Pioneer Marine Inc.Announces Financial Results for the Second Quarter and Six Months Ended June 30, 2019
Pioneer Marine Inc. and its subsidiaries (OSLO-OTC: PNRM) (“Pioneer Marine”,or the “Company”),a leading shipowner and global drybulk handysize transportation service provider,announced its financial and operating results for thesecondquarterended June 30, 2019.
Torben Janholt, Chief Executive Officer commented: “In the first half of 2019, drybulk freight rates brought back unpleasant memories from 2016, however, especially in the first quarter, Pioneer comfortably weathered this unexpected decline in the market. Staying close to our chartering and S&P strategy enabled us to achieve a net profit of $3.7m and adjusted EBITDA of $8.5m for the first six months of 2019.
“Given the recent positive developments in the market, we remain optimistic for the remainder of 2019, despite all the uncertainties surrounding the new IMO 2020 regulations. We are well prepared for this transitional period in order to serve our clients efficiently and utilize our fleet’s earning potential.
“Looking forward, we will keep exploring the market for attractive opportunities in order to renew our fleet, and we will also seek to further expand our commercial management platform.”
Liquidity & Capital Resources:
As of June 30, 2019, the Company had a total liquidity of $28.3 million including $11 million in restricted cash.
The Company’s plan is to proceed with the installation of Ballast Water Treatment System (‘BWTS’) on four vessels of the fleet in 2019 and the remaining fleet vessels up to early 2023. From the current fleet two vessels are already fitted with BWTS.
The Company on July 29th, 2019, entered into a commercial management agreement with Tufton Oceanic Funds, to undertake the commercial management of five dry bulk vessels, further enhancing its operating platform.
Upon the initiation of this cooperation, the Company will have under commercial management a total fleet of 24 handysize and one supramax vessels, including owned fleet.
Financial Review: Six months ended June 30,2019
Adjusted EBITDA totalled $8.5 million for the first half of 2019, decreased as compared to the first half of 2018 by $1.9 million mainly due to the declined market.
TCE rate of $7,461 for the six-month period of 2019, is decreased by 19% compared to TCE rate of the same period in 2018. This is attributable to the weak market conditions during the first half of 2019.
The Company continues to effectively monitor vessel OPEX, which were reduced by 9% to
$4,302 per day for the six months ended June 30, 2019 compared to $4,737 during the same period in 2018.
Similarly, daily G&A rate dropped by 20% to $477 per day as compared to $597 per day for same period in 2018.
During the first half of 2019, two vessels completed their drydocks with a total cost of $1.0 million while during the same period prior year one vessel had her intermediate survey with a total cost of $0.6 million.
Depreciation cost amounts to $4.7 million increased due to fleet growth as Pioneer’s fleet consists of an average of 19 vessels, while in the same period in 2018 the Company owned on average 16 vessels.
Interest and finance cost of $3 million was slightly increased by 3% as compared to $2.9 million for the same period in 2018, due to higher average loan balances and libor rates which are partially off set by the reduced margins agreed for the new facilities.
Financial Review: Three months ended June 30,2019
Adjusted EBITDA totalled to $2.3 million for the quarter, decreased as compared to second quarter of 2018 by $3.5 million.
TCE rate of $6,349 for the second quarter of 2019, is decreased by 33% compared to TCE rate of the same period in 2018. Despite the current weak market conditions, the Company achieved a TCE rate well above market indices.
A decrease of 5% on daily vessel OPEX, which were reduced to $4,267 per day for the three months ended June 30, 2019 compared to $4,491 during the same period in 2018, is mainly due to the further cost control efficiencies achieved.
Similarly, daily G&A rate dropped by 13% to $515 per day as a result of our continuous efforts to keep this cost centre at competitive levels compared to our peers.
During the second quarter of 2019, Fortune Bay completed her intermediate survey with a total cost of $0.3 million while during the same period prior year Eden Bay had her special survey with a total cost of $0.5 million.
Depreciation cost amounts to $2.3 million impacted slightly upwards due to fleet growth as Pioneer’s fleet consists of 18 vessels, while in the same period in 2018 the Company owned on average 17 vessels.
Interest and finance cost of $1.4 million was decreased by 6% due to reduced margins agreed for the new facilities despite the higher average loan balance and libor rates
Cash Flow Review: Six months ended June 30, 2019
Cash and cash equivalent, including restricted cash increased by $1.5 million as at June 30, 2019 and amounted to $28.3 million as compared to $26.8 million as at December 31, 2018.
The increase is attributable to $9.4 million cash provided by investing activities, $4.4 million cash provided by operating activities, partially offset with $12.3 million cash used in financing activities.
Cash flow activities highlights during the first quarter of 2019 mainly include, the loan repayments amounted to $7.9 million and prepayment of Paradise Bay loan amount of $2.5 million due to the agreed sale of the vessel. During the same period, the company paid a total of $1.8 million for repurchase of common stock.
The cash proceeds from the sale of Paradise Bay of $9.7 million were received upon completion of sale on April 10, 2019Download PDF
Source: Pioneer Marine Inc.