StealthGas (NASDAQ: GASS) reported Q3 EPS of $0.01, $0.02 better than the analyst estimate of ($0.01). Revenue for the quarter came in at $36.6 million versus the consensus estimate of $35.14 million.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

• Operational utilization of 98.0% in Q3 ’19 (96.1% in Q3 ’18) due to more efficient presence in the spot market resulting in reduced idle time.
• Fleet calendar days down 19% quarter on quarter to 4,045 days attributed to our recent strategic fleet contraction.
• About 88% of fleet days secured on period charters for the remainder of 2019, with total fleet employment days for all subsequent periods generating approximately $138 million in contracted revenues.
• Sale of our 5,000 cbm LPG vessel, the Gas Ethereal (2006 built) on September 27, 2019, for further trading. With this sale the average age of the StealthGas fleet has been reduced to 8.7 years.
• Voyage revenues of $36.6 million in Q3 ’19, a decrease of $6.1 million compared to Q3 ’18 following our strategic decision to divest mostly older LPG units that led to the net reduction of our average owned fleet by nine vessels.
• Daily Adjusted Average Charter Rate in Q3 19’ increased by about 6.0% ($425) compared to the same period of last year, mostly due to improved revenues stemming from our time charter contracts as a result of higher market rates.
• About 21% quarter on quarter decrease in operating expenses; a sharper percentage decline than voyage revenue contraction for the same period, attributed to our fleet contraction.
• Adjusted EBITDA of $14.7 million in Q3 ’19, compared to $16.4 million in Q3 ’18, a lower than expected figure, mostly due to lower than anticipated revenue stemming from the Asian spot market.
• Low gearing, as debt to assets stands at about 39% mostly due to our intense repayment schedule while our net debt to assets ratio is as low as 32%.
• Cash on hand of $66.1 million, an increase of about $1.6 million compared to year end 2018.
• Purchase of 0.4 million of GASS shares up to date, for an aggregate consideration of $1.4 million, following the initiation of a further stock repurchase program.

Third Quarter 2019 Results:

• Revenues for the three months ended September 30, 2019 amounted to $36.6 million, a decrease of $6.1 million, or 14.3%, compared to revenues of $42.7 million for the three months ended September 30, 2018, mainly as a result of the strategic reduction of our average owned fleet by nine vessels, one less charter-in vessel and relatively low revenue stemming from the Asian spot market.
• Voyage expenses and vessels’ operating expenses for the three months ended September 30, 2019 were $4.9 million and $12.3 million respectively, compared to $5.8 million and $15.6 million respectively, for the three months ended September 30, 2018. The $0.9 million decrease in voyage expenses was mainly attributed to a 21.3% quarter on quarter reduction of spot days. The 21.2% decrease in vessels’ operating expenses compared to the same period of 2018, is mainly attributed to the net reduction of our average owned fleet by nine vessels. It is noted however that the reduction in operating expenses was as a percentage far higher than the reduction of our revenues attributed to our fleet decline.
• Drydocking costs for the three months ended September 30, 2019 and 2018 were $0.5 and $0.8 million, respectively. One drydocking was completed during the third quarter of 2019, while in the same period of 2018 the Company completed the drydocking of two LPG vessels.
• General and Administrative expenses for the three months ended September 30, 2019 amounted to $1.1 million compared to $0.6 million in the same period of last year. This increase is mostly due to a $0.3 million one off charge pertaining to a legal case.
• Depreciation for the three months ended September 30, 2019 was $9.4 million, a $0.7 million decrease from $10.1 million for the same period of last year due to the decrease of the average number of our vessels.
• Impairment loss for the three months ended September 30, 2019 and 2018 were nil and $0.6 million, respectively.
• Interest and finance costs for the three months ended September 30, 2019 and 2018 were $5.1 million and $6.1 million respectively. The $1.0 million decrease from the same period of last year is mostly due to the decrease of our leverage and the decline of LIBOR rates.
• As a result of the above, for the three months ended September 30, 2019, the Company reported a net loss of $0.2 million, compared to a net loss of $0.8 million for the three months ended September 30, 2018. The weighted average number of shares for the three months ended September 30, 2019 and September 30, 2018 was 39.8 million and 39.9 million, respectively. Loss per share, basic and diluted, for the three months ended September 30, 2019 amounted to $0.01 compared to loss per share of $0.02 for the same period of last year.
• Adjusted net income was $0.4 million or $0.01 earnings per share for the three months ended September 30, 2019 compared to adjusted net income of $0.3 million or $0.01 earnings per share for the same period of last year.
• EBITDA for the three months ended September 30, 2019 amounted to $14.1 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Loss are set forth below.
• An average of 42.0 vessels were owned by the Company during the three months ended September 30, 2019, compared to 51.3 vessels for the same period of 2018.

Board Chairman Michael Jolliffe Commented

"Our performance in the third quarter of the year improved to an optimal level in terms of fleet efficiency, as reflected in our operational utilization of 98%. Although we managed to contain our operating costs at moderate levels, the persistently weak earnings stemming from the Asian spot market did not allow us to enjoy a profitable quarter.

We feel, however, that should market conditions improve as they seem to have based on the thirteen period charters and charter extensions we managed to conclude during the past couple of months, our profitability will be enhanced. Indeed, rates for all of our newly concluded charters in each of our operating segments are at higher levels. We have 53% of our fleet days secured for 2020 with $138 million of secured revenues for all subsequent periods; therefore, there is plenty of upside potential.

The intensification of period charter activity during the past couple of months may be a positive sign that the market situation is in fact turning, including in Asia, and we are eager and well positioned to take advantage of this opportunity."

For earnings history and earnings-related data on StealthGas (GASS) click here.