Q2 2020 FLEX LNG Ltd Earnings Call

Please go ahead sir. Thank you, Dino. Good day and welcome everyone to the second quarter 2020 presentation for Flex LNG. My name is Jeff and I'm the same Flex LNG management and I will be joined today by I'll see if I'll give in and we will guide you to today's presentation replay of this presentation will also be available at all wage websites xcelenergy.com. So first of disclaimer with regards to among others forward-looking statements and completeness of details that will disclaimer is available in the presentation and we took in that the presentation is well together with the interim financial report as well as of 20th annual reports all the highlights the spot market for LNG shipping has stayed week over the spring and summer due to the Fallout from the covid-19 pandemic a general weak spot Market over the summer is not really surprising and something.

Which we also highlighted in a few won't presentation in may as well as in you know Market webinar in early July when we presented our numbers in may we disclose the fact that we had booked 97% of cute two days at time chocolate equivalent earnings or ECE of close to 50,000 today earnings on the remaining three months have been on the soft side. So we are there for delivering a t c of $47,000 per day, which is however in line with current cash back even levels or cash by giving level. However, expect it to be reduced a bit when we are scaling or business with remaining new buildings with which will have is also have slightly lower financing costs.

in pure

We achieved of $68,000 per day for Fleet. So the average t c for the first half of the air was $57,000. This is a trading results, which we are reasonably satisfied with given the way the challenging Market environment.

Notwithstanding the obstacles post by the novel coronavirus outbreak. We have managed to operate or ships with hundred percent uptime and availability. We are pleased that car goes off the labeled without this options all the layers to our customers furthermore. We have mobilized on your Billings for delivery as planned flexor who was delivered end of July off. Next Optimus was delivered on Monday actually two weeks. I had of contractual schedule.

To rotations have been made particularly difficult for the shipping industry resulting in a lot of seafarers being effectively stranded on ships. We are however, please suck on average have been able to carry out to changes per ship in this difficult. Thus minimizing extended stay for or seafarers. So again, we would like to change my attitude to see photos and onshore Personnel for delivering first-class operational performance also in trying times for everyone involved.

In terms of financials, we deliver a slight adjusted loss of $700,000 for the quarter or an adjusted loss of about $0.01 per share this compares to suck just a net income of 9.3 million dollars in the first quarter or Seventeen cents a share the steering first half of their we delivered adjusted net income of 8.6 million translating into 60 and censorship.

When it comes to financing, we are busy that we have 15 Place nine hundred and twenty million of attractive long-term financing for seven new buildings for delivery in second half of 2028 and first half of 2021 five ships including flexible and flex Optimist just recently delivered will be financed under the $629 million a possibility which we recently increased to $639 million facility as we were able to add the ten million accordion cost for the flex Optimist home. She is employed under a long-term Charter with a subsidiary of you know,

What is the meaning two new buildings Flex Flex volunteer? We announced 281 million of financing through us a lease back in a bank loan respectively in or made presentations wage is financing what subject to find documentation and this financing haven't all been signed and executed in June according to plan hence. Ninety-eight per-cent of all, the main in cafes is caused by long term debt, the remaining Seventeen million of cafes. We can easily financed by or cash attend which do that hundred and sixty million at quarter-end. We also offer live we will be starting to generate positive cash flow again in the fourth quarter, which we could utilize for this purpose having All Ships Finance long-term with no maturities Buffet the second half of the 24 as well as having a very comfortable position with us in a very strong financial position.

as we have

Previously announced we have been active securing contact coverage for 2020 new bills in order to not be too overly exposed to fluctuations and durations money in the stock market and flexor who are Black Sambo and flexible absolute have all been fixed out on tcp's with Perez ranging from 8 up to 12 months off to me. It's it's already committed on a long-term Charter with you involved as explained earlier with more ships on the water in third-quarter. We expect other avenues to continue to go although federal wage. So finally improving I had of autumn is rates are typically foragers in September or October. Hence. We are guiding similar to the numbers for third quarter as number. I also being slightly dragged down by the fact that we have certain positioning and mobilization cost for the three or possibly four ships for delivery and third quarter.

When it comes to Dividend which we all like we have to ask for some patients for more shareholders right now. The world is facing its sharpest decline in economic activity and energy amount since the Great Depression in this period of time and given the state of the LNG shipping market during second and third quarter. We think it's all in the best interest of all shareholders that we continue to preserve cash for the time being. That's it. We will continue to be already shareholder oriented company as of Affiliated companies Frontline gold motion and SFL have evidence both in the past as well as yesterday with the 66th consecutive quarterly dividend FL.

So before handing over to how awful financial review I will just summarize or Fleet composition as of today. We have three ships on fix DC's. This is flex Ranger which commands the new TC with Spanish utility. And then at the end of May during July shipmanagement Perfect Stranger was transferred to flex LNG Fleet Management. How do we does have all our ships under in-house Management in addition flexible run Flex Resolute have been fixed on shorter-term T's of eight and eleven months respectively off these pieces also have a fixed rate higher culture and these disappears commands subsequent two deliveries from Europe.

We have in total for ships currently operating under variable higher thesis this provide us with what could be described as utilization Insurance while we keep exposure to the overall Market the ship's serving these types of contracts of pleasant surprise flash rainbow and fix Optimus, which was recently delivered on the long-term viability see to Guerneville wage for example will also be operating on the availability is delivered either end of September October three or four ships operating in the spot Market Flex Endeavor Flex cancellation and flexing our ages. So with these ships, we are fully exposed to the ups and downs in the spot market for good or bad.

Both polio industry LoCash back even levels or very strong financial position and the fact that a fleet consists entirely of banjo efficient LNG carriers, which are generally sort of life. So by Charters this isn't certainly a risk we can manage lastly. We have three remaining and fixed new buildings being effects Freedom Flex volunteers and fix Long Island, which we marketed towards potential clients know all in all we think this gives us a balanced contact makes where we are keeping exposure to the overall market and also ensuring an adequate level of utilization and fix earnings for Fleet 4 to 3. We are now 94% fully booked and we also have a fairly high-level income secured for Q4 also with seven ships serving fixed or variable pieces in this case, so I will hand this over then to a financial review.

Thank you. It's been looking at the income statement revenues for the quarter came in a 25.8 million down from thirty eight point two million in the previous quarter.

Revenues in the quarter were affected by the Fallout caused by the covid-19 pandemic which has resulted in lower gas demand and that's impacting great amount.

I just did David off for the quarter was 17.4 Million down from 27.8 billion in the previous quarter.

The result for the closer includes a non-cash unrealized loss on interest rates all over approximately 6.2 million a quarter end. We had entered into interest rate swaps totaling 610 million as an interest rate of approximately 1.3% and the non-cash mark-to-market loss was the result of the continued fall in long-term interest rates during the quarter.

All our interest rate swaps relate to financing agreements and we are not required to post any cash collateral under agreements when the mark-to-market is negative. We also recorded on cash for exchange game or cash deposit is held in Norwegian kroner of 700,000 in the courtroom due to strengthening of the Norwegian kroner against the US dollar and a quarter.

Net loss for the quarter was 6.7 million and just for the above items that just a net loss was $700,100 per share.

They're moving on to our balance sheet house. June 30th. We had a solid liquidity of 160 million report rent down from 120.8 billion in the previous quarter.

The time charge Hakuna rate achieved with a quarter is around our cash Breakeven, right and reduction in cash is primarily due to an increase in working capital of 4.3 million and 1/4 cup. I mentioned we do also have any restricted cash relating to our interest rate swaps and the very limited research restricted cash of $70,000 relates to manage. The deposit is required by tax authorities off our asses a squadron course instead of six vessels on the water with an aggregate Book value of 1.1 billion.

It is.

We are booked vessel purchase prepare mental 349 million relating to the seven new building still to be delivered at quarter-end which represents the advance payment on this.

Total Delta quadrant was 762 million or which approximately 36 million is during the next twelve months under classified as current liabilities.

Don't like to the alpha quadrant was 820 million giving a strong equity ratio of 50%

Social medicine we have now secured attractive financing for all other vessels including the seven new buildings used to be liberal quadrant.

In June, we signed to financing agreements announced in the previous quarter.

The first is 156 million ten years in least by transaction with an asian-based leasing house for the new billing for example, which is scheduled for delivery in September or October this year off. The transaction is priced at Libor doesn't margin of 3.2% per annum and has an 18 year of payment profile annual repurchase options commencing on the first anniversary. And there is a purchase of obligation a dead end of the ten year lease. Or 69.5 million.

The second facility is $125 billion Term Loan and revolving credit facility for the financing on flexible and tear which is scheduled for delivery in the first quarter of 2021 The Five-Year facility a down payment for a 20 years in line with their out of the bank facilities, and we distribute them to a hundred million terminal and twenty five million revolving City.

We have already entered into interest rate swaps for the full amount that I visited the evening interactive all-embracing including margin of 3.3%

In July, we also agreed a ten million according to increase for Flex ostomy under the $629 million facility based on the long-term chart for the vessel with good War wage was delivered Monday this week. We're about 135.8 million transposed wrong.

Full Squadron. We also utilize to swap option under the $629 million facility to replace Flex Amber with the system vessel flexibility alarm, which is the final of a new building scheduled for delivery in the second quarter 2021.

With nine hundred twenty million in that secured for the new buildings the next town from the cat fix is less than 20 million vs. 160 million in cash at quadrant.

Following these transactions. We will have a very comfortable debt maturity profile with the first maturity due in July 2024.

The stage your death maturity profile also get mitigates refinancing risk.

I was on the word back to you say give an update on the market. Okay, thanks a lot. So let's start by doing a quick recap and review of The Spot Market wage for Lindsay shipping twenty friends. Do you have follow the usual pattern the rates week and during February as the warm wind turned the covid-19 or like soft and sentiment considerable. We actually had a short early in March as China dealt what was received at the time as swiftly with the earthquake however education of the outbreak became more evident with law Stones implemented throughout the world the market sell back again in April and has stayed week during the spring and summer months.

headline rates for

Hold on to stock donut spell from fifty-five to sixty thousand in March two hundred thirty-five to forty thousand today in April where they have stayed until early August. However long well, we have experienced. The biggest change in Q2 has been in relation to the Palace bonus sentiment during q1 ballast bonus sentiment was ranging between full balance bonus Thursday's I sure and higher back to her to even on tape economics. I where you get Palace phones from have to her or back to load ports you in Q2. We have seen below sentiment with a lot of voyager's being done at one way economics of your back to Herb. This means achieved have been well below headline rates in the spot Market wage.

With these do however know see improved sentiment in the stock market during August headline rates have recovered to the 15,000 level with sentiment turning bullish off bonus conditions are where we see the sharpest change in sentiment Atlantic is no Bank gets along the economics right Pacific have recovered to fill ballast bonus to help with sentiment thoughts towards better economics for owners looking forward. We do expect the rates to follow the normal seasonal pattern with higher rates during the winter season that said Arbitrage economics mostly likely most likely not sufficient this year to support the blowout in rates that we saw in 2019 and more. So in 2018.

So next slide we illustrate in development in gas prices prior to the covid-19 Tanda make we already have had very low seasonal illnesses due to the to warm Winters in the wall. And generally we occasion demands due to economic slowdown on European buyers came to the rescue and 2019 gobbling off 90% of the about thirty-five million tons of new Supply coming online last year. However with another one winter, we already had the supply overhang and this was Thursday the Amplified with the lock tones and reduced economic activity following the outbreak just we have seen record low gas prices during the summer with European gas for some time actually trading below epic per million. Btu. Asian spot prices have for short periods. Also been trading below two bags and Henry Hub hit twenty years one yellow in June with one dog.

$0.40

we have however in this lately and Jake am is no above Peak covid-19 levels with a price my plan yesterday of 4.2 dollars million with you while LNG prices in North West Europe have recovered 3.8 dollars, which is the highest level since January 12th, following the coronavirus off like we also saw cash in March with West Texas intermediate oil price Benchmark at one time trading below zero while brand faded down to around 5:20 bucks per barrel in contrast to LNG. However, we have seen sharp production cuts for oil with expect the 2020 production all being about 8% lower than twenty. Nineteen. I'm showing the big nine point seven million for the aircraft biopic in Russia as well as somewhat lower output in the US. These are stabilized all biases which rather quickly birth.

back to the $40 range

The only advice determines the price of about seventy percent of the allergies all to pricing from last typically with about six months delay. So we will also see large volatility in a compact prices with currently low contact prices before these phones back in the late and them with oil price recovery while the supercontinent going oil quickly evaporates with recovery and the spot prices resulting in oiling LNG prices, no flatlining once recalibrated spot LNG prices. However, it continues to be in contango spot. LNG prices are in Fairly strong contango as prices are expected to recover and gradually converge to more sustainable prices as public markets is expected to become tighter in the coming years as economic activity resumes.

So let's consider you as I mentioned we have seen record low gas prices and paradoxically the lowest prices have been recorded in Europe despite this region being a major allergy importer taking about 25% of the global volumes.

The reason for this peculiarity is the fact that you will pass ample importance storage capacity and this can act as the buyer of Last Resort benefiting European consumers. We saw the 2019 has mentioned but we have also seen European buyers being extremely active during the Spring buying LNG fist overhand for stores injection the cover in carbs assisting you has also incentivized this holding as LNG as much cheaper than burning cold.

So despite energy demand in you expected to decline about 10% in 2020 due to the lockdowns. We do definitely see that cheap gas is pushing out both pipeline gas both which will significantly down in the first half of the air but even more so with cold facing existence existential threat in Europe from cheap gas and Paisa carbon per month in June u k bolck. I'm not the new record with sixty seven days 22 hours and 55 minutes without consuming any cold power.

Nevertheless the storage capacity in Europe is finite capacity is limited to about hundred million BCM or about seventy million tonnes of LNG equivalent. This is a pretty massive storage capacity have to something equivalent to about 80% of European LNG Imports in 2019. Consequently. We have seen European both coats tapering off during June and July the third thing in the storage curve converging towards the injection levels seen in 2019 and thus avoiding tank tops in the office lower demand from European bias has however resulted in large production cuts of flexible us volumes and this again rebalance prices from the Lowe's home during the summer. I will review the production cuts and more details at the end of The Flash presentation.

so let's

Look at the biggest import area Asia which accounts for about 70% of the Imports and which comprise the traditional import market in North Asia as well the growing markets in southeast and Southwest Asia.

Hey Sal together with you impose about 95% of the global LNG production with Middle East and America's primarily Latin America being mm the input regions.

the Asian the Asian Imports have during

it's still something wrong with the slide. So.

Yeah, okay, the Asian in both have during 20/20 been fairly flat going about 3 million tonnes in the period January to July at the beginning despite one win 13% group pretty robust. The following the lockdowns. We have seen Imports particularly in Japan and South Korea being on the low side.

Chinese and Indian demand has however recovered quicker as locked owns have east and these countries also benefit more from cheaper LNG as they have relatively compact your obligation for imports link to oil price.

At the beginning of the year, there were also some positive sentiment around the phase one paid agreement between us and China and folks were hoping for other parchments you as opposed to try and I assumed in April with recall goes going to seven car goes in May however with the Fallout from covid-19 and the ink is brinkmanship between Washington back by Jing seen lately used car goes to China has tailed off again with only three and two Cargoes in June and July respectively. We also expect only two or three car goes off of August right now. It seems nothing will happen on the political side before November elections in the US and China is now almost forty billion dollars behind them to homes of the billion dollars commitment degrees in January according to standards and four.

So we have no explore the Dynamics behind the swing by Europe. So let's explore the swing producer using a bit more detailed as we highlighted in July, us producers are inherently more at risk for cargo cancellations due to the cost base and the flexible of take complex where customers can typically notify me that 60 days prior to loading by paying the fixed Towing fee. This stalling fee is typically around $200 per million with you.

in contrast to the US calling project the vast majority of LNG projects worldwide are vertically integrated Oil & Gas project where they feed gas and the painting in the LNG production wage associate that gas at very low economic cost if any at all furthermore, the capital investment are generally sink which means the short-run marginal cost of producing the LNG is very low and foremost projects range from 1/2 to 2 1/2 dollars per million bit you

Jack's need to soar speed gas in the morning Market, although competitively-priced u.s. Gas. The cost base is just hire but also more flexible. So it's not not surprised that it's on the right hand side of the Costco are the ones with cargo cancellations the project in the graph with the highest wrote on marginal cost is the Tango flng project in Argentina where they took the IPS has declared post Michelle due to the effects caused by covid-19 despite the cancellation us producers can't drive as they also have built-in flexibility in a business model which any reporting compensation from cargo cancellation in Q2 of a whooping 708 million dollars and thus securing the company and income of $196 for the quarter. That's it companies like tend to do better in a buoyant Market as income from fading activity is then typically higher so dead.

And that's like increase speed gas deliveries to us export plans lately should be positive for future export volumes.

So floating storage you in 2020. We have seen a very volatile levels of floating storage which with a couple of spikes that period of times where we normally see when a limited protein storage or any we first one was piking floating storage in February following the Chinese lock tones, but during the summer we have also seen a lot of Cargoes floating around when I'm low and demand on the soft side.

A level of 3.5 million tonnes floating equates to around fifty ships. So it's unprecedented that we see that many ships in floating storage during the summer months and this is more reflective of disruption. And with the map as prices have recall what the levels of floating store which has started to tail off again, and we are now back to the band of normalized level with Kepler blocking 3rd and chips currently as floating. We all know approaching the winter months again, and we would expect a gradual build-up of floating storage again in line with the seasonal pattern with them. So do expect few calls about cancellation from us and it's likely that some of these Cargoes will end up in floating storage playing the contango time spread instead in our queue one person Thursday. We said that we expect floating storage would be massive and we still expect this to be the case. Once we are getting closer to the peak consumption mods

Then the final fly before summarizing today's presentation. This is updated graph from the July webinar where we shown the monthly and cumulative export growth with associated with the cargo cancellations at the beginning of the year. We were expecting about 25 million tonnes increased exports in twenty-twenty and the story in the first portals life ahead of the curve. Do you think taking photo Asian demand faltered and Europe initially soaked of this violence by injecting cheap gas for storage or June June June, July and August low gas prices have incentivised called cancellations and Export volumes have just started to decline.

We do see it July.

August the P consolation months and expect a gradual decrease in carbon cancellation and those are recovery to some export growth in the fourth quarter, which will just be supportive or make the month.

As of September plus 165 you escargots have been canceled and we expect around 270 car goes in total during 2020 or Which u.s. Car goes off making up around two hundred of these calls.

The older exporter facing big cancellations or is Egypt which exported about 3.7 million tonnes in 2019, but having twenty-twenty only exported about half a million thoughts. We have also seen lower exports from Australia during July and August.

Finally cut already exposed however, remaining stable and all expect it to be a similar level as in 2019.

I've been a lot of projection about gold levels following the call without back and we estimate about ten million increase in a webinar in July due to the higher you is called cancellation and also upward reservations of past cancellation. We know expect go to be about six million dollars in for 20 20 in line with energy aspect recent estimates divorce case and all have however been avoided with both my expecting a fall of six million tons in April, which have now been revised to up to about 5 - 2 million thoughts. Please note. It's important to differentiate between Import and Export numbers expert numbers is a better poxy for shipping the man about three to four percent of Em are consumed by ships as boil of gas during Transit and cargo operations depending on various lengths and whether it involves floating storage, which also drive straight demand

Well that thing trying to Twenty-One expose is more difficult as this will be very dependent on the winter weather as well as the shape of economic recovery when it comes to the winter temperature chances of El Nino are very slim, and actually we seen La Nina for this autumn and winter with fifty-five to sixty percent probability La Nina weather.

Usually means colder winter and should be positive for gas the map when it comes to economic recovery. This is very much tied to how quickly a vaccine is brought to the market and this in a normality to return to everyday life. However, if quote on demand recover, there is a lot of potential in the energy Market both near-term and long-term wage should be supportive of Fate markets. So then to summarize

The somebody it's actually exactly the same as you know webinar of July on July 2nd with the only two changes the first being that we have no secured 926 million in financing phone. You release further than nine hundred and ten million due to the ten million additional financing secured for Flex Optimist. The second change is that the second wave of covid-19 has now become a reality in many places other than the probability.

with the

Fix Jose Flex LNG is well-positioned with a mixed portfolio fixed variable contracts as well as chips in the stock market or Market. We think will improve at home. We expect substantial reduction in u.s. Cancellation and increased protein storage and for floating storage. We have the best ship and so ships are large with very low levels of power loss on the cargo tanks that's for serving maximum cargo deliveries near the winter temperatures and the shape of economic recovery are the two most important factors, which will affect the shipping Market as expand on previous line.

You're good at politics to the mix with the November election, but we don't really expect a quick resolution or to the disagreement between the two super bowls with only three new buildings being older in the first choice of twenty-twenty. We Are Back to Basics in terms of new building contacting the positive side of a week is shipping Market coupled with extremely limited appetite by investors and birth to commit Capital to the sector is that new buildings? Usually I up, which is the case for most shipping sectors these days. However, we do expect to see project all those going forward with some of the big projects and last year as well as the mega expansion by cut off lastly. We would like to point out a strong balance sheet and financial position. We have secured Equity. We need we have a substantial cash position of hundred and sixteen million at quarter. And and finally we have no nine hundred twenty million of financing in place for the remaining new bills.

I'll financial position of brand new Fleet of first-class operational performance pictures in a very good position to continue to build our company. There are about the old steam ships and price fuel ships do for redelivery under the existing Charters next five years.

Edwin is running a story today about Nigeria LNG considering renewing the fleet by getting rid of the steam steamships now are still 200 steamships in the market or about 40% of the place. So we think this will create ample opportunities for us to continue to build or contact portfolio and showing a robust commercial and financial strategy. So that package includes today's presentation. Thank you all for listening and let's open for some questions. Do you know

I think it's all the participants doing over the phone line. So you want to ask a question. You will need to press star and the number one in the telephone and wait for the videos. Should you wish to cancel press the pound key or has key. Once again. It's far in one quick question.

And our first question comes from the line of Gregory Lewis from btig. Sorry. The line is not working, please go ahead.

Yes, thank you and good afternoon everybody. I guess. My first question is is around the dividend, you know clearly you guys have the you know, the balance sheet and the website where you wanted to be you have you have, you know, the financing is basically taken care of. So just kind of curious as as we think about the decision around the dividend this quarter of would you kind of characterize it as more of more around the uncertainties around covid-19?

Yeah, I think.

And we decided to cut the dividend, you know, this was back in time when we suspended the dividend way. Of course, it was a lot of uncertainty. May I ask who I point out and certainty it was the the key factor has of course we have had, you know fairly High exposure to the sports market. So in that way, you know, we have seen that Q2 and Q3 would be very tough Waters. That's no surprise for us. We said this already in in in in in February and repeating it a couple of times since that. So so it's more about you know in that situation also, especially, you know, if you look back to March, you know with the financial markets and credit markets where in turmoil, you know, surprisingly enough we are now in August and S&P 500 is dead.

Above the level we we had prior to the to to to the call with the situation. So even you know, both the uncertainties in terms of the financial Market with them doing pretty poorly and you know the amount of capital available and so they about how we would perform and Q2 and Q3. We thought it was, you know, really no benefit of pushing out evidence and and you know pause it would be better to to be in a position to to preserve the cash think uncertainty right now seems to be lowered especially if you look at Market so, you know as once on stage, of course, we will do a reassessment of this month, you know, the companies in in in this kind of group with with all Affiliated shipping companies as I mentioned in the the beginning that you know, we have a big dog.

Long track record for you know being shareholder family and paying out excess cash if we have that ability, you know, it's not like we're going to build Empire sell all that the the free cash flow shall be paid out if we have excess cash to shareholders and I know you know, we are finished with you too. It's not like 3 will be great water heater. So so once we are starting to make money again, then of course, we will have a Frank discussion about that with the board and and it's a bit too early to predict the outcome of that. But what I can tell you is, of course, we we will of course a dividend when we are making money.

Okay, and thank you for that. And then just you know, clearly Europe has been as you know, I guess stomping grounds not the right word. But that's where a lot of the LNG has been dead. You know just simply as there's really no other place to put it as as we as we move through the winter. How do we how do you kind of think that month that LNG storage in Europe? You know, how do we how do we think that impacts the market is? Is there the potential you know when you touched on Thursday, is there the potential that some of that LNG could could return to the market if there's are opportunities in Asia or or is that once it's in that system life doesn't it tends not to leave just kind of little curious around that.

I think

If if you look at the market right now, of course, we have other reduction in the floating storage and the floating store, which we have had over the summer has been people playing up on Tango or playing time spec. It's more been, you know descriptions all actually, you know, you have to put it somewhere else. You mentioned like a dumping. All right. Now, we have gotten down to a more normalized level and we expect this package pricing again because know you can actually pay the time spent where you're buying let's say September Cargoes and selling, you know, the sailing and then maybe floating amount and selling in June. So I'm at trial November of price. You know, we have had the situation where Energy prices have been very low which have made this kind of time or batoche difficult. It's becoming open over again. So so we will, you know expect this to you know, have a guide your phone number.

Stopped the last two years. We have seen around 35 minutes 35 ships in the floating storage. We think it probably will be higher this year.

And then you know in terms of reloads, I think that's the other big factor usually which is very positive for shipping markets. If you starting to get spread between you or Benicia, you could certainly see it, you know, CarGurus blowing out of you for reals to into to Asia, you know with kind of Northwest European prices as I mention in home installation going back to three point eight dollars while jkm is at 4.2. Is it still a bit not loaded the spread to to kind of make that paid work, but I'm not, you know, it will be of course dependent on the winter, you know, uh, cold winter will create more demand and then of course as I mentioned the economic recovery is also paying it's possible but I am markets are becoming more normal life than we see that we have a big big rally in in in the gas prices which are also driving of the Fate rates recently.

Okay, perfect. Thank you very much for the time. Thanks, Greg.

Thank you. Once again for a questions, please. Press star and one in the telephone instead.

No further questions over the phone line, please continue.

Okay since like we can join them for the for the day. Thank you everyone again for for participating in the presentation. We will be back in November with the kukri numbers. Hopefully the call with the focus will gradually fade away and and we're getting back to normality page and hopefully back in in November, you know, we will have pretty good with the markets. So see you all down. Okay. Thanks.

Thank you.

You said this is what I conference with a thank you all for participating email disconnect. Have a good day. Everyone and stay safe. Thank you.

Yes.