Pyxis Tankers looks set to hold fire on any ship purchases until more “attractive situations materialise”.
The Nasdaq-listed product tanker owner said developing incremental opportunities for fleet expansion of midsize vessels is challenging, especially for modern eco-efficient MRs, given high asset values and the positive outlook for those markets.
“In light of this, we expect to maintain our disciplined approach to capital allocation until more attractive situations materialise which may further enable us to enhance shareholder value,” the company said.
It said it has available cash on hand and short-term deposits of almost $48m, thanks to earlier asset disposals.
These funds, combined with potential modest bank debt, should provide it with the funds and flexibility to pursue the acquisition of up to three additional midsize vessels at “reasonable terms when the opportune moments arise”.
“In the short term, we expect to continue to use free cash flow to further increase balance sheet liquidity, repay debt and repurchase our common shares,” it added.
Late last year, Pyxis sold the 50,295-dwt Pyxis Epsilon (built 2015) for $40.75m in cash to US Marine Management to serve a charter to the US Maritime Administration.
After repayment of the outstanding indebtedness secured by the vessel and the payment of transaction costs, it received cash proceeds of $26.4m.
The shipowner reported a jump in fourth-quarter net income on the back of the ship sale.
Net income was $21.6m, an increase of $15.1m from $6.5m in the comparable period of 2022.
For the three months ended 31 December 2023, its time charter equivalent revenues were $12m, a decrease of $1.9m, or 13.6%, compared with a year ago, when it operated more vessels.
Chief executive Valentios Valentis said: “In the fourth quarter of 2023, the product tanker sector experienced strong chartering activity due to good global demand for transportation fuels, relatively low inventories of many petroleum products, healthy refinery margins, combined with the impact of the ongoing war in the Ukraine, which has led to continued market dislocation of shifting trade patterns and ton-mile expansion of seaborne cargo transportation.
“During the fourth quarter, we reported an average daily TCE for our MRs of almost $30,500. Recent hostilities in the Red Sea have further supported the strong product tanker environment and as of 12 March 2024, 92% of our MR available days in the first quarter of 2024 were booked at an average TCE of $30,300 per day.”
