C3is Inc.
Q1 2024 Earnings Call Transcript
Published:
- Diamantis Andriotis:
- Good morning, everyone, and welcome to our C3is First Quarter Earnings Conference Call and Webcast. This is Diamantis Andriotis, CEO of the company. Joining me on the call today is our CFO, Nina Pyndiah. 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 and are based on current expectations and assumptions, which by nature are inherently uncertain and outside of company's control. At this stage, if you could all take a moment to read our disclaimer on Slide 2 of this presentation. I would also like to point out that all amounts quoted, unless otherwise clarified, are implicitly stated in U.S. Dollars. Today, we released our earnings results for the first quarter of 2024. So, let's proceed to discuss these results and update you on the company's strategy and the market in general. Please turn to Slide 3, where we summarize and highlight the company's performance, starting with our financial highlights. We had a great start for 2024 with an EBITDA of $5.7 million compared to $1.4 million for Q1 2023, mainly due to the contribution from the Aframax tanker that joined the fleet in Q3 2023. Our net income was $3.8 million compared to $0.8 million for Q1 2023, an increase of 475%. Our vessel's net value was $73.8 million at the end of March 2024, compared to $75.2 million at December 31, 2024. In Q2 2024, the vessel's value will increase by approximately $16.2 million after the delivery of the bulk carrier that the company recently acquired. Our net cash balance was $34.9 million at the end of March 2024 compared to $9 million at the end of December 2023. This was a combination of three major items
- Nina Pyndiah:
- Thank you, Diamantis, and good morning to everyone. Please turn to Slide 12, and I will go through our financial performance for the first quarter of 2024. Voyage revenues for the three months ending March 31, 2024, amounted to $12.8 million corresponding to a daily TCE of $36,480. Compared to Q1 2023, our net revenues increased by 247% and our TCE more than doubled, mainly due to the contribution from our Aframax tanker. Our fleet operational utilization was 93.4% for the first quarter of 2024 compared to 90.6% for the first quarter of ‘23. Voyage expenses and vessels operating expenses for the three months ended March 31, 2024, were $2.8 million and $1.8 million, respectively. For the first quarter of ‘23, the figures were $285,000 and $1 million. The increases in both voyage expenses and vessels operating expenses are attributed to the increase in the average number of vessels due to the addition of the Aframax tanker to the initial fleet. Voyage expenses for the first quarter of ’24, mainly included bunker cost of $1.8 million corresponding to 64% of total voyage expenses. Operating expenses for the three months ending March 31, ‘24 mainly included crew expenses of $900,000 corresponding to 50% of total operating expenses. Spares and consumable cost of $400,000, corresponding to 22% and maintenance expenses of $200,000 representing works and repairs on both the vessels, corresponding to 10% of total vessel operating expenses. Management fees increased by 52% from Q1 ‘23 due to the increase in the average number of vessels. General and administrative costs were $1.5 million mainly related to the expenses incurred from the two public offerings and the reverse stock split. Depreciation recorded in Q1 ‘24 was $1.4 million, a 50% increase from Q1 of last year due to the increase in the average number of vessels. Interest and finance costs for the period was 543,000 and related to the accrued interest expense related party as of March 31, ‘24, in connection with the $38.7 million payable, which is part of the acquisition price of our Aframax tanker, Afrapearl II, which is payable by July 24. Unrealized loss on warrants for the three months ended March 31, ‘24, was $630,000 and related to the net fair value losses of our Class B-1 and Class B-2 warrants and Class C-1 and C-2 warrants, which were issued during the first quarter of ‘24. As a result of the above, for the three months ended March 31, 24, the company reported a net income of $3.8 million. The net income for the first quarter of ‘23 was $751,000 corresponding to an increase of 404% this quarter. EBITDA for the three months ended March 31, 24 amounted to $5.7 million, representing an increase of 301% from Q1 ‘23. Turning to Slide 13 for the balance sheet. The fleet book value as at the end of March ‘24 was $73.8 million. As at the end of Q1 ‘24, the cash and cash equivalent was $34.9 million, an increase of 285% from December 31, ‘23. The company has no outstanding bank debt. The financial liability of $39 million relates to the Aframax oil tanker that was acquired in July ‘23 and is due in July ‘24. Concluding the presentation on Slide 14, we outline the key variables that will assist us progress with our company's growth. Owning a high quality fleet reduces operating costs, improves safety, and provides a competitive advantage in securing favorable charters. We maintain the quality of the vessels by carrying out regular inspections, both while in port and at sea and adopting a comprehensive maintenance program for each vessel. The company's strategy is to follow a disciplined growth with in-depth technical and condition assessment review. Management is continuously seeking timely and selective acquisitions of quality vessels with current focus on short to medium term charters and spot voyagers. We always charter to high quality charters, such as commodity traders, industrial companies and oil producers and refineries. The company maintains an adequate level of cash flow and liquidity with no outstanding bank debt. At this stage, our CEO, Dr. Diamantis Andriotis will summarize the concluding remarks for the period examined.
- Diamantis Andriotis:
- 2024 started with an affluence of vigorous activities for C3is that will enable us to act instantly as the windows of growth and opportunities open. During the first quarter of the year, we concluded two follow-on equity offerings, generating aggregate net proceeds of $11.4 million, and we also affected the reverse stock split of one for 100 of our common shares aimed at meeting the minimum bid price requirement for maintaining listing on Nasdaq. In May, we took delivery of our latest addition to the fleet, the Eco Spitfire, a 33,000 deadweight, 2012 Japanese built dry bulk carrier. However, payment will be affected in April 2025. Our fleet has increased by 234% since the company's inception less than a year ago. Our financial results for Q1 2024 showed increases of 300% to our EBITDA, 400% to our net income and 285% in our cash balance. Earnings momentum are generally favorable and we are focused on identifying optimal opportunities with our strategy remaining aimed at growth, earnings and returns on investments. We believe that our capital structure comprising of no bank debt and the strong cash balance currently standing at over $40 million will further enhance our company's ability to fund selective vessel acquisitions following payments of the remaining purchase price for our Aframax and our dry bulk carrier. We aim at diversifying our fleet so as to have more impact on long term profits by weighting of exposure to different segments, thus allowing stronger segments to bolster weaker ones and smoothen returns over time. We would like to thank you for joining us today and look forward to having you with us again on our next call for our second quarter of 2024 results.
- End of Q&A: