Improvements in the dry bulk market have led to Pacific Basin Shipping posting profit for 2018 that is 20 times greater than its previous annual result.
The Hong Kong-listed bulker owner recorded net profit of $72.3m last year, compared to $3.6m in 2017.
Pacific Basin said the result was aided by better market conditions, the company’s continued outperformance of time charter equivalent (TCE) rates and its competitive cost structure.
Last year marked the first time in four years that Pacific Basin has paid dividends to its investors.
Pacific Basin’s board has recommended a final dividend per share of HKD 3.7 cents, giving full-year dividends of HKD 6.2 cents including the interim payment in August.
Minor bulk vessel demand increased by 5.3% during 2018, despite a weaker US-China trade, said Pacific Basin, which owns and operates a fleet of handysize and supramax bulk carriers.
During 2018, Pacific Basin said its handysize and supramax TCE earnings outperformed the market indices by 22% and 12% respectively.
In all, this led to TCE revenues totalling $881.1m in 2018, some 12% above 2017 vessel earnings.
The company currently owns 112 ships and typically operates over 200 ships, including chartered vessels.
One older vessel was sold during 2018 and seven modern vessels were purchased, including four that were 50% funded by issuing shares.
“We see upside in second-hand vessel values and continue to look opportunistically at attractive second-hand ship acquisitions,” the company said.
Looking to the future, Pacific Basin said the dry bulk business would continue its growth in 2019, but not without challenges.
“The US-China trade conflict has undermined dry bulk sentiment and compounded the seasonal market weakness in early 2019,” the company said.
“However, the seasonal recovery is now underway and global dry bulk trade is expected to continue to grow in 2019, though at a slower pace.
“We expect to see increased volatility in 2019 influenced by uncertainty about the trade conflict, but also by environmental regulations contributing to tighter supply.”
