StealthGas (GASS) 5 Sep 24 2024 Q2 Earnings call transcript

Daily EarningsSunday, Sep 8, 2024 11:23 am ET

1min read

In a recent earnings call, StealthGas, a leading player in the LPG shipping industry, announced another record-breaking quarter for the company, with profits more than double compared to the same period last year. The company's strong financial performance is attributed to a combination of strategic moves, market conditions, and operational efficiency.

Operational Highlights

StealthGas reported selling two smaller vessels and acquiring two brand-new medium gas carriers, reflecting the company's active fleet management strategy. The company's focus on securing long-term charters has been successful, with 55% of fleet days contracted for 2025, securing over $220 million in revenue through 2027. This strategic move to fix long-term charters is a positive sign of the company's confidence in the market and its ability to secure tonnage ahead of rising rates.

Financial Performance

The second quarter of 2024 saw a 146% increase in net income compared to the same period last year, amounting to $25.8 million. This impressive growth is a testament to StealthGas' effective cost management and revenue optimization. The company's focus on reducing debt, as evident in the $107 million debt reduction since the beginning of the year, has also contributed to the strong financial performance.

Market Outlook

The LPG market remains robust, with exports from the U.S. continuing to grow and Europe's import ban on Russian volumes expected to impact the market dynamics. StealthGas' strategic positioning in the European market, focusing on regional trade and local distribution of gas, has been a key factor in the company's success.

Challenges and Opportunities

The earnings call also highlighted potential challenges and opportunities for the company. The growing order book for medium-sized vessels, especially for ammonia carriers, poses a risk if the green fuel for shipping does not materialize as expected. However, StealthGas' strategic focus on reducing debt and fixing long-term charters positions the company well for the future.

Conclusion

StealthGas' record-breaking second quarter results underscore the company's strong operational and financial performance. The company's strategic moves, including fleet management and chartering, have been instrumental in securing future revenues and reducing debt. Looking ahead, StealthGas remains optimistic about the longer-term prospects of the LPG market and its position within it. With a focus on strategic growth and operational efficiency, StealthGas is well-positioned for continued success.

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