Stealthgas reports “best ever annual profit”

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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, 2022.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

  • Entered into a number of medium to long term charters increasing forward coverage. About 55% of fleet days are secured on period charters for 2023, with total fleet employment days for all subsequent periods generating approximately $105 million (excl. JV vessels) in contracted revenues.
  • Revenues at $42.7 million for Q4 22’ and $152.8 million for FY 22’ despite having reduced the number of vessels in the fleet from 37 vessels at the end of Q4 2021 to 34 vessels at the end of Q4 2022. The highest quarterly revenue number in the last five years.
  • Decrease of $15.9 million (or 13.2%) in voyage expenses, operating expenses and depreciation in aggregate from FY 21’ to FY 22’.
  • Net Income of $7.7 million for Q4 22’ corresponding to an EPS of $0.20 and $34.3 million for FY 22’ corresponding to an EPS of $0.90, setting a new record in annual profits.
  • Total cash, including short-term investments and restricted cash, of $95.7 million as of December 31, 2022 compared to $45.7 million as of December 31, 2021, an increase of 109.4%.
  • Entered into sale agreements for three of the oldest vessels in the fleet, the Gas Prodigy, the Gas Spirit and the Gas Galaxy. All vessels were unencumbered and the sale proceeds will be reflected in the first quarter 2023.

Fourth Quarter 2022 Results:

Revenues for the three months ended December 31, 2022 amounted to $42.7 million compared to revenues of $36.1 million for the three months ended December 31, 2021 while the fleet over the corresponding periods was reduced from 37 vessels at the end of Q4 2021 to 34 vessels at the end of Q4 2022. The vessels remaining in the fleet earned higher revenues compared to the same period in the prior year due to improved market conditions.

Voyage expenses and vessels’ operating expenses for the three months ended December 31, 2022 were $6.5 million and $14.6 million, respectively, compared to $4.8 million and $15.1 million, respectively, for the three months ended December 31, 2021. The $1.7 million increase in voyage expenses is attributed to the higher number of vessels in the spot market and particularly from increases in bunker expenses due to the rise in oil prices. The $0.5 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 December 31, 2022 and 2021, were $0.6 million and $0.9 million, respectively. Drydocking expenses during the fourth quarter of 2022 mainly relate to the drydocking of two vessels.

Depreciation for the three months ended December 31, 2022 and 2021 was $6.8 million and $8.6 million, respectively, as the number of our vessels declined following the spin-off of four tanker vessels in the fourth quarter of 2021.

Impairment loss for the three months ended December 31, 2022 was $2.6 million related to the agreed sale of three vessels with deliveries in the first quarter of 2023, while the impairment loss for the same period of last year of $41.5 million was mainly related to the spin-off transaction of four tanker vessels.

Interest and finance costs for the three months ended December 31, 2022 and 2021 were $3.4 million and $3.1 million, respectively. The $0.3 million increase from the same period of last year is due to the increase in interest rates despite a reduction in the debt outstanding during the period.

Interest income for the three months ended December 31, 2022 and 2021 was $0.7 million and $0.02 million, respectively. The increase is mainly attributed to short-term investments of $51.5 million during the three months ended December 31, 2022.

Equity earnings in joint ventures for the three months ended December 31, 2022 and 2021, was a gain of $1.2 million and $1.7 million, respectively. The $0.5 million decrease from the same period of last year is mainly due to the sale of a vessel during the third quarter of 2022 by one of the joint ventures.

As a result of the above, for the three months ended December 31, 2022, the Company reported net income of $7.7 million, compared to a net loss of $38.7 million for the three months ended December 31, 2021. The weighted average number of shares outstanding for the three months ended December 31, 2022 and 2021 was 38.0 million and 37.9 million, respectively.

Earnings per share, basic and diluted, for the three months ended December 31, 2022 amounted to $0.20 compared to loss per share of $1.02 for the same period of last year.

Adjusted net income was $10.6 million corresponding to an Adjusted EPS of $0.28 for the three months ended December 31, 2022 compared to Adjusted net income of $2.8 million corresponding to an Adjusted EPS of $0.07 for the same period of last year.

EBITDA for the three months ended December 31, 2022 amounted to $17.2 million. An average of 34.0 vessels were owned by the Company during the three months ended December 31, 2022 compared to 39.7 vessels for the same period of 2021.

Twelve Months 2022 Results:

Revenues for the twelve months ended December 31, 2022, amounted to $152.8 million, an increase of $2.6 million, or 1.7%, compared to revenues of $150.2 million for the twelve months ended December 31, 2021. Improving market conditions pushed revenues higher despite a reduction in the fleet size.

Voyage expenses and vessels’ operating expenses for the twelve months ended December 31, 2022 were $22.2 million and $54.9 million, respectively, compared to $22.2 million and $61.5 million for the twelve months ended December 31, 2021. While voyage expenses remained flat, the $6.6 million decrease in vessels’ operating expenses is primarily due to the reduction in fleet size.

Drydocking costs for the twelve months ended December 31, 2022 and 2021 were $3.0 million and $5.3 million, respectively. The costs for the twelve months ended December 31, 2022 mainly related to the drydocking of five vessels while the costs for the same period of last year related to the drydocking of eight vessels.

Depreciation for the twelve months ended December 31, 2022, was $27.8 million, a $9.3 million decrease from $37.1 million for the same period of last year, due to the decrease in the average number of our vessels.

Impairment loss for the twelve months ended December 31, 2022 was $3.2 million and related to four vessels, for which the Company had entered into sale agreements – two were delivered to their new owners in the first quarter of 2023, while the last one will be delivered to its new owners in March 2023.

Impairment loss for the twelve months ended December 31, 2021 was $44.6 million; of which $40.2 million was attributable to the spin-off transaction while the remaining $4.4 million related to four vessels, one older vessel and three vessels for which the Company had entered into separate agreements to sell them to third parties.

Loss on sale of vessels for the twelve months ended December 31, 2022 and 2021 was $0.4 million and $0.3 million, respectively. The increase was primarily due to the sale of three of the Company’s vessels in 2022 compared to one vessel sold within 2021.

Interest and finance costs for the twelve months ended December 31, 2022 and 2021 were $12.1 million and $12.7 million, respectively. The $0.6 million decrease from the same period of last year is mostly due to the decrease of our indebtedness, partially offset by higher prevailing interest rates.

Interest income for the twelve months ended December 31, 2022 and 2021 was $1.1 million and $0.03 million, respectively. The increase is mainly attributed to short-term investments of $122.5 million during the twelve months ended December 31, 2022.

Equity earnings in joint ventures for the twelve months ended December 31, 2022 and 2021 was a gain of $10.9 million and a gain of $8.3 million, respectively. The $2.6 million increase from the same period of last year is primarily due to a gain on sale of one of the Medium Gas carriers owned by one of our joint ventures and the improved profitability resulting from the operation of both of our joint ventures.

As a result of the above, the Company reported net income for the twelve months ended December 31, 2022 of $34.3 million, compared to a net loss of $35.1 million for the twelve months ended December 31, 2021. The weighted average number of shares outstanding as of December 31, 2022 and 2021 was 38.0 million and 37.9 million, respectively. Earnings per share for the twelve months ended December 31, 2022 amounted to $0.90 compared to loss per share of $0.93 for the same period of last year.

Adjusted net income was $36.7 million, or $0.97 per share, for the twelve months ended December 31, 2022 compared to adjusted net income of $10.2 million, or $0.27 per share, for the same period of last year.

EBITDA for the twelve months ended December 31, 2022 amounted to $73.0 million. An average of 34.8 vessels were owned by the Company during the twelve months ended December 31, 2022, compared to 41.3 vessels for the same period of 2021.

As of December 31, 2022, cash and cash equivalents including short-term investments amounted to $82.3 million and total debt net of deferred finance charges amounted to $277.1 million.

Fleet Update Since Previous Announcement

The Company announced the conclusion of the following chartering arrangements (of three or more months duration):

  • A three years time charter extension for its 2015 built LPG carrier Eco Universe, until Mar 2026.
  • A twelve months time charter extension for its 2018 built LPG carrier Eco Freeze, until Jun 2024.
  • A twelve months time charter extension for its 2016 built LPG carrier Eco Dominator, until Mar 2024.
  • A twelve months time charter extension for its 2015 built LPG carrier Eco Nemesis, until Mar 2024.
  • A twelve months consecutive voyage charters for its 2015 built LPG carrier Eco Dream, until Dec 2023.
  • A six or twelve months time charter for its 2015 built LPG carrier Eco Czar, until Jun 2023 or Dec 2023, option to be declared.
  • A three months time charter for its 2009 built LPG carrier Gas Astrid, until Mar 2023.
  • A three months time charter for its 2011 built LPG carrier Gas Cerberus, until Feb 2023.

As of February 2023, the Company has total contracted revenues of approximately $105 million.

For the remainder of the year 2023, the Company has about 55% of fleet days secured under period contracts, with contracted revenues of approximately $80 million.

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

  • A twelve months time charter for the 2008 built LPG carrier the Gas Shuriken, until Dec 2023.
  • A six months time charter for the 2008 built LPG carrier the Gas Defiance, until Jul 2023.

The Company also announced the sale of three of its oldest vessels, the 2003 built Gas Prodigy, the 2001 built Gas Spirit and the 1997 built Gas Galaxy to third parties. The deliveries of Gas Prodigy and Gas Spirit were successfully concluded in January 2023, and the Gas Galaxy is expected to be delivered in March 2023. All vessels were unencumbered and the sale proceeds will be reflected in the cashflow results of Q1 23’. At the end of Q4 22’ the Gas Prodigy and the Gas Spirit were accounted for as “Held for Sale” and the Company recognized an impairment loss of $2.6 million related to the forthcoming sales.

Subsequent Events

The scheduled delivery of our two contracted 40,000 cbm Medium Gas Carriers has been revised, due to shipyard delays, to Q4 2023 and Q1 2024, respectively.

The third 40,000 cbm Medium Gas Carrier belonging to the joint-venture has also had its scheduled delivery revised to Q4 2023.

CEO Harry Vafias Commented

I am very pleased to report best ever annual profit for StealthGas. In a difficult environment with rising interest rates and a smaller fleet, we managed to earn total net income of $34.3 million or $0.90 per share. Our adjusted EPS for Q4 22’ was 4 times higher than the adjusted EPS for Q4 21’, our total cash doubled from $45.7 million at prior year end to $95.7 million at December 31, 2022, while our total assets were $821.5 million at December 31, 2022 with only $303.6 million in total liabilities! These results give us the energy we all need to continue to push for more noteworthy results and to strengthen the Company and our balance sheet even further!

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