Pioneer Marine Inc. Announces Financial Results for the Quarter and Year Ended December 31, 2019

MAJURO, Marshall Islands, Feb. 27, 2020 (GLOBE NEWSWIRE) -- Pioneer Marine Inc. and its subsidiaries PNRM ("Pioneer Marine," or the "Company") a leading shipowner and global drybulk handysize transportation service provider announced its financial and operating results for the fourth quarter and year ended December 31, 2019.

Financial Highlights at a glance:

Torben Janholt, Chief Executive Officer commented: "Despite the challenging year for the drybulk industry, Pioneer Marine managed to conclude the most profitable year in its entire history and the second consecutive year with a positive bottom line. Our chartering strategy to cover significant part of the weak first quarter in combination with our consistent above market performance contributed significantly to Company's results. The decision to dispose older tonnage at attractive selling prices and the efficient cost control throughout the organization paved the way for Pioneer to achieve a Net Profit of $12.5 million and EBITDA of $27.4 million.

"Towards the end of 2019, we distributed a cash dividend of $0.40 per share to our shareholders.  Looking forward, we aim to take advantage of market opportunities in spite of the present depressed shipping scenarios and maximise our shareholders wealth.

"Taking this opportunity, I would like to announce that my journey with Pioneer has come to an end and effective February 28, 2020 I have decided to retire as the Company's CEO and member of the board. It has been a pleasure to work with such a motivated group of people and I am proud that together we brought Pioneer to a new era. Mr. Dimitrios Papoulis, who currently serves as the Company's COO will be appointed the new CEO and Mrs. Korinna Tapaktsoglou also serving as CFO, will be appointed as member of the Board of Directors."

_{*For reconciliation and definition of EBITDA/Adjusted EBITDA refer to "Summary of Operating Data (unaudited)" section within this press release.}

Recent Events:

On February 27, 2020 the Board of Directors of Pioneer Marine declared a cash dividend of $0.30 per share of common stock. The cash dividend will be payable on or around March 12, 2020 to shareholders of record on March 5, 2020. The shares will be traded as ex dividend as of March 4, 2020.

Liquidity & Capital Resources:

As of December 31, 2019, the Company had a total liquidity of $27.4 million inclusive of $11 million in restricted cash. 

The Company's plan is to proceed with the installation of Ballast Water Treatment System (‘BWTS') on three vessels of the fleet within 2020 with an anticipated cost of $0.9 million and on the remaining fleet vessels up to early 2023. To date, there are three vessels out of the current fleet which have been already fitted with BWTS.

2019 Events at a glance:

Fleet developments: 

Consistent with the announced strategy to dispose of older tonnage Pioneer Marine has agreed to the following vessels' disposal during the year ended December 31, 2019:

• On January 23, 2019, the Company entered into a Memorandum of Agreement ("MOA") for the sale of M/V Paradise Bay to an unrelated third party on a charter free basis. The vessel was delivered to its new owners on April 10, 2019 and the Company recorded a gain on sale of $3.8 million.
   
• On October 24, 2019, the Company entered into a Memorandum of Agreement ("MOA") for the sale of M/V Fortune Bay to an unrelated third party on a charter free basis. The vessel is expected to be delivered to her new owners latest by early July 2020.
   
• On November 14, 2019, the Company entered into a Memorandum of Agreement ("MOA") for the sale of M/V Tenacity Bay to an unrelated third party on a charter free basis. The vessel was delivered to her new owners on December 18, 2019 and the Company recorded a gain on sale of $3.0 million.
   
• On December 24, 2019, the Company entered into a Memorandum of Agreement ("MOA") for the sale of M/V Calm Bay to an unrelated third party on a charter free basis. On January 17, 2020, the sale of M/V Calm Bay was completed, and the vessel was delivered to its new owners.

Other developments

• On July 29, 2019 the Company entered into a commercial management agreement with a third party, to undertake the commercial management of five dry bulk vessels, enhancing in this context its operating platform.
   
• On October 28, 2019, the installation of the Ballast Water Treatment System on the M/V Emerald Bay was completed successfully.  The project was managed by in-house technical personnel and was carried out while the vessel was en-route without disrupting vessel's operations, enabling cost efficiencies as the installation was completed with a total expenditure of $0.3 million.
   
• On November 20, 2019, the Board of Directors of Pioneer Marine Inc. declared a cash dividend of $0.40 per outstanding share of company's Common Stock. On December 6, 2019, the dividend amounting to $10,186, was paid to stockholders of record as of November 29, 2019.
   
• Within 2019, the Company repurchased 826,770 of its own shares for a total amount of $2,609 thousand. All shares were acquired at a discounted price per share compared to Company's Net Asset Value, increasing the treasury shares held by the Company to a total of 4,867,832 shares.

Financial Review:  Year 2019

Net Income for the year ended December 31, 2019 increased by 81% and amounted to $ 12.5 million as compared to 2018 net income of $7 million. This is mainly attributable to the gain on the sale of M/V Paradise Bay and M/V Tenacity Bay of $6.8 million. The company reported an EBITDA of $27.4 million increased by $5.8 million or 27% compared to 2018.

TCE revenue for 2019 amounted to $53.8 million, decreased by 9% compared to previous year results, mainly due to weaker market conditions. TCE per day for the year ended December 31, 2019 amounted to $8,213, decreased by 13% compared to previous year results. Despite the poor conditions, the Company for a fourth consecutive year achieved to outperform the market by 17% and maintain a high utilisation rate of 98.4%.

Cost reducing initiatives and optimisation of cost control procedures developed by the Company achieved a healthy OPEX rate of $4,251 per day, significantly reduced compared to $4,484 per day for 2018.

Efficient cost management throughout Company's departments contributed towards the reduction of the daily G&A rate to $546 per day, a drop of 17% compared to previous year.

Drydock cost for the year amounted to $1.1 million as two vessels of our fleet performed their special surveys during 2019 while in previous year four vessels of our fleet underwent special surveys for a total cost of $2.4 million.

Interest and finance cost amounts to $5.6 million, a decrease of 8% compared to prior year results mainly due to slightly reduced average Libor rates prevailing as well as reduced loan balances.  

Financial Review:  Fourth Quarter 2019

The fourth quarter of 2019 contributed a positive amount of $5.8 million to Company's annual results, marking a 11% increase compared to the fourth quarter of 2018.

EBITDA totalled to $9.3 million increased by $0.2 million or 2% compared to prior year period.

TCE rate of $9,060 slightly lower by 10% compared to $10,085 TCE per day for the same period of 2018 depicting the poor market conditions prevailing during the last quarter of 2019, however the achieved TCE rate consistently remain well above market by 13%.

Daily vessel OPEX are slightly increased to $4,161 per day during this quarter, as compared to $4,040 for the same period during 2018, the increase is mainly attributable to expenses incurred in preparation of vessels disposal within this quarter.

Daily G&A rate remained at the same levels both in fourth quarter of 2019 and 2018 as a result of our continuous efforts to keep this cost centre at competitive levels compared to our peers.

Interest and finance cost of $1.2 million was decreased by 20% compared to prior year same period, mainly due to the reduced Libor rates combined with reduced loan balances. 

Cash Flow Review:  Year ended December 31, 2019

Cash and cash equivalent, including restricted cash increased by $0.5 million as at December 31, 2019 and amounted to $27.3 million as compared to $26.8 million as at December 31, 2018.

The increase is attributable to cash provided by operating activities of $17.2 million and cash provided by investing activities of $17.6 million partially offset by cash used in financing activities of $34.2 million.

Cash flow activities highlights during the year include:

• $18.2 million cash inflow from vessels disposal completed within the year;
• $21.2 million repayments and prepayments due to vessels sale of loans;
• $2.6 million paid for repurchase of common stock, and
• $10.2 million dividend distribution to Company's shareholders

Fleet List

Owned Fleet

Commercially Managed Fleet*

Summary of Operating Data (unaudited)

1. Adjusted EBITDA represents net income/(loss) before interest, other taxes, depreciation and amortization, drydock expense, gain/(los)s on vessel disposition, restructuring costs and loss on debt extinguishment and is used as a supplemental financial measure by management to assess our financial and operating performance.  We believe that Adjusted EBITDA assists our management and investors by increasing the comparability of our performance from period to period.  We believe that including Adjusted EBITDA as a financial and operating measure benefits investor in selecting 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 United States generally accepted accounting principles, or U.S. GAAP, and our calculation of Adjusted EBITDA may not be comparable to that reported by other companies.
2.  Adjusted net income/(loss) and related per share amounts is not a measure prepared in accordance with U.S. GAAP and should not be used in isolation or substitution of Company's results.
    

Summary of Operating Data (unaudited)

1. Time Charter Equivalent, or TCE revenue, are non-GAAP measures.  Our method of computing TCE revenue is determined by voyage revenues less voyage expenses (including bunkers and port charges).  Such TCE revenue, divided by the number of our operating days during the period, is TCE per day, which is consistent with industry practice.  TCE revenue is included because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e., spot charters and time charters), and it provides useful information to investors and management.
2. Ship days: We define ship days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us.  Ship days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
3. Operating days: We define operating days as the number of our ship days in a period less days required to prepare vessels acquired for their initial voyage and off-hire days associated with off-hire for undergoing repairs, drydocks or special surveys.  The Company uses operating days to measure the number of days in a relevant period during which vessels should be capable of generating revenues.
4. Fleet utilization is defined as the ratio of operating days to ship days.
5. Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of ship days divided by the number of calendar days in that period.
6. Opex per day: is calculated by dividing vessel operating expenses by ship days for the relevant time period.
7. G&A expenses per day: is calculated by dividing general and administrative expenses by ship days for the relevant time period.
8. Commercial Ship days: We define commercial ship days as the total of Ship days and the aggregate number of days during the period for which we have each vessel in our commercial fleet under our management. Commercial ship days are an indicator of the size of our owned and managed fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
9. G&A expenses basis commercial days: is calculated by dividing running general and administrative expenses by commercial ship days for the relevant time period.

Condensed Consolidated Balance Sheets (Unaudited)  
(In thousands of U.S. Dollars)  

Condensed Consolidated Statement of Cash Flows (Unaudited) 
(In thousands of U.S. Dollars)                                                     

About Pioneer Marine Inc.

Pioneer Marine is a leading ship owner and global drybulk handysize transportation service provider. Pioneer Marine currently owns sixteen Handysize vessels and is commercial manager of seven Handysize vessels.

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further 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 were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydock and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors.

Contact:
Pioneer Marine Inc.
Torben Janholt CEO
+45 21 639 232, +30 212222 3750

Investor Relations / Media
Capital Link, Inc.
Kevin Karlis
+212 661 7566
pioneermarine@capitallink.com