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StealthGas Inc (NASDAQ:GASS)

Q4 2012 Earnings Call

February 21, 2013 11:00 am ET

Executives

Harry Vafias – Chief Executive Officer

Konstantinos Sistovaris – Chief Financial Officer

Analysts

Natasha Boyden – Global Hunter

Robert Carlson – Janney Montgomery Sc

George Orman – Orman Company

Jeff Giggin – Milwaukee Private

Operator

Good afternoon ladies and gentlemen, thank you for standing by. Welcome to the StealthGas Fourth Quarter 2012 Results Conference Call. At this time all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions). I must advice you as well that this conference is being recorded today Thursday 21, February 2013 at 4:00pm UK Time. I would like to turn the conference over to your speaker today, CFO Harry Vafias. Please go ahead, sir.

Harry Vafias

Thank you and good morning, everyone. Welcome to our conference call and web cast to discuss the results for the fourth quarter and full year 2012. I’m Harry Vafias, CEO of StealthGas, and I would like to remind you please that we’d be discussing forward-looking statements in today’s call. Regarding the Safe Harbor language, I would like to refer you to slide number one of this presentation as well as to our press release on our fourth quarter results. With me today is, Konstantinos Sistovaris our CFO. And if you need any kind of information on the conference call or the presentation, please contact Konstantinos or myself.

Before I start with the slides, I would like to comment on the results we released this morning. I’m very delighted to announce that the fourth quarter of 2012 was the best quarter we had over the past four years. And before the full year of 2012, our performance has been excellent with every single quarter results have been stronger, in each respective quarter of 2011.

We announced earnings per share of $0.30 for the quarter and $1.41 for the year. Due to some non-recurring and non-cash items related to the fair values of our swaps, and both gains from the sale of our ships in 2012. Excluding these our fourth quarter earnings per share was 30% and our full year was $1.18 comparing these to the $0.17 for the fourth quarter of ’11 and the $0.56 for the whole of 2011, we can see improvement in our bottom-line of 100% and 110% respectively.

I believe that the strength of the LPG market combined conservative management and consistency have laid solid foundations for the company and our cash position, made for us to continue looking for strategic acquisitions to consolidate our fleet and increase our market share beyond the four new vessels we have currently are under construction.

So, let’s start the presentation slide number two, will give you an overview of our business strategy and 2012 events. Our mid-term goal is to renew our fleet and with that respect 12-digit shares were delivered to us in 2012, while two older ones were sold in the first and second quarter last year.

As I have said in the past, we wish to keep the average age of our fleet, and get rid of all the steps at operating the stock markets will improve our company coverage and operational efficiencies and that was the reason behind the sale of those two vessels.

Moreover, previously announced the company plans to expand the fleet with additional four brand new ecotype and participation building, these were designed in-house in expectations to meet our needs and our choppers and eventually improve savings up to 20%.

In terms of leverage the company has already made the necessary arrangements for post delivery financing for those new buildings and we remain cautious and maintain a moderate leverage of 50%. At the end of the fourth quarter ’12, our net debt capitalization ratios decreased to 46.4% compared to 47.9% the previous quarter. Our gross debt to the cut out $345 million at the end of the quarter based on our current projections, our debt levels remain at these levels after we have concluded all the acquisitions of new building vessels.

We’ve continued to strive to obtain secular invisible revenue in extremely unstable and unpredictable customers. At the moment, six employments are currently 2013 stands at 75% and about already stakes for 2014.

Our fourth goal has been to own and operate a modern fleet of gas ships and we should expect the average age of 11.7 years compared to industry average of about 16 years for LPG towards the average age of our total fleet is 10.9 years. We continue to believe that within our core sector having a young and modern safe digit comparative advantage of younger vessels are less. Operating expenses consume less bankers and are more appealing to (inaudible).

Our mixed current economic environment in the hype around ecotype vessels we started to move forward in 2013 and beyond. We continue to have strong charters which matures our important risk and deemed to the strength of LPG market has created a lot of hype lately and assumed the participation of more established names in it, as we witnessed three mergers in the last three months.

Now, in terms of cost efficiency operations, I’m pleased to report here we have a good performance in the fourth quarter. Our net income breakeven level per vessel per day excluding losses on the remittance was $5,824 per vessel per day compared to $5,991 in the first quarter and $5,816 in the second quarter, which puts us comfortably in the profit making territory. We continue to concentrate heavily on managing our cost base and the economy of standard lowness to contain cost as much as we can.

I’d like to remind you once more, to return to general administrative expenses, we are mostly lowest in the public seeking sector. And we’re working hard to control cost not only on the operational side but post on the managerial side.

Finally, regarding our $15 million share buyback, since the program’s inception have brought back approximately 1.8 million shares or 8% of our sales outstanding at the cost of about $8.5 million. We do no proceed with any buybacks during the last quarter of 2012.

Slide number three, I recently demonstrated development of our fleet. Our regional new building program that sells LPG ships has been completed with the latest two deliveries we had in the first and second quarters of 2012. This company made selected sale of older and smaller tonnage in 2011 and 2012 thus keeping the average number of vessels in our fleet constantly.

Following that strategy to ignore our fleet, we have acquired four ecotype in new buildings to be delivered in ’14 and ’15, for which we have already committed financing as mentioned before.

Our total fleet at the end of the quarter comprises of 33 gas ships, three product tankers and one Afromax crew tanker. And we remain the worldwide leader in the owned LPG ships in our strategic segment of 3,000 to 8,000 CBM. We are committed to the LPG sector, we have about 15% market share and then tend to consolidate our leading position.

We have currently $25 million in free cash and free vessels unencumbered if you were to leverage these three vessels we would proceed with new vessel acquisitions worth about $120 million without adding additional debt for vessels with existing mortgages or using more shares. The improvement in our liquidity over the last year combined the growing strength of the LPG market allows us to take new investments whenever we make spot opportunities.

Slide number four, this slide demonstrates our fleet deployment profile and provides you with the earnings visibility for each of the 37 vessels currently in our fleet. At the bottom of the employment profile chart, we have included the percentage of fixed employment dates for ’13 and ’14. This enables you to assess the stability and predictability of our earnings. For ’13, 75% of voyage days are fixed for’14 42% are fixed and there is a number of ships extending up to 2017.

As announced earlier today, we have additionally entered in three new charters, the gas monarch was 10 short deferred payer to six months with a six months extension and the Survival Lyn have their variable charters extended at least February 2014.

Total consolidated revenues are approximately $75 million for ’13, $14 million for ’14 with an estimated piece equivalent for the LPG vessels on non-core charters of something below $10,000 a day.

In terms of charter types, out of the fleet of 37 vessels we have 14 of the vessels on long term variable, 17 on time charters, and six in the spot market. The company sponsors to find employment for long-term charters in order to secure it’s customer through used fare of our risk, we have arranged for a number of variable charters. With a fleet of 37 ships, we always have some vessels coming off charters, therefore our charter coverage is fairly staggered. For ‘13, 9 of our vessels will complete their chartering arrangements and we would hopefully re-charter them at high rates.

We’ll now turn to the financial highlights for the fourth quarter. So, I’ll pass it on to Mr. Sistovaris.

Konstantinos Sistovaris

Thank you, Harry. Good morning everybody. So, let me continue the presentation with Slide number five, the financial highlights for the fourth quarter of 2012. With an average of 37 vessels owned and operated in the fourth quarter, we realized the net income of $7.8 million on voyage revenues of $30.6 million.

EBITDA was $17.2 million and earnings per share for the quarter was $0.38. Our adjusted net income for the quarter was $6.7 million or $0.33 per share, that’s after subtracting the non-cash gains of $1.1 million on the interest rate to fair-value changes.

For the full year, we realized net income was $29 million on voyage revenues over $119.2 million. EBITDA for the year was $67 million and earnings per share was $1.41. Again in order to present what we consider a more meaningful picture of our operational performance, we adjusted net income figure by subtracting $3.5 million we gained from changes in fair-value of our swaps, and $1.4 million gain on the sale of the vessel in the second quarter to arrive to an adjusted net income figure for the year of $24.2 million or $1.18 per share. The free cash balance at the end of the quarter was $42.3 million. We also had about $8.6 million in restricted cash as part of our loan agreements.

We’ll now turn to Slide number six, for a summary of our income statement in order to compare results for the quarter and year-on-year. In the fourth quarter of 2012 compared to last year, we had $3.3 million or 75% increase in net income which was mainly due to combination of lower voyage operating and drydocking cost and higher revenues.

Voyage costs were lower by $0.8 million or 17%. This was primarily due to a lower number of vessels operating under spot charters and the corresponding lower consumption of bunkers, since bunkers account for more than 50% of voyage expenses.

Our earnings expenses were essentially flat despite having under our operations in 2012, two more vessels compared to the fourth quarter of 2011. No vessels were drydocked during the fourth quarter, so our expenses were minimum. In the same period of 2011, we had drydocked two vessels. As a result of the above, our operating income increased from $6.8 million last year to $9.8 million for the fourth quarter of 2012, a 44% increase.

On an adjusted basis, our earnings per share were $0.33 for the quarter compared to $0.17 the previous year. Now comparing our full year results, our revenues were for 2012 $119.2 million compared to $118.3 million the previous year, up by $0.9 million or 0.8%.

We managed to increase revenues despite firstly the lower average number of vessels in our fleet, we had an average of 36.9% in 2012 versus 37.6% in 2011. And secondly the 30% increase in variable days as opposed for the day. Variable charters of course come on lower revenues to compensate for the fact that we don’t pay for any expenses. So in effect, the solid revenue number was a result of three factors. Higher chartering rates achieved due to the improving freight markets, higher earnings on the new vessels in our fleet versus the older vessels it was sold and the higher utilization ratio of our vessels.

Our voyage expenses in 2012 decreased by $5.1 million or 28.6% while our operating expenses decreased by $6 million or $16.4%. This was mostly due to the higher number of vessels operating under variable charters in 2012. As far as drydocking, five vessels were drydocked during 2012 at the cost of $2.1 million compared to nine vessels last year at the cost of $3.4 million. Our earnings per share for the full year on an adjusted basis was $1.18 compared to $0.56 last year a 110% increase.

Please turn to slide number seven. Looking at our balance sheet, in terms of cash we continue to maintain a healthy cash balance of $42.3 million, as of December 31 pluse $8.6 in restricted cash as part of our loan agreement. We also have a $19.3 million in advances for the new building vessels under construction. We don’t have to make any other advances during 2013 in respect of these vessels. We only have to make an equity contribution at the time of the delivery of the vessels in the $250 million for all four last year.

Our vessels book value, net of depreciation to the $634.6 million compared to $613.8 million at the end of last year, up by about $20 million due to the two vessels we bought in 2012.

In terms of liabilities, the current portion of our long-term debt – that is what loan repayments are scheduled over the next year – slightly increased to $35.8 million while our long-term debt decreased to $309.6 million from $317.1 million. I would also like to point out that we have no debt maturing in 2013 so there is no need to refinance. The first balloon payments on our loans are due in mid-2014, and they relate to modern vessels. We will discuss refinancing options prior to their expired.

Other liabilities of mostly relate to the interest rate swaps we have with our banks to protect us from increases in LIBOR rates. And they reduced to $5.6 million from $9.4 million in 2011. The average fixed rate we pay on lease swaps is 3.8% and the decrease in the liability is due to the fact that these swaps are amortizing. The notional on these swaps was $142 million at the end of 2011, the $125 million at the end of 2012 and will be have $65 million by the end of this month but some of them expire.

We are monitoring interest rates closely, and we would consider entering into new hedging arrangements if we see fit. But this time, unlike in the pre-crisis period, we would be entering to these hedges from a very low point.

Finally, our so called equity for the fourth quarter was $342 million, a large increase of $20 million compared to the end of 2011. I would also like to point out that although our share price has greatly improved since last year, besides it’s really still undervalued and facing at around 25% discount to NAV.

We now, please turn to slide number eight. These are our operating highlights for the fourth quarter and full year of 2012 and 2011. Comparing quarter to quarter, we have the same number of vessels in the fleet, hence the number of days for the fleet have not changed.

The change in our chartering compensation has also no change. What has changed in our utilization ratio that has improved as a result of two factors. First, that we did not drydock any vessels in 2012 and thus did not lose any day. And second voyage days lost between charters were reduced as there was more activity in the spot market.

What has also changed is that on a daily basis results, we have significantly improved our TC rates and reduced our operating expenses averages. In comparing our full year results where we had an average one less than cylinder fleet, there is a change that has a period over the last few quarters that has been driving our results over the year. It is largely decreased in the number of spot days from 2,913 in 2011 to 1,811 in 2012, as more vessels were fixed on previous charters.

We now only have six vessels operating in the spot market. So to give you this number in percentage terms, while spot days are presented 21% of all voyage days in 2011, they are down to 13% in 2012. On the other hand, variable days that are represented 29% now represent 38% of all voyage days. Again, in the full year results we see in our increase in our utilization ratios and especially our operation utilization from 95%.

In terms of our average daily results we saw our average time charter equivalent rate improving year on year to $9,700 a day from $8,827. While our total operating expenses decreased from $4,342 per day to $4,056 per day. We’ll continue to operate constantly above breakeven levels both in terms of income and cash flow.

We now turn to slide number eight. As usual, we are going to provide you with some estimates for 2013. We have contracted revenues under time and variable charges of approximately $78 million. Non-contracted voyage days for the vessels operating in the spot market are coming off their charters are 3,800 days. We expect our operating expenses would be around $8 million per quarter. As far as drydock expenses, we have again five vessels scheduled for drydock this year one in each of the first three quarters and two in the last quarter.

Interest payments on our loans and cash payments on our swaps, we estimate to be $8.5 million and $2.5 million respectively. Depreciation expenses we estimate at $29.3 million for the year.

Thank you very much, and now I will hand you back to Harry for some further comments on the market.

Harry Vafias

Okay, slide number 10. In this slide, we show you one here, time charter rates for our market. We have updated this slide with last year’s rates, fine trades and future estimates. This has 5,000 CBM per share ship, which is the average size of our fleet, the variation to fleet 2012 was $306,000 per month, while Q4 2012 were $290,000 per month and the forecast for the first quarter to remain the same.

In the segment we operate which is 2,000 to 8,000 CBM, we have seen it strengthen in the market comprised of 2011 in the region of 10% to 20% depending on the size and the age of the ships.

On a short-term basis, winter was slow to come in the most of the Northern Hemisphere so that we could stay at these elevated levels. Later we had an increase in the South East and North East Asia where the majority of our vessels are trading. In Europe where the winter has been mild, the market was slow to take off but it has been strengthening our colder weather it is setting in.

We believe that the strengthening in our market has allowed us to conclude new traces of elevated levels as previously announced and most importantly for longer periods. At this point, we have six vessels operating in the stock market, but because of our stronger employment profile we expect nine ships will come off with charters during 2013 and hopefully will be remained at much higher levels.

Slide 11, global ship on LPG trade grew by 8% in 2012, for 2015, it is expected to increase by 16% from 2010 and rise by at least 5% annually through 2016. Growth was mostly driven by demand coming from emerging countries, thus people are gradually improving their living standards.

Asian imports drove by 12% in 2012 contributing to 90% of growth rate in LPG ship borne trade. The LPG ships starting propane and gas represent 72% of the market and demand especially for propane steadily increasing in developing countries especially in the far east were two thirds of our fleet is trading.

On the other hand, a recent trend we’ve seen is increasing demand for LPG for from petrochemical plant especially in Europe where one third of our fleet is trading but also in India. LPG ships starting Welch Petrochemical products represent 9% of the market.

We now turn to slide 12. 2012 was indeed the first time the US LPG export exceeded the imports since 1973, is expected to achieve 5 million metric tons in 2013 against 3.7 million metric tons in 2012 and eventually reaching 7 million metric tons in 2014. Great news for precious owners like us is the possibility to now load propane in the US which offers a new opportunity for several business north of the – in the Caribbean market which to a great extent has specialized receiving terminals, of which is too early to say we currently what trade partners will emerge, we expect this to be a positive thing for our business.

We are taking steps to ensure our vessels will comply with the regulations I made following in order to call on a US spot, and already we have three vessels trading in the Gulf.

Slide 13, the Middle East remains the single largest contributor to growth in total LPG exports in 2012 the Middle East had an increase of LPG supply for exports of 8%. LPG in the US is cheaper than the biggest suppliers in the middle east which accounts for 35 million metric tons a year of the estimated 85 million metric tons global sea borne trade.

With strong growth in US National Guards production from Shell has had the export capacity and the US is expected to rise to 12 million metric tons in 2015 from 5 million metric tons now. More ships will be needed for US export routes which could change regional dynamics and future sea borne global energy flows in the next decade to come.

Slide 14, we have included this slide to emphasize the point about the order-book which spread over a period of at least 3 years, although in most cases the lever are front-loaded. As you can see since the previous quarters has been an increase of vessels to be delivered in the LNG and offshore segments due to the current solid chartering market. At this point, increasing LNG volumes may absorb the increase in the order-book but unless there is a risk trend in the ordering of new vessels in this space could be oversupplied in the coming years.

Although the numbers have come down a bit since the previous quarter for drybulk and containers, the order-book continues to be elevated and the current overloaded fleet for dry tankers and containers is included for the interest rates as we are witnessing right now.

As far as produced concerned swap of the figures shown here in graph are for all size categories and not our specific size segment. While trade growth is a distinctive factor for improvements in sea borne trade, it’s equally important that is a balance in the supply of ships. This is what has differentiated us from the more shipping segments since in real business sector we have not witnessed over the last couple of years, the readiness growth in supply of new ships that was flagged to the other segments.

We estimate that there are about 250 vessels pressurized and assembled ships segment, and excluding our own belonged orders for just 12 more ships to be delivered over the next two years.

Slide 15, we consider free development in PC rates for our strategic segments 3,000 to 8,000 cubic meters. We can see a negative fleet growth from 2013 for both pressurized and assembled ships and a very limited one for two year onwards. We believe the fundamentals for LPG will continue to be favorable, rising demand comes from the Far East and Orlando is another crisis in the world. So, Middle East is likely where this is abate.

At the same time new vessels have not been entering the sea route rate capital of meeting their demand. As a result we believe it is an opportune time to go over the company further and control date our leading position.

Last slide, slide 16, it offers a compulsion of our company with some of our US leases shipping companies operating in different segments as it stars and tankers. As you can see there are a couple of companies with stock trades well above NAV and there may be variety of uses for that, even though some of them continuously post losses.

As far as our stock price is concerned, overall grade improve compared to this period last year, we trade at a discount and at a lower end lease market. We are a solid company and an industry which has drive for strong fundamentals. Therefore I would say again that we represent an attractive posture for investors and what I believe is still a very good entry point as we are still undervalued the stock trading at 25% discount to NAV and about 7 times earnings.

Just consider what we have $50 million in cash, $342 million in shareholder equity and just $200 million in market cap. I would like to close this presentation by saying that we have been reporting records, breaking results for 2012 and internal kept reporting solid operational profits through the year.

Our bottom line operational results have improved by 100% year-on-year. And as the gas market is projected to be steadily improving we continue to be optimistic about the future based on the market fundamentals we present it to use it a day.

We now partly have managed to renew our fleet and we continue to look at opportunities to do so as well as increase our liquidity position, with our conservative management. We have also significantly improved our available cash, recently and which will assist us in our future growth. We are looking in the market for a percentage to grow our fleet.

With recent investment to growth East Asia the bank’s finance market where we have some banks exceeding the business were unable to provide finance. However, our company has earned the support of it’s bank so we have good indication that our bank will be there to finance our fixed acquisitions.

We have now reached the end of the presentation. So we would like to open the floor for your questions. So, please open the floor.

Question-and-Answer Session

Operator

Thank you very much sir. (Operator Instructions). Your first question comes from Natasha Boyden from Global Hunter. Please go ahead.

Natasha Boyden – Global Hunter

Good Morning, Harry and Konstantinos how are you?

Harry Vafias

Good morning.

Natasha Boyden – Global Hunter

Harry, you told us a lot about now will be in the right time to express the fleet, sure enough if you think considering all the new goals of the vessels, just going in the fleet the size you want rather enough high quality second half ships available out there?

Harry Vafias

Depends on what you mean enough, all this while the market is hot, there is not too many good ships around for sale at reasonable prices. But being quite further and speaking to what we focus around the world, I think I maybe I will be able to find between two and five more than second hand vessels to buy.

Natasha Boyden – Global Hunter

Okay, that’s very helpful. And what would you be willing to increase leverage to at this point in the cycle to grow, I mean, what is your idea on excess of that and damage for acquisitions?

Harry Vafias

I don’t think we would be increasing the debt that most 60% of the total value.

Natasha Boyden – Global Hunter

Okay, all right, great. And then, lastly, have you given any thoughts, I’m sorry, I’m assuming that the cash repurchases are probably not as an attractive option as they were perhaps sometimes last year, give us what the stock price is down. I’m sure if you’ve given any thought to possibly payout dividend at this point?

Harry Vafias

Yes, dividend has been in our mind since the summer as we’ve discussed on the previous quarter. And I think that at the moment being bullish for the next 24 months our first priority is expansion so that’s my first priority right now. We want to see what we can find on the basis of those second hand ships in your buildings. And obviously then we can do the mass and see what dividend we can give because obviously when you start the dividend you must be able to keep the dividend. So, we don’t want to do something in a hurry and then have to stop it as other companies have done. So, we have to be very careful on what we can give in the long term.

Natasha Boyden – Global Hunter

Okay, that’s it from me. Thank you.

Harry Vafias

Thank you.

Operator

Your next question comes from Robert Carlson from Janney Montgomery SC. Please go ahead.

Robert Carlson – Janney Montgomery Sc

Congratulations on your quarter. I’m just – can you talk now a little bit, could you talk a little bit when you deliver product to the Far East, do those ships go back empty and where does the product come from primarily from the US?

Harry Vafias

The majority of our fleet are on time charters which means that whatever the ship does we still get paid. Even if the ship is idle, waiting for a cargo or even if this ship is balancing empty, somewhere we’re still getting paid. So, you shouldn’t worry about that.

And number two, where does the cargo come from, the majority of the cargo comes from refineries in the middle and Middle East and Far East and also national gust adjusting companies, again both in the Middle East and Far East.

Robert Carlson – Janney Montgomery Sc

Thank you.

Operator

(Operator Instructions). Your next question comes from George Orman from Orman Company. Please go ahead.

George Orman – Orman Company

Good afternoon gentlemen, congratulations, fourth quarter great year.

Harry Vafias

Thank you George.

Konstantinos Sistovaris

Thank you.

George Orman – Orman Company

Quick question, the recent weakness of the Japanese Yen, how does that help you?

Konstantinos Sistovaris

It helps us in the point that if we order more ships in Japan that will be slightly cheaper.

George Orman – Orman Company

And they are the premier manufacturer of those types of ships, correct?

Konstantinos Sistovaris

By far the biggest manufacturers.

George Orman – Orman Company

Okay, so at the moment everything is coming our way?

Konstantinos Sistovaris

It seems so.

George Orman – Orman Company

Okay, great. Good luck for the future and thanks for at least considering the cash dividend, I think that would help the discrepancy between book value and actual share price.

Konstantinos Sistovaris

Thank you for your suggestion.

Operator

Your next question comes from Jeff Giggin from Milwaukee Private. Please go ahead.

Jeff Giggin – Milwaukee Private

Good morning Harry.

Harry Vafias

Hi Jeff.

Jeff Giggin – Milwaukee Private

Couple of questions for you. The comments you made to Natasha about 2 to 5 potential ships to acquire in the second hand market, what were the probability be of new buildings in 2013 my impression being that those take some time to build?

Harry Vafias

As I said before if we acquire second hand ships, they will be delivered there fairly promptly for the buildings. Then if you order them in the next three months then the leverage will be in the middle of ’14.

Jeff Giggin – Milwaukee Private

That’s what I thought. In your presentation you said you have about 120 million of firepower with your cash and your unencumbered ships. Are you, was that number assuming 50% debt to cap?

Harry Vafias

Something like that, yes.

Jeff Giggin – Milwaukee Private

And finally and I appreciate your time here. You didn’t reference your product mix for Afromax at all and with regard to the situation developing in the US, is that an opportunity for more of your handy size or is this potentially an opportunity to look at larger ships?

Harry Vafias

I didn’t understand the question, are you asking your question about our (inaudible)?

Jeff Giggin – Milwaukee Private

Two questions and you seldom make any comments about your product tankers and Afromax during your presentation?

Harry Vafias

Yes.

Jeff Giggin – Milwaukee Private

Is there anything to update on those ships?

Harry Vafias

There is nothing to update because the ships have been a long term charter since we got delivery of them.

Jeff Giggin – Milwaukee Private

Fair enough. Second part of the question with regards to changes going on in the US market, is there an opportunity for StealthGas to buy larger ships or will you approach the US market with the handy sized ships that you currently operate?

Harry Vafias

I cannot predict the future, but our decision right now is to stick with what is the best and what is the best is the needles in the segment.

Jeff Giggin – Milwaukee Private

Thank you. And I appreciate your time today. And nice work for the year.

Harry Vafias

Thank you.

Operator

We don’t have any more questions at this moment sir. Please continue.

Harry Vafias

We would like to thank everybody for joining us at our conference call today and for your interest in interest our company. We look forward of having you with us again at our call for our first quarter results in May. Thank you very much.

Operator

That does conclude for today. Thank you for participating. You may now disconnect.

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