Key Financial Results
First quarter of 2021 compared to the First quarter of 2020
Earnings by product sales Three months ended March 31, Net sales volumes per product 2021 2020 Crude Oil Sales $ -$ 616,000 Gas Oil Sales 870,000 1,166,000 Lubricants Sales - 113,802 Hires & Freights Sales 230,000 252,080 Other Revenues / Discounts 404,235 - Totals$ 1,504,235 $ 2,147,882
Refer to the "Results of Operations" section beginning on page 12 for a discussion of our financial results.
Executive Overview
The company maintain its principal marketing and operating offices at 1, Akti
Xaveriou, 18538 Piraeus,
Business Environment and Outlook
Earnings of the company depend mostly on the profitability of its crude oil business segment. The most significant factor affecting the results of operations is the price of crude oil, which is determined in global markets outside of the company's control. The price of crude oil has fallen significantly since mid-year 2020. The downturn in the price of crude oil has impacted the company's results of operations, cash flows, leverage, capital and exploratory investment program and production outlook. A sustained lower price environment could result in the impairment or write-off of specific assets in future periods. Similarly, impairments or write-offs have occurred, and may occur in the future, as a result of managerial decisions not to progress certain projects in the company's portfolio. We have reacted to the downturn by effecting reductions in operating expenses, pacing and re-focusing of capital and exploratory expenditures. Our lack of cash liquidity remains on low levels for the rest of the year and undoubtedly shall continue affecting our operations and cash flow. In addition, the sea-transpiration impacted hardly due to global low demand of oil products.
Response to Market Conditions and COVID-19 During the pandemic period the travel restrictions and other constraints on economic activity were implemented in many locations around the world to limit the spread of the COVID-19 virus. Lower commodity prices negatively impacted the company's first quarter 2021 financial and operating results. While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results will likely continue to be challenged in future quarters. Due to the rapidly changing of environment, there continues to be uncertainty and unpredictability around the extent to which the COVID-19 pandemic will impact our results, which could be material.
Refer to the "Cautionary Statements Relevant to Forward-Looking Information" on Page 2 and to "Risk Factors" in Part II, Item 1A, on page 16-17 for a discussion of some of the inherent risks that could materially impact the company's results of operations or financial condition.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Operating sectors
Our business operates in the downstream and midstream sectors of the energy industry, where we acquire and supply crude oil, and engage in the refining and marketing of refined products and lubricants. As a supplier, we procure crude oil from our direct sources and deliver by our tankers fleet to buyers' destinations. We provide our customers with services that require sophisticated logistical operations designed to meet their strict oil quality and delivery scheduling needs. Throughout our history, we have expanded our business capabilities through strategic alliances, select business and vessel acquisitions, and the establishment of new service centers.
Other Businesses
Effected as on
Our key business segments
The following are descriptions of our recent initiatives undertaken in each of our key business segments:
Upstream; Earnings for the upstream segment are closely aligned with industry
prices for crude oil. Crude oil prices are subject to external factors over
which the company has no control, including product demand connected with global
economic conditions, industry production and inventory levels, technology
advancements, production quotas or other actions imposed by the
Downstream: As on
Midstream; The outbreak of COVID-19 pandemic occurred the ceased of our entire fleet operations and employments which resulted the complete elimination of freight and hire incomes, while the fleet expenses remained on the same levels during the first quarter 2021. Nevertheless, we believe the shipping industry will be rectified and return to the normal levels, therefore we still seek to expand our midstream operations in other international ocean routes by adding to our fleet larger and younger tanker vessels. We are monitoring the vessel market for opportunities while we are also working to secure the necessary funding for expansion. Our business strategy is based in part upon the expansion of our business to new, or within existing, markets. In order to expand our operations, we will be required to use cash from operations, incur borrowings or raise capital through the sale of debt or equity securities in the public or private markets.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
The following section presents the results of operations and variances on a before-tax basis for the company's business operations, as well as for "All Other."
Our operating revenues are driven primarily of the commodities trading sales and our tankers fleet employment days during which our vessels are generating revenues, while our financial results are subject to a number of sectors and reflects to the following factors:
Cost of commodities; is the cost we purchase the oil products -mainly the crude oil- and such cost is based either on Brent Index prices or Fixed price, the quality and quantity of the product.
Commodities Operating Expenses; relates to products surveys before and after the shipment, bunkers supplied to the employment vessel, cargoes surveys, loading/unloading expenses, agency and representative services.
Shipping & Logistic Expenses; includes the sea freight and mobilization cost, the performed loading and discharging of the product, and any expenses occurred during the shipping time from the loading point up to unloading facilities.
Vessels Operating Expenses; includes crew wages and bonuses, their medical support and travelling, maintenance and repairs to the vessels hull and their machineries, expenses for supplies of spare-parts and consumable stores, paints, lubricants, fresh water, bunkers, agency services, etc.
General and Administrative Expenses; relates to our directors, officers and
managers salaries and compensations, shore staff wages, employee's federal
insurance, offices lease and utilities, telecommunications, travelling and
representations of our officers, our agency fees we pay to our branch's offices
in USA,
Corporate Expenses; are all company's expenses and includes, our executive's compensations, attorney's fee, Auditors and accountant fees, Consultant's and P/R fees, Transfer agents of our stock, and miscellaneous.
Other factors may affect our Results of Operations; In addition to the said
expenses there are factors beyond of our control which may affect seriously our
operations results. Inasmuch as we trade also
EBITDA and Adjustment; EBITDA represents net income before expenses, taxes and depreciation. Adjusted EBITDA represents net income before expense, taxes, taxes, depreciation and amortization of dry-docking.
Three months endedMarch 31, 2021 2020
Operating Earnings / (losses)
Operating losses of during the first quarter of 2021 amount to
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