'Focus not diversification' has become the mantra for Mats Berglund, who took over as chief executive at dry-bulk, towage and ferries company Pacific Basin Shipping on June 1.
As a result, investors will see more investment to expand the firm's fleet of bulk-cargo ships and tugs - and an exit from the ports business and the loss-making roll-on/roll-off ferry division.
Those inside the company, especially in the 18 offices around the world away from Hong Kong, can also expect more financial responsibility at a local level, described as 'empowerment' by Berglund. 'They have got the local contacts, but they need to understand the daily time charter equivalent rates and running costs' as a way to maximise charter earnings and revenue.
This comes as the company last week reported a first-half net loss of US$195.93 million. This included a US$190 million impairment on the six loss-making ferries, which followed an US$80 million impairment on the same ships in the first half of last year. The total write-down of US$270 million represents almost half the US$549 million Pacific Basin agreed to pay for the ships when it entered the roll-on/roll-off market in early 2008.
Berglund avoided criticising the then management's decision to invest in that market more than five years ago. He pointed out the dry-bulk cargo market was peaking and the shipping industry expected it to fall, although nobody could predict the almost overnight collapse following the Lehman Brothers banking crisis when liquidity evaporated and trade seized up.
As a result, it was understandable that management should look at diversifying away from the core dry-bulk operation, he said.
