Q4 2021 EuroDry Ltd Earnings Call
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[music].
Thank you for standing by ladies and gentlemen, and welcome to the Euro dry conference call on the fourth quarter 2021 financial results.
We have with US today, Mr <unk>, Chairman and Chief Executive Officer, and Mr. Toss Us as latest Chief financial Officer of the company.
This time, all participants are in listen only mode.
There will be a presentation followed by a question and answer session at which time if you wish to ask a question. Please press star one on your telephone keypad and wait for the automakers message advising your line is open.
I must advise you. This conference is being recorded today, please be reminded that the company announced resorts today with our press release that has been publicly distributed before passing the floor to Mr. Peters I would like to remind everyone that in todays presentation and conference call your dry we'll be making.
Forward looking statements those statements between the meaning of the federal Securities laws.
Matters discussed may be forward looking statements, which are based on current management expectations.
Okay.
Not just.
Discussed might be forward looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized.
Our economy draw your attention to slide two on the webcast presentation, which has the full forward looking statement.
And the same statement was also included in the press release, please take a moment to go through the whole statement and read it.
I would now like to pass the floor over to Mr. Peters. Thank you Sir Please go ahead.
Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call.
Devon recently specialty cheese.
Sure.
The partnership todays call is to discuss our financial results for the full year.
And quarter ended December 31st Thank you Ron.
Please go to slide <unk>.
Our income statement highlights.
This is by far the best quarter since the separation of beauty derived from <unk> back in 2018.
For the fourth quarter of 2021 we reported total net revenues of $52 $3 million and the net income of $16 million.
After adjusting for an approximate $2 $9 million fair value gain in derivatives.
$8 million of preferred and preferred limited deemed dividends.
Adjusted net income attributable to common shareholders was strictly at $3 million or $4 $29 specific value.
Adjusted EBITDA for the quarter stood.
$16 million.
For the full year 2021, net revenue was $64 4 million and net income was $31 2 million.
Our adjusted net income was $33 million or 11, 8% diluted after adjusting for an approximate 8 million change in fair value of derivatives, the $1 $65 million loss on debt extinguishment is $1 75.
5 million of preferred and preferred dividends.
Adjusted EBITDA for the 12 months of fiscal 'twenty, one stood at $42 3 million doses.
Both the quarterly and the yearly changes of net revenues and adjusted EBITDA were higher than the previous views by multiple measures of magnitude as can be seen in the slides.
Our CFO <unk> <unk>, who will go over our financial highlights in more detail later on in the presentation.
Please turn to slide four operational highlights.
As previously announced in January 19, 2022, the company agreed to acquire the motor vessel <unk> luck for 2014 build supermax vessels for $52 $2 million.
The vessel was financed by owned funds, but is expected to be further refined knows both delivery with a bank loan estimated between $10 million to $11 million.
The vessel's existing chocolate will it be assumed at $13250 per day until.
'twenty two.
The vessel is expected to be delivered within the next week.
On the chartering front motor vessel election that will speed is fixed fluid threep of about 50% to 55 days at $45000 per day, followed by $56000 a day for the next 30 days plus a 600000 gross ballast.
Motor vessel good cloud will speaks for approximately 12 to 18 days of 33000 Boes per day.
We would buy 30050 doses for the data.
Days as they've asked a fixed or defense faster at $55000 per day for the period between October to mid December 2022.
Finally motor vessel passes was fixed for the throughput of about 80 to 90 days.
At $15750 per day.
During the fourth quarter of 2021, the company settled the WPC sold <unk>.
<unk> the equivalent of one <unk>, which was originally so that the rate of 12550 Boes per day as the loss of $2 million.
In addition, during the quarter, we sold 90 days in Q1, Q2, and two of the phase <unk>.
We then began with one panamax vessel is 31500 Boes per day subsequent to closing that position was filled with $3200 per day, a few days later and realizing a gain of above 750000.
Those.
The total net realized loss and with a very complex.
About $1 $56 million for the quote.
There were no dry dockings during the fourth quarter of 2021.
Both of them all.
At the market offerings in 2021 we raised approximately $10 million with net proceeds.
Issuing 341000 serves approximately at the level of itself price close to $30 per share.
Also during 2021, we have been deemed oil level spending series B preferred shares.
<unk>.
$616 $6 million.
Out of this amount we lost 13 $6 million was redeemed in December 2021.
Please turn to slide five.
For the summary of the Hugoton ice covered fleet.
With the acquisition of multiples low unit price fleet has increased to 10 units.
Further complementing our cluster of modern vessels with highly efficient eco designs and attractive commercial getting this speaks in terms of fuel efficiency and localization requirements.
Our current fleet has an average age of $12 nine years with a current carrying capacity.
726000 deadweight tons.
<unk>, 50% higher who've been working towards the beginning of the year.
Slide six shows the cargo vessel employment schedule.
As you can see fixed rate coverage in the remaining of 2022 Spence is about 19%.
This figure of course.
<unk> excludes ships on index charters, we have secured employment, but that are open to market fluctuations.
Now, let's turn to slide seven.
With Google over the market highlights for the quarter ended in December 31.
One.
And up to now.
The dry bulk spot earnings after peaking in October 2021, when they registered the highest level since early two.
<unk> 2010.
Subsequently retreated by about 35% in November and December widened agenda 22, the treated by approximately another 30%.
At the same time after initially with listing to one year time charter rates recover the debate during December 2021, rather than 'twenty.
Suggesting that.
Based on this amongst the market participants that the spot earnings for the three.
Clinically common effect during the first couple of months of the year is owned et cetera.
During the last week, we have all of it is seeing quite a strong positive reversal in the spot market.
And we expect <unk> data to be released on Friday to show an increase of at least two to $3000.
Based on the spot rates and $1000 of the one year Tc that relative to the February for bad debt, which is included in our presentation.
Even at the present levels, though spot earnings at high levels relative to the last decade, generally and very high levels, especially relative to the time of the year.
According to Clarksons <unk>.
Secondhand bulk carrier pricing slightly decreased approximately 2% during Q4 2021.
While new building prices have increased to more than $38 million for come supermax vessels of $35 million for ultra amongst vessels respectively.
The fleet grew by three 6% during 2021.
Please turn to slide.
Which slide node.
The IMF revised outlook is largely led by growth Mark Downs in the two largest economies the us insight.
According to the agenda of the IMF report global growth is expected to decrease from five 9% in 2021 to four 4% in 2022.
Half a percentage point lower since the previous projections into October .
However, the 5% growth the IMF expects will be delayed in 2022, the IMF now forecast it will gain in 2053 and has increased its projection for 2020 to repay 45% to a level of three 8%.
Prospects for the emerging markets and developing economies.
So generally for lower growth than 2021.
Two except for India, which is expected to be steady at around.
Post a nice 90% levels.
From the developed economies <unk> <unk> five should do better from 'twenty to 'twenty one.
The U S, citing type of fit or Lucy and anticipate that growth to any further stimulus spending by Congress.
Our reduced growth focus for 2022 since October one by one two percentage points to just 4%.
Diamond is economic growth is projected to be only four 8% in 2022.
<unk> picking up again in 2020 to be as a central bank's steadily ramps up for the season to go down.
<unk>.
The lower growth of eight on the alliance multiple headwinds facing the world's second largest economy.
To appropriate to downturn.
Download that.
After the pollution measures and strict Covid, 19, coats, which got sub businesses and the reduced consumption.
Looking at the drive activity the type of freight in the according to Clarkson adhesives demand is expected to grow by two 2% in 2022 compared to four 8% for the <unk>.
Thank you.
But 2023, we expect dry bulk trade to grow at the most of it the pace of two 3%.
<unk>.
Unfortunately demand for seats is affected not only by demand for the commodities that by changes in logistics and trading patents vessel speeds and all of the output parameters that have become so difficult to evaluate and critical during the last few years due to the.
Combined effects of the pandemic and vital mental consideration.
Please turn to slide eight.
The order book as a percentage of total fleet up until February 2022.
At six 8%, which is still around with the lowest levels. We've seen in the last 25 plus years.
Please turn to slide 11 for the dry bulk fleet total view.
Clarksons expects new deliveries of about three 1% of the current fleet to be delivered in 2022.
Two and three 6% in 2020 to be the.
We expect a net fleet growth of around 2% during 2022.
Below 1% in 2015 after also taking into account scrapping slippage and both are possible.
Consequently, the sector is well positioned for a strong year.
And structurally for the next several years, thanks to a very limited supply growth.
Please turn to slide 12, where we summarize our outlook in the dry bulk markets.
As previously mentioned global Calgary continues yet new COVID-19 values rising energy prices and elevated inflation still weigh in and may slow economic growth.
The market because of build on the strong trajectory on that.
Back of highly supportive conditions in the commodity markets, having reached 11 years highs in Q3 2021.
And the last quarter, we have seen a significant florida, reflecting mostly reduce demand for iron ore from China.
Which has affected primarily the capesize market.
It trickles down to the smaller segments as well.
We expect earnings to remain volatile at high levels as the short and medium term outlook is generally positive and supported by one of the lowest dose.
See seasonal weaknesses can also be expected.
Furthermore, ordering of new ships should 2023 deliveries is expected to be extremely low so nearly nonexistent due to lack of available slots in shipyard.
In addition, as mentioned in previous quarters, the lack of clarity for the fuel of the future.
Main unknown something that makes placing a new value of these skills.
Overall, we expect the market to remain at relatively high levels with more stability in the smaller sizes and more volatility in the capesize sector.
Congestion Easter timing and the implementation over the new idea more innovative delivery delays soups in January 2023 will be key elements in the direction of the month.
Let's turn to slide <unk>.
<unk>.
The left side of the slide solicited will loosen the one year time charter rates of Panamax dry bulk vessels since 2002.
As you look at the end of last week. The one year time charter rate for Panamax ships with capacity of 75000 deadweight tons.
Stood at $22625 investment, we said that is no.
On the right hand side of the slide you can see the historical price space for definitive Panamax vessel, which has a current price of around $25 million.
Over the past year dry bulk prices have gradually been increasing exceeding the historical median of neighborhoods, let loose, but still significantly lower than prices seen in the beginning of 2011.
We believe that it's highly probable that this period will be a period with higher prices and higher earnings in the last decade, where both earnings and prices and also inflation with extremely low and desktops. We are prepared to adapt to this changing in fiber.
And continue growing due to price steadily but cautiously for the benefits of our shareholders.
Let me now pass the floor over to our CFO purchases to lead these two goodwill values financial highlights in more detail.
<unk> the floor is yours.
Thank you very much actavis good morning from me as well, ladies and gentlemen.
Over the next five slides I will give you an overview of our financial highlights for the fourth quarter, our full year of 2021 in comparison with our results the equivalent period of 2020.
Let's turn to slide 15.
For the fourth quarter of 2021.
Company reported total net revenues of $22 3 million, representing 248% increase.
Total net revenues of $6 4 million during the fourth quarter of 2020.
This increase was there as well.
Can you talk where its time charter equivalent rate and by our investors and the higher number of vessels. We operated in the fourth quarter of last year compared to the same period.
Correct.
The company reported a net income for the period of $16 million and.
Net income applicable to common shareholders.
$15 2 million.
Compared to a net loss of <unk> 3 million and a net loss attributable to common shareholders of <unk> 7 million for the same period of 2020.
Interest and other financing costs for the fourth quarter of 2021 were <unk> 7 million as compared to 5 million for the same period of 2020.
Can you just mainly due to the higher average debt outstanding for the period.
Adjusted EBITDA for the fourth quarter of 2021 $416 million compared to $1 8 million achieved during the fourth quarter of 2020, and can you just or sovereign condoms, 73%.
Basic earnings per share attributable to common shareholders for the fourth quarter of 2021.
$5 30.
<unk>.
Calculated on about $2 8 million weighted average number of shares outstanding.
Alright.
Diluted earnings per share were <unk>.
Five.
Calculated on about $2 9 million shares.
That covers a number of shares outstanding compared to basic and diluted loss per share of <unk> do.
Do you want a sense for the fourth quarter of 2020.
Excluding the effect on the income activity to common shareholders for the quarter.
The change in fair value of our interest rate derivatives and the unrealized gain on interest rate swaps.
The adjusted earnings.
Critical to common shareholders for the quarter.
And at December 31, 2021, Whats your view.
34 <unk> basic.
And $4.29 diluted.
Back to our adjusted loss per share.
34%.
For the same quarter of 2020.
Usually secured kind of lenders not concludes therefore of items.
They are published.
Fair earnings per share.
I would also like to highlight here.
Adjusted net income attributable to common shareholders for the fourth quarter of 2021 encroach.
Median charts.
As classified as preferred deemed dividend, which is the result of the redemption of all of our remaining preferred shares during the quarter.
And without the <unk>.
Adjusted diluted earnings per share for the quarter would have been $4 48.
Let's now move to the highest thoughtfulness slides discussed we're seeing figures for the full year of 2021.
For the full year of 2021, the company reported total net revenues of $64 4 million, representing an Huntington and make a 9% increase.
Total net revenues of $22 3 million during the fourth.
The year of 2020 again actually the result of the <unk>.
Great.
I'm charter equivalent underneath our vessels churn.
And the higher average number of vessels we operate.
The company reported net income for the period to $1 2 million.
Net income attributable to common shareholders of $29 4 million as compared to a net loss for the period.
For the year of $5 9 million and a net loss attributable to common shareholders was sort of in a cough median for 2020.
Interest and other financing costs for 2021.
And unchanged at about $2 3 million compared to the same period of 2020.
I know that Youre showing this slide includes <unk> and <unk>.
<unk> 7 million charge.
I think to a loss on debt extinguishment.
The conversion of part of our debt in the second quarter of <unk>.
From 'twenty, one to common equity.
Yeah.
For 2021, the company Coke life and <unk> three.
Median gain on foreign interest rate swaps and a $4 1 million realized loss on FFA contracts.
As compared to a loss on derivatives of $8 million for 2020.
Which was comparable.
<unk> 3 million loss contracts and a <unk> 5 million a loss of three.
<unk> swaps for last year.
Adjusted EBITDA for 2021 was $42 3 million compared to $3 7 million achieved during 2020 and can you just have a thousand and 50%.
Basic earnings per share attributable to common shareholders.
For 2021 were $11 63.
Calculated on about $2 5 million.
Weighted average number of shares outstanding fully.
Fully diluted earnings per share were $11 $53 million.
Again in about $2 5 million weighted average number of centers from strengthening compared to basic and diluted loss of $3 $20 per cent for for.
For 2020.
Excluding the effect on the earnings attributable to common shareholders for the year.
The change in the fair value of derivatives and the loss on debt extinguishment.
Earnings attributable to common shareholders for the year 2021, whats youre being $11 98 basic and $11.88 diluted.
Compared to an adjusted loss of.
$3 <unk> basic.
Basic and diluted for 2020.
And as previously mentioned.
John will conclude.
Moreover, Josh mentioned that perfect.
I will mention again.
For my presentation for the quarter's results.
Adjusted net income attributable to common shareholders includes a 10% dividend charge of $7 million for the year.
Hey.
Our full redemption of our preferred shares.
After that redemption, our capital structure has been simplified includes only bank debt and common equity.
Let's now turn to slide 16 to review our fleet performance.
We will start our review by looking first at our fleet utilization rates.
Fourth quarter of 2020 in 2021.
As usual.
Utilization rate is broken down to Comercio my passion.
During the fourth quarter of 2021, our commercial utilization rate a horse.
19, 98% right now first of all utilization rate.
Nine 5% compared to 100% commercial and 99, 9% operational for the fourth quarter of last year.
On average 90 vessels were owned and operated during the fourth quarter of 2021.
An average time charter equivalent rate of 29001 content and $57 per day compared to seven vessels.
Don't think that in the same period of 2020.
<unk> and <unk>. Thanks.
Time charter equivalent rate of 10000.
<unk> hundred $61 per vessel per day.
The three fold increase in charter rates between the two years.
Our total daily operating expenses, including management fees general and administrative expenses.
<unk> costs.
<unk> $6624 per vessel per day during the fourth quarter of 2021 compared to $6258 per vessel per day for the fourth quarter of 2020.
And when you have a phone on this team.
We can see the cash flow breakeven rate that we hit during the fourth quarter of this year, which takes into account onshore.
Pansies cost center and expenses.
Repayments and preferred dividend payments is paid in cash.
Thus for the fourth quarter of 2021 are the customer flow breakeven rate was about <unk> <unk>.
<unk> hundred $25 per vessel per day compared to $9574 per vessel per day for the fourth quarter of 2020.
Let's now look on the right part of the slide.
I'm sure the same figures for the fleet for the full year.
During 2021, our commercial utilization rate was 99, 9% while on operational was 99, 6% compared to 100% commercial and 99, 7% operational for 2020.
On average seven nine vessels were owned and operated during 2021 and.
Time charter equivalent rate of $24222.
Back to seven vessels.
Owned and operated during 2020 and can now on average $9397 per vessel per day.
Our total operating expenses again, including management fees G&A expenses, but excluding drydocking cost for 2021 amounted to six $456 per vessel per day compared to $6211 per vessel per day for.
2020.
Let's look again at the bottom of this table.
Low breakeven rate for the year, which amounted to.
<unk> thousand 700 <unk>.
The $8 per vessel per day in 2021 compared to 2000.
$800 for this for 2020.
Let's move now to slide 17.
Turning to slide for the last year.
And to serve as a calculation tool to enable our shareholders and investors to assess the earnings potential of our fleet.
Coming here and under the current environment.
The table shown in this slide here two components I will briefly explain it took part.
First to our fixed rate contracts as you can see our.
Cockpit Calvert fixed rate contracts is about 19% for the year and about 50% for the first quarter, but declined to 14 and 10% in the second and third quarters and he is very fair.
Yes.
In the fourth quarter.
This chartering strategy reflects our expectation that the.
The market will remain strong.
Levels indicated.
Forward freight markets.
The rest of our <unk> contracts are hanging on.
To their size value bulk.
Baltic dry index.
Our calculator and think actively shows further below that show Panamax and Panamax Baltic for AIDS.
So February eight 2022.
In essence industrial shows how this index levels get translated to <unk>.
We actually show here the final blend to Tate <unk> Lyle.
For the open days of our fleet, which you can see below the <unk> and panamax footwear, aged in the table.
Based on these assumptions and my father, assuming for simplicity.
$67 per vessel per day, operating and G&A costs, and a 5% commission rate one can estimate.
The contribution of the EBITDA over the opening of our open days.
The final result is additionally, adaptive trial preliminary dry dock expenses expected during 2022.
This overall exercise is meant to provide a seamless to calculate our EBITDA for this year.
One can lenders seizure, Cheryl and assumptions about the age to do that.
Because rooftop share of ink.
H, one would expect 90 million lives EBITA.
That is our boulevard that we recorded in 2021.
Furthermore, one can use this calculator to estimate the dependence of our 2022 EBITDA to.
The average eight and by our open days for example, it seems if $1000 per day and the algorithm.
Right.
By our open days would result in about $2 8 million change in our 'twenty to 'twenty two EBITDA.
Next I'll move to slide 18 to review our debt profile.
On the top part of this.
We can see our loan.
The loan repayments of our bank debt.
As of September 31st 2021, we hit an outstanding bank debt of about 7.9.
9 million media.
By looking at the chart, we can see that we hit payments between that we kept debt repayments between 10 and $14 1 million over the next year.
Over the next three years before our loan repayments dropped to between $5 4 billion in 2024 and 2025.
Our next balloon payment is towards the end of 'twenty transitory.
$11 3 million and factory fast to one of our comes from Oxford vessels, we expect to be.
Able to refinance.
<unk> payment as we have done.
Previews locations.
A quick note here on the cost of our funding the cost of our debt.
The annualized margin of our debt is about two 8%.
Assuming a LIBOR rate of about three.
3% on the top of it we can estimate the cost of our bank debt to be around three 1%.
At the bottom of this slide.
We can also see a projection of our customers for our cash flow breakeven level for the next 12 months, which which are expected to be around $25000 per vessel per day, you can see the components that make up that breakeven level.
This now conclude by moving to slide 19.
Where we can see some highlights from our balance sheet in a scene.
Unified way.
This slide shows a snapshot of our assets and liabilities.
On our asset side, you can see that we have cash and other assets of about $32 6 million.
And also the book value for our vessels.
$28 5 million.
Making our total book.
Our total book value of our assets.
The 106 to $1 3 million.
On the liability side.
Our debt as of December 31st 2021.
<unk> hundred $79 4 million, which approximately represents 49, 3% of the book value of our assets.
Accounting for other liabilities.
December 31st 2021 of three eight media, we can get a book value and net book value.
Of $17 million, which translates to 26 $8 percent. However, we estimate that actually the end of December 2021, the market value of our of our nine vessels was about the content and 82 million that is 42% higher.
And with respect to book values Chuck testing.
Many of your percent should be around 45, 3%.
And although our share price condition to increase and trade at around 24 to $25 dipping significantly below the level of what we estimate it to be.
Thus potentially representing a significant appreciation opportunity to our shareholders.
And with that comment I would like to turn the floor back to activities to continue the call.
Thank you Tassos lithium you open up the floor for any questions you may have.
Thank you, ladies and gentlemen, I remind you. Please see if you'd like to ask a question. Please press star one on your telephone.
And your first request is from the line of Tate Sullivan from Maxim Group. Please go ahead.
Hello, Good day Kosmos their skus.
Hi.
Hi.
Hi, starting on that.
I don't have in the past since you introduced the EBITDA calculator and tops is can you just go over a couple of changes I apologize if I missed it on the indicative drydocking costs I do not think you included those.
In the January presentation, and also a slight increase in the Opex and G&A vessel per day cost from 6500 6700 can you can you just walk over why you decided to make those changes.
With.
Regarding the Drydocking cost. We always included then simply in 2021, we had very almost no drydocking expenses.
So that's why we have included them in.
Absolutely.
We didn't characterize our expenses.
In 2020, but not everybody expects 2021, so it was.
To meet the various more defense since I can't read it at least an explicit EBITDA calculator for 2022.
Something to that.
Take into account.
Different from other presentations, our order rates, our EBITDA is net of Drydocking expenses.
And we increased the est.
Estimate for Opex, and G&A costs, partly to be conservative.
As we have seen some increases in the cost in Q2 grew into another.
Another development.
And then.
For the Q1 EBITDA on the same slide does that include the gross to ballast bonus for the Alexandra to ship or how will you account for that.
Okay.
Sure sure.
Thank you.
Obama sponge.
Okay, Great and then.
The acquisition of the molecules luck, you announced at a little after January 21, two is all of that cash coming out of your cash flow statement in this current quarter.
Or was there a susquehanna wildlife side of it.
Tend to find that as about half of the acquisition costs.
Bank debt, but we'll do it after the acquisition we will pay for the vessel with content. We currently have in our balance sheet.
Thank you.
Steve I'll update you more you gave some comments before I mean in your career and shipping and then increase the rapid increase in the cash on your balance sheet.
Have you seen that before and would you say you continue to evaluate balancing that between acquisitions. If you can still forecast positive.
Going forward versus repurchases.
Can you give an update on putting this in context and Youre shipping.
Sure.
The last time.
We saw.
Significant activity.
<unk>.
It was really back in 2000.
Six and seven.
So that was the last three years when we saw.
A significant.
Good.
In the cash position and that was the day, where we managed to grow the company.
Hello.
Seven vessels.
To about 20 vessels by the end of that.
<unk>.
Again, we are seeing it now.
We think that it will be viewed listen local community to continue growing the company.
Which is the primary task, but we have to always do it cautiously and conservatively.
Because we know housekeeping used and how things can change when nobody expects them to change we don't expect that change we cannot foresee what we could close that protection.
But.
You always have to be so we got to maintain the strong balance sheet.
Therefore keep enough liquidity in the <unk>.
In hand, and also keep leverage low.
But at the same time NBA boot to grow the company.
We did see the.
Also instituting.
Yes.
The buyback program.
Our last board meeting.
We didn't we decided the gains to be.
At CN because of the surprise datasets to gradually Quebec.
These.
We think very low but.
It's come off.
It looks to be moes that would rather subsys scheme to be.
To be implemented it's still very low so.
We decided against it.
Growth of the company, we think is more important.
Thank you and just a follow up on that.
Going.
Through this current cycle with leverage net debt to EBITDA.
Below two times to end the year in our forecast going at well below one times with no acquisitions.
What debt ratios are you looking at.
What would you like to have through cycles. If you could put that in context, how youre looking at in a group of markets in the group market.
We would want to see that going down to below 30% less revenue.
<unk>.
Because we've got protection in the market.
Price is dropping it can easily go to above 50% this prices.
Based on the invest in prices, so we should be always below that.
You've been saying.
Based on that.
Prices.
Okay.
Alright. Thank you. Thank you Bob.
Follow up question.
Thank you Dave.
Thank you.
Next question is from the line of Paul fraud of Noble capital markets. Please go ahead. Your line is now open.
Good morning, Eric Good morning concept.
<unk> from noble capital markets.
Good morning.
Could you you have done a good job of expanding the fleet and enhancing its leader over the last couple of quarters can you talk about.
How the S&P market looks right now.
And what we should expect in activities.
And as the fleet grows there's the potential to sell some of the.
The oldest assets come into view can you just talk about sort of fleet composition in the context of <unk>.
What the current S&P market looks like.
Yes, it's difficult to say because it's a very dynamic.
<unk>.
It's something that we evaluate.
Both during the quarter and of course.
<unk>.
I'll go through board meetings so.
Due to say what has happened and what we have seen is we saw the market go back as you said as we've seen as we've witnessed during the last quarter.
It was developed that we expected because seasonally we do expect the growth exiting the market may be being stronger than the <unk> than what we all expected.
We think that we will see.
Yes.
James going forward within the strong demand.
As we go into.
Into Q2.
As historically seasonally happens.
So prices did grow back a little bit and we think we took advantage of that in buying these vessels that we did.
We have to see how it develops within Q2.
Because things go in five a little.
Lee.
And.
As the market strengthens we will be making more money and then we would be having more money available to grow with prices will be higher so already it's a difficult balancing act.
If this happens we are also Columbus, who says you can say that.
Couple of other vessels.
The over 20 years of age and we will need to replace them. So.
You can see now the mines that we might need to swap.
May be one or two above as the vessels with the gap in the younger vessels.
That's also good evening the fleet a little bit its a possible action, but we don't have any particular the decisions made yet so I don't want to say more.
Other than what I told you that really considering all of these options.
Great.
And maybe you could just highlight the activity on that front.
What drove you to close out the.
At that day that you had in place for the <unk>.
First quarter 'twenty two in the fourth quarter and then does this mean you don't have any FX stays in place right now.
And then Gordon.
We have nothing in place right now we use the FF phase only as their heads.
We never bake any any FSA position on <unk>.
Speculation.
We think it only as a hedge so only to fix against open days that we have on the ships.
That's what we did.
When we thought that $30000, we could the peaks.
We could fix Q1, one of our ships it seemed a good idea. It was a good idea we did then.
When after two weeks of time when the market develops that much we said well, let's get this nice profit of $750000 and we closed that position.
And the return to.
The vessel into the market so.
In retrospect, it would have been better to help get that position because we would have.
To get because of him vascepa than it would have made more money but.
We were happy with the profit.
And then Erik Stevens with with a larger fleet.
Is this.
Does your view on hedging changed at all.
With more open days do you think that Youll do more hedging in the future or do you get better hedging can be done also by fixing.
Times the base is today, so we will not only be doing it through with a phase. We are also doing it and can do it on fixing times out there.
Exactly the same because of.
So you see the good cloud, we fixed that vessel.
For they used such that a $25000 a day.
During the last quarter that is also hedging now to position to an extent we are not very much hedged. We are only as you saw a 19% covenants for 2022, which is not a lot.
We still think we want to be quite open.
But you can expect that you will see us within <unk>.
Q2, which is traditionally quite strong month to increase that cargo.
Even through a phase of Hu <unk>.
Understood and then tacos.
It looks like you're aiming to finance about 50% of the.
The latest acquisition.
Typically when you line up in acquisition. It seems like you have the terms pretty well.
If not fixed at least preliminary terms would you be able to share any preliminary terms on.
The new debt that you.
Might be looking at.
Im asking.
Doug your fixed I understand this time around because we have enough cash to buy the vessel outright and finance it after the acquisition as we mentioned, but we expect to see.
And LIBOR margin to be between two and 2.5%, we're looking to finance about 50% of the vessel.
And do you think you can get five year, five year term or sort of what what should we be thinking about sort of.
I'm sure we'll get four.
The five year term.
The loan and the profile up to the age of 16 17.
Great.
Thanks for your time.
Thank you guys. Thank you Paul.
Thank you.
No further questions at this time.
The meeting back to Mr.
Peter.
Any closing remarks.
Thank you all for being with us for.
Globally really gone and will be with you doing well.
<unk>.
To discuss Q1 results.
Thank you.
Thanks, everybody.
That concludes the presentation. Thank you for participating.
Disconnect.
[music].
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