Vafias puts good cost control down to fewer 3rd party managers

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Nasdaq-quoted LPG owner StealthGas has been more successful in controlling costs than its competitors because it doesn’t have too many third party managers managing its fleet, claimed its ebullient owner Harry Vafias.

In a conference call to stock market analysts and journalists after announcing the company’s first quarter results, Harry Vafias also said that if the current economic crisis continues as it has done, the crew shortage problem could be over within a year.

He said: “Up to last year we were stuck with increased wages because of competition for high spec crews: now we have the same problem but it is relaxing a bit because crews are jobless through the idle ships and scrapping activity. We still have this problem but if the crisis continues we hope the problem will be completely solved in the next year.

“We have been successful in controlling costs much better than our competitors. When you are on top of things you are hands on and you don’t have too many third party managers around the world. You have a higher cost control and better cost control than having your vessels dispersed with third party managers. Our fleet is grouped into three separate groups. One is managed by our in-house management, the second is split between two third party managers and the third is vessels on bareboat charter. Up to now this has worked very well and will continue to do so because we are on top of it.

StealthGas posted better-than-expected quarterly results but said it would suspend a dividend payment. “Although we have made a solid start to the year, the remainder of 2009 and probably beyond, in my view, will continue to be very challenging,” Chief Executive Harry Vafias said in a statement.

The company’s net income for the quarter was $0.2 million, or 1 cent a share, down from $7.4 million, or 34 cents a share, a year earlier
Excluding items, earnings for the first quarter ending March 31, 2009 was 30 cents a share. On that basis, analysts had expected earnings of 28 cents a share, according to Reuters Estimates. Voyage revenues rose 8 percent to $29.2 million, while analysts had forecast revenue of $27.6 million.