs7.8 billion. Similarly, shareholders’ equity increased by Rs2.49 billion.
So far, it has undertaken project financing to the tune of Rs46 billion in the fields of textile, chemical, energy, cement, telecom, construction and other important areas.
The minister appreciated the turnaround achieved by Saudi-Pak Investment Company, emphasising that it should adopt a futuristic approach and chalk out a comprehensive plan for investment in different sectors.
He said the company should strengthen economic cooperation between Saudi Arabia and Pakistan and add value for the stakeholders through capital formation and investment-related activities in Pakistan and abroad.
An exercise for changes in different rules of the company could be undertaken, taking all members on board, he suggested.
Published in The Express Tribune, March 15th, 2015.
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