Q2 2021 EuroDry Ltd Earnings Call
Thank you for standing by ladies and gentlemen, and welcome to the era of dry conference call on the second quarter 2021 financial results, we have with US today, Mr. Our status pitch of chairman and Chief Executive Officer, I missed the tussle first Lewis Chief Financial Officer of the company.
At this time all participants are in a listen only mode there'll be a presentation followed by a question and answer session of which time. If you wish to ask a question you will need to 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. Please.
Please be reminded that the company announced its results for the press release the has been publicly distributed.
Before passing the floor to Mr. <unk> I would like to remind everyone. The in today's presentation on the conference call you really drive 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 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 statements and read it I would now like to pass the floor. If it's of Mr. Pitiful. Thank you Sir Please go ahead.
Good morning, ladies and gentlemen, and thank you all for joining us today for the sketches culprit of school together with me.
Davis, our Chief Financial Officer.
The purpose of today's call. There's some discussion of the financial results for the 6 months period the end quarter.
The June 32.
2000 of 21.
Please turn to slides to the.
Other income statement highlights of some of them here.
The second go onto of 'twenty, 1 we reported total net revenues of $14.1 billion and the lifting Kevin of 2 points on this yet.
Adjusted net income attributable to the common shareholders was 6.6 million of $2.76 sales.
That said.
Sure.
The main decent interest between net income and the adjusted net income was at the base of the loss of about $3 million or no.
The SFA gathering 1 vessel in.
In Q4 of 2005 tonnes of the $60 per day.
I haven't taken this loss in Q2, our net income for Q3 end of Q4 will not be affected by the low base of about the efficacy.
Adjusted EBITDA for the quarter the stood at $9.2 million.
Our CFO. So some of these will go over our financial highlights and most of these data later on the presentation.
The slide fulfilled out of a basin.
Most of of vessels some of the Leesville speaks to provide relief of.
About 90 to 130 day at $23000 per day, and if the threep expense, but the the.
Most of them.
95% of the BPI.
The best of luck with Facebook of 11 to 13 months, it's the 19 in the 5000.
Good day, and lastly, the Alexandros P was fixed for the Threep of about 65 days of 25200.
The dollar spend day.
During the second quarter of the company's debt is the 90 days of previously sold all of it looks great the giving you lose the.
We will limit of 1 panamax vessel, so sort of internally so that the rate of $12500 per day.
With the loss of 5 times, a day night thousands of others.
Simultaneously. We had also so that's a place for 90 days per quarter for Q3, and Q4.2021of the equivalent of 1 panamax vessels of 12500 that doesn't $50 per day.
The valuation of Qsymia.
The MSA contracts as of the end of June 2021 was the negative $4 million to $6 million as mentioned previously.
1 of the mission of Douglas of.
The loss incurred in this quarter.
As previously announced in May 2021, the company of motto vessel less luck.
76000, deadweight dry bulk vessels built in 2000 and flow of in Japan.
The $12 million.
The day company cash income was limited.
Acquisition was initially financed by the sale of the credit of $5 million and the.
The 1 year bridge loan of $6 million.
And then get the affiliate.
Because with my family.
Moving to by the independent members of the books.
With the sale of this Greg the salt.
Below the line.
The interest rate of the 8%.
In July of 2021 the company repaid the sellers.
<unk> thousand seats with the banks to draw of alone of $8 million with the most of the vessels less love just less.
Lack of scholastic, which is expected to be drawn in the August.
In addition, as disclosed in June 2021, and the amount of $3.3 million of the bridge loan was converted into common stock as per the terms of the loan.
Even just $2.7 million outstanding.
There were no dry dockings of major repairs during the second quarter of 'twenty 1.
Please turn to slide 5 the sort of a summary of the jewelers price guidance fleet.
As you can see the acquisition of the Blessed locked in can you just out of Q2.8 units and further complemented the cluster the meet your major Japanese built panamax size vessels alongside the cluster of 1 newbuild.
Thanks.
Our guidance the Leach has a lot of the dates of 13 years and the cash.
Cargo carrying capacity of about 600000 deadweight tons.
Slide 6 so as of the guidance the vessel employment schedule.
As you can see the effect of coverage for the remainder of 2021, including the Blessed luck stands at about 27% in terms of medium of fixed rate contracts.
If we include the vessel the sketch glad for the sake of governance and can you just the pocket per se.
But this figure of course of excludes ships on index charters that have secured employment, but that opened to market movements.
We are pleased the resolve of current positioning for what the cause of this as we remain optimistic about the development of the markets.
That's just where the present that we'd be tackled laser the laser at all of them slowing how strong the current SSA market prediction can boost of EBITDA and consequently, other things as well.
It is calculated will enable each 1 of the used to easily use the other 1 sort of 8 to Samsung.
We know of an approximate the expected EBITDA, although youre the own conclusions as to what levels of Stokes the b today.
Now, let's turn to slide 7 where I will go over the market highlights for the quote the ended in June sales trends.
The 21.
During the second go off the dry bulk index continues its strong performance as of H remains firm supported by the month ago.
That is in dry bulk commodity prices and the operational Bugs index.
Similarly, <unk> remains robust.
Seeing share the split of today's for Panamaxes average $73200 of day in the second well the.
July is the had been reduced to around $27000.
Spring day.
Of the peaking at the end of June the uncertainty.
<unk> thousand 4 hundreds of dollars.
Meanwhile, 1 year time charter rates for Panamax is average.
At the close to 21007 tonnes per day in Q2 the REIT.
Leasing 26009 times of the dollars by the last day of the call.
The last week, 1 year time charter rates sort of debt.
Just the $4000 per day.
As of the dry bulk freight market has been trading stalled and.
And the reaching the high levels not seen in the past decade. This is the price just kind of most of the present the adopt groups the.
According to Clarksons secondhand bulk obvious price just the pad the south being can you sort of 45%, while the new building prices increased at all.
90% to more than 72 of the cost millions of dollars and 30 millions of dollars respectively for come so it looks a little public spaces.
Julian the first half of the year the fleet as it grows by 2%.
Please.
Please standby westar reconnect youll speakers.
Okay.
Hello, again, and it's already put things debt up soon.
The the line dropped off but I continue we added slide 9.
So the global recovery continues that the solid base, but now variance of COVID-19 may extend debt.
Yeah.
The latest forecasts indicate the downward revision in the aggregate of developing economies and then can haynesville advanced the call movies, the reflecting the diverse economic prospects of cost cutting these countries.
Well the 1 part of who we kind of the developed countries with improved health metrics and the additional critical support of Codexis to vaccines and kind of look forward to more normalized economic activities, while developing countries are still lagging because with the wolfson from delek dynamic entitled of financial conditions.
We sit back of the carpet.
According to the argument of the global economy was exit the gross expense than in 2021, and 4.9% due to the rise in 2022.
The 2021global forecast is unchanged from the April will talk us, but to adult setting of the reserves.
Prospects for the emerging markets and developing economies have been marked down for 'twenty, 1, especially for the loved to me as of yet.
By contrast, the focuses for advanced economies is the revised up.
The results reflect the pandemic developments and changes in policy support.
The net head of global growth for 2022 was upgraded by the <unk> 5.5 that said the rising largely from the focused upgrade for advanced economies, particularly in the United States.
Which is expected to grow by <unk> 49 per se.
China and India are expected to grow at the still very reasonable by 1.7% of 8.5% of suspected.
For 2020 city global Goodall of he is expected to be around 3.5% of healthy level too.
Looking at the dry bulk trade growth and based on Clarksons <unk> the 'twenty 'twenty 1.
We put the.
So we see that the demand growth expectations continued their output to object to the 2.4 points of EPS for this year.
For 2022, and 'twenty 'twenty 3.
Expected dry bulk trade to grow at the moderate space of 2.2 per cent and 2.5 percentage of spec.
Which I personally think is very conservative if global growth as expected by the IMF. Another major of institutions the remains at elevated levels.
Please turn to slide 10.
The oil the total book as the percentage of total <unk> up until July of 2021 stands at $6.1 per se.
Is it still around the lowest levels of exceeding the last 25 plus years.
With the current towards the book and continued demand sales for the coming years, we expect the fundamentally supported and continues to rebound in the dry bulk markets of the next couple of years of disease.
Please turn to slide 11 for the dry bulk fleet over the view.
According to Clarksons fleet growth in 2021 will be at 3.8 per se.
Taking into account of scrapping of love the fleet changes okay.
We got we come to this 3.8% this is less than the demand the goes and supporting the case for the spill strengthening of the market.
First of the enhanced due to the logistical bottlenecks we are experiencing.
The order book is currently around $6, 1 per cent, which could imply that sort of scrapping and slippage we could see in medium of fleet growth in 'twenty, 2 and 'twenty 'twenty 3.
For 2024, new batches of this has to be all of the at some point as otherwise, we could see rates and prices sort of passing EBIT the previous super cycle of debate if demand of sorts out.
Please turn to slide 12, where in the.
Summarize our outlook of the dry bulk market.
The global economy continues at the Sun phase.
Despite the new variance of COVID-19 of the June we'd submit delay, but will likely not stopped economic growth.
Some of them are several infrastructure projects have been the mouse, but haven't yet been implemented.
The dry bulk market because of strong trajectory of the back of highly supportive conditions in the commodity markets, having reached 11 year highs in the June 2021.
While the other means could hold firm or at least by excellent carbon price because the of the logistical leases.
The soft and medium term outlook look positive, especially of the order book remains the lowest bad debt.
Moreover, the liberal use of Blue chips in 2022, and 2020, Sidney I would expect it to be minimal due to lack of available slots in Cps.
In addition, the lack of clarity for the fuel of the future as the.
Not knowing the optimal shippable, even 5 years out makes the placing of venue.
And in certain of the position.
Okay.
The recovery in dry bulk volumes alongside the limited supply growth and positive global you commented all of the sentiment should translate to further improvements into 2022 and likely beyond.
However market conditions could remain volatile as the number of risks remain.
The events of course of the Covid pandemic and also about the call today.
Let's turn to slide 13.
The left side of the slide shows the evolution of 1 year time charter rates of Panamax dry bulk vessels since 2000.
As of July he is the 1 year time charter rate for Panamax with capacity of $75000 deadweight tons.
The strength of $4000 per day.
The highest it has been doing the last years and approaching the levels last seen in 2000 and debt.
The dry bulk market has been none of the firm footing since the beginning of the year and we expect the strength to extend in the upcoming quarters, we'd set of cyclically stronger than the first half of the year.
As you can see on the right side of the slide the current price of the 10 year old Panamax vessel is that other $22 million.
Over the past year dry bulk prices have gradually been increasing.
Exceeding the historical median the liabilities levels, but still significantly lower the prices sooner in 2000 of bed.
With the continued strengthening freight rate environment, we would expect you see asset values increase even further.
Okay.
In this environment, we had of course capitalizing on the strong market by of course being significant savings the cleaning.
Speaking of cash coffers, and generally strengthening of balance.
That's free liquidity in case of significantly from Mexico that envelope, we are evaluating how best to use it for the benefit of a sample of this.
It can be of the flow of the debt and preferred equity reduction further investment purposes set of buybacks I mean to some degree of is almost probably a combination of some of the above.
We also continue to evaluate the opportunities for possible combinations with other police focusing especially on using of status as a public company, which can provide significant advantages of the value.
Let me now pass the floor the CFO fastest system the need to go over a lot of at least by lots of highlights the most of these days.
Thank you very much interest in this.
Good morning from me as well, ladies and gentlemen.
I will now take you through our financial highlights for the second quarter and first half of 2021 and compared to the same periods of last year.
Next turn to slide 15.
For the second quarter of 'twenty 'twenty 1.
Then the reported total net revenues of $14.1 million.
Presenting the 251% increase over total net revenues of 4 million during the second quarter of 2020.
And this was the result of the fire.
Time charter rates our vessels earned during the period.
The addition of vessel we acquired in the middle of the second quarter of this year.
The combination of reported net income for the period.
$2.2 million and net income attributable common shareholders.
1.9 million.
As compared to a net loss and net loss attributable to common shareholders of 3.4 million and $4.2 million respectively for the same period of 2020.
And the other financing of course for the second quarter of 2020, you are among the 2 half of media compared to about 6 million for the same theatres of last year.
Depreciation expenses for the second quarter of 2021 amounted to $1.8 million as compared to $1.6 million for the second quarter of last year and again. This increase is due to the probably the number of vessels we own during the second quarter cash.
Okay.
Adjusted EBITDA for the second quarter of 2021 was $9.2 million.
And negative EBITDA level of -1.3 of median reported during the same period of last year.
Basic and diluted earnings per share attributable to common shareholders for the.
The second quarter of 2021of course.
83 cents per basic and 81 cents per diluted.
Compared to basic and diluted loss per share of 1 dollar of 96 cents for the second quarter of strength of demand.
Excluding the effect on the income attributable to common shareholders for the quarter of the.
And the realized loss on derivatives and the loss on debt extinguishment the ads.
Adjusted net income.
The net income attributable.
The common share for this was $6.6 million compared to the loss of $3.90 million for the second quarter of last year and the adjusted earnings per share attributable to common shareholders for the quarter ended June 30 of 2021were to $81.
Basic and $2.76 of diluted.
Well this year compared to an adjusted loss per share of $1.73 basic and diluted at the same period.
Thank you Andy.
Usually security analysts do not include the above items in their published estimates of fair earnings per share.
No.
Look at the numbers for the first half of 2021.
The company reported total net revenues of $22.7 million.
Randy.
50% increase of a total net revenues of $9.1 million during the first half of last year, which again was the result of both the high.
Time charter rates of our vessels and and the.
Additional vessels we acquired.
So part of the period.
The condom unit.
Net income for the period of <unk>.
$3.1 million of net income attributable to common shareholders.
The 2.4 million.
This compares to a net loss of $6.1 million and net loss attributable to common shareholders of $6.9 million for the first half of 'twenty.
You guys another financing cash flow refresh versus 2021 amounted to $1.1 million compared to 1 point of median for the same theory of you took last year.
Depreciation expense is for the first half of 'twenty to 'twenty, 1 where flu of 1.4 million compared to $3.3 million tons.
2020, again, it would be higher due to the addition of actually we own.
Adjusted EBITDA for the first half of 2021 horse kind of pinpoint 2 million compared to a negative 1 million reported during the first the conference 2000 Quinn.
Basic and diluted earnings per share.
Pivotal to common shareholders for the first half of 'twenty 'twenty 1.
$1.03.
The 1 dollar in 1 sense of respectively.
Compared to basic and diluted loss per share of sales.
And free for the first half of 'twenty 3.
Excluding the effect on the earnings attributable to common shareholders for the first half of this year.
The unrealized loss of of derivatives and the loss on debt extinguishment.
The adjusted net income attributable to common shareholders was $7.9 million compared to a loss of $6.2 million during the first half of last year.
The adjusted earnings per share.
Have you been able to common shareholders for the first half of this year, where free dollars and 40 cents basic and $3.
Donaldson of 33 cents per diluted compared to a loss of $2.76 per share basic and diluted for the same period. The first half of 2020 as I mentioned earlier secured channel is typically not include.
These adjustments in their published estimates of fair enough that's right.
Let's now turn to slide 16 to review our fleet performance.
We'll start our review by looking first at the fleet utilization rates for the second quarter of 2021 and debt.
And compared to the same period of last year.
As usual our utilization rate is broken down into commercial and operational.
During the second quarter of <unk>, 'twenty, 'twenty, 1 and 'twenty 'twenty, our commercial line utilization rate was around 3%.
Our of progression of utilization rate for the second quarter of this year was $99.4 per cent compared to 99, 9% for the same period of 2.
Yeah.
On average we operated 7.
7 point of care to 7 vessels during the second quarter of 2021 average.
And you can average time charter equivalent rate of 22006 guns in the $14 per day.
Daily earnings rate debt is 3 times higher when compared to the average earnings of $7297 per day of.
7 vessels and the during the second quarter of last year.
Our total daily vessel operating expenses, including management fees general and administrative expenses, but excluding drydocking cost average about $6467 per vessel per day during the second quarter 2021 compared to 6001.
In the third it runs all of those progression per day for the second quarter of 2013.
If we move farther down the table, we can see the cash flow breakeven hey could we hit during the second quarter. This year, which takes into account very both net expenses crossings or an expense loan repayments and the push of our preferred dividend payments.
The Pos.
As for the second quarter of 2021, our daily cash flow breakeven rate was about tens of thousands new problem of 13.
I think the almost per vessel per day compared to $11800 per vessel per day for the same here.
The 'twenty, mainly because of lower dairy costs and expenses in Q.
Let's now review of utilization rate and the remainder of the figures for the first half of this year.
During the first half of 'twenty to 'twenty..1 are commissioned the utilization rate was at 100% and your parish of utilization rate was 99, 7%.
Compared to kind of the person commercial and preparation of utilization rate for the same theater force here.
The average.
2021of the first half of the year, we operated 718 vessels.
And the average time charter equivalent rate of 18008 grams of savings of $9 per day compared to 7 vessels that we operated last year.
<unk> 7000 for your kind of $90 per day.
Our total daily operating expenses again, including management fees G&A, but excluding of course for the 6 months period.
However, this year the first 6 months of this year amounted to 6000 of firsthand an $18 per vessel per day.
Compared to 6090 per fleet on the spear of vessel per day for the first half of 2020.
Well look again at the bottom of the stable to see our cash flow breakeven level, which for the first 6 months of this year amounted to 10000 seats kind of an $88 per vessel per day.
Compared to 11000 for fans and the $89 for the same period, the first half of last year.
Let's now move to slide 17.
This is a relatively neutralized we started usually gets in the previous earnings presentation and we included it here to provide to our shareholders and investors.
To assess the earnings potential of our fleet for the rest of 2.
2021.
The table shown in the slide there's 2 components.
The first the first does it.
Our fixed price contracts.
Noteworthy debt, except for the charter of block of farmer.
Vessel less lack of.
The vessel shaving fixed price contracts totaling about 100.
14 days.
During the third quarter and about a day since the fourth quarter over and above the charter of less luck.
We consider these to reduce as the markets performing very well.
The producing.
Producing had been expected to produce significant earnings for us.
The rest of our vessels are employed in contracts linked to the relevance of their size Baltic dry index.
Our calculator here.
Because of your shows the Super Index and Panamax Baltic Force portrayed as of August 2021.
And also shows how these index levels get translated to range for ships.
We actually display the final blend the trade for the open days for our fleet, which you can see right below the shoe panamax and Panamax for what it takes in the table.
You can see it turns out to be very similar to the index levels.
Based on these assumptions and by further assuming for simplicity.
65, <unk> per vessel per day for effect of Merit.
The expenses and G&A of course, and the 5% Commission rate 1 can estimate the EBITDA contribution from our fleet.
The final result is additionally, the adjusted for the for the FSA contract of 90 days per quarter for the prevention of of the.
Yeah.
We have entered.
I think with your benefits.
This reflects the panamax vessel in the Cleveland.
This shows the old presentation is meant to provide as I mentioned it to cash.
Later EBITDA for the remaining quarters of 2021.
Obviously, 1 can then the he's right here on the assumptions above the range to do that.
However, the who's who.
Not to observe the speed of the market rates for the rest of the year.
They are kind of indicate by the FSA contracts materialize.
The EBITDA will exceed what we reported in the second quarter by about 50%.
And the reserve.
The EBITDA contribution from the second half of 2022.
To be about double of that of the first half.
Let's now move to slide 18.
To review our debt repayment profile.
And the type of part of the slide we see our laundry payments as well as our balloon payments of our bank debt as of June 30 of 2021.
The graph on the top.
It does not include the sale of scraped it and the bridge loan so of the acquisition of Blessed the lack of the kind of theatres mentioned, but the <expletive>.
It does include the bank loan, we agreed to and plan to draw of these months to finance the vessels.
All the known as of June 30 of 2.
2003 range, 1 we get and outstanding debt of about $62 million and let's figure includes the sale of scheduled and the remaining bridge loan.
As you can see true the graph, where we're going to make about $4.2 million of debt repayments. During the remainder of 2021, and we have an 8 million balloon payment at the end of the year.
Which is collateralized by 3 or 4 of Panamax vessels.
These balloon payment in 2021 is well below the scrap price of the vessels to collateralize it.
We anticipate it will have no issues or finance you kick. The fact, when we're in the process of doing so.
Again from this chart, we can see that we have of declining level of loan repayments over the next 4 years of course, assuming that the balloon payments are made as shown.
Another balloon payment coming due in 'twenty 'twenty 3 of about $11.3 million, which is collateralized by 2018 comes from my capacity of <unk>.
Of course, when these balloon payments are financed the revised non profile will reflect that.
I'd like to make also of weak not here on the cost of funding.
The average margin of our debt as you can see from the common and the high part of the slide is about 3.3 per cent.
Assuming the LIBOR rate of about 3% on the top of it the cost of our senior debt is estimated to be around 3.6 per cent.
Including these figures the of course of the preferred equity the.
Average blended cost of our non equity funding would be around 4.4% cash of the end of the last month.
Regarding the preferred equity I would like to highlight the following the 3 million net redemption that we made in the first quarter of this year, we have agreed to reduce the dividend hey, some of the preferred day because these 2.8 per cent per annum.
The cash until January 2023.
At the bottom of the slide you can see also the projection of our cash flow breakeven levels over the following 12 months and the breakdown of it.
<unk> is expected to be around 11200 of therapy on the dollars per vessel per day.
Let me now move to the next slide Slide 19.
Wherever we can see some highlights from our balance sheet.
The slide gives you a snapshot of our assets and liabilities and the simplified way when the our asset side.
We can see that we cant cash and other assets.
June 30 of 2021 of about $19.9 million.
Of course in the Russia, China launch the care of our versus the book value of which amounts to about the founder of an 8 million, making our total book value Okay.
About $127.9 million.
On the liability side, our debt as of the end of the last quarter stood as I mentioned of 62 million, which approximately represents 48 per cent of the book.
Book value of our assets.
Our preferred equity stood at about $13.6 million, which represents another 10.7 per standard.
And we have remaining liabilities for about $8.4 million or 6.6% of the farm book assets.
That leaves us with the net book value of $44.6 million, which translates to 16.9 dollars per cent. However, the.
Market value of our fleet is significantly higher than its book value and we need to make certain adjustments to get the better estimate or the value of the COVID-19.
We estimate that there should be.
End of June.
2021 of the market value of of the age of vessels, regardless of the AUM to be in the range of 142 on the hunt.
And then in the 45 million.
That is 70% to 75% higher than the book value.
The resulting in an estimate for our net asset value per share of about $29.
At least.
Non of our share price has recently increased our stock currently trades below that level and we believe our company investing in our company. It presents an opportunity with significant appreciation potassium.
And with that I would like to turn the floor back to other theaters.
Thank you guys. So let me now open up the flow of any questions you may have.
Thank you very much ladies and gentlemen of a reminder, if you have a question. Please press star 1 on your telephone keypad and wait for your name.
The amount.
Our first question for today is from Tate Sullivan from Maxim Group. Please go ahead.
Alright, Thank you all.
For me of reviewing 1 of your comments on the Newbuild market <unk> I think of present Slide 11, net New York What did you say about 2023, I think you mentioned that of an urgent need to start building new vessels by 2023 based on that chart, but then those new vessels when the enter the market for at least a couple of years or can you read.
The timing of that kind of quick.
Okay.
Yes, that's true.
The I think that a because of the or because of the topics of the book for 'twenty 2 'twenty 3.
The very low Ah if demand stays strong it remains quite strong.
Yeah.
We will have the sort of the joke seats. So at some point to recap the stock all of the.
The new medicines that will come in.
In 2024 onwards.
The because we will have a lack of seats. So I think this we will see more vessels being more of the during the next 18 months.
Okay, but not.
But the impact on the near term rates has has not appeared yet or at least has that started to of peering and what youre seeing in the SFA is available.
For 2022.
Yeah that the.
Is the gradually increasing not fast enough I think it probably in the kidneys faster, but the of course.
It will depend on the on the other things as well the the.
Dan week the.
The the logistical issues that we may be facing because of that and the the global goal of today. So it's very difficult to project. The future what is relatively easy to see is the yogurt. The the book for 'twenty 'twenty, 2 and 'twenty 'twenty Covid. The Liberty is extremely low.
No.
Yes.
And then thank you for putting in the EBITDA calculator slide again with about $40 million of.
The EBITDA in 2021 I was just interested in rolling forward to 2022, I mean is the FFA market liquid enough for you to start locking in rates. Besides of the ships you have on fixed contracts going in 'twenty 'twenty..2 we're still early to talk about the rates that you could start fixing for 'twenty.
Sure. The SFA is illiquid them up for somebody who wants to play the FFA markets for 2022.
You can find the caliber of its debt.
But there is 2 things 1 of the we feel that the steel.
Lower than what we will see the.
The late in the year, so weird loyalty lives they came and protect some of those levers the day plus the FSA is kind of of the significant the.
Issue that you have to both the.
Lot of collateral.
In order to do it unless it's a trade.
And if it's true.
It removes the games do you have to be you have to be increasing the collapse of the.
So it takes up a lot of cash needs. The other ways to free to all 4 of the road of harnesses to fix your level of 1 year time charter rates.
Of which does.
It does not consume of the sex.
Our liquidity.
Great. Thank you and 1 more for me task. The task is for the use of cash.
The reach in the current quarter and maybe I missed it maybe it was some netting out the amounts but the blessed luck was the 12 million acquisition, but the.
Then the cost of the acquisition of amount in terms of the cash outflow of $7 million.
Will there be another outflow in the <unk> based on the seller credit timing or how does that easily.
The difference exactly the seller's credit day that we had the seller selling flow on essentially which I think we paid in July.
This year. So the remaining 5 million will be seen in our in our cash flow statements and ex Florida.
Okay perfect. Okay. Thank you very much.
Thank you Dave.
Thank you Mr. Sullivan. The next question is from Poe <unk> from Noble capital markets. Please go ahead.
Good morning here of students good morning Carter.
Paul.
Cities could you talk about what's happened recently and the contacts cigarette panamax.
Panamaxes have been a little weaker than the ultras and so it's sort of what's going on there and then also could you give us the view on sort of the next 6 months and the.
Context of whether we're going to see the typical seasonality in the market or sort of what what you're what you're anticipating in the fourth and fourth and first quarters coming up.
Tough questions are tough questions for you.
It's real easy to talk about what has happened that what will happen in the next 6 months.
The Max is a has been the very strong the Julien the fed.
So the.
The year due to the edge to the good.
She claims that we had seen.
Up to June and this is quite simply that the little bit a in this last month.
That probably explains the little bit of the soft the makeup of the pandemic smart the best compared to the other much smaller.
Which we haven't seen their yourself the new debt.
Yeah.
So going forward the of course 2 weeks of V. In Q4 are.
Historically you guys.
As I said that you repeat the seasonally stronger periods of the first half.
It remains to be seen exactly what will happen will happen, we kind of of the the huge the Boston makes the thought it creates the because of the pandemic of the logistic issues and the time it takes for books, the decided the bachelor's and and the all of that on 1 side of it.
We filed for the pivotal moving.
The milestones of the west of economies.
Out of the apparel, it's very difficult to debt.
To say exactly how the next few months will the will of paying out but.
I would think that we would expect the.
Stronger than AIDS to continue.
Will it be at much higher the 1 lot slower of those saying, it's where it needs to be kind of a little bit.
All of them the same day.
Difficult sales.
Great. Thanks, and can you talk about the.
The decision or what happened with the Alex P. It's fords accident and the C Max pool.
And.
How you're viewing that I mean, potentially or are you kind of continue to let it.
The work in the spot market or is there a view that you potentially would put that on the time charter.
Okay.
I think we decided to take it out that's the what was it in the car T is because of we feel that a weekend of employees that sounds a little bit better in the sports market at the these high levels.
So that the the text of it wasn't the need that there if at some point, we'd decide to fix it again for the year or something like that that remains to be seen what type of decided to do such things yet.
The aging spot, we fixed it sort of a set of Sky would go into Brazil ourselves for the next 2 months, which is usually a net of your where you kind of of that get high charter rates, but.
We'll see how it goes but there is no intention the right now to fix longer period, we may though.
We seek to each of these.
Get the little bit more kind of a.
Or maybe 6 to 1 of 2 more seats of our fleet for the year.
Yearly periods.
Okay, Great and then talk to us.
I know you are in discussions on the new round of.
The 12 million to take the.
You know to refinance the balloon and add some extra or you know it looks like liquidity of 4 million can you talk about that decision and then also you know in the context of the extra liquidity and then also would you happen to have the terms get as far as you know the amortization of balloon payment that might be.
Associated with the new 12 months.
It's actually no of course I can talk for a true.
It is.
Interest paid forward I think well there with the increasing values, we can actually refinance the 8 million using call. It 2 rather than 3 vessels as collateral and the drawing alone of about 9 million and so we would be able to repay if we wanted the colon and COVID-19 free.
She per unencumbered and we May end up doing is repaying the portion of that is covered by those 2 ships and extending because of the lawn for the third 1 you are right, indicating that we might have of 4 million of additional liquidity, which would be very useful as we are looking at possible investment opportunities and total use yourself.
Of France.
I think the longhorn looking cases of for each of full year of term loan with a normal.
Amortization going down too.
I'll describe the value.
Okay, Okay, Great and then Eric.
I was curious if you could just talk about you know the comment about potentially you know.
With the.
Public security of that you potentially but.
The.
You know looking for acquisition or opportunities to merge or acquire you know for companies that are looking to exit the at my.
B private now can you talk about you know.
The the strategy well.
Would it be more oriented towards renewing the fleet or would it be you know, adding you know sort of looking at your current fleet and the saying you know we were looking for of like fleet. I mean can you just help me understand sort of what you're strategically how the fleet might change over time.
Yeah, it's it's difficult to say what I can say the because we don't have any projects that we're looking at the right now so it's difficult to say and of course, we have there to look at every opportunity that the.
You know could it make sense for all stakeholders, but the.
Practically we are focusing on the size of the seats that regardless of the old put all of the Super Max up to come so the Max that is the the area we feel comfortable with.
So we're looking at projects that are.
We are the open to look at all of the vessels and the new of the vessels, we would like the idea of somebody who wants to contribute to the best of into Europe of Die in exchange for Sam sort of some cash to to go with head out of the eye.
The that vessel as long as it fits these.
Criteria that they just don't view of who and how does the of course it makes finances sales.
So we are open to such deals which have discussed things in the past we have not cognizant of the many discuss the though.
Without any bought the about the contribution of the World a group of vessels into the company.
Great. That's very helpful. Thank you so much.
Thank you. Thank you.
Thank you Nathan other questions at this time I will now.
For closing comments.
Okay. Thank you everybody for this discussion today, we will be back with you in 3 months' time to discuss the Q3 results the famous cure of the enjoying the sum of it.
Thanks, everybody bye.
Ladies and gentlemen that does conclude the call. Thank you all for your participation you may now disconnect.
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Okay.
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