Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a
global shipping company specializing in the ownership of tanker
vessels, today reported record net income of $18.4 million and net
income attributable to common stockholders of $17.9 million for the
second quarter of 2023. The 2023 second quarter results compared to
a net income of $3.9 million and net income attributable to common
stockholders of $3.7 million for the same period in 2022. Earnings
per share, basic and diluted, for the second quarter of 2023 were
$1.53 and $0.46, respectively.
Revenue was $31.5 million ($30.5 million net of
voyage expenses) for the second quarter of 2023, compared to $16.7
million ($11.3 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 (a non-GAAP
financial measure) rate for the second quarter of 2023 was $41,868,
compared with an average rate of $24,921 for the same period in
2022. During the second quarter of 2023, net cash provided by
operating activities was $22.1 million, compared with net cash
provided by operating activities of $2.3 million for the second
quarter of 2022.
Net income for the six months ended June 30,
2023, amounted to $34.1 million, compared to a net income of $1.8
million for the six months ended June 30, 2022. Net income
attributable to common stockholders for the six months ended June
30, 2023, amounted to $22.5 million, and resulted in earnings per
share, basic and diluted, of $2.43 and $1.00, respectively. Net
loss attributable to common stockholders for the six months ended
June 30, 2022, amounted to $7.8 million, and resulted in a loss per
common share, basic and diluted, of $27.29. Net income attributable
to common stockholders for the six-month periods ended June 30,
2023 and 2022, has been adjusted 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, EBITDA or performance overall.
Commenting on the results of the second quarter
of 2023, Andreas Michalopoulos, the Company’s Chief Executive
Officer, stated:
“During the second quarter of 2023, tanker
market fundamentals remained firm and our Company achieved a
fleetwide average time charter equivalent rate of $41,868 per day.
As a result, we generated record revenues of $31.5 million and
record net income of $18.4 million during the quarter, representing
increases of 88% and 375%, respectively, from the equivalent
quarter in 2022. Our cash balance at the end of the quarter was
approximately $70.7 million, corresponding to a 78% increase from
the 2022 year-end cash balance and representing a multiple of 7.4x
our current market capitalization. Our basic earnings per share for
the quarter and the first six months ended June 30, 2023 were $1.53
and $2.43, respectively, compared to our closing share price on
July 26, 2023 of $0.84.
“We believe that the solid tanker market
environment will be sustainable through 2023 and beyond. Our fleet
deployment during the previous fiscal year has well positioned our
Company to capitalize on the firm freight rate environment through
the operation of our renewed and expanded fleet, currently
consisting of eight younger and high specification Aframax tankers.
Specifically, five of our tankers currently 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 $52.3 million for the
remainder of their charter periods. Our remaining vessels operate
under pool arrangements with reputable counterparties. This
strategy supplements our already secured revenue backlog and
enhances our current profitability by capitalizing on the robust
Aframax spot rates. To further solidify our market position, 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 reflects the Company’s confidence in
sustainable market fundamentals and higher asset values going
forward.
“Despite what we consider to be strong market
conditions in the sector, we believe that the value of our common
shares remains extremely low when compared with our earnings and
cash on hand. As previously announced, in response to our recent
share price development, we have put in place a $2.0 million share
buyback program, pursuant to which we have already repurchased
1,806,916 shares of common stock to date at an average price of
$0.83 per share, of which approximately 1.7 million shares were
repurchased during the second quarter. As we strongly believe that
the program is in the best interests of both our Company and our
shareholders, we will continue to take advantage of our strong
balance sheet to invest opportunistically in our common stock
through share buybacks under appropriate market conditions.”
Tanker Market Update for the Second
Quarter of 2023:
- Tanker fleet supply was 684.6 million dwt, up 0.5% from 681.4
million dwt from the previous quarter and up 3.0% from Q2 2022
levels of 665.0 million dwt.
- Tanker demand in billion tonne-miles is projected to increase
by a firm 7.8% in 2023, supported by both strong Chinese demand for
crude oil imports as well as by significant trade pattern shifts
towards longer-haul distances, evolving primarily as a result of
the conflict between Russia and Ukraine.
- Tanker fleet supply in deadweight terms is estimated to grow by
a moderate 2.1% in 2023.
- Crude oil tanker fleet utilization was estimated at 85.8%, down
from 87.3% in the previous quarter and up from 79.0% in Q2
2022.
- Newbuilding tanker contracting was just 8.8 million dwt in the
second quarter, resulting in a tanker orderbook-to-fleet ratio of
4.8%, close to the lowest level observed the past 28 years.
- Daily spot charter rates for Aframax tankers averaged $59,855,
down 24.0% from the previous quarter average of $78,764 and up
29.0% from the Q2 2022 average of $46,438.
- The value of a 10-year-old Aframax tanker at the end of the
second quarter was $52.0 million, up 4.0% from $50.0 million in the
previous quarter, and up 48.6% from $35.0 million in Q2 2022.
- The number of tankers used for floating storage (excluding
dedicated storage) was 148 (21.4 million dwt), up 26.5% from 117
(19.0 million dwt) in the previous quarter and down 17.8% from Q2
2022 levels of 180 (26.8 million dwt).
- Global oil consumption was 101.0 million bpd, up 0.9% from the
previous quarter level of 100.0 million bpd, and up 2.1% from Q2
2022 levels of 98.8 million bpd.
- Global oil production was 101.6 million bpd, up 0.7% from the
previous quarter level of 100.9 million bpd and up 2.7% from Q2
2022 levels of 98.9 million bpd.
- OECD commercial inventories were 2,838 million barrels, up 1.1%
from the previous quarter level of 2,806 million barrels, and up
6.9% from Q2 2022 levels of 2,656 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 June 30, |
|
For the six months ended June 30, |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
STATEMENT
OF OPERATIONS DATA: |
|
Revenue |
$ |
31,456 |
|
$ |
16,707 |
|
$ |
60,984 |
|
$ |
25,275 |
|
|
Voyage expenses |
|
976 |
|
|
5,368 |
|
|
2,515 |
|
|
8,748 |
|
|
Vessel operating expenses |
|
5,189 |
|
|
2,950 |
|
|
10,332 |
|
|
6,277 |
|
|
Net income |
|
18,388 |
|
|
3,870 |
|
|
34,083 |
|
|
1,790 |
|
|
Net income / (loss)
attributable to common stockholders |
|
17,909 |
|
|
3,662 |
|
|
22,533 |
|
|
(7,809 |
) |
|
Earnings / (Loss) per common
share, basic |
|
1.53 |
|
|
10.51 |
|
|
2.43 |
|
|
(27.29 |
) |
|
Earnings / (Loss) per common
share, diluted |
|
0.46 |
|
|
1.53 |
|
|
1.00 |
|
|
(27.29 |
) |
FLEET
DATA |
|
Average number of vessels |
|
8 |
|
|
5 |
|
|
8 |
|
|
5 |
|
|
Number of vessels |
|
8 |
|
|
5 |
|
|
8 |
|
|
5 |
|
|
Ownership days |
|
728 |
|
|
455 |
|
|
1,448 |
|
|
905 |
|
|
Available days |
|
728 |
|
|
455 |
|
|
1,408 |
|
|
875 |
|
|
Operating days (1) |
|
713 |
|
|
455 |
|
|
1,390 |
|
|
855 |
|
|
Fleet utilization |
|
98 |
% |
|
100 |
% |
|
99 |
% |
|
98 |
% |
AVERAGE
DAILY RESULTS |
|
Time charter equivalent (TCE)
rate (2) |
$ |
41,868 |
|
$ |
24,921 |
|
$ |
41,526 |
|
$ |
18,888 |
|
|
Daily vessel operating
expenses (3) |
$ |
7,128 |
|
$ |
6,484 |
|
$ |
7,135 |
|
$ |
6,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_________
(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 July 27, 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 June 30, |
|
For the six months ended June 30, |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
REVENUE: |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
31,456 |
|
$ |
16,707 |
|
$ |
60,984 |
|
$ |
25,275 |
|
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
976 |
|
|
5,368 |
|
|
2,515 |
|
|
8,748 |
|
|
Vessel operating expenses |
|
5,189 |
|
|
2,950 |
|
|
10,332 |
|
|
6,277 |
|
|
Depreciation and amortization
of deferred charges |
|
3,776 |
|
|
2,057 |
|
|
7,465 |
|
|
4,070 |
|
|
General and administrative
expenses |
|
1,752 |
|
|
1,781 |
|
|
3,415 |
|
|
3,289 |
|
|
(Reversal) / Provision for
credit losses and write offs |
|
(39 |
) |
|
55 |
|
|
(55 |
) |
|
77 |
|
|
Foreign currency losses /
(gains) |
|
7 |
|
|
(7 |
) |
|
37 |
|
|
(53 |
) |
|
Operating
income |
$ |
19,795 |
|
$ |
4,503 |
|
$ |
37,275 |
|
$ |
2,867 |
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME / (EXPENSES): |
|
|
|
|
|
|
|
|
|
Interest and finance
costs |
|
(2,279 |
) |
|
(645 |
) |
|
(5,364 |
) |
|
(1,090 |
) |
|
Interest income |
|
858 |
|
|
12 |
|
|
1,206 |
|
|
13 |
|
|
Changes in fair value of
warrants' liability |
|
14 |
|
|
- |
|
|
966 |
|
|
- |
|
|
Total other expenses,
net |
$ |
(1,407 |
) |
$ |
(633 |
) |
$ |
(3,192 |
) |
$ |
(1,077 |
) |
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
18,388 |
|
$ |
3,870 |
|
$ |
34,083 |
|
$ |
1,790 |
|
|
|
|
|
|
|
|
|
|
|
Income allocated
to participating securities |
|
(1 |
) |
|
(7 |
) |
|
(1 |
) |
|
- |
|
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 |
|
(478 |
) |
|
(201 |
) |
|
(951 |
) |
|
(328 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income
/ (loss) attributable to common stockholders |
$ |
17,909 |
|
$ |
3,662 |
|
$ |
22,533 |
|
$ |
(7,809 |
) |
|
|
|
|
|
|
|
|
|
|
Earnings/
(Loss) per common share, basic |
$ |
1.53 |
|
$ |
10.51 |
|
$ |
2.43 |
|
$ |
(27.29 |
) |
|
|
|
|
|
|
|
|
|
|
Earnings /
(Loss) per common share, diluted |
$ |
0.46 |
|
$ |
1.53 |
|
$ |
1.00 |
|
$ |
(27.29 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares, basic |
|
11,725,556 |
|
|
348,572 |
|
|
9,284,254 |
|
|
286,155 |
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares, diluted |
|
40,008,139 |
|
|
2,660,547 |
|
|
32,366,729 |
|
|
286,155 |
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, |
|
For the six months ended June 30, |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
18,388 |
|
$ |
3,870 |
|
$ |
34,083 |
|
$ |
1,790 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
$ |
18,388 |
|
$ |
3,870 |
|
$ |
34,083 |
|
$ |
1,790 |
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEET DATA |
(Expressed in
thousands of US Dollars) |
|
|
June 30, 2023 |
|
December 31, 2022* |
ASSETS |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
$ |
70,735 |
|
$ |
39,726 |
|
Advances for vessel under construction and other vessels'
costs |
|
10,911 |
|
|
- |
|
Vessels, net |
|
230,434 |
|
|
236,607 |
|
Other fixed assets, net |
|
57 |
|
|
72 |
|
Other assets |
|
13,491 |
|
|
16,574 |
|
Total assets |
$ |
325,628 |
|
$ |
292,979 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term bank debt, net of unamortized deferred financing
costs |
$ |
119,305 |
|
$ |
127,675 |
|
Other liabilities |
|
7,284 |
|
|
9,599 |
|
Total stockholders' equity |
|
199,039 |
|
|
155,705 |
|
Total liabilities and stockholders' equity |
$ |
325,628 |
|
$ |
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 June 30, |
|
For the six months ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
Net Cash provided by / (used in) Operating Activities |
$ |
22,130 |
|
$ |
2,269 |
|
$ |
40,809 |
|
$ |
(1,594 |
) |
Net Cash used in Investing Activities |
$ |
(11,133 |
) |
$ |
(2,858 |
) |
$ |
(11,511 |
) |
$ |
(4,019 |
) |
Net Cash (used in) / provided by Financing Activities |
$ |
(6,468 |
) |
$ |
5,673 |
|
$ |
1,711 |
|
$ |
9,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
Performance Shipping (NASDAQ:PSHG)
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