Q3 2021 DHT Holdings Inc Earnings Call
I must advise that this conference is being recorded today on when she gets a third of November 2021.
With us on our conference call today, we have to spend moment is half yield co CEO and Laila Halvorsen CFO and now without any further delay let me hand, you over to Laila Halvorsen. Please go ahead.
Thank you.
Good morning, and good afternoon, everyone welcome and thank you for joining DHT Holdings third quarter 2021 earnings call.
I'm sorry.
He co CEO.
Hudson.
Forecasts of World economic activity.
Prices and oil trading patterns anticipated level of new building and scrapping and projected drydock schedules.
Actual results may differ materially from the expectations reflected in these forward looking statements.
We urge you to read our periodic reports available on a red.
<unk> of course system, including the risk factor and these reports for more information regarding risk slapped with eight.
As you all know wait until and historically week time to market, which has impacted the results for the third quarter of 2021.
Looking at the piano highlights epitaph for the third quarter was 14 million a netbook came in at $21 million.
The result includes the game of $1.6 million related to the sale of DHT Condor and.
And a non cash game and fair value related to interest rates derivatives of two or $3 million.
The company continue to show a very good cost control.
All fixed for the quarter came in $19.2 million equal to $8000 per day, while average opex year to date that equal to $7800 per day.
CNA for the quarter, what score $4 million.
And the third quarter of 2021, and the company achieved an average TCE 16 tops and 300 per day, while the average TCE for the first nine months of 2021 amounted to $22400 per day.
For the fourth quarter, we have booked income 70% of the fleet at an average rate of 27 million dollar per day.
This includes 25% of the fleet on time Shafter at an average rate of about $32000 per day.
Moving over to the balance sheet.
The quarter ended with 52, four and a half million dollars of cash at quarter end of the companies availability answer both for revolving credit facility.
Plus countered eight and a half million cutting total liquidity at $245 million of September 30th.
Financial leverage it's about 30% based on the market filings for the ship.
And that that curve, a total of 17.7 million at quarter end, which is well below current scrap value.
Looking at the cash bridge the quarter started with 52 million of cash January generated according million dollars in there.
Ordinary that trip payment in cash same current amount is two 7 million $10 million was huge related to share buyback Kevin dividend payment.
2 million was used for maintenance scrubber capex.
Change a thing or can capsule amount of 211 million proceeds from sales of vessel or.
30 million on the quarter ended with 64, and a half million dollars of cash.
The change in working capital for the quarter, it's mainly a result of a slow sometimes doctors being retail Ebert bunker thing purchase back from structures.
And now over to capital allocation.
For the third quarter, a total of $10.4 million will be returned to shareholders.
Previously announced the company bought back.
23 million of its own shares at an average price of $5.47.
The shares were tied to upon receipt.
In addition to this share buyback the company will pay a dividend of two cents per share for the quarter.
It will be payable on the 23rd of November to shareholders of record.
The 16th of November and Mark that 47.
Seven consecutive coordinate cash dividend.
Year to date, the confidence returning $42.7 million to shareholders 13, and a half million dollars in cash dividend.
29, 2 million and share buyback.
With that I will turn the call over to define.
Thank you Lord.
Here in this library will offer a lot of pets, Laura catch breakeven levels.
And the girl off to the left.
Cash breakeven levels for the fourth quarter.
The full fleet needs to generate $15800 per day.
Flip 10 calls for <unk> for the company to be cash neutral during this period.
When the simulated administration and the girl from the right you will see that the full fleet pleased to generate 14 postal two of those four ships 10 postal six during the first call for 2022 for the company to the cash neutral.
This is the D. S T a robust structure to protect the bold site without giving away the upset.
Then we'll discuss Ed Gordo program.
Continuing our efforts in the two prior quarters, we have again taken advantage of the weeks for Clark to bring forward Drydocks.
During the third quarter, we recorded 85 O four days in connection with Drydocks.
We expect another hundred to 235 days during the fourth quarter.
The most recent and current for ibooks are extending in time as quarantine rules for ships and crew entering the shipyard abuse and charla was typing, resulting in additional weight can cope.
Additionally, when vessels Komoto dry book there are typically handicapped in this book work for their first which will have to offer discounts, possibly encounter wasting time to commence trading.
Hence our scope earnings these law's quarters were negatively impacted.
For the first three quarters.
Capitalized 33 million in for Drydocks installation of scrubbers in Dallas water treatment systems.
Our team is doing a great day for illegal by year of drive 50% of our fleets, making these ships ready for what we expect to be a bit their market next year.
For next year, there are only three ships scheduled for grown ups.
The way we are positioning the company is a reflection of our constructive view on the market.
On the left side they illustrate the time charter vs spoke to explore for for our fleet.
You will note that the time for it to book is called me off for work has been very beneficial levels building market exposure into strengthening from the relatives.
On the right the estimate the discretionary cash flow through VST at different grade levels.
Has the next phone call is poked earnings are 50 posts per day for 2022.
Estimate that the discretionary cash flow could be 286 million.
Equal to one dollar and 78 cents per share.
This revealed the operational leverage and significant up sites that we have to take place.
So two rounded up we have a large quantity fleet and a strong and healthy balance sheets with 30% interest bring depth to total assets on the mark to market basis.
<unk> group and what we believe to be a grilled this time streptidine matched with a proven ability to manage the business cycles.
We introduced our capital allocation policy from the second quarter of 2015 and it has remained consistent.
Well the market, we believe that the worst is behind us and see a market recovery in the making.
The recovery.
At a measured pace with key elements in the oil market that drives article struck through you.
These elements are one recovery in global oil demand post the corporate shook in particular related to increased mobility.
Two.
Crude oil and the increase have you been global to pre corporate levels.
And three OPEC, plus responding with additional barrels to the markets.
The positive dynamics, Ken amongst others be read through improved refining margins.
So we think we are in great shape shape and art students for recovery.
And with that we opened up for accumulate operated.
Thank you, ladies and gentlemen, as a reminder, if you wish to ask a question today. Please press star and one on your telephone hour.
Our first question today comes from the lineup for any given soft Jeffrey. Please go ahead, you're lying is now open.
Howdy team DHT how's it going.
Okay, great how effective.
All all as well despite the Astros last night, but that's okay.
So I guess looking at slides six.
[noise] returned well over $10 million to shareholders right and that's despite negative earnings in <unk>, an artsy <unk> now how does that amount decided on and secondly for the share repurchases look like you repurchase almost $7 million. There. So how was that amount determined and was that just a result of shares.
Trading well below NAV at the time.
It's both a fixed formula for this and the buybacks are somewhat optimistic at the same time there are some very clear to the trading rules. How we can avoid back horoscopes in the market and lastly, we are price sensitive. So and then this is what we are healthy could meaningfully viewed at the time limit.
The shares were trading at these levels.
Very happy that we have that opportunity.
The amount is somewhat less than what we did in the prior quarter.
But I think also law everybody should not expect us to continue these buybacks us the shares are now trading in line with it maybe more more or less.
Yes that was that was.
My call out there so but the two cent dividend that through the expectation now until you get more meaningful profitability.
As soon as you all know we have a couple of vacation policy, returning minimum 60% of ordinary net income to shareholders.
We have a history of overpaying <unk> printed the red numbers.
And then assuming that all of that the recovery that several people were expected to be in front of US then of course, there's a potential for paying more than two.
Lying there has to be this formula.
Okay, and then second question I'm looking at your fleet and biography gotten rid of here all the ships now with the Condor sale complete.
How did you you're free currently is there any appetite for maybe some charter ends are secondhand acquisitions are at this point with the rolling off time charters are you pretty happy with your current kind of operational exposure and to what should be a better market in 2022.
Firstly.
Look planning to sell additional ships at this side of the recovery. We've spent a little time and effort now in Drydocking ships us as you've seen.
Getting these ships ready for four different earning environment that hopefully a experienced these here so but I think you should expect that the during assertion markets or at the Taylor law that we will consider to divest some some further some further tonnage.
We acquired three.
Ship five year olds equal shapes with scrubbers earlier this year and.
Reset to sort of try to acquire more but the prices appreciate that too quickly frankly.
Frankly, so we felt that levels became too high too bye ships. So we decided to take a step back and asset prices. So modern ships. The circular sort of held up so you should not expect us to to acquire more and more ships at this point.
But when it goes through sharpening in.
We don't like that for a few reasons one is that.
Whether it's available at the time charter, it's essentially 100.
Represent finance the whole acid related to short period or longer period.
Well.
So disturb our cash breakeven focus it will certainly increased us meaningful if you if you were to do that.
And lastly, when your time sharply ships.
Look in control of the technical management and the vetting.
System on the ships.
And that's something which is very important for us in serving our customers that we are in full control over what to do on the asset side on the crew and everything so that smoked in those locked in that will ultimately in the carts.
Got it made.
Thanks, and good to see and VLCC rates getting some life here. So hopefully that continues thanks again, thank your fingers crossed it.
Thank you Jan next question today comes from the line of John Chapel of Evercore Iced tea.
Please ask a question.
Thank you good morning, or good afternoon.
First question is on the time charters, obviously, you have a few rolling off now in the fourth quarter and I understand nobody wants to re up contract coverage when you're still bouncing along the bottom, especially after a period of time, but you've done a pretty good job balancing the fleet and clearly the recovery in the spot market is taking longer than anyone expected what's the ability.
And the market right now for maybe shorter term charters six to 12 months and what are the current levels.
Out there if any relative.
Relative to the spot market today.
That's a good question.
The short term time charter is our looked very different from from from the spot market on the lower voyages. So today.
Equal scrubbers ship will earn say 20 coastal close mindless for the long voyages and.
In the short term charters are priced at the marginal paid into that but we think the optionality that you give away a loose by doing those charters tofu, they don't really make much sense to us.
For a 12 or 24 months.
Amongst the sharp curve for a similar shift you could do that in the in the low low 30000.
33, 34 35.
Something like that so.
Certainly improved a bit the legacy to reflect slower some of these clients seeing what is what is ahead then they want to have.
Have some shifts in their portfolios.
We know through chasing down these opportunities, but we do have some core customers that might have an interest in extend some of these charges that are coming off. So we will have to look at those.
Transactions when the time is right.
They are closer to expired, although charters, but.
We are the first flirtation service company, it's important to have some.
Estimates that to do repeat business with and so forth. So let's see but there is something we typically do.
Local quite into politics Mitchell.
Okay, I mean 33 to 35 for that period and given the fact that the recoveries lasting are taking a lot longer than anyone would have expected to recover seems like a pretty good business and of course, you don't put the whole fleet away at least provides a bit of a buffer leads to my second question.
Which is more market related.
It feels like every quarter, we talk about how things are going to get better and fundamentals are improving but the next quarter's still going to be terrible.
Both you and me have been expecting a bit of a recovery bye now, especially as went to November.
Can you speak to maybe why this is taking longer than what gives you the confidence that at some point imminently, we're going to hit an inflection point for the market improves not just off current levels, but meaningfully off current levels to warrant maintaining the spot exposure into next year.
Sure.
I think we've been a bit more modest in our.
Market expectations on maybe most others and I think even lost earnings call. We said that the recovery is slower taking a bit longer time, then maybe it will most people expect.
So of course, they're corporate shortfall, so brutal and we're not getting back up.
Oil consumption levels stuff <unk> Covid, if you look at what they're sort of leading agencies are forecasting we have to wait till the end of next year to sort of hit post levels.
During this period you would have seen the fleet grow. So we are more ships today than what we had just pre corporate.
So there is an imbalance in the market and the scrapping has been very very quiet. This load of these older ships have been engaged in a bit more subtle shade the trades.
So although scrapping is picking up a bit now and I think we count 17 ships, having left the fleet so far this year.
Some of those came off with storage, but you see some of the owners of the ships buying sort of slightly less old ships. If you like to replace those storage units. So Theresa is a little bit of a retirement going on but there's not enough.
So so if you look at this whole recovery with a bit of a slow moving train out of the station and we still think sort of the fundamental saw right, but there is no X factors in so far that this getting any sort of terrible too early cover it.
You could of course have a lifting of sanctions, we think that with the change to gain quite quite dramatically actually if if you are on come circumspect in the full extent, but.
The the Bulls.
Expect to them could be back in the second quarter of this year.
I guess the bears on the wrong, we're looking into next summer so I'm in no better position to to view that but that is a potential sortal event that can that can change things quite quite a lot.
Okay. Thank you sign.
Sure.
Thank you. Your next question today comes from the line of Oman knocked off Clark's in Securities. Please go ahead.
Thank you.
Yeah, I just wanted to follow up on the.
The discussion with John.
You do definitely some quite a bit more constructive on on next year.
And definitely more than how you sounded three months ago I think you mentioned.
You DHT felt the recovery was going to take longer than most people anticipate maybe just on that discussion here man to gauge perhaps.
If you let me your level of constructive myth.
All of the equal because there's always going to be something that changes but.
The current plan with OPEC, plus adding 400000 barrels.
A day each month for up until September October of next year. When we think of a recovery all again all else equal do you think we could start to see a recovery happening happening sooner than the tail end of the production edition or could it happen.
Or do we have to wait until basically one next fall.
Coverage and the color.
And you thought.
I think that's a comment that.
Recovery, so far is measured.
We expected to continue to be measured for a little while longer but.
We are now it for more than ships in the spot market 20000, maybe plus even so.
And at this pace.
You will have sort of a profitable levels coming up local too far out.
There are some photos.
Smaller things happening in the market.
Will have impact beyond just OPEC processing barrels.
I guess as you and most people have seen the rocketing gas prices is now having some impact on what's going on in the sense that the gas is also used by.
Refineries to these set of fries.
The cruise that they consume.
And as to gas is now very extensive refiners are looking to buy more light sweet.
To avoid that sort of a medium to a heavier solar stuff and.
And use gas and these type of oil is predominantly being loaded from from the Atlantic. So you see maybe some Tom mileage <unk>.
Expansion, though just in so compared to what we have seen in the last 12 to 24 months. This is maybe a smaller and smaller items that is really all those things that we need to sort of push.
Push the needle in the right direction.
Okay. Yeah. Thanks, Thanks for that because I didn't want to follow up and I think you may have answered that to some extent.
It was going to see if you have noticed from your vantage point, if charterers, perhaps we're acting any differently.
<unk> with high energy prices and inventories continuing to come off the special effects approaching winter.
He was going to see if you if you have seen any noticeable changes weather.
They are looking to take shifts on charter is John had sort of been asking about or if they're looking to fix chips on the spot market maybe earlier.
Then we've been used to seeing.
Anything there.
This is definitely more interest on the time factor vote.
So that's so that's for real and I think Thats Reflectional, where it is being traitors or real end users. So they they would like to have shapes or they need need to have ships and this is I think simply reflectional their view of the market and they expected activity that they will have so that's definitely happening. So I think that's sort of.
Leaving indicated if you like.
The overhanging ships have reduced quite dramatically. These last few months I'll throw a pick started to add barrels. So this means that the sharpness, although entering the market more so than normal pace.
Trying to fix ships I think under the took there is also a time when the overhanging was much greater so there is a change in all of this dynamic but my point is that is not going through the rapidly, but it is happening steadily and measured and eventually so you call. The tipping point Avenue can will get some some protection on.
On rates.
Very good alright, we'll keep our eyes open for that tipping point, Thanks man.
Thank you. Your next question today comes from the line of mock misfire of Hte Wainwright. Please ask your question.
Yes. Thank you.
Good afternoon.
Follow up question on on the market.
And that would entertain some time charter from some of the customer.
Time for a covered plug Dennis Hyatt.
The last 12 months.
On the preferred model going forward.
I guess, we agree that the market.
Probably hasn't hit the bottom on which of the covered going forward as their preferred level uhm lead to.
Maintain the upfront.
Dr Cumnock contract.
The profit sharing.
We are sinful business guys right. So we look at the moment.
So when rates are as meaningful levels, we try to engage.
As much as we can really in time charters as you saw last year. We did a lot of time charters is very rewarding rates.
This summer it hasn't really been very exciting. So I think you should expect that.
Rates are sort of a meaningful levels again, depending a little bit on the trajectory of the generals port market, but then we will certainly seek to increase our coverage again, there's no fixed percentage.
If you have to keep in mind that.
Time short term market for large tankers liquidity is rather thin is not that much business. If you look on the fleet as a whole so hence it's important to have customers in your portfolio that do engaged in time charters on whether you have the opportunity to do some ah repeat business and so forth and we feel we are in that.
So so once we see meaningful moment, we will we will seek to engaged again.
Alright, Thank you I'm just one.
One question on the dry dock been messing up.
Yeah go on.
You can drive off next year.
Thoughts or what.
You have to move.
Them off or what are you, possibly thinking there are one you want to do them.
With the market. So the 10 the plan on the schedule is the one for the first half and two in the third quarter. So.
So.
Could be that we for.
For some reason to have an opportunity to bring forward, depending a bit on the market and all of that in your capacity and equipment is going to be delivered and so forth, but the 10th of data.
<unk> schedule.
Alright, and just one one final question just on the cost side with.
Have you seen any changes in your you mentioned that there can increase in time to drive Daft, but in general acquire the daily optics now.
You see that account normalizing here or.
Alright, and more cost for corporate related expenses.
I think we managed our op excited that quite well during these times, but there has to be an additional cost on time related to crew changes in particular.
And these crew changed their stories.
Phil.
Very big challenge for the industry I think every shipbuilder as got.
Crew that is.
Staying onboard longer than originally planned normally plan or have to take some time and deviations into ports recruit chain include changes.
As possible.
And the pencil nationalities, so it's still a very very difficult task.
Hats off to the guys. We have that are running our approving but.
So this marginal costs, but suse laila address that we have a 7800 a.
A year to date on or off excited and that concludes all the overhead close to the shore based off of as well related then the technical Department is essentially so so I think that's still a very good number.
No I agree. Thank you for the flavor at all no. Thank you that's all I know.
Sure. Thank you.
Thank you. Your next question today comes from the line of penned note or no Stifel. Please go ahead.
Hey.
Good afternoon gas.
I really I just have one question.
And it relates to sort of some of the noise that's been going on in the market. Obviously two of your competitors in the VLCC side have been or there's been some.
Noise about potential consolidation am curious.
Guys have done some of that in the past with BW and.
I'm curious where you stand in in terms of saying, Okay. Well are there are there benefits to economies of scale either from our shipping perspective or capital markets perspective, and are you at all interested in that or more sort of curious observer from from them.
Far.
We think from Ah sort of industrial perspective, we.
We are certainly big enough Lolo our customers are <unk>.
Chasing us for more shapes or.
No complaining about a fleet of being big enough is certainly a big enough, we have a meaningful footprint in the market.
I think on the debt financing side.
Financing ourselves that equal will maybe a better term season that then the companies that there are size or even larger.
I think in the equity markets, we our stock is relative to underlying values is trading better than some of our bigger.
Competitors. So we're not sort of sold on this idea that <unk> is going to change over this.
We tend to joke a bit.
The the noise so.
Conservation is multi driven by bankers, who wholesalers will peace on this so.
Not necessarily.
Shareholders and the.
We have a very handsome Google rollers in our company and the normal then Lara sort of chasing us to make the company bigger just for the sake of being bigger or trying to.
Trying to quantify it will take a loan mixed with that can be you might have.
Some benefits on G&A because.
You are even bigger you can be.
A bit more efficient.
That's not the big item on the piano line in the shipping companies. There are other things to kind of more important. So so that being said I think we've demonstrated in the process you alluded to that we acquired some cushy pulling in 2014.
W. W fleet and 17.
So you are always open to what can be good opportunities.
To be a good transaction for the shareholders of DST.
Okay.
Is helpful straightforward and incidentally I.
You guys are always helpful on straightforward and don't.
[noise] make things relatively easy for so I appreciate that thanks.
Thank you.
Thank you we do have one more question at this time, but it's a reminder, if you wish to ask the question, it's tall and one on your telephone.
Question comes from the line of Robotics is there a marine Savannah police Oscar.
Hi.
I'd like to talk a little bit about the day and the fact that you guys have.
To reduce the debt and a little over a year from over 900 million down to 525.
If you see the market.
We're anticipating we're at the bottom it is going to turn up and the profitability starts to get like it was in early 2020.
Do you see again more aggressive debt reduction or are you just satisfied with the normal amortization rate.
Well I think.
Our.
Our actions in the past to do an.
Prepayments so that to strengthen the balance sheet was of course, the result of rewarding markets and when we allocate capital.
A good portion of it will go to the shareholders, but we didn't use the older portion to either invest from the time it has been right or to reduce that I.
I think you should expect more of a say in the future. This in this business is certainly very cyclical volatile business and I think it behooves the company to have our strongest balance sheet that you can have and maybe even lower depth to shift and what we have today to give you more flexibility. So so.
I think that should be expected this.
Wonderful.
Yeah, the year over year reduction in interest expense just screams about what a good job you guys have done and anticipating and taking advantage of the good times I compliment you on that.
The other thing I have a question on line I noticed that you built up quite a bit.
Your consumable inventory was that because in that fuels et cetera was that because of a lesser rate of business or because you anticipated the rise in oil prices and squirrelled away some additional inventory.
That's a very good observation, sir so so what did they say, it's essentially bunkers and it's.
<unk>.
Result of when we get shipped back from time charter.
The remaining bunkers on board on the ship and the customer returns to ship to US we have to acquire and this impacts then.
The inventory or the or the working capital in the company. So.
When we had much more smith pulp exposure in oil prices. It will also be oil price sensitive of course this will vary but we do not speculate on bunkers you don't buy.
Few Lola bunkers in anticipation or the belief that the rates will go up.
Because the freight market for tankers is based on what is called the world scale.
Bunker cost is sort of a included in that so and it's a very good correlation between that on the face level.
So we only volume bunkers, when we fix the ship so nothing sort of a speculative way or we don't have it also the hedge bunkers.
Okay, well you ended up doing real good job because it's.
It's nice to have that extra while the prices of oil have gone over $80 a barrel.
Thank you that's all.
Congratulate given imagine doing a real great job, especially continuing to reduce the debt.
Thank you Sir wishing a good they have.
Your next question today comes from the line of Chris Hung up whether research. Please go ahead.
Good afternoon is fine how are ya.
And good thanks.
I apologize for asking somebody asked earlier I got dropped a Q, Colorado, but were you guys able to break out the amount.
Based on the spot for two four and with the <unk>.
We can do that for you so for the queue for it's 59% that 13 costs with 700 per day.
Q and.
Uhm I see it in your press release that $300 million from D. N key for insurance can you tell me what this is for and how much we should anticipate for we're talking tax with the rough ranges with Ya.
So this is sort of a mutual of club breath and they build up a capital base that belongs to its members in the clubhouse decided that the park of these capital should be then returned to its owner if you like so it's a couple of reduction in the unit and we will be and talking to them.
In the range of five and after $6 million.
We expect that to be.
Received the in the first quarter of next year.
So we don't need tax could be in the in this sort of 25% range. So with all this has to be determined. So that's why we know if more specific in their press release, so pumped up.
The rest of us on the exact number but it could be in that range.
Yeah, No I understand that's that's super cool color and I guess this is like just a one time pad we shouldn't expect this.
Again anytime soon.
That is correct.
And lastly for the Drydocking program.
It looks like it's about 3 million or so capex per vessel is that a good run right for that to be in queue for into three and 2022.
I think you can follow up they'll find the dilemma that so the ships next year are different vintage there is less sort of equipment installation and stuff like that so so feel free to follow up directly with them.
Okay. Yeah, we will do thank you so much that's it for me.
Thank you.
Q and once again, ladies and gentlemen, it star and one on the telephone if you wish to ask a question. We do have one more question at this time just comes from the line of Michael Mouse Kharkov MRM. Please go ahead.
I appreciate it can you elaborate two two things could you elaborate on when you said, it's been with sanctions that could change the landscape.
In what manner.
And then the other thing is I was on a capital line conference with the tanker Ceos of yarn as I NSW on frontline.
And all of them said by the end of next year, they expect vlccs to be 40000, plus.
Based on basically some of the things you are noted in your press release, so wants to know what your thoughts on that too. Thank you.
So to your first question today.
Today, Iran is selling part of it or parts of their oil sort of under the embargo regime. So they have to sell it at a discounted price.
And they have to use ships that are willing to trade embargo Lloyd and they had to pay a premium for those ships. So these are the old the old banger. If you like that are involved in these trade.
The moment sanctions.
If sanctions gets lifted then that oil will be traded in the market that market prices and they will have access to safe at market prices. So we think these older ships that are involved in that trade. Then they will then the cost of infection trades, they will be alpha business and that oil will then benefit.
The rest of the fleet, which is sort of the normal fleet, if you like and and the older ships. We think will then disappear from the from the scene. So the net net the benefits of that is smaller fleet and more oil in the market. That's why they think this is a pathetic.
On the on the on the second question I've been in this game for 30 years.
Have looked prepared to give you that number.
Yeah.
[laughter].
You are hesitant to give the number.
[laughter].
Oh.
Nope.
The number but.
Wendy So give us these.
Opinions on direction of the market.
That is.
Jen and beliefs on.
So, let's see what how how it will play out.
Okay I appreciate it thank you so much.
Thank you.
Thank you.
You said no further questions at this time swaying back to Ya.
Thank you very much to everyone for Thanksgiving on these team wishing you all the good at.
Take care.
Does that complete all conference for today. Thank you all for participating you may now disconnect.
[music].
[music].
Good morning, and good afternoon, everyone welcome and thank you for shining DHT clothing.
<unk> 2021 earnings call.
I'm tryin' by the <unk> time.
Content.
Same day.
And relations.
Shall we let him go.
Financial Center.
Oh, Yeah no question.
The link to this time that can be found on August th tankers dot com.
Before we get started with today's call I would like to make the following remarks.
A replay of this conference call will be available.
Tankers dot com until November 10th.
In addition.
Press release will be available.
Okay system submit form 6K.
As a reminder, on this conference call, we will discuss matter.
I'm looking in nature.
Forward looking statements are based on current expectations about future events.
Clothing, tht prospect dividend Sherri attention that your payment.
For the tanker market in general.
Taylor charter high rates for Utilisation.
Well the economic activity.
Right.
And I am training pattern.
Dissipated into level 70 building.
And projected China schedule.
Actual results may differ materially.
<unk>.
Forward looking statement.
To read our periodic reports available on Ahmed.
Okay.
Including the risk factor and each of course.
Our information regarding risks that we think.
Thank you all know.
So I play lead time to market, which impacted the results for the same corner of 2021.
Looking at the piano highlights epitaph for the third quarter was 14 million.
Came in at 21 million.
Alright stop includes the game.
6 million related to this tale of tht counter.
Skin and fair value related to interest rates or anything.
3 million.
The company continued to show a very good cost control.
Thanks for the Coke corner came in 19.2 million equal to $8000 per day.
Average of next year to date is equal.
$800 per day.
Jamie for the quarter was 4 million.
And the Tech winter of 2021, and the company achieved an average TT 16.
Hundred per day, while the average TBE.
Of 2021.
$222400 Okay.
For the fourth quarter, we have booked income.
2% on the fleet on an average range of $27 per day.
This includes 25% of the fleet on time soccer.
The average range.
$2000 per day.
Moving over to the balance sheet.
Quarter ended with 64 and a half.
$5 million of cash.
Corner in the company.
Yes.
Halloween credit facility.
Uh-huh.
Total liquidity at $245 million.
<unk>.
Financial leverage superpower.
Based on the market.
Mhm.
<unk>.
17.
Conrad which is.
Karen.
Looking at the cash rich corner started with 52 million of cash sandwich generated accordingly.
Ordinary doctor payment in cash entrenched amounted to 7 million.
$10 million each related to share buyback and David.
2 million northeast.
Corporate Capex.
Changes in working capital amount until 11 million proceeds from sales.
$30 million on the corner ended with 64 and a half million dollars cash.
The change in working capital for the quarter, mainly Arris Tom Tom.
Sometimes doctors retail event.
Great.
Back from soft drinks.
Over to capital allocation.
For the third quarter.
$10.4 million will be returned to shelter.
As previously announced the company for.
23 million on its own shares at an average price.
$5.20.
The sheriff we're entitled accuracy.
In addition to the share buyback the company will pay a dividend to.
For sure for the quarter.
It will be payable on the 23rd November two shareholders on record.
16th of November.
That's funny.
Seven.
Q team coordinated cash David.
Yeah today at the company's returning.
<unk>.
To shareholders.
Half a million dollars in cash.
29, 2 million and share buyback.
We're not content colon just fine.
Thank you.
Here on this slide we will offer an update on our cash breakeven levels.
When the graph to the left you see our cash breakeven levels for the fourth quarter.
The full fleet needs to generate $15800 per day, thus hopefully 10 <unk> for the company to be cash neutral during this period.
When the simulated illustration and the girl from the right you will see that the full fleet needs to generate 14002 and a spot shifts 10006 during the first half of 2022 for the company to the cash neutral.
This is the D. S T way a robust structure to protect the bell site without giving away the upset.
Then we will discuss a dry docking program.
Continuing our efforts into two prior quarters, we have again taken advantage of the weak spot market to bring forward drydocks.
During the third quarter, we recorded 85 O five days in connection with Drydocks.
We expect another hundred 225 days during the fourth quarter.
The most recent and current Drydocks are extending in time as quarantine rules for ships and crew entering the shipyard we used in China has tightened resulting in additional waiting time.
Additionally, when vessels come out to dry dock there are typically handicapped in this book markets for their first wage and have to offer discounts and possibly encounter waiting time to commence trading.
Hence our scope earnings these last quarters were negatively impacted.
For the first three quarters.
Capitalized 33 million in for Drydocks installation of scrubbers unbalanced water treatment systems.
Our team is doing a great effort and evil by year and have drive 50 per cent of our fleets, making dealerships ready for what do you expect to be a better market next year.
For next year, there are only three ships.
Still drive ups.
The way they are positioning of the company is a reflection of our constructive you on the markets.
The left hand side, they illustrate the time charter vs spoke to exposure for our fleet.
You will note that the time struck a book is coming off for what has been very beneficial levels building market exposure into strengthening somewhere else.
On the right the estimate the discretionary cash flow and DST at different grade levels.
As an example, if spots earnings are 50000 per day for 2022.
To make that the discretionary cash flow to be 296 million.
Equal to one dollar and 78 cents per share.
This reveals the operational leverage and significant up sites that we had put in place.
So to rounded up we have a large quantity fleet and the strong and healthy balance sheets with 30% interest bring depth to total assets on the mark to market basis.
You have a consistent and what we believe to be a well defined streptidine matched with a proven ability to manage the business cycles.
We introduce our capital allocation policy from the second quarter of 2015 and it has remained consistent.
When the market, we believe that the worst is behind us and see a market recovery in the making.
Recovery is.
At a measured pace with key elements in the oil market that drives article struck <unk>.
These elements are one recovery in global oil demand post the corporate shook and particularly related to increased mobility.
Two.
Crude oil inventories, having been drawdowns, a pre corporate levels.
And three OPEC, plus responding with additional barrels to the markets.
The positive dynamics can amongst others be read through improved refining margins.
So we think we are in great shape shapes, and our tunes for recovery.
And with that we open up for cute operator.
Thank you, ladies and gentlemen, as a reminder, if you wish to ask a question today. Please press star and one on your telephone.
First question today comes from the lineup for any given soft Jeffrey. Please come ahead. Your line is now open.
How'd 18, DHT how's it going.
Okay, great how it affects us.
All all as well despite the astronauts last night, but that's okay.
So I guess looking at slides six you retired.
$10 million to shareholders right and that's despite negative earnings and <unk> and <unk> you know how does that amount decided on and secondly for the share repurchases look like you repurchase almost $7 million. There. So how does that amount determined and was that just a result of shares trading well below and add.
At the time.
It's also a fixed formula for this and the buybacks are somewhat optimistic at the same time. There are some very clear it's sort of trading rules, how we can buy back our stops in the market and then lastly, we are price sensitive. So and then this is won't be as healthy could meaningfully to do at the time.
Linda shares were trading at these levels and we are very happy that we have that opportunity.
The amount is somewhat less than what we did in the prior quarter.
But I think also law every voter should not expect us to continue these five access the shares are now trading a line that maybe more and more or less.
Yeah that was that was.
My follow up there so but the two cent dividend that through the expectation now until you get more meaningful profitability.
As soon as you all know we have a couple of education policy of them returning minimum 60% of ordinary net income to shareholders and we have a history of paying two cents civility printed the red numbers.
And then assuming though that the recovery that several people expect it to be in front of US then of course, there's a potential for paying more than to apply.
Applying this to be this formula.
Okay, and then second question I'm looking at your fleet in fact, he got rid of here all the ships now with the Condor sale complete.
Hi, do you free currently is there any appetite for maybe some charter ends are secondhand acquisitions are at this point, which are rolling off time charters are you pretty happy with your current kind of operational exposure and to what should be a better market in 2022.
So firstly.
We are not planning to sell additional ships at this side of the recovery.
Spend a little time and effort now in the dry docking ships.
Scene and getting these ships ready for four different earning environment that hopefully a experienced this here. So that the I think you should expect that the during such markets are at the Taylor law that we will consider to divest some some further for some further tonnage.
We acquired three Yahoo shape, five year olds equal shapes with scrubbers earlier this year and we are receptive sort of tried to acquire more.
But the prices I appreciate that too quickly.
Frankly, so we felt that levels became too high too bye ships. So we decided to take a step back and asset prices. So mobile shifts the circular sort of held up so you should not expect us to to acquire more and more ships at this point.
When it comes to sharpening in.
We don't like that for a few reasons one is that whether.
Whether it's available at the time charter, it's essentially 100% financing real assets, whether it's a short period or longer period.
It's.
So disturb our cash breakeven focus it will certainly increased us meaningful if you if you were to do that.
And lastly, when your time charter ships you are not in control of the technical management and the vetting.
System on the ships.
And that's something which is very important for us in serving our customers that we are in full control or what to do on the asset side on the crew and everything so that's not an that's locked in that will ultimately in the carts.
Scott.
Thanks, and good to see in VLCC rates getting some lightning aircell hopefully that continues thanks again take your fingers crossed it.
Thank you. Your next question today comes from the line of John Chapel of Evercore icy Asa's. Please ask a question.
Thank you good morning, or good afternoon. First question is on the time charters. Obviously you have a few rolling off now in the fourth quarter and I understand nobody wants to re up contract coverage. When you are still bouncing along the bottom, especially after a period of time, but you've done a pretty good job balancing the fleet and clearly the recovery in the spot market is taking longer than it.
Unexpected what's the ability.
In the market right now for maybe shorter term charters six to 12 months and what are the current levels out there if any relative.
Relative to the spot market today.
That's a good question.
The short term time charters are looked very different from from from the spot market a little longer voyages. So today.
Equal scrubbers, hateful or let's say 20000, plus my list for the long horses and.
In the short term charters are priced at the marginal paid into that.
We think talks knowledge that you give away a loose by doing those charters.
They don't really make much sense to us.
For a 12 or 24.
Month, the sharp curve for a similar shipped to you could they do that in the in the low low 30 houses.
Maybe 33 34 35.
Something like that so.
That's a certainly improved a bit and I guess, it's reflect slower some of these clients seeing what is what is ahead then they want to have some shifts in their portfolios.
We know chasing down these opportunities that we do have some core customers that might have an interest in extend some of the sharpest that are coming off so we will have to look at those.
Transactions when the time is right.
Closer to expired all those factors, but then.
We are first vacation service company, it's important to have some.
Customers that to do repeat business with and so forth. So let's see but that's something we typically do.
Local quite into politics missiles.
Okay, I mean 33 to 35 for that period and given the fact that the recoveries lasting are taking a lot longer than anyone would have expected to recover seems like pretty good business and of course, you don't put the whole fleet away at least provides a bit of a buffer.
It's to my second question.
Which is more market related.
It feels like every quarter, we talk about how things are going to get better and the fundamentals are improving but the next quarter still going to be terrible.
And that's both you and me have been expecting a bit of a recovery bye now, especially as went to November.
Can you speak to maybe why this is taking longer and what gives you the confidence that at some point imminently, we're going to hit an inflection point for the market improves not just off current levels, but meaningfully off current levels to warrant maintaining the spot exposure into next year.
Sure I think we've been a bit more modest in our.
Market expectations, and maybe most others and I think even lost earnings call. We said that the recovery is a bit slower taking a bit longer time, then maybe it will most people expect.
So of course, they're Kobe chalk water brutal and we're not getting back at all.
Oil consumption levels stuff you will be covered if you look at what they're sort of leading agencies are forecasting we'd have to wait till the end of next year to sort of hit those levels.
And during this period abuse you have seen the fleet grow so we have more hits today than what we had just pre corporate.
So there is an imbalance in that market and the scrapping has been very very quiet. This load of these older ships have been engaged in a bit more subtle shadier traits.
So although scrapping is picking up a bit now and I think we count 17 ships, having left the fleet so far this year.
Some of those came up with storage, but you see some of the older. So these ships buying sort of slightly less old ships, if you'd like to replace those storage units. So Theresa is a little bit of a retirement going on but there's not enough yet so.
So if you look at this whole recovery is a bit of a slow moving train out of the station and then we still think sort of fundamental rights, but there's no X factor in so far that this getting any sort of terrible to a recovery.
You could of course have a lifting of sanctions we think that's with the change to gain quite quite dramatic actually if if Iran comes circumspect in the full extent, but.
The you know the Bulls.
Expected them to be back in the second quarter of this year.
I guess the bears on the wrong, we're looking into next summer so I'm in no better position to to view that but that is a potential subtle.
Events that can that can change things quite quite a lot.
Okay. Thank you sign.
Sure.
Thank you. Your next question today comes from the line of Oman knocked off Clark's in Securities. Please go ahead.
Thank you.
Yeah I just wanted to follow up on the discussion with John you you you do definitely some quite a bit more constructive on on on next year and definitely more than how you sounded three months ago. I think you mentioned E. U P. H D felt the recovery was gonna take longer than most people anticipate.
Maybe just on that discussion here.
The gauge perhaps if you if you if you let me <unk> your level of constructive Miss all.
All else being equal because there's always gonna be something that changes, but the the current plan with OPEC, plus adding 400000 barrels Ah Ah Ah Ah Ah Ah Ah day, each month for up until September October of next year. When we think of a recovery all again all else equal do you think we could start to see a recovery happening having.
Sooner than the tail end of the the production edition or could it happen or do we have to wait until basically.
Next fall.
A real recovery and the colors.
<unk>.
I think that's a comment that.
Recovery, so far is measured and we expect it to continue to be measured for a little while longer but you know we are now at for modern ships in the spot market 20000, maybe plus even so.
And at this pace.
You will have sort of profitable levels coming up local too far out.
There are some photos the <unk>.
Smaller things happening in the market that will have impact beyond just OPEC processing barrels.
I guess as you and most people have seen the rocketing gas prices is now having some impact on what is going only in the sense that the gas is also used by.
Refineries to these set of fries the.
The cruise that they can chew.
And as for gas is now very extensive refiners are looking to buy more light sweet.
To avoid the sort of medium to a heavier solid stuff and.
And use gas.
And these type of oil is predominantly being loaded from from the Atlantic. So you see maybe some Tom mileage.
French now just the in so compared to what we have seen in the last 12 to 24 months. This is maybe a smaller smaller I think that is really all those things that we need to sort of push push a needle in the right direction.
Okay. Yeah. Thanks, Thanks for that because I didn't want to follow up and I think you may have answered that to some extent you know.
To see if you have noticed from your vantage point of charters, perhaps or acting any differently.
Especially with high energy prices and inventories continuing to come off the special effects approaching winter was gonna see if you. If you have seen any noticeable changes whether they're looking to take shifts on charter is John had sort of been asking about or if they're looking to fix strips on the spot market maybe earlier.
Then we've been used to seeing anything there.
This.
Currently more interest on the time factor vote.
So that's so that's for real and I think thats reflectional, whether it's being as traders or real end users. So they they would like to have ships are there needs needs to have shapes and this is I think simply reflectional overview of the market and they expected activity that they will have so that's definitely happening. So I think that's sort of a little.
Living in the case that if you like.
The overhanging ships have reduced quite dramatically. They said those two months after all fixed started to add barrels. So this means that the sharpness I'll know entering the market more sort of normal pace.
Trying to fix ships I think under the took there is also a time when the overhanging was much greater so there is a change in all this dynamic but my point is that is not going to the rapidly but it is happening steadily and measured and eventually so you come to the tipping point Avenue can we will get some sort of attraction.
Alright.
Yeah.
Good Alright, we'll keep our eyes open for that tipping point, Thanks man.
Thank you. Your next question today comes from the line of Muck Misfire off H D. Wayne Bright please ask a question.
Yeah. Thank you good afternoon.
A follow up question on on the market that you mentioned that you were down.
Some time charter from some of the key customer.
Tom started coverage has been a tire.
And in the last 12 months.
On the preferred model going forward as far as.
I guess, we agree that the market now.
Probably have hit the bottom line, which is a covered going forward is very preferred level uhm.
To maintain the upfront.
Dr Cumnock contract.
Profit sharing.
We are sinful business guys right. So we look at the moment so.
So when rates are as meaningful level, we've tried to engage.
As much as we can really in time charters as you saw last year. We did a lot of time charters is very rewarding rates.
This summer it hasn't really been very exciting. So I think you should expect that.
Rates are sort of meaningful levels again, depending a little bit on the trajectory of the generals book market, but then we will certainly seek to increase our coverage again, there's no fixed percentage.
If.
You have to keep in mind that.
Time short term market for large tankers liquidity is rather tennis is not that much business. If you look on the fleet as a whole so hence it's important to have customers in your portfolio that do engaged in time charters and where do you have the opportunity to do some repeat business and so forth and we feel we are in that.
So so once we see meaningful moment, we will we will seek to engaged again.
Alright, Thank you and just one.
One question on the dry dock 19 at three Uhm ship going to drive off next year.
Thoughts or what.
Can you move them off or were you positive thinking there are one you want to do them.
With the market. So the 10 the plan on the schedule is two one for the first half and two in I think the third quarter. So.
So.
Could be that for some reason to have an opportunity to bring forward, depending a bit on the market and all of that in your capacity and the equipment is going to be delivered and so forth. That's the 10th of the that's the thing.
<unk> schedule.
Alright, I just want one final question just on the cost side with that have you seen any changes to your you mentioned that there can increase in time to dry dog, but in general.
The daily Opex now uhm.
You see that the account normalizing here or.
I've been more cost for corporate related expenses.
I think we managed our up excited that quite a lot. During these times, but there has to be an additional cost and time related to crew changes in particular I saw these crew changed stories.
Phil.
Very big challenge for the industry I think every ship owner has got the crew that is stay.
Staying onboard longer than than the original repo normally plan or have to take some time and deviations in support for crew chain include changes.
As possible.
And the pencil nationalities, so it's still a very very difficult task and.
Hats off to the guys. We have that are running are proving that.
So there's marginal cost possessed you see laila address that we have a 7800 a.
A year to date on or off excited and that includes all the overhead close to the shore based off of as well related then the technical Department is essentially so so I think that's still a very good number.
No I I agree. Thank you for an appointment also uhm. Thank you that's all I have.
Sure. Thank.
Thank you. Your next question today comes from the line of <unk> No no no Stifel. Please go ahead.
Hey, good afternoon gas uhm.
Really I just have one question.
And it relates to the sort of some of the noise that's been going on in the market. Obviously two of your competitors in the VLCC side have been or there's been some.
Noise about potential consolidation I'm curious.
Guys have done some of that in the past with BW and.
I'm curious, where you stand ins in terms of saying, Okay. Well are are there are there benefits to economies of scale either from shipping perspective or capital markets perspective, and are are you at all interested in that or more sort of a curious observer.
From afar.
We think from Ah sort of industrial perspective.
We are certainly big enough Lolo our customers are <unk>.
Facing us for more shapes or.
No complaining about a fleet of being big enough is certainly a big enough, we have a meaningful footprint in the market.
And I think on the desk financing size.
Financing ourselves at equal will maybe a better term season that then the companies that are are size or even larger.
I think in the equity markets, we our stock is relative to underlying values is trading better than some of our bigger.
Competitors. So we're not sort of sold on this <unk> is going to change all of this.
We tend to joke a bit.
The noise so.
Conservation is mostly driven by bankers, who wholesalers will feast on this so.
And not necessarily.
Shareholders and the.
Yeah, we have a very handsome vehicle owners in our company and the normal then Lara sort of chasing us to make the company bigger just for the sake of being bigger or trying to.
Trying to quantify it will take a little mixed with that can be you might have some benefits on G&A. Because if you are even bigger you can be a little bit more efficient.
That's not the big item on the piano headline in the shipping companies. There are other things that are more important. So so that being said I think demonstrates in the process you to the two that we acquired some cushy pulling in 2014.
<unk> W. W fleet and 17.
So you always open to what can be good opportunities.
Will be a good transaction for the shareholders all of these teeth.
Okay.
Is helpful on straightforward and incidentally I I.
You guys are always helpful on straightforward and don't.
Make things relatively easy for so I appreciate that thanks.
Thank you.
Thank you we do have one more question at this time Potters. A reminder, if you wish to ask the question at Star and one on your telephone.
Next question comes from the line of Robertsfield, Tara Marine Survey Jeeze Oscar.
Yeah.
Hi.
I'd like to talk a little bit about the day.
You guys have.
<unk> the death in a little over a year from over 900 million down to 525.
If you see the market.
We're anticipating we're at the bottom it is going to turn up and the profitability starts to get like it was in early 2020.
Do you see again more aggressive debt reduction or are you just satisfied with the normal amortization rate.
Well I think a hour.
Our actions in the past to do an prepayments so that to strengthen the balance sheet was of course the result of.
Awarding markets and when we allocate capital.
A good portion of it will go to the shareholders, but we didn't use the older portion to either invest the time has been right or to reduce that film I.
I think you should expect more of a say in the future. This in this business is certainly very cyclical volatile business and I think it behooves a company to have our strongest balance sheet that you can have and maybe even lower depth to shift and what we have today to give you more flexibility. So so.
I think that should we expect to this.
Wonderful yeah, the year over year reduction in interest expense just screams about what a good job you guys have done and anticipating and taking advantage of the good times I compliment you on that.
The other thing I have a question of I noticed that you built up quite a bit.
Your consumable inventory was that because in that tools et cetera was that because of a lesser rate of business or because you anticipated the rise.
Oil prices and Squirrelled away some additional inventory.
That's a very good observation, sir so so what did they say, it's essentially bunkers and it's.
It's a result of when we get shipped back from time charter.
The remaining focused on board on the ship and the customer returns to ship to US we have to acquire and this impacts than the day of the inventory or the or the working capital in the company. So.
When we had much more space, both exposure and an oil prices. It will also be oil price sensitive of course this will vary but we do not speculate on both those you don't buy.
Few Lola bunkers in anticipation or the belief that the rates will go up.
Because the freight market for tankers is based on what is called world scale and the <unk>.
Bunker cost is sort of a included in that so and it's a very good correlation between death in the face level.
So we only volume volcker's when we fix the ship so nothing sort of a speculative way or we don't have it also will hedge bunkers.
Okay, well you ended up doing a real good job because it's.
It's nice to have that extra while the prices of oil have gone over $80 a barrel.
Thank you that's all my questions.
Congratulate get rid of or just doing a real great job, especially continuing to reduce the debt.
Thank you Sir wishing a good they have.
Your next question today comes from the line of <unk> whether research. Please go ahead.
Good afternoon is fine how are ya.
Good thanks.
I I apologize for asking somebody asked earlier I got dropped a Q, Colorado, but were you guys able to break out the amount fixed on the spot for two four and with the <unk>.
We can do that for you so for the Q4, 59% that 13700 per day.
Thank you and can.
Uhm I see it in your press release, the $300 million from D. N K for insurance can you. What this is for and how much we should anticipate for we're talking tech with the rough ranges with Ya.
So this is sort of a mutual of club bright and they build up a capital base that belongs to its members and the.
The club has decided that the part of these capital should be then return coots old nurse. If you like so it's a couple of reduction in the unit and we will be entitled to the mall and the range of five and after six months.
We expect that to be rich.
We received the in the first corporate next year, so withholding tax could be in the in this sort of 25% range. So.
With all this has to be determined so that's why we know if more specific in their press release, so dumped the rest of us on the exact number but it could be in that range.
Yeah, No I understand that's that's super helpful color and I guess this is like just a one time pad we shouldn't expect this again anytime soon.
That's correct.
And lastly for the Drydocking program. It looks like it's about 3 million or so capex per vessel is that a good run right for that to be in queue for that to be in 2022.
I think you can follow up they'll find the dilemma that so the ships next year are different vintage there is less sort of equipment installation and stuff like that so so feel free to follow up directly with them.
Okay. Yeah will do thank you so much that's it for me.
Thank you thank.
Thank you once again, ladies and gentlemen, it star and one on the telephone if you wish to ask a question. We do have one more question. At this time just comes from the line of Michael Mouse Karpov M. R. M. Please go ahead.
I appreciate it can you elaborate two two things could you elaborate on when you said if it lets the sanctions that could change the landscape.
And in what manner and then the other thing is I was on a capital line conference with the tanker C E O's of yarn as I N S W and frontline.
And all of them said by the end of next year, they expect vlccs to be 40000, plus.
Based on basically some of the things you noted in your press release, So love to know what your authorities on that too. Thank you.
So to your first question today, and Iran is selling part of it all a part of their oil sort of under the embargo regime. So they have to sell it that the discounted price.
And they have to use ships that are willing to trade embargo Lloyd and they have to pay a premium for those ships. So these are the old the old diagnose if you'd like that are involved in these trade.
The moment sanctions.
If sanctions gets lifted then that oil will it be traded in the market that market prices and they will have access to safe at market prices. So we think these older ships that are involved in that way then they will then be close to have been an infection trades they will be alpha business and that oil will then benefit.
The rest of the fleet, which is sort of the normal fleet, if you like and and the older ships. We think will then disappear from the from the scene. So the net the net benefit though that these smaller police are more oil in the market. That's why they think this is a pathetic.
On the on the second question you know I've been in this game for 30 years.
Have looked prepared to give you that number.
Yeah.
[laughter].
You are hesitant to give the number.
[laughter].
I will look to provide the number but the you know when the so give us these appear.
Opinions on the direction of the market.
That is.
Jen and beliefs on.
So, let's see what the how how it will play out.
Okay I appreciate it thank you so much.
Thank you.
Thank you.
You said no further questions at this time swaying back to Ya.
Thank you very much to everyone for Thanksgiving on these team getting you all have a good day.
Take care.