Dry Bulk Player Pacific Basin Open to Acquisitions

by Ship & Bunker News Team
Tuesday March 1, 2016

Dry bulk shipper Pacific Basin Shipping Ltd. (Pacific Basin) Monday reported it is looking for acquisitions as one of the "worst" markets for shipping unfolds.

Historic low freight rates on the back of dry bulk's "weakest year since 1985," routine dry-dockings, and the cost of complying with upcoming ballast water treatment regulations were all said to be a "burden that will be unacceptable for some" and "likely to drive some struggling shipowners to sell assets at record low prices."

As such, Pacific Basin said the company will "carefully consider further acquisition opportunities that may emerge at depressed prices and with which we could generate positive cash contributions even in the prevailing weak market conditions."

Still, "safety and staying power" was noted as the priority.

The comments came alongside the company's FY2015 results that were, compared to competitors, noted by analysts as being relatively good.

The company reported a net loss of $18.5 million in 2015 on a decline in revenue, but the company also managed to outperform the market as a whole in some sectors.

The company reported that despite depressed rates the daily earnings on handysize and supramax came in at $7,870 and $9,170, a performance that was said to have exceeded the spot market indices by 54 percent and 39 percent respectively.

The company reported a strong cash position: $375 million of undrawn loan facilities which exceeds its $274 million of remaining newbuild capital commitments.

"We reduced our owned Handysize and Supramax operating costs to US $4,210 and US $4,060 per day through scale benefits and good cost control," Pacific Basin said.

"We are operating more owned ships and redelivering expiring medium and long-term chartered ships to further reduce our daily vessel costs while enabling greater control and service quality."

In October of 2015 Pacific Basin reported that the company expected "more financial distress" from dry bulkers.