Q1 2022 Tsakos Energy Navigation Ltd Earnings Call
Speaker 11: The eight three.
Speaker 11: That part F that.
Speaker 11: I.
Speaker 11: Thank you for standing by.
Speaker 13: Ladies and gentlemen, welcome to the taco' energy Navigation conference call on the first quarter 2022 financial results. We have with us MR TA AR U, Chairman of the Board, and MR Nicholas Sao's, President and CEO , MR Paul dorham, Chief Financial Officer, and MR George saralu, Chief operating officsir. At this time, all participants are listeni modethere will be a presentations followed by a question and anscial session, at which time, if you wish to ask a question, Please for H star one on your telephone key pad and wait for your name to be announced. I'm, as advisor you to this call. ference call is being recorded today and now I will pass the flo over to nicholasfor on this. President of capital link. Investor Relations. Advisers of saaco' energy navigation. Please go ahead, sir.
Speaker 11: I am Nicholas, born of this. President of capital. L Investor relance advised or to tracers, and its mitigation it can limited.
Speaker 14: This morning, the company publicly released its financial results for the first quarter of 2020 -two.
Speaker 14: In case we do not have a couplulus of today earnings release, please call us at two one two six six one seven five 6, six or email us at TEN.
Speaker 14: Tm at capital in dot and we will have a copy for you right away. We will send you a copy by email.
Speaker 14: Please note that parallel to pre confference or there is also a live audio and Slide webcast which can be accessed on the company's website, on an front page at wtengr.
Speaker 14: The conference call will follow the presentation slides, So please, we urgely, to access the presentation slides on the company's website.
Speaker 14: Please note that the slides of the worker presentation will be available in our cardt on the company, the webside, after the conference call. Also, Please note that the slides of the worker presentation are user control and where means that my clicking on the proper botontom you can go to the next or to the previous slide on your own. At this time I would like to read the safe caron statement.
Speaker 14: This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities itification Reform Act of one thousand nine hundred and ninety-five.
Speaker 14: Investors are conutionmed that such forward-looking statements involve risks and uncertainties which may affect tense business prospects and results of operations.
Speaker 14: And this moment I would like to pass the floor on to make a practiceer appolo, the clminal of the Board of traco's energy navigate.
Speaker 14: Please go back orirable.
Speaker 15: Thank you, nicollas. Hello, good morning and good afternoon to everyone.
Speaker 16: Thank you for joining our Q1 results call today.
Speaker 17: The world is going through a very complex and unprecedented period of contradictions and severe challenges.
Speaker 18: It's an event driven a runaway inflation.
Speaker 18: Generated by the regretful War in the Ukraine and supply chain challenges.
Speaker 16: Although we have full employment, yet we have declining a number of workers willing to work, declining household income.
Speaker 18: And less' willingness of people to spend.
Speaker 15: The's steep related uctions by central banks.
Speaker 16: To quickly reverse loan and accommodating policies.
Speaker 16: Originally put in place to stem growth after the economic crash and COVID-19.
Speaker 18: And the resulting rate hikes will put pressure on public and private sector debt servicing.
Speaker 18: That servicing worldwide.
Speaker 16: In an overindacted world, especially in the mulgary market. And all this.
Speaker 16: With a hyperproofbability of failing to avoid the reation in the project.
Speaker 16: All this results in serious unrest, public unrest.
Speaker 19: With extreme social le productions.
Speaker 18: amplifying in the posity and eucion social stability yet.
Speaker 16: This environment also, also opportunities with stand.
Speaker 17: With its wide and stable footprint and its resazilian business model.
Speaker 15: poly captures.
Speaker 16: Allowing it to grow revenues.
Speaker 16: Show profits: reduced debt.
Speaker 16: And do all the right things.
Speaker 19: Renewing its fleet was state of the art restaurants.
Speaker 16: And doing all this in full contract with experience.
Speaker 16: Although the market, given this very complex environment with no visibility, may produce surprises on the way.
Speaker 18: Then is very confident that it will continue to improve further its operating performance.
Speaker 16: And let's not forget that we're currently in the marultiple event-driven, positive market.
Speaker 17: In waiting for the long-expected crude tanker market recovery.
Speaker 17: Which will be based on the existing grade encouraging fundamentals.
Speaker 16: So thank you all for your continued supports.
Speaker 18: And I would like to now pass the floor to niclsaus. Thank you.
Speaker 20: gerirman. Thank you and good morning to everybody.
Speaker 21: It it's a.
Speaker 22: Very good to be able to report net positive and net income once again.
Speaker 23: Although our company has never stopped to report positive operating income over a very difficult period. But we're very happy that right now we have also returned to positive net income and we're looking forward for a second quarter that will be even stronger than the one we announced today.
Speaker 24: As the Chairman said that it has been a roller poster period.
Speaker 22: We started the beginning of the year feeling that things were going back to normal with COVID-19 suportedly under control and parts of the world opening up to travel and business as usual and then we were hit by the invasion in ukrainia that has complicated issues a lot in operationalal matters for us which meant that the company like ourselves with 32 vessels with mixed Russian and Ukrainian and group had to spend a lot of time and effort through our minning. Department. Our human resources teams to make sure that everything goes smooth and we re very happy to.
Speaker 25: To announce and we're very happy and thankful to our seafares about their professionalism and we never had an incident between those two I would say sister or brother nations. It has been a worisome period.
Speaker 26: However we were able to maintain.
Speaker 22: A steady is stea.dy, faster on the whe.
Speaker 22: We took advantage of the better environment in the beginning of the year to renew 15 in new charters or extend charters on an another, as with 25% higher rates than the ones expired.
Speaker 22: In the meantime, our pool vessels in our pooled mainu of the clean side are enjoying a very, very strong market.
Speaker 22: And the timely. The timely chartering over two lcis has actually saved, as the tens of millions of dollars, not only in profit but actually from what we are facing today in a much harder economic environment. So, all in all, we are happy to announce that we have been able to maintain our problem on target to delivery over LNG and chartered it in the middle of January , followed by our shle tanker this month from Korea, also on a very long charter.
Speaker 26: Sold one of our older vessels and we're taking delivery of a new LC, with options for others going forward. So, all in all, we have been able to achieve this being profitable: P a dividend, increase our cash and reduce our bank debt.
Speaker 22: We are looking forward to a better second half of the year. The second quarter looks to be a strong quarter and we would be happy to maintain, of course, and increase our profitability. That will enhance further reducing debt and paying dividends to our shareholders. And with that I will ask por to George to come with the operating part of the first quarter and thereafterthank you.
Speaker 27: Thank you, nicoas. Good morning to all of you joining our earnings call today. Let's go to the slides and our presentation.
Speaker 28: Starting with Slide three you show it to the earar, but the first slide is a beautiful picture of the port to just delivered. It looks like. If it's, it looks like a drawing, but actually this is the actual of the actual ship, ther than the actual, and we're very proud of that state of the actaddressationthank you.
Speaker 29: Very good. Starting with Slide 3, we see that since inception in 1993 we have fachased five major crices.
Speaker 30: And it's time the company, thanks to its tested counter-cyclical oabperating model that targets growth at market loans, has come out stronger.
Speaker 30: This time is no exception. At the start of the year, it appeared that we were near the end of the COVID-19 pandemic, after almost two years.
Speaker 30: From the end of February we were thrown to another Cris award in Europe that created new challenges for the world in our industry.
Speaker 30: In this difficult environment, with sanctions and self-imposed sanctions on Russia.
Speaker 30: A major commodity expororted exporter.
Speaker 30: Changing trade routes for our commodities, including oil, oil products and gas. War ant distraction, tragic loss of human life. We continue to stay the course and prepare the company for its net growth phase.
Speaker 30: We reported earlier this year new building contracts for four year fuel LNG power dformx tankers against long-term employment to a major o concern.
Speaker 27: Last week we had the naming ceremony of our laterest st of the arts subtle tanker, delivered from a South Korean sere.
Speaker 27: That is portion employed against long time charter. And today we announced the sale of a 2006 bubuildilt LR to afrom x tanker and the acquisition of the two twentthousand and 20 bubuilds crubber feitt we csee.
Speaker 30: After ING these latest transactions, the company has currently a proforma fleet of 71 vessels, for another annual growth of 15% in terms of deadway on, spanning over four decades.
Speaker 11: In Slide four we see the fleet and its currentlyfet employment.
Speaker 27: Almost 60% of the flip is in the water- has market exposure: a combination of spot vieas and time charter with profit sharing.
Speaker 27: And 60% using a secured contracts, fixed time charters, time charter with profit sharing and COAs.
Speaker 27: This means that 10 is well positioned to capture the positive markets- tanker market fundamentals.
Speaker 30: With global oil demanded rebounding after two years and with shifting trade patterns as a result of the War in Ukraine and the sanctions and self-im imposed sanctions on Russian oil exports, we are already witnessing spot tankket fre rates reaching higher levels that led to profitable operating results.
Speaker 27: flli, modernity is a key element of our operating model. In January , we also took delivery of our latest lency carrier, named energy, and this vessel has immediately, under a five -year time charter, is expected to contribute to our bottom line. As that, the lngy sector continues to enjoy strong rates.
Speaker 30: If you look at this slides, we have remaining new buildings which we expect to take delivery from the fourth quarter of 23. this form part of our green ship initiative with dual fuel. Lng are from exaordence.
Speaker 30: All four vessels are coming with long term employment that.
Speaker 30: Inclusive inclusive of the above charters.
Speaker 27: A tenses minimum fixed revenue backlog exeds one billion.
Speaker 30: Slide five.
Speaker 30: The less side presents the oil-in breament cost for the very V type of your datable.
Speaker 27: We maintained a low cost base during the year. The revenue generated from the time surter contacts was again sufficient to cover the company's cost expenses. And we must also highlight here the purchasing power of pcm and the continued firstst control effort by management to maintain a low pexaverage for the flep while keeping a high lead utilization rate year after year and quarter after workth.
Speaker 30: Despite six special surveys. During the first quarter of this year we achieved an overall 93% utilization from the fleet.
Speaker 30: And thanks to the profit sharing element, which is a cornerstone of our strategy, our charter in strategy, for every $1 thousand per day increases spot rates, we have aoppositive 39 cents impact in annual earing pressures, based on the number of our vessels that are currently have exposure to spot rates.
Speaker 30: That reduction in slides six has also been an integral part of the company's capital allocation strategy.
Speaker 17: The company's debt picked in December of 2016. since then, we have we prepaid 424 million of debt and repurches one million in two series of step-up preferred shares that we had outstanding.
Speaker 31: In addition to paying down debt, dividend continuity is important for common shareholders and management. 10 has always paid the dividend. perspepective of the market cyclicality.
Speaker 30: About half a billion dividend paayments have been distributed since the new resstruct exchangeales listening in two thousand and two.
Speaker 32: The next dividend is going to be paid.
Speaker 30: In July , on July twentieth.
Speaker 33: Global oil demand continues to recover despite current headwinds. Oil demand is expected to rise by one point eight million barrels per day this year and another two point two million barrels per day in 2020. Three.
Speaker 30: The forecast is to surpass the prepandemic demand levels of about 100 millions, starting from the second half of this year.
Speaker 30: Developed autonomyly the oldil demand expansion in 2022. however, 80% of the expected 2023 demand growth is forecasted to come from nonoed countries.
Speaker 27: On the global oil supply front of pe-class produccer continue to manage supply, which marginly increases.
Speaker 27: However countries outside the Middle East producers have struggled to meet their quarters.
Speaker 29: globaloid stocks continue to fall and are now almost eight million barrels below the 2017- 2021 avers.
Speaker 30: nonopex production is set to rise in 2020 -two.
Speaker 27: And as a result of the War in Ukraine, higher oil prices. We had another coordinated effort to release in total of another 200 and fourty million balance from the strategic petroleum reserves of the United States of America and major oed member countries for the next six months, in an effort to lower energy prices and counterbalance the effect of the War.
Speaker 29: Global oil demand.
Speaker 30: Continues to rebound. But let's look at the forecast for the supply of tankers.
Speaker 30: The order book staf stands at around 5%, or two hundred and fifty five tankles over the next three years. melos it has been in more than 20 years. At the same time, a big part of the fleet is over 15 years. We are talking about 1600 vess, or 31% of the fleet.
Speaker 27: We also have all almost 400 vions, or seven and a half percent of the current tanker fleet. That is over 20 years.
Speaker 18: As the next slide shows, 2018 was one of the highest scrapping gears for records of records.
Speaker 27: With 21, two million that we don't remove from the market. Last year we've seen an acceleration in scrapbing from the second half and we ended up with 14.5 million that we don't remove.
Speaker 27: So far fill may with 105 vessels of eight point five million that way on being scrapped.
Speaker 30: Scrap prices continue to be at high levels, currently hovering around 600. light on, and with more environmental regulations coming with discussions for our tenty per tial fuels and at least seven and a half percent of the global fleet over 20 years, we expect scrapping activity to remain elevated and not as a balancing factor for fleet supply going forward.
Speaker 30: To summarize, if we look at allil demand, very rebound continues.
Speaker 27: At oil suppli. We have to continue. We continue to see mully production increases by oppec.
Speaker 27: Nopec production is set to increase in 22. bring more cargoles to the market at the time when global. But global oil stocks are below the five -year levels and demand is surpassing in precovevery levels.
Speaker 34: On outside events, like the recent geopolitical invenancy in Ukraine and the sanctions that followedwe have seen that it forced a large number of Russian state oil and private health tankers to be excluded from trade. az oil majors and oil traders boycotted dis vessel, creating a supply squeeze, mainly the afhaa cent ralesmach sectors.
Speaker 30: We have seen every draw in oil trade routes, with heavily discounted the trussi and crude oil going to Asia, mainly India and -china, and returning back to the OD countries that are short refining capacity in the form of oil products, Middle distigillates gaazoolin, keroe.
Speaker 27: For the order book. The order book to the current fleet ratio is at historical low levels. A big part of the fleet is reaching phase out age.
Speaker 30: Pointing to a tighter supply of tankers for the next 18 to 24 months.
Speaker 17: And if we look at the company, we have a modern fleet.
Speaker 30: To have already started.
Speaker 27: With our orders that transition towards the next generation of greener vessels.
Speaker 17: We have the water and operating clip that is well positioned to capture the improving fre markets.
Speaker 29: We have. We continue to reduce debt. We have very strong balance sheet and strong banking relationships. That allows that company to take advantage of the opportunities that this market will present.
Speaker 17: And with that I will ask Paul to walk you through the financial highlights of the first quarter fall.
Speaker 35: Well Thank you, George.
Speaker 36: So in quarter one and achieved a net income of $6.3 million before minority interest of zero $8 thousand.
Speaker 37: This is compared to a net loss of $4.8 million in the prior quarter 1, So we had a complete positive turnaround.
Speaker 38: In this quarter. one then increased revenue by $11 million, bring our total revenue to one hundred and fifty million dollars. In the first quarter of this, our time charters generated $83.4 million, which includes one point three million dollars in profitsha.
Speaker 38: While our spot vessels contributed $66 million, several of the vessels achieving spectacular rates.
Speaker 37: We had six vessels undergoing dry Dog for survey purchases in quarter one but still achieved 93% utilization for the fleet.
Speaker 38: The average daily TCE rate per vessel was $19.73 thousand, a 9% increase.
Speaker 38: Judging from the results of other tanker companies, this was clearly a strong average rate compared to average market rates.
Speaker 37: Total operational expenses increased by a manageable 2% over the prior quarter one.
Speaker 38: Primarily due to increased voyage costs, which consisted mainly on rising fuel costs, while vessel operating costs did increase due to the addition of a splendid new LNG carrier and due to the dry docking schedule.
Speaker 37: Daily OpEx per a vessel remained relatively stable as about $7.7 thousand, while daily overheads per a vessel remained the same, at only $1.2 thousand per a day.
Speaker 37: Depreciation fell by $2 million in quarter 1, due mainly to reduced vessel valuations accounted for in quarter 4, while amortization of deferred dry dock costs increased due to the spate of dry docks over the past 12 months.
Speaker 38: We had one vessel in quarter one that is classified as held for sale and was actually sold in quarter two for $21 million, with certain similar vessels under consideration for possible sale depending, of course, on market conditions for product carriers that continueed to do so well for us.
Speaker 38: Finance costs were half out of the prior quarter 1, mainly due to cash gains of $1 million from our bunker hedges.
Speaker 37: ebbitda increased 13% to over $42 million, boosting our cash reserves substantially.
Speaker 38: In the quarter, outstanding bank debt fell by $44 million, bring total outstanding net debt to $1.3 billion and net debt to capital down to 51%, and.
Speaker 38: As I've mentioned, there were some extra expenses in quarter 1, but nothing unusual and indeed are already attended to by our technical managers.
Speaker 38: And so our finances remain in good shape, and we believe we will continue to be throughout quarter two and the half year.
Speaker 37: As we indeed as we enter the third quarter.
Speaker 38: Which we expect will continue to generate strong cash flow, allowing us to further focus on debt reductions and disposal of older vessels, at the same time enabling us to continue rewarding our shareholders, as we have shown.
Speaker 37: And now I'll give the call back to Nicholas.
Speaker 26: Thank you for it.
Speaker 26: Hopefully re ES next next quarter will be even better and with that we would like to have the opportunity to ask answer any questions sir what you might want to ask is.
Speaker 39: Ladies and gentlemen, if you have a question or comment at the time, Please pressstar than the one key on your touchdown to tephone. If your question has been answered, you wish to move yourself from the queue, Please press the pound key.
Speaker 39: Our first question come out. Ben Nolan was steeel.
Speaker 40: Ok I have a handful. Hopefully that's okay. The first one was: I know that you in the relation talked about having sold shares as part of the ATM program in the first quarter. Is curious if that was still the case in the second quarter.
Speaker 41: The majority of this year, I think, have been shold in the first quarter.
Speaker 42: Ok and and I guess it the the reason that I ask is that you know, I think, generally speaking, the shares have beenin below in a v. I'm trying to understand the rationale for for selling shares and and at the same time, buying ships at an a V But selling shares at a discount. It seems like it's, you know, an expensive form of capital for for growth.
Speaker 43: Well we we try to avoid to whenever our cash flow is very positive, But like it today, the only reason, the only reason we have used the ATM is for growth purposes, our calculations when the market, when the market is, as you call it by, when the shipping market is. But that's when theopportunities arise and that's all the time that you need to put the positits down to buy chiships that today, just to put in perspective, have just to tell you how unddilutive our actions were. Is that our realngy, which we purchased at the $175 million or 76? Today we have offers for here, $24 million, So we would not been able to buy those ships to hundred and $4 million. So, and that's not, that's one of the ships that we have bought during the Cris.
Speaker 44: yeah no, that's good answer and good point.
Speaker 19: announst. No, you may wish to add that the discount to the ATM program is much less than the other way.
Speaker 13: Yes there is no discount in the dat prom but again, we only use it when opportunities, right and right now. Our cash flow, thanks to the market, and mainly thanks to the product market, which is, I would say, its ES, are presented in as bonders have been in the business to share product carries, earning at six figure numbers and not a significant RO bottom line.
Speaker 45: Sure you had mentioned that asset values, specifically the LNG assets, but I think everything in general and new building prices have have gone up a little bit. You sold the the one L R, two it at the moment. Does it feel like that buying opportunity that you're trying to sort of be opportunistic with with respect to asset prices is sort of PED or things you know no longer countercyclical with respect to value?
Speaker 22: But we don't want to. We just say spin all the bins. But I mean, right now we have, we are looking at offers- or many of them, with not even inspection on the majority of our ships- from people that would like to buy our first generation vessels. That will net additional 50 to $6 million the profit, profit to us, And so we are more sellers ofofffirst generationships. I think, as George right said in his statement, we are looking for vessels that have are fully environmentally up to lead technologies, if we were going to buy something. But I think right now we are very satisfright, we're very satisfied with that. We realcsee.
Speaker 25: An option price purchases. The viances is the market, which is not out of the woods. It's suffering right now- not in our case- because preemptively we have chartered that viances is a profitable accreve rates, So we are not bleeding. Actually, if you go back to George, to the slide, to the breakeven, just to pay, to put it in perspective- I think you can let you go.
Speaker 25: You can see that I mean realces are are meitting in excess of three thousand in the market, in the spoort market, of of mines, if you. butso I think in every think we're making a significant profit and I think in the handy sizes and the the profit is, I would say, five fold from the from ourbreak given. So So we are looking at the health second court properly. Third, third quarter. Ok, that well, and actually that leads into my question: we, we are literally a few hours away from the third quarter. At this point, can you give any color as to how how, given you know the exposure that you do have to the market, how you envision in the second quarter, to shape up with respect to cash flows or day rates? Or maybe, just knowing that you might not have the exact figures how, maybe just as a percentage? How, how might, very relative to the first quarter?
Speaker 17: Well I think, just to put it place in perspective, in the first quarter- I am going to do to this, but I think you would get to vie are very very, very analyt. But in the first quarter we enjoyed one month, less than a month- of the good market. In the third quarter we enjoyed three months of a good mardel of more segments.
Speaker 42: Keep okay. So yeah, I well know lon.
Speaker 37: Is anybody that?
Speaker 46: Po the other right here.
Speaker 11: So and then last, I'm glad you- hopefully you can hear me Paul, because my last question is for you- interest rates are ising. I' curious what your it's not thking.
Speaker 47: Well maybe he can or may may, maybe somebody else knows what's the interest rate hedge position.
Speaker 43: We what about close to 50%? Okay perfect, of any one values decent.
Speaker 47: While I'm asking about hedging and in the way that you report your interest rates, you back out the bunker hedging. I'm curious why you connect the bunker hedging to interest rate expense.
Speaker 48: Think it falls and in the same risk, C the gory, but I'll get pull to call, call you if you cannot hear you and give you an answer on that. But it has included the holdar sedg is fall under the same category, accounateg or? Okay, all right, good enough, I appreciate. Thank you.
Speaker 49: Andy.
Speaker 39: Our next question comes from wilamberke with B reily.
Speaker 35: Yes Thank you appreciate the time. On your clean product tankers, some of your older vessels. We're looking at a very, very healthy spot rate environment versus very high asset values for the M? rs. How do you balance whether or not to divest these older vessels, as they exceed 15 years old, versus riding the economic life?
Speaker 26: We need your advvised to, but we are actually struggling with this question, buti think that is the best time to de. Best from something is when the other the, the buyer of your assets, is also going to make money. So I think, by not saying more, I think we are looking at, at ways to make our first generationships have a very profit sale for us and hopefully make money for for the, the guide down the line. So yes, we have. We have this is London, how we in contact.
Speaker 26: Yes born, we can hear you.
Speaker 50: I I.
Speaker 29: So this is a, this is our.
Speaker 41: We are looking to to the Investor right now: unmake a significant gain from our older vessel.
Speaker 51: Okay great, and as, as I'm looking at, you know your new bills coming online. The shunon tankers LNG carries, your revenues and cash flows are becoming less volatile and more predictable. How do I balance that with your capital allocation of paying down debt, paying down your preferreds and your dividend policy?
Speaker 43: Well it'is becoming, I would say yes, more predictable. However, the way we structured now, I think every thousand dollars increase in the spot market ATS than another 40 cents to our annually EPS. So So we still have, I would say, you know, we have 40. two out of our 65 in the water vessels right now are are enjoying the upside of the market through profit sharing arrangements, poll and cways. So we try to keep balance, which is always again on that Slide five we want times are to free to cover all our expenses and we ile five as we speak today, more the the times are, vessels cover much more than all our expenses. So whatever is left on the spot vessels is profitability and paying down debt and hopefully the preferred, which is our next target.
Speaker 52: Great Thank you very much.
Speaker 11: Our next question comes from clemin mulls with value investors gridge.
Speaker 11: Good morning. Thank you for taking my questions. I want to start by asking around the blc acquisition. Could you provide some additional commentary on the specifics of the deal and what was the reasoning maybehind this concrete acquisition?
Speaker 11: Thank you.
Speaker 53: Well you know, if you look at our fleet George, Please can you fleit us?
Speaker 26: They were on Page for you see, we are, we are.
Speaker 29: Your RO Marco to cateologyies, kind be Fed.
Speaker 54: The bo? Ok from C comp F the ship to the w? N.
Speaker 55: Yes have to do so. We have one more catifated LC which's not shown here.
Speaker 56: Of course noer terically this co.
Speaker 57: Anyway su. We are a diversified company. We almost 50% between products on your right hand side as you look at the and include carriers on your left side. We have been a light on ves. We used to have more ves going forward and the reason, of course, is that it's the only market that has not moved.
Speaker 58: And people are well arrows. These are big, big investments. It's not close to $1 million for less, and the other logic behind this is you should invest to when things are not, have not been, are not overpriced. New building prices for exactly the same vessels are approaching 125 million, if not exceeding them. So if we buy something in the 90, I think it's a good investment going forward.
Speaker 36: All right, that's helpful. You have consistently employed the assets in a nature of time charters and spump buyages, which has been very helpful over the past couple of years now and I was wondering if your strategy has changed on the product side of the business after the recent strength.
Speaker 19: And following up on this question: what kind of rates this you available if you look for longer term contracts?
Speaker 11: We have always depending on the markets.
Speaker 22: We always like predictability.
Speaker 24: We are not funds of fixed rates, because there's someone at the end of the day. For a long period of time, either ourselves or our chars are going to be, in a sense, on the losing side.
Speaker 23: So every time we are looking to negotiate- and I said started 15 vessels since the beginning of the year, with the majority of them on a profit sharing arrangement. So depending when the market is, we sit down and we accept a rate that covers all our expenses, and then we are open to serve the upside with the major oil companies, and I think this.
Speaker 26: Method of employer seeps servved us doing so far.
Speaker 11: Thanks for the callor and final question for me: do any of your affaaxes have the coating required to trade clean cargoes?
Speaker 11: Yes I think we have. Right now we have two of them and building another four.
Speaker 36: yeah that's helpful. That's all for me. Thank you very much for taking my questions.
Speaker 43: Thank you.
Speaker 11: And I'm not showing any further questions this time. I'd to turn the floorback over to the CEO for any equ. Closing remarks.
Speaker 11: wellagain. As I said, we would like to thank all of you for your interest in our company. We believe that we have been out of. We are out of the woods. We are seeing demand growing longer routes because of the Ukrainian situation. There is prediction that we will have a 7% increase on in tn milus, which is very, very substantial.
Speaker 22: For 2023. on top of that we will have a low steaming which will increase even further the demandth from our side and we are looking at a norder book that for 2023 is going to grow another tankers for one by 1% and a total order book over the next four years of eight and a half percent. So the fundamentals good. I mean. We got news, I think world. So the news yesterday from China: the increasing by 5, 50% CR imports refing capacity to non governental institutions. So they are. We were change in the beginning of this month, demand or growth in China supposed to be three to 4%, but 20 to 4% in a gantic tank like that is still a significant part. So we believe that to the fundamentals are and we, the sooner the world normalize, the sooner with can have Peace, quiet in the world So we can trade over all over the partorts of the world. And as soon as pundemic start is down, we expect to see a very firm tanker market. We are prepared in the company for that. We taking advantage of the low market which we did to build up or fleet with quality vessels, G vessels tle, tanker vessels C, is and and your fuel ships and hopefully for the remaining of this year and for sure for 20 20 3, we will be able to enjoy rates that finine and we will get a surprice to what it should be. And with that I would to thank you, weish you a very peacece, will and rest for summer. For those of you that are planning to take a hoid day from much here and on on in how not we would. We have friend, a very good colleague, friend of us Maria, who has been with us 15 years and now she is here. Way to enjoy par then. We willish all Maria. He has been a very strong part of our account in Department, has been helping a report, 15 years of growth and I think the most important job for you is starting now. So enjoy, enjoy. P who didn't. Thank you very much for all the for you have made for the company. Thank you, Maria.
Speaker 39: Ladies and gentlemen does conclude today's presentation. You may now disconnect and have a wonderful.
Speaker 11: The.