StealthGas (GASS) 24 Aug 222022 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the StealthGas Q2 2022 results call and webcast. [Operator instructions]. Please note that today's conference is being recorded. I would now like to hand over to your first speaker, Mr. CEO. Vafias, Harry sir. ahead, Please go

who Good morning, earnings and second XXXX aspects. Mr. to me to Investor discuss the and call. This welcome financial Sistovaris, is conference today CEO, our our handling is our on Relations, quarter calls everyone, is Harry joining Vafias,

are like point could Before stage, which dollars. and reflect would the take we Exchange you with US current Slide of showed a all we'll all we respect I'd earnings implicitly if Today, financial discussing read last be LPG I we and to improvement a on released filing clarified, to further remind the and for our also the out to presentation, trading XXXX, stated to events year. quarter with Commission. as a performance. presentation. disclosed views second this At forward-looking pure you compared commence future our in to Securities amounts disclaimer also moment quarter like that that statements, second are a results was StealthGas’s otherwise quoted, Risks fantastic which unless in that company, of X

quarter, see proceed highlights charter charting X, market these and let's of of in particularly inquiries strong our healthy the Asia number quarter. we of quarter In continued, XXXX, we the results west also So, in for In general. that the in second we what discuss in of we market Suez, the first the show to Slide summarize ships. but the experienced second

the was vessels and similar of days our utilization year, at previous levels than were reduced. quarter. last to spot Idle of it XX%, for better terms operational In fleet,

remainder have $XX generating for drydock contractors’ fleet any the vessels of million, That during period XX% XXXX, QX. subsequent in we our now We will periods with about happen all did revenues. JV charters employment quarter. days for fleet days in of on total QX and secured However, this excluding not vessels

sell an we In profits selling our meter cubic previously partners, after Nebula. MGC terms Monarch, our announced sales with XX,XXX of current and to JV profits meter into to quarter, and repayment a agreement vessel, and we during sale It the our for the accumulated XXXX-built further current X,XXX the entered party, will the largest a furthermore, third activity partners quarter. of vessel, vessel, together profitable the our the the cubic quarter, Gas during during distributed completed the the And was to be debt Eco trading. the purchase oldest

As a result, we estimate an million. additional to increase by our available cash $XX

vessels, and of fourth existing under vessels always today, with new for also already we entered order fund fleet million we’d our in to each, agreement and place purchase Carriers these As expect with $XXX two CapEx quarter relevant circa XX,XXX to third debt. Gas to these XXXX. of If delivery cash related cubic we vessel, meters more of XXXX. with a The in the a we modern party in an Medium into we renew our to newbuilding Korea, aim new through delivery expect were construction

financiers, phase. approached commitment already the have are of and one We in our

reduction in the more results. at were included four at It December, the the mind comparing voyage million and briefly highlights, came to our the last fewer part the spinoff year, was XXXX a vessels rise in a despite need of expenses $X.X revenues operating absence very $X.X and when having at $X.X beneficial reflected we fleet. and the higher where financial that was from Looking the expenses, came conspicuous keep is million as the that previous TCE in depreciation fleet, a in we had revenues million, in is tanker last we this that the our year-on-year, operating the there of million, tankers vessels same saw a in effects in $XX.X revenues LPGs The the $XX.X in Overall, fleet. million in last year in quarter, were strong in of vessels also QX and about quarter the than increase combined.

Our million first the net and to $XX.X profit $X.X million, million year, for the compared in quarter was quarter. last $X.X

While adjusted we with brings at the six-month and adjusted our $XX of to $XX.X cash, last $XX.X increasing restricted mainly refinancing derivatives, end from at of basis $X.XX. through the ended end the That same quarter net adjusted the an equivalents $XX.X completed, million, basis, our EPS cash million EPS this We of internal on time, excluding QX on profits an the cash while and we of six sales $X.XX. manage million, vessels the generated our QX, including approximately million at or year, cashflow. during and to of ’XX,

maintaining capitalized, of ratio XX%. low a We continue be debt well to

our better X announcement, five us and our employment of update. concluded levels. fleet Slide or previous Let similar charters successfully at to Since we extensions new charter move

were charter eight of market, XX, during JV seven vessels, higher two back spot out The a August in vessels of of charter, that our fleet to the slightly types, XX vessels, do than we us before. on terms excluding bareboat. In and operating remained QX. on on-time not have delivered as of XX bareboat any

is summer the months, are more on-time we on we as market, the we enter period. target winter our the charters sport don't in expect to have to vessels fix but As more

Our the period remainder the XXXX is coverage order XX%. of for of in

expected six of XXXX. going we provide the Slide remainder X, We vessels two joint forward, of ventures. close million which of to an within our update as secure have All time-chartered. In now to $XX received revenues is to be are million $XX

levels months. LPG have which for extended Our first venture, high joint time comprises of charter small XX the gas vessels,

from The on and below associated of the As this Nebula share, our The accumulated previously the X, cash sale, distributed the and sell was delivery million. million boost debt receive we Eco this be vessel a profits, a partners, the the will $XX occurred along We’ll as biggest decided, healthy cash back. to profit with expect vessel said, the base. XXXX-built along cash to our repaid. vessel, with the already at about $XX shade will August from

size for carriers And rate. Our two comprises construction. more we time-chartered plus one Bremen. time-chartered JV Last of quarter, gas significantly medium Evolution this Gaschem a under second quarter, at the we Eco higher six months the

in XXXX, million have rising enough combined, together the fund the MGCs, arranged. related We to of after including delivery with of prices cash our sale all sectors, older one venture proceeds joint financing last be arrangements don't to about sale all, million, the expect any year JV in has Our hand finance the newbuilding cash the $X Nebula CapEx to underpin $X the After of solid across of newbuilding the including to have be a base itself any proceeds. as MGC short. to vessel the acquisition, to

of gas. fleet terms graph In the regional company snapshot This is geography on and on vessels. of distribution our X, of focuses positioning a trade local our Slide of

Excluding in the of in XX vessels Far trading two particularly currently two our and Suez, of Middle US have trading the Africa. in west vessels XX trading we vessels East, JV East vessels in Caribbean, Europe, August, and vessels, and as

now more call conditions the increased in winter to sea the will activity our into last Europe Europe for market Mr. moved We as have better Med-Black the and I approaches. turn call, Sistovaris financial area the expecting since performance. over vessels given

Harry, will XXXX. of and morning I performance you, financial good everyone. the Thank to for our discuss second quarter

Voyage the in statement where to Slide the as see X, us period market. for due came revenues $XX.X same the same against income vessels previous at partly we spot Let year. million, second last the the fewer the year, in the of XXXX, turn quarter to almost of

in crew QX, days lower fleet the cost for stable $X.X revenues base. the higher saw the starting reasons. about XX% the to combined, net down to all resulted that of year, compared order and in in inflation. million the by to compared situation due of to We The for in QX year, that versus had by a reduction of to be vessels. of the of number the period at last And number and Voyage in a albeit the our last $X.X first face stable just X%. the positive also levels would fewer year, expenses $X.X same voyage the vessels chartered to in $XX.X the Our decreased Operating the of the decreased of end same vessels, market in XX% million LPGs to from XX given vessels four $XX.X an increase revenues period at to last Were market, same decrease exclude a spot rising TCE operating continue million, this rates the to note we along increase a pressures, the XXXX. revenues significant days. and compared of at due XX the end as cost due should last the in fewer cost handysize particularly we to year, XXX spite effect, result, quarter million COVID were of of we expenses costs million

quarter. saw of a of number the that period, few we the That for year. to decrease, costs, due from means the we had large vessels the expect to in the vessels million, and for $X.X a a million of still vessel that of Depreciation terms for is $X We not we drydock vessels. due another item In couple drydock second in $X.X date drydocking decrease during any remainder extended million months. to another five the did

as of facilities. $X was due any cost to more from our recent interest these next the into, rate start also million year. the $X.X entered quarter, decrease in to to debt of the we Interest the the of increase effect the mainly in the increases million quarter we costs the in average During interest or the of of an decrease to make and will partly in the loan the second have average trend gain to this hedges during million, to due $X.X of did the income finance we $X.X swaps million seeing due the the charge in valuable. gains as due period, We regular relates fair rollover rate incur reverse, repayments, value margins. rate to reduction expect impairment Other not there and of year, interest the one to Beginning previous during sale declined in partly this vessel. loss related

we of the to analyzed above, an to adjusting the result income compared EPS derivatives net increase income corresponding that's million, impairments of last a XXXX and six-fold As of a of second all year, quarter vessel $X.XX. and of net points ended excluding million, a $XX.X $XX.X with

For the first $XX of net half of XXXX, and had $X.XX. income EPS we an million, of

was, the cash, million, the restricted the including increase the liquidity, our order million the X, liquidity end in Slide from of in of cash primarily at a increase vessel flow. $XX.X from in XXXX. refinancings sheet balance and in our QX and substantial came from sales, secondarily, operating $XX.X at Looking quarter, The the

Our The vessels due two our of $XX net book sale the to and is investments of $XXX value value million JV our to in from million million. $XXX decreased depreciation vessels. total

the The will XXXX. of With debt Eco the Nebula, million, quarter $XXX in sale be value last of reduced the year. $XXX end is overall million the of at outstanding from the third

expect million per close year a was be per forward it $X.X $XX going to We amortization while million our about debt ago. quarter to quarter,

structure. Slide financial discuss capital So, with X, briefly will concluding we and commentary debt our our profile

up before, We and margins, important of since refinancing mentioned February cash, the large part thus reduced the by our fleet. a XXXX, loan more XXXX, the and about raised the million, As reduced $XX of of we beginning project motorization. until data underwent

refinancing no until first our when XXXX risk have we result, a due. balloon March is As

not second quarter, enter new we the arrangements. any financing During did into

expect financing vessels. a the two relation to before year We of the arrangement the to in into enter new end newbuilding

our of them and expect finance financiers we vessels, will both one to to that approached up leverage re willing have X%. We we

The rapid effect our ratio keep leverage, continue more and negative six have on Overall, will rates have below low with we interest the we details costs. rise in debt a have unencumbered in our We will interest continue to to XX%, presentation. third vessels. quarter

We the third will increase cost start quarter. seeing the in in

have have put However, be we lower well overall level as for we effects of today. our these debt place the hedges negative mitigated will by the debt, in XX% rate interest as

hand a $XXX who the outlook. For our of Vafias, you quarter year to end discuss the now to compared I million, debt CEO, $XXX XXXX. comparison, was the million will second and will at ago, the market Harry company over

shows, plants to come this in The this capacity expected seen with as more Indeed, LPG, underpin the the a been month-on-month second tons levels. seen the Last pressurized importer by as the as Needless becoming and year-on-year that been on seems yet for of X% recent to ongoing we ongoing first of the China, China's inputs August. market's additions. we’re any to have discussed close had reports May. increase imports far, and Out geopolitical given India only Ukraine, year, in grown shows record stronger and very Moving the we it are continues of years, PDH of rising difficult and foresee how providing additions not Asia. are insight the X.X-million-ton lifting quarter, year lower expecting run would plants say tensions strong equation Slide to helped in delays research have had vessels. growth performance. import the demand largest had This have million we not from imports progresses. X.X PDH our some impact, along been rate would of on restrictions to to LPG it’s change. potent for XX seven in month COVID-XX XX, added plants market our the market. Data million capacity to positive the significant show, months tons at $X a the thus but in in the expect expected a for We this seem of reversed X% run the moderate in latest Chinese XXXX, has a COVID growth largest pandemic, there

import in on have this unconfirmed, prices hit Households rise the been and However, this prices. questions from hampered the hikes cylinder be domestic data demand the LPG remain as to sustainability subcontinent the LPG four demand by subsidizing the drop growth, of is India LPG may drop growth LPG by and despite in is the government LPG echoed keep of price everywhere, in And oil prices, commensurate recession. and in reluctant gas globally, cylinders. to prices year, a economic possibly the process increases in is in as

world, a of also the has the conflict. a of from that side part US, European the risen result other now the imports of recently, On XX% Ukrainian are LPG percentage as

keeps a to on in increasing capabilities continue export expected near-term of imports petrochemical trend this increase years demand. expect ahead, We the Europe, US its back the Northwestern and the are as the of rising to LPG in

LPG best is European performing large said, previously As a trade has vessels lately. and intra-regional been LPG our markets the one small market for of for vessels,

sources. Although have a Rosha has for source never need been the changes major diversifying being LPG, underpinned yet Europe events LPG That LPG trading patterns. not we said, for US-sourced in significant been of increasing evolution. Besides On as Europe. have with imports, one Slide the a cargo we evolving recently, XX, market, from transferring LPG been small business, have fundamentals has key more Algeria to our company rates market present identified we the commencing

witnessed improve to continue basis, rates on we all double-digit while a charter on basis, time year-over-year QX, quarter-on-quarter a among a LPG small During sub-segments growth.

trade QX of both firm quite for the during LPG side. was Suez, the small in especially enjoy Looking Owners Europe. LPG and and active, pressurized the LPG at market carriage market, petrochemical the on Northwest west

particularly imports, approached, as Asian As activities and would saw of and that assisted in that of was QX. on in are significant part we the a spot rebound currently of our restrictions down, trading expect, was Chinese India previously some in summer vessels the rebound in the tight of spot. it August, July In TCE, were imports. Easing Suez, COVID market East for May. a slowed

came demand summer for the months. the However, vessels, pressure under during small

has The shared, for overhang remained fundamentals rates at look ships to XX older over been winter of are the many fleet promising. continue our continues we gas have but small pressurized lower, an levels. of years While going into more healthy on to core old. activity There generally months, period optimistic vessels be

So strong, in market have XXXX, far LPG scrapping. with for any being shipping seen the we not

partly newbuilding we vessels subdued, finding sooner activity trade, scrapping together continues to expect later. partly the New to ordering for recent globally. environmental older risen harder The availability, inflation prices surge it in in also and with see and increasing of because because to regulations the yard or have fickleness make be activity

and direction on a of regulations choice, more New emissions, of environmental fuel a matter decision. new vessels make to related ordering of the clear the lack risky

vessels delivered recently there and be to beyond published As per until that. orders, are end order on of XXXX, XX couple more the a

is seeing tip vessels While supply-demand new A we sub did our that of any more since the X.X% in segments. one in bulk a beginning presents Slide before order, of handful ordering see not increase the risk shipping share the is foresee smallest annual of could be to that on the the smallest, the the performance XXXX. if balance, of of scrapping, vessels fleet we improbable. company X

June past we price a Our and volatile gas time, the NAV, earnings the performance our oil. correlation is a over has deep close slide months, to we ahead. continue six making trades few to At we in doubling more that still see stock months In price the very ratio. with at the while share discount quarters XX, reiterate are affect outlining the on that that $X.XX, same to risen the in a key in EPS will variables attractive market, a with crude to stock

the Given thermal, in with the it’s COVID market's now situation market predict the our difficult especially situation future. quite Ukraine, China, current in to

continue debt that forward further easily going have fleet market we Our and quite strong leverage a that point upon and sizable manageable to improvement, levels. can any we is diversified LPG have

a are low we book, the of XX XX% is fleet of as enjoy solid, quite industry market order age. Our while fundamentals years relatively above

a in focus economic in quarters revenue trade secure sensitive we contain pressures. more the product global and with stream following costs, our increase fixed may to at be the Regardless time of charters, a pressures while that our will the same recessions. inflationary cost downside, to situation, the is On

financiers sell We that will pay LPG returns. as structure a pure fleet, We decision company sized our with to gas relying asset StealthGas vessels. confident feel addition of the our for LPG and capital all our renewing the strategic upon opportunities the and will to carriers, of our off advantage any strengthen make the our broader be of across spectrum, robust medium taking support two the

the results to the we're quarter, - seasonality, the The same but profitability, decade. today due third years We time, in in been of traditionally see best and last the the the expect not quarter second in LPG first was is very on this should in results especially in a near with weaker same quarter announced momentum market going. XQuarters the keeps long We the which positive. strong to hope the that has and long-term, optimistic best

now have We presentation, floor for the end questions. and the like reached would to open of your the

So, Operator, please open the floor.

[Operator Instructions]. you. Thank

your Our of from Chandra. Sai first Hello, question. questions from ask (Infosys). comes Sai line the Please Chandra

Your Hello, Mr. open line is (Infosys). is your open. from Chandra, line

a ask may question. You

go can next the caller. We to

Sure. one. Sullivan from line We're going to the question. questions stand proceed by. Tate Group. with of from come The your ask Please Please the Maxim next next

on within can be background day. And give decision or to Carriers Good Harry. JVs Hello. newbuild versus gas? small the carriers? as you those well gas in Yes. Gas your more acquire Medium smaller buying the will

that ships The less strategy. two ships are profitability bigger balance XXX% from will small the have by smaller want owned to hear exactly following be And two ships, firm. Tate. Thank more owned since The we've market and is bigger will StealthGas. fleet and - said bigger between to ships, that by these when bigger be on ships we before the you. Nice having XXX% ships you. we

you delivery when you that long small And ordered second ships, delivery medium what’s ‘XX, ordered? if take please? newbuilds you ships how second of or LPG order then these in of ago would were probably And sized would question, part the Okay. the today, of half originally if

ships, was think, And Sorry. were These I what QX question? ordered in second XXXX. the

for newbuilds carriers today, you delivery small or Gas would If or or Medium earlier? they ‘XX be order Carriers perhaps would later even gas

‘XX, be for ordering from they but the would we refrain with it newbuilds. today, as would are prices Yes,

please? straw you was in it to profits market built talk - - can you can and even the selling see they versus about if talk this you Okay, in ships, Nebula, the I can of for type great. in decision you retaining Can generate market, in XXXX. And the this sell

Tate, logic. a it’s quite simple

that's If the being and you XX due, then SS, sizeable of when is board profit, her do JV you sale. the ship you old can the you and StealthGas at approved can partners Survey take decision make And the which why sell years a sell the price and with a Special it.

one And you. I more me, Thank may. if for Great.

think, LPG the dry of ship or for, five ships drydocking for You the per Approximately noted costs second year. have in been smaller historically drydock how I costs much half costs ships?

on on It only location the as not location the age the depends depends and size. the ship. of It’s well. the It

the we So, right send back specific with exact like, if us you’d have numbers. I now, come can can and but don't an more info you email numbers, more

great. Okay, All right. Thanks. details. for you Thank Thanks. the

instructions]. [Operator

any questions conference We no further you have XQuestions. to we comments. closing back I this hand for have now at just time. will Oh, the

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line open. Your is

know leave Did Hi. don't about had stock buybacks. I asked I moment. Yes. if anyone for a you they? to

didn't. they No,

NAV. the number, little I our tremendously don't price Maybe know. but bit to talk I've What market share is multiple $XX whatever okay. a we about lower. the of number it's lower, of numbers what - - a it's Oh, a used crunched is.

XXX% Yes, agree you I would with

cash. buys have one Well, the market. Why to of Good. a in aren't to we be stock cash, more lot seems of we It best back? buying me the

Yes. But results. the what you said QX forgot in probably we

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markets really buybacks. two, discuss they to we quarters before of told bad and solid disruptions, COVID board we two, three three see want had us The the has years since share

enough. Fair great. Okay,

the second quarter. solid guess So, I is this

at it'll if solid matter for QX, So, have level. very think discussion a a I we be board

Thank Great. you very Harry. much,

ask Tate Partners. next Please the questions Sullivan question. question. from the from The to are your line proceed We of with next going Maxim come

on. a Well, thank follow-up taking for you

momentum strong in of and XQ, XQ an of seems seasonality, and still you’re Just, year? seasonality particularly after now rate presentation, still will the fleet in the not XQ as table equivalent weakest in but good the on time you without XQ, saying as a rates, be tankers earlier, then some like probably charter but quarters commented you the to do the be so every in spinoff, year, the LPG expect and your the it

with As QX and QX weaker. circumstances, QX normal under - are QX and strong. are

you Great. right. All Thank very great much. a day. Have

question. next Michael to going Please the proceed question. from come We're (indiscernible) questions with stand by. next The (indiscernible) from ask of the your line Please Partners.

one Harry, diversified built, about, the and and $XXX buying quite quarters, do without in four ships you stock until you feel new I committing leased essentially stock uncomfortable million you you ships, water purchasing and know portfolio already buying you board that a that don't and - will can the how lot see on buying how back to a the when three back other. buying or are over is of two comfortable of new buying two see those ships know none facts? yet

good The quality else. major of customers fleet our somebody this size keep the vessels, dump building us and is and the fleet. quality the modernity we of and strength will buying the company Very point. oil If don't for of

strong has balance and I move. So, outflow, a that for in low buying a a leverage, ships cash with assets, company crazy $XXX minimal very sheet, don't two that million consider

is buying stock ships. your purchasing essentially Right, but

comfortable … ships If you're buying

customers. our for Not

For customers not our for our but shareholders, yes,

is we paying you do shareholders, buying stock customers, our dividends. I back what do but for amongst for what appreciate your

that's if that's LPG of buybacks few And done are also why world we you Yes. remember. the consecutive the tender companies and offer, in one a

purchasing purchase but is order of … buyback that, to A ships, understand different - than I analysis function ships, the no stock.

It's easy because customers, and have not pleases the different which pleases the is one need both the equation. pleased, to shareholders, try other an the completely to we

a of to is, it board in strong an the perspective do or analysis, look purchasing I if you risk ships, equivalent the and perspective said identical is thing. your to of at quarters stock you but a perspective, you quarter, you buyback. But from a the back want a financial going I'm buying purchasing three which functional it's what see before and two understand the from analysis customer from ships. first

you company, share the am good shareholder buyback? me be Don't we of benefit I largest think my it'll if did the friend. a

sure would. it I'm

so, to I'm And trying understand …

Exactly.

and which with we you their of XXX%, have we opinion, to So, what the said, agree agree with. that's respect but has I board

trying the analysis the purchasing through XX, to ships I'm in XX it that to board just to as opposed understand purchase which went ships. commits two XX,

explained it it. you did exactly explained why I just minutes we three ago, to

It's not through. coming

offline Okay. then. discuss it We can

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very much. you Thank

Thank you.

to question. We are the going to next proceed

Last one, please.

The next the questions from Please question. (indiscernible) come line your of (GAD ask from Foundation). the

Harry. question. Hi, other One Yes.

don't Petroleum. to conference very You you it? do conference seems difficult you Imperial for consider company. follow calls Would that Would It consider doing calls?

conference calls? Sure. I don't you understand the do mean question. What

do you we're don't that. What doing today,

have announcements. do both companies. to This we And we're by results - obviously law calls quarterly obliged is for

do Petroleum? Imperial do? You Oh, you for them

law, yes. obliged We are by so

of Oh, And because website or I haven't seen it or? is any email. there notice a

there’s course a website. Of

you. negligence. my Thank it's Then Okay.

now. call problem. But No StealthGas this is a

Right.

Of course.

we So, all to would … you like thank

There time. further at are this questions Thank you. no

us thank conference our and to QX our today, at like with again us Thank results in look we November. you forward to you very everybody, much. joining for having you, call for We'd

conference concludes That you today's call. participating. Thank for

may You disconnect now Thank your you. lines.