Q4 2019 Earnings Call

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Thank you.

Yeah.

I appreciate your time to Sarah updates, despite very simple stronger global headwinds and economic challenges facing all of us.

Once the we hope that will soon overcome this temporary difficulties Oh, so turned away says go to all affected by this terrible pandemic.

Before stopping please let me draw your attention to some important legal notifications on slide two but we're a comment duty.

Including a presentation today, which will include forward looking statements. Thank you.

Turning to slide three.

Our operating results for the fourth quarter proposing link being reflected the substantial improvement over the comparable periods of 2018.

In Q4, 19 would generate the time charter equivalent revenues of 6.2 million.

So to 9.5% increase over the same period in 2018.

Without the net loss of 3.6 million.

17 cents per share for the quarter, and but remember that the first 2019 slightly higher than the same period in 2018, which was primarily due to a noncash loss of 2.8 million or 13 cents per share on the sale of our oldest lessen the big Susan.

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Our adjusted EBITDA for Q4, 19 increased 1.7 million to 1.9.

The last part of 2019 reflected the beat or the steady improvement from a terrible 2000 maintain 18 I'm very high volatility over the first three quarters of 2019.

Charter rates for medium range thinkers increased into a very solid fourth quarter.

At various times during the year, we decided to fix all four of our remarks understand good time charter, so tirades and minimize vitesse uncertainties surrounding the bulk of the new I am all Twentytwenty field regulations.

We decided to take advantage of this stronger environment I'm sorry.

No not glenmark in order to achieve a number of our strategic operating and financial goals.

Also saying was announced in December and complete the by mid January 2020.

The net proceeds were applied to the love It Ireland shape, improving liquidity and better position us for growth.

Further we avoided operating with older hi, consuming banker, which would be less competitive moving forward I've been getting the close of a major upcoming special survey, including the vessels since I last another ballast water that mill system.

Oh fleet. Currently consists of five tankers are shown on slide four.

Doing that to me that the modern eco efficient them AWS, one echo modified the modified the more than two small tankers.

As of March themes with <unk>, 6% of our remaining available sleep days for Twentytwenty covered exclusive of any extensions.

Yeah, Mark Sullivan of its baby at eight of up approximately 15400.

But they which is 1200, but they are higher than that then your words for one year for one year time charters.

As you can see Oh smoke bank is he going thing your torpor eight in the spot market will continue to utilize our mixed chartering southern seem them there though.

Means that please note that three of our vessels are scheduled for special surveys during the upcoming quarter.

Please turn to slide six for a brief updates on the product tanker market.

More detailed market overview is available at the bulk of our presentation include <unk>, including holiday that sector that.

First let's review the fourth quarter 2019.

Operates flooding Mars improved primarily as a result of seasonal demand and strong fundamentals.

In addition to demand for winter keeping noise in the northern hemisphere rates increased because of incremental cargoes of why didn't guzzling and you'll compliant low sulfur fuel blends. Furthermore, it dramatically stronger crude tanker market close the number of larger product tankers to suites to better cargos, thereby Rick.

Using available capacity gotta clean product getting clean petroleum products, such as gasoline and jet fuel.

More importantly, let's discuss the got in quarters 220 plant.

Simply covert Tonineteen has resulted in the global economic fallout, which has increased the volatility and uncertainty in the month, what im fine petroleum products.

In late January sports rights for public Bank has collapsed and solve is leisure <unk>.

Due to high inventories extend but no not holidays in China and the replay economic effect of the coking coal with 19 virus. However, recently spot rates have substantially bound and determined.

That's Atlantic Basin Kuzbass resilient.

Slide warm winter weather over the laid that I will have covered my being in the western hemisphere impact of weights is still to be determined.

The board markets, what amongst us often which is typical up at this time of year. Your two refinery turnarounds and fears of lowered the month for example, the one year to see for equity Mark has declined by approximately $1200, but they to $17200, but they seem to.

The first week of January.

I do think it is beneficial to point out some important points, but kind of been vitamins. So please go to slide seven.

We have seen your bank it goes type of price spreads between high and low sulfur fuel Lloyd evolving arbitrage opportunities and slower met the vessel supply growth, but I might be associated with the lace and you'll be deliveries on dry dockings, including scrubber inflammations, we feel.

Our modem equally sleep.

Sharpening strategy, though stable net cost effective operating platform we'd be helpful. During these uncertain times.

Looking down the road. Despite the fact that absent of gold with my team will still be leaving the long term fundamentals in the public sector.

Turning to slide Dave.

Historical demand growth for refined product petroleum products has been highly correlated to the blood the global GDP growth.

Great that a worldwide consumption of petroleum products.

I don't mind expansion from the changing they find that landscape when within for example.

Exports of refined products have increased among compiling the growth of 8% to 10.6% over the last 10 years extensive broach personal wage discarded on NIM ours.

The trend should continue as the U.S. is expanding and sex what's the capacity.

The M. our order book continues to decline and those of the end of February to bring to 20. The order book was up 5.9% out of a worldwide fleet of 1739 vessels.

Approximately 50 M. our tools are scheduled for delivery over the next month.

Youre that youre that youre bidding activity has been very low.

In 28, 19, only 49, there must choose where orders.

We strongly believe.

But with the delays caused by the virus size and shape, yet supply growth in twentytwenty should be lower Moreover, demolitions should increase us, 6.2% or 108 them ourselves. The global sleep is 20 years or older. Consequently, we believe net fleet growth.

For a must should be less than 2% implant the plant.

Turning to slide nine.

And mark to asset values have increased especially for younger eco efficient on it which are currently at 14% above 10 year average is.

Lower vessel operating costs and better fuel Consumptions provide greater earnings power and make this tankers highly valued.

There continues to be attractive opportunities likewise, secondhand tankers and participate in the long term upward movement of charter rates.

At this point I would like to turn the call over at the Center Williams, Chief Financial Officer Boy discuss financial results in greater Big thing.

Thanks, Andy let's start with our unaudited results for the three months and your ended December 30, Onest 2019.

On slide 11.

Our time charter equivalent revenues for Q4, 19, which we define as voyage revenues my sports related costs and commissions were $6.2 million, an increase of $1.8 million or 39.5% for the same period in 2018, as a result, but better freight market.

Later time charter activity and better fleet utilization in Q4, 19 or daily Tc rate was approximately $12400.

Across our fleet of six vessels with utilization of almost 91%.

Results for the small tankers offset strong results for him ours.

Turning to slide 12, we incurred a net loss of $3.6 million for three months ended December 30, Onest 2019, or 17 cents basic and diluted loss per share based upon 21.4 million weighted average shares outstanding compared to a net loss of three point.

$4 million or 16 cents basic diluted loss per share.

Based on a lower share count of 20.9 million shares the same period in 2018.

Good discipline in vessel operating cost management fees and gene expenses continued.

<unk> evident during the most recent quarter.

As previously mentioned in Q4 19, you took a noncash loss of $2.8 million or 13 cents per share on the sale or the pyxis Delta, which contributed to a significant portion of the net loss. During Q4 18, we took a noncash charge of $700000 or four cents.

Due to the right down to the carrying value of our two small tankers to their fair market values. Our adjusted EBITDA increased substantially from $200000 in Q4 $18 million to $1.9 million in the most recent.

Please turn to slide 13 to review our most recent data by the us.

[noise] lead changes in these measures metrics related to a single vessel in one reporting period.

Have a disproportionate effect on a total fleet operating results.

Focusing on the most recent quarter ended December.

2019, we'd like to point out three key takeaways.

The T C. Four four MRC averaged almost $14500 per day.

The average t. she for small tankers improved to over $6600 per day, but negatively affected our fleet wide results.

And finally.

Wheat wide daily operating expenses were almost $6000 a day for the quarter, we'll break but were again very consistent year over year.

Turning to slide 14.

We believe is important to review total daily operational cost to run and manage your public Tegra company, including over it. These costs vary by fleet composition and vessel delivery company operating structure and management, we define total daily operational costs has.

That's all operating costs technical and commercial management fees plus Gina expenses.

Comparative purposes, we believe it.

That's a total daily operational costs of our eco EMR twos.

Tenure.

To be competitive within the industry Spider small size.

Please turn to slide 15 to review our capitalization has.

Bob December 30, Onest 2019.

During the year, we repaid $4.5 million a bank debt at year end, our consolidated leverage ratio was on par with other publicly traded tanker companies as net funded debt stood at 61% total capitalization.

No balloon payments are due for another two and a half years, while 55% of outstanding debt, that's floating interest rates tied to LIBOR.

Please note with the sale the Delta in January 2020, we repaid an additional $5.7 million effect.

With that I'd like to turn the call back over Daddy to conclude our presentation.

Thanks Henry.

We are all staring at various uncertainties, including a potential global recession, but were optimistic that these headwinds headwinds we'd be certainly.

We believe in the long term fundamentals of the product tanker sector, leading clean proving charter rates cash flows and asset values.

Our cost effective operating platform more than fleets and kind of mix of time charters on spot exposure should help us money, that's potentially choppy environment in the short them and then position us to take advantage of opportunities to grow big safe and enhance shareholder value.

Hi, Thank you all for joining our call today and look forward to reporting on further progress I fixes thinkers stay healthy and be safe.

That concludes.

Thank you for <unk>.

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