Q1 2022 Euroseas Ltd Earnings Call
Yeah.
[music].
Thank you for standing by ladies and gentlemen, and welcome to the U S Y conference call on the first quarter 2022 financial results, we have with US today, Mr. Alistair does with US Chairman and Chief Executive Officer, and Mr. <unk> <unk>, Chief Financial Officer of the company.
Speaker 1: Thank you for standing by, ladies and gentlemen, and welcome to the Euro Dry Conference call on the first quarter 2022 final.
Speaker 1: We have with us today Mr. Aristides Pitas, Chairman and Chief Executive Officer, and Mr. Itazos Aslitis, Chief Financial Officer of the company.
At this time, all participants are even though they send only valid there will be a presentation followed by question and answer session at which time if you wish to ask a question. Please press star one on your telephone keypad and wait for the automated message advising your line is open.
Speaker 1: If you have any questions, please press star 1 on your telephone keypad and wait for the automated message advising your line is open.
I must advise you that this conference is being recorded today. Please be reminded that the company announced its resolved with a press release that has been publicly distributed.
Speaker 1: They reminded that the company announced its results with a press release that has been publicly distributed.
Before passing the floor to Mr. P dos I would like to remind everyone that in todays presentation and conference call. You wish you I will be making forward looking statements.
Speaker 1: I would like to remind everyone that in today's presentation and conference call, your drive will be making forward-looking statements. These statements are within the minimum of 30 minutes.
These statements are within the meaning of the federal Securities laws.
Matters discussed may be forward looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized.
Speaker 1: which are based on current management expectations that involve risk.
Speaker 1: kindly draw your attention to slide 2 of the webcast presentation, which has the full forward looking statement, and the same statement was also included in the press release.
Kindly turn your attention to slide two of the left that's what goes presentation.
It has the full forward looking statement and the same statement was also included in the press release.
Please take a moment to go through the whole statement and read it I.
I would now like the past the floor over to Mr. P dos. Thank you Sir Please go ahead.
Good morning, ladies and gentlemen, and thank you all for joining us today for those scheduled cold fill in school.
Speaker 2: Good morning ladies and gentlemen and thank you all for joining us today for our scheduled conference call.
Speaker 2: Together with me, Stasos Aslidis, I am a County Financial Officer.
Together with me starts this is Lee <unk> Chief Financial Officer.
Speaker 2: The purpose of today's call is to discuss our financial results for the three-month period ended March 31, 2022.
The purpose of today's call is to discuss our financial results for the three months period ended March 31st 2022.
Let's turn to slide <unk>.
Speaker 2: Our income statement highlights are shown here. For the first quarter of 2022, reported total net revenues of $45.4 million and a net income of $29.9 million.
Other income statement highlights are shown here.
The first quarter of 2022 reported total net revenues of $45 $4 million and the net income of 29 $49 million.
Speaker 2: Adjusted net income attributable to common shareholders was $26.8 million, or $3.70 per share diluted.
Adjusted net income attributable to common shareholders was $26 8 million lives well Felipe so he loves his 70 cents per share diluted.
Speaker 2: Jastadi Bidar for the period stood at $31.1 million.
Adjusted EBITDA for the period stood at $51 $1 million.
Speaker 2: Our CFO Tasos Aslivis will go over the financial highlights in more detail later in the presentation.
Our CFO task specifically this will go over the financial highlights in more detail later in the presentation.
Yeah.
Speaker 2: We are indeed very pleased with the company's increased profitability, which is of course the result of the extremely strong chart of HR vessels recorded during the first quarter of 2022.
We are indeed, very pleased with the company's increased stability, which is of course. The result of the extremely strong sort of age of vessels would go live during the first school through 'twenty two.
In this positive environment and with a robust earnings visibility well into 2024, we believe our stock should be trading at much higher levels given the value of these contracted revenues and the net asset value of the company.
Speaker 2: In this positive environment and with robust earnings visibility well into 2024, we believe our stock should be trading at much higher levels, given the value of these contracted revenues and the net asset value of the company.
We believe these factors combined give me eight captivating up opportunities for us.
Speaker 2: We believe these factors combined create captivating opportunities for us.
Speaker 2: Therefore, the company's board of directors approved a share repurchase program for up to a total of $20 million of the company's common stock to be used at management's discretion.
Therefore, the company's board of directors approved a share repurchase program for up to a total of $20 million of the company's common stock to be used at management's discretion.
Speaker 2: The board will review the program after a period of 12 months.
The Board will review the program after a period of 12 months.
Speaker 2: Fair repurchases will be made from time to time from cash in open market transactions at prevailing market prices or in privately negotiated transactions.
Very bad decision will be made from time to time for me from cash in open market transactions at prevailing market prices or in privately negotiated transactions.
Speaker 2: The timing and amount of purchases under the program will be determined by management based upon market conditions and other factors.
The timing and amount of purchases under the program will be determined by management.
Upon market conditions and other factors.
Speaker 2: The program does not require the company to purchase any specific number or amount of shares and may be suspended or reinstated at any time in the company's discretion and without notice.
The program does not require the company to purchase any specific number or a month of SaaS and may be suspended all the reinstated at any time in the company's discretion and without notice.
Yeah.
Speaker 2: At the same time, our increased profitability and charter coverage has allowed us to reinstate our common stock dividend plan, which ran consecutively from 2005 until 2013, but had to be paused due to the negative markets experienced in the last decade.
At the same time, our increased profitability in charter coverage has allowed us to range to reinstate a goldman stopped the dividend plan.
Sharon consecutively from two O five and 10 to 15, but had to be both due to the negative markets experienced in the last decade.
Speaker 2: This plan rewards our shareholders without having to hold back our growth strategy, as we are paying out just a small part of our contracted earnings.
This plan involves out to shareholders without having to hold back our growth strategy.
Being out just a small part of our contracted revenues.
In this respect our board of directors has declared a quarterly dividend of 50 cents per share for the first go to the 2020 due payable on or about June 16th 2022 to shareholders of record on June .
Speaker 2: In this respect, our Board of Directors has declared a quarterly dividend of $0.50 per share for the first quarter of 2022, payable on or about June 16, 2022, to shareholders of record on June 9, 2022.
2022.
Speaker 2: Despite the short-term rewards we have initiated for our shareholders, we do remain committed to further growth of the company.
Despite the short term the votes, we have initiated for shareholders. We do remain committed to further the growth of the company.
Speaker 2: We therefore continue to examine investment and other opportunities and we expect to remain a significant participant in the feeder container ship market as we grow our fleet.
Therefore continued to examine investment another opportunities and we expect to remain a significant participant in defeat the containership market as we go over fleet.
Speaker 2: Please turn to slide four, where we discuss our recent chartering and operational development.
Please turn to slide four when we discuss our recent chartering in operation with developers.
Speaker 2: Motovessel Aegean Express Charter was extended for approximately 36 to 39 months at $41,000 per day beginning March 31st.
Motor vessel Aegean Express Jonathan was extended for approximately 36% to 39 months at $41000 per day, beginning March 31st.
Motto vessel. She lives yoke, Linda is fixed for the single voyage of the $160000 a day, that's still our belief idle period as a result of the loss of the short term short of $130000. A day that was to meet before before the full year chart that we had concluded that.
Speaker 2: MotoVessel Synergy Auckland was fixed for a single voyage at $160,000 per day after a brief idle period as a result of the loss of the short-term charter of $130,000 per day that was to be performed before a four-year charter we had concluded at $42,000 per day.
42000 barrels per day.
The charterer subsequently, Michigan took a delivery date. Therefore this so this short term side that was extended by approximately 30 days Nate Blue at $180000 a day before it started its new four years after which it is going to be doing.
Speaker 2: The charter subsequently missed its redelivery date, therefore this short-term charter was extended by approximately 30 days in April , at $180,000 a day, before it started its new four-year charter, which it is currently doing.
We are also pleased with the fixture of our first two new building vessels ahead of the delivery date at $48000 a day for a minimum period of 36 months each.
Speaker 2: We are also pleased with the fixture of our first two new building vessels ahead of the delivery dates at $48,000 per day for a minimum period of 36 months each.
Speaker 2: Motovessel Gregos' new charter will commence in March 2023 upon its delivery, while Motovessel Steratakis' new charter will commence in June 2023 upon the delivery of that vessel too.
Motor vessel <unk> gross new charter will commence in March 'twenty 'twenty three upon its delivery while motor vessels that gives new chapter will commence in June 2023, upon the delivery of that vessel too.
Speaker 2: Regarding repairs and dry docking, EM Corfu underwent dry dock during the first quarter, while the Akinada Bridge incurred some repairs after having lost some containers at high sea.
Regarding repairs and Drydocking amcor full underwent dry dock during the first quarter, while not the bleach and get some repairs after having lost some containers of high seas.
Speaker 2: Furthermore, motor vessel Synergy Auckland incurred about five days of commercial off-hire in February 22, as discussed above.
Little bit of more motor vessel synergy Auckland encouraged about phase days or five days of commercial off guys in February 'twenty, two as discussed above.
Speaker 2: Please turn to slide 5, where we discuss our FLEET's growth strategy.
Please turn to slide five where we will discuss our fleet growth strategy.
Adhering to our plan to renew our fleet and expanded our footprint in the feed the sector. We continue focusing on the most commercially demanded vessel sizes.
Speaker 2: Adhering to our plan to renew our fleet and expand our footprint in the feeder sector, we continue focusing on the most commercially demanded vessel sizes.
Speaker 2: In January 2022, we placed orders for two additional EcoDesign fuel-efficient 2800 TEU new building container ships at a combined price of about $85 million.
In January 2022, we placed orders for two additional eco designed fuel efficient 2800, <unk> new building container ships at the combined price of about $85 million.
Speaker 2: In May 2022, we exercised our option to proceed with the construction of two more sister vessels for a combined consideration of about $86 million.
And in May 2020, do we exercised our option to proceed with the construction of two more sister vessels for a combined consideration of about $86 million.
Speaker 2: All four vessels will be constructed at Hyundai Mippo Dockyard in South Korea.
All four vessels will be constructed at <unk> in South Korea.
Speaker 2: vessels, a sister ships of a pair of vessels, which we ordered, which were ordered in June 2021. And as I said, it was just started now.
The vessels are sister ships of the bed with vessels, which we which.
With all of them in June 2021, and as I said was that about.
The phone you I'd expect it to be delivered between the fourth quarter of 2023 in the fourth quarter of 2024.
Speaker 2: The four new orders are expected to be delivered between the fourth quarter of 2023 and the fourth quarter of 2024.
In addition to these we placed orders for three new building vessels with a carrying capacity of 1800 Teu, each which will also be constructed the mi book.
Speaker 2: In addition to this, we placed orders for three new building vessels with a carrying capacity of 1,800 TEU each, which will also be constructed at Hyundai Meepo, for a total consideration of approximately $102 million.
Total consideration of approximately $102 million.
Speaker 2: The vessels are expected to be delivered during the first half of 2024, one in the first and two in the second quarter of the year.
The vessels are expected to be delivered during the first half 'twenty 'twenty four wild in the first and doing the second go through the year.
Speaker 2: At the same time, we also scanned the market for second-hand vessels with long-term timed charters in place, at attractive acquisition prices, bringing the cost basis of the vessels below historical average levels at the end of the charter.
At the same day, we also scan the market for secondhand vessels with long term time charters in place at attractive acquisition prices, bringing the cost basis of the vessels below historical average levels at the end of that side of it.
Yeah.
Speaker 2: As previously announced, at the beginning of May, we agreed to acquire MV Emmanuel P, ex-Sispan Melbourne.
As previously announced at the beginning of May we had COVID-19 to a quiet M. B a mine will be X seaspan, Malibu, which has a charter rate of $19000 of band as much strength in 'twenty five and N V. The N B XC spend Manila, which has a charter rate of 20.
Speaker 2: which has a charter rate of $19,000 per day until March 2025, and MV RENAPI, ex-Hispan Manila.
Speaker 2: It has a charter rate of $20,250 per day until April 2024, and subsequently, based on the context index, with a floor of $13,000 and a ceiling of $21,000 per day until February 2024.
<unk> thousand two kinds of in the $50 per day until April of 'twenty 'twenty four and subsequently based on the context index with a floor of 13000 lives in the ceiling of $21000 a day until February 25.
Both intermediate sized container vessels have a capacity of 4252 D. You each and were built in two five and two O seven respectively.
Speaker 2: Both intermediate-sized container vessels have a capacity of 4,252 TEU each and were built in 205 and 207 respectively.
The vessels were required for a combined ratio of $37 million.
Speaker 2: The vessels were acquired for a combined price of $37 million.
I'm happy to say that.
Speaker 2: I am happy to say that an MV Emmanuel P was delivered to the company today in the morning.
<unk> will be delivered to the company today in the morning.
Speaker 2: whilst MV RENAPI is expected to be delivered sometime within June 2022.
Y N V and the B is expected to be delivered sometime within June 2022.
Speaker 2: Both acquisitions have been initially financed with the company's own funds.
Both acquisitions have been initially financed with the company's own funds.
Please turn to slide six where you can see our current fleet profile.
Speaker 2: Please turn to slide 6 where you can see our current fleet profile.
Speaker 2: Eurosea's current fleet is comprised of 18 vessels, actually we should say 17 vessels as the RENAP will be delivered to us in June . Anyway, of these 18 vessels, 10 are feeder container ships and 8 intermediate container carriers.
<unk> current fleet is comprised of 18 vessels actually we should say 17 verses as their hand that they will be delivered to us in June anyway. Over these 18 vessels then feed the container ships and eight intermediate contain that got it is.
Speaker 2: Eurus' 18 container ships will have a carrying capacity of about 59,000 TEU and an average age of about 17 years.
You received 18 container ships will have a carrying capacity of about 59000 Teu and another of its age of about 17 years.
Speaker 2: Slide 7 shows the nine feeder container ship new buildings with a total carrying capacity of 22,200 TEU that are expected to be delivered between 2023 and 2024.
Slide seven shows the nine feet the containership new buildings with a total carrying capacity of 22250 U that that expected to be delivered between 2010 three in 2024.
Speaker 2: After the delivery of the new building vessels, Eurosea's fleet will consist of 27 vessels with a total carrying capacity of about 81,000 TEU.
After the delivery of the new building vessels <unk> fleet will consist of 27 vessels with a total carrying capacity of about 81000 Teu.
Slide eight shows our vessel employment.
Speaker 2: As you may see, we have covered 97% of our capacity in 2022, approximately 78% of our capacity in 2023, and almost 55% in 2024.
As you May see we have covered the 97% of our capacity in 2022, approximately 78% of our capacity in 2023, and almost 55% in 'twenty 'twenty four.
Speaker 2: Let's now turn to slide 10 to review how the market has developed in the last decade.
Let's now turn to slide then you'll have you have the market has developed in the last decade.
Speaker 2: Charter rates were low across all segments until mid-2020, after the onset of the pandemic.
H well low charter rates were low across all segments until mid 'twenty two entity after the onset of the pandemic.
Speaker 2: Since then, shelter rates have improved about 6 times, posting 10-year historical highs.
Since then south of each of them have improved about six days boosting 10 year historical highs.
Despite the short lived there anything container rates. It was registered during November and December of 2021 the rates continue to climb to new highs in the first goes to the 'twenty to 'twenty two.
Speaker 2: Despite the short-lived retreat in container rates that was registered during November and December of 2021, rates continued to climb to new highs in the first quarter of 2022.
Although we've seen a slight correction in the last weeks for the feed the sizes, we expect market fundamentals to be favorable throughout the year.
Speaker 2: Although we have seen a slight correction in the last weeks for the feeder sizes, we expect market fundamentals to be favorable throughout the year.
Please turn to slide 11 to go over some other market highlights.
Speaker 2: Please turn slide 11 to go over some other market highlights.
Speaker 2: As we've mentioned, time-shutter rates across all segments have skyrocketed over the past 12 months and have reached all-time highs.
I didn't even mention time charter rates that coastal segments have skyrocketed over the past 12 months and have reached all time highs.
Speaker 2: Alongside the increased time charter market, prices for second-hand vessels have also increased, with the average second-hand price index up about 17% in Q1'22 over Q4'21.
Alongside the increased time charter market prices for secondhand vessels have also increased with the advent of second hand price index up about 17%.
Q1, 'twenty two over Q4 of 21.
Speaker 2: Price gains were most apparent in the feeder segments, with a guideline price of 2750 TEU 10-year-old vessel rising approximately 180% year-over-year to
Price gains were most apparent in the feed the segments with the guideline price over 2000, and 750 Teu 10 years, one vessel the rising approximately 108% year over year.
$256 million.
Speaker 2: During the last couple of weeks, we have seen, though, some softer deals being concluded in the smaller feed dissections.
During the last couple of weeks, we have seen though some softer deals being concluded and the smaller feeder sector.
Speaker 2: During the first quarter, the new building index increased by about 2.4%.
During the first quarter, the new building index increased by about two 4%.
Speaker 2: The sentiment of the new building market continues to follow its upward trend, which is also reflected in the current container ship prices, which are holding at 5-year highs.
The sentiment of the new building market continues to followed subsequently threatened which is also reflected in the current containership prices, which are holding at five year highs.
Speaker 2: The idle containership fleet, as of May 9, stands at about 270,000 TEU, or 0.7% of the fleet, and has remained around those levels, lowest levels, in the last year.
The idle containership fleet as of May nine stands at about 270000, Teu or Boeing 7% of the fleet and has remained around those levers lowest levels in the last year.
Speaker 2: However, due to lockdowns in China, the trend seems to be retreating a little bit in the last few weeks. When China reopens, these idle vessels will also be, of course, probably reactivated.
However, due to lockdowns inside the trend seems to be if anything a little bit in the last few weeks when China reopens. The size of the vessels will also be of course, probably reactivated.
There have been no demolitions to date in 2022.
Speaker 2: have been no demolitions to date in 2022.
Speaker 2: The capacity of container ships to be scrapped is expected to be approximately 34,000 TEU by Clarkson.
Capacity of container ships to be scrapped is expected to be approximately 34000 teu by classes.
Speaker 2: Scrapping price has remained high so far during the year and stands at around $660 per lightweight ton as of May 2020.
<unk> price has remained high so far during the year and stands at around $660 per lightweight ton as of May 2022.
Speaker 2: Overall, the fleet has grown by about 1.1% year-to-date, without, of course, accounting for the idle reactivation.
Overall, the fleet has grown by about one 1% year to date without of course accounting for the idea of Activations.
Speaker 2: As it stands, approximately 80% of the capacity ordered so far in 2022 has been alternative fuel capable, mainly LNG dual fuel, while in 2021, just 22% of the capacity contracted was with an alternative fuel capable.
As it stands approximately 80% of the capacity all of that so far in 2022 has been their ability fuel gave the booth, mainly LNG you had a few.
While in 2021 just 22% of the capacity contracted it wasn't with the settlement if you will Gabe.
Please turn to slide 12.
Global growth is expected to slow significantly in 2022.
Speaker 2: Global growth is expected to slow significantly in 2022, largely as a consequence of the ongoing conflict between Ukraine and Russia, increased inflation pressures and the continuing lockdowns in China.
Largely as a consequence of the ongoing conflict between the Canadian and the Russia, Italy, and Greece inflation pressures and the continuing lockdowns in China.
Speaker 2: In its latest report, the IMF lowered its previous global GDP estimates from 4.4% growth to 3.6% for this year and from 3.8% to 3.6% for 2023.
In its latest report the IMF lowered its previous global GDP estimate from four 4% growth to three 6% for this year.
Three 8% to three 6% for 2023.
The largest contract finished projected for that I assume due to the sanctions as well as European countries decision to scale back and are achievable.
Speaker 2: The largest contraction is projected for Russia due to the sanctions, as well as European countries' decision to scale back energy.
Speaker 2: Sharper-than-expected slowdown in China remains a key risk to growth and is affecting global supply chains.
So equivalent expiring expected slowdown in China remains a key risk to growth and this is affecting global supply chains.
Speaker 2: Most stimulus measures are likely to be employed in order to speed economic activity.
Most stimulus measures are likely to be employed in.
All of this to speed economic activity, but it is strength of any rebound is uncertain and will largely depend on the scale of future COVID-19 related outbreaks in both of those.
Speaker 2: But the strength of any rebound is uncertain and will largely depend on the scale of future COVID-related outbreaks and lockdowns.
The IMF has also got U S growth to three 7% for 2022, and two 3% for 'twenty to 'twenty three.
Down from its January predictions, or 4% and $2 <unk>, respectively for the U S.
Well I'll speak for emerging markets and developing economies are also generally for lower growth in 'twenty two than in 'twenty one.
The developed economies, the only Japan and the Asia in five I'd expect it to do better in 2020.
Two of them.
Looking at the container trade and according to Clarksons adhesives demand is expected to grow by three 2% in 2022 compared to six in the hospice scent for the previous year.
For 'twenty to 'twenty, three we expect containerized trade demand to grow at a moderate pace of fee and the cost per se.
Speaker 2: Rate and growth projections are being continuously revised as the effects of the lockdowns in China and geopolitical tensions between Russia and Ukraine on world growth and trade are being continuously reassessed.
There is some growth projections are being continuously revised as the effects of the lockdowns in China and geopolitical tensions between Russia, and Ukraine on world growth and trade are being continuously VSS.
Please turn to slide 15, you'll see the containership age profile and delivery schedule.
Speaker 2: Please turn to slide 13 to see the ContainerShip H profile and delivery schedule.
Speaker 2: As you can see in the container ship age profile chart located on the left side of the slide, we have a young fleet with a mere 8% of ships being over 20 years old.
As you can see the containership age profile, China located on the left side of the slide we have a young fleet with EMEA, 8% of ships being over 20 years old.
Speaker 2: However, the older vessels are mainly concentrated in the smaller classes in which are ship-shoppers.
However, the older vessels are mainly concentrated in the smaller classes in which our <unk> subsidiary.
Speaker 2: The right side chart shows the delivery schedule of the current container ship of the book, which is expressed as a percentage of the fleet.
The right side.
So as the delivery schedule of the current Containership order book, which is expressed as a percentage of the fleet.
The circled figures for 2022 to 'twenty 385 that reflects the anticipated fleet growth before any scrapping and slippage is.
Speaker 2: The circled figures for 2022-2025 reflect the anticipated fleet growth before any scapping and slipping.
Currently the total containership order book stands at 26, 4% of the fleet and the majority of the deliveries are scheduled for the second half.
Speaker 2: Currently, the total container ship order book stands at 26.4% of the fleet and the majority of the deliveries are scheduled for the second half of 2024 only.
Oh.
Please turn to slide 14, where I will discuss our outlook summary for the containership market.
Speaker 2: Please turn to slide 14 where we discuss our Outlook Summary for the Container Ship Market.
As previously mentioned the Canadian the rest of conflict has contributed to this rising uncertainty in inflation.
Speaker 2: As previously mentioned, the Ukraine-Russia conflict has contributed to this rising uncertainty and inflation.
Speaker 2: inflation, while continued Chinese lockdowns are causing delays in the easing of global supply bottlenecks.
And inflation, while continued Chinese lockdowns are causing delays in the easing of global supply bottlenecks.
Speaker 2: Supply and demand analysis still suggests a fair market continuing in 2022.
Supply and demand analysis still suggests a firm that we could continue in 2022.
The short to medium term outlook for the container sector remains positive with both congestion and trade disruptions likely to continue to provide support throughout the year alongside the moderate fleet growth of 4%.
Speaker 2: The short to medium-term outlook for the container sector remains positive, with port congestion and trade disruptions likely to continue to provide support throughout the year, alongside a moderate fleet growth of 4%.
In addition, the Chinese loved that ones are currently affecting local production levels, which could have a material implications if they persist but could you also kind of swung to a rapid recovery once the lockdowns end.
Speaker 2: In addition, the Chinese lockdowns are currently affecting local production levels, which could have material implications if they persist, but could also transform to a rapid recovery once the lockdowns end.
These logistical bottlenecks are expected to remain in the near term.
Speaker 2: These logistical bottlenecks are expected to remain in the near term.
Speaker 2: Longer-term, though, fundamentals are harder to predict and will depend on the interplay of, first, what demand for vessels will be once transportation system disruptions ease.
Long term the fundamentals.
Are there to predict and will depend on the interplay of first what demand for vessels will be one since flotation system disruption disease.
Speaker 2: Second, the fallout of the Ukraine-Russia conflict and its effect on world economic growth and containerized trade.
Second the fallout of the Okay and that has a conflict and its effect on world economic growth and containerized trade fairs.
Speaker 2: Thirdly, the material supply pressure from 2023 onwards due to increased deliveries and easing of congestion and whether it will overtake demand growth. And lastly, the effect of new environmental regulations which will probably result in further slow steaming by 2023-24 and effectively removing capacity from the market.
Thirdly, the material supply pressure from 'twenty to 'twenty three on rose due to increased the limits and easing of congestion and whether it will take demand to grow and build.
Lastly, the effect of new environmental regulations, which will probably result in further slow steaming by 'twenty two 'twenty three 'twenty, four and effectively removing capacity from the market.
Let's move to slide 15.
The left side of the slide shows the evolution of one year time charter rates for containers with a capacity of two and a half thousand teus since 2010.
Speaker 2: The left side of the slide shows the evolution of one-year time charter rates for containers with a capacity of 2,500 TUs since 2010.
Speaker 2: As discussed, we are witnessing the highest charter rates in the last decade.
As discussed we are witnessing the highest charter rates in the last decade.
Speaker 2: According to Clarkson's, as of the end of last week, the one-year daily time charter rate for a 2,500-EU container ship stood at $76,000 per day.
According to Clarksons at the end of last week. The one year daily time charter rate for 205000 Teu can stay in the <unk> stood at $76000 per day.
The right hand side of this slide shows the historical price range for the 10 year old containers shipped with a capacity of 2500 Teu.
Speaker 2: The right-hand side of the slide shows the historical price range for a 10-year-old container ship with a capacity of 2,500 T.U., which has a current price of $56 million and is the highest of all
Which has a current price of $56 million.
And is the highest of all the last decade.
Speaker 2: There is no doubt that at some point charter rates and prices have to correct, as such high shipping costs threaten to derail the world order of globalization.
There is no doubt that at some point charter rates and prices have to correct.
Such high shipping costs threaten to debate the world of liberalization.
Speaker 2: The astronomically high margins of today will no doubt give way to more rational markets once enough new vessels are built and conditions of trade normal.
There is phenomenally high margins of today will no doubt give way to more rational as markets once enough new vessels are built in conditions of today's normalize.
You'll see it recognizes these facts and positions the company accordingly to take advantage of the opportunities presented by the current market, but also be prepared for the correction that will sometimes come.
Speaker 2: Eurosys recognises these facts and positions the company accordingly to take advantage of the opportunities presented by the current market, but also be prepared for the correction that will sometime come.
Speaker 2: The company will continue growing when the right opportunities are spotted, but will maintain a strong balance sheet throughout to weather any storm that may come. And with that, I will now pass the floor to our CFO Tasos Aslidis to go over our financial highlights in further detail.
The company will continue growing when the right opportunities are supportive, but we'll maintain a strong balance sheet throughout to weather any storm that may come and with that I will now pass the floor to our CFO <unk> <unk>.
To go over our financial highlights in further detail.
Speaker 2: Thank you very much, Aristidis. Good morning from me as well, ladies and gentlemen.
Thank you very much good morning.
Good morning from me as well, ladies and gentlemen.
Speaker 2: As usual, I will now take you through the next five slides of our presentation and give you an overview of our financial highlights for the first quarter of 2022 and compare the results to the same period of last year.
I will now take you through the next five slides of our presentation.
A review of our financial highlights for the first quarter of 2022 and compare the results to the same period of last year.
Let's turn to slide 17.
Speaker 2: For the first quarter of 2022, Eurosis reported total net revenues of 45.4 million, representing a 217% increase over total net revenues of 14.3 million during the first quarter of last year.
For the first quarter of 2022.
We reported total net revenues.
$5 4 million representing Inc.
17% increase.
Total net revenues of $14 3 million during the first quarter of last year.
The company reported net income and the net income attributable to common shareholders for the period of $29 9 million as compared to a net income of $3 8 million and.
Speaker 2: The company reported a net income and a net income attributable to common shareholders for the period of $29.9 million as compared to a net income of $3.8 million and a net income attributable to common shareholders of $3.6 million for the first quarter of 2020.
Net income attributable to common shareholders of $3 6 million for the first quarter of 2021.
Interest and other financing costs for the first quarter of 2022 amounted to about 1 million compared to <unk> 7 million for the same period of last year.
Speaker 2: Interest and other financing costs for the first quarter of 2022 amounted to about $1 million compared to $0.7 million for the same period of last year.
Speaker 3: This increase is generally due to the increased amount of debt we carry and the increase in the weighted average LIBOR rate that we pay in the current period.
Have you seen Greece generally due to the increased amount of debt we carry.
And the increase in the weighted average LIBOR rate.
But we baked in the current period compared to last year.
Speaker 3: Adjusted EBITDA for the first quarter of 2022 was $31.1 million compared to $5.6 million for the same period in 2021, representing a 455% increase.
Adjusted EBITDA for the first quarter of 2022.
$31 1 million compared to $5 6 million for the same period in 2021.
<unk>, 455% increase.
Speaker 3: Please see the press release we issued yesterday for the adjusted TPI reconciliation to our net income.
Please see the press release, we issued yesterday for yes, sorry to keep it a conciliation to our net income.
Basic and diluted earnings per share for the first quarter of 2022.
Speaker 3: Basic and diluted earnings per share for the first quarter of 2022 were $4.15 and $4.13 respectively, calculated on 7.2 million basic and 7.3 million diluted weighted average number of shares outstanding.
$4 15, and $4.13, respectively calculated on seven 2 million basic and seven 3 million diluted weighted average number of shares outstanding.
Speaker 3: compared to basic diluted earnings per share of $0.53 per share for the first quarter of 2021, calculated on about 6.7 million basic diluted weighted average number of shares outstanding.
Basic and diluted earnings per share.
Zero point of $53.
Sure.
For the first quarter of 2021 calculated on about $6 7 million basic and diluted weighted average number of shares outstanding.
Excluding the effect on the income statement.
Speaker 3: excluding the effect on the income attributable to common shareholders for the quarter, of the unrealized gain on derivatives, the amortization of below-market time charters acquired, and the depreciation charts
Common shareholders for the quarter.
Oh, yeah like gain on derivatives.
Station of below market time charter shock right.
Appreciations charge due to the Canadian bond.
Speaker 3: due to the increased value of the vessel acquired with the low market time charter.
Acquired with below market time charter.
Speaker 3: The result for the quarter would have been $3.71 basic and $3.70 diluted, compared to adjusted earnings of $3.71.
Very solid for the quarter.
What did you mean.
And Sandy do you want a sense basic and $3, 7% diluted.
Our adjusted Darren.
Speaker 3: $0.45 per share, basic and diluted, for the first quarter of last year, a period during which we excluded unrealized gain and derivatives and the loss on the sale of a vessel.
Zero point $45 per share basic and diluted for the first quarter of last year.
Thank you.
We exclude the unrealized gain on derivatives and the loss on the sale of a vessel.
Speaker 3: Usually security analysts do not include the above items in the published estimates of earnings per share. That's why we present our earnings in that fashion. Let's now move to slide 18.
Alicia generally do not include the above items and the publishers conventional furniture pressure. That's why we present all really understand the question.
Let's now move to slide 18.
To review our fleet performance.
Speaker 3: Again, as usual, we will start our review by looking first at our utilization rates for the first quarter of 2022 and compare them to the first quarter of last year.
Again as usual, we will start our review by looking first at our utilization rates for the first quarter of 2022 and <unk>.
To the first quarter of last year.
Speaker 3: Our fleet utilization rates are broken down into commercial and operational.
Our fleet.
Utilization rates are broken down into commercial and operational.
During the first quarter 2022.
Speaker 3: During the first quarter of 2022, our commercial utilization rate was 99.6% while our operational utilization rate was 99.5% compared to 100% commercial and 96.7% operational for the first quarter of last year.
Sure the utilization rate was 99, 6%, while our bearish guys at utilization rate was 99, 5% compared with 100% commercial and 96, 7% operational for the first quarter of last year.
Speaker 3: On average, 16 vessels were owned and operated during the first quarter of 2022, earning an average time charter equivalent rate of $33,986 per day, compared to 14 vessels in the same period of last year, earning on average $12,134 per day.
Well Norwich 16 vessels were owned and operated during the first quarter of 2022.
And now group's time charter equivalent rate.
Fair to say.
From my understanding of $96 per day compared to 14, you guys sitting in the same period of last year.
<unk> $1034 per day.
Our total operating expenses.
Speaker 3: Our total operating expenses, including management fees, general and administrative expenses, but excluding direct working costs, averaged $7,329 per vessel per day during the first quarter.
Management fees.
General and administrative expenses.
<unk>.
<unk> 7000.
In $2009 per vessel per day during the first quarter of this year compared to 6009 found in our form $10 per vessel per day for the first quarter of 2021.
Speaker 3: this year compared to $6,914 per vessel per day for the first quarter of 2021.
Speaker 3: If we move further down in this table, we can see the cash flow break-even rate for the first quarter of 2022, which also takes into account, in addition to the above, interest expenses, dry-token expenses, and loan repayments, but excludes...
If we move further down in this table, we can see the cash flow breakeven rate for the first quarter of 2022, which also takes into account. In addition to the above interest expense <unk> expenses alone.
Payments.
<unk> bye.
I just wanted to payments and for the first quarter of 2021 won't shrink launched preferred dividend payments.
Speaker 3: and for the first quarter of 2021 also includes preferred dividend payments.
Speaker 3: Thus, during the first quarter of 2022, our daily cash flow breakeven rate was $14,057 per vessel per day, compared to $9,338 per vessel per day for the same period of last year, with a difference primarily due to increased loan repayments and dry docking expenses.
Thus during the first quarter of 2020 to our daily cash flow breakeven rate was 14000.
$7 per vessel per day compared to $9632 per vessel per day for the same period of last year with the difference primarily due to loan.
We increased loan repayments.
Benches.
Let's now move to slide 19.
You should be familiar with this slide by now as you use it changed at the same time this time last year.
Speaker 3: You should be familiar with this light by now, as we've used it since this time of last year.
Speaker 3: This slide provides our shareholders and investors with a tool to assess the earnings potential of our fleet in the coming periods.
Right.
So shareholders and investors.
Turning to assess the earnings potential of our fleet in the coming periods.
Speaker 3: The table shown in this slide has two parts. The first part refers to our already in-place contracts. The table shows the available days for hire of our fleet in each period, and after making assumptions for the dry docking days expected.
The table shown in the slide has two parts. The first part of your first two are already in place contracts.
The table shows yes.
Cold days from high of our faith in each period.
After after making assumptions for the dry docking days expected and.
Speaker 3: and also shows the number of contracted days as well as the difference of the two what we call the remaining open days of our flight.
And also shows the number of contracted days.
The difference of the two what we call the remaining open days for our fleet.
Speaker 3: The table also shows the percentage coverage and the average contracted rate in each period.
The table also shows the person does Vanessa.
The average contracted.
In each period.
Speaker 3: By making an assumption for the operating and G&A expenses and the dry docking costs, we can estimate, first, the EBITDA contribution of the contracted portion of our fleet.
Are you, making an assumption for the operating and G&A expenses and.
Of course, we cannot estimate first.
EBITDA contribution.
<unk> portion of our fleet.
To complete our EBITDA calculation for the entire fleet, we need to make an assumption about the algorithm to be earned by our open days.
Speaker 3: To complete our EBITDA calculation for the entire fleet, we need to make an assumption about the average rate to be earned by our open day.
Speaker 3: Here, one could make his or her own assumptions. Indicatively, if we assume that open days in 2022, 2023, and 2024 would earn another trade equal to that of the contracted dates in each period, we would have the EBITDA estimates shown at the bottom of the table.
One could make hinged on standalone assumptions.
When you think of <unk>, if we assume that the open days in 'twenty 'twenty to 'twenty two 'twenty three 'twenty four would earn rate.
Great equal to that of the contracted days in each period, we would have the EBITDA is pretty much shown at the bottom of the table.
Furthermore, by knowing our open days in each period, we can easily calculate the sensitivity of our EBITDA to charter rate changes.
Speaker 3: Furthermore, by knowing our open days in each period, we can easily calculate the sensitivity of our EBITDA to chart the rate changes.
Speaker 3: Of course, as our contract coverage is very high, especially for 2022, which is essentially 100% and 2023, our EBITDA dependence to market rates is minimal.
Of course, yeah sure contract.
Our confidence is very high.
And for 2022, which is essentially 100% and 2023.
It does depend on the market trades is meaningless.
Speaker 3: Taken to the extreme, it is worth noting that even if all our open days earn nothing, then our EBITDA for the next two years will still be over $125 million per year, and even for 2024 it will be over $105 million. Let's now move to...
Taken to the <unk>, Inc.
And if all our open days and enough ink then.
EBITDA for the next few years will still be over 125 million per year and even for 2024, it would be over it sounds and in five meeting.
Let's now move to slide 20.
To review our debt profile.
On the top part of this slide we can see our current debt repayments over the next several years.
Speaker 3: On the top part of this slide, we can see our scheduled current debt repayments over the next several years.
Speaker 3: Our loan repayment schedule, without balloons for this year, stands at about $27.4 million.
Our loan repayments Kennedy.
Without launch for this year stands at about $27 4 million.
Speaker 3: with our debt repayments of the current debt, as I mentioned, going down over the next three years.
Our debt repayments of current data as I mentioned going down over the next three years.
Speaker 3: We have various balloon payments due in 2023, which we expect to routinely be able to refinance if chosen so.
We should revise balloon payments due in 2023.
Should we expect toric.
Well to refinance if chosen so.
Speaker 3: Please note that the shown debt profile does not include new debt that we expect to assume to finance our new building project.
Please note that this has shown that profile does not include any debt when do we expect to assume to finance, our new building program.
Okay.
Speaker 3: A quick note on this slide on the cost of our debt, as this is related to the loans outstanding at the end of the last quarter.
A quick note on this slide on the cost of our debt yes.
Is it related to the loans outstanding at the end of the last quarter.
The average margin of our debt is about 3% and assuming a LIBOR rate of one.
Speaker 3: The average margin of our debt is about 3%, and assuming a LIBOR rate of 1.25%, our cost of our senior debt would be on average about 4.25%.
One 125% our cost of funds senior debt would be on average about 425%.
Speaker 3: If one includes the cost of our interest rate swaps, which are on average at about 1%, the overall cost is coming down a bit to about 4.17% for our existing debt.
If one includes the cost of our interest rate swaps, which are novel answered about 1%. The overall of course is coming down a bit to about four points of 19% for our existing debt.
Looking at the bottom of this table.
Speaker 3: We can see our cash flow breakeven level expectation for the next 12 months in dollars per vessel per day.
We can see our cash flow breakeven level of expectation for the next 12 months in dollars per vessel per day.
Speaker 3: You can see that our loan repayments that we just reviewed over the next 12 months are to make a $4,094 per investor per day contribution to our cash flow break-even level.
You can see that our loan repayments that we just reviewed over the next 12 months are to make a $4094 per vessel per day contribution to our.
Cash flow breakeven level.
Speaker 3: If we make similar assumptions for the remaining components of our cash flow break-even level, that is our operating expenses, G&A expenses, interest payments, and die docking costs, we can come up with a cash flow break-even level for the next 12 months of just around $13,061 per vessel per day.
People will make similar assumptions for the remaining components of our cash flow breakeven level.
These are operating expenses G&A expenses interest payments and <unk> and of course, we can come up with a cash flow breakeven level for the next 12 months well just around four hours on a $61 per vessel per day.
Let's now move to slide 21.
Speaker 3: This slide provides some highlights from our balance sheet, adjusted to reflect the market value of our fund.
These slides provide some highlights from our balance sheet.
Adjusted to reflect the market value for our fleet.
Speaker 3: As of March 31, 2022, on a book value basis first, our assets include cash and other assets of about 68.6 million, and the book value of our vessels, including advances for the new buildings and the acquisitions of the second-hand acquisition.
As of March 31st 2022 on a book value basis first.
Outfits include cash and other assets of about $68 6 million and the book value of our vessels, including advances for the new buildings in the acquisitions from the sequential acquisition.
Speaker 3: giving us a total book asset value of about 241.8.
Giving us a total book variety book asset value of about 241 point Nathan.
Speaker 3: On the liability side, we had an outstanding bank debt of $112.1 million and other liabilities of about $22.6 million, resulting in a net book value of our shareholder's equity of about $107 million. However, the market value for our fleet is much higher than its book value.
On the liability side, we had an outstanding bank debt of.
$12 1 million and other liabilities of about $22 6 million, resulting.
And the net book value of our shareholders' equity of about the content is driving me. However.
Market value for our fleet is much higher than its book value.
Speaker 3: We estimate that our vessels are worth more than 520 million, inclusive for the appreciation of the value of the new building contracts, and adjusted for the negative value of certain of our charges.
We estimate that our vessels are worth more than <unk> 20 million.
<unk> for the appreciation over their value when you're building contracts and adjusted for the negative value of certain of our charters.
Speaker 3: Thus, on a market value basis, we can calculate the net asset value of our fleet to be around $470 million, or around $64 per share.
Thus on a market value basis, we can calculate the net asset value of our fleet to be our own forefront in uncertain comedian.
$64 per share.
Speaker 3: Recently, our shares have been trading in the range between $24 and $29 per share, thus representing a significant discount to our net asset value per share and offering good appreciation potential for our shareholders and good investment opportunities for our investors.
King.
<unk> been taking the range between 24 and $29 per share faster presenting.
So can you just kind of discount to our net asset value per share and offering what appreciation potential potential for our shareholders and good investment opportunities for our investors.
Speaker 3: And with that, I would like to close my presentation and pass the floor back to Aristidis to continue the discussion.
And with that I would like to close my presentation and pass the floor back to our activities to continue the discussion.
Thank you Tassos, let me now open the floor for any questions.
Speaker 2: Thank you, Tasos. Let me now open the floor for any questions.
Thank you Sir.
Speaker 4: Thank you, sir. Before we open the line for questions, this conference is for you to cease first quarter.
Open the line for questions. This conference.
First quarter 'twenty results and if you wish to ask question. Please press star one on the telephone keypad and wait for it.
Speaker 4: results. If you wish to ask a question, please press the star 1 or telephone keypad and wait for the automated message advising your line.
Your line is open.
Speaker 4: Please state your first and last name before you ask your question. And if you want to cancel your request,
Your first and last name before you ask your question and if you want to cancel your request.
Please.
Sure.
Speaker 4: And we take our first question, please go ahead, your line is open.
We'll take our first question. Please go ahead your line is open.
Hi, Thank you good day Tate Sullivan from Maxim Group can we start just can you provide more details on your Newbuild chartering strategy. After you book the Arena and then Greg on Sweat well ahead of delivery SKU do you hope to replicate those types of contracts those levels with the next two.
Speaker 5: All right. Thank you. Good day. Kate Sullivan from Maxim Group. Can you provide more detail on your new build chartering strategy after you book the RENA and the Gregos well ahead of delivery? Do you hope to replicate those types of contracts, those levels with the next two 2800 deliveries? And is setting the contract 10 months to 13 months well ahead of delivery a much longer timeline than historically?
<unk> 2800 deliveries.
Setting the contract 10 months to 13 months well ahead of delivery.
About much longer timeline than historically.
Speaker 2: Sure. It depends on the market. If we are able to do it at similar levels, we think these are great levels. But the next couple of ships comes up a little bit later than the first two, so we'll have to wait for a few months before we are able to move on the other ships.
Sure.
The.
It depends on the market.
Able to do it at similar levels. We think these are great levers, but.
Then the next couple of ships comes up.
A little bit later than the first two so we'll have to wait for a few months before we are able to move all the other ships. These were the two ships that we fixed it.
Speaker 2: These were the two prompter ships that we fixed. What will happen will really depend on the market if we're able to do these things going on for later.
Yeah.
What will happen will really depend on the market. If we're able to do these things are going in order for later.
Speaker 5: Thank you. You mentioned preparing for an eventual correction. I think before you talked about maintaining a lower capital ratio than historical, maybe about 30% based on NAB. Is that still what you may be looking at or what other balance sheet approaches are you taking through this?
Thank you and you mentioned preparing for a potential for an eventual correction, rather and I think before you've talked about maintaining a lower capital ratio at an historical maybe about 30% based on Nab is that still what you may be looking at or what other balance sheet.
Appropriately taking through the cycle.
Speaker 2: Sure, we are repaying debt continuously, we will keep leverage contained.
So we are repaying debt continuously.
We will keep our leverage goals.
<unk>.
Speaker 2: We do currently have the visibility on our earnings, on our constructed earnings, which gives us a great assurance that, you know, we are very well covered for the following three years, so we don't have any fears for the next three years, and we want to take advantage of the opportunities that might appear.
We do currently have the <unk>.
Visibility on our earnings are now constructed earnings which gives us a great food items that are you know we are very well covered for the following three years. So we don't have any any fears for the next three years and we want to take advantage of the opportunities that the mice.
Speaker 2: to continue growing the company and rewarding the shareholders.
To continue growing the company and rewarding the shareholders.
And just back on the new building strategy, if I might you take a staggered approach similar to what you have with your whole fleet before in terms of adding a mix of shorter term and longer term contracts.
Speaker 5: Just back on the new building strategy, might you take a staggered approach similar to what you have with your whole fleet before in terms of having a mix of shorter-term and longer-term contracts?
Speaker 2: the three-year contracts you recently announced? It's possible, it's possible. We always try to take care not to have all the ships opening up at the same time. It might be a poor time in the future if everything opens up at the same time. So we like the staggered, more conservative approach.
The three year contracts you recently, it's possible it's possible, we always try to take care of them not to have all the ships opening up at the same time it might be a blue diamond the future of their favorite thing opens up at the same time so.
We like the staggered at the more conservative approach.
Okay. Thank you have a great rest of your day.
Yes.
Speaker 4: Thank you. We will take our next question. Please go ahead, your line is open.
Thank you we will take our next question. Please go ahead your line is open.
Speaker 5: Good morning, Aristides. Good morning, Tassos. It's Poe Fratch from Alliance Global Partners.
Good morning, Eric Good morning, Todd.
<unk> from Alliance Global partners.
Okay.
Speaker 5: Good morning. I had a couple follow-up questions on just the new builds. Can you highlight how much you spent in the first quarter on the new build program and how much you're going to spend for the rest of the year? And then if you have numbers available for 2023 and 2024, that would be helpful.
Good morning.
Had a couple follow up questions on just.
New builds can you highlight how much you spent in the first quarter on the Newbuild program and how much youre going to spend for the rest of the year and then if you have numbers available for 2023 and 2024.
That would be helpful.
I think in the first quarter of the year.
Speaker 3: I think in the first quarter of the year we made the 10% payments for the first two vessels we ordered.
The <unk> payments for the first two vessels we ordered.
Speaker 3: And I think we're still in the process of making these initial payments. I don't, none of our vessels have started being billed yet, so the second payment will be made when the vessels start being billed.
And I think we are still in the process of making this initial payments.
Don.
None of our vessels just started being built yet so the second payment will be.
Made when the vessels start being built.
I think Paul what what are we can send you afterwards, the full schedule of the pay of payments. So that you have a clear picture.
Speaker 2: I think, Paul, we can send you afterwards the full schedule of payments so that you have a clear picture.
Speaker 5: That would be really helpful. And then, Aristides, on the dividend, you reinstated the dividend at 50 cents a quarter. Is that something that we should expect as far as a level over the next several quarters? Or how will you look at setting the dividend? Is it a set formula or a set amount?
That would be really helpful and then.
Everything is on the dividend you reinstated the dividend at 50 cents a quarter is that something that we should expect as far as.
Level over the next several quarters or how.
How will you how would you look at the setting the dividend is set up that formula or a set.
Set amount.
Speaker 2: No, we don't have anything set other than that we will be consistent and we will be paying dividends going forward.
No. We don't have anything said I live in.
And then that will be consistent and we will be paying our dividends going forward.
Speaker 2: We were perhaps not one of the first companies to reinstate a dividend because we wanted to pay a dividend when we know that we can comfortably continue the whole process for the years to come. And we feel comfortable that with the next three years where we have visibility, we will be able to be paying a dividend.
We will perhaps.
Not one of the first companies to instill to reinstate the dividend because we wanted to pay to pay a dividend when we know that we can comfortably.
You know continue the whole analysis for the years to come and we feel comfortable that you know.
With the next three years, where we have visibility, we will be able to be paying a dividend.
Speaker 2: If that stays the same or increases, it's something that remains to be seen and decided on a case-by-case basis on the next board meetings that we're going to have.
Well if that stays the same old increases is something that remains to be seen and decided on a case by case basis on the next bull.
Meetings that were going to have.
Okay and then when you look at the buyback program you sort of address the price sensitivity you know it's very discretionary.
Speaker 5: Okay. And then when you look at the buyback program, you sort of address the price sensitivity. You know, it's very discretionary. Would you, could you highlight, one, how quickly the stock buyback program could become active? And then secondly, could you highlight whether there'll be any quarterly blackout periods on the buyback?
Well you can.
Could you highlight one how.
How quickly the stock buyback program.
Could become active and then secondly.
Could you highlight whether there'll be any quarterly blackout periods on the on the buyback.
Speaker 2: I don't think there will be any blackout periods on the buyback, and I think the program will be ready to run extremely soon. Now, if we are going to implement and be buying stock and how much we will do will really depend on the market circumstances.
I don't think there will be any any blackout periods or on the buy back and I think the.
I'll get them will be ready to run an extremely soon now if we are going to implement a and b buying stock and how much we will do.
It will really depend on the market circumstances.
Speaker 5: Yeah, understood. And then, Tasos, you talked about financing the new builds. Is there a target level, like 40%, 50%, that you'd be looking at financing the new builds as they, you know, to, to, you know, finance the delivery payment?
Understood and then toss us you've talked about financing the new builds is there a target level like 40% 50%.
That you'd be looking at financing the newbuild as they you know to.
Finance the delivery payment.
Speaker 3: I think our main assumption and target is to finance about 60% of the contract price.
I think our main assumption is that the target there to finance about 60% of the contract price.
Speaker 3: So it might vary depending on the circumstance. For example, the first two vessels that we have already booked, long-term contracts, we might be able to increase that leverage. We haven't decided that yet, but we might be able to. And depending on the situation when the time comes to finance each vessel, it might vary. But assuming a 60 percent average, it's a safe assumption.
He might vary depending on the circumstance for example, the first two vessels that we have already booked.
Long term contracts.
We might be able to increase that leverage so we haven't decided that yet, but we might be able to and depending on the situation at the when the time comes to finance each vessel at my value but.
Assuming a 60% average Easter a safe assumption.
Speaker 5: Okay, that's helpful. And then, you know, if we could talk about the, you know, you talk about planning for a potential downturn, you know, because of maybe uncertainty on the demand side, but more importantly, you know, the expansion on the supply side. Your forward cover book is...
Okay. That's helpful and then if.
If we could talk about the you talked about planning for a potential downturn.
Because of.
Maybe uncertainty on the demand side, but more importantly, they.
On the supply side.
Ford Cupboard book, it's very high.
But you do have like the I cannot bridge coming up in 2022 and November that Geoana in January of 'twenty, three and then we had the ones in sort of the middle of 'twenty. Three can you talk about you.
Speaker 5: But you do have like the bridge coming up in 2022 in November , the Joanna in January of 23, and then three other ones in sort of the middle of 23. Can you talk about, you know, possibly rate expectations at this point in time, whether you're an active discussions on those renewals.
Possibly rate expectations at this point in time, whether you're in active discussions on those renewals just a flavor for whether youre seeing any of the potential.
Speaker 5: Just a flavor for whether you're seeing any of the potential weakness impacting discussions at this point in time.
Weakness impacting discussions at this point in time.
Speaker 2: We aren't really having any discussions currently, Paul. I think both owners like us and charters are having a little bit of a wait and see, you know, thinking at this point. And we are happy to wait a little bit more to see how things develop before.
We aren't really having any discussions Scott evidently Bo I think are both the owners like us than south of us.
Having a little bit of a wait and see.
You know thinking at this point.
And <unk>.
We are happy to wait a little bit more to see how things develop before.
Doing some.
Okay and you know it's interesting that you you know you added on the dual fuel capability or the LNG fuel capability to your Newbuild program.
Speaker 5: Okay, and you know, if you're interested that you, you know, you added on the dual fuel capability or the LNG fuel capability to your new build program, you know, the cost went up a little bit, but.
The cost went up a little bit but.
Speaker 5: What drove that decision? Was it a customer-driven decision or was it a corporate decision based on what you see the emissions standards you know, of all the.
What drove that decision was it a customer driven decision or was it.
Corporate decision based on what you've seen the emission standards.
Bobby.
Speaker 2: It was mostly a defensive move, I would say, in case LNG does prove that it becomes the fuel of the short-term future, short-term meaning about the next 20-30 years.
It was mostly mostly.
A defensive move I would say.
In case, our LNG does prove that it becomes the future the fewer love you know the sort of the future so that doesn't meaning about the next 2030 years.
Speaker 2: So we want to be able to transform the ships into real LNG vessels if needed. So it's more of a defensive move at this point.
So we want to be able to kind of full.
Four of them to seats into real LNG vessels, if needed. So it's more of a defensive.
Mood, but at this point, it's not that we are aggressively thinking that LNG will be the fuel of the future, but it might be.
Speaker 2: that we are aggressively thinking that LNG will be the fuel of the future, but it might be.
Speaker 3: At the same time, the upgrade of the engines to Tier 3 is also part of our commitment to our environmental and ESG strategy.
Yes, the upgrade of the engines to tier threes onshore part of our commitment to them to our own governmental entities strategy.
Okay, and then well you already is this you know we will always adhere to buy by the laws and.
Speaker 2: Okay, and then, would you? You know, we will always adhere by the laws and the environmental demands that are made on us. We believe in that, and we want to help in that way as much as we can.
The EV.
The environment.
The demos.
Demands that I made on us we believe in that and we want to help in that.
In that way as much as we've done.
Speaker 5: And looking at other potential fuels, there's like green ammonia and other things, would you need to make additional modifications to the engines to run on those type of fuels, or is that something you're in the position to be able to assess at this point in time?
And looking at other potential appeal, there you know like Green ammonia and other things would you.
I need to make additional modifications to the Amgen to run on those type of deals or is that something you are in the position to be able to assess at this point in time.
Speaker 2: Yes, it would be very difficult to make changes to burn another fuel, but I can tell you that it will be one of these new fuels, ammonia, hydrogen, etc.
Yes, it would be very difficult to make a.
Changes to burn another fuel, but I can tell you that it will be.
One of these new fuels ammonia high dividends et cetera, but.
Speaker 2: But it is still many years away before it becomes commercially viable.
<unk> still.
Many years away.
Before it becomes commercially viable LNG is commercially viable today.
Speaker 5: LNG is commercially viable today. The other fuels are not. Great. Thank you very much for your time.
The out of the fuels or not.
Great. Thank you very much for your time.
Thanks, Rob Thanks, a lot.
Thank you.
Yes.
Yeah.
Is there a next question.
Hi, guys. This is Jason.
Hi, how are you.
Speaker 6: Hi, how are you? All right, good. Hey, how's it going? All right, so just a couple of quick ones from me. One is on the dividend policy. What made you decide on $2?
Alright good.
So just a couple of quick ones from me one is on the dividend policy.
What made you decide on a $2.
Right.
Yeah.
So avi.
Speaker 6: What what what was the calculation to get to the $2 annual?
Well, what what what was the calculations.
$2.
Speaker 2: We thought, I mean, a $2.00 dividend is a yield which is currently higher than most of the competition of more than 7% of where we were. We feel it's a decent level of dividend to give, and now a nice round figure too.
We saw.
At $2 that a dividend is a yield which is currently.
Higher than most of the competition.
Of our more than 7% of where we were.
We feel it's a decent level of dividend to give the announcer nice round figures through.
Okay.
And so.
Speaker 6: If I'm following this right, this is a fixed dividend, this is not a variable dividend.
Hello, Paul.
This is a little bit on.
This is not available.
Correct.
Speaker 7: The dividend will be discussed on the board level at each quarter.
It's.
The dividend will be discussed.
Board level I'd see a bead score.
Uh huh.
Yes.
It's going to be.
Okay understood alright, because if I look at I know when you announced the dividend policy was close to 7% I mean, if I look at the comps globally.
Speaker 6: Okay, understood. All right, because if I look at, I know when you announced the dividend policy, it was close to seven percent. I mean, if I looked at the comps, right, globally, not just in the U.S.,
It was.
<unk>.
You guys are you guys are right about the middle and if I looked at your contract the earnings based on our projections.
Speaker 6: You guys are right about the middle. And if I look at your contracted earnings and based on our projections, it looks like there is capacity for the dividend to go up on, you know, based off of free cash flow or just off of operating cash flow. So when the board, you know, meets to discuss a dividend, you know, in the future, what are some things that, what are some factors that could help the dividend increase for the coming quarter?
It looks like there is capacity for the dividend to go up on based off our free cash flow. We're just off of operating cash flow. So.
When the board meets to discuss the dividend.
What are some things that what are some factors that can help the dividend increase for the coming quarter.
Speaker 2: Look, the current dividend is less than 15% of earnings, so you're right to say that it's not a big percentage. The company is mainly a growth company. So the bigger part of its earnings is being used to fund the growth.
Look the current dividend is less than 15% of earnings. So you are right to say that it's not.
A big percentage of the company is mainly a growth company.
So the bigger part of it <unk> is it.
Being used.
Two to fund the growth.
Speaker 2: But we want to reward shareholders with a decent dividend as well, and we will be doing that.
But.
We want to reward shareholders with a decent dividend as well and we.
We will be doing that.
Right understood.
Speaker 6: Great, understood. And in terms of going back, I know we discussed this, but in terms of the new builds on order, I know the 24 ones are a little far out, but
And in terms of going back I know, we discussed this but in terms of the new builds on order.
I know that 24, one, though a little far out but can.
Speaker 6: Can you kind of let us know your thinking or the charter's thinking of when you would look to charter some of these vessels? Would it be, you know, like if you look at the two that are being delivered in the first quarter of 24, do those discussions start in the third quarter, fourth quarter, or, you know, even sooner?
Can you kind of let us know you're thinking or talk to us when you would look to target. Some of these vessels would it be.
If you look at the two that have been delivered in the first quarter of 'twenty four.
Question, just on the third quarter fourth quarter or even sooner.
Speaker 2: No, I think that you probably will not hear any news until towards the end of this year for the remaining new builds.
No I think that you probably will not.
Do you have any news.
Towards the end of this year for the remaining a.
New builds.
Gotcha.
Early.
And with with your comments that the company some weakness further out beyond 'twenty three.
Speaker 6: And with, you know, with your comments that there could be some weakness further out beyond 23, would it be fair to say that you would look for more multi-year charters for the vessels coming off charters in 23?
What are we starting to say that you will look for more multi year charters for the vessels coming off charter in 'twenty three.
Speaker 2: Yeah, probably. Probably. If they are around, probably yes.
Yes, that's probably right.
But if they are around probably yes.
Speaker 2: But this business is so fluid, you always have to be on your toes to take decisions and change strategy if you want to optimize the return to your shareholders.
But.
This business is so fluid.
You always have to be on your toes to take a decision.
<unk> and change strategy, if you want to optimize the return to yourself holders.
Gotcha.
Speaker 6: Okay, and one last question. So the order book overall looks manageable, but in the intermediate and the feeder, it's fairly high. How worried are you about the new ships that are going to be delivered? And do you feel that those will be more replacement vessels with older companies being scrapped? Or do you really feel like this could be a net add to the fleet and that could push down rates as we move beyond 24?
Okay and one last question.
So the order book, you know overall, it looks manageable but.
Is it intermediate in the theater at fairly high.
Does that well how worried are you about the new ships.
We deliver and do you feel about those will be more.
Placement vessels with older be cognizant scrap or do you really feel like this could be a net add to the fleet and that's a push down rates as we move beyond 'twenty four.
Speaker 2: uh... actually actually uh... on the side of the vessels that we have the order book uh... is uh... is uh... rather small the order book is high on the bigger vessels so on our side we have a relatively low order book and actually a quite old fleet uh... so a significant number of the elder vessels are small vessels
Actually actually on the sizes of vessels that we have.
The book is positive.
There are small.
The order book is high on the bigger vessels. So on now size, we have a relatively low order book and actually are quite older fleet.
So a significant number of over the elder vessels are small vessels. So that I think the growth in the fleet is going to be minimal.
Speaker 8: So there, I think the growth in the fleet is going to be minimal, which makes us quite optimistic that rates will hold. But there are so many unknown factors that are playing around, so it's very difficult to predict the future. Gotcha, okay. All right, that's all I have, thank you.
Makes us quite optimistic that the rates will hold but it.
So many unknown factors that are in play.
Playing playing.
Playing around so it is very difficult to predict the future.
Gotcha Okay.
That's all I had thank you.
Thank you. Thank you James.
Sure.
Speaker 4: Sir, I pass the floor back to the RCEO, Arisa Despitazza for
<unk>.
Oh.
So for any closing remarks.
Speaker 2: thank you everybody for listening in into our results of this quarter and we'll be with you next quarter hopefully with equally good results
Thank you everybody for listening in into our results of this quarter and will be with you next quarter hopefully with equally good.
Yes.
Yeah.
Thanks, everybody.
Speaker 4: This concludes our conference for today. Thank you for participating. You may now all disconnect.
This concludes our conference for today. Thank you for participating you may now all disconnect.
Yeah.
Yeah.
Thanks.
Yeah.