Q4 Ardmore Shipping Corp Earnings Call and Investor Day

Core remotely and again for remote questions. Please send them to our door at <unk> Dot com.

So turning first to slide six for highlights.

We're pleased to report another successful year for Ardmore with earnings of $113 million or $2.71 a share continuing what is now a multi year trend.

Our fourth quarter performance reflects robust product and chemical tanker market conditions with adjusted earnings of 26 million or <unk> 63, a share and with further strength building into the first quarter.

32500 per day for the fourth quarter and 35400 per day, so far in the first quarter with 60% booked.

And our chemical tankers on a capital adjusted basis earned 29300 per day for the fourth quarter.

<unk> 31, 30100 per day, so far for the first quarter with 70% booked.

Our markets are clearly experiencing significant strength as a result of geopolitical and climate related trading restrictions.

Bolstering already tight supply demand fundamentals.

And which all of which are going to be the themes and focus of our presentation today.

Well, we continue to execute on our long standing capital allocation policy today were declaring another quarterly cash dividend of 21 cents per share consistent with our policy of paying out one third of adjusted earnings.

As a part of a gradual fleet upgrade and modernization plan. We've acquired a 2017 built emaar tanker while also simultaneously selling our 2010 built ardmore seafarer.

In addition, we've opportunistically chartered out one of our chartered in them ours to realize the 7500 dollar days spreads.

And a profit of $2 7 million over the remaining one year period.

And overall, we believe that Ardmore is in an excellent position to benefit from these ongoing strong market conditions.

So turning to slide seven.

Our near term product and chemical tanker market outlook.

I wanted to take the opportunity now to briefly introduce the geopolitical and climate related trading restrictions that have been affecting our market.

Instructions in the Red Sea and the consequent rerouting of vessels around Africa are adding significantly to voyage lengths and therefore, the tonne mile demand.

But before we go further we need to remember that numbers aside we're dealing with real people with real world issues and I'd like to acknowledge the key role of our seafarers.

In this increasingly dangerous world and to emphasize that their securities are our top priority.

But pure economic standpoint, as you can see from the graph on the upper right.

Refined product ton mile demand is up 11% year on year.

With the Red Sea disruptions, playing a substantial role.

The same time the impact of the refined product embargo persists.

Further exacerbated by European diesel inventories approaching historical lows.

And in addition restrictions in the Panama Canal have reduced traffic by up to 30% overall and quite a bit more for mr's.

The bottleneck is resulting in prolonged voyages and reduced effective supply of all ships.

Product tankers.

The aggregate impact of all these disruptions are illustrated on the graph in the lower right.

Well demand fundamentals remain compelling.

And not just the demand side, but on the supply side, we see very low levels of scheduled Newbuild building deliveries.

For at least the next two three years, which should really limit fleet growth.

With that I'm happy to hand, the call back to Bart.

Okay not the goal.

Tony.

Moving to slide eight.

Although it continues to build upon its financial strength.

The result of our effective cost control reduce debt levels and access to revolving credit facilities, we've managed to lower our breakeven level to $13900 per day.

A noteworthy achievement during a period of elevated interest rates and high inflation.

In addition, we have a strong liquidity position with nearly $50 million of cash on hand at the end of the quarter.

We have a total debt of just over $125 million, representing a leverage level of approximately 20%.

<unk> is focused on optimizing performance closely managing cost in this inflationary environment, while preserving a strong balance sheet.

Turning to slide nine for financial highlights.

Just wanted to reiterate how pleased we are with the continued strong performance with adjusted earnings of $2 71 per share for the full year and $60 <unk> per share for the fourth quarter.

Correspondingly reporting strong EBITDAR for the year and the quarter.

Continue to frame EBITDA as an important comparable valuation metric against our <unk> reporting peers.

I won't go into all the details here there is a full reconciliation of this presented in the appendix on slide 43.

Our significant revolving debt capacity has allowed us to manage our leverage levels and reduce our interest expense even in this elevated rate environment.

Also please refer to slide 48 in the appendix for our first quarter guidance numbers.

Moving to slide 10.

In accordance with our energy transition plan.

As part of our ongoing Drydocking. This program, we've made some significant investments in our fleet to further improve operating performance reduce emissions and enhance earnings.

2023, we completed seven dry dockings with a total capital expenditure of nearly $40 million.

Of which $25 million was spent on scrubber installations and a number of other energy efficiency technologies.

<unk> in more detail later in this presentation.

As we complete these dry dockings will have more than half of our EMR fleet outfitted with carbon capture ready scrubbers.

Importantly, as you can see from the chart in the upper right. The majority of our remaining dry dockings during the first quarter. So we'll have the benefit of our full fleet and its earnings power for the balance of the year.

Also noteworthy we had very strong on higher availability for the fourth quarter practically 100%.

The result of the close coordination of our teams at sea and onshore.

Turning to slide 11.

Here, we're highlighting our significant operating leverage.

In the chart for every $10000 per day increase in TCE rates.

Earnings per share is expected to increase by approximately $2 30 annually.

With free cash flow generation was nearly $100 million.

Over the same time period.

Given the range of TCE rates shown on this slide.

It is important to note.

We've recently been booking at the upper end of the scale.

If these rates were to take hold more widely you would naturally have a material impact on our earnings.

This is why we're really excited about the market outlook and we find our boys position compelling.

I'm going to hand, it back to Tony to sum up the earnings portion of our presentation before we transition to the industrial Investor Day section.

Yes. So just briefly in summary, first regarding the market, we're seeing already robust condition strengthening into the first quarter on the back of geopolitical and other climate related disruptions and with supply demand fundamentals remaining.

Pretty favorable.

And then with regard to the company, we continue to perform well on both an absolute and relative basis.

Our strengthening balance sheet gives us the ability to execute on all of our capital allocation priorities priorities simultaneously, including paying a dividend representing one third of earnings.

We're investing in our fleet to improve efficiency and reduce emissions.

Has the added virtue with simultaneously improving earnings.

And regardless of market conditions as always our efforts are focused on driving performance today, while positioning ardmore for long term success.

With that that concludes the.

Earnings portion of the presentation today.

And we're going to move now to the more of the Investor day content.

And Bart is going to give give a more in depth view of the company and our strategy.

And then going out is going to provide his insights on how we are how we're translating.

The strong market conditions into earnings.

Thanks, Tony.

Turning to slide 14.

It comes to strategy.

<unk> been very consistent over the years.

With a focus on MLR product tankers, and chemical tankers and the overlap that these ships trade it.

Furthermore, the company's development has been marked by a gradual increase in scale will building organizational capability.

Today, our global platform with our shoreside teams strategically located across key regions.

Working closely with our <unk> colleagues on board of modern fuel efficient fleet.

Thus the scale to service a diverse customer base.

We also find ourselves city juncture.

Where our nimbleness and agility will take on even more significance.

Changing market conditions, driven primarily by the energy transition, which we'll discuss in detail.

We're well positioned to take advantage of opportunities in these dynamic times.

Turning to slide 15.

And our board.

Our guiding principles, which we frequently discuss can be captured as a combination of performance and progress.

Highlighted just a few notable examples on this slide how we do this.

Both absolute and relative performance are very important to us.

A significant emphasis on our performance relative to our peer group across the key number of metrics.

Entire staff is collectively measured this way.

Leading to an exceptional degree of performance focus and team effort.

Here's a powerful flywheel effect between this performance and our company's progress.

Performance today allows us to invest in progress, which further enhances our future performance.

With a diverse and talented team.

On collaboration between our seafarers and shore, we're driving progress at Ardmore and across the shipping industry.

Uncovering and executing opportunities that might otherwise be missed.

Moving to slide 16.

When we turn our attention to governance.

Long standing and key part of <unk> philosophy and approach.

Inception in 2010.

Our IPO in 2013.

Well before the industry recognized Weber rankings were even created.

This is a cornerstone of our business today.

We're very pleased that our principled approach to corporate governance continues to set a leading standard within the industry.

We're proud of the recognition that we are once again the number one ranked publicly traded company tanker company in the Weber ESG scorecard.

Essentially.

When you invest in Ardmore, you invest in a company committed to both excellence and integrity.

Turning to slide 17.

We will discuss how we balance the energy transition with what can be terms energy reality.

The challenge Intel's, increasing our fleet's efficiency and reducing emissions, while continuing to meet the ongoing demand for the transportation of refined products and chemicals.

Ardmore, we recognize that this energy transition will take time.

Evolution not a revolution.

With this in mind, we introduce the energy transition plan in early 2021 is a natural extension of our strategy.

<unk> on seizing opportunity decarbonising and continuing to build value in a changing market environment.

Plan is rooted in a sound commitment to deliver tangible results today in terms of efficiency gains and carbon reduction.

While strategically positioning ardmore for the future.

Most importantly, it fosters a forward looking mindset rooted in performance reality.

Central to this approach was the establishment of an internal team dedicated to the energy transition.

And possesses marine engineering, and naval architecture expertise and operational experience.

Led by our director of innovation, Gary Noonan.

Steve is focused on working collaboratively with customers technology providers, and our broader organization to develop valuable projects and investments for our fleet.

Crucial aspect of their work involves true experimentation.

The development of novel as well as practical solutions to execute across our.

Additionally, I'd like to emphasize the valuable support and guidance provided by our newly formed sustainability Committee of our board.

Is chaired by Dr. Kirsi Tikka, who holds a Phd in naval architecture and has extensive experience in the design and classification of vessels.

She is joined by Helen Tipton head of Claris Brook shipping and match Berglund, the former CEO of Pacific based on shipping.

In summary, this dynamic plan aligns seamlessly with our overarching principles of performance and progress.

Turning to slide 18.

Let me focus on some of the key initiatives outlined within the energy transition plan.

So we just discussed we're active in deploying energy efficiency technologies across our fleet.

In addition, with the expected increase in demand for the chemical and specialized product trades, including renewable fuels, we expect to gradually shift our fleet composition and revenue mix more toward these cargos.

Furthermore, we emphasize our commitment to collaboration through energy transition projects, which involve partnering with customers as we aim to address their specific energy transition priorities.

Since introducing this plan in 2021, we've really come a long way.

<unk> are fully embedded in our culture today as we turn to the next slide we will examine some key ETP technologies.

Moving to slide 19.

This slide highlights some of the latest technologies, we have implemented last year and are piloting this year.

Notably since the inception of our energy transition plan less than three years ago.

Truly embraced the spirit of experimentation conducting diligence on over 200 potential solutions and successfully implementing 14 of them to date with returns ranging from 40% to well over 100%.

As you can see in the image our team has examined a wide range of efficiency projects across all areas of our ships.

The propeller to the engine room to the bridge and beyond.

This also extends assure to cutting edge software utilized to optimize performance.

On the next slide we will drill down into a case study for one of the solutions in more detail.

Turning now to slide 20.

Installation of micro boilers on our vessel is a great example of one of these very practical investments.

Modest cash outlay of 225 $225000 per ship to.

So the strong return of 40%.

This unit creates tremendous efficiency when our vessels are import.

Enabling us to reduce the level of fuel typically consumed by the ship.

Larger main boiler by harnessing the heat naturally admitted from the operation of our generators.

By the end of the first quarter, 50% of our fleet will have these units installed.

Importantly.

We undertake multiple projects of this nature to cumulative impact to our performance is significant.

Moving to slide 21.

We highlight our long standing capital allocation policy.

It remains our guidepost in one we know that we frequently discuss with all of you.

Given our strong financial position and low breakeven.

<unk> ability to pursue all of our capital allocation priorities simultaneously.

With this strong earnings environment, and a robust financial position, we are pleased to declare another dividend.

Since the re initiation of our quarterly dividend policy in the fourth quarter of 2020 to Ardmore has paid $50 million of total dividends to our shareholders.

Represents nearly 10% of our market capitalization.

As discussed earlier, we've invested significantly in our fleet's efficiency, improving performance and ultimately the quality of earnings.

In addition to these investments as Tony described.

<unk> taken advantage of some selective transactions to modernize our fleet.

By acquiring a 2017 Korean built eco designed mr's tanker, while concurrently executing an agreement to sell our 2010 built Ardmore seafarer.

Put this into perspective, when considering the increased fuel efficiency of the new vessel and avoiding the expense of upcoming dry docking for the <unk>. We see this as an interesting investment effectively buying seven vessel years.

And our cost equivalent to the current average annual depreciation rate.

Dampening our balance sheet.

We aim to sustain leverage.

<unk> market cycles.

Good morning, a resilient financial position.

In a high quality of earnings, while giving us the foundation needed to Opportunistically execute well timed investments.

Turning now to slide 22.

Just discussed <unk> team is focused on leveraging our platform and consistently creating value through shipping cycles.

An industry challenge by technological and regulatory uncertainty, we recognize the volatile and dynamic nature of the shipping landscape.

At Ardmore, we're built to thrive in such conditions.

<unk> I want to emphasize that our purposeful strategy.

Energy transition plan.

Capital allocation plan and dedicated team.

C and assure are all aligned and focused on generating long term value for our shareholders.

I'm very excited to hand, it over to you and hear what he has to say about the volatile tanker markets and how <unk> is delivering industry leading performance.

Thank you Bob and good afternoon.

Good to be back in New York and to present to you on another successful year and on why we believe there is more to come.

For the next 15 minutes.

Take you through main drivers on the demand side.

Touch on supply fundamentals.

Then I will provide some real life examples of Paul Ardmore continues to capture the full benefit of these extraordinary markets.

Turning to.

Turning to.

Slide 25.

This is the world today.

This slide highlights some of the key changes and cargo movements over the past two years.

You see how cargos move today.

Contrast, it in Red this is Howard.

They used to move before.

Difference in voyage length Red versus Green represents the increase in the demand picture and product tankers.

What is behind these very long distance trades.

Again rich.

Europe is structurally short refined products.

Diesel and jet fuel.

It has been like that for a while.

Europe has been increasingly sourcing its refined products from overseas.

That was purely for economic reasons.

Largely on the account of Europe's aging refinery system.

Add on top of that.

Have you refined products embargo.

More diesel from Russia.

European product inventories around historical lows.

Hello, those shortfalls.

Long haul imports from the U S and from east of Suez markets.

Replacing short haul voyages.

What used to be a one week voyage.

Baltic Russian imports to northern Europe, or the black sea to the Mediterranean.

And all it takes three to five weeks.

A significant jump in itself.

On top of that you add substantial disruption in the Red Sea, which all of us see and read about in the news every day.

So navigating around the Cape of good hope to avoid the Red Sea.

This adds another 30% to 70% and voyage lengths, depending on origin and that is on top of what is already.

A very long voyage to begin with.

Then in the west completely unrelated to any geopolitical events. The Panama Canal is essentially run out of water.

How much traffic through the canal has reduced substantially.

You can see what used to be a very typical trade on the left in red.

From Houston to places like Ecuador, and Peru on the West Coast of South America.

Crossing the same products from Asia is about three times the voyage length, and we are seeing exactly this play out.

For the past 150 years, the world has relied on the Suez Canal and later, the Panama Canal to connect global trade at significantly shorter distances.

Well today, once again rich and chips.

Going around the Cape.

So to summarize what other factors in play long term demand drivers Europe structurally short diesel two separate yet concurrent geopolitical events, Russia, Ukraine and the reasons of the recent events in the rest of the year.

And third climate related changes.

And water shortages in Panama.

This confluence has resulted in a substantial increase in ton miles and remarkably tight supply and product tanker markets.

Slide 26 will provide a more detailed on the points I've, just made and I will not run through them one by one but the transponder rights paints a clear picture.

The number of product tanker.

Tanker transits through the Suez Canal is down by 60% and decreasing further.

The number of Panama Canal transits is down by 40% it.

It is an evolving situation and the trend line continues to point Don.

Turning to slide 27, where we continue on the theme of demand drivers.

As Bart alluded to earlier.

The transition is unfolding as an evolution.

Not a revolution.

Demand for oil remains a steadfast factor.

<unk> in the upper right graph the international Energy Agency.

Aligning with industry projections for <unk> continued growth in oil demand.

John the persisting demand for oil there is a consistent pattern of refinery expansion and the east strategically located near points of production.

This expansion resulted in heightened ton miles for product tankers meeting the consumption demand in the west.

Adding another layer the chemical sector a market we actively participate in this.

For substantial growth as well.

This is attributed to the significant petrochemical capacity set to come online in Asia over the coming years.

In summary, then these robust long term demand drivers point to continued strength in the product and chemical tanker markets.

Moving to slide 28 supply.

Matrix on the left provides a visual of the evolution and deep the tightening of tonnage supply in our industry.

The two dimensions, our average age of the fleet.

Size of the order book.

If you look at the top left quadrant and Red lobster.

About 15 years ago, we were looking at a fleet that was already very modern.

Plus a very large order book.

As he has progressed.

Follow the progression there the order book declined and fleet age increased.

Today, we are on the opposite side of the matrix and the green and the Green quadrants on the bottom right.

A low order book and.

The fleet on the water is the oldest it has been in two decades.

Looking at the graph on the right.

Current product tanker order book stands at 13% of the existing fleet.

Our order book is under 8% of the existing fleet.

The five years.

Nearly half of the global fleet will be older than 20 years of age.

Yes, there are some niche markets for order ships to operate in however of the capacity of these niche markets as far too limited to absorb what is essentially 50% of today's on one market.

Only 8 million deadweight tons on order for <unk>.

<unk> 5 million deadweight tons will be.

We will be within the scrapping age profile in the next five years.

By order of magnitude seven times, the amount of deadweight capacity could potentially be scrapped compared to what is on order today.

As we mentioned on our last earnings call. It is important to point out the impact that aframax crude tankers have on the overall product tanker order book.

Currently aframax crude tankers.

Net fleet growth is forecast at near zero.

This implies that an increasing proportion of ela tools will slightly older vessels will naturally transition to trade in crude to cover the shortfall in aframax tankers.

And we are already seeing a clear trend today of attitude.

Shifting into Dirty trades.

Turning to slide 29, this brought it altogether.

We can see from the Green bars on this chart the strong forecast on ton mile growth.

Long term demand fundamentals.

2020 for enhanced by before the impact of the EU embargo and then the further uplift from the Red Sea disruptions.

Amtrust, we can see the limited net fleet growth across product and chemical tankers.

Syndicated by the Gray and Blue bars.

Moving out and I want to reemphasize the clear contracts contrast of low net fleet growth with the escalating ton mile projections. This gap.

Setting the stage for continued market strength and resilience.

Turning to slide 31, I will now demonstrate how some of these market drivers are reflected in the way we treat all ships.

Essentially what we do evolves around three key themes, one fully capturing these very firm markets.

Embracing the increasingly complex nature of our business environment and unlocking the opportunities. This creates for a company like Ardmore.

And finally building value through creative spread please adding incremental profitability on top of prevailing market levels.

Turning to slide 32. This is a snapshot of our global setup across time zones, covering all key markets in the Americas and Europe and in Asia.

This enables us to engage a broad and diverse range of high quality customers a selection of them can be found here.

Importantly, we are also engaging with and trading with an increasing number of chemical agricultural and other non petroleum focused companies.

Ultimately this is this is about having lots of trading options for ardmore to ensure we can capture the strong markets in the most optimal way both in terms of timing and voyage combinations.

Turning to slide 33.

Some examples of what is achievable in these markets.

Actual voyages, we have undertaken in recent months.

On the right hand side, you can see a long haul Asia to Europe voyage.

Original routing is shown as the red dotted line.

As repeat of chip attacks unfolded in the Red Sea last December we negotiated a Cape rooting option, which we subsequently exercised.

Incremental fuel cost and time was fully priced and to maintain our TCE. Despite the longer route.

Same time, we can we can see an example on the left of how we are servicing the Pacific markets from Asia.

In addition to the original voyage leg from Asia to Mexico, we found lucrative onward employment options that will combine in a creative way.

We achieved a strong TCE of $36000 a day over four or five months and the vessel was laden much of the time.

As you can see in both examples duration of voyage business.

Originating in Asia is extended drastically.

Due to the disruption of the Panama Canal and in the Red Sea.

The impact this has had on Asia Pacific Asia Pacific freight is notable.

The box at the bottom right there shows freight movements since the start of the attacks on the Red Sea and to following escalation.

Realized TCE is on these routes essentially doubled from seasonally already high levels around $30000 a day to now 60.

$60000 a day.

Just to mention about 65% of our fleet is trading currently in the eastern regions.

Turning to slide 34.

Either Dave and ballast days or you could see empty voyage legs are expensive.

In this market.

Let's look at an interesting combination we have done on one of our chemical tankers essentially reducing all balanced.

Half of the year.

Ships are half the size of rmr's, but they are more versatile in terms of carrying non petroleum cargos and they can then be combined and lucrative ways.

Starting at the bottom left of the map in Argentina, with a long lead leg into South Korea.

Hello, Brian China run into Europe, followed by Europe to the U S. Then from there back to South America.

The full circle, earning close to $30000 a day over six months with only negligible ballast and 95% laden days.

When these ships have half the intake of an EMR.

Turning to slide 35 once more this slide shows what is possible in this market.

As Bart mentioned earlier, we had a large number of dockings this past year.

Typically the way we trade our ships is all about maximizing flexibility and maximizing optionality.

When you are positioning for dry dock youre working towards very defined place and time.

Leave us in a sensible way is both an art and a science.

This example, we're looking at a vessel that was opened in northern Europe earlier last year.

As you can see we wanted to bring it to China for dry dock.

Put together, our repositioning plan and combined the Trans Atlantic voyage with the U S Gulf to South America Ron.

This was followed by South America export cargo that brought the ship within a stone's throw off road Drydock location.

Also here, we see a four to one leading to a balanced ratio and more importantly, a TCE close to $40000 a day over four months.

These are incredible earnings and their own merit.

Truly remarkable when you consider these were really repositioning voyages.

No.

Examples I've just shown you were only three examples of a much larger dataset.

Yes, we hope to demonstrate to you with some of the key themes, we have been dealing with commercially and of course in aggregate all of this will show up positively.

<unk> results.

Turning to page 36.

I would like to show you one important way of how we have created additional value on top of a strong market.

This case through a high performing time charter book.

Brett please.

Allow me to explain what we're looking at here.

The Green line is the spot market.

In Blue are the number of ships, we have on time charter out.

The bars in gray.

<unk> ships, we have time chartered.

While the world was still in lockdown during the Covid pandemic the need for mobility was limited.

Product tanker markets were weak.

During that time, we benefited from strong time charter coverage at one point up to seven ships.

Same time, we started to execute some attractive time charters.

With forward Optionality.

When the market started to recover the number of ships, we had on time charter increased.

The number of ships, we had on time charter in increased and we let our time charters out expire.

This was near perfect timing as you can see we pivoted from a more defensive stance in 2022.

We pivoted from a more defensive stance in 2021 when times were bad to really opening up our charter portfolio in 2022 to fully capture the market strength that Hasnt suite.

So another example, this past summer we extended one of our chartered in vessels for men 12, Max 18 months and all option.

We continue to trade with spot for about half a year to capture the strength of the past winter market.

We recently locked in for 12 months period to cover the remaining charter period, including the optional period.

Guaranteed profit spread on these 12 months alone was $2 7 million so on top of the previous high spot earnings.

You also want to mention that we hold and the money call options for time charter extensions.

Specifically time charter extensions.

Accountable later this year.

On three ships.

So charter periods until mid 2025.

The option rates less than half of today's actual spot earnings.

Before we believe.

These options will still be very much in the money by the time they would do.

At the current market levels. These three options will create additional value of $17 million. So do stay tuned.

It is important to note that we were able to create these structures in both weak and strong markets.

537.

As the team.

Some markets are great, but you need the right team and the right platform to capture them.

A very diverse team as Bob pointed out.

It's diverse by design, because we know that diverse teams create stronger performance.

Diverse in terms of cultural background professional background personality and diverse along other dimensions.

This enables better decision, making and better access to our global markets, Hence better performance.

Our trading mantra is rooted in a nimble yet methodical approach to our ever changing markets leveraging both experienced factors as.

As well as our suite of digital Intel tools.

NII supported performance optimization systems.

We believe that any market or any.

Voyage for that matter offers infinite opportunities for incremental performance gains.

The whole system and how we are approaching things philosophically is set up to capture that.

This concludes my section. Thank you for your attention and I look forward to answering your questions later.

Good morning.

Okay.

Lunch really looks and smells good all we got was a ham sandwich Sir.

Great well listen.

We've gone through a lot of detail now.

And what I wanted to do actually is kind of.

Zoom out.

Quite a ways.

And think a little bit about where we are in the cycle. So.

Forgive the really dumb imagery here, but but.

It's a serious question.

So the most important questions.

<unk> that you face looking at.

So I started in this business in late eighties.

As a banker and since then anybody that's been around that long and I think some of the room have will counted up and actually we've been through six cycles.

When I started as a banker.

Back when banks actually lent money.

And so we were taking a real risk and we were looking back a couple of cycles. So altogether I feel like I've got sort of an.

Bones about eight cycles and thinking about where we are today and kind of looking at all of that experience.

It does feel like there are some patterns that are important.

So I think the first pattern is that.

Of those eight half were relatively in hindsight now fairly short upturns.

Felt very important and exciting at the time, but they didn't last long.

So the other four and I would include this one in that and we can discuss that in Q&A.

<unk> are fundamentally different.

They are longer and more persistent.

And they share some common characteristics, so one and forgive me, but we're going back to $19 57, but the truth is that the dynamics in our business.

On demand haven't really changed at least in cohort two maybe even even further back.

So.

So the first thing they all have in common is that.

They were preceded by 10 11, 12, maybe even 13 years have fundamentally bad markets.

During that period.

Fleets got older.

Order book shrunk.

There were some bumps along the way of activity, so I'd fundamentally yard capacity shutdown.

So like when was the last time, we were in a strong market in 2008 2009, I think shipyard capacity is substantially lower today than it was then.

So that's the setup and then.

We will have in common is that some unexpected positive demand event occurs usually geopolitical kind of lights the fire.

And it's usually not just one event it several things that happen.

No I mean, each each of these upturns is different and unique but there are some similarities right and I don't want to do this now, but if you want in Q&A, we can think back to what were the specifics.

But.

Hello.

Right.

Unexpected.

Jump in demand.

Through not just one event, but a series of events.

And then it becomes clear that supply is not going to be able to catch up.

And that's that's really the foundation of one of the strong market.

Great last anywhere from four to six years.

And they all in the same way, which is when it really deep.

Economic crisis hits, the global economy.

So I'm going to leave it at that.

The questions are where are we in the cycle.

And what is our more doing to position itself.

Or perhaps.

Different probabilities of outcomes here.

We're happy to engage in that discussion with you and then anything else.

Just last thing I want to do those thank you all for joining us today.

And in particular, thank you Curtis are coming up all the way from Florida.

Despite the weather and in spite of his gammy leg there.

So that's an Irish expression.

And happy to open up the floor for questions.

For the benefit of the people on the webcast, we do have microphones that will be circulated so.

Okay.

And for those again on the webcast. If you want to ask a question. Please E mail Ardmore at IGD IR Dot Com I will I'll feed those into the mix here, but for the time being please go ahead. Thank you.

Okay.

<unk>.

However, operationally they may not want to do that.

In fact, South Africa is becoming a bit of bottleneck.

Okay great.

Great more bunkers youre shutting.

And then maybe other reasons.

We did.

You didn't touch on this but bunker planning becomes definitely one of those operational elements.

We're off to.

Bunker, where you're intending to.

Squeeze it.

Yes.

Yes, whenever you move away from the main Bunkering ports.

Any regions you might find yourself.

Scarcity of bunker supply of higher pricing.

Infrastructural bottlenecks.

<unk> availability.

Heating time and of course every time, we pay more for bunkers or extend our voyage length without any revenue to put towards it.

Could have impact on our TCE.

Labor shortages, it's just pricing and availability.

Put in the infrastructure and of course by being very proactive and forward looking in your voyage planning you can avoid to find yourself in those message patients, but it's just one of many examples where and I think it's a great example, as the world changes trade patterns Theres always a lot of things to consider and in itself that creates of course volatility around some of those bunker supply lines with <unk>.

Further knock on effect on the entire system.

$100 a ton.

Thanks.

I think for the other two questions.

Yes, I think I think there's certainly been some.

Underground to what extent does.

Yeah.

Let's find their way back into the supply chain.

Okay.

Paul.

Crude oil from Russia.

Refineries anywhere.

But at some point.

Would it be with signed in blended.

So that could give you a definitive answer we of course, we don't track, we don't have the ability to.

Akshay and the oil trading at that center.

Okay.

Yes.

Hello.

There has been.

And for the earlier part of last year.

Bob and crude.

In China pretty much on the on the back of weaker domestic demand.

The Chinese economy.

Part of that we have seen a general trend towards declining Chinese exports being.

Being said, we know that although the teapot refineries to independence.

And our use of <unk>.

Main purpose.

Thanks for the overseas.

And we are now actually seeing towards the latter part of last year and into this year.

And is very much on the rise new export quotas have been issued export quotas on a perfect predictor of extra export volumes, but everything points towards.

I'd like to increase of Chinese product exports again.

Sure.

Tony.

That last bit.

Okay.

4%.

And.

Thanks, Paul.

Are you thinking about your strategy on that.

So I think it was claimed et cetera.

But sometimes it wrong.

So.

It really is.

Parallels.

And I think there's a general view that.

Not for another couple of years.

Nobody knows how it's going to add.

Well do you know how it's going.

While your portfolios.

So.

And it's.

It's also interesting when you look at those prior periods there were spikes within those.

So overall it as much.

So.

But it seems like.

Early persistence.

So in terms of what are we doing about it.

We like where we are.

Okay.

Okay terrific.

We just.

By selling the 2000.

We're planning to believe.

So the opportunity.

All you've got older ships.

And.

So.

Opportunities to grow we will.

Thank you.

A lot of growth in the last 10 years.

So.

So.

We're nimble and without really.

Optimizing the void.

But also having having optionality in the way you.

Which is difficult.

So I think the other thing.

Okay.

Again, it doesn't quite register.

Our sector is only 5% of the market.

Very very fragmented trading.

And what really matters is how you route.

Okay side.

That's a bit of a ramble, but go ahead and ask me.

Yes.

Excellent.

Yes.

How you are positioning.

So we were really excited.

For settling in and getting used to it.

So.

Yes.

Hi.

<unk>, we were thinking right. This is Bob.

Clip.

Over and when it's over.

In terms of.

That's a little more difficult.

But.

Cool.

Do anything.

Go ahead, yes.

The edge.

<unk>.

Yes.

Do you lease.

I don't really we don't really hedge.

<unk> fuel needs there could be certain specific examples that we had a corresponding.

Long our short exposure on a particular freight elements and if we wanted to lock in the corresponding TCE.

In theory lock in the field as well, but we generally don't do that.

Yeah.

The markets as such.

On the question on.

Vessels.

Financing. So that's I guess, what we don't have any newbuild on order coming in.

Leasing structure.

Draw down debt, but.

The company the last year and a half is really focused on the balance.

Balance sheet and the shifting of that back to the traditional shipping banks.

Predominantly European based and where they have been able to provide us 100% coverage in some cases.

Our revolving credit facilities, which gives us.

But even within a quarter or two to manage debt levels.

That delevering, we've been able to.

Breakeven down.

It would be.

<unk> thousand $500, a day north of seven.

It's below.

And so I think the key thing for us is always maintaining.

<unk> network and relationships.

Financial capital providers.

We've had significant leases.

We still have a few.

Okay. It's much more focused on this year.

Hey, if I could just say if everybody could please make sure you speak into the microphone. So I appreciate that we took them up to get to you, but in general speaking to them. If we could we turn up the volume on the mics hearing on the webcast and its been tough to hear so.

Thank you very much guys.

Tony you mentioned like the path for <unk>.

Cycles.

Thing it seems a little different this time around is that a lot of the companies have less leverage.

Absolutely.

Hello.

So it feels like very different.

Thanks Sheila.

Okay.

Based on this particularly.

I'm trying to things like the last strong market, we had was in there.

Okay.

You're busy ordering ships.

0.4 incredible prices.

And when it all.

So there's a lot of carnage.

So.

It looks like.

Companies are a lot more sense.

He also being held.

Backed by.

Okay.

If you look at the dry bulk sector they've been assets.

And there's been a remarkable.

Yes, Sir.

Could be yes.

Alright, so if we could get Richard to give the microphone gotcha.

Got you.

And Ikea.

Yes.

And refineries are shutting down or not connected by pipeline.

Our gasoline.

Oh.

Market.

Alright tanker.

On a few really interesting points I mean.

Something we.

Certainly you see right now how are the conversations changing with our also petroleum based customers. Some of these sort of really large commodity traders are now quite actively engaging in aiding and certainly also more forward looking discussion on biofuels.

Tools.

Lending components for Biofuels and was that just comes more complexity.

Different components different feedstocks to generate those biofuels, we need and then components for that we need different ships in different onshore capabilities and organizational capabilities too.

And of those first of all to safe, but most importantly also.

And the.

This mismatch that you described where any refinery already today.

Has a given product space.

Thanks to adjust that product slate, but it will never be perfectly matching.

Bucket.

Matter of fact that will continue to change and that creates.

Alex overhang that essentially then gets discounted in terms of price and that will get exported somewhere else. So for US. This is kind of part of this really exciting story were driven through the energy transition needs and some focus on renewables tools, but also just an increasing complex.

The consistency imagine a world where there was only one fuel that fits.

That would be a far less complex wells and probably would be.

Lots of interesting in terms of tanker demand.

From that towards more complexity more product grades.

That creates a different trade lanes and more interesting ways for us to also arbitrage.

Yes, but it's very much happening I mean some.

Some of those compensations, two or three years ago, just simply didn't take place and just recently, we had one of the.

One of the European.

Refineries approach us and basically asked us for good almost argue like a tutorial like a walk through on some of these.

Cargo is and what to observe when shipping those cargoes from a from an operational and commercial standpoint, and we find that as a nice validation of the reputation we have created in those markets to be.

Beyond just diesel and gasoline which of course today is the bulk of what we do but we can do a lot more than that.

And up here and then Chris.

The philosopher Iraq.

Only content in life.

Question regarding.

Sure on the horizon.

<unk>.

Got it.

Fine.

This could now blockage.

That's just happening right now.

Is that going.

To return.

How is that going to minutes.

Got it so it can take a stab at this so I think just maybe a comment on timing and.

The code that you just mentioned as well.

Got it in various kind.

One of the Nixdorf debates, we have and I think it's very much.

As I said are trading much was based on it.

We are in a very changing environment and for us to trade well in this we just have to.

Thanks Ted.

I don't think that unfortunately these situations.

Itself overnight.

Actions like this.

Jose.

Matos trades that we're seeing now that have changed as a result of this will be quite sticky.

We don't necessarily foresee.

<unk> just held.

Well then overnight.

Okay.

Okay.

The question and the question, we ask ourselves all the time, if we all.

All those components out of the equation with.

With the market be today.

And that's a tough one to answer but I think what we certainly shouldn't take as a baseline is 2021, which is COVID-19.

The world went into this.

Up down in E&S.

Double tanker market that ensued other positive things, we're actually happening the fuel switch created a lot of complexity around diesel diesel shortages Trump has already structured shorter diesel all of a sudden there was a high demand for our marine.

Also fuels.

So there was actually a lot of interesting things happening in the winter of 2000.

Starting to emerge.

Out of Covid before the Russian.

If your crane.

The market was actually really already on an upswing.

Are you able to kind of.

I'll break of work coming when we open up all the time charter portfolio, we saw the world normalizing in terms of its mobility needs.

Is already a fairly healthy and substantial baseline.

After that I think would not be would not be at the same time, how quickly would that happen considering the stickiness fades.

Trading relationships, new trade patterns, and the relatively cheap cost of freight still and the overall profit margin.

So from a to b.

And this elevated impairment for goodwill.

Hi, how are you going to.

Thanks.

Back to our capital allocation policy.

Our voices that has been in place.

Or is the current market increase and.

And if we think back.

He has always been one where.

In the past.

Okay.

That moderates left modest leverage always be looking for.

And then.

To return capital to shareholders.

Actually yes.

Simultaneously so that was that was a key part of <unk>.

Starting with Q4 2000.

Capital allocation broadly, we still have runway to further invest in the currency.

That's more efficient.

We have we have further runway to leverage.

And then you'll always very prudent about the current market condition.

Ladies business.

<unk> also.

70.

All while balancing.

Have a guidepost, but we've taken it's dynamic.

Yes that is correct.

Thank you. My final question is about interest rates. The company can be found when interest rates now, we're having higher for longer normalized interest rates can you talk about your debt.

How youre going.

Again, sustain a dividend and that and.

And the higher cost of capital environment. Thanks.

Sure.

That's one where the company really took a very deliberate approach a year and a half ago and.

Just did and got revolving bank capacity.

The traditional European lenders.

Our back end exercise purchase options on lease vessels, but actually as one were.

Coming into a stronger market and knowing that we could actually manage the debt levels within the quarters or is the interest rates.

Very deliberate as we've had this increase in earnings.

Part of that has been to Delever. So.

Our breakeven of $13900 per day.

If we hadn't deleveraging and these rising interest rates environment.

Our suite of $17000 per day.

And now I think we have that luxury positioning.

That level that we can.

And you have different higher for longer scenario, but it doesn't impact our ability to actually.

Location policy.

Chris next I would ask again, though if everyone could please make a point at front able as well to speak directly into the microphones that are having some difficulty on the webcast. If we could raise the volume on the mics at all guys.

Got it thanks, guys. Let me just follow up on that question with regards to the debt levels and leverage.

Assuming the market continues to remain strong for the next coming years are you happy with the current leverage ratio, how low could that go and what's the ultimate bottoming, let's say of the cash breakeven level in your minds that you could get to.

And Amex situation I think the way that we think about it is yes.

We are.

Today.

There is the full range of scenarios of how it could evolve and develop it.

But again it comes back to having the capital allocation policy.

<unk>.

Yes.

We like the current leverage levels. It really increased has increased the quality of earnings lowered the breakeven.

I think we still have some runway on the breakeven I mean certainly.

We tackled the interest expense side of it.

Very very tight when it comes to cost management internally on both the Opex front end G&A front.

And.

And I think we just we have to remind ourselves that we were very early managing the balance sheet and getting the.

Arranging the revolving credit facilities.

I think we have actually some further ability to to work with our banks to get even more revolving facility as opposed to term.

So that's something that we're working on as well.

And look I mean, we take a longer term approach through cycles of you don't know exactly how it may play out.

But it's important to Delever and.

After your dry powder available showed a cycle play out or interesting opportunities emerge and we think.

Plant the flag for future forward value.

But I think.

Very much a conversation.

<unk> has on a daily basis.

Okay.

Actually just in the interim I'm going to feel free, but I am going to have a couple of days from the webcast. So please do keep sending those in or more at <unk> Dot com.

Why not to take care of them are.

But just on scrubbers.

How are you thinking about that why does it make sense now it didn't make sense then broadly.

Robert.

Following that Mark that was years, let me start.

Yes, so we've now begun to install scrubbers on our ships.

Scrubbers are lower costs better technology, they're modular.

And they.

The installation time is a fraction of the traditional scrubber.

So.

So we're very pleased with those investments in particular that can be upgraded carbon capture.

That's really well into our business model why didn't we do scrubbers, three or four years ago.

We were in a very financially strained situation at the time, everybody was and the cost of the capital needed.

Those installations was would have been very high.

We in fact instead of doing scrubbers.

We bought a ship at a really good price and.

Calculate what the scrubber spread would've had to have been.

The returns we got on the shift that we just sold and at $6000 a day.

So.

So but every company.

Is there a specific set of conditions.

<unk> and <unk>.

And we're comfortable with the decision we made back then.

We're really happy with what we're doing now.

Thank you.

Just wanted to Tony follow up on I think Ben line of questioning early on in the Q&A about strategy and he was asking you about how you thought of things today versus a year ago I wanted to ask given they're not you went through the different choke points that we've been seeing in a lot of the disruption of the black Sea the Baltic Panama Canal ROTC recently.

Given what's been going on geopolitically recently.

That all changed how you are seeing that strategy.

Has it caused you to pivot or think about capital allocation differently or just strategy differently, given what's going on right now in the RSC.

Question hard to answer so I don't think it's really affecting.

Okay.

<unk>.

Thank you there has been mostly operational and safety related so I was very clear when you're shooting.

Our ships was.

It was attacked and we were very lucky in getting away without being hit.

Others haven't been so lucky.

Yes.

It was an easy.

To avoid the.

Let's see.

Let's see how things unfold.

That solves itself, how long that takes and how long it takes for ships.

Sure.

Generally I think geopolitical.

These events.

As you are kind of smart and safety conscious of the way you operate they just add to aggregate 10 model.

And then it's just a matter of very tactically, which is.

Looking to next.

<unk> returns in that.

Once our market.

And maybe just the only point I can add is that yes, yes about strategy I am not sure of being agile really.

Quantify the strategy probably doesn't but I think it's just part of who we are part of our DNA.

And if you then just consider that there will always be these kind of events high impact events that you have to adjust very quickly I think that is just a testament that as a as an organization in terms of our balance sheet and in terms of our capabilities financially, but also just in terms of how we how we approach things strategically at every level of the company.

Because of that culture, if somebody told me a year ago that we're going to be going about the case by the end of by the end of last year, probably would've quarter frozen crazy yet we are right.

And I think just to say that we won't see something completely different than a year from now so again, not really strategy, but I think agility will continue to play a really big role in terms of how <unk> approached things.

Sure.

Yes.

For good times a day.

The revenue mix.

The explicit in the setting where mindset and how you view the market.

Can you give us a little bit of your insight about how your customers' view of this market and if there is any discrepancy.

Our ship owners.

The forecast the next few years versus chart, there as well.

Good discussions about long term charters that have.

Have you seen any more of our Panther increased appetite for.

For charters to take longer positions within what we have seen so far.

Yes, <unk> is a great great point in.

Mitral respond with a little anecdote I was in Singapore during the last APEC conference, which I believe was around.

Some of the fall so.

And a strong market and freight was pretty high and I said in with.

The room, which was really more of sort of the refining side of the business I think it was one of the only ship owners that really came from the from the western side to attend.

They took a survey in terms of what what.

The room was anticipating for the room was considering the biggest risk for them at the moment and the.

The top three on top of that was.

Upside volatility in freight so I think from a customer standpoint, there is still a BD strong concern that freight freight might move up further given everything thats whats happening here.

Time charter market is have adjusted as a result of this.

And I guess I am really surprised by how positively surprised by.

How there is a much more.

Either way of approaching some of these security situations around the Red Sea, where we have been able to really negotiate.

Fairly Saudi amicably bodies, Cape routing options at no detrimental commercial impacts and.

So that's a positive surprise and I think probably also.

Indicative of how strong demand or how inelastic demand is at the moment.

Europe is structurally so short at the moment that these products just to have to move and even though you price your pricing and.

And increased debt essentially offsets $30 40 up to 70% of a voyage distances.

That is not leading to a point, where those are those cargo movements get choked off if anything.

To move it quite quite strong volumes.

That answers your question.

I'm here and then Chris you had a follow up and then we'll come back to the top table.

Yes, hi, thanks for all of this.

Maybe just to hear what your strategic thinking is on the dividend versus a buyback and how you guys thought about it in the beginning starting last year Q4 2022.

And knowing where the strength is today, obviously I think 2019, you guys had about 30% to 35 in stock today you are about 42.

So I'm just trying to hear some of your thinking on that and why you saw the dividend was the backdrop.

Sure sure.

So I think I mean.

I think coming back to the capital allocation policy and the fact that with the changing market backdrop and cash flow generation.

We could pursue all of those priorities together.

And our capital to shareholders.

From a priority.

We had waited a long time to be able to actually into place and I think.

We studied when we put the capital allocation policy in place other industrial companies and fell outside of the shipping sphere and.

It looked and felt that a level that was one third of earnings and in a cyclical business, where youre going to have fluctuations will seasonally and cyclically was.

<unk> was actually quite significant within the industrial realm and sphere.

And then and then when we think about that and versus for example, a buyback.

And when we instituted the policy and kind of <unk>.

Well.

We like the liquidity and the average daily trading volume for our share.

And the 100% free float and we felt it.

Continuing to promote that well using the dividend as a tool for returning capital to shareholders was was appropriate.

The comments thank you.

I'd be remiss, if I didn't ask about the <unk> marine investment.

As you guys look at that are you thinking more of licensing that technology in the future do you manufacture the units for sale to others.

How are you looking to monetize that.

Can I ask just for the benefit of the wider audience, maybe what one marine is sure okay. Thanks.

So as a reminder.

When.

Back.

A few years ago in 2021.

The company made an investment in element, one which has proprietary technology to take methanol and produce pure hydrogen, which then can be used in a wide range of fuel cell applications.

And important to remember that that was actually a <unk>.

Multifaceted deal that also put $40 million on the balance sheet in the terms of our preferred.

And that was a time when capital was was really needed to bolster the company.

It also coincided with the companies.

Energy transition plan and rollout and and.

And so very early and important part of the company's ECP plan and then as we broadened that with.

Imaging this full range of technologies that we talked about that we've installed on our vessels.

Element one remains one component to that.

Like other industrial companies, where you have proprietary technology and then you are looking to.

To monetize that and achieve value on a global scale. They have been really active now in terms of their scaling.

Looking at different licenses across geographies and across verticals. So it's actually not just marine and in fact some of the other markets are accelerating more rapidly so everything from aerospace off highway on highway.

Charging stations.

So yes, it is definitely significant progress there I.

I think we have to remind ourselves from our overall contacts that was a 10 million dollar investment. So certainly when we think about our asset base.

Our fleet and our core competency in the fleet, but that happened to be a unique investments.

Net other criteria for the company.

But again I think our ETP focused today and go forward is it's much more on testing and piloting technologies that then we can deploy in our fleet.

And improve operational perspective, but but not necessarily making.

The front table here.

Okay.

And wondering struggling with demand.

All of our cases in a way a customer to horizon.

Got it.

Hey, guys how are you seeing customers economizing.

Okay.

Alright, and then just mentioned that the transport cost is roughly 5%.

Cost of fuel I.

I think the real question is when oil traders are trading and they're making a spread.

That's on there.

I think that almost answers the question entirely.

I think as of as of.

Yesterday, the 321 cracks.

<unk>.

Finally margins were still at a roughly $30 a barrel. So I guess, there's still making good money both in terms of refining.

When trading of those commodities.

The fact that even though those.

Hi.

Higher freight levels are quite sticky.

Product is still moving.

Down.

We in peak U S Gulf refinery turnaround right now U S. Gulf re rates are down to 77% which is.

Normal run rates would be.

Two 2% to 95% maybe.

<unk>.

Is not notable I mean operators.

As high as mid Thirty's on certain routes and as low as I think high twenties.

Those are pretty good rates still.

And again.

Not at this point, where we're meeting inelastic demand for the transport of those goods.

Again at $30 a barrel.

Crack spreads I think it's.

But he still has a chance to make a lot of money.

And then one more from the from the webcast here did you. So once the webcast and we will have one more question up here.

So this.

Has been posing a couple of different ways and Ben from in the room addressed this earlier as well, but Tony in so far as you said that you.

Close the presentation by saying that cycles inevitably end.

I guess.

Through line for the various questions I'm getting is.

What are you doing the interim to make it worthwhile what's the point if at all eventually and how do you get how do you get there without it.

The bigger question it sounded like when you talk about actually.

How do you how do you start the next cycle not at square one.

So if.

If I understand this.

Okay.

The cycle is not the end of Ardmore shipping in fact, if I get really excited and downturn.

Alright.

And.

Ask me a year ago, what were we thinking well.

And it's we're going to be great.

So.

I think from an investor it's really important to understand.

That's up 2%.

Michael how long it's going to last.

Ross, we're playing the incident.

And we're going to keep playing and our objective is to.

Norm.

Everyday, but build long term value by making really good.

Yeah, Hi, Tony.

Yes, I look at everything you've talked about today has been a lot of focus on demand a lot of questions around demand.

Fair enough business.

Okay that matters.

And also interestingly.

Variables determining future supply are much more predictable.

I wanted to focus on those variables.

First one is a year ago I think you mentioned.

The order book was particularly light because.

Uncertainty about what the environmental requirements for future.

Thanks Scott.

An update on that would be helpful.

Second thing is I look at a lot of other assets and equipment that moves around.

And every category I can think of the useful life is.

An increase.

Hi.

Hi, My thought would be the case.

So it might not be the case.

In your industry.

Then you also mentioned today.

Just the lack of capacity production capacity, how serious is that.

Final question is what would it take.

Okay.

Thats correct. This question. So I think the question on fuel is an interesting one.

There are ships a lot of ships are being ordered that are methanol dual fuel.

Nothing ammonia yet because the.

But they are all either in sectors that are very.

Okay front facing too.

Customers.

Carriers continue.

For they are more bulk type businesses there.

Customers.

That's kind of make it worthwhile.

If it is happening nobody is building.

For spot trading.

<unk> will pay for it.

So thats not happening yet.

The ships are being filled with engines that can be treated.

Now is not that much but they can be retrofitted.

It is happening.

So there's a lot of uncertainty.

So so.

So I think that definitely is a component.

Yes.

Answer the last question first and I'll try to remember them.

So.

Would we order ships, possibly.

Okay.

It depends on when they deliver price is they are really high.

Jack.

If there are other strategic.

Doing it.

It's.

Question around shipyard capacity.

Clarksons track space, but I think the yard capacity from 2008.

He is down at least.

And.

I will disappear in 2008 mile three parts to keep building and overpopulation.

Mark is going bankrupt.

So.

There are.

I think theres yard capacity there for quarterly.

This is wave of older ships.

Not addressed.

And Thats thats still to come but it's.

So yes, that's a good one because I get really frustrated with like dishwashers.

So.

Yes.

Long answer, but the short answer maybe we'll do so which is I think in terms of the structural technology shifts in the way they're being built.

Steel is being coded et cetera, hasnt really changed.

And I think that means that for our ships theyre going to last one.

I don't think there's any initiatives there should be to be honest I'm not sure. The economics, all that much but we should find ways to extend the lives to build ships that have a longer.

Life.

Great. Thanks by way of modularity upgrades.

Maybe better better treatment.

The steel.

Am I missing anything.

Jesus.

Or maybe also just that.

I think the cycle matters in terms of the useful life and I think that side of it is separate from the technology.

Sure.

Studying the product tanker fleet in Houston.

Large component is asleep, 40% that the next five years.

The age of 20 that yes, our cycle plays out those are natural scrapping candidates, but if the market remains strong even the owners trying to keep the incremental yes.

Go out very fast the other thing also to keep in line as those older ships are really really inefficient.

They might burn 80 tons, a day more of them.

Good morning, Ben.

Tony.

Never again.

Hugh.

You asked me before we started.

Something along the lines that you really wanted me to give you the singer or something like that I was only joking, yes or no.

You said that something along the lines of.

The key to making money in shifting our cyclical business is buying low I would argue the key is selling high.

Yeah.

We're kind of high now right.

Question.

And if not is there it's logical why don't we just sell half asleep.

Well.

We do run a really high quality platform.

Needs a certain scale.

To be able to generate the returns it does.

A lot of future value as well.

Don't need to sell ships for investors to be able to sell them.

So we.

Not in a position.

Well, Dan chips and distribute.

Hi, Julie.

What we have done has grown a lot and again Alex.

Besides we've had plenty of opportunities.

A lot of ships, but we haven't done so I think where we.

We're just focused on.

Performance in.

Cash flow that we're generating from although we have today and waiting for opportunities.

I think that if we were to.

Through vessel sales now I think that would impair our ability.

Question so.

Okay.

Do you think about having a lot of liquidity and 100% free float is that anytime at investor wants to sell the whole thing.

So the whole thing.

Right. So it's we don't have.

Another question here.

Okay.

How flexible has the regular ship the shifts that you have.

Become over the years in terms of dry cargo versus.

A wet cargo.

Can you change the model the mode.

Shipment pretty quickly with newer technology.

So I think we.

We work in a world of liquid bulk.

So there are two types of can switch back and forth dry to wet.

But one of the aspects of our of our ship types and our business in particular is the wide range of liquid bulk cargoes we carry.

Theoretically we could be number one you can start crude oil.

For products petrochemicals.

Hello.

I'll actually hand, this over to Bernard to answer a little bit because I think one of our one of our underlying.

How did you use to maximize their trading options.

By looking at as many different cargos.

Okay.

Follow up on a different subject what about insurance costs, given what's going on in the world today.

How much have they resume our D&O just went down by a lot of events.

And that next meeting.

Yes.

Yes.

I mean with regard to.

The war risk premiums.

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Yes.

To the extent that anybody would still engage in those trades, obviously as I show, we have just negotiated.

Options are on the case, so we don't really need to worry about wars premiums, but typically those would be voyage cost and as either priced in or absorbed by the by the charterer.

But yes, they have gone up no doubt.

Let's say that the standard insurance packages in Opex in terms of the machinery and P&I debts renewed on typically an annual basis.

Regular market levels.

Yes.

Highly competitive process.

Yes.

If the world gets more peaceful.

Were those insurance costs drop and give you a better margin.

It'll be more of a voyage expense impact but in terms of.

Paula machinery and P&I.

Okay.

Yes that market is driven more by kind of non comp non kinetic types of events big oil spills.

Catastrophes.

It's amazing how shipping.

Some slip would be absorbed.

Alright.

And just the whole.

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The world of reinsurance.

We get impacted by things that you would never imagine.

Maybe just to add.

We conduct our business our track record with the insurers safety standards and how we've been able to avoid incidents where we would have to call into insurance cover that certainly has an impact in terms of how you can do in terms of relative renewal rates and that's been quite favorable to the company.

Hey, I'm seeing no further questions here in the room and we'll get on the webcast. So Tony I'll turn it to you if anything you want to say in closing, though just again, thank you all for coming.

Good questions.

So.

Thanks, everybody.

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