StealthGas adds LPG carriers, wins charters

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Stelathgas, 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 second quarter and six months ended June 30, 2019.

OPERATIONAL AND FINANCIAL HIGHLIGHTS 

  • Operational utilization of 95.3% in Q2 ’19 (97.8% in Q2 ’18) mainly due to softer conditions prevailing in Asia.
  • About 79% of fleet days secured on period charters for the remainder of 2019, with total fleet employment days for all subsequent periods representing approximately million in contracted revenues.
  • Entrance into a new LPG sub segment through the acquisition of a secondhand (2007 built) 38,000 cbm fully refrigerated vessel. This vessel was acquired with our JV partner.
  • Entrance into a second new LPG sub segment, through an acquisition – from a third party – of an 11,000 cbm pressurized newbuidling LPG vessel with delivery in 2021. This vessel is under construction in Japan.
  • Revenues of million in Q2 ’19, a decrease of million compared to Q2 ’18 following our strategic decision to divest mostly older LPG vessels that led to the net reduction of our average owned fleet by ten vessels.
  • Adjusted EBITDA of million in Q2 ’19, compared to million in Q2 ’18, due to fewer vessels and reduced spot market revenues.
  • Low gearing, as debt to assets stands at about 39.9% reflecting our sharp repayment schedule.
  • Cash on hand of million, an increase of million compared to December 31, 2018.
  • Repurchase of 170,914 GASS shares to date, for aggregate consideration of . 

Second Quarter 2019 Results: 

  • Revenues for the three months ended June 30, 2019 amounted to million, a decrease of million, or 21.4%, compared to revenues of million for the three months ended June 30, 2018, mainly as a result of the strategic reduction of our owned fleet by ten vessels, one less charter-in vessel and reduced revenue as a result of the weak Asian spot market. Our owned fleet reduction also includes the sale of a 49.9% interest in four of our vessel-owning companies to a third party investor, the results of which are no longer consolidated in our financial results with only the related profit share being reflected.
  • Voyage expenses and vessels’ operating expenses for the three months ended June 30, 2019 were million and million respectively, compared to million and million respectively, for the three months ended June 30, 2018. The million decrease in voyage expenses was mainly attributed to a 5.1% quarter on quarter reduction of spot days. The 20.8% decrease in vessels’ operating expenses compared to the same period of 2018, is mainly attributed to the net reduction of our owned fleet by ten vessels and the receipt of an insurance payment which improved our operating cost base.
  • Drydocking costs for the three months ended June 30, 2019 and 2018 were nil and million, respectively. No drydocking was completed during the second quarter of 2019, while in the same period of 2018 the Company completed the drydocking of two LPG vessels.
  • Depreciation for the three months ended June 30, 2019 was million, a million decrease from million for the same period of last year due to the decrease of the average number of our vessels.
  • Interest and finance costs for the three months ended June 30, 2019 and 2018 were million and million, respectively. The million decrease from the same period of last year is mostly due to the decrease of our leverage.
  • As a result of the above, for the three months ended June 30, 2019, the Company reported a net loss of million, compared to a net loss of million for the three months ended June 30, 2018. The weighted average number of shares for the three months ended June 30, 2019 and June 30, 2018 was 39.8 million and 39.9 million, respectively. Loss per share, basic and diluted, for the three months ended June 30, 2019 amounted to compared to loss per share of for the same period of last year.
  • Adjusted net income was million or earnings per share for the three months ended June 30, 2019 compared to adjusted net income of million or earnings per share for the same period of last year.
  • EBITDA for the three months ended June 30, 2019 amounted to million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Loss are set forth below.
  • An average of 42.0 vessels were owned by the Company during the three months ended June 30, 2019, compared to 52.2 vessels for the same period of 2018.

Six Months 2019 Results:

  • Revenues for the six months ended June 30, 2019, amounted to million, a decrease of million, or 12.8%, compared to revenues of million for the six months ended June 30, 2018, primarily due to the strategic decision to sell mostly older small LPG vessels for further trading and the sale of a 49.9% interest in four of our vessel-owning companies to a third party investor, the results of which are no longer consolidated in our financial results with only the related profit share being reflected.
  • Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2019 were million and million, respectively, compared to million and million for the six months ended June 30, 2018. The million decrease in voyage expenses was mainly due to the 26.7% (or 484 days) reduction of spot days. The million decrease in vessels’ operating expenses, is due to the net reduction of the average number of vessels in our owned fleet by 8.3 vessels and the expiration of one bareboat charter-in contract.
  • Drydocking costs for the six months ended June 30, 2019 and 2018 were million and million, respectively. The costs for the six months ended June 30, 2019 mainly related to the survey of one small LPG vessel, while the costs for the same period of last year related to the drydocking of 5 vessels.
  • Depreciation for the six months ended June 30, 2019, was million, a million decrease from million for the same period of last year, due to the net reduction of the average number of vessels in our owned fleet.
  • Interest and finance costs for the six months ended June 30, 2019 and 2018 were million and million, respectively. The million increase from the same period of last year, in spite of the decrease of our leverage, is mostly due to the increase of LIBOR rates.
  • As a result of the above, the Company reported net income for the six months ended June 30, 2019 of million, compared to a net loss of million for the six months ended June 30, 2018. The average number of shares outstanding for the six months ended June 30, 2019 and June 30, 2018 was 39.9 million. Earnings per share for the six months ended June 30, 2019 amounted to compared to loss per share of for the same period of last year.
  • Adjusted net income was million, or per share, for the six months ended June 30, 2019 compared to adjusted net income of million, or per share, for the same period of last year.
  • EBITDA for the six months ended June 30, 2019 amounted to million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below. An average of 43.7 vessels were owned by the Company during the six months ended June 30, 2019, compared to 52.0 vessels for the same period of 2018.
  • As of June 30, 2019, cash and cash equivalents amounted to million and total debt amounted to million. During the six months ended June 30, 2019 debt repayments amounted to million.

Fleet Update Since Previous Announcement

The Company announced the conclusion of the following chartering arrangements:

  • A two year time charter for its 2006 built LPG carrier, the Gas Alice, to an international oil company up until August 2021.
  • A one year time charter for its 2008 built product tanker, the Clean Thrasher, to an international trading house up until June 2020.
  • A six months’ time charter for its 2001 built charter- in  LPG carrier, the Gas Cathar, to an international LPG trader until January 2020.
  • A six months’ time charter for its 2018  built LPG carrier, the Eco Freeze, to an international LPG trader until December 2019.
  • A six months’ time charter for its 2015 built LPG carrier, the Eco Universe, to an oil major until February 2020.
  • A three months’ time charter for its 2015  built LPG carrier, the Eco Enigma, to an international  trading house until October 2019.

With these charters, the Company has total contracted revenues of approximately million. Total anticipated voyage days of our fleet is 79% covered for the remainder of 2019 and 35% for 2020.

Board Chairman Michael Jolliffe Commented

Due to market uncertainty resulting from the US-China trade war, the pressurized market in Asia presented a relatively tough second quarter for ship owners. Charterers in the region were reluctant to conclude or renew period contracts, thus forcing vessels to operate in the spot market at low rates. This is the main reason that our revenue generation was less than expected, in spite of favorable operational utilization of close to 95% and an increase in daily revenue from our vessels on time charter contracts.

This quarter we had close to 19% of our fleet operating in the spot market, the majority of which were in the Asian region. Our vessels operating in the spot market during the second quarter of 19’ generated in total almost million less TCE revenue than in the first quarter of the year.

From a strategic standpoint, we have been active, with StealthGas moving to enter, for the first time, the 11,000 cbm pressurized LPG segment. In addition, through our Joint Venture arrangement, we moved to enter in a second new LPG subsegment, as we recently acquired a 38,000 cbm fully refrigerated vessel. Relying on the technical and management expertise gained as leaders in the small LPG market, StealthGas is further expanding its presence in the broader LPG space, thus enhancing and diversifying its revenue stream.

Another important move is that we have actively commenced our stock repurchase program having bought more than 170,000 shares to date, supporting our stock and our investors.

We believe that the Asian market will soon correct itself. Our Company has a very strong balance sheet and diversified fleet, a free cash base that exceeds million, and a debt to asset ratio of less than 40%, therefore we feel optimistic for the future as market conditions improve.

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