Friday, May 15, 2009
StealthGas Inc. Reports First Quarter 2009 Financial and Operating Results
Friday, 15 May 2009
StealthGas Inc., a ship-owning company primarily serving the liquefied petroleum gas (LPG) sector of the international shipping industry, announced yesterday its unaudited financial and operating results for the first quarter ended March 31, 2009. First Quarter 2009 Results: For the three months ended March 31, 2009, voyage revenues amounted to $29.2 million, an increase of $2.2 million, or 8.1%, compared to voyage revenues of $27.0 million for the three months ended March 31, 2008. Net income for the three months ended March 31, 2009 was $0.2 million, a decrease of $7.2 million, from net income of $7.4 million for the three months ended March 31, 2008. Net income for the three months ended March 31, 2008 had included a gain on the sale of vessels of $1.7 million, whereas there were no vessel sales in the first quarter of 2009.
The decline in net income is mainly attributable to increased cash and non-cash losses relating to interest rate and foreign currency hedging arrangements which were adversely affected by the prevailing very low interest rates and the strengthening of the Japanese Yen against the United States dollar in the first quarter of 2009, plus increases in voyage and operating expenses.
For the three months ended March 31, 2009, the Company had a $1.1 million realized cash loss and a $6.2 million unrealized non-cash loss on interest rate swap arrangements and foreign currency hedging arrangements. This compares to an unrealized cash loss on interest rate swap arrangements of $2.3 million for the three months ended March 31, 2008.
Voyage and operating expenses for the three months ended March 31, 2009 were $2.3 million and $8.6 million respectively compared to $0.9 million and $7.3 million for the three months ended March 31, 2008, these increases were due primarily to the increased level of spot market activity with 501 spot voyage days in the first quarter of 2009 compared to just 28 spot voyage days in the same period last year. Under spot voyage charters we are responsible for all voyage expenses including fuel, port and canal fees. Net income was also affected by increased depreciation expenses as we had an average of nearly four more vessels in the fleet in the first quarter of 2009 compared to the same period last year.
Basic and diluted earnings per share were $0.01 for the three months ended March 31, 2009 as compared to basic and diluted earnings per share of $0.33 for the three months ended March 31, 2008.
Adjusted EBITDA for the three months ended March 31, 2009 was $8.6 million, a decrease of $6.0 million, or 41.1% from $14.6 million for the three months ended March 31, 2008. A reconciliation of Adjusted EBITDA to Net Income and to Net Cash Provided by Operating Activities is set forth below.
Before the non-cash items described above, net income was $6.6 million, or $0.30 per share for the three months ended March 31, 2009, as compared to $10.2 million, or $0.46 per share, which included a $1.7 million gain on sale of vessels, for the three months ended March 31, 2008, a decrease of $3.6 million or 35.3%
An average of 40.8 vessels were owned by the Company in the three months ended March 31, 2009, earning an average time-charter equivalent rate of approximately $7,344 per day as compared to 37.9 vessels, earning an average time-charter equivalent rate of $7,652 per day for the same period of 2008.
CEO Harry Vafias commented:
``Overall, I am pleased with the operating performance of the Company in this challenging operating environment, though disappointed that net income has fallen albeit due mainly to non-cash losses on derivatives.
We are seeing more of our vessels trading in the spot market, however, to date, although we are experiencing some limited down time commercially particularly for our semi refrigerated ships, the rates we are obtaining in the spot market are holding up quite well. Furthermore, apart from the charterer of the Gas Ice, which we previously reported on, our charterers have continued to meet their obligations, and the values of our LPG fleet are holding up quite well, particularly when compared to other shipping sectors.
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 and we must position the Company such that it has the resources to meet any challenges that may lie ahead and to take advantage of opportunities, especially outside our core handysize LPG segment. To that end, the Company's Board of Directors, in consultation with management, has reluctantly decided to suspend payment of the quarterly dividend that we have paid since we went public in 2005.
I realize that this may disappoint some of our investors and we look forward to being able to reinstate dividend payments when economic conditions allow, however, we believe that in the current environment conserving capital is a prudent measure that will further strengthen the position of our Company and enable us to take advantage of opportunities as and when global economic conditions improve.``
CFO Andrew Simmons commented:
``We continue to have a soundly structured financial base with net debt to capitalization remaining conservative at 42.3% as at March 31, 2009 and, as at March 31, 2009, remained in compliance with all of the financial covenants and security coverage requirements in our loan agreements.
Despite the growth in spot voyage days for the fleet in the first quarter, we still have approximately 70% of fleet days fixed for 2009 and approximately 40% for 2010, thus giving us a relatively high percentage of voyage days already booked for the remainder of this year and beyond. We are also pleased that total operating expenses rose by just 2.4% on a year on year basis underlining the strict management of costs that is a cornerstone of our business, and that is particularly vital at this time when income levels are, not surprisingly, under some pressure.``
Quarterly Dividend:
At today's meeting, the Company's Board of Directors decided to suspend dividend payments to shareholders until it determines, in consultation with management, that economic conditions allow dividend payments to be resumed.
Source: StealthGas Inc.
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