Q1 2020 Earnings Call
Ladies and gentlemen, your coal will continue to be placed home use a cold in the conference began the conference will begin momentarily. Thank you for your patience.
[music].
Gentlemen, thank you for standing by and welcome to the Global ship lease Q1, 2020 earnings Conference call.
This time all participants are in listen only mode. After the speakers accreditation that will be a question answer session to ask a question. During the session you would need to press star one on your telephone. Please be advised for today's conference is being recorded if you acquire any father assistance. Please press star zero.
The hand, the conference over to your Speaker today, Mr., Ian Webber Chief Executive Officer of Global ship lease. Thank you. Please go ahead.
Thank you very much.
Good morning, good afternoon, everybody and welcome to.
The G.S. <unk> first quarter 2020 earnings conference.
Oh, it's would accompany todays presentation are available at our website.
Nobody talks global ship lease Dot com.
Slide sworn into as usual remind you that today's call may include forward looking statements that are based on current expectations assumptions and all I got nature inherently uncertain and outside of the company's control.
Actual results may differ materially from these forward looking statements truth, many factors, including those described in the Safe Harbor section with the slide presentation.
We also draw your attention to the restructure section of our most recent annual reports on form 20-F, which is for 2019 and was filed with the S. You see on April two two girls from Tracy.
You can see this on our website overall the fccs.
One of our started was qualified bodies and public disclosures in our reports filed with the FCC.
We do not undertake any duty to update forward looking statements.
So reconciliations of the non-GAAP financial measures to which we will refer to during this call.
Most directly comparable measures calculated and presented in accordance with gap you should refer to the earnings release.
We issued this morning, which is also available on our website.
I'm joined today.
Extra chairman George you recall, our Chief Financial Officer, Tussle surplus Narciso I'm, not chief commercial officer Mr.
George will begin the call with some high level of commentary.
Updates on my commentary is a focus and then tussles terminal I will take you through the quarterly results.
Controls the current market environment.
After which well be to lots to take your questions.
Turning now to slide Sri I'll pass the call to George.
Thank you again.
As we all know when that meets all then I'm, especially then the global corn advise pandemic.
And while our extensive concept cover provides a financial results with a great deal of installation from the markets.
It wouldn't be no surprise to anyone on the score today that the global Corbett 19 pandemic has been the focus of much out of tension and activity in recent months.
The timing in shape of global economic recovery.
In other potentially longer dampen sequences remain open questions.
That said, we believe that they've started to do fleet composition, pontiff governor and balance sheet position us well during these uncertain times.
We're focused on taking specific concrete steps to maximize GSS resilience.
Outside the founder of dry dockings and intended divestment of two ships.
Before I discuss our strategic areas, you'll focus during the crisis.
<unk> packed overdependent on containerized freight flows and demand for ships I would like to take a moment do acknowledge the human element underlying these economic issues.
The health and safety about she fetters I was were less that although stuff I'm sure Oh highest priority to us.
And I'm pleased to report that we have not experienced and meet Corbett related health issues on ship or short.
Which speaks to the effectiveness of the measures we have taken but there are people and to keep the business running smoothly.
Despite the challenging backdrop global ship lease continues to have strong liquidity and a healthy balance sheets.
Supported by almost 730 years dollars millions of contracted revenue over the average off more than two years.
Set against less than 5 million of debt maturities between now and late 2022.
We have made great progress over the last year in strengthening our trouble for you.
Virtually eliminating any debt maturities through the medium tab.
Diversifying El Chapo for portfolio and ensuring that will find that's really the zillion show what Kimball notwithstanding a wide range of potential should not is in an industry or the subject the cyclicality, even the best of times.
We remain committed.
Refinancing the bond.
Sure not possible.
But we're focused in the near them in responding to the challenges posed by the pandemic.
Good God bless strong liquidity and cash flow is our ability to maintain the highest level of question and operational uptime for all ships.
Success at least a GAAP is central to our strategy.
Our competitive advantage.
As a trusted provider containership donuts truck customers.
In much the same way, we're focused on providing consistent high quality the service for our liner operator partners.
During this chart isn't period for global trade, there reliability operational flexibility lotion up cost and higher different contest, although shapes out of heightened relevance to the shipping lines.
Allowing them to maintain that own service and did the on a cost competitive basis.
We're pleased to work with a cross section of the global market leaders in the line and the C.
And now provision of highly competitive best in class Donuts and operations and shoes that we continued to show through good times and bad well into the future.
With that I wouldn't tell the coal to young for a review of our fleet and charter portfolio I was realized an overview ovation developments.
Thank you George I'm on slide four you can see transport partner.
For which all drool, a one of your harlots.
We have some $696 million contracted revenue.
See you why should I read your money contract duration 2.3 years.
As you can see we have limited I can periods for ships in the near term.
Perhaps best illustrated artifact, that's 89% of our adjusted EBITDA based on certain assumptions, which we set out later.
Oh, 89% of our adjusted EBITDA after taking cells from 20 is covered by contracts already.
Just like the limits our exposure to a near term charter markets, but there's likely to experienced volatility that's you're calling as throughout the world work through carry bid related closures and a phased approach.
If I used to purchase reopening.
On slide five blocks reports some additional color on aspects of our fleet. The George mentioned in his opening remarks, mainly its ability to carry a higher number refrigeration contactless well recess.
Using a in some ships, which have market, leading reefer capacity and thus far.
The reason I want to emphasize this particular aspects of our faces that reficar. Okay represents both the fastest growing elements are containerized trade and also provides premium freight great. Congrats for the liner operators and Petro stands at <unk> or dry container.
Among other things refunds are utilized extensively as a bond to link in the global supply chain for food stuffs medicines.
Highly important segments of containerized trade considered to be running some less susceptible to economic fluctuations.
Slide five shows a the superior brief the capacity of obsolete.
Midsize and smaller ships with such high recent capacity represent.
Outliers in the markets, we tend to come on a employments earnings and valuation premiums relative to a standard vessels. So I'm, just saying sorry.
Hi. This is often on appreciate you bought financial investors.
We view this hybrid for capacity as an important competitive differentiation for our vessels.
But proven ability to come on those premiums in the markets subs as proof that belong to companies our customers are great.
Moving on slide six without long that first quarter 2020 results and yesterday targets.
Throughout the quarter, we continue to generate strong predictable cash flows from my contracts its Charles to cover.
It's $70.9 billion operating revenue.
She knowing point $6 million of adjusted EBITDA.
$10.5 million of normalized net income, which is adjusted for noncash impairment charge $7.6 million and for $2.3 billion net premium paid on the redemption of repurchase Oh, our 9.87 point, it's too late Twentys <unk>.
Our operating performance with of course was solid that's where our utilization levels much 2.1% Oh like this reflects extended dry dockings relating to cope with launching delays and shipyards booking work is simply taking longer.
Our operating expenses of $6352 per Undershipped <unk> slightly reflecting the addition of newly acquired post Panamax ships I never integration, that's where I see.
Oh commercially we were able to extend charters on seven of our smaller vessels achieving rights of between eight and $9000 per day situations are between a few months under you.
I will talk more about markets or shortly.
We also extended the charter one our recent Declawed post Panamax ships 70 to 90 days from early April.
As a 40% higher Charles right with the extension expected to generates approximately $1.2 million of additional EBITDA.
Just as importantly, we took steps to reduce our cost of debt and further extend the runway on that debt maturities.
We refinanced a 46 million dollar facility to you at the end of Twentytwenty utilizing a facility agreed last year $36 million also I'm, a new $9 million unless he agreed recently.
We have negligible.
Mature, which is not for the balance of this year on next year.
We opportunistically utilize the proceeds of Iraq, the market programs right Eights and street I'm three quarter percent series B preferred.
Bombs and down 8% notes ultra cool $46 million of our 2022.
Senior secured notes.
And your purchase $9.1 million those notes in the local market the discount.
Meanwhile, our cost of debt Fools as libel drops as the majority of I'd actually strikes the right.
I'm just your says we continue to be in discussions regarding the opportunistic refinancing of the remaining $270 million will show. The 20 trends do you know, it's just an outstanding none of the policies with whom we arent discussions have withdrawn, but it must be acknowledge the progress seasonality closely.
Well I mean I showed you build a 7.4 million dollar anymore causation payment. We made on April one such yes on out a senior secured credit facility, which is tied in with the 2022 nights. We stand here today with only 4.7 billion. The told us of debt maturing before like 2022, keeping us an X.
Runway through the near and medium term.
With us on outsold the cool, it's Tom Mr. walk us through the Mark.
Thanks again.
Let's turn now to slide eight.
Okay.
So in such on certain times, when Taesa expectations and policy will change on a daily basis forecasting is even more treacherous going or unusual.
So I would describe what follows a heavily caveated view, which is likely to change as conditions of old.
The charts on this slide essentially translate the latest plan that macroeconomic full cost with negative GDP growth of 3% in Twentytwenty, followed by 5.8% positive growth in 2021 into container shipping times.
So what potentially looking at collagen volumes shrinking by between seven and 8% in Twentytwenty.
She is more or less in line with what we saw back in 2009 during the global financial crisis.
Followed by a rebound or more than 10% in 2021.
And in a site, which is our usual data provider reckons, all trades will suffer but the main lines advances the trans Pacific and Asia, Europe trades, primarily unlikely to be hardest hit.
The chart at bottom right shows the anticipated demand impact in aggregate set against a much higher conviction estimates of cellular capacity growth of only 2%.
Well so both this year next.
So very modest supplies like goods.
Slide nine.
Chose what's happening in the freight and charter markets at the moment.
Taking a left on chalk first which provides freight rate indices, the containerized conquer out of China.
You can see that rates, who come under pressure this year.
Nevertheless, they remain above levels seen 12 months ago. Despite the cobot 19, pandemic, which is a testament to the capacity and pricing discipline exercised by the container shipping lines.
Turning to the right short term channels to market rates are shown on this chart and having held up well the first couple of months with this year.
I wanted to rates have come under pressure in recent weeks as the coated 19 locked down so spread and does idle capacity has increased in the market.
But the market, giving back much of the rate gains builds up during the tight supply environment to 2019 as a result.
Slide 10 puts current charter rates, an asset values in a historic context.
Charter rates, which are the red line, even during 2019, well below the historic average for the last 21 or so years.
And now converging on where they were at the beginning of 2019, which is still about where they watch or in the global financial crisis when rates bottom bounce around opex.
Asset values, which at the don't really have remained at or below levels seen during the debt for the global financial crisis, suggesting that there is no real asset bubble.
Bust this time around.
It's also worth remembering and I'll come back to this Lisa but the order book to fleet ratio immediately before the global financial crisis was about six times higher than it is today.
As an important point arising from disciplined in ordering in recent years, probably driven by country constrained access to capital admittedly.
Compared to considerable speculative ordering much of it by German owners under the tax advantaged kg scheme in the years running up to 2010 age.
Slide 11 emphasizes the operational and commercial flexibility of the midsize and smaller Containerships, we focus on DSL, explaining why they form the backbone of global container trade.
The deployment maps of the top of the Slide contrast, west sub 10000 to your ships are operation, which is everywhere bus is where the big ships have deployed which tends to be on the main lane east West arterial trades in other words, the transpacific and Asia Europe.
As an aside hopefully you can see from this chart that some of the lines loop around the capability.
Which is the southern too.
Okay.
Where a container shipping lines have chosen to go the long way round rather than through sewage. This is a function three things one the high Suez Canal challenges.
Two exceptionally low fuel costs, which are hoping shipping lines across the board.
Three the rational deployment of excess capacity by the liner companies themselves.
[noise] changing tech the pie charts at bottom left shows composition of global Containerized trade, roughly 70% of which 20, you've all im isn't the non main lane intermediates and regional trades typically served by midsized and smaller ships like ours.
Slide 12, Rexona section by focusing on the supply side of the picture.
Yes, as you can see at top left idle fleet capacity in the market is north of 10%, which is the highest level seen since the global financial crisis.
Yes, exacerbating. This is the fact that cobot 19 has triggered the temporary closure of the world's principal ship recycling facilities.
Taking a build up of ships some of which would be expected to be to lease it from a fleet upon the anticipated reopening of those facilities. We hope comparison you soon.
On downs would be though the industry is facing a challenging knutson outlook.
On the flip side. However, we believe that the supply side fundamentals lay down from a bottom hole, the slide, namely negligible or even negative fleet growth.
Combined with a minimal orderbook pipeline provide the foundation for an earnings rebound from midsize and smaller containerships when the world begins to recover from Cobot 19.
So on that notes all around the called tensile still talk you through all financial.
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Thank you very much them.
Slides 14, 15, and 16 show up I know didn't perform a consolidated balance sheet statement of operations and states Mitchell gas flow based on the first quarter of 2000 spent.
Rather than going through every line item, let me point out a few key items.
We generated revenue was 70.9 million during these for sport or the 3.3 million increasing revenue year over year was principally due to the acquisition of seven vessels since March 31st 2019.
We generated a net profit of 0.6 million after a non cash impairment charge of 7.6 million for the two vessels would be lingus element These which we plan to sell and 2.3 million net premium they don't the redemption in repurchase of approximately 55.1 million nominal amount for 2022 notes.
In the first quarter of 2020 did it was 224 blocked off hire days for three regulatory Drydockings complete and two scrubber installations from brokers 59 days I'm glad to have higher and 56 days of idled ballast I'm, giving in place nation of 92.1 person.
We are experiencing extending CPR time due to the effects of the virus and congestion in the U.S. as he has mentioned before.
The average operating expenses their ownership days, including management fees in this quarter was 6352 down by 225 per day year over year, mainly as a result with the acquisition of the seven vessels noted above all of which are post panamax with higher.
Operating expenses.
General and administrative expenses were 2.4 million for first quarter of 2020 Cooper to 2.5 million the same quoted in 2019.
Average Jinan end munis that these expenses paid ownership days in the first quarter of 2020 went down to 595 from 718 in the same 14 2019.
Finally, the total cash on hand as of end of the quota of 2020 was 97.7 million after the redemption of 55.9 million or for 2022 notes.
Slide 17, now shows information on scheduled Drydockings and upgrade watched what seems to be modeling capex into five for the year.
And slide 18 use are usually lose <unk> adjusted EBITDA to date plus season, we have revised dependent 15 year historic average charter rates been vessel size I should emphasize here that the this is not the forecast I would now like to technical back to Georgia for closing remarks.
I will briefly summarize on slide 20, before moving to a lot of questions to your questions.
We have entered this current period of uncertainty in the global economy on an active footing.
And taken steps both in the but sitting here.
So the early part of Twentytwenty that have reinforced our resilience and downside cover that will serve us well over the period of net then volatility.
While also ensuring that position.
Again for them and you know the comedy.
We have strong downside protection.
Oh, that's servicing Capex I wouldn't governed by can talk to cash flow and strong cash position.
On top of that we haven't negligible debt maturities before late Twentytwenty too.
Outside those.
Our older for me.
Well, our non cancellable.
And do not have any force majeure close.
We are focused on midsize and smaller fleet segments, how flexible deployment options and support the fundamentals.
Most notably then the gives a build to negative net fleet supply growth in recent years and the mini model order book covering any they leave it isn't the next 18 to 24 months.
Now this is very important this is radically different from prior downturns, which was exacerbated by overcapacity and high order books.
We have provided vital services and close partnership with Atlanta customers.
Our consistency.
Consistently excellent operational performance and ability to provide highly efficient when specified vessels makes it possible for customers to lets see cost efficiencies in a highly competitive and vitamin.
Additionally, our highly for capacity supports a line of customers ability to participate in a high margin fast growing business segment, what's supporting supply chain and they did the for Sensata commodities, such as food stuffs and medicines.
Finally, we're prioritizing the safety and well being about question, then as well as our financial strength and flexibility.
Our operational excellence and the only around the resilience of our business in a complex unsettling time.
Now these priorities are the core of our business throughout the economic cycles.
Let's take on the greatest importance in periods of stress.
By staying true to these principles and executing our strategy. We believe that just saying is well positioned to weather. The storm ahead of US and do you do lies the substantial benefits about device for had gone to cover.
Highly efficient when specified fleet, our integrated management platform and I'll close relationships with topline occult customers to buff positioned the company for Mike and the comedy.
Without food <unk>. The please take your questions.
As a reminder to ask a question you need to press star one of your telephone to withdraw your question press the pound key.
Your first question line of landmarks with B. Riley FBR.
Thank you aren't good morning, or good afternoon, depending on where you are.
It's in the prepared comments on the industry overview pointed out correctly that the rates on the liner companies are holding up a part of that is because there's been some idling of tonnage just to keep the capacity tighter.
Do you anticipate a correction period as a liner companies start releasing more capacity or.
How do you think that will affect some of the recharge. The vessels you have opened for Recharter.
Tom you want to take this huh.
Sure well them all have occurred in any case.
Its very difficult to tell to tell me the truth and all I can do really is point back to the fact that.
Unlike previous downturns the a the lines have kept the discipline a in terms of capacity management.
And as a result freight freight rates have remained tight I can also I suppose point the fact that.
Much of the idle capacity at the moment.
Is actually a operator owned tonnage. So it's it's ships owned by the liner companies themselves on it tends to be the much bigger ships, which as we remote all deployed on the big East West arterial trades.
So not really ships that against which all vessels would be competing in an open markets, but much more mass it's difficult to say.
If I may add what do we have seen in the past a dumped that enough 2009 the.
The liner companies what what they have done as they have kept a big sips idle as long as necessary for the market to.
Normalize.
So given the fact that since then we have a substantially bigger fleet of lots shapes.
I would imagine that liner companies would keep idling. These 20000. They use ships are most likely and letting the rest of that fleet opened eight too.
To to minus capacity.
That's what would be my question I would guess going forward, which is positive for the.
Operator, Ole Miss like I, just said.
That does not own shuts lots ships.
Great that's that's it.
That's very helpful.
And on the operations are your operating cost per vessel went up for obvious reasons you added seven vessels. They were larger operating costs are higher.
During the same period.
You are you able to take a similar amount of revenue credit for owning those vessels or was there a lag time between expense incurred and the and the realize realization of revenue.
Yeah, how should you want to yes of course of course during that time off the operation most of these messages public or some dry bulk. So are these kids we have occurred.
Hope expenses due to the time, but we haven't received via brokerage revenue everything will be normalize on the second quarter.
Correct.
Thank you see that distillate explain a little bit this the deal. It was on some of these hips, one with Duke them over that we would.
Boston Special Survey, and then get a clear five year three year employment on the ships.
That is why we had to perform the dry docks fish surveys right away and then have a clean up a runway off the remaining of the chapter.
Great. Thank you very much.
Your next question marks bandwidth DB.
Hi, guys are makes a lot for hosting the call and solid performance I guess, just given the environment. We're in I wanted to ask if any of your charters.
I've looked to renegotiate or any of the.
Charters in place.
And if so how the company has responded.
Well, we have not had any of the negotiations and I think that we haven't had the negotiations in our history, but the end can add to that because.
I was not in a company a few years back.
Yeah.
Yes, sure George I'm like we're not we're not talking with anybody about some.
About renegotiating terms, but it's Joe says it happens from time to time to last ones. So for us was.
I think back in 2014.
When we agreed to.
And then the Chaucer rates against four ships to against a three year increase in the duration of the chances are called amend and extend.
What she was clearly beneficial to see Wallace.
Grouping aren't our credit some part halt but she wants to go through it question Mark as soon as to what you're pretty much all says maybe not we're not talking with anybody right now.
Okay. That's that's helpful and its encouraging I guess the C liquidity position that you have as well as basically the runway until the upcoming a bond maturity and and I guess given the circumstances, maybe a refinance is it is imminent.
As a as would have been plan, maybe a few months ago, probably you could have.
Look to call it a.
It's cheaper, but I guess.
What is the most current thinking with respect to your upcoming bond maturity to extent.
Right.
The refinance is up like we said on on the on the floor on the call. He is a top priority and it was a all along the discussions we have we've been having with various punished distribution machine achieving that.
I have been that.
They do.
For what moving and and none of the boxes that we have been in discussion has.
You know that backed off of the said discussions on unfortunately, the pandemic game and a focus he's right now into this which is a far more brushing.
And demanding.
Requirement a once this is settled and the market settles do you know more stable state and we were going to refocus back onto the.
Finance at one thing that is so important dimension ease that as time goes by our bonds maturing anyway show the.
The net position.
Oh, gosh blast that up at any given die more or less it's the same as time goes by so we're not building up.
That and as timely as is slipping away.
So.
That's shouldn't worry any of our investors.
But yes with fully focused on the refinance as before.
And final question.
Encouraging to see the new charters.
When did those come into place what part of the quarter was pretty cold bid or.
Post.
Okay, which would it would seem to <unk>.
Charters to you referred to.
I think there's some extensions.
Presentation it looks like.
Uh huh.
I think I think I think the on some mark is both a before during and what was wouldn't you hats off to sanction.
So the transfer market is obviously a bit more challenging, but it's still active and we've been able to think ships.
Despite the I'm done it.
Yeah, I'm, just looking to the presentation the charter contract cover it looks like.
It looks like there's the some smaller vessels, which Ah.
The two this year.
9000 pretty good levels.
So I'm wondering whether that occurred or you know the very beginning of the year or a.
<unk>.
You know the market can be more difficult or if it's a it was more of the back half a quarter.
Mark This is Tom I would say that the a 9000 dollar per day rates or where agreed earlier in the year and the 8000 dollar day rates for the the Kesa, which is of the top of slide four.
Was agreed when the market was beginning to get more challenging.
Okay.
Thanks, again, guys and.
Quarter.
But for me thank you.
Next question, Jay men's Meyer with value Investor edge.
Good morning, gentlemen, thanks for taking my question.
I don't drink so what.
Continuing the discussion there I think we had a good start asking about the charters I noticed there all kind of short term and I saw the same from some of your peers that have reported a we talk to of course, some array as well and a lot of short term little extensions for six months 12 months, maybe even shorter is there any interest in the market right now for you know something of a longer term.
Nation of two or three years or are these just little patchwork three months six month 12 month type deals.
Well I'll I'll I'll try answering that when Tom can outside.
Right now that that nobody knows when the world economy will be fully opened in battle the normal operation.
Equally our charters therefore, the for the time being we're not seeing really the market. We're just seeing.
Psychologically different market what people are having an uncertainty and when you haven't set in D. you just want to keep rolling on do you see whether that this.
The end result of this pandemic.
Economically economically wise will end up and that's the time when the Atlantic on Venezuela come into the market for some more material engagement with owners and and longer childless. So I do not believing that next up two or three months, we will see Atlantic company willing to commit long data.
And lump that means more than 12 months, if at all 12 months.
And then they have a view of what the you'll norm for demand would be.
I'm just trying to those remarks like I agree completely.
I think but the short term nature of the contract cover at the moment is not just something that suits. The minor operations. It's also something but who knows prefer neither neither the mine has no ourselves would want to go along.
In such an uncertain context, so what we're both waiting for more visibility on the market.
Yeah, certainly makes sense, you don't want to trade off your and your longer term upside as well it if things pick up.
Look I mean last year, when we're talking a last fall.
2020 was that pivotal turnaround you're right, where you completed refinancing of those 2022 notes we were talking about maybe you bring in a dividend back Abdullah Corona viruses has changed a lot of those things I, but I did notice that the started the year you repurchased a little bit of those notes you called a little bit them back they now trade around.
<unk>, 80% to 85% par they have yield to maturity of around 18% right. Now is there is there any additional levers out there to maybe Houston open market repurchases or are you referring to just keep a high cash balance for now.
Well.
Like we did these key in these uncertain times and we will maintain liquidity and daily we can see clearly the light at the end of the done it you know when we see the market what settings.
And then once that's done then we wouldn't rethink and that become should there, but I was just I was just a day when we don't know really how the market will be developed Oh, we wouldn't want to you know lose the strength of our liquidity, which is a very material.
Vantage about company I don't know yet and if you have any further.
Coming to I know I think that's not sums it up modestly.
Anywhere with where we're in a relatively good position with without trying to cover I'm forward cover.
But we're not complacent cash is king.
We've taken steps to defer dry docks.
We're reducing could the work being done on dry docks that become tougher with looking again that opex to tick to bring that down.
So were conserving cash and whilst yes.
It looks like a small treasury decisions you got in Bali backed bonds and the latest which is where the trading among them.
We don't want the prejudice the completeness <unk> cash position, just just yet we need some more visibility.
On a on the recovery.
Certainly certainly makes sense I. Thank you for your time this morning, I, Georgia D N and best of luck over the coming here.
Thank you.
Your next question final Holler Blom will you be yes.
Hi, good morning, well I appreciate the need to husband cash and I think being conservative in this environment is of course, the right way to go.
Some of US were long term owners.
Remember that there were a number of restrictions in place previously to this year about pain.
If you saw the market.
And conditions improve and become more normal.
Is there anything in any of your financing arrangements currently that prevents the board from paying cash dividends to shareholders.
Yeah again.
There there are some some theoretical limitations, but in practice no Howard.
The principal limitation is in our phones instruments.
But just to illustrate the points.
If we raised cash equity.
Then we're allowed to pay dividends or repurchase stock to the extent of the cash that we break we raised $50 million a cash equity last year. So we have $50 million dividend capacity.
Pickles and because of that we're also allowed to pay a dividend.
Now based on 50% of last years or so so we are committed to pay a dividend.
But conserving cash as you are.
As I've, just said one or talks about buying back bonds under your bumps up 'cause conserving cash right now is key to us, but we do understand the importance of the dividends in due course school I patient comment in a common common stockholders.
Thank you very much.
As a reminder to ask the question you need to press star one on your telephone.
To address your question press the pound key your next question might I feel Larsen will mill Screed capital.
Hi, guys, a solid quarter I also just wanted to ask about the notes really quickly. So just to be clear have you repurchase any additional note since the end of the first quarter.
No nothing.
So the 267 nine is the total amount outstanding right now Okay. And then is there anything in any of your financing agreements that would prevent you from repurchasing those notes in the future you know should things change.
No.
No not nothing.
Okay excellent thanks, guys great quarter.
Okay.
Again, if you watch messy question you need to press star one of your telephone.
And there are no other questions I will now turn the call back over to Ian Webber for closing remarks.
Thanks, very much sense true interest and on your questions. We look forward to providing you with a further updates on GE or sell in the markets.
It's from the Oh, a second quarter closes.
So we'll speak to that thank you very much.
Ladies and gentlemen. This concludes today's conference call. Thank you participating you do you may now disconnect.
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