C3is (NASDAQ:CISS) 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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Summary

C3is reported a significant increase in financial performance for Q2 2026, with voyage revenues up 124% year-over-year to $24 million, and net income reaching $10 million compared to a loss in the previous year.

The company has expanded its fleet capacity by 387% since inception, with recent acquisitions including two product tankers, reinforcing its strategy of growth and diversification without incurring bank debt.

C3is maintains a robust cash position of $48 million as of July 2026, sufficient to cover future capital expenditures, and continues to charter to high-quality clients while avoiding potential US tariffs on Chinese-built vessels.

The Aframax and product tanker segments have shown strong performance, with time charter equivalent rates significantly increasing year-over-year, and market conditions favoring continued growth.

Management expressed confidence in maintaining profitability and financial strength in the second half of 2026, emphasizing the company's strategic focus on disciplined growth and fleet quality.

Full Transcript

OPERATOR

Thank you for standing by. Welcome to the C3is Q2 2026 financial and operating results webcast and conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dr. Diamantis Andreotis. Please go ahead.

Dr. Diamantis Andreotis, CEO

Good morning everyone, and welcome to the C3is second quarter of 2026 earnings conference call and webcast. This is Dr. Diamantis Andreotis, CEO of the company. Joining me on the call today is our CFO, Nina Pindia. Before we commence our presentation, I would like to remind you that we will be discussing forward-looking statements which reflect current views with respect to future events and financial performance and are based on current expectations and assumptions which by nature are inherently uncertain and outside of the Company's control at this stage.

If you could all take a moment to read our disclaimer on slide two of this presentation. I would also like to point out that all amounts quoted, unless otherwise clarified, are stated in US dollars. We have today released our earnings results for the second quarter of 2026, so let's proceed to discuss these results and update you on the company strategy and the market in general. Please turn to slide 3 where we present the impressive results achieved by C3is for the first six months of the year.

Our voyage revenues were $24 million for Q2 2026 compared to $10.7 million for Q2 2025, an increase of 124%. For the first six months of the year, our revenues were $35.6 million compared to $19 million in 2025, an increase of 84%. Our net revenues were $17 million for the quarter, an increase of 185% compared to Q2 2025. For the first half of the year, our net revenues were $27.4 million compared to $11.8 million in 2025, an increase of 132%. Our net income was nearly $10 million for the quarter, compared to a loss of $5 million in 2025, a 287% increase.

For the six months we had net income of $13 million compared to $2.6 million last year, a whopping increase of 409%. Our adjusted net income was $9.8 million for the quarter, compared to $1.1 million in 2025, a massive increase of 755%. For the first six months of 2026, our adjusted net income increased by an impressive 562% to $15.3 million compared to $2.3 million in 2025. By the end of June 2026, our cash balance went up 123% from year end 2025 to $33.2 million.

By the end of July 2026, the balance went further up to $48 million, an increase of 222% from year end 2025. At $12 million, our EBITDA went up a remarkable 426% in Q2 2026 compared to negative $3.7 million for Q2 2025. For the six-month period, our EBITDA jumped by 176% to $16.7 million compared to $6 million for the six months of 2025. On slide 4 we summarize and highlight the company's performance for the second quarter of 2026. The time charter equivalent rate of our fleet, which is the voyage revenues less voyage expenses divided by the voyage days, increased by 145% compared to Q2 2025, reaching $40,300.

The TCE rate of our Aframax tanker for the same period was $133,500, an increase of 202% compared to Q2 2025. For the first six months of 2026, the TCE rate of our fleet increased by 125% compared to the first six months of 2025, reaching $36,800. The TCE rate of our Aframax tanker for the same period was $105,700, an increase of 151% compared to the first six months of 2025. Following on the vessel strategy of growth and diversification, C3is has had five vessel acquisitions since inception: an Aframax oil tanker in 2023, a bulk carrier in 2024, and two product tankers in 2026.

We have thus increased our fleet capacity by 387% compared to our fleet when we commenced operations. Our capital expenditure for the two product tankers delivered this year is $39.78 million. This will become due in January 2027. As of July 2026, our cash balance was $48 million, amply meeting our future financial obligations. As of June 30, 2026, the average age of the fleet was 16.8 years, including the new additions. None of our fleet are Chinese built, hence no risk of potential U.S. tariffs. Our EPS for the second quarter of 2026 was 353.87 and 483.39 for the first six months of 2026. Our net asset value per share for the first six months of 2026 was 12.83. Using the share price at closing on August 25th of 2.67, we were trading at a discount of 380%. We had two public offerings this year. The first one was an ATM agreement in February 2026 with $2.7 million gross proceeds so far. The second one was a share offer in July 2026 with gross proceeds of $6 million.

Slide 5 shows the Handysize demand and the time charter average rates. In January–June 2026, global exports of all dry bulk commodities on handy/supramax tonnage reached 910.7 million tonnes. The iron ore picture is bearish on price and bullish on distance. Chinese steel demand remains subdued and the benchmark price has eased towards the low 90s per tonne, and yet the freight rate is positive. The ramp-up of Simandou and continued West African volumes lengthened average hauls, showing ton-miles can grow even as the headline price softens.

Guinea is expected to become one of the world's leading producers of iron ore. The high-grade Simandou iron ore is suitable for conversion into steel via less carbon-intensive methods. Coal is regionally divided. Chinese seaborne thermal imports have softened on strong domestic output and hydro, while demand across the rest of Asia Pacific has firmed, and Gulf-related energy prices have made seaborne coal more competitive for ASEAN buyers. The Middle East conflict has opened a forward dimension that did not exist at the start of the year, with a liquefied natural gas shortfall of around 35 million tons this year after damages to the Gulf export infrastructure. Gas-exposed power systems in Japan, South Korea, Taiwan, and Southeast Asia are running coal harder and deeper. Estimates point to an additional 70 to 90 million tons of Asia Pacific thermal coal demand in 2026, with China comparatively insulated by its low gas penetration. Grain and oilseeds are resilient, and soybean trade is forecast at about 189 million tons in 2026–2027, a fresh high, with Brazil alone exporting over 117 million tonnes and China importing around 114 million.

Rice trade is at a record, with India accounting for about 40% of exports. Minor bulks and bauxite remain quite structural support. The signal shift in tone from maximizing volume to preserving value marks a change after years of record growth. Indonesia pulls the other way over the long run. Its 2023 rocks-high tax for bauxite took it out of the seaborne export market, and the domestic refinery build-out is lifting its bauxite requirements from around 15 million tonnes in 2025 towards 25 million this year, with mine output lagging, so a future seaborne import pool cannot be ruled out.

For the rates, several factors weigh beneficially on the dry bulk market. The stronger Far East demand for coal is a ton-mile support for the segments that carry the trade. Coking coal has been the firmer subsegment, with Chinese coking coal and coke prices reaching the highest since late 2024 and Indian metallurgical imports up about 32% in 2025. The adoption of China's Five Year Plan in March 2026 covers 2026 to 2030 and rests on high quality development, technological self-reliance, stronger domestic demand, and a deeper green transition.

For dry bulk it matters less as a stimulus signal than as confirmation of where Chinese commodity demand is heading and reinforces the distance-over-price thesis. As steelmakers urgently seek to reduce carbon emissions, demand is increasing for higher-grade, lower-impurity iron ore, the essential feedstock in the production of steel. The Simandou mine is a very large high-grade iron ore deposit in Guinea. The mine holds an estimated 2.4 billion tons of ore grading 65% iron, making it one of the largest untapped iron ore resources in the world at 2.3 billion tons.

The project is the world's most capital-intensive mining project, with China and Singapore owning 80% of the mining rights. El Niño impacted the Panama Canal, resulting in a lower level of water, thus forcing shipping through the routes of United States Gulf and East Coast grain and coal towards longer voyages, which is ton-mile positive. A notable threat for the next half is India, where a weak monsoon concern has already pushed the country to import soybeans, a reminder that the El Niño transmission into agriculture is beginning to register.

The major Middle East conflict and disruption around the Strait of Hormuz have reshaped the shipping market, yet dry bulk has stayed relatively insulated and has in places benefited from longer routings. Slide 6 shows the Aframax/LR2 rates and age. The spot rates for Aframax tankers are currently experiencing fluctuations based on current market conditions. North Sea to Continent June 2026 average rate recorded was 116,749 per day, the highest percentage increase compared to the average rate over the last five years, with an average daily spot rate of 34,727 over the last five years.

This was an increase of 236%. The highest average spot rate from the last five years was on the Med–Med route at 37,316. The conflict in the Middle East has stranded tankers and throttled global trade, but China and Russia have been gearing up for what could be a record season along the Northern Sea Route. Disruptions to trade due to fighting around the Red Sea and the Strait of Hormuz may push the thinking dynamics along the Northern Sea Route as the safest and most reliable and efficient route.

Due to the deepening economic and geopolitical ties between Russia and China, transits along the Northern Sea Route hit a record high last year, hinting at a new transit milestone. On the Aframax fleet, by the end of the second quarter of the year there was a 3.51% increase in the total fleet. The global Aframax fleet now stands at 1,239 vessels, of which 291 vessels are over 20 years of age, accounting for 24% of the total number of vessels. With a starting tally of 1,197 vessels, the current fleet represents a change of 3.51% in vessel number and around 3.6% in deadweight over the years.

So far over the last quarter the fleet has increased by 17 vessels. The age of our Aframax tanker was 15.94 years by the end of Q2 2026. The highest number of Aframax tankers are in the category of 15 to 20 years, which is around 28%. Slide 7 shows the product tanker fleet structure and average rates. The coated product tanker fleet in the size range 30,000 to 119,000 deadweight currently numbers 3,685 trading units for a total of 216.5 million deadweight.

The MR2 segment is the largest numerically, 54% of the total fleet with about 1,986 units. The general outlook for MR2 tankers is structurally firm, driven by strong ton-mile demand, aging global fleets, and geopolitical trade disruptions. Ton-mile demand, geopolitical sanctions, and shifting refining hubs continue to alter trade routes, increasing voyage length and favoring flexible MR2 tonnage. Fleet aging and replacement: roughly 33% of the existing MR2 fleet is 16 years or older, which supports long-term recycling and newbuild demand.

Product tanker rates had another strong quarter. April started spectacularly with MR2s briefly averaging over 70,000 per day globally thanks to 100,000 per day rates in the Atlantic. There was however a significant slowdown after April, with MR2s falling to 30,000 per day by July—still healthy but unspectacular. Rates on routes out of the MEG were largely redundant given the lack of liquidity. Product tanker rates remained well supported although momentum has become more uneven across vessel classes and regions.

MR2s are seeing a more balanced setup with rates lower but still firm versus historical levels. The near‑term outlook is still shaped by Hormuz. Reopening of the Strait of Hormuz should support volumes and utilization, but this is more a recovery of lost activity than the new ton‑mile impulse. Overall product tanker fundamentals remain supported, with MR a more balanced market with a rise in supply pressure. Slide 8 shows the fleet of C3is at the end of Q2 2026.

C3is owned and operated a fleet of three Handysize dry bulk carriers, one Aframax oil tanker, and one product tanker. As previously announced, the company has acquired two product tankers, one of which, the Clean Fury, was delivered at the beginning of Q2 2026. The second product tanker, the Clean Reaper, was delivered to the company in Q3 2026. With these additions the fleet has increased its capacity to 311,431 deadweight, an increase of 387% from inception.

All vessels have had their ballast water systems already installed, and all the vessels are unencumbered and currently employed on short‑ to medium‑term period charters and spot voyages. None of the vessels were Chinese built, hence not affected by the ongoing threat on tariffs, and are of superior quality. Slide 9 shows a sample of the international charterers with whom the company has developed strategic relationships and has experienced repeat business.

Repeat business highlights the confidence our customers have for our operations and the satisfaction of the services we provide. The key to maintaining our relationships with these companies are high standards of safety and reliability of service. I will now turn over the call to Nina Pindia for our financial performance.

Nina Pindia, CFO

Thank you, Diamantis, and good morning to everyone. Please turn to slide 10 and I will go through our financial performance for the second quarter and the first half of the year 2026. We achieved revenues of $24 million in Q2 26 compared with $10.7 million for Q2 25. This was an increase of 124%. For the first six months of 26, revenues were $35.6 million compared with $19.4 million for six months 25, representing an increase of 84%. Net revenues were $17 million for Q2 26 compared with $6 million for Q2 25, up 185%.

For the first six months of 26, net revenues were $27.4 million compared with $11.8 million for the six months of 25. This was an increase of 132%. Our income from operations was $9.7 million for Q2 26 compared with $1 million for Q2 25, up 820%. For six months 26, our income from operations was $15 million compared with $2.3 million for the same period of 25, representing an increase of 554%. Our net income was $10 million for Q2 26 compared to a loss of $5.3 million for Q2 25, an increase of 287%.

For six months 26, our net income was $13.2 million compared with $2.6 million for six months 25, up 409%. Our EBITDA was $12 million for Q2 26 compared to negative $3.7 million for Q2 25, up 426%. For six months 26, EBITDA was $16.6 million compared with $6 million for six months 25, up 176%. We recorded an unrealized loss on warrants of $2 million for the first half of the year. This is a non‑cash item and does not reflect our operational performance.

Our adjusted EBITDA was therefore $11.8 million for the quarter compared with $2.8 million in 2025, an increase of 325%. For the six months of 26, the adjusted EBITDA was $18.7 million compared with $5.8 million in 25, an increase of 226%. Our adjusted net income was $9.8 million for the quarter compared with $1.1 million in 25, up 755%. For the six months, the adjusted net income was $15.3 million compared with $2.3 million in 25, up 562%. Turning to slide 11 for the balance sheet, we had a cash balance of $33.2 million, an increase of 123% from year end 25.

Our cash balance by the end of July 26 was $48 million, up 222% from year end 25. Our capex on the two newly acquired product tankers is $39.78 million and is due in January 27. Halfway through the year, we already have ample cash to cover for this payable during January next year. Other current assets consisted mainly of receivables of $11.7 million, of which $9 million has already been received to date, and inventories of $3.2 million, which consists of bunkers and lubricants on board the vessels.

At the end of Q2 26, the vessels' net value was $96 million; vessels' market values were $123 million. Payable to related party of $24.5 million mainly represents the balance due on the product tanker Clear that was delivered to the company in Q2 26. The warrant liability of $1.3 million relates to the net fair value difference on non‑exercised warrants as of June 30, 2026. This is a non‑cash item. Our shareholders' equity is at a robust $114.6 million as of Q2 26 compared to $95.1 million as of year end 25.

Concluding the presentation, on slide 12 we outlined the key variables that will assist us progress with our company's growth. Owning a high‑quality fleet reduces operating costs, improves safety, and provides a competitive advantage in securing favorable charters. We maintain the quality of the vessels by carrying out regular inspections both while in port and at sea and adopting a comprehensive maintenance program for each vessel. None of our vessels were built in Chinese shipyards; therefore, any potential US tariffs on Chinese‑built ships are not expected to have any impact on our fleet. The company's strategy is to follow disciplined growth with in‑depth technical and condition assessment review. Equity issuances will continue as management is continuously seeking a timely and selective acquisition of quality non‑Chinese‑built vessels, with current focus on short‑ to medium‑term charters and spot voyages. Following on with this strategy, the company has added two product tankers to the fleet, one of which was delivered at the start of Q2 26 and the second one in Q3 26.

The expansion and diversification of our fleet has positioned the company to capitalize on strong charter market conditions. We always charter to high‑quality charterers such as commodity traders, industrial companies, and oil producers and refineries. Despite having increased our fleet by 387% since inception, the company has no bank debt. No interest were charged by the affiliated sellers on the purchase prices of the Afra Pearl 2, the Eco Spitfire, and the two recently acquired product tankers.

Our upcoming capex obligation of $39.78 million due on the two product tankers and payable in January 27 is already covered by our cash balance at this stage. Our CEO, Dr. Diamantis Andreotis, will summarise the concluding remarks for the period examined.

Dr. Diamantis Andreotis, CEO

For the first six months of 2026, we reported net income of $13.18 million, an increase of 409% from 2025; adjusted net income of $15.28 million, an increase of 562% from 2025; EBITDA of $16.6 million, representing an increase of 176% from 2025; and adjusted EBITDA of $18.7 million, an increase of 226% from 2025. These numbers speak for themselves as to the remarkable results achieved by our company. They prove that the strategy of expansion and diversification was a lucrative one and we have built a debt‑free fleet that showed the tangible path to rapid growth, exploited the current market conditions, and accomplished such a performance.

We are confident that the second half of the year will mirror the first half as our expansion efforts are projected to boost profitability, fortify financial strength, and introduce flexibility vital for C3is' future operational strategies. We would like to thank you for joining us today and look forward to having you with us again at our next call for the results of the third quarter of 2026.

OPERATOR

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

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.