Bulk shipper earnings sink on falling rates

Net profit tumbled 94 percent at Pacific Basin Shipping (2343) in the first half from a year ago on falling spot shipping rates and mounting investment losses.

Earnings at the dry-bulk shipper were US$3 million (HK$23.4 million), down sharply from US$51.9 million previously.
Underlying profit was US$19 million versus US$66 million last year. Revenue slipped 1.02 percent to US$610.2 million.
Average handysize spot rates fell 41 percent, leading to a 19 percent drop in daily earnings to US$13,660 from US$16,840.
The plunge was also a result of a US$80 million non-cash impairment of its investment in roll-on/roll-off ships.
These losses were partly offset by a US$56 million net profit generated by the sale of non-core assets.
"We expect the dry bulk [market] to remain lacklustre for the rest of the year, with near-term weakness giving way to a seasonal uptick in activity in the fourth quarter, resulting in an unsatisfactory and overall weaker freight market this year than in 2010," the company said.
The company added eight vessels to its fleet during the period, taking its total to 212.
Earnings per share sank to 15 US cents from US$2.69. It proposed a dividend of five HK cents per share.
Pacific Basin shares plummeted 3.07 percent to HK$4.11 yesterday.
Source: The Standard