[Management View]
Imperial Petroleum reported a significant fleet expansion, adding seven dry bulk ships, increasing the fleet by 56% to a total of nineteen non-Chinese-built vessels. Despite late-quarter deliveries limiting immediate earnings impact, the company achieved net income of $12.8 million, with basic earnings per share of $0.36, marking a 13% sequential rise in profitability from Q1 2025. Management emphasized strong liquidity, robust cash generation, and a debt-free capital structure, framing the current share price as deeply undervalued against internal net asset value estimates.

[Outlook]
The company anticipates further earnings impact from fleet expansion in future periods. Management remains optimistic about market rates for both tankers and bulk carriers, which are currently favorable. They plan to utilize the fleet at full speed in the second half of 2025 to produce better results.

[Financial Performance]
Revenue for Q2 2025 was $36.3 million, declining by $22.8 million compared to Q2 2024 due to lower market rates. Daily Time Charter Equivalent averaged $20,700, down from $35,200 in Q2 2024. Operating cash flow for the first half of 2025 was $42 million, with end-of-period cash and equivalents at $212 million. EBITDA for Q2 2025 was $17.1 million, and for the six-month period, it was $31.8 million.

[Q&A Highlights]
Question 1: How did the fleet expansion impact earnings, and what are the future implications?
Answer: The fleet expansion added seven dry bulk ships, increasing the fleet by 56%. Most deliveries occurred late in the quarter, limiting immediate earnings impact. Future implications include increased earnings potential as these vessels contribute more fully to operations.

Question 2: Can you elaborate on the geopolitical impacts observed during Q2 2025?
Answer: The brief Israel-Iran War in June led to a spike in tanker rates and market volatility. This conflict affected market sentiment due to the high risk of trade disruptions.

Question 3: How does the current share price compare to the company's valuation?
Answer: Management estimates net asset value per share at about $13.5, nearly four times the current market price, indicating a disconnect between fundamentals and market perception.

Question 4: What are the key drivers for dry bulk segment growth?
Answer: Departures in the Guinea-China bauxite trade rose 41% in the first half of 2025 compared to the same period last year, supporting dry bulk segment growth.

Question 5: What are the expectations for market rates in the second half of 2025?
Answer: Market rates for both tankers and bulk carriers are currently favorable. The company hopes to take advantage of these rates in the second half of 2025.

[Sentiment Analysis]
Analysts and management maintained a cautiously optimistic tone, highlighting operational resilience and strategic flexibility despite challenging market conditions. Management expressed confidence in the company's undervaluation and future growth prospects.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 |
|--------|---------|---------|
| Revenue | $36.3M | $59.1M |
| Net Income | $12.8M | N/A |
| Daily TCE | $20,700 | $35,200 |
| EBITDA | $17.1M | N/A |

[Risks and Concerns]
Geopolitical tensions, such as the Israel-Iran conflict, and trade disruptions related to Russia and Iran were cited as sources of market volatility. The company also faces risks from potential rate effects due to global geopolitical developments.

[Final Takeaway]
Imperial Petroleum's Q2 2025 earnings call highlighted a significant fleet expansion and strong financial performance despite a challenging market environment. The company's strategic focus on maintaining a debt-free balance sheet and robust liquidity positions it well for future growth. Management's emphasis on the undervaluation of the company's share price suggests potential for increased investor interest as market conditions stabilize. The outlook for the second half of 2025 remains positive, with favorable market rates expected to drive improved results.