ATHENS - OceanPal Inc. (NASDAQ: OP), a global shipping company, announced today that it has agreed to a new time charter contract for its Capesize dry bulk vessel, the m/v Baltimore, with Richland Bulk Pte. Ltd. The contract, set to commence in mid-May, comes with a gross charter rate of $22,000 per day, a significant increase from the current rate of $13,500 per day, both rates subject to a 5% third-party commission.
The m/v Baltimore, a 177,243 dwt Capesize vessel built in 2005, is currently under charter to the same company. The new charter agreement spans from a minimum of September 15, 2024, to a maximum of November 15, 2024. This engagement is expected to generate approximately $2.64 million in gross revenue for the scheduled period.
In a concurrent move, OceanPal Inc. disclosed the signing of a Memorandum of Agreement through a wholly-owned subsidiary for the sale of the Baltimore. The vessel is to be delivered to an unnamed third party by November 20, 2024, at a sale price of $18.25 million before commissions.
Following the completion of this sale, the company's fleet will be reduced to four dry bulk vessels, comprising one Capesize and three Panamax vessels. OceanPal Inc.'s vessels are primarily engaged in the transportation of a variety of dry bulk cargoes, such as iron ore, coal, and grain, and are expected to be mainly employed on short-term time and voyage charters post the current employments.
The announcement is based on a press release statement.
InvestingPro Insights
As OceanPal Inc. (NASDAQ: OP) navigates the dynamic shipping industry with strategic charter contracts and fleet management decisions, the financial health and valuation of the company provide crucial context for investors. OceanPal's recent agreement for the m/v Baltimore at a significantly higher charter rate is expected to bolster revenue, which is especially pertinent considering the company's current financial metrics and market performance.
According to InvestingPro, OceanPal Inc. is currently trading at a low Price / Book multiple of 0.2, suggesting that the company's stock may be undervalued relative to its book value. This can be seen as an opportunity for value investors, particularly in the context of the company's positive revenue prospects from the new charter agreement. Additionally, OceanPal has been managing its cash and debt cautiously, holding more cash than debt on its balance sheet, which is an encouraging sign of financial stability in an industry that is capital-intensive and subject to market volatility.
InvestingPro Data highlights a market capitalization of 18.03 million USD for OceanPal Inc., reflecting the size of the company within the shipping sector. Despite a negative revenue growth rate of -0.67% over the last twelve months as of Q1 2023, the company has managed to maintain a gross profit margin of 29.21%, indicating its ability to control costs relative to revenue. However, the company has not been profitable over the last twelve months, as reflected by a negative P/E Ratio (Adjusted) of -1.89, which investors should consider when evaluating the company's earnings potential.
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