Big Loss for Pacific Basin in Q2 Following "Unexpectedly Weak" Market

by Ship & Bunker News Team
Thursday July 31, 2014

In the face of an "unexpectedly weak" dry bulk market, Pacific Basin Shipping Ltd. (Pacific Basin) reports a loss of $90.7 million in the first half of the year.

The loss came despite a 19 percent increase in revenues from continuing operations, to $910 million, compared with the same period last year.

Pacific Basin attributed the loss to a $63.9 million write-off and provision for its PB Towage business, losses from Handymax positioning voyages, and unusually high dry-docking levels, as well as the drop in the overall market.

However, the company said it outperformed the Handysize market by 23 percent thanks to an effective business model.

The company downgraded its outlook for PB Towage due to increased competition and reduced opportunities in the towage market.

"Last year's dry bulk freight market gains have been eradicated underscoring the fragility of the market recovery," said CEO Mats Berglund.

"However, the future fundamentals look favourable, especially for smaller bulk carriers of the type in which we specialise"

Berglund said the company has acquired 51 ships over the past two years, more than doubling its owned fleet by taking advantage of low vessel prices.

Berglund predicted in March that the dry bulk segment would see a gradual recovery in 2014 and 2015.

Ship & Bunker News Team
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