StealthGas reports $17.3 million profit amid fleet reduction strategy

On September 2, StealthGas (NASDAQ: GASS) reported its second-quarter results, revealing a revenue decrease to $42.8 million from $47 million last year. Despite the drop in revenue, net income rose to $17.3 million, an increase from $15.9 million in the previous quarter. The shipping company has successfully turned 40% of its revenue into profit, a feat attributed to its strategic fleet reduction and a focus on financial stability.

StealthGas has spent the last three years shrinking its fleet, cutting the number of vessels from 40 to 25 by selling 13 ships for about $170 million since the start of 2023. The company also prepaid $350 million in debt, achieving a debt-free status by July 2025. This shift has allowed StealthGas to redirect cash flow from debt servicing towards strengthening its balance sheet. The company has repurchased approximately $21 million in stock this year, although stock buybacks paused in the second quarter as share prices increased.

As of June 30, StealthGas reported cash and short-term investments of $168.3 million, a significant 70% increase from the $99 million at the beginning of the year. The company’s total liquidity has climbed past $250 million, bolstered by a $77 million insurance settlement. Each vessel in the fleet has also become more profitable, with the time charter equivalent rate reaching $15,700 per day, while operating costs remain manageable at approximately $5,110 per vessel per day. Furthermore, management has secured $90 million in revenue through 2029, including $50 million for the remainder of 2026.

However, the ongoing conflict in the Persian Gulf poses challenges for StealthGas. Global LPG exports fell by 8% in the first half of 2026 due to disruptions caused by the fighting. Although a StealthGas vessel safely escaped the region, CEO Harry Vafias expressed concerns about the dangers of the Strait of Hormuz. Chairman Michael Jolliffe warned that prolonged conflict could lead to demand destruction, with LPG imports declining by 20% in India and 29% in China during the same quarter. Additionally, uncertainty looms with thinner forward visibility and a high order book for medium gas carriers, which could affect future rates if demand does not keep pace with supply.