Imperial Petroleum Q2 Earnings Call Highlights

Key Points

• Record financial performance: Second-quarter revenue rose 140% year over year to $87.1 million, while net income increased 172% to $34.8 million, driven by stronger tanker and dry-bulk markets, fleet expansion and chartering activity.
• Fleet and balance-sheet expansion: Imperial Petroleum expects its fleet to grow from 21 to 25 vessels by year-end and reported approximately $260 million in cash, $78 million in first-half operating cash flow and no debt.
• Market outlook remains favorable but uncertain: Management cited strong tanker and dry-bulk rates, but warned that Middle East and Red Sea geopolitical disruptions, including conditions around the Strait of Hormuz, could materially affect cargo availability and freight rates.

Imperial Petroleum NASDAQ: IMPP reported record second-quarter revenue and its second-highest quarterly net income, as stronger tanker and dry-bulk markets, fleet expansion and chartering activity lifted results.

Revenue reached $87.1 million in the second quarter of 2026, up 41.2% sequentially and 140% from the year-earlier period, according to Chief Executive Officer Harry Vafias. Net income totaled $34.8 million, an increase of 172% from the second quarter of 2025, while basic earnings per share rose to $0.75 from $0.36 a year earlier.

For the first six months of 2026, net income was $62.8 million, or $1.34 per share. Vafias said the first-half profit exceeded the company’s $50 million net income for all of 2025.

Fleet growth and dry-docking activity

The company attributed the revenue increase to fleet expansion and firm market conditions for tankers and dry-bulk vessels. Interim CFO Ifigeneia Sakellari said daily fleet revenue exceeded $50,000 in the second quarter, compared with about $29,000 in the same quarter of 2025. The fleet increased by an average of 6.9 vessels between the periods.

Imperial Petroleum’s operational utilization was 73.5% in the quarter. Vafias said the lower utilization reflected a planned concentration of six dry dockings, with technical off-hire accounting for 10.7% of total fleet calendar days. The company expects to complete another seven dry dockings by the end of 2026.

The company took delivery of the dry-bulk carrier Eco Crossfire on April 3 and the Handysize bulker Outrider on Aug. 21. It also completed the sale of the 2007-built tanker Suez Enchanted in early August, generating a profit exceeding $30 million, according to Vafias.

Imperial Petroleum currently operates 21 vessels and expects delivery of three additional Handysize bulkers and one product tanker by year-end, which would bring the fleet to 25 vessels.

• About 57% of the fleet was under time-charter employment.
• Five product tankers and one Suezmax tanker were operating in the spot market.
• Two product tankers were employed on short- to medium-term time charters.

Costs, cash flow and balance sheet

Voyage costs rose to $22.1 million, up $14.4 million from the second quarter of 2025. Sakellari attributed the increase to a 58% rise in spot-market days, higher bunker prices and increased ballasting activity related to vessels undergoing dry dockings.

Average Brent crude oil prices were approximately $97 per barrel in the second quarter of 2026, compared with about $67 per barrel in the year-earlier quarter, she said. Vessel running costs rose to $14.4 million, reflecting the larger fleet, while dry-docking costs totaled about $7.5 million.

Net revenue for the quarter was approximately $65 million, up 154% year over year. EBITDA reached $41.2 million.

As of June 30, the company had $245 million in free cash, including time deposits. Management said cash had subsequently increased to approximately $260 million. Imperial Petroleum generated $78 million of operating cash flow during the first half and remained debt-free, according to Sakellari.

Average time-charter-equivalent revenue in the second quarter was nearly $71,500 per day for tankers and about $15,100 per day for dry-bulk vessels. Management estimated cash-flow break-even levels of $8,500 per day for tankers and $6,500 per day for dry-bulk ships.

Market conditions and outlook

Management said geopolitical developments in the Middle East and Red Sea continued to affect shipping routes, cargo flows and freight rates. Product tanker rates were about $31,000 per day at the end of the second quarter, while Suezmax rates exceeded $145,000 per day, Sakellari said.

Vafias said Suezmax rates had at times exceeded $200,000 per day following changes in trading patterns, including higher U.S. crude exports and disruptions affecting Middle East shipping. He said the longer-term outlook for tanker markets depends substantially on conditions in the Strait of Hormuz, with a prolonged closure potentially reducing cargo availability and pressuring rates.

In dry bulk, the Baltic Dry Index averaged close to 2,750 during the second quarter, its strongest quarterly level since the fourth quarter of 2021, according to Vafias. Management cited longer voyages, rising Chinese imports of iron ore and bauxite, stronger coal demand and increased Brazilian soybean exports as supports for the sector.

Imperial Petroleum has one dry-bulk vessel stranded in the Strait of Hormuz since May 26, Vafias said. The company said it expects geopolitical uncertainty to remain a key factor for both tanker and dry-bulk markets, but management believes its liquidity, debt-free capital structure and expanded fleet position it to navigate changing conditions.

About Imperial Petroleum (NASDAQ:IMPP)

Imperial Petroleum Inc provides international seaborne transportation services to oil producers, refineries, and commodities traders. It carries refined petroleum products, such as gasoline, diesel, fuel oil, and jet fuel, as well as edible oils and chemicals, crude oils, iron ore, coal and grains, and minor bulks, such as bauxite, phosphate, and fertilizers. As of April 1, 2024, the company owned and operated a fleet of six medium range refined petroleum product tankers; one Aframax tanker; two suezmax tankers; and two handysize drybulk carriers with a total capacity of 791,000 deadweight tons.

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