Q1 2021 Pyxis Tankers Inc Earnings Call

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[music] <unk> conference. So please continue.

Good day and welcome to the Pyxis tankers conference call to discuss the financial results for the first quarter 2021.

As a reminder, today's call is being recorded. Additionally, a live webcast of today's conference call on an accompanying presentation is available on pyxis tankers website, which is www adult pyxis tankers dot com.

Hosting the call is Mr. Eddie if Atlantis chiefs.

Chairman and Chief Executive Officer of Pyxis tankers on Mr. Henry Williams, Chief Financial Officer of the company.

I would like to pass the floor to 1 of your speakers today, Mr. Eddie for Lantus. Please go ahead Sir.

Good morning, everyone and thank you for joining our call for the 3 months results and market trends.

Thank you on.

First I hope you your family and friends and colleagues on win.

And on the way to recovery from this pandemic will continue to be encouraged by the development on expanding distribution of our teams worldwide on the.

On looking forward to experiencing a return from a more normal way, you'll be leaving on enjoying friends and family.

Before starting please let me draw your attention to some important legal notifications on slide 2.

We recommend you read including a presentation on per day, which will include forward looking statements.

Thank you.

Turning to slide 3.

Our most recent quarterly results, primarily reflected the continuation of the difficult chartering environment.

In the 3 months period March fed decided forensics on day, 1 we generated time charter equivalent revenues of $4.3 million down 21% from the same period in 2020.

We had fewer operating days lower.

We had a net loss of $2.1 million or 7 cents per share for Q1, 'twenty 'twenty, 1 both higher than the same period in the prior year.

Adjusted EBITDA for the period ended March 31st 2021.

800000.

Yeah.

The product tanker chartering environment, a year to date, including the third quarter continued to reflect depressed rates, especially on the spot market.

So he was on the length of stay.

Activity did not occur in the northern hemisphere due to the effects of various sales during the COVID-19 and renewed lockdowns in many countries. However, our operating results for Q1, 'twenty 'twenty, 1 primarily reflect the risk of ability on contribution from the shortcut on time charters for our medium range.

Product tankers.

The average daily time charter equivalent for RMR was approximately $12740 while disappointing news.

The results were better than growth could have been achieved in the spot market.

Given this challenging environment, we have continued to this employment slap a day once the 6 month time charters.

During the first 100%, but rather level based on the second quarter, our strength in 'twenty 1 are booked.

Mars at on average growth rate of $13300 per day.

Overall, the chartering market is currently on direct from them.

With that said, we believe that difficult chartering conditions may persist on pitfall.

However, we are still positive on the long term outlook of the product tanker sector.

We're starting to see more positive indicators of economic recovery for.

Jumpy OECD inventories of ROI projects are reportedly down to 5 year averages and U S refinery utilization is running at 8.7% the highest since March 2020.

During these challenging times, we have accomplished a number of important strategic and financial objectives, which has resulted in a stronger balance sheet enhance liquidity increase float on provided capital for debt repayment on funding for vessel acquisitions.

For example, the net.

Net proceeds from the February 25 million common stock private placement helped us refinance alone will save US 750 basis points and interest cost provided the cash portion of $20 million Bella batches of a modern.

Medium range tanker.

We expect to take delivery of at least 2013 built product tanker by early July and have a bank commitment in place for the balance of the funding.

On the acquisition further demonstrates our conviction and the positive long term fundamentals for our sector.

Please turn to slide 4 for information on our current fleet and ink alignment activities.

In addition to my prior comments about the chart on time charters for the Amas. Please note that the small tankers continue to trade in the spot market.

Now, let's turn to slide 6 for the fourth.

Further update on the product tanker market.

As you would expect car with 19 dramatically reduce price on our commercial activities worldwide, starting late winter 2020, which in turn resulted in a substantial decline in demand for petroleum products, especially transportation fuels, such as diesel gasoline assets.

While extensive public safety measures for the prevention of COVID-19, as well as a record setting government on central bank stimulus programs.

<unk> stabilized the global economic environment, the massive around low multiple vaccines has been the countries the protocol.

We believe the chartering environment should continue to be under pressure, but by the fall of 'twenty 'twenty..1 we should start to see a meaningful improvement in rates, which we think may be sustainable turning to slide 7 the path.

Economic recovery should continue to be bumpy, even with <unk> or with a variety of sensors in India. The IMF recently revised its forecast upward for global economic growth income.

On to 'twenty, 1 to a robust 6% with further growth for 4.4% in 2022.

A scenario of increasing consumption combined with lower inventories of refined petroleum products as well as modest from mining expansion from the changing refinery landscape should provide added support for the product tanker sector for example.

This year duly estimated that nearly $5.4 million barrels per day over here on refinery capacity was scheduled to come on line between 2000.21025 amongst all rates is not in the OS ACB in fact, according to the IEA shutdowns of 1.7 million.

Barrels per day of capacity have been announced mostly in the OECD, which should result in greater importing of refined product into these mature large markets.

Moving to slide 8.

The supply outlook from those remain positive.

Order book continues to drift lower and recently, a leading industry social estimated driver on the books stood at the low of 6.3% out of a worldwide fleet of almost 1600 vessels.

While there are a reasonable number of them on a scale.

For delivery through 2022.

On your ordering activity continues to be historically, low Moreover, utilization surge in ordering of new container ships and dry bulk vessels, mainly engine yards don't have the available contracts on slots with deliveries until at least 2023.

Owners decision, making process with banking or there is further complicated by ongoing developments in ship on engine design stricter environmental regulations are rapidly escalating shipbuilding costs on involving I'm still unclear on clear selection of availability of low carbon fuels and then.

During the day sounding scrubbers, we expect demolitions should continue to escalate as approximately 7% of the global fleet of 100 on spending on March 20 years or older. According to a recent industry estimates.

This is especially the case in light of current spot charter rates strong scrap metal prices and financial headwinds facing all the legislations vessels.

Due to our new environmental regulations and higher bunker consumption.

We believe our annual net fleet growth for our Mas should remain at around 2% this year and mixed.

Turning to slide 9.

By the price charter rates secondhand asset prices have recently picked up to exceed 10 year average is obviously, we're seeing it is a good time in the cycle from a client donuts and capture potential upward movements in charter rates on further asset appreciation.

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

Thanks, Jenny Let's review our unaudited results for the 3 months ended March 31, 2021 on slide 11.

Our time charter equivalent revenues for Q1, 'twenty, 1, which we define as revenues net minus voyage related costs and commissions were $4.3 million a decrease of 21% from the same period in 2020 due to fewer operating days of our fleet and lower charter rates in the first quarter.

21.

Fleet wide daily TCE rate was $10865.

1 is about $1000 per day lower from the comparable 2022.

Patents continue to negatively affect our results.

Moving to slide 12, we incurred a net loss to common shareholders of $2.1 million for the 3 months ended March 31.2021 on.

<unk> basic and diluted loss per share based on $29.2 million weighted average shares outstanding compared to a net loss of $1.2 million on.

<unk> <unk> basic and diluted loss per share based on $7.8 million fewer shares.

Besides the lower TCE revenues.

Recent quarterly results were negatively impacted by a half a million dollars loss on <unk>.

Associated with repayment of the prior along when we refinanced the pyxis Epsilon at the end of March.

EBITDA declined to $800000 in Q1 'twenty 1.

Please turn to slide 13, which reviews. Our recent fleet data by current vessel type. The key takeaway here is our Opex fleet line reflects a slight improvement.

Performance of less than $5600 per day during the tough chartering environment of Q1 'twenty 1.

Please turn to slide 14 to review our capitalization at March 31, 2021 at quarter close our consolidated leverage ratio was lower than many publicly traded tanker companies as net funded debt stood at 31% of total capitalization.

Our recently completed financing discussed earlier led private common stock price dramatically reduced our leverage and enhanced our liquidity and lengthened our debt maturities equally important the weighted average interest rate on.

Total loans has dropped from less than 4.5%.

With that I'd like to turn the call back over to Ed.

Thank you.

Thanks Henry.

Based on recent signs of optimism, we believe the current tough employment conditions will subside by this fall.

On a stronger financial position and operating discipline will continue to help us weather the storm and pursue accretive acquisitions such as the 1 we will be closing shortly.

Looking ahead, we're excited about the prospects of a healthier on more prosperous post COVID-19 world.

And our company.

We appreciate your interest on thank you for joining our call today, we look forward to reporting on future progress at Pyxis tankers.

Be safe day.

Yes.

This concludes today's conference call. Thank you for participating you may now disconnect.

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