Pangaea Logistics Solutions Q2 2026 Earnings Call Transcript

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Provided by Quartr
August 11, 2026

Key Takeaways

  • Positive Sentiment: Second-quarter performance strengthened significantly: TCE rates rose 50% year over year to $18,153 per day, 10% above relevant market indices, while adjusted EBITDA increased by nearly $20 million to $35 million.
  • Positive Sentiment: Management maintained a constructive outlook for the remainder of 2026, citing supportive iron ore, grain, and minor-bulk demand, expected ton-mile growth, and seasonal strength from its ice-class fleet. The company has booked 4,873 third-quarter shipping days at a TCE of $20,258 per day to date.
  • Positive Sentiment: The onshore logistics platform continued to expand, with Tampa operations joining Port Aransas and Lake Charles; terminal and stevedore revenue increased 11% year over year to approximately $4 million, with management expecting about $3 million of incremental annual EBITDA.
  • Positive Sentiment: Strong cash generation and vessel-sale proceeds lifted unrestricted cash to $105 million, and the company increased its quarterly dividend to $0.10 per share while retaining flexibility for fleet investments and potential acquisitions.
  • Negative Sentiment: Near-term costs remain elevated, including a $24 million debt balloon payment expected to be refinanced, approximately $14 million of dry-docking costs for nine vessels in the second half, and higher charter-in and general and administrative expenses.
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Earnings Conference Call
Pangaea Logistics Solutions Q2 2026
00:00 / 00:00

Transcript Sections

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Operator

Good morning. My name is Erica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Second Quarter 2026 Results Conference Call. Today's call is being recorded and will be available for replay beginning at 11:00 A.M. Eastern. The recording can be accessed by dialing 800-925-9941 for domestic or 402-220-5395 for international. All lines are currently muted, and after the prepared remarks, there will be a live question and answer session. If you would like to ask a question during the Q&A segment, please press star one on your phone. If your question has been answered, you may remove yourself from the queue at any time by pressing star two. We do ask that you please pick up your handsets for optimal sound quality.

Operator

It is now my pleasure to turn the floor over to Stefan Neely with Vallum Advisors. Please go ahead.

Stefan Neely
Partner at Vallum Advisors

Thank you, operator, and welcome to the Pangaea Logistics Solutions Second Quarter 2026 Results Conference Call. Leading the call with me today are CEO, Mads Petersen, and Chief Financial Officer, Gianni Del Signore. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. At the conclusion of our prepared remarks, we will open the line for questions. With that, I would like to turn the call over to Mads.

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

Thank you, Stefan, and welcome to those joining us on the call today. We generated strong results in both revenue and profitability during the second quarter. Our financial performance was driven by strong execution across both our owned and chartered in fleet, as well as balanced positioning of our assets to take advantage of stronger overall demand, especially in Asia. Robust markets contributed to a 50% increase in our TCE rates for the second quarter. Notably, our TCE rates averaged 10% above the prevailing market for the Panamax, Supramax, and Handysize indices. This premium reflects the benefits of our fleet positioning strategy, the value of our operating platform, long-standing customer relationships, and ability to manage a volatile market effectively. We generated significant operating leverage from the favorable market environment, with second quarter adjusted EBITDA growing by nearly $20 million year-over-year to $35 million.

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

Just as important, these results highlight the value of the business model, which allows us to protect and in many cases expand our margins in dynamic market environments. We actively managed volatile fuel markets through hedging and contract terms, while our continued focus on fleet positioning and backhaul trades allowed us to capture arbitrage opportunities. A balanced approach to fleet deployment, including a greater concentration of vessels in the Pacific region, contributed positively. Our increased exposure to shorter term time charters enabled us to benefit from positive developments in our core Atlantic markets. Strong execution across our charter-in business underscores our ability to translate favorable conditions into positive margins. We continue to grow our onshore logistics platform in the second quarter, commencing operations at the Port of Tampa. Tampa joins our operations at Port Aransas and Lake Charles, all under multi-year contract that started operations within the last 12 months.

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

Terminal and stevedore revenue grew 11% year over year to approximately $4 million. We continue to expect roughly $3 million of incremental EBITDA from these operations on a full year basis. Specifically, this is recurring revenue business that deepens our integration into customer supply chains beyond ocean freight, and it pairs naturally with our Supramax and Handysize fleet. We also advanced our fleet renewal strategy. During the second quarter, we completed the previously announced sale of the 2006-built Bulk Xaymaca for $9.6 million. This follows the sale of the Bulk Freedom late last year, also for $9.6 million, and together these transactions reflect a consistent approach of monetizing older tonnages at attractive values, avoiding the capital and off-hire associated with upcoming drydockings, and steadily improving the efficiency and environmental profile of our fleet.

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

We will continue to selectively and opportunistically invest in modern, high-quality vessels that fit our commercial model, remaining disciplined on price and transacting only when the returns are clear. Looking at the market, demand for bulk commodities carried positive momentum through the first half of the year, driven by increased trade in both iron ore and grain compared to last year. That strength was broad-based, supporting earnings not only in the larger Capesize segment, but also across the midsize and smaller classes where we are most active. Minor bulk trades, which are central to our cargo book, likewise grew compared to the prior year. Encouragingly, this momentum continued into the third quarter. Our outlook for the balance of 2026 remains positive.

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

At the market level, we expect moderate fleet growth to be broadly offset by comparable ton mile demand, with the continued disruption and lengthening of trade routes translating massive cargo volume growth into stronger ton mile demand, which is what ultimately drives utilization and freight rates. For Pangaea specifically, the second half carries a well-established seasonal tailwind as our high ice class fleet is most active during the Arctic summer trading season, which peaks in the third quarter and tapers through the fourth, typically driving our strongest utilization and earnings from these specialized higher margin trades. Through today, we have booked 4,873 shipping days at a TCE of $20,258 per day for the third quarter. In summary, our second quarter results highlighted the value of our commercial platform and dynamic fleet positioning.

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

As we enter the second half of the year, our results will further reflect the strategic advantages of our specialized ice class fleet and long-term contract, which commands a durable premium to the market. Our growing onshore terminal network has a recurring layup earnings with a long runway ahead, and our modern fleet and strong balance sheet lets us fund growth and return capital at the same time. With fundamentals supportive and our strongest seasonal quarters just beginning, we are focused on converting these advantages into sustained earnings growth and lasting value for shareholders. With that, I'll turn the call over to Gianni to walk through our second quarter financial results.

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

Thank you, Mads, and welcome to those joining us on the call today. Our second quarter financial results were highlighted by sustained TCE premiums relative to the prevailing market. Second quarter TCE rates were $18,153 per day, a premium of 10% over the average published market rate of $16,502 per day for Panamax, Supramax, and Handysize vessels in the period. Our adjusted EBITDA for the second quarter was $35 million, a year-over-year increase of nearly $20 million, driven by a 50% increase in TCE rates. Our total charter hire expense increased by 24% compared to the second quarter of 2025 due to an increase in market rates to charter in vessels. Our charter-in cost on a per-day basis was approximately $16,816 per day in the second quarter. Through today, we've booked 2,200 days at $17,537 per day for the third quarter.

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

Vessel operating expenses were essentially flat year-over-year. On a per-day basis through the second quarter of 2026, vessel operating expenses, including technical management fees, was $6,247 per day, a 2% increase from the prior year. Total general and administrative expenses increased by 25%, from $7.2 million to approximately $9 million. The increase was primarily due to an increase in incentive compensation expense due to improved results, along with higher compensation costs associated with added headcount across the organization as we grow our business. In total, our reported GAAP net income for the second quarter was $10.2 million, or $0.16 per diluted share. Our GAAP net income included a significant unrealized loss resulting from our hedging strategy on bunker fuel exposure. The decline in fuel prices late in the second quarter decreased the fair value of our bunker derivatives.

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

Some of these same derivatives translated into significant unrealized gain during the first quarter as fuel prices increased due to the escalation of the conflict with Iran. The first quarter's unrealized gain and the second quarter's unrealized loss essentially offset each other, leaving us in a neutral position for the year. More importantly, all of our hedges are placed against our own bunker requirements over the course of the year, keeping our fuel cost management aligned with our actual physical consumption. When excluding the impact of the second quarter unrealized loss from derivative instruments, as well as other non-GAAP adjustments, our reported adjusted net income was $16.9 million, or $0.26 per diluted share. Moving on to cash flows. Our strong profitability during the quarter resulted in robust operating cash flow.

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

This, combined with $9.7 million of cash proceeds received from the sale of the Bulk Xaymaca during the quarter, drove our unrestricted cash balance to $105 million. At quarter end, we had total debt, including finance lease obligations, of approximately $350 million. To note, our current portion of long-term debt increased to $40 million due to a $24 million balloon payment, which we expect to refinance in the coming months. We are also pleased to announce an increase in our quarterly dividend to $0.10 per share. This increase reflects the strengthening fundamentals and the balance sheet of the business and underscores our commitment to returning capital to shareholders, consistent with the disciplined capital allocation strategy we have always followed. Looking ahead, we will continue to allocate capital with a focus on preserving financial flexibility, supporting the growth of our integrated logistics platform, and returning capital to shareholders.

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

We remain focused on investments that enhance the durability of our earnings base, including the expansion of our terminal and port service capabilities and ongoing fleet renewal initiatives that improve efficiency, support customer needs, and position us for evolving regulatory requirements. With that, we will now open the line for questions.

Operator

Thank you. As a reminder, at this time, if you would like to ask a question, please press star one on your touchtone telephone. If at any point you find your question has been answered, you may remove yourself from the queue by pressing star two. Again, it is star one to ask a question, and we're going to be pausing briefly for questions to queue. Okay, and we'll start with our first question from Liam Burke with B. Riley Securities.

Liam Burke
Liam Burke
Analyst at B. Riley Securities

Thank you. Good morning, Mads. Good morning, Gianni.

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

Morning.

Liam Burke
Liam Burke
Analyst at B. Riley Securities

Mads, you talked about activity in the Pacific region. Is this a new strategy for you? I typically think of your fleet active in the Atlantic, with very little activity in Asia. Have you changed your positioning strategy at all?

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

No, I don't think it's a result of that, but of course, we want to grow it in that region. I think just as a result of our larger fleet and larger scale, we need to take advantage of the opportunities we see out there. Also, early in the year, we saw positive momentum. So we maybe positioned a little bit more of our ships out there than we've had in the past. It's a dynamic business, and we'll go wherever we feel we get the best return. So it's a combination, I would say.

Liam Burke
Liam Burke
Analyst at B. Riley Securities

Okay, great. Gianni, you talked about a balloon payment due this year. You have plenty of cash. How do you balance refinancing versus just taking your cash balance, paying it down? I'll throw in the question of raising the dividend, and how do you balance everything?

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

Yeah, it's what we look at all the time, Liam, and what we're seeing as far as margins on debt facilities, we're really seeing competitive rates on margins. The market seems to be reacting, and there's a lot of opportunities for some well-priced debt. So we're looking at it. The balloon payment I referenced, it's in a joint venture. It's our Nordic Bulk Holding company joint venture with Glencore. So we will look at that with our partners and decide what to do. But our expectation, looking at that one specifically, is to roll it out and refinance it. Cash is shipping, it's volatile. We look at opportunities. We want to be opportunistic.

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

If we can keep some cash and look at different vessel opportunities as they present themselves and be a little bit more nimble, I think that's how we think about our capital going forward, is really being opportunistic when we see something in the market.

Liam Burke
Liam Burke
Analyst at B. Riley Securities

Great. Thank you, Mads. Thank you, Gianni.

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

Yep.

Operator

Again, that is star one if you would like to ask a question. Again, at any time your question's been answered, you may remove yourself from the queue by pressing star two. We'll take our next question with Poe Fratt with AG Partners. Please go ahead.

Poe Fratt
Analyst at AG Partners

Yeah, good morning. I'd like to follow up on the comment about the Pacific trade or Pacific region. Are there any particular cargoes that are driving that? Then secondly, can you highlight whether that has continued into the third quarter or sort of how you look at that over the second half of the year?

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

I wouldn't say that it's a specific cargo that sort of drives that growth in earnings. I do see that the markets have rebalanced a bit in terms of the Atlantic trading off and the Pacific maybe flattening a little bit. I'm not envisioning, sort of in the short term, a huge change to how we employ the ship. It was, I think, more of an opportunistic look at where we could get the best returns in the short term, mainly because the Pacific seemed to be a little bit more disrupted from the activities in the Strait of Hormuz than the Atlantic. We saw an opportunity there.

Poe Fratt
Analyst at AG Partners

Great. Thank you, Mads. When you look at your own fleet, you know, you just sold one, are you seeing opportunities on either side of the equation to either sell assets or buy assets? Can you just give me an idea of what the tone of the S&P market looks like to you right now?

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

I think it's absolutely firm. Values are high, and we take advantage of that when we are looking at the older ships in our fleet that are coming up against some of the default of the fifth special survey and take advantage of that liquid market for our ships in that age group. On the other side of it, we are always looking at ships from the second market to add to the fleet. But we are quite determined to only pursue the assets that are attractive to us from a specification and price point, and in the meantime, we can, in the short term at least, substitute with a little bit more activity in the charter-in part of the business.

Poe Fratt
Analyst at AG Partners

Okay. Can you just, Mads, if you wouldn't mind highlighting your dry docking activity over the next 12 months, second half of the year into the first half of 2027?

Gianni Del Signore
Gianni Del Signore
CFO at Pangaea Logistics Solutions

Yeah, Poe, I can run through that. For the second half of the year, we have about nine more dry dockings to go, and we're estimating about $14 million of cost associated with that. Next year, we have a little bit of a lighter year compared to 2025 and 2026. So really, it's the second half of this year, maybe early next year, where we have those nine dry dockings and about $14 million of cost associated.

Poe Fratt
Analyst at AG Partners

Great. Thank you so much.

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

Yep. Thanks, Poe.

Operator

Thank you. At this time, we have no further questions, so I'd like to turn it back to our speakers for any closing comments.

Mads Petersen
Mads Petersen
CEO at Pangaea Logistics Solutions

Once again, thank you for joining our call. Should you have any questions, please feel free to contact us at investors@pangaealogistics.com and a member of our team will follow up with you. This concludes our call today.

Operator

We would like to thank everybody for joining the conference today. We appreciate your time and participation, and you may now disconnect.

Operator

On behalf of our client, we would like to thank you for joining. This concludes the program.

Executives
    • Mads Petersen
      Mads Petersen
      CEO
    • Gianni Del Signore
      Gianni Del Signore
      CFO
Analysts
    • Stefan Neely
      Partner at Vallum Advisors
    • Liam Burke
      Analyst at B. Riley Securities
    • Poe Fratt
      Analyst at AG Partners
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