C3is (CISS) - 2025 Q1 - Quarterly Report

Company Overview C3is Inc. is a Nasdaq-listed ship-owning company specializing in dry bulk and crude oil seaborne transportation with a four-vessel fleet Introduction C3is Inc. announced its unaudited financial and operating results for the first quarter ended March 31, 2025, highlighting its role as a ship-owning company in dry bulk and tanker seaborne transportation services - C3is Inc. reported unaudited financial and operating results for Q1 2025[2][3] - The company operates in the dry bulk and tanker seaborne transportation services sector[3] About C3is Inc. C3is Inc. is a ship-owning company specializing in dry bulk and crude oil seaborne transportation, operating a fleet of four vessels with a total capacity of 213,464 deadweight tons - C3is Inc. provides drybulk and crude oil seaborne transportation services[19] C3is Inc. Fleet Composition | Vessel Type | Number of Vessels | Total Capacity (dwt) | | :---------- | :---------------- | :------------------- | | Handysize drybulk carriers | 3 | 97,664 | | Aframax oil tanker | 1 | 115,800 | | Total Fleet | 4 | 213,464 | - The company's common stock is listed on the Nasdaq Capital Market under the symbol 'CISS'[19] Operational and Financial Highlights (Q1 2025) C3is Inc. reported a net income of $7.9 million for Q1 2025, with 91.7% fleet utilization, despite a 32% revenue decrease and 56% drop in daily TCE Key Operational Metrics The company's fleet maintained a high operational utilization of 91.7% in Q1 2025, with Handysize dry bulk carriers on short-term time charters and the Aframax tanker operating in the spot market at strong daily rates - Handysize dry bulk carriers are on short-term time charters, providing steady cash flows[5] - The Aframax tanker operates in the spot market, achieving voyage charter rates of approximately $46,000 per day[5] Fleet Operational Utilization | Metric | Q1 2025 | | :----------------------- | :------ | | Fleet operational utilization | 91.7% | Key Financial Metrics C3is Inc. reported a net income of $7.9 million for Q1 2025, despite a 32% decrease in revenues to $8.7 million, primarily due to a significant 56% drop in daily TCE. Adjusted net income and EBITDA also saw substantial decreases Q1 2025 vs Q1 2024 Key Financial Highlights | Metric | Q1 2025 ($) | Q1 2024 ($) | Change | | :----------------------- | :------ | :------ | :----- | | Revenues | 8.7 million | 12.8 million | -32% | | Daily TCE | 16,202 | 36,480 | -56% | | Net Income | 7.9 million | 3.8 million | +109% | | EBITDA | 9.7 million | 5.7 million | +70% | | Basic EPS | 14.89 | 16.61 | -10.3% | | Adjusted Net Income | 1.2 million | 4.5 million | -73% | | Adjusted EBITDA | 3.0 million | 6.4 million | -53% | - Cash balance stood at $15.7 million at the end of Q1 2025[5] First Quarter 2025 Detailed Financial Results Q1 2025 saw a $4.1 million decrease in voyage revenues due to lower charter rates, while operating expenses increased with more vessels, and a $6.9 million non-cash gain on warrants boosted net income Revenue and Voyage Expenses Voyage revenues decreased by $4.1 million year-over-year to $8.7 million in Q1 2025, primarily due to lower charter rates, despite an increase in total calendar days for the fleet. Voyage expenses remained stable Voyage Revenues and Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 ($) | Q1 2024 ($) | Change ($) | | :---------------- | :------ | :------ | :----- | | Voyage Revenues | 8.7 million | 12.8 million | -4.1 million | | Voyage Expenses | 2.8 million | 2.8 million | Stable | - The decrease in voyage revenues was primarily attributed to lower charter rates[8] Fleet Calendar and Charter Days | Metric | Q1 2025 | Q1 2024 | | :------------------ | :------ | :------ | | Total calendar days | 360 | 273 | | Time charter days | 247 (68.6%) | 164 (60.1%) | | Fleet utilization | 100.0% | 100.0% | Operating Expenses and Depreciation Vessels' operating expenses and depreciation increased in Q1 2025 due to an increase in the average number of vessels. General and administrative costs decreased significantly, mainly due to lower warrant-related expenses Operating Expenses and Depreciation (Q1 2025 vs Q1 2024) | Expense Category | Q1 2025 ($) | Q1 2024 ($) | Change ($) | | :----------------------------- | :------ | :------ | :----- | | Vessels' operating expenses | 2.2 million | 1.8 million | +0.4 million | | Depreciation | 1.6 million | 1.4 million | +0.2 million | | Management fees | 0.16 million | 0.12 million | +0.04 million | | General and Administrative costs | 0.7 million | 1.5 million | -0.8 million | - The increase in vessels' operating expenses, depreciation, and management fees was attributed to the increase in the average number of vessels[8] - General and Administrative costs decreased mainly due to lower expenses allocated to warrants issued in Q1 2024[8] Other Income and Expenses The company recorded a significant non-cash gain on warrants of $6.9 million in Q1 2025, which contributed to the higher net income. Interest and finance costs decreased, while interest income also saw a slight reduction Other Income and Expenses (Q1 2025 vs Q1 2024) | Category | Q1 2025 ($) | Q1 2024 ($) | Change ($) | | :------------------------ | :------ | :------ | :----- | | Interest and finance costs | 0.3 million | 0.7 million | -0.4 million | | Interest income | 0.1 million | 0.2 million | -0.1 million | | Gain on warrants | 6.9 million | -0.6 million (loss) | +7.5 million | - The $6.9 million gain on warrants was a non-cash adjustment due to changes in fair value of warrants[8][13] - Interest and finance costs in Q1 2025 were mainly related to the accrued interest expense for the Eco Spitfire acquisition, which was settled in April 2025[9] CEO Commentary and Business Outlook The CEO highlighted a 109% net income increase despite revenue decline, emphasizing debt-free fleet expansion and a strategy for diversification in a mixed 2025 economic environment CEO's Statement CEO Dr. Diamantis Andriotis highlighted a 109% increase in Net Income for Q1 2025, despite a 32% revenue decrease due to lower TCE rates. He emphasized the company's success in fulfilling all capital expenditure commitments without bank loans, significantly expanding the fleet's deadweight tonnage - Net Income increased by 109% in Q1 2025 to $7.9 million, while Revenues decreased by 32% due to a drop in TCE rates[10] - All capital expenditure commitments were successfully fulfilled by April 2025 without resorting to any bank loans[11] - The company more than trebled the deadweight tonnage of its exclusively non-Chinese built fleet without incurring bank debts[12] Economic Environment and Company Strategy The company anticipates a year of mixed signals in 2025 for the global economic environment and shipping sector. C3is Inc. plans to adapt by focusing on diversification and aligning with sustainable practices to leverage regional growth drivers and evolving economic dynamics - The global economic environment in 2025 is expected to present mixed signals, with risks and opportunities for the shipping sector[13] - C3is Inc. plans to adapt to evolving dynamics by focusing on diversification and aligning with growing emphasis on sustainable practices[14] - The company aims to leverage regional growth drivers and evolving economic dynamics to maintain resilience[15] Fleet Data The fleet data for Q1 2025 shows an increase in the average number of vessels to 4.0, contributing to higher total calendar and voyage days. Fleet utilization remained at 100%, while operational utilization slightly decreased to 91.7% due to commercial idle days Fleet Operating Performance (Q1 2025 vs Q1 2024) | FLEET DATA | Q1 2024 | Q1 2025 | | :-------------------------- | :------ | :------ | | Average number of vessels | 3.00 | 4.00 | | Period end number of owned vessels in fleet | 3 | 4 | | Total calendar days for fleet | 273 | 360 | | Total voyage days for fleet | 273 | 360 | | Fleet utilization (%) | 100.0% | 100.0% | | Total charter days for fleet | 164 | 247 | | Total spot market days for fleet | 109 | 113 | | Fleet operational utilization (%) | 93.4% | 91.7% | - Fleet operational utilization of 91.7% for Q1 2025 was mainly due to commercial idle days of the Aframax tanker operating in the spot market[5] - Definitions for fleet data metrics (Average number of vessels, Total calendar days, Total voyage days, Fleet utilization, Total charter days, Total spot market charter days, Fleet operational utilization) are provided to clarify calculations[28] Non-GAAP Financial Measures Reconciliation This section reconciles non-GAAP financial measures like Adjusted Net Income, EBITDA, and TCE to GAAP, providing insights into the company's operational performance Adjusted Net Income, EBITDA, Adjusted EBITDA, and Adjusted EPS Reconciliation This section provides reconciliations of non-GAAP measures such as Adjusted Net Income, EBITDA, Adjusted EBITDA, and Adjusted EPS to their most directly comparable GAAP financial measures. These metrics are used by management and investors to assess financial performance on a comparable basis - Adjusted net income represents net income before (loss)/gain on warrants and share-based compensation[26] - EBITDA represents net income before interest and finance costs, interest income, and depreciation[26] Reconciliation of Net Income to Adjusted Net Income, EBITDA, and Adjusted EBITDA | Metric | Q1 2024 ($) | Q1 2025 ($) | | :------------------------------------------ | :------ | :------ | | Net income | 3,786,620 | 7,916,841 | | Plus/(less) loss/(gain) on warrants | 629,871 | (6,866,761) | | Plus share based compensation | 63,464 | 113,628 | | Adjusted Net Income | 4,479,955 | 1,163,708 | | EBITDA | 5,712,285 | 9,723,097 | | Adjusted EBITDA | 6,405,620 | 2,969,964 | Basic EPS and Adjusted EPS | Metric | Q1 2024 ($) | Q1 2025 ($) | | :------------------------------------------ | :------ | :------ | | EPS - Basic | 16.61 | 14.89 | | Adjusted EPS, Basic | 32.28 | 1.05 | Time Charter Equivalent (TCE) Reconciliation The Time Charter Equivalent (TCE) rate, a non-GAAP measure, is reconciled by dividing voyage revenue net of voyage expenses by voyage days. It serves as a standard shipping industry performance measure to compare period-to-period changes despite varying charter types - TCE rate is calculated by dividing voyage revenue net of voyage expenses by voyage days[31] - TCE is a non-GAAP measure used to compare performance across periods despite changes in charter types (spot vs. time charters)[31] Time Charter Equivalent (TCE) Rate Reconciliation | Metric | Q1 2024 ($) | Q1 2025 ($) | | :-------------------------- | :------ | :------ | | Voyage revenues | 12,792,011 | 8,670,664 | | Voyage expenses | (2,832,992) | (2,837,998) | | Time charter equivalent revenues | 9,959,019 | 5,832,666 | | Total voyage days for fleet | 273 | 360 | | Time charter equivalent rate | 36,480 | 16,202 | Unaudited Condensed Consolidated Financial Statements The unaudited financial statements for Q1 2025 show increased net income driven by a gain on warrants, higher total assets, and a shift in cash flow dynamics Statements of Operations The condensed consolidated statements of operations show a decrease in total revenues for Q1 2025 compared to Q1 2024, but a significant increase in net income, largely driven by a gain on warrants Unaudited Condensed Consolidated Statements of Operations | | Q1 2024 ($) | Q1 2025 ($) | | :------------------------------------------ | :------ | :------ | | Revenues | 12,792,011 | 8,670,664 | | Total expenses | 7,652,522 | 7,436,472 | | Income from operations | 5,139,489 | 1,234,192 | | Other (expenses)/income, net | (1,352,869) | 6,682,649 | | Net income | 3,786,620 | 7,916,841 | | Earnings per share (Basic) ($) | 16.61 | 14.89 | | Weighted average number of shares (Basic) | 43,716 | 465,245 | - The computation of earnings per share gives retroactive effect to shares issued in connection with the spin-off and reverse stock splits[33] Balance Sheets The condensed consolidated balance sheets indicate an increase in total assets and stockholders' equity from December 31, 2024, to March 31, 2025, primarily driven by an increase in cash and cash equivalents and retained earnings, while warrant liability significantly decreased Unaudited Condensed Consolidated Balance Sheets | | Dec 31, 2024 ($) | Mar 31, 2025 ($) | | :------------------------------------------ | :----------- | :----------- | | Cash and cash equivalents | 4,640,343 | 15,691,873 | | Total current assets | 16,339,358 | 21,072,012 | | Vessels, net | 84,149,805 | 82,524,334 | | Total assets | 100,489,163 | 103,596,346 | | Total current liabilities | 18,690,874 | 20,821,849 | | Warrant liability | 10,437,034 | 3,570,273 | | Total liabilities | 29,127,908 | 24,392,122 | | Total stockholders' equity | 71,361,255 | 79,204,224 | | Total liabilities and stockholders' equity | 100,489,163 | 103,596,346 | - Cash and cash equivalents increased significantly from $4.6 million at Dec 31, 2024, to $15.7 million at Mar 31, 2025[35] - Warrant liability decreased substantially from $10.4 million to $3.6 million, reflecting fair value changes[35] Statements of Cash Flows The condensed consolidated statements of cash flows show a decrease in net cash provided by operating activities in Q1 2025 compared to Q1 2024, but a significant increase in cash from investing activities due to the maturity of time deposits. Financing activities resulted in a net cash outflow Unaudited Condensed Consolidated Statements of Cash Flows | | 3M 2024 ($) | 3M 2025 ($) | | :------------------------------------------ | :------ | :------ | | Net cash provided by operating activities | 14,793,672 | 3,294,491 | | Net cash provided by investing activities | 1,452,006 | 7,948,706 | | Net cash provided by/(used in) financing activities | 11,222,612 | (191,667) | | Net increase in cash and cash equivalents | 27,468,290 | 11,051,530 | | Cash and cash equivalents at end of period | 28,163,578 | 15,691,873 | - Net cash provided by operating activities decreased significantly from $14.8 million in Q1 2024 to $3.3 million in Q1 2025[36] - Investing activities provided $7.9 million in cash in Q1 2025, primarily from the maturity of bank time deposits[36] Additional Information This section provides details on the Q1 2025 conference call, important forward-looking statements, and company contact information Conference Call Details C3is Inc. hosted a conference call on May 15, 2025, to discuss Q1 2025 results, operations, and outlook, with a live and archived webcast available on the company's website - A conference call was held on May 15, 2025, at 10:00 am ET to present Q1 2025 results and company outlook[17] - A live and archived webcast of the conference call is available on the C3is Inc. website (**www.c3is.pro**)[18](index=18&type=chunk) Forward-Looking Statements This section contains forward-looking statements regarding future events and financial performance, which are subject to significant uncertainties and contingencies. Important factors that could cause actual results to differ materially are discussed, including economic conditions, market changes, and geopolitical risks - The release contains forward-looking statements reflecting current views on future events and financial performance, including fleet growth, diversification, and financing[20] - These statements are based on assumptions inherently subject to significant uncertainties and contingencies beyond the company's control[21] - Important factors that could cause actual results to differ include world economies, geopolitical conditions (e.g., Ukraine conflict, Middle East conflict, Red Sea disruptions), market conditions, and operating expenses[21] Company Contact Contact information for C3is Inc.'s Chief Financial Officer, Nina Pyndiah, is provided for inquiries - Contact for C3is Inc. is Nina Pyndiah, Chief Financial Officer[23]