MAJURO, Marshall Islands, May 14, 2020 (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 March 31, 2020.
Financial Highlights at a glance:
| First Quarter 2020 | First Quarter 2019 | ||
| Net (loss) / income | ($0.9) million | $1.5 million | |
| Time Charter equivalent (“TCE”) revenue | $9.7 million | $14.4 million | |
| Adjusted EBITDA* | $2.5 million | $6.2 million |
Jim Papoulis, Chief Executive Officer commented: “The beginning of 2020 was marked by the COVID-19 outbreak, and global markets were forced to encounter unprecedented challenges across all aspects of economic activity. In response to these challenges, Pioneer commenced the mobilizing of resources from day one, focused on meeting the needs of all our clients, safeguarding the health and safety of our employees and ensuring undisrupted business continuity.
“The first quarter results are satisfactory as we report a positive EBITDA of $2.5 million considering that many segments of our industry were severely affected by the coronavirus outbreak. The market was weaker due to many countries imposing strict lockdown measures and implementing the reduced operational mode of many ports worldwide, making it a challenge to send our vessels to trade throughout Europe and the Atlantic. Even with many ports being considered "affected", Pioneer, with proper preventive measures undertaken for the safety and health of its crew, was able to achieve a high utilization rate of 98%.
“Despite these global difficulties, Pioneer managed to achieve a TCE rate of $6,681 which was above market levels.
“I would like to salute our crew members for doing what is necessary to ensure our smooth operation as well as all of our employees who have continued to work under these trying moments, in order to ensure that the global trade continues, even when it proves to be a challenge.
“As the economic impact of COVID-19 deepens, so do the rapidly developing imbalances of the shipping market. However, we remain optimistic that the market will recover during the following quarters and that we will weather this storm with the best possible outcome.”
*For reconciliation and definition of EBITDA/Adjusted EBITDA refer to “Summary of Operating Data (unaudited)” section within this press release
Covid-19 Outbreak:
On March 11, 2020, the World Health Organization declared the 2019 Novel Coronavirus (the “Covid-19”) outbreak a pandemic. Many countries, ports and organizations, including those where Pioneer conducts a large part of its operations, have implemented measures such as quarantines and travel restrictions to combat the outbreak.
Pioneer, having as a primary concern the safety and wellbeing of all our employees ashore and onboard the vessels whilst at the same time serving our clients’ needs, had taken precautionary measures early on. These initiatives include among others, providing a safe work environment for the office employees by proper disinfection being effected on our premises and maintaining a thorough hygiene in the office, encouraging all meetings be held virtually rather than physically at the workplace in order to limit any physical interaction, establishing a “Work from Home” policy for all our office employees by providing the required infrastructure and tools to enable efficient and effective conduct of business. We have also suspended crew changes and superintendent visits since early March, imposed severe limitation of travelling, ensured the continuous supplying of our fleet with protective equipment and additional medical supplies as well as psychological support to all our seafarers from dedicated personnel on a regular basis.
Furthermore, we are constantly monitoring the developing situation and are making all the necessary preparations to address and mitigate, to the extent possible, the impact of COVID-19 to our Company’s financial position via cost rationalisation projects throughout our organization and continued efforts to optimise our efficiencies and revenue earning capacity. As always, we remain in close cooperation with our Lenders monitoring all our financial covenants and ensuring prompt compliance.
Liquidity & Capital Resources:
As of March 31, 2020, the Company had a total liquidity of $21.2 million inclusive of $10.4 million in restricted cash. The Company has no capital commitments.
During the first quarter of 2020 one more vessel was fitted with the Ballast Water Treatment System (‘BWTS’) without any disruption in her operation whilst she was engaged in trading, increasing to four the total number of vessels already fitted with BWTS.
Financial Review: Three months ended March 31, 2020
Adjusted EBITDA totalled to $2.5 million for the quarter, 60% decreased as compared to first quarter of 2019.
TCE rate of $6,681 for the first quarter of 2020, is decreased by 21.6% compared to TCE rate of $8,523 for the same period in 2019. The current Covid-19 pandemic has had a global impact with negative results among almost all sectors of economic activity. The shipping industry is unavoidable affected by this unprecedent financial environment - despite the current weak market conditions, the Company managed to achieve a TCE rate above market indices while maintaining a high utilisation rate of our fleet at 98.1%.
The continuous cost-reducing initiatives and optimisation of cost control procedures developed by the Company achieved a healthy OPEX rate of $4,337 per day, remaining at the same levels both in first quarter of 2020 and 2019.
General and administrative expenses increased by $0.1 million or 15.4% during the first quarter of 2020 mainly affected by one-off charges. Excluding one-off charges general and administrative expenses for the first quarter of 2020 would be equal to the comparative quarter of 2019.
Depreciation cost amounts to $2.1 million impacted downwards due to fleet reduction from 19 vessels in the first quarter of 2019 to 16 vessels in the first quarter of 2020.
The first quarter of 2020 was impacted by the write-off of bunkers inventory of $0.2 million as a result of the reduction in the bunkers prices affecting the net realizable value of the inventory as at quarter end. No such charges were recorded in the comparative period quarter.
Interest and finance cost of $1.0 million was decreased by 34.8% compared to prior year same period, mainly due to the reduced Libor rates combined with reduced loan balances.
Cash Flow Review: Three months ended March 31, 2020
Cash and cash equivalents, including restricted cash decreased by $6.1 million as at March 31, 2020 and amounted to $21.2 million as compared to $27.3 million as at December 31, 2019.
The decrease is attributable to $14.8 million cash used in financing activities partially offset with $7.7 million cash provided by investing activities and $1.0 million cash provided by operating activities.
Cash flow activities highlights during the first quarter include:
- $7.3 million cash inflow from vessel disposal completed within the first quarter;
- $0.4 million cash inflow from expected vessel sale;
- $7.2 million scheduled loan repayments and prepayments due to vessel sale, and
- $7.6 million dividend distribution.
Current Fleet List
| Vessel | Yard | DWT | Year Built | ||
| Owned Fleet | |||||
| Handysize | |||||
| 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 | ||
Commercially Managed Fleet
| Handysize | |||
| Handy 1 | Samjin Shipbuilding Co Ltd | 33,755 | 2010 |
| Handy 2 | Samjin Shipbuilding Co Ltd | 33,755 | 2010 |
| Handy 3 | Samjin Shipbuilding Co Ltd | 33,755 | 2011 |
| Handy 4 | Samjin Shipbuilding Co Ltd | 33,762 | 2011 |
| Handy 5 | Samjin Shipbuilding Co Ltd | 33,755 | 2010 |
| Handy 6 | Samjin Shipbuilding Co Ltd | 33,757 | 2010 |
Summary of Operating Data (unaudited)
| | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | ||
| Revenue, net | 11,066 | 15,911 | ||
| Voyage expenses | (1,421 | ) | (1,541 | ) |
| Time charter equivalent revenue | 9,645 | 14,370 | ||
| Commercial revenue fee | 113 | 15 | ||
| Total | 9,758 | 14,385 | ||
| Vessel operating expense | (6,385 | ) | (7,410 | ) |
| Drydock expense | (2 | ) | (734 | ) |
| Depreciation expense | (2,083 | ) | (2,403 | ) |
| General and administration expense | (879 | ) | (753 | ) |
| Loss on vessel disposal | (74 | ) | - | |
| Write off of inventory | (219 | ) | - | |
| Interest expense and finance cost, net | (1,021 | ) | (1,567 | ) |
| Interest income | 34 | 68 | ||
| Other expenses and taxes, net | (89 | ) | (96 | ) |
| Net (loss) / Income | (960 | ) | 1,490 | |
| Add: Loss on vessel disposal | 74 | - | ||
| Add: Loss on debt extinguishment | - | 2 | ||
| Add: Write off of inventory | 219 | - | ||
| Adjusted net (loss) / Income (2) | (667 | ) | 1,492 | |
| Net (loss) / Income per share, basic and diluted | (0.04 | ) | 0.06 | |
| Adjusted net (loss) / Income per share, basic and diluted (2) | (0.03 | ) | 0.06 | |
| Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |||
| Net (loss) / Income | (960 | ) | 1,490 | |
| Add: Depreciation expense | 2,083 | 2,403 | ||
| Add: Interest expense and finance cost, net | 1,021 | 1,567 | ||
| Add: Other taxes | 50 | 48 | ||
| Less: Interest income | (34 | ) | (68 | ) |
| EBITDA (1) | 2,160 | 5,440 | ||
| Add: Loss on debt extinguishment | - | 2 | ||
| Add: Loss on vessel disposal | 74 | - | ||
| Add: Drydock expense | 2 | 734 | ||
| Add: Write off of inventory | 219 | - | ||
| Adjusted EBITDA (1) | 2,455 | 6,176 | ||
(1) Adjusted EBITDA represents net income before interest, other taxes, depreciation and amortization, drydock expense, gain/ (loss) on vessel disposition, restructuring costs, gain/ (loss) on debt extinguishment and write off of inventory 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.
(2) 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.
Summary of Operating Data (unaudited)
| Vessel Utilization: | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |||||
| Ship days (2) | 1,472 | 1,710 | |||||
| Less: Off-hire days | 28 | 4 | |||||
| Less: Off-hire days due to drydock | - | 20 | |||||
| Operating days (3) | 1,444 | 1,686 | |||||
| Fleet Utilization (4) | 98 | % | 99 | % | |||
| Commercial Ship days (8) | 549 | 178 | |||||
| TCE per day - $ (1) | 6,681 | 8,523 | |||||
| Opex per day - $ (6) | 4,337 | 4,333 | |||||
| G&A expenses per day - $ (7) | 597 | 439 | |||||
| G&A expenses basis commercial days - $ (9) | 435 | 393 | |||||
| Vessels at period end | 16 | 19 | |||||
| Average number of vessels during the period (5) | 16 | 19 | |||||
(1) 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.
(2) 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.
(3) 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.
(4) Fleet utilization is defined as the ratio of operating days to ship days.
(5) 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.
(6) Opex per day: is calculated by dividing vessel operating expenses by ship days for the relevant time period.
(7) Adjusted G&A expenses per day: is calculated by dividing running general and administrative expenses by ship days for the relevant time period.
(8) 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.
(9) 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 | March 31, 2020 | December 31, 2019 |
| ASSETS | ||
| Cash & cash equivalents | 10,827 | 16,362 |
| Restricted cash (current and noncurrent) | 10,350 | 10,957 |
| Vessels held for sale | - | 7,350 |
| Vessels, net | 172,594 | 174,635 |
| Other receivables | 6,587 | 7,425 |
| Other assets | 76 | 103 |
| Total assets | 200,434 | 216,832 |
| LIABILITIES AND EQUITY | ||
| Accounts payable and accrued liabilities | 4,512 | 5,014 |
| Other current liabilities | 380 | - |
| Deferred revenue | 627 | 1,144 |
| Total debt, net of deferred finance costs | 77,613 | 84,773 |
| Total liabilities | 83,132 | 90,931 |
| Shareholders' equity | 117,302 | 125,901 |
| Total liabilities and shareholders’ equity | 200,434 | 216,832 |
Condensed Consolidated Statement of Cash Flows (Unaudited)
(In thousands of U.S. Dollars)
| Three months Ended March 31, 2020 | Three months Ended March 31, 2019 | ||||
| Cash flows from operating activities | |||||
| Net (loss)/ Income | (960 | ) | 1,490 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation | 2,083 | 2,403 | |||
| Amortization of deferred finance fees | 70 | 90 | |||
| Write off of inventory | 219 | - | |||
| Loss on vessel disposal | 74 | - | |||
| Staff leaving indemnities provision | 8 | - | |||
| Changes in operating assets and liabilities | (469 | ) | (152 | ) | |
| Net cash provided by operating activities | 1,025 | 3,831 | |||
| Cash flows from investing activities | |||||
| Payments for vessel improvements | (15 | ) | (164 | ) | |
| Cash proceeds from vessel sales | 7,343 | - | |||
| Cash received in advance for expected sale | 380 | - | |||
| Purchase of other fixed assets | (5 | ) | (45 | ) | |
| Net cash provided by / (used in) investing activities | 7,703 | (209 | ) | ||
| Cash flows from financing activities | |||||
| Loan repayments and prepayments | (7,230 | ) | (6,558 | ) | |
| Dividends paid | (7,639 | ) | - | ||
| Payment of deferred finance fees and other loan related fees | - | (143 | ) | ||
| Repurchase of common stock | - | (429 | ) | ||
| Net cash used in financing activities | (14,869 | ) | (7,130 | ) | |
| Net decrease in cash and cash equivalents | (6,141 | ) | (3,508 | ) | |
| Cash and cash equivalents and Restricted cash at the beginning of the period | 27,318 | 26,795 | |||
| Cash and cash equivalents and Restricted cash at period end | 21,177 | 23,287 | |||
About Pioneer Marine Inc.
Pioneer Marine is a leading ship owner and global drybulk handysize transportation service provider. Pioneer Marine currently owns sixteen Handysize drybulk carriers and is commercial manager of six 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.
Jim Papoulis - CEO
+30 212222 3750
Korinna Tapaktsoglou - CFO
+30 212222 3750
Investor Relations / Media
Capital Link, Inc.
Kevin Karlis
+212 661 7566
pioneermarine@capitallink.com