STEALTHGAS INC. Reports Third Quarter and Nine Months 2023 Financial and Operating Results

Source: www.gulfoilandgas.com 11/21/2023, Location: Europe

STEALTHGAS INC. (NASDAQ: GASS), a ship-owning company serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced today its unaudited financial and operating results for the third quarter and nine months ended September 30, 2023.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

- All-time record Net Income of $43.0 million for the nine-month period corresponding to a basic EPS of $1.12. Strong profitability continued for the third quarter with Net Income of $15.7 million for the three-month period corresponding to a basic EPS of $0.41, a 134% increase compared to last year.

- Significantly increased period coverage. About 50% of fleet days for 2024 are secured on period charters, with total fleet employment days for all subsequent periods generating approximately $195 million (excl. JV vessels) in contracted revenues.

- Expanded the share repurchase program by an additional $10 million for a total of $25 million. To date, 3.9 million shares have been repurchased, more than 10% of the outstanding shares.

- Massively reduced debt by $149.4 million from $277.1 million as of December 31, 2022, net of deferred finance charges, to $127.7 million as of September 30, 2023.

- Revenues at $34.7 million for Q3 23’ despite having reduced the number of vessels in the fleet from 34 vessels at the end of Q3 22’ to 27 vessels at the end of Q3 23’.

Third Quarter 2023 Results:

- Revenues for the three months ended September 30, 2023 amounted to $34.7 million compared to revenues of $34.9 million for the three months ended September 30, 2022, a decrease of $0.2 million, or 1%, while the fleet over the corresponding periods was reduced from 34 vessels at the end of Q3 2022 to 27 vessels at the end of Q3 2023 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 September 30, 2023 were $2.4 million and $12.3 million, respectively, compared to $6.8 million and $14.1 million, respectively, for the three months ended September 30, 2022. The $4.4 million, or 65%, decrease in voyage expenses was the result of lower spot voyage days, while the $1.8 million, or 13%, decrease in vessels’ operating expenses was mainly due to the decrease in the average number of owned vessels in our fleet.

- Drydocking costs for the three months ended September 30, 2023 and 2022 were $0.1 million and $1.8 million, respectively. Drydocking expenses during the third quarter of 2023 mainly relate to the preparation for drydocking of one vessel, compared to the drydocking of four vessels in the same period of last year.

- Management fees for the three months ended September 30, 2023 and 2022 were $1.1 million and $1.3 million, respectively. The change is attributed to the decrease in the average number of owned vessels in our fleet.

- General and administrative expenses for the three months ended September 30, 2023 and 2022 were $1.7 million and $0.8 million, respectively. The change is mainly attributed to the increase in stock based compensation expense.

- Depreciation for the three months ended September 30, 2023 and 2022 was $5.5 million and $6.9 million, respectively, as the number of our vessels declined.

- Gain on sale of vessels for the three months ended September 30, 2023 was $4.7 million which was due to the sale of two of the Company’s vessels.

- Interest and finance costs for the three months ended September 30, 2023 and 2022, were $2.5 million and $3.5 million, respectively. The $1.0 million, or 29%, decrease from the same period of last year is mostly due to the reduction in debt outstanding despite increases in variable interest rates as well as profits from closing of swap positions due to debt prepayments.

- Interest income for the three months ended September 30, 2023 and 2022 was $0.8 million and $0.3 million, respectively. The increase is mainly attributed to increases in interest rates over the corresponding period.

- Equity earnings in joint ventures for the three months ended September 30, 2023 and 2022 was a gain of $0.9 million and $6.1 million, respectively. The $5.2 million decrease was mainly due to the gain from a sale of a vessel that was recorded in one of the joint ventures during the three months ended September 30, 2022.

- As a result of the above, for the three months ended September 30, 2023, the Company reported net income of $15.7 million, compared to net income of $6.7 million for the three months ended September 30, 2022 an increase of $9.0 million, or 134%. The weighted average number of shares outstanding, basic, for the three months ended September 30, 2023 and 2022 was 37.3 million and 37.9 million, respectively.

- Earnings per share, basic, for the three months ended September 30, 2023 amounted to $0.41 compared to earnings per share of $0.18 for the same period of last year.

- Adjusted net income1 was $12.0 million corresponding to an Adjusted EPS1 of $0.31 for the three months ended September 30, 2023 compared to Adjusted net income of $6.1 million corresponding to an Adjusted EPS of $0.16 for the same period of last year, an increase in Adjusted net income of $5.9 million, or 97%.

- EBITDA1 for the three months ended September 30, 2023 amounted to $22.9 million.

- Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA1 to Net Income are set forth below.

- An average of 27.6 vessels were owned by the Company during the three months ended September 30, 2023 compared to 34.0 vessels for the same period of 2022.

Nine Months 2023 Results:

- Revenues for the nine months ended September 30, 2023 amounted to $109.4 million, a decrease of $0.6 million, or 0.5%, compared to revenues of $110.0 million for the nine months ended September 30, 2022, primarily due to reduction in the fleet size.

- Voyage expenses and vessels’ operating expenses for the nine months ended September 30, 2023 were $9.9 million and $40.2 million, respectively, compared to $15.6 million and $40.3 million for the nine months ended September 30, 2022. The $5.7 million, or 37%, decrease in voyage expenses was mainly due to the decrease in spot days. The $0.1 million decrease in vessels’ operating expenses despite the reduction in fleet size was primarily the result of cost overruns in certain cost categories like spares and crew and was more pronounced during the Q1 23’ and less so during Q3 23’.

- Drydocking costs for the nine months ended September 30, 2023 and 2022 were $2.6 million and $2.3 million, respectively. The costs for the nine months ended September 30, 2023 mainly related to the completed drydocking of three of the larger handysize vessels, while the costs for the same period of last year related to the drydocking of five vessels.

- General and administrative expenses for the nine months ended September 30, 2023 and 2022 were $3.7 million and $2.6 million, respectively. The change is mainly attributed to the increase in stock based compensation expense.

- Depreciation for the nine months ended September 30, 2023 was $18.1 million, a $2.9 million decrease from $21.0 million for the same period of last year, due to the decrease in the average number of our vessels.

- Impairment loss for the nine months ended September 30, 2023 was $2.8 million relating to two vessels, for which the Company has entered into separate agreements to sell them to third parties.

- Impairment loss for the nine months ended September 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.

- Gain on sale of vessels for the nine months ended September 30, 2023 was $7.6 million, which was primarily due to the sale of seven of the Company’s vessels.

- Interest and finance costs for the nine months ended September 30, 2023 and 2022 were $7.6 million and $8.7 million respectively. Despite increases in interest rates during that period, interest costs fell mainly due to the decrease of our outstanding indebtedness.

- Interest income for the nine months ended September 30, 2023 and 2022 was $2.8 million and $0.4 million, respectively. The six fold increase is mainly attributed to increases in interest rates and in our average cash and cash equivalents including deposits over the corresponding period.

- Equity earnings in joint ventures for the nine months ended September 30, 2023 and 2022 was a gain of $11.4 million and a gain of $9.7 million, respectively. The $1.7 million increase from the same period of last year is mainly due to a gain on sale 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 nine months ended September 30, 2023 of $43.0 million, compared to a net income of $26.6 million for the nine months ended September 30, 2022 an increase of $16.4 million, or 62%. The weighted average number of shares outstanding, basic, as of September 30, 2023 and 2022 was 37.8 million and 37.9 million, respectively.

- Earnings per share, basic, for the nine months ended September 30, 2023 amounted to $1.12 compared to earnings per share, basic, of $0.70 for the same period of last year.

- Adjusted net income was $40.0 million, or $1.04 per share, for the nine months ended September 30, 2023 compared to adjusted net income of $26.1 million, or $0.69 per share, for the same period of last year, an increase of $13.9 million, or 53%.

- EBITDA for the nine months ended September 30, 2023 amounted to $66.0 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.

- An average of 30.1 vessels were owned by the Company during the nine months ended September 30, 2023, compared to 35.0 vessels for the same period of 2022.

- As of September 30, 2023, cash and cash equivalents (including restricted cash) amounted to $79.8 million and total debt amounted to $127.7 million.

Fleet Update Since Previous Announcement

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

· A three-year time charter extension for its 2018 built LPG carrier Eco Freeze, until May 2027.

· A three-year time charter extension for its 2018 built LPG carrier Eco Ice, until Sep 2027.

· A three-year time charter extension for its 2011 built LPG carrier Gas Myth, until Jan 2027.

· A twelve months time charter extension for its 2007 built LPG carrier Gas Flawless, until Dec 2024.

· A twelve months time charter extension for its 2014 built LPG carrier Eco Invictus, until Oct 2024.

· A twelve months time charter extension for its 2021 built LPG carrier Eco Blizzard, until Oct 2024.

· A six months time charter extension for its 2016 built LPG carrier Eco Nical, until Apr 2024.

· A six months time charter extension for its 2016 built LPG carrier Eco Alice, until Mar 2024.

· A six months time charter for its 2018 built LPG carrier Eco Arctic, until Mar 2024.

· A twelve months time charter for its LPG carrier Eco Oracle, to be delivered in Jan 2024.

· A twelve months time charter for its LPG carrier Eco Wizard, to be delivered in Jan 2024.

As of November 2023, the Company has total contracted revenues of approximately $195 million.

For the remainder of the year 2023, the Company has about 85% of fleet days secured under period contracts, and 50% for the year 2024.

On October 6, 2023, the 40,000 cbm vessel newbuilding Eco Sorcerer was delivered in Korea to our joint venture. The vessel has been deployed on a twelve-month time charter.

Board Chairman Michael Jolliffe Commented

2023 has turned out to be a tremendous year for gas shipping overall and especially for StealthGas. So far for the first nine months of 2023 we have reported our strongest performance on record, with a basic EPS of $1.12. For the third quarter, in what normally would be a seasonally weak quarter, we reported net income of $15.7 million, the second-best quarter on record, only surpassed by the first quarter of this year. As the market is firming we took advantage of the momentum and entered into a number of long period charters some with durations as long as three years thus securing part of our future revenues. We have thus extended the duration of our contract coverage to over 50% for 2024.

Also part of our strategy is deleveraging, and so far during this year we have more than halved our outstanding debt, repaying $151 million and greatly reducing our interest rate expenses in the process while at the same time keeping 15 out of the 27 vessels debt-free. At the same time we sought to expand the repurchase of shares with an additional $10 million as we used the initial $15 million, and during a short period of time we have so far repurchased over 10% of the outstanding shares with the aim to return value to our shareholders. The market remains firm as we are entering the seasonally stronger winter months and is buoyant for the larger sized vessels, in what we hope will prove a well-timed diversification of the fleet with the addition of larger sized vessels. We believe we are well positioned to benefit from strong markets and to continue to generate shareholder value.


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