Pacific Basin Shipping (2343) Q3 2024 TU earnings summary

Executive summary

• Handysize and Supramax freight rates in Q3 2024 remained above historical averages, supported by strong demand for grains, minor bulks, and iron ore, and fleet inefficiencies from Suez and Panama Canal disruptions.

• Market spot rates for Handysize and Supramax vessels rose 53% and 45% year-over-year, with Q3 averages at $11,700 and $13,820 per day.

• Core business TCE earnings for Handysize and Supramax were $13,740 (+35%) and $12,220 (+6%) per day year-on-year.

• Outperformed Handysize spot market by $2,040 per day, underperformed Supramax by $1,600 per day in Q3 2024.

• Share buyback program repurchased 105.8 million shares for $31.7 million since May 2024; $14.5 million in Q3 2024.

Financial highlights

• 1H24 EBITDA: $157.9M; underlying profit: $43.9M; net profit: $57.6M.

• Revenue for 1H24: $1,281.5M, up from $1,148.1M in 1H23.

• Interim dividend of HK4.1 cents/share, totaling $27.6M (50% payout ratio, excluding vessel disposal gains).

• Net borrowings reduced to $32.2M; net gearing at 2%.

• Operating cash inflow of $103.3M in 1H24.

Outlook and guidance

• Q4 2024 coverage: 74% for Handysize at $12,570/day, 84% for Supramax at $12,190/day.

• Q1 2025 coverage: 19% for Handysize at $10,170/day, 29% for Supramax at $12,590/day.

• Significant open days for 2025 expected to benefit from spot rates; Suez Canal restrictions and Chinese stimulus to support demand.

• Modestly positive outlook for 2025, with potential for continued lack of seasonality due to ongoing geopolitical disruptions.

• Environmental regulations to drive increased scrapping and lower fleet growth.