Q1 2020 Pyxis Tankers Inc Earnings Call

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Ladies and gentlemen, just standing blind to the Pyxis tank is from school to discuss the financial results for the fiscal <unk>.

As a reminder, today's call is being recorded.

Additionally.

Please see today's conference and then it comes presentation is available on the pick things website, which is www existing kids.

Hosting the call today is 80, the lintas, Chairman and Chief Executive officer of existing cuts and Henry Williams, Chief Financial Officer.

I'd now like insurance use makes tank as chief Executive officer it easily.

He's got things.

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Good morning, everyone and thank you for joining our call for the three month resolved and that Mark.

Clinton.

I hope you're on listening to this presentation from a safe place and you on your loved ones have not been affected by this terrible pandemic would truly cope will soon be behind us.

Before starting I mean, let me put all Europe, then turn to some important legal notifications from slight cool that's the way to comment duty, including our presentation today, which will include forward looking statements.

Thank you.

Turning to slide three.

How are you talking for the first quarter of 20 plant that reflected an improvement from an operating perspective over the comparable periods of 2019 and completion of the saying the older vessel the London growth 2006 been big Delta.

In Q1 plenty plenty, we generated time charter equivalent revenues of 5 million almost 4% higher than the same period in 2019.

We had the net loss of 1.2 million or six cents per share for the three month ended March 31st Twentytwenty, both improvements over the same period in the prior year.

Our adjusted EBITDA for Q1.

More than doubled to 1.2 million.

The first five months of Twentytwenty, including the first quarter. It appears that that a series of unpleasant that global event led by the spread of call with 19 and extreme volatility theme the crude oil and the refined petroleum products markets.

Our operating results for the first quarter explained we plan to reflect the stability and contributions from the time charters. We had previously entered into during 2019, well maybe on moraines product I guess as well as continued cost discipline.

The average daily time charter equivalent for our MRM was approximately $15400 during Q1.

As of June five.

100% of available days Alvaro modestly in the second quarter of 20 plan B, where book up another its growth rate of $15700.

Like the second half a friend, we plan to shouldn't be Italians and targeting environment. We're positive on the long term out and look for the product tanker sector and our company.

Let's turn to slide for putting formation on our fleet and cutting deployment activities.

Later this month the pyxis excellent. We did go her first space. The survey, which will include the installation of U.S. close got approved ballast water treatment system also our small tankers, we continued to operate in the spot market until they undertake less than three year basically the same.

Plays in the third quarter of Twentytwenty.

I was very odd added delivered that we will continue to utilize our mix targeting throughout the day of time on spot taught them.

Please turn to slide sake, but I'm not the date of the product tanker market.

Since January 20 plan due the product tanker markets, so Nick Green full of payment.

I mean now that's on the few over these major front because then van.

After a reasonable start to the year the spread of Colvin buying theme inflicted a huge star and human life economic conditions and the way of life worldwide.

[laughter] dramatically lower personnel on commercial activities that resulted in a huge declining demand for petroleum product, especially on the transportation fuels, such as diesel gasoline and jet fuel.

At the same time.

That's all you production was okay and globally led by members of Opex life.

I think unfolded prices for crude oil.

Broad that rapidly collapse setting up the forward curve all contango.

Speculative trading activity combined with both consistent and onshore starts constrains closed incremental demand for floating storage, mainly for crude oil and thats, what based one field cargos, which resulted in a spike in charter rates, primarily in the spot market.

Starting the first of May substantial OE production curtailments by leading producing nations SASSA, Saudi Arabia were met by the start of God genetic comedies in Maine, many major economies.

Improved public safety for the prevention of call, we'd 19 and record setting government and Central Bank stimulus programs have been instrumental in building confidence and providing stability.

With that it kind of personal and business activities, even thought it's all done started to occur during may.

The stocking of refined product has resulted in lower demand for sea borne cargoes and a big double Scott I'm not saying they opened the market.

Consequently charter rates started falling significantly whats indicated the exceptional at eight environment was over.

Turning to slide seven.

Overall, we expect the second half of Twentytwenty to provide added uncertainty the global economic recovery should be bumpy as the future developments of covering 19 further clouds the picture as we collectively define the new norm on.

Hey bound of global economic growth in Twentytwenty, one based on high unmet full cost a GDP growth of 5.8% we'd be a blessing.

And it kind of selling it content consumption over refined petroleum products unload the phone mine expansion from the change in refining landscape should provide odd to support to the brought the banking sector.

Moving to slide eight.

Supply outlook for him out of those look better than six months ago. They owe there was a book continues to decline and recently I'm, leaving in the city. So its estimated though the book at 5.9% out of an overall default light fleet over 1700 vessels.

Well I know reasonable number of a modest scheduled for delivery in the remainder of 20 to 20 Youre bidding activity continues to be low.

New advances in shape and managing designs at below their selection of shoes, and the lingering debate surrounding scrubbers complicates things investment decision for owners.

Recent industry sources estimated brought new vessel deliveries were running about 60 days behind schedule due to the impact of the virus on shipyard personnel on the supply chain.

Demolitions so increase.

6.2% of the global fleet or 100 meet them March 20 years or older I mean life of the impact of the new environmental regulations on older less efficient vessels.

Lastly cost effective capital when things too because cost further limiting your this.

Consequently, we believe net fleet growth for a market should be around 2% this year.

Turning to slide nine.

They might have to asset prices have increased over the last few years, especially for younger eco efficient on that which are currently immodest premium to the 10 year average that continues to be attractive opportunities to acquire secondhand tankers at reasonable prices and capture the potential upward movement of charter rates.

At this point I would like the time to calls over the Henry Williams, Our Chief Financial Officer, who will discuss our financial results in greater detail.

Thanks, Eddie let's start with our on audit results for the three months ended March 31, 2020 on slide 11.

Our time charter equivalent revenues for Q1, 2020, which we define is voyage revenues my words related costs and commissions were $5 million and increased 3.8%.

From the same period in 2019, primarily as a result in higher rates and better utilization. Despite the shale the pitches delta early in the quarter.

In Q1 2020, our daily teach E rate, we watch it was over $11900.

Hey, 12% improvement over the comparable 2019 period and utilization improved 370 basis points to 91.4% the small tankers continue to negatively affect our results.

Turning to slide 12, we incurred a net loss of $1.2 million for the three months ended March 31, 2020, or six cents basic and diluted loss per share based upon 21.4 million weighted average shares outstanding.

Compared to a higher net loss of $2.3 million or 11 cents basic and diluted loss per share.

Based on I slightly lower share count.

Oh, well lower costs reflected the elimination of the pictures Delta during Q1 2020.

Better Tc revenues combined with continued cost discipline.

Salted in a 700000 dollar improvement of adjusted EBITDA to $1.2 million in the most recent core.

Please turn to slide 13, which reviews, our recent suite data by that's what type.

Given the size of our fleet changes in these metrics related to a single vessel in one reporting period can have disproportionate effect on the total fleet operating results.

Focusing on a quarter ended March 2020, we'd like to point out three key takeaways that Tc for our three echo m. ours averaged approximately $15400 per day.

The average tease you for our small tankers improved nicely to about $5600, a day with better utilization in the spot market and.

<unk> wide daily vessel operating expenses were less than $5700 a day, a 6% improvement over Q1 of 2019.

Please turn to slide 14 to wherever you review our capitalization at March 31 2020.

At quarter close our consolidated leverage ratio was on par with many other publicly traded tanker companies as net funded debt.

Good at 60% of total capitalization.

Balloon payments are due for another two and a quarter years.

With that I would like to turn the call back over the Eddie to conclude our presentation.

Thank you Henry.

The second half of Twentytwenty, we'd be challenging because of continued with all the time charter and conditions within the context of unpredictable club economic recovery and then second developments over the called covert 19 pandemic.

We continue to be optimistic in the long term given the fundamental supply and demand outlook for our industry.

Mark we've continued to be the work horse within the product think effect or providing stability of cash flows I'm solid asset values.

We appreciate your interest in because I guess, I'm, saying Q4, joining our call today, we look forward to reporting on future progress I Pixies tanker.

Be safe B wells.

Thank you very much students.

Today.

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