Imperial Petroleum Reports Record Net Income of $35.7 Million in Q1

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IMPERIAL PETROLEUM INC. (NASDAQ: IMPP, the “Company”), a ship-owning company providing petroleum products, crude oil and dry bulk seaborne transportation services, announced its unaudited financial and operating results for the first quarter ended March 31, 2023.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

  • Fleet operational utilization of 85% in Q1 23’ with 6 days of technical off hire and 495 (54%) of our fleet days dedicated to spot activity.
  • Delivery of 2 Handysize dry bulk carriers, the Glorieuse and the Eco Wildfire, towards the end of March 2023 – expanding our fleet to 12 vessels.
  • Revenues of $65.4 million in Q1 23’ – up $60.3 million or 1,182% from Q1 22’.
  • Record net income of $35.7 million in Q1 23’ up by $35.5 million compared to Q1 22’ or 17,750%.
  • EBITDA1 of $39.9 million in Q1 23’ up $37.3 million or 1,435% from Q1 22’.
  • Cash and cash equivalents, including time deposits, of $114.1 million as of March 31, 2023 of which approximately $45.5 million were utilized within April 2023 for the repayment of all outstanding loans.
  • Proposed spin-off of two dry bulk carriers under a new Company called C3is Inc.
  • Expect to regain compliance with the Nasdaq minimum bid price requirement, following a 1:15 reverse stock split which took effect on April 28, 2023.

First Quarter 2023 Results:

  • Revenues for the three months ended March 31, 2023 amounted to $65.4 million, an increase of $60.3 million, or 1,182%, compared to revenues of $5.1 million for the three months ended March 31, 2022, primarily due to the increase of our fleet by eight vessels and strong market rates, particularly in the tanker sector.
  • Voyage expenses and vessels’ operating expenses for the three months ended March 31, 2023 were $16.9 million and $6.9 million, respectively, compared to $0.5 million and $1.8 million, respectively, for the three months ended March 31, 2022. The $16.4 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 468 days (1,733%), as we are responsible for voyage expenses under spot charters unlike time charters, and the rise in daily bunker costs by $5,300. The $5.1 million increase in vessels’ operating expenses, was primarily due to the increase in the number of our vessels.
  • Drydocking costs for the three months ended March 31, 2023 and 2022 was $0.6 million and nil million, respectively. This increase is due to the fact that during the three months ended March 31, 2023 one of our Handysize dry bulk carriers underwent drydocking.
  • General and administrative expenses for the three months ended March 31, 2023 and 2022 was $1.0 million and $0.1 million, respectively. The increase is due to increased reporting requirements, mainly due to our proposed spin-off.
  • Depreciation for the three months ended March 31, 2023 and 2022 was $4.1 million and $2.2 million, respectively. The change is attributable to the increase in the average number of vessels in our fleet.
  • Interest and finance costs for the three months ended March 31, 2023 and 2022 were $1.4 million and $0.2 million, respectively. The increase is mainly attributable to the increase of our borrowings in conjunction with a sharp rise of LIBOR rates. We have since repaid all of our outstanding bank debt.
  • Interest income for the three months ended March 31, 2023 and 2022 was $1.3 million and nil million, respectively. The increase is attributed to time deposits the Company entered into during the period.
  • As a result of the above, for the three months ended March 31, 2023, the Company reported net income of $35.7 million, compared to net income of $0.2 million for the three months ended March 31, 2022. Dividends paid on Series A Preferred Shares amounted to $0.4 million both for the three months ended March 31, 2023 and 2022, respectively. The weighted average number of shares of common stock outstanding, basic, for the three months ended March 31, 2023 was 15.1 million.
  • Earnings per share, basic, for the three months ended March 31, 2023 amounted to $2.31, compared to a loss per share of $0.18 for the three months ended March 31, 2022. EBITDA for the three months ended March 31, 2023 amounted to $39.9 million compared to $2.6 million for the three months ended March 31, 2022. Reconciliation of EBITDA to Net Income is set forth below.
  • An average of 10.10 vessels were owned by the Company during the three months ended March 31, 2023 compared to 4.04 vessels for the same period of 2022.

CEO Harry Vafias Commented

Our performance in the first quarter of 2023 resulted in record revenues and profitability. We are pleased that our strategies are paying off. Commercially, we capitalized on the strong tanker market and efficiently utilized an average fleet of 10 vessels to produce in a single quarter net income of $36 million marking a 17,750% increase compared to the net income generated in the first quarter of 2022, and an EBITDA of nearly $40 million that is 1,435% higher than the same period of last year. Strategically, we proposed the spin-off of 2 of our dry vessels to a separate company called C3is Inc. In terms of financial strategy, we paid down all our debt and have stopped issuing new shares. Without a doubt we are well positioned to benefit from good market conditions that seem will last.

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