Q4 2019 Earnings Call
[music].
Ladies and gentlemen, thank you for standing by welcome to the first question trying to maintain asset allocation limited.
This call at this time as this incident.
Most.
This inflation that we're getting question asked the question John progression. During the question. Congrats on the conference about how much is actually the discussions will continue.
On February 2010 chains.
No.
Yes, I think how format.
Thank you on loan growth.
Or elsewhere.
I will shortly.
True highlights for the quarter following that we see a philosophy will assume the SRU financials.
Sure.
Yes.
Thanks.
Before we get a presentation I'd like to know this cost.
Okay.
Sure in the meeting over to you.
Just curious litigation reform, Illinois.
So sort of like side I'm just okay.
Well sure much pressure sorry.
Are you sold or do you see us.
I'm, sorry, so turning to sponsor refrigeration.
The risks and uncertainties hoelscher sure to reduce results are already so assuming that share.
No Sir the floor.
Yes.
Sure.
Actual results to differ.
And so the shifting more showing credit in August.
Further information please refer to exercise reports and filings with Securities Exchange Commission.
Sure.
Okay.
35 cents per share.
Sources to fourth quarter officer evidence.
Yes, I was $1.40 or share on annualized basis.
As a percent dividend yield.
So your ISO.
So 45 cents on Friday.
Full year.
Nearly $27 per share.
For two or 3 million in July.
Inefficiencies trade show to backlog, which is continuing.
Sure.
Digital charter revenues was $159 million into quarter should remind you recycle ratio guidance or long term charters.
From vessel, so there's little short term charters on industrial market.
Yes.
Show ended the quarter, we'll also look at $143 million.
One other $17 million for the previous quarter last 12 months.
I have seen approximately 484 or $5 million.
Terrific. Thank you for their orders was approximately $24 million short 22 cents a share this after a non cash impairment.
A million dollars or offshore operations.
We also saw positive gains a mark to market movements will actually securities.
Finally related issue.
Shares also given all those other factors.
How do we have $225 million finish also after receipt.
International asset acquisitions.
The adjustment sleeves somewhere less.
I, just really gross adds approximately $3.6 billion.
During the fourth quarter of you're free to also excludes high interest.
From our share some of that will show shared across the four months ended or.
So, let's see slowed ishare shoulder to shoulder. So nice to have an average prices rose to $11 per share.
Mockery, so sure two or 3.4 million shares through a forward contracts they sorry in June.
Hi, frio, and more than $100 million and cash in the fourth quarter.
It was over the longer term delivery.
300000, deadweight on crude oil carriers or Rio to see finish order size authorization.
So $60 million vessel is very attractive.
Sure.
Charter free values, so more than offsetting million dollars.
Refinance $142 million three vessels.
Do you a mess.
So in aggregate $37.5 million.
So it is higher year on this recession added around $33 million last offshore Charlie.
In early.
Early January finalized orientation and funded also installation or software. So said another way also sociological notion.
We will compensate us for the cash in less than three an increase in the charter rate.
Hello.
Sure threshold level remains the same as before.
So for us and so we believe that's a little higher earnings potential.
Especially our share remaining in 2500.
So we believe there is increased essentially overall share.
So going forward.
In the fourth quarter before so marketing.
Consolation cost sales orders.
Carlos.
It was as follows the profile so only $3.3 million ended the quarter. Despite the fact that one of these so for our service provider as Florida situation Andrea.
On the relating to focus was lowest progresses. So we're already in the song.
Hello, Mr. relating to the stronger operational shows true. We're all are seeking the delta if you're most tertio run off $200. So far.
To see.
In terms of $3 million initial rice.
Yes.
Between the today.
Yes.
Sure.
We're also every last slide into accent charters for three additional online just some softness you vessels in combination with is solely in Chicago.
We are $160 million so the sharp growth for the last few vessels.
Importantly, we also onshore relating to the showing could only 27 out of Japan larger assets you have a charge commercialized.
So this size use around 20 to 23000 costs are few cents per year.
Price differentials are also others also.
We should have a significant.
So before.
Prima area.
Also if at all.
So we have recruited Oreo.
Sure.
Customer.
Yes.
All the southern levels, So really a shipyard added in our.
Those are scheduled to be already during 2029 solar has a sector that next year.
Going to logistics challenges due to the for all of our reseller in China.
Insulation for most probably later every year so originally.
Earlier this month, we sold as yourself.
I see from Chicago to accelerate.
We remain a from our initial feeder 47 vessels auto how I actually saw set of three point additional Sasha.
Only issue associated relate to cease remaining on charter to associated or.
The net cash proceeds.
From a sales.
Some of the $30 million after conversations or follow on equity early termination or chart.
Looking ahead for sale is a faster than usual.
We also recently agreed to sell three of the vessels previously on charter to associated earlier, so we saw offshore.
Two vessels, how being sold to a dollar.
One last a little later cycle in Norway, agreeing to slightly facility. According to the treasury and associated recycling regulation.
The most cautious.
This is very challenging.
So how will remain a layoffs a serious.
We are evaluating several alternatives for the.
The age of the vessels unlimited.
Similarly, a sale or two vessels on recycling.
Thanks Ross.
Termination of the charter so sorry say unusually arena.
On the licensing agreement a slow that play into the restructuring.
As a result of the continued uncertainty around the remaining two assets. We are essentially with the asset central area. So if you will level off recorded a non cash.
For the $1 million into Florida.
For us is relatively large at all.
And 1% to allow us we usually have any mortgage sat on the vessels.
This will move forward flow more than a year ago, given the uncertainty already.
And finally.
Like I mentioned that we recently ratio.
600 million, we can call us.
So $67 million through a five year unsecured funding.
Rcs related.
We live in the region ended or a array of gross margin of four or four satellites, which is below previous articulated on lower some from like almost 475% issues on 18.
It was 4.6% loss share.
I don't see says you show, how many softer year solar cell fixed interest rate.
Platform low and also they are all shipping higher on client satisfaction.
Following the recent sort of excess social at a low sunset optional is $3.6 billion competitiveness.
<unk> million dollars.
From us.
Over the years he has changed shortly compensation structure.
Our age Rasmussen race and no rest remaining from the initial FY 2004.
Moving on from a sales sharper to one single customer shortly resolutely multiple color.
But over time and resources harder backlog as well.
Hi, Chris Geneticists inside offshore I won't say too so as not being the largest segment, we more or less.
Backlog.
Our separation to folio pharmacies, and evaluating deal opportunities across the segment and try to do the right transaction from a risk slow.
Over time, we believe this I want to sell off from.
Segment on a succession.
Last year, we have elevated transactions totaling more than $22 billion in aggregate.
Four times will actually is.
Moreover, the incidence.
So let us in 2018 was higher than last year.
Finally, we carefully also in interim assessment and not just in West Rose from one is running at all.
Our strategy has also been to maintain a strong technical and commercial operating platform Corporation with persistent Autonation undersea solutions.
Associated energy to our a wide range of services to our customers from structured financing to full service charges.
Secondly, we also believe cities so see any access to the afloat core segments.
Like most other companies.
Total in America will more than a Ccs our cash flow from vessels on time charter we control the maintenance.
So the vessel.
40% shortly I will try to vessels, where the customer issuing foolish.
Alright.
That's a fleet of 48 container vessels as you recall carriers with exception of two seater size container shares color container vessels, our employee from long term fixed rate charters.
As a source for short term fluctuations in the market.
In recent memory, so arielthree automated although season actually grow crash and related charge our sensor containerships.
The initial outdoor sorry strategy, operator, we shall we say for wireless customers.
The driver side, we have 22 vessels in the field.
Larger vessels chartered all our long term basis I'm sorry.
Hi, MSR to Super micro orders traded addressable market.
One of our long term objectives is to launch and then it generally facility Atascosa optionality.
Time to market productivity can generate distributors from time to file.
Sure arrangements, we have this whole notion I just mentioned earlier this newly established with increased earnings potential after a strong progress.
Slide 600 level, three and also the Supramaxes solar long term fixed rate onshore well into supramaxes or two supramaxes et cetera.
We will carriers continue to trade is solar market.
Average rate achieved for recycling this quarter were approximately 80% carbon illustrate a small generated from 9001 autobytel is for the industry.
In the entire segment.
Hello, and atrial flutter account factors most of which are our long term charters.
Sure centered around 8% I'll, just follow ACA or.
The crude oil tankers charter to follow on shipping limited or 20 functions on a straight today in the quarter first of all the share of $3.3 million as mentioned previously.
All remaining to be able to cease I've already a sole source.
The average daily time charter equivalent rate from in August two modern Suezmax tankers was approximately $33000 today every quarter.
To 18007 monitor cost although today as previously mentioned.
In the sense just pass cars and so while the second we'll be Drydock later in the quarter, where sellers also will be added on that so.
This will take place in Singapore.
So you are subject to the same logistical issues, such similar where inside our assets.
Also during 2017 as they also same efforts are largest settlements for a long period. So there's not alter a lot of 25 years, which also at all.
Three weeks and and.
Two offshore support vessels out of the recent sales.
Our focus is really raceway $27 million.
She also charter harsh environment, Jacques already readiness to alternate or slightly under a 2028.
The harsh environment semi submersible rig.
As recently and the oil.
The second to show charters in the North Sea additional working for equity or.
Including the readiness we have reduced.
From $1.9 billion. Initially on this year race to below 600 million wherever they are more or less than $200 million earlier kind of aggregate cost on a loan.
Sure I guarantee Atlanta.
I would like to hit hard over to our CFO Mr. also.
Through the financial highlights for oil.
Thank you invest.
This slide.
Pro forma histories post cash flow from the fourth quarter.
Additional so this is all my guidelines will shortly how long this performance in the small in accordance with you as cash.
This extraordinary and non cash items.
The company generated gross totaling approximately 169 million.
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More than my true sense, so somewhere in the coming from our fish exciting milestones.
Based on WMC should begin those.
Strong CBT almost cash flow going forward.
On the fusion the initial diagnosis or some of the 82 million per month.
This has already mentioned into focus unless it was right on time charter owners.
Just to follow settlement from those shops.
Okay. If you generate endorsement consent fee of 27 million in Metro line.
She was increased from 3 million inflationary for much I understood from.
I wanted to this amount for cameras derived from home shopping.
Yes in December.
Followers.
Subsequent to quarter one.
We sold the to the him to believe Ccs on our on time.
In the charter remembering from one another level work.
According to the colonial frozen Watsonville 40 million lower.
New food global food generated approximately.
Finally net MSR.
We see some that are up until we see from portfolios today motion.
Furthermore, we.
Research and then sort of insulation from 700.
It's a really strong long term charters slow motion in exchange for increased certification from the first in January.
Generally.
In the fourth quarter fiscal Oneq treating this entire also services.
Let me first owners Orlando will focus on generating a portion of contingency fund, we lend and try to iron ore from the feeling.
So as long as you have you seen from the financial services and focusing software.
And then the downturn, we know how should we see solution.
Loss.
Overall entry into on race or long term consumed able to focus to fully understand that actually really conclusion.
No I for one second readers.
To sort of charter incremental funding until the end will also make sense yet.
Largely widening semisubmersible rig that helpless.
Most of his shorter term social whose.
We're in the North Sea.
The semisubmersible ratio.
During the day in India.
This summer.
Turning to follow point to 153, new yet.
And one dollar know for information.
And 117 Emirates among goal in mind semi industry this quarter.
Revenue own fulfilled.
Sure or there is only you establish.
70 striving for use earnings call. So many elements the information from goal over traditional shipping company.
As a business strategy for was listed on long term focus on cash and Laura.
Yes.
So we see.
As you saw a significant portion will offer some of your new slightly a few through usage.
Yes.
We intend to do some revenue starting all sq cm and doing that I mentioned time, you see some difference.
So we sold.
On the on June.
Non interest income from Philly.
So all in the quarter unusual in total enrollments or in Q4.
Total 21 more news events in EMEA.
Delivering on more than 169 minutes, which also.
Actually received.
I will mention Denise.
Net.
We caution reported fully human income from 911, using fiendishly media from frontline instrument, how come from the emotionally.
Confusion extreme commodity record is non cash impairment charges for 40 144 million.
Total firewall solution for sure.
So from the resumption to 7.9 million gain a multi mode on the room for marketable securities.
Well no. We lose this increased borrowings are negotiating for men and women.
So all we know Ingeus cash.
I would imagine comp refi formation, we remain fully committed to CMS for sure.
Very helpful.
Yes.
Sure.
Additionally, we then cash cash into a new set of all of them. Thanks, you recently do you see in free cash.
With that accounted for.
Initially.
On the indemnification congestion.
The same thing.
So securities mainly related to sales and service.
For the fourth round.
Somebody have multiple feature resources, if I may 4 million.
Thank you for first Monday reform Yamal phone service, so our self service only elimination so wondering if.
The increase in shortened.
Among others.
37 million vertical integration on the fact that shows.
Can we learned a feedback on that men versus elsewhere, so happy to refinancing address in terms.
$64 million senior unsecured loans you shortly in new transition.
Before turning the call the immune five years senior secured loans, we'll see some even when we see from there.
As many $67 million.
Finally market.
Yes.
The margin performance.
Right.
So for almost two years.
Association just.
Simplify our center last December.
And then just following on Friday.
Our next new issuance it took us some additional income.
So much.
The more fish testing them.
Sure first quarter.
Surface and Indian dealers over 77%.
Additional information on Friday.
Consistency flows.
Yes.
Since the company in 2004.
The $7 pursuant to from a premium even though isn't a rig.
Inventory solutions for data.
No we continue to correct revenue for multiplexing seasonally softer approach.
Upside on pro social engagement from our agencies MKS.
Yes.
Defocus New instruments, we ended Q4 in some other losses on for a new entrants.
We also know much more than a whole new marketing, the Yemen and see sort of launch we use stonepeak neutral enough.
So I mean.
In the quarter from Lake.
Well no issue facing grow into India.
New market environment from Union.
Right.
We will actually go before proceeding along the lines for questions.
Yes.
Ladies and gentlemen, can distract from Washington for five months.
So first question comes from land Grant.
Asked a question.
Yes, thank you any benefit from everybody.
Hi, Thanks.
Tom.
Im just given some of the mapreduce oriented around Corona virus and for sure is yours I guess would be helpful. You can count all kind of walk us through.
I guess if this is any of your backlog is exposed whether it's on the drive off of our maybe the wider side in the event that.
Cannot afford soon is there anyway is there any potential for.
Year to year charters, allowing for any any types of forces Sean.
No. The war, thank you not or charters are specifically sort of controlling ashu Roy sort of Chinese source.
Where we are you know Sofia two two years flush effect. So we are chartered vessels to French liner companies, we felt the rack, whether they trade him on China or they trade them somewhere else and so we don't have any specific for sure.
See issue, our I'd lease or if there are a cash around.
What's what's going on and the and in Chinese market right now and MSC Lacey see something different.
On on dollars shipyards, we observed.
We look Sarah we heard area.
Also for incremental production et cetera.
For now and we losses in any fashion.
Yes.
We have some vessels that are being drydocking here one that is on this way also short Chinese shipyards.
More recently.
Okay shape.
Thanks have in India.
Going slower than expected you're talking a few days.
The effects and also economic effects there is limited for us.
Youre sharing.
Customer.
But we expect to see more rescheduling all drydockings.
You know where some of that will be pushed later into the year.
Only.
It is likely given the near term assuring that our activity level in China.
We of course, we reversed and use the and it looks like there are some encouraging signs side.
It seems to where you say you see growth rate is slowing and hopefully a logical lighting.
Yes, we'll be Chinese economy and activities fashion.
This will create a menus for one one for me around the dividend.
Clearly you guys have sat restaurant good job of returning cash to shareholders.
As we can think about it and plant operating supplies.
Marksman Chicago targeting excess.
Thinking about us plenty of non 10% yield.
How should we think about just looking to balance you clearly, there's some liquidity capacity for growth, but also looks like phase on cash flow sourcing ability to increase in distributing dividends.
How long is does the company succeeded down.
Potentially seeing revisiting the dividends in 2020 is it a function of equity is an assumption cash flows are a little bit of everything.
How is SFR kind of thinking about if you will see the increasing cash.
Increasing its returns to shareholders.
As we look out over the next year, just given given the backlog is pretty solid charter coverage.
Thanks, good firstly.
Hey, guys. Just first thing we think all that we make off in the morning.
The last thing we think over before we go in data so so.
One thing we focus on obviously and deliver dividends at quarter end, where every quarter we had.
Basically not off.
It was that you would have decided not to use underwritings going forward.
Yes.
The same time I mean it.
Sure the reasoning behind the dividend is not derived on certain potential nothing from a softening into cash position is really leading to long term distributable cash flow and ensuring that part is very safe.
And that obviously a lot worse.
The recent rode off over time, so while we cannot.
It's anything specifically.
The next few quarters of course, we would love to increasing dividends.
Hi.
Increased distributions to shareholders.
Which also I feel pretty likely also.
Increase.
Our share price in itself.
If you compare to occur yield around a more than 10% lifestyle compared to this quarter's race you got four terminal processing to us.
Very significantly.
Thanks, good credit in margin.
Hi shares like assets already.
Okay during your money into device so.
When we also of course.
Today, we have here we are excited about you know there, but we believe that a.
We added adlong until at least margin you're getting a few midas shares like Epicel certainly with surety. We believe is related to ensure that backlog.
We think that is a good deal.
Adding value.
Investors.
So we know from by his assets.
So that hopefully.
So.
In terms of getting value for shareholders to three a combination of two things one increased dividends over time in Canada.
Invest wisely so yield.
So to field adequacy sustainably and then secondly, you know demonstrates the risk profile. So hopefully we can have yielded Alex.
Okay.
Commercial offerings for the cycle venture comments.
Thank you My next question comes from one upfront.
Asked a question.
Hi, gentlemen has done.
Theres other on it.
Also.
During the dry wall in Asia.
Free cash flow now essentially taser.
But for us.
So when in the entry so to drive down there is for sale and leasebacks to estimate also are too.
They should be a few years ago and also last on the tax you mentioned fluctuation and intend to exposure that asset values from two items now that those major asset that has come in they are more attractive revenue.
Yes.
And we are we are looking for opportunities. So I would say selection of 80 basis.
If you just sales selling off so far sort of deal screening.
Last year, you were more than $22 billion sold on total deal opportunities that we were screening and looking at.
We need to or as we only give us more fresh so.
And if you don't.
See between the various segments I would say plus minus 30% for what is automotive was listening to that container side around 30% bankers.
And then.
Yes carriers.
I would say rocks, 15% closely and underwrite all here there's a lot. So we're always looking course also in that segment.
For years.
Other segments Saturn firewall.
I'm very proud to be careful we try to be injection into fewer deals.
And.
We we suffered due to deal with end users.
So if we get the risk.
This award.
Hello.
Suzhou working for us.
And if we don't see that asset.
We will be rather hot summer deals such as new is adjusted cost.
Cash on balance sheet.
So it kind of give you a specific number on an ongoing what we'll do what we are we're looking at maturity San Angelo sector SAS receipts.
Yes.
CDN value.
Yes, it is only one vessels.
It is scheduled.
To be an arrangement with a scrubbers.
Sure.
The new data into becoming a month.
The income level involving some of the timing.
That should be done by the first southern.
This year.
Like I can give you issued got you probably for that market, even closer solution and we view in terms of while the various companies are safe way. Their specific is so great progress. So far we've seen more some delays in infrastructure upgrade cycle Chinese shipyards, several laterals set up sub.
First fit in Singapore also into in the Middle East, where we haven't seen any any sort of that fast.
On that on this program today.
The economics.
Relating to scrubbers seems sort of true.
We have you actually to be restaurant at around $200 or timing difference between the is higher so for nitrogen used for this rubber and the low sulfur alternatives.
That said also.
So all through the year. So should we should we still see that also internationally and.
Even the particularly for larger vessels larger enersis, which of course on these engines that also yields to cease capesize the suezmaxes.
Very compelling.
In mathematics.
Margin simply because there's so much cash coming back.
That's true in the reviews.
Yes.
So I wouldn't be surprised if you saw higher even even more vessels see operator discourse also we've seen that.
The lead time from you order so as far as until you should have a sole came down sharply through last year life now offering also thesis disruption.
So we launched Airbus.
We believe that.
If you get back on track.
There will be an increased number of vessels.
Yes.
Got it and then move.
Someone shows as you own technology some of those.
Four main changes that are so the number today.
The other 3.4 million shares correct.
Before we add those are we have those are effectively a forward contracts. So we already see some of the cash relating to those already.
The forward contract last expiring in India. So most of the cash as we know our fair share.
Shares at our sole letting the value that where we have received cash flow. We thank you.
The next question comes.
Putting together.
Please ask your question.
Hi, This is lower market segment getting my question.
Yes.
So first I just wanted to start off five Biosimilars high question, Ron you drop off.
Although obviously some of that while races come down recently opportunities with instructions really too far lashed out with my team.
So what do you think views on here on Orenitram Entresto those are one otherwise marketability charters when you consider seeking argument to keep in mind normally indicator from strategic alternatives slowing folks actually selling some of the vessels.
Yes.
Venue I mean, do you have 22 drybulk vessels industry most of those all on long term charters.
Where there is some some profit share on may five vessels.
Of course, and make sure I assume.
Okay, and therefore, we don't expect much probably should generate from those so.
There is calculated or so locally or forward activity. We also have some smaller vessels seven undersized falter so too.
56000 driver officials.
Right.
Okay.
Historically those vessels where.
In the fourth quarter were in line.
Race, we saw and.
In the first quarter just marginally.
I think it's a little early issues or set of issues you should be true for sooner or later, so suffice on coffee.
You should try anything on earnings.
The first quarter.
The cost.
Part of the first quarter.
As you see a relatively slow as you see the Chinese Foundation.
The study.
Well, maybe taking many of these vessels Suffolk issuing following the first on a similar I'm done now we have decided to delay.
If you think offer due for the wireless in the same time distressed loans or trade.
All over the device.
And earning on those depending on what we shared quarter over quarter, you seem to lease vessels.
Currently around every region of the overall safety high accuracy thousand dollars today on average so.
Sauce.
Really very dramatic you don't see they see the same extreme volatility.
The capesize vessels.
In March or in a situation.
Yes.
The majority of our Drybulk vessels from term source revenue.
CCC momentum Charger solutions.
Okay.
And the one what was the underlying market.
Given the and we.
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Yeah.
A few full motion.
Hi, Linda.
You mentioned the prevailing combined media for years and additional revenue from the driver.
Hi.
Thank you and I also wanted to follow up on.
Your bareboat charter arrangements results.
Offshore and I know that your three of those arrangements threem arrangements for similar vessels have been terminated and you expect slice of our results for the remaining two vessels.
We kinda give you any specific guiding there I mean, we are.
Of course, as we will overcome the holidays are those situations.
This evaluating alternatives such as the year in mice.
For us.
We did increase.
Three vessels, one will be recycled into where we sold for further trading.
So far.
Beyond actually vessels remaining.
There is a standstill agreement there was so sorry.
The next month, so we have to away.
Well its final alcohol asked in the cycle so before that.
But limited to almost we can really comment on all the situation. So we will make sure everything we will source as much as we have access as soon as we have relating to that restructuring.
I think academic ourselves.
Yes.
Okay.
Once again just to ask the questions. Thanks.
The conference.
Well.
Thanks.
So.
Hi.
For the question can be found these can be.
I would like to thank everyone for participating in the fourth quarter Conference calls and also the esselte for their hard operations continue buildings or this EPS.
You have any follow up question. Sarah currently see sales in the press release or you hit it helps for loss through the corporate stages. Some of the reservation Www dot assets, our order book call. Thank you.
Hi, Thanks.
And then comes to participate.
Hi, Matt.
Okay.
On that.
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For more.
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Okay.
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