zoomImage Courtesy: StealthGas

As part of its fleet renewal strategy, LPG shipping company StealthGas has sold two of its oldest vessels, the 1992-built Gas Moxie and the 1996-built Gas Nirvana.

Both ships were sold for further trading and at a very good premium above their scrap values, 78% and 220% respectively, Board Chairman Michael Jolliffe, commented.

Harry Vafias, StealthGas CEO, said that these ships were destined to go for scrap if the market hadn’t recovered, but instead, they fetched really good prices.

“So that means that there’s a shortage of good ships, and that people that have the cargoes need to get ships of any age to move their cargoes,” Vafias said.

The sales come on the back of the disposal of two other older vessels, which were sold in the second quarter of the year, the Gas Emperor and the Gas Icon, both built in 1994. According to Jolliffe, they were both sold at about 150% premium above scrap value.

“These sales took place in order to further boost our liquidity and ease our operating cost base. We still maintain strong earnings visibility and have a strong fleet coverage of 63% for 2018.

As our market fundamentals are improving and look promising for the future, we hope to further improve upon our performance – increase our revenues, strengthen our profitability and continue to contain our costs,” Joliffe added.

In the third quarter of the year, StealthGas saw a 12 percent increase in revenue when compared with the last year’s Q3, reaching USD 38.5 million. The company’s adjusted EBITDA amounted to USD 15.3 million for the quarter.

This increase was attributed to the high utilization of the fleet, with the company’s operational utilization coming close to 96% compared to 88% for the same period of last year.

The company managed to secure 16 new charters and charter extensions, the majority of which were booked at rates about 15% higher than where the market was six months ago, Joliffe said.

“Currently, the average duration of our charters is around nine months, as we strategically do not want to commit our vessels for long periods now that the market fundamentals and day rates are finally improving. We have strong period coverage, which currently stands at about 90% for the remainder of 2017 and 63% so far for 2018,” he added.

The market fundamentals look good when considering demand-supply balance.In terms of scrapping activity, since the beginning of 2017, 10 LPG vessels were scrapped, including some small semi-ref vessels.

“Taking into account the 22% of the small LPG fleet is above 20 years of age, it’s anticipated that scrapping will accelerate further in the years to come. As per published orders, there are six vessels on order that is only 1.7% of the total fleet to be delivered in the period 2018-2019. The limited order book of our segment is another positive factor for rates and existing tonnage demand,” Vafias noted.

Revenues for the nine months ended September 30, 2017, amounted to USD 115.9 million, an increase of 8.6%, compared to revenues of $106.7 million for the same period a year earlier.

Adjusted nine-month net income was USD 4.7 million, compared to the adjusted net loss of USD 3.8 million for the same period of last year.