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STEALTHGAS INC. Results Up On Increased Vessel Utilization and Higher Freight Rates

STEALTHGAS INC., 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 fourth quarter and twelve months ended December 31, 2017.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

Operational utilization of 97.2% in Q4 ‘17 (94.2% in Q4 ‘16).
Commercial off hire days reduced by about 58% on a year on year basis.
65% of fleet days secured on period charters for the remainder of 2018, with a total of approximately $196 million in contracted revenues.
Successful delivery of two more 22K semi ref newbuild vessels, the Eco Ice and the Eco Arctic in January 2018 increasing our asset base to around $ 1.1 billion.
Reduction of fleet average age, following our new deliveries and the sale of older vessels from 9.6 years at the beginning of 2017 to 9.2 years to date.
Revenues of $38.4 million in Q4 ‘17, an increase of 2.4% compared to Q4 ‘16
Net income of approximately $750 thousand in Q4 ‘17 compared to $4.4 million loss in Q4 ‘16.
EBITDA of $14.9 million in Q4 ‘17 compared to $ 9.3 million in Q4 ‘16.
Low gearing as debt to assets stands at about 39%.
Cash on hand of about $51.8 million, with operating cash flow of $52.4 million.

Fourth Quarter 2017 Results:

Revenues for the three months ended December 31, 2017 amounted to $38.4 million, an increase of $0.9 million, or 2.4%, compared to revenues of $37.5 million for the three months ended December 31, 2016, mainly due to increased fleet operational utilization and an increase in market rates, which were partially offset by a reduced number of vessels in the fleet and lower tanker rates.
Voyage expenses and vessels’ operating expenses for the three months ended December 31, 2017 were $3.9 million and $15.0 million respectively, compared to $3.7 million and $14.5 million respectively, for the three months ended December 31, 2016. The $0.2 million increase in voyage expenses was mainly attributed to a quarter on quarter increase of average bunker prices by 19%. The 3.4% increase in vessels’ operating expenses compared to the same period of 2016 was mostly due to the operation of larger vessels in the time charter and spot market (one product tanker and one 22,000 cbm LPG vessel), and increased maintenance costs for some vessels of our fleet. Inversely these were partly offset by the lower average number of vessels compared to the same quarter of 2016.
Drydocking costs for the three months ended December 31, 2017 and 2016 were $1.0 million and $0.4 million, respectively. The costs for the fourth quarter of 2017 corresponded to the drydocking of two vessels, while in the same period of 2016 the Company completed the drydocking of one vessel.
Depreciation for the three months ended December 31, 2017 was $9.7 million, a $0.2 million decrease from $9.9 million for the same period of last year. This decrease was due to the net reduction of three vessels from our fleet.
Included in the fourth quarter 2017 results were net losses from interest rate derivative instruments of $0.1 million compared to net losses of $0.2 million in the same period of last year. Interest paid on interest rate derivative instruments amounted to $0.1 million compared to $0.2 million in the same period of last year.
As a result of the above, for the three months ended December 31, 2017, the Company reported a net income of $0.7 million, compared to a net loss of $4.4 million for the three months ended December 31, 2016. The weighted average number of shares for the three months ended December 31, 2017 and 2016 was 39.8 million. Earnings per share, basic and diluted, for the three months ended December 31, 2017 amounted to $0.02 compared to loss per share of $0.11 for the same period of last year.
Adjusted net income was $0.8 million or $0.02 per share for the three months ended December 31, 2017 compared to adjusted net income of $1.6 million or $0.04 per share for the same period of last year.
EBITDA for the three months ended December 31, 2017 amounted to $14.9 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
An average of 50.9 vessels were owned by the Company during the three months ended December 31, 2017, compared to 53.7 vessels for the same period of 2016.

Twelve Months 2017 Results:

Revenues for the twelve months ended December 31, 2017, amounted to $154.3 million, an increase of $10.2 million, or 7.1%, compared to revenues of $144.1 million for the twelve months ended December 31, 2016, primarily due to improved market conditions and improved operational utilization.
Voyage expenses and vessels’ operating expenses for the twelve months ended December 31, 2017 were $15.7 million and $59.4 million respectively, compared to $15.4 million and $58.8 million for the twelve months ended December 31, 2016. The $0.3 million increase in voyage expenses was mainly due to the higher bunker prices prevailing in 2017 compared to the same period of 2016. The $0.6 million increase in vessels’ operating expenses was mainly due to increased maintenance costs for some vessels in the fleet.
Drydocking Costs for the twelve months ended December 31, 2017 and 2016 were $3.5 million and $3.6 million, respectively, representing the costs of 7 and 10 vessels drydocked in the corresponding periods. In 2017 the Company faced increased drydocking costs due to the trading areas of some of the vessels due for drydock.
Depreciation for the twelve months ended December 31, 2017, was $38.9 million, a $0.2 million decrease from $39.1 million for the same period of last year.
Included in the 2017 results, were net losses from interest rate derivative instruments of $0.4 million compared to net losses of $0.8 million in the same period of last year. Interest paid on interest rate swap arrangements amounted to $0.4 million compared to $ 1.1 million in the same period of last year. In 2017, the gains in change in fair value of the interest rate derivative instruments was nil compared to gains of $0.3 million in the same period of last year.
The Company recorded an impairment loss of $6.5 million in 2017 for seven of its oldest vessels, four of which were sold in 2017.
As a result of the above, the Company reported a net loss of $1.2 million for the twelve months ended December 31, 2017, compared to a net loss of $7.8 million for the twelve months ended December 31, 2016. The weighted average number of shares outstanding for the twelve months ended December 31, 2017 and 2016 was 39.8 million. Loss per share for the twelve months ended December 31, 2017 amounted to $0.03, compared to loss per share of $0.20 for the same period of last year.
Adjusted net income was $5.4 million, or $0.14 per share, for the twelve months ended December 31, 2017 compared to adjusted net loss of $2.2 million, or $0.05 per share, for the same period of last year.
EBITDA for the twelve months ended December 31, 2017 amounted to $54.5 million. Reconciliations of Adjusted Net (Loss)/Income, EBITDA and Adjusted EBITDA to Net Loss are set forth below. An average of 52.6 vessels were owned by the Company during the twelve months ended December 31, 2017, compared to 53.4 vessels for the same period of 2016.
As of December 31, 2017, cash and cash equivalents amounted to $51.8 million and total debt amounted to $384.9 million. During the twelve months ended December 31, 2017 debt repayments amounted to $56.3 million.

Fleet Update Since Previous Announcement

The Company announced the following chartering arrangements:

A two year time charter for its 2018 built LPG carrier, the Eco Arctic, with a major trading house until February 2020.
A two year time charter for its 2018 built LPG carrier, the Eco Ice, with a major trading house until February 2020.
A three months’ time charter for its 2017 built LPG carrier, the Eco Frost, to an oil major until May 2018.
A two months’ time charter for its 2008 built LPG carrier, the Gas Imperiale, to an international trading house until April 2018.
A three months’ consecutive voyage charter for its 1995 built LPG carrier, the Gas Marathon, to an international petrochemical company until June 2018.
A six months’ consecutive voyage charter extension for its 2001 built chartered-in LPG carrier, the Gas Cathar, to an international petrochemical company until December 2018.
A three months’ consecutive voyage charter extension for its 2001 built chartered-in LPG carrier, the Gas Premiership, to an international petrochemical company until October 2018.
A six months’ consecutive voyage charter extension for its 2015 built LPG carrier, the Eco Galaxy, to an international petrochemical company until December 2018.
With these charters, the Company has contracted revenues of approximately $196 million. Total anticipated voyage days of our fleet are 65% covered for the remainder of 2018.

Board Chairman Michael Jolliffe Commented

The fourth quarter of 2017 was mixed. On the one hand we are pleased that our core market of small LPGs shows clear signs of improvement, which should continue to leverage our earnings. In this market we achieved an outstanding fleet operational utilization of 97.2%. On the other hand the sale of four of our older vessels and the weakening of the tanker market affected our revenue growth, somewhat obscuring the improved revenues for our core fleet. Nevertheless, excluding impairment charges, our annual results demonstrated clear improvements both in revenues and profitability. In addition with the delivery of our two 22K semi ref newbuildings in January 2018, our asset base increased to $ 1.1 billion.

We have numerous charters which commenced at the beginning of 2018, and several vessels yet to fix, all of these in a better market environment, reflecting the benefits of our chartering policy.

In terms of strategy, we intend, in the upcoming year, to take advantage of the positive market momentum of the small LPG market. We will focus our efforts on capitalizing our dynamic fleet of the past couple of years by placing strong emphasis on taking advantage of the unique and improving supply and demand fundamentals of our core segment. With assets currently $1.1 billion, low gearing and capex of around $31.2 million of which equity is only $1 million – we are looking forward to an exciting 2018.

Full Report

Source: StealthGas

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