StealthGas, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the StealthGas second quarter 2020 conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. I must advise you that this conference is being recorded today, Friday, the 21st of August, 2020. I would now like to hand the conference over to your speaker today, Harry and Fabias, President and CEO. Thank you. Please go ahead.

Good morning, everyone, and welcome to our second quarter in six months 2020 earnings conference call. This is Harry Vafias, the CEO of Stelgas, and along with our finance officer, Mrs. Sakellaris. And before we commence our presentation, I would like to remind you that we'll be discussing forward-looking statements, which reflect current views with respect to future events and financial performance. At this stage, if you could take all a moment to read our disclaimer on slide number two of this presentation. Risks are further disclosed in stealth gases filing with the Securities and Exchange Commission. I would also like to point out that all our amounts quoted, unless otherwise clarified, are implicitly stated in U.S. dollars. Slide three summarizes the key highlights of our second quarter 2020 results that we released today. In spite of a very difficult and uncertain market due to the COVID-19 pandemic, has had an exceptionally good quarter in terms of both revenue and profitability. The key to this success is that we had leveraged upon the strong market prevailing prior to the pandemic outbreak and had secured almost all of our vessels on period charters, thus avoiding the spot market downturn we saw in the second quarter, particularly in Europe. Indeed, our spot exposure, committing almost 10% of our voyage days in the spot market, was very low, and as all of our spot vessels were trading in Asia, we managed to keep them employed, thus avoiding long periods of downtime. Our operational utilization was as high as 97%. Strong revenue generation along with stable operating costs and very low finance costs were the cornerstones of our second quarter's performance success. Going forward, we have about 71% of our free day secured on peer charters for the remainder of 2020 with total fleet deployment days for all subsequent periods, generating approximately $112 million in contracted revenues, undoubtedly providing us with a good shield against those or certain times. Including the time charter agreements of our JV ships, total secured revenues increased to $133 million. In addition to this, in an attempt to renew our fleet to a small extent, we took the opportunity of investing a portion of the 25 million proceeds from the conclusion of the MGCJV vessel financing in acquiring two new small LPG ships. The first vessel at 2020 built 5,000 cubic meter pressure as the LPG ship was acquired in June 2020, while the second one, which is a 7,500 cubic meter ship, new building LPG ship, will be delivered in September 2020. Focusing on our financial performance highlights, our voyage revenues came in at $36.3 million, Marking an increase of 2.2 million compared to the same period of last year, mainly due to a sharp rise almost 20% of our revenue stemming from our time charters, along with reduced presence in the spot market. Our daily time charter equivalent continues to rise. Compared to the first quarter of 2020, our daily time charter equivalent increased by about $1,000, driven by revenue growth in conjunction with a 25% decline in voyage costs. generating an impressive EBITDA of about 22 million. Our net income came in at 8.9 million, corresponding to an EPS of 23 cents, thus marking the best performance since the first quarter of 2013. Slide number four provides an analysis of our fleet employment in terms of charter types out of a fleet of 42 operating ships, excluding our eight JV vessels. We have nine on bare boat, 25 on time charters, and eight in the spot market. Compared to the previous quarter, we had two 7,500 cubic meter ships, the Gas Kasky and the Gas Esco coming off bare boat. Plus, we have increased our presence in the spot market as market softness due to both COVID pandemic and the summer period make charters reluctant to take forward positions. In spite of the difficult economic environment, since our last announcement, we concluded five new charters and charter extensions. Overall, we have a solid flint enrollment. Our period coverage for the remainder of 2020 is in the order of 71%. Our contracted revenues are in the order of $112 million, with about $45 million secured up to the end of 2020. And including our JVs, total secured revenues increased to $133 million. In slide five, we are providing a summary update as to our two joint venture performances. With regards to our first established joint venture, comprising its majority of small LPG vessels, we currently have two of the five under time-charter contracts, and given the soft market conditions, the three vessels in the spot market marked a poor performance, and consequently did not add significantly to our profitability. Focusing on our second joint venture, comprising of three medium gas carriers, these are all our under time-charter contracts, thus producing a steady cash flow. with a newly concluded contract for two of these MGC vessels. The JV structure has a 100% period coverage up until April 2021. Proceeding to slide six, we provide you with a brief summary of our recent sale and purchase activity. In mid-June 2020, delivery of a brand new 5,000 cubic meter pressurized vessel, the Ecotexiana. The vessel was acquired with financing already in place and therefore our equity contribution was only Up until January 2021, we have two more vessel deliveries, the Eco-Alice, a 7,500 cubic meter new building vessel to be delivered in September 2020, and the Eco-Blizzard, an 11,000 cubic meter new building vessel to be delivered in January 2021. Financing for these vessels is already committed, and our remaining equity obligation is as low as $7 million. with about 37 million of free cash on StealthGas' balance sheet and additional cash of 11 million as our shareholder stake in our JVs. Cash balance, our capital expenditure obligations are fully covered. In terms of our fleet geography on slide seven, our company focuses on regional trade and local distribution of gas. And this graph is a snapshot of the positioning of our ships, excluding our JV vessels, as of August 3rd. And currently we have 14 of our ships in Europe, An equal number in the Middle East, five vessels in Africa, and five vessels in America. I'll now turn the call to Mrs. Sakellaris for our financial performance.

Thank you, Harry, and good morning to everyone. I will continue the presentation focusing on our financial performance for the second quarter of 2020. Indeed, the quarter was outstanding given the difficult market situation we're in due to the COVID-19 pandemic. Amidst these unexpected market conditions, Telka has leveraged upon its strong fleet deployment, its stable OPEX base, and its slow debt exposure to produce such good and promising results. This is actually a proof of all we have been arguing these past quarters, that we follow a sound strategy that can demonstrate profitability given the correct circumstances. Indeed, the circumstances in the second quarter of 2020 were right for our company, meaning that since the beginning of the quarter we had secured 86% fleet coverage, thus protecting us from all the market turmoil that took place, plus we had no spot exposure in Europe. Let us move on to slide 8, where we see the income statement for the second quarter of 2020 against the same period of the previous year. Voyage revenues came in at 36.3 million, making a 2.2 million increase compared to the same period of last year. This increase is attributed to an noticeable rise of our time charter revenue stemming from all of our vessel types, namely SPOL LPGs, 22,000 cubic meters semi-ref and tankers, along with limited exposure in the spot market, which was weak due to the COVID-19 pandemic. Voyage costs amounted to $2.1 million, marking a 50% decrease compared to Q2 2019 due to spot days reduction by 48%. It's noted that the sharp decline in fuel price from March onwards also assisted to our voyage cost reduction. Based on all of the above, our net revenues for the period were 34.1 million, corresponding to a net revenue margin of 94%. Running costs at 11.6 million marked about 2% decrease compared to Q2 2019, mostly attributed to fewer time charter and spot days due to our fleet contractions. General administrative costs decreased compared to the same period of last year by about 400,000, mainly as our stock compensation plan, active in the same period of 2018, ended in August 2019. Based on all this, our EBITDA is in the order of 22 million. Interest and finance costs marked close to 1.7 million decrease, mainly attributed to LIBOR decrease and the lowering of our debt. Based on all the points analyzed above, we ended the second quarter of the year with a net income of about $9 million, corresponding to an EPS of $0.23. Our EPS result is more than 11 times ahead of Bloomberg consensus at much the best quarterly performance we have seen over the last seven years. Slide 9 demonstrates our performance indicators for the period examined. As mentioned earlier on, our operational utilization for Q2-20 was in the order of 97%. We marked a strong performance given the tight market conditions. In terms of our adjusted time charter equivalent, we noticed a rise on a quarterly basis by about 1,500 daily, an outcome mainly due to improved time charter rates. Looking at our balance sheet in slide 10, our free cash is in the order of 36.3 million, increased compared to the first quarter of 2020 by almost 9 million. As mentioned at the beginning of our call, we utilized the 25 million we received from the conclusion of the MGCJV vessel financing to acquire two new small LPG vessels and substantially reduced our outstanding payables that had to do with our JV arrangement by almost 6 million. Our JV structures combined currently have cash in the order of 22 million. Most probably, excess cash in our JV arrangements will be dividend out to shareholders towards the end of this year, thus adding to our free cash base. Our gearing is in the order of 38%. Based on our scheduled principal repayments, we will reduce our leverage by around $40 million per year. We have no balloon refinancing due in the remainder of 2020, with minimal balloon obligation of around $30 million in 2021, for which we have already entered into discussions for refinancing. I will now hand you over to our CEO, Harry Vafias, who will discuss market and company outlook.