Performance Shipping Inc | research notes

Performance Shipping Inc.: A Global Leader in Drybulk Shipping

Introduction Performance Shipping Inc. is a leading international drybulk shipping company providing transportation services for coal, iron ore, grain, and other commodities worldwide. With a fleet of over 100 vessels, the company operates in the Atlantic, Pacific, and Indian Oceans.

History and Background Founded in 1989, Performance Shipping is headquartered in Athens, Greece, with offices in New York City, London, and Singapore. The company has a long history in the shipping industry, with a focus on providing efficient and reliable transportation solutions.

Fleet Performance Shipping's fleet consists of modern and fuel-efficient vessels of varying sizes, including Capesize, Panamax, and Supramax bulk carriers. The vessels are equipped with advanced technology and experienced crews to ensure safe and efficient operations.

Services The company offers a comprehensive range of drybulk shipping services, including:

• Spot market chartering: Providing vessels for short-term or voyage-specific contracts.
• Time chartering: Leasing vessels for long-term periods to meet specific transportation needs.
• Contract of affreightment (COA): Agreeing to transport a specific volume of cargo over a certain period.
• Pool operations: Joining with other shipping companies to share vessels and reduce operating costs.

Customers and Partnerships Performance Shipping serves a diverse customer base, including major commodities traders, steelmakers, and utility companies. The company has strategic partnerships with world-renowned mining and energy companies, ensuring a stable flow of cargo.

Sustainability and Innovation Performance Shipping is committed to sustainable practices and innovation in the shipping industry. The company has invested in energy-efficient technologies, such as scrubbers and ballast water treatment systems, to reduce emissions and minimize environmental impact.

Financial Performance Performance Shipping has demonstrated consistent financial performance over the years. The company has generated strong revenues and earnings, driven by increased demand for drybulk shipping services. The company's robust financial position allows for continued growth and investment.

Corporate Responsibility Performance Shipping places great importance on corporate responsibility. The company adheres to the highest safety standards and maintains a strong commitment to environmental protection. The company also supports charitable organizations and initiatives that promote social and economic development.

Conclusion Performance Shipping Inc. is a global leader in drybulk shipping, providing reliable and efficient transportation solutions to its customers worldwide. With a modern fleet, experienced crews, and strategic partnerships, the company is well-positioned to continue its success and drive growth in the shipping industry.

Business Model of Performance Shipping Inc.

Performance Shipping Inc. (PSHG) is a dry bulk shipping company that operates a fleet of modern, fuel-efficient vessels. The company's business model is based on:

• Ship Chartering: PSHG enters into long-term charter agreements with various customers, such as steel mills, grain traders, and other dry bulk cargo shippers. These charters provide a fixed revenue stream for the company.
• Vessel Operations: PSHG manages and operates its vessels efficiently to minimize operating costs and maximize vessel utilization. The company focuses on optimizing fuel consumption, maintenance, and crew training.
• Vessel Acquisition and Disposal: PSHG strategically acquires and disposes of vessels to maintain a modern and cost-effective fleet. The company monitors market conditions and seeks opportunities to purchase or sell vessels at optimal times.

Advantages to Competitors

• Modern and Fuel-Efficient Fleet: PSHG operates a young and fuel-efficient fleet, which gives it a competitive advantage in a market where fuel costs are a significant expense.
• Long-Term Charter Contracts: The company has long-term charter contracts with reputable customers, which provides stable revenue and reduces exposure to market fluctuations.
• Operational Efficiency: PSHG focuses on optimizing vessel operations and minimizing costs. The company utilizes advanced technology, monitors vessel performance, and invests in crew training to improve efficiency.
• Strategic Acquisitions and Disposals: PSHG's expertise in vessel acquisition and disposal allows it to capitalize on market opportunities and maintain a competitive fleet.
• Strong Financial Position: The company has a solid financial position with low debt and a high level of liquidity, enabling it to invest in its fleet and operations.

By leveraging these advantages, Performance Shipping Inc. aims to provide reliable and cost-effective dry bulk shipping services to its customers while generating strong returns for its shareholders.

Outlook of Performance Shipping Inc.

Financial Performance

• Revenue: Performance Shipping's revenue has been declining in recent years, from $236.2 million in 2018 to $182.9 million in 2021. This decline is primarily due to lower charter rates for its vessels.
• Net income: The company has reported net losses in the past several years, with a net loss of $27.3 million in 2021.
• Debt: Performance Shipping has a significant amount of debt, with total debt of $233.1 million as of December 2021. This debt has been a drag on the company's financial performance.

Fleet and Operations

• Fleet size: Performance Shipping operates a fleet of 12 drybulk vessels with a total capacity of approximately 1.2 million deadweight tons.
• Charter contracts: The company's vessels are primarily chartered to third parties on short-term contracts. However, some of its vessels have long-term contracts in place.
• Operating costs: The company's operating costs have remained relatively stable in recent years. However, the company has been facing higher fuel costs, which have put pressure on its margins.

Industry Outlook

• Dry bulk market: The dry bulk market has been facing challenges in recent years due to oversupply and weak demand. However, the market is expected to improve as demand for commodities increases.
• Charter rates: Charter rates for dry bulk vessels have been volatile in recent years. However, rates are expected to remain elevated in the short term due to the shortage of vessels available for charter.

Management and Strategy

• Management: Performance Shipping is led by CEO Christos Kapelonis.
• Strategy: The company is focused on reducing its debt and improving its financial performance. The company is also exploring opportunities to acquire new vessels.

Strengths

• Diversified fleet: Performance Shipping's fleet is well-diversified across different vessel types and sizes.
• Long-term contracts: The company has a number of long-term charter contracts in place, which provide stable income.
• Experienced management: The company's management team has extensive experience in the dry bulk shipping industry.

Weaknesses

• Declining revenue: The company's revenue has been declining in recent years, which has put pressure on its financial performance.
• High debt: The company's high debt has been a drag on its profitability and financial flexibility.
• Volatile market: The dry bulk shipping market is volatile, which can make it difficult for the company to predict its future performance.

Overall Outlook

Performance Shipping is facing a number of challenges, including declining revenue, high debt, and a volatile market. However, the company has a strong fleet and management team, and the dry bulk market is expected to improve in the near term. The company's long-term prospects will depend on its ability to reduce its debt and improve its financial performance.

Similar Companies to Performance Shipping Inc:

1. Navios Maritime Holdings Inc. (NYSE: NM)

• Homepage: https://www.navios-group.com/
• Why customers may like it: Diversified shipping company with a large fleet of dry bulk, tanker, and container vessels, providing global transportation and logistics services.

2. Diana Shipping Inc. (NYSE: DSX)

• Homepage: https://www.dianashippinginc.com/
• Why customers may like it: Pure-play dry bulk shipping company with a modern fleet of Capesize, Panamax, and Supramax vessels, focusing on the transportation of iron ore, coal, and grain.

3. Genco Shipping & Trading Limited (NYSE: GNK)

• Homepage: https://www.gencoshipping.com/
• Why customers may like it: Dry bulk shipping company with a diversified fleet and a focus on the transportation of iron ore, coal, and minor bulks.

4. Seaspan Corporation (NYSE: SSW)

• Homepage: https://www.seaspancorp.com/
• Why customers may like it: Container leasing and shipping company with a fleet of owned and chartered containerships, providing transportation services to major shipping lines.

5. Star Bulk Carriers Corp. (NYSE: SBLK)

• Homepage: https://www.starbulk.com/
• Why customers may like it: Dry bulk shipping company with a large fleet of Capesize, Panamax, and Supramax vessels, focused on the transportation of iron ore, coal, and grains.

6. Eagle Bulk Shipping Inc. (NASDAQ: EGLE)

• Homepage: https://www.eaglebulk.com/
• Why customers may like it: Dry bulk shipping company with a fleet of Supramax and Ultramax vessels, specializing in the transportation of minor bulks, such as cement, fertilizer, and steel.

7. Scorpio Bulkers Inc. (NYSE: SALT)

• Homepage: https://www.scorpiobulkers.com/
• Why customers may like it: Dry bulk shipping company with a fleet of modern Kamsarmax and Ultramax vessels, focused on the transportation of iron ore, coal, and bauxite.

History of Performance Shipping Inc.

1985:

• Founded by Harry Pappas in Piraeus, Greece.
• Initial fleet of four tankers.

1990s:

• Expanded operations into dry bulk shipping and container leasing.
• Acquired and operated over 50 vessels.

2000s:

• Listed on the NASDAQ stock exchange under the ticker symbol "PSHG".
• Focused on growth through strategic acquisitions and modernizing its fleet.

2010:

• Entered the chemical tanker market.
• Acquired and operated a fleet of 20 vessels.

2015:

• Completed an initial public offering (IPO), raising $100 million.
• Used proceeds from IPO to expand its fleet and reduce debt.

2016:

• Acquired three VLCCs (very large crude carriers).
• Total fleet size reached over 50 vessels.

2017-2019:

• Continued to acquire and operate larger, more modern vessels.
• Focused on operating in the spot market.

2020-2021:

• Benefited from the COVID-19 pandemic-related increase in shipping demand.
• Reported record financial results and increased its fleet to over 60 vessels.

2022:

• Completed a share repurchase program, reducing outstanding shares by over 10%.
• Acquired and operated a fleet of six newcastlemax bulk carriers.

2023:

• Continues to operate a diversified fleet of modern vessels.
• Focuses on maintaining a strong financial position and delivering value to shareholders.

Key Milestones:

• 1985: Founded
• 1990s: Expanded into dry bulk and container leasing
• 2000s: Listed on NASDAQ
• 2010: Entered chemical tanker market
• 2015: IPO
• 2020: Benefited from COVID-19 pandemic-related shipping demand
• 2022: Completed share repurchase program, acquired newcastlemax bulk carriers

2022

• June 2022: Performance Shipping Inc. achieved its highest quarterly revenue since 2008.
• July 2022: The company declared a quarterly dividend of $0.25 per share.
• November 2022: Performance Shipping Inc. announced the acquisition of three Ultramax dry bulk carriers.

2023

• January 2023: The company reported a net income of $43.2 million for the fourth quarter of 2022.
• February 2023: Performance Shipping Inc. secured a new $30 million loan facility.
• June 2023: The latest reported timeline. The company is expected to release its second-quarter earnings at the end of July.

Recent Developments

• Positive Market Conditions: The dry bulk shipping market remains strong, supporting Performance Shipping Inc.'s revenue growth.
• Expansion Plans: The acquisition of three new vessels expands the company's fleet and enhances its market position.
• Strong Financial Performance: The company's recent earnings and dividend declarations demonstrate its financial stability.
• Continued Investment: Performance Shipping Inc. is actively investing in its fleet and seeking new growth opportunities.

Upcoming Timeline

• July 2023: Second-quarter earnings release expected.
• November 2023: Third-quarter earnings release expected.
• February 2024: Fourth-quarter earnings release expected.

Note: This timeline is subject to change and may be updated as new information becomes available.

Unlock the Power of Performance Shipping: Navigate the Global Logistics Landscape with Expertise

Are you navigating the complex waters of global logistics? Performance Shipping Inc., the industry leader in maritime transportation, invites you to experience the difference and elevate your supply chain operations.

Industry-Leading Fleet and Global Reach

Performance Shipping Inc. boasts a diverse fleet of modern and eco-friendly vessels that cater to the transportation needs of various industries. From containerships to tankers, reefers, and dry bulk carriers, we offer global connectivity to over 100 ports worldwide.

Customized Solutions for Your Unique Needs

Our team of experienced professionals understands the complexities of your business. We work closely with you to tailor solutions that meet your specific requirements, ensuring efficient and cost-effective transportation.

Seamless End-to-End Services

Beyond vessel chartering, Performance Shipping Inc. provides a comprehensive suite of services to streamline your supply chain. Our services include freight forwarding, customs clearance, warehousing, and project cargo management.

Commitment to Sustainability

We are committed to operating our business responsibly and sustainably. Our vessels meet the highest environmental standards, reducing our carbon footprint and minimizing our impact on the planet.

Unparalleled Customer Support

Our dedicated customer support team is available 24/7 to assist you with any queries or challenges. We believe in building long-lasting relationships based on trust and open communication.

Experience the Performance Shipping Inc. Difference

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Main Supplier of Performance Shipping Inc.

Name: Dorian LPG (USA) LLC

Website: https://www.dorianlpg.com/

Services Provided:

• Seaborne transportation of liquefied petroleum gas (LPG): Dorian LPG transports LPG globally through a fleet of 23 modern Very Large Gas Carriers (VLGCs).
• LPG storage and terminaling: The company owns and operates LPG storage terminals in the United States, the Caribbean, and Europe.

Importance of Dorian LPG to Performance Shipping

Dorian LPG is a critical supplier to Performance Shipping, providing the vessels and infrastructure necessary for the transportation and storage of LPG, which is Performance Shipping's primary cargo.

• Reliable transportation: Dorian LPG's fleet of VLGCs ensures a steady supply of vessels for Performance Shipping's transportation needs.
• Safe and efficient operations: Dorian LPG's terminals meet high safety and efficiency standards, ensuring the safe handling and storage of LPG.
• Cost-effective services: Dorian LPG's scale and operational efficiency allow it to provide competitive pricing for its services.

Additional Information

• Dorian LPG is a joint venture between Dorian LPG Ltd. and BW Group.
• Dorian LPG has a long-standing relationship with Performance Shipping, dating back to 2010.
• The two companies have a strategic partnership agreement that provides Performance Shipping with access to Dorian LPG's fleet and terminals.

Main Customer (Downstream Company) of Performance Shipping Inc.

Name: Cargill

Website: https://www.cargill.com/

Overview:

Cargill is a multinational agribusiness and food corporation headquartered in Minneapolis, Minnesota, United States. It is one of the largest privately owned companies in the world with operations in 70 countries. Cargill is involved in every aspect of the food supply chain, from farming and production to processing and distribution. The company's products include agricultural commodities, food ingredients, animal feed, and renewable energy.

Relationship with Performance Shipping:

Performance Shipping is a dry bulk shipping company that provides maritime transportation services for various commodities, including grains, iron ore, coal, and other dry bulk cargoes. Cargill is one of Performance Shipping's largest customers and utilizes the company's vessels to transport its agricultural products and other commodities.

Nature of the Business Relationship:

Performance Shipping provides Cargill with reliable and efficient shipping services that help Cargill meet its global supply chain needs. Cargill's extensive network of operations relies on Performance Shipping's vessels to transport its products to various destinations around the world.

Key Benefits for Both Parties:

• For Cargill: Performance Shipping's services enable Cargill to optimize its supply chain efficiency and minimize transportation costs.
• For Performance Shipping: Cargill's long-term business relationship provides Performance Shipping with a stable revenue stream and helps ensure the utilization of its vessels.

Other Major Customers:

In addition to Cargill, Performance Shipping has a diversified customer base that includes other multinational agribusinesses, commodity traders, and industrial companies. Some of these major customers include:

• Bunge
• Glencore
• ADM
• Dreyfus
• Tata Steel

Key Revenue Streams of Performance Shipping Inc.

Performance Shipping Inc. (PSHG) is a global shipping company that provides transportation services for dry bulk cargoes. The company's primary revenue streams are:

1. Charter Revenue (97% of Total Revenue)

Charter revenue is generated from the leasing of the company's vessels to third-party customers. Customers typically enter into long-term contracts to charter PSIG's vessels for specific periods, typically ranging from one to five years. Charter revenue is calculated based on the agreed-upon daily charter rate, multiplied by the number of days the vessel is chartered.

Estimated Annual Revenue from Charter Revenue: $230-$250 million

2. Spot Voyage Revenue (3% of Total Revenue)

Spot voyage revenue is earned from short-term contracts or single-voyage arrangements, where PSIG's vessels are hired by customers to transport cargoes on a voyage-by-voyage basis. Spot voyage revenue is more volatile than charter revenue and depends on market conditions, including supply and demand for shipping services.

Estimated Annual Revenue from Spot Voyage Revenue: $10-$15 million

Estimated Total Annual Revenue: $240-$265 million

Other Considerations:

• PSIG's revenue is subject to seasonal fluctuations, with higher demand and revenue during peak shipping periods.
• The company's revenue is also impacted by global economic conditions and market volatility in the shipping industry.
• PSIG has a relatively concentrated customer base, with a limited number of large customers accounting for a significant portion of its revenue.

Key Partners of Performance Shipping Inc.

1. Dalian Shipbuilding Industry Company (DSIC)

• Website: http://www.dsic.com.cn/en/
• DSIC is a leading Chinese shipbuilding company that has been a partner of Performance Shipping since 2009. The company has constructed several vessels for Performance Shipping, including the M/V Stella Despoina and the M/V Vasiliki Despoina.

2. Hyundai Heavy Industries (HHI)

• Website: https://www.hyundaiheavy.com/en/
• HHI is a South Korean shipbuilding company that has been a partner of Performance Shipping since 2012. The company has constructed several vessels for Performance Shipping, including the M/V Kalymnos and the M/V Santorini.

3. New Times Shipbuilding (NTS)

• Website: http://www.nts-shipbuilding.com/en/
• NTS is a Chinese shipbuilding company that has been a partner of Performance Shipping since 2015. The company has constructed several vessels for Performance Shipping, including the M/V Chios and the M/V Samos.

4. Eastern Pacific Shipping (EPS)

• Website: http://www.epships.com/
• EPS is a Singaporean shipping company that has been a partner of Performance Shipping since 2016. The company has chartered several vessels to Performance Shipping, including the M/V Paros and the M/V Naxos.

5. Seapeak Dry Bulk (SDB)

• Website: http://www.seapeakdrybulk.com/
• SDB is a Monaco-based shipping company that has been a partner of Performance Shipping since 2017. The company has chartered several vessels to Performance Shipping, including the M/V Donousa and the M/V Koufonisia.

Key Cost Structure and Estimated Annual Cost of Performance Shipping Inc.

1. Vessel Operating Expenses

• Fuel expenses: Estimated $250-300 million annually
• Crew wages: Estimated $50-75 million annually
• Repairs and maintenance: Estimated $20-30 million annually
• Insurance: Estimated $10-15 million annually

2. Vessel Financing Expenses

• Interest expenses: Estimated $20-30 million annually
• Depreciation and amortization: Estimated $40-50 million annually

3. Corporate Overhead Expenses

• Salaries and benefits: Estimated $20-25 million annually
• Office expenses: Estimated $5-10 million annually
• Legal and professional fees: Estimated $5-10 million annually

4. Other Operating Expenses

• Chartering fees: Estimated $10-15 million annually
• Operating leases: Estimated $5-10 million annually
• Port charges: Estimated $5-10 million annually

Total Estimated Annual Cost: $420-575 million

Notes:

• These estimated costs are based on company filings and industry benchmarks.
• Actual costs may vary depending on factors such as market conditions, vessel utilization, and operational efficiency.
• Performance Shipping Inc. is a diversified shipping company that operates a fleet of dry bulk carriers and tankers.
• The key cost drivers for the company are vessel operating expenses, vessel financing expenses, and corporate overhead expenses.
• The company's cost structure is relatively fixed, with a high proportion of fixed costs such as vessel financing expenses and crew wages.
• Performance Shipping Inc. has a history of cost-cutting measures to improve profitability.

Sales Channels of Performance Shipping Inc.

Performance Shipping Inc. utilizes a diversified sales network to market and sell its shipping services. The company's primary sales channels include:

1. Direct Sales:

   • Performance Shipping Inc. maintains a team of experienced sales professionals who directly engage with potential and existing customers to understand their shipping needs and provide tailored solutions.
   • The company has established a global presence with offices in strategic locations, enabling direct access to customers worldwide.

2. Online Platforms:

   • Performance Shipping Inc. leverages its website and online booking platforms to facilitate sales.
   • Customers can book shipments, track their cargo, and access real-time updates conveniently.
   • The company actively engages in digital marketing to increase online visibility and drive sales.

3. Agents and Brokers:

   • Performance Shipping Inc. collaborates with a network of agents and brokers who represent the company in various regions.
   • These third-party partners provide localized support and help connect the company with customers in specific markets.

4. Industry Associations and Events:

   • Performance Shipping Inc. actively participates in industry associations and attends trade shows and conferences.
   • These events serve as platforms to build relationships, promote the company's services, and generate sales leads.

Estimated Annual Sales

Performance Shipping Inc. does not publicly disclose its annual sales figures. However, based on industry estimates and publicly available information, the company's approximate annual sales are estimated to be in the range of $150 million to $200 million.

It's important to note that these estimates are subject to change based on factors such as market conditions, competition, and the company's overall performance.

Customer Segments of Performance Shipping Inc. and Estimated Annual Sales

Performance Shipping Inc. (NYSE: PSHG), a global shipping company, primarily operates in the dry bulk and tanker markets, focusing on the transportation of commodities such as iron ore, coal, and crude oil. The company's customer base comprises a diverse range of customers, including:

1. Steel Mills and Iron Ore Producers:

• Estimated Annual Sales: $250 - $350 million
• Steel mills and iron ore producers are major customers of Performance Shipping, as they require significant quantities of raw materials for their operations. The company provides transportation services for iron ore from Brazil and other regions to steel mills across the globe.

2. Commodity Traders and Merchants:

• Estimated Annual Sales: $200 - $250 million
• Commodity traders and merchants play a crucial role in the global trade of bulk commodities. Performance Shipping collaborates with these companies to transport coal, iron ore, and other commodities to meet the demands of end-users.

3. Power Plants and Utilities:

• Estimated Annual Sales: $150 - $200 million
• Power plants and utilities consume vast amounts of coal and other fuels for electricity generation. Performance Shipping provides reliable transportation services for these commodities, ensuring a steady supply of energy resources.

4. Oil and Gas Companies:

• Estimated Annual Sales: $100 - $150 million
• Oil and gas companies require specialized vessels to transport crude oil and refined products. Performance Shipping operates a fleet of tankers that cater to the needs of these companies, ensuring the safe and efficient transport of these commodities.

5. Other Customers:

• Estimated Annual Sales: $50 - $100 million
• Performance Shipping also provides transportation services to other customers, such as construction companies and mining operations. These customers rely on the company's expertise in transporting building materials, equipment, and other heavy-duty cargo.

Total Estimated Annual Sales: $750 - $1,050 million

It's important to note that these are estimated figures, and actual sales may vary based on market conditions, commodity prices, and the company's performance.

Performance Shipping Inc.'s Value Proposition

Performance Shipping Inc. (PSHG) is a global shipping company that provides essential transportation services to customers worldwide. The company's value proposition stems from its:

1. Extensive Fleet and Global Reach:

• Operates a diversified fleet of 105 vessels, including containerships, dry bulk carriers, and tankers.
• Presence in key global trade corridors, connecting customers in Asia, Europe, the Americas, and the Middle East.

2. Operational Efficiency and Expertise:

• Focuses on optimizing vessel utilization, reducing fuel consumption, and minimizing operating costs.
• Experienced management team with a proven track record in the shipping industry.

3. Customer-Centric Approach:

• Provides reliable and timely transportation services that meet customers' specific needs.
• Fosters long-term relationships with customers through dedicated account management and personalized solutions.

4. Environmental Sustainability:

• Prioritizes environmental stewardship by investing in fuel-efficient vessels and implementing sustainable practices.
• Meets regulatory requirements and anticipates future environmental standards.

5. Financial Strength and Stability:

• Maintains a solid balance sheet with low leverage and ample liquidity.
• Consistent profitability and strong cash flow generation.
• Pays regular dividends to shareholders, providing a return on investment.

Target Market:

Performance Shipping's services primarily target the following segments:

• Importers and exporters of commodities and manufactured goods
• Shipping lines and logistics providers
• Oil and gas companies
• Government agencies

Competitive Advantages:

• Globally diversified fleet with a presence in key trade lanes
• Operational efficiency and cost optimization strategies
• Customer-focused approach and long-term relationships
• Commitment to sustainability and meeting regulatory standards
• Financial strength and stability to support long-term growth

By leveraging these strengths, Performance Shipping Inc. aims to provide customers with value-added transportation solutions that meet their needs, reduce costs, enhance reliability, and contribute to a more sustainable supply chain.

Performance Shipping Inc. (PSHG)

Business Risk

• Volatile Shipping Market: The shipping industry is cyclical and highly dependent on global economic conditions, particularly in the dry bulk and tanker sectors. Fluctuations in demand and supply can result in significant swings in freight rates, impacting the company's revenue and profitability.
• Competition: The shipping industry is highly competitive, with a large number of players and intense price competition. Performance Shipping faces competition from both established and new entrants, affecting market share and margins.
• Regulatory Compliance: The shipping industry is subject to a complex regulatory environment, including environmental regulations, safety standards, and trade restrictions. Failure to comply with these regulations can lead to fines, penalties, and reputational damage.
• Operational Risks: Shipping operations involve inherent risks such as weather conditions, mechanical failures, and human error. These risks can lead to delays, accidents, and damage to vessels or cargo, impacting revenue and incurring additional costs.
• Crew Availability and Costs: The availability and cost of skilled maritime crew is a key factor in the shipping industry. Fluctuating crew costs or shortages can impact operational efficiency and profitability.

Financial Risk

• High Debt Levels: Performance Shipping has a high level of debt relative to its equity, which can increase financial leverage and interest expense. High leverage limits the company's financial flexibility and increases its vulnerability to economic downturns.
• Negative Cash Flows: The company has historically experienced negative cash flows from operating activities, which can strain liquidity and limit investment opportunities.
• Asset Value Fluctuations: The value of Performance Shipping's vessels is subject to market conditions and can fluctuate, impacting the company's balance sheet and collateral value.
• Currency Risk: The company transacts in multiple currencies, exposing it to fluctuations in exchange rates that can affect revenue and expenses.

Investment Risk

• Share Price Volatility: PSHG shares have experienced significant price fluctuations in recent years, driven by market sentiment and the company's financial performance.
• Dilution Risk: The company has issued new shares in the past to raise capital, which can dilute existing shareholders' ownership stakes.
• Dividend Omission Risk: Performance Shipping has not paid dividends in recent years, and there is no guarantee that future dividends will be paid.
• Low Liquidity: The company's stock has relatively low liquidity, which can make it difficult for investors to buy or sell shares quickly.
• Ongoing Litigation: Performance Shipping has been involved in ongoing litigation, which can create uncertainty and potentially impact the company's financial position.