Q3 2019 Earnings Call

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Chief financial.

Sir.

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Our stockholder Dr. Nelson.

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Commercial director, David Moran, managing director, James Doyle Senior financial Analyst.

Certainty.

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Materially from those set forth in such statements.

And just available.

These risks and uncertainties review the forward looking statement disclosure in the earnings press release that we issued today.

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Just as a reminder, if you have specific modeling questions. You can contact me later and discuss offline.

DNA charter hire expense and interest expense now I'd like to introduce a manual Laura.

So much to the us.

You for your patience.

Then to the president.

Please stand alone.

And then for those of US we'd that many years of experience in this industry.

Yeah.

So this strength we.

Patients.

Yeah.

Please stay on the.

Right.

Thanks Valable.

I am pleased with the way the company.

She position into product tanker.

Patients.

Yes.

Today, we have announced the technical details.

Differ.

Of the ATM program, we announced five weeks ago at the time of the traffic would have transaction announcement.

Please.

We had been no rush to use it though.

Thank you for calling me I have your conference I'd number please.

We now stand into full tools on the powerful inflection.

It's on new please UN mute.

The confluence of.

With that.

I hear you I'm.

Seasonal cyclical.

It will.

Just back.

Is substantially the impact of IMO 2020.

We are.

Safi Slide 12 build the company to this point with the largest the most modern most efficient scrubbers equipped spot market exposed fleet.

Our financial gearing operation on viewing and market liquidity allows us and our equity holders optimal position for the upswing.

Has been a long time coming longer than we may have expected, but the weighting may now be over and the best is to come.

With these I'd like to turn the call to Robert Bugbee.

Hi, good morning, and good afternoon through on overseas.

We're very excited.

It's really hard not to be like really very very bullish and after 10 years or so bad market.

Well good luck to look forward to.

Markets are very strong levels right now.

Free and off season as you can see from the slides we sent out this strength has been slowly developing.

Quarter over quarter now.

Well over 15 months and so it's pretty well set in and this has happened before any emo regulations is happens during a fleet a period of fleet growth.

Both and we'll talk little bit that about what will happen in the future.

Mark today are in a low twentys and.

A lot to sell model out to the fixing triangulating basis around $30000. Today, that's just a fantastic level right before the season starts in the couple of weeks around Thanksgiving traditionally our market start that strong winter season. So we can be confident that our remote.

Training bookings will be substantially above where they are today.

The fundament and Thats not what we've just released that involve the actual earnings that we are at this point to the moment.

We can be.

The fundamentals as a minus has continued to improve our decide to highlight that we've got through another quarter with very few orders.

Companies and capital markets are unwilling to make all funds speculative new orders, we expect that to continue.

We.

Finally next year, the fleet will start to wage and it's actually possible that we could have small zero affective fleet growth in the clean petroleum product market for the next couple of years.

And this optimism is already starting to be reflected in higher values and high of time charter rates.

That I'd, just like to pass it over to allow thinker. Thanks.

Thanks Robert.

And good morning, and good afternoon everybody.

Andrew during the second quarter earnings call I made reference to the front loaded refinery maintenance season, which was underway in August two reducing the tonnage demand.

However, I also remained optimistic at the time that we would start to see a from market in the back end of the third quarter.

The market certainly came at a mid October Emirates began to approach $20000, a day and LR choose at $40000 per day.

These are highs rates for the month of October since 2004 to 2008 period.

And all of this is despite September October having the highest level level offline refining capacity.

Several years.

Taking a step back into the last two.

Orders during the immense refinery turnarounds, we have focused squarely on the positioning the dry docking I underscore retrofitting of a substantial number of vessels in preparation.

The regulatory changes in January .

This has been a substantial operational and logistical undertaking which in size a number of retrofits and have circuits few if any competitors in the product tanker segment.

Entered the fourth quarter, and the market volatility and utilization levels increased dramatically.

As I mentioned earlier the rates, we experienced with the month of October have not been seen since the 2004 to 2008 period.

The arm so now opening.

Volumes are moving and refining capacities coming back online.

Our forecast.

For the fourth quarter and 2020 is certainly a constructive and we're seeing a robust unhealthy start to the quarter.

We also now seeing the benefits of IMO 2022, and in November and December owners will start in a big way the changeover moving towards consuming compliant fuels and the freight markets will be reacting positively to these disruptors.

Apart from normal seasonal change, we anticipate a further tightening from the actual fuel changeover as the incremental product demand accelerates into logistical physical supply preparation during December .

Most refineries previously in turnaround.

Back on line in November , which will act as a catalyst for additional product tanker demand.

Mitch these turnarounds in the top.

Okay, Lima, 2020 preparations geopolitical tensions and symmetrical market reaction to provide further in purchase to the upside the strong step change in extreme rate volatility experienced.