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Pioneer Marine Inc. Achieves First Quarter TCE rate of $6,681

16 Μαΐου 2020.

pioneermarinepl2Pioneer Marine Inc. and its subsidiaries, 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:

 

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.

Source: Pioneer Marine Inc.