ATHENS, GREECE, July 25, 2024 – Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, today reported net income of $10.2 million and net income attributable to common stockholders of $9.7 million for the second quarter of 2024. The 2024 second quarter results compared to a net income of $18.4 million and net income attributable to common stockholders of $17.9 million for the same period in 2023. Earnings per share, basic and diluted, for the second quarter of 2024 were $0.79 and $0.26, respectively.
Revenue was $20.5 million ($19.7 million net of voyage expenses) for the second quarter of 2024, compared to $31.5 million ($30.5 million net of voyage expenses) for the same period in 2023. This decrease was attributable to the decrease in time-charter equivalent rates (“TCE rates”) realized during the quarter, and to the decrease in the ownership days following the sale of the vessel P. Kikuma in December 2023. Fleetwide, the average TCE rate for the second quarter of 2024 was $30,970, compared with an average rate of $41,868 for the same period in 2023. During the second quarter of 2024, net cash provided by operating activities was $14.4 million, compared with net cash provided by operating activities of $22.1 million for the second quarter of 2023.
Net income for the six months ended June 30, 2024, amounted to $21.6 million, compared to a net income of $34.1 million for the six months ended June 30, 2023. Net income attributable to common stockholders for the six months ended June 30, 2024, amounted to $20.7 million, and resulted in earnings per share, basic and diluted, of $1.68 and $0.55, respectively. Net income attributable to common stockholders for the six months ended June 30, 2023, amounted to $22.5 million, and resulted in earnings per common share, basic and diluted, of $2.43 and $1.00, respectively. The difference between net income and net income attributable to common stockholders for the six month period ended June 30, 2023, mainly reflects aggregate non-cash items of $10.6 million, as per US GAAP accounting standards, which did not affect the Company’s operating cash flows.
Commenting on the results of the second quarter of 2024, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“During the second quarter of 2024, the tanker market remained solid, supported by the ongoing shift in trade patterns arising from the Russian oil trade and disruptions in the Red Sea. These factors resulted in longer haul tanker voyages. The increased ton-mile demand, in conjunction with limited supply growth, continues to sustain firm tanker charter rates. This enabled our Company to achieve a fleetwide average time charter equivalent rate of $30,970 per day, corresponding to quarterly revenues of $20.5 million and quarterly net income attributable to common stockholders of $9.7 million.
“Going forward, we believe that the profitable tanker market environment will remain firm, prompting our continued focus on a fleet deployment strategy that emphasizes balanced exposure to short- and medium-term time charter contracts and the spot market. Specifically, one of the seven Aframax tankers in our operating fleet trades in the spot market under a pool arrangement, while the remaining six vessels are currently operating under time charter contracts with first-class charterers, securing a remaining fixed revenue backlog of approximately $61.1 million as of the beginning of the third quarter of 2024. One of these time-charter contracts expires in August. We expect to maintain exposure in the promising spot market into the seasonally strong fall and winter periods. As a result, we anticipate employing this vessel at even more lucrative rates, thus capitalizing on the prevailing robust freight rate environment for Aframax tankers.
“Looking ahead, we remain focused on our fleet expansion and renewal strategy, which prioritizes fuel efficiency and low emissions and reflects our commitment to participating in the energy transition. As previously announced, we have entered into shipbuilding contracts for the construction of three LNG-ready LR2 Aframax tankers and one LR1 chemical/product oil tanker, with expected delivery to our Company between late 2025 and early 2027. These vessels, which were ordered at very attractive contract prices, as values have since appreciated considerably, will be equipped with scrubbers and water ballast treatment systems and will feature the latest high-specification engines. By taking constructive steps towards complying with stringent emission requirements, we aim to provide our customers with environmentally sustainable operations.
“The already secured 5-year time charter employment contracts for our three newbuilding LR2 Aframax tankers, which will generate gross revenues of $169.8 million and supplement our existing revenue backlog of $61.1 million, are considered indicative of our competitive fleet structure supported by the unique features of our newbuilding tankers. We believe that our financial position is strong, with a quarter-end cash balance (including restricted cash) of approximately $62.7 million, representing 1.2x our outstanding bank debt, and an aggregate revenue backlog of $230.9 million, corresponding to 109% of all our remaining newbuilding capital expenditures.”
