PST – BT

Pacific Shipping cuts Q2 DPU

PACIFIC Shipping Trust (PST) has pared its distribution per unit (DPU) by 20 per cent from a year ago to 0.793 US cents for the second quarter ended March 31 as it retained more cash to acquire new vessels.

Income available for distribution dipped 2 per cent to US$6.52 million in the second quarter. But 30 per cent of the distributable income was retained in the second quarter, compared to a previous 10 per cent, trust manager PST Management (PSTM) said yesterday.

The DPU of 0.793 US cents represents a tax-free annualised yield of 10.9 per cent.

‘This policy of preserving cash has enabled PST to acquire two new 180,000 deadweight tonne (DWT) capesize bulk carriers as announced on June 28, 2010,’ PSTM said.

These bulk carriers cost US$61.6 million each and are scheduled to be delivered in September next year, with a 10-year charter with Jiangsu Shagang Group Co.

The 10-year charter will add about US$194 million to PST’s contracted revenue, which will hit close to US$500 million over the next 10 years.

‘These new acquisitions mark a major milestone for PST to diversify into a new asset class and enlarge our base of charterers,’ said PSTM acting CEO Teo Choo Wee.

PST’s current fleet portfolio comprises 12 container vessels.

During the second quarter, gross revenue from the 12 vessels chartered on a long-term basis dipped 2 per cent from a year ago to US$15.15 million, with profit after tax remaining stable at US$6.64 million compared with US$6.66 million a year ago.

PST said that its balance sheet remains strong as all vessels have been financed on a long-term basis and that its loans do not have loan-to-value ratios on the vessels and top-up provisions.

The trust manager said it remains ‘cautiously optimistic for the outlook of the container market’ though it expects that chartered rates for container vessels will continue to recover amid improving freight rates and asset prices.

It also expects shipping demand for capesize bulk carriers to be sustained by China’s demand for iron ore and coal.

Mr Teo said PST will continue to explore ‘further opportunities for meaningful acquisitions’.