Pacific Basin Shipping Limited

Welcome to today's Pacific Basin 2025 Interim Results Announcement Conference Call. I am pleased to present Chief Executive Officer, Mr. Martin Froegaard, and Chief Financial Officer, Mr. Jimmy Ng. For the first part of this call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session. Mr. Froegaard, please begin.

Thank you. Welcome, ladies and gentlemen, and thank you for attending Pacific Basin's 2025 Interim Results Earnings Call. As you know, my name is Martin Forgo, CEO of Pacific Basin, and I'm joined by our CFO, Jimmy Ng. Assuming that you have already gone through the presentations, we will highlight key points discussed in it before we proceed to Q&A session. Please turn to slide three. In the first half of 2025, we generated an EBITDA of US$122 million, an underlying profit of $22 million and a net profit of $26 million. This yielded a 3% annualized return on equity and a basic earning per share of 3.9 Hong Kong cents. Our core business contributed US$51 million before overheads compared to $77 million in 2024, while our operating activity contribution increased to $10 million from $8 million in the same period last year. Our net cash increased to $66 million, and our available committed liquidity stands at $550 million. A new seven-year revolving credit facility of $250 million signed in July significantly increases our available liquidity, strengthen our financial capacity and supports our growth strategy. The Board has declared an interim dividend of 1.6 HKD per share which amounts to $10.4 million, or 50% of our net profit for the period, excluding vessel disposal gains, consistent with our distribution policy. Please turn to slide four. Since 2021, we have maintained our commitment to returning to shareholders through both dividends and share buybacks. During this four-year period, we have generated profits of about $1.8 billion and distributed around $1.2 billion through dividends and share buybacks, representing about 68% of total net profit before gains from vessels' disposals. In our 2024 annual results announcement, we announced a new 2025 share buyback program of up to $40 million. Since then, we have spent $21 million to buy back and cancel about 93 million shares, equal to 1.8% of our share capital. Following our exercise redemption option for the convertible bonds, the remaining outstanding bonds have been either converted or will be redeemed before 14th of August. Combining the interim dividend and share buyback activity in the year to date, we are paying out 153% of our net profit for the first half of 2025, excluding vessel disposal gains. Please turn to slide five. First half average market spot freight rates for heavy-sized and supermax vessel decreased 21% and 34% year-on-year to 8,690, and 8,750 net per day, respectively, primarily because of weak Chinese dry bulk demand, especially for coal and grains, due to high inventory level and up stockpiling activity in 2024. However, the market has strengthened significantly since June, driven by congestion in especially South Atlantic ports, as well as recovery in iron ore volumes and Brazilian soybean exports, resulting in a 23% and a 50% increase in heavy-sized and supermax freight rates since the start of the year. Current forward freight agreements or FFA rates point to a stable freight rate outlook for the rest of 2025. Please turn to slide six. Our core business generated average daily TC earnings of 11,010 for handy size and 12,230 for supermax, down 7 and 11% respectively year on year. This TCE represents a notable outperformance over average spot market rates, which fell 21 and 34% respectively. For the third quarter of 2025, we have currently covered 87 and 89% of our committed vessel base, 9% of our committed vessel base and 13,950 per day. While for the fourth quarter, we have 26 and 43% covered, at 10,890 and 12,490 net per day. We will continue to balance our spot market exposure and cover according to anticipated market developments in order to maximize our earnings for the balance of 2025 and especially into 2026. Please turn to slide seven. We outperformed the market indices in the first half of 2025 by a significant 2,320 or 27% per day for Etisize and 3,480 or 40% per day for Supermax. Although the benefits of scrubbers installed on our core Supermax fleet decreased due to narrowing spread between high sulfur fuel oil and low sulfur fuel oil, they still added $210 per day to our outperformance during first half of 2025. Our operating activity margins increased by 29% year-on-year to $710 per day, while our operating activity days remain steady at 14,200. We aim to sustain the scale of our operating activity business and to maintain its robust margins and maximize its contribution to our overall results. Please turn to slide eight. Hadassah's daily core vessel costs were generally stable in the first half of 2025. Operating expenses rose slightly, primarily due to increased manning costs on certain older vessels and higher depreciation as a result of dry docking and fuel efficiency investments. Finance costs declined, reflecting lower borrowing levels and reduced interest rates. The cost of long-term chartered vessels remained largely unchanged, with only one long-term chartered in-vessel moved to our own fleet after we exercised its purchase option. Our present cost overall remains sector leading with our own fleet cash break even before G&A being $4,760 per day, up just $50 per day from the end of 2024. Please turn to slide nine. Our Supermax daily vessel cost declined mainly due to lower long-term chartered costs, which reduced to $14,120 per day. Operating expenses also reduced due to lower exchange rates for procuring spares and parts and lower scrubber maintenance costs. As a result, our Supermax blended daily vessel cost reduced from $9,650 to $9,200 per day and our own fleet cash break even before G&A reduced with $240 to $4,890 per day. I will now hand you over to our CFO, Jimmy Ng, who will present our financial results.

Thank you very much, Martin, and good evening, ladies and gentlemen. Please turn to slide 11 for an overview of our profit and loss statement and financial performance. Our top line decreased by 21% due to reductions in Handysize and Supramax freight rates, which were down 21% and 34% respectively in the first half of 2025. Our owned vessel costs decreased by 4% and chartered vessel costs decreased by 29% in line with a weaker freight market. As a result, our operating performance before overheads fell 28% to $62 million, and our net profit fell 56% to $26 million. That is despite of a marginal increase in G&A, primarily due to the foreign exchange gains from our Japanese yen deposits earmarked for vessel purchases, and additional 5 million net gains from the disposal of five older vessels. Please turn to slide 12. Our financial position was further strengthened in the first half of 2025 with $550 million of available committed liquidity at period end. It was mainly driven by an increase in cash and deposits supported by solid cash generation and vessel disposals in line with our fleet renewal strategy. Our operating cash flow for the period increased by 1% year-on-year to $104 million, and we realized $42 million from the sale of three Hennesseys and two SupraMax vessels with an average age of 21 years. Our capex was efficiently managed at $41 million, which included $20 million related to the full payment of one handy-sized vessel delivered into our fleet in the first half, and also the deposit payment for another handy-sized vessel delivered into our fleet in July. The total capex of $41 million also included $22 million for dry docking and other additions. During the first half of 2025, we distributed $33 million in dividends and spent $21 million to repurchase and canceled 93 million shares under the 2025 share buyback program. In the meantime, our borrowings have decreased by $31 million over the past six months. Please turn to slide 13. As of 30 June 2025, our balance sheet demonstrated continued strength with net cash rising to $66 million compared to $20 million at the end of 2024. The total net book value of our old vessels was $1.6 billion, while their estimated market value remained relatively resilient at $1.8 billion despite the weaker freight market in the first half of 2025. To extend our funding profile and maximize optionality in our fleet growth and renewal strategy, we announced a $250 million syndicated, sustainability-linked, seven-year revolving credit facility secured against 20 vessels. This facility will further increase our available liquidity and support our pursuit of strategic growth and increased shareholder value. I will now hand you back to Martin for his slides on marketing strategy.