Q3 2024 Dorian LPG Ltd Earnings Call
[music].
Good morning, and welcome to the Dorian LPG third quarter 2024 earnings Conference call.
At this time all participants are in a listen only mode.
A question answer session will follow the formal presentation.
As a reminder, this conference is being recorded additionally.
Additionally, a live audio webcast of today's conference call is available on Dorian Lpg's website, which is www dot Dorian LPG dotcom.
Yeah.
I would like to now turn the conference over to Ted Young Chief Financial Officer. Thank you. Mr. Young. Please go ahead.
Thank you Rob.
Good morning, and thank you all for joining us for our third quarter 2024 results Conference call with me today are John how would you be terrorists chairman President and CEO of Dorian LPG Limited, John Lewis, Chief Executive Officer of Dorian, LPG, USA, and Tim Hansen, Chief Commercial officer.
As a reminder, this conference call webcast a replay of this call will be available through February eight 2024.
Many of our remarks today contain forward looking statements based on current expectations. These statements may often be identified with words, such as expect anticipate believe or similar indications of future expectations.
Although we believe that such forward looking statements are reasonable we cannot assure you that any forward looking statements will prove to be correct. These forward looking statements are subject to known and unknown risks and uncertainties and other factors as well as general economic conditions.
Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates proved to be incorrect actual results may vary materially from those we expressed today.
Additionally, let me refer you to our unaudited results for the period ended December 31, 2023 that were filed this morning on Form 10-Q. In addition, please refer to our filings on forms 10-K, and Form 10-K, where you'll find risk factors that could cause actual results to differ materially from those forward looking statements.
Finally, please also refer to the Investor highlight slides posted this morning on our website to which we will refer during the call.
With that I'll turn it over the call to John Entrepot terrorists.
Thank you. Thank you John.
Anything else Josh.
Drawn the course, Ted you may need to discuss our third quarter financial plagued by poor results.
As you will hear in more detail from Ted.
The natural year to date, we earned a record average D C record spot TCE and record EBITDA.
While maintaining a strong balance sheet and capital to invest in our segment and then our decarbonization initiatives, we continue to return capital to our shareholders.
Including our recently declared dollar per share dividend, we will have retired all of our $690 million to shareholders since our IPO.
It's one of the largest operators in our segment. We believe we are well positioned to continue our profitable performance in the LPG sector.
It would be odd.
More than 40 ships were absorbed into the fleet and 40 43.
12% addition.
This was the largest number of ships delivered in a single year since the delivery in 2016, 46 ships, which represented 23% on existing fleet.
Of the 17 new buildings.
Never in 'twenty, 'twenty, four or have already started trading.
We view the market volatility.
Three.
The.
Big rate spikes as evidence of the demand and supply being close to equilibrium.
The recent near total elimination of waiting time until they come out which is you know gosh restricted is not sustainable.
The amount of authority and prioritizing container ships and LNG ships over L. P. G.
There are 100 and line Neo Panamax container ships and 73 LNG ships.
For delivery this year.
For these reasons as well as the power reduction reduction, resulting in slower speeds, which didn't happen last year, we are optimistic.
Well the eggs are side, we continue to invest in improving the quality of life of our display Ukrainian seafarers and their families.
We recently introduced a simplified payment system through an E wallet that enables them to receive their monthly allotment as quickly and with less hassle.
On the social front, we will enter Akshay you earn in a pilot program with you all.
The board of Alliance, a global Maritime Forum sponsored initiatives, which will enable accelerated data selection regarding diversity and increased opportunities for all genders at sea.
We are evaluating compelling ambition saving devices and law friction points for our ships.
During Q3, we paid one of our Drydock shifts with Silicon and then it was signed new contracts with energy saving devices that will be retrofitted in the coming year.
We also continue our real time emission monitoring program and having that.
Enhancing initiative by installing minds Echo Park engine diagnostics tools on plenty of our own chip.
We've expanded our performance team in Denmark by adding a mechanical engineer.
We ordered and you'll building L. D. C. We had a C from haniwa shipyard in Korea for delivery in slides 26 and are investigating opportunities to upgrade some of our existing ships to carry them on yet.
Of course, we will speak further on this topic.
Okay.
You are.
Sure.
Thank you John.
My comments this morning will focus on our financial position liquidity.
Third quarter results and our capital allocation decisions.
At December 31st 2023, we reported 208 and a half a million dollars of free cash, which represented a very solid increase from the 192 million reported at the end of September.
The 208 and a half million is of course reported after the payment of the $40 million dividend that was declared and paid during the December quarter.
As of January 31st we had an unrestricted cash balance of $215 million, which is net of the $23 $8 million down payment made on our V. O G. C. A C new building during January 2024.
We do not consolidate the P&L or balance sheet accounts in the Helios pool, which has the effect of understating our reported cash.
As of January 31, 2023 the pool held cash of $36 2 million and since we have a roughly 86% economic interest in the pool. It equates to cash of approximately 31 million, which is not otherwise reported on our balance sheet.
With the debt balance at quarter end up $623 8 million our debt to total book capitalization stood at 38, 8% and net debt to total book capitalization at 25, 8%.
As we've previously reported our banks agreed to increase our revolving credit facility from 20 million to $50 million and you added 100 million dollar accordion line for vessel acquisitions to the facility. We are grateful for their support and for their endorsement of our stewardship of your capital.
We've begun to evaluate various pre and post delivery financing options for a V. O G. C. A C with the aim of maintaining our low debt costs and higher level of financial flexibility.
Looking forward, we expect our cash cost per day for the coming year to be in the range of 25 to $26000 per day, excluding capital expenditures for dry docking and potentially upgrades for ammonia capability, our existing fleet, which John will discuss later.
For the discussion of our third quarter results. You also may find it useful to refer to the investor highlight slides posted this morning on our website.
I'd also remind you that my remarks will include a number of terms such as T. C. Operating days available days at an adjusted EBITDA. Please refer to our filings for definitions of these terms.
Third quarter chartering results, we achieved a TCE of $76337 per operating day with a total utilization of 93.6%, yielding uterine utilization adjusted TCE of about $71431. This TCE result represents the best in the company's history.
As our entire spot trading program was conducted through the Helios pool the spot results for Helios for the best measure of our spot chartering performance for the December 31st quarter, the Helios pool, and a spot TCE of 19 $1417 per day.
Which is the highest spot rate the pool has ever earned for a quarter.
On page four of the Investor highlights material you can see that we have five dorian vessels on time charter within the pool, plus one M. O M. M O L and are geared vessel, indicating spot exposure of about 75% to 80% for the 27 vessels in the Helios pool.
Turning to the quarter ending March 31, 'twenty 'twenty four we currently have over 60% of the available days in the Helios pool booked at a time charter equivalent in excess of $100000 per day, reflecting the very strong rates booked earlier for voyages that will be carried out this calendar quarter.
Please note that that rate includes both spot fixtures and time charters.
Our opex per calendar day, excluding dry docking cost was $9909, which was down somewhat sequentially from the prior quarter reductions in lubricants and spares and stores drove the decline.
Our time charter in expense for the fourth time charter in vessels came in at $8 4 million, which is lower than budgeted due to some fuel efficiency underperformance claims.
Total G&A for the quarter was 7.7 million and cash G&A that is G&A, excluding noncash compensation expense was about $6 3 million of that $6 3 million about 500000 included into our Ukrainian seafarers and some employee bonuses.
Our core G&A came in at roughly $5 8 million, which is consistent with our expectations.
Non cash compensation expense for the quarter was $1 4 million, which is consistent with the guidance that we gave last quarter.
Our reported adjusted EBITDA for the quarter was $133 million, which was the best quarterly adjusted EBITDA in our corporate history.
Our adjusted EBITDA for the last 12 months is nearly $415 million.
Turning to debt service, our cash interest expense, which we calculated as the sum of the line items interest expense, excluding deferred financing fees and other loan expenses and realized gain loss on interest rate swap derivatives for the quarter was seven and a half million dollars a decline of about 200000 from the prior quarter, reflecting lower average debt and our all in cost of debt.
Out of about 4.7%, which I would note is below current floating sofa rates.
Quarterly principal amortization remained steady at $13 3 million.
Our trailing 12 month net income is about $304 million and with average book shareholders' equity for the same 12 month period of roughly $911 million, we generated a 33, 4% return on shareholders' equity. We are proud of this result, because it not only reflects the strong profitability that our platform can.
Generally it also shows that we have managed to keep our shareholders equity at an appropriate level balancing retention of capital, while still paying out meaningful dividends to our shareholders.
The one dollar per share dividend declared last week and payable on February 27 to shareholders of record February 5th 'twenty 'twenty four brings our total dividends paid to $11 50 per share or nearly $465 million in aggregate.
We underscore.
Ladies and gentlemen, please standby are experiencing technical difficulties our conference will begin momentarily.
Thank you.
Once again, ladies and gentlemen, please remain on your teleconference will resume momentarily. Thank you.
Thank you for standing by ladies and gentlemen, Ted. Please please continue.
Thanks, Rob.
Again, we're positive on the long term prospects of our business, but we are mindful of the near term headwinds with that I'll pass it over to Tim Hansen.
Good day, everyone and thanks for dialing in as always have yet to see.
But created some interesting time, so the virtues of funds that's a record.
Setting strengths of December contrasts sharply with the market during January 2000, and plentiful the quarter ending December 31st in 'twenty threes sold record breaking high freight levels for the agencies.
Primary drivers of the firm freight market, we're dividing widen the U S to Asia arbitrage, several new restrictions apply to the Panama Canal and subsequent vessels routing decisions.
The uncertainty about the Panamax and the Suez Canal transits trading.
Turning first to the Albatross North America production of natural gas liquids continue to increase inventory to wrap up.
Levels.
And on cheese unbelievable stocks for the winter.
The increased supply of LPG, what the U S export prices offsetting some of the short term concerns about Asia in hot demand and Toledo was also it was also experiencing a warm winter.
The effect of the drought in Panama has been widely discussed the Panama Canal introduce new registrations.
Tranches at the end of October.
It should be a reduction of water level necessitated a reduction in data trends.
With the cost of broker chances of EOG, Ashish, becoming more expensive.
By the first week of November auctions for new partner.
And I'll transfer, which reached a peak of just under $4 million.
And some operators faced the real possibility of not being able to secure a north bound transit.
Because he sees we're opting for each furniture ruge, some trading around mid Pacific to avoid the uncertainty of the Panama Canal and a few alternative palace around South America, resulting in increased ton miles as well as impacting the time illness in childhood.
If the meeting arrival in the U S Gulf of loading.
The schedule impact was eventually price into the freight levels and lake Harrisville fixed almost two months forward fixing window.
Certainties about scheduling and the costs are.
Impact apply for vessels.
I mean.
With shadow location potentially restricted high often.
The prices at the Panama canal or choosing the longer laden passage.
It came out.
On average the quarter ending December 23 average 25 yields.
<unk> strategy for the U S Gulf Mitch Lewis.
This compared to an average of 13 vlccs.
On the quarter prior.
The Suez Canal routing was preferred for vessels and ballast and labor to such a degree that in December the Baltic index. So few rates.
Under the agreed index, so cheap and you kind of a tariffs with a bottoms up fixed just being recorded.
So chi bogey of Swiss re.
And pricing on my assessment of the market more difficult testifies to the significant shift in trading routes, whether the agencies over the period.
However, geo political tensions in the Middle East made live Algesia Swiss a shortlist solution when thrown in missile attacks and direct she escalated through the symbol operators began to decline the Richie rude on grounds of safety of UGC.
But she pushed towards smoothing via the Cape of good hope for that.
First time in several years more than 10 years.
Operator: and Good morning and welcome to the Dorian LPG 3rd Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.
Balanced with via the Cape of good Hope and one was as a result.
On my suppose the freight market in the short term.
Now, reflecting on how conditions can change at the beginning of January several factors increase.
Operator: A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on Dorian LPG's website, which is www.dorianlpg.com. I would like to now turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.
Forecast of a cold snap in January in the U S.
Asian oversaw the increase in domestic LPG consumption.
Okay.
Prices for the product market and rich using the west to east arbitrage one of the key drivers also the far East index prices were under decline.
Theodore B. Young: Thank you, Rob. Good morning, and thank you all for joining us for our third quarter 2024 results conference call. With me today are John Hadjipateras, Chairman, President, and CEO of Dorian LPG Limited; John Lycouris, Chief Executive Officer of Dorian LPG USA; and Tim Hanson, Chief Commercial Officer. As a reminder, this conference call webcast and a replay of this call will be available through February 8, 2024. Many of our remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe, or similar indications of future expectations.
And in part us.
<unk> reduced import demand.
Lower demand for heating therefore, the arbitrage status or narrow impacted the normal arbitrage economics.
During January six and you were building or 29% of the expected deliveries in 'twenty 'twenty coal.
Creating a sudden increase in their vessel supply for the first calendar.
Congestion in the Panama Canal declined significantly and rapidly. This months contributing factors include the rerouting of interest you should get paid Linux container vessel traffic and increased rainfall and the Panama Canal.
Theodore B. Young: Although we believe that such forward-looking statements are reasonable, we cannot assure you that any such forward-looking statement will prove to be correct. Such forward-looking statements are subject to known and unknown risks and uncertainties and other factors, as well as general economic conditions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we express today. Additionally, let me refer you to our unaudited results for the period ended December 31, 2023 that were filed this morning on Form 10-Q. In addition, please refer to our filings on Form 10-K, where you'll find risk factors that could cause actual results to differ materially from those forward-looking statements. Finally, please also refer to the investor highlights slides posted this morning on our website to which we were referred during the call. With that, I'll turn over the call to John Hadjipateras.
And each any vis unfortunately will create.
Temporary oversupply in both the U S Gulf and highest towards putting pressure on the races machine during this quarter, which should normalize.
And social.
Freight freight market can be volatile and is subject to revive latest affects us.
Ensuing short term freight rates, but we also have a non call strong seismic kilotons jewelry affects us.
Oh.
Walnut Street climate in North America will contribute to more LPG supply at more favorable prices the agitation anticipation going forward is therefore more widening.
The west to east.
We expect.
Only 15 remaining new buildings to deliver this year compared to the whole digital that's why successfully absorbed last year.
John Constantine Hadjipateras: Thank you, and thank you for joining us, John, Lycouris, Ted, Tim, and me to discuss our third quarter financial 2024 results. As you will hear in more detail from Ted, in the financial years to date, we are at record average TCE, record spot TCE, and record EBDOT. While maintaining a strong balance sheet and capital to invest in our segment and in our decarbonization initiatives, we continue to return capital to our shareholders, including our recently declared dollar per share dividend. We will have returned over $690 million to shareholders since our IPO. As one of the largest share operators in our segment, we believe we are well positioned to continue our profitable performance in the LPG sector and beyond. More than 40 ships were absorbed into the fleet in 2023, a 12% addition.
The new building deliveries to be off salt based on this whole cost with increases in exports and continued to take market share from other fuel sources and its one that sort of whole significant growth in propane dehydration steam cracking pants I expected, particularly in Asia.
The Panama Canal congestion issues are far from solved the daily transient numbers I'll still 10 trenches less per day back in July 23, and it's only expected to revert to the normal levels during the summer.
So she's in all those segments.
Towards the Panama Canal will again increase of congestion and in addition to the VA.
You see new buildings.
Expected delivery of 73, LNG and 109, new Panamax container ships in 'twenty to 'twenty hole.
It's really increased the demand for passenger traffic.
In regards to expose congestion return.
It should be the norm rather than data.
Simpson and decal Golgotha via Suez Cape have you just used us they expect it to become more pronounced.
John Constantine Hadjipateras: This was the largest number of ships delivered in a single year since the delivery in 2016 of 46 ships, which represented 23% of the then-existing. Of the 17 new buildings slated for delivery in 2024, four have already started trading. We view the market volatility of 2023, and particularly the big rate spikes as evidence of demand and supply being close to equilibrium. However, the recent near total elimination of waiting times for the canal, which is still draft restricted, is not sustainable.
It is plentiful due to the uncertainties of all coffee the Panama Canal.
Thus, we do remain positive on the medium to long term prospects for our business.
Acknowledging that short term volatility you save a persons.
With that I'll pass you over to Mr. John occurs.
Thank you very much Jim.
At Dorian LPG, we firmly believe that we should be part of and provide long term solutions to the world's decarbonization objectives and goals.
Our investment in scrubbers continues to derive strong returns our average daily net savings over the quarter on our scrubber vessels to do that.
John Constantine Hadjipateras: The Canal Authority is prioritizing container ships and LNG ships over LPG ships. There are 109 Leo Panamax container ships and 73 L&T ships slated for delivery this year. For these reasons, as well as the power reduction resulting in slower speeds, which didn't happen last year, we are optimistic. On the HR side, we continue to invest in improving the quality of life of our displaced Ukrainian seafarers and their families. We recently introduced a simplified payment system through an e-wallet that enables them to receive their monthly allowancements quickly and with less hassle. On the social front, we will enter ASEAN in a pilot program through the All Aboard Alliance, a global maritime forum-sponsored initiative, which will enable accelerated data collection regarding diversity and increase opportunities for all genders at sea. We are evaluating compelling emission-saving devices and low-friction paints for our ships.
<unk> 3000, a day because it has a dollar per day or about $3 4 million for the quarter.
Fuel differential between high sulfur fuel oil and low sulfur fuel oil averaged about $202 in the last quarter of 2023.
The pricing differential of the LPG.
Fewer versus fuel oil low sulphur fuel oil stood at about $93 per metric ton, which was helpful to hear a fuel engine bachelor's when operating without P. J.
We now have a total of 14 scrubber fitted vessels and one chartered in vessel.
And we plan to retrofit another Nashville, where there's probably a unit in the second quarter of 2024.
The installations of energy saving devices and the silicon how coatings to our passengers have provided significant performance improvements in fuel savings.
The auction of the fleet C O two emissions and improved ratings.
John Constantine Hadjipateras: During Q3, we painted one of our dry dock ships with silicone paint and signed new contracts for energy-saving devices that will be retrofitted in the coming years. We also continue our real-time emission monitoring program and have enhanced the initiative by installing MANS EcoTorque engine diagnostics tool on 20 of our own chips. We have expanded our performance team in Denmark by adding a mechanical engineer. We have ordered a new building, VLGC, VLAC, from Hanwha Shipyard in Korea for delivery in 2026, and are investigating opportunities to upgrade some of our existing ships to carry ammonia. John Lycouris will speak further on this topic. Ted, if you are...
Besides our catheter.
Captain John NP, which was originally built as a V O G C really.
Is now called we are upgrading some of our rational to carry ammonia.
It is quite favorable for a good portion of the workplace to carryout such upgrades.
<unk> emissions trading system. They came into effect in January 2024, exactly Kubota, we're all ships calling that.
Sure.
Shipping companies with Sorrento Dag here 2020 for EU allowances latest by September 2025, and every year thereafter.
And it will reflect the C O two emissions, while they're passionate about trading and if you want.
Theodore B. Young: Thank you, John. My comments this morning will focus on our financial position and liquidity, our unaudited third quarter results, and our capital allocation decisions. At December 31st, 2023, we reported $208.5 million of free cash, which represented a very solid increase from the $192 million reported at the end of September. The $208.5 million is, of course, reported after the payment of the $40 million dividend that was declared and paid during the December quarter. As of January 31st, we had an unrestricted cash balance of $215 million, which is net of the $23.8 million down payment made on our new VLGC AC building in January 2024. We do not consolidate the P&L or balance sheet accounts of the Helios pool, which has the effect of understating our reported cash.
In line with end user pays principle, the cost of complying with the U E. P. S is passed by the owner to the time charter who is ultimately responsible for the purchase and transfer of the Montney.
You allowances to the owner's account.
For spot voyages, we expect EU allowances to be added to the invoice in line with the end users.
Ooh.
In continuation of dorians commitment to sustainability and improving the company's greenhouse gas profile. We have recently invested in two companies to seek solutions to climate issues from carbon and methane emissions.
<unk> is planning to market a compact modular carbon capture system for small and mid sized carbon emitters that would be applicable to many industries.
Theodore B. Young: As of January 31st, 2023, the pool held cash of $36.2 million, and since we have a roughly 86% economic interest in the pool, it equates to cash of approximately $31 million, which is not otherwise reported on our balance sheet. With a debt balance at quarter-end of $623.8 million, our debt-to-total book capitalization is set at 38.8%, and net debt-to-total book capitalization is As we have previously reported, our banks agreed to increase our revolving credit facility from $20 million to $50 million and to add a $100 million accordion line for vessel acquisitions to the facility. We are grateful for their support and for their endorsement of our stewardship of their capital. We've begun to evaluate various pre- and post-delivery financing options for our VLGCAC with the aim of maintaining our low debt costs and high level of financial flexibility.
The marine application.
The patented technology claimed 30% better efficiency than conventional carbon capture technologies as it works with a larger area.
Although fiber contactor membranes.
Absorbing solution.
About 90% capture carbon dioxide in park compassion flue gases.
The second is envelope, which focuses on the avoidance of methane gas emissions.
Wasted resources.
Our landfill gas biogas and waste biomass goes.
Admissions instead of being granted or burned on site are converted into high value carbon negative and carbon neutral cures like baidu LNG bio LPG green methanol and green ammonia.
The modular and scalable technology can be situated at methane emission size, where it can be transformed into high quality gas.
Theodore B. Young: Looking forward, we expect our cash costs per day for the coming year to be in the range of $25,000 to $26,000 per day, including capital expenditures for dry docking and potentially upgrades for ammonia capability in our existing fleet, which John will discuss later. For the discussion of our third quarter results, you also may find it useful to refer to the investor highlights slides posted this morning on our website. I would also remind you that my remarks will include a number of terms, such as TCE, operating days, available days, and adjusted EBITDA. Please refer to our filings for the definitions of these terms.
And after treatment consolidated and distributed energy.
Energy Marine and aviation industries.
Finally, a recent new building contract to build a new V O D. C. D C at Harnois Ocean yard in South Korea is in line with our commitment to employ capital, where we see commercial and financial opportunity for investors.
We believe that the future green hydrogen economy will largely depend on large quantities of ammonia applying to seize a dedicated vessel.
Besides I think good economic returns in Sats grades. We also firmly believe that we should be caught up and provide long term solutions to their world decarbonization objectives and goals.
Theodore B. Young: For our third quarter chartering results, we achieved a TCE of $76,337 per operating day, with a total utilization of 93.6%, yielding utilization adjusted TCE of about $71,431. This TCE result represents the best in the company's history. As our entire spot trading program is conducted through the Helios Pool, the spot results for Helios are the best measure of our spot chartering performance. For the December 31st quarter, the Helios Pool earned a spot PCE of $91,417 per day, which is the highest spot rate the pool has ever earned for a quarter. On page 4 of the Investor Highlights material, you can see that we have 5 Dorian vessels on time charter within the pool, plus 1 MOL Energia vessel, indicating spot exposure of about 75-80% for the 27 vessels in the Helios pool.
And now I would like to pass it over to John have you put that as part of the closing comment.
Thank you.
John.
Where we're.
Happy to take questions.
Curious to ask please.
Thank you thank.
If you'd like to ask a question at this time. Please press star one from your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Press Star two if you'd like to withdraw your question from the queue.
For participants using speaker equipment may be necessary to pick up your handset before pressing the star keys.
One moment, please for we poll for questions.
Yeah.
Yeah.
Okay.
Thank you our first question will be coming from the line of Omar <unk> with Jefferies. Please proceed with your question.
Thank you Hey, guys good morning.
Congrats obviously on a very strong and I guess record quarter and Ted I just wanted to ask if you could repeat maybe the guidance figure you mentioned prefer the bookings to date did you say it was 100000 for 60% of the quarter.
Yeah, that's correct Omar in excess of 100000 and in excess of 60% of the days.
Theodore B. Young: Turning to the quarter ending March 31, 2024, we currently have over 60% of the available days in the Helios pool booked at a time charter equivalent in excess of $100,000 per day, reflecting the very strong rates booked earlier for voyages that will be carried out this calendar quarter. Please note that that rate includes both spot fixtures and time charters. Our Opex per calendar day, excluding dry docking costs, was $9,909, which was down somewhat sequentially from the prior quarter. However, reductions in lubricants in spares and stores drove a decline. Our time charter in expense for the four time charter in vessels came in at $8.4 million, which is lower than budgeted due to some fuel efficiency under performance claims. Total G&A for the quarter was $7.7 million, and cash G&A, that is, G&A excluding non-cash compensation expense, was about $6.3 million.
And that includes the the T C.
That includes the pool P fees.
Okay Alright. Thank you and then just wanted to ask maybe and I know Tim you eat you you touched on this but obviously you know last year was it was a very very strong year for B L. D. C. You had the big jump in U S that sports had the Panama Canal, which really all that offset the new building and as you mentioned that the.
The fleet was fully absorbed in you know so far things are correct that over the past few weeks and perhaps looked at maybe overshot to the downside.
And especially in relation to where say the low point was at this time last year and what do you see as driving the pullback in rates and when can we start to expect things to turn around.
Yeah.
Okay.
Tim.
Do you ask Tim So I'll, let him out.
We have we have the same master anyway, yes, yes.
Yeah. So.
I mean, you're right, we have a lower point now than than the than the drops of last year and Ria.
We kind of see these drop always in the in the first called at some point part.
But this year it was it was very.
Theodore B. Young: Of that $6.3 million, about $500,000 included aid to our Ukrainian seafarers and some employee bonuses. Thus, our core G&A came in at roughly $5.8 million, which is consistent with our expectations. Non-cash compensation expense for the quarter was $1.4 million, which is consistent with the guidance that we gave last quarter.
And and dramatic but also coming from exceptionally high plains. So let's say the sauce was aligns in one direction on all they're all in the other direction I think that that was she is posing an overreaction and and as I mentioned in the end I think we will see in the U S.
Inventory is still a.
Very very high so so even with a cold winter would not a critical thing.
Theodore B. Young: The reported adjusted EBITDA for the quarter was $133 million, which is the best quarterly adjusted EBITDA in our corporate history. Our adjusted EBITDA for the last 12 months was nearly $415 million. Turning to debt service, our cash interest expense, which we calculated as the sum of the line items, interest expense, excluding deferred financing fees and other loan expenses, and realized gain or loss on interest rate swap derivatives for the quarter, was $7.5 million, a decline of about $200,000 from the prior quarter, reflecting lower average debt and our all-in cost of debt of about 4.7%, which I would note is below current floating SOFR rates. Quarterly principal amortization remains steady at $13.3 million.
Where is that you have seen before so the.
He was running out of gas so I think the pricing.
We'll align again quickly as I said when I see you do.
They're the worst coldest is over.
And.
Also one of you all affects us as the Panama Canal, which we see every year that got off of the festive season in the U S are there.
So it's a decline in the country is essentially for the container business.
Dallas.
Passing in January opportunity, so the Chinese holiday. So so we see also that situation as a <unk>.
Temporarily blip.
And we think that we will return to being a.
Congestion is being being the norm rather than the exceptions and the as John mentioned more more local things on an LNG in containers.
This call me I mean, we still see the.
Changes are still way lower than it was last year, the number of tranches available and.
And if you think that the new kind of hours a day one it takes around several a day transit. So so if if you're at 100.
And.
It's 170, some ships Oh did you have to you via the cheese under them.
Almost 200 ships are more for the.
Second all of next year.
And many of them is that as a main trade route and then Ashish.
Yeah.
Are these congestion is coming back so it was I think though to your question on windows when we receive.
We think we think pretty soon.
Within this corridor, we will see this July because I think it's been.
Oh overshot on the donlin sites or so.
You see.
Correcting themselves, what do you call them and get into the holidays in there.
In China so.
That always part a little bit of a damper on the market and and also there.
There are some some cargoes on shown on the ward also are Iranian tons on this used to be a problem too.
Operator: Our trailing 12-month net income is about $304 million, and with average book shareholders' equity for the same 12-month period of roughly $911 million, we generated a 33.4% return on shareholders' equity. We are proud of this result because it not only reflects the strong profitability that our platform can generate, but it also shows that we've managed to keep our shareholders' equity at an appropriate level, balancing retention of capital while still paying out meaningful dividends to our shareholders. The $1 per share dividend declared last week and payable on February 27th to shareholders of record February 5th, 2024, brings our total dividends paid to $11.50 per share, or nearly $465 million in aggregate. Ladies and gentlemen, please stand by.
Two to care. So so it could take a little while before we receive it.
Yeah, the palms backbone considerable in this quarter, we do expect this to correct them.
Thanks, Tim Thanks.
I would just add that you.
We can never really know which quarter, it's going to happen. We can give you what we think is guidance.
On average for the rest of the year or whatever but.
Hopefully the market will react.
Question is when it bounces how well it bounces.
So.
As I've said I think before when when the market starts falling kind of forgets where to stop so.
So.
I think we're gonna add quickly quickly and then bounce back but.
Yes.
Operator: We're experiencing technical difficulties, and our conference will begin momentarily. Thank you. Once again, ladies and gentlemen, please remain on the line. Your teleconference will resume momentarily. Thank you. Thank you for standing by, ladies and gentlemen. Ted, please.
Yeah.
John.
We're looking for a bargain.
Yeah, No that's very helpful and that makes sense, John what you just said and obviously you know Tim they're very good color appreciate you're kind of going into detail there.
Then just a couple more for me and I'll turn it over maybe just first Oh sorry. The next question is just on the Red Sea clearly, it's been very very topical and front and center really.
Tim Hanson: Thanks, Rob. Again, we're positive about the long-term prospects of our business, but we are mindful of the near-term headwinds. With that, I'll pass this over to Tim Hanson.
Over the past few weeks.
How would you size up the impact of what's going on in the rescue with the diversion.
How do you size up and impact on the D. L. G E trade say in comparison to what we've been seeing or had seen in the in the Panama Canal last year.
Tim Hanson: ... Yeah, good day, everyone. And thanks for inviting me.
Tim Hanson: As always, the VLTC market created some interesting times for the participants. As a record-setting strength of December contrasted sharply with the market during January 2024, the quarter ending December 31 in 23 saw record-breaking high freight levels for VLTC.
It's not so obvious because they cause.
The trade show that can now through the Suez Canal was almost kind of caused by the congestion that too but when Panama.
Also the.
Tim Hanson: The primary drivers of the firm's freight market were the widening U.S.-Asia arbitrage, several new restrictions applying to the Panama Canal, and subsequent vessel routing decisions amidst the uncertainty about the Panama and the Suez Canal transit. Turning first to the arbitrage in North America, production of natural gas liquids continued to increase inventories to record levels. This was amidst an unseasonably warm start to the winter. The increased supply of LPG lowered U.S. export prices, offsetting some of the short-term concerns about Asian import demand, as the latter was also experienced in Albuquerque. The effect of the drought in Panama has been widely discussed.
And now I'll itself I'm not sure the Red Sea trade.
It has.
The main the main VLCC trade in and out of the Red Sea is out of.
Jordan.
And Jordan, sorry, not out of Jordan out of Saudi Arabia Gamble.
Jordan has absorbed some of the cargos.
That.
What otherwise are gone.
East from Campbell.
And.
Display some cargoes that would've come from the state.
So that is a net negative on that on the ton mile on the other hand.
Tim Hanson: The Panama Canal introduced new restrictions on VLTC transit at the end of October. A severe reduction in water levels necessitated a reduction in daily transit, with the cost of booking transits or VLTCs becoming more expensive. By the first week of November, options for new Panama Canal transits reached a peak of just under $4 million, and some operators face the real possibility of not being able to secure a northbound transit. VLDCs were opting for alternative routes, some turning around mid-Pacific to avoid uncertainty of the Panama Canal, and a few opting to ballast around South America, resulting in increased toll miles, as well as impacting lead time for owners and The schedule impact was eventually pried into the freight levels, and lay currents were fixed almost two months ahead of the fixing window.
Saudi Claude the.
They brought the loading on the cargoes from Jordan too.
The rest of the Lora, which.
But it won't happen.
All right.
That total number of ships coming out of it.
Out of that.
The Red Sea.
Was I think.
Florida five a month.
Campbell.
Representing about 30% of the exports from Saudi Arabia.
So.
It's not it's it would be closer in a flux I don't think it's easy to predict.
Nick.
Eventual impact over there.
The.
Hum.
Most entities in that region will be.
Got it.
I don't know.
Tim Hanson: The uncertainties about scheduling and the cost impact apply for vessels in both ballast and in laden, with charters facing potentially restrictive high auction prices at the Panama Canal or choosing the longer laden passage via the Suez Canal. On average, the quarter ending December 23 averaged 25 VLDCs ballasting to the U.S. Gulf VSUs per month, this compared to an average of 13 VLDCs per month on the quarter prior.
Well I appreciate you attempting to or at least you know summarizing all of that that's helpful context as well.
Thanks, John and then maybe just a final one for me just on the the the new building and just kind of thinking about Uh Huh, John Chris Your comments about <unk>.
Outfitting the existing fleet to carry ammonia I guess just one other.
Question on that would be you know what what is the cost look like to upgrade for ammonia and then also in terms of the new building is there is there a price difference and ordering at B L. A C versus a V. L. G C and maybe just some I guess multiple questions, but what's the difference between a b L. A C and D. L. G C I guess.
Tim Hanson: The Suez Canal routing was preferred for vessels in ballast and laden to such a degree that in December, the Baltic Index saw few rates fixed under the agreed index of Houston Cheaper via Panama Term, with the bulk of fixtures being reported on a Houston cheaper via Suez Rail. The shift in pricing norms made assessment of the market more difficult, but it testifies to the significant shift in trading routes for the VNDCs over the period. However, geopolitical tensions in the Middle East made the routing via sewers a short-lived solution.
Going forward.
Yeah Omar it.
It is.
It is.
Our cost of debt.
Although a number of ships is going to be quite low but are we are we have been looking into this for some years now.
We think that it is.
Significantly less than $5 million, and probably even lower than that when it is amortized over a number of ships.
Tim Hanson: When drone and missile attacks in the Red Sea escalated during December, operators began to decline the Red Sea route on grounds of safety, and VLCs were pushed towards routing via the Cape of Good Hope. For the first time in several years, more than 10 million tons of disease ballasted via the Cape of Good Hope in one month. As a result, the Adelton Mines supported the freight market in the following terms.
So it is a.
It is something that is.
Let's say.
It takes time.
But it does not add significant cost.
To Carryout conversion.
Omar we're mindful of that because.
Tim Hanson: Reflecting on how conditions can change, at the beginning of January, several factors increased the feed length. Forecasts of a cold snap in January in the U.S. created anticipation of a sudden increase in domestic LPG consumption, which began to be priced into the product market and reduced the West-to-East arbitrage, one of the key drivers. Also, the Far East index prices were on the decline amidst Asian importers anticipating reduced import demand due to lower demand for heating.
As it applies to art, not Walmart, yet, but some of our ships.
Also applies to a good number of the World fleet.
So I people.
But we shouldn't get too carried away with new building dedicated ammonia carriers are on a good part of that fleet.
Thankfully it a V L D CS.
Could be.
You know maybe less efficient.
But I think that's still.
Carey ammonia went somewhat vacations.
Tim Hanson: Therefore, the arbitrage started to narrow, impacting the normal arbitrage economy. During January 6, new buildings, or 29% of the expected deliveries in 2024, were delivered, creating a sudden increase in the vessel supply for the first half of the quarter of 2024. Congestion in the Panama Canal declined significantly and rapidly this month.
Great.
Understood. Okay. Thank you I appreciate the time I'll turn it over.
Yeah.
Thank you. Our next question is from the line of I've seen Wagner with fairly Securities. Please proceed with your questions.
Okay.
Hey, guys just a quick question from me.
Tim Hanson: Contributing factors include the rerouting of ENTCs via CAPE, lighter container vessel traffic, and increased rainfall in the Panama Canal. In Italy, this will unfortunately create a temporary oversupply in both the US Gulf and Far East ports, putting pressure on the race, as we've seen during this quarter, which should normalize as vessel supply is absorbed. Our freight market can be volatile and is subject to a wide range of factors that may influence short-term freight rates, but we also have a number of strong cyclical and security factors in our favor. For example, a warmer spring climate in North America will contribute to more LPG supply at more favorable prices. The anticipation going forward is therefore more widespread, and the rest of the South. We expect... Only 15 remaining new buildings to deliver this year compared to the 42 that were successfully absorbed last year. We expect the new building deliveries to be absorbed based on the forecasted increase in exports. We continue to see LPG take market share from other fuel sources, and in 2024, significant growth in propane dehydration and steam cracking plants is expected, particularly in Asia. The Panama Canal congestion issues are far from solved.
As you just discussed their rates have been quite high over the last couple of months and this winter are some astonishing astonishingly high.
But you know you'd be 91000, roughly on the spokes and pool for the fourth quarter.
But again, that's not really at the <unk>.
We saw it go to 140 and now you're talking about the hungry, Okay, which I, which I guess makes sense us she's going or say some coverage on the way up but my question is now.
And this is now a below cash breakeven levels.
So opex what kind of levels are you fixing out today and it doesn't work differently on the way down as well.
Well, Oh see I'd say, a couple of things first of all just to be clear on.
The results that we mentioned going forward. There is a measure of time charter ships in there, which are which are lowered the spot the spot market rates that are booked in that forward number or are theyre very attractive.
John C. Lycouris: The daily transit numbers are still 10 transits less per day than in July 2016, and it's only expected to revert to normal levels during the summer. Rerouting of VLTCs and other segments back towards the Panama Canal will again increase congestion, and in addition to the VLTC new buildings, there is an expected delivery of 73 LNG and 109 new Panamax container ships in 2024. This will increase the demand for passage of the canal, and we thus expect congestion to return and to be the norm rather than the exception in the canal. Routing via sewers and caves for VLTCs is thus expected to become more pronounced in 2024 due to the uncertainties of forecasting Panama Canal transit and costs. Thus, we do remain positive about the medium to long-term prospects for our business while acknowledging that short-term volatility is ever-present.
And as for current fixing them like that's pretty commercially sensitive information, we as a general matter don't really comment on it but.
Kim off you gave a little bit more he may but I'd say in general and when we've thought when he has described his strategy dies.
Look our guys have been proven to be pretty good at figuring out when cargos are going to be available and how many ships are going to be able to meet the lake in and kind of flexing or our planning around that.
Tim if you want to add anything to that feel feel free or we're not.
Okay.
Yeah, you can say that.
The drop was pretty quick so only thing is that that's been chased it was kind of like one of us in the in the front. So it's hard to say.
Couple of the way down but it is.
Actually we had to face pretty thoughtful one already so so it didn't have much to fix in the fixing window and when the market drops. So so most of our positions cause commercially available the more than a dozen of months ahead from from now so so as the market is has been dropping then.
Doesn't it takes that far ahead and so.
So we are not really that much of a depiction of window, yet so well.
Well see if it turns around before we get there but.
Yeah.
Thanks, Okay.
John C. Lycouris: With that, I'll pass you over to Mr. John Lycouris. Thank you very much, Tim. At Doreen LPG, we firmly believe that we should be part of and provide long-term solutions to the world's decarbonization objectives and goals. Our investment in scrap has continued to deliver strong returns. Our average daily net savings over the quarter on our scrubber vessels stood at about $3,000 per day or about $3.4 million for the quarter. Fuel differentials between high sulfur fuel oil and low sulfur fuel oil averaged about $202 in the last quarter of 2023. The pricing differential of the LPG as fuel versus fuel oil, low sulfur fuel oil, stood at about $183 per metric ton, which was helpful to fuel fuel engine vessels when operating with LPG.
And just you know are you fixing window now in the market in general is that early March now or where are we now.
Okay.
Got it.
Okay.
Okay.
Sorry, but we don't we don't want to go too much into them.
Marty Mckenna.
It's commercially sensitive.
Okay.
Okay understood. Thank.
Thank you. Thank you thanks Christine.
Thank you.
At the end of the question and answer session I will now turn the call over to John Hazard for terrorists for closing remarks.
Thank you Rob Thank you for your questions.
<unk> module with the question.
Have a good quarter.
February.
See you next time.
This will conclude today's conference you may now disconnect. Your lines at this time and have a wonderful day.
John C. Lycouris: We now have a total of 14 scrubber-fitted vessels and one charted vessel, and we plan to retrofit another vessel with a scrubber unit in the second quarter of 2024. The installations of energy-saving devices and the silicon-hall coatings on our vessels have provided significant performance improvements in fuel savings, reduction of the fleet's CO2 emissions, and improved CII ratings. Besides our vessel, Captain John NP, which was originally built as a VLGC, or VLAC, as they are now called, we are upgrading some of our vessels to carry ammonia, as it is quite feasible for a good portion of the world fleet to carry out such upgrades. The EU emissions trading system that came into effect on January 1st, 2024 is applicable to all ships calling at EU ports.
John C. Lycouris: Shipping companies will surrender their 2024 EU allowances at the latest by September 2025, and every year thereafter, and it will reflect the CO2 emissions while their vessels are trading in EU waters. In line with the end-user-pays principle, the cost of complying with the EU ETS is passed by the owner to the time-charter, who is ultimately responsible for the purchase and transfer of the monthly EU allowances to the owner's account.
John C. Lycouris: For spot voyages, we expect the EU allowances to be added to the freight invoice in line with the end-users-pays rule. In continuation of Dorian's commitment to sustainability and improving the company's greenhouse gas profile, we have recently invested in companies to seek solutions to climate issues from carbon and methane emissions. Payonada is planning to market a compact modular carbon capture system for small and mid-sized carbon emitters that will be applicable to many industries, including marine applications. The patented technology claims 30% better efficiency than conventional carbon capture technologies as it works with a large array of hollow fiber contactor membranes of absorbent solutions, achieving about 90% capture of carbon dioxide in post-combustion flue gas.
John Constantine Hadjipateras: The second is AMVALON, which focuses on the avoidance of methane gas emissions from wasted resources, such as landfill gas, biogas, and waste biomass. These emissions, instead of being vented or burned on site, are converted into high-value carbon-negative and carbon-neutral fuels like bio-LNG, bio-LPG, green methanol, and green ammonia. The modular and scalable technology can be situated at methane emission sites where it can be transformed into high-quality thin gas, and other treatment consolidated and delivered to the energy, marine, and aviation industries. Finally, our recent new building contract to build a new VLGC-VLAC at Hanwha Ocean Yard in South Korea is in line with our commitment to employ capital where we see commercial and financial opportunities for investment. We believe that the future green hydrogen economy will largely depend on large quantities of ammonia applied to the seas on dedicated vessels.
John Constantine Hadjipateras: Besides earning good economic returns on such trades, we also firmly believe that we should be part of and provide long-term solutions to the world's decarbonization objectives and goals. Now, I would like to pass the floor over to John Hadjipateras for the closing comments. Thank you very much, John. We're happy to take questions from anyone who cares to ask them, please. Thank you. If you'd like to ask a question at this time, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Operator: One moment, please, while we poll for questions. Thank you. Thank you. Our first question will be coming from the line of Omar Nokta with Jeffreys. Please proceed with your question. Thank you. Hey, guys. Good morning.
Omar Nokta: Congratulations, obviously, on a very strong and, I guess, record quarter. And Ted, I just wanted to ask if you could repeat maybe the guidance figure you mentioned for the bookings to date. Did you say it was $100,000 for 60% of the quarter? Yeah, that's correct, Omar, in excess of 100,000 and in excess of 60% of the data, and that includes the TC. That includes the pool PCs.
Theodore B. Young: Okay. All right. Thank you. And then, just wanted to ask maybe, and I know Tim touched on this, but obviously, last year was a very, very strong year for BLGC. You had the big jump in U.S. sports. You had the Panama Canal, which really, oh, that offset the new buildings.
Tim Hanson: And as you mentioned, the fleet was fully absorbed. You know, so far, things have corrected over the past few weeks and perhaps looked, maybe, overshot to the downside, and especially in relation to where, say, the low point was at this time last year. What do you see as driving the pullback in the race, and when can we start to expect things to turn around? Tim, yeah, you asked Tim, so I let Tim out. We have the same answer anyways.
Tim Hanson: Yeah, so. I mean, you're right, we have a lower point now than the drop of last year, and we are, We're kind of seeing these drops always in the first quarter at some point, but this year it was very... quick and dramatic but also coming from an exceptionally high point. So you can say the stars were aligned in one direction, and now they are in the other direction.
Tim Hanson: I think that what we see is both an overreaction, and, as I mentioned at the end, I think we will see U.S. inventory is still very, very high. So even with a cold winter, it would not create the same worries that you have seen before of the U.S. running out of gas. So I think the prices will align again quickly as soon as the worst of the cold is over. And also, one of the other factors is the Panama Canal, which we see every year that after the festive season in the U.S., the number of transits decline, especially for the container business, because they are less busy passing in January and up to the..., the Chinese holiday. So we see that situation as a temporary blip, and we think that it will return to congestion being the norm rather than the exceptions, and as John mentioned, more buildings on LNT and containers, so we see this coming, and we still see the transits are still way lower than they were last year, and if you think that the new canal today only takes around seven a day to transit, so if you add a hundred and there are 170 These contestants are coming back.
Tim Hanson: So I think, you know, to your question, when is it, when will we see a... have returned? Thank you. Pretty soon, within this quarter, we will see this aligned because I think it's been overshot on the downward side, so we see these things correcting themselves. But we're coming into the holidays in China soon, so that always puts a little bit of a damper on the market, and also there are some... bounce back, but still within this quarter, we do expect this to crack up.
John Constantine Hadjipateras: Thanks, Tim. Thanks, Tim. I would just add that, you know, we can never really tell which border is going to happen. We can give you what we think is guidance for an average for the rest of the year or whatever, but hopefully, the market will react. And the question is, when it bounces, how well it bounces.
John Constantine Hadjipateras: So, as I said before, when a market starts falling, it kind of forgets where to stop. So I think we're going to hit bottom quickly and then bounce back. Omar, there you go. Maybe you got more.
Omar Nokta: We're looking for. Yeah. No, that's very helpful.
John Constantine Hadjipateras: And that makes sense, John, what you just said, and obviously, you know, Tim, very, very good color. Appreciate you kind of going into detail there. I did just, you know, a couple more for me, and I'll, and I'll turn it over maybe just first. No, sorry.
John Constantine Hadjipateras: Next question is just on the Red Sea. Clearly, it's been very, very topical and front and center really over the past few weeks. How would you size up the impact of what's going on in the Red Sea with the diversions? How do you size up that impact on the VLGC trade, in comparison to what we've been seeing or had seen in the Panama Canal last year? It's not so obvious, Omar, because, because, um... The trade through the Suez Canal was almost caused by the congestion in Panama.
John Constantine Hadjipateras: So the Suez Canal itself, I'm not sure. The Red Sea trade, the main VLDC trade out of the Red Sea, is out of Jordan, and in Jordan, sorry, not out of Jordan, but out of Saudi Arabia, Yambou. And Jordan has absorbed some of the cargoes that would otherwise have gone east from Yarmouth, and that has displaced some cargoes that would have come from the States. So that is a negative on the ton-mile. On the other hand, Saudi could divert the loading of the cargo from Jordan to Rastanurah, which probably will happen.
John Constantine Hadjipateras: So the total number of ships coming out of the Red Sea was, I think, four to five a month out of Yambu, representing about 30% of the exports from Saudi Arabia. It's not because we're in a flux; I don't think it's easy to kind of predict what the eventual impact of the The, The hostilities in that region will continue. Got it. I will tell you that I don't.
Omar Nokta: Well, I appreciate you attempting to, or at least, you know, summarizing all that. That's helpful context as well. Thanks, John. And then maybe just a final one for me, just on the new building and just kind of thinking about, you know, John Lycouris, your comments about outfitting the existing fleet to carry ammonia. I guess just one question on that would be, you know, what does the cost look like to upgrade for ammonia? And then also, in terms of the new building, is there a price difference between ordering a VLAC versus a VLGC? And maybe just, I guess, multiple questions, but what's the difference between a VLAC and a VLGC, I guess, going forward?
John C. Lycouris: Uh, yeah, Omar, it, it, it, it, it is, uh, uh... It is a cost that, over a number of shifts, is going to be quite low, but we have been looking into this for some years now, and we think that it is significantly less than 5 million and probably even lower than that when it is amortized over a number of shifts. So it is; it is something that is. Let's say it takes time, but it is not a significant cost to carry out those conversions.
John Constantine Hadjipateras: And Omar, we're mindful of that because as it applies to our, not all our ships, but some of our ships, it also applies to a good number of the world's fleets. So, people, we sort of get too carried away with new building dedicated ammonia carriers when a good part of the fleet, the existing fleet of VLGCs, could be, you know, maybe less efficient than a new ship, but they could still carry ammonia with some modification, and that would be great. understood. Okay. Well, thank you. I appreciate your time. I'll turn it over to you.
Eustine Wagen: Yep. Thank you. Our next question is from the line of Eustine Wagen with Family Securities. Hey guys, Just a quick question from me. As you just discussed, your rates have been quite high over the last couple of months, and this winter, they are astonishingly high. But you booked 91,000 roughly on the spot and pool for the fourth quarter. But again, that's not really at the highest, as we saw spot rates go to 140. Now you're talking about the 100k, which I guess makes sense as shift owners take some coverage on the way up. But my question is, now that spot rate indices are now below cash rate given levels and close to OPEX, what kind of levels are you fixing up today? Does it work differently on the way down as well?
Theodore B. Young: Well, I can say a couple of things. First of all, just to be clear, on the results that we mentioned going forward, there's a measure of time charterships in there, which are lower. The spot market rates that are booked in that forward number are very attractive.
Theodore B. Young: And as for current fixing, that's pretty commercially sensitive information. We, as a general matter, don't really comment on it. But, you know, Tim wants to give a little bit more. He might. But I'd say in general, when we've talked, when he's described his strategy to us, look, our guys have been proven to be pretty good at figuring out when cargoes are going to be available and how many ships are going to be available to meet the lake and kind of flexing our planning around that. Tim, if you want to add anything to that, feel free or not. Yeah, you can say that, you know, the drop was pretty quick.
Tim Hanson: So only things that have been fixed were kind of like what was in there, in the front. So you take a couple on the way down, but actually, we had fixed pretty far forward already, so we didn't have much to fix in the fixing window when the market dropped. So most of our positions come only available more than a month ahead from now. So as the market has been dropping, people don't fix that far ahead.
Tim Hanson: So we're not really that much of a fixing window yet. So we'll... We'll see if it turns around before we get there. Yeah. Thanks. And just, you know, Dado, are you, you know, the fixing window now in the market in general? Is it early March now, or where are we? He was making conspiracy theories.
Tim Hanson: Amen. Sorry, but we don't want to go too much into this for Mark McHenry, who is commercially sensitive. Okay, I understand. Thank you. Thank you. Thank you. We've reached the end of the question and answer session. I'll now turn the call over to John Hadjipateras for his closing remarks. Thank you, Rob. Thank you for your questions, my two valuable questioners, and have a good quarter after February, and see you next time. This will conclude today's conference. You may now disconnect your lines at this time and have a wonderful day.