Q3 2020 Navigator Holdings Ltd Earnings Call
Thank you for standing by and ladies and gentlemen, and welcome to the Navigator Holdings Conference call.
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Thank you very much and good morning, everyone and welcome to navigate its third quarter earnings call.
As we conduct today's conference, we will be making various forward looking statements.
These statements include but not limited to future expectations plans and prospects for both the financial and operational perspective.
These forward looking statements are based on management's assumptions forecasts and expectation shows of today's date.
And as such and such.
Such subject of material risks and uncertainties.
Actual results may differ significantly from our forward looking information and financial for cash I.
Additional information about these factors and assumptions are included in our annual and quarterly reports.
[noise] filed with the Securities and Exchange Commission.
Our speakers today will include a usual Harry Deans, our Chief Executive Officer will lead off followed by Niall Nolan, our Chief Financial Officer, and winding up our conference for today will be comments from a wave and lead leave the them and our chief commercial officer. So how.
Why don't you take over the call.
Thanks, David.
Good morning, and it's everybody in the call I hope, you're well and Keepitsafe.
Of the beginning of September and light with the prevailing doubled the advice we reopened the company offices on a phased teammates seem be basis, what's the.
The other working hours to book of the just risk and to maintain so should the seats and.
That's true that's about 10 pre amazed at the high level. That's the second wave of cold and 19 stuff the to take hold and late September and.
And we have subsequently how to close the other offices again.
Once more of your running out of business remotely from numerous home offices worldwide. The.
We expect this will remain the case well into Q1 2021, that's not the on.
Well the old already familiar with the technology, that's ensuring a seamless transition on maintaining business as usual one part two and other operations.
Cost of the most all of our employees.
That's true the prospect of the flies the Fox even provided the glimmer of hope for all of US almost a welcome shortened the arm for the growth would point of me.
The whole of and hope for this vaccine or one of the other was a totally on the development of plus but what kind of do you have good efficacy and.
The quickly of all the globally most of the <unk>.
Although the one.
Yes, the LPG net production and exports have been remarkably resilient through the spawn dynamic and there's no sign of abating and for.
But the recent modest uptick.
And U.S. rig cadence helps for that underpin confidence and the LPG supply of dealt with and they did.
I think in for the winter season, the U.S. LPG stops and <unk>, that's the coupled with form of all places and imprisoned up for the LPG spread and the Boston bonds, and China should ensure that sport part and a price the move.
And it was pretty clean and to know the despite the and parts of the weather hate wasn't and petrochemical supply from public and all those each other it's all the other business the need to be profitable and Q3, albeit at lower levels.
We have built and the momentum of true to with a net income of $1.5 million on an adjusted EBITDA of $51.9 million and Q3.
Oh, that's the terminal joint venture was profitable for the quarter, helping to more than offset the impact from the shipping business all of the weather disruptions in the U.S. Gulf.
The Corporately and designed to date, all PC revenue net income and EBITDA of all improved substantially when compared to 2019.
Utilization of the other half of the proved to be a bit of the role of course, the the <unk> yeah.
The stuff to the yield of the high 90 per cent levels rates the to the mid 80 per cent levels and February March and April when the and then it struck me for rally into the low 90 per cent levels and May and June.
Unfortunately, the other coffee and utilization rates for short lived that's Hollywood lot of no total over 25% of the U.S. global olefins capacity for the.
The extended period of time, because the rates the full box of just under 80 per cent for Q3.
Although the total it was also imparts it fights the twice a day sprays hubs and started to recover and <unk> and the mid to high 80 per cent levels.
The record 2020 other can season was in many respects a perfect storm, leaving and this week, we just don't and supply is closing domestic price is despite all the.
The leading to an outgoing of the ethylene arbitrage the Asia.
Finally, the jobs since recovered as you and it's Ron Paul and pulled it was again for.
And the move.
Please note. The currently I'm pleased to report the we've been able to dramatically the juice the overdue true changes by completing a significant number of true beliefs.
Currently we have less than 50 see fit US do you have what would you leave and we continue to work hard to read just the bought log whenever and wherever possible.
We are working for lots of the with the flock stays and classification societies, and we resolved the many practical inspection and dry dock and challenges of being caused by this fund and that.
And Morgan's point and joint venture that total continues to exceed our expectations and has had an impressive quarter both in terms of profitability and through the.
We have not exposed to just over 300000 tons from the terminal.
The total complex is working extremely well I'm impressed by the working interest that the quality and the performance of the installation.
As you can see from the for jobs and the supplemental information the pot construction of the ethylene tank is progressing safely on budget and on time, well the commissioning and startup scheduled for December of this year.
We expect the force that tends to build it into the tank and mid December.
Which will be a key milestone and and officials staff from Germany, So nameplate capacity of 1 million tons.
Well, what we see on the filling in spite of all 10 of the what we've seen and then put capacity with these and the future.
Well the Q3 knowledge of his team that's the but I'll be very busy progressing our refinancing and this is.
The long and show the as well the company and that has a much improved balance sheet and has significantly boosted the liquidity till the end to $120 million.
Well the clear loan exposure you wouldn't wait till March 2022, almost no maturities over the next 17 months.
Now in his prepared remarks will provide much more color on the recent before and I think success.
Just the husband, our next quarter for the business was considerably.
And most of the whether the lifted headwinds which of and possibly the overall utilization rates some of which links the well into October.
This has been more than offset but I'll tell you the ethylene JV tailwinds, we're still going for the someone off gains Hudson should the Q3 continued and the same thing and as Q2 and remain profitable.
Our ethylene terminal the diversification strategy is no demonstrably starting to pay dividends out of the stable cash flows from this infrastructure and investment with the take or pay called the trucks stuck to our bottom line.
And the total of silicon image on the volumes and prompted the stable cash the book grew for the and help offset volatility and of shipping business.
Finally, we're not coming out of the holiday season, and utilization rates have started to improve.
As the Handysize Newbuilds, that's low the book is the historical lows and with the eminent Ron Paul of simple you North American export facilities and late Twentytwenty on the force off of Twentytwenty, one, including all Morgan's point after the JV the reported terrible on the Prince Rupert facility.
The leap these factors will help from vessel utilization rates.
That's the coupled with an improving ethylene arbitrage and increasing demand for each day, and then LPG and China will help boost exports and should all things being equal the good news for the home the size segment and for navigator gas.
Well the pole position to capitalize and these opportunities with the upon the joint venture for our Luna appeal, all the existing fleet and our strong balance sheet.
Well at least the <unk>, so I'd like to onto of hotel CFO Niall Nolan Niall.
Thanks, Hi, and good morning all.
That's all you mentioned the company generated profits of $1.5 million for the third quarter for the second consecutive quarterly profit and this compares to a core to the loss of $2.9 million for the third quarter of last year.
EBITDA for the third quarter was toward the wouldn't play $9 million with $4.4 million being generated from the operations of the terminal and 27 of the Hoffman and dollars from the shipping segment.
Total operating revenue from the vessels was $81.4 million for the quarter, an increase of $5.7 million from the $75.6 million Jade generated during the third quarter of last year.
Net revenue for the third quarter of both years was the same at $62.2 million, how other with some differences.
First revenue increased by $4.1 million between the two compared to the quarters as the result of an increase in average charter rates, which rose to just under $700000 per month or $22892 per day from just over six out of $50000 per month for $21466 per day.
For the third quarter of 2019.
Average charter rates across the nine months of this year average 21007 hubs and $33 per day and increased despite the Nick and the negative impacts of coal the 19 from the $21000 and day achieved during the equivalent of nine months of last year.
However, as although charter rates continued to see some upward movement of utilization was a challenge the joining the third quarter, reducing to 78.8% from 90 from 84.6% and sort of the hardcourt for the last year, primarily as a result of the effects of Hurricanes, Lora and Delta and always and <unk> research.
Later.
This reduction and utilization had a $4.5 million and negative impact on revenue.
However, notwithstanding this reduction utilization over the nine months of Twentytwenty remained higher at 85.4% and the equivalent period in 2019.
The living up to the earnings which are like gadgets and the allocated to pull the participants in the cards with pool points resulted and the other.
Participants vessels contributing $1.2 million to our vessels and the Luna pools during the quarter.
Revenue also reduced by point at $900000.
Due to an increased number of days of the vessels were indicted drydocked during the quarter.
Five vessels complete and dry docking taking the total of 112 days for investors would of been on the available for charter relative to 64 days Drydocking days during the third quarter of last year. This.
This increase in dry dock activity was a consequence of dry docks being delayed or the and the year as a result of coal the 19.
[noise] seven dry dockings and total of being undertaken during the nine months of Twentytwenty and the total cost of $8 million and three vessels remain to be drydocked during the fourth quarter and expected cost of approximately $4 million.
That's an operating expenses were $27.2 million for the third quarter or 7786.
Dollars per vessel per day, and an increase of 1.5 per cent from the $26.8 million or $7672 per day and card and the compared to third quarter of 2019.
General and administrative costs increased by $1.9 million for the three months ended September 2020, and 2.9 million year to date. This.
This year to date increase related to wouldn't million dollars and foreign exchange losses, and not on the revaluation of in Indonesia, and rupee of bank account, which should not be repeated and may reverse.
It wouldn't million dollar increase for audits and related fees and $600000 for additional top up insurance is for the marine export terminal.
The other income.
Of $200000 and the income statement relates to the managements management fees received for the management of the live in the pool.
Interest costs for the third quarter of reduced by $2.6 million or 21% to $9.8 million, primarily as a result of reductions and U.S. LIBOR, which has now fallen since September 2019 by 180 basis points on our approximate 760 million.
And dollars of variable interest rate debt.
The share of the result of equity accounts and joint venture I.E. The terminal generated a profit of $3.1 million for the third quarter.
Our first quarterly profit following the long term and.
So for the Cleveland, becoming effective on June and the first 2020.
Net income for the third quarter was there for $1.5 million or three cents per share compared to a loss for the third quarter of 2019 of $2.9 million or a loss per share of five cents.
During the most recent quarter, we entered into an agreement to amend the terms of the credit facility to allow a narrow the true up of $34 million.
The amount was drawn down on the October the eight.
We also concluded the refinancing of one of our vessel the loan revolving credit facilities on September 20 for which provides additional available cash of approximately talking $30 million 25 million of which remains on the drill.
At September 30 of the.
The the cash stood at $61 million and this together with the type of $4 million from the time of the facility and the $25 million currently undrawn on the vessel Rcs provides available liquidity of $120 million.
We are the further $6.1 million as the restricted cash and supporting the cross current cartons the interest rate swap relating to the non our Norwegian kroner of buttons, although since the quarter end and that's the result of further strengthening of the Norwegian kroner versus the U.S. dollar this restricted cash has reduced to $3 million.
As of yesterday.
Joining the call the quarter, we also refinanced our $100 million and secure Norwegian bond with the new five year like for like Bond This bond, which matures and 2025, the trucks and interest rate of eight per cent per annum.
Importantly, as Hari referred to the company does now and not have any debt facilities maturing until April 2022.
And finally with respect to the construction of the entity and tell me. The we've we have contributed to the Florida $7.5 million during the third quarter and.
The an additional $2 million since the quarter and both fully funded by drawdowns from the terminal facility.
Following these drawdowns along with the initial true up of $34 million. The aggregate. The Mt. Now drawn under that facility is $51 million out of the total available Mount of $69 million the remaining $18 million.
Well the and.
The funds the remaining capital commitments of only $4 million on the terminal where the final true of of the bugs and $14 million to be released for general corporate purposes prior to the year and.
And the that I'd like to hand, you over to wasn't.
Thank you and I.
And as Harry mentioned.
Initially we run the role during the summer months.
Wrapping up the ethylene export terminal with record breaking export volumes of competitively produced U.S. separately.
The utilization levels for in excess of 90% and our especially night's sleep and neighborhood Asian post <unk> phase one of the mom to flourish ethylene that's where the propylene.
Propylene <unk> acquired for the production of personal protection equipment, such as the face masks.
Once the vessels complete the discharge operations and Asian ports to cap and has had standing orders. The double back you go to pick up the Nick ex.
For parcels.
And it's supposed to all happening when the U.S. GAAP petrochemical industry took pretty cautious and you're not the usurpation of hurricane and Laura land for.
For the Middle of August one quarter for 25 per cent of the entire U.S. ethylene production for a shot.
And preparation for Laura landfill.
The hurricane didn't make the.
<unk> for the rights and the mid loved the asked the man.
Heavy Lake Charles area.
Lucky and minimal the physical damage occurred up the petrochemical industrial parks I remember the shutdowns for a prolonged due to the slow repairs of the local like electricity grid and continuing scare for.
Additionally, the hurricanes only after hurricane and beat the made landfall in October and then.
Exactly the same location of Lora did did we see a meaningful restart of the crackers and subsequent production.
In fact, if you will its extraordinary for the U.S. GAAP for a record of 12 and named storms and Hurricanes, making landfall in the area.
Therefore from me the August through October U.S. domestic ethylene prices rose as it relates to no excess production the available.
It went from its lowest level of nine cents per pound and the summer, reaching a Bob turkeys and per pound during the hurricane period.
Exports through the terminal reduce.
Directly impacted directs the lids sleep the.
The the kind of been balancing back the U.S. calls for Italy and prospects as of today the fate idle time for.
Well look for alternative employment opportunities for it.
The and the same me for surely refrigerated segment.
I remember the ethylene fundamentally the sort of reverting back to where they should be.
U.S. production is up and ethylene price thing is trending downward.
This week, we had ethylene quote the 18 cents per pound and Asian demand is still holding strong.
For its something and possible arbitrage of more than $400 of ton today, which is widening by the day.
Consequently.
It's been a noticeable uptick in activity and <unk> and discussions for November and particularly the December.
On bulk freight and terminal throughput.
Our utilization has recently improved from the low dose of the hurricane season, Walgreen today, and the mid to high 80 per cent level.
You as natural gas and liquids production remained strong.
We're just post the ensuring competitively price feedstock for the U.S. and laying producers.
Dogs, the bodes well for continuing ethane exports that's the way.
And a lot of LPG exports it underpins their prospects.
And volumes going through the terminal once the tank is operational.
The annual nameplate capacity of 1 million metric tons of ethylene.
And he is about 80000 tons per month.
Offering and the seasonality if we assume that the majority of these molecules will had transpacific to cater for Asian demand then.
And this translates to about 60 and Handysize vessels and.
That is a huge difference compared to divest the demand from the terminal during the low dose of the hurricane season, which were at the two for vessels.
The quoted market rates for Handysize.
Ships have been moving sideways since may.
Including through the reasons hurricane volatility out about $20000 a day.
Recent developments I think the market pundits will find sufficient evidence of <unk>.
Tightening supply demand balance you know the segment and.
Setting the direction for the market quotes into 2021.
The LPG markets remain caused the particularly in an environment for stronger oil appetite going forward and the.
This enables gas the play out the its rightful role of viable substitutes for oil products with the added bonus of reducing greenhouse gas emissions with that I will hand, you back to the operator.
We would be ready to open the conference to questions and answers. Please.
Thank you ladies and gents.
And.
<unk>.
Hi.
And your kind of.
Right.
<unk>.
Ask the question.
First question comes from.
Okay.
<unk>.
Hey, guys. Good afternoon, good morning.
Yeah I just wanted to talk about the terminal you know obviously it turned a profit the officially this quarter, which gives you a nice visible stream and can be counted on while the trading fleet can be a bit more volatile as we just saw this quarter yeah.
Yeah, you mentioned in the release of that the hurricane or the hurricane impact the shipping business and the Gulf Coast and but you also mentioned that affected the terminal and are able to quantify what kind of impact of that is so instead of the fourth quarter.
I think yeah.
During.
The current good Omar the the issue with the these hurricanes, it's true that the production capacity of shopping.
Good for a long time before a return of returning back to normal.
So the impact of the month of being kind of second of all good September or October we've seen stronger true, but in November and the.
We expect that to be backup and to expectations for December So December probably looking at similar levels of.
Free so and the.
In June and July.
Okay, and and if we just think of it and in terms of numbers in and the third quarter.
Got 4.4 million of EBITDA of $3.1 million of earnings is that the Putable you think the with what we've seen so far and for the fourth quarter.
I think I think it may be a given what we've seen in October.
And the the early part of November it up and might be and is slightly on the high side, but not not significantly so.
Okay, and then and just generally how do the you know the the terminal contracts work when it comes to like these types of the then storms hurricanes are they take or pay and hell or high water type contracts.
Yes the out.
Okay, Great and then just sort of one one the one other follow up I just wanted to ask you know its been about six to eight months since you guys form the the Luna pool and just wondering if you can give the an update on and how that's working and and also with the disruptions that we saw and the third quarter it had been up.
Well actually you know prove beneficial as you kind of works to try to figure out other employment opportunities for each of those ships Dallas thing into the a and to the Gulf.
Thank you.
Yeah, so the Liverpool.
As we just discussed last call as well you sort of.
The operation on the commenced the course of April and today all of the 14 ships are.
In the pool and the.
Forming accordingly.
So it's a the Luna pool consists of ethylene ships.
Cash nights chips and of course the pools for.
And in order to better serve its the equity and customers and of course also the U.S. calls ethylene exports, including from target of terminal and our own charts and she terminal.
So of course.
When they're less ethylene to be exported from there.
Really impact the pool, but the whole concept of the pool is collaboration and sharing of earnings so the.
Therefore.
And <unk> through the pool, we were during this time more likely well we were more likely to have the.
Right assets and.
At the right location for out of the current so if we only had our own ships.
And let's say, we navigator pilot <unk> and <unk>.
Most of them back the U.S. cold, we didnt have and now other ships and you know available and for other opportunities, but through the pool those chances are available to us.
Yep, great well, thanks for that color wave and and the and textile.
Well.
Your next question comes from sales.
[noise], Hey, guys and actually I wanted to maybe think their follow up on Omars last question, there and in some ways was the Luna pull a little bit.
[noise] ER or did it through.
<unk> down utilization across the fleet, a little bit because you know obviously, the luna pools carrying ethylene specifically and so your house out of it.
Vessels dedicated to that whereas maybe in the past.
Yeah, the and ethylene cargo isn't available and you can just take propane or something else and so as a function of you know dedicated.
The part of commitments.
Did you maybe for go.
Business that might have kept utilization otherwise the little bit higher.
I don't think so and it's it's the.
The complex question with the 14 ships.
For the league the.
<unk> mission is to trade with at the pain and also at the lead.
The whatever the pool of assets in place or not.
And you are facing this volatility of that the hurricanes cost less ex <unk> and that's one particular cargo grade.
Well with the true or not we.
We would be chasing of your opportunities and working very hard to find alternatives.
The point with the pool.
And is that.
We have a more global footprint. Therefore, the chances are more the is more likely that you can find other alternatives. So I wouldn't say that the pool has been detrimental in utilization for navigator. During this time.
I think of it I've been more and more or less the same probably.
Little bit vs Rehabbing of.
Okay.
Hi.
And that's something to that event and that [noise].
When you have been doing at the lean and intend to do at the lean and you're sitting around.
And you don't want to take a cargo of propane and butane or whatever else because when you get back to the ethylene you have to stop clean and refrigerate.
And that's the process it takes time and money.
Don't and the case, where you are temporarily down the such as the caused by the Hurricanes.
Our choices and just sit there and wait and tell that clears and the ethylene becomes available because it's just too expensive and time consuming the take a spot cargo of propane and.
Do that cargo and then come back to do the ethylene much more expensive so that causes and extra delayed and if you're following me.
Yeah sure. So you you probably would not have picked up a car.
Cargo.
One way or the other you know irrespective of likely medical yeah. The got went up and unlikely to do it and as long as you can see.
GAAP I anticipate that you'll be back doing the ethylene very quickly and that's what we did because they had the right. The shutdowns were believed to be temporary day extended longer than we expected because of the electricity was down the longer than people had expected.
Right right.
Yes, there are and their release, you mentioned and new multiyear contracts are on and that's why I believe that the Chinese counterparty and any color that you might be able to provide there with respect to.
Right at all.
This was in our Q2 actually announcement I think though for the then where it's a three year contract at a player doesn't mids 30000 dollar rate.
Per day.
Got you okay. So it wasn't incremental to the teacher, Okay. That's helpful.
And then lastly for me.
And it's a little bit more strategic I guess and David or Harry the the.
As you look at the company.
And you've made a lot of progress taking delivery of a lot of ships obviously of the the.
The terminal the has has come along nicely, but yet.
You know this the share price has languished at levels of below the sort of.
Where are you traded initially after the IPO for some time here.
Is there any how has this changed your strategic thinking about the.
The the place of the company is it do you or does it of course, you more towards you know, maybe thinking about consolidation or or anything else that you know given the progress and yet the lack of share price performance.
Is your and your thinking.
Began to change at all and about the long term view the business.
Hi, David.
Moving to go for us.
Okay and on the contrary.
If you think about and in the last couple of years, what navigator has gone through from sanctions to tariffs.
To the and Corona virus shut down globally shut down negative pricing of oil and then a back to back Hurricanes.
Right down the main stream of where the petrochemical complex is located.
And yet we're generating profit.
What it has done is put a kind of of fog over the future.
The fog being simply.
The more difficult time period in which to focus on where we are.
Interest paid it going.
Now I think of great.
ER event occurred this week with the Pfizer the vaccine and now we know a vaccine can be whether it's the five for one or another one of them.
LT and clarifies some of that fog and takes it the way people can now begin the plan.
And what I see.
Is what I've always believed that America will begin.
Ex celebrated export of not just the of raw materials, the propane and ER and.
And the Butanes, but we will be.
Exporting.
More and more of the intermediate chemicals, the olefins, the propylene and the.
At the liens.
And the infrastructure required for that it's still in its infancy.
I mean, our little terminal, it's not little it's just you know a world class of terminal, but it is the beginning I see far more of that type of infrastructure required.
More infrastructure required on the receiving and.
And more companies willing to start producing.
These olefins for export not for domestic use but.
Hey living down shrinking down the GAAP capital requirement and focusing on building the infrastructure such as an ethylene crackers simply for export propylene crack.
Crack is for export I mean enterprise is doing that now with.
The second propylene.
The facility being built.
In Texas solely for export.
So no I I you know look everyone is taking a step back because of all of these converge and factors that were run for say, a Boe of black Swans, coming so calm and that they and no longer blacks on the common day event, but I think we've gotten through.
The conviction of where.
The U.S. petrochemical industry is going is clear and now than it ever has been exports of going to be key domestic production and the requirement for international infrastructure.
We couldn't be in a sweet spot I don't believe and.
And I think we will continue to build that out.
We've had some setbacks, but they were unforeseen.
And the unforeseeable, but no I I think with fully convinced that we've got the right kind of Oh the station.
And yes, we're disappointed and the interest and the the stock price, but I.
I think we're not alone and I think these things do pass or perhaps the you know were entering into a new phase where focus maybe on value stocks such as the navigator versus the growth of stock, but I think if I looked at and we are a combination of.
About the.
Of solid.
Growth the opportunities as well as great value. So I I don't think we've changed at all I think we are committed and where I'm I am as excited as ever.
But disappointed on these things that we couldn't see.
Barry do you have any comments from from that.
Well, thanks, David the Yeah, I think you called the very well off the I think and as far as the is on track and that's starting to the level as you can see from the terminal and you know and the next day, when we get that tank and speaking of what should be doubling the capacity through that channel.
And we also is the place the navigator and to bring together suppliers of athletes and consumers of ethylene and supply them with the product and the United States to whatever the requirement selling of started two years is starting to play and we're excited about it and I think those and other ways and we can develop the sponsorship and going forward.
No no we're all for safety the votes for price the that's life and then so.
Uh huh.
Yeah, Okay, all right that's the I appreciate the color. Thanks.
Thank you and your next question comes from Sean.
The.
Hey, David So I think one of the the things you said and your response just now the two years kind of yourself as a value.
But also a growth company and and you look at the sort of Capex and cash requirements and the screen three vessels and the dry docking and and and probably I think you said only 4 million of additional capital is to be paid for the the existing terminal and and mortgage point, but.
But then there was also a lot of work done to refinance the the credit facilities and work and of the debt capital markets and thinking about 120 million of availability now so and that's that's not quite one full terminal contribution, but and it's close so is there a reason and sort of in light of this idea of of growth that that you.
Maybe the capital available or is it just kind of going back to what you said about black swans, and and being prepared for rainy days.
Well, what cash to be for pay for the rainy days I mean, we've been just hit so so frequently and that a lot of these black Swan the south.
Some of the place.
No no.
Look no balance sheet.
The strength and building up is obviously key.
And yet being for pad to have additional capital for the potential expansions.
Clearly if Steve I mean, the most of the is <unk> cash.
Capital requirement early on.
Well be.
To consider whether or not we need to expand that ethylene channel you know if things go as we anticipate and continue volumes ramp up of we'll need more money for that.
The standard that's pretty obvious for anyone who looks at the situation right and I don't think.
For the built this thing for a million times I think there's a lot of capacity.
Ah if that happens, obviously, we need and well vessels or the the wouldn't be enough vessels to accommodate the expansion of that.
Whether or not we need to put capital involved in two of the international expansion and gamut of it's a logical thing that we would be doing.
So.
I don't know if this and says let's do we have enough of that no probably not a we would hope that as these things unfold and the visibility hopefully this begins the the period of visibility of the earnings.
And I share price would expense like you know respond we would see the kind of appreciation that one would expect with the growth and value orientation, and they will be able to fund and and keep pace with what we think is probably the most promising period.
Oh for growth and profitability.
I mean, I talked a lot, but I did I say enough I don't know Uh huh.
Yeah, I mean, I I think that some of the take away. There is there's there's plenty of room for expansion of the existing facility and and I was kind of maybe had thing it and you know another footprint, but maybe maybe that's kind of further down the road so.
And the mine for my last question I'd. Just also you said that there was some disruption in terms of utilization in October and we were given the kind of a current rate of you know a mid to high eightys utilization so the.
For a month and a half and there's there's you know we have of 50% of this quarter on the book. So what does it look like right now in terms of the blended utilization for the the.
The second the first half of November and and October.
Yeah.
Yeah October.
Was the.
Yeah and was higher than the the.
The third quarter, but could we see the trend going no.
Through November and also into December.
So where did the used up today is the mid Eightys high eightys per cent level.
But the the average at the end of the quarter will be that I certainly hope so.
But that's the direction of true.
Okay, all right. Thanks, a lot.
Sure and and Saudi and just the comeback and your previous question and.
But the opportunities we've got a lot of opportunities and the business both the as the as David said you know typically the best the bottleneck of the free de bottleneck, we spread the assets and we're pretty confident we can at least get 10 per Stan I, just the capacity of our current footprint print.
And at Morgan's point and then the next best one is if you you know the expanded and existing facility because the cost of.
Per ton of and spoke capacities from off of the images and that's a good opportunity for equally and this market place with the low share price stays and on the low profitabilities and there's a lot of opportunities out there as well and the tradition of shipping Malta and so we're looking to all of those options and assessing them.
But there's nothing eminent and the pipeline today.
Okay, all right. Thanks.
Thanks, a lot thanks.
And your final question comes from Jefferies.
Jefferies go ahead.
[noise] Oh, the gentleman has gone.
The Hi, Hey, I guess two questions from me first any updates on Repauno or Pembina, those and then kind of and the pipeline for quite some time here. So the saying it for you have any news on those.
Yes, the Pembina and right.
And they and long.
And your old to commence operations.
And back end of first quarter, maybe April next year, So no change there and no change in the volume artist specifications and I.
Requiring then for up to five or six depending on the destination of stuff the Canadian volume.
The incremental demand of Handysize ships. So so that is going as far as we are aware of.
Looking for can be and then looking what they publish publicly so that's that's long.
On schedule Repauno and the East coast in New Jersey.
They have the right.
And they have completed the terminal they are starting to fill it up NAV of Cameron, there, but LPG and they intend to trade domestically and the initial phase.
And learn to walk before day run I suppose and they have publicly stated that they intend to start exporting which is obviously, we're interested in and really impact our business from the same timeframe as pembina. So.
I think who come back end of first quarter next year, and if you have pembina Repauno Polk, starting you will have a big kicker in there and segment.
Got it.
All right and then I guess for one more quick modeling question in terms of interest expense you know that continues to fall here in the last three or four quarters. So is this kind of current number of the 9.8 or so a fair run rate or what should we use for the fourth quarter and same for DNA in the that.
It is certainly bounced around this year, whereas that kind of shake out this quarter and then maybe a run rate for 21.
Yeah, so the and the interest charge should should be something similar to Q3, there's been a slight for the reduction in interest rates from.
From Q3 to Q4, but then the increased debt.
On the terminal that we mentioned so does the as part of interest on that so wouldn't wouldn't be the generally offset the other day, so it should be there or thereabouts.
Okay.
G and a I've mentioned the various component parts of the Indonesian rupiah of million dollars should probably but certainly.
And it is unlikely to the Pete itself as of today. It has abated somewhat so there should be some somewhat some other were adoption and not the terminal.
In addition, the insurance will remain as is and the audit and related fees will be something.
The the be repeated to some extent, but not not that for the amount that was partly a catch up.
Got it all right well that covers the thanks so much.
Thanks Randy.
And we now have no for the question.
Well. Thank you for joining us this morning, and we welcome you back and a few months time. Thank you.
Thank you that does conclude today's presentation. Thank you all for joining you may now.
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