Dry bulk shipping company Pacific Basin Shipping has announced a net profit of US$32 million in results for 2011, down from US$104 million in 2010.
The underlying profit for 2011 was US$57.8 million, down from US$119.8 million a year earlier. Operating cash flow was US$159 million, against US$199 million in 2010. According to Pacific Basin, results for the year were impacted by weaker Handysize spot rates, which drove a 19 percent decrease in its Handysize daily earnings and a 23 percent decrease in operating cash flow. However, improved towage markets saw a strong US$15 million contribution from PB Towage. The company also reported an US$80 million non-cash impairment of its RoRo investment, and a partially offsetting net profit of US$56 million on the sale of Green Dragon Gas in the first half of the year.
As of December 31, the company had cash and deposits of US$618 million and net borrowings of US$161 million. Vessel capital expenditure obligations currently amount to US$322 million payable in the next three years in respect of 16 ships, which the company believes leaves substantial buying power for further fleet expansion.
"Our dry bulk earnings outperformed a significantly weaker market and PB Towage had a turnaround year upholding the case for our strategic diversification into the Australasian towage sector," said CEO Klaus Nyborg. "We anticipate continued challenges ahead for dry bulk, but stand patiently ready to expand our dry bulk fleet as opportunities arise, and to invest further in towage as specific projects materialise. Our balance sheet retains substantial buying power to execute our growth strategy."
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