Q1 2025 StealthGas Inc Earnings Call
Okay.
Operator: Good day and thank you for standing by.
Peter: Good day, and thank you for standing by welcome Peter.
Operator: Welcome to the StealthGas first quarter 2025 results conference call and webcast. At this time, all participants are in listen-only mode. Please be advised that today's conference is being recorded.
Still forgotten first quarter 'twenty to 'twenty five results conference call and webcast at this time all participants are in listen only mode.
Please be advised that today's conference is being recorded.
Operator: I would now like to hand the conference over to our speaker today, Michael Jolliffe, Chairman of the Board.
Peter: I would now like to have a conference over to your speaker today, Michael Jolliffe.
Michael Jolliffe: Please go ahead. Thank you very much, Nadia.
Speaker Change: Chairman of the Board. Please go ahead.
Thank you very much an idea a good morning, everyone and welcome to our first quarter of 2025 earnings conference call and webcast.
Michael Jolliffe: Good morning, everyone, and welcome to our first quarter 2025 earnings conference call and webcast.
Michael Jolliffe: I'm Michael Jolliffe, for those who don't know me, Chairman of the Board of Directors.
Michael Jolliffe: I'm Michael Jolliffe.
Naomi: Naomi cabinet the board of directors.
Michael Jolliffe: Joining me on our call today, as usual, is our CEO, Harry Vafias, 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, please take a moment to read our disclaimer on slide 2 of this presentation. Risks are further disclosed in StealthGas filing with the Securities and Exchange Commission.
Speaker Change: Joining me on our call today as usual is out.
Speaker Change: How are your best guess to discuss the market and company outlook I'm Konstantinos sister varieties to discuss the financial aspects.
Naomi: 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.
Naomi: So please take them over to read our disclaimer on slide two of this presentation.
Naomi: Risks are further described in cell cast filing with the Securities and Exchange Commission.
Michael Jolliffe: So let's proceed with the presentation, starting with some highlights on slide three.
Naomi: So let's proceed with the presentation, starting with some highlights on slide three.
Michael Jolliffe: Today, we released our results for the first quarter of 2025. It was another successful quarter in what can be described as a tumultuous market. We generated $42 million in revenues during the first quarter, compared to $41.6 million last year, and $43.5 million in the previous quarter, demonstrating resilience in terms of commercial operations. Adjusted net income for the first quarter of 2025 was $16.1 million, similar to the fourth quarter of 2024, albeit somewhat lower than the first quarter of 2024, mostly due to increased expenses, as shall be discussed later on. In terms of earnings per share, on an adjusted basis, these were 44 cents for the quarter.
Naomi: We released our results for the first quarter of 2025.
Naomi: It was another successful quarter and what can be described as a tumultuous market.
Naomi: We generated $42 billion in revenues during the first quarter compared to 41 6 million last year and $43 5 million in the previous quarter, demonstrating resilience in terms of commercial operations.
Naomi: Adjusted net income for the first quarter of 2025 was $16 $1 million similar to the fourth quarter of 2024, albeit somewhat late in the first quarter of 2024, mostly due to increased expenses I shall be discussed later on.
Naomi: In terms of earnings per share on an adjusted basis. These were 44 cents for the quarter.
Michael Jolliffe: In this volatile environment, our high period coverage allowed us to sustain the high profitability we have been experiencing over the past year for yet another quarter. In terms of our strategic objectives, we are close to completely deleveraging the company. We have reduced debt by $54 million this year, bringing the current debt level close to just $30 million currently, while maintaining a free cash balance of more than twice that figure. So the company is now debt-free. All the vessels in our fully owned fleet of 31 ships are debt free except for just one vessel that currently has a mortgage.
Naomi: In this volatile environment, a high period coverage allows us to sustain the high property profitability, we have been experiencing over the past year for yet another quarter.
Naomi: In terms of our strategic objectives, we are close to completely deleveraging the company.
Naomi: We have reduced debt by $54 million this year, bringing the current debt level close to $30 million currently well, maintaining a free cash balance of more than twice that figure.
Naomi: So the company is now debt free.
Naomi: All the vessels are now fully owned fleet of 31 ships are debt free except for just one vessel that currently has a mortgage.
Michael Jolliffe: Deleveraging also means that going forward we are accumulating cash much faster.
Naomi: Deleveraging also means that going forward, we are accumulating cash much faster.
Michael Jolliffe: With regards to our share repurchase programme, during the last call we announced that we would be authorising additional share repurchase. And since then, management has spent approximately $1.8 million in buying back shares in what we consider a sound use of our liquidity, given that the stock continues to trade at a steep discount to net asset value. We are further delivering on our strategic priorities by keeping a visible revenue stream. It was difficult commercially to expand on this strategic objective as the sentiment was not there. But we have managed to maintain period coverage for 2025 of 70% of our fleet days and have now secured over $165 million in future revenue.
Naomi: With regards to our share repurchase program during the last call, we announced that we would be authorizing additional share repurchases and since then management has spent approximately $1.8 million in buying back shares and what we consider a sound use of our liquidity, giving given the stock.
Naomi: Used to trade at a steep discount to net asset value.
Naomi: We are further delivering on our strategic priorities by keeping a visible revenue stream.
Naomi: It was typical kabaddi actually to expand on this strategic objective as the sentiment was not bad but we have managed to buy time period coverage for 2025, 70% of our fleet days.
Naomi: And and have now secured over $1 $165 million in future revenues.
Michael Jolliffe: In terms of our fleet, the strategy, which is to conservatively diversify and renew, we saw some activity later. During the first quarter, one joint venture vessel was sold, as previously discussed. In April, we found a buyer for another one of our vessels, the Gas Cerberus, that we expect to deliver in June. Then, last week, we came into an agreement with our joint venture partners to acquire their share in two vessels that we jointly own, the Gas Haralambos and the Eca Lucidis. and we also expect this to conclude in June so that our fleet will see a net increase by one vessel to 29.
Naomi: In terms of our fleet the strategy, which is to conservatively diversify and renew we saw some activity lately.
Naomi: During the first quarter, one joint venture vessel was sold as previously discussed.
Naomi: In April we found a buyer for another one of our vessels the gas Bruce that we expect to deliver in June.
Naomi: And then last week, we came into an agreement with our joint venture partners to acquire their share in two vessels that we jointly own the gas charalambous and the exclusivity.
Naomi: And we also expect this to conclude in June so that our fleet will see a net increase by one vessel to 'twenty nine.
Michael Jolliffe: We will continue to look for opportunities to sell some older tonnage and possibly replace with newer tonnage.
Naomi: We will continue to look for opportunities to sell some older tonnage and possibly replaced with newer tonnage.
Michael Jolliffe: Let us move on to slide four for some more details on our fully owned fleet employment as it looks today. Just like in our previous call, period interest from charterers was relatively low and mostly focused in Europe. As a result, we only concluded three period charters, two of which were extension. One was for six months, and the other two for one year duration. All three related to trades in the West. That currently leaves us with five vessels operating in the spot market, two more vessels than in our previous call. Two of the vessels in the spot market are the larger HandySight.
Naomi: Let's move on to slide four for some more details on our fully owned fleet employment as it looks today.
Naomi: Just like in our previous call period interest from charterers with relatively low and mostly focused in Europe.
Naomi: As a result, we only concluded three period charters two of which were extensions.
Naomi: One was for six months and the other two for one year duration, all three related to trades in the west.
Naomi: That currently leaves us with five vessels operating in the spot market to more vessels than in our previous call.
Naomi: Two of the vessels in the spot market are the larger sizes.
Michael Jolliffe: The company's chartering strategy is to fix on period charters when possible and profitable, so we are looking to extend the duration of our charter. Although a couple of ships were re-delivered overall, we have managed to maintain the visibility of our earnings to a high 70% of available days for 2025, and have secured about $70 billion in revenues for the remainder of this year. One year forward, coverage is at 60%. Total revenues secured for all future periods up to 2027 were reduced at $165 million. During the first quarter, one vessel entered dry dock towards the end of March, and we have scheduled dry dockings for three more vessels for the remainder of the year.
Naomi: The company's chartering strategy is to fix some period charters when possible and profitable. So you are looking to extend the duration of our charters.
Naomi: Well a couple of ships were re delivered a row, we have managed to maintain the visibility of our writings to a high 70% of available days for 2025 and have secured about $70 billion in revenues for the remainder of this year.
Naomi: One year forward coverage is at 60% total revenues secured for all future periods up to 2027 were reduced to $165 million.
Naomi: During the first quarter, one vessel entered dry dock towards the end of March and we have scheduled dry dockings for three more vessels for the remainder of the year.
Michael Jolliffe: It is a fairly light year in terms of drainage.
Naomi: It is a fairly light here in terms of dry dockings.
Michael Jolliffe: In terms of our fleet geography presented in slide five, our vessels are mainly engaged in regional trades, short trips that can last just a couple of days from load port to destination. delivering gas to customers from major coastal ports down to draft-restricted destinations inside rivers. We continue to focus the majority of our fleet over 55% west of Suez in Europe, particularly in the northwest and in the Mediterranean. The remainder of our fleet is evenly scattered around the globe. larger vessels, that is the handy sizes in the MGCs, do intercontinental voyages, and for example we have a couple more vessels in the US at this time that are set to load in the US Gulf and discharge their cargo in Europe.
Naomi: In terms of our fleet geography presented in slide five our vessels are mainly engaged in regional trades short trips that can last just a couple of days from local to destination.
Naomi: Delivering gas to customers from major coastal goes down to draw restricted destinations inside rivers.
Naomi: We continue to focus the majority of our fleet.
Naomi: 55% West of Suez in Europe, particularly in the northwest and in the Mediterranean.
Naomi: The remainder of our fleet is evenly scattered around the globe.
Naomi: Our larger vessels. So that is the handy size is in the <unk> to Intercontinental voyages and for example, we have a couple more vessels in the U S. At this time that is set to load in the U S Gulf and discharge that Targa in Europe.
Michael Jolliffe: It is telling that in the first quarter of 2025, the US accounted for 63% of imports in Northern Europe, up from 55% in the previous quarter.
Naomi: It is telling that in the first quarter of 2025, the U S accounted for 63% of imports and northern Europe.
Naomi: 55% in the previous quarter.
Michael Jolliffe: We believe that in the short term... The market will continue to pay premium rates west of Suez as there continues to be a shortage of suitable, well-maintained vessels in Europe. European ports and charters adhere to very strict regulations on vessel conditions and safety. in addition to recently imposed environmental regulations related mainly to carbon emissions, a situation favouring established owners or owners with good management records. As a result, older vessels that are actually a high percentage of the overall pressurised LPG fleet are not always suitable for European trades and can more easily find employment in the Far East.
Naomi: We believe that in the short term.
Naomi: The market will continue to pay premium rates west of Suez as there continues to be a shortage of suitable well maintain vessels in Europe.
Naomi: European imports and charterers adhere to very strict regulations on vessel conditions and safety Records.
Naomi: In addition to recently imposed environmental regulations related mainly to carbon emissions are situations favoring established owners or owners with good management Records.
Naomi: As a result older vessels that are actually a high percentage of the overall <unk>.
Naomi: <unk> LPG fleet, not always suitable for European trades, and can more easily find employment in the far east or other places where regulations and office demanding.
Michael Jolliffe: or other places where regulations are not as demanding.
Michael Jolliffe: In relation to the Red Sea situation, there have been no attacks recently and things are getting back to normal, leading to more vessels crossing the Suez Canal. This could lead to an increase in Middle Eastern exports going to the Mediterranean and in fact we have recently been engaged in such a trade. We should also mention that over the last year, we have been increasingly engaged in ammonia trades that our Handys and MGC vessels can carry. We believe there is great potential in ammonia trading, although for the time being, it's still in relation to fertilizer production, and what volumes may be used for fuel production remains to be seen.
Naomi: In relation to the Red Sea situation there have been no attacks recently and things are getting back to normal leading to more vessels crossing the Suez Canal.
Naomi: This could lead to an increase in middle eastern exports guiding to the Mediterranean and in fact, we have recently been engaged in such a trade.
Naomi: We should also mention that over the last year, we have been increasingly engage the ammonia trades that are hand is in Mg sea vessels can carry.
Naomi: We believe there is great potential in EMEA trading although for the time being it's still in relation to fertilizer production and what volumes may be used for fuel production remains to be seen.
Michael Jolliffe: Finally, I should mention, as far as it relates to the US port fee policies, that it has always been our policy to acquire assets that have been built in the most reputable and highest quality yards, even if we had to pay more for them. As such, the majority of our vessels are built in Japan and some of the larger ones in Korea. No vessel in our fleet was built in China.
Naomi: Finally, I should mention as far as it relates to the U S pork.
Naomi: Policies that he has always been our policy to acquire assets that are being built at the most reputable and highest quality yards, even if we had to pay more for them.
Naomi: As such the majority of our vessels are built in Japan, and some of the larger ones in Korea.
Naomi: No vessel in our fleet was built in China.
Michael Jolliffe: Inside Six, I will update you on our joint venture investment. Starting in 2019, we have, through two joint ventures, invested in nine vessels, four small gas carriers and five medium gas carriers, and through the course of the year, with the joint ventures being more opportunistic plays, sold most of these, including one that we took back in our own fully-owned fleet last year. During the course of this year, one pressurised vessel was sold in January. The debt on the two remaining pressurised vessels was repaid in March. As of March 31st, our investment consisted of just three vessels.
Naomi: Inside six I will update you on our joint venture investments.
Naomi: Starting in 2019, we have through two joint ventures invested in nine vessels.
Naomi: The small gas carriers and five medium gas carriers and through the course of the year with the joint ventures being more opportunistic plays so most of these including one that we took back in our own fully owned fleet last year.
Naomi: During the course of this year one pressurized vessel was sold in January the deaths on the two remaining pressurized vessels was repaid in March.
Naomi: As of March 31st our investment consisted of just three vessels.
Michael Jolliffe: Two pressurized LPG carriers and one medium gas carrier. with the book value of the investment being £27.3 million. Out of the three vessels, two of these are operating in the spot market, while the one pressurised vessel is on period charter until December, as announced. during the previous court. There are no forthcoming dry dockings during 2025 for any of these vessels.
Naomi: Two pressurized LPG carriers, and one medium gas carrier.
Naomi: With a book value of the investment being $27 3 million.
Naomi: Out of the three vessels two of these are operating in the spot market.
Naomi: One pressurized vessel is on period charter until December as announced.
Naomi: During the previous call.
Naomi: There are no forthcoming dry dockings during 2025 for any of these vessels.
Michael Jolliffe: During last week we came into a principal agreement with one of our joint venture partners that since their investment after six years has come full circle. to acquire back their half ownership share in the two pressurized vessels, the Gas Hala Lambos and the Echo Lucidity. And we expect a cashflow outflow close to $10 million subject to final valuation. This agreement is subject to being formalised, but all going well. We expect to have it concluded and take delivery of the vessels within the next two weeks and before the end of the current quarter. From our standpoint, we are familiar with these vessels and their good condition and we are taking them at a favourable price.
Naomi: During last week, we came into a principal agreement with one of our joint venture partners since their investment after six years has come full circle.
Naomi: To acquire back that have ownership share in the two pressurized vessels the gas had a la and Boston the eco lucidity, and we expect that cash flow outflow outflow approach to $10 million subject to final valuations.
Naomi: The agreement is subject to being formalized, but all going well, we expect to have it completed and take delivery of the vessels within the next two weeks and before the end of the current quarter.
Naomi: From our standpoint, we are familiar with these vessels and they're good condition and we are taking them at a favorable price.
Michael Jolliffe: This will leave a single vessel jointly owned, the medium gas carrier Echo Sorcerer, that was built in 2023.
Speaker Change: This will leave a single vessel joined the island the medium gas carrier Echo Sofa that was built in 2023 I will now turn the call over to Constantino sister wise for our financial performance. Thank you.
Konstantinos Sistovaris: I will now turn the call over to Konstantinos Sistovaris for our financial performance. Thank you. Thank you Michael. I will discuss the financial results that were...
Constantino Sister: Thank you Michael.
Speaker Change: I will discuss the financial results that were released today.
Konstantinos Sistovaris: starting with slide 7, where we have a snapshot of the income statement for the first quarter of 2025. sale and purchase transactions that took place over the period, there was a very small increase in fleet days. The VCE, or Net Revenues, that is the revenues after the voyage expenses, came in at $36.9 million for the quarter, a decrease of $1.8 million or $4.8 million. This was due to the weakness in the spot mark. And while most vessels on period performed well, there were at times between four and five vessels operating in the spot market, generating increased voyage costs due to bank but not generating enough revenue to compensate.
Naomi: Starting with slide seven where we have a snapshot of the income statement for the first quarter of 2025 against the same periods of 2024.
Naomi: Due to sale and purchase transactions that took place over the periods. There was a very small increase in fleet days of 2%.
Naomi: TCE or net revenues that is revenues after voyage expenses came in at $36 9 million for the quarter, a decrease of one 8 million or four 6%.
Naomi: This was due to the weakness in the spot market.
Naomi: And while most vessels on period performed well.
Naomi: Where at times between four and five vessels operating in the spot market generating increase voyage costs due to bankers, but not generating enough revenue to compensate for that.
Konstantinos Sistovaris: Two of the vessels were hand-designed. And they had the biggest variance. Operating expenses were $13.5 million for the quarter, a 17% increase, mainly due to higher crew costs and maintenance. It should, however, be noted that it is actually last year's number that was unusually low due to one-off items, whereas this year's, OPEX, was more in line with our cost structure. actually slightly lower than in the fourth quarter. This quarter's results also included some dry docking expenses of $0.4 million, mainly relating to the dry docking of one vessel. during the end of March. and there was no dry docking during the same period of last year.
Naomi: Two of the vessels were handy sizes and they had the biggest variances.
Naomi: Operating expenses were $13 5 million for the quarter, a 17% increase mainly due to higher crew costs and maintenance fees.
Naomi: However, however be noted that it was actually last year's number that was unusually low due to one off items, whereas this year's Opex was more in line with our cost structure and actually slightly lower than in the fourth quarter of 2024.
Naomi: This quarter's results also included some dry docking expenses of 0.4 million mainly relating to the dry docking of one vessel.
Naomi: During the end of March.
Naomi: And there was no dry docking during the same period of last year.
Konstantinos Sistovaris: Similarly, the first quarter of 2025 results were also impacted by an impairment of 0.5 million for the vessel Gas Cerberus. bringing down its value to the value that was agreed later in April that it would be sold. The vessel is still in the fleet, and it should be delivered to the buyer's house. There were no impairments for the first quarter of last year. Interest costs more than halved to 1.4 million during the first quarter of 2025. as a result of the lower deadline. This number also contains an amortized portions of finance. Expect that interest costs will be further cut in half in the following years.
Naomi: Similarly in the first quarter of 2025 results were also impacted by an impairment of 0.5 million for the vessel gas Cerberus bring.
Naomi: Bringing down its value to the value that was a great later in April that it would be sold.
Naomi: The vessel is still in the fleet and it should be delivered to the buyers in June.
Naomi: There were no impairment for the first quarter of last year.
Naomi: Interest costs more than halved to $1 4 million during the first quarter of 2025.
Naomi: As a result of the lower debt levels.
Naomi: Number also contains a now monetize portions will finance expenses.
Naomi: We expect that the interest cost will be further cut in half in the following quarters.
Konstantinos Sistovaris: Net income for the first quarter was $14.1 million compared to $17.7 million. On an adjusted basis, net income also marked a 15.7% decrease from $19.1 million to $16.3 Overall 14 million in profits for the quarter is a high number and although reduced compared to last year's record is actually on par with the fourth quarter of 2024. In terms of earnings per share that was $0.38 and on an adjusted basis $0.44.
Naomi: Net income for the first quarter was $14 1 million compared to $17 7 million for the same quarter of last year at 20% decrease.
Naomi: On an adjusted basis net income also marked a 15, 7% decrease from $19 1 million to $16 1 million.
Naomi: Overall $14 million in profits for the quarter is a high number and although reduced compared to last year's record.
Naomi: It is actually on par with the fourth quarter of 2024.
Naomi: In terms of earnings per share that was <unk> 38 cents and on them.
Naomi: Adjusted basis 44 cents.
Konstantinos Sistovaris: Looking at the balance sheet in the next slide, slide 8. Given the relatively uneventful first quarter of 2025, the balance sheet as of March 31st is fairly similar to that of December 31st. Cash, including restricted cash, was at the end of the quarter $77.1 million, a 9% reduction StealthGas was used for dead... but still very solid for a 28-vessel fleet with a very low debt. There were no vessels heard for sale as of March 31st, as the gas server's sale was agreed in April, after the close of the country. The liability side, the current portion of debt was $20.7 million.
Naomi: Looking at the balance sheet in the next slide.
Naomi: Slide eight.
Naomi: Given the relatively uneventful first quarter of 2025.
Naomi: Balance sheet as of March 31st is fairly similar to that of December 31st.
Naomi: Cash, including restricted cash was at the end of the quarter $77 1, million% to 9% reduction.
Naomi: Cash was used for debt repayments.
Naomi: But still very solid 428 vessel fleet with a very low debt.
Naomi: Yeah.
Naomi: There were no vessels held for sale as of March 31st as the gas Cerberus sale was agreed in April after the close of the quarter.
Naomi: And the liability side the current portion of debt was $27 million.
Konstantinos Sistovaris: includes the 18.6 million facility that was mature in December of this year but was actually repaid early in April. while the long-term portion of the debt is where the big variance for this quarter was. stood at $61.5 million as of December 31 and was reduced to $30.3 million as of March The other quarterly variance was that the shareholders' equity increased by $14.8 million over this three-month period as a result of improved profitability.
Naomi: And includes the $18 6 million facility that was <unk>.
Naomi: Due to mature in December of this year, but was actually repaid early in April.
Naomi: While the long term portion of the debt is where the big variance for this quarter was it stood at $61 5 million as of December 31st and was reduced to $30 3 million as of March 31.
Naomi: The other quarterly variance wasn't shareholders' equity increased by $14 $8 million over the three month period as a result of improved profitability.
Konstantinos Sistovaris: Moving on to slide 9, to reiterate the debt situation as this is where the strategy has been focused in the past couple of years. So for the past 15 years, the company's debt has been oscillating in the range of $300 to $500. Since the beginning of 2023, that interest rates rose significantly. And thanks to the improving cash flow generation, the company embarked in a massive debt reduction effort. Initially aiming to reduce debt, but as things turned out, with the opportunity to eliminate debt altogether. In 2023, 154 million was repaid. In 2024, while the company took on 7 billion.
Naomi: Moving on to slide nine to reiterate the debt situation as it is this is where the strategy has been focused in the past couple of years.
Naomi: So for the past 15 years as a company that has been oscillating in the range of $300 million to $500 million.
Naomi: Since the beginning of 2023 that interest rates rose significantly and thanks to the improving cash flow generation the company embarked in a massive debt reduction effort.
Naomi: Initially aiming to reduce debt, but as things turned out with the opportunity to eliminate that altogether.
Naomi: In 2023 $154 million was repaid in 'twenty to 'twenty four.
Naomi: The company took on 17.
Konstantinos Sistovaris: million for the two vessels that were acquired. and then 108 million was repaid. Then in the first quarter of 2025 another 32 million was repaid and during the current second quarter another 22. bringing the total debt repaid during 2025 to $54 million. with just a single facility remaining, totalling 32 million, which matures in 2032. versus a free cash balance of more than double, making the company net debt free. Debt amortization is now reduced to just 2.2 million per annum, compared to 28 million per annum just two years ago. that has allowed for significantly faster cash flow accumulation going forward.
Naomi: For the two vessels that were acquired.
Naomi: Then 108 hundred $8 million was repaid.
Naomi: Then in the first quarter of 2025, another $32 million was repaid and during the current second quarter, another 22 million bring.
Naomi: Bringing the total debt repaid during 2000 $25 million to $54 million.
Naomi: With just a single facility remaining totaling $32 million, which matures in 2032.
Naomi: Versus a free cash balance of more than double making the company net debt free.
Naomi: Debt amortization is now reduced to just 2.2 million per annum compared to 28 million per annum, just two years ago.
Naomi: That has allowed for significantly faster cash flow accumulation going forward.
Konstantinos Sistovaris: If we manage to keep operating cashflow at current levels, we are looking at a run rate of close to 100 million per annum in cashflow.
Naomi: If we manage to keep operating cash flow at current levels. We are looking at a run rate of close to $100 million per annum in cash flow generation.
Harry Vafias: I will now hand you over to our CEO, Harry Vafias. who will discuss the market. On slide 10, we're discussing the LBG market. As we have previously said, over the last three years, global LBG exports are on a steady upward path and marked an increase in 2024 of 4.4%. It looks at these on track to register similar growth for the first half of 2025. The world's largest exporter, the US, after having registered an impressive 11% year-on-year growth in exports, last year shifted gear lower, but still marked a solid 8% year-on-year growth for Q1. It was actually in the current month of May that Propane X was from the U.S.
Naomi: I will now hand, you over to our CEO Harry <unk>.
Harry: Who will discuss the market and the company outlook.
Naomi: Yes.
Naomi: On slide 10, we're discussing the LPG market.
Naomi: As we have previously said over the last three years global LPG exports are on a steady upward path and market increase in 'twenty 'twenty four or four 4%.
Naomi: It looks at is on track to register similar growth for the first half of 'twenty five.
Naomi: The world's largest exporter to the U S. After having registered an impressive 11% year on year growth in exports last year shifted gear lower but still marked a solid 8% year on year growth for Q1.
Naomi: It was actually in the current market, maybe the propane exports from the U S. For the first time broke a new record, surpassing 2 million barrels barrels per day.
Harry Vafias: for the first time broke a new record surpassing 2 million barrels per day. U.S. and NGL exports are facing capacity constraints, but we are already approaching the first planned capacity additions, starting with Energy Transfers' Netherlands-Texas terminal that will export 250,000 additional barrels per day in the second half of 2025, and thereafter, once several more expansion projects are completed by 2028, in the U.S. Gulf, the Eastern Seaboard as well, as in Western Canada, volume should increase by over 25%. Now these increased volumes are about to compete with Middle Eastern exports and we have not discussed recently We have not discussed recently Middle Eastern exports as the region has been losing market share being supplanted by a dominant US.
Naomi: U S and NGL exports are facing capacity constraints, but you are already approaching the first plant capacity additions, starting with energy energy Transfer's Nederland, Texas terminal.
Naomi: Exports and up 250000 additional barrels per day in the second half of 'twenty five and thereafter once several more expansion projects are completed by <unk> 28 in the U S Gulf.
Naomi: She board as well as in Western Canada volume should increase by over 25%.
Naomi: Now these increased volumes are about to compete with middle East export.
Naomi: Exports and we have not discussed recently.
Naomi: We have not discussed recently middle eastern exports as the region has been losing market share being supplanted by a dominant U S. However, traditional LPG export is like Saudi Arabia, Qatar and UAE are also looking to strengthen for exports lately in particular, Qatar and UAE have projects underway, mostly related to LNG like the north.
Harry Vafias: However, traditional LPG exporters like Saudi Arabia, Qatar and UAE are also looking to strengthen their exports lately. In particular, Qatar and UAE have projects underway mostly related to LNG like the North Field Expansion by Qatar Energy that are also going to increase their LPG production significantly before the end of the decade. In the short term, we should expect increased LPG volumes, LPG being a by-product of both crude oil and LNG production, coming as a result of the decision by OPEC to gradually lift oil production cuts starting in April. In fact, the latest OPEC decisions may show that they intend to triple the original production increases and potentially bring back to the market the 2.2 million barrels per day voluntarily oil production cuts before the end of this year, instead of late 26 as was originally envisioned.
Naomi: Field expansion by Qatar energy.
Naomi: We're also going to increase their LPG LPG production significantly before the end of the decade.
Naomi: The short term what should expect increased LPG volumes LPG being a byproduct of all byproduct of both crude oil and LNG production coming as a result of the decision by OPEC to gradually lift oil production cuts starting in April in fact, the latest outbreak decisions may show that they intend to triple the original.
Naomi: Production increases and potentially bring back to the market the $2 2 million barrels per day voluntarily oil production cuts before at the end of this year instead of late 'twenty six Oswald you originally envisioned looking.
Harry Vafias: Looking at the other side of the equation, at the two largest importers in Asia, China and India, preliminary figures for first quarter show that both increased their LPG imports, China with a more subdued 8% year-on-year and India at a stronger 10% year-on-year. Imports in China were particularly volatile but declined compared to the previous quarter. This was the result of geopolitical tensions. In our last call, we had said that during the first phase of counter-tariffs, LPG was spared since China depends for over 50% of its imports on the US. However, the decisive month proved to be April and the escalation of the trade war led to China retaliating by imposing tariffs of 125% on US LPG and ethane.
Naomi: Looking at the other side of the equation.
Naomi: <unk> two largest importantly, importers in Asia, China, and India preliminary figures for first quarter show that both increase their LPG imports imports, China with a more subdued 8% hit on here in India other stronger 10% year on year.
Naomi: Imports in China were particularly volatile but declined compared to the previous quarter. This was the result of geopolitical tensions.
Naomi: Last call. We had said that during the first phase of contract tariffs LPG were spared since China depends for over 50% of imports from the U S. However, the decisive mouth's proved to be able in the escalation of the trade war led to China retaliated by imposing tariffs off.
Naomi: <unk> hundred 75% on U S LPG anything.
Harry Vafias: This led initially to a collapse in the charter market and an abrupt pause in trade. Fairly quickly, volumes were rerouted with China looking to the Middle East to get its supplies. However, the capacity is not there yet. In a swift turn of events, there was a de-escalation in May, and the two countries entered an anti-day truce, whereby tariffs on U.S. LPG imports were reduced to only 10%. Since then, we have seen flows normalizing. There is not much point in speculating what will happen next. What we could infer is that this climate in the medium term may lead LPG-importing nations diversifying their sources, creating new trade routes in the process that could be positive for ton-mile demand.
Naomi: These led initially to a collapse in the charter market and an abrupt pause in trade fairly quickly volumes.
Naomi: Just trying to look into the middle east to get its supplies.
Naomi: However, the capacity is not there yet and a swift turn of events or was this de escalation in may.
Naomi: Two countries entered a 90 day choice whereby tariffs on U S. LPG imports were reduced to only 10%. Since then we have seen flows normalizing, but there's not much point in speculating what will happen next what who couldn't first that this climate in their medium term rallied LPG importing nations diversifying the sources, creating new trade routes.
Naomi: The process that could be positive for ton mile demand in the longer term, we continue to see Chinese demand being driven by the PTH plants that need LPG for propylene production and while in the short term more than 25% of the capacity remains offline plots continue being built there should underpin the long term demand three more we expect this.
Harry Vafias: In the longer term, we continue to see Chinese demand being driven by the PDH plants that need LPG for propylene production. And while, in the short term, more than 25% of the capacity remains offline, plants continue being built that should underpin long-term demand, three more we expect this year, bringing total capacity to 27 million tons.
Naomi: This year, bringing total capacity to 27 million tonnes.
Harry Vafias: On slide 11, we are updating you on the shipping market. In general, the situation was similar to the previous quarter with the exception of the larger ships that are more affected by a worsening sentiment due to trade tensions. Looking at the small pressurized ships, the majority of our fleet, we saw a firm spot market in Northwest Europe during Q1, where the majority of the fleet is located. In addition to the seasonality factors, the cargo volume was good and particularly the seaborne LPG imports into Poland were strong following the EU ban on Russian LPG. This resulted in quite a tight tonnage situation and firm spot rates for the owners.
Naomi: Slide 11, we're updating you on the shipping market in general the situation was similar to the previous quarter with the exception of the larger ships.
Naomi: They're more affected by a worsening sentiment due to trade tensions looking at their small pressurized ships in my chart of our fleet, we're showing firm spot market in northwest Europe. During Q1, what are the majority of the fleet is located in addition to the seasonality factors the CAG.
Naomi: So volume was good and particularly the seaborne LPG imports into Poland, where strong following of the EU ban on Russia and LPG. This result, any quite a tight tight tonnage situation on firms spot rates for the owners. The TC market continued along with historically high levels for Q1, and there's still interest from charters to look too low.
Harry Vafias: The TC market continued along with historically high levels through Q1 and there is still interest from charters to lock in tonnage forward, which shows continued optimism for the future. We see a major difference between the spot markets east and west of Suez with the western markets yielding superior returns to the owners as it has been doing for some time. The spot market east of Suez remains quite soft and illiquid and owners prefer to lock in TCs where they can and period rates remain more or less flat. For the handisized vessels, the market continued in Q1 in a similar manner as Q24 ended, with a weak trading environment for LPG and with PECMs pulling the majority weight.
Naomi: <unk> tonnage forward, which shows continued optimism for the future we're.
Naomi: We see a major difference between the spot markets Eastern West of Suez was the western markets, yielding superior returns to the owners are there has been doing for some time.
Naomi: Spot market East of Suez remains quite soft in illiquid and owners prefer to lock in Pcs.
Naomi: What are they can and period rates remained more or less flat for the handy size vessels the market continuing in Q1 in a similar manner.
Naomi: Q4 ended with a weak trading environment for LPG and respect canvas pulling the majority weight.
Harry Vafias: The time-tracked market was relatively quiet through Q1. Some TC extensions were heard but limited new inquiries came out. We have seen more TC action during the first half of Q2 where several deals have been done. Rates remain relatively stable. The order book for handisized remains slim, with no delivery scheduled for this year and this should logically support the period market. For the MGCs, the MGC spot market continued to soften through Q1 as more investors were delivered from TCs and charters found themselves with ample tonants to choose from. We have since the end of Q1 seen a very volatile VLGC market with a massive crash in April and then a significantly firming market where VLGC rates at the time of writing are at a one-year high.
Naomi: The time charter market was relatively quiet through Q1, some to see extensions were hurt by limited.
Naomi: Limited new inquiries came out we have seen more to see action. During the first half of Q2 or several deals have been done rates remained relatively stable. The order book for Honda sizes remained slim with no deliveries scheduled for the for this year and this should logically support the period market.
Naomi: For the I'm just seems the I'm just see spot market continue to soften through Q1 as more vessels were delivered from Tcs and charters found themselves with ample tonnage to choose from we have since the end of Q1 in a very volatile real juicy market with the market crash in April and then a significantly firming market.
Naomi: You'll just see rates at the time of writing at the one year high this could pave the way for a better <unk> market in the second half of this year.
Harry Vafias: This could pave the way for a better MGC market in the second half of this year. The order book provides for a more limited number of deliveries for this year, but we need to see a change in the market sentiment for TC rates to improve. Beginning 26 we are going to gradually see more vessels joining the fleet, we have touched on this before and how the large order book in this segment of over 50% of existing capacity should be worrisome until or unless the ammonia market expectations kick off. On the plus side, since our last call, the pace of ordering has slowed down significantly.
Naomi: Order book provides for a more limited number of deliveries for this year, but we need to show a change in the market sentiment for Tc rates to improve that.
Naomi: Beginning 26, we're going to gradually see more vessels joining the fleet we have touched on this before and how the large order books in this segment of over 50% of existing capacity should be worrisome until.
Laura: Laura unless the ammonia market expectations kick off.
Laura: On the plus side since our last call the pace of ordering has slowed down significantly looking at the order book on the Hunter sized trades, we're continuing to see a very limited interest for owners for new vessels. In fact, there were no new orders since our last call and no vessels delivering this year. The order book remains healthy for these type of as far as our core fleet of pressurized ships.
Harry Vafias: Looking at the order book on the Honeysize fleet, we continue to see a very limited interest for owners for new vessels. In fact, there were no new orders since our last call and no vessels delivering this year. The order book remains healthy for this type. As far as our core fleet of pressurized ships, we saw very few more vessels being ordered since our last call, around 10. Some of these have gone unreported since their delivery, but overall the order book ratio continues to be normal at around 7% for the next three years. We continue to stress that the pressurized fleet is quite old, with over 30% of the existing vessels are over 20 years of age and the fleet will need to be replenished.
Laura: So very few more vessels being orders since our last call around 10. Some of this has gone on the unreported central delivery.
Laura: But overall the order book ratio continues to be normal at around 7% of them for the next three years.
Harry Vafias: We're continuing to stress that the pressurized fleet is quite old with over 30% of the existing vessels are over 20 years of age and the fleet will need to be replenished owners are keeping older vessels trading sometimes even up to 30 years old and still refrain from scrapping, but even without scrapping is increasingly getting difficult for older.
Harry Vafias: Owners are keeping older vessels trading, sometimes even up to 30 years old, and still refrain from scrapping. But even without scrapping, it is increasingly getting difficult for older ships to trade in international markets. especially in Europe given the safety and environmental regulations.
Laura: Ships trade and international markets.
Laura: Especially in Europe, given the safety environmental regulations on slide 12, we're outlining some key variables that may affect our performance in the quarters I had summing up the results that we announced today point to a strong start to a year and underpin our confidence of sustaining the momentum we have built over the last years through.
Harry Vafias: On slide 12, we are planning some key variables that may affect our performance in the quarters ahead. Summing up, the results that we announced today point to a strong start to a year and underpin our confidence in sustaining the momentum we have built over the last years, throughout 2025. There is no doubt a period of uncertainty that demands cautiousness. That being said, despite all the upheaval witnessed so far, the data from Q1 had shown that almost every major importer of LPG, with the exception of Japan, has actually increased its LPG imports, while the major exporters in the US and the Middle East have significantly increased exports.
Laura: While 25, there's no doubt the period of uncertainty that demands cautiousness that being said despite all the upheaval witnessed so far the data from Q1 has shown that almost every major importer of LPG with the exception of Japan has actually increased its LPG imports, while the major exporters in the U S and the middle East have seen.
Harry Vafias: And while we have no data for the second quarter, the bellwether of the LGC market is currently at yearly highs. In this volatile environment, StealthGas remains steadfast in its strategy and has all but eliminated its financial risk, being net debt-free after having made over $50 million in debt repayments during this year and having 27 out of 28 vessels unencumbered. At the same time, in order to return value to our shareholders, we have begun buying back shares, spending $1.8 million in share repurchases since March and over $21.2 million in share repurchases since June 23.
Laura: Increased exports and while we have no data for the second quarter. The bellwether of real Juicy market is currently at yearly highs.
Laura: In this volatile environment South gas remains steadfast in its strategy and has all but eliminated its financial risk being net debt free after having made over $50 million in debt repayment. During this year at year and having 27 out of 20 vessels 28 vessels unencumbered at the same time in order to return value to our shareholders.
Laura: [noise] began buying back shares spending $1 $8 million in share repurchases since March and all of our $21 2 million in share repurchases since June 23.
Operator: We have now reached the end of our presentation. We'd like to thank you for joining us at our conference call today and for your interest in our company. We look forward to having you again with us at our next call for our second quarter results in August. Thank you.
Naomi: We have now reached the end of our presentation I'd like to thank you for joining us at our conference call today and for your interest in our company. We look forward to having you again with us at our next call for our second quarter results in August. Thank you.
Naomi: Yeah.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.
Naomi: This concludes today's conference call. Thank you for participating you may now disconnect have a nice day.
Naomi: Yeah.
Naomi: Okay.
Naomi: [music].
Naomi: Okay.
Naomi: [music].