PANL - Earnings call transcript Q4 2023 | Pangaea Logistics Solutions, Ltd.

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Operator

Good morning. My name is Todd, 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 2023 Earnings Teleconference. Today's call is being recorded and will be available for replay beginning at 11 a.m. Eastern Time. accessed XXX-XXXX (XXX) for be users for can (XXX) or International. recording by XXX-XXXX dialing domestic The [Operator Instructions] Advisors. It the floor is now my to Neely pleasure Stefan with Vallum over to turn

Stefan Neely

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

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

to With the call that, over like turn I to Mark. would

Mark Filanowski

welcome After quarter on year and our us fourth results. to and joining closed Stefan, a detailing issued market you, we XXXX the Thank release those today. full call the yesterday,

good to Our indices. a above benchmark continue TCE rate finish a were the premium our we year to results achieve as consistent

quarter corresponding we with trade our is to together shipping slower While freight the traditional routes to our peak trade period, have Pangaea Arctic days in the a as contributing increased increased a fourth led rates. for exit trade period disruptions season generally in geopolitical of the increase ongoing demand within

million $XX.X for million of We reported and adjusted the net for the quarter $X.X fourth income year.

effects TCE impactful periods, year-to-year rate longer by though periods. of basis, adjusted volatility benchmark BSI Market the strong a Index over on model but $XX.X rate can quarter of our our million, fourth the be smooths business quarterly XXXX exceeded For even our over as our XX%. declined EBITDA

produce structurally as higher think dynamic long seasonal markets disruptions on a current environment. With supply segments, inefficiencies, support global freight persistent runway by market a showing worldwide ships the basis there quarter surprising performance. continued to Our a capacity in of growth in a for limited new led strong our to trade is are strength rate have shipbuilding we

products. Beyond favorable Through today, in trades serve, per X,XXX that ore cement, strong and core $XX,XXX to days market by TCE see day rate quarter specifically of shipping we of first versus dynamics geopolitical the a booked per being and $XX,XXX growth an at iron disruption, the construction over approximately continue in rate we demand we aggregates, the XXXX. created iron day average

and logistics capital while we favorable scale expanding these fleet underlying to our expansion to book, capabilities. conditions our intend cargo prioritize renewal demand Given investment onshore in continuing and

program our to addition to investments, In cash demonstrated consistent capital sheet, organic all quarterly further consistent continuing as to return balance a of inorganic we'll our seek by dividend. these and fortify support while

we've with At base integrated been mid-XXXX, level, and acquisition on address in to onshore To operations actively port remain shipping Maryland that customers. a of X existing new demands in marine Florida strategic of we logistics following terminal our the of focused customers. end, providing and expand our and the a working that relationships growing unique solutions

our transport market, leases. we capital-intensive method Gulf relationships Florida to allows a less operations, entering us cost, U.S. albeit with this center the around build in through XXXX, lower that our potential We During and a ocean building strategic and and footprint stronger X offerings. is expand on Coast and partnerships will joint approach current site of customers across a believe

and our port focus for beyond. coming expansion sets success years, in favorable and growth, on a to dry volume over terminal of bulk and fleet strategic accelerating up This bulk demand of new enter service build XXXX scheduled limited dry vessels a the operations

deeper fourth discussion a With quarter Gianni results. that, financial I'll turn of it our for to over

Gianni DelSignore

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

we able premium continue as while financial business our fourth strong reducing per model flexibility results operating to deliver Our days in expenses day. the our returns to emphasize vessel year-over-year to all growth of were shipping quarter mid-market volatility,

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

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

margin year-over-year Our to which XX.X%, EBITDA negatively volatility also impacted rates, declined in expenses. given adjusted charter-in our

from $X canal million resulting EBITDA environmental transit TCE the disruptions overall to negative fee also our in fee during Panama an resulted quarter high and during the earned. This fourth our a impact the We at quarter, Canal. reduction unusually recognized a in adjusted

the to year-over-year ability our During due increase in days, XX%, with increased from our saw charter-in supplement our we which fourth demand increased chartered in to vessels. customers and quarter, fleet

recognized TCE, which comparison spot overall rates rising higher our However, of in in environment. happen short-term times in we strategy, margin resulting our charter-in to during to rate accordance compression, may charter-in

decreased day average last days dynamic of per booked by fourth lower an of X% offset net today, Furthermore, vessel at X,XXX per XXXX. was technical Through approximately year-over-year in day of cost of in from operating quarter per year, this $XX,XXX $X,XXX we've expenses XXXX. day the the of average management $X,XXX fee, an by charter-in first to vessels, quarter which lower

decrease our to The highlight efforts vessel continues the operating to of expenses. manage success

us past, approach our future and in hedge freight bunker and mentioned but volatility, bookings. in our to of a the market As lead and lock basis. long-term cash swaps period-to-period we on minimize impact utilized market results reported on have selectively forward can in contracts to fluctuations agreements the to our cargo flows exposure This we helps the forward

fourth million $X.XX to fourth net diluted per of the Pangaea [indiscernible] quarter freight Given the the and attributable cap. mark-to-market quarter, agreements in total, rate our bunker of during relating of for reflects share swaps, to year. adjustments market the volatility last was million fourth diluted unrealized an compared per reported loss to $X.XX income reported GAAP $X.X or In our $XX.X quarter or interest net the our share forward income

impact the of million losses non-GAAP year. $X.XX income per $X.XX $X.X net share the well from adjusted that as decrease I derivative of versus excluding attributable reported quarter the mentioned instruments million Pangaea adjustments, to as diluted quarter last share, When or was our per other or $X.X unrealized during the of a diluted fourth

year-over-year $XXX rate of Of the debt, cash million. represents cash million million debt and of finance including in to quarter total flows. operations $X end, X.XX%, locked Moving numerous cash decrease Total million This approximately of credit is paying $XX this that the on facility $XXX TCE balloon a $XX $XX.X decreased rates. the million payment due in to are in had currently a May fixed debt, owning the is by at off to currently due evaluating company million outright. from approximately the refinancing lease we obligations and as and underlying of potential partners well in vessels year. as At

EBITDA At interest-yielding nearly net we of fourth the quarter as cap $X to higher During rate million to interest relatively of our income. which interest generated adjusted rate the the was X.Xx. XXXX, benefits continued as to quarter, see debt the debt rates trailing from deposits, fixed ratio muted well from due in and of XX-month end impact

is owned onshore allocation As investing in capital Mark focus in footprint expanding capacity. XXXX growth in mentioned, by our vessel our

Our growth balance profile strong current our us plans. finance the advantageous the about to sheet gives flexibility most flow cash the our business of thoughtful and to be ways

that a to consistent continue Importantly, the prioritize reiterate our can that we We believe cycle. return is that I X we dividend would through capital strategy. market sustain of current

will we open now line that, for questions. With the

Operator

[Operator comes Instructions] Our Liam Burke from first B. Riley. question with

Liam Burke

short-term squeezed margin fleet the that using vessels during this the sort think margin chartering squeeze? Mark, your charter-in in about anomaly of And overall that terms vessel as of strategy. charter part can longer-term leased your make your strategy vessels? your quarter. -- we this does discuss Was you of chartered-in about expenses hire Flexing a

Mark Filanowski

Liam. perform isn't month cargo market becomes other Things rates go until as ships. strategy fleet the of to in and us bring unusual in happen costly now. The bit X they book market more it us today, in When the from a This caused solid, for chartered-in we to is No. forward don't that where times we still can cheaper way, be for rise.

take So ships. we're we careful timing we to on and book charter-in the the cargo

the if But when a did cause rest on North spike we North market increase a the spike that have the you're occurred we Atlantic like did disruption. market, world. little depends are it it where -- the in -- depends where we big -- can it bit bit a it more in If a bit to charter-in to the comparing than occurred. rates where December, Atlantic on little temporarily active, also a little the We're say, places that of cost unexpected, in

cost our Atlantic the to worldwide the comparing a then compare if So North you're rates, if bit than just little higher market. to you charter-in we're

Gianni DelSignore

if Liam, And add, just I Gianni. Great. it's could

these in Just expansion when on quarter we we margin. 'XX, margin quarter-by-quarter situation, margin it first chartered-in for look a a in basis, a necessarily to the at QX these similar in see negative example, did add, not of reductions it's 'XX. of -- And we'll were potentially or fleet have for the

year year, day. margin So rates and in spikes that in a $X,XXX then we the these for for full margin around at just market chartered-in of our XXXX, say on the fleet full quarter-by-quarter, it it to result look can But squeeze. was

it a it to continues and positive So be. was

it think with there's quarter. consistent But at look is basis, don't on I we when want the for we a long-term to it So accomplish. it's unfortunate what any --

Mark Filanowski

or versus those a produce tonnage participate pieces look do free spot our own -- book costs charter-in that what cargo charter-in us we to our Liam, ships cargoes. here then chartered that our can in is ships we up what But against ships and on at market. higher the concept it the and

we So whole look at trying the do we to but the really work we're -- pieces have make better. to --

Liam Burke

Great.

On quarter there expect a the being there a that's are seasonally a Panama slow be first seasonally or first strong partial seasonally it's like primarily looks giving you sequentially, really quarter. strong I quarter first quarter. to flat, with almost things typically, you'd mean, that Canal the where down Is in other slow it -- fixtures,

Mads Petersen

we in Panama the Mads what Yes. has now executing The that of were QX our are is on now, think driver we able main book I pretty also historical in fact QX to effect. are Liam, levels. cargo attractive course, that But here. it's at an

sort course, of the of cover. general we some [indiscernible] were decent able secure a pretty it's the strengthening, So but also result of that to fact

Operator

next Our with Partners. from Global Alliance question Fratt comes Poe

Charles Fratt

I'm you $XX million roughly -- on deeper so and a quarter. dig chartered-in those expense just I'm over $XX,XXX. idea we $X,XXX, Monday. Good the give you that to just expense. you about were the in that was calculating for -- are see can a It numbers Is have hire days of little your on the us Can of... calculating quarter fourth Or closed? charter an charter-in Do

Gianni DelSignore

can the also mention incurred so our did numbers, in far. for in I actually, my first and of the give Yes. Poe. And cost what the remarks we've prepared earlier quarter, booked -- I in call, the you what chartering is sort

quarter, you fourth chartering chartering chartering have the So X,XXX day. that days. The per was were for cost days $XX,XXX as But approximately well. the

Charles Fratt

$XX,XXX then you And at whole were they just of the looking look in the sort me that bit chartered-in quarter -- give what costs you days that might to in cost chartered-in can spike quarter? avoid like? should at for maybe little the of days lower the Great. December? And can appreciation how be -- that many saw you an be because fourth a how Will X,XXX Okay. forward close

Gianni DelSignore

to quarter pretty close the we're of here. end Well, the

XX So you're vessels. I to still had we significant -- don't we expect said. total around XX what around QX, to about fleet fleet. But the remains changes we're right, XX

I of are think I since it relatively we good what as be of the a will quarter. it's similar. full very So And the gave as close far indication we to activity, volume the there are pretty think then yes, for end, that numbers

Charles Fratt

I -- of for year, support Mads for another the chartered-in the sort year you of Okay. this sort me cover, look Gianni, I and do idea then of beyond or rest just Great. and then, to are of an give -- you -- just you time? have thing willing you your quarter this forward covered looks the guess And can are exact date how of rest costs the your

Gianni DelSignore

fleet So remains long-term core discussed the our But out the own Poe, our our far we're our core business, beyond We cover. as the give we on cover as contract sort typical don't long-term quarter. first operating that same. of in

But in we longer the numbers long-term long-term given But out forward always our and term other on -- near our is the term, haven't we're into subsequent than those quarters always changing. looking contracts. market

Mads Petersen

chartered-in changed. instance. And the a to a strategy relatively for term strategy, is quickly. in that part that terms The in [indiscernible] not reprice of that period, That's really. approach short Poe, of We're add that majority of so vast -- nature around our not longer the fleet, amount of will charter-in significant hasn't really over looking to always

Charles Fratt

avoid sort you Yes, than in taking to charter-in right, market. moves exposed owned Mads, with want the of don't get long want at fleet, negative to market you your other term and to

Mads Petersen

than a to an rather sort because us fix up way correct, far fleet and you to want in ship. up chartered-in XXX% right? ending cargo arbitrage of the company more the fleet in Yes, don't a a is employ pick the for sensible entire too essentially of around fleet I to way own mean ballasting the the just

a were where little what said because can look the greater a said. it like you goes have part particular of just earlier serves have whole the the the that in you at the in it sort business [indiscernible] So that quarter purpose that's back in a Mark out quarter to Mark the picture chartered-in of just of you looks pick to things as disrupted this, not

Charles Fratt

vessels the to about sort anything during Yes. ice But the to early And have XX it that I book. call -- know forward season and XX of fall. of has working XX where the hasn't summer course ice-class cover working you your typically been -- over talking XX changed -- your

Mads Petersen

of the that part primarily. Yes, fleet owned is

changes don't note. that expect we So any in huge of part fleet the

Mark Filanowski

participate quarter, part other made that leave Arctic, us, booked north now active it have season for but have ships that we that of chartered-in probably a we ships ships more is higher -- from the the because the we just to little business cargoes not north, to go go third into take if that those we period. some But We have during to booked. market to the a then because replace -- moving in fleet have

Charles Fratt

that rest then, negative you on year? changes either Okay. demand positive, Mads, you anything side the highlight the the And are of can seeing for

Mads Petersen

I want own construction the not material. where or think also I comments such increased businesses the in to that the Mark's trades demands in across what terminals pretty was we written operate, in we're point is in just to we busy but as business. are seeing ships That our

not mean So we feel pretty know probably confident about the demand going forward of in owner-operator. sort those you we're commodities. ore long-haul big sort I a iron of

And So there, combined side supply not think confident and and you same but things demand-wise, okay. about the I where as where think pretty it's I I is good, feel do, read data that, attractive we fantastic, look market pretty with heading. the

Charles Fratt

in revenues the sequential terminaling. is drop in drop revenue terminaling the Margins was how of quarter in or of there's the Okay. idea a And there. stevedoring in sequential the me seasonal into about we still that then you you expect talked and business. that were healthy, but a this an drop There cadence pickup seasonal give rest can the Or and fourth a year quarter? business? sort of just of should the

Mark Filanowski

It depends our on terminals. ships -- coming demand into

into think could the port -- of don't come ships quarter. by It that high affected the that I much. decrease number be that So that was during

port ships have active do -- -- And in. goods, most we load we ferries. that is we come discharge -- Our we commodities bulk Everglades. dry container Port We there do

visiting of depends those some really on things that happening We some ports. it in the active have are the more other ports. schedule of do ships So the

business The us Port to June. Everglades last should So new is this up move from year, Poe. things

think And so downs, not you'll in little a fairly bit of beginning, been steady. They've ups see and I the but significant.

Charles Fratt

-- where And nitpicky, charter understand sort expense wanted fees, that of then, I it's I come hire just did if of what expense million in Gianni, Okay. that or you where Was highlight line to the know recognized. voyage just could transit it in? was $X part but it

Gianni DelSignore

a I Yes. spoke overall unfortunately, this Canal. last expenses, voyage we the obviously call Panama situation It regarding of and which And through. on and And reduction to get was reduction we EBITDA. expenses had we to equivalent about recognized voyage TCE. $X on And the there, in slot adjusted think million it were impact and to our impacted -- was through our bid TCE

yes, So it's that's where recognized.

Operator

and for to [Operator additional this turn the Mark time, Instructions] questions At further I back go I'll no ahead Filanowski in closing any or remarks. queue. call show

Mark Filanowski

Thank our you you quarter. see call, and us for joining next we'll today for

Operator

today's call. for conclude does We thank you participation. your This

time. any at disconnect may You

Pangaea Logistics Solutions (PANL) 14 Mar 242023 Q4 Earnings call transcript