Towage hurts Pac Basin

A write-down on its towage business has helped push Pacific Basin Shipping to a loss of $90.7m for the first half of the year.

Hong Kong-listed Pac Basin shouldered a charge of $63.9m on the division it had previously been looking to sell.

Further losses on low-paying handymax positioning voyages also took their toll, while its handysize fleet out performed the market by 23% during the period.

Pac Basin, which had recorded a profit of $300,000 at the same stage in 2013, says the dry cargo market will improve in the fourth quarter of 2014 from a low base.

“We believe the market recovery remains fragile because growing dry bulk demand has still not fully absorbed the excessive supply of mainly larger ships generated by the newbuilding delivery boom of 2010 to 2012,” it said.

“However, the worst of the influx of new capacity is behind us, having peaked in 2012, and the future fundamentals look favourable, especially for smaller bulk carriers of the type in which we specialise.”

Pac Basin also notes a marked increase in the number of dry-dockings undertaken in a weak market that will prove an advantage when rates improve.