Pyxis Tankers financial results for three and nine months ended September 30, 2021

Nov 18 2021


Pyxis Tankers Inc. (the “Company” or “Pyxis Tankers”), an international pure play product tanker company, announced its unaudited results for the three and nine month periods ended September 30, 2021.

Summary

For the three months ended September 30, 2021, our Revenues, net were $7.0 million. For the same period, our time charter equivalent (“TCE”) revenues were $3.4 million, represented a decrease of approximately $0.9 million or 21.3% over the comparable period in 2020. Our net loss attributable to common shareholders for the three months ended September 30, 2021 was $3.7 million, represented an increase of $1.8 million from the prior period. For the third quarter of 2021, the loss per share (basic and diluted) was $0.10 compared with a loss per share of $0.09 for the same period in 2020. Our negative adjusted EBITDA for the three months ended September 30, 2021 was $1.3 million, represented a decrease of $1.9 million over the comparable period in 2020. Please see “Non-GAAP Measures and Definitions” below.

 

Valentios Valentis, our Chairman and CEO commented:

“The chartering environment for product tankers in the third quarter of 2021 continued to be depressed, primarily due to a poor spot market. The period market, albeit more stable than the spot market, also encountered a further decline in activity. In the third quarter of 2021, the average TCE for our medium range tankers (“MRs”) was $7,326 which was dramatically lower than the TCE achieved the same period in 2020. Market conditions have since improved, and as of November 12, 2021, we had booked 49% of available days for the fourth quarter of 2021 at an average TCE rate of approximately $ 10,900 for our MRs. One bright spot for us during the third quarter of 2021 was the improved performance of our smaller tankers which achieved higher utilization and lower operating expenses.

 

Greater demand for refined petroleum products, especially from Organization for Economic Co-operation and Development (“OECD”) economies recovering from COVID-19, have helped reduce global inventories to levels at or below 5-year averages. According to the IEA, in September oil inventories within the OECD fell to their lowest level since 2015. Overall, global oil demand is forecasted to increase by 5.5 million barrels/day in 2021 and a further 3.3 million barrels in 2022 to 99.6 mb/d, slightly above pre-COVID-19 levels. Additionally, refined products tanker ton-mile demand could be bolstered by geographic dislocations taking place in the global refinery industry as new capacity is being added in the Middle East and Asia, while refinery capacity is being reduced or constrained in the US, Europe and Australia. Continued high refinery utilization and improving transportation activities are positive signs for tanker rates. For example, global gasoline demand is now 2% below pre-COVID levels, compared to being down more than 10% at the start of the year. Further relaxation of international travel restrictions should help air travel and lead to greater consumption of jet fuel, an important cargo for our industry.

 

While we maintain a positive outlook about the long-term prospects of the product tanker sector and the expanding global economic recovery, we are guarded about the impact of potential new COVID variants. Improving global GDP growth and expanding personal and commercial mobility should increase demand for seaborne transportation of a broad range of petroleum products. The International Monetary Fund (“IMF”) recently updated its global growth forecast to 5.9% this year and maintained a further 4.9% increase for 2022. According to a leading research firm, seaborne trade of oil products should rise 7.1% this year and a further 5.1% to 1,022 million tons, just shy of 2019 levels. The vessel supply picture continues to look positive due to the aging global fleet, continued low ordering of new tankers and a substantial increase in vessel demolition. At the end of October, 2021, the orderbook for MRs was 6% of the global fleet, equaling the number of vessels 20 years of age or older. The combination of high construction prices of over $40 million for a new MR with deliveries into 2024 and various uncertainties surrounding environmental regulations have discouraged ordering of new MRs. Vessel demolitions are on a record pace as 32 MRs were scrapped in the first nine months of the year.

 

Based on our optimistic view of the tanker market, we have decided to further expand our fleet. In July 2021 we acquired a 2013 built eco-efficient MR which we named the “Pyxis Karteria” and on November 15, 2021, we signed a Memorandum of Agreement to acquire from an affiliated company, the “Pyxis Lamda”, a 2017-built 50,296 dwt. eco-efficient MR that was constructed at SPP Shipbuilding Co. Ltd. (“SPP”) in South Korea, for $32 million. The Company’s audit committee, consisting of independent and disinterested members of the Company’s board of directors, have negotiated and approved this acquisition, which is expected to close in December 2021. The consideration for this transaction will consists of cash on hand, the issuance by the Company of $3 million under an amended unsecured promissory note due 2024 and $3 million in common shares; the non-cash component representing approximately 19% of the purchase price. The remaining portion of the consideration of this purchase will be funded by borrowings under a new $29 million loan from one of our existing lenders, which will also refinance an outstanding loan on the Pyxis Malou, our 2009 built tanker. This 5-year bank loan will bear interest at Libor + 3.15%, have principal amortization of $625,000 per quarter, and be secured by both vessels. This loan is subject to execution of definitive loan documentation and standard closing conditions.

 

We believe that these acquisitions (including the acquisition of Pyxis Karteria earlier this year) of quality modern tonnage will set us on a path towards future growth and optimally position the Company to participate in the expected recovery of our sector.”

 

Results for the three months ended September 30, 2020 and 2021

For the three months ended September 30, 2021, we reported a net loss attributable to common shareholders of $3.7 million, or $0.10 basic loss per share, compared to a net loss attributable to common shareholders of $1.9 million, or $0.09 basic loss per share, for the same period in 2020. The weighted average share count had increased by 16.8 million shares from the third quarter of 2020 to approximately 38.3 million common shares in the third quarter of 2021. The daily TCE of $6,988 during the third quarter of 2021 was 40.7% lower than the comparable period in 2020. This decrease was mainly attributed to higher voyage related costs and commissions, of $2.9 million during the three months ended September 30, 2021 compared to $0.7 million in the same period of 2020. This increase was mostly attributed to higher spot employment for our MRs at depressed charter rates and higher average bunker fuel costs. Vessel operating expenses increased by $0.9 million, or 30.4%, for the three months ended September 30, 2021 compared to the third quarter of 2020. However, lower interest and finance costs of approximately $0.5 million, primarily as a result of the refinancing of the previous $24 million loan facility secured by the Pyxis Epsilon (the “Eighthone Loan”) with a $17 million loan at a lower interest rate, mitigated the loss for the three months ended September 30, 2021. Our negative adjusted EBITDA of $1.3 million, represented a decrease of $1.9 million from $0.6 million for the same period in 2020.

 

Results for the nine months ended September 30, 2020 and 2021

For the nine months ended September 30, 2021, we reported a net loss attributable to common shareholders of $7.3 million, or $0.21 basic loss per share, compared to a net loss attributable to common shareholders of $4.3 million, or $0.20 basic loss per share for the same period in 2020. The weighted average share count increased by 13.5 million shares to approximately 35.0 million common shares for the most recent nine-month period. Lower daily TCE of $9,370 during the nine-month period ended September 30, 2021, resulting from poor spot chartering conditions and substantially higher bunker costs, were the primary factors that contributed to an operating loss of $4.0 million during the recent period. For the comparable period in 2020, the daily TCE was $11,825 with operating loss of $0.5 million. In 2021, revenues, net of $17.2 million were relatively stable compared to the same period in 2020. The new vessel ‘Pyxis Karteria’, contributed 73 additional operating days during the nine months ended September 30, 2021. The increase of $2.0 million in voyage related costs and commissions was partially offset by a decrease of approximately $1.3 million in interest and finance costs, net. Increased vessel operating expenses, general and administrative expenses, depreciation and amortization of special survey costs aggregating $1.5 million negatively impacted results for the most recent period. These additional costs, along with the recognition of a $0.5 million loss from debt extinguishment associated with the Eighthone Loan refinancing and dividends declared or accrued of approximately $0.4 million for the Series A Convertible Preferred Stock, resulted in a $3.0 million increased net loss attributable to common shareholders for the nine months ended September 30, 2021 compared to the prior period.

 

Our negative adjusted EBITDA of $0.1 million represented a decrease of $3.1 million from $3.0 million for the same nine-month period in 2020.

 

2021 Annual Meeting of Shareholders

At the Company’s 2021 Annual Meeting of Shareholders held on November 11, 2021, Mr. Valentis, a Class 1 Director, was re-elected for the term ending in 2024.

 



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