Pyxis Tankers Eyes Selective Vessel Acquisitions to Further Enhance Shareholder Value

Pyxis Tankers Inc. (NASDAQ:PXS), a prominent player in the maritime transportation of refined petroleum products and dry bulk commodities, presented its corporate updates and sector outlook during the 2025 Capital Link Company Presentation Series. The presentation also featured insights on market and geopolitical dynamics from Pyxis Tankers’ senior management, including Chairman & CEO, Mr. Valentios (Eddie) Valentis , and CFO & Treasurer, Mr. henry williams .

Highlights

• Strong Financial Growth: 25% increase in TCE revenue ($34M) and 39% growth in adjusted EBITDA ($20.7M) for 9 Mos. 2024, with a significant cash position of $43.7M.
• Strategic Fleet Positioning: Operating a modern fleet of six mid-sized eco-vessels, with strong Q1 2025 charter coverage—72% of MR days booked at $24,750/day and 68% of bulker days at $15,400/day.
• Market & Geopolitical Dynamics: Benefiting from projected near-term 3.3% annual GDP growth, oil demand increases, and evolving global trade shifts due to ongoing Russian/Ukraine conflict, Middle East tensions, OPEC+ production changes and increasing U.S. sanctions.
• Enhancing Shareholder Value: ~ Completion of $3M common buyback program along with full redemption of 7.75% Series A Cumulative Convertible Preferred Stock during 2024 has reduced Company’s equity dilution by almost 20%, reflecting management's commitment to enhancing shareholder value.

To watch the full discussion, please visit the following link:

Fleet Overview and Market Positioning

Pyxis Tankers operates a modern fleet of six mid-sized eco-vessels, comprising three product tankers and three dry bulk carriers. The Company holds two controlling interests in joint ventures owning a Kamsarmax bulker and an Ultramax vessel, as well as a fully owned Kamsarmax carrier. The fleet is well-positioned to take advantage of the global demand for seaborne transportation of refined petroleum products and dry bulk commodities.

Mr. Valentis emphasized the Company’s preference for mid-sized vessels, which provide operating flexibility and diversification. We believe mid-sized vessels offer the most versatility, allowing access to a wide range of global ports and broad cargo carrying capabilities, ensuring resilience in both strong and weak markets. he stated.

As of January 24th, 72% of available days in Q1 2025 were booked for MRs at average estimated TCE* rate of $24,750/day and 68% of days for bulkers at avg. estimated TCE of $15,400/day, allowing the Company to benefit from potential increases in charter rates as well as predictable cash flow under short-term time charters.

Financial Performance & Capital Allocation

Mr. Williams provided an overview of the Company’s financial performance for the first nine months of 2024. Pyxis Tankers reported a 25% increase in time charter equivalent revenues, reaching over $34 million. Adjusted EBITDA grew by 39% to $20.7 M, in comparison to the same period in 2023. For the most recent period, net income was $12.4M, lower than the 2023 period which benefitted from an $8 million gain from the sale of an MR tanker. For the nine months ended September 30, 2024, fully-diluted EPS was $1.06.

The Company's capitalization at September 30, 2024, shows a total cash position of nearly $43.7M, with a net debt to total capitalization ratio of 22%. ?He emphasized the Company’s efforts to enhance shareholder value through its buyback program, which had nearly exhausted its $3 million allocation, resulting in the repurchase of 730K common shares since the start in summer of 2023. During 2024, the Company also redeemed all of its outstanding 7.75% Series A Cumulative Convertible Preferred Stock, which eliminated potential shareholder dilution of ~1.8M common shares. Thus, the Company has spent approximately $13.1 million, in total, for equity re-purchases in order to save potential shareholder dilution of 2.53 million common shares in aggregate or 19.4% of diluted common shares. As of January 24, 2025, there were ~10.49 M common shares outstanding, with a public float of approximately 4.37 million PXS shares.

Market Dynamics

The product tanker market, which is closely tied to global GDP growth, is expected to benefit from a projected 3.3% GDP growth in 2025 and 2026. The International Energy Agency (IEA) revised its global oil consumption estimates to 1% growth for 2025, while OPEC+ announced a gradual unwinding of production cuts starting in April 2025. These factors are expected to support crude prices and tanker demand.

In contrast, the dry bulk market has faced volatility, with rates declining over the past six months. However, Mr. Valentis remains optimistic that Chinese government stimulus programs and seasonal grain shipments in Q2 2025 could help stabilize and potentially improve demand. In particular, as the global energy transition is driving increased shipments of bauxite and copper, which are essential for electric vehicle production and renewable energy infrastructure.

Geopolitical Forces Shaping Global Shipping ?

The significant impact of geopolitical developments on the shipping industry was a big part of the conversation as well. The CEO provided a more detailed analysis, expanding on the evolving geopolitical landscape and its impact on trade flows and market dynamics. He observed that several geopolitical developments are influencing global shipping, including the Biden administration’s designation of major Chinese shipping companies, such as COSCO and CIMC, as military-linked entities. This classification may deter U.S. companies from engaging with these firms. While the immediate impact on Pyxis Tankers' sectors appears limited, this move could pave the way for further restrictions under a Trump presidency. Meanwhile, Shandong ports in eastern China will ban sanctioned Russian and Iranian crude oil shipments starting March 12, 2025 prompting refiners to shift sourcing to traditional shipping channels. This change is expected to reduce dark fleet activity and improve demand for compliant vessels.

In January, the U.S. Office of Foreign Assets Control (OFAC) sanctioned an additional 183 vessels, including 161 tankers, affecting approximately 10% of the global MR fleet. These restrictions could further tighten vessel availability and support compliant fleets, though their impact will depend on enforcement. The possibility of expanded U.S. tariffs under Trump’s trade policies—including 25% tariffs on Canadian and Mexican crude imports and 10-60% tariffs on Chinese goods—raises concerns over potential retaliatory actions, trade disruptions and inflation. In the product tanker sector, U.S. refinery throughput may face challenges, driving up fuel prices in the short term while increasing reliance on long-haul imports from the Middle East.

The Israeli-Hamas ceasefire could gradually restore Suez Canal vessel transits, currently down over 50% due to Red Sea attacks. A return to normal trade flows may increase tonnage supply but have a limited impact on product tanker demand. Meanwhile, uncertainties around U.S. policy on Iran, the Russia-Ukraine war, and green transition policies add further complexity to the shipping sector. The industry remains watchful as markets adjust to potential policy changes during Trump’s first 100 days in office.

Fleet Expansion & Acquisition Opportunities

Pyxis Tankers appears poised to capitalize on acquisition opportunities in both the tanker and dry bulk sectors. Their strong financial position and long-standing industry relationships enable it to pursue growth when market conditions allow it. “We are opportunistic and will consider acquiring additional vessels if the market environment and price are right,” Mr. Valentis said.

The Company’s decision to diversify into dry bulk two years ago was driven by attractive asset values and a desire to mitigate risks associated with the cyclical nature of the tanker market. “We made a counter-cyclical move by entering the dry bulk space when asset values were relatively low,” Mr. Valentis explained. “This diversification allowed us to balance our exposure to different market segments.”

Addressing Shareholder Concerns

During the Q&A session, Mr. Williams addressed shareholder concerns about the Company’s share price and capital allocation plans. He commented that despite strong financial and operating performance, Pyxis Tankers was currently trading at significant valuation discounts - Price to NAV of 30%,? P/E ?(2025E) ratio of 2.4x,? EV/EBITDA (2025E) multiple of 3.3x and Price to Adjusted Tangible Book Value of ~40%. “We are focused on creating value through operational excellence, strategic acquisitions and prudent capital management,” he said.

With a current stock price of less than $4, Pyxis Tankers continues to provide a compelling value proposition in comparison to standard valuation metrics and its U.S.-listed peers. The Company continues to focus on factors within its control, including maintaining solid operating and financial performance, enhancing shareholder communications, and expanding investor and Wall Street engagement, including broadening its equity research coverage.

Mr. Valentis also underscored management’s alignment with shareholders, noting, “Remember, we are sailing in the same boat with our common holders, as management owns 58% of the stock.”

Despite the ever-changing tides of global geopolitics and market volatility, Pyxis Tankers remains steadfast, charting its course with resilience and vision. With a sharp eye on acquisition opportunities, it remains focused on sustainable growth and long-term value for all its investors.

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