Q2 2021 Tsakos Energy Navigation Ltd Earnings Call
Thank you for standing by ladies and gentlemen, and welcome to the Chico's Energy Navigation conference call on the second quarter 2021 financial results, we have with US Mr. Tucker's I'm, a poke Lu chairman of the board Mr. Nikolas, Tsakos, President and CEO, Mr. Paul Durham, Chief financial.
Also I missed the judge sort of Oakley Chief operating 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 at which time if you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced I must say.
Is your thought this conference is being recorded today and now I pass the floor to Mr. Nicolas Bono's as president of capital link Investor relation advisor of Tsakos Energy Navigation. Please go ahead Sir.
Thank you very much and good morning to all of our participants I'm Nicolas Board knows the capital link Investor Relations advisor to Tsakos.
Sure.
This morning, the company released publicly.
That's where our results for the second quarter and six month periods ended June 32021.
In any case, we do not have a copy of today's earnings release, Please call us up to 126617566 or email us at 10 P. M. At the capsule in Dot Com and we will have a copy sent to you by email right away. Please.
No that parallel to today's conference call. There is also a live audio and slide webcast, which can be accessed on the company's website on the front page at Www dot.
D E and M Dot G R.
The conference call will follow the presentation slides. So please we exited.
To access the presentation slides on the company's website.
Please note that the slides of the webcast presentation will be available and archived on the website of the company. After the conference call also please note that the slides of the webcast presentation I user controlled.
That means that by clicking on the appropriate buttons that got moved to the next part of the previous slide on your own.
At this time I would like to read the Safe Harbor statement. This conference call and slide presentation of the webcast contains certain forward looking statements within the meaning of the safe Harbor provision of the private Securities Litigation Reform Act of 1995 in vessels are cautioned that such forward looking statements involve risks and uncertainties, which may.
They affect ten's business prospects and results of operations and before turning the floor over to Mr. Robert I would like to say that we are particularly happy to be hosting this conference call today from New York, Dr. Southwest is in New York and actually I would like to congratulate him that a couple of days ago.
She was inducted into the International Maritime Hall of Fame in a big ceremony in New York Portland.
Organized by the maritime muscle so that was one of the.
Fourth of New York, and New Jersey, So Oh, congratulations and the lives of people with Us in New York and without any further delay I would like to buy.
Hello.
Of cycles.
Michelle Haber Lu. Please go ahead Sir.
Thank you Nicolas.
Good morning, and good afternoon to everyone. Thank you for joining our call today.
We clearly are in the worst period in the market in recent memory.
Despite this the results that we showed today.
Indicate that we've managed to stay relatively unscathed.
Proving once more that.
So we have a robust operating model.
We continue down a well proven strategy or Kansas city, because new investments in accretive charters and with.
Blue chip customers as always.
We continue selling all divestments to maintain a young fleet.
We continued keeping a substantial portion of our vessels on time charter, albeit at a lower percentage to ensure that predictable.
Revenue flow uncovered cost while steadily increasing the sports content.
Position 10, four as expected a strong rebound in the market.
All this while maintaining a very comfortable cash position.
The answer is really paying debt servicing obligations maintaining dividends.
And containing costs.
No nothing really new just tweaking the same model according to.
What's that the market.
This has served us all along well.
And and for this again, we need to congratulate Nikolas tsakos and his team.
For for for the focus on the excellent performance.
And now I'll pass the floor to Nicolas Douglas. Thank you very much from my side.
Good morning to all and thank you Nick.
Wishes and thank you chairman.
We would like to be congratulated. The also when we would stop making the V C.
The big profits, we hope, but wouldn't be caught me shorten but thank you for your good words.
We have been using <unk> modeling.
Difficult environment in the difficult environment. It has not only been the market.
Conditions, but the operational conditions at the Oh 70 vessels have been facing.
Navigating through the pandemic around the world and we would like to think of the whole operation deeming the men and women onboard the ships, but actually beaten.
The Sun care you know.
Heroes and recognized heroes, well, if we're spending more and more time on board their ships away from their families than than actually ever before.
Two very hoarse, Tyler, but they shouldn't nodal Shaw from nobody was true religion in some countries.
And from our side, we have tried to do the utmost to succeed in Vaccinating. The majority of them and also making sure that the at any cost and you will see the short show or sometimes in our bottom line.
Navigating older vessels are a significant cost to friendly.
Patricians areas like a I would say the Philippines and Greece.
France in order to make sure that the people who would go back to the Repopulation.
We'll get a would get them safely on board. So it has been a I would say every store.
Strange.
At this time, we try to keep a clear head through this storm and so far.
Oh, good Chairman said there so good the horizon seems to be brightening up.
Have all.
Look these are at the fourth quarter of 2021 or is it time that thinks it would start normalizing or we are looking at the other.
Markets that we're participating like the dry cargo market then.
Part of it.
Taking a S. Taking advantage of today's environment of the bottleneck that is happening.
The being here, we can see the majority of our clients are actually looking to put their hands on as many vessels.
As they've gotten which is something that he's reminiscing or for the first and second quarter of 2020, the beginning of the pandemic. This makes us a pill.
Positive for going forward and then we have seen no show their rates.
Having bouncing significantly from the bottom all you have to do is to shape the market reports and on the bolt on the Baltic Index of Vlccs are with an average of less than a hungry dollars on a year to date basis are today in close to 20000. So I think that's a significant jump.
Which has to do with seasonality, but also from the the thirst for energy around the world. So I hope that the fourth quarter, we started much better then.
The rest is going to lead us to calmer and calmer waters in the meantime.
I am we are.
Our modeling or for taking advantage of the crisis to renew the fleet.
<unk> state of the art the vessels for delivered six on order them.
Six of them also do you have a fuel for us it's a significant turn in a big dramatic designed third and for the future. So we're very proud about these very proud for our new building team for designing the vessel and the sudden and going forward with our charterers hand to hand.
When you add up or shipping then hopefully we would be able to announce in the next couple of quarters much better results.
And with this I will hand the.
The the floor to Mr. Sato.
What do you want to give you a you know the past, but I think Georgia also talk to us about the future because I think that's that might be a bit more pleasure. Thank you.
Thank you Nicolas and good morning to all of you joining our earnings call. So let me start by saying that we're currently seeing in them and and bouncing freight markets.
Size vessels compared to the summer months and a year to date average rates.
Spot rates for Vlccs and Suezmax has on average are currently at four to five times higher than the year that a year to date.
And we expect this improvement to continue across all vessel types as we enter the seasonally strong fourth quarter.
The anticipation of this improvement because we consider it to be sustainable considering that oil demand continues to recover from the demand loss as of last year Global oil inventories built last year continued to draw and below the five year average in all the major economies and geographies.
Mobility statistics in the USA, China, and Europe are improving and the stronger demand recovery of 2021 will continue next year, when we expect to be at the pre COVID-19 demand levels by the end of 'twenty to 'twenty two.
OPEC plus has now restarted almost 50% of the initial 10 million plus production cuts and is that being from almost 400000 barrels a day every month and feels that 5 million barrels per day.
As supply cuts are phased out which is expected to happen at the end of the third quarter of 2022.
Based on the current OPEC plus plants and of course supply of new tankers continues to be at low historical levels. While the global fleet is getting older and new upcoming environmental regulations unexpected to phase out a big part of the aging fleet.
Let's move now to the slides of our presentation in slide three we see that in then since inception of 1993, we have faced for a major crisis.
But this time the company thanks to each operating model, which is built to be crisis resistant has come out stronger.
We started with four modern tankers 1993, and with guidance, we have a pro forma fleet of 71 vessels with an average annual growth of 15% in terms of deadweight tons in the for decades, we operate.
In the next slide we see the pro forma fleet and its current employment for five.
We have a combination of vessels in fixed time charters and flexible employment contracts.
Charters with profit sharing seaways and spot ratings that capture the market's upsides.
Dark blue color vessels 20, and the slides are on fixed rate time charters.
The light blue and red colored vessels or 69% of the fleet currently in the water have exposure in the markets upside.
That means that <unk> is very well positioned to capture the positive tanker market fundamentals and the recovery in freight rates.
And of course, we took advantage of the low rate environment to bring forward a number of scheduled a special surveys will have these vessels available once the targets my tanker freight market rebounds.
And it seems.
Fleet modality.
Is a key element of our operating model during the first half of 2021, we concluded the sale of three of our older tankers in 2003 built panamax tanker in to 2005 built suezmax tankers, which will be replaced with six new building slash two options that will enhance the company's environmental footprint.
The four plus two new building Aframax tankers LNG powered dual fuel vessels the search as investments in the company's history.
In addition, we are building one moored DP two shuttle tanker and one LNG carrier.
All fair six new buildings are coming with long term employment attached.
In slide five the left side presents the all in breakeven of course for the various vessel types, we operate in 10.
As you can see the cost base continues to be low and during the first half of 'twenty. One the revenue generated from the time charter contracts was against sufficient to cover the company's cash expenses.
Paying for all vessel Opex overheads chartering course alone interest.
In addition to the low shipbuilding costs, we must highlight the purchasing power of TCM. The continuous cost control efforts by management to maintain a low opex average for the fleet and the low general and administrative expenses, while keeping a very high fleet utilization rate quarter after quarter, despite bringing forward scheduled.
Dawkins, we achieved an overall, 92% plus utilization for the fleet.
And of course, thanks to the profit sharing element a cornerstone of tense chartering strategy for every $1000 increase in spot rates. This has a positive impact of 62 cents in the annual EPS based on the number of 10 vessels that currently have exposure in the spot market.
This reduction is and it is also very important.
And that is part of the capital allocation strategy of the company since our debt peaked in December of 2016, we have repaid $340 million of debt and repurchased $100 million into shares of step up of preferred shares we had outstanding.
In addition to bringing down debt growing the company through timely sale and purchase of new building acquisitions, we continue to reward shareholders with dividend payments, we paid 10 cents per share dividend to the common shareholders on July 22021.
Dan has rewarded our company's shareholders with almost half a billion in dividend payments are on average 26 million per annum as soon as the New York stock exchange listing in 2002.
Looking at the markets global oil demand continues to recover.
From the unprecedented collapse because of the Covid pandemic and the measures to contain it.
2020 was the first year of negative growth since the period of great recession in 4017.
Year end demand was approximately $14.0 million barrels per day below the levels of the 2019 here in demand figures of approximately 100 million barrels per day.
Most of the largest wedding zips and aviation fuel, we expect demand growth of five 2 million barrels per day for 'twenty, 'twenty, one and $5.0 million barrels per day growth in 2022.
Barring no unforeseen developments with that quality of audience, we would most probably reached the peak or at all demand levels at the end of next year.
Yeah.
On the global supply front on the global supply front OPEC plus producers continue to manage supply with discipline almost half of the 10 million barrels per day production cuts have returned to the market.
The plan is for a monthly increases of 400000 barrels per day, which OPEC plus reviews and adjusting their monthly scheduled meetings as.
As we enter the winter in the northern Hemisphere, and peak seasonal demand the release of additional barrels from the market.
Would be a positive effect of the positive kind of the catalyst for tanker demand and tanker rates.
Yeah.
Slide nine with oil demand recovering let us look at the forecast for the supply of tankers. The order book as of September stands at around 340 tankage over the next three years or six 8%, which is the lowest.
Order book in more than 20 years at the same time, a big part of the fleet 1500 vessels or almost 70% of the fleet is over 15 years.
And 382, tankage or seven 5% of it got caught in tanker fleet are currently over 20 years of.
Timing of environmental regulations could push more tankers approaching or above 20 years to go for scrapping.
And the next slide we see that 2018 was the highest scrapping years of records with $30.0 million deadweight ton removed from the market.
Last year and the year before as expected scrapping was lower we had a strong August this year and with scrap prices at very high levels 600 lightweight we have so far seen 275 vessels.
I think the market or 10.4 million deadweight ton.
With more environmental regulations, and seven 5% of the global fleet above 20 years, we expect the scrapping numbers for 'twenty to 'twenty, one to increase helping further the supply side of the business.
To summarize.
Oil demand, we see strong refinery.
We see a strong recovery to continue.
On the supply of oil mostly production increases of at least 400000 barrels per day by OPEC plus are.
Bringing more categories to the market at the time when global oil stocks are below the five year average levels.
And demand is increasing store was the pre COVID-19 levels on the order book in supply of tankers.
Their books to current fleet ratio is at historical low levels, a big part of the fleet is reaching phase out H, which points to tighter supply of tanker for the next 18 to 24 months.
Our company's balance sheet, we have built a crisis resistant operating model, we have a modern fleet well positioned to capture the market developments as we enter the seasonally strong fourth quarter. We continued to reduce debt. We have a strong balance sheet and strong banking relationships that will allow the company to take advantage of the opportunities that will be presented.
And lastly, looking at how other shipping sectors are doing freight rates and asset prices for both containers and bulk carriers continue to be very strong and if past history can be guidance for the future. There is always a time lag for the Tor positive spillover effect to the lagging shipping sectors intra tankers should be the next shipping sector to enjoy.
Get better freight rate environment supporting they have always increased activity for our major end users for a long term business, which in our view is a vote of confidence that the recovery of the market is nearby with the expectation of much better days ahead, I will ask Paul to walk you through the financial highlights of the second quarter and first half 'twenty.
'twenty one.
Thank you George.
Yes.
So despite the continuing stagnant market in quarter two.
Then what was able to generate gross revenue.
Nearly $167 million and over $275 million in the half year.
Much of this was due to our ability to secure almost full utilization.
With two thirds of the fleet on time charter and despite eight vessels undergoing drydocking and then.
That includes four vessels go toward for dry docking.
Of some significance in these times of squeezed liquidity for tankers time charter higher but still enough to cover our charter in costs, our operating expenses, our overheads and our cash finance costs.
During the six month period, managing to reduce debt by nearly $87 million.
That's still left 30 to about 65 vessels in quarter two to operate in the spot market where.
Were they successfully earned revenue of over $65 million covering all voyage expenses, which had been impacted by a large increase in fuel costs due to rising oil prices.
Oh, so she'll consumption increased certain vessels completed the time charter and moved into the spot market to find more lucrative earnings where possible.
In June Suezmax, Arctic and Antarctic was sold for a total of $45 million and carrying a modest loss of $5 million.
But free cash of almost $17 million after repaying related loans of $27 billion.
Excluding the loss on the sale of the Suezmax is net operating losses were just $7.1 million and the overall net loss was held to a restaurant with relatively decent $21.0 million in the circumstances.
Oh daily TCE per vessel linked quarter to average $17240, a strong performance compared to market average T C. Given the difficult conditions in the dry dockings.
Tens overall expenses have been held down by our technical managers since the prior quarter to rising in total by only 4%.
Operating expenses increased by $3.5 million on the addition of a third of the vessel.
So due to dry dockings, which this quarter included an LNG carrier, which especially pushed up expenses temporarily.
But left the vessel in perfect condition to continue its time charter to a major LNG trade.
Oh, we could dollar also contributed to higher costs, although we expect this to reverse as the U S economy continues to revise.
So average opex per vessel moderately increased but in the six months it fell to just over $7800 Wow G&A costs stayed at exactly the same level as in the prior quarter too.
Bearing in mind that fees management fees have not been increased for over 10 years.
Finance costs fell, 46%, mainly due to reduced debt and lower interest rates.
And margins.
While the cost of our debt has remained at only 2%.
And also positive bunker hedge valuation movements amounted to over $3 million.
And at this point I'll now hand, the call back to Nicolas.
[laughter].
Yeah.
Thank you Paul.
Who you will report them with even more enthusiasm a big profit shoes, sometimes soon.
Well I.
I think as a it is clear it has been a very trying period than it has been a trying period for all of us.
And sometimes the drying video on the business segment and it has been several studies.
People who have suffered.
Around the world.
So it is a very good to be able to stay safe and with there and maintain our course with a clear head under these circumstances and finally.
When I start seeing.
Things, becoming better on the period and the spot rates, we're expecting a Chinese golden week.
To start the.
Thinning out and people are getting back to work next week.
We hope to see through that even more.
[laughter] strongly even stronger rates.
Going forward.
And with this I would be very happy to answer any questions that you might have thank you very much.
Thank you as a reminder, if you wish to ask a question. Please press star one on your telephone keypad only if your name to be announced he wished to come to your request. Please press star two once again, if you'd like to ask a question. Please press star one.
Your first question today comes from the line of Ben Nolan from Stifel. Please go ahead. Your line is open.
Hey, Thanks, So I've got a couple of I wanted to start with the the vessels that you ordered these or do feel I believe they are in the press release that dual fuel LNG and conventional.
Am I, a strategically I guess in the that will be the question of where I'm headed on this is obviously the most of what you do is on long term contract, but it is it.
Is it fair to say that.
Given sort of the uncertainty with respect to fuel and emissions that at the moment you know if you're going to be building anything it probably is going to be dual fuel or was this a specific request of your of your customer and and and maybe you're less.
Strict on sort of how you are what you would be looking to build.
Thank you. Thank you very much Brandon.
We will talk about it.
Say strategic decision not to invest the money.
Conventional buildings anymore.
So it is a waste.
Our strategic partners are going hand to hand.
Taking a dive into future technology I would say, it's always better when you dive into somebody's out there.
Dive into it by yourself.
We are always uncertainty.
That's what the future would take us the way we speak today and that is that our the way. We see today is that the dual fuel and it seems to be the medium term solution from now until 2015.
As you know we are building ships. We are building ships that would last 20 to 25 years and that's why we took this decision. So it it it is a decision based on the future and not the decision made on a piece of business that game, we have been offered.
Quite the number of Oh.
Our attractive business from conventional vessels and we decided to pass because we have the model then was created in your most of your two youngest you'll remember back in 1993 on the after them up over the opened 91.
We had to convert our the whole world's tanker fleet now between 1992.
<unk> thousand.
Into the double double design and that's why then was Oh. We started this in very very soon away before time, we had the full W. W. W Fleet and I think that's what we're looking to in the future with this new technology.
Okay. That's helpful and then sort of following on to that.
One of the again fueled challenge is a it is the potential of of carbon taxes, and they're not too distant future and and as I understand it that it would be borne by the ship owner.
Hum.
That could in theory present, a problem if you have a legacy time charter contract.
That doesn't.
Isn't built to compensate for that how how do you think you are at or how do you manage through that if there is in fact, you know whatever it is $60 a ton carbon tax or whatnot.
How do you think that will be borne or or or mitigated or handled on your part.
But most of our time charter contacts we have foreseen.
I would say I think this is something that I wedding, my ex Intertanko Hot [laughter] I would.
Most of my other colleagues to caution on the long term charter to make sure that these would be shared between the charters and the owners I think that is fair.
I think it is a unfair for owners to carry the hold burden.
Something like this the owners are paying for the new technology. We are building the new ships, we are making the investment as we did with the double double design.
30 years ago.
But then I think it has to be.
Sure do.
With Oh, the end users in and what's out there and so I think.
So in our long term contracts and we have quite a few of them are at we have Oh, we have a resetting arrangement.
Okay. That's helpful.
And then and then lastly, just just out of curiosity, you know I mean, it's.
I October 7th I mean, the last tanker company to report was two months ago, what any color as to why we're so.
The mine schedule.
Yeah, well it it it had to do a lot that we were planning finally after 'twenty long months to be here in the United States and do a road show.
We wanted to do this on the on our own our results are the the immigration legislation that COVID-19 would not allow us to come and we were trying to come the end of August.
And the only reason we were able to I was able to get the permit to come was because of my award for the Hall of Fame.
Two days ago. So we said that it would be good to be here in New York could do there does that show up immediately we could do a road show not to be in the block B a true.
That's why it was a it was postponed it like My award I was supposed to be getting this award that they see it made much 'twenty 'twenty. So.
I'm glad I got it alive.
Well it.
Congratulations and welcome to the U S and I was I I travelled internationally last weekend and it felt nice to to use my passport again so.
Anyway I appreciate it thanks, so much Nick thank you.
[laughter].
Thank you. Your next question comes from the line of Mike <unk> from H C. Wainwright. Please go ahead. Your line is open.
Oh, good afternoon team chalk goes and congratulation it goes to the award and the new contracts for the Aframax is.
Thank goodness alright.
Alright, a couple of questions just a follow up on those contracts.
I know you stated a few.
But that should be $315 million a.
Can you give me a little more flavor on what kind of targeted returns on the additional cost over a regular aframax newbuild that the the the LNG capability in wood cost and it looks like there was somewhere in the ballpark of six years contracts I don't know if you can comment further on that.
Yeah.
Yes, I think that's a I think.
That's the that's a quite quite accurate what you have said that I think would be.
The we weren't able to.
Achieve are the contracts are because of our long relationship should and being I would say one of the companies that we have been up.
Oh, it was faithfully towards shipbuilders.
Not really jumping from country to country. So that's another.
You know we have we have put our continued trust two Korean shipbuilding.
And an hour after the new building team has been there since the nineties without without moving because we keep on building vessels there.
Which gives us at least the comfort that are technologically in this new environment, we're not taking too many.
Too many chances are of course, the cost we were able to achieve the three explosion of the steep prices.
Our environment and I think today those ships have a an additional.
15 to 20 per cent value at least a 15, 4% in value as we go because steel prices as you know have a gone through the roof as most commodities have been going through the roof. So we were glad we were able to build really the previous four vessels.
For the U S major oil company in those six.
But he is up but is prices for new buildings, but still there is a significant the.
And other than at least that 10% to 15%.
Higher price due to the very complicated and exciting new technology.
Okay. Good.
As far as timing and financing of these vessels.
As far as timing and financing of these vessels.
You know.
Your comment on you know, what's kind of delivery timeframe you would see.
Well I, we wouldn't be where we are what we we are very certain that we want to start taking delivery of those ships. So every.
Every quarter in 2023.
And but in the meantime, we still have quite a few deliveries Uh huh.
Right now a lot into the money in a very big way, we how about LNG coming for delivery in in.
In January.
Maybe the energy and she's I'm unless you've seen what has happened to the LNG markets and to the LNG value show I think that the vessel today is at least 30 million more we could flip here.
$30 million at least more than what us.
We have paid for her which is a good situation to.
To be into ended and then later in the year and in April we have a our next Brazilian and therefore with Oh shuttle tanker. So we will have things to do from now until the <unk> the <unk>.
Do you Wanna fuels are really becoming for delivery.
Alright, just so should we assume that you already spent the 10% down and then and then just a regular down payment performance payments back in 2022.
Alright, and the last question and I'll, let you over to somebody else to ask questions about the cash balance have not declined.
Declined here you still have a significant cash balance my my my question is can you still sleep at night without a $40 million on the balance sheet.
Well I I've been I've been criticized in the past, we're having too much cash in the balance sheet than there is in and now you can see why it was the correct. The correct thing to do and yes, I think where are we we are as I said.
We are hopeful that with the mark.
The market that they're making the most of our obligations.
Hum at out of the way don't forget we had to we do not have any more obligations for oh for the delivery of either our shuttle tankers or or our LNG.
These are reminded that we have paid the company.
Takes very seriously discuss management, we have reduced debt from the peak in 2016 of close to one $8 billion.
Well right now.
Two at 1.35, and that's all from the company's Gus and on top of that we have repaid the 100 million over step up preferreds. So we are reducing significantly our obligations and we're enjoying very low we're enjoying a very low.
That the environment, which today is under 2%. So I think our walk a cost of capital. It is just very very low and that's why we feel comfortable and do not forget that we we hope, but we have a clue.
Those two.
To believe 2 million a 1.7 million.
Light weight tonnes of steel.
So our our whole fleet.
000 that in our fleet is about 1.35, which is supported by an excess of a billion of scrap.
Scrap values.
Still a very very very very young fleet. So you know with all this I think the board referred to it to a comfortable situation in today's market environment of course.
Yeah, that's an interesting way to look at it that Nicolas Thank you for answering my questions and congratulations to your award.
Thank you very much.
Thank you your.
Next question comes from the line of Jefferies. Please go ahead. Your line is open.
Hey, good morning team chocolate. So this is Chris Robertson on for Randy how are you.
I think you'll find out or even besides of the Atlantic.
Yes, congratulations on the award as well I guess just following up on the Newbuild questions that were asked.
Is it fair to say that you put down payments on four out of the six and then can you discuss kind of the the timing for the option period on the additional two.
Yes, I guess that that's that's the situation and I think it will be for January.
2022.
Okay and then.
Can you talk about any of the other systems are aside from the propulsion obviously.
That will be maybe a new design or upgrade that will be able to comply with the new phase three requirements for the E D I.
Well I think I have a I hope we have a when you bring in the part one on the line, but I think from Oh. This is going to be and engineers, a dream and I you know I hope one of my daughters. So she's threatening to study engineering. So I think it should be in a very good time to follow up the construction of those ships.
For all of your it seems I don't know who actually wants to become an engineer, but that's it's good to have someone in the family business, but it is going to be a you know really breaking new ground. It will be based on what we already experience on other LNG vessels. So I think we have the knowledge of operating of those ships due to Oh.
Similarity of the over the LNG vessels that are you all or sometimes tri fuel ships are the challenges are going to be the containment system.
For for the gas, which are you know in the design profile.
Would it be in tanks, instead of being allocated spaces on deck, which which happens in the retrofit the vessels. So I think we're going for the whole.
We are having a.
Very very demanding and high class out there we're going to go for the whole or for the whole ship and as we said that I think are we.
We're excited that we're starting at this phase of the new menu design of ship. So again against the very long charter as we did back in the 1998.
When we build a you know against the 50 year contract a number of our first a 1996 are first the double double ships.
Sure I guess moving onto the ATM program can you talk about kind of the breakdown between the preferred shares versus common shares and how are you guys thinking about that in terms of the the balanced strategy between the two.
Yes.
Yes, Oh, well I think we have we have a made a breakdown.
Yes. It is.
Oh about the ATM program.
I think we have a about 20 million have come from the come on in 15 from them from the from the preferred.
So far.
So are we.
We find the ATM program is a very efficient and inexpensive way to create liquidity in the market and I think it would be it will continue.
And they're measured in a measured way.
Wei.
And can you can you briefly comment on the remaining authorization in that program.
I think it's George shuttle Galore, if you're listening he he's the one who's keeping all of you.
What it does is it 15 million or close to this level.
Approximately another 15.1515.
Gotcha. Thank you.
Alright, I think that's it for us. Thank you guys. Thank you very much.
Thank you I will now hand, the call back for any closing remarks.
Well.
Again, it has been a real pleasure to be able to be back in the.
In the United States.
And hopefully have I spend a little time seen now that we have our all of our results out well with our shareholders. Later this week and next week.
We have.
And then the new phase of development from development for the company. We expect this appraisal development to take us to a much greener environment and we always follow the environmental culture in a big way and we're very excited about about this.
And the signs of our markets are looking finally, better the numbers have not just in feeling and we will hope that this will continue and then the next thing that next quarter, we will have a much better news. Thank you for all your support are following the company and please Uh huh let.
Nic Board knows Theres no one the team if you would like to have any one on ones now that I am finally free to come and visit thank you very much.
Okay.
Thank you.
It does conclude our conference for today. Thank you for participating you may all disconnect.
Yes.
Yeah.
Okay.
Yeah.
[music].
Yeah.
Okay.
[music].
This conference is being completed.
Thank you.
Okay.
Yeah.
Yeah.
Yeah.
[music].
Okay.
This conference is being completed please disconnect now.
Sure.
Yes.
[music].
Okay.
Yes.
This conference is being completed.
Yes.