Stealthgas, a ship-owning company primarily serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced its unaudited financial and operating results for the first quarter ended March 31, 2019.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
- Operational utilization of 98.8% in Q1 19’ (93.3% in Q1 18’), an excellent performance as commercial off hire days were as low as 1 day per vessel. This marks our best performance since Q2 2008.
- Fleet calendar days down 10.6% quarter over quarter to 4,327 days attributed to our recent strategic fleet contraction.
- About 71% of fleet employment coverage for 2019, with approximately $124 million in future contracted charter revenues.
- Further addition of two small LPG vessels from StealthGas, to our recently formed JV structure, bringing the total to four vessels.
- Voyage revenues of $38.4 million in Q1 19’, a decrease of $1.3 million compared to Q1 18’, given 512 (or 10.6%) fewer fleet calendar days.
- Voyage revenues per fleet calendar day of close to $8,900 in Q1 19’- an 8.3% increase compared to the same period of last year- as a result of improved performance and higher market rates.
- Daily TCE in Q1 19’ increased by 13% compared to the same period of last year.
- Adjusted EBITDA of $17.2 million in Q1 19’ – a $3.5 million increase compared to Q1 18’.
- Net Income of $2.0 million in Q1 19’ versus a $5.8 million loss in the same period of last year.
- Low gearing as debt to assets stands at 40.4% while net debt ratio is as low as 32.9%.
- Cash on hand of $74.8 million, an increase of $10.3 million compared to year end 2018.
First Quarter 2019 Results:
Revenues for the three months ended March 31, 2019 amounted to $38.4 million, a decrease of $1.3 million, or 3.3%, compared to revenues of $39.7 million for the three months ended March 31, 2018, mainly as a result of our fleet contraction as we had 512 less fleet calendar days.
Voyage expenses and vessels’ operating expenses for the three months ended March 31, 2019 were $3.8 million and $12.9 million respectively, compared to $5.6 million and $15.4 million respectively, for the three months ended March 31, 2018. The $1.8 million decrease in voyage expenses was mainly attributed to an approximate 44% decrease in our spot days and the minimal ballasting costs incurred during the first quarter of 2019. The 16.2% decrease in vessels’ operating expenses compared to the same period of 2018 was mostly a result of our recent fleet contraction and reduction of our maintenance costs.
Drydocking costs for the three months ended March 31, 2019 and 2018 were $0.2 million and $1.5 million, respectively. The costs for the first quarter of 2019 mainly related to the docking survey of one small LPG vessel, while the costs for the same period of last year related to the drydocking of 3 vessels.
Depreciation for the three months ended March 31, 2019 was $9.5 million, a $1.0 million decrease from $10.5 million for the same period of last year due to the reduced number of owned vessels.
As a result of the above, for the three months ended March 31, 2019, the Company reported a net income of $2.0 million, compared to a net loss of $5.8 million for the three months ended March 31, 2018. The weighted average number of shares for the three months ended March 31, 2019 was 39.9 million. Earnings per share, basic and diluted, for the three months ended March 31, 2019 amounted to $0.05 compared to loss per share of $0.14 for the same period of last year.
Adjusted net income was $2.1 million or $0.05 earnings per share for the three months ended March 31, 2019 compared to adjusted net loss of $2.0 million or $0.05 loss per share for the same period of last year.
EBITDA for the three months ended March 31, 2019 amounted to $17.1 million. Reconciliations of Adjusted Net (Loss)/Income, EBITDA and Adjusted EBITDA to Net (Loss)/Income are set forth below.
An average of 45.4 vessels were owned by the Company during the three months ended March 31, 2019, compared to 51.7 vessels for the same period of 2018.
Fleet Update Since Previous Announcement
The Company announced the conclusion of the following chartering arrangements:
A two year time charter extension for its 2007 built LPG carrier the Gas Flawless, to an International LPG trader until March 2021.
A ten year bareboat charter for its 2014 built LPG carrier the Eco Corsair, to a European shipping company until December 2029.
A six months bareboat charter extension for its 2012 built LPG carrier the Gas Esco, to a State owned shipping company, up to December 2019.
A six months bareboat charter extension for its 2012 built LPG carrier the Gas Husky, to a State owned shipping company, up to December 2019.
A three months charter extension for its 2018 built 22,000 cbm semi-refrigerated carrier the Eco Freeze, to an International LPG trader until July 2019.
A six months charter extension for its 2006 built LPG carrier the Gas Inspiration, to an international trader until October 2019.
A six months charter extension charter for its 2016 built LPG carrier, the Eco Dominator, to an oil major until November 2019.
With these charters, the Company has contracted revenues of approximately $124 million. Total anticipated voyage days of our fleet is 71% covered for the remainder of 2019 and 29% for 2020.
Share Repurchase Program
The Company’s Board of Directors has approved a program for common share buybacks up to $10,000,000. Shares of common stock may be purchased in the open market or privately negotiated transactions, which may include derivative transactions, at times and prices that are considered to be appropriate by the Company and the program may be discontinued at any time.
Board Chairman Michael Jolliffe Commented
The first quarter of 2019 marked a good start for StealthGas in capturing the benefits of an improving market. Our much-better results were mainly driven by our remarkable operational utilization of 98.8%, our improved performance in the spot market, and of course were leveraged by the higher prevailing period rates that are slowly starting to make a noticeable impact on our revenue levels and profitability. Our balance sheet stands strong with $74.8 million of unrestricted cash and a leverage ratio as low as 40%. Our solid capital structure in combination with our leading market position places us in an advantageous position. The small LPG segment has solid market fundamentals in terms of a low orderbook and ageing fleet – factors that make it very probable that our market will improve further during the quarters ahead, so we will likely be looking at some exciting times to come.
With our stock trading at a large discount to our net asset value, our Board has taken the decision to initiate a share buyback program of up to $10 million. This is a means to support our stock as well as our shareholders for their commitment to StealthGas. We remain optimistic regarding the quarters ahead and hope that our good performance this quarter will be a turning point as to our profitability.