Q4 2020 Teekay Tankers Ltd Earnings Call
Okay.
Please standby.
Good day, everyone and welcome to Teekay tankers, Limited's fourth quarter and fiscal 'twenty 'twenty One earnings results conference call. During the call today, all participants will be in a listen only mode. Afterwards, you will be invited to participate in a question and answer session at that time, if you have a question.
<unk> will be asked to press star one to register for a question for assistance during the call. Please press star zero on your touched on the phone.
As a reminder of this call is being recorded and now for opening remarks, and introductions I would like to turn the call over to the company. Please go ahead.
Before we begin I'd like to direct all participants to our website at www dot the teekay tankers dot com, where you'll find the copy of the fourth quarter and annual 2020 of your earnings presentation, Kevin Hester for a review this presentation. During today's conference call. Please allow me to remind you that our discussion today contains forward looking statements actual results.
<unk> may differ materially from the results projected by those forward looking statements.
Information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the fourth quarter and annual 2020 earnings release and earnings presentation available on our website I'll now turn the call over to Kevin Mackay, Teekay tankers, president and CEO to begin.
Yeah.
Thank you Ryan Hello, everyone. Thank you very much for joining us today for Teekay tankers fourth quarter.
2020 earnings conference call and I Hope you and your families are all safe and healthy.
Joining me on the call today, Australia and drive any Teekay tankers, CFO and Christian Waldegrave director of research for Teekay tankers.
Moving to our recent highlights on slide three of the presentation.
Hey, tankers reported total adjusted net loss of approximately $41 million of $1 21 per share during the fourth quarter the decrease of nearly $44 million.
For $1 30 per share from the third quarter of this year.
Please note that our fourth quarter on adjusted net loss includes a nonrecurring tax adjustments related to prior quarters with the $8 4 million or 25 per share.
This adjustment was excluded our Q4 adjusted net loss would have been $32 3 million or <unk> 96 per share.
Despite our weaker results this quarter, we had one of our best years ever in 2020 during what has been an unprecedented and challenging year.
The reported 2020 adjusted net income of approximately $153 million of $4 54 per share, which is an increase of $89 million for $2 63 per share from 2019.
We also reported record free cash flows of $277 million in 2020, an increase of nearly $100 million or 56% compared to 2019.
These cash flows along with asset sales drove the net debt reduction of $419 million of 45% during 2000 $20 million to $510 million.
End of the year.
Our net debt to total capitalization also declined to 32% at the end of the year compared to 48% a year ago, and our liquidity position increased to $373 million as of year end.
Our focus on debt reduction has truly transformed our balance sheet built a resilient financial position.
In addition, we continued to decrease our cost of capital.
Of the winding the sale leaseback financings.
Between 2017 in 2019.
We identified as a key strategic pillar for 2020.
Last quarter, we announced the repurchase of two of the vessels on sale leaseback for $30 million, which was completed in October.
In this quarter, we declared purchase options for two additional vessels on sale leasebacks, where total purchase price of $57 million, which you expected the re delivered into our fleet in may of 2021.
Lastly, we have been proactive with several commercial activities.
We've been successful in offsetting some of our exposure to the weaker freight market with several fixed rate charters that were locked in during periods of market strength.
As a result, 20% of fourth quarter days with fixed on average rate of $35700 per day, well above the prevented the spot market rates.
We've also been active on the fleet optimization, we entered into agreement to sell two unencumbered 2008 built aframax size for a combined price of $32 million.
This was an opportunistic sales.
Which further deleverage our balance sheet and increases our liquidity position.
Based on our forward positive forward view of the market. We also entered into a seven year in charter.
For the eco Aframax, new building at an attractive rate of $18700 per day, which we expect to deliver into a strong market in late 2022.
This in charter also provides us with both charter extension and purchase options and.
And the enables us to increase our scale and renew our fleet in the less capital intensive manner.
Turning to slide for you look at recent developments in spot tanker market.
We are currently in the midst of the severe downturn in the spot tanker rates due to the knock on effects of COVID-19 on both oil demand and supply.
This is shown by the chart on the right hand side of the slide illustrates the extent to which spot tanker rates have fallen since the first half of 2020.
We need lockdowns in many parts of the World Q2 of the second wave of COVID-19, and the emergence of new more transmissible variances of virus.
The lower oil demand during the fourth quarter of 2020 from as previously expected.
This is kind of global refinery throughput of persistently reduced levels.
For the same time, the OPEC plus group of oil producing countries have shown discipline and sticking to planned supply cuts in order to rebalance the market.
On the oil supply in the fourth quarter of 2020, averaging just $92 3 million barrels per day more than 8 million barrels per day below pre COVID-19 levels.
Finally, the amount of fleet capacity tied up in floating storage or idle due to port delays fell by around 13 million deadweight tonnes of 25% during the fourth quarter of last year, adding to available fleet supply.
The combination of slower oil demand growth limited cargo supply and an increase in fleet supply was negative for crude tanker spot rates during the quarter.
Although spot tanker rates fell during Q for TNK manage the parks and mitigate the impact of lower spot rates sort of its fixed rate time charters as shown by the chart on the left.
This is particularly true for our Suezmax fleet, where our fixed rate charters lifting.
Overall suezmax earnings to around $18200 per day versus started earnings of around $9300 per day.
Crude tanker spot rates have remained weak during the first quarter to date and the.
The market facing several headwinds in the near term.
Despite the start of vaccine programs in many countries. We expect the adverse impacts of COVID-19 to continue to dampen the oil demand for some time.
In the immediate term in addition to the OPEC plus group cuts already in place, Saudi Arabia has announced an additional on supply cut of 1 million barrels per day in both February and March of 2021.
Which will reduce cargo supply because of.
We have signaled the may return to the supply from April onwards.
Thirdly backward dated oil structure may lead to further inventory drawdowns and release more vessels from floating storage into the spot trading fleet, while higher oil prices has translated into higher bunker costs impacting spot tanker earnings.
Turning to slide five and give a summary of our earnings in the first quarter of 2021 to date.
Based on approximately 69% and 67% spot revenue days booked teekay.
Teekay tankers first quarter to date, Suezmax and Aframax bookings have averaged approximately 9600 and.
<unk> $7700 per day, respectively.
For our LR, two fleet, which are predominantly trading dirty.
Based on approximately 65% of spot revenue days booked first quarter to date bookings have averaged approximately $10000 per day.
As mentioned in my opening remarks, we locked in fixed rate charters during periods of market strength at attractive rates, which helps to offset the current spot market weakness.
The company's combined rates for the fixed on spot.
Fleets to date in Q1 are significantly higher than the current spot market rates.
Our Suezmax fleet of 75% of its Q1 revenue days booked and $18900 per day.
Our aframax fleet of 73% booked.
<unk> thousand $400 per day.
And our LR two fleet of 69% booked the 13th $200 per day for the first quarter of 2021.
Lastly, we have brought forward our scheduled dry dockings for 2021, and we expect to have our fleet fully available for the winter months, which coincides with an anticipated recovery in rates.
I will touch on in more detail on the next slide.
Further details of our fixed rate charters and our 2021.
Drydocking schedule can be found in the appendix of the presentation.
Turning to slide six and look at the longer term outlook for the tanker market on the.
The factors, which we believe will drive the recovery as we move through the coming months.
Global oil demand is expected to improve substantially during the second half of this year in tandem with the rollout of Corona virus vaccine programs as shown by the chart on the left of the slide.
In addition, we expect the.
Global oil inventories.
<unk> to more normalized levels during the course of the year with crude inventories expenses normalized earlier than the product inventories.
This process is already well underway as evidenced by an increasing backwardation in the oil futures curve and higher oil prices in recent weeks, both signs of of tightening oil market balance.
Although the global oil inventory data is somewhat opaque.
It is encouraging to see the U S crude oil inventories have moved back to the five year average for the first time of three years, while credo held in floating storage has been almost completely unwind.
As the oil market returns to balance and with oil prices finding support above $60 per barrel. We expect of the OPEC plus group will start to return supply from the market through the course of 2021 accelerating during the second half of the year.
As demand growth starts to gather pace.
As shown by the chart, we expense, we expect both oil supply and demand.
To approach the 100 million barrel per day, Mark by the end of the year and to return to pre COVID-19 levels in 2022.
The fleet supply side of the equation continues to look very favorably.
Although there have been a slight uptick of new building orders in recent months. The order book size remains small by historical standards on approximately 8% of the existing fleet size.
With newbuild prices starting to rise ongoing uncertainty of our vessel technology on the restricted financial landscape. We expect the overall level of new tanker orders to remain low.
More significantly we expect tanker scrapping to pick up in 2021 due to the combination of weaker freight rates higher scrap prices and increasing pressure from the regulatory compliance.
We therefore expect tanker fleet growth to remain low during both 2021 and 2022 as shown by the chart on the right slide.
In summary, the tanker market will continue to be challenged for the next few months due to the impact of COVID-19 on oil demand and ongoing OPEC plus supply of homes.
However, we believe the tanker demand will improve as we move through the second half of the year as vaccine programs gained momentum on the OPEC plus group return on oil supply to the market.
Low free growth will further help facilitate an improvement in the tanker market.
Particularly if we see an increase in tanker scrapping in the months of the head.
I will now turn the call over to Stewart to cover our key accomplishments in 2020.
Thanks, Kevin.
Turning to slide seven about one year ago. The world was set on the unprecedented course with the emergence of COVID-19, Fortunately Teekay tankers has thus far successfully navigated the logistical the regulatory challenges with minimal impact on our operations, while further solidifying the resilient financial position by delivering on our.
T J priorities.
Because of the efforts from our seafarers on shore staff, along with the strong tanker market in the first half of 2020, the company generated a record setting $277 million on free cash flows, which has helped transform our black on balance sheet.
During 2020 of our net debt has decreased by $419 million or 45% to $510 million and our net debt to cap is decreased from 48% to 32% the.
The company's liquidity position increased by $223 million to $373 million.
During 2020.
We also refinanced the majority of the company's debt this year and made significant progress on reducing our cost of capital.
We completed $600 million of refinancings for 35% or sorry for 35 vessels at attractive rates.
Of note debt maturities until 2023.
In addition, we have reduced our exposure to higher cost of debt by repurchasing two aframax vessels previously under sale leasebacks and recently declared purchase options for two suezmax vessels under sale leasebacks for a combined price of $57 million, which will redeliver in may 2021.
We expect to finance, the suezmax vessels with existing liquidity and potentially on new long term debt facility for.
Other detail on our debt maturity schedule is in the appendix to this presentation.
We were also able to opportunistically sell $86 million on assets in 2020, which further strengthened our balance sheet and we recently entered into an agreement to sell two additional vessels, which are unencumbered, bringing the total asset sales to $122 million since the beginning of 2020.
Lastly, as Kevin touched on earlier, we have been proactive by locking in fixed rate charters at attractive rates well above todays spot market levels 10 vessels, we're committed on fixed rate charters at an average rate of $38000 per day for periods ranging between six months and 24 months. This.
This has allowed us to partially mitigate the recent weak spot market conditions that means nearly 20% of our first half of 2021. The ship days are locked in at over $34000 per day significantly reducing the cash flow break breakeven of our spot fleet.
All of this has contributed to our balance sheet transformation, where we have built a resilient financial position, which provides us with the financial flexibility to face for the future with confidence with that I will turn the call over to Kevin for to conclude.
Thanks Stuart.
In closing I would like to say thank you once again this quarter all of our seafarers and shore based staff for the continued dedication to providing safe and uninterrupted service to our customers share.
The challenging in the historic year.
It's true beaten a collective effort that is embodied the teekay values of both teamwork and reliability.
As we hopefully move closer to a more normalized world in 2021.
Teekay, we will continue to focus everyday on the safety and wellbeing of our seafarers as we have done every day since our inception, nearly 50 years ago.
They are the backbone of our organization.
Integral part of our Teekay family.
In 2020 with challenge came opportunity on the outlined in detail, we seized the opportunity to execute on multiple fronts to transform our company.
As we sit here in early 2021, we still face headwinds in our immediate past.
The company. Therefore, we will continue prioritizing balance sheet strength and lowering our cost of capital.
Preserves our financial strength on flexibility, enabling us to continue building long term shareholder volume.
With that operator, we'll now turn the call over to take questions.
Okay.
Thank you again, ladies and gentlemen that of Star one if you would like to register to ask a question. We will take our first question from Jon Chappell from Evercore.
Thank you good morning, or good afternoon.
Stuart if I could start with you the.
On the sale and leaseback unwinding is obviously a very good use of your capital and you're doing it as you can.
You still of a fair amount of liquidity and a fair amount of leases.
I recall correctly you can't.
Just exercise of those it will there's a schedule as those roll off so could you just remind us on.
What the potential for exercising options to online does sell leasebacks look like through 2021 and 'twenty two.
Hi, John sure.
In early 2021, we actually have the opportunity to unwind six of those leases with half of total lease balance of about $132 million.
And.
And we're in a position to exercise.
<unk> on an additional four throughout the year. So pretty soon we'll have six coming up and then additional for we have we have options throughout the year.
And just to remind you we will be taking possession of two of the vessels, which are currently under lease in may of in May of this year.
So the majority of them are really exercisable during 2021.
And then $73 million of liquidity today.
The debt by the debt paid out of the next couple of years like $34 million.
And I'll, let someone else ask about the dividend.
Is it possible to really kind of elevate.
The pace of these unwinding of the sale on leasebacks, just given your liquidity situation and maybe more optimistic view on the market by the back half of this year.
Yes, it's certainly possible and we are looking at all of those sale leasebacks and trying to decide on on how many of those that we want to that we want to exercise as I've mentioned previously we have about half of the merit at higher rates closer to 9% and some of them are on more of the 6% range. So we would obviously have it.
Keener focus on the on the 9% leases.
So we are looking at those and considering exercising them just balancing that off with the current weakness on the tanker market and trying to decide.
The side.
How much we should do there on how much liquidity, we would we would use to do that but definitely something we are strongly considering.
Okay, and then just final follow up for that one of them and then one for Kevin.
What's the total if you were to exercise all of the options that came due this year what would that total outlay day.
If we would exercise, but all of the option of an essentially they're all available to us.
Not including the ones that are delivering in may it would be a little bit over $300 million of including the ones that are delivering in may with the about $350 million.
Of course, we have opportunities to finance those on a variety of different ways. So.
We could take traditional debt or for other finance, but other financing out of the financings on those.
Great understood. Thank you and then Kevin just a quick one for you.
I was going to ask even before I saw the press release today with the sale of the two 2008 Aframax is the it seems like just given the current market conditions are still a little bit of an elevated asset price environment, especially of 15 to 20 year old assets trading well above the scrap value.
By my Count 10.
Of that were built between the three five.
What's your appetite to dispose of those more quickly both strategically but also to raise more funds to help Stuart.
The pay down some of those expenses sale on leasebacks for sure.
Yes.
So very good question.
We've.
We've always looked at our fleet.
On a portfolio of basis.
Part of that is.
Selling ships of the ramp time, it doesn't necessarily have to be older ships.
If you look at today's market for example.
The although the asset prices as you say for the older.
Sort of series of vessels is on hold.
<unk> theres, none of them a lot of inquiry of the moment relative to what we saw in some of the the back end of 2019 and early 2020.
When the inquiries quite strong in each of those take advantage of that when we sold the for older ships from the fleet.
Today of over the last couple of months. The inquiry has been more pronounced for the newer tonnage.
And just recently, we were approached with the 2008.
The track with price zone.
We decided to execute on those.
As an opportunistic sales of them I think.
We don't have a written formula of the ship has to be over 15 years old for us to sell it.
Likewise, it does mean that.
We will sell of our 15 year old ships a lot depends on what we can accomplish in the market.
What kind of capital, we're going to have the outlay ownership and where we think both asset prices and freight rates are going to go over the foreseeable future.
It's pretty much of moving target.
Got it alright, thank you Kevin and thanks, Jeff.
Thanks, Sean.
Thanks, Sean.
We will take our next question from Ken <unk> from Bank of America.
Hey, great good afternoon, Kevin and Stewart.
Just a great job on the refinancings through the year.
That's on on timing for the rebound you noted in 2021.
Are you seeing anything Bubbling, yet you mentioned.
To be bouncing along the Edward for on the spot but on.
I want to understand your outlook, which seem to be rising versus the comments on the rising order book and maybe your thoughts on when that becomes traveling I mean, obviously, it's the lowest levels in decades. So at what point do you start would you start to get more concerned that in terms of level of order.
Yes, Hi, Ken I think the.
As we look at the way.
The the market's playing out of it.
As we said in our prepared remarks, we are confident that.
The oil demand environment will rebound in 'twenty one.
The challenge is really the timing of everything.
So many elements that come into play that's the.
Down the line will impact the freight rates.
It's uncertain exactly on the timing of each of those elements, whether it's the demand itself, whether it's on the supply returning to the market.
On the refinery runs in margins.
Or the.
The winding down of a complete winding down of floating storage.
So we're we're confident about the future, but the actual timing.
We're still uncertain.
We're starting to hear more positive.
The commentary from the OPEC, plus about increasing supply, but were 8 million barrels a day below.
Pre COVID-19 run rate and.
Even if the increase.
In very near term.
We're not going as the 8 million barrels return on day, one so on.
Uncertainty is.
Around the timing of when on this comes together on when that finally results and increased time for transformation.
Transportation demand and the for freight rates.
Thank you.
We're taking each month as it comes.
But we are confident as we as we get closer towards 2022.
We'll be in a much better position as the tanker market than we are today.
In terms of the order book.
Right.
I think it's a 24 year low in terms of where the order book stands today relative to our overall tanker fleet. So we.
We still have room to absorb it.
Kris the ordering.
Okay.
We've been saying for several quarters now owners or in the quandary as to whether it's the order or not.
There's another question marks about new propulsion systems and the efficiency gains.
There is also a more restrictive financing environment.
Not to mention some of the regulatory uncertainty that we're facing so.
I think well he kind of absorb more ordering I think it will be muted relative to historic levels.
Some of them.
We've obviously got to keep an eye on day to day.
I can't speak to other rooms will do in the coming months.
What we've seen so far I think it bodes well for <unk>.
Fairly decent seat supply picture in 'twenty, one and certainly in 2022.
Thanks for that and then perhaps on the in charters.
The strategy up there.
Our loadings of vessels.
On the charter out bookings and charter, but not sort of fourth quarter of 'twenty two what drove the.
The thought process there.
On the timing of that just kind of whether you can quiet availability at the right price or what.
What was your thought on the except for the unchartered.
Yes, it's part of the the.
<unk> portfolio management on a spoke about earlier with Jon.
It's something where we're always looking at whether thats selling assets at the right time are adding and in this case it was an opportunity to.
We knew the begin.
Our fleet renewal.
With with very little capital commitment of no capital commitment.
On the on a vessel that would add to our.
On emissions averages of the fleet, which is something that we've got to consider as we go forward.
It was a good opportunity on a very good economic losses net at an extremely attractive long term rate.
Which we felt.
With executing on.
And just real quick for me to wrap up.
Can you remind us of the new breakeven point.
The fleet.
Even given some of the ships from the lower debt costs.
Our free cash flow breakeven for 2021 will be about $15000 per day on average between Aframax and Suezmax.
Great. Thanks, Scott for.
Perfect.
Okay.
Thanks, Ken.
And we'll take our next question from Randy given the <unk> from Jefferies.
The gentleman has it gone.
Good Thanks, Rodney Rodney Thanks, how are you.
Great great.
I guess the question on the asset values, they seem to be holding up pretty well, but can you kind of quantify just changes in asset values of the lag.
Three months or so the July call.
One thing that was on your presentation again, the time that your NAV calculation, which was in the low to mid <unk>. I think you said last time, so where does that look.
Now how do you do.
How would you view of your current net.
So maybe starting with your first question on asset values.
Over the last three three months over the last quarter, there had been relatively relatively stable.
And it really depends on on the age of the vessel, so maybe a little bit of increase on asset values on some of the more modern vessels and a little bit lower on on vessels of bit older.
The because of the sale and purchase activity in the market, but overall, we're probably talking about.
2% to 3% change, though so not really a lot of movement on that on that front.
In terms of our NAV.
Thank you.
Consequently, I don't think our NAV as of has changed much since the last quarterly call I would still say it's in the $2021 range is sort of the the house view on what our NAV is of course, everyone can take different views on on asset values.
And as you know at the point that you made I think on last quarter's call.
Obviously the share price trading at all.
The material discount to that.
Yes.
Alright, and then yeah.
He's done a great job, reducing your leverage ratio of paying down debt with that how low do you want to reduce your debt just trying to see how much capacity. You'll have later this year for acquisitions dividends and share repurchases.
Yes, so I'd say the.
Rates were seeing in the market right now of course, we're not really reducing debt levels at the moment.
With the with the soft tanker market.
When looking at our on our leverage levels. It really depends on our outlook for the market and on where we think we might be able to deploy capital and therefore future needs.
So at the moment I would say that we're comfortable with our with our overall debt levels and thats in the context of <unk>.
<unk> that we're in a place in the market, where there could be opportunities.
We entered the long term time charter, which is delivering in 2022, which was an opportunity. We will we're continuing to look at look at different options and in that respect.
So again I think we're comfortable with where we are but given the uncertainty in the market.
At the moment, we're going to continue to focus on maintaining our balance sheet strength.
And hopefully that puts us in a position where we can be both resilient and take advantage of opportunities.
Got it that's it for me thanks, so much.
And we have a question from Omar <unk> from Clarksons Plateau Securities.
Thank you.
Hi, Kevin on historic wanted to maybe just kind of touch on Randy's question towards the end.
You get the question a lot and obviously the renewal and expansion.
Clearly the charge of one was very <unk>.
Interesting and unique.
But in general how do you feel about deploying capital outright debt acquire ships, obviously, the deleveraging we've been selling vessels edge of been lowering the cost of capital, but what is the appetite now and as you mentioned the sale on purchase market maybe has picked up here recently.
When do you think the times to start thinking about sort of go up from here.
Sure.
Can you take that for the second because I would kind of true.
The question.
Okay.
Hi, Omar.
So maybe just first putting it in context, I guess my comments to Randy about wanting to maintain balance sheet strength.
And we also have as John was was enquiring about we have a number of leases coming up this year, which are.
Relatively expensive from a cost of capital standpoint that we would like to pay down but at the same time, we recognize.
The asset values have come down over the last year and given our forward view of the market and we think that it will strengthen into the second half on into 2022.
Theres probably is the right time to think about.
Asset purchases in terms of the cycle of the market. So we need to balance of those things off in terms of paying down our capital maintaining our balance sheet strength and then also thinking about how we can take advantage of opportunity. So.
So from on cycle standpoint, I think this is a sensible time to think about investment.
Again as you saw on our long term charter for a new building delivering in 2022, we took an opportunity to do that in a less capital intensive way.
So we'll continue to look for for deals that allow us to to add shareholder value.
Okay, and I guess sort of as I.
Here, you and or the REIT that does seem like maybe it is kind of the transition.
I recall many of the past 15 to 18 months its been really focus on selling ships on paying down debt.
It's like Okay expansion, maybe on the horizon now.
The want the Navy.
I think Omar.
If I could just.
To clarify that.
I wouldn't look at things.
And sort of an expansion I think like any tanker company of any shipping company.
As each year takes by our fleet gets older assume.
Currently have to look at how we manage the portfolio.
That might mean.
The the portfolio itself may shrink for a period of time.
Until we find the right opportunities too.
Juvenile and renew the fleet.
So it's not really we're not.
Looking to for expansion here.
Think of growth it's more around.
How can we rebalance our portfolio as we go into what we believe will be a stronger market.
Because at some point youre going to have the harvest once again as we did in 2020.
Harvest some of those older assets.
You may not want to put more capital towards.
Look at it more as a rejuvenation.
Just in the normal process of managing.
Tanker company.
Rather than the expansion.
Thanks, Kevin I appreciate that.
That's definitely fair makes sense of I guess, when you think about the at the Max charges on now for seven years on delivery.
I guess, maybe one how repeatable do you think that is and then true do you feel or is that more of a preferred method of.
Adding tonnage at the time.
Is that how you prefer to do it as opposed to buying ships.
Okay.
I think generally we will look at every opportunity.
The reason.
Particularly in the Formula that we wanted to follow.
We have to we have to remain agile.
Joe.
And essentially if you look at this is if you will on asset trade.
So when the opportunities present themselves when you can do and get the opportunities.
You will see us execute.
Is the one that we've done.
Repeatable I would love to repeat it.
A few more times, if we can find it.
The.
At the moment.
Of conversations with people.
Nothing nothing is firm at this point.
We haven't been able to repeat the one we.
You just reported.
Got it thank you.
Maybe just one more for the.
Seeing your guidance on the LR twos.
In the past of generally been a bit more in tandem with the Aframax is that obviously there is a separation and I recall, you mentioned last quarter shifting some of those vessels back from the data chosen to clean.
Where are you on that process can you give a perspective on on how many of the ships are not trading clean.
Yes, two out of the nine had been cleaned up and are fully fully trading in the cleaning space.
As we as we of vessels coming in Q end of Q on Q2.
Going into dry dock, we may look the transitioning some of the rooms as well into the clean trade.
But again the east of that market is is in the same sort of doldrums as of the crude market.
And our two rates on a round trip basis.
On worth expanding any extra additional money to clean up of vessels to get into it. So.
That's more of a.
If you win a week to week kind of view on where we think the market is going to go.
Yes.
Thanks, Kevin and thanks to it that's it for me.
Thank you thanks Omar.
And there are no further questions in the queue at this time I would like to turn the conference back over to the company for any closing remarks.
Just wanted to say thank you for everybody for joining US today, we hope you all of the families remain safe and we look forward to speaking the next quarter.
Once again, ladies and gentlemen that concludes today's conference. We appreciate your participation today.
Okay.
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