IMPP Q1 2026 Earnings Transcript

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Date

Friday, May 22, 2026 at 10 a.m. ET

Call participants

• Chief Executive Officer — Harry N. Vafias
• Chief Financial Officer — Ifigeneia Sakellari

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Risks

• Management cited potential adverse "income impact of the Iran conflict on the global economy. Which might have an adverse impact on the global demand."
• The company referenced uncertainty regarding market reaction when the Strait of Hormuz reopens, stating it "still remains an unknown how the market, particularly the tanker market, will react."
• Prolonged hostilities pose threats as "Geopolitical tensions persist, creating turbulence globally and in the markets."
• Low newbuilding orders alongside "an aging fleet" could lead to future vessel shortages and possible supply imbalance risks.

Takeaways

• Revenue -- $61.7 million, reflecting a 21% sequential increase and 92% year-over-year growth.
• Net income -- $28 million, the company's second highest quarterly performance.
• Earnings per share (EPS) -- $0.60 basic EPS for the quarter.
• Operating income -- $26.5 million, up $12.8 million (94%) quarter over quarter and $18.7 million (240%) year over year.
• EBITDA -- $34.4 million for the period.
• Net income margin -- 45% for the quarter.
• Operating cash flow -- $387 million generated during the quarter.
• Cash & cash equivalents -- $213 million at March 31, 2026, compared to $179 million at year-end 2025.
• Fleet size -- 21 vessels on the water after delivery of "Crossfire" in April, with 5 more vessels contracted for delivery through Q3 2026.
• Fleet utilization -- 88.7% overall, with tankers at 87.8% and dry bulk vessels at 89.5%.
• Daily net revenue (tankers) -- Approximately $43,000 per day versus $27,000 per day in Q4 2025.
• Daily net revenue (dry bulk) -- Approximately $16,000 per day.
• Spot vs. time charter activity -- 59% of fleet days on time charter, 40% on spot contracts.
• Share buybacks -- 856,000 shares repurchased for $3.8 million through May 21, 2026.
• Average daily rates -- $29,000 for MR product tankers and nearly $95,000 for Suezmax vessels in the spot market.
• Net asset value per share -- Approximately $13, with the company valued at a discount exceeding 60% to NAV.
• Debt status -- Company remains debt free, even after fleet expansion.
• Capital commitments -- $130 million in outstanding obligations for vessel acquisitions, with $52 million due by the end of Q3 2026 and $78 million due by year-end 2026 or early 2027.
• Breakeven charter rates -- Estimated at $8,500 per day for tankers and $6,500 per day for dry bulk vessels.
• Market conditions -- Tanker rates surged to over $200,000 per day for Suezmaxes and close to $60,000 per day for product tankers at the end of the quarter.
• Industry context -- Approximately 10% of compliant tanker fleet stranded in the Middle East due to Strait of Hormuz closure.
• Order book and fleet age (Suezmax & MR) -- Suezmax order book at 25.6% with 16% above 20 years old; MR product tanker order book at 15.8% with 20% above 20 years old.
• Dry bulk market indices -- BBI Supramax PC index up 40.3% year over year; BDI Handysize Index up 36.7% year over year.

Summary

Imperial Petroleum (NASDAQ:IMPP) reported its second-best quarterly earnings, with notable acceleration in both revenue and net income attributed to surging tanker rates and effective fleet expansion. Management emphasized a strategic focus on share repurchases and debt avoidance, resulting in substantial liquidity and a capital structure positioned for ongoing vessel acquisitions. Significant market rate volatility and global disruptions, particularly in the Middle East, directly benefited the company's operational and financial results. The company's average daily revenues for both tanker and dry bulk segments surpassed their respective breakeven levels, pointing to continued operational leverage. Management signaled near-term fleet growth and highlighted that the current share price reflects a deep discount to net asset value, potentially offering value to shareholders.

• March 2026 monthly net revenue was approximately 50% higher than in February 2026, showing sensitivity of results to acute market events.
• "International Energy Agency took the decision at the beginning of March to release 400 million barrels of oil and refined products," which influenced global shipping conditions.
• Wheat trade and Guinea bauxite exports to China registered 18% annual increases, supporting the dry bulk market's upward trajectory.
• Coal shipment trends shifted as Korea replaced lost demand from China and India, while Algerian countries increased imports after oil and gas disruptions.

Industry glossary

• MR product tanker: Medium-range vessel typically transporting refined petroleum products, usually with a capacity around 45,000–54,999 deadweight tons.
• Suezmax: A class of tanker designed to fit through the Suez Canal, typically carrying 120,000–200,000 deadweight tons of crude oil.
• Spot market: Shipping contracts arranged for immediate or short-term transport, often at prevailing daily market rates.
• Time charter: Vessel leasing arrangement for a fixed period, with the charterer controlling cargoes and destinations within agreed terms.
• BBI Supramax PC Index: Benchmark rate index tracking freight rates for Supramax dry bulk vessels transporting major commodities.
• BDI Handysize Index: Shipping index measuring cargo rates for Handysize dry bulk carriers trading globally.
• Voyage costs: Expenses related to a specific voyage, including fuel, port charges, and canal fees.
• Net asset value (NAV) per share: Value per share of a company calculated by subtracting total liabilities from total assets and dividing by shares outstanding.

Full Conference Call Transcript

In slide 3, we summarize our key operational and financial highlights for Q1 26. The year 2026 commenced in an extremely favorable way for Imperial Petroleum. Our enhanced fleet of tankers and dry bulk ships fully capitalized upon the firm rates prevailing throughout the period. This quarter with revenues of $61.7 million and a net income of $28 million, we marked our second best quarterly performance in our history. We view our results as a solid proof that our strategic decision to expand our fleet was sound as a larger fleet enables us to leverage favorable market conditions and general material results.

The tension in the Middle East, which commenced close to the February 2020 brought upon a global turbulence and heavily affected seaborne trade. Closing of the Strait of Hormuz tightened the tanker market, causing tanker rates to boom. it is worth mentioning that our daily net revenue from tankers dramatically increased in Q1 2020 6 to about 43 thousand a day compared to 27 thousand a day in Q4 25. Dry bulk market also remained firm. Ardennium at revenue from our dry bulk ships increased in Q1 2020 6 to about 16 thousand.

Looking briefly at our operational highlights, our fleet operational utilization came in at 88.7%, a bit lower than in Q4 25 due to increased ballasting activity of our vessels traveling to their next employment. Looking at our fleet subsegments, operational utilization for Q1 26 was 87.8 for our tankers, and 89.5 for our dry vessels. About 59% of the total fleet calendar days in Q1 2020 6 were dedicated to time charter activity, while the remaining approximately 40% of spot activity, Following the delivery of our dry bulk vessel to Postmarvel in January 2020. In April 26, we took delivery of a handysize dry bulk ship, the Crossfire, increasing our fleet on the water to 21 vessels.

Providing more color on our financial performance, our revenues of $61.7 million were 21% higher than in Q4 25, and about 92% higher compared to the same period of 2025. The increase of our operating income was impressive. In Q1 26, income from operations came in at 26.5 million marking a 12.8 million increase or 94% against Q4 25 and 18.7 million rise or 240% compared to Q1 25. As already mentioned, our net income of 28 million was our second best performance of all times. The basic earnings per share generated in 1 single quarter was in the order of $0.60.

Based on our current share price levels gives us an earnings yield for the quarter in excess of 12%. Our profitable operations continue to fuel our liquidity. As of March 31, 2026, our cash and cash equivalents, including time deposits, were about 213 million versus a 179 million as of end of year 25. Our activity on the share buyback scheme has been robust as to date the company has repurchased up to May 21, a total of 856 thousand common shares for an aggregate amount of about 3.8 million. On Slide 4, we are providing a summary of our current fleet deployment About 48% of the fleet is currently under time charter.

We employ 6 MR product tankers and 2 Suezmax vessels in the spot market, capitalizing on the prevailing strong market environment. and achieving average daily rates of about 29 thousand per day for MR ships close to 95 thousand per day for Suezmaxes. In addition, 1 MR product tanker is employed under a period charter through September 2027. As customarily, the majority of the dry bulk ships are on short term time charters. The commercial strategy we currently follow for our dry bulk vessels provides healthy cash flow while minimizing idle time and voyage cost. On Slide 5, we are discussing the evolution of market rates for both tankers and bulkers.

Q1 26, market rates surged for tankers and strengthened further for drybulk ships. Even before the US-Iran Israel conflict, outbreak towards end of February 2026. Tanker rates were strong at the back of added OPEC The return of Venezuelan cargoes and long haul trades for product tankers from the Atlantic to the Pacific so as to meet shortage supply in Asia. The blockage of the Strait of Hormuz led to oil trade disruptions, longer haul voyages, oil supply shortages, and increase of risk premiums leading to a spike in tanker rates.

Indeed, at the end of Q1 26, rate for Suezmaxes were in excess of 200 thousand a day, while rates for product tankers were close to 60 thousand a day. For the dry bulk ships, the positive trend witnessed in Q4 25 continued throughout the first quarter of 2026. Global shipment growth momentum was supported in Q1 by the uncertain macroeconomic environment, the congestion of the Panama Canal recently arising coal demand. it is interesting to know that as of the end of Q1 2026, the BBI Supramax PC index was up 40.3% year on year, while the BDI Handysize Index was up 36.7%.

Touching briefly upon the current levels of market rates, tanker rates are still firm but have undergone a degree of normalization, particularly during the ceasefire period in April, which eased for a brief period the bottleneck of vessels at the Strait of Hormuz. Following April 20, outage for tankers picked up as an uptick in hostilities in the area resume. For the dry bulk ships, rates have picked up further and are now close to $20 thousand per day, mostly due to gas supply shortages has increased market demand for coal. Market update on Slide 6.

In Q1 26, the disruption in the Middle East was a key focal point of the shipping industry, heavily affecting all shipping segments, but especially tankers. The blockage of the Strait of Hormuz has caused major trade About 10% of the compliant tanker fleet was stranded in the Middle East in Q1, causing vessel shortage, output supply shortages and oil prices to surge. In this environment, the International Energy Agency took the decision at the beginning of March to release 400 million barrels of oil and refined products. For the crude tankers, markets were firm even before the Middle East conflict at the back of strong cargo supply from rising Middle East Gulf out output and increased Chinese demand.

The Iran US-Israel conflict brought upon a collapse in Hormuz exports and Middle East gas production shut ins. This caused significant repositioning of vessels from the Pacific and an increase of Atlantic exports to Asian buyers. Product tanker market essentially picked up after the outbreak of the Middle East conflict. The closing of the Strait of Hormuz have shut off the Middle East CPP exports, creating a shortage of good feedstock to Asian refineries. And this led to an increase in global product prices, particularly in the Pacific for jet oil and arbitrage opportunities especially between the Atlantic and the Pacific.

Looking ahead, the potential ceasefire leading to the reopening of the Strait of Hormuz prospects of increased demand for inventory building. Middle Eastern producer will commence production above pre war levels while we may see sanctions lifted on Iran thus adding more balance to the market. In terms of tanker market fundamentals, total order book for Suezmaxes, stands at 25.6% with 16% of the fleet above 20 years of age. For the MRs, total order book stands at 15.8% while close to 20% of the fleet is above 20 years of age.

On slide 7, discussing the drybulk market, Q1 had a strong start in both volumes and rates in spite of the seasonal factors such as the Chinese New Year which typically causes a market slowdown Global shipment volumes increased year on year both by vessel and commodity types, Coal trade marked a marginal increase in the first month of 2026 particularly due to reduced imports from China and India, offset by the rise of imports from Korea. Following the outbreak of the US-Iran-Israel conflict Algeria countries are boosting coal fired generation to respond to the disruptions to oil and gas supplies. As the countries need to replace lost Middle East LNG cargoes.

This increased resilience in coal is expected to continue in the future supporting a rebound in coal trade in Q2 26. Iron ore departures to China were up in Q1 by about 4%, while Guinea bauxite exports to China stood strong marking an 18% year on year increase. Wheat trade rose by 18% year on year supported by elevated prices And looking ahead, there is a concern about the income impact of the Iran conflict on the global economy. Which might have an adverse impact on the global demand. The global dry bulk fleet continues to expand growing 3% in 2020 and a further 1% in 2026.

However, reduced shipbuilding orders, but most importantly, an aging fleet, Close to 16% of the fleet is currently above 20 years of age. In conjunction with low demolition could bring about a future supply imbalance as older vessels retire without sufficient replacement. A vessel supply shortage is expected to support market rates. I will now pass the floor to Mrs. Sakellari to summarize the financial performance.

Ifigeneia Sakellari: Thank you, Harry, and good morning to all. In Q1 26, Imperial Petroleum marked a record performance. This quarter, we generated the second highest profitability of all times. Market conditions were favorable as rates, particularly for tankers, peaked. Dry bulk rates were firm during the whole quarter, so we managed to capitalize upon the sizable dry bulk fleet we operate. Looking at our income statement for Q1 26 on Slide 8, revenues came in at 61.7 million in Q1 2020 marking a 92% increase compared to revenues generated in the same period of 2025.

This increase is mainly due to a noticeable increase in market rates for both product and Suezmax tankers along with the increase of our fleet by 8 vessels. As of the end of Q1 25, rates for product tankers were close to 26 thousand per day, while daily rates for Suezmax tankers was close to 47 thousand. As of the end of Q1 26, though, following the outbreak of the Middle East conflict, daily rates for product tanker climbed to about 56 thousand while daily rates for Suezmax tankers surged in excess of 260 thousand. Voyage costs amounted to $12.8 trillion higher than in Q1 2020 5.

This increase is attributed to higher number of spot days by about 25% in conjunction with increased port expenses due to higher number of tranches to the Suez Canal, mainly for the Suezmax tankers. Our net revenues for the quarter came in at about 49 million compared to $21.6 million in Q1 2020 5. This is equivalent to a 127% increase. Our net revenue generation peaked in around March following the Middle East conflict outbreak. Indicatively, our monthly net revenues generated in March 2026 were about 50% higher than our net revenue generation within February 2026.

Running costs amounted to 11.3 million increased by 4.1 million due to the increase of our fleet by an average of 8 vessels between the 2 periods. EBITDA for the first quarter of 26 came in at 34.4 million while net income of 28 million corresponding to a basic earnings per share of 60¢ versus 11.3 million corresponding to an EPS of $0.32 in Q1 2020 5. Moving on to Slide 9, let us take a look at our balance sheet for the first quarter of 26. As of March 31, 2026, our free cash including time deposit was 213 million. Our cash to date is in the region of 2020 221 million.

We have a capital commitment for 7 vessels, 2 recently delivered and the remaining 5 to be delivered up to Q3 26, which total about a 130 million. Of this amount, about 52 million is expected to be paid through the end of Q3 26, while the remaining 78 million is due by the end of 26 or early 27. This staggered payment profile provides ample time to further enhance our cash position through our ongoing cash flow generation from our core operations.

Liquidity generation remains robust, As in Q1 2020 6, we generated an operating cash flow of $387 million At this stage, we would like to point out the basis management's estimate, most recent fleet market values, and basis our Q1 26 financials and number of shares outstanding as of the end of Q1 26 we concluded that our net asset value per share is close to $13 Our current share price is about $5, hence, we trade at a discount in excess of 60% while being highly profitable, debt free, and while the average price to net asset value discount of industry peer companies is about 20%.

In other words, Imperial Petroleum is heavily undervalued despite the more robust balance sheet. Proceeding to Slide 10, we provide a summary of our liquidity, profitability, and market considerations going forward. We have a significant cash base, which is enhanced every quarter through our profitable operations. We remain debt free, but yet we have expanded our fleet significantly. Our profitability remains strong as in Q1 2020, our net income margin climbed to 45%. In Q1 26, our average time charter equivalent per fleet voyage day was close to 43 thousand for our tankers and about 16 thousand for our dry bulk fleet.

This compares favorably to our cash flow breakeven levels estimated at $88.5 thousand per day for tankers and at 6.5 thousand per day for dry bulk vessels. Terms of market considerations, the focal point is the US-Iran-Israel conflict, which appears to have a longer than expected duration. It still remains an unknown how the market, particularly the tanker market, will react when the Strait of Hormuz is reopened for trade and what will happen to the dark fleet in the event that the Russian Ukraine conflict comes to an end.

Concluding our presentation, we repeat once more that we are extremely pleased with our results, our proven consistency in generating profits, and most importantly, our support to our share price to our active share buyback program and hope that these dynamics will soon correct our share price levels. At this stage, our CEO, Mr. Harry Vafias, will summarize and conclude his remarks for the period examined.

Harry N. Vafias: We are extremely pleased with our first quarter 2020 results. As with a net income of $28 million corresponding to a basic EPS of $0.60 We generated the second best quarterly profitability in our company's history. Geopolitical tensions persist, creating turbulence globally and in the markets. The effect, particularly from the Middle East Gulf conflict, caused tanker markets to peak while market rates for the dry bulk segment firmed.

In this environment, we successfully capitalized upon our sizable fleet, We see that our expansion strategy is paying off and hope that through our active share repurchase scheme, we will assist our share price to correct itself so as to reflect the true value of the company of 21 vessels on the water and 5 more to be delivered soon. Current liquidity in excess of 220 million is continuously profitable, and most importantly, debt free. We would like to thank you all for joining us at our call today and for your interest and trust in our company, and we look forward to having you with us again at our next call for Q2 26 results. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

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