Pyxis Tankers, a growth-oriented pure play product tanker company, announced unaudited results for the three months ended March 31, 2021.
Summary
For the three months ended March 31, 2021, our Revenues, net were $5.2 million, while our time charter equivalent revenues were $4.3 million, a decrease of $0.7 million, or 13.6% compared to the same period in 2020. Net loss attributable to common shareholders for the three months ended March 31, 2021 was $2.1 million, or a loss per share (basic and diluted) of $0.07 which was greater than the results from the comparable period of 2020. Our Adjusted EBITDA was $0.8 million which represented a decrease of $0.5 million over the comparable 2020 quarter. Please see “Non-GAAP Measures and Definitions” below.
Valentios Valentis, Chairman and CEO commented:
“Our operating results for the three months ended March 31, 2021 reflected a continuation of a difficult chartering environment. The average daily time charter equivalent rates (“TCE”) for our medium range product tankers (“MR”) was $12,738 in the first quarter of 2021, which we believe was much better than rates that could have been achieved in the spot market. We benefited from staggered, shorter-term time charters which provided us predictable cash flow. As of June 1, 2021, 100% of available days in the second quarter of 2021 were booked at an average rate of $13,331 for our MR’s.
As previously disclosed, we completed the sale of the Pyxis Delta, our 2006 built non-eco tanker, in January 2020, which was the first step in a series of transactions to de-lever our balance sheet, enhance our debt profile, improve liquidity and better position us for growth opportunities. Since the beginning of the second half, 2020 we have completed two loan re-financings and two equity offerings, raising over $62 million in the aggregate. For example, during the first quarter of 2021, we completed a $25 million common stock private placement and a $17 million loan for the Pyxis Epsilon. More recently, we announced the acquisition of a 2013 built MR which we expect to take delivery by early July.
Based on commercial sources, the evidence of economic improvement has expanded from many parts of Asia to the U.S. and certain areas of Western Europe. Demand for refined petroleum products has improved as global inventories now approach five year averages. In April, the International Monetary Fund revised its forecast of global growth to 6% this year, followed by 4.4% in 2022. We believe the easing of government restrictions and protocols on personal and commercial activities for the prevention of Covid-19 to vastly improve mobility and consequently dramatically increase the global demand for transportation fuels. As the global economies return to a “New Norm” while still managing the uncertain path of COVID-19 and its various mutations, we expect the product tanker sector to continue to experience significant volatility in the short-term. However, we anticipate a meaningful, more sustainable recovery in our sector should start to occur this fall. Besides rising demand, the vessel supply outlook continues to improve. The ordering of new product tankers continues to be low. The uncertainty surrounding the chartering environment, expanding environmental regulations, new ship and engine designs, rapid escalating construction costs, evolving lower-carbon fuel choices and limited availability of competitive debt continue to constrain new ordering activity. In addition, a number of leading Asian shipyards are now booked through 2023 with vessel construction contracts from booming sectors, such as, drybulk and containerships. Lastly, the aging fleet should lead to more scrapping of older, less efficient tankers and further reduce the worldwide fleet. For example, according to a leading industry source, it was recently estimated that approximately 7% of the global fleet of MR2 are 20 years of age or more. By early May of this year, reportedly 16 MRs had been demolished, and if the same pace of scrapping continues for the balance of 2021, it could lead to the highest level over the past 11 years. High scrap metal prices are also contributing to this pick-up in activity. Overall, we expect net annual supply growth for MR’s to be approximately 2% in 2021 through 2022. Therefore, we continue to be optimistic for the long-term.”
Results for the three months ended March 3 1 , 20 20 and 20 2 1
For the three months ended March 31, 2021, we reported Revenues, net of $5.2 million, a decrease of $1.4 million, or 21.0%, from $6.6 million in the comparable period of 2020 primarily due to lower charter rates. During the first quarter of 2021, all of our Eco-MRs were under existing time charters resulting in an average daily TCE of $12,738.
Our net loss attributable to common shareholders for the period ended March 31, 2021, was $2.1 million, or a loss per share of $0.07 (basic and diluted), compared to a net loss of $1.2 million, or a loss per share of $0.06 (basic and diluted) for the same period in 2020. Lower daily TCE of $10,865 and lower utilization of 87.6% for the fleet during the quarter ended March 31, 2021, were compared to $11,917 and 91.4%, respectively, in the 2020 period. Operating expenses and vessel management fees were comparatively lower in the 2021 period as a result of the sale of our oldest MR in January 2020. The most recent quarter of 2021 was negatively impacted by a $0.5 million loss, or $0.02 per share, associated with loan refinancing of the Pyxis Epsilon at the end of March.
Our Adjusted EBITDA was $0.8 million for the three-month period ended March 31, 2021, which represented a decrease of $0.4 million from $1.2 million for the same period in 2020.
| Three Months ended March 3 1 , | |||
| 20 20 | 20 2 1 | ||
| (Thousands of U.S. dollars, except for daily TCE rates) | |||
| Revenues, net | 6,635 | 5,242 | |
| Voyage related costs and commissions | (1,682) | (961) | |
| Time charter equivalent revenues 1 | 4,953 | 4,281 | |
| Total operating days 2 | 416 | 394 | |
| Daily time charter equivalent rate 1, 2 | 11,917 | 10,865 | |
1 Subject to rounding; please see “Non-GAAP Measures and Definitions” below.
2 Pyxis Delta was sold on January 13, 2020, and has been excluded from the calculation for the three months ended March 31, 2020 (the vessel had been under TC employment for approximately 2 days in January 2020 when it was redelivered from charterers in order to be sold).
Management’s Discussion and Analysis of Financial Results for the Three Months ended March 3 1 , 20 20 and 20 2 1 (Amounts are presented in million U.S. dollars, rounded to the nearest one hundred thousand, except as otherwise noted)
Revenues, net : Revenues, net of $5.2 million for the three months ended March 31, 2021, represented a decrease of $1.4 million, or 21.0%, from $6.6 million in the comparable period of 2020, primarily due to lower chartering activity.
Voyage related costs and commissions: Voyage related costs and commissions of $1.0 million for the quarter ended March 31, 2021, represented a decrease of $0.7 million, or 42.9%, compared to $1.7 million for the same period in 2020. The decrease was primarily a result of a decline in spot activity for our MRs from 29 days during the three months ended March 31, 2020 to four days during the comparable period in 2021. Under spot charters, all voyage expenses are typically borne by us rather than the charterer and a decrease in spot chartering results in a decrease in voyage related costs and commissions.
Vessel operating expenses: Vessel operating expenses of $2.5 million for the three months ended March 31, 2021, represented a decrease of $0.2 million, or 8.1%, compared to the same period in 2020 mainly attributed to the sale of Pyxis Delta that occurred in January 2020.
General and administrative expenses: General and administrative expenses of $0.6 million for the quarter ended March 31, 2021 were 13.8% higher than the same period in 2020 primarily due to higher professional fees at the time.
Management fees: For the three months ended March 31, 2021, management fees paid to our ship manager, Pyxis Maritime Corp. (“Maritime”), a company related to Mr. Valentios Valentis, our chairman and chief executive officer, and to International Tanker Management Ltd. (“ITM”), our fleet’s technical manager, were $0.3 million in aggregate, or 18.1% lower than in the 2020 period due to the elimination of one vessel.
Amortization of special survey costs: Amortization of special survey costs of $0.1 million for the quarter ended March 31, 2021, increased slightly due to three vessel drydockings completed in the second half of 2020.
Depreciation: Depreciation of $1.1 million for the three months ended March 31, 2021, was flat compared to the same period in 2020.
Gain from the sale of vessel, net : During the period ended March 31, 2020, we recorded a nominal gain from the sale of Pyxis Delta. No such gain was recorded for the comparable quarter in 2021.
Interest and finance costs, net: Interest and finance costs, net, for the three months ended March 31, 2021 of $1.1 million, represented a decrease of $0.2 million or 13.4% from the period in 2020. The decrease was primarily attributable to lower LIBOR rates paid on floating rate bank debt compared to the same period in 2020.
Loss from debt extinguishment: For the three months ended March 31, 2021 we have recorded a loss from debt extinguishment of $0.5 million primarily reflecting a prepayment fee and the write-off of remaining unamortized balance of deferred financing costs, both of which are associated with the loan on the Pyxis Epsilon that was refinanced at the end of the most recent quarter. No such loss was recorded for the three months ended March 31, 2020.
