Niche bulker Pangaea Logistics Solutions has turned a third-quarter profit on the strength of its fleet in the Arctic ice trade, even as it prepares for a merger vote that will change its look radically.
The Newport, Rhode Island-based owner-operator announced after the close of business in New York on Tuesday that it had recorded adjusted net income of $11.1m, or $0.24 per share, down from $14.4m a year earlier.
While Pangaea is not widely covered by equity analysts, the numbers are exactly in line with the figures expected by researcher Liam Burke of B Riley Securities.
Bottom-line net income of $5.1m was down from $18.9m in the same quarter last year.
But time charter equivalent rates were $16,324 per day, a figure Pangaea said exceeded the Baltic panamax and supramax indices by 19%.
Total revenue was $153.1m, up from $136m.
TCE rates increased 4% from the $15,748 earned a year earlier, and vessel days rose by the same percentage.
However, adjusted Ebitda was down by 14.2% to $23.9m, which Pangaea attributed to higher voyage expenses and charter hire costs that offset the benefits of higher market rates.
Chief executive Mark Filanowski said: “The third quarter is a seasonally active period of the year across our Arctic trades.
“We optimised our ice-class fleet during the quarter and we delivered a year-over-year increase in both total shipping days and TCE per day rate.
“While market rates declined as the quarter progressed, our reported TCE exceeds prevailing market indices by 19% in the period, given our strategic focus on premium rate trade routes.”
The company reported a slightly softer TCE of $16,629 per day with 3,378 shipping days fixed in the current quarter.
Pangaea says it operates the largest fleet of high-ice-class panamax and post-panamax bulkers globally.
But its fleet profile is about to change markedly with the big merger-and-acquisition deal announced in September.
Pangaea announced it has signed a definitive agreement to acquire the 15-unit bulker fleet of private MT Maritime Management, bringing the first handysizes into its fleet of 26.
Pangaea is paying $194m in stock and a total consideration of $295m including debt, giving the Connecticut owner a stake of between 25% and 30% that would make it Pangaea’s largest shareholder.
A shareholder vote is scheduled for 2 December in Newport.
“We look forward to having the MTM transaction closed by year end, subject to the approval of our shareholders, positioning Pangaea to deliver an expanded portfolio of services across a growing customer base in the year ahead,” Filanowski said in the earnings statement.
