STEALTHGAS 2Q And 1H 2014 Results

By Joseph R. Fonseca
Thursday, August 28, 2014
STEALTHGAS VESSEL

 

STEALTHGAS INC. a ship-owning company primarily serving the liquefied petroleum gas (LPG) sector of the international shipping industry, released today its unaudited financial and operating results for the second quarter and six months ended June 30, 2014.

Second Quarter 2014 Results:
§ Revenues for the three months ended June 30, 2014 amounted to $31.9 million, an increase of $1.6 million, or 5.28%, compared to revenues of $30.3 million for the three months ended June 30, 2013, primarily due to the higher number of vessels in the 2014 period.

§ Voyage expenses and vessels’ operating expenses for the three months ended June 30, 2014 were $3.5 million and $10.7 million, respectively, compared to $4.6 million and $8.7 million for the three months ended June 30, 2013. The $1.1 million decrease in voyage expenses was primarily due to the lower number of vessels under spot charters in the 2014 period. The $2.0 million increase in operating expenses was primarily the result of the increase in the number of vessels that operated in the 2014 period, including the five vessels that were added to the fleet in 2013.

§ Drydocking Costs for the three months ended June 30, 2014 were $0.1 million mainly relating to the vessel that was
drydocked during the previous quarter as no more vessels were drydocked during the period, compared to three vessels that were drydocked during the same period last year at a cost of $0.9 million.

§ Depreciation for the three months ended June 30, 2014, was $8.4 million, a $0.9 million increase from $7.5 million for the same period of last year. This increase was due to the additional depreciation for seven vessels joining the fleet from the second quarter of last year until the second quarter of 2014.

§ Income from operations for the three months ended June 30, 2014 was $7.1 million compared to $6.9 million for the same period last year, an increase of $0.2 million or 2.9%.

§ Interest and finance costs for the three months ended June 30, 2014 were $2.6 million compared to $2.0 million for the same period last year. The increase in interest and finance costs was due to a combination of an increase in commitment costs and higher outstanding loan balances due to the additional financing to partly fund the vessels that joined our fleet.

§ As a result of the above, the Company had net income for the three months ended June 30, 2014 of $4.7 million, compared to net income of $5.1 million for the three months ended June 30, 2013. The average number of shares outstanding as of June 30, 2014 increased to 38.2 million compared to 28.3 million for the same period of last year, due to the offering of 7.9 million shares in February and May of 2014. Earnings per share for the three months ended June 30, 2014 amounted to $0.12 compared to $0.18 for the same period of last year.

§ Included in the second quarter 2014 results are net losses from interest rate derivative instruments of $0.07 million. Interest paid on interest rate swap arrangements amounted to $0.41 million, or $0.01 per share and gains from change in fair value of the same arrangements amounted to $0.34 million. Adjusted net income was $4.4 million or $0.12 per share for the three months ended June 30, 2014 compared to $4.4 million or $0.16 per share for the same period last year.

§ EBITDA for the three months ended June 30, 2014 amounted to $15.8 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 43.3 vessels was owned by the Company during the three months ended June 30, 2014, compared to 38.1 vessels for the same period of 2013. As of today, charter coverage for the fleet is 72% through to the end of 2014 and 52% for 2015.

§ As of June 30, 2014, cash and cash equivalents amounted to $133.7 million and total debt to $367.0 million. During the six months ended June 30, 2014 debt repayments amounted to $20.7 million.

Six Months 2014 Results
:

§ Revenues for the six months ended June 30, 2014, amounted to $65.8 million, an increase of $6.1 million, or 10.22%, compared to revenues of $59.7 million for the six months ended June 30, 2013, primarily due to the higher number of vessels in our fleet in the 2014 period.

§ Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2014 were $6.6 million and $21.3 million, respectively, compared to $8.1 million and $16.7 million for the six months ended June 30, 2013. The $3.1 million increase in voyage and operating expenses was primarily due to the higher number of vessels that operated in the 2014 period and on the portion of the fleet operating now in Latin America, where crew and other operating costs are higher.

§ Drydocking Costs for the six months ended June 30, 2014 were $0.5 million as one of our vessels was drydocked during the period, compared to four vessels that were drydocked during the same period last year at a cost of $1.4 million.

§ Depreciation for the six months ended June 30, 2014, was $16.4 million, a $1.6 million increase from $14.8 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.

§ Income from operations for the six months ended June 30, 2014 was $16.8 million compared to $15.3 million for the same period last year, an increase of $1.5 million or 9.8%.

§ Interest and finance costs for the six months ended June 30, 2014 were $4.6 million compared to $4.1 million for the same period last year. The increase in interest and finance costs was due to a combination of an increase in commitment costs and larger outstanding loan balances.

§ As a result of the above, the Company had net income for the six months ended June 30, 2014 of $12.3 million, compared to net income of $11.5 million for the six months ended June 30, 2013. The average number of shares outstanding as of June 30, 2014 increased to 36.0 million compared to 24.4 million for the same period of last year, due to the offerings of a total of 7.9 million shares in February and May of 2014. Earnings per share for the six months ended June 30, 2014 amounted to $0.34 compared to $0.47 for the same period of last year.

§ Included in the first six months of 2014 results are net gains from interest rate derivative instruments of $0.14 million. Interest paid on interest rate swap arrangements amounted to $1.01 million, or $0.03 per share and gains from change in fair value of the same arrangements amounted to $0.87 million. Adjusted net income was $11.6 million or $0.32 per share for the six months ended June 30, 2014 compared to $9.8 million or $0.40 per share for the same period last year.

§ EBITDA for the six months ended June 30, 2014 amounted to $34.1 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 42.7 vessels were owned by the Company during the six months ended June 30, 2014, compared to 37.6 vessels for the same period of 2013.

CEO Harry Vafias commented, "As always second and third quarters prove to be challenging ones due to mainly seasonality but also terminals maintenance. In addition we had a couple of vessels finishing long charters in ‘exotic’ locations and had to be repositioned to find new business. However, we were successful in securing long term charters for three more of our new building vessels, extending to 2022. There is a healthy demand for modern vessels, while overall the market remains stable. The market for older ships operating in the spot market was weaker and as compared to the previous quarter, we had more vessels in the spot market -hence the increase in voyage expenses - seven of our older vessels underperformed while the remaining vessels operated successfully. Although we are continuing with our short term strategy to reduce the number of vessels available in the spot market we are waiting to conclude more period charters in the winter months as the market is firmer and more charterers will be looking to take in ships on period charters. In addition please remember there are approximately 10 million shares more outstanding than the same quarter last year!

"In this opportune time, our goal is to modernize and expand the fleet through the optimal use of the proceeds from our recent equity offerings. My family and I have shown our alignment with shareholders interests by participating on the last two private placements! It will take a few quarters to see the effects of our fleet growth, but we have already made significant commitments to increase our fleet from 44 vessels to 61 vessels at a cost of nearly $400 million, most of which will be delivered by Q3 2015. We have committed to expand our fleet by an additional 17 eco newbuilding LPG vessels ordered mainly from Japanese yards and we are making progress in the negotiations with these yards. We expect to announce the plan of action in the near future that will put into good use the proceeds from the latest equity raise. We are in advanced discussions with banks for financing all of these acquisitions with most of them already being committed. Last but not least there is no more need for equity raises since we hold a significant amount of cash and our debt to capital ratio has fallen below 30 percent! We will now focus on taking delivery of all our newbuildings, milking our existing vessels, and taking advantage of the positive demand and supply fundamentals in the LPG space."
 

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