Pacific Basin Shipping Limited

Welcome to today's Pacific Basin 2025 Annual Results Announcement Conference Call. I am pleased to present Chief Executive Officer, Mr. Martin Fruehgard, 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. Fruehgard, please begin.

Thank you and welcome, ladies and gentlemen, and thank you for attending Pacific Basin's 2025 Annual Results Earnings Call. Assuming you have already gone through the presentation, we will highlight key points discussed in it before we proceed to Q&A. Please turn to slide two. 2025 was a year with various evolving geopolitical and market challenges. 2026 has begun with an escalation of these challenges, not least the outbreak of war in the Middle East over the weekend. However, it was gratifying to see that our integrated platform again demonstrated agility and resilience, leading to a solid financial performance in 2025. During the year, we generated an EBITDA of US$263.1 billion, underlying profit of $39.2 million, and net profit of $58.2 million. Our balance sheet remains strong. We closed the year with a net cash of $134 million and an undrawn committed facility of $485.5 million, illustrating our strong liquidity. All in all, we delivered solid shareholder value in 2025, with a total distribution of $19.5 million through share buybacks and dividends declared for the year. The total shareholder return for 2025 was 46%. Please turn to slide 3. We remain committed to returning value to our shareholders through both dividends and share buybacks. The Board has declared a final dividend of HK$0.06 per share which together with the interim dividend of 1.6 Hong Kong cents per share, distributed in August 2025, amounts to approximately 51 million US dollar, 100% of our net profit for the year, excluding vessels' disposal gains. In addition to the dividend we completed in 2025, our announced share buyback of 40 million dollars. All in all, Our committed distribution reached 179% of 2025 net profit, excluding vessels' disposal gains. This demonstrates our ongoing commitment to return meaningful value to our shareholders. I will now hand over to Jimmy for a quick overview of 2025's performance and financial review. Thank you, Martin.

Good evening, ladies and gentlemen. I will share with you some observations on the market and a snapshot of our financial performance for the year. Please turn to slide five. The industry faced significant macro headwinds in 2025. Geopolitical risk has remained elevated at the start of 2026 and heightens with the situation in the Middle East developing over the past few days. Market freight rates fell significantly in the first half of 2025 as supply outpaced demand, and then gradually picked up in a later part of the year. During the year, market sport rates for Handy Size and Supermax Vexels averaged about $10,570 and $11,610 per day. representing a decrease of 5% and 10% year-on-year respectively. However, the FFA saw an uplift since the beginning of 2026, averaged at 13,730 per day for heavy size and 15,580 per day for supermax. FFA for the remainder of 2026 points to a stable outlook. There is no suggestion yet that the most recent increases in FFAs are due to the war in the Middle East. The conflict could heighten markets by creating new inefficiencies. But equally, it could lead to cargo cancellations and discounted vessels. Please turn to slide 6. In 2025, our average daily TCE earnings of 11,490 for HandySize and 12,850 for SupraMax represented 11% and 6% decrease as compared to the rates in 2024, respectively. Despite the decrease year-on-year, Our TCEs continued to outperform the average spot market rates by $910 per day for HandySize and $1,220 per day for SupraMax. For the first quarter of 2026, we have covered 88% and 100% of our committed vessel days for our HandySize and SupraMax core feet at $11,890 and $14,450 per day, respectively. These rates are higher than the current market spot rates, as well as the FFA. Our operating activity margin also improved and contributed $22.9 million in 2025. Operating activity days increased 1% year-on-year to 27,850 days and generated a margin of $820 per day, which represented a 30% increase year-on-year. Please turn to slide 7. In terms of vessel costs, we continue our leading position in cost efficiency. Our core daily operating costs for both HandySize and SupraMax vessels remained well controlled. Average daily op-packs for both segments were broadly stable at around $4,780. Depreciation costs rose slightly by 2% for HandySize and 6% for SupraMax, respectively, mainly reflecting dry docking and few efficiency upgrades. Average daily finance costs decreased by 13% to around $130, mainly due to lower average borrowings. Long-term chartered festival daily rates also improved. Costs for HandySize remained substantially unchanged, while SupraMax were 12% lower, mainly attributable to the re-delivery of vessels that had been chartered at higher rates. Overall, our costs remained stable, with our old leads break even at approximately $4,820 per day for HandySize and $5,020 per day for SupraMax. Please turn to slide 8. Overall, the 2025 freight market was softer than last year, but our performance has been resilient. Our top line decreased due to the softer market, and our old vessel costs were lowered by 3%, mainly due to the disposal of 8 older vessels. A 24% improvement in chartered vessel costs was due to the weaker freight markets. And as a result of the changes in revenue and cost items, our operating performance before overheads decreased by 28% year-on-year to $142 million. One of items also had an unfavorable change in 2025, mainly due to expenses related to the structural changes we implemented during the year for compliance with USDR. Profit attributable to shareholders was $58.2 million for 2025. Please turn to slide 9. We continued to be disciplined with our capital allocation and remained debt-free on a net basis with a net cash position of $134 million U.S. dollars. We have available committed liquidity of $756 million at the end of 2025. The total net book value of our 107 vessels was $1.6 billion, while the estimated market value was higher at $1.96 billion, reflecting a healthy buffer above book values based on composite broker valuations. The financial flexibility is further enhanced by the new $250 million sustainability-linked facility secured in July 2025. The facility helped strengthen both our liquidity position and also our ability to respond quickly to market developments. Please turn to slide 10. Our strong balance sheet, high liquidity and fleet optionality positioned us well to continue executing our strategy and capturing opportunities in a dynamic market environment. And we're confident that this will continue in the current disruptive environment. Our operating cash flow for the year was $229 million, inclusive of all long and short-term charter hire payments. We also realized $66.8 million from the sale of five older Helisize and three Supermax vessels. During the year, we closed a new $250 million revolving credit facility, as mentioned on the previous page. Our CapEx amounted to $116 million, which included $59 million for three handy-sized vessels delivered into our fleet in 2025 and one Ultramax vessel purchase options exercised in late 2025 which subsequently delivered in January 2026 along with 57 million for dry dockings and other additions. We paid a total of 44 million in dividends which included the 2024 final dividend of 5.1 Hong Kong cents per share totaling $33.4 million, and also the 2025 interim dividend of 1.6 Hong Kong cents per share, totaling $10.7 million. We also spent $40 million to repurchase our own shares under our buyback program announced last year, and our net cash outflow from borrowings was $97 million in 2025. The strong cash generation ability allowed us to have an improved liquidity for any future opportunities. Please turn to slide 11. We will continue to focus on maintaining a robust balance sheet and optimizing our cost structure. The board has conducted a review of the company's longstanding dividend policy of paying out at least 50% of net profit, excluding disposal gains. And having conceded the needs of the business and the best practice capital allocation, the board has decided to expand the policy to enhance shareholder returns. So with effect from 2026, the company's amended dividend policy is to pay dividends of 50% of annual net profit, excluding disposal gains, and increasing up to 100% of annual net profit, also excluding disposal gains when the company is in a net cash position at year end. The board may also decide to make additional distributions in the form of special dividends and or share buybacks. We will continue with our share buyback program and to purchase up to US$40 million worth of shares in 2026 subject to market conditions. I will now hand you back to Martin to run you through the market dynamics and update on our strategy.