Performance Shipping (US:PSHG)2024-03-28 13:32Financial Performance - For the year ended December 31, 2023, the company reported revenue of $108.938 million, a significant increase from $75.173 million in 2022, representing a growth of 45.3%[356]. - Revenue for 2023 amounted to $108.9 million, a 44.8% increase from $75.2 million in 2022, driven by higher average time charter equivalent rates and increased fleet utilization[389]. - Net income from continuing operations for 2023 was $69.4 million, up 91.2% from $36.3 million in 2022, attributed to fleet size increase and improved vessel utilization[388]. Operational Efficiency - The Time Charter Equivalent (TCE) rate for 2023 was $36,954, up 24.9% from $29,579 in 2022, indicating improved daily earnings from vessels[356]. - Fleet utilization improved to 98.7% in 2023, compared to 96.8% in 2022, reflecting enhanced efficiency in vessel employment[356]. - Daily operating expenses increased to $7,537 in 2023 from $6,683 in 2022, marking a rise of 12.8%[356]. - Ownership days increased to 2,901 in 2023, up from 2,069 in 2022, indicating fleet expansion and increased operational capacity[356]. - Voyage expenses decreased significantly to $4.4 million in 2023 from $14.9 million in 2022, primarily due to vessels operating under time charter agreements[390]. Cost Management - The company incurred total voyage expenses of $4.358 million in 2023, a decrease from $14.861 million in 2022, suggesting improved cost management[356]. - Vessel operating expenses increased to $21.9 million in 2023 from $13.8 million in 2022, with daily operating expenses rising to $7,537 from $6,683[391]. - Interest and finance costs increased to $9.6 million in 2023 from $4.0 million in 2022, driven by higher loan interest rates averaging 7.60% compared to 4.85% in 2022[395]. Asset Valuation - The company has not recorded any impairment charges for its vessels in 2023, 2022, and 2021, indicating stable asset valuations[370]. - The company has determined that there were no indications of potential impairment for any of its vessels for the years 2023 and 2022[385]. - The total carrying value of all vessels was $203.9 million as of December 31, 2023, down from $238.2 million in 2022[373]. - As of December 31, 2023, the aggregate carrying value of all vessels exceeded their aggregate charter-free market values by approximately $98.7 million, compared to $119.9 million as of December 31, 2022[371]. Financing and Debt - As of December 31, 2023, the company's aggregate outstanding debt was $55.2 million, which may impact future financing costs[364]. - The company was in compliance with all loan covenants as of December 31, 2023[431]. - The company entered into a shipbuilding contract for a product/crude oil tanker with a gross contract price of $63.3 million, expected delivery by the end of October 2025[433]. - Two additional shipbuilding contracts were signed for two LNG-ready LR2 Aframax product/crude oil tankers at a gross purchase price of $64.8 million each, with expected deliveries in January and April 2026[434]. Market Conditions - Global crude oil demand increased by 2.3% in 2023 and is projected to rise by 1.5% in 2024, reaching 102.8 million barrels per day[437]. - Crude Aframax dwt demand is projected to increase by 2.3% in 2024, supported by recovering crude oil demand from China and other developing regions in Asia[438]. - The ongoing war in Ukraine has caused volatility in the tanker market, but as of December 31, 2023, the company's financial results have not been adversely affected[442]. Currency and Inflation Impact - Approximately 46% of general and administrative expenses and 15% of operating expenses were incurred in currencies other than the U.S. dollar in 2023, primarily in Euros[569]. - The company has not engaged in derivative instruments to hedge currency fluctuations, as Euro expenses represented 6% of revenues in both 2023 and 2022[570]. - Elevated inflation and interest rate increases are impacting the company's operating expenses due to global price pressures[444]. - The company expects tighter monetary policy and potentially higher long-term interest rates to drive a higher cost of capital[444].