Q4 2021 Seanergy Maritime Holdings Corp. Earnings Call

Thank you for standing by welcome to the synergy Maritime Holdings Corp, fourth quarter, 'twenty, 'twenty, one and full year financial results presentation.

Thank you for standing by. Welcome to the Synergy Maritime Holdings Corp fourth quarter 2021 and full year financial results presentation.

Many of the remarks today contain forward-looking statements based on current expectations.

Many of our remarks today contain forward looking statements based on current expectations. These statements may often be identified with words, such as expect anticipate believe or similar indications of future expectations.

These statements may often be identified with words such as expect, anticipate, believe or similar indications of future expectations.

Although such forward-looking statements are considered to be reasonable, the company cannot assure you that any forward-looking statements will prove to be correct.

Such forward looking statements are considered to be reasonable the company cannot assure you that any forward looking statements will prove to be correct.

forward-looking statements are subject to known and unknown risks and uncertainties and other factors many of which are beyond the company's ability to control or predict.

But looking statements are subject to known and unknown risks and uncertainties and other factors many of which are beyond the company's ability to control or predict.

Please refer to the company's annual report on Form 20F and other filings with the Securities and Exchange Commission, which discuss many of these risks and unsets.

Please refer to the company's annual report on form 20-F, and other filings with the Securities and Exchange Commission, which discuss many of these risks and uncertainties.

Should one or more of these risks or uncertainties materialise, or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those the company expresses today.

Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove to be incorrect actual results may vary materially from those expressed today.

In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned to not place undue reliance on these statements.

And I took the uncertainties inherent in any forward looking statements listeners are cautioned to not place undue reliance on these statements. The company undertakes no obligation to revise or update any forward looking statements, whether as a result of new information or future events and the earnings presentation. Today. The company may reference non G. A a P.

The company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information or future events.

In the earnings presentation today, the company may reference non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted Net Income and TCE rates.

Financial message such as EBITDA adjusted EBITDA, adjusted net income and TCE rate for a full reconciliation of the non G. A a P matches to G. A a P measures. Please see the company's eddings release posted to the new section of the website earlier today.

For a full reconciliation of the non-GAAP measures to GAAP measures, please see the company's earnings release posted to the news section of their website earlier today.

Finally, the financial results presentation to be discussed today is available on the Investor Relations section of the company's website.

Finally, the financial results presentation to be discussed today is available on the Investor Relations section of the company's website.

Speaker Change: I would now like to hand the conference over to your speaker today, Somatas Santanis.

I would now like to hand, the conference over to a speaker today similar to some Chinese. Please go ahead.

Somatas Santanis: Hello everyone and welcome to our conference call for the fourth quarter and full year of 2021.

Hello, everyone in.

And welcome to our conference call for the fourth quarter and full year of 2021.

Somatas Santanis: Today we are presenting a great earnings release with record financial figures and initiation of dividends.

Today, we are presenting a great earnings release with record financial figures and the initiation of dividends.

Somatas Santanis: I must say, however, that we would prefer this release to have happened during a period of global peace and stability.

I must say, however that we would prefer to just at least to have happened during a period of global peace and stability.

Susan the opportunity I want to express our wishes for a quick ceasefire British military operations in Ukraine.

Somatas Santanis: Seizing the opportunity, I want to express our wish for a quick ceasefire of the recent military operations in Ukraine.

Somatas Santanis: In the fourth quarter of 2021, Synergy had another exceptional financial performance, ending with a record year for the company.

In the fourth quarter of 2021, since you've had another exceptional financial performance ending without equity or for the company.

Somatas Santanis: The main drivers for these record results were our increased fleet capacity, our improved capital structure and, of course, a favourable cape size market.

The main drivers for these record results were our increased fleet capacity and improved capital structure and of course, if favorable capesize market.

Somatas Santanis: On this note, I am very pleased to also announce the payment of a quarterly dividend of 5 cents per share, consisting of a regular dividend and a special dividend, as I will describe later.

On this note I'm very pleased also announced the payment of a quarterly dividend of <unk> per share consistent with what they grew up dividend special dividend as I will describe later.

Somatas Santanis: Moreover, we are repurchasing $5 million more of the remaining convertible note, which completes a program of approximately 26.7 million of securities buybacks since Q4 2021.

Moreover, we are repurchasing $5 million more of the remaining convertible note, which completes the broken up of approximately $26 7 million of securities buybacks since Q4 2021.

Somatas Santanis: We are therefore delivering on our commitment to reward and return capital to our shareholders.

We have therefore, delivering on our commitment to reward and return capital to our shareholders.

Somatas Santanis: As mentioned in my introduction, 2021 has been a record year for Synergy in terms of operational and financial results.

As mentioned in my introduction close them into one there's been a record year for synergy in terms of operational and financial results.

Somatas Santanis: More specifically, in the quarter ended December 31st, 2021, we generated net revenue of 56.7 million, with the respective full-year figure reaching 153.1 million, an increase of 142% versus the full year of 2021.

More specifically in the quarter ended December 31, 2021, we generated net revenue of $56 7 million with respect to full year figure reaching $153 million.

The increase over 142% versus the full year of 2013.

Somatas Santanis: An even more pronounced increase was marked on our adjusted EBITDA, with 38.8 million recorded in Q4 and 90.1 million on a full-year basis, and that represents 478% higher than the 2012 figure.

And even more pronounced increase was marked on our adjusted EBITDA was $38 8 million recorded in Q4.

$91 million on a full year basis and that represents 478% higher.

Then the 2020 respective figure.

Somatas Santanis: Our fleet achieved a daily time chatter equivalent of $36,600 in Q4, with a daily TCE standing at $27,400 for the full year of 2021.

Our fleet achieved a daily time charter equivalent.

<unk> $6600 in Q4 with a daily P C standing at 27400 for the full year of 2021.

Somatas Santanis: Over the last 18 months, we increased our fleet capacity by 70%, growing from 10 to 17 Cape-sized vessels, to a total investment of about $205 million.

Over the last 18 months, we've increased our fleet capacity by 70% growing from 10% to 17 Capesize vessels, two with total investments of about $205 million.

Somatas Santanis: Needless to say that the timing of our acquisitions has been impeccable and Synergy has the lowest fleet book value per deadweight among its listed dry peers.

Needless to say the timing of our acquisitions has been impeccable and synergy has the lowest fleet book value per deadweight among its listed dry peers.

Somatas Santanis: Despite the substantial growth, we reduced the loan-to-value overflip from 80% to around 42% as of the end of 2021, and we expect this to continue to reduce sharply in 2022.

Despite the substantial growth, we reduced the loan to value of our fleet from 80% to around 42% as of the end of 2021, and we expect this to continue to.

Sharply in 2022.

Somatas Santanis: Our new financing transactions have totaled more than 170 million while the weighted average interest cost has been reduced by approximately 130 basis points year over year.

Our new financing transactions have totaled more than $170 million.

While the weighted average interest cost has been reduced by approximately 30 basis points year over year.

Somatas Santanis: All of our fleet operates in period employment with some of the world's largest rival charters.

All of our fleet operating period employment with some of the worlds largest drybulk telcos are unique agreements allow the ships.

Somatas Santanis: Our unique agreements allow the ships to earn the increased market rates, while we hedge some of the downside risks with fixed time-shutters and conversions from floating to fixed rates.

Increased market rates, while we had some of the downside risk with fixed time charters and conversions from floating to fixed rates.

Somatas Santanis: We have built a great cooperation with our clients and, in many cases, we are investing on our ships for the installation of scrubbers and energy-saving devices together with our clients.

We have built a great cooperation with our clients and in many cases, we are investing on our ships for the installation of scrubbers, and then energy saving devices together with our clients.

Somatas Santanis: We have been pioneers in improving the energy efficiency index of our existing fleet since 2018.

We have been pioneers in improving the energy efficiency index of our existing fleet since 2018.

Somatas Santanis: and we continue to make progress on the installation of energy-saving devices at every vessel scheduled dry dock.

We continue to make progress on the installation of energy saving devices at every peso scheduled dry dockings.

With regards to our reentry program. These energy saving projects are undertaken incorporation of without charters.

Somatas Santanis: With regards to our ESG program, these energy-saving projects are undertaken in cooperation with our Charters and are usually underpinned by agreements to increase daily earnings to reflect the improved performance of our vessel.

Usually underpinned by agreements to increase daily earnings reflect improved performance over the vessels.

Somatas Santanis: We have also initiated testings of biofuels on our cape sizes since last August with two of our charters.

We have also initiated testings of Biofuels or Cape sizes since last August with two of our charters.

Somatas Santanis: We will continue to be at the forefront of initiatives to reduce the environmental footprint of the ships in cooperation with our clients.

We will continue to be at the forefront of initiatives to reduce the environmental footprint of the ships in cooperation with our clients.

Somatas Santanis: Additionally, we have also employed a pilot solution to measure the carbon savings achieved by the improvements made on our vessels, and of course to monetize from that, as well as artificial intelligence on all of our vessels.

Additionally, we have also employed pilot solution to measure the carbon savings achieved by the improvements made in our vessels and of course, the monetize from that.

Well as artificial intelligence and all of our vessels.

Somatas Santanis: Our company CSG report will be released within 2022 and will provide more details on the initiatives that Synergy has successfully completed to date, as well as our targets going forward.

Our competencies G report will be released within 2022, and we'll provide more details on the initiatives that <unk> has successfully completed to date as well as our targets going forward.

Somatas Santanis: As I mentioned earlier, we are delivering on our commitment to reward our shareholders with tangible returns.

As I mentioned earlier, we are delivering on our commitment to reward our shareholders with tangible returns.

Somatas Santanis: So today we are declaring a quarterly dividend of 5 cents per share.

So today, we're declaring a quarterly dividend of <unk> <unk> per share.

These types consist of.

Somatas Santanis: the initiation of a regular quarterly dividend of 2.5 cents per share.

The initiation of a regular quarterly dividend of two and a half cents per share.

Somatas Santanis: as well as a special dividend of 2.5 cents per share for our performance in Q4 2021.

As well as a special dividend of <unk> <unk> per share for our performance in Q4 2021.

Somatas Santanis: The total dividend of 5 cents per share will be paid on April 5, 2022 to shareholders of record at the closing of March 25, 2022.

The total dividend of five cents per share will be paid on April 15, 2022 to shareholders of record at the closing of March 25 2022.

Somatas Santanis: Given the positive dynamics of the dry bulk market and our improved balance sheet, I am confident in the sustainability of such capital returns.

Given the positive dynamics of the dry bulk market and our improved balance sheet I am confident in the sustainability of such capital returns.

Somatas Santanis: In addition to the dividend, we have also scheduled another buyback of 5 million of our outstanding convertible notes, which will be completed concurrently with the dividend payment.

In addition to the dividend we have also scheduled another buyback of $5 million of our outstanding convertible notes, which will be completed concurrently with a dividend payment.

Somatas Santanis: Thus, we complete a program of approximately 26.7 million of securities buybacks since Q4 2021, which is very impressive.

Thus, we complete a program of approximately $26 7 million of securities buybacks. Since Q4, 2010 to us which is very impressive.

Somatas Santanis: Going forward, I expect the mix of capital returns between dividends and buybacks to depend mainly on the dynamics of our share price.

Going forward I expect the mix of capital items between dividends and buybacks to depend mainly on the dynamics of our share price.

Somatas Santanis: Moving to an update on commercial developments, in Q4 2021, our CAPE sizes made an average time chatter equivalent exceeding $36,600 per day, which was our highest in 12 years.

Moving to an update on commercial development in Q4 2021, our Cape sizes made the number its time charter equivalent exceeding $36600 per day, which was our highest in 12 years.

Somatas Santanis: In addition, we have concluded 11 new time-charter agreements with leading charters and we have 15 of our 17 vessels employed on time-charters linked to the Baltic Cape Size Index. Two of our vessels are employed on fixed rates at daily levels.

In addition, we have concluded 11, new time charter agreements with leading charters and we have 15 of our 17 vessels employed on time charters linked to the Baltic Capesize index.

Two of our vessels are employed on fixed rates.

Daily levels exceeding $30000 a day.

This strategy ensures a very high fleet utilization, while we attack the Capesize index closely as charter rates rise.

Somatas Santanis: This strategy ensures a very high fleet utilization while we track the Cape Size Index closely as charter rates rise.

Somatas Santanis: In many cases we have embedded options to fix the daily earnings from floating to fixed and we have exercised our option constructively in order to hedge a portion of our earnings from time to time.

In many cases, we have embedded options to fix the daily earnings from floating to fixed and we have exercised our option constructively in order to hedge a portion of our earnings from time to time.

Somatas Santanis: Our estimated time charter equivalent rate for the first quarter of 2022 is approximately $19,500 a day, which is 47% higher than the average BCI index year-to-date.

Our estimated time charter equivalent rate for the first quarter of 2022 is approximately $19500 a day, which is 47% higher than the average BCA index year to date.

Somatas Santanis: This assumes the remaining operating days of our index-linked TCEs will be equal to the current FFA rate.

This assumes the remaining operating days of our index linked Pcs will be equal to the current FFA rate.

Somatas Santanis: Another point I want to make is that the FFA average for the remaining of the year stands at around $32,200 per day, and if this materializes for the full year, our annual EBITDA may exceed $130 million, as our CFO Stavros Giftakis will explain shortly.

Another point I want to make is that the FSA average for the remaining of the year stands at around 52200 Boes per day and if this materializes for the full year, our annual EBITDA may exceed $130 million as our CFO established gift taxes will explain shortly.

Stavros Giftakis: Stavros will now offer more details on our financial reports and financing activities and it's now time to pass the floor to him.

<unk> will now offer more details on our financial reports and financing activities and it's now time to pass the floor to him I.

Stavros Giftakis: I will come back towards the end of the call for the market update. So Stavro, please go ahead.

I will come back towards the end of the call for the market update so tableau. Please go ahead.

I think some of us let.

Stavro: Let me first welcome everyone to our fourth quarter and full year earnings call for 2021. We will start by reviewing the main highlights of our financial statement.

Let me first welcome everyone to our fourth quarter and full year earnings call for 2021, we will start by reviewing the main highlights of our financial statements.

Stavro: In the fourth quarter, the continued strength in the dry bulk market resulted in record financial performance for our company.

In the fourth quarter. The continued strengths in the dry bulk market resulted in record financial performance for our company.

Stavro: Net vessel revenue was equal to $56.7 million, marking an increase of 166% from Q4 2020.

Net revenue was equal to $56 $7 million, marking an increase of 166% from the fourth quarter of 2020.

Stavro: As mentioned earlier by Stamatis, our daily time charter equivalent for the quarter was $36,600, increased by 122% when compared to $16,500 for the fourth quarter of 2020.

As mentioned earlier by semi piece, our daily time charter equivalent for the quarter.

$36600 increased by 122% when compared to $16500 for the fourth quarter of 2020.

Stavro: Adjusted EBITDA in the fourth quarter was approximately $39 million, up from $8.3 million in the same quarter of 2020, and net income for the quarter was a record $20.6 million compared to a net loss of $2.3 million in the same quarter last year.

Adjusted EBITDA in the fourth quarter was approximately $59 million.

Up from $8 3 million in the same quarter of 2020 and net income for the quarter was a record $26 million compared to a net loss of $22 3 million in the same quarter last year.

Stavro: During the quarter, we recorded a one-time non-cash loss associated with the buyback of the convertible notes, which amounted to $6.9 million.

During the quarter, we recorded a onetime noncash loss associated with the buyback of the convertible notes, which amounted to $6 9 million.

Stavro: Adjusted for this item, net income for the quarter was equal to $27.9 million.

Adjusted for this item net income for the quarter was equal to 27 9 million.

Stavro: For the 12-month period that ended December 31, 2021, we recorded a daily time charter equivalent of $27,400, compared to $11,950 in the corresponding period of 2020.

For the 12 months period that ended December 31st 2021, we recorded a daily time charter equivalent of 27400 <unk>.

Third to $11950 in the corresponding period of two <unk> net.

Stavro: Net revenue was equal to 153.1 million, an increase of 142% from 63.3 million in the last year's corresponding interim period.

Net revenue was equal to $153 1 million, an increase of 142% from $63 3 million in the last few years corresponding interim period.

Stavro: Adjusted EBITDA up for 2021 was 90.1 million up to 15.6 million in 2020.

Adjusted EBITDA for 2021 was 91 million up from $15 6 million in 2020.

Speaker Change: I would like to also point out that the adjustment in the full year period also includes a 5.1 million non-cash charge for stock-based compensation under our GNA expenses.

I would like to also point out that the adjustment in the full year period also includes a $5 1 million noncash charge.

Look based compensation.

Our G&A expenses.

Speaker Change: Lastly, net income recorded in the period was equal to $41.3 million as compared to a net loss of $18.4 million in 2020. The year-over-year percentage increase in adjusted EBITDA of about 478% over a 129% increase in RTCE is a good demonstration of our company's significant operating leverage.

Lastly, net income recorded in the period was equal to $41 3 million as compared to a net loss of $18.4 million in 2020.

The year over year percentage increase in adjusted EBITDA for both <unk> hundred 78% over the 129% increase in the PC is a good demonstration of our company significant operating leverage.

Speaker Change: Average daily operating expenses, excluding pre-delivery expenses, rose to $6,211, up by 9% compared to full year 2020.

Average daily operating expenses, excluding pre delivery expenses rose to $6211.

Up by 9% compared to full year 2020.

Speaker Change: As discussed previously, we take a full-year approach on changes in our OPEX, avoiding the volatility from quarter to quarter, which may be associated with various factors, such as timing of purchases or the timing of crew changes.

As discussed previously we take a full year approach on changes in our opex, avoiding the volatility from quarter to quarter, which may be associated with fly. These factors such as timing of protease is all the time with crew changes.

Speaker Change: Leaving aside the increased costs having to do with integrating a number of new vessels in our operating and technical management platforms and for upgrading, of course, the technical condition of these new units to our and our clients' standards, we have identified three main factors behind the increase in daily OPEX versus last year.

Leaving aside the increased costs, having to do with integrating a number of new vessels in our operating and technical monitoring platforms and upgrading of course, the technical condition of these new units to our client standards.

Have a densify three main factors behind the increase in daily Opex versus last year.

Speaker Change: Firstly, we have incurred ton of tax expenses for certain vessels.

Firstly, we have incurred total effects expenses for certain vessels.

Speaker Change: whose technical management has been transitioned in-house from a third-party technical manager.

Cyclical maintenance Mint has been transitioned in house from a third party technical maintenance it.

Speaker Change: Secondly, several of our vessels incurred additional insurance expenses due to supplementary calls from the respective PNI clubs which were at cider control and expect to be non-recurrent.

Secondly, several of our vessels incurred additional insurance expenses Butte supplementary calls from their respective being nightclubs, which were outside their control and expect to be non recurrent lastly crew related expenses have gone up due to the pandemic and associated.

Speaker Change: Lastly, crew-related expenses have gone up due to the pandemic and associated hurdles in timing crew changes, additional crew traveling and accommodation expenses due to quarantine measures, and other restrictions in the various ports of call.

<unk> in timing crew changes additional crew travel and accommodation expenses due to quarantine measures and.

The restrictions in the vital ports of call.

Speaker Change: Moving on to our debt and financial expenses, we have managed to decrease our interest expense both in the fourth quarter of 2021 and in the full year period versus the previous year.

Moving more towards debt and financial expenses, we have managed to decrease our interest expense both in the fourth quarter of 2021 and can this period versus the previous year.

Speaker Change: Focusing on the cash interest expense, which excludes non-cash charges, in the fourth quarter of 2021, the company incurred approximately 2.9 million of cash interest and finance costs.

Focusing on the cash interest expense, which excludes noncash charges in the fourth quarter of 2021, the company incurred approximately $2 9 million of costs interest and finance costs.

Speaker Change: down from 4.1 million in the fourth quarter of 2020.

Down from $4 1 million in the fourth quarter of 2020.

Speaker Change: To highlight the positive impact of our increased scale, the interest expense per operating day in the 4th quarter of 2021 was $1,900 as compared to $4,060 in the 4th quarter of 2020.

To highlight the positive impact of our increased scale. The interest expense per operating day in the fourth quarter of 2021 was $1900 as compared to $4060 in the fourth quarter of 'twenty 'twenty.

Speaker Change: For the 12-month period that ended on December 31, 2021, interest and finance expense, excluding non-cash items, was equal to 11 million when compared to 15.8 million in the last year.

For the 12 months period that ended on December 31st 2021 interest and finance expense, excluding noncash items was equal to $11 million when compared to 15.8 million in the last year.

Speaker Change: We are very pleased to see the significant reduction with this tangible demonstration of the benefits of the recent debt repayments and refinances.

We are very pleased to see the significant reduction which is tangible demonstration of the benefits of the recent debt repayments and refinancings.

Speaker Change: Given that these transactions have taken place within 2021, we expect to see further reductions in interest expenses in 2022 as we lap a full year with a new financing arrangement in place.

Given that these transactions have taken place within 2021, we expect to see further reductions in interest expenses in 2022, as we lap a full year with the new financing arrangements in place.

Speaker Change: Moving on to illustrate the improvement in our balance sheet position, the debt outstanding per vessel has been decreasing consistently over the past three years, a trend which accelerated

Moving on to release dates improvements in our balance sheet position.

The debt outstanding per vessel has been increasing consistently over the past three years.

It trends, which accelerated in 2021.

Total debt outstanding was approximately 240 million as of the end of 2021, when the fleet of 17 vessels with a total scrap value of approximately $240 million. This compares with 212 million outstanding debt at the end of 2021 the fleet of 11 vessels.

Speaker Change: Total debt outstanding was approximately $240 million as of the end of 2021, on a fleet of 17 vessels, with a total scrap value of approximately $240 million. This compares with $212 million outstanding debt at the end of 2020, on a fleet of 11 vessels, with a total scrap value of $156 million. Adjusted for today's scrap.

With a total scrap value of $156 million at.

Adjusted for today's scrap prices data funding per vessel at the end of 2021 was $14 1 million against $19 3 million at the end of 2020.

Speaker Change: Debt outstanding per vessel at the end of 2021 was $14.1 million against $19.3 million at the end of 2020.

Speaker Change: At the same time, average market value per vessel as of December 31st 2021 was approximately 30.4 million up from about 17.7 million at the end of 2020.

At the same time I really its market value per vessel as of December 31st 2021 was approximately $30 4 million up from about $17 7 million at the end of <unk> 'twenty.

Speaker Change: Furthermore, Synergy has cash and cash equivalents of approximately $47 million at the end of 2021 compared to about $24 million at the end of 2020.

Furthermore, synergy has cash and cash equivalents of approximately $47 million at the end of 'twenty to 'twenty, one compared to about $24 million at the end of 2020.

Speaker Change: Total shareholder equity has increased to $245 million as of December 31, 2021, from $95.7 million at the end of 2020.

Total shareholders' equity has increased to $245 million as of December 31, 2021 from $95 7 million at the end of 2020.

Speaker Change: The increase in vessel values since the start of the year means that the market value for fleet is higher than the book value as of the latest balance sheet date.

The increase in vessel values.

Since the start of the year means that the market value for our fleet is higher than the book value as of the latest balance sheet date.

Speaker Change: The market value adjusted equity is therefore higher than what is reflected on our balance

And finally adjusted equity is therefore higher than what is reflected on our balance sheet.

Speaker Change: Based on third-party broker valuations as of the end of December , the market value of the seven vessels that were acquired this year has already appreciated by approximately 30 million since their acquisition.

Based on third party broker valuations as of the end of December the market value of the seven vessels that were acquired this year has already appreciated by approximately $30 million since the acquisition.

Speaker Change: I view this as a clear demonstration of the successful timing in our move to rapidly expand the fleet in 2021, as highlighted previously by our CEO .

I view this as a clear demonstration of the success with timing moved to rapidly expand the fleet in 2021 as highlighted previously by our CEO .

Speaker Change: Based on the market values for our fleet as per December 31st, our corporate leverage is estimated at approximately 43%.

Based on the market values for our fleet is good December 31st our corporate leverage is estimated at approximately 43%.

Speaker Change: It is encouraging to see the improvement in our balance sheet metrics during a time when the company has expanded aggressively and this constructive development has played an important role in determining our capital returns policy.

It is encouraging to see the improvement in our balance sheet metrics. During a time when the company has expanded aggressively in this constructive development has played an important role in determining our capital returns policy.

Speaker Change: As an update on our convertible notes, since the fourth quarter of 2021, we have retired 19 million, while we have scheduled to retire an additional 5 million imminently.

As an update on our convertible notes since the fourth quarter of 'twenty 'twenty. One we have retired 19 million, while we have scheduled to diet and additional 5 million imminently.

Speaker Change: As of the balance sheet date, approximately 1.85 million remained outstanding at our junior loans, which were fully repaid recently.

As of the balance sheet date, approximately 185 million remained outstanding at all to new loans, which was fully repaid recently.

Speaker Change: I would now move on to discuss the financing transactions that have taken place since our last update in November .

I would now move on to discuss the financing transactions that have taken place since our last update in November .

Speaker Change: Within November , we closed the sustainability-linked loan with Piraeus Bank, which was utilized to refinance part of the acquisition cost of the world ship.

Within November we'll close the sustainability linked loan with <unk> Bank, which was utilized to refinance part of the acquisition cost of the wood chip VR.

Speaker Change: The already competitive pricing of 3.05% can be reduced depending on the CO2 emissions of our vessel.

The only way the competitive pricing of 3.05% can be reduced depending on the siem two emissions of our vessels.

Speaker Change: It is good to see that our commitment in reducing the carbon footprint of our operations is being recognized and leads to potentially lower interest expenses.

It is good to see that our commitment in reducing the carbon footprint of our operations. He is being recognized and leads to potentially lower interest expenses.

Speaker Change: In December of last year, we executed on the refinancing of the Ginu ship with a prominent Taiwanese lender, whereby we replaced a 10.5% coupon loan with a new 5-year facility priced at 3.5% over LIBOR.

In December of last year, we executed a financing of the team the sheep with prominent Taiwan is Linda whereby we replaced attendant, 5% coupon loan with a new five year facility priced at $3, 5% over LIBOR.

Speaker Change: Looking forward, as mentioned in our third quarter update, we are currently in the process of addressing the two loan maturities that are secured by three of our vessels and are due in the fourth quarter of 2022.

Looking forward as mentioned in our third quarter update we are currently in the process of addressing the two loan maturities that are secured by three of our vessels and that view in the fourth quarter of 2022.

Speaker Change: We recently announced the refinancing of the first of these facilities, which is secured by the partners.

We recently announced the refinancing of the face of these facilities, which are secured by the partnership.

Speaker Change: Again here, a senior secured loan priced at 4.65% over LIBOR and a junior loan priced at 5.5% were replaced with a synthetic loan structured priced at 2.9% over SOFR.

Again here, a senior secured loan priced at 465% over LIBOR and the two new loan priced at five 5% were replaced with a synthetic long structured price at two 9% of it so far.

Speaker Change: The last two transactions have also an important strategic angle for our company.

The last two transactions are also an important strategic angle for a company.

Speaker Change: Through financing in Taiwan and Japan, next to our sale and leaseback activities in China, we have further expanded our strong footing in the prominent Asian ship financing market.

Through financing since day, one and Japan mixed toward a sale and leaseback activities in China, we have players that expanded our strong footing in the prominent acm's financing market.

Speaker Change: Given our discussions with our existing and prospect lenders to date, I am very optimistic that the 22.4 million balloon, due in December of 2022, which is secured by two of our Cape Science vessels, will be easily refinanced in a timely fashion.

Given our discussions with our existing and prospect lenders to date I am very optimistic that the $22 4 million balloon during December of 2022.

Secured by two of our Capesize vessels will be easily refinance in a timely fashion.

Speaker Change: Lastly, I would like to take the time here to talk about our company's operating scale.

Lastly, I would like to take the time here to talk about our company's operating scale.

When compared to 2021 synergy has increased fleet size and reduced interest expenses and the potential for lower daily vessel operating expenses when factoring in the pre delivery expenses incurred last year.

Speaker Change: When compared to 2021, Synergy has an increased fleet size, reduced interest expenses and the potential for lower daily vessel operating expenses when factoring in the pre-delivery expenses incurred last year.

Speaker Change: As a result, there is a clear potential for higher EBITDA than in 2021. And this is something we have illustrated by sensitizing a 2022 EBITDA projection on the average level of the BCI in 2022.

As a result.

Clear potential for higher EBITDA than in 2021.

And this is something we have illustrated by sensitizing, our 2022 EBITDA protection when the average level the PCI in 2022.

Speaker Change: As a reminder, 2021 EBITDA was approximately 79 million at an average daily BCI level of about 33,000.

As a reminder, 2021 EBITDA was approximately $79 million at an average daily be ci level of about 53000.

Speaker Change: If the cape size market in 2022 reaches a similar level, Synergy EBITDA would reach approximately 135 million.

If the Capesize market in 2020 to reach a similar level seen as EBITDA would there is approximately $135 million.

Speaker Change: At this early point in the year, these projections are obviously subject to significant uncertainty, but the potential for increased profitability is clear. By this, I would like to conclude my review. I would now turn the call back to Thamatis, who will discuss the market and industry fundamentals. Thamatis?

At this early point in the year. These predictions are obviously subject to significant necessity, but the potential for increased profitability is cleared by visa would like to conclude my review I will now turn the call back to commodities who'll discuss the market and industry fundamentals somebody.

Thank you Sabra.

Thamatis: Once again, I want to express our deep regret for the ongoing war in Ukraine and our sincere hope for this situation to be resolved soon and with the fewest human casualties possible.

Once again I want to express our deep regret for the ongoing war in Ukraine, and assist our sincere hope for the situation to be resolved soon.

Human casualties possible have.

Thamatis: Having said this, the initial assessment of the impact of the sanctions imposed on Russia,

<unk> said this the initial assessment of the impact of the sanctions imposed on Russia.

They appear to be quite positive historically any disruptions in the established trade patterns, usually create significant benefits from a ton mile perspective, which is favoring vessel demand.

Thamatis: Historically, any disruptions in the established trade patterns usually create significant benefits from a ton-mile perspective, which is favoring vessel demand.

Thamatis: In this case, for example, millions of tons of coal for the global energy needs will have to be imported from longer distances.

In this case for example millions of tons of coal for the global energy needs, we will have to be imported from longer distances.

Thamatis: This we expect to increase the distance travel of our ships quite substantially.

This we expect to increase the distance travel all of our ships quite substantially.

Thamatis: Going back to 2021, it was a remarkable year for the capesize market, as a robust demand recovery was combined with a limited fleet growth.

Going back to 2021, it was a remarkable year for the Capesize market.

Our robust demand recovery was combined with a limited fleet growth.

Thamatis: During Q4 2021, the cape size market experienced significant volatility as it reached a peak of $86,000 a day in October 2021 before closing the year at $19,000 a day.

During Q4 2021, the capesize market experienced significant volatility as it reached a peak of $86000 a day in October 2021, before closing the year at $19000 a day.

Thamatis: Following this period of volatility and the typical seasonal market slowdown that took place this February , both the spot market and the futures curve are now trending quite higher.

Following this period of volatility and the typical seasonal market slowdown that took place. This February both the spot market and the futures curve are now trending quite higher.

Thamatis: As of today, the futures curve for the remaining of 2022 is trading in excess of $33,000 a day on average, and we expect that these levels will be exceeded.

As of date, the futures curve for the remaining of 2022 is trading in excess of $33000 a day on average and we expect that these levels will be exceeded.

Thamatis: We remain very optimistic about the Cape Size market prospects, as we are seeing the lowest level of lead growth over the past decades, combined with healthy demand globally for iron ore and coal.

We remain very optimistic about the capesize market prospects as we're seeing the lowest level of fleet growth over the past decades, combined with healthy demand globally for iron ore and coal.

Thamatis: Beginning with iron ore, seaborne trade tonnemiles expanded by 1.6% in 2021 and are expected to rise at a similar pace in 2022, with a significant rise noted in exports from Brazil.

Beginning with iron ore seaborne trade ton miles expanded by one 6% in 2021 and I'd expect it to rise at a similar pace in 2022 with significant rise noted in Mexico from Brazil.

Thamatis: Vale in Brazil once again reiterated their annual guidance for about 330 million tonnes in 2022, which means that they will have to ramp up their exports considerably in the next three quarters to meet their targets, given that their exports year-to-date were at one of the lowest points of the recent years.

Volume in Brazil, once again reiterated our annual guidance for about 230 million tons in 2022, which means that they will have to ramp up their exports considerably in the next three quarters to meet the targets given that their exports year to date, we're at one of the lowest points over the recent years.

<unk>.

Thamatis: This is a usual pattern we have seen many times, although this time we expect the upswing to be much much bigger.

This is a usual pattern we have seen many times. Although this time, we expect the upstream to be much much bigger it.

Thamatis: It is also encouraging to note that China's credit impulse has been expanding recently and policy support has been announced for infrastructure and residential projects.

It is also encouraging to note that China's credit impulse has been expanding recently and policy support has been announced for infrastructure and residential projects.

Thamatis: beyond China, I am glad to see that world steel production ex-China rose at a very fast pace in 2021 as year-over-year growth exceeded 10%.

Beyond China, I am glad to see that world steel production ex China, but also at a very fast pace in 2021 as year over year growth exceeded 10%.

Thamatis: Filmmaker profit margins also remain high, which supports further our case for a healthy end market.

Still make a profit margins also remained high which supports further our case for a healthy end market.

Thamatis: Looking beyond 2022, the five-year extension granted to steel mills from the Chinese government for achieving their emission goals is expected to result in another boost to the market as steel makers will be able to ramp up production.

Looking beyond 2022.

Five year extension granted to steel mills from the Chinese government for achieving the emission goals is expected to result in another boost to the market are still makers would be able to ramp up production.

Thamatis: Meanwhile, seaborne coal trade was very supportive in 2021, as the increase in tonne miles exceeded 7%.

Meanwhile, seaborne coal trade was very supportive in 2021.

The increase in ton miles exceeded 7%.

A further rise is anticipated for 2022 and this is not just because of the recent war.

Thamatis: A further rise is anticipated for 2022 and this is not just because of the recent war.

Global economic growth resumes has resumed after COVID-19 and power generation demand remains very high.

Thamatis: Global economic growth has resumed after Covid and power generation demand remains very high.

Braemar research launch call is forecasted to remain more profitable for European power utilities until 2024 as coal to gas switching prices now indicate that it will not be profitable to suites from coal to gas before 2024 exiting out from Q2 2023.

Thamatis: Coal is forecasted to remain more profitable for European power utilities until 2024, as coal-to-gas switching prices now indicate that it will not be profitable to switch from coal to gas before 2024, exceeding out from Q2 2023 last month.

Last month.

Thamatis: The gas supply crunch experienced by Europe this winter has been compounded by Russia's invasion in Ukraine.

The gas supply clients experienced by Europe . This winter has been compounded by Russia's invasion in Ukraine.

Thamatis: Demand is not the only positive aspect for the market though.

Demand is not the only positive aspect for the market though.

Thamatis: We have one of the lowest net fleet growth rates of the last 20 plus years and the new building order book is also at historical low level.

We have one of the lowest net fleet growth rates over the last 20 plus years and the New building order book is also at historical low levels.

Thamatis: Please note that the net fleet growth for 2022 is expected at less than 1.5%, while vessels above 15 years old make up for about 17% of the global fleet.

Please note that the net fleet growth for 2022 is expect that less than one 5% while the vessels above 15 years old makeup for about 17% of the global fleet.

Thamatis: It is evident that the supply dynamics are quite favorable at this point.

It is evident that the supply dynamics are quite favorable at this point.

Thamatis: There are two additional factors that are expected to have another significant impact on the supply side of the market.

There are two additional factors that are expect to have another significant impact on the supply side of the market.

Thamatis: The new EEXI and CII regulations, starting in 2023, will impose emission limits and slow the steaming of the global fleet.

The new E X I N C. A a regulations starting 2023 will impose emission limits and slow steaming of the global fleet.

Thamatis: Bearing in mind that two-thirds of the global fleet has been built prior to 2012, we expect in some cases that speed reduction could be substantial.

Bearing in mind that two thirds of the global fleet has been built prior to 2012, we expect in some cases that speed reduction could be substantial.

Thamatis: These regulations are having implications in the new building and demolition markets as well.

Regulations are having implications in the new building and demolition markets as well.

Thamatis: The uncertainty regarding the new standards of new building vessels in respect to engine and fuel type is deterring new vessel orders.

Certainty regarding the new standards of new building vessels.

Spectra engine and fuel type is deterring new vessel orders at the same time inefficient vintage vessels are likely to be sent to scrap yards.

Thamatis: At the same time, inefficient vintage vessels are likely to be sent to scrapyards as their competitiveness is expected to be compromised.

Competitiveness is expected to be compromised.

Thamatis: As a result of the above demand-supply dynamics, we are likely to see massive freight rate upswings in the near future.

As a result of the of both demand and supply dynamics, we're likely to see massive freight rate upstream in the near future.

Thamatis: I would like to conclude by saying that in the last years we have positioned Synergy in a very favourable position to benefit from this opportunity.

I would like to conclude by saying that in the last years, we have positioned synergy.

Very favorable position to benefit from these opportunities.

Thamatis: Our homogeneous fleet and the improvements we are making in the energy efficiency of our vessels will retain our advantageous place in the super cycle for years to come.

Homogeneous flipped and the improvements we're making in the energy efficiency of our vessels will retain advantageous place in the super cycle for years to come.

Speaker Change: Thank you very much and on that note I will pass the call to the operator to receive questions. Thank you.

Thank you very much and on that note I will pass the call to the operator to receive questions. Thank you.

Thank you.

Speaker Change: Thank you. As a reminder, if you would like to ask a question, please press star and one on your keypad and to cancel your request, you can press the hash key.

If you would like to ask a question. Please press star one on your keypad and to cancel your question compressor Husky say once again.

Speaker Change: So once again, that's star and one if you would like to ask a question.

One if you would like to ask a question.

Speaker Change: Your first question today is from the line of Magnus Fear from HC Wainwright, please go ahead.

Your first question today is from the line of Magnus <unk> from H C. Wainwright. Please go ahead.

Magnus Fear: Yes. Good afternoon. Congrats to a great quarter. Just some questions on the capital allocation. I mean, you re-instituted a new dividend policy. And

Yes.

Good afternoon, congrats to a great quarter.

Just.

Some questions on on the capital allocation I mean, you were instituted a new dividend policy.

And you.

Magnus Fear: you know, buying back some of the converts. How should we think about that going forward with the uncertainties, you know, in the market currently?

Buying back some of the converts so how should we think about that going forward with the uncertainties.

And the market currently.

Speaker Change: Hello, Magnus. Good morning. Thank you.

Hello Magnus good morning, Thank you.

Magnus Fear: So, we generally expect to continue our regular dividend as we have announced, and depending quarter on quarter, depending on the financial results, we expect to increase the special dividend as well. So, this is pretty much the capital allocation.

So we generally expect to continue our regular dividend, we have announced and the pending.

Water on quarter dependent on the financial results we expect.

Chris the special dividend as well so just thinking.

The capital allocation I, just thought I'd, rather repurchase are concerned then it all depends on where the stock is trading.

Magnus Fear: As far as other repurchases are concerned, then it all depends on where the stock is trading. I don't know whether we're going to do any additional convertible repurchases. We've already reduced that down to a very small number. So we will just monitor the stock price and we might do a combination of repurchases and dividends, special dividends or something like that. So it's going to be on a quarter by quarter basis, depending on the rate.

I don't know whether were going to do any additional convertible repurchase visibility is that down.

A very small number.

So we will just monitor the surprise in May we might do a combination of repurchases and dividends special dividends or something like that so it's going to be on a quarter by quarter basis, depending on the rates.

Speaker Change: Okay, and just on the chartering, I mean, the first quarter has been weak.

Okay, and just on the chartering I mean, the first quarter, it's been weak.

Speaker Change: seasonal basis. You said that you're seeing strength now. How should we think about the seasonality going forward? Uh, you know, two Q versus one Q. I mean, um, and the second half of, uh, 2022. Do you see that playing out?

On a seasonal basis. So you said that you have.

<unk> strengths now how should we think about the seasonality going forward.

You know to Q versus <unk> I mean in.

In the second half.

2022, do you see that playing out differently this year.

Speaker Change: Right, so Q1 has been quite weak, but we have managed to overperform that by about more than 40% if I remember well. I think we're going to close the quarter in excess of 19,500 a day, where the quarter-to-date is at 13 or 14,000. So we've done a very good work to overperform Q1.

Right. So Q1 has been quite weak.

But we have managed to over perform that by about more than 40%. If I remember well. We are I think we're going to close the quarter in excess of 19500, a day, where the quarter to date is that a 13 or 14000, so we've done a.

Very good work to Oh got it.

Before.

One.

Index.

Speaker Change: In respect of Q2, Q3, and Q4, right now the futures say that the rates will be around $32,000-$33,000.

In respect of Q2, three and four right now the futures.

Say that the rates will be around 30 to $33000.

Speaker Change: We are taking some cover in the future, either in Q2 or some Q2, Q3, and Q4 as well. We don't want to be greedy and wait to make $50,000 or $100,000 or whatever, so we are fixing some of the base. And we will continue doing so when we see peaks in the FFA curve in the contracts that we are able to convert from floating fixed. Okay, very good. That's it from me.

We are taking some cover in the future either in Q2, or some Q2, three and four as well we.

We don't want to be greedy.

Wait to make 50 or 100000 or whatever so we are fixing some of the base.

We will continue doing so when was it peaks in the thicker in the contracts that we are able to convert from floating to fixed.

Okay very good that's it from me. Thank you. Thank.

Thank you, Mike, let's have a great day.

Speaker Change: Thank you. The next question is from the line of Kate Sullivan from Maxim Group. Please go ahead.

Thank you. The next question is from the line of Tate Sullivan from Maxim Group. Please go ahead.

Kate Sullivan: I had a good day all and allow a lot of developments to go over and great dividend announcement and.

Hi.

Good day, all and while a lot of development to go over in great dividend announcements and stuff.

Speaker Change: So, I guess starting with the buyback subsequent to 4Q, can you talk just about the use of cash versus adding cheaper debt to pay down on the convertible notes?

I guess, starting with the buybacks subsequent to support Q can you talk just about the use of cash versus adding cheaper debt to pay down the convertible notes.

Speaker Change: I mean, 19 plus the five, that additional, and then the warrants, so will you use mostly cash to do that or debt? Can you go into some of how the pro forma balance sheet will look like, please?

19, plus the five additional and then the warrants. So will you will you use mostly cash to do that or a place for that can you go into some of how the pro forma balance sheet look like please.

Hi, Good morning, Thank you for your question.

Speaker Change: We are generally not planning to take more debt in order to reduce the convertible or of course pay dividends. So what we're doing now in respect of financing has been in the normal course of business to refinance the assets that were up for refinancing.

We are generally not planning to.

Take more debt in order to reduce the convertible or of course pay dividends. So what we're doing now.

Spectral financings has been in the normal course of business to refinance the assets that were up for refinancing. So any excess costs are rising for lease finances is financings is quite coincidental.

Speaker Change: So any excess cash rising from these finances is quite coincidental. We expect to use cash flow from operations, which appears to be quite strong, in order to continue with the dividend payments and if there are any buybacks in the future, we will use cash flow from operations.

We expect to use cash flow from operations, which appears to be quite strong.

Two.

Continue with our dividend payments and neither are any buybacks in the future we will use them.

Cash flow from operations.

Speaker Change: And I think in this quarter as well, in the fourth quarter, the convertible note buybacks led to a non-cash expense. Can you give that estimate given the scale of what you're buying back in the first quarter? Or is there any?

Okay.

In the past.

And this quarter as well in the fourth quarter. The convertible note buybacks led to a noncash expense can you give that estimate given us given the scale of what youre buying back in the first quarter.

Or is there any.

Right now yes.

Speaker Change: In Q4, yes, we did have an impact, which is a non-cash impact, which we had to take.

In Q4, yes, we did have an impact which is a noncash impact which we had to take in Q1 that is a strength because the accounting rules make chains and whatsoever. We have bought back might not even hit the P&L believe it or not because there's a new accounting standard which comes into effect from the first of January .

Speaker Change: In Q1, there's a strange thing because the accounting rules may change and whatever we have bought back might not even hit the P&L, believe it or not, because there's a new accounting standard which comes into effect from the 1st of January of 2022. However, there might still be a charge, which we don't know yet. We expect to make this assessment. If that happens, it's going to be in the region of $3 million for Q1.

Of Pleasanton before however that it might still be a charge, which we don't know yet we expect to make this assessment if that happens it's going to be in the region of $3 million for Q1, but again it might happen by both happen depending on how the new rules and new accounting standards are being.

Speaker Change: but again it might happen it might not happen depending on how the new rules the new accounting standards are being

Speaker Change: interpreted. So we cannot really give a guidance yet. On the conservative side, I would say $3 million shift.

Interpreted so we cannot give a guidance yet on the conservative side, I would say $3 million Q1 pass.

Thank you and I'll turn it up last one before I turn it over to some other questions to have you.

Speaker Change: and I'll turn it last one before turning over to some other questions to have you.

Speaker Change: And it's great with the dividend. I mean, most of the dry bought public companies now have the dividend, I mean, changed from four months ago. Are you targeting a payout ratio going forward? Or how are you looking?

And it's great with the dividend I mean, most of the dry bulk public companies now have the dividend change from four months ago are you targeting a payout ratio going forward or how are you looking at that.

Speaker Change: Well, for the time being, until the dust settles, to be honest, with all this volatility, we expect to have a mix of regular and special dividends, the way that we've structured so far. So, depending on each quarter, the board will assess the company's prospects, the cash flows, the financial results, and we will do as the previous quarter

Well for the time being less.

Unless until the dust settles I had to be honest with all this volatility we expect to have a mix of.

Our regular and special dividend the way that we expected so far so depending on each quarter.

We'll assess.

The companys prospects the task flows the financial result, and we will do.

The previous quarter.

Tells us.

Speaker Change: when we have a bigger clarity about the future and we're able to fix more long-term business, then of course, you know, there's going to be a more substantial payout. But so far, we're very comfortable with the way that we have approached this policy, regular plus special, and, you know, it's going to take a few quarters to see how that's going to play out. Okay, all right. Thank you.

When we have a bigger clarity about the future and we're able to fix a more long term business then of course.

There's going to be more substantive payout, but so far we're very comfortable with the way that we have approached this policy.

Regular plus special and.

It's going to take a few quarters to Chicago, that's going to play out.

Okay Alright. Thank you very much have a great guys. Thanks have a great day.

Speaker Change: Thank you. The next question is from the line of Randy Givens from Jefferies. Please go ahead. Howdy, Team Synergy. How's it going?

Thank you. The next question is from the line of Brian to given from Jefferies. Please go ahead.

How would he came synergy how's it going.

Hey, Randy Hi, good morning, good morning, Bonnie.

Randy Givens: Good morning. Good morning. I guess just following up on a few things here. On the chartering side, you have a handful of these kind of index link charters that expire between, it looks like, April and December of this year, maybe a few into next year. Is the plan to kind of continue?

I guess just following up on a few things here on the chartering side you have a handful are these kind of index linked charters that expire between it looks like April in.

December of this year may be a few into next year.

Is the plan to kind of continue those.

Randy Givens: late indexing charters switching to spot do a longer term time charter we we've seen some you know to put your time charters in the market so uh... any appetite for any of those

Index linked charters switch them to spot do a longer term time charter, we we've seen some two plus year time charters in the market so any appetite for any of those.

Speaker Change: Well, first of all, our ships are in great demand, so all the charters want to renew the charters that we have in place.

Well first of all.

Our ships are in great demand. So all of the top one two the new the touches that we have in place. So most likely all of these vessels will be the new pit.

Speaker Change: So, most likely, all of these vessels will be renewed at pretty much the same terms or better. We are negotiating with the charters with the installation of energy-saving devices and other investments we do on the ships, and we usually achieve a higher index rate, index multiple, compared to the previous.

At the same terms or better we are negotiating with their charters with the installation of energy saving devices another investment.

Investments would do on the ships and we usually see a higher index.

Index rate index.

Indexed multiple compared to the previous so chances are that we will likely continue on the same commercial strategy I don't think we will.

Speaker Change: So chances are that we will likely continue on the same commercial strategy. I don't think we will switch back to spot. We like the way we are because it offers the flexibility of employment and converting from floating to fixed. So we like the way it is when we want to. So it will most likely remain the same. And if the opportunity arises, we will fix more and more tonnage for longer periods if we see two, three, four years above $30,000 a day.

Back to spot.

The way we are because it offers the flexibility of employment and converting from floating to fixed but we like the way. It is what do we want to so it will most likely remain the same and if the opportunity arises we will fix more and more tonnage for longer periods.

We shipped two or three or four years.

About 6000 Boes a day.

Speaker Change: And then, is there a percentage or a ratio, is it earnings linked on the kind of floating kind of component of the dividend going forward, or how is that assessed?

Got it okay.

And then is there a.

Percentage of our ratio is it earnings linked on the kind of floating kind of component of the dividend going forward or how is that assessed.

Speaker Change: Not really. We actually do it on the available cost of the company. So it's a combination of the earnings, the net income, as well as the available cost. So we will not give a formula yet because we don't feel comfortable in giving a formula for the special dividend, you know, with all this volatility happening. When we have more stability around the world and on the rates, we will likely give a more, you know, concrete dividend formula for the special dividend.

Not really we actually do it on the available cash of the company. So it's a combination of the earnings.

Net income as well as the available cost so we will not be reporting like yet.

Because we don't feel comfortable in giving affordable for the special dividend.

You know with all this volatility happening.

When we have more stability around the world and on the rates will likely give them more.

Concrete dividend formula for the special dividend.

Sure.

Speaker Change: Alright, that's it really. And then I guess just last question, you touched on it briefly there in terms of China extending steel emission targets and other things. Any big impacts you're seeing on the iron ore or coal trade in the near term related to any of these environmental issues?

Alright, that's it really and then I guess just last question you touched on it briefly there in terms of China, extending steel emission targets and other things any big impacts you're seeing on the iron ore coal trade in the near term related to any of these environmental issues.

Speaker Change: Well, there are two super major events happening right now that are not necessarily associated with environmental drives.

Well there are two super major events are happening right now that are not necessarily associated with environmental drives. The first one is the war in Ukraine, where Russia is exporting 50 million tons of coal to Europe .

Speaker Change: The first one is the war in Ukraine, where Russia is exporting 50 million tons of coal to Europe . With all these sanctions, as you understand, 50 million tons or up to 50 million tons will need to be imported from longer distances.

With all the sanctions as we understand 50 million tones or up to 50 million tons will need to be imported from longer distances and we're talking about.

Speaker Change: And we're talking about much bigger distances here. We're talking about Australia, South Africa, Central America, North America. So Europe needs coal, a lot of coal, and Russia right now is on sanctions. So up to 50 million tons a year might be diverted from much, much longer distance.

Much bigger businesses here, we're thinking about Australia, South Africa Central America, North America, So Europe and Mexico.

Coal in Russia, right now isn't sanctions, so up to 50 million tons, a year it might be diverted for much much longer distances.

Speaker Change: The second is the guidance from Vale in Brazil, where it appears that Brazilian exports need to effectively double up from now until year-end in order to meet the target. So they have been exporting around 500,000 to 600,000 tonnes a day, and that needs to be 1.2 million in order for them to reach the target. So we expect a massive increase of long tonne miles.

Second is the guidance.

In Brazil, where it appears that Brazilian exports of meat to effectively double up from now until you got it.

So that had been exporting that all planned for 600000 tons, a day and that needs to be a million pool in order for them to reach the target. So we expect a massive increase of long term.

Ton miles.

Speaker Change: We're not seeing that yet, but the market has surely picked up from last month, and in our opinion, these two super important events will have a major role on the bigger dry bulk ships.

We're not seeing that yet, but the market has certainly picked up from last month and another opinion on this too.

Another important event held in.

Major law on the bigger dry bulk ships.

Got it Yep Yep.

Speaker Change: Good deal. Well, hey, that's it for me. Thanks for having me. Take care. Thanks, Bobby.

Oh, Hey, that's it for me thanks for having me.

Thanks Ravi.

Speaker Change: Thank you.

Thank you. The next question is from the line of James <unk> from.

Value Investor's edge. Please go ahead.

Speaker Change: Good afternoon, gentlemen. Congrats on a fantastic breakout quarter for you guys.

Hi, good afternoon, gentlemen, congrats on a fantastic breakout quarter for you guys.

Thanks, Dave Good morning.

Speaker Change: Yeah, it's great to be on the call here as an investor. I've been following Synergy for a long time. Lots of great questions. I'm glad to see the call has been well populated. Don't have too much to add. I did want to ask, what's the exact balance of the remaining convertible notes? Exactly how much nominally is still out there for you guys?

Yeah, it's great to be on the call here as an investor I've been following synergy for a long time lots of great questions I'm glad to see the calls has been well populated don't have too much to add I did want to ask what's the exact balance of the remaining convertible notes exactly how much nominally is still out there for you guys.

Speaker Change: IJ, this is Tavros. The remaining balance is 11.6 million.

Hi, David.

The remaining balance was $11 6 million.

Speaker Change: copy 11.6 million and is that owned exclusively by by Jelco? Yes, indeed, indeed.

Copy of $11 6 million and as that earned exclusively by my General Counsel.

Yes indeed.

Good.

Speaker Change: Okay, now that the stock is trading above 120, is there any potential to repurchase those or is it basically just, they're just gonna sit out there until Joko exercises?

Okay now that the stock is trading above one <unk> is there any potential to repurchase those or is it basically just they are just going to sit out there until dzhokhar exercises them.

Speaker Change: Well we're not sure to be honest about Delta's intentions you know they might exercise some of that they might continue making the coupons so you know at these levels now it's really less than five percent of our total indebtedness so it doesn't really make any significant role either on the capital structure or on the balance sheet altogether.

Well.

Sure.

It's about.

About deltas intentions.

They might exercise some of that that might continue making the coupon so.

These levels now, it's really less than 5% of our total indebtedness. So it doesn't really make any significant at all either on the capital structure of the ore.

On the balance it all together.

Yes, it's a pretty small number at this point I know that dividends have already been discussed a little bit, but I've been receiving a lot of questions. On my end is the intention that the 0.25 sensor or 10 cents a year is kind of a base. Obviously you can't guarantee it but that's kind of a base and then each quarter, it's going to be different.

Speaker Change: Yeah, it's a pretty small number at this point. I know the dividends already been discussed a little bit, but I've been receiving a lot of questions on my end is the intention that the 0.25 cents or 10 cents a year is kind of a base. Obviously, you can't guarantee it, but that's kind of a base and then each quarter is going to be different.

Speaker Change: Yes, this is the base and we expect to top it up every quarter depending on the available cash and, you know, earnings of the company.

Yes. This is a base and we expect to top it up every quarter, depending on the available cash.

The earnings of the company.

Certainly makes sense and then just looking at the share price today.

Speaker Change: Certainly makes sense. And then just looking at the share price today, you know, you still traded a meaningful discount to NAV. It seems like you have an unencumbered cape-sized vessel left. Is there any appetite to finance that cape size and do some repurchases? Or do you want to just keep that cape size unencumbered?

Will trade at a meaningful discount to NAV. It seems like you have an unencumbered capesize vessel left is there any appetite to finance that capesize and do some repurchases or do you want to just keep that capesize unencumbered.

Speaker Change: Well, we're just going to remain the way that we are right now. We have this leverage if we want to exercise that at the future stage.

We're just going to remain the way that we are right now we have this leverage if we want to exercise that.

At the future state.

Speaker Change: um we expect to see how the volatility in the market is going to play out because the stock has had a good run from 85 cents to you know $1.30 $1.35

We expect to see how the volatility in the market is going to play out because the stock has had a good run from 85 cents to <unk> 55.

Speaker Change: You know, so, you know, we are quite content with the way that the stock has run the last few weeks, and we're pretty sure that we will eventually catch up and exceed.

So you know we are quite content with the way that the stock has run the last few weeks and we're pretty sure that we will eventually catch up and exceed.

Speaker Change: the NAV target. So we'll see how that goes.

And every target so.

We will see how that goes.

Speaker Change: uh but so far we're not going to make any actions because so you know when you have strings

But so far we're not going to make any actions to go. So you know when you have strength on the Dow Jones and the S&P of two 3% a day.

Speaker Change: on the Dow Jones and the S&P of 2% or 3% a day, you know, it's kind of hard to try to predict how the stock is going to react.

It's kind of hard to try to put.

Because of the stock is going to react.

Speaker Change: Yeah, certainly that's fair. Well, you guys have been doing a great job. So I'm looking forward to next quarter. Thank you.

Yes, certainly that's fair well you guys have been doing a great job. So I'm looking forward to next quarter.

Thank you Jay nice talking to you.

Speaker Change: Thank you. We have a follow-up from the line of Kate Sullivan at Maxim Group. Please go ahead.

Thank you we have a follow up from the line of Tate Sullivan of Maxim Group. Please go ahead.

Got that thank you for taking my follow up.

Kate Sullivan: Thank you for taking my follow-up. So, with the cost of debt I see in your slide deck for the fiscal year 2021 was 4.8%, but after paying down the convertible notes, after taking into account the refinancing, can you give a rough estimate of where that could be for fiscal year 2022?

So with the cost of debt I see in your slide deck for the fiscal year 2021 was four 8%, but after paying down the convertible notes after taking into account. The refinancing can you give a rough rough estimate where that could be for fiscal year 'twenty two.

Sure sure.

Speaker Change: Sure, the weighted average cost of debt at 4.8% in 2021.

Sure.

Weighted average cost of debt at four 8% in the 'twenty to 'twenty one.

Speaker Change: is a bit skewed because the prepayment of the most expensive facilities were done towards the fourth quarter. At the same time we took out also very expensive facility in the beginning of the 2022. So in 2022 we expect the weighted average cost of capital to be around of debt to be around four percent or even slightly higher 375 all in.

<unk> is a bit skewed because of the prepayments of the most expensive part C. D piece were done towards the fourth quarter and at the same time and then we took all those related expenses facility from the beginning of the 2022. So in 'twenty to 'twenty two we expect the weighted average cost of capital to be around.

Of that to be around 4% or even slightly higher than 375 only.

Speaker Change: you for that. And then you also on that slide provide an indicative debt ratio going down from 45 to 36 percent. Is that based on your assumptions of the market value of the vessels in a year? Or how are you running that? No, no, no, no, no, no. Additional debt pay down.

Thank you for that and then.

And then you also on that slide.

Provided indicative that ratio, but went down 45%, 36% is is that based on your assumptions with a market value of the vessels linear how are you running that no no no no no no additional debt pay down.

Speaker Change: No, no, no, no, no. This is, uh, this is debt to total assets on a book value basis. Yeah, so it's just that

No no no no no. This is a this is debt to total assets.

Lisa.

So it's just the prepayments what did you see.

Jeff just to restate it okay, great and just last one for me.

Speaker Change: Okay, great. And just the last one for me, Sarah, I mean, very positive market commentary for rates going forward. And then the, I mean, your, your presentations indicating the average FFA for 2022 at 28,900. I mean, but I think I heard you say, I mean, the potential for rates to be back up to 50 to a hundred. I mean, I mean, can you just, can you put some more context around there and how much you keep, keep floating?

Very positive market commentary for rates going forward and then I mean, your presentations indicated the average FFA for 2022 or 28900 <unk>.

But I think I heard you say the potential for rates to be back up to 50 to 100 I mean can you just can you put some more context around there and how much you keep keep floating.

Sarah: Well, I certainly believe that 2022 will have much stronger fundamentals than 2021. Some of them were expected and some of them were unexpected due to the war in Ukraine.

Well I certainly believe that 2020 to have much stronger fundamentals with that in 2021.

Some of them were expected and some of them were unexpected due to the war.

In Ukraine, So if last year with worst fundamentals will show $85000.

Sarah: So if last year, with worse fundamentals, we show $85,000 in Q3, then one can assume that you will see stronger rates in 2022. But I don't want to give a figure. Once again, demand and supply fundamentals appear to be super strong, especially for the larger CAPE sizes, for the larger ships like CAPE sizes that now appear to start to break upwards.

In Q3, then.

Can I assume that you're going to see stronger rates in 2000.

But I don't want to give a figure.

Once again demand supply fundamentals appear to be super strong, especially for the larger case sizes for the larger ships like Cape sizes that are now.

To break upwards. So it remains to see how that is going to play out.

Sarah: So it remains to see how that is going to play out in the next three quarters of a year.

Three quarters of the year.

Speaker Change: Thank you. And then with that outlook, just a quick follow-up with the Mike, I mean, is it still a favorable scenario to continue to evaluate buying additional ship?

Okay. Thank you and then with that outlook just a quick follow up if I might I mean is.

It still favorable CRE to continue to evaluate buying additional ships.

Mike: Well, I think we have other priorities. We did a very strong fleet increase last year. We expect to remain at these fleet levels. I mean, we have plenty of liquidity right now to continue rewarding our shareholders.

Well.

I think we have other priorities would be there very strong.

And Chris last year, we expect to remain at these levels I mean, we have plenty of.

Liquidity right now to continue rewarding our shareholders.

Speaker Change: and possibly, you know, look by, you know, one or two ships sometime in 2022, but there's absolutely nothing right now on the horizon. I mean, we will focus in rewarding our shareholders right now. Okay, great. Well, thanks.

And possibly look by you know one or two ships sometime in 2022, but there is absolutely nothing right now on the horizon I mean, we will focus in rewarding our shareholders right now.

Okay, great well, thank you for all the detail.

Great to hear you very well.

Okay. Thank you. The next question is from the line of Scott.

Speaker Change: Thank you. The next question is from the line of POFRAC from Noble Capital. Please go ahead.

From Noble capital. Please go ahead.

POFRAC: Afternoon, can you be a little more specific on your second or what you've locked up in the second quarter as far as FFA and then time charters?

After Dan could you put a little more specific on your second what you've locked up in the second quarter as far as FSA and then time charters.

Speaker Change: Of course. Hi, Kate. Good morning. Stavros will give you this information. Hi.

Of course high Tech with Morningstar will give you this important issue.

Alright.

Scott.

Stavros Giftakis: So, we have four ships right now which we have converted from floating rates to fixed. Two have been converted at an average of 22,500. Two have been converted on an average of 30,000. And then we have the two ones that are running on fixed rate, which are 31,500 on average.

So we have a we have four ships right now that you have converted from floating rate to fixed too heavily been converted at an average of $22 5002 have been converted on an average of 30000 and then we have the two ones that are running on fixed rate, which are 51 and a half an hour.

It.

Stavros Giftakis: So in total, we have six ships on fixed rates at an average PCE of around 28,000 as matters stand now.

So in total we have six ships on fixed rate at the end of it it's a TCE of around 28000 as mothers stands now.

Speaker Change: Okay, great, and Stubbers, can you just talk about your forward-looking cost structure? You know, you highlighted some of the one-time items, whether it's pre-delivery costs or taxes and insurance.

Okay, Great and tablets can you just talk about your forward looking cost structure.

Highlighted some of the one time items, whether it's pre deliberate cogs through taxes and insurance.

Stubbers: But how should we be looking at your costs going forward?

But how should we be looking at your costs going forward.

Stubbers: Look, I think on basically the DNA and the OPEX front, what you've seen in the fourth quarter is basically a bit higher versus what you should expect going forward. So on OPEX, I would expect average OPEX per day between 6,200 and 6,500. And on the DNA front, I would expect

Look I think on the basically the DNA and the Opex throne.

What you've seen in the fourth quarter.

He's basically it'd be title versus what you should expect going forward. So on Opex I would expect a very typically take between six and 6000 265000 and on the G&A front I would expect around a two and a half million Cas and around 12 medium to 12 and a half.

Stubbers: 8 to 8.5 million cash and around 12 million to 12.5 million including non-cash items on the GNA front.

Median including.

Including the noncash item so the G&A film.

Stubbers: Now in terms of debt, I mean you know our amortization, we have around 8 million repayments per quarter, which are going down to around 7 million in 2023 when the front-loading in most of our facilities.

Now in terms of that I mean, you know that amortization will hover around date immediately on repayments per quarter, which are going down to about 7 million in 2023, when the frontloading in most of our facilities.

Stubbers: will be over. And then our interest expense, it's around 2.5 million per quarter, which is expected to reduce to around 2 million per quarter in 2023 and onwards.

And we'd be over and then our interest expense, it's around two and a half million per quarter, which is expected to review slide 2 million per quarter in 2023 and onwards.

Great that's helpful.

Speaker Change: And then, Stamatis, can you just go back? I hate to beat the dead horse, but.

And then the.

Can you just go back and hate to beat the dead horse, but.

Stamatis: Can you just talk about your dividend, paying a dividend versus buying stock back, you know, most of January your stock was under a buck.

You just talked about your dividend paying a dividend versus buying stock back most.

Most of January your stock was under a buck.

Stamatis: but you didn't buy, you didn't buy any stock back. You know, here you are, the stock's up a little bit, you know, but you're, and you're paying a cash dividend. Can you just talk about, you know, just that trade-off between buying stock back?

You didn't buy you didn't buy any stock back here.

Here you are the stock's up a little bit.

But.

And you're paying a cash dividend could you just talk about you know just that tradeoff between.

Buying stock back.

And paying a dividend.

Speaker Change: Of course, yes. First of all, we did actually buy back securities and that was the convertible securities. So Q1 and Q1 so far, we will have repurchased $10 million of convertible securities.

Of course, yes first of all we did actually buy back securities and that was the convertible securities. So.

Q1, and Q1, so far we will have paid we will have repurchased $10 million of convertible securities and that means that we are berthing.

Speaker Change: and that means that we are averting a dilution for our shareholders, so it's quite significant.

Dilution for our shareholders. So it is quite significant for us.

Speaker Change: for us the priority was to reduce these interest-bearing notes that not only reduce the cash expense of the company by reducing the interest expense of this $10 million, but also we are averting the dilution arising from the conversion of this convertible security. So in my opinion, I think that eliminating this out of the capital structure comes as a first priority.

Priority awards that abuse. This interest interest bearing notes that not only reduce.

The Cas expense of the company by reducing the interest expense of this $10 million, but also we are reverting the dilution arising from the conversion of these.

I will just convertible securities. So in my opinion I think that.

Eliminating this out of the capital structure comes as a first priority.

Speaker Change: Second priority was the dividend, which of course...

Second priority was the dividend which of course.

Speaker Change: You know, we have been looking into that for quite some time. We have been discussing about it, if you remember, since August-September last year. And we now pay a substantial dividend, which, if you annualize that, we're talking about 16-17% of the dividend yield.

We have been looking into that for quite some time, we have been discussing about the if you remember since August September last year, and we now pay a substantial dividend.

If you annualize that we're talking about 16 and 17% of the dividend yield.

Speaker Change: I think that these two elements, I mean eliminating the dilution and the payment of dividend, will help the stock price rise on its own at higher levels. This is our estimate, of course, without any commitment. We think that this is going to affect the stock price positively. It's going to bring in investors that are seeking to get some dividend returns.

I think that these two elements I mean, eliminating the dilution and the payment of dividend will help the stock price rise on its own at higher level. This is our estimate of course without any commitment. We think that this is going to affect the stock price positively.

Bringing investors that are seeking to get some dividends.

Speaker Change: from the market. They're not only speculators, you know, willing to do the quick up and down of the stock price.

From the market, but not always speculator. So you know willing to do the tweak up and down with the stock price. So having said all that we will continue to monitor the situation and then.

Speaker Change: So having said all that, we will continue to monitor the situation. And if the opportunity arises, you know, comparing buybacks, common stock buybacks, and anything else, we will consider that at a time.

Fortunately our eyes.

You know comparing buybacks common stock buybacks.

Anything else, we will consider other type.

Great and then.

Speaker Change: Great, and then just one last one, Stavros, can you just talk about working capital in the fourth quarter, you know, to get to cash, year-end cash to $47 million, you know, working capital seems like it went up a lot in the fourth quarter. Can you talk about, you know,

Just one last one.

Tablets can you just talk about working capital in the fourth quarter.

They get the cash year end cash of $47 million working capital seems like it went up a lot in the fourth quarter can you talk about.

Stavros Giftakis: how much it might've gone up, and then also what's gonna happen in 2022 as far as working capital.

How much it might have gone up and then also what's going to happen in 2022 as far as working capital.

Speaker Change: Okay, so we expect the change in working capital to be around 13 million.

Okay should we expect them.

The change in working capital to be around 13 million.

Speaker Change: You will see in our balance sheet, I mean, we have in the current portion of long-term debt the upcoming balloons, so the balance sheet picture will be a bit different than compared to what you see. But cash continues to be strong, I mean, we close the year with $47 million, we have currently, after having repaid the convertibles, around $45 million.

You will see in our balance sheet I mean, it would have gotten the current portion of long term debt upcoming balloons. So the balance sheet picture would be different.

When compared to what you see but cash continues to be strong, but I'm going to close the year with four 7 million. We have currently after having repaid the convertible so around 45 million.

Speaker Change: At the PCE that Stamatis discussed before for the first quarter, we're making money, we're not burning money. So even after the dividend distribution, we expect our cash position to be higher than 2 million per vessel. So we're pretty comfortable with our working capital.

D C that <unk> discussed before for the first quarter were making money were not burning money. So even after the dividend distribution, we expect our Gulf coast position to be.

Higher than 2 million per vessel, so with we're pretty comfortable with the working capital.

Speaker Change: Okay, great. And then, you know, I don't think you're that exposed just because of the way your charges work. But can you just talk about the spike in fuel spread?

Okay, Great and then.

No I don't think youre not exposed just because the way youre Charlie's work, but just talk about the spike in fuel spreads.

Speaker Change: or bunker fuels and how you're, you know, potentially managing that whether you have an exposure to, you know, higher bunker fuel.

Bunker fuels and how youre potentially.

Potentially managing that whether you have any exposure to higher bunker fuel.

Speaker Change: That's actually one of the great things that we have managed to achieve when we converted all the ships into period on an index basis. We don't have the risk of bankering and we don't have the risk of banker fluctuations for the rates.

That's actually one of the great great things that we have managed to achieve when we converted all the ships into a period with on an index basis, we don't have the risk of banking and we have the we don't have the original banker fluctuations for the rates sorry for the price per ton moving from.

Speaker Change: sorry, for the price per ton moving from $500, $600 up to $1,000.

Five $600 up to $1000. So that's one of the great Great thing set a setup in glass.

Speaker Change: So that's one of the great, great things that have happened to us by switching into these index link.

Switching into these.

Index linked with that.

Speaker Change: employment agreements. So it doesn't really affect it. I think that

Employment agreement.

So it doesn't really affect it I think that.

Speaker Change: A lot of ships will be slowing down altogether, which is going to help supply going down. I mean, 10 tons a day, if you slow down at $1,000, it's really a very significant number in respect of the banker call. So, this actually adds up significantly into the market fundamentals for a better, for much higher rates.

A lot of ships will be slowing down altogether, which is going to help supply.

Going down.

10 tons, a day to slow down at the <unk>.

It's really basically give me that number.

Those would be bank of golf. So this actually adds up significantly into b market fundamentals.

The Florida quite a bit there for a much higher rates.

Great. Thank you for your time.

Thank you Paul have a great day.

Thank you and there are no further questions at this time, so I'll hand back to the state.

Speaker Change: Thank you and there are no further questions at this time so I'll hand back to the speakers.

Speaker Change: Thank you very much. Thank you for listening in to our call and we will be providing other updates, corporate updates of the company in the next few weeks. Thank you very much. Have a great day, everyone.

Thank you very much thank you for listening into our call and we.

We will be providing other updates corporate updates of the company.

In the next few weeks. Thank you very much have a great day everyone.

Speaker Change: Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect.

Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect.

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Speaker Change: © transcript Emily Beynon

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