IMPERIAL PETROLEUM INC. (NASDAQ: IMPP, the “Company”), a ship- owning company providing petroleum products, crude oil and dry bulk seaborne transportation services, announced its unaudited financial and operating results for the second quarter and six months ended June 30, 2023.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
· Fleet operational utilization of 75.4% in Q2 23’ with 28 days of technical off hire and 129 days of vessel repositioning.
· 68.5% of fleet calendar days equivalent to 734 days in Q2 23’ were dedicated to spot activity.
· Revenues of $59.0 million in Q2 23’ – up $47.7 million or 422.1% from Q2 22’.
· Net income of $16.8 million in Q2 23’ up by $16.7 million compared to Q2 22’.
· Adjusted Net income 1 of $26.6 million in Q2 23’ up by $26.5 million compared to Q2 22’ or 26,500%.
· Adjusted EBITDA1 of $30.8 million in Q2 23’ up by $27.8 million or 926.7% from Q2 22’.
· Cash and cash equivalents including time deposits of $98.6 million as of June 30, 2023 – a strong cash balance in spite of utilizing within Q2 23’ an amount of $45.9 million for the repayment of all outstanding loans.
· As of June 30, 2023 Imperial Petroleum has zero debt on its balance sheet.
· In the 1H 23’ the Company generated a Net Income of $52.6 million corresponding to a basic EPS of $3.17.
· In the 1H 23’ the Company generated an Adjusted Net Income of $62.6 million corresponding to an Adjusted basic EPS1 of $3.79.
· Spin off of two of our four Handysize drybulk carriers to a separate listed entity called C3is Inc. on June 21, 2023.
· Imperial Petroleum retains an interest in C3is Inc. through ownership of 600,000 Series A Convertible Preferred Shares of C3is Inc.
· In July 2023, the Company sold its Aframax tanker to C3is Inc. for a consideration of $43 million.
Six Months 2023 Results
§ Revenues for the six months ended June 30, 2023 amounted to $124.5 million, an increase of $108.0 million, or 654.5%, compared to revenues of $16.5 million for the six months ended June 30, 2022, primarily due to the increase in the average number of our vessels and improved market conditions resulting in higher rates particularly in the spot tanker market.
1 EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are non-GAAP measures. Refer to the reconciliation of these measures to the most directly comparable financial measure in accordance with GAAP set forth later in this release.
§ Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2023 were $36.1 million and $13.9 million, respectively, compared to $4.9 million and $5.1 million, respectively, for the six months ended June 30, 2022. The $31.2 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 1,009 days (458.6%). The $8.8 million increase in vessels’ operating expenses was primarily due to the increase in the average number of vessels in our fleet by approximately six vessels.
§ Drydocking costs for the six months ended June 30, 2023 and 2022 were $1.3 million and nil, respectively. This increase is due to the fact that during the six months ended June 30, 2023 two of our Handysize drybulk carriers underwent drydocking.
§ General and administrative costs for the six months ended June 30, 2023 and 2022 were $2.5 million and $0.5 million, respectively. This rise is mainly attributed to $1.1 million of stock-based compensation expense along with a rise in reporting costs related to our spin off project.
§ Depreciation for the six months ended June 30, 2023 was $8.7 million, a $3.8 million increase from $4.9 million for the same period of last year, due to the increase in the average number of our vessels.
§ Interest and finance costs for the six months ended June 30, 2023 and 2022 were $1.8 million and $0.5 million, respectively. The $1.8 million of costs for the six months ended June 30, 2023 relate mainly to $1.3 million of interest charges incurred up to the full repayment of all outstanding loans concluded in April 2023 along with the full amortization of $0.5 million of loan related charges following the repayment of the Company’s outstanding debt.
§ Interest income for the six months ended June 30, 2023 and 2022 was $2.1 million and $0.04 million, respectively. The increase is attributed to our time deposits during the period at favourable time deposit rates.
§ Impairment loss for the six months period ended June 30, 2023 stood at $9.0 million, and related to the spin-off of two of four drybulk carriers to C3is Inc. The decline of drybulk vessels’ fair values compared to one year ago when these vessels were acquired resulted in the incurrence of impairment loss.
§ As a result of the above, the Company reported net income for the six months ended June 30, 2023 of $52.6 million, compared to a net income of $0.3 million for the six months ended June 30, 2022. The weighted average number of shares outstanding, basic, for the six months ended June 30, 2023 was 15.9 million. Earnings per share, basic and diluted, for the six months ended June 30, 2023 amounted to $3.17 and $2.78, respectively compared to a loss per share, basic and diluted, of $0.81 and $0.81 for the six months ended June 30, 2022.
§ Adjusted Net Income was $62.6 million corresponding to an Adjusted EPS, basic of $3.79 for the six months ended June 30, 2023 compared to adjusted net income of $0.3 million, or $0.81 loss per share, basic, for the same period of last year.
§ EBITDA for the six months ended June 30, 2023 amounted to $60.9 million while Adjusted EBITDA for the six months ended June 30, 2023 amounted to $71.0 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
§ An average of 10.9 vessels were owned by the Company during the six months ended June 30, 2023 compared to 5.0 vessels for the same period of 2022.
§ As of June 30, 2023, cash and cash equivalents including time deposits amounted to $98.6 million and total debt amounted to nil. During the six months ended June 30, 2023 debt repayments amounted to $70.4 million.
CEO Harry Vafias Commented:
Within the first six months of 2023 our company managed to generate an adjusted net income of $62.6 million corresponding to a Basic Earnings Per Share of $3.79 which is well above our current share price. Compared to the first six months of 2022 our increase in net income was in the order of 20,500%. Our strong performance is unquestionable but so is the fact that we are significantly undervalued. We have a fleet valued at about $225 million, zero debt and about $100 million in cash. The outlook for the tanker market remains favourable whereas there might be opportunities in the dry bulk sector as dry ship values are dropping. We will continue to capture this favourable momentum generating strong results while growing our Company further.
