Published October 23, 2009

PST's Q3 distributable income surges 60%

By VINCENT WEE

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PACIFIC Shipping Trust (PST) achieved a 60 per cent surge in distributable income to US$6.9 million for the third quarter ended Sept 30, 2009, up from US$4.3 million a year ago.

Eyeing acquisitions: With the improving global economic outlook, PSTM envisages opportunities to enter into asset acquisitions, says Mr Cheng

This came on the back of a 39 per cent jump in gross revenue to US$15.6 million.

Distribution per unit (DPU) for the three months fell to 0.818 US cents from 1.0953 US cents due mainly to the implementation of PST's revised distribution policy to encourage prudence amid the credit crunch, as well as an increase in the number of issued units. In absolute terms, the amount of US$4.8 million to be distributed is up 30 per cent year on year.

The jump in gross revenue was mainly contributed by charter hire from the vessels CSAV Laja and CSAV Lauca. In line with better revenue, net cash generated from operations grew 17 per cent to US$13.5 million.

Net profit more than doubled to US$7 million from US$3.2 million, partly as a result of the adoption of hedge accounting on Oct 1, 2008 and the repayment of loans from the proceeds of the preferential offering in Q3 FY2008.

'With the improving global economic outlook, we envisage opportunities to enter into asset acquisitions. By increasing our cash balance through income retention, PST should be well-positioned to explore value-accretive expansion opportunities, while maintaining its prudent financial management strategy. This strategic growth plan will translate into sustainable rewards for our unitholders in the long term,' said Alvin Cheng, CEO of PST trustee-manager PST Management (PSTM).

In the preceding quarter ended June 30, 2009, PSTM announced that it was revising distribution policy to strengthen its cash position in anticipation of favourable investment opportunities arising in the next 12 to 18 months, while indicating then that the distribution for this quarter would not be less than 70 per cent of PST's available distributable income. Looking ahead, management will review its distribution policy depending on prevailing market conditions.

'As a conservatively geared shipping trust with no immediate refinancing needs or pressing financial obligations, PST is building up its cash reserves to equip ourselves with the financial flexibility to seize value-accretive opportunities that we believe will emerge along with the gradual economic recovery,' said Mr Cheng.

The books' closure date is Oct 30 and payment will be made on Nov 26.