LIMASSOL, Cyprus, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Toro Corp. ( 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, 2023.
Highlights of the Second Quarter Ended June 30, 2023:
- Total vessel revenues: $24.9 million, as compared to $25.8 million for the three months ended June 30, 2022, or a 3.5% decrease;
- Net income: $55.4 million, as compared to $5.4 million for the three months ended June 30, 2022, or a 925.9% increase;
- Earnings (basic) per common share: $3.34 per share, as compared to $0.57 per share for the three months ended June 30, 2022;
- EBITDA(1): $56.8 million, as compared to $7.7 million for the three months ended June 30, 2022;
- Cash and restricted cash of $128.2 million as of June 30, 2023, as compared to $42.5 million as of December 31, 2022;
- Delivery of the M/T Wonder Bellatrix to its new owners on June 22, 2023, after entering into an agreement to sell the vessel on May 12, 2023 for $37.0 million, resulting in a net capital gain of $19.3 million;
- Delivery of the M/T Wonder Polaris to its new owners on June 26, 2023, after entering into an agreement to sell the vessel on May 18, 2023 for $34.5 million, resulting in a net capital gain of $21.3 million;
- Acquisition of the LPG Dream Terrax on May 26, 2023, after entering into an agreement to purchase the vessel on April 26, 2023 for $19.9 million;
- Acquisition of the LPG Dream Arrax on June 14, 2023, after entering into an agreement to purchase the vessel on April 26, 2023 for $17.0 million; and
- On April 17, 2023, the Company entered into a subscription agreement (the “Subscription Agreement”) with Pani Corp., pursuant to which Toro issued and sold, and Pani Corp. purchased, 8,500,000 common shares for gross proceeds of $19,465,000. As of June 30, 2023, the Company had 17,961,009 common shares issued and outstanding.
Highlights of the Six Months Ended June 30, 2023:
- Total vessel revenues: $56.0 million, as compared to $42.6 million for the six months ended June 30, 2022, or a 31.5% increase;
- Net income: $77.3 million, as compared to $6.7 million for the six months ended June 30, 2022, or a 1,053.7% increase;
- Earnings (basic) per common share: $5.13 per share, as compared to $0.70 per share for the six months ended June 30, 2022;
- EBITDA(1): $80.9 million, as compared to $11.1 million for the six months ended June 30, 2022; and
- Our spin-off (the “Spin-Off”) by Castor Maritime Inc. (“Castor”) was completed on March 7, 2023 and our shares commenced trading on the Nasdaq Capital Market on the same date.
(1) EBITDA is not a recognized measures 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:
“We enjoyed a robust charter market in tankers during the second quarter, as the supply/demand fundamentals of the crude and oil product markets remain solid.
Importantly, we entered the gas market by taking delivery of all four modern LPG carriers we agreed to purchase during the second quarter, positioning Toro in a segment we believe offers promising prospects. We continue to renew our fleet by selling older tonnage, taking advantage of the demand for second hand tanker vessels.
We will continue to seek opportunities to profitably grow our business.”
Earnings Commentary:
Second Quarter ended June 30, 2023, and 2022 Results
Total vessel revenues, net of charterer’s commissions, decreased to $24.9 million in the three months ended June 30, 2023, from $25.8 million in the same period in 2022. This decrease is mainly associated with the reduction in the Ownership Days of our fleet, to 769 days in the three months ended June 30, 2023 from 819 days in the same period in 2022 and increased employment of vessels in our fleet in pools.
Voyage expenses for our fleet decreased by $10.7 million to $0.7 million in the three months ended June 30, 2023, from $11.4 million in the same period of 2022. This decrease in voyage expenses is mainly associated with the decrease in (i) the Ownership Days of our fleet and (ii) expenses associated with our vessels’ commercial employment arrangements as during the three months ended June 30, 2023, the majority of our tanker vessels operated under pool agreements resulting in a substantial decrease in bunker consumption cost and port expenses, which were borne by our pool operators, as compared to the three months ended June 30, 2022, where our Aframax/LR2 segment operated predominantly under voyage charters.
The increase in Vessel operating expenses by $0.5 million to $6.1 million in the three months ended June 30, 2023, from $5.6 million in the same period in 2022, mainly reflects the increase in the daily vessel operating expenses of the vessels in our fleet to $7,898 in the three months ended June 30, 2023, from $6,802 in the same period in 2022, partly offset by the decrease in the Ownership Days of our fleet.
Depreciation expenses for our fleet decreased to $1.3 million in the three months ended June 30, 2023, from $1.7 million in the same period in 2022 as a result of the decrease in the Ownership Days of our fleet. Dry-dock and special survey amortization charges amounted to $0.4 million for the three months ended June 30, 2023, compared to a charge of $0.1 million in the three months ended June 30, 2022. This variation in dry-dock amortization charges primarily resulted from the increase in dry-dock amortization days from 105 days in the three months ended June 30, 2022, to 286 dry-dock amortization days in the three months ended June 30, 2023.
General and administrative expenses in the three months ended June 30, 2023, amounted to $0.9 million, whereas, in the same period of 2022 general and administrative expenses totaled $0.4 million. This increase is mainly associated with (i) incurred legal and other corporate fees primarily related to the growth of our company and becoming a public company on March 7, 2023 and (ii) the flat management fee for the three months ended June 2023, amounting to $0.8 million. For the three months ended June 30, 2022, and for the period from January 1 through March 7, 2023 (completion of Spin-Off), General and administrative expenses reflect the expense allocations made to the Company by Castor based on the proportion of the number of Ownership Days of our fleet vessels to the total Ownership Days of Castor’s full fleet.
The increase in management fees by $0.3 million, to $1.0 million in the three months ended June 30, 2023, from $0.7 million in the same period of 2022, mainly reflects the (i) increased management fees following our entry into the Amended and Restated Master Management Agreement with effect from July 1, 2022 and (ii) the management agreements for our four LPG carriers, which are effective from the date of the purchase agreements, on April 26, 2023.
Interest and finance costs, net amounted to $(0.4) million in the three months ended June 30, 2023, whereas, in the same period of 2022, interest and finance costs, net amounted to $0.2 million. This variation is mainly due to a substantial increase in interest income for the three months ended June 30, 2023 on our available cash, which more than offset an increase in the weighted average interest rate charged on our long-term debt from 4.2% in the three months ended June 30, 2022 to 8.1% in the same period of 2023.
Recent Financial Developments Commentary:
Equity update
On April 17, 2023, we entered into a subscription agreement with Pani Corp., a company controlled by our Chairman and Chief Executive Officer, pursuant to which on April 19, 2023 we issued and sold, and Pani Corp. purchased, 8,500,000 common shares, par value $0.001 per share, at a purchase price of $2.29 per share, for gross proceeds of $19.5 million.
On July 14, 2023, we paid Castor a dividend on the Series A Fixed Rate Cumulative Perpetual Convertible Preferred Shares (the “Preferred Series A shares”) for the period from April 15, 2023 to July 14, 2023, amounting to $0.4 million.
As of August 9, 2023, we had 17,961,009 common shares issued and outstanding.
Liquidity/ Financing/ Cash flow update
Our consolidated cash position (including our restricted cash) as of June 30, 2023 increased by $85.8 million to $128.2 million, as compared with our cash position on December 31, 2022. During the six-month period ended June 30, 2023, our cash position increased mainly as a result of (i) $48.3 million of net operating cash flows provided, (ii) $27.9 million of net investing cash flows provided, including $69.1 million of net proceeds from the sale of M/T Wonder Bellatrix and M/T Wonder Polaris, partly offset by payments of $37.8 million mainly related of the acquisition of LPG Dream Terrax and LPG Dream Arrax and $3.4 million of advances for vessel acquisition of LPG Dream Syrax and LPG Dream Vermax, and (iii) $9.5 million of net financing cash flows provided, including $19.4 million cash inflow from the subscription agreement with Pani Corp. for the issuance of 8,500,000 common shares, by cash payments of $2.7 million to reimburse Spin-Off expenses incurred by Castor on our behalf, $7.3 million for scheduled principal repayments and early prepayment due to sale of M/T Wonder Polaris on our debt, $0.1 million for the payment of dividend on Preferred Series A shares for the period from March 7, 2023 to April 14, 2023, and a net inflow for increase in former parent company investment amounting to $0.2 million.
As of June 30, 2023, our total debt, gross of unamortized deferred loan fees, was $5.9 million of which $1.3 million is repayable within one year, as compared to $13.3 million of gross total debt as of December 31, 2022.
Recent Business Developments Commentary:
Toro’s investment in Castor through purchase of 50,000 Series D Preferred shares
On August 7, 2023, the Company agreed to purchase 50,000 Series D Preferred shares (“Pref D shares”) of Castor of $1,000 each for a total consideration of $50 million in cash. The distribution rate of the Pref D shares is 5%, paid quarterly, and they are convertible to common shares of Castor from the first anniversary of the issue date at the lower of (i) $0.70 and (ii) the 5 day value weighted average price immediately preceding the conversion, subject to a minimum conversion price. The distribution rate is set to increase by a factor of 1.3 times per annum from year 7 with a maximum rate of 20%. This transaction and its terms were approved by the independent members of the board of directors of each of Castor and Toro at the recommendation of their respective independent committees who negotiated the transaction.
Vessels’ acquisitions
On April 26, 2023, the Company entered into an agreement to purchase a 2020 Japanese-built 5,000 cbm LPG carrier, the Dream Terrax, from an unaffiliated third party for a purchase price of $19.9 million. The LPG Dream Terrax was delivered to the Company on May 26, 2023.
On April 26, 2023, the Company entered into an agreement to purchase a 2015 Japanese-built 5,000 cbm LPG carrier, the Dream Arrax, from an unaffiliated third party for a purchase price of $17.0 million. The LPG Dream Arrax was delivered to the Company on June 14, 2023.
On April 26, 2023, the Company entered into an agreement to purchase a 2015 Japanese-built 5,000 cbm LPG carrier, the Dream Syrax, from an unaffiliated third party for a purchase price of $17.0 million. The LPG Dream Syrax was delivered to the Company on July 18, 2023.
On April 26, 2023, the Company entered into an agreement to purchase a 2015 Japanese-built 5,000 cbm LPG carrier, the Dream Vermax, from an unaffiliated third party for a purchase price of $17.0 million. The LPG Dream Vermax was delivered to the Company on August 4, 2023.
Sale of vessels
On April 28, 2023, we entered into an agreement with an unaffiliated third party for the sale of the M/T Wonder Avior, at a price of $30.1 million. The vessel was delivered to its new owner on July 17, 2023. We expect to record during the third quarter of 2023 a net gain on the sale of the M/T Wonder Avior of approximately $18.6 million, excluding any transaction related costs.
On May 12, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the M/T Wonder Bellatrix for a gross sale price of $37.0 million. The vessel was delivered to its new owners on June 22, 2023. In connection with this sale, the Company recognized during the second quarter of 2023 a net gain of $19.3 million.
On May 18, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the M/T Wonder Polaris for a gross sale price of $34.5 million. The vessel was delivered to its new owners on June 26, 2023. In connection with this sale, the Company recognized during the second quarter of 2023 a net gain of $21.3 million.
On June 15, 2023, we entered into an agreement with an unaffiliated third party for the sale of the M/T Wonder Musica, at a price of $28.0 million. The vessel was delivered to its new owner on July 6, 2023. We expect to record during the third quarter of 2023 a net gain on the sale of the M/T Wonder Musica of approximately $17.1 million, excluding any transaction related costs.
Fleet Employment Status (as of August 8, 2023) During the three months ended June 30, 2023, we operated on average 8.5 vessels earning a Daily TCE Rate(1) of $31,841 as compared to an average of 9.0 vessels earning a Daily TCE Rate(1) of $18,422 during the same period in 2022. Our employment profile as of August 8, 2023 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.
| Aframax / LR2 Tankers | ||||||||
| Vessel Name | Type | DWT | Year Built | Country of Construction | Type of Employment | Gross Charter Rate | Estimated Redelivery Date | |
| Earliest | Latest | |||||||
| Wonder Sirius | Aframax / LR2 | 115,341 | 2005 | Korea | TC(1) period | $40,000 per day | Nov-23 | Jun-24 |
| Wonder Vega | Aframax | 106,062 | 2005 | Korea | Tanker Pool(2) | N/A | N/A | N/A |
| Handysize Tankers | ||||||||
| Vessel Name | Type | DWT | Year Built | Country of Construction | Type of Employment | Gross Charter Rate | Estimated Redelivery Date | |
| Earliest | Latest | |||||||
| Wonder Mimosa | Handysize | 36,718 | 2006 | Korea | Tanker Pool(3) | N/A | N/A | N/A |
| Wonder Formosa | Handysize | 36,660 | 2006 | Korea | Tanker Pool(3) | N/A | N/A | N/A |
| LPG Carriers | ||||||||
| Vessel Name | Type | DWT | Year Built | Country of Construction | Type of Employment | Gross Charter Rate | Estimated Redelivery Date | |
| Earliest | Latest | |||||||
| Dream Terrax | LPG carrier 5,000 cbm | 4,743 | 2020 | Japan | TC(1),(4) period | $310,000 per month | Aug-24 | Aug-25 |
| Dream Arrax | LPG carrier 5,000 cbm | 4,753 | 2015 | Japan | Voyage | $235,000 lump sum | 11-Aug-23(5) | N/A |
| Dream Syrax | LPG carrier 5,000 cbm | 5,158 | 2015 | Japan | TC(1) period | $308,500 per month | Feb-24 | Feb-24 |
| Dream Vermax | LPG carrier 5,000 cbm | 5,155 | 2015 | Japan | TC(1) period | $314,950 per month | Mar-24 | Mar-25 |
| (1) | TC stands for time charter. | |
| (2) | The vessel is currently participating in the V8 Plus Pool, a pool operating Aframax tankers aged 15 years or more that is managed by V8 Plus Management Pte. Ltd., a company in which our Chairman and Chief Executive Officer, Petros Panagiotidis has a minority equity interest. | |
| (3) | The vessel is currently participating in an unaffiliated tanker pool specializing in the employment of Handysize tanker vessels. | |
| (4) | The vessel has been fixed under a TC period contract of twelve months at $310,000 per month plus twelve months at $320,000 per month in Charterer’s option, with estimated delivery on about August 13, 2023. | |
| (5) | Estimated completion date of voyage. | |
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, 2023 and 2022, respectively:
| Three Months Ended | Six Months Ended | ||||||||
| (Expressed in U.S. dollars) | June 30, 2023 (unaudited) | June 30, 2022 (unaudited) | June 30, 2023 (unaudited) | June 30, 2022 (unaudited) | |||||
| Total vessel revenues | $ | 24,858,529 | $ | 25,779,119 | $ | 56,012,683 | $ | 42,609,567 | |
| Operating income | $ | 55,066,352 | $ | 5,967,234 | $ | 77,111,010 | $ | 7,535,711 | |
| Net income and comprehensive income | $ | 55,381,774 | $ | 5,424,002 | $ | 77,340,987 | $ | 6,657,133 | |
| EBITDA (1) | $ | 56,785,038 | $ | 7,718,530 | $ | 80,875,342 | $ | 11,096,026 | |
| Earnings (basic) per common share | $ | 3.34 | $ | 0.57 | $ | 5.13 | $ | 0.70 | |
| Earnings (diluted) per common share | $ | 0.92 | $ | 0.10 | $ | 1.28 | $ | 0.12 | |
(1) EBITDA is not recognized measure under U.S. GAAP. Please refer to Appendix B of this release 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.
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, 2023 and 2022, respectively, that we believe are useful in analyzing trends in our results of operations.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| (Expressed in U.S. dollars except for operational data) | 2023 | 2022 | 2023 | 2022 | |||||||||
| Ownership Days (1)(7) | 769 | 819 | 1,489 | 1,629 | |||||||||
| Available Days (2)(7) | 758 | 779 | 1,435 | 1,589 | |||||||||
| Operating Days (3)(7) | 746 | 779 | 1,419 | 1,582 | |||||||||
| Daily TCE Rate (4) | $ | 31,841 | $ | 18,422 | 38,168 | $ | 15,066 | ||||||
| Fleet Utilization (5) | 98 | % | 100 | % | 99 | % | 100 | % | |||||
| Daily vessel operating expenses (6) | $ | 7,898 | $ | 6,802 | 7,515 | $ | 6,635 | ||||||
| (1) | Ownership Days are the total number of calendar days in a period during which we owned a vessel. | |
| (2) | Available Days are the Ownership Days in a period less the aggregate number of days our vessels are off-hire due to scheduled repairs, dry-dockings or special or intermediate surveys. | |
| (3) | Operating Days are the Available Days in a period after subtracting unscheduled off-hire and idle days. | |
| (4) | 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. | |
| (5) | Fleet Utilization is calculated by dividing the Operating Days during a period by the number of Available Days during that period. | |
| (6) | Daily vessel operating expenses are calculated by dividing vessel operating expenses for the relevant period by the Ownership Days for such period. | |
| (7) | Our definitions of Ownership Days, Available Days, Operating Days, Fleet Utilization may not be comparable to those reported by other companies. | |
APPENDIX A
TORO CORP.
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income
(Expressed in U.S. Dollars—except for number of share data)
| (In U.S. dollars except for number of share data) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| REVENUES | |||||||||||||
| Time charter revenues | 3,613,038 | 1,849,970 | 5,519,288 | 4,836,315 | |||||||||
| Voyage charter revenues | 381,189 | 18,857,411 | |||||||||||
