Pangaea Logistics Solutions, a global provider of comprehensive maritime logistics solutions, announced today its results for the three months ended June 30, 2024.
SECOND QUARTER 2024 RESULTS
• Net income attributable to Pangaea of $3.7 million, or $0.08 per diluted share
• Adjusted net income attributable to Pangaea of $4.6 million, or $0.10 per diluted share
• Operating cash flow of $9.0 million
• Adjusted EBITDA of $15.9 million
• Time Charter Equivalent (“TCE”) rates earned by Pangaea of $16,223 per day
• Pangaea’s TCE rates exceeded the average Baltic Panamax and Supramax indices by 7%
• Ratio of net debt to trailing twelve-month Adjusted EBITDA of 2.1x
• Expanded owned vessel fleet to 26 with the acquisitions of the Bulk Brenton and Bulk Patience in third quarter
For the three months ended June 30, 2024, Pangaea reported non-GAAP adjusted net income of $4.6 million, or $0.10 per diluted share, on total revenue of $131.5 million. Second quarter TCE rates increased 4% on a year-over-year basis, while total shipping days, which include both voyage and time charter days, increased 2% to 4,117 days, when compared to the year-ago period.
The TCE earned was $16,223 per day for the three months ended June 30, 2024, compared to an average of $15,558 per day for the same period in 2023. During the second quarter ended June 30, 2024, the Company’s average TCE rate exceeded the benchmark average Baltic Panamax and Supramax indices by 7%, supported by Pangaea’s long-term contracts of affreightment (“COAs”), specialized fleet, and cargo-focused strategy.
Total Adjusted EBITDA was $15.9 million in the second quarter and unchanged compared to the prior year period. Total Adjusted EBITDA margin was 12.1% during the second quarter of 2024, compared to 13.5% during the prior year period. Second quarter Adjusted EBITDA performance relative to the prior year period reflects the increase in market rates, which were offset by higher charter hire and vessel operating expenses per day.
As of June 30, 2024, the Company had $77.9 million in cash and cash equivalents. Total debt, including lease finance obligations was $252.6 million. At the end of the second quarter 2024, the ratio of net debt to trailing twelve-month adjusted EBITDA was 2.1x, which was flat compared to the prior year period. During the three months ended June 30, 2024, the Company repaid $3.6 million of finance leases, $4.6 million of long-term debt in conjunction with a refinancing, and paid $4.5 million in cash dividends.
On August 8, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on September 16, 2024, to all shareholders of record as of September 2, 2024.
MANAGEMENT COMMENTARY
“Our second quarter results reflect consistent execution amid a stable dry-bulk market, which enabled us to deliver continued premium TCE returns,” stated Mark Filanowski, Chief Executive Officer of Pangaea Logistics Solutions. “Our fleet remained well utilized during the second quarter as we executed long-term contracts within our key Atlantic trade routes. As we enter the peak demand period for our specialized ice-class fleet operating in the Canadian Arctic region, the stable market environment and our expanded fleet of owned vessels positions us for strong performance in the second half of the year.”
“The global dry bulk market has proven to be resilient in the face of recent global trade disruptions, which has resulted in a more normal price environment compared to a year-ago,” continued Filanowski. “Within our key trade regions, economic activity continues to support demand for our key bulk trades. Second hand vessel values have increased substantially as dry bulk newbuilding orders show continued weakness. Increased newbuilding prices, higher interest rates, and uncertainty of the impact of emissions regulations, have limited orders for new vessels. Going forward, we expect the limited number of newbuild vessels entering the market will provide a systemic catalyst for higher market rates going in to 2025, as dry bulk capacity will become further constrained.”
“Given the attractive macro backdrop for dry bulk economics, we have been very focused on our capital deployment priorities,” continued Filanowski. “During the quarter, we entered into an agreement to acquire the Bulk Brenton and Bulk Patience, which will enter our fleet during the third quarter. At the same time, we refinanced two of our owned ships with new lenders and repaid over $8 million in debt, which further improves the flexibility of our balance sheet.”
“Looking ahead, the third quarter represents a seasonally strong period for demand in our niche Arctic trades and we expect that our fleet of ice class vessels will be fully utilized during the third quarter. Through today we’ve booked 3,298 shipping days at an average TCE rate of $17,978 per day” continued Filanowski. “Entering our period of peak demand, we will remain focused on maximizing fleet utilization in order to deliver premium asset returns, invest in profitable growth and deliver consistent shareholder returns.”
STRATEGIC UPDATE
Pangaea remains committed to developing a leading dry bulk logistics and transportation services company of scale, providing its customers with specialized shipping and supply chain and logistics offerings in commodity and niche markets, which drive premium returns measured in time charter equivalent per day.
Leverage integrated shipping and logistics model. In addition to operating the largest high ice class dry bulk fleet of Panamax and post-Panamax vessels globally, Pangaea also performs stevedoring services, together with port and terminal operations capabilities. Since acquiring marine port terminal operations in Port Everglades/Ft. Lauderdale, Port of Palm Beach, Florida, and Port of Baltimore, Maryland a year ago, the Company has opportunistically deployed capital to support continued organic growth of this business. During the second quarter, the port and logistics business continued to build momentum, delivering strong margins and profitability. Earlier in the year, the Company launched an expansion of its terminal operations in the Port of Tampa, which is on track to be complete in the second half of 2025.
Continue to drive strong fleet utilization. In the second quarter, Pangaea’s 24 owned vessels were fully utilized and supplemented with an average of 22 chartered-in vessels to support cargo and COA commitments. During the quarter, the Company announced the acquisition of two new vessels, which will expand the owned vessel fleet to 26. These vessels will further position the Company to maximize the utilization of its fleet and serve the evolving needs of its customers.
Continue to upgrade fleet, while divesting older, non-core assets. During the quarter, the Company entered into an agreement to acquire the Bulk Brenton and Bulk Patience for a combined purchase price of $56.6 million. These two 2016 built vessels represent an upgrade to the composition of our fleet by increasing our environmentally compliant fleet tonnage and improving our ability to meet customer demand. Going forward, the Company intends to opportunistically manage its fleet with the purpose of maximizing TCE rates, meeting evolving regulatory requirements and supporting client cargo needs on an on-demand basis.