Our Chairman David Turnbull reflects on the Company´s health and preparedness for the future
A TOUGHER YEAR IN DRY BULK
2015 was a horrid year for dry bulk shipping and sentiment in the industry is very weak. Capacity increased and demand was impacted by slower Chinese growth. However, Pacific Basin has again delivered a respectable performance and cash generation relative to the market and our peers.
The harsh trading environment for shipowners means that the dry bulk industry is likely to have changed significantly by the end of 2016. Pacific Basin intends to find ways to take advantage of the opportunities that will arise from such difficult conditions.
In view of the extraordinarily weak dry bulk market, the Board recommends not to pay out a dividend for 2015 (2014: HK 5 cents).
EFFECTIVE PLATFORM FOR A SUSTAINABLE BUSINESS
Even in the protracted weak market, our experienced chartering, operations and technical staff are delivering a reliable, flexible and personalised service that many of our customers say is second to none. Located in 12 offices close to our customers around the world, our teams are working with the best fleet we have ever had, developing systems of complementary trades through spot and long-term cargo contracts, and combining our large fleet of substitutable ships and cargoes to achieve high utilisation and TCE earnings that significantly outperform the market indices.
Most of our towage business has been sold and our exit from the RoRo sector is complete, which means we have monetised substantially all our non-core activities and freed management to focus fully on our core Handysize and Supramax dry bulk business.
We are benefitting from a leaner but equally effective team of senior staff, significantly reduced G&A expenses and better efficiencies courtesy of our new ship management and accounting systems.
All this means that we have built the best platform for success well beyond the current market depression.
Pacific Basin is grateful for the industry awards we received at the end of 2015 which recognised our ability to maintain our high standards and customer focus while consolidating our business, growing our fleet and outperforming the market. Lloyd’s List Asia presented us with a second consecutive Dry Bulk Operator of the Year Award and we won the Ship Owner/Operator Award at Seatrade Maritime Awards Asia.
We remain committed to our effective strategy. We will not be complacent, and it is our nature to always look for ways to refine and improve what we do and how we do it. Staying true to our corporate values – such as dedication and teamwork, customer attention and solutions focus, responsiveness and reliability, safety and care, and integrity and accountability – is key to the longer-term sustainability of our business, irrespective of the market.
A commitment to strong corporate governance – sound internal controls, transparency and accountability to all stakeholders – continues to underpin all components of our business and seeks to enhance stakeholder confidence in Pacific Basin as a partner and a place to invest. I would like to thank our Board of Directors for their valuable contributions in all aspects of the Company’s oversight in the challenging shipping and economic environment. In 2015, we started the process of identifying an additional Independent Non-executive Director and I hope to be able to announce an appointment to our Board in the coming few months.