Performance Shipping reported net income from continuing and discontinued operations of $3.9 million and net income from continuing and discontinued operations attributable to common stockholders of $3.7 million for the second quarter of 2022, compared to a net loss from continuing and discontinued operations and a net loss from continuing and discontinued operations attributable to common stockholders of $2.6 million for the same period in 2021.
Revenue from continuing and discontinued operations was $16.7 million ($11.3 million net of voyage expenses) for the second quarter of 2022, compared to $9.1 million ($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 second quarter of 2022 was $24,921, compared with an average rate of $9,728 for the same period in 2021.
Net income from continuing and discontinued operations for the six-month period ended June 30, 2022, amounted to $1.8 million, compared to a net loss from continuing and discontinued operations of $5.5 million for the six-month period ended June 30, 2021. Revenue from continuing and discontinued operations was $25.3 million ($16.5 million net of voyage expenses) for the six-month period ended June 30, 2022, compared to $17.5 million ($7.5 million net of voyage expenses) for the six-month period ended June 30, 2021.
As of August 4, 2022, the Company’s number of common shares issued and outstanding was 27,395,030.
On June 21, 2022, the Company announced its agreement to acquire its sixth Aframax tanker, which was delivered on July 5, 2022. The acquisition cost of approximately $27.6 million was financed with cash on hand and the incurrence of debt through a new senior secured facility that the Company entered into prior to delivery of the vessel.
On July 27, 2022, the Company commenced a time charter contract with Teekay Chartering Limited for one of its Aframax tanker vessels, M/T Blue Moon. The gross charter rate is $23,000 per day for a period of 24 months +/-30 days at the option of the Charterer. The new charter is expected to generate approximately US$16.8 million in gross revenue.
Commenting on the results of the second quarter of 2022 and subsequent developments, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“During the second quarter of 2022, we saw a continuation in the tanker market recovery, supported by strong demand for crude oil and significant changes in trading patterns as a result of sanctions on Russian crude oil exports leading to longer-haul tanker voyages. We took advantage of the improved tanker charter rate environment, resulting in fleetwide average time charter equivalent rates of $24,921 per day during the second quarter of 2022, revenues of $16.7 million, and net income of $3.9 million from our fleet operations.
“We believe that the encouraging freight rate developments since early March 2022 indicate a promising trend towards a sustainable charter rate recovery. Having taken delivery of our sixth Aframax tanker on July 5th, we are now well positioned to take advantage of the firming charter rate environment with our expanded fleet operations. We did so by entering into a two-year contract for the M/T Blue Moon with Teekay Chartering Limited at $23,000 per day. We expect to operate our remaining vessels in the spot market for the foreseeable future, where voyage charter rates for Aframax tankers are currently quoted in excess of $35,000 per day.
“We intend to complete the special survey and the installation of the ballast water treatment system (BWTS) on the M/T P. Kikuma during the fourth quarter of this year, and we expect full utilization of our expanded and 100% BWTS-fitted tanker fleet going forward, with no scheduled special surveys for 2023.
“As a result of our financial results, and in accordance with our dividend policy, we will not declare a dividend for our Q2 2022 results from operations.”
Tanker Market Update for the Second Quarter of 2022:
Tanker fleet supply was 663.0 million dwt, up 0.7% from 658.2 million dwt from the previous quarter and up 1.7% from Q2 2021 levels of 651.7 million dwt.
Tanker demand in billion tonne-miles is projected to increase by a firm 6.7% in 2022, supported by the ongoing recovery of global oil demand along with a shift in trading patterns to longer-haul routes emerging due to the Russia-Ukraine war.
Tanker fleet supply in deadweight terms is estimated to grow by a moderate 2.6% in 2022.
Crude oil tanker fleet utilization was estimated at 80.0%, up from 78.0% in the previous quarter and up from 77.4% in Q2 2021.
Newbuilding tanker contracting was just 1.4 million dwt in the second quarter, resulting in a tanker orderbook to fleet ratio of 5.2%, the lowest level seen in the past 26 years.
Daily spot charter rates for Aframax tankers averaged $46,438, up 43.9% from the previous quarter average of $32,266 and up 507.1% from the Q2 2021 average of $7,648.
The value of a 10-year-old Aframax tanker at the end of the second quarter was $35.0 million, up 27.3% from $27.5 million in the previous quarter, and up 34.6% from $26.0 million in Q2 2021.
The number of tankers used for floating storage (excluding dedicated storage) was 165 (23.3 million dwt), up 13.8% from 145 (21.2 million dwt) from the previous quarter and up 9.3% from Q2 2021 levels of 151 (22.8 million dwt).
Global oil consumption was 98.7 million bpd, down 0.3% from the previous quarter level of 98.9 million bpd, and up 2.5% from Q2 2021 levels of 96.3 million bpd.
Global oil production was 99.3 million bpd, up 0.4% from the previous quarter level of 98.8 million bpd and up 4.8% from Q2 2021 levels of 94.7 million bpd.
OECD commercial inventories were 2,677.6 million barrels, up 2.3% from the previous quarter level of 2,616.3 million barrels, and down 6.5% from Q2 2021 levels of 2,864.4 million barrels.
During the global gradual recovery from COVID-19, we continue to take proactive measures to ensure the health and wellness of our crew and onshore employees while endeavoring to maintain effective business continuity and uninterrupted service to our customers. While the situation is improving, we continue to incur 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.