Harry Vafias-controlled StealthGas has reported a 60% fall in net income for the first six months of the year, partly blaming weaker markets and losses it incurred on the sale of vessels and on interest rate swap arrangements and foreign currency hedging arrangements.
However, it pointed to a healthier smaller LPG market moving forward and a recovery in charterer’s confidence. It said that because of the way it was structured, and because of its profitable state, it had no need to raise any dilutive capital.
For the six months ended June 30, 2009, voyage revenues amounted to $56.3 million and net income was $6.7m, an increase of $0.8m, or 1.4%, and a decrease of $10.2m, or 60.4%, respectively, from voyage revenues of $55.5m and net income of $16.9m for the six months ended June 30, 2008.
Net income for the latest period included a loss on the sale of vessels of $0.8 million compared to a profit of $1.7m on the sale of vessels in the same period in 2008. Net income for the six months ended June 30, 2009 net of the loss on the sale of vessels was $7.5m compared to $15.2m for the same 2008 period, excluding the gain of $1.7 million on the sale of vessels in that period.
Basic and diluted earnings per share were $0.30 for the six months ended June 30, 2009 as compared to basic and diluted earnings per share of $0.76 for the six months ended June 30, 2008.
For the six months ended June 30, 2009, the company had a $1.6m realised cash loss and a $3m unrealised non-cash loss on interest rate swap arrangements and foreign currency hedging arrangements. This compares to an unrealised non-cash loss on interest rate swap arrangements of $0.5 m for the six months ended June 30, 2008.
CEO Harry Vafias, said: “The second quarter of this year has, as I predicted it would be in our first quarter earnings release, proved to be a challenging one. However despite these challenges I am pleased to report that we remain profitable, in a healthy cash position, and, as the company is currently structured, without any current expectation of needing to raise any dilutive capital.
“We believe the small LPG market is healthier than the three major shipping segments both from a new buildings order book standpoint and the stability of its freight rates. Apart from the delivery of the Stealth Argentina in November of this year, StealthGas has no major scheduled capital expenditures until 2011.
“I am also pleased to report that in the past few weeks we have seen some recovery in charterer’s confidence and we have managed to secure profitable period business to highly reputable charterers as we outlined in our press release of the 4th August. I am pleased to say that all our charterers continue to fulfil their obligations to us. We currently have 71% of our available charter days fixed for the remainder of 2009 and approximately 40% already under contract for 2010.
“We are continuing to strive to control our operating expenses and our net income breakeven level fell during the first half of this year compared to the first six months of 2008. In my view the second half of 2009 will continue to be challenging, although as we move into the colder part of this year and into early 2010 this may somewhat aid our performance, to the extent we continue to have a significant number of our vessels in the spot market.
“Our focus continues to be running our ships as efficiently as possible and, where we can, fixing them on period charter to reliable charterers, so as to be able to secure regular and sustainable cash flows to meet our obligations in a timely manner,” he added.
CFO Andrew Simmons said the value of its core LPG fleet continued to hold up very well compared to many other sectors of shipping. “The debt to market value of our entire fleet in the water as at the 30th June 2009 stood at 52.9% which we believe places StealthGas in the upper echelon, on a comparative basis, with other U.S. listed shipping companies,” he said.