Q4 2019 Earnings Call
Please continue gets done by your conference will begin shortly.
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Please continue to stand by feel confident well begin shortly.
[music].
Thank you for standing by nature in gentlemen, and welcome to stay focused outreach coach discussed the fourth quarter catch French 19 find not sure.
Today, we have some say focus chairman and Chief Executive Officer Mr. <unk>.
I just didn't stop Lucas.
Chief Financial Officer sat and constantinos.
Yes.
Operating officer Mr. Yang was 14.
This time all participants are innocent.
There will be a presentation, followed by a question and not to session at which time if you wish to ask a question you wouldn't each press star one.
Keypad and wait fuel names Vietnam.
This conference call. If you need any further information on the conference call well on the presentation. Please contact capital link to one to 6617566.
I must advise you that this conference is being recorded today.
Well we begin please note that this presentation contains forward looking statements as defined in section 27 eight of the Securities Act as 1933 as amended section 220 of the Securities Exchange Act of 19 vegetable I've met.
Concerning future events, the company's gray strategy I'm, not just I'm convinced that strategy, including expected vessel acquisitions and entry into fed to time charges.
Words, such as expects intends plans believes anticipates.
Estimates.
Relations, if such words and similar expressions are intended to identify forward looking statements. Although the company believes the expectations reflected in such forward looking statements are reasonable no assurance can be given that such expectations will be will prefer to have been congrats.
These statements involve known and unknown risks and based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which beyond the control if the company.
Actual results may differ materially from those expressed <unk> implied by such forward looking statements.
Yes that could cause actual results to differ materially include.
Not limited to changes in the demand for dry bulk vessels competitive factors in the markets in which the company operates risks associated with operations outside the United States.
Just lifted from time to time in the company's filings with the Securities and Exchange Commission.
Company expressly disclaims any obligations undertaking to release publicly any updates or revisions to any forward looking statements containing haven to reflect any change in the company's expectations with respect to any change in events conditions or circumstances on wage anyway.
And then toothpaste.
And now I pass the floor to talk to dump Harris. Please go ahead Sir.
Good morning, and of course, the bodies, but as you look too but [noise].
We can talk all that's going on with customers.
Lastly, Doug.
Fourth quarter [noise].
[noise] had the books imported by the government guidance that eventually you describe it it looks good.
So Scott this optimization nobody nobody [laughter] animation Dennis.
[noise] installations collaboration good that's fine that's just what you want integrating no.
Again, we shouldn't get things can you give you the going up I wish I would break.
Thank you know decision patients showed me maybe 40 the peninsula, we just completed the babies yet anyway.
The next issue once in a comedian Dave Mckay, who have done numerous they don't come to us yet [laughter] they seem to be tied to see when I went and that's.
Oh, good Gloucester nation.
Yes [laughter].
Let's move he got a nice in the market conditions.
Slide four we present girls, who did the mine [laughter] stayed very deep sea gun tomorrow.
I think that an opinion 80.
Yes, I presume that somebody like every year this quarter underperforming.
[laughter] Vince you find anybody there oh, great split up by English.
Great for the China, the most significant red mud.
Yes.
However, most of the Green Fusion Commission would [laughter] you shouldn't see one just tell you about agreement is getting a sign of improvement in the medium size. This is anybody getting 10 plus size.
[noise] setting is like side would be tend to focus and she may soon but I seem to Michigan fourth quarter.
[noise] anything pianos played a major but she and I don't know to put you should focus will be back [laughter]. Unfortunately, she doesn't pick you play month medium don't.
Taking into account a very slow to one excuse me do you think it's up to be made but as you know solution sets unique before.
It is scale.
I believe what do you see something but I really would something like <unk> point fivemillion into when it goes to let us see each country.
So is it more leads people to the bottom graph surprisingly Jewish figure been space in China.
And for [laughter], London.
[noise], so wondering if I could infer that increased substantially.
[laughter] would you would coincide with this stuff because they do that goes south American grain season, that's usually end up doing things.
Mostly for bauxite alone in grain, so very promising color, but look we don't have unfolded Blake remains good question for the should be much.
[noise] [noise] I think it's like six representing the Chinese exposure.
Do they should get scared we've paid [laughter], mostly.
So called [laughter]. He did I was kind of government users since I've been looking to employees.
Yeah.
All right at the speed.
Good thing they do not only 2.52 things one but you shouldn't.
It should be.
Yeah, they must feel a system was there but.
About 2.22 young.
[laughter], but was right now is expected to be 2.8 billion.
And that's what's enough but.
You didn't see trends look I've got my team [laughter] 715, do you know the beef.
Hi, its must lesions from Greg [noise].
We believe that especially those boys, we do think tuck ins for that.
I see production.
Good for the boosting your money.
[laughter] commodity based windy conditions in kind of normalize.
Looking into [laughter] life saving slide seven.
We see that the oldest degrading.
I didn't get he's going to fight the shape of books it sometimes as much.
It was compared with a decent sleep. However, before this is mostly placements I knew she gets weaker because of the facing close those because you're right.
[laughter] portion of the order book to be pushed back to gravitate towards.
Got it mostly they might be conditions with little to [noise].
Good good [laughter] language, but as for the [laughter] I'm a.
Ignatius.
Well as a friend scrapping rates will enhance governance.
So far we agreed to doing about can be capesize vessels have already been sold for scrap [noise].
[noise] worth noting.
Hey, Jason discussion there should be them into what's a good when they shouldn't be shipping a nation.
Thank you Denise will be from that I mean, I'm showing such Google glass for the forthcoming Iglesias is expected to go to the brakes new orders.
And then the next slide number eight.
Developments in relation to try to move into place you know system a big nation.
I finish we announced we had hoped it could be glad with English somebody just getting started a couple of housekeeping.
We didn't do anything whether that's what you're describing 16 of our vessels, we small basis that we set a five more vessels. That's good to see the willingness to them what does good thing.
Well these are concerned I couldn't be laziness digital data.
When they get it would be centered these elements that rational display engine.
Anyway notions issue Lloyd confessed compliant.
And that said, we set the heavy doesn't the Lloyd [laughter].
Well actually Lisa.
And and that he says who didn't even what prices. According to data from a feeling good partnerships in day care.
Yeah, I mean [noise].
Good thing in graduate degree they know since you're alluding to support ultimately could do us a us.
Hi Fi either because of the do it again, excluding the 350.
Your first the living at home.
It was basically the going up I, along with warmer than just the way it doesn't doesn't interfere.
Negatively affected because they do months, we've got sleeve intensive gracious workshops anymore.
The corpses stuck it looked much conversion date, so we concluded seats as well, but still have if you do this.
I was just they would have concluded woman's fixation scrabble. There's some bids have been this school district, because he's got various let us Oh, Ben good calculated individually significant oil consumption Green Chili Gloria.
And the prevailing prices and.
With their get I'm actually going up I'm struggling with control.
Increasingly does for you month would influence the but actually parents and students injection the money like we do.
Turning to slide nine equinix above the minimum sociallinks, which may be policies. When it takes you either that I'm not going investments by retrofitting Scrabble [laughter].
As for the English football [laughter].
Well there.
It seems to 1.9 million actually yesterday.
We expect it to of course, there's a fairly familiar.
Smithfield <unk>, that's what leads me to scrap missing pretty ballast water treatment [laughter] baked into the second quarter is pretty good fight most others would be stores, bringing that put a member.
Scrabulous equation.
Well, there wasn't able to live expected downtime due dates for Q1 thing to do.
In order to actually started issue there.
[noise], who couldn't slides demolition, but actually take away.
Seasonality inside of paper.
And it says to us insight is easier by Dakota Bioshock Blake.
You would say these finish one agreements and especially because most would support the month sites.
Nations and Cvs fusion or.
Clearly stopping.
Seek mechanical do solution, especially some of them in other words this will control the supply side.
This is what scrabulous in more than adequate decided if it gets in and that's something that's going to shopping luggage.
We'll go bidding on the basis of our 11 Eco design business, which will help scrabulous.
Sure, but I think they sold for the good establish she was very soon.
No problem.
You know these only we'll give it to one seven New York, which gives us flexibility in the basin it wouldn't be by them.
No chief unless it looks good we present unquoted behind US I think there's no question. Good morning, everyone seems like crazy because they thought if we would be which is outdoor [laughter] and this is.
That's interesting about 74 point vileness.
Shifting over there how does it say being boy did it needs a blessing because it's been time deposits for pinpoint duties on bonus unexpected costs. When do you want to be lumpy I know the unsecured revolving credit facility.
And really 6.4, maybe once it goes on medical meeting a vote bonk affordable anybody for that wasn't able to financing moving our new bids what's been the most lots of resin.
During the fourth quarter of the went Tonight, you would probably fine arts, a large portion of Oh did and insight has been present on the blue Quantum's RV payment schedule on a pro forma basis.
Taking into account this in the news Macaus actors Woods will go a little bit in January.
The payment schedule as of December 31st win Tonight.
Goals.
As it is I wonder if you financings with her and I just want to me when the deal 53.1 billion.
Moving on to slide 14, <unk> presented or what the need to do you see was still does it didn't thousand $707.
Yeah, I didn't figure for most Opex and DNA for the last four girls it'd be Louisiana was $6570 as a result.
There's also.
I don't want to expenses and they did the five fully completed and one partially completed drydocking.
Well, the British spares and repairs and maintenance again due to the company doing some forthcoming but I don't use.
And those in Greece administration expenses.
Moving on to slide 15, losing some financial data on a quarterly basis, our borders as everyone knows our adjusted EBITDA and Oh Baby got slow had been improving overall financial strength.
Slide 16 does end up they got slow wonderful for this was board that all slender 19.
Was there Ben about it themselves on 700 Boes per day, and Ben less than 10000, but they said that for all our Bailey most including all baked into your name but is.
He said dividend and abuse, but it'd be nice, leaving about 2007 has gone to spud date, the vessel ours Basie got slow.
Let's move to slide 17 would not more than if I'm not sure highlights for the fourth quarter of last year compared to the Sandy you would have been de 18.
Net revenues increased by 1%.
[laughter] bonus from $52.6 million.
Maybe you're doing inquiries into other grades.
I totally agree whatever they listen degrees marginally because of $2707 per day from that these houses on $875 per day during the same build them ready to 18.
Daily vessel Opex increased by 17% to 5000 tomorrow on the feebleness compared to $4352 for the same building banking 18.
Whereas daily Opex in good excluding like <unk> and be the Liberty expenses increased by 10%.
The 4500 to sort it all goes for the four gorgeous, then tonight being compared to 4100, and mindfulness Willis and build into maybe 18.
Our adjusted EBITDA for the last quarter was meant to 19 decreased by 21%.
So glad to see point $1 billion compared to recognize $1 billion to $1 billion for this and build in blending 80.
Our adjusted earnings per share for the last quarter of 219 was one cents a glimpse into a weighted average number of 100 point do see.
Maybe a says compared to adjusted then.
There are several seven cents feeling the same bid and wed be 18.
That's the they did the weighted average number 102.1 billion shares.
It's like a deal would depend on what the decision based on the average daily be gave those compared to the same be the last year.
Looking now at present base when they started my opinion would likely emphasized that in this field would have worked extensively in implementing our easy investments in scrubbers and ballast water treatment systems.
Well it knows the profitably.
But it's probably been snobbish ones the female delivery vessels in both.
We already physical Michelin operation or benefits from this.
Investments.
Concluded numerous fixers with probably the benefits are the various levers overstated the good answers.
We have the finest a large portion of what this increasing our liquidity to over $170 million.
Well just trying to head of I said, there's a blended my gives me offer.
The first quarter Brendan [noise].
The chart there might get his own weakness due to seasonality intensified by very well run a virus outbreak.
Before we embark altogether of which is not yet no. We're closely monitoring that you're working situation.
Moving to schedule to that in many fives Gaba installations.
We believe that that might give science I've enough what am I get that he bobs once they go run a virus outbreak.
Yes.
But at least presented more details when I said in a baby bonds and the we are ready to take your questions now.
[noise] remind you if you would like to ask a question. Please press star one.
<unk>.
<unk>.
[noise] reminded us.
If you would like to ask a question.
[noise] question comes from the nine.
Given please go ahead no question.
Oh, the gentleman how's it going.
I know like.
Hey, so looking at your your scrubbers, and a especially slide eight so first kind of why did you defer those five remaining to cover retrofits from the first quarter to the second quarter, where where the yards accommodating to your request to the switch or did the yards maybe required that delay for the remaining and stuff.
Patients for chronic virus or what have you and then looking at those recent five fixtures on slide eight with the fuel spread around $200. A time, what does that translate to into a premium on your kamsarmaxes or post panamaxes.
Okay.
The new Seattle or.
Sure as they show less yeah.
She is a bit but over them of course that others would you say leaves you year, so instead of having that shows.
The words says you have to but.
They just can't but a good in January.
We decided to pull services after the Chinese new year beside business now.
We ended he says we've got we would say new sheep says we should the.
Fortunately share and are they were not able to cope with it was actually schedule. So there was no. These are whats voted to go there in weight.
We took the leasable decision for phone.
So basically we there they live on the shipyard time for a that simply put differently, Greg I think the situation.
I know that I know he said he would have been well they seem to have grown about a distant all said and ER I feel that.
Installation looks good I always listening slabs, we gave a good as you would [noise].
Maybe as much.
In terms of ER and the benefits.
For.
Yeah, there's a.
One of the velocity.
Yeah. So it's.
Sure. So theyve been doing a I don't see function day that.
And I'm actually is mainly.
Slide six hours on bonus as they buy a possible school will set us a flip that sub sea.
This is Dave Chappelle suffice to say, it's making a and increased revenue by roughly 4000 velocity.
4000, a day okay.
Perfect and then second question you know obviously you know last four to five months or so are you issued those 4 million shares are and you also repurchased almost 2 million shares. So you know kind of why was that the end where you're required to issue those shares as part of the post panamax purchase or could you have used cash back into the.
Member and then now that your cash balance is extremely stable scrubber, capex winding down or additional share repurchases. The number one use of cash going forward or maybe buying back the preferred.
Hey, a week's I'd always the auction I did to use gosh or a two issue shares a florida, it's installment sales for the reduces.
Well they will be thing is when they need BTIG.
Shoals this installment that we'd be November.
We should the sad.
There is of course, because we we believe that Ah ha based on data in mid or actually the value will be sensitive to the bodies low hubbell in place.
Buyback program into we've started to buy budka inevitable show so of course.
That may 10th grade at lower.
At age some but pretty much the president will leave them in a instrument at least support that we gave a here recently and it but I sit still was so low that we decided that they got.
So that it would have enough over them buying back shares when but.
But I do know system lenders.
Because we strongly believe what do they done by me and a good fundamentals in the company I remind that Oh, we have looked guy you'd said he knows they see.
It took a level of says he made above 100 million and then the company's workplace.
Well at least liquidity that we have eight it could take advantage of the markets.
We have no relatively low.
Well it lasted about 60% and we really comfortable but we're well placed in this environment. The buyback program continues from time to die.
Got it.
Okay, well that's it for me I'll turn it over thanks, so much.
<unk>.
A question.
As a reminder.
He would like to ask a question.
Oh.
[noise] [laughter] from the line of friends you given that Jefferies. Please go ahead your line.
Hey, guys. If it's just me I have a few more questions.
I just didn't want to monopolize the car there. So looking at your fleet. You know you have those six panamaxes over 15 years of age you know appear to be earning a discount obviously to the modern panamaxes are you looking to sell those vessels, maybe renew your fleet with more modern secondhand and if so what kind of asset.
Class would you focus that growth on the capes cancers post panamaxes.
Yes, no right or some of that they are six vessels.
Yeah, Yeah, they are approaching that that'll manifest in the us all.
But oh sure she loves to keep in mind.
Well I know satisfy ourselves and we saved them for 16 consecutive yes, so I'm expecting to shifts from loss and loss must long goes on the other day.
A ship.
In other countries up or a change fortunately towards the oldest during its lifestyle. So there's more on that I mean, that's up for sale.
The president of violence.
Also some of the they'll pick somebody goes right. So soon probably in a Muslim for example, locking up to almost 16000 Boes a day when the time trying to fix a this time last year.
So when talking about how to do anything on the selling site.
In the future <unk> TV.
Uh huh.
<unk> costs is there but.
We are working machines, and that's why you're seeing opex going up as you would want to keep them for 55. So this should some dozens and dozens of ideas and all the buying side.
We are investing in Congress has it gotten.
Well, Okay again, or this point I thought it would be worth making an investment.
Oh, yes of course on the other common stock price.
Much if at the outset something.
At the moment, so really invest that money as well as much.
Now, let's hope so we've all four assets, we when we should go for a whole because she's not small that so should be kamsarmaxes approvals for fun imax's or please.
ER, but the you know the market was that they do so what's the on which are.
They sort of size would be more consolidation there that's what the competition would consist of up the comment or.
Five year olds, all vessels and wouldn't be on that side of the threshold and any I'm buying what I will never would get comfortable buying unfortunately.
As a company.
This is liquid.
Fall before the handle the young with Wilson will be able also to see on all possible acquisitions.
And I want to pick up though.
What was the last thing sorry.
Yes, no because she is voting in favor of sit on top of the thought of it doesn't want to lots to the supply all well Newbuildings [laughter], yeah, I I would agree with that good and I guess lastly, so you're not third quarter time charter equivalent rate 13304th quarter.
A little bit higher 13700, I can you give some kind of guidance I know you have any charters, obviously, but for the first quarter are we thinking 12000, 11000 10000 for the full quarter average or at least maybe quarter to date.
Yes, no use only I guess it at what point, there was a supportive but the bigger numbers and the popcorn and always you'll have to go across a buck I see the numbers from last quarter.
I have to asking me what would be then that's the important not that we wouldn't be the portal. So since the market dropped a bit during the fourth quarter, especially in November December.
<unk> is in the second possible before all this expected thought that no not the nominal skill one wouldn't below a bomb that sustained solid they'll sell another oh I come up to you I committed and how much is would be.
Next is absolutely so that they could do an awful lot affected by it.
Or a drop of that my first house, but every year.
Well, the Chinese new year loss, it's not problems Oh and extended its obviously, yeah, because what this is a pull on idol.
Hi, Scopes isn't it says its chime in here, yes, one signals.
The use of let's say two to four weeks all five market.
That's it says that the possible six weeks. So this would have to take into effect that people showing that in the football.
Outside of of course, other we wish the time multiple ensuring that is absolutely tool, which markets will be and look high up on what it is today.
Of course also Chinese you know they will come boxes at Mckinsey operation.
A modeling for stimulus programs.
Right.
And that they wouldn't pick up a subset of fun.
Yeah. It's the same time they wouldn't you lay off that you wouldn't think that anybody somebody's yacht slowing down in the coming or three all three to six months.
Of course exactly how they are no question then a industry. So that's all from other parts of South most all of two days away. This ER, Saudi all all caught on our lives. So I think there's not a buffy without difficulty coming behind so we expect to have that much.
So long to second half of the young like housing trends Tonight.
The even stronger I believe it wouldn't be even stronger than the 19th circle in Pennsylvania.
Of course, opex or a potential oh, the Chinese government I wouldn't say on the on but on the.
On the.
Igniting the economy.
Yeah says one not coke moves on long haul that plays wall and that they open loop and so I think will well one thing for a nice supplies.
And that's still have something here you know, it's capesize rates lastly on the second thing they said well they fell 7.7 5000 velocity.
As for market is full basically they don't exist in this area it's quite possible.
Okay, well double up on top of but the company like outlaws up without law.
Good pop off limits, how awful lot roughly 50, it's always a scrap this.
Uh huh.
Sure you saw some because when the economy stopped moving again also the price of oil and we move here I'm. Just wondering this awful this split between H. appalling and this is Paul.
Well of course.
[laughter] performed well north of that I've time of the yard to see that Muslim out.
Sure.
Well that's it for me thanks, so much.
And do it.
[noise] currently nice set of questions on the line. Please continue.
[noise] [noise] there no further questions on the lines piece continue.
Okay. So thank you very much for that putting this oh.
Yeah. It ends in the fourth quarter. He has spent a little before discussing it with you next quarter. Thank you very much and have a nice day.
That does conclude the conference for today. Thank you for participating you may disconnect.
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