PANL - Earnings call transcript Q3 2020 | Pangaea Logistics Solutions, Ltd.

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Operator

Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Third Quarter 2020 Earnings Teleconference.

Our host for today's call are Mr. Ed Coll, Chairman and Chief Executive Officer; and Mr. Financial Chief Signore, Del Officer. Gianni being Today's for will available and beginning call at is replay XX:XX be recorded a.m. Eastern Time. referencing The recording or number and domestic (XXX) dialing XXXXXXX. ID can be (XXX) accessed XXX-XXXX by XXX-XXXX international and muted live a currently are session. lines after prepared will question-and-answer remarks, the be there All to It Instructions] over my turn the pleasure [Operator to now floor is Ms. Tiya Prosek Partners. with Gulanikar go ahead. Please

Tiya Gulanikar

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

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

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

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

Ed Coll

a of operations on market all turning us This the for good you, to questions. of update expressing joining to families. more and by call. thank open quarter well third morning our for like you you're I'll I'd on the the to Thanks, safe. our then detailed to overall I provide to line the and begin Gianni, an Tiya, and and morning, you all CFO, over wishes you the that financials. call hope before healthy and overview your provide We'll

review vessels committed have We're Our of who our all to health been comes to dedicated evening. thoughts it company, a grateful time global as chain. And follow they to Pangaea We supply best guidance remains hope release all our and our which COVID-XX. safely. issued the especially the and local are with of you’ve press we'll crew employees. as for accompanying and presentation, had practices operating international regulatory those continue by business support working our our wellbeing were when aboard impacted and the members last to

long-term continued Our quarter And to contracts allowed validates focused model strategy margins. of from it business first third reflected of XXXX. specialized of results cargo our a as strong quarter strong and affreightment, fleet turnaround maintain the us

our summer of deployed the During with improved provide capabilities we've the strength to again, we industry-leading specialized for which our both market strongest, Once class seasonally for ice the conditions. fleet. conditions of from our clients ice specialized is benefited required arrival quarter, and a services the full demanding one of season

per market to rates lower premium TCE by We the year-over-year of rate the a the exceeded for indexes. panamax outperform continued quarter, XX% market the achieved while for day, fleet Baltic to the indexes. Our and $X,XXX against average full supramax average

strategy across various We initiatives. our our allocating prudently also on by continue to capital execute

the of fleet our of the our sale advance of Beothuk total Bulk fleet During part the vessels. XX docking, quarter, to as program, owned in renewal bringing dry completed we

ice cover enhance to XXXX. Furthermore, our focus continue continue take to Further, to delivery to September, which we expect which additional we leading increased in in six ownership solidifying are watch of aboard vessels. late on look XA as project, as of vessels add to we've of ahead, conditions strategically we rotating crews our rapidly in niches by changes sector see to the refinancing, our in we encouraged our class and the COVID-XX, four by from ice we important where environment and newbuilding to progress working will in caused panamax spring taken shareholder XX%, from Gianni class vessels on our value. class later. position steps the the we We XX% we first two the changing Collectively, value our ice

expect, continued Our – impact and its industry, remain the our we markets quarters. and for, year-over-year prepared longer-term the decline over in few orders results on by side encouraged the uncertainty we in the strong, are of cautioned the have bulk newbuilding dry next in however supply

to We opportunities I'll additional will looking new for turn we of Gianni? and the been provide coming to continue arise, clients, best-in-class in services delivering developing of developments now in to details acquire the that quarters. the complements to With financials. business, as Gianni call you look to platform. be new have We updating our over our opportunistic, that, forward vessels when

Gianni Del Signore

and extra for and Again in cases, and to return these or, you unprecedented We we continue Ed, call. hope adjust restrictions new during all healthy remains Thank to to we for our joining normal environments. times. us some their efforts new employees you, safe crew today's everyone as work thank thank on

our our like through on acquisition. I'd recent to financials, expand walking Before

focused operating on resources allocating initiatives have our calls, and opportunities. As on discussed prior expansion cash into effectively been we

in our position for We are ways capital the business deploying selectively our secure and our future. current complement that

ice-class ownership XX% which XX%. panamax excited As I’ve in Holding from the six XA consolidated to an bringing Bulk were one-third of owns interest our owned our acquisition complete Nordic to additional mentioned, we vessels, partially subsidiary, Company, interest

our Further, be X, annual three nonbinding total term statement, of at the installments flow the see Nordic paid at of million $XX $X.X you million rate in in Nordic cash As price refinance $XX Odyssey paid million. interest acquisition $XX.X balance with X.XX%. was on closing the we and year will a a November million Orion fixed a to term of sheet up for seven in signed will to

We which the balloon expect XX, to of and on the down December close come use part to existing within December proceeds XXXX. installments, pay due

purchase to pay facility. Beothuk fleet, steps additional finance taken debt lease financial expensive on the fleet and also average In our our have strengthen most position. our reduce our accelerated age renew January, option Bulk we to off facility our We

are generated TCE million third which cash. X% compared the $X.X from to for same sale, our cargo the the to for financials. we was was period rates. This $XX.X in revenue, million revenues turn I'll XXXX. quarter, clients, completed now During lower predominantly Voyage quarter due of of generated With which our carrying million, $XXX.X that, a approximately third decrease average to

decreased $XX,XXX quarter XXXX, in from from rates the tracking $XX,XXX to TCE the day of third per Our XX% declines year-to-year. market

charter were basis, of the decrease market due $X,XXX $X,XXX day to by exposure a our as as market was XXXX. million market expenses same XXXX, XXXX. approximately the management continued The to we quarter quarter were rates by bunker XXXX. operating However, XX%. The XX%. of to $X.XX compared the company's for decreased and were which XX revenues Vessel achieved to period $XX.X fee, quarter of prices of in was the charter in per decrease or to to approximately in opportunistic revenues, $X.X decline the TCE or million million COVID in on due a to per up Charter to million primarily for market outperform limited X% market. rates was a per period technical million XXXX. expense compared against decrease expenses days, in triggered the result $X.X to share, $X.X in a to which bunkers the decrease QX a third Net for excluding XX% same the charter share a Voyage in in $XX.X tied down the for are million XXXX, compared to decrease compared third the in of rates in $X.XX rate from income and QX $XX.X decline published of

Moving on and flows. and at cash $XX.X to compared XX, cash million the $XX were cash Total balance million XXXX. to cash, equivalents, sheet including September restricted

$X noncontrolling nine million first on of of period in Net as million $XX.X the the to vessels newbuildings months as XXXX, of by vessels of the sale the For compared due interest, by was XXXX. result QX million activities offset in nine to in million was $XX.X well month as deposits of net acquisition operating during $XX.X a cash of compared activities investing cash acquisition the used provided XXXX. to used

our in we continue As platform and a our expansion that progress can initiatives you optimizes implementing assets. see, make to strategy

position to of Ed continually call will, and to for strengthen the get additional also turn expansion opportunities over With growth ability will the by to continue any before portion back that, value. Ed? generate to Our I shareholder extension, remarks financial we Q&A our the driving now while call.

Ed Coll

partnership, shareholders We for commitment quarters. for Gianni. I'll the partners further you floor business look and forward you, thank now customers, continued questions. and Thank in updating open our their to the and our coming we

Operator

Fratt with from of Market. first Your Poe comes Instructions] [Operator question the line Noble Capital

Poe Fratt

good Ed; morning, Good Gianni. morning,

Ed Coll

Poe. morning, Good

Poe Fratt

you're I in seeing would also, like added so. changes ask market highlight? to volatility expand mind, volatility wouldn't you then quarter And customer how the the you comment your if preparing on to and how and like little that could or just your a or for any over of potential bit next you're you activity sort anything you'd – Ed, if

about handle you volatility. that what to If talk maybe potential taking measures could of kind you're just

Ed Coll

Okay.

the and up, into third traditionally I quarter generally it's first we're for on Fourth tonnage And heavy it's we is go period. get as very careful out naturally, side the season you think for come But of good quarter. us. naturally the bit as down. on a and where we for But not will it's But the fleet we a for chartered to that quarter slow quarter especially ice is perhaps our deliver, okay. market, ships, us. a quarter, end we commitments the the take lucky

We I there. set two big problems, very which lucky guys And and suppose we're what policies we’ve sick. we goodness, and on We're for, luck have gotten no that control. here. of board, is preparing one one I out really thank is has been So think like COVID, that's

for had knows have fortuitous had going We The this through repatriating one period, we're people that. problems it no where real haven't ends. That's us. But and now seamen. go to

more for people a our going the can't any to people that of for just And instability a lot stable. a go and that make The business and problem. decisions, has can for you're things the political invest because while. that second – this stabilizes they now problem in been same a think even there in that situation forward. that's My business if in and And COVID, can this seasonally be means not view this But at you're carries and feel and resolved. political will they do situation. comes the the it's can't will for is And until market I but to is regardless helpful, poor now way demand going things that's that through, they see push once the business our not time, it

And and get control COVID, getting some some So part mean through time, been working we we balanced the really but lot – can't of stability a can government of some of by I hopefully, it stability, mean, we've in quite I installed. and the we projects our – instability of if on control is government. can it it's but COVID they've be the can for part but

you So have the book decent. end to on We pretty I with supply just balance, think what looks up need demand is stability.

Poe Fratt

could if under trade you of about Is the maybe When expand the helpful. that – that talking talk adversarial would you're kind question you just that. discussions administration, just And Biden be do should on I think change about? that be would less Ed, potentially you

Ed Coll

Yes.

political. the just don't you what and the not you And every it's think style. morning fact It's problem basic – just wake I that's up confrontational next thing confrontational the think getting I that without is. the know

don't you stability. that If have

and up at just make So and decisions, day capital some the people how coal it let's other we – say, wake things is going industry. and there's you every look can on, they crazy

is the field coal I what people that, to government forever regardless the think done last in industry that understand not start to has on. of going

things they if which those growth energy You market, in don't making new you is lot this but smoothly. see I it for market The start just if trade for examples. take all alternative plants, sure. us any of ways. – helpful coal really guys are And let investments giant a that's stuff, fired think of that's then in a out happen, Those flow of two to will

I think that, hopeful I so And to that's that's be – case. the we're think going

But of So quarter, same bit a – supply sure. then for gets us first the maybe different so knows But beyond And at on going bullish, one good. demand going the issue. economy way, And no No happen. worst forward. think also going the that's haven't more that people real seen a ships thing, pretty least a is but same the over-the-top here, in That's and the our with to we what's trade what's reasons. stability. being first generally for I to aren't quarter, building the and

get optimistic, economy. I cautiously optimistic. think no COVID, that knows settled, will affects the we're The Washington one how in thing the

that's the beyond pretty okay it's for we're And continue And sold come us. our buildings we're end XX a with from our us. like for down year age so. where coming, – fleet the it. and ice a probably new a pick along fleet, situation think those ships five of to And will year, think ships, need it, expand up couple be it's well be with mean you're to with And I And the something doing. X. in ships simple. goal last think at the going that's the way. looking business. ice that, our we've I I through run of the ships modern we'll so tend to average up a looking will you think commodity-based ice long-term – in what in the I different ships balanced are that next the renew I but fleet to need starting I think something or And the we way to of And to like And business. to other them we're more ships It's we fall

Poe Fratt

your you that you're newbuilds, does you little of Great. the what acquisition assets question expand I because side, going mind on arrival was if better overall think ask the and doing also then the just it the And to the it is you shifted I my a asset a – and and more of about of Bulk next Ed, contracted, fleet because read on the has sort but Nordic fleet older how just find selling you year of the will have potentially do right opportunities? towards

Ed Coll

they've time I think to the come now. services. the logistics come we're that things – in of some lot of out projects And quite soon, to sort so. that will And other again, will we're think come That things of I pretty hopeful value we're stuff. on doing and added doing fruition And a spending space. our

Poe Fratt

with Or is another Fall associated space, that talk is River the you to that, there Ed? element logistics the when And about terminal?

Ed Coll

everything. don't finalize, partners. things. probably out. I the already things it's already experts at we will about terminals around lot but just operating. know doing there from have we're come with in talk it doing seeing in We're actually to and Well, It's paperwork there to of if are certain shouldn't some We into yet, already but place. move and working Canada Gulf I we're and not opportunities things And a LNG that

for to things. protects know that worked done kind And partners that we that's not really the And in to some helpful we is bottom not, more where the do it's what the space, And demand can out. think own We've that us. that programs. are yes, of those and we we – ships to we And complementary line. for really that's So our more have charter good the we stuff we're in like I ships have significantly contributes or do. place

Poe Fratt

right? spectrum, risk low mean, very And the on I risk, Yes.

Ed Coll

There but not risk. low a Very it's some lot. is capital,

Poe Fratt

And other end and sometime talk there had the math about in I'm Can then the talk of have paid. at $XX the million Great. spring. it about on that you you're two left correct, a you upon million lag if could later bit the you calling the financing going will million and two around the there? arrive and the year. then Gianni, where be Can delivery of $XX – to capital you little the how if the when you the talk of April a my newbuilds Or works, timing the quarter that of that's then, about financing? is $XX close the be it will can

Gianni Del Signore

Yes, no Poe. problem at all,

– we've in with it its doing a Pangaea partner, joint one that to because contributions capital that So completed were we a already – project. actually venture has

of forward, pre-delivery come vessels. launching upon we're getting partners also And then capital with in Going will our the financing.

will So the well. as financing kick actual in launch at

position. our And perspective, a a we'll company. we're million talking but in delivery think operating from be Pangaea, by $X assets So delivery comfortable that as in today, I some We have position. we're of be And to important borne the take $X for then cost. we're will to strategically get good obviously, them. of million We'll costs

commercial and the complete vessels. committed our a the project, perspective, we're So of from capital it basically will positioning fully. capital to But the be management

Poe Fratt

equity you're sounds consolidated? like And Okay. going standpoint, then and reported it income? you how be accounting when will that to an from be treat may an Or look at that it as

Gianni Del Signore

the SP So consolidated. already is

there's partners, this the that think with it's sheet, be we – We'll for obligations fully purchase entered in When equity contribution be assets And our venture. of to agreement new the into liabilities, So as of line back it in liability the a represents I our our But due purposes, the capture actually. QX, XXX% years balance which consolidated. in is joint on long-term will and other outer will for partners. with that accounting view, recorded item our which liabilities.

It will but fully we it. be currently middle will, the is, consolidate will year. obviously, of towards the entity assets yes, So it yet, consolidated doesn't have and much next

Poe Fratt

higher overall can activity you us of whether Okay, an on we where charter OpEx sort changes at your any current great. cost shifting or you then give then this sit drydocking And And or Where activity idea if of your comment for look sort quarter? could structure, of quarter? the stand days? you the in it's on fleet

Gianni Del Signore

Yes. busy season. season the in Ed deploying fully chartering No very We're ice assets is I vessels. What said a additional earlier, problem. our plus

will Ed So sales average the a we adjust fleet we preparing, XXs said is activity market our fleet expecting the of still market somewhere for We'll size. from the is has But That I vessels. and what – to flexibility vessels we in what a and And about due I more will perspective. to to expect basically cost the be vessels to exposure redeliver think some. composition But market, and do redeliver level what obviously, there's going our and we still few cycle. have chartered-in vessel earlier, can we're from a it we the is do same other owned the in quarter reduce we're we any basis. of

treatment class was next our the ice million the $X we end two we're fleet But dry installations. do actually, than assuming to unusual, dry – docking, chartering expect just ice still still docking. dry that it's two $X around will So around remain to dry The two XX but class docking. allocate docking this say, I vessels year I of it have of million for towards in XXXX, some our quarter. But for slightly think And normal [indiscernible] the year. would QX, I of think actually lower vessels, I will complete to our nothing

Poe Fratt

And Great. venture if then it's the and Okay. talk presented about and Ed, itself maybe, how acquisitions you could joint that obviously.

the then operating that that. possible? is describe sort of the the you know no at the of and with diligence. acquire potential that But due if rest can problem something maybe there, just JV, And is history You look then to –

Ed Coll

capture out you substantially, matter, the one on Nordic was to the [indiscernible], the way able spent stake were to begin the increase partners XX% about it of course, pricing. get talking structure we time wanted And structured of logistics? more basically of We right the the the way Okay. out. with. was setting Are the guys that came is to That's of we because it right. a our of upside captured And because as the

So now we capture more.

the of And getting they're We last business. have drybulk control. people – better that out

it it. us to So suits do

do still make money it's only other – and want go with no, The also said, we shipping to them partner you they investment ask we it.

we stay. So want to

it's I hard partner. control. so more always And I gives And have when you – think difficult it's if us one think you it enough

pretty mean, difficult. have If satisfy I you people it. to than a shipping, opinions, that you get in a the right. and in have more my in ran XX was pool, you and we that, early if spend it's nightmare, XX partners shipping managing days like you have all your time And you

the with doing we done people trust. thing We've same with with we the it's mutual partnered that are business logistics based. other a have and We've before, projects that So know. we're

way So the to I that's think – go. that's

You share your expertise.

Poe Fratt

I about that then on four the the same are Perfect. but and you're you talk Gianni, the late XXXX? on early I'm XXXX due can I ones am sure facilities Okay. Gianni, the apologize. if refinancing, in not other for feedback refinancing And hearing as the potential

Gianni Del Signore

seen, with I Actually, you've in think, amended Sure. date what our the existing Odyssey Q, Orion. lenders, what that the we actually facility of repayment on we and the did

in we complete. what XXXX. or So balloon the happy happy capital financing the early have we're a is after and The in moved four due remaining done, attractive lenders or to developed for on that in we September, XXXX access expect range. complete very the we'll of were We've We'll with I end financing negotiating well forward vessels. to lenders package with actively two as December. working late and good those to we're that Odyssey relationship on originally, we're think company a Orion we move payments have the them

their sheet, and that those payments a ships well signed not are before expect very, we have refinance four very We term balloon due. early well but we'll we come close, as

far intention currently leverage of will existing they those to further than levels to There's on other lever as be are. ships, As probably ships debt. any the four the profile it close no up

to we vessels. for reduce runway, on a benefit seven amortization. cash stability little longer years. longer and paying breakeven and financing a a have company our quarterly want So in They'll in We'll have our our six the runway lower more

Poe Fratt

Great, thank you so much.

Operator

[Operator Instructions] At this it time, there remarks. are I'd no further to to for closing like management questions over in turn queue. back

Ed Coll

Thank safe this and and you for very family. morning, your much joining us stay you

Operator

Thank you. This concludes today's conference call.

may disconnect. now You

Pangaea Logistics Solutions (PANL) 12 Nov 202020 Q3 Earnings call transcript