Tanker owner Performance Shipping reported a profitable first quarter thanks to strong tanker rates that the company believes could continue beyond the end of this year.
The New York-listed company reported a quarterly profit of $15.7m, reversing a net loss of $2.08m in the first three months of 2022.
Performance’s net income attributable to common shareholders came in at $4.62m, including $10.6m in non-cash items typically excluded by analysts, flipping an $11.5m shareholders’ loss a year earlier.
The profit gains were driven by a 245% leap in revenue, which jumped to $29.5m during the quarter from $8.57m in the same period of 2022, which was fuelled by rising time-charter equivalent (TCE) rates.
“During the first quarter of 2023, tanker market fundamentals remained strong, supported by the ongoing shifts in trade patterns resulting from sanctions on Russian crude oil exports, thus benefiting longer haul tanker voyages,” said chief executive Andreas Michalopoulos.
“Improved ton-mile demand, coupled with limited supply growth and recovering demand from China, created a solid tanker charter rate environment.”
The specialist in aframax-size tankers reported TCE earnings of nearly $41,200 per day per vessel, up from $12,400 in the first quarter of last year.
But Michalopoulos does not believe that will end here.
“We believe that the overall positive developments in the tanker market and the firm freight rate environment will be sustainable through 2023 and beyond,” he said in the earnings release.
The company owns nine aframax crude tankers and LR2 product carriers, with one LR2 on order.
Five of the tankers are locked into time charters with rates ranging from $23,000 to $45,000 per day, giving the company a $54m contract backlog.
| Q1 2023 | Q1 2022 | |
| Revenue | $29.5m | $8.57m |
| Voyage expenses | $1.54m | $3.38m |
| Vessel operating expenses | $5.14m | $3.33m |
| Net income (loss) | $15.7m | ($2.08m) |
| Net income (loss) attributable to common shareholders | $4.62m | ($11.5m) |
| Diluted earnings per share | $0.55 | ($51.46) |
