Good morning and good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's StealthGas First Quarter 2019 Results Call. [Operator Instructions] I must advise you the conference is being recorded today. I would now like to hand the conference over to your first speaker today, Michael Jolliffe, Chairman of StealthGas. Please go ahead.

Good morning, everyone, and welcome to our First Quarter 2019 Earnings Conference Call and Webcast. This is Michael Jolliffe, the Board Chairman of StealthGas. And with me today is our CEO, Harry Vafias; and our Finance Officer, Fenia Sakellaris, who will discuss our financial performance at a later stage of our call. 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 financial performance. At this stage, if you could all take a moment to read our disclaimer on Slide 2 of this presentation. Risks are further disclosed in StealthGas filings with the Securities and Exchange Commission. I would also like to point out that all amounts quoted, unless otherwise clarified, are implicitly stated in U.S. dollars. Slide 3 summarizes the key highlights of the first quarter of the year that we released today. The first quarter of 2019 marked a very positive start for StealthGas. In spite of our strategic fleet contraction, high voyage revenues driven by our remarkable fleet operational utilization of close to 99% allowed us to enjoy a profitable quarter. Although market conditions, particularly the Asian spot market demonstrated moderate improvement, we were in a position to utilize our fleet efficiently, committing only 13% of our fleet days in the spot market. In addition, this quarter, we incurred moderate ballasting costs. This together with our reduced spot exposure led to a sharp increase in our voyage costs -- a decrease in our voyage costs, sorry, thus improving our fleet's time charter equivalent by about 13% compared to the same period of last year. With regards to our newly formed joint venture partnership, we proceeded with the addition of 2 more small LPG vessels from StealthGas in the same…

Thank you, Mr. Jolliffe, and good morning to everyone. I will continue the presentation focusing on our financial performance for the first quarter of 2019. The key driver of a much improved performance this first quarter of the year was indeed our chartering performance, an outcome of which was the exceptional operational utilization of close to 99%. It was not that market conditions particularly in Asia visibly improved, rather we lowered our spot exposure, at the same time, achieved minimal off hires. This along with improved rates in the time charter market compared to a year ago, allowed us to enjoy high time charter equivalent revenue and good profitability. Let us move on to Slide 7, where we see the income statement for the first quarter of '19 against the same period of the previous year. Voyage revenues came at $38.4 million, marking a $1.3 million decrease compared to the same period of last year. This reduction in revenue was expected given that we now operate 7 less vessels, including our JV vessels, thus lowering our revenue generation potential. However, looking at our voyage revenues per fleet calendar day, this came at around $9,000, which is close to 8% higher than the first quarter of '18 due to higher prevailing rates and better performance in the spot market. Voyage costs amounted to $3.8 million, marking a $1.8 million decrease compared to Q1 '18. As mentioned, this quarter, our presence in the spot market was only 500 days plus we include minimal ballasting cost, which usually burden our voyage cost. Related to individual cost categories and compared to the first quarter of '18, we saw a sharp reduction in our ballasting costs of around $1.3 million. Net revenues, that is revenues after deducting voyage costs, came at $34.6 million corresponding to…

Proceeding on Slide 11. Global LPG trade has grown on an annual basis by an average of 6% over the last decade driven largely by U.S. exports to Asian countries. Since August 2018, imposed LPG tariffs have left a sharp reduction of U.S. exports to China and have played a negative role in broader market sentiment. Indeed U.S. exports to China heavily reduced in 2018, and it's estimated that volume reduction of U.S. exports to China compared to '17 was in the order of about 45%. Both countries altered their trade pattern following the trade war. U.S. exports were redirected to other destinations like Japan, South Korea and Indonesia, while channel import were mainly sourced from the Middle East countries like the Emirates, Qatar and Kuwait. Looking at '19, Chinese trade will continue to be affected by the imposed tariffs should an agreement not be reached, in the sense that the country's demand for LPG is expected to grow at a slower pace. However, new investments in 3 PDH plants that will commence operation in China this year are expected to give a boost to the country's LPG needs. On Slide 12, we see that during Q1 '19, rates for small LPGs remain flat with the exception of the large pressurized vessels. These vessels gain momentum due to the cargo deliveries to Morocco and West Africa, where larger sized ships are preferred. Concerning the smaller pressurized vessels in the -- both in the East and the West, rates remained flat as there was a general reluctance from charters to take forward position in terms of period fixtures. In terms of trade, West of Suez, the market has come off a bit more since our last announcement, which is much in line with the usual seasonal trends. Activity both in the…

The first quarter of 2019 marked a good start for StealthGas in capturing the benefits of an improving market. Our much better results were mainly driven by our remarkable operation -- operational utilization of 98.8%, our improved performance in the spot market, and of course, we were leveraged by the higher prevailing period rates that are slowly starting to make a noticeable impact on our revenue levels and profitability. Our balance sheet stands strong with $75 million of unrestricted cash and a leverage ratio as low as 40%. Our solid capital structure, in combination with our leading market position, places us in an advantageous position. The small LPG segment has solid market fundamentals in terms of a low order book and aging fleet, factors that make it very probable that our market will improve further during quarters ahead, so we will be likely looking at some exciting times to come. With our stock trading at a large discount to our net asset value, our Board has taken the decision to initiate a share buyback program of up to $10 million. This is a means to support our stock, but also our shareholders for their commitment to StealthGas. We remain optimistic regarding the quarters ahead and hope that our good performance this quarter will be a turning point as to our profitability. We have now reached the end of our presentation, and we would like to open the floor for your questions. So operator, please open the floor. Thank you.

[Operator Instructions] Your first question today is from the line of from Randy Giveans from Jefferies.

This is Chris Robertson on for Randy. So on the last earnings call, you guys mentioned that the first quarter utilization would likely be higher than the fourth quarter utilization but not as high as maybe 3Q '18. But it looks like it's surprised to the upside, reaching 98.8%, which is the highest since the second quarter of 2008. So what caused the big beat there? And where do you expect utilization to be in the second quarter of '19?

Yes. I mean it has always a very nice surprise when we have the best utilization since 11 years ago. As discussed, we shouldn't be opening champagne bottles yet because with everything that is happening around us with the China-U.S. trade war; sanctions on Iran, Venezuela, Cuba; hostilities in the Middle East and so on, you never know what will happen 3 months later. If the exceptional performance was due to mixed factors, as you heard some of them on the script, no ballasting, more efficient utilization of the spot ships, no idle time between period fixtures and so on and so forth, the sale and delivery of 7 of our older ships and thus more efficient ships remain in the fleet that are more competitive and more appealing for the charters, all these things together, plus obviously the stronger market and the seasonally stronger period that is always Q1, all these things together led to this result, which was even ahead of our own expectations. I don't think we're going to have such a strong utilization in Q2. I would say that it would be something between Q4 performance and Q1 performance on utilization.

Okay. That's fair. So with regards to the share repurchase program that you had previously mentioned, kind of with shares trading at a big discount to NAV right now, the market appears to be strengthening faster than expected. Do you -- would you consider repurchasing all $10 million worth during Q2? Or do you have a strategy of spreading that out more over time?

Very good question, Chris. I mean we've shown in the past that not only we buy lots of our own stock when the price is good, but if you remember the last time we did a repurchase scheme, we tripled it when we saw that we have the money to do it and the share price was indeed quite low. And as you know, we don't have a huge daily share volume. So I mean if you -- even if you give us all the money in the world, it cannot be spent that fast. But obviously we have the authority to spend up to $10 million, we don't have a limit of how fast we're going to spend it. So we would start I guess from tomorrow onwards trying to buy stock in the open market. At the end of the quarter, if obviously we have spent all the money and the market continuously improve and we continue to show good results, we will go to the Board and ask maybe for that number to be increased again.

Okay. With regards to the new JV, it looks like the JV acquired 2 more vessels from StealthGas. How many vessels in total do you expect that you guys might sell to the JV this year?

Listen, the idea -- it's a bit misunderstood. The idea is not for StealthGas to be selling its own ships to its JV subsidiary, that's not the idea. The idea is for StealthGas with a partner to go and buy third-party ships. Because we don't see many secondhand modern Japanese ships for sale, that's why we started with a fleet of 4 ships coming from StealthGas, but the Board of the JV wants new additions to be from third-party owners, and therefore, I think there is going to be not many more StealthGas ships flying from the one fleet to the other.

Got it. That's clear. So looking kind of on the supply side, it looks like the small LPG sectors is actually shrinking with fewer deliveries year-to-date and some small LPG carriers have been scrapped. Do you expect this trend to continue throughout the rest of the year?

Again, it's always a matter of market conditions, as you know, Chris. I mean if suddenly we see a further 10% to 15% rate increase then I guess few people will be incentivized to sell for demolition. On the other hand, we're happy that very few people have taken the new building routes. So we're lucky that the big Korean and Chinese yards do not build those ships. So we are, let's say, "protected" from a big order of similar ships. I mean if market stays as is, with the new regulations that are coming into force very soon, yes, I would say that some of these 22-, 24-, 26-year old ships will have to go for scrap or get marginalized and trade in really, really unsophisticated areas.

[Operator Instructions] And there are no further questions at this time. So I'll hand back to the speakers.

Thank you. We would like to thank all of you for joining us at our conference today and for your interest and trust in our company. And we look forward in having you with us again at our next conference call for our second quarter results in August. Thank you very much.

Thank you. That does conclude the conference for today. Thank you for participating, and you may now disconnect.