Toro Corp. (NASDAQ: TORO), (“Toro”, or the “Company”), an international energy transportation services company, today announced its results for the three months and the six months ended June 30, 2024. Highlights of the Second Quarter Ended June 30, 2024: Total vessel revenues: $5.
5 million, as compared to $24.9 million for the three months ended June 30, 2023, or a 77.9% decrease; Net income: $1.
1 million, as compared to $55.4 million for the three months ended June 30, 2023, or a 98.0% decrease; Earnings per common share, basic: $0.
001 per share, as compared to $3.34 per share for the three months ended June 30, 2023; EBITDA(1): $0.2 million, as compared to $56.
8 million for the three months ended June 30, 2023; and Cash and restricted cash of $189.2 million as of June 30, 2024, as compared to $155.6 million as of December 31, 2023.
Highlights of the Six Months Ended June 30, 2024: Total vessel revenues: $12.5 million, as compared to $56.0 million for the six months ended June 30, 2023, or a 77.
7% decrease; Net income: $23.3 million, as compared to $77.3 million for the six months ended June 30, 2023, or a 69.
9% decrease; Earnings per common share, basic: $1.12 per share, as compared to $5.13 per share for the six months ended June 30, 2023; EBITDA(1): $21.
6 million, as compared to $80.9 million for the six months ended June 30, 2023; Delivery of the M/T Wonder Sirius to its new owners on January 24, 2024, after entering into an agreement to sell the vessel on January 8, 2024 for $33.8 million, resulting in a capital gain of $19.
6 million; and Repurchased 644,556 common shares at an aggregate cost of $3.7 million under the Company’s share repurchase program, which was approved on November 6, 2023 and expired on March 31, 2024. (1) EBITDA is not a recognized measure under United States generally accepted accounting principles (“U.
S. GAAP”). Please refer to Appendix B for the definition and reconciliation of this measure to Net income, the most directly comparable financial measure calculated and presented in accordance with U.
S. GAAP. Management Commentary: Mr.
Petros Panagiotidis, Chief Executive Officer of the Company, commented: “During the second quarter of 2024 we continued to enjoy substantial operating cash flows from our fleet which consists mostly of LPG carrier vessels. “The markets for both product tankers and LPG carriers remain robust, while we maintain a strong balance sheet with significant cash reserves and no outstanding debt. As we move forward, we continue to seek opportunities that will further drive our growth and strengthen our position in the market.
” Earnings Commentary: Second quarter ended June 30, 2024, and 2023 Results Total vessel revenues, net of charterers’ commissions, decreased to $5.5 million in the three months ended June 30, 2024, from $24.9 million in the same period in 2023.
This decrease of $19.4 million was mainly associated with (i) our exit from the Aframax/LR2 segment resulting in zero revenues from that segment for the three months ended June 30, 2024, compared to $20.2 million in the same period in 2023, due to the sale of five of our six Aframax/LR2 vessels in 2023 and of the M/T Wonder Sirius on January 24, 2024, and (ii) decrease of the Daily TCE Rate to $11,345 in the three months ended June 30, 2024, from $31,841 in the same period in 2023, mainly due to the change in the mix of our fleet following the addition of LPG vessels, which earn a lower Daily TCE Rate than the Handysize and Aframax/LR2 tanker vessels due to their size and the trade they operate in.
Daily TCE Rate is not a recognized measure under U.S. GAAP.
Please refer to Appendix B for the definition and reconciliation of this measure to Total vessel revenues, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
Voyage expenses for our fleet decreased to $0.6 million in the three months ended June 30, 2024, from $0.7 million in the same period in 2023.
This decrease of $0.1 million was mainly associated with the decreased brokerage commission expenses by $0.3 million corresponding to the decrease in vessel revenues as discussed above, partially offset by the increased bunkers consumption costs of $0.
1 million in the three months ended June 30, 2024, as compared to the same period in 2023. The decrease in Vessel operating expenses by $3.7 million to $2.
4 million in the three months ended June 30, 2024, from $6.1 million in the same period in 2023, mainly reflects the decrease (i) in the Daily vessel operating expenses of the vessels in our fleet to $5,168 in the three months ended June 30, 2024 from $7,898 in the same period in 2023, mainly due to the change in the mix of our fleet following the addition of the LPG vessels which incur lower Daily vessel operating expenses than the Handysize and Aframax/LR2 tanker vessels due to their size and (ii) in the Ownership Days of our fleet to 455 days in the three months ended June 30, 2024 from 769 days in the same period in 2023 due to the decrease of the average number of operating vessels to 5.1 vessels in the three months ended June 30, 2024 from 8.
5 vessels in the same period of 2023. Depreciation expenses for our fleet decreased to $1.1 million in the three months ended June 30, 2024, from $1.
3 million in the same period in 2023 as a result of the decrease in the Ownership Days of our fleet. Dry-dock and special survey amortization charges amounted to $0.1 million for the three months ended June 30, 2024, compared to a charge of $0.
4 million in the three months ended June 30, 2023. This decrease in dry-dock amortization charges primarily resulted from the decrease in dry-dock amortization days from 286 days in the three months ended June 30, 2023 to 98 dry-dock amortization days in the three months ended June 30, 2024. General and administrative expenses in the three months ended June 30, 2024, amounted to $2.
4 million, whereas, in the same period of 2023, general and administrative expenses totaled $0.9 million. This increase is mainly associated with the stock based compensation cost for non-vested shares granted under our Equity Incentive Plan amounting to $1.
4 million. Management fees decreased to $0.5 million in the three months ended June 30, 2024, from $1.
0 million in the same period in 2023 as a result of the decrease in the Ownership Days of our fleet, partly offset by the increased management fees with effect from July 1, 2023, from $975 per vessel per day to $1,039 per vessel per day, as these fees were adjusted under the terms of the amended and restated master management agreement between the Company, the Company’s shipowning subsidiaries and Castor Ships S.A., effective from July 1, 2022.
Interest and finance costs, net, amounted to $(2.1) million in the three months ended June 30, 2024, whereas, in the same period of 2023, interest and finance costs, net amounted to $(0.4) million.
This variation is mainly due to higher cash balances compared to the same period of 2023 and the substantial increase in interest income for the three months ended June 30, 2024 on our available cash that we earned from our time and cash deposits, due to increased interest rates. Recent Financial Developments Commentary: Equity update On July 15, 2024, the Company paid to Castor Maritime Inc. (“Castor”) a dividend amounting to $0.
3 million on its 1.00% Series A Fixed Rate Cumulative Perpetual Convertible Preferred Shares (the “Series A Preferred Shares”) for the period from April 15, 2024 to July 14, 2024. As of August 9, 2024, we had 19,093,853 common shares issued and outstanding.
Liquidity/Financing/Cash flow update Our consolidated cash position (including our restricted cash) increased by $33.6 million, from $155.6 million as of December 31, 2023, to $189.
2 million as of June 30, 2024. During the six months ended June 30, 2024, our cash position increased mainly as a result of (i) $13.8 million of net operating cash flows provided, (ii) $29.
5 million of net investing cash flows provided, including $32.5 million of net proceeds from the sale of the M/T Wonder Sirius and $0.1 million of proceeds from sale of equity securities, partially offset by $3.
1 million of purchases of equity securities and (iii) $9.7 million of net financing cash flows used, including $5.3 million for the early repayment on our debt due to sale of the M/T Wonder Sirius, $3.
7 million for the payment for repurchase of common shares and $0.7 million for the payment of dividends to Castor on our Series A Preferred Shares for the period from October 15, 2023 to April 14, 2024. Fleet Employment Status (as of August 9, 2024): During the three months ended June 30, 2024, we operated on average 5.
1 vessels earning a Daily TCE Rate(1) of $11,345 as compared to an average of 8.5 vessels earning a Daily TCE Rate(1) of $31,841 during the same period in 2023. Our employment profile as of August 9, 2024 is presented immediately below.
(1) Daily TCE Rate is not a recognized measure under U.S. GAAP.
Please refer to Appendix B for the definition and reconciliation of this measure to Total vessel revenues, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
Financial Results Overview: Set forth below are selected financial and operational data of our fleet for each of the three and six months ended June 30, 2024 and 2023, respectively: Consolidated Fleet Selected Financial and Operational Data: Set forth below are selected financial and operational data of our fleet for each of the three and six months ended June 30, 2024 and 2023, respectively, that we believe are useful in analyzing trends in our results of operations. APPENDIX B Non-GAAP Financial Information Daily Time Charter (“TCE”) Rate. The Daily Time Charter Equivalent Rate (“Daily TCE Rate”), is a measure of the average daily revenue performance of a vessel.
The Daily TCE Rate is not a measure of financial performance under U.S. GAAP (i.
e., it is a non-GAAP measure) and should not be considered as an alternative to any measure of financial performance presented in accordance with U.S.
GAAP. We calculate Daily TCE Rate by dividing total revenues (time charter and/or voyage charter revenues, and/or pool revenues, net of charterers’ commissions), less voyage expenses, by the number of Available Days during that period. Under a time charter, the charterer pays substantially all the vessel voyage related expenses.
However, we may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time or other charter, during periods of commercial waiting time or while off-hire during dry-docking or due to other unforeseen circumstances. Under voyage charters, the majority of voyage expenses are generally borne by us whereas for vessels in a pool, such expenses are borne by the pool operator. The Daily TCE Rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a company’s performance and, management believes that the Daily TCE Rate provides meaningful information to our investors since it compares daily net earnings generated by our vessels irrespective of the mix of charter types (e.
g., time charter, voyage charter, pools or other) under which our vessels are employed between the periods while it further assists our management in making decisions regarding the deployment and use of our vessels and in evaluating our financial performance. Our calculation of the Daily TCE Rates may be different from and may not be comparable to that reported by other companies.
The following table reconciles the calculation of the Daily TCE Rate for our fleet to Total vessel revenues, the most directly comparable U.S. GAAP financial measure, for the periods presented (amounts in U.
S. dollars, except for Available Days): EBITDA. EBITDA is not a measure of financial performance under U.
S. GAAP, does not represent and should not be considered as an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance presented in accordance with U.S.
GAAP. We define EBITDA as earnings before interest and finance costs (if any), net of interest income, taxes (when incurred), depreciation and amortization of deferred dry-docking costs. EBITDA is used as a supplemental financial measure by management and external users of financial statements to assess our operating performance.
We believe that EBITDA assists our management by providing useful information that increases the comparability of our operating performance from period to period and against the operating performance of other companies in our industry that provide EBITDA information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest, other financial items, depreciation and amortization and taxes, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including EBITDA as a measure of operating performance benefits investors in (a) selecting between investing in us and other investment alternatives and (b) monitoring our ongoing financial and operational strength.
EBITDA as presented below may be different from and may not be comparable to similarly titled measures of other companies. The following table reconciles EBITDA to Net Income, the most directly comparable U.S.
GAAP financial measure, for the periods presented: Source: Toro Corp..
