Pyxis posts $3.4m loss in the first three months of 2022

Pyxis

Pyxis Tankers, an international pure play product tanker company, announced unaudited results for the three months ended March 31, 2022:

Summary

For the three months ended March 31, 2022, our Revenues, net were $6.9 million, while our time charter equivalent (“TCE”) revenues were $3.8 million, a decrease of $0.4 million, or 10.1%, compared to the same period in 2021. Net loss attributable to common shareholders for the three months ended March 31, 2022 was $3.7 million, or a loss per share (basic and diluted) of $0.09, which was greater than the results from the comparable period of 2021. Our Adjusted EBITDA was negative $0.7 million which represented a decrease of $1.5 million over the comparable 2021 quarter. For a definition and a reconciliation of Adjusted EBITDA, please see “Non-GAAP Measures and Definitions” below.

Valentios Valentis, Chairman and CEO commented:

“Our results for the three months ended March 31, 2022 reflected the lingering effects from the Covid-19 Omicron variant on mobility and economic activity which resulted in a continuation of a soft spot chartering environment. Moreover, our quarterly results were impacted by non-recurring operational events, including the sale of two vessels and an accidental grounding of one of our medium range product tankers (“MR”), which resulted in reduced operating days for revenue opportunities. Consequently, the average daily TCE and utilization for our MR’s were lower than the same period in the prior year.

As previously discussed, we completed various initiatives over the last couple of years to position the Company to take advantage of better markets. Just as the recovery of global economies was gradually picking-up since the outbreak of Omicron, the war in the Ukraine created new challenges and opportunities which have been positive for our sector and the Company. Improving demand for refined petroleum products and low global inventories have been met by the effects of the war which has resulted in market dislocation, arbitrage opportunities, ton-mile expansion and higher charter rates for product tankers starting in March. After a prolonged, difficult period, we began to see a recovery of the sector with healthier rates that initially occurred in the Atlantic basin. Furthermore, over the last month, most of the Pacific basin has also shown significant improvement. In order to address high demand for transportation fuels, many refineries, including those located in the U.S. Gulf Coast, are running at high utilization and achieving near-record crack spreads. Greater global demand of diesel/gasoil, especially from Europe and Latin America, is competing with rising demand of jet fuel and gasoline as summer travel unfolds in the northern hemisphere, further stressing tight inventory positions. Increasing cargoes from U.S., Middle East and certain Asian refineries to end markets reflect expanding ton-mile voyages. This situation has been further compounded by the closure of older, less efficient refineries, primarily located in the Organization for Economic Co-operation and Development countries (OECD).

The recent dramatic improvement in demand for product tankers is further supported by long-term fundamentals. Despite recent headwinds of slowing economic activity, including the impact of Covid-19 on China, rising inflation and tightening monetary policies, we believe the chartering environment should remain favourable for the near-term given demand for refined products. Reasonable economic activity is supported by data from the International Monetary Fund (IMF) which still forecasts annual global GDP growth of 3.6% for this year and 2023. A leading research firm recently estimated that seaborne trade of refined products would grow 4% to 1.05 billion tons in 2022. The vessel supply outlook continues to look very positive with little new ordering of product tankers. We estimate that annual net supply growth for MR’s should be approximately 2% over the next two years.

From a risk/return standpoint, we continue to employ a mixed chartering strategy of short-term time and spot charters on a staggered basis to a diverse customer base. Three of our MR’s are currently trading spot and the remaining two tankers are under time charters. We have chosen not to pursue any Russian cargoes. With improving market conditions, we are pleased to report that as of May 13, 2022, 67% of our available days for the second quarter were booked at an average estimated daily TCE of $27,900. While our optimism for the charter market has improved, the uncertainties surrounding the global economy and the impact of the war as well as other geo-political events, temper our enthusiasm.”

Results for the three months ended March 31, 2021 and 2022

For the three months ended March 31, 2022, we reported Revenues, net of $6.9 million, an increase of $1.7 million, or 31.7%, from $5.2 million in the comparable period of 2021 primarily due to higher spot employment for our fleet. During the first quarter of 2022, two of our MR’s were under short time charters and three under spot voyages resulting in a daily TCE for our MR fleet of $11,227.

Our net loss attributable to common shareholders for the period ended March 31, 2022, was $3.7 million, or a loss per share of $0.09 (basic and diluted), compared to a net loss of $2.1 million, or a loss per share of $0.07 (basic and diluted) for the same period in 2021. Lower daily TCE of $11,227 and lower MR fleet utilization of 74.3% for our MR’s during the quarter ended March 31, 2022, were compared to $12,738 and 100%, respectively, during the same period in 2021. Operating expenses and vessel management fees were comparatively higher in the 2022 period as a result of the vessel additions in the second half of 2021, the “Pyxis Karteria” and “Pyxis Lamda”. The first quarter of 2022 was further negatively impacted by a $0.5 million non-recurring loss, or $0.01 per share, associated with repositioning costs for the sale of the two small tankers, the “Northsea Alpha” and “Northsea Beta”. The vessels were delivered to their buyer on January 28, and March 1, 2022, respectively. Furthermore, the Q1 2022 results were impacted by the absence of revenues from unscheduled off-hire days, substantially associated with the grounding of the Pyxis Epsilon in February and resultant vessel repairs. The Company’s 2015 built vessel returned to commercial employment at the end of March.

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