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edited transcript of panl earnings conference call or presentation 13-aug-19 12:00pm gmt

by:CNS     2019-11-10
CallNEWPORT August 13, 2019 results (2019)
Thomson StreetEvents)--
On Tuesday, August 13, 2019, at 12:00:00, the editorial record of the earnings conference call or presentation of Pangu Logistics Solutions Co. , Ltd. -Co-
Founder, Chairman and CEO of Gianni DelSignorePangaea Logistics Solutions Co. , Ltd. -
Conference call participants Charles Kennedy flatnoble capital markets
Research Department-
Senior transport and logistics analyst
Introduction of vice president--------------------------------------------------------------------------------Operator [1]--------------------------------------------------------------------------------Good morning.
My name is Stephanie. I\'m your conference operator today.
When welcome everyone to take part in rafting logistics solution two quarter 2019 earnings phone meeting.
The host of our call today is Sir.
Ed Cole, chairman and Chief Executive Officer; and Mr.
Chief financial officer, Jenni DelSignore.
Today\'s call is being recorded and can be replayed from 11: 00 in the morning. m.
Eastern Standard Time
Dial-up is available (800)585-
8367 domestic or (404)537-
3406 International and reference ID number 7487666. (
Operator instructions)
It is now my pleasure to hand over the statement to Sir.
Sean Silva with Prosek Partners.
Please continue. --------------------------------------------------------------------------------
Prosek LLC-Sean SilvaAssociate VP [2]--------------------------------------------------------------------------------
Thank you Stephanie, thank you for attending our second quarter 2019 earnings call this morning for pan continental logistics solutions.
Before I transfer the call to Ed, I would like to read the Safe Harbor Statement.
This meeting can move forward.
Statement in the sense of the Private Securities Litigation Reform Act of 1995 on the logistics solution of Panzhou. Forward-
Forward-looking statements are statements that are not based on historical facts. Such forward-
Forward-looking statements are based on current beliefs and expectations of Pangu logistics solution management and face risks and uncertainties, which may lead to different actual results from forward-looking
Look at the report.
In the Pan-boat logistics solutions document submitted to the Securities and Exchange Commission, these risks are more fully discussed.
In view of such risks, the information provided herein shall be understood.
Pangu logistics solution does not assume any obligation to update the information contained in this conference call.
Also, keep in mind that this call will come with a supplementary slide presentation.
These slides can be in 8-
The K file released last night can be found in the investor section of www. pangaeals.
Com under company filing or on SEC website. gov.
Now, I want to transfer this call to the chairman and CEO of pan Zhou logistics solution. Ed Coll. Ed? --------------------------------------------------------------------------------
Edward Cole, Pangu Logistics Solutions Co. , Ltd. -Co-
[Chairman and CEO of the Board of Directors3]--------------------------------------------------------------------------------
Sean, thank you all, good morning, thank you all for joining us on the phone.
This morning, before transferring the call to our CFO Gianni, I will provide an update on our operations and the market as a whole to provide a more detailed overview of the second quarter\'s finances.
Then we started asking questions.
We would like you to have time to review the press release and the accompanying presentation that we posted last night.
Our strong performance in the second quarter validated our hybrid flexible business model.
Although the macro environment is more challenging, we have maintained a significant advantage in the market.
Our TCE price is lower than last year. over-
Year, still more than the market performance of an industryleading 49%.
This is important not only for the first quarter of the opponent, but we are also considering that the end of the second quarter marks the beginning of our summer ice season, which is the strongest seasonal ice season.
Class fleet provides customers with the professional services they need in demanding conditions.
Although the market is challenging this year, we have begun to see improvements in the past few weeks.
However, we insist on our goodsfirst, client-
We hope that focused business will keep us profitable in any market environment.
In this context, we continue to be active.
In the first quarter, we announced and paid dividends for the first quarter and ordered 2 new ice-
To advance our fleet renewal strategy, the Panama class ships and 2 additional ships were purchased.
All in all, we have created strong momentum in the past year. to-
We expect to build on the second half of this year.
Let me summarize our performance for the quarter now.
Our total income is $83.
Compared with $96, 3 million.
8 million in the second quarter of 2018.
Business revenue is $6.
8 million, $8.
4 million in the second quarter of 2018.
Net income for the quarter was $4 million compared to $5.
8 million in the second quarter of 2018.
I will reiterate that, based on the market situation this quarter, we look at these results very positively.
Finally, we recorded the cash level of $43. 6 million (sic)[$43. 7 million]
By contrast, $56.
1 million at the beginning of 2019.
This is due to the quarterly cash dividends, debt repayments and instalments we paid on the new ship, all of which are positive values --
Strengthen initiatives.
Gianni will provide more details soon.
Turn to other highlights of the quarter.
In the first quarter, we signed a purchase of 2011-
Nantong K building 58,000-
We have a fleet of 22 ships.
The ship we named \"Big friendship\" will be delivered to Pangu in September 2019.
As we approach the new low tonnage, procurement advances our efforts to update our own fleet with high quality and efficient tonnage
Sulfur fuel demand in 2020.
We also delivered in the first quarter of ship 21 \"bulk independence.
We are also pleased with the progress made by the Breton Point Business Centre and the reconstruction project this quarter.
Together with our joint venture partners, we have started the process of transforming the site into a world --
First class logistics support, recently loaded our first item cargo and is expected to ship dry bulk cargo in the second half of 2019.
This reflects our different approach to dry bulk cargo transportation outside the vessel.
Looking ahead, as we enter the summer ice season, we are optimistic about our business. Our ice-
The first-class fleet will be fully deployed at Baffinland trade this quarter.
The market is improving and we continue to push forward the differentiated strategy of maintaining a very professional fleet, supplemented by franchising
In the tonnage fleet, we can dynamically adjust our market share while providing the first
Provide first-class service to our valued customers.
We look forward to further updating your information over the course of the year.
I will now transfer the call to Gianni, who will provide more details on our finances and strategy, after which we will start asking questions. Gianni? --------------------------------------------------------------------------------
Jenni DelSignore, Pangu Continental Logistics Solutions Co. , Ltd. -
Chief Financial Officer and Secretary4]--------------------------------------------------------------------------------
Thank you Ed, and thank you all for joining us on today\'s call.
I will introduce some of the Operational Highlights first and then our financial position.
Our first quarter is the second.
We are pleased to pay dividends to our shareholders.
As you heard me mention on your previous phone call, we have accumulated record cash flow from multiple quarters, and we are pleased that our investors share this success in the form of dividends.
Another theme for this quarter is our prudent capital.
Efficient balance sheet management.
We paid off the last debt of the Nordic Barents ship and the Nordic bosinia ship.
On July, we paid for the last issue of Newport.
So, so far, a total of six ships are in debt.
We see this as an impressive feat that reflects the health and development of our company.
We are also actively investing money in growing new projects to drive long-term development. term growth. On our ice-
We have deposited $7 in the first part.
8 million in this quarter we are committed to expanding our niche ice business, we believe we have a leading market position and we see meaningful future demand and growth opportunities.
We focus on developing expertise in investment assets to expand our platform and increase shareholder value.
With that, I\'ll talk about our financial position now.
Total revenue for the second quarter of 2019 was $83.
Compared with $96, 3 million.
8 million in the second quarter of 2018.
Transport days decreased by 17% to 3,562 days compared to 4,283 in 2018.
Sailing revenue is $77, which is the revenue generated to transport goods for our customers, accounting for 92% of our total revenue.
Compared with $81, 4 million. 8 million.
The decline was due to a decrease in sailing days, particularly 3,228 days, compared to 3,053 days in the quarter, and a decrease in TCE rates, which fell to $12,933 per day in the second quarter compared to $3,728 (sic)[$13,728]
Second quarter of 2018.
Nevertheless, our TCE rates perform better than the wider market because, with our long-term push, we maintain an overall average premium of about $4,268 or 49% per day for market rates
Shipping of goods terms COAs
Dedicated and professional team.
Our unique approach and dynamic business model enable us to maintain an industry-
Leading in various market cycles.
Opportunistic charter revenues linked to market interest rates are declining year by yearover-
Between $15 million and $5.
9 million, driven by 52%-over-
The number of charter days decreased year by year.
Total cost reduction in the second quarter-over-year by $11.
9 million. Its important components are as follows.
The cost of sailing is $37.
2 million compared with $38 million in the same period in 2018, it was reduced by about 2%, mainly due to a 5% reduction in the number of days spent on navigation.
Charter fees paid to third parties
The owner of the party ship dropped to $18.
Compared to $30, 3 million.
The second quarter of 18 was 7 million.
This decline is driven by a reduction in the number of franchises
Within 35% to 7,742 days.
Vessel operating expenses, excluding the technical management fees paid, increased by $1.
$1 million to $11.
1 million, this is due to an increase in the number of days we have and an increase of 1,868 days compared to 1,820 days.
Transfer to balance sheet and cash flow.
Cash and cash equivalents totaled $43.
7 million reflects the final debt repayment and capital allocation plan I mentioned earlier because we selectively deploy cash to value-added projects and we have the ability to return value to shareholders.
This cash flow is $52 compared to that.
5 million reported in June 30, 2018.
As you can see, we have made great progress in the platform expansion plan.
Our ability to continuously strengthen our financial position while also driving growth and expansion opportunities and rewarding shareholders reflects the progress we have made since we became a listed company.
With this, before we go into the Q & A section of the phone, I will now revert the phone back to Ed for any additional comments. Ed? --------------------------------------------------------------------------------
Edward Cole, Pangu Logistics Solutions Co. , Ltd. -Co-
[Chairman and CEO of the Board of Directors5]--------------------------------------------------------------------------------
Thank you, Jenny.
From the expansion of our strong performance and platform, you can see that we have reason to be optimistic about the way forward.
We thank our customers, business partners and shareholders for their continued commitment and partnership, and we look forward to further updating your information in the coming quarters.
I will answer questions now.
Questions and Answers--------------------------------------------------------------------------------Operator [1]--------------------------------------------------------------------------------(
Operator instructions)
Our first question is Poe Fratt from the capital markets. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]2]--------------------------------------------------------------------------------
I just wanted to find a flavor for the drop in shipping day quarter-
The second quarter compared with the first quarter.
When I saw the goods you moved, it looked like you moved about 6 million tons a quarter.
Although your number of cruises is slightly less and the number of customers is slightly less, can you put a little taste in reducing the time of Charter
What happened in the first quarter? --------------------------------------------------------------------------------
Edward Cole, Pangu Logistics Solutions Co. , Ltd. -Co-
[Chairman and CEO of the Board of Directors3]--------------------------------------------------------------------------------
What I\'m trying to say is, as you know, what we\'re doing is generally--
Opportunistic.
When we see the opportunity to do things, we do it.
We do it when we feel less positive.
I think this is a normal part of the cycle of what we are doing.
Therefore, when the market becomes lower, we are less willing to accept goods from books.
So I think this is probably the best explanation I can come up.
I can tell you now that the fleet is growing.
I think we are running about 62 ships at the moment. So it\'s(
Technical difficulty)market --
Just the market-
Related opportunisticThanks. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]4]--------------------------------------------------------------------------------
So this is more time, Ed, thank you for answering my next question, where are you now in terms of your franchise
In a few days or your total fleet. Great.
And--
When you look at the Breton point, if you can give me a little more color ---
Are you a stock investor there? What sort of --
Should we look for economic impact in the coming year or so?
Or just--
Ed, if you can take the concept-
I know this is a former power plant that has been redeveloped, but if you can give us a concept of economic impact and if you have made an equity investment there? --------------------------------------------------------------------------------
Edward Cole, Pangu Logistics Solutions Co. , Ltd. -Co-
[Chairman and CEO of the Board of Directors5]--------------------------------------------------------------------------------Sure.
I think we will make some equity investments as real estate improves.
I don\'t know it\'s going to be a huge amount.
It depends on opportunity.
What we do with the people here is really develop to fill the long term
Terminology space in the terminal.
This is very successful.
If you ask my opinion, I will say that everything will be done in a year.
This is the real lack of space in the United States. S. East Coast.
So I suspect that from 2020 you will start to see things go straight to the bottom line from this activity.
I think what\'s more interesting for us is that many of the products that are coming through the dock are products that we can ship for our ships.
It will therefore have a double impact.
Like I said, I think-
The contract there lasted 20 years.
So I think it will be very helpful for the future.
I think we can get some very good income from this project every year.
This is the pattern of what we are doing elsewhere.
I think we will see the future.
We are doing a few other things. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]6]--------------------------------------------------------------------------------Great.
Then congratulate you on your friendship. When --
Gianni, if you could talk about this way of financing, how could you possibly build this way of financing? --------------------------------------------------------------------------------
Jenni DelSignore, Pangu Continental Logistics Solutions Co. , Ltd. -
Chief Financial Officer and Secretary7]--------------------------------------------------------------------------------Sure.
In fact, Poe, the previous point about Brayton point, is just to make it clear that we are the 50% joint venture partners in that operating agreement.
As for our friendship, we expect delivery in the second half of September.
Historically, we have been lucky in financing, right?
The banks have been there.
Our relations in Japan have developed slowly.
We can enter that market now.
We have established good relations with owners, operators and banks in Japan.
So this is the route expected.
We will look at Japanese operating leases similar to the structures we have recently completed with bulk pods and bulk spirits.
We also hope to close it when delivery-
Delivery time on September. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]8]--------------------------------------------------------------------------------Great.
If that\'s the case, you have enough ability to be unimpeded. . . --------------------------------------------------------------------------------
Jenni DelSignore, Pangu Continental Logistics Solutions Co. , Ltd. -
Chief Financial Officer and Secretary9]--------------------------------------------------------------------------------Yes.
As I said in my statement prepared earlier, yes, we now have 6 ships that are not being held back.
So we also have some abilities there. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]10]--------------------------------------------------------------------------------
Then, if we can move to 2 new Panama-type buildings, is it possible for you to introduce a partner in the future? Or is this --
Will the two new buildings be loaned?
And then do you have any options to build the extra Panama? --------------------------------------------------------------------------------
Edward Cole, Pangu Logistics Solutions Co. , Ltd. -Co-
[Chairman and CEO of the Board of Directors11]--------------------------------------------------------------------------------
I think this is what we are doing.
So we may not be able to talk about it in detail right now, but what I want to say is that no matter what we are doing, we are looking for good partners.
So it\'s certainly possible.
As for the extra ships, we are also working actively.
The idea behind increasing capacity is against the long term
Our regular contract.
I think we are very satisfied with economics.
The most important thing for us is to maintain our leadership position in the ice business.
I think this will be very helpful for future group goals. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]12]--------------------------------------------------------------------------------Great.
Gianni, you paid $7.
The deposit is 8 million, which is 10%.
I think the next payment is 15%.
When do you expect to expire? --------------------------------------------------------------------------------
Jenni DelSignore, Pangu Continental Logistics Solutions Co. , Ltd. -
Chief Financial Officer and Secretary13]--------------------------------------------------------------------------------
It was at launch.
So I think there\'s at least a year left for this time. 5 years. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]14]--------------------------------------------------------------------------------
For example, the fourth quarter 2020? --------------------------------------------------------------------------------
Jenni DelSignore, Pangu Continental Logistics Solutions Co. , Ltd. -
Chief Financial Officer and Secretary15]--------------------------------------------------------------------------------Yes. Correct. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]16]--------------------------------------------------------------------------------
Is that fair? --------------------------------------------------------------------------------
Jenni DelSignore, Pangu Continental Logistics Solutions Co. , Ltd. -
Chief Financial Officer and Secretary17]--------------------------------------------------------------------------------Yes. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]18]--------------------------------------------------------------------------------
Then the last payment will be paid at the time of delivery, now 2021? --------------------------------------------------------------------------------
Jenni DelSignore, Pangu Continental Logistics Solutions Co. , Ltd. -
Chief Financial Officer and Secretary19]--------------------------------------------------------------------------------Yes.
We hope that during the summer ice season in 2021, ships will only be ready.
This is a big part of what we decided to build, especially within the time frame our client wanted a ship.
So this is the expected delivery and this will be the last delivery-
It will be the last issue after delivery. --------------------------------------------------------------------------------
Charles Kennedy Flatt Noble Capital Markets Ltd.
Research Department-
Senior transportation logistics analyst]20]--------------------------------------------------------------------------------Yes, that\'s 75%. Okay. Great. --------------------------------------------------------------------------------Operator [21]--------------------------------------------------------------------------------
There are no other problems at this time.
I want to return it to management. --------------------------------------------------------------------------------
Edward Cole, Pangu Logistics Solutions Co. , Ltd. -Co-
[Chairman and CEO of the Board of Directors22]--------------------------------------------------------------------------------
Well, I thank you very much for your support and wish you all a happy stay. --------------------------------------------------------------------------------Operator [23]--------------------------------------------------------------------------------Thank you.
This concludes today\'s meeting.
You can disconnect now.
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