Performance Shipping Inc., a global shipping company specializing in the ownership of tanker vessels, reported a net loss from continuing and discontinued operations attributable to common stockholders of $2.1 million for the fourth quarter of 2021, compared to a net loss from continuing and discontinued operations attributable to common stockholders of $2.5 million for the same period in 2020. Loss per share, basic and diluted, for the fourth quarter of 2021 and 2020 was $0.41 and $0.51, respectively.
Revenue from continuing and discontinued operations was $9.6 million ($5.4 million net of voyage expenses) for the fourth quarter of 2021, compared to $7.2 million ($3.9 million net of voyage expenses) for the same period in 2020. This increase was attributable to the increased time-charter equivalent rates (TCE rates) achieved during the quarter and also to the increase of the Company’s ownership days, after the acquisition of the M/T P. Yanbu in December 2020. Fleetwide, the average time charter equivalent rate for the fourth quarter of 2021 was $13,370, compared with an average rate of $10,114 for the same period in 2020. During the fourth quarter of 2021, net cash used in operating activities of continuing and discontinued operations was $1.8 million, compared with net cash provided by operating activities of continuing and discontinued operations of $0.9 million for the fourth quarter of 2020.
Net loss from continuing and discontinued operations for the year ended December 31, 2021, amounted to $9.7 million, compared to net income from continuing and discontinued operations of $3.8 million for the year ended December 31, 2020. 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 share, basic and diluted, of $1.93. 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.
As of December 31, 2021, the Company’s number of common shares issued and outstanding was 5,082,726.
Commenting on the results of the fourth quarter of 2021, Mr. Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“Spot charter rates in the fourth quarter of 2021 showed a modest recovery as a result of oil-producing countries continuing their marginal increases in crude oil and refined petroleum products production to address the increased level of oil consumption, oil prices, and the depletion of global inventories. Aframax spot rates increased from an average of $3,479 per day in the third quarter of 2021 to an average of $11,093 per day in the fourth quarter of 2021, whereas our company has significantly outperformed the market, as our fleetwide average time charter equivalent rates were even higher at $9,335 and $13,370 for the equivalent periods.
“So far, during the first quarter of 2022, we have seen a deterioration in tanker charter rates partially explained by production challenges faced by certain members of OPEC+, as well as geopolitical concerns. Nevertheless, we continue to believe that the tanker charter rate environment will recover in the medium term, supported by the increasing global need for crude oil restocking, along with positive demand prospects.
“During the fourth quarter of 2021, we completed the special survey and installation of the ballast water treatment system (BWTS) on the M/T P. Fos and commenced similar work on the M/T Blue Moon. We plan on having 100% of our existing fleet BWTS fitted following scheduled works on the M/T P. Kikuma at the end of this year.
“As a result of our financial results, and in accordance with our dividend policy, we will not declare a dividend for our Q4 2021 results from operations.”
Tanker Market Update for the fourth quarter of 2021:
• Tanker fleet supply was 652.2 million dwt, down 0.06% from 652.6 million dwt from the previous quarter, and up 1.6% from Q4 2020 levels of 641.8 million dwt.
• Tanker demand in billion tonne-miles is projected to increase by a firm 7.4% in full year 2022, supported by a noticeable recovery in oil demand from 2020 lows, by the gradual increase in OPEC+ and non-OPEC oil production.
• Tanker fleet supply in deadweight terms is estimated to grow by a moderate 2.0% in 2022.
• Crude tanker fleet utilization was estimated at 79.0%, up from 77.0% in the previous quarter and slightly down from Q4 2020 levels of 80.0%.
• Newbuilding tanker contracting stood at just 1.9 million dwt in the fourth quarter, resulting in a tanker orderbook to fleet ratio of 7.4%, the lowest level seen since 1996.
• Daily spot charter rates for Aframax tankers averaged $11,093, up 218.9% from the previous quarter average of $3,479 and up 94.2% from the Q4 2020 average of $5,713.
• The value of a 10-year-old Aframax tanker ended the fourth quarter at $27.0 million, up 3.8% from $26.0 million in the previous quarter, and up 31.7% from the assessed value of $20.5 million seen in Q4 2020.
• The number of tankers occupied with floating storage (excluding dedicated storage) was 176 (27.0 million dwt), up 3.5% from 170 (25.4 million dwt) from the previous quarter and down 19.0% from Q4 2020 levels of 217 (37.0 million dwt).
• Global oil consumption was 99.7 million bpd, up 1.5% from the previous quarter level of 98.2 million bpd, and up 5.3% from Q4 2020 levels of 94.7 million bpd.
• Global oil production was 98.3 million bpd, up 1.9% from the previous quarter level of 96.5 million bpd and up 6.5% from Q4 2020 levels of 92.3 million bpd.
• OECD commercial inventories were 2,681.6 million barrels, down 2.4% from the previous quarter level of 2,748.8 million barrels, and down 11.3% from Q4 2020 levels of 3,024.9 million barrels.
The above market outlook update is based on information, data and estimates derived from industry sources, and 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.
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, and has exposed the Company to the risk of volatility in the near-term. During 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 endeavoring to maintain effective business continuity and uninterrupted service to its customers. The Company has incurred increased costs as a result of the restrictions imposed in various jurisdictions creating delays and additional complexities with respect to port calls and crew rotations. 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 and may not be fully reflected in the Company’s financial results for the year ended December 31, 2021.