Full Transcript: StealthGas Q1 2026 Earnings Call

StealthGas (NASDAQ: GASS ) reported first-quarter financial results on Friday. The transcript from the company's first-quarter earnings call has been provided below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

8 million, a 2% increase year-over-year and 9% higher than the previous quarter. 40. 2 million worth of shares repurchased since 2023. Strategically, StealthGas focuses on longer-period charters, securing $100 million in contracted revenues with 45% of fleet days covered for the next year.

Operationally, the company plans to sell older vessels, with recent sales including the Eco Royalty and ongoing discussions for the Eco Wizard's insurance settlement. The company saw an increase in dry docking costs due to three vessels being dry docked in Q1 2026. Geographically, the fleet is primarily positioned in Europe and the Mediterranean to take advantage of higher rates, with exposure to Africa for future LPG demand growth. The global LPG market is impacted by geopolitical tensions, particularly in the Middle East, causing a shift in trade routes and increased reliance on US exports.

2 million, a 32% increase, and plans to potentially reinvest in fleet renewal. Full Transcript Michael Jolliffe, Chairman of the Board Thank you and good morning everyone, and welcome to our first quarter 2026 earnings conference call and webcast. I'm Michael Jolliffe, Chairman of the Board of Directors, and joining me on our call today, as usual, is our CEO, Harry Vafias, and Constantino Sistorvaris from Investor Relations.

Before we commence our presentation, I would like to remind you that we will be discussing forward-looking statements which reflect current views with respect to future events and financial performance and are subject to material risks and uncertainties. So if you could all take a moment to read our disclaimer on slide two of this presentation. Risks are further disclosed in our filings with the Securities and Exchange Commission. So let's proceed with the presentation on slide 3 for a brief overview of another successful quarter.

4 million. 3 million of the previous quarter. 40 for the quarter, underlining the fact that the company's stock is very attractive on price-to-earnings multiples. Since achieving our strategic goal of deleveraging the company completely last July and repaying over the previous three years 350 million in debt, we continued to maintain a very flexible capital structure.

We are one of the very few, if not the only, public shipping company that has managed to achieve zero bank debt. 2 million worth of shares since 2023, but as the share price has appreciated, we did not buy back any shares during the first quarter. This company also has a strategic objective of maintaining a visible revenue stream, opting for longer-period charters when available. And so, as of June, we have $100 million in contracted revenues with charters up to 2029, and 45% of the fleet calendar days one year forward are secured by period charters.

In terms of sale and purchase activity, we continue to look for opportunities to sell some older tonnage and possibly replace them with newer tonnage. We entered in March into a contract to sell another one of the smaller ships, the Eco Royalty, and expect to deliver her in September. Two more vessels that we had previously agreed to sell—one was delivered in March to her buyers and the other one in May. Finally, let me mention again the Eco Wizard situation following last July's incident, as the vessel remains impaired both in a literal sense and in terms of accounting.

As advised previously, the company is in discussions with the insurers of the vessel, and I am afraid I cannot disclose more at this time. Suffice it to say that discussions are progressing, and we expect within the current month or coming quarter to have resolved the situation. So you should hear something on this fairly soon. Let us move on to Slide 4 for our fleet employment as at the end of May.

Chartering activity was relatively consistent over the past few months. We did conclude five new period charters of three months or longer—same as last quarter—but this time the durations were longer. One charter was for two years, one was for one year, and the remaining three for six months duration. As we enter the summer months and the geopolitical situation remains fluid, the spot exposure for our fleet has actually increased, and we currently have five of our operating vessels in the spot market.

Our intention is to reduce the spot exposure. Overall, we continue to maintain high period coverage. As of June, for the remainder of 2026, we have secured 55% of the fleet days on period charters, bringing in about 52 million in revenues for the remainder of the year. One-year forward coverage is at 45%.

Total revenues secured for all future periods up to 2029 are around $100 million. In terms of dry dockings, five vessels were scheduled during 2026, an average number. Two of these dry dockings were for the first quarter, and we actually performed one more earlier than schedule. So in total during quarter one 2026 we dry docked three vessels, hence the increased dry dock expenses.

Two vessels remain to be dry docked during 2026. Looking at the geographical location of our fleet presented in Slide 5, our company mainly focuses on regional trades and local distribution of gas, while the larger vessels mostly engage in intercontinental voyages, like loading in the US to discharge in Europe. We continue to position the majority of our fleet—two thirds—west of Suez and particularly in Europe and the Med, in order to take advantage of the higher rates and more liquid market. In the Far East, we only have one of our older vessels, and for the time being do not intend to reallocate more vessels there as the rates continue to be lower in the East.

We also have four vessels trading in Africa, and we are building relationships there, as we are optimistic that in Africa demand for LPG will grow faster. There are many LPG storage facilities under construction on the continent that will increase seaborne trading in the future. Insofar as the conflict in Iran is concerned, we have not seen any particular change in trading patterns for the smaller vessels. Most affected were the VLGCs that were used for the majority of Persian Gulf exports, and to a lesser extent MGCs and Handy sizes, particularly for Iraqi exports.

As we said last time, we have one MGC vessel inside the Persian Gulf where it remains until today. The vessel had gone to load LPG in Saudi Arabia just before the conflict began. We are anxiously monitoring the situation but have not attempted to exit as we do not consider the passage to be safe. For the time being the vessel is on time charter, so the freight for the time the vessel has stayed there has been paid.

We hope the situation is resolved swiftly. I will now turn the call over to Constantino Sistorvaris for our financial performance. Thank you. Constantino Sistorvaris, Investor Relations Thank you, Michael.

5%, and this was due to the timing of the dry dockings when vessels are off-hire, and also the inclusion of one still non-operational vessel, the Eco Wizard, until this case is resolved. 9 million increase year on year, as the vessels continue to operate in a firm market, with especially the largest sizes reporting improved results. Voyage expenses were higher by $1 million as they include some additional insurance premiums related to the conflict in the Middle East. 8 million for the quarter and were contained, only slightly higher than last year's.

This quarter we had a significant increase in dry docking cost, which depend on the timing the vessels are sent to the yard, as three out of the five vessels that were due for dry docking this year were dry docked during the first quarter compared to only a single vessel last year. 5 million from the sale of one vessel. The agreement for the sale was done last year, but the delivery took place in March. 4 million compared to last year as the company no longer pays any interest following the debt extinguishment.

9% increase, and earnings per share for the quarter were 43 cents. On an adjusted basis, earnings were $15 million, 40 cents per share. So overall, the company maintained high profitability it has been enjoying lately, and although this was not a record quarter, it classifies among the best five quarters in its history in terms of profits. 2 million in the space of three months through the sale of one vessel and $18 million in operational cash flow.

Two vessels were held for sale as of March 31, one already delivered in May and one expected to be delivered in September upon the termination of its charter, with the proceeds of these sales expected to boost the cash position by about $26 million. 4% as one vessel was moved to held for sale as well as the regular depreciation. 7 million, close to the previous quarter, and mostly include the book value and related expenses of the MGC vessel pending resolution with insurers. On the liability side, we want to show again that debt remains zero and the total liabilities of the company are a mere $26 million, all current.

In a very short time, the company has achieved one of the healthiest balance sheets in the shipping space. 5% increase. Moving on to slide 8. Most of you may be familiar, but it's worth repeating for those listeners who are new.

The company in the past always relied on debt to finance its operations and had a sizable amount of debt—over 350 million—but always moderately leveraged. Through asset sales and operational cash flow, it embarked on a strategic goal of eliminating debt while at the same time maintaining its liquidity, particularly since the beginning of 2023. In a little over two and a half years it repaid about 350 million and became, in July 2025 for the first time since its inception 20 years ago, a debt-free company with a fleet of 26 unencumbered vessels.

Only the joint venture vessel is currently financed, but it's not consolidated in the results and during January and April of this year also repaid most of its debt with $7 million remaining. With no debt amortizing or interest payments, the cash flow breakeven for the fleet is significantly reduced, enhancing its competitiveness. The elimination of debt also gives the company much more leverage and agility when the time comes for expansion, and puts it in a significantly better negotiating position with its banking partners while achieving significant savings in interest costs.

In the meantime, I will now hand you back to our CEO, Harry Vafias, for some insights on the market. Harry Vafias, CEO Let's continue on slide 9. A worldview on the LPG market. At the forefront, of course, is the conflict with Iran and the closure of the Straits.

One third of LPG supply came from the Middle East and the majority going through the Straits of Hormuz. At the moment the Straits are closed—we know, as we have a vessel there and want to exit but cannot do it. The immediate impact was a drop in the global LPG exports, estimated at 3% for the first quarter. Of course, when we get the second quarter data we expect to see a much steeper drop.

The effects of vessel repositioning took some time to appear in the LPG market. While tanker rates hit their highs in early March, the TC rates reached their highs in late May. For LPG, the alternative source is the US. So many vessels previously trading in the Middle East have been repositioned to the US, and currently many of those once loaded return to the Far East taking the longer route via the Cape of Good Hope, a 45-day journey adding significant ton-miles to the equation.

6 million barrels, a 22% year-on-year increase. This is a very short time frame and quarterly increases are lower, but it goes to show that new records are broken and exports are ramping up. This is an ongoing theme as exports from the US have been rising consistently for many years, and the expansion of terminals in the US, with the most recent additions by Enterprise of the Houston Channel and Neches River expansions, proved extremely well timed. Even if the pace of export increases eventually moderates, the underlying investment thesis for the planned capacity additions is proving to be sound.

So we expect LPG exports to continue growing and more plans for new additions. It's important that supply chains are operating in times of strain. In that respect, Europe proved to be less impacted as it was well supplied at the start of the conflict. LPG prices did increase, impacting demand, but also naphtha prices rose even more during May.

The propane—naphtha differential reached a yearly high of over $250, opening up a short window for increasing use of propane in the petrochemical sector. But in general, high temperatures in Europe are expected to wane the demand. It was a different story in the East. China, rushed to secure supplies, had just recently decreased its imports from the US to 30% due to trade tensions, and now, unable to get Middle East supplies, the share of US imports has jumped back to over 60%.

India, the second largest importer, was the most impacted nation. India depends on imports for 60% of its LPG consumption, mostly residential, of which 90% came from the Middle East. It has just this last November made a historic agreement with the US to start importing US LPG. But this diversification was not fast enough nor big enough.

The immediate effect from the crunch was a drop in demand, while the government put curbs on industrial consumption and renewed subsidies on residential consumption. At the same time, local production in March increased by 30%. As more cargoes from the US find their way into India, the situation should normalize. The conflict in Iran has shown how important it is to have resilient supply chains and the need for strategic reserves.

We also need to keep in mind that the prolonged conflict could also eventually lead to demand destruction and longer-term investments could be abandoned, be it production facilities in the Middle East like the Qatari projects or PDH plants in China. We have not even reached a resolution yet. But even when this is done, it will take some time for the situation to normalize. Ships will need time to reroute and installations that have been hit, particularly Saudi Arabia, will need to be repaired to be back to full operation.

Countries will need to reconsider the supply agreements and the strategic reserves they hold and will need to replenish. But all this is clouded in uncertainty and we're not in the business of making predictions. Let's move to how actually our shipping market has performed over this period. Slide 10.

The market in Q1 was building on the strengthening seen in Q4 and we saw a reasonably tight tonnage availability in Europe through the quarter, resulting in rates remaining at firm levels. The size of the European pressurized market has grown in recent years with more volumes and more vessels, and there is in general decent liquidity in the market compared to Southeast Asia where we see significantly less liquidity. 5 thousand cubic meter ships and the larger pressurized ships have corrected a bit downwards from the peak as a few more vessels have positioned into this region.

We expect the TC market to take somewhat of a breather over the summer as port vessel availability increases. Ordering continued at a very slow pace—a handful of vessels mostly for 2028 and 2029 deliveries, some for the larger sizes of 11,000 cubic meters—and we continue to believe that the orderbook remains very healthy. While the existing fleet has a large number of older ships that will eventually need to be scrapped—roughly a third of the fleet over 20 years of age—with a firm market we continue to see only a few vessels being scrapped. For the Handies, the events and inefficiencies seen in Q1 resulted in a firm freight environment.