Q4 2023 StealthGas Inc Earnings Call
Okay.
Operator: Good day, and thank you for standing by. Welcome to the StealthGas Inc. Q4 2024 Resolve Conference Call-In Webcast. At this time, all participants are in listen-only mode, with no question and answer session.
Good day and thank you for standing by welcome to the <unk>, Inc. Q4, 'twenty to 'twenty four results conference call and webcast.
At this time all participants are in listen only mode with no question and answer session.
Operator: Please note that today's conference is being recorded. I would like now to turn the conference over to your speaker, Mr. Michael Jolliffe, Chairman. Please go ahead.
Please note that today's conference is being recorded.
I'd like now turn the conference over to your Speaker, Mr. Michael Jolliffe Chairman. Please go ahead.
Michael Jolliffe: Good morning everyone, and welcome to our fourth quarter 2023 earnings conference call and webcast. I'm Michael Jolliffe, Chairman of the Board of Directors, and joining me on our call today as usual is Harry Vafjas to discuss the market and company outlook, and Konstantinos Systouvaris to discuss the financial aspects. Before we commence our presentation, I would like to remind you that we will be discussing forward-looking statements, which reflect current views with respect to future events and financial performance. So if you could all take a moment to read our disclaimer on slide two of this presentation, I will be great.
Good morning, everyone and welcome to our fourth quarter 2023 earnings conference call and webcast.
I'm, Michael Jolliffe, Chairman of the board of Directors and joining me on our call today as usual is Harry bass to discuss the market and company outlook and Konstantinos <unk> to discuss the financial aspects.
Before we commence our presentation I would like to remind you that we will be discussing forward looking statements, which reflect current views with respect to future events and financial performance. So if you could all take a moment to read our disclaimer on slide two of this presentation I should be grateful.
Michael Jolliffe: Risks are further disclosed in StealthGas's filing with the Securities and Exchange Commission. I would also like to point out that all amounts quoted, unless otherwise clarified, are implicitly stated in US dollars. Today we released our results for the fourth quarter of the full year 2023, announcing record profits for the second year in a row. So let's proceed to discuss these results and update you on the company's strategy and the market in general. Turning to slide 3, we summarise some highlights, starting with Fleet and Operations Updates. We first concluded the previously announced sale of two vessels, the Echo Dream and the Echo Green, delivering those vessels in January. That same month, we also took delivery of our long-awaited MGC new building vessels, the Echo Wizard and Echo Oracle, that were deployed on their respective time charts.
Risks are further disclosed itself gaseous filing with the Securities and Exchange Commission.
I would also like to point out that all amounts quoted unless otherwise clarified are impaired and implicitly stated in U S dollars.
Today, we released our results for the fourth quarter of the for the full year 2023.
<unk> seen for the second year in a row record profits.
Let's proceed to discuss these results and update you on the company's strategy and the market in general.
Turning to slide three we summarize some highlights starting with fleet and operations update.
We fast concluded the previously announced sale of two vessels.
Dream and that kind of a green delivering those vessels in January.
That same month, we also took delivery of our long awaited M. G C. New building vessels the Echo Wizard.
The article that was deployed on their respective time charters.
Michael Jolliffe: As the market was firm during the last couple of months, we continued securing more period charters both in our fully-owned fleet and for the joint-venture vessels, with contract coverage for 2024 of 66% of our fleet days for our fully-owned fleet. We have thus contracted revenues of over $200 million for all subsequent periods, excluding our JV vessel. Moving to our financial highlights, with on average 7 fewer vessels compared to last year and a 20% reduction in fleet days, net voyage revenues, that is net of voyage costs, were flat at $130.6 million and $130.3 million for 2022 and 2023, respectively, in spite of the smaller fleet. Our profitability remained strong in the fourth quarter and was $8.9 million, compared to $7.7 million last year, a 15% increase.
As the market was five and during the last couple of months, we continued securing more period charters brought with it a 40 hour in fleet and for the joint venture vessels with contract coverage for 2024 of 66% of our fleet days for our fully owned fleet we.
We have vast contracted revenues of over $200 billion for all subsequent periods, excluding our JV vessels.
Moving to our financial highlights with an average seven fewer vessels compared to last year and a 20% reduction in fleet days net voyage revenues that is that's our voyage costs were flat at 100, and sorry, T 0.6, and $130 3 million for 2022.
In 2023, respectively in spite of the smaller fleet.
Our profitability remains strong in the fourth quarter was $8 $9 million compared to $7 7 million last year.
15% increase.
Michael Jolliffe: Well, for the full year, net income was $51.9 million, compared to $34.3 million last year, a 52% increase, which is the highest profit recorded by the company since it became public. Earnings per share for the 12 months were £1.38, and also worth pointing out is that during 2023, we have halved our debt by paying down facilities of $154 million and still maintain strong liquidity. In the first two months of 2024, we drew down on a $70 million loan to finance the delivery of our two new building vessels and prepaid one of the older facilities, thus having made debt repayments of over £30 million so far this quarter. As far as share buybacks are concerned, during the last quarter of 2023, we bought back 1.2 million shares, bringing the total number of shares repurchased to 3.0 million shares, However, we have not made any share repurchases during 2024 so far and have about $6 million left authorised for such a purpose.
Well for the full year net income was $51 9 million compared to $34 3 million last year.
52% increase which is the highest profit recorded by the company since it became public.
Earnings per share for the 12 months, we're at 1.38.
Also worth pointing out is that during 2023, we have hopped out debt by paying down facilities about $154 million and still maintain strong liquidity.
In the first two months of 2024, we drew down on our $17 million, allowing to finance the delivery of our two new building vessels.
Prepaid prepaid what else the older facilities, that's having made debt repayments of over 30 million so far this quarter.
As far as the share buybacks during the last quarter of 2023, we bought back one 2 million shares, bringing the total number of shares repurchased three 5 million shares costing over $19 billion.
However, we have not made any share repurchases during 2024, so far and have about $2 6 million left authorized for such a purpose.
Michael Jolliffe: Let us move on to slide 4 for our fully owned Fleet Employment Update as of February. Just like in the previous call, we again announced a number of new period charters. One of these seven new charters, excluding our J.V.
Let's just move on to slide four for our fully owned fleet employment update as of February.
Just like in the previous call, we again announced a number of new period charters.
Of these seven new charges, excluding our JV vessels for a one year duration and when they see extensions with existing charterers to where it was six months duration.
Michael Jolliffe: Vest, four of one year duration and were mostly extensions with existing charters, two were of six months duration, and one of three months duration. As a result, since the beginning of the year, we have significantly increased our contracted days for 2024 to 66%, securing almost $120 million in revenues, while for the six larger vessels in our fleet, the four handy size and two MGCs, the percentage coverage is slightly higher at 76%. We have also managed to secure contracted revenues for all periods up to 2027 of over $200 million. However, only two of our vessels currently operate in this location.
One of three months duration.
As a result since the beginning of the year, we have significant it significantly increased our contracted days for 2024% to 66% securing almost $120 million in revenues for the six larger vessels in our fleet beforehand, he size and two M D. CS.
The person a percentage coverage is slightly higher at 76%.
We have always had managed to secure a contracted revenues for all periods up to 2027 are over $200 million.
Only two of our vessels currently operating in the spot market.
Michael Jolliffe: Lastly, in terms of dry docks, during 2024, we have seven small LPG vessels scheduled for dry dock. Slide 5 I would like now to provide an update on our two joint ventures comprising six vessels. As far as the joint venture with the four small LPG vessels is concerned, there was a lot of activity on the chartering side. All four vessels entered into period charters between 5 and 12 months, whereas before, two of these were operating spots. As far as one vessel that was scheduled to be dry docked in the current quarter, it's dry docked, and it's just completed. The second joint venture currently comprises two medium gas... Both are currently on period charters, as previously announced. The Echo Ethereals Charterer had a purchase option attached to the charter and notified us of its intentions to exercise that option, accompanied by a deposit.
Lastly in terms of dry docks. During 2024, we have seven small LPG vessels scheduled for dry dock.
In slide five I would like now to provide an update about two joint ventures comprising of six vessels.
As far as the joint venture with FAW small LPG vessels. There was a lot of activity on the chartering side all four vessels entered into period charters between five and 12 months, whereas before two of these were operating spot.
As far as one vessel that was scheduled to be dry docked in the current quarter is dry dock has just completed.
The second joint venture currently comprises of two medium gas carriers. Both are currently on period charters as previously announced.
They actually have a theory as charterer.
Had a purchase option attached to the charter notified us of its intention to exercise that option accompanied by a deposit.
Michael Jolliffe: We expect the vessel to be delivered at the end of the Charter in the second quarter. From the sale, the joint venture expects a profit, and the StealthGas share will be reflected in the investments part of the income statement after its conclusion. Also, the vessel is debt-free, and subject to agreement with our partners, we expect that all of the sale proceeds and accumulated profits will be distributed to the partners thereafter. In terms of our fleet geography, presented in slide 6, our company mainly focuses on regional trade and local distribution of gas, while the larger vessels often engage in intercontinental voyaging. This graph is a snapshot of the positioning of the fleet, including the JV vessels, as of mid-February.
We expect the vessels to be delivered at the end of the charter in the second quarter.
From the sale of the joint venture expects a profit and the self Guy shad will be reflected in the investments part of the income statement after its conclusion.
So the vessel is debt free and subject to agreement with our partners.
We expect that all of the sale proceeds and accumulated profits will be distributed to the partners thereafter.
In terms of our fleet geography presented in slide six our company mainly focuses on regional trade and local distribution of gas.
Larger vessels often engage at Intercontinental voyages.
This graph is a snapshot of the positioning of the fleet, including the JV vessels as of mid February.
Michael Jolliffe: The majority of our fleet, 18 vessels, currently trade in Europe, particularly in the North West and in the Mediterranean. We have strategically focused over the past several quarters on this area as the freight rates west of Suez continue to command a premium over East, cough cough, Seven vessels are trading in the mid-far east, and four vessels are trading in the US and Caribbean. There are four in Africa, one more than the previous quarter, although this is a trans-Indian ocean train.
The majority of our fate 18 vessels currently trade in Europe, particularly in the northwest and in the Mediterranean.
We have strategically focused over the past several quarters on this area.
Great rates West of Suez continue to command a premium over east of Suez.
[laughter].
Seven vessels are trading in the mid east.
East four vessels trading in the U S and Caribbean.
Four in Africa.
Rather than the previous quarter, although this is a trial and Indian Ocean trade.
Yeah.
Michael Jolliffe: We do not expect a major redistribution in the trading of freight. However, that being said, we do have one vessel relocating from Asia to Europe. However, this is one of the recently delivered MGC vessels that is expected to engage in ammonia trading in Europe. Let me take the opportunity to also address the matter of the Red Sea situation. Since it is not very often that our vessels move from east to west and vice versa, let me say that this particular vessel, which is on time charter, although it intends to unload its cargo in the Mediterranean, it will follow the long route via the Cape and enter the Mediterranean from Gibraltar rather than from the Suez Canal. So instead of taking 20 days, the trip will take about 38 days, almost double the time.
We do not expect a major redistribution in the trading of the fleet.
But that being said, we do have one vessel relocating from Asia to Europe.
However, this is one of the recently delivered M. G. C vessels that is expected to engage in ammonia trading in Europe.
Let me take the opportunity to also address the matter of the Red Sea situation.
Since it is not very often they don't mess. It was moved from east to west and vice versa.
When I say this particular vessel, which is on time charter.
And as to unload its cargo in the Mediterranean will follow the long route by the Cape and entered the Mediterranean from Gibraltar, rather than from the Suez Canal.
They're taking 20 days that trip will take about 38 days almost double the time.
Konstantinos Systouvaris: I will now turn the call over to Consentino Sistovaris for our financial performance. cough cough. Thank you, Michael, and good morning to everyone. I will discuss the financial results that were released today. Let us turn to slide 7, where we see a snapshot of the income statement for the fourth quarter and 12 months of 2023 against the same period of 2020. Even though fleet days were reduced by 21% and we had 7 fewer vessels, net revenues, that is, after voyage expenses, came in at $30.8 million for the quarter and $130.3 million for the 12 months. Decrease of 15% for the quarter and 0.2% for the 12 months compared to last year. So our fewer vessels generated more voyage revenues comparatively, and had reduced voyage expenses. Operating expenses were at $12.9 million for the quarter, down 12%, while for the full year they were $53.1 million, a yearly reduction of 3.3%.
I will now turn the call over to Constantino Sisto virus for our financial performance. Thank you.
Okay.
[laughter].
Thank you Michael and good morning to everyone.
He will discuss the financial results that were released today.
Let's turn to slide seven where we see a snapshot of the income statement for the fourth quarter and 12 months of 2023 against the same period of 2022.
Even though fleet days were reduced by 21% and we had seven fewer vessels.
Net revenues that is after voyage expenses came in at 30.8 million for the quarter and the $133 million for the 12 months.
A decrease of 15% for the quarter and 0.2% for the 12 months compared to last year.
So our fewer vessels generated more voyage revenues comparatively and had reduced voyage expenses.
Operating expenses were at $12 9 million for the quarter down 12% while for the full year were $53 1 million a year.
Early reduction of three 3%.
Konstantinos Systouvaris: We would have expected a larger reduction in OPEX year on year, but we did face inflationary pressures and had cost overruns, particularly during the first quarter of last year. In the fourth quarter, we also faced some extraordinary costs related to the maintenance of one of our vessels. We also note depreciation costs being reduced significantly as a result of the fleet reduction. 5.6 million. 23.7 million respectively for the quarter and 12 months. During the fourth quarter of this year, the company did not recognize any gains or losses on the values of its leads.
We would have expected a larger reduction in opex year on year, but we did face inflationary pressures and had cost overruns particular during the first quarter of last year.
During the fourth quarter. We also faced some extraordinary costs related to the main thing maintenance of one of our vessels.
We also note depreciation costs being reduced significantly as a result of the fleet reduction.
Two $5 6 million and 23.7 million respectfully, respectively for the quarter and 12 months.
During the fourth quarter of this year.
The company did not recognize any gains or losses on the values of its fleet.
Konstantinos Systouvaris: But for the full year, the company recognized a 2.8 million impairment loss and a 7.6 million gain, coming from the sale of vessels during that period. As a result, income from operations... increased 3% to $9.6 million for the quarter and increased by 40% to $45.8 million for the 12-month period, compared to last year. Interest and finance costs were significantly reduced by 30% over the quarterly period.
But for the full year the company recognized $2 8 million impairment loss and a $7 6 million gain coming from the sale of vessels during that period.
As a result income from operations increased 3% to $9 6 million for the quarter and increased by 40% to $45 8 million for the 12 months compared to last year.
Interest and finance costs were significantly reduced by 30% over the quarterly period and 18% over the 12 months period.
Konstantinos Systouvaris: 18% over the 12-month period. Even though rates have more than tripled, the comparative period. And that translates into significant savings, which is the result of the company's debt repayment. In addition, for the 12-month period, our joint ventures, particularly the one with the larger vessels, produced good results, adding to the bottom line 10.8 million in 2022 and 12.3 million in 2023, both from operations and particularly from sale and purchase activity. As a result of all of the above, we ended the fourth quarter of 2023 with a net income of $8.9 million compared to $7.7 million for the same quarter of last year, a 25% increase, with earnings per share for the fourth quarter of $0.25 and adjusted earnings per share of $0.29. For the 12-month period, net income was $51.9 million compared to $34.2 million last year, a 51% increase. Earnings per share for 2023 were $1.38, and adjusted earnings per share were $1.34.
Even though rates have more than tripled.
In the comparative periods.
That translates into significant savings.
I series, which is the result of the company's debt repayments.
In addition for the 12 months period or joint ventures, particularly the one with the larger vessels produced good results, adding to the bottom line.
<unk> 8 million in 2022, and $12 3 million in 2023, both from operations and particularly from sale and purchase activities.
As a result of all of the above we ended the fourth quarter of 2023 with net income of $8 9 million compared to 7.7 million for the same quarter of last year.
At 25% increase with earnings per share for the fourth quarter of 25 cents and adjusted earnings per share of 29 cents.
While for the 12 months period net income was $51 9 million compared to $34 2 million last year.
51% increase.
Earnings per share for 2023.
One dollar and 38 cents and adjusted earnings per share were $1.34.
Konstantinos Systouvaris: These were record revenues for the company for a second year in a row. Looking at the balance sheet in slide 8, our liquidity, including restricted cash and short-term investments, was $83.7 million at the end of the quarter, reduced from $95.7 million at the end of last year, mostly due to debt repayment. Vessels held for sale were $34.9 million as of December 31st. Both these vessels, which were debt-free at the time, were sold in January, and the proceeds enhanced the liquidity. Vessels' net book value decreased from $628.5 million to $504.3 million, mostly due to the sale of vessels during 2023. The book value of our investments in our 50-50 joint ventures was $39.7 million, close to the previous quarter, but now covering six instead of five S's previously, whose market value is approximately $150 million. Moving on to the liability side, the total debt has been reduced by $154 million to $124 million at the end of last quarter.
These were record profits for the company for a second year in a row.
Looking at the balance sheet in slide eight our liquidity, including restricted cash and short term investments was at the end of the quarter 83.7 million reduced from $95 7 million at the end of last year, mostly due to the debt repayments.
Vessels held for sale were $34 9 million as of December 31st.
Both of these vessels.
Were debt free at the time were sold in January and the proceeds enhanced liquidity.
Vessels net book value decreased from 628.5.
5 million to $504 3 million, mostly due to the sale of vessels during 2023.
The book value of our investments in our 50 50 joint ventures was $39 7 million close to the previous quarter, but now covering six instead of five vessels previously whose market value is approximately $150 million.
Moving onto the liability side.
The total debt has been reduced by 154 million to $124 million at the end of last quarter.
Konstantinos Systouvaris: With the addition of $70 million in finance proceeds during the first quarter of 2024, we expect an increase in debt for the coming quarter, although we continue to prepay and have so far repaid $30 million in the current quarter. The $19 million spent on buying back shares during 2023 was accounted for as a reduction in equity. However, as a result of the solid results being reported during the year, overall, we managed to increase shareholders' equity by $32 million to $550 million. Concluding our financial commentary with slide 9, we will briefly have a look at the debt profile. Over a 12-month period, the company more than half... outstanding debt, with over $154 million of debt repayments, down to $124 million as of December 31, and continues to maintain a very low leverage. During the fourth quarter, no prepayments were made, just regular debt amortization.
With the addition of 17 million finance proceeds during the first quarter of 'twenty 'twenty four we expect an increase in the debt for the coming quarter.
So we continue to prepay and have so far repaid $30 million in the in the current quarter.
The 19 million spent on buying back shares during 2023 was accounted as a reduction in equity. However, as a result of the solid results being reported during the year overall, we managed to increase shareholders' equity by 32 million to 500.
And $50 million.
Concluding our financial commentary with slide nine we will briefly have a look at the debt profile.
Over a 12 month period, the company more than half deep its outstanding debt with over $154 million of debt repayments done to 124 million as of December 31st.
And continues to maintain a very low leverage.
During the fourth quarter no prepayments were made just regular debt amortization.
Konstantinos Systouvaris: During January, the company drew down $70 million in finance proceeds from its recently concluded eight-year facility related to the two new building vessels. As there are currently no further CAPEX commitments, the company used part of the proceeds to prepay $29 million outstanding from another facility. As a result, the company has 18 vessels out of the 27 vessels in its current fleet mortgage-free, a considerable advantage if ever there is a need to raise funds. On the other hand, prepayments have reduced the debt that is hedged with interest rate swaps to 13%. The refinancing risk is very low as there are no balloon payments till the end of 2025 and the beginning of 2026.
During January the company drew down in the $70 million in finance proceeds from its recently concluded eighth year facility.
Related to the two new building vessels.
As currently there are no further capex commitments. The company. He was part of the proceeds to prepay 29 million outstanding from another facility.
As a result, the company has 18 vessels out of the 27 vessels in its current fleet mortgage free.
A considerable advantage.
Ever there is a need to raise funds.
On the other hand prepayments have reduced the debt that is hedged with interest rate swaps to 13%.
The refinancing risk is very low as there are no balloon payments till the end of 2025 and beginning of 2026.
Harry Vafias: I will now hand you over to our CEO, Harry Vafias, who will discuss the market and the company. On slide 10, we have a brief insight into the LPG market. 2023 was a bumper year for LPG exports that increased 4.3% year-on-year. The U.S. further increased the rate of its export growth, marking an impressive 15% year-on-year growth. We expect the U.S. will continue to ship incremental amounts of NGLs in the current year, albeit not at such breakneck speeds. The U.S. position as the number one exporter in the world, which now accounts for over 40 percent of global exports. The situation in Europe did not change much. The winter has so far been relatively mild, and reducing heating demand and petrochemical usage has also been anemic as a result.
I will now hand, you over to our CEO, Harry <unk>, who will discuss the markets and the company outlook.
On slide 10, we have a brief insight on the LPG market.
2023 was a bumper year for LPG exports that degree increased four 3% year on year.
The U S. Further increase the rate of its exports growth, marking an impressive 15% year on year growth.
We expect the U S will continue to ship incremental amounts of Ngls in the current year, albeit not as such breakneck speeds.
This coupled with the middle East volumes volumes continuing to decrease during 'twenty three mainly as a result of OPEC cuts a solidified in the U S position as number one exporter in the world that now accounts for over 40% of global exports.
The situation in Europe did not change much as I went through her so far have been relatively mild.
Reducing heating demand and petrochemical your search social being dynamic as a result.
Harry Vafias: Inventories remain high, and imports do not see the boost that was expected, marking declines year-on-year. That being said, and since the majority of our fleet trades in Europe, inter-regional trade has been quite active, and rates did strengthen. This could also be a consequence of the supply of pressurized vessels in Europe being limited by the very strict operational and safety limitations set in European ports that exclude a significant part of the global fleet. As far as the other two major importers, India and China, forecasts are that India will surpass a record 18 million tons of imports in 2023, growing imports by 3% last year, but more importantly, projections are for further increases. India is a growing economy of 1 billion plus people, where 45% of LPG demand is for household use.
Inventories remain high and imports do not see that bush was expected marking declines year on year.
That being said that since the majority of our fleet trades in Europe.
Regional trade has been quite a doctor and they did strengthen this could also be a consequence of a supplier of pressurized vessels in Europe being limited by the very strict operational and safety limitations set in European imports, but excludes a significant part of the global fleet.
[noise].
As far as the other two major importer, India, and China forecast out of that India surpassed a record 18 million tons of repurchasing 23.
Growing imports by 3% last year, but more importantly projections are for further increases in there is growing is it growing economy of 1 billion plus people, who are 45% of LPG demand is for household yours and with general elections coming the government has been supportive of subsidies for LPG and eliminating import duties.
Harry Vafias: And with general elections coming, the government has been supportive of subsidies for LPG and eliminating import duties in order to make LPG more accessible to the people. China imports a record 31 million tons of LPG per year and registered a 24% growth in 2023, assisted by the reopening of the economy, although demand was more subdued in the last quarter as high prices led to lower petrochemical plant utilization ratios. During 23, nine new PDH plants came on stream, adding 5.4 million tons of capacity. Reports say that another 7 million tons are set to be added in 2024 and 6 million tons in 2025, and even if these are too optimistic given the usual delays, and only an estimated 8 to 9 million tons are added over the next two years, that's still a 50% capacity addition from today's level. The other two issues are the Panama Canal and the Red
Order to make LPG more accessible to the people.
China imports and exports 31 million tons registered the 24% growth in 'twenty three assisted by the reopening of the economy.
Although demand was more subdued in the last quarter.
As high prices led to lower petrochemical plant utilization ratios.
During 'twenty three nine you'll PTH plants came on stream, adding $5 4 million tons of capacity.
Reports say that another $7 million don't just set to be added in 'twenty, four and 6 million tons in 'twenty five and even if these are too optimistic given the usual delays and only an estimated eight to 9 million tons are added over the next two years, that's still at 50% capacity addition from today's level.
The other two issues are the Panama canal and that situation as far as the Panama Canal. It seems like although delay still remain.
Harry Vafias: As far as the Panama Canal is concerned, it seems that although delays still remain, the situation is slowly improving. On the one hand, ton miles will decrease, but on the other hand, it will support the arbitrage trade with exports to China, while equally serious is the new situation in the Red Sea with attacks on vessels by the Houthis, and especially from a safety point of view. It's not often that we see our vessels crossing the Red Sea, but Michael just gave you an example of how this situation may affect us.
The situation is slowly improving.
So on the one hand ton miles will decrease but on the other hand, it will support the arbitrage trade with exports to China, while equal the shadows in your situation that let's see with attacks on vessels by the holders.
And especially from a safety point of view.
No not often that we see our vessels grocer at sea.
Michael Just gave you an example of how the situation may affect us.
Harry Vafias: On slide 11, we present some of the key fundamentals in our shipping market, commencing with time chart rates for our market. We continue to see quarter-on-quarter significant increases in rates, up to 21%, particularly in the larger sizes like MGC and handisized ships and moderate increases down to the 3.5K shares with the exception of the Asia trade. Looking at the small LPG trade west of Suez, on the period side, the market was quite active leading up to year-end. At the time of writing, the market is going through a typical period of winter strength, and owners are enjoying firm freight rates. East of Suez, on the period side, we saw more activity in Q4 than in Q3, however, the market performance is still lagging behind that of the Atlantic. This is the reason why we have seen a few vessels leave Asia in favor of the West.
On slide 11, we present some of the key fundamentals are now shipping market commensurate with time charter rates for a market, where you can see we continue to see quarter on quarter significant increases in rates up to 21%, particularly in the larger sizes like mtc and handy sized ships.
And moderating can you just down to the $3 five K ships with the exception of the Azure trade.
Looking at the small LPG trade west of Suez on the PDL side. The market was quite active leading up to year end at the time of writing the market is going through a typical period of winter strength and owners are enduring firm freight rates.
The tours on the apparel side, we saw more activity in Q4 than Q3. However, the market performance is still lagging behind that of the Atlantic.
This is the reason why we have seen a few vessels leave Asia and favorite further west.
Harry Vafias: For the Handysize and MGC Vestas, on the back of an ever-strengthening MGC market, which again took much of its strength from the VLGC market, available handysize positions became very tight, and spot rates increased substantially. We show owners that demand increased significantly through the quarter, and charters in need of tonnage found themselves paying significantly more than what they have been used to for many years. Since the start of the year, the TC market has been quiet, and a rather significant gap remains between owner-charters' ideas. As with the spot market, as soon as the VLGCs fell from their peak in mid-January, the period takers on the MGC side took a step back to assess the situation, and since then, things have remained pretty quiet. The good thing is that the number of TC candidates is very limited, and there won't be much competition between owners for any period inquiries coming up. The question is how many period inquiries we will see.
For the hand, besides the names you see vessels on the back of an ever strengthening I'm, just see market, which again took much of a strength from the VLCC market available handsets positions became very tight and spot rates increased substantially.
We've shown is that that does increase significantly through the quarter and charterers, who need of tonnage found themselves banks.
More.
Then what they have been used to for many years.
Since the start of the year. The D. C market has been quiet rather significant gap remains between all of our charters ideas is where the spot market as soon as the real juice is fell from their peak in mid January superior takers on them. Just as side took took a step back to assess the situation and since then things have remained pretty quiet there.
Good thing is that the number of tissue candidates is very limited and there won't be much competition between owners on any period in quad is coming up.
My question is how many pills and quarters, we will see.
Harry Vafias: I would like to reiterate that the fundamentals for a core fleet of small pressurized ships continue to look promising with an aging fleet, as almost a third of the fleet is over 20 years old. And although scrapping activity is limited due to the firm markets, we continue to see only a handful of vessels being ordered, not enough to tip the supply-demand balance. A similar picture is seen in the Honeysize fleet, where there are only five vessels to be delivered over the next two years. On the MGC side, there's indeed a high order book of about 20%, but demand for these vessels has so far proven resilient. The bulk of the orders is for 2026, and we have pretty much fixed our new building vessel for three years at very healthy numbers.
Where they're more long term view I would like to reiterate that the fundamentals for our core fleet of small pressurized ships continues to look promising.
With an aging fleet as almost a third of the fleet is over 20 years old and although scrapping activity is limited due to the fair market continued to show only a handful of vessels being ordered not enough to keep the supply demand balance.
Similar picture in the handy size fleet with only five vessels to be delivered over the next two years.
They have just decided that it shouldn't be the high order book of about 20%.
Demand for these vessels have so far proven resilient.
The bulk of the orders is for 'twenty 'twenty six.
And we have prudently fixed our new building vessel for three years at very healthy numbers on.
Harry Vafias: On slide 12, we're showing the evolution of our LPG fleet. In these slides, for comparison purposes, we have excluded the tanker vessels that we held up to 2021 and focused on the pure LPG fleet in terms of cubic capacity, including our JV vessels. From a strategic point of view, we have been sellers of vessels in the rising market. Since the beginning of 2013, 10 vessels have left the fleet of about 77,000 cubic meters in total.
On slide 12, we're shrinking the evolution of LPG fleet and the slides for comparison purposes, we have excluded the tanker vessels that we held up to 2021 and focus the pure LPG fleet in terms of cubic capacity.
Clothing, our JV vessels from a strategic point of view, we have been sellers of vessels in a rising market.
Is that beginning of 'twenty 310 vessels have left the fleet of about 77000 cubic meter capacity in total.
Harry Vafias: However, since October 23, we have added three brand new vessels of 122,000 cubic meters. This is the expansion we are making in the larger sizes, replacing all the smaller ships with modern medium gas carriers. Our core fleet continues to consist of smaller units, but with four medium gas carriers and four handy-sized gas carriers, the composition of the fleet has changed, hiding diversity in terms of our revenue stream and flexibility in terms of our operations and customer base, albeit with more volatility in rates. Our intention is to keep a diverse fleet and seek opportunities to replace smaller ships with larger ones. Now, we'll pass you on to Mr. Jolliffe for the remaining results. Thank you, Harry.
However, as you know since October 23, we have added three brand new vessels.
122000 cubic meters.
The sponsors we are making in the larger sizes, replacing older smaller ships for modern medium gas carriers. Our core fleet continues to consist of smaller units, but were for medium gas carriers and 400000 got Scott is the composition of the fleet has changed I think diversity in terms of our revenue stream and flexible.
In terms of operations and customer base, albeit with more volatility in rates. Our intention is to keep a diversified suite of sick opportunities to replace smaller ships with larger ones.
Now I will pass you onto Mr. Jolliffe for the remaining results.
Yeah.
Thank you Harry and our last slide number 13, we are outlining some of the key variables that may affect our performance in the quarters ahead.
Michael Jolliffe: In our last slide, number 13, we are outlining some of the key variables that may affect our performance in the quarters ahead. However, we continue to remain optimistic in the longer term for the reasons that we have discussed earlier. Summing up.
Continue to remain optimistic on the longer term for the reasons that we analyzed yet.
Summing up.
Michael Jolliffe: StealthGas reported for the fourth quarter of 2023 a net income of $8.9 million, yet another quarter of strong profitability. For the full year 2023, net income amounted to $51.9 million, far surpassing last year's record yearly profit of $34.3 million, corresponding to a 51% increase. So it gives me great pleasure that not only has the company managed to sustain its record profitability but drastically improve its success. Obviously, the main driver of such results is the lasting recovery of the LPG market, which, hopefully, will continue. Markets are volatile, and sound policies, as well as opportunistic plays, need to also guide decisions. As such, the company did not focus on growth for 2023.
South gas reported for the fourth quarter 2023, and net income of $8 9 million.
It was yet another quarter of strong profitability for.
For the full year 2023, net income amounted to $51 9 million far surpassing last year's record yearly profit of 34.3 corresponding to a 51% increase.
So it gives me great pleasure now Tony.
Has the company managed to sustain these record profitability, but drastically improve it successfully.
Obviously, the main driver of such results as the lasting recover of the LPG market that hopefully will continue.
The markets are volatile and sound policies as well as opportunistic plays need to also guide decisions.
As such the company did not focus on growth for 2023, and you'd rather focus on taking advantage of the market and see carrying more period charters currently having over $200 million in contracted revenues.
Michael Jolliffe: It instead focused on taking advantage of the market and securing more period charters, currently having over $200 million in contracted revenues, selling vessels as asset prices were rising, paying down debt as interest rates were rising, over $150 million was repaid in 2023 and over $30 million in the current quarter, and returning value to our shareholders by buying back our own stock, having bought over 10% of the issued shares during last year and spending $19.1 million. That being said, it was also important not to neglect to renew the fleet, and in January of this year, StealthGas took delivery of the two 40,000 cubic meter MGC vessels, Echo Oracle and Echo Wizard, whose period charters should support profitability this year. So far, the beginning of 2024 looks promising as the market for our vessels remains firm, and barring any extraordinary events, we should expect solid revenues in the current quarter. Even though our share price has climbed significantly over the last year, we believe we continue to be a sound, still undervalued investment, not just because we are optimistic about the market and have been producing good results but also because we are trading at a discount in terms of price to NAV and price to earnings.
[laughter] setting vessels as asset prices were rising paying down debt as interest rates were rising over 150 million was repaid in 2023 and over $30 million in the current quarter and returning value to our shareholders by buying back our own stock having bought over 10%.
The issue shares during last year and spending $19.1 billion.
That being said it was also important not to renew the fleet and in January of this year sales costs took delivery of the 240000 S cubic meter M. D C vessels.
Oracle Wizard, whose period charters should support profitability this year.
So far the beginning of 2024 looks promising as the market for our vessels remains firm and barring any extraordinary events, we should expect solid revenues in the current quarter.
Even though our share prices kind significantly over the last year. We believe we continue to be a sound still undervalued investment not just because we are optimistic on the market and have been.
Producing good results, but also because we are trading at a discount in terms of price to earn a V and price to earnings ratios.
Operator: We have now reached the end of our presentation, and we would like to thank you for joining us on our conference call today and for your interest and trust in our company. We look forward to having you with us again on our next conference call for our first quarter results in May. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you. Thanks for watching!
We have now reached the end of our presentation and we'd like to thank you.
Joining us at our conference call.
During this call today and for your interest and trust in our company.
We look forward to having you with US again at our next conference call for our first quarter results in May Thank you.
Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect your lines. Thank you.
Okay.
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Okay.
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