Pacific Basin Shipping is making a special dividend to shareholders following the most profitable year in its history. The Hong Kong-listed bulker owner recorded net profit of $844.8m for last year, compared with $208.2m for 2020. Revenue totaled $2.97bn during 2021, which is more than double the $1.47bn booked the previous year. The company will pay a special dividend of HK 60 cents ($0.07) per share, bringing its total payout up to HK 74 cents for the full year 2021, including the HK 14 cents interim dividend that was distributed in August. The company said it is making the special dividend “in light of the extraordinary cash flow of the last year and our robust balance sheet and positive outlook. We yielded an exceptionally strong return on equity of 58% and significantly strengthened our available committed liquidity to $668m with net gearing reduced to 7% at the yearend while we continued to expand our owned fleet,” the company said in its annual report.

Pacific Basin’s handysize earned net daily time-charter equivalent (TCE) rates of $20,460 on average last year, while its supramaxes earned $29,350. “2021 saw by far the strongest dry bulk freight market since 2008, driven by robust global demand for commodities and low fleet growth, aided by fleet inefficiencies. This was and remains the strong market that our people have worked hard over several years to set ourselves up for,” Pacific Basin said in its report. “Despite facing significant Covid-related crewing challenges, we deployed our enlarged core fleet, and drew on our experienced teams to capitalize on the strong market while continuing to deliver class-leading service to our customers.”

Pacific Basin’s fleet grew during 2021 through the addition of 11 modern bulkers acquired in the secondhand market and the sale of five of its smallest and oldest handysizes. The company owns 121 handysize and supramax bulkers in its fleet of 250 vessels. It said it wants to grow its supramax fleet further and replace its handysizes with fleet with younger, larger and more efficient vessels “to more easily meet tightening environmental regulation”.

Chief executive Martin Fruergaard, who joined Pacific Basin as executive director in July, said the company is optimistic that vessel supply will remain “under control” going forward, which will help support freight markets in the longer term. “With dry bulk ships now largely operating at full speed, supply cannot be further increased through higher speed, and IMO and EU fuel-efficiency rules are likely to start forcing slower speeds from 2024 — and even accelerate scrapping of the least efficient ships — which will reduce supply,” he wrote in the firm’s annual report. “Despite some new ordering in the very strong market, we expect that the dry bulk orderbook will remain at historically low levels due to decarbonization-related regulatory uncertainty, the high cost of newbuildings and the shortage of shipyard capacity at a time when berths are fully booked with orders for non-dry bulk ship types.”