Imperial Petroleum buys back stock in profitable quarter

Imperial Petroleum announced its unaudited financial and operating results for the third quarter and nine months ended September 30, 2023.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

• Fleet operational utilization of 70.5% in Q3 23’ as the Company faced commercial idle days due to seasonal factors and technical off hire due to the scheduled drydocking of three product tankers.
• 67.2% of fleet calendar days equivalent to 565 days in Q3 23’ were dedicated to spot activity.
• Net income of $12.1 million in Q3 23’ corresponding to a basic EPS of $0.56.
• Revenues of $29.4 million in Q3 23’ generating an EBITDA of $13.9 million.
• Cash and cash equivalents and time deposits of $125.9 million as of September 30, 2023 – approximately 3 times higher than our current market capitalization.
• Gain on sale of the Aframax tanker Afrapearl II (ex. Stealth Berana) of $8.2 million and $0.6 million of related interest income in connection with $38.7 million of the selling price which is receivable by July 2024.
• Net income of $64.7 million in 9M 23’ up by $48.9 million or 309% compared to the net income in 9M 22’. Basic EPS for the 9M 23’amounted to $3.59 which is approximately twice our current share price.
• Under the share buyback program announced in September 2023, the Company has repurchased a 1,136,714 common shares for a total amount of approximately $1.9 million.
• As a means to further enhance shareholders value, in October 2023, the Company repurchased 2.58 million outstanding warrants for $0.6 million.

Third Quarter 2023 Results:

• Revenues for the three months ended September 30, 2023 amounted to $29.4 million, a decrease of $13.2 million, or 31.0%, compared to revenues of $42.6 million for the three months ended September 30, 2022, primarily due to lower charter rates for the period, the sale of our aframax tanker, increased commercial idle days due to seasonal factors and lost revenue due to the scheduled drydocking of three of our product tankers.
• Voyage expenses and vessels’ operating expenses for the three months ended September 30, 2023 were $12.6 million and $6.1 million, respectively, compared to $18.4 million and $4.9 million, respectively, for the three months ended September 30, 2022. The $5.8 million decrease in voyage expenses is mainly due to the decrease of our bunker cost by approximately $13,400 per day, as a result of lower oil prices prevailing during the three month period ended September 30, 2023. The $1.2 million increase in vessels’ operating expenses was primarily due to the increase of our fleet by an average of one vessel.
• Drydocking costs for the three months ended September 30, 2023 and 2022 was $2.8 million and nil, respectively. This increase is due to the fact that during the three months ended September 30, 2023 three of our product tankers, namely the Magic Wand, the Clean Nirvana and the Clean Thrasher, underwent drydocking.
• General and administrative costs for the three months ended September 30, 2023 and 2022 were $1.3 million and $0.3 million, respectively. This increase is mainly attributed to a $0.6 million increase in stock-based compensation costs along with reporting costs related to our spin off project.
• Depreciation for the three months ended September 30, 2023 and 2022 was $3.5 million and $3.4 million, respectively. The change is attributable to the increase in the average number of our vessels.
• Gain on sale of vessel for the three months ended September 30, 2023 was $8.2 million, which was due to the sale of the Aframax tanker Afrapearl II (ex. Stealth Berana) to C3is Inc., a related party.
• Interest and finance costs for the three months ended September 30, 2023 and 2022 were nil and $0.3 million, respectively. There was no debt outstanding during the three months ended September 30, 2023.
• Interest income for the three months ended September 30, 2023 and 2022 was $1.7 million and $0.4 million, respectively. The increase is mainly attributed to a higher amount of funds placed under time deposit at improved rates as well as to the $0.6 million of accrued interest income – related party as of September 30, 2023 in connection with the $38.7 million of the selling price of the Aframax tanker Afrapearl II which is receivable by July 2024.
• As a result of the above, for the three months ended September 30, 2023, the Company reported net income of $12.1 million, compared to net income of $15.5 million for the three months ended September 30, 2022. Dividends paid on Series A Preferred Shares amounted to $0.4 million for the three months ended September 30, 2023. The weighted average number of shares of common stock outstanding, basic, for the three months ended September 30, 2023 was 19.8 million. Earnings per share, basic, for the three months ended September 30, 2023, amounted to $0.56, compared to earnings per share, basic, of $1.18 for the three months ended September 30, 2022.
• Adjusted net income was $4.5 million corresponding to an Adjusted EPS, basic of $0.19 for the three months ended September 30, 2023 compared to an Adjusted net income of $15.5 million corresponding to an Adjusted EPS, basic, of $1.18 for the same period of last year.
• EBITDA for the three months ended September 30, 2023 amounted to $13.9 million, while Adjusted EBITDA for the three months ended September 30, 2023 amounted to $6.3 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
• An average of 9.1 vessels were owned by the Company during the three months ended September 30, 2023 compared to 8.1 vessels for the same period of 2022.

Nine Months 2023 Results:

• Revenues for the nine months ended September 30, 2023 amounted to $153.8 million, an increase of $94.7 million, or 160.2%, compared to revenues of $59.1 million for the nine months ended September 30, 2022, primarily due to the increased size of our fleet by an average of four vessels.
• Voyage expenses and vessels’ operating expenses for the nine months ended September 30, 2023 were $48.7 million and $20.0 million, respectively, compared to $23.3 million and $10.0 million, respectively, for the nine months ended September 30, 2022. The $25.4 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 1,060 days (144.4%). The $10.0 million increase in vessels’ operating expenses was primarily due to the increase in the average number of vessels in our fleet by approximately four vessels.
• Drydocking costs for the nine months ended September 30, 2023 and 2022 were $4.1 million and nil, respectively. This increase is due to the fact that during the nine months ended September 30, 2023 three of our product tankers and one of our drybulk carriers underwent drydocking.
• General and administrative costs for the nine months ended September 30, 2023 and 2022 were $3.8 million and $0.8 million, respectively. This rise is mainly attributed to $1.7 million of stock-based compensation expense along with a rise in reporting costs related to our spin off project.
• Depreciation for the nine months ended September 30, 2023 was $12.1 million, a $3.8 million increase from $8.3 million for the same period of last year, due to the increase in the average number of our vessels.
• Impairment loss for the nine months ended September 30, 2023 stood at $9.0 million, and related to the spin-off of two of our drybulk carriers to C3is Inc. The decline of drybulk vessels’ fair values compared to the values prevailing when these vessels were acquired, resulted in the incurrence of impairment loss.
• Gain on sale of vessel for the nine months ended September 30, 2023 was $8.2 million, which was due to the sale of the Aframax tanker Afrapearl II (ex. Stealth Berana) to C3is Inc., a related party.
• Interest and finance costs for the nine months ended September 30, 2023 and 2022 were $1.8 million and $0.7 million, respectively. The $1.8 million of costs for the nine months ended September 30, 2023 relate 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, 2023 and 2022 was $3.8 million and $0.4 million, respectively. The increase is attributed to our time deposits during the period at favourable time deposit rates as well as to the $0.6 million of accrued interest income – related party as of September 30, 2023 in connection with the $38.7 million of the selling price of the Aframax tanker Afrapearl II which is receivable by July 2024.
• As a result of the above, the Company reported net income for the nine months ended September 30, 2023 of $64.7 million, compared to a net income of $15.8 million for the nine months ended September 30, 2022. The weighted average number of shares outstanding, basic, for the nine months ended September 30, 2023 was 16.9 million. Earnings per share, basic, for the nine months ended September 30, 2023 amounted to $3.59 compared to earnings per share, basic, of $1.61 for the nine months ended September 30, 2022.
• Adjusted Net Income was $67.2 million corresponding to an Adjusted EPS, basic of $3.74 for the nine months ended September 30, 2023 compared to adjusted net income of $15.8 million, corresponding to an Adjusted EPS, basic, of $1.61 for the same period of last year.
• EBITDA for the nine months ended September 30, 2023 amounted to $74.8 million while Adjusted EBITDA for the nine months ended September 30, 2023 amounted to $77.3 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
• An average of 10.3 vessels were owned by the Company during the nine months ended September 30, 2023 compared to 6.1 vessels for the same period of 2022.
• As of September 30, 2023, cash and cash equivalents and time deposits amounted to $125.9 million and total debt amounted to nil. During the nine months ended September 30, 2023 debt repayments amounted to $70.4 million.

Fleet Employment Table

As of October 25, 2023, the profile and deployment of our fleet is the following:

As previously announced, the Company has also entered into an agreement with affiliates of the Vafias family to acquire two tanker vessels, the aframax tanker Stealth Haralambos, built in 2009 and the product tanker Aquadisiac built in 2008, with an aggregate capacity of approximately 163,716 dwt. The aggregate purchase price for these acquisitions is $71 million. Both vessels will be delivered on a charter-free basis by the end of January 2024. The Company expects to finance the purchase price with cash-on-hand. 

CEO Harry Vafias Commented

I am very pleased with our performance during the nine months of 2023. In this period, we managed to generate net income of $64.7 million and operating cash flows of $73.7 million – both results being well above our current market capitalization. I am also pleased by our Board’s strategic decision to commence a share buyback program of $10 million as this is a means to give value back to our shareholders. Under this program we have purchased to date about 1.1 million shares and in addition we have repurchased 2.58 million outstanding warrants, as we aspire that these recent moves together with our strong financial results and healthy balance sheet will soon be reflected in our share price.