Pacific Basin Shipping's net profit crashed to US$2.95 million in the first half of this year, from US$51.9 million a year earlier, after the company made an US$80 million impairment charge on its ferry business. The charge failed to offset a US$55.8 million gain from the sale of the firm's remaining stake in Green Dragon Gas or US$8.4 million in unrealised mark-to-market non-cash net derivative income. The company, which mainly focuses on the dry bulk cargo market, also closed Fujairah Bulk Shipping, its tugs and barges joint venture in the Middle East. This followed the completion of one infrastructure project and 'severely limited prospects for profitable new projects' as a result of political unrest and poor economic conditions in the region. Fujairah Bulk Shipping posted a US$5.2 million loss in the first half of this year compared with a US$4.5 million net profit last year. Chief executive Klaus Nyborg said the loss reflected the cost of 'winding down operations' including the sale of tugs and barges after the firm made a US$19 million provision on the vessels in last year's full-year results. Excluding the impairment charge, the firm's underlying interim net profit was US$18.8 million, against US$65.6 million last year. The firm proposed an interim dividend of HK 5 cents per share. Total revenue dropped slightly to US$610.2 million compared with US$616.5 million between January and June last year which reflected weakness in the dry bulk market. 'This has been a tough half-year for the dry bulk and roll-on/roll-off [ro-ro] ferry sectors but, under the circumstances, we are reasonably satisfied with the results of most of our activities,' Nyborg said. He said the challenge this year was to secure employment for the last two ro-ro ships, one of which would be delivered in the next two weeks and the other in November, as well as find more cargo sources for its Nafta Gulf Bridge ro-ro joint venture that links Mexico and the US. Nyborg thought there would be brighter prospects for the ro-ro fleet after 2012 because vessels under construction would be delivered and globally there were no more conventional trade vessels on order, while scrapping of older ships would increase. Turning to the results from the firm's core dry bulk fleet of Handysize and Handymax vessels of 25,000-60,000 deadweight tonnes, Nyborg said the sector generated a net profit of US$36 million, down from US$79 million a year earlier. This partly reflected lower cargo volumes and a 19 per cent fall to US$13,660 per day in the average daily earnings of its Handysize fleet which totalled around 110 ships. The Handymax fleet posted an US$8 million net loss this year against a US$9 million net profit, which reflected the relatively higher costs on some long-term chartered ships whose charters had now ended, coupled with the cost of repositioning ships due to the flooding in Australia. Nyborg expected the dry bulk sector to remain lacklustre for the rest of this year with a weaker freight market this year compared with 2010. But there could be an increase in activity in the fourth quarter. This reflected the continued influx of new ships being delivered, which were likely to negatively impact freight rates, coupled with a hesitant global recovery and mildly reduced, though still healthy mainland economic growth. Figures from Clarkson, the British shipbroking house, show 1,512 Handysize and Handymax ships of between 10,000-60,000 deadweight tonnes are due to be delivered between now and about 2014.