Performance Shipping Inc. Reports Record Fourth Quarter And Full Year 2022 Net Income Of $23.8 Million And $36.3 Million, Respectively
Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, today reported a record quarterly net income from continuing and discontinued operations of $23.8 million and net income from continuing and discontinued operations attributable to common stockholders of $9.4 million for the fourth quarter of 2022. This compared to a net loss from continuing and discontinued operations and net loss from continuing and discontinued operations attributable to common stockholders of $2.1 million for the same period in 2021. Earnings per share, basic and diluted, for the fourth quarter of 2022 was $2.31 and $1.18, respectively, while loss per share for the fourth quarter of 2021 was $6.11.
Revenue from continuing and discontinued operations was $27.8 million ($25.0 million net of voyage expenses) for the fourth quarter of 2022, compared to $9.6 million ($5.4 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 fourth quarter of 2022 was $40,469, compared with an average rate of $13,370 for the same period in 2021. During the fourth quarter of 2022, net cash provided by operating activities of continuing and discontinued operations was $23.7 million, compared with net cash used in operating activities of $1.8 million for the fourth quarter of 2021.
Net income from continuing and discontinued operations for the year ended December 31, 2022 amounted to $36.3 million, compared to a net loss from continuing and discontinued operations of $9.7 million for the year ended December 31, 2021. Net income from continuing and discontinued operations attributable to common stockholders for the year ended December 31, 2022 amounted to $12.0 million, and resulted in earnings per share, basic and diluted, of $6.49 and $3.02, respectively. Net loss from continuing and discontinued operations attributable to common stockholders for the year ended December 31, 2021 amounted to $9.7 million and resulted in a loss per common share of $28.97.
During the fourth quarter of 2022, the Company issued and sold 140,379 shares of its common stock under its ATM Agreement with Virtu Americas LLC, with an average price per share of $3.59, raising gross proceeds of approximately $0.5 million. As of December 31, 2022, the Company had 4,187,588 common shares issued and outstanding.
Commenting on the results of the fourth quarter of 2022, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“During the fourth quarter of 2022, tanker market fundamentals continued to improve, supported by new trade patterns emerging in response to continuing sanctions on Russian crude oil exports and shifts in the location of new refinery capacity leading to longer haul tanker voyages. We took advantage of the firm tanker charter rate environment, resulting in fleetwide average time charter equivalent rates of $40,469 and $29,579 per day during the fourth quarter and twelve months of 2022, respectively. As a result, we generated annual revenues of $75.2 million and annual net income from continuing operations of $36.3 million, a 106% and a 474% increase from the previous fiscal year, respectively. Our net income from continuing operations during the fourth quarter alone was $23.8 million, indicating the tightening tanker market conditions during the fourth quarter. Our cash balance at the end of the year was approximately $40 million representing 3.2x our current market capitalization. Our basic earnings per share for the last fiscal year compared to our current share price represent a price-to-earnings ratio of approximately 0.4x.
“We believe that the tanker market developments since the beginning of 2022 are sustainable through 2023 and beyond. During 2022 we expanded and renewed our fleet with timely acquisitions at values significantly below current levels and now own eight younger high-specification Aframax tankers with an average age of 12.1 years. 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. Our secured revenue backlog of approximately $85 million is supplemented by the operation of our remaining vessels under pool arrangements with reputable counterparties earning healthy voyage charter rates, indicative of the solid freight rate environment.”
Tanker Market Update for the fourth quarter of 2022:
Tanker fleet supply was 675.3 million dwt, up 0.7% from 670.8 million dwt from the previous quarter and up 3.5% from Q4 2021 levels of 652.6 million dwt.Tanker demand in billion tonne-miles is projected to increase by a firm 7.6% in 2023, supported by new trade patterns established as a result of European sanctions on Russian crude oil. As Europe uses alternative sources of crude oil and Russia sells to alternative buyers, longer-haul trade routes are emerging, boosting tonne-mile demand.
Tanker fleet supply in deadweight terms is estimated to grow by a moderate 1.4% in 2023.
Crude oil tanker fleet utilization was estimated at 80.0%, up from 79.5% in the previous quarter and up from 79.0% in Q4 2021.
Newbuilding tanker contracting was just 3.0 million dwt in the fourth quarter, resulting in a tanker orderbook-to-fleet ratio of 4.3%, the lowest level of the past 27 years.
Daily spot charter rates for Aframax tankers averaged $90,991, up 73.0% from the previous quarter average of $52,610 and up 720.3% from the Q4 2021 average of $11,093.
The value of a 10-year-old Aframax tanker at the end of the fourth quarter was $45.0 million, up 7.1% from $42.0 million in the previous quarter, and up 66.7% from $27.0 million in Q4 2021.
The number of tankers used for floating storage (excluding dedicated storage) was 148 (23.6 million dwt), down 17.8% from 180 (26.1 million dwt) in the previous quarter and down 15.4% from Q4 2021 levels of 175 (27.4 million dwt).
Global oil consumption was 99.7 million bpd, down 0.7% from the previous quarter level of 100.4 million bpd, and up 0.4% from Q4 2021 levels of 99.3 million bpd.
Global oil production was 101.4 million bpd, up 0.6% from the previous quarter level of 100.8 million bpd and up 3.1% from Q4 2021 levels of 98.3 million bpd.OECD commercial inventories were 2,782.7 million barrels, up 1.7% from the previous quarter level of 2,735.2 million barrels, and up 5.4% from Q4 2021 levels of 2,640.2 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.
Performance Shipping Inc. Announces New Loan Facility With Alpha Bank S.A. to Partially Finance the Acquisition of M/T P. Long Beach
Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, announced it has entered into an agreement for a secured term loan facility of up to approximately US$22,000,000.00 with Alpha Bank S.A. (the “Facility”) through a separate wholly-owned subsidiary of the Company. Proceeds from this Facility will be used to finance up to about 50% of the purchase price of the previously announced 2013 built LR2 tanker vessel the Company has agreed to acquire, the M/T Fos Hamilton, to be renamed P. Long Beach.
The Facility will carry an interest rate of SOFR plus 2.35% per annum and will be repayable in twenty (20) consecutive quarterly installments of US$550,000.00 each, and a balloon installment of US$11,000,000.00 payable concurrent with the twentieth quarterly installment. The Facility is secured by, among other things, a guarantee of the Company and a first priority mortgage over the M/T P. Long Beach.
Commenting on this Facility, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“Our entry into this agreement follows our announced acceptance of the commitment letter from Alpha Bank on November 29, 2022 and is indicative of the continued confidence in our Company demonstrated by our new lender with the use of another collateral vessel to secure a new loan facility maturing in late 2027 and offered at competitive terms. As previously announced, we expect to drawdown this Facility upon delivery of our eighth vessel, the M/T P. Long Beach, expected to take place by mid-December.”
Performance Shipping Inc. Announces Commitment Letter from Alpha Bank
Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, today announced that it has accepted a commitment letter whereby it intends to enter into an agreement for a new term loan facility of up to US$22,000,000.00 with Alpha Bank A.E. (the “Facility”) through a separate wholly-owned subsidiary of the Company. This Facility is subject to the completion of customary closing conditions and the execution of a final loan agreement by the Company and its lenders. Proceeds from this Facility will be used to finance up to about 50% of the purchase price of the previously announced 2013 built LR2 tanker vessel the Company has agreed to acquire, the M/T Fos Hamilton, to be renamed P. Long Beach. This Facility shall bear interest at the rate of SOFR plus 2.35% per annum.
The Facility will be repayable in twenty (20) consecutive quarterly installments of US$550,000.00 each, and concurrent with the twentieth quarterly installment, the Company will owe a balloon payment of US$11,000,000.00.
Commenting on this commitment letter, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“We are pleased to announce that we are expanding our relationship with Alpha Bank, established with the first loan facility of US$18.25 million secured by the M/T P. Aliki. This commitment letter is indicative of the continued confidence in our Company demonstrated by our new lender with another long-term loan facility at attractive terms. We expect to drawdown this Facility upon delivery of our eighth vessel, the LR2 Aframax tanker, M/T P. Long Beach in December 2022. With a recently expanded and renewed fleet, we look forward to further enhancing our fixed revenues of approximately US$85 million with lucrative spot charter rates secured mainly through our pool agreements thereby capturing the strong prevailing market conditions and generating significant cash flow.”
Performance Shipping inc. Announces the sale of 2007 built m/t p. Fos for US$34 million
Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, announced that it has signed, through a separate wholly-owned subsidiary, a Memorandum of Agreement to sell to an unaffiliated third party the 2007-built Aframax tanker vessel “M/T P. Fos”, with delivery to the buyer during November 2022, for a gross sale price of US$34.0 million.
Commenting on the sale, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“Aframax tanker values have appreciated significantly during this year, and although the tanker market continues to enjoy strong fundamentals and prospects, we believe that the sale price we concluded for M/T P. Fos renders the disposal tactically advantageous and financially attractive. The sale is part of our fleet renewal process as we expect to use the net cash proceeds from this disposition estimated at US$25 million, along with a marginal level of new debt, to acquire a younger Aframax tanker with possibly higher specifications. With this sale, we also reduce the average age and increase the competitiveness of our fleet. These actions, when combined with the deliveries of our newly acquired tankers, M/T P. Aliki and M/T P. Monterey, anticipated to take place during the next two months, will position our Company to take advantage of the promising charter rate environment and generate strong cash flow going forward.”
Performance Shipping Inc. Commences Offer to Exchange Up to 4,066,181 Common Shares for Shares of Series B Convertible Cumulative Perpetual Preferred Stock
Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, announced the commencement of an offer to exchange up to 4,066,181 of its currently issued and outstanding common shares of the Company, par value $0.01 per share (the “Common Shares”), for newly issued shares of the Company’s Series B Convertible Cumulative Perpetual Preferred Stock, par value $0.01 and liquidation preference $25.00 (the “Series B Preferred Shares”) at a ratio of 0.28 Series B Preferred Shares for each Common Share. The exchange offer will expire at the end of the day, 5:00 P.M., New York City Time, on January 21, 2022, unless extended or withdrawn.
The exchange offer is being made pursuant to an Offer to Exchange dated December 20, 2021 filed as an exhibit to the Company’s Schedule TO, dated December 20, 2021, each of which have been filed with the U.S. Securities and Exchange Commission (the “SEC”) and more fully set forth the terms and conditions of the exchange offer and the Series B Preferred Shares, including certain conditions to the closing of the offer to exchange. The Company has retained Computershare Trust Company, N.A. as the depositary for the exchange offer and Georgeson LLC as the information agent.
Copies of the Offer to Exchange and the related Letter of Transmittal are being mailed to the Company’s shareholders. Additional copies of the Offer to Exchange and the related Letter of Transmittal may be obtained at the Company’s expense from the information agent at (800) 676-0098 (toll free). Questions regarding the exchange offer should be directed to the information agent at (800) 676-0098 (toll free). Parties outside the U.S. can reach the information agent at +1-781-575-2137.
Performance Shipping Inc. Expects Tanker Market Rates to Recover Over the Rest of the Year, After First Quarter Loss
Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, reported net loss and net loss from continuing and discontinued operations attributable to common stockholders of $2.9 million for the first quarter of 2021, compared to net income and net income from continuing and discontinued operations attributable to common stockholders of $1.3 million and $2.8 million, respectively, for the same period in 2020. Loss per share for the first quarter of 2021 was $0.57, while earnings per share for the first quarter of 2020 was $0.60 (basic) and $0.58 (diluted).
Voyage and time charter revenues from continuing and discontinued operations were $8.4 million ($3.5 million net of voyage expenses) for the first quarter of 2021, compared to $13.5 million ($9.2 million net of voyage expenses) for the same period in 2020. This decrease was mainly attributable to the decreased time-charter equivalent rates (TCE rates) achieved during the quarter as a result of the depressed market conditions. Fleetwide, the average time charter equivalent rate for the first quarter of 2021 was $7,691, compared with an average rate of $21,386 for the same period in 2020. During the first quarter of 2021, net cash used in operating activities of continuing and discontinued operations was $1.4 million, compared with net cash provided by operating activities of continuing and discontinued operations of $7.1 million for the first quarter of 2020.
Commenting on the results of the first quarter of 2021, Mr. Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“Spot charter rates during the first quarter of 2021 remained at very low levels, as a result of a combination of weak consumer and industrial demand coupled with low crude oil and refined petroleum products production. Therefore, in accordance with our dividend policy, we will not declare and pay a dividend for our Q1 2021 results from operations. We expect spot charter rates, which continue to be at very low levels, to gradually recover over the successive quarters of 2021 as the COVID-19 pandemic recedes and demand for crude oil and refined petroleum products recovers. During the first quarter of 2021, we became a signatory of the Neptune Declaration and the UN Global Compact, and released our inaugural sustainability report, which can be found on our website. We remain keenly focused on our ESG efforts, which are an integral part of who we are, as we firmly believe they will meaningfully contribute to a better future for everyone.”
Tanker Market Update for the First Quarter 2021:
Fleet supply was 647.6 million dwt, up 0.9% from 641.7 million dwt from the previous quarter, and up 2.9% from Q1 2020 levels of 629.2 million dwt.
Tanker demand in billion tonne-miles is projected to increase by 4.1% in 2021, recovering from the lows experienced in 2020.
Tanker fleet supply in deadweight terms is estimated to grow by a moderate 3.0% in 2021.
Crude tanker fleet utilization was estimated at 82.0%, up from 79.6% from the previous quarter and down from Q1 2020 levels of 89.0%.
Newbuilding contracting at 9.7 million dwt resulted in the tanker orderbook remaining close to record low levels and representing 8.1% of the tanker fleet.
Daily spot charter rates for Aframax tankers averaged $10,527, up 84.3% from the previous quarter average of $5,713 and down 75.0% from Q1 2020 average of $41,610.
The value of a 10-year-old Aframax tanker ended the quarter at $23.5 million, up 14.6% from the previous quarter assessed value of $20.5 million, and down 24.2% from Q1 2020 assessed value of $31.0 million.
Tankers used for floating storage (excluding dedicated storage) was 180 (28.7 million dwt), down 21.4% from 229 (37.8 million dwt) from the previous quarter and up 176.9% from Q1 2020 levels of 65 (15.9 million dwt).
Global oil consumption was 94.8 million bpd, down 0.7% from the previous quarter level of 95.4 million bpd, and down 0.7% from Q1 2020 levels of 95.4 million bpd.
Global oil production was 92.5 million bpd, up 0.2% from the previous quarter level of 92.4 million bpd and down 7.8% from Q1 2020 levels of 100.3 million bpd.
OECD commercial inventories were 2,922.7 million barrels, down 3.4% from the previous quarter level of 3,025.8 million barrels, and down 1.4% from Q1 2020 levels of 2,962.8 million barrels.
Novel Coronavirus Risks:
On March 11, 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) outbreak a pandemic. In response to the outbreak, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines, travel restrictions, and other emergency public health measures in an effort to contain the outbreak. Such measures have resulted in a significant reduction in global economic activity and extreme volatility in the global financial markets, which has reduced the global demand for oil and oil products, which the Company’s vessels transport.
Despite the global gradual recovery from COVID-19, the Company continues to take proactive measures to ensure the health and wellness of its crew and onshore employees while maintaining effective business continuity and uninterrupted service to its customers. The overall impact of COVID-19 on the Company’s business, and the efficacy of any measures the Company takes in response to the challenges presented by the COVID-19 pandemic, will depend on how the outbreak further develops, the duration and extent of the restrictive measures that are associated with the pandemic and their impact on global economy and trade, which is still uncertain.
(1)The table above includes data both from our Continuing and Discontinued Operations. Discontinued Operations refer to our container vessels segment that we disposed of in 2020.
(2)Operating days, including ballast leg, are the number of available days in a period less the aggregate number of days that our vessels are off-hire. The specific calculation does not count as off-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 our voyage and time charter revenues, 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.
Dividend Policy – Quarterly Calculations
Our Board of Directors has adopted a variable quarterly dividend policy, pursuant to which we may declare and pay a variable quarterly cash dividend. If declared, the quarterly dividend is expected to be paid each February, May, August and November and will be equal to available cash from operations during the previous quarter after cash payments for debt repayment and interest expense and reserves for the replacement of our vessels, scheduled drydockings, intermediate and special surveys and other purposes as our Board of Directors may from time to time determine are required, after taking into account contingent liabilities, the terms of any credit facility, our growth strategy and other cash needs as well as the requirements of Marshall Islands law. The declaration and payment of dividends is, at all times, subject to the discretion of our Board of Directors. Our Board of Directors may review and amend our dividend policy from time to time, in light of our plans for future growth and other factors.
In accordance with our dividend policy, and taking into account the above-listed factors, we expect to pay dividends only if during the preceding quarter Quarterly Cash Flow is positive and Quarter-End Excess Cash is also positive. As a general guideline, the amount of any such dividends is expected to be based on a pay-out ratio of the lower of i) Quarterly Cash Flow; and ii) Quarter-End Excess Cash. So long as our end of quarter outstanding debt exceeds our equity market capitalization our pay-out ratio is expected to be 50%. We will consider increasing the pay-out ratio gradually up to a maximum level of 90% that we may achieve when our end of quarter outstanding debt is less than 10% of our equity market capitalization. Quarter-End Excess Cash is defined as actual end of quarter Cash and Cash Equivalents over our Minimum Cash Threshold. Minimum Cash Threshold is defined as the sum of minimum liquidity pursuant to our loan agreements and $1.5 million per vessel. Our bank facilities currently require us to maintain minimum liquidity of $9.0 million.
Quarterly Cash Flow is equal to voyage and time charter revenues less voyage expenses, less vessel operating expenses, less general and administrative expenses, less – the greater of i) net interest expense and repayment of long-term bank debt or ii) fleet replacement reserves – and less maintenance reserves for our fleet.
We believe the above approach will ensure the sustainability of our Company and replacement of our fleet as during quarters where either Excess Cash is negative or Quarterly Cash Flow is negative, we will not pay dividends until Quarterly Cash Flow is positive and Excess Cash is also positive. Below are our calculations of Quarter-End Excess Cash and Quarterly Cash Flow for the first quarter of 2021.
Performance Shipping Inc. Announces Initiation of Analyst Coverage by H.C. Wainwright & Co.
Performance Shipping Inc. (NASDAQ: PSHG), (the “Company”), a global shipping company specializing in the ownership of tankers, today announced that H.C. Wainwright & Co. has initiated analyst coverage of the Company with a “Buy” rating and US$11.00 price target.
H.C. Wainwright is a full‐service investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private companies across multiple sectors and regions.
All reports prepared by analysts represent the views of those analysts and not necessarily those of the Company. The Company is not responsible for the content, accuracy, or timing of analyst reports.
Performance Shipping Inc. Anticipates Tanker Market Recovery After Fourth Quarter Losses
Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, Friday reported a net loss and net loss from continuing and discontinued operations attributable to common stockholders of $2.5 million for the fourth quarter of 2020, compared to a net loss and net loss from continuing and discontinued operations attributable to common stockholders of $12.2 million for the same period in 2019. Loss per share for the fourth quarter of 2020 was $0.51, while loss per share for the fourth quarter of 2019 was $3.17.
Voyage and time charter revenues from continuing and discontinued operations were $7.2 million ($3.9 million net of voyage expenses) for the fourth quarter of 2020, compared to $10.6 million ($8.5 million net of voyage expenses) for the same period in 2019. This decrease was mainly attributable to the decreased time-charter equivalent rates (TCE rates) achieved during the quarter as a result of the depressed market conditions. Fleetwide, the average time charter equivalent rate for the fourth quarter of 2020 was $10,114, compared with an average rate of $23,153 for the same period of 2019. During the fourth quarter of 2020, net cash provided by operating activities of continuing and discontinued operations was $0.9 million, compared with net cash used in operating activities of continuing and discontinued operations of $0.3 million for the fourth quarter of 2019.
Net income from continuing and discontinued operations for the year ended December 31, 2020, amounted to $3.8 million, compared to a net loss from continuing and discontinued operations of $32.1 million for the year ended December 31, 2019. Net income from continuing and discontinued operations attributable to common stockholders for the year ended December 31, 2020, amounted to $5.2 million, due to a one-time gain of $1.5 million derived from the repurchase of the Series C preferred shares, and resulted in earnings per common share, basic and diluted, of $1.06 and $1.05, respectively. Net loss from continuing and discontinued operations attributable to common stockholders for the year ended December 31, 2019, was $32.1 million, resulting in a loss per share of $11.19.
Fourth Quarter 2020 and Subsequent Developments:
• Appointment of Andreas Michalopoulos as Chief Executive Officer and Anthony Argyropoulos as Chief Financial Officer in October 2020;• Initiation of new variable quarterly dividend policy and declaration of $0.01 dividend per share (or $0.1 per share, as adjusted after the one-for-ten reverse stock split) to all shareholders in October 2020;• Introduction of new business strategy and posting of the relevant presentation on the Company’s website in October 2020;• Effectiveness of a one-for-ten reverse stock split to comply with NASDAQ’s minimum share price rule in November 2020;• Acquisition of 2011-built Aframax tanker vessel “P. Yanbu” for $22.0 million in November 2020;• The signing of a loan agreement with Piraeus Bank S.A. for up to $31.5 million in December 2020, for the partial refinancing of the existing Nordea loan and additional financing for the “P. Yanbu”;• Signing of a supplemental loan agreement with Nordea for repayment schedule re-structuring in December 2020;• Delivery of the Aframax tanker vessel “P. Yanbu” in December 2020;• Entry into an At-The-Market Offering Agreement with H.C. Wainwright Co., LLC, pursuant to which the Company may, at its discretion, sell its common shares at market prices.
Commenting on the results of the fourth quarter of 2020, Mr. Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“Spot charter rates during the fourth quarter of 2020 were the lowest in more than 30 years as a result of a combination of weak consumer and industrial demand, and low crude oil and refined petroleum products production. We, at Performance Shipping Inc., nevertheless managed to earn a time charter equivalent rate of $10,114 over our available days compared to the average daily spot Aframax tanker rate of $5,713 during the quarter. We expect the spot charter market to gradually recover through 2021 as the COVID-19 pandemic recedes and demand for crude oil and refined petroleum products recovers. Unfortunately, due to unprecedented low market conditions, we cannot declare and pay a dividend at the present time, but we are pleased to include for the first time in our earnings release our fourth quarter dividend calculation, a specific and transparent table based on which we determine whether we shall pay a dividend. The ATM agreement we will enter into today will position us to fund our stated growth strategy of gradually doubling the size of our fleet over the next twelve to twenty-four months through access to the public equity capital markets when our industry and share price recover in the future.”
Performance Shipping Inc. Announces Delivery of its Fifth Aframax Tanker, M/T P. Yanbu
Performance Shipping Inc., a global shipping company specializing in the ownership of tankers, announced that in Manila, Philippines, it has taken delivery of the M/T P. Yanbu (formerly “Kalamas”), a 2011-built 105,400 dwt Aframax tanker that the Company entered into an agreement to purchase in November 2020, through a separate wholly-owned subsidiary. The vessel has been retrofitted with a ballast water treatment system (BWTS), has completed its dry dock survey in July 2020, and its special survey in October 2020, and will be employed in the spot market.
As previously announced, the M/T P. Yanbu was acquired for a total purchase price of US$22.0 million and financed with US$13.2 million cash on hand and US$8.8 million from the term loan facility with Piraeus Bank S.A. In keeping with the Company’s stated low net financial leverage policy, pro-forma net debt upon acquisition was estimated at 35% of the value of its fleet.
Including the newly delivered M/T P. Yanbu, the Company’s fleet currently consists of five (5) Aframax tankers.
Commenting on the delivery, Mr. Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“Our fifth Aframax tanker is the third vessel delivered to the Company during the course of this year and marks the completion of our internally financed growth stage. Following the partial refinancing of the Nordea facility and the closing of our term loan facility with Piraeus Bank S.A., our quarterly principal installments starting in 2021 will be approximately US$1.97 million. This will reduce our indicative estimated daily cashflow breakeven rate to about US$15,500 per vessel per day. This is an important watermark as we expect, pursuant and subject to our variable dividend policy, to declare and pay dividends to our shareholders following quarters when our fleet average daily time charter equivalent (TCE) rate is above that level.”
Performance Shipping Inc. Regains Compliance With Nasdaq Minimum Bid Price Requirement
Performance Shipping Inc., a global shipping company specializing in the ownership of tankers, announced that the Nasdaq Stock Market (“Nasdaq”) has confirmed that the Company has regained compliance with Nasdaq’s minimum bid price requirements for continued listing on the Nasdaq Capital Market. The letter noted that as a result of the closing bid price of the Company’s common shares having been at $1.00 per share or greater for at least ten consecutive business days, from November 2, 2020 through November 13, 2020, the Company has regained compliance with Nasdaq’s Listing Rule 5550(a)(2), and the matter is now closed.
Commenting on this, Mr. Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“As a publicly listed company since 2011, we are fully committed to maintaining our Nasdaq listing and we welcome the notification from Nasdaq confirming that we have regained compliance.”