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Pacific Basin finally returns to black with $6m H1 profit

Pacific Basin finally returns to black with $6m H1 profit
Minor bulks specialist Pacific Basin Shipping managed to eke out a $5.8m profit in the first half, turning around from a $90.7m loss in the previous corresponding period despite a 30% drop in revenue to $634.6m as it slashed costs and benefitted from a fuel derivative gain as well as the sale of some assets.

At an operating level however, Pacific Basin could not escape the harsh market conditions and suffered from a $15.4m loss at its dry bulk division which although offset by a small $1.4m profit at the practically stripped out towage division, led to an operating loss of $14.6m.

Gross profit however rose nearly 10 times to $10.9m from $1.8m previously as costs fell by nearly a third to $623.6m from $908.1m in the previous corresponding period.

Pacific Basin attributed the increase in losses at its core dry bulk business from a net loss US$11.4m in the first half of 2014, to the weakest ever half-year period on record for dry bulk market rates.

The company noted that average handysize and handymax daily earnings of $7,940 and $9,350 per day outperformed the BHSI and BSI spot market indices by 60% and 49% respectively, reflecting the value of Pacific Basin's fleet scale and cargo book, and its ability to optimise cargo combinations and match the right ships with the right cargoes.

"We achieved a significant turnaround in our handymax performance by focusing on key routes to generate a positive $10.4m Handymax contribution in the first half of 2015 (despite the much weaker market) from a $10.7m loss in the first half of 2014," Pacific Basin said.

Meanwhile handysize results were under pressure in the weak market resulting in a small negative Handysize contribution of $600,000.

Looking ahead, Pacific Basin concluded: "We anticipate weak market rates in the medium term and we continue to manage our business accordingly."

TAGS: Dry Bulk