Q1 2021 Safe Bulkers Inc Earnings Call
Thank you for standing by ladies and gentlemen, and welcome to the safe bulk of conference calls to discuss the first quarter 2021 financial results.
Today, we have with us from safe bulk of chairman and Chief Executive Officer, Mr. Polish How did you Wanna President Doctor Lukasz bomb virus, Chief Financial Officer, Mr. Konstantinos, Adam of plus at.
At this time all participants are in a listen only mode. There will be of presentation, followed by a question and answer session at which time if you wish to ask the question you'll need to press star one on your telephone keypad and wait for your name to be announced for.
Flowing this conference call if you need any further information on the conference call or on the presentation. Please contact capital link at 2126617, and 566 and I must advise you. This conference is being recorded today the sixth of May 2021.
Before we begin please note that this presentation contains forward looking statements as defined in section 27, a of the Securities Act of 19th ex three as amended and section 21, a of the Securities Exchange Act of 19th at you for as amended concerning future events, the company's growth strategy and measures to implement such stress.
G, including expected vessel acquisitions and entering into for the time charter as well.
Words, such as expects intends plans believes anticipates hopes estimates and variations of such words and similar expressions are intended to identify forward looking statements.
Although the company believes that the expectations reflected in such forward looking statements are reasonable no assurance can be given that such expectations will prove to have been correct.
These statements involve known and unknown risks and the based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies many of which are beyond the control of the company actual results may differ materially from those expressed or implied by such forward looking statements.
Factors that could cause actual results to differ materially include but are not limited to changes and the demand for dry bulk vessels competitive factors and the market and which the company operates risks associated with the operations outside the United States and other factors listed from time to time and the company's filings with the Securities and Exchange Commission.
Yeah.
The company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward looking statements contained herein to reflect any change and the company's expectations.
With respect to that that you or any change in events conditions or circumstances on which any statement is based and now I pass the floor to talk to bomb virus. Please go ahead Sir.
Okay.
Yeah.
Good morning, and the best kind of bodies price it looks safe bankers and wealth.
Welcome to the conference call and webcast to discuss the financial results for the first quarter of 2021.
Let me stockholders and patients by expressing our gratitude rollout.
We are committed to the data safety and wellbeing.
Moving on to slide three we present, some key points about safe bucket as well.
Dry bulk.
And without with the sessions and having sort of.
Yes.
Yes, you did.
Dry bulk market all of them.
The management fees and costs more than 50 years of experience the dry bulk industry.
And for the longer that we set of our liquidity, which provides financing for <unk>.
The security.
For the opportunistic assets of lease issue.
All of the spot market exposure allows expansion of brokerage and pivot will talk to the market condition.
We have Oh boy the fleet and the spoke about again.
And about one third of it.
Scott This index Lee and.
I'm joined the presence and market position.
About 75% of about ease of debt financed.
And as with a lower environment of food.
Operations and of course advantages the scrubber.
And based on the increase.
The guidance yet.
We got the ought to be sensitive to the environmental preservation and the cost per Boe.
The competitive strategy by investing more than 67000.
19, and Sandy banking.
And this isn't about cliffs with exhaust gas cleaning the devices also known that the carrabba's.
Can you provide us with extra income capability and the rising oil price and Nevada.
Monitoring and because of scaring the game the opens and full alignment of who share. The causes we have demonstrated the output.
And they want him.
Forward looking thoughts when you Safi.
Operating getting.
And does the EIA phase three and Nox tier III debt financed and you'll be.
The other accounts captured and the president of market.
For the second hand acquisition, replacing all the vessels are there more of the strike and Credentialing.
At the same time and continue the gradual deleveraging of the company.
I will continue with slide four we focus on no spot market exposure I would like to point out the 75% of about fleet and stuff on this that's for sure.
Well the six I said that that was clear.
Providing us with the lower environmental and food.
Operations and unfortunately.
Non.
But the reason on the left side the GAAP income.
Some of the spot market with during the first quarter of 2021 and I think.
Our significantly improved.
And I'll save yourself, the vote exposure and the spot market without.
All of our fleet on the and the fact that about one third the boat.
Feet of charters in the clean and we got for example, and good icon side and it gets the impact on how we see and net revenue of this quarter and finished with the same periods of 2002, Inc.
We continue the presentation, except and coupons and flight side with them on the state of lean operations and <unk>.
Breakeven point with stable operating expenses, yet again this quarter.
And I say this I said yourself and slide six would have increased our ability to add earnings per share of 18 cents and 14 cents on your phone and adjusted basis as compared to an adjusted loss of <unk> <unk> for the same quarter last year.
Total liquidity because it also increased and slide seven the pool of a 190 million as the quarter and and globally to kind.
And the 9 million as of April.
The fifth which increased health and the ability to execute on our fleet renewal strategy and Delever.
Yeah.
At the same time, we have a strong balance sheet.
Items like eight.
And with a healthy book of liabilities total losses and issue of about 57 per se.
Now, let's see and other go to the first of all of the ASP is there any and slide number nine.
Yes.
We kind of increased hours.
And at least how quickly the ability that and with all of the exposure with the talks about meeting the split the market and the both wanted about video thought this enjoying either right.
And that's an example recently and they leave the Cape size has been subsequently fixed for the one yet I think most of the fact that eight five.
Let me see Baltic Exchange Capesize index will be led by 119% they've got them Dci and <unk> expense of 44.
At the same time, and we have increased total liquidity and strengthened the balance.
We will continue all the airports and gradually the U N O fleet with the electric sales for both of the vessels and your acquisitions with modern design and this is about the here for you and why.
And then regulation.
We remain focused on all of them by the amount of the formats and continuing to invest and build out of operations, maybe say, yes, we believe that the old environmental investments will contribute to the sustained operational and financial adviser.
Let's move now the slide 11, and the industry update.
Some of the countries kind of accelerated the COVID-19 vaccine Asia and kind of it.
And I assume and economic activity and in most cases, and the fact that base and done a pretty cool the collegium.
This year of stuck in the route density.
Sorry for the market the evidence at the Hyatt for gauges of both great people and insight.
And 5000 year to date as compared to five one and 4000 and for the same period and Greg.
But it isn't the capes upgraded of the both of 45000 per day.
Many of them for the quarter.
I'm, sorry, my sisters of the other etc.
3000 year to date as compared to seven of one 1000 and for the same period and basically.
But it didn't really come to the market is upgrading of the bulk of 35000 per day.
He is going to be the answer of substantially increasing the vessels revenue, which has been sustained through the first five months of strength if you want.
Moving on day to day gifts.
And extremely late and the relevant to the market and the forecast at least Florida the market remains true.
According to the present trading range for good sizes jewelry that several of the trade that the 47000 Q3 and Q4.
The 56000 and that it would be.
And 90000, respectively.
The emanating from the quarter comp set them up as of June as expense in play for us.
The third the 8000 per day 123, and income for each of $25 five and 30.
And we expected.
We expect the especially in the ability of the markets, Kansas City, South of the increase and the underlying demand, which is also the collected as of the commodity price.
We will of reviewing the enrollment and the the lack of of all the supply and <unk>.
Slide 12, and represent the kind of status of the major relevant commodity prices are seen and there has been a huge but I said of local mortgages and relevant the see the main reason for this was the strong demand from China and other countries and the government spending on growth, but then the recovery programs as well as the grilling products of the Blue.
Corn and meal.
And we've got the really I don't know the wait and see the main Gotta go for AMC trading at about $190 or zone comparable to 2009 levels. Similarly per screen, the rebar, which is a direct credit provider and Rick.
Alex it's up until the back of production, it's gotta be trading at the highest level and price yes.
So you have been amongst the major catalyst for comes to about this.
Yeah, Hi, and.
Similar to other Sept Les on all of the Great Board and sets us.
We wanted to dinner.
In addition, we also presented the the price development of the full data.
The above the 10000 and for the first dialysis lately.
Oh.
Besides of the months of command discussed the.
And the by government stimulus Glenn.
Resident bagged and has proposed for two additional many of these plants on top of open.
The one you guys already bus.
And I'm always important to note that the demand is not only driven by China, which was the case of through the perfect day. The rest of the world of speaking up and many countries are real contributors to the demand side.
Turning to slide 15, we present established of the leak.
Capes and Panamax.
And when the top left graph weekly sense of the price of the five year old day in front of amounts of since then.
Most of our system by both the exchange.
The five year old gapes of surgeons by about 30% of since the last six months and the both length of the census, the other 60 load and presently are valued at about 4000 and.
And there are millions of dollars.
Similarly, one of my just kept sales the play of about 55 per cent during the last six months and about the 155% of since the 2016 zone.
It is important to note the above figures reflect the average vessel indebtedness for.
The anthem and the Cps specifications and maintenance condition safe like I said most of the beef.
Shipyards in Japan as I've done.
And specification.
The other 75 per cent of the fleet you should figure the.
And with ballast water treatment system and traveled with the goodwill.
Scott There's all of these features are providing significant and I'd just go to market the buyers weeks of the other vessels for.
And the second and third the graph, we present the status of builder and the end of year than you did.
This accounted for about 2.5 for Central States and the bulk of three seven percentage of Panamax from 'twenty.
And with the new orders and less than 2%.
It is important for north of there are several of limitations, we're anticipating a sense and you build for this.
The guys are building capacity at most of the UBS.
Most of the Cps couple of crowded the slope of the other sectors their sales.
At the school banners and Congress.
The division almost since UBS, a couple of develop new entitlement in the future and designs.
The reasons taking into account the ageing of the fleet and the eventual of scrapping will diminish through the growth of the dry bulk fleet.
For the next slide number 14, we present the status of the banker for Isis and most of the significantly different.
If you could and said between the price for very little of the secretary of Lloyds and the high sulfur fuel oil the sick.
The show called the high five hundreds of winter.
And just for hours and I bet for patients.
And the top of the that's what the Brent prices collapsed.
The mcmillian and especially in the beginning of 'twenty two and that's.
And that's it was expected because I think of the oldest of the bunker prices and especially the diesel products and here is the very low sulfur fuel oil.
Great brands, great close of the pre pandemic levels and I think the level of about $70 per a lot better about and high fives.
And in the region of 100 and then the.
For the Macy's stone and the according to the future of Margaret and Singapore is expected trade and there isn't a $120 for the remainder of 2021 and and there is one of $150 for clarity.
The city.
Hey, Doug discuss installed scrubbers, and probably of exclude what evidence of scrubber fitted for panamax for consumption of about 7005 kind of methods film for the year they enjoy the benefit for the.
Benefit of about 100 and claims of Doris.
With this.
The people instead of doing the very low sulfur fuel oil and sadly.
And the third we set for the fuel oil, making about the 900 and ocean.
The other here or about 2005 kind of per day.
The recovery of global economies with the addition of mobile and the recovery of crude oil prices may piece of the high fives and sell even higher to pre COVID-19 levels.
Let me, let me summarize the key market pick up waves and slide 15.
The order book is minimal at its lowest level since 2000 and do.
You've got the Buena as it always does not favor new office. Most cps are preoccupied with containers and anchored orders are good going 30 for it's only a few ships and that's got to develop your own environment and efficiently and designs.
We have excluded and exceptionally strong start. Thank you one is the robust volumes of iron ore coal and grain trade.
Demand for commodities has been exceptionally strong and building the first quarter with ups and increased government spending and fourth pandemic students problems and continuing greening of lower.
One of them would have exceeded the RIN prices and the government.
EBIT of why the high price spreads the potential.
And then that of the day of above the Han and thank you Don.
And lastly, the aging of the fleet and the increased environmental restrictions for the emissions from the and the concept of the scrapping activity.
Now, let me pass the floor. The C of focus as you know sort of the multiple of those for out of probably muscle overview.
Thank you Luca and good morning to everyone.
Okay.
And the slides of accretive without tapping of the four months, where we present the unfortunately, the time charter equivalents for.
The first quarter was for that 15000, probably part of the 67 and visitors.
And our quarterly revenue and expenses, which stood at the $4702.
Moving on to slide <unk>.
The quarterly daily Opex.
And daily quarterly daily DNA and stood at 1000 for hot and unfortunate.
Other good figure for the both Opex and G&A for Q1, two and it's going to be one was $6 on the 100 and fortitude Gaza.
And we're saving are published on the operations.
We believe that this number when comparing the average cooperatives and he's one of the ease of is lower.
If not the lowest given the fact that we included non opex for a drive bookings and the live.
For the expenses and.
And our DNA of monitoring fees and data for purposes of the conversation as well as all the expenses related to that and these days and the water company.
Moving out the debt profile and I've seen the slide 19 and present, our repayment schedule as of March 31st 2021.
As of that time, our liquidity stood at 190 $144 million, consisting of price and banks and deposits. The secret gas contracted the undrawn borrowing capacity either of the Oregon credit facilities and secured commitment, including sale and leaseback financing.
Slide 20, we focus on our liquidity and vessels on Capex.
As of early 2023, and one will have liquidity of 249 100 of nine $6 million.
Which included the Gaza and glass Gorilla and reported for the restricted cash and funds available under the sale and leaseback agreements new term loan agreement as well as the revolving credit facility.
Our aggregate the remaining capex for the acquisition of our duplex and do a merger where it could get to.
And of which.
600000 payable this year and $51 4 million and bear fruit rented the graduate school.
And Additionally, the committed capex for the scrubber for evaluation of one of scrubber and and several other.
Volume for the dividend.
We're $3 2 million of which two or three this year and $900000 next year.
And slide 21 represent the debt amortization schedule for that.
As of the cut off of our new of our fleet will have.
And for the demand profile for the next day.
So helping us gradually the villa de leverage of our company.
Next slide number 22.
Is that the quarterly financial highlights for the third quarter of executives like the rock compared to the assembly of the authentic way.
Other than the notes during the first quarter of ready day, one and we operated and any flow through the market environment.
I thought the rates compared with the fourth quarter of presented with the.
With lower interest expense is we're not revenue were supported by the earnings from Strawberry farm in the vessels.
And the used the mortgage experience.
The first quarter and of granted the rent one.
We have the time charter equivalents of 61005 covenant of $67.
And as you see of 9008 and $9.
And the Venezuela.
Net income for the third quarter of going into 'twenty, one and thank you.
One point of $3 million compared to the net loss of $9 9 billion and doing the same day of incentive.
Net revenue decreased by 57% of <unk>.
Since at the one 5 million for the quarter.
For the <unk> 91, compared to $45 7 billion or the same degree of intervention.
Mainly due to increased the C. As a result of the little market.
And also by the addition of our revenues and antibody out of scrubber fitted vessels.
Daily vessel Opex decreased by 1% and forecasts on $702.
Compared to $4771 for the factory.
And I believe.
This decrease is associated with it use dry dockings and provision of technical services.
Which was impacted with increased depreciation expenses due to the COVID-19 related.
Distribution.
Daily vessel Opex, excluding dry docking and we deliver the expenses.
And just by 2%.
And the $4 one per common and the $58 for the third quarter of 2021.
Compared to $4258 for the same periods the center.
And then.
Our adjusted EBITDA for the first quarter of revenue 21 decreased to $34 60 million per loss compared to $9 4 million until the sanctity of the and granted.
Our adjusted EPS for the third quarter and credit when John was for <unk>.
Calculated and the weighted average number of $103 dreaming of ourselves.
For the loss of our share of the field.
During the same period of the intended gently.
The weighted and the weighted average number of 103.
One other three 4 million shares.
Slide 23.
Provide the explanation of the expected downtime each day.
For the for this year in order to assist our analysts whatever for evictions.
The only thing a presentation and slides when before the rental.
Quarterly flight data and.
And the average daily indicators compared to the same period last year.
And we'd like to emphasize of the company's maintaining strong liquidity position.
And with 209.
200 of $9 $6 million.
During the third 22 and.
And one.
This increased liquidity provides us with flexibility to follow our plan aiming for gradually the new operating either of your forthcoming and whether the amount.
And changes and so rapidly delever, our balance sheet targeting the create value for our shareholders.
Once again, we'd like to think of our seafarers and for their commitment and dedication throughout the back for Ya.
But at least the executive moderated the Israel.
Our results and we are now open to the questions.
Okay.
Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad and Mike for the automated message advising your line is open and please state your first and last name before you ask your question to Mr. Cancer, you for a question from fresh start to flow.
And again its star one to ask a question and.
The two to come and so.
Yes.
Thank you well now take the first question. Please go ahead your line is open.
Hi, This is William on for Chris Wetherbee. Thank you for taking my question.
So I just wanted to first ask about your fleet and.
And the chartering strategy, so I know that half of your fleet.
<unk>.
On the spot market environment for spring.
The closer to the the microphone because you cannot.
And have good reception Ora.
Yes, the sorry about that.
Thank you.
Most of it.
So I know that half of your fleet is on the spot market. Currently so I just wanted to ask about your chartering strategy. So what are your thoughts about the portion of your of vessels that will continue to trade in the spot market and what would it take for you to kind of look to lock in some of your vessels on longer term charters.
Yes.
And I'd now half of the vessel side and the swap market.
And the other half one more short term period of the market up to one year.
The out of this a video of the ships are one third of their margin. So its index linked because we had the.
We were filling of the market will improve incentive trends the one of the.
And besides of the.
The structural part of the video of fixtures and be done on the index linked basis.
So we will continue for the rest of the of the quarter and up to the third quarter. This policy to keep the ships in the spot market.
And possibly in the third quarter of all of the fourth quarter, and we will try to lock in longer periods.
As of the charters will be more keen to sort of shake your long longer period charters.
Got it that's very helpful. Thank you and so kind of a is it a little bit of of fault to that and some of the things you discussed earlier, so I know that more recently, given the fact that spot rates of surged and that's really benefit your liquidity, but I'm also just kind of wondering like how you're kind of planning to leverage that and increase liquid.
Did you are you going to look to be more aggressive and pursuing your fleet renewal program and maybe acquire more vessels and the secondhand market.
Yes, and I think about all of our aim is joined the.
Exercise of the leverage and fleet renewal and we.
The interest saving to into newer technology that since our Wuxi and so we have the concentrates on the acquisition some of our ships the younger than five years old.
At the same time, and we have some ships of approaching 80 years old lots.
And we need to sell so there wouldn't be some sales and some acquisitions.
And some selective of ordering of the very limited the other.
Very limited the.
Base, because right now we see that the shipyard so I'm not ready for.
For both new designs with the new technology and.
And the there are not so many options there and this of course is giving us a modal and wisdom for the play.
And the market.
And that the we don't expect to see new building all of this.
And many dry bulk of new building orders for 2020 three.
And we believe of the outside of getting filled up and with the.
The container ships and the tanker orders.
Whilst the bulk of those are the owners will be waiting and the new designs throughout the year.
But we don't see many shipyards.
And at the moment to develop for this.
The new designs.
Alright, Thank you very much for taking my questions.
Thank you.
And we'll now take our next question. Please go ahead of your line is open.
Great. Thanks, Hey, this is Ben Nolan from Stifel.
I actually just.
I wanted to follow up on that last response, you're talking about I mean, obviously you guys of ordering some ships.
Last year.
But now are sort of looking for things with new designs and I'm curious if you could maybe flesh that out a little bit does and.
Or are you.
The most interested and I don't know and and things that maybe.
We would use the ammonia or is there something specific.
Net net you have in mind and debt.
It isn't being developed.
And that would be of interest.
Yeah look when we speak about the new buildings for the.
The future and we said that we bought the.
We have brought the two ships.
And we referred to face E. The phase three I wanted to clarify that EPA phase three dams.
And in the regulations.
2025.
So basically what the company has done is that the we all of the lots of the present generation that we can do easily which is phase II and 25, but we all get the phase III. This is we thought we kind of March closure to 2030 and there are more advanced.
Now the company and.
<unk> has chosen this shuttle and because we believe this and pragmatic Group Inc.
For the existing technologies, and we know that the.
Despite the fact of the set of the several of these fashion some of the shelves is about new <unk>.
We have not the.
And why we're quite sure and we know that the usual slide hydrogen or ammonia, we look on the play.
And our own and the net.
And then let's say and the next day the gate the show by having the most advanced the <unk> of 2025 owned Ward and Anne.
Yeah that would be a competitive advantage. The second point that we want to finish out with is that the all company.
It has and we set up many times, what we want we want to clarify that of the outbound by me.
The vast majority in Japanese fleet fleet, which generally are like debt.
And then more of an energy efficient and actually it is absolutely a breadth of 14. So we expect that the when the new regulation and so for greenhouse gas and it's coming through the rest of.
Good.
January 2023 of its expected to play at all of them in the performance and the evaluated and the classification of the vessels since the February eight.
For E and the Hague of February and.
They get paid when the vessels we received the notice of this within the here they need to fix that and big show of the day category within three years and then Oliver.
Vessels will be.
And we'll be well.
And the in the leasing and the silver will maintain the additional advantages that we always like other in the past.
And I don't know it won't last for me another question on the well.
The really the question is and.
And I appreciate that you're you're in a good position and that your new builds that you have ordered are also and a good position but.
When looking at sort of what would be Max if you were to order ship.
Paul.
And and but yeah isn't available the shipyard what do you have in mind, there I mean, what what is that next generation and ship. It would you kind of way.
And if a yard and were to come out with the design and what would check the boxes for user of a particular type of.
Fuel or or something.
This is the problem right now there is no next generational and shape of available and.
A lot of all qualities are appearing in the press about global and be the fuel for the next day.
And yes, so plenty of yes, and no one knows secondly on the Tynecastle containers, a few options of being proposed by the shipyards.
Really we don't really know which is the medium term all of the all of the long term all of the short term flow of says we cannot do anything more of these days on the gold for phase three new building whenever it's available otherwise we will concentrate on very more than second and more secondhand ships blocked.
The under five years all of that will be very close to two of the upper part of phase. Two designs is nothing we can do of the moment because of the under no. One knows if this ship will be LNG power piece of it wouldn't be hydrogenosome montney and.
No one has an idea and the yards and the.
This is maybe a good point for freight markets they've yards, the I'm not really interested to develop such designs for bulk gens.
So at the moment of the concentrate on the container ships and that they have big consumptions of vlccs or bigger ships and.
And so they don't bother to yet to develop designs for bulk gas for the next phase of the carbonization and basically you have to remember.
Of the yards like ship all of this they've been losing money for the number of yes and.
The first the festival day have to do the change on the bigger ships a M.
The 11th and new contract levels and.
And thereafter, they will buy the show I think we will be very difficult.
The new building suite of new designs for bulk as proposed by the yards this year.
If if at all and you have thought we'd get it it will be next year.
At the end of this for the delivery of bulk is with the different fuels. All of these things should should not be available before 2025 de levered and so we have to be patient.
And if we can find the there's a lot of NUPLAZID with good delivery day the.
Our new build for phase III, and we May consider the we don't find the we will not go for the very young ships and the replacement of a lot of older ships and.
Okay, we could see the about the.
And.
The only of alternative purely for the existing purely of which is the.
The natural gas for example, the LNG.
And we don't have such solutions in this in the and the bulk of the industry set solution should make and let's say towards the end of this the gate and.
Maybe new fuels like hydrogen or like ammonia <unk> gamma.
And at the Italy, Italy or need the of.
The next the gate show basically the next generation of sheets and up the.
Our non generally available now.
Phase three vessels. So this is the only thing that we cover and with respect and logic.
I appreciate that.
If I can switch gears.
For a second on my next question.
Yeah, obviously, we've seen the spot rates go up and you talked about that and there is strong underlying demand you guys did do some time charters, but still most things both for you and and elsewhere and the market tend to be pretty short duration, yes six.
Fixed and maybe 18 months and the long and.
But as the market tightens.
Or are you guys beginning to see any lengthening duration in terms of.
And what customers are looking for to sort of perhaps.
Perhaps hedge out.
The the risk of the spike or something like that and I and really I ask the as I know in the past you guys have done some longer duration deals so is.
Is that something that's materializing at all and is it something that you would be interested in doing.
You are talking about the long end of period charter.
The you know of three years or for.
And yes longer than a year.
Yeah for additional heartburn for additional Hoffman, we have to be a little bit the patient because we.
We have the defense of the two months February and ably and between do we have the collection of the market in March.
So all the we have seen until now was just too good months of plate market.
And I've been around it and they put it and we continue now and made the third month of the goods plays module the.
And the charterers before the sub fixing long term DHA and hope to see the the.
And the spillover.
Spillover of or until the osmose going wrong and the affordable for all of it yes.
And many of them usually monitor all of these are the FFA market.
Which is not necessarily able to ship baldness.
You know piece of.
K for all of.
For guidance for long term business, but the charter is mainly the monitor all of these things sometimes we know the full and part of those accounts is very is very depressed.
The point of use of that there's not enough volume to push it up to the proper levels similar levels of like 2021 2021.
Now we know 2022 is a is a supplier.
Supply of the strength and the same for 2020 three so as we enter into Q3 and Q4 I believe charter will get these feelings about the you know the.
The commodity prices of today's and the value of the donor and and what is happening with worldwide with the stimulus package, both east and west.
And we'll give them the mark of this time hire for us.
Longer periods of the fine and then we wouldn't see the FFA for yes.
Moving to higher level, and then charters will stop asking ships for three or four of five years. So we have to be patient and health of the ships and the spot market to be able to reach last fall and the one charterers, who will decide that the.
Yeah, and they believe in this market and the stop investing our income.
And therefore part of the FFA curve.
So I think this will happen sometime in the third quarter personal non and Bob you know, maybe you and call me optimistic.
Optimism of.
The optimistic.
And maybe it happens in Q4, and I don't know, but you know I mean and look the pencil.
And more and more of those two quarters and we will see the long video of Choppiness and personally I believe without the because ship owners will not participate.
And the in the FFA market, especially on the for the for yields and I believe that the FFA market is that all of the other.
Uh huh strain and as the.
It is.
Is the freight is being exchanged for the for what he has between charters and operate those which most of us sit on the same side of the fence fusion.
And and and if that does materialize that and that is an area that you guys would.
It can be I think it doesn't matter the alliance we have fully enjoy the does it all the loss of day.
Okay, so part of it.
And if if it happened out of it.
Does the except in the part of the fleet has the go way out of it is live and is yep.
Perfect I appreciate it thank you.
Thank you and we will.
And now takes the next question. Please go ahead of your line is now live pen.
Oh, the gentlemen, it's Randy given the Jefferies How's it going.
Yes, hi, good morning, good morning the.
Two questions for me first.
Clearly your TCE rates increased pretty meaningfully from 12000, a day and the fourth quarter of 2020 to about 16000 and <unk> 'twenty. One so how big of an increase of you're expecting and <unk> 21.
And look I mean, the spot market has moved though so.
And so the levels you know 22 $23000 per day on the cash it has more for more to 40000 of the loss of less levered.
So you should expect of the second quarter of appreciate it should be similar and Chris you know we're already around.
50% of the second quarter and the free.
Actually you are doing now and cover the rest of the second quarter.
So I mean, the assumptions the assumption saudis and need to be made so.
I do not the one to predict the numbers and all but.
It's it's you know I mean, you are 50% of the in the spot market and one third of the beauty of ships are on.
On the index linked you cannot run the calculations of that easy.
Okay.
And then it looks like you used half of your $23 5 million ATM program, raising I think it was $12 $7 million and recent months average price was under $2 80, so with the ongoing rally now pushing of shares around for where you will you use the remainder of that ATM here and the near term.
And what will the primary use of the proceeds be.
A small part of ADM has had the name, but we don't know exactly when and we will.
The debate is less about them and we always have debated when one of the cabin as we hold it and I've already indicated when the company.
Thinks that the at the right price, Inc, and <unk>.
So we cannot comment on that anymore.
Alright, well thanks, so much of it for me.
Thank you and sort of find the rest of our of any further questions at star and one on your key pads.
And with no further questions coming through so I'll now hand back to the speakers.
And so thank you for a global business.
The Q1 conference code and the webcast of the discussion and I thought it dozens of looking forward and the same discussion and.
About three months of them now.
It all and have a nice day.
Yeah.
Thank you that does conclude the conference for today. Thank you for participating you may now disconnect.
And.
Okay.
Yeah.
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Okay.
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