Q3 2023 Seanergy Maritime Holdings Corp Earnings Call

Speaker 1: Thank you for standing by, ladies and gentlemen, and welcome to the Synergy Maritime Holdings Corp conference call on the third quarter and its September 30th, 2023, final service.

Thank you for standing by ladies and gentlemen, and welcome to synergies in Maritime Holdings Corp Conference call on the third quarter ended September 30 is 2023 finalists episodes.

Speaker 1: We have with us Mr. Samadit Santanis, Chairman and CEO , and Mr. Starros Gistaki, Chief Financial Officer of Synergy Maritime Holdings Corp. At this time, all participants are in a listen-only mode. There will be a question and answer session, at which time, if you would like to ask a question, please press star 11 on your telephone keypad, and you will then hear an automated message advising your hand is raised.

Not with us and he's just somebody just some tonnage chairman and CEO and Mr. Stavros get stuck Hughes Chief Financial Officer of synergy Maritime Hauling Holdings Corp.

At this time with participants are in a listen only mode. There will be a question and answer session at which time did you would like to ask a question. Please press star one one on your telephone keypad and you would've done here, an automated message as washing your hands raised.

Speaker 1: Please be advised that this conference call is being recorded today, Tuesday, November 14th, 2023. The archived webcast of the conference call will soon be made available on the Synergy website www.synergymaritime.com.

Please be advised that this conference call is being recorded today Tuesday November 14th 2023, the archived webcast of the conference call will soon be made available on the synergy website www synergy in my time Dot com. Many of the remarks today contain forward looking statements based on current.

Speaker 1: Many of the remarks today contain forward-looking statements based on current expectations.

Speaker 1: Actual results may differ materially from the results projected from those forward-looking statements.

Expectations actual results may differ materially from the results projected from those forward looking statements additional information concerning factors that countries. The extra was supposed to differ materially from those in the forward looking statements is contained in the third quarter ended September 30th 2023 earnings.

Speaker 1: Additional information concerning factors that can use the actual results to defer materially from those in the forward-looking statements is contained in the third quarter ended September 30th, 2023 earnings release, which is available on the Synergy website again, www.synergymytime.com. I would now like to turn the conference over to one of your speakers today, the Chairman and CEO of the company, Mr. Stomatits St. Thomas. Please go ahead, sir.

Which is available on <unk> website again www.

Www synergy and lights on Dot com.

I would like to turn the conference over to one of your speakers today are chairman and CEO of the company Mr. So much at some Chinese please.

Go ahead Sir.

Thank you operator.

Speaker 2: Hello, I would like to welcome everyone to our conference call.

Hello, I would like to welcome everyone to our conference call.

Speaker 2: They were presenting the financial results for the third quarter and first nine months of 2023 while also announcing the distribution of another cash dividend.

They were presenting the financial results for the third quarter and first nine months of 2023, while also announcing a distribution of another cash dividend.

Speaker 2: Starting with our commercial performance, I'm pleased to report that in the third quarter, Synergy achieved a daily timesat equivalent rate of $15,300, once again overperforming the Baltic Capes as Index by around 14%.

Starting with our commercial performance I am pleased to report that in the third quarter synergy.

Daily time charter equivalent rate of $15300 once again over performing the Baltic Capesize index by around 14%.

Speaker 2: This is a result of our strategic investment in improving the energy efficiency of our fleet, where the majority of our ships is obtaining premiums over the index, as well as our effective hedging strategy, where we locked in about 30% of our fleet in fixed rates exceeding $20,000 a day.

This is a result of our strategic investment in improving the energy efficiency of our fleet with the majority of our ships is obtaining premiums over the index as well as our effective hedging strategy, where we locked in about 70% of our fleet in fixed rates exceeding $20000 a day.

Speaker 2: Considering the performance of the Cape Size market, despite the strong demand for seaborne transportation of iron, ore, coal and bauxite in the first nine months of the year, congestion stood at a historical low level.

Concerning the performance of the Capesize market. Despite the strong demand for seaborne transportation of iron ore coal and bauxite in the first nine months of the year congestion stood at historical low levels. Therefore.

Speaker 2: Therefore, vessel utilization improved, expanding the effective fleet supply, which in turn has put severe pressure on the spot market.

Therefore vessel utilization improved expanding the effective slipped supply, which in turn has put severe pressure on the spot market.

Speaker 2: As congestion found bottom in July and August , the increased cargo flows resulted in significant supply tightness which led to a recovery in day rates to levels exceeding $30,000 per day in October .

As conditions found bottom in July and August the increased cargo flows resulted in significant supply tightness, which led to a recovery in day rates to levels exceeding $30000 per day in October.

Speaker 2: having entered the fourth quarter with 70% of our days taking advantage of the higher market were well positioned to benefit from the recent recovery of our sector.

Having entered the fourth quarter was 70% of our days taking advantage of the high end market, we are well positioned to benefit from the recent recovery of our sector.

Speaker 2: Notwithstanding the overall weak-scape market conditions which impacted our financial results for the quarter, our cash reserves remain at satisfactory level.

Notwithstanding the overall weak market conditions, which impacted our financial results for the quarter, our cash reserves remain at satisfactory levels.

Speaker 2: on that basis, our board of directors has approved another consistent quarterly cash dividend of 2.5 cents per share.

On that basis, our board of directors has approved another consistent quarterly cash dividend of $2.05 per share.

Speaker 2: Regarding fleet developments, on October 24, we took delivery of our first Newcastle Max vessel, which was renamed Titan's.

Regarding fleet developments on October 24, we took delivery of our first new customer mix vessel, which was renamed tighter ship.

Speaker 2: The vessel was acquired through a 12-month bare-bolt structure with a purchase option for synergy at the end of the charter.

Vessel was acquired with 12 month bareboat structure with a purchase option for synergy at the end of the tunnel.

Speaker 2: The vessel commenced an index-linked employment with a first-class chatter for a period of about one year at a substantial premium over the Baltic Cape Size Index. This is actually the highest premium achieved by any vessel over fleet. The addition of the Titan ship will further strengthen our ability to overperform the Cape Size Index. Combined with its attractive acquisition price, it will likely produce higher returns on cap.

The vessel commenced an index linked employment with a first class charter for a period of about one year at a substantial premium over the Baltic Capesize index.

Jackson has the highest premium achieved Diana vessels of our fleet.

The addition of a tighter ship will further strengthen our ability to over perform.

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Baidu has attractive acquisition price it would likely produce higher returns on capital.

Speaker 2: In terms of other commercial developments, we have extended various existing time charters of our vessels, while more and more ships get the increased benefit of the scrubber equipment installed in 2019 without us paying for it.

In terms of other commercial developments, we have extended various existing time charters of our vessels, while more and more ships get increased benefit of the scrubber equipment installed in 2019 without us paying for it.

Speaker 2: Similarly, within 2024, we expect more vessels to enjoy improvements in the profit sharing terms on their employment, which would provide an additional tailwind to RTC.

Similarly within 2024, we expect more vessels to enjoy improvements in our profit sharing terms under employment, which would provide an additional tailwind towards PC.

Speaker 2: In terms of guidance for Q4, about 60% of our total sleep days have now been fixed at the daily PC rate of $21,600.

In terms of guidance for Q4 about 60% of our total fleet days have now been fixed as with daily TCE rate of $21600.

Speaker 2: When applying the recent FFA rate of 15,700 for November and December on our open days, the average TCE rate for the period is expected at approximately $19,500. On a more optimistic note, if we apply the average cap size spot rate since the beginning of Q4 2023, then the resulting TCE for the period is projected to be approximately $22,800 per day.

When applying the recent necessary rate of 15700 for November and December on our open days the average TCE rate for the period is expected at approximately $19500 on a more optimistic note. If we apply the average capesize spot rates since the beginning of Q4 2023.

And then the resulting SBC for the period is projected to be approximately $22800 per day.

Speaker 2: Moving on to capital returns, our board has authorized the distribution of another regular quarterly cash dividend of 2.5 cents for the third quarter, which brings our total distributions since the commencement of our dividend program to about $1.36 per share, representing approximately 26% of our recent closing price.

Moving on to capital returns our board has authorized the distribution of another regular quarterly cash dividend of $2.05 for the third quarter, which brings our total distributions since the commencement of our dividend program to about $1.36 per share representing approximately 26%.

<unk> operation closing price returning capital to our shareholders will remain an important priority for us and I'm confident that our healthy balance sheet and lower financing needs over the next two years will allow us to continue on the same path.

Speaker 2: Attending capital to our shareholders will remain an important priority for us and I'm confident that our healthy balance sheet and lower financing needs over the next two years will allow us to continue on the same path.

Speaker 2: That concludes my summary of third quarter developments and I am now going to pass the floor to Stavros, our CFO , before returning to discuss the current status and outlook of the KPSI's market. So Stavros, please go ahead.

That concludes my summary of third quarter developments and I'm now going to pass the floor to establish our CFO before returning to discuss the current status and outlook of the Capesize Mack <unk>. Please go ahead.

Speaker 3: Thank you, Samadhi, and welcome everyone to our third earnings call for 2023. Let us start by reviewing the main highlights of our financial statements.

Thank you Samantha and welcome everyone to our third earnings call for 2023.

Let us start by reviewing the main highlights of our financial statements.

Speaker 3: Our net revenue in the third quarter amounted to $24.5 million, while in the nine-month period it reached $17.8 million.

Our net revenue in the third quarter amounted to $24 5 million while in the nine months period. It reached 78 million definitely dropped compared to the respective figures of 2022 as the freight market during the quarter remained subdued.

Speaker 3: Definitely a drop compared to the respective figures of 2022 as the freight market during the quarter remains subdued. However, we are pleased that we have outperformed the market in terms of time chartered equivalent as Tamath has mentioned before, highlighting teenage disversibility in all market conditions.

However, we are pleased that we have outperformed the market in terms of time charter equivalent after Marcus mentioned before highlighting synergy's versatility in all market conditions. Meanwhile, our adjusted EBITDA was $90 5 million in the quarter and $29 1 million in the nine months period.

Speaker 3: Meanwhile, our adjusted EVDA was 9.5 million in the quarter and 29.1 million in the 9-month period.

Speaker 3: Finally, we recorded a net loss of 5 million in the third quarter, expanding the net loss for the 9 month period to 8.5 million.

Finally, we recorded a net loss of 5 million in the third quarter expanding the net loss for the nine month period to $8 5 million.

Speaker 3: It is essential to consider the inflationary conditions under which we currently operate as they have had an impact on our overall costs. At the same time, the advantage we generally gain from vessels equipped with scrubbers was reduced in the third quarter because of the temporarily narrowing gap between high and low self-fulfilling fuel prices.

It is essential to consider the inflationary conditions under which we currently operate as it has had an impact on our overall costs at the same time the advance that we generally gain from vessels equipped with scrubbers was reduced in the third quarter because of the temporary narrowing gap between high and low sulfur fuel prices.

Speaker 3: We are optimistic that our freight-shading strategy, along with the already observed improvement in spot rates in the recent months and the widening in-fuel spread, along with improved profit-shading schemes on some of our vessels, should result in improved financial performance in the current quarter.

We are optimistic that our freight hedging strategy along with the already observed improvement in spot rates in ladies is months and the widening fuel spread along with improved profit sharing scheme on some of our vessels should result in improved financial performance in the current quarter.

Speaker 3: Moving on to our balance sheet, our cash position remained practically unchanged at 22 million. This allowed us to continue returning capital to our shareholders by maintaining the regular dividend distribution.

Moving onto our balance sheet, our cash position remained practically unchanged at $22 million. This allows us to continue returning capital to our shareholders by maintaining the regular dividend distributions.

Speaker 3: Now on the debt front, aggregate balance is dropped to 223 million with our market value adjusted loan to value ratio remaining at 52% despite the correction in vessel value.

Now on the debt front aggregate balances dropped to $223 million with a market value adjusted loan to weight to value ratio remaining at 52%. Despite the collection vessel values.

Speaker 3: We consider such debt levels to be sustainable while after the 54 million in the financing completed during the first half of the year, we have no debt maturities, no balloon payments at this until the second quarter of 2025.

We consider such debt levels to be sustainable while after the $54 million in refinancings completed during the first half of the year, we have no debt maturities Nobel and payments at least until the second quarter of 2025 <unk>.

Speaker 3: This arguably illustrates the financial health of our company and our ability to weather the volatility of the market by managing successfully our short-term liquidity needs. As regards to our cash interest expense, these were increased in 2023 so far due to the high interest rate environment. However, our recent refinancing transactions at improved pricing terms did partly mitigate the steep increase in base rate.

This arguably illustrates the financial health of our company and their ability to weather the volatility of the market by managing successfully our short term liquidity needs as regards to our cash interest expense. This will increase in 2023, so far due to the high interest rate environment. However, our recent refinancing.

Transactions at improved pricing terms did partly mitigate the steep increase in base rates.

Speaker 3: With regards to new transactions, as briefly mentioned by Stamatis, we have recently completed the bell-bought agreement for our first new castle marks, the Titans.

With regards to new transactions as briefly mentioned was commodities. We have recently completed the bareboat agreement for a face new customer the title ship.

Speaker 3: Following a down payment of 7 million, splitting two equal installments paid in the second and the fourth quarter, the agreement provides for a daily rate of 9,000 over the 12-month period of the Berbo charter which will not burden our caste breakeven.

Following a down payment of 7 million split in two equal installments paid in the second and the fourth quarter. The agreement provides for a daily rate of 9000 over the 12 month period of the bareboat charter, which will not burden our cost breakeven.

Speaker 3: At the end of the verbal charter we have a purchase option of 20.2 million which we expect to exercise. In aggregate the acquisition cost for the vessel following exercise of the purchase option will be approximately 30.5 million which we feel is very competitive.

At the end of the Bareboat charter and we have a purchase option of $22 million, which we expect to exercise in aggregate the acquisition cost for the vessel. Following the exercise of a purchase option will be approximately $35 million, which we feel is very competitive. This concludes my review I will now turn the call box from <unk>, who will discuss.

Speaker 3: This concludes my review. I would now turn the call back to Sfammati who will discuss the market and industry fundamentals. Sfammati.

The market and industry fundamentals commodity.

Thank you Sarah.

Speaker 2: Since the beginning of 2023, a significant increase has transpired in cape size demand, as tonne miles relating to iron ore, coal and bauxite have increased substantially by up to 8%.

Since the beginning of 2023.

A significant increase has transpired capesize demand as ton miles relating to iron ore coal and bauxite have increased substantially by up to 8%.

Speaker 2: In comparison, the size of the cape size fleet has increased by approximately 2%, which clearly highlights the favorable fundamentals in the dry bulk market.

Comparison, the size of the Capesize fleet has increased by approximately 2%, which clearly highlights the favorable fundamentals in the dry bulk market.

Speaker 2: Despite the healthy nominal supply and demand balance, the freight market did not respond as positively as initially anticipated.

Despite the healthy nominal supply and demand balance the freight market did not respond as positively as initially anticipated quite the opposite actually.

Speaker 2: The main reason was the increased efficiency of the cage size fleet and a significant decrease in congestion, which in turn added considerably to the effective supply of available vegetables.

The main reason was the increased efficiency of our Capesize fleet and the significant decrease in congestion, which intern added considerably to the effective supply of available vessels.

Speaker 2: Additionally, as highlighted in our previous training updates, in August , we have also observed an increase in deadweight-adjusted vessel speed, resulting mainly from the operating vessels of the large ore carriers.

Additionally, as highlighted in our previous earnings updates in August. We've also observed an increase in deadweight adjusted vessel speed, resulting mainly from the operating vessels of the large or carriers.

Speaker 2: This, we believe, is contradicting the emphasis placed on the reduction of the industry's carbon footprint.

This we believe is contradicting the emphasis placed on the reduction of the industry's carbon footprint going back to the reduce congestion matter. During the first nine months of the year the levels of port congestion fell to historic lows and reached a multi year bottom in the summer months since the end of August the reversal of this trend has a reduced level.

Speaker 2: Going back to the reduced congestion matter, during the first nine months of the year, the levels of port congestion fell to historical lows and reached a multi-year bottom in the summer months.

Speaker 2: Since the end of August , the reversal of this trend has reduced availability of vessels with congestion starting to return closer to long-term average.

Ability of vessels with congestion starting to return closer to long term averages.

Speaker 2: As a result, capsized charter rates staged an impressive recovery since the lows of that quarter, rising to levels exceeding $30,000 a day in October from rates as low as $8,000 a day recorded earlier in the summer.

As a result, Capesize charter rates states, an impressive recovery since the lows of the third quarter rising to levels exceeding $30000 a day in October from rates as low as $8000 a day recorded earlier in the summer.

Speaker 2: Looking ahead, we remain positive about the prospects of a dry bulk market based on the lowest new building order book of recent decades and limited CPR availability.

Looking ahead, we remain positive about the prospects of the dry bulk market based on the lowest new building order book operation in decades, and limited shipyard availability.

Speaker 2: Cape size fleet growth is expected to be lower than 1% in each of the next two years, suggesting that the expected trade growth will support high fleet utilization and healthy saturation.

Fleet growth is expected to be lower than 1% in each of the two years. The next few years, suggesting that the expected trade growth will support high fleet utilization and healthy charter rates. Additionally, any curtailment of lip supply, resulting from stricter environmental regulations and temporarily disrupt.

Speaker 2: Additionally, any curtailment of lead supply resulting from stricter environmental regulations and temporary disruptions have the potential to improve the market balance significantly.

<unk> have the potential to improve the market balance significantly.

Speaker 2: Moving on to cape size demand, SINA iron ore imports until the end of September were up by 6.7% year-on-year while inventories were down about 20%.

Moving on to Capesize demand, China iron ore imports until the end of September were up by six 7% year on year, while inventories are down about 20%.

Speaker 2: Low iron ore inventories are driving increased demand for iron ore as steel production has also been in positive trajectory.

Although iron ore inventories are driving increased demand for iron ore as steel production has also been in positive trajectory.

Speaker 2: Thus we are seeing strong momentum in export demand in industries outside the local property market in China.

SaaS, we're seeing strong momentum in export demand in industries outside the local property market in China.

Speaker 2: Long-haul iron ore exports from Brazil had a significant 7% growth from last year and we are optimistic about the prospects for future increases based on high profit marks.

A long haul iron ore exports from Brazil had a significant 7% growth from last year and we are optimistic about the prospects for future increases based on high profit margins.

Speaker 2: As regards other cape-sized commodities, coal seaborne trade is up about 6.5% year-on-year, according to research, driven by a large increase in China imports.

As regards other capesize commodities coal seaborne trade is up about six 5% year on year. According to our research driven by a large increase in China imports.

There is a massive order book of coal fired power plants in China as well as the southeast Asia in general so increasing coal usage to generate electricity seems to be on a stable path.

Speaker 2: Lastly, demand of bauxite exports out of Guinea has become another significant driver of cape-sized cargo flows, with exports rising about 24% year-on-year in the third quarter.

Lastly demand of bauxite exports out of Guinea is becoming another significant driver of Capesize cargo flows with exports rising about 24% year on year in the third quarter.

Speaker 2: Going forward, we expect this trend to continue to increase CAPE size demand.

Going forward, we expect this trend to continue to increase capesize ton mile demand.

Speaker 2: As a result, I believe that the fundamentals of the iron ore, coal and bauxite markets should support a healthy Cape vessel demand over the next few years.

As a result, I believe the fundamentals of the iron ore coal and bauxite markets should support a healthy Cape vessels demand over the next few years.

Speaker 2: Moving on to Vessel Supply, the Outstanding Order Book for Cape Size and VLOC Vessels is at its lowest point in several years, while the availability of shipyards to deliver new orders is extremely limited. The total Cape Size and VLOC Order Book is only about 5% of the existing fleet, with growth for 2024 expected to be lower than 1%.

Moving on to vessel supply the outstanding order book for Capesize and <unk> vessels is at its lowest point in several years, while the availability of shipyards to deliver new orders is extremely limited that total Capesize <unk> order book is only about 5% of the existing fleet with growth for <unk>.

24 expected to be lower than 1%.

Speaker 2: The decision to invest in new building vessels can be difficult to justify financially due to higher costs and technological uncertainty.

The decision to invest in new building vessels can be difficult to justify financially due to higher costs and technological uncertainty.

Speaker 2: Therefore, I believe it is highly unlikely that we will see any significant increases in the order book over the next two years, at least.

Therefore, I believe it is highly unlikely that we will see any significant increases in the order book over the next two years at least additionally.

Speaker 2: Additionally, we have the acceleration of all existing and new environmental regulations, notably EXI, CII and EU ETS. As a result, a gradual reduction of vessel speed to comply with these regulations will also have to happen, which will further limit effective vessel supply.

Additionally, we have the acceleration of all existing of new environmental regulations, notably ESI CACI and EU EPS as a result, a gradual reduction of vessel speed to comply with regulations will also have to happen, which will further limit effective vessel supply.

Speaker 2: As highlighted in our last earnings report, it has been observed that many large ore carriers are sailing at very high speeds.

As highlighted in our last earnings report has been observed at many large all carriers are selling at very high speeds.

Speaker 2: Since these increased speeds have an exponential effect on CO2 emissions, the only logical conclusion in our minds is that we will start to see a slowdown, especially to the extent that environmental emissions reduction is a more important priority over profit.

This increased speeds have exponential effect on tier two emissions the only logical conclusion in our minds is that we'll start to see a slowdown, especially to the extent that the environmental emissions reductions is more important priority over profits.

Speaker 2: Overall, the limited order book and the difficulty surrounding decisions to build new vessels are both contributing to a limited supply growth for the cape-sized fleet.

Overall, the limited order book and a difficulty surrounding decisions to build new vessels at both contributing to a limited supply growth for the Capesize fleet.

Speaker 2: Concluding, with such a positive dry bulk market outlook, Synergy's high-quality fleet and healthy financial standing is positioning our company favorably to achieve high-retention investment and deliver attractive capital returns to our shareholders.

Concluding with such a positive dry bulk market outlook synergies high quality fleet and health and financial standing is positioning our company favorably to achieve high retention investment and deliver attractive capital returns to our shareholders.

Speaker 2: This concludes our remarks and I would like now to turn the call over to the operator and answer any questions you may have. So operator, please take the call. Thank you.

This concludes our remarks and I would like now to turn the call over to the operator and answer any questions. You may have so operator, please take the call. Thank you.

Speaker 1: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced.

Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.

Speaker 1: To re-enter your question, please press star 1 and 1 again.

We will now take the first question.

Speaker 1: From the line of Tate, Sullivan from Maxim Group, please go ahead.

From the line of sight, so liaison from Maxim Group. Please go ahead.

Speaker 4: Hello, hello. Good day. Thanks for taking my question. Can you talk, are you built related to the fees from related parties and the increase in general and administration expenses? I think you've mentioned before you're building your own shift management business. Is that part of the reason for the higher general and administration expenses?

Hello, Hello, Good day.

Thanks for taking my question can.

Can you talk could starches are you built were related to that piece from related parties and the increase in general and administration expenses I think you've mentioned before you're building your own ship management business.

Is that the reason for the higher general and administration expenses and should that continue going forward too.

Speaker 2: Yes, hi, Tate. Good morning. I hope all is well. Nice to hear from you. Well, we actually have increased GNAs, but at the same time, we're compensating about $600 per ship per day from United. So, yes, GNAs are a little bit up, but we compensate that to a large degree from the fees associated with United Maritime.

Yes, Hi, Dave Good morning <unk>.

Nice to hear from you.

Well, we actually have increased G&A, but at the same time, we're compensating about $600 per ship per day from United So, yes, G&A as are a little bit up, but we compensate that to a large degree from the fees associated with the United Maritime.

Speaker 4: Could and do you have a ship management business and could you start to manage ships from other fleets or that might?

Yeah.

Okay.

And do you have a ship management business and could you start to manage shifts from other fleets or is that or it might be correct.

Speaker 2: Oh of course, of course, yes. I mean right now the vast majority of the fleet under our ownership is under the Synergy Ship Management. So the answer is yes, we consider ourselves a very premium provider of ship technical management and commercial management services.

First of course, yes, I mean right now the vast majority.

Surety of the fleet under our.

Our ownership is.

Under the synergistic management. So the answer is yes, we'll consider ourselves very premium provider of ship technical management and commercial management services. So the answer is yes, we can do other companies, but now we are focusing to synergy.

Speaker 2: So the answer is yes, we can do other companies, but now we're focusing to Synergy and United.

Speaker 2: We do maintain a few vessels in independent third parties.

We do maintain a few vessels in independent third parties for.

Speaker 2: for benchmarking reasons. So we still maintain one or two companies and we have relationships with most of the independent

For benchmarking region. So we still maintain one or two companies and we have relationships with most of the independents that pads out there for.

Speaker 2: and parties out there for exchange of information and knowledge and all that, but the vast majority of almost everything is under our roof.

For the exchange of information and the knowledge and all that but the vast majority of.

Almost everything is under our roof.

Speaker 4: And then on any scheduled, and you have a newer fleet of cape size, most of the scuppers, is there any scheduled downtime for 2024?

And then on any scheduled and you have a newer fleet of Capesize. Most Scott scrubbers is there any scheduled downtime for 2024 for modeling purposes.

Speaker 2: Well, we have about three or four ships next year that will land at the dry docks. We don't consider any important or any particular difficult downtime altogether. I must say around 15 to 20 days it ships, so it's very minimal to the total operating days.

Well we have about.

<unk> 34 ships next year that will enter the Drydocks, we don't consider any important or any particular difficult downtime altogether.

I must say around 15% to 20 days at ship. So it's it's very very minimal to the total operating days of the company.

Speaker 4: And then have you seen any on in the older fleet with cape size, any indications recently of scrapping or her?

Okay.

And then have you seen any in the older suite Cape size any any indications recently here scrapping or not at all.

Speaker 2: Well, you know, the oldest vessel on our fleet is 2009, so it's still considered, let's say...

Well you know the oldest fleet vessels in our fleet is 2009, so it's still considered.

Speaker 2: middle-aged. It's still considered older and still operates very successfully and in very competitive terms with the rest of the fleet. So we don't really feel any pressure.

Let's say mid <unk>.

We still consider the older.

Still operates very successfully and very competitive terms so with.

The rest of the fleet. So we don't really feel any pressure.

Speaker 2: whatsoever right now. The market has opened a lot in various commodities that don't necessarily require age limits.

Whatsoever right now the market has opened a lot in various commodities.

Not necessarily require age limits. So we're very much comfortable the age bracket of our fleets, but most importantly, I must remind everyone that there are no new building order book is very limited as the lowest order book over the last.

Speaker 2: So we're very much comfortable in the age bracket of our fleet. But most importantly, I must remind everyone that there are no new building order book. It's very limited. It's the lowest order book of the last.

Speaker 2: 20-25 years, so we're going to have to leave with the ships that the current global fleet has right now. Eventually, everyone is going to get a bit older in the next few years.

2025 years, so we're going to have to leave with the ships.

The current global fleet has right now so.

Eventual EVAR who's going to get a bit older in the next few years.

Speaker 4: Oh, and outside of your fleet, no, no recent trampoline scrapping.

Oh.

<unk> Street.

No no recent trends and scrapping.

Speaker 2: Correct, yes, we don't see any material trends in scrapping. However, we believe that from next year onwards, 2024, that the total combination of the environmental regulations is going to be

Correct, Yes, yes, we don't see any material trends and scrapping. However, we believe that that from next year onwards 2024.

The total combination of environmental regulations is going to be hitting the market.

Speaker 2: the market that many ships will not be able to compete with the rest of the fleet. So regardless of age, there are certain yards in the past.

Mainly ships will not be able to compete with.

The rest of the fleet so regardless of age there are certain yards in the past that have not managed to make ships that will fit their environmental profit profile of the fleet of.

Speaker 2: that have not managed to make ships that will fit the environmental profile of the fleet of tomorrow. Let's put it this way, even though it's still the same vessels. And those ships will need to be either significantly upgraded or they will have to exit the trade.

Tomorrow, let's put it this way even though it's still the same vessels.

Those ships will need to be either significantly upgraded or they will have to exited trade.

Speaker 4: One last one for me on the, you mentioned higher interest cost interest expense in 24. can you give us a rough rough approximation of where your current floating rates?

And one last one for me on the Ed you mentioned higher interest costs interest expense and 24 can you give us a rough rough approximation of where your current floating rates are today.

Okay. In total are very financings as we have done have resulted in our margin.

While we pay above the base rate to be in the region of 2.5% to 3%.

Speaker 3: So now nowadays S85 is around four and a half to five percent. So the Violin ghost is around seven to seven and a half percent.

So now nowadays.

It is around four or five 5%. So the all in cost is around 7% seven 5%. So in terms of projections say going forward, we expect the interest rate.

Speaker 3: So in terms of projections going forward, we expect interest rate quarterly, interest rate expense to be the cost expense to be around 5 million. And then going into 2024, since the loans are amortising pretty steeply, so the outstanding balance will be decreasing. We will go down to 4.9, 4.8 and so on.

Quarterly interest expense to be the cost expenses to be around $5 million.

And then going into 2024 since the loans are amortizing pretty steeply.

So the outstanding balance will be decreasing.

Really go down to $4 94 days and so on.

Speaker 4: In terms of break-even, I would say that you should have in mind around 2,800 per vessel per day in our cost per break-even attributed to interest. Well, thank you both. Have a great rest of the day.

In terms of breakeven I would say that you should have in mind around.

2800 per vessel per day.

In our cash breakeven.

Attribute it to infinity.

Alright, well. Thank you both have have a great questions today.

Year to last year for you. Thank you.

Thank you.

We will now take the next question.

Speaker 1: from the line of Christopher, Bart Sky from Arctic Securities, please go ahead.

Yes.

It's from the line of Christopher bought Sky from Arctic Securities. Please go ahead.

Speaker 2: Hello guys, how are you? Hey, good morning, good afternoon. Everything's fine, thank you.

Hello, guys how are you.

Hey, good morning, good afternoon, Everything's fine. Thank you.

Speaker 5: Good morning. Yeah, congrats on the quarter and obviously good, good guiding. Can you please elaborate a bit on the bauxite trade and how it will affect the cape size market?

Good morning, Congrats on the quarter on.

Good good timing.

Can you please elaborate a bit on the bulk that trade and how it will affect the capesize market.

Speaker 5: seasonality. There's a lot of talk in the market about this now. And I mean, typically, first quarter has been the weakest one. But do you see any structural change here over the economy here?

Now I would say there is a lot of talk in the market about this now.

First quarter has been the weakest one.

Do you see any structural change here.

Yes.

Speaker 2: Well, yes, most importantly is the fact that from 2024 onwards, we will see the acceleration of all the new environmental regulations.

Well, yes. Most importantly is the fact that from 'twenty to 'twenty four onwards, we will see the acceleration of all the new environmental regulations that so far they have been in place some of them, but they have not really been in Florida. So 'twenty 'twenty four is going to be the first recording year of all the new invite.

Speaker 2: that so far they have been in place, some of them, but they have not really been enforced. So 2024 is gonna be the first recording year of all the new environmental regulations. So the EXI will kick in full-fledged CII as well, but most importantly, and what will have the first monetary impact for the owners is the EU ETS. And we still have a lot of discharging in EU. So that is gonna be the first real pain emissions related. So, as I mentioned to Tate before, we strongly believe that the many ships will either have to slow down significantly or will have to be upgraded considerably in order to be competitive for the next.

Mental regulations of ESI will kick in in full fledged CIA as well, but most importantly, and what will have the first monetary impact for the owners is the EU ETS and we still have a lot of discharging in EU.

So that is going to be the first real pain emissions related so as I mentioned to take before we.

We strongly believe that the many ships would either have to slow down significantly or will have to be upgraded considerably in order to be competitive for the next few years.

Speaker 2: We have seen a massive increase in demand arising from China and other places.

We have seen a massive increase in demand arising from China and other places year on year anywhere between five and 9%. So the volumes are tremendous.

Speaker 2: year and year anywhere between five and nine percent. So the volumes are tremendous. If the effective supply of vessels is a little bit more moderate.

If.

The supply of effective supply of vessels is a little bit.

Speaker 2: because of speed, congestion and other reasons, I believe we can see very big spikes in the market starting in 2024, and that's only gonna get better for us going forward, much better.

More moderate because because of speed congestion.

As a result, I believe we can see very big spikes in the market starting in 2024, and Thats only going to get better for us going forward much better.

Okay.

Speaker 5: Okay, thanks. So going back to this bulk trade out of West Africa, is this something you see an increase lately? And how much are you involved in this trade?

Okay. Thanks.

So.

Going back to this in bulk trade out of West Africa.

Is this something you're you've seen the increase.

How much are you involved in this trade.

Speaker 2: Ah, okay, I get it. Yes, Guinea is increasing a lot and we're going to have the same undo, which is iron ore also rising from the West Africa. Yes, volumes are picking up a lot.

Okay.

Okay I get it yes Guinea is increasing a lot and we're going to have the simandou, which is iron ore also arising from lowest Africa, yes volumes are picking up a lot.

Speaker 2: I don't want to focus only on bauxite because that by itself is a big growing...

I don't want to focus only in bauxite that goes is that by itself is.

A big growing.

Speaker 2: trend by itself. But the overall demand, tonne mine demand for raw materials like iron or coal and of course bauxite, it appears to be continuing progressively in the next few years. So yeah, bauxite is significantly up.

Trend by itself.

But the overall demand.

Demand for our materials like iron ore coal and of course bauxite it appears to be continuing.

Progressively in the next few years, so yes, bauxite is significantly up but it doesn't really compare on an absolute basis to iron ore and coal cargoes. The increase we've seen in millions of times over the last year year on year.

Speaker 5: but it doesn't really compare on an absolute basis to iron ore and coal cargos. The increase we've seen in millions of tons over the last year, year on year. Okay, thank you very much and congrats again. Thank you very much.

Okay. Thank you very much congrats again.

Thank you very much lesser capable.

Thank you.

We will now take the next question.

Speaker 1: from the line of Michael Haim from Noble Capital Markets. Please go ahead.

From the line of Michael <unk> from Noble capital markets. Please go ahead.

Speaker 6: Thank you. I do not see any mention of any share buybacks during the quarter, and the shares have been a little bit weak since the quarter has ended. Do you feel that you have the balance sheet and the cash flow to make repurchases if these opportunities arise? And how do you prioritize share repurchase versus paying down debt?

Thank you I do not see any mention of any share buybacks during the quarter and the shares had been a little bit weak.

Quarter has ended.

Feel that you have on the balance sheet from a cash flow you make repurchases prestige opportunities arise and how do you prioritize share repurchase versus paying down debt.

Speaker 2: That's a great question and thank you for asking this. Good morning. The answer is that we do prioritize on a number of things right now, but most importantly is the cash flow of the company. We still have a dividend in place which we intend to continue for the foreseeable future. So right now in respect of giving back money to our investors.

That's a great question and thank you for asking this good morning.

The answer is that we do prioritize on a number of things right now, but most importantly is the cash flow of the company.

Still have a dividend in place, which we intend to continue for the foreseeable future. So right now in respect of.

Giving back money to our to our investors I think that's been a priority that we want to continue.

Speaker 2: I think that's been a priority that we want to continue.

Speaker 2: uh year to date the cape size market has had the worst uh period of the last five

Year to date, the Capesize market has had the worst period of the last five six years. So in the beginning of 2023, we're anticipating a much better freight rate environment. Unfortunately.

Speaker 2: So, you know, in the beginning of 2023, we were anticipating a much better freight rate environment. Unfortunately, you know, it didn't meet our expectations. It was far below our expectations. So, we decided to maintain cash flow as much as we can in order to sustain a good cash and healthy balance.

Didn't meet our expectations it was far below our expectations. So we decided to maintain cash flow as much as we can in order to.

In order to sustain a good gas and healthy balance.

Speaker 2: The only upcoming buyback that we have until the end of the year is a $3 million small outstanding convertible that we're going to repurchase and that's it and I think that is a significant repurchase by itself and so far this year we've done quite a few repurchases and I've done purchases from the open market myself.

The only upcoming buyback that we have until the end of the year is a $3 million that are smaller outstanding convertible that were going to repurchase and I'd say it and I think that is a significant repurchase by itself and so far this year, we've done quite a few repurchases and I've done purchases.

From the open market myself, so altogether, it's maintenance of cash we believe turn 24 is going to be a better year, but since we were a bit disappointed in 2023, we prefer to have a good cost maintenance.

Speaker 2: So, altogether, it's maintenance of cash. We believe 2024 is going to be a better year, but since we were a bit disappointed in 2023, we prefer to have a good cash maintenance. And of course, the principal repayment of our debt, as Tavros mentioned before, is quite steep. So we want to have the proper cash flow in place, you know, to deal with all the cash flows that we need to deal with in the next few months.

And of course, the principal repayment of our debt as Douglas mentioned before is quite steep so we want to have the appropriate cash flow in place.

To deal with all the cash flows that we need to deal with in the next few months.

Okay. Thank you.

You're very welcome. Thank you.

Thank you there are no further questions at this time I would now like to turn the conference back to Mr. <unk> for closing remarks.

Speaker 2: Dear all, thank you very much for attending our call today. We look forward to catching up again in the next few weeks and months with other corporate developments. In the meantime, once again, thanks for attending our call. And thank you. You made this connect.

Dear all thank you very much for attending our call today.

We look forward to catching up again in the next few weeks and months with other corporate developments in the meantime, once again, thanks for attending our call and.

Thank you you may disconnect now.

Speaker 1: This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.

This concludes today's conference call. Thank you for participating you may now disconnect.

Please standby.

Okay.

Yes.

Although the total picture.

Speaker 7: The End.

Okay.

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