StealthGas, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Stealth Gas Third Quarter 2020 9-Month Financial and Operating Resort Conference Call. At this time, all participants are in a listen-only mode. To ask a question during the Q&A, you'll need to press star 1 on your telephone. I must advise you that this conference is being recorded today, and I would now like to hand the conference over to your speaker today, Mr. Harry Vafias. Please go ahead.

Good morning, everyone, and welcome to our third quarter nine-month 2020 earnings conference call. This is Harry Vafias, the CEO of Telgas, and with me on the call is Mrs. Fenia Sakellaris, our finance officer. Before we commence our presentation, I'd 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 all take a moment to read that disclaimer on slide two of this presentation. risk further disclosed in stealth gas filing with the Securities and Exchange Commission. I would also like to point out that all amounts quoted unless otherwise clarified are implicitly stated in U.S. dollars. Slide 3 summarizes the key highlights of our third quarter 2020 results that we released today. It's a fact that all throughout the third quarter, market uncertainty brought upon by the COVID-19 pandemic persisted. In some areas, particularly in Europe, the market was soft most of the time. with very few period charted opportunities and a spot market providing employment opportunities but not at satisfactory rates. Setting aside the broader market sentiment, this quarter Stealth Gas had to face two important cost obstacles. The first is the increased crew cost as a result of the restrictions and controls pertaining crew changes and controls as precautionary measures against the COVID-19 pandemic. The second was a quite heavy dry docking schedule we faced this quarter as we underweighed dry dockings for our Afromax tanker and four of our small LPG ships. In spite of these obstacles, we are quite satisfied with our operational and financial performance, as it shows that our strategies allowed us to successfully navigate through unusually rough market conditions. Focusing on our operations, our fleet utilization for Q3 2020 was about 97%, with about 115 days of technical off-hire, as a result of our heavy dry docking schedule. In terms of our operational utilization, this came in at 96%, mainly due to 10 of our ships being in the spot market, which is equivalent to 21% of our voyage days. In spite of our increased spot presence dictated by current market environment, our commercial fire was minimum as we managed to keep all our spot vessels employed with short waiting times. Going forward, we have about 69% of our free days secured on paid charters for the remainder of the year, with total free deployment days for all subsequent periods generating approximately $80 million in contracted revenues. Including the time charter agreements of our JV structures, total secured revenues increased to close to $100 million. During Q3 2020, we took delivery of a 7,500 cubic meters new building LPG vessel, the EcoAlice, While in early November, we sold one LPG vessel, the Gas Nemesis II, for federal trading. Looking at our financial performance highlights, our voyage revenues came in at $37.1 million, marking an increase of half a million compared to the same period of last year, mainly due to improved revenue stemming from our LPG and Afamax time charters. Our daily time charter equivalent continues to rise. Compared to the same period of last year, our daily time charter equivalent increased by about $1,000, driven by increased revenue generated from our time charters, in conjunction with a 25% decline in voyage costs, mostly due to lower banker prices. With an adjusted debita of about $16 million, our adjusted net income came at $3.2 million, corresponding to an adjusted EPS of $0.08, a solid performance amidst a very difficult market. Slide 4 provides an analysis of our fleet employment. In terms of charter types, out of a fleet of 42 operating vessels, excluding our eight JV vessels, we have five of these on bare boat, 26 on timed charters, and 11 spot. Compared to the previous quarter, we organized a delivery of four of our small LPG vessels employed on bare boat charters, following big gas filing for insolvency. The delivery of these vessels went smoothly, and one of them is already on a peer charter. With regards to the impact On our company, as a result of this incident, our secured revenues going forward were reduced by quite a significant amount. In addition, we expect next quarter to see a rise in our operating cost base. In spite of the difficult economic environment, since our last announcement, we concluded five new charters and charter extensions. Our period coverage for the remainder of 2020 is in the order of 68%, while currently our period coverage for 2021 is 33%. Our contracted revenues are close to $80 million, and including our JVs, total secured revenues increased to close to $100 million. In slide 5, I'd like to provide a summary update as to our two joint venture performances. With regards to our first joint venture, comprised in its majority of small FPG ships, we currently have two of the five ships under time-chartered contracts. The time-chartered contract for the medium gas carrier, the EcoNebula, was recently extended for a period of another three months. Given the soft market conditions, the three vessels in the spot market marked a poor performance and consequently did not add significantly to profitability. Focusing on the second joint venture, comprising of three medium-sized ships, these are all under time-charted contracts, thus producing a steady cash flow. One of our vessels, the Gaschem Hamburg, underwent its scheduled dry docking within Q3 2020, thus affecting profitability for the quarter. The remaining two vessels would undergo their dry docking within the fourth quarter. On slide 6, we provide you with a brief summary of our recent S&P activity. On September 30th, we took delivery of a 7,500 cubic meter new building pressurized ecovessel, the EcoAlice. This vessel was acquired with full equity, which is the reason why we witnessed a decline in our free cash at the end of the third quarter. The related loan drawdown took place at the beginning of October, thus increasing our cash base once more. In addition, and as we mentioned earlier on our call, we sold the LPG Gas Nemesis II for further trading. With these two transactions, the average age of our fleet is now 9.5 years. In a few months' time, we will complete our acquisition for the delivery of an 11,000 cubic meter eco-new building, the Eco Blizzard. Financing for this vessel is already in place, so our equity contribution will be in the order of about $4 million, and with about $55 million of free cash on the gas balance sheet to date and another $10 million on top, In our JV structures, capital expenditure commitments are fully covered. In terms of our fleet geography in slide 7, our company focuses on regional trade and local distribution of gas. This graph is a snapshot of the positioning of our LPG vessels, excluding the JV ships, as of November 12, 2020. Currently, we have 18 of our LPG vessels trading in Europe, 13 in the Middle East, Far East and five vessels in Africa and only two in America. And I turn over to Mrs. Fenia Sakellaris for the financial performance.

Thank you, Harry, and good morning to everyone. I will continue the presentation focusing on financial performance for the third quarter of 2020. As mentioned earlier in our call, even in these uncertain market conditions and even with a heavy dry docking schedule we had to undergo in the third quarter, We managed to preserve our revenues at quite high levels and produce a satisfactory profitability. For this, we relied on the solid revenues produced by a vessels under period contract, the low oil price preserving banker costs at moderate levels, and our declining finance costs due to the lowering of our debt and very low LIBOR rate. Let us move on to slide 8, where we see the income statement for the third quarter of 2020 against the same period of the previous year. Voyage revenues came in at 37.1 million Marking a half a million increase compared to the same period of last year. This increase is attributed to a rise of our time charter revenue, stemming from our small LPGs, our 22,000 semi-rev versions, and our Afromax tanker. From the fourth quarter of 2019 and up to the COVID-19 pandemic outbreak, we managed to lock time charter contracts at better rates than previously, just boosting our revenue stream and offsetting the lower revenues earned in the spot market. Voyage costs amounted to 3.8 million, marking a 24% decrease compared to Q3 2019, in spite of higher exposure in the spot market due to the decline of banker costs by almost 20%. Based on all of the above, our net revenues for the period were 33.3 million, corresponding to a net revenue margin of 90%. Running costs at 13.8 million marked about 12% decrease compared to Q3 2019, mostly attributed to two of our vessels, a small LPG and Arafra Max tanker coming off bare boat, as well as increased crew costs faced due to the COVID-19 pandemic. Indeed, compared to the second quarter of 2020, our crew expenses related to crew changes in conjunction with port restrictions and safety travel requirements increased in the third quarter by approximately 500,000. Dry docking costs at 2.3 million correspond to the dry docking of Arafra Max tanker and four small LPG vessels. We had communicated that within 2020 we had to undergo the completion of nine dry dockings. The remaining four will take place at the fourth quarter of this year. General administrative costs decreased compared to the same period of last year by about 500,000, mainly as our stock compensation plan, active in the same period of last year, ended in August 2019. Based on all of this, our adjusted EBITDA is in the order of 16 million. Interest and finance costs marked close to a 2 million decrease, mainly attributed to LIBOR decrease in the lowering of our debt. Based on all the points analyzed above, we ended the second quarter of the year with an adjusted net income of 3.2 million, corresponding to an adjusted EPS of 8 cents. We further on added to this year's profitability, so for the whole nine months of 2020, our adjusted net income is 12.6 million, corresponding to an adjusted EPS of 41 cents, a fairly good performance given the difficult market we're in. Slide 9 demonstrates a performance indicator for the period examined. As mentioned earlier on, our operational utilization of Q320 was in the order of 96%, a fair performance. In terms of our adjusted time charter equivalent, we noticed a rise on our quarterly braces by about $750 daily, an outcome mainly to improved time charter rates from spoiled LPGs which prevailed in the beginning of 2020 prior to the COVID-19 pandemic, improved time charter rates for our 22,000 semi-refrigerated vessels, and the time charter contract for our single Aframax tanker currently producing a strong revenue. Looking at our balance sheet in slide 10, our free cash is in the order of 28 million. As mentioned, the decline in our free cash base is due to the all-equity payment of our new building LPG vessels delivered at the end of the third quarter. Related loan drawdown took place in the beginning of October 2020, thus increasing our cash base once more. Our gearing has declined and is now in the order of 36.5%. Based on our scheduled principal repayments, we will reduce our leverage by around 40 million per year going forward. We have no balloon refinancing due in the remainder of 2020, with balloon obligations of around 30 million in 2021, for which we will have fully concluded refinancing before the end of this year. Consequently, we anticipate the current portion of long-term debt to be reduced in our upcoming results by around the same amount. I will now hand you over to our CEO, Mr. Harry Vafias, who will discuss market and company outlook.