Harry Vafias
STEALTH GAS INC. REPORTS TWELVE MONTHS ENDED DECEMBER 31, 2014 FINANCIAL AND OPERATING RESULTS
ATHENS, GREECE, February 26, 2015.STEALTH GAS INC. (NASDAQ: GASS), a ship-owning company primarily serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced today its unaudited financial and operating results for the fourth quarter and twelve months ended December 31, 2014.
Twelve months 2014 Results:
- Revenues for the twelve months ended December 31, 2014, amounted to $132.0 million, an increase of $10.5 million, or 8.6%, compared to revenues of $121.5 million for the twelve months ended December 31, 2013, primarily due to the higher number of vessels in our fleet in the 2014 period.
- Voyage expenses and vessels’ operating expenses for the twelve months ended December 31, 2014 were $14.1 million and $45.4 million, respectively, compared to $14.3 million and $36.5 million, respectively, for the twelve months ended December 31, 2013. The $8.7 million net increase in voyage and vessels’ operating expenses was primarily due to the higher number of vessels that operated in the 2014 period and due to larger portion of the fleet now operating in the Latin America/Caribbean area, where operating costs are higher.
- Drydocking Costs for the twelve months ended December 31, 2014 were $0.5 million as one of our vessels was drydocked during the period, compared to seven vessels that were drydocked during the same period of last year at a cost of $3.2 million.
- Depreciation for the twelve months ended December 31, 2014, was $33.8 million, a $3.0 million increase from $30.8 million for the same period of last year. This increase was due to the higher number of vessels in our fleet in the 2014 period.
- Interest and finance costs for the twelve months ended December 31, 2014 were $9.3 million compared to $8.2 million for the same period last year, an increase of 13.4%. The increase in interest and finance costs was mainly due to an increase in commitment costs relating to the financing arranged for the vessels that are currently under construction.
- Included in the twelve months of 2014 results are net losses from interest rate derivative instruments and foreign currency hedging arrangements of $1.3 million. Interest paid on interest rate swap arrangements amounted to $1.9 million, or $0.05 per share and gains from change in fair value of the interest rate derivative instruments and foreign currency hedging arrangements amounted to $0.6 million. The Company also realized an impairment loss of $6.2 million on vessels planned to be scrapped within 2015.
- As a result of the above, the Company had net income for the twelve months ended December 31, 2014 of$12.7 million, compared to net income of $21.2 million for the twelve months ended December 31, 2013. The weighted average number of shares for the twelve months ended December 31, 2014 increased to 39.3 million compared to 28.3 million for the same period of last year, due to the offerings of a total of 11.4 million shares in February, May and August of 2014. Earnings per share forthe twelve months ended December 31, 2014 amounted to $0.32 compared to $0.75for the same period of last year.
- Adjusted net income was $19.0 million or $0.48 per share for the twelve months ended December 31, 2014 compared to $18.7 million or $0.66 per share for the same period last year.
- EBITDA for the twelve months ended December 31, 2014 amounted to $57.2 million.Reconciliations of Adjusted Net Income and EBITDA to Net Income and Adjusted EBITDA to Adjusted Net Income are set forth below.
An average of 44.1 vessels were owned by the Company during the twelve months ended December 31, 2014, compared to 39.4 vessels for the same period of 2013. Overall for 2014 the time and bareboat charter coverage for the fleet was 85% and has already been contracted at 65% for 2015 and 30% for 2016.
Share Repurchase Program
Regarding the $10, 000, 000 share repurchase program announced in November 2014, the Company has up to date made purchases of 1.500.000 common shares for a total of $9 million. The Board of Directors has today approved the extension of the program for share buy backs up to an additional $20, 000, 000. Shares may be purchased in open market or privately negotiated transactions, which may include derivative transactions, at times and prices that are considered to be appropriate by the Company and the program may be discontinued at any time.
Fleet Update
During January 2015 the Company took delivery of the 3, 500 cbm, LPG carrier, Eco Lucidity which went directly on a time charter as previously announced for a period of three months.
The Company also announced the conclusion of the following chartering arrangements:
§A five-year bareboat charter for its 115, 000 dwt, 2010 built, crude oil carrier, Spike, to a tanker operator until August 2020.
§A five-month time charter for its 5, 000 cbm, 2003 built, LPG carrier, Gas Prodigy, to a national energy company until September 2015.
§The time charters for its 5, 000 cbm newbuilding LPG carriers Eco Dream and Eco Green, which are scheduled to be delivered in 3rd quarter of 2015, have been extended from two to five years.
CEO Harry Vafias commented:
“Our revenues for the fourth quarter and the year were affected by the continued decline in charter rates that was driven primarily by falling oil prices. Although the charter market was sluggish we managed to improve our operating profitability significantly compared to the previous quarter and slightly over last year. Overall for 2014 our operating profitability was strong as our Adjusted EBITDA came in at $ 63.5 million increased in comparison with 2013 by $3.4 mm , however our net income was significantly lower, reflecting a $6.2 million impairment loss, as a result of our decision to seek to dispose of some of our oldest vessels in 2015.
Our Company follows a conservative chartering policy, with 85% of our fleet on period charters in 2014 and reduced exposure in the spot market. In these challenging charter markets we will continue to secure cash flow through period charters and to focus on controlling our costs.As of 2014 year end, we had approximately $220 million in contracted revenues, of which 72% are payable within the period 2015-2017.Our combined management fees and G&A expense was less than 7% of our 2014 revenues.We believe this compares very favourably with other public companies in the LPG and LNG shipping sectors, including those that rely on independent technical managers and those that manage their vessels in-house.
We are also focused on renewing and diversifying our fleet with modern eco vessels.We have 15 newbuildings, including four 22, 000 cbm LPG carriers, under contract with scheduled deliveries of these vessels from this year until 2017. Our orderbook is of quality ships being mainly built in Japan and a few in Korea.Most importantly, in this charter market cycle, we are in a strong liquidity position which, together with our charter coverage, should enable us to meet our capital expenditure obligations, our existing debt service requirements and our working capital needs as our fleet expands. We have about $130 million in cash and cash equivalents at year end.Our strong balance sheet, with a ratio of debt to total assets of 34.4%, puts us in a position to address any investment need that might arise. In addition we are boosting our share repurchase program with another 20 million on top of the 10 million that was announced in November 2014.
Our current outlook for 2015 is for LPG charter rates to likely remain at similar levels.We believe, however, that our leading position among operators of small LPG carriers will over time enable us to capitalize on opportunities presented as the anticipated longer term growth in LPG trade is realized.
Last, but not least, we point out that our common shares are currently trading at about 50% discount to our NAV.”
About STEALTHGAS INC.
Stealth Gas Inc. is a ship-owning company primarily serving the liquefied petroleum gas(LPG) sector of the international shipping industry. Stealth Gas Inc. currently has a fleet of 42 LPG carriers with a total capacity of 197, 960 cubic meters (cbm), three M.R. product tankers and one Aframax oil tanker with a total capacity of 255, 804 deadweight tons (dwt).The Company operates two more LPG carriers, the Gas Premiership and the Gas Cathar, under long term charters-in and has agreed to further acquire 15 newbuilding LPG carriers with expected deliveries ranging from 2015 to 2017. Giving effect to the delivery of these acquisitions and including the Gas Premiership and Gas Cathar, Stealth GasInc.’s LPG fleet will be composed of 59 LPG carriers with a total capacity of approximately 360, 000 cubic meters (cbm). Stealth Gas Inc.’s shares are listed on the NASDAQ Global Select Market and trade under the symbol“GASS”.
