StealthGas Inc. reports second quarter and six months 2020 financial and operating results

Athens, Greece - August 21, 2020

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 and six months ended June 30, 2020.

Operational and Financial Highlights

• Fleet utilization of 99.7% in Q2 ’20 - with only 11 days of technical off hire.

• Fleet operational utilization of 97.1% in Q2 ’20, mainly due to few of our ships being in the spot market - equivalent to 10.8% of voyage days.

• Fleet calendar days down 6.5% quarter over quarter to 3,743, attributed to our strategic fleet contraction.

• About 71% of fleet days are secured on period charters for the remainder of 2020, with total fleet employment days for all subsequent periods representing approximately $112 million in contracted revenues. Period coverage for 2021 is currently 32%.

• Voyage revenues of $36.3 million in Q2 ’20, an increase of $2.2 million compared to Q2 ’19 mostly due to the sharp rise (20%) of revenues stemming from our time charters and reduced presence in the spot market by 48% which were partly offset by the fewer chartered-in vessels.

• Net Income of $8.9 million for Q2 ’20, corresponding to an EPS of $0.23, our best quarterly performance since the first quarter of 2013.

• EBITDA of $21.8 million in Q2 ’20, compared to $14.6 million in Q2 ’19.

• Low gearing, as debt to assets stands at 37.7% and quarter over quarter reduction in finance costs by $1.7 million.

• Total cash of $51.5 million as of June 30, 2020 - following the cash utilization for the acquisition of two new small LPG vessels from affiliates. The first vessel was delivered in June 2020 while the second vessel will be delivered in September 2020.

Second Quarter 2020 Results:

• Revenues for the three months ended June 30, 2020 amounted to $36.3 million, an increase of $2.2 million, or 6.5%, compared to revenues of $34.1 million for the three months ended June 30, 2019, following a noticeable rise - 20% - of our time charter revenues stemming mainly from small LPGs and our 22,000 cbm semi-refrigerated vessels, due to higher rates compared to 2019, along with limited exposure in the spot market which was quite soft mostly due to the COVID-19 pandemic.

• Voyage expenses and vessels’ operating expenses for the three months ended June 30, 2020 were $2.1 million and $11.6 million respectively, compared to $4.1 million and $11.8 million respectively, for the three months ended June 30, 2019. The $2.0 million decrease in voyage expenses was mainly attributed to a 47.5% quarter-on-quarter reduction of spot days in conjuction with a noticeable decrease in bunker costs. The 1.7% decrease in vessels’ operating expenses compared to the same period of 2019, is a result of the decline of our time charter and spot days, for which we incur operating expenses, by 6.5% compared to the same period of last year.

• General and Administrative expenses for the three months ended June 30, 2020 amounted to $0.5 million compared to $0.9 million for the same period of last year. This decrease is mainly attributed to the fact that for the three months ended June 30, 2019 share based compensation expense of $0.2 million was incurred, which was not the case for the three months ended June 30, 2020 since all the shares awarded under our equity compensation plan vested in August 2019.

• Depreciation for the three months ended June 30, 2020 was $9.2 million, a $0.3 million decrease from $9.5 million for the same period of last year due to the decrease in the average number of our vessels.

• Impairment loss for the three months ended June 30, 2020 was $0.7 million relating to two of our oldest vessels. No such loss was recorded in the same period of last year.

• Interest and finance costs for the three months ended June 30, 2020 and 2019 were $3.7 million and $5.4 million, respectively. The $1.7 million decrease from the same period of last year is mostly due to the decline of LIBOR rates and the decrease of our indebtedness.

• Equity income in joint ventures for the three months ended June 30, 2020 and 2019 was $1.9 million and $0.3 million respectively. The $1.6 million increase from the same period of last year, is mainly due to the profitability of the three secondhand (2010 built) 35,000 cbm medium gas carriers which operate under a joint venture arrangement since Q1 ‘20.

• As a result of the above, for the three months ended June 30, 2020, the Company reported Net income of $8.9 million, compared to a net loss of $0.2 million for the three months ended June 30, 2019. The weighted average number of shares outstanding for the three months ended June 30, 2020 and 2019 was 38.3 million and 39.8 million, respectively.

• Earnings per share, basic and diluted, for the three months ended June 30, 2020 amounted to $0.23 compared to loss per share of $0.005 for the same period of last year.

• Adjusted net income was $9.5 million or $0.25 earnings per share for the three months ended June 30, 2020 compared to adjusted net income of $0.2 million or $0.01 earnings per share for the same period of last year.

• EBITDA for the three months ended June 30, 2020 amounted to $21.8 million compared to EBITDA of $14.6 million for the three months ended June 30, 2019. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net (Loss)/Income are set forth below.

• An average of 41.1 vessels were owned by the Company during the three months ended June 30, 2020, compared to 42.0 vessels for the same period of 2019.



Six Months 2020 Results:

• Revenues for the six months ended June 30, 2020, amounted to $70.6 million, a decrease of $1.9 million, or 2.6%, compared to revenues of $72.5 million for the six months ended June 30, 2019, primarily due to the reduction of our calendar days by 9.3% as a result of the decrease in the average number of our vessels by 2.6 vessels, along with fewer charter-in vessels.

• Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2020 were $4.9 million and $24.8 million, respectively, compared to $7.9 million and $24.7 million for the six months ended June 30, 2019. The $3.0 million decrease in voyage expenses was mainly due to the 45.7% (or 608 days) reduction of spot days. The $0.1 million increase in vessels’ operating expenses is mostly due to the unforseen technical damage of one vessel which occurred within the first quarter of 2020.

• Depreciation for the six months ended June 30, 2020, was $18.6 million, a $0.3 million decrease from $18.9 million for the same period of last year, due to the decrease in the average number of our vessels.

• Impairment loss for the six months ended June 30, 2020 was $0.7 million relating to two of its oldest vessels. No such loss was recorded in the same period of last year.

• Interest and finance costs for the six months ended June 30, 2020 and 2019 were $7.9 million and $11.4 million respectively. The $3.5 million decrease from the same period of last year, is mostly due to the decline of LIBOR rates particularly in the second quarter of 2020, along with the decrease of our indebtedness.

• Equity income in joint ventures for the six months ended June 30, 2020 and 2019 was $2.5 million and $0.5 million respectively. The $2.0 million increase from the same period of last year, is mainly due to the profitability of the three secondhand (2010 built) 35,000 cbm medium gas carriers which operate under a joint venture arrangement since Q1 ‘20.

• As a result of the above, the Company reported a net income for the six months ended June 30, 2020 of $11.9 million, compared to a net income of $1.8 million for the six months ended June 30, 2019. The weighted average number of shares outstanding for the six months ended June 30, 2020 and 2019 was 38.9 million and 39.9 million respectively. Earnings per share for the six months ended June 30, 2020 amounted to $0.31 compared to earnings per share of $0.04 for the same period of last year.

• Adjusted net income was $12.6 million, or $0.32 per share, for the six months ended June 30, 2020 compared to adjusted net income of $2.3 million, or $0.06 per share, for the same period of last year.

• EBITDA for the six months ended June 30, 2020 amounted to $38.3 million compared to EBITDA of $31.7 million for the six months ended June 30, 2019. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below. An average of 41.1 vessels were owned by the Company during the six months ended June 30, 2020, compared to 43.7 vessels for the same period of 2019.

• As of June 30, 2020, cash and cash equivalents amounted to $36.6 million and total debt amounted to $357.1 million. During the six months ended June 30, 2020 debt repayments amounted to $20.7 million.



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

• A one year time charter for its 2018 built 22,000 cbm semi- refrigerated vessel, the Eco Arctic, to an International LPG trader until September 2021.

• A six months time charter for its 2020 built LPG carrier, the Eco Texiana, to an International LPG Trader until December 2020.

• § A six months time charter for its 2012 built LPG carrier, the Gas Esco, to an International LPG Trader until December 2020.

• § A three months time charter extension for its 2018 built semi-refrigerated vessel, the Eco Freeze, to an International LPG Trader until September 2020.

• § A three months time charter for its 2016 built LPG carrier, the Eco Nical, to an International LPG Trader until September 2020.

With these charters, the Company has total contracted revenues of approximately $112 million. Total anticipated voyage days of our fleet is 71% covered for the remainder of 2020 and currently, 32% for 2021.

Including the time charters of our JV arrangements, total contracted revenues amount to $133 million.

Board Chairman Michael Jolliffe Commented
In spite of the global turmoil the COVID-19 pandemic has brought on, StealthGas exerted a very strong performance in the second quarter of 2020 - marking the best quarterly results we have seen over the last seven years. The pillars of our success were principally our strong period coverage secured ahead of the imposed lockdowns, our stable operating cost base and the lowering of our finance costs.

Our conservative strategy of striving to secure our fleet on period charters paid off in that we had concluded several period charters at competitive rates prior to the COVID-19 pandemic outbreak and hence were shielded from any market deterioration while at the same time managed to improve largely upon our profitability.

We proved that we have a strong fleet, solid financial position and efficient strategy, which instills us with confidence in this uncertain market we are facing. Our performance was also a proof against our share price levels, which we deem as an unfair reflection of StealthGas’s dynamics.

Going forward we will strategically navigate the tides of the COVID-19 pandemic, pursuing the best course of action amidst what may prove to be difficult market conditions.

Full report

StealthGas Inc. Press Release