Q3 2021 Navios Maritime Partners LP Earnings Call
Investors section of Navios Maritime partners.
Website at Www Dot Navios dosh, MLP dot com, you'll see the webcasting link in the middle of the page and a copy of the presentation referenced in todays earnings conference call will also be found there.
Now I will review the Safe Harbor statement. This conference calls should contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 about Navios partners.
Forward looking statements are statements that are not historical facts such forward looking statements are based upon the current beliefs and expectations of Navios partners management and are subject to risks and uncertainties, which would cause actual results to differ materially from the forward looking statements.
Such risks are more fully discussed in Navios partners filings with the Securities and Exchange Commission.
The information set forth herein should be understood in light of such risks Navios partners does not assume any obligation to update the information contained in this conference call.
The agenda for todays call is as follows first Ms friend, who will offer opening remarks next Mr. <unk> will give an overview of Navios partners' segment data.
Next Mr. <unk> will give an overview of Navios partners financial results then Mr. <unk> will provide an operational update and an industry overview and lastly, we'll open the call to take questions now I'll turn the call over to Navios partners chairwoman and CEO Ms Angeliki for them, though.
Angelica.
Thank you Daniel and good morning, Taylor, who joined US on today's call I am pleased with any size for the third quarter of 2021 during Q3, Navios partners reported revenue of $228 million.
Adjusted EBITDA of $145 2 million.
Thank them over $162 $1 million.
Please turn to slide four.
<unk> 2021, we completed that transformative merger with Navios acquisition.
Good day and their name is one of the largest U S publicly listed shipping companies with 15 vessels dives diversify that goes to these headwinds and said this is more than an end market.
About a third overseas operate in needs of the dry bulk container ships and Digest segment. We believe that this combination offers a stronger more resilient entity mitigating sector specific cyclicality.
And <unk> has a solid balance sheet, and then moderate leverage enhancing income statement and a pipeline of about $2 2 billion in contracted revenue.
Our diversified platform should provide flexibility, allowing us to capitalize on cross segment opportunities, we expect to be able to provide more predictable than dwelling unit holder.
Uneven sector performance.
As shown on slide five 2021 has been at best formation on the year as we expanded in new segments year to date in 2002, and do an absolute increase by 163% in terms of number of vessels through 88 net vessel.
Who are the S&P activities, we increased our fleet size and abuse average age for our existing segments.
Container ships.
Flu size by 330%.
Average days by 24% for dry bulk we increased capacity by 36% and reduced average days by 18% of course, we also entered into the crude and product tanker segment income as shown on the chart on the bottom of this slide we have.
The increase available days by 171% to 47268 available days, thereby accumulating significant scale in a short period of time.
Slide six details our company highlights.
As I mentioned previously Navios partners each one of the largest U S publicly listed companies with over 140 vessels. We operate in three segments have 15 diversified vessel types.
So over than end market.
This engagement strategy.
<unk> in their own business model and enabled us to mitigate individual segment vulnerability.
While also allowing us to leverage each independent sectors under amendment.
The additional capitalized because he losing out operational and financial strategies as we adopt the settlement versus vessels and obtain their 2019. The net result is that we should have more predictable entity level any debt. We also anticipate that diversification and scale should.
And then in more attractive investment platform as we take advantage of global trade patterns.
We are now working with both dry bulk and container ship sector.
Forming in the tanker sector has improved materially in the past few months with more improvement expected.
Slide seven and infuse a recent development.
During Q3, and then murmured generated $228 million in revenue.
And then at $45 $2 million, and adjusted EBITDA, and $162 1 million and net income.
For the nine months of 2021, and then murmured generated 445 million 69, $8 million and adjusted EBITDA and $398 6 million in net income in.
In 2021, we've completed two mergers and merger with Navios containers increased container ships.
By 29 vessels. The recently completed merger with Navios acquisition gave us a strong foothold in this tanker sector with 45 tanker vessels.
We also continue to renew and expand our fleet year to date, we expanded that dry bulk fleet by 10 vessels engaged in dry bulk capacity by 36%.
And using it as.
Average age by a busy acquisition color, but it does not distract us from our balance sheet, we remain disciplined.
Cash balance was $141 $2 million as of September 30th.
And we have 28, 3% in net NPV about 91% of our debt is governed by the scrap value.
Alone, we have been taking advantage of robust market.
And then as to $2 billion of contracted revenue.
We'll be profitable in Q4 as contracted revenue.
Total expenses by $57 million, yet, we still have 2473 open or index linked day.
For 2020, do we expect the historically low breakeven of $2469, but open day with Duane Pete.
Our busy acquisition Garland has not distract us from our balance sheet, we remain disciplined.
<unk> Butler was another $41 2 million as of September 30, and we have to NPA.
$28 three per cent MTV about 91% of our debt is.
<unk> got five new blood vessels.
We have been taking advantage of robust market and in Memphis.
Savi.
Profitable in Q4.
Anyway.
And expenses by $57 million yet.
Have about 2473.
The next day or two.
Got it.
We expect the historically low breakeven 2469.
John and I spent a day with 58%.
All of our 47268 available base.
Days open or index.
Providing a rising market.
Market exposure.
Sure.
Davidson.
Rhonda.
Right.
Right.
Hi, Barbara.
Our balanced exposure across a guideline on Tennessee and tanker segments allow us to mitigate normally in that they should be.
On average fundamentals.
Across all sectors, who are shopping and got their medication and financing stop it.
Currently you know containership segments, given their casinos today over the market.
Locking in long term charters.
We fixed 88, 1% or whatever available days for 2022.
One 6 billion.
Adults have contracted revenue.
Extending the Ramsey.
Moving from strength to strength.
And that dry bulk segment, we continued to benefit from that.
Spot market with 87% of our 2022 are variable they exposed to market today.
You'll see that it was one of them.
Doctors aren't available.
Lastly, within our targets.
Our long term contracts provide for action and 65%.
We remain open to grab some of the ongoing market recovery.
Well wildly airports.
The market's upside.
For what.
I'd be very surprised gathering, but I think the second neighborhoods.
Enjoy that Firefly.
To be honest.
At this point I'd like to turn the call over to Mr. Seafood.
Well, that's what they.
Thank you.
That kratos.
Thank you Olivia and good morning all.
And the memories differentiated by its industry, leading scale and David.
Sure.
Please move to slide nine which provides some selected segments.
Leverage by vertical in terms of how the reported two vessels with balanced exposure.
Container shipping segments.
Also we have strength and stability of our balance sheet.
Volume is about 28, 3% and another.
He made it up a bit.
Moreover, navios optimize its flexible chartering strategy to leverage our fundamental secular sits pretty sick and calibrate based.
Based upon the segment of it.
We have a contract with revenue pipeline of about $2 2 billion.
And about 58% of our 2022 available days currently exposure.
Right.
Our market exposure days accountability towards dry bulk and thank everybody says well about 88% of our container ships are fixed.
Slide 10.
Our strong operating free cash flow potential.
For Q4 of <unk> could be one of our contracted revenue exceeds total expenses by approximately $57 million.
I don't know.
David with market exposure.
We'll provide additional liquidity for you guys.
For 2020.
Approximately 42% of our open days $29350 per day.
Contracted revenue provides for a breakeven of $2469 per open day.
We have 27400 episodes and open and index days that can generate significant operating you guys.
In slide 11, you can see.
The strength and stability of our balance.
At September 30, we had total cash of $141 2 million and borrowings of $1.
Leverage remains very low and net loan to value is 28, 3%.
As a basis, we may be a little bit of pulling it up.
Additionally, we have a staggered maturity profile with no significant maturities through 'twenty 2023.
Together without a contract with revenue of $2 2 billion provides an enduring platform with significant upside potential.
Turning to slide 12.
Little bit updates, we have extended our container ships for long durations, creating approximately $690 million contracted more.
Specifically, we have contracted out six new building container ships delivering in 2023, and 2024 or five years at an average rate of $57050 per day.
Operating about $420 million.
Yeah.
These vessels were acquired for an aggregate purchase price of $370 million.
We have also chartered out for 4200 <unk> container ships.
The year to between three and a half importantly, generating revenues of approximately $270 million.
Current average contracted mitigated over the four vessels.
Approximately $2600 per day.
On the S&P, we have shown the 2006 panamax panamax vessel for $14 million.
We are also constantly working on the refinancing and extending maturities. We have arranged a new facility of $72 7 million for the refinancing of the existing facilities with short and medium term duration.
Additionally, we have agreed to a $52 7 million medical question Nancy for to cover so much vessels to be delivered into the second half of 2022 in Q1 of 2023.
I'll now pass the call to Tony our CFO, which will take you through the financial highlights.
Thank you Scott and good morning all.
Briefly review, our unaudited financial results for the third quarter and nine months ended September 30th places when do you want.
Financial information is included in the press release and is summarized in the slide presentation available on the company's website.
Notwithstanding 2021, Navios partners acquired 62, 4% of the equity interest in Navios acquisition.
Acquisition of $44 1 million Navios acquisition's hallmark shares for an aggregate investment of $150 million.
As a result, the balance sheet of Navios acquisition, together with respect to purchase price allocation adjustments.
Loaded in Navios partners balance sheet as of the end of the quarter.
However, the results of Navios acquisition included in the Q3 Navios Partners' results are only for the period from August 26.
Denver therapy, 2021.
As I mentioned earlier the merger with Navios acquisition was completed on October 15th 2021.
I would also like to highlight that 21 to one results are not comparable to 2020.
When do you want Mmm acquired two companies <unk>.
This includes available days by 85% in 2021 and by 171% in 2022.
The plant is lengthy.
Moving to the earnings highlights on Slide 13 total revenue for Q3, 2021 was $228 million compared to $64 million for the same period last year.
The expansion of our fleet and improved time charter equivalent rates for both containers embargoes.
EBITDA and net income for Q3 2021 include a third.
<unk> 9 million gain related to the sale of three vessels.
Vacation levels as I live in harmony and a.
4 million bargain purchase gain upon obtaining control of another acquisition and $2 9 million transaction costs in relation to the merger with Navios acquisition.
I know that we were able to sell these vessels for a book gain and this excellent market as we monitor rate profile.
Excluding these items total adjusted EBITDA for Q3 amounted to $145 million.
$31 million for the same period last year.
Total adjusted net income was $130 million compared with $8 8 million for the same period last year.
During the quarter ended September please slide 21, we had 9000.
Seven available days.
<unk> 4499 days close to 320 <unk>.
Fleet utilization was approximately 99%.
The average combined Q3, 2021 franchise.
Eight of our vessels increased by 17, 9%.
74447 per day.
The average Q3, 2021 time charter equivalent rate achieved by segment wise.
<unk> 8926 per day 22418 per day, and bankers $15 66 per day.
Moving through the first nine months 2021 payout time charter revenue reached $445 million compared to $158 million in claims frequency.
The result was a combination of the expansion of our fleet and April time charter equivalent rate.
Available days increased by 63% with 20421, while the average nine months 2021, combined time charter equivalent rate increased by 76% 20991.
Utilization was approximately 99%.
EBITDA and net income for the first nine months of 2021 include Nate.
8 million gain from equity in net earnings of aggregate loan fundings at 48 million bargain purchase gain upon obtaining controlling of navios containers in Navios acquisition.
$33 million gain related to the sale of <unk>.
One of our vessels and two.
$2 9 million transaction costs in relation to the merger with Navios acquisition.
<unk> adjusted EBITDA for the nine months of 2021.
At about $217 million compared to $64 million for the same period last year.
Adjusted net income for the first nine months of 2021 amounted to $242 million compared to a $2 9 million loss for the same period last year.
Turning to slide 14, I will briefly discuss some key balance sheet that as of September 32021.
<unk> revenues were $141 million now.
Long term borrowings, including the current portion net of deferred fees amounted to $1 4 billion.
Net debt to book optimization was at the comparable level of 41, 7%.
Turning to slide 15, you can see <unk> maritime Stapling is the most environmental friendly means of transportation as it is the most carbonate based on the mode of transport, we aspire to have zero emissions by 2050.
This process would have been pioneering and are adopting certain environmental regulations.
Two years in advance aiming to be one of the firstly to achieve full compliance.
Navios is a socially conscious growth with core values include diversity inclusion and safety.
Our very strong corporate governance and clear quarter versus our board is composed by majority independent directors and independent committees that oversee our management and operations.
I'll now pass the call to George <unk> Executive Vice President of business development to discuss the industry section George.
Thank you Ed Please turn to slide 17 for the review of the dry bulk industry.
The IMF projected global GDP growth at five 9% for 2021 and four 9% for 'twenty two.
The April 2021 is the highest in almost 50 years.
Led by a seven 2% expansion in China, India and developing Asia.
Vaccine Rollouts continue with fiscal stimulus and governmental infrastructure projects to continue to support economic growth.
21, dry bulk trade is projected to increase by four 5% and further increased by two 9% in 'twenty two.
Grades in all asset classes rose sharply.
Acting surging trade driven by strong demand for both major and minor bulk commodities.
The PDI average for Q3 was 3732, the highest quarterly average since 2008.
In fact, the BVI reached 5650 on October seven the highest level in 13 years.
Led by increased iron ore exports out of Brazil, pushing capesize rates to just under $90000 per day in early October.
More recently the freight market has corrected on the boardwalk Chinese winter steel production limits and power shortages due to any availability of gas and coal. However, it should be noted that candidates are still about two times the 10 year averages.
Turning to slide 18.
Post pandemic stimulus measures.
Scott.
You mean, producing industrial production has fuel demand for the three major bulk cargos.
Typically the iron ore global grain trade is expected to grow by three 4% in 2021 and two 4% in 'twenty two.
I'll, just try and availability of Atlantic exports to their priorities are.
To increase still moves replenish stockpiles.
Concerning coal gas.
Gas prices have driven power plants to switch from coal fired power generation.
Yes.
<unk> estimates that global qualifier.
And Asia is expected to rise by nearly 5% this year.
Pre pandemic levels before introducing a further 3% an all time high in 2022.
On the Canadian side Global grain trade continues to be supported by an ever increasing world population.
Food security issues, driven by the pandemic as well as introducing broadening demand worldwide.
While grain trade has been growing by 5% CAGR since closing.
Mainly driven by Asian demand.
Please turn to slide 19.
The current order book stands at six 8% of the fleet one of the lowest on record.
Net fleet growth for 2021 as expected at three 5% and only one 5% for turning to below the projected increase in dry bulk demand for both years.
Vessels over 20 years of age are about eight 6% of the total fleet, which compares favorably with a historically low order book.
Concluding our dry bulk sector review.
The minus broker slot pairs net fleet growth for 2021 'twenty two.
Strong demand for natural resources, combined with continuing COVID-19 related logistical disruptions.
And a slowing pace of new building deliveries all support healthy levels, both current and future freight rates.
Please turn to slide 'twenty, one focused on the container industry.
First COVID-19 stimulus measures have caused a sharp recovery of demand.
For boots in Western OECD economies as noted on the two lower charts. These.
This has led to a change in trading patterns for the container ships, which has resulted in historic terms on LNG rates.
As you can see in the Blue box on the lower right the increases in demand for <unk>.
It's poor congestion that destocking will lead to containership demand growth of six 3% in 'twenty three.
Three 9% in 'twenty two.
Turning to slide 22.
Fleet growth is expected to be four 2% this year and three 8% for 'twenty two.
Even with the increase in new building orders the minus forecast brokers net fleet growth in <unk> 2021 and 'twenty two.
It should be noted that about 73% for the order book is worth a few thousand teu vessels were larger.
In addition, 10, 4% of the fleet is currently 20 years of age or older.
This would lead to a pick up in scrapping in 2022.
<unk> dropping prices combined with IMO 2022.
Two reduction rules may induce a portion of the over age fleet subscriber.
Conclusion positive demand fundamentals, mainly due to the start of economic activity around the world along with reduced fleet availability to support.
We continue shipping industry.
Please turn now to slide 24 for the review of <unk>.
Got it.
Governments, having put in place emergency monetary and fiscal plans to support their economies have kick started faster than expected recovery in the oil economy.
This has led the IEA to project Q4, 2021 oil demand to return close to 2019 levels, which is shown on the graph on the lower left.
We see increase in demand has led to a decline in OECD crude oil inventories, which have fallen below their five year averages in February with the largest decline coming in September as shown on the graph on the lower right.
Turning to slide 25.
<unk> net fleet growth is projected at three 6% for 2021 and only one 6% for Q2.
This decline can be partially attributed to owners stance towards the long live assets in light of macroeconomic uncertainty and engine technology concerns due to upcoming CEO two installations.
The current order book is eight 3% of the fleet.
<unk> over 20 years of age at 11, 3% of the total fleet, which compares favorably with a low order book.
Finally, turning to slide 26.
Product tanker net fleet growth projected at two 4% for 2021 and only one 9% for 'twenty two.
The current product tanker order book is 6% of the fleet, which compares favorably with the eight 4% of the fleet is 20 years of age or older.
We believe that the overall tanker order book and fleet are well balanced is the idea of more 2023 and ballast water management regulations that will lead to some vessel retirements in the coming months.
In concluding the tanker market continues to remain challenged following reduce crude and product demand associated with COVID-19.
However, opex pass export quarters, along with global oil demand returning to 2019 levels, a broad OECD inventories below their five year average.
These together with near record low order book sequels crude and product tanker rates in the near term.
This concludes my presentation I would now like to turn the corner over to angelic <unk> final court.
<unk>.
Thank you George This concludes our formal presentation, we open the call to questions.
At this time, if you'd like to ask a question. Please press star one on your Touchtone phone.
Move yourself from the queue at any time by question once.
Once again that is star one to ask question, we will take our first question from Randy <unk> with Jefferies.
Okay.
Howdy team Navios, Congrats again on the merger.
Good morning, good morning, Thank you.
Yes.
Starting off with the merger.
And it is clearly massive it's diverse so a few questions around this you mentioned that you saw the 2006 panamax, but still have a handful of 2004 and 2005 built vessels. So any plans for further asset sales, especially on those older vessels and then I guess on the other hand any plans for.
Further growth in either of the three sectors that you now have exposure to.
I think the one issued it back say that no matter what was on the 114.
In fleet, we will have some replacement so think about something between five two.
And then vessels to minimal but here you only have to replace because.
This is ray.
Youll see that <unk> may.
You may have.
May is coming.
You'll see that the potential in the 2023 and may have more consumption for different technological or commercial in Asia. All capex that you'll have to pause. So this is an ongoing process that will be going.
Over and over again <unk>.
And youll have seen us doing that even in the top every market in the bottom of adult there is a continuous closely that window replacement.
Indicate now or actually in resin.
We just completed a $1 billion of investment of 45 vessels in the tanker segment and I think.
It seems to be that Q3 was a low part of the tanker segment and we're seeing the market.
Slowly and in capital. So this is a big investment.
And what we're looking is housing.
We think it will play what we have done is that.
We have 40, we have create a fortress balance sheet by charting.
Container sector, which is extremely strong and we have seen that.
We have been.
<unk> contracted delivery containers to point to overall on the company.
This advantage we took on the container vessels gave us.
Historically, low breakeven of 2000 and $469.
<unk> 2022 so basically we have a fortress balance sheet.
These very comfortable watching the dry bulk market develop we have 86% of our available days in that.
In the dry bulk.
Open to the market exposure, because we are bullish on that and we have the tanker sector that we are watching us.
So this is basically what we have been doing and what we're seeing developing.
Got it no that makes sense and then you mentioned the word replacement right. So you have <unk>.
<unk> hundred 40 to 150 vessels is that the kind of range do you want to stay with or would those kind of asset sales.
Kind of bring down the fleet levels from these numbers.
There is always a replacement of.
One of the things that we said from an established social mentioned, we have an average age of about <unk>. He is below industry average of this disease.
This portfolio in order to be kept on the same.
I'd say, a lowering destiny avid and create you will always have been.
10, 15 address and so there is not that base.
Basically.
There is not a number yet, but do you really need to.
Do you know.
And Manav.
Ah.
If we find opportunities we've got always expand and that is something that we are not shy doing but I'm talking about as a portfolio of Iraq to keep Renee to avaya.
Got it that is somehow.
Certain level.
Yeah, No that's fair and I think the sales of the older ones will slowly reduce that or I guess keep it relatively young.
Alright second question looking at slide 11 and 14.
Clearly showing the strength of your balance sheet, you mentioned earlier in the call your fixed charter backlog.
Is giving you a pretty substantial cash flow visibility very little spot day breakeven.
So I guess going forward is there a specific debt target our leverage ratio youre pursuing before switching to some kind of return of capital be it either repurchasing units at a massive discount to NAV.
We're increasing the quarterly distribution.
I think the number one is that.
What we see.
A good positioning on the company you will have this low breakeven.
2400 are historically, the lowest but don't forget we had 86% of our available days open.
Dry bulk.
In the tanker sector is just coming off his desk coming up for a very low point, which was the lowest point in Q3, So basically what we want to see is number one.
This.
Is this a market in dry bulk to materialize, which we are bullish about it but also you know.
Any gravity on the tanker segments all on that.
After these two combinations, we're seeing as editor at Investor Day is an important part of our strategy.
Got it and do you have a maybe preference there in terms of repurchases or a distribution increase.
I think this is something that we already own.
Yes.
Well, that's great to hear that's it for me. Thank you so much.
Thank you.
We'll go next to Omar <unk> of <unk> Securities.
Thank you Hey, guys. Good morning also a good afternoon and also congratulations on your first call here post post merger.
I wanted to make.
Follow up on the.
The commentary you just had with Randy just in terms of deployment of capital Youre right now youre generating huge sums of cash.
Likely to grow here as we look ahead before Charles has just announced on the containers.
You can pay down debt aggressively you can reward shareholders as aggressively as you can actually acquire assets fairly aggressively.
In terms of those sort of three.
Are you willing to rank at the moment.
Those three which is the most appealing.
If one out ranks the other two are any sort of color you can give on how you are thinking strategically about whether you decided to pay down debt okay.
Hey, payback shareholders or grow the company.
I mean.
We did that transaction really whether we do that transaction were about 35%.
We increased that to about 35%. So the target is always to bring down the debt and that is.
About 30%.
Overall.
Today the biggest.
Let me get.
<unk> accuracy is that we have created.
Operationally a unique platform we have.
Historically, a low breakeven gives us on the 47 days.
Today, you will have a huge fleet and you have a breakeven for our open days of 2000 and 460 <unk> is unique.
But on the other side you have they expose to the market.
86 <unk>.
Yes.
The other big <unk> dry bulk to be opened but we have the luxury.
We see good.
We see a good mark.
Market potential, but we have to see to be alive and.
And also we have to see that Comcast, which we also sheet.
Good for the NCI to actually happen.
If these conditions Scarborough and the next thing is on the market.
That I think we are in there.
We can.
<unk> our gate on adoption of <unk>.
Our debt and also on <unk>.
Actually providing to our investors. So this is something that we are focusing very much but the most important is really need to have the right conditions we have.
We see the potential, but we see we need to see materialize.
Okay. Thanks, Angeliki definitely it sounds like you have the flexibility.
Across the board with that.
I did want to also just ask about the the containership charters, which I thought were.
Your orders those four plus two shifts if I recall.
And it was somewhat opportunistic at the time they were on a speculative basis I guess.
Or at least more orders without charters here you fix them for.
For the 37000, a day, which as I run the numbers it looks like a five year payback, which sounds pretty substantial given these are new buildings.
In that context.
And thinking of deploying capital in the future we've talked about how maybe tankers are appealing.
Asset class to go after because it's the bottom of the market to an extent.
On the container ship.
Opportunity, how repeatable could you say that that deal is where you order those ships and then subsequently contracted them and now you have basically a five maybe five five year payback is that.
<unk> opportunity you think.
Yes.
As is evident is that.
Any more existing but the reality is it just.
To go back to your question is the following.
Yeah.
Okay.
Part of the ship the shipyard capacity has been.
So we see that the medallions, maybe going obsolete you always have to be very alert to see what is the best area, where the opportunity lies sometimes using winding sometimes as in second hand vessels in different sector.
Yes.
There's no one formula to this and you have to be always in armies of different scenarios.
Deep sea one of the things that we saw.
It's a great opportunity on the container segment, we saw that the smaller vessels and this is a wide body the 5500 <unk>.
This is what we like about these assets is about in the ACR flexibility USA.
260 meter and very nice dimensions, you can actually take advantage of the point of foreign desperate patients that is now developing the differential in the supply chain and therefrom and all of these.
Hi, Justin.
In times of <unk> all of the unique things as we see on the supply team happening these vessels with things and good luck and.
Basically by ordering these vessels you go away from the baseline amongst that used to be the vessels that was the design at that time for passing through Panama Canal, but we saw that had a good life afterwards to shelf who that is.
But particularly.
For the necessities of the Indonesia right.
Yes, Thank you definitely look.
Well timed.
And a good overall return.
Maybe just one final one I did want to ask I noticed in the release you mentioned that also in your comments just about securing drybulk charters.
The period market when the time makes sense.
Could you just give a flavor of sort of what's the liquidity it looks like from your perspective in terms of deploying the drybulk fleet away from spot time.
Time charters, what does the liquidity look like across say, the one year to two year timeframe.
I think that this guy.
You can find it.
One year two vessels to the basic.
Basically today discussing is huge and you don't see the CEO, Marc and developing it will take some time.
I mean, we show a on updating we went to the Gainesville Macy's we are down to around 30000, now 30000 is a very good level, but purely their own IP that we show are created.
Paul.
I'm still waiting to make an assessment.
On <unk> do you need to.
Wait and see that market develops we are not shy of action of <unk>.
If you would have seen in the in container segment, what we did we.
The example that you see.
On the chart as we just announced.
We've also seen one yet.
And today, we've reached over.
Yes.
Over two five times.
So you are actually creating these cash flow and the market is right. So we need to wait for the dry bulk we enjoy the we have the luxury because of our balance sheet and a low.
And breakeven to really.
To have the luxury to be open and to capture the spot market rates for the period market to come and this is the strategy.
Going forward.
Yes.
Since of the diversified fleet well thanks, Sandra Thank you for your comments I'll turn it over.
Thank you.
We'll take the next question from James <unk> with Citigroup.
Hey, guys. Good morning, I, just wanted to actually ask about how youre thinking about the capital structure from here.
Much larger asset base is more diversified you are thinking about.
We have meaningful we can even lower leverage level of leverage than you have.
Now.
Is there some point or something.
On the secured piece of that definitely make sense.
Basically Mike.
A little bit more permanent piece of the capital just trying to understand.
How youre thinking about the work can be done on that side.
Okay. So the big thing is about any that we're looking at reducing further our debt. One other thing we have done easily have about <unk> 5 million.
And Ed will give you the exact numbers.
On debt we have about.
Well, let's say banks about 600.
<unk> in Chinese.
Macy's, which provides us more.
Is there more.
Yes governance, so creating these.
This difference too.
Financing and this is something we like to keep the flexibility of having the Aegean lazy.
Plus the commercial banks in Europe.
Overall, we like to have.
In a low leverage no leverage is a big driver to our model.
Got it and then.
Separately.
Sure and in supply chain richness just generally.
We're front and center.
It's been more traction in the market.
Is that lack of visibility due to the core demand created any sort of headwind getting business done on the container shipping.
Getting more into the <unk>.
Our shipping segment.
Create any sort of headwind are you getting any sort of incremental business done are extending.
For extending any particular chartered in vessel I was just trying to understand if thats actually sort of impacting your operations outside of just the <unk>.
<unk> impact.
I'm, just trying to understand how the future there.
Big picture Jeff.
You should understand that all the inefficiency is net positive.
Our business.
Basically we've got six and you have seen in the container segment with six multi year contracts.
The announcement that we did between Essex and <unk> buildings that with these four five years and the four.
For other infections.
We did acquire techniques.
A number of levels it was at six.
<unk>.
It's kind of a $9 million to $90 million of contracted revenue. So this is a net benefit is being efficiency and we only get.
You know, we get advantage of relief on the long term for us because they need of dominance.
Yes.
I understand the benefits.
Sure.
Washington market capacity and rates, but just trying to understand basically.
The lack of visibility has been.
Sort of discouraged Inc.
Incremental ordering or sort of any.
Any commitments on your customers part it doesn't sound like it has but curious if there's any sort of.
Sure that hold back because.
Because of that lack of visibility just curious there.
Alright, another 100% sure on that.
Question on kind of is a little bit hard to hear you but.
One of the things I would say that.
We see visibility on shopping.
Demand for charters, if I answer your question and we have seen it.
Uh huh.
And this is something that actually has benefits.
Benefit that's quite significant on this.
And on these market, especially on the container.
Thank you.
Thank you.
I'll turn the call back over to Andrew <unk> for any closing remarks.
Thank you this completes our quarterly results.
And then thank you.
Okay.
This does conclude today's program. Thank you for your participation you may disconnect at any time.
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Yeah.
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