PANL - Earnings call transcript Q3 2024 | Pangaea Logistics Solutions, Ltd.

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Operator

Good morning. My name is Shelby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Third Quarter 2024 Earnings Teleconference. Today's call is being recorded and will be available for replay beginning at 11:00 a.m. Eastern Standard Time. accessed (XXX) be XXX-XXXX. or can recording by XXX-XXXX dialing (XXX) The Instructions] It to with Stefan pleasure now Vallum the [Operator my to turn is floor over Advisors. Neely

Stefan Neely

risks differ Quarter the you, contains our turn with described update call law, forward-looking to from Petersen. Today's various in business Del the remarks, is significantly the Chief the future Logistics open Thank prepared to Signore; we reports welcome questions. With Filanowski; to SEC. today and our with Conference Mark. and to statements of obligation no our due today's we I Mark Actual Officer, and call uncertainties, Solutions Leading will forward-looking about operator, me results Third including risks filed projected would for by to like undertake financial discussion Financial line statements XXXX in statements. CEO, the Except At the over and Results Call. Mads that, may required as Pangaea those expectations. forward-looking conclusion periodic Gianni the COO,

Mark Filanowski

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

continued a a seasonal we inorganic peak in expansion, amid quarter, our third dry strategy while advance continuing demand. through all growth, the During operational execution creation strong consistently combination results financial value fleet targeted accretive of to strong and to bulk deliver Arctic

in our the to annualized transaction asset we agreement our owned number that will into growing approval entered XX% will customer of from ago, add to dry to EBITDA. post-panamax we definitive value is acquired ice We by after our the a remaining year-end, closed fleet, services our XA weeks expanded we've to deliver into base vessels acquisition bulk joint an niche. year portfolio ships strategic a XX partner, having adjusted Maritime shareholders, the our the forward bulk MTM transaction. the to the Pangaea our September, transaction in solidifying This both in XX to our across class a of adjusted announced expect subject we net class MTM M.T. and in by complete, interest venture to handysize EBITDA. Once materially look merge ahead. And our As X ice dry position vessels which also accretive positioning

during In in the to built X own vessels XX, these quarter took September our of expanded transactions, XXXX, we addition X delivery deadweight ended to fleet ton sister which XX,XXX of ships. XX ships

terminal the progress stevedore make operations also and Port Tampa. in of our of to We continued the expansion on

With the existing added both scale shipping transactions, logistics provided the days coming and of logistics at operation and we increase model. expect with materially shipping our ports and over operations by year, consistent these to integrated both new

vessels, to leverage model chartered-in and cargo-centric Our combination continues with asset-light of our a consistent long-term strategy. owned

and Given fluctuations profitable believe and we cost an provides emphasis with free and in global dry model scalability bulk growth. throughout our demand, cycle durability, capacity generation on the cash efficiency superior

$XX.X and we of EBITDA million For reported the and adjusted income of respectively. million, quarter adjusted XXXX, net $XX.X third

year, -- activity day Our more approximately to adjusted Higher market market to the as helped by compared EBITDA offset declined and shipping TCE realized last million decline. $X rates lower flattened margins. volatility as

for the peak dry deliver rates class fleet seasonal Our third exceeded constrained, intermediate of Nonetheless, bulk on to vessels the over dry as has to Arctic global to fully newbuild TCE global the and bulk us pressure which resilient demand some ice quarter trade remains was niche to we by market a geopolitical represents ongoing of macro across be quarter, routes remains our economic level, the the that face prevailing activity during and in near in strong activity the proven disruption see helped softening rates supply XX%. At expect in our and utilized upward term. regions.

Looking the the expect bulk Arctic demand. which than in see we operate, regions to and the expect we in days that year. Through in quarter, fourth shipping do Notably, quarter and a dry in seasonal demand due we the normal will slowing Arctic typical the experienced warmer be for fourth fourth we we what conditions per than $XX,XXX of generated quarter. ahead TCE weather less X,XXX to booked to last today, day wetter

return-focused allocation. balanced As we continue we exercise move XXXX, capital to into will approach a to

the program. remain creates recurring vessel capital. At testament our return quarterly recent JV and maintaining capital deploying long-standing dividend, combination with a of time, returns fleet philosophy acquisitions, to sustainable that to consistent buyout we cash committed a Our are in manner stable same on of cash our a

our believe we a proven economic it through results. third cycle, consistency over I'll business. With the for sustainable quarter dividend our of given the Gianni policy discussion our financial Importantly, that, hand is of to

Gianni DelSignore

Thank you, on Mark, and joining today. to welcome those the us call

sustained free prevailing by strong to premiums and trade financial within the flow TCE demand quarter peak niche third generation cash Our our relative market are highlighted amid Arctic results routes.

approximately and Third premium the average per vessels day, XX% panamax quarter of approximately $XX,XXX published in the routes. period, was within which market trade fleet rates by TCE rates over strong Arctic a driven were utilization for supramax

$XX.X prior was adjusted the Our the relative period. for a EBITDA million year third decline million, to $X quarter of

rates XX.X% year-over-year. higher days decreased shipping offset higher Our in charter market expenses growth total adjusted and EBITDA as hire margin

Our when due in XX% chartering the a hire and increased increase charter XXXX quarter and total market X% total compared in prevailing third to vessels. more rates panamax of a increase days by to expense XX% for the supramax than

decreased third an today, was booked $XX,XXX per days $XX,XXX net the X,XXX $X,XXX third day at of a on fees per in approximately we've from day. expenses 'XX. XXXX. quarter of last operating of quarter by year per technical Vessel of management day Our through And charter-in $X,XXX basis X% year-over-year the to per in cost approximately day average

impact the per $X.X million day. In the total, third our million third $X,XXX diluted per net the for year. When per quarter at operating last reported Pangaea fees share the of per expenses in For $X.XX diluted from quarter last attributable X-month income was the vessel to $X.XX non-GAAP attributable losses net adjustments, $XX.X to or well as flat derivative technical of remained instruments during income $XX.X reported quarter management share as other period, share $X.XX or in diluted quarter the adjusted compared GAAP to million to Pangaea $XX.X or of unrealized of relatively share or net compared our diluted per excluding was the $X.XX million third year.

quarter approximately had cash $XX.X on $XXX cash capital. obligations from approximately and of debt, operations statement. including million the million due cash increased year-over-year finance $XX.X cash Moving generated end, improved total the company flow in million to net working to At $XX.X to Total million. by lease by

debt XX-month investing vessels. At debt to debt. to operations, our focus of due to our and third During EBITDA allocation net in be the interest stevedore quarter, overall dry Bulk the will our our to X.Xx. the and finance our the was the In Brenton, the trailing Bulk the logistics period adjusted and on fleet the facilities continue term, increased near during repaying into capital expanding expense ratio end and bulk entered refreshing of quarter, Prudence Bulk the X.X% new Patience

now consistent which questions. a prioritize our sustained market consistent the We continuing the can be by believe also we open we as to return line cycle. With through capital dividend, for are will evidenced strategy of that,

Operator

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

Liam Burke

the by third outdistanced in the Mark, indices you relative XX% quarter.

adding many look can If merger, that a to I you you period? don't there handysize, outperform time? add forward, we can say assets and XX consistently but want Or is anticipate the transition let's one at any

Mark Filanowski

try trying to businesses being fix bit to to ships when operate match different finish be and will But are into as Thanks, immediate. the a transition over it we our lot planning little ships do yes, voyages get into quickly fleet. than they Liam. the ships those are business operated take about ships will is It already We've today. we take thought and little already the our way a possible. fixed won't are to a be we're time we'll ours. business to bit of voyages those those begin as way the that and on We'll off this, plan into that Those

Liam Burke

the partials, down slightly distancing by on even indices fourth you're though out year-over-year. quarter you're then XX%, relative the And

the that bad not mentioned not see you the the do out How market is shaking second great. out? but You -- the quarter in of half

Mark Filanowski

down. generally trending fixtures that it's down, and that a market think is seeing we're in bit The I trending we're the little making.

quarter. half. trending always down If out numbers general than a the the a you we quarter in going but about they're first little that at first They're little the with flat third not fourth bit the is look toward that's lower market put quarter, up bit there, the

Operator

from And Poe we'll AGP. with take next Fratt question our

Charles Fratt

a I of questions. have couple

little mean give dampened transition into the on -- Can up follow add color more those just I XX just as as fleet? assimilating can through lower into a the the you quarter handys? all, that is of handys First going first you to work period the you on profitability me

Mark Filanowski

those will can other to No, a our ultra I of XX We've ships to be start our short I customers like time I Those move on do customers, within of supra capabilities. -- -- to period profitability, on to voyages. returns be, is fleets. panamax our Poe. know lot got we which said, and think expect to business, premium we on don't get immediately. those we It's the above ships into fleet into we'll space think premium got it's don't move market, a have that hope them directly dampened ships But our introduce to a the They've to able serve. current business that does like and

Charles Fratt

to Okay. that there's in quarter hard the always something And calibrate. Gianni, then, it's

gross quarter, Was revenues, revenue quarter? not like hit lower voyage anything being higher. it in there during than particular expected TCE of the was because seemed in because the This but expenses voyage expenses that of

Gianni DelSignore

No, to. nothing we outlier I Poe. think point There there's that don't could Thanks, wasn't specific. one

currently what But our some in good it point ships. want cases, perspective, panamaxes. some very that So function lower of cost quarter. levels about just we're was cost just are reasonable I a do their I They looking for breakevens one and from the the on thing these your of at handys, and a to on question out XX are than at think on breakevens the financed supras

we're our think is handys, wouldn't from it think XX structure -- certainly I a dampen So those cost profitability. I perspective, the given of profitability

think levels, P&L from taking very perspective. I breakeven cash cost on both good a from we're ships and a at

model So function our but be breakeven a we're trading time, higher into vessels on current that levels than incorporating may take them owned vessels. fleet taking would a of that of at think I our is that not

Charles Fratt

impact potential higher will help just the you the G&A Gianni, Could then, And quarter transaction? the and of just the G&A Great. the for sort because there be calibrate quarter of in Okay. of fourth me transaction? fourth

Gianni DelSignore

won't close be But depending date there fourth looking accounting of costs in from of within No, the And short. cost air our shareholder the XXXX, of meeting. and period we're The the assuming December the all closing transaction, attributable of cost the to those up capitalized timing would post will is in you're completing it's closing like in quarter. to currently higher G&A referring be hoping, the a the on the relatively if an be vessel. perspective

cost will cash expense as transaction. be be be it an a would not the fourth not of quarter. -- the It in So -- would be would capitalized the

rate would think year. consistent we've far QX G&A for relatively run this as I our so seen So be

Charles Fratt

date Yes. has been X? And right, the December set,

Gianni DelSignore

we're We filed would just preliminary then That set. No, preliminary dates final a still... we're been and -- waiting dates. to the setting it And we estimate, clear our proxy, was but not start that. has

Charles Fratt

but still the moving, still proxy was around. it's X it's filed. moving in December the So date was preliminary that Yes,

Gianni DelSignore

Correct.

Charles Fratt

Okay. that to the transaction. approving And of They're are seller. allows this you issue again, issuance the the approving stock just to shareholders not the stock

Gianni DelSignore

stock. is of proposed The Yes. being that's Correct. question the issuance

that's being for on. being this voted Obviously, transaction. it's issued what's So

just So proposal just we they're connected, the really of the that assume -- shares. issuance but can it's is the

Charles Fratt

me fourth dry 'XX out And into quarter then schedule for understand your docking the of can and then help you 'XX? Yes. just looking

Mads Petersen

Mads here. Poe,

ships QX. in we are, be we sort dockings ]. little just on for at We where of next here, number will year, bit looking a depending have at -- dry the And [ X a X I'm looking could

Charles Fratt

spread just them out over evenly, the pretty the of in build And year... course

Mads Petersen

a as intermediate year. Yes, over That well. the of includes couple roughly dockings that's

in does doing we're the QX. the of So ones one

So shorter in bit nature. they little are a

Charles Fratt

chartered-in quarter? days to X,XXX Great. equates forward then Okay. the back XX booked, and have going your fleet And in you to quarter. the to owned your XX vessels, for land that this XX do point think and will cover, What chartered then you about in

Gianni DelSignore

So the coming we the Poe. I'm think not is actually number, into can calculate we're around into XXs quarter. fourth average our that sure fleet high I quarter, going

performance is what that was through think just we I yesterday indicated.

we X,XXX quarter, that's expecting quarter. fourth today, for the X,XXX I But fleet we're full did So of averaging days the We've the think not yes, fourth XXs for still think days. and the far, obviously. quarter. is for so But balance that the chartered the in in I

Charles Fratt

was fourth Also, lower the that the issues prevalent margins fourth quarter, margins. made, was the be flattened And volatility you by lower in in weather in Great. flattened Gianni, potential Nordic. the comment still third then, that Will demand quarter impacted that lower volatility, had quarter?

Gianni DelSignore

of was 'XX. in QX to XXs. going of look QX chartering of reference is And in 'XX, XX.X%. market market popped if the at in 'XX that our is volatility cost reason there we're then was was making there the The the rates QX we prevailing the XXXX, think I QX in into XXs. And entering into of was the

So volatility. that QX we volatility. very the was of we Whereas did 'XX, if little going flat, market at 'XX -- benefit QX QX look into of upward sorry, from of

fleet. point QX from trying entered QX, charter-in out a lower market into were we what benefiting last to going year, So position the was we our

charter-in in what a our bad $X,XXX XX.X%. little going $X,XXX in a but think, Now charter-in at paying which what look bit were forward, TCE a of pretty QX at a still It's margin that a trading flat, our it's $X,XXX decent day it from, we're the charter-in was you versus of yes, is fleet squeeze the margin generated -- market 'XX. But day our not did little about still bit was, fleet a we And thing. and levels. an trading I it is day average was 'XX indication QX if

little of just make indicated a comment, and in and XX.X% the pretty booked versus But our down bit QX the that was and we've the we've fourth bit of QX. from Mark it's around done, a quarter, was far, those but little 'XX, TCE, mean, through So at coming where of it's stable been I it so we day are a $XX,XXX balance but slowness the yesterday. actually did it's numbers what and -- XX.X%

Charles Fratt

sheet. the as Is There's small might you JV could other the an you me at understand stevedoring that while help there you that million asset the And -- called $X.X good. ask I what if million, Tampa can was that just it's think Sounds Is up then something over I just noticed in in $X investment. a your Gianni, the had I since about question stevedoring the it's And Q Tampa balance end is? of base have there. in base last year. -- -- categories,

Gianni DelSignore

Yes.

about which vehicle an of flowing into basis investment. method our Our for Gramercy, equity we our our of equity talk profits the base for on -- stevedoring one that function is account. has so bauxite that that joint the stevedoring income And in venture joint clients. of that account just investment that business discharging a Base venture is been owns that into this our year,

I'm joint So stevedoring but that -- a pro of venture. we -- our -- because our because from that up of venture is -- the on of up expenses not full our go expenses the happen would venture joint sure with consolidated, we rata income will terminal recognize terminal that stevedoring company. we fundamentally, business, that's is recognized you entity, it's part that if just had that Poe, the essentially But that go it the put that would capital the consolidated is not terminal account fluctuate is the base earnings it's initial business go profitability joint and and P&L. of our would part revenue it's that's and And consolidated, stevedoring the not that account and terminal is what undistributed of but recall, plus part the into would assets. If would in share other

Charles Fratt

terminalling would And Can still acquisition, in opportunities the -- still then You about terminalling handy on this, with the like you that opportunities -- Great. very the call about highlighted the looking opportunities the of you even you can talk whoever for can business? the you're talk address to 'XX? as your in high. with the you is powder sort just look dry business into that

Mads Petersen

come Thanks just Poe. this business, and in through I quite our across we opportunities. question, freight for expand projects our we see And our also we sort that more excited as but stuff screen. that of presence mean are about both that the along comes space, originates

very working hard portfolio. expand we are to So that

Tampa to high next be running looking and year, operation, significant pretty which up get we possibilities couple will a that at of have Tampa are operations for. We a hopes we -- other our will and

that all offering pretty we to ocean today. similar do So freight it's stevedoring. link what like We and our the between

sort in there. today. excited or we're So terminals shape in the form we as looking into quite what the We're same about of do

Operator

[Operator with question Value Instructions] next Investors. take Climent We'll our from Molins

Climent Molins

Most has to [ similar of, now option with talk do wanted And about potential say, to acquisition ask about any between but secondly, is in ]. something of already Could the there NBHC? let's you a been the covered, year? MBP a instead the I exercising trade-off bit

Mark Filanowski

it that bit the here our interest us. Interesting our Climent. the balance partner. see -- for thanks, well in in was ships we sheet consolidates an it right and a thought opportunity up And to was assets for I year-end. question. think trade. story simplifies -- We did It the We ice-class and it worked timing out our here before little capture the clean post-panamax

-- we that purchase see we XX over have an years, right that's been think it. partner there's going and on has have a makes us profitable throughout. opportunity to the we here it's that we additional it. But that's to deal, do share, do for been table entity nothing pursue will If -- on NBHC now, the On now that satisfied very

Climent Molins

That's bit grow services ask about helpful. potential I expect forward? for focused you've mostly been Is organically? the on strategy the let's going for acquiring I lately, also But say, Or business a priority of there, you bolt-on a to mean, simply it's acquisitions on we going that the side. to wanted the should forward ships. side to strategic business. grow any

Mark Filanowski

part. in The for saw weren't Baltimore terminals with those an been but realizing potential. most we participation of Everglades area that an areas. We've of infrequent doing acquisition involved host the in, potential organically it acquisition that of in was in we're the And fleet some Port in ocean we our some

more the those handy However, the capitalize Baltimore in Everglades are we by fleet. Port fleet to the capabilities hope its strategic areas. terminals more serviced And really and on and

are more year, we're building got already We've voyages We the there utilize this Tampa. next time into There's XX facility Probably. Tampa provide on opportunity That work that for voyages. up booked or probably at XX supra least and handy both at now. will to opening going year. next

So now. for areas Southern there. few some right other real stevedoring that's our hope We next in a looking -- long-term business an months Texas important part We're a in customer to at Texas contract of do that to within a the addition business. to contract achieve

So organic it's been mostly growth.

see licenses into terms more we little to or space. asset-light Mads buying expensive Buying lot business, a to it more a and with more we renting and -- yet land expand come is do with as than business. of trying as get Again, big doing stevedoring piece land this it to more we opportunities. a mentioned, haven't as really that We

could some future come point. that at So

Operator

concluded. to closing has turn back or any over remarks. now for I program Mark Filanowski Q&A The now will the additional

Mark Filanowski

Should us our please Thanks investors@pangaeals.com, again up feel our questions, team call free and any of This member you to a have you. contact call. at will today. follow with concludes joining for our

may now disconnect. You

Operator

participation. Thank you. concludes you your That today's teleconference. for Thank

now may You disconnect.

Pangaea Logistics Solutions (PANL) 13 Nov 242024 Q3 Earnings call transcript