Ladies and gentlemen, thank you for standing by. And welcome to the StealthGas Second Quarter 2020 Conference Call. At this time, all participants will be on a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today, Friday, the 21s of August 2020. I would now like to hand the conference over to your speaker today, Harry N. Vafias, President and CEO. Thank you. Please go ahead.

Good morning, everyone, and welcome to our second quarter six months 2020 earnings conference call. This is Harry Vafias, the CEO of StealthGas; and along with us is our Finance Officer, Mrs. Sakellaris. And before we commence our presentation, I would like to remind you that we'll be discussing forward-looking statements, which reflect current views with respect to future events and financial performance. At this stage, if you could take all a moment to read our disclaimer on slide number 2 of this presentation. Risks are further disclosed in StealthGas' filing with the Securities and Exchange Commission. I would also like to point out that all our amounts quoted unless otherwise clarified are implicitly stated in U.S. dollars. Slide 3, summarizes the key highlights of our second quarter 2020 results that we released today. In spite of a very difficult and uncertain market due to the COVID-19 dynamic, StealthGas has had an exceptionally good quarter in terms of both revenue and profitability. The key to this success is that we have leveraged upon the strong market prevailing prior to the pandemic outbreak and had secured almost all of our vessels on period charters, thus avoiding the spot market downturn we saw in the second quarter particularly in Europe. Indeed our spot exposure committing almost 10% of our voyage days in the spot market was very low. And as all of our spot vessels were trading in Asia, we managed to keep them employed thus avoiding long periods of downtime. Our operational utilization was as high as 97%. Strong revenue generation along with stable operating costs and very low finance costs were the cornerstones of our second quarter's performance success. Going forward, we have about 71% of our fleet days secured on period charters for the remainder of 2020 with total…

Thank you, Harry, and good morning to everyone. I will continue the presentation focusing on our financial performance for the second quarter of 2020. Indeed the quarter was outstanding given the difficult market situation we're in, due to the COVID-19 pandemic. Amidst these unexpected market conditions, StealthGas leveraged upon its strong fleet deployment its stable OpEx base and its low debt exposure to produce such good and promising results. This is actually a proof of all we have been arguing this past quarter’s that we follow a sound strategy that can demonstrate profitability given the correct circumstances. Indeed, the circumstances in the second quarter of 2020 were right for our company meaning that since the beginning of the quarter we had secured 86% fleet coverage thus protecting us from all the market turmoil that took place plus we had no spot exposure in Europe. Let us move on to slide 8, when we see the income statement for the second quarter of 2020 against the same period of the previous year. Voyage revenues came in at $36.3 million, marking a $0.2 million increase compared to the same period of last year. This increase is attributed to a noticeable rise of our time charter revenue stemming from all of our vessel types namely small LPGs 22,000 cubic meter semi-ref tankers, along with limited exposure in the spot market, which was weak, due to the COVID-19 pandemic. Voyage costs amounted to $2.1 million, marking a 50% decrease compared to Q2 2019 due to spot days reduction by 48%. It's noted that, the sharp decline in fuel price from March onwards also assisted to our voyage cost reduction. Based on all of the above, our net revenues for the period were $34.1 million corresponding to a net revenue margin of 94%. Running costs…

Proceeding on slide 11. This unprecedented times, we are going through make it very difficult to assess our markets for the future. A strong element of uncertainty prevails across the broader LPG space as is the case for global shipping nowadays. The COVID-19 pandemic and lockdowns that took place in the second quarter of 2020 have had a sharp impact in all sectors of the economy. Focusing on LPG demand and supply across geographical regions we witnessed a dramatic decline of LPG demand in Europe and therefore the majority of the refiners in the area scaled back production. Looking at Asia, refinery ramps dropped as well particularly in the northeast of Asia. However, LPG imports held up fairly well. As to the residential demand for LPG, the COVID-19 pandemic has had a mix impact. As demand in China scaled back, while LPG consumption in India marked a considerable rise. In the United States although LPG production has dropped from 2019 levels volume are increasing lately marking since May 2020 a rise of about 12% while exports are showing an upward trend too. Moving to slide 12. We see that during Q2 2020 and due to the COVID-19 pandemic outbreak rates for small LPGs declined mostly driven by the sharp deterioration of the European LPG market. Demand for larger ships i.e. 7500 cubic meters remained relatively steady and therefore rate decline for this segment was negligible. West of Suez the market was heavily affected by the COVID-19 situation. By mid-April, the list of open ships in Europe reached historical heights and for owners with significant spot and/or COA exposure it was not a matter of lowering their freight rates in order to secure employment for their ships, there simply were not enough cargoes. This came about as an outcome of extensive…

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] And our first question comes from the line of Randy Giveans from Jefferies. Your line is now open. Please ask your question. Thank you.

Howdy, team StealthGas. How are you doing?

Hi, Randy. Hope you're well.

Yeah. All good here. Obviously, congrats on a very strong quarter here far exceeding our expectations for earnings. So with that, should we expect the kind of cost savings we've seen in the second quarter to continue? Or do you expect a lot of them to return closer to the 1Q numbers looking at vessel OpEx, looking at G&A, interest expense? And then on the revenue side, do you expect similar utilization on rates in the third quarter relative to the second quarter?

To be honest Randy, it depends how many ships we're going to try and fix on period, if we are successful to doing so, because as you can understand OpEx and cost has a lot to do with -- if the ship is trading spot or not. I would feel confident to say that it would be in between of Q1 and Q2 if you want my opinion.

Okay. And then on the interest expense side, is that a fair run rate? Or are you looking at swapping any floating instruments? Or how do you look at the interest expense from the year? Obviously it hasn't had a...

No, we are not worried. We are not worried we're going to see a rapid increase of the LIBOR rates. Therefore, we are staying put for now.

Got it. Okay. And then in the release, you stated you acquired the two vessels from an affiliate. Can you give a little more info on that the ages? Are they on spot on contract some of the other terms around their pricing?

Yes. I think it's in there. They're both brand new. One was delivered in June and one is delivering in September. It's under construction as we speak. Both are Japanese-built ships. The first one has a short time charter on it. The second one is not fixed, because she hasn't been delivered yet. She's delivering end of September.

And the cost of those two vessels per vessel?

I think it's -- I think it's not in -- it's not disclosed Randy.

Okay. Can you give us the total cost for both?

I will have to consult my people before doing that.

Okay. All right. And then just the last question. Obviously the share price right it's under $3 even after today's pretty good move here. Is there any other tender offer in the near term or maybe continued open market purchases? And then also why purchase two vessels at NAV when you can buy your shares at a 50% discount to NAV? And then in the press release, you state that the share price is according -- an unfair reflection of StealthGas' dynamics. So can you possibly...

You know the answer to that Randy. We've been buying stock nonstop as you know over the last three years, both in the open market and through our tender offer a few months ago. But StealthGas' strength is its fleet. If you remember, we sold 13 ships, one was two years ago. So I think buying two brand-new ships to partly replace those older ships that were sold off is not such a big expansion, especially when we think now is a good time to buy quality assets and wait hopefully for a better market when and if the pandemic is taken care of.

Got it. And does this kind of substitute for share repurchases? Or is this a complement to that in terms of use of cash going forward?

I think we're going to have more authority to buy more shares when we have a better view of the control of the pandemic. If we see that the vaccine is out and people start doing it and the cases go down maybe that will give confidence to the Board to reauthorize us to buy more shares. I don't think we're going to have any authority before we have more clarity on that.

All right. That’s it from me. Thanks, again.

Thank you.

Thank you. [Operator Instructions] Thank you. There are no further questions at this time, sir. Please continue.

We'd like to thank you very much for joining us at our conference call today and for your interest and trust in our company and we look forward to having you with us again at our next call for our third quarter 2020 results in November. Thank you.

Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.