StealthGas(GASS) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $44.5 million, a 10% increase from $40.4 million in Q3 2024, but below the record $47.2 million achieved in Q2 2025 [3][10] - Adjusted net income for Q3 was $14.4 million, slightly above last year's figure, with earnings per share on an adjusted basis at $0.39 for the quarter [3][12] - The company achieved a debt-free status after repaying a total of $350 million over the last three years, with all vessels now fully owned [3][14] Business Line Data and Key Metrics Changes - The fleet days increased by 7% due to the addition of two vessels, contributing to higher revenues [10] - Voyage expenses rose to $7.2 million, driven by increased port and bunker expenses, while operational utilization decreased to 90.3% [11] - TCE revenues for the quarter were $37.3 million, reflecting seasonal low activity [11] Market Data and Key Metrics Changes - Global LPG exports grew by 5% in the first nine months of 2025, with US exports showing close to 6% growth [17][18] - The European market is expected to import a record 8 million metric tons of competitive US LPG in 2025, significantly impacting demand [18] - Chinese LPG imports recorded a 1% growth in the first eight months of 2025, despite trade tensions affecting the market [19][20] Company Strategy and Development Direction - The company aims to maintain a conservative approach with a visible revenue stream, securing $130 million in contracted revenues [4] - There is a focus on selling older tonnage and replacing it with newer vessels, with a recent agreement to sell the Eco Invictus [4] - The company has achieved a cash flow break-even of $6,500-$7,000 daily, enhancing competitiveness even in a declining market [15] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the seasonal weakness in Q3 but expressed optimism for the short term as markets firm up entering winter [25] - There is a belief that geopolitical tensions are easing, which should positively impact market sentiment and rates [25] - The long-term outlook remains positive, driven by continuous growth in LPG demand, particularly from US production [25][26] Other Important Information - The company has scheduled dry dockings for six vessels in 2026, indicating ongoing maintenance and operational readiness [6] - The company maintains strong liquidity with cash expected to reach $100 million by year-end [13][14] Q&A Session Summary Question: What is the outlook for LPG demand in the coming years? - Management indicated that future capacity additions from US infrastructure projects and Middle East expansions create a positive outlook for sustained market expansion through 2030 [20] Question: How is the company managing its fleet in light of current market conditions? - The company is focusing on maintaining high period coverage and has secured 46% of fleet days for 2026, ensuring a stable revenue stream [6][4] Question: What are the implications of the US-China trade situation on operations? - Management noted that while trade tensions have affected imports, the recent truce may allow for a return to normalcy in trade relations [19]