Hong Kong’s leading minor bulk player, Pacific Basin turned in a sterling performance in 2018 and were rewarded with a US$72.3m net profit, up from US$2.2m in 2017.
Pacific Basin’s improved results were led by increased earnings of both the Handysize and Supramax fleet. Handysize earnings of US$10,060 per day and a Supramax daily rate of US$12,190 reflected increases of 21% and 27% respectively year-on-year. During the year the company also managed to keep operating costs under control at US$3,850 per day.
Following the purchase of four modern vessels for US$88.5m in a 50% equity transaction, as well as cash purchases of an additional Handysize and Supramax vessel, and a commitment on a further Supramax by end- March 2019, the owned fleet is 111 ships. Including chartered ships, Pacific Basin operated a fleet of 224 vessels in 2018.
Looking to 2019, the company said: “We expect to see increased volatility in 2019, influenced by uncertainty about the trade war and slower economic growth, but also by compliance preparations for the 2020 sulphur cap leading to tighter supply. New environmental regulations like this disrupt existing supply and discourage fleet growth.
“The gap between newbuilding and second-hand prices remains large and we still see upside in second-hand vessel values. We will continue to grow by looking opportunistically at good quality second-hand ship acquisitions as prices are still historically attractive, resulting in reasonable breakeven levels and shorter payback times. We will also consider opportunities to trade up by selling smaller, older ships and buying larger, younger second-hand ships with longer life at attractive prices.”
