Q1 2024 StealthGas Inc Earnings Call

Okay.

Operator: Good day, and thank you for standing by. Welcome to the StealthGas Q1 2024 results conference call and webcast. During this call, all participants will be in listen-only mode with no question and answer session. Please note that today's conference is being recorded. I would now like to turn the conference over to Chairman of the Board, Mr. Michael Jolliffe. Please go ahead.

Speaker Change: Good day, and thank you for standing by it will come to the <unk> Q1, 'twenty 'twenty four results conference call and webcast.

Speaker Change: During this call all participants will be on listen only mode with no question and answer session. Please.

Speaker Change: Please note that today's conference is being recorded I would now like to turn the conference over to chairman of the Board Mr. Michael Joseph Please go ahead.

Michael Gordon Jolliffe: Thank you, good morning everyone, and welcome to our first quarter 2024 earnings conference call and webcast. This is Michael Jolliffe, Chairman of the Board of Directors.

Michael Gordon Jolliffe: Thank you.

Speaker Change: Good morning, everyone and welcome to our first quarter 'twenty 'twenty core earnings conference call and webcast.

It seems like we got a cabinet with the board of directors joining.

Michael Gordon Jolliffe: Joining me on our call today, as usual, is Harry Vafias, our CEO, to discuss the market and company outlook, and Konstantinos Sistovaris 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 that disclaimer on slide two of this presentation, I'd be grateful.

Konstantinos Sistovaris: Joining me on our call today as usual sorry about Gasthaus C E O to discuss the market and company outlook I'm Konstantinos Cisco bodies to discuss the financial aspects.

Konstantinos Sistovaris: 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.

Konstantinos Sistovaris: It'd be great.

Konstantinos Sistovaris: Risks are further described as itself got filing with the.

Konstantinos Sistovaris: The Securities and Exchange Commission.

Michael Gordon Jolliffe: Risks are further disclosed in StealthGas' filing with the Securities and Exchange Commission. Today, we released our results for the first quarter. Three months ago, I was here announcing to you our record full-year profits, so it is with great delight that we have managed to follow up on that with a great start for 2024 by announcing record quarterly profits. So let's proceed to discuss these results and update you on the company's strategy and the market in general.

Konstantinos Sistovaris: Today, we released our results for the first quarter.

Konstantinos Sistovaris: Three months ago I was here announcing to you our record full year profits. So it is with great delight that we have managed to follow up on that with a great start for 2024 by announcing record quarterly profits.

Konstantinos Sistovaris: So let's proceed to discuss these results and update you on the Companys strategy and the market in general.

Michael Gordon Jolliffe: Please turn to slide 3, where we summarise some highlights, starting with our fleet and operations update. During the first quarter, we sold two smaller vessels and took delivery of two brand new medium gas carriers. We have not bought or sold any vessels in the current quarter, with the exception of one vessel that was owned through a joint venture, as previously announced, that we will discuss further on in the call. With the market remaining firm, we continued securing more period charters, both in our fully owned fleet and for the joint venture vessels, with contract coverage for 2024 of 73% of our fleet days for our fully owned fleet.

Konstantinos Sistovaris: Please turn to slide three where we summarize some highlights starting with our fleet and operations update.

Konstantinos Sistovaris: During the past quarter, we sold two smaller vessels and got delivery of two brand new medium gas carriers, we have not bought or sold any vessels in the current quarter with the exception of one vessel that was added into a joint venture.

Konstantinos Sistovaris: Previously announced that we will discuss further on in the call.

Konstantinos Sistovaris: With the market remaining firm, we continue securing more period charters broken out 41 states.

Konstantinos Sistovaris: And for the joint venture vessels with contract coverage for 2024 of 73% of our fleet days for our fully owned fleet.

Michael Gordon Jolliffe: We have thus contracted revenues of over £180 million for all subsequent periods, excluding our joint venture vessels, and continue to be focused on maintaining our minimal spot exposure. Moving to our financial highlights, with on average five fewer vessels compared to last year and a 15% reduction in fleet days, net voyage revenues, that is net of voyage costs, increased to $38.7 million, or 14% year over year, and increased by 26% compared to the previous quarter. Net income for the first quarter was $17.7 million, compared to $16.8 million last year.

Konstantinos Sistovaris: We have that's contracted revenues of over 190 million through subsequent periods, excluding our joint venture vessels and continue to be focused on maintaining a minimal spot exposure.

Konstantinos Sistovaris: Moving to our financial highlights without averaged five fewer vessels compared to last year at a 15% reduction in fleet days net voyage revenues that is massive voyage costs increased $2, $38 7 million or 14% year over year increase.

Konstantinos Sistovaris: Slide 26% compared to the previous quarter.

Konstantinos Sistovaris: Net income for the first quarter was $17 $7 million compared to 16.8 million last year.

Michael Gordon Jolliffe: A 5% increase, which is the highest quarterly profit ever recorded by the company. Even better, we're earnings per share at 0.49 and 0.53 cents on an adjusted basis, given that we have decreased the share count year-on-year, having bought back 3.9 million shares last year. So far this year, we have scaled back the share repurchases and bought back about $0.4 million worth during the first quarter.

Konstantinos Sistovaris: 5% increase which is the highest quarterly profit ever recorded by the company.

Konstantinos Sistovaris: Even better we're adding per share 0.49.

Konstantinos Sistovaris: 0.53 cents on an adjusted basis, given that we have decreased the shacks out year on year, having bought back three 9 million shares last year.

Konstantinos Sistovaris: So far this year, we have scaled back the share repurchase shares and bought back about zero point $4 million with during the first quarter. So is that right. So there is about $5 $5 million left authorized for share repurchases.

Michael Gordon Jolliffe: So there is about $5.5 million left authorized for share repurchase. We continue with our debt reduction strategy since the beginning of the year, and up until today, we drew down on a $70 million loan to finance the delivery of our medium gas carriers and prepaid free facilities that, together with regular amortization, reduced the debt level by $85 million. On slide 4, let us reiterate for those new investors that may not be as familiar with our company that we have been in LPG shipping since 2004 and currently have an interest in 32 vessels. 27 of those we fully own, and five of those we have invested in under a joint venture structure. Traditionally, we have been focused on small gas carriers in the 3,000 to 8,000 cubic meter range.

Konstantinos Sistovaris: We continue with our debt reduction strategy since the beginning of the year and up until today, we drew down on our $70 million loan to finance the delivery of our medium gas carriers.

Konstantinos Sistovaris: And prepaid three facilities that together with regular amortization reduce the debt level by $85 million.

Konstantinos Sistovaris: And the next slide four lets us reiterate so that as new investors that may not be as familiar with a company that we are beating the LPG shipping since 2004 and currently have an interest in 32 vessels.

Konstantinos Sistovaris: 27 of those we fully own five of those we have invested in the under joint venture structures.

Traditionally we have been focused on small gas carriers in the 3000 to 8000 cubic meter range.

Michael Gordon Jolliffe: However, in the last few years, and especially since becoming a pure LPG company, there has been a strategic shift to complementing our small LPG carriers with larger-sized vessels. As such, we have been sellers of smaller, older vessels, replacing them with newer and larger vessels in an effort to firstly keep a young age profile for the fleet, which is currently about 10 years old, and secondly to provide a more holistic service to our industrial customers.

Konstantinos Sistovaris: However, in the last few years, and especially since becoming a pure L. P. G company that has been a strategic shift in complementing our small LPG carriers with larger sized vessels.

Konstantinos Sistovaris: As such we have been sellers of smaller older vessels, replacing them with your larger vessels in an effort to FSC keep a young age profile of the fleet that is currently about 10 years old and secondly to provide a more holistic service to our industrial customers.

Michael Gordon Jolliffe: Out of the 32 vessels currently in the fleet, 24 are small pressurized gas carriers, 4 are handy-sized semi-ref vessels, and 4 are full-ref medium gas carriers in the 40,000 to 45,000 cubic meter capacity. A diversified LPG fleet with larger vessels also provides the company with more upside earnings potential as rates for larger vessels are more volatile, and the downside, of course, if the market were to falter. Let us move on to slide five for our fully owned fleet employment update as of May and to stress that it has always been our focus to provide period coverage for our vessels and depend less on the swap market.

Konstantinos Sistovaris: Out of the 32 vessels currently in the fleet 24, a small pressurized gas carriers.

Handy size semi refs vessels and for a full <unk>.

Konstantinos Sistovaris: Medium gas carriers in the 40 to 45000 cubic meter capacity.

Speaker Change: A diversified LPG fleet with larger vessels also provides the company with more upside earnings potential as rates for larger vessels are more volatile and the downside of course is a market with a floater.

Let us move onto slide five for a fully iron fleet employment update as of May and to stress that this is always been our focus to provide area coverage vessels and depend less on the spot market.

Michael Gordon Jolliffe: Just like in February's call, we were once more pleased to announce a number of new period charters. Out of these five new charters, three were extensions with current charterers, one for a relatively long three years and two for a one-year duration, and the remaining two for six and three months respectively. As a result, we have increased our contracted days for 2024 to 73% and for 2025 to 30%, securing over $180 million in revenues up to 2027.

Speaker Change: In February as cool, we weren't as well we're pleased to announce a number of new period charters.

Speaker Change: After these five new charters, three where extensions with current charterers, one for a relatively long three years and two for one year duration.

Speaker Change: Mining two for six and three Bucks respectively.

Speaker Change: As a result, we have increased our contracted days for 2024% to 73%.

Speaker Change: For 2025 to 30 per cent securing over $180 million in revenues up to 2027.

Michael Gordon Jolliffe: Like in the previous call, only two of our vessels currently operate in the spot market. Lastly, in terms of dry docks during 2024, we still have seven small LPG vessels scheduled for dry dock, as none were dry docked in the first quarter. InsideSix, I would like now to provide an update on our investments... That is the interest we hold in five vessels through two joint venture structures that we do not consolidate in our results but use the equity method of accounting. The book value of our investments as of March 31st stood at $42.3 million.

Speaker Change: I think the previous call I need two of our vessels currently operated in the spot market.

Speaker Change: Lastly in terms of in terms of dry docks. During 2024, we still have seven small LPG vessels scheduled for dry dock as Don was dry docked in the first quarter.

Speaker Change: Inside six I would like now to provide an update on our investments that is the interest we hold in five vessels through two joint venture structures that we do not consolidate in our results, but use the equity method of accounting.

Speaker Change: Book value of our investments as of March 31st stood at $42 $3 million.

Michael Gordon Jolliffe: Out of these five vessels, four are small gas carriers, and one is a medium gas carrier that was delivered last year. In terms of chartering, one vessel had its time charter extended for 12 months, and another vessel entered into a new six-month period charter. For the one vessel that was scheduled to be dry docked in the current year, its dry dock was completed in the first quarter. As announced during our previous call, we held an interest in another medium gas carrier, a sixth vessel bought in 2020, that was sold and delivered during the April of this year.

Out of these five vessels for a small gas carriers and what is the medium gas carrier that was delivered last year in.

In terms of chartering one vessel had its time charter extended for 12 months and another vessel entered into a new six month period charter.

Speaker Change: But the one vessel that was scheduled to be dry docked in the current year is dried up was completed in the first quarter.

Speaker Change: As announced during our previous call. We held an interested another medium gas carriers of six vessels. Both in 2020 that was sold and delivered during the April of this year.

Michael Gordon Jolliffe: As these investments are more short-term in nature, we are happy to have crystallized the profits from the rapid rise in asset prices. On the sale of the Echo Ethereal, StealthGas received a $24 million interim distribution of the cash proceeds in April. The company's share of the profit from that sale will be reflected in the income from investments during the second quarter and was estimated at $9.5 million. That would translate to over 25 cents a share to the bottom line from that sale alone.

Speaker Change: As these investments are more short term in nature, we are happy to crystallize the profits from the rapid rise in asset prices.

Speaker Change: On the side of the theory of Astellas cash received $24 million interim distribution of the cash proceeds during April.

Speaker Change: Our company's share of the profit from that sale will be reflected in the income from investments during the second quarter and was estimated at $9 $5 million.

Speaker Change: That would translate to over 25 cents to the bottom line from that sale alone.

Michael Gordon Jolliffe: In terms of our fleet geography, presented in slide 7, our company mainly focuses on regional trade and local distribution of gas, while the larger vessels often engage in intercontinental voyages. This graph is a snapshot of the positioning of the fleet, including the joint venture vessels, as of mid-May. The majority of our fleet, 18 vessels..., or 55% currently trade in Europe, particularly in the Northwest 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 of Suez, and the customers, as well as the terminals, belonging mostly to established industrial players, demand higher specification vessels and strict adherence to safety principles.

Speaker Change: In terms of our fleet geography presented in slide seven.

Speaker Change: Company, mainly focuses on regional trade and local distribution of gas, while the larger vessels often engage interconsonantal wages.

Speaker Change: This graph is a snapshot of the positioning of the fleet, including the joint venture vessels.

Speaker Change: As of mid May.

Speaker Change: The majority of our fleet 18 vessels.

Speaker Change: Oh, 55% currently.

Speaker Change: In Europe, particularly in the northwest and in the Mediterranean.

Speaker Change: 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 of Suez.

Speaker Change: And the customers as well as the temenos relating mostly to establish industrial players.

Speaker Change: The highest one.

Higher specification vessels and strict adherence to safety principles.

Michael Gordon Jolliffe: Several vessels are trading in the Middle and Far East. Four vessels are trading in the U.S. and Caribbean, and three in Africa. We do not expect a major redistribution in the trading of the fleet. The Red Sea safety situation is ongoing, with more Houthi attacks being reported, and it is not common for LPGs in our fleet to cross the Red Sea anyway. Middle East exports best seen for Europe were more likely to be diverted to Asia and replaced by US exports to Europe.

Speaker Change: Yes.

Speaker Change: Oh excuse me seven vessels are trading in the middle and far east.

Speaker Change: Four vessels trading in the U S and Caribbean, Australia and Africa.

Speaker Change: We do not expect a major redistribution in the trading of the fleet.

Speaker Change: The Red Sea safety situation is ongoing with more hootie attacks being reported and it is not common for LPG and our fleet across the Red Sea anyway.

Speaker Change: Middle East exports destined for Europe will more likely be diverted to Asia are replaced by U S exports to Europe.

Michael Gordon Jolliffe: Handy-sized vessels, particularly increase transatlantic trades between the US and Europe. It's more rarely that our vessels cross the Panama Canal to do the U.S.-China route. The delays in the Panama Canal crossing that affected, particularly VLGC vessels, during the beginning of the year have now abated, although with a reduced average number of crossings, and the market for larger vessels is finding a new balance. That being said, we do have an MGC vessel currently loading in Houston that will go through the Panama Canal. Due to its smaller size, there were no delays in booking slots.

Oh handy size vessels, particularly due increased trans Atlantic trade between U S and Europe.

It's more ready that our vessels across the Panama Canal to do the U S. China route.

Speaker Change: The delays in the Panama Canal crossing that have affected, particularly we see vessels during the beginning of the year have now abated.

Speaker Change: Although with reduced average number of crossings and the market for larger vessels is finding a new balance.

Speaker Change: That being said, we do have an M. L E N G. C vessel currently loading in Houston that will go through the Panama Canal.

Speaker Change: Due to its smaller size there were no delays in booking slots.

Michael Gordon Jolliffe: Finally, I would also like to note that we've been increasingly engaged in ammonia trades that our Handys and MGC vessels can carry, and two of our vessels are currently transporting ammonia cargo. I will now turn the call over to Konstantinos Sistovaris for our financial performance. Thank you so much.

Speaker Change: Finally, I would also like to note that we've been increasingly engaged in ammonia trades that are hand is in mtc vessels can carry and two of our vessels are currently transporting about any cargos.

Speaker Change: I will now turn the call over to Constantino sister voice for a finite untrue.

Performance. Thank you so much.

Konstantinos Sistovaris: Thank you, Michael, and good morning to everyone. I will discuss our financial results that were released today. Let's turn to slide 8, where we see a snapshot of the income statement for the first quarter of 2024, against the same period of 2023, even though fleet days were reduced by 15% and we had five fewer vessels. Net revenues after voyage expenses came in at $38.7 million for the quarter, an increase of 14% as a result of higher revenues due to better market conditions, the addition of two larger vessels in our fleet with higher earning capacity, and the reduced voyage costs due to lower spot exposure. It is worth mentioning that 26 out of the 27 vessels in the fleet improved their profitability. Operating expenses were $11.5 million for the quarter, down 21%.

Speaker Change: Thank you Michael and good morning to everyone.

Konstantinos Sistovaris: A better result than expected, mostly due to the 15% decrease in the number of vessels in the fleet. We also note a decrease in the dry docking costs of 1.1 million as no vessels were dry docked during this period, and an increase of 1.4 million in GNA costs as a result of an increase in stock-based compensation. As a result of the increase in revenues and decreases in costs, income from operations increased 80% to 17.5 million for the first quarter of 2024 from 9.7 million last year.

Speaker Change: I will discuss our financial results that were released today.

Konstantinos Sistovaris: Interest and finance costs also increased by 0.5 million year on year because last year's results included some profits from the selling of swap positions due to the debt repayment. The earnings from the investments in the joint venture amounted to $2.6 million versus $8.8 million last year, a significant 6.3 million drop.

Speaker Change: Let's turn to slide number eight.

Konstantinos Sistovaris: The reduction in these profits is due to some profits that were booked in the first quarter of last year from the sale of one vessel, whereas no sale took place in the first quarter of this year. As a result of the above, we ended the first quarter of 2024 with a net income of $17.7 million, compared to $16.8 million for the same quarter of last year, a 5% increase. While on an adjusted basis, net income was $19.1 million versus $17.3 million last year, a 10% increase. Basic and diluted earnings per share for the first quarter were $0.49, and adjusted earnings per share were $0.53.

Speaker Change: Do we see a snapshot of the income statement for the first quarter of 2024.

Speaker Change: Against the same period of 2023.

Speaker Change: Even though fleet days were used by 15% and we had five fewer vessels.

Konstantinos Sistovaris: These were record quarterly profits on top of the record profits of last year's quarter. Looking at our balance sheet on the next slide, our liquidity, including restricted cash, was $83.6 million at the end of the quarter, on par with the December 31st figure. Vessels held for sale that were $34.9 million as of December 31 were nil as of March 31, as these two vessels were sold in January, and the proceeds were used for the delivery of the two medium gas carriers and debt repayment.

Speaker Change: Net revenues after voyage expenses came in at $38 7 million for the quarter.

Speaker Change: An increase of 14% as a result of higher revenues due to better market conditions.

Konstantinos Sistovaris: Also, deposits for vessels that were $23.4 million as of December 31st were nil as of March 31st as the two medium gas carriers were delivered to the company. Vessels' book value increased from 504.3 million to 617.6 million, a significant 23% increase as a result of the addition of the MGC vessels. The book value of our investments in our JVs was $42.3 million, close to the previous quarter for the six vessels. Total assets of the company increased over the three-month period by 8% to $752.9 million.

Speaker Change: Of two larger vessels in our fleet with higher earnings capacity.

Speaker Change: And the reduced voyage costs due to lower spot exposure.

Speaker Change: It is worth mentioning that 26 out of the 27 vessels in the fleet improved their profitability.

Speaker Change: Operating expenses were $11 5 million for the quarter down 21%.

Speaker Change: Better result than expected, mostly due to the 15% decrease in the number of vessels in the fleet.

Speaker Change: We also note the decrease in the dry docking costs of $1 1 million as no vessels were dry docked during this period.

Speaker Change: And the increase of $1 4 million in G&A costs as a result of an increase in stock based compensation expense.

Konstantinos Sistovaris: Moving on to the liability side, the total debt increased by $37.1 million compared to December 31st, to $160.6 million as a result of the $70 million financing during January 2024. But we expect this to come down again in the second quarter as more debt repayments take place. Shareholders' equity increased 3.5%, or $19.1 million, over the three-month period.

Speaker Change: As a result of the increase in revenues and decreases in cost income from operations increased 80%.

Speaker Change: $17 5 million for the first quarter of 'twenty 'twenty four from 9.7 million license here.

Speaker Change: Interest and finance costs also increased by 0.5 million year on year.

Speaker Change: Because in the last year. The results were included some profits from the selling of swap positions due to the debt repayments.

Konstantinos Sistovaris: Concluding our financial commentary with the next slide, 10. We will briefly have a closer look at our debt structure. During 2023, the company very aggressively halved its outstanding debt with over $154 million of debt repayment and then followed in the first quarter of 2024 with prepayments of $30 million and in the second quarter of 2024, another $50 million.

Speaker Change: The earnings from the investment in the joint venture amounted to $2 6 million versus $8 8 million last year.

Speaker Change: A significant $6 3 million drop.

Speaker Change: The reduction in this profit is due to some profits that were being booked in the first quarter of last year from the sale of one vessel.

Speaker Change: Whereas no sale took place in the first quarter of this year.

Konstantinos Sistovaris: Part of the debt being repaid was replaced with a cheaper facility with a longer tenor maturing in 2032 relating to the two medium gas carriers that joined the fleet in January. As there are currently no further CapEx commitments, the company is still considering reducing its debt further, although there are now only four vessels financed, two of which were financed this January. The other two have facilities with tenors expiring in December 2025 and January 2026, and the debt amortization is now reduced to just 9 million per annum, which will allow significantly faster cash flow accumulation going forward.

Speaker Change: As a result of the above we ended the first quarter of 2024 with net income of $17 7 million compared to $16 8 million for the same quarter of last year, a 5% increase.

Speaker Change: While on an adjusted basis net income was $19 1 million.

Speaker Change: Versus $17 3 million last year.

10% increase.

Speaker Change: Basic and diluted earnings per share for the first quarter were 49 and adjusted earnings per share 53 cents.

Speaker Change: These were record quarterly profit on top of the record profit of last year's quarter.

Speaker Change: Looking at our balance sheet in the next slide.

Speaker Change: Liquidity, including restricted cash was at the end of the quarter $83 6 million on par with a December 31st figures.

Speaker Change: Vessels held for sale that were $34 9 million as of December 31st were nil as of March 31st as these two vessels were sold in January and the proceeds were used for the delivery of the two medium gas carriers and debt repayments.

Speaker Change: Also deposits for vessels that were $23 4 million as of December 31st were nil as of March 31st two medium gas carriers were delivered to the company.

Speaker Change: Vessels book value increased from $504 3 million to $617 6 million.

Speaker Change: Significant 23 per cent increase as there is.

Speaker Change: Salt of the addition of the M D C vessels.

Speaker Change: The book value of our investments in our Jv's was $42 3 million close to the previous quarter for the six vessels.

Speaker Change: Total assets of the company increased over the three month period by 8% to $752 9 million.

Speaker Change: Moving onto the liability side, the total debt increased by $37 1 million compared to December 31st.

Speaker Change: Two $166 million as a result of 70 million finance during January 2024.

Speaker Change: But we expect this to come down again in the second quarter as more debt prepayments took place.

Speaker Change: Shareholders' equity increased three five.

5% or $19 1 million over the three month period.

Speaker Change: Yes.

Speaker Change: Concluding our financial commentary with the next slide 10.

Speaker Change: I will briefly have a closer look at our debt structure.

Speaker Change: During 2003 that come as a company very aggressively have to its outstanding debt with over $154 million of debt repayments.

And then followed in the first quarter of.

Speaker Change: 2024, with prepayment of $30 million.

Speaker Change: And the second quarter of 2020 for another $50 million.

Speaker Change: Part of that debt being repaid was replaced with a cheaper facility with a longer tenor maturing in 2032 relating to the two medium gas carriers that joined the fleet in January.

Speaker Change: As currently there are no further capex commitments the company still considering reducing its debt further.

Speaker Change: Although there are now only four vessels financed.

Speaker Change: All of which were financed this January.

Speaker Change: Other tool that have facilities with tenors expiring in December 2025 in January 2026.

Speaker Change: The debt amortization is now reduced to just 9 million per annum that.

Speaker Change: That will allow significantly faster Castro accumulation going forward.

Konstantinos Sistovaris: 23 vessels are unencumbered, 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 19% current. I will now hand you over to our CEO, Harry Vafias, who will discuss the market and the company outlook.

Speaker Change: 23 vessels are unencumbered.

Speaker Change: Sidra advantage if ever there was a need to raise funds.

Speaker Change: On the other hand prepayments have reduced the debt that is hedged with interest rate swaps to 19% currently.

Speaker Change: I will now hand, you over to our CEO, Harry <unk>, who will discuss the market and the company's outlook.

Harry N. Vafias: Moving on to slide 11, LPG exports increased by a strong 4.3% in 2023 and will continue to see exports increasing at 5% in the first quarter of this year. Although we have expected the U.S. to slow its export growth after the cold snap in the beginning of the year, results for the first year show that U.S. exports continued unabated, making 12% year-on-year growth. We expect the U.S. will continue to ship incremental amounts of NGLs in the current year. As we have discussed before, there are logistical issues that have to be solved to meet the increasing volumes.

Harry N. Vafias: Moving on slide 11.

LPG exports increased by a strong four 3% in 2023, and we're continuing to show us pushing cruising at 5% in the first quarter of this year.

Speaker Change: Although we would have expected the U S to slow its export growth after the cold snap in the beginning of the year.

Speaker Change: For the first year showed that U S exports continue unabated.

Speaker Change: Looking at 12% year on year growth, we expect the U S will continue to ship incremental amounts of Ngls in the current year.

Speaker Change: Have discussed before there are logistical issues that have to be solved to meet the increasing volumes, but LPG exporters are already planning ahead to accommodate these incremental volume volumes from Texas.

Harry N. Vafias: But LPG exporters are already planning ahead to accommodate these incremental volumes from Texas and Canada. While the U.S. accounts for over 40% of global exports, exports from the Middle East that had fallen last year seem to have rebounded, and although data is hard to come by, particularly as Iranian exports destined to China seem to be on the rise, we would hope to see other Middle Eastern countries not using the dark fleet ramp up their exports as well. The situation in Europe, as one of the most important ones, remained the same due to the mild winter.

Speaker Change: Uh huh.

Speaker Change: While the U S accounts for over 40% of global exports extra from the middle East that have fallen last year seem to have rebounded and although that is hard to come by particular as Iranian exports to China seem to be on the rise we would hope to see other middle eastern countries.

Using the dark fleet ramp up their exports as well.

Speaker Change: The situation in Europe, as one of the largest importance.

Harry N. Vafias: With lackluster heating demand and petrochemical usage, volumes that were reduced last year seem to have been flat over year-on-year, although inter-regional trade is active. The particularly good news for LPG comes from the two most populous countries, China and India. First quarter numbers show very strong import demand from China, with volumes rising a fantastic 27 year on year. India, a growing economy of 1 billion plus people, where 45% of LPG demand is for household use, has, as recently as March, decided to extend subsidies for LPG, and the government, facing a general election soon, is supportive of further penetration of LPG as an alternative fuel.

Speaker Change: The same due to the mild winter with luck lackluster heating demand in petrochemical usage volumes that were reduced last year.

Speaker Change: It seemed to have been flat over a year on year, although intra regional trade is active.

Speaker Change: Particularly good news for LPG come from the two most populous countries, China and India first quarter numbers show, a very strong import demand from China with volumes rising a fantastic 27% year on year.

Speaker Change: India growing economy, a 1 billion plus people, where 45% of LPG demand is for household yours.

Speaker Change: As recently as March decided to extend subsidies for LPG and the government government facing German electric Sean is supportive of further penetration of LPG as fuel.

Harry N. Vafias: This bodes well for the future demand for one of the fastest growing economies. In China, the driving force for LPG demand is, of course, the expansion of PDH capacity for the production of propylene. Utilization rates for the first quarter for this plant seem to have remained subdued, around 65% in March, due to the low profit margins, although a reduction in quoted LPG prices in the last couple of months is positive for higher margins and increasing demand.

Speaker Change: This bodes well for the future demand from one of the fastest growing economies.

Speaker Change: In China, the driving force for LPG demand is of course, the expansion of <unk> capacity for the production of propylene.

Utilization rates for the first quarter for this plan seems to have remained subdued.

Speaker Change: 5% in March due to the low profit margins, although reduction in quarter LPG prices in the last couple of months are positive for higher margins and increasing demand helped.

Harry N. Vafias: LPG remained a competitive fuel compared to NAFTA during this period, and during last year, 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 this year and 6 million tons in 2025.

Speaker Change: LPG remainder competitive fuel compared to naphtha during this period.

Speaker Change: During last year nine PVH plants nine new pdx plants came on stream.

Speaker Change: <unk> 5.4 million tons of capacity, our reports show that another 7 million tons to be added this year and 6 million tons in 2025.

Harry N. Vafias: Even if these are too optimistic given the usual delays and only an estimated 8 to 9 million tons added over the next two years, that's still a 50% capacity addition from today's level. On slide 12, we present some of the key fundamentals in our shipping markets, commencing with time charter rates. Rates of error remained flat during the first quarter, albeit at historically high levels, with the exception of the larger-sized ships, the slowest light drop.

Even if these are too optimistic given the usual delays and only an estimated eight to 9 million tons of added over the next few years, that's still at 50% capacity addition from today's level.

Speaker Change: On slide 12 represent some of the matters are now shipping markets commencing with time charter rates right.

Rachel: Rachel we're already remained flat during the first quarter, albeit at historically high levels with the exception of the larger size ships the slowest slight drop.

Harry N. Vafias: Looking at the small LPG trade west of Suez, the spot market during Q1 was, on average, holding up at firm levels. We saw limited vessel availability and little idle time amongst owners. On the period side, we continue to see good activity in Q1, with charters keen to secure forward tonnage capacity and rates keeping firm. TC rates for the larger pressurized ships are now at around all-time highs.

Rachel: Looking at the small LPG trade west of Suez the spot market. During Q1 was an average holding up at firm levels will show limited vessel availability, a little idle time on most owners.

Peter: Peter Charter continued to show good activity in Q1 with charter skin to secure forward donuts capacity and rates keeping firm.

Peter: <unk> for the larger pressurized ships are now around all time highs.

Harry N. Vafias: East of Suez, we saw a quiet spot market with little action, more or less on par with Q4 of last year. For the handysize and MGC vessels, following a very firm Q4, where the VLGCs pulled up the MGCs, and the MGCs pulled up the handys, Q1 became a bit of a disappointment for the owners after the collapse of the LGCs at the beginning of the quarter. LPG trading dropped significantly, and Pentium trading remained quiet.

There's no shortage of a short quiet spot market with little action more or less on par with Q4 of last year for the hundred thousand names you see vessels. Following a very firm Q4, what are the real juice is pulled up the <unk> and VM just pull up the hand is Q1 became a bit of a disappointment for the owners after the collapse of the.

Peter: I'll, just say at the beginning of the quarter.

Peter: LPG trading dropped significantly and pet Chem trading remained quiet.

Harry N. Vafias: As a consequence of a softening spot market, the period market also lost steam, and charters started to pull back on their period interest. However, a market controlled by a very limited number of owners, and time-short ideas have held up reasonably well, despite the reduced number of inquiries. With a more long-term view, we continue to stress 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 continues to be 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.

Peter: As a consequence of a softening spot markets appear Margaret also low steam and charter started to pull back on their period interest is high.

Peter: However market controlled by a very limited number of owners and time charter rates have held up reasonably well despite the huge number of inquiries.

Peter: More long term here, we continue to stress on the fundamentals for our 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 continues to be limited due to the firm markets. We continue to see only a handful of vessels being ordered not enough to keep the supply demand.

Harry N. Vafias: Similar picture in the Hunnicites fleet, where there are only 5 ships to be delivered over the next 2 years. On the other hand, in the MGCs, there's indeed a high order book that has grown further since our last call to over 30 percent. But that's especially for vessels that will now join the fleet in 26 and even 27. Until then, over the next two years, supply is limited, and our vessels ordered two years ago are now in the water earning money.

Peter: Balance similar picture on the handsets fleet, where there are only five ships to be delivered over the next two years on the other hand in the Amtrust uses indeed, the high order book.

Peter: That grew further since our last call to over 30%, but that's especially for vessels that will now join the fleet in 2006, and even 27 until then over the next two year supply is limited and our vessels ordered two years ago.

Peter: I know in the water, earning money.

Harry N. Vafias: The driving force for the increase in orders for medium gas carries as well as VLGCs is also related to ammonia trading and the fact that ammonia seems to be becoming a serious contender for the future fuel of choice that will power the next generation of really environmentally friendly shifts to replace gas oil.

Peter: Driving force for the increase in ordering of medium gas carriers as well as religious sees it was also related to ammonia trading and the fact that ammonia seems to becoming a serious contender for the future fuel of choice that will power. The next generation of really environmentally friendly shifts to replay to replace gasoline.

Harry N. Vafias: On slide 13, we are outlining some key variables that may affect our performance in the quarters ahead. In the short term, we are entering the seasonally weaker summer months, and we would expect activity to slow somewhat, although the market is still firm as we speak. We continue to remain optimistic on the longer term for the reasons analyzed before. Today we announce another record-breaking quarter; profits of $17.7 million for Q1 are an all-time high for a company in the 20 years since its inception.

Speaker Change: On slide 13, we are outlining some key variables that may affect our performance in the quarters ahead in the short term, we're entering the seasonally weaker summer months, and we would expect activity to slow somewhat although the market is still firm as we speak.

Speaker Change: Tenure to remain optimistic on the longer term for the reasons analyzed before.

Speaker Change: Today, we announced a record breaking quarter profits of $17 7 million for Q1 are an all time high for our company in the 20 years since its inception.

Harry N. Vafias: These exceptional results were mainly driven by high revenues and reduced expenses, and the two new MGC vessels that were added to the fleet immediately started producing results. The reduced share count as a result of the share buybacks further enhanced the bottom line on the earnings per share basis. In the current quarter, we have so far repaid over $53 million of debt and now have 23 unencumbered or debt-free vessels and a debt ratio below 15%.

Speaker Change: Exceptional results were mainly driven by higher revenues and reduced expenses and the two new ones you see vessels that were added to the fleet immediately started producing results.

Speaker Change: Is there a reduced share count as a result of the share buybacks further enhance the bottom line on the earnings per share basis.

Speaker Change: The current quarter, we have so far it paid over $53 million of debt and now have 23 unencumbered or debt free vessels and our debt ratio below 15%. We continue to benefit from the positive market backdrop, and we look forward to continue rewarding our shareholders trust with more positive quarters.

Harry N. Vafias: We continue to benefit from the positive market backdrop, and we look forward to continuing to reward our shareholders' trust with more positive quarters. And even though our share price has climbed significantly over the last year as a result of record profitability, we believe we continue to be a sound, still undervalued investment not just because we're optimistic about the market and have been producing results but also because we're trading at a discount in terms of price to NAV and price to earnings.

Speaker Change: Even though our share price has climbed significantly over the last year.

Speaker Change: Our record profitability. We believe we continue to be a sound still undervalued investment not just because we are optimistic on the market and have been producing results, but also because we're trading at a discount in terms of price and price to earnings.

Harry N. Vafias: We've now reached the end of the presentation. We'd like to thank you for joining us on our conference call today and for your interest and trust in our company. And we look forward to having you with us again on our next call for our second quarter results in August.

We've now reached the end of the presentation, we'd like to thank you for joining us at our conference call today and for your interest and trust in our company and we look for the filing you again with US at our next call for our second quarter results in August.

Operator: This concludes today's conference call. Thank you all for participating. And I'll just get this on. Thank you.

Speaker Change: This concludes today's conference call. Thank you all for participating you may now disconnect.

Speaker Change: Great.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].