Good day, and thank you for standing by. Welcome to the StealthGas Inc. First Quarter 2021 Financial and Operating Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your speaker today, Mr. Michael Jolliffe, the Board Chairman of StealthGas. Please go ahead.

Thank you, and good morning, everyone, and welcome to our First Quarter 2021 Earnings Conference Call and Webcast. I'm Michael Jolliffe, the Board Chairman of StealthGas. And with me on our call today is Harry Vafias, the CEO of StealthGas; along with our Finance Officer, Fenia Sakellaris. 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 United States dollars. Slide 3 summarizes the key highlights of our first quarter 2021 results that we released today. Although, we concluded a fair amount of new period charters, these slightly improved market conditions were not reflected in our revenues and profitability. Our performance remained quite similar to the fourth quarter of 2020 as we still chartered a high number of our vessels in the spot market, thereby facing high voyage and off-hire costs. Indeed, in this first quarter, our spot days were equivalent to the full operation of 13 vessels in the spot market. The increase in bunker costs, along with the fact that we operated 2 of our product tankers throughout this quarter in the spot market, led to a sharp rise of our voyage costs, thus suppressing our spot earnings capacity even further. We do look at autumn with cautious optimism. As the global vaccination process accelerates, this gives us hope for a more substantial market recovery. In addition to this, our market fundamentals remained strong with a low…

Thank you, Mr. Jolliffe, and good morning to everyone. I will continue the presentation focusing on our financial performance for the first quarter of 2021. As mentioned earlier in our call, in this first quarter of the year, our spot activity remained high, thus undermining both our revenue and profitability potential. Let us move on to Slide 7, where we see the income statement for the first quarter of 2021 against the same period of the previous year. Voyage revenues came in at $37.4 million, marking a $3 million increase compared to the same period of last year. This increase is attributed to 7 fewer vessels on bareboat, now operating as export or on a time charter contract. Voyage costs amounted to $7 million, marking a $4.1 million increase compared to Q1 '20, as our spot vessels more than doubled. Our intense productivity brought upon a sharp rising cost, particularly for bankers, which increased by 50% compared to the previous quarter when we had same number of spot days. This increase is primarily due to the fact that this quarter, we had 2 of our product tankers operating primarily in the spot market, yielding high cost and poor time charter equivalents due to the soft tanker market. Based on all of the above, our net revenues for the period were $30.5 million. Running costs at $15.1 million marked about 14% increase compared to Q1 '20, mostly attributed to 7 fewer vessels on bareboat for which now we incur operating costs along with $150 rise in our daily crew costs attributed to the COVID-19 pandemic. As already discussed in our previous calls, the COVID-19 pandemic has increased our quarterly group costs by about $500,000 per quarter. Based on all of these, our EBITDA is in order of $13.4 million. Interest and…

Let's proceed with Slide 10. During Q1 '21, market sentiment slightly firmed, mostly due to the increase in demand from India and China. Going forward, the LPG demand in Asia, subject, of course, to COVID-19 remission, is expected to increase further, driven by the petrochemical and retail sector. In China, we witnessed 2 new PDH plants that came online in 2020, 1 more since the beginning of '21 and 4 additional PDH plants are scheduled to commence operations at the end of 2022. As these plants heavily rely in imported propane, this is positive for LPG trade. Focusing on retail demand, this is expected to increase as a result of the growth in population in the Asian region, along with investments in industrialization and urbanization that take place in the area. Another factor that heavily affects the LPG market is the price of oil. It should be noted that the further recovery in the oil market will make LPG more competitive relative to naphta, hence LPG demand for industrial use will increase. Indeed, the price of oil has risen about 70% since October 2020 as prices increased due to higher demand. On Slide 11, we see that during Q1 '21, rates for small LPGs marked a slight increase compared to the previous quarter, but still remain much lower than pre-pandemic level. Looking at the small LPG trade West of Suez, the effects of COVID-19 were still visible in the market, but we saw signs of improvement, particularly from mid-January onwards, which materialized more fully towards the end of the quarter. Number of cargoes increased, thus beginning to reduce a significant number of idle ships. We, therefore, witnessed an increase in rates, although we are still far away from a balanced market. We expect that as Europe slowly emerges from the…

Our performance in the first quarter of 2021 was still governed by the COVID-19 pandemic. Although, demand for small LPG carriers slightly strengthened and rates seem to have gained a positive momentum, these effects began to materialize towards the end of the quarter, thus were not reflected in our results for quarter 1, 2021. Due to market conditions, our presence in the spot market remained high. And compared to the last quarter of the year, what most -- mostly undermined our spot profitability was the operation of 2 of our product tankers in the spot market with the whole duration of the quarter, thus incurring high voyage costs against poor freight compensation. What we find important amidst these market conditions is that we have designed our fleet employment so as to grasp the positive market turn expected with the remission of the COVID-19 pandemic. We have 16 vessels concluding their period employment up until the end of 2021. And along with our ships currently in the spot market, it gives us the opportunity to recharter 16% of our fleet at a time when hopefully the market is expected to improve. 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] And your first question comes from the line of Randy Giveans from Jefferies.

A few questions for me. You stated in the release there was some positive momentum materializing towards the end of the first quarter. As such, how much stronger are you expecting rates and maybe utilization to be here in the second quarter? And what is utilization currently?

Listen, Randy, in this environment, with COVID still raging in certain countries like India, vaccination percentage is still very low. Huge increases on crude change expenditure. And the big hit we got previously from the biggest bankruptcy, makes us very, very cautious. And I don't believe that Q2 will be in any way better than Q1. As you show from our commentary, we expect that we're going to see some improvement after the summer. So if I was you, I would continue to calculate the financials and making your analysis basis that Q2 is not very dissimilar from Q1.

Okay. Fair. And then I guess, the consolidation that continues to take place throughout the LPG sector. Are you open at this time to either selling further vessels or purchasing vessels or maybe even switching vessels, right, changing out some of your handy sized LPG carriers for additional small LPG carriers? Obviously, you recently sold the Gaschem Hamburg for a profit. So additional vessel sales likely here?

Again, Randy, you know how we think. If we can make a nice profit or a clever move, we're going to make it, if it's not in our traditional fleet. We, as you know, have -- we own ships in StealthGas in 4 different segments, the pressurized LPG, semi-ref LPGs, fully-ref LPGs, product tankers and Aframax, so that's actually 5 segments. So indeed, we are open for anything that will add shareholder value. And the Gaschem Hamburg sale, which is a ship that we bought last year, we managed to make a profit out of the ship and sell it for $7 million profit in less than 12 months. So I consider that, in this environment, quite a successful asset play.

Okay. And then you mentioned shareholder value there. Any updates on additional tender offer share repurchases going forward?

I don't think we have the financial strength at this moment to do big things like we did previously with the share buybacks and the tender offer. Unfortunately, the COVID pandemic has lasted longer than we expected last year. Of course, our Board is always eager and ready when we see better times, better rates and obviously more cash on our balance sheet because don't forget that $40 million is in the JV structures and not in the StealthGas ships -- and of course, the StealthGas share price being as low as it is now, of course, to rediscuss and reapprove further share repurchases as we have done a lot of them in the last 3 to 4 years.

All right. That makes sense. And then I guess, lastly, there was a report out this morning saying that massive levels of LPG scrapping may be needed in the coming months. I guess 2 questions. What are your thoughts on this? And why hasn't there been much scrapping in recent quarters?

I think that refers, Randy, on the larger ships. It wasn't a reference on the smaller ships because smaller ships -- yes. Again, I think the article mostly referred on the VLGC side, where you have a lot of new buildings and a quite a modern fleet. This is the exact opposite of the pressurized market, where you have a relatively small order book and a huge percentage of overaged ships. I think it has happened. I mean 4 ships being scrapped in the pressurized segment is a number that we haven't seen for many years previously. Don't forget that the scrap prices currently are very high, which -- and uses people to sell for scrap. But of course, don't forget that it's all the matter of expectations. If people have a debt-free 25-year-old ship and expect the market to be good in Q3 or Q4, maybe they want to hold on to it. If their expectations don't materialize, then obviously, then she is a scrap candidate. But I think this year will be a clear sign of what people believe because we hope it will be the end of COVID-19 pandemic. And also we'll see what the rates will do towards the end of the year. Will they go up? Or will stay same at low levels? We are one of the few segments of shipping that has not had a good run-up in the last few years like the other segments have had. I mean containers and dry are doing really well. Tankers are doing really badly, but had the boom year last year. So I think sooner or later, our turn should come. We don't know when that's going to be, but let's hope it's in the end of Q3 or Q4 this year.

There are no further questions. [Operator Instructions]

I think there are no other questions. So we'd like to thank you for joining us at our conference call today and for your interest and trust in our company. I look forward to having you again for our second quarter results in August 21. Thank you very much.

This concludes today's conference call. Thank you for participating. You may all disconnect.