Energy Infrastructure Holding (Pvt.) Limited

CREDIT RATING REPORT | Jan-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
24-Jan-25 A- A1 Stable Maintain -
26-Jan-24 A- A1 Stable Maintain -
26-Jan-23 A- A1 Stable Maintain -
03-Feb-22 A- A1 Stable Maintain -
03-Feb-21 A- A1 Stable Maintain -
About the Entity

Energy Infrastructure Holding (Private) Limited is a wholly owned subsidiary of Jahangir Siddiqui & Co. Ltd. The Company was incorporated in 2008 as a private limited company under the Companies Ordinance, 1984 (now the Companies Act, 2017). The principal activities of the Company are to invest in energy, petroleum, and infrastructure projects. Syed Ali Hasham serves as the CFO and Company's Secretary. Mr. Muhammad Babar Din and Mr. Furqan Ahmed serve as the Company's Directors. While, Ms. NoorUlain is the CEO of the Company. She is assisted by a team of experienced professionals.

Rating Rationale

The ratings of Energy Infrastructure Holding (Private) Limited ('EIHPL' or 'the Company') reflect its strong association with its parent company, Jahangir Siddiqui & Co. Ltd. ('JSCL'). The Company has successfully diversified its investments across a wide array of sectors, ensuring a balanced and resilient portfolio. EIHPL has strategically invested in EFU General Insurance. Other investments are spread across various sectors, including LPG storage (via JS Petroleum Limited), and other industries such as insurance, sugar, glass, and fertilizer. Notably, JS Petroleum Limited is in the process of establishing a new LPG storage terminal at Port Qasim, which is expected to contribute significantly to the Company’s future growth. As the investment arm of JSCL, EIHPL primarily funds its investment projects through equity sourced from its parent company, enabling it to maintain a solid financial foundation. EIHPL has a well-established mechanism for overseeing investment management, monitoring processes, and making new investments, which is crucial for any holding Company. Investment decisions are primarily guided by the expertise and resources available within JSCL, which provides strong support and strategic guidance. EIHPL has developed and adheres to a prudent investment policy, designed to align its asset allocation with the goals and objectives of its investors. The policy ensures that investments are made in a manner that is both sustainable and consistent with the long-term financial vision of the Company. As of 9MCY24, the Company’s investment portfolio has shown a slight improvement of ~9.6%, reflecting positive growth in its asset base. The Company’s dividend income constitutes ~95% of total earnings, primarily from investments in the insurance sector and the sugar sector. Notably, dividend income saw an increase of ~67% during 9MCY24, signaling a positive shift in the financial health of the dividend-paying companies within its portfolio. In addition to dividend income, the Company benefits from other income streams, which provide additional liquidity and financial flexibility. The reduction in funding expenses has played a pivotal role in improving EIHPL’s debt profile. This has led to a significant enhancement of its interest coverage ratio, demonstrating the Company’s improved ability to service its debt obligations. Moreover, this has also contributed to a strengthened capital structure, further improving its financial stability. The realization of long-term projects and envisioned strategies is expected to further amplify the financial performance and investment portfolio. Continued support from the JSCL, remains a key rating factor, providing the financial backing and strategic guidance necessary for sustained growth and success in the coming years.

Key Rating Drivers

The ratings are dependent on continued support from the parent company. Realization of the envisioned investment plans and formalization of a strong and effective mechanism for monitoring performance and providing holistic direction as a holding company is critical for the ratings. The strong performance of portfolio companies and stable dividends remain important.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Energy Infrastructure Holding (Pvt.) Limited

rating analysis

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Profile
Background

Energy Infrastructure Holding (Private) Limited ('the Company' or 'EIHPL') is a private limited company incorporated in Pakistan under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017).


Structural Analysis

The Company was incorporated on April 15, 2008 and is a wholly owned subsidiary Jahangir Siddiqui & Co. Ltd. (the Holding Company). The principal activities of the Company are to invest in energy, petroleum and infrastructure projects. The registered office of the Company is located at Saddar, Karachi. 


Ownership
Ownership Structure

The Company is a wholly owned subsidiary of Jahangir Siddiqui & Co. Ltd (JSCL), the Holding Company of JS Group (‘the Group’). Ownership of the Company is seen as stable as no change is expected. 


Stability

Ownership is seen as stable as major stake rests with 'JSCL' and the holding company structure is in place.


Business Acumen

JS Group is a renowned business group of Pakistan. The Group has varied interests in the financial sector, including asset management, financial advisory, brokerage, insurance and banking. JS Group also has investments in industries namely textile, energy, infrastructure, media services, telecom and technology.


Financial Strength

The Company, being wholly owned by JSCL, derives its financial strength from the parent Company.


Governance
Board Structure

BoD comprises three members, all of them are Non- Executive members, including the CEO. Limited size of the Board and absence of independent oversight indicates room for improvement in the overall governance framework. However, oversight is maintained through common personnel between senior management of JSCL and BoD members of EIHPL.


Members’ Profile

Mr. Muhammad Babar Din (Company's Director) is an associate member of the Institute of Cost and Management Accountants of Pakistan (ICMAP) and has more than 11 years of work experience in Financial Institutions with core strengths in financial reporting, managerial reporting, treasury back office, International accounting standards (IAS) and International financial reporting standards (IFRS) and has been associated with JS Group since 2018. Ms. NoorUlain, Director & CEO, is currently pursuing Chartered Accountancy from the Institute of Chartered Accountants of Pakistan (ICAP). She has more than eight years of experience in the field of auditing, finance & taxation and has been associated with the Company since 2021. Mr. Furqan Ahmed- Director, is ACCA part qualified and has overall experience of five years and has been associated with the Company since 2023.






Board Effectiveness

The Board meets on need-basis and attendance remains full.


Transparency

KPMG Taseer Hadi & Co., Chartered Accountants are the external auditors of the Company, and they issued an unqualified audit report for year ended Dec-23.


Management
Organizational Structure

Currently, the management of JSCL is looking after the affairs of the Company. The subsidiary company, JS Petroleum, has its own CEO that reports directly to the BoD. JSCL has optimized its organizational structure as per the needs of the business. There are four major departments including a) Investments, b) Finance, c) Human Resources and Administration, and d) Corporate Affairs.


Management Team

Ms. NoorUlain, CEO, is currently pursuing Chartered Accountancy from the Institute of Chartered Accountants of Pakistan (ICAP). She has more than eight years of experience in the field of auditing, finance & taxation and has been associated with the Company since 2021. Syed Ali Hasham, ACA, having over 10 years of experience, is working in the capacity of CFO and Company Secretary since 2017. Overall, the senior management of EIHPL comprises well-qualified and experienced professionals having a relatively long association with the Company.


Management Effectiveness

Keeping in view the initial stages of the underlying subsidiaries and limited operations of the Company itself, no management committees are in place currently. A formal review mechanism to monitor the performance of subsidiaries will be implemented in the future.


Control Environment

Management accounts and reports such as variance analysis are solicited from the subsidiaries on a monthly basis and after review, are presented to the ultimate parent company (JSCL) for reporting purposes. Budgets are prepared on an annual basis to define financing requirements for deployment to underlying subsidiaries.


Investment Strategy
Investment Decision-making

The Company’s investment decisions are taken by the Board. The investments oversight framework encompasses the structure whereby Board members are represented on the boards of investee companies. The board members seek requisite information from the IC prior to attending the board meeting of investee companies.


Investment Policy

The Company has a prudent investment strategy as it focuses on investing in the energy sector mostly. These include investment in LPG storage currently. The Company preserves liquidity through its ample dividend income and short-term listed securities


Investment Committee Effectiveness

The Board is presented an investment dashboard highlighting the performance of investee companies on a quarterly basis. The management has planned new initiatives to strengthen the oversight framework going forward.


Business Risk
Diversification

EIHPL’s portfolio of investments is categorized into a) Core Investments (12%), b) Strategic Investment (35%) and c) Trading Investments (53%).EIHPL's portfolio includes holdings in the, LPG storage (JS Petroleum Limited), insurance sector (EFU Life and General Insurance), sugar sector (Al Abbas Sugar Mills Limited). Notably, a significant portion of EIHPL's investments is focused on the insurance sector (EFU General insurance), making up ~35% of total investments. The Company has also made investments in LPG storage terminals, with additional investments spread across sectors such as fertilizers, glass, and sugar mills.


Portfolio Assessment

The Company has a well-balanced portfolio. The Company's core investments are in unlisted subsidiaries, strategic investment in listed related party and short-term investments in listed scrips. The marketability/liquidity element of the portfolio constitutes majorly of trading investments with market value of PKR 2.8bln, providing cushion to generate liquidity


Income Assessment

The Company generates ~90% of its topline from dividend income derived from its investments. This suggests that the Company’s primary source of revenue is from dividends paid by its portfolio companies. During 9MCY24, the Company’s total investment income amounted to PKR 382 million, reflecting a significant growth of 81% compared to PKR 210 million during the same period 9MCY23. This increase suggests a strong performance in the Company's investments, possibly due to higher dividends or increased investment values. Major contributors to Dividend Income: EFU General Insurance Limited: This entity was the largest contributor to the dividend income, contributing PKR 19 million. Al-Abbas Sugar Mill: This company also contributed significantly, with a dividend income of PKR 8.7 million. This highlights the Company’s reliance on dividend income as its main source of revenue, with notable contributions from key investments like EFU General Insurance and Al-Abbas Sugar Mill, driving the overall increase in investment income for the period.


Financial Risk
Coverages

The coverage metrics for 9MCY24 highlight strong funding efficiency. The total Investment Income to Funding Cost ratio surged to an impressive 290.2x (9MCY23: 111.9x), reflecting exceptional income generation relative to funding expenses. However, the TCF to Finance Cost and debt coverage improved to 107x and 33.6x, respectively, indicating potential cash flow in covering financial obligations. Despite this, the Debt Payback ratio of 0.1x reflects healthy operating cash flows to meet debt commitments. The Loan-to-Value (LTV) ratio at a conservative 0.4% signals minimal credit risk from asset encumbrance, reflecting prudent capital management. Overall, the entity demonstrates strong funding cost efficiency and liquidity.


Capital Structure

Leveraging, as measured by Funding to the sum of Funding and Shareholders' Equity, remains low leveraged at ~0.2%, underscoring limited reliance on external financing to augment capital. Current debt accounts for ~36.1% of total funding, suggesting a moderate level of short-term obligations that require careful management to sustain liquidity and mitigate rollover risks. Overall, the capital structure reflects a balanced approach, with equity-backed investments providing growth potential while leveraging remains minimal, supporting the entity's overall credit role and financial flexibility.


Consolidated Position

The Company derives its financial strength from its association with JS Group being wholly subsidiary of JSCL. The group has maintained profitable operations in recent years.
 
 

Jan-25

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Energy Infrastructure Holding (Pvt.) Limited

financial summary

(PKR mln)

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Sep-24
9M		 Dec-23
12M		 Dec-22
12M		 Dec-21
12M
Management Audited Audited Audited
A. BALANCE SHEET
1. Investments 2,541 2,226 2,332 2,342
2. Related Party Investments 344 345 345 481
3. Non-Current Assets 1,165 980 1,337 1,370
4. Current Assets 371 335 39 32
5. Total Assets 4,421 3,886 4,053 4,226
6. Current Liabilities 100 11 3 9
7. Borrowings 11 12 215 185
8. Related Party Exposure 0 0 0 0
9. Non-Current Liabilities 0 0 23 28
10. Net Assets 4,311 3,863 3,811 4,004
11. Shareholders' Equity 4,311 3,863 3,811 4,007
B. INCOME STATEMENT
1. Total Investment Income 382 297 182 259
2. Cost of Investments (1) (2) (9) (759)
3. Net Investment Income 381 295 174 (500)
a. Other Income 0 0 7 40
b. Operating Expenses (21) (133) (196) (16)
4. Profit or (Loss) before Interest and Tax 359 162 (15) (476)
a. Taxation (33) (73) (31) (46)
6. Net Income Or (Loss) 326 89 (46) (522)
C. CASH FLOW STATEMENT
a. Total Cash Flow 141 168 141 249
b. Net Cash from Operating Activities before Working Capital Changes 141 167 130 247
c. Changes in Working Capital 5 3 (9) (4)
1. Net Cash provided by Operating Activities 145 170 121 243
2. Net Cash (Used in) or Available From Investing Activities (190) 74 (126) (476)
3. Net increase (decrease) in long term borrowings 0 0 0 0
4. Net Cash (Used in) or Available From Financing Activities 0 (200) 15 185
5. Net Cash generated or (Used) during the period (44) 44 10 (48)
D. RATIO ANALYSIS
1. Performance
a. Asset Concentration (Market Value of Largest Investment / Market Value of Equity Investments) 52.9% 45.1% 45.1% 37.4%
b. Core Investments / Market Value of Equity Investments 12.0% 71.4% 71.4% 45.1%
c. Marketable Investments / Total Investments at Market Value 89.2% 29.9% 31.3% 52.2%
2. Coverages
a. TCF / Finance Cost 107.0 71.0 16.5 41.9
b. TCF / Finance Cost + CMLTB 33.6 27.2 10.7 41.9
c. Loan to Value (Funding / Market Value of Equity Investments ) 0.0 0.0 0.0 0.0
3. Capital Structure (Total Debt/Total Debt+Equity)
a. Leveraging [Funding / (Funding + Shareholders' Equity] 0.2% 0.3% 5.4% 4.4%
b. (Funding + Off Balance Sheet Exposure) / Shareholders' Equity 0.2% 0.3% 5.7% 4.6%
E. NOTES
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Jan-25

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Energy Infrastructure Holding (Pvt.) Limited

rating scale

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Jan-25

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Energy Infrastructure Holding (Pvt.) Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
    5. PACRA ensures that the analysts or any of their family members shall not buy, sell, or engage in any transaction in any security which falls in the analyst’s area of primary analytical responsibility. This clause, however, does not apply to investments in securities through collective investment schemes. (Chapter III; 12-2-(l))
    6. PACRA has established policies and procedures governing investments and trading in securities by its employees and for monitoring the same to prevent insider trading, market manipulation, or any other market abuse. (Chapter III; 11-B-(g))
  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
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    1. All information contained herein is considered proprietary by PACRA. Hence, none of the information in this document can be copied or otherwise reproduced, stored, or disseminated in whole or in part in any form or by any means whatsoever by any person without PACRA’s prior written consent.

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