Pacific Basin Shipping Limited, one of the world’s leading dry bulk shipping companies, announced unaudited condensed consolidated results of the Company and its subsidiaries (collectively the “Group”) for the six months ended 30 June 2020.
Mr. Mats Berglund, CEO of Pacific Basin, said: “In a challenging half-year period dominated by the global Covid-19 pandemic and related economic disruption and weaker dry bulk freight rates, we delivered a positive EBITDA of US$79.2 million.
Our core business of deploying owned and long-term chartered ships generated Handysize and Supramax TCE earnings that outperformed the BHSI (tonnage adjusted) and BSI spot market indices by US$2,270 and US$4,250 respectively. Our operating activity generated a margin of US$1,790 net per day. Our underlying results were negatively impacted by global efforts to contain the pandemic while the dry bulk fleet continued to grow.
Overall, we made a net loss of US$222.4 million, mostly attributable to a US$198.2 million one-off non-cash impairment of our Handysize core fleet (primarily our smallest and oldest Handysize vessels), which does not impact our operating cash flows, EBITDA or available liquidity, and will result in lower depreciation costs, higher EPS and higher return on equity going forward, all things being equal.
We secured a new revolving credit facility and finalised additional committed borrowings which have enhanced our committed liquidity position to US$349.5 million. Chinese economic activity has significantly recovered, grain volumes are stronger compared to last year, and indicative iron ore loadings are at all-time highs. Many countries have begun to ease pandemic-related national lockdowns since May and are now applying more targeted measures to contain the spread and enable more economic activity. We expect coal and construction materials such as steel, cement and logs which suffered during earlier lockdowns to slowly recover. Freight market earnings have improved since May, and we anticipate a seasonally stronger albeit volatile second half and generally improved market conditions, assisted by stimulus measures and potential supply-side improvements including fewer newbuilding deliveries.”
“Our healthy balance sheet and strong liquidity position, combined with our substantially larger owned fleet, our ability to outperform the market indices and our competitive cost structure, position us well for what we believe will be improved freight market conditions in the second half.
Crew changes remain our and our industries’ biggest challenge, as disembarkation bans, travel restrictions, flight unavailability and quarantine requirements in many countries have made it very difficult for ship owners and managers to change crews and get seafarers home. We are supporting our seafarers vigorously and continue to work hard with authorities and industry organisations to push for solutions.”