Poor Chartering Market Pushes Pyxis Tankers to Loss
Having faced dire conditions in the chartering market, Greek product tanker company Pyxis Tankers suffered a full-year net loss of USD 5.8 million in 2016, compared to a net income of USD 3.5 million seen in 2015.
The decrease in net income was primarily ascribed to a drop in time charter equivalent (TCE) revenues, an increase in general and administrative expenses and a non-cash vessel impairment charge booked in Q4 2016.
“Spot charter rates fell significantly beginning in the second quarter, negatively affecting virtually all product tanker operators, including ourselves… By the end of the third quarter, we only had two of our six tankers on time charters as rates troughed. We consciously made the decision to continue with spot charters, versus booking longer term time charters at depressed rates,” Valentios Valentis, Pyxis Tankers’ Chairman and CEO, commented.
“We were guardedly optimistic that rates would improve late in the fourth quarter… Rates did modestly rebound off a low-point in early October and we renewed the Pyxis Epsilon charter for one year. As of March 1, 2017, we had one vessel on time charter with the balance of our fleet on spot charters,” Valentis added.
In 2016, the company’s TCE revenues amounted to USD 24.1 million, against USD 28.4 million recorded a year earlier.
In addition, adjusted EBITDA stood at USD 7 million in 2016, a decrease of USD 5.1 million from USD 12.1 million posted in 2015.
In its outlook for 2017, Valentis said the chartering environment should be choppy for most of the year. However, the company continues to believe in a longer term improvement starting in 2017 due to a lower number of scheduled deliveries of medium-range tanker (MR) newbuildings, combined with projected solid demand growth.
“As part of our strategic plan, Pyxis Tankers continues to be on the look-out for acquisitions. The long-term economics for the acquisition of a quality second-hand MR2 are even more attractive today with vessel prices substantially below 10-year averages. Unfortunately, the challenge continues to be access to cost-effective capital,” Valentis said, adding that the company would to continue to focus on its mixed chartering strategy.
As of March 1, 2017, Pyxis Tankers’ fleet is comprised of a total of six tankers with an aggregate tonnage of 216,635 dwt.