Pangaea Logistics Solutions Ltd. Reports Record Financial Results for the Quarter Ended June 30, 2021
Pangaea Logistics Solutions Ltd., a global provider of comprehensive maritime logistics solutions, announced today its results for the three months ended June 30, 2021.
2nd Quarter Highlights
Net income attributable to Pangaea Logistics Solutions Ltd. was $19.2 million for the three months ended June 30, 2021, as compared to a $3.0 million for the same period of 2020.
Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. was $12.9 million, as compared to Non-GAAP adjusted net income of $3.7 million for the three months ended June 30, 2020.
Diluted net income per share was $0.44 for the three months ended June 30, 2021, as compared to a net income per share of $0.07 for the same period of 2020.
Pangaea’s TCE rates were $21,053 for the three months ended June 30, 2021, as compared to $10,733 for the three months ended June 30, 2020.
Adjusted EBITDA was $21.4 million for the three months ended June 30, 2021, as compared to $10.7 million for the same period of 2020.
At the end of the quarter, Pangaea had $40.6 million in cash and cash equivalents.
On August 9, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.035 per common share, to be paid on September 15, 2021, to all shareholders of record as of September 1, 2021.
Subsequent Business Update
On July 6, 2021, the Company, through its wholly owned subsidiary, Bulk Nordic Five Ltd., and the existing lender agreed to amend and restate the original Bareboat Charter dated October 27, 2016. The amended agreement extends the lease maturity date to April 2028 with a purchase obligation of $6.95 million. The Company also fixed the interest rate through maturity at 3.97%. The bareboat charter party is secured by a first preferred mortgage on the m/v Bulk Destiny, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders.
On July 12, 2021, the Company took delivery of the m/v Bulk Promise, a 2013 Shin Kurushima Toyohashi-built 78,228 dwt dry bulk vessel for $18.3 million. The vessel was financed under a secured term loan facility for $12.8 million payable in 24 equal quarterly installments and a final balloon payment of $4.5 million at maturity. Interest on the loan is floating at the three-month LIBOR plus 2.3%.
Ed Coll, Chief Executive Officer of Pangaea Logistics Solutions, commented:
“Our second quarter results were record-breaking. Market levels not seen in over a decade helped push our EBITDA above $21 million for the quarter, and our net income was $19.2 million, while EPS was $0.44 for the quarter. Our average TCE earned of $21,053 increased almost 100% compared to the second quarter of 2020, and was up approximately 27% from our TCE earned in the first quarter of 2021. Forward freight contracts, purchased to protect long cargo positions, added $6.1million of unrealized gains to net income for the quarter because FFA markets moved sharply upward and our accounting treatment requires the mark-to-market adjustment to be included in this quarter.
“We were also excited to take delivery of the first two of four Ice Class Newbuilding vessels during the second quarter. These timely deliveries expand our industry-leading ice class capabilities to meet our clients’ needs and will be fully deployed during the summer Arctic shipping season. We were also happy to report the successful delivery of three second-hand vessels as part of our fleet renewal and expansion, bringing our total owned vessels to 24 after the delivery of our final two Ice Class Newbuilding vessels later this year.”
“We are encouraged by the steps we’ve taken to deploy our capital, focus on niches, and capitalize on an improving dry bulk market. Our TCE earnings continue to improve heading into the third quarter, and we remain optimistic about the fundamentals in the dry bulk market with a historically low order book and a stable demand outlook. We will continue to be opportunistic in expanding our platform in ways that add value for our customers and, in turn, enhance shareholder value.”
Results for the three months ended June 30, 2021 and 2020
Total revenue was $145.5 million for the three months ended June 30, 2021, compared with $70.4 million for the three months ended June 30, 2020. The 107% increase in revenues was mainly attributed to the increase in the average TCE rates achieved by our vessels during the second quarter of 2021 compared to the same period in 2020.
Time Charter Equivalent rate (TCE) was $21,053 per day for the three months ended June 30, 2021, compared to an average of $10,733 per day for the same period in 2020. The average supramax and panamax market index rates for the second quarter of 2021 were $24,185 per day. Pangaea’s earned TCE rates lagged the market index in the quarter due to the impact of timing of pricing and duration of performing voyages in a rapidly rising market as well as the impact of performance of voyages on fixed freight rates from our long term contracts of affreightment that are less than spot market rates.
Liquidity and Cash Flows
Cash, restricted cash and cash equivalents were $40.6 million as of June 30, 2021, compared with $48.4 million on December 31, 2020.
On June 30, 2021 and December 31, 2020, the Company had working capital of $46.6 million and $2.2 million, respectively. Net cash provided by operating activities during the six months ended June 30, 2021 was $19.5 million compared to net cash provided by operating activities of $6.9 million for the six months ended June 30, 2020.
Net cash used in investing activities during the six months ended June 30, 2021 was $108.7 million compared to net cash provided by investing activities of $5.8 million for the same period in 2020. During the six months ended June 30, 2021, the Company purchased four vessels for $105.4 million and paid $2.7 million as advances for the purchase of one additional vessel which was delivered on July 12, 2021. Additionally, the Company paid $0.3 million as an advance towards two newbuildings to be delivered in the fourth quarter of 2021.
Net cash provided by financing activities during the six months ended June 30, 2021 was $81.3 million compared to net cash used in financing activities of $16.2 million for the same period of 2020. During the six months ended June 30, 2021 and 2020, proceeds from long-term debt and finance leases were $143.4 million. During the six months ended June 30, 2021 and 2020, net cash used to repay long-term debt was $55.6 million and $6.6 million, respectively, net cash used to repay finance leases was $3.8 million and $9.1 million, respectively, and the Company made cash dividend payments of $2.4 million and $0.5 million, respectively.Full Report
Source: Pangaea Logistics Solutions Ltd.