Pangaea Logistics Solutions, Ltd. Q4 FY2025 earnings call

• Matt, as CEO, spoke about his 16 years with the company, transition from Mark Lanowski, and leading into multi-year growth. - Fourth quarter results supported by strong Arctic ice season completion and stable drive-off demand. Adjusted EBITDA growth due to integrated logistics model and scale. - Continued investing in integrated logistics platform with commencement in Lake Charles and track to launch expanded operations in Tampa. - Advanced fleet renewal strategy with sale of two vessels. - Disciplined capital allocation with priorities of fleet renewal, organic growth, balance sheet strength, and shareholder returns. - Near-term dry bulk fundamentals constructive for minor bulks, Arabian Gulf developments impact fuel prices and trade flows. - AGEA uniquely positioned in Arctic with long-term positive tailwinds. - First quarter of 2026 market sentiment positive with 5,920 shipping dates booked at TCE of 14,917 per day. - Benjia enters 2026 with strong momentum, strategy, and well-capitalized balance sheet. - Johnny walked through fourth quarter financial results highlighting TCE premiums, adjusted EBITDA increase, charter hire and vessel operating expenses changes, general and administrative expenses increase, cash flow details, and dividend and share repurchase info.

Fourth quarter TCE rate averaged 19% above the prevailing market for Panamax, SupraMax, and HandySize indices. Fourth quarter TCE rates were $17,773 per day, a premium of 19% over the average published market rates for Panamax, Supermax, and handy-sized vessels in the period. Adjusted EBITDA grew 22% year-over-year to $28.7 million in the fourth quarter. For full year 2025, vessel operating expenses net of technical management fees was $5,932 per day. Total general and administrative expenses increased by 7% from 6.3 million to approximately 6.7 million. Reported GAAP net income for the fourth quarter was $11.9 million, or 19 cents per diluted share. Excluding certain non-GAAP adjustments, adjusted net income attributable to Tangier during the quarter was $10.1 million, or 16 cents per diluted share. Total cash from operations was approximately $15 million at quarter end, with approximately $103 million in unrestricted cash. In total debt, including finance lease obligations, approximately $372 million. Throughout 2025, repurchased approximately 600,000 shares for roughly $3 million and paid approximately $16.3 million in dividends.

• Priorities of fleet renewal, organic growth, balance sheet strength, and shareholder returns unchanged for 2026. - In first quarter of 2026, market sentiment positive and pricing holding at favorable levels with 5,920 shipping dates booked at TCE of 14,917 per day. - Expect incremental EBITDA of around $3 million in 2026 from terminal and port expansions. - Will maintain disciplined capital allocation approach, preserving financial flexibility, delivering consistent returns to shareholders, and investing selectively in opportunities to strengthen integrated shipping and logistics platform.

• Actual results may differ significantly from forward-looking statements due to various risks and uncertainties, including those described in periodic reports filed with the SEC. - Indirect impacts of Arabian Gulf developments on dry bulk sector through fuel price volatility and trade flow disruption. - Uncertainty regarding the impact of Middle East events on dry bulk trade and potential effects on fuel prices and alternative trade routes.

Q: Have you been able to leverage your handy-sized vessels to grow your onshore port intramural business?

A: Yeah, we are experiencing nice synergies both between the handy-size fleet and especially our existing Supermax fleet. And we are also in our port and terminals, we have also handled cargoes on several of our handy-size vessels. So there's a nice balance between the two activities, yes.

Q: Has the dry bulk sector and Pangea been affected by recent events in the Middle East?

A: Our direct exposure to the conflict in the area is virtually non-existent. We have no ships in the area. We have no ships going there. We have no people... working in the region. We had two of our seafarers that were transiting through an airport, but they were able to make it out and make it home safely. So the direct impact on us is non-existent. The indirect impact, I think, is mainly being felt through oil price volatility and the potential for even further trade disruption as as the materials on the dry side that are moving in and out of the U.S. Gulf need to find alternative routes. So it's still very early in that process to see how that will all shake out. It's still very much uncertain, but on balance, it could have an impact for sure.

Q: Can you talk about the impact, the potential impact of fuel prices, bunker fuel, and how you manage your forward-looking bunker fuel prices?

A: We manage approach to fuel prices primarily in two different ways. The biggest component of that is that several of our larger contracts, especially the longer-term ones, have longer adjustment clauses in them. So the freight is changed depending on the prevalent fuel price at any point in time. So around the time we're performing the shipment, calculation made that shows the impact of a change in fuel price and the freight is adjusted accordingly. So our earnings on that contract, on those contracts, doesn't change really. It's sort of floating the fuel price. And then for our shorter exposure, we use – we hedge through using derivatives. That is not something that is new to us. We've done that for many years. We have to when we are operating a business like ours. We have quite a big short-term book that has a fixed rate to it. So that is possible. It's relatively cheap. It's pretty efficient. And I believe on-balance is probably a strength for us that we can manage that exposure honestly.

Q: My sense is you protected or you're hedged or, you know, insulated from any bunker fuel price increases for, say, the next six months to nine months. Is that fair? And so that, you know, you're really exposed as we look into the latter part of 2026 and maybe into 2027 if oil prices, you know, continue to remain where they are right now and bunker fuel prices, you know, stay where they are?

A: No, I actually wouldn't say that, because the further out you go in our contract base, that's where we have the Bunga installation mechanism in the contract. So we are protected on our COA portfolio, either through a Bunga installation clause or through a hedge position. Whatever future business we will be doing will be priced at whatever is the Bunga prices at that time. Okay, so you'll be able to dynamically adjust.

Q: What's the first bucket as far as the overall business? You know, whether you measure it on, you know, tons moved or revenue or, you know, some kind of metric. You mean you refer to like the freight?

A: Yeah, the freight to COA business.

Q: Can you just expand on your comment that, you know, trade flows may be impacted by what's going on in the Middle East and You know, you talked about, you know, trade going out of the U.S. Gulf. Can you just expand on that comment a little bit more?

A: I think one thing that we all have to bear in mind that this is still very fresh, and I don't think you can see any changes. So a lot of this is sort of, you know, expectations all coming close to speculation. But there is a expected to be a pretty significant impact from reduction in gas exports out of the AG that potentially could be substituted with coal. And obviously coal is being moved on bulk vessels, dry bulk vessels, and where that coal will be sourced from is still a little, I think, very much an unknown and up in the air, but potentially could be long-haul business that will positively affect some mild demand for the dry bulk market.

Q: Specifically coal out of the U.S. to backfill, you know, any shortfall in MNG out of the Middle East?

A: Potentially, that could happen, yes. But, again, it's still very early days in terms of that, in terms of the complex and what the impact will be. But it is something that could happen, yes.

Q: You detailed a lot of activity on the, you know, the terminal, the port terminals, stevedoring. Can you just maybe quantify the potential impact of 2026 numbers as far as the expansion, you know, the activity there? Are we going to see a, you know, step up in revenues and margin? Or is it going to be,你知道,如果我们能量化那个影响就好了。A: For Q4, a lot of these just started to come online, but it's really the impact will be for 2026. So we have Aransas with Lake Charles, Tampa, and Pascagoula all coming on. So we do expect to step up incremental EBITDA next year, and it's probably around $3 million for 2026 is what we're expecting. In total, just as things start to fall in place throughout 2026, We expect to see that incremental EBITDA for the full year.

Q: Can you just talk about the,你知道,的船队更新? 你过去两个季度每个季度卖了一艘船。关于船队更新,前方有什么计划?你能谈谈买卖两方面吗?

A: The decisions around those two transactions were driven primarily by the age of the vessel. They were both approaching special surveys. One was 22, one was 20 years old. That is historically when we have decided to dispose of assets, so that's not really anything new. We're constantly in the market looking at potential candidates to bring into the fleet. And we are pretty optimistic about both the near-term market outlook and longer-term as well. So we expect, of course, to be more active on that side of the fleet, adding a little bit of capacity as we go.