Pan Ocean 100 (Formerly STX Pan Ocean)

[port]

China''s Feb iron ore import

Feb Year to date
tonnes pct chg* $/tonne tonnes pct chg*
48,805,403 -0.97 158.37 117,728,299 22.75
From:
Australia 17,753,866 -13.55 159.08 46,577,891 14.98
Brazil 11,768,908 31.33 173.82 26,571,392 38.52
India 6,971,949 -29.28 132.84 15,846,810 -19.8
South Africa 3,151,456 7.78 174.31 6,050,785 51.23
Iran 1,807,435 84.95 149.02 3,385,759 109.24
Peru 1,049,087 66.14 147.1 1,804,017 87.9

* Percentage change from a year earlier.
Imports are valued on a CIFbasis

[port]

market has discounted the 25 yr long term contracts it secured in 09 n 010 with vale n fibria to ship iron ore n wood pulp resp. from brazil to china.

top 3 bulkers building countries:- japan, korea, china

[Musicwhiz]

The Straits Times
Aug 12, 2011
STX PAN OCEAN
Red ink for first half despite Q2 turnaround

By Daniel Ho

SIGNIFICANT reductions in foreign exchange losses allowed STX Pan Ocean to return to profitability in its second quarter, reversing a loss in the same period a year earlier.

STX is a South Korean shipping company involved in the marine transportation business. It provides bulk cargo carrier, car carriage, container and tanker services.

Net foreign exchange losses fell 84.7 per cent, or US$17.1 million (S$20.7 million), which boosted second-quarter profits of US$20.4 million, reversing a net loss of US$4.03 million in the same period last year.

STX's return to profitability came despite a decrease of 8.7 per cent in second-quarter revenue to US$1.4 billion from the same period last year.

The group's second-quarter return to the black was also not sufficient to avert a first-half net loss of US$28.1 million, reversing a net profit of US$16.1 million in the first half of last year.

The net loss is largely attributable to a 99.5 per cent decrease in gross profits to US$394,000.

As STX operates a business with a low profit margin, the slight 2.9 per cent slide in first- half revenue and a marginal increase in cost of sales of 0.2 per cent resulted in the large fall in gross profits.

The poorer first-half revenue performance was due to a 20 per cent, or US$173 million, decline in sales from STX's short notice shipping service, which is one of the group's main business segments.

This offset revenue increases in the group's other main business segments, including a 1 per cent increase in large bulk service and a 10 per cent increase in breakbulk liner service.

For the six months ended June 30, STX reported a loss per share of 14 US cents, against earnings per share of eight US cents in the first half of last year.

Net asset value per share stood at US$10.22 as of June 30, down from US$10.44 as of Dec 31.

STX remained cautious on its future outlook, citing the weak dry bulk market and the over-supply of vessels as main factors that would negatively impact business.

The company said in a statement that the dry bulk market was further weakened by a lower than expected demand for imported coal from China as well as the slow recoveries of Australia and Japan from natural disasters.

On the other hand, the firm expects an increasing demand for raw materials from China and the need for countries in the Northern Hemisphere to re-stock coal for the winter to boost demand for marine transportation.

STX's share price closed yesterday at $7.53, down 15 cents.

[karlmarx]

stxpo announced yesterday that they are selling bonds and warrants. this must be the 2nd time in 12 months that they are borrowing. why did the stock -- particularly those traded in krx -- rally to this news?

[karlmarx]

poor container and tanker shipping markets are causing stxpo to remain in the red. higher finance cost also contributed to the losses. they could've turned a profit for FY11 based on their dry-bulk and car carrier operations, if they didn't have exposure to the container and tanker market.

this year looks to be another tough year for shipping. stxpo has performed pretty okay over the past 3 difficult years. when the issue of overcapacity eventually sorts itself out, stxpo should emerge as a winner.

------------------------------------------------------------------------------------------
Published February 29, 2012

STX Pan Ocean surprised the market by pulling off a US$47 million profit in the October-December 2011 period, helped by the strength of the dry-bulk market in the final quarter of the year. Its fourth-quarter profit was nearly seven times that of the US$7 million profit in the year-ago period.

However, the South Korean shipping company ultimately could not escape the fate of other shipping companies worldwide and reversed into losses attributable to shareholders of US$19.39 million for the full year from a profit of US$69.86 million the previous year.

Full-year revenue at STX Pan Ocean also slid 7.4 per cent due to the weaker shipping market, to US$5.18 billion from US$5.59 billion last year.

Fourth-quarter turnover was down 12 per cent to US$1.32 billion from US$1.49 billion.

Losses per share stood at US$0.09 for FY 2011.

STX Pan Ocean pulled off operating profits at its bulk carrier and car carrier & LNG carrier divisions of US$48 million and US$26.8 million, respectively.

However, they were not enough to surmount the operating losses in its container shipping and tanker divisions, which posted US$46 million and $48 million of losses.

Another item that chipped away at STX Pan Ocean's bottom line was the higher finance costs, which rose 48 per cent to US$88.6 million from US$59.9 million in fiscal 2010.

While STX Pan Ocean enjoyed a strong fourth quarter, it does not foresee Q1 2012 - a traditionally slower quarter for iron ore and coal trades - to pan out in the same way.

'Capesize is unlikely to stay firm in the first quarter due to high iron ore port inventory, property tightening measures, growth slowdown in China,' warned the company.

STX Pan Ocean said ship scrapping - it is projected 24 million deadweight tonnes of bulkers would be scrapped in 2012 - may alleviate some of the low-rate pains emanating from a glut of bulk carriers on the oceans.

'Despite all downside risks and positive factors, we would like to point out that the shipping is, and always will be, cyclical market,' it said. 'A shipping company (that is) well-experienced and prudent with their cash can find opportunities despite the tough times.'

STX Pan Ocean announced a final dividend of 7.1 US cents per ordinary share before tax.

It closed down 10 cents at $8.50 yesterday.

[felixleong]

http://www.channelnewsasia.com/news/busi...01368.html

The shipping unit of South Korea's troubled STX shipbuilding group filed for court receivership on Friday owing to mounting debts and losses caused by a global economic slump.

PHOTOS

This file photo shows workers riding past a ship at the Saint-Nazaire shipyard in western France. The shipping unit of South Korea's troubled STX shipbuilding group filed for court receivership on Friday owing to mounting debts and losses caused by a global economic slump. (AFP/Alain Jocard)

Enlarge
Caption

SEOUL: The shipping unit of South Korea's troubled STX shipbuilding group filed for court receivership on Friday owing to mounting debts and losses caused by a global economic slump.

The move came after the state-run Korea Development Bank (KDB) said it would not use its its private equity fund to buy STX Pan Ocean, one of the country's three largest bulk carriers.

STX Corp., the group's holding company, has a 27.4 percent stake in STX Pan Ocean, while KDB controls 14.99 percent. The shipper's total debt is estimated at around 4.4 trillion won ($3.9 billion).

The STX group, which has 11 subsidiaries, has been reeling under mounting debt after being hit by a global downturn in the shipbuilding and shipping sectors.

More than one trillion won in corporate debt matures this year, including 500 billion won in May alone.

Creditors have already provided 600 billion won to the group's shipbuilding unit, STX Offshore and Shipbuilding, to help it repay maturing bonds and operate normally.

The group wants a massive liquidity injection for other subsidiaries to avert bankruptcy in exchange for a voluntary restructuring.

Last month, creditors pumped 900 billion won into STX Corp and STX Offshore and Shipbuilding but they have yet to agree on loans for STX Heavy Industries and STX Engine.

"We will go ahead with the injection of liquidity into other units whose financial pinch may get worse due to the court receivership," KDB executive director Ryu Heui-Kyoung told reporters.

The STX group pledged late last year to raise 2.5 trillion won by selling domestic and overseas assets, and has since raised 1.13 trillion won but details of the sale of its European assets have not been disclosed.

These include shipbuilders STX Finland and STX France, which is two-thirds owned by STX Europe, a subsidiary of STX Shipbuilding. The other third of STX France is owned by the French state.

STX France operates two shipyards, one in Saint-Nazaire and the one in Lorient, while the Finnish operations include three shipyards in Turku, Rauma and Helsinki.

In December, the Saint-Nazaire yard, which has struggled to secure major new orders in recent years, won a lifeline with a billion-euro deal to build a luxury liner for Miami-based Royal Caribbean International.

The yard employs 2,100 people and provides work for another 4,000 sub-contractors.

[greengiraffe]

Trouble at STX Mirrors Slump Across Shipping

By Kyong-Ae Choi and Kanga Kong
661 words
10 Jun 2013
The Wall Street Journal Asia
AWSJ
English
© 2013 Dow Jones & Company, Inc. To see the edition in which this article appeared, click here Factiva.Gateway.Messages.Archive.V1_0.ELink
SEOUL -- The bankruptcy filing by what once was a major profit driver of one of South Korea's conglomerates is a reminder of the prolonged slump in the marine-transport business.

STX Pan Ocean Co., the bulk-transportation unit of STX Group, the country's 13th-biggest company by assets, filed for court receivership on Friday after failing to find a buyer.

STX Group had put up for sale its almost 36% interest in STX Pan Ocean, but no buyers came forward. The company, which is listed in Seoul and Singapore, was valued at $231 million in early April but that fell to $170 million by the end of last week.

"A combination of a sharp decline in freight rates, a delayed industry recovery, oversupply of ships due to an increased production at Chinese shipyards and higher fuel costs drove up debt and squeezed margins," STX Pan Ocean said.

The decline in the shipping and shipbuilding industries since the 2008 financial crisis has hit STX Group particularly hard. About 90% of the group's sales come from those businesses. Its other main business, construction, also has been hit by the global economic downturn.

"Even if a company ran one of the three businesses -- shipping, shipbuilding and construction -- it would be hard to survive today. STX has all of them," said an executive who left STX late last year.

STX Group, with more than 10 trillion won, or $9 billion, in total debt, has sold 1.13 trillion won in assets as part of a 2.5 trillion won asset sale plan announced in May of last year. STX has said it would continue to cut its workforce, wages and benefits. It has already cut the number of executives and annual salaries by around a fifth.

Under a creditor-led bailout plan, the group is aiming to re-emerge with a focus on shipbuilding. Creditors are drawing up a restructuring plan for its core business unit, STX Offshore & Shipbuilding Co., and could overhaul other affiliates.

State-owned Korea Development Bank, the group's main creditor, said STX Pan Ocean's filing for court protection won't have a negative impact on the restructuring of other STX affiliates. Court receivership is similar to a U.S. Chapter 11 bankruptcy, in which the court takes a leading role in restructuring the company.

The decline of STX Group also marks a precipitous fall for company Chairman Kang Duk-soo, a self-made South Korean tycoon who pursued years of expansion after betting all his wealth on a 2001 takeover of SsangYong Heavy Industries, the precursor of STX Group. Through 2007, STX Group spent more than two trillion won to buy four companies, including cruise-ship maker Aker Yards ASA from Norway.

Then the financial crisis caused international trade to collapse, first slamming the shipping industry and then shipbuilding. But Mr. Kang continued to push for expansion, including expressing interests in Daewoo Engineering & Construction Co. in 2010 and Hynix Semiconductor Inc. in 2011 before dropping out of both bids.

"As chief executive, I'm fully responsible for the group's current dire situation," the 63-year old Mr. Kang said by email to employees last month. "I will do whatever it takes and sacrifice all my personal interest to minimize the impact on jobs," he wrote.

Mr. Kang declined to be interviewed.

STX Group is likely to get support from its creditors since its failure would deal a heavy blow to the Korean economy and creditors' balance sheets. The company has 21 affiliates and 60,000 employees.

STX Pan Ocean, which became one of STX Group's most profitable units after emerging from receivership in 2002, swung to a net loss of 91 billion won in 2009. Its loss deepened to 467 billion won last year.

http://www.djreprints.com/link/DJRFactiv...0609000041


Dow Jones & Company, Inc.

Document AWSJ000020130609e96a00014

[Ben]

I am just wondering if the collapse of STX PO is going to benefit other shipping companies. Some of it ships may be removed from operations and thus improve the over supply issue.

[Greenrookie]

Can't remembered where I read it, but there is commentary that STX demise will lower value of second hand vessels as STX vessels get put on sale. The ship recycling market is not giving any better value too, with the low price of steel. So I guess most ships will still be in the supply.

Oh yea, here it is:
http://www.hellenicshippingnews.com/News...6bc32d01a7

and the latest that KDB refuse to assume ownership, hmm... wonder what ripples it will cause in the shipping industry

http://www.hellenicshippingnews.com/News...06d242c3d0
http://www.koreaittimes.com/story/29308/...ceivership
http://www.koreaittimes.com/story/29284/...ocean-news

A competitor's misfortune is good news to shipping companies and shipbuilders in China? That the shipping industry will consolidate is a foregone conclusion, but if I am not wrong, this is the first giant victim

[Ben]

Can't remember which famous person said this: Banks will lend you an umbrella when it is sunny, but will take it back when it is raining. Without KDB helps, there is no more hope for STX PO. The parent company STX Group can't even fend for itself now. The shipping industry is still in a very bad supply/demand mismatch situation, but I think this is cold comfort to its competitors. Afterall, one competitor less is less competition.