Q1 2020 Earnings Call
We continue to stand by feel confident well begin shortly.
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Star bulk carriers confident score on the first quarter 2020 financial results.
We have with US Mr. Petros Pappas, Chief Executive Officer, Mr., Hamish Norton, President Mr. Cmos Spirit I missed the crystal spec lattice kind of chief financial officers of the company.
This time, all participants are in I listen only mode they'll be a presentation followed by a question and also session.
Tom If you wish to ask a question. Please press star one on your telephone keypad and wait fuel name to be announced.
I must advise you that this conference is being recorded to date.
We now possibly go to one of your speaker Mr.
Cmos Sperry. Please go ahead Sir.
I would like to welcome you to the Star bulk ideas conference call regarding our financial results for the first quarter Twentytwenty.
Before we begin I kindly ask you to take a moment do read the safe Harbor statement on slide number two apart presentation.
Let us know turn to slide number three over the presentation before to somebody off our first quarter Twentytwenty financial highlights.
In the three months ending March 31st Twentytwenty.
<unk> news amounted to 243 million seaborne, 7% lower than the 104.2 million for the same period in 29 P.
Adjusted EBITDA for the first quarter Twentytwenty was 32.6 million versus 43.9 million into first quarter 2019.
Adjusted net loss for the first quarter amounted to 22.2 million or 23 cents loss per share.
Versus 8.5 million adjusted net loss for nine cents loss per share in Q1 wouldn't be 19.
Our time charter equivalent rate during this quarter was $10949 per vessel per day.
Well focused today stands at 107 million with both times debt at approximately 1.6 billion.
Today's presentation, we focus on our cost evolution during the first quarter they liquidity enhancing measures we are undertaking.
The finalization of our scrubber program.
Our operational performance and they industry fundamentals before opening up the questions.
Slide four graphically illustrates the changes from the company's cost balance during the first quarter.
The company started the quarter with 126.3 million in cash and generated positive cash flow from operating activities or starting to 2.1 million.
After include the that's proceeds any payments GAAP experiments force drop it in ballast water treatment installments and dividend payments. We arrived at a cost by that's over 131 point feed me on the end of the quarter.
Given the broader market and market uncertainty, we have taken failures proactive actions to protect the financial help our company during these challenging market.
Slide five has an overview of got into liquidity enhancing measures.
One of our priority this has been to increase liquidity and strengthened our balance sheet through vessel refinancings.
I spoke to date, we have received commitments from the European lenders for new financings, which we lease up to 27.5 million up additional proceeds.
We continue working with lenders to significantly increase this figure in the coming months.
On that every new side, we have taken fees it got and paper topic. That's for the remaining goes twentytwenty.
On and non scrub basis for 74% of the second quarter.
Well I down eight point $5000 birthday, Burberry, <unk> and 50% over the second half of the year at the levels I want to $11000 per day per vessel.
Our olean breakeven cost is up 11 point $3000 per day per vessel, including scrubber cost and that service.
We have hedged a differentiated between eight to follow Npls are full for approximately 20% up our annual bunker consumption in the paper market. When did the presidential was much higher than it used to date for it now, but its price of $212 per dawn.
Given the got only decreased Bryce. This yeah, just are willing to money, providing a significant contribution to our bottom line.
In addition, we have taken advantage of the decrease in LIBOR care and we have locked approximately 24% of our base rate exposure 380 million enough our future interest rate exposure up enough. It adds up to 66 basis points.
Finally, we continue to publish on having lean and efficient technical and operational management for our fleet.
We remain competitive.
Based on full year 29 figures star bulk has an opex NGL <unk> competitive advantage already I bet, it's beer costs for 58.5 million on an annual basis.
[noise] insights seeks we're providing an update on our scrubber retrofit program.
I spoke to date, we have completed all scrubbing installations on 114 vessels, which are now certified and nobody shot.
She was the beginning to for the year, despite the meaningful delays due to the Cardona buyers. We completed installation, we seen minimum delays and how but no more than 15000 running days experience across the fleet.
Slide seven has an overview of the total capex payments, where our scrubber program.
Our total expected Capex is estimated at 212 million with approximately 850 million of secured debt financing in place.
I saw on May 22nd the remaining Capex ustwelve million out of which 7 million. These that's fine.
Please turn now to slide eight where we summarize out operational performance.
Opex was at $4047 per day per vessel for the first quarter of two NBP Twentytwenty pressures 4000 in $15 per day per vessel for Q1 29 theme.
Net cost you can they expenses were $1057 per vessel per day for the quarter or 11.5 million.
Actively inline with last years levels.
The combination of our in house my husband, and the scale of the group enable us to provide our sabby she's had very competitive cost complemented by excellent management capabilities with Starbucks consistently ranked among the top five monitors evaluated bite IC.
We are also got any number one among our leased it appears in terms of privacy raising.
Slide nine highlights that star bulk is the lowest cost operator, among our U.S., Lisa dry bulk beers with operating expenses approximately 19% below the industry I, but that's based on late this publicly available information.
Slide 10 summarizes the evolution of Drydock expenses and built a la carte days for dry docks aswell as scrubber installations.
I will now pass the floor to our C O Petros Pappas for the market update and his closing remarks.
Thank you a CMO.
Please turn to slide 11.
Stage of supply.
[noise] during the initial four months of Twentytwenty, a total of 17.7 million deadweight was delivered in a 5.9 million deadweight was sent to demolition for a net fleet growth of 11.8 million deadweight or 1.4%.
It does a little just 3 million deadweight has been reported by Clarksons as from orders up last April the lowest level in more than 20 years.
The order book currently stands at 8.1% of the fleet the lowest level since 2002.
The expected reduction of steaming speech did not take place in the first amounts of Twentytwenty as crude oil prices collapsed to levels last seen in the late nineties.
The first four and a half months of the year. The average speed. The fleet was 11.3 before notch down just 1% to last year.
The Corona virus outbreak during Q1 effect that agents shipyards and caused delays in newbuilding deliveries and retrofits.
During the last months it has seriously affected Indian and bunch, but this ship breakers and brought demolition activity almost to halt.
During twentytwenty the dry bulk fleet is projected to expand that Brooks monthly went up a sense.
As the Malaysian for Capesize and coverage to be live sees.
Should pick up once cup, yes resume operations following the looked up.
Let's now turn to slide 12 for a brief update of the math.
According to Clarksons that they'll dry bulk trade during 2020.
Estimated to decline by 3.6% year on year down from 0.6% during 2019.
Cobiz 19.
Key factor behind that construction.
The projected declined as expected they place mainly on the back of coal and minor about trade weakness concentrate this on the first half of the year.
Synchronized global economic stimulus so the expense trade activity during the second half and then the 2021.
We're clarksons expect the man three bound by 4.3% in thumbs and 5.3% didn't on Myles.
I don't know straight during full year. When it went these projected to stay flat in tons and to expand 0.6% input on Myles.
The latter Nora has suffered major supply disruptions since they real Medina, Dan disaster took place in early 2019.
During the first monstrous twentytwenty, but weather conditions and the color I'm not virus outbreak have pushed back the recovery time line.
As he likes putting the initial four months for the year are down 8.6% with a strong negative impact from Capesize done Myles.
The only iron ore imports in early February were affected by a tropical cyclone that led to further tightening of international iron ore supplies.
The last two months exports have fully recovered and now operate close to full capacity with average weekly levels up 11% year on year.
Despite the Cardona virus outbreak, China year to date crude steel and pig iron production increased by 1.2% and 3.3%.
Actively.
China began to stimulating the economy before the Cobiz 19 outbreak and last week announced additional measures with especially was focused on infrastructure.
It's worth noting that iron ore stockpiles have used significantly and the newly stocking cycle. During the next two years is likely to support the iron ore trade. However, still production from the rest of the world remains a concern with volumes down 6.6% during that first four months.
Focusing on April that's some of the world was down 7% with India's steel production contracting 64%.
During the second half of Twentytwenty gradual recovery O Valley exports is expected to take place and so the inflate the iron ore ton miles.
Coal trade during Twentytwenty is projected to decline by 5% in tungsten, 6.4% don't miles as the Corona biosystems imports requirements, while hi, close Atlantic experts in two ways you are being squeezed.
China thermal coal supply has been recovering faster than demands.
China domestic coal production expanded by 3.8% till the end of April why electricity generation declined by 3.5% as a result of the contraction in industrial activity.
Thermal electricity generation decline by faster pace of 4.8% year on year during the same period.
With signs of recovery during April and May.
At the same time coal imports increased by 26.9% during the first four months of a year. Following the December 2019 import bad increasing inventory is the same pattern is taking place in India with have more coal stockpiles as power plants present, this standing at record high levels.
During twentytwenty grain in soybean trade is projected to increase by 1.7 and 2.5% in dunson ton miles respectively on the back of a sharp rise in Latin America soybean exports generic program U.S. exports.
The phase one today deal is expected to wait positively on the recovery of U.S. soybean export volumes during the second half of Twentytwenty with Chinas demand emergent higher after they love Downs and as the Qantas.
Big population recoveries from the African swine fever.
Hi, potentially this may however, a rise in the U.S. China relationship over the breakout of <unk> 19, and then battening you stick their Hong Kong measures enforcement by China.
Minor bulk freight during Twentytwenty is estimated to declined by 6.6% at 6.9% in doesn't done miles respectively. West Africa bauxite exports are however, projected expense by 7% during the year.
And generate done MPG side, especially as it is worth noting the clarksons forecast minor bulks the experience at 7.7% incorporate yearning went to 21.
As Dan I'll call them, and we expect disruptions of both in Memphis appliances, I, both commodities due to the Corona buyers to gradually is dry bulk trade has the upside potential in the next quarters and further into 20 to 21 was dry bulk freight is expected to improve once oil.
This is recovered to sustainably inducing batches for slow steaming.
Last but not least although the fundamentally important by almost went its wendy has been suppress the demands shop and collapse in oil prices, we remain optimistic on the bras pixel bar scrubber feed that fleet in the coming quarters, well the supply side smaller sizes are likely to benefit.
From slow steaming, you'll do lower spraberry penetration than capes or the demand side, we continue to expect capes the benefit most from cargo Cascade is today's recovers.
Without taking any more of your time it will not pass the floor, all but to the operators to answer any questions you may have.
Thank you.
Ladies and gentlemen, if you wish to ask a question. Please press star one O'neill telephone keypad.
First question is from the line of.
<unk> from Deutsche Bank. Please go ahead.
Hi, everybody I hope, everyone is safe and healthy.
My first question is on the forward bookings you guys talked about in the slide presentation.
I know you noted that rates are on the scrubs basis.
Obviously still believe it or not a fuel spread out there and then there's obviously some gains on the fuel hedge I think Cmos you mentioned so you can just help us think about how that would translate to.
The time charter the Tc equivalent uplift.
I mean should we add 1000 $2000 per day to the rates that you're basically outlined in the slide deck just helps when thinking about how that translates to the Tc.
Sure Hi, this is resource.
Basically varies as spread right now between high sulfur fuel oil and a very low sulfur fuel loyalty and be spread for the remainder of the year in the paper might give you some of them wanting to hedge ease at $79 per tool no.
Even the very low freight markets, our consumption is lower than what it would have been a healthier markets, but we're seeing consuming in our fleet on average approximately $60000 bear in mind.
Therefore, if you assume I will now averaged 80% days I see.
And and 9% capture of this Robert just conservative given up in larger vessels, we have 100% ending smaller if anything we have closer to 90.
This is basically a in additional revenue of.
Approximately 24 media for the remaining over a year from June until December 2020.
Now if you add to that the fact that we have hedged on that portion of our consumption I My high levels. A this is $14000 per month.
Not rich Lavin, no five $213 per dollar I forgot to mention because they're not decent no revenue of approximately 13 million.
Therefore.
This is an additional revenue of approximately 37 media for the remaining of the here, which is divided by the basin available ownership days. This translates to a premium all five alpro with approximately $1500 per day.
All right he sees higher I say as hopefully the sprays moves higher but species that these are the numbers right now.
Okay. That's very comprehensive so basically the 11000 book in the back after the 50% days is really more like 12500. Once you overlay some of the scrubber Benaissance correct.
Correct. One one note here is that dog for the second quarter given that there was a violent moving that prices all.
Fuels.
We expect that there may be a seats in oh, the P.C.S, even effectively the fact that that DC numbers I want to report are being reporting on my first seen first out makerbot.
Bears the numbers that we have laid out there that are basically calculated on a there based on the garden market prices.
Therefore, specifically for the second quarter, you may see a in the D.C. that we are being reporting.
Right, Okay that makes sense and then so obviously that allows you to have a good visibility on a big chunk of your revenues and cash flows for the remainder of the year, but then you also have 50%.
The days in the back half that are not booked at are exposed to the spot market. We obviously a little visibility. So I mean, obviously you guys are.
Closer to the market much closer to the market than I am most of us or in this call. So I think it would be helpful.
I understand you have $107 million accounts and the balance sheet as of May 22nd you're going to add 27, and a half millions of down on the financing in July so.
Pro forma that through the ended the year, what do you think it's kind of a reasonable way to think about ending cash balance of the I know, there's a lot of variable.
Obviously uncertain, but I, just you're closer to the market we are.
Hi, everybody understands.
Gotcha.
She basis.
I mean on that basis, so far we have done already.
Fixing a freight average as well on the hedges on advisor side.
On the basis, all five discarding or if they occur.
Our cash balance is basically there's always.
Basically around where we.
Hey, low today I will be in June and then increase these up until.
The ended the year, we basically expects to be on that basis.
Got it if they prices.
Approximately 30 to 40 million above where we stand today by the end the year.
Got it okay. That's that's encouraging and then last question before I hop off I wanted to ask about the additional opportunity for refinancing that you mentioned on the I think Petros mentioned on that.
Press release, obviously that has to be considered in the context of asset values.
It just seems like the bid ask spreads are narrowing and Drybulk buyer Sabre, which is what you would expect given what rates are so low.
Reasonably long period of time.
Could you just talk about what the impact is it all to your net LTV, where that does that stand today.
Warm after the financing that you're doing.
And what is the additional room for additional liquidity in that in that kind of that LTV framework.
So just clarify as we as we leverage as we leveraged our fleet.
Essentially take on more dates but at the same type we're holding more cash on our balance sheet and therefore on a net debt they see.
The basis also for our government and I've got nations the effective zero unless of course, we burn cash, which we're not projecting to do for the second half of the year.
And therefore on the basis of a net leverage on the fact that we're taking on some more leveraged now.
We do not have an effect on our balance sheet.
On the basis of valuations that we have Dane as will be and the first quarter, our gross leverage standpoint, it'd be below 60%.
And these gross leverage number is expected to increase by capital of percentage points as we take on additional days, but the receive significant buffer given where the levels of covenant lite are on their corporate basis for star bulk.
Right and then just the additional liquidity question.
How much do you think you can rates further.
You too you mentioned in the press release I'm, just wondering about that.
I mean, we are working guardium transactions.
May actually be solved.
In.
If one or two multiples of the liquidity that we have a rabies daisy.
Have outdated commitments for so let's see a whether we are going to be able to get those commitments, we're working hard and.
We are glad that we're enjoying the supports all five financial institutions from Western Europe to China and Asia in our efforts to raise additional cash without necessarily increasing dangerous cost for our fleet.
Right. Okay. That's very good okay. Thank you everybody for answering my questions appreciate it.
I mean, this especially those.
Hi, I'm its.
We are we are more.
Positive about the future actually for the second half and when it went one going forward.
However, the main thing here is to make sure that even if things go.
So far we're here to enjoy that good market that will eventually come and that is why we're raising the money that is why we are.
Where a hedging our bets.
So I assume you understand that.
Well I understand it perfectly I mean the bottom.
Question, though is that.
What circumstances using starbuck would have to.
More dilutive financing and based on everything I'm hearing in the numbers it looks like it's at close to zero percent chance unless the market is fivesix thousand dollars.
I have two years is that correct characterization.
Yeah, we're we're designing our situation too.
Eliminate the possibility of having to issue diluted financing under any but the most extreme scenarios.
Right.
Very clear thank you very much everybody I appreciate it.
Thank you Evan.
Thank you very much. Our next question is from London given from Jefferies. Please go ahead.
Oh, the gentleman has gone.
I find it.
A quick question I guess.
Kind of on scrub ratio, 74%, but in recent quarters, you kind of broke that out by asset class. So can you give that's for sure you kind of color dates.
Newcastlemaxes versus the kind of smaller tenants.
So.
No.
Hi, Randy So this is common thing.
Correct.
For the cases around 9800.
Okay, you've gotten less comes from Xtendimax is 9700, a bit a bit by business.
And then we'll address through pros is around 6650.
Blended.
All this again on trial.
And.
Vendors is a oh.
You said, a 9800 for capes and Newcastlemax on Scrubs.
Yes.
Well.
Pretty good.
And then looking at your speaking of Scrubbers, you installed all of them, but you still have I think $12 million remaining capex is that related to getting them certified or just final payments that come somehow after delivery and installation.
Correct, Brian the before the final payments a it has nothing to do with this certification of this property.
Oh hi.
And then lastly, just looking at kind of the fuel spread was there much of an upfront cost or working capital required to hedge those differentials for 2020 or 2021 and also if you can give a little context around the value right you have 150000 times.
This year I guess that remaining and then 24000 kind next year.
Are you still burning about a million tonne per year appeal.
So Randy this is christos onto your first question.
Given our relationships with some of our financial institutions that are supporting us from the lending side, we actually have to close to zero margin on the hedgies off them of the fuels rate, we effectively settled at maturity and.
These are facilities or that are supported also by.
I'm seeing your debt facilities that we have so there is zero margin that we have to both on a daily basis.
Do your second question.
Given that the softer markets. They die fleet is growing at the lower speed and that's a result, the consumption ease reduced from the previous estimates. So now we estimate that our fleet on an annual basis consumed approximately 60000 dollar.
Per month, therefore, 720000 tons per year.
One man was closer to the speeds odd healthier markets.
Which we sold back in Q4 as well as Q3 of 2019.
Wow, okay, because their fleets larger so that's a 25%.
Eric I guess you'd reduction.
It's not larger by Q4 19 were essentially hot older vessels that we have today.
Sure, Yeah, and remember Randy that fuel consumption is proportional to the Hugh this fee. So that's a little change in speed is a big change in fuel consumption.
Correct Yep Yep, I I said I remember you ratio.
Well. Thank you all so much Uh huh.
As a reminder, ladies and gentlemen star one if you wish.
A question. The next one is from Ben.
Please go ahead.
First of all and Hi bag.
So.
Is it Todd obviously your wallet.
As part of the thinking about preserving liquidity.
Is it possible to actually monetize those.
Differentials currently.
Or or is it necessary part of the credit facilities could could you I think you'd said 13 million is it possible the.
Those are those future values into cash flow or cash today.
[noise] Ben Hi, this is Cmos.
Uh huh.
The answer is yes, if we wanted we could monetize these position, but that as this is going to their heads and it's not a you know a bank just the percentage of hard dollar consumption, we prefer to keep them I opened enough monetize at least age.
Okay very helpful.
And then as it relates to the at the days in the half of the book that has been fixed I believe at 11000 had about a year. The second half here could you is that primarily capesize phase just thinking through sort of.
Obviously that the market or the ship classes don't always news.
Exactly in line. So just trying to think through where the sensitivity of Oh man.
Very relative to sort of where your appetizer possession.
Hi, Joe Baltic All 40 to 40 ish type of vessels or do you think you for Ben Okay.
And just like any tweaks those that it's no all interface. There's also some piecyk all copper.
George couple of disposition needs, if a phase, but there's also physical covered there, which obviously doesn't have margin requirements and the intention is as time goes by two a actually oh cut down on F pace and increase the physical coverage as we increase the physical coverage will be cutting down on interface.
Okay.
Very helpful. And then and then lastly, just thinking through the cash flow sort of going back.
And I might've missed.
Could you maybe a walk through what is the remaining a current or the updated that amortization schedule for the.
The balance sitting here and also for 25.
[noise], so Ben just should estimate a basis I caught and event that committed financing that that we have a announced.
And nonrecourse debt amortization schedule of about 178 million for 2021.
That's a and other a 30 million a bet on them for scrubber. So in total is a about 208 million for Twentytwenty why.
This is a pull forward it forward in a second half of Twentytwenty and you should estimate about 44.5 million, but a quarter or for a normal amortization.
And then about a 3 million for the third quarter for scrubbers, and 9 million <unk> for the fourth quarter.
Perfect. Thank you.
Okay and our next question is from Jae Min myself from value investors. Please go ahead.
Good morning, Hamish and good afternoon, everyone agrees.
Hi, Jane warning.
Hi.
Yeah sort of some great questions earlier on liquidity and it sounds like you have a lot of pathways. There are just one other question not we're looking at slide five and looking at all the levers you called you mentioned that Q2 coverage and you mentioned a half two coverage about 50% are there any charters that extend into 21 or 22 like can you sort of really long term thing.
Where are these just six months coverages and such.
Oh, Hi, Jay specialist, we have very little coverage for a for next year actually the intention knees. If we see the markets improving during Q3 or Q4. The intention is to cover a Q1 as we do and.
On a year.
Because seasonally Q1 is that is not there very strong quarter.
This year are forced to do it was not that it was the weakest over the quarters, but it says special case because of the virus.
So on that way too to the end of this year, we will be hedging at least Q1 two.
Well as I see similar levels as well do every every year.
Excellent and then I think it was pretty well covered a previously with Randy but you talked about the scrubber hedge that you've locked in sounds like that's about 20% of consumption for the rest of 2020 is that correct.
Correct.
Excellent and then final question for you I know in the past couple of years ago. You did some consolidation where you issue that I sort of stock for stock sort of NAFTA nap deals and that is kind of a a lever that you could use right to change your balance sheet or add a little bit of liquidity. If you found another counterparty for instance that wanted to combine.
Fine right and grow larger fleets are there any sort of candidates out there that you see today or whereas consolidation sort of.
Out of the market on pause right now.
Well I you know Jay I think it's basically on pause.
If I if ever there was a time when people were acting like a deer caught in the headlights, it's it's pretty much right now.
With the with the virus I. I think before you're likely to see much M&A activity. Yeah, I think the world has to return a bit closer to normal.
Yeah, certainly figure that would be your response in the and I'm glad you're not one of the ones that cotton caught the like Guarana headlights final question.
I heard a lot about.
Surveys being delayed special surveys and I think it's more of an issue for tankers. Maybe then bulkers is that happening in the drybulk sector. I know there send these three months sort of blanket extensions is that happening in the market and if so when should we expect a surveys to kick back in.
Okay.
Jay well.
For us it isn't happening because if we fast also this amazing we did all hours dry docks and we have no more of that coming in the next a full floor theres. So it doesn't apply to us I also read about what you're saying.
I'm not sure whether it's happening with other companies are not not for us So we fast everything.
Excellent well hopefully it takes some supply out of the market. This fall and next winter. Thank you gentlemen, thank you for your time.
We think we think it will take some supply out of the market because there's going to be a number of vessels that getting the dry docks that a wait until the last minute now whether the whether these past for the last minute.
Without the glass societies, allowing it I'm not sure, but that we're pretty certain that a win as soon as things normalize normalize we'll see more vessels in the yards.
Excellent. Thanks.
We've got a follow up from just the mall.
Please go ahead.
Yeah, Hi.
Now for a follow up because the question, it's kinda left field and forgive me if it's if it's totally off base, but you obviously have a lot of drybulk ships. The tanker market is doing reasonably well is there.
Any technical possibility of converting a drybulk.
A bulk or into a tanker.
I know, it's a crazy question, but I'm just wondering if he was your physicist and good stuff like that I was wondering if you've ever thought about that what would it be involved in it how much would it costs how long would it take that's even the possibility at all.
So so we looked into this possibility in terms of using a bulk or two for it for a storage charter.
And we concluded that it would cost a lot.
That it would take a long time and on you know I think that was really the killer that.
It would take long enough that by the time it was done the storage charter business would be gone and of course, you know the storage charter business is at the moment pretty much gone.
And it would have taken a lot longer than.
Then it would have needed to take to get that storage charter business.
And you know in terms of modifying a bulk or to be a tank or to be used for transportation not storage I I figured you know you'd have to consider that to be essentially as possible.
Yeah, Okay and then the other follow up I had is no back in 2016, where we saw rates. There were similarly, we it's not even a little bit weaker.
You know scrapping has really picked up quite a bit in the first and second quarter 2016 of course with Kobe, There's some.
Capacity restriction that scrapping I was hoping you just talked it out a little bit I mean are there are there a lot of.
Warm lay up that are happening because the market. It just so bad.
Mike out there from a supply perspective, because we havent necessarily seen.
Scrapping levels that we would have expected on out that's on the calm more or any thoughts around that would be helpful.
I mean, this could up yes, we're actually close and at that moment.
A number of most T.K. phone is one that the scrap their vessels that they couldn't do it. So we see a number of vessels in various areas that have no not moved especially those big altera below sees and we expect that are they will flatten.
Cards as soon as they open up of course now we'll have to see where prices are going to be because of the one hand, there's going to be a lot of supply of vessels willing to scrap and on the other hand iron ore prices are up.
And iron ore prices and Scott prices.
I have some relationship between them. So we don't know where that's going to be.
We would have seen a lot more scrapping the last month and a half had we not at the closures.
Yeah, Okay. All right. That's it for me thank you very much.
Thank you.
Oh no other questions at this time, so I'll hand back to the speakers for closing comments.
No closing comments operator, thank you very much for a being patient enough to listen to us.
Okay. Thank you very much ladies and gentlemen that does conclude today. Thank you everyone for joining you may now disconnect.
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