Performance Shipping Inc. Reports Financial Results for the Third Quarter and Nine-Months Ended September 30, 2024
ATHENS, Greece, Nov. 07, 2024 (GLOBE NEWSWIRE) -- 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 $12.4 million and net income attributable to common stockholders of $12.0 million for the third quarter ended September 30, 2024. These results are compared to a net income of $10.4 million and net income attributable to common stockholders of $9.9 million for the same period in 2023. Earnings per share, basic and diluted, for the third quarter of 2024 were $0.96 and $0.32, respectively.
Revenue was $22.9 million ($22.1 million net of voyage expenses) for the third quarter of 2024, compared to $24.1 million ($23.4 million net of voyage expenses) for the same period in 2023. This decrease was attributable to the decrease in the ownership days following the sale of the vessel P. Kikuma in December 2023, partially offset by the increase in time-charter equivalent rates ("TCE rates") realized during the quarter. Fleetwide, the average TCE rate for the third quarter of 2024 was $34,307, compared with an average rate of $31,787 for the same period in 2023. During the third quarter of 2024, net cash provided by operating activities was $16.1 million, compared with net cash provided by operating activities of $17.9 million for the third quarter of 2023.
Net income for the nine months ended September 30, 2024, amounted to $34.0 million, compared to a net income of $44.5 million for the nine months ended September 30, 2023. Net income attributable to common stockholders for the nine months ended September 30, 2024, amounted to $32.7 million, and resulted in earnings per share, basic and diluted, of $2.65 and $0.87, respectively. Net income attributable to common stockholders for the nine months ended September 30, 2023, amounted to $32.4 million, and resulted in earnings per common share, basic and diluted, of $3.26 and $1.25, respectively. The difference between net income and net income attributable to common stockholders for the nine-month period ended September 30, 2023, mainly reflects aggregate non-cash items of $10.6 million, as per US GAAP accounting standards, which did not affect the Company's operating cash flows.
Commenting on the results of the third quarter of 2024, Andreas Michalopoulos, the Company's Chief Executive Officer, stated:
"We are pleased with our solid third-quarter 2024 performance, which reflected an increase in revenue, net income, and basic and diluted EPS compared to the prior quarter. During this quarter, tanker charter rates maintained their average year-to-date levels, supported by constrained supply growth and increased tonne-mile demand resulting from longer haul tanker voyages due to Red Sea disruptions and the Atlantic–Asia trade growth. Going forward, we believe that our balanced fleet deployment strategy, combined with our exposure to the spot market through pool arrangements, will provide steady cash flows and opportunities to capitalize on the solid market fundamentals of our sector.
"Given our pipeline, we anticipate that we will be able to redeploy our vessels at attractive charter rates during the seasonally strong fall and winter period. At the same time, we remain focused on employing our opening vessels and continuing to secure delivery financing for our newbuilding vessels.
"Looking ahead, our newbuild program is supported by a strategic partnership with a top-tier charterer and we maintain close relationships with international shipping leaders. At the same time, our existing fleet continues to generate strong cash flows. We are executing a clear strategy and believe we have a strong foundation for continued growth and shareholder value creation."
Corporate Developments
Update on Outstanding Shares and Warrants
As of November 6, 2024, the Company had outstanding 12,432,158 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 4,097,000 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 1,423,912 shares of its Series C Convertible Cumulative Redeemable Perpetual Preferred Stock outstanding.
Tanker Market Update for the Third Quarter of 2024:
Tanker fleet supply was 693.6 million dwt, up 0.2% from 692.2 million dwt from the previous quarter and up 0.8% from Q3 2023 levels of 688.1 million dwt.
The tanker sector is heading towards 2025 on a positive note, with tonne-mile demand expected to grow by 4.1% in 2024. Firm volume growth observed in shipments from the Americas towards Asia, coupled with continuous support arising from Red Sea-related trade flow shifts, further support tonne-mile demand.
Tanker fleet supply in deadweight terms is estimated to grow by just 0.8% in 2024 and by a moderate 2.4% in 2025.
Tanker fleet utilization is expected to average 85.8% in 2024, as compared to an average of 85.2% in 2023. Analysts expect that tanker fleet utilization will remain near 86.0% in 2025.
Newbuilding tanker contracting was 4.8 million dwt in the third quarter, resulting in a tanker orderbook-to-fleet ratio of 12.9%.
Daily spot charter rates for Aframax tankers averaged $31,724 down 38.0% from the previous quarter average of $51,140 and up 15.7% from the Q3 2023 average of $27,409.
The value of a 10-year-old Aframax tanker at the end of the third quarter was $59.0 million, down 1.7% from $60.0 million in the previous quarter, and up 15.7% from $51.0 million in Q3 2023.
The number of tankers used for floating storage (excluding dedicated storage) stood at 114 (13.3 million dwt) in the third quarter, unchanged from 114 (14.2 million dwt) at the end of the previous quarter and down 10.9% from 128 (17.0 million dwt) in Q3 2023.
Global oil consumption was 103.3 million bpd, up 0.1% from the previous quarter level of 103.1 million bpd, and up 0.7% from Q3 2023 levels of 102.6 million bpd.
Global oil production was 103.3 million bpd, up 0.4% from the previous quarter level of 102.8 million bpd and up 1.4% from Q3 2023 levels of 101.8 million bpd.
OECD commercial inventories were 2,811 million barrels, down 0.9% from the previous quarter level of 2,836 million barrels, and down 0.2% from Q3 2023 levels of 2,816 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 September 30,
For the nine months ended September 30,
2024
2023
2024
2023
(unaudited)
(unaudited)
(unaudited)
(unaudited)
STATEMENT OF OPERATIONS DATA:
Revenue
$
22,889
$
24,114
$
65,768
$
85,098
Voyage expenses
795
719
2,378
3,234
Vessel operating expenses
4,777
5,524
14,700
15,855
Net income
12,411
10,369
34,027
44,452
Net income attributable to common stockholders
11,953
9,891
32,652
32,425
Earnings per common share, basic
0.96
0.88
2.65
3.26
Earnings per common share, diluted
0.32
0.27
0.87
1.25
FLEET DATA
Average number of vessels
7.0
8.0
7.0
8.0
Number of vessels
7.0
8.0
7.0
8.0
Ownership days
644
736
1,918
2,184
Available days
644
736
1,918
2,144
Operating days (1)
644
730
1,902
2,120
Fleet utilization
100.0
%
99.2
%
99.2
%
98.9
%
AVERAGE DAILY RESULTS
Time charter equivalent (TCE) rate (2)
$
34,307
$
31,787
$
33,050
$
38,183
Daily vessel operating expenses (3)
$
7,418
$
7,505
$
7,664
$
7,260
_________
(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 6, 2024)
Performance Shipping Inc.'s fleet is employed as follows:
Vessel
Year of Build
Capacity
Builder
Vessel Type
Charter Type
Notes
Operating Aframax Tanker Vessels
1
BLUE MOON
2011
104,623 DWT
Sumitomo Heavy Industries Marine & Engineering Co., LTD.
Crude
Pool
2
BRIOLETTE
2011
104,588 DWT
Sumitomo Heavy Industries Marine & Engineering Co., LTD.
