4Q2020 EBITDA Below Expectations. Adjusted 4Q2020 EBITDA of negative $0.2 million was below our estimate due to lower TCE revenue, higher opex and G&A expenses. Versus our estimate, TCE revenue was $3.58 million was $0.8 million lower and opex of $2.86 million was $0.3 million above. G&A expense of $0.61 million was slightly lower than expected by $0.1 million.Adjusting 2021 EBITDA estimates with potential 2H2021 rebound as the swing factor. Our 2021 EBITDA estimate drops to $4.3 million from $4.5 million, which is based on TCE rates of $10,167/day and operating days of 1,611. With the quarter largely behind us, 1Q2021 forward cover on the MR fleet is 100% booked at an average rate of ~ $13.2k and 75% of available 2Q2021 available days are booked at a similar level. Forward cover visibility into 2H2021 is contingent upon existing options and the two small tankers have no forward cover at this point and are working on a spot basis.Refinancing in 2Q2020 should have a positive impact on interest costs. A commitment from an existing lender for a loan of $17 million on the Epsilon has been secured. The new loan and existing cash of $7.5 million will refinance the existing Eighthone loan. The new loan is priced at Libor plus 335 basis points and is due in five years. Quarterly amortization is $0.3 million with a balloon payment of $11 million.Current refined product tanker market appears soft, but intermediate term outlook more favorable. While current MR rates are soft and in the $13k/day range, there is no change in our view that intermediate-term fundamentals remain attractive due to a shift in refining capacity in the eastern hemisphere and a limited order book (at the lowest level since 2000).Maintain Market Perform rating due to balanced risk/reward profile. After a challenging 2020 where the stock dropped 37%, mainly due to 1H2020 weakness, the stock has recovered most of the lost ground and is up 30% this year. As result, we believe that the risk/reward profile is balanced. While we view PXS as a small cap play in the refined product tanker market that should benefit from attractive intermediate term fundamentals, mainly the limited order book and potential recovery on refined product demand, the near-term outlook appears challenging.Read More >>