Pan Ocean to convert vessels coming off SK Shipping contracts into its own fleet starting in 2028

[Financial News] LS Securities said on the 3rd that, starting in 2028, vessels whose contracts with SK Shipping expire will be converted to Pan Ocean’s own fleet, creating the option to realize gains from their sale. In 2027, the full-year earnings contribution from 10 SK Shipping VLCCs will be reflected, and two newbuild VLCCs and two MR vessels will also be delivered between April and July. Pan Ocean is reviewing how to deploy the newbuilds with profitability in mind, including spot-market operations, long-term charters, and replacing vessels under SK Shipping contracts. LS Securities therefore maintained its Buy rating on Pan Ocean and kept its target price at 10,000 won.
Lee Jae-hyuk, an analyst at LS Securities, explained, “The shift from operating a fleet centered on bulk carriers to becoming an energy-focused integrated shipping company is ongoing. In the bulk segment, four CVC vessels for Vale and POSCO are being deployed in stages, strengthening the stable earnings base centered on long-term contracts.”
Pan Ocean reported consolidated third-quarter revenue of 2.0973 trillion won and operating profit of 197.4 billion won. Operating profit slightly exceeded the consensus estimate of 191.8 billion won.
The analyst forecast, “With the average Baltic Dry Index (BDI) at 3,041 points and long-haul cargo volumes increasing, bulk operating profit reached 100.6 billion won. Tanker revenue doubled quarter on quarter following the delivery of secondhand VLCCs. The contribution from VLCCs will be reflected in stages from the fourth quarter and ramp up in earnest in 2027.”

[email protected] Kang Gu-gwi Reporter