Pacific Basin announces stable financial results in unusually flat freight market
(Posted on 03/03/25)
Pacific Basin Shipping Limited, one of the world’s leading dry bulk shipping companies, has announced the results of the Company and its subsidiaries for the year ended 31 December 2024.
Pacific Basin is one of the world’s leading owners and operators of modern Handysize and Supramax dry bulk vessels. . The Company operates approximately 277 dry bulk ships of which 112 are owned and the rest chartered.
Martin Fruergaard, CEO of Pacific Basin, said: “In 2024, we generated an underlying profit of US$114.1 million, a net profit of US$131.7 million and EBITDA of US$333.4 million, yielding a return on equity of 7% and basic EPS of HK19.9 cents. The seasonal ups and downs that typically characterise the dry bulk market were largely flattened out by geopolitical and climate-related events, making it challenging to capture the full value of the market. Our large core business generated a contribution of US$178.4 million before overheads. Our average Handysize and Supramax daily TCE earnings outperformed average Handysize (BHSI 38k dwt tonnage-adjusted) and Supramax (BSI 58k dwt) indices by US$1,720 per day and US$710 per day respectively, illustrating the challenges we had in 2024 to optimally position our Supramax fleet and maintain a high Supramax outperformance. Our operating activity contributed US$17.4 million before overheads, generating a margin of US$630 per day over 27,610 operating days, with Supramax particularly undermined by the impact of geopolitical events on the freight market. Our operating activity continued to grow with operating days increasing 18% year on year. Our overheads and vessel operating expenses remain well controlled and sector leading – and are back to pre-Covid levels. Reducing our debt and utilising interest rate swaps to limit our exposure to variable interest rate debt has helped us to mitigate increases in finance costs in a higher interest rate environment. We are alert and prepared for geopolitical uncertainties and dry bulk market challenges in 2025, we remain positive overall about our sector’s fundamentals in the longer term, we continue to generate a healthy cash flow and remain financially strong, and we can be proud of the good progress we have been making in delivering on our strategy and priorities.”
Fruergaard continued: “In view of our sound cash generation, the Board recommends a final dividend of HK5.1 cents per share which, combined with the HK4.1 cents per share interim dividend distributed in August 2024, represents 50% of our net profit for the full year excluding vessel disposal gains, which is in line with our dividend policy. In April 2024, we announced a share buyback programme which we completed in December 2024 following our repurchase and cancellation of 138 million shares over seven months for an aggregate consideration of about US$40 million. Through dividends and the share buyback programme, we have committed to distribute an aggregate amount of about US$101 million in value to our shareholders for 2024, equivalent to about 83% of our 2024 net profit, excluding vessel disposal gains. In view of the continued share discount to the market value of our assets, the Board has approved a new share buyback programme of up to US$40 million in 2025.
In November 2024, we contracted for four dual-fuel Ultramax newbuilding low-emission vessels (LEVs) that are expected to deliver in 2028 and 2029 and will be able to operate on green methanol as well as sustainable biodiesel and conventional fuel oil, offering the fuel flexibility to comply, optimise and compete in what will be an increasingly challenging regulatory environment and market. They are also of the most fuel-efficient design, which will be a critical benefit given the higher fuel costs ahead. With this newbuilding order, we are also enhancing growth optionality for Pacific Basin, enabling fleet renewal and growth through additional LEV newbuilding orders and/or long-term charters of newbuildings with purchase options, and/or acquiring high-quality modern second-hand vessels, while selling older and less efficient vessels
Pacific Basin is listed and headquartered in Hong Kong and provides quality services to over 600 customers, with over 4,600 seafarers and about 400 shore-based staff in 14 offices in key locations around the world.
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