Half Year 2024 Pacific Basin Shipping Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Shawn Jun Jie - - Analyst : Thanks. Hi, Martin. Hi, Michael. I have three questions here. The first question, I think earlier, you mentioned dry bulk loadings. You expect them to increase in the second half of 2024. Would you mind to share which specific commodity types that we actually expect a sequential pickup in demand in the second half? The second question I have is with respect to the environmental regulations. I think there's two parts to this question. One is on scrapping. I saw your announcement today,. You indicated that scrapping is going to progressively pick up from 2030 to 2037. Do you mind if you could share a little bit about any color to why we think scrapping will see no material pickup during this time frame and not maybe from 2025 to 2030, given that environmental regulations are more stringent? And then the second part of the question is on dual-fuel ships. Earlier, you mentioned that methanol is probably the option we're going into. But recently, within container shipping, we're seeing a lot of liners, including Maersk, pivoting back to LNG as a dual-fuel. Do we have plans to do a similar strategy? Thank you.

Question: Shawn Jun Jie - - Analyst : Maybe -- yes. Thanks, Martin. Maybe I can just follow up one quick question on scrapping and the timeline for 2030. Given we are seeing a lot more stringent regulation, EU ETS, fuel, EU maritime regulations soon as well. Do you mind if you could share is there any potential enforcement penalties in the event of noncompliant if we don't get to -- if we don't comply with other speculation?

Question: Andrew Lee - Jefferies - Analyst : So I have a few questions, right? My first question is, if I look at the slides you have on supply-demand for the Handys, right, it seems as if this year and next year, supply growth could outpace demand growth. Is this what the view is? And if that's the case, does that mean that rates will come down? Second question is on the outlook. You mentioned that you are positive on the long-term outlook. Does that mean in the short term, near to medium term that you're not as optimistic? Or is it just a view that the market will be strong until long term, right, so in the next few years? Another question I have is on the share buyback. -- you have booked to, I think it's $40 million. I think you mentioned that it was that you exercised for '14. Given the recent weakness in the share price, will you accelerate the share buyback quickly? And if you want to raise it above the $40 million, right, what's the procedure involved? Maybe I'll just start with those questions first.

Question: Andrew Lee - Jefferies - Analyst : Maybe a follow-up question. I'm not sure whether you can answer this question, but I'll ask it anyway. What would you say your -- and your current NAV would be, right? Is it around the current share price? Yeah. So I'm just trying to work out in terms of how you see the market, how you see your current NAV, right, compared to the share price?

Question: Andrew Lee - Jefferies - Analyst : I have a few more questions, but maybe I'll go back in the queue. So let people ask questions first. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 10:00AM, 2343.HK - Half Year 2024 Pacific Basin Shipping Ltd Earnings Call

Question: Nathan Gee - BofA Global Research - Analyst : Two questions from me. Firstly, I want to drill a little bit more into the short-term charter costs. So it seems relatively elevated. I think you've called out what seasonality patterns as well as the Pacific Atlantic Basin issues. Can you better explain-- can you give us a little bit more detail around that? And then also, are they going to continue into the second half, just these elevated short-term charter costs? So that, firstly. Secondly, in terms of the Supramax negative rate premium, just to help me better understand that. So was there an element of over contracting as well? Or is it just related to the charter cost issue?

Question: Yang Liu - - Analyst : Just a follow-up for the chartering cost question is that you just mentioned about the changes or the expectation coming from this angle. So any changes for your covering strategy in the future? And the second question is about the order book for the dry bulk. It seems that it's still quite low compared with the order ship type. So what takes you guys post the ordering for the dry bulk replacement or even for upgrading for our fit?

Question: Yang Liu - - Analyst : Just one follow-up is that at what point of time you're expecting such the new ship build ordering will come into place? It means that there will be more and more dry bulk orderings at what time you are expecting like five years later or three years later, any time during that you can imagine about it.

Question: Unknown Analyst - - Analyst : So I have one question to add here. Would you give us some color about the TCE recovery next year, first half of next year, especially for Handy, we have covered like 7% of -- so why is it so? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 10:00AM, 2343.HK - Half Year 2024 Pacific Basin Shipping Ltd Earnings Call

Question: Andrew Lee - Jefferies - Analyst : I have just two more questions. If I look at the FFAs in your slide, it's actually at a slight discount to your covered rates in the second half. Could you give a little bit of color in terms of how you see the FFAs? Is that really a reflection of the market? Second question I have is, you over table that has your long-term chartered capacity, right, in terms of revenue days? Does that include all the long-term charters that will be delivered next year? The reason I say that is that I'm trying to model in terms of total revenue days next year versus this year. So I just wanted to sense that is that accurate reflection of the total long-term charter. And maybe you can give a little bit of guidance in terms of -- based on the existing fleet and also the long-term deliveries, new builds, et cetera. How much capacity in terms of Supramax and the Handy's into the revenue days would be higher on a year-on-year basis or lower on a year-on-year basis for next year?

Question: Andrew Lee - Jefferies - Analyst : Maybe are you expecting that next year's like total revenue days will be higher than this year? Or is the target to be flat, higher, lower? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 10:00AM, 2343.HK - Half Year 2024 Pacific Basin Shipping Ltd Earnings Call

Question: Andrew Lee - Jefferies - Analyst : All right. No more questions from me.

Question: Nathan Gee - BofA Global Research - Analyst : Just a follow-up just in terms of shareholder returns. So I just want to understand, is there still room for a special dividend in the second half? And the reason I'm asking the $40 million buyback looks a pretty substantial chunk of potential full-year profit. So just help us understand, is that still scope for special?