Good day and thank you for standing by. Welcome to the StealthGas Q1 2023 Results Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Harry Vafias. Please go ahead.

Good morning, everybody and welcome to our first quarter 2023 earnings call and webcast. This is Harry Vafias, CEO of StealthGas, to discuss market and company outlook. And with me is Mr. Sistovaris, handling Investor Relations, to discuss the financial aspects. Before we commence the presentation, I’d like to remind you that we will 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 our disclaimer on Slide 2 of the presentation. The risks are further disclosed in the StealthGas’ filing with the Securities and Exchange Commission. I would also like to point out that all amounts quoted unless otherwise clarified are stated in U.S. dollars. Today, we released our earning results for the first quarter 2023, reporting yet again another quarter of strong profitability. So let’s proceed to discuss these record results and update you on the company’s strategy and the market in general. On Slide 3, we summarize some of these highlights. The first quarter is usually a seasonally strong quarter for LPG trading. So we continue with our strategy of fixing more ships on time charters at improved levels. The reduction in spot market days by 13% and the fact that we had a single vessel to drydock increased the operational utilization of the fleet to 97.3%. We saw increased interest from charters in launching longer periods and we took advantage of that. With that, we managed to have secured today 80% of the remainder of 2023 days contracted out. We have locked in about $115 million in revenues for all subsequent periods. In terms of our sale and purchase activity, we continue to look for opportunities to sell some vessels in a boosting market. Together with our joint…

Thank you, Harry and good morning to everyone. I will discuss our financial performance for the first quarter of 2023. Let us turn to Slide 7, where we see the income statement for the first quarter against the same period of 2022. Net revenues came in at $34 million for the quarter, a considerable increase by 8% compared to last year, considering that there was a reduction of around 12% in total fleet days. Operating expenses were $14.5 million for the quarter, similar to the previous quarter number. Operating expenses were elevated compared to last year despite the fewer vessels, and we expect them to come down in the next quarter, even though we face some inflationary pressures, particularly with crew costs. In terms of dry-docking, we had $1 million in the first quarter as we dry-docked one of the Handysize vessels and incur expenses for the preparation of 2 more dry docks that will follow. Depreciation is another item that we saw a decrease to $6.6 million due to the decrease in the number of assets. Interest and finance costs increased to $2.6 million due to the increases in interest rates, but they were low for this quarter as we included profit from the sale of two interest rate swaps. We expect these costs to increase going forward. This quarter, we also had a considerable increase in equity income in investees, which is our share in the profits of our JV structures. That came in at $8.8 million for the quarter as a result of the profits from the sale of the joint venture vessel. As a result, we ended the first quarter of 2023 with a net income of $16.8 million compared to $7.6 million for the same quarter of last year. This was a record quarterly net…

On Slide 10, we are providing some insight on the LPG market as a product and the increase in [indiscernible] so far. According to data from Banchero Costa during the first 3 months of 2023, LPG exports increased 6%, slightly better than was expected. The many exporters of LPG in the U.S. and Middle East countries continue to show significant double-digit increases in exports with U.S. firms planning capacity additions to further increase exports in the future. We expect European imports to start stalling and we may see some declines, especially as summer sets in. However, the theme of increased [indiscernible] imports also continues to be shut down even though LPG is not sanctioned, remains valid and better slow. Apart from Europe, the largest importer of LPG, India, China, Korea and Japan, have increased their imports. The rate reduction in LPG contract prices by price setter Saudi Arabia should be an opportunity for importers to restock. As far as China, the lifting of COVID restrictions led to a 4.5% increase in GDP in the first quarter, and the significant increase in imports of LPG, also positive for the short-term outlook is the fact that margins for PDH plants have finally turned positive and we see reported an increase in utilization rates for the production polypropylene. We have mentioned before that the main catalyst for China is LPG demand will be the increased capacity of the PDH plants that use imported propane as a feedstock. These plants have been plagued by [has a] delays and low production run rates due to the unfavorable margin, but the rapid expansion of PDH capacity in China over the last few years is certain. On Slide 11, we are presenting some of the key fundamentals in our shipping market commencing with the market rates for…

[Operator Instructions] We will take our first question. And the question comes from the line of Tate Sullivan from Maxim Group. Please go ahead. Your line is open.

Thank you. Thank you, Harry. And to start, so you ended the quarter – the first quarter with 32 ships, but the sale of an additional ship will be – has already been completed this quarter and selling four other ships, bringing your fleet down to 27 and then adding two newbuilds, so the fully delivered size of the fleet, 29 today with 5 JV vessels. Please, just start.

Sorry, what was the question?

What is the fully delivered size of the fleet, Harry, just to confirm? Is it 29 after you finalized all the sales that you announced today, 29 ships?

It’s a very fluid environment as we are buying and selling ships on a monthly basis, Tate, but I think your number is right.

Okay. Understood. And then announcing the $70 million sale, does it support the previously disclosed net asset value that you disclosed? Was it a month ago or so longer at 14.50. And can you talk about the gains on that sale, or is – or have you not finalized it?

I think that makes energy higher than that – than what was presented.

Okay. So, that higher value, okay. And then how about the opportunity to buy larger ships in this rising rate environment and then I mean could you – would you consider newbuilds, is it still extended delivery timelines for newbuilds? Are there opportunities to buy larger ships? Can you comment on that market, please?

I will, the ships are now very expensive that’s why we are selling ships. Newbuilding slots are – if you find any, they are going to be very forward, so not a big advantage to our shareholders. So yes, it’s going to be difficult.

Okay. And then you mentioned paying down. So, the sales of the four ships bringing in and reducing the debt that you have mentioned earlier in the remarks too, would – did you say that your – the initial pace of the repurchase activity might be a bit slow compared to paying down debt? And how long is the repurchase authorization, please? Two questions.

Sorry, I didn’t get the last part of your question.

Well, let’s start with how long is the repurchase authorization for the $15 million?

We haven’t given a timeline.

Okay. And then can that start immediately as well, or is there – when can StealthGas start repurchasing shares?

Yes, we are authorized now to start whenever we want. So, yes, the idea is to start straight away.

But did you mention earlier, maybe in the near-term, more to focus on paying down debt?

No, we didn’t say that. We said we wanted to do both things concurrently. But because obviously, we are not generating hundreds of millions, we have to prioritize the debt repayments over share repurchases, which means that we are going to do both, but maybe in a gradual way.

Okay. Great color. I will hop back in the queue. Thank you, Harry.

Thank you.

Thank you. We will take our next question. And your next question comes from the line of Climent Molins from Value Investor’s Edge. Please go ahead. Your line is open.

Good morning. Thank you for taking my questions. I wanted to follow-up about recent asset sales. You had previously strived to sell some of the oldest vessels on the fleet, and I was wondering what’s the reasoning behind the decision to sell some of the more modern assets, is it just taking advantage of a strong pricing environment, or is there something else?

Very good question. One, yes, the values for the ships now are quite high, so it’s a good time to sell. And two, we want – as we have said many, many, many quarters, again and again, we want to have a bigger balance, a better balance between smaller ships and larger ships. So, we need to sell smaller ships and when the time is right, buy bigger ships. So, that’s why we have done it.

That’s helpful. Thank you. And looking ahead, we are going to enter the seasonally weaker period of the year. Could you provide some guidance on whether you see profits growing for Q2 and whether you have any visibility for Q3?

No, we don’t give guidance. But as we have already said, 80% of the 2023 days are already fixed. So, we don’t expect huge changes in our numbers.

Alright. Thanks for the color. That’s all for me. And I will pass it over. Congratulations for the quarter.

Thank you.

[Operator Instructions] We will take our next question. Your next question comes from the line of Tate Sullivan from Maxim Group. Please go ahead. Your line is open.

Thank you for taking my follow-up. And then in terms of the joint venture income in first quarter, $8.8 million, I think before, you had mentioned, how much of that was the gain on the sale versus the JV income, if you can disclose it?

$7 million was the gains out of the $8.5 million.

And then did I hear you mention earlier that operating expenses will decline quarter-over-quarter in 2Q ‘23 and being – but average operating expenses per ship? Are you saying, I mean, the total level based on the selling of the ship?

That’s what we are trying for, but inflation is a big enemy.

Okay. Thank you very much.

Thank you.

There seems to be no further questions at this time. Please continue.

We would like to thank all of you for joining us on the conference call today and for your interest and trust in our company, and we look forward to having you with us again for our Q2 results in August. Thank you.

Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.