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Pioneer Marine Inc. Announces Financial Results for the Quarter and the Six Months Ended June 30, 2021

·21-min read

MAJURO, Marshall Islands, July 30, 2021 (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 and the six months ended June 30, 2021.

Financial Highlights at a glance:

Second quarter
2021

Second quarter
2020

Net loss

($7.1) million

($6.5) million

Adjusted net income / (loss)*

$1.4 million

($2.2) million

Time Charter equivalent (“TCE”) revenue

$10.7 million

$7.4 million

EBITDA

($5.5) million

($3.6) million

Adjusted EBITDA*

$2.9 million

$0.8 million

Jim Papoulis, Chief Executive Officer, commented: “Recent market trends have bolstered the year of 2021, paving an overall much healthier year for the shipping industry. The dry cargo market has taken many by surprise so far this year as rates have changed upwards to their highest levels in over a decade. Bulker owners feel confident that the market should retain its strength over the next two to three years, and the reason for their optimism is mainly due to tonnage growth and a continuation of strong demand since strong freight rates are being experienced in all segments. It is paramount to note that COVID-19 pandemic played a strong role in the rise of commodities prices.

“Pioneer Marine for the second quarter of 2021 announces an adjusted net income of $1.4 million and adjusted EBITDA $2.9 million. We are pleased with the performance of the Company, and we look forward to a promising future, which may bring both challenges and opportunities alike.

“These past months mark a milestone period for our Company, as following our shareholders’ approval Pioneer has entered into agreements for the sale of all remaining fleet vessels. Furthermore, our board has approved the proposal of the executive management team consisting of Mrs. Korinna Tapaktsoglou and myself to proceed with the buyout of the group’s management entities. Following the completion of the disposals and the capital gains distribution we will work closely with our board to ensure a smooth transition of ownership for the Pioneer group of companies. This is a new chapter in our Pioneer journey, and we are grateful for our team that supports us and our partners that have trusted us with the management of their assets. After the buyout is completed, we will be managing a fleet of 13 handy vessels and further expansion is our primary goal. “

Korinna Tapaktsoglou, Chief Financial Officer of the Company commented: “We are pleased with the results and developments announced today as we have worked hard to make sure that Pioneer team continues its successful track record while protecting shareholders interest at all times. We have complete trust that the Company will remain strong and grow further to the benefit of all stakeholders.”

*For reconciliation and definition of Adjusted Net Income/(Loss) and EBITDA/Adjusted EBITDA refer to “Summary of Operating Data (unaudited)” section within this press release.

Recent Events:

Following the EGM resolutions passed on June 23, 2021, the Company has agreed to sell the remaining vessels of the fleet on terms determined and approved by the Board of Directors. For each vessel’s sale, the Company entered into a respective Memorandum of Agreement. All vessels will be delivered with attached charter parties to their new owners and their deliveries are anticipated to be completed by the end of the third quarter 2021.

The Executive Management team of the Company consisting of Mr. Jim Papoulis (CEO) and Mrs. Korinna Tapaktsoglou (CFO) has reached an agreement with the Board of Directors to proceed with the Management Buy Out (“MBO”) of the management entities of the Pioneer Marine Inc. group of Companies. The agreement provides that the shares of the three management entities currently owned by Pioneer Marine Inc. will be transferred to an entity controlled by Mr. Papoulis and Mrs. Tapaktsoglou. The transaction is expected to be completed no later than August 31, 2021. Following the completion of the fleet disposal, the Executive Management team will also explore the possibility to acquire the shares of Pioneer Marine Inc.

On June 29, 2021, the Board of Directors of Pioneer Marine Inc. declared a cash dividend of $0.35 per issued and outstanding share of company’s Common Stock. The dividend was paid on July 13, 2021, to stockholders of record as of July 6, 2021.

Additionally, on July 30, 2021, the Board of Directors of Pioneer Marine Inc. declared another cash dividend of $0.75 per issued and outstanding share of company’s Common Stock. The dividend will be paid on August 13, 2021, to stockholders of record as of August 6, 2021.

Liquidity & Capital Resources:

As of June 30, 2021, the Company had a total liquidity of $22.2 million inclusive of $5.7 million in restricted cash.

Fleet developments:

Pioneer Marine completed the following vessels’ disposals during the second quarter of 2021 and up to date:

  • During April 2021 the Company completed the disposals of M/V Eden Bay, M/V Alsea Bay and M/V Emerald Bay and delivered the vessels to their new owners on a charter free basis.

  • In June 2021 the Company also completed the disposals of MV Mykonos Bay and MV Monterey Bay and delivered the vessels to their new owners on a charter free basis.

  • Finally, during July 2021, two more vessels were disposed to their new owners the MV Jupiter Bay and the MV Venus Bay, both vessels were delivered with attached charter parties.

Financial Review: Three months ended June 30, 2021

The reported results for the three-month period ended June 30, 2021 amount to $7.1 million net loss as compared to $6.5 million net loss for the respective previous year period. Average number of vessels during the three-month period ended June 30, 2021, was 9 vessels versus 16 vessels in the comparative period last year. Net loss for the second quarter of 2021 was affected by the non – cash impairment charge of $8.5 million relating to the impairment exercise performed according to US GAAP following the agreements entered for vessels disposals, partially offset with a gain of $0.5 million on disposal. Excluding these one-off charges and drydock cost of M/V Kite Bay $0.4 million the adjusted net income for the second quarter of 2021 amounts to $1.4 million.

Adjusted EBITDA totalled $2.9 million for the second quarter 2021, increased by $2.1 million as compared to the second quarter of 2020. 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 $9,444 achieved in the second quarter of 2021 is 85% above the TCE rate achieved during the same period in 2020.

OPEX per day increased to $4,567 for the three months ended June 30, 2021, compared to $3,977 during the same period in 2020. The upward variation is mainly attributable to the additional costs incurred in the preparation of vessels disposals as well as the limited crew expenses in the comparative quarter of 2020 resulting from COVID restrictions prevailing at the time on crew changes worldwide.

General and administrative expenses are slightly increased by $0.1 million for the three months ended June 30, 2021. Per day amount for the same period increased by 89% due to the significantly reduced number of both owned and commercially managed vessels.

Gain on vessel disposal for the second quarter of 2021 amounted to $0.5 million and relates to disposals mentioned under “Fleet Developments” section.

Dry docking expense of $0.4 million relates to the special survey of M/V Kite Bay which was completed within April 2021.

Depreciation cost amounts to $1.2 million and is impacted downwards due to fleet reduction.

Interest and finance cost of $0.3 million was decreased by 60% compared to prior year same period, mainly due to the significantly reduced loan balances following vessels disposals and reduced Libor rates.

Financial Review: Six months ended June 30, 2021

The reported results for the six-month period ended June 30, 2021 amount to $6.9 million net loss as compared to $7.5 million net loss for the respective previous year period. Average number of vessels during the six-month period ended June 30, 2021 was 11 vessels versus 16 vessels in the comparative period last year. Net loss for the first half of 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 $0.3 million on disposal. Excluding these one-off charges and drydock cost of M/V Kite Bay $0.7 million the adjusted net income for the second quarter of 2021 amounts to $2.5 million.

Adjusted EBITDA totalled $6.3 million for the first half 2021, increased by $3 million as compared to first six-month period of 2020. 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 $8,941 achieved in the first half of 2021 is 52% above the TCE rate achieved during the same period in 2020.

OPEX per day increased to $4,495 for the six months ended June 30, 2021, compared to $4,158 during the same period in 2020. The upward variation is mainly attributable to the additional costs incurred in the preparation of vessels disposals as well as the limited crew expenses in the comparative first half of 2020 resulting from restrictions prevailing at the time on crew changes worldwide.

General and administrative expenses are slightly decreased by $0.1 million for the six months ended June 30, 2021. Per day amount for the same period increased by 43% due to the significantly reduced number of both owned and commercially managed vessels.

Gain on vessel disposal for the six months ended on June 30, 2021, amounted to $0.3 million and relates to disposals mentioned under “Fleet Developments” section and the disposals of M/V Eden Bay, M/V Reunion Bay and M/V Liberty Bay which took place within the first quarter of 2021.

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 $2.8 million and is impacted downwards due to fleet reduction.

Interest and finance cost of $0.9 million was decreased by 53% compared to prior year same period, mainly due to the significantly reduced loan balances following vessels disposals and reduced Libor rates.

Cash Flow Review: Six months ended June 30, 2021.

Cash and cash equivalent, including restricted cash decreased by $3.2 million as at June 30, 2021 and amounted to $22.2 million as compared to $25.4 million as at December 31, 2020.

The decrease is attributable to cash used in financing activities of $67.5 million partially offset with $6.9 million by cash provided by operating activities and $57.3 million cash provided by investing activities.

Cash flow activities highlights during the period include:

  • $6.9 million cash from operating activities of an average fleet of 11 vessels versus $2.2 million operating cash flow in the comparative period.

  • $57.9 million cash inflow from vessels disposal completed within the period and

  • $34.6 million repayments and prepayments of loans subsequently to vessels disposals.

  • $32.8 million of dividends paid within the first half of 2021

Current Fleet List

Owned Fleet

Vessel

Yard

DWT

Year Built

Handysize

Ha Long Bay

Kanda Kawajiri

32,311

2007

Teal Bay

Kanda Kawajiri

32,327

2007

Resolute Bay

Hyundai Vinashin

36,767

2012

Orion Bay

Tsuji Heavy Industries

30,009

2012

Kite Bay

Yangzhou Guoyu Shipbuilding

38,419

2016

Commercially Managed Vessels

Handysize

Handy 1

Kanda Shipbuilding

28,342

2008

Handy 2

Hyundai Mipo Dockyard Co., Ltd.

36,892

2011

Handy 3

Hyundai Mipo Dockyard Co., Ltd.

36,892

2012

Handy 4

Hyundai Mipo Dockyard Co., Ltd.

36,887

2013

Handy 5

Jinse Shipbuilding

32,411

2009

Handy 6

Tsuji Heavy Industries

30,153

2012

Handy 7

Tsuji Heavy Industries

30,003

2012

Handy 8

Shimanami Shipyard Co., Ltd.

38,276

2013

Chartered In Vessel

Handysize

Handy 9

Samjin Shipbuilding Industries Co Ltd

33,755

2010


Summary of Operating Data (unaudited)

Three Months Ended
June 30, 2021

Three Months Ended
June 30, 2020

Six Months Ended
June 30, 2021

Six Months Ended
June 30, 2020

Revenue, net

8,522

8,933

19,536

20,000

Voyage expenses

(168

)

(1,570

)

(501

)

(2,991

)

Time charter equivalent revenue

8,354

7,363

19,035

17,009

Commercial revenue fee

122

97

137

209

Total

8,476

7,460

19,172

17,218

Charter in expenses

(761

)

-

(1,491

)

-

Vessel operating expense

(3,850

)

(5,790

)

(9,293

)

(12,175

)

Drydock expense

(403

)

(25

)

(708

)

(27

)

Depreciation expense

(1,173

)

(2,083

)

(2,800

)

(4,166

)

General and administration expense

(878

)

(744

)

(1,550

)

(1,623

)

Gain/(loss) on vessel disposition

516

-

343

(74

)

Gain on contract termination

-

1,000

-

1,000

Impairment charge

(8,554

)

(5,280

)

(9,028

)

(5,280

)

Write off inventory

-

(38

)

-

(257

)

Interest expense and finance cost

(340

)

(841

)

(872

)

(1,862

)

Interest income

-

6

1

40

Other expenses and taxes, net

(95

)

(180

)

(646

)

(269

)

Net loss

(7,060

)

(6,515

)

(6,872

)

(7,475

)

Gain/(Loss) on vessel disposition

(516

)

-

(343

)

74

Drydock expense

403

25

708

27

Write off inventory

-

38

-

257

Impairment charge

8,554

5,280

9,028

5,280

Gain on contract termination

-

(1,000

)

-

(1,000

)

Adjusted net income/(loss) (2)

1,381

(2,172

)

2,521

(2,837

)

Net income/(loss) per share, basic and diluted

(0.28

)

(0.25

)

(0.27

)

(0.29

)

Adjusted net income/(loss) per share, basic and diluted (2)

0.05

(0.09

)

0.10

(0.11

)

Three Months Ended
June 30, 2021

Three Months Ended
June 30, 2020

Six Months Ended
June 30, 2021

Six Months Ended
June 30, 2020

Net income/(loss)

(7,060

)

(6,515

)

(6,871

)

(7,475

)

Depreciation expense

1,173

2,083

2,800

4,166

Interest expense and finance cost

340

841

872

1,862

Other taxes

42

47

102

96

Interest income

-

(6

)

(1

)

(40

)

EBITDA (1)

(5,505

)

(3,550

)

(3,098

)

(1,391

)

Gain/(Loss) on vessel disposition

(516

)

-

(343

)

74

Drydock expense

403

25

708

27

Write off of inventory

-

38

-

257

Impairment loss

8,554

5,280

9,028

5,280

Gain on contract termination

-

(1,000

)

-

(1,000

)

Adjusted EBITDA (1)

2,936

793

6,295

3,247


(1)

Adjusted EBITDA represents net income/(loss) before interest, other taxes, depreciation and amortization, drydock expense, gain/(loss) on vessel disposition, impairment and 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.

(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
June 30, 2021

Three Months Ended
June 30, 2020

Six Months Ended
June 30, 2021

Six Months Ended
June 30, 2020

Ownership days (2)

843

1,456

2,067

2,928

Plus: Chartered in days (10)

91

-

179

-

Less: Off-hire days

36

13

94

41

Less: Off-hire days due to drydock

15

-

23

-

Operating days (3)

883

1,443

2,129

2,887

Fleet Utilization (4)

95

%

99

%

95

%

99

%

Commercial Ship days (8)

374

546

573

1,092

TCE per day- $ (1)

9,444

5,103

8,941

5,892

Opex per day- $ (6)

4,567

3,977

4,496

4,158

G&A expenses per day- $ (7)

1,041

511

750

554

G&A expenses basis commercial days -$ (9)

702

372

579

404

Charter in expense per day -$ (11)

8,363

-

8,330

-

Fleer vessels at period end

7

16

7

16

Chartered in vessels at period end

1

-

1

-

Average number of vessels during the period (5)

9

16

11

16


(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)

Ownership 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)

G&A expenses per day: is calculated by dividing 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.

(10)

Chartered in days: We define chartered-in days as the aggregate number of days in a period during which the Company chartered-in vessels.

(11)

Charter in expense per day: We define charter hire in expense per day as the as the net per day cost we pay to charter in a vessel.


Condensed Consolidated Balance Sheets (Unaudited)
(In thousands of U.S. Dollars)

As at

June 30, 2021

December 31, 2020

ASSETS

Cash & cash equivalents

16,438

16,662

Restricted cash (current and noncurrent)

5,749

8,771

Vessel held for sale

-

-

Vessels, net

68,052

137,233

Other fixed assets

11

33

Other receivables and assets (current and non-current)

3,950

6,087

Total assets

94,200

168,786

LIABILITIES AND EQUITY

Accounts payable and accrued liabilities

3,000

3,336

Other liabilities (current and noncurrent)

190

218

Dividend payable

8,912

-

Deferred revenue

786

783

Total debt, net of deferred finance costs

26,236

60,741

Total liabilities

39,124

65,078

Shareholders' equity

55,076

103,708

Total liabilities and shareholders’ equity

94,200

168,786

Condensed Consolidated Statement of Cash Flows (Unaudited)
(In thousands of U.S. Dollars)

Six months ended
June 30, 2021

Six months ended
June 31, 2020

Cash flows from operating activities

Net loss

(6,872

)

(7,475

)

Adjustments to reconcile net loss to net cash provided by

operating activities:

Depreciation expense

2,800

4,166

Amortization of deferred finance fees

138

137

Staff leaving indemnities liabilities

20

17

Write off of inventory

52

257

Gain/(loss) on vessel disposal

(343

)

74

Impairment charge

9,028

5,280

Gain on contract termination

-

(1,000

)

Changes in operating assets and liabilities

2,109

736

Net cash provided by operating activities

6,932

2,192

Cash flows from investing activities

Payments for vessel acquisition and improvements

(576

)

(15

)

Cash proceed from vessel sale

57,902

7,308

Cash received on contract termination

-

1,000

Purchase of other fixed assets

(12

)

(6

)

Net cash provided by investing activities

57,314

8,287

Cash flows from financing activities

Loan repayments and prepayments

(34,644

)

(11,577

)

Payment of deferred finance fees and other loan related fees

-

(17

)

Dividends paid

(32,848

)

(7,639

)

Net cash used in financing activities

(67,492

)

(19,233

)

Net decrease in cash and cash equivalents

(3,246

)

(8,754

)

Cash and cash equivalents and restricted cash at the beginning of the period

25,433

27,318

Cash and cash equivalents and restricted cash at period end

22,187

18,564

About Pioneer Marine Inc.

Pioneer Marine is a leading ship owner and global drybulk handysize transportation service provider. Pioneer Marine currently owns five Handysize vessels, charters in one Handysize vessel, and is commercial manager of eight 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 statement 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


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