Q4 2023 Genco Shipping & Trading Ltd Earnings Call

Operator: www.GregoryLewisMovies.com Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Ltd. 4th Quarter 2023 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.gencoshipping.com. To inform everyone, today's conference is being recorded and is now being webcast on the company's website, www.gencoshipping.com. We will conduct a question and answer session after the opening remarks. Instructions will follow at that time.

Yes.

[music].

Good morning, ladies and gentlemen, and welcome to the Genco shipping <unk> trading limited fourth quarter 2033 earnings conference call and presentation.

I always begin please note that there will be a slide presentation accompanying today's conference call.

That presentation can be obtained from the Genco <unk> website at Www Dot Genco shipping dot com.

Inform everyone that this conference is being recorded and is now being webcast at the company's website www Dot Genco shipping Dot com, we will conduct a question and answer session. After the opening remarks instructions will follow at that time.

Operator: A replay of the conference will be accessible at any time during the next two weeks by dialing 1-877-674-7070 and entering the passcode 373966. At this time, I will now turn the conference over to the company. Please go ahead.

Replay of the conference will be accessible anytime during the next two weeks by dialing 18776747070 and entering the passcode 373 96 six at this time I will now turn the conference over to the company. Please go ahead.

Unnamed Speaker: Good morning. Before we begin our presentation, I note that in this conference call, we've been making certain forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as anticipate, budget, estimate, expect, project, intend, plan, believe, and other words in terms of similar meaning in connection with a discussion of potential future events, circumstances, or future operating or financial performance. These forward-looking statements are based on management's current expectations and observations. For a discussion of factors that could cause results to differ, please see the company's press release that was issued yesterday, the materials relating to this call posted on the company's website, and the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2022, and the company's reports on Form 10-Q and Form 8-K subsequently filed with the SEC.

Good morning, before we begin our presentation I note that in this conference call. We are making certain forward looking statements pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 995, such forward looking statements use words, such as anticipate budget estimate expect project intend plan believe in other words in terms of similar meaning.

In connection with a discussion of potential future events circumstances or future operating or financial performance. These forward looking statements are based on management's current expectations and observations for a discussion of factors that could cause results to differ. Please see the company's press release that was issued yesterday the materials relating to this call posted on the company's website and the company's fee.

Fillings with the Securities and Exchange Commission, including without limitation. The company's annual report on Form 10-K for the year ended December 31, 2022 in the company's reports on Form 10-Q and form 8-K subsequently filed with the SEC at this time I would like to introduce John Goldman Smith, Chief Executive Officer of Genco shipping <unk> trading limited.

Unnamed Speaker: For more information, visit www.fema.gov. At this time, I would like to introduce John Wobensmith, Chief Executive Officer of Genco Shipping & Trading Ltd. Good morning, everyone. Welcome to Genco's fourth quarter 2023 conference call. In addition to reviewing our Q4 2023 and year-to-date highlights, we want to use this opportunity to provide an update on the progress we are making three years into our Comprehensive Value Strategy, as well as on the industry's current fundamentals. We will then open up the call to questions.

Good morning, everyone welcome to Genco as fourth quarter 2023 conference call.

In addition to reviewing our Q4 2023 and year to date highlights we want to use this opportunity to provide an update on the progress we are making three years into our comprehensive value strategy as well as on the industry's current fundamentals. We will then open up the call for questions for additional information. Please.

John Wobensmith: For additional information, please also refer to our earnings presentation posted on our website. Starting on page 5, 2023 marked another strong year for Genco. We took concrete steps to drive sustainable long-term value while achieving the top corporate governance rating across 64 public shipping companies for the third consecutive year. We also made progress enhancing the company's ability to thrive through all industry cycles as we executed across the three pillars of our comprehensive value strategy, focused on dividends, deleveraging, and growth. We ended 2023 with our strongest quarter of the year, as outlined on slide 6. For the fourth quarter, we achieved adjusted net income of $0.43 per share and declared a $0.41 per share dividend, representing a 173% quarter-over-quarter increase in the dividend.

Also refer to our earnings presentation posted on our website.

Starting on page five 2023 marked another strong year for Genco, we took concrete steps to drive sustainable long term value, while achieving the top corporate governance rating across 64 public shipping companies for the third consecutive year.

We also made progress enhancing the company's ability to thrive through all industry cycles as we executed across the three pillars of our comprehensive value strategy focused on dividends and deleveraging and growth.

We ended 2023 with our strongest quarter of the year as outlined on slide six for the fourth quarter. We achieved adjusted net income of <unk> 43 per share and declared a <unk> 41 per.

Per share dividend, representing 173% quarter over quarter increase to the dividend.

John Wobensmith: Complementing the sizable returns we provided shareholders during the quarter, we also continued to de-lever while executing several key strategic growth initiatives. This included increasing our earnings capacity by implementing the next phase of our fleet renewal program. Additionally, we closed on a $500 million revolving credit facility that meaningfully increased our borrowing capacity, reduced margin, extended maturities, and enhanced our ability to take advantage of opportunistic growth.

Complementing the sizable returns we provided shareholders during the quarter. We also continued to delever, while executing several key strategic growth initiatives. This included increasing our earnings capacity I implemented and implementing the next phase of our fleet renewal program.

Additionally, we closed out a 500 million.

<unk> credit facility that meaningfully increased our borrowing capacity reduced margin extended maturities and enhanced our ability to take advantage of opportunistic growth.

John Wobensmith: Turning to the fleet, performance was strong in the fourth quarter and underscores the meaningful operating leverage of Genco's asset base and the importance of our barbell approach to fleet composition. During the quarter, our operating leverage was evident, as cape size rates spiked to multi-year highs in December, enabling us to increase Q4 TCE by 44% and achieve our highest TCE of the year at over $17,000 per day. We also generated our lowest cash flow break-even rate for the year, resulting in significant margin expansion and an increased Q4 dividend, which I mentioned a moment ago. Notably, in the fourth quarter, we once again achieved the time-chart equivalent benchmark outperformance and are pleased to have seeded our internal benchmarks for the year by $1,300 per day while generating adjusted EBITDA of over $100 million.

Turning to the fleet performance was strong in the fourth quarter and underscores the meaningful operating leverage of <unk> asset base and the importance of our barbell approach to fleet composition.

During the quarter, our operating leverage was evident as capesize rates spiked to multi year highs in December enabling us to increase Q4, TCE by 44% and achieve our highest TCE of the year at over $17000 per day.

We also generated our lowest cash flow breakeven rate for the year, resulting in significant margin expansion and an increase Q4 dividends, which I mentioned a moment ago, notably.

Notably in the fourth quarter, we once again achieved a time charter equivalent benchmark outperformance and are pleased pleased to see that our internal benchmarks for the year by $1300 per day, while generating adjusted EBITDA of over $100 million.

John Wobensmith: Looking ahead, we expect the positive momentum and our strong performance to continue in the first quarter. For Q1, 81% of our available days are fixed at over $18,700 per day, an increase of 34% versus Q4 levels. This strong performance is notable, especially considering that Q1 has historically been the seasonal low point in the dry bulk freight market. On page 7, we look back on the development of our comprehensive value strategy based on our ongoing progress in 2023. In April 2021, management and the board laid out a clear path and related objectives to transform Genco into a low-leverage, high-dividend-yielding company with significant financial flexibility to provide shareholders with returns and opportunistically grow through the dry bulk shipping cycle. Since that time, we have made significant progress toward these goals and, importantly, have balanced our capital allocation priorities, having paid $170 million in dividends, acquired Moving to slide 8, we have declared compelling dividends over the last four and a half years, including nine since the announcement of our value strategy. Over this 18-quarter period, cumulative dividends to shareholders amount to $5.15 per share, or 29% of the current share price.

Looking ahead, we expect the positive momentum at our strong performance to continue in the first quarter for Q1, 81% of our available days are fixed at over $18700 per day, an increase of 34% versus Q4 levels. This strong performance is notable especially.

During that Q1 has historically and the seasonal low point in the Drybulk freight market.

On page seven we look back on the development of our comprehensive value strategy based on our ongoing progress in 2023 and April 2021 management and the board laid out a clear path and related objectives to transfer genco into a low leverage high dividend yield.

Company with significant financial flexibility to provide shareholders with returns and opportunistically grow through the Drybulk shipping cycles.

Since that time, we have made significant progress towards these goals and importantly have balanced our capital allocation priorities, having paid $170 million in dividends acquired $236 million of vessels and paid down $249 million in debt.

Moving to slide eight we have declared compelling dividends over the last four and a half years, including nine since the announcement of our value strategy over this 18 quarter period cumulative dividends to shareholders amount, the $5 and $15 <unk> per share or 29% of the current share price.

John Wobensmith: Further supporting our ability to pay sustainable dividends is our recent success in executing the next steps of our Fleet Renewable Strategy, as displayed on slide 9. In November 2023, we purchased two 2016-built scrubber-fitted cape-sized vessels for $86 million, while divesting three 2009 and 2010 cape-sized vessels. This trade further modernized our cape-sized fleet and reduced the risk profile, while also increasing 2024 earnings and cash flow capacity. Following the sales of the three older capes, we expect 2024 dry dock savings of approximately $10 million as we avoid the expensive third special surveys for these ships.

Further supporting our ability to pay sustainable dividends as our recent success executing the next steps of our fleet renewable strategy as displayed on slide nine.

November 2023, we purchased two 2016 built scrubber fitted capesize vessels for $86 million, while divesting three 2009 and 2010 Capesize vessels. This trade further modernize our capesize fleet and reduce the risk profile, while also increasing 2000.

24 earnings and cash flow capacity.

Following the sales of the three older Capes, we expect 2020 for Drydock savings of approximately $10 million as we avoided the expensive third special surveys for these shifts in.

John Wobensmith: In line with our bar bill approach to fleet composition, noted on slide 10, we'll continue to evaluate further opportunities in the sale and purchase market to renew our fleet. Turning to slide 11, we believe Genco is in a highly advantageous position going forward. Specifically, based on our success in lowering our debt outstanding by 55% over the last three years, we have an industry-low net loan-to-value, an industry-low cash flow break-even rate, and nearly $300 million in undrawn revolver availability. This provides significant financial flexibility and optionality for the company going forward in a cyclical and capital-intensive business. As such, we believe that Genco is well positioned to operate in both up and down markets, as shown on slide 12.

In line with our barbell approach to fleet composition noted on slide 10, we will continue to evaluate further opportunities in the sale and purchase market to renew our fleet.

Turning to slide 11, we believe genco is in a highly advantageous position going forward specifically based on our success lowering our debt outstanding by 55% over the last three years, we have an industry low net loan to value and industry low cash flow breakeven rate and nearly $300 million in undrawn.

Revolver availability this.

This provides significant financial flexibility and Optionality for the company going forward and a cyclical capital intensive business.

As such we believe that Genco is well positioned to operate in both up and down markets as shown on slide 12.

John Wobensmith: With approximately $1 billion in fleet value and taking into consideration our scale and operating leverage, we expect Genco's fleet to significantly benefit from a rising market. With that said, and given our access to capital, we are also able to take advantage of counter-cyclical opportunities to buy vessels to increase our earnings power, much like we did prior to the recent Capesides rally in early Q4. Going forward, a key priority for Genco is continuing to be good stewards of capital for shareholders and continuously evaluating capital allocation priorities. On slide 13, we summarize the key tenets of our approach to capital allocation. First, maintain low financial leverage to lower cash flow break-even levels based on the significant operating leverage inherent in the business.

With approximately $1 billion in fleet value and taking into consideration our scale and operating leverage we expect genco fleet to significantly benefit from a rising market.

With that said and given our access to capital. We are also able to take advantage of counter cyclical opportunities to buy vessels to increase our earnings power much like we did prior to the recent Capesize rally in early Q4.

Going forward a key priority for Genco is continuing to be good stewards of capital for shareholders and continuously evaluating capital allocation priorities on slide 13, we summarize the key tenants of our approach to capital allocation.

First maintain low financial leverage to lower cash flow breakeven levels based on the significant operating leverage inherent in the business.

Peter Allen: Second, pay compelling quarterly dividends consistently to shareholders, third, opportunistically grow the asset base, and the fourth is to employ a barbell approach to fleet composition by maintaining a fleet of cape-sized vessels for upside potential while owning Ultramax and Supermax vessels with a more stable earning stream. We believe our low leverage, high dividend payout model executed at scale is industry leading in the dry bulk shipping public markets. Given the volatility and the cyclicality of dry bulk shipping, we also believe it creates the optimal risk-reward balance to provide sizable returns to shareholders, opportunistically grow the fleet, and enhance our earnings power through the cycle. I will now turn the call over to Peter Allen, our Chief Financial Officer. Thank you, John.

Pay compelling quarterly dividends consistently the shareholders.

The third Opportunistically grow the asset base and the fourth is to employ a barbell approach to fleet composition by maintaining a fleet of capesize vessels for upside potential.

Owning ultra Max and Supermac Supermac vessels with a more stable earnings stream, we believe our low leverage high dividend payout model executed in scale is industry, leading in the dry bulk shipping public markets given the volatility in the cyclicality of the dry bulk shipping. We also believe it creates the optimal.

Risk reward balance to provide sizable returns to shareholders Opportunistically grow the fleet and enhance our earnings power through the cycles.

I'll now turn the call over to Peter Allen, Our Chief Financial Officer.

Thank you John on slides 15 through 17, we highlight key financial metrics of the company specifically for Q4 2023, Genco recorded net income of $4 $9 million or 12, and 11 basic and diluted earnings per share respectively, which includes the noncash vessel impairment charge of $13 6 million.

Peter Allen: On slides 15 through 17, we highlight key financial metrics of the company. Specifically, for Q4 2023, Genco recorded net income of $4.9 million, or $0.12 and $0.11 basic and diluted earnings per share, respectively, which includes a non-cash special impairment charge of $13.6 million relating to the agreed-upon sale of three older, less fuel-efficient capsized vessels. Excluding this non-cash charge, adjusted net income was $18.6 million, or $0.43 basic and diluted earnings per share.

Relating to the agreed upon sale of three older less fuel efficient capesize vessels. Excluding this noncash charge adjusted net income was $18 6 million or <unk> 43, basic and diluted earnings per share adjusted EBITDA for Q4 totaled $37 $1 million, bringing the full year 2023 total to 101.

Peter Allen: Adjusted EBITDA for Q4 totaled $37.1 million, bringing the full-year 2023 total to $101.5 million. During Q4, our net revenues increased by 50% as compared to Q3, while our recurring cost structure remained approximately flat over the period, illustrating the high degree of operating leverage inherent in the business. This operating leverage is best displayed by our cape-sized vessels, specifically those on index-length contracts. These ships achieved an average TCE of over $33,000 per day in Q4, 91% higher than in Q3, directly benefiting from the rapid rise in the cape-sized market at year-end. With such operating leverage, there is less of a need for financial leverage to achieve strong returns.

$1 $5 million.

During Q4, our net revenues increased by 50% as compared to Q3, while our recurring cost structure remain approximately flat over the period illustrating high degree of operating leverage leverage inherent in the business. This operating leverages best displayed by our Capesize vessels, specifically those on index linked contracts. These ships achieved in <unk>.

Average TCE of over $33000 per day in Q4, 91% higher than in Q3 directly benefiting from the rapid rise in the Capesize market at year end with such operating leverage there is less of a need for financial leverage to achieve strong returns on slide 18, we highlight the trajectory of our debt outstanding over the last three year.

Peter Allen: On slide 18, we highlight the trajectory of our debt outstanding over the last three years and our continued voluntary debt repayment. Through the end of 2023, we have paid down nearly $250 million of debt, meaningfully reducing our leverage. Given our 100% revolving credit facility, we will continue to actively manage our debt balance to save on interest expense while opportunistically drawing down for vessel purchases given our nearly $300 million of undrawn capacity. During the fourth quarter, we closed on a $500 million revolving credit facility, which is a key step in the continued development of our capital allocation approach. This facility increased our borrowing capacity by over $150 million, lowered pricing on margin by 30 to 60 basis points from the previous facility, and extended maturity to the end of 2028. This 100% revolving credit facility structure provides further flexibility and aligns well with our value strategy as the RCF structure enables Genco to continue the voluntary paydown of debt in line with our medium-term goal of zero net debt without losing the capacity to draw down to fund growth.

<unk> and our continued voluntary debt repayments through the end of 2023, we paid down nearly $250 million of debt meaningfully reducing our leverage.

Given our 100% revolving credit facility, we will continue to actively manage our debt balance to save on interest expense, while opportunistically drawing down for vessel purchases given our nearly $300 million of undrawn capacity during the fourth quarter, we closed on a $500 million revolving credit facility, which was a key step in the continued development of our capital allocation approach.

This facility increased our borrowing capacity by over $150 million lower pricing on margin by 30 to 60 basis points from the previous facility and extended maturity to the end of 2028. This 100% revolving credit facility structure provides further flexibility and aligns well with our value strategy is the rcs structures enables genco to continue.

The voluntary pay down debt in line with our medium term goal of zero net debt without losing the capacity to draw down to fund growth.

Peter Allen: To this point, we took advantage of the company's meaningful liquidity position to opportunistically acquire two modern, high-specification, cape-sized vessels. We will continue to assess additional sale and purchase transactions in the market in line with our fleet renewal strategy. As of December 31, 2023, our cash position was about $47 million, and our debt outstanding was $200 million, bringing our net debt level to $153 million and our net loan-to-value ratio to 15%. Additionally, with $295 million of undrawn revolver availability, our total liquidity position at the end of the year was $342 million.

At this point, we took advantage of the company's meaningful liquidity position to Opportunistically acquired two modern high specification Capesize vessels, we will continue to assess additional sale and purchase transactions in the market in line with our fleet renewal strategy as of December 31, 2023, our cash position was about $47 million and our debt outstanding was 200.

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Bringing our net debt level to $153 million and net loan to value ratio to 15%.

With $295 million of Undrawn revolver availability, our total liquidity position at the end of the year was $342 million following the completion.

Michael Orr: Following the completion of the agreed-upon vessel sales in the first quarter, we anticipate our net loan-to-value ratio to reduce to 10%. Moving to slide 19, we highlight our transparent dividend policy, which targets a distribution based on 100% of excess quarterly cash flow, excluding maintenance and withholding for future investment. The nature of our variable quarterly dividend and our fleet's operating leverage enables shareholders to directly benefit from freight rate increases, as our Q4 dividend increased by 173% to $0.41 per share. Our Q4 2023 dividend represents an annualized yield of approximately 9% on the current share price, nearly double the two-year U.S. Treasury rate of approximately 4.7%. Looking ahead to Q1 2024, on slide 20, we anticipate our cash flow break-even rate, excluding extraordinary annual meeting-related expenses, to be $9,752 per vessel per day, well below our Q1 TC estimates to date of $18,724 per day for 81% fixed, pointing to another strong quarter.

<unk> of the agreed upon vessel sales in the first quarter, we anticipate our net loan to value ratio to reduce to 10%.

Moving to slide 19, we highlight our transparent dividend policy, which targets a distribution based on 100% of excess quarterly cash flow, excluding maintenance and withholding for future investments nature.

The nature of our quarterly dividend and our fleets operating leverage enables shareholders to directly benefit from freight rate increases as our Q4 dividend increased by 173% to <unk> 41 per share. Our Q4 2023 dividend represents an annualized yield of approximately 9% on the current share price nearly doubled the two.

U S treasury rate of approximately four 7%.

Looking ahead to Q1 2024 on slide 20, we anticipate our cash flow breakeven rate, excluding extraordinary annual meeting related expenses to be $9752 per vessel per day, well below our Q1 TCE estimates to date of $18724 per day for 81% fixed pointing to another store.

Long quarter, I'll now turn the call over to Michael or our Drybulk market analyst to discuss industry fundamentals.

Michael Orr: I will now turn the call over to Michael Orr, our dry bulk market analyst, to discuss industry fundamentals. Thank you, Peter. As depicted on slide 22, after an atypically soft third quarter, the dry bulk market increased meaningfully in the fourth quarter, with cape-sized vessels reaching multi-year highs of over $50,000 per day in December. These strong rates continued into the historically softer period leading up to the Lunar New Year in February.

Thank you Peter.

As depicted on slide 22, after an atypical soft third quarter, the drybulk market increased meaningfully in the fourth quarter with capesize vessels, reaching multi year highs or $50000 per day in December.

These strong rates continued into the historically softer period, leading up to the lunar new year in February.

Capesize rates reached a 15 year high for this time of year driven by continued tightness in the Atlantic Basin.

Michael Orr: Cape size rates reached a 15-year high for this time of year, driven by continued tightness in the Atlantic basin. Currently, Cape Size and Supermax rates remain at firm levels of approximately $23,000 and $13,000 per day, respectively. Slides 23 and 24 highlight the aforementioned seasonality of the dry bulk freight market, which has historically seen a reduction in cargo availability, particularly from Brazil, due to poor weather conditions and scheduled maintenance, coupled with the timing of new building deliveries and the Lunar New Year. However, various geopolitical events continue to impact the dry bulk freight market, as highlighted on slides 25 and 26. In October, low water levels in the Panama Canal impacted a number of ships in transit, resulting in heavy delays and rerouting of vessels. One of these options was to divert vessels through the Suez Canal.

Currently Capesize and Super Max rates remain at firm levels of approximately 23000 and $13000 per day, respectively.

Slides 23, and 24 highlights the aforementioned seasonality of the Drybulk freight market, which has historically seen a reduction of cargo availability, particularly from Brazil due to poor weather conditions and scheduled maintenance coupled with the timing of new building deliveries and the lunar new year.

However, various geopolitical events continue to impact the drybulk freight market as highlighted on slides 25 and 26.

In October low water levels in the Panama Canal impacted a number of ships that could transit, resulting in heavy delays and rerouting of vessels.

One of these options was to divert vessels through the Suez Canal.

However in December the tax on commercial vessels in the region with many shipping companies to no longer transit Southern Red Sea and Gulf of Aden area further disrupting the efficiency of the global dry bulk fleet.

Michael Orr: However, in December, attacks on commercial vessels in the region led many shipping companies to no longer transit the southern Red Sea and Gulf of Aden area, further disrupting the efficiency of the Global Dry Bulk Market. Approximately 7% of dry bulk trade transits through the Suez Canal. Larger-scale tonnage rerouting over an extended period of time could increase ton-mile demand for dry bulk shipping. All else, Regarding the Chinese steel complex on slides 27 and 28, China's iron ore port inventories have been building over the last several months from very low levels but still remain well off of 2022 highs. China's iron ore imports rose by 7% in 2023 year-over-year, supporting iron ore prices which remain firm at approximately $120 per ton.

Secondary trade routes outside of Asia.

In terms of the Green trade. The end of Q1 represents the start of the South American Green season, which typically sees an increase of Brazilian plugging escort, which is supportive to monitor bulk rates are.

John Wobensmith: China's steel production was flat year-over-year in 2023; however, India grew substantially at 12%, while ex-China output increased on a year-over-year basis for the last decade. Looking ahead to 2024, the World Steel Association forecasts China's production to remain at 2023 levels, while the rest of the world is expected to see growth of 4%, potentially signaling an increase in demand from developed countries and support from secondary trade routes In terms of the grain trade, the end of Q1 represents the start of the South American grain season, which typically sees an increase in Brazilian soybean exports, which is supportive of minor bulk rates. As shown on slide 29, the USDA is forecasting another strong crop out of Regarding the supply side outline on slides 30-32, net fleet growth in 2023 was 3%, historically low order books as a percentage of the fleet, as well as near-term and longer-term While we expect volatility in the freight market, the foundation of a low supply growth picture provides a solid basis for our constructive view of the dry bulk market going forward. I will now turn the call back over to John for closing remarks.

As shown on slide 29 U S. D. A is forecasting another strong crop out of Brazil.

Regarding the supply side outline and slides 30 to 32, <unk> 2023 was three per cent.

Historically low order book as a percentage of the fleet as well as near term and longer term environmental regulations are expected to keep <unk> in the coming years.

Well, we expect volatility in the freight market. The foundation of a low supply growth picture provides a solid basis for our constructive U.

Of the dry bulk market going forward I.

I will now turn the call back over to John foreclosure with Mark.

Thank you Michael before we turned to Q&A. There are a few key points that I'd like to highlight first we are executing a clear plan and doing so with a commitment to strong corporate governance, we've made demonstrable progress executing cross the three pillars of our comprehensive value strategy.

Second are strong operating and financial results for the fourth quarter and full year demonstrate the strength of our industry, leading commercial platform and are significant operating leverage we are pleased to outperform benchmarks and increase the T C by 44% from third quarter levels.

Finally, we believe the key steps we are taking are positioning us to create value both today and for the long term. This concludes our presentation. We would now be happy to take your questions.

Operator: Thank you, Michael. Before we turn to Q&A, there are a few key points that I'd like to highlight. First, we are executing a clear plan and doing so with a commitment to strong corporate governance. We've made demonstrable progress executing across the three pillars of our comprehensive value strategy. Second, our strong operating and financial results for the fourth quarter and full year demonstrate the strength of our industry-leading commercial platform and our significant operating leverage. We are pleased to outperform benchmarks and increase TCE by 44 percent from third-quarter levels. Finally, we believe the key steps we are taking are positioning us to create value both today and for the long term. This concludes our presentation, and we would now be happy to take your questions.

Thank you, ladies and gentlemen, we will know conduct a question and answer session. If you have a question <unk> followed the number one on your Touchtone phone.

You will hear a three tone prompt acknowledging your request it.

I would like to cancel your request. Please press start to please ensure you lift the handset if you're using a speaker phone before pressing any keys.

Your first question comes from the line of Omar Nevada from Jeopardy. Your line is now open.

Thank you Hey, guys. Good morning, Thanks for the thanks for the update and yeah. Thanks for outlying obviously, the the strategy has been.

Been ongoing for three plus years or so I wanted to ask just about the drive both market overall clearly things have been <unk> you were touching on just now in the presentation things have been much healthier than expected definitely going into four Q there were not expectation for racer to jump as they did in so far here in the first quarter things have been much much.

Operator: Thank you. Ladies and gentlemen, we will now conduct the question and answer session. If you have a question, please press star followed by the number one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. If you would like to cancel your request, please press star 2. Please ensure you lift the handset if you are using a speakerphone before pressing any keys.

Healthier as well and just wanted to die just a bit deeper just kind of maybe from your perspective. If you could just give us a sense of what do you think is really behind this market.

Is it is it demand as demand really the driver here obviously.

Omar Nokta: Your first question comes from the line of Omar Nokta from Jefferies. Your line is now open. Thank you. Hey guys, good morning. Thanks for the update. And, you know, thanks for outlining, obviously, the strategy as you've been going on now for three plus years or so. I wanted to ask just about the dry book market overall. Clearly, things have been, and as you were touching on just now in the presentation, much healthier than expected. Definitely going into 4Q, there were not expectations for rates to jump as they did. And so far, here in the first quarter, things have been much, much healthier as well.

Obviously talk about the Red Sea the Panama Canal is that also having an issue on the on the margin or what what how would you characterize us market say today versus.

Last year at this time when things were looking fairly soft.

So obviously great.

Great question Omar I.

I think you have to start with the supply side, which is again continues to be very low in terms of percentage of the fleet on order. We're gonna have even lower deliveries this year versus last and then as we get into 2025 deliveries slow down even further.

And again, there from very low levels to begin with so we have a very good supply demand balance.

John Wobensmith: And just wanted to dive just a bit deeper, just kind of maybe from your perspective, if you could just give us a sense of what you think is really behind this market? Is it demand? Is demand really the driver here? You obviously talked about the Red Sea and the Panama Canal. Is that also having an issue on the margin?

This first quarter, though and and we really started to see it you know towards the middle of the of the fourth quarter.

We've seen actual increase volume's an iron ore.

<unk> <unk> I think the certainly the El Nino effect that has created dry weather in the iron ore areas in Brazil have enabled valet to increase production.

John Wobensmith: How would you characterize this market, say, today versus last year at this time when things were looking fairly soft? So obviously, great question, Omar. I think you have to start with the supply side, which continues to be very low in terms of the percentage of the fleet on order. We're going to have even lower deliveries this year versus last, and then as we get into 2025, deliveries will slow down even further, and again, they're from very low levels to begin with. So we have a very good supply-demand balance. This first quarter, though, and we really started to see it, you know, towards the middle of the fourth quarter.

From what would normally be you know a seasonal low because it would typically be the rainy season. When in fact, it's been pretty dry. So we we've seen increased iron ore we've seen increased boxlight out of West Africa coal shipments had been strong. We're we're about to come in to keep brain season for the for the southern Hemisphere.

<unk> looked very very good there in both Brazil, and Argentina, Argentinean corn, you know I had a pretty bad year last year. This year, let's looks like it's going to be close to to a record on the corn side, so that all looks positive.

John Wobensmith: You know, we've seen actual increased volumes of iron ore, bauxite, and coal. I think certainly the El Nino effect that has created dry weather in the iron ore areas of Brazil has enabled Vale to increase production from what would normally be a seasonal low because it would typically be the rainy season when, in fact, it's been pretty dry. So we've seen increased iron ore, and we've seen increased bauxite out of West Africa. Coal shipments have been strong. We are about to come into peak grain season for the southern hemisphere, and things look very, very good there in both Brazil and Argentina. Argentinian corn had a pretty bad year last year, but this year looks like it's going to be close to a record on the corn side.

But then you talk about some of the inefficiencies I think the Panama Canal.

Is probably causing greater inefficiencies then then the red sea, though certainly the the muscles avoiding the red Sea.

Are are part of the part of the story as well, but when I look at it fundamentally.

I believe that the the market is being driven by low supply demand has been volumes have been up and then we do have some inefficiencies that have been created around the Panama Canal and the Red Sea area.

Southern Red Sea area.

Thanks, John that's that's helpful context kind of broadly on the on the market and then just maybe a as a follow up wanted to ask you know on your your fleet renewal strategy. You you sold me the three older Cage acquired the two newer ones, obviously, we've seen asset values fairly firm it looks like and they.

John Wobensmith: So that all looks positive. But then you talk about some of the inefficiencies. I think the Panama Canal is probably causing greater inefficiencies than the Red Sea, though certainly the vessels avoiding the Red Sea are part of the story as well. But when I look at it, fundamentally...

Continue to push higher just wanted to ask if you can maybe touch a bit on what we're seeing or what you're seeing in the sale or purchase market and it also is that influencing in any way how you're looking at fleet renewal today versus take two months ago.

John Wobensmith: I believe that the market is being driven by low supply. Demand has been up, volumes have been up, and then we do have some inefficiencies that have been created around the Panama Canal and the Red Sea area, especially the southern Red Sea area. Thanks, John.

I would tell you there is a flurry of activity, particularly in the in the cage size sector, but but the the the smaller midsize vessels are are moving.

John Wobensmith: That's helpful context kind of broadly on the market. And then, just maybe, as a follow-up, wanted to ask you about your fleet renewal strategy: you sold the three older Capes; you acquired the two newer ones. Obviously, we've seen asset values fairly firm, and it looks like they continue to push higher. Just wanted to ask if you could maybe touch a bit on what we're seeing or what you're seeing in the sale and purchase market. And also, is that influencing in any way how you're looking at fleet renewal today versus, say, two months ago? I would tell you there is a flurry of activity, particularly in the cape-sized sector, but the smaller mid-sized vessels are moving off the shelf, so to speak, as well. But what's happening in the Cape is...

Moving off the shelf so to speak as well, but what's happening in capes is.

It's <unk> I would call it a little bit of a frenzy to be quite honest with you and the S&P market you know the the the two ships that that we bought those 2016, which we paid 43 million.

Probably easily where 50 million today and that's a very short period of time, you know that's up 16, 70% in a month and a half and it's very difficult to find ego vessels as well and we've also seen a lot of new castle and acts as being so I I think it's I think is.

John Wobensmith: I would call it a little bit of a frenzy, to be quite honest with you, in the S&P market. You know, the two ships that we bought, those 2016s, for which we paid $43 million, they're probably easily worth $50 million today, and that's a very short period of time. You know, that's up 16%, 17% in a month and a half. And it's very difficult to find eco-vessels as well.

You know on the shipbuilding side, we all appreciate it I'm not so sure if it's filtered on down to the rest of the world yet in terms of what values are being paid on ships, but it it's definitely moved up significantly over the net last you know 30 to 60 days.

I would also tell you just in general the sentiment in the in particularly in the case that Capesize markets moved up you know those.

John Wobensmith: And we've also seen a lot of new Castle Maxes being sold. I think on the ship-owning side, we all appreciate it. I'm not so sure if it's filtered down to the rest of the world yet, in terms of what values are being paid on ships, but it's definitely moved up significantly over the last 30 to 60 days.

Again going back to the two shipset that we just bought.

We were able to fix those vessels on index linked deals at 128% of the D. C I.

So very firm percentage numbers over and above the the benchmark index and then plus scrubber economics, obviously on on top of that.

John Wobensmith: I would also tell you, just in general, the sediment, particularly in the cape-sized markets, moved up. Again, going back to the two ships that we just bought, we were able to fix those vessels on index-linked deals at 128% of the BCI, so very firm percentage numbers over and above the benchmark index. And then, obviously, scrubber economics, obviously, on top of that.

So it's there's a lot of positivity right now.

On the fleet renewal side, you know is as long as we can trade out of older ships, you know for for similar relative values as as newer ships will continue to do that though I I would tell you again for taking the capesize sector.

Omar Nokta: So there's a lot of positivity right now. On the fleet renewal side, as long as we can trade out of older ships for similar relative values as newer ships, we'll continue to do that. So I would tell you, again, particularly in the Cape Sci sector, it's very difficult to find highly, you know, eco-high fuel fish and vessels, which is what we're focused on. Very good. Thanks, John, for that color

It's very difficult to find highly eco high fuel efficient vessels, which is what we're focused on.

Very good thanks, John <unk>, so that color appreciate it and I'll I'll turn it over.

Thank you Omar.

Your next question comes from the line of <unk> from be Riley you're now your line is now open.

Omar Nokta: I appreciate it. And I'll turn it over to you, Omar. Your next question comes from the line of Liam Burke from B. Reilly. Your line is now open. Thank you. Good morning, John. Good morning, Peter.

Thank you good morning, John Good morning, Peter.

Good morning.

Johnny Index only charters for the five capes have worked out pretty well for you. They run about a year. How are you looking do see opportunities to add more capes to the to.

Liam Burke: Morning, John. The index link charters for the five capes have worked out pretty well for you. They run for about a year.

John Wobensmith: How are you looking? Do you see opportunities to add more capes to those fixtures? Or do you just prefer to keep the rest of the Cape fleet in the spot market? Yeah, so look, I, you know, the index deals are effectively in the spot market, right? Because they're earning a daily rate basis to DCI, right, we do have three vessels, the Endeavor, the Resolute, and the Defender, rolling off somewhere around April, maybe a little bit later, from their index deal. In general, we like being direct with our customers, but we also believe in a portfolio approach, particularly in the Cape size sector. When you can earn 128% of the DCI plus scrubber, those are very firm numbers.

To those fixtures or do you just prefer to keep the rest of the <unk> in the spot market.

Yeah, So look I.

The index deals are effectively in the spot market right, because they're they're earning a daily rate basis. The D. C. I right. We do have we do have three vessels the endeavor of the resolute and and or rolling off somewhere around April may be a little bit later.

From their index deal. So I think we'll look to do you know probably renew a couple of those.

In General you know, we like being direct with our with our customers, but we also believe in you know a portfolio approach, particularly in the Capesize sector and when you can earn 128% of the D. C. I four scrubber that is.

They're very firm numbers. So yeah, I think we'll do a little renewal I don't see as you know expanding much beyond what what we've done today.

John Wobensmith: I think we'll do a little renewal. I don't see us expanding much beyond what we did today. It's more of a macro question, but in the presentation, you discussed replenishing inventories on the iron ore side in China, with production being flat, and the rest of the world picking up the slack in terms of iron ore demand. Are you seeing that this early in the year, or are you just seeing your iron ore trade replenishing Chinese inventories? I would say, for the most part, it's replenishing Chinese inventories. But we do expect that, as we have a recovery, you know, ex China on the steel side, we will see more iron ore flow. You're correct that production levels are projected to be flat this year.

Okay. So it was more of a macro question, but.

Presentation to discuss the replenishment of inventories on the iron ore side in China with production being flat the rest of the world picking up the slack in terms of iron ore demand are you, saying that this early in the year or are you just saying your iron ore trade replenishing Chinese inventory.

I would say for them for the most part it's replenishing Chinese inventories, but we do expect that you know as the as we have a recovery.

X China on the steel side, we will see more iron overflow. You're you are correct that production levels are projected to be flat. This year, you'll start to see production growth again next year. So I think that's positive but don't lose sight of the fact, particularly for the capes the the the Grove.

John Wobensmith: You'll start to see production growth again next year, so I think that's positive. But don't lose sight of the fact, particularly for the capes, of the growth that's coming this year in the bauxite trade and, most likely, a continued strong coal market. Great. Thank you, John. Thank you, Liam. Your next question comes from the line of Ben Nolan from Stiefel. Your line is now

That's coming this year and the <unk> and most likely a continued strong coal market.

Great. Thank you John.

Thank you ma'am.

Your next question comes from the line have been Nolin from Stifle. Your line is now open.

Ben Nolan: Thanks. Hey guys, So going back to asset values and whatnot, and John, you're talking about a frenzy market. It seems like usually when the market's in a frenzy, it's better to be a seller than a buyer. Although you did say the appetite is especially true for the more modern eco ships, which are harder to find. Do you think, you know, I mean, is this the kind of environment where you can look at some of your maybe older assets and maybe not even match them up yet with a new asset to pair against, but, you know, take advantage of, you know, just a strong appetite? Or is the appetite maybe not quite as strong for some of the, you know, 15-year-old type assets?

[noise] Hi, yes by then.

Going back to asset values, and whatnot and John you were talking about.

Frenzy market. It seems like you usually when a market to frenzy, it's better to be a seller then a buyer. Although you did say the appetite is especially true for the more modern inco's ships, which are harder to find.

Do you think you know I mean is this the kind of environment, where you can look at some of your maybe older assets and maybe not even match them up yet within new asset to to pair against but you know take advantage of.

Strong appetite.

Or his appetite maybe not quite as strong for for some of the 15 year old type acid.

John Wobensmith: I think the appetite is strong across the board, I just think it's a lot more challenging to find the newer ships. That would be something that we would look at, though I would tell you we don't have an interest per se in shrinking the fleet from these numbers; we're very constructive on ounces classified but the overall markets because of the low supply situation. We're for the next few years in terms of what we can see.

Now I feel like I think the appetite as strong across the board I I, just think it's a lot more challenging to find the the the newer ships and yeah that would be something that that we would look at though I I would tell you. We don't we don't have an interest per se and shrinking fleet from from these numbers you know we're we're we're very <unk>.

<unk>.

Not just acid nice, but the overall markets because of the low supply situation yeah <unk> for the next few years in terms of what we can see.

John Wobensmith: You know, we like being in dry bulk shipping, so in terms of shrinking the fleet, as a rule, I don't see us doing that. But, of course, we're gonna take advantage of opportunities, even if it may mean short-term selling some older ships and then, you know, medium, and longer-term replacing them. Got it.

We we we we like being in dry bulk shipping so in terms of shrinking the fleet as a as a rule I don't see us doing that but of course, we're gonna take advantage of opportunities. Even if it may mean short term selling some older ships and then you know medium longer term replacing them.

Ben Nolan: Okay, that's helpful. And then from a macro perspective, I'm curious, especially given all of the grain coming out of Brazil, which tends to be a very long-haul grain voyage anyway. With the issues in the Panama Canal, with issues in the Red Sea, are you, are we starting to see any shift in sort of the appetite for ship type? Is there a growing preference maybe to move some of that grain on? I don't know, on a Camtra Max as opposed to a Super Max or, you know, are you seeing anything along that front just to take advantage of the scale for the longer distances?

Got it Okay. That's helpful and then from a from a macro perspective, I'm I'm curious, especially given all of the the grand coming out of Brazil, which tends to be a very long haul grain mortgage anyway.

With the issues in Panama Canal with issues in the Red Sea are are you are we starting to see any shift in sort of the appetite of chip type is there a growing preference maybe to move some of that grain on.

I don't know on a cancer, Max as opposed to Super Max or or you know.

Are you seeing anything along that front just to take advantage of the <unk>.

The scale for the longer distances.

John Wobensmith: I wouldn't say there's a shift, but Panamaxes and Campsermaxes have traditionally carried grain out of that area. But I wouldn't say there's actually a shift. I mean, I think, this time of year in that area, the camps and the Ultramax and Supermax markets are fairly well linked. They're using all types of vessels to move that grain.

I wouldn't say, there's a shift but you know panamaxes in camps or matches have traditionally carry grain out of that area, but I I wouldn't say, there's actually a shift I mean, I I think you know the.

<unk> this time of year in that area of the cancer, Max's and and the Ultramax market Supermac market are fairly well link they're using all types of of vessels to move that grain and.

John Wobensmith: And, you know, again, in terms of Brazil, you're talking about another record crop of last year projected for soybeans. Corn is down, but very slightly. And then again, the Argentinian corn is going to move up.

Again in terms of Brazil, you're talking about you know another record crop off of last year projected on soybeans.

Corn is down but very slightly and then again the argentinean corn is is.

Is gonna move up I mean, I think we only maybe maybe about 27 million tons last year, but it's gonna be 45 46 million tons. This year. So again that's.

John Wobensmith: I mean, I think we only made maybe about 27 million tons last year, but it's going to be 45, 46 million tons this year. So again, that's going to be a record crop. I was actually down there last week. I saw it for myself.

That's gonna be a record crop half as I was actually down there last week I saw it for myself. It is there's a lot of corn coming out of Argentina over the next few months.

Ben Nolan: There's a lot of corn coming out of Argentina over the next few months. All right, well, I appreciate it. Thank you guys. Thank you Ben. As a reminder, if you have a question, please press star 1. Your next question comes from the line of Sheriff El Maghrabi from BTIG. Your line is now open. Hey, good morning.

Alright, well I appreciate it thank you guys.

[noise]. Thank you Ben.

That's a reminder, if you have a question please press star one.

Your next question comes from the line of Sheriff Uhm, a grubby from B D. I G. Her line is now open.

Hey, good morning, Thanks for taking my question morning <unk>.

Omar Nokta: Thanks for taking my question. Morning. First, regarding the leverage on the Ranger and the Reliance, is the thought to pay that down over time? I realize you have some cash from vessel sales coming in Q1, or could we see those ships secured under a new facility? Hi, Shreve.

First regarding the leverage on the Ranger and the reliance is the thought to pay that down over time I realize you have some cash from vessels sales coming in Q1 or could we see those ships secured under a new facility.

Peter Allen: Thanks for your question. Yeah, so, like Jon mentioned earlier, we paid $86 million for those two ships in aggregate. We tapped the revolver and drew down $65 million. So, in a bucket, that was, you know, 75% loan-to-value, but obviously, the leverage position of the company is very significantly lower than that pro forma 10%.

Oh sure you. Thanks for your question Yeah. So you know like John mentioned earlier, we paid $86 million for those two ships in aggregate, we tapped the revolver injured on $65 million. So in a in a bucket that was you know 75% loan to value, but obviously the leverage position of the company is is is very significantly lower than that a pro forma.

10% you know as we're as we're getting the sale proceeds from those three ships were gonna actively manage our deposition to to reduce interest expense on flow through the bottom line. The great thing about our new revolver is that there's no term loan component to it. So we can pay down debt not lose borrowing.

Peter Allen: You know, as we're getting the sale proceeds from those three ships, we're going to actively manage our debt position to reduce interest expense and flow through the bottom line. The great thing about our new revolver is that, you know, there's no term loan component to it. So, we can pay down debt, not lose borrowing capacity, and then, if we do see an opportunity like the company saw in Q4, we can then tap the revolver to draw down. So, I think, to your point, there will be some active management of our debt from the current level of $200 million. Thanks, Peter, that's very helpful.

Cassidy and then if we do see an opportunity to like the company saw in in queue for we can then tapped the revolver to draw down so I think to your point there there will be some active management of our debt from the current level of $200 million as those proceeds come in.

Thanks, Peter that's helpful. And then you highlighted a handful of demand drivers for the recent market strength and I think all Mars question touched on this but a chunk of it seems to be the impact of canal to blaze on please supply Ah. So do you think a full year of canal disruptions or maybe the better part of a year has been pricing the vessel values. It sounds like the positive impact.

John Wobensmith: And then you highlighted a handful of demand drivers for the recent market strength. And I think Omar's question touched on this, but a chunk of it seems to be the impact of canal deblaze on fleet supply. So do you think a full year of canal disruptions, or maybe the better part of a year, has been priced into vessel values? Sounds like the positive impact of El Nino in Brazil could also be a drag on the Panama Canal, for example.

[noise] of El Nino in Brazil could also be a drag and the Panama Canal for example.

Omar Nokta: Again, the Panama Canal is real in terms of creating fleet inefficiencies. It's hard to put a percentage of the fleet that's necessarily being taken out, but as I said, it's real. But again, I go back to the cargo flows. We've seen iron ore and bauxite up 10% over last year's levels. Those are really meaningful numbers, particularly when you have such a low order book and such a low delivery schedule; it creates a tremendous amount of leverage by just moving up incrementally on the demand side. Great, thanks for taking my question. Thank you, take care. Your next question comes from the line of bendignity from Clarkson Securities. Your line is now open.

Again, the the the the Panama Canal is Israel in terms of draining fleet inefficiencies. It's it's hard to you know.

It's hard to put a percentage of of the fleet, that's necessarily being taken out, but but as I said, it's real but again I go back to the cargo flows I mean, we've seen iron ore bauxite up 10% over over last year's levels that those are real meaningful numbers, particularly when you have such a low order book in such a <unk>.

<unk> delivery schedule it creates a tremendous amount of of leveraged by just moving up incrementally on the on the demand side.

Great. Thanks for taking my question.

Thank you take care.

Your next question comes from the line of Bendick Neediness from Clarkson Securities. Your line is now open.

bendignity: Thank you. I just wanted to touch upon the capes as well, building on the questions of some of the other guys. You talked about the lower than normal seasonal factors and the frenzy in the secondhand market.

Thank you just wanted to touch up on the K Pleasantville, I guess building on the questions off of someone will be able to advise.

You talked about the lower than normal seasonal factors on the frenzy.

If economic markets, how do you view potentially logging in some of your tapes with current definitely values ethanol in front of $7000 for the reminder of the yeah.

John Wobensmith: How do you view potentially locking in some of your capes with current FFA values at around $27,000 for the remainder of the year? So. In the past, we have definitely locked ships away for one to two years, even three years at a time, particularly as you mentioned in the capesize sector. We think that is a good way to manage risk.

So.

In the past, we have definitely lost shipped away for one to two years, even three years at a time, particularly as you brought up in the Capesize sector. We think that is a good way to manage risk.

John Wobensmith: We were still relatively, We're still bullish on the cape size market, so I would say it's a little too early to lock in, but it is certainly something that we're looking at. And as I said, we've done it in the past, and from time to time, we think it's the right move to take some risk off the table in the cape. You know, the other thing I would point out is that the index deals that we've recently done, as well as the past index deals, have options for us to fix periods of time within, you know, within those transactions. So, and we've done that. We actually did that a little bit in for the month of February in the first quarter, but obviously, that was very short term, and it was just to sort of get through the month of February. But we have, we have that option to lock in for longer terms. That's that's great. Great color, too.

We we're still relatively.

We're we're we're still bullish on the Cape size market. So I I would say, it's it's a little too early to to lock in but it is certainly something that that we're looking at and as I said, we've we've done it in the past and from time to time, we think it's we think it's the right move to to take some risk off the table and.

Capes.

You know the other thing I would point out is the the index deals at we've recently done as well as the the past index deals have options for us to fix periods of time within you know within this transaction, so and we've done that we actually did that a little bit in.

For the month of February in the first quarter, but obviously that was very short term and it and it was just to sort of get through the month of February but we have we have that option to lock longer term.

That's that's great a great color and also if I could just.

John Wobensmith: And also, if I could just touch upon the fleet renewal as well. You've been quite active on the Cape side, but when should we expect to see some of the same for Supra Maxis, or if at all? You will.

Ketchup on the the <unk> fleet when you are as well you'll get you've been quite active on the Cape side, but when should we expect to see some of the same four four super Max's or if at all.

You you will <unk>, you know where where we're focused on some of the 58, it's hard to put a definitive you know timeframe on it except that I would say I you know I expect it to happen. This.

John Wobensmith: We're focused on some of the 58s. It's hard to put a definitive timeframe on it, except that I would say I expect it to happen this year. Keep in mind that we have bought 11 Ultras since 2018, so this has been an ongoing process. But now, with where vessel values are, they seem to be firming. The momentum from the Capes is moving down into the mid-sized vessels, so it's starting to make sense on the valuation front for some of our older 58s. So it's definitely on the table. It's just a little hard to give you the exact timing, but I certainly believe it this year.

This year keep in mind that you know we have at 11 ultras since 2018. So this has been.

An ongoing process, but now with where vessel values are they they seem to be firming, you know that the momentum from the capes or are moving down into the into the mid size vessels. So it's starting to make sense on the valuation front for that for our some of our older 58. So.

It's definitely definitely on the table just a little hard to give you the exact timing, but I I I certainly believe this year.

John Wobensmith: Okay, perfect. Thank you. I'll return to the queue. Thank you. As there are no further questions at this time, this concludes our conference call for today. We thank you for your participation and ask that you please disconnect your lines. Thank you.

Okay perfect. Thank you <unk>.

Thank you.

There are no further questions at this time. This concludes our conference call for today, we thank you for your participation and ask that you. Please disconnect your lines.

Thank you.