Hong Kong, 23 February 2023 – Pacific Basin Shipping Limited, one of the world’s leading dry bulk shipping companies, announced the results of the Company and its subsidiaries for the year ended 31 December 2022.
Mr. Martin Fruergaard, CEO of Pacific Basin, said:
“2022 was an exceptional year in which Pacific Basin again produced record results, allowing us to further improve our balance sheet, optimise our fleet and return capital to our shareholders. We generated an underlying profit of US$715 million, a net profit of US$702 million and EBITDA of US$935 million – exceptional in a historical context. This yielded a strong return on equity of 38% with basic EPS of HK109.1 cents."
The dry bulk freight market in 2022 saw a continuation of strong freight rates in the first half driven by strong demand in minor bulks, port-related congestion and limited new supply.
However, second-half freight rates came under pressure due to increasing inflation and interest rates resulting in slower global growth. Weakening construction activity, and a continuation of zero-Covid policies drove a further slowdown in the Chinese economy.
Global dry bulk loading volumes grew approximately 2% year on year supported by increased demand for minor bulks and coal. Minor bulk volumes expanded by a stronger 6% driven by increased loadings of bauxite, forest products and salt. In contrast, dry bulk net fleet growth moderated slightly from 3.6% in 2021 to 2.8% in 2022 because of the slower pace of newbuilding deliveries. The global fleet of Handysize and Supramax ships in which we specialise grew by only 3.0% net, pointing to improving long-term supply fundamentals.
The core business generated US$747 million in 2022, with average Handysize and Supramax daily time-charter equivalent earnings of US$23,430 and US$28,120 net per day respectively. This represents a 15% increase for Handysize and a 4% decrease for Supramax compared to 2021. Pacific Basin's performance is driven by vessels’ high laden-to-ballast ratio whereby the company utilise their experienced commercial and technical teams, extensive global office network and large fleet of high quality interchangeable ships. The operating activity contributed US$56 million, generating a margin of US$2,840 net per day over 19,830 operating days. While margins contracted in the latter part of the year, earnings for the year were historically high.
Due to the record underlying earnings and confidence in the longer-term fundamentals of the dry bulk market, the Board is pleased to recommend a final basic dividend of HK17 cents per share and an additional final special dividend of HK9 cents per share for 2022. The proposed final basic dividend and the proposed final special dividend together amount to a total dividend of HK26 cents per share which, combined with the HK52 cents per share interim dividend distributed in August 2022, represents 75% of the net profit for the full year. This implies a 2022 dividend yield of 27% based on the share price at the beginning of the year.
Pacific Basin own 115 quality Handysize and Supramax ships that are well suited for customers and trades as they continue to optimise their fleet to more easily meet tightening environmental regulations.
Source: Pacific Basin
The opinions expressed herein are the author's and not necessarily those of The Xinde Marine News.
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