Pyxis Tankers Inc., an international pure-play product tanker company, announced unaudited results for the three months ended March 31, 2023.
Summary
For the three months ended March 31, 2023, our Revenues, net were $11.6 million. For the same period, our time charter equivalent (“TCE”) revenues were $9.2 million, an increase of approximately $5.4 million or 139% from the comparable quarter in 2022. Our net income attributable to common shareholders for the three months ended March 31, 2023 was $8.7 million, representing an increase of $12.4 million from a net loss of $3.7 million in the comparable period in 2022. For the first quarter of 2023, the net income per share was $0.81 basic and $0.71 diluted compared to a net loss per share of $0.34 (basic and diluted) for the same period in 2022. Our Adjusted EBITDA for the three months ended March 31, 2023 was $4.2 million, which represented an increase of $4.9 million over the same quarter in 2022. Please see “Non-GAAP Measures and Definitions” below.
On March 23, 2023, the Company sold its oldest tanker, the 2009 built “Pyxis Malou”, for $24.8 million in cash. The gain on vessel sale was $8.0 million.
Valentios Valentis, our Chairman and CEO, commented:
“We are pleased to report strong growth in our first fiscal quarter, 2023 financial results with Revenues, net of $11.6 million and Net Income attributable to common shareholders of $8.7 million. Resilient economic activity, despite recessionary pressures, and increasing mobility in many parts of the world has resulted in solid demand for transportation fuels. Favorable market fundamentals have been supported by low inventories of many refined products, and more significantly, the impact of the war in the Ukraine has led to continued market dislocation, including arbitrage opportunities, as well as the redirection of trade flows from shorter-haul to longer distances resulting in ton-mile expansion of seaborne cargoes, thereby reducing available capacity. Consequently, chartering activity for product tankers remains robust and asset values high, reflecting an expectation of a positive outlook for the sector.
After completing the sale of our 14 year old tanker at a historically high price in March, we now own and operate four modern Eco- efficient MR’s. During the three months ended March 31, 2023 our daily TCE rate more than doubled to $23,508 compared to the same period in 2022. Positive momentum has continued into the spring of 2023, indicating another solid year. As of May 11th, 2023, 70% of the available days in the second quarter of 2023 for our MR’s were booked at an estimated average TCE of $29,160 per vessel. While all our vessels are currently under short-term time charters, we expect to prudently continue our mixed chartering strategy of time charters and spot voyages.
For the near term, we expect volatility to prevail, yet we believe charter rates to stay above five-year average levels given the modest inventories of refined petroleum products in a number of locations worldwide, the global effects of the recent G-7 and European Union ban and price caps on seaborne cargoes of Russian refined products as demand in China increases. Despite ongoing concerns about slowing economic activity globally, potential further OPEC+ production cuts, tighter monetary policies, high inflation and destabilizing geo-political events, supply-side fundamentals reinforce a positive outlook supported by steady volumes and longer transport distances. The International Monetary Fund recently revised its outlook for global GDP growth in 2023 to 2.8% due to a slowdown in the advanced economies. However, China, a leading consumer of petroleum products, seems to be rebounding on pace to achieve the 2023 estimate for GDP growth of 5.2%. In April, the International Energy Agency revised its forecast for global oil demand to increase 2% or 2.0 million barrels per day to 101.9 Mb/d in 2023. A leading research firm recently estimated that global product tanker ton-miles were up 13% in the first quarter, 2023 from the same period in the prior year. Additionally, the firm estimated that average sailing distances could increase 7-8% this year. Over the long-term, changes in the global refinery landscape, led by capacity additions outside of the OECD, should provide added longer-haul volumes. Our positive view is further supported by the historically low order book for MR’s and the large number of inefficient 20+ year old tankers, which exceed the orderbook and are demolition candidates during the next 5 years. Overall, we expect MR tanker supply to grow annually at less than 2% net, through 2024.
While we have taken advantage of the high asset value environment by recently selling our oldest tanker, we patiently monitor the market to develop viable opportunities for fleet expansion, especially for the purchase of modern eco-efficient MR’s. Our industry and customer relationships, substantial current cash position, free cash flow generation and low leverage, give us the resources and flexibility to aggressively pursue attractive situations which may further enable us to enhance shareholder value. In the meantime, we maintain our focus to further increasing balance sheet liquidity and reducing leverage.
We believe our current share price does not reflect the value proposition of Pyxis Tankers, let alone the significant operational progress, financial performance as well as positive outlook. We continue to trade at a substantial discount to estimated net asset value, especially in relation to our pure-play product tanker peers. Consequently, the Board of Directors has authorized a common stock re-purchase program of up to $2.0 million through open-market transactions for a period of six months.”
Results for the three months ended March 31, 2022 and 2023
Amounts relating to variations in period–on–period comparisons shown in this section are derived from the interim consolidated financials presented below.
For the three months ended March 31, 2023, we reported Revenues, net of $11.6 million, or 68% higher than $6.9 million in the comparable 2022 period. Our net income attributable to common shareholders was $8.7 million, or $0.81 basic and $0.71 diluted net income per share, compared to a net loss attributable to common shareholders of $3.7 million, or $0.34 basic and diluted loss per share, for the same period in 2022. The weighted average number of basic share count had increased by approximately 94 thousand common shares from the first quarter 2022 to approximately 10.7 million shares in the same period 2023. The weighted average number of diluted common shares in 2023 of approximately 12.6 million shares assumes the full conversion of all the outstanding Series A Convertible Preferred Stock in the most recent period. The average MR daily TCE rate during the first quarter of 2023 was $23,508 or 109% higher than the $11,227 MR daily TCE rate for the same period in 2022, due to improved market conditions. The revenue mix for the first quarter of 2023 was 74% from short-term time charters and 26% from spot market employment. Adjusted EBITDA increased by $4.9 million to $4.2 million in the first quarter, 2023 from negative $0.7 million for the same period in 2022.
