Profile
Legal Structure
Pakistan Services Limited (Hereinafter referred to as "PSL" or "the Company") is a Public Limited Company, quoted on the Pakistan Stock Exchange (PSX).
Background
The Company was established in 1958 by the Government of Pakistan and Pakistan International Airlines, initially operating four hotels in Karachi, Lahore, Rawalpindi, and Peshawar. Managed by InterContinental Hotels & Resorts until 1985, the management was then taken over by Hashoo Group, which rebranded the hotels as Pearl Continental Hotels.
Operations
The Company is principally engaged in the hospitality business and owns and manages the six luxury hotels located in Karachi, Lahore, Rawalpindi, Bhurban, Muzaffarabad and PC Legacy Hunza. There are also other PC-branded hotels in locations like Gwadar, Malam Jabba, Skardu and Hyderabad. Collectively, these six hotels offer around ~1,200+ rooms.
Ownership
Ownership Structure
As of 9MFY25, Sponsors, directors, and CEO cumulatively hold ~1.07% directly and ~0.028% through associated Companies. Banks, DFIs, Insurance Companies, Mudarbas, and mutual funds cumulatively hold ~4.9%. Foreign Companies collectively hold ~30%, (each of these having less than ~10% and there exists no consortium between these Companies), hence, these foreign Companies cannot exercise control over PSL. The remaining ~35% shares are held by others, and ~29% by the general public. However, subsequent to year-end FY25, and as per notices issued on the Pakistan Stock Exchange, AKD Group Holdings (Private) Limited, along with its subsidiary AKD Securities Limited, acquired a ~27.95% shareholding in the Company on July 14, 2025. The following day, July 15,2025, Mr. Dawood Jan Mohammad acquired ~28% of the Company’s voting shares, while on October 14, 2025, Thatta Cement Company Limited acquired the stake of ~28% from Dawood Jan Mohammad. However, as per notice issued on the Pakistan Stock Exchange on November 03, 2026, Fauji Foundation acquired ~19.7% shares of the Company.
Stability
The ownership remained stable for a long time; however, subsequent to the year-end FY25, share acquisitions have resulted in significant changes to the Company’s ownership structure. With a few shareholders now holding sizable stakes, the governance landscape may be influenced in different ways. The impact on corporate governance and control, along with decision-making dynamics, remains uncertain and is yet to be determined as developments continue to unfold. At the reporting date, free float was recorded at ~94.76%.
Business Acumen
Hashoo Group began its hospitality operations in 1978 with the opening of its first hotel. In 1981, the Group added a second property under the Holiday Inn brand, introducing international standards to its operations. Since then, Hashoo Group has expanded its presence through joint ventures and operational improvements. Its hospitality portfolio includes several well-known hotel brands in Pakistan, reflecting its responsiveness to changing market conditions. Over time, the Group has contributed to the development of the hospitality sector in the country. Following recent changes in the Company’s ownership, the entry of new shareholders with different business backgrounds and experience across the diversified sector marks an important transition phase. While the long-standing operational legacy of Hashoo Group remains integral, the involvement of new investors may influence future strategic direction and governance dynamics. The evolving shareholder structure will be pivotal in shaping the Company’s business approach and sustaining its competitive positioning within the hospitality landscape.
Financial Strength
Since the onset of the COVID-19 pandemic, PSL has faced persistent challenges in obtaining direct financial support from its sponsors. Despite the sponsors’ deemed strong financial standing, underpinned by diversified business interests across hospitality, oil and gas exploration, information technology, minerals, pharmaceuticals, real estate, and commodity trading, such strength has not translated into tangible financial assistance for PSL. Nevertheless, the Company has continued to steer through operational and financial constraints, maintaining business continuity. While the prevailing economic conditions and sector-specific pressures pose challenges, PSL remains focused on sustaining its operations and exploring potential sources of support within the sponsor network and beyond.
Governance
Board Structure
As of 9MFY25, PSL comprises ten members and remains compliant with the Code of Corporate Governance. The composition includes three Executive Directors, four Non-Executive Directors, and three Independent Directors, ensuring a balanced representation. Following the notable changes in the Company’s shareholding structure in July 2025, the implications for governance dynamics and board composition are gradually unfolding. The evolving ownership landscape is expected to shape the strategic oversight framework, with its full impact likely to become clearer over time.
Members’ Profile
As of 9MFY25, the Board of Directors (BoD) consists of seasoned professionals from the hospitality industry. Chairman Mr. Sadruddin Hashwani has over four decades of experience. Independent directors are industry experts, while executive directors bring in-depth knowledge. Non-executive directors offer independent perspectives for sound decision-making.
Board Effectiveness
The former board has four key committees, including: 1) Audit, 2) Human Resource, 3) Nomination, and 4) Risk Management, which align with the Corporate Governance Code. During 9MFY25, the Board held three meetings with adequate attendance. Meeting minutes are well-documented to ensure transparency and support the overall governance.
Financial Transparency
KPMG Taseer Hadi & Co., a QCR-rated firm in category "A" of the SBP, is the Company's external auditor. They issued an unqualified opinion on the financial statements for the year ending June 30, 2024. However, the auditors drew attention to the existence of material uncertainty related to going concern which states that, as of FY24, the Company's current liabilities exceed its current assets by PKR ~10.11bn. Auditors also mentioned about the breaches in long-term borrowing agreements and non-compliance with some covenants. However, Audit of FY25 is in progress and Company has been granted extension in holding its annual general meeting.
Management
Organizational Structure
PSL operates under a structured organizational framework intended to support its business operations and governance practices. The Chief Executive Officer (CEO) leads the organization and is responsible for guiding its strategic direction and overseeing overall performance. Key functional departments—including Finance, Operations, Human Resources, Marketing, and Information Technology—are each headed by a designated leader who reports directly to the CEO. This reporting structure facilitates coordination and supports the implementation of Company-wide initiatives. Leadership and operational roles are currently staffed, contributing to continuity in management. The organizational setup enables PSL to address market conditions, regulatory obligations, and stakeholder needs. This framework reflects the Company’s approach to maintaining operational consistency and governance standards.
Management Team
PSL has undergone a key leadership transition with the appointment of Mr. Bastien Paul Emile Blanc as Chief Executive Officer. Bringing over 20 years of global experience in the hospitality industry, Mr. Bastien Paul Emile Blanc succeeds Mr. Murtaza Hashwani, and is supported by a highly qualified executive team committed to driving operational excellence and strategic growth. At present, Mr. Adnan Ahmed Saeed is the acting CFO of the Company.
Effectiveness
To enhance managerial effectiveness, PSL would benefit from the establishment of specialized management committees focused on key operational and strategic areas. These committees can play a pivotal role in strengthening oversight, improving coordination, and ensuring timely execution of day-to-day functions. Currently, the management faces challenges in implementing strategic plans and consistently meeting performance targets,which highlights the need for more accurate forecasting, proactive planning, and cross-functional collaboration. By adopting structured decision-making processes and instituting comprehensive performance monitoring frameworks, PSL can improve accountability, streamline operations, and align departmental efforts with corporate objectives. These measures would not only support better resource allocation and risk management but also empower leadership to respond more effectively to market dynamics and operational pressures, ultimately driving sustainable growth and organizational resilience.
MIS
PSL has adopted an integrated, cloud-based management system tailored specifically for the hospitality sector. This advanced platform enhances operational efficiency, streamlines service delivery, and supports real-time decision-making across its hotel portfolio. By leveraging cloud technology, PSL ensures scalability, data security, and improved coordination among departments, reinforcing its commitment to innovation and service excellence.
Control Environment
PSL has established a well-structured and independent Internal Audit Department that plays a vital role in strengthening the Company’s governance, risk management, and internal control environment. Reporting directly to the Audit Committee of the Board of Directors, the department ensures transparency, accountability, and alignment with best practices. It operates across three core dimensions: 1) Assurance, 2) Consulting, and 3) Investigation. In its Assurance role, the department evaluates the effectiveness of internal controls, risk management systems, and compliance with regulatory requirements. Through its Consulting function, it advises management on process improvements, internal control enhancements, and operational efficiency. The investigative role involves conducting special audits and forensic reviews in response to suspected irregularities or non-compliance.
Business Risk
Industry Dynamics
Pakistan’s hotel industry operates within the broader travel, tourism, and hospitality sector, which has exhibited steady recovery in recent years driven by growing domestic tourism, business travel, religious tourism, and improving connectivity infrastructure. The accommodation and food services segment contributes approximately 1.5% of Pakistan’s GDP and around 2.6% of the overall services sector, highlighting the sector’s importance within the national economy. The industry is dominated by organized hotel operators concentrated in major commercial centers such as Karachi, Lahore, and Islamabad, alongside emerging tourism destinations in Gilgit-Baltistan, Khyber Pakhtunkhwa, and Azad Jammu & Kashmir. Demand is primarily generated through corporate and government travel, diplomatic activities, domestic leisure tourism, overseas Pakistanis, and religious tourism. According to the Pakistan Travel & Tourism Economic Impact Research published by the World Travel & Tourism Council (WTTC), the travel and tourism sector continues to enhance its contribution to economic activity through increasing domestic and international visitor spending, with positive growth forecasts extending through 2036.
The sector has also benefited from government initiatives aimed at promoting tourism, improving visa facilitation, and encouraging private-sector investment in hospitality infrastructure. Several international and local hotel chains have announced expansion plans to capitalize on the country's untapped tourism potential, particularly in northern areas where tourist inflows have increased significantly over the last few years. Notwithstanding the favorable long-term outlook, the industry remains vulnerable to macroeconomic challenges, including inflationary pressures, elevated energy tariffs, exchange rate fluctuations, and security-related perceptions, all of which can affect occupancy levels and profit margins. Nevertheless, premium and business-focused hotels generally maintain relatively resilient occupancy levels due to stable corporate, government, and institutional demand. Overall, the outlook for Pakistan’s hotel industry remains stable, supported by expanding tourism activity, ongoing infrastructure development, rising travel demand, and the sector’s increasing contribution to the national economy.
Relative Position
PSL operates within Pakistan’s hospitality industry through its ownership and management of the Pearl Continental (PC) Hotels chain. With properties located in major urban centers and tourist destinations, the Company maintains a presence in the upscale and luxury hotel segment. The Pearl Continental brand is recognized in the market and competes alongside other established names such as Serena Hotels, Marriott, Avari, and Hilton. PSL’s geographic footprint and service model reflect its focus on meeting the expectations of high-end clientele. The Company continues to invest in infrastructure, technology, and service delivery as part of its broader operational strategy.
Revenues
The Company derives its revenue from four primary sources: rooms (the largest contributor), food and beverage, other related services, and shop license fees. During 9MFY25, the Company achieved a revenue growth of ~15% on year-on-year basis, reaching PKR ~12,945mln, compared to PKR ~15,045mln in FY24. This growth is primarily driven by a notable improvement in operational metrics, including a rise in average occupancy rates from ~57% in FY24 to approximately ~55% in 9MFY25. Additionally, higher average daily room rates and a broader market recovery contributed to the positive financial performance.
Margins
During 9MFY25, PSL reported a notable improvement in profitability. The Company’s gross margin increased to ~46.2%, up from ~39.4% in FY24. This enhancement is primarily attributed to higher average daily room rates (ADR) and more efficient operational management. PSL also achieved a significant rise in net profit, recording PKR ~992mln in 9MFY25 compared to PKR ~425mln in FY24. This notable improvement in profitability is primarily attributable to a surge in sales volumes and a reduction in finance costs during the review period. The results reflect heightened market demand and improved occupancy rates across the Company’s hotel portfolio,underscoring PSL’s strengthened operational performance and strategic market positioning.
Sustainability
Over the past two years, PSL faced significant challenges in meeting its debt obligations, despite maintaining a substantial asset base. In response, the Company undertook a strategic initiative to stabilize its financial position by divesting non-core assets. This approach enabled PSL to retire a considerable portion of its outstanding debt and accrued interest. Since
undertaking its deleveraging program, the Company has repaid principal of PKR
~8.5bln and interest of PKR ~10.4bln against total long-term facilities of PKR
~15.3bln. Outstanding principal obligations currently stand at PKR ~6.8bln,
including a Sukuk facility of PKR ~4.5bln. The Company's substantial
non-current asset base, valued at PKR ~55.5bln as of 9MFY25, continues to
provide support against its debt obligations. Recognizing a persistent mismatch between cash inflows and debt servicing requirements, management launched a two-phase debt restructuring plan. The initial phase encountered several challenges, particularly in liquidating designated assets to generate the necessary cash flows. The Company is currently engaged in discussions with its banking partners, aiming to reach an amicable resolution within the current quarter.
Financial Risk
Working capital
During 9MFY25, the Company successfully maintained a strong position in its working capital management, achieving a negative net working capital cycle of -8 days, compared to -12 days in FY24. This performance reflects the Company’s continued focus on operational efficiency and liquidity optimization. The successful execution of initiatives aimed at enhancing cash flows remains critical to addressing the asset-liability mismatch and ensuring long-term financial stability.
Coverages
During 9MFY25, the Company generated free cash flows from operations amounting to PKR 3,338mln, compared to PKR 3,446mln in FY24. While slightly lower year-over-year, the Company demonstrated improved financial efficiency, as reflected in its interest coverage ratio, which rose to ~2.8x in 9MFY25 from ~1.5x in FY24. This improvement indicates enhanced capacity to meet interest obligations, driven by stronger operational cash flows and better cost management.
Capitalization
The Company's debt book primarily consists of short-term borrowings, amounting to PKR ~10,068mln as of 9MFY25. This shift is due to the reclassification of long-term borrowings to the current portion in FY24 following restructuring arrangements. The Company’s proposal to restructure its long-term loan and Sukuk facilities is currently under review. While preliminary approval has been granted based on mutually agreed terms, the process has experienced delays due to ongoing internal approval procedures among the lending institutions. The Company continues to engage with all relevant stakeholders and expects to receive the final term sheets upon completion of the remaining formalities. Total borrowings during 9MFY25 were PKR ~10,382mln, compared to PKR ~10,388mlnin FY24. The gearing ratio for 9MFY25 was recorded at ~18.3% from ~19% in FY24, indicating a modest reduction in financial leverage.
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