PANL - Earnings call 3 2023 | Pangaea Logistics Solutions, Ltd.

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Operator

Good morning. My name is Britney, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Third Quarter 2023 Earnings Teleconference. Today's call is being recorded and will be available for replay beginning at 11 a.m. Eastern Standard Time. accessed for (XXX) international. be and for can XXX-XXXX (XXX) recording by XXX-XXXX dialing domestic The Vallum [Operator to over with turn It the Instructions] is floor to now Noel my pleasure Advisors. Ryan

Noel Ryan

to and the you, Results Call. COO, Financial CEO, Mads the Leading Officer, and is Thank with today Filanowski; Pangaea Petersen. Conference me operator, call Mark Third Quarter Logistics Gianni XXXX welcome Chief Del Signore;

the Except in Mark. significantly in today's would no the the and contains statements the financial future expectations. line from forward-looking obligation those And the may to as results with statements. risks like reports discussion undertake call prepared At various projected over Today's we conclusion forward-looking by to required with business differ to forward-looking including of to due update open remarks, risks our statements Actual uncertainties, SEC. turn filed about and for that, law, questions. I periodic our our will we described

Mark Filanowski

welcome us our third Thank market issued detailing release Noel, today. on a closed results. yesterday, those the webcast and and quarter After you, call we the to joining

The peak represents a levels demand our trades. quarter in Arctic third across seasonal

in Our earned exceeded deep vessels ice-class fleet fully period. market index to were broader our the global utilization Fleet TCE XX%. and portfolio utilized contributed of COAs that of the an rate nearly by

are continues for by markets $XX,XXX dry release X port day market for the Volatility ongoing in TCE of absorb ended the uncertainty. September same months XXXX Our caused fluctuations per XXXX, as from day of XX, to geopolitical was the $XX,XXX the prolonged markets index average earned compared an period congestion. being bulk per capacity as the in

we directly and construction markets in for materials day. X,XXX durability side, served as in and regions the we across major testament which the to cementitious X, November over $XX,XXX value per at plus customers the booked To the cargo model. focused A end, period. rate participate, and business average including that quarter we of were the strong days of fourth aggregates our of On an

Entering volatile its continues XXXX, the bulk shipping market path.

growth as new However, remains the build fleet activity limited. bulk dry in is low global

part, our on us strategy. COAs premium position we rate For believe execute model our long-term to and our

confidence outlook for our continued the priorities capital in remain our allocation Given our performance business, unchanged.

last returning debt. the we've million been dividend. and utilized flow operating year, excess in XX% more than our our to more million fleet We've Over through of generation shareholders and approximately reinvested $XX pay cash cash in also while than $XX acquisition EBITDA, to million our conversion renewals in down quarterly this $XX of adjusted cash has business through

and We consistent return to to returns. program capital that as quarterly a part emphasizes integral one total remain cash continue shareholder of our our of dividend thesis, investment committed view an

on-demand Supramax agreement an Trident strategic on million. an into efficient supporting on entered operating vessel for the fleet, fully we requirements divestitures to XXXX refreshment. we owning October, built with while our additional XXXX, our sale $X.X This In will Bulk evaluate a unique focus of basis. sell more our regular consistent acquisitions In to newer the is and approach with and customers aligned

financial assets. while results. our I'll onshore it well, the June. With Before The the that that to that note was quarter and work is base to and expanding third on leverage offshore quarter Gianni, for hand our scale over I call continue business of business third opportunities customer seeking current ownership of acquired in first I turn we between diligently we the over our to of our full that, and want business port performing logistics to to economies of Gianni a with growing our discussion out quarter

Gianni DelSignore

Thank those joining all to Mark, and today. us welcome you,

were flexibility returns business during able the emphasize our contract were to continue through long-term utilization results specialized a season. fleet the as the financial ice which ice-class we quarter to employed of our maximize vessels, model summer third Our of of business

Third market rates quarter ice-lass rates Supramax supported were TCE a in for period, our which Panamax performance. and fleet, lock cargo forward premium over vessels is the published COAs rates average approximately which day, of future the bookings, and by XX% $XX,XXX our for long-term in per

Our adjusted $XX.X million. EBITDA declined year-over-year to

year-over-year inflationary margin our However, we flexible pressures. adjusted efforts amid cost held strategy chartered-n our EBITDA management flat approximately due active and to

day our with per our quarter per expense adjust average last this hire served market an the lower in third third our rates, the of During year-over-year, $XX,XXX to year, softer of period coupled charter market ability to XXXX. from of of rates, by chartered-in $XX,XXX day reduce in opportunistically fleet XX% quarter nearly to

of management expenses an last technical in year-over-year, decreased day $X,XXX of $X,XXX vessel operating per quarter average to fee from day third year XX% by net Furthermore, of the XXXX. per

to not by were which decrease As in operating driven the cost prior year. well I the managers, in incurred was incurred the mentioned, current related technical prudent the as as change year costs in management

per In for reported in total, million compared share GAAP third of quarter the was income million attributable year. or our $XX.X per share to Pangaea third diluted last diluted $X.XX quarter $XX.X to net the or $X.XX

attributable or share, Excluding as quarter million was $X.XX diluted of share adjustments, or per a net a versus million the instruments quarter year. of $X.XX diluted well decrease to per $X.X non-GAAP derivative Pangaea the during of last our impact reported $XX.X third other as income adjusted the

cash from to decrease on the $XX in decreased $XX.X the Total debt, $XXX the million total cash At due million, Moving the in second lease balloon finance million became million due and in cash at quarter to end, approximately had XXXX. by company Of of representing end million. the including payments TCE that May to rates. quarter, million year-over-year are current in operations flows. $XX of approximately obligations $XXX the debt, of $XX.X

May is currently a we maturity in XXXX. this This rate approach fixed X.XX% of and refinance expect facility at we of credit locked to as in

rate debt as from higher rates in interest benefits results to as of was impact and relatively our our rate the in interest-yielding nearly deposits, quarter, the million $X capital muted interest well which generated During fixed income. due

to the was vertically ice-class execution and of X.Xx. above-market to shipping of of our of continue trailing deliver strong XXXX, our specialized a chartering end capital performance, integrated our debt EBITDA model net the the disciplined ratio by continued supported expansion and conclusion, In allocation. fleet, logistics adjusted quarter third fleet XX-month strategy, At

With During market open will deliver believe flow will periods market the we consistent we now to line that, cash for returns model volatility, our continue of that above generation. business questions. and

Operator

We'll our first take Riley. Burke B. with Instructions] [Operator from question Liam

Liam Burke

quarter. one sell did vessel this You

how acquisitions? to considering for look vessel does XXXX, you'd said add possibly potential pipeline be You looking the scarce pricing, resources,

Mark Filanowski

strong try the shrink pause comes here. opportunistic upside We're to and to market to little a the S&P got hoping long we'll we're takes We've back little the Well, in be a term bit. see going a going us. fleet. it pretty adding here, fleet. We to And to for not when business the grow we're it

Liam Burke

see grow as than you're going Okay. vessel And fleet market S&P I mean, Or one next to would going mean, more do I is year? you opportunity work the consider you? -- it to comes mean, to to just -- just the you I it

Mark Filanowski

build always lower in than times a I do a to when tried purchase And we our incur is opportunistic little We've been ships, we think latter. in when is purchase market We've it to it to we cargo ships. go try higher. the base before purchases. to

Liam Burke

seems ports on operations, to And the nice contributing Great. be EBITDA. it stable

lack mentioned for in add grow existing of to from and -- But your ports your a see that any organically were to comments word, to do portfolio? You you additional new better servicing looking you customers. opportunities

Mark Filanowski

cargo. become in with at do. We We in places in our available areas and do. they that ships where actively We're go ports take our where properties looking and customers working

way. makes for services to the us, to which us at where customer port, So also. look where taking in business but transportation If we've a cargo basic a got sometimes is ocean it it yes, they ocean we our might we add sense that the in are goes transportation ask to specific service, looking expand can other

go So it and it both way. can [indiscernible] has.

Operator

our Partners. take We'll Instructions] question Alliance Global with Fratt [Operator Poe from next

Charles Fratt

what stevedoring forward business the there operation put -- rate operation, to in start-up costs that it run And use Can were line? gross of good talk the you XX%? sort any going just that at on margin about that a

Mark Filanowski

ships business going to depends might do us coming Over business, course, schedule, of time, a say, ship pretty in owner and it's timing in, cargo pick come doesn't It but steady of Lauderdale stream. engages stevedoring not, a stevedoring available a in is they steady on just the stevedore. cargo out. The or Fort schedules, whether -- another

little So over is service certain to time. in in it places, of steady We've bit steady, various got but lumpy. customers contracts a the terms it's

costs. there In any terms think start-up I of were start-up, don't significant

Gianni DelSignore

start-up some were Poe, -- hit they our were There they costs, Yes. G&A. but

closing and our have a a reason of QX acquisition lot we costs start-up the rather would capitalized were expensed that G&A legal the of So part not we through in were the higher fees G&A. bit incurred they is was and --

sheet, a acquired have including We that G&A cetera, depreciated So our -- our little goodwill a you amortized. contracts, bit right? have customer in and et that we which are now quarter. And we licenses, intangibles, then acquisition, we being spike intangibles and have saw there's hits through of balance the

ones besides some affecting have So we there is were not onetime terminal of and hitting But EBITDA. is depreciation, just through more those stevedore P&L the other expenses. obviously, the that's and terminals revenue flowing and

Charles Fratt

Okay.

the fourth stevedoring of right to through quarter relative just how looks so And sort it, third does a now? third the close to look halfway how you now terminal operation to right me on relative give quarter? color quarter, the We're can that

Mark Filanowski

specifically, you It's supposed said? to... ports that Is operations terminals of

Charles Fratt

of to out now, I'm fairly very I'm it's I to of small right but Yes. sort how trying figure model the know just and part appreciate new, to it's trying -- a it. where business

Mark Filanowski

We It month pretty two. next think only the out of But ships. upcoming month. schedule about effective a goes we'll I get or over a be

Charles Fratt

sort give the us the how your you rest of in many of or the of fourth could quarter an idea is of you'll think of you modestly and shipping rates were be the sort run-up to Why dynamic dynamics could all at forward about of quarter down your That's XX%, X,XXX that the that lot or you second cover. is we booked, but right just rate that the you think the second the your Okay. a little cover capture dynamics a you point? to how like the Mads, for you the to forward have you little Can and you move do going a days at in days -- where now this weaker right, quarter? And days able of just in bit cover -- of just the total -- are if talk October September, call, forward Relative us higher. the fourth flip give on time the Mark. do quarter don't

Gianni DelSignore

start So ballpark estimating in days. we fourth in we're far to That I'll what with day -- what X,XXX and we're quarter, it's the vessels that -- sort quarter. for was the published guided $XX,XXX which for of for similar, about XX as rate the as think the I fourth quarter, the a about

days a X,XXX obviously been November what and November X performed the just -- rather. So is through booked for snapshot X, has or

quarter XX. certainly definitely there continue there's that still about the probably around to we based on, operate -- down XX to XX So will ships from to a days XX. It's coming down high are come that into

what the like. that's will So look quarter

happy to the quarter. fourth great going had as We into rates, it. start we're a far As see

lot forward have booked a We cargo. of

give fourth for Mads quarter. So that. bit we But more a I'll color pretty think the let we're on positioned well

Mads Petersen

YYes.

have sort of the is in moment. I to are the extends third that. bit by fourth, But primarily books addition, quarter performing a that think the Poe, at that which positive non-ice active of quite our sure into business, a business the do on contributor it's for we driven from we

in We But as yes, softer market in the have is that QX will numbers. obviously well. those

potentially won't well. us impacted that So

So...

Charles Fratt

on charter run Okay. to Great. going you were can highlighted talk But day so in what have a quarter the it's going expected. Gianni, third for less maybe per charter Are Can then, And fourth XXX quarter. than the hire lot you lower less to number gross vessels, expenses? hire charter far days helpful. versus rate just you expenses a the quarter it basis? charter-hire I a days about in you you're like even looks lower about year-over-year, fourth or or That's about talk just

Gianni DelSignore

was QX, has a utilize compared markets in then lower earned. I $XX.X inverse sort markets, those of rising our positive. this us. which $XX.X sort was to certainly that effect can certainly, effect. Yes, think, we're that And to we know of at be it's million, is higher I sometimes impacts able million and total the that cost it's ships rates it charter-in, a those it Yes. and and lagging charter It was that positive in in for

we probably see hire significantly. dependent that don't expense, to in our still period quarter the as coming is. on into charter it little course, bit have some we'll the uptick fourth So where our increase of chartering had I largely an and already a But ships We're the for it's but market fixed. expense fluctuates, charter market of it's hire again, and -- but timing fluctuates, expect

Mads Petersen

And just Yes. term shorter still Poe, at challenge time add, We I moment. executions do. see space on do short value any best in if in business can we everything the is this the we

will that last several So more into not it's quarters. something

So...

Charles Fratt

has am in your the million to it about the proceeds -- that? I Okay. option, purchase -- And you you're at sort on going obligation talked Trident, of to Gianni. so have what's then $X.X on -- going financing, you be of so what's just the looking correct about net Can

Gianni DelSignore

million, $X out expecting $X you're million We're And of that about right. transaction. cash of derived

the view as it purchase a -- financing. on have but purchase the we option, it's option we called So

on the and So end we'll December it's really that November, that that's ready we'll $X within call the in the process the of million. sell closing will -- to lease should and and balloon we're her about sold, due now, of be be the generate payment early actually out it

Charles Fratt

the million you the second little then time have, due a May And frame. over Okay. and quarter what, in $XX

lease friendship in also Would is matures Or that the a that potentially third like also candidate? a the looks refinancing? have sale September-ish. that quarter, You be

Gianni DelSignore

the we prudence We have bought her we that's -- also attached. no bought -- remember, debt with

then and bulk that we debt-free heard coming that's going to have in the facility, have we due. May So be endurance

our others at the be is vessels keep and sort the and do and it'd prudence candidates the I for endurance we look be probably way it the So think X of now package some those likely would debt-free.

be Just vessels our be what with in bit position. then there, to can we opportunistic and it's that want so point if candidate and the is your earlier, want said we to we sale in a Mark a market to be

So yes.

how And right, we're as you're think that I about how Poe. So thinking thinking absolutely that you're maturity. and approaches that

Operator

does Filanowski closing and session. today's over for any will the additional or to That Mark I conclude turn question answer remarks. call back

Mark Filanowski

day -- joining Have you for a Thanksgiving. today. and at Thank us great a happy for holiday

Operator

participation. conclude today's Thank program. does for your This you

disconnect may time. at You any

Pangaea Logistics Solutions (PANL) 9 Nov 232023 Q3 Earnings call transcript