Shipping trusts at a glance

	Rickmers Maritime	Pacific Shipping Trust	First Ship Lease Trust
IPO	2007	2006	2007
Sponsor	Rickmers	Group Pacific Intl Lines	Schoeller Holdings/ HSH Nordbank AG/Bayerische Hypo-und Vereinsbank
Sponsor role	Acquisition pipeline, ship management	Acquisition pipeline, ship management, customer	Customer, ship management if needed
Sub-segment focus (as of today)	Containerships	Containerships	None. Owns containerships, dry bulk carriers and tankers
Charter type	Time charters	Bareboat & time charters	Bareboat charters
Charter duration	7 - 10 yrs	5 - 10 yrs	7 - 12 yrs
Leases include vessel purchase option	No	No	Yes (end of lease/early buy-out)
Leases include early termination option	Yes (one)	No	Yes (most)
Customers	Maersk, CMA CGM, Hanjin Shipping, Evergreen, Mitsui O.S.K Lines	Pacific Intl Lines, CSAV	Evergreen, Geden, Groda Shipping, James Fisher, PT Berlian Laju, Schoeller Holdings, Siba Ships
Distributions	USD/quarterly	USD/quarterly	USD/quarterly
Pay out policy	Fixed DPU amount	90% of cash earnings after debt repayment (~about 50% of cash income)	New quarterly guidance for payout: 75-80% of cash income for 1Q09 (100% previously)
Cash earnings retained	Yes	Yes	Yes (from 1Q09 onwards)
Growth plans	US$1.1b of acquisitions contracted over 2009-2010	No explicit target set for 2009 (prev: US$200m p.a.)	No explicit target set for 2009 (prev: US$300m p.a.)
Debt repayment	No (not immediately)	Yes (immediately amortizing)	No (bullet repayment) except for latest loan. Intends to repay debt with retained cash from 1Q09.

Source: OCBC, 10 Feb 2009

Pacific Shipping Trust: 4Q results par for the course

Pacific Shipping Trust (PST) posted US$14.5m in 4Q08 revenue, up 67% YoY and 30% QoQ. For the full year, it recorded a 29% increase in revenue to US$44.6m. The strong gains were due to contributions from the four vessel acquisitions made over the course of 2008. The trust recorded a net profit of US$6.3m for the quarter. Because of a change in the accounting treatment, PST will no longer reflect fair value gains and losses on its interest rate swaps on its P&L statements. Stripping out the same from 4Q07 accounts, the trust saw roughly a 53% YoY gain in net profit. The results met our expectations.

PST will pay unitholders 0.93 US cent per unit in distributions for the quarter, which translates to a 25% annualized trailing yield. Despite gains in cash income, this DPU figure is about 15% lower on a YoY and QoQ basis because of: 1) the lower payout policy adopted in 2008; 2) an enlarged shareholder base after the 3Q08 preferential offering; and 3) a partial revenue contribution from the CSAV Lauca, the fourth acquisition completed only in mid-November. We estimate a slight increase in 1Q09 DPU, which marks the first full contribution from CSAV Lauca. At the same time, PST's interest expenses will decrease in sync with the trust's debt repayment schedule. This should also boost DPU on a more gradual basis.

PST is in a comfortable position since the completion of its 3Q08 preferential offering, which raised about US$92.3m. The proceeds were used to partially fund the 2008 vessel acquisitions. PST is currently geared at about 1x debt-to-equity. We expect this to fall to about 0.94x by the end of this year as the trust pays down debt. PST can also sit tight as it has no refinancing needs in the near to medium term. PST also stands out because it is the only Singapore-listed shipping trust without loan-to-market value covenants on its books.

Source: OCBC Investment Research, 22 Jan 2009