PANL - Earnings call transcript Q2 2022 | Pangaea Logistics Solutions, Ltd.

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Operator

Good morning. My name is Katie, and I will be your conference operator today. At this time I would like to welcome everyone to the Pangaea Logistics Solutions Second Quarter 2022 Earnings Teleconference.

Our hosts for today's call will be Mr. Mark Filanowski, Chief Executive Officer; Mr. Financial Mr. Chief Signore, Del Officer; and Gianni Mads Chief Operating Officer. Boye Petersen, is Today's at will be XX recorded available and Eastern. call being for AM replay beginning The domestic, dialing accessed recording international. XXX-XXX-XXXX XXX-XXX-XXXX can be or by be currently are the there session. and All a lines question-and-answer muted, live prepared after remarks, will to [Operator Instructions] over my turn the pleasure It to is floor now Ms. Emily Prosek Partners. with Blum go ahead. Please

Emily Blum

us company call Thank second quarter morning's CEO, you, for for Logistics Filanowski, Gianni us Pangaea this CFO, operator. the Boye And COO, Del joining thank today Solutions. Mark Mr. Signore, With earnings are Mr. you conference from Petersen. for Mr. XXXX Mads and

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

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

to would over turn to the Mark Filanowski. I Mark? call like Now, Mr.

Mark Filanowski

second the market Pangaea's Gianni, to who call. of results. morning, have quarter quarter call update and to to the I provide This for turning joined an you, will us more overall today and all before thanks financial second CFO, a our operations provide overview detailed XXXX Emily, our Thank over earnings our on

questions. yesterday, a open accompanying second market then quarter the we highlighting the After issued our closed presentation release line will for results. and We record

our free to growth continue a execution to increased adjusted second We shipping second revenue, income million flow dry income, $XXX record of adjusted Net to from bulk contributed higher increased million. elevated that million more profitable days result shipping quarterly Total the $XX logistics fleet and cash quarter. during An demonstrate $XX.X with niche, revenue in EBITDA markets. strong increased and growth strategy on the within our emphasizes EBITDA long-term net environment, expanded significant year-over-year and together owned to TCE XX% XX% to quarter. in XXX% margin

position balance policy. all-time continue an growth cash with high million to the to of reached $XXX us also our ongoing the sheet Our optionality of and dividend support business providing the

supply model more positions ensuring delivery macro to our unique on integrated a us volatile, with environment of and logistics While the delivery. chain a and support our time complete remains customers shipping reliability offering,

our ice higher to cargo including are on We niche customers. class specific highly markets, where focus requirements continue for margin

Given duration's DOAs. excellent the specialization with high level we longer experienced together retention of customer required,

services fleet. this completed Bulk renewal the sale deployed by four we our and enter taking shuttle comprising The our customer of and us Concord the to We're Our during QX years ten needs of In fully vessels, our Pangaea inconsistent third utilized are Bulk an where the fleet discussing after Class of been delivery long customers more the capabilities. delivery never completing they all serve term earlier under the of shuttle an the four this of and global In continuously June, quarter. Panamax year, are valuable. cargo mitigate industrial bauxite our influx, Ice built chain ships More as customer's in will important clients seek fully supply to delivered have Post XXXX. contract. to remains which serve we customer be volatility three remaining we rate planned XA vessels environment provide relationships fulfill as

arbitrage not base into visibility long they of only a Importantly, profitable term we these shipping contracts business in provide which the days cash market. provide can flows, with other future open from Pangaea

On fundamentals as capacity are favorable, shipping low is building global the supply constrained. bulk dry side, and overall new orders remain

-- further emissions into capacity IMO period from requirements in we're regulations upcoming play business. logistics ocean reducing extended will rates an structurally of over our the time. result part could and emissions in by prepared January is We shipping XXXX, expect emissions be and new harmful which further coming for Pangaea restricted our to happy global in effect transportation higher

negative CapEx expect market, Our not impact niche. significant EEXi will to logistics our is advantaged of we regulations requirements. current CII as fleet result efficient the do meet the In and to given and and large well shipping not a -- and operations Pangaea negative require maintained specialty

We commoditized models tonnage from the and of the removed cape’s providers. players far are (ph)

longer are allow are contracts premium in Our trades term for that pricing.

investment quarterly have a together dividend. balance capital of sustainable we and growth an utilized cash efficiently has return organic sheet with sustain the in fleet attractive through profile Our to

of is During review call creation. to detail. volatility, in the performance a to Gianni? over turn for more business value positioned and consistent performance, long-term like financial our now Gianni our macro to period I'd profitability

Gianni Del Signore

and Mark, you, on for all Thank joining us you thank today's call.

dry and return few quarter. year, to deploy to taken the issues steps have like our the we Before This and our on expand walking value. focus capital, bulk capitalize and for on a through transactions financials, results on to generate highlight our recent market I'd shareholder

continued owned $X.X the shuttle the generating cash fleet completed we of taking to to of what our position model Reduced And In operating profitability Mark Pangaea and paying mentioned, opportunistic balanced this term business. and which approach Pangaea. us We scheduled our renew sale high confidence through capital of $X.X investment pay earlier have lease program return long for deploy year. million a debt our Renewing bauxite We our market, outlook used manner return operations Bulk cash in the the leverage business. after outlook the Mark our cycle. is maximize appropriate, favorably believe value a in includes one dividends reduction a our continued we investments, volatile the growth fleet, integral to million capital of and our deployment delivery and a and as the as via believe our with from from prudent that in business organic debt of our consistent record the to has finance Bulk reflecting capital that been in mentioned, obligations, of in Concord consistently sale creation. our to remains of together track debt confidence reflecting as ability Bulk

to starting Turning second on our financials, now our of quarter Page X presentation.

a XX% revenues average see driven rates. increase increase to will XX% published to time a during TCE total decreased charter XX% our second approximately charters a to on in quarter to rate X% market in which compared million to achieved year-over-year Voyage and by market revenues to charter million $XX.X quarter. increased to to $XXX.X from $XX,XXX premium voyage last to year, approximately Charter the due X% as our the in the represented in day, You fleet $XX.X increases million our more rates vessels. million revenues charters of was owners paid third-party expenses a increase deployed $XX.X increased in ship per

throughout on during Further, instruments a owned to we during However, rates. day day XXXX, which of Within derivative charter $X.X excluding as day. FFAs of of $X.X increase million, million. total operating other $XX.X positions increased per result in quarter, expansion per decreased current were million rate vessels by of assets, of market reduced $X.X compared swaps value owned to $X.X Vessel which market the to the an number operating vessel at expenses, the derivative prevailing days change supplement needed owned XX of led per the in fuel the $X,XXX expansion June management representing $X.X million from interest to an to fees of March our cap XX% to XX. decreased fleet recorded fleet expenses the our open million. from a loss of fleet XXXX basis Unrealized on in $X,XXX XX% million,

forward we've cargo the market bookings. in past, freight and to and to long-term As exposure swaps bunker discussed we agreements our selectively utilized contracts cargo our on forward the hedge

flows, in reported our While on the basis. to lead in a period to or cash fluctuations period future this can mark-to-market losses gains locks results unrealized

share for income a compared for and million XXXX. While of execution settlement or period occur the date. or $X.XX net in million per of per was the share of position future income quarter same $XX $X.XX the Net $XX.X at fiscal to the will

Page quarter million position and flows Difficulty] by floating is the XX% year our an of of X.X%. Moving at on of on presentation. liabilities efficiently from X.XX% sale million cash [Technical [Technical strengthen at the and of operating XX% cash flow, fleet, and is with all-in Pangaea financial to to on and X.X%, million end, $XX acquisitions dividend. the by which and X% Concord and $XX.X in We ended driven $XXX $X.X equivalents, long-term Bulk ended and rate positive return X capped We cash fixed approximately value million in of lease of total offset Bulk $XXX cash related finance million the the rate plus quarter the of to with activities. is shareholders LIBOR increase Difficulty] an of balance sheet LIBOR and our debt financing our expand Collectively,

has to cargo [indiscernible] we never logistics that, of vessel for businesses, as debt turn over repayment complementary return to and for back get to will look to the acquisitions, platform portion to in With any Q&A opportunities consistent call. Mark? remarks continued the we expand a Mark before position liquidity shareholders. the our Our stronger and our strategies, I stevedoring been call now additional

Mark Filanowski

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

Operator

Instructions] with you. question come first Burke will Our Thank [Operator from Riley. B. Liam

Your line is now open.

Liam Burke

Gianni. morning, Mark. Good Good you. morning, Thank

Mark Filanowski

you Nice morning. to hear Liam. from this Hi,

Liam Burke

the nice It's hearing you. Thank results.

You four vessels the opportunistically class added last ice year.

an vessel. acquisition with essentially You out the swapped of sale the older new

you chartered fleet adding are how attractive remain balancing rates forward, in look assets? possibly versus we As

Mark Filanowski

assets little us, them, Fleet bit little a when bit they're a opportunistic, for we planned. add

And basis. acquire now, of negotiations we're been average in is on sell our while. its advantage come it's with who little current year in vessel about this probable the involved be vessel about with a and opportunistic for -- guess, for we've to us an of deal to it's a right I a for would They've -- ship from fact, that that's what taking age owners to bit ship due it. but that about We've to again plan got In we're months. fleet, it's a plan private six final to purchasing the sell older the of on docking want an charter

net constantly cargo a renewal, Pretty our like the ongoing, fleet that now new I we of So with in be owned addition when along. wouldn't right and with to but fleet size needs the opportunities said, come is happy charter existing for fleet.

stay we're of where (ph). look chartered the now in the remainder past of have profitably So and year the been about owned there fleet fleet to in we over right terms year and for

Liam Burke

then a Fair little we're looking going see of partials very they're the are balance very, said high. how when even rates off right. having you rates enough. Directionally, They're do through the but third really for The at sequentially, year? attractive quarter. All the that,

Mark Filanowski

been if any horizon. think do, they a the mostly on see any they will thunderstorms us blue pressure skies decrease demand we temporary But pass good. by. in market think segments. hopefully has Spot in it be or only demand we our Yes, with few on pretty

are rates ago, where think little as maybe see as historical high were and more in comfortable than not rates are upside a a numbers, the to they everybody they said, but months our few compared you is bit downside. we today I with As high business

Liam Burke

Mark. you, Thank Great.

Operator

you. Thank

Noble come will Capital Heim question from next Mike Our Markets. with

Your line open. is now

Michael Heim

question. Good you my taking morning. for Thank

other about growth organic Let of the side to me stakeholders. that's talk and returning the proceeds

XXXX. Can You have in a talk or refinancing due just that? lot debt do that about about your or like restructuring thoughts of looks that you down paying it’s come

Mark Filanowski

return always renew capital have we think significant couple do for to coming are when that don't to time up ways We with get and lenders packages those have a that it's whether I really renewals ships Companies Mike. at same coming probably of we'll financings shareholders. any forward. some Hey, or looking different opportunity in roll up. to balloons and comes,

that sale low can As prices Working We're financeable of our another and it's bit we can I sale organic at purchase a and would logistics little looking generate financial and looking mentioned, from bunker even we this but double-digits concern today that be some hard. of because always other is us ship, cash its maybe were business investments ship, and for at move move with very in operations. had a fast very profitable rates capital can opportunity.

alternatives like dividends, bit we're cushion always a always We've twice little year On to have we consistent increased too. looking So paying of a already. it there. at other dividend. this We're

Michael Heim

seems ever some something think of about? dividend your to policy, have counterparts that you'd fixed gone It a like is

Mark Filanowski

a our look our model consistency little model and and business look performance, has dividend for doesn't decided. Their shareholders, fit that really ours to than consistency is right a we we now business for Board bit distributions formula and different

Michael Heim

Okay. you. All Thank right.

Operator

Thank you.

Poe Our Global Alliance come Partners. with next question from Fratt will

now line is open. Your

Poe Fratt

Good morning, of morning, I Mark. Good couple Mads. Good Gianni. a morning, had questions.

just all, the of on dividend. follow-up First to

You previous two it in had this dividend change increased quarters the you the and quarter. didn't

low what you about outlook the Your for earnings. dividend the this the quarter? record still of relative is your more quarter. and did just to in you context Can talk dividend fairly

Mark Filanowski

have Pro, it and long can approach mean it's I to the keep And time. going a think increase quarter for our dividend we one dividend. Board's consistent, a sustainable doesn't

come a quarter everyone's to we've wants any approach that this decreased may way try I the quarter dividend little decrease at afraid to of to it where increase longer So think on every look it. of a Board there got might not that And term have dividends because shock has and perception.

Poe Fratt

little have and more a sort tends a into I policy? at you'd just that you that credit get review who be dividend but little -- if bring will sporadic, a sort an looking annual of quarter-to-quarter unlikely, more is a Seems a can knows. don't so dividend Mark, it of or for we to mean less just you consistent

Mark Filanowski

we discusses Board Especially back capital ways meeting. dividends every get results this. and like have The when shareholders discussions to other at to active

So every meeting. annual it at have I an we can't, say have Board but plan, discussed we

Poe Fratt

fleet potential talked in of the And renewal Great. you about context opportunity. this the

that, for bit? said, situation said you just were you something the potentially clarify Is a little Before year. you same statement in a can or you this talk, chartering that

Mark Filanowski

had Yes, for It a a on is we've sorry. I'm charter shift year.

the what the ship we know the with the know to opportunistically we wants We So pretty owner well. the can do performance. now. We sell And ship. know ship

And be and terms the sign so in arranged few We're the the to days. hope we negotiations said for under in final we'd the ship and interested we've that next -- the in something purchase buying the owner. with of

Poe Fratt

that matching longer period assets? you've the (ph) my Is for owned in with one assumption chartered where is COAs. term that because part it's COA than book And average of your longer sort of you're of case your

Mark Filanowski

and those the was an we fleet This properly efficiently. Well, the book. order of puzzle, serve amount on always contracts to got that's basis. ship particular need most to on fixed of in part chartered in a right? the cargo index We've manage

COA as and saw been we've and able -- put it So any out our to we active do spot additionally in fit business business see we with as ship. that of

that's and under most the any the ships ice try result. doesn't gives not better to use market, specifically that us ours contract. And in ship that's the class business of that we We suited available except the to one So contracts. a if win if for identified from they're fit, COAs for

Poe Fratt

to the take, the those make fleet, in then efficient entail highlight fleet you much studying the your renewed also press Can have Mark, you would boost efficiency talking that you But you about more Okay, release that that emphasized you've great. ways were some efficient. measures it even and in of of timing context, you've And it. capital pretty how energy then

Mark Filanowski

Sure.

we into our take, interaction who – maybe we people be the there's cargo of which weather And business, Some of out the things versus the movement. optimized the a more of at a operate cargo movement another on voyage way and performed better And between operations speed those we are one tracks able job efficiencies we is be the and cargo efficient. ships, the shift and the consider when therefore software come study might with do more assigning a particular and of the to department for the even ship. to shift, we performing, whole make the can take speed the more

a of ways use done are of measures. there So lot to small performance that's with your data. different improve mostly and in

you the get voyages access little you to that from make ships more ship, then make data a your You back and data, weather get efficient. data your

So expensive. investment some planning. a dock. in do that paints propeller house. not a lot a a from -- and millions. There maybe capital of that's reduce little of and increase, try that Those is propulsion of that efficient more not It's other software in are more ways little systems that friction those opportunities take when one paint add to more you hundreds thousands, can maybe takes a area. usually the dry talking are we make better But of that do are capital, to a some bit ships, the not we on some investment by those take might more done the There significant ship in ship and efficiently dry way to channeling of bit ways that's dock business a maybe the in advantage but ship

of take So out service lot time. don't a you

ships small but improvements So that of done in make things the the with can some the be that those the way measurable perform. can are fleet existing

Poe Fratt

off quarter. in where right highlight Nordic cash Can $X was carrying $XX additional and you just years. you're and cost in ones. do rid like there looks million pay over pretty to two the enough that that have the One acquisition going Bulk three third you're years to third you And then is now? structured of decision comfortable Okay, you've great. million two cash million that avoiding just or much the $X.X remaining of that is said the obligation you're last there the quick just the any getting It interest

Gianni Del Signore

where Yes, it's the is, aspects think of one Poe, to floating our rate one, I facilities. that two

it gets but rate is that locked after the So through reset. September,

to pay rate, So some opportunity that year our Nordic it legacy letting the decided facilities. for we pay an reset, one loan also up another we Bulk instead cleans and have cash And we Holdings. call we'll see it, the down we floating rate of the around to off. just entire agreements And amount interest waiting

put it'll bet. So that basically to

Poe Fratt

is reason you related or… you. that of party to Got XXX,XXX of part the the down And paid

Gianni Del Signore

money, balance is It's away. one just party sheet That Yes. $XXX,XXX -- of that about amount related was on noise went payable somewhat that was time sheet balance having cleanup. for our it

Poe Fratt

then added brand assets. And your how Any that, the Any impacted that a brand impact in driver fleet? the assets assets Great. the second than you your Okay. major new give that quarter way JV new way us Was results? operating quantify on color Gianni the for in quarter? more of potentially the to to efficient before rest or

Gianni Del Signore

fully performance the think entities. the vessels the I Well, consolidate of we

So you'll EBITDA generated our quarterly in those see the results. vessels by

all that You'll our of the the implications debt, results. into of interest, XXX% see flows that the

now more we'll [indiscernible] as the vessels think and trade third the in impactful starting are I in they summer actually the season. those see also quarter

the quantify of it, we performance. to benefit think get their So I full

we fleet the of to of they're on the trading. even harder owned increases specific out separate out It's EBITDA or provide believe the and they based vessels. the XX vessels have -- they're And We that is out But XX earning we're we benefit say what to vessels. within are getting four that can their of four is more those to color they're what you. performing, of

Poe Fratt

Okay.

quick Sorry, one one. just

you in quarter, days that I that potentially little quarter I -- Is ballpark? the Can XXX booking as calculated XX% cover, that you of the As are where than lower already and booked I far days. (ph) days then your right And is in assume now? forward roughly. your took stab a X,XXX a about it's bit in third XXX?

Mads Boye Petersen

So generate line voyages at [indiscernible] return on average higher that. we're a still on that better looking

last the quarter. the certain So our yes, cargo lower a the have And market. number than cushion didn't all numbers probably six that for of saw but churn is out obviously us in when which line spot activity with the than better that, higher the parts good we are also booked we then include of we market, up a and gives set the book cargo also balances has months, in

the and So cargo in fleet that right? unwind part cargo And we customers. are consistent We course, sort months ago, of three, the booking the model, of our in with of is as booked their chartered money four now. the

foresee don't different It's the I for reported quarter a rest that a the of honest. wild for So to number change. be

Poe Fratt

for Thanks time. Great. your Okay.

Gianni Del Signore

Paul. Thank you,

Operator

Thank you.

question next come Investors will Our from with Climent Edge. Value Molins

Your line is now open.

Climent Molins

taking the sector. capital pricing pursue Good biggest questions. trading offer something wondering, to allocation there liquidity Despite on prevailing is the thank up considering could appetite at and in for become it an operational trading is following discounts that strong under potentially and repurchase your considered? elimination, any could share performance, was my of at I one morning And you you're the questions,

Mark Filanowski

reinvestment best said, the about people mention about we cash the buybacks. all I the of do of talk talking like Board excess fleet. time. We as constantly ongoing is for And use stock operation the have about Climent, and we're dividends any and concerned capital management,

active but on an no active discussion. Board all said, like all decision has it's So I is buybacks, time. this the at discussion made share an

Climent Molins

shipping some the on more off one the for off expect the we margin color. environment? you was should operating business forward going and or on expanded insight from Thank trading contribution similar to whether Could seems you The quarter-over-quarter right. be a given basis. an these All provide this

Mark Filanowski

in those had quarter. got second the the basis. this a year. talked four one, I of part operation new for buildings ships the think about Last bit in a impact all We've quarter-to-quarter this two year, I ships second quarter, four active quarter, on the we on of time, only little maybe new at the

So performance, days adding are to ship those owned additional our EBITDA

Gianni Del Signore

showing I add part in seeing think also margin really of is QX, the declined the results, type our of our -- I versus environment. market ‘XX think your We cost our QX. strategy in little in excuse you're fleet. versus color, But was reset of the just -- opportunity question have that expansion the And and me, reset to what in quarter practice own to we chartered chartering the a the

So we delivered vessels and we'll charter in new ones.

So to decline, day declines presents a may it if margin our also and some TCE that type environment. but is of in there charter also slightly, book expansion fixed opportunities decline and us. a bookings earned forward cost does with Yes, provide in our of per cargo that

Climent Molins

helpful. my for you for questions very Thank quarter. taking Thank for congratulations you. me. That's That's and this all

Mark Filanowski

Thank you.

Gianni Del Signore

you. Thank

Operator

you. Thank

follow-up is Poe Global Fratt Partners. with next Our from Alliance

is line now Your open.

Poe Fratt

Sorry, maybe us two the And XXXX? just for XXXX more next questions. One for then preview quarters drydocking is, highlight give two can a drydocking you in scheduled activity? the

Mark Filanowski

this activity drydocking we further So have no schedule year.

one ship next up coming have We first of year. part in the

Poe Fratt

Okay. is Matt? that Which one

Mark Filanowski

It's about Poe. new,

Poe Fratt

the you you've about coming as where Can something you Okay, great. long just could on that potentially some highlight have comment take how agreements where of? in the term longer -- Mark, more the expand risk just desire Is mitigation measures? in don't structure your you you you this margin that customers seeing And term lock comments then to you're agreements. talked to with on and

Mark Filanowski

to mainly when part or bunder essentially to in think sort main this customer that bit is according is we versus this as very so. fuel that So, right? the we continuously sort a rising way environment The sort of our months -- also the peak a to little out Poe, is we're from I in that's XXs to So We're have into pricing, contracts that not reform, a at of spot And think of not the of higher saw bit. those and last is bigger year big at at we was right? use we on exceptions plus in type tend because a in today, levels a on it likely minus playing this makes right? going typically, contracts. presented and seen look is view, than long freight So risk, reset inclined I that those side or than historical maybe pool little into term -- to terms customers owned the the of the it we well. risk at pretty levels make of value bunker maybe year the this the alternatively market us, the we the last for way mental during are happened past more the we've do take of of at historically rate service And see still XX pretty levels, adjustment as sort go The ones. interest in rates hedge and either have on cost we time pretty generally right, look see doing especially the whatever out more we buying swaps that where We using we good fuel towards at that. aspect good, the those fleet in

Poe Fratt

Thanks, That's Great. helpful. Mark.

Operator

would there no It for additional are our appears closing time. further turn remarks. to presenters Thank at questions you. now back program this any I the or over like

Mark Filanowski

and have next news active -- we discussion attending hope better Thanks again. better to we Thanks this everybody quarter. for like even news today,

Operator

and Ladies you. event. gentlemen, concludes this today's Thank

now may disconnect. You

Pangaea Logistics Solutions (PANL) 10 Aug 222022 Q2 Earnings call transcript