Q3 2020 Torm PLC Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the tomb ski Chalet Twentytwenty School at this time all participants are in that Lisa.
After the speaker's presentation that would be a question and answer session to ask a question. During the session you wouldn't need to press star one on your telephone.
I must advise you that this conference is being recorded today and I would now like to hand the comes in so that's your speaker molten steel. Please go ahead.
Thank you.
And thank you all for dialing in for Troms Conference call regarding the results of the third quarter and first nine month from sovereigns Wendy.
My name is more when I'm head of corporate finance is residential.
As usual, we will refer to the slots as we speak and at the end of the presentation, we will open up for questions.
Slide two please.
Before commencing I would like to draw your attention to our safe Harbor statement.
Slide three.
With me today, I have <unk>, a and C O young men and CFO can better I'll hand, the call over to you.
Thank you Morten and please turn to slide four.
They want welcome and good afternoon. Thank you to all for dialing in.
Yesterday before we commence the review of our financial results I would like to express my gratitude to see fares.
Foundation for Tom's operations and why the restrictions on crew change have decreased all over the world. They continue to make great sacrifices during this troubled period.
Today also a basic question goes to the crew on board to traumatic Sandra that over the weekend were attacked by pirates in the Gulf of Kenya.
Due to their excellent Siemens ship and the excellent support from the Italian Navy they managed to stay safe and in control of the situation.
Turning now to the old product tanker market freight rates here in the third quarter of Twentytwenty have come down from what you can to an unprecedented high levels. During the second quarter, primarily impacted by the unwinding of floating and shore based stores.
The quarter was also characterized by a record high regional races parity with the with market being significantly stronger than the east Ju two rig up low vessel availability in the Western Hemisphere, Oh go into details on the market shortly.
Now for the third quarter.
The product tanker fleet realized an average Tc of $16762 per day and here for the first nine months of Twentytwenty. They grew in number was $21942 per day.
Looking at profit before tax in the third quarter of 2020, we realized profit before tax of $1 million and.
With the number being a $129 million for the first nine months of the year.
The number is negatively impacted by nonrecurring highest standard provision of $8 million related to cargo claims.
Our return on invested capital, our earning per share was 2.7% for the quarter, 12.5% for the nine months.
As announced in our second quarter earnings release, we sold two older vessels during the third quarter.
Yeah. After the quarter ended we then agreed to fight to 2010 field deep will emphasis for total consideration of $32.6 million.
These vessels are built at the Korean well know when you're out at least in our industry as you and I misspoke.
Yeah, we are in advanced discussions for the financing of the vessels and the purchase expected to have only minimal impact on our liquidity position.
So, though our scrubber program. This is progressing according to plan and as of today, we have installed a total of 43 scrubbers on our feet.
Lastly, I want to mention that Weve refinanced debt related to eight vessels, thereby postponing the majority to 2027 for this particular facility. This further supports our strong financial position and the attractive that rebate repayment profile.
Yes.
In line with our environmental focus we have in this particular agreement managed to include a few to emission linked price mechanism that motivates us through monetary benefits to reduce our Q2 footprint and subsequent to live up to our most.
40% reduction target by 2030.
Now, let me turn to some of the drivers in the product tanker market.
And please turn to slide five.
As already mentioned that the product tanker.
Rate averaged $16762 per day for the quarter were.
When we look at the individual segments than on the left to.
Right.
$23854 per day into one race of 20629.
In the locker secondly, we achieved rates of $15077 per day, and finally in the Handysize segment, we achieved rates of $7628 per day.
Since the unprecedented freight levels that were reached in the second quarter product tanker rates have come down.
Also here in the third quarter and this development has continued into where we sit today in the fourth quarter.
We see that Threed drive us from the third quarter that I want to highlight here.
Firstly, the rebalancing of the oil market, which document with the unprecedented shock to the global oil demand back in April.
This led to a continued unwinding of floating storage, which released a loss number of vessels into the market in the third quarter, and obviously reduced the freight rate environment.
Secondly, we saw an increasing number of crude newbuildings taken clean cargo on the meeting the voice as the result of a weakening crude tanker market.
Thirdly agenda.
Here in the last quarter. It was it was really characterized by Rick Hi regional rate disparity EPS I already mentioned.
While you can say generally greater levels, we're on a weakening trend the market in the west was actually still showing strong earnings as a result of record low vessel availability here in the western hemisphere.
So far into the fourth quarter, we've experienced that the number.
Our new Koby 19 cases, Unfortunately had been increasing fast, especially in Europe, but also a tenancy in the United States. This has resulted in renewed dropdowns and installing all demand recovery.
It has kept refineries from ramping up their brands.
And logically this a subsequent and limited trade flows which is reflective also in the week product tanker freight rates. We are currently experiencing.
I'll explain all of these factors in more detail in a short while but before I get to the let me stress that the uncertainties around the COVID-19 impact on the global economy, and almonds, specifically that remains.
In light of the second wave of Koby, 19 cases, especially in Europe.
Please turn to slide six.
Obviously.
There are a number of different drivers.
Behind the freight rate development this year, but a large part of this can be explained by developments in products stockpiles.
On this slide that illustrates the dynamics of the COVID-19 impact on the oil demand on refinery runs and changes in the product stockpiles.
Initially as you can see refinery runs for slow to react to declines in demand. This led to the unprecedented inventory builds which in turn benefit as Tom and benefited the broader product tanker market.
By the end of the second quarter autumn.
Walmart has actually started already then to rebalance Esa Lockdown measures were relaxed in many parts of the world and the oil demand started to recover.
As refinery margins remained very weak refining Ross did not ramp up as fast as we move from the stop building phase into a stock crawl phase, which is generally associated with headwinds for the tanker market.
This is being released from floating storage and de stocking lessens the demand for transportation.
Now in recent months, we've seen this second wave of COVID-19 emerging in Europe, which has resulted in new luck downsize, we speak to the break on.
The oil demand recovery.
Similarly, the U.S. is facing a third wave of infections.
What do you see this time around refineries are there already running at a very low utilization and that basically just now keeping runs from ramping up.
This will avoid a new large scale Stockton from emerging and the market in general continues to rebalance.
We do believe that it's difficult to estimate the exact timing, but the inflection point is expected to be reached wants the country's reopened there.
From their current Dropdowns, the demand recovery gains momentum and this will bring product inventories back to normal levels.
Thanks.
Slide seven please.
So let me say a few more worse now a button. This doctoral because we really think it's very important for the dynamic in our market. The de stocking was initially driven by the offshore inventories and most of the excess closing stores off.
Clean petroleum products, which peaked at around 14% back in May has cleared by now.
Level of vessels inference doors has stayed relatively stable and what do we see now is right to around 6% of the fleet is slightly above what we consider a normalized level, which would be at around 4%.
It should be mentioned that we continue to see some volatility in floating storage as the key will be 19 continues to impact the market, but this is at a small scale compared to what we saw back in second quarter.
For example, recent that had been floating storage picking up in West Africa.
The current oil structure.
Does not provide for the contango necessary to significantly into storage.
If we look at onshore inventories.
We have also started to decline. Although this process has generally taking longer than in the case of offshore inventories, especially when we look at diesel as a particular product.
For example in main trading hub, so assists us in North West Europe, Singapore, the middle distillate stocks have reduced significantly since September but are still up 10, 12% above the five year average lives.
Like this is on the other hand, only 5% above the average levels.
Looking at local stockpiles the market continues to be impacted by excess inventories.
And while a de stocking means that part of the demand is being met by local stockpiles rather than being import. It is important to mention that up all of the inventories are likely to compete with trade.
We estimate that around 40% of the cumulative inventory build since March is actually accountable by China's clean product stuff built much of which is either trait neutral or even trade, creating considering that China is a net exporter of these products.
And here eastern.
Please turn to slide eight.
As already mentioned one of the main characteristic of the third quarter was a record high disparity between regional freight rates and more precisely strong outperformance of the western market.
This was driven by an unprecedented shift of the feedbacks from west to East back in March April when the Atlantic Basin demand for gasoline for NAFTA is Phil.
A bit due to the COVID-19 lockdowns. This.
This resulted in a loss surplus of products being export to Asia.
Now when when these vessels right.
Back in Asia refineries in China, North Asia cut their exports amid the weak export demand and lower refinery margins, meaning that basically the seat banners increasingly became you tavy as products moving back to the West were limited.
Consequently, the share of modest in the east in August peaked at 54% compared to historical averages around 45% and that was what in turn led to a strong outperformance of rates in the west markets. Since then.
We've seen that defeat in the East has started to normalize although in historical terms this year versus in the west remains relatively low.
Slide nine.
Thanks.
The market in the fourth quarter has so far been affected by the increasing new cases of COVID-19 in Europe, and the United States and this has stalled the demand recovery in these regions on the other hand, if we look at countries, which have not experienced a similar emergence of the second wave owner.
Actions like China like India.
Which countries have seen a demand come back in recent months.
This suggests that lots of Arizona is under control the vaccine becomes available to a wider population and the effect the country's reopen we will see a wider oil demand recovery and indeed, the recent news for potential Corona virus vaccine breakthrough from Pfizer.
Gifts a renewed hope for that.
Slide 10 please.
When we turn to post Koby 19 market drivers, we cannot avoid talking about the refinery dislocation yet again.
Refinery margins have.
I've been honored historical pressure as a result of Koby 19, and this has actually resulted in an increasing number of refineries and housing closures here in recent months.
Consequently around 3 million barrels per day of refining capacity will potentially be removed from the market within the next three years most of it being located in regions that are already large importers of refined products that being Europe and on the west coast of US all of Us East Coast.
Australia, New Zealand and even in South Africa.
So at the same time at this development.
Taking place approximately 5 million barrels per day of new capacity is scheduled to come online mainly in the middle East and in China. The regions that are already today loss exporters of oil products.
Both these developments are clearly positive for trade flows and per ton mile in the post 19.
Your post Koby 19 world.
There are only a few projects, which are less positive puts rate most notably the large scale on coal refinery in Nigeria, which is nevertheless, not expected to come online before 2020 two.
And here let us.
Go to slide 11 please.
What makes the current situation different from the other destocking peers, we have seen over the past couple of decades is that the order book to feed ratio for product tankers is currently at a historically low levels you call us around 7% of the two.
All existing fleet.
This has been further supported by the relatively.
Low interest for Newbuilding ordering so far here in Twentytwenty, which is a result of the uncertainties of cost to choose the corona virus, but also.
The uncertainty around the future propulsion system of the vessels, although we have recently seen an increasing interest, especially for the crude tanker segments in the form of letter of intents being signed for shipyards.
It is unlikely that we'll see significant additional pressure on the market from newbuilding deliveries at a time of Destocking.
As opposed to the previous Destocking peers, and the slowing fee growth rate is a key point to the fundamental positive developments that we expect for the product tanker industry as a whole.
Hi, 12 please.
To conclude our remarks here on the park tanker market, Tom expects to see volatility in the market in the short term that will be predominantly related to the core with 19 development and.
This virus.
Impact and the health crisis impact on the global oil markets and economic activity.
Aside from the 19 effects.
We see that a number of key market drivers for the next three to five years, we remain positive such as mentioned that refinery dislocation the low order book they.
They will provide the support two product tankers for the long term.
Thanks.
Slide 13 please.
Looking at our commercial performance.
I'm truly pleased that we again here in the third quarter of 2020 have outperformed the peer group average our largest segment loss.
In the third quarter of 2020, we received achieved right.
Rates of $15077 per day. This compares to a peer average of $14016 per day.
Looking at it on an aggregate basis. This translate into additional earnings of $36 million in the third quarter alone and $5 million for the first nine months of Twentytwenty.
In general.
I am very satisfied.
That Tom's of Razen platform continues to deliver very competitive Tc earnings.
I should correct myself that is obviously 5 million for the for the third quarter alone and $36 million for the first nine months.
With that slide 14 please.
Thanks.
A key deciding factor for delivering this above average TC earnings is driven by our continued focus on positioning of vessels in the patients with the highest earning potential.
We have a balanced strategy, where we generally do not position all of us in one patient, but instead have some overweight in either east or west depending on our expectations for the future market.
Towards the end of the first quarter and the beginning of the second quarter. We started a general repositioning of vessels towards the east of Suez in anticipation of strong markets. There during the second and third quarters.
This materialize by strongly outperforming earnings from the Middle East, especially in the second half of Q2, however, as the extent of the MRC migration from the west to the east became apparent.
We started to rebalance towards west of Suez During June in anticipation of potential strong western markets in light of the same supply side there.
We had just below 50% of our M. us precision west of Suez during the third quarter and as I mentioned earlier.
Good and with Hess during the quarter seem significantly stronger and been significantly stronger than what we experienced in the east.
The relative stronger with markets have continued here into the fourth quarter, although to a lesser degree than what we saw in third quarter.
Now, let me hand, it over to Kim for the further elaboration on our operational levers the cost structure and not least the balance sheet or two.
Thank you Jacob please turn to slide 15.
With us, but based profile Tom has significant leverage.
Two increases underlying product tanker rates as of 30 September Twentytwenty every $1000 increase in the average daily Tc rate achieved translates into an increase in EBITDA of around $4 million in 2020, the corresponding figures increase too.
$23 million in 2021 and $26 million in 2022.
As of November the coverage for the fourth quarter of Twentytwenty was 66%.
At $13274 per day.
Slide 16 please.
Before reviewing our cost structure and financial position I would like to remind you of terms operating model, where we operate a fully integrated commercial and technical platform, which we believe this a significant competitive advantage patrol.
Importantly, it also provides a transparent cost structure for our shareholders and eliminates related party transactions nationally.
Naturally we are focused on maintaining efficient operations and providing a high quality service to our customers. Despite this trade off we have seen a gradual decrease of 18% of Opex per day over the last six years, which translates into a total decrease of around $36 million on an annual basis.
Opex was around 6006 $700 per day for the third quarter, reflecting an increase of around $700 per day compared to the second quarter.
This increase is primarily a result of a very positive development. Tom has experience with respect to crew changes during the third product performed just below 1000 crude changes all around two thirds of our total crew on board our business.
This has reduced the number of crew with old you went from a contractual the current level of around 6% down from approximately 40% at the peak during the second quarter.
Thomas still experiencing increased costs related to changes as a result of Freeport measures such as crunching requirements and is it is expected that an element of these costs will continue throughout the COVID-19 pandemic.
Slide 17 please.
I would now like to review our financial position in terms of key metrics, such as net asset value and loan to value vision.
Vision values have decreased by around 4% during the third product 2020 and the value of strong business, including new billings, but just around $1.6 billion as of.
30 September 2020.
Outstanding Cross Dept amount $867 million.
So its use of September Twentytwenty, and finally, we had outstanding committed capex of $86 million related to our new building program and cash of $157 million as of 30 September Twentytwenty.
This gives tom and that loan to value of 49% at the end of the third quarter, which we consider to sit at conservative levels.
The NIST net asset value is estimated at 867.
A million dollars as per Thirty's or chipper Twentytwenty. This corresponds to a to 11.7 dollars or 74.1 Danish krone per share.
In short, we have a balance sheet, which provides us with strategic and financial flexibility.
On the following slides I will give some more insights into our liquidity position capex commitments and our debt profile. So slide 18. Please.
As of 30 30 as of September Twentytwenty, Tom had available liquidity of $289 million cash totaled 150.
$57 million, and we had our undrawn credit facilities of $132 million.
Our total total capex commitments related to our new billings were $86 million as per 30 September 2020, and in addition to the Capex related to Newbuildings. We also expect to pay $9 million for retrofit scrubber installations on vessels on the water.
Our quietly amassed second hand vessels I expect it to be delivered between November Twentytwenty on February 2021, and the cash consideration of $32.6 million will be paid accordingly as mentioned we are in advanced discussion to finance these vessels.
Tom strong liquidity profile, the capex commitments are fully funded.
Funded a very manageable while the liquidity position at the same time provides room for pursuing new opportunities opportunities should they arise.
Slide 19 please.
After having finalized the refinancing in the beginning of 2022, we have eliminated all major refinancing until 2026.
Which provides strong financial fixed financial and strategic flexibility to pursue value enhancing opportunities in the market. We have adjusted our 30 September 2020 repayment schedule to reflect our recent concluded refinancing as Shaygan mentioned, which was agreed after the quarter ended and as displayed on the slide we have no major repayments.
Until after the 2025.
With that I will let operators open for questions.
Thank you, Sir ladies and gentlemen, we will now begin the question and answer session as a reminder.
Wonder if you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced you can cancel your request at any time Lisa.
Once again it's.
Wanted to ask a question and your first question comes from the line of Eric Act of SCB. Please go ahead.
Hi, Jacob I came along.
Few questions from my side.
Firstly.
We've now been witnessing quite depressed rates for for some time unusually rates they start to climb during Q4 as the winter season kicks in.
Do you expect this to happen this year, despite the high inventory levels and the new Corona rustic restrictions and if so when do you think will be the inflection point.
Yes. Thanks, Thanks for that question and and actually we did have the same day.
At our last conference call.
Back in August after our Q2 release, where.
While we were careful in saying that we thought that this year, probably the seasonality in the freight rate environment would be so cute thats. Unfortunately still our take on this.
My instinct.
From the traits, we see with our customers is that it is activity is not.
As strong as the as it added normally is that this is isn't it doesn't mean that we can climb from the current relatively weak freight rates that could be some volatility, but should we expect a big shop increase in freight rates I think that will coincide with the rollout as or discussed of.
A vaccine globally, so that so we get a consumer pad on that is more like the one we had pre COVID-19.
Okay. Thank you for that.
Then my second question is on your vessel transactions during during Q4, you're required to 2010 built mosques for $32.6 million.
How does that value compared to the price you received on the vessels you saw earlier this year.
They are comparable in anyway.
Yes. So that's a good question they are not directly comparable since the vintage of the ones. We've sold is around 2002 2003.
But if you look at the price curve.
Five yields that was also part of the.
Some of the material we have you.
You you will see that prices of vessels have gone down in the secondary market over the last six months, even though they are then not comparative of the same we have sold.
Previously at prices that will translate into higher prices.
Then then what we are acquiring at today, but they're not the same vintage.
Okay, but it's fair to assume that.
The price if you had bought the same us six months ago, the prices would be.
What's different.
Significantly above us.
Okay. Thank you.
That's all from it for me. Thank you. Thanks.
Thanks, Good questions, we have a good day thanks.
Thank you. Your next question comes from the line of Jon Chappell of Evercore. Please go ahead.
Thank you good afternoon.
Morning, guys, if I wanted to ask.
I wanted to ask about the margin in a different way, so 10 year old vintage Im sure Youve got a very attractive price for those but with all this focus recently on.
Carbon emissions in.
No youre propulsion.
What was the thought process behind buying ships that will eventually essentially be 11 years old.
In the next couple of months was that strictly an opportunistic buy in but not really a strategic focus going forward.
Yes, no so I think we.
The way we look upon this is that an acquisition of an asset should of course fit with the economic logic as you point to.
Where what is the sweet spot on return on invested capital over the coming years.
Thats one criteria. The second criteria is that it does fit with our Q2 emissions ambition.
Around ultimately by 2032 have a 40% relatively lower future commission on our feet and this particular vessels assistance to some of the others. We have where we can see that some of the retrofits we can apply.
Actually means that these vessels will so.
Sort of on a relative basis provide an even better performance on emissions than what we had without the vessels.
We don't see them as a long term.
Part of our fleet as you will have seen the average age of the vessels that we are sort of recycling and going out of our fleet have vintage of around 18 years. So.
Before before 2030 likelihood is that these vessels will not be part of it but in the meantime, we actually think that they fit these two criteria.
Typically to be good.
A good risk for for the cabin, so that will be employed.
And number two that they are actually meeting the huge we missions towards yes. That's the way we will think about this investment and also any future moves that we will be taking.
And as it relates to future moves in that slide you put on the refinery closures in the new expansion.
Obviously, I think we've all been talking about for about 15 years now that finally seems to be coming to fruition. So.
Next I'd like to thank all reminding me.
Yes.
Been painful for me to.
Should we expect to see more LR to all our one investments.
As you think about your fleet over the next five years or so as opposed to your core am ours to kind of meet that need.
Lengthening of hall dynamic that's that should be hopefully occurring.
Yes, I think you are right to point to that that the longer haul trays.
Would qualify for that customer demand.
Will increasingly also.
Move more towards long rage visits.
We generally subscribes to that in the latter part of this decade.
That could be a tendency to.
Favoring larger vessels or smaller distribution vessels.
Okay.
Okay, and then if I may just too.
Kind of nitpicky questions I'm trying to understand the stock price reaction today, which doesn't seem to quite aligned with the results in the presentation. So first of all the 8 million of cargo claims in the third quarter, which I think would obviously be considered nonrecurring that may not be treated as such right. Now can you just explain what that is and is that.
Issue going forward or is it really ring sense in the third quarter.
Yes, absolutely. So it is a number of the cargo claims that we have accounted for where it is in dispute.
Whether we will actually ultimately to be picking up the sort of the obligation to pay this or not and it is ring fenced to these particular events and a nonrecurring item.
Okay and then the second thing is you, obviously paid and 85 cent dividend almost.
Almost two months ago to the day.
But in the in the presentation. It says in line with your dividend policy no dividends will.
We'll be recommended by the board for the nine months ended September Thirtyth. So.
I want to be clear I mean, the dividend policy is still 25% to 50%.
And then the no dividend based on the nine months and you already said 85 cents, so you're effectively saying based off the third quarter results. There is no recommendations and the board is that correct.
That is that is correct.
Let me qualify that our distribution policy.
To evaluate semi annually based on the net result to disappear so that is either dividend or share buyback, 25% to 50% of net so actually it was not even on.
On the board agenda.
To be discussed because that will be done.
At year end, where the second half of the year results within.
The ill be taking into account.
But you're right I think that clearly there might have been a little bit misleading.
Explain some of the things options, but anyway, that's all I have thank you Jacob.
Thanks, Good to go to talk John.
Thank you. Your next question comes from the line of this constant of tanks Keybanc. Please go ahead.
Yes, good afternoon.
Hello. My question is has been.
So rather but I was thinking about scrapping we haven't seen a big.
Correct.
News given the lease rate environment are you hearing or are you seeing signs that that's about to change.
Yeah. Good good question as well.
The fleet.
And the percentage of the fee that going for scrap has not really changed.
Over the past 12 months, you can say that what would lead that to materially be different would be some kind of regulation.
Either.
On the features of vessels and or on a carbon tax that could potentially lead to accelerated scrapping, but when we looked at the vintage of percentages.
Our opinion, so far is that there will not be an acceleration necessarily of scrapping within the next couple of years, but when we come to the second half of this decade. So 2020 five onward, then when you look at the pool of potential vessels that are meeting the current average age for scrapping is 25.
That pool of vessels will significantly increase as we move into the second half of this decade.
Okay. Thank you.
And the second question is.
Scrubbers.
It's a little bit earlier this to.
Cause.
[music].
Last year, but still continue to install scrubbers on somewhere set some.
There are number of scope is what is your experience so far.
Can you quantify a little bit about savings as you have seen.
Okay.
The bulk of differentials are no, but how can you quantify anything about your savings so far.
Yes, so what we can say is a that operationally we are experiencing no.
Sort of operational issues with this clubbers itself.
On the other side of the equation the economic return.
Then we are looking at Capex.
Payback time, depending on the size of vessel and depending on the.
Whether it is a retrofit or where they come from Newbuilds. It is generally a payback time around five years.
For our total install scrubber feet.
Okay.
So you had a higher maintenance cost or is it thats expected.
Yes back to my point that I think everything that that we sort of which is under our control you can say operationally around the retrofit itself around the subsequent.
Operation of the scrubber, that's been no surprise as it is in line with.
With what we had expected.
And we are very pleased with that operational sort.
Sort of performance that we see and when we then look at the financial return of the Scrubber then.
Then it is.
With the current.
Spread profile that we are experiencing and the forward curve. It is payback times around five years.
Okay. Thank you that's all for me.
Thanks Lawrence.
Thank you and your next question comes from the line of Phil amendments of body Winchester, Sir. Please go ahead.
Good morning, gentlemen.
Total about the Grand differences between East and West and I was wondering if you could provide some more color, but what were your what you're seeing in the market as of now.
Our long terms or in Europe already having an effect.
Thanks for that.
And so what we are experiencing is that currently.
Freight rates in the western Hemisphere us slightly stronger for M&A and what we are experiencing in the in the eastern.
Hemisphere, but it is not to the same degree.
As what we saw only a couple of months ago. So the impact has been there lower.
Man.
For transportation in the Western hemisphere, leading to lower freight rates, albeit they are they are still.
Somewhat above what we are experiencing in the east.
So it will be very precise.
The freight rate environment in the east is around let's say funny math seven $8000 per day and is probably around 10000 in the west.
All right. That's helpful. Thank you and I will sort of branch by your Q4 coverage for the Panamax class and I was wondering if you could provide some comments I mean I know you have only two two vessels so.
Could you elaborate.
Capital rate.
Good question, yes.
Sorry, I was wondering if you could provide some some comments over your handymax performance for Q4.
I think the rate that we have there is close to what is on the market for a very small portion and as you point to it is rather position than when we only have two units so and.
So I think at the end of the day for time.
Our freight rates will average out over several quarters, whereas if you have a bigger pool of vessels like for instance, what we have in a must we will see that advertising are taking place within the quarter itself.
So I think it's just.
Coincidence.
All right that's all for me. Thank you.
Thank you.
Thank you there are no further questions from the telephone lines.
Thank you.
Yes.
Okay, we have.
Two questions from from the web.
One question relates to.
The benefits.
Of our public listing.
Kim would you leverage.
I have heard that one.
Being listed has that.
Several advantages for the primary advances as of course, the ability or the opportunity to raise.
To raise equity to raise capital.
In the public market.
So that is one of the five function primary function.
Secondly.
It also provides the opportunity to.
Issue new shares as a currency when making.
Making M&A transactions.
And on top of that.
Being listed required.
An extreme sense of transparency a high degree of communication.
An extremely strong covenants and hence also strong control framework. So when you add all that up India and that will.
Given insurance for all stakeholders broadly.
That that we are living up to two two and our outmost.
If it on all these all these accounts so I think both extremely valuable.
Why being a listed company. So no we haven't we have no intention socio for reducing our company. We are we are very happy to be listed.
Thank you and we have a second and last question.
Around our view on M&A and consolidation.
JW leverage.
Well, we're always open for for the dialogue.
And I would say.
What we would be looking for is obviously that there is a commercial fit.
With with a partner we will be looking that is to whether it creates additional value to our shareholders.
And if these themes.
Our in line, we are always open for for discussions.
Okay. Thank you.
There are no further questions from the web.
So this concludes the earnings conference.
Thank you all for dialing in have a good day.
Thank you, Sir ladies and gentlemen that does conclude your webcast for today. Thank you for participating and you may now disconnect.
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