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Harry Vafias-LPG Shipping: The Segment to Be When Everything Else Fails


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Harry Vafias-LPG Shipping: The Segment to Be When Everything Else Fails

  2. 2. 1StealthGas: Then vs. NowAt IPO (Oct.2005) TodayFleet 9 LPG Carriers37 LPG Carriers(incl. 4 under construction)3 Product Carriers1 AframaxValue Of ExistingFleet$87.0mm$600.0mm(incl. NB deposits)Average Age10.5 Years 10.9 YearsWe own the largest fleet of handysize LPG carriers worldwideMarket Capitalization $116.0mm $228.7mmPrice / NAV 1.15 0.89xShare Price $14.50 $11.13* Based on Feb 2013 Valuations incl. charters and share price as of April 1st, 2013
  3. 3. 2Stealthgas share of worldwide fleetPressurized 6300 - 7500cbm: 10 vessels* 5000cbm: 13 vessels* 3300 - 4100cbm: 10 vesselsSemi-ref 3200 - 4100cbm: 4 vessels*Including 4 NBs to be delivered in 2014GASS Market share ~14% vs Global LPG Ownership remains fragmented.
  4. 4. What is LPG (LIQUID PETROLEUM GAS) ?3
  5. 5. Global Seaborne LPG Trade4Source: Global Insight, Danish Ship Finance, DVB & ClarcksonSeaborne LPG trade grew by ~ 8-10% in 2012 driven by demand from emerging economies.Total seaborne trade is expected to increase by 16% from 2010 to 2013 and come to 100.6mmt; it isexpected to rise by at least ~5% annually through 2016.Asian imports rose by ~12% in 2012, contributing to 90% of the growth in LPG seaborne trade.
  6. 6. LPG Major Trades5Nevertheless, the new era of shale gas boom in the US is a game changer. Moreover, the US CoastGuards rules changed as of August 2012, allowing pressurized ships to load Propane in the US.THE first port call in the US by a liquefied petroleum carrier was done by one of our vessels, GasEvoluzione early March 2013, with cargo destined to the Caribbean; this symbolises a quietrevolution on which the company intends to capitalise as this market continues to develop.The Middle East remainedthe single largest contributorto growth in total LPGexports in 2012, with anincrease of LPG supply forexports by 8%.Source: Danish Ship Finance
  7. 7. An overloaded orderbook in mainstream segmentsBut not in the LPG spaceSource: Fearngas, as of March 2013* Includes all LPG Carriers size categories6The LPG space still remains smaller thanother shipping segments with a negativefleet growth from 2013 onwards.LPG Fleet: 3,500-7,500 Semi-ref andPressurised (excluding Chinese fleet)counts 260 vessels and pressurizedorderbook counts 16 vessels.StealthGas is in a position to takeadvantage of positive market dynamics.New LPG Orders placed for 2013*
  8. 8. Fleet Employment Profile7
  9. 9. 3,000-8,000 cbm TC RatesSource: Company and Clarckson Capital Markets Estimates as of March 2013 8Independent charter rates forecast3,500 cbm Time charter rates well above breakeven (tradingEast)EBITDA Estimates if all the LPG vessels inthe fleet were chartered at the TC rate below:
  10. 10. 3000-8000 cbm Fleet Development Vs. TCRates/Earnings*•TC equivalent spot earnings are assessed average earnings in the spot market excluding waiting time. Yearly average•Fleet growth excl. Chinese fleet, assuming 30 year scrap age by end 2013.Source: Inge Steensland AS 9-5%0%5%10%-1002003004005006002000200120022003200420052006200720082009201020112012201320142015Fleetgrowthin%(bars)TCequiv.spotearningsTCratesinUSD1000spermonth(lines)Overall 3000-7999 fleet growth SR 3000-7999 fleet growthSR 6500 cbm TCE SR 3500 cbm 1yr TCPR 3500 cbm 1yr TC EastINGE STEENSLAND AS
  11. 11. Thank You Very Much !18