ATHENS - Performance Shipping Inc. (NASDAQ: PSHG), a global shipping company specializing in the ownership of tanker vessels, has entered into a time charter contract with Trafigura Maritime Logistics Pte Ltd for one of its Aframax tankers, the company announced today. The contract pertains to the M/T P. Aliki, a 105,304 dwt LR2 Aframax tanker built in 2010.
The charter agreement stipulates a minimum duration of four and a half months and allows for an extension up to six months and 25 days at the discretion of the charterer, Trafigura. The gross charter rate is set at $47,000 per day for the initial period, escalating to $48,500 per day for any extension period up to the maximum redelivery date. The charter is slated to commence around June 16, 2024, and is anticipated to generate roughly $6.4 million in gross revenue for the minimum charter period.
Andreas Michalopoulos, CEO of Performance Shipping, expressed satisfaction with the new contract, highlighting the company's ongoing relationship with Trafigura, a regular client for their vessels. Michalopoulos pointed out that the agreement allows the company to secure a fixed income in the short term at an advantageous rate, while also keeping the vessel available for potentially higher-earning spot market opportunities during the typically stronger fall and winter seasons.
Performance Shipping Inc. operates its fleet across various arrangements, including spot voyages, pool participation, and time charters. The company's strategic approach aims to balance fixed revenue streams with the flexibility to capitalize on market fluctuations.
This news is based on a press release statement and reflects the company's current business dealings and projections. It should be noted that forward-looking statements are subject to various assumptions and uncertainties, and actual results may differ from those projected.
In other recent news, Performance Shipping Inc. has secured significant charter deals that are expected to bolster its revenue. The company inked a new $28.7 million charter agreement with Aramco (TADAWUL:2222) Trading Fujairah FZE for its Aframax tanker, the M/T Briolette. This deal follows a previous two-year charter with Aramco and is set to generate approximately $28.7 million in gross revenue for the minimum scheduled period.
Moreover, Performance Shipping has also entered into time charter contracts for three newbuilding LR2 Aframax tanker vessels with Clearlake Shipping Pte Ltd, a subsidiary of Gunvor Group. These contracts are expected to yield a gross charter rate of $31,000 per day per vessel during the initial five-year period, contributing to an estimated gross revenue of approximately $169.8 million.
These developments have increased Performance Shipping's contract backlog to $228.1 million and its fixed revenue backlog to roughly $211.4 million. The company's CEO, Andreas Michalopoulos, expressed optimism about securing higher charter rates if current market conditions persist. These are just some of the recent developments at Performance Shipping Inc.
InvestingPro Insights
Performance Shipping Inc. (NASDAQ: PSHG) has demonstrated financial prudence by holding more cash than debt on its balance sheet, a reassuring sign for investors looking for stability in the volatile shipping industry. With a market capitalization of $28.34 million USD, the company's strategy to secure fixed income through time charter contracts, such as the recent agreement with Trafigura Maritime Logistics, aligns with its impressive gross profit margins, which were reported to be 75.22% over the last twelve months as of Q1 2024.
InvestingPro Tips for PSHG indicate that the company is trading at a low Price / Book multiple of 0.12, which could suggest that the stock is potentially undervalued relative to its assets. Moreover, PSHG has seen a strong return over the last three months, with a price total return of 30.8%, showcasing the company's recent positive performance in the market.
For investors considering PSHG, it's worth noting that the company does not pay a dividend, which may influence investment decisions depending on individual strategies and preferences for income-generating assets. Additionally, while analysts anticipate a sales decline in the current year, Performance Shipping Inc.'s profitability over the last twelve months and high return over the last year, which stands at a staggering 208.17%, are factors that could offset concerns regarding short-term sales growth.
For a deeper analysis and more InvestingPro Tips, interested parties can explore the full range of insights available at https://www.investing.com/pro/PSHG. There are 11 additional tips listed in InvestingPro, providing a comprehensive overview of the company's financial health and market performance. To access these insights, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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