Imperial Petroleum Inc. Q3 FY2024 earnings call

• Q3 '24 was satisfactory in profit despite market deterioration; prevailing rates for product and suezmax tankers declined. - Operational utilization was 65.6%, affected by drydocking of a product tanker and an incident with the Magic Wand. - Solid liquidity with $200 million cash and zero debt. - Almost half of the fleet under time charter employment; three handysize bulk carriers under short time charters, two product tankers under short time employment until January '25 and August '27. - Tanker spot rates declined in Q3 '24 compared to Q2 '24, with a cautious upward trend expected in product tanker rates during winter. - Tanker market fundamentals: record low fleet growth rate in 2024, aging fleet for MRs and Suezmaxes, OPEC's voluntary cut unwind expected to boost cargo flows by 3 million bbl/day in 2025. - Drybulk market: Q3 '24 earnings for handysize bulkers flat, affected by Chinese economy slowdown; Chinese steel production down 8% y-o-y, but steel exports up 18% y-o-y.

In Q3 '24, revenues were $33 million, a 12.2% increase from Q3 '23. EBITDA for Q3 '24 was $12.2 million, net income was $10.1 million (EPS $0.29). Excluding non-cash items, adjusted net income for Q3 '24 was up 142% compared to Q3 '23. For the nine months, EBITDA was $52.8 million and adjusted net income excluding non-cash items was $15.6 million. As of September 30, 2024, cash including time deposits was about $200 million. Revenues increased due to an increase in average fleet by 1.3 vessels and better performance of product tankers. Voyage costs increased due to EU emission allowance expenses, and running costs increased with fleet growth.

• Expect seasonal effect and end of refinery maintenance to push tanker market up in winter but not to last year's rates. - OPEC's voluntary cut unwind anticipated to boost cargo flows by 3 million bbl/day in 2025, raising tanker rates. - Drybulk demand risks: unwinding of extra ton miles and Chinese economic slowdown, potentially worsened by US tariffs.

• Geopolitical uncertainties affecting tanker and broader shipping markets. - For drybulk: unwinding of extra ton miles and Chinese economic slowdown, possibly worsened by US tariffs. - Market weakness due to seasonal factors and geopolitical uncertainties.