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PacBasin sees $19m 2015 loss in ‘one of the worst years’ for dry bulk

PacBasin sees $19m 2015 loss in ‘one of the worst years’ for dry bulk
Minor bulks specialist Pacific Basin Shipping (PacBasin) narrowed its losses in 2015 to $18.5m from $285m the year before although revenue fell 27% to $1.26bn from $1.72bn previously.

During one of the weakest dry bulk markets on record, PacBasin reduced costs, optimized routes and managed to turn around its supramax segment while outperforming the market in both handysize and supramax segments by 54% and 39% respectively.

The positive turnaround in the supramaxes was achieved by focusing on specific trades, especially in the Atlantic Basin and growing parcelling business, especially from Chinese steel exports and significantly reduced charter-in costs due to the weak overall market and a switch to short term and index-linked charters, said Pacifc Basin ceo Mats Berglund.

In addition, reduced vessel opex per day through economies of scale, good cost control, with G&A reduced by $19m, and operating more owned ships and redelivering expiring medium and long-term chartered ships to further reduce daily vessel costs helped with cost control. Meanwhile positive results from the towage division and total divestment of the ro-ro operations also helped.

However the fact remained that handysize TCE earnings fell 16%  to $7,870 per day resulting in a $8.4m loss for the segment and supramax TCE earnings fell 12% to $9,170 per day although the segment managed to turn around to a $22.6m profit due to significantly reduced charter-in costs.

Summing up, Berglund said: "Dry bulk spot market indices in 2015 fell to record lows in February and December, framing one of the worst years overall for dry bulk shipping."

"In this weak and uncertain market, and having invested significantly during the previous downturn in 2013, we are managing our business for a continued weak market in the medium term and are prioritising safety and staying power. However, we will also carefully consider further acquisition opportunities that may emerge at depressed prices and with which we could generate positive cash contributions even in the prevailing weak market conditions," he noted.

"With experienced staff and a strong business model, we are well positioned to navigate this very weak market and to benefit from a cyclical upturn when it comes," Berglund concluded.