Q4 2020 Pyxis Tankers Inc Earnings Call

Good day and welcome to the Pyxis tankers conference call to discuss the financial results for the fourth quarter 2020.

As a reminder, today's call is being recorded. Additionally, a live webcast of today's conference call I'm done accompanying presentation is available on pyxis tankers website, which is www dumped pyxis tankers don't come.

And the call is Mr. Eddie volunteers, Chairman and Chief Executive Officer of Pyxis tankers and Mr. Henry Williams, Chief Financial Officer of the company.

I would like to pass the floor to one of your speakers today, Mr. Eddie for Lantus. Please go ahead Sir.

Good afternoon, everyone and thank you for joining our call for the year and Q4 results and its December 'twenty.

And went to 20.

And I.

Hope you your family friends and colleagues are managing for the best during this pandemic.

And we continue to be encouraged by the development and expanding distribution on vaccines worldwide.

And I'm looking forward to experiencing and then to a more normal way of living and enjoy a friends and family.

Before starting please let me draw your attention to some important legal notifications on slide two that we recommend you read including our presentation. Today includes forward looking statements. Thank you.

Turning to slide three.

Yeah.

Our most recent quarterly results, primarily reflect the difficult operating conditions and the impact of the sales earlier this year of our oldest vessels and the non eco 2006 Big Pyxis Delta.

And the three month period December 31st 'twenty, and 'twenty, we generated time charter equivalent driving yourself $3 6 million down 42 per cent from the same period and 2019.

Fewer operating days, primarily considering the absence of one vessel low rates on spaces surveys for two of our ships.

We had a net loss of $2 7 million or 12 cents per share for the three months ended December 31st 2020, both from better than the same period and the prior year due to the loss on.

And vessel sales and recognized in Q4 of 2019.

Adjusted EBITDA for Q4, 2020 declined significantly to a negative 200000.

Perfect. Thank you chartering environment during the fourth quarter of 2020 on a year to date and 'twenty 'twenty. One continued to reflect the price chart, the especially on the spot market. The usual seasonal uplift in activity did not occur and the northern hemisphere and due to the effects already surge and so.

Covid and renewed lockdowns in many countries.

And I hope that anything that results for Q4, 2020, primarily reflect the stability and contribution from the short term time charters for our medium range product tankers.

The average daily time charter equivalent for our Mas was approximately $12300.

While disappointing these results were better than those that couldn't have been achieved and the spot market.

Given the challenging environment. We have continued this employment rather day with six month time charters most of its charterer has options on higher rates.

As of March 19th and 100% of line of available days and the first quarter of 'twenty to 'twenty, one and are booked Ferrari on Mars and then.

And its growth rate of $13200 per day and on the same elaborate for 75 per cent of the days in Q2, assuming the options are not exercised.

Overall, the chartering market is currently on day, it external and we believe that difficult operating conditions may persist until the fall. However, we are still positive on the long term outlook for the product tankers sector and we're starting to see some positive indicators for example, Chinese gasoline exports.

<unk> 30 per cent and the first two months of 2021 to over 3.5 million tons.

U S gasoline inventories are now 12% below the April 'twenty, and 'twenty peak of 263 million barrels.

During these challenging times, we have completed some important operational and financial plans and Q4, 2020, we completed the special surveys for the two small tankers.

We have no major that I thought kings and the plaintiffs and 93, one of the Pyxis Theta undergoes a second special survey and clothing balance whether they'd been system installation.

Over the last five months away and we're pleased one on some major equity financings for the company, which have strengthened our balance sheet and enhanced liquidity and increase our share float and.

Provided capital for debt repayment and possible vessel acquisitions.

In October 20, plenty, we completed the 5 million $7 75 per cent convertible preferred stock public offering followed by a 25 million common stock pipe.

On a weighted average basis and assuming full conversion of the preferred stock, we effectively issued equity and $1.69 per share.

About 30% of the preferred shares have led to convert that.

Last week, we signed a commitment letter with line of our existing banks for the refinancing over the Pyxis Epsilon upon closing these new five year 17 million secured loans when they reduce over leverage lengths and scheduled debt maturities and result in a 7.5 per cent and.

Chris freight savings.

Please turn to slide four for information on our fleet and car and deployment activity.

In addition to my prior comments. Please note the step up rate to 15000 and $500 per day, and if the charters exercise the six month options for the click and quite sufficient them on the pyxis Epsilon and Pyxis Theta.

Following up on my earlier comments about the product tanker market. Please turn to slide six four and update.

Please note the more extensive market overview in the back of our presentation. As you know COVID-19 dramatically reduced personnel and commercial activities worldwide, starting one year ago and resulted in a substantial decline and demand for petroleum products, especially in transportation fuels.

Diesel and gasoline and jet fuel.

Despite all the efforts to improve public safety for the prevention of COVID-19, as well as government and Central Bank stimulus programs, which reportedly now exceeds 21 trillion global economic recovery has only recently started what are the distribution of multiple vaccines.

Excess inventories of refined products and Dick.

Climbing, but lower demand for seaborne cargoes on the breakup of tunnels and the open market have continued to negatively impact chartering activity.

Spot rates.

And significantly on the bid market lackluster.

For example.

The one year time charter rate for Nicole efficient and Mara has declined to 14000 and $400 per day, which approximates the 10 year average.

Turning to slide seven.

And there are two global economic recovery may be bumpy in January the IMF revised its forecast for global economic growth in 2020, one and play a robust five 5% with further growth of four two percentage of 2020 two.

Scenario of solid consumption combined with lower inventories of refined petroleum products as well as modest ton mile expansion from the change and refinery landscape should provide added support to the product tankers sector.

Moving to slide eight the supply outlook from our tools remain positive.

Order book continues to decline and recently, a leading industry source estimated though the book at $6 three per cent out of the worldwide fleet of almost 1600 vessels.

While a reasonable number of and monetize scheduled for delivery for 2020 two new ordering activity continues to be historically low.

Ongoing development and shape and vans and designs expanding environmental regulations, and the broadest selection of shoes and the lingering debate surrounding scrubber complicate the decision making process when you're ordering by owners. It is expected that demolitions should accelerate a six 9% of the global fleet.

100, and then and marks our 20 years of older, especially in light of the poor market conditions, and the finance and headwinds facing older less efficient vessels due to the new antiviral meant on regulations.

Lastly, the availability of cost effective capital is not plentiful and further limiting new orders.

We believe angle and Netflix and growth for them on this would be around 2%. This year and next turning to slide nine the decline in charter rates continue to negatively affect and mark to asset prices, which approximate 10 year averages and non opinion. It is currently on attack this time and.

Recycling to acquire thought and that's and capture potential upward movement and charter rates and values and Unfortunately, there is little S&P activity for modern equal amongst however, we are now and a better position to consummate the deal or two.

At this point I would like to put that on the call over to Henry Williams, Our Chief Financial Officer, who will discuss our financial results and great that they pay.

Yeah.

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

Our time charter equivalent revenues for Q4, 'twenty, which we define as revenues net minus voyage related costs and commissions were $3 $6 million a decrease of 42% from the same period and 2019 due to fewer operating days and our fleet primarily reflecting this.

Sales and the older EMR and early 2020, lower charter rates and two special surveys completed in the quarter and Q4 2020, our daily TCE rate fleet wide was less than 10000 and $300.

$2100 per day decline from the comparable 2019 period.

And the small tankers continue to negatively affect our results.

Turning to slide 12, we incurred a net loss to common shareholders of $2 $7 million for the three months ended December 31, 2020, or 12 cents per basic and diluted loss per share based on almost $21 7 million weighted average shares outstanding compared.

Compared to a higher net loss of $3 $6 million or 17 cents per basic and diluted loss per share based on 400000.

<unk> shares.

Excellence of one M arm was a major factor influencing the bottom line for 2020.

Adjusted EBITDA declined significantly to a negative $200000 and the most recent quarter.

Please turn to slide 13, which reviews, our recent fleet data by vessel type given the size of our fleet changes and these metrics related to a single vessel and one reporting period can have disproportionate effects on the total fleet operating results given the majority of our fleet had special surveys in two.

'twenty I would focus on a yearly results to get a better overall picture within the context of a declining rate environment fleet Opex was stable at roughly 50 $5800 per day per ship during the year.

Turning to slide 14, as you know we believe it's important to review total daily operational cost to run and manage a public tanker company, including overhead.

Cash costs.

Gary why fleet composition and vessel delivery on removal company operating structure and management, we define total daily operational costs as vessel operating expenses technical and commercial management fees, plus G&A expenses. Unfortunately, and 2020, we had to allocate G&A, which is.

Substantially and fixed cost over five vessels instead of six as in the prior year. Nevertheless, we believe that the total daily operational costs of our modern eco efficient EMR twos.

Continue to be very competitive.

Third our public peers.

Spider and smaller size.

Please turn to slide 15 to review our capitalization at December 31, 2020 at quarter close our consolidated leverage ratio was on par with some publicly traded tanker companies as net funded debt stood at less than 62% of total capitalization.

The most recent completed financing activities discussed earlier led by the common stock private placement would indicate a lower 27% with approximately $26 million and cash balances and clear.

Clearly, you'll get a better picture when we release, our first quarter 2021 results and late spring.

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

Thanks Henry.

We expect the tough charter and conditions to subside later this fall in the meantime, we have significant coverage on a stronger financial position.

Recent financing activities have dramatically improved our balance sheet, and giving us capital to pursue opportunities, including accretive vessel acquisitions. We are excited about the prospects of a healthier and more prosperous world post Covid and our company.

We appreciate your interest and a company on thank you for joining our call today.

And I look forward to reporting on our future progress on pyxis tankers and be safe be well.

Ladies and gentlemen that does conclude the call for today. Thank you all for joining you may now disconnect.

[music].

Yeah.

[music].

Okay.

Okay.

Yeah.

Okay.

[music].

Yeah.

Okay.

[music].

T O comes and school. Please continue to stand by your conference will begin shortly.

Okay.

Okay.

Okay.

Yeah.

Okay.

Okay.

[music].