[Q1 2023 Earnings Highlights & Management Commentary](index=1&type=section&id=Q1%202023%20Earnings%20Highlights%20%26%20Management%20Commentary) Performance Shipping Inc. achieved record Q1 2023 net income and EPS, driven by robust tanker market fundamentals and strategic fleet growth [Q1 2023 Financial Highlights](index=1&type=section&id=Q1%202023%20Financial%20Highlights) Performance Shipping Inc. achieved significant financial growth in Q1 2023, with record net income and EPS, primarily due to strong Time Charter Equivalent (TCE) rates in the tanker market | Metric | Q1 2023 | Q1 2022 | Change (YoY) | | :--- | :--- | :--- | :--- | | **Financial Performance** | | | | | Net Income | $15.7 million | ($2.1) million | 855% increase | | Net Income Attributable to Common Stockholders | $4.6 million | ($11.5) million | Significant improvement | | Basic Earnings Per Share (EPS) | $0.68 | ($51.46) | Significant improvement | | Diluted Earnings Per Share (EPS) | $0.55 | ($51.46) | Significant improvement | | Revenue | $29.5 million | $8.6 million | 245% increase | | Net Revenue After Voyage Expenses | $28.0 million | $5.2 million | Significant growth | | **Operating Metrics** | | | | | Average Time Charter Equivalent (TCE) Rate | $41,157 | $12,352 | 233% increase | | Net Cash Flow from Operating Activities | $18.7 million | ($3.9) million | Significant improvement | [CEO Commentary & Strategic Outlook](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Outlook) CEO Andreas Michalopoulos highlighted the sustained strength of tanker market fundamentals, driven by shifting trade patterns and recovering Chinese demand, with the company leveraging market advantages through fleet expansion, renewal, and a $2 million share repurchase program to enhance shareholder value - Tanker market fundamentals remain **strong**, benefiting from shifting trade patterns due to Russian crude oil export sanctions and recovering Chinese demand, which drives longer-haul tanker transportation needs[3](index=3&type=chunk) - The company completed the timely acquisition of **four younger Aframax tankers** in 2022 and signed a contract in Q1 2023 for a newbuild LNG-ready LR2 Aframax vessel for 2025 delivery, aiming for fleet expansion and renewal[4](index=4&type=chunk) - A **$2 million share repurchase program** has been initiated, with 1,518,113 common shares repurchased to date at an average price of **$0.84 per share**, addressing perceived undervaluation[5](index=5&type=chunk) - Currently, **five tankers** operate under time charter contracts with total daily rates ranging from **$23,000 to $45,000**, securing approximately **$54 million** in fixed revenue over their remaining charter periods[4](index=4&type=chunk) [Tanker Market Update for the First Quarter of 2023](index=2&type=section&id=Tanker%20Market%20Update%20for%20the%20First%20Quarter%20of%202023) The Q1 2023 tanker market exhibited robust supply and demand, driven by moderate fleet growth and significant demand increases [Q1 2023 Market Trends](index=2&type=section&id=Q1%202023%20Market%20Trends) The Q1 2023 tanker market showed robust supply and demand, with moderate fleet supply growth and significant demand increases driven by Chinese imports and shifting trade patterns, alongside historically low newbuild orders and substantial year-over-year increases in secondhand vessel values and spot rates, indicating strong market fundamentals | Metric | Q1 2023 | QoQ Change | YoY Change | | :--- | :--- | :--- | :--- | | **Supply Side** | | | | | Tanker Fleet Supply (million DWT) | 681.2 | +0.8% (from 675.5) | +3.4% (from 658.7) | | Newbuild Tanker Contracting Volume (million DWT) | 4.5 | - | - | | Tanker Orderbook to Fleet Ratio | 4.0% | 28-year low | - | | Number of Tankers in Floating Storage (million DWT) | 19.0 | -21.0% (from 23.5) | -23.0% (from 23.4) | | **Demand Side** | | | | | Tanker Demand (billion ton-miles) | Expected 7.5% growth in 2023 | - | - | | Global Oil Consumption (million bpd) | 99.9 | +0.2% (from 99.7) | +1.4% (from 98.5) | | Global Oil Production (million bpd) | 101.3 | +0.1% (from 101.2) | +2.5% (from 98.7) | | OECD Commercial Inventories (million barrels) | 2,808 | +1.5% (from 2,766) | +7.8% (from 2,604) | | **Market Prices & Utilization** | | | | | Aframax Spot Rate (daily average) | $78,764 | -13.4% (from $90,991) | +144.1% (from $32,266) | | 10-Year Old Aframax Vessel Value (million USD) | $50.0 | +11.1% (from $45.0) | +81.8% (from $27.5) | | Crude Tanker Fleet Utilization | 87.3% | -1.0% (from 88.3%) | +13.4% (from 77.0%) | [Market Outlook Disclaimer](index=3&type=section&id=Market%20Outlook%20Disclaimer) The company cautions that the market outlook is based on industry information, data, and estimates, offering no guarantee of future trend continuation or the realization of anticipated developments, as third-party information has not been independently verified, nor is the availability of updated information assured - The market outlook relies on information, data, and estimates from industry sources, with no guarantee of future trend continuation or the realization of anticipated developments[13](index=13&type=chunk) - The company has not independently verified any third-party information, nor has it verified the availability of updated information[13](index=13&type=chunk) [Detailed Financial & Operational Data](index=4&type=section&id=Detailed%20Financial%20%26%20Operational%20Data) This section provides a comprehensive overview of Performance Shipping Inc.'s financial performance and operational metrics [Summary of Selected Financial & Other Data](index=4&type=section&id=Summary%20of%20Selected%20Financial%20%26%20Other%20Data) This section provides a summary of key financial and fleet operational data for Q1 2023 and Q1 2022, including revenue, net income, EPS, fleet size, utilization, and average daily operating metrics | Metric | March 31, 2023 (Unaudited) | March 31, 2022 (Unaudited) | | :--- | :--- | :--- | | **Operating Data (thousand USD)** | | | | Revenue | $29,527 | $8,568 | | Voyage Expenses | $1,540 | $3,380 | | Vessel Operating Expenses | $5,143 | $3,327 | | Net Income / (Loss) | $15,695 | ($2,080) | | Net Income / (Loss) Attributable to Common Stockholders | $4,623 | ($11,478) | | Earnings / (Loss) Per Share, Basic | $0.68 | ($51.46) | | Earnings / (Loss) Per Share, Diluted | $0.55 | ($51.46) | | **Fleet Data** | | | | Average Number of Vessels | 8.0 | 5.0 | | Number of Vessels | 8.0 | 5.0 | | Ownership Days | 720 | 450 | | Available Days | 680 | 420 | | Operating Days (1) | 677 | 400 | | Fleet Utilization | 99.6% | 95.2% | | **Average Daily Results** | | | | Time Charter Equivalent (TCE) Rate (2) | $41,157 | $12,352 | | Daily Vessel Operating Expenses (3) | $7,143 | $7,393 | [UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS](index=7&type=section&id=UNAUDITED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This income statement details the company's revenue, expenses, operating income/loss, other income/expenses, and ultimate net income/loss for Q1 2023 and Q1 2022, along with net income attributable to common stockholders and earnings per share | Metric (thousand USD) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | **Revenue:** | | | | Revenue | $29,527 | $8,568 | | **Expenses:** | | | | Voyage Expenses | $1,540 | $3,380 | | Vessel Operating Expenses | $5,143 | $3,327 | | Depreciation and Amortization of Deferred Charges | $3,688 | $2,013 | | General and Administrative Expenses | $1,662 | $1,508 | | Provision for Credit Losses and Write-Offs | ($16) | $22 | | Foreign Exchange Gain / (Loss) | $30 | ($46) | | **Operating Income / (Loss)** | **$17,480** | **($1,636)** | | **Other Income / (Expenses):** | | | | Interest and Finance Costs | ($3,085) | ($445) | | Interest Income | $348 | $1 | | Change in Fair Value of Warrant Liability | $952 | - | | **Total Other Expenses, Net** | **($1,785)** | **($444)** | | **Net Income / (Loss)** | **$15,695** | **($2,080)** | | Deemed Dividend on Series B Preferred Stock Due to Common Stock Conversion | - | ($9,271) | | Deemed Dividend on Series C Preferred Stock Due to Trigger of Down-Round Provision | ($9,809) | - | | Deemed Dividend on July and August 2022 Warrants Due to Trigger of Down-Round Provision | ($789) | - | | Preferred Stock Dividends | ($474) | ($127) | | **Net Income / (Loss) Attributable to Common Stockholders** | **$4,623** | **($11,478)** | | **Earnings / (Loss) Per Share, Basic** | **$0.68** | **($51.46)** | | **Earnings / (Loss) Per Share, Diluted** | **$0.55** | **($51.46)** | | Weighted Average Common Shares Outstanding, Basic | 6,815,828 | 223,044 | | Weighted Average Common Shares Outstanding, Diluted | 8,763,703 | 223,044 | [UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)](index=7&type=section&id=UNAUDITED%20INTERIM%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20%2F%20%28LOSS%29) This comprehensive income statement indicates that the company's comprehensive income/loss for Q1 2023 and Q1 2022 aligns with net income/loss, with no other comprehensive income items included | Metric (thousand USD) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net Income / (Loss) | $15,695 | ($2,080) | | **Comprehensive Income / (Loss)** | **$15,695** | **($2,080)** | [CONDENSED CONSOLIDATED BALANCE SHEET DATA](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEET%20DATA) This balance sheet provides condensed data on the company's assets, liabilities, and stockholders' equity as of March 31, 2023, and December 31, 2022, showing significant growth in cash and cash equivalents and total stockholders' equity | Metric (thousand USD) | March 31, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Cash, Cash Equivalents, and Restricted Cash | $66,206 | $39,726 | | Advances for Vessel Acquisitions and Other Vessel Costs | $5 | - | | Vessels, Net | $234,026 | $236,607 | | Other Fixed Assets, Net | $65 | $72 | | Other Assets | $13,701 | $16,574 | | **Total Assets** | **$314,003** | **$292,979** | | **Liabilities and Stockholders' Equity** | | | | Long-Term Bank Debt, Net of Unamortized Deferred Financing Costs | $123,490 | $127,675 | | Other Liabilities | $8,381 | $9,599 | | **Total Stockholders' Equity** | **$182,132** | **$155,705** | | **Total Liabilities and Stockholders' Equity** | **$314,003** | **$292,979** | [OTHER FINANCIAL DATA (Cash Flow Summary)](index=8&type=section&id=OTHER%20FINANCIAL%20DATA%20%28Cash%20Flow%20Summary%29) This section summarizes the company's cash flow situation for Q1 2023 and Q1 2022, indicating a shift from negative to positive cash flow from operating activities and a significant increase in cash flow from financing activities | Metric (thousand USD) | Three Months Ended March 31, 2023 (Unaudited) | Three Months Ended March 31, 2022 (Unaudited) | | :--- | :--- | :--- | | Net Cash Provided by / (Used in) Operating Activities | $18,679 | ($3,863) | | Net Cash Used in Investing Activities | ($378) | ($1,161) | | Net Cash Provided by Financing Activities | $8,179 | $3,636 | [Fleet Employment Profile (As of June 21, 2023)](index=5&type=section&id=Fleet%20Employment%20Profile%20%28As%20of%20June%2021%2C%202023%29) This section details Performance Shipping Inc.'s fleet composition and employment status as of June 21, 2023 [Current Fleet Details](index=5&type=section&id=Current%20Fleet%20Details) As of June 21, 2023, Performance Shipping Inc.'s fleet comprises 8 Aframax tankers, with 5 operating under time charter contracts and 3 under pool arrangements, covering both crude oil and product transportation | | Vessel | Year Built | Deadweight Tons (DWT) | Builder | Vessel Type | Charter Type | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Aframax Tankers** | | | | | | | | 1 | BLUE MOON | 2011 | 104,623 | Sumitomo Heavy Industries Marine & Engineering Co., LTD. | Crude Oil | Time Charter | | 2 | BRIOLETTE | 2011 | 104,588 | Sumitomo Heavy Industries Marine & Engineering Co., LTD. | Crude Oil | Time Charter | | 3 | P. KIKUMA | 2007 | 115,915 | Samsung Heavy Industries Co Ltd. | Crude Oil | Pool Arrangement | | 4 | P. YANBU | 2011 | 105,391 | Sumitomo Heavy Industries Marine & Engineering Co., LTD. | Crude Oil | Time Charter | | 5 | P. SOPHIA | 2009 | 105,071 | Hyundai Heavy Industries Co., LTD | Crude Oil | Pool Arrangement | | 6 | P. ALIKI | 2010 | 105,304 | Hyundai Heavy Industries Co., LTD | Product | Time Charter | | 7 | P. MONTEREY | 2011 | 105,525 | Hyundai Heavy Industries Co., LTD | Crude Oil | Time Charter | | 8 | P. LONG BEACH | 2013 | 105,408 | Hyundai Heavy Industries Co., LTD | Product | Pool Arrangement | [Company Information & Legal Disclosures](index=6&type=section&id=Company%20Information%20%26%20Legal%20Disclosures) This section provides essential company information and legal disclaimers concerning forward-looking statements [About the Company](index=6&type=section&id=About%20the%20Company) Performance Shipping Inc. is a global shipping transportation service provider primarily operating through the ownership of tanker vessels, deploying its fleet via various arrangements including spot voyages, pool arrangements, and time charter contracts - Performance Shipping Inc. is a global shipping transportation service provider, focusing on the ownership and operation of tanker vessels[19](index=19&type=chunk) - The company deploys its fleet through various arrangements, including spot voyages, pool arrangements, and time charter contracts[19](index=19&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=6&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section provides a legal cautionary statement regarding forward-looking statements, explaining their definition, identification, underlying assumptions, and various risk factors that could cause actual results to differ materially from expectations, including economic conditions, market fluctuations, operating costs, regulatory changes, and geopolitical events - Forward-looking statements include, but are not limited to, declarations about plans, objectives, strategies, future events, or performance, intended to encourage companies to provide forward-looking business information[20](index=20&type=chunk) - These statements are based on various assumptions that inherently involve significant uncertainties and contingencies, are difficult to predict, and are beyond the company's control, thus offering no guarantee of achieving these expectations[22](index=22&type=chunk) - Risk factors that could cause actual results to differ materially from forward-looking statements include global economic strength, currency and interest rate fluctuations, market conditions (such as charter rates and vessel values), supply and demand changes, oil and gas production and consumption changes, operating expenses, financing availability, government regulations, litigation, geopolitical conditions (e.g., Ukraine conflict, sanctions, trade wars), terrorism, piracy, shipping route disruptions, and vessel breakdowns[23](index=23&type=chunk)

Financial Performance - For the year ended December 31, 2022, the company reported revenue of $75.173 million, a significant increase from $36.491 million in 2021[381]. - Revenue for 2022 was $75.2 million, a 106.0% increase from $36.5 million in 2021[418]. - Net income from continuing operations for 2022 was $36.3 million, compared to a net loss of $10.1 million in 2021, reflecting an improvement of $46.4 million[420]. - Net cash provided by operating activities in 2022 was $33.8 million, a substantial increase compared to a net cash used of $3.1 million in 2021, driven by higher revenues in the tanker shipping industry[437]. Operational Efficiency - Fleet utilization reached 96.8% for the year ended December 31, 2022, up from 85.5% in 2021, indicating enhanced operational efficiency[381]. - Daily operating expenses decreased slightly to $6,683 in 2022 from $6,740 in 2021, demonstrating effective cost management[381]. - The company incurred total voyage expenses of $14.861 million in 2022, down from $19.205 million in 2021, contributing to improved profitability[381]. - Voyage expenses decreased to $14.9 million in 2022 from $19.2 million in 2021, a reduction of 22.4%[423]. Fleet and Capacity - Ownership days increased to 2,069 in 2022 from 1,825 in 2021, indicating fleet growth and increased capacity[381]. - The total carrying value of vessels as of December 31, 2022, was $238.2 million, compared to $125.3 million in 2021[404]. - The aggregate carrying value of four tanker vessels exceeded their aggregate charter-free market values by approximately $119.9 million as of December 31, 2022[400]. - The company has transitioned to a fleet primarily operating on time charters, which provide more predictable cash flows[386]. Debt and Financing - As of December 31, 2022, the company's aggregate outstanding debt was $128.5 million, which will be managed through regular operating and financing activities[393]. - The company expects to make debt amortization payments of $16.5 million and dividends of $1.9 million in the upcoming 12 months[435]. - As of December 31, 2022, the company had $128.5 million of long-term debt outstanding under bank loan facilities, with variable interest rates ranging from 2.35% to 2.85%[444][445]. - The weighted average interest rate of bank loan facilities increased from 2.90% in 2021 to 4.85% in 2022 due to rising LIBOR and SOFR rates[597]. Market Conditions - Global crude oil demand increased by 2.2% in 2022 and is projected to rise by 1.8% in 2023, reaching 101.4 million barrels per day[466]. - The ongoing conflict between Russia and Ukraine has caused significant shifts in crude oil trade patterns, supporting tanker charter rates[469]. - The company's revenues improved in 2022 due to higher OPEC+ production and increased ton mile from sanctions on Russian crude oil exports[473]. Executive Compensation and Personnel - In 2022, the aggregate fees and bonuses for executives amounted to $2.1 million[495]. - Non-executive directors received annual compensation of $30,000 plus expenses, with the chairman receiving $60,000 and committee chairmen receiving an additional $10,000[497]. - The total number of shoreside personnel increased from 25 in 2021 to 30 in 2022, while seafaring personnel rose from 127 in 2021 to 197 in 2022[512]. Risk Factors - The company faces counterparty risk in charter agreements, which could impact financial performance if charterers fail to meet their obligations[387]. - Elevated inflation and interest rate increases are expected to impact operating expenses and the cost of capital for the company[475]. - The company has not yet experienced adverse financial effects from the COVID-19 pandemic or the war in Ukraine as of December 31, 2022[474]. Accounting and Financial Instruments - Time charter revenues are accounted for over the term of the charter as the service is provided, reflecting the company's revenue recognition policy[411]. - The company has not used any derivative instruments for hedging purposes as of the report date[444]. - The company may consider using financial derivatives in the future to mitigate exchange rate risks, although it currently does not engage in such instruments[601].

Financial Performance - For the nine months ended September 30, 2022, net income from continuing operations was $12.5 million, a significant increase from a net loss of $8.1 million in the same period of 2021, reflecting a recovery in the tanker market [20]. - Voyage and time charter revenues for the nine months ended September 30, 2022, amounted to $47.4 million, up 77% from $26.8 million in the same period of 2021 [19]. - Revenue for the nine months ended September 30, 2022, was $47,406,000, a 76.5% increase from $26,844,000 in 2021 [51]. - Operating income for the same period was $14,560,000, compared to an operating loss of $6,710,000 in 2021 [51]. - Net income from continuing operations was $12,465,000, a significant recovery from a net loss of $8,056,000 in 2021 [51]. - Earnings per common share for continuing operations was $0.16, compared to a loss of $1.60 per share in 2021 [51]. - Total net income attributable to common stockholders was $2,595,000, compared to a loss of $7,656,000 in 2021 [51]. - Comprehensive income for the nine months ended September 30, 2022, was $12,465,000, compared to a loss of $7,656,000 in 2021 [51]. Revenue and Expenses - The increase in revenues was attributed to strong demand for crude oil and changes in trading patterns due to sanctions on Russian crude oil exports [20]. - Voyage expenses decreased to $12.0 million for the nine months ended September 30, 2022, down 21% from $15.1 million in the same period of 2021 [19]. - Vessel operating expenses increased to $9.6 million for the nine months ended September 30, 2022, compared to $8.6 million in the same period of 2021, primarily due to increased ownership days following the acquisition of a new vessel [24]. - Daily operating expenses rose to $6,597 for the nine months ended September 30, 2022, compared to $6,273 in the same period of 2021 [6]. - General and Administrative Expenses for the nine months ended September 30, 2022 were $4.7 million, up 9.3% from $4.3 million in the same period of 2021, primarily due to increased bonuses [26]. - Interest and Finance Costs from continuing operations increased to $2.2 million for the nine months ended September 30, 2022, compared to $1.4 million in the same period of 2021, reflecting a rise in average interest rates from 2.91% to 4.28% [28]. Cash Flow and Debt - Net cash provided by operating activities for the nine-month period ended September 30, 2022 was $10.2 million, a significant increase from a cash outflow of $1.3 million in the same period of 2021 [35]. - Net cash used in investing activities rose to $34.8 million for the nine months ended September 30, 2022, compared to $1.8 million in the same period of 2021, mainly due to increased vessel acquisition costs [36]. - Net cash provided by financing activities for the nine months ended September 30, 2022 was $50.6 million, significantly higher than the $5.9 million used in financing activities in the same period of 2021 [37]. - As of September 30, 2022, cash and cash equivalents were $35.5 million, a substantial increase from $9.6 million as of December 31, 2021 [33]. - The company’s total outstanding debt as of September 30, 2022, was $74.1 million [16]. - The total long-term debt of Performance Shipping Inc. was $68,677,000, an increase from $49,898,000 as of December 31, 2021, representing a 37.5% increase [90]. Vessel Operations and Strategy - Fleet utilization improved to 97.3% for the nine months ended September 30, 2022, compared to 84.7% in the same period of 2021 [6]. - The company shifted its vessel employment strategy from spot to pool arrangements, contributing to decreased voyage expenses [23]. - The company operates its fleet through a wholly-owned subsidiary, Unitized Ocean Transport Limited, and has eliminated intercompany transactions in its consolidated financial statements [56]. - For the nine months ended September 30, 2022, revenue from continuing operations totaled $18,719 from spot charters, $1,887 from time charters, and $26,800 from pool charters, compared to $17,486, $8,574, and $784 respectively in 2021 [72]. Future Outlook and Risks - The company expects to fund operations through cash on hand, cash generated from operations, bank debt, and equity offerings in the next twelve months [32]. - The ongoing conflict between Russia and Ukraine has the potential to disrupt the company's business, but currently, none of its contracts have been affected [62]. - The company has not been adversely affected by COVID-19 as of September 30, 2022, although future impacts remain uncertain [61]. - The company continues to evaluate the potential impact of reference rate reform on its financial statements, with no contracts yet changed to a new reference rate as of September 30, 2022 [66]. Shareholder Activities - The Company declared and paid dividends on Series B preferred shares amounting to $496 for the nine months ended September 30, 2022 [112]. - The total number of Series C Preferred Shares issued to Mango was 1,314,792, with an aggregate liquidation preference of $32,870 [113]. - The Company completed an At The Market (ATM) offering, issuing 526,916 common shares and receiving net proceeds of $1,338 during the nine months ended September 30, 2022 [123]. - The underwritten public offering on June 1, 2022, involved 7,620,000 units at a price of $1.05 per unit, resulting in net proceeds of $7,126 [124]. - A direct offering on July 18, 2022, raised approximately $5,271 from the sale of 17,000,000 common shares and warrants at a combined effective purchase price of $0.35 [126].

Financial Performance - For the six months ended June 30, 2022, net income from continuing operations was $1.8 million, a significant improvement from a net loss of $5.9 million in the same period of 2021, reflecting a recovery in the tanker market[26]. - Revenue for the six months ended June 30, 2022, was $25.3 million, an increase of 44.4% compared to $17.5 million for the same period in 2021[52]. - Operating income for the six months ended June 30, 2022, was $2.9 million, compared to an operating loss of $5.0 million for the same period in 2021[52]. - The company reported a net income of $1,790,000, a significant improvement compared to a net loss of $5,500,000 for the same period in 2021[55]. - The company experienced an increase in revenues due to higher spot charter rates attributed to increased OPEC+ production and sanctions on Russian crude oil exports[64]. Revenue and Utilization - Voyage and time charter revenues increased to $25.3 million for the six months ended June 30, 2022, up 45% from $17.5 million in the same period of 2021, driven by improved time charter equivalent rates[28]. - Fleet utilization improved to 97.7% for the six months ended June 30, 2022, compared to 81.5% in the same period of 2021, indicating enhanced operational efficiency[15]. - Time charter equivalent (TCE) rate rose to $18,888 for the six months ended June 30, 2022, compared to $8,667 in the same period of 2021, reflecting favorable market conditions[15]. - Revenue from continuing operations for the six months ended June 30, 2022, amounted to $13,225 from spot charters, $0 from time-charters, and $12,050 from pool charters, compared to $11,441, $5,998, and $74 respectively for the same period in 2021, indicating a significant increase in spot charters revenue by 15.6% and pool charters by 162.2%[76]. Expenses - Voyage expenses decreased to $8.7 million for the six months ended June 30, 2022, down 13% from $10 million in the same period of 2021, primarily due to a reduction in spot charters[29]. - Vessel operating expenses increased to $6.3 million for the six months ended June 30, 2022, up from $5.8 million in 2021, attributed to higher daily operating expenses[30]. - General and administrative expenses rose to $3.3 million for the six months ended June 30, 2022, compared to $3 million in 2021, mainly due to increased bonuses[32]. - The company reported a depreciation and amortization expense of $4,070,000 for the six months ended June 30, 2022, compared to $3,653,000 for the same period in 2021[55]. Cash Flow and Liquidity - Net cash used in operating activities for the six months ended June 30, 2022, was $1.6 million, slightly higher than $1.5 million for the same period in 2021[40]. - Net cash used in investing activities increased to $4.0 million for the six months ended June 30, 2022, from $0.9 million in the same period in 2021, primarily due to vessel acquisitions[41]. - Cash and cash equivalents as of June 30, 2022, amounted to $13.3 million, up from $9.6 million as of December 31, 2021[38]. - Working capital increased to $10.8 million as of June 30, 2022, compared to $4.2 million as of December 31, 2021[37]. - The company has a minimum cash liquidity requirement of $5,000,000 as of June 30, 2022, which was reduced from $9,000,000[93]. Debt and Financing - As of June 30, 2022, the company's aggregate outstanding debt was $51.2 million, reflecting its financing strategy for vessel-specific debt[23]. - The total long-term debt, net of deferred financing costs, amounted to $46,007,000, an increase from $38,208,000 as of December 31, 2021, representing a 20% increase[88]. - The company has secured term loans with Nordea Bank and Piraeus Bank, with total loan facilities of up to $59,000,000 and $31,526,000 respectively, to finance tanker vessel acquisitions[90][91]. - The weighted average interest rate on the company's bank loans for the six months ended June 30, 2022, was 3.25%, compared to 2.92% for the same period in 2021[96]. - Interest expense on long-term bank debt for the six months ended June 30, 2022, was $789,000, a slight decrease from $824,000 in the same period of 2021[97]. Shareholder Activities - The company completed a direct offering of 17 million common shares at $0.35 per share, raising net proceeds of $5.33 million on July 19, 2022[45]. - The total number of common shares outstanding increased to 10,395,030 as of June 30, 2022, from 5,082,726 as of December 31, 2021[53]. - The Company completed an underwritten public offering of 7,620,000 units at a price of $1.05 per unit, receiving net proceeds of approximately $7,126[121]. - The Company suspended its ATM offering in May 2022 after issuing 526,916 common shares and receiving net proceeds of $1,338[119]. Risks and Compliance - The company continues to face counterparty risk, particularly in depressed market conditions, which could impact financial performance[17]. - The company received a notice from NASDAQ regarding non-compliance with the minimum bid price requirement, with a grace period until January 9, 2023, to regain compliance[48]. - The company has not yet experienced adverse financial impacts from COVID-19 as of June 30, 2022, but acknowledges potential future risks[64]. - The ongoing conflict between Russia and Ukraine has created uncertainty, but currently, none of the company's contracts have been affected by these events[65]. Asset Management - The carrying amounts of major classes of assets of discontinued operations as of June 30, 2022, totaled $47, unchanged from December 31, 2021, while total major classes of current liabilities decreased slightly from $120 to $116[73]. - The net book value of vessels as of June 30, 2022, was $120,534, down from $123,036 as of December 31, 2021, due to depreciation[86]. - The allowance for estimated credit losses on outstanding freight and demurrage receivables was $158 as of June 30, 2022, up from $121 as of December 31, 2021, reflecting an increase in expected credit losses[79]. - The maximum aggregate amount of loss due to credit risk from charterers that accounted for more than 10% of revenue was $1,587 as of June 30, 2022, compared to $405 as of December 31, 2021, indicating increased credit risk exposure[78].

March 2022 ® PERFORMANCE Shipping Inc. A Pure - Play Tanker Company Disclosure 2 Matters discussed in this presentation 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 perfor ...

Financial Performance - Revenue for the year ended December 31, 2021, was $36.491 million, compared to $46.283 million in 2020, marking a decline of approximately 21%[347]. - Revenue from continuing operations for 2021 was $36.5 million, a decrease of 13.1% compared to $42.0 million in 2020[385]. - Net loss from continuing operations for 2021 amounted to $10.1 million, compared to a net income of $2.3 million in 2020, primarily due to weaker market conditions in the tankers' industry[387]. - The Time Charter Equivalent (TCE) rate for 2021 was $9,963, a significant decrease from $18,745 in 2020, indicating a decline in daily earnings[347]. - Average time charter equivalent (TCE) rates for tanker vessels decreased to $9,963 in 2021 from $20,228 in 2020[389]. - Daily operating expenses decreased to $6,740 in 2021 from $6,835 in 2020, indicating improved cost management[347]. - General and administrative expenses decreased by 28.8% to $5.7 million in 2021, down from $8.0 million in 2020, due to lower compensation costs and reduced brokerage fees[394]. Fleet and Operations - For the year ended December 31, 2021, ownership days increased to 1,825 from 1,689 in 2020, reflecting a growth in fleet size[347]. - Fleet utilization for 2021 was 85.5%, down from 89.7% in 2020, suggesting reduced efficiency in vessel employment[347]. - Vessel operating expenses rose to $12.3 million in 2021, a 33.7% increase from $9.2 million in 2020, attributed to an increase in the average number of tanker vessels owned[391]. - Voyage expenses from continuing operations increased by 33.3% to $19.2 million in 2021, up from $14.4 million in 2020, mainly due to higher bunker costs[390]. - The company employs its vessels under time and voyage charter contracts, with time charter revenues recognized over the term of the charter as the service is provided[374]. - Under pooling arrangements, the company earns a portion of total revenues generated by the pool, with revenue recognized on a quarterly basis when the vessel has participated in the pool[377]. Future Expectations - The company expects revenues to increase in 2022 with further fleet expansion, despite current market challenges[351]. - Vessel operating expenses are anticipated to rise in 2022 if the fleet expands, influenced by market conditions and operational costs[354]. - General and administrative expenses are expected to remain stable in 2022, reflecting fixed costs associated with public company operations[357]. - The company expects to incur additional capital expenditures for vessel upgrades and surveys, impacting cash flow needs[427]. Financial Position - As of December 31, 2021, working capital was $4.2 million, a decrease from $17.6 million in 2020[403]. - Cash and cash equivalents as of December 31, 2021, amounted to $9.6 million, down from $21.4 million in the previous year[404]. - As of December 31, 2021, the company had $50.2 million of long-term debt outstanding under bank loan facilities[414]. - The outstanding balance on the Piraeus Facility was $25.8 million as of December 31, 2021[424]. Market Conditions - Crude oil demand is projected to return to pre-pandemic levels and increase by 3.4% in 2022, reaching 100.1 million barrels per day[430]. - Crude tanker dwt demand is projected to grow by 7.1% in 2022, while the crude tanker fleet is expected to grow by 3.5%[431]. - The average spot earnings for an Aframax tanker in 2021 was $8,242 per day, compared to $22,161 in 2020, indicating a significant decline in earnings[432]. Depreciation and Impairment - The carrying values of the vessels as of December 31, 2021, were as follows: Blue Moon at $27.5 million, Briolette at $28.6 million, P. Fos at $24.8 million, P. Kikuma at $23.4 million, and P. Yanbu at $21.0 million[370]. - The company estimates the useful life of its tanker vessels to be 25 years and 30 years for container vessels, with depreciation calculated on a straight-line basis[380]. - In 2021, the company did not record any impairment charge, while it recorded an impairment charge of $0.3 million in 2020 for one container vessel classified as held for sale[366]. - The company evaluates the carrying amounts of long-lived assets, including vessels, to determine if impairment losses are required based on future undiscounted net operating cash flows[381]. Currency and Interest Rate Risks - The company generates all revenues in U.S. dollars but incurs over 55% of general and administrative expenses in other currencies, primarily the Euro, in 2021[556]. - Approximately 10% of the company's operating expenses were incurred in currencies other than the U.S. dollar in 2021, compared to 8% in 2020[556]. - The U.S. dollar has depreciated against the Euro since around 2002, increasing the dollar cost of expenses incurred in Euros[556]. - The company has not used financial derivatives to mitigate exchange rate fluctuation risks but may consider doing so in the future[557]. - Currently, the company does not view the risk from exchange rate fluctuations as material to its operations[557]. - The potential increase in expenses incurred in other currencies could expand the company's exposure to currency fluctuation losses in the future[556]. Interest Expenses - Interest expense as of December 31, 2021, amounted to $50.2 million, with expectations for an increase in 2022 due to higher average debt levels[358]. - An average increase of 1% in interest rates in 2021 would have resulted in interest expenses of $2.1 million, an increase of about 31% from $1.6 million[553].

Financial Performance - For the year ended December 31, 2020, ownership days increased to 1,689 from 1,516 in 2019, while operating days excluding ballast leg decreased to 1,258 from 1,401 in 2019[360]. - The Time Charter Equivalent (TCE) rate for the year ended December 31, 2020, was $18,745, up from $15,435 in 2019, reflecting a 21.5% increase[360]. - Voyage and time charter revenues for the year ended December 31, 2020, were $46,283 million, a substantial increase from $26,846 million in 2019[360]. - In 2020, the net income from continuing operations was $2.3 million, a significant improvement from a net loss of $6.8 million in 2019, driven by an increase in the tanker fleet and revenues[402]. - Voyage and time-charter revenues from continuing operations surged to $42.0 million in 2020, up 566.7% from $6.3 million in 2019, due to the full-year contribution of newly acquired vessels[399]. - The company reported a net income of $1.5 million from discontinued operations in 2020, a recovery from a net loss of $25.3 million in 2019[403]. Operational Efficiency - Fleet utilization excluding ballast leg dropped to 74.5% in 2020 from 92.4% in 2019, indicating a significant decrease in operational efficiency[360]. - Daily operating expenses decreased to $6,835 in 2020 from $7,468 in 2019, showing a reduction of approximately 8.5%[360]. - Vessel operating expenses from continuing operations increased to $9.2 million in 2020, compared to $1.1 million in 2019, primarily due to a larger fleet size[408]. - The average daily operating expenses for continuing operations rose to $6,746 in 2020 from $5,968 in 2019, influenced by COVID-19 related disruptions[408]. Debt and Financing - As of December 31, 2020, the company's aggregate outstanding debt was $58.1 million, with expectations for increased interest and finance expenses in 2021 due to higher average debt levels[371]. - Interest and finance costs from continuing operations increased to $2.1 million in 2020, up from $0.7 million in 2019, due to higher average debt levels[418]. - As of December 31, 2020, the company had $58.1 million of long-term debt outstanding under loan facilities[437]. - The outstanding balance on the Piraeus Facility was $30.0 million, drawn down from a total facility of $31.5 million[447]. Asset Valuation and Impairment - The company recorded an impairment charge of $0.3 million for one container vessel in 2020 and $31.6 million for three vessels in 2019 due to their classification as held for sale[378]. - As of December 31, 2020, the aggregate carrying value of five tanker vessels exceeded their aggregate charter-free market values by approximately $31.5 million[379]. - The net book value of the vessels increased from $82.9 million in 2019 to $128.1 million in 2020[382]. - The company evaluates the carrying amounts of vessels to determine if impairment losses are required based on future undiscounted net operating cash flows[393]. Market Outlook - The global crude oil demand is projected to rebound by 6.0% in 2021, following a severe -8.9% drop in 2020[452]. - The total trading Aframax crude tanker fleet is projected to grow by approximately 5.0% in 2021, while crude Aframax fleet capacity is expected to grow by a modest 2.5%[454]. Cash Flow and Liquidity - As of December 31, 2020, cash and cash equivalents amounted to $21.4 million, a decrease from $26.4 million in the prior year[427]. - Net cash provided by operating activities in 2020 was $13.2 million, significantly increasing from a net cash used of $4.2 million in 2019, primarily due to revenue contributions from tanker vessels[429]. - Net cash used in investing activities in 2020 was $40.1 million, which included $63.4 million for the acquisition of three tanker vessels and $23.5 million in net proceeds from the sale of two container vessels[430]. - As of December 31, 2020, the company's working capital was $17.6 million, down from $27.3 million in 2019, indicating a decrease in liquidity[425]. Currency and Risk Management - Approximately 45% of general and administrative expenses were incurred in currencies other than the U.S. dollar in 2020[589]. - The company has historically incurred around 8% of its operating expenses in currencies other than the U.S. dollar in 2020[589]. - The company does not currently consider the risk from exchange rate fluctuations to be material for its results of operations[590]. - The company may consider using derivative financial instruments in the future to manage exposure to interest rate and currency risks[590].