Q3 2022 Navios Maritime Partners LP Earnings Call
Thank you for joining us for Navios Maritime Partners' third quarter 2022 earnings conference call.
Today from the company are chairwoman and CEO Adam <unk>.
<unk> operating officer, just trying to see <unk>, Chief Financial Officer, Eric <unk>, and Vice Chairman Mr. <unk>.
As a reminder, this conference call is being webcast to access the webcast. Please go to the investors section of Navios Partners' website at Www dot not dispatched MLP dot com, you'll see the webcasting link in the middle of the page any copy of the presentation referenced in todays earnings conference call will also be found there.
Now I'll review the Safe Harbor statement. This conference call could contain forward looking statements within the private Securities Litigation Reform Act of 1095 about Navios partners.
These statements are statements that are not historical facts such forward looking statements are based upon the current beliefs and expectations of Navios partners management.
Subject to risks and uncertainties, which could cause actual results to differ materially from the forward looking statements such.
Such risks are more fully discussed in our partners' filings with the Securities and Exchange Commission the information set forth herein should be understood in light.
Such risks Navios partners does not assume any obligation to update the information contained in this conference call.
The agenda for todays call is as follows.
<unk> will offer opening remarks.
Next uncertainty principle, given overview of Navios partners' second data.
Mr. O'neil do you have an overview of Navios partners financial results then Mr. Petrone will provide an operational update and industry overview and lastly, we'll open the call to take questions.
Now I'll turn the call over to Navios Partners', Chairman and CEO Keith <unk>.
Angeliki.
Thank you Anna and good morning to all of you joining us on today's call.
We are pleased to report our results for the third quarter of 2022 in which we recorded $322 $4 million or revenue and $257 2 million.
Net income.
Net income amounted to $8 36.
The unit.
We're caught in the closet old one present there the macro event first in terms of the general economic environment.
Sandra banks, reducing their existing liquidity and the financing system.
Return to normalized balance sheet at the same time.
An increase in interest rates.
And then during inflation.
China is a major consumer of raw materials and produce it.
<unk> foods to much of the world has reduced a bit that as his experience as slow economic growth and focus on zero call with volumes slightly.
The culture and Ukrainian.
None of them are trading partners for oil and gas.
While also creating the scarcity of grains and media and commodities.
In the face of these challenges are defensive approach has served our stakeholders what.
We have about 16 different vessel types operating in three segments.
Asia.
So in each segment is below the industry average.
In the container sector, we were able to take advantage of the market.
Selling to 60 year old container ships for $220 million given that the guide for container ships.
What we're able to order new vessels and hedging the owners at least by chartering them out for a long period actually a reasonable return on the investment.
We also used our balance sheet strength.
The new tanker glass.
Yeah, so much because of it think of compounds at the time were constrained by that legacy balance sheet issues.
Today, we have six on all of it or we have long term charters.
All of that we continue to monitor events closely managing at least as we're thinking new opportunity.
Slide six to look at that segment that today, we have 185 vessels with an average age of nine five years.
Each segment has an average sleep aid materially below the industry average.
You're going to see the good work that we have done by developing our contracted revenue.
In the third quarter alone, we generated 351 million of long term contracted revenue from a variety of sectors.
Turning to slide seven we didnt annuities in development.
Z fixed up primarily because of completion of containership values. However, this is mitigated by the $3 2 billion of contracted revenue of which $2 3 billion is from the container ships.
I also would like to focus in a breakeven for the fourth quarter of 2022.
Fiscal year 2023.
You can see that we have.
$51 2 million.
Contracted revenue in excess of <unk> expense for the fourth quarter of 2020 to show any revenue from 4000 opening days would be profitable. We also have a very low breakeven that open days for 2023.
November seven 2022 breakeven per open day was slightly less than $6000.
Slide eight reviews, our balance with the initiatives in the face of rising interest rate.
<unk> been working to mitigate interest rate risk.
First as a percent of our debt at fixed interest rate with an average rate of about 518% and 70% violence had floating interest rates.
We have been actively working to reduce our average margin on our floating rate debt. So file will have been able to reduce this margin by about 10% to two 8% in 2022 as compared to three 1% in 2021.
We have done even better than our new building program with the average margin is slightly less than 2%.
We have $1 1 billion debt program to find enough and your ability.
$140 million.
<unk> been approved or at least in the process of approval.
And excuse discussion on the remaining $640 million.
We have been able to really get a favorable terms among new building program, 60% of our or the purchase price must be great Audi Unbelievably. In addition.
<unk> gone to the maintenance of the new building that has not commitment fee.
At this point I would like to turn the call over to Mr. Stratos, Mississippi Stratos.
Thank you and again good morning Ward.
Slide nine the pendulum standard operating free cash flow potential for the fourth quarter 2022.
We have fixed 73% of available.
Dave at the levels that it was going to take functions, becoming 51 bullet.
For 2022 consecutive adding 100 index each ticket purchase.
By over $51 million.
We have 4022 available days, what will provide additional profitability once weeks.
For <unk>, we have 60000 footprint remains one of available days of which looking at 65% of our base.
With market exposure.
Slide 10 demonstrates the basic business diversified global new much.
We benefit from counter cyclicality, which creates an opportunity to redeploy cash flow from winter reporting segments into activities in underperforming segments.
Asset margins can be volatile and a diversified asset base move to the balance of the volatility.
We continue to these dynamics all of us at the Beach.
Q3 2002.
Through continued advisers dropped by 42%.
4%, while tanker division position fueled by a 32%.
And from the midstream corporate values, a decrease of approximately 14%.
In addition, multiple segments allows us to optimize properties Inc.
<unk>, we can enter into a period of softness in other segments, we can be patient.
As you can see from the top or the bottom the container segment was enjoying historically high.
Not surprisingly, we fixed our container fleet.
Long term consulted with almost 90% of our available containership days fixed for 2023.
This reduced market energy generators.
We monitor credit risk of the Lincoln SUNFISH independently to ensure we are not simply creating one that is putting up.
Thank you Sigman current charter rates, such as passing footprint.
Please.
We increased speaks and available to think of this almost 40% from 2003.
Picking up on that European market.
We expect the tanker fleet will generate strong returns.
Lastly, not valuable segments.
Our rates are below the historical averages shall we remain patient by individual credits on pitch, thereby fixing of the 90% of available days.
Over 90% of it.
Our available days are exposed marketplace, which will be fixed long term.
Most of the market recovers.
In Slide 11, you can see our fleet renewal activities. We are always reviewing of the fleet. So that we maintain the bank portfolio.
Benefiting from new technologies, and more capable of nutrition business.
Navios partners made capital investments in 23, new building vessels that will deliver store fleet through 2025.
And container ships, we are acquiring <unk> for a total of $360 million.
Which is not investment by entering into long term creditworthy targets generating about $1 1 billion in contract revenue for the $6 40 bps or the duration of any new detectors.
In the tanker space, we ended two ophthalmic subjective by ordering six vessels for a total price of $380 million.
Four of the vessels are chartered out for five years at an average net daily rate of 25171 bonus generating revenues of approximately $190 million.
The targeting has the option to to updating the other two vessels.
Slide 12 gives you an update of our fleet activities specially.
These targets during Q3, we agreed to acquire two analogs glaucoma commissions for $60 5 million progression plus we're going to win additional features.
We have given the option to an investment grade counterparty to subsequent revisions for five years and penetrate authenticated $27798 per day, plus additional one year options I think lease rates.
The options declared ability to for 2022.
We also contracted to.
Well congratulations for five years at the new daily rate of <unk> 77 to $6.
Generating almost 95 million equal documented.
We will capitalize on this negatively tanker market chartering eight product tankers with an average daily rate of 24040 thankfulness.
And the average duration of one eight years, providing contracted revenue.
Five year.
On the containers and.
In Q3, we completed the sale of 8200 Teu container ships for $220 million.
So we fixed our only remaining book a division for 2000 capable for six months at a net daily rate.
$2695.
Finally on the dry bulk vessels, we acquired 58 vessels, including a new building capesize vessels, while at the same time, we sold four vessels with an average age of 16 years for $52 million.
On the chartering front, we created $112 6 million contracted revenue by targeting three of our Capesize will revisions for five years at an average net daily rate of 20000 cocoa matrix to $7.
Moving to slide 15, we continue to secure long term employment for our fleet.
Contracted revenue amongst the $3 2 billion, 72% of our contracted revenue comes from our container ships with charters extending through 2036 with a diverse group of quality Counterparties.
Almost 50% of its contracted revenue will be heading into next year and half years.
I now pass the call to ADT, CFO , which will take you through the financial highlights.
Thank you start up in the morning on I will briefly review our unaudited financial results for the third quarter and nine months ended September 32022.
Non coming formation is included in the press release and is summarized in the slide presentation are available on the company's website.
I would like to highlight that the quantity quantity results are not comparable to 2021 as <unk>.
321, and then Macquarie to companies and recently 96 basis significantly expanding its fleet.
Moving to the earnings highlights on Slide 14 total revenue for the third quarter 2022 increased by 41% to $322 4 million compared to 228 million for the same period in 2021.
Time charter revenue is anticipated because of the $13 6 million of investments are required for accounting purposes due to the straight line effect of container ship charters with the escalating rates.
The Ohio revenue increase results by 43% increase in available days to 12.
897, compared to $9 27 for the same quarter last year.
Our time charter equivalent rate decreased by 3% to 23781 per day.
<unk> 2000, 400447 days for the same period in 2021.
In terms of slipped up on farmers, both containers and tankers enjoyed blades that increased 45% beta dollar period to 32604 containers in 'twenty, one and comment 28 for tankers in contrast, our dry bulk fleet rate by 31%.
<unk> thousand $61.
And we therefore Q3 'twenty 'twenty increased by 81% to $321 4 million compared to $177 2 million for the same period last year.
Clothing, one off items are described in our press release adjusted EBITDA increased by $32 5 million to 107, $77 7 million.
Net income for Q3, 2022 increased by 59% to $257 2 million compared to $162 1 million for the same periods in 2021.
So you're only 19 count was $8 $36, excluding one off items as detailed in the press release adjusted net income was $113 4 million compared to $131 million in 2021.
Adjusted net income per unit was $3 $7.
Total revenue for the first nine months of <unk> increased by 89%.
$39 7 million compared to $445 million for the same periods in 2021.
For the nine month period September 32022.
Is understated because of a $31 million of documents required for accounting purposes due to the straight line effect of containers at the factors of the escalating rates.
The overall increase in revenue was a result of a 72% increase in available days by 35000.
194, compared to 20005 hundred 21 for the same failed in 2021 and then they present an increase in the fleet average TCE rate to 2700 Seventeens Monday.
Third to 20991 fine day for the same period in 2021.
In terms of sector, our farmers TCE rates increased 39% for containers to 30486 and 18% for tankers to 17834.
Bulk rates were in line with plan to 'twenty one rates for the same data <unk> 1381.
EBITDA for the nine months period ended September 30, frankly pointed to increased by 43% to $611 million compared to $426 2 million for the same period last year, excluding one off items as described in our press release for the EBITDA increased by one.
<unk> hundred $97 5 million to 467 3 million.
Net income for the nine months period, ending September 32022 increased by 16% to $461 million compared to $398 6 million for the same period last year.
Net income per unit that was $15. Excluding one off items described in detail in the press release.
Adjusted net income amounts to $317 2 million compared to $242 3 million in 2021.
Adjusted net income per unit was 10 <unk>.
Compared to $1.
Turning to slide 15, I will briefly discuss some key balance sheet.
As of September 32022.
And cash equivalents were $110 3 million during the first nine months of 2022, we paid $95 5 million of pre delivery installments under our new building program.
We also paid $380 4 million acquired 56, secondhand and for new building vessels.
Finally, we sold two containers $215 3 million next year.
The bill required $161 million scheduled repayments under.
This facility.
Long term borrowings, including the current portion net of deferred fees amounted to $1 9 billion net debt.
Amortization stood at 43, 6%.
Slide 16 highlights our debt profile.
Our debt.
Lease liabilities of two four times covered by the value of our fleet based on publicly available valuations.
We continue to diversify our funding sources between bank debt and leasing structures, while approximately 30% of our debt, including operating lease liabilities have fixed interest rate at an average rate of five 8%, providing a natural hedge against currency rate increases.
Our maturity profile with target with no significant values you in any single year.
Furthermore, we decreased the average margin on our term facilities to two 8% for three from 31% at the end of 'twenty to 'twenty one.
The average margin for our new building facilities is one 9%.
Slide 17 provides an update of our recent financing activities and September 2022 we signed an $86 $2 million credit facility with a European bank financings to containers for delivery in 2023, our telfer, a plus 2% and we complete the debatable agreement at an effective.
Fixed rate of five 5% for the financing of one you're leaving date for delivery in 2023.
In October we concluded a 100 million leasing facility refinancing five containers, a saka plus two 1%.
Currently we are completing our first export credit agency facility for $161 6 million financing for containers for delivery.
To a degree in 2024 October plus one 7%.
Financing of the two.
2016, Bill Com's, Panamax at LIBOR plus 2%.
We are progressing the financing of our new England program, and we have signed or are in documentation phase for an aggregate amount of $480 million, representing approximately 44% of our financing requirements.
Including the facilities under approval process, we are close to $740 million or two heads of our new building financing needs.
Of this amount 500 leaner represents financing arrangements with no commitment fee.
Turning to slide 18, you can see our ESG initiatives, we aspire to have zero emissions by 2000 feet. In this process, we have been filing meeting and are adopting certain environmental regulations.
Two three years in advance aiming to be one of the first fees for full compliance.
Now this is a socially conscious group, whose core values include diversity inclusion and safety with our very strong corporate governance and clear code of ethics. Our board is composed by majority independent directors and independent on weakness.
We'll see how the management and operations.
Slide 19, the pace our company highlights Navios partners is a leading U S publicly listed company our days diversification strategy creates resiliency and enables us to mitigate individual segments volatility.
Diversification scale and financial strength with making them an attractive investment platform as we take advantage of global trade pattern now.
I'll now pass the call to Ron to take you through the industry section.
Thank you Arie, Please turn to slide 21 for the review of the tanker industry.
Take rates rose sharply in Q3 and rates today continue firm in all sizes for both crude and clean vessels.
But has negatively affected the container industry has positively affected tankers that is consumer activity has switched from purchasing goods to increasing travel and services about two thirds of seaborne product trade is related to transportation.
Finally, the economic uncertainties in the Ukraine crisis.
Still projects, a 2% increase in world oil demand for 2022.
The expectation is it all demand will grow by one 7% in 2023 to 101 3 million barrels per day exceeding 2019 pre pandemic levels.
Turning to slide 22.
Let's continue across the board and have risen due to solid supply and demand fundamentals combined with the invasion of Ukraine, which is redirected Russian crude in cleaning products to new and longer routes.
Additional European refineries are replacing Russian crude and products with supply from the U S and middle East Gulf further increasing ton miles and trade efficiencies.
Incremental support for crude tanker rates should come into effect as new EU sanctions at a price cap again on December 5th.
Product tankers should also be aided by discounted Russian crude exports to the far east returning to the Atlantic is clean product. This could add upward pressure on an already strong rates.
2023 crude and product ton mile growth is expected to increase by five 3% and nine 5% respectively.
Turning to slide 23 vessel net fleet VLCC net fleet growth is projected at four 2% for 2022 and only 2% for 2023.
This decline can be partially attributed to Otis hesitance to order expensive long live assets in light of macroeconomic uncertainty and engine technology concerns due to upcoming C O two restrictions.
Current order book is only three 4% of the fleet. The lowest 30 years vessels over 20 years of age or 10, 3% of the total fleet.
Which compares very favorably with the low order book.
Turning to slide 24 product tanker net fleet growth is projected at one 8% for 2022.
The only one 5% for 2023.
The card product tanker order book is four 9% of the fleet.
One of the lowest on record and compares favorably with the 7% of the fleet, which is 20 years of age or older.
We believe that the overall tanker order book.
Well balanced as the IMO 2020 regulations will lead to some vessel retirements in the coming months.
In conclusion take protector sector review tanker rates across the board continue at strong levels. The combination of low global inventories oil demand returning to pre pandemic levels, new longer trading routes for both crude and product as well as the lowest order book and three decades should provide for healthy tanker earnings going forward.
Please turn to slide 26, focusing on the container industry since topping out at 5110 at the beginning of the year, the Shanghai container freight index.
CSI currently stands at just below 600, which has dramatically weakened on the back of uncertain macroeconomic conditions combined with consumer spending switching back to services over goods, which has led to a decrease in container trade using port congestion and blank sailings.
Tunneling rates have moderated recently, however, they remain above historical pre COVID-19 averages.
As Youll note in the graph on the lower right U S inventory sales ratio was off the recent low but still well below the long term average.
The graph on the lower left shows moderating purchases of goods, it's a slower input throughput using port takeaway bottlenecks and port congestion.
U S au goods imports have not been helped by China's zero corporate policy, which has slowed some finished goods exports.
Turning to slide 27.
Net fleet growth is expected to be three 7% for 2022 at seven 3% for 2023 and the current order book stands at 28, 8% against nine 9% of the fleet 20 years of age or older.
71% of the order book is 410000 Teu vessels larger than.
In concluding the container sector review supply and demand fundamentals remain challenged due to economic uncertainty a pullback in demand for consumables.
Using supply chain bottlenecks, please turn to slide 29 for a review of the dry bulk industry.
After a strong Q2 of the PDI experienced a counter seasonally soft Q3, averaging 16 55 ending below both the previous quarter in the same period last year. The BVI started Q3 at a high of 22 to 14 or a combination of the colon Chinese economy, and the weather related to export disruptions. So the BVI Dick's.
Falling to a low of $9 65 on the last day of August before strengthening in September due to increased exports from Australia, Brazil and Guinea.
Since then the BD is up approximately 45% to about 4500 on the back of higher Capesize and Panamax earnings overall supply and demand fundamentals remain intact as the macroeconomic environment continues to evolve and uncertainties remain for.
For 2023 that historical low order book and tightened GHT admissions regulations remains a positive factor.
Please turn to slide 30.
Turning cold Ukraine crisis continues support increased global coal imports as European supply concerns persist. This has led to European countries to reactivate coal fired power plants European seaborne coal imports are expected to increase by 17% in 2022 and a further 5% in 2023.
Additionally, the EU ban on Russian coal will lead to shifting trading patterns towards longer haul routes overall seaborne coal trade is expected to be flat in 'twenty to 'twenty, two but supported by an estimated one 7% growth in ton miles.
On the grain side global seaborne grain trade is expected to decrease at two 4% in 2022, followed by a healthy increase of four 2% in 2023.
Global grain trade continues to be driven by heightened food security issues driven initially by the pandemic currently a severe drought in the northern hemisphere as reduced harvest and export estimates.
More in the Ukraine is negatively affecting grain exports from the Black Sea. These issues are moderated by new trading patterns, resulting in an expected ton mile growth.
One 3% in 2023.
With regard to iron ore.
China's zero Covid policy and real estate concerns significantly impacted steel production and iron ore demand through September of 2022.
Chinese seaborne.
Imports decreased by 2% steel production fell 3% to the same period.
Expectations that COVID-19 restrictions will be eased along with increases in infrastructure spending should bolster Chinese imports in 2023.
Please turn to slide 31.
Order book stands at $6, 90% of the fleet or the lowest on record net fleet growth for 2022 is expected at two 7% and only 0.5% in 2023 as Owen has removed tonnage that will be uneconomic. When the IMO 2023 C O two rules come into force.
Vessels over 20 years of age are about 8% of the total fleet, which compares favorably with the historically low order book.
In concluding our Drybulk sector review continuing demand for natural resources.
Sure and thanks and related longer haul trades combined with a slowing pace of new building deliveries.
I'll support freight rates going forward.
This concludes our presentation I would now like to turn the call over to Andrew. Thank you for her final comments Andrew Leaky.
Thank you Beth.
So I'm gonna get presentation, there will open the call for questions.
Okay.
Thank you at this time, if you would like to ask a question. Please press the star and one on your Touchtone phone you may remove yourself from the queue at any time by pressing star two.
Once again that is star one to ask a question, we will pause for a moment to allow questions to queue.
Okay.
Again, Thats star one to ask a question we will take our first question from Omar <unk> with Jefferies.
Hi, There hey, guys. Good morning, good afternoon.
Good morning, good morning.
Good morning, guys.
We have seen today agreements to sell a handful of older drybulk or as you're bringing into younger ones. We've also added two more two new buildings, given I guess your diversified platform I guess will be seen as a lot more frequently going forward and just generally how do you see navios now, especially with the platform we have today.
The strong earnings coming in from the tanker exposure the solid cash flows from the containers.
Secondhand prices coming under pressure here.
And the container market and then obviously some softness here in drybulk other opportunities starting to develop.
Well you could take advantage of this weakness or you may be taking a bit more of a wait and see approach and looking at the second hand market.
Okay.
But if.
Even if I assume that we already have done.
So therefore, we have excellent advanced sales on the.
Both on the dry bulk we have taken a position.
Yes.
So that's the most qualified veterans Japanese fashion, and we have them in the water waiting for the opportunity.
How China will develop cloud.
Great.
Victor will be and that will give us an opportunity on the spot market.
And of course, we also have some new.
Building that provided.
And what I appreciate infection.
All of our container fleet.
The container.
Let me see.
<unk> taken an approach of resolved earlier breakfast with fantastic assays.
And we showed at the appropriate time, so the container.
On the container sector, we are more.
We have now positioned in that in a situation, where we enjoy cash bills, we have of about $3 billion.
Contracted revenue of about $2 billion.
On the call David and Joe.
<unk>.
Cash flows.
Thank you Victor as you very well said.
Amen Amen.
Position aware, we enjoying the spot market.
Opportunity.
At the same time.
Yeah.
<unk>.
We entered in this sector and we actually have.
<unk>.
Hey, nice cash flows event. So it is totally opportunistic we have.
We see therefore tragedy and we move forward.
Disposal of assets and also in acquisition.
On the Bakken.
<unk>.
Now the all portfolio one thing you will see very often will really move.
We will be selling all the vessels all that technology.
They need capex and moving to a younger fleet debt.
Inevitably BMR.
Better shops.
Sure.
Got it.
So this is great.
Great. That's really we're doing constantly and youll see us doing it.
Why we saw the all the vaccines and we have to just one.
John Capesize vessels thereabout.
50% less.
Great question, yes, and fewer of them they have about 50% carbon.
Good morning.
Thanks, Andrew.
And then maybe just on the point there.
The efficiency you saw that you've now taken up your LR two orders to six ships and I just wanted to double check.
Is it now the original four that were contracted maybe six months ago. Those are enough chartered and the latest two orders from today those are those.
Those are under option would be contracted by the by the chart does that makes sense of four out of the six artificially charters.
Yes, you're absolutely right.
Okay. Thank you.
Yes.
Alright.
I just wanted double check that and then maybe just.
Final question.
Youll, probably be getting necessary in the past, but how do you think now about how are you using some of the excess free cash.
Obviously, you've been very dynamic with the fleet.
With the Navios Holdings Drybulk fleet now fully delivered into NMM.
As of September .
How do you how do you think about the $100 million buyback.
<unk> got in place.
Do you use that a bit more significantly now or does the pullback in containers, even though youre contracted but does it pull back there was a softness in drybulk does that give you a bit of a pause.
Buying back shares.
We adopted the buyback because we wanted to have electronics ability yes.
Yes of course, because of the macro uncertainties that we sell.
And the balance sheet consideration.
<unk>.
And of.
Consolidation is really have not focused on that yet, but it's something that we're looking this is about.
Lewis is concentrating on total debt. This is a very important thing and the decision of ours.
Yeah.
How did it go to SaaS on the it depends on the ARINC in value but.
It's something that.
We adopted because we wanted the flex maintenance.
Okay. Thanks, Angeliki I'll turn it over.
Thank you.
Thank you we'll take our next question from Matthew <unk> of Citi.
Hello, Good morning.
Good morning, good morning.
So.
We were wondering if you could just touch on a little bit more about the softness in kantar.
Painter market right now and you know, where where you really see that going.
Not only in <unk>, but also that you could potentially shed some light on the first half of 2023.
Also in addition to that if you wouldn't mind touching on the points.
Hedging out that do build risk with the longer term charters. If you could just talk a little bit more on those two points that would be very helpful.
I will start with a domestic market.
The market is a market that that would be on it.
We saw the opportunity.
Sure.
We saw that.
We moved from corporate to periods, where we are all about.
That's in packages of products to shed evidence corroborating evidence down correct.
It was inevitable that we have at shelf set.
And market and Thats why we contrasted estimate we have hedged our position and with the.
Maximizing I guess Richard Jackson.
Gotcha.
$120 million, which was completed in September of $220 million.
So.
2006.
Container vessels and also.
We've contracted aggregating.
And one of the things.
This is.
We.
Have about some are $3 2 billion contracted revenue.
Mainly in the container sector and of that is a very firm about 8 billion, we're going to get and within.
First of the year, so it's a very strongly all of it.
We see that now the company is having very good morning, so the balance sheets as variables and we want to add as soon as possible to make amount. So we are very we have a.
<unk> got maintenance that we monitor on this.
We also have taken measures from the beginning Frontloaded and head.
The exposure.
Yes.
Yes, thank you very much for that.
Let's see if you don't mind, just giving a little bit more detail on your on your puts and takes on the bulk market.
One hand bulk demand remains.
It remains strong but softening.
Taking into consideration the supply issues.
Like we're going to put pressure on what youre able to move.
Would you break down this market dynamic headed into the winter and the first half of next year.
I will give you a very macro level I'll, let Ted speak to all of this but one thing I'll say is that today, you'll have corn, which is basically the bearish on the energy crisis in Europe , who have more demand as an advertising and the other big issue.
Is zero coverage policy in China at the end of the story in China is a 50% buyer of one commodity.
Enrollment.
<unk> corporate strategy you will see.
That this will create an opportunity on the dry bulk and make our the larger vessels.
One way to either lower the larger commodity maybe to dive into that market and with that I think that that can give you a better retention rate.
Sure. Thank you Angela.
Just taking a step back on the macro let's just remember that the order book is under 7%.
Net fleet growth next year is going to be half a percent.
You may have some softness here into the winter eventually China will fix the zero covered policy, whether now or a couple of months.
Is why youre seeing the rates of.
We will come off a bit from the spring, but the.
The actual S&P values have not because there's a lot of confidence that the market is going to bounce back.
They haven't come down as much as the rates and the rates just actually starting to move up a bit I would say and I think youll be seeing next year some really good.
Ton mile increases of almost 5% coal is going to be 3% youre seeing longer haul routes for two out of the three the three majors coal and grain, Idaho will not have a ton mile but it should come back next year as China.
Infrastructure projects take hold in the spring.
The Coke zero policy goes away. So I think theres a lot of optimism, but you may have a soft touch in front of us right now.
Thank you very much.
That's very helpful.
And then just just finishing up.
Would you be able to break down the available days, specifically within dry bulk container and tanker for the quarter.
I will.
Eric.
David One quick thing Alex.
What I'd give you on a macro level for 2026.
6000 breakeven.
<unk> of which we have 40000 day 30000, more or less on the dry bulk and 10000 on the tanker.
Gives you a good outlook on that.
2023.
And in capacity.
123, or four quarters, sorry, which quarter yoga classes.
So we're looking at the third quarter.
The third quarter, so roughly we have around 4000 per day.
Of which 1000 are they received a 900.
One day.
Close to 2001 on the market data.
Just real 200 chemical days.
On the container side, we have over 3200 days.
And this is.
The 10000 data, we'll have roughly two vessels to a bit more.
600 days 2000 based on the 4000.
<unk>.
Side, and then 600 days were 3450 and below.
Then on the dry bulk side, we have rapidly.
<unk>.
We will have 6000 base.
<unk>.
Thank you very much that's all that's very helpful.
Okay.
Got it.
Around 2000 gateways and then.
Great.
Panamax vessels.
Fundamental.
Thank you very much.
And then if you can.
Well, thank you for your modeling questions.
So that you can.
Concerning our margin.
Perfect. Thank you.
Thank you.
Yes.
Thank you I will now turn the floor back over to Andrew <unk> for any additional or closing remarks.
Thank you this completes our Q3 results. Thank you very much.
This concludes today's earnings call. We appreciate your participation you may now disconnect.
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