Performance Shipping profitable in strong Q4 market 

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1996

Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, yesterday reported net income of $25.0 million and net income attributable to common stockholders of $24.5 million for the fourth quarter of 2023. The 2023 fourth quarter results compared to a net income of $23.8 million and net income attributable to common stockholders of $9.4 million for the same period in 2022. Earnings per share, basic and diluted, for the fourth quarter of 2023 were $2.03 and $0.63, respectively.

Revenue was $23.8 million ($22.7 million net of voyage expenses) for the fourth quarter of 2023, compared to $27.8 million ($25.0 million net of voyage expenses) for the same period in 2022. This decrease was attributable to the decrease in time-charter equivalent rates (“TCE rates”) realized during the quarter, partially offset by an increase in ownership days. Fleetwide, the average TCE rate for the fourth quarter of 2023 was $33,114, compared with an average rate of $40,469 for the same period in 2022. During the fourth quarter of 2023, net cash provided by operating activities was $9.3 million, compared with net cash provided by operating activities of $23.7 million for the fourth quarter of 2022.

Net income for the years ended December 31, 2023, and December 31, 2022, amounted to $69.4 million and $36.3 million, respectively. Net income attributable to common stockholders for the year ended December 31, 2023 amounted to $56.9 million, and resulted in earnings per share, basic and diluted, of $5.43 and $1.91, respectively. Net income attributable to common stockholders for the year ended December 31, 2022 amounted to $12.0 million, and resulted in earnings per common share, basic and diluted, of $6.49 and $3.02, respectively. The difference between net income and net income attributable to common stockholders for each of the years ended December 31, 2023, and December 31, 2022, mainly reflects aggregate non-cash items of $10.6 million and $23.3 million, respectively, as per US GAAP accounting standards, which do not affect the Company’s operating cash flows.

Commenting on the results of the fourth quarter of 2023, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:

“During the fourth quarter of 2023, the tanker market continued to strengthen as it did throughout the year. We successfully achieved a fleetwide average time charter equivalent rate of $33,114 per day and $36,954 per day during the three and twelve-month periods ended December 31, 2023, respectively. As a result, during the fiscal year ended December 31, 2023, we generated revenues of $109.0 million and net income attributable to common stockholders of $56.9 million, representing increases of 45% and 374%, respectively, compared to the corresponding period in 2022. Our cash balance at the end of 2023 was approximately $68.3 million, reflecting a 72% increase from the 2022 year-end cash balance.

As previously announced, in August 2023, the Company’s board of directors approved a $2 million share buyback program. Pursuant to this initiative, we repurchased 293,767 shares of common stock during the fourth quarter of 2023, totaling approximately $0.7 million. We firmly believe that this program is in the best interests of both our Company and our shareholders, and we intend to continue our share buybacks, depending on prevailing market conditions.

Our impressive revenue generation of approximately $109 million during the last fiscal year is indicative of our ability to capitalize on the firm freight rate environment through the efficient operation of our fleet. We believe that the solid tanker market environment will be sustainable through 2024, prompting our continued focus on a fleet deployment strategy that emphasizes balanced exposure to short to medium-term time charter contracts, and the spot market. Specifically, five of our Aframax tankers currently operate under short- and medium-term time charter contracts with first-class charterers, securing a fixed revenue backlog of approximately $52.7 million as of the beginning of 2024. Our remaining two Aframax tankers operate under pool arrangements with exposure to the prevailing robust Aframax spot rates.

Looking ahead, we are optimistic that our most recent corporate developments will enable us to fortify our market position. As previously announced, in 2023, we entered into shipbuilding contracts for the construction of three LNG-ready, scrubber fitted, LR2 Aframax tankers. These vessels, equipped with the latest high-specification engines and designed to meet stringent emission requirements, are expected to be delivered between late 2025 and early 2026. Our decision to acquire these identical “sister” vessels, along with the recent sale of our oldest Aframax tanker, the M/T P. Kikuma, reflect our confidence in sustainable market fundamentals. We believe that our strong financial position, our year-end cash balance representing 1.2x our outstanding bank debt, and our conservative leverage, which corresponds to a mere 18% of our estimated fleet market value, enhance our ability to pursue our fleet expansion and renewal strategy.”