- Performance Shipping signs a four-year time charter deal with Mercuria for a new LR1 tanker delivering in early 2027.
- The fixed-rate contract provides stable earnings and boosts the company’s revenue backlog to $255 million.
- The agreement enhances fleet employment coverage and supports long-term value creation amid market volatility.
Performance Shipping Inc. (NASDAQ: PSHG), a global tanker operator, announced it has signed a long-term time charter agreement with Mercuria Energy Trading S.A. through a wholly-owned subsidiary. The deal involves the company’s fourth LR1 newbuilding tanker, expected to be delivered in early 2027. Under the contract, the vessel will be chartered to Mercuria for four years at a daily gross rate of $23,750, with options for three additional one-year extensions. Each of the first two option years includes a rate increase of $850 per day, while the third optional year, if mutually agreed, would include an increase of $1,200 per day. Employment will begin immediately upon the vessel’s delivery.
Enhancing Earnings Visibility and Stability
This charter is expected to generate consistent and predictable cash flows, with earnings comfortably above the vessel’s breakeven level. As a result, the agreement strengthens the company’s financial foundation and visibility into future revenues, particularly from 2027 onward. It also increases the fixed coverage of the fleet, reducing reliance on the volatile spot market.
CEO Highlights Strategic Value of Partnership
Andreas Michalopoulos, CEO of Performance Shipping, expressed enthusiasm over the new partnership with Mercuria, one of the world’s leading independent energy and commodity trading groups. He emphasized that the deal highlights charterers’ continued confidence in the company and adds approximately $35 million to Performance Shipping’s secured revenue backlog, raising the total to around $255 million. This strategic move enhances operational flexibility and lowers the breakeven threshold, supporting resilience in uncertain market environments.
Forward-Looking Statement Disclaimer
This announcement includes forward-looking statements under the U.S. Private Securities Litigation Reform Act of 1995. These statements reflect expectations and projections regarding future operations, charter arrangements, vessel deliveries, market conditions, and other outcomes. Such statements are based on assumptions and are subject to numerous risks and uncertainties beyond the company’s control. These include global economic conditions, oil production trends, charter rate fluctuations, operational costs, regulatory changes, geopolitical conflicts, pandemics, financing availability, and other critical factors. Investors are advised to consult the company’s SEC filings for a comprehensive review of the risks that may impact actual results.
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Source: GlobeNewswire
