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StealthGas Fourth Quarter & Twelve Months 2021 Financial & Operating Results

STEALTHGAS INC. (NASDAQ: GASS), a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced its unaudited financial and operating results for the fourth quarter and twelve months ended December 31, 2021.

OPERATIONAL AND FINANCIAL HIGHLIGHTS1

  • Fleet utilization of 98.3% with 62 days of technical off-hire, mainly as a result of the full completion of two drydockings in Q4 2021.
  • Operational utilization of 96.1%, an improved performance compared to the third quarter of 2021, mainly due to a 10% reduction of spot days.
  • About 49% of fleet days are secured on period charters for the remainder of 2022, with total fleet employment days for all subsequent periods generating approximately $70 million (excl. JV vessels) in contracted revenues. Period coverage for the second quarter of 2022 is currently 63%.
  • Completion of our spin-off of four tankers on December 3, 2021 to a new NASDAQ listed company called Imperial Petroleum Inc.
  • Completion of our 3,500 cbm LPG vessel, the Eco Loyalty (2014 built) sale, for further trading and delivery to her new owner on February 22, 2022. This vessel had been classified as held for sale as at December 31, 2021.
  • Sale in Q1 22’ of our 5,000 cbm LPG vessel, the Gas Inspiration (2006 built), for further trading.
  • Voyage revenues of $36.1 million in Q4 21’, a decrease of $1.2 million compared to Q4 20’, mostly due to a decline in revenues stemming from the tanker vessels which were accounted in StealthGas financials up to December 3, 2021, the spin-off completion date.
  • Impairment charge of $40.2 million as a result of our tankers’ spin-off.
  • Net loss of $38.7 million for Q4 21’ corresponding to a loss per share of $1.02.
  • EBITDA1(losses) of $27.0 million in Q4 21’ compared to EBITDA of $11.8 million in Q4 20’.
  • Adjusted EBITDA1 of $14.6 million in Q4 21’ compared to $13.7 million in Q4 20’ due to higher operating income before impairment charges.
  • Low gearing is preserved even following the completion of the spin-off transaction, as debt to assets stands at 37.7% compared to 37.3% as at the end of 2020.
  • Total cash, including restricted cash, of $45.7 million as of December 31, 2021.
  • Adjusted Net Income1 of $2.8 million for Q4 21’ corresponding to an Adjusted EPS of $0.07.
  • For the twelve-month period ended December 31, 2021, our adjusted net income came in at $10.2 million corresponding to an Adjusted EPS of $0.27.

______________________
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.

Fourth Quarter 2021 Results:

  • Revenues for the three months ended December 31, 2021 amounted to $36.1 million, a decrease of $1.2 million, or 3.2%, compared to revenues of $37.3 million for the three months ended December 31, 2020, mainly due to a decline in revenues stemming from the spin-off of our 4 tanker vessels which were accounted for in StealthGas financials up to December 3, 2021, the spin-off completion date, partially offset by the 15.2% increase of our time charter revenues generated from our LPG vessels.
  • Voyage expenses and vessels’ operating expenses for the three months ended December 31, 2021 were $4.8 million and $15.1 million, respectively, compared to $5.3 million and $14.7 million, respectively, for the three months ended December 31, 2020. The $0.5 million decrease in voyage expenses is small when considering the decline of spot days by 56%. This fact is attributed to the sharp rise of daily bunker costs by almost $2,600 (113%). The $0.4 million increase in vessels’ operating expenses compared to the same period of 2020 is due to fewer vessels on bareboat as our bareboat days declined by 15.8%, along with a further increase of our crew costs due to the COVID-19 pandemic by $0.2 million.
  • General and administrative expenses for the three months ended December 31, 2021 and 2020 were $1.3 million and $0.7 million, respectively. This $0.6 million increase compared to the same period of last year is due to stock compensation costs along with costs related to the spin-off transaction.
  • Drydocking costs for the three months ended December 31, 2021 and 2020 were $0.9 million and $0.9 million, respectively, and both relate to the full completion of two drydockings.
  • Depreciation for the three months ended December 31, 2021 and 2020, was $8.6 million and $9.5 million, respectively, as the number of our vessels declined following the spin-off of our four tanker vessels.
  • Impairment loss for the three months ended December 31, 2021 was $41.5 million and is mainly attributed to the spin-off transaction. Impairment loss for the three months ended December 31, 2020 was $0.7 million relating to one of our oldest vessels.
  • Interest and finance costs for the three months ended December 31, 2021 and 2020, were $3.1 million and $3.1 million, respectively. Although interest charges declined by almost $0.4 million compared to the same period of last year due to the decline of LIBOR rates, we incurred about $0.4 million of swap prepayment and arrangement fees in relation to loan refinancings.
  • Equity (losses)/earnings in joint ventures for the three months ended December 31, 2021 and 2020 was a gain of $1.7 million and a loss of $0.5 million, respectively. The $2.2 million increase from the same period of last year is mainly due to increased operating revenues which enhanced the profitability stemming from our joint venture arrangements.
  • As a result of the above, for the three months ended December 31, 2021, the Company reported a net loss of $38.7 million, compared to a net loss of $0.7 million for the three months ended December 31, 2020. The weighted average number of shares outstanding for the three months ended December 31, 2021 and 2020 was 37.9 million and 37.9 million, respectively.
  • Loss per share, basic and diluted, for the three months ended December 31, 2021 amounted to $1.02 compared to loss per share of $0.02 for the same period of last year.
  • Adjusted net income was $2.8 million corresponding to an Adjusted EPS of $0.07 for the three months ended December 31, 2021 compared to adjusted net income of $1.1 million corresponding to an Adjusted EPS of $0.03 for the same period of last year.
  • EBITDA for the three months ended December 31, 2021 amounted to losses of $27.0 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net (Loss)/Income are set forth below.
  • An average of 39.7 vessels were owned by the Company during the three months ended December 31, 2021 compared to 42.1 vessels for the same period of 2020.

Twelve Months 2021 Results:

  • Revenues for the twelve months ended December 31, 2021, amounted to $150.2 million, an increase of $5.2 million, or 3.6%, compared to revenues of $145.0 million for the twelve months ended December 31, 2020, primarily due to the reduction of our bareboat activity by 47.6% (equivalent to 1,630 days) where revenues are inherently lower, along with an increase in spot days.
  • Voyage expenses and vessels’ operating expenses for the twelve months ended December 31, 2021 were $22.2 million and $61.5 million, respectively, compared to $14.1 million and $53.3 million for the twelve months ended December 31, 2020. The $8.1 million increase in voyage expenses was an outcome of the 16.5% (or 435 days) increase of spot days in conjunction with a year-on-year increase of our daily bunker costs by 50.4%. The $8.2 million increase in vessels’ operating expenses, is due to the seven vessels (six small LPGs and our aframax tanker), which in 2020 were on bareboat either for the entire year or for a fair amount of time, while during the whole of 2021 operated either on time charter or in the spot market for which we incur operating costs. Operating expenses were also affected by a rise in crew related costs due to the COVID-19 pandemic, mostly evident from the second half of the year 2021 and onwards.
  • General and administrative expenses for the twelve months ended December 31, 2021 were $4.3 million and $2.3 million, respectively. This $2.0 million increase compared to the same period of last year is primarily due to stock compensation costs along with costs related to the spin off transaction.
  • Drydocking costs for the twelve months ended December 31, 2021 and 2020 were $5.3 million and $3.6 million, respectively. The costs for the twelve months ended December 31, 2021 mainly related to the drydocking of eight small LPG vessels, while the costs for the same period of last year related to the drydocking of six small LPG vessels and the drydocking of our aframax tanker.
  • Depreciation for the twelve months ended December 31, 2021, was $37.1 million, a $0.4 million decrease from $37.5 million for the same period of last year, primarily due to the decline of the number of our vessels following the spin-off of our four tanker vessels that was completed on December 3, 2021.
  • Impairment loss for the twelve months ended December 31, 2021 was $44.6 million; $40.2 million is attributed to the spin-off transaction while the remaining $4.4 million relates to four vessels, one older vessel and three vessels for which the Company entered into separate agreements to sell them to third parties. Impairment loss for the twelve months ended December 31, 2020 was $3.9 million relating to four of our oldest vessels.
  • Interest and finance costs for the twelve months ended December 31, 2021 and 2020 were $12.7 million and $14.1 million respectively. The $1.4 million decrease from the same period of last year is mostly due to the decline of LIBOR rates along with the reduction in our leverage, partially offset by the incurrence of refinancing related costs.
  • Equity earnings in joint ventures for the twelve months ended December 31, 2021 and 2020 was $8.3 million and $2.7 million, respectively. The $5.6 million increase from the same period of last year is mainly due to the gain on sale of one of the vessels owned by the MGC joint venture arrangement which was sold in 2021.
  • As a result of the above, the Company reported a net loss for the twelve months ended December 31, 2021 of $35.1 million, compared to a net income of $12.0 million for the twelve months ended December 31, 2020. The weighted average number of shares outstanding for the twelve months ended December 31, 2021 and 2020 was 37.9 million and 38.4 million, respectively.
  • Loss per share for the twelve months ended December 31, 2021 amounted to $0.93 compared to earnings per share of $0.31 for the same period of last year.
  • Adjusted net income was $10.2 million corresponding to an Adjusted EPS of $0.27, for the twelve months ended December 31, 2021 compared to adjusted net income of $16.9 million corresponding to an Adjusted EPS of $0.44, for the same period of last year.
  • EBITDA for the twelve months ended December 31, 2021 amounted to $14.7 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net (Loss)/Income are set forth below.
  • An average of 41.3 vessels were owned by the Company during the twelve months ended December 31, 2021, compared to 41.6 vessels for the same period of 2020.
  • As of December 31, 2021, cash and cash equivalents amounted to $32.1 million and total debt amounted to $301.0 million. During the twelve months ended December 31, 2021 debt repayments amounted to $173.0 million.

Fleet Update Since Previous Announcement

The Company announced the conclusion of the following chartering arrangements:

  • A one-year time charter for its 2016 built LPG carrier the Eco Nemesis, to an Oil Major up until March 2023.
  • A one-year time charter for its 2014 built LPG carrier the Eco Corsair, to an Oil Major up until February 2023.
  • A one-year time charter for its 2015 built LPG carrier the Eco Royalty, to an Oil Major until February 2023.
  • A five months’ time charter extension for its 2020 built LPG carrier the Eco Texiana, to an Oil Major up until July 2022.
  • A five months’ time charter extension for its 2012 built LPG carrier the Gas Husky, to an Oil Major up until July 2022.
  • A three months’ time charter extension for its 2020 built LPG carrier the Eco Alice, to an International trading house until April 2022.
  • A three months’ time charter extension for its 2012 built LPG carrier the Gas Flawless, to an international LP trader up until March 2022.
  • A one  month time charter for its 2016 built LPG carrier the Eco Nical, to an International LPG trader up until March 2022.
  • A one month time charter for its 2011 built LPG carrier the Gas Cerberus, to an International trading house up until April 2022.

With these charters, the Company has total contracted revenues of approximately $70 million.

For the remainder of the year 2022, the Company has about 49% of fleet days secured under period contracts.

Board Chairman Michael Jolliffe Commented

Year 2021 has been throughout its course demanding, as it required shipping companies to adapt to the pressures arising from the ongoing COVID-19 pandemic, along with inflationary pressures as an outcome of rising energy prices. Regrettably, the Russian war outbreak in Ukraine has made our global reality uncertain with considerable effects on humanitarian, geopolitical and economic aspects; LPG trade will not remain unaffected, and we may see direct effects such as changes in trade patterns as well as indirect ones such as further increases in energy prices, and various other costs that may increase such as insurance war risk premiums.

Regardless of the dire environment in 2021, StealthGas followed a dynamic pace taking the strategic decision to become a pure player in the broader LPG market; thus, transferring the tankers to a separate listed entity; equally important, we underwent a large scale project of refinancing the majority of our fleet reaping benefits on both cash flow and costs.

Our year ended with a profit of $10.2 million excluding impairment charges, a decent performance when taking into consideration the large increase in our voyage costs, crew costs related to the COVID-19 pandemic as well expenses for drydocking again due to COVID-19 yard restrictions.

Going forward we cannot predict our market’s reality especially in such erratic times; however, our sizeable fleet, our market’s strong fundamentals, LPG rates improvement in the fourth quarter of 2021 along with our healthy capital structure are the strong points upon which we will rely, despite any market disturbances we may face.

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