PANL - Earnings call transcript Q4 2020 | 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 Fourth Quarter and Full Year 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. The recording and XXXXXXX. XXX-XXX-XXXX XXX-XXX-XXXX dialing can be referencing accessed ID by or number there and the muted question-and-answer currently are a live lines prepared All remarks, will be session. after Instructions]. [Operator my now the turn to Ms. floor pleasure to is It over Tiya Partners. Prosek Gulanikar with

Tiya Gulanikar

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

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

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

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

Ed Coll

provide moving for before overall to joining like to call. all fiscal provide quarter to over thank of and the CFO proud and Gianni, of and all call safe, morning healthy both this us remarkable the by I'd I'll of update impacted good truly We'll is perform year standards company line thoughts been you. year, you team The an market performance the entire questions. the to on you're with This turning vessels. And challenges on keep shore have on that safety overview especially and to hope Tia to morning Thanks, those our the to are your on pandemic operations fourth appreciated. of our families. of adjust and our rigorous by to and COVID-XX. against well-wishes forward then the who global begin our I'm and more open efforts to XXXX is for at best-in-class you work still expressing I and a of a the financials. detailed our the and as the team results

presentation, business press release and signatories local from We seafarer the last to our when employees evening. of. the review of which Neptune and hope guidance we wellbeing a comes all Pangaea will issued to international entire recent which to safely. time also see proud best operating in committed wellbeing to regulatory were had practices to follow we health declaration, attention it were as pleased are continue you've company, our the remains to and and the accompanying and industry We our

off with of another profitable capped net of million strong year quarter full fourth $XX.X year $X.XX. income share and earnings results Our per

involved to think that XXXX prioritizes this. client markets, our helps cargo, have said profitabile remain simplified we focused we As past, in model us in and the business

quarter first the sync with strategy poor limit in in needed in to by redelivering costs owners the lower returned and Our year cargo their us to that quarters. when replace exposure our and at we to them allowed vessels demand nimble the in markets third early second experienced the

in XX to and Our vessels second expanded XX end. average back to year the vessels by quarter fleet contracted

today, of close operating to As our we're XX of vessels. high average

Our year-over-year to a a market of Panamax achieved rates outperform average the indexes. the against indexes. TCE premium the rate Baltic by lower while to $X,XXX Supramax market exceeded We day, continued average XX%

terminal XX% we leading services, we In solidifying to position class ice cover to solidifying class hard from which addition niche. XA additional class our fleet, business increased our this moving and expanding Panamaxes by ownership base opportunities ice keeping important the later. in worked Gianni refinancings six strategic position our XX% strategically in redoing late ice successfully, to our company's on our our In in September, our and sector will

decline Bulk effort expand Courageous, the are value Promise. enhance to Panamax we steps We the we've four Ultramax progress encouraged our to These building of we're the value. two the of first in additional to and sold shareholder months. continued platform to XXXX renamed our recently are recently new class quarter. pleased vessels customers market and vessels to ice we to be our older in of purchase in prior acquisition that the our improve to steps fleet for a and in in XXXX which and XXXX renamed see a Both announce to in few a also next of our built to entering turn taken be Collectively, delivery take the We project expect our second ways efficiency. expected four to in -- and age be transactions built add XXXX acquisition the by announced of Bulk sale delivered

and the a year to economy bulk the us. we for is continue on capacity. demand appears long-term building be bright to dry dry bulk new effect recover positive mitigated orders, which have should we As for the Simultaneously hope will restraint ahead, COVID-XX shipping bulk world We world this the look coming see industry. dry economy, for increasing in in

welcome XXXX of a and been quarter surprise the an ahead. first perhaps to many have rates for indication year The

have and continue always looking updating of business be platform. opportunistic complements that opportunities for when to Gianni. on vessels that developments to acquire uncertainty the and developing as to new you prepared delivering we'll to clients, new call quickly. quarters. to Gianni we're in arise react provide With coming services details continue forward our additional over the look been our we We'll our We best-in-class However, in for markets the financials. like turn in to I'd to

Gianni Del Signore

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

financials, to recent expand our through Before like on few walking transactions. a I'd

which As Nordic excited owned I'd Company, Bulk refinancing partially This were six from Holding class our vessels, consolidated to the the opportunities six mentioned, interest XA complete acquisition to on XX% vessels. of we in ownership to Panamax bringing led subsidiary interest ice additional an third owns XX%. one our

X, $X.X and and As million a balloon you debt transaction our financial back loan to financials, X.XX%. renew end be four for The a will the is financing also for used Nordic the see age, in fixed Separately over refinance class the close completed XXXX, from we our $XX we interest additional new letter will paid steps six term fleet, facility at lenders in a Orion million obtained our Odyssey vessels. Nordic average senior first in seven two is $XX position. taken year on to on year commitment be million March year trend our to vessels, of to expected ice the We've strengthen next a which fleet couple to secured remaining weeks. and reduce December

with upcoming payable also additional led acquisition February In signed to Courageous X.XX%. Bulk of $XX our up LIBOR the seven to term plus financing over a an interest million mentioned, of Ed opportunities. rate sheet for we years As

lower X% a TCE to decrease of approximately $XXX.X expect carrying with of This starting now on full from X period close delivery We the compared of to to our was revenues in million cargo that, are Voyage our $XXX.X revenue, year turn due clients vessel average same XXXX. Page presentation. April. our is the financials predominantly generated in I'll to With for rates. which million, simultaneously

rates $XX,XXX tracking declines Although per from day market in year-to-year. day XX% TCE the XXXX $XX,XXX per our decreased to from

market expenses charter owners due million as X% down limited charter market. to decreased market million. decline our However, to million revenue to the decreased from third-party days, $XXX.X the the which by a paid approximately company’s time $XXX exposure in opportunistic published decrease to rates Charter achieved The rates in XX%. rates $XX.X against charter and revenues, decrease which are TCE compared rates to continue to in XXXX. and in market was were outperform to $XX.X we ship tied million to Charter a

was days operating which to vessel in our XX% The decrease expenses, by to chartering typically offset to Due strategy Our on XXXX, a in clients supplement owned own short-term of basis when decreased of vessels by led nimble vessels us to chartering sale needed cargo we also decrease sale to our charter meet early vessels a XX%, the in rates. $XX in allows XX% to increased commitments. in which charter fleet million.

for million basis per million to Excluding share technical period the a management the Net or expenses fees in was per income operating per $X.XX $X,XXX $XX.X per day $XX.X XXXX. year vessel on same $X.XX was day. for share compared or

flows cash X and and strong suspended however, dividend. cash we on the position, We XXXX, equivalents, of of a a year and investing million financing restricted our to in including Page announced operating liquidity an quarterly activities. sheet ended cash share temporarily per we $X.XX of early balance the reinstatement dividend to on cash the of maintain In our December total active with year Moving presentation. $XX.X following

down million million earlier current which a mentioned with of four expected as approximately debt, reflects Moving vessels, to $XX due be of sheet, ice loan portion new our facility. $XX on refinanced the long-term is is class balance which debt

and see, assets, As on our you platform client’s focus our strategy continue value. optimizes first, adds we puts needs expand that a our and cargoes can to

our now generate call. continue before the shareholder new the portion the back turn get drive any as to projects I opportunities of XXXX, in additional value. Ed. about to expansion excited are Q&A and over for we we call Ed will We that, remarks and With growth to

Ed Coll

updating quarter. and We look you to Gianni. we and customers, business for commitment shareholders further our the you, the forward in Thank coming And partners continued partnership. thank

We will floor open now for the questions.

Operator

Instructions]. you. [Operator Thank

comes first from Market. Fratt Poe Noble of the Our of Capital question line

Poe Fratt

lock to I ask wanted being from than a the of good current the you been where part the see the to couple two market could Good higher Gianni. for And then of wanted changes own the morning are the say the the you first environment, quarter to about perspective, rate by And customer behavior are in will your your or anything because talked changes any triggered fleet I in change just Ed, stronger seeing perspectives; or year. just over of do your if own morning right try to that fleet? any one, you questions secondly, less or now rate -- a if least on any first bit to volume little you customer you you the of rates have Ed, of highlight doing environment? cargo expected from

Ed Coll

Okay, I our reality mean keep same. mean approach is the -- thank well the you. we I the

we base to of to what's try But we benefit discounted of support increased customer doing because have we on. and business -- So out an have exposure levels. environment very the our stay going do tried much at we this rates basically in to course from

we out projects evolve and but things the with that's well are general been because up -- And helpful. pent backlog is that are lot across -- and with going demand the business a of continue see to we that's related, and we pretty our come I out going that's higher, the situation we're It's this go board, across So forward. rates to that continuing everything the think on world. with what on worked is quite of

of couple muted, line window issue being it for us new least seemingly with the with So it's a buildings that probably great years. at gives for a in

the is time. and deal think is world of bit of done I some longer ships and some obviously are think that what with things so redoing coming. we're around come taken waking the But a that environment, that new to seeing to that's the those the in of going world And quite is that are So well. a all it's in to up people We've been with do new understand little But buildings this the we term -- contracts. I the and have process fortuitous they start with adjust. the we're

up So that what price That's capture a of I a people we rates the the but across and that take of have and of to XX% advantage we're number see and benefit us And, that's will lot to of what it in we've demand coming say board are commodity out increase to We downside, more if they also they of sense. the coming if done. protect the a the well always in the is. pay. for it's then weeds is which pick positioned would the realize

Poe Fratt

think maybe into quarter and the it seeing Okay, a and to have wanes seen XX, just is bit, idea currently you full year, current number that It fleet to of change the use current rate sort of the even take in adjusting on for the a for leap second do full you half, the year? you're will quarter fleet look know the of are how first total you volume. but any I where so fleet second the the good give sounds a much we the not of be, a and pretty looks haven't shippers could you're you the the an second us quarter, XX rest like environment, as little running waxes about

Ed Coll

Sure.

opportunistic answer the its think that in I it's to nature.

cargo easier to their an little we're you now dealing need it when you commodity. the in their and like them move people business, non come a get things up on environment environment and will doing So makes contract do and bit operating because with

and to So mix going our know, around best will be don't I if we'll of But market, the know. don't to fleet the XX, ships, balance XX level it the year Is chartered if I change think for accordingly know. forward. it's don't of in going XX is and be I it change I earnings the things probably get this

there business, then rates lead Is we long forward got we'll but a to we question cargo has a shipping on which build teeth. earnings a that going people some continue that our we hanging know to take that projects base So extremely for with high while around stability we've are of been seeing supercycle this we will and know, But advantage the doing work a the don't to asked in we're market the and their lot. of get enough including our long-term lot can that model, we're provide with things it business. of etc. into other the good terminals, and to

I ships, accurately opportunistic. say of number the can't So it's very

Poe Fratt

you the should just this you surprise, factors expand the we Okay, year might strengthened the was market there far great. would it sort can a are most of about another? what Maybe or and you temporary one the you was way so have that -- that surprise, surprised highlight consider any you that Ed, moved and talked can market

Ed Coll

that they of was we've And with be historic, QX terrible an for year year, grain at mean doubled “world” things. said you that, etc. And that and before, position. even think ended is you looked struggle of way big bulk is, I it always the market. mining now kept right. short keel a different Well, and that their lot there's a only in operators, what And so lot going you people, what these positions was And, shipping, I of the these, all decided big the business the dry us that -- the have people pieces but of get the same and up took for party a this but a took all of to companies, by it down not discount at third tonnage, often the it reverse also themselves lot to kept was they they last the to

money we good talked And continue make to so We and largely so making we of we business And, it make you way. our that quite to internally out didn't a bets because this and come the giant be about to bit. just our buy able on run now on we returns, market.

board basically do feel trading and of and in trade and I and huge to think to effect terrible say, and them was restricted recently. things. of that most has people our these the a the the And had can and through policies you ships to changing. things that do we bought worldwide, long people And on we starting a very how you're for work have of difficult that now it's in pandemic, the out that's replace And to go way are part because we do our see for where was guys trade that we where a do is government ships, on we about two -- the has time. we're these The go course, going biggest ships of everybody, are that, situation to crew, and there's on some people and on that can stability, be of stuck Now coming situation let's comfortable very projects one the the the how it, it, us. effect effect had able the a

this have can't the a offices, So their problem That's then people office has everybody and company, and -- same been not -- trading. just where getting in shipping working home. adjust people is from and you the in to for big get you adjustment to every and in

different is now but it to a not world environment. the I'm differently. out how exactly and come will definitely -- So be going sure

and of lot not far drive situation we especially, have to we're pretty the business. our a net years, going no projects what in next to this for And we where excited couple travel, in think situation. able think now is because have I conclusion, a come actually so I of of a big successfully we So pandemic to that been one which problem can the that's working have been on navigated

Poe Fratt

me thing was or Great. like case really seems have several an had does availability, in just to the have shipping the shippers plentiful there urgency just it's more that tonnage right seen that credibility maybe never something with lock now have And another manage people that, on one had and agree shifted the is they And or a mentioned to last that over in it the the years statement cargo, time luxury company is to basis. in that business you'd their now? move businesses,

Ed Coll

think way. goes I is end quo get you not easy. kept status if now it's people that's but because same find on mean, I with lot it and could in themselves probably a always up Look, right, environment companies short, think they the and with a get an going you And, And what have comfortable the of ship. right you they a company a commodity they of always example years one of let's an the hurt, whatever trades, commodity the their wanted. you one if and say, in on world then are managed to what you're big you have this in recent that and get trader, things give run that can I right. they freight, you're of they've old, in short is aluminum

they for freight. this them $XX to that year. or $XX million kept to ocean extra themselves what's That's going So cost going it's now And way. million happen

to you taken they and down only and terrible tonnage, are cargo in the trading can basically going then companies you of nature short who that's by go end, your and their a you you have work paper back position, rates. that to have, the again, on on their people short traders around additional so But they're then at the positions, makeup set, if you've have it. grain And and in try own is like you multiply what's not because double

was, iron people supertanker you We for position. for the So, are it's good it's allows there the wrong that if forth be we it's on -- pretty and side risen hard take really advantage nimble. But price and be things. double a the that be it's ore, when of world. to China, you're to it, that it around what all shipping a can't, so our at whole good the commodities change nimble, these to yeah, structure so on us have were of lot And of to of turning like industry, their it's the and short, look have general around

all now inflation, together. you come cheaper up also would place where that have for like going are you I good the your can are debt And have lining that's take a to You always to thing because mean, happen, in they to I that pay think things But, situation shipping. back a could dollars.

is that new shipyards For the be have It's a margin. wanted that's market for more -- they built just talk one point for lot to have more foreseeable container ordered XXXX guys an about bulk expert because And future. carrier, build to market you do in I'm and many better if done. what a final so not make the to ships ship but complicated the ships, they've a better

So before you be if one. time a want long ship, a bulk to a actually to going it's you carrier, build get

So also help and of to that balance going demand. is supply the

Poe Fratt

how is it not market couple market idea looks to or like ago tone acquisitions timing your then of that seems approach you committed about it M&A the the the you Can recent acquisitions. And give you the also the but how only us and they an builds new resale right years of also seems fortuitous came a talk about? Great. of on what maybe quickly And now? those

Ed Coll

specialty Look, think build, it fairly Sure. is when view ships are our ships right. generic or ice I towards not comes class that to

doing not etc. the contracts, expectation trading we're we of unless in have a our reasonable asset So things employing vis-à-vis

on need the have We the believe to saw we buildings, contract, old business. new our in the So, contract.

will make a bird you what survey coming against for. me current value it's them, value where We the have ships of ship higher is those currently a that's -- sold that are contracted have you're much come that a we ships, ship to a you we drives an fresh. used an colleague is what on say on can ordered, several see older that those And of partner dispose to But, the ships having get and going service. ships, than up investment other wire. like and to really start values start And the a old older into that now we've it further in or to this to and

have by time from So all the to a has years our renewal plan was years. are I around of younger. this ships gone be will eight also And are around ended, age when XX in and/or fleet getting process think where the dozen always fleet the other ships, ice delivered, and of will fleet part that the ships quite modern. And trades

generally, So, it's things, just sold, but for a not ships are combination that they're of we we're we a bought younger. but the more ships that the replacement

Poe Fratt

developed then couple of give quarter of ask great. Okay, idea that us of One from that, many possible number the of far companies questions. an is sort a idea of next And poured you that can sort quarter coming, I of how whether at us shipping rate, gives it's covered how to that if an use for is the financial has is a number certain sort Gianni so a of booked a days first perspective?

Gianni Del Signore

[indiscernible]. So we've historically never given

think over downs. various I premium market basically we point earned we've typically is ups that and our what to

of is are a XX% premium are improves, rates than we all-time for certainly no there's market highs healthy, healthier, market. make a But think a Ed's low no, on some smaller I I the some the I commentary, with stuff QX the on the these market market seeing. we're As earning premium in think, much a rather higher --

QX, supply, about the think we as and about So, two more a falling of place up or we're looking healthy the Ed we're the year I demand build have for to importantly, we're and pent sort I XXXX, excited next in even pieces new and said next ahead run. orders, excited about tonnage think have

Poe Fratt

date the the Yes, like what balloon in on plants the you Company, give Holding Nordic can and on place you're Ed, I us would the the am well falling sounds and along pretty be payments payment financing too. refinancing Gianni that? sorry, for maturity the line and balloon are it

Gianni Del Signore

Yeah.

So the facility on said existing upcoming balance ice payment four reflects my previous vessels. class the I our -- earlier on comments, those as on balloon in sheet

it as completed I We are our refinancing them. in process to be refinanced. be on of sheet the see expect that that we debt next December few weeks the of XXst current will balance so in

it's balloon So and term really but long a new obligation. six of year facility, million The in it a it's it's XX six, with plus million LIBOR incurring should loan that facility $XX year a be X.XX%.

close hopefully next So weeks. we will the few that in

Poe Fratt

to the and you sounds like do then run XX acquisition can term you and another there million Great, it details then similar same through loan, lined up you the had expect finance other with facility?

Gianni Del Signore

for X.XX%. a expect The doing on we're in vessel. lender, her. and similar it what be in Bulk a -- with of Courageous year the be LIBOR And then to Promise, for looking Courageous. I the Bulk seven planned balloon loan expect that Bulk we for solution will the X.X quite existing best I plus term line the have other on with is with we're on that the it's million year terms seven, it carries

on balance sheet, the to our efficiently as positioned capital have we're and doing can. as we it. do possibly fleet We're renewing So capital, we're the we we're it deploying

So we're vessels looking to two as forward closing those well.

Poe Fratt

And Great. on composition little change a the last one, color then Ed could you Board us met just one the give what's on just maybe there? address and if Board going

Ed Coll

I say that it's remains our part business be you pretty right they to they the quite they big add, had to and size Board Poe in those yeah, guys shareholder Cartesian to big business left. of that's away. and for anything Board, not run guys themselves replacement, involved differently. a on that lifetime but position I they're been have the do, Sure. to had going across and number years. money of us think for things shareholder. think would they've guys we'll the from they've helpful Those trust working by guys bit terms big they And the and know Well, our something of have try XX other They We and Cartesian, do. reduced will save done to of answer, Directors. a trust But Cartesian for of least us company a and much to need We've don't I they then a to it. what two at been as Board their, they've we the is in basically do. -- big the add certainly we do a if will as the And in the

Poe Fratt

to XXXX how time. forward I unfolds. Gianni. Ed the and you look Thanks Great. your thanks rest Thank seeing for of

Ed Coll

Thank you Poe.

Operator

[Operator showing this sir. further Instructions]. questions at no time, I'm

Ed Coll

much Okay, to well the very then a you for good us taking everyone morning to this and join have day. time thank

Operator

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

disconnect. now may You

Pangaea Logistics Solutions (PANL) 16 Mar 212020 Q4 Earnings call transcript