Good day, and thank you for standing by. Welcome to the StealthGas Q2 2022 results call and webcast. [Operator instructions]. Please note that today's conference is being recorded. I would now like to hand over to your first speaker, Mr. Harry Vafias, CEO. Please go ahead, sir.

Good morning, everyone, and welcome to our second quarter 2022 earnings conference call. This is Harry Vafias, CEO, and joining me on our calls today is Mr. Sistovaris, who is handling our Investor Relations, to discuss the financial aspects. Before we commence our presentation, I'd like to remind you that we'll be discussing forward-looking statements, which reflect current views with respect to future events and financial performance. At this stage, if you could all take a moment to read that disclaimer on Slide 2 of the presentation. Risks are further disclosed in StealthGas’s filing with the Securities and Exchange Commission. I would also like to point out that all amounts quoted, unless otherwise clarified, are implicitly stated in US dollars. Today, we released our earnings results for a second quarter 2022, which was also the second quarter of trading as a pure LPG company, and we showed a fantastic improvement compared to last year. So, let's proceed to discuss these results and what we see in the market in general. In Slide 3, we summarize the highlights of the second quarter. In the second quarter of 2022, the strong charter market that we experienced in the first quarter, continued, particularly west of Suez, but also in Asia we show healthy number of inquiries for charting our ships. In terms of operational utilization of our fleet, at 97%, it was similar levels to last year, and better than the previous quarter. Idle days for spot vessels were reduced. However, we did not drydock any vessels during this quarter. That will happen in Q3 and Q4. We now have 62% of our fleet days secured on period charters for the remainder of 2022, with total fleet employment days for all subsequent periods generating about $72 million, excluding JV vessels in contractors’ revenues.…

Thank you, Harry, and good morning to everyone. I will discuss our financial performance for the second quarter of 2022. Let us turn to Slide 7, where we see the income statement for the second quarter of 2022, against the same period of the previous year. Voyage revenues came in at $39.3 million, almost the same as last year, partly due to the fewer vessels in the spot market. Our spot market days decreased by 59% to just 364 days. And in spite of the fewer number of vessels, we had 34 vessels at the end of Q2, versus 42 vessels at the end of Q2 2021. We should also note the increase in the voyage and the TCE revenues of the four handysize LPGs in the fleet that were all chartered at higher rates in a stable market, albeit starting from a lower base. Voyage cost decreased by $1.3 million compared to the same period last year, down to $4.6 million for the same reasons. The stable revenues and the decrease in cost combined, resulted in net revenues for the period in the order of $34.6 million compared to $33.3 million last year, an increase of 4%. Operating expenses saw a significant reduction of $2.5 million, about 16% compared to the first quarter of last year, due to the fewer number of vessels. Were we to exclude this effect, our operating expenses would be along the same levels as last year, a positive result, given that we continue to face cost pressures, particularly in crew costs due to the COVID situation and due to rising inflation. In terms of drydocking costs, we had $0.2 million in the second quarter. We did not drydock any vessel during that period, and we extended the due date for a couple of vessels…

Moving on Slide 10, we are providing some insight on the LPG market. Needless to say that given the ongoing geopolitical tensions in Ukraine, along with the ongoing COVID-19 pandemic, it’s very difficult to foresee our market's performance. Last quarter, we discussed how we had not seen any increase in inputs from China, the largest importer of LPG, but we’re expecting this to change. Indeed, it seems the lifting of COVID restrictions had a positive impact, and as latest reports show, Chinese imports seem to have reversed and grown by yet a moderate 1% year-on-year for the first seven months of 2022, and a strong 7% month-on-month growth in May. This helped underpin the pressurized market for our vessels. The rising demand would have been stronger had there not been delays in PDH plants capacity additions. Out of the 7.5-million-ton capacity additions expected this year, only 2.2 million tons have been added this thus far, as potent research shows, and the run rate of China's 17 PDH plants continues to run at lower levels. We would expect more plants to come in the equation as the year progresses. India has seen a significant growth in recent years, becoming the second largest import in Asia. Data shows record imports close to $2 million tons are expected for the month of August. However, questions remain on the sustainability of this growth, as import data from the subcontinent is unconfirmed, and demand growth may be hampered by the rise in domestic LPG prices. Households in India have been hit by four hikes in LPG cylinder prices this year, despite the drop in LPG process globally, commensurate to the drop in oil prices, and the government is reluctant to keep subsidizing the LPG prices of gas cylinders. And as everywhere, LPG demand is echoed…

Thank you. [Operator Instructions]. Our first questions comes from the line of Sai Chandra from (Infosys). Please ask your question. Hello, Sai Chandra. Your line is open. Hello, Mr. Chandra, your line is open from (Infosys). You may ask a question.

We can go to the next caller.

Sure. We're going to proceed with the next one. Please stand by. The next questions come from the line of Tate Sullivan from Maxim Group. Please ask your question.

Yes. Hello. Good day. Harry. can you give more background on the decision to acquire the newbuild Medium Gas Carriers versus buying smaller small gas carriers? And will those be in your JVs as well or within gas?

Thank you. Tate. Nice to hear from you. The bigger ships have bigger profitability when the market is firm. And since we've said before that we want to balance the fleet between small and bigger ships, by having less smaller ships and more bigger ships, we are following exactly on that strategy. The two ships will be 100% owned - these two ships will be 100% owned by StealthGas.

Okay. And then what’s the delivery in the second half of ‘23, how long ago were these ships originally ordered? And second part of that question, if you would order medium sized or small LPG ships, when would you probably take delivery of newbuilds if you ordered today, please?

These ships, I think, were ordered in Q4 2020. And what was the second question? Sorry.

If you would order small gas carriers or Medium Gas Carriers newbuilds today, would they be for ‘25 delivery or perhaps even later or earlier?

Yes, it would be for ‘25, but with the prices as they are today, we would refrain from ordering newbuilds.

Okay, great. And can you - in selling the Nebula, can you talk in this straw market - and I see it was built in 2007. Can you talk about the decision to sell versus retaining the ships, even if they can generate profits for you in this type of market, please?

Tate, it’s quite a simple logic. If you can sell a ship which is 15 years old with SS, Special Survey being due, and you can sell her at the price when you make a sizeable profit, then you take the decision and do it. And that's why the board of StealthGas and the JV partners approved the sale.

Great. Thank you. And one more for me, if I may. You noted drydock costs for, I think, five ships in the second half of the year. Approximately how much drydocking costs per ship or historically have dry costs been for smaller LPG ships?

It depends on the location as well. It’s not only the size. It depends on the location and the age of the ship. So, I don't have the exact info right now, but if you’d like, you can send us an email and we can come back with more numbers, more specific numbers.

Okay, great. Thanks. Thank you for the details. All right. Thanks.

[Operator instructions]. We have no further questions at this time. I will now hand back the conference to you for any closing comments. Oh, we just have 2Questions. Just one moment. The next questions come from the line of (indiscernible) from the (indiscernible) Foundation. Please ask your question. Your line is open.

Yes. Hi. I had to leave for a moment. I don't know if anyone asked you about stock buybacks. Did they?

No, they didn't.

Oh, okay. What - we used to talk about $12 a share of NAV. Maybe the number is lower. I don't know. I've crunched numbers a little bit lower, but whatever the number, it's tremendously - it's a multiple of what our market price is.

Yes, I would agree with you 100%

Good. Well, we have a lot of cash, more cash. Why aren't we buying stock back? It seems to me to be one of the best buys in the market.

Yes. But you probably forgot what we said in the Q1 results.

Which pertaining to this, I guess I …

Yes. Pertaining exactly to this. If you don't remember, I don't mind repeating it.

Okay. Thank you.

The board has told us since we had two, three years of really bad markets and the COVID disruptions, they want to see two, three solid quarters before we discuss share buybacks.

Okay, great. Fair enough.

So, I guess this is the second solid quarter. So, if we have a very solid Q3, I think it'll be a matter for discussion at board level.

Great. Thank you very much, Harry.

We are going to proceed with the next question. The next questions come from the line of Tate Sullivan from Maxim Partners. Please ask your question.

Well, thank you for taking a follow-up on. Just, you commented on some of the seasonality earlier, and you’re saying 3Q will probably be not as strong as 2Q, but then in the time charter equivalent rate table in the presentation, it seems like a good momentum in rates, but still seasonality, and particularly without the tankers in your fleet now after the spinoff, so still every year, 3Q and 2Q, do you expect an LPG to be the weakest quarters of the year?

As with - under normal circumstances, Q4 and Q1 are strong. Q2 and Q3 are weaker.

Great. Thank you very much. All right. Have a great day.

We're going to proceed with the next question. Please stand by. The next questions come from the line of Michael (indiscernible) from (indiscernible) Partners. Please ask your question.

Harry, how will you and the board feel comfortable buying - committing to buying over $100 million in two new ships, and yet uncomfortable buying back stock until you see three or four quarters, when buying back stock is essentially buying a diversified portfolio of ships that are already built, on the water and leased that you know a lot about, and purchasing two new ships you know none of those facts? I don't quite see how you can do one without the other.

Very good point. The strength of this company is the size of the fleet and the modernity and quality of the fleet. If we don't keep building and buying quality vessels, our oil major customers will dump us for somebody else. So, for a company that has $800 million in assets, low leverage, and a very strong balance sheet, buying two ships with minimal cash outflow, I don't consider that a crazy move.

Right, but purchasing your stock is essentially buying ships. If you're comfortable buying ships …

Not for our customers. For our shareholders, yes, but not for our customers

I appreciate what we do for our customers, but buying back stock is what you do for your shareholders, amongst paying dividends.

Yes. And that's why we are one of the few LPG companies in the world that's done consecutive buybacks and also a tender offer, if you remember.

I understand that, but the analysis of - to order ships, purchase ships, is no different than purchasing stock. A buyback function …

It's completely different because the one pleases the shareholders, the other pleases the customers, and we need to try to have both pleased, which is not an easy equation.

I'm going back to what the board and you said in the first quarter, which is, you want to see two or three strong quarters before you do a buyback. But if you look at it from the perspective of purchasing ships, buying your stock is the functional equivalent of purchasing ships. I understand from a customer perspective, but from a financial analysis perspective and a risk analysis, it's an identical thing.

I am the largest shareholder of the company, my good friend. Don't you think it'll be benefit me if we did a share buyback?

I'm sure it would. And so, I'm trying to understand …

Exactly. So, I agree with you 100%, but that's what the board has said, and we have to respect their opinion, of which we agree with.

I'm just trying to understand the analysis that the board went through in which it commits to purchase two ships as opposed to purchasing 13, 14, 20 ships.

I just explained it to you three minutes ago, exactly explained why we did it.

It's not coming through.

Okay. We can discuss it offline then.

Okay.

Thank you very much.

Thank you.

We are going to proceed to the next question.

Last one, please.

The next questions come from the line of (indiscernible) from the (GAD Foundation). Please ask your question.

Yes. Hi, Harry. One other question. You don't do conference calls for Imperial Petroleum. Would you consider it? It seems very difficult to follow that company. Would you consider doing conference calls?

Sure. I don't understand the question. What do you mean conference calls?

What we're doing today, you don't do that.

This is - we're obliged by law to have quarterly results announcements. And obviously we do calls for both companies.

Oh, you do? You do them for Imperial Petroleum?

We are obliged by law, so yes.

Oh, because I haven't seen any notice of it or email. And is there a website or?

Of course there’s a website.

Okay. Then it's my negligence. Thank you.

No problem. But this is a StealthGas call now.

Right. Of course.

So, we would like to thank you all …

There are no further questions at this time. Thank you.

We'd like to thank you, everybody, for joining us at our conference call today, and we look forward to having you again with us for our Q3 results in November. Thank you very much.

That concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you.