Niche dry cargo specialist Pangaea Logistics Solutions has snapped up two 2016-built supramaxes for $56.6m.
The deal with a seller that was not identified reduces Pangaea’s average fleet age and enlarges its size to 26 vessels, it said in a release of first-quarter earnings after the close trading on Thursday. Delivery is expected in the third quarter.
The buys highlighted yet another profitable quarter for the New York-listed shipowner, which reported adjusted net income of $6.6m, or $0.14 per diluted share, on revenue of $104.7m.
In a first quarter that was unusually strong across the broader dry bulk market, Rhode Island-based Pangaea improved substantially from the first three months of 2023, when it had adjusted net income of $3.5m, or $0.08 per diluted share, on revenue of $113.7m.
It also took another step to expand its port and logistics business with investment in the Port of Tampa, Florida through a strategic partnership and long-term land-lease agreement. Pangaea aims to handle dry bulk commodities that are compatible with the cargoes on its vessels.
“Our flexible, cargo-focused business model continued to drive premium earned time charter equivalent rates during the first quarter, positioning us to achieve improved operating leverage and year-over-year growth in profitability,” chief executive Mark Filanowski said in the earnings statement.
“While the first quarter is generally a seasonally softer period for dry bulk activity, our first quarter results benefited from elevated long-haul voyage demand across our ice-class fleet, together with a solid base of premium long-term COAs [contracts of affreightment].
“As market rates have increased in recent months, we’ve added to our cargo commitments to fully utilise our owned fleet and we have chartered in more vessels, positioning us to optimise our TCE performance.”
Filanowski was upbeat about the quarters to come, given strong demand and constrained vessel supply.
Priorities for capital investment this year include further buildout of the logistics business and investment in fleet renewal.
Pangaea said market conditions remain strong in the current quarter with average TCE earnings exceeding $16,000 per day.
This is, however, down from the $17,700 last quarter, which the owner said exceeded Baltic panamax and supramax indices by 29%.
“We’ve built a durable model, one that consistently drives premium rates above broader market indices throughout the cycle, while delivering sustained profitability that supports a robust cash dividend,” Filanowski said.
