Pangaea Logistics Solutions Ltd.

Good morning. My name is Erica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangea Logistics Solutions Second Quarter 2026 Results Conference Call. Today's call is being recorded and will be available for replay beginning at 11 a.m. Eastern. The recording can be accessed by dialing 800-925-9941 for domestic or 402-220-7000. All lines are currently muted, and after the prepared remarks, there will be a live question and answer session. If you would like to ask a question during the Q&A segment, please press star 1 on your phone. If your question has been answered, you may remove yourself from the queue at any time by pressing star 2. We do ask that you please pick up your handset for optimal sound quality. It is now my pleasure to turn the floor over to Stephan Neely with Fallon Advisors, Please go ahead.

Thank you, operator, and welcome to the Pangea Logistics Solutions Second Quarter 2026 Results Conference Call. Leading the call with me today are CEO Mads Peterson and Chief Financial Officer Gianni Del Signore. 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. Thank you, Stefan, and welcome to those joining us on the call today. We generated strong results in both revenue and profitability during the second quarter.

Our financial performance was driven by strong execution across both our owned and charted increase, as well as balanced positioning of our assets to take advantage of stronger overall demand, especially in Asia. Robust markets contributed to a 50% increase in our TCE rates for the second quarter. Notably, our TCE rates averaged 10% above the prevailing market for the Panamax, Supermax, and Antisize indices. This premium reflects the benefits of our fleet positioning strategy, the value of our operating platform, long-standing customer relationships, and ability to manage a volatile market effectively. We generated significant operating leverage from the favorable market environment with second-year quarter adjusted EBITDA growing by nearly 20 million year-over-year to 35 million. Just as important, these results highlight the value of the business model Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Terminal and stevedore revenue grew 11% year-over-year to approximately $4 million. We continue to expect roughly $3 million of incremental EBITDA from these operations on a full-year basis. Specifically, this is recurring revenue business that deepens our integration into customer supply chains beyond ocean freight, and it pairs naturally with our supermax and handy-sized fleet. We also advanced our fleet renewal strategy. During the second quarter, we completed the previously announced sale of the 2006-built Bolshei Makka for 9.6 million. This follows the sale of the Bol Freedom late last year, also for 9.6 million, and together these transactions reflect a consistent approach of monetizing older tonnage at attractive values, avoiding the capital and oil fire associated with upcoming dry dockings, and steadily improving the efficiency and environmental profile of our feed. Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen the midsize and smaller classes where we are most active. Miner bought trades, which are central to our cargo book, likewise grew compared to the prior year. Encouragingly, this momentum continued into the third quarter. Our outlook for the balance of 2026 remained positive. At the market level, we expect moderate fleet growth to be broadly offset by comparable ton-mile demand, with the continued disruption and lengthening of trade routes, translating massive cargo volume growth into stronger ton-mile demand. Daniel Schildt, Daniel Schildt, Daniel Schildt, Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Thank you, Mads, and welcome to those joining us on the call today.

Our second quarter financial results were highlighted by sustained TCE premiums relative to the prevailing market. Second quarter TCE rates were $18,153 per day, a premium of 10% over the average published market rate of $16,502 per day for Panamax, Supermax, and Handy-sized vessels in the period. Our adjusted EBITDA for the second quarter was $35 million. Our year-over-year increase of nearly $20 million Our total charter hire expense increased by 24% compared to the second quarter of 2025 due to an increase in market rates to charter in vessels. Our chartering cost on a per day basis was approximately $16,816 per day in the second quarter. And through today, we've booked 2,200 days at $17,537 per day for the third quarter. Vessel operating expenses were essentially flat year over year. On a per-day basis, through the second quarter of 2026, vessel operating expenses, including technical management fees, was $6,247 per day, a 2% increase from the prior year. Total general and administrative expenses increased by 25%, from $7.2 million to approximately $9 million. The increase was primarily due to an increase in incentive compensation expense Daniel Schildt, Daniel Schildt, Daniel Schildt Some of these same derivatives translated into significant unrealized gain during the first quarter as fuel prices increased due to the escalation of the conflict with Iran. The first quarter's unrealized gain and the second quarter's unrealized loss essentially offset each other, leaving us in a neutral position for the year. More importantly, all of our hedges are placed against our own bunker requirements over the course of the year. Keeping our fuel cost management aligned with our actual physical consumption. When excluding the impact of the second quarter unrealized loss from derivative instruments, as well as other non-GAAP adjustments, our reported adjusted net income was $16.9 million or 26 cents per diluted share. Moving on to cash flows. Our strong profitability during the quarter resulted in robust operating cash flow. This, combined with $9.7 million of cash proceeds received from the sale of the bulky maca during the quarter, drove our unrestricted cash balance to $105 million. At quarter end, we had total debt, including finance lease obligations, of approximately $350 million. And to note, our current portion of long-term debt increased to $40 million due to a $24 million balloon payment, which we expect to refinance in the coming months. They were also pleased to announce an increase in our quarterly dividend to $0.10 per share. This increase reflects the strengthening fundamentals in the balance sheet of the business and underscores our commitment to returning capital to shareholders, consistent with the disciplined capital allocation strategy we have always followed. Looking ahead, we will continue to allocate capital with a focus on preserving financial flexibility, supporting the growth of our integrated logistics platform, and returning capital to shareholders. We remain focused on investments that enhance the durability of our earnings base, including the expansion of our terminal and port service capabilities and ongoing fleet renewal initiatives that improve efficiency, support customer needs and position us for evolving regulatory requirements. With that, we will now open the line for questions.

Thank you. As a reminder, at this time, If you would like to ask a question, please press the star 1 on your touch-tone telephone. If at any point you find your question has been answered, you may remove yourself from the queue by pressing star 2. Again, it is star and 1 to ask a question, and we're going to be pausing briefly for questions to queue. Okay, and we'll start with our first question from Leanne Burke with B. Riley Securities.

Thank you. Good morning, Mads. Good morning, Gianni.

Good morning.

Mads, you talked about activity in the Pacific region. Is this a new strategy for you? I typically think of your fleet active in the Atlantic with very little activity in Asia. Have you changed your positioning strategy at all?

No, I don't think it's a bit of a backup, but of course, we want to grow it in that region, and I think just as a Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen

uh gianni you talked about a balloon payment due this year you have plenty of cash how do you balance refinancing versus just taking your cash balance paying it down um and i'll throw in the question of raising the dividend and how do you balance everything yeah it's what we look at uh all the time liam and you know what we're seeing

As far as margins on debt facilities, we're really seeing competitive rates on margins. The market seems to be reacting, and there's a lot of opportunities for some well-priced debt. So we're looking at it. The balloon payment I referenced, it's in a joint venture. It's our Nordic Bulk Holdings Company joint venture with Glencore. Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen And again, that is the star and one. If you would like to ask a question, any time your question is answered, you may remove the question by pressing star two.

Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen

Daniel Schildt, Gianni Del Signore, Mads Rosenberg

Daniel Schildt, Daniel Schildt,

Daniel Schildt, Gianni Del Signore, Mads Rosenberg Boye Petersen

Daniel Schildt, Gianni Del Signore, Mads Rosenberg Daniel Schildt, Daniel Rosenberg Boye Petersen

of um costs associated with that and then next year we have a little bit of a lighter uh a little bit of a lighter year um compared to 2025 and 2026. so really it's the second half of this year maybe early next year where we have those nine dry dockings and about 14 million of costs associated great thank you so much yep

Thank you. And at this time, we have no further questions, so I'd like to turn it back to our speakers for any closing comments.

Once again, thank you for joining our call. Should you have any questions, please feel free to contact us at investors at pangeas.com, and a member of our team will follow up with you. This concludes our call today.

We'd like to thank everybody for joining the conference today.

On behalf of our client, we would like to thank you for joining. This concludes the program.