Imperial Ptrl (NASDAQ:IMPP) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below.

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View the webcast at https://edge.media-server.com/mmc/p/442uqj26/

Summary

Imperial Ptrl reported record quarterly revenue of $87.1 million for Q2 2026, reflecting a 41.2% increase from Q1 2026 and a 140% rise year-over-year.

Net income reached $34.8 million for Q2 2026, marking a 172% increase compared to Q2 2025, with a six-month net income of $62.8 million, surpassing the total profitability of 2025.

The company underwent strategic fleet expansion, adding new vessels and planning to increase its fleet size to 25 vessels by the end of the year.

Operational utilization was slightly lower at 73.5% due to strategic dry dockings, but fleet efficiency and safety have improved post-maintenance.

Imperial Ptrl remains debt-free with strong liquidity, boasting a cash reserve of around $260 million, positioning it advantageously against potential market fluctuations.

The company highlighted geopolitical tensions in the Middle East affecting tanker markets, with firm rate environments leading to increased revenues.

Management emphasized the company's undervaluation in the market despite strong financial performance and strategic growth initiatives.

Full Transcript

OPERATOR

Good day and thank you for standing by. Welcome to Imperial Ptrl second quarter 2026 financial and operating results conference call and webcast. At this time, all participants are in listen-only mode. Please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Mr. Harry Vafias, CEO. Please go ahead.

Harry Vafias, CEO

Good morning everyone and thank you all for joining us for our Q2 and six months 2026 conference call of Imperial Ptrl. I'm Harry Vafias, the CEO of the company, and joining me on the call today is Ms. Sekelari who will be discussing our financial performance. Before we commence our discussion, we'd like you all to read the safe harbor disclaimer on slide 2. In short, today's presentation includes forward-looking statements under the Private Securities Litigation Reform Act.

These statements reflect Imperial Ptrl's current expectations and beliefs. However, they are naturally subject to risks and uncertainties, meaning our actual future results could differ materially from what we discuss today. We would also like to clarify that all monetary values referenced on the call are US dollars except where explicitly noted. On slide 3, we summarize our key operational and financial highlights for Q2. The second quarter of 2026 was yet another milestone for our company, characterized by record financial results in terms of revenue, strategic fleet optimization and the commitment to a commercial strategy that continues to drive company value. Indeed, we are extremely pleased to report an all-time high quarterly revenue of 87.1 million for Q2, representing a remarkable 41.2% sequential growth from Q1 26 and an impressive 140% increase year over year. This revenue improvement, brought upon our vigorous fleet expansion along with strong markets for both tankers and bulkers, fueled the second best quarterly net income in our history at 34.8 million, up 172% compared to Q2 25.

Furthermore, our performance for the first six months of 2026 has been exceptional. Net income for the six months reached 62.8 million, which already exceeds our total net profitability for the entire 12 months of 2025, that is 50 million. In addition, our earnings per share for the six months is solid and about a quarter of our current share price. This profitability directly enhanced our liquidity, driving cash and cash deposits up to 245.2 million as of June 30.

However, our current cash base has increased further and is now around 260 million. We strive to utilize our fleet as efficiently as possible. Operational utilization for the second quarter stood at 73.5%, while lower than previous quarters. This temporary utilization decline was a strategic choice. Technical off-hire accounted for 10.7% of the total fleet calendar days as we successfully managed a concentrated schedule of six dry dockings. The completion of these dry dockings now ensures our fleet operates at maximum efficiency and safety.

Moving forward, we have another seven dry dockings to complete up until the end of the year. Moreover, we have been also very active on fleet management. From a commercial perspective, we continued on our already announced fleet expansion. On April 3rd we took delivery of the dry bulk carrier the Echo Crossfire. In the beginning of August we completed the sale of the 2007-built tanker Suez Enchanted for a profit in excess of 30 million. Not bad for a nearly 20-year-old ship.

And in addition, on August 21st we took delivery of the handy-sized bulker Outrider. Our fleet now counts 21 vessels and we have four additional vessels, three handy-sized bulkers and one product tanker to be delivered until the end of the year. Thus, in a short period of time we'll be operating a sizable fleet of 25 vessels. On slide 4, we are providing a summary of our current fleet deployment. About 57% of our fleet is currently under time charter as customary.

The majority of our dry bulk vessels are on short time charters. The commercial strategy we currently follow for our dry bulk vessels provides healthy cash flow while minimizing idle time and voyage costs. Rates for the dry sector have been firm throughout the second quarter, allowing us to enjoy solid returns from our chartering strategy. In terms of tankers, we employ five product tankers and one Suezmax tanker in the spot market, while two of our product tankers are under time charter employment ranging from short to medium term.

On slide 5, we are discussing the evolution of market rates for both tankers and dry bulk vessels. In Q2, market rates remained firm for both tankers and bulkers. Rates for MR tankers peaked in April and eased by the end of May as the Atlantic arbitrage window narrowed. Currently, MR rates are reasonably firm, fueled also by the ongoing geopolitical tension in the Middle East. Rates for Suezmaxes remained strong throughout the quarter, both globally and in the Middle East.

We did witness a retreat of rates in May due to the peace negotiation attempts following the end of the ceasefire period in July and the Houthi embargo in Saudi Arabia which disrupted trade in the Red Sea. Suezmax rates began to climb and have been at times in excess of 200,000 a day. In Q2 26, the rates for the dry bulk ships were higher than Q2 25 and Q1 26. Longer haul voyages, partially due to the Strait of Hormuz disruption along with the improvement of fundamental data from China, profitability increase of steel mills, increased bauxite exports from Guinea and rebound of coal trade, boosted both freight rates and asset values.

On slide 6 we are reviewing the tanker market. Q2 was firm for both Suezmax and product tankers. Both vessel types were affected throughout the second quarter by the geopolitical tensions in the Middle East. For Suezmax tankers, a partial reopening of the Strait of Hormuz in the beginning of the quarter brought more ships to the Middle East instead of the Atlantic. Following the end of the ceasefire period in July, we did witness a significant rise in US crude exports due to the very high SPR drawdowns.

This was translated to an increased number of Atlantic to Asia voyages which assisted to sustain ton miles, and routes for product tankers. Lost output from the Middle East increased the US Gulf–Far East CPP cargoes; as an effect Atlantic rates improved. We did witness a weaker activity east of Suez as the region's refineries were in shortage of Middle East crude hence had less CPP to export. Long-term prospects for both Suezmax and product tankers mostly depend on the Strait of Hormuz status.

Should the Strait of Hormuz remain closed for prolonged periods, the markets will be short of cargoes and rates might suffer. In addition, various Houthi attacks in the Red Sea have caused further structural changes in trade patterns. A potential reopening of the Strait of Hormuz will affect restocking volumes which is anticipated to sustain a strong tanker market for a period in excess of 12 months. In terms of tanker market fundamentals, total orderbook for Suezmax vessels stands at 30.8% with 31% of the fleet above 20 years of age.

For the MR tankers, total orderbook stands at 16% while 26% of the fleet is above 20 years of age. As evident, we do have an aging fleet for both Suezmaxes and product tankers, but rate hikes in recent years have facilitated the operation of older tonnage instead of recycling. In addition, new orders for all sizes of tankers are being placed every single. On slide 7 we are discussing the dry bulk market. Q2 was a strong quarter for the dry bulk sector.

Indeed, the BDI average for Q2 26 was close to 2,750 which is the best quarter since the fourth quarter of 2021. Overall, the dry bulk sector, unlike the tanker market, has remained rather insulated from the Middle East conflict but has greatly benefited from longer routings. At this point we need to mention that Imperial Ptrl has one dry bulk vessel stranded in the Strait of Hormuz since the end of May 26. Commodity fundamentals, although mixed, also support longer routes.

Iron ore departures to China increased in Q2 by 3% year on year, driven mostly by rise in port-side inventories and weak domestic mining output. Guinea bauxite exports to China rose 12% year on year as the government imposed an export cap which is close to 150 million tonnes. This will mostly affect long-term trade for Capesize vessels and any replacement volume required will now be imported from shorter routes, which is a benefit for smaller dry bulk ships.

Coal trade, especially thermal coal, marked a strong rebound in Q2. Thermal coal demand increased so as to compensate for the lost Middle East LNG supplies and was sustained against firmer demand stemming from India since April. Chinese coal demand rebounded ahead of the summer as news around El Niño added pressure on power demand. Smaller and mid-sized bulkers were supported by grains and minor bulk demand as Brazilian soya exports were up 10% compared to 2025.

Looking ahead, the Middle East conflict assists dry bulk vessels on longer haul voyages and increased thermal coal trading. However, high oil prices and freights add pressure on commodity traders, thus creating trade risks. The current orderbook for the handy-sized dry bulk vessels is low around 6.5% with 18% of the fleet above 20 years of age. Relatively low at 12.8% is also the orderbook for Panamax/Kamsarmax vessels with 20.5% of the fleet being above 20 years of age.

I now pass the floor to Ms. Sekelari to summarize our financial performance.

Ms. Sekelari

Thank you Harry, and good morning to all. In Q2 26, Imperial Ptrl marked a record performance in terms of quarterly revenues and the second best performance of all times in terms of profitability. Geopolitical tensions around the globe persist, thus creating volatility in the shipping markets affecting trading routes and freight rates. In Q2 26, rates for both tankers and dry bulk carriers were strong, leading to a spike in our revenues. Looking at our income statement for Q2 26 on slide 8, revenues came in at 87.1 million in Q2 26, marking 140% increase compared to revenues generated in the same period of 25.

Indeed, our daily fleet revenue in Q2 26 was in excess of 50,000 compared to 29,000 daily revenue in Q2 25. 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 an average of 6.9 vessels. As at the end of Q2 25, rates of product tankers were close to 29,000 per day while daily rates for Suezmax tankers were close to 38,000. As at the end of Q2 26, due to geopolitical tensions in the Middle East and the Red Sea, daily rates for product tankers climbed to about 31,000 while daily rates for Suezmax tankers surged in excess of 145,000.

Voyage costs amounted to 22.1 million, 14.4 million higher than in Q2 25. This increase is attributed to higher number of spot days by about 58% in conjunction with increased bunker prices. Indeed, the average Brent crude oil price per barrel for Q2 26 was about $97 while for Q2 25 the average Brent crude oil price per barrel was about $67. In addition to this, in Q2 26 we had somewhat increased ballasting activity, particularly for the vessels that underwent within the quarter for the scheduled dry docking.

Our net revenues for the quarter came in at about 65 million, marking a 154% increase between the two periods. Running costs amounted to 14.4 million, increased by 6 million due to the increase of our fleet by an average of 6.9 vessels between the two periods. Dry docking costs were quite high in the order of 7.5 million, as in Q2 26 we underwent six dry dockings. As we have already mentioned, we have another seven dry dockings to complete up to the end of 26.

EBITDA for Q2 26 came in at 41.2 million while net income at 34.8 million corresponding to a basic earnings per share of $0.70 versus 12.8 million corresponding to an EPS of $0.36 in Q2 25. For six months 26, net income came in at 62.8 million corresponding to an EPS of 1.34 with EPS for the last 12 months being close to 2, which is an outstanding yield especially when compared to our share price levels. Moving on to slide 9, let us take a look at our balance sheet for six months 26.

As of June 30th 26, our free cash including time deposits was 245 million. Our cash to date is in the region of 260 million. As mentioned, our existing liquidity was important. Cash flow generation remains robust as in six months 26 we generated an operating cash flow of 78 million. Our recent and upcoming vessel deliveries continue to enhance our fleet book value. We maintain a flexible capital structure as we are debt-free, thus face zero interest rate and finance pressures and highly liquid, placing us in an advantageous position against our peers, particularly in the event of softer market conditions.

Proceeding to slide 10, we provide the summary of our liquidity, profitability and market considerations going forward. As mentioned, we are highly liquid, maintain a solid balance sheet and continue to translate our strategic fleet expansion to profitability and growth. Yet we still remain undervalued when looking at our share price levels. In Q2 26 our average time charter equivalent per fleet voyage day was close to 71,000 for our tankers and about 15,100 for our dry bulk fleet.

This compares favorably to our cash flow breakeven levels estimated at 8,500 per day for tankers and 6,500 per day for dry bulk vessels. In terms of market considerations, the focal point is the U.S.–Iran–Israel conflict which appears to follow a stable course and seems that it will have a longer than expected duration. Recent Houthi attacks in the Red Sea add on to the geopolitical uncertainty that distorts the market. In this environment, it is not yet visible how tanker and dry bulk markets will be affected in the medium term.

In any event, Imperial Ptrl is shielded from all angles to navigate any market conditions that may arise at this stage. Our CEO Mr. Harry Vafias will summarize his concluding remarks for the period examined.

Harry Vafias, CEO

Our exceptional second quarter and first half of 26 demonstrate the power of our commercial strategy and disciplined execution. By securing record revenues of $87.1 million for Q2, expanding our fleet toward a 25 vessel target while remaining debt free, we have driven net income for the first six months to a remarkable 62.8 million, already surpassing our total profitability for the entirety of 2025. Backed by solid balance sheet with cash to date in the order of approximately 260 million and a fleet value anticipated to increase with our upcoming vessel additions, we are well equipped to navigate shifting geopolitical landscapes and Imperial Ptrl is in a prime position to produce strong results while holding a flawless balance sheet and a track record of creating value through the company's growth and strategic asset management. We 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 finding you again with us at our next call for our Q3 26 results. Thank you.

OPERATOR

This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.