StealthGas, Inc.

Good day and thank you for standing by. Welcome to the GUS first quarter 2022 conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you will need to press star and 1 on your telephone keypad. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Michael Jolliffe, Chairman of the Board. Please go ahead, sir.

Thank you very much, Nadia. Good morning. This is Michael Jolliffe. And joining me on our call today is Harry Vafias, our chief executive officer, and Konstantinos Sistovares, who will be handling the investor relations to discuss the financial aspects. Before we commence our presentation, I would like to remind you that we will 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 our disclaimer on slide two of this presentation. Risks are further disclosed in stealth gas filings with the Securities and Exchange Commission. I would also like to point out that all amounts quoted, unless otherwise clarified, are implicitly stated in United States dollars. Today we release our earnings results for the first quarter, which was also the first quarter of trading as a pure LPG company, and we saw a fantastic improvement compared to last year. So let's proceed to discuss these results and what we see in the market in general. Turning to slide three, we summarise the highlights of our first quarter. In the first quarter of 2022, we faced an improved LPG market, particularly in Europe. Hence, we took the opportunity and continued to secure more vessels trading in the area on period charters. On the other hand, the market in Asia was stable, but we also managed to secure more period charters. In terms of operational utilization of our fleet at 92.7%, it was at similar levels to last year, a figure we aim to improve as we had one vessel to dry dock and did experience off-hire days on the spot ships. However, we marked an 18% reduction of spot days quarter on quarter and 65% year on year, managing to earn better returns on time-chartered vessels than on spot ships. We now have 59% of our fleet days secured on period charters for the remainder of 2022, with total fleet employment days for all subsequent periods generating almost $70 million, and that excludes the joint venture vessels, in contracted revenues. In terms of our sale and purchase activity during the quarter, we completed the previously announced sale of two vessels, the Echo Loyalty and the Gas Inspiration, to their new owners. In addition, In the current quarter, we entered into an agreement for the sale of our oldest 5,000 cubic meter LPG vessel, the 1997 built gas Monarch, again for further trading, and we delivered the vessels on May the 23rd. All these transactions further enhanced our cash base. Looking briefly into our financial highlights, we need to keep in mind that in the last year's quarters mentioned, Besides any sale and purchase activity, are included the four tankers that were part of the spin-off last December and are no longer in our fleet. In quarter 1-22, voyage revenues came in at $35.9 million, $1.5 million lower than in quarter 1-21, partly as a result of fewer vessels on the spot market and partly due to the fewer number of ships, including the four tankers. Overall, comparing the LPGs in our fleet, we saw a rise in revenues year on year, and this can be seen in the TCE revenues that came in at $31.6 million compared to $30.5 million last year, an improvement despite having fewer ships. Where we can better see the effects of the absence of the tanker vessels is in the operating expenses, where there was a $2.2 million reduction to $12.9 million, and in depreciation expense, where there was a $2.5 million reduction to $7 million. Our net profit for the quarter was $7.6 million compared to $0.8 million for the same period last year. Whilst on an adjusted basis, excluding impairment charges, we ended the quarter with net profits of $8.8 million compared to 0.6 million in quarter 1-21 and 2.8 million in quarter 4-21. Our adjusted income for the quarter corresponds to an adjusted EPS of 23 cents. We manage this while at the same time increasing our cash and cash equivalents from 31.3 million at the end of last year to 70.4 million at the end of quarter 1-2022. or 82.4 million, including restricted cash, mainly through the sales we completed and the refinancing of six vessels during the first quarter. We continue to be well capitalized, maintaining a low debt ratio of 37%. Let us move on to slide four for our fleet employment update. In terms of charter types, and as of May 2022, And out of a fleet of 34 LPG operating vessels, excluding our seven joint venture vessels, we have two on bare boat, 30 on time charters, and only two in the spot market. At the end of last year, we had four vessels on bare boat charters. Two of these expired towards the end of quarter one, and the remaining two we will get delivery from their bare boat charters within the coming weeks. Since our previous announcement, we successfully concluded eight new charters and charter extensions. These new fixtures involve vessels previously on bare boat or in the spot market, and were all done at similar or improved rates. Our period coverage for the remainder of 2022 is in the order of 59%. We have close to 70 million of secured revenues going forward. 55 million of which is expected to be received within the remainder of 2022, similar figures to the previous quarter. In slide 5, I would like to provide an update as to our two joint ventures, where we also saw improved performance in both, contributing $1.7 million to our bottom line. Since our last call, all vessels are now time-chartered, Our first joint venture, which comprises in its majority of smaller LPG vessels, had the gas defiance time chartered for three months, while in our second joint venture, comprising of two medium gas carrier vessels, plus one more under construction. Gas Chem Bremen was chartered for a one-year time charter. During the first quarter, we received $1 million in dividends from the joint ventures, improving our cash flow. Our joint venture arrangements combined have a solid cash base of about $43 million. We do not expect to have any capex related to the delivery in 2023 of the new building medium gas carrier, as the joint venture itself has enough cash in hand after the sale of one vessel last year to fund the acquisition, together with any finance proceeds to be arranged. After all, The rise in new building prices across all sectors includes these medium gas carriers and underpins the financing to be sought. In terms of our fleet geography in slide six, our company focuses on regional trade and local distribution of gas. This graph is a snapshot of the positioning of our vessels, excluding our JV vessels, as of May 2022. Currently, half of our fleet is 16 vessels trade in Europe, 14 vessels trade in the Middle and Far East, and two vessels trade in the U.S. and Caribbean, and three in Africa. Given the better market in Europe, we would expect to see more vessels moving there if the opportunities arise. I will now turn the call over to my colleague, Konstantinos Sistovares, for our financial performance.

Thank you, Michael, and good morning to everyone. I will discuss our financial performance for the first quarter of 2022. Let us turn to slide seven, where we see the income statement for the first quarter of 2022 against the same period of the previous year. Voyage revenues came in at 35.9 million, marking a decrease of 1.5 million, about 4%, compared to the same period of last year. partly due to the fewer vessels in the spot market. Our spot market actually decreased by 65% and partly due to the fewer number of vessels we had. 36.5 average vessels in the first quarter of 2022 versus 41.6 average vessels during the first quarter of 2021. We should also note the increase in the voyage and TCE revenues of the four handy-sized LPGs in the fleet that were all chartered at high rates in a stable market, albeit starting from a lower base. Voyage costs decreased by 2.7 million compared to the same period last year. This decrease in voyage expenses was partly due to the absence of tankers in the 2022 results and partly due to the decrease in spot days where we are responsible for the voyage costs of these vessels. Based on all of the above, our net revenues for the period were in the order of $31.6 million compared to $30.5 million last year, about 4% up. Operating expenses saw a significant reduction of $2.2 million, about 15%, compared to Q1 2021. due to the fewer number of vessels. Were we to exclude this effect, our OPEX would be along the same levels as last year, a positive result given that we continue to face cost pressures, particularly in crew costs due to the COVID-19 pandemic. In terms of dry docking costs, we had 0.4 million in the first quarter of 2022 from one vessel. We expect to dry dock another five vessels during the year. Depreciation is another item that saw a large decrease from 9.5 million to 7 million due to the decrease in the number of vessels. During the previous quarter, there was also an impairment charge of 0.5 million related to the sale of the gas Monarch that took place in the current quarter. and a $0.4 million loss on the sale of the gas inspiration. Interest and finance costs declined considerably from $3.1 million to $2.4 million, partly due to the decrease in the average debt during the two comparable periods, and partly due to the decrease in the average cost due to our reduction in the loan margins. We expect this trend to reverse in the future as we will start seeing the effect of the recent interest rate increases in the coming quarters. As a result of all the points analyzed above, we ended the first quarter of 2022 with a net income of 7.6 million and adjusted net income, that is excluding impairment and vessel sales, of 8.8 million, corresponding to an earnings per share of 23 cents. a tenfold increase compared to the meager two cents of the same period of last year. Looking at our balance sheet in slide eight, our liquidity, including restricted cash, was at the end of the quarter in the order of 82.4 million, a substantial increase from the 52.8 million in the first quarter of 2021 and 45.7 million in the fourth quarter of 2021. The increase in liquidity came primarily from the refinancing and vessel sales, and secondarily from operations and an increase in payables. We also received a $1 million dividend from our JV investments during the first quarter. The total value of our investments in our JV is $54 million. The overall outstanding debt is $300 million, similar to the levels at the end of last year. We expect our debt amortization going forward to be in the region of 7.5 million per quarter, while it was close to 10 million per quarter a year ago. Furthermore, we have no planned capital expenditure at this moment. Concluding our financial commentary with slide nine, we will briefly discuss our debt profile and capital structure. As mentioned before, since the beginning of 2021 and up until February, 2022 we underwent the important project of refinancing 20 versus that succeeding in first reshaping our loan portfolio and deferring balloon payments our first balloon payment is now due in March 2025 and second enhancing our free cash by about 16 million an outcome of our last refinancing that place in February we also reduced our average loan margin and as all the new loans were at lower margin levels than the previous ones. Compared to the end of last year, we slightly increased our debt, but our net gearing remained low due to the increased liquidity. After the sale of the Gas Monarch, we continued to have six unencumbered vessels. During the first quarter, we also entered into a new swap arrangement to hedge part of the interest rate exposure. As a result, interest rate hedges are in place for 36% of our debt. I will now hand you over to our CEO, Harry Vafias, who will discuss market and the company outlook.

Going on slide 10, we are providing some insight on the LPG market. Needless to say that given the current geopolitical tensions in Ukraine, along with the ongoing COVID-19 pandemic, it's very difficult to foresee our market's performance. On the positive side, during the first few months of 2022, the US, the largest exporter of LPG, has ramped up its exports over 10%, and China has been importing a bigger share of its LPG imports from the US. However, China, in the first quarter of the year, decreased its imports as a result of the COVID-19 policies. It has followed with a 7% year-on-year decrease. We expect that this will reverse, and China will continue to be the main demand driver. But for the time being, such a slack in demand is being fueled by increased imports from other Asian countries, particularly India, that saw its imports rise by 17%. India mainly sources its LPG from the Middle East, so some of the LPG has been redirected from U.S. to Europe. Now, 30% of European LPG imports are from the U.S., and it's possible we'll see increased volumes in the future. In addition, LPG imports of northwestern Europe are expected to increase in the years ahead on the back of a rising petrochemical demand. European interregional LPG trade is a large market for small LPGs and has held pretty well given the circumstances. The continuing war in Ukraine has created difficulties in trade with Russia. Even those who speak the U.S. and Europe have not sanctioned LPG imports. As a result, we expect European countries to try and reduce their dependency on Russian imports. The biggest importers of Russian LPG have been Poland, Finland, and Ukraine, usually done through rail cars. So a disruption in imports could be countered either from other sources further afar or from switching to alternative fuels. It's not yet clear what the impacts will be. We can only hope that the war will end soon. Slide 11, we present the key fundamentals of our small LPG market, commencing with market shares evolution. During Q122, rates improved slightly, all small LPG subsegments on a quarter basis. Not as large as an increase as we witness year over year, particularly for the vessels trading in the west. Looking at the small LPG trade west of Suez, the healthy spot market through the winter moths are continuing to spring, and owners have enjoyed the tight market and healthy numbers paid. At times, cargoes have been withdrawn due to unavailability of vessels. We don't expect a correction in the market leading into the summer and activities slow down somehow. But the market is quite well balanced and it doesn't take more than a couple of vessels to leave the area in order for things to be tight again. East of Suez, the spot market in Asia remained quite active until around the time China locked down Shanghai Since then, things have been less active, especially on the pet chem side. Hopefully, reopening in China will give a boost to the market once more. However, we are now going into the turnaround maintenance season for the pet chem plant, so we don't expect too much change in the market for the next couple of months. On the period side, activity has been lower, but rates have generally remained at a healthy level. We have, however, seen several vessels leaving Asia and going to the Atlantic in the last five months, so this has been a positive in keeping a reasonable market balance in the region. The fundamentals for our core fleet continue to look promising. There continues to be an overhang of many older ships in the fleet over 20 years of age, which we expect will keep scrapping activity elevators sooner or later. New environmental regulations will also make it harder for older vessels to trade. The ordering activity continues to be subdued partly because of difficulties in finding yard availability and partly because new building prices have risen together with the recent surge in inflation globally. New environmental regulations related to emissions and a lack of clear direction on the matter of fuel choices make the ordering of new ships a more risky decision. Aspirations published orders, there are 19 vessels on order, nine in Japan and Korea, intent to be built in China to be delivered until the end of 2024 that we consider to translate to a favorable sub-2.5% annual increase in the fleet before scrapping. Slide 12 presents our company share performance since the beginning of 2022. Our share price has risen over the few past months in a very volatile market. Albeit, it has lagged behind crude oil rises and other companies in the wider sector. Gas stocks still trades at a discounted NAV. In slide 13, we are outlining the key variables that will affect our performance in the quarters ahead. Given the market turmoil, especially now with the current situation in Ukraine and the COVID situation in China, it's quite difficult to make market predictions. A strong point going forward is that we have a sizable and quite diversified LPG fleet that we can easily leverage upon any further market improvement and continue to have manageable debt levels. In addition, and as we have seen in the past, the oil price surge may increase demand for LPG, particularly for industrial use. Our market fundamentals are quite solid as we enjoy a relatively low order book while 27% of the industry fleet is above 20 years of age. On the downside, and given the recent geopolitical crisis, inflationary pressures on our costs may become stronger. Regardless of the global situation, our focus in the following quarters will be to adapt now to the seaborne trade in our LPG market will shape while relying upon our strong fleet and robust capital structure. We feel confident that our strategic decision to make Stelvia a secure-play LPG company across the broader LPG spectrum will pay off and strengthen our asset returns. At this stage, our Chairman Michael Jolliffe will summarize our concluding remarks for the period examined.

Thank you, Harry. We are very pleased with the results we announced today, as it was one of the best quarters for our company over the last few years. Following the strategic decision to become a pure player in the broader LPG market, this was the first quarter that the Stealth Gaps fleet consisted of only LPG carriers of various sizes. During the first quarter, the improving LPG market continued its upward trend, and we managed to capitalize, hosting improved profits of 7.6 million, one of the best quarterly results in many years. On an adjusted basis, our EPS for the quarter was 23 cents. We also managed to contain cost pressures, particularly related to crew and bunker prices that continue to push our cost base. That being said, we continue to operate in a challenging geopolitical environment with the war in Ukraine and the COVID-19 pandemic, particularly with regard to the situation in China, still ongoing and creating more uncertainty for the future. Now we can also add economic uncertainty as a result of high inflationary pressures and rising interest rates. How all this will affect the LPG shipping market and whether we will be able to benefit from any change in trade patterns remains to be determined, as this is a market that is still seeking direction. Going forward, we cannot predict our market's reality, especially in such turbulent times. However, our sizeable fleet, our market's strong fundamentals, LPG rates improvement in the first quarter of 2022, along with our healthy capital structure are the strong points at which we will rely, no matter any potential market disturbances we might need to face. We have now reached the end of our presentation. And we would like to open the floor for your questions. So operator, please open the floor. Thank you.

Thank you. Dear participants, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and 1 on your telephone keypad and wait for a name to be announced. The first question comes from Chris Robertson from Jefferies. Please ask your question.

Good morning, gentlemen. Thanks for taking my questions.

Good morning.

So it looks like you have seven scheduled dry dockings this year. Can you talk about kind of the cadence around that? How many were completed during the first quarter? And what's your expectation for total off-hire days this year?

We had one already. But it's not easy to calculate the off-hire because that will depend on where. in which country the dry dockings will take place. And it also depends if China will be open for dry dockings, because that makes a huge difference on costs and of hire. So I think we have to see that closer to the dry docking dates.

Are any in the yards during 2Q, or are you trying to wait it out to see what happens with the China easing lockdowns?

As market is hot, obviously we try to be late as much as it's allowed by class. We don't have any vessels now on dry dock. And as I said, if China does open, that will be a big projected reduction on cost of fire because China is cheaper than most other places.

Okay, got it. And for that one that was in dry dock during the first quarter, I believe it was off-hire of 61 days during one queue. Was that 100% related to that one vessel?

No, I don't think that's right. We can check and come back to you if you want to send us an email on it.

Sure, I'll follow up with you offline. Thanks for that. I guess with the market improving now, And, you know, the shares still trading below NAV. Aside from a general market improvement in the LPG sector, what do you think is going to drive kind of a narrowing of that discount to the NAV?

Consistent quarterly profits.

Got it. That makes sense. Okay, guys, thank you very much for the time. That's it for me.

Thank you.

Thank you. The next question comes from Eric Newman from Tauberview. Please ask your question.

Hey, good morning, Harry. Congratulations on obviously a very strong quarter. As you guys know, we've been very long-term supportive shareholders. And my question is on capital allocation also. You guys have historically been pretty opportunistic. You've sold stock when it's gotten close to book value. You've repurchased shares in the open market and even launched a tender. But your stock now trades at $2.64. The book value at report is $12.80 per share. And you've continued to sell shares, including this past quarter, excuse me, ships, including this past quarter, with minimal impairments. And now we have a pretty meaningful cash balance. So why doesn't it make sense, even given uncertainty and continued uncertainty, to repurchase a meaningful amount of stock at this level? Or if the book is truly saleable at anywhere near these prices, how does it continue to make sense to operate the business? And what are the better uses of cash if not to repurchase stock? Thanks, guys. Appreciate it.

Thank you, Eric. As you know very well, the biggest mistake that investors do is that they're too quick to judge, either on the upside or the downside. The stock is still at these levels because we just announced results, and I guess most investors want to see if that good market persists or not, which we have seen in the past, the same psychology and mentality from the shareholder base. Now you've seen We've sold three ships, both young and old, and crystallized NAV, which again emphasizes the fact that NAV is about the numbers you talked about. And indeed, at this level, we are indeed cheap. But if we have two, three quarters with very good results and the stock price is still at about those levels, then your point will be absolutely right. We had previous quarters where the numbers were not good. And obviously people were disappointed and they did not expect that we could have this huge turnaround. Our net income this quarter was up 900%. On top of that, don't forget that the stock is not very liquid. But in the end of the day, you know we take the right decisions. I am the largest shareholder, so obviously what is best for me is best for all of you. And of course, if we continue to have these profitable quarters and the cash balance is big as it is now, of course we will buy stock as we've done before. If we have never done it, your point would be accurate. But as you said, we've done it before and we actually did a tender offer in the COVID times, which I don't think many companies had the guts to do. So the shareholders that were patient... will be rewarded as it happened in the previous upturn in 09-10.

Thanks, Eric. Appreciate it.

Thank you, Eric.

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star and 1 on your telephone keypad.

I see that there are no other questions, so we'd like to thank you for joining us at our conference call, and we are looking forward to having you again for our Q2 2022 results in August. Thank you very much.

That does conclude our conference for today. Thank you for participating. May all disconnect. Have a nice day. Thank you. Thank you. Thank you. Thank you. music music Thank you. Good day and thank you for standing by. Welcome to the GUS first quarter 2022 conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you will need to press star and 1 on your telephone keypad. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Michael Jolliffe, Chairman of the Board. Please go ahead, sir.

Thank you very much, Nadia. Good morning. This is Michael Jolliffe, and joining me on our call today is Harry Vafias, our Chief Executive Officer, and Konstantinos Sistovares, who will be handling the investor relations to discuss the financial aspects. Before we commence our presentation, I would like to remind you that we will 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 our disclaimer on slide two of this presentation. Risks are further disclosed in stealth gas filings with the Securities and Exchange Commission. I would also like to point out that all amounts quoted, unless otherwise clarified, are implicitly stated in United States dollars. Today we release our earnings results for the first quarter, which was also the first quarter of trading as a pure LPG company, and we saw a fantastic improvement compared to last year. So let's proceed to discuss these results and what we see in the market in general. Turning to slide three, we summarise the highlights of our first quarter. In the first quarter of 2022, we faced an improved LPG market, particularly in Europe, hence we took the opportunity and continued to secure more vessels trading in the area on period charters. On the other hand, the market in Asia was stable, but we also managed to secure more period charters. In terms of operational utilization of our fleet at 92.7%, it was at similar levels to last year, a figure we aim to improve as we had one vessel to dry dock and did experience off-hire days on the spot ships. However, we marked an 18% reduction of spot days quarter on quarter and 65% year on year, managing to earn better returns on time-chartered vessels than on spot ships. We now have 59% of our fleet days secured on period charters for the remainder of 2022, The total fleet employment days were all subsequent periods, generating almost $70 million, and that excludes the joint venture vessels, in contracted revenues. In terms of our sale and purchase activity during the quarter, we completed the previously announced sale of two vessels, the Echo Loyalty and the Gas Inspiration, to their new owners. In addition... In the current quarter, we entered into an agreement for the sale of our oldest 5,000 cubic meter LPG vessel, the 1997 built gas Monarch, again for further trading, and we delivered the vessels on May the 23rd. All these transactions further enhanced our cash base. Looking briefly into our financial highlights, we need to keep in mind that in the last year's quarters mentioned, Besides any sale and purchase activity, are included the four tankers that were part of the spin-off last December and are no longer in our fleet. In quarter 1-22, voyage revenues came in at $35.9 million, $1.5 million lower than in quarter 1-21, partly as a result of fewer vessels on the spot market and partly due to the fewer number of ships, including the four tankers. Overall, comparing the LPGs in our fleet, we saw a rise in revenues year on year, and this can be seen in the TCE revenues that came in at $31.6 million compared to $30.5 million last year, an improvement despite having fewer ships. Where we can better see the effects of the absence of the tanker vessels is in the operating expenses, where there was a $2.2 million reduction to $12.9 million, and in depreciation expense, where there was a $2.5 million reduction to $7 million. Our net profit for the quarter was $7.6 million, compared to $0.8 million for the same period last year. Whilst on an adjusted basis, excluding impairment charges, we ended the quarter with net profits of $8.8 million compared to 0.6 million in quarter 1-21 and 2.8 million in quarter 4-21. Our adjusted income for the quarter corresponds to an adjusted EPS of 23 cents. We manage this while at the same time increasing our cash and cash equivalents from 31.3 million at the end of last year to 70.4 million at the end of quarter 1-2022. or 82.4 million, including restricted cash, mainly through the sales we completed and the refinancing of six vessels during the first quarter. We continue to be well capitalized, maintaining a low debt ratio of 37%. Let us move on to slide four for our fleet employment update. In terms of charter types, and as of May 2022, And out of a fleet of 34 LPG operating vessels, excluding our seven joint venture vessels, we have two on bare boat, 30 on time charters, and only two in the spot market. At the end of last year, we had four vessels on bare boat charters. Two of these expired towards the end of quarter one. And the remaining two, we will get delivery from their bare boat charters within the coming weeks. Since our previous announcement, we successfully concluded eight new charters and charter extensions. These new fixtures involve vessels previously on bare boat or in the spot market, and were all done at similar or improved rates. Our period coverage for the remainder of 2022 is in the order of 59%. We have close to 70 million of secured revenues going forward. 55 million of which is expected to be received within the remainder of 2022, similar figures to the previous quarter. In slide 5, I would like to provide an update as to our two joint ventures, where we also saw improved performance in both, contributing $1.7 million to our bottom line. Since our last call, all vessels are now time-chartered, Our first joint venture, which comprises in its majority of smaller LPG vessels, had the gas defiance time chartered for three months, while in our second joint venture, comprising of two medium gas carrier vessels, plus one more under construction. Gas Chem Bremen was chartered for a one-year time charter. During the first quarter, we received $1 million in dividends from the joint ventures, improving our cash flow. Our joint venture arrangements combined have a solid cash base of about $43 million. We do not expect to have any capex related to the delivery in 2023 of the new building medium gas carrier, as the joint venture itself has enough cash in hand after the sale of one vessel last year to fund the acquisition, together with any finance proceeds to be arranged. After all, The rise in new building prices across all sectors includes these medium gas carriers and underpins the financing to be sought. In terms of our fleet geography in slide six, our company focuses on regional trade and local distribution of gas. This graph is a snapshot of the positioning of our vessels, excluding our JV vessels, as of May 2022. Currently, half of our fleet is 16 vessels trade in Europe, 14 vessels trade in the Middle and Far East, and two vessels trade in the US and Caribbean, and three in Africa. Given the better market in Europe, we would expect to see more vessels moving there if the opportunities arise. I will now turn the call over to my colleague, Konstantinos Sistovares, for our financial performance.

Thank you, Michael, and good morning to everyone. I will discuss our financial performance for the first quarter of 2022. Let us turn to slide seven, where we see the income statement for the first quarter of 2022 against the same period of the previous year. Voyage revenues came in at 35.9 million, marking a decrease of 1.5 million, about 4%, compared to the same period of last year. partly due to the fewer vessels in the spot market. Our spot market actually decreased by 65% and partly due to the fewer number of vessels we had. 36.5 average vessels in the first quarter of 2022 versus 41.6 average vessels during the first quarter of 2021. We should also note the increase in the voyage and TCE revenues of the four handy sized LPGs in the fleet that were all chartered at high rates in a stable market, albeit starting from a lower base. Voyage costs decreased by 2.7 million compared to the same period last year. This decrease in voyage expenses was partly due to the absence of tankers in the 2022 results and partly due to the decrease in spot days where we are responsible for the voyage costs of these vessels. Based on all of the above, our net revenues for the period were in the order of $31.6 million compared to $30.5 million last year, about 4% up. Operating expenses saw a significant reduction of $2.2 million, about 15%, compared to Q1 2021. due to the fewer number of vessels. Were we to exclude this effect, our OPEX would be along the same levels as last year, a positive result given that we continue to face cost pressures, particularly in crew costs due to the COVID-19 pandemic. In terms of dry docking costs, we had 0.4 million in the first quarter of 2022 from one vessel. We expect to dry dock another five vessels during the year. Depreciation is another item that saw a large decrease from 9.5 million to 7 million due to the decrease in the number of vessels. During the previous quarter, there was also an impairment charge of 0.5 million related to the sale of the gas Monarch that took place in the current quarter. and a $0.4 million loss on the sale of the gas inspiration. Interest and finance costs declined considerably from $3.1 million to $2.4 million, partly due to the decrease in the average debt during the two comparable periods, and partly due to the decrease in the average cost due to our reduction in the loan margins. We expect this trend to reverse in the future as we will start seeing the effect of the recent interest rate increases in the coming quarters. As a result of all the points analyzed above, we ended the first quarter of 2022 with a net income of 7.6 million and adjusted net income, that is excluding impairment and vessel sales, of 8.8 million, corresponding to an earnings per share of 23 cents. a tenfold increase compared to the meager two cents of the same period of last year. Looking at our balance sheet in slide eight, our liquidity, including restricted cash, was at the end of the quarter in the order of 82.4 million, a substantial increase from the 52.8 million in the first quarter of 2021 and 45.7 million in the fourth quarter of 2021. The increase in liquidity came primarily from the refinancing and vessel sales, and secondarily from operations and an increase in payables. We also received a $1 million dividend from our JV investments during the first quarter. The total value of our investments in our JV is $54 million. The overall outstanding debt is $300 million, similar to the levels at the end of last year. We expect our debt amortization going forward to be in the region of 7.5 million per quarter, while it was close to 10 million per quarter a year ago. Furthermore, we have no planned capital expenditure at this moment. Concluding our financial commentary with slide nine, we will briefly discuss our debt profile and capital structure. As mentioned before, since the beginning of 2021 and up until February, 2022 we underwent the important project of refinancing 20 versus that succeeding in first reshaping our loan portfolio and deferring balloon payments our first balloon payment is now due in March 2025 and second enhancing our free cash by about 16 million an outcome of our last refinancing that place in February we also reduced our average loan margin and as all the new loans were at lower margin levels than the previous ones. Compared to the end of last year, we slightly increased our debt, but our net gearing remained low due to the increased liquidity. After the sale of the Gas Monarch, we continued to have six unencumbered vessels. During the first quarter, we also entered into a new swap arrangement to hedge part of the interest rate exposure. As a result, interest rate hedges are in place for 36% of our debt. I will now hand you over to our CEO, Harry Vafias, who will discuss market and the company outlook.

Going on slide 10, we are providing some insight on the LPG market. Needless to say that given the current geopolitical tensions in Ukraine, along with the ongoing COVID-19 pandemic, it's very difficult to foresee our market's performance. On the positive side, during the first few months of 2022, the US, the largest exporter of LPG, has ramped up its exports over 10%, and China has been importing a bigger share of its LPG imports from the US. However, China, in the first quarter of the year, decreased its imports as a result of the COVID-19 policies. It has followed with a 7% year-on-year decrease. We expect that this will reverse, and China will continue to be the main demand driver. But for the time being, such a slack in demand is being fueled by increased imports from other Asian countries, particularly India, that saw its imports rise by 17%. India mainly sources its LPG from the Middle East, so some of the LPG has been redirected from U.S. to Europe. Now, 30% of European LPG imports are from the U.S., and it's possible we'll see increased volumes in the future. In addition, LPG imports of northwestern Europe are expected to increase in the years ahead on the back of a rising petrochemical demand. European interregional LPG trade is a large market for small LPGs and has held pretty well given the circumstances. The continuing war in Ukraine has created difficulties in trade with Russia. Even those we speak, the U.S. and Europe have not sanctioned LPG imports. As a result, we expect European countries to try and reduce their dependency on Russian imports. The biggest importers of Russian LPG have been Poland, Finland and Ukraine, usually done through rail cars. So a disruption in imports could be countered either from other sources further afar or from switching to alternative fuels. It's not yet clear what the impacts will be. We can only hope that the war will end soon. Slide 11, we present the key fundamentals of our small LPG market, commencing with market shares evolution. During Q1-22, rates improved slightly, all small LPG subsegments on a quarter basis. Not as large as an increase as we witness year over year, particularly for the vessels trading in the west. Looking at the small LPG trade west of Suez, the healthy spot market through the winter moths are continuing to spring, and owners have enjoyed the tight market and healthy numbers paid. At times, cargoes have been withdrawn due to unavailability of vessels. We don't expect a correction in the market leading into the summer and activities slow down somehow. But the market is quite well balanced and it doesn't take more than a couple of vessels to leave the area in order for things to be tight again. East of Suez, the spot market in Asia remained quite active until around the time China locked down Shanghai Since then, things have been less active, especially on the pet chem side. Hopefully, reopening in China will give a boost to the market once more. However, we are now going into the turnaround maintenance season for the pet chem plant, so we don't expect too much change in the market for the next couple of months. On the period side, activity has been lower, but rates have generally remained at a healthy level. We have, however, seen several vessels leaving Asia and going to the Atlantic in the last five months, so this has been a positive in keeping a reasonable market balance in the region. The fundamentals for our core fleet continue to look promising. There continues to be an overhang of many older ships in the fleet over 20 years of age, which we expect will keep scrapping activity elevators sooner or later. New environmental regulations will also make it harder for older vessels to trade. The ordering activity continues to be subdued partly because of difficulties in finding yard availability and partly because new building prices have risen together with the recent surge in inflation globally. New environmental regulations related to emissions and a lack of clear direction on the matter of fuel choices make the ordering of new ships a more risky decision. As per recent published orders, there are 19 vessels on order, 9 in Japan and Korea, and 10 to be built in China to be delivered until the end of 2024 that we consider to translate to a favorable sub-2.5% annual increase in the fleet before scrapping. Slide 12 presents our company share performance since the beginning of 2022. Our share price has risen over the few past months in a very volatile market, albeit it has lagged behind crude oil rises and other companies in the wider sector. Gas stocks still trades at a discounted NAV. In slide 13, we are outlining the key variables that will affect our performance in the quarters ahead. Given the market turmoil, especially now with the current situation in Ukraine and the COVID situation in China, it's quite difficult to make market predictions. Our strong point going forward is that we have a sizable and quite diversified LPG fleet that we can easily leverage upon any further market improvement and continue to have manageable debt levels. In addition, and as we have seen in the past, the oil price surge may increase demand for LPG, particularly for industrial use. Our market fundamentals are quite solid as we enjoy a relatively low order book while 27% of the industry fleet is above 20 years of age. On the downside, and given the recent geopolitical crisis, inflationary pressures on our costs may become stronger. Regardless of the global situation, our focus in the following quarters will be to adapt now to the seaborne trade and our LPG market will shape while relying upon our strong fleet and robust capital structure. We feel confident that our strategic decision to make Stelvia a pure-play LPG company across the broader LPG spectrum will pay off and strengthen our asset returns. At this stage, our chairman, Michael Jolliffe, will summarize our concluding remarks for the period examined.

Thank you, Harry. We are very pleased with the results we announced today, as it was one of the best quarters for our company over the last few years. Following the strategic decision to become a pure player in the broader LPG market, this was the first quarter that the Stealth Gap's fleet consisted of only LPG carriers of various sizes. During the first quarter, the improving LPG market continued its upward trend, and we managed to capitalize, hosting improved profits of 7.6 million, one of the best quarterly results in many years. On an adjusted basis, our EPS for the quarter was 23 cents. We also managed to contain cost pressures, particularly related to crew and bunker prices that continue to push our cost base. That being said, we continue to operate in a challenging geopolitical environment with the war in Ukraine and the COVID-19 pandemic, particularly with regard to the situation in China, still ongoing and creating more uncertainty for the future. Now we can also add economic uncertainty as a result of high inflationary pressures and rising interest rates. How all this will affect the LPG shipping market and whether we will be able to benefit from any change in trade patterns remains to be determined, as this is a market that is still seeking direction. Going forward, we cannot predict our market's reality, especially in such turbulent times. However, our sizable fleet, our market's strong fundamentals, LPG rates improvement in the first quarter of 2022, along with our healthy capital structure are the strong points at which we will rely, no matter any potential market disturbances we might need to face. We have now reached the end of our presentation. And we would like to open the floor for your questions. So operator, please open the floor. Thank you.

Thank you. Dear participants, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and 1 on your telephone keypad and wait for a name to be announced. The first question comes from Chris Robertson from Jefferies. Please ask your question.

Good morning, gentlemen, and thanks for taking my questions.

Good morning.

So it looks like you have seven scheduled dry dockings this year. Can you talk about kind of the cadence around that, how many were completed during the first quarter, and what's your expectation for total off-hire days this year?

We had one already, but it's not easy to calculate the off-hire because that will depend on where. in which country the dry dockings will take place. And it also depends if China will be open for dry dockings, because that makes a huge difference on costs and of hire. So I think we have to see that closer to the dry docking dates.

Are any in the yards during 2Q, or are you trying to wait it out to see what happens with the China easing lockdowns?

As market is hot, obviously we try to be late as much as it's allowed by class. We don't have any vessels now on dry dock. And as I said, if China does open, that will be a big projected reduction on cost of fire because China is cheaper than most other places.

Okay, got it. And for that one that was in dry dock during the first quarter, I believe it was off-hire of 61 days during one queue. Was that 100% related to that one vessel?

No, I don't think that's right. We can check and come back to you if you want to send us an email on it.

Sure, I'll follow up with you offline. Thanks for that. I guess with the market improving now, And, you know, the shares still trading below NAV. Aside from a general market improvement in the LPG sector, what do you think is going to drive kind of a narrowing of that discount to the NAV?

Consistent quarterly profits.

Got it. That makes sense. Okay, guys, thank you very much for the time. That's it for me.

Thank you.

Thank you. The next question comes from Eric Newman from Tauberview. Please ask your question.

Hey, good morning, Harry. Congratulations on obviously a very strong quarter. As you guys know, we've been very long-term supportive shareholders. And my question is on capital allocation also. You guys have historically been pretty opportunistic. You've sold stock when it's gotten close to book value. You've repurchased shares in the open market and even launched a tender. But your stock now trades at $2.64. The book value at report is $12.80 per share. And you've continued to sell shares, including this past quarter, excuse me, ships, including this past quarter, with minimal impairments. And now we have a pretty meaningful cash balance. So why doesn't it make sense, even given uncertainty and continued uncertainty, to repurchase a meaningful amount of stock at this level? Or if the book is truly saleable at anywhere near these prices, how does it continue to make sense to operate the business? And what are the better uses of cash if not to repurchase stock? Thanks, guys. Appreciate it.

Thank you, Eric. As you know very well, the biggest mistake that investors do is that they're too quick to judge, either on the upside or the downside. The stock is still at these levels because we just announced results, and I guess most investors want to see if that good market persists or not, which we have seen in the past, the same psychology and mentality from the shareholder base. Now you've seen We've sold three ships, both young and old, and crystallized NAV, which again emphasizes the fact that NAV is about the numbers you talked about. And indeed, at this level, we are indeed cheap. But if we have two, three quarters with very good results and the stock price is still at about those levels, then your point will be absolutely right. We had previous quarters where the numbers were not good. And obviously people were disappointed and they did not expect that we could have this huge turnaround. Our net income this quarter was up 900%. On top of that, don't forget that the stock is not very liquid. But in the end of the day, you know we take the right decisions. I am the largest shareholder, so obviously what is best for me is best for all of you. um and of course if we continue to have these profitable quarters and the cash balance is big as it is now of course we will buy stock as we've done before if we if we have never do it your point would be accurate but as as you said we've done it before and we actually did a tender offer in in the covered times which i don't think many companies had the guts to do so the shareholders that were patient will be rewarded as it happened in the previous upturn in 09-10.

Thanks, Eric. Appreciate it.

Thank you, Eric.

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star and 1 on your telephone keypad.

I see that there are no questions, other questions, so we'd like to thank you for joining us at our conference call, and we are looking forward to having you again for our Q2 2022 results in August. Thank you very much.

That does conclude our conference for today. Thank you for participating. May all disconnect. Have a nice day.