IMPERIAL PETROLEUM announces Q3 2024 financial and operating results

IMPERIAL PETROLEUM, a ship-owning company providing petroleum products, crude oil and dry bulk seaborne transportation services, announced today its unaudited financial and operating results for the third quarter and nine months ended September 30, 2024.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

• Fleet operational utilization of 65.6% in Q3 24’ versus 70.5% in Q3 23’.
• Increased idle time in Q3 24’ compared to the same period of last year mainly due to seasonal factors, the drydocking of a product tanker and the minor incident of one of our product tankers which, remained off hire for the whole of Q3 24’.
• Spot activity in Q3 24’ in the order of 65.7%, reduced compared to previous quarter, due to a rise in tanker time charter activity.
• Revenues of $33.0 million in Q3 24’ compared to $29.4 million in Q3 23’ equivalent to a 12.2% increase.
• Net income of $10.1 million in Q3 24’ compared to $12.1 million in Q3 23’.
• Adjusted net income of $10.9 million in Q3 24’ versus $4.5 million in Q3 23’ up by $6.4 million or 142.2%.
• Cash and cash equivalents including time deposits slightly below $200 million as of September 30, 2024 versus $126 million as of September 30, 2023- equivalent to a 58.7% rise.
• For the 9M 24’ period our total net income was $46.2 million while our operating cash flows amounted to $68.0 million.

Third Quarter 2024 Results:

• Revenues for the three months ended September 30, 2024 amounted to $33.0 million, an increase of $3.6 million, or 12.2%, compared to revenues of $29.4 million for the three months ended September 30, 2023, primarily due to an increase in voyage days by 19.5% (145 days) attributed mainly to the increase of our average number of vessels by 1.27 vessels along with improved revenue stemming from product tankers as three product tankers underwent drydocking in Q3 23’.
• Voyage expenses and vessels’ operating expenses fo r the three months ended September 30, 2024 were $13.0 million and $7.2 million, respectively, compared to $12.6 million and $6.1 million, respectively, for the three months ended September 30, 2023. The $0.4 million increase in voyage expenses is mainly attributed to the increase in bunkers consumption due to increase in spot days by 11.3% and to expenses incurred in connection with the EU Emission Allowances (EUAs) in order to meet our obligation arising from the CO2 emissions as a result of the new EU regulations entered into force starting from January 1, 2024. The increase was partially offset by the decrease in port expenses due to change in trade routes and therefore, decreased transit through the Suez Canal. The $1.1 million increase in vessels’ operating expenses was primarily due to the increased size of our fleet by an average of 1.27 vessels.
• Drydocking costs for the three months ended September 30, 2024 and 2023 were $0.9 million and $2.8 million, respectively. This decrease is due to the fact that during the three months ended September 30, 2024, one of our product tankers underwent drydocking while in the same period of last year three of our product tankers underwent drydocking.
• General and administrative costs for the three months ended September 30, 2024 and 2023 were $1.2 million and $1.3 million, respectively.
• Depreciation for the three months ended September 30, 2024 and 2023 was $4.3 million and $3.5 million, respectively. The change is attributable to the increase in the average number of our vessels.
• Management fees for the three months ended September 30, 2024 and 2023 were $0.4 million.
• Net gain on sale of vessel for the three months ended September 30, 2024 and 2023 were nil and $8.2 million, respectively. In the three months ended September 30, 2023, the net gain on sale of vessel was related to the sale of the Aframax tanker Afrapearl II (ex. Stealth Berana) to C3is Inc., a related party.
• Interest income for the three months ended September 30, 2024 was $2.3 million as compared to $1.7 million for the three months ended September 30, 2023. The $0.6 million increase is mainly attributed to a higher amount of funds placed under time deposits.
• Foreign exchange (loss)/gain for the three months ended September 30, 2024 was $1.7 million gain as compared to $0.8 million loss for the three months ended September 30, 2023. The $2.5 million increase in gain is mainly attributed to fluctuations in exchange rates in key currencies mainly from funds placed under time deposits on foreign currency.
• As a result of the above, for the three months ended September 30, 2024, the Company reported net income of $10.1 million, compared to net income of $12.1 million for the three months ended September 30, 2023. Dividends paid on Series A Preferred Shares amounted to $0.4 million for the three months ended September 30, 2024. The weighted average number of shares of common stock outstanding, basic, for the three months ended September 30, 2024 was 31.4 million. Earnings per share, basic and diluted, for the three months ended September 30, 2024 amounted to $0.29 and $0.27, respectively, compared to earnings per share, basic and diluted, of $0.56 and $0.43, respectively, for the three months ended September 30, 2023.
• Adjusted net income1 was $10.9 million corresponding to an Adjusted EPS1, basic of $0.32 for the three months ended September 30, 2024 compared to an Adjusted net income of $4.5 million corresponding to an Adjusted EPS, basic, of $0.19 for the same period of last year.
• EBITDA1 for the three months ended September 30, 2024 amounted to $12.2 million, while Adjusted EBITDA1 for the three months ended September 30, 2024 amounted to $13.0 million.
• An average of 10.4 vessels were owned by the Company during the three months ended September 30, 2024 compared to 9.1 vessels for the same period of 2023.

Nine months 2024 Results:

• Revenues for the nine months ended September 30, 2024 amounted to $121.3 million, a decrease of $32.5 million, or 21.1%, compared to revenues of $153.8 million for the nine months ended September 30, 2023, primarily due to a year to date decline of daily spot market rates of suezmax tankers by approximately 18% and the seasonal weakening of tanker market rates following the end of the first half of 2024.
• Voyage expenses and vessels’ operating expenses for the nine months ended September 30, 2024 were $43.6 million and $19.7 million, respectively, compared to $48.7 million and $20.0 million, respectively, for the nine months ended September 30, 2023. The $5.1 million decrease in voyage expenses is mainly attributed to the decreased port expenses by approximately $3.9 million due to decreased transit through the Suez Canal and decreased voyage commissions by approximately $1.1 million due to the lower revenues. The $0.3 million decrease in vessels’ operating expenses was primarily due to the slight decrease in the average number of vessels.
• Drydocking costs for the nine months ended September 30, 2024 and 2023 were $1.5 million and $4.1 million, respectively. This decrease is due to the fact that during the nine months ended September 30, 2024 two tanker vessels underwent drydocking while in the same period of last year three of our product tankers and one of our drybulk carriers underwent drydocking.
• General and administrative costs for the nine months ended September 30, 2024 and 2023 were $3.9 million and $3.8 million, respectively.
• Depreciation for the nine months ended September 30, 2024 was $12.5 million, a $0.4 million increase from $12.1 million for the same period of last year, due to the higher carrying amount of our newly acquired vessels.
• Management fees for the nine months ended September 30, 2024 and 2023 were $1.2 million.
• Other operating income for the nine months ended September 30, 2024 was $1.9 million and related to the collection of an insurance claim in connection with repairs undertaken in prior years.
• Net loss on sale of vessel/ Net gain on sale of vessel – related party for the nine months ended September 30, 2024 was $1.6 million and related to the sale of the Aframax tanker Gstaad Grace II to a third party whereas net gain on sale of vessel for the nine months ended September 30, 2023 was $8.2 million and related to the sale of the Aframax tanker Afrapearl II (ex. Stealth Berana) to C3is Inc., a related party.
• Impairment loss for the nine months period ended September 30, 2024 and 2023 stood at nil and $9.0 million, and related to the spin-off of two drybulk carriers to C3is Inc. The decline of drybulk vessels’ fair values, at the time of the spin off, compared to one year before when these vessels were acquired resulted in the incurrence of impairment loss.
• Interest and finance costs for the nine months ended September 30, 2024 and 2023 were $0.1 million and $1.8 million, respectively. The $0.1 million of costs for the nine months ended September 30, 2024 relate mainly to the accrued interest expense – related party, in connection with the $14.0 million, part of the acquisition price of our bulk carrier, Neptulus, which is payable by May 2025. The $1.8 million of costs for the nine months ended September 30, 2023 related mainly to $1.3 million of interest charges incurred up to the full repayment of all outstanding loans concluded in April 2023 along with the full amortization of $0.5 million of loan related charges following the repayment of the Company’s outstanding debt.
• Interest income for the nine months ended September 30, 2024 and 2023 was $6.0 million and $3.8 million, respectively. The increase is mainly attributed to the interest earned from the time deposits held by the Company as well as the $1.6 million interest income – related party for the nine months ended September 30, 2024 in connection with the $38.7 million of the sale price of the Aframax tanker Afrapearl II (ex. Stealth Berana) which was received in July 2024. For the nine months ended September 30, 2023, the accrued interest income – related party amounted to $0.6 million.
• As a result of the above, the Company reported net income for the nine months ended September 30, 2024 of $46.2 million, compared to a net income of $64.7 million for the nine months ended September 30, 2023. The weighted average number of shares outstanding, basic, for the nine months ended September 30, 2024 was 29.0 million. Earnings per share, basic and diluted, for the nine months ended September 30, 2024 amounted to $1.47 and $1.32, respectively, compared to earnings per share, basic and diluted, of $3.59 and $3.05 for the nine months ended September 30, 2023.
• Adjusted Net Income was $50.6 million corresponding to an Adjusted EPS, basic of $1.61 for the nine months ended September 30, 2024 compared to adjusted net income of $67.2 million, or $3.74 Adjusted EPS, basic, for the same period of last year.
• EBITDA for the nine months ended September 30, 2024 amounted to $52.9 million while Adjusted EBITDA for the nine months ended September 30, 2024 amounted to $57.2 million.
• An average of 10.2 vessels were owned by the Company during the nine months ended September 30, 2024 compared to 10.3 vessels for the same period of 2023.
• As of September 30, 2024, cash and cash equivalents including time deposits amounted to $199.2 million and total debt amounted to nil.

1 EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are non-GAAP measures. Refer to the reconciliation of these measures to the most directly comparable financial measure in accordance with GAAP set forth later in this release. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.

Fleet Employment Table

As of December 2, 2024, the profile and deployment of our fleet is the following:

(3) We have contracted to acquire seven Japanese built drybulk carriers, aggregating approximately 443,000 dwt, which are expected to be delivered to us between January 2025 and May 2025.

CEO Harry Vafias Commented

“In spite of an unexciting and seasonally weak quarter, Imperial Petroleum was yet again profitable. Our adjusted net income this quarter was up 141% compared to Q3 23 and our cash increased by 58.7 % compared to the end of the same quarter last year. Since the beginning of the year we have generated a net profit of close to $46 million with a fleet of about 10 vessels. Apart from our ongoing profitability, our financial strength is shown by our cash of about $200 million in conjunction with zero leverage. Market was volatile and weak during Q3 24’and it still remains an unknown how future geopolitical tensions will affect the tanker and broader shipping market overall”.