The charge is expected to reduce the depreciation on Pacific Basin's six roros by about half to $3,000 per day per vessel, resulting in an aggregate reduction in depreciation charges of approximately $6.6m per year, the company said in a filing. On a full-year basis, Pacific Basin estimates revised daily vessel costs will range between $11,100 and $15,800 per day (including operating expenses, depreciation, allocated finance costs and direct overheads), depending on whether a vessel is in lay-up or in operation.
While earnings cover is currently in place for 41% of roro capacity this year at an average rate of $18,600 per day, Pacific Basin has articulated the possibility of exiting the business. "The board recognises that the original premise for diversifying into the roro sector as a tonnage provider is no longer compelling," it said.
However poor conditions in the resale market make this a tricky proposition as well. "Accordingly, we will look to manage our roro investment and exit the sector in an economically rational manner that realises the maximum possible value for our shareholders over the medium term," Pacific Basin concluded.
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