StealthGas Q2 Earnings Call Highlights

Key Points

• StealthGas remained profitable in Q2, reporting net income of $17.3 million, or $0.46 per share, despite revenue falling to about $42.8 million from $47 million a year earlier due to a smaller fleet and vessel idle time.
• The company strengthened its financial position, with liquidity exceeding $250 million after vessel sales, operating cash flow and a $77 million insurance settlement. StealthGas remained debt-free and plans to prioritize fleet renewal and capital deployment.
• Geopolitical disruptions reshaped LPG trade flows and supported freight rates, particularly for Handysize and medium gas carriers. Management expects profitability to remain elevated in the second half of 2026 while increasing time-charter coverage and positioning most of the fleet west of Suez.

StealthGas NASDAQ: GASS reported second-quarter net income of $17.3 million, or $0.46 per share, as the liquefied petroleum gas shipping company maintained profitability despite lower revenue than a year earlier and a smaller operating fleet.

Chief Executive Officer Harry Vafias said quarterly revenue totaled $42.8 million, roughly in line with the first quarter but below the $47 million reported in the prior-year period. He said the market was relatively stable for smaller vessels during the quarter and strengthened for larger ships.

The company reported first-half earnings per share of $0.89. Vafias said StealthGas has continued to focus on increasing revenue visibility through time-charter coverage while reducing exposure to the spot market.

Charter Coverage and Fleet Strategy

As of September, StealthGas had secured approximately $90 million in future revenue through 2029, with 45% of fleet calendar days covered by time charters on a one-year-forward basis. The company had secured about $50 million of revenue for the remainder of 2026, representing 60% of fleet days, and about $30 million for 2027.

Vafias said the company completed four new period charters lasting at least three months, including one two-year contract, one one-year contract and two six-month extensions. Four vessels remained in the spot market, including two Handysize vessels.

“As we enter the winter months, we expect to find more opportunities to secure more time charters,” Vafias said.

He added that long-term charter commitments have been more difficult to secure because charterers have been hesitant to lock in historically high day rates amid geopolitical uncertainty.

The company continued to sell older and smaller vessels as part of its fleet-renewal strategy. Since the beginning of 2023, StealthGas has sold 13 vessels, excluding joint-venture vessels, for approximately $170 million. Its fleet has declined from about 40 vessels at the start of 2023 to 25 vessels following the latest exits, including the Eco Wizard and Eco Royalty.

The company completed four of five scheduled dry dockings during the first half, with one remaining for the rest of the year.

Financial Results and Balance Sheet

Konstantinos Sistovaris, StealthGas’ head of investor relations, said second-quarter revenue was $42.9 million, compared with $47 million a year earlier. The decline reflected the smaller fleet and increased idle time for three smaller vessels operating in the spot market, he said.

• Voyage expenses rose to $7.2 million, driven primarily by higher bunker costs and additional insurance premiums associated with the Persian Gulf.
• Time-charter-equivalent rates were $15,710 per vessel per day.
• Operating expenses were $12.8 million, or approximately $5,310 per vessel per day.
• The company recorded a $1.3 million gain from vessel sale-and-purchase activity.
• Financial gains increased by $1 million from the prior-year period as interest costs declined and interest income rose.

Net income was down 15% from $20.4 million in the second quarter of 2025. Sistovaris said the company’s profit margin was 40%, meaning it converted $0.40 of every revenue dollar into profit.

StealthGas reported liquidity, consisting of cash and short-term investments, of $168.3 million as of June 30, up 70% from $99 million at the start of the year. The increase was supported by sales of two smaller vessels and a $40 million improvement in operating cash flow.

Vafias said liquidity had subsequently exceeded $250 million, supported by operational cash flow and more than $77 million received following the resolution of the Eco Wizard insurance case.

The company had no outstanding debt as of June 30, while total liabilities were $28 million, primarily consisting of operational trade payables and deferred charter income. StealthGas repaid more than $350 million of debt over the past several years and became debt-free in July 2025, according to Sistovaris.

StealthGas has also spent approximately $21 million on share repurchases since 2023, although Vafias said it did not repurchase shares in the second quarter because the stock price had appreciated.

Geopolitical Disruptions Shape LPG Shipping Market

Chairman Michael Jolliffe said the conflict involving Iran and the closure of the Strait of Hormuz had reshaped LPG trade flows. He said global LPG exports fell 8% in the first half of 2026, but greater ton-mile demand helped support freight rates as more cargoes were sourced from the United States.

U.S. LPG exports reached a record 2.9 million barrels per day in May, while U.S. propane exports rose 9% during the second quarter, according to data cited by Jolliffe. He said vessels that had previously operated in the Middle East had repositioned toward the U.S. and were often returning to Asia via the Cape of Good Hope, adding approximately 45 days to voyages.

StealthGas has positioned about two-thirds of its fleet west of Suez, particularly in Europe and the Mediterranean, where Vafias said rates can be approximately 30% higher than in the East and the spot market is more active. The company relocated one smaller vessel from the Far East to Northwest Europe during the summer after it faced increased off-hire time.

The company has one vessel remaining east of Suez. Vafias said a larger vessel that had been stranded in the Persian Gulf earlier in the summer exited the Strait of Hormuz during a lull in hostilities, though conditions in the passage subsequently became dangerous again.

Jolliffe said Asian demand had weakened amid the conflict and higher propane prices. India’s LPG demand fell 20%, while China’s imports declined 29% in the second quarter, he said. However, he noted that supply-chain disruptions could lead importers to diversify sourcing, including potential increased U.S. LPG purchases by India.

Outlook

Jolliffe said Handysize spot rates strengthened in the second quarter as disruptions in larger vessel markets filtered down into smaller segments. Medium gas carrier spot rates also rose sharply as higher U.S. loadings increased demand for transatlantic voyages.

He said the Handysize order book remained near 10% of the fleet over the next several years, while approximately one-third of the existing fleet is more than 20 years old. The medium gas carrier order book stands at about 40% of the current fleet, however, which could pressure rates if demand does not keep pace.

With no debt and more than $250 million of current liquidity, management said its attention has turned to deploying capital, with fleet renewal identified as its intended investment focus. Jolliffe said the company expects profitability to remain elevated in the second half of 2026.

About StealthGas (NASDAQ:GASS)

StealthGas Inc is an international shipping company specializing in the seaborne transportation of liquefied petroleum gases (LPG), including propane, butane and ammonia. The company operates a fleet of modern pressurized LPG carriers with capacities ranging from approximately 2,500 to 9,100 cubic meters, providing safe and efficient carriage of petrochemical gases worldwide.

Founded in 2005 and incorporated in the Republic of the Marshall Islands, StealthGas is headquartered in Athens, Greece, with additional commercial and operational offices in major shipping centers across Europe and Asia.

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