StealthGas INC. Reports Lower Nine-Month Revenues On Sales of Older LPGs

StealthGas INC. (GASS), a ship-owning company primarily serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced its unaudited financial and operating results for the third quarter and nine months ended September 30, 2019.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

· Operational utilization of 98.0% in Q3 ’19 (96.1% in Q3 ’18) due to more efficient presence in the spot market resulting in reduced idle time.

· Fleet calendar days down 19% quarter on quarter to 4,045 days attributed to our recent strategic fleet contraction.

· About 88% of fleet days secured on period charters for the remainder of 2019, with total fleet employment days for all subsequent periods generating approximately $138 million in contracted revenues.

· Sale of our 5,000 cbm LPG vessel, the Gas Ethereal (2006 built) on September 27, 2019, for further trading. With this sale the average age of the StealthGas fleet has been reduced to 8.7 years.

· Voyage revenues of $36.6 million in Q3 ’19, a decrease of $6.1 million compared to Q3 ’18 following our strategic decision to divest mostly older LPG units that led to the net reduction of our average owned fleet by nine vessels.

· Daily Adjusted Average Charter Rate in Q3 19’ increased by about 6.0% ($425) compared to the same period of last year, mostly due to improved revenues stemming from our time charter contracts as a result of higher market rates.

· About 21% quarter on quarter decrease in operating expenses; a sharper percentage decline than voyage revenue contraction for the same period, attributed to our fleet contraction.

· Adjusted EBITDA of $14.7 million in Q3 ’19, compared to $16.4 million in Q3 ’18, a lower than expected figure, mostly due to lower than anticipated revenue stemming from the Asian spot market.

· Low gearing, as debt to assets stands at about 39% mostly due to our intense repayment schedule while our net debt to assets ratio is as low as 32%.

· Cash on hand of $66.1 million, an increase of about $1.6 million compared to year end 2018.

· Purchase of 0.4 million of GASS shares up to date, for an aggregate consideration of $1.4 million, following the initiation of a further stock repurchase program.

Nine months 2019 Results:

· Revenues for the nine months ended September 30, 2019, amounted to $109.1 million, a decrease of $16.7 million, or 13.3%, compared to revenues of $125.8 million for the nine months ended September 30, 2018, primarily due to the strategic decision to sell mostly older small LPG vessels for further trading.

· Voyage expenses and vessels’ operating expenses for the nine months ended September 30, 2019 were $12.9 million and $37.0 million, respectively, compared to $15.7 million and $45.8 million for the nine months ended September 30, 2018. The $2.8 million decrease in voyage expenses was mainly due to the 25% (or 687 days) reduction of spot days. The $8.8 million decrease in vessels’ operating expenses, is due to the net reduction of the average number of our owned fleet by 8.7 vessels.

· Drydocking costs for the nine months ended September 30, 2019 and 2018 were $0.7 million and $3.0 million, respectively. The costs for the nine months ended September 30, 2019 mainly related to the docking survey of one small LPG vessel and one drydocking of a second LPG vessel, while the costs for the same period of last year related to the drydocking of 6 vessels.

· Depreciation for the nine months ended September 30, 2019, was $28.4 million, a $2.7 million decrease from $31.1 million for the same period of last year, due to the net reduction of the average number of our owned fleet.

· Impairment loss for the nine months months ended September 30, 2019 and 2018 were nil and $8.2 million, respectively.

· Interest and finance costs for the nine months ended September 30, 2019 and 2018 were $16.5 million and $17.3 million respectively. The $0.8 million decrease from the same period of last year, is mostly attributed to the decrease of our leverage.

· As a result of the above, the Company reported a net income for the nine months ended September 30, 2019 of $1.6 million, compared to a net loss of $7.0 million for the nine months ended September 30, 2018. The weighted average number of shares for the nine months ended September 30, 2019 and September 30, 2018 was 39.8 million and 39.9 million, respectively. Earnings per share for the nine months ended September 30, 2019 amounted to $0.04 compared to loss per share of $0.17 for the same period of last year.

· Adjusted net income was $2.8 million, or $0.07 per share, for the nine months ended September 30, 2019 compared to adjusted net income of $1.9 million, or $0.05 per share, for the same period of last year.

· EBITDA for the nine months ended September 30, 2019 amounted to $45.8 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.

· An average of 43.1 vessels were owned by the Company during the nine months ended September 30, 2019, compared to 51.8 vessels for the same period of 2018.

· As of September 30, 2019, cash and cash equivalents amounted to $66.1 million and total debt amounted to $375.9 million. During the nine months ended September 30, 2019 debt repayments amounted to $87.3 million.

Fleet Update Since Previous Announcement
The Company announced the conclusion of the following thirteen chartering arrangements:

· A two year time charter extension for its 2017 built LPG carrier, the Eco Frost, to an International Trading House until February 2022.

· A two year time charter extension for its 2018 built LPG carrier, the Eco Ice, to an International Trading House until February 2022.

· A one year time charter extension for its 2014 built LPG carrier, the Eco Invictus, to an Oil Major until November 2020.

· A one year time charter for its 2001 built LPG carrier, the Gas Spirit, to an International LPG Trader until November 2020.

· A one year time charter extension for its 2015 built LPG carrier, the Eco Galaxy, to an International LPG Trader until December 2020.

· A nine months time charter extension for its 2015 built LPG carrier, the Eco Enigma, to an International Trading House until July 2020.

· A six months time charter for its 2015 built LPG carrier, the Eco Nemesis, to an Oil Major until March 2020.

· A six months time charter extension for its 2016 built LPG carrier, the Eco Dominator, to an International Trading House until May 2020.

· A six months time charter extension for its 2016 built LPG carrier, the Eco Nical, to an Oil Major until June 2020.

· A six months time charter for its 2011 built LPG carrier, the Gas Cerberus, to an Oil Major until June 2020.

· A six months time charter for its 2011 built LPG carrier, the Gas Elixir, to an International Trading House until June 2020.

· A four months time charter for its 2003 built LPG carrier, the Gas Prodigy, to an International LPG Trader until December 2019.

· A three months bareboat charter extension for its 2012 built LPG carrier, the Gas Esco, to a State Owned Shipping Company until March 2020.

With these charters, the Company has total contracted revenues of approximately $138 million. Total anticipated voyage days of our fleet is 88% covered for the remainder of 2019 and 53% for 2020.

Board Chairman Michael Jolliffe Commented

Our performance in the third quarter of the year improved to an optimal level in terms of fleet efficiency, as reflected in our operational utilization of 98%. Although we managed to contain our operating costs at moderate levels, the persistently weak earnings stemming from the Asian spot market did not allow us to enjoy a profitable quarter.

We feel, however, that should market conditions improve as they seem to have based on the thirteen period charters and charter extensions we managed to conclude during the past couple of months, our profitability will be enhanced. Indeed, rates for all of our newly concluded charters in each of our operating segments are at higher levels. We have 53% of our fleet days secured for 2020 with $138 million of secured revenues for all subsequent periods; therefore, there is plenty of upside potential.

The intensification of period charter activity during the past couple of months may be a positive sign that the market situation is in fact turning, including in Asia, and we are eager and well positioned to take advantage of this opportunity.

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Source: StealthGas Inc.