Q1 2021 EuroDry Ltd Earnings Call
Yeah.
[music].
Yeah.
Thank you for standing by ladies and gentlemen, and welcome to the Euro dry conference call on the first quarter 'twenty to 'twenty, 1 financial results, we have with US today, Mr pitches, Chairman and Chief Executive Officer, and MS. Jessie Dish Chief Financial Officer of the company.
At this time all participants are in a listen only mode.
Will be a presentation followed by a question answer session at which time if you wish to ask a question you will need to press star and 1 on your telephone keypad and wait for an automated message, stating. Your line is open I must advise you that this conference is being recorded today.
Please be reminded that the company announced its results with a press release that has been publicly distributed before passing the floor to Mr. Pitches I would like to remind everyone that in todays presentation and conference call you're try we'll be making forward looking statements. These statements are within the meaning of the federal securities laws matters.
Matters discussed may be forward looking statements, which are based on current management expectations that involve risks and uncertainties that may result, in such expectations not being realized I kindly draw your attention to slide 2 of the webcast presentation, which has the full forward looking statement and the same statement was also included in the press release.
Please take a moment to go through the whole statement and read it.
And I would now like to pass the floor over to Mr. Petesch. Thank you Sir Please go ahead.
Yes.
Good morning, ladies and gentlemen from Lewis.
And thank you all for joining us today for on scheduled concert in school.
Together, we are amazed on this past few says <unk> Chief Financial Officer.
The purpose of today's call is to discuss our financial results for the 3 months period ended March 31.2021.
Please turn to slide 3.
On the income statement highlights are shown here.
For the first quarter of 2021, we reported total net revenues of $8.6 million and the net income of $4.9 million.
Adjusted net income attributable to the common shareholders was $1.3 million or 55 cents per share.
Adjusted EBITDA for the period stood at $4 million.
In Stark contrast to a year ago has been a very positive 2021, so far.
Good day rebounding significantly as a result of solid trade growth and limited supply growth.
The dry bulk market continues to impress with its strong some subjectivity since the onset of this year.
During the past week, the Baltic dry bulk index reached its highest level since October 2010.
We have CFO sufficiently this will go a little bit on our financial highlights in more detail later on in the presentation.
Please turn to slide 4 operational highlights.
Motto vessel Pentair Leashless fixed for Threep of about 80 to 100 days at $10450 per day.
Scheduled to be concluded by the end of the month.
And it is currently being negotiated for the 3 to 5 months sources at the level at around $23000 a day.
The doses it was fixed in January for about 60 days at $8750 per day and day. After it was fixed for about 50 to 65 days at $19750 per day.
Lastly vehicle day of indie was extended at 106 per cent of the cancer vaccine for a minimum period until March 'twenty 2.
Our hedges through with a phase which was put in place in the last quarter of 2020 in January 'twenty, 1 and that's the relief has been loss, making and sets us on buckets.
In Q1 was certainly the 120 days.
Billings of 1.3, Panamax vessels, which was originally so is that the rate of $10995 per day with a loss of $724000.
We have also sold the 90 days of close to Q2, Q3, and Q4 of 'twenty 'twenty 1.
The limit of 1 panamax vessel, that's $12550 per day.
During Q1, there were no dry dockings on major repairs.
A few days ago, we agreed to acquire the vessel Blessed lap a 76000 deadweight dry bulk vessel built in 2000 and flows in Japan for $12.12 million.
The vessel is majority owned by a third party and has been managed by use of a boat also the manager of company spaces.
The vessel is expected to be delivered to the company upon completion of its guidance voyage, we Didnt may 'twenty 'twenty 1.
The acquisition will be financed partially by yourself themselves.
Hi from me together and the 1 year bridge loan of 6 million provided by an entity affiliated with my family.
And the remaining funds will come from the companies from the company.
Both the seller's credit on this so it doesn't loans, having an annual interest rate of 8%.
In parallel the company is in the process of arranging a bank loan.
With the acquired vessels scholastic.
Expect it to be finalized within approximately 3 months.
This will provide sufficient funds to repay the sale of securities in flu and possibly positive over the bridge loans.
At the same time the company entered into a charter agreement for the vessels for the period between the minimum of 11 months on the maximum 13 in the 5 months at a gross rate of $19500 per day, which will commence upon delivery of the vessel and contribute about <unk> 4 million in EBITDA.
EBITDA during the minimum period of the Chester.
The acquisition of the Blessed lag will complement our cluster of meet your mates Japanese built panamax size vessels alongside a cluster of own built new buildings, increasing our fleet to 8 units, thus contributing to a proportional increase in there we'd be dead.
Please turn to slide 5 for some of your price guidance fleet.
As you can see it's comprised of 7 dry bulk vessels to the fleet average age of 12.6 years and the cargo carrying capacity of about 530000 deadweight tons.
As I mentioned before following the delivery of the Bliss lack of fleet will interest rate versus.
Hence growth of the fleet average age will slightly increased to $13.1 years and the current book having capacity.
Will increase to approximately 605000 deadweight.
Slide 6 shows the cash into vessel employment schedule.
As you can see the effective coverage for the remainder of 2021 without including the Blessed luck stood at about 7% in terms of minimum fixed rate contracts.
If we include the vessel that is hedged with a phase of cousins increases to 21 per se.
This figure of course exclude ships on index charters, Oregon pools that have secured the deployment, but that opened to market fixed leases.
We are happy with our guidance positioning of little for what's called visits as we are optimistic about the development of the market.
Taxes will present to you.
EBITDA calculated later later on showing how strong gasoline <unk> market.
And addictions can boost our EBITDA and consequently earnings as well.
This could be later on will enable each 1 of you to easily use Keystone south of 8 the Samsung that day.
At approximate the expected EBITDA and make their own conclusions at where our stock should it be crazy net.
Now, let's turn to slide 7 where we will go live with the market highlights for the quarter ended March 31st 2021.
During the first quarter with total dry bulk index increased very strongly driven by volume demand and the operational bottlenecks.
The trend after the assault deep is continuing in Q2.
The Capesize freight market, which was the last to react to the improving markets.
A level not seen in the past decade.
Do you have to slightly corrected during the last few days.
According to Clarksons book to Clarksons sports rates for Panamax as advocates of $16100 a day in the first goes to <unk>.
By May 14, they said they increased to around 24007 funds with dollars per day.
Meanwhile, 1 year time charter rates I believe is close to $18000 per day in Q1, but by last week and they shipped increased to about $22000 per day.
Please turn to slide 9.
As a vaccine production is ramping up and the rollouts on the gathering pace around the world return to more normal levels of social and economic activity it looks to be achievable by most of the developed economies.
I was pointing to an improved outlook for global growth.
Of course the situation.
In debate in developing and developed countries is still how deep we didnt get affected the most.
The total global demand seems to continue to rise.
In the beginning of April the IMF projected world GDP growth in 'twenty 'twenty, 1 was revised upwards from a 5.5% in January 2.6 per since now.
Among the developed and developing economies, China and then yeah, we'll expect it to grow the strongest in 'twenty 'twenty 1.
<unk> growth was revised up close to 8.4 per cent compared to $8..1 per center seem to believe you spoke to.
And yet it was expected to grow by a very firm 12, 5%.
I would think that the COVID-19 pandemic wave made them to this growth a bit, but hopefully not too significantly.
Most important economies are expected to see a further growth up there on for this year when compared to the previous book to their students.
They use U S economy is estimated to grow at $6.4 per sale.
The Euro zone GDP is.
Set to rebound due to $4.4 per se.
Looking ahead group.
<unk> growth for 2022, according to the IMS economic outlook will continue to see above average in cases of $12.4 per cent.
With most individual countries continuing to grow above trend, except China and India, we saw.
I expect it to go at the still very reasonable FIFO, and 6 and 639% respectively.
Looking at the dry bulk trade growth and based on Clarksons projections for 'twenty 'twenty..1 we expect demand to continue treating upwards of 3.4 per cent for this year.
For 2022, and 2020 to be the Drybulk debate is expected to grow at a moderate pace of 2.6% and 2.5% respectively.
Please turn to slide there.
The order book.
As a percentage of total fleet up until May 2021 stands at 5.6%.
This is the lowest level seen in the last 25 plus years.
The main reason for the weak performance of dry bulk shipping during the last decade has been the high number of deliveries, which easily outpaced the growth of the debate.
With the current total total book and continued demand trends for the coming years, we expect to fundamentally supported and continues to rebound in the dry bulk trade for the next couple of years at least.
Please turn to slide 11 to review the dry bulk delivery schedule.
For 'twenty 'twenty, 1 deliveries the order book is still dominated by the larger bases.
According to Clarksons fleet growth in 'twenty 'twenty, 1 will be around 3.8% taking into accounts scrapping another fleet changes that have taken place to date.
But less than the demand growth and supporting the case from a strengthening market, which is further enhanced due to the logistical bottlenecks real experiencing.
For 'twenty to 'twenty, 2 and beyond.
Lucas currently around 3.4%.
This could imply with that true scrapping and slippage, we could see a minimal fleet growth until 2024.
When probably new vessels will have to be on the floor.
Otherwise, we could see rates on price just surpassing even the previous super cycle debates if demand holds up.
Please turn to slide 12.
Let me summarize at a average.
On the dry bulk market.
Yeah, I don't know duration of the pandemic and it's financial consequences of any type of model is very difficult.
However, if the distribution of vaccines can help with the containment of COVID-19 in the developed markets by the first half of 'twenty 'twenty, 1 that's widely anticipated.
And expect significant global demand growth for dry bulk commodities as the world economy will be transitioning towards and countries are planning to spend billions in new infrastructure projects.
Furthermore, these are absolutely related to the pandemic create a favorable environment for seats as many COVID-19 related delays squeeze the available fleet.
Ordering of new ships for 'twenty, 'twenty, 3 and 'twenty 'twenty 4 deliveries is expected to be contained due to the lack of clarity from the fuel of the future is not knowing the optimal ship from even 5 years out makes the placing of any new speculative on the risky.
Also another supporting 5.2 as I mentioned before is the lack of open slots in 'twenty 'twenty..4 is shipyard has filled the space with containers on festival.
Therefore, 'twenty 'twenty, 1 and on wheels indicates a couple of promising use amidst the low book and even further demand rebound.
Spectators of further easing and trade tensions between China and the U S.
Additional economic stimulus and most importantly, China and India.
Volume is expected to grow by 8.4%. According to the I admit when China grew at such levels in the past 20 years, the type and come up with experienced its total than it does.
Indians Indias projected growth of 12, and a half if not substantially if it's used you. The latest pandemic wave is balance to increase its available overall seaborne trade with.
Let's turn to slide 15.
The left side of the slide soon they will loosen a 1 year time charter rates of Panamax dry bulk vessels since 2000.
As of May 14th 'twenty 'twenty, 1 the 1 year time charter rate for Panamax with capacity of 75000 deadweight tons stood at accounts $22000 per day.
The highest it has been doing the last years and approaching the levels last seen in 2010.
Covid demand supply balance the pace of increases and the prevailing sentiment all point to the possibility we will be seeing still higher values.
As you consume the right side of the slide the carbon price of a 10 year old Panamax vessel is that around 20 million.
Kindly note that since January 'twenty, 'twenty, 1 clarksons because of day to day article vessel to 82000 deadweight from 75000 deadweight previously.
Over the past year dry bulk price just couple of gradually been increasing exceeding the historical median levels and reaching towards the historical average prices.
With a continuous strengthening freight faith environment, we would expect to see asset values to increase even further.
In this environment, we have of course capitalizing on the strong market share.
Strength in our balance sheet and increase our free liquidity.
As free liquidity increases from Mexico on roads, we will decide how best to use it for the benefit of those sales forces.
B a reduction in debt.
Further vessel purchases sappho that by say sadly buybacks to the institution of dividends almost probably combination.
We also continuously evaluate opportunities for possible combinations with other fleets, focusing especially on using our status as a public company, which can provide significant advantages of value.
Let me now pass the floor over to our CFO that will assist to leave this to go all good on various financial highlights in more detail.
Thank you very much on the finished good morning from me as well, ladies and gentlemen.
I will now take you through our financial highlights for the first quarter of 2021 income.
Compared with the same period of last year.
Let's turn to slide 15.
For the first quarter of 2000 claims you on that.
On the reported total net revenues of $8.6 million.
Presenting on 69, 3% increase over total net drive initial final question for me.
During the first quarter of 2020, and that's of course, a result of the higher time charter rates our vessels.
During the first quarter of this year.
The company reported net income for the period.
<unk> 9 million.
Net income attributable to common shareholders of <unk> 4 million as compared to a net loss and then in the net loss attributable to common shareholders of $2.3 million and $2.6 million respectively for the same period of last year.
Interest and other financing costs for the first quarter of 2021 amounted to $4.6 million slightly decreased as compared to 0.7 million from the same theory.
Wendy.
Depreciation expense from the first quarter of this year, we're at $1.7 million compared to $1.6 million from the same period of last year.
Exactly the EBITDA.
The first quarter of 2021.4 million.
<unk> 0.6 million achieved during the first quarter of 2000 free.
Basic and diluted earnings per share attributable to common shareholders for the first quarter of 2000 on frankly, the horse 19.
Bryan Keane.
Calculated on total knee 2.3 million shares.
Basic and $2.32 million shares diluted.
Compared to basic and diluted loss per share of $1.17 million for the first quarter of 2 files from 'twenty again calculated on 227 million basic and diluted weighted average number of shares outstanding.
Excluding the effect on the earnings attributable to common shareholders for the.
On a quarter over the on.
On the realized loss on derivatives.
Yeah.
Again, I think it was about to come on share photos for the first quarter of proportion from Wendy Huang.
55 cents per share.
Good day.
Diluted compared to an adjusted loss of 91 cents per share basic and diluted for the first quarter of last year. The adjustment included also the loss.
From the high down inventory.
Usually secure channel not concludes their flow of items on their properties SD Mexico per se.
Let's now turn on slide 16 to review our fleet performance.
We will stop on review by looking first at our fleet utilization rate for the first quarter of 2021 on 2000 free.
Cash user.
Origination range was broken down into commercial and refrigeration.
During the first part from promotion of trains 1 book are commercially on.
Bearish on utilization rates work on the percent.
At the same level per kick into day during the first quarter of last year.
Doing well from both quarters, we owned and operated an average of 7 assets.
In the first quarter of 2000 range..1 hour 7 vessels are an average time charter equivalent rate of 14009 from $24 per vessel per day compared to 7008 from <unk> and $55 per Hershey per day, Erin during the first quarter of last year.
Our total daily vessel operating expenses.
Including management fees general and administrative expenses, but excluding PARAGARD from cost Opex 6.
6005 from that event $1 per vessel per day during the first 4 from this year as compared to 6055 almost on a vessel per day during the same theory from 2010.
People know protocol volume standpoint, we can see the cash flow breakeven level right.
During the first quarter of last year.
Which sanctions dropdown guidance on expenses cash interest expense is loan repayments.
Our preferred dividend is paid in cash.
Thus for the first quarter of 2021, our daily cash flow breakeven rate was about $10000.5089 per person per day as compared to $11000.1046 per vessel per day that we can.
During the first quarter.
2000 per se.
Let's now move on slide 17.
This finish lie and we included it to provide our share focused and investors.
To assess the area of infotainment.
Fleet for the assets 2021.
The table shown on this slide he has 2 components.
First the first of our fixed price contracts and that includes the contribution from the soon to be FY <unk>.
The Black book.
It is noteworthy.
Except for the charter of glass black.
2 of our vessels were fixed on contracts for about 90 days in total during the second quarter.
We consider these from fortuitous.
Market is performing very well.
Producing and being expected to produce significant earnings for us.
So that's the photographs from our employees and contractors link does that guidance.
On the size of Baltic dry index.
Our calculators on here because it really shows the shipper remarks in Panamax Valassis affordable rates, yes from Macy's anything 2021.
Our national sales force.
These index levels gets translated to range for ourselves.
We actually show the final Blanka today for the opening day Safari fleet, which you can see below the sugar on sort of final net for Orient paper and as you can see Fairchild to be very similar to the index.
<unk>.
Based on these assumptions and by further I assume for simplicity 65000 Boe per vessel per day, operating and G&A expenses and a 5% Commission rate, we can estimate the EBITDA contribution of our fleet.
The final result, as you can see in the second to the last line on the table is adjusted for the F for the extra sales contract of 90 days per quarter for the rest of the year, but can we prevent it.
These augment on exercise is meant to provide the tools to calculate our EBITDA for the remaining of 2000 and commend you on us.
Sure.
Obviously, 1 calendar season on expanding your own assumptions about the hedge.
However, it's not to observe.
It gives the market range for the rest of the year.
Currently indicated by the SSA contracts materialize.
Our quarterly EBITDA will more than double the assets 2000 range.
And once at least not the sales will be disabled a couple of days ago. The forward different say, hey, excuse me you moved up by almost 10%.
Let's now move to the next slide slide 18.
To provide you some.
I'm sorry, like on slide 19, I'm, sorry, 2 profit.
To review our debt profile.
On this slide on the top part we can see our loan repayments as well as our balloon payments.
And from the bottom on the slide you can see a projection for cash flow breakeven level over the following good loans.
As of March 31st 2021, we kept an outstanding bank debt of about 56 million.
And this does not include net debt, we expect to assume from the acquisition of less block, which may narrow nearby activities should come on for about $11 million.
Okay.
At the top on the slide shows the depth of payment profile.
And in 2021 as you can see where we can.
We're going to make about $35 million on debt repayment.
8 million balloon payment again for the year, which is collateralized by 3 or 4 panamax vessels.
This volume came in in 2021, low is well below the scrap price from their perspective with respect to vessels collateralized.
We anticipate it will have no issues you can finance ticket when you would choose to do so.
Again.
From this chart, we can see that we have a constant level of flow on their payments, perhaps on the cost of 11 on over the next 4 years with another balloon payments coming due in 2020 free of about $11.3 million, which was collateralized by young from comes from occupancy.
Actually R&D slide I would like to make a quick note on.
On our cost of funds.
The average margin of our debt.
As you can share on the right part of the slides on the knot is about 3%.
Assuming a LIBOR rate of about 3% on the top of it.
Cost of our senior debt is estimated to be around 3.2%.
If we include the cost of the preferred equity that we have.
The average blended cost of our non equity funding would be around 4% cash from the end of the reservoir.
Regarding our preferred equity I would like to highlight the following a $3 million net redemption that we made during the first quarter of 2000 on things, where we have agreed to reduce the dividend day on the preferred equity 2.8 per cent per gallon.
If basic and Carlson, 9% guidance.
Okay and then.
In January 2020 free.
It is important to note here that this dividend guidance was set to increase to 14% last January and now that information is being pushed out to 2020 free.
On the bottom chart on this slide.
Can see our cash flow breakeven estimate for the next 12 months, which is expected to be.
First on guidance.
On this progressive per day.
That doesn't include the blast and the addition of net of the Blue.
Best of luck and its related loans is expected to increase the breakeven level by about $250 per day.
Okay.
Let's now move to the next slide slide 20.
What we can see some highlights from our balance sheet.
These slides I've seen previous presentation.
Gives you a snapshot of our assets on liabilities in a come back to me.
On our asset side first we can see that we have cash and other assets of about $10.4 million gallons from the end of March of 2000 per day.
Of course, we are on our asset size and shape our vessels.
Book value of weeks amongst $97.7 million, making our total book value per pound.
From there the night for you on me.
On the liability side, our bank debt from the end of the last quarters.
$6 million, which approximately represents 52% book the book value of our assets.
Preferred equity.
Did about $13.6 million.
It represents another 12, 6% with our book assets.
Are there assets liability of about $2.9 million or 3.6 per se on deposits.
That leaves us with a net book value of $34.6 million, which translates to $14.7 per se.
I have here the market value of our fleet gives us a share of its book value.
We estimate that the market value of our vessels 7 vessels with garden view on is about 20% higher than the book value, resulting in a net net for our net asset value per share of about $22.
And all of our share price has recently increased.
We believe we still face some trades below that level and we believe it represents an investment with significant appreciation on footprints.
With that I would like to turn the floor back to our students.
Thank you Tom So let me open up the floor now for any questions. You may have thank you.
Thank you ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question. Please press star 1 on your telephone keypad and wait for the automated message advisors. Your line is open. Please go on stage.
Before you ask your question if you wish to cancel your request please press star.
Once again, please press star 1 if you wish to ask a question and start to to cancel that request.
Yeah.
Thank you we will now take our first question. Please go ahead. Your line is now open.
Hello, Good day Tate Sullivan from from Maxim Group.
Starting on slide 17.
With the EBITDA calculator have you.
Have you calculated or show Ms table before in your company's history, and if not why do you think this is a good time to introduce it.
It's the first time, we provide total Tony.
I think Eric.
What prompted us to provide that capability.
Our investment.
The significant changes were observed in the market.
Okay.
Second.
Improvement of our outlook.
We wanted to highlight and give the investors the opportunity to.
Understand and even labor itself with this assumption is to assess the potential on a.
For our company share.
Profitability increased.
Yeah, it's great and I would just I mean, just with that a couple of questions on the table to does it include the new contracts you mentioned the pet tally contract and can you review the details of that contract as well please.
It does not include the contract on the tax people mention that bank Emmy season of course is negotiating.
There is no. This is a standard on subjects. So it will probably conclude within today or tomorrow.
Betsy it's not hundreds per cent a fixed we think it will be fixed, but it's not 100% fixed but as you can see thousands smoothed the 1 here on a quantum.
Fifth we book on the vessels that were acquired.
Right. Okay. Okay, and then just on that slide 17, 18, a day EBITDA calculator as well it it implies that the EBITDA.
EBITDA estimates are based on FFA rates, you mentioned assets 10 days ago or what was the timing.
May 17, and I think it's medicine.
Okay, Okay, great and before turning over on the acquisition for about $12 million can you give more background. If you can just on what made you comfortable closing it at that level and are there other comparative acquisitions that you can highlight.
And any background that you can provide please.
Sure.
We saw the market rising.
And so that we could fix this sheep out are at the very decent faithful.
8 for at least a year.
Yeah.
Which we did.
And which makes us comfortable that the you know within the first year, we will day, we will be able to essentially recover approximately 4 million of that total investment. So even though we paid the price which is higher than the historical average.
Prices in the historical median prices for subs such vessels.
After the passing of this year with the secs that sort of stuff we will have.
Reduce the price to around 8 million, which is even below the median historic low levels and forecasting.
Hi, Mark its going forwards, we think it's a very good addition to the company the problem.
The company has been facing of course is that Oh liquidity has not build up yet we can see it building up as time goes by and very significantly.
We did this EBITDA calculator to do to help ourselves as well evaluate how much we will be including increasing our oh, the returns are and liquidity to see how we can.
Grow the company, but very conservatively in this rising market.
Okay, great well, thank you for that background I'll turn it over thank you.
Thank you.
Thank you we will now take our next question. Please go ahead. Your line is now open.
Excuse me corner is your line on mute your line is now open.
Yeah.
Oh.
I apologize good morning, Eric Good morning tasked us this pratt aftermarket.
First I just wanted to get done.
We'll check on on.
Yes, your EBITDA calculator and just ask you in the first quarter.
Had the FSA and suggested in insights and a.
Why didn't why didn't you do that.
For the sake, it consistent day over the rest of the year, but youre contracted days, just because the assets as they are already locked in.
You mean, why why why it's included in the fall in the 4 no EBITDA as a force to be on the on line C. Low rate is what youre asking.
Yeah, that's what I, that's what I'm asking is as far as I guess.
Just for the sake of comparison it would been easier just to sort of look at it maybe it was depressed.
TCE rate too too much but.
Yes.
The TCE rate actually it's net of the SFA that you saw on the 14.924.
Debated in my mind, where to put the extra FFA contribution and so I decided I wanted to separate the fix from the.
Future. So that's why I chose to put it in.
On the line of orbital force to include it in the lower part of the table.
Accordingly, as long as the reopening.
On the reason not any formation.
Yes, I guess right.
No I think it's very helpful. I mean, it's always a little bit of.
Art to it as opposed to science, but I think it's a helpful way to look at.
Look at your operating leverage sits with look through the rest of the 2.
2021, and just to highlight the pet tell us.
It's consistent.
Tension right on the Cantel is it's consistent with what they have.
We're on May 17th.
In general terms, yes.
I think our thesis mentioned 23 on a car from controllers.
$25000 a day, which.
These variances, it's actually higher than what.
What would have been the implied price per fantastic.
Okay.
Thanks.
Well not be contributing to EBITDA.
Okay, and then when you look at it alone.
To answer your siding.
Lining up for the plastic luck.
What should we be thinking about as far as just the leverage percentage.
I can probably do the math a little bit yet.
11 million of either sellers credit or a bridge loan.
Yeah.
How much of that will be covered it didn't I couldn't really tell exactly how much you.
Okay.
Good day 8 million, Paul it will be around $8 million.
We are in the process of signing up a term sheet with a.
The bank for them.
Low enough about $8 million.
So that would allow us to repay.
The sellers guidance.
Uh huh.
That alone.
Whichever option, we still have 3 million less for it.
Short term liquidity purposes.
Great and I apologize you might have mentioned it but.
What could you give us sort of an outlook of 4 day tassos beyond the end of town.
Are you.
Are you in discussions about potentially.
I follow on charter for that or did you or could you just give us an idea of what the outlook tacked on.
Looks like.
Yes.
We havent started discussing.
Discussing our.
A new charter for the bachelor's are presently it's still quite a long time until then.
Yeah, probably.
The V as the vessels, we will continue trading in the Covid time charters or small time times ourselves.
But we haven't had any discussions yet we will take whatever the market is we wanted to have.
You see.
We have about 75% exposure to the market I would say.
70 per center.
Bose on to the market.
Including the blast luck.
We like that we are optimistic about the prospects of the south of market going forward. So we like to be playing.
The market at this stage with the significant percentage of our fleet. That's why all the other vessels of an index linked charters.
Sure.
Okay, and then maybe the follow on of that Eric It depends on.
On plastic Black discussion you mentioned do you get your net value is low enough where you think it's.
<unk> worked that Brett, but you know you you do highlight that there is uncertainty as far as day.
Paul should systems going forward.
You're buying an older assets, you're increasing your age profile.
It seems to be counter to what a lot of other companies are doing there can you just maybe expand a little bit more than the comments you already made on how you looked at that.
That transaction.
Sure.
Obviously at play in the blast luck is not a play in the long term from it.
All of the company. It's just so from I would say other opportunistic play whereby you know this year, we're going to make 4 million lives are on these ships.
We think that next year will also be strong.
Therefore, even in 2 years, we will have brought to the vessel.
2 to a very low valuation below the scrap value of the ship.
So we think that we will have a relatively old vessels, but.
All of these vessels built between 2002 thousand and then the third thing they are not very different from the consumptions.
They have so so it's really after 2017 that they started building more eco vessels.
<unk> vessels consuming less less fuel and again the difference is a low twos, we do expect a very significant breakthrough sometime towards the end of this 10 years, but since that time I think this vessel.
Uh huh.
Probably can't leave easily until its 25 years of age. This is the advocate scrapping age of ships and this is a very well maintained ship. So technically we think that this can lead lift from more than the 2 years that is required to be hopefully is required to bring it down to scrap and potentially.
It can contribute a further for a few more years.
That's helpful. Yeah, I was going to ask you what you thought the remaining life.
It sounds like that 9 to 10 years, maybe outside.
Okay.
As I said the 25 years is the average scrapping age H for dry bulk vessels Skagen, maybe it's gone down by 1 year.
Most.
On this ship it has to pass on this the next special survey in the what is it 4 years from today.
We think it can be able to do that but it will depend of course some fee income.
Normally considerations at the time.
If the market is good the shipped per liter illustrated 'twenty 4 'twenty 5.
Yeah and then.
Then on taxes, you may have talked about it but if you would just on IP.
You got distracted during the middle of it all.
Would you highlight just any dry docking activity that you have over the rest of the year and then also just.
Talk about.
Any cost pressures you're seeing.
Whether the first quarter run rate as far as that's a lot back to.
Roughly 5700.
We could use for the rest of the gear.
Any color on that would be helpful.
We don't have any drydocks scheduled for this year and that obviously helps Oh, sorry 2020, you on.
Our results in terms of course classroom siggi on I don't I don't see so far on we think that celgene there that is worth mentioning.
The Covid situations has made certain operations from imports it bit more difficult.
Difficult due to congestion I think for example, you have a couple of vessels that are waiting to get into force.
<unk>.
Sometimes there are some issues with the court lifespan and the life, but nothing really that makes us too low.
<unk>.
Various factors.
With what we know to this point.
Great and just to clarify I think you said this but it from.
Forgive then take your pick in the first quarter. It looked like you did.
Yeah actually no would you compete this is because we thinking about growth and to state. The following the following quarter I think we're going to take a Q1 dividend in cash, but it will be in net cash expense from Q2.
Good.
The Q4 EBITDA.
That's why we don't have any dividend.
This quarter on the cash flow breakeven basis.
Okay, great. Thank you so much.
Thank you Paul Thank you.
Thank you we will now take our next question. Please go ahead. Your line is now open.
Hello, Thank you a follow up from Tate Sullivan at Maxim.
Your comments well, what the EBITDA calculation in let's say $31 million EBITDA on 'twenty, 1 and then your comments of potential buybacks dividends debt reduction and then I'm just looking at your slide you have 8 million of balloon payments due.
This year what is your plan with that $8 million would you still extend that and then get it.
Extend that maturity or can you just get context to what you might do there.
So I think vs 8 media.
This balloons will be extended.
Because it's a relatively cheap money, if we decide to to repay something.
It will be the preferred close to sort of from loans that we've currently given to the company. So the 8% Miami has priority to be repaid a normal bank debt will be less than 4%. So.
We need to decide then day, we'd have to decide by next call, what we will be doing without increasing liquidity.
Because okay. This growth or we didn't have too much but by the end of next school, because we will and.
We always look at the situation at that point in time.
And besides what is the better use of our liquidity and what would the benefit of shareholders. Most then.
Okay. Thanks, that's it from me thank you very much.
Thank you.
Thank you there are no flow.
The questions at this time I would now like to hand back to Mr. Pappas for closing remarks.
Thank you all for attending our conference call today on the these nice market circumstances.
We'll talk to you again in 3 months time.
Thanks, everybody.
That does conclude our conference for today. Thank you for participating you may now disconnect.
Okay.
[music].