Pacific Basin Announcement: Expected Impairment of Assets

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pacific basin

We announced today that in light of the uncertain market outlook in the dry bulk shipping industry, the Company expects that a one-off non-cash impairment charge of US$198 million on the Group’s Handysize core fleet primarily on its smaller and older Handysize vessels will be reflected in its unaudited consolidated results for the six months ended 30 June 2020.

Including this impairment, the Group is expected to record a net loss attributable to shareholders for the Period in the range of US$212 million to US$227 million as compared to the US$8 million net profit recorded for the six months ended 30 June 2019. However, the Group is expected to record positive EBITDA for the Period in the range of US$75 million to US$90 million as compared to US$101 million for the six months ended 30 June 2019.

The expected impairment will not impact the operations or operating cashflows of the Group, which will continue to benefit from a robust balance sheet. As at 30 June 2020, the Group’s estimated cash balances are approximately US$316 million. The Group continues to have access to diverse sources of external funding and has recently secured US$63.6 million in new long-term credit facilities secured against five of its previously unmortgaged vessels, of which US$33.5 million was undrawn as at 30 June 2020. These new facilities provide fresh capital at very competitive interest costs, and further enhance the Group’s liquidity and funding flexibility.

This announcement is only prepared based on the Company’s preliminary review of the Group’s internal records and management accounts, and has not been reviewed or audited by the Company’s external auditors. Therefore, the actual results of the Group for the six months ended 30 June 2020 may differ from the information contained in this announcement. The unaudited consolidated results of the Group for the six months ended 30 June 2020 are scheduled to be announced on or around 30 July 2020.

Sue Terpilowski
Author: Sue Terpilowski