Bulk carrier plans US$200m outlay on eight vessels as need for materials grows Bulk shipping niche player Pacific Basin may spend up to US$200 million to expand its fleet this year with strong global demand for raw materials such as iron ore, coal and lumber expected to drive demand for maritime transport services. The listed small company yesterday said earnings last year soared to US$103.51 million from US$22.68 million in 2003. Turnover swelled to US$234.26 million from US$54.18 million. Pacific Basin's aggressive fleet expansion drove a comparative 82 per cent rise in vessel revenue days during a period when a scarcity of the smaller handysize ships boosted the average daily hire rate per vessel to US$17,900, against US$9,800 in 2003. 'Last year was an extremely good year during which rates were driven to historic highs,' chief executive Mark Harris said. 'We believe vessels will continue to be hard to find. But we believe we are in a better position to secure additional vessels than any of our competitors.' Mr Harris said Pacific Basin would aim to buy eight more handysize vessels this year - a move which would cost the company US$160 million to US$200 million - in addition to the five ships it had ordered from Asian shipyards. The average age of the company's 47 vessels is about five years. 'With a young fleet you don't need to reserve cash for fleet renewal, meaning comparatively more of our revenue this year can be used for fleet expansion and dividends,' chief financial officer Andrew Broomhead said. 'We expect to continue to finance 60 per cent of future vessel acquisitions through debt.' Pacific Basin directors recommended a full-year dividend of 24 cents per share. The bulk carrier has locked up 59 per cent of its vessel revenue days this year in contracts to haul cargo at a provisional average charter rate of US$17,300 a day. This leaves the rest of its fleet to capitalise on lucrative spot market rates for handysize vessels of more than US$20,000 a day. 'The ultimate gambler may have kept everything open,' Pacific Basin chairman Christopher Buttery said. 'But we've never presented ourselves as the ultimate gambler. We are looking for stability.'