Q2 2021 Pyxis Tankers Inc Earnings Call

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Good day and welcome to the Pyxis tankers conference call to discuss the financial results for the second quarter 'twenty 'twenty..1 as a reminder, today's call is being recorded. Additionally, a live webcast of today's conference call and accompanying presentation is available on pyxis tankers website, which is www.

The pyxis tankers dotcom.

During the call is Mr. Eddie for lenses, Chairman and Chief Executive Officer of Pyxis tankers and Mr. Henry Williams, Chief Financial Officer of the company I would now like to pass the floor for 1 of your speakers today Mr. Eddie balance is please go ahead Sir.

Good morning, everyone and thank you for joining our call for the 3 months of results and the 2.

Okay.

The 2021.

First I hope you your family friends and colleagues are well underway for the Calgary from this pandemic.

And we'll continue to be encouraged by the expanding distribution of vaccines for worldwide and its positive impact for personal and commercial activities.

Concerned about the new Covid variance, so stay safe and strong.

Before starting please let me draw your attention for some important legal notifications on slide 2 of the way there.

Many of the league, including our presentation today, which will include forward looking statements. Thank you.

Turning to slide 13.

Our most recent quarterly results primarily reflect the debt for chartering environment and the 3 month period ended June 30th we generate the time charter equivalent on the revenues of $4.1 million down 8.8% from the same period and 2020, primarily due to lower.

The charter rate.

We had the net loss of $1.5 million and Q2, which was higher than the same period and the prior year.

Our loss of 4 cents per share reflected and increased share count of $15.9 million for the most recent period.

Adjusted EBITDA for the period ended June 30th was.

$4 million.

The product tanker chartering environment during the second quarter 2021from that.

The debt further compression of rates, especially for the spot markets and measure the.

Periods of market.

The more stable and they've been counter it declined to levels below 10 year historical averages.

However, our operating results for Q2, 2021, primarily reflected the stability and contribution from the short term time charters for our medium range product tankers.

The average daily time charter equivalent for AR, and Mas was approximately 12000 and $700, which was about 2000 and $165 per day lower than the same period of 2020.

While the disappointing.

I think the result.

And those that could have been achieved and the spot market.

The guidance challenging conditions are further evidence for Q3.

With 47% of our available days booked for our remarks of the DC of approximately $10900 per day as of August for 'twenty 'twenty 1.

We are encouraged by XL anything economic activities and greater mobility of worldwide reportedly global and inventories of refined petroleum products of approximate 5 year averages and the refinery utilization is that the robust level.

And the rebound in global day to day growth led by the developed countries look to be strong through at least 2022.

The supply outlook for product tankers continues to look very promising based on the new vessel ordering on the high and level of scrapping.

We continue to position the company for the recovery in our sector, which we expect to see later this year in July we accomplished the certain important strategic and financial objectives by expanding our fleet of equal and modest while maintaining a strong balance sheet and enhancing liquidity.

And providing additional capital for another potential potential of vessel acquisition.

We took delivery of the 2013 built and mark to which we have of named the pyxis criteria the tech.

<unk> was funded by cash on hand, and the $13.5 million secured bank loan from the new lender.

The 7 year amortizing loan was competitive price was attractive covenants also in July we completed a follow on public offering of sales a convertible preferred stock, which provided almost $5.6 million of from net proceeds.

Please turn to slide for for information on our current fleet and deployment activities. As you can see we continue the use of mixed chartering strategy of time on spot charters.

Next on slide 6.

For the further update on the product tanker market.

Based on and to my prior comments about the market. It is abundantly clear that high end of automation rates, especially in the developed countries have a net the economic recovery. The recently pointed out by the IMF.

But this improvement has been uneven globally due to varying levels of monetary and fiscal support boxing distribution government, hence the restrictions and commercial supply chain disruptions.

Progress has been made and certain elements of our business such as normalized global inventories of refined petroleum products and the increased mobility, we have yet to see and improvement in charter rates.

We are hopeful that.

So we finally rise later this year, especially as we move into a stronger seasonal period in the northern hemisphere.

Turning to slide 7.

And the path of global.

Recovery should continue to be bumpy.

And today Seymour and demand on production of positive signs with unexpected and return to pre COVID-19 levels by next year kind of.

And high refinery runs and another sign of a return of increased demand on the come back to normalcy.

The data the IMF global growth estimates are encouraging.

Ex percent increase and 2021, followed by 4.9% in 2020.2.

Longer term product tanker demand should be also supported by refinery additions led by the middle East and Asia.

Brewery. The recently estimated that approximately $4.26 million barrels per day of new refinery capacity net of closures is scheduled to come on line between 2020, 1.2020 5 virtually all of which is outside the OECD and fact, according to the IEA.

Shutdowns of 1.7 million barrels per day of capacity have been announced mostly in the OECD, which could result in greater importing of refined products into the mature large markets and ton mile expansion.

Moving to slide 8.

The supply outlook for <unk> continues to look very promising the order book is drifting lower and the recently of duty estimated for the overall order book stood at the low of 6.8% over the worldwide fleet of almost 1600 vessels.

Why 72 of them on is on schedule for delivery over the 8 and over the next 18 months ending December 22, new ordering activity remained subdued. Moreover, due to the recent surge and ordering of new containers and dry bulk vessels, mainly Asia and yards don't have available consumer that construction slots and believe.

And the 'twenty to 'twenty 4.

None of the decision making process for tank ignore the is further complicated by ongoing ongoing developments and ship and the engine designs stricter environmental regulations, the rapidly escalate and shipbuilding costs and involving unstable and clear selection and level of ability of lower cup of carbon fuels and the.

Lingering debates on the scrubbers.

Demolitions have escalated with 22 of my script in the first half of 2021.

And rapid increase in light of current for charter rates and record high scrap metal prices and financing headwinds facing the operation of older less efficient vessels due to new environmental regulations and higher bunker fuel consumption.

Given the various considerations on the fact that 6.2% of the global fleet of EMR is 20 years of age or older as of June 30, we are hopeful that the strength will continue.

Consequently, we believe annually and net fleet growth for a month, so the 2% the this year and next.

Turning to slide 9 despite the price charter rates secondhand asset prices have recently picked up the modestly exceeding historical average. However, we still believe that is a good time in the cycle point of acquire eco tonnage and capture potential upward movements in the chart.

The rates and further asset appreciation.

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

Thanks for the let's focus on.

And on unaudited results for the 3 months ended June 30th 2021 on slide 11.

Our time charter equivalent revenues for Q2 of 'twenty, 1, which we define as revenues net minus voyage related costs and commissions were $4.1 million a decrease of 8.8% from the same period and 2020, primarily due to lower charter rates and the second quarter.

Of 21, our fleet wide daily TCE rate of $10905 was almost $900 per day lower than the comparable 2020 period.

Moving to slide 12, we incurred a net loss to common shareholders of $1.5 million for the 3 months ended June 30 for 'twenty, 1 or for basic and diluted loss per share.

Based upon 37.4.

Shareholders of $1.5 million for the 3 months ended June 30, and through 'twenty, 1 or for basic and diluted loss per share.

Increased and vessel operating expenses adjusted EBITDA declined to $400000 in Q2 'twenty 1.

Please turn to slide 13, which reviews, our recent fleet data by current and vessel type of the key takeaways here are as follows the press chartering conditions were evident by the decline and TCE for our <unk> and the most recent period the.

TCE for our small tankers increased over 20% to almost $6600 per day, but utilization was lower and.

Opex fleetwide increased over $700 per day per vessel to approximately $6200, primarily due to timing differences and certain vessel costs.

Versus the 2020 period.

Please turn to slide 14 to review our capitalization at June 32021.

At quarter close.

Our consolidated leverage ratio was lower than many publicly traded tanker companies as net funded debt stood at approximately 36% of total capitalization.

Adjusting this table for financing activities and July of 2021.

Would include the acquisition of the Pyxis catch their payment of the series a convertible preferred stock July dividend the.

The purchase of <unk> for your interest rate cap and receipt of the net proceeds from the follow on offering of the preferred shares cash Consequently would increase by approximately $1.6 million.

Total funded debt rise by $13.2 million net of deferred financing fees and stockholders equity increased by $5.5 million. The weighted average interest rate was 4.6% during the second quarter of 2021 and the next bank loan maturity scheduled for the first.

Quarter of 2023.

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

Thanks Henry.

In spite of the continued depressed chartering environment, we have taken and long term view of the effect on the company since the beginning of 2020, we have completed various actions to improve our competitive position and in order to take advantage of improving market conditions. Hopefully later this year.

Based on recent signs of optimism, we believe the current staff employment conditions should subside soon.

Stronger financial condition, and operating platform give us further confidence and narrow basis, the weather good times and bad debt.

Going ahead, and we are excited about the prospects of a healthier and more prosperous costco over the world and the company.

We appreciate the interest on thank you for joining our call today, we look forward to reporting on future progress upticks of tankers.

Safe day.

And well.

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

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