MAJURO, Marshall Islands, Nov. 07, 2019 (GLOBE NEWSWIRE) -- Pioneer Marine Inc. and its subsidiaries (OSLO-OTC: PNRM) ("Pioneer Marine," or the "Company") a leading shipowner and global drybulk handysize transportation service provider announced its financial and operating results for the quarter ended September 30, 2019.
Financial Highlights at a glance:
| Third Quarter 2019 | Third Quarter 2018 | ||
| Net income / (loss) | $3.0 million | $0.6 million | |
| Time Charter equivalent (“TCE”) revenue | $14.7 million | $15.0 million | |
| Adjusted EBITDA* | $6.7 million | $5.8 million |
Torben Janholt, Chief Executive Officer commented: “After a challenging first half of 2019 the drybulk markets bounced back in the third quarter of the year mainly led by improvements in the Capesize sector. The positive sentiment affected smaller sizes as well, and with an increase in minor bulk trades our handysize vessels benefited well. Pioneer achieved a net profit of $3 million and an EBITDA of $6.7 million.
“Now, with seven modern handysize vessels under commercial management, Pioneer operates a handysize fleet of 25 vessels, well positioned in the market to service our clients. Ongoing cost control as well as effective operation of our vessels contributes to the positive bottom line. A ballast water treatment system was successfully installed on the M/V Emerald Bay whilst the vessel was at sea, a good example of our technical department’s innovation and skills.
“Well into the fourth quarter we can look forward to yet another year with positive results.”
Liquidity & Capital Resources:
As of September 30, 2019, the Company had a total liquidity of $30.8 million including $11 million in restricted cash.
The Company’s plan is to proceed with the installation of Ballast Water Treatment System (‘BWTS’) on two vessels of the fleet within Q4 2019 and on the remaining fleet vessels up to early 2023. To date, there are three vessels out of the current fleet which have been already fitted with BWTS.
*For reconciliation and definition of Adjusted EBITDA refer to “Summary of Operating Data (unaudited)” section within this press release.
Recent Events:
On October 28th, 2019, the Company successfully completed the installation of the Ballast Water Treatment System on the M/V Emerald Bay. The project was managed by in-house technical personnel and was carried out while the vessel was en route without disrupting vessel’s operations.
On October 24th, 2019, the Company entered into a Memorandum of agreement (“MoA”) for the sale of M/V Fortune Bay (2006 built 28,671dwt) to an unrelated third party on a charter free basis. The vessel is expected to be delivered to her new owners within the first quarter of 2020.
On September 18th, 2019, the Company repurchased a total of 250,614 of company’s shares at a discounted price per share compared to the Company’s Net Asset Value, increasing the treasury shares held by the company to a total of 4,867,832 shares.
Financial Review: Three months ended September 30,2019
Net Income for the three-month period ended September 2019 increased by 602% and amounted to $3.0 million as compared to $0.6 million loss for the respective previous year period. The increase is partly attributable to the efficient monitoring of Company’s running expenses as well as to the reduced drydock expenses. Furthermore, net income for 2018 was affected by the loss on debt extinguishment in the amount of $0.5 million.
Adjusted EBITDA totalled $6.7 million for the third quarter 2019, increased by $0.9 million as compared to the third quarter of 2018 mainly due to improved operating and general administrative expenses.
TCE rate of $8,900 for the third quarter of 2019 slightly decreased by 1.2% compared to TCE rate of the same period in 2018.
A decrease of 6% on daily vessel OPEX, which were reduced to $4,242 per day for the three months ended September 30, 2019 compared to $4,503 during the same period in 2018 contributed positively to Company’s good performance for this three-month period.
Daily G&A rate decreased by 25% to $557 per day as compared to $738 per day for same period in 2018. This is attributable to one-off items incurred in the three months ended September 30, 2018 in the amount of $0.5 million, while no such one-off item affected the respective period of 2019. G&A per day basis commercial days is further reduced by 35% to $480 per day.
During the third quarter of 2019, none of the vessels of our fleet had to perform a Class intermediate survey while during the same period of the prior year three vessels had their special survey with a total cost of $1.9 million.
Depreciation cost decreased by $0.1 million in comparison to the same period in 2018 due to the reduced average number of vessels.
Interest and finance cost of $1.3 million was decreased by 19% due to reduced Libor rates as well as reduced loan balances.
Financial Review: Nine months ended September 30,2019
Net Income for the nine-month period ended September 30, 2019 increased by 276% and amounted to $6.7 million as compared to $1.8 million for the same previous year period. The increase is partly attributable to the gain on sale of M/V Paradise Bay of $3.9 million as well as efficient cost monitoring of Company’s running expenses combined with the above market indices performance achieved in terms of TCE per day. Furthermore, net income for 2018 was affected by the loss on debt extinguishment in the amount of $1.3 million.
Adjusted EBITDA totalled $15.2 million for the nine-month period ended September 30, 2019, decreased by $1.0 million as compared to nine-month period ended September 30, 2018 mainly due to lower TCE rate.
TCE rate per day of $7,940 for the nine-month period of 2019, is decreased by 13% compared to TCE rate of the same period in 2018. This is attributable to the weak market conditions during the first semester of 2019, which mainly affected the Company in the second quarter of 2019.
The Company continues to effectively monitor fleet operating expenses (“OPEX”). OPEX per day reduced by 8% to $4,281 per day for the nine months ended September 30, 2019 compared to $4,649 during the same period in 2018.
Daily G&A rate decreased by 23% to $503 per day as compared to $650 per day for same period in 2018. This is attributable to one off items incurred in the nine months ended September 30, 2018 in the amount of $0.7 million, while no such one-off item affected 2019. G&A per day basis commercial days is further reduced by 31% to $447.
As of September 30, 2019, two vessels completed their drydocks with a total cost of $1.0 million while during the same period prior year four vessels had their intermediate / special survey with a total cost of $2.1 million.
Depreciation cost amounts to $7.1 million increased by 9% due to fleet growth as Pioneer fleet consists of an average of 18 vessels, while during the same period in 2018 the Company owned on average 17 vessels.
Interest and finance cost slightly decreased by 5% when compared to the same period in 2018, from $4.6 million to $4.4 million, due to lower Libor rates and reduced loan balances.
Cash Flow Review: Nine months ended September 30, 2019
Cash and cash equivalent, including restricted cash increased by $4.0 million as at September 30, 2019 and amounted to $30.8 million as compared to $26.8 million as at December 31, 2018.
The increase is attributable to $11.6 million cash provided by operating activities, $9.4 million cash provided by investing activities, partially offset with $17.0 million cash used in financing activities.
Cash flow activities highlights during the nine-month period of 2019 mainly include, the loan repayments amounted to $11.7 million and the $2.6 million paid for repurchase of Company’s common stock. Sales proceeds from the sale of M/V Paradise Bay amounted $9.7 million and the Company also prepaid vessel’s loan in the amount of $2.5 million.
Current Fleet List
Owned Fleet
| Vessel | Yard | DWT | Year Built | ||
| Handysize | |||||
| Calm Bay | Saiki Heavy Industries | 37,534 | 2006 | ||
| Reunion Bay | Kanda Shipbuilding | 32,354 | 2006 | ||
| Fortune Bay | Shin Kochijyuko | 28,671 | 2006 | ||
| Ha Long Bay | Kanda Kawajiri | 32,311 | 2007 | ||
| Teal Bay | Kanda Kawajiri | 32,327 | 2007 | ||
| Eden Bay | Shimanami Shipyard | 28,342 | 2008 | ||
| Emerald Bay | Kanda Shipbuilding | 32,258 | 2008 | ||
| Mykonos Bay | Jinse Shipbuilding | 32,411 | 2009 | ||
| Resolute Bay | Hyundai Vinashin | 36,767 | 2012 | ||
| Jupiter Bay | Tsuji Heavy Industries | 30,153 | 2012 | ||
| Venus Bay | Tsuji Heavy Industries | 30,003 | 2012 | ||
| Orion Bay | Tsuji Heavy Industries | 30,009 | 2012 | ||
| Falcon Bay | Yangzhou Guoyu Shipbuilding | 38,464 | 2015 | ||
| Kite Bay | Yangzhou Guoyu Shipbuilding | 38,419 | 2016 | ||
| Alsea Bay | Hyundai Mipo Dockyard Co. Ltd | 36,892 | 2011 | ||
| Liberty Bay | Hyundai Mipo Dockyard Co. Ltd | 36,892 | 2012 | ||
| Monterey Bay | Hyundai Mipo Dockyard Co. Ltd | 36,887 | 2013 | ||
| Supramax | |||||
| Tenacity Bay | Jiangsu Hantong Ship Heavy Industry | 56,842 | 2008 | ||
| Commercially Managed Fleet * | |||||
| Handysize | |||||
| Handy 1 | Samjin Shipbuilding Industries Co Ltd | 33,755 | 2009 | ||
| Handy 2 | Samjin Shipbuilding Industries Co Ltd | 33,755 | 2010 | ||
| Handy 3 | Samjin Shipbuilding Industries Co Ltd | 33,755 | 2010 | ||
| Handy 4 | Samjin Shipbuilding Industries Co Ltd | 33,755 | 2011 | ||
| Handy 5 | Samjin Shipbuilding Industries Co Ltd | 33,762 | 2011 | ||
| Handy 6 | Samjin Shipbuilding Industries Co Ltd | 33,755 | 2010 | ||
| Handy 6 | Samjin Shipbuilding Industries Co Ltd | 33,757 | 2010 | ||
| Handy 7 | Samjin Shipbuilding Industries Co Ltd | ||||
*The Company also provides chartering services to two additional handy vessels.
Summary of Operating Data (unaudited)
| Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | |||||||||||||||||||
| Revenue, net | 15,918 | 16,175 | 45,019 | 48,234 | ||||||||||||||||||
| Voyage expenses | (1,211 | ) | (1,204 | ) | (5,689 | ) | (6,800 | ) | ||||||||||||||
| Time charter equivalent revenue | 14,707 | 14,971 | 39,330 | 41,434 | ||||||||||||||||||
| Commercial revenue fee | 51 | - | 93 | - | ||||||||||||||||||
| Total | 14,758 | 14,971 | 39,423 | 41,434 | ||||||||||||||||||
| Vessel operating expense | (7,022 | ) | (7,863 | ) | (21,464 | ) | (21,760 | ) | ||||||||||||||
| Drydock expense | (21 | ) | (1,860 | ) | (1,010 | ) | (2,453 | ) | ||||||||||||||
| Depreciation expense | (2,346 | ) | (2,422 | ) | (7,084 | ) | (6,509 | ) | ||||||||||||||
| General and administration expense | (940 | ) | (1,289 | ) | (2,541 | ) | (3,041 | ) | ||||||||||||||
| Gain on vessel disposal | - | - | 3,851 | - | ||||||||||||||||||
| Loss on debt extinguishment | - | (533 | ) | - | (1,287 | ) | ||||||||||||||||
| Interest expense and finance cost | (1,339 | ) | (1,644 | ) | (4,345 | ) | (4,578 | ) | ||||||||||||||
| Interest income | 95 | 140 | 270 | 561 | ||||||||||||||||||
| Other expenses and taxes, net | (171 | ) | (100 | ) | (425 | ) | (594 | ) | ||||||||||||||
| Net Income/(loss) | 3,014 | (600 | ) | 6,675 | 1,773 | |||||||||||||||||
| Adjusted net income/(loss) (2) | 3,014 | (67 | ) | 2,824 | 3,060 | |||||||||||||||||
| Net income/(loss) per share, basic and diluted | 0.12 | (0.02 | ) | 0.26 | 0.06 | |||||||||||||||||
| Adjusted net (loss)/income per share, basic and diluted (2) | 0.12 | (0.00 | ) | 0.11 | 0.11 | |||||||||||||||||
| Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | |||||||||||||||||||
| Net Income/(loss) | 3,014 | (600 | ) | 6,675 | 1,773 | |||||||||||||||||
| Add: Gain on vessel disposal | - | - | (3,851 | ) | - | |||||||||||||||||
| Add: Loss on debt extinguishment | - | 533 | - | 1,287 | ||||||||||||||||||
| Adjusted Net income/(loss) | 3,014 | (67 | ) | 2,824 | 3,060 | |||||||||||||||||
| Add: Depreciation expense | 2,346 | 2,422 | 7,084 | 6,509 | ||||||||||||||||||
| Add: Drydock expense | 21 | 1,860 | 1,010 | 2,453 | ||||||||||||||||||
| Add: Interest expense and finance cost | 1,339 | 1,644 | 4,345 | 4,578 | ||||||||||||||||||
| Add: Other taxes | 50 | 54 | 193 | 139 | ||||||||||||||||||
| Less: Interest income | (95 | ) | (140 | ) | (270 | ) | (561 | ) | ||||||||||||||
| Adjusted EBITDA (1) | 6,675 | 5,773 | 15,186 | 16,178 | ||||||||||||||||||
- Adjusted EBITDA represents net income before interest, other taxes, depreciation and amortization, drydock expense, gain on vessel disposal, loss on debt extinguishment and is used as a supplemental financial measure by management to assess our financial and operating performance. We believe that Adjusted EBITDA assists our management and investors by increasing the comparability of our performance from period to period. We believe that including Adjusted EBITDA as a financial and operating measure benefits investor in selecting between investing in us and other investment alternatives. Adjusted EBITDA does not represent and should not be considered as an alternative to net income/(loss) or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of Adjusted EBITDA may not be comparable to that reported by other companies.
- Adjusted net income/(loss) and related per share amounts is not a measure prepared in accordance with U.S. GAAP and should not be used in isolation or substitution of Company’s results.
| Vessel Utilization: | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | |||||
| Ship days (2) | 1,656 | 1,746 | 5,014 | 4,681 | |||||
| Less: Off-hire days | 3 | 11 | 19 | 65 | |||||
| Less: Off-hire days due to drydock | - | 73 | 41 | 89 | |||||
| Operating days (3) | 1,653 | 1,662 | 4,954 | 4,527 | |||||
| Fleet Utilization (4) | 100 | % | 95 | % | 99 | % | 97 | % | |
| Commercial Ship days (8) | 1,922 | - | 5,642 | - | |||||
| TCE per day- $ (1) | 8,900 | 9,008 | 7,940 | 9,153 | |||||
| Opex per day- $ (6) | 4,242 | 4,503 | 4,281 | 4,649 | |||||
| G&A expenses per day- $ (7) | 557 | 738 | 503 | 650 | |||||
| G&A expenses basis commercial days- $ (9) | 480 | 738 | 447 | 650 | |||||
| Vessels at period end | 18 | 19 | 18 | 19 | |||||
| Average number of vessels during the period (5) | 18 | 19 | 18 | 17 | |||||
- Time Charter Equivalent, or TCE revenue, are non-GAAP measures. Our method of computing TCE revenue is determined by voyage revenues less voyage expenses (including bunkers and port charges). Such TCE revenue, divided by the number of our operating days during the period, is TCE per day, which is consistent with industry practice. TCE revenue is included because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot charters and time charters), and it provides useful information to investors and management.
- Ship days: We define ship days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ship days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
- Operating days: We define operating days as the number of our ship days in a period less days required to prepare vessels acquired for their initial voyage and off-hire days associated with off-hire for undergoing repairs, drydocks or special surveys. The Company uses operating days to measure the number of days in a relevant period during which vessels should be capable of generating revenues.
- Fleet utilization is defined as the ratio of operating days to ship days.
- Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of ship days divided by the number of calendar days in that period.
- Opex per day: is calculated by dividing vessel operating expenses by ship days for the relevant time period.
- G&A expenses per day: is calculated by dividing general and administrative expenses by ship days for the relevant time period.
- Commercial Ship days: We define commercial ship days as the total of Ship days and the aggregate number of days during the period for which we have each vessel in our commercial fleet under our management. Commercial ship days are an indicator of the size of our owned and managed fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
- G&A expenses basis commercial days: is calculated by dividing running general and administrative expenses by commercial ship days for the relevant time period.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands of U.S. Dollars)
| As at | September 30, 2019 | December 31, 2018 | |
| ASSETS | |||
| Cash & cash equivalents | 19,874 | 15,218 | |
| Restricted cash (current and noncurrent) | 10,963 | 11,577 | |
| Vessels, net | 189,294 | 201,774 | |
| Other receivables | 6,722 | 8,030 | |
| Other assets | 868 | 341 | |
| Total assets | 227,721 | 236,940 | |
| LIABILITIES AND EQUITY | |||
| Accounts payable and accrued liabilities | 4,434 | 4,340 | |
| Operating lease liability | 36 | - | |
| Deferred revenue | 1,214 | 682 | |
| Total debt, net of deferred finance costs | 91,727 | 105,674 | |
| Total liabilities | 97,411 | 110,696 | |
| Shareholders' equity | 130,310 | 126,244 | |
| Total liabilities and shareholders’ equity | 227,721 | 236,940 |
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In thousands of U.S. Dollars)
| Nine months Ended September 30, 2019 | Nine months Ended September 30, 2018 | |||||
| Cash flows from operating activities | ||||||
| Net Income | 6,675 | 1,773 | ||||
| Adjustments to reconcile net income to net cash provided by | ||||||
| operating activities: | ||||||
| Depreciation | 7,084 | 6,509 | ||||
| Amortization of deferred finance fees | 251 | 472 | ||||
| Loss on debt extinguishment | - | 1,287 | ||||
| Gain on vessel disposal | (3,851 | ) | - | |||
| Changes in operating assets and liabilities | 1,463 | (484 | ) | |||
| Net cash provided by operating activities | 11,622 | 9,557 | ||||
| Cash flows from investing activities | ||||||
| Payments for vessel acquisitions & improvements | (205 | ) | (39,215 | ) | ||
| Net proceeds from vessel sale | 9,659 | - | ||||
| Purchase of other fixed assets | (69 | ) | (29 | ) | ||
| Net cash provided by/ (used in) investing activities | 9,385 | (39,244 | ) | |||
| Cash flows from financing activities | ||||||
| Loan Proceeds | - | 93,710 | ||||
| Payment of debt extinguishment fees | (21 | ) | (637 | ) | ||
| Loan repayments & prepayments | (14,175 | ) | (77,271 | ) | ||
| Payment of deferred finance fees and other loan related fees | (160 | ) | (258 | |||
| Dividends paid | - | (24,854 | ) | |||
| Repurchase of common stock | (2,609 | ) | (6,231 | |||
| Net cash (used in) financing activities | (16,965 | ) | (15,541 | ) | ||
| Net increase/(decrease) in cash and cash equivalents | 4,042 | (45,228 | ) | |||
| Cash and cash equivalents and Restricted cash at the beginning of the period | 26,795 | 73,822 | ||||
| Cash and cash equivalents and Restricted cash at period end | 30,837 | 28,594 | ||||
About Pioneer Marine Inc.
Pioneer Marine is a leading ship owner and global drybulk handysize transportation service provider. Pioneer Marine currently owns seventeen Handysize and one Supramax drybulk carriers and is commercial manager of seven Handysize vessels.
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydock and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors.
Contact:
Pioneer Marine Inc.
Torben Janholt CEO
+45 21 639 232, +30 212222 3750
Investor Relations / Media
Capital Link, Inc.
Kevin Karlis
+212 661 7566
pioneermarine@capitallink.com