StealthGas posts highest profit in a decade

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STEALTHGAS, 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 second quarter and six months ended June 30, 2022.

OPERATIONAL AND FINANCIAL HIGHLIGHTS1

  • About 62% of fleet days are secured on period charters for the remainder of 2022, with total fleet employment days for all subsequent periods generating approximately $72 million (excl. JV vessels) in contracted revenues.
  • Improved revenues at $39.3 million with 34 vessels at the end of Q2 22’ compared to 42 vessels for the same quarter of last year.
  • A decrease of $6.4 million in voyage expenses, operating expenses and depreciation in aggregate compared to Q2 21’.
  • Net Income of $12.2 million for Q2 22’ corresponding to an EPS of $0.32 compared to Net Income of $1.6 million and an EPS of $0.04 for Q2 21’.
  • Adjusted Net Income1 of $11.3 million for Q2 22’ corresponding to an Adjusted EPS1 of $0.30.
  • Total cash, including restricted cash, of $90.2 million as of June 30, 2022 compared to $45.7 million as of December 31, 2021.

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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.

Second Quarter 2022 Results:

  • Revenues for the three months ended June 30, 2022 amounted to $39.3 million compared to revenues of $39.2 million for the three months ended June 30, 2021 while the fleet over the corresponding periods was reduced from 42 vessels at the end of Q2 2021 to 34 vessels at the end of Q2 2022 so the vessels remaining in the fleet saw a rise in revenues due to better market conditions.
  • Voyage expenses and vessels’ operating expenses for the three months ended June 30, 2022 were $4.6 million and $13.3 million, respectively, compared to $6.0 million and $15.8 million, respectively, for the three months ended June 30, 2021. The $1.4 million decrease in voyage expenses is attributed to the fewer number of vessels in the spot market. Overall, spot days were reduced by 59% as more vessels were time chartered. The $2.5 million decrease in vessels’ operating expenses compared to the same period of 2021 is due to fewer vessels in the fleet.
  • Drydocking costs for the three months ended June 30, 2022 and 2021 were $0.2 million and $2.0 million, respectively. Drydocking expenses during the second quarter of 2022 relate to the drydocking preparation of three vessels compared to the drydocking of three vessels and to the drydocking preparation of four vessels in the same period of last year.
  • Depreciation for the three months ended June 30, 2022 and 2021 was $7.0 million and $9.6 million, respectively, as the number of our vessels declined following the spin-off of four tanker vessels.
  • Impairment loss for the three months ended June 30, 2022 was nil compared to $3.1 million for the same period of last year, which related to three vessels, one older vessel plus two vessels for which the Company had entered into separate agreements to sell them to third parties.
  • Interest and finance costs for the three months ended June 30, 2022 and 2021, were $2.8 million and $3.0 million, respectively. The $0.2 million decrease from the same period of last year is mostly due to the decline of debt outstanding and reductions in margins due to refinancing of certain loans counterbalanced by increases in Libor rates.
  • Equity earnings in joint ventures for the three months ended June 30, 2022 and 2021 was a gain of $1.9 million and $4.2 million, respectively. The $2.3 million decrease from the same period of last year is mainly due to the gain from a sale of a vessel that was recorded in one of the joint ventures last year.
  • As a result of the above, for the three months ended June 30, 2022, the Company reported net income of $12.2 million, compared to net income of $1.6 million for the three months ended June 30, 2021. The weighted average number of shares outstanding for the three months ended June 30, 2022 and 2021 was 37.9 million and 37.9 million, respectively.
  • Earnings per share, basic and diluted, for the three months ended June 30, 2022 amounted to $0.32 compared to earnings per share of $0.04 for the same period of last year.
  • Adjusted net income was $11.3 million corresponding to an Adjusted EPS of $0.30 for the three months ended June 30, 2022 compared to Adjusted net income of $4.8 million corresponding to an Adjusted EPS of $0.13 for the same period of last year.
  • EBITDA for the three months ended June 30, 2022 amounted to $21.9 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
  • An average of 34.6 vessels were owned by the Company during the three months ended June 30, 2022 compared to 42.0 vessels for the same period of 2021.

Six Months 2022 Results:

  • Revenues for the six months ended June 30, 2022, amounted to $75.1 million, a decrease of $1.6 million, or 2.1%, compared to revenues of $76.7 million for the six months ended June 30, 2021, primarily due to reduction in the fleet size.
  • Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2022 were $8.9 million and $26.2 million, respectively, compared to $12.9 million and $30.9 million for the six months ended June 30, 2021. The $4.0 million decrease in voyage expenses was mainly due to the 63% (or 1,278 days) decrease of spot days. The $4.7 million decrease in vessels’ operating expenses is primarily due to the reduction in fleet size.
  • Drydocking costs for the six months ended June 30, 2022 and 2021 were $0.6 million and $2.6 million, respectively. The costs for the six months ended June 30, 2022 mainly related to the drydocking of one vessel and to the drydocking preparation of three vessels, while the costs for the same period of last year related to the drydocking of four vessels and the drydocking preparation of four vessels.
  • Depreciation for the six months ended June 30, 2022, was $14.1 million, a $5.0 million decrease from $19.1 million for the same period of last year, due to the decrease in the average number of our vessels.
  • Impairment loss for the six months ended June 30, 2022 was $0.5 million relating to one vessel, for which the Company had entered into an agreement to sell and subsequently delivered to its new owner. Impairment loss for the six months ended June 30, 2021 was $3.1 million relating to three vessels, one older vessel plus two vessels for which the Company has entered into separate agreements to sell them to third parties.
  • Loss on sale of vessels for the six months ended June 30, 2022 was $0.4 million, which was primarily due to the sale of one of the Company’s vessels.
  • Interest and finance costs for the six months ended June 30, 2022 and 2021 were $5.1 million and $6.1 million respectively. The $1.0 million decrease from the same period of last year, is mostly due to the decrease of our indebtedness.
  • Equity earnings in joint ventures for the six months ended June 30, 2022 and 2021 was a gain of $3.6 million and a gain of $5.3 million, respectively. The $1.7 million decrease from the same period of last year is mainly due to a gain on sale that was recorded last year of one of the Medium Gas carriers owned by one of our joint ventures.
  • As a result of the above, the Company reported a net income for the six months ended June 30, 2022 of $19.8 million, compared to a net income of $2.4 million for the six months ended June 30, 2021. The weighted average number of shares outstanding as of June 30, 2022 and 2021 was 37.9 million and 37.9 million, respectively. Earnings per share for the six months ended June 30, 2022 amounted to $0.52 compared to earnings per share of $0.06 for the same period of last year.
  • Adjusted net income was $20.0 million, or $0.53 per share, for the six months ended June 30, 2022 compared to adjusted net income of $5.4 million, or $0.14 per share, for the same period of last year.
  • EBITDA for the six months ended June 30, 2022 amounted to $38.9 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
  • An average of 35.5 vessels were owned by the Company during the six months ended June 30, 2022, compared to 41.8 vessels for the same period of 2021.
  • As of June 30, 2022, cash and cash equivalents amounted to $77.9 million and total debt amounted to $292.2 million.

Fleet Update Since Previous Announcement

The Company announced the conclusion of the following chartering arrangements:

  • A sixteen months’ time charter for its 2007 built LPG carrier the Gas Flawless, until Dec 2023 with a charterer’s option to extend a further twelve months.
  • A five months’ time charter extension for its 2020 built LPG carrier the Eco Texiana, until Dec 2022 with a charterer’s option to extend a further twelve months.
  • A six months’ time charter extension for its 2012 built LPG carrier the Gas Husky, until Dec 2022 with a charterer’s option to extend a further six months.
  • A six month time charter for its 2017 built LPG carrier the Eco Frost, from October 2023 until March 2023.
  • A twelve month time charter for its 2017 built LPG carrier the Eco Freeze, until May 2023.

With these charters, the Company has total contracted revenues of approximately $72 million.

For the remainder of the year 2022, the Company has about 62% of fleet days secured under period contracts.

In addition, the following chartering arrangements were concluded on the joint venture vessels:

  • A twelve month time charter extension for the 2007 built LPG carrier the Gas Haralambos, until June 2023.
  • A six month time charter for the 2010 built LPG carrier the Eco Evoluzione, until March 2023.

In addition, with the redelivery of the Eco Chios and the Gas Exelero from their bareboat charterers during Q2 22’ the Company no longer has any other bareboat charter arrangements.

Subsequent Events

The Company also announced the profitable sale from the joint venture of the Eco Nebula to a third party. The delivery of the vessel was concluded in August 2022 and will impact the results of Q3 22’. The Company expects that the net proceeds from the sale after debt repayment, along with any trading profits and remaining capital will subsequently be distributed to the partners.

In July 2022, the Company entered into an agreement with a related party for the acquisition of two 40,000cbm newbuilding Medium Gas Carriers for a capital expenditure of circa $117 million. The vessels are under construction in Korea and are expected to be delivered in Q3 23’ and Q4 23’ respectively. The Company expects to finance the acquisition of these two vessels from its existing cash and the arrangement of a new bank facility subject to customary closings.

Board Chairman Michael Jolliffe Commented

Following the strategic decision to become a pure player in the broader LPG market, this was the second quarter that the StealthGas fleet consisted of only LPG carriers of various sizes. I am very pleased with the results we announced today, as it has been the most profitable six months for our company for over a decade. During the second quarter there was robust demand for our LPG vessels. All vessel sizes in our fleet showed improving results and particularly the handysize vessels boosted our bottom line. The EPS for the six months was $0.52 while our stock currently trades around $3.00. We will continue our chartering strategy placing our vessels on period charters, and while the summer months are usually quieter in terms of activity and we have seen more spot activity we expect that we will find increasing opportunities in the coming months for period charters.

While we are optimistic for the LPG shipping market, we recognise that we continue to operate in a challenging geopolitical environment where issues are being perpetuated. As of late inflationary pressures have been a concern of ours, and we have managed to contain cost pressures for the time being. We have started seeing the impact from interest rises although these have been somewhat moderated from the interest rate hedges we have entered and the historically low debt levels we maintain at this point. As we have noted in the past we maintain a healthy capital structure that allows for investments and moderate fleet renewal for example with the two newbulding medium gas carriers that we expect to take delivery of next year. It is important that we maintain a modern high quality fleet that allows us to offer our services with reliability and safety to our customers.