Q2 2023 International Seaways Inc Earnings Call
Hello, everyone and welcome to the International Seaways second quarter of 2023 without co will begin in approximately a minute time or.
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Hello, everyone and welcome to International Seaways second quarter 2023, without cool and thank you for standing by my name is David and I'll be coordinating your cold today.
If you would like to register a question. Please press star followed by one on your telephone keypad.
I would now like on the corner of two highest James small general counsel again, so Jamie. Please go ahead.
Thank you David.
Everyone and welcome to International Seaways earnings call for the second quarter of 2023.
Before we begin I would like to start off by advising everyone on the call.
Hey, Paul.
During this call management may make forward looking statements regarding the company or the industry in which operate.
Statements may address without limitation the following topics.
Outlooks for the crude and product tanker markets changes in trading patterns.
Forecasts of World and regional economic activity.
And on the demand for and production of oil and other petroleum products.
The effects of the ongoing conflict between Russia and Ukraine.
The company's strategy.
Our business prospects.
Expectations regarding revenues and expenses, including vessel charter hire and G&A expenses.
Estimated bookings TCE rates and or capital expenditures during 2023 or any other period.
Projected scheduled dry dock and off hire days.
Purchases and sales of vessels construction of Newbuild vessels and other investments.
The company's consideration of strategic alternatives.
Anticipated and recent financing transactions and any plans to issue dividends.
The company's relationships with its stakeholders.
The company's ability to achieve its financing and other objectives.
And other economic political and regulatory developments.
Any such forward looking statements take into account various assumptions made by management based on a number of factors, including management's experience and perception of historical trends current conditions expected future developments and other factors that management believes are appropriate considering the circumstances.
Forward looking statements are subject to risks uncertainties and assumptions many of which are beyond the company's control, which could cause actual results to differ materially those implied or expressed by the state.
Factors risks and uncertainties that could cause international <unk> actual results to differ from expectations include those described in our annual report on Form 10-K for 2022.
Our quarterly reports on Form 10-Q for the first and second quarter of 2023.
And in other filings that we have made or in the future may make with the U S Securities and exchange.
Now, let me turn the call over to our President and Chief Executive Officer Ms. Lois.
Brock Lewis.
Thank you very much James.
Morning, everyone.
Thank you very much for joining international Seaways earnings call for the second quarter of 2023.
Going to slide four of the presentation.
And on the Investor Relations section of our website.
Net income for the second quarter was $154 million.
$3.11 per diluted share.
Bringing our cumulative earnings over the last 12 months to over $650 million.
Adjusted EBITDA was $205 million.
Based on our strong results in the second quarters and strong spot rates. Thus.
Thus far in the third quarter, we have declared a combined dividend of $1 42 per share.
Following the dividend payment in September reached.
Turns to shareholders over the long.
Last 12 months.
Include a cumulative $6.16 in combined dividends.
As well as $14 million in buybacks.
This equates to approximately $316 million, which represents a 17% yield on our average market cap over the period.
We have returned to shareholders an average of about half of our net income.
We have enhanced our capital structure.
We have liquidity.
Nearly $500 million comprised of $236 million in cash and an undrawn revolver of nearly $260 million.
Our strong liquidity is net of our returns to shareholders.
All of our deleveraging initiatives.
In the second quarter, we prepaid $75 million of.
Our debt portfolio.
Coupons on sale leaseback financing.
$46 million that had an interest margin of 390 basis points above bank borrowing rates and $29 million under our largest senior secured facility.
This unencumbered in modern Suezmax.
Overall in the last 12 months, we have prepaid nearly $390 million in debt and unencumbered 30 vessels.
40% of our fleet.
Our net loan to value is about 22% today and our cash breakeven for the next 12 months is under $16000 per day.
This include about $3500 per day from.
From our fixed contracted revenue that in aggregate amounts to over $350 million through charter expiry.
It excludes profit sharing on applicable charters.
As we continue to pull all the levers.
With our capital allocation approach.
Our third and final dual fuel VLCC delivered in May.
Each three vlccs.
On time charters for the next seven years with a fixed base rate plus.
That's a profit share over the index rate.
On the route from the Middle East to China Tea tree.
In the second quarter. The TCE from these shifts what's the profit share was about $43000 per day, providing a nice premium on the 96 million per vessel invest.
We just signed two new building commitments with two options for LR ones with case shipbuilding for delivery in the second half of 2025.
These shifts will be scrubber fitted.
In class certified for LNG conversion.
The aggregate price of $115 million.
The two vessels includes strengthens decks.
Besides generators and equipment consideration.
Upon delivery.
Chip will deliver into our niche Panamax international joint venture, which has consistently earned a premium to the LR one broader market.
The average age of the LR ones in our fleet is about 14 years old.
And the overall LDR, one panamax sector has a very aged fleet profile.
Yeah.
At this age.
They have earned $67000 per day year to date.
We are supporting our presence in this.
Critical strategic joint venture.
On slide five we pull highlights.
Oil demand is expected to surpass 102 million barrels per day.
On average for the second half of the year.
Increasing by 2 million barrels per day year over year.
Growth in oil supply mostly comes from the west.
North America, Guyana and Brazil.
In the chart on the lower left of the slide.
The average of the EIA, the IEA and OPEC forecast for oil supply and demand.
Our line.
Projecting a supply deficit in the second half of 2023.
On the lower right chart oil inventory.
We are showing commercial stocks in the OECD has increased in the first half of the year as expected.
We now expect these inventory will rapidly draw early in the second half of the year as OPEC plus cuts our belt.
Sentiment from these expected cuts have largely been priced into the spot tanker rates.
It will be interesting to watch now in the tanker markets.
Impact due to the tightening of Urals crude to Brent pricing.
Which may impact the price cap part of the fleet that has been trading in accordance with sanctions.
These shifts may come back into the commercial fleet and affect D V. Ernie.
Still very early to tell how this will unfold and we remain observe it.
On slide six.
The tanker supply side.
Despite some new ordering activity.
This remains a compelling component to the story of our fundamentals.
You can see on the lower left hand chart vessels on order make up less than 15% of the fleet that is over 15 years old it shouldn't be replaced over the next few years and it represents less than 5% of the overall fee.
These orders are also spread over the next over the next three to four years.
Owners cannot easily rush to start replacing tonnage today because.
Lead times are longer as yards continue to bill in other shipping sectors.
As you can see in the lower right hand chart.
Environmental regulations continue to evolve, creating uncertainty towards building new vessels.
And selecting engine types.
Flipping to presentation to slide seven.
Since the IEA recently updated the oil outlook through 2028.
We reiterate our stance.
Near term fundamentals.
This map of the world.
We wanted to simply show that oil supply growth.
It's coming largely from the Americas as you see on the Blue bars, what oil demand rose.
And the Green bars is mostly driven by Asia.
These dynamics create an incredible investment cheese for seaborne transportation.
In the near term.
Layer on top of this geographical changes a constrained supply side that is aging.
Compounded with trade flow inefficiencies as a result of the Russian invasion and subsequent fast sanctions.
It sets the stage pretty solid tanker environment.
At Seaways.
We continue capturing the strength of the tanker markets today.
And.
We are building our future.
I think medium tanker owner listed on the New York Stock Exchange.
With our comprehensive capital allocation approach.
We are utilizing all the possible levers that.
That build upon our track record of returning.
Shareholders' cash to shareholders.
Maintaining a healthy balance sheet and growing the company.
Now I'll turn it over to our CFO , Jeff pre bore for the financial review Jeff.
Uh huh.
Thanks, Louis and good morning, everyone.
On slide nine.
Net income for the second quarter was $154 million or $3.11 per share.
On the upper right chart adjusted EBITDA for the second quarter of 2023 was $205 million.
In the appendix, we provided a reconciliation from reported earnings to adjusted earnings.
Well our expense guidance for the second quarter, mostly fell within our range of expectations I'd like to point out a few items of note within our income statement.
Vessel expenses were higher than our prior guidance for the quarter.
Majority of the increased spend is due to the timing of purchases of spares, which is unavoidably bumpy as it relates.
Is it related to what has shifted in dry dock our offer.
Charter hire including profit share is inline with expectations given elevated rates.
Other income for the quarter was over $3 million, which consisted largely of interest income on our significant cash balances and we've been working hard to maximize income.
On the revenue side, our lottery business had another strong quarter, earning $11 million of revenue.
With 2 million in vessel expenses, <unk> 4 million in charter hire and G&A. The wiring business contributed about 4 million EBITDA in the second quarter and almost $10 million of EBITDA year to date.
Yeah.
Now turning to our cash bridge on slide 10.
We began the quarter with liquidity of $519 million composed of 261 thing in cash and $257 million in undrawn revolving capacity.
While we won't the chart from left to right on the cash bridge.
We added $205 million adjusted EBITDA for the second quarter less 56 million in debt service, which is composed of scheduled debt repayments and cash interest expense.
Our drydock and capital expenditures of $14 million in the quarter.
Dan It working capital benefit of website dogs, we therefore achieved free cash flows of about $146 million for the second quarter.
The remaining bars at the cash bridge demonstrates the execution of the capital allocation that we announced first quarter earnings call.
As a reminder, in Q1, we had $169 million of free cash flow here, you can see exactly how we used it.
First.
As we committed to at the time of the call, we repaid $75 million of debt in this quarter of which $29 million went to unencumbered modern suezmax vessels and $46 million was to terminate two sale leasebacks that had an interest margin of 390 basis points over.
Thanks borrowing rates.
Secondly, we paid $79 million in combined dividends.
<unk> 62 per share.
Finally, we repurchased approximately 366000 shares of our stock for $14 million.
These components.
Nevertheless, in ending liquidity of over $493 million.
236 million in cash and short term investments of $257 million and Undrawn revolver capacity.
Now moving to slide 11.
<unk> financial position detailed by the balance sheet on the left hand side of page.
Cash remains strong at 236 million vessel order book stands at approximately $2 billion book value versus current market values of over $3 billion.
And with about $947 million gross debt that equates to a net loan to value of about just about 22% also illustrated in the bottom right hand chart.
I want to point out one last element of the balance sheet.
Have a timing issue and the <unk>.
Third line down from the top under assets you see that we separated.
Advanced payment of debt of $46 million, which is related to the prepayment of the two setbacks I just mentioned.
There was a corresponding 46 billion of debt embedded in the current portion of debt.
Both of these are eliminated or what is the name of the transaction when it closed.
Hi, there just after the quarter close.
On the upper right hand side, we have.
To recap the debt details to reflect this.
These prepayments.
Because 73% of our debt portfolio is hedged or fixed our weighted average all in interest rate using current bank borrowing rates.
636%, which at current rates is effectively a margin of about one a quarter basis points above today's so thread LIBOR reference rates.
Okay.
As we mentioned in our press release. This morning, we expect to continue on this trajectory of our balanced capital allocation approach with.
We intend to use some of our cash to repay existing debt.
Currently we're exploring options that waste facilities in the portfolio, we would do but we expect total repayment maybe around $50 million.
We also have announced our combined dividend of $1 <unk> per.
For sure which consists of a regular dividend of 12 cents.
$1 30 of our supplemental dividend.
These payments we made in the third quarter as we continue to build on our track record of executing our capital allocation strategy.
Okay.
Turning now to the left to the last slide that I'll cover slide 12 reflects our forward looking guidance at book to date, GCE aligns with our cash breakeven levels.
Starting with TCE pictures for the third quarter of 2023.
Which I'll remind you as I always do that actual TCE, which we'll tell you during our next earnings call maybe different.
But here you see we have a blended average TCU across all the sectors.
A $38000 a day so far this quarter.
On the right hand side of the slide you can see our cash breakeven.
Which we've shelved for the next 12 months reflective of the delivery of the last vessel in our new building program and related payments of principal and interest as well as the new fixed revenues, excluding any profit share.
Increased long term time charters.
Overall, we produced our breakeven by $1000 a day second quarter of last year.
When you compare this breakeven to our fixtures to date it certainly looks like the third quarter. It can be another strong quarter for international Seaways.
On the bottom left hand chart.
The Modelers out there we provide some updated guidance for expenses in Q3, and a total of the year.
We also included the appendix our quarterly expected off hire of Capex scheduled for 2023.
I have to read each item line by line to encourage you to use these for modeling purposes.
That concludes my remarks, I'd now like to turn the call back to Lois for closing comments. Thanks, a lot Jeff.
I will now summarize the details laid out on this.
Slide 13.
You can see our investment highlights.
Over the last six and a half years.
International Seaways.
Has a track record of returning to shareholders.
Constantly improving or have a healthy balance sheet.
And growing our company.
Our total shareholder return over this time is over 290% and surpasses our peers.
Over the last 12 months.
Our regular quarterly dividend supplemental dividends and opportunistic share repurchasing we have returned $316 million in cash returns with earnings of.
$658 million.
It's very consistent payout represents a 17% yield.
We have improved our balance sheet over this time.
With 75 vessels in the crude and product tanker markets.
Had $2 billion in assets on the books that are worth over $3 billion in the market today.
We prepaid debt and unencumbered 30 vessels, representing 40% of our fleet.
Importantly, our cash breakeven level.
Now below $16000 per day.
We have strategically positioned this company for a sustained robust tanker market with a growing need for seaborne transportation created by regional imbalances.
We're focused fake.
Reliability with our transportation in an industry that will have evolving environmental regulations and we remain.
<unk> focus on being a leader in ESG.
Collectively we strive to continue to evolve these principles and provide a meaningful platform for all of our stakeholders.
Thank you very much.
Operator, if you would please open it up for questions.
Of course, if anyone would like to register a question. Please press star followed by one on your telephone keypad.
If you would like to withdraw your question. Please press star slipped by Chi Wen preparing to ask a question. Please ensure you all need to likely to stop slipped by one on your telephone keypad to register a question.
Our first question today comes from Chris Robertson from Deutsche Bank. Chris. Please go ahead. Your line is open.
Hey, good morning, lowest and Jeff Thanks for taking the time to take our questions. This is around the 2023 off hire days guidance for Q3, it looks like it looks like it ticked up just slightly.
Since the last update so I was wondering if this is due to pulling forward any dry docking into the third quarter or if this is due to just some delays that are out there.
Some of our dry dockings.
The second quarter.
Got pushed into the third quarter.
That I think is our only change isn't it though.
I'd have to go back and look for those but we have looked at moving some forward and we've looked at also from Twain reports of the end of 'twenty three and then also some of them moved it later in the year. So we've got a beautiful.
And the third quarter, we anticipate.
Hopefully this will mark the low point of the year and we expect you know pick up in rates in the fourth quarter. So that's you know the a bit of a concentration there.
Yeah that makes sense thanks for that.
And my second question is just around the Corpus Christi ship Channel Dredging project do you think this will have any impact on the wiring business or could it be offset by maybe some more positive impact on VLCC demand.
You know I think the project has moved.
Word.
Very successfully you know it is still the case that you know you can now loaded Suezmax and then pop up to a VLCC that has been the case for the last couple of years, you still need an under keel clearance you know that that the channel dredging.
Allows for.
Nice safety level. So we don't really see a big impact on the lighting business, except for the fact that Corpus Christi is just increasingly busier and that actually increases the amount of exports from that port and consequently, some of them.
<unk>.
Yes, it seems like it's good all around for all segments. Okay. Yeah. Thank you very much I'll turn it over.
Thank you Chris.
Thank you very much. Our next question today comes from I'm on milk from Jefferies. Please.
Please go ahead your line is open.
Hi, Louis and Jeff Good morning.
Wanted to ask about I feel like a lot of times I'm asking you about the panamaxes, but you.
Clearly you've ordered two LR once they've got a pretty attractive delivery schedule I'd say for 2025.
Clearly that piece of your business has done really well and it doesn't it doesn't really seem to be feeling the effects of seasonality or the OPEC cuts and just looking at your average is so far this year at 68000 in the first half.
It seems like that's probably at least perhaps double with the broad LR one market average has been.
So across your fleet, that's a $50 million, if we calculate that or just over $1 a share so pretty meaningful outperformance, especially for <unk> for <unk> for for your guys. My question is.
Are there risks that owners start to bring vessels into this niche market in crowd out the premium.
<unk> been able to consistently achieve here over the past several quarters.
Well I would say all more than I think the base trade.
In the Americas on these vessels and in this class you know as you know also.
Also benefited from you know what the overall tanker market, especially the mid sector of the fleet.
And he has ton miles with all of the sanctions and the tree.
That has benefited us, but you know there are a lots of panamaxes are engaged industry. It is an aging sector. The overall trade is strong and we're supporting our joint venture and making sure that she ways going forward.
Nearly 20 years in 2025, it'll be 20 years that we've been in this joint venture and it's been very successful.
And we look forward to supporting that trade, our customer base and our partners.
Thanks, Louis and it sounds like you clearly you're ordering those two ships to perhaps.
Maybe get deeper into that trade.
And in terms of say.
Looking at our broader fleet renewal in general.
I guess, where we've seen a bit more of your activity recently in terms of adding or.
Kind of just been in the LR ones. How are you thinking about the <unk> as it is right now.
Any plans to reinvest in that segment.
As you think about that due to new building similar to the LR ones makes sense or the opportunities that you think maybe more appropriate in the secondhand market any color you can give there.
I mean or you know what I would say is that you know we have been highly selective so you're really looking for you know in an environment, where we do feel that cyclically asset level value levels are high.
We're looking for those opportunities where its strategic.
And <unk>.
Overall fundamentals are very strong you know what the Vlccs that we just took delivery of any panamaxes or LR ones that we just ordered those two sectors, having common their order book is 2%.
And I think that's very strong.
I think that as we look at our broader sectors.
One of the beauties of being diversified and being present in all of these different markets as having more in depth knowledge about all of those fundamentals.
And we're looking for the opportunities to provide a strong return and.
That may be an EMR its going forward, it's something that we will continue to study, but it's not something that were teed up for today.
Yeah.
Thanks, Louis Thank you.
And just one final just quick follow up you were just highlighting the profit share on the on those three vlccs.
They are based off of the TD three.
Is that basis, just general bunker fuel or is that the LNG price.
Do you feel component.
Yeah.
Derek just alone our chief commercial officer is going to handle that.
Mark it's Derek.
Yeah, it's based on VLSI Boe pricing, not LNG pricing, but in the negotiation.
With charter, we were able to work out.
Some advantages to that BLS it felt pricing.
Got it okay, Thanks, Derek and thanks Louis.
Thank you.
Thank you.
Next question comes from Liam Burke from B Riley Ma'am. Please go ahead your line is open.
Thank you and good morning, Louis Good morning, Jeff.
Good morning Liam.
Last the Suezmax are out earning the vlccs.
Is that a function of the redistribution of our crude supply and do you think that will continue.
Yes, Derrick I'll take that.
Hey, Liam it's Derrek here.
That's a function.
That's a function of.
Trading patterns around.
Around the Russian invasion of Ukraine, where we've seen the mid sector Suez in the Africa and as long as you're talking about the other ones sort of outperform.
The larger crude so we expect that to continue while we have these.
Continued hostilities in Europe .
Great.
Jeff on the capital allocation side.
How much does new bills. After we've after you ordered two new LR twos had a new builds come in and balancing your allocation of capital now.
Well I think flow is.
You touched on it you know.
If we look at.
Assets today, they're generally at the high end as of this cycle or pricing as we know so when theres going to be a new building.
If there has to be a new building.
Allocation is going to be a specific value proposition and that's what we found with respect to these are what's is that they they work out well taking into account the financial metrics of making them conversion ready yet even considering in a conversion in the future.
In the DCF. So that's a specific value proposition, so I don't as long as set out well.
Evaluate that in other sectors, but we're not expecting anything.
At this time.
Great. Thank you Jeff Thank you Derrick.
Okay.
Yeah.
Thank you.
Next question comes from Ben Nolan from Stifel. Please go ahead. Your line is open.
Yeah, Thanks, Hey, guys good quarter.
Actually if I could just follow up to you were just talking about Jeff on the AR on the LR once that you ordered their LNG.
LNG ready I'm curious.
You guys trade, there isn't a pretty distinct pattern.
Was there any thought about actually making them LNG.
And.
Why not just.
Just to go ahead and go full tilt on that.
But let me ask one of my colleagues to answer that question, Yes, our chief operational officer and head of sustainability built in Eugene and you would just highlight bill if you would.
How are you preparing us with this order for multi fuel T shirt.
So.
Thank you.
It's my responsibility to lowest and Derek is to provide them with safe reliable quality ships to trade and as we look forward as to how those ships may trade right and as the rules evolve and the regulations change we kind of consider imo's latest.
The announcements and tightening of restrictions.
We wanted to make sure that we're prepared for a multitude of different scenarios. So these ships can operate on biofuel is a drop in fuel we have made considerations in the design for the potential for carbon capture if that becomes the viable logistical.
Technology viable technology, and then we have the ability to also consider the LNG as a fuel.
You know what.
Tried to do is make the shifts as flexible as possible. So that Derek has the ability to trade them.
In whatever way he wishes to do so so I realize it's sort of answered all the questions there.
Yes, so bad it's Jeff again.
As you know people can talk about whatever something future drill ready.
And that can be not much of that can be fully fleshed out program and what you hear what we got to this cases to have a lot of optionality built into these shifts and we factored in the future cost of that into our decision making about stable.
Hope that answers your question.
No that's helpful.
And actually if I could just.
I I assume even price that her for something like an hour one what's the incremental cost of having it be LNG equipped versus just ready.
Any framework around that.
Yeah.
Okay.
Maybe what I would say is the one of the distinctions.
That bill led the team to achieve is that we have a classification.
Right go ahead bill.
That were certified for to carry LNG with the.
The conversion well.
Oh, Yeah, I mean, it's important that that debt.
Dual fuel ready, it's not just lip service correct, that's exactly right.
So yeah, I mean, but even beyond that right. So that the actual equipment is.
Certified has been on other ships converted and provided or operates on.
You'll see also the boilers. The engine main engine generators can all do that and are sized for that future service right. So that's a key distinction.
Specifically that the adder for it to deliver that ship in the market today is dual fuel somewhere that the 12% to $13 million range.
Yes, we estimate it would be a cost, but but again then we prepared for that in the future. We are not undertaking that today.
Yeah.
I understand just trying to just I'm just trying to frame in the value proposition a little bit but I appreciate that.
My last question.
Again he is our.
Maybe a little bit more on the west coast with the with the <unk>.
Particularly with EMR.
All over.
Both the Gulf and the Pacific Coast.
Been a lot of noise about Panama, and congestion and low waters and everything else.
Is that having any specific impact on on the business that you guys do and have you have you thought at all about sort of.
Or.
If not then it.
I'd be curious to hear that but if it is any sense of.
How you would quantify what that impact us.
You know the Panama Canal for the trading within the joint venture of Panamax International.
Is an integral piece of the trade groups.
We are constantly calling there and Derek do you want to talk about the delays I mean.
Ben's point Theres been the.
I think that Youre speaking specifically about the most recent.
Building delays at the Panama Canal yet.
Well, yes, I mean, if you're talking about.
For months now, but it's just getting worse and worse right.
Right.
In some instance, that's right.
Yes, we are.
We have.
We have seen increasing delays for both EMR.
And the Panamax is I think the delays at the Neocon now have grown.
Larger than at the field being restricted canal.
So that's why longer term, we built the LR ones with the $32 two meter beams. So they can continue to use the older Panama Canal.
But some of the delays have had an impact on the Tcs.
As we picked up longer weighted delays to go through.
So we've seen that in one instance, we send a shift from.
From Argentina over to the West Coast and Didnt utilize the canal, we went around Cape Horn.
I think that chart.
The teams have to play that play that game of delay versus cost.
And in each and every voyage and you've seen it impact us.
Interesting okay.
That does it for me and again, thanks, and good quarter guys.
Thank you.
Thank you.
Our last question is from Sharif Al Macao, Rob Me from BT I G. Sharif. Please go ahead your line is open.
Yeah.
Good morning, Thanks for taking my question.
Hum.
Realize it's a bit early to see the full impact but on the dark pool trading Russian crude are you seeing tankers leave that pool in return to the regular trade as east Asia started buying more middle eastern crude.
Is that something that can happen quickly or will you have a lot of visibility as that unfolds.
Sure Hi, it's Eric.
Derek Salone again, maybe I can I can answer this one.
Louis touched on it in our in our remarks I think yes.
Crude has increased overall Urals crude has increased and we're starting to see urals crude above that.
There's a differentiation within within the Russian trading fleet Theres been gratefully, who are more comfortable sanction busting. If you will will carry crude at any cost.
And then there's the compliant group of owners, who are willing to load, Russia, Unlike us, but who are willing to load Russia.
Provided in accordance with the price cap that set.
<unk>.
As the price goes up.
We.
Some of those shifts come back.
They don't come back necessarily completely efficient, though because when they come back there's a lot of customers a lot of charters, who are not keen to say shifts that have called Russia.
So they'll have to take.
Take disadvantaged business.
Clean up their cargo history, So I think to your point, Sirius and it'll take a little bit of time to see.
How that impacts the market.
That's helpful things that really I'm, just trying to kind of gauge the volatility there.
And then and then you exercise to repurchase options during the quarter.
Going forward, how are we thinking about extra.
Exercising more sale and leaseback repurchases versus other parts of the capital allocation strategy.
Yeah, Hi, it's Jeff.
I think that the.
It's probably.
The last of the repurchases you might see for a while just based on the terms of the other sale leasebacks that are out there.
So nothing imminent and as we said in our remarks, we will look at the whole portfolio of other debt instruments, we have.
In terms of this incremental debt prepayment that where we've been doing it and we will continue to do that as it nicely brings down our cash breakeven so.
It will probably be spent somewhere else in the debt portfolio.
Okay. Thanks for taking my question.
Thank you.
Thank you.
And a reminder, if anyone would like to register a question. Please press star followed by one on your telephone keypad now.
We have no further questions. So I'd like to hand back to Lewis for any closing remarks.
Thank you very much I want to thank everyone for joining us today on our second quarter conference call.
And a very strong quarter. Thank you very much.
Yeah.
Thank you everyone for joining today's call you may now disconnect your lines and have a lovely day.
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