Pacific Shipping Trust's profit steady at US$7.2mln

Distribution per unit in third quarter is 0.832 US cents up 1.7% from the same period last year.

The Board of PST Management Pte. Ltd. (“PSTM”), as Trustee-Manager of Pacific Shipping Trust (“PST”), Singapore’s first publicly-listed business trust, is pleased to announce a DPU of 0.832 US cents for the third quarter ended September 30, 2010 (“Q3 FY2010”). This represents an attractive tax-free annualised yield of 10.1%. The Q3 FY2010 DPU is 1.7% higher than the distribution of 0.818 US cents per unit in Q3 FY2009.

Gross revenue in Q3 FY2010 from PST’s existing 12 vessels chartered on a long-term basis remained stable at US$15.6 million, delivering a profit after tax of US$7.2 million. This was consistent when compared to the corresponding period last year and in Q2 FY2010. For 9M FY2010, gross revenue was US$45.9 million and profit after tax totalled US$20.5 million, according to a PST report.

Following the purchase of two Capesize bulk Carriers in late June, PST’s purchase of two Multi-Purpose Vessels (“MPP”) this month, marks its further diversification of asset class and charterer base in the last four months.. The acquisition of the MPPs will be backed by a 10-year time charter contract with Cosco Xiamen.

Mr Teo Choo Wee, Acting CEO of PSTM said, “We are pleased to have delivered on our promise to unitholders to widen our charterer and asset base. The fact that we could conclude these two deals recently is a testament to our strong credibility in the shipping fraternity.”

Going forward, PST’s gross revenue will increase, in 2011 when the 10-year time charters for the two 180,000 DWT Capesize Bulk Carriers to Jiangsu Shagang Group Co., Ltd. (“Shagang”) come on stream. This will increase further in Q3 2012 as the time charter to Cosco Xiamen begins to take effect.

Mr Teo added, “We have been proactively managing charter revenue to ensure that PST more than replaces the revenue from vessels that will be coming off-charter. This will ensure that we deliver sustainable and continuous growth to our unitholders.”

PST’s financial position remains strong as all vessels have been financed on a long-term basis. This is supported by the fact that PST’s loan terms do not have any loan-to-value ratios and top-up provisions.

Mr Teo attributes PST’s stable performance to its prudent financing structure: “With our strong financial situation and cash retention policy, we have achieved our plans for income accretive growth. This is being fulfilled with the acquisition of two Capesize Bulk Carriers and now, with the two MPPs. These acquisitions are important milestones for PST, as we carry out our strategy of diversifying our asset class and enlarging our charterer base.”

With this latest acquisition, PST’s fleet portfolio will increase from 14 to 16 vessels, comprising 12 container vessels, 2 capesize bulk carriers and 2 multi-purpose vessels. PST has also added Cosco Xiamen, a wholly-owned subsidiary of the Cosco Group, to its current list of reputable charterers, namely, Pacific International Lines (Private) Limited (“PIL”), Compania Sud Americana de Vapores S.A. (“CSAV”) and Shagang, reputed to be China’s largest privately owned steel mill. With these two recent deals, the total contracted revenue of PST for the next 12 years will be increased by US$302 million to US$570 million.

Conclusion
PST remains committed to its business model of steady income and cashflow stream generated by quality vessels on long-term charters to reputable customers. PST continues to be on the lookout for opportunities to make meaningful acquisitions so as to deliver value accretive growth to unitholders.

The Books Closure Date is October 28, 2010 and payment to Unitholders of 0.832 US cents per Unit distribution will be made on or about November 29, 2010.