by winston » Mon Aug 04, 2008 10:51 pm
Not vested.
Pacific Basin First-Half Profit More Than Doubles
By Wendy Leung
Aug. 4 (Bloomberg) -- Pacific Basin Shipping Ltd., Hong Kong's largest operator of dry-bulk vessels, said first-half profit more than doubled as China's demand for coal and iron ore boosted freight rates.
Net income rose to $337.6 million, or 21 cents a share, from $162.9 million, or 10 cents, a year earlier, the company said in a Hong Kong stock exchange statement today. Sales doubled to $909.9 million.
Pacific Basin follows Sinotrans Shipping Ltd. and Nippon Yusen K.K. in boosting profit after demand for commodities in China and India allowed it to charge 83 percent more for chartering out its largest bulk vessels. Traffic may also jump next month after a slowdown caused by curbs on manufacturing around Beijing ahead of this month's Olympics.
``Freights rates will rise as the steel and cement plants re-open,'' said Stella Kei, an analyst at UOB Kay Hian Ltd. in Hong Kong. ``Profit will grow more quickly in the second half.''
The company proposed an interim dividend of 76 Hong Kong cents a share, compared with 45 cents a year earlier.
Higher Rates
Pacific Basin's average daily rate for chartering out handysize vessels, less than 40,000 deadweight tons, jumped 64 percent in the first half. Revenue days climbed 20 percent, as it added more ships. Rates for handymax ships, between 40,000 deadweight tons and 50,000 deadweight tons, surged to $46,100 from $25,180. Revenue days rose 28 percent.
The company has booked in 83 percent of handysize days this year at an average rate about third higher than in 2007, it said.
``Business looks very promising in 2008,'' Chief Executive Officer Richard Hext told reporters in Hong Kong today. Still ``it's hard to predict freight rates'' after the next 12 months because orders for new ships may be scrapped. A third of global deliveries due in the first half of this year appear to have been canceled, he said, citing Clarkson Plc.
The outlook for the dry-bulk shipping market next year has ``turned increasingly positive'' because of unexpected delays in deliveries, Geoffrey Cheng, a Hong Kong-based Daiwa Institute of Research Ltd. analyst, said in a July 29 report.
Pacific Basin fell 1.8 percent to HK$10.80 in Hong Kong trading today, before the earnings release. The stock has dropped 14 percent this year, compared with the benchmark Hang Seng Index's 19 percent plunge.
China, the biggest customer for bulk-shipping lines, has shut steel mills and other plants near Beijing to cut pollution. That caused the Baltic Dry Index, a measure of commodity shipping costs, to fall for 16 straight days up to Aug. 1.
Pacific Basin operates a fleet of 80 dry-bulk ships, including 63 handysize vessels. It has 13 newbuild bulk ships on order. The company has also lined up orders for six roll-on, roll-off vessels, as it expands into carrying cars and trucks.
The so-called RoRo ships will make a ``meaningful profit contribution'' as early as the second half of 2010, Andrew Broomhead said in the news conference today.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"