Pacific Basin Staying Clear of Ordering as It Slashes Loss

Image Courtesy: Pacific Basin

Hong Kong-based dry bulk shipping company Pacific Basin will not be exercising its options for newbuilding tonnage as long as the current market conditions remain, the company said.

The dry bulker owner has options to purchase 11 Handysize, 3 Supramax and 1 Post-Panamax vessels at predetermined times and prices during the period of their leases.

On the other hand, the company is keeping a close eye on the second-hand assets which have very attractive prices at the moment to bolster its fleet.

“We continue to look for and assess attractive ship acquisition opportunities to grow and renew our fleet with modern, high-quality second-hand ships or resales that can generate a reasonable payback and cash flow even in today’s challenging market, and can reduce our average daily vessel costs,” the company’s CEO Mats Berglund said.

In its interim report for the first half of 2017, Pacific Basin said it cut its underlying loss to USD 6.7 million from last year’s USD 61.6 million loss amid improved dry bulk market freight rates in the first half of 2017. EBITDA improved to USD 56.6 million from a negative USD 5.0 million and positive USD 22.8 million for the entire 2016.

“With progressively fewer new ships delivering from shipyards and demand gradually recovering, the dry bulk freight market is returning to a healthier balance with demand in the first half outpacing supply,” Berglund added.

Still, despite improved market fundamentals prompted by lower ordering, scrapping is slowing down and the global fleet is still growing.

Namely, during the first half of 2017, a net growth of 2.0% and 1.5% in the global Handysize and Supramax fleets were recorded.

“Despite the market declines in January and May, Handysize and Supramax average freight market indices for the first half of 2017 were around 70% higher than for the same period in 2016. As significant as this improvement is, market freight earnings are still not at profitable levels for most dry bulk shipowners,” Berglund noted.

During the half year, Pacific Basin saw all of its seven newbuildings delivered, and purchased a secondhand Supramax and two secondhand Handysize vessels.

By 30 June, the company’s fleet expanded to 101 ships on the water out of about 250 ships operated overall.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Jan 2018 >>
MTWTFSS
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31 1 2 3 4

APM – ASIA PACIFIC MARITIME 2018

27 years in the making, APM is the premier shipbuilding & marine, workboat and offshore exhibition in Asia trusted by generations of industry professionals.

read more >

Mega Cargo Show 2018

The focus of the event is to bring all connected with cargo fraternity on a single platform…

read more >

Vietship 2018

Vietship is the largest and longest established exhibition in Vietnam featuring all aspect of Shipbuilding, Shipping and Offshore Technology.

Since its first event in 2002, Vietship has become the convergence and platform of advanced technologies regional and worldwide in shipbuilding and ship repair, marine equipment, waterway transportation and services, marine and offshore engineering.

After 16 years of eight consecutive editions, Vietship has affirm itself as an important event in enhancing cooperation and development, attracting investments, exchanging technology and creating ideal opportunities for trade promotion in the international maritime industry.

More info

read more >

LNG Bunkering Summit 2018

The conference will cover the obstacles facing both the shipping and port communities, exploring developments in conversion and new builds…

read more >