Q2 2025 Imperial Petroleum Inc Earnings Call

September 5, 2025

Harry Vafias: Petroleum. Joining me on today is Fenia Sakellaris, who will be discussing our financial performance. Before we commence our discussion, please read the safe harbor disclaimer on slide two. In essence, it's made clear that this presentation may contain some forward-looking statements, as defined by the Private Securities Litigation Reform Act. We raise the attention of our investors to the fact that such forward-looking statements are based upon the current beliefs and expectations of Imperial Petroleum, and are subject to risks and uncertainties which could cause future results to differ materially from these forward-looking statements. In addition, we'd like to clarify we will quote monetary amounts, unless explicitly stated otherwise, in US dollars. On slide three, we're summarizing our key operational and financial highlights for Q2 2025.

Harry Vafias: What governed Q2 2025 was our impressive fleet expansion, as within a single quarter we took delivery of 7 dry bulk ships, expanding our fleet by about 56% and reaching 19 non-Chinese built vessels. Imperial Petroleum is now a company of a material size that operates a combined fleet of tanker and dry bulk ships. The majority of these dry bulk ships, ship deliveries took place towards the end of Q2 2025, hence these dry bulk ships did not have sufficient operating time to fully contribute to our bottom line. Nevertheless, our company continued the multi-year momentum of recurring profitable quarters. In Q2 2025, we generated a profit of $12.8 million, corresponding to an earnings per share of $0.36.

Harry Vafias: In spite of the Q2 being a weak seasonal period, especially for tankers, we managed to improve our profitability against the Q1 of 2025, mainly at the back of increased tanker time charter coverage that led to improved performance of our product tankers. During the Q2 of 2025, we did witness a turbulent market in terms of geopolitical events, mainly in June with the brief Israel-Iran war. This conflict caused a spike in tanker rates and affected market sentiment due to the high risk of Strait of Hormuz closing. Our no-noticeable fleet expansion increased our fleet book value by about 55% against the previous quarter, and we now enjoy a fleet of about $350 million of book value.

Harry Vafias: Imperial Petroleum continues to enjoy high liquidity as we enter the first half of 2025 with $212.2 million in cash and cash equivalents. We maintain a positive working capital and have sufficient quarterly cash flow generation, so we are able to preserve adequate liquidity throughout the periods. In spite of our expansion and our solid performance across the quarters, our company remains heavily undervalued. Based on 30 June financials and fleet market values as per our management estimates, our net asset value per share is about $13.5, which is almost four times higher than our current market price. It's evident that our company's strong financial and operating performance, along with the positive prospects set forth through our fleet expansion, are not yet embedded in our share price. On slide four, we provide a summary of our current fleet deployment.

Harry Vafias: About 80% of the fleet is currently under time charter, as customarily all our dry bulk ships are under short-term charter contracts. The commercial strategy we currently follow for our dry bulk ship allows us to secure cash flow while minimizing commercial idle days and voyage costs. For the tankers, we currently have 4 vessels, 2 product tankers, and 2 Suezmaxes in the spot market. The remaining 5 product tankers are under time charter employment ranging from short-term to medium-term contracts. The increase in time charter coverage, which compared to Q1 2025 was in the range of 10%, improved our net revenue margin and assisted our bottom line. On slide 5, we're discussing the evolution of market rates for both tankers and bulkers.

Harry Vafias: What is positive is that compared to the first half of 2025, daily rates have continued to strengthen for both tankers and bulk carriers. Looking at tanker rates, these are lower than the peak levels reached in the period 2022 to 2024, but still earnings remain robust compared to the 10-year average. Indicatively, it's reported that earnings for Suezmax vessels are about 30% higher than the 10-year average. Rates for product tankers are almost 15% higher than the 10-year average. Within Q2 2025, we witnessed a spike in rates around the Middle East region due to the brief Israel-Iran conflict. Since then, the rates have further strengthened, mainly as a result of OPEC unwinding production cuts and the newly imposed sanctions by both the US and EU, UK.

Harry Vafias: Fall in June 2025, rates for dry bulk vessels strengthened at the back of trade fundamentals such as improved steel margin in China and a boost of grain trade in Brazil. Currently, rates for Supramaxes have risen to highest levels since May 2024 ahead of US grain season kickoff. We currently enjoy solid rate in both segments we operate, in which fills us with a cautious optimism as to what we anticipate for Q3 in 2025. On slide 6, we're reviewing the tanker market. The global oil tanker market has entered the second half of 2025 with a positive stance, but the market is still dominated by geopolitical and trade policy risks. The recent Israeli-Iran tensions had a direct impact on energy infrastructure, leading to a sharp drop in Iranian exports.

Harry Vafias: Ongoing negotiations on trade tariffs, such as the recent China-US discussions, caused trade frictions that have a material impact on market sentiment. Moreover, the expanded sanctions on Russia and Iran could alter trade patterns, further creating trade disruptions and rate volatility. Setting aside the market uncertainty, both oil demand and supply are set to rise in the remainder of 2025 and 2026, with supply expected to outpace demand. In terms of supply, OPEC+ has begun unwinding voluntary production cuts, adding 1.8 million barrels per day in 2025, an action that will positively affect the tanker rates. Looking at the tanker supply, this market is governed by restrained fleet growth, an aging fleet and moderate demolition activity.

Harry Vafias: The order book for the product tankers, MR2, stands at 3.2% for the remainder of 2025 and 5.1% for 2026. Suezmaxes fleet growth is 3.5% up to 5.1% for 2026. Nine percent, sorry, for 2026. We also anticipate the regulatory and environmental pressures to intensify demolition activity for older tonnage, a fact which will shrink vessel supply. On slide seven, we are discussing the dry bulk market. Following a softer first half, dry bulk trade has recently shown signs of rebounding. Since July 2025, dry bulk trade volumes have increased by 2% year-on-year. Ton-mile growth for bulkers is expected to be moderate as Red Sea transits remain low and any vessel rerouting back from the Red Sea in the near terms looks unlikely.

Harry Vafias: Any additional ton-mile growth will be supported by the increase in local exports to China for Guinea bauxite and Brazil iron ore and grains. Indeed, Guinea-China bauxite trade remains a key driver of dry bulk trade, particularly for large vessels, as departures were up 41% in the first half compared to the same period last year. Mid-size bulkers were supported by Brazil-China grain trade, US corn trade, and Chinese steel exports. Overall, dry bulk stage is expected to remain relatively stable in the years ahead. In terms of fleet growth, we saw 302 bulkers being delivered since the start of 2025. Current order book is 9% for Panamax, Kamsarmax vessels, quite low for Handysizes, 6%, and reasonably big for Supramax, Ultramax at 11%. I pass you the floor to Ms. Sakellaris for the financial performance.

Fenia Sakellaris: Thank you, Harry, and good morning to all. The Q2 2025 was a turning point for Imperial Petroleum. Our fleet increased materially. Our recent acquisitions in Q2 2025 did not contribute significantly to our operations and profitability as most of the vessels were delivered towards the end of the Q2. Nevertheless, within the Q2 2025, we managed to increase our profitability by 13% against the Q1 2025, generating a net income of $12.8 million. Focusing on the Q2 2024, though this was exceptional as market rates were at their peak, much higher than in Q2 2025. Indicatively, it's mentioned that in Q2 2024, our daily fleet time charter equivalent was in the order of 35,200, while for Q2 2025, daily fleet time charter equivalent was about 20,700.

Fenia Sakellaris: Looking at our income statement for Q2 2025 on slide 8, revenues came in at $36.3 million, marking a $22.8 million decline compared to revenues generated the same period of 2024. This decline stems from lower market rates. During Q2 2025, our average daily spot rates for product tankers were 9,500 lower when compared to the same period of last year. In addition, average daily 1-year time charter rates for product tankers were about 12,000 lower compared to prevailing rates in Q2 2024. Voyage costs amounted to $10.7 million, $6.4 million lower than when compared to Q2 2024. This decrease in voyage expenses is attributed to increased time charter activity by about 36%, leading to a decline in voyage costs, particularly bunker costs.

Fenia Sakellaris: In Q2 2025, embarking costs were $5.2 million lower compared to the same period of last year. Running costs amounted to $8.4 million, increased by $1.9 million due to the increase of our fleet by an average of 3.8 vessels between the two periods. Overall, during the past year, we have witnessed a stabilization of daily operating costs across the quarters. Our average fleet operating costs oscillates between 6,400 to 6,700 per day, depending on maintenance and supply needs within each quarter. Dry docking costs amounted to $1.7 million as this quarter one of our Suezmax tankers and one of our Supramax dry bulk carriers underwent dry docking.

Fenia Sakellaris: EBITDA for Q2 2025 came in at $17.1 million, while net income at $12.8 billion corresponded to a basic earnings per share of $0.36. For six months 2025, our EBITDA came in at $31.8 million. Our operating cash flow was $42 million, while our net income was $24.1 million, corresponding to an EPS of $0.67. Our current share price is about three times higher than our earnings per share for the last trailing 12 months, a sign that our profitability capacity is not adequately reflected in our company's valuation. Moving on to slide 9, let us take a look at our balance sheet for the six months of 2025. We enjoy a hefty cash base of close to $212 million.

Fenia Sakellaris: Within April 2025, we repaid about $40 million for the vessels Clean Imperial and Neptulus. Nevertheless, we faced a marginal decline in our end of period cash balance as robust cash flow generation allows preserve liquidity at high levels. Our fleet book value is a shade above $350 million, about 68% higher than end of year 2024 due to our vessel additions. Payable to related party balance mainly reflects the amount owed for recent vessel delivery, which was paid within July and August 2025. Proceeding to slide 10, we provide a summary of our liquidity, profitability, and market considerations going forward. We continue to enjoy a debt-free balance sheet and a solid cash flow generation. Within the first half of 2025, our operating cash flow was $42 million. Our profitability margin remains wide as market rates are favorable and significantly higher than our break-even levels.

Fenia Sakellaris: In Q2 2025, our time charter equivalent per fleet voyage day was close to $21,000. Our daily average cash flow break-even is currently about $8,700 for tankers and close to $6,500 for our dry bulk carriers. In terms of market consideration, a focal point is the duration and next steps pertaining the trade war as well as OPEC further output increases, if any. For the dry carriers, it is important to see how demand will play out and whether the current level of rates can be sustained. Concluding our presentation with slide 11, we summarize yet once more our company strong points, placing emphasis that we operate a quality built fleet of tankers and dry bulk vessels that we strive to grow even further and have managed to demonstrate recurring profitability since Q4 2021.

Fenia Sakellaris: At this stage, our CEO, Mr Harry Vafias, will summarize our concluding remarks for the period examined.

Harry Vafias: We are proud for completing our recent fleet expansion. This is an important milestone for us. Imperial Petroleum now operates a combined diversified fleet of 9 tankers and 10 bulk carriers, all non-Chinese built vessels. In terms of our financials, we remain profitable, debt-free, and, as of the end of Q2 2025, we held about $212 million in cash. In the first half of 2025, we generated $24.1 million of net profit and $42 million of operating cash flow. Market rates for both tankers and bulkers are currently favorable. We hope that we will be able to take advantage of the second half of 2025, utilize our fleet at full speed, and produce even better results.

Harry Vafias: We'd like to thank you all for joining us at our conference call and for your interest and trust in our company, and we look forward to having you again with us at our next call for our Q3 results. Thank you.

Petroleum and joining me on today is facilities, who will be discussing our financial performance?

Before we commence our discussion, please read the Safe. Harbor disclaimer on slide 2 in essence. It's made clear that this presentation may contain some forward-looking statements.

Uh, as defined by the private security litigation Reform Act.

We raise the attention of our investors to the fact that such forward-looking statements are based upon the current beliefs and expectations of Imperial petroleum and our subject to risks and are entities, which could cause future results to differ materially from these 4 looking statements. In addition, we like to clarify. We will quote monetary amounts unless explicitly stated otherwise, in US dollars.

On slide 3. We're summarizing our key operational. And financial highlights for Q2 255

What governance Q2 255 was our impressive, Fleet expansion, as within a single quarter. We took delivery of 7, dry bag ships, expanding our Fleet by about 56% and reaching 19 nonchalant.

Imperial petroleum is now a company of the material size that operates a combined fit of tanker and dry bulk ships.

The majority of these dry bulk ships ship deliveries took place towards the end of the second quarter of 2025. Hence, these dry bulk ships did not have sufficient operating time to fully contribute to a bottom line.

The, the less our company continued, the multi-year momentum of recurring profitable quarters in Q2 25. We generated the profit of 12.8 million corresponding to a learning per share of 36 Cents in spite of the second quarter, being a weak seasonal period, the special for tankers, we managed to improve our profitability against the first quarter of 25. Mainly at the back of increased P, tanker time Charter coverage that led to improved performance of our product anchors. During the second quarter of 25, we did witness a turbulent market in terms of geopolitical events. Mainly in June with the brief Israeli run, wore this conflict. Caused the spike in tanker, rates, and affected Market sentiment due to the high risk of straight over most closing.

Are not noticeable, Fleet expansion increased. The Fleet book value by about 55% against the previous quarter and we now enjoy a fleet of about 350 million dollars of Book value.

Imperial petroleum continues to enjoy High liquidity. As we enter the first half of 2025, with 212.2 million in cash and cash equivalents. We maintain a positive working capital and have sufficient quarterly cash flow generation. So we are able to preserve adequate liquidity throughout the periods.

In spite of our expansion and our solid performance across the quarters, a company remains heavily undervalued basis on June 30th, financials and Fleet Market values as per our management. Estimates are net asset value per share is about 13.5, which is almost 4 times higher than our current market price.

It's evident that our company, strong financial and operating performance along with the Positive prospects, set forth through our Fleet expansion are, not yet embedded in our share price on slide 4. We provide the summary of our current Fleet deployment about 80% of the fleet is currently under time Charter as customarily. All our dry bulk ships are under short-term Charter contracts,

The commercial strategy we currently follow. For our dryback ship, allows us to secure cash flow while minimizing commercial Idol days and Voyage costs.

For the tankers. We currently have 4 vessels 2 product, tankers, and 2 Seuss, Maxes in the spot Market. The remaining 5 product tankers are under time Charter employment, ranging from short-term, to medium-term contracts.

The increase in time shorter coverage, which compared to the first quarter of 25 was in the age of 10% improved, our net revenue margin and assisted that bottom line.

On slide 5. We're discussing the evolution of Market rates for both tankers and bulkers. What is positive is that compared to the first half of 25 daily rates have continued to strengthen for both tankers and bulgarians looking at tanker rates, the these are lower than than the peak levels reaching the period 22 to 24, but still earnings remain robust compared to the 10-year average indicatively. It's reported that earnings for sure. Max vessels are about 30% higher than the 10-year average rates for product tankers are almost 15% higher than the 10-year average.

And within the second quarter of 25, we wish the spike in rates around the middle east region due to the brief Israeli run conflict.

Tried fundamentals, such as improved steel margin in China and a boost of grain trade. In Brazil. Currently raised for Supra. Maxis have risen to high levels since May 24th and we currently enjoy solid rate in both segments. We operate in which fills us with a cautious optimism as to what we anticipate for Q3 and 25.

On slide 6, we're reviewing the tanker Market. The global oil tanker Market has entered the second half of 25 with a positive stance, but the market is still dominated by 2 political and trade policy risks. The reason Israeli run tensions, had the direct impact on energy. Infrastructure leading to a sharp drop in Iranian exports.

Ongoing negotiations on trade tariffs such as the recent China us discussions. Course trade frictions, that have a material impact on Market sentiment. Moreover, the expanded sanctions on Russian Iran. Could utter trade Partners further, creating trade, disruptions and rate volatility.

Setting aside, the market uncertainty both oil, demand and Supply are set to rise in the remainder of 25. And 26, we Supply expected to outpace demand. In terms of Supply OPEC plus has become unwinding voluntary, production Cuts, adding 1.8 million bars per day in 25 and action that the positively affected Anchorage. Looking at the tanker supply, this Market is governed by a strained, Fleet, growth and aging Fleet and moderate demolition activity. The older, the book for the product tankers

Mrs. Stands at 3.2%, for the remainder of 25 and 5.1 for 26. And so as Max said, Maxes Fleet growth is 3.5 up to 5.1% for 26.

And 9% sorry for 26. We also anticipate the Regulatory and environmental pressures to intensify demolition activity for older Turnage. A fact which will shrink vessel Supply

on slide 7. We are discussing the dry belt market for a softer. First half tribal trade has recently shown signs of rebounding since July 25th volumes have increased by 2% year on year. Toal growth for bulkers is expected to be moderate as Red Sea Transit, remain low, and any investor re rooting back from the Red Sea in the near terms looks unlikely.

Any additional tone mild growth will be supported by the increase in local experts to China for. Uh, Guinea boxing and Brazil or iron ore and Grains indeed. Guinea China in a box. I trade in as a key driver of drive by trade, particularly for large vessels. As departures were up 41%, in the first half, compared to the same period last year midsize, bulkers were supported by Brazil, China Grand, trade us corn, trade and Chinese still exports of the old drive but stages expect to remain relatively stable in the years ahead in terms of Fleet growth, we saw 302 bulkers being delivered. Since the start of 25 cannot order, the book is 9

% for panamax camps or Max vessels.

Quite low for Handy sizes, 6% and reasonably big for super max. Ultramax at 11%.

And I pass you the floor to miss circularis for the financial performance.

Thank you Harry and good morning to all the second quarter of 25 was a turning point for Imperial. Petroleum our Fleet increased materially a recent acquisition secured, 225 did not contribute significantly to our operations and profitability as most of the bases were delivered towards the end of the quarter. Nevertheless, within the second quarter of 25, when managed to increase the profitability by 13% against the first quarter of 25 generation, a net income of 12.8 million focusing on the second quarter of 24 though. This was exceptional as Market rates, were at their Peak much higher than in Q2 255 indicatively. It's mentioned that in Q2 24, our daily Fleet time, Charter equivalent was in the order of 35,200. While, for Q2 255, Daly Fleet time each other equivalent was about 20,700.

Looking at our income statement for q25 on slide. 8 revenues came in at 36.32% of 24. This decline stems from Glory Market rates during Q2 255 Iron Age daily, sport rates for product, tankers were 9,500. Lower. When compared to the same period of last year. In addition, average daily, 1 year.

Time chart to rate for product anchors. We're about 12,000,000 lower compared to prevailing rates in Q2 24.

Law compared to the same period of last year.

Running costs amounted to 8.4 million increased by 1.9 million due to the increase of our Fleet by. An average of 3.8 vessels between the 2 periods. Overall, during the past year, we have witnessed the stabilization of daily operating costs across the quarters. Our average Fleet operating costs oscillates between 6,400 to 6,700 per day, depending on maintenance and Supply needs within each quarter dry docking costs amounted to 1.7 million as this quarter, 1 of our Swiss Max tankers, and 1 of our Supermarket tribal carriers, and the went dry docking.

Aita for the second quarter of 25, KV mean at 17.1 million while Nate income at 12.82% of 36 Cents.

For 6 months, 25 are a Beta came in at 31.83% while our net income was 24.1 Million correspond to NPS of 67 cents.

A current share price about 3 times higher than our earnings per share for the last trailing. 12 months, a sign that our profitability capacity is not adequately reflected in our companies valuation.

Moving on to slide 9, let us take a look at our balance sheet for the 6 months of 25. We enjoy healthy cash base of close to 12 uh, to 212 million within April. 25, we paid about 40 million for the vessel's cleaning period and absolute. Nevertheless, we Face the marginal decline in our end of period cash balance as robust. Cash flow generation allows specific liquidity at high levels.

Our flip book value is a shade above 350 million about 68%, higher than end of year 24, due to our vessel Editions,

they able to relate the party balance, mainly reflects the amount out for each investor delivery, which was paid within July and August 2 5.

Proceeding to slide 10. We provide the summary of our liquidity profitability and Market course Integrations going forward. We continue to enjoy debt, free balance sheet and a solid cash flow generation within. The first half of 25. Our operating cash flow was 42 million. Our profitability margin remains wide, as Market rates are favorable and significantly higher than our break, even levels in Q2 2025 our time Charter equivalent per Fleet, Voyage day was close to 21,000.

While our daily average cash flow, Break Even is currently about 8,700 for tankers and close to 6,500 for our drive by carriers.

In terms of Market consideration, a focal point point is the duration and next steps pertaining, the trade War, as well as OPEC further output increases. If any for the dry tyres, it is important to see how demand will play out and whether the current level of rates can be sustained.

Concluding a presentation with slide 11, we summarize yet once more our company, strong points placing emphasis that we operate the quality build Fleet of tankers and drive back versus that. We strive to grow even further and have managed to demonstrate recurring profitability since the fourth quarter of 2021 at this stage, I see all Mr. Harry vas will summarize our concluding remarks for the period examined.

We are proud for completing our recent Fleet expansion. This is an important milestone for us Imperial petroleum. Now operates. A combined Diversified Fleet of 9 tankers and 10 B, carriers all non-chinese built vessels.

In terms of our financials, we remain profitable debt free. And as of the end of Q2 255, we held about, 212 million in cash.

In the first half of 25, we generated 24.1 million of net profit and 42 million of operating cash flow Market rates for both tankers and Balkans are currently favorable. Therefore, we hope that we will be able to take advantage of the second half of 25, utils speed and produce even better results.

We like to thank you all for joining us at a conference call and for your interest and Trust in our company. And we look forward to having you again with us at our next call, for our Q3 results. Thank you.

Q2 2025 Imperial Petroleum Inc Earnings Call

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