Pacific Shipping Trust

Pacific Shipping Trust: Reported FY10 results which were broadly in-line with expectations. FY10 Rev was at US$61.3m, flat YoY while Net Profit at US$27.1m, also flat YoY, suggesting the stability of grp’s business. DPU for 4Q was at 0.809c, representing a full yr DPU of 3.227c and an annual yield of 8.7%, which was slightly lower than FY09 3.615c DPU (9%) yield, due to higher income retention since 3QFY09

Going forward, management has guidance for higher gross rev from Sept11 when the 10-yr time charters to Shagang for two 180,000 DWT Capesize Bulk Carriers come on-stream. This will rise further in 3Q12 as the 10-yr time charters to Cosco Xiamen for two 24,000 DWT Vessels come on-stream and the 8 and 10-yr time charters of five 57,000 Bulk Carriers to Glovis will impact positively on gross revenue from 4Q12....

The transactions in FY10 will more than triple the trusts total contracted revenue from US$250m to about US$800m up to the year 2023, and almost double its portfolio of vessels from 12 to 21 vessels. ...

We note that at current levels, grp appears fairly valued at 0.925x P/b, while Net gearing is at 102% , with the trust securing financing commitments for a total of US$150m from three banks for funding its acquisition grp’s financial position remains strong as all vessels have been financed ona long-term basis, supported by the fact that grp’s loan terms do not have any loan to-value ratios and top-up provisions.

We note that at current levels, grp appears fairly valued at 0.925x P/b, while Net gearing is at 102% , with the trust securing financing commitments for a total of US$150m from three banks for funding its acquisition grp’s financial position remains strong as all vessels have been financed ona long-term basis, supported by the fact that grp’s loan terms do not have any loan to-value ratios and top-up provisions.