Performance Shipping Inc. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2022 August 04 2022 - 09:16AM GlobeNewswire Inc.
Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, today reported net income from continuing and discontinued operations of $3.9 million and net income from continuing and discontinued operations attributable to common stockholders of $3.7 million for the second quarter of 2022, compared to a net loss from continuing and discontinued operations and a net loss from continuing and discontinued operations attributable to common stockholders of $2.6 million for the same period in 2021. Revenue from continuing and discontinued operations was $16.7 million ($11.3 million net of voyage expenses) for the second quarter of 2022, compared to $9.1 million ($4 million net of voyage expenses) for the same period in 2021. 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 second quarter of 2022 was $24,921, compared with an average rate of $9,728 for the same period in 2021.
Net income from continuing and discontinued operations for the six-month period ended June 30, 2022, amounted to $1.8 million, compared to a net loss from continuing and discontinued operations of $5.5 million for the six-month period ended June 30, 2021. Revenue from continuing and discontinued operations was $25.3 million ($16.5 million net of voyage expenses) for the six-month period ended June 30, 2022, compared to $17.5 million ($7.5 million net of voyage expenses) for the six-month period ended June 30, 2021.
As of August 4, 2022, the Company’s number of common shares issued and outstanding was 27,395,030.
On June 21, 2022, the Company announced its agreement to acquire its sixth Aframax tanker, which was delivered on July 5, 2022. The acquisition cost of approximately $27.6 million was financed with cash on hand and the incurrence of debt through a new senior secured facility that the Company entered into prior to delivery of the vessel.
On July 27, 2022, the Company commenced a time charter contract with Teekay Chartering Limited for one of its Aframax tanker vessels, M/T Blue Moon. The gross charter rate is $23,000 per day for a period of 24 months +/-30 days at the option of the Charterer. The new charter is expected to generate approximately US$16.8 million in gross revenue.
Commenting on the results of the second quarter of 2022 and subsequent developments, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“During the second quarter of 2022, we saw a continuation in the tanker market recovery, supported by strong demand for crude oil and significant changes in trading patterns as a result of sanctions on Russian crude oil exports leading to longer-haul tanker voyages. We took advantage of the improved tanker charter rate environment, resulting in fleetwide average time charter equivalent rates of $24,921 per day during the second quarter of 2022, revenues of $16.7 million, and net income of $3.9 million from our fleet operations.
“We believe that the encouraging freight rate developments since early March 2022 indicate a promising trend towards a sustainable charter rate recovery. Having taken delivery of our sixth Aframax tanker on July 5th, we are now well positioned to take advantage of the firming charter rate environment with our expanded fleet operations. We did so by entering into a two-year contract for the M/T Blue Moon with Teekay Chartering Limited at $23,000 per day. We expect to operate our remaining vessels in the spot market for the foreseeable future, where voyage charter rates for Aframax tankers are currently quoted in excess of $35,000 per day.
“We intend to complete the special survey and the installation of the ballast water treatment system (BWTS) on the M/T P. Kikuma during the fourth quarter of this year, and we expect full utilization of our expanded and 100% BWTS-fitted tanker fleet going forward, with no scheduled special surveys for 2023.
“As a result of our financial results, and in accordance with our dividend policy, we will not declare a dividend for our Q2 2022 results from operations.”
Tanker Market Update for the Second Quarter of 2022:
Tanker fleet supply was 663.0 million dwt, up 0.7% from 658.2 million dwt from the previous quarter and up 1.7% from Q2 2021 levels of 651.7 million dwt. Tanker demand in billion tonne-miles is projected to increase by a firm 6.7% in 2022, supported by the ongoing recovery of global oil demand along with a shift in trading patterns to longer-haul routes emerging due to the Russia-Ukraine war. Tanker fleet supply in deadweight terms is estimated to grow by a moderate 2.6% in 2022. Crude oil tanker fleet utilization was estimated at 80.0%, up from 78.0% in the previous quarter and up from 77.4% in Q2 2021. Newbuilding tanker contracting was just 1.4 million dwt in the second quarter, resulting in a tanker orderbook to fleet ratio of 5.2%, the lowest level seen in the past 26 years. Daily spot charter rates for Aframax tankers averaged $46,438, up 43.9% from the previous quarter average of $32,266 and up 507.1% from the Q2 2021 average of $7,648. The value of a 10-year-old Aframax tanker at the end of the second quarter was $35.0 million, up 27.3% from $27.5 million in the previous quarter, and up 34.6% from $26.0 million in Q2 2021. The number of tankers used for floating storage (excluding dedicated storage) was 165 (23.3 million dwt), up 13.8% from 145 (21.2 million dwt) from the previous quarter and up 9.3% from Q2 2021 levels of 151 (22.8 million dwt). Global oil consumption was 98.7 million bpd, down 0.3% from the previous quarter level of 98.9 million bpd, and up 2.5% from Q2 2021 levels of 96.3 million bpd. Global oil production was 99.3 million bpd, up 0.4% from the previous quarter level of 98.8 million bpd and up 4.8% from Q2 2021 levels of 94.7 million bpd. OECD commercial inventories were 2,677.6 million barrels, up 2.3% from the previous quarter level of 2,616.3 million barrels, and down 6.5% from Q2 2021 levels of 2,864.4 million barrels. During the global gradual recovery from COVID-19, we continue to take proactive measures to ensure the health and wellness of our crew and onshore employees while endeavoring to maintain effective business continuity and uninterrupted service to our customers. While the situation is improving, we continue to incur increased costs as a result of the restrictions imposed in various jurisdictions creating delays and additional complexities with respect to port calls and crew rotations. 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 (Continuing and Discontinued Operations1)
For the three months ended June 30, For the six months ended June 30, 2022 2021 2022 2021 (unaudited) (unaudited) (unaudited) (unaudited) STATEMENT OF OPERATIONS DATA (in thousands of US Dollars): Revenue $ 16,707 $ 9,116 $ 25,275 $ 17,513 Voyage expenses 5,368 5,079 8,748 10,016 Vessel operating expenses 2,950 2,901 6,277 5,779 Net income/ (loss) from continuing and discontinued operations 3,870 (2,646 ) 1,790 (5,500 ) Net income / (loss) attributable to common stockholders 3,662 (2,646 ) (7,809 ) (5,500 ) Earnings/(loss) per common share, basic 0.70 (0.53 ) (1.82 ) (1.10 ) Earnings/(loss) per common share, diluted 0.10 (0.53 ) (1.82 ) (1.10 )
FLEET DATA Average number of vessels 5 5 5 5 Number of vessels 5 5 5 5 Ownership days 455 455 905 905 Available days 455 415 875 865 Operating days (2) 455 332 855 705 Fleet utilization 100 % 80 % 98 % 82 %
AVERAGE DAILY RESULTS Time charter equivalent (TCE) rate (3) $ 24,921 $ 9,728 $ 18,888 $ 8,667 Daily vessel operating expenses (4) $ 6,484 $ 6,376 $ 6,936 $ 6,386 (1) Discontinued Operations refer to our container vessels segment that we disposed of in 2020.
(2) 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.
(3) 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).
(4) 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 ofAugust 4, 2022) Performance Shipping Inc.’s fleet is employed as follows:
Vessel Year of Build Capacity Builder Charter Type Aframax Tanker Vessels 1 BLUE MOON 2011 104,623 DWT Sumitomo Heavy Industries Marine & Engineering Co., LTD. Time charter 2 BRIOLETTE 2011 104,588 DWT Sumitomo Heavy Industries Marine & Engineering Co., LTD. Pool 3 P. FOS 2007 115,577 DWT Sasebo Heavy Industries Co. Ltd Pool 4 P. KIKUMA 2007 115,915 DWT Samsung Heavy Industries Co Ltd. Spot 5 P. YANBU 2011 105,391 DWT Sumitomo Heavy Industries Marine & Engineering Co., LTD. Pool 6 P. SOPHIA 2009 105,071 DWT Hyundai Heavy Industries Co., LTD. Spot About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of Aframax tankers. The Company's current fleet is employed on spot voyages, through pool arrangements and on time charters.
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