Q1 2022 SFL Corporation Ltd Earnings Call
Good day, and thank you for standing by.
From Tudor.
Q1 <unk>.
2022, SSL Corporation earnings conference call at.
At this time, all participants on listen only mode. After the speaker presentation. There will be a question answer session to ask a question. During the session you will need to press star one on your telephone please be advised that today's comprehensive being recorded if you quietly Kristen assistance. During your conference. Please press Star zero.
I would now like to hand over the conference over to your Speaker today. Mr. <unk>. Please go ahead Sir.
Thank you and welcome all to <unk> first quarter conference call I will start the call by briefly going through the highlights of the quarter and following that our CFO aksel listen that will take us through the financials of the call will be concluded by opening up for questions. Our Chief operating officer, Tim Shortly will also be present for the Q&A session.
Before we begin our presentation I would like to note that this conference call will contain forward looking statements within the meaning of the U S. Private Securities Litigation Reform Act of $19 95 words, such as expects anticipates intends estimates or similar expressions are intended to identify these forward looking.
Statements forward looking statements are not guarantees of future performance. These statements are based on our current plans and expectations and are inherently subject to risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward looking statements.
Important factors that could cause actual results to differ includes but are not limited to conditions in the shifting offshore and credit markets you should therefore not place undue reliance on these forward looking statements.
Please refer to our filings with the Securities and Exchange Commission for more detailed discussions on our risks and uncertainties, which may have a direct bearing on our operating results and our financial condition.
The announced dividend of <unk> 22 per share is an increase of 10% over last quarter's dividend and represents a dividend yield of around eight 8% based on closing price yesterday.
This is our 73rd quarterly dividend and over the year. So we have paid more than $28 per share and dividends were nearly $2 5 billion in total.
And we have an increasing fixed rate charter backlog supporting continued dividend capacity going forward.
The total charter revenues were $166 million in the quarter with the vast majority from vessels on long term charters and only 12% from vessels employed on short term charters and the disciplined market.
The EBITDA equivalent cash flow in the quarter was approximately $119 million and over the last 12 months. The EBITDA equivalent has been approximately $455 million.
And the net income came in at around $47 million in the quarter or <unk> 37 per share.
There was also a positive mark to market on interest rate swaps and equity investments, but only a small portion of the total economic effect of the swaps flow through our profit and loss statement most.
Most of this defined as hedging accounting and the book effect would have been around $10 million higher otherwise.
In the quarter, there were around $1 million higher operating cost in the quarter due to additional crew rotation costs linked to COVID-19 restrictions in some areas and increased airfare and also higher legal expenses in connection with the <unk> bankruptcy and re delivery of the rigs. We expect this to come down with traveling restrictions ease and the reached sorry.
Delivered to US later this year.
Our fixed rate backlog has increased significantly and stands at approximately $3 $6 billion from owned and managed vessels. After recent acquisitions in charters, which provides continued cash flow visibility going forward.
The backlog figure excludes revenues from the vessels trade in the short term market and also excludes future profit share optionality.
In March we announced the $540 million added backlog on our six large 14000 teu container vessels.
Our vessels with finished their initial 10 year charters to evergreen in 2023, and 'twenty four and we have now added another five years to have back Lloyd taking the charter coverage through 2029.
Hapag Lloyd is the world's fifth largest container line and the transaction highlights the value and importance of our strong operational platform and our time charter strategy enabled us to build strong customer relationships with industry, leading counterparties.
In connection with <unk> Chapter 11 process, we agreed to take over the charter contracts on west Linus with effect when all government approvals are in place based.
Based on current charter rate around $500 million with AD was added to the backlog, but given the market adjusts to charter rate. This could increase if the drilling market strengthens.
<unk> will be the real deliberate when the current drilling assignment for equity nor incarnadine finalized towards the end of the year.
Thereafter that rig will be managed by <unk>, a market, leading operator of harsh environment drilling rigs and we will drop divest prefix on the rig names.
The sale of the last two vlccs on charter to frontline marks the end of an era and demonstrates the transformation <unk> gone through it.
Initially frontline unless they are only customer and the fleet consisted of nearly 50 crude oil tankers.
The two remaining vessels were 18 years old and we sold them after.
After the quarter end for approximately $70 million, including a compensation from frontline.
We expect to book a gain of approximately $2 million in connection with the sale.
And subsequent to quarter end, we have also delivered the 19 year old 1700, Teu container vessels MSE, Alice we just being on a higher purchase agreement to MSC for the last five years.
This transaction illustrates the value of having optionality, where the final payment was intended to be marginal as the vessel has effectively been paid down over the five years, but we negotiated a profit share agreement into the deal at a time.
And while we of course hope that there would be some value in that option.
We didn't expect it to be more than $1 million or two.
Assuming five years forward to today, the very strong container market. Currently meant that we ended up with a profit split of nearly $12 million instead.
The vessel was debt free and Thats, a fair that I expect to record a gain of approximately $12 million in the second quarter.
Excluding the drilling rates.
The backlog from owned and managed shipping assets was $3 6 billion at the end of the quarter up from $2 8 billion in the previous quarter.
Over the years, we have changed both fleet composition and structure and we now have 71 maritime assets in our portfolio. After late this transactions.
Over the years, we have gone from a single asset class charter to one single customer to a diversified fleet and multiple counterparties and over time the mix of the assets and charter backlog has varied from 100% tankers to nearly 60% offshore at 10 years ago to container vessels now being the largest segment with nearly 60.
Percent of the backlog and tankers only at around 10%.
Most of the vessels are on long term charters and in the quarter only 12% of higher was from vessels in the spot market.
Also we have nearly 90% of charter revenue from our shipping assets on time charter contracts and only 11% on bareboat or dry lease arrangements.
We are also a significant <unk> contribution to cash flow from profit share over time, both relating to charter rates and fuel savings. The aggregate profit share was $22 million last 12 months and $4 5 million in the first quarter.
We do not have a set mix in the portfolio focus is on evaluating deal opportunities across the segments and try to do the right transactions from a risk reward perspective.
Over time, we believe this will balance itself out, but we've tried to be careful and conservative in our investments with a focus on technology and decision over time to more fuel efficient vessels.
<unk> launched two harsh environment drilling rigs, the west Hercules and West Linus, which have been chartered to subsidiaries of <unk>.
We have now been through two chapter level round cincy drill and while we have been paid charter hire during the processes. We have decided to end the re chartering relationship with Ctrip.
The long term drilling contracts with west Linus with conical Phillips will be assigned to us as soon as customary Norwegian regulatory approvals have been obtained currently expected to be completed in the third quarter.
Thereafter, the rig will be managed by oilfield technology, a leading supplier of our offshore operations, who is already performing extensive drilling services for clinical Phillips one.
Installations.
This line has been drilling for clinical Philips at the greater Ekofisk area. Since it was new in 2014 and its contract runs until the end of 2028 at the end market index.
Charter rates.
It was ordered against the contract and has several features which makes it makes it particularly effective at the ekofisk field on the Norwegian Continental shelf.
The Ekofisk field was the first oil discovery in Norway and has produced more than 6 billion barrels of oil equivalent since its startup in 1971 reach.
Recently, the production licenses and the greater Ekofisk area was extended from 2028 to 2048 and the areas licensed partners has recently announced new significant divestments in future productions, given the size and proximity to European markets.
The harsh environment Semisubmersible rig west Hercules will remain on charter to see drill while it finalizes a drilling contract with Norwegian oil major Ecuador in Canada. This is expected to the fourth quarter of this year and thereafter, the rig will be redelivered to SSL and Norway.
It will then undergo a scheduled five year special survey estimated to take around three months before the rigs ready to work again what.
What field drilling a market, leading harsh environment drilling rig operator will perform commercial and operational management of the rig after either delivery from Ctrip.
The rig is only up as one of only a handful of rigs fully equipped to drill in the harshest Arctic environment and market analysts are positive to market prospects. After the strong oil price development and the realization that there has been a fundamental underinvestment in the segment for a number of years, we follow the market closely of course, and we will announce.
Future employment in due course.
The strength of our Counterparties and diversification is key when you assess our portfolio and quality of our contracted backlog.
And the list speaks for itself with market, leading operators like Maersk MSC, Conocophillips <unk> and Volkswagen to name a few.
Relatively few of our customers, our intermediaries, where we have less visibility on the use of the assets and quality of operations.
Strategically. This also gives us access to more deal flow opportunities such as the repeat businesses with Maersk MSC Evergreen and Trafigura for example.
Our strategy has therefore been to maintain a strong technical and commercial operating platform in cooperation with our sister companies in the <unk> group.
This gives us the ability to offer a wider range of services to our customers from structured financing to full service time charters.
And with full control over vessel maintenance and performance, including energy efficiency and emission minimizing efforts, we can impact improvements to our vessels through the life of the assets. Another one that would be possibly owning vessels employed on bareboat, where the customer made up <unk> <unk>.
Sensitive to make such improvements.
In addition, we can retain more of the residual value in the assets when we charter out on time charter basis and in the current environment with rising raw material costs and inflation driving replacement cost for vessels. This values for the benefit diversify lenders stakeholders.
<unk> deals. This massive value is usually retained by the charterers through fixed price purchase options.
And with that I will give the word over to our CFO oxalic, Melissa who will take us through the financial highlights of the quarter.
Thank you Cascade.
On this slide that shows our pro forma illustration of cash flows for the first quarter. Please note that this is only a guideline to assess the company's performance and is not in accordance with U S GAAP and ultimate of extraordinary and noncash items.
The company generated gross charter hire of approximately $166 million in the first quarter, including $4 5 million of profit share is approximately 85% of the revenue coming from our fixed charter rate backlog, which currently stands at $3 6 billion, providing strong visibility on.
Cash flow going forward.
In the first quarter <unk> generated gross charter hire of approximately $88 million, including approximately <unk> four and profit share contribution related to fuel savings on some of the large container business.
Following the Companys recent acquisitions and tuck extension.
As the slide indicates backlog increased approximately $2 5 billion with an average remaining charter term of approximately five years with $7 seven years, if with input charter hire.
The smaller container vessel, which has been on the higher purchase arrangement. During the last five years was delivered to the buyers subsequent to quarter end against the total purchase price of $13 million.
As if I would expect to record again of approximately $12 million in the second quarter.
It's a little tricky.
In the first quarter <unk> has a fleet of 16 crude oil product and chemical tankers at the majority employed on long term charters.
Thank you fleet generated approximately $30 million in gross charter hire during the quarter compared to 17 in the half in the previous quarter as additional trafigura vessels joining the fleet.
The net charter hire from the Companys two suezmax tankers employed on short term market with approximately $2 3 million compared to $3 one in the previous quarter.
Subsequent to quarter end, a thoughtful 2004 built VLCC from fourth and full of energy and simultaneously agreed to terminate the charter arrangement with a subsidiary of frontline.
The sale price was approximately $70 million, including a compensation from frontline for the termination for the charterers.
As you will expect to record a gain of approximately $2 million in the second quarter through sale of the stake.
During the quarter the company. The other piece of 15, five bulk vessels, which tend to filter employed on long term charters and the other five are trading in the short term market.
The Drybulk fleet generated approximately 26 million gross charter hire in the first quarter, including approximately 100000 and profit share contribution from our capesize vessels on charter to Golden Ocean.
The five vessel trading in both the short term market generated approximately 8 million net charter hire compared to approximately $8 six in the previous quarter.
And so the two drilling rigs, which have been chartered out a subsidiary of subsidiary on favorable terms.
In the first quarter the company received charter hire of approximately $21 million from the rig.
Including approximately $7 million lump sum payments relating to the termination of the this line's charter.
This summarizes to an adjusted EBITDA of approximately $119 million for the first quarter compared to <unk> $21 million in the fourth quarter.
We then move on to the profit and loss statement as reported under U S. GAAP.
As we have described in previous earnings call. Our accounting statements are different from those of a traditional shipping company.
As our business strategy focuses on long term charter contract.
Part of our activities are classified as capital leasing.
As a result, a portion of our charter revenues are excluded from U S. GAAP operating revenues and SaaS revenues.
Revenues classified as repayment of investment and finance leases unless alone.
Resulting in associates and long term investments and interest income from associates.
So first quarter report pulsating operating revenue according to U S. GAAP of approximately $162 million, which is less than the approximately $166 million of charter hire actually received for the reasons just mentioned.
During the quarter the company recorded a profit share income of approximately 100008, capesize dry bulk vessels.
Approximately $4 4 million from Q selling arrangements on some of our larger competitors.
The operating expenses for fleet itself compared to the previous quarter due to combination of new vessels entering the fleet and expenses related to COVID-19 related logistical challenges.
In addition, we also saw increase in depreciation due to new additions to our fleet during the quarter.
Furthermore, the company recorded a $7 3 million gain related to positive mark to market effect related to interest rate swaps.
At $2 2 million gain related to the positive mark to market effects related to that.
Investments.
So overall and according to U S. GAAP the company reported a net profit of approximately $4 7 million with $3 77 per share.
Moving on to the balance sheet.
At quarter end, SSL has approximately $149 million of cash and cash equivalents.
And with the sale of <unk> subsequent to quarter end, our system increased by an additional approximately $48 million.
Furthermore, the company has multiple securities of approximately $24 million with market prices at the end of the quarter.
Following the sale of a small container sold subsequent to quarter end. The net four debt free vessels with a combined total of approximately $37 70 to $3 5 million.
On average broker appraisals.
The approximately $247 million of remaining Capex for car carriers under construction is expected to be financed by senior debt facilities.
Similar to <unk>.
With long term charters.
So based on the Q1 numbers the company the book equity ratio of approximately 28%.
Then to summarize.
The board has declared a cash dividend of <unk> <unk> per share for the quarter, an increase of approximately 10% compared to the previous quarter.
This represents a dividend yield of approximately eight 8% based on the closing share price yesterday.
This is Tim.
<unk> third consecutive quarterly dividend.
Since inception of the company in 2004.
The $8 per share or $2 <unk> billion in aggregate, that's been returned to shareholders through dividend.
Last year, <unk> successfully committed more than appealing towards accretive investment.
So far in 2022 more than a billion to the backlog, which now stands at $3 6 billion, providing strong visibility on future cash flow debt service, including the distribution capacity.
And a strong balance sheet and approximately $200 million in cash and fulfill it is very well positioned to execute our new accretive investments.
Yes.
A strong recovery in the offshore drilling market since the beginning of the year.
To flush environment drilling rigs are well positioned to benefit from the increased activity level in the sector.
Wondering gets employed long through market adjust to charter rates, while the other rig is available for new contracts in 2023.
And with that I give the word back to the operator, who will open the line for questions.
Thank you very much and so we are minded to ask a question you will need to press star one on your telephone to withdraw your question. Please.
Please stand by.
One of the questions.
And the first question comes from Greg Lewis from.
<unk>. Please go ahead Sir.
Thank you, Mike and good afternoon, David and thank you for taking my questions.
I did want to talk a little bit about.
Fleet management, and how we should be thinking about.
Additional potential.
Asset sales I believe the high voltage <unk>.
Smaller.
It was like a theater.
Your intermediate.
<unk>.
There was a purchase option on that which was exercised.
As we look out over the next.
Correct me, if that's not right as we look out over the next handful of quarters.
Is there any way to think of Daniel.
Other potential.
Vessels that may have those.
Those options attached given the strength of the overall market.
Probably a lot of those will get exercised there already.
Yes.
Hi, Greg this is all of that.
Yes, we have some call it older I would say.
Smaller mid sized container ships, one was just chartered for another three years with Maersk.
Fairly high rates, reflecting the current market. We have one more that will come open and will be available for chartering again in a few months no no options relating to either of those two assets.
We also have a.
A couple of older 4100, Teu vessels and $5 50 to 800 to use.
Those are on have been on long term charter to MSC.
And they have been effectively structured you can call. It is higher purchase type deals and therefore, we don't haven't really got that call. It market exposure I think.
<unk>.
It would be very very surprised if those options were not exercised but that was also the design at the time.
But if you look at the assets, where we have more capital.
Yes.
At risk you can call. It that is predominantly on the larger ships container ships for 9000 up and they are all built.
From 2013 onwards, which means that they are all the new generation.
Chronically controlled engines and defined after the financial crisis, which means that they have the configuration that we believe will be long term viable in that market.
They're on those vessels.
We have the first coming up for re chartering.
And potentially in 'twenty four.
There are extension options at similar levels and based on what we see the market and where we see replacement cost for assets and even if you adjust for a new vessel being marginally more efficient than any sort of vessels on the water. We think that there is a very high probability even in even in a more normalized.
The market that dose charters will be exercised which means that we will take those charters that effectively out through well into 'twenty five and some of them all the way into 2028. So I think generally we have very long charter coverage on our larger call it significant.
Container ships.
And particularly now when we charter the four disorders. The 614000 Teu forward, starting at $23 24, and fixed them all the way through to 'twenty nine.
Okay, Great and then and then.
I'm not as familiar with that.
The car carriers sector clear.
Clearly.
The contract with Volkswagen is great.
As we try to think about that.
For 280 or island you'd like for us.
We look at global trade, we can kind of see the strength of the container market.
As you look out at it like that.
Car carriers sector.
Are there opportunities in that.
Market to continue to find deploy capital.
Just not like I said I'm not really familiar that's it seems like a great sector for you guys.
A little bit, albeit there's only a handful of vessels and there is that is that an area where.
Like there could be opportunities to continue to deploy capital there or was that just kind of like a couple of niche one off projects, where you were able to step in and.
It's set up some good contracts.
Hi, Tim showed here.
Well the car carrier market is very interesting for us as you say, it's a market where as it fell has an edge I would say you can typically.
The operators have an industrial view loan and they have long term fleet planning.
And there is.
A huge.
Space Theyre now for fleet renewal.
The older ships being sort of redundant due to new emissions regulations coming in where they either have to be replaced or where they have to.
Reduced speed quite drastically in some cases.
<unk> fleet today is about 700 vessels in total.
Quite a big number of those I think at least a couple of hundred ships would have to be sort of built in the next.
567 years just to replace.
The current fleet so.
So we see it is quite an interesting. So the challenge is finding the right vessels the right new building slots in the right Counterparties, but.
We feel we have a nice year.
Okay now that's great to hear yes.
Yes for the yes.
Just not as familiar with the car carrier sector. So you add color on that is always super helpful. And then I did want to touch on the offshore.
The rigs I mean, clearly the west Linus.
Long term contracts.
And a very attractive position.
But I was kind of curious.
Maybe we're thinking about the west Hercules.
It looks to me that asset prices are.
For that type of rig.
Yes.
Yes.
Yes.
Great.
How is the company is there opportunities to monetize that or is it.
We're just working with our music.
Relationships too.
To try to find that find that break out when we get it all kind of on track and then once it's all contract maybe than we could revisit maybe potentially monetizing that asset.
Yes.
It's a good question.
We are focus on that rig is too.
Re contracted we have hard offshore drilling who is I would say, we're a leader in harsh environment operations.
A rig is one of very few rigs that can work in Arctic conditions through the winter, which is which is quite unique.
And then we have a market dynamic right now where we were I think a lot of players in oil companies realize that it's been a been a fundamental underinvestment in the segment for a long time, and we see an energy squeeze I would say, particularly in Europe .
Who is being so reliant on gas and natural gas from Russia, now needing to source that from from elsewhere and.
Of course, the North Sea is very closed or lots of pipelines, but you need to do a lot of drilling to do to get that production going.
So that's just one area. We also see a lot of call it focus on deepwater.
Could be deepwater.
Brazil deepwater West Africa, where that break also it would be fully compatible you wouldnt utilize call. It the winterized sort of features of the rig but would still work perfectly well also in normal sort of harsh environment type areas. So I think it's a rig.
With a lot of flexibility.
I don't think this is the time to necessarily solve that rig if thats what thats, what you alluded to I mean, our focus is cash flow and get to get contracted and build back book also on this unit.
<unk>.
We are of course encouraged by the strong oil price.
Fact that we finalized our negotiations with <unk> in February and then as we all know oil prices popped, 50% after that so market has changed quite dramatically over the last few months.
Absolutely good good to hear Okay, alright, thank you very much for the time.
Thank you.
The next questions question comes from Chris <unk> from Jefferies. Please go ahead Sir.
Hello, gentlemen, and congratulations on a lot of positive developments here.
Thank you.
I just had a question related to the lineup on the.
$500 million in revenue backlog that you've talked about.
<unk> sensitive is that to the market index rate and can you kind of talk a talk around that.
Absolutely I mean.
That was basically based on global market index rates at the time, we currently have.
A variable rated CGM during that transition period, various wholesale is supplying for DLC, which is typical.
Well on the Norwegian Continental shelf.
I think if you look at.
The market rate development.
Going forward that this is.
Both data and it's also supported by by recent pictures of same type design, a mortgage from by Maersk drilling two acre BP on fiber deals.
You see that market index rates potentially increasing going into 'twenty, we intent to Florida of course have a positive impact on.
On the kind of the backlog number.
Okay, that's fair.
On the on the Hercules going into special survey.
How long do you expect that will take will that commenced during the first quarter of next year and how long do you think it will take before.
I guess, it's secured on a new charter after that.
In terms of ill start with the timing of re delivery from CA drill I think thats the current estimated to endo.
End of the fourth quarter.
Excited to be confirm them, we are doing the necessary prepare meant with the trading portfolio.
Yes, I think.
Base case, I mean, we will achieve in about 90 days for the Sps.
And then we are currently now marketing the rig for various employment opportunities.
And exact commencement date is not confirmed yet I think what I can comment on that.
If you look over the last couple of months the tender activity has increased significantly.
Both in kind of the harsh environment.
Area, but also potential worldwide operations are.
Our focus is having.
I think first in class exploration the harsh environment rig is to kind of keep the rig in in kind of.
Norway, potentially Canada or UK sector.
And then with respect to the current deployment.
Canada. It just started drilling a couple of days ago.
And therefore.
We will not know until the first well in that program offshore Canada.
<unk> drilled we don't know exactly how long time, it will take to finish the rest of the work and therefore, we have to await that before we can sort of be very specific on timing for when we when the rig will be redelivered in Norway, and therefore, when the Sps process Ken.
Can start but it should be it should be around year end.
At least that's our expectation and this has also has also has a bearing on on sort of call. It contract discussions we have four employments after.
We delivered Sps.
Okay. Yeah. Thanks for the color on that I guess my follow up question to that would be the <unk>.
Travel time from Canada to Norway, and then if it is redeployed.
Back into Canada, what the travel time would be.
Think that.
Some of it depends on the weather I think that could be.
I think two or three weeks give or take in normal circumstances.
The rig will be at least.
On the base case now.
Im seeing operations in October .
At that time, and kind of the western and north of that I think can be a bit choppy. So I mean.
It all depends if they think it's approximately.
Two weeks kind of transfer back to Norway.
Okay I appreciate that thank you for the time.
Thank you.
And the next question comes from Richard Diamond possible capital. Please go ahead Sir.
Yes.
I have two questions.
Are you this morning.
I wanted to spell Asaf I'll call them one is directional.
On the <unk> question.
Certain segments.
Yes.
Try Paul could we potentially be entering.
A super cycle, given the lack of new pelting restructuring.
<unk>.
Trade routes such as call coming from.
Australia to Rotterdam et cetera et cetera.
Second question is looking.
Looking forward.
What areas do you think are the most interesting to allocate capital on the future.
Thank you and thanks for thanks for calling in.
Yes, I would say that the dry segment it looks very interesting. Both obviously, both the dry segmented also the tanker space I mean in both segments. You have you have sort of what your historic low order books at least.
Recent history I think for tankers you have to go back 2025 years with duties to see similarly sort of low order books.
And.
As we all know.
The shipping market in general has always been high.
Heavily.
Influenced by.
Owners sort of destroying their own markets.
When when when market seems reasonably good.
Everybody run salt and orders vessels and when those vessels are finished at the shipyard.
Suddenly too many vessels available.
Market crashes are good example of this was how the drybulk market work.
And several years after the ordering boom in 2014.
Where you had consistently nice high growth in demand, but the but just ordered way many more bulk vessels and therefore it took several years to catch up as you pointed out.
You have.
The yards basically full four if you want to order at the series of vessels Youre not talking late 2025, and enter 2026 to get the delivered so.
In either of the Drybulk market and also the tanker market. If you. If you really want to sort of order a series of vessels youll have to wait quite a long time.
So and in the meantime of course.
Could be a very interesting market given that there is a lack of supply also what could impact the market going forward from 2023 is to new.
<unk>.
C III regulations that would potentially limit or reduce the ton mile capacity because older vessels less energy efficient vessels may have to reduce power.
To be sort of approved and therefore this is based on <unk>, the new IMO regulations, and therefore effectively take out transportation capacity from the existing fleet.
This is also an effect you see on the tanker side not to the same extreme.
Same degree on the Drybulk vessels and maybe <unk>.
Car carriers was a question earlier car carriers are probably the segment, where you could see more of this effect because you have a relative.
Low deadweight cargo capacity compared to the size of the vessels because they carry typically carson enrolling equipment. So I think generally and several of these segments. There are very interesting market dynamics and then on top of that.
If you are worried about the potential inflation risk owning vessels.
In many ways.
<unk> hedge.
Because they are real hard assets.
If there is inflation that will pull up the also the value and residual value of these assets.
Then turning to your second question, where do we see investment opportunities and I would say, we see we do see investment opportunities in all of these segments.
We have to be we cannot comment specifically on what the what we look at.
But we are we are looking at many opportunities in several of these sectors.
And.
But we try to be careful when we invest.
Have to have a certain degree of paranoia when you when you make investments in volatile markets.
What we tried to do is.
Charter out vessels to <unk>.
Users that are typically industry leaders and larger entities.
Because we think that over time will give us.
A less lower risk in the portfolio and therefore.
Higher probability of a very strong long term return so I hope that answered the question.
You had there yes, thank you very much.
Thank you.
Thank you very much for your questions I will now hand back the call to the speakers for the closing remarks.
Thank you Dan I would like to thank everyone for participating in this conference call and also thank the <unk> teams on board the vessel onshore for the continued efforts in delivering value for our stakeholders. If you do have any follow up questions. There are contact details in the press release, where you can get in touch with us through the contact pages on our webpage.
Www Dot <unk> Corp, Dot com. Thank.
Thank you.
Okay.
This concludes today's conference call. Thank you for participating you may now disconnect.
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Yes.
Sure.
Sure.
<unk>.
Okay.
Sure.
[music].
Sure.
[music].
Okay.
[music].
Sure.
[music].
Please.
Okay.
Okay.
Sure.
Sure.
Yes.
[music].
Okay.
Yes.
Okay.
[music].
Yes.
Sure.
Yes.
Yes.
[music].
Sure.
Okay.
[music].
Okay.
Yes.
[music].
Okay.
Okay.
Yes.
Okay.
Yes.
[music].
Okay.
Sure.
[music].
Yes.
Sure.
Okay.
Okay.
Okay.
Sure.
Okay.
Okay.
Yes.
Okay.
Okay.
<unk>.
Thank you.
Okay.
Okay.
Sure.
Okay.
Sure.
Sure.
Sure.
Yes.
Okay.
Yes.
Sure.
Great.
Okay.
Thanks.
Okay.
Okay.
Yes.
Okay.
Right.
Okay.
Great.
Yes.
Yes.
Perfect.
Right.
Okay.
Sure.
Okay.
Yes.
Okay.
Okay.
Okay.
Yes.
Yes.
Okay.
Yes.
Okay.
Yes.
Yes.
Okay.
Yes.
Okay.
<unk>.
Okay.
[music].
Yes.
Okay.
Yes.
Yes.
Yes.
Understood.
Yes.
[music].
Yes.
Okay.
Okay.
Okay.
Okay.
[music].
Okay.
Got it.
Okay.
Okay.
Yes.
<unk>.
Yes.
Yeah.
Yes.
Okay.
Yes.
Yes.
Okay.
Okay.
Okay.
Thank you.
[music].
Yeah.
Okay.
Okay.
Yes.
Okay.
Okay.
Yes.
Okay.
Thank you.
Okay.
Sure.
Okay.
Yes.
Yes.
Sure.
Okay.
Okay.
Okay.
Okay.
Yes.
Okay.
Okay.
Okay.
Okay.
Sure.
Yes.
Okay.
Yes.
Yes.
Okay.
Great.
Yes.
Yes.
Okay.
Okay.
Okay.
<unk>.
Okay.
Okay.
Yes.
Yes.
Okay.
Sure.
Okay.
Okay.
Sure.
Okay.
Sure.
Okay.
Okay.
Sure.
Thank you.
Okay.
Okay.
Okay.
Okay.
Okay.
Okay.
Yes.
Thanks.
Okay.
Okay.
Okay.
Okay.
Yes.
Okay.
Okay.
Okay.
Yes.
Okay.
Okay.
Yes.
Okay.
Sure.
Yes.
Thanks.
Yes.
Yes.
Okay.
Thanks.
Thank you.
Okay.
Yes.
Sure.
Sure.
Yes.
Okay.
Yes.
Okay.
Yes.
Sure.
Okay.
Sure.
Yes.
Yes.
Yes.
Okay.
Yes.
Yes.
Okay.
Sure.
Okay.
Okay.
Yes.
Yes.
Okay.
Okay.
Yes.
Sure.
Yes.
Sure.
Thanks.
Yes.
Okay.
Yes.
[music].
Okay.
[music].
Yes.
Yes.
Yes.
Okay.
[music].
Okay.
Yes.
Yes.
Okay.
Yes.
[music].
Okay.
Yes.