Pacific International Lines (“PIL”, “the Group”), today announced the Group’s unaudited financial results for financial year 2019 (FY 2019) and first half 2020 (1H 2020).
Amid prolonged challenges and weak demand posed by the COVID-19 induced recession and a further reduction in fleet size, PIL achieved revenue of US$1,026 million and EBITDA of US$102 million for the first half of 2020.
During the period under review, PIL also took important steps towards improving and stabilizing its capital base. As of 1H 2020, total equity of the Group stood at US$662 million.
Despite the pandemic-stricken economy, company operations remained resilient with significant operating cashflow improvement from network rationalisation, asset disposals and other cost savings initiatives. In 1H 2020, cash flows generated from operating activities was up 28.5% YoY to US$157.7 million.
In FY 2019, the Group recorded US$3,475 million in revenue and a loss of US$850 million. Losses were primarily due to one-off non-cash impairment charges of approximately US$600 million, arising from motor vessels which were written down to their conservative net realisable values. Most of these motor vessels are expected to be disposed as part of the Company’s asset disposal plan.
During the period under review, in anticipation of the economy continuing to stay weak through the pandemic, PIL commenced discussions with financial lenders to consensually re-profile liabilities and worked with potential investors in order to raise capital. With the entry of Heliconia, a wholly-owned subsidiary of Temasek, as well as support from a significant majority of creditors, PIL is progressing towards completion of a comprehensive debt restructuring plan that will ensure the long-term operational sustainability of the business on a strengthened balance sheet.
Through this period of restructuring, the Group maintains its commitment to achieve the best outcome for Noteholders. At a Noteholders meeting convened on 11 November 2020, Noteholders were offered two perpetual bond options, both tradeable over-the-counter and provide a path to par recovery. This is in line with the treatment of all unsecured claims under the scheme, to ensure an equitable outcome for all our creditors. These perpetual bonds also offer steady returns and higher recoveries than what would be available without a successful scheme.
Commenting on the results, Mr. S.S Teo, Executive Chairman, said:
“PIL began repositioning its business and streamlining its global operations in 2019. With a new investor becoming a significant stakeholder in PIL and a management team with added depth and financial expertise, we are confident the Group can stabilize its balance sheet, with the comprehensive financial restructuring package expected to be completed by first half of 2021.
“While we remain resilient in prevailing through the current macroeconomic headwinds, the container market has gradually shown signs of recovery in the second half of the year. On that basis, PIL remains cautiously optimistic in our outlook and will continue to focus on our operations to create long term and sustainable value to our stakeholders.”
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
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