Vantage (AMEX:VNTG) held its quarterly earnings conference call on Wednesday. Below is the complete transcript from the call.
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Full Transcript
OPERATOR
The increase during the six month period was primarily driven by the net IPO proceeds. We anticipate this figure will decrease by the next reporting cycle following the completion of the three acquisitions. As a reminder, these three acquisitions represent a total consideration of approximately 3.6 million to be settled entirely in cash across two installments, the first upon completion and the second on the first anniversary of the completion date. Let’s move on to slide 13. Despite navigating through a challenging market condition, our forward book has grown to 1.2 million for the six month period ended in September 30, 2025 compared to 760,000 in the same period last year. This increase was primarily due to the focus on term contracts over spot fixtures, allowing us to have more stable stream of income and greater visibility of future income. Revenue per head for the six month fiscal 2025 period was approximately 140,000 compared to 197,000 in the same period last year. The slight reduction was primarily due to the increase in non broking IT headcount coupled with additional several new brokers Currently, our IT business is not generating meaningful revenue which naturally impacts overall metrics as we invest more into this business. This is precisely why we are spinning out the IT business which benefits both the shipbroking and IT segments. By bifurcating the two, we manage costs more efficiently while we simultaneously access a broader and more robust pool of developers. The recent hiring of new brokers should be viewed as a strategic investment for future growth. We expect these investments to be generating meaningful returns over time, driving future revenue and profit growth. At present, we are focused on laying a solid foundation for sustainable long term performance. It is important to note that it will take some time before revenue per head returns to normal levels to accelerate this talent acquisition. Particularly, targeting established brokers that can contribute immediately and meaningfully will play a key role. This strategy is further supported by recent and upcoming acquisitions that enhance our capabilities. The China expansion is especially significant in this context. By entering this new market, we not only gain access to the petrochemicals market but also the S&P market, with the latter representing a higher value opportunities. This positions us to capture greater revenue potential and strengthens the overall growth trajectory of the business. To provide some additional insight into the current market condition, the headwinds we are currently facing can be grouped into three areas outlined in slide 14. First, the market remains oversupplied with fleet supply increasing faster than demand which has driven freight rates lower and reduced the number of high value pictures. This dynamic compresses earnings of ship brokers firms. Vantage’s steel flow has increased for the reporting period to offset the impact with petrochemicals and term deals increasing by 26% and 200% respectively during the six month period ended September 30, 2025 compared to the six month period ended March 31, 2025. Second, cargo flows have declined amid an industry wide effort to switch to cleaner energy. While this shift to cleaner energy does lower general seaborne demand on fossil fuels, Vantage also focuses on broking renewable energy, particularly biofuels and vegetable oils. Our diversification across five key tanker market divisions remain core strengths giving us flexibility to depending on market conditions and emerging market trends. Although lower fossil fuel demand may affect results in the short term, we believe the growing demand for renewable energy will create significant opportunities over time. Lastly, as we previously discussed, geopolitical volatility, sanctions and war risks continue to disrupt global shipping operations. These factors lead to route diversions, reduced market accessibility, higher operational risks and fragmented trade flows. For example, the US Tariffs have resulted in shorter supply chains and lower ton miles as Asia replaced US imports with Middle Eastern origin. Volatility in the product prices, especially prices being in backwardation, have also reduced the appetite for inventory price risk resulting in reduced demand for floating storage as well as smaller quantities being traded. The resulting unpredictability has also impacted shipbroker worldwide. Vantage’s strong presence in Asia and Middle east has placed us well to weather the headwinds as trade flows become more regionalized. Now moving to Slide 15 while we continue to navigate through challenging market conditions, we have established clear objectives for 2026 that are designed to position Vantage Corporation. For sustainable long term growth. First is the continued focus on global expansion into established strongholds to mitigate changes in trade flows from geopolitical volatility. We intend to pursue this through inorganic means including targeted acquisitions of brokerage firms and talent acquisition of established and experienced brokers. In addition, we plan to deepen our regional footprint through strategic investments and in high potential markets such as China and Dubai where we see significant opportunities for sustained growth and long term returns. Second is the execution of a new strategy to prioritize term contracts to build a robust forward order book. Despite the broader market volatility, the revenue decline experienced during the six month period was partially offset by the shift towards this strategy in 2026. While some market volatility is expected to persist, continued growth in our forward order book will support sustainable predictable revenue growth. Over the longer term, we will continue to expand our service capabilities across new sectors including biofuels, vegetable oils, petrochemicals we are particularly excited about the growth in the petrochemical space in China through our recent acquisitions. In addition, we will continue to evaluate adjacent sectors that are complementary to the oil tanker ship broking market we currently serve. This includes sectors including gas shipping such as LPG, dry bulk shipping and additional areas like FFAs, carbon and paper trading. Lastly, with the IT spinoff, we will be able to strategically enhance the growth of our shipbroking and IT business, manage more costs efficiently, accessing a wider talent pool to grow the IT business further.. Our team remains dedicated to delivering on these strategic priorities through 2026. As discussed throughout today’s call, While market conditions had a modest impact on financial results, the fundamentals of Vantage Corporation’s business and operations continue to remain strong. Over the past six months, we have continued to advance our strategic priority on global expansion, implemented adjustments to navigate the market volatility, and laid the groundwork to achieve our 2026 objectives. These efforts position us for long term, sustainable and profitable growth in the many years to come. As a further sign of confidence in our business and our belief that Vantage shares remain undervalued relative to the fundamentals and growth prospects, we have now executed more than half of our share repurchase program. We will continue to repurchase shares opportunistically in the open market, reinforcing our commitment to aligning our interests with those of our shareholders. We remain confident in our strategy, our people, the opportunities that lie before us. We look forward to executing our 2026 objectives and continuing to deliver value to our shareholders. This concludes our prepared remarks. We appreciate everybody taking the time to join me today. If there are any questions you may have, please contact our IR team. Their details can be found at the bottom of our earnings press release. Thank you again and have a great rest of your day. Thank you for joining us today for Vantage Corporation’s first half fiscal 2026 conference call. You may now disconnect. Sa.
Summary
Financial performance was influenced by net IPO proceeds, with future decreases expected due to upcoming acquisitions totaling approximately 3.6 million.
The forward book increased to 1.2 million from 760,000 year-over-year, driven by a shift towards term contracts for stable income.
Revenue per head decreased due to increased non-broking IT headcount, with plans to spin off the IT business for cost efficiency.
Strategic initiatives include expanding into China and Dubai, focusing on renewable energy markets, and acquisitions to enhance capabilities.
Despite market challenges like oversupply and geopolitical risks, the company is optimistic about long-term growth and continues its share repurchase program.
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.
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