Asia/Pacific News
Hong Kong Dry Bulk Operator Pacific Basin Reports $5.8 million Net Profit
Following what it calls "one of the weakest ever" half-year periods for the dry bulk freight market, Pacific Basin Shipping Limited this week reported a net profit of $5.8 million for the six months ended June 30, 2015.
The Hong Kong-based dry bulk carrier's earnings before interest, taxes, depreciation and amortization (EBITDA) were $41.5 million for the first half of 2015, a figure driven partly by the company's reduced towage business.
However, Pacific Basin's core dry bulk business generated a net loss of $15.4 million in the first six months of 2015, compared to a net loss of $11.4 million for the same time last year.
Mats Berglund, CEO of Pacific Basin, said dry bulk market rates for the first half of 2015 had been undermined by reduced Chinese demand and an oversupply of vessels.
He attributed his company's profit and positive EBITDA to "a significant turnaround in our Handymax performance, our intensified efforts to reduce costs, and Handysize and Handymax earnings that outperformed spot market rates by 60 percent and 49 percent respectively."
Berglund is referring to Handysize and Handymax daily earnings of $7,940 and $9,350 respectively; the company operates an average of 149 Handysize and 57 Handymax ships.
Berglund also pointed out that Pacific Basin, having downsized from four business units to "one in which capital and management are now fully focused on our core, world-leading Handy dry bulk business," is well positioned to benefit from cyclical upturns.
In anticipating continued weak market rates in the medium turn, Pacific Basin will maintain its effort to reduce costs and optimize its fleet and cargo combinations, partly by relying on its growing fleet of owned ships and augmenting it with low-cost shorter-term and index-linked chartered ships.
Of the 197 dry bulk ships the company operates, 81 are owned.
Earlier this year, Pacific Basin announced that it made an underlying loss of $55.5 million and a loss attributable to shareholders of $285 million in 2014 off revenues of $1.7 million.
