Performance Shipping (PSHG)2022-03-11 22:19Financial Performance - Revenue for the year ended December 31, 2021, was 46.283 million in 2020, marking a decline of approximately 21%[347]. - Revenue from continuing operations for 2021 was 42.0 million in 2020[385]. - Net loss from continuing operations for 2021 amounted to 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 18,745 in 2020, indicating a decline in daily earnings[347]. - Average time charter equivalent (TCE) rates for tanker vessels decreased to 20,228 in 2020[389]. - Daily operating expenses decreased to 6,835 in 2020, indicating improved cost management[347]. - General and administrative expenses decreased by 28.8% to 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 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 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 17.6 million in 2020[403]. - Cash and cash equivalents as of December 31, 2021, amounted to 21.4 million in the previous year[404]. - As of December 31, 2021, the company had 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 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 28.6 million, P. Fos at 23.4 million, and P. Yanbu at 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 2.1 million, an increase of about 31% from $1.6 million[553].