PANL - Earnings call transcript Q3 2018 | Pangaea Logistics Solutions, Ltd.

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Operator

Good morning, my name is Maria, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Third Quarter 2018 Earnings Teleconference.

Our host for today's call are Mr. Ed Coll, Chairman and Chief Executive Officer; and Mr. Gianni DelSignore, Chief Financial Officer. recorded a.m. be being beginning for is XX:XX at call and available will replay Today's Time. Eastern recording The XXXXXXX. accessed international, be can and or for referencing XXX-XXX-XXXX, domestic, ID number by dialing XXX-XXX-XXXX to [Operator is Ms. Instructions] floor now pleasure It over turn my to the Partners. with Prosek Kathleen Bentley

Kathleen Bentley

Thank With for us Officer, us and the are morning's thank today for call for CEO, you earnings DelSignore. Chairman Coll; Gianni Financial quarter from Mr. XXXX conference and and Mr. Pangaea you, this Maria, joining third Logistics Chief Ed Solutions. company

the I like about within XXXX Litigation Before contain This to to Securities read call of statements turn over conference Pangaea Ed, Logistics the the forward-looking statement. Private Act I'd meaning Solutions. of safe harbor Reform could

to attached on on filed facts. at differ are was with and in or forward-looking actual herein that statements be website with to release, X-K current subject Logistics the Forward-looking in upon the the recall light company risks. in can of based section expectations Investors the such this statements. any from information accompany supplemental call. to slide should Such cause does available sec.gov. which a this forward-looking that the the of management which SEC's and be statements that evening's Pangaea of assume slides Securities not risks the on is obligation found conference understood are Logistics statements call. and please beliefs update are risks www.pangaeals.com contained Solutions Those the Logistics filings Such information last Pangaea are Commission. Also, Pangaea presentation Solutions' will Exchange under results set not could The uncertainties, are and forth discussed historical fully Solutions' to more based filings

to Solutions' Now Logistics I and the Ed Mr. Ed? to Pangaea Chairman CEO, Coll. call over like turn would

Ed Coll

overview our you, morning, all operations good provide an and Kathleen, open questions. third to call. to of detailed you This for presentation, more a release then update call had morning of provide overall turning last over line financials. for market I'll on to issued press our we before evening. us We'll you Gianni, accompanying the and quarter the and the review of in our CFO, thank the which We Thanks, joining hope to time that the

the third During increased drybulk Index its of the to X,XXX, XXXX. Dry maintained quarter, up of an average the during X,XXX momentum strong industry from third Baltic quarter the as

with industry into key that given X We performance improving expect corresponded X supply/demand of attribute We these our detail, and own on global both is shortly. to strong more trends strong the seeing. are will Gianni to XXXX discuss month in continue this results The dynamics we which basis. X drivers, the

summer, extensive performance in meaningful cash for all the particular, First, in XX season. Having summer important Baffin summer the voyages driver land, of strength quarter. ships Northern X third infusion the route us. during was which Sea ice embarked of on an to ice the was a The

capital. we way significant meaningful Second, food efficiently flexibility, to deploy cash chose sheet provided in our levels us ships the and particularly with balance generating acquire management financial working and

Combined, start Third, our we're in fleet that quite with chartered performance our nimble level sale advanced of strategy of being well of. our positioned improving leaseback to remaining having flexibility net and an transactions commercial income. market. proud a in I'll drivers react generated these

the year XXXX. Trident. have million In my of a that a XXXX, in of the our notable from XXXX. in In quarter ships of of the as during completed attributable first comments third and XXXX. vessel August, million to developments the to vessel, the or expect share, in delivery XXXX. shipping the prepare in days performance. about income strong income to to through by $XX.X TCE motor full earlier shipping June, more this million, X million million On the or The the flexible $X.X pods. $X.X of XX to year, These events decreased to $XX.X X higher fleet net X-month Pangaea was basis, positive bulk we $X.XX of first albeit, we is attributable in COAs XXXX. cash X revenue the close the share largely months X with back compared of $XXX $X.XX the that net that million, $XX.X our which a following markedly financed a nimble, was we XX% a basis, the we share we we elevated of vessel we briefly of conditions shipping commercial optimism rates. driven increase compared I'll will announced for motor share, month owned our Pangaea third or decrease a summarize days of Closely new $X.XX cash a to to vessels the towards see level we months Total now market increase which grew decrease notably, a $X.XX quarter at during the the in XX% or XXXX, to coming during had in X $X.X This the advantage months of to million due some the impact On to to attributable X,XXX, compared to speaks year motor strategy. sale-charter that QX, our take ended million, purchase Spirit, closed first year. days Most Bulk $XX.X throughout a

far. a had you so tremendous XXXX As we've have seen,

operations fleets We the our to compiled the are and we've partnerships, state our support of Nordic pleased them. regions, the in with current

about from it. given our the industry more broader current and uncertainty optimistic independent particularly economy the XXXX, are is We surrounds that

on excited ice We we about fourth remain not business the you and through our our additional but the future the look to Looking that, the ahead, within in the towards Gianni, quarters. aluminum updates and details trades. the over I'd steel to coming the providing and have the also for about financials. call With the turn to optimistic forward opportunities now of to market quarter like we're only year landscape, our and with strength company, provide seen over

Gianni DelSignore

Thank you today's us for call. all on joining And you, thank Ed.

Before Ed's our further to earlier comments walking our capital expand wanted through model on strategy. about financials, and business I management

Our sale leaseback a that of financial strategy flexibility optimal balance level has our has afforded to us been sheet.

that delivery to explore opportunity various XXXX, comfortable in Our be nimble shareholder position, we Bulk a of enhance in do recently announced in options take improve, which market we quarter feel protect of Bulk current to so environment, finance capital, Further, in first and Spirit, chartering the acquisition example. to diligent, us the our where great We is and the rates ways to our our helps expect that protect deploy we as we gives And Spirit. value. even strategy which to margins. current of strive continue feel the today's

Charter compared that in generated such, period about $XX.X begin our and still $XX.X As same the the are we're opportunistic cargo $XX.X million which to revenue, million quarter third of total in began in impact which was compared Slide why XXXX. shipping XX% quarter X the revenues, of the of you increase XX% revenues to XXXX. seeing presentation. generally rates drybulk turn voyage predominantly days days, decline XXXX voyage was our Total were total due increased for decrease The carrying This a COAs XXXX. million see third million, from completed by X continued same to the by clients, were charter by for are XXXX. the can in decrease see Further X,XXX XXXX. revenue. XX% $XX.X you'll our for X,XXX, to With financials, for market a XX% revenue in to $XX.X to to period driven us, of to or ahead. prior which year $XXX which from from tied XX% days, number million, down to optimistic market improvement offset of in now that, for for of rates is of million The the on which start time to quarter I'll and the decreased our a the compared was breakdown, represented X%,

by tied expenses the average from driven quarter-to-quarter. million Moving higher to period which, charter Charter a the is to $XX.X in on same overall to bunkers increase voyage number decreased a for $XX.X decrease of of XX%. expenses. which $XX.X to hire in expenses is were QX, by decrease days, XX% decreased the This of saw the days, a an million. XXXX in in This expenses quarter cost third million. by again, Voyage at offset was that compared charter XXXX

increased frame. The vessel X is including day up for company due over $X.X have XXXX market charter in improvements operating million management of operating to were same by of X of acquired $X,XXX XXXX. December in per approximately increase XXXX. expenses XXXX. the vessels, average in $X.X we're the time the XX%, per August from paid addition seeing drybulk vessel However, higher in X% the months day by technical compared to continued Vessel expenses same pushed and the XX, period rate operating the to the Further, million expenses fees ended the September

in per attributable For same income compared quarter, share XXXX. share, of per $X.XX to to $X.X $X.X or net $X.XX the the or we Pangaea period million reported million for

you which you find to of equivalents our flow Now Slide our $XX.X balance with earlier presentation, financing will as the from operations. million positive see X well and XXXX. XX, XX, generated December driven flows, were on cash million XXXX, cash compared cash will $XX.X by strategies moving our as discussed on as unrestricted increase An of and cash on sheet September

million time taking same These million compared net we company's X ice-class before by XC I for additional result to new vessels provided million, by was quarter the now XXXX. in $XX portion $XX.X the cash in will million, during in to compared remarks used of are builds, call. net of activities of finally, of the QX period the $X.X get provided activities investing was back of in investing turn With to activities period, any to our compared financing financing the $XX.X net changes XXXX.And activities $XX.X third Ultramax Ed, XXXX. the million, primarily $XX.X the for same operating the that, over XXXX. the cash during end cash Ed? call Q&A of activities totaled by And Specifically, provided million used to at delivery

Ed Coll

Thank you, Gianni.

tone, see to over from our the the market's We from and past the coming of our ability quarters progress to to forward the with hear optimism questions. can on floor trajectory. our the capitalize our you As quarters the upward in now open you and updates we're pleased look and with providing continued results over business recovery we'll

Operator

[Operator questions. NOBLE Our first for Thank question Capital you. from Instructions] Markets. open The floor Poe of line of comes Fratt is now the

Poe Fratt

quarter. market some Really are the mind. good there there Hey quarter you of of wanted was morning. that another pulled if avoid of There what forward people explore this third now? fourth Have And the all tone issues you're and trade seeing too? other a maybe that Is move it's because to and are just don't is whether who to solid some people any, is the And tariffs in there and right looking I cargo? third just current your of quarter? I the start a the demand happened sort how that because at sort quarter into out thinking in or you Hey, guess, sort -- discussions trade of Ed, in any with low issues. or tariffs something seen to of early

Ed Coll

but, it It's maybe might is, question. the see hand, it's like one for for good also opportunities. But view And creates that, a the you on a Thanks course, never picture, trading it as the markets uncertainty Okay. as because good broader I something uncertainty, would in question. of

in not the have situation I do it's everyone, in difficult shipping of slowdown in for and but the running in area world people And We -- a prices. trading in we uncertainty, a think, nor things economy, because tariffs. just in not our world seen of it's every to it's oil have early seen demand of because also

in So the And kind in, giant more not slowdown the you, it's we've We of, horizon it don't coal materials across see that that as day-to-day any iron movers -- the our see on move, -- the demand. that seen slowdown. big but demand to movers, cautious in think but makes we're indicates world. not don't know, a of we type or anything ore you that we're we

Poe Fratt

next of And then, the into for how Ed? quarter the and into the is year visibility rest even, the

Ed Coll

quarter. fourth that I looking you're think at

strong South pretty good. But the it also which it's despite is soybean year, think, going coming into looks thing in on, the America, movements, to I right, next interesting. you the have move general, pretty

some think can correction in I what's healthy the no and or of everyone XXXX pay But very the economy, because point eventually. there a go certain have XXXX, water supply knows. that be that's between that at it's fact world sort the to should see interesting on whether for in side, of that the ballast their in, forward more will ships, against having treatment we scrap up to buildings as lack one new people [indiscernible]

good. And a cost so big new is There a so not lot the jump of building money. pretty orders, far supply side looks in which

damaged equity private badly very that who that And lot a recent cautious. lot have We to are and of been then do people have anyway. basically have a in pretty the have the you years of guys money don't

on good. looks supply you, think, So I side, pretty the it

there a, a the demand, future. for So market eventually correction remain in should pretty is if even strong foreseeable the

Poe Fratt

more in specific route. the vessels I And going specific it on about what need? the out new you Or that Is just would you do a a, Or ask new need? highlighted vessel, then chartered back growing a capacity very it if the, this is made towards see the fleet? acquisition specific broadly a And oriented previous could the there you Spirit. it, is

Ed Coll

owned always balance a we that's want and mean, keep our Well, I shifts. chartered to strategy. between ships

for value. So continuing to we're always search

has she's would a but Oshima, good consumption, And practically a low most she has for of people smaller want, our And quality than ships are, ratio deadweight/draft she and where so trades. that very a very our were able price had looking built get price, we ship, added, we particular ship. go in have half little are general we rid patterns. that of. it. trading gotten our That ships ship a to sharp discounted because And X we into a forward, we now long-term And will good for

effectively Chinese joint And is venture rid a of year, a own. to so them. we And we couple that that those prefer didn't this that of end know we coming we older the get ships did next to of. have to were a replacement. probably be -- ships with And we And will

part ships process in it's with So for general of step-by-step going trading. replace way forward and taking shifts replacement younger to a the older

Poe Fratt

of, And do also any advance if need ballast -- a as IMO to the sort expect from activities far water to standpoint XXXX? with in And is you're your treatment. in XXXX? then the then Great. posturing just quarter? And if you of, there going experience as that sort fourth CapEx Anything highlight, on for could, -- you you XXXX, dry-docking mentioned to in

Ed Coll

scrubbers and, each down a story it of think, everyone this it. at ships and some think ship just or that the And country. up we parts say they not scrubber. of can't something trade in modern where find with are ice come you to here has for up decision very came has for look view And in we individual day ship I we other in the is every may bit allow they a a that having world. with fleet example, everyone a going different it Norway seems into ships, also hot with -- about the scrubber the it come we I a When to will the are that their

fuel very we quality approach course, going quality of the are you fuel. and You're I on the problem burn whole you have And a developing have just it. we the with with field prudent -- a have now think fuzzy being continued just to -- of and to how problem so is better of then

We front telling and the there plans for watch have on to what watching capital-wise We're -- anything I no in or sorts but that we're if waiting. XXXX. prices People in widening. fuel do not they're the stories, were spreads now current all watch are of you

deared and I watchful, it capital mean, to just are want we don't around. just -- is So splash we

Poe Fratt

if Or financing do that? as finance seen may, the you far don't I Gianni, you how for to if anything Bulk Okay. I all? think I it the as intend And have Spirit,

Gianni DelSignore

on do and sense financing, whatever there we the best Yes. We'll what in Poe, We've makes similar, time for in expect to think but and comments, sort as always, do looking earlier at we're set options. to at some is first do the our whatever something delivery sense. we're going -- is time said do view like yet. historical, what you if the is until nothing of, But company. the I our But look long-term I quarter. best view of makes we'll at in

Poe Fratt

then the the noticed some of on that And sheet. I you balance highlighted changes

I at -- what's look quarter Is running fourth as the of priority if on sort What You're priorities. you on balance side we'll through now in the down high XXXX, if for right the paying noticed little just, please excess too. XXXX? of, your into us waterfall you you and a of, it balance went down cash far Can you're, sort of, could some bit. sheet cash? If liability you dividend kind what, then pretty where see this, the as comment changes balance walk and that,

Gianni DelSignore

Sure.

strategy there working as to to able capital capital to to so. comment the have and the we we flexibility think capital in need said, to fleet, to add precious us to our the the working I to I'd flexible be being have be is our it's, chartering ships nimble, do overarching is, need

so. we from capitalize we to an need there If to top to we our our or cash have priority. demand opportunity always out the that do we on want see that's really So cargo see book

service, And servicing forefront. normal our debt. are then we which, the debt at we always that's So our have

we couple per debt of repayments and up in have then We XXXX XXXX. a have balloons X for next year of years. coming the And $XX million

have have we So we repay of we have we have did those, we bit ahead yes, And party related runway, that but ahead a that loans, some, us, us. of of we to did, we pay that. these many sheet if years and and we capacity to have the we for can, been sitting time it's on start our slowly, that balance have

we'll keep the it. So that's allocate and waterfall that always doing that priority our would that's been we I think and

Poe Fratt

Thanks much. so Great.

Operator

time, additional this back the any for And at remarks. further questions. no to would floor I turn there over management to closing like or are

Ed Coll

morning. this great Well, join thank a the everyone, you taken for all us have to time And day.

Operator

you Thank conclude call. today's this gentleman, ladies and conference does

You may now disconnect.

Pangaea Logistics Solutions (PANL) 12 Nov 182018 Q3 Earnings call transcript