IMPP Imperial Petroleum Inc

IMPERIAL PETROLEUM INC. (NASDAQ: IMPP, the “Company”), a ship-owning company providing petroleum products, crude oil and drybulk seaborne transportation services, announced today its unaudited financial and operating results for the three months ended March 31, 2024.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

• Fleet operational utilization of 80.6% in Q1 24’, an improved performance compared to Q4 23’, mainly due to a 29.3% (65 days) decrease in commercial idle days. In Q1 23’our operational utilization was 85.0%.
• 75.0% of fleet calendar days, equivalent to 671 days, in Q1 24’ were dedicated to spot activity.
• Revenues of $41.2 million in Q1 24’, compared to $29.9 million in Q4 23’, equivalent to a 37.8% rise and $65.4 million of revenues in Q1 23’.
• Net Income of $16.7 million in Q1 24’ compared to net income of $6.5 million in Q4 23’ equivalent to a 157% increase- and net income of $35.7 million in Q1 23’.
• Cash and cash equivalents and time deposits of $67.0 million as of March 31, 2024.
• On April 17, 2024, we agreed to sell our 2009 built aframax tanker Gstaad Grace II for $42 million. The vessel was delivered to its new owners on April 26, 2024.

First Quarter 2024 Results:

• Revenues for the three months ended March 31, 2024 amounted to $41.2 million, a decrease of $24.2 million, or 37%, compared to revenues of $65.4 million for the three months ended March 31, 2023, primarily due to an average year on year decline in tanker market spot rates by 38%. It is noted that during the period ended March 31, 2023 tanker market rates were at peak levels mainly due to the sharp effect of the Russian Ukraine conflict on tanker rates which normalized in the following quarters.
• Voyage expenses and vessels’ operating expenses for the three months ended March 31, 2024 were $13.5 million and $6.0 million, respectively, compared to $16.9 million and $6.9 million, respectively, for the three months ended March 31, 2023. The $3.4 million decrease in voyage expenses is mainly due to longer haul spot voyages and lower transit through the Suez canal compared to the same period of last year which led to decreased port expenses by $1.4 million (33.7%) and decreased commissions by $2.2 million due to lower revenues. The $0.9 million decrease in operating expenses is due to the slight decrease in the average number of our vessels.
• Drydocking costs for the three months ended March 31, 2024 and 2023 were $0.6 million and $0.6 million, respectively. During the three months ended March 31, 2024 our aframax tanker commenced its drydocking which was concluded within April 2024, while during the three months ended March 31, 2023 one of our handysize drybulk carriers underwent its drydocking.
• General and administrative costs for the three months ended March 31, 2024 and 2023 were $1.2 million and $1.0 million, respectively. This change is mainly attributed to the increase in stock-based compensation costs, partly offset by a reduction in reporting expenses due to the spin-off of C3is Inc. which was completed in June 2023.
• Depreciation for the three months ended March 31, 2024 and 2023 was $4.0 million and $4.1 million, respectively. The change is attributable to the slight decrease in the average number of our vessels.
• Interest and finance costs for the three months ended March 31, 2024 and 2023 were $0.002 million and $1.4 million, respectively, as there was no debt outstanding during the three months ended March 31, 2024.
• Interest income for the three months ended March 31, 2024 and 2023 was $1.8 million and $1.3 million, respectively. The increase is mainly attributed to the $0.8 million of accrued interest income – related party for the three months ended March 31, 2024 in connection with the $38.7 million of the sale price of the Aframax tanker Afrapearl II (ex. Stealth Berana) which is receivable by July 2024.
• As a result of the above, for the three months ended March 31, 2024, the Company reported net income of $16.7 million, compared to net income of $35.7 million for the three months ended March 31, 2023. The weighted average number of shares of common stock outstanding, basic, for the three months ended March 31, 2024 was 27.6 million compared to 15.1 million shares for the three months ended March 31, 2023. Earnings per share, basic, for the three months ended March 31, 2024, amounted to $0.56, compared to earnings per share, basic, of $2.31 for the three months ended March 31, 2023.
• Adjusted net income was $17.5 million corresponding to an Adjusted EPS, basic, of $0.59 for the three months ended March 31, 2024 compared to an Adjusted net income of $36.0 million corresponding to an Adjusted EPS, basic, of $2.33 for the same period of last year.
• EBITDA for the three months ended March 31, 2024 amounted to $18.9 million, while Adjusted EBITDA for the three months ended March 31, 2024 amounted to $19.8 million. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.
• An average of 9.84 vessels were owned by the Company during the three months ended March 31, 2024 compared to 10.10 vessels for the same period of 2023.

Fleet Employment Table

As of May 16, 2024, the profile and deployment of our fleet is the following:

Name

Year Built

Country Built

Vessel Size (dwt)

Vessel Type

Employment Status

Daily Charter Rate

Expiration of Charter(1)

Tankers

Magic Wand

2008

Korea

47,000

MR product tanker

Spot

Clean Thrasher

2008

Korea

47,000

MR product tanker

Spot

Clean Sanctuary (ex. Falcon Maryam)

2009

Korea

46,000

MR product tanker

Spot

Clean Nirvana

2008

Korea

50,000

MR product tanker

Spot

Clean Justice

2011

Japan

46,000

MR product tanker

Spot

Aquadisiac

2008

Korea

51,000

MR product tanker

Spot

Suez Enchanted

2007

Korea

160,000

Suezmax tanker

Spot

Suez Protopia

2008

Korea

160,000

Suezmax tanker

Spot

Drybulk Carriers

Eco Wildfire

2013

Japan

33,000

Handysize drybulk

Time Charter

$18,200

June 2024

Glorieuse

2012

Japan

38,000

Handysize drybulk

Time Charter

$13,000

May 2024

Fleet Total

678,000 dwt

(1)

Earliest date charters could expire.

CEO Harry Vafias Commented

Year 2024 commenced quite favorably for Imperial Petroleum; $16.7 million of net income for the first quarter of this year, which is almost 160% higher than our profitability in the last quarter of 2023, fills us with optimism. The market continues to be governed by turbulence which directs longer haul voyages and is sustaining charter rates at firm levels. The financial health of Imperial Petroleum is undisputable with large cash pile and no bank debt; Going forward we will remain focused on the growth of our Company.

Conference Call details:

On May 16, 2024 at 09:00 am ET, the company’s management will host a conference call to discuss the results and the company’s operations and outlook.

Online Registration:

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/BI52fe1de4b58b412dada1845a63e07141

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 ten vessels - six M.R. product tankers, two suezmax tankers and two handysize drybulk carriers - with a total capacity of 678,000 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, 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 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 any financing arrangements, performance of counterparty to our vessel sale agreement, 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, the conflict on Israel and Gaza, the potential disruption of shipping routes due to ongoing attacks by Houthis in the Red Sea and Gulf of Aden or 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

Company Contact: Fenia Sakellaris IMPERIAL PETROLEUM INC. E-mail: info@ImperialPetro.com

Fleet Data: The following key indicators highlight the Company’s operating performance during the three month periods ended March 31, 2023 and March 31, 2024.

FLEET DATA	Q1 2023	Q1 2024
Average number of vessels (1)	10.10	9.84
Period end number of owned vessels in fleet	12	11
Total calendar days for fleet (2)	909	895
Total voyage days for fleet (3)	903	878
Fleet utilization (4)	99.3%	98.1%
Total charter days for fleet (5)	408	207
Total spot market days for fleet (6)	495	671
Fleet operational utilization (7)	85.0%	80.6%

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 Adjusted Net Income, EBITDA, adjusted EBITDA and adjusted EPS:

Adjusted net income represents net income before share based compensation. EBITDA represents net income before interest and finance costs, interest income and depreciation. Adjusted EBITDA represents net income before interest and finance costs, interest income, depreciation and share based compensation.

Adjusted EPS represents Adjusted net income divided by the weighted average number of shares. EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS are not recognized measurements under U.S. GAAP. Our calculation of EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS may not be comparable to that reported by other companies in the shipping or other industries. In evaluating Adjusted EBITDA, Adjusted net income and Adjusted EPS, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation.

EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS are included herein because they are a basis, upon which we and our investors assess our financial performance. They allow us to present our performance from period to period on a comparable basis and provide investors with a means of better evaluating and understanding our operating performance.

(Expressed in United States Dollars, except number of shares)	Three Months Period Ended March 31,
	2023	2024
Net Income – Adjusted Net Income
Net income	35,724,102	16,654,604
Plus share based compensation	301,541	858,810
Adjusted Net Income	36,025,643	17,513,414
Net income - EBITDA
Net income	35,724,102	16,654,604
Plus interest and finance costs	1,351,603	2,430
Less interest income	(1,279,216)	(1,785,878)
Plus depreciation	4,088,852	4,027,061
EBITDA	39,885,341	18,898,217
Net income - Adjusted EBITDA
Net income	35,724,102	16,654,604
Plus share based compensation	301,541	858,810
Plus interest and finance costs	1,351,603	2,430
Less interest income	(1,279,216)	(1,785,878)
Plus depreciation	4,088,852	4,027,061
Adjusted EBITDA	40,186,882	19,757,027
EPS
Numerator
Net income	35,724,102	16,654,604
Less: Cumulative dividends on preferred shares	(435,246)	(435,246)
Less: Undistributed earnings allocated to non-vested shares	(463,737)	(856,950)
Net income attributable to common shareholders, basic	34,825,119	15,362,408
Denominator
Weighted average number of shares, basic	15,054,406	27,613,661
EPS – Basic	2.31	0.56
Adjusted EPS
Numerator
Adjusted net income	36,025,643	17,513,414
Less: Cumulative dividends on preferred shares	(435,246)	(435,246)
Less: Undistributed earnings allocated to non-vested shares	(467,700)	(902,326)
Adjusted net income attributable to common shareholders, basic	35,122,697	16,175,842
Denominator
Weighted average number of shares, basic	15,054,406	27,613,661
Adjusted EPS	2.33	0.59

Imperial Petroleum Inc. Unaudited Consolidated Statements of Income (Expressed in United States Dollars, except for number of shares)

						For The Three Months Ended March 31,
						2023		2024
Revenues
	Revenues					65,421,101		41,203,281
Expenses
	Voyage expenses					16,077,827		12,963,607
	Voyage expenses - related party					810,530		514,414
	Vessels' operating expenses					6,875,876		5,951,561
	Vessels' operating expenses - related party					65,000		82,000
	Drydocking costs					621,376		625,457
	Management fees - related party					397,760		393,800
	General and administrative expenses					978,969		1,207,168
	Depreciation					4,088,852		4,027,061
Total expenses						29,916,190		25,765,068
Income from operations						35,504,911		15,438,213
Other (expenses)/income
	Interest and finance costs					(1,351,603)		(2,430)
	Interest income					1,279,216		1,035,261
	Interest income - related party					-		750,617
	Dividend income from related party					-		189,583
	Foreign exchange gain/(loss)					291,578		(756,640)
Other income, net						219,191		1,216,391
Net Income						35,724,102		16,654,604
Earnings per share
- Basic						2.31		0.56
- Diluted						2.31		0.50
Weighted average number of shares
-Basic						15,054,406		27,613,661
-Diluted						15,054,406		30,951,012

Imperial Petroleum Inc. Unaudited Consolidated Balance Sheets (Expressed in United States Dollars)

					December 31,		March 31,
					2023		2024
Assets
Current assets
	Cash and cash equivalents				91,927,512		35,331,381
	Time deposits				32,099,810		31,628,000
	Receivable from related parties				37,906,821		38,786,553
	Trade and other receivables				13,498,813		16,747,942
	Other current assets				302,773		834,802
	Inventories				7,291,123		7,865,379
	Advances and prepayments				161,937		207,473
Total current assets					183,188,789		131,401,530
Non current assets
	Operating lease right-of-use assets				-		132,448
	Vessels, net				180,847,252		248,873,394
	Investment in related party				12,798,500		12,796,416
Total non current assets					193,645,752		261,802,258
Total assets					376,834,541		393,203,788
Liabilities and Stockholders' Equity
Current liabilities
	Trade accounts payable				8,277,118		6,681,701
	Payable to related parties				2,324,334		5,256,860
	Accrued liabilities				3,008,500		4,203,686
	Operating lease liabilities, current portion				-		72,704
	Deferred income				919,116		49,950
Total current liabilities					14,529,068		16,264,901
Non current liabilities
Operating lease liabilities, non-current portion					-		59,744
Total non current liabilities					-		59,744
Total liabilities					14,529,068		16,324,645
Commitments and contingencies
Stockholders' equity
	Capital stock				332,573		332,573
	Preferred stock, Series A				7,959		7,959
	Preferred stock, Series B				160		160
	Treasury stock				(5,885,727)		(8,390,225)
	Additional paid-in capital				270,242,635		271,101,445
	Retained earnings				97,607,873		113,827,231
Total stockholders' equity					362,305,473		376,879,143
Total liabilities and stockholders' equity					376,834,541		393,203,788

Imperial Petroleum Inc. Unaudited Consolidated Statements of Cash Flows (Expressed in United States Dollars

							For The Three Months Ended March 31,
							2023					2024
Cash flows from operating activities
	Net income for the period						35,724,102					16,654,604
Adjustments to reconcile net income to net cash
provided by operating activities:
	Depreciation						4,088,852					4,027,061
	Amortization of deferred finance charges						134,427					-
	Non-cash lease expense						16,316					17,550
	Share based compensation						301,541					858,810
	Unrealized foreign exchange loss on time deposits						-					799,150
	Dividend income from related party						-					(189,583)
Changes in operating assets and liabilities:
	(Increase)/decrease in
	Trade and other receivables						(7,689,495)					(3,249,129)
	Other current assets						(487,804)					(532,029)
	Inventories						(2,435,614)					(574,256)
	Changes in operating lease liabilities						(16,316)					(17,550)
	Advances and prepayments						19,540					(45,536)
	Due from related parties						-					(879,732)
	Increase/(decrease) in
	Trade accounts payable						476,307					(1,100,028)
	Due to related parties						633,383					2,839,227
	Accrued liabilities						605,944					903,784
	Deferred income						(406,022)					(869,166)
Net cash provided by operating activities							30,965,161					18,643,177
Cash flows from investing activities
	Dividend income received						-					191,667
	Acquisition and improvement of vessels						(25,923,656)					(72,257,190)
	Purchase of bank time deposits						(18,536,290)					(31,695,420)
	Maturity of bank time deposits						68,000,000					31,368,080
Net cash provided by/(used in) investing activities							23,540,054					(72,392,863)
Cash flows from financing activities
	Proceeds from equity offering						12,095,255					-
	Stock issuance costs						(120,954)					-
	Stock repurchase						-					(2,504,498)
	Dividends paid on preferred shares						(435,246)					(341,947)
	Loan repayments						(24,576,000)					-
Net cash used in financing activities							(13,036,945)					(2,846,445)
Net increase/(decrease) in cash, cash equivalents and restricted cash							41,468,270					(56,596,131)
Cash, cash equivalents and restricted cash at beginning of period							57,506,919					91,927,512
Cash, cash equivalents and restricted cash at end of period							98,975,189					35,331,381
Cash breakdown
	Cash and cash equivalents						95,519,418					35,331,381
	Restricted cash, current						2,855,771					-
	Restricted cash, non current						600,000					-
Total cash, cash equivalents and restricted cash shown in the statements of cash flows							98,975,189					35,331,381
Supplemental Cash Flow Information:
Non cash investing activity – Vessel improvements included in liabilities								-					655,333
Non cash investing activity – Dividend income from related party included in Investment in related party								-					160,416
Non cash financing activity – Dividend on preferred series A included in payable to related parties								-					93,299