PACIFIC BASIN(02343)2025-05-19 09:00Financial Data and Key Metrics Changes - In Q1 2025, market spot rates for Hetty Seizen and Supramax vessels averaged 7,900 net per day, respectively, representing a decrease of 24% to 36% compared to the same period in 2024 [3][4] - The average Handysize and Supramax daily time charter equivalent earnings were 12,210 per day, respectively, reflecting a year-on-year decrease of 11% [6][7] - The operating activity generated a daily average margin of 6,950 in Q1, representing an increase of 634% year on year [8][9] Business Line Data and Key Metrics Changes - Global minor bulk loadings increased by approximately 2% year on year, driven by higher loading of bauxite, cement, and clinker [4] - Global grain loadings decreased by 16% year on year, influenced by reduced Chinese demand and harvest delays in Brazil [4][5] - Global coal loadings dropped by 5% year on year, primarily due to an 11% decline in seaborne coal volumes to China [5][6] Market Data and Key Metrics Changes - Iron ore loadings declined by 7% year on year, mainly due to reduced Australian iron ore loadings caused by cyclones [6] - The Baltic Exchange Forward Freight Agreement average rates for the remainder of 2025 are projected at 9,860 for Supramax vessels [3] - Global net fleet growth is projected to outpace demand growth, with dry bulk and minor bulk fleets estimated to grow by 3% to 4.5% in 2025 [12][17] Company Strategy and Development Direction - The company aims to grow and renew its fleet, maintaining a disciplined approach amidst market uncertainties [19][20] - The strategy includes purchasing larger and younger vessels while selling older ones, contributing to a 4% increase in total deadweight capacity [19][20] - The company is evaluating the impact of IMO's midterm measures on its operations and investments in dual fuel methanol newbuildings [21][63] Management's Comments on Operating Environment and Future Outlook - The near-term bulk market demand outlook is clouded by uncertainties from trade and geopolitical tensions, but potential shifts in trade flows could support tonne mile demand [10][15] - The company expects some support from ASEAN countries for coal demand, while iron ore demand may remain under pressure due to reduced Chinese domestic demand [11][15] - Management acknowledges the volatility in the market and emphasizes the importance of positioning for potential opportunities amidst uncertainties [34][58] Other Important Information - The company has covered 77% of committed vessel stays for Q2 2025 at rates higher than current market spot rates [7] - The company has a solid balance sheet that allows for growth opportunities despite market uncertainties [78] - The company is focused on optimizing short-term cargo commitments to navigate expected market volatility [22] Q&A Session Summary Question: Can you comment on the market rate expectations for the rest of the year? - Management indicated that the market has developed normally, with stable freight rates and ongoing activity despite uncertainties [30][34] Question: How is the company preparing for various scenarios regarding USTR? - Management noted that 70% of the fleet is Japanese built, which may present opportunities amidst regulatory changes, but emphasized the need for clarity on regulations [38][40] Question: What is the outlook for secondhand prices and potential buybacks? - Management acknowledged a slight improvement in secondhand prices recently and confirmed ongoing share buyback programs due to undervaluation [50][51] Question: What kind of trade shifts have been observed recently? - Management reported that there has been a general step back in trade involving the US due to tariff uncertainties, but demand remains for various commodities [72][75] Question: Can you elaborate on M&A opportunities? - Management expressed interest in M&A opportunities but emphasized a preference for organic growth while remaining open to potential acquisitions [78][79]