Due to extraordinarily weak dry bulk market conditions seen in the first half of 2016, the Hong Kong-listed dry bulk shipping company Pacific Basin Shipping reported a net loss of USD 60.4 million, against a net loss of USD 15.4 million seen a year earlier, despite its strong TCE earnings premium.
“While we were loss-making over this challenging period, our Handysize and Supramax earnings outperformed spot market rates by 56% and 29% respectively and we generated a positive operating cash flow,” Mats Berglund, CEO of Pacific Basin, said.
The company’s said that its recent rights issue enhances its ability to navigate the protracted challenging environment, but also the ability to attract cargo and to assess and potentially purchase secondhand vessels at low prices.
Average Handysize and Supramax daily earnings of USD 6,080 and USD 5,910 per day outperformed BHSI and BSI spot market indices by 56% and 29%, respectively.
The sluggish dry bulk shipping market led to the reduction of the company’s daily Handysize vessel operating costs and shore-side G&A expenses compared to last year as Pacific Basin Shipping operated an average of 129 Handysize and 79 Supramax ships resulting in a 13% reduction and 39% increase in revenue days year on year.
Driven primarily by South American agricultural exports, dry bulk rates have improved on increasing activity since the record lows of mid-February, the company said, adding that it is “continuing to manage for a weak market in the medium term, driving further cost savings and conducting our business efficiently and safely while astutely combining ships and cargoes to maximise our margins.”
As at 30 June 2016, Pacific Basin Shipping operates 212 dry bulk ships of which 87 are owned and 125 are chartered. A further 12 owned and 5 chartered newbuildings are scheduled to join the company’s core fleet over the next two years.