PST – BT

Pacific Shipping Trust delaying acquisitions

PACIFIC Shipping Trust (PST) will delay acquisitions until the shipping market stabilises, but expects to capitalise on opportunities as vessel prices drop.

‘We see some downside risks in first-half 2009. Until the market stabilises we are not looking at capital commitment or acquisitions,’ Alvin Cheng, CEO of PST Management, told BT, saying acquisitions could be 12-18 months away.

Still, Mr Cheng is confident that ‘opportunities’ will arise, resulting in an ‘attractive return on investment’ as asset prices fall.

PST is paying distribution per unit (DPU) of 0.93 US cents for Q4 2008 ended Dec 31. This is 15 per cent lower than in Q4 2007, largely due to 10 per cent retention of the distributable amount and the timing difference between the receipt of funds from a preferential offer in September last year and the earning of income from new vessels. Part of the US$92.3 million raised through the offer was used to finance vessel acquisition.

Total distributable income for Q4 2008 increased 68 per cent to US$6.27 million, while net profit came in at US$6.35 million, up from US$1.65 million previously.

Gross revenue surged 67 per cent to US$14.5 million, due to the contribution from four vessels delivered during the year. A full quarter’s contribution came from the new vessel CSAV Laja, while 50 days’ time-charter income was attributable to CSAV Lauca. Both have been chartered to Compania Sud Americana de Vapores on fixed rates for five-year periods.

For FY 2008, PST’s net profit was up 75 per cent to US$18.3 million, while distributable income increased 28 per cent to US$18.5 million. Gross revenue grew 29 per cent to US$44.6 million.

PST is upbeat that it will ride out the downturn and expects revenue for 2009 to increase 38 per cent year on year on the back of its four new vessels.

Its fleet of 12 vessels is fully financed with no outstanding capital commitments and no refinancing requirements in the medium-term. Its shortest lease expires in 2013.

DPU for Q4 2008 will be paid on Feb 27.