Performance Shipping Inc. (PSHG): Business Model Canvas [Dec-2025 Updated]

You're looking at Performance Shipping Inc., and honestly, the recent fleet moves and charter deals tell the whole story of their strategy as of late 2025. This isn't just about moving crude oil; it's about locking in stability with a modern fleet-think that $257 million revenue backlog as of October 2025-while managing the high costs of maintaining eco-design vessels and servicing debt, like that $100 million Nordic bond. We'll break down exactly how they balance premium time charter rates, like the $31,000/day secured on a 5-year deal, against the volatility of the spot market, showing you the precise levers driving their value proposition to majors like ExxonMobil. Dive in to see the full nine blocks of their business model.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Performance Shipping Inc. (PSHG) relies on to keep its fleet earning, which is key to understanding its near-term stability. These partnerships span from securing the ships themselves to locking in the revenue streams.

Financial Institutions for Debt Financing

Performance Shipping Inc. successfully tapped the Nordic bond market to raise capital, which is a significant vote of confidence from that segment of lenders. This deal provides medium-term funding flexibility, which the company plans to use for fleet expansion or bond repurchases.

• Debt Instrument: $100 million bond offering in the Nordic bond market.
• Issuance Date: Announced July 2, 2025.
• Maturity Date: July 2029.
• Coupon Rate: Fixed at 9.875% per annum, payable semi-annually.
• Pricing: Priced at 97% of par.
• Security: Secured in part by first priority mortgages over the Company\'s two oldest tanker vessels.
• Debt-to-Equity Ratio: The company maintains a moderate debt level with a debt-to-equity ratio of 0.71.

The cost of capital is high at nearly 10%, but securing this amount shows access to deep, specialized maritime financing pools. Finance: draft 13-week cash view by Friday.

Major Oil Companies and Commodity Traders

Securing long-term contracts with top-tier energy majors is how Performance Shipping Inc. locks in predictable cash flow, insulating a portion of the fleet from volatile spot market swings. You can see the direct impact of these deals on their forward revenue coverage.

The fleet deployment strategy heavily involves these charterers, especially for their newer, high-specification vessels:

These contracts are material; the M/T P. Long Beach charter alone is potentially worth approximately $21.35 million over its minimum duration. Overall, these deals lifted the fleet-wide secured revenue backlog to approximately $257 million as of October 1, 2025. This translates to fixed charter coverage of about 52% for 2026 and 41% for 2027.

Shipyards for Newbuilding Program Delivery

Performance Shipping Inc. partners with Shanghai Waigaoqiao Shipbuilding (SWS) for its fleet renewal, focusing on modern, high-specification, LNG-ready LR2 Aframax tankers that meet stringent emission standards.

• Contract 1 (March 2023): One 114,000 DWT vessel expected delivery in Q4 2025 at a contract price of $62.6 million.
• Contracts 2 & 3 (December 2023): Two 114,000 DWT LNG-ready LR2 vessels at $64,845,000 per vessel, expected delivery in January and April of 2026.

The company is poised to take delivery of three identical sister vessels in late 2025 through early 2026. This newbuilding program complements recent fleet turnover, including the sale of the 2011-built Aframax tanker, M/T P. Yanbu, in Q1 2025.

Technical and Commercial Managers & Shipping Pool Arrangements

While specific management company names aren't detailed here, the operational structure relies on a mix of deployment methods. The fleet operates on spot voyages, through pool arrangements, and on time charters. For instance, in Q1 2025, the company's exposure to the spot market upside came through the operations of two Aframax tanker vessels under voyage charters and pool arrangements. The fleetwide average time charter equivalent rate for Q1 2025 was $30,843 per day.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Key Activities

You're looking at how Performance Shipping Inc. (PSHG) actually makes its money and manages its assets in this late 2025 environment. The core of their operation is moving crude oil and related products, and their key activities reflect a constant balancing act between securing stable income and chasing spot market upside.

Owning and operating a fleet of Aframax and Suezmax tanker vessels

Performance Shipping Inc. keeps its focus tight on owning and operating tanker vessels, specifically Aframax and Suezmax classes. As of the end of 2024, the fleet stood at six Aframax tanker vessels, totaling a carrying capacity of 630,519 DWT. You saw the fleet deployment strategy in the third quarter of 2025: they kept one Aframax tanker running under a pool arrangement for spot market exposure, while the rest of the fleet generated stable cash flow from charters. Honestly, keeping the M/T P. Sophia, a 2009-built Aframax, in the trading fleet after a potential sale fell through means they are relying on that asset for operational days.

Here's a snapshot of how the fleet was earning during the third quarter of 2025:

Strategic fleet modernization and expansion (e.g., two 2019-built Suezmax acquisitions)

The company's strategy definitely leans into modernization, which is crucial for securing premium charters. You saw them execute on this with the acquisition of two 2019-built Suezmax tankers, the M/T P. Beverly Hills and M/T P. Bel Air. These were bought for $75.4 million each, netting a combined acquisition cost of $150.9 million. These are modern, eco-design, scrubber-fitted vessels, which is what charterers want now. The delivery for these ships was slated for late 2025 or January 2026. To fund this growth, they also completed the sale of the older 2011-built Aframax M/T P. Yanbu in March 2025 for a gross price of $39 million.

Securing long-term time charter contracts for revenue stability

This is where Performance Shipping Inc. locks in predictable cash flow to cover costs and debt service. They are very active here. The two newly acquired Suezmaxes were immediately fixed out on 3-year time-charter agreements with Repsol Trading SA at $36,500 per day each, starting upon delivery in early 2026. That employment alone translates to about $78 million in gross revenue for the firm period. Also, they picked up a 2-year charter for the M/T P. Long Beach at $30,500 per day. On the newbuilding side, they locked in a 4-year charter with Mercuria for an LR1 tanker at $23,750 per day, starting in early 2027. These deals collectively pushed the fleetwide contracted revenue backlog to approximately $335 million.

• Charter coverage reached about 70% for 2026.
• Charter coverage reached about 57% for 2027.
• Total secured revenue backlog was about $255 million as of mid-June 2025.

Maintaining high safety and environmental compliance (Tier III, LNG-ready vessels)

While I don't have specific compliance spending figures for late 2025, the activity here is demonstrated by the type of assets they are acquiring. The key activity is ensuring the fleet meets modern standards to qualify for the best contracts. The two new Suezmax acquisitions are specifically noted as being eco-design and scrubber-fitted. Divesting older assets, like the M/T P. Yanbu sale, is part of this activity to reduce maintenance costs and align with stricter environmental rules. The goal is to lower the fleet's average age, positioning them for demand for compliant tankers.

Managing capital structure, including debt and equity offerings

Managing the balance sheet is a critical, ongoing activity, especially after major asset transactions. As of September 2025, Performance Shipping Inc. reported total debt of $225.3 million against cash and short-term investments of $212.2 million. This resulted in a relatively low net debt of about $13.1 million. The Debt-to-Equity Ratio stood at 71.2%. You should note that their EBIT of $31.3 million covers their interest expense a strong 80 times over. This strong coverage supported their July 2025 move to issue a $100 million inaugural bond in the Nordic high yield market to help fund the Suezmax purchases. The current market capitalization is quite small at $29.71M.

Finance: draft 13-week cash view by Friday.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Key Resources

You're looking at the core assets Performance Shipping Inc. (PSHG) relies on to generate revenue and execute its strategy as of late 2025. These aren't just line items; they are the actual engines of the business.

The physical assets are central. Performance Shipping Inc. operates a fleet of tanker vessels, focusing on modern, eco-design Aframax and Suezmax types. As of late 2024, the fleet stood at six Aframax tanker vessels with a combined carrying capacity of 630,519 DWT. The fleet is actively being modernized; Performance Shipping Inc. agreed to purchase two 2019-built, eco-design Suezmax tankers (M/T P. Bel Air and M/T P. Beverly Hills), each with a capacity of 157,286 dwt. These acquisitions, priced at USD 75,438,000 per vessel, are expected to deliver between December 2025 and January 2026. Notably, the 2009-built Aframax tanker M/T P. Sophia remains in the fleet after a potential forward sale lapsed.

Cash and contracted revenue provide the immediate financial stability. As of the end of the first quarter of 2025, Performance Shipping Inc. maintained a strong cash position, reporting approximately $108.3 million in cash. Furthermore, the company has substantial forward visibility through secured contracts, reporting a secured revenue backlog of approximately $257 million on a minimum basis as of October 1, 2025. This backlog figure was updated following a two-year time charter contract for the M/T P. Long Beach at US$30,500 Per Day.

The human capital and relationships are just as critical in this sector. Performance Shipping Inc. is managed by an experienced team based in Athens, Greece, with Andreas Michalopoulos serving as the Chief Executive Officer. The company leverages long-standing relationships with top-tier charterers, evidenced by the recent two-year time charter with SeaRiver Maritime (ExxonMobil), which the CEO noted highlights a long-standing and mutually beneficial partnership. Also secured are three-year time charter contracts with Repsol Trading S.A. for the two new Suezmax tankers.

Here's a quick look at the key contracted rates underpinning the backlog:

The company's strategy also involves securing long-term, high-quality employment for its newer assets, such as the two LR2 Aframax newbuilds fixed on five-year charters at $31,000/day.

The financial foundation supporting these assets includes:

• Cash balance at Q1 2025 end: approximately $108.3 million.
• Minimum Secured Revenue Backlog as of October 1, 2025: approximately $257 million.
• Total Cash as of September 30, 2025 (Nine Months End): $212M.
• Financing support via a completed $100M Nordic bond issuance.
• Debt-to-Equity Ratio (MRQ): 0.71.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Value Propositions

Reliable, safe, and high-quality transportation of crude oil and refined products is the core offering, evidenced by the operational metrics achieved in 2025.

The fleet strategy focuses on modernizing assets, exemplified by the acquisition of two modern Suezmax tankers in 2025, which enhances capacity and reduces the average fleet age. The M/T P. Sophia, a 2009-built Aframax tanker, remains in the trading fleet after a potential FPSO sale did not materialize, ensuring continued operational deployment.

Vessel performance in 2025 reflects the quality of operations and asset deployment:

• Fleetwide average Time Charter Equivalent (TCE) rate for the first quarter of 2025 was $30,843 per day.
• The average Aframax tanker charter rate in the first quarter of 2025 stood at $31,931 per day.
• Average Aframax spot rates in Q1 2025 were approximately $40,700 per day.
• The average TCE rate for the second quarter of 2025 improved to $32,295 per day.
• The average Aframax tanker charter rate in the second quarter of 2025 was $42,765 per day.

The company offers flexible chartering options across spot, pool, and time charters, allowing it to capture market upside while securing base revenue.

Secured revenue visibility is a key value driver, built through locking in multi-year contracts with strong counterparties. As of October 1, 2025, the fleetwide secured revenue backlog reached approximately $257 million on a minimum basis.

Specific contract examples demonstrate this stability:

These contracts translate to concrete coverage figures, which help de-risk open days:

• Fixed charter coverage increased to approximately 52% for 2026.
• Fixed charter coverage increased to approximately 41% for 2027, pending employment for Suezmax tankers.

Reduced counterparty risk is achieved by securing employment with major energy companies. Counterparties securing these long-term charters include SeaRiver Maritime, a wholly owned subsidiary of ExxonMobil Corporation, and Repsol.

Financial results for the first half of 2025 underscore the revenue generation capacity from these operations, even with a smaller fleet following the sale of the M/T P. Yanbu in March 2025. For the first quarter of 2025, net income attributable to common stockholders was $29.0 million on revenue of $21.3 million. For the second quarter of 2025, net income attributable to common stockholders was $8.6 million on revenue of $18.1 million.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Customer Relationships

You're looking at how Performance Shipping Inc. (PSHG) manages the relationships that bring in their revenue. For a company like PSHG, this is all about locking in high-quality, long-term contracts with major energy players to smooth out the volatility inherent in the shipping sector.

Long-term, repeat business with energy majors (e.g., ExxonMobil)

The core of the relationship strategy centers on securing multi-year time charters with top-tier energy majors. This is defintely where you see the stability. For instance, Performance Shipping Inc. recently secured a 24-month time charter with SeaRiver Maritime, a wholly owned subsidiary of ExxonMobil Corporation, for the M/T P. Long Beach, starting around mid-December 2025. The daily gross charter rate for this LR2 Aframax tanker is US$30,500. This specific deal alone added approximately US$21.35 million to the minimum secured revenue backlog. This relationship is explicitly highlighted as a long-standing and mutually beneficial partnership, reaffirming the Charterer's confidence. Furthermore, Performance Shipping Inc. also secured three-year time charter contracts with Repsol Trading SA for two newly acquired modern Suezmax tankers, each at a daily rate of US$36,500. These long-term contracts are crucial for visibility.

The impact of these high-quality contracts on forward coverage is significant. Following the ExxonMobil deal, fixed charter coverage increased to approximately 52% for 2026 and 41% for 2027, based on the minimum duration of existing charters as of October 1, 2025. A later update, incorporating other deals like the Repsol charters, showed fixed charter coverage rising to 70% for 2026 and 57% for 2027. The total fleetwide secured revenue backlog stood at approximately US$257 million as of October 1, 2025, growing to about US$330 million by November 24, 2025.

Here's a snapshot of the key long-term charter relationships as of late 2025:

Dedicated commercial management for charter negotiations

The company relies on its management structure to secure these attractive, long-term deals. The CEO, Andreas Michalopoulos, frequently comments on these announcements, suggesting direct executive involvement in high-value negotiations. Securing the ExxonMobil deal 'well ahead of schedule' points to proactive commercial management rather than waiting for vessels to come off-hire. This dedicated focus helps lock in rates in what the company described as a 'seasonally strong market environment' in late 2025.

High-touch relationship management for time charter clients

The nature of the time charter business demands a high-touch approach. When you sign a 24-month deal with a major like ExxonMobil or a three-year deal with Repsol, you're signing up for operational alignment, safety compliance, and reliability over a long period. The company emphasizes the quality, safety, and reliability of its fleet operations as key factors for these repeat clients. This level of service ensures the charterer's confidence, leading to the next contract.

Standardized, transactional relationships for spot market voyages

While time charters provide the base, Performance Shipping Inc. maintains exposure to the upside through spot market operations. The company employs its fleet on spot voyages and through pool arrangements. This is where the relationship becomes more transactional, focusing on immediate freight rates. For example, the fleetwide average Time Charter Equivalent (TCE) rate for Q3 2025 was $29,460. To give you a market benchmark, the average spot rates for Aframax tankers in Q1 2025 were approximately $40,700/day. The company's strategy balances the robust cash flow from time charters with the potential upside from these transactional spot days. This balanced deployment strategy is key to navigating the cycle.

The low daily cash breakeven rate of $16,039 (as of late 2024) is a critical enabler for this dual approach, allowing PSHG to profit even when spot rates soften relative to their contracted rates. Finance: draft a sensitivity analysis on the impact of a 15% drop in Q1 2026 spot rates on the un-covered days by end of next week.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Channels

You're looking at how Performance Shipping Inc. gets its services-moving crude oil and related products on its tanker fleet-to the customer and how it funds that operation. The channels here aren't about websites or retail stores; they're about high-value, long-term commercial relationships and capital sourcing. Honestly, in this sector, the channel is the contract.

Direct negotiation of time charter contracts with major oil companies

This is the bedrock for cash flow visibility. Performance Shipping Inc. focuses on locking in steady revenue streams by directly negotiating time charter contracts. As of their November 26, 2025 update, the strategy is clear: seven out of eight vessels currently on the water are fixed on time-charter employment contracts, which helps smooth out the volatility of the spot market.

These direct negotiations are crucial for securing the long-term revenue backlog. For example, Performance Shipping Inc. secured three-year time charter contracts with Repsol Trading S.A. for the two recently acquired Suezmax tankers, with a daily rate set at $36,500 per vessel, expected to start in early 2026. Also, they have a 24-month charter agreement with SeaRiver Maritime, a subsidiary of ExxonMobil, for the LR2 Aframax tanker M/T P. Long Beach at a daily rate of $30,500.

Here's a snapshot of the forward-looking commitment from these direct channels:

The company reported secured revenues of $330 million as of October 1, 2025, which directly reflects the success of these direct charter negotiations, including contracts for the two newbuilds and the two Suezmax tankers acquired during the year.

Brokerage houses for securing spot market voyages

When a vessel isn't on a fixed time charter, it typically seeks employment through the volatile but potentially high-reward spot market, often facilitated by brokerage houses. Performance Shipping Inc. maintains exposure here to capture upside when rates spike. The M/T P. Sophia, an Aframax tanker, will continue operating in the fleet on spot voyages after a potential sale lapsed. During the first quarter of 2025, the company's exposure to the spot market upside was through the operations of two Aframax tanker vessels under voyage charters.

The daily earnings achieved through this mix of employment are measured by the Time Charter Equivalent (TCE) rate. The fleetwide average TCE rate for the second quarter of 2025 was $32,295 per day, up from $30,970 per day in Q2 2024, showing effective commercial deployment even in a softer rate environment. To give you a sense of the market they are playing in, the average Aframax tanker charter rate stood at $42,765 per day during Q2 2025.

Participation in shipping pools for commercial deployment

Pool participation is a key mechanism for deploying vessels that aren't on long-term time charters, blending the benefits of spot exposure with some operational efficiencies. The company employs its fleet on spot voyages and through pool arrangements. The two Aframax tankers mentioned above were operating under pool arrangements in Q1 2025. This channel helps Performance Shipping Inc. keep its fleet utilized; for instance, fleet utilization was 97.6% in Q1 2025 and 100% in Q2 2025, which is excellent.

Here's how the fleet deployment looked across the main channels in Q1 2025:

• Direct Time Charter Arrangements: Provided robust cash flow.
• Spot Market/Voyage Charters: Exposure via two Aframax tanker vessels.
• Pool Arrangements: Commercial deployment for vessels not on fixed contracts.

Investor relations for capital market access

This channel is about ensuring the company has the necessary capital to execute its fleet renewal and expansion strategy. Performance Shipping Inc. recently supported strategic moves, like the acquisition of two Suezmax tankers for a total of $150.9 million, with a $100 million Nordic bond issuance.

The market's perception and the company's valuation metrics are central to this channel's success. As of early December 2025, key financial metrics relevant to capital access included:

The company's latest analyst consensus shows a Buy rating with a price target of $2.50 per share. This ongoing dialogue with analysts and the broader investment community is what keeps the capital markets open for future financing needs, like the delivery of newbuilds scheduled through 2027.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Customer Segments

You're looking at the core clients Performance Shipping Inc. (PSHG) is securing employment with as of late 2025. The business model relies on locking in high-quality, long-term contracts with established energy players to ensure revenue visibility, which is crucial in the cyclical tanker market.

Performance Shipping Inc. has a diverse customer base across both western and eastern geographical basins, primarily utilizing time charter contracts to secure predictable cash flow. As of late 2025, the company's strategy has resulted in a secured revenue backlog of approximately $330 million.

The customer segments are actively demonstrated by recent charter agreements:

• Global oil majors and their subsidiaries (e.g., SeaRiver Maritime)
• Large commodity trading houses (e.g., Repsol Trading SA)
• National oil companies (e.g., Pakistan National Shipping Corporation)
• Refiners and independent oil traders requiring mid-size tanker capacity

The company's fixed charter coverage is strong following recent fleet expansion and contract signings, standing at approximately 70% for 2026 and 57% for 2027.

Here's a breakdown of the concrete customer engagements that define these segments:

The new Suezmax tankers, acquired and set for delivery in early 2026, are already fixed on the 3-year charters with Repsol Trading SA at $36,500 per day each, which highlights the appetite from large energy counterparties for modern, eco-design capacity. The fleetwide average Time-Charter Equivalent (TCE) rate for Q2 2025 was $32,295 per day, showing the attractive earning environment these customer segments are providing.

The company's low daily cash break-even rate of $16,039 means that even contracts secured at the lower end of the recent range, like the $30,000 per day with PNSC, generate strong earnings above the operational threshold.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Cost Structure

You're looking at the hard costs that drive Performance Shipping Inc.'s operations as of late 2025. The cost structure is heavily weighted toward asset acquisition and the ongoing maintenance of that physical fleet.

High capital expenditure for vessel acquisition is a major component. Performance Shipping Inc. recently agreed to purchase two modern Suezmax tankers, the M/T Eco Bel Air and M/T Eco Beverly Hills, for a combined price of $150.9 million. Each vessel cost $75,438,000, net of brokerage commissions. Delivery for these two vessels is expected right at the turn of the year, between December 2025 and January 2026. That's a significant capital outlay to modernize the fleet.

The financing for growth, and the servicing of existing obligations, forms another critical cost pillar. Performance Shipping Inc. successfully placed $100 million of bonds in the Nordic bond market in July 2025. These new bonds mature in July 2029 and carry a fixed coupon of 9.875% per annum, payable semi-annually. Furthermore, the company refinanced approximately $29.75 million in existing debt, which involves quarterly installments of $1.05 million each, plus a final balloon payment of $8.75 million due in mid-2030. As of September 2025, the total debt stood at $225.3 million, though with cash reserves of $212.2 million, the net debt was only about $13.1 million. The debt-to-equity ratio was reported at 0.71.

Voyage expenses, which are variable costs tied directly to moving cargo, are substantial. For the third quarter of 2025, the reported revenue was $18.5 million, but this figure was $17.5 million net of voyage expenses. This means voyage expenses, primarily fuel and port costs, accounted for approximately $1.0 million in that quarter alone. The company's deployment strategy, which includes spot voyages, directly exposes it to these fluctuating fuel prices.

Vessel operating expenses (OPEX) cover the fixed costs of keeping the ships ready to sail, including crew wages, insurance premiums, and scheduled maintenance. While the exact OPEX dollar amount isn't broken out separately from revenue in the latest reports, we can look at the context of recent operational performance to gauge the cost base.

Here's a quick look at some key financial metrics that frame the cost environment:

Finally, you must budget for drydocking and special survey costs, which are non-recurring but mandatory capital expenditures for regulatory compliance. You saw this hit in Q3 2025, as the decrease in available days was directly attributable to the drydock of the vessel M/T P. Aliki in August 2025. These events require significant cash reserves to cover shipyard labor, parts, and lost revenue days.

You should check the latest quarterly report for the specific daily OPEX figures, as that's where crew and insurance costs are detailed.

Performance Shipping Inc. (PSHG) - Canvas Business Model: Revenue Streams

You're looking at how Performance Shipping Inc. actually brings in the money, and it's a mix of predictable income and market upside. The Time Charter revenue stream is key for stability, locking in daily earnings from reputable charterers. For instance, Performance Shipping Inc. secured three-year time-charter contracts with Repsol Trading S.A for two newly acquired Suezmax tankers at a fixed rate of $36,500 per day each.

Then you have the Spot Market and Pool revenue, which is where the volatility comes in, but also the potential for higher returns when the market is hot. During the third quarter of 2025, the Aframax spot rates averaged approximately $37,500 per day, which fed into this part of the revenue mix.

To give you a snapshot of the recent performance, here are the hard numbers from the latest reported periods. The company's Q3 2025 results show a clear picture of current operational earnings versus one-off gains.

The overall revenue generation strategy relies on balancing these different sources. Here's a quick breakdown of the deployment strategy that drives these figures:

• Time Charter revenue from fixed-rate contracts.
• Spot Market exposure through voyage charters.
• Revenue from Pool arrangements.
• One-time, opportunistic gains from vessel sales, like the $19.5 million gain from the M/T P. Yanbu sale in Q1 2025.

Also, remember that the secured revenue backlog is a major factor for future visibility. As of late 2025, the company's secured revenue backlog stood at approximately $330 million. Finance: draft 13-week cash view by Friday.