Pacific Basin Shipping (2343) H1 2024 earnings summary

Executive summary

• Underlying profit for H1 2024 was US$43.9m, net profit US$57.6m, and EBITDA US$157.9m, with a 6% annualized ROE and EPS of HK8.7 cents.

• Interim dividend of HK4.1 cents per share declared, about 50% of net profit (excluding vessel disposal gains), totaling US$27.6m.

• Maintained strong liquidity of US$537.4m and low net borrowings at 2% of net book value.

• Share buyback program of up to US$40m underway, with US$14.6m spent repurchasing and cancelling 42.7m shares.

• Outperformed Baltic Handysize and Supramax indices by US$840 and US$410 per day, respectively, despite higher short-term charter costs.

Financial highlights

• Revenue rose 12% year-over-year to US$1,281.5m; TCE earnings up 12% to US$717.2m.

• EBITDA fell 16% year-over-year to US$157.9m; net profit dropped 32% to US$57.6m; underlying profit down 42% to US$43.9m.

• Net borrowings reduced to US$32.2m; net gearing at 2%; 61 vessels unmortgaged as of June 2024.

• Operating cash inflow was US$103m, down from US$150m in H1 2023; capex for H1 2024 was US$47.8m.

• Dividend payout policy of at least 50% of annual net profit, excluding vessel disposal gains.

Outlook and guidance

• 60% of Handysize and 82% of Supramax vessel days covered for H2 2024 at US$12,670 and US$12,640 per day.

• Expecting to benefit from an improving market in Q4 2024 and into 2025, with positive long-term sector outlook.

• Anticipates increased global dry bulk loadings and continued fleet inefficiencies from canal disruptions.

• Asset prices for new and second-hand vessels expected to remain high due to input costs and limited yard capacity.

• Expect further cost reductions as high-cost long-term chartered vessels are redelivered.