C3is Q4 2024 Earnings Report

C3is EPS Results

• Actual EPS: -$4.56
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

C3is Revenue Results

• Actual Revenue: $9.41 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

C3is Announcement Details

• Quarter: Q4 2024
• Date: 3/11/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, March 11, 2025
• Conference Call Time: 10:00AM ET

C3is (NASDAQ:CISS) offers international seaborne transportation services. It provides its services to dry bulk charterers, including national and private industrial users, commodity producers and traders, oil producers, refineries, and commodities traders and producers. The company owns and operates a fleet of two drybulk carriers, which transport major bulks, such as iron ore, coal and grains, as well as minor bulks comprising bauxite, phosphate, and fertilizers, and one Aframax crude oil tanker that transports crude oil. C3is Inc. was founded in 2021 and is based in Athens, Greece.

C3is Q4 2024 Earnings Call Transcript

Key Takeaways

• Revenues grew 47% to $42.3 M in 2024, adjusted EBITDA rose 11% to $16.4 M, while adjusted net income declined 7% to $8.7 M amid higher operating expenses.
• The fleet expanded from one to four vessels, lifting capacity 234% to 213,000 dwt without bank debt, and year-end cash rose 39% to $12.6 M after $41 M in CapEx.
• Our Aframax tanker accounted for 76% of revenues, with handysize bulkers providing the balance; spot market exposure and Red Sea rerouting notably boosted tanker earnings.
• Management sees long-term growth driven by minor bulk trades (steel, aluminum) and renewable energy infrastructure, while geopolitical tensions and U.S. “drill baby drill” policies will shape tanker demand.
• The strategy emphasizes disciplined, selective acquisitions of high-quality, unencumbered vessels and robust liquidity to capitalize on market windows and potential U.S. tariffs on Chinese yachts.

Presentation

[Operator]

Good day, and thank you for standing by.

[Operator]

Welcome to the C3IS Fourth Quarter Earnings Conference Call and Webcast. All participants will be in listen only mode during the call with no question and answer session at the end. Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Doctor. Diamantis Andreotti's CEO.

[Operator]

Please go ahead.

[Diamantis Andriotis, CEO, President & Director at C3is]

Good morning, everyone, and welcome to our C3IS fourth quarter earnings conference call and webcast. This is Doctor. Diamantis Andriyotis, CEO of the company. Joining on the call today is our CFO, Minap India. 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 finance performance and are based on current expectations and assumptions, which by nature are inherently uncertain and outside of the company's control.

[Diamantis Andriotis, CEO, President & Director at C3is]

At this stage, if you could all take a moment to read our disclaimer on Slide two of this presentation. I would also like to point out that all amounts quoted unless otherwise clarified are implicitly stated in U. S. Dollars. Today, we released our earnings results for the fourth quarter of twenty twenty four.

[Diamantis Andriotis, CEO, President & Director at C3is]

So let's proceed to discuss these results and update you on the company's strategy and the market in general. Please turn to Slide three, where we summarize and highlight the company's performances, starting with our financial highlights. For the year 2024, we reported revenues of $42,300,000 which is an increase of 47% compared to year 2023. Our Aframax tanker, the Afrappel II contributed around 76% to the total revenues. Our net revenues came in at $28,000,000 an increase of 33% from 2023.

[Diamantis Andriotis, CEO, President & Director at C3is]

Our adjusted EBITDA was 16,400,000 an increase of 11% from 2023. Our adjusted net income came in at $8,700,000 a decrease of 7% from 2023. Our vessels net book value increased by 12% since year end 2023 due to the addition of the Eco Spitfire, a handysize dry bulk carrier that joined our fleet in April 2024. Our cash balance was $12,600,000 by the end of Q4 twenty twenty four, an increase of 39% from year end 2023, despite total CapEx payments of $41,000,000 30 9 point 5 million dollars for our Aframax tankers, the AFFII and $1,620,000 as 10% down payment on our bulk carrier, the Eco Speedfire. The balance due on our CapEx is $14,570,000 in April 2025, which represents 90% of the purchase price of the Handysize bulk hire Eco Spitfire.

[Diamantis Andriotis, CEO, President & Director at C3is]

Our short term bank deposits yielded $1,000,000 for the year 2024. Our TC for the year 2024 was $21,000 per day, ten percent lower than the rate for the year 2023 when it was 23,400 per day. Slide four shows the drybulk trade by the end of the fourth quarter of twenty twenty four. Despite global economic fluctuations, the market demonstrated resilience, particularly in the latter half of the year. In terms of the overall global fleet, handysize vessels hold a significant share, catering to minor bulk trade, regional markets and routes where larger vessels face operational constraints.

[Diamantis Andriotis, CEO, President & Director at C3is]

Their versatility makes them a vital segment in global dry bulk logistics, facilitating trade across a broad range of commodities, including grains, fertilizers and steel products. Iron ore and coal trade continue to have the lion's share in the drybulk trade, But the iron ore market is currently navigating a transitional phase with shifting dynamics influenced by economic trends, structural changes and environmental pressures. Despite subdued demand, iron ore production remained robust with major miners maintaining or increasing output levels. The seaborne coal market in 2024 has been marked by significant shift in market dynamics. Despite high inventory levels throughout the year, the Chinese thermal coal market remained fundamentally loose with declining prices and used volatility distinguishing it from the sharp price swings observed in prior years.

[Diamantis Andriotis, CEO, President & Director at C3is]

Demand dynamics experienced contrasting phases during the year. The first half of twenty twenty four was weaker as stronger renewable energy output suppressed coal demand. However, prolonged hot and dry weather in the second half, coupled with unexpected growth in the chemical sector, spurred the rebound in coal demand. Looking ahead to 2025, demand growth in developing countries, particularly India and Southeast Asia, is expected to offset declining demand in China. Industrial activity and infrastructure projects in these regions will play pivotal roles in sustaining coal demand.

[Diamantis Andriotis, CEO, President & Director at C3is]

In the longer term, growth opportunities will increasingly concentrate in emerging markets in Asia, while advanced economies continue to prioritize renewable energy and decarbonization efforts. The global grain trade in 2025 expects to exhibit a steady but uneven growth, driven by a mix of regional demand patterns, geopolitical factors and weather related challenges. Emerging markets in Asia and Africa will continue to drive grain imports growth due to rising populations, increasing incomes and urbanization. Countries such as Indonesia, Vietnam and Egypt are likely to remain key importers supported by their growing food and feed needs. Slide five shows the drybulk opportunities ahead and the handysize rate performance.

[Diamantis Andriotis, CEO, President & Director at C3is]

The drybulk sibbon trade is poised for steady growth with minorbulk trade emerging as a critical driver in the medium and long term. While major bulk like iron ore and coal face slowing or declining growth rates, minor bulks are expected to gain prominence supported by structural shifts in global trade and industrial demand. Minor bulk trade is anticipated to experience the highest growth in the long term, fueled by the increasing demand for materials tight sustainable development. Key drivers include expansion of renewable energy infrastructure, such as solar and wind energy projects, the rise in adoption of electric vehicles and the ongoing surge in sustainable building practices. Commodities such as steel products, aluminum and other construction related materials will be central to meeting the needs of these growing industries.

[Diamantis Andriotis, CEO, President & Director at C3is]

In the medium term, the stabilization of iron ore trade and the modest decline in coal shipments reflect the shift towards cleaner energy systems and reduce reliance on traditional bulk commodities. Evolving environment policies and industry adaptations are likely to moderate potential downturns, positioning the sector for gradual but necessary transformation. Initiatives such as lower vessel operating speed, retrofitting for energy saving technologies, increased vessel demolitions and growing emphasis on sustainability will likely affect supply side conditions. China has realigned its trade partnership towards nations like Russia, India and Southeast Asia, reshaping established trade routes and market dynamics. Slide six shows the Aframax tanker market fundamentals.

[Diamantis Andriotis, CEO, President & Director at C3is]

In 2024, there was significant difference between the first half of the year and the second. The year started with a strong first half on the tanker market in general and the Aframax market in particular. The Houthi attacks in the Red Sea resulted in substantial changes to the trading pattern of Aframaxes. The rerouting by the Cape Of Good Hope for clean cargos gave Alartus a significant boost in earnings in the first half of the year. This had a knock on effect in the Aframax market since many dirty but coated vessels cleaned up the tanks and therefore reducing supply on the dirty side.

[Diamantis Andriotis, CEO, President & Director at C3is]

Important role in the energy markets in 2025, particularly in The U. S, as the Trump administration is likely to push an agenda aligned with drill baby drill. Trump will improve sentiment towards the oil industry, though without put already at record levels, it would be difficult to push levels much higher in 2025. Geopolitical tensions and volatility are expected to continue to weigh heavily on oil tanker demand in 2025 and beyond. Russia is presumed to continue supplying crude and oil products in the market by complying with price cap or replenishing the shadow fleet.

[Diamantis Andriotis, CEO, President & Director at C3is]

U. S. Sanctions during France will tighten Iranian crude production exports, reducing exports by 400,000 barrels per day in the twenty twenty five, twenty twenty six period. Red Sea will gradually reopen as the Houthis lose financial support from Iran. In addition, the Israel Hamas tensions are currently easing.

[Diamantis Andriotis, CEO, President & Director at C3is]

Reduced daily transits through the Panama Canal due to low rainfall is not expected to emerge again in the near future. Tanker demand is projected to gain structural support over the next five years. This growth will be driven by Middle East expanding its crude balance by 2,000,000 barrels per day. With consistent Russian oil flow, mid sized tankers will continue to benefit, which could be further supported when the Red Sea choke point reopens and allows easier Russian oil flows to India, China and countries in The Middle East. The North American West Coast market continues to garner a large amount of attention regarding the ramp up of Canada's Trans Mountain pipeline expansion, TMX project.

[Diamantis Andriotis, CEO, President & Director at C3is]

The pipeline is a more efficient way of sending Canadian barrels to Asia. The TMX will bring an additional 590,000 barrels per day of Canadian crude at full capacity to the Port Of Vancouver. Canadian crude flows ex Vancouver are expected to range between The U. S. West Coast, Asia and likely West Coast Panama.

[Diamantis Andriotis, CEO, President & Director at C3is]

Since the project was completed in first half twenty twenty four, a total of 155 Aframax cargos have been recorded at Vancouver. Slide seven shows the Handysize fleet age and growth. The Handysize bulk fleet includes many old vessels with plenty of demolition potential. There are hardly any units on order at the moment. 32% of the trading fleet is over 20 years old, 33% is fifteen to nineteen years old, 27% is ten to fourteen years old, 2% is five to nine years old, whilst 5% has less than five years.

[Diamantis Andriotis, CEO, President & Director at C3is]

The order book to trading ratio is 1.6% in deadweight terms. In 2024, net fleet growth for small handbag bulkers of 20,000 to 34,000 deadweight was minus 0.3% year on year. Net fleet growth is expected to continue at around 0% in 2025 and then at around minus 0.5% in 2026. Fleet growth forecast for 2025, '20 '20 '7 is based on the current order book after assuming slip as an expected demolition. Slide eight shows the Aframax Tankers fleet age growth in order book.

[Diamantis Andriotis, CEO, President & Director at C3is]

The global Aframax LR2 fleet currently stands at eleven fifty four vessels. Of these, two sixty two vessels are over 20 years of age, accounting for 22.7% of the total number of vessels. With a starting tally of eleven thirty four vessels, the current fleet represents a change of 1.76 in vessel numbers over the year so far. The order book now stands at two thirteen vessels and presents 18% of the current fleet. Demolition activity is expected to remain strong going forward.

[Diamantis Andriotis, CEO, President & Director at C3is]

Significantly more vessels were built in the early 2000s compared to the 90s. Aframax vessels dominate the 2024 tanker sector with total newbuilding investments reaching $11,400,000,000 claiming the top position for the year among their largest counterparts. Newbuilding prices remain at their highest level year to date, although they appear to have stabilized over the latter part of the year. Slide nine shows the current fleet of C3IS. By the end of twenty twenty four, C3IS owned and operated the fleet of three hand sized dry bulk carriers and one Aframax oil tanker.

[Diamantis Andriotis, CEO, President & Director at C3is]

In May 2024, the company took delivery of the 33,000 deadweight drybulk carrier, the Eco Spitfire, bringing the total fleet capacity to 213,000 deadweight with an average age of fourteen years. All vessels have had their ballast weather systems already installed. Our capital commitment due in 2025 is a special survey of the tanker Afrappel II scheduled in Q3 twenty twenty five. All the vessels are unencumbered and currently employed on short to medium term period charters and spread voyages. Slide 10 shows a sample of the international charters with whom the management company has developed strategic relationships and has experienced repeat business.

[Diamantis Andriotis, CEO, President & Director at C3is]

Repeat business highlights the confidence our customers have for our operations and the satisfaction of the services we provide. The key to maintaining our relationships with these companies are high standards of safety and reliability of service. I will now turn over the call to Inup India for our financial performance.

[Nina Pyndiah, Chief Financial Officer at C3is]

Thank you, Diamantes, and good morning to everyone. Please turn to Slide 11, and I will go through our financial performance for the fourth quarter and twelve months of 2024. Voyage revenues for the year 2024 amounted to $42,300,000 an increase of 47% compared to $23,000,000 70 6 percent of our total revenues were contributed by our Aframax tanker, the Atra Pearl two. Our net revenues for the period generated December 24 were $28,200,000 an increase of 33% compared to the same period of last year. Our daily time charter equivalent was down by 10% from Q4 'twenty three.

[Nina Pyndiah, Chief Financial Officer at C3is]

Our fleet operational utilization was 90.3% for the twelve month period ending 12/31/2024 compared to 91.6%

[Nina Pyndiah, Chief Financial Officer at C3is]

for the

[Nina Pyndiah, Chief Financial Officer at C3is]

same period in 2023. Voyage expenses and vessels operating expenses for the year 2024 were $14,100,000 and $8,400,000 The increase in voyage expenses was related to increases in bunker costs and port expenses, and the vessels operating expenses increase was attributed to the increase in the average number of vessels. Voyage expenses for 2024 mainly included bunker costs of $6,900,000 and port expenses of $4,700,000 corresponding to 82% of total voyage expenses. This was due to the fact that our tanker, Biafra Pearl-two, was operating in the spot market. Operating expenses for 2024 mainly included core expenses of $4,400,000 corresponding to 52% of total operating expenses, spares and consumable cost of $1,800,000 corresponding to 21% and maintenance expenses of $900,000 representing works and repairs on board the vessels corresponding to 11% of total vessel operating expenses.

[Nina Pyndiah, Chief Financial Officer at C3is]

Management fees increased by 48% from 24% due to the increase in the average number of vessels. G and A costs were $3,000,000 and mainly related to the expenses incurred from the two public offerings and the reverse stock split. Depreciation recorded for 2024 was $6,200,000 a 51% increase from last year due to the increase in the average number of vessels. Related party interest and finance costs for the period was $2,500,000 dollars and related to the accrued interest expenses as of 12/31/2024, in connection with the balance payable on the acquisition prices of our Framax tanker Afra Pearl two and our bulk carrier, the Eco Spitfire. For accounting purposes, the balance payable on the two vessels had to be recorded as capital due and interest cost, although no interest was charged by the sellers.

[Nina Pyndiah, Chief Financial Officer at C3is]

The final balances paid remain the same as the originally agreed purchase prices. The Afra Pearl two was completely paid off in July 24, and 90% of the balance due on the EKOS VIZIR is payable on in April 25. Interest income of $1,000,000 for $24,000,000 was recorded and relate to the interest received on our bank deposits. As a result of the above, for the twelve months ended 12/31/2024, the company reported an adjusted net income of $8,700,000 compared to an adjusted net income of $9,300,000 for the same period of last year, a decrease of 7%. Adjusted EBITDA for the twelve months ended thirty one December twenty four amounted to $16,400,000 compared to an adjusted EBITDA of $14,700,000 for the same period of last year, an increase of 11.

[Nina Pyndiah, Chief Financial Officer at C3is]

A noncash item of $11,130,000 loss was recorded at year end 2024, resulting in a net loss of $2,700,000 for the year 2024. This noncash item represent the unrealized loss on the fair value of nonexercise warrants. Discounting this noncash item would have resulted in a net profit of $8,400,000 for 2024. Turning to Slide 12 for the balance sheet. Our cash balance was $12,600,000 by the end of Q4 twenty twenty four after paying 39,500,000 for the remaining 90% purchase price of our Framax Tanker Afra Pearl-two in Q3 twenty twenty four and $1,620,000 which was 10% of the purchase price of the Handysize drybulk carrier, EcoSleepTrier in Q2 twenty twenty four.

[Nina Pyndiah, Chief Financial Officer at C3is]

The fleet book value as at the December 2024 was $84,000,000 an increase of 12% from year end twenty three due to the addition of the bulk carrier echo Spitfire. The company has no outstanding bank debt. The financial liability of $16,300,000 relates to the following: 90% of the purchase price of the Eco Spitfire of $14,710,000 plus payables of $1,590,000 due to the management company and subsequently paid in January 2025. The warrant liability of $10,400,000 relates to partly to the net fair value losses on non exercise warrants at year end 2024. '6 hundred and '90 thousand dollars from the total fair value losses has been recorded to equity.

[Nina Pyndiah, Chief Financial Officer at C3is]

Concluding the presentation on Slide 13, we outlined the key variables that will assess us progress with our company's growth. Owning a high quality fleet reduces operating costs, improves safety and provides a competitive advantage in securing favorable charters. We maintain the quality of the vessels by carrying out regular inspections, both while in port and at sea and adopting a comprehensive maintenance program for each vessel. None of our vessels were built from Chinese shipyards. Hence, the proposed U.

[Nina Pyndiah, Chief Financial Officer at C3is]

S. Tariffs on all Chinese built ships would be a significant positive shift for our fleet. The company's strategy is to follow a disciplined growth with in-depth technical and condition assessment review. Management is continuously seeking a timely and selective acquisition of quality vessels with current focus on short to medium term charters and spot voyagers. We always charter to high quality charters such as commodity traders, industrial companies and oil producers and refineries.

[Nina Pyndiah, Chief Financial Officer at C3is]

The company maintains an adequate level of cash flow and liquidity that will enable us to act instantly as the windows of growth and opportunities open. Despite being in operation for less than two years and having increased our fleet by 234% since inception, the company has no bank debts. No interest were charged by the affiliated sellers for the subsequent 90% payments due on the Afropol two and the Echo Spitfire. At this stage, our CEO, Doctor. Diamantis Andriotis, will summarize the concluding remarks for the period examined.

[Diamantis Andriotis, CEO, President & Director at C3is]

For the year 2024, we reported voyage revenues of $42,300,000 an increase of 47% from 2023 net revenues of $28,000,000 an increase of 33% from 2023 and adjusted EBITDA of $16,400,000 11 percent higher than 2023. We have taken delivery of our fourth vessel this year, bringing our total fleet capacity to 213,000 deadweight, an increase of 234% from the company's inception over a year ago. We have more than tripled our fleet capacity without incurring any bank debt. Our cash balance at year end twenty twenty four was $12,600,000 after CapEx payments of $41,000,000 during the year. Shipping is currently navigating a transitional phase with shifting dynamics influenced by geopolitical factors, environmental regulations, demand patterns and weather related challenges.

[Diamantis Andriotis, CEO, President & Director at C3is]

While navigating these most volatile waters, we are closely monitoring the evolving situations and are focused on identifying those components that would maximize our future profits. Politics will play an important role in shipping in 2025, particularly in The U. S. The Trump administration is likely to push an agenda aligned with drill baby drill. This combined with the threat of tariffs on all Chinese built vessels of which we have none, are two important factors that if they materialize could have a significant profitability of our company.

[Diamantis Andriotis, CEO, President & Director at C3is]

With a clear focus on emerging opportunities, we remain confident that 2025 will be a year that will produce strong financial performance and potential growth prospects. We would like to thank you for joining us today and look forward to having you with us again at our next call for our first quarter of twenty twenty five results.

[Operator]

This concludes today's conference call. Thank you all for participating. Lines. Thank you.

Participants

Executives

• Diamantis Andriotis, CEO, President & Director
• Nina Pyndiah, Chief Financial Officer