Performance Shipping Inc. Secures Charter Contract with Trafigura for LR2 Aframax Tanker, M/T P. Aliki
Performance Shipping announced a new time charter contract with Trafigura for its 2010-built LR2 Aframax tanker, M/T P. Aliki. The charter runs from June 16, 2024, for a minimum of 4.5 months up to nearly 6 months, with a daily gross rate of $47,000 for the minimum period, rising to $48,500 thereafter. This deal is set to generate around $6.4 million in gross revenue. CEO Andreas Michalopoulos highlighted the strategic benefit of securing short-term fixed revenue while keeping the vessel available for the fall and winter spot market.
- Secured a new charter contract for M/T P. Aliki with Trafigura starting June 16, 2024.
- Guaranteed daily gross charter rate of $47,000 for the minimum period and $48,500 for the extended period.
- Expected gross revenue of approximately $6.4 million for the minimum duration of the contract.
- Maintains a strong relationship with a reputable and creditworthy counterparty, Trafigura.
- Strategic flexibility to capitalize on the promising fall and winter spot market.
- Potential risk if the spot market does not perform as expected in the fall and winter periods.
- Relatively short-term contract which may lead to revenue uncertainty post contract period.
Insights
Performance Shipping Inc. has secured a time charter contract with Trafigura for their Aframax tanker, M/T P. Aliki. This contract is expected to generate
From a financial standpoint, this is positive as it provides predictable revenue, reducing exposure to the volatile spot market. The revenue boost can enhance liquidity and potentially improve the company's quarterly financials. Investors should note this as a stabilizing factor in Performance Shipping's earnings.
However, the short-term nature of the contract means the company will need to secure additional charters to maintain this revenue stream. While lucrative, this does place some pressure to consistently find similar profitable contracts.
This contract with Trafigura highlights Performance Shipping's ability to secure deals with major players in the maritime logistics market. Trafigura's selection of the M/T P. Aliki signifies trust and a strong relationship, which is beneficial for Performance Shipping's market reputation.
For the broader market, this deal underscores the sustained demand for tanker vessels, particularly in the LR2 Aframax category. The rates secured suggest a favorable spot market outlook, particularly for the fall and winter seasons, aligning with historical trends of increased oil transportation demand during these periods.
Investors might find this strategic exposure to both fixed revenue and the spot market advantageous, allowing the company to capitalize on seasonal market strengths while ensuring a baseline income.
ATHENS, Greece, June 06, 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 Trafigura Maritime Logistics Pte Ltd ("Trafigura" or the "Charterer") for the 2010-built, 105,304 dwt LR2 Aframax tanker vessel, the M/T P. Aliki. The charter is for a minimum period of four and a half (4.5) months up to a maximum period of six (6) months and 25 days, at the option of the Charterer. The gross charter rate will be US
Andreas Michalopoulos, the Company's Chief Executive Officer, stated:
"We are pleased to announce our new time charter contract for our M/T P. Aliki, following her performance of spot voyages through pool participation. This contract reflects our solid relationship with reputable and creditworthy counterparties, such as Trafigura, who has regularly employed our vessels, including the M/T P. Aliki, in the past. We believe that our Company has successfully managed to secure short-term fixed revenue at a lucrative charter rate, while also maintaining exposure to the promising spot market during the seasonally strong fall and winter periods, when the M/T P. Aliki is expected to be available for new employment."
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 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, 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
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