Performance Shipping Inc. Expands Revenue with New Charter Deal

Performance Shipping Inc. Secures Major Charter Agreement

Performance Shipping Inc. (NASDAQ: PSHG), a prominent name in global shipping, has made waves in the maritime industry with a recent announcement regarding its new 21-month time charter contract. This deal has been inked for their Aframax tanker, the M/T Blue Moon, reflecting the company's proactive approach to securing revenue amidst fluctuating market conditions.

Details of the Charter Agreement

The company disclosed that through a wholly-owned subsidiary, it has partnered with American Eagle Tankers (AET), a subsidiary of MISC Group, for this charter opportunity. The M/T Blue Moon, a well-built Aframax tanker from 2011, will be leased at a gross daily rate of approximately US$28,000. The charter is set to start at the beginning of next month and is flexible to extend by +/- 15 days depending on the Charterer's needs.

Financial Projection from the Charter

This charter is significant as it is anticipated to contribute about US$17.4 million in gross revenue during its minimum duration. Such partnerships are crucial, especially during times of shifting demand in the shipping market, as they help ensure steady cash flows for the company.

CEO's Remarks on Future Collaborations

Andreas Michalopoulos, the Chief Executive Officer of Performance Shipping Inc., expressed enthusiasm about this collaboration with AET. He emphasized the confidence that major charterers have in Performance Shipping and how this charter enhances their revenue backlog to roughly US$59.4 million. Moreover, when considering their upcoming three new vessels, the total revenue backlog reaches an impressive US$169.8 million.

Long-Term Value Commitment

Michalopoulos noted that securing this charter is a strategic move to navigate the unpredictable waters of the shipping industry. The company’s commitment to long-term value creation positions them advantageously for sustained growth in a challenging economic climate.

Understanding Performance Shipping Inc.

Performance Shipping Inc. prides itself on being an established provider of shipping services, focusing on tanker vessels. Their approach integrates operating their fleet through various agreements, including spot market operations and time charters, which allows for flexibility and responsiveness to market demands.

Market Dynamics and Company Strategy

Globally, the shipping industry has faced numerous challenges, including fluctuations in oil prices and global trade conditions. Performance Shipping’s strategy to secure contracts like the one with AET is a testament to their ability to adapt to market changes while focusing on profitability. The integration of modern vessels like the M/T Blue Moon enhances their competitive edge.

Challenges and Opportunities Ahead

While the charter agreement signals a positive development, the company remains aware of the myriad of factors that can impact its operations. These include fluctuating economic conditions, changes in oil demand, and increased operational costs.

Commitment to Navigating Market Uncertainties

The team at Performance Shipping is continuously assessing the market landscape to mitigate risks and seize opportunities that align with their strategic objectives. Whether through innovative partnerships or enhancing operational efficiencies, their commitment to growth remains strong.

Frequently Asked Questions

What is the duration of the new charter contract?

The charter contract is for a duration of 21 months, with potential extensions of +/- 15 days at the option of the Charterer.

What revenue is expected from the charter of M/T Blue Moon?

Performance Shipping Inc. anticipates generating approximately US$17.4 million from this charter during its minimum duration.

Who is the Charterer for this agreement?

The charter has been signed with American Eagle Tankers, a member of MISC Group.

What impact does this charter have on the company's revenue backlog?

This charter significantly increases the revenue backlog to about US$59.4 million, with future potential revenues from new builds contributing to a total of US$169.8 million.

How does Performance Shipping Inc. adapt to market challenges?

The company constantly assesses market dynamics and engages in strategic partnerships like this one to navigate uncertainties while focused on long-term value creation.

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