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Monday, March 2, 2026 at 10 a.m. ET
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StealthGas (NASDAQ:GASS) reported a year of elevated profitability, achieving $65.6 million in adjusted net income and decisively extinguishing all bank debt, thereby transitioning to an unleveraged capital structure. The quarter saw revenue and net income decrease due to vessel downtime and operational disruptions, while the cash position improved through asset sales and cost management. Management emphasized high forward contract coverage, strategic fleet repositioning away from lower-rate Asian routes, and significant liquidity resources to support future initiatives.
Michael Jolliffe: Thank you, Nadia. Good morning, everyone, and welcome to our fourth quarter 2025 earnings conference call and webcast. This is Michael Jolliffe, Chairman of the Board of Directors. And joining me on our call today, as usual, is our CEO, Harry Vafias; and Konstantinos Sistovaris from our 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 2 of this presentation, I shall be grateful.
Risks are further disclosed in our filings with the Securities and Exchange Commission. So let’s proceed with the presentation on Slide 3. And since this is the year-end results, I will start by saying that 2025 was a very successful year for StealthGas despite all the geopolitical turbulence. The company maintained its high profitability, reporting adjusted net income of $65.6 million for the year, the second highest in its history. So we are very pleased that our strategy has worked, and we are able to achieve high profits consistently for the last 4 years.
Now in terms of quarterly results, we did hit a bump in the fourth quarter as we did face some idle time on some larger vessels and one of those was out of action. Revenues came in at a respectable $39.4 million in quarter 4, albeit 9% lower than last year. Adjusted net income for the quarter was $13.3 million, also lower compared to the $16.4 million achieved last year. In terms of earnings per share, these were $0.36 for the quarter and $1.77 for the year, underlying the fact that company’s stock is very attractive on price to earnings multiple.
During 2025, we also completed our strategic deleverage after repaying $86 million in bank debt, bringing the total repayments over the last 3 years to $350 million and achieving a very flexible capital structure. We are one of the very few, if not the only quoted shipping company that has managed to achieve 0 bank debt. We also do have a share repurchase program in place and bought back shares worth $1.8 million earlier in 2025, bringing the total up to $21.2 million since we began in 2023. But as the share price appreciated lately, we did not buy back any shares during the fourth quarter.
As far as our other objectives, we strive to maintain a visible revenue stream, opting for longer period charters when available and so have $104 million in contracted revenues and 48% of the fleet calendar days 1 year forward secured as of March 2026. In terms of sale and purchase activity, we continue to look for opportunities to sell some older tonnage and possibly replace these ships with newer and bigger tonnage. So far, we have been more active on the selling front, having sold 4 vessels.
The latest news on that front is that in December, we agreed to sell another one of our smaller vessels, the 2015-built Eco Universe with delivery most likely in April, and we expect to book a profit from that sale at that time. This month, we also expect to deliver to its buyers the Eco Invictus that we had previously agreed to sell. Finally, there is the issue of the Eco Wizard following last July’s incident. As previously announced, the vessel was moved to a dock in Latvia where it remains today. The fact that the vessel is not generating revenues for quite some time now has impacted our results.
We had expected this to be a long process and the condition of the vessel is under assessment by technical teams to identify and quantify repairs and damages while at the same time, we are in discussions with the insurers of the vessel. Due to the delicate nature of the issue and the ongoing discussions, we will update you when we have more concrete information. For the time being, subject to changes based on final resolution, we have impaired the book value of the vessel with no effect on the profit and loss account since the vessel is insured. Let us move on to Slide 4 for our fleet employment as of March.
Chartering activity was relatively consistent over the past few months. We did conclude 5 new period charters of 3 months or longer, but the majority of these were shorter periods. Although we did recently conclude an unusually long period charter of 3 years with a major European petrochemical company. At the moment, we only have 2 of our active vessels trading in the spot market [indiscernible] intend to keep a low spot exposure. Overall, we maintain high period coverage, albeit slightly lower than previously. As of March, for the remainder of 2026, we have secured 48% of the fleet days on period charters, so almost half, bringing in about $66 million in revenues for the remainder of the year.
Total revenues secured for all future periods up to 2029 are around $104 million. In terms of dry dockings, we now expect to have 5 vessels dry dock during 2026, an average number. Two of these dry dockings fall in the first quarter of this year. In terms of our fleet geography presented in Slide 5, our company mainly focuses on regional trade and local distribution of gas, while the larger vessels mostly engage in intercontinental voyages, often loading in the United States to discharge in Europe. The way we have positioned our fleet remains the same.
While most of the major LPG importers and the higher percentage of the global fleet trades in Asia, we have only 3 vessels trading in that area. And actually, one is in the Red Sea, one in the Arabian Gulf and one in Australia. This is because rates East of Suez have for quite some time now been considerably lower than West of Suez. As a generalization, older vessels tend to congregate in the Far East, earning lower rates, whereas to trade in Europe where rates are higher, newer, better maintained vessels are needed. As a result, more than 2/3 of our fleet trades in Northern Europe and the Mediterranean in order to capture that premium.
The Suez Canal, the most important East-West axis has reopened for some time now following the deescalation of tensions. But so far, we have not seen a flurry of vessels changing their locations from east to west. But in view of Friday’s development, this may change in the next few days if the Houthis start attacking ships again. Moreover, we are also following closely the situation with Iran, not just because we have a vessel in the Gulf, but also as the straits of Hormuz is a vital trade route, not just for oil, but also for LPG. An escalation of the contract could severely affect trading if Iran decides to block navigation and attach passing vessels.
What that would mean in terms of rates, it may not be possible to predict, but what past experiences have shown are that conflicts tend to lead to significant rate increases and shipping benefits. Tanker rates especially have been — have seen considerable increases for the past few weeks before the conflict even began. I will now turn the call over to Konstantinos Sistovaris for our financial performance. Thank you.
Konstantinos Sistovaris: Thank you, Michael. Starting with Slide 6, where we have a snapshot of the income statement for the fourth quarter and full year of 2025 against the same period of 2024. I will start with the quarterly results. While there was a small increase in fleet days of 3%, operational utilization overall fell to 89% as a result of dry dockings and spot exposure that led to increased off-hire days, especially on a couple of the larger vessels, including the MGC that was out of action. As a result, revenues for the fourth quarter came in at $39.4 million, marking a 9.4% decrease year-on-year. Operating expenses were $12.7 million for the quarter, well contained and lower than last year’s.
In terms of other expenses, there was also a reduction in G&A expenses, depreciation and particularly reduced interest costs by $1.4 million as the debt was extinguished. Net income for the fourth quarter was $12.8 million compared to $14.2 million for the same quarter of last year, a 10% decrease. Earnings per share for the quarter were $0.34 and on an adjusted basis, $0.36. So overall, the company retains its high profitability as LPG charter rates continue to be at historical elevated levels.
In terms of the yearly results, revenues came in at $173.2 million compared to $167.2 (sic) [ $167.3 ] million last year, a 3.5% increase as the majority of the vessels achieved high rates and also as a result of the slightly higher number of fleet days. However, this was counterbalanced by a doubling of voyage expenses, an increase of $10.9 million, mostly consisting of port and bunker expenses, which is consistent with the doubling of spot market days for the fleet during the year.
OpEx for the year also increased by $4.1 million, mostly due to the addition of the vessels that were bought from the joint venture and also due to a general increase in crew and technical costs. There were significant savings in interest costs for 2025 as these were reduced by $6.8 million as a result of the deleveraging. Another point when comparing yearly results was that in 2025, there was a reduction in the earnings coming from the joint ventures of $10.5 million.
As discussed during the second quarter results, this was basically a result from a profit that JV had during that period of 2024 when it sold one of its vessels at a huge profit and distributed the proceeds. Looking at the balance sheet on the next slide. As of December 31, 2025, the company considerably improved its liquidity, holding cash of $99 million with no restricted cash after having repaid $86 million in debt over the 12 months and invested about $8 million for the share in the JV vessels, while at the same time, receiving $25 million net from the sale of 2 vessels earlier in the year.
Two vessels were also held for sale as of December 31, both to be delivered within the next couple of months with the proceeds of these sales expected to boost the cash position by about $29 million. The book value of the vessels in the fleet was $491 million, reduced by the sale of 4 vessels, 2 delivered and 2 held for sale at the end of the year and also the reduction from the value of the medium gas carrier pending the final treatment with no P&L effect so far due to the insurance.
The investments in our joint venture with a book value of $23 million relate to a single medium gas carrier after having either sold off or bought back all the other joint venture participations that we had previously. On the liability side, debt is now 0, and the total liabilities of the company are a mere $21 million, all current. In a very short time, the company has achieved one of the healthiest balance sheets in the shipping space. Shareholders’ equity increased over the 12 months by $63.8 million to $690.3 million, a 10% increase. Moving on to Slide 8, what most of you may be familiar, but it’s worth repeating for those listeners who are new.
The company has very swiftly and successfully executed a debt reduction strategy. Since the beginning of 2023, in a little over 2.5 years, the company using its operational cash flow as well as proceeds from vessel sales, repaid $350 million and became for the first time since its inception 20 years ago, a debt-free company with a fleet of 28 vessels, none of which is financed. Only the joint venture vessel is currently financed, but it’s not consolidated in the results. And during January of this year, half the debt on that vessel was also paid off.
The elimination of debt gives the company much more leverage when the time comes for the expansion and puts it in a significantly better negotiating position with its banking partners while achieving significant savings in interest costs in the meantime. Also, it means that the cash flow breakeven for the fleet is significantly reduced, enhancing its competitiveness. At the moment, we estimate cash flow breakeven at $6,500 to $7,000 per vessel daily, which means that even if the market was to fall by 50% and all the vessel rates were readjusted, something unlikely to happen, the company would still be accumulating cash. I will now hand you to our CEO, Mr. Harry Vafias, for some insights on the market.
Harry Vafias: Let’s continue on Slide 9 to discuss the news on the LPG markets. Global LPG exports continue to register strong growth at 6% last year. U.S. exports of propane saw a resurgence in Q4 following a slight drop in Q3 as a result of trade tensions and registered close to 6% growth for last year. Driving the increase in exports, as discussed before, is the U.S. now accounting for about 47% of global exports. The major terminal expansion projects underway in the U.S. will allow for a substantial increase in LPG exports and resolve any bottleneck issues. Within this year, Enterprise expects to have online 2 major projects in Neches River and the Houston Channel.
And while LPG exports are generally production driven, the key will be to find buyers for the product as it may be challenging for demand to keep up with the increased supply as the recent U.S. inventory buildup in late 2025 shows. In the Middle East, there is also — there are also expansion projects underway in Qatar and the UAE that will add 20 million tons by the end of the decade.
However, developing at this moment is the situation in Iran as Iran, despite the sanctions, is a major LPG exporter with over 12 million tons last year and exports — or exports from the Gulf in general if the conflict spreads may lead to a major trade disruption. In the face of such uncertainty, rates usually spike violently. As far as other major players, there are good news coming out of India with significant growth in LPG imports of 12% for last year and a major increase in imports from the U.S. There’s still a lot of room for U.S. volumes towards India to rise as they were almost nonexistent before the deal was made earlier last year.
Of course, they will face competition from the Middle East countries as they’re also vying for a piece of that pie with companies like Saudi Aramco recently exploring direct investment in India’s petrochemical sector. Further east, we have the largest LPG importer in China that showed no growth in imports in 2025. The U.S.-China LPG trade has been a victim of the trade tension with the U.S. with the U.S. share of the Chinese imports falling from 60% to roughly 30% last year as China is trying to diversify its sources.
In the longer term, we continue to see Chinese demand being driven by the PDH plants and the share of imports allocated to PDH plants continues to grow, estimated now to be at 55%. However, breakeven margins are currently leading to lower operating utilization in those plants. There is a risk that the current climate may lead to a slowdown in commissioning. All in all, future capacity additions from the U.S. infrastructure projects, Middle East expansions and Asia demand growth create a positive outlook for sustained market expansion through to 2030. On Slide 10, we’re updating you on the commercial side.
Contrary to the seasonal softening typically seen in Q3, the spot market strengthened through Q4 on the back of improved winter demand and tighter tonnage availability. The TC market continued to hold firm through Q4. 3,500 cubic meters and 5,000 cubic meter ships have remained around historically strong levels and 7,500 cubic meters and above have stabilized. Levels in the East of Suez remain substantially below the Western market, and we have no plans to increase our presence in the Asian pressurized market. There are some new orders placed for ’27 and ’28 deliveries, mostly from Asian clients in Asian yards as well as a few ’29 deliveries in Brazil.
Overall, still the order book remains very healthy, while the existing fleet has a large number of older ships that need to go. Roughly 1/3 of the fleet is over 20 years of age, but as expected in a healthy market, scrapping remains limited. For the Handysize ships, petchems continue to be a key driver for the market through Q4. LPG activity improved modestly compared to Q3. The TC market remains heavily influenced by the very small pool of owners. With a limited order book and a constructive medium-term outlook, we continue to expect TC levels to remain firm moving into 2026, albeit with some activity to global economic sensitivity to global economic developments.
The MGC spot market maintained the positive momentum seen in Q3 and strengthened even more during Q4, supported by continued activity in the VLGC segment and improved arbitrage economics. The improved spot environment encourage some charters to secure forward coverage, particularly for modern [indiscernible]. At the same time, the substantial order book scheduled for delivery over the next 2, 3 years remains a key medium-term consideration and market sustainability will depend on demand growth keeping pace with fleet expansion.
Concluding this presentation today, we believe that last year has been an excellent year for our company as demonstrated by the financial performance, generating $66 million of adjusted profits, one of the best results in our history despite this being the most volatile year I can remember in terms of geopolitics and despite having one of our MGC vessels out of action. We finished the year with $29 million in free cash that has grown currently to $110 million. We expect to have some more concrete information on that situation within the next couple of months. The market, as we are in the winter season, holds firm, and we are optimistic for the short term.
The situation in Iran may lead to higher short-term volatility, but we are in a strong position to take advantage of any situation as it develops or weather any storm. Over the last couple of years, we have achieved a lot, improving our profitability, strengthening our cash position, reaching our strategic goal of being completely debt-free and looking after our shareholders with share buybacks. StealthGas is a solid company in a niche market with a bright outlook. We have now reached the end of our presentation. We’d like to thank you all for joining us at our call today and look forward to having you with us again for our Q1 quarter results in May. Thank you.
Operator: This concludes today’s conference call. Thank you for participating. You may now all disconnect. Have a nice day.
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