Imperial Petroleum Inc. reports second quarter and six months 2023 financial and operating results
IMPERIAL PETROLEUM INC. (NASDAQ: IMPP, the “Company”), a ship- owning company providing petroleum products, crude oil and dry bulk seaborne transportation services, announced its unaudited financial and operating results for the second quarter and six months ended June 30, 2023.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
· Fleet operational utilization of 75.4% in Q2 23’ with 28 days of technical off hire and 129 days of vessel repositioning.· 68.5% of fleet calendar days equivalent to 734 days in Q2 23’ were dedicated to spot activity.· Revenues of $59.0 million in Q2 23’ – up $47.7 million or 422.1% from Q2 22’.· Net income of $16.8 million in Q2 23’ up by $16.7 million compared to Q2 22’.· Adjusted Net income 1 of $26.6 million in Q2 23’ up by $26.5 million compared to Q2 22’ or 26,500%.· Adjusted EBITDA1 of $30.8 million in Q2 23’ up by $27.8 million or 926.7% from Q2 22’.· Cash and cash equivalents including time deposits of $98.6 million as of June 30, 2023 – a strong cash balance in spite of utilizing within Q2 23’ an amount of $45.9 million for the repayment of all outstanding loans.· As of June 30, 2023 Imperial Petroleum has zero debt on its balance sheet.· In the 1H 23’ the Company generated a Net Income of $52.6 million corresponding to a basic EPS of $3.17.· In the 1H 23’ the Company generated an Adjusted Net Income of $62.6 million corresponding to an Adjusted basic EPS1 of $3.79.· Spin off of two of our four Handysize drybulk carriers to a separate listed entity called C3is Inc. on June 21, 2023.· Imperial Petroleum retains an interest in C3is Inc. through ownership of 600,000 Series A Convertible Preferred Shares of C3is Inc.· In July 2023, the Company sold its Aframax tanker to C3is Inc. for a consideration of $43 million.
Six Months 2023 Results
§ Revenues for the six months ended June 30, 2023 amounted to $124.5 million, an increase of $108.0 million, or 654.5%, compared to revenues of $16.5 million for the six months ended June 30, 2022, primarily due to the increase in the average number of our vessels and improved market conditions resulting in higher rates particularly in the spot tanker market.
1 EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are non-GAAP measures. Refer to the reconciliation of these measures to the most directly comparable financial measure in accordance with GAAP set forth later in this release.
§ Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2023 were $36.1 million and $13.9 million, respectively, compared to $4.9 million and $5.1 million, respectively, for the six months ended June 30, 2022. The $31.2 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 1,009 days (458.6%). The $8.8 million increase in vessels’ operating expenses was primarily due to the increase in the average number of vessels in our fleet by approximately six vessels.
§ Drydocking costs for the six months ended June 30, 2023 and 2022 were $1.3 million and nil, respectively. This increase is due to the fact that during the six months ended June 30, 2023 two of our Handysize drybulk carriers underwent drydocking.
§ General and administrative costs for the six months ended June 30, 2023 and 2022 were $2.5 million and $0.5 million, respectively. This rise is mainly attributed to $1.1 million of stock-based compensation expense along with a rise in reporting costs related to our spin off project.
§ Depreciation for the six months ended June 30, 2023 was $8.7 million, a $3.8 million increase from $4.9 million for the same period of last year, due to the increase in the average number of our vessels.
§ Interest and finance costs for the six months ended June 30, 2023 and 2022 were $1.8 million and $0.5 million, respectively. The $1.8 million of costs for the six months ended June 30, 2023 relate mainly to $1.3 million of interest charges incurred up to the full repayment of all outstanding loans concluded in April 2023 along with the full amortization of $0.5 million of loan related charges following the repayment of the Company’s outstanding debt.
§ Interest income for the six months ended June 30, 2023 and 2022 was $2.1 million and $0.04 million, respectively. The increase is attributed to our time deposits during the period at favourable time deposit rates.
§ Impairment loss for the six months period ended June 30, 2023 stood at $9.0 million, and related to the spin-off of two of four drybulk carriers to C3is Inc. The decline of drybulk vessels’ fair values compared to one year ago when these vessels were acquired resulted in the incurrence of impairment loss.
§ As a result of the above, the Company reported net income for the six months ended June 30, 2023 of $52.6 million, compared to a net income of $0.3 million for the six months ended June 30, 2022. The weighted average number of shares outstanding, basic, for the six months ended June 30, 2023 was 15.9 million. Earnings per share, basic and diluted, for the six months ended June 30, 2023 amounted to $3.17 and $2.78, respectively compared to a loss per share, basic and diluted, of $0.81 and $0.81 for the six months ended June 30, 2022.
§ Adjusted Net Income was $62.6 million corresponding to an Adjusted EPS, basic of $3.79 for the six months ended June 30, 2023 compared to adjusted net income of $0.3 million, or $0.81 loss per share, basic, for the same period of last year.
§ EBITDA for the six months ended June 30, 2023 amounted to $60.9 million while Adjusted EBITDA for the six months ended June 30, 2023 amounted to $71.0 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
§ An average of 10.9 vessels were owned by the Company during the six months ended June 30, 2023 compared to 5.0 vessels for the same period of 2022.
§ As of June 30, 2023, cash and cash equivalents including time deposits amounted to $98.6 million and total debt amounted to nil. During the six months ended June 30, 2023 debt repayments amounted to $70.4 million.
CEO Harry Vafias Commented:
Within the first six months of 2023 our company managed to generate an adjusted net income of $62.6 million corresponding to a Basic Earnings Per Share of $3.79 which is well above our current share price. Compared to the first six months of 2022 our increase in net income was in the order of 20,500%. Our strong performance is unquestionable but so is the fact that we are significantly undervalued. We have a fleet valued at about $225 million, zero debt and about $100 million in cash. The outlook for the tanker market remains favourable whereas there might be opportunities in the dry bulk sector as dry ship values are dropping. We will continue to capture this favourable momentum generating strong results while growing our Company further.
Imperial Petroleum Inc. Reports Record Third Quarter And Nine Months 2022 Financial And Operating Results
Imperial Petroleum Inc., the smallest of the 4 shipping companies of the Vafias Group announces record breaking results.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
• Fleet operational utilization of 86.3% in Q3 22’ – with a predominant presence in the spot market.• Delivery of our second dry bulk handysize carrier the Eco Angelbay on October 19, 2022.• Revenues of $42.6 million – up $ 31.3 million or 277% up from Q2 22’.• Net income of $15.5 million – up $15.4 million or 15,400% from Q2 22’ and equivalent to approximately 23% of our current market capitalization.• EBITDA of $18.7 million in Q3 22’ up $15.7 million or 523% from Q2 22’.• Cash and time deposits of $92.4 million as of September 30, 2022 which is 1.3 times higher than our current market cap.
Third Quarter 2022 Results:
▪ Revenues for the three months ended September 30, 2022 amounted to $42.6 million, an increase of $38.5 million, or 939.0%, compared to revenues of $4.1 million for the three months ended September 30, 2021, primarily due to the increase of our average fleet by approximately four vessels and a noticeable improvement in charter rates.
▪ Voyage expenses and vessels’ operating expenses for the three months ended September 30, 2022 were $18.4 million and $4.9 million, respectively, compared to $0.7 million and $1.9 million, respectively, for the three months ended September 30, 2021. The $17.7 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 456 days (786%) and the rise in bunker prices. This quarter we incurred $1.2 million of voyage costs due to the repositioning of three of our product tankers for a total period of 42 days. The $3.0 million increase in vessels’ operating expenses, was primarily due to the increase in the average number of our vessels and one of our product tankers coming off a bareboat charter during the third quarter of 2022.
▪ Depreciation for the three months ended September 30, 2022 and 2021 was $3.4 million and $2.2 million, respectively. The change is attributable to the increase in the average number of our vessels.
▪ Interest and finance costs for the three months ended September 30, 2022 and 2021 were $0.3 million and $0.004 million, respectively. The increase is mainly attributable to the interest expense incurred relating to our loan agreement entered into in November 2021.
▪ As a result of the above, for the three months ended September 30, 2022, the Company reported net income of $15.5 million, compared to net loss of $0.9 million for the three months ended September 30, 2021. Dividends paid on Series A Preferred Shares amounted to $0.4 million for the three months ended September 30, 2022. The weighted average number of shares of common stock outstanding, basic, for the three months ended September 30, 2022 was 190.3 million.
▪ Earnings per share, basic, for the three months ended September 30, 2022 amounted to $0.08, compared to a loss per share of $0.19 for the three months ended September 30, 2021. EBITDA for the three months ended September 30, 2022 amounted to $18.7 million. Reconciliations of EBITDA to Net (Loss)/Income are set forth below.
▪ An average of 8.1 vessels were owned by the Company during the three months ended September 30, 2022 compared to 4.0 vessels for the same period of 2021.
Nine Months 2022 Results:
▪ Revenues for the nine months ended September 30, 2022, amounted to $59.1 million, an increase of $45.7 million, or 341.0%, compared to revenues of $13.4 million for the nine months ended September 30, 2021, primarily due to the increase in the average number of our vessels and improved market conditions resulting to higher rates particularly in the spot market.
▪ Voyage expenses and vessels’ operating expenses for the nine months ended September 30, 2022 were $23.3 million and $10.0 million, respectively, compared to $2.7 million and $5.6 million for the nine months ended September 30, 2021. The $20.6 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 495 days (207.1%) and the rise in daily bunker cost by approximately $16,000. The $4.4 million increase in vessels’ operating expenses, was primarily due to the increase in the average number of our vessels and one of our product tankers coming off a bareboat charter during the third quarter of 2022.
▪ Depreciation for the nine months ended September 30, 2022, was $8.3 million, a $1.8 million increase from $6.5 million for the same period of last year, due to the increase in the average number of our vessels.
▪ Interest and finance costs for the nine months ended September 30, 2022 and 2021 were $0.7 million and $0.007 million, respectively. The increase is mainly attributable to the interest expense incurred relating to our loan agreement entered into in November 2021.
▪ As a result of the above, the Company reported net income for the nine months ended September 30, 2022 of $15.8 million, compared to a net loss of $2.2 million for the nine months ended September 30, 2021. The weighted average number of shares outstanding for the nine months ended September 30, 2022 was 107.5 million. Earnings per share, basic,for the nine months ended September 30, 2022 amounted to $0.13, compared to a loss per share of $0.45 for the nine months ended September 30, 2021.
▪ EBITDA for the nine months ended September 30, 2022 amounted to $24.4 million. Reconciliations of EBITDA to Net (Loss)/Income are set forth below.
▪ An average of 6.05 vessels were owned by the Company during the nine months ended September 30, 2022 compared to 4.00 vessels for the same period of 2021.
▪ As of September 30, 2022, cash and cash equivalents amounted to $62.4 million and total debt, net of deferred finance charges, amounted to $42.4 million. During the nine months ended September 30, 2022 debt repayments amounted to $2.4 million.
CEO Harry Vafias Commented:
This quarter’s unprecedented profitability growth is solid proof that our company’s strategy is paying off. With the capital recently raised we have managed to grow our fleet, maximize our profitability, substantially increase our cash flow and create value to our investors. As a result of having acquired six vessels in a course of ten months, we generated net income of $15.5 million in a single quarter which is 15,400% higher than our profit in Q2 22’ and is equivalent to 23% of our current market capitalization; We incurred moderate debt during the quarter, maintaining a healthy capital structure with $42.4 million of debt while preserving afree cash balance available for further fleet expansion of about $92 million. Given the strong market fundamentals and the promising charter rate environment and by taking advantage of our efficient management of our expanded fleet, we believe that we will achieve strong results and generate significant cash flow going forward. However, the valuation of our shares of common stock does not reflect our strong financial performance and capital available to fund our growth prospects.