Pyxis Tankers CEO expects rebound in market for product tankers later in 2019

Eddie Valentis, CEO of Pyxis Tankers (NASDAQ:PXS), forecast this week that the market for tanker chartering will “improve significantly” starting in the fall of 2019 due new International Maritime Organization (IMO) regulations about the use of low-sulphur fuels by ships.

“Starting in the fall, we expect the market to improve significantly beyond the historical seasonal upswing of the fourth quarter. The primary reason is the worldwide impact of new IMO regulations regarding the use of low-sulphur fuels for a majority of the shipping industry,” Valentis said after posting the company’s fourth-quarter results.

“We remain optimistic about the fundamentals of the product tanker market, and this fall should commence a sustainable period of an attractive chartering environment.,” Valentis added.

Valentis said he expects chartering activity through the summer of 2019 to be “choppy” for product tankers.

WATCH: Pyxis Tankers CEO expects strong second half of 2019 for product tankers

Spot charter rates for Pyxis’s medium range tankers at the start of the fourth quarter neared record lows but rebounded towards the quarter’s end.

And the management at Pyxis forecasts a longer-term improvement in charter rates due to attractive market fundamentals, such as a limited supply of medium range tankers as well as the dominance of export-oriented petroleum refinery cargoes.

In its latest quarter ending on December 31, thanks to a jump in spot chartering activity, the Greek company’s revenue rose by 3.1% to $7.5 million, up from $7.3 million in the corresponding period in 2017.

Costs and commissions related to voyages also climbed to $3 million in the fourth quarter, up almost 63% from the $1.9 million won in the year-ago quarter.

Over the same period, Pyxis posted a net loss of $3.4 million, or $0.16 per share, due to a challenging freight market and less use of vessels, compared with a net loss of $1.4 million, or $0.08 per share, for the last quarter of 2017.

Pyxis owns a fleet of six tankers engaged in sea transportation of refined petroleum products and other bulk liquids. The Greek company’s customers include Shell Oil and Valero Energy.

Pyxis shares slipped by US$0.02 to hit $1.08 in morning trade Friday.

Contact Ellen Kelleher at [email protected]

Story by ProactiveInvestors