Pioneer Marine Inc. Announces Financial Results for the Quarter Ended 31 March 2020 Norwegian Over The Counter Market: PNRM | Instant News


MAJURO, Marshall Islands, May 14, 2020 (GLOBE NEWSWIRE) – Pioneer Marine Inc. and its subsidiary (OSLO-OTC: PNRM) (“Pioneer Marine,” or “Company”) a leading shipowner and global provider of drybulk transportation services providers announced financial results and operations for the quarter ended March 31, 2020.

Financial overview:

First round
2020
First round
2019
(Loss) / net income($ 0.9) million $ 1.5 million
Revenue equivalent to Time Charter (“TCE”) $ 9.7 million $ 14.4 million
Adjusted EBITDA *$ 2.5 million $ 6.2 million

Jim Papoulis, Chief Executive Officer commented: “The beginning of 2020 was marked by an outbreak of COVID-19, and global markets were forced to face unprecedented challenges in all aspects of economic activity. Responding to this challenge, Pioneer began mobilizing resources from day one, focusing on meeting the needs of all our clients, maintaining the health and safety of our employees and ensuring uninterrupted business continuity.

“The first quarter results were satisfactory because we reported a positive EBITDA of $ 2.5 million considering that many of our industry segments were severely affected by the coronavirus outbreak. The market is weaker because many countries impose strict locking measures and adopt reduced operational modes from many ports around the world, making it a challenge to send our ships to trade throughout Europe and the Atlantic. Even with many ports considered “affected”, Pioneer, with appropriate preventive measures taken for the safety and health of its crew, was able to achieve a high utilization rate of 98%.

“Despite these global difficulties, Pioneer managed to reach a TCE level of $ 6,681 which is above the market level.

“I want to pay respect to our crew members for doing what is necessary to ensure the smooth running of our operations and also all of our employees who continue to work under these difficult moments, to ensure that global trade continues, even when it is proven. be a challenge.

“As the economic impact of COVID-19 deepens, so does the rapidly growing imbalance in the shipping market. However, we remain optimistic that the market will recover during the next quarter and that we will face this storm with the best results. “

* For reconciliation and definition of EBITDA / Adjusted EBITDA refer to the “Summary of Operations Data (unaudited)” in this press release

Covid19 outbreak:

On March 11, 2020, the World Health Organization declared the Novel 201 Coronavirus (“Covid-19”) as a pandemic. Many countries, ports and organizations, including where Pioneer carries out most of its operations, have implemented measures such as quarantine and travel restrictions to fight the plague.

Pioneer, which prioritizes the safety and well-being of all our employees on land and on the ship while at the same time serving the needs of our clients, has taken precautions early on. These initiatives include, among others, providing a safe work environment for office employees with proper disinfection carried out at our place and maintaining cleanliness in the office, encouraging all meetings to be held virtually rather than physically at work to limit any physical constraints. interaction, establishing a “Work from Home” policy for all our office employees by providing the infrastructure and tools needed to enable efficient and effective business conduct. We have also postponed crew changes and supervisory visits since the beginning of March, imposed strict travel restrictions, ensuring continuous supply of our fleet with protective equipment and additional medical supplies and psychological support for all our sailors from dedicated personnel on a regular basis.

In addition, we continue to monitor the developing situation and make all the necessary preparations to overcome and reduce, to the extent possible, the impact of COVID-19 on our company’s financial position through cost rationalization projects throughout our organization and continue efforts to optimize efficiency and earning capacity income. As always, we continue to work closely with our Lenders to monitor all our financial agreements and ensure immediate compliance.

Liquidity & Capital Resources:

As of March 31, 2020, the Company had total liquidity of $ 21.2 million including $ 10.4 million in limited cash. The company has no capital commitment.

During the first quarter of 2020 one more ship was equipped with the Ballast Water Treatment System (‘BWTS’) without interruption in its operations while he was involved in trade, increasing to four in total the number of ships that were equipped with BWTS.

Financial Review: Three months ended March 31, 2020

Adjusted EBITDA reached $ 2.5 million for the quarter, a 60% decrease compared to the first quarter of 2019.

The TCE level of $ 6,681 for the first quarter of 2020, decreased by 21.6% compared to the TCE level of $ 8,523 for the same period in 2019. The current Covid-19 pandemic has had a global impact with negative results among almost all sectors of economic activity. The shipping industry is inevitably affected by this financial environment that does not precede it – despite the current weak market conditions, the Company managed to reach a TCE level above the market index while maintaining a high fleet utilization rate at 98.1%.

The ongoing cost reduction initiatives and optimization of cost control procedures developed by the Company reached a healthy OPEX level of $ 4,337 per day, remaining at the same level both in the first quarter of 2020 and 2019.

General and administrative costs increased by $ 0.1 million or 15.4% during the first quarter of 2020 mainly due to one-time costs. Excluding one-time general and administrative costs for the first quarter of 2020 will be the same as the 2019 comparative quarter.

Depreciation costs of $ 2.1 million have a downward impact due to the reduction in fleet from 19 ships in the first quarter of 2019 to 16 vessels in the first quarter of 2020.

The first quarter of 2020 was affected by the elimination of bunker inventories by $ 0.2 million as a result of the decline in bunker prices which affected the net realizable value of inventories at the end of the quarter. No fees are recorded in the comparative quarter period.

Interest and financial costs of $ 1.0 million were reduced by 34.8% over the same period a year earlier, mainly because of a decrease in the Libor rate combined with a reduction in loan balances.

Cash Flow Review: Three months ending March 31, 2020

Cash and cash equivalents, including restricted cash, decreased by $ 6.1 million as at 31 March 2020 and by $ 21.2 million compared with $ 27.3 million as at 31 December 2019.

This decrease was due to $ 14.8 million of cash used in funding activities partially offset by $ 7.7 million of cash provided by investment activities and $ 1.0 million of cash provided by operating activities.

Highlights of cash flow activities during the first quarter include:

  • $ 7.3 million in cash inflow from disposal of ships completed in the first quarter;
  • $ 0.4 million in cash inflows from expected ship sales;
  • $ 7.2 million in scheduled loan payments and prepayments due to ship sales, and
  • Distribution of dividends of $ 7.6 million.

Current Fleet List

ShipPageDWTYear Built
Owned Fleet
Handisize
Reunion BayKanda Shipbuilding32,3542006
Fortune BayShin Kochijyuko28,6712006
Ha Long BayKanda Kawajiri323112007
Teal BayKanda Kawajiri32,3272007
Eden BayShimanami Shipyard28,3422008
Emerald BayKanda Shipbuilding32,2582008
Mykonos BayJinse Shipbuilding32,4112009
Decisive BayHyundai Vinashin36,7672012
Jupiter BayTsuji Heavy Industries30,1532012
Venus BayTsuji Heavy Industries30,0032012
Gulf of OrionTsuji Heavy Industries30,0092012
Falcon BayYangzhou Guoyu Shipbuilding38,4642015
Kite BayYangzhou Guoyu Shipbuilding38,4192016
Alsea BayHyundai Mipo Dockyard Co. Ltd.36,8922011
Liberty BayHyundai Mipo Dockyard Co. Ltd.36,8922012
Monterey BayHyundai Mipo Dockyard Co. Ltd.36,8872013

Commercially Managed Fleet

Handisize
Useful 1Samjin Shipbuilding Co. Ltd.33,7552010
Useful 2Samjin Shipbuilding Co. Ltd.33,7552010
Useful 3Samjin Shipbuilding Co. Ltd.33,7552011
Useful 4Samjin Shipbuilding Co. Ltd.33,7622011
Useful 5Samjin Shipbuilding Co. Ltd.33,7552010
Useful 6Samjin Shipbuilding Co. Ltd.33,7572010

Operating Data Summary (unaudited)

Three Months Ended
March 31, 2020
Three Months Ended
March 31, 2019
Earnings, net11,06615,911
Travel expense(1,421)(1,541)
Time charter, equal income 9,64514,370
Commercial income costs11315
Total9,75814,385
Ship operating costs(6,385))(7,410)
Drydock fee(2)(734))
Depreciation expense(2,083)(2,403))
General and administrative expenses(879))(753))
Losses from ship disposal(74))
Remove inventory(219))
Interest expense and financial costs, net(1,021)(1,567)
Interest income3468
Other expenses and taxes, net(89))(96))
(Loss) / Net income(960)1,490
Add: Loss when disposing of the ship74
Add: Losses due to debt write-off2
Add: Remove inventory219
Net (loss) / Adjusted Income (2)(667)1,492
(Loss) / Net income per share, basic and diluted(0.04)0.06
Net (loss) / adjusted, basic and diluted net income (2)(0.03)0.06
Three Months Ended
March 31, 2020
Three Months Ended
March 31, 2019
(Loss) / Net income(960)1,490
Add: Depreciation expense2,0832,403
Add: Interest expense and financial fees, net1,0211,567
Add: Other taxes5048
Less: Interest income(34))(68))
EBITDA (1)2,1605,440
Add: Losses due to debt write-off2
Add: Loss when disposing of the ship74
Add: Drydock fee2734
Add: Remove inventory219
Adjusted EBITDA (1)2,4556,176

(1) Adjusted EBITDA represents net income before interest, other taxes, depreciation and amortization, drydock costs, profit / (loss) disposition of the ship, restructuring costs, gains / (losses) on debt settlement and inventory write-offs and is used as a measure financial support by management to assess our financial and operating performance. We believe that Adjusted EBITDA helps our management and investors by increasing the comparability of our performance from period to period. We believe that incorporating Adjusted EBITDA as a financial and operating measure benefits investors in choosing between investing in us and other investment alternatives. Adjusted EBITDA does not represent and should not be considered as an alternative to net income / (loss) or cash flow from operations, as determined by generally accepted accounting principles in the United States, or US GAAP, and our calculations about Adjusted EBITDA may not be can be compared to those reported by other companies.

(2) Adjusted net income / (loss) and related amount per share is not a size prepared in accordance with the U.S. GAAP and may not be used in isolation or substitution of the Company’s results.

Operating Data Summary (unaudited)

Ship Utilization:Three Months Ended
March 31, 2020
Three Months Ended
March 31, 2019
Delivery day (2)1,4721,710
Less: Holidays284
Less: Holidays due to drydock20
Day of operation (3)1,4441,686
Fleet Utilization (4)98%99%
Commercial Boat Days (8)549178
TCE per day – $ (1)6,6818,523
Opex per day – $ (6)4,3374,333
G&A fee per day – $ (7)597439
G&A based on commercial days – $ (9)435393
Ships at the end of the period1619
Average number of vessels during the period (5)1619

(1) Time Charter Equivalent, or TCE income, is a non-GAAP measure. Our method of calculating TCE income is determined by travel revenue minus travel costs (including bunkers and port fees). The TCE revenue, divided by the number of days we operate during the period, is TCE per day, which is consistent with industry practice. TCE income is included because this is a standard performance of the shipping industry used mainly to compare period-to-period changes in the performance of shipping companies regardless of changes in the mix of charters (ie, spot charters and time charters), and provides useful information for investors and management.

(2) Ship days: We define ship days as the number of aggregate days in the period in which every ship in our fleet is owned by us. Ship days are an indicator of the size of our fleet during a period and affect the amount of revenue and total costs that we record during a period.

(3) Operating days: We define operating days as the number of days our ships in a period of fewer days are needed to prepare vessels obtained for initial voyages and their holidays related to off-chartering to undergo repairs, drydocks or special surveys. The company uses operating days to measure the number of days in the relevant period in which the ship must be able to generate revenue.

(4) Fleet utilization is defined as the ratio of operating days to shipping days.

(5) The average number of ships is the number of ships that make up our fleet for the relevant period, as measured by the number of days of the ship divided by the number of calendar days in that period.

(6) Opex per day: calculated by dividing ship operating costs by ship day for the relevant time period.

(7) Adjusted G&A Costs per day: calculated by dividing operational and administrative costs based on the day of delivery for the relevant time period.

(8) Commercial Ship Days: We define commercial ship days as the total Ship days and the number of aggregate days during the period in which we have every vessel in our commercial fleet under our management. Commercial ship days are an indicator of the size of our fleet owned and managed during a period and affect the amount of revenue and the amount of costs that we record during a period.

(9) Commercial days based on G&A costs: calculated by dividing current operational and administrative costs by commercial ship days for the relevant time period.

Condensed (Unaudited) Consolidated Balance Sheets
(In thousands of US Dollars)

As inMarch 31, 2020December 31, 2019
ASSETS
Cash & cash equivalents10,82716,362
Cash is limited (current and non-current)10,35010957
Ships are sold for sale7,350
Ship, clean172,594174,635
Other receivables6,5877,425
Other assets76103
Total assets200,434216,832
LIABILITY AND EQUITY
Account payable and accrued liabilities4,5125,014
Other current liabilities380
Deferred income6271,144
Total debt, after deducting deferred financial costs77,61384,773
Total liability83,13290,931
Shareholder equity117,302125,901
Total liabilities and shareholder equity200,434216,832

Consolidated (Unaudited) Cash Flow Statement
(In thousands of US Dollars)

Three months have ended
March 31, 2020
Three months have ended
March 31, 2019
Cash flow from operating activities
(Loss) / Net income(960)1,490
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation2,0832,403
Amortization of deferred financial costs7090
Remove inventory219
Losses from ship disposal74
Staff leave compensation terms8
Changes in operating assets and liabilities(469))(152))
Net cash is obtained from operating activities1,0253,831
Cash flow from investing activities
Payment for ship repairs(15))(164))
Cash receipts from ship sales7,343
Cash is received in advance for expected sales380
Purchase of other fixed assets(5)(45))
Net cash is given by / (used in) investment activities7,703(209))
Cash flow from funding activities
Loan payments and prepayments(7,230))(6,558))
Dividends are paid(7,639)
Payment of deferred financial costs and other loan related costs(143))
Buyback of common stock(429))
Net cash is used for funding activities(14,869)(7,130)
Net decrease in cash and cash equivalents(6,141))(3,508)
Cash and cash equivalents and cash restricted for use at the beginning of the period27,31826,795
Cash and cash equivalents and cash restricted for use at the end of the period21,17723,287

About Pioneer Marine Inc.

Pioneer Marine is a leading ship owner and global drybulk handbulze transportation service provider. Pioneer Marine currently has sixteen Handysize drybulk carriers and is the commercial manager of six Handysize vessels.

Forward-looking statement

Matters discussed in this press release may be forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe port protection for forward-looking statements to encourage companies to provide prospective information about their business. Forward-looking statements include statements about plans, goals, objectives, strategies, events or future performance, and underlying assumptions and other statements, other than statements of historical fact. The company wishes to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and includes this warning statement in connection with this safe port law. The words “believe,” “anticipate,” “mean,” “estimate,” “estimate,” “project,” “plan,” “potential,” “may,” “must,” “hope,” “wait, “” pending “and similar expressions identify forward-looking statements.

Forward-looking statements in this press release are based on various assumptions, many of which are based on, on subsequent assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions make sense when made, because they are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or achieve expectations, beliefs or projections.

In addition to these important factors, other important factors which, in our view, can cause actual results to differ materially from those discussed in forward-looking statements including the failure of partners to fully enter into their contracts with us, the strength of the world economy and currency , general market conditions, including fluctuations in charter and ship value, changes in demand for dry bulk vessel capacity, changes in our operating costs, including bunker prices, drydock and insurance costs, markets for our vessels, availability of financing and refinancing, counterparty charter performance , the ability to obtain financing and comply with agreements in such financing arrangements, changes in government regulations and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes because of accident aan or political Events, ship damage and off-hires events and other factors.

Contact:
Pioneer Marine Inc.

Jim Papoulis – CEO
+30 212222 3750

Korinna Tapaktsoglou – CFO
+30 212222 3750

Investor / Media Relations
Capital Link, Inc.
Kevin Karlis
+212 661 7566
[email protected]

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