Imperial Petroleum Inc.

Good morning, everyone, and thank you for joining us for our fourth quarter in 12 months, 23 results. I'm Harry Vassas, the CEO, and with me today is Mrs. Akilaris, who will be discussing our financial performance. Before we commence, please read slide number two. In essence, it's made clear that this presentation may contain some forward-looking statements as defined by the Private Securities Litigation Reform Act. who raised the attention of our investors to the fact that such forward-looking statements are based upon the current beliefs and expectations of Imperial Petroleum and are subject to risks and uncertainties which could cause future results to differ materially from these forward-looking statements. We would like to note that the slides of the webcast will be available in an archive on our company's website. In addition, before we commence our discussion, we would like to clarify that we will quote monetary amounts These, unless explicitly stated, are all denominated in U.S. dollars. On slide three is a summary of our performance highlights. For us, the key takeaways of last year is our strong performance and the impressive rise of our share price. The last couple of quarters of 2023 were softer than anticipated. In Q3 2023, we witnessed a typical market contraction due to seasonal factors, while in Q4 we faced a weak market in the east which especially hurt the performance of our product tankers. Nevertheless, Imperial Petroleum, a company of only nine ships on the water, managed in 2033 to generate about 184 million in revenues, that is 90% higher than 2022. An EBITDA of 82 million and a net income of the year of 71 million, marking an impressive 141% increase against the profitability of 2022. Our average daily time chart equivalent for 23 was in the order of 35,000 per day. Looking at our Q4 results, these were lower than expected as our two scheduled dry dockings and strategic repositioning of our product tankers situated east produced idle time. Operational-wise, we ended the quarter with a utilization of 69%, while having a predominant presence in the spot market. From a financial standpoint, we generated a net income of $6.5 million compared to $13.8 million of net income in Q4-22. In September 23, we announced a dynamic share buyback program. To date, the company has repurchased a total of 4.2 million shares for a total amount of $8.3 million. Indeed, since our share buyback announcement, the price of MPP has nearly doubled. As a means to further enhance shareholders' value, in December 2023, the company also repurchased 3.2 million outstanding warrants. Markets' prospect seems positive. Currently, the tanker market is affected by the various ongoing geopolitical pressures like the Russia-Ukraine conflict, which in principle has boosted ton-mile demand, the tension in the Middle East, the Whovia attacks in the Red Sea, and the semi-closure of the Panama Canal. The duration and future impact of these pressures is now known, but nevertheless, market fundamentals in terms of demand, which increased by 2.2 million barrels in 2023, lowered the book, an aging fleet, set the foundations for a prominent market going ahead. On slide four, we provide a summary of our current fleet deployment. Both of our handy-sized bulk carriers are on a short-time chart as expiring in February and April, respectively, at fairly better rates compared to the previous quarter. Since Q4-23, the dry bulk markets have stabilized, mainly due to a rise in Chinese steel exports and thermal coal imports. Looking at the tanker fleet, our product tanker, the Magic One, is under a short time charter, while the rest of our tanker fleet is in the spot market. Spot rates remain favorable, and hence, as a general trend, owners prefer spot activity than committing vessels on time charters. Spot rates for Afromax and Suezmax vessels are close to 50,000 a day, while rates for product tankers are in the region of 40,000 a day. The disruptions in the Red Sea, which commenced in November 23, have led to an upward shift in rates, but we do witness some daily volatility. On slide five, we're reviewing the tanker market. During the last quarter of 23, the tanker market was affected by several variables. On the one hand, we witnessed geopolitical pressures, such as Israel's conflict with Gaza, and most recently the Houthi attacks in the Red Sea, creating an upward pressure on rates, particularly for the clean tankers. On the other hand, softer winter conditions, along with seven imposed production cuts by Russia and Saudi Arabia, resulted in lower demand in global oil inventories. It's expected that the need to refill these inventories will result in a growth in transportation demand, especially in the first half of 2024. Overall Q4, there was a clear gap in tanker earnings between West and East. In the East market, we saw exports constrained as one million barrels per day of capacity entered maintenance. As Eastern products supply for demand has tightened, flows into the Atlantic basin dropped. However, the downward pressure on rates was partially offset by strong Western market, particularly for product tankers, as the lower water levels in the Panama Canal reduced transits into the U.S. Gulf, leading to a temporary tightness of vessel supply in the Atlantic basin. Going forward, we expect demand to firm and tanker eggs to remain strong at the back of high trade volumes and slower tanker fleet growth. In addition, the fact that demand is growing in the Asia-Pacific while supply is growing in the Americas causes the market imbalances to increase. This ultimately leads to growing transportation volumes and sailing distances. In the near term, should Cape and Shua's diversions remain in place, when Chinese purchasing resumes, we may witness a further increase in rates. On slide six, we're focusing on the crude tanker market. Trade volume growth is expected to increase by 2.5% this year and 1.5% next year. The order book to fleet ratio for crude tankers currently stands at 4.3%, so fleet growth will be quite moderate in the years ahead. We do foresee an increase in ton-mile demand for product tankers as well. The current order book for MR tankers is higher than product tankers in the order of 7.5%. However, 20% of the MR fleet is above 20 years of age, so we do expect demolition to intensify in the years ahead. A development that might positively affect the MR trade is the recent strategic shift of several LR2 tankers from trading clean to dirty cargoes in order to benefit from higher earnings. Should the Red Sea situation continue, we might see more of these trade shifts, which may positively affect demand and rates for MR tankers. Looking briefly at the dry bulk segment, in 2024, dry bulk trade is expected to expand by 2%. Vessel utilization rates have improved, and this is currently reflected in both asset values and rates. I will pass the floor to Mr. Kailash, who will provide you a summary of our financial performance.

Thank you, Harry, and good morning to everyone. 2023 was a very strong year for Imperial Petroleum. As compared to 2022, we managed to increase our revenues by 87 million, or 97%. and our net income by about 42 million, which is equivalent to 141% growth. As we discussed earlier in our call, Q3-23, in particular Q4-23, were softer than anticipated, thus our profitability was somewhat lower than expected. In Q4-23, we faced a weak east market for product tankers. Two of our product tankers operating east, the Clean Nirvana and the Clean Thrasher, were repositioned to the Atlantic and therefore spent significant time without employment. These vessels were subsequently fixed at better rates than what was available in the east. More over, in Q4-23, two of our vessels, the tanker, the Swiss Protopian, a handy-sized dry bulk carrier, the Echo Wildfire, underwent their scheduled dry docking, so these ships faced idle time as well. Looking at our income statement for Q4-23 on slide 7, revenues came in at $29.9 million compared to $37.9 million in the same period of last year, a 31% decrease due to smaller fleet by an average of one vessel and off-hire days due to technical and commercial reasons. The total of hire including dry dockings and repositioning of vessel was about 300 days for the quarter. Voyage costs increased by 3.3 million due to an increase in banker costs as a result of 65% rise in spot days and then 0.8 million increase of port expenses. A running cost decreased by 0.7 million compared to the same period of last year due to the decrease of our fleet by an average of one vessel. In terms of dry docking costs, these amounted to 2.5 million as one of our Suez McTanker and one of our dry bulk carrier underwent dry docking. Basically above, we generated an EBITDA of 8 million compared to an EBITDA of 17.8 million in Q4-22 and an end profit of 6.5 million compared to a 13.8 million net income in Q4-22. In terms of us earning per share, this has been affected by a dim dividend as a result of the conversion of the preferred series C shares. As explained in our press release, this is a non-cash item, does not affect our net income, and simply affects the computation of the EPS for the period. So for the quarter of 2023, our EPS comes down to a loss of 2 cents per share. For the full year of 2023, our EPS came in at 3.22 per share, which is currently higher than our share price. Moving on to slide 8, let us take a look at our balance sheet for the 12 months of 2023. After December 31, 2023, we had a total cash, including tax deposits, of about 124 million. Our operating cash flow for the 12-month period came in at 80 million. Thus, in a 12-month period, we generated from our fleet operations cash almost equal to our current market capitalization. We have no outstanding leverage and minimum liabilities as our equity-to-asset ratio is in the order of 96%. Proceeding to slide 9, we provide a snapshot placing efforts on our solid financial position. As of the end of the year 2020, our cash balance was close to 124 million. We have been very active treasury-wise, utilizing our free cash, leveraging upon a high deposit rate environment. For 2023, our interest income was in the order of 5 million. As long as rates are favorable, we will continue to commit our excess cash on time deposits. One of our obligations in terms of capital expenditure is that including our upcoming vessel deliveries, we have two scheduled dry dockings, one in Q1-24 and one in Q2-24. Further to this, our next dry docking is due in Q1-2026. Concluding our presentation with slide 10, we summarize our strong points. Our financial position is healthy, We have a proven track record of continuous profitability, and our share buyback program seems to be bearing fruits. At this stage, our CEO, Mr. Hari Vathias, will summarize our concluding remarks for the period examined.

Since our listing approximately two years ago, we managed to almost triple our fleet, accumulate more than 100 million of cash, pay off all of our bank loans, and excel in terms of profits. For 2023, our profitability was 71.1 million, which is 141% higher than that of 2022. Since September 23, we have commenced our share buyback, and to date we have purchased 4.3 million common shares and 5.8 million of outstanding warrants for a total consideration of about $10 million, while since our share buyback announcement, our share price has dabbled. We would like to thank you all for joining us at our conference call today and for your interest and trust in our company, and we look forward to having you with us again on our next call for our Q1 24 results. Thank you.