PST – BT

PST’s DPU rises 2% to 0.809 US cent in Q1

Annualised yield at 8.7%; distributable income at US$4.8m

PACIFIC Shipping Trust’s (PST) first-quarter distribution per unit (DPU) inched up 2 per cent to 0.809 US cent from 0.793 US cent a year ago.

The DPU for the three months ended March 31, 2011, represents an annualised yield of 8.7 per cent, up from 8.6 per cent the year before.

Distributable income for the shipping trust rose 2 per cent year on year to US$4.8 million from US$4.7 million.

Gross revenue from PST’s fleet of 12 box-ships was flat at US$15.2 million. Net profit for the trust’s first quarter was US$6.9 million, up by 4 per cent from US$6.7 million the previous year.

PST’s trustee-manager, PST Management, said the slightly higher net profit was due to lower interest costs and no off-hire days for vessel repairs over the quarter.

While the numbers look dowdy, PST Management’s newly appointed CEO Lim Sim Keat said that in September 2011, income and profitability will get a fillip when two newbuild 180,000 deadweight ton capesize bulk carriers are delivered.

They will then start a 10-year time charter to Jiangsu Shagang Group, at a rate of US$27,000 per vessel per day.

In the past year, PST has made strides into diversifying its fleet from just purely container ships.

Since June 2010, PST has embarked on a diversification drive and bought two multi-purpose vessels and seven bulk carriers.

Bringing tidings of stronger ship financing, PST also announced it secured two loans – both high in loan-to-value ratios of above 80 per cent – to fund their purchases.

Its most recent was in March, for a US$132 million loan from Standard Chartered, OCBC Bank and ING to pay 86 per cent of the contracted price for five Supramax bulk carriers.

When asked if the company will pursue a debt-financed rather than equity-financed route, PST Management’s CFO Shaldine Wong said: ‘We are currently at a 1:1 debt-equity ratio with the ships currently in the construction phase and are all funded by debt. Moving forward, when the time is right, we will consider an equity raise which will average out this proportion.’

PST’s acquisition streak in the past year has also been entirely newbuilds, due to attractive asset prices relative to charter rates.

However, Mr Lim says that PST will not rule out acquiring second-hand vessels. He said: ‘If second-hand prices drop and if we are able to secure attractive charters, we will consider them. It will depend on the counterparty, and rates.’

PST’s shares closed half a US cent up at 37 US cents yesterday.