Q3 2023 Pangaea Logistics Solutions Ltd Earnings Call

Good morning, My name is Britney and I will be your conference operator today.

Speaker 1: Good morning. My name is Brittany and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangea Logistics Solutions third quarter 2023 earnings teleconference. Today's call is being recorded and will be available for replay beginning at 11 a.m eastern standard time.

At this time I would like to welcome everyone to the Pangaea Logistics solutions third quarter 2023 earnings teleconference. Today's call is being recorded.

I'll be available for replay beginning at 11, a M Eastern standard time.

Speaker 1: The recording can be accessed by dialing 800-839-7414 for domestic and 402-220-6068 for international. All lines are currently muted and after the prepared remarks there will be a live question and answer session. If you would like to ask a question during the Q&A segment, please press star 1 on your phone.

The recording can be accessed by dialing 808, 397414 for domestic and 4022206068 for international.

Lines are currently muted and after the prepared remarks, there will be a live question and answer session. If you would like to ask a question during Q&A during the Q&A segment. Please press star one on your phone.

Speaker 1: If your question has been answered, you may remove yourself from the queue at any time by pressing star 2. We do ask that you pick up your handset for optimal sound quality. It is now my pleasure to turn the floor over to Noel Ryan with Valum.

If your question has been answered you may remove yourself from the queue at any time by pressing star two what did you ask would you pick up your handset for optimal sound quality. It is now my pleasure to turn the floor over to Noel Ryan with Valeo Vallum.

Speaker 2: Thank you, operator, and welcome to the Penn Geologistics third quarter 2023 results conference call.

Advisors. Thank you operator, and welcome to the Pangaea Logistics third quarter 2023 results conference call.

Speaker 2: we can call with me today is the eo mark for now to keep chief financial officer gianni dill's your e and he o that's peterson

Leading the call with me today are CEO, Mark Foley now ski Chief Financial Officer, Gianni del Signore and C O O that's Petersen.

Speaker 2: Today's discussion contains forward-looking statements about future business and financial expectations.

Today's discussion contains forward looking statements about future business and financial expectations.

Speaker 2: Actual results may differ significantly from those projected in today's forward-looking statements.

Actual results may differ significantly from those projected in today's forward looking statements.

Speaker 2: due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC.

Due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC.

Speaker 2: accepted required by law we undertake no obligation to update are for looking to Immediately.

Except as required by law, we undertake no obligation to update our forward looking statements.

Speaker 2: at the conclusion of our prepared remarks will open the line for questions and with that i would like to turn the call over to mark

At the conclusion of our prepared remarks, we will open the line for questions and with that I would like to turn the call over to Mark.

Yeah.

Thank you know and welcome to those joining us on the call and webcast today.

Speaker 3: Thank you, Noel, and welcome to those joining us on the call and webcast today.

Speaker 3: After the market closed yesterday, we issued a release detailing our third quarter results.

After the market closed yesterday, we issued a release detailing our third quarter results.

Speaker 3: The third quarter represents a seasonal peak in demand levels across our Arctic trade.

The third quarter represents a seasonal peak in demand levels across our Arctic trades.

Speaker 3: Our global fleet of ICE class vessels were fully utilized in the period. Fleet utilization and our deep portfolio of COAs contributed to an earned TCE rate that exceeded the broader market index by nearly 50%.

Our global fleet of ice class vessels were fully utilized in the period fleet utilization and our deep portfolio of C. O as contributed to an earn TCE rate that exceeded the broader market index by nearly 50%.

Speaker 3: Our TCE earned was $15,748 per day for the three months ended, September 30, 2023.

Our T. C earned was $15748 per day for the three months ended September 32023.

Speaker 3: Compared to an average of $24,107 per day for the same period in 2022, has the dry bulk markets absorbed the release of capacity from prolonged pork congestion?

Compared to an average of $24107 per day for the same periods in 2022.

The dry bulk markets absorb their release of capacity from prolonged port congestion.

Speaker 3: Volatility continues in the markets as market index fluctuations are being caused by ongoing geopolitical uncertainty.

Volatility continues in the markets as market index fluctuations.

Being caused by ongoing geopolitical uncertainty.

Okay.

Speaker 3: On the plus side, the markets in which we directly participate, including construction aggregates and cementitious materials, were strong of course across major customers and regions we served in the period.

On the plus side the markets in which we directly participate including construction aggregates salmon tissues materials were strong of course cross major customers and regions. We served in the period.

To that end as of November seven we booked over it.

Speaker 3: To that end, as of November 7th, we've booked over 2,700 days for the fourth quarter at an average rate of $19,000 per day, a testament to the value and durability of our cargo-focused business model.

2700 days for the fourth quarter at an average rate of $19000 per day.

A testament to the value and durability of our cargo focused business model.

Speaker 3: Entering 2024, the bulk shipping market continues its volatile path. However, growth in the global dry bulk fleet remains low as new build activity is limited.

Entering 2024, the bulk shipping market continues its volatile path however growth in the global dry bulk fleet remains low as Newbuild activity is limited.

Speaker 3: For our part, we believe our premium rate model and long-term COAs position us to execute on our strategy.

For our part we believe our premium rate model and long term C O as position us to execute on our strategy.

Given our continued confidence in the performance outlook for our business our capital allocation priorities remain unchanged.

Speaker 3: Given our continued confidence in the performance outlook for our business, our capital allocation priorities remain unchanged.

Speaker 3: Over the last year, our operating cash flow conversion has been an excessive 70% of adjusted EBITDA. And we've utilized this cash generation to pay down more than 20 million in debt.

Over the last year, our operating cash flow conversion has been in excess of 70% of adjusted EBITDA and we've utilized this cash generation to pay down more than $20 million in debt.

We've also reinvested approximately $50 million in our business through acquisition and fleet renewals.

Speaker 3: We've also reinvested approximately $50 million in our business through acquisition and fleet renewals, while returning more than $18 million to shareholders through our quarterly cash dividend.

Returning more than $18 million to shareholders to our quarterly cash dividend.

Speaker 3: We remain committed to a consistent return of capital program and continue to view our quarterly cash dividend as an integral part of our investment thesis, one that emphasizes total shareholder return.

We remain committed to a consistent return of capital program and continue to view our quarterly cash dividend is an integral part of our investment thesis one that emphasizes total shareholder returns.

Speaker 3: In October , we entered into an agreement to sell the 2006-built Supermax

In October we entered into an agreement to sell the 2006 built Super Max bulk.

Speaker 3: bulk Trident for $9.8 million. This sale is aligned with our strategic focus on owning and operating a newer, more efficient fleet consistent with our approach to regular fleet

Bulk tried and $49 $8 million.

This sale is aligned with our strategic focus on owning and operating a newer more efficient fleet consistent with our approach to regular fleet.

Refreshment.

Speaker 3: In 2024, we will evaluate additional vessel acquisitions into VISTICHERs while supporting the unique requirements of our customers on an on-demand basis.

In 2024, we will evaluate additional vessel acquisitions and divestitures, while supporting the unique requirements of our customers on an on demand basis.

Before I turn the call over to Johnny I want to note that our third quarter was our first full quarter of ownership.

Speaker 3: Before I turn the call over to Johnny, I want to note that our third quarter was our first full quarter of ownership of the port and logistics business that we acquired in June .

Of the Port and logistics business that we acquired in June.

Speaker 3: The business is performing well, and we continue to work diligently on expanding that business with our current customer base. While seeking out opportunities to leverage the growing economies of scale, between our onshore and offshore asset.

The business is performing well and we continue to work diligently on expanding that business.

Current customer base.

Seeking out opportunities to leverage the growing economies of scale between our onshore and offshore assets.

Speaker 3: With that, I'll hand it over to Johnny for discussion of our third quarter financial halt6

With that I'll hand, it over to Johnny for a discussion of our third quarter financial results.

Speaker 4: Thank you, Mark, and welcome to all those joining us today.

Thank you Mark and welcome to all those joining us today.

Speaker 4: Our third quarter financial result continued to emphasize the flexibility of our business model as we were able to maximize returns through the utilization of our specialized fleet of ice class vessels which were employed a long-term contract business during the summer IECs.

Our third quarter financial results continue to emphasize the flexibility of our business model as we were able to maximize returns through the utilization of our specialized fleet of ice class vessels, which were employed a long term contract business during the summer ice season.

Third quarter TCE rates were approximately 15748 per day.

Speaker 4: Third quarter TCE rates were approximately 15,748 per day. A premium of 49% over the average published market rates for supermax and panamax vessels in the period, which is supported by our ice class fleet, our long term COAs and forward bookings, which lock in rates for future cargo performance.

A premium of 49% over the average published market rates for Superman and Panamax vessels in the period, which is supported by our ice class fleet.

Our long term seaways and forward bookings, which lock in rates for future cargo performance.

Speaker 4: Our adjusted EBITDA declined year over year to 27.9 million.

Our adjusted EBITDA declined year over year to $27 9 million.

Speaker 4: However, we held our adjusted EBITDA margin approximately flat year over year due to our flexible, chartered-in strategy and active cost management efforts amid inflationary pressures.

However, we held our adjusted EBITDA margin approximately flat year over year due to our flexible chartering strategy and active cost management efforts amid inflationary pressures.

During this period of softer market rates, our ability to opportunistically adjust our chartered in fleet, coupled with lower market rates served to reduce our charter hire expense by nearly 50% year over year from an average of $21226 per day in the third quarter of last year.

Speaker 4: During this period of software market rates, our ability to opportunistically adjust our chartered in fleet, coupled with lower market rates, served to reduce our charter higher expense by nearly 50% year over year. From an average of $21,226 per day in the third quarter of last year to $10,800 per day in the third quarter of 2020.

Year to $10800 per day in the third quarter of 2023.

Speaker 4: Furthermore, vessel operating expenses net of technical management fee decreased by 12% year over year from an average of $6,471 per day last year to $5,706 per day in the third quarter of 2023.

Furthermore, the vessel operating expenses net of technical management fees decreased by 12% year over year from an average of $6471 per day last year to $5706 per day in the third quarter of 2023.

Speaker 4: As I mentioned, the decrease was driven by prudent operating cost management as well as cost incurred in the prior year related to the change in technical managers which were not incurred in the current year.

As I mentioned, the decrease was driven by prudent operating cost management as well as cost incurred in the prior year related to the change in technical managers, which were not incurred in the current year.

Speaker 4: In total, our reported GAAP net income attributable to Tangier for the third quarter was $20.2 million, or $0.42 per diluted share, compared to $19.8 million, or $0.42 per diluted share, in the third quarter of last year.

In total our reported GAAP net income attributable to Pangaea for the third quarter was $20 $2 million or 42 cents per diluted share.

Compared to $19 8 million or 42 cents per diluted share in the third quarter of last year.

Excluding the impact of derivative instruments.

Speaker 4: excluding the impact of derivative instruments, as well as other non-gap adjustments, our reported adjusted net income attributable to Tangiia during the quarter was 14.4 million, or 32 cents per diluted share, a decrease of 8.9 million, or 20 cents per diluted share versus the third quarter of last year.

As well as other non-GAAP adjustments our reported adjusted net income attributable to Pangaea during the quarter was $14 4 million or 32 cents per diluted share.

A decrease of $8 9 million.

Or 20 cents per diluted share versus the third quarter of last year.

Moving on to the cash flows.

Speaker 4: Total cash from operations decreased by 16 million year over year to 16.3 million due to the decrease in TCE rates.

Total cash from operations decreased by $16 million year over year to $16 3 million due to the decrease in TCE rates.

Speaker 4: At quarter end, the company had 87.4 million in cash and total bet including finance lease obligations of approximately 276.

At quarter end, the company had $87 4 million in cash.

In total debt, including finance lease obligations of approximately $276 million.

Speaker 4: Of the $276 million in debt, approximately $20 million became current at the end of the second quarter, representing balloon payments that are due in May of 2024.

Of the $276 million and approximately $20 million became current at the end of the second quarter, representing balloon payments that are due in may of 2024.

Speaker 4: This credit facility is currently locked in at a 6th rate of 3.96%. And we expect to refinance this as we approach maturity in May of 2024.

This credit facility is currently locked in at a fixed rate of 396%.

And we expect to refinance this as we approach maturity in 'twenty, two and May of 2024.

Speaker 4: During the quarter, the impact of higher interest rates was relatively muted in our results, due to our fixed rate and capture rate debt, as well as benefits from interest yielding deposits, which generated nearly $1 million in interest income.

During the quarter the impact of higher interest rates was relatively muted in our results due to our fixed rate in capturing that as well as benefits from interest yielding deposits, which generated nearly $1 million in interest income.

Speaker 4: At the end of the third quarter of 2023, the ratio of net debt to trailing 12-month adjusted Ibra was 2.2 times.

At the end of the third quarter of 2023, the ratio of net debt to trailing 12 month adjusted EBITDA was two two times.

Speaker 4: In conclusion, our vertically integrated shipping and logistics model continued to deliver above market performance, supported by strong execution of our specialized ICE class fleet, our chartering strategy, continued fleet expansion, and a disciplined capital allocation.

In conclusion, our vertically integrated shipping and logistics model continued to deliver above market performance supported by strong execution of our specialized ice class fleet. Our chartering strategy continued fleet expansion and a disciplined capital allocation.

During periods of market volatility.

Speaker 4: During periods of market volatility, we believe that our business model will continue to deliver above market returns in consistent cash flow generation. With that,

We believe that our business model will continue to deliver above market returns and consistent cash flow generation.

With that we will now open the line for questions.

Speaker 1: 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 and one, if you would like to ask a question. And we do ask that you please pick up your hands to a little optimal sound quality. We'll take our first question from Liam Burke with B. Riley. Your line is now open. Thank you. Good morning, Mark. Morning, Johnny.

At this time, if you would like to ask a question. Please press star one on your Touchtone phone you may remove yourself from the queue at any time by pressing star to once again that is star. One if you would like to ask a question and we do ask that you. Please pickup your handset to allow optimal sound quality well take our first question from Liam Burke with B Riley.

Your line is now open thank you.

Good morning, Mark Good morning, Johnny.

Hello, Liam nice it's nice to hear from you. Thank you.

Speaker 5: Hello, Liam. Nice to hear from you. Thank you. You too. You did sell one vessel this quarter. You said 2024, you'd be looking to possibly add. Considering pricing scarce resources, how does a pipeline look for potential vessel acquisition?

You too.

You did sell one vessel this quarter, you said 2024, you'd be looking to possibly add.

Considering pricing scarce resources, how does the pipeline look for potential vessel acquisitions.

Well, we're hoping the.

The S&P market.

Speaker 3: S&P market takes a little pause here and will be opportunistic when it comes to adding back to the fleet. We've got a pretty strong business here. We see upside in the long term for us and we're not going to shrink the fleet. We're going to try to grow it a little bit.

Takes a little pause here and.

We'll be opportunistic when it comes to adding back to the fleet.

We've got a pretty strong business here.

We see a.

Side in the long term for us and where we're not.

Shrink that LIBOR is going to try to grow it a little bit.

Speaker 5: Okay, and I mean, would you consider, I mean, do you see opportunity to grow the fleet more than one vessel next year or I mean, is it just going to, you're just going to work the S&P market as it comes to you?

Okay.

And I mean would you consider I mean.

Do you see opportunity to grow the fleet more than one vessel next year or I mean is it just kind of you just got to work the S&P market as it comes to you.

Speaker 3: I think the latter, we've always been opportunistic in our purchases. We've tried to build a cargo base before we go to market to purchase ships. And when we purchase ships, we try to do it in times when it serves a little lower than it is higher.

I think that I think the latter.

Always been opportunistic.

And our purchases.

We've tried to build a cargo base before we go to market to purchase ships. When we purchased shifts so we try to do it.

And in times when.

When.

It was a little lower than it is higher.

Speaker 5: Great. And on the ports operations, it seems to be contributing nice stably, but you mentioned in your comments that you were looking to grow organically from new and existing customers, but do you see any opportunities to add additional ports to your, for lack of a better word, servicing portfolio?

And on the ports operations it seems to be contributing nice stable EBITDA you mentioned in your comments.

We're looking to grow organically from new and existing customers, but.

Do you see any opportunities to add additional ports to your for lack of a better.

The servicing portfolio.

Speaker 3: We do, we do, we're actively looking at properties that become available in places where our ships go. And working with our customers in ports and areas where they take in cargo. So.

We do we did where we're actively looking at at.

At properties that become available in places where our ships go.

And and working with our customers in in ports in areas where were they taken cargo so.

So yes, we are looking to expand that business, where it makes sense for us where we can add add services to our basic service, which is ocean Ocean transportation, but sometimes it goes the other way if we've got a customer taking in cargo and in specific port they might ask us to look at the ocean.

Speaker 3: So, if we are looking to expand that business, where it makes sense for us, where we can add services to our basic service, which is ocean transportation. But sometimes it goes the other way. If we've got a customer taking in cargo and in a specific port, they might ask us to look at the ocean transportation also. So, we can go both ways for us and it has.

<unk> also so Greg go both way wastewater.

It has.

Thank you Mark.

Speaker 1: Thank you and once again that is start and one of you would like to ask a question. We'll take our next question from a post-brat with Alliance Global Partners. Your line is now open.

Thank you and once again that is star one if you would like to ask a question we will take our next question.

Bright with Alliance Global Partners. Your line is now open.

Speaker 6: Good morning, Mark. Good morning, Johnny. And I assume Good morning, Matt. Can you talk about

Good morning, Mark Good morning, Johnny and I assume good morning, Matt.

Can you talk about Enbrel.

Speaker 6: Can you just talk about the Steve Adoring operation?

Can you just talk about the stevedoring.

Operation.

Speaker 6: Were there any startup costs in that operation that put the gross margin at 11% and what sort of a good run rate to use going forward on that business line?

Were there any store.

<unk> got cost in that operation.

Put the gross margin at 11%.

What sort of a good run rate to use going forward on that on that business line.

Well the stevedoring business.

Speaker 3: Well, the stevedoring business doesn't come in in a steady stream. Over time, of course, it's a pretty steady business. But ship schedules, cargo schedules, whether a cargo owner engages us to do stevedoring in, say, Fort Lauderdale is or not. They might pick another available stevedor. It depends on just timing of the ships coming in and going.

<unk> come in and a steady stream.

Overtime of course, it's a pretty steady business, but ship scheduled cargoes schedules, whether whether a cargo owner engages us did you see the during an NSA Fort Lauderdale.

As is.

They might pick another available stevedore.

It depends on timing of of the ships coming in and going out.

Speaker 7: so

So so.

Speaker 3: In terms of steady, it's steady over time. We've got contracts to service certain customers in various places, but it is a little bit lumpy.

Steady.

Steady over time, we've got contracts.

The service certain customers in the various plays.

But it is a little bit lumpy.

Speaker 4: In terms of startup, I don't think there were any significant startup costs. Yeah, there were some startup costs, but Paul, they hit our GNA. So part of the reason our GNA was a bit higher in Q2.

In terms of startup.

Any significant.

Yes.

There are some startup costs, but probably they were.

They hit our G&A, so part of it part of the reason our G&A was a bit higher in Q2.

Speaker 4: is a lot of the legal fees and startup costs that we incurred closing the acquisition were not capitalized and rather they were expensed through G&A. So you saw a little bit of a spike in our G&A that quarter. And then there's, you know, we now have intangibles, right? We have our goodwill that hits our balance sheet and we have intangibles we acquired through the acquisition, including customer contracts.

There is a lot of the legal fees and start up costs that we would we incurred.

Closing the acquisition.

Not capitalized and rather they were expense through G&A. So you saw a little bit of a little bit of a spike in our G&A.

Order.

And then there is.

We now have intangibles right, we have our goodwill that hits, our balance sheet and we have intangibles, we acquired through the acquisition, including customer contracts.

Speaker 4: licenses, et cetera, which are being depreciated and amortized. So there is more that's.

Licenses et cetera, et cetera, which are being depreciated and amortize. So there is there is more.

That's hitting the P&L.

Speaker 4: besides just the terminal revenue and we have terminal and stevedore expenses, but some of those were one time and obviously other ones are flowing through depreciation, not affecting EBITDA.

Besides just the terminal.

<unk> revenue and we have terminal in stevedore expenses.

But some of those were one time.

And obviously the other ones there is flow through depreciation.

<unk> EBITDA.

Okay and so.

Speaker 6: Okay, and so you know relative to the

Relative to that.

Speaker 6: The third quarter, how does the fourth quarter look right now? We're close to halfway through it. Can you just give me sort of a color on how that.

The third quarter, how does the fourth quarter look right now.

We're close to halfway through it can you just give me sort of a color on how you know that.

<unk>.

Speaker 3: Steve Dorin terminal operation looks right now relative to the third quarter. It's important to determine those operations specifically you say.

Named Darren terminal operation looks right now relative to the third quarter.

It's important parts of the terminals operations, specifically you said.

Yes.

Just trying to figure out.

Speaker 6: Where I know it's a very small part of the business right now, but it's fairly new and I'm trying to appreciate sort of how to model.

Yeah.

I know, it's a very small part of the business right now, but it's fairly new and I'm trying to appreciate sort of.

How to model it.

Speaker 3: We get a schedule of coming ships here.

We get a schedule.

Coming.

Ships.

Speaker 6: It only goes out about a month, but I think we'll be pretty active over the next month or two. Okay. That's all right, Lurie. Why don't we move on to your forward cover.

Well the only goes out about a month.

But I think we'll be pretty active over the next the next month or two.

Okay Alright.

When we move on to your your forward cover.

Speaker 6: You know, relative to the second or the, you know, at the time of the second quarter call, you know, the days that you look for the fourth quarter are down, you know, a little bit modestly, like, 20%, but the rates a lot higher. Can you just talk about that dynamics of.

Relative to the second or in the at the time of the second quarter call.

The days they can flip through the fourth quarter are down a little bit modestly like 20%, but the rates a lot higher can you just talk about that dynamic.

Speaker 6: your forward cover right now and you know that 2,715 days that you've booked.

Your forward cover right now.

<unk> 27.

<unk> 15 days that you booked.

Speaker 6: Where do you think how many how many shipping days do you think you'll have total in the fourth quarter and just

Where do you think how many how many shipping days do you think youll have total in the fourth quarter and just keep mats can you give us sort of dynamic.

Speaker 6: Matt, can you get the sort of dynamic of how the, were you able to capture the run-up and rates in September , October , and the rest of the quarter is going to be a little weaker, or sort of just, if you give us an idea of the dynamics of your forward cover.

How the where you're able to capture the run up in rates in September October.

The rest of the quarters, it's going to be a little weaker or sort of just.

It's an idea of the dynamics.

Before I cover at this point.

So Paul Paul Paul I'll start with with the.

Speaker 4: So, Paul, I'll start with the, you know, as far as what we published and sort of guided to for the fourth quarter, which was the 19,000-a-day rate in about 2,700 days, that, you know, what we're estimating for the quarter, I think it's similar, we're about 45 vessels in that ballpark for the fourth quarter. So, the 2,700 days, obviously, is just a, you know,

As far as.

What we published in sort of guided to for the fourth quarter.

Which was the 19000 a day rate.

In about 2700 days.

You know what we're estimating for the quarter I think its similar where we're about 45 vessels.

In that ballpark for it for the fourth quarter. So the 2700 days, obviously is just you know.

Speaker 4: snapshot for what has been performed and booked through November 7th, or November 6th rather.

A snapshot.

For what has been performed and booked through November 7th of.

Our November six rather.

Speaker 4: So there are definitely, you know, there's certainly days that that.

So they are definitely theres certainly days that that will still come into the quarter based on you know we can continue to operate around that 45, it's probably coming down from a high from a high of 51 shifts down to about 45% to 48.

Speaker 4: that will still come into the quarter based on, you know, we can continue to operate around that 45. It's probably coming down from a high from a high of 51 ships.

Speaker 4: So that's what the quarter, that's what the quarter will look like.

So that's what the quarter, that's what quarter will look like.

Speaker 8: As far as rates, we're happy to see it. We had a great start going into the fourth quarter. We have booked a lot of forward cargo, so we think we're pretty well positioned for the fourth quarter. But I'll let Mads give a bit more color on that. Yeah. I think, you know, Poe, it's driven primarily by our Arctic business, which sort of extends from the third quarter into the fourth. That for sure is a positive contributor to that.

As far as rates were.

We're happy to see it.

We had a great start going into the fourth quarter, we have booked a lot of forward cargo.

So we think we're pretty well positioned for the fourth quarter, but I'll, let I'll, let Matt give a bit more color on that.

I think Paul was driven primarily by all of our oxo business, which sort of extends from the third quarter into default.

Sure. So it's a positive contributor to that but in addition, we do have.

Speaker 8: But in addition, we do have quite a bit of non-ICE business on the books that we are performing at the moment. We will have that.

You know quite a bit of you know none.

<unk> business on the books that we are performing at the moment, we will have that in Q4 as well.

Speaker 8: in Q4 as well. But yeah, the market is obviously softer than those numbers, so that won't potentially impact.

Yes, the market is obviously soft on those in those numbers. So you know.

Essentially impacted as well.

Yeah.

Okay, Great that's helpful and then.

Speaker 6: Okay, great. That's helpful. And then, you know, Johnny, you highlighted charter hire expenses were a lot lower year over year, you know, a lot lower than what I expected.

Jonny highlighted charter hire expenses were lower year over year.

Sure than what I expected.

Speaker 6: Can you talk about the fourth quarter run rate so far for charter hire expenses? You're going to charter in less vessels. It looks like you're going to have about 500 less days in the fourth quarter versus the third quarter, but can you just talk about charter hire days as far as just maybe a gross number or even on a per day basis?

Can you talk about the fourth quarter run rate so far for charter hire expenses, you're going to charter in.

That's what it looks like Youre going to have about $500 less days in the fourth quarter versus the third quarter, but can you just talked about.

Charter hire days as far as just maybe gross number or even on a per day basis.

Yes, I know this is this is sort of a lagging effect that you know that.

Speaker 4: yeah i know this is this is sort of a lagging effect that uh... you know that impacts

Impacts that impacts us in.

Speaker 4: You know, certainly it's a positive, it can be a positive and sometimes it's certainly in rising markets, you were able to charter in at lower rates and then, and then utilize those ships in those higher markets and it has that sort of inverse effect. Q3, it was, it was, it was, you know, penny, I think was our total cost for charter in, which was.

Certainly it's a positive as it can be a positive and sometimes it is certainly in rising markets.

We're able to charter in at lower rates, and then and then utilize those ships and those higher markets and it has that sort of inverse.

<unk>.

Q Q3. It was it was it was a penny I think was our total cost for charter in.

Which was.

Speaker 4: compared to that 15.7 that we earned. So we'll probably see a little bit of an uptick in our charter higher expense, but I don't expect it to increase significantly. We're still, you know, we're still.

Compared to that $15 seven that we earned so we'll probably see a little bit of an uptick in our charter higher expense, but I don't expect it to increase significantly.

We're still.

Still charters.

Speaker 4: chartering for period and have some ships coming into the fourth quarter that we had already fixed. But of course, as the market fluctuates, our charter higher expense fluctuates. But again, it's largely dependent on timing and

Chartering for period.

Have some ships coming into the fourth quarter that we had already fixed but of course as the market is the market.

Fluctuates or charter hire expense fluctuates, but it's again it's.

It's largely dependent on on timing and where the market is.

Speaker 8: Yeah, and probably if I could just add, you know, everything we do in this space is short term at the moment. We still see best value in the shorter executions on any time trial in business we do. So it's not something that will, you know, will last into several more quarters.

And Paul if I could just add everything we do in this space as short term at the moment, we still see.

Value in the short executions on.

Any time charter in business, we do so it's not something that will.

Less into several more quarters.

So.

Okay and then.

Speaker 6: Okay, and then if you talk about financing, Tianyi, can you just, am I correct in looking at the Trident, it has about 4.6 million of, you know, obligations or purchase options, so you're going to have sort of, what's the, so what's the net proceeds going to be on that?

You talked about financing Gianni could you just yeah.

Am I correct in looking at the they tried it has about $4 6 million.

Of.

Obligate on your purchase option. So you are going to happen.

What's the so what's the net proceeds is going to be on that.

We're expecting five about $5 million.

Speaker 4: about $5 million of cash derived out of that transaction. And you're right. So we have the...

Cash derived out of that transaction and Youre right we have the.

Speaker 4: We have the purchase option on, you know, it's called the purchase option, but we view it as a financing. So it's really the, you know, we'll call it the balloon payment that's due on...

We have the purchase option on it called the purchase option, but we view it as a financing so it's really the we'll call it the balloon payment that's due on.

Speaker 4: On the, on the lease and we're in the process of closing that out actually now and.

On the on the lease end.

Well, we're in the process of closing that out actually now and.

Speaker 4: We'll be ready to sell her within the end of November , early December , she'll be sold, and they'll generate about five minutes.

We'll be ready to sell her.

Within the end of November early December should be sold and they will generate about $5 million.

Okay, and then you have what little over $20 million due in the second quarter in the May timeframe. You also have the friendship lease that.

Speaker 6: Okay, and then you know, you have what little over 20 million do in the in the second quarter in the May timeframe, you also have the friendship lease that looks like matures in the third quarter September-ish.

Correct looks like matures in the third quarter September ish.

Speaker 6: Would that also be a refinancing or is that potentially a failed candidate?

Would that also be refinanced sooner or is that potentially a sale candidate.

We have the prudence that.

Speaker 4: That's also we, we, we bought, remember we bought her with no, no debt attached. So we, we have heard debt free. And then in that May facility, we have the bulk endurance that's going to be coming due. So I think the way we look at it now is, it'd probably be likely the endurance and the prudence would be our candidates and do some sort of package for those two vessels and keep the others debt free.

Also.

We bought remember we bought her.

No debt attached.

We have heard that free.

And then in that May facility, we have the bulk endurance that's going to be.

Coming due so I think the way we look at it now is.

It would probably be likely the endurance and the prudence would be our candidates.

And do some sort of package for those two vessels and keep the others debt free.

Speaker 4: Just so we can be a bit, you know, to your point in what Mark said earlier, you know, we want to be opportunistic with our vessels and if it's a sale candidate in the market.

Just so we can be a bit.

To your point and what Mark said earlier, we want to be opportunistic with our vessels and if.

If it's a sale candidate in the market.

Speaker 4: Is there then we want to be in that position? So yeah, so I think you're absolutely right, Poe, and how you're thinking about that, and how we're thinking that as that approaches maturity. I don't think.

Is there then we want to be in that position. So yes, so I think youre absolutely right Paul.

How youre thinking about that and how we're thinking that.

So as that approaches maturity.

Okay, great. Thanks, a lot.

Thank you Paul.

Speaker 1: Thank you. That does conclude today's question and answer session. I will turn the call back over to Mark Zielinowski for any additional or closing remarks.

Thank you that does conclude today's question and answer session I will turn the call back over to Mark <unk> for any additional or closing remarks.

Speaker 3: Thank you for joining us today. Have a great day and happy holiday as for Thanksgiving.

Thank you for joining us today have a great day and happy holiday.

After Thanksgiving.

Okay.

Speaker 1: This does conclude today's program. Thank you for your participation. You may disconnect at any time.

This does conclude today's program. Thank you for your participation you may disconnect at any time.

Mhm.

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Yes.

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Speaker 9: What.

Got it.

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Hello.

Oh.

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Okay.