Q1 2020 Earnings Call
[music].
Welcome to the Atlas <unk> conference call to discuss the financial results for the quarter ended March 31st Twentytwenty I would like to remind everyone that this conference call. It's being recorded today make did twentytwenty at 838, M. eastern time and will be available for replay.
Please starting today at 11 38, <unk> eastern time hosting the call today are being Shinn, President and Chief Executive Officer, Atlas, Peter Curtis Executive Vice President and Chief commercial and technical opposite of Seaspan, and Rogne of course, and Chief Financial Officer.
List, we will open the call for questions. After the presentation from management at which point, David Sokol Chairman at Atlas add Thorsten Peterson Executive Vice President of Seaspan ship management will also be available for questions I will now turn the call over <unk> of course there.
Good morning, everyone and thanks for joining us to discuss outlets is first quarter earnings. This is our first earnings call since the closing as you've been holding company reorganization and our first quarter reporting combined outlets he's been a PR financials weird guided this.
There are a recent developments and financial results for the quarter.
This morning prior to the call we issued a press release announcing atlas's first quarter results for the period ended March 31st 2020.
The release as well as the accompanying presentation for this conference call are available on the Investor Relations section of our website.
If you'd please turn to slide three.
I would like to remind you that are discussion today contains forward looking statements actual results may differ materially from those stated or implied by forward looking statements due to risks and uncertainties associated with our business, which are discussed in the risk factor section of our annual report filed with the FCC on form 20-F for the year ended December.
The first 2019.
Our risk factors may be updated from time to time in our filings with yes. Please note that we assume no obligation to update any forward looking statements.
I'd also like to note that the acquisition of Hbr was completed on February 28, 2020, and as such outlets financial results for the first quarter of 2020 include a b ours financial performance for the period, starting on February 29, 2020, and ending on March 30, Onest 2020 with that I'll now pass the call over to Mr. Benjamin.
Thank you Ryan please turn to slide four.
Since the beginning it has been our vision to transform seaspan into a global diversified asset owner, operator, now that our Atlas structures in place. We've had further work towards our vision of sustainable growth and value creation.
And your 20 has so far proven to be a turbulent and uncertain time, thus far however, as our chairman David So called mentioned at our last Investor Day Atlas business is not about booms and busts, we have built a robust platform to succeed through market cycles and I'm not surprised.
With how resilient, both our leading operating platforms seaspan and <unk> have proven to be.
This quarter marks the first time, combining seaspan and a PR together our performance in the first quarter along with the month of April reflects our focus on operational excellence the strength of our business model backed by long term contract cash flow and our robust liquidity position.
Despite the extreme cobot 19 environment.
Before going into the detail I would like to briefly highlight where we have achieved in twentytwenty.
Despite this unprecedented pandemic, we have immediately taken proactive measures to ensure our customers are well served.
In parallel we act a robust business continuity plan across Seaspan and <unk> as a result, we have experienced no disruptions to our customers no tower cells.
I want to thank our customers for their trusted long term partnership our employees, especially our seafarers for their dedication and hard work and all of their families for their support and sacrifice.
Our consistently best in class customer services and the safety.
Oh popular see fair and corporate staff are our highest priority.
Continue to maintain safety measures as outlined.
I invite respective authorities.
Atlas delivered a record Q1 revenue of 308 and $8.4 million, while we announced our first dividend. It is the 59 consecutive distribution since Seaspans IPO.
We are proud of our consistent track record as it is a reflection of our commitment to thoughtful capital allocation and creating long term value for shareholders.
In terms of Seaspan over March and April at the height of Cobot 19, we took delivery of five vessels and deployed them all on long term charters with global leading liners for the full recently.
Part 12000 to your vessels, we closed a $340 million flexible financing facility and ended the quarter with a liquidity position.
Of $393.7 million.
We're increasing our full year Twentytwenty revenue guidelines guidance up $15 million err on the bottom and to one point when a $5 billion and up $30 million on the top end to $1.2 billion to $5 billion for Seaspan.
In terms of a PR, although we have only consolidated results for one month, we have already made meaningful improvements compete in the $285 million refinancing of atheists debt and announced new contracts were excited to continue to expand this business, which I will discuss later.
Please turn to slide five.
We are laser focused on building a platform for sustainable growth and value creation at this.
Starts with our five key priorities along with our people processes structures and systems. During this quarter. We have made significant progress and I will provide a brief overview.
You as they relate to Atlas Seaspan and a PR.
As a leading global asset owner and operator, we continually focused on operational excellence and the providing full integrated best in class services.
This crisis has demonstrated more than ever how operational excellence is the foundation of our robust business model.
As the news of covert 19 was announced in late January we took immediate measure to mitigate potential impacts.
Throughout these difficult times, we continually finding efficiencies within our daily operations and invest it the savings back into improving our customer services.
Especially we invested our resources and capital in technologies services and crew capabilities to ensure that our customers remain best serviced and the well protected.
At the heart of our business are the 4600 global Seaspan employees and 600, a pure employees whose efforts.
It's ensure we continue to exceed at the high standards and expectations. So again, thank you all.
Very much.
In both the global Maritime and power sectors Atlas is focused on building.
Being creative customer partnership and structuring mutually beneficial solutions, our strong customer base includes the leading global liners for Seaspan and government backed utilities for a PR.
The formation of Atlas and the acquisition of a PR enhances our financial strength and stability to support our future growth.
Our committed shareholders of Washington Group and favorite Fairfax Financial Holdings.
Our strategic partnership with long term capital partners as well as our innovative financings have positioned us to continue to lead.
Atlas provides the organizational structure for us to pursue in long term value accretive growth opportunities, while allocating capital to attractive investments such as our recent vessel acquisitions.
The Atlas structure allows both seaspan and if you ought to optimize its respective capital structures and growth objectives, while creating synergies through shared services.
Please turn to slide six where I will provide an overview of financial highlights for the quarter and.
Ryan will further elaborate on this.
An atlas demonstrates is resiliency delivering strong financial performance for the quarter, while maintaining a strong liquidity position of.
$393.7 million.
We are confident in our long term contract cash flow and increasing our seaspan revenue guidance.
Twentytwenty revenue is now I expect to be between 1.1, a $5 billion and one point.
Due to $5 billion, the bottom and has been revised upwards by $15 million and the top and has been revised upwards by $30 million.
Atlas recorded a record quarterly revenue of $308.4 million operating earnings were $127.5 million and our cash flow from operations.
It was $130.7 million.
EPS per diluted shares was 15 cents for the first quarter of Twentytwenty loss on derivatives instruments contributed a 10 cents per share loss for the quarter.
Seaspans vessel utilization was strong at 97.9% a slight decline from the first quarter of 2019, primarily due to an increase in drydocking rather than unscheduled off hire days.
Containership leasing revenue for the quarter was $292.5 million an improvement over Q1 2019 revenue of $285.3 million.
As of today, all 123 vessels in our global fleet have secured charters in place.
Appias power fleet utilization for the quarter was 63.6%, which is calculated by the weighted a number of megawatts contracted over the total fleet capacity.
In April contracts for eight turbine have been signed for deployment in Mexico, which will improve this utilization rate to 82.3%.
Given the mobile nature of our suite of gas turbine there will be downtime as assets are mobilized to new project sites.
Yes gas turbine utilization was near 100% at the end of third quarter 2019, and the commercial team has done a great job of putting these turbines back to work.
Organization on February 28th to create Atlas Caulk Atlas speaking trading on New York stock exchange under the ticker symbol A.T.C.O. and both cspan, an A.P.R. become holy own subsidiaries of Atlas.
During the quarter and throughout April we continue to grow our fleet and sign longterm charters as a testament of our long term customer partnership.
Here today, we have taken the delivery of six Russell's, which will immediately deployed on long term charters growing our fleet to 123 wrestles with over 1 million T. you.
Four of the 12000, T.U. vessels, well financed through $340 million of flexible financing arrangement at attractive terms, providing cost effective flexible and long term financing with a tenor of 10 years.
This is achieved meant in addition to add in $100 million of new commitments under our award winning portfolio financing program demonstrates c-span's financial strength innovation and access to capital markets. Despite a challenge in market.
Mhm.
That's previous mentioned C-span's business has been minimally affected by covert 19. After the results of our teams proactive and effective mitigation actions.
For commercial and operational developments, we also finalize a mutually beneficial charter modification with a key liner for six of our vescos extending the bearable.
<unk> from four years to 10 years.
Operationally despite at the latest at ship yards, we completed three of the 10 announced scrubber retrofits and expect to complete the rats.
<unk> within two 220 or 20.
<unk> L.T.I.S. decrease 5% from December 2019 to 0.76, and we are working achieve our I.S.O. One four 001 certification by two 220 20.
C-span's future committed revenues stands at the robust $4.3 billion.
Please turn to slide eight.
As we continue to integrate a P.R. business, we have already made strides in improving the business commercially operationally and financially.
A P.R. corporate development.
Concurrent with the closing of the acquisition, we successfully completed the refinancing of a pianist debt with a $285 million. So senior secure financing program consisting of a $135 million. So the term loan $50 million a river over $100 million to institutional private.
Placement traunch funded by Black rock.
Financing optimize is eight.
[laughter].
We expect the turbines to be operational in a second quarter of 2020.
With these mexicali contracts that brings the apiarist powerfully utilization to approximately 82% pro forma in a second quarter.
We continue to execute on our business strategy with strong commitment to E.S.G.
Investing idol diesel generators.
And to make an operational improvements to highlight during two one <unk> availability was maintained at over 99%.
So in summary, I'm extremely proud of the Atlas teams for consistently driving operational excellence, while delivering high quality customer services under these extreme circumstances.
I'm confident that we will emerge from this crisis stronger and the well positioned to succeed with that I.
I will now hand over to Peter who would discuss the content issue of industry developments.
Thank you being.
Please turn to slide nine well, we'll discuss recent developments in the container shipping industry.
There'd been significant impacts on the content of industry in the first quarter. This who's been understandably, primarily driven by the developing countries contraction and global trade as a result of code 19 and the associated.
Look downs in China.
Followed, but it's getting to other nations as a pandemic has spread.
However, does being mentioned.
Changing industry dynamics, which review as being over relatively temporary nature on the to go to bars C-span's business model of long term contracts with cash flows.
But the leading global line that companies.
That said Oh sod with an overview of what we see in terms of global content.
Things supply and demand dynamics.
And then I'll show also some comments on their effect on C. span.
In terms of global trade.
Well much remains uncertain the decline on world trade volumes, you're in your 2019 to 2020.
Expected to be in the range of 5% to 10% in terms of T.U. volumes.
Well <unk>.
[laughter] I've seen positive signs of recovery from China. Many third party research report centers, but global trade levels recovering by the end of 2020.
The R.M.F. has recently provided the projection.
21 should see the global G.D.P. growth.
Of some 5.3%.
Well the presumed botha impact of code with 90.
Being on global tried remains with uncertainties due to evolving cause it affects outside of data.
Notably in the main markets of North America.
<unk> in Africa.
<unk> recently seen a significant slowed down of demand from Europe, and North America, which is reflected in the full cost of demands referencing the slot.
<unk> of.
Europe and Asia.
[laughter] North America, each comprise about 13% of global annual T.U. moves well into Asia comprises about 30% of global Moose.
Lines are managing fret dreads, but extracting capacity three blanking sailings.
And holding tonnage idle for full round wages.
We are cautiously optimistic about a volume recovery merging endless second off of 2020.
We have seen those before during the post 2000 period.
That happens we expect continued robust growth in tried volumes 2021 on one of the world recovery from those things are general shark and the likelihood of catch up demand and volumes.
<unk>.
Yeah.
Moving on to the libel fleet. It was not surprising that those continues to grow as a result of declining global trade due to the code effect compounding the previous trade war impacts and the Chinese new year seasonality and Q1.
The Idol fleet the school, mostly made up both sides segments less than 3000 T.U.
Although we now see small numbers distributed through the size ranges up to 9000 T.U.
Well as large of their souls was drawn by means of liner blank silence.
In addition to these all remind you that the Idol Street includes vessels undergoing scrubber retrofitting through 2020, representing about 2.5% capacity.
And the way the vessels are typically 10000 to you and above and <unk>.
We do you anticipate the in.
<unk> <unk> and stronger tonnage providers, which was a benefit to c. span.
The order book remains that historically low levels, and we expect a meaningful slowed down of deliveries through construction deferrals due to current conditions.
The line those have shown continued ordering discipline.
Partly as a result of the lines partnerships, which was benefit the the supply slot.
We expect the current code that situation to cause extraordinary cushion of line the companies.
Considering any new tonnage requirements unlikely that differ rule of decisions to execute on additional both contracts.
The natural effect on charts of tonnage providers as a dog is the adoption of a similar discipline.
Highlight that.
Portion of the order book is made up of options.
Which are potentially not to be declared in this current environment.
And to be either full gone or the food too light to but that's such we expect the order book to decline further.
Overrule blind the companies have been most impacted by the declines in global trade with their revenues being dependent on T.U. news.
[laughter] C-span is relatively independent of actual trade volumes.
Well, we expect meaningful impact to customers bottom line for 2020.
C-span's diversified customer mix, consisting of the leading global line accompanies <unk> a customer risk during this difficult period.
<unk> currently benefiting from the low fuel price environment.
So during the bunkers make up some meaningful portion of the costs.
So you spend does not pay for fuel, but we see this as a benefit.
Terms of supporting the line us financial positions.
My final point to mention that Ah Scrubber Retrofitting program continues on track with all our vehicles expect to be completed by July.
We continue to execute on discipline growth, taking delivery afford 12000, T.U. vehicles on five you're charges and one 9600 T. this'll on a three a charter.
Since the beginning of the.
We continue to work very closely with our customers through those interesting period in developing and evaluating meaningful transactions.
Well now hand, the cool over to run to discuss the financial results for the quarter.
Thank you Peter if we could please turn to slide 10, I will provide a summary of our financial results for the first quarter.
As previously mentioned the acquisition of A.P.R. was completed on February 22020, and then such outlets natural results for the first quarter of 2020 include me P.R.'s financial performance for the period starting from February 29.
<unk> ending on March 31st 2020.
Maybe ours is strong addition to the Atlas portfolio and we are decided to reintroduce the business to the public know to hear more about the company and how we think about the business in the upcoming court first.
Moving onto the key performance metrics.
Utilisation continues to be driver, but he's been in each yard businesses.
These bands utilization for the border was the strong man.
[laughter], 7.9%.
Decrease rum, 98.2% and the first quarter of 2019, when did decrease primarily due to higher schedule Drydocking days.
<unk>, 0.4% you waited utilization for the first quarter of 2020.
Eight P.R.S. bleep consist of mobile gas turbine, which are the current bogus.
The total powerful utilization for the border was 64%.
<unk> increase is eight of the companies.
Turbines or process of being transported immobilize the power projects in Mexico.
Pro forma for these projects.
You are utilization will be approximately 82%.
Being mentioned do the nature of eight pairs contract.
Hi, I'm associated with mobilized mobilization, which is moving the assets to the project location and he mobilization, which is the removal the assets from the <unk> project location. We expect you already utilization to fluctuating period, where new contract again.
On the revenues died revenue increase 8% to $308 million for the quarter.
P.R. revenue contributed $16 million with the remaining increase driven by the expansion sees band operating please.
On the operating expense side, we saw an increase in <unk>, just $60 million for the first quarter.
A.B.R. contributed 3 million of this thing was partially offset by lower if he's been operating costs per ownership day.
G.N.A. increase 18% $10 million increases primarily due to the conclusion of H.E.R. for the consolidation period.
Operating earnings.
Hmm net earnings were at 127.5, and $35.1 million, respectively for the quarter <unk>.
Decrease compared to the prior year was primarily due to the 227 million dollar one time gain recognized in the first quarter of 2019 <unk>.
<unk> game.
[laughter] bosses to gain was offset by strong her operating performance from C. span in the contribution of A.B.R.
Yeah deluded U.P.S. for the quarter was 15 cents.
Lawson derivative, then determines how negative 10% and pack for the P.D.P.S. calculation for the quarter.
Hi, slow from operations recorder with $130 million.
Compared to $129.3 million in the same quarter of the prior year.
Moving onto the balance sheet, our cash balance at the end of the first quarter, including short term investments with 213 point.
$7 million.
We brought this with a robust liquidity position of $394 million, which also included on drawn revolvers. We have demonstrated the ability to maintain a strong liquidity position, while growing the businesses thoughtful capital allocation and access to global capital markets.
Over borrowings $4.2 billion as of March 31st.
Are up from $4.0 billion at March 31st 2019, you do the acquisition of E.P.R. and additional data to finance the acquisition to vessels described by being.
Shareholders equity was $3.6 billion as of March 31st 2020, and increase from $3.2 billion as a march their diversity. Those 19, primarily related to this year they shoot as part of the acquisition of A.P.R.
We could please turn to slide 11, we will discuss developments in our capital structure and financial position.
We continue to effectively manage our liquidity with a strong look when he does it.
[laughter] $394 million.
We have maintained liquidity position, while growing or lead and improving our maturity profile.
One of the topics I continually disguised as a competitive advantage is our access to the global capital markets.
Despite the challenging market environment, we were able to complete the 285 million dollar refinancing they'd cares that increase our portfolio financing program at C. span by an incremental $100 million and closed on an innovative 340 million dollar a flexible financing facility for for the recently acquired vessels.
Fairfax also contributed in an additional hundred million dollars or by 0.5% ventures maturing in 2027.
We were able to complete all of these financings, including price in 10 or improvements to.
To diversify and improve arbitrary profile, while increasing flexibility across the Atlas Corporation portfolio.
This is a reflection of our global credit relationships and the trust they have in the stability of C. span in eighth yards business model Gore piece of Atlas's strategy is establishing an optimal capital structure at each of its business segments and we've made significant process in this respect.
We continue to focus on improving our credit profile, maintaining our net debt equity ratio at 1.1 over the last year, while growing the fleet in acquiring the P.R.N.P.R.'s, the conservatively leverage business and as well positioned to grow in the near term.
We will continue to focus on credit improvements and optimizing our portfolio companies capital structures as there are meaningful benefits don't continue credit in the hands, then, especially on our long term path towards an investment grant credit rating I.
I'm very pleased with the progress we have made over the past quarter and believe we are uniquely well positioned in the current environment will ever get a strong balance sheet to explore new growth opportunities <unk>.
Capital allocation is one of our Keith focuses and we were excited with the platforms. We have to play capital strengthen our balance sheet and great long-term value for our shareholders.
Finally, we could please turn the slides wall I would go over four looking guidance.
In our previous earnings calls, we provided 2020 garden.
These then.
With the various corporate developments outlets, including additional 80 yard to the Atlas portfolio, we're providing updated guidance for c. span in issuing new guidance for H.P.R.
Please note do that.
I'm 20 guidance for H.P.R. represents the period post consolidation from February 29th 2020 December 30 for 2000 and funny.
Receive band, we are increasing her revenue and operating guidance, while maintaining her previously provided G.N.A. administrative expand operating least guidance.
I've been mentioned this demonstrated the confidence we have in our resilient smile and exhaustive our recent breath initiatives.
Where 2020, an A.P.R.'s consolidated performance.
Revenue to be in a range of 190 million two $220 million.
<unk> operating expense is expected to be within the range of 40 and $54 million.
Expense is expected to be within a range of 38 $40 million binary operating least expensive is expected to be in a range between three and $4 million.
We thank you for your time today and with that I have to call back the operator, who opened the call for questions.
Ladies and gentlemen, if you would like to ask that question. Please pets are then.
Oh, Yeah, telethon T. package, well pasta, just a moment to compile the culinary roster.
You have to question for the line of Chris <unk> <unk>.
You know as you know that it is no more cost of our business to working very closely with our customers you know looking at what their needs off.
So you know in terms of it did did the payments as what do you referring to if you may recall at the same quarter of last year. We actually had that you know these contract we right where as what the Rhine just mention that race out in $227 million of additional you know Ah income.
For the last sheet last quarter. So in general we are working very closely with our customers to providing the value through our expertise in you know whether it's a technology, whether it's a commercial operations or financing to find the when when solutions for both.
Our customers in ourselves. So you know this is intrude in in in the easy time as well as in a difficult time right. Now. So we're very confident and we are actually working very closely with our customers on a daily basis in developing any kind of solutions. So in so far to this year.
Other than the six vessels, we actually <unk> you know extended from four years to 10 years, that's where your previous mentioned there's no.
Other major material re write up the contrast, so far but we are closing with our you know close to the working with our customers.
Yeah and.
Just touching and guidance as well you increase to was that what's the rewrite of the those bareboat charters driver behind that <unk>, just trying to understand sort of electrodes that relative to what you're on the fourth quarter call.
Thanks game the increase in guys as it relates to cspan.
That's a a combination of a number of changes within the the portfolio, but primarily driven by the increase of the new vessels, we added to the portfolio in the first quarter.
Data and then touching on A.P.I., you're focused on utilization.
<unk> you're running at this at the pro forma.
82%, but just thinking about what's going over the past.
For months and took in the conversation dripping with customers, they're like how should we think about that 82% across the balance of these could be relatively stable or should it rich sort of slowly glide down.
Yeah, we don't we don't particularly given the guide dogs on the utilization, but you know what do you a corrupt they pointed out in terms of what we we were going to be achieving terms of the pool format of the utilization is a good reference due to the nature of the mobile power we have to move <unk>.
Project project, so that will inevitably you know cause some downtime. However, those out at Downtimes will be effectively take into consideration when we're looking at each projects would return so that you need to look at bowls incomes utilization and also the project return and that's how.
Oh, we match in the business, specifically I think that you know given the current circumstances I think you know given the nature of H.U.R. business, which is a critical infrastructure by nature. So the demand actually it's it's quite you know stable.
And I think I'll a team actually are working very actively on you know several opportunities and one of those opportunities actually it's in the final stage and then that will become you know if we will be a complete that transaction that will be material. So we have quite quite optimistic and also.
As I said that you know both c-span business as well as a P.R. business critical infrastructure. One is seen transportation yeah that one is seen power as solutions. So that you know rod or I would say immune to in terms of that they meant and and you know as I said the.
Yeah in terms of the H.P.R. business, specifically and I think we are working on quite a few opportunities.
Yeah, and then also.
Appearing notice that there was a man leadership change just wanted to touch on if that was part of the initial plan Preacquisition and if there's any plans for placement in the near term.
Oh, what the plan yeah.
Huh.
Yeah, well, we're we're happy with the decision that chap makes and we will be finding that replacement into a time to lead the h. you ought to the next level.
Yeah I'll leave it there. Thank you for your time.
Thank you.
Your next question constant the line <unk> Ramaswami, what's bank of America.
Hey, guys. Thanks, a lot for the call on on A.P., obviously not out.
Well helped me understand I know the plus plus talked about the about four point it getting dollars lump sum cache. Okay. So how how do you think about not into in terms of time frame in terms of relevance buses.
Bands $4 million in long term contracts of cash flow I mean.
Name that these businesses.
Substantially from year, or what kind of time friend D. issue into that somebody's cash flows.
Hey size eight thing 'cause Ryan from the the $4.3 billion of long term contracted revenue that we talk about that is a function of the the the entire fleet profile that we have it sees band.
You were to look through our disclosures you'd be able to think about the the roll off of of how that half low profile looks over a period of time, it's one of the heat performance indicators as it relates to our management team and how we think about engaging with our customers as well as structuring the platform for business.
And so you know I think what being would echo here is that we're focused on you know maintaining that long term contracted revenue profile because it helps support not only the stability of our business, but also the liabilities associated with it.
And that's out there and so just coming to I.P.R. then how do we think about the time frame but for basketball.
Oh this from any 80 our perspective.
Bored looking basis, what you have right now is through the the H.P.R. guidance that we've provided there will be incremental disclosures in a in a in a similar manner for the the larger contracts we have any P.R. once we get our six k. out.
And you'll be able to see the the same context from cash flow profile Oh Wow.
Oh that's helpful.
Maybe it's moving to the the 2020 <unk> you got it.
Just help me understand incorporate any potential impact <unk> I mean, I know the press release toll.
Talked about the.
The potential impact and the the the line a cost effective and intended that demanded.
They shot isn't apply thing, but this is actually incorporate anything from that how do you think about though.
It's it's a good question when we put out guidance, we try to be as powerful as we can about the current macro environment as well as the micro engagements that we have with our customers, we feel competent and the guidance that we put out as it relates to looking on a a four year basis. The route 2020.
Coded and <unk> related factors and so this this guidance does encapsulate, how we think about the current environment in our gauge ones with our customers.
Sure Okay.
Maybe just wants to pay to I mean, I hate it talked a little bit about this in his remarks, but.
I'm, just going more towards but does those conversations with line across and a potential west <unk>. If there wasn't potential bankruptcy into space or you know a significant kind of material event. If one of your line of possible potty got to think about batteries and and the potential kind of funny.
<unk>, yeah, so Matt from a demanding paki perspective.
Yeah. Thanks, very interesting question I think fundamentally it comes down to how do we.
How do you think about the effect of code on our customers.
Oh of course, we as being a said we worked very closely with our customers.
In all cases, you know that they do have reduced volume's up so that that's something that is quite plainly planned to be seen.
I have in terms of the longevity of the of the situation.
It it you know in general market discussions.
The the opinion is that we've actually bought them to up now and that this would likely a sustained through through the rest of of my.
And the expectations all for increased.
Into a into June and on what's that say the the the discipline affected by the by the line those working by themselves and then also the coordination through the alliances.
You probably noticed that the fried rights of not a drop significantly unless those through the the discipline of withdrawing tonnage you know avoiding over capacity.
On the <unk>.
Add to that the extremely low Ah Ah costs so fuel.
<unk> significant element in in I.
A a line of companies cost basis has been quite advantageous to these companies at the moment.
The hope that gives you some color.
Yeah, I suggest to Spain, or just add to what pita talk about four c-span specifically first of all we you know only work with the dust pups seven of the top 10 customers. So in terms of the customers. There you know there at the top customers with things now within liners basis.
Secondly, we have eight diversified portfolio a month. These <unk> seven customers certainly I I think that you know the line. There's today a much different than 2008 or you know 510 years ago as you know that that they they have gone through a quite a significant consolidate.
<unk> together with the alliance in you know structure in place I take it today, if you're looking at the freight rates for example, they actually hold quite well well adult with the volume comes down but the freight rate has not came down and then as Peter mentioned earlier with the you know reduction of date with a decrease of that.
Fuel price I think there plus on top of that you have the government assistance. So if I'm all those aspects I think we are pretty you know cautiously optimistic about the situation with the line is and it today I think they are much more disciplined a day a much better positioned in dealing with.
<unk> president it a a crisis.
A lot that's really helpful thing and but thanks about till from me.
Thank you.
Ladies intense amount of people like ask a question. Please press start one on your telethon key pad.
Once again that it's time one.
Yeah telephone keypad.
Oh, and now like to tend to <unk> to be chin for closing remarks.
Well. Thank you everyone for taking the time and we appreciate your participation and a wish everyone stay a healthy and safe and we look forward to stay in touch and see you in the next quarter. Thank you all very much.
Ladies and gents not this kind of close today's teleconference. You may now disconnect.
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We can't use the zoom <unk> <unk> <unk>.
Okay.
Should we switch over to the zoom then.
Yeah.
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