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 $10.4 million and net income
attributable to common stockholders of $9.9 million for the third
quarter of 2023. The 2023 third quarter results compared to a net
income of $10.7 million and net income attributable to common
stockholders of $10.4 million for the same period in 2022. Earnings
per share, basic and diluted, for the third quarter of 2023 were
$0.88 and $0.27, respectively.
Revenue was $24.1 million ($23.4 million net of
voyage expenses) for the third quarter of 2023, compared to $22.1
million ($18.8 million net of voyage expenses) for the same period
in 2022. This increase was attributable to the increase in
ownership days, which more than offset the slight decrease in
time-charter equivalent rates (“TCE rates”) achieved during the
quarter. Fleetwide, the average TCE rate for the third quarter of
2023 was $31,787, compared with an average rate of $34,411 for the
same period in 2022. During the third quarter of 2023, net cash
provided by operating activities was $17.9 million, compared with
net cash provided by operating activities of $11.8 million for the
third quarter of 2022.
Net income for the nine months ended September
30, 2023, amounted to $44.5 million, compared to a net income of
$12.5 million for the nine months ended September 30, 2022. Net
income attributable to common stockholders for the nine months
ended September 30, 2023, amounted to $32.4 million, and resulted
in earnings per share, basic and diluted, of $3.26 and $1.25,
respectively. Net income attributable to common stockholders for
the nine months ended September 30, 2022, amounted to $2.6 million,
and resulted in earnings per common share, basic and diluted, of
$2.35 and $0.60, respectively. Net income for the nine-month
periods ended September 30, 2023 and 2022, has been adjusted to
arrive at net income attributable to common stockholders mainly by
aggregate non-cash items of $10.6 million and $9.3 million,
respectively, as per US GAAP accounting standards, which do not
affect the Company's operating cash flows.
Commenting on the results of the third quarter
of 2023, Andreas Michalopoulos, the Company’s Chief Executive
Officer, stated:
“During the third quarter of 2023, our Company
maintained its remarkable profitability and strengthened its
financial position by capitalizing on the solid tanker market
fundamentals. We achieved a fleetwide average time charter
equivalent rate of $31,787 per day and $38,183 per day during the
three and nine-month periods ended September 30, 2023,
respectively. As a result, we generated revenues of $85.1 million
and net income of $44.5 million during the nine months ended
September 30, 2023, representing increases of 80% and 257%,
respectively, from the equivalent period of 2022. Our cash balance
at the end of the third quarter was approximately $85.4 million,
corresponding to a 115% increase from the 2022 year-end cash
balance.
“Reflecting our confidence in the strength of
our business as well as in our ability to generate significant cash
flow by operating our expanded fleet in the prevailing profitable
charter rate environment, following the completion of an initial $2
million share repurchase program commenced in April of this year,
in August the Company’s board of directors approved a second $2
million share repurchase program, which we intend to deploy
opportunistically in a manner that enhances shareholder value.
“We believe that the overall positive
developments in the tanker sector and the firm freight rate
environment will be sustainable in the foreseeable future. Our
fleet employment strategy focused on a balanced exposure to short
to medium term time charter contracts as well as the spot tanker
market, has well positioned our Company to secure, beginning the
fourth quarter of 2023, a fixed revenue backlog of approximately
$39 million, as five of our Aframax tankers are currently operating
under time charter contract arrangements with reputable
counterparties, while in parallel we are able to capture the upside
potential of the Aframax spot tanker market, through the operation
of our remaining vessels under pool arrangements.
“Going forward, we expect to further solidify
our market position through the renewal of our fleet and the
acquisition of younger and more technologically advanced vessels.
As previously announced, we have entered into a contract for the
purchase of a newbuild LNG-ready LR2 Aframax tanker with a 2025
delivery date and we have agreed to sell our oldest Aframax tanker,
the M/T P. Kikuma, for a gross sale price of $39.3 million and
expected delivery to the seller during December 2023. We believe
that our impressive financial performance, our current cash balance
representing 1.6x of the remaining capital expenditures related to
our newbuilding Aframax tanker, our conservative net leverage which
currently corresponds to a mere 10% of our estimated fleet market
value, as well as the proceeds from the sale of our oldest Aframax
tanker, result in a strong balance sheet and enhance our ability to
pursue selective and timely asset acquisitions.”
Corporate Developments
Share Repurchase Plan
Under the share repurchase plan announced in
April 2023 (the “April Plan”), the Company repurchased during the
third quarter of 2023 a total of 528,953 common shares for a total
amount of approximately $0.6 million, and consequently, the April
Plan was successfully completed.
Additionally, as previously announced on August
21, 2023, the Company’s board of directors approved a share
repurchase plan (the “August Plan”) pursuant to which the Company
may repurchase up to $2 million of its outstanding common shares.
As of the date hereof, 33,333 common shares have been repurchased
for a total amount of approximately $50,000 under the August
Plan.
Update on Outstanding Shares and Warrants
As of November 24, 2023, the Company had
outstanding 12,152,559 common shares. In addition, the following
common share purchase warrants were outstanding as of such
date:
- Class A
Warrants to purchase up to 567,366 common shares at an exercise
price of $15.75 per common share;
- Warrants issued
July 19, 2022, to purchase up to 1,033,333 common shares at an
exercise price of $1.65 per common share;
- Warrants issued
August 16, 2022, to purchase up to 2,122,222 common shares at an
exercise price of $1.65 per common share;
- Series A
Warrants issued March 3, 2023, which are exchangeable for up to
14,300 common shares; and
- Series B
Warrants issued March 3, 2023, to purchase up to 4,167,000 common
shares at an exercise price of $2.25 per common share.
Finally, the Company had 50,726 shares of its
Series B Convertible Cumulative Perpetual Preferred Stock and
1,451,044 shares of its Series C Convertible Cumulative Redeemable
Perpetual Preferred Stock outstanding.
Tanker Market Update for the Third
Quarter of 2023:
• Tanker fleet supply was 688.3 million dwt, up
0.4% from 685.6 million dwt from the previous quarter and up 2.5%
from Q3 2022 levels of 671.7 million dwt.
• Tanker demand in billion tonne-miles is
projected to increase by a firm 7.5% in 2023, supported by solid
Chinese demand for crude oil, ongoing trade pattern shifts towards
longer haul distances due to sanctions imposed on Russian exports
and returning crude oil volumes to the market from Venezuela, after
its partial oil sanctions lift announced in October.
• Tanker fleet supply in deadweight terms is estimated to grow
by a moderate 2.0% in 2023 and just 0.6% in 2024.
• Crude oil tanker fleet utilization was
estimated at 84.4%, down from 85.0% in the previous quarter and up
from 79.5% in Q3 2022.
• Newbuilding tanker contracting was just 9.2
million dwt in the third quarter, resulting in a tanker
orderbook-to-fleet ratio of 6.1%, close to the lowest level
observed during the past 28 years.
• Daily spot charter rates for Aframax tankers
averaged $27,409, down 54.2% from the previous quarter average of
$59,855 and down 47.9% from the Q3 2022 average of $52,610.
• The value of a 10-year-old Aframax tanker at
the end of the third quarter was $51.0 million, down 1.9% from 52.0
million in the previous quarter, and up 21.4% from $42.0 million in
Q3 2022.
• The number of tankers used for floating
storage (excluding dedicated storage) was 123 (17.5 million dwt),
down 17.5% from 149 (21.5 million dwt) in the previous quarter and
down 30.5% from Q3 2022 levels of 177 (26.0 million dwt).
• Global oil consumption was 101.4 million bpd,
up 0.7% from the previous quarter level of 100.8 million bpd, and
up 1.4% from Q3 2022 levels of 100.0 million bpd.
• Global oil production was 101.4 million bpd,
down 0.3% from the previous quarter level of 101.7 million bpd and
up 0.4% from Q3 2022 levels of 101.0 million bpd.
• OECD commercial inventories were 2,830 million
barrels, up 0.1% from the previous quarter level of 2,828 million
barrels, and up 3.4% from Q3 2022 levels of 2,736 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 |
(in thousands of US Dollars, except fleet data and average
daily results) |
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
STATEMENT
OF OPERATIONS DATA: |
Revenue |
$ |
24,114 |
|
$ |
22,131 |
|
$ |
85,098 |
|
$ |
47,406 |
|
Voyage expenses |
|
719 |
|
|
3,274 |
|
|
3,234 |
|
|
12,022 |
|
Vessel operating expenses |
|
5,524 |
|
|
3,309 |
|
|
15,855 |
|
|
9,586 |
|
Net income |
|
10,369 |
|
|
10,676 |
|
|
44,452 |
|
|
12,465 |
|
Net income attributable to common stockholders |
|
9,891 |
|
|
10,404 |
|
|
32,425 |
|
|
2,595 |
|
Earnings per common share, basic |
|
0.88 |
|
|
3.83 |
|
|
3.26 |
|
|
2.35 |
|
Earnings per common share, diluted |
|
0.27 |
|
|
1.50 |
|
|
1.25 |
|
|
0.60 |
|
FLEET
DATA |
Average number of vessels |
|
8.0 |
|
|
6.0 |
|
|
8.0 |
|
|
5.3 |
|
Number of vessels |
|
8.0 |
|
|
6.0 |
|
|
8.0 |
|
|
6.0 |
|
Ownership days |
|
736 |
|
|
548 |
|
|
2,184 |
|
|
1,453 |
|
Available days |
|
736 |
|
|
548 |
|
|
2,144 |
|
|
1,423 |
|
Operating days (1) |
|
730 |
|
|
529 |
|
|
2,120 |
|
|
1,384 |
|
Fleet utilization |
|
99.2 |
% |
|
96.5 |
% |
|
98.9 |
% |
|
97.3 |
% |
AVERAGE
DAILY RESULTS |
Time charter equivalent (TCE) rate (2) |
$ |
31,787 |
|
$ |
34,411 |
|
$ |
38,183 |
|
$ |
24,866 |
|
Daily vessel operating expenses (3) |
$ |
7,505 |
|
$ |
6,038 |
|
$ |
7,260 |
|
$ |
6,597 |
|
_________________
(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 November 27, 2023) |
|
Performance Shipping
Inc.’s fleet is employed as follows: |
|
|
|
|
|
|
|
|
|
|
Vessel |
Year of Build |
Capacity |
Builder |
Vessel Type |
Charter Type |
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 |
1 |
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 |
|
|
|
|
|
|
|
|
|
1 Vessel P. Kikuma has been sold and is expected
to be delivered to its new owners in December 2023.
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 future market conditions, the conduct of
our share repurchase program and 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, but are not limited to: the strength of
world economies, fluctuations in currencies and interest rates,
general market conditions, including fluctuations in charter rates
and vessel values, changes in demand in the tanker shipping
industry, 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 vessels we agree 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 COVID-19, and their
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, general
domestic and international political conditions or events,
including “trade wars”, armed conflicts including the war
in Ukraine and the war between Israel and Hamas, the imposition of
new international sanctions, 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 September 30, |
|
For the nine months ended September 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
REVENUE: |
|
|
|
|
|
|
|
|
Revenue |
$ |
24,114 |
|
$ |
22,131 |
|
$ |
85,098 |
|
$ |
47,406 |
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
Voyage expenses |
|
719 |
|
|
3,274 |
|
|
3,234 |
|
|
12,022 |
|
Vessel operating expenses |
|
5,524 |
|
|
3,309 |
|
|
15,855 |
|
|
9,586 |
|
Depreciation and amortization of deferred charges |
|
3,811 |
|
|
2,496 |
|
|
11,276 |
|
|
6,566 |
|
General and administrative expenses |
|
1,981 |
|
|
1,416 |
|
|
5,396 |
|
|
4,705 |
|
(Reversal) / Provision for credit losses and write offs |
|
34 |
|
|
(59 |
) |
|
(21 |
) |
|
18 |
|
Foreign currency losses / (gains) |
|
(5 |
) |
|
2 |
|
|
33 |
|
|
(51 |
) |
Operating
income |
$ |
12,050 |
|
$ |
11,693 |
|
$ |
49,325 |
|
$ |
14,560 |
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME / (EXPENSES): |
|
|
|
|
|
|
|
|
Interest and finance costs |
|
(2,278 |
) |
|
(1,117 |
) |
|
(7,642 |
) |
|
(2,207 |
) |
Interest income |
|
999 |
|
|
100 |
|
|
2,204 |
|
|
112 |
|
Changes in fair value of warrants' liability |
|
(402 |
) |
|
- |
|
|
565 |
|
|
- |
|
Total other expenses, net |
$ |
(1,681 |
) |
$ |
(1,017 |
) |
$ |
(4,873 |
) |
$ |
(2,095 |
) |
|
|
|
|
|
|
|
|
|
Net
income |
$ |
10,369 |
|
$ |
10,676 |
|
$ |
44,452 |
|
$ |
12,465 |
|
|
|
|
|
|
|
|
|
|
Income allocated
to participating securities |
|
- |
|
|
(3 |
) |
|
(1 |
) |
|
(2 |
) |
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 |
|
- |
|
|
(22 |
) |
|
(789 |
) |
|
(22 |
) |
Dividends on
preferred stock |
|
(478 |
) |
|
(247 |
) |
|
(1,428 |
) |
|
(575 |
) |
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders |
$ |
9,891 |
|
$ |
10,404 |
|
$ |
32,425 |
|
$ |
2,595 |
|
|
|
|
|
|
|
|
|
|
Earnings
per common share, basic |
$ |
0.88 |
|
$ |
3.83 |
|
$ |
3.26 |
|
$ |
2.35 |
|
|
|
|
|
|
|
|
|
|
Earnings
per common share, diluted |
$ |
0.27 |
|
$ |
1.50 |
|
$ |
1.25 |
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares, basic |
|
11,261,597 |
|
|
2,715,008 |
|
|
9,950,612 |
|
|
1,104,669 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares, diluted |
|
38,618,629 |
|
|
6,854,785 |
|
|
34,486,994 |
|
|
5,556,942 |
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
|
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
10,369 |
|
$ |
10,676 |
|
$ |
44,452 |
|
$ |
12,465 |
|
Comprehensive income |
$ |
10,369 |
|
$ |
10,676 |
|
$ |
44,452 |
|
$ |
12,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEET DATA |
|
|
(Expressed in
thousands of US Dollars) |
|
|
|
|
September 30, 2023 |
|
December 31, 2022* |
ASSETS |
|
(unaudited) |
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
$ |
85,396 |
$ |
39,726 |
Advances for vessel under construction and other vessels'
costs |
|
11,106 |
|
- |
Vessels, net |
|
226,803 |
|
236,607 |
Other fixed assets, net |
|
45 |
|
72 |
Other assets |
|
8,688 |
|
16,574 |
Total assets |
$ |
332,038 |
$ |
292,979 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Long-term bank debt, net of unamortized deferred financing
costs |
$ |
117,124 |
$ |
127,675 |
Other liabilities |
|
5,547 |
|
9,599 |
Total stockholders' equity |
|
209,367 |
|
155,705 |
Total liabilities and stockholders' equity |
$ |
332,038 |
$ |
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 September 30, |
|
For the nine months endedSeptember
30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Net Cash provided by Operating Activities |
$ |
17,883 |
|
$ |
11,761 |
|
$ |
58,692 |
|
$ |
10,167 |
|
Net Cash used in Investing Activities |
$ |
(197 |
) |
$ |
(30,810 |
) |
$ |
(11,708 |
) |
$ |
(34,829 |
) |
Net Cash (used in) / provided by Financing Activities |
$ |
(3,025 |
) |
$ |
41,241 |
|
$ |
(1,314 |
) |
$ |
50,550 |
|
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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