Monday, May 18, 2020

Pangaea Logistics Solutions Ltd. (PANL)

Unique Business Model Tempers Impact of Challenging Market

Pangaea Logistics Solutions Ltd and its subsidiaries provide seaborne drybulk transportation services. It transports drybulk cargos including grains, coal, iron, ore, pig, iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone. The firm's services include cargo loading, cargo discharge, vessel chartering, voyage planning and technical vessel management. The company derives all of its revenues from contracts of affreightment, voyage charters and time charters. Its strategy depends on focusing on increasing strategic contracts of affreightment, expanding capacity and flexibility by increasing its owned fleet and increasing backhaul focus and fleet efficiency.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A challenging quarter, but unique and consistent business model delivered TCE rate outperformance. In a challenging dry bulk market environment, the unique business model once again delivered positive operating results. Adjusted 1Q2020 EBITDA of $2.9 million was below our estimate of $6.1 million mainly due to warmer weather that limited ice class demand in the Baltic Sea and hedging losses in the $2.5 million range, mainly on fuel.

Adjusting 2020 EBITDA estimate to reflect current dry bulk market weaknessand near term uncertainty. While we remain convinced that a recovery is ahead in the second half of the year, similar to last year, we are taking a more conservative stance amid the current uncertainty. As a result, our EBITDA estimate moves down to $30.1 million, down from our previous estimate of $47.1 million, based on lower TCE rates of $12,179 (down from $13,423/day), which more than offset higher shipping days of 18,104 (up from 16,760), and...

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report.  NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.