StealthGas increases revenue in difficult market

Jun 01 2015

Major LPG vessel player Stealthgas reported increased revenue for the first three months of this year, primarily due to a higher number of vessels operating in this period.

Revenue amounted to $35.7 mill, an increase of $1.8 mill, or 5.3%, compared to revenues of $33.9 mill for 1Q14.

Voyage expenses and vessels’ operating expenses for 1Q15 were $4.3 mill and $11.7 mill, respectively, compared to $3.1 mill and $10.7 mill, respectively, in the same period of 2014.

The $1.2 mill increase in voyage expenses was primarily due to the higher number of vessels under spot charters in the 2015 period, while the $1 mill increase in vessels’ operating expenses was primarily the result of the increase in the number of vessels operated under timecharters this year, including five vessels that were added to the fleet and one vessel that came off bareboat charter.

Depreciation was $8.4 mill, a $0.3 mill increase from $8.1 mill in 1Q14. This increase was due to the additional depreciation for five vessels joining the fleet from 2Q14 until 1Q15, partly offset by the decrease in depreciation caused by StealthGas’ decision to sell and lease back two LPG vessels, the ‘Gas Cathar’ and the ‘Gas Premiership’, in 4Q14.

Included in the first quarter 2015 results were net losses from interest rate derivative instruments and foreign currency hedging arrangements.

As a result of the above, the company reported net income for 1Q15 of $5.8 mill, compared to net income of $7.6 mill for 1Q14. EBITDA amounted to $16.7 mill.

An average of 45.9 vessels wasa owned by the company during the three month period, compared to 42 vessels for the same period of 2014. 

As of 31st March, 2015, cash and cash equivalents amounted to $127.5 mill and total debt was $323 mill. Debt repayments amounted to $23.4 mill in 1Q15.

In April this year, StealthGas said that it took a strategic decision to sell two of its oldest vessels, the 1991-built 4,109 cu m ‘Gas Kaizen’, and the 1990-built 3,211 cu m ‘Gas Crystal’ for demolition. Total proceeds were $2.1 mill.

On 14th April, 2015, the company took delivery of a 5,000 cu m, eco LPG carrier - ‘Eco Enigma’, while on 30th April, the Company took delivery of a 3,500 cu m, eco LPG carrier- ‘Eco Royalty’ (since renamed ‘B Gas Superior’), both from Japanese shipyards.

With new and renewed charters, StealthGas increased the contracted revenues to around $238 mill. Total voyage days covered for the fleet are 66% for the remainder of this year and 37% for 2016.

In addition, the period charter for the Aframax ‘Spike’, will bring a total of $22 mill EBITDA over its five year duration, excluding a profit split.

CEO Harry Vafias commented “We are pleased with our performance during the first quarter of 2015 as our company marked record revenues, surpassing $35.5 mill, in spite of the difficult market environment of the small LPG segment. Indeed, declining freight rates in conjunction with low oil prices, have had a negative impact on freight rates for small LPG carriers and therefore this quarter and compared to the first quarter of 2014, our fleet operational utilisation fell to 95.6% and our spot market days increased.

“Our Company continues its steady performance focusing on low leverage and reducing our ships’ break even through this challenging environment. We are proceeding with our fleet renewal programme consisting of top quality eco gas carriers and since the beginning of 2015 to date, we have added to our fleet three modern eco LPG newbuildings while scrapping our two oldest vessels, thus lowering our average fleet age to 10.3 years. Within 2015 we expect the delivery of another seven eco LPG carriers mainly from Japanese yards.

“In addition, our chartering strategy has been proven once again successful, as we managed within the first quarter of 2015 to expand the fleet employment for the year to 66% and increase our secured revenues to $238 mill up to 2022 ($220 mill in 4Q14). Most importantly, we have proven to the market that our conservative philosophy works in both good and bad times

“Our current outlook for the remaining of 2015 is for LPG charter rates to likely mark a further small decrease and inevitably we anticipate this to exert pressure on the weaker owners thus seeing an increase of demolition. Our strong balance sheet, with a ratio of debt to total assets of 34%, our strong liquidity and ongoing profitability puts us in a position to address any challenges that might arise in the future,”he concluded.

Meanwhile, Lambros Babilis has been appointed as CEO of Stealth Maritime Corp. He has been with the group since 2000 and was promoted from COO.

Stealth Maritime now controls 21 tankers split between Aframaxes and product tankers. In addition, the company manages technically and commercially about 50 gas carriers for StealthGas, Babilis is also deputy chairman of StealthGas.  

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