Harry Vafias
ATHENS, GREECE, August 25, 2016. STEALTHGAS 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 second quarter ended June 30, 2016.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
• Successful delivery of one new eco LPG carrier in the second quarter of 2016.
• Period on period increase of vessel calendar days by 15%.
• Operational utilization of 91.2% in Q2 2016.
• About 70% of fleet voyage days on period charters for the remainder of 2016, with close to $180 million in contracted revenues.
• Average fleet age of 9.1 years, with 76% of our fleet below 15 years of age.
• Revenues in Q2 2016 of $35.7 million ($32.4 million in Q2 2015).
• EBITDA in Q2 2016 of $11.7 million ($9.9 million in Q2 2015).
• Cash on hand of $71.6 million with operating cashflow of $ 17.0 million for Q2 2016.
• Stock repurchase of a shade below 4.0 million shares for a total of $20.3 million, from the beginning of the program in December 2014 to date.
• Fully funded orderbook, following the finalization of the financing terms for our last four newbuild deliveries due in 2017.
Six Months 2016 Results:
§ Revenues for the six months ended June 30, 2016, amounted to $72.2 million, an increase of $4.1 million, or 6.0%, compared to revenues of $68.1 million for the six months ended June 30, 2015, primarily due to the higher number of vessels in our fleet in the 2016 period.
§ Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2016 were $7.6 million and $29.8 million, respectively, compared to $8.1 million and $23.1 million for the six months ended June 30, 2015. The $0.5 million decrease in voyage expenses was mainly due to the lower bunker prices prevailing in the first six months of 2016 compared to the same period of 2015. The increase in operating expenses, was mainly driven by our fleet expansion and the two vessels coming off bareboat compared to the same period of 2015.
§ Drydocking Costs for the six months ended June 30, 2016 and 2015 were $2.2 million and $0.4 million, respectively. In the first six months of 2016 we had seven vessels drydocked compared to one vessel in the same period of 2015.
§ Depreciation for the six months ended June 30, 2016, was $19.3 million, a $2.3 million increase from $17.0 million for the same period of last year. This increase was due to the higher number of vessels in our fleet in the 2016 period.
§ Included in the first six months of 2016 results are net losses from interest rate derivative instruments of $0.4 million. Interest paid on interest rate swap arrangements amounted to $0.7 million and gains from change in fair value of the same interest rate derivative instruments amounted to $0.3 million.
§ The Company realized a $0.3 million gain on sale of vessel in the first six months of 2016.
§ As a result of the above, for the six months ended June 30 2016, the Company reported a net loss of $0.9 million, compared to net income of $4.6 million for the six months ended June 30, 2015. The average number of shares outstanding as at June 30, 2016 decreased to 39.9 million compared to 41.8 million for the same period of last year, mainly due to the repurchase of 3.0 million shares from the beginning of 2015 to June 30, 2016. Loss per share for the six months ended June 30, 2016 amounted to $0.02 compared to earnings per share of $0.11 for the same period of last year.
§ Adjusted net loss was $1.3 million or $0.03 per share for the six months ended June 30, 2016 compared toadjusted net income of $8.2 million or $0.20 per share for the same period last year.
§ EBITDA for the six months ended June 30, 2016 amounted to $25.7 million. Reconciliations of Adjusted Net Income/(Loss), EBITDA and Adjusted EBITDA to Net Income/(Loss) are set forth below.
§ An average of 52.9 vessels were owned by the Company during the six months ended June 30, 2016, compared to 46.0 vessels for the same period of 2015.
§ As of June 30, 2016, cash and cash equivalents amounted to $71.6 million and total debt amounted to $422.1 million. During the six months ended June 30, 2016 debt repayments amounted to $31.2 million.
Share Repurchase Program
Since December 1, 2014 to date, the Company has repurchased a total of 3,872,232 shares at an average price of $5.24 per share for a total consideration of $20.3 million, under its $30.0 million buyback program.
Fleet Update Since Previous Announcement
The Company announced the conclusion of the following chartering arrangements:
· A three year time charter for its 5,000 cbm, 2015 built, LPG carrier, Eco Universe, to an Oil Major until August 2019.
· A one year time charter extension for its 5,000 cbm, 2015 built, LPG carrier, Eco Czar, to an international trading house until July 2017.
· A one year bareboat charter for its 46,000 dwt, 2009 built, MR Product Tanker, Stealth Bahla, to a Major Middle Eastern Shipowning company until July 2017
· A six month time charter extension for its 5,000 cbm, 2006 built, LPG carrier, Gas Inspiration, to an international LPG trader until March 2017.
· A six month time charter for its 5,000 cbm, 2006 built, LPG carrier, Gas Ethereal, to an international trading house until February 2017.
· A one month time charter extension for its 5,000 cbm, 2014 built, LPG carrier, Eco Invictus, to an international trading house until October 2016.
· A six month time charter for its 4,000 cbm, 2001 built, LPG carrier, Gas Spirit to an Oil Major until March 2017.
· A six month time charter for its 4,000 cbm, 2014 built, LPG carrier, Eco Corsair to an international trading house until December 2016.
With these charters the Company has contracted revenues of about $180 million. Total anticipated voyage days of our fleet are 69% covered for the remainder of 2016 and 37% covered for 2017.
Board Chairman Michael Jolliffe Commented
During the second quarter of 2016 freight rates in our segment remained very weak, continuing to bounce along the bottom. As evident from the previous quarter, our market is presently at a breakeven level, with suppressed profitability. We continue to operate in an extremely difficult market environment with, however, a small orderbook that should assist the segment to balance itself. Unfortunately, there is limited scrapping activity that therefore does not reduce the number of vessels in the water.
As to our Company’s performance this quarter, it was affected by extraordinary events resulting in extended off hire and thus revenue loss. Nevertheless we managed to increase our fleet utilization for 2016 by almost 10% and keep our secured revenues in the order of $ 180 million in spite of bad market conditions. We feel confident as to our fleet, and most importantly our realized capital expansion as 100% of our newbuilding deliveries in 2015 and 2016 are currently on period charters providing steady cash flows. In addition we follow a sensible capital management, maintaining our gearing at moderate levels. As per our cash management this quarter, we strategically decided to cut back on our stock repurchase in order to preserve our cash in this turbulent environment. We look forward to monitor the broader market and our Company’s performance in the next couple of quarters as we have no new deliveries up until the first quarter of 2017.
About STEALTHGAS INC.
StealthGas Inc. is a ship-owning company primarily serving the liquefied petroleum gas (LPG) sector of the international shipping industry. StealthGas Inc. currently has a fleet of 50 LPG carriers, excluding the two chartered in vessels, with a total capacity of 247,017 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 has agreed to acquire a further 4 LPG carriers with expected deliveries in 2017. Giving effect to the delivery of these acquisitions, StealthGas Inc.’s fleet will be composed of 54 owned LPG carriers with a total capacity of 334,387 cubic meters (cbm). StealthGas Inc.’s shares are listed on the NASDAQ Global Select Market and trade under the symbol “GASS”.
