Q3 2021 Pyxis Tankers Inc Earnings Call

With the 2021 reflected a further compression of rates both in the spot and period markets long below historical averages our operating results for Q3, primarily reflected poor results.

Medium range product tankers that were trading in the spot market and lower time charter rates.

The average daily time charter equivalent for our Mas was $7326 dramatically lower than in the same period last year. However, we have recently seen an improvement in the market and as of November 12, 49% of available days in Q4, our Remodels we're booked.

At the time charter equivalent of approximately $10900 per day.

We are encouraged by accelerating economic activities in greater mobility worldwide, especially in the OECD countries reportedly global inventories of refined petroleum products.

At or below five year averages and refinery utilization continues at a robust level.

<unk> and global GDP growth led by the developed countries it looks to be strong through at least 2022.

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

We continue to position the company for a sustainable recovery in our sector, which we believe is just starting.

We look to accomplish important strategic and financial objectives by expanding our fleet of eco and Mars, while maintaining a solid balance sheet. In July we took delivery of the pictures category in 2013 built ecosystem Tomorrow on November 15th we signed an agreement to acquire from <unk>.

Related company that fixes Lambda at 2017, built 50000 deadweight Echo.

That was constructed SPP shipbuilding in South Korea for Central 2 million.

The company's audit committee, consisting of independent and disinterested members of the company's board of directors have a negotiated and approved lease acquisition, which is expected to close in December 2021.

The equity portion of the consideration for this transaction consists of cash on hand.

Issuance by the company of $3 million under an amended unsecured promissory note due 2024 and 3 million in common shares representing almost 19%.

Musician price.

The remaining portion of the consideration of this purchase will be funded by borrowings under a new 29 million loan from one of our existing lenders, which will also refinance announced standing alone on the Pyxis model, our 2099 big tanker.

At least five year bank loan will bear interest at LIBOR, plus 315% have principal amortization of 625000 per quarter and be secured by both vessels.

This loan is subject to execution of definite loan documentation and standard closing conditions.

Let us now turn to slide four for information on our existing fleet unemployment activities. As you can see we continue to use our mixed chartering strategy of short time and spot charters, which position us for better chartering markets ahead.

Next please send slide six for a further update on the product tanker market.

In addition to my prior comments about the market. It is abundantly clear that higher vaccination rates, especially in the developed countries have lead the economic recovery as it recently pointed out by the IMF.

This improvement has been uneven globally due to varying levels of monetary and fiscal support vaccine distribution.

Hence the restrictions and commercial supply chain disruptions also inflation is not a concern for everyone.

While progress has been made in certain elements of our business such as global inventories are refined products, which are now at or below five year averages and increased commercial and personal mobility.

Only just starting to see an improvement in the chartering environment.

Charter rates typically increase in this time of year due to increased cargoes of fuel oil in the northern hemisphere, but we are optimistic that this is the beginning of more sustainable period of stronger rates.

Turning to slide seven.

The path of global economic recovery May continue to be bumpy.

Increasing demand and production combined with higher refinery throughput.

Designs updated IMF global growth estimates are encouraging.

Five 9% increase in 2020, one followed by four 9% in 2022 and should lead to more seaborne cargoes recently, a leading research firm estimated growth in seaborne trade at seven 1%. This year, followed by five 1% in 2022 to approximately.

1 billion tons of refined petroleum products.

Moving to slide eight over the longer term, we expect demand for the product tanker cycle to be supported by a refinery additions led led by the Middle East and Asia jewelry estimated at approximately $4 26 million barrels per day of new refinery capacity net of closures is scheduled to come online between two.

'twenty one 'twenty two 'twenty five virtually all of which is outside the OECD in fact, according to the IEA shutdowns of one 7 million barrels per day of capacity have been announced mostly in the OECD, which could result in greater importing refined products into things mature large mall.

And ton mile expansion of course unforeseen events like the recent price spikes in sort of this in many countries for winter heating fuels can create temporary opportunities in the spot market.

Moving to slide nine.

Apply outlook for EMR tools continues to look very promising.

Book is drifting lower and recently Clarksons estimated overall order book stood at the low of 6% of the worldwide fleet or fixing countered 80 vessels why 64 Remodels are scheduled for delivery over the 14 months ending December 2022, new ordering activity remains subdued and slip outs.

Moreover, due to the recent surge in ordering for new container container ships and dry bulk vessels, mainly engine yards don't have available construction slots with deliveries until 'twenty three 'twenty four.

An owner's decision, making process for tanker new ordering is further complicated by ongoing developments in shape and engine designs stricter environmental regulations are rapidly escalators built in costs.

Evolving and still unclear selection and availability of lower carbon fuels and the lingering debate surrounding.

Surrounding scrubbers.

The malaysians.

Good pace as of 30 <unk> March was scrapped in the first nine months of the year.

Happy to increase as a function of recent poor charter rates peak scrap metal prices and financial headwinds facing the operation of older less efficient vessels due to new environmental regulations and higher bunker fuel consumption.

Given these considerations and the fact that five 9% of the global fleet of a modest is 20 years of age or older.

We are hopeful that this trend will continue consequently, we believe net fleet growth of four a modest would be around 2% this year and next.

Turning to slide 10.

Tight depressed charter rates secondhand prices, especially for modern eco vessels have picked up newbuild prices are now exceeding $40 million with delivering two plus years. So obviously, we still believe that it's a good time in the cycle to acquire eco tonnage and capture potential upward upward.

Movements in charter 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, Julie let's focus on our audited results for the three months ended September 32021.

Our time charter equivalent revenues for Q3 dollars 21, which we define as revenues net minus voyage related costs and commissions were $3 4 million a decrease of 21% from the same period in 2020, primarily due to lower charter rates, especially employment in the spot market.

In the third quarter of 'twenty one.

Our fleet wide daily TCE rate of $7000 was dramatically lower than the comparable period 2020.

Moving to slide 13, we incurred a net loss to common shareholders of $3 7 million for the three months ended September 32021, or 10 basic and diluted loss per share based upon $38 3 million weighted average shares outstanding.

Compared to a lower net loss of $1 9 million or nine cents loss per share based upon $16 8 million fewer shares.

Besides lower TCE revenues and most recent quarterly results were negatively impacted by $850 increase.

Operating expenses due to the startup of the newly acquired fixtures.

And higher corn costs fleetwide due to the effects of COVID-19.

Adjusted EBITDA declined to a negative $1 3 million in Q3 'twenty one.

Please turn to slide 14, which reviews, our recent fleet data by current vessel type the key takeaways are as follows.

Q3, 2021 data was impacted by the Pyxis, Turkey, Euro, which joined our fleet in mid July.

Certain onetime vessel operating costs were incurred during that time and vetting approvals had to be obtained after initial voyages.

Depressed touring conditions were evidenced by the substantial decline in Tc as a number of rmr's traded spot in the most recent period.

And the performance of our small tankers improved markedly.

A number of metrics.

Please turn to slide 15 to review our capitalization at September 32021.

At quarter close our consolidated leverage was comparable to many publicly traded tanker companies as net funded debt stood at approximately 44% of total capitalization. The weighted average interest rate was four 3% during the third quarter 2021, and then next bank.

Loan maturity schedule for Q1 of 2023.

We have interest rate caps, covering 35% of our outstanding LIBOR based debt.

With that I would like to turn the call back over to <unk>.

Our price.

Thanks Henry.

We believe the recent stocked in the recovery of charter rates combined with a positive longer term supply and demand fundamentals.

That's an optimistic view of the product tanker sector and our company.

These recent acquisitions, our modern eco efficient and enhance our competitive position and create opportunities for further growth as well as greater profitability and asset appreciation.

As we wrap up a challenging year, we are excited about the prospects of a healthier and more prosperous 2022.

We appreciate your interest and thank you for joining our call today, we look forward to reporting on future progress pyxis tankers be safe be well.

Thank you.

Today's conference call. Thank you for participating you may now disconnect.

Yeah.

Sure.