Performance Shipping Inc. Secures 21-Month Time Charter Contract at US$28,000 Per Day for Aframax Tanker, M/T Blue Moon

Rhea-AI Summary

Performance Shipping (NASDAQ: PSHG) has secured a 21-month time charter contract with American Eagle Tankers (AET) for its Aframax tanker vessel, M/T Blue Moon. The contract, starting in January, features a daily rate of $28,000, expected to generate approximately $17.4 million in gross revenue for the minimum charter duration.

The agreement with AET, a MISC Group member, involves the 2011-built, 104,623 dwt vessel. This new collaboration increases the company's secured revenue backlog to $59.4 million for operating vessels and $169.8 million for three new buildings, demonstrating the company's strategy to secure stable income streams in volatile market conditions.

Positive

• Secured 21-month charter contract at $28,000 per day
• Expected gross revenue of $17.4 million from new contract
• Total secured revenue backlog of $59.4 million for operating vessels
• Additional $169.8 million backlog for three newbuildings

Negative

• None.

Insights

Financial Analyst

This time charter contract represents a significant revenue stream for Performance Shipping, with $17.4 million in guaranteed gross revenue over the minimum charter duration. The daily rate of $28,000 is competitive for an Aframax tanker in the current market. The secured revenue backlog of $59.4 million for operating vessels and $169.8 million for newbuildings provides strong visibility on future cash flows. For a company with a market cap of just $22.9 million, these contracts represent substantial value. The partnership with AET, a reputable charterer backed by MISC Group, also reduces counterparty risk. This deal enhances earnings predictability and demonstrates the company's ability to secure favorable long-term contracts in a volatile market.

Market Research Analyst

The 21-month charter agreement reflects ongoing strength in the tanker market and charterers' willingness to lock in rates for extended periods. The contract's timing is strategic, as it provides rate stability through potential market fluctuations. For context, the $28,000 per day rate for a 2011-built Aframax shows solid pricing power, particularly given the vessel's age. The optional period of +/- 15 days provides operational flexibility while maintaining earnings certainty. This contract, combined with the company's existing backlog, positions Performance Shipping well in the tanker sector, where securing quality charterers and stable rates is important for sustainable operations.

ATHENS, Greece, Dec. 18, 2024 (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 entered into a time charter contract with American Eagle Tankers (“AET” or the “Charterer”), a member of MISC Group, for the 2011-built, 104,623 dwt Aframax tanker vessel, M/T Blue Moon. The gross charter rate will be US$28,000 per day for a period of twenty-one (21) months +/- 15 days at the option of the Charterer and is expected to commence at the beginning of January. This charter will generate approximately US$17.4 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 extremely pleased to initiate a new collaboration with AET, a leading global tanker operator, which further underscores the confidence charterers place in us. With this charter, our secured revenue backlog stands at approximately US$59.4 million, based on the minimum duration of each charter for the operating vessels, and US$169.8 million for the three new buildings. By securing this charter, we strengthen our ability to safely navigate through the challenges of a volatile market while reinforcing our commitment to long-term value creation.”

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 Iran, 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 rate for PSHG's new charter contract with AET?

Performance Shipping's new charter contract with AET is set at US$28,000 per day.

How much revenue will PSHG generate from the M/T Blue Moon charter?

The M/T Blue Moon charter is expected to generate approximately US$17.4 million in gross revenue for the minimum duration.

What is PSHG's total secured revenue backlog as of December 2024?

PSHG's total secured revenue backlog is US$59.4 million for operating vessels and US$169.8 million for three newbuildings.

How long is the charter period for PSHG's M/T Blue Moon vessel?

The charter period is twenty-one (21) months +/- 15 days at the charterer's option, starting in January.

What is the size and build year of PSHG's M/T Blue Moon tanker?

The M/T Blue Moon is a 2011-built Aframax tanker with a capacity of 104,623 dwt.