Q1 2021 Euroseas Ltd Earnings Call
[music].
Thank you for standing by ladies and gentlemen, and welcome to the University's conference call on the first quarter 'twenty 'twenty 1 financial results, we have with US Mr. On the fetus Pitots, Chairman and Chief Executive Officer, and Mr. Task Force US leaders Chief Financial Officer of the company at this time all participants are in a listen only mode.
Be a presentation followed by question and on session at which time, if you wish to ask a question. Please press star 1 on your telephone keypad and wait for your name to be announced I must advise you that this conference is being recorded today forward looking statement. Please do reminded that the company announced their results with a press release that has been publicly distributed.
Before passing on the flow to Mr. <unk> I would like to remind everyone that in todays presentation and conference call you overseas will be making forward looking statements. These statements are within the meaning of the federal Securities laws matters discussed may be forward looking statements, which are based on current management expectations that involve risks and on.
And so that's and to use that May result, in such expectations not being realized I kindly draw your attention to slide number 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 now I would like to pass the floor to Mr. Pitts us.
Please go ahead Sir.
Good morning, ladies and gentlemen, and welcome to our scheduled from from school and so today.
Together with me and stuffs and assisted living so chief financial Officer.
Notice of today's call at least and discuss our financial results for the 3 months ended March 31st 2021.
And let the stone slides to me.
And the income statement highlights are shown here on this.
First on <unk> 'twenty 'twenty, 1 really both adult and mentoring and use of $14 million and net income of 3 floating base millions on lives.
Net income.
Moving to common shareholders. After a point $2 million day, if you didn't from the series B preferred shares and the first booking strength in 'twenty..1 was 3.4 and 6 million lives on.
And 53 cents per share basic and diluted.
Adjusted net income attributable to common shareholders was $3 million or 45 cents per share basic and diluted.
Diesel and stems mainly from the unrealized gain and the castle and the value above and so there's 3 kids.
Adjusted EBITDA for the period stood at 5.4 and $6 million.
Douglas will go on and go to a financial highlights in more detail later on in the press.
And patients.
Please turn to slide 4 where I will discuss our recent operating developments.
Developments.
It's all theaters and over the edge and not a breach and declare the 10 to 12 months option at $20000 per day from December 2021.
Oh, Yeah was extended for a period of 25 to 28 months at $22000 a day starting from May 2021.
Yeah, and he's rather well.
It was fixed for 20 to 25 months 20, thousands on their spin day, that's from Amaze 'twenty 'twenty 1.
And so I don't know, which speaks to the theories of 18 to 21 months at $16800 a day us from May 'twenty 'twenty 1.
Finally, the synergy with Sun low speaks for the period of 36 to 40 months at $25000 per day on May 2021.
And the duration of this stuff this was the laggards and islands to 2 years.
As mentioned and the preview settling school and good food consumption and cause damage on and state and sales collateral at the center and was idle for 2 months due to repairs and dry dog and defensible and nice.
And as it has since resumed its operations.
What was the cost of the repair will be recalculated based hull and machinery and Susan's mindlessly deductible of about the hundreds of thousands of dollars and the off hire time.
There were no dry docks or any saves and Bose. This is Julian the first quota.
I am very pleased to announce on sort of the completion of our first and vitamins social and government and simple.
And the posting on with on the website.
We are strong believers and didn't say C. D. But also added value that is provided by excelling in all 3 focus areas over the actual and E. S. G.
Please turn to slide 5 you can see how COVID-19 I'm sleep pulp price.
Ulysses fleets guidance will consist of 14 vessels, including 90 feed this and 5 intermediate containment and abuse with approximate.
50, 530000 deadweight tons and 42000 Teu capacity.
The weighted average age of the fleet is about 16 years and T U.
Slide 6 shows on vessel employment and size.
As you may see governance for 'twenty 'twenty, 1 stands at 18, 9% and nickel.
And on track and they'd be debt.
32.8 million.
This figure is nearly 3 times higher than NAV, 'twenty 'twenty would be debt.
For 2020.2 you have already booked 49% of our vessel days I think on.
And I said EBITDA level of about 28 million.
We still have 5 vessels opening up food service and we did a year and we will be gradually fixing them as they open up always looking to fix long periods, but also soothing to the openings will be staggered over time as well.
Please turn to slide gauge to look at how the market sales during the first flow through to date.
Over the last 3 months the containership markets have continued to set up with Bob and exceeding the previous peak of 2008, and Italian and within the leads to challenge that all time highs last observed in 2005.
Since the mid of last year, despite and seaborne trade rates was initially viewed as a sofa react some tricky Stoke demand shock force by the early stages of that but their need and the ensuing stoking.
The market has continued has continued low to strengthen and for the last year. The twice weekly context Index says the reason on the equity really being reflecting also a real demand growth.
We believe it is a favorable market fundamentals will continue over the remainder of a decent and next year as low as economies are projected to continue recovering from the pandemic induced slowdowns and to register strong gross rates while in parallel vessel deliveries are expected to be more.
With the safety of it.
Please turn to slide 9 when we give it.
Xu of agenda and contain the Buck and for the first quarter.
As shown in the slide time charter rates across all segments Sky and located over the past 6 months grow and get positive picture.
Which by far exceeds historical meet and they're never going to let it loose and has reached the rates not seen since.
Since 2000 and Nate.
Well on vessel sizes, 1 year time charter rates as of May 'twenty 'twenty, 1 and have at least double from the figures seen in 2 for 2020 just a few months ago.
It's worth mentioning here that the servicing market has also lifted the family Robinson Containership index through 2000 and 173 points.
Briefly Showtime peak of 2019, Cepheid points will save almost 16 years ago and June 2005.
Yeah, I live and secondhand and price index shows on average by about 30% from Q1, 'twenty 'twenty 1 over Q4, 'twenty 'twenty, 1 price increases varied across different age groups with the and the presence and can be seen by more than the husband and let's say it.
During the first gross new building prices will increase by approximately 10% on the back of steel prices being on the rise and fresh interest for new buildings on the back of the containership market sizes.
The next day Containership fleet currently as yet and at the end of May 'twenty..1 stands at about 2 countries and 40000 Teu approximating 1% of the sleeve the majority of which is controlled and student sanctions vessels and the vessels.
And they're gonna be activities.
I remind you that adjusted EBITDA would go in mid May 2020.
The inactive fleet stood at $2.7 million Teu.
And number of vessels scrapped decreased in Q1, the only 10 seats or 8000 Teu, despite scrap scrap prices net.
Have increased to about $550 per lightweight ton due to the high demand for Steve.
On the hone and Q1 'twenty 'twenty 1 the flu the fleet grew by 1% without the scopes accounting for the island of active basis, Alright, and then et.
Et cetera.
Meanwhile, the order book has been significantly and give east focusing though on the larger vessels and currently as our base stood at 17, 6% from about 10% just 3 months ago and clothing lapses.
This is expected to reach the 20% level using me.
And he stood slide 10.
As a vaccine production is ramping up and rollouts of gathering base around the world and it doubled to more normal levels of social and economic activity looks to be achievable by most developed economies, thus pointing to and an improved outlook for global growth.
Let's close guidance circumstances, and developing and underdeveloped countries and remains subdued with India being affected the most.
Oh, good although global demand seems to continue to be on the device.
And at the beginning of April the idea and this projected the stronger recovery from the global economy, and 'twenty 'twenty, 1 compared to that of January before with us.
With the GDP growth projected to be 6% and revised upwards from 5.5% and generally.
And amongst the developing economies, China, and India post continuous growth for 'twenty 'twenty 1.
In fact, signing them and dangerous momentum with a broadening recovery at 8.4% compared to 8.1% gross.
And he made it and the previous projections.
Yes, gross is expected to be transport and 5% by D I and live well.
Although I think that that is searching pandemic may then somehow the countries.
Those prospects, but not on the landscape.
In addition to China and India. The U S economy is estimated to grow at 6.4%, while the Hugo zones Ggp's share to rebound to 4.4% from <unk>.
Relative to the previous estimates of $5, 1 and 4.2% respectively.
Looking ahead global growth for 2020.2 are closer to the higher risk and gnomic outlook will continue to see above bloggers and kill visas and 4.4% with most individual countries continuing to grow above today.
Except China, and India, which are expected to grow at the still very reasonable price point, and 6% and 6.9% respectively.
But <unk> strength facility estimated global GDP growth. According to the idea and myth is estimated at 3.5%, which is around the pre pandemic levels.
Yeah.
In terms of demand for containerized trade, which flow sheet clothing and needs to global GDP growth over the last years and this massive and D. You put 9 clubs.
Moving to clock. Some estimates we expect to see a strong rebound in demand.
Loans at 5.5 percentage this year.
With 22, and 23, the container trades and are expected to close and dove at reasonably high levels of 3 and 4% and thrive and 3.5% respectively.
And that's the 1 might expect all the above forecast should be taken with a grain of salt is predicting the future is always difficult.
But there's no even if price due to the disruption caused by COVID-19, which is vastly changing established life and trade patterns and so.
Low duration and debt actually uncertainty of the geopolitical developments and global finance and flow units to make forecasting even more sticky.
Please turn to slide 11 to review the containership age profile and delivery schedule.
As you can see and in the containership Batesville and find the chart from the left side of the slide overall on the Containerized fleet is a young fleet with EMEA and 6% of seats being over 20 years old.
However, the older vessels are mainly concentrated in the smaller size classes without seats up at night.
The growth of the fleet and these segments in which we operate should be minimal and the next couple of years and no significant orders have been placed day and even if oil plays and the vessels will not be delivered before the second half of 'twenty 3 'twenty.
24.
Right. So so delivery schedule of the current containership order book, which is it is expressed as a percentage of the fleet.
The surface figures for 2020, 1 to 'twenty 'twenty 5 offered them and just the order book before any scrapping and slippage.
Currently the total can stay and let's see look standards.
<unk> balance as we said before at 17, 6% of the fleet and vs.
Rising.
This is however, still a historically low figure despite the Houston price.
The current delivery schedule provides a source of optimism for this and next year.
Continuation and further strengthening of guidance market levels is trades and months further recovers.
Given that the supply side will be at minimum levels.
On slide 23 on moves we could expect some correction if demand levels.
Please turn to slide strength, where we discuss our outlook some of it.
The unknown duration of the pandemic and it's financial consequences have made predictions about the future very very difficult.
However, if and distributional vaccines can help with the containment of COVID-19, and the developed markets, but as the first half of 2021 is widely anticipated and seen.
And then in the second half of 2020, 1 'twenty 'twenty, 2 and without experiencing catastrophic events and we couldnt expect significant local demand and tools.
And then even current logistical bottlenecks are expected to continue for the remaining of the year.
And 2021 overall demand is therefore expected to be significantly stronger than in 2020 and hire them to supply growth.
This of course is split with optimism.
Even stronger dates.
Even though we have already seen significant debate appreciation over the last 3 months, surpassing the highest levels of the last decade.
And so it result in modest flow back soon and if and when and logistical bottlenecks sees cannot be ruled out.
Longer term fundamentals are harder to predict and as we said will depend a lot on the vessel low during the day and day rate of growth of demand for containers.
Expected deliveries in 2020.3 out of about 6.6% of the car and fleet, which is not immaterial.
And particularly though the autoclave look for smaller vessels still remains at historically low levels and it appears as being good jobs and there is no availability and till the end of 'twenty 3.
And the lithium scheduled for 'twenty, 1 and 22 remaining extremely small EBITDA.
And a good environment and suggesting of age support and possibly even further advisors and the next 2 years.
Let's turn to slide 15.
The left side of the slide shows the evolution of the 1 year time charter rates for containers and the 5000 Teu since 2000.
He was the financial guidance of 2000 and made to late 2028 stage, rather depressed with 3 spikes within the fiber and the half to $15000 per day range.
And with me, we are witnessing the highest price levels inside the rates seen over the past 12 years exceeding those seem even in 2000 and as before the market collapsed and the low only and the levels. We previously experienced in the mid 2 thousands.
They're all kind of side of the slide shows vessel values and the relation historical prices since 2011.
And you can see that and container values over the past 6 months have significantly increased above media and the leverage levels and dialogue and the highest it has been over the last decade.
This of course was expected as day rates out of the highest at the site is too.
Under the guidance market conditions, our stats and do you still want to acquire vessels and combination with securing medium to longer term testers and this will bring and the vessels down to medium and valuations by the end of the justice.
And at the same time, we are always open to go with the company using NAV at least the platform to potentially acquire the vessels and exchange of says as we said they're also down in 2019.
And we bought 7 vessels.
And that's Monday.
And then the event they improve the market's willing to reach the company's free cash flow and we will continue trying to optimize its use between further growth strengthening the balance sheet, even more and returning capital to our shareholders, having old waste our shareholders' best interest.
This is a top priority.
And with that I will now pass the flow to our CFO Bachelor system needs to go on without financial highlights and will be paid.
Thank you very much on her kidneys and good morning from me as well, ladies and gentlemen.
I will now take you through the next 5 slides to give you an overview of our financial but he's on corporate.
For the first quarter of 2021 and <unk>.
Impair them to the same period from 2000 and Duane.
So with that let's turn to slide 15.
For the first quarter of 2021, the company reported total net revenues were $14.3 million.
Representing 7.3% decrease over total net revenues and $44 million during the first quarter from Boston to Andy would you worked primarily due to the lower number of vessels operating in 2021.
Well now guidance for any vessels were owned and operated during the first quarter of 2000 and screen view on compared to 19 vessels during the first quarter of 2000 and claim.
The company reported and net income for the period, where Freeport and Nate and here and the net income attributable to common stockholders of 3.4.
$6 million as compared to a net income pumilia on and then and then.
Net income attributable to common shareholders of 1 point and make median for the first quarter 2020.
Interest and other financing costs.
I think interest income for the first quarter of coupons from 2 and you on amounted to 4 and $7 million compared to $1.2 million for the same period last year.
This decrease is due to the decrease I'm on the debt outstanding between the 2 periods and there.
And the weighted average LIBOR rate and margin and Paccar and carrier as compared for the same period of last year.
For the 3 months ended March 31st coupons from 'twenty 1.
And I recognize the 0.5.
And 5 million loss on interest rate swap contract.
Comprising corp. Okay.
And 62 million unrealized loss on that zero point for median.
Realized gains.
We can't know day, but this gain from the first quarter of 2012 and good luck.
The conference.
Depreciation expense for the first quarter of 2021.
1.6 million compared to 1.7 million for the same period last year.
Again due to the decreased number of vessels from the company.
Adjusted EBITDA for the first quarter of 2021.5.
And 5.6 million compared to $4.1 million during the first quarter from last year.
Basic and diluted earnings per share from there.
The first quarter of 2020, you on where zero point and $63.
Calculated on 6 and 7 million.
Weighted basic and diluted weighted average number of shares outstanding compared to basic and diluted earnings per share or your point $32 for the first quarter of last year calculated on a 5 point and 57 million basic and diluted.
Weighted average number of share something.
Excluding the effect on the income attributable to common shareholders for the quarter.
The unrealized gain on derivatives and the loss on.
And I say looks like medicine.
Adjusted earnings per share for the quarter ended March 31st coupons on 'twenty, 1, what's your being zero point and $45 per se and basic and diluted.
Compared to adjusted Sterling, So zero point and $17 per share basic and diluted.
For the first quarter of 2000 and trendy.
From wheat and results it will exclude the amortization okay.
Low market time charter stock wise.
Usually only secure John and I used to not include and airport right things and they're published and Metro for your question.
Let's now move to slide 16.
And if you our fleet performance from guidance.
And as usual, we will stop on review by looking first at our utilization rates for the first quarter of 2021 and 2.
Burton.
The same periods of last year.
Our fleet utilization rate is broken into commodity Helena parish from them.
During the first quarter of 2020, you on our commercial utilization rate towards 100%.
And why Loral, Paris and on utilization rate was 96, 7%.
Compared to 98, 9% from axiom and 96, 2% operational during the corresponding period from last year.
I should remind you here and it's our utilization rate calculation does not include vessels and title launched or scheduled repairs and.
And you'll go she venture on acute during the day.
And as I mentioned earlier on average 14 vessels were owned and operated during the first quarter football's on 'twenty 1.
And now it's time charter equivalent rate of 12000 hung on and third and $4 per vessel per day.
Compared to 19 vessels owned and operated and the <unk>.
First quarter of 2000, and Randy and you can knock on time charter equivalent rate of $9006 per vessel per day.
Our total daily operating expenses, including management fees, generally and administrative expenses, but excluding guidance from Corp.
<unk> 6009 standard and of course in dollars per vessel per day during the first quarter of 2021 compared to 5000 pounds and $81 per vessel per day.
During the same period of last year being there and can you just partly being you defer.
And the different composition and smaller size off on me and party.
And to increase on certain components of the costs.
Let's now look at the bottom of the table.
Daily cash flow breakeven levels presented here on a per vessel per day basis.
For the first quarter from far from 21 on cash flow breakeven level was 1037.
And $7 per vessel per day compared to 8 borrowers on seats and an $11 per vessel per day.
And the same period from 2000 and plan.
Let's move on slide 17.
This is unusual and we encourage the team to provide our shareholders and investors with a tool to assess the air and hotel and.
Potential of our fleet and the rest of 2021 and during 2022.
The table shown on this slide is 2 parts.
The first referred to on all of the hedging in place contract that day.
And shows.
We are available Batesville firepower of heat.
Making assumptions perfect scheduled dry dockings, and the number of contracted days and needs as.
And that's where there's a differential between the remaining open days.
As you can see all of our vessels are contracted for the second quarter of this year, 1.886% of the power available days for the third quarter and.
70% days off hire days for the fourth quarter, our contracted too.
Similarly.
49% of it falls on.
22, Okay, and then I.
Available days are contracted and even 22% of our 2023 days.
And the contracted.
Well the contracted days the table also shows the average from tax rate, which allows you by making an assumption for the operating expenses and the G&A expenses per day to day.
Estimates, they're likely you'd be back on condition.
Well the open days.
Zero calculator or to make an assumption perfect day, and I hate to be on which would allow him or her to estimate their own EBITDA.
<unk> contribution.
Providing and Peter.
That's the calculation.
And for example uses.
Same rate is day, 1 of the on all that and conduct the phase 1 can see the effect on the total EBITDA for 2021 and 2022.
I would like to mention that based on the current market rates and syndicated when they move on vaccine VIX.
Open day should err on average.
And in fact, if I was on.
And that's part of vessel per day.
Firstly on Paul.
Carbon contract that's out there and say that we use as an indication and when you say.
This overall and exercise.
And can provide it.
Our EBITDA for the remainder of 2021, but also for 2022 and 2000, and even 2000 and Cranky thing Bai Yang thing once on assumptions about day rates will go up and dates.
However.
And it's not the objective.
But even if we just bought Shaw with our up and Dave will learn their rates and so.
And the table, which as I mentioned on our half and to Central Bank card and market rates.
The remaining net barrels 'twenty 'twenty, 1 and 'twenty to 'twenty 2.
It's hard not to observe that our EBITDA for 2022.
And by 50%.
Bert.
The EBITDA for 2021, which is as far as Steve has mentioned, we'd be more than 3 times higher and the EBITDA level, we get during last year.
Let's now move to slide 18 to review our debt profile.
This slide shows and the bottom graph.
Cash flow breakeven level.
[noise] expectation for the next 12 months and so on the top part of the slide and you can see our scheduled debt repayments over the next several years.
And as you can see.
Our loan repayments during 2021 are scheduled to be.
$6.6 million.
We can see these and the dark shaded part of the slide.
And we are scheduled to remain the.
And the same Lebron low powers.
<unk> thousand 22 and decline in 2000 and plentiful.
And 2021 grocery cash volume balloon payments of about 12 million, who may qualify on a life by 4 of our vessels.
And 2000, and I'm trying to talk their smaller balloon payments of $1.9 million made and.
Yeah, and collateralized by you on and pressure from final and 2023, we cannot balloon payments and for about 33 million collectors collateralized by their main and Golar vessels.
We will seek to refinance all of the above balloon payments when they come to you.
And in line with our practices from the past.
And all 3 of them.
And since we were able to find on sorry balloon payments and extend the maturity of the loan.
I would like to state here.
And January program, too and we made a voluntary redemption of 2 million.
From a preferred equity and it.
And sharp spending balance to a bit.
And even more than 6 million.
And additional benefit for us and all of these bolt on type of payment was that that would cause that shareholders are good to keep the dividend rate or a percentage spoke to 8%.
And 90% and state and kind of the option on the company.
This dividend rate was set to become 14% in January this year and and seconds out of the redemption will remain low at 8% lessons for another 3 years.
Pushing the potential increase.
And do you think by which time and he's very likely that we voluntarily redeem the remainder of Barclays.
And further quick not here on the cost of our funding before we moved to review the cash flow breakeven levels.
And we pay and Margaret Smarts, and therefore on our bank debt of about 3.6% and assuming a LIBOR rate of 3%.
I've seen our senior debt cost.
It's about 3.9%.
It would take into account the cost of our perfect day.
Hum.
Our average cost of non equity funding and so yes over the last quarter gross about 4%.
Let's now look at the bottom of this table.
And we can see on cash flow breakeven level of expectation for the next 12 months and dollars per vessel per day.
Our loan repayment that we discussed previously.
And to make 1600, and a 32 dollar contribution to a breakeven level.
You can make similar assumption for the remaining components of our cash flow breakeven level.
Lease operating expenses.
General and administrative expenses interest payments very low cost and cash payments for our preferred stock dividend will come up with a cash flow breakeven level for the next 12 months of about 98 tons per vessel per day.
Let's move now to slide 19.
This slide provides highlights from our balance sheet.
On the basis of the book value of our vessels.
And that's adjusted for the car and market market value.
Cash on March 31st because on 1 we get Pos and other assets of about 12 moving.
While the book value per vessel was about 97 million and you think that total book assets of about you from then and.
And 9.
On the liability side, we get no outstanding bank debt of $64.9 million.
On the equity outstanding from about $6.4 million.
Other liabilities of about $6.6.
He will replace the book value of on vessels without charter adjusted.
And the market advisers, so far from it.
We can calculate the net asset value of our fleet to being back around foundry and $65 million or about $24 per share.
And he showed me our shares have been trading from the range of 14 to $17 a person.
Although these surprise like on like a flex and reflects a significant increase since the beginning of the year.
And it presents a significant discount to our net asset value per share.
Thus offering corporate appreciation potential for shareholders and good investment opportunities for other investments.
And with that I would like to turn the floor by floor and activities.
Continuing on the call.
Thank you so let's now open up the flow of already discussed and that May have.
Thank you as a reminder to ask a question on you will need to press star 1 on your telephone to withdraw your question. Please press star and T and again start and 1 if you'd like to ask a question. Your first question comes from the line of.
Sullivan from Maxim Group. Please go ahead your line is open.
Hello, and good day. Thank you.
Starting on slide 17, with the coverage stage percentage at 49% for 2022 and here, we are and almost end of May how does that coverage percent compare historically is that a higher than normal level.
And I think it might be.
Sure.
It is much.
Much higher than what we have had and Julien the lost decade, almost throughout the day when scientists and age.
So strong out of 2 fixed debt relief will be for small views and.
Yeah.
In good markets, we aim to fix for longer periods, and it's also easier as achievable in the market. So we as you've seen the last few fixes that we did 2 of them and that builds of 2 year length, and we expect that to be fixes that we will do from the remaining 5 vessels.
And within this year will again be at least 2 years.
Following up on that so with 2 years and being longer than historically what is the current <unk>.
From like the average of your current contracts is it less than 2 or about year probably.
And I think the weighted average is probably less than 2 years.
And right now, but as vessels are.
And as the charters of our vessels are on a renewed and hotel there.
I imagine that will increase.
Okay. Thank you and I know we're talking about.
10 years ago at this point, but I think can you just heard your comments about 2023 about rates, probably anticipating the additional supply and I mean, what what might impact that timing and 23 and at what have you seen in previous cycles.
Sure.
And for all of that and move that rig.
Currently have approximately.
And is historically not a very valuable to the book.
And.
That's a little bit of book.
Delivered over a 5 year period.
<unk> 21, and 'twenty, 2 we have a very little and deliveries.
So that's why we are very confident and said if demand is there 21 and 22 are going to be.
Extremely good years, and 22, the fleet and Ken.
Good old by a maximum of 3.3% that these and without any slippage without any scrapping.
So.
That's what really makes us confident for 2020, 2.2020 3 the deliberate and needs to be expected deliveries are about 6 and a positive sent a over the current fleet.
This is not a.
And you might see and it's a significant a deliberate and he's sketching. It is all low on the biggest seats and.
Very small part of this deliveries of 2023 has to do with the ships up to 7000 Teu with we have active so we have a bit more confident about that's part of the market, but if the.
And does not continue growing very strongly we could see a correction coming in 2020.3.
And thank you very much for the follow up comments that follow up comments and very comprehensive and <unk>.
Have a great that's a day.
Thank you.
Thank you and your next question comes from the line of pay far from Naval Capital markets. Please go ahead. Your line is now open.
Good morning, <unk> good morning Tassos.
Just wanted to follow up on that.
Just a follow up on the question about just core copper have you ever had Ford cover.
Hi.
And difficult to say I think maybe back in 2005, and 6 and we've had.
Similar the cause of it but.
Definitely for the last 15 years no.
Okay and then.
And you look at.
And then did the contract terms are you.
And potentially changing any of the contract terms to <unk>.
Enhance your.
On your.
Or protect yourselves and case rates go down so that they're on any.
Cancellation provisions or can you just discuss on sort of how you approach the contract terms and whether they've changed at all as the market smoothed out.
I think what has happened is that the market says accepted the chartered from the discover it said that they have to offer.
And the longer periods.
Because otherwise they will have to be even higher.
<unk>.
1 year, south debt or 6 months.
And I recently read that.
And that decided to charter the ship for 70.
12200, Teu ship for $70000 a day, but this is just a small period, so 3 months and.
And so that's something south of us don't want to pay and of course something debt.
And we prefer to have as assessed and feel the lower number which is still extremely profitable, but it gives us a longer duration and the.
Clauses and the types of policies there are not.
And do not exist clauses that make it easy for somebody to baked goods.
And so so we don't see significant changes there.
Okay. That's helpful.
And then aerospace if you could just sort of talking about your fleet profile and Sir.
As you are looking at some of the regulations coming down the Pike can you just talk about how your youre thinking on strategically have that.
Hum came on with the features and regulations.
Of course.
We had here and with all due on future towards guidance and regulations, and we will adhere to all and future of installations and.
And whatever the I M mode decide which is essentially the Gaza and thing.
And could see Oh.
Overall, she worldwide shipping we are still a strong support from all over the I and more and be careful it's 2 in Peru.
On the living conditions on the seats and the cannibalization and the process. So we are totally in favor of all that and we demonstrate that through low.
S G reported which we just published today and put it up on our website.
So we know where we are and where.
Where we will be growing going forward, obviously, the fleet is going to get renewed.
<unk>.
2 and extend as as a as we buy new vessels.
And the older vessels are going to gradually.
<unk> be taken out of the markets, but.
I think 2 each.
And the fact that are we have generally all the vessels. Our fleet is on average age of 16.
Yes.
Doesn't mean that we contribute a.
Disproportionately towards the pollution and all that.
And should have changed very little over the last 25 years since 2017, and we're seeing seats that are slightly more economical I produce slightly less fuel.
Admissions, but this slightly you can cargo to vats by having your vessel today, the Hudson North slope.
And compete we the youngest ship so.
The dynamics that will determine mean.
And how we react.
Uh huh.
You know the market sensitive and.
And of course.
As I said, we will.
Continue abiding by all the rules and with support expense.
Further we got on the amortization and we will adjust our policies and clothing.
Okay great.
When we start to see that process of some of the older.
On vessels, leaving the fleet.
You probably saw that last year's and win.
We sold a little bit of it.
And as this verses you sold 5 of the vessels.
Being scrapped last year.
And.
Well for them and it would probably been scrapped anyway, even if the market was strong because they both are around 30 years old.
But the other 3 they probably would not have been scrapped if the markets are strong as it is.
And so with a strong market that is as a incentive to keep the vessel a bit longer and to pass the special survey that make plus the media and to a million and a half and keep the vessel because we tend to recoup the extra day or close to passing dismiss and survey.
And the very soft period of time, so we will see what happens definitely.
And when we have our next drop in the market you can expect to see us selling some of the vessels.
For the next couple of years I don't think that we will be disposing of venue above ships.
Okay and.
And then cash so if you could address 1 thing on page 17, you know you put calendar days and then the payable days for higher.
And it looks like you.
The difference and call. It just over 28 days per quarter for the net.
3 quarters.
But I'm looking at your <unk>.
Dry docking expenses.
Over the next 12 months, it's going up.
From.
And pretty materially and just 641 should I be thinking about more drydocking days going forward or can you just give me some color on sort of what your dry dock schedule looks like for the rest of the year.
Well I think that what you see here the difference.
Very likely a quota and they feel.
Next cash once.
And 1 scheduled dry docks have reported for the next.
And 3 quarters and there yeah.
And something similar for 2022. So the fact that these are really where that difference comes from again. This is indicative although it does reflect our best estimates for.
For the other day dosing schedule.
Okay, and so it looks like about 700 or 750000 per quarter for Drydock and expenses.
This is the 6 and the 6 folks do you want and spent a day I think you hit the bottom on slide 18.
And <unk>.
$631 per day E D.
Contribution of dry docked and expenses too.
2 cash breakeven 11.
Yes, Yes, and then I was just looking at the total expenses for the quarter looking at debt number of days.
Could you typically you were and pretty active.
And discussions with your lender so.
Do you have and update on the Blue and <unk>.
12 million balloon payment due is due at the end of the year should.
How should we be thank you to bad debt as far as terms and.
And thank goodness it is very likely it will be refinanced as I mentioned in my remarks and just.
Although it's a bit early we have already started exploring eh and <unk>.
The options to refinance that and to them.
And reduce its cost and 13, we are on a good profit.
Okay, and then it looks like the ATM was active and the first quarter can you give me the number of shares that you issued and the first quarter and then.
Comment on it.
The activity going forward.
And as much as you can.
I think we issued about rapidly.
Rapidly and 90000 shares during the first quarter I can get to the exact number if I came from the top of my kids, but something like that.
And we're going to use it opportunistically and we believe there.
The price at which we can issue stock craze no dilutive.
And holders.
And indications.
And we think RNA vs.
And the mid twenties $24. So.
And you shouldn't expect us to send that 14 or $15 sales from the ATM.
Okay and then.
And in the past you've talked about essentially retiring the preferred.
Doesn't seem to be much.
Near term pressure just because of the.
Dividend rate is 8% can you talk about.
The preferred and and.
Whether it's going to continue to be part of the capital structure as we look at 2022.
I think I did mentioned in my remarks that day. It is very likely it would be redeemed the remaining from this year.
Okay. Thank you so much and Ms sacks.
Thank you. Thank you Paul thank.
Thank you Paul.
Thank you.
I will now pass the flow back to the chairman and CEO and I would see this put us for closing remarks.
Thank you everybody for being with us and todays first quarter results.
Gross.
<unk> will be back to you and the 3 most day. Thank you.
Thanks, everybody have a nice day.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
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