Q4 2020 Navigator Holdings Ltd Earnings Call
Welcome to our conference call. Please continue to stand by your conference will begin shortly.
[music].
Thank you for standing by and ladies and gentlemen, and welcome to the Navigator Holdings conference call on the fourth quarter and year end 2020 financial results, we have with US Mr. David Butters Executive Chairman, Mr. Harry Deans, Chief Executive Officer, Mr. Nail Nolan Chief Financial Officer.
And Mr event, Linda Chen and Chief commercial officer.
At this time all participants are in a listen only mode. There will be of presentation, followed by a question answer session at which time if you wish to ask a question. Please press star and one on your telephone keypad and wait for the automated message, stating your line is open and.
And I must advise you that this conference is being recorded today and now of pass the floor to one of your speakers. Mr. Butters. Please go ahead Sir.
And thank you and good morning, everyone and welcome to the Navigator <unk> fourth quarter earnings Conference call.
Now as we conduct today's conference call, we will be making various forward looking statements and these statements include but are not limited to future expectations plans and prospects from both the financial and operational perspective.
These forward looking statements of based on net.
Management's assumptions forecasts and expectations and some of today's date.
And are of such subject to material risks and uncertainties.
Actual results may differ significantly from my forward looking information financial forecasts and additional information about these factors and assumptions are included in our annual and quarterly reports filed with the Securities and Exchange Commission.
Today's call will include comments from Harry Deans, our CEO, Niall Nolan, our Chief financial Officer, and OIBDA and Lindemann Chief operational officer.
The commercial office and so Harry why don't you take the call from here.
Oh, Thanks, David So good morning to everybody on the call I hope, you're all well and keeping safe.
It's hard to believe the snow well over a year since we entered the first of all starting with most of US thinking of losses for maybe three or four weeks of most of the only way Oh.
And I will note in the second the third wave of infection of LIBOR.
The variance of unfortunately, the best Thankfully.
The science and modern medicine of six cities and rapidly developing effect of vaccines to combat this disease.
Oh, the vaccines and kind of thing of note being approved and have been.
Rolled out worldwide.
Albeit the vaccine program.
Are inconsistent and paci best across the nations and geography.
Although if at all the the business environment starts to improve and the second half of 'twenty 'twenty and just clear that the global business activity continues to be impacted by COVID-19 played out on the new strains we expect the silver behind the two domain until box of nation levels rise significantly.
Yeah.
But at the Q3 call. We said that we were once again and blending of the business remotely from our home offices worldwide.
And that's why we expected that this would be the case well into Q1, 2021 if not beyond.
We now expect that the last well into Q2 of the shear.
U S LPG production and exports have been remarkably resilient throughout the pandemic and there was no sign of about changing and in Q4.
The China continues into 2021.
January and into the mid February when the southern freeze or storm jewelry, what's northern and seasonally cold weather to the U S Gulf Coast.
The once the storm caused the huge amount of disruption to your upstream midstream refinery and soccer production across the region with the majority of capacity shifting volume.
But all of the estimates we think of the height of the cold snap and almost 100% of Texas ethylene capacity and approaching 80% of all U S olefins capacity, let's take it offline.
I'm pleased to speak we have seen a sharp bounce back and production with the vast majority of operations already restarted or and the process of being ramped up.
I'm pleased to report that the best and this was again profitable in Q4 for the quarter and succession of pro.
And the spreads back after the impact on Q3 of the Gulf predictions with the net income of $3 4 million on an adjusted EBITDA of 32 of millions of all of those.
Both of which sort of an improvement from the same period last year.
The costly and yesterday operating revenue net income and EBITDA of all of the improved substantially when compared to 2000 the 19th.
Our Morgan's point ethylene joint venture the terminal with the fourth quarter EBITDA of $2 $1 million was again profitable for the quarter and indeed finished.
Finished and profit for the whole year.
Utilization rates, but it's 2020 as they've begun strongly with a sharp recovery and the quarter and once a month increase the chi.
For the utilization was much stronger at 91 per se and what does that but utilization that numbers last seen in January of 'twenty, 'twenty overwrite and 95%.
Try and be 2021 continue with the old you had last all.
Unfortunately, the the company and utilization rates fault zone, when the southern freeze hits.
And the vast majority of U S traffic the paucity books, the old P. D. H production of severely impacting most fractionation capacity and the golf.
The storms together with the night Belvieu pipeline and subsequent ethylene joint venture of Tableau Force of MS. Yours of course major supply interruptions.
Rocket vessel rescheduling and repositioning and enables us to find alternative employment for the majority of the rest of the vessels.
Nevertheless.
<unk> and rates of debt to run the day mid 80% level and so I agree I don't expect it to stay at those levels for the remainder of Q1.
I was just typical the U S Gulf trucks of the issues dramatically reduced the village.
Olefin and supplies cost and domestic prices spiking.
And leading to the slamming shut of the healthy ethylene arbitrage to Asia.
Despite the split nothing has fundamentally changed.
The plentiful supplies of the most advanced stage thoughts and feedstock and the U S ethane, which coupled with the olefins overcapacity and the efficient after the market will ensure that the arb will recover as units ramp up the tanks of replenished and the product again is price to move.
Sunday nights of crude really.
And I am pleased to report we have made further progress on overdue of crew changes and Q4 and the face of the ever changing and legislation and restrictions.
Navigator together with countless other owners and ship monitors upside and the net shouldn't declaration on secret of wellbeing and crew changes.
This declaration of the all six of those are recognized as T walkers and request the coordinated part and governmental of ports the adult to facilitate crew changes and the internet.
Lastly agreed health procedures.
And it's testament of the hard work dedication on the strict adherence to the new gold standard hygiene protocols of our seafarers and navigator gas was fortunate not to screens a single confirmed Covid case, and then they both have to eat vassals and 'twenty 'twenty.
Talking about safety.
Proud of the efforts we have taken together with the partners to keep people safe force.
Physically and emotionally and to keep the products and the tanks.
Our overall fleet safety performance was the best and records we.
We increased the number of the Investor reports, which is the leading safety indicator, while reducing the frequency of arch and students.
We've now reached a significant milestone huffing surpassed 800 days of loss payments then one of them.
And highest months fleet.
And when it comes to safety, though we all know that you're only as good as your last sex and what's so we continue to be vigilant.
I liked the sandbox, we completed phase two of our Morgan's point ethane JV terminal one of the sassy size and kiloton refrigerated ethylene storage tank was sufficiently was successfully commissioned umbrella and to establish and this can be seen the and the supplemental part.
And the 20 <unk> of December we reached the crucial milestone when the navigate to the Atlas loaded the force Cogs with the Atlas and the time.
You equalize and the time facilitates fast the vessel working with speeds increasing almost tenfold.
This new capability will allow us to increase throughput and whilst improving the efficiency for our customers as we reach the 1 billion tons nameplate capacity.
By any metric.
Construction projects has exceeded all of its targets with the safe on time and below budget completion.
And this is all of the more impressive is the majority of the construction took place and the medical of the COVID-19 global pandemic.
I'd like to take this opportunity to thank everybody involved and the successful delivery of this remarkable and unique project.
We are now confident that we'll be able to exceed the tableau 1 million tons nameplate capacity by at least 10% without any significant investment.
Overall Q4 was a good quarter for our business with momentum building months and months, we safely of mass and the Q3 weather headwinds and saw the resulting improvements and high utilization rates. Our ethylene JP channel finished the year strongly with an annual throughput of over 420000 tonnes.
Well she was an excellent performance when you consider the phase one and it was not fully commissioned until April and what's the refrigerated tank coming on stream in late December.
Once the weather related U S orphan production issues and the force majeure subsides. This tight capacity of people Joe box at the boost the terminal throughput, but thinking about the stable cash flows from of take or pay contracts and this will help offset any village satellite T and the shipping business.
The handy size of Newbuild first of all of the book continues all type of historical lows and this can be seen of slight sales team and the supplemental presentation.
This combined with the stock's up all of the imminent stuffed up of the three new North American export facilities and Clinton, everyone. Morgan's point of ethylene joint venture the upon the Chambal and the Prince Rupert facility will help underpin firming vessel utilization rates.
This coupled with the healthy ethane arbitrage and the reopening of the U S Asia ethylene arbitrage together with increasing demand for ethane and LPG and China will help boost the exports and share.
Bring improved fortunes for both the Hanmi size segment and for navigator gas.
Well first of all Peter marks I would like to hand, you over to our CFO Niall Nolan Niall.
Thanks, Harry and good morning, all.
That's part of you referred to the fourth quarter results with the fourth quarter's results. The company has generated a profit and three of the last four quarters of 2020 that is excluding the unprecedented first quarter. When Covid was initially determined the global pandemic and the world of including the currency markets collectively held its breath.
The $3 $4 million of profits generated during the fourth quarter compares very favorably against the $2 $8 million loss in the fourth quarter of 2019, and indeed, the $1 5 million dollar profit and the prior quarter.
That resulted in the small loss of $400000 for the full year of 2020 against the $16 $7 million loss for the full year of 2019.
EBITDA for this fourth quarter was $32 million with two point million $2 1 million being generated from the operations of the terminal following the weak October October is the.
As a result of hurricane Laura as discussed on our last earnings call and $29 $9 million from the shipping segment.
Total operating revenue from the vessels during the quarter was $87.4 million and increase of $6 million.
From the 81 4 million generated last quarter, and 11, and an increase of $11 3 million from the $76 1 million generated during the fourth quarter of last year.
And this quarter's $84 million was achieved by an increase in average charter rates, which rose to just over $21100 per day, or 642, and a half dozen of dollars per month from around $20200 per day or $615000 per month for the fourth quarter of 2019.
Average charter rates across the full year average 21 of the half thousand dollars a day and relatively small increase overall from the $20800 per day achieved in 2019.
Utilization improved during the quarter, achieving 19, 1% relative to 78, 8% for the prior quarter and year.
Utilization for the full year of 2020 was overall and the same as 2019.
86, 8%.
And then the pool earnings, which are aggregated and allocates to prove the participants in accordance with two of points resulted in a net gain to the other participants in the pool of $500000 during the fourth quarter, but the overall the other participants vessels contributed $400000 to our vessels and the Luna pool since its formation.
And at the beginning of April 2020.
Revenue also increased by $1 $4 million due to an increased number of days of the vessels were trading during the year as a result of 2020 being of leap year and as the consequence of less days being taken up for dry vessel dry dockings.
19 vessel dry dockings undertaken during 'twenty 'twenty, taking the total of 224 days to vessels less than planned as the result of delays associated with COVID-19.
The cost of the nine dry dockings was approximately $10 $2 million the.
Two delayed tuck ins along with 12 of others are planned for 2021 of the total cost of $18 million.
And as I mentioned the Nathan this is the only.
And some capital expenditure of the company joined 2021.
Voyage expenses increased significantly during the quarter, but these are pass through costs reclaimed by increased operating revenue.
The increase was primarily as a result of to know some of it's both the Suez and Panama, which collectively rose from five friends. It's joined the Q4 of 19 to 26 for the most recent quarter and from 22 friends. It's true the full year of 1971 trends.
And in 2020 and all that.
These are between 100000 and 150.
Hasnt of dollars pair of trended and the.
The increase the number is partly as a result of additional cargos, principally principally ethylene moving between the U S Gulf and the far east.
Best of luck or anything and expenses were $28 $4 million for the fourth quarter equating to $8119 per vessel per day and.
The 109, and a half million dollars for the full year equating to $7873 per vessel per day.
Which is of 2% decrease from the vessel Opex and cards during the full year 2019.
General and administrative costs were $6.3 million for the fourth quarter similar to those of the fourth quarter of 2019 Hell of a G&A costs for the year with just under $24 million, a 14, 3% increase from the $21 million incurred in 2019.
And this $3 million increase principally comprised of $1.2 million for additional audit and internal control related fees millions of dollars on the terminal additional determined and the insurance and own and crystallize losses of 400000 related to the Indonesian rupiah and true.
I'm the chairman of the formation of legal fees of the health of millions of dollars.
The other income of $100000 for the fourth quarter of $200000 for the year relates to management fees received from our management of the Luna the pool.
Interest costs for the fourth quarter were $91 million, which was almost 26% less and the fourth quarter of last year as a result of reductions in the U S labor.
Similarly, the interest cuts reduced by 15, and a half a cent year on year with interest of $41.1 million for the year to December 2020.
The share of results of the equity account of joint venture, which is the ethylene terminal generated a profit of $700000 for the fourth quarter. After a slow start to the two of the quarter and October as a result of the.
So hurricane Laura discussed earlier.
Net income for the fourth quarter as mentioned was $3 4 million or six cents per share compared to a loss for the fourth quarter of 2019 of $2 $8 million and this resulted in the small loss for the full year 2020 four hundreds of thousands of dollars.
The balance sheet remains very strong and we've undertaken a number of refinancings. This past year to further strengthen the include.
Including the refinancing of the hundreds of millions of dollars Norwegian bond.
210 million, that's the loan refinancing and the $69 million drill down on the terms of credit.
Associate.
Cash at the year and stood at $59 $3 million, we had a third of 51 million available from Undrawn facilities for general corporate purposes.
Moving from the terminal facility.
And during the quarter, we contributed $2 million to the export tariff of the joint venture from the loss of our facility and since the year and we have contributed to what we believe will be the final $4 million, taking our total contributions for the terminal development $246 $5 million, which is under budget and as Harry mentioned.
Delivered on time and safely all of which is of major achievement and the current environment of frankly at any time for a project of this type of.
The two final contributions.
To the turmoil of the JV were drawn from the terminal credit facility, along with another $14 million since the year and for general corporate purposes, resulting and episodes of being fully drawn at $69 million.
As the construction of that Tableau has now reached practical completion the terminal with the Sochi construction loan has converted into a five year amortize and terminal attracting interest at LIBOR plus 275%.
Our total debt at December 31 stood at $852 million, which includes five vessels secured facilities to Norwegian bonds and the terminal facility.
There are no maturities on any of these facilities during this year and with the exception of and $18 million repayment and March next year. There are no maturities on any facility until Q4 2022.
The company wasn't was of course and compliance with all of its financial covenants on all of its debt facilities.
At December 31, 2020.
Thank you and I will now hand, you over to all of them.
Thanks, Mike.
And during 2020 three.
Safely load the transported and delivered $5 2 million metric tons of liquefied gases to our customers all over the world.
I took the $5 2 million metric tons, 5% of the volume was loaded and South America.
15% from the Middle East, 24% from Europe, 26% from North America, and 29% from Asia.
This shows the diversified international and nature of our trades, which underpins the resilience to fluctuations in any one region.
However, as you haven't heard from Harry's commentary, North America place and increasingly important role and the supply and exports of petrochemical and besides cargos.
Petrochemical cargoes constitute about 47% of our total earnings base.
And each cargo on average it takes often more than two months to complete due.
Due to the trans Continental nature of these traits and comparison LPG cargoes and take on average 10 days to complete the.
And therefore any change to petrochemical exports, even the small quantity.
And the effect the segment, our fleet and our utilization.
The lingering impact of Hurricane Laura.
Stronger hurricane on record and making landfall and Louisiana, we're seeing going into October and towards the second half of October the U S ethylene industry fundamentals.
And the mental and normalized as seen on page nine of the supplemental materials.
With prices coming down and.
Italy and exports the commencing.
Despite the approximately 10 days of tank commissioning during December at the joint venture terminal.
It's managed to export about 60000 tons up from 20000 times in October and.
10000 tons less than a high in January of 2020 one.
The impact of yourself and first theme in our utilization rates how are you.
Utilization rates went from mid 80% level during October to above 90% for November and December.
And the change can be really attribute it to the normalization of U S ethylene pricing and availability.
And the market dynamics seem to be rocking efficiently as prices came down.
And a month after hurricane Laura.
And we have 61% market share of all ethylene cargoes being exported from the U S. During the quarter.
Which translated to seven and voyages or employment for five vessels during the period.
LPG exports and handy size vessels from the East coast increased during the period.
Going from two cargoes in November to five and December reaching a peak of 10 cargos in January.
I'm not seeing such activity from Marcus Hook.
Export complex since back in 2015 and 16.
Most of the LPG went across the Atlantic.
Translating to the box demand of and extra.
505 vessels during the month.
Therefore, and.
And the incremental volume, even small needling handy sized transportation and has the potential to influence the supply demand balance.
Segment, consisting of only 120 vessels.
Conversely.
There is the downside to find the violence of market.
And as you've ever heard of previously the southern freeze caused unexpected ripple effect effects through the entire value chain.
From February onwards.
U S ethylene price increase dramatically.
Asian price followed suit to attract volume from other parts of the world to substitute the shortfall from America.
The U S Asia arbitrage closed resulting in limited exports.
The industry is expected to revert back to the fundamental oversupply, though why because ethane.
Flatlined during both hurricane Lora and the southern freeze and remains close to the effective for U S producers.
The silver lining from the southern fried twofold to us due to the high U S domestic ethylene price.
Producers are highly motivated to get production back up absolutely utilization.
Minimizing time for the industry to return to normal.
The same happened post hurricane Lora with ethylene pricing decreasing from a high of $600 a ton in September to 400 doses of time at the end of the court.
Secondly, all of the U S. P D H propane to propylene plants also shops.
Granting us the pricing.
Changed almost overnight.
And then from being a net exporter of propylene to becoming a net importer of propylene.
U S domestic price of propylene and almost tripled to $3000 a ton.
This presented us with an opportunity for of our of vessels.
After completing discharge of butadiene, and ethylene and Asia change grades and.
No the propylene bound for America back across the Pacific.
And we effectively replaced the total of 150 would be ballast days.
200, and see if the laden days.
This illustrates the triangulation can be yummy and.
And upside for our handy size vessels.
We are looking forward to the commissioning and startup of both Revpar and the export terminal and New Jersey, and the Prince Rupert export terminal and British Columbia sometime during the month of April.
Our vessels as well as competitor vessels are currently being considered by various customers.
Are both term notes and are undergoing technical assessment for compatibility.
Therefore to sum up.
Expected normalization of the ethylene supply demand balance and the U S.
And wrap up of the two new LPG export terminals.
Sure the have a positive and friends to our segment.
And in the spring and summer months. Thank.
Thank you.
Thank you and then Harry and now and let's open up the call now to a question and answer session.
Thank you, ladies and gentlemen, if you wish to ask a question. Please press star and one on the telephone keypad and weighted for the world to make it the message of advisors. Your line is open. Please state your first and last name.
Name before you ask your question if you wish to cancel your request. Please press star and true once again, please press star and one of if you wish to ask a question and star and two to cancel and that request.
Thank you we will now take our first question. Please go ahead of your line is now open.
Hi, there Oh, my Doctor from Clarksons <unk> Securities.
Thanks for the morning, David Thank you.
Thanks, and thanks for the overview and and.
And just this is the question that you get fairly often but wanted to ask and say you know now with the the Marine terminal now officially completed and.
And you've obviously got all your ships on the water you have no capex and you're now starting to to bring in cash.
And without any commitment.
The debt how do you think about strategic priorities going forward.
And what sort of the of the top things on your on your list here and you'll look ahead into 'twenty, one and and into 'twenty two.
Sure.
And if you don't mind I'll try to answer.
And should that and share they are and so with Harry.
Look.
You're right our major capital expenditures of completed the terminal is done which required a fair amount of capital over the last couple of years.
<unk> program is completed we're satisfied with the fleet that we have right now some renewal will be needed and.
The future of as with every shipping company.
The immediate thing is true maximized, what we have right now.
That's a first.
The really goal and we're basically on that course at the moment and I think it will unfold through 2020 one.
If things go as we expect them, we would think that it would be logical at some point.
And not too distant future to focus.
And perhaps are increasing the capacity.
All of our <unk>.
At the lien joint venture that terminal can be expanded relatively inexpensively.
And as soon as we believe that the.
The market is there.
And that our way of fully exploited the existing capacity and tested it's outside reaches which I think we have yet to do.
I think that could be an area, where capital could be employed and and employed extremely profitably.
And so that is and you're off it's just the most obvious thing that we would think about as it is.
As far as new engagement with capital.
Harry do you have anything you would add to that.
Thanks, David GAAP not fully concur.
And I think the other thing about as you know you have the by Tomorrow. So we're comfortable we can get 10% and I are the tariffs and hopefully we can get a bit more and as well we.
And we just need to have one of consistent rates sort of long enough to see how of much more of we can get out of the town and also without spending any major capex at all and so we're gonna maximizes the adult.
David said and the other thing of I guess I would guide as it were always and the lookout for any consolidation of any any other things we can do and the market plays out, but obviously at the right price. We continue to assess that David mentioned that you know of.
We will have to do something when you are.
And in the future of some of us and it gets older and that's just the the way it works and this industry, but what do you call me and looking to see if there's any investments we can make and of our vessels and to make the more sustainable until the just the C O two and the carbon footprint.
That's sort of the hearts of yards.
Okay. Thank you Harry.
Well I think that's probably all.
All we can say about right at the moment about cat future capital expenditures.
Thanks, David and and then and Harry that that's clear and and maybe just a follow up wanted to ask about the terminal and the force measure.
Just generally just the question you know in this case for instance of that yeah. The the declaration of force measure of for instance of that cancelled altogether the flow that would've been used and the incoming revenue for the JV or does it sort of the contracted extended by the one or two months, where the pipeline and wasn't audible.
David and Eric will answer.
Yeah. Thanks, Omar Unfortunately, coming from the chemical industry, all have a long history and force must yours, either the cladding them or green and the receiver and and so far.
No I don't find the how it works basically the force majeure suspends the contract for that period and it doesn't extend debt just sustain.
And that means that the the class force majeure and it's got an obligation to go out and try and find the tenths of supplies as quickly as possible and then got back onto the contractual terms again, so it doesn't extend the it just suspend the.
The solvency of course, Nomura and does it does thank you that's clear.
And then I guess, you you and you mentioned the.
The the it's been remedied the the Mckee.
Chemical issue and that scheduled the startup is for second half of March has it already started up or is it still planned to be for a second half of March.
Yeah, Hi, Thanks, Omar Yeah, we're starting up the startup of as we speak. So there was the mechanical integrity issue and on the pipeline that leads from the top ones to our terminal.
And I'm glad to say that the commissioning and starting up as we speak so we're hoping to see product, Florida imminently.
Okay. Thank you very good a lot of I'll leave it at that thanks, guys.
And Phil.
Thank you we will now take our next question. Please go ahead. Your line is now open.
Hey, guys and Sean Morgan from Evercore.
So yeah.
So to follow up on Oh, Meyer's question and it with regards to the JV of terminal and the contribution of income statement. So I.
I think it's it's been a little difficult to sort of accurately predict how that's going to be the part because it's just it's coming in and.
The sort of below below the operating line.
But when I when I sort of look at the the results you guys had last quarter versus this quarter and sort of thinking about the ramp that debt I at least I was expecting is that is that more of like the the commodity arbitrage dictating that declined from <unk> or is that disruption from the hurricane and and and also given what we know.
Now about about the disruption and the mechanical disruption in Q1 of 2021.
How do you think about.
And just kind of back of the contribution that we're gonna be saying.
Yeah.
And do you want to talk about the market piece of that maybe now can fall off on the financials.
So the show on must be mentioned and some of the the commentary.
And the read the real reason of October reduction and utilization was the F.
Facts of the Hurricane Laura.
Isn't that much and it was only 20000 tons of ethylene from the terminal during the period.
But then our utilization when I'm talking shipping now.
It went up in November and December to above 90% and that is.
The majority is because of increased output from the terminal.
So in November and December.
It was 60000 tons.
In December and he was even more in January so that has the positive impact.
On the shipping side.
And the our take or pay contracts.
And all things being equal and the normal world, whereby U S pricing and subtract the internationally.
And then you'll see that flow going.
And probably more and book the TSA agreement or the the contracted volume and so so that's the relationship under Neath at all is the take or pay concept.
So arbitrage opportunity really drives the hub.
Additional tons, which is obviously beneficial on the shipping side.
And that explain that.
Yeah, I mean and.
And that's not not entirely I mean, so what's driving that the the negative decline as it is at the commodity arbitrage or wasn't the volumes.
Okay.
Its functions and.
There's no downside on the commodity pricing because of the take or pay contracts. Okay. So it was it was volumes and volumes.
And got in the in the fourth quarter, there were two impacts on volume and the first was.
Hurricane Lora and they shut things down and there just wasn't a the volume of it.
Incremental volume to take over the <unk>.
Second part was the fact that in December.
We had to fill the storage tanks, so we stopped exporting.
Loading into the ships the directly from the chiller, we loaded from the chiller into the storage tanks.
So for a period of time during December there were no no volumes to the export because they were being used to fill the tanks.
And at the end of December those tanks of a failed and in January we began what we would call the nominal of ice function and and at work just.
Supreme Lee well during January where volume and everything just works the way it should be so.
And you and unfortunately, you won't you'll see a distortion again and the fourth and the first quarter of 'twenty 'twenty. One as you pointed out simply because of the deep freeze that occurred in the southern part of and the United States, but it shouldn't be of the.
And the change if there's a wide gap and the commodity arbitrage will that impact.
The only occur and be seen on incremental volume was over and above those committed on the long term take or pay basis.
Gotcha, yeah, Okay, so I didn't realize and filling the tanks who's going to actually disrupt the flow of exports I thought the that can be done simultaneously and so that that actually clears it up quite well.
And then just just also on on the conversion of of the finance facility for the construction of the JV terminal when that converts to of the term loan and that is that the 25 basis point step up and interest.
Yes. It is sort of it went from a U S library of 2.5, plus two five to $2 75.
Okay.
It's interesting because yeah, I would imagine with the construction done it would be less risky, but that that's good enough. Okay. Thanks, that's all I have.
Thank you as a reminder, ladies and gentlemen, if you wish to ask a question. Please press star and one on the telephone keypad.
And we will now take our next question. Please go ahead of your line is now open.
Oh, the gentlemen, it's Randy Gibbons of Jefferies. How are you Andy.
And so on the utilization you know and impressive number there and 91% for the fourth quarter that said you know you mentioned, the Texas freeze, which recall frozen here in Houston and how.
How much of an impact to utilization should we expect from those winter storms and so what what should we expect utilization for it and the first quarter of 'twenty. One and then also how is this kind of improved utilization impacted the handy size shipping rates.
Hi, Randy.
And I hope, it's not as cold and Houston as the dog.
And things of requirement up nicely.
But the the.
The the the ripple effects of sales fell even though we're in the middle of March so to your question.
Zambia was strong so similar to December and middle of 90% and then as Harry mentioned in his commentary.
And reverting back to the mid eighties and.
During the remaining two.
So all of us back to back to where we were up in October of last year.
Alright.
The full quarter weighted seems like a high eighties, but it's not the if you compare to third quarter wear and Niall mentioned and rehab sub 80% of it it doesn't look like that but that's the most library that was the low point in 2020 of which we are not seeing at the moment.
Right right Alright, so mid to high Eighty's for the first quarter it sounds fair.
Yeah.
And then on the in terms of rates.
Hum.
And it's kind of sideways and we can repay ourselves against the clerks and 12 month time charter of assessment.
And since January and it has reduced slightly from say 700 268 day.
And we haven't dropped as much of the some of the other segments, which are more volatile. So it's it's around about that level and sort of in terms of 12 month charters. The 656 between 656 safety.
But spot market the fluctuate some or some of higher summer Ah nowhere.
It all depends.
Alright.
Sounds good.
The point is that the it is not a cash.
Crash.
You've seen and some of the larger segments.
Sure sure.
Understandably, so alright, and I guess, while I have you slide 12, you show both through of Ponto and the Pembina set to start in the coming weeks or maybe months have you yet agreed to any exports or fixtures out of either project and the near term.
And as far as we are aware and.
<unk> completed yet there are discussions negotiations go on ongoing as I mentioned and my commentary that the.
The vessels are being.
The screen at both locations for the compatibility.
The bulk terminals and commercially and operationally.
Gearing up for.
Commencing exports in April which is next month. So we've been talking about these two particular infrastructure projects for a while but they're just around the corner and we expect the positive influence from once they get up and go away.
Got it.
It sounds like by this time next call and we might have some fixtures that have been completed is that a fair assumption.
All going well the handy sized fix there should be in the books.
Time will tell people, we'll do them, but for the handy sized segment, which obviously we are a large part of it is yes.
Yep notice.
Good day all of that is it for me. Thanks. Thank.
Thank you thanks.
Thank you we have no further questions at this time of the final reminder, ladies and gentlemen, if you wish to ask a question. Please press star and one on the telephone keypad.
Yes.
Hello, Okay. If there are no for the questions I. Thank everyone for joining us this morning, and look forward to our next call.
Yeah.
Thank you very much of this concludes our conference call for today. Thank you all for participating you may now disconnect speakers. Please standby.
Okay.
Yeah.
Yeah.
Okay.
[music].
Yeah.
Yeah.
Okay.
Okay.
Okay.
Okay.
And so.
Yeah.
Uh huh.
Yeah.
Okay.
Okay.
Yeah.
And.
And so.
[music].
Okay.
Okay.
Okay.
Okay.
Yeah.
Yeah.
And.
Yes.
Okay.
Yeah.
Uh huh.
Yeah.
Okay.
Yeah.
Okay.
Yeah.
And then.
Okay.
Yes.
Okay.
Yes.
Yeah.
Okay.
Okay.
No.
Okay.
Okay.
And then.
Okay.
Okay.
Yeah.
Yeah.
Yes.
Okay.
Yeah.
Yeah.
Okay.
And.
Okay.
Okay.
[music].
Yeah.
[music].
Okay.
Yes.
Yeah.
Okay.
Okay.
And.
Yeah.
Okay.
Okay.
And.
Yeah.
Yeah.
Yeah.
Okay.
Okay.
Yeah.
Okay.
Okay.
Yeah.
Okay.
Okay.
[music].
And.
And then.
Yeah.
Okay.
Okay.
Okay.
Yeah.
Okay.
Yeah.
Yeah.
Okay.
Yes.
Okay.
Okay.
Yes.
Yeah.
Yeah.
[music].
Okay.
Okay.
And.
Okay.
Okay.
Okay.
Okay.
Yes.
Uh huh.
Yes.
Yeah.
Yeah.
Yeah.
Right.
Okay.
[music].
Okay.
Okay.
Okay.
Okay.
Okay.
Okay.
No.
Yeah.
Okay.
Okay.
[music].
Okay.
Okay.
Yeah.
Okay.
Okay.
Yeah.
Okay.
Okay.
Okay.
Okay.
Right.
Yeah.
[music].
Yes.
Okay.
Okay.
Okay.
Yes.
Okay.
Okay.
And.
Okay.
Okay.
And.
Yeah.
Yeah.
Yeah.
Yeah.
Okay.
Okay.
Yeah.
Yeah.
Uh huh.
Okay.
Yeah.
Yeah.
Yeah.
Okay.
[music].
And then.
Yeah.
Okay.
Okay.
Yes.
And so.
Yeah.
Okay.
Yeah.