Pacific Basin earnings surge 328pc on higher average dry bulk rates

Pacific Basin Shipping delivered yesterday a stronger than expected 328 per cent jump in net profit for last year on higher average dry bulk rates.

The world's largest operator of smaller - so-called handy-size - bulk cargo vessels said it would continue to diversify into the terminal business on the mainland, believing the nation's demand for raw materials and export growth would stay robust.

'There are a number of Chinese projects in our sights,' said chief executive Richard Hext.

Another senior manager said the firm hoped to announce a river or sea port investment in China this year but gave no details.

Last year, Pacific Basin invested in a river port in Nanjing, the highest-altitude port along the Yangtze River. The company also diversified into tugboats and roll-on, roll-off vessels for car transportation due to less competition in that area and huge market potential.

Sitting on US$649.5 million in cash at the end of last year - 10 times its cash position in 2006 - the company said it would fund its US$680 million capital expenditure plan for the next four years on its own. This includes orders for bulk vessels, roll-on, roll-off vessels and tugboats, as well as terminal projects.

The company will stick with its payout ratio of about 50 per cent this year despite its cash surplus.