2014-Q2 Results posted on website – Initiated Bi-annual Commentary


Management report

Note: FY-2013 is audited by PWC, quarterly data is not.


BALANCE SHEET (at end of period) FY 2013 (audited) 2014/Q1 (unaudited) 2014/Q2 (unaudited)
(USD thous.) (USD thous.) (USD thous.)
Total Current Assets 10,946 21,206 23,424
Total Fixed Assets 38,031 57,232 56,706
Total Assets 48,977 78,438 80,130
Total Current Liabilities 1,080 2,572 5,005
Total Non-Current Liabilities 0 16,153 15,447
Total Liabilities 1,080 18,725 20,452
Shareholders Equity (Book NAV) 47,897 59,713 59,678
INCOME STATEMENT (during quarter) FY 2013 (audited) 2014/Q1 (unaudited) 2014/Q2 (unaudited)
(USD thous.) (USD thous.) (USD thous.)
Operating Revenue 5,642 5,487 5,972
Minus: Voyage Expenses -3,470 -2,269 -1,655
Minus: Commissions -266 -274 -145
TCE Earnings (net) 1,906 2,944 4,172
Opex -2,072 -1,334 -2,914
G+A Expences -368 -139 -70
Other Income/Expense 5 8 -8
EBITDA -529 1,479 1,180
Interest & Finance Expences -10 -75 -269
Depreciation & Amortisation -564 -526 -1,007
Net Income -1,103 878 -96
Important Note: Strident Force and Darko King not included in the 31/3/14 consol. Income statement
CASH FLOW STATEMENT (during quarter) FY 2013 (audited) 2014/Q1 (unaudited) 2014/Q2 (unaudited)
(USD thous.) (USD thous.) (USD thous.)
Net Income -1,103 878 -96
Depreciation & Amortisation 564 534 1,027
Changes in current assets (receivables, etc) -4,493 -887 530
Changes in current liabilities (payables, etc) 1,080 130 1,465
Net Cash generated from operating activities -3,952 655 2,926
Cashflow from Investing Activities -38,595 -18,613 -191
Increase/decrease of Debt (net) 0 17,250 -933
Increase/decrease of paid-in capital (net) 49,000 11,000 0
Net Increase in Cash & Cash Equivalents 6,453 10,292 1,802
Cash at Beginning of Period 0 6,453 16,745
Cash at End of Period 6,453 16,745 18,547
STATISTICS (during quarter) FY 2013 (audited) 2014/Q1 (unaudited) 2014/Q2 (unaudited)
Average # of Ships Owned during Period 1.4 2.0 4.0
Average Age of Fleet at end of Period 9.7 12.8 13.0
ShipYears Left*1 26.6 46.9 45.9
Fleet Valuation ($mill)*2 45.5 68.7 65.3
Leverage 0.0% 25.8% 27.2%
Market NAV ($mill) *3 51.6 65.4 64.0
Share capital ($mill) 49.0 60.0 60.0
Book NAV per 1000 usd invested ($) 977.5 995.2 994.6
Market NAV per 1000 usd invested ($) 1,054 1,091 1,066
Average TCE per Ship 8,145 16,176 11,462
Average Opex per Ship ($/pd) 8,855 7,330 8,005
Average G&A per Ship ($/pd) 1,573 764 192
Cashflow TCE Breakeven per Ship 10,449 8,462 8,959
Income Statement TCE Breakeven per Ship 12,859 11,352 11,725
Ownership Days (average) 166 91 91
Available Days (average) 155 91 77
Operating Days (average) 146 91 76
*1 Assumed 26 yrs for LPG’s and 20 for Tankers *2 Basis on www.vesselsvalue.com *3 Market values are calculated as follows: In the event that the online VesselsValue platform (VV) shows higher values than our books (BV) we account half of that premium, otherwise we account for the full difference if VV is lower than BV.


General Quarterly News: 
  • At the end of the previous quarter Q1/2014 two more LPG vessels were added in PGC’s fleet, i.e. PGC Strident Force (6500cbm Semi-Ref LPG built 1999) and PGC Darko King (6500cbm Fully-Press LPG built 1997), delivered in 12 and 17 March respectively.
  • The Vessels come with employment back to sellers Carib LPg, a subsidiary of Petredec for 3 years at 370 to 390,000 USD/Month (depending on Oil Major approvals status) and 1 year at 320,000 USD/Month, gross respectively. There is an initial discount period of two months.
  • The above vessels were added to the fixed assets of our Q1 consol Balance Sheet but were not included in that period’s Income Statement as they operated for only a few days. Their operating performance however was incorporated in Q2 financial results.
  • PGC Strident Force was drydocked, without preparation, to address immediate serious technical issues in May-June 2014 staying offhire for approx. 45 days, resulting to a net loss of $420k, affecting negatively our consol P&L earnings. A lower initial rate of 300,000 $/month, as well as relatively high operating costs incurred during the DD (see more details below), contributed also to the above negative result.
More specifically:  PGC Marina
  • The vessel was admitted in Penfield’s pool in March 2014 and her performance has been in line with our projections, with a TCE of approx. 16,500 $pd net, which is about 2,000 $pd more than current time charter levels.
  • YTD Operating expenses stand at approx. 9,100 $/pd that is in line with our budget. Nevertheless, standalone Q1 opex stood below budget at 8,673 $/d, whereas in Q2 opex increased to 9,478 $/pd resulting to a difference of $81k between the 2 periods.
PGC Aratos
  • The vessel has been trading in Gaschem/Gasmare’s pool since January 2014, whose performance is somewhat lower than the anticipated one resulting to a TCE of 480k/month (compared to the budgeted $500k/month).
  • Operating expenses have considerably increased in Q2/2014 by 1,779 $/day, that is from 5,988 $/pd average in Q1 (in line with budget) to 7,767 $/pd in Q2, that is approx. $170k in absolute numbers. This increase can be mainly attributed to the following reasons:
    • Stores/supplies:  Increased by 60k in Q2/2014 because the vessel has received a lot of engine and deck stores’ supplies within this period, especially during March-April when vessel was in Piraeus.
    • Maintenance & repairs: Increased by 77k in Q2/2014, mainly due to the fact that both engine and navaids repairs & spares have showed a considerable adverse variance, as well as vetting inspections costs.
PGC Strident Force
  • Trading and Drydocking: Strident Force (ex. Newmarket 1) was delivered on March 12th 2014 and entered into a TC with Caribs LPG Trading, a subsidiary of Petredec. The vessel however carried out an extensive DD during May/June 2014 being approx.. 45 days offhire, which had a considerable impact on PGC’s consol income statement. It should be noted that during its first voyages, the vessel has been employed at a lower rate (ie 300k/month instead of 390k).
  • Operating expenses: They were found to be 6,100 $/pd, that is approx. 560 $/pd above budgeted levels, mainly because of high technical costs and stores. A number of engine and deck stores have been delivered especially during May-June when vessel was being dry-docked and repaired in Mexico.
PGC Darko King
  • Trading: Darko King (ex. Aintree) was delivered on March 17th 2014 and entered into a TC with Caribs LPG Trading, a subsidiary of Petredec. During its first voyages, the vessel has been employed at a lower rate (250k/month instead of 320k).
  • Operating expenses: They stood at 5,900 $/pd, that is approx. 800 $/pd above budgeted levels, mainly because of high crew, technical and supplies costs, items that are expected to decrease towards the budgeted levels in the following months.
Other (G&A and financial expenses)
  • Loan expenses: In February 2014, PGC has signed a loan agreement with DVB Bank for $35ml to (re)finance PGC Marina (5.5m) and PGC Aratos (12.25ml), but also
  • FY 2013 audit: In May 2014, the company has released its FY 2013 consol audit, which was carried out by PWC.
  • New vessels: PGC is always looking for new opportunities, inspecting new vessels focusing primarily in the gas market.
  • New Investors: Finally, we are also seeking for new investors, conducting roadshows and presentations to investment brokers and potential investors.
In Summary:
  • PGC’s financial results in Q2/2014 were weaker than our target by approximately 1.3m, mainly attributed to the following factors:
      • S.Force was off-hire for at least 45 days carrying out extensive repairs in Mexico; (loss of approx. 450k based on the discounted TC rate).
      • During Q2/14, S.Force and D.King were employed at discounted rates as per our TCPs with Petredec (loss of approx. 480k).
      • PGC Aratos, S.Force and D.King incurred higher than anticipated opex for reasons explained above (~250k).
      • Q2/2014 financial results incorporated prior quarter’s losses, which were not included in the Q1/2014 FS (~50k).
      • Moreover, Penfield’s and Gasmare’s pool performance was somewhat lower than anticipated (~60k).
Guidance going forward
  • It is anticipated that in Q3 the profit will rise to at or above Q1 levels.
  • We still hope to reach our perpetual quarterly profit target on around 1.25 $m in Q4.