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Hot Stock under Consideration: Pyxis Tankers Inc. (NASDAQ: PXS)

Ruby Warren

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On Friday, Shares of Pyxis Tankers Inc. (NASDAQ: PXS) inclined 2.56% to $1.20. The stock opened its trade at $1.20 and after floating in a price range of $1.17 to $1.20; the stock grabbed the investor’s attention and traded 51,336 shares as compared to its average daily volume of 194.74K shares. The stock’s institutional ownership stands at 0.40%.

Pyxis Tankers Inc. (NASDAQ Cap Mkts: PXS), an emerging growth pure play product tanker company, recently declared unaudited results for the three months ended March 31, 2018.

Results for the three months ended March 31, 2017 and 2018:

For the three months ended March 31, 2018, we stated a net income of $0.60M, or $0.03 basic and diluted earnings per share, contrast to a net loss of $1.70M, or $0.09 basic and diluted loss per share, for the same period in 2017. The improvement in our net result in the first quarter of 2018 was mainly because of the gain from debt extinguishment of $4.30M, partially offset by the non-cash vessel impairment charge of $1.50M ($0.07 per share) related to the write down of the carrying amount of Northsea Alpha and Northsea Beta to their fair values. Our Adjusted EBITDA was $0.10M, representing a decrease of $0.30M from $0.40M for the same period in 2017.

Management’s Negotiation and Analysis of Financial Results for the Three Months ended March 31, 2017 and 2018 (Amounts are presented in million U.S. dollars, rounded to the nearest one hundred thousand, except as otherwise noted)

Voyage revenues: Voyage revenues of $6.60M for the three months ended March 31, 2018, represented a decrease of $1.10M, or 13.7%, from $7.60M in the comparable period in 2017. The decrease in gross voyage revenues during the first quarter of 2018 was related to a decrease in total operating days attributed to increased idle days between voyage charter employments.

Voyage related costs and commissions: Voyage related costs and commissions of $2.10M for the three months ended March 31, 2018, represented a decrease of $0.90M, or 29.8%, from $2.90M in the comparable period in 2017. The decrease was mainly attributed to lower spot charter activity, which incurs voyage costs.

Vessel operating expenses: Vessel operating expenses of $3.30M for the three months ended March 31, 2018, represented a boost of $0.30M, or 11.3%, from $3.00M in the comparable period in 2017. The increase was mainly attributed to certain unplanned repairs performed in one of the vessels in our fleet.

General and administrative expenses: General and administrative expenses of $0.70M for the three months ended March 31, 2018, represented a decrease of $0.10M, or 13.3%, from $0.80M in the comparable period in 2017. The decrease in general and administrative expenses was mainly attributed to improved cost efficiencies.

Amortization of special survey costs: Amortization of special survey costs of less than $0.10M for the three-month period ended March 31, 2018, remained relatively stable contrast to the comparable period in 2017.

Depreciation: Depreciation of $1.40M for the three months ended March 31, 2018, remained flat contrast to the three-month period ended March 31, 2017.

Vessel impairment charge: Vessel impairment charge of $1.50M (non-cash) for the three months ended March 31, 2018, relates to the write down of the carrying amount of Northsea Alpha and Northsea Beta to their fair values. There was no such charge recorded in the comparable period in 2017.

Bad debt provisions: Bad debt provisions of $0.10M for the three months ended March 31, 2018, represented a boost in doubtful trade accounts receivable.

Gain from debt extinguishment: Gain from debt extinguishment of $4.30M for the three months ended March 31, 2018, relates to the refinancing of existing indebtedness of Secondone, Thirdone and Fourthone with a new 5-year secured term loan. About $4.30M was written-off by the previous lender at closing, which was recorded as gain from debt extinguishment in the first quarter of 2018. There was no such gain recorded in the comparable period in 2017.

Interest and finance costs, net: Interest and finance costs, net, of $0.90M for the three months ended March 31, 2018, represented a boost of $0.20M, or 24.7%, from $0.70M in the comparable period in 2017. The increase was mainly attributed to the increase of the LIBOR-based interest rates applied to our outstanding bank debt, as well as the write-off of the unamortized deferred financing costs following the refinancing and extinguishment of the existing indebtedness of Secondone, Thirdone and Fourthone.

Liquidity, Debt and Capital Structure:

Following our loa contracts, as of March 31, 2018, we were required to maintain minimum liquidity of $4.90M. Total cash and cash equivalents, counting restricted cash, aggregated to $6.30M as of March 31, 2018.

PXS has a market value of $23.90M while its EPS was booked as $-0.16 in the last 12 months. The stock has 19.92M shares outstanding. In the profitability analysis, the company has gross profit margin of 27.30% while net profit margin was -10.20%. Analyst recommendation for this stock stands at 2.00.

I am Ruby Warren and I give “IRN Post” an insight into the most recent news hitting the “Services” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicize valuable information for shareholder community.

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