Pacific Shipping Trust (PST) says it will distribute 0.793 US cents per unit to unitholders for the second quarter ended June 30, 2010 (2Q FY2010), representing a tax-free annualised yield of 10.9%.

Gross revenue in 2Q FY2010 from the 12 vessels chartered on long-term basis remained stable at US$15.1 million ($20.7 million), recording a profit after tax of US$6.6 million. This was consistent compared to the corresponding period. For the six months of 2010, gross revenue was US$30.3 million and profit after tax totalled US$13.3 million.

In late 2011, PST expects its contracted revenue to be higher as the 10-year time charter to Shagang for the two 180,000 DWT Capesize Bulk Carriers becomes effective.

Distribution per unit (DPU) of 0.793 US cents in Q2 FY2010 was 20% lower than in Q2 FY2009 due to additional cash retention which started in the third quarter of 2009, of which 30% of distributable income was retained as compared to 10% previously. This policy in preserving cash has enabled PST to acquire two new 180,000 DWT Capesize Bulk Carriers as announced on June 28, 2010.

With improving freight rates, asset prices, and global trade, the charter rates for container vessels have recovered. PST says this trend should continue for the rest of the year and is cautiously optimistic for the outlook of the container market.

As for the dry bulk sector, PST expects demand for Chinese imports of iron ore and coal to support shipping demand for capesize bulk carriers. This trend should continue as end-users lock in long-term charters for their shipping needs.