Imperial Petroleum Inc. Reports Second Quarter And Six Months 2022 Financial And Operating Results

Rhea-AI Summary

IMPERIAL PETROLEUM INC. (NASDAQ: IMPP) announced its Q2 2022 financial results, reporting revenues of $11.3 million, a 121.6% increase compared to Q1 2022. The net income for the quarter was $0.1 million, while EBITDA stood at $3.0 million, reflecting a 15.4% growth from Q1. The company acquired two bulk carriers for $39 million, boosting its fleet from 4 to 10 vessels within six months. Cash and equivalents reached $79.1 million, and total debt was $25.5 million, emphasizing a solid balance sheet amidst operational costs from repositioning tankers.

Positive

• Revenue increased to $11.3 million, up 121.6% from Q1 2022.
• Net income of $0.1 million compared to a net loss of $0.8 million in Q2 2021.
• EBITDA rose to $3.0 million, 15.4% higher than Q1 2022.
• Acquired two handysize dry bulk carriers, enhancing fleet capacity.
• Cash and equivalents at $79.1 million, supporting financial stability.

Negative

• Net income impacted by $2.4 million in voyage and operating costs.
• Operational utilization at 82.5%, indicating inefficiencies due to vessel repositioning.

ATHENS, Greece, July 27, 2022 (GLOBE NEWSWIRE) -- IMPERIAL PETROLEUM INC. (NASDAQ: IMPP, the “Company”), a ship-owning company providing petroleum products, crude oil and dry bulk seaborne transportation services, announced today its unaudited financial and operating results for the second quarter ended June 30, 2022. In November 2021, StealthGas Inc. contributed to the Company four subsidiaries comprising a fleet of four tanker vessels. The Company was spun-off from StealthGas Inc. in December 2021. Historical comparative period reflects the results of the carve-out operations of the four subsidiaries that were contributed to the Company.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

• Strategic decision to strengthen our fleet further.
• In July 2022, we entered into an agreement with an affiliated party to acquire two handysize dry bulk carriers, the Eco Bushfire (2011 built) and the Eco Angelbay (2009 built), for a total consideration of $39 million. Both vessels are Japanese built with an aggregate capacity of 64,000 dwt.
• Fleet operational utilization of 82.5% in Q2 22’ – mainly due to the repositioning of our two suezmax tankers for a total of 56 days.
• Revenues of $11.3 million in Q2 22’ up by $6.2 million or 121.6% compared to Q1 22’ due to further improvement in market rates and a higher number of vessels.
• Net income of $0.1 million – undermined by the $2.4 million voyage and operating costs we incurred for the repositioning of our two suezmaxes- benefit of which will appear in Q3 22’.
• EBITDA¹ of $3.0 million in Q2 22’- 15.4% higher than in Q1 22’ and 114.3% or $1.6 million higher than in Q2 21’.
• Cash and cash equivalents of $79.1 million as of June 30, 2022.

Second Quarter 2022 Results:

• Revenues for the three months ended June 30, 2022 amounted to $11.3 million, an increase of $7.1 million, or 169.0%, compared to revenues of $4.2 million for the three months ended June 30, 2021, primarily due to the increase of our average fleet by two vessels and the improvement in market rates.
• Voyage expenses and vessels’ operating expenses for the three months ended June 30, 2022 were $4.4 million and $3.3 million, respectively, compared to $0.6 million and $2.0 million, respectively, for the three months ended June 30, 2021. The $3.8 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 159 days (468%) and the rise in bunker prices. This quarter we incurred $1.7 million of voyage costs due to the repositioning of our two suezmax vessels for a total period of 56 days. The $1.3 million increase in vessels’ operating expenses, was primarily due to the increase in the average number of our vessels and supply costs incurred in relation to the recent acquisition of our two suezmax vessels.
• Depreciation for the three months ended June 30, 2022 and 2021 was $2.7 million and $2.2 million, respectively. The change is attributable to the increase in the average number of our vessels.
• Interest and finance costs for the three months ended June 30, 2022 and 2021 were $0.2 million and $0.001 million, respectively. The increase is attributable to the interest expense incurred relating to our loan agreement entered into in November 2021.
• As a result of the above, for the three months ended June 30, 2022, the Company reported net income of $0.1 million, compared to net loss of $0.8 million for the three months ended June 30, 2021. Dividends paid on Series A Preferred Shares amounted to $0.4 million for the three months ended June 30, 2022. The weighted average number of shares of common stock outstanding, basic, for the three months ended June 30, 2022 was 112.6 million.
• Loss per share, basic, for the three months ended June 30, 2022 amounted to $0.00. EBITDA for the three months ended June 30, 2022 amounted to $3.0 million. Reconciliations of EBITDA to Net (Loss)/Income are set forth below.
• An average of 5.96 vessels were owned by the Company during the three months ended June 30, 2022 compared to 4.00 vessels for the same period of 2021.

Six Months 2022 Results:

• Revenues for the six months ended June 30, 2022, amounted to $16.5 million, an increase of $7.3 million, or 79.3%, compared to revenues of $9.2 million for the six months ended June 30, 2021, primarily due to the increase in the average number of our vessels and the improvement in market rates.
• Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2022 were $4.9 million and $5.1 million, respectively, compared to $1.9 million and $3.7 million for the six months ended June 30, 2021. The $3.0 million increase in voyage expenses is mainly due to the increase in the spot days of our fleet by 39 days (21.5%) and the rise in daily bunker cost by $9,400. The $1.4 million increase in vessels’ operating expenses, was primarily due to the increase in the average number of our vessels.
• Depreciation for the six months ended June 30, 2022, was $4.9 million, a $0.6 million increase from $4.3 million for the same period of last year, due to the increase in the average number of our vessels.
• As a result of the above, the Company reported net income for the six months ended June 30, 2022 of $0.3 million, compared to a net loss of $1.2 million for the six months ended June 30, 2021. The weighted average number of shares outstanding for the six months ended June 30, 2022 was 65.4 million. Loss per share, basic, for the six months ended June 30, 2022 amounted to $0.01.
• EBITDA for the six months ended June 30, 2022 amounted to $5.6 million. Reconciliations of EBITDA to Net (Loss)/Income are set forth below. An average of 5.01 vessels were owned by the Company during the six months ended June 30, 2021 compared to 4.00 vessels for the same period of 2021.
• As of June 30, 2022, cash and cash equivalents amounted to $79.1 million and total debt, net of deferred finance charges, amounted to $25.5 million. During the six months ended June 30, 2022 debt repayments amounted to $2.4 million.

CEO Harry Vafias Commented
Our second quarter financial and operating results is a testimony that we are on track as per our commitment to our investors. As you may all recall, we had promised our shareholders growth and this is exactly what we are doing but at the same time keeping a very solid balance sheet. Our fleet of four vessels has grown to ten vessels within a six months’ period. We have also placed emphasis on capitalizing on market conditions; this quarter we successfully increased our revenue by $6 million compared to Q1 22’. The repositioning of our two suezmax vessels deprived us from further revenue generation but most importantly undermined our profitability by an excess of $2 million; the benefits of this decision will appear in the third quarter. We are confident that the next quarter’s profitability will emulate the revenue increase resulting from the current market conditions.

Conference Call details:

On July 27, 2022 at 11:00 am ET, the company’s management will host a conference call to discuss the results and the company’s operations and outlook.

Online Registration:

Beginning this quarter, conference call participants should pre-register using the below link to receive the dial-in numbers and a personal PIN, which are required to access the conference call.
https://register.vevent.com/register/BIc09c5d4c6e4749419ed5e0c1530e39b0

Slides and audio webcast:

There will also be a live and then archived webcast of the conference call, through the IMPERIAL PETROLEUM INC. website (www.ImperialPetro.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About IMPERIAL PETROLEUM INC.        
Imperial Petroleum Inc. is a ship-owning company providing petroleum products, crude oil and drybulk seaborne transportation services. The Company owns a total of 8 vessels; five M.R. product tankers, one Aframax oil tanker and two suezmax tankers and has entered into an agreement to acquire two handysize dry bulk carriers. Following the delivery of these dry bulk vessels, Imperial Petroleum’s fleet will count 10 vessels with a capacity of approximately 737,000 deadweight tons (dwt). Imperial Petroleum Inc.’s shares of common stock and 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock are listed on the Nasdaq Capital Market and trade under the symbols “IMPP” and “IMPPP”, respectively.

Forward-Looking Statements

Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, or impact or duration of the COVID-19 pandemic and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although IMPERIAL PETROLEUM INC. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, IMPERIAL PETROLEUM INC. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydockings, shipyard performance, changes in IMPERIAL PETROLEUM INC’s operating expenses, including bunker prices, drydocking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, the conflict in Ukraine and related sanctions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by IMPERIAL PETROLEUM INC. with the U.S. Securities and Exchange Commission.

Fleet List and Fleet Deployment        
For information on our fleet and further information:
Visit our website at www.ImperialPetro.com

Fleet Data:
The following key indicators highlight the Company’s operating performance during the periods ended June 30, 2021 and June 30, 2022.

FLEET DATA	Q2 2021	Q2 2022	6M 2021	6M 2022
Average number of vessels (1)	4.00	5.96	4.00	5.01
Period end number of owned vessels in fleet	4	8	4	8
Total calendar days for fleet (2)	364	542	724	906
Total voyage days for fleet (3)	353	539	712	903
Fleet utilization (4)	97.0%	99.4%	98.3%	99.7%
Total charter days for fleet (5)	319	346	531	683
Total spot market days for fleet (6)	34	193	181	220
Fleet operational utilization (7)	96.7%	82.5%	92.3%	89.1%

1) Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
2) Total calendar days for fleet are the total days the vessels we operated were in our possession for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys.
3) Total voyage days for fleet reflect the total days the vessels we operated were in our possession for the relevant period net of off-hire days associated with major repairs, drydockings or special or intermediate surveys.
4) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.
5) Total charter days for fleet are the number of voyage days the vessels operated on time or bareboat charters for the relevant period.
6) Total spot market charter days for fleet are the number of voyage days the vessels operated on spot market charters for the relevant period.
7) Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days excluding commercially idle days by fleet calendar days for the relevant period.

Reconciliation of EBITDA:

EBITDA represents net (loss)/income before interest and finance costs, interest income and depreciation.

EBITDA is not a recognized measurement under U.S. GAAP. Our calculation of EBITDA may not be comparable to that reported by other companies in the shipping industry or other industries.

EBITDA measurement is included herein because it is a basis, upon which our investors and we assess our financial performance. It allows us to present our performance from period to period on a comparable basis and provides investors with a means of better evaluating and understanding our operating performance.

(Expressed in United States Dollars, except number of shares)	Second Quarter Ended June 30th,		Six Months Period Ended June 30th,
	2021	2022	2021	2022
Net (loss)/income - EBITDA
Net (loss)/income	(802,449)	85,719	(1,228,724)	304,101
Plus interest and finance costs	1,450	243,901	3,376	452,915
Less interest income	--	(44,140)	(4)	(44,140)
Plus depreciation	2,168,665	2,734,165	4,337,331	4,902,831
EBITDA	1,367,666	3,019,645	3,111,979	5,615,707

Imperial Petroleum Inc.
Unaudited Consolidated Statements of Operations
(Expressed in United States Dollars, except for number of shares)
					Quarters Ended June 30,				Six Month Periods Ended June 30,
					2021		2022		2021		2022
Revenues
	Revenues				4,157,352		11,348,271		9,226,877		16,464,649
Expenses
	Voyage expenses				524,584		4,263,884		1,815,116		4,721,312
	Voyage expenses - related party				51,793		141,591		116,665		203,462
	Vessels' operating expenses				1,966,603		3,290,751		3,695,123		5,034,767
	Vessels' operating expenses - related party				27,000		22,500		42,000		37,500
	Management fees				131,495		209,815		261,545		341,625
	General and administrative expenses				85,630		412,669		176,162		527,985
	Depreciation				2,168,665		2,734,165		4,337,331		4,902,831
Total expenses					4,955,770		11,075,375		10,443,942		15,769,482
(Loss)/Income from operations					(798,418)		272,896		(1,217,065)		695,167
Other (expenses)/income
	Interest and finance costs				(1,450)		(243,901)		(3,376)		(452,915)
	Interest income				--		44,140		4		44,140
	Foreign exchange (loss)/gain				(2,581)		12,584		(8,287)		17,709
Other expenses, net					(4,031)		(187,177)		(11,659)		(391,066)
(Loss)/Net Income					(802,449)		85,719		(1,228,724)		304,101
Loss per share, Basic					(0.17)		(0.00)		(0.26)		(0.01)
Weighted average number of shares, Basic					4,775,272		112,558,217		4,775,272		65,391,339

Imperial Petroleum Inc.
Unaudited Consolidated Balance Sheets
(Expressed in United States Dollars)
					December 31,		June 30,
					2021		2022
Assets
Current assets
	Cash and cash equivalents				3,389,834		79,135,753
	Restricted cash				451,225		485,693
	Receivables from related party				355,023		375,801
	Trade and other receivables				1,400,275		3,572,656
	Other current assets				--		581,331
	Inventories				258,846		4,935,331
	Advances and prepayments				150,544		543,884
Total current assets					6,005,747		89,630,449
Non current assets
	Vessels, net				119,962,984		194,134,266
	Restricted cash				2,500,000		2,500,000
Total non current assets					122,462,984		196,634,266
Total assets					128,468,731		286,264,715
Liabilities and Stockholders' Equity
Current liabilities
	Trade accounts payable				1,430,251		5,770,455
	Payable to related party				1,119,055		394,328
	Accrued liabilities				486,674		1,093,353
	Customer deposits				368,000		368,000
	Deferred income				482,321		190,499
	Current portion of long-term debt				4,747,616		4,753,798
Total current liabilities					8,633,917		12,570,433
Non current liabilities
	Long-term debt				23,088,971		20,710,259
Total non current liabilities					23,088,971		20,710,259
Total liabilities					31,722,888		33,280,692
Commitments and contingencies
Stockholders' equity
	Capital stock				47,753		1,902,540
	Preferred stock				7,959		7,959
	Additional paid-in capital				97,161,688		251,240,980
	Accumulated deficit				(471,557)		(167,456)
Total stockholders' equity					96,745,843		252,984,023
Total liabilities and stockholders' equity					128,468,731		286,264,715

Imperial Petroleum Inc.
Unaudited Consolidated Statements of Cash Flows
(Expressed in United States Dollars
							Six Month Periods Ended June 30,
							2021		2022
Cash flows from operating activities
	Net (loss)/income for the period						(1,228,724)		304,101
Adjustments to reconcile net (loss)/income to net cash
provided by operating activities:
	Depreciation						4,337,331		4,902,831
	Amortization of deferred finance charges						--		29,470
Changes in operating assets and liabilities:
	(Increase)/decrease in
	Trade and other receivables						(803,931)		(2,172,381)
	Other current assets						173,930		(581,331)
	Inventories						457,906		(4,676,485)
	Advances and prepayments						(43,949)		(393,340)
	Increase/(decrease) in
	Trade accounts payable						--		4,288,624
	Balances with related parties						(99,682)		(745,505)
	Accrued liabilities						55,250		606,679
	Deferred income						459,188		(291,822)
Net cash provided by operating activities							3,307,319		1,270,841
Cash flows from investing activities
	Acquisition and improvement of vessels						(142,600)		(79,022,533)
Net cash used in investing activities							(142,600)		(79,022,533)
Cash flows from financing activities
	Net transfers to former Parent Company						(6,333,468)		--
	Proceeds from follow-on offerings						--		167,572,514
	Stock issuance costs						--		(10,767,943)
	Dividends paid on preferred shares						--		(870,492)
	Loan repayments						--		(2,402,000)
Net cash (used in)/provided by financing activities							(6,333,468)		153,532,079
Net (decrease)/increase in cash, cash equivalents and restricted cash							(3,168,749)		75,780,387
Cash, cash equivalents and restricted cash at beginning of year							7,616,555		6,341,059
Cash, cash equivalents and restricted cash at end of period							4,447,806		82,121,446
Cash breakdown
	Cash and cash equivalents						3,282,775		79,135,753
	Restricted cash, current						1,165,031		485,693
	Restricted cash, non current						--		2,500,000
Total cash, cash equivalents and restricted cash shown in the statements of cash flows							4,447,806		82,121,446

¹ EBITDA is a non-GAAP measure. Refer to the reconciliation of this measure to the most directly comparable financial measure in accordance with GAAP set forth later in this release.

FAQ

What were IMPP's revenues for Q2 2022?

IMPERIAL PETROLEUM reported revenues of $11.3 million for Q2 2022.

What is the net income of IMPERIAL PETROLEUM for Q2 2022?

The net income for Q2 2022 was $0.1 million.

How did IMPP's EBITDA perform in Q2 2022?

EBITDA for Q2 2022 was $3.0 million, reflecting a 15.4% increase from Q1 2022.

What was the financial impact of repositioning tankers for IMPP?

The repositioning of two suezmax tankers incurred $2.4 million in additional costs, affecting profitability.

How much cash did IMPP hold as of June 30, 2022?

As of June 30, 2022, IMPERIAL PETROLEUM had cash and cash equivalents of $79.1 million.