Earnings call transcript: Pangaea Logistics Q4 2024 beats EPS forecast

Pangaea Logistics Solutions reported its fourth-quarter 2024 earnings, surpassing analysts’ expectations with an adjusted earnings per share (EPS) of $0.16, compared to the forecast of $0.10. Revenue also exceeded projections, reaching $147.17 million against a forecast of $139.51 million. Following the announcement, Pangaea’s stock rose 4.96% in premarket trading, reflecting investor optimism amid strong financial performance and strategic expansion. According to InvestingPro data, the company maintains strong fundamentals with a healthy current ratio of 2.05, indicating robust liquidity. The stock currently trades at an attractive P/E ratio of 10.21, suggesting potential value for investors.

Key Takeaways

• Pangaea Logistics exceeded EPS and revenue forecasts for Q4 2024.
• The company’s stock increased by nearly 5% in premarket trading.
• Strategic expansion through the merger with Strategic Shipping (SSI) enhances fleet capacity.
• Adjusted EBITDA increased by 20% year-over-year.
• The company maintains a strong cash position with $86.8 million on hand.

Company Performance

Pangaea Logistics demonstrated robust performance in Q4 2024, with a 20% year-over-year increase in adjusted EBITDA to $23.2 million. The company effectively managed to outperform despite a 22.6% decrease in market rates, highlighting its strategic focus on specialized cargo and challenging trade routes. The merger with SSI has expanded its fleet and market presence, positioning the company well for future growth.

Financial Highlights

• Revenue: $147.17 million, surpassing the forecast of $139.51 million.
• EPS: $0.16 actual vs. $0.10 forecast.
• GAAP Net Income: $8.4 million, or $0.18 per diluted share.
• Adjusted EBITDA: $23.2 million, up $4 million year-over-year.
• Cash from Operations: $19.2 million.

Earnings vs. Forecast

Pangaea Logistics exceeded expectations with an EPS of $0.16, 60% above the forecast of $0.10. Revenue also outperformed, coming in at $147.17 million against a projection of $139.51 million. This marks a significant earnings surprise, reflecting the company’s strategic execution and operational efficiency.

Market Reaction

Following the earnings announcement, Pangaea’s stock rose 4.96% in premarket trading to $5.08. The positive market reaction indicates investor confidence in the company’s strategic direction and financial health. The stock’s movement comes within its 52-week range, with a low of $4.69 and a high of $8.32, suggesting potential for further growth. InvestingPro analysis indicates the stock is currently undervalued, with analysts setting price targets ranging from $6.90 to $11.00. The company also offers an attractive dividend yield of 8.26%, making it particularly interesting for income-focused investors. For detailed valuation metrics and more exclusive insights, check out the comprehensive Pro Research Report available on InvestingPro.

Outlook & Guidance

Looking ahead, Pangaea Logistics projects continued expansion in port services and logistics, with a potential increase in general and administrative expenses by $1-2 million in 2025. The company remains focused on fleet renewal and capital allocation, aiming for sustained growth and market leadership. With a market capitalization of $314.41 million and revenue growth of 5.23% in the last twelve months, the company shows promising momentum. InvestingPro subscribers have access to additional insights, including 6 more ProTips and detailed financial health scores that can help evaluate the company’s growth potential.

Executive Commentary

CEO Mark Silinowski emphasized the company’s strategic focus, stating, "We always look for work that pays a little more than market." He also highlighted the cautious approach to fleet expansion, ensuring thoughtful and sustainable growth. Silinowski expressed optimism about maintaining a consistent dividend policy, aligning with shareholder interests.

Risks and Challenges

• Potential tariffs and port entry fees could impact operational costs.
• Seasonal softness in Q1 2025 may affect short-term performance.
• Market tightness due to limited new ship deliveries could pose challenges.
• Increased vessel operating expenses may pressure margins.
• Economic uncertainties and geopolitical factors could influence market dynamics.

Q&A

During the earnings call, analysts inquired about dividend strategies and port services growth. The management reiterated their commitment to a flexible dividend policy and projected significant growth in port services, particularly in the latter half of 2025. The integration of the SSI fleet was also discussed, with positive initial outcomes reported.

Full transcript - Pangaea Logistic (PANL) Q4 2024:

Mark Silinowski, CEO, Pangaea Logistics Solutions: Thank you, operator, and welcome to the Pangaea Logistics Solutions Fourth Quarter and Full Year twenty twenty four Results Conference Call. Leading the call with me today is CEO, Mark Silinowski Chief Financial Officer, Gianni DelSignore and COO, Mads Peterson.

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 Mark.

Thank you, Stefan, and welcome to those joining us on the call today. After the market closed yesterday, we issued a release detailing our fourth quarter and full year 2024 results. Our fourth quarter performance was a strong finish to a transformational year for Pangaea, 1 in which our strong base of long term contracts and premium rate model supported a greater than 20% year over year increase in adjusted EBITDA despite pronounced softness in the broader drybulk market. Our differentiated cargo strategy and leading market share across global ice class trades have enabled us to drive consistent PCE rate outperformance versus the broader market, culminating in significant growth in fourth quarter profitability. On December 30, we successfully completed our previously announced merger with strategic shipping suite of 15 handysize dry bulk vessels.

This complementary transaction will allow us to expand our business into a smaller size segment of the market, leveraging these smaller ships to grow our debadorings and terminal services offerings. In connection with this transaction, we issued 18,100,000.0 common shares to SSI in exchange for the 15 vessels and we assumed approximately $100,000,000 in vessel indebtedness, all of which have now been incorporated into our balance sheet. Following the conclusion of this transaction, we now have a total fleet of 41 owned vessels, supplemented by short term chartered in ships that bring our operating fleet into a range of 60 to 70 vessels at any given time. With the larger fleet, we are in a strong position to materially expand our logistics and terminal services across a broader footprint of high traffic ports consistent with our strategic focus. While we continue to experience robust demand across all our bulk trades, supported by ongoing economic expansion and domestic infrastructure investments, we recognize the potential headwinds posed by proposed tariffs and new port entry fees in The U.

S. These factors could introduce near term volatility in market rates and they may drive structural shifts within the global shipping and drybulk landscapes. We remain vigilant in monitoring developments and trade policies that have potential implications for our business. Importantly, our asset light, cargo centric operating model designed to leverage a strategic mix of owned and chartered in vessels remains a competitive key advantage. This model enhances our flexibility, cost efficiency and scalability through market cycles, positioning us to effectively manage potential volatility while continuing to drive profitable growth, generate free cash flow and deliver premium TCE returns.

For the fourth quarter of twenty twenty four, we reported adjusted net income of $7,600,000 and adjusted EBITDA of $23,200,000 representing significant year over year growth despite prevailing market rates decreasing by 22.6% during the quarter. Our adjusted EBITDA growth of approximately $4,000,000 compared to last year’s fourth quarter reflects the performance of our active operating model and a full quarter of operations from the two ships we purchased earlier this year, which drove a more than 20% increase in our voyage days. Our TCE exceeded the benchmark index by 48% in the fourth quarter. Looking ahead to the first quarter of twenty twenty five, dry bulk demand has been seasonally soft across all major trade routes. Market prices have been volatile over the last few months due to anticipation, uncertainty and anxiety over international trade, although demand remains consistent.

Through today, we have booked four thousand nine hundred and eighty two shipping days generating a PCE of $11,412 a day for the current twenty twenty five quarter. As we move further into 2025, we will continue to exercise a balanced return focused approach to capital allocation. Our recent vessel acquisitions, fleet combination and JV buyer are a testament to our confidence on our business plan and our disciplined capital allocation strategy that seeks to maximize long term shareholder returns. With that, I’ll hand it over to Johnny for a discussion of our fourth quarter and full year financial results. Thank you, Mark, and welcome to those joining us on the call today.

Our fourth quarter financial results are highlighted by strong earnings growth, sustained TCE premiums relative to the prevailing market and strong free cash flow generation, all during a period where broader demand and market prices softened. Fourth quarter TCE rates were approximately $15,941 per day, a premium of approximately 48 percent over the average published market rate for Supramax and Panamax vessels in the period, which was driven by strong fleet utilization within Arctic trade routes and our broad base of long term contracts and affreightment. Our adjusted EBITDA for the fourth quarter was $23,200,000 an increase of approximately $4,000,000 relative to the prior year period. Our adjusted EBITDA margin increased 180 basis points to 16.7% as strong growth in the total shipping days year over year and lower charter in rates drove operating efficiencies. This dynamic is enabled by our flexible cargo focused business model, which allows us to focus on meeting customer cargo obligations in the most efficient possible manner based on prevailing market conditions.

Our total charter hire expense increased by 1.7% compared to the fourth quarter of twenty twenty three due to a 33% increase in total charter that was almost entirely offset by a 23% decrease in the prevailing market rates for Panamax and Supramax vessels. Our charter in cost on a per day basis was $13,787 in the fourth quarter of twenty twenty four. And through today, we booked approximately seventeen thirty six days at $10,243 per day for the first quarter of twenty twenty five. Vessel operating expenses net of technical management fees increased by approximately 9% year over year from an average of $5,971 per day last year to $6,525 per day in the fourth quarter of twenty twenty four. However, for the full year of 2024, vessel operating expenses net of technical management fees declined by 7% to $5,820 per day.

In total, our reported GAAP net income attributable to Pangaea for the fourth quarter was $8,400,000 or $0.18 per diluted share compared to $1,100,000 or $0.03 per diluted share in the fourth quarter of last year. When excluding the impact of the unrealized losses from derivative instruments as well as other non GAAP adjustments, our reported adjusted net income attributable to Pangea during the quarter was $7,600,000 or $0.16 per diluted share, which was consistent with the fourth quarter of last year. Moving on to cash flows. Total cash from operations decreased by $4,600,000 year over year to approximately $19,200,000 due to a decrease in cash generated by net working capital, which offset improved operating expense operating earnings. At quarter end, the company had $86,800,000 in cash in total debt including finance lease obligations of approximately $4.00 $4,000,000 Our finance leases at the end of the quarter include approximately $100,000,000 of lease obligations associated with the strategic fleet combination, which closed on December 30.

During the quarter, our overall interest expense was $4,700,000 an increase of 10.5% due to new debt facilities entered into during the third and fourth quarter of twenty twenty four. On factoring in the interest expense from leases assumed from the SSI merger, our interest expense would have been approximately $1,300,000 higher, which is the approximate run rate we expect going forward barring material changes in interest rates. Through the successful completion of the SSI acquisition, the strategic deployment of equity to expand our fleet and the recent buyout of the remaining 50% equity interest in our post Panamax ICE Class 1A vessels, we have taken a disciplined and opportunistic approach to capital allocation. These initiatives are designed to maximize long term capital return potential, while positioning the company for continued growth. In the near term, our capital allocation strategy will remain focused on targeted investments in our steam growing logistics operations, the renewal and modernization of our drybulk fleet and the continued reduction of our debt.

Additionally, we remain committed to a consistent and sustainable return of capital strategy. With that, we will now open the line for questions.

Speaker 1: Thank And we will take our first question from Liam Burke with B. Riley Securities. Please go ahead.

Mark Silinowski, CEO, Pangaea Logistics Solutions: Mark, on your partial fixtures for the first quarter, obviously, it’s a the rates in general have been bad, but you really outdistance them. I mean, that’s on a relative basis a pretty impressive number. Is it just your COAs and contracts? What’s contributing to that 40% boost? Liam, we always look for work that pays a little bit more than market.

We’ve always prided ourselves on taking tough cargos, making our ships work hard for what we do. We take dirty cargos, we go into icy waters, we go to places where other people don’t really want to go because the risk the cost of hands, the risk, they’re not willing to pay. So we will do that. We’ve got an excellent operating platform. We’ve got really the ship managers that really contribute to the bottom line for us.

So in addition to the COAs, the contracts that we enter into, we look for things that add value. That’s our whole business plan in in a nutshell. That’s great. Just as a follow on to that, you’ve added new vessels on the year end acquisition. How quickly do you think you can roll those vessels from their traditional chartering to the Pangaea chartering platform?

We’ve made great progress already. I think we’ve done half a dozen different voyages on these ships, the planned voyages, on these ships that in trade that they haven’t done so much of. And I’m talking about taking the ships into the icy waters and taking the dirtier cargos and visiting places where they haven’t been before. So we are making progress already. But in this difficult market, the margins to do all that stuff have shrunk as well as at the rates themselves.

So we hope when the market bounces, we’ve seen a little greener numbers in the last couple of weeks on the drybulk side and on the indexes. We hope to make that happen quickly. Later this year, we should see some improvement in that. Great. And if I could slide in one more quickly.

Your Port Services business generated a little more profitability than you had in the past on similar type revenue levels. Is there anything going on there that allows you to eke out a little more profitability? Yes. What we’ve done is we’ve done more dry bulk voyages, dry bulk business in some of our terminals that pays a little bit more than some of the other stuff we do. But the port side is really bright for us.

We’ve opened up a new port and operation in Aransas near Corpus Christi, a fast growing place that we think we’ll be able to do some really nice business with. We’ve started the actual construction down in Tampa, Tampa Red Wing Terminal, where we’ll bring 20 ships this year loaded with aggregate to discharge and store on that site. That’s a big step for us in the terminal side. So we’re looking at other business in Lake Charles. So it’s really starting to come together for us.

Speaker 1: Thank you. And we’ll take our next question from Poe Frott with AGP. Please go ahead.

Mark Silinowski, CEO, Pangaea Logistics Solutions: Glad you’re all well. When I look at the capital allocation, you highlighted two things. One, fleet renewal and then debt reduction. And with the fleet renewal you added with the special guy, you added Handy. Can you help me understand how to frame the capital allocation and fleet renewal?

Do you think that you have an optimal number of owned vessels right now? Or do you think that, it might be worthwhile to scale back and pay down debt by selling some of the older assets? Oh, boy. Paul, like every ship owner, we are always trying to grow our fleet. But we want to do it cautiously, we want to do it thoughtfully.

We just took on a space slug of new ships, the 15 Handy. That brings us a long way toward our growth goal. There is some renewal to do. We’ve got some older ships reaching the 20 year age. So we will sell off some of those ships as they come up to 20 years of age.

What we do with the proceeds, it really we haven’t decided yet where we should put that money, whether we should pay down debt. We don’t think we’re overleveraged today, Although, in a great trend down, that might not be the best use of capital. We want to be opportunistic in buying ships. So we’ll wait for the market to drop a little bit. And we will want to take advantage of that going forward, but not 15 more this year for sure.

Paul, if I could add on the debt service side for 2025, we basically have steady repayments only, no balloon repayments on our debt facility. So it’s around $11,000,000 of debt service per quarter, pretty steady right until 2027 when we have our first meaningful balloon payment. But then if we look at our debt structure as a whole, We’re fixed on a large portion, about 34 percent of our debt is fixed and then about 27% of our debt is capped or is fixed through an interest rate cap. And then the remaining is floating. So there is, I think, opportunity if we wanted to attack some.

But when I look at debt service for 2025 and even right through 2026, we have a pretty steady repayment forecast ahead and we can be opportunistic if we want to. We’re not forced necessarily to repay anything unless we choose to. And on that fiscal limit comes up in ’twenty seven, that debt is on ships that are readily refinancable. Great. Those metrics are really helpful.

So just on the margin, you’re more of a buyer than a seller with where asset values are right now? Well, we’d like to see asset value come down a tick more before we jump in, but Great. Can Jamie, can you highlight the operating leverage that you with the acquisition of SSI, maybe one way to look at it would be your G and A level. Can you highlight your current per day G and A level or maybe in an absolute level for the first quarter of twenty twenty five? Sure.

From a G and A perspective per day for 2024, the number was about $1,200 per day was our overall G and A cost. The addition of the vessels in our platform is quite scalable when you look at the vessel operation side. The incremental G and A to add the number of vessels that we did is not really a significant increase. So on a per day basis, I do expect it to be relatively consistent per shipping day, correct. On a per ship day, I do expect it to remain relatively consistent or even maybe even come down a little bit as we see some of that sort of economy of scale and our operation really kick in.

So I don’t expect while the number is certainly there will be incremental G and A with the number of people we’ve onboarded as part of the acquisition, about 10 people that were brought on to the team. But on a per day basis, we’re still pretty comfortable. So I think we have we can deploy our operating model in a really efficient way. Great. And do you have sort of, what’s the target for absolute G and A in the first quarter then?

Probably incremental amount of you mean from a, Paul, just to clarify, from a dollar perspective? Yes, dollar. Just total dollar at this point in time, which is the run rate for the first quarter. I think what we have there in the fourth quarter, what we’re showing there is probably a it’s actually probably a good indication for a quarterly rate for next year. So just to clarify, so G and A and the total dollar amounts could be fairly flat, maybe up a little bit, but your shipping days are obviously going to be a lot higher.

You’re running right now, you ran a fleet of 62, you’re 42 owned or 41 owned. Is that a fair way to look at it, Gian? I think for the full year, like I said, I think we’ll probably see an incremental amount. And that number, we have not necessarily disclosed yet. But for the full year compared to $24,000,000 I would say it’s an incremental amount of probably $2,000,000 1 million dollars to $2,000,000 of incremental G and A.

The other thing that impacts the number you’re looking for, the ship, the cost per shipping day, is the number of charter in ships we have at any point in time. Time. Yes. So that can cause that product to be to move up and down. Great.

And then it looks like at year end, you’re running 62. And can you give me sort of either a snapshot right now on how many what’s your total operating fleet or potentially what we should use for an average for the first quarter as far as the operating fleet? Matt here. We probably take lower than that now of maybe around 60, which is not that it fluctuates a little bit. We tend to shrink the feet a little bit when the market is depressed.

So of course the hope is that as the market picks up, the child end business also grows in the rest of the year. Great. And then Jenny or maybe Matt, you can highlight first quarter drydocking and maybe drydocking for the year as far as idle time on the fleet? Yes. So it’s a for us and for many others in the business, it’s a big year for drydocking, right?

We have four ships in drybark right now. We will have 12 in total for the year. So that’s the situation. The ship spend is about twenty five to thirty days in drybark these days. Great.

And congratulations on closing the transaction and also buying in the 50% in order to book. Thank you, Bob. Thanks, Bob. Good to hear.

Speaker 1: Thank you. And we will take our next question from Neil Palmison with Fearnley Securities. Please go ahead.

Mark Silinowski, CEO, Pangaea Logistics Solutions: Yes. Good morning. I’ve been quite extensive amount of questions on capital allocation, but I’d just like to add one more. And the market is where it is. And I guess you’re looking at quite a big reduction in earnings for Q1.

And with your amortization profile being what it is, how should we think about dividend as earnings are a bit suppressed over the coming, let’s say, one, perhaps two quarters? Do you expect to maintain that level or do we see amendments to the run rate dividend that’s been paid over the past couple of quarters? Anil, thanks for the question. The dividend consideration is the quarterly one by the board every meeting. And we look at the market, we look at the cash flow generation capability of our fleet, upcoming capital expenditures like docking.

So we don’t have a fixed formula, but we look at it every quarter. It is our hope to we strive to have a consistent and sustainable dividend. That’s what we talk about every quarter when dividend discussion comes up. Yes, understood. And a bit on your terminal operations, you’re saying that you expect to be complete with expanding those operations in the second half twenty twenty five in Tampa.

Just wondering what sort of earnings that we can expect that the run rate when you’re at full operations? And are you seeing any incremental investment opportunities in that space currently? Johnny, do you want to talk about the upcoming year? What we think an income is when we’re Proportion of Germany. Yes.

For Port and Terminals, what Mark had said earlier, I think we’re seeing a lot of opportunities there. It was a good fourth quarter like that was identified. It was good margins, especially in our especially in our dry bulk side in Fort Everglades and the early morning volume there. But next year, projects are coming online over not really in a straight line manner that can be somewhat lumpy. But we do expect it to grow in 2025 and especially as we get towards the end of the year.

But I think what the fourth quarter is a good indication of a decent run rate of operations for our ports and terminals. And then as projects come on, there will be incremental EBITDA generated, especially for the second half of next year. Year. Sorry, second half of twenty twenty five rather.

Speaker 1: Thank you. And we will take our next question from Michael Maleficent with Sidoti and Company. Please go ahead.

Mark Silinowski, CEO, Pangaea Logistics Solutions: Good morning, you guys and congratulations on the quarter. Thanks, Michael. In your earnings presentation, Yi pointed out that near term growth in shipping capacity is going to be pretty limited, obviously benefiting TCE rates. But looking ahead to the medium term, are there enough ships being delivered to potentially reduce TCE? And does the specialized nature of your business and your port calls kind of insulate you a bit from competitive pressures?

Well, Michael, you hit sort of on right on one of our plans to lean a little bit more towards ports and terminals to get us away from the volatility of the shipping business. We think we’ve done that and demonstrated their work over the past few years where we our performance is a little bit better than the general market. So that is a goal of ours to be a little more consistent, a little more show a little more sustainable income on the bottom line. Regarding the number of shifts, I think you’re talking about the industry, new building deliveries into the business. That was identified as a couple of years ago as a real strength behind the dry bulk industry that the order book was low and that as time went on, there would be some tightness in the market because of the restricted deliveries of new ships into the market.

New building orders have increased some, but they’re still relatively low compared to historic delivery book. And we expect that over the next couple of years that that will continue to have a little cause a little tightness in the market and keep rates a little bit higher. Great. If you’ll permit a follow-up, you stated earlier that you’re planning to be pretty thoughtful and disciplined about capital allocation, particularly debt pay downs. Is there sort of a target ratio for leverage?

I guess we like to see and we look at it in a couple of different ways. We look at debt as it relates to shareholders’ equity on the balance sheet. We look at it going forward in terms of the cash needed to service the debt. We look at it compared to debt outstanding compared to the actual vessel values, fair market values on our of ships we have in our fleet. We look at it in a lot of different ways.

And at this point, we don’t think we’re over leveraged. We think we’re somewhere around 50% if you look at all those ratios together. Yes. Just a comment on the when we look at it from a debt to vessel value perspective, yes, we’re around 50% to 55% from a book value perspective. And then if it’s adjusted, we also look at it from a fair market value perspective.

And I think we’re generally comfortable where we stand. And yes, and then ultimately, when we look at new debt facilities, we set certain thresholds that we don’t want to exceed a certain leverage amount when entering into new facility. But when we look at corporate leverage now, I think we’re pretty comfortable where we stand and what our, as I mentioned, our repayment forecast for the next couple of years, we’re very comfortable. What helped us a little bit in terms of the cash necessary to make debt service is that we fixed interest rates on a significant part of the debt a few years ago and that has paid off for us.

Speaker 1: Thank you. And we will take our next question from Clement Mullens with Value Investors Edge. Please go ahead.

Mark Silinowski, CEO, Pangaea Logistics Solutions: Good morning. Thank you for taking my questions. You have already provided ample commentary on how costs should move going forward. But as we think about the handy sizes, is there any potential for OpEx per day to come in below your figures for Supermaxes and Panamaxes? Any additional color you can provide on that would be greatly appreciated.

Thanks for the question, Clement. I think our estimate is that the OpEx will be fairly similar to our supermax. We don’t really represent the operating cost. Makes sense. Thank you.

And final question for me. This one is more on the modeling side. Could you quantify the amount of operating lease liabilities you had on the balance sheet as of year end? Sorry, could you ask that again? What was the liabilities?

Yes. The amount of operating lease liabilities you have on the balance sheet as of your end for mobile Operating leases? Exactly. Yes. Operating lease, so if I understand the question correctly, the operating, we don’t have any operating leases on the balance sheet.

I’m assuming you’re referring to maybe chartering in the charter in vessels that maybe from an accounting perspective be classified as leases. But all of our charter Are you referring to that? Yes, yes. So our charter in vessels to the extent we don’t charter in vessels for greater than a year. Typically, our average is three to six months, sometimes a little bit longer.

Sorry, sometimes longer or shorter depending on where the market is. Currently, we’re obviously chartering in on a shorter term basis for trips and short charters. So none of our chartered investments would be considered an operating lease and capitalized on the balance sheet, considering our charter and strategy. Makes sense. Thank you for the color.

Thank you for taking my questions.

Speaker 1: Thank you. And we do have a follow-up question from Pophrat with AGP. Please go ahead.

Mark Silinowski, CEO, Pangaea Logistics Solutions: Hi. I just have two more. Mark, you talked about increasing the Steve Doherty business to smooth out the volatility of earnings. We’ve been talking about for a couple of years, but right now it’s 2% of revenues in the fourth quarter roughly. It goes that percentage is likely to go down with the acquisition you made at the end of last year.

Are there any big opportunities out there to to bulk up that business? No pun intended. But are there any big opportunities out there? Or is it just going to go slow and steady and never really get above 5% of total revenue? Well, we were looking at the Panama Canal deal before it was taken away from us by BlackRock, I guess.

But there are big deals out there to do, Poe. But right now, we’re trying to do it on a without spending a lot of money upfront. We’re making progress. We’re doing it without buying land, which is an expensive way to do it. But as we grow and as we show up in more and more places, more and more opportunities are coming to us.

So I think there’s a little bit of momentum that we’re building here that we’ll be able to we’re working on. And, Pogo, just to comment also that a big part of the value of this operation shows up in our TCE, right, is that ability to package services, the trade and fees going into one package. So that part of the business also drives the TC premium that has been made in a couple of times on the call. Okay. And then you know, made a big acquisition at the end of last year.

There was extensive, you know, discussions and negotiations and due diligence leading up to that because it took a while that, you know, for that deal to get across the finish line. You’re seventy days into it. Can you give me an idea of, you know, how it’s going so far, whether there’s been any surprises integrating that fleet? Any either positive or negative that you want to highlight on how that transaction is panning out so far? I think it’s all been positive for us, Paul.

It’s not a totally different business for us, but it does give us a little different look at some of the cargos that are available and ways to offer more services, more of an expanded service to our customers. So our participation has been welcomed by the market. The people that came with us are doing a great job of considering our business plan and doing things a little differently with their fleet. And it’s our goal to have people cross train in the different segments and bring different thoughts to each of the pieces of business we do. So, it’s been nothing but positive actually.

Great. Very helpful. Thank you.

Speaker 1: Thank you. And it appears that we have no further questions at this time. I will now turn the program back to Mark Zylinowski for any additional or closing remarks.

Mark Silinowski, CEO, Pangaea Logistics Solutions: Thank you for joining us on the call today. If you’ve got follow-up questions, we’re always available through our links online. Thanks very much.

Speaker 1: Thank you. This does conclude today’s presentation. Thank you for your participation. You may disconnect at any time.

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