Q1 2020 Seanergy Maritime Holdings Corp Earnings Call
We continue to stand by feel confident well begin shortly.
[music].
We continue to stand by feel confident well begin shortly.
[music].
Thank you for standing by ladies and gentlemen, and welcome to the Seanergy Maritime Conference call on the first quarter two dozen didn't try to find not sure without.
We have without missing so much some tightness chairman and Chief Executive Officer, Mr. stuff off gift cards, <unk>, Chief Financial Officer, if the company.
This time, all participants are what I listen only mode.
They'll be a presentation followed by a question on DOCSIS session at which time if you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced.
I must advise you got this conference is being recorded today.
Please be reminded that the company publicly released financial results, which were up eight books Downlight on the Seanergy website, I see Nichey maritime Dot com.
You don't have a copy of the press release, you may contact capital link up to one to 6617566 and they were happy to send it to you.
Before handing the call like Mr son, Todd if we'd like to remind you thought this conference call contains forward looking statements as defined in section 27, eight if the securities active 1993 as amended and section 21 E of Securities of these Securities Exchange Act of 19th that before as amended concern.
During future events on the company's growth strategy, a machine to implement such strategy.
Well, that's tough expects intends plans believes anticipates I estimate on variations of such words and similar expressions are intended to identify forward looking statements.
These statements involve known and unknown risks and based upon a number of assumptions and estimates which are inherently subject significant upside to tease him contingencies, many of which I'll be on to control if the company.
Actual results may differ materially from those expressed or implied by such forward looking statements.
Does that could cause actual results could differ materially include but are not limited to competitive factors in the market in which the company operate.
Risks associated with operations outside the United States, changing rules and regulations applicable to the shipping industry and other risks that does include it from time to time in the company's annual report on form 20-F, and other filings with the Securities and Exchange Commission, which is also known as the S. E C.
The company's filings can be obtained free of charge on Ccs website at www Dot E. Si dot Gov.
The company expressly disclaims any obligation so undertaking to released publicly.
Any updates or revisions to any forward looking statements contained herein to reflect any change in the company's expectations with respect that cheese or any change in advance conditions or circumstances on which any statement didn't pay is based now I will pass flow to Mr. Son, Tottus. Please go ahead stuff.
Thanks, Jody [noise].
Good morning, everyone and thank you for joining us today to discuss our results for the quarter ending March 31st 10 to 20.
I want to apologize before.
The goal for the latest thoughts.
It's up and due to you know hundreds of people trying to dial into the same time and under the surface of crushed not we're going to we will start immediately.
First I want to wish everyone. The best of health in this difficult circumstances, and let's say for Dunkin' about.
The outbreak of covered 19 pandemic had an unprecedented effect on the whole planet and of course severe challenges for site. This government business is of course the world. During these times I primary concern was the health and safety alert people on board that ships as well that's about all this stuff.
We also needed to make sure that our business efficiently and obviously continue still put it commercially I'm technically with no disruptions and we were very successful.
Before we present our results.
I want to start with some basic flux.
Since the beginning of June the Capesize market has increased by more than a 700% from historical lows off two to $3000 precipitate the more than 26 20000 doors pretty stupid. They synergy is the only leasing company in the United States with a pure play Capesize fleet and all of our vessels have employed in spot or index.
He taught us sticking full advantage over the short end market conditions.
However, as with most global businesses during the first quarter, just under 20, which as you started to know we show a steep decline for that all material to the with US board, which caused which combined with increased levels of uncertainty led to a very quick shot that market environment.
I want to state that the first two months for the second quarter would also equally weeks. However has mentioned before we had at the beginning of June and economic activity because it recovered strongly and we're now see clear path back to normal conditions.
I live wherever they should be particularly optimistic that the rising trend will continue for that in many of the year.
Specifically in the past weeks, Brazilian and Australian Iron ore exports have been very strong and velocity today to their annual production targets.
An important to state that that export volumes have no normalize to pre crisis levels.
<unk> the Chinese and these U.S. government has announced a record the munsell fiscal stimulus and infrastructure projects. You noted support better economies that for steel demand has been quite strong.
An indication in China, I didn't know what inventory should adopt the multiyear lows in the first half of 220, implying a large but also by steel sector and significant the requirement pretty Stoke eight as soon as possible.
These developments if they can place against a backdrop of restricted vessel supply due to limited new building orders over the past few years.
For the first quarter, often 20, <unk> financial performance was negatively affected by the factors or both.
Well, it's a daily time charter equivalent or do you see what's your close to 8408 to $1, but they hired by 11% <unk> as compared to a time charter equivalent of 7006 on the instead of three for the first quarter 2019.
We have to note that we over performed significantly better, but its time south of the Baltic Capesize index or the B.C. I feel the same period, which stood at 4569 per day, one over the lowest video ads in Q study.
For the quarter ended March that the first one to 20. The company generated net revenues were 15.3 million a 17% of decreased compared to the first quarter <unk> 19.
EBITDA for the quarter was approximately 1 million compared to what you'd be dealt beautiful informing them in the same period will still doesn't lend thing.
Net loss for the first quarter was 8.3 million compared to an additional 5.6 million into first quarter for doesn't entail.
However, it appears at the improved market conditions seem currently we lived through a much stronger second half of the year. This is in line with what we saw in 2019 last year when the improvement in the second part of this year was not only enough to upset the with the performance during the first six months, but also led to the strongest I know at age.
The last five years.
Moving on to corporate development. She loves it took a number of important actions that have developed and even stronger company.
First on the Tufting front on May 15th and 21 of our Capesizes. The night ship was delivered to a new long term time charter with Glencore, one of the world's largest commodity status.
Under the terms of the agreement installation off exhaust gas scrubber system, which was 3.5 million was completed at the top that as cost and the employment do additional will be for a period of three to five years.
The daily side or the time charters index linked to the Baltic Capesize Index. This is a third of our vessels chartered on a long term basis by Glencore and the six ship all of our fleet in such an arrangement with a first class taught to contradict a number of other shipping companies, which have not embed them to our shareholders with millions of dollars of compliance copper.
Associated with the installation of scrubbers.
As mentioned earlier all of our fleet know, what but it seemed to spot or index linked charters, which takes full advantage over the booming market conditions and produces strong cash flows from the beginning of June.
I also wanted to give you a high level up their door financial developments.
First we're pleased to announce it will have ordered it did you find instead to 1.1 million of indebtedness was initially much where it is what im twentytwenty and plan to 10 to one.
The new maturities have now been extended to 222, that's substantially the same terence.
It also finalizing discussions with another lender lenders with blend it doesn't do much of it at this and we expect positive results sure well, we'll keep you posted with upcoming good news Vishal.
Given this I got to set them too that we faced in Q1 due to the low market levels into corporate Nineteena situation. We initiated the series of public equity offerings aim to further improved our financial position what is a substantial amount of equity from these offerings with a very very strong institutional interest. In addition to the common shares virtually all.
The warrants issued have now been exercise to common shares so no additional overhead or dilution is expected from these award on to convert as such.
Oh sure whole does equity at the end of the first quarter was 21.9 million, but when adjusted for the recent equity raising activities. Our shareholders' equity is approximately 68.9 million. The total adjusted the capitalization of synergy is now approximately 285 million Sina is very well capitalized suicide.
And any unexpected market, but I sure that magazine as one of the environment. Moreover, Sina <unk> is very well funded and in great position to capitalize on attractive opportunities.
Historically low values.
Before I pass the call doors, CFO Starbucks gift I guess I wanted to know to that I was surprised decline through the first quarter just under 20 due to the unprecedented challenges faced in our sector.
We do not believe it is representative of our through <unk>.
Even though the NASDAQ has gotten it doesn't extension until September 10 to 15 to 20, which is effectively four or five months from now to comply with a minimum bid price, we decided to proactively it as old as much or not.
Therefore, our board of directors as they tend to push it with a reverse stock split expects to be affected on June 30, Twond Atlanta.
Such decision aims to restore the price over shares at an acceptable rates in which most of our beer state. We strongly believe that executing a reverse stock split at this time will feather in college institutional interest in our stock and provides a clear out away for the second half of the here.
We want to thank our shareholders for their support that loyalty during the previous times in video door sector, and we expect to deliver stronger said holder value going forward in what we believed to be a much better market environment, well not know what parts. The cold War CFO Stuffers gifted keys and that will come back later on the for the market.
Segment developments.
[noise]. Thank you somewhat fixed good morning, everyone.
Before getting into the numbers I would like to note that the results city fit well into the most challenging PD, what's what are going to see in the global economy older leases now behind us and were cut into looking at much but I did days for the Capesize signal as it they sit by the impressively Mt Logan might get through the recent weeks.
In the first quarter of 20 to 20, our fleet that seemed to time charter equivalent of 8500, marking in 11% improvement things out there the first quarter starting to 19, while outperforming the keeps US index by you sold leap 86%.
Oh sleeps performance benefited from the <unk> time charter equivalent the rates achieved anvil, you're just getting started to during the fourth quarter of 219, which would carried over to that revenue over the first three months of 20 to 20.
Additionally, in the fourth quarter was going to 19, we exercise the option to convert the floating to fixed on did well one of our lumped in time charters for the BDC that extended the NPV and the favorite already twentytwenty out there much stronger rate than what might be realized in the market.
Lastly, when compared to 2019 in the first quarter of 20 to 21 cut more visits employed under time charter agreements achieving full utilization.
[noise] a mental predicting revenue in the first quarter Twentytwenty be fine does it everything after deducting all gets expensed sit commissions were 7.6 meal, marking an increase of 15% when compared to six point did meet in the first quarter of thing to 19.
Now to give you an idea over the caught in the market today, we decent <unk> threed get the fixed adoption in will not one for the time charters for July and August looking that lets say lot that eight to $9250 per day. This quarter Splunk still <unk> to approximately 1.2 me Leon in net operating revenues all up.
About 16% will then it'll bathing revenues and buy and hold fleet for the <unk>. So it seemed to let's say, we've done that 82 month, 16% <unk> entitled They didn't get revenue for the first quarter.
Moving on to the expense side operating expenses for the <unk> 5.1 medium increased from 4.4 million under the first quarter of last year, mainly due to the timing of certain payments.
I'm good less of the figures compatible with a 5.1 million a baby expenses incurred to the fourth quarter. It was going to 19.
At the same time, then that doesn't mean, they said these expenses were down by 19%.
It would be dying to fit squadron of 10 to 20 was approximately 1 million up by 130% compared to when they'd be dial 450000 in the same period of 2019.
The improved commercial performance if a fleet resulted in higher net operating revenues offsetting the marginal it could easily operating expenses.
[noise] interest and finance close to <unk>.
Amounted to 5.7 million it could easily 90% from 6.3 need going into first quarter of last year.
Well this amount crossing that it's expensive presented about 4.2 million, marking a reduction of 11% compared to the corresponding amount of 4.8 million doing to 19.
On the into restaurant, we're marking year over year improvements through the last three years.
I'd say these algavia, but what do you have shown <unk> net loss for the first quarter of Twentytwenty was 8.3 me <unk> as compared to a net loss <unk> the same period last year.
Now turning to our bottling seat as we ended the quarter Seanergy cut 6.2 million in costs in classic, we buttons and sit hold the sick would be was equal to 21.9 medium.
[noise] via effect of Edison capital raising activities when they reflect you know six month balance sheets translating into much stronger should hold this equity position and sold its got to executives NVS after having fully absorbed shortfalls from the low it makes environment up to June.
Now having said that these I would like to note that the Cds effect would be raising said took place in the second quarter over the year came in response to the extreme levels with macroeconomic uncertainty that prevailed at the time wouldn't global industrial uneconomic or if you would be whats hold it.
Our primary aim cause me to strengthen our balance sheet and ensure the smokes continuation of a fleet operations.
So far we have emphasized on maintaining liquidity and flexibility to respond to that up really changing in highly uncertain market conditions.
If they shouldn't be boom in the Drybulk market Bruce to have ended up really be as we expected. We we would know too loud shifting emphasis on the de leveraging of our balance sheet for a lot unlevered or levered vessel acquisitions.
These would eventually contributes to an expansion of our scale and operating leverage as a leading pure play capesize platform.
Lastly, I would like to provide some color on them going discussions with our lenders for the upcoming maturities school to offer senior secured facilities.
The faces in June to enter 20, and the amount that something is approximated 29 million where it currently in process School finalizing an agreement to refinance the alone in that way that will create accretion for investors well suited using the breakeven so the underlying vessels.
Considering the book seem to have the maturity we didn't get into the were unable to said more information to date, yet we wouldn't be liberalization to provide food be paid above the agreement in due course.
Unfortunately, the Golden Monkey situation has increased the processing time for most bonds these days and thus delaying concluding reimbursements.
Oh, the same time, what having constructive discussions with our lending scruffy aim to reach an agreement with the second to last for Sealy Dick's fighting Twentytwenty way ahead over the December maturity.
I would like to that should I should hold I said based on the block disrupting raising auctions that would do <unk> for the year and the proof.
Market conditions seem to start to June we had on that I talked to address successfully the upcoming maturities.
This concludes my review of the financials I will now turn the call back to somebody who will discuss the market than industry fundamentals before concluding with his final remarks somebody.
[noise] [noise] thinkers Debra.
Moving onto the industry outlook as we mentioned the beginning of our called the Capesize sector was severely affected in Q1, but combination of like a two factors.
The main factors, whether the unusually severe local the weather disruptions, especially in Brazil and of course of the outsized impact over the course 19 pandemic worldwide.
As a result iron ore exports were considerably lower than expected at the start of the here.
However, as mentioned earlier since the beginning of June keeps as market has performed exceptionally well and a b C. I levels have improved enormously from the day level of about $2000, but ship a day to more than 28000 to put a ship timely.
Consistent with previous years high volatility in seasonality our normal features so the capesize market and should not distract us from the positive overall fundamentals.
Notwithstanding the difficult start to the year seaborne iron ore ton mile demand is expected to rise by about <unk>, 0.3% in twentytwenty compared to the contraction of about 3% into such a 19 as mentioned before the global governments of China in the United States have put enormous stimulus in place in order to jumpstart.
That economies.
Furthermore, bauxite boardrooms, which rose by more than 10% into such a 19 I'd expect to rise by similar levels in 10 to 20 and that after and continue to support the month for lots of Vescos. So long call volume just out of West Africa.
Looking forward to towards the next two years the eventual for the eventual full resumption of somebody to add another production <unk> more than 60 million additional dawn of long call. Brazilian exports that is on top of the cotton <unk> guidance of 320 million thoughts.
These levels alone would be enough to sustain a healthy capesize market in the future without even factoring in any further growth drivers such as the explosive growth seen in the seaborne trade of book side or the possibility for fed it or not an ore mines expansions in Africa and Brazil.
As it goes to fleet growth that a number of reserves to be optimistic how's the Capesize order book is at historical lows.
As mentioned in more detail in a previous earnings call International Maritime organization regulations that have gutting shield to emissions are a bomb to become a very restrictive from 20, <unk> onwards, and the uncertainty around new vessels and engine designs makes it very hard for ship owners to commit to new investments. This is also clearly.
Selected in the lack of availability of financing for new projects.
We are confident that the positive supply outlook sets. The stage for continued strong market performance and this is evident by the resilience of the capesize rates, even during the highly uncertain macroeconomic environment over the last two years.
She knows this emphasis on day improvement over the fleets at about a mental efficiency and the establishment long and established a long term relationships with prominent sat there to ensure our fleets continued comedy show success.
I was a closing remark the capesize vessels out once again outperforming the rest of the dry bulk market by far.
Synergy is the only pure play Capesize company listed in the U.S. kept a markets with all of our ships taking advantage over the short end markets conditions. Moreover, our strong balance it will allow us to capitalize on attractive opportunities at historically low asset values and the LIBOR at highly accretive transaction store to shareholders.
On that note I would like them to called <unk> or <unk> and not answer any questions. You may have so Jody please technical.
Thank you very much so ladies and gentlemen, if you wish to ask a question. Please press star one on your kind of thing keep <unk> being outsourced.
First question for today is from the line of Tate Sullivan. Please go ahead.
Hi, <unk> <unk> a maximum thank you for the comments can you first can you get more nuts.
You mentioned it before but can you get more background on of the decision.
We have the stock split the reasons for time out now.
Well stay the course I'm first of all as I mentioned are still had dropped a lot. During the first quarter had nothing to do all with the offerings that would they that was just up it is out of where you know the overall market was going we decided to do it now even though we have another quarter to basically ahead of us and away. This.
Hi, This is the do it now so we provide a clear runaway photos investors and in order for a stock price to reflect what we believed to be the true value of our shares I mean, we don't really thing we deserve to be you know hovering between 20 and 35 cents. I mean this is a company, which is worth much much more than that and we want that to be reflected the enough stuff right.
Well decided to do it now that the mikes has it gotten significantly and everybody joining the company now we'll take advantage of the whole thing.
Okay. Thank you and a couple more fun we.
Looking back on on once the once your results and currently.
Spot rates hold up better than in the index rates would suggest it just seems your break your time charter equivalent was more resilient during severely low rates than I expected and you can't talk about how they can hold up a little better than what we saw.
As well too.
The dynamics there.
Well, that's actually very good question, you know to be honest, there's no magic concept that we had a little ships coming in the first quarter from the Q4, which was up substantially which was fix up substantially much high levels. That's why we were able to you know do produced almost I don't know six or seven.
<unk> percent in high rates than where the index. It was however of course, you know to seven point the reality kicked in for everyone. You know the covered situation together with all these negative factors. We explained before and you know it came to a point to where we had to face the market ourselves as well.
Right now of course I liked it has gone up but as I mentioned before almost 700% and I think it's going to remain at much higher levels for the second half of the year. Therefore, the cash flows are the company as they were last year in the second half will be you know multiple times a one itself the first of all the.
Okay. Thank you and I mean, the current environment for this current quarter and with the rates already proven sold meaningfully what what other operating expenses can you cut the current market.
Well I would doesn't have any other I'm in the good thing about our fleet is first of all we have almost a zero drydock days, so having completed all our drydock schedule in 2019, the majority of our fleet. If I remember will you know nine out of 10 cases, we will.
The that I look pretty until the end of the year that means that we will hopefully be taking advantage of full advantage over the stronger markets from now until the yet and so no additional expenses no additional capex, we expect a from now and from the beginning of June until the end of the you do have a very clear right away or.
You know a very healthy I'd be interested in.
Okay on the last one for me please visit <unk>.
And your balance sheet can you give some historical context on.
Since when was the last acquisition was it.
Look forward when you look more newbuilds, even though this order books that historical low enough knutsen or hardships or can you give anymore context there yes.
Even though the market has seen at very high increase a in rates a there's still some amazing acquisition opportunities for some of that is willing.
Forgetting didn't buy additional assets at I thought I cannot comment any further on that front, a but what's the this space. That's all I can say a the good thing here is that it's very hard to make any predictions for new buildings, because the new regulations have not then it cleared out look as to what.
The future Sip is gonna be so that everybody right now and the Capesizes lies with you know.
<unk> secondhand ships and this is what has been always you know the best solution for synergy and this is how we have made out of most accretive transactions so far.
Okay. Thank you earlier comments.
Thank you very much.
A question is.
Please go ahead.
Good morning, hope threat from noble capital markets.
Great.
You highlighted.
30 million through the middle.
May I knew I like how much it no capital came through the exercise of warrants.
Oh I will pass our bus first of all the answer that to stop <unk> do you view <unk>, Let me give you the quarter suffers from deal with [noise].
Hello bolt.
Actually I mean.
Well the exercise you say are using them going exercise extending going exercise, which I was not mean finalists here than we expected going silo thing falling updates together with some ideas that we have for the potential use of the proceeds so coming out of the warrants, but it's a indeed unifill 15 plus median.
Okay, great and so will you.
If you look at catching the ended the first quarter, what 6.1 million do you have a pro forma estimate for cash.
Correlate to the table that you have in the press release on your.
Pro forma adjusted capitalization table.
Well, that's why we have put a very generic a capitalization table outdoors. So people can do the math I cannot really say right now a poll because there are set then important transactions that are going to be finalized an extra days. So I don't want to give a pro forma figure that maintains a subs.
<unk> I don't want to give you a pro forma numbers just for the offerings there will be additional positive effects to our capitalization. After these transactions are consummated, but I cannot really comment that I had no.
It is gonna be British Wendell.
Just to be clear, though.
Refinancing.
29 million.
To the ended the month or do now.
Not just that some other things as well, which we're gonna other element.
Okay, but I didn't develop those I'll say, they're not associated with offerings that are associated with some deals that the company has managed to execute them that wouldn't be announcing due course British up.
That's helpful.
You talked about locking up for July.
<unk> thousand 250 can you talk about any.
You have to.
Lock and what are you know attractive rates near term.
We haven't we'd have already started looking in some of the ships for July and August we're constantly monitoring the market right now so we've already started to with the one or two of our ships.
The signals that we're getting is that the market. There's gonna showed up even further so we don't want I missed the upside having had you know very tough you know first five months of the year. So we are cautiously monitoring the markets, we're ready to pull the trigger we have this flexibility from our index linked charters to convert it into fixed.
So we're taking a very cautious step you know and monitoring the whole circumstances, when a daily basis to do a door additional ships.
Okay.
So do you have a figure right now.
Quarter.
You know where how much sport.
You have right now.
Well I don't want to give a figure because the market has been shooting up so much and always have up some spot charters that are yet to be finalized. So I don't want to give a figure because a you know the majority of the fleet. There's index linked so you know its moves so with index. So on a daily basis, we have some conversions.
As I mentioned before to some fixed but I do want to give a clear a outlook is yet to be goes again does set and things that need to be developed but its of course up substantially higher levels than you know what we did in the first couple of the year.
Mark at the times.
Well and could you.
The second quarters almost done can you give us an idea where your T.C. rates will average for the second quarter and then also a democracy clarified.
It seems like.
The premium you know it looks like the premium versus a b C. I in the first quarter was.
3912 Bucks.
Pardon.
<unk>.
Rubber.
Investments is that correct.
Yep.
How much that performances.
Recovery.
On the scrubbers.
The the fleet, it's outfitted with scrubbers.
Yes, yes, like you're very well so there was that the with the second part of your answer the answer is yes. So we have had a an important recovery as a photo the ships were making a significant premium due to the scrubber premium that we are getting from the charters us for the second quarter guidance.
As I mentioned in the call April and May what also Wick months. However, a you know the sorting levels that we show in the June have not been able to make the right calculation is yet to see what the effect is gonna be for the second quarter. That's why I cannot give your guidance yet we're still finalizing that got they'll send the numbers switch.
We still have four days in the quarter and that's why wasn't I don't want to provide the guidance because a they increase has been so steep so fast that you know, it's really caught us [laughter] you know the oldest incremental revenue has kind of caught us by surprise. That's why we're gonna do they give you and I'm, sorry, and that a lot of capital fund accounting issues that need to be.
You know discussed before it would provide a guidance that's why I don't want to be held up in a guidance level right. Now so yes, it's been a great month a June it was not so great in April or May due to the facts of a prolonged <unk> crisis.
And so that's why I don't want to give a guidance right now.
Okay.
Good habits surprise.
To give once more.
Could we can we focused on you know I back a little bit.
Okay.
In the first quarter, because the timing of expenses.
Can you give us an eye wear opex.
The year.
And then also if we could look at.
Second quarter, you know what kind of working capital changes you see and then also what Capex number.
We'll be looking for the first and second quarter of the year.
Thank you will actually start with us.
Supporting the OPUC strong I mean, a the opex for the first towards it wasn't fleet either with a one off expenses coming to do with that at least brings on on certain of our vis it's because we've decided.
To change or how long that I there's no.
Going forward <unk> going forward to you should expect I mean are a out operating expenses to normalize added to the levers that you used to our own foreign it's tough to 5 million quote there for the entire fleet.
Hey.
Moving over to the to the Drydocking expenses I was discussing that must I mean, we've had one seep into the went through dry docking the first quarter.
The next dishes scrub installation the coastal discovered installation and associated the size was covered by the <unk> <unk>, which was glencore. So the overall topics as it was lift foreseen as he was around half a million 750000.
Okay.
Do you.
Fabrics do you have an idea of how working capital changed over the first quarter and.
Second quarter.
Working capital over the second order was drastic you use.
Well I mean through.
So that proceeds will be all things I mean, do and use it loads on that or we can go with it and this has not in my life to the 11th I'm not going to levels of stuff in millions and millions per visit which is a they didn't know and one of them in considering other fleets comprises skewed capesize vessels.
Okay and then the modest if we can just look at that you know you just indicated that you potentially think that market is going to tighten even further.
What.
No.
[noise] as far as Cape rates.
What what do you think you go from here and then also what do you think could go wrong from here.
Well, the obviously there'll be some sort of for things that can go wrong or pretty much. The same things that went wrong for you know the beginning of the year. It has to be weather weather related disruptions as well as a you know the coffee the pandemic.
However, if I may say, a the dry bulk and especially the Cape sizes are what we believed to be the more resilient in this kind of circumstances, because the first thing because that a any government is doing in order to boost the recoveries of their economies is the infrastructure spending. So you know we're not affected by let's say the planes or traveling north.
Things like that I mean, they will build tomorrow. So we'll build more you know houses that will build all Dod to achieve the spacing and also to up a you know jumpstart that economies.
In the U.S. also it was a announced that are simply $1 billion <unk> infrastructure projects and that is only helpful for the capesizes because with that I support that an hour and coal which is then convert it into steel. So you know.
Each one of the most Brazilian sectors to be in right. Now so things can go bad if corporate outbreak you know pandemic becomes a major issue again towards the end of the year, we certainly hope that this doesn't happen.
Not for the rates of course, but for the health of the Oh, the global population.
And number two or the weather disruptions that always are an issue in the north and exports system of Brazil, and I know things are appearing to appears to be quite normal things. That's good and go well is Ah you know.
The addition of imports of China in order to recover it entry stock could inventory so about an hour, which you know the demand is particularly strong and that's why the adelaar prices going up and the aggressive and massive investments in infrastructure that is expected to happen and they will lead the capesize rates to go even further up those that's all I can say oh that.
Of course was that abused newbuilding schedule, which appears to be kicking in now and you know providing very strong fundamentals for the capesize market.
Okay, Great and then if we could just look at the reverse stock split second yeah in the press release, you indicate that post.
You'll have 30 million shares outstanding.
What how many shares would you have available to issue.
If you chose issue additional.
Chairs.
Well I mean echo money auto was because the ability to raise additional the topic, though you know and that's not so relevant a in a way we're doing that whole thing that no. The main driver for you know that reverse stock split as I said is for the stock price to recover heading to levels that are more marketable.
Okay, and more investable funds to shut investors, we don't really think that synergy belong seem to you know that aims between 20 and 35 cents.
Especially now that we have strengthened the balance it into a you know such a position that really qualifies for the massive upgrading unified as forms and the stock price is one of them. So that's the purpose and that's why we are proactively doing the reverse stock split now and we've done wait until the very last moment, we think that thing that I using market conditions.
A winter given just decide investors the option to invest into the Stoke without necessarily having it does if any you know 20 to 35 cents.
Okay.
And I know that you don't want to give a pro forma cash number, but how but asking the question. This way.
How much cash stream comfortable having on the balance sheet given the volatility of the Cape market and then also when we look at you know your comments on the potential durability of the recovery.
What.
Do you think we're at the point, where we're going to see.
Durable.
Market recovery as opposed to a seasonal one and that we're finally going to.
Break out from the historic Boucher <unk>.
We've seen over the last three years.
Well.
That's a very good question I wouldn't try and be is that it because they can't and the balance sheet of the company says not only being a very will strengthen to with Oh gosh that would have raised the but also with some additional deals sometimes actions or the company has achieved so far and we have not a really announced a this is the ones.
That was saying that we would it be announced in the next in the next few weeks. So that's important to know that you know the balance has strengthened not just because of the equity offerings, but from other actions that we did in the last two three months into that are closing these days.
And we think that the company has more than sufficient cash not only to sustain you know much of downturns, but also it to look into expansion as well. That's all I can say that now would have that's in place and the you know where we're in very very good shape right now.
Great. Thank you very much.
You are going to a ball have a good day.
I have a nice had the questions at this time.
[laughter].
<unk>.
Thanks, Joe that have a great hey, everyone and thanks for listening to article.
Ladies and gentlemen that does conclude.
That does conclude the call for today. Thank you all for joining you may now disconnect.
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