Good day and welcome to the StealthGas, Inc. Half Year 2015 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Harry Vafias. Please go ahead.

Good morning, ladies and gentlemen and welcome to our second quarter and half year 2015 earnings presentation webcast. This is Harry Vafias, the CEO of StealthGas. Joining me on the call today is the Finance Officer, Mrs. Fenia Sakellaris, who will be presenting the company’s financial performance at the later stage of our call. Before we briefly present our today’s topics and discussion, I would like for all of you to be reminded that we will be discussing forward-looking statements, which reflect current views with respect to future events and financial performance. At this stage, please take a moment to read our disclaimer on Slide 2 of this presentation. It’s noted that risks are further disclosed in StealthGas’ filing with the Securities and Exchange Commission. Let’s proceed in summarizing today’s agenda. I will begin with an overview of our company’s highlights for the second quarter of this year, then we will discuss our financial performance and provide an overview of the LPG market. And finally, after a close look at our stock performance, I will share our views on our company’s outlook. I would like to note that all amounts, unless otherwise clarified, are implicitly stated in U.S. dollars. Moving to Slide 3, we are summarizing our company’s key highlights for the period. As an opening statement, I would like to point out that in terms of market conditions, the second quarter ‘15 was quite challenging as freight rates were in the lower end of their cycle. Nevertheless, we are pleased particularly for operational performance. During Q2 of ‘15, we took delivery of four new Eco LPG carriers, the Eco Enigma, the Eco Royalty, the Eco Loyalty and the Eco Universe and since then we had further three new deliveries of Eco LPG vessels, namely the Eco Galaxy, Eco Czar…

Thank you, Harry. Good morning to everyone. Let us move on to Slide 9, where we see the income statement for the second quarter of ‘15 and the half year results against the same periods of the previous year. Looking at the second quarter results, our voyage revenues came on $32.4 million, increased by 2% compared to the same period of ‘14. The moderate revenue increase in spite the net addition of four vessels is attributed to two factors, low demand to seasonal factors and low freight rates as the market is at the bottom of the cycle affected by weak economies and the vessel oversupply. In the demand was lower than expected as LPG inventories were quite high this quarter and thus the rates year-on-year decline was as high as 28% for the 2,500 CMB vessels. Voyage costs amounted to $3.9 million, marking a 12.4% increase compared to Q2 ‘14. At this quarter, we had the higher number of vessels operating in the spot market. It’s worth mentioning that this quarter compared to Q2 ‘14 spot days nearly doubled. However, the increase in voyage costs was less than anticipated since we saw a sharp decline in bunker fuel costs. In the second quarter of ‘14, average price of crude oil was $103 per barrel, whereas in Q2 ‘15, it was $57 per barrel. Based on the above, net revenues came at $28.5 million. Running costs marked the 7.2% increase, because of the net addition of four newbuildings plus the continuous of including OpEx for the two vessels sold and leased back by our company which are currently on time charters. Focusing on operating cost categories, we would like to point out that this quarter we saw an increase in crude cost attributed to our fleet expansion and the slight…

Let’s proceed with Slide 13. LPG transportation demand is exhibiting and will continue to demonstrate the positive trend. During ‘14, demand for LPG transportation grew by 9%, while it’s estimated that the growth rate for ‘15 will be somewhat lower in the order of 7%. The main reason behind this, in a market of declining oil price and a slow global economy is the increased imports of China from the U.S. which is anticipated to continue to increase in the upcoming years. Overall, LPG price arbitrage is between the U.S., Europe and Asia plays significant role in shaping international trade and mostly benefit the larger LPG ships rather than the coastal ones. In terms of coastal ships, indeed this year, the falling freight rates have exerted pressure in our market, but I believe that our segment will be affected positively perhaps by China’s imports, the intensification of U.S. exports and the increased activity in the Middle East by the lifting of the uranium sections. With regards to China and the upcoming operational several PDH facilities from ‘15 to ‘16, we expect that this will be negatively affecting the trading of propylene, but will potentially increase China’s LPG imports. Slide 14 shows the evolution of the LPG charter rates. As evident by the table, we had experienced declining rates during the past year. The most affected segment in time has been the smaller ones, the 3,500 cubic meters with a year-on-year decline in the order of 27%. I strongly believe that one of the main reasons of seeing such low rates and being in the bottom of the rates circles apart from the slowing global economy in oil price volatility, the exist owners prevailing the coastal carrier segment. Moving to Slide 15 shows to continue our market discussion in the graph…

Thank you. [Operator Instructions] We will now take our first question from David Sachs from Hockey Capital. Please go ahead.

Good morning, Harry. It’s David Sachs.

Hi, David.

Hi. Just to discuss your philosophy at this point on the share repurchase program, it seems like that you are interested waned a little bit during the quarter from where it had been and just given your current cash position and your commitments in the cash production of the business is what you are thinking about in terms of executing on that buyback?

There is not much to say. We have had the program of $30 million. We have spent about half and we will continue to keep spending. But as you know, with the regulations that we have, we cannot buy whenever we want, we cannot buy at whatever price we want and in order – the volume, the share daily volume has been very minimal as you know very well. So, unless people are selling big blocks of stock, even if we wanted to spend the money fast, it’s not easy with such small daily share volume.

Okay. Second question, if we could talk a little bit about the macro environment, you discussed where current rates are near the lower end of the historical range. Can you please give us some sense of what you think will be the catalyst to increasing rate, is that going to rate risk scrappage? Is it going to be demand driven? And how do you see that playing out over the next 6, 12, 24 months? Thanks.

I have no idea about the future. Whoever has meant predictions in shipping in energy related stocks has been wrong as you know very well. The future of the rates depends on a few things, we have discussed them before, price of oil, the global economy, China, Europe, scrapping of ships, a reduction of the future order book, these are the main factors affecting LPG shipping and LPG freight rates. Now, I mean who expected the price of oil that it would still be $40 a barrel, I don’t think many people did especially last year. Who expected that will happen in China the last two weeks, the last one week, nobody, I guess. So because nobody can predict the future, what can do is be very conservative, be very careful on our running costs, be very careful on our debt because when rates collapse people get killed – companies get killed because of too much debt. So this is what we are trying to do, I am trying to sell selectively our older ships for scrap in order to try and help the supply situation and also reduce our cost by scrapping ships that cost more to run.

But your actions are to be commended at least in terms of portfolio management and exiting some of the older assets that looked like good prices and then as well the lease transactions that you executed over the last six months or eight months, those were quite well timed as well, I don’t know if there are any additional opportunities for pruning the fleet like that whether you consider selling some of your MRs?

If we sell our MRs there will be two problems. One, we will be booking a big book loss, because these were bought at the good times and the ships were expensive. And secondly, we will be deleting some very good – positive cash flow for the company. So I don’t know why. I mean, if we saw very good pricing, we would sell, but it’s not our priority right now. These ships are helping the bottom line. These ships are on bareboat, so we have zero maintenance and running costs for them. So the only thing these ships do is bring good money in the company, good money in the bottom line. So and it’s only as you know three ships out of a total of 57, so it’s not like a huge amount of ships that is taking lots of our time and so on.

Although the thinking there was getting fair value for those vessels and if your shares are trading at as you just pointed out earlier 30% or 35% of the metal value that there is a significant arbitrage of being able to get a full and fair price for a non-core asset and redeploy...?

I agree 100%. But as I said before, let’s first finish with the buyback program, the existing buyback program. And then obviously, the situation is the same, that’s one of the ideas, yes.

Okay. I will get back in queue.

[Operator Instructions] We will now take our next question from Dan Abromowitz from Hillson Financial Management. Please go ahead.

Good morning.

Hello Dan.

I have a follow-up question on the share repurchase program. As you know, we have been strong advocates of aggressive stock repurchases, you started the program at $10 million, you added the $20 million which was – which we thought was very good, you started the buybacks fairly aggressively and the buybacks have been trending down since late last year and early this year, you bought less in the less first quarter than you had bought before and you bought less in the current quarter than you did in the first quarter, the stock has dropped considerably from when you started the program, you are talking about the fact that it is difficult to buy stock in the open market because of the liquidity which we recognize. So we have also advocated in the past for a self tender as a way to buyback a large chunk in one fell swoop, you have resisted that in the past, so I am wondering now with the stock at foreign change and the liquidity problem remaining, if you are now willing to consider a tender as a way to complete the buyback program more efficiently and more quickly?

We will discuss it, Dan I cannot give you an answer because it is not under my authority to discuss this kinds of things. It will be discussed at Board level. As I told you, the share buyback program has not been terminated, the exact opposite. We will continue to do so until we spend all the $30 million, unless of course the whole world comes upside down. But speeding it up is one of the ideas, yes you are not wrong.

Okay. Well, I understand it’s a Board decision, but we will just – I will just make the point that we would strongly advocate for a tender at this point. You could probably buyback a good chunk of that remaining $16 million or so at a price similar to you’re your average price has been now that the stock is where it is and we would strongly urge you to consider doing that in the near future. Thank you.

Thank you, Dan.

[Operator Instructions] We will take our next question from Jeff Geygan from Milwaukee Private Wealth Management. Please go ahead.

Thank you. Good afternoon Harry.

Hi Jeff, how are you?

I am well. Thanks. I would echo Dan’s thoughts as a shareholder I would like to see you tender for your stock. As you recall, directors represent shareholder interests so yet another shareholder advising our director reps to consider the tender. My question relates to opportunities that you are seeing in the marketplace to make acquisitions, assuming that others are also trading at discounts, are you seeing opportunities that might make sense?

We have seen a few but it’s quite difficult to decide because when you are trading at the third of the NAV – at one-third of the NAV, what’s better to buy your own stocks – your own stock at a third of NAV or to buy another asset at I don’t know 10%, 20% discount to NAV. I don’t know what’s best. If we didn’t have this big order book with brand new ship from top quality yards, I guess we would be more aggressively picking up bargains, but since we have such a big order book and we still have lots of ships to take deliver in ‘15, ‘16 and ‘17, it has to be a fantastic bargain to make us look at it.

Fair enough. But it’s not a binary decision you could buy in your own stock, you could acquire other assets on the cheap as well. Thank you, good luck with the…

Thank you, Jeff. But don’t forget that if the market continues to be soft, we need to have certain cash and we cannot spend all the money on buybacks and in new ships, because if the market continues to be like that and for another, I don’t know, 1 year or 2 years, then we will end up having problems like some of our dry bulk friends.

Thank you.

Thank you. Thank you, Jeff.

[Operator Instructions] We will take the next question from David Sachs from Hockey Capital. Please go ahead.

Harry, if you could discuss the thesis behind the purchase of the four semis that you are getting in 2017, whether that decision still makes sense today versus the date you committed to it, the market variables that affect the profitability of that subset of the market. And then to the extent did you would change your mind or can’t secure the financing, what does that do to your – do have a penalty involved in walking away from that order?

Yes. Good question, actually if you look at the numbers generated today at least, this has been the best decision we have ever made, because this ship still make $1 million a month which is about 20% return on equity where the small ships at the moment make silly returns. So up to now, it’s proven a very good decision. Now, of course I don’t know what will happen in Q1 ‘17, no one knows. But don’t forget that we took the difficult decision of building those ships in the most expensive yard in the world. We didn’t take the easy option of going to China and paying 20% less. Thus, I believe because of the quality of the ships and the quality of the workmanship, if we want to sell them, we can sell them. On top of that, on a matter of finance I have to tell you that when you have $1 billion in assets and only 35% debt to assets and you have the flawless record with 21 banks, you can raise the finance if you want in 48 hours. Thank god, we are in the position where we pay cash for all these installments for these ships. And in order not to spend shareholder money in fees, we prefer to raise the finance as to delay raising the finance as much as we can. So, we have said with the Board that we need to do have finalized the finance for all four ships within Q1 ‘16. So, we have another four, five months to finish this. Hello.

Yes. I am sorry. Thank you.

Thank you.

We will now move to Charles Rupinski from Seaport Global. Please go ahead.

Yes. Hi Harry.

Hi Charles.

Yes. I just have a quick question you have been commenting or just a more of a macro question on the legislative regime and everything with Greece that we have heard of some companies moving to Cyprus, do you have any comments on that as far as it affects StealthGas in terms of any tonnage tax or potential changes of tax regime or change in the corporate location or structure or anything?

Thank you, Charles. Very, very clever question, because its totally something which is in the news lately. The answer is that all the big companies have had a Plan B. None of the big companies actually want to move. We are all happy being where we are for us and our staff. With the new regulation after the Greek bailout, the tonnage tax increases marginally, so that will not affect us. If there are any other changes because this is Greece, so you never know. If there is something else that really affect us or a tax on the ship’s income or a big change on tonnage taxes then I guess, yes we will have to move. But it’s not that difficult because as you know we only have the staff in Greece and nothing else is in Greece. I mean, all of our ships are out of Greece. We keep a close to zero cash in Greek banks. We have no Greek flags. We have no Greek crew, etcetera.

A quick question on that, would you have to move staff to Cyprus or wherever you are going or could you just re-domicile the company and keep the staff where they are?

Good question again. That is not clear yet from the Greek authorities. Normally, you are considered a Greek company, if you are making the decisions in Greece. So the answer to your question is – but again if that does not change, the higher management should – if all this happens should not be in Greece. The lower staff, I guess can stay in Greece, but the higher management has to be somewhere else.

Alright, understood. Thanks for the color.

Thank you, Charles.

[Operator Instructions]

I guess there are no other questions. I would like to thank you all for joining us at our conference call today and for your interest and trust in our company. And we look forward to having you with us again at our next conference call for our third quarter results in November. Thank you very much.

That will conclude today’s conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.