Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a
global shipping company specializing in the ownership of tanker
vessels, today reported net income of $15.7 million and net income
attributable to common stockholders of $4.6 million for the first
quarter of 2023. Net income attributable to common stockholders for
the three-month period ended March 31, 2023, has been adjusted by
aggregate non-cash items of $10.6 million, as per US GAAP
accounting standards, which do not affect the Company's operating
cash flows, EBITDA or performance overall. The 2023 first quarter
results compared to a net loss of $2.1 million and net loss
attributable to common stockholders of $11.5 million for the same
period in 2022. Earnings per share, basic and diluted, for the
first quarter of 2023 were $0.68 and $0.55, respectively, while
loss per share for the first quarter of 2022 was $51.46.
Revenue was $29.5 million ($28.0 million net of
voyage expenses) for the first quarter of 2023, compared to $8.6
million ($5.2 million net of voyage expenses) for the same period
in 2022. This increase was attributable to the increased
time-charter equivalent rates (TCE rates) achieved during the
quarter. Fleetwide, the average time charter equivalent rate for
the first quarter of 2023 was $41,157, compared with an average
rate of $12,352 for the same period in 2022. During the first
quarter of 2023, net cash provided by operating activities was
$18.7 million, compared with net cash used in operating activities
of $3.9 million for the first quarter of 2022.
Commenting on the results of the first quarter
of 2023, Andreas Michalopoulos, the Company’s Chief Executive
Officer, stated:
“During the first quarter of 2023, tanker market
fundamentals remained strong, supported by the ongoing shifts in
trade patterns resulting from sanctions on Russian crude oil
exports, thus benefiting longer haul tanker voyages. Improved
ton-mile demand, coupled with limited supply growth and recovering
demand from China, created a solid tanker charter rate environment,
enabling our Company to achieve a fleetwide average time charter
equivalent rate of $41,157 per day during the first quarter of
2023. As a result, we generated revenues of $29.5 million and net
income of $15.7 million during this quarter, representing increases
of 245% and 855%, respectively, from the first quarter of the
previous fiscal year. Our cash balance at the end of the quarter
was approximately $66 million corresponding to a 67% increase on a
quarterly basis and representing 8.0x our current market
capitalization. Our basic earnings per share for the quarter
annualized and compared to our current share price represent a
price-to-earnings ratio of approximately 0.3x.
“We believe that the overall positive
developments in the tanker market and the firm freight rate
environment will be sustainable through 2023 and beyond. During
2022, we took several steps towards our stated goal of fleet
expansion and renewal. This included four timely acquisitions of
younger Aframax tankers with high specifications that were
completed at values significantly below current levels, as well as
the disposal of an older vessel. In the first quarter of 2023, we
entered into a contract for the purchase of a newbuild LNG-ready
LR2 Aframax tanker with a 2025 delivery date. This decision is
consistent with our view of sustainable market fundamentals and
higher asset values going forward. With these recent developments,
our Company is well positioned to capture the prevailing strong
market conditions and generate significant cash flow. Currently,
five of our tankers operate under time charter contracts with
first-class charterers, earning gross charter rates ranging from
$23,000 to $45,000 per day and resulting in aggregate fixed
revenues of approximately $54.0 million for the remaining charter
periods. Our remaining vessels operate under pool arrangements with
reputable counterparties, earning healthy voyage charter rates
which further supplement our secured revenue backlog.
“Despite what we consider to be sustainably
strong fundamentals for our sector, we believe the value of our
common shares is extremely low when compared with our quarterly
earnings and cash on hand. In light of that, we commenced a $2.0
million share buyback program in April, which we believe is in the
best interests of both our Company and our shareholders. Pursuant
to this program, we have repurchased 1,518,113 shares of our common
stock to date at an average price of $0.84 per share.”
Tanker Market Update for the First
Quarter of 2023:
- Tanker fleet supply was 681.2
million dwt, up 0.8% from 675.5 million dwt from the previous
quarter and up 3.4% from Q1 2022 levels of 658.7 million dwt.
- Tanker demand in billion
tonne-miles is projected to increase by a firm 7.5% in 2023,
supported by the increased Chinese demand for crude oil imports as
well as by the ongoing trade pattern shifts being established as a
result of the European sanctions imposed on Russian crude oil,
which benefit longer-haul distances.
- Tanker fleet supply in deadweight
terms is estimated to grow by a moderate 2.1% in 2023.
- Crude oil tanker fleet utilization
averaged 87.3%, down from 88.3% in the previous quarter and up from
77.0% in Q1 2022.
- Newbuilding tanker contracting was
just 4.5 million dwt in the first quarter, resulting in a tanker
orderbook-to-fleet ratio of 4.0%, the lowest level of the past 28
years.
- Daily spot charter rates for
Aframax tankers averaged $78,764, down 13.4% from the previous
quarter average of $90,991 and up 144.1% from the Q1 2022 average
of $32,266.
- The value of a 10-year-old Aframax
tanker at the end of the first quarter was $50.0 million, up 11.1%
from $45.0 million in the previous quarter, and up 81.8% from $27.5
million in Q1 2022.
- The number of tankers used for
floating storage (excluding dedicated storage) was 117 (19.0
million dwt), down 21.0% from 148 (23.5 million dwt) in the
previous quarter and down 23.0% from Q1 2022 levels of 152 (23.4
million dwt).
- Global oil consumption was 99.9
million bpd, up 0.2% from the previous quarter level of 99.7
million bpd, and up 1.4% from Q1 2022 levels of 98.5 million
bpd.
- Global oil production was 101.3
million bpd, up 0.1% from the previous quarter level of 101.2
million bpd and up 2.5% from Q1 2022 levels of 98.7 million
bpd.
- OECD commercial inventories were
2,808 million barrels, up 1.5% from the previous quarter level of
2,766 million barrels, and up 7.8% from Q1 2022 levels of 2,604
million barrels.
The above market outlook update is based on
information, data, and estimates derived from industry sources.
There can be no assurances that such trends will continue or that
anticipated developments in tanker demand, fleet supply or other
market indicators will materialize. While we believe the market and
industry information included in this release to be generally
reliable, we have not independently verified any third-party
information or verified that more recent information is not
available.
Summary of
Selected Financial & Other Data |
|
|
|
For the three months ended March 31, |
|
|
|
2023 |
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
STATEMENT
OF OPERATIONS DATA (in thousands of US Dollars): |
|
Revenue |
$ |
29,527 |
|
$ |
8,568 |
|
|
Voyage expenses |
|
1,540 |
|
|
3,380 |
|
|
Vessel operating expenses |
|
5,143 |
|
|
3,327 |
|
|
Net income / (loss) |
|
15,695 |
|
|
(2,080 |
) |
|
Net income / (loss)
attributable to common stockholders |
|
4,623 |
|
|
(11,478 |
) |
|
Earnings / (Loss) per common
share, basic |
|
0.68 |
|
|
(51.46 |
) |
|
Earnings / (Loss) per common
share, diluted |
|
0.55 |
|
|
(51.46 |
) |
FLEET
DATA |
|
Average number of vessels |
|
8.0 |
|
|
5.0 |
|
|
Number of vessels |
|
8.0 |
|
|
5.0 |
|
|
Ownership days |
|
720 |
|
|
450 |
|
|
Available days |
|
680 |
|
|
420 |
|
|
Operating days (1) |
|
677 |
|
|
400 |
|
|
Fleet utilization |
|
99.6 |
% |
|
95.2 |
% |
AVERAGE
DAILY RESULTS |
|
Time charter equivalent (TCE)
rate (2) |
$ |
41,157 |
|
$ |
12,352 |
|
|
Daily vessel operating
expenses (3) |
$ |
7,143 |
|
$ |
7,393 |
|
________________
(1) Operating days are the number of available
days in a period less the aggregate number of days that our vessels
are off-hire. The specific calculation counts as on-hire the days
of the ballast leg of the spot voyages, as long as a charter party
is in place. The shipping industry uses operating days to measure
the aggregate number of days in a period during which vessels
actually generate revenues.
(2) Time charter equivalent rates, or TCE rates,
are defined as revenue (voyage, time charter and pool revenue),
less voyage expenses during a period divided by the number of our
available days during the period, which is consistent with industry
standards. Voyage expenses include port charges, bunker (fuel)
expenses, canal charges and commissions. TCE is a non-GAAP measure.
TCE rate is a standard shipping industry performance measure used
primarily to compare daily earnings generated by vessels despite
changes in the mix of charter types (i.e., voyage (spot) charters,
time charters and bareboat charters).
(3) Daily vessel operating expenses, which
include crew wages and related costs, the cost of insurance and
vessel registry, expenses relating to repairs and maintenance, the
costs of spares and consumable stores, lubricant costs, tonnage
taxes, regulatory fees, environmental costs, lay-up expenses and
other miscellaneous expenses, are calculated by dividing vessel
operating expenses by ownership days for the relevant period.
Fleet
Employment Profile (As of June 21, 2023) |
|
Performance Shipping
Inc.’s fleet is employed as follows: |
|
|
|
|
|
|
|
|
|
|
Vessel |
Year ofBuild |
Capacity |
Builder |
VesselType |
CharterType |
Notes |
Aframax Tanker Vessels |
1 |
BLUE
MOON |
2011 |
104,623
DWT |
Sumitomo Heavy Industries Marine & Engineering Co., LTD. |
Crude |
Time-Charter |
|
2 |
BRIOLETTE |
2011 |
104,588 DWT |
Sumitomo Heavy Industries Marine & Engineering Co., LTD. |
Crude |
Time-Charter |
|
3 |
P. KIKUMA |
2007 |
115,915 DWT |
Samsung Heavy Industries Co Ltd. |
Crude |
Pool |
|
4 |
P. YANBU |
2011 |
105,391 DWT |
Sumitomo Heavy Industries Marine & Engineering Co., LTD. |
Crude |
Time-Charter |
|
5 |
P. SOPHIA |
2009 |
105,071 DWT |
Hyundai Heavy Industries Co., LTD |
Crude |
Pool |
|
6 |
P. ALIKI |
2010 |
105,304 DWT |
Hyundai Heavy Industries Co., LTD |
Product |
Time-Charter |
|
7 |
P. MONTEREY |
2011 |
105,525 DWT |
Hyundai Heavy Industries Co., LTD |
Crude |
Time-Charter |
|
8 |
P. LONG BEACH |
2013 |
105,408 DWT |
Hyundai Heavy Industries Co., LTD |
Product |
Pool |
|
|
|
|
|
|
|
|
|
About the Company
Performance Shipping Inc. is a global provider
of shipping transportation services through its ownership of tanker
vessels. The Company employs its fleet on spot voyages, through
pool arrangements and on time charters.
Cautionary Statement Regarding
Forward-Looking Statements
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include, but are not limited to,
statements concerning plans, objectives, goals, strategies, future
events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts,
including with respect to the delivery of the vessels we have
agreed to acquire.
The Company desires to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in
connection with this safe harbor legislation. The words "believe,"
"anticipate," "intends," "estimate," "forecast," "project," "plan,"
"potential," "may," "should," "expect," "pending," and similar
expressions, terms or phrases may identify forward-looking
statements.
The forward-looking statements in this press
release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without
limitation, our management's examination of historical operating
trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were
reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies which are
difficult or impossible to predict and are beyond our control, we
cannot assure you that we will achieve or accomplish these
expectations, beliefs or projections.
In addition to these important factors, other
important factors that, in our view, could cause actual results to
differ materially from those discussed in the forward-looking
statements include the strength of world economies, fluctuations in
currencies and interest rates, general market conditions, including
fluctuations in charter hire rates and vessel values, changes in
demand for our vessels, changes in the supply of vessels, changes
in worldwide oil production and consumption and storage, changes in
our operating expenses, including bunker prices, crew costs,
dry-docking and insurance costs, our future operating or financial
results, availability of financing and refinancing, including with
respect to the vessels we have agreed to acquire, changes in
governmental rules and regulations or actions taken by regulatory
authorities, potential liability from pending or future litigation,
general domestic and international political conditions, the length
and severity of epidemics and pandemics, including the ongoing
outbreak of the novel coronavirus (COVID-19) and its impact on the
demand for seaborne transportation of petroleum and other types of
products, changes in governmental rules and regulations or actions
taken by regulatory authorities, potential liability from pending
or future litigation, general domestic and international political
conditions or events, including the impact of conflict in Ukraine,
the imposition of new international sanctions, “trade wars”, acts
by terrorists or acts of piracy on ocean-going vessels, potential
disruption of shipping routes due to accidents, labor disputes or
political events, vessel breakdowns and instances of off-hires and
other important factors. Please see our filings with the U.S.
Securities and Exchange Commission for a more complete discussion
of these and other risks and uncertainties.
(See financial tables attached)
PERFORMANCE SHIPPING INC. |
FINANCIAL TABLES |
Expressed in thousands of U.S. Dollars, except for share and per
share data |
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
For the three months ended March 31, |
|
|
|
2023 |
|
2022 |
REVENUE: |
|
|
|
|
|
Revenue |
$ |
29,527 |
|
$ |
8,568 |
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
Voyage expenses |
|
1,540 |
|
|
3,380 |
|
|
Vessel operating expenses |
|
5,143 |
|
|
3,327 |
|
|
Depreciation and amortization
of deferred charges |
|
3,688 |
|
|
2,013 |
|
|
General and administrative
expenses |
|
1,662 |
|
|
1,508 |
|
|
Provision for credit losses
and write offs |
|
(16 |
) |
|
22 |
|
|
Foreign currency losses /
(gains) |
|
30 |
|
|
(46 |
) |
|
Operating income /
(loss) |
$ |
17,480 |
|
$ |
(1,636 |
) |
|
|
|
|
|
|
OTHER
INCOME / (EXPENSES): |
|
|
|
|
|
Interest and finance
costs |
|
(3,085 |
) |
|
(445 |
) |
|
Interest income |
|
348 |
|
|
1 |
|
|
Changes in fair value of
warrants' liability |
|
952 |
|
|
- |
|
|
Total other expenses,
net |
$ |
(1,785 |
) |
$ |
(444 |
) |
|
|
|
|
|
|
Net income
/ (loss) |
$ |
15,695 |
|
$ |
(2,080 |
) |
|
|
|
|
|
|
Deemed dividend on
Series B preferred stock upon exchange of common stock |
|
- |
|
|
(9,271 |
) |
Deemed dividend to
the Series C preferred stockholders due to triggering of a
down-round feature |
|
(9,809 |
) |
|
- |
|
Deemed dividend to
the July 2022 and August 2022 warrants holders due to triggering of
a down-round feature |
|
(789 |
) |
|
- |
|
Dividends on
preferred stock |
|
(474 |
) |
|
(127 |
) |
|
|
|
|
|
|
Net income
/ (loss) attributable to common stockholders |
$ |
4,623 |
|
$ |
(11,478 |
) |
|
|
|
|
|
|
Earnings/
(Loss) per common share, basic |
$ |
0.68 |
|
$ |
(51.46 |
) |
|
|
|
|
|
|
Earnings /
(Loss) per common share, diluted |
$ |
0.55 |
|
$ |
(51.46 |
) |
|
|
|
|
|
|
Weighted
average number of common shares, basic |
|
6,815,828 |
|
|
223,044 |
|
|
|
|
|
|
|
Weighted
average number of common shares, diluted |
|
8,763,703 |
|
|
223,044 |
|
|
|
|
|
|
|
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME / (LOSS) |
|
|
|
|
|
|
|
|
|
For the three months ended March 31, |
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
Net income
/ (loss) |
$ |
15,695 |
|
$ |
(2,080 |
) |
|
|
|
|
|
|
Comprehensive income / (loss) |
$ |
15,695 |
|
$ |
(2,080 |
) |
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEET DATA |
|
|
(Expressed in
thousands of US Dollars) |
|
|
|
|
|
March 31, 2023 |
|
December 31, 2022* |
ASSETS |
|
(unaudited) |
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
$ |
66,206 |
$ |
39,726 |
Advances for vessel acquisitions and other vessels' costs |
|
5 |
|
- |
Vessels, net |
|
234,026 |
|
236,607 |
Other fixed assets, net |
|
65 |
|
72 |
Other assets |
|
13,701 |
|
16,574 |
|
Total assets |
$ |
314,003 |
$ |
292,979 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Long-term bank debt, net of unamortized deferred financing
costs |
$ |
123,490 |
$ |
127,675 |
Other liabilities |
|
8,381 |
|
9,599 |
Total stockholders' equity |
|
182,132 |
|
155,705 |
|
Total liabilities and stockholders' equity |
$ |
314,003 |
$ |
292,979 |
|
|
|
|
|
|
* The balance
sheet data as of December 31, 2022 has been derived from the
audited consolidated financial statements at that date. |
OTHER
FINANCIAL DATA |
|
|
|
|
|
|
|
|
|
For the three months ended March 31, |
|
|
|
2023 |
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
Net Cash provided by / (used in) Operating Activities |
$ |
18,679 |
|
$ |
(3,863 |
) |
Net Cash used in Investing Activities |
$ |
(378 |
) |
$ |
(1,161 |
) |
Net Cash provided by Financing Activities |
$ |
8,179 |
|
$ |
3,636 |
|
Corporate Contact:
Andreas Michalopoulos
Chief Executive Officer, Director and Secretary
Telephone: + 30-216-600-2400
Email: amichalopoulos@pshipping.com
Website: www.pshipping.com
Investor and Media Relations:
Edward Nebb
Comm-Counsellors, LLC
Telephone: + 1-203-972-8350
Email: enebb@optonline.net
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