New York-listed Pangaea Logistics Solutions once again has proved its resiliency in a falling dry bulk market as it managed to turn a profit and notch a 41% rates premium in a fourth-quarter 2022 that was significantly weaker year-over-year.
The Mark Filanowski-led niche-cargo specialist managed adjusted net income of $14.3m, or $0.32 per share, on total revenue of $128m. This was well down on adjusted income of $24.9m, or $0.56 per share, recorded a year earlier.
Revenue fell from $235m a year ago as time charter equivalent rates plunged 38% in the weakening market and vessel days were trimmed by 29.2% to 3,681.
Pangaea, an owner and operator of bulkers, is not heavily followed by Wall Street analysts. But its numbers easily beat the earnings per share estimate of $0.19 from Alliance Global Partners analyst Poe Fratt, while also topping his revenue figure of $87m.
As seen with reporting by other public dry bulk shipowners, the market has continued to weaken into the current quarter. Pangaea guided to a TCE figure of $15,065 per day with 3,970 ship days booked — seemingly close to the full allotment of days for the quarter.
Still, Pangaea extended its track record of outperforming falling markets based on its contract-oriented, cargo-first approach and its agility in redeliver chartered-in tonnage when market conditions sag.
The operator said it outperformed the Baltic Panamax and Baltic Supramax indices by an average 41% to close out the previous year.
“During the fourth quarter, our chartering strategy drove positive arbitrage in a falling-rate market,” Filanowski said in an earnings report. “Our premium rate model, which leverages the integrated benefits of specialty cargo carriage and onshore supply-chain solutions, contributed to an adjusted Ebitda margin expansion.
“In 2023, we anticipate that a post-pandemic reopening in China and stable economic activity in the West should provide incremental support for global dry bulk demand.”
The Newport, Rhode Island-based company also disclosed that it had agreed to sell its oldest vessel in January. Pangaea said the 52,600-dwt supramax Bulk Newport (built 2003) had been sold for $9.2m to an unidentified buyer.
The sale was in keeping with Pangaea’s aim to keep average fleet age below 10 years.
Filanowski said the initiative would help in meeting new International Maritime Organization protocols such as the Carbon Intensity Indicator grading of individual vessels.
“In recent years, we have invested heavily in upgrading and refreshing our fleet with younger vessels, ensuring we are well positioned to capitalise on the IMO transition,” he said.
