Q1 2025 C3is Inc Earnings Call
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Good morning, everyone and welcome to our shipyard, Yes first quarter of 2025 earnings conference call and webcast.
You may listen to the Odyssey of the company.
Joining me on the call today is our CFO and have been there 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 financial performance and are based on current expectations and assumptions, which by nature are inherently uncertain and outside the Companys control.
At this stage if you could all take a moment to read the disclaimer on slide two of this presentation.
I would also like to point out that all amounts quoted unless otherwise clarified are implicitly stated in U S dollars.
Today, we released our earnings results for the first quarter of 2005. So let's proceed to discuss these results and update you on the Companys strategy and the market in general.
Please turn to slide three where we summarize and highlight the companys performances, starting with our financial highlights for.
For the first quarter of 2025, we achieved the 90 income of $8 million, which is an increase of 109% from Q1 2024.
We reported net revenues of $5 8 million, which is a decrease of 41% compared to the first quarter of <unk> 24. This.
This was exclusively due to the decrease in charter rates.
Our first tanker the African to quit.
Which contributed 72% of the total revenues at TCE rates, 5% lower than the rate of Q1 2024.
The TCE rates for the whole fleet was 56% lower than the rate for the first quarter of 2024.
Our cash balance was $15 7 million, an increase of 25% from the year end 2024.
In Q2, 2025, we paid off the remaining 90% balance that was due on the echo Spitfire. So we have met all our capex requirements, which totaled $59 2 million without resorting to any bank financings.
None of our vessels are from Chinese shipyards. So we are not affected by the implementation of the new tariffs by the Trump administration.
Slide four shows the dry bulk trade by the end of the first quarter of 2025.
The steel industry in iron ore market, while navigating the regimen in our phase with shifting dynamics influenced by economic trends structural changes in environmental pressures over.
Over the long term the iron ore markets forecast to enter a multiyear downturn with price expected to decline.
This outlook reflects a structural shift in China's economy away from steel intensive sectors and an increased focus on sustainability globally.
A global push for Decarbonization is reshaping the steel industry and shifting towards Green steel.
Initiatives like the EU carbon border adjustment mechanism and voluntary corporate commitments are accelerating disease.
Overtime. These structural transition could lead to a peak in iron ore demand earlier than anticipated presenting downside risk to long term projections.
As green steel production gains traction in global iron ore out of <unk>, the market will likely experience solutia supply demand balance.
The global grain trade in 2025 is expect to exhibit steady, but uneven growth driven by a mix of regional demand patterns geopolitical factors and weather related challenges.
China traditionally significant player in the global grain market is expected to slow slower growth in grain reports high inventories in the Mexican agricultural policy adjustments could reduce each reliance on international markets.
Slide five shows the dry bulk opportunities ahead in the handy size rate performance.
Rai bulk shipping sector is expect to face lower demand growth in the coming year, driven by a variety of uncertainties.
Handy sized demand remains reasonably healthy, but it heavily depends on steel related experts, making valuable to a potential slowdown in China still sector.
Global dry bulk trade in ton miles is forecast to grow by one 5% in 2025 slightly lagging fleet growth of three 1%.
Chinese market demand continues to be critical via <unk> characterized by mixed signals a record high imports had a weighted inventories and challenges in the steel sector.
While recent economic stimulus measures may provide support significant downside risks persist.
Environmental regulations are set to play a more influential role in market dynamics.
Initiatives, such as low slower vessels operate in speed retrofitting for energy saving technologies increased vessel demolitions and growing emphasis on sustainability will likely affect supply site conditions.
Additionally, the global push for Greener shipping practices is expect to increase demand for certain cargos, while lumpy finding efficiencies and competition across the sector.
Despite the challenges the dry bulk market in 2020 five is expected to benefit from a relatively balanced supply demand dynamic.
Evolving environmental policies and industrial the patients are likely to moderate potential downturn positioned the sector for gradual but let's say in transformation.
Chinas monetary policies, and India's growth trajectory or expect to offer areas of uncertainty, particularly in commodities tied to infrastructure industrial activity.
Slide six shows the Aframax tanker market fundamentals the global economic environment is poised for a year of mixed signals in 2025, presenting both risks and opportunities for the oil tanker sector.
Economic shocks financial market in response to an evolving policy measures are expected to shape the outlook contributing to our core shoes, yet dynamic landscape.
Global growth and inflation challenges are likely to be characterized by slower global economic growth and persistent inflation pressures.
Key factors include ongoing vulnerabilities in global supply chains geopolitical uncertainties.
<unk> financial conditions across major economies as well as the ongoing environmental regulation regarding EU ETS CIA in exa.
These headwinds are expected to influence global energy demand.
With rupee FX on oil trade flows and tanker utilization.
China offers modestly optimistic outlook. Despite its long term trend of slowing growth for the first time since 2010 timer is expect to adopt a more appropriate to use monetary policy stance signaling significant efforts to rejuvenate the economic activity.
Allison makers have focused some extraordinary countercyclical measures to stimulate consumption enhancing investment efficiency and expand domestic demand.
These initiatives are expected to support crude oil and refined product imports particular for use in industrial and infrastructure sectors.
As developments can provide a stabilizing influence for global trade benefited in the tanker market.
Adding to this outlook the recent depreciation of the one driven by the China and easing monetary policy and increased fiscal spending could have significant implications for the oil tanker sector.
If we get one.
Raises the cost of oil imports, which are predominantly priced in U S dollars potential.
Potentially temporary in China's crude imports volume in the near term.
However, these cost pressures are likely to be offset by China strategic focus on security and continued investment domestic infrastructure.
Furthermore, the depreciation may bolsa experts to refined products supporting outbound tanker demand.
As part of the sanctions imposed on the Russian Federation as a result of the restaurant agreement were on September <unk> 2022, Finance ministers of the G. Seven group of Nations agreed to cap the price of the Russian oil and petroleum products in an effort intended to reduce process ability to finance its warranty claim.
While at the same time hopping to cope further increases to the 'twenty, one 'twenty two inflation shirts.
<unk> guidance, considering collectively tighten in oil price cap on RASM petroleum in an effort to cut most crucial oil revenues as the war in Ukraine right Sean.
Trump's type wars have prompted move in.
In oil prices and has made the current price cap pointless.
Ausiello Crane conflict is expect to continue being a factor through March of 2025.
This means Russia will likely have continued Belgium, stricter sanctions potentially struggling to sell each oil during 2025.
As production and refining capacity could also remain targets for Ukrainians around tax.
Slide seven shows the handy size fleet agent growth.
Mobile handy size fleet now stands at 3151 vessels of these 583 vessels are over 20 years of age accounting for 31% of the total number of vessels.
We can start entirely of 3113 vessels. The current fleet represents a change of one 2% in vessels numbers over the year so far.
Over the first quarter of 2025, the fleet have increased by 13 vessels, while around 165 million deadweight was added to the fleet total carrying capacity.
The global Handy size order book now stands at 231 vessels of these 96 vessels are still scheduled for delivery within 25, which is equivalent to 41, 6% of the total number of vessels currently on order.
Currently the order book to fleet ratio stands at seven 3%. Following the conclusion of the first quarter deliveries are holding at levels above the total number of removals from the fleet, creating a net gain in the fleet equivalent to one 2%.
This increase is on par with the chains, noting the quarter Pryor, while compared to last year. There was a decrease in the trend noted.
Slide eight shows the Aframax tankers facilitates growth in order book the global Aframax LR. Two fleet currently stands at 1174 vessels with an average age of 13 three years.
Of these 195 vessels are over 20 years of age accounting for 16, 6% of the total number of vessels.
The order book now stands at 215 vessels with 41 vessels scheduled for delivery in 2025, which is equivalent to 90% of the total number of vessels on order.
Currently the order book to fleet ratio stands at 18% while in comparison to 30% of the fleet is over 25 years of age and another 40% is between 2024 years rates.
This translates to a ratio of order book two vessels over 20 years of 110%.
Slide nine shows the current fleet of Ccas.
<unk> also operates a fleet of freehand size dry bulk carriers and one aframax tanker may 'twenty 'twenty four the combined took delivery of 30.
The 33000 deadweight dry bulk carrier of the Echo Spitfire, bringing the total fleet capacity to 213000 deadweight with an average age of $14 three years.
All vessels have harder ballast water system sold and installed.
<unk> capital commitment during 2025 is a special survey of the tanker entrepreneur to schedule in Q3 2025 all.
All the vessels are unencumbered and currently employed on short to medium term period charters and spot volumes.
One of the vessels were built in Chinese shipyards, hence not affected by the newly imposed tariffs.
Slide 10 shows a sample of international Charterers, with whom the management company has developed strategic relationships and has experienced repeat business.
Repeat business highlight the confidence our customers have for our operations and the satisfaction of the services we provide.
The key to maintain our relationships with these companies our highest standards of safety and reliability of service.
Speaker Change: I'll now turn over the call to move up India for our financial performance.
Monika: Thank you Amanda and good morning, everyone. Please turn to slide 11, and I will go through our financial performance for the first quarter 'twenty 'twenty five.
Monika: We reported total revenues of $8 7 million for the first quarter 25, compared to 12 8 million for the first quarter of 'twenty for a reduction of 2%.
Monika: <unk> exclusive retreat with a decrease in charter rates.
Monika: Our aframax tanker the <unk>.
Monika: <unk>, which contributed 72% to record total revenues had TCE rate that was 55% lower than the rate for Q1 'twenty for that.
Monika: The TCE rate for the whole fleet was 56% lower and the rate for Q1 'twenty four.
Monika: Voyage costs Q1, $75 million to $8 million the same as for Q1 'twenty four.
Monika: Vessels operating expenses of $2 1 million were reported for Q1 dollars 95.
Monika: Compared to $1 8 million for Q1 24.
Monika: This is the impact of the ACA Spitfire that was included in the numbers for Q1, 'twenty five and not in tier one accounts for.
Monika: G&A expenses were 653000 in Q1, 25 and related mainly to the stock based compensation cost.
Monika: In Q1 2000 for the balance was 141 5 million sorry.
Monika: And included the cost related to the two share of.
Monika: That took place at the beginning of 'twenty four.
Monika: Depreciation increased from $1 4 million in Q1, 24 to $1 6 million in Q1 25 due to the increase in the average number of vessels.
Monika: A noncash item of $6 9 million gain was reported for Q1 25 as compared to a loss of 630000 for Q1 'twenty for.
Monika: This item represents that unrealized gain loss on the SaaS value of non exercise in wireline.
Monika: This noncash item.
Monika: Due to the change in the fair value of wire and that is the issuance date versus March 31st 2025.
Monika: As a result of the above we reported a net income of $8 million and then adjusted net income of $1 2 million for Q1 hundred 95.
Monika: An increase of 109% on the net income and a decrease of 74% and the adjusted net income compared to Q1 'twenty four.
Monika: Turning to slide 12 for the balance sheet, we had a cash balance of $15 7 million compared to $10 6 million at the end of <unk> 74, an increase of 25%.
Monika: In Q2, 2005, we paid off the remaining 90% payment balance.
Monika: On the handy sized carrier Echo Spitfire plus the banker.
Monika: <unk>.
Monika: <unk> onboard.
Monika: Total of $15 1 million.
Monika: Other current assets mainly include charterers receivable of 3 million for Q1 25 compared to $2 8 million at December 24, an increase of 10%.
Monika: As well as inventories of $1 6 million compared to <unk> 9 million at December 24.
Monika: The vessels net value of $82 5 million or 44 vessels less depreciation.
Monika: Trade accounts payable of $1 8 million AR balances strategic suppliers and brokers.
Monika: Payable to related party of $17 6 million annual represent the 90% balanced on the Iqos decline of $14 6 million.
Monika: 3 million, creating a management company Brave maritime.
Monika: Both of these items were fully paid for in April 25.
Monika: A warrant liability of $3 6 million was recorded a drop of 66% from the balance at year end 2004, when it was at $10 4 million.
Monika: In Q1, 'twenty five the warrant adjustment was a gain of $6 8 million.
Monika: The balance at year end 24 was $10 4 million, hence, resulting in a net value of $3 6 million.
Monika: Concluding our presentation on slide 13, we outlined the key variables that will assist us progress rate our company's growth.
Monika: Owning a high quality fleet reduces operating costs improved safety and provides a competitive advantage in securing favorable charters.
Monika: We maintain the quality of the vessels by carrying out regulate infections, therefore, while import NFC and adopting a comprehensive maintenance program for each vessel.
Monika: None of our vessels were built from Chinese shipyards.
Monika: The proposed U S salaries of all Chinese that shapes would be a significant positive shift for our fleet.
Monika: The company's strategy is to follow a disciplined growth with in depth technical and condition assessment preview.
Monika: Equity issuances will continue.
Monika: Management is continuously seeking a timely and selective acquisition of quality non Chinese built vessels with current focus on short to medium term charters and spot voyages.
Monika: We always charter to high quality charterers, such as commodity traders industrial companies and oil producers and refineries.
Monika: The company maintains an adequate level of cash flow and liquidity that will enable us to act instantly as the windows of growth and opportunities open.
Monika: Despite being in operation for less than two years, and having increased our fleet by 234% since inception. The company has no bank debt.
Monika: No interest what college buyback affiliated silos on the purchase prices of the <unk> and the Echo speak fire.
Monika: From July 2023 to date, we have repaid all our capex obligations totaling $59 2 million without resorting to bank loans.
Dr. <unk>: At this stage our CEO, Dr. <unk> will summarize the concluding remarks for the periodic plant maintenance.
Dr. <unk>: For the first quarter of <unk> 25, we reported a net income of $7 9 million an increase of 109% from the Q1, two and three and four but our revenues decreased by 32% due to the drop in PC rates.
Dr. <unk>: By Q2, two and 25, we have met all our capex obligations without resorting to bank loans, we have there for more than trebled, our non Chinese build fleet capacity without incurring antibody debt.
Dr. <unk>: The global economic environment is poised for a year of mixed signals in 2025 with risks and opportunities influenced industry sector.
Dr. <unk>: Economic shocks financial market responses and the volume policy measures are expected to shape the outlook contributing to a cautious yet dynamic landscape.
Dr. <unk>: While global growth may be moderate and inflationary pressures persist.
Dr. <unk>: These challenges wholesale create room for market adjustments and new trade patterns.
Dr. <unk>: <unk> will adopt this evolving dynamics by focusing on beverage application and aligned with the growing emphasis on sustainable practices, which are poised to reshape trade in the coming years.
Dr. <unk>: With careful navigation and the ability the company is well positioned to leverage reasonable growth drivers and evolving economic dynamics to maintain resiliency in the years ahead.
Dr. <unk>: We would like to thank you for joining us today and look forward to having you with US again at our next call for the results of the second quarter of 2025.
Dr. <unk>: Yes.
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