OceanPal (OP) - 2024 Q4 - Annual Report

Revenue and Expenses - Vessel revenues increased by $6.74 million, reaching$25.70 million for the year ended December 31, 2024, compared to $18.96 million in 2023, driven by higher average time charter rates and an increase in operating days to 1,747 [360]. - Voyage expenses rose by$1.77 million to $3.71 million in 2024, primarily due to increased commissions and bunker losses from newly acquired vessels [361]. - Vessel operating expenses increased by$2.07 million to $12.49 million in 2024, attributed to higher ownership days and increased repair and maintenance costs [362]. - General and administrative expenses increased by$0.93 million to $6.21 million in 2024, mainly due to higher compensation costs and increased insurance expenses [365]. - The average time charter rates improved due to stronger capesize market conditions during 2024 [360]. - Time charter equivalent (TCE) rate increased to$12,184 for the year ended December 31, 2024, from $9,969 in 2023 [391]. Impairment and Depreciation - Impairment loss for 2024 amounted to$6.12 million, including $5.03 million related to two vessels and$1.08 million for a vessel classified as held for sale [364]. - Depreciation and amortization of deferred charges decreased by $0.47 million to$7.20 million in 2024, due to a change in estimated scrap rates and the classification of a vessel as a current asset held for sale [363]. - The company reported an impairment loss of $5.03 million for two vessels as of December 31, 2024, and an additional impairment loss of$1.09 million for the M/V Baltimore classified as a current asset held for sale [396]. - The carrying value plus unamortized dry-docking and special survey costs for vessels with impairment indicators was $20.1 million and$73.1 million as of December 31, 2024 and 2023, respectively [396]. - The aggregate carrying value of four vessels exceeded their charter-free market value by approximately $2.7 million as of December 31, 2024, compared to$13.1 million for five vessels as of December 31, 2023 [397]. Financial Performance - The company experienced a net loss of $17.86 million in 2024, compared to a net loss of$1.98 million in 2023 [359]. - Loss per share increased to $2.64 in 2024 from$2.02 in 2023 [359]. - Working capital as of December 31, 2024, was $9.02 million, down from$17.76 million in 2023 [380]. - Net cash used in operating activities in 2024 was $3.53 million, a decrease of$4.35 million compared to net cash provided in 2023 [383]. - Net cash used in investing activities during 2024 amounted to $2.52 million, including$18.91 million for the acquisition of M/T Zeze Start [384]. Fleet and Utilization - The fleet size increased, contributing to higher operating days and revenues [360]. - The effective fleet utilization is assumed to be 98% for dry bulk vessels and 97% for product tanker vessels in 2024, based on historical performance [395]. - The average estimated daily time charter equivalent rate for Panamax vessels was $13,250, while the average break-even rate was$12,157 as of December 31, 2024 [402]. Financial Instruments and Currency Exposure - The Company generates all revenues in U.S. dollars, with operating expenses primarily also in U.S. dollars [530]. - Expenses incurred in currencies other than the U.S. dollar are not significant, minimizing exposure to exchange rate fluctuations [530]. - The Company does not engage in derivative instruments to hedge expenses due to the minimal impact of currency fluctuations [530]. Other Financial Information - Support agreement costs for the year ended December 31, 2024, amounted to $6.75 million related to the agreement with Sphinx [366]. - Management fees increased by$0.1 million to $1.34 million for the year ended December 31, 2024, due to an increase in fleet size and ownership days [367]. - A gain of$6.22 million from changes in the fair value of warrant liability was recorded for the year ended December 31, 2023, with no such transactions in 2024 [368]. - Finance costs for the year ended December 31, 2024, were $0.11 million, a decrease from$0.91 million in 2023 [369]. - Interest income decreased by $0.19 million to$0.31 million for the year ended December 31, 2024, compared to $0.50 million in 2023 [370]. - The fair value of the Series C Preferred Stock granted to directors was$2.8 million, based on a valuation from an independent third party [406]. - The M/V Baltimore was measured at a fair value of $18.25 million, less costs to sell, as it was classified as held for sale on April 25, 2024 [407]. - The company’s impairment test is sensitive to variances in time charter rates and utilization rates, with a minimum decrease of 8.6$1.55 million impairment charge [401]. - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring estimates and judgments that may materially impact reported amounts [393]. - The company’s fleet utilization is measured by dividing operating days by available days, reflecting efficiency in vessel employment [5]. - The Company acquired the M/T Zeze Start at a fair value of $27.5 million based on an independent valuation [408]. - As of December 31, 2024, the M/V Melia was impaired to a fair value of$10.36 million [408]. - As of December 31, 2024, the M/T Zeze Start was impaired to a fair value of $25.38 million [408].