Performance Shipping Inc. Extends Time Charter for M/T P. Monterey at US$28,000 Per Day for Twelve Months

Rhea-AI Summary

Performance Shipping (NASDAQ: PSHG) has extended its time charter contract with ST Shipping & Transport, a Glencore subsidiary, for the M/T P. Monterey Aframax tanker. The contract extension features a gross charter rate of US$28,000 per day for twelve months (+/- 30 days), commencing mid-January and expected to generate approximately US$9.38 million in gross revenue.

The company's secured revenue backlog now stands at US$62 million, or US$232 million including contracts for three Aframax LR2 newbuildings. The fleet currently consists of six vessels under time charter arrangements and one vessel in spot market pool participation. Two more vessels are expected to be redelivered from period charters in the coming months.

Positive

• Secured US$9.38 million gross revenue from 12-month charter extension
• Strong total revenue backlog of US$62 million, expanding to US$232 million with newbuildings
• High fleet utilization with 6 out of 7 vessels on time charter contracts

Negative

• None.

Insights

Maritime Financial Analyst

Performance Shipping has secured a strategic time charter extension that reinforces its financial stability and market position. The $28,000 per day rate for the M/T P. Monterey represents a solid fixture in the current market environment, providing steady cash flow visibility for the next twelve months. The deal's significance is amplified by the charterer's identity - ST Shipping, a Glencore subsidiary, which adds a layer of counterparty security given Glencore's strong credit profile and global presence in commodity trading.

The extension contributes to an impressive secured revenue backlog of $62 million, which expands to $232 million when including the company's forward-looking strategy with three Aframax LR2 newbuildings. This substantial backlog provides excellent visibility on future cash flows and demonstrates the company's successful execution of a balanced fleet deployment strategy. With 6 out of 7 vessels now under time charter arrangements, Performance Shipping has effectively created a buffer against spot market volatility while maintaining some exposure to potential upside through one vessel in the spot pool.

The charter extension's timing aligns well with the company's strategic outlook, especially considering their expectation of two vessel redeliveries in the coming months. This positions them to potentially capture higher rates if market conditions improve. The $9.38 million in gross revenue from this single charter provides a stable foundation for the company's operating cash flow, particularly important for a smaller-cap shipping company with a market capitalization of around $22 million.

ATHENS, Greece, Jan. 22, 2025 (GLOBE NEWSWIRE) -- Performance Shipping Inc. (NASDAQ: PSHG), (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, today announced that, through a separate wholly-owned subsidiary, it has extended the time charter contract with ST Shipping & Transport Pte Ltd., a wholly-owned subsidiary of Glencore (“ST” or the “Charterer”), for the 2011-built, 105,525 dwt Aframax tanker vessel, M/T P. Monterey. The gross charter rate will be US$28,000 per day for a period of twelve months +/- 30 days at the option of the Charterer. This charter commenced in mid-January and will generate approximately US$9.38 million of gross revenue for the minimum duration of the charter.

Commenting on this charter, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:

“We are pleased to announce the direct continuation of the previous time charter contract with ST, a testament to our strong, long-standing partnerships and repeat business with reputable and creditworthy counterparties. This charter also increases our current secured revenue backlog to approximately US$62 million, or US$232 million when including the 5-year contracts for our three Aframax LR2 newbuildings. Our fleet deployment now consists of six vessels operating under time charter arrangements and one vessel trading in the spot market through pool participation. Looking ahead, we remain constructive on the tanker market as we expect the redelivery of two more vessels from their period charters in the coming months.”

About the Company

Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of tanker vessels. The Company employs its fleet on spot voyages, through pool arrangements and on time charters.

Cautionary Statement Regarding 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, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessels we have agreed to acquire, future market conditions and the prospective financing and employment of our vessels. The words “believe," “anticipate," “intends," “estimate," “forecast," “project," “plan," “potential," “will," “may," “should," “expect," “targets," “likely," “would," “could," “seeks," “continue," “possible," “might," “pending” and similar expressions, terms or phrases may 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, but are not limited to: the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker shipping industry, changes in the supply of vessels, changes in worldwide oil production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs, our future operating or financial results, availability of financing and refinancing including with respect to vessels we agree to acquire, 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, the length and severity of epidemics and pandemics, including COVID-19, and their impact on the demand for seaborne transportation of petroleum and other types of products, changes in governmental rules and regulations or actions taken by regulatory authorities, general domestic and international political conditions or events, including “trade wars”, armed conflicts including the war in Ukraine and the war between Israel and Hamas or related regional conflicts, the imposition of new international sanctions, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events, vessel breakdowns and instances of off-hires and other important factors. Please see our filings with the US Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

FAQ

What is the daily charter rate for PSHG's M/T P. Monterey vessel in 2025?

The M/T P. Monterey has been chartered at US$28,000 per day for a twelve-month period starting mid-January 2025.

How much revenue will PSHG generate from the M/T P. Monterey charter extension?

The charter extension will generate approximately US$9.38 million in gross revenue for the minimum duration of the charter.

What is Performance Shipping's (PSHG) current secured revenue backlog?

PSHG's current secured revenue backlog is approximately US$62 million, or US$232 million when including the 5-year contracts for three Aframax LR2 newbuildings.

How many ships does PSHG have on time charter vs spot market in January 2025?

PSHG has six vessels operating under time charter arrangements and one vessel trading in the spot market through pool participation.