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 $11.4 million and net income
attributable to common stockholders of $11.0 million for the first
quarter of 2024. The 2024 first quarter results compared to a net
income of $15.7 million and net income attributable to common
stockholders of $4.6 million for the same period in 2023. Earnings
per share, basic and diluted, for the first quarter of 2024 were
$0.89 and $0.29, respectively.
Revenue was $22.4 million ($21.6 million net of
voyage expenses) for the first quarter of 2024, compared to $29.5
million ($28.0 million net of voyage expenses) for the same period
in 2023. This decrease was attributable to the decrease in
time-charter equivalent rates (“TCE rates”) realized during the
quarter, and to the decrease in the ownership days following the
sale of the vessel P. Kikuma in December 2023. Fleetwide, the
average TCE rate for the first quarter of 2024 was $33,857,
compared with an average rate of $41,157 for the same period in
2023. During the first quarter of 2024, net cash provided by
operating activities was $17.3 million, compared with net cash
provided by operating activities of $18.7 million for the first
quarter of 2023.
Commenting on the results of the first quarter
of 2024, Andreas Michalopoulos, the Company’s Chief Executive
Officer, stated:
“During the first quarter of 2024, the tanker
market remained solid supported by the ongoing shift in trade
patterns arising from the Russian oil trade and Red Sea disruptions
and resulting in longer haul tanker voyages. The increased ton-mile
demand, in conjunction with limited supply growth, continues to
sustain tanker charter rates at firm levels. This enabled our
Company to achieve a fleetwide average time charter equivalent rate
of $33,857 per day, corresponding to quarterly revenues of $22.4
million. As a result, during the quarter ended March 31, 2024, we
generated net income attributable to common stockholders of $11.0
million, representing an increase of 137%, compared to the same
period in 2023.
“Going forward, we believe that the solid tanker
market environment will be sustainable, prompting our continued
focus on a fleet deployment strategy that emphasizes balanced
exposure to short- and medium-term time charter contracts and the
spot market. Specifically, five of our Aframax tankers are
currently operating under time charter contracts with first-class
charterers, securing a fixed revenue backlog of approximately $38.5
million, based on the minimum duration of each contract. Our
remaining two Aframax tankers operate under pool arrangements,
benefiting from exposure to the prevailing robust Aframax spot
rates.
“Looking ahead, we believe our fleet expansion
and renewal strategy is consistent with our view of continuing
favorable market fundamentals. As previously announced, we have
entered into shipbuilding contracts for the construction of three
LNG-ready LR2 Aframax tankers and one LR1 chemical/product oil
tanker, expected to be delivered to our Company between late 2025
and early 2027. These vessels, which will be equipped with
scrubbers and water ballast treatment systems, will feature the
latest high-specification engines and comply with stringent
emission requirements. Our decision to acquire these three
identical LR2 Aframax “sister” vessels, along with our first LR1
chemical/product oil tanker, reflects our focus on fuel efficiency
and our commitment to participate in the energy transition. Our
newbuilding commitments are supported by the recently announced
5-year time charter employment contracts for our three newbuilding
LR2 Aframax tankers, which will generate gross revenues of $169.8
million and supplement our existing revenue backlog of $38.5
million. We believe that our financial position is strong, with a
quarter-end cash balance (including restricted cash) of
approximately $60.8 million representing 1.1x our outstanding bank
debt, and aggregate revenue backlog of $208.3 million,
corresponding to 94% of all our remaining newbuilding capital
expenditures.”
Corporate Developments
Update on Outstanding Shares and Warrants
As of May 29, 2024, the Company had outstanding
12,310,930 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
1,426,692 shares of its Series C Convertible Cumulative Redeemable
Perpetual Preferred Stock outstanding.
Tanker Market Update for the First
Quarter of 2024:
- Tanker fleet supply was 691.4
million dwt, up 0.3% from 689.4 million dwt from the previous
quarter and up 1.4% from Q1 2023 levels of 681.9 million dwt.
- Tanker demand in billion ton-miles
is projected to increase by 4.1% in 2024, supported by notable
growth in global crude oil trade volumes coupled with solid demand
observed in the Atlantic – Asia trade. Furthermore, trade flow
shifts arising from the ongoing disruptions in the Red Sea area,
increase average distance traveled and further support ton-mile
demand growth.
- Tanker fleet supply in deadweight
terms is estimated to grow by just 0.8% in 2024 and by a moderate
2.0% in 2025.
- Crude oil tanker fleet utilization
is expected to average 85.5% over the next three years, as compared
to an average of 84.6% in 2023.
- Newbuilding tanker contracting was
15.9 million dwt in the first quarter, resulting in a tanker
orderbook-to-fleet ratio of 9.4%.
- Daily spot charter rates for
Aframax tankers averaged $56,338, down 8.1% from the previous
quarter average of $61,277 and down 28.5% from the Q1 2023 average
of $78,764.
- The value of a 10-year-old Aframax
tanker at the end of the first quarter was $58.0 million, up 5.5%
from $55.0 million in the previous quarter, and up 16.0% from $50.0
million in Q1 2023.
- The number of tankers used for
floating storage (excluding dedicated storage) stood at 114 (14.1
million dwt) on March 29,2024 up 28.1% from 89 (10.7 million dwt)
at the end of the previous quarter and down 25.0% from 152 (20.8
million dwt) on March 31, 2023.
- Global oil consumption was 102.1
million bpd, down 0.3% from the previous quarter level of 102.4
million bpd, and up 1.2% from Q1 2023 levels of 100.9 million
bpd.
- Global oil production was 102.2
million bpd, down 0.5% from the previous quarter level of 102.7
million bpd and up 1.3% from Q1 2023 levels of 101.0 million
bpd.
- OECD commercial inventories were
2,734 million barrels, down 1.4% from the previous quarter level of
2,773 million barrels, and down 0.4% from Q1 2023 levels of 2,746
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 per share data, fleet data and average daily
results) |
|
For the three months ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
(unaudited) |
|
|
(unaudited) |
STATEMENT
OF OPERATIONS DATA: |
|
Revenue |
$ |
22,371 |
|
|
$ |
29,527 |
|
|
Voyage expenses |
|
804 |
|
|
|
1,540 |
|
|
Vessel operating expenses |
|
4,874 |
|
|
|
5,143 |
|
|
Net income |
|
11,431 |
|
|
|
15,695 |
|
|
Net income attributable to
common stockholders |
|
10,972 |
|
|
|
4,623 |
|
|
Earnings per common share,
basic |
|
0.89 |
|
|
|
0.68 |
|
|
Earnings per common share,
diluted |
|
0.29 |
|
|
|
0.55 |
|
FLEET
DATA |
|
Average number of vessels |
|
7.0 |
|
|
|
8.0 |
|
|
Number of vessels |
|
7.0 |
|
|
|
8.0 |
|
|
Ownership days |
|
637 |
|
|
|
720 |
|
|
Available days |
|
637 |
|
|
|
680 |
|
|
Operating days (1) |
|
624 |
|
|
|
677 |
|
|
Fleet utilization |
|
98.0 |
% |
|
|
99.6 |
% |
AVERAGE
DAILY RESULTS |
|
Time charter equivalent (TCE)
rate (2) |
$ |
33,857 |
|
|
$ |
41,157 |
|
|
Daily vessel operating
expenses (3) |
$ |
7,651 |
|
|
$ |
7,143 |
|
__________
(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 May 30, 2024) |
Performance Shipping
Inc.’s fleet is employed as follows: |
|
|
|
|
|
|
|
|
|
Vessel |
Year ofBuild |
Capacity |
Builder |
VesselType |
Charter Type |
Notes |
Operating 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. YANBU |
2011 |
105,391 DWT |
Sumitomo Heavy Industries Marine & Engineering Co., LTD. |
Crude |
Time-Charter |
|
4 |
P. SOPHIA |
2009 |
105,071 DWT |
Hyundai Heavy Industries Co., LTD |
Crude |
Pool |
|
5 |
P. ALIKI |
2010 |
105,304 DWT |
Hyundai Heavy Industries Co., LTD |
Product |
Pool |
|
6 |
P. MONTEREY |
2011 |
105,525 DWT |
Hyundai Heavy Industries Co., LTD |
Crude |
Time-Charter |
|
7 |
P. LONG BEACH |
2013 |
105,408 DWT |
Hyundai Heavy Industries Co., LTD |
Product |
Time-Charter |
|
Newbuilding LR1 and LR2 Tanker Vessels |
8 |
HULL 1515 |
- |
114,000 DWT |
China Shipbuilding Trading Company Limited and Shanghai Waigaoqiao
Shipbuilding Company Limited |
Product |
Time-Charter |
1 |
9 |
HULL 1596 |
- |
114,000 DWT |
China Shipbuilding Trading Co. Ltd. (“CSTC”) and Shanghai
Waigaoqiao Shipbuilding Co. Ltd. |
Product |
Time-Charter |
1 |
10 |
HULL 1597 |
- |
114,000 DWT |
China Shipbuilding Trading Co. Ltd. (“CSTC”) and Shanghai
Waigaoqiao Shipbuilding Co. Ltd. |
Product |
Time-Charter |
1 |
11 |
HULL 1624 |
- |
75,000 DWT |
Jiangsu Yangzijiang Shipbuilding Group Co., Ltd. |
Chemical/ Product |
- |
|
|
|
1 |
As previously
announced, the Company has secured five-year time charter contracts
for three of its newbuilding vessels, with employment to commence
upon delivery of the vessels in the fourth quarter of 2025, and
first and second quarter of 2026. |
|
|
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, 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 March 31, |
|
|
|
2024 |
|
|
2023 |
REVENUE: |
|
|
|
|
|
|
Revenue |
$ |
22,371 |
|
|
$ |
29,527 |
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
Voyage expenses |
|
804 |
|
|
|
1,540 |
|
|
Vessel operating expenses |
|
4,874 |
|
|
|
5,143 |
|
|
Depreciation and amortization
of deferred charges |
|
3,300 |
|
|
|
3,688 |
|
|
General and administrative
expenses |
|
2,124 |
|
|
|
1,662 |
|
|
Reversal for credit
losses |
|
- |
|
|
|
(16 |
) |
|
Foreign currency losses |
|
11 |
|
|
|
30 |
|
|
Operating
income |
$ |
11,258 |
|
|
$ |
17,480 |
|
|
|
|
|
|
|
|
OTHER
INCOME / (EXPENSES): |
|
|
|
|
|
|
Interest and finance
costs |
|
(665 |
) |
|
|
(3,085 |
) |
|
Interest income |
|
833 |
|
|
|
348 |
|
|
Changes in fair value of
warrants' liability |
|
5 |
|
|
|
952 |
|
|
Total other income /
(expenses), net |
$ |
173 |
|
|
$ |
(1,785 |
) |
|
|
|
|
|
|
|
Net
income |
$ |
11,431 |
|
|
$ |
15,695 |
|
|
|
|
|
|
|
|
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 |
|
(459 |
) |
|
|
(474 |
) |
|
|
|
|
|
|
|
Net income
attributable to common stockholders |
$ |
10,972 |
|
|
$ |
4,623 |
|
|
|
|
|
|
|
|
Earnings
per common share, basic |
$ |
0.89 |
|
|
$ |
0.68 |
|
|
|
|
|
|
|
|
Earnings
per common share, diluted |
$ |
0.29 |
|
|
$ |
0.55 |
|
|
|
|
|
|
|
|
Weighted
average number of common shares, basic |
|
12,279,676 |
|
|
|
6,815,828 |
|
|
|
|
|
|
|
|
Weighted
average number of common shares, diluted |
|
39,080,005 |
|
|
|
8,763,703 |
|
|
|
|
|
|
|
|
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
Net
income |
$ |
11,431 |
|
|
$ |
15,695 |
|
|
|
|
|
|
|
|
Comprehensive income |
$ |
11,431 |
|
|
$ |
15,695 |
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEET DATA |
(Expressed in
thousands of US Dollars) |
|
|
March 31, 2024 |
|
|
December 31, 2023* |
ASSETS |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
$ |
60,750 |
|
|
$ |
68,267 |
|
Advances for vessels under construction and other vessels'
costs |
|
33,812 |
|
|
|
11,303 |
|
Vessels, net |
|
198,937 |
|
|
|
202,108 |
|
Other fixed assets, net |
|
41 |
|
|
|
44 |
|
Other assets |
|
9,726 |
|
|
|
14,544 |
|
Total assets |
$ |
303,266 |
|
|
$ |
296,266 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term bank debt, net of unamortized deferred financing
costs |
$ |
53,030 |
|
|
$ |
54,886 |
|
Other liabilities |
|
6,080 |
|
|
|
8,196 |
|
Total stockholders' equity |
|
244,156 |
|
|
|
233,184 |
|
Total liabilities and stockholders' equity |
$ |
303,266 |
|
|
$ |
296,266 |
|
|
|
|
|
|
|
|
|
* The balance
sheet data as of December 31, 2023 has been derived from the
audited consolidated financial statements at that date. |
|
|
OTHER
FINANCIAL DATA |
|
|
|
|
|
|
|
|
For the three months ended March 31, |
|
|
2024 |
|
|
2023 |
|
|
(unaudited) |
|
|
(unaudited) |
Net Cash provided by Operating Activities |
$ |
17,340 |
|
|
$ |
18,679 |
|
Net Cash used in Investing Activities |
$ |
(22,515 |
) |
|
$ |
(378 |
) |
Net Cash (used in) / provided by Financing Activities |
$ |
(2,342 |
) |
|
$ |
8,179 |
|
|
|
|
|
|
|
|
|
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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