Pangaea Logistics Solutions Ltd.

What they do

Pangaea moves drybulk cargoes including grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone for industrial customers. It provides cargo loading, cargo discharge, port and terminal services, vessel chartering, voyage planning and technical management, and for some customers acts as their ocean logistics department. The fleet typically numbers 60 to 75 owned or short-term chartered-in vessels; as of December 31, 2025 the company owned 39 vessels, wholly or partly through joint ventures, and transported about 26.2 million tons of cargo annually to over 300 ports.

Revenue drivers

• Voyage charters and contracts of affreightment (voyage revenue) — Revenue is earned by carrying cargo from a load port to a discharge port, billed as an agreed rate per ton times tons loaded. COAs typically run one to five years and, with voyage charters, provide the bulk of revenue.
• Time charters (charter revenue) — The company lets owned or operated vessels to a charterer for a specified period at an agreed rate per day. These arrangements contain leases and are reported as a single component including the vessel operating expense non-lease component.
• Terminal and stevedore services — Revenue from inbound and outbound cargo handling at ports the company operates in, typically billed per unit of volume handled, supported by terminal and stevedore expenses such as direct labor, insurance, shore equipment maintenance and trucking.
• Ice-class and backhaul trades — Pangaea operates what it describes as the world's largest fleet of dry bulk vessels over 60,000 dwt with Ice-Class 1A designation, serving ice-restricted areas in the Baltic Sea, Gulf of St. Lawrence and Arctic Ocean. Ice-season trading has historically provided superior margins, and backhaul routes reduce ballast days by earning revenue on routes otherwise traveled without cargo.

Recent performance

For the second quarter ended June 30, 2026, Pangaea reported GAAP net income attributable to Pangaea of $10.2 million, or $0.16 per share, adjusted net income of $16.9 million, or $0.26 per share, and Adjusted EBITDA of $35.0 million on total revenue of $187.1 million. TCE rates were $18,153 per day versus $12,108 per day in the prior-year quarter, a 50% increase, and exceeded the average Baltic Panamax, Supramax and Handysize indices by 10%. Shipping days fell 8% to 5,735 days, which the company attributed primarily to the sale of two owned vessels. Adjusted EBITDA rose 125.1% year over year and Adjusted EBITDA margin was 18.7% versus 9.8% a year earlier; operating cash flow was $21.1 million. Reported revenue was $170.6 million in Q1 2026, $183.9 million in Q4 2025 and $168.7 million in Q3 2025.

Strategy

Management describes a cargo-focused, contract-backed model that uses long-term COAs, a specialized fleet and backhaul positioning to outperform spot market rates. In the Atlantic the company increased exposure to shorter-term time charters and used chartered-in vessels to capture arbitrage opportunities while trading owned vessels efficiently. It advanced its port expansion strategy with the start-up of operations at Port Tampa Bay, Florida, and continues to invest selectively in organic growth. Capital allocation prioritizes sustainable returns of capital, including the declared $0.10 per common share quarterly dividend, alongside maintaining liquidity.

Risks

• Cyclical drybulk rates — The seaborne drybulk industry is cyclical and volatile, and significant decreases in charter and freight rates could hurt revenues, earnings and the ability to comply with loan covenants.
• Vessel values and covenants — Declines in the market value of owned vessels could limit borrowing capacity, trigger covenant breaches, or cause impairment or losses on vessel sales.
• Geopolitical and sanctions disruption — The invasion of Ukraine and resulting US, EU and other sanctions have contributed to inflation, market disruption and commodity price volatility, while escalating Middle East tensions including the crisis involving Iran may further disrupt trade routes and raise fuel and energy costs.
• Macroeconomic and financing conditions — Rising inflation, interest rates, market volatility, economic uncertainty and supply chain constraints, along with changes in China's economic and political environment, could adversely affect the drybulk industry and the company's access to financing.

Outlook

Management said demand for dry bulk shipping has been strong through the first half of 2026, citing Chinese iron ore imports and grain movements from the Atlantic to Asia as key supports. Quarter-to-date in the third quarter, the company had executed 4,873 shipping days at an average TCE of $20,258 per day as it entered its premium summer ice class season. Petersen said Pangaea is focused on commercial discipline, efficient execution and growing integrated logistics capabilities, and believes its operating model, liquidity and capital allocation approach position it to navigate changing market conditions.