Pioneer Marine Inc. and its subsidiaries a leading shipowner and global drybulk handysize transportation service provider announced its financial and operating results for the quarter ended September 30, 2021.

Recent Events:

A. Group Developments

Following a Share Purchase Agreement (“SPA”) Pioneer Marine Inc. agreed to sell all and any of their shares previously held in the management entities of the Pioneer Marine group of Companies, namely the Pioneer Marine Hellas S.A, the Pioneer Marine Advisers Pte Ltd. and Pioneer Chartering S.A. (the “Management entities”) effective September 30, 2021. The shares were transferred to an entity controlled by Mr. Papoulis (CEO of Pioneer Marine Inc.) and Mrs. Tapaktsoglou (CFO of Pioneer Marine Inc.)

All assets of the Management entities, including the commercial management contracts, with third party owners, in force at the time of sale were also transferred with the SPA as well as all liabilities including employee related costs and expenses for an agreed lumpsum consideration. The gain recognized as a result of this transaction is $63 thousand and is included in the Statement of Profit and Loss for the nine-month period ended September 30, 2021.

B. Fleet developments

Pioneer Marine completed the following vessel disposals during the third quarter of 2021 and up to date:

Within July 2021, two more vessels were disposed to their new owners the M/V Jupiter Bay and the M/V Venus Bay, both vessels were delivered with attached charter parties.

Within September 2021, the Company completed the disposal of M/V Orion Bay which was also delivered with attached charter party.

Finally, within October 2021, three more vessels were disposed to their new owners the M/V Teal Bay, the M/V Ha Long Bay and the M/V Kite Bay. M/V Teal Bay and M/V Ha Long Bay were delivered on charter-free basis whereas M/V Kite Bay was delivered with attached charter party.
Following above disposals there is only one vessel remaining under the Pioneer Marine Inc. fleet the M/V Resolute Bay, her disposal is anticipated to be completed by the end of the fourth quarter 2021 or early January 2021. Resolute Bay, following the effective date of the SPA, is under the commercial management of the Management entities for an agreed daily fee.

C. Dividend Distribution

On November 1, 2021, the Board of Directors of Pioneer Marine declared a cash dividend of $35.6 million, or $1.40 per share of common stock following the net cash received from the above-mentioned vessels disposals, after the prepayment of the Company’s debt facilities in full. The cash dividend was paid on November 12, 2021, to shareholders of records on November 5, 2021.

Financial Review: Three months ended September 30,2021

The reported results for the three-month period ended September 30, 2021, amount to $0.8 million net income as compared to a $2.1 million net loss for the respective previous year period. The increase is attributable to the impressive turnaround of the dry bulk market during 2021. Net income for the third quarter of 2021 was also affected by the gain from the disposal of the Management entities of $0.1 million partially offset by the loss resulting from the disposal of M/V Jupiter Bay, M/V Venus Bay and M/V Orion Bay of $0.2 million, excluding these one-off charges the net income for the third quarter of 2021 amounts to $1.0 million.

Adjusted EBITDA totalled $1.9 million for the third quarter 2021, decreased by $0.1 million as compared to the third quarter of 2020. Average number of vessels during the three-month period ended September 30, 2021, was five vessels versus 15 vessels in the comparative period last year. Despite the reduced fleet (owned and managed) the recovering from the pandemic global economy has led to a surge in the demand for commodities and significantly higher freight rates. Consequently, the TCE rate of $10,050 achieved in the third quarter of 2021 is 52% above the TCE rate achieved during the same period in 2020.

OPEX per day were slightly decreased to $4,416 per day for the three months ended September 30, 2021, compared to $4,469 during the same period in 2020.

General and administrative expenses of $0.8 million for the three months ended September 30, 2021, remained at same levels compared to the comparative prior year period. While the G&A per day basis commercial days is increased by 46% to $627 per day due to the reduced average number of vessels owned and managed by the Company.

Loss on vessel disposal for the third quarter of 2021 amounted to $0.2 million and relates to the sale of the M/V Jupiter Bay, M/V Venus Bay and M/V Orion.

Depreciation cost amounts to $0.6 million and is impacted downwards due to fleet reduction as the average number of vessels of Pioneer flee is five, while in the same period in 2020 the average number of vessels was 15.

Interest and finance cost of $0.3 million was decreased by 62% positively affected from the reduced debt levels and the significantly reduced Libor rate.

Financial Review: Nine months ended September 30,2021

The reported results for the nine-month period ended September 30, 2021, amount to $6.1 million net loss as compared to $9.6 million net loss for the respective previous year period. Average number of vessels during the nine-month period ended September 30, 2021, was 9 vessels versus 16 vessels in the comparative period last year. Net loss for the nine-month period ended 2021 was affected by the non-cash impairment charge of $9.0 million relating to the impairment exercise performed according to US GAAP following the agreements entered for vessels disposals, partially offset with a gain of $0.1 million on disposal and $0.1 gain from the disposal of the Management entities. Excluding these one-off charges and drydock cost of M/V Kite Bay $0.7 million the adjusted net income for the nine-month period ended September 30, 2021, amounts to $3.5 million.

Adjusted EBITDA totalled $8.2 million for the nine-month period ended September 30, 2021, increased by $3.0 million as compared to the same prior year period. Despite the reduced fleet (owned and managed) the recovering from the pandemic global economy has led to a surge in the demand for commodities and significantly higher freight rates. Consequently, the TCE rate of $9,164 achieved for the nine-month period ended September 30, 2021, is 49.7% above the TCE rate achieved during the same period in 2020.

OPEX per day increased to $4,481 for the nine months ended September 30, 2021, compared to $4,258 during the same period in 2020. The upward variation is mainly attributable to the additional costs incurred in the preparation of vessels disposals.

General and administrative expenses are slightly decreased by $0.1 million for the nine months ended September 30, 2021. Per day amount for the same period increased by 44% due to the reduced number of both owned and commercially managed vessels.

Dry docking expense of $0.7 million relates to the special survey of M/V Kite Bay which was completed within April 2021.

Depreciation cost amounts to $3.4 million and is impacted downwards due to fleet reduction.

Interest and finance cost of $1.2 million decreased by 55% compared to prior year same period, mainly due to the significantly reduced loan balances following vessels disposals and reduced Libor rates.

Cash Flow Review: Nine months ended September 30, 2021

Cash and cash equivalent, including restricted cash decreased by $19.6 million as at September 30, 2021, and amounted to $5.8 million as compared to $25.4 million as at December 31, 2020.

The decrease is attributable to cash used in financing activities of $115.7 million partially offset with $8.0 million by cash provided by operating activities and $88.1 million cash provided by investing activities.

Cash flow activities highlights during the period include:

• $8.0 million cash from operating activities of an average fleet of 9 vessels versus $1.6 million operating cash flow in the comparative period.
• $88.8 million cash inflow from vessels disposal completed within the period and
• $54.9 million repayments and prepayments of loans subsequently to vessels disposals.
• $60.9 million of dividends paid within the first half of 2021.