Q4 2023 Navios Maritime Partners LP Earnings Call
Operator: The Ultimate Parody Site! Thank you for joining us for Navios Maritime Partners' 4th Quarter 2023 Earnings Conference Call. With us today from the company are Chairperson and CEO, Ms. Angeliki Frangou, Chief Operating Officer, Mr. Efstratios Desypris, Chief Financial Officer, Ms. Ceri Cironi, and Vice Chairman, Mr. Ted Petron. As a reminder, this conference call is being webcast. To access the webcast, please go to the Investors section of Navios Partners' website at www.navios-mlp.com. You'll see the webcasting link in the middle of the page, and a copy of the presentation referenced in today's earnings conference call will also be found there.
Thank you for joining us for Navios Maritime partners fourth quarter 2023 earnings conference call with US today from the company are chairwoman and CEO Ms. Angelica, Frank <unk>, Chief operating officer, Mr status DCP Chief.
Financial Officer, Miss attitude on meat, and Vice Chairman, Mr. Ted Petrone.
As a reminder, this conference call is being webcast.
To access the webcast. Please go to the investors section of Navios Partners' website at Www Dot Navios MLP dot com you'll.
You'll see the webcasting link in the middle of the page and a copy of the presentation referenced in todays earnings conference call will also be found there.
Operator: Now, I will review the Safe Harbor Statement. This conference call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios Partners. Forward-looking statements are statements that are not historical facts.
Now I will review the Safe Harbor statement. This conference call could contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 about Navios partners forward looking statements are statements that are not historical facts.
Operator: Such forward-looking statements are based upon the current beliefs and expectations of Navios Partners management and are subject to risks and uncertainties which could cause actual results to differ materially from the forward-looking statement. Such risks, some of which are fully discussed in Navios Partners' filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks.
Such forward looking statements are based upon the current beliefs and expectations of Navios partners management and are subject to risks and uncertainties, which could cause actual results to differ materially from the forward looking statements.
Such risks are more fully discussed in Navios partners filings with the Securities and Exchange Commission.
The information set forth herein should be understood in light of such risks Navios partners does not assume any obligation to update the information contained in this conference call.
Operator: Navios Partners does not assume any obligation to update the information contained in this conference call. The agenda for today's call is as follows. First, Ms. Frangou will offer opening remarks.
The agenda for todays call is as follows first Ms Wang who will offer opening remarks.
Angeliki N. Frangou: Next, Mr. Desypris will give an overview of Navios Partners' segment data. Next, Ms. Tironi will give an overview of Navios Partners' financial results. Then, Mr. Petron will provide an industry overview. And lastly, we'll open the call to take questions. Now, I turn the call over to Navios Partners' Chairperson and CEO, Ms. Angeliki Frangou. Angeliki?
Next Mr. The shippers would give an overview of Navios Partners' segment data next Mr. Ronnie will give an overview of Navios partners financial results then Mr. Petrone will provide an industry overview and lastly, we'll open the call to take questions now I turn the call over to Navios partners chairwoman and CEO Ms. Angie.
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Angeliki N. Frangou: Good morning all, and thank you for joining us on today's call. I am pleased with the results of the fourth quarter and full year of 2023. For the quarter, we reported revenue of $327.3 million and net income of $132.4 million. For the full year, we reported revenue of $1.3 billion and net income of $433.6 million. The general background in which we operate is important. In 2023, the world continues to experience disruptions in normal trade routes. Regional conflicts, initially in Ukraine and Russia and later in the Middle East, introduce uncertainty and inefficiency in transportation. Most recently, we have seen traffic in the Suez Canal reduced by over 50%. This disruption is compounded by a drought limiting traffic in the Panama Canal.
Good morning, and thank you for joining us on today's call I am pleased with Asia towards the fourth quarter and full year of 2023 for the quarter. We reported revenue of 327 $23 million and net income the habit of $32 4 million down.
For the full year, we reported revenue of $1.3 billion in net income of $433.6 million.
Net earnings per common unit or $4.30 for the quarter.
$14 eight for the full year.
They're generally background in which we operate is important.
In 2023 that we'll continue to experience. These option in normal trade route regional conflicts initially in Ukraine, and Russia and late in the Middle East introduced.
Certainly any deficiency in transportation.
Most recently, we have seen traffic weakness with reduced by over 50%.
This is an option is compounded by a doubt limiting traffic in the Panama Canal.
Consequently, it typically seasonally slow Q1.
Angeliki N. Frangou: Consequently, a typically seasonally slow Q1 has been surprisingly strong in 2024. In addition, the US and European economies seem to have managed inflationary pressures and are generally healthy. While there are pockets of weakness, the economies of most of the top ten economies are growing. Furthermore, China seems to be leveraging its export strength to counter the economic issues it is facing domestically. Should the current environment remain, we would expect rates to remain strong for 2024. However, I do note that this robust environment can change quickly should conflict-driven efficiencies clear and all economies suffer from a further wave of inflation. As usual, we continue to execute on a strategic initiative by focusing on things that we can control, such as reducing leverage, modernizing our energy-efficient fleet, and taking long-term cover where available. Please turn to slide 7.
Has been surprisingly strong in 2024. In addition, the U S and European economies seem to manage inflationary pressures and are generally shake.
Why the pockets of weakness the economies.
The top 10 economies are growing.
For the China seems to be leveraging each export strength to counter the economic issues. It is facing domestically.
<unk> got an environment remain.
We would expect the rate to remain strong for 'twenty 'twenty. Four however, I do know that this robust environment can change quickly should conflict driven efficiencies gilead and our economy.
So it further wave of inflation.
As usual, we'll continue to actually good on our strategic initiatives by focusing on things that we can control such as reducing leverage modernizing our energy efficient fleet and taking long term Gaza when available.
Please turn to slide seven Navios partners.
Angeliki N. Frangou: Navios Partners is a leading publicly listed shipping company diversified in 15 asset classes in three sectors. We have $296.2 million of cash on our balance sheet. And in the fourth quarter, we earned about 5.4% interest on an annualized basis on our cash balance. Our fleet modernization continues. In the period 2023 to 2024 year-to-date, we sold 17 vessels, generating gross sale proceeds of $327.6 million. We took delivery of two container ships chartered out for over five years at an average net rate of $37,015 per day. We also added about $137 million of contracted revenue to our coverage with various long-term charters, mainly in the tiger segment. For 2024, 63% of our 56,058 available days are fixed. This creates a current break-even of $491 per open day. Let's now turn to slide 8.
Leading publicly listed shipping company diversified interesting asset classes sectors.
We have $296 2 million of cash.
On our balance sheet and in the fourth quarter with about five 4% interest on an annualized basis and our cash balance.
Fleet Modernizations containers.
The period of 2023 to 'twenty 'twenty four year to date, we sold 17 vessels generating gross sales losses or they found it on 27 $6 million.
We took the liberty of two container ships chartered out for over five years at an average net rate.
It is $7050 per day, we also added about $137 million of contracted revenue to our coverage with revised long term charters, mainly the diagnosis.
For 'twenty 'twenty, 463% of our 56058 available days I'll say this.
This creates a guy didn't break even a $491 per open day.
Let's now turn to slide eight.
Angeliki N. Frangou: On this slide, we provide an overview of our execution in terms of certain important metrics comparing 2023 to a base year of 2022. As you can see, our fleet remains about the same size today as it was in 2022, with all of the purchases and sales effectively being netted out as we modernize our fleet. Not accidentally, our fleet age remains the same.
On this slide we provide an overview of what execution in terms of certain important metrics comparing 'twenty 'twenty city the base year of 2022.
As you can see our fleet remains at about the same size today.
It was in 2022.
With all of the purchases and says effectively being netted out as they modernize our fleet.
Not accidentally a few days it remains the same we believe that why we must be patiently await the development of <unk> technology, we can maximize energy efficiency by maintaining a fleet of youthful vessel containing guidance technology.
Angeliki N. Frangou: We believe that while we must patiently await the development of carbon neutral technologies, we can maximize energy efficiency by maintaining a fleet of useful vessels containing current technology. In addition, as you can see from the value of our vessels, the diversity of our fleet has allowed the steel value of our fleet to improve by about three percent from 2022. I would also note that these steel values do not give any consideration to our contracted backlog, which today is about 3.3 billion dollars. With a stable and performing fleet, our financial metrics have improved. Year over year, revenue is up 8%, and adjusted EBITDA is up by 12%. These developments allow us to reduce our debt by 6% to $2 billion and increase our cash balance by about 70% to almost $300 million.
Okay.
In addition, as you can see from vessels value the diversity of our fleet has allowed to still viable.
To improve by about 3% from 'twenty to 'twenty two.
I would also note that the street values do not give any caution donation to our contracted backlog, which today is about three points we'd be donuts.
With a stable and performing fleet I financial metrics have improved year over here.
Who is up 8% and adjusted EBITDA is up by 12%.
Relevant allow us to reduce our debt by 6% to $2 billion.
We increased our cash balance by about 70% to almost $300 million.
Efstratios Desypris: Consequently, we are on the path to a target net leverage of 20-25% with a current net leverage of 38.2%. This is an improvement of 15% over year-end 2022. I would like now to turn the presentation over to Mr. Efstratios Desypris, Navios Partners' Chief Operating Officer. Thank you, Angeliki, and good morning, all.
Consequently, we are on the path to our target net leverage of 20% to 25% with net leverage of 38, 2%. This is an improvement of 15% over here and 2022.
I'd like now to turn the presentation over to Mr. Stratos they see.
Navios partners, Chief operating Officer Stratos.
Thank you Uli and good morning.
Efstratios Desypris: Please turn to slide 9, which details our operating 3CAS flow potential for 2024. We fix 63% of available days at an average rate of $24,910 net per day. This creates an estimated operating break-even of $491 per day for the remaining 20,497 days that are open or index-linked.
Please turn to slide nine which details our operating free cash flow potential for 2024.
63% of available days at an average rate of $24910 net per day.
This created an estimated operating breakeven or $491 per day for the remaining 2000 20497 days, but that opened or index linked.
Efstratios Desypris: On the right side of the slide, we provide our 56,058 available days by vessel type so that you can perform your own sensitivity analysis. However, whatever number is used, we should develop a substantial cash flow in 2024. Please turn to slide 10.
On the right side of the slide we provide our 56058 available days by vessel type. So that you can perform your own sensitivity analysis. However.
However, whatever number used which have developed substantial customer wins because frequency Paul.
Please turn to slide 10, we.
Efstratios Desypris: We are always renewing the fleet so that we maintain a young profile. It is part of our strategy to reduce our carbon footprint by modernizing our fleet, benefiting from newer technologies and eco-vessels with greener characteristics. During Q4 of 2023 and Q1 2024, we took delivery of two 5,300 TEU container ships, both chattered out for an average of 5.2 years at an average net daily rate of $37,050 per day, generating revenue of approximately 140 million. Following these deliveries, we have 1.6 billion remaining investment in 26 new building vessels delivering to our fleet through 2027. In container ships, we have 10 vessels to be delivered, with a total acquisition price of approximately $736 million. We have mitigated this risk with long-term credit-worthy charters, generating about $0.9 billion in revenue over a 6.6 year average charter duration. In the tankard space, we acquired 16 vessels for a total price of approximately $885 million.
We are also renewing the fleet so that we maintain good junk profiles.
It is part of our strategy to reduce our carbon footprint by modernizing our fleet benefiting from new technologies, and nickel or issues with getting their characteristics.
During Q4 of 2023 in Q1 2024, we got delivery of two 5300 Teu container ships, both chartered out for an average of five two years.
Nobody's knit daily rate of $77050 per day.
Generating revenue of approximately $140 million.
Following these deliveries we have one 6 billion remaining investment in 26, new building vessels delivering core fleet through 2027.
And container ships, we have 10 vessels to be delivered with a total acquisition price of approximately $756 million.
We have mitigated this risk with long term credit was.
Generating about <unk> 9 billion in revenue over the 6.6 year average charter duration.
In the tanker space Wake word 16 vessels for a total price of approximately $885 million.
Efstratios Desypris: We charted out 10 of these vessels for an average period of 5 years, generating revenues of about half a billion. The dry bulk new building program of 8 vessels was completed in June 2023 with the delivery of the last Cape-sized vessel. We have also been opportunistically selling older vessels. In 2023 and year-to-date in 2024, we have sold 17 vessels with an average age of 15.4 years for 327.6 million. We sold 8 tanker vessels for about $213 million, and 9 dry bulk vessels for about $114.5 million. Moving to slide 11.
With charter about Denver. These vessels for an average period of five years generating revenues of about half a billion.
The dry bulk you believe program of eight vessels was completed in June 23, with the delivery of the last Capesize vessels.
We have also been opportunistically selling older vessels 2023 and year to date in 2024, we have sold 17 vessels with an average age of $15 40 years for $307 6 million.
We saw de tanker vessels for about $250 million and nine drybulk vessels for about $114 5 million.
Moving to slide 11.
Efstratios Desypris: We continue to secure long-term employment for our fleet. In Q4 2023 and year-to-date 2024, we have created about 140 million additional contracted revenues. Approximately 125 million come from our tanker fleet, and about 15 million come from one dry bulk vessel. Our total contracted revenue amounts to $3.3 billion.
We continue to secure long term employment for our fleet in Q4, 2023 and year to date 2024, we have created about 140 million of additional contracted drilling.
Approximately 125 million comes from our tanker fleet and about 15 million comes from one drybulk questions.
Our total contracted revenue amounts to $3 3 billion. One 1 billion relates to tanker fleet 44 billion relates towards dry bulk fleet and $1 8 billion really relates to our container ships.
Angeliki N. Frangou: $1.1 billion relates to our tanker fleet, $0.4 billion relates to our dry bulk fleet, and $1.8 billion relates to our containers. Charters are expanding through 2037 with a diverse group of quality counterparties. About 50% of our contract revenue is expected to be earned in the next two years. I now pass the call to Eri Tsironi, our CFO, who will take you through the financial highlights.
So after an extended through 2057 with a diverse group of quality Counterparties.
About 50% of our contracted revenue is expected to be in the next few years.
I'll now pass the call to ADT at only a CFO, which will take you through the financial highlights.
Angeliki N. Frangou: Thank you, Stratos, and good morning all. I will briefly review our unannounced financial results for the fourth quarter and the year ended December 31st, 2023. The financial information is included in the press release and is summarized in a slide presentation available on the company's website. Moving to the earnings highlights on slide 12, total revenue for the fourth quarter of 2023 decreased to $327 million compared to $371 million for the same period in 2022 on the back of 6% fewer available days and 5% lower combined time charter equivalent rate. Revenue in Q4 2023 compared to Q3 2023 increased by 4.1 million on the back of a higher combined time charter equivalent rate despite lower available days. However, time charter revenue for the three-month period is understated by 10.5 million because U.S. GAAP rules require the recognition of revenue for our charters with the escalating rates on a straight-line basis.
Thank you Scott and good morning, all I will.
Briefly review, our unaudited financial results for the fourth quarter and the year ended December 31st 2023. The financial information is included in the press release and summarized in the slide presentation are available on the company's website.
Moving to the earnings highlights on Slide 12 total revenue for the fourth quarter of 2023 decreased to 327 million compared to 371 million for the same period in 2022 on the back of 6% less available days and a 5% lower combined time charter equivalent.
Right.
And having you in Q4 2023 compared to Q3 2023 increased by four 1 million on the back of higher combined time charter equivalent rate despite lower available days.
Total revenue for the three months period is understated by $10 5 million because U S. GAAP rules require the recognition of revenue for our charters with Tas can lead to greater on a straight line basis.
Angeliki N. Frangou: In terms of sector performance, TCE rates for the fourth quarter of 2023 for our dry bulk fleet increased by 6.5% to 16,902 per day compared to the same period in 2022. In contracts, our container and tanker TCE rates were approximately 11% lower compared to the period last year, at 30,356 and 27,562 per day, respectively. EBITDA, Net Income, and EPU were adjusted as explained in the slide footnote.
In terms of sector performer TCE rates for the fourth quarter of 'twenty to 'twenty three for dry bulk fleet increased by six 5% to 16902 per day compared to the same periods in 2022 and contracts to our container and banking TCE rates for approximately.
11% lower compared to the same period last year at 30356, and 27562 per day, respectively.
EBITDA net income and maybe you were drafted as explained in the slide footnote.
Angeliki N. Frangou: Excluding these amounts, adjusted EBITDA for Q4 2023 increased to $227 million, 13% higher compared to the same period last year and almost 31% higher compared to Q3 2023. Adjusted net income for Q4 2023 increased to $133 million, 18% higher compared to Q4 2022 and 61% higher compared to Q3 2023. Total revenue for 2023 increased by 8% to $1.3 billion compared to $1.2 billion for the same period in 2022. However, time-chartered revenue for the period is understated by $40.7 million because U.S. GAAP rules require the recognition of revenue for our charters with de-escalating rates on a straight-line basis. The increase in revenue was mainly a result of a 10% increase in our available days to 54,766 compared to 49,804 in 2022. However, our combined TCE rate for 2023 was lower at 22,337 per day compared to the same period last year.
Excluding these amounts adjusted EBITDA for Q4, 2023 increased to $227 million, 13% higher compared to the same period last year, and almost 31% higher compared to Q3 planned to 'twenty three.
Adjusted net income for Q4, 2023 increased to 153 million, 18% higher compared to Q4, 2022, and 61% higher compared to Q3 2023.
Total revenue for 2023 increased by 8% to $1 3 billion compared to $1 2 billion for the same period in 2022.
Time charter revenue for the period is understated by $47 million because U S. GAAP rules require the recognition of revenue for our charters with the escalating rates on a straight line basis.
Increase in revenue was mainly a result of a 10% increase in our available days to 54766 compared to 49804 in 2022.
Our combined TCE rate for 2023 was lower at 22337 per day compared to the same period last year.
In terms of sector performers, both tankers containers enjoys it prove rates compared to the same period last year.
2023 time charter equivalent rates for our tankers increased by 36% to 28662 per day and for our containers by approximately 8% to 33770 per day compared to the same period last year.
Angeliki N. Frangou: In terms of sector performance, both tankers and containers enjoyed improved rates compared to the same period last year. 2023 time charter equivalent rates for our tankers increased by 36% to 28,662 per day and for our containers by approximately 8% to 33,770 per day compared to the same period last year. In contrast, our dry fleet TCE rate was 36% lower compared to the same period last year at 40,422 per day. Adjusted BIDA for 2023 increased by 12% to $748 million compared to $668 million in 2022. Adjusted net income for 2023 increased by 11% to $383 million compared to $430 million last year. Our net income was negatively affected by a $55 million reduction in the positive impact of the amortization of unfavorable leases and a $41 million increase in our net interest income due to the increase in our debt levels and the interest rate costs.
In contrast, our dry fleet TCE rate was 36% lower compared to the same period last year at 40422 pending.
Adjusted EBITDA for 'twenty to 'twenty, three increased by 12% to 748 million compared to $668 million in 2022.
Adjusted net income for 2023 increased by 11% to 383 million compared to 430 million last year.
Our in our net income was negatively affected by 55 million reduction and the positive impact of the amortization of unfavorable leases and a $41 million increase in our interest expense net of interest income due to the increase in our debt levels and the interest rate costs are just that.
Earnings per common unit for 2023 or 12 $45.
Turning to slide 13, I will briefly discuss some key balance sheet data as of December 31st 2023, cash and cash equivalents, including restricted cash and time deposits in excess of three months were $296 million.
Angeliki N. Frangou: Adjusted earnings per common unit for 2023 were $12.45. Turning to slide 13, I will briefly discuss some key balance sheet data. As of December 31, 2023, cash and cash equivalents, including restricted cash and time deposits in excess of three months, were $296 million.
During 2023, we paid $465 million of pre delivery installments on our new building program vessel acquisitions and other capitalized expenses, we sold 15 vessels for 259 million net adding about $163 million cash after that.
Payment of their respective debt.
Long term borrowings, including the current portion net of deferred fees refused to 186 billion.
Angeliki N. Frangou: During 2023, we paid $465 million of pre-delivery installments under our new building program, vessel acquisitions, and other capitalized expenses. We sold 15 vessels for $259 million net, adding about $163 million cash after the repayment of their respective debt. Long-term borrowers, including the current portion net of deferred fees, decreased to $1.86 billion.
Net debt to book <unk> decreased to 33, 8%.
Slide 14 highlights our debt profile.
We continue to diversify our funding sources between bank debt and recent factors, while 36% of our debt has fixed interest at an average rate of five 6%.
We also try to mitigate part of the increase interest rate cost having reduced the average margin of our floating rate debt by approximately 40 basis points to two 3% from two 7% at 2022 year end.
Angeliki N. Frangou: Slide 14 highlights our debt profile. We continue to diversify our funding resources between bank, debt, and leasing structures, while 36% of our debt has a fixed interest at an average rate of 5.6%. We also try to mitigate part of the increased interest rate cost by having reduced the average margin of our floating rate debt by approximately 40 basis points to 2.3% from 2.7% at 2022 year end. Our maturity profile is staggered, with no significant balloons due in any single year.
Our maturity profile this target with no significant balloons you in any single year.
In terms of our new building program, 80% of our new building financing is already concluded oriented commendations phase at an average margin of one 8% for floating rate debt.
In January 2024, we have signed a 40 million facility with a new lender to refinance three vessels, where we managed to decrease our margin and extend maturity.
Turning to slide 15, you can see our ESG initiatives will continue to invest in new energy and if he sent vessels and reduce emissions through energy saving devices and efficient vessel operations and a favorite 'twenty 'twenty four navios in collaboration with Lloyd's Register founded the global Maritime emission reduction.
Angeliki N. Frangou: In terms of our new building program, 80% of our new building financing is already concluded or in the documentation phase at an average margin of 1.8% for floating rate debt. In January 2024, we signed a $40 million facility with a new lender to refinance three vessels, where we managed to decrease our margin and extend maturity. Turning to slide 15, you can see our ESG initiatives. We continue to invest in new energy-efficient vessels and reduce emissions through energy-saving devices and efficient vessel operations. In February 2024, Navios, in collaboration with Lloyds Registers, founded the Global Maritime Emissions Reduction Center that will focus on optimizing the existing global fleet efficiency. Navios is a socially conscious group whose core values include diversity, inclusion, and safety.
Center that will focus on optimizing the existing global fleet fleet efficiency.
Navios is a socially conscious group, whose core values include diversity inclusion and safety, we have strong corporate governance. It cleared code of ethics, while our board is composed by majority independent directors.
I'll now pass the call to Ted Petrone to take you through the industry section.
Thank you Arie, Please turn to slide 17 for a review of current trade disruptions Panama.
Panama and Suez Canal to strategic Maritime transit points continue to operate at restricted transit levels.
Through the Suez Canal, the Red Sea disruptions have caused a rerouting of shifts via the Cape of good hope increasing costs in ton miles since the end of November transits have reduced by 75% for containers, 51% for product tankers, 16% for crude tankers and 34% for dry bulk vessels.
Ted Petron: We have strong corporate governance and a clear code of ethics, while our board is composed of majority independent directors. I now pass the call to Ted Petron to take you through the industry section. Ted?
Panama Canal Daily Transit restriction stand at 24 vessels, 33% below normal please turn to slide 19 for a review of the tanker industry.
Ted Petron: Thank you, Ari. Please turn to slide 17 for a review of current trade disruptions. The Panama and Suez Canals, two strategic maritime transit points, continue to operate at restricted transit levels.
World GDP grew at three 1% in 2023 and is expected to grow by 3.4% again in 2024 based on the Imf's January forecast.
There's 85% correlation of world oil demand to global GDP growth in spite of economic uncertainties in the crisis in the Ukraine and Red C. D. E. R. E. A projected at $1 2 million barrels per day increase in world oil demand for 2024 to 303 million barrels per day Chinese.
Ted Petron: With regard to the Suez Canal, the Red Sea disruptions have caused a rerouting of ships via the Cape of Good Hope, increasing costs and tonnemiles. Since the end of November, transits have reduced by 75% for containers, 51% for product tankers, 16% for crew tankers, and 34% for dry bulk vessels. Panama Canal daily transit restrictions stand at 24 vessels, 33% below normal.
Chinese crude imports continued to rise averaging $11 3 million barrels per day in 2023, and 11% increase over 2022.
After a seasonally low Q3, all sector rates increased in Q4 in the back of higher global demand and increasing refinery throughput led by China, and India. Additionally, seaborne crude and clean trading patterns, which were initially diverted to longer haul routes due to Russian sanctions have once again being rerouted by the above mentioned red Cedar.
Ted Petron: Please turn to slide 19 for a review of the tanker industry. World GDP grew by 3.1% in 2023 and is expected to grow by 3.1% again in 2024 based on the IMF's January forecast. There is an 85% correlation between world oil demand and global GDP growth. In spite of economic uncertainties and the crisis in the Ukraine and the Red Sea, the IEA projects a 1.2 million barrels per day increase in world oil demand for 2024 to 103 million barrels per day. Chinese crude imports continued to rise, averaging 11.3 million barrels per day in 2023, an 11% increase over 2022.
Disruptions.
These even longer haul routes continue to increase ton miles putting pressure on both cost and rates.
<unk> rates remained firm having risen on the back of rising demand the.
The Saudi and Russia export cuts had been somewhat mitigated by increased Atlantic exports turning to slide 20, as previously mentioned, both crude and product rates remained strong across the board due to healthy supply and demand fundamentals minimal fleet growth and shifting trading patterns product tankers are also aided by healthy refinery margins at <unk>.
Discounted Russian crude export it to the Indian Ocean and the far east returning to the Atlantic as clean product.
Crude ton mile growth increased by six 2% in 2023 and is expected to grow by a further four 1% in 2024.
Similarly product ton miles increased nine 6% in 2023 and are expected to grow seven 3% in 2024. These percentage increases anticipate some continued can now restrictions, but could rise based on the duration of the sanctions.
Ted Petron: After a seasonally low Q3, all sector rates increased in Q4 on the back of higher global demand and increasing refinery throughput led by China and India. Additionally, seaborne crude and clean trading patterns, which were initially diverted to longer haul routes due to Russian sanctions, have once again been rerouted by the above-mentioned Red Sea disruptions. These even longer haul routes continue to increase tonnemiles, putting pressure on both costs and rates. However, recent rates remain firm, having risen on the back of rising demand.
Turning to slide 21, VLCC naturally growth is projected at two 2% for 2023, and a negative fleet growth of 0.5% for 2024.
This decline can be partially attributed to owners hesitant to order expensive long lived assets in light of macroeconomic uncertainty and engine technology concerns due to C. O two restrictions as force since the beginning of the year.
The current record low order book is only two 6% of the fleet or only 23 vessels one of the lowest in 30 years.
This is over 20 years of age are about 70% of the fleet.
And the total fleet or 157 vessels, which is almost seven times the order book turning to slide 22.
Ted Petron: The Saudi and Russian export cuts have been somewhat mitigated by increased Atlantic exports. Turning to slide 20, as previously mentioned, both crude and product rates remain strong across the board due to healthy supply and demand fundamentals, minimal fleet growth, and shifting trading patterns. Product tankers are also aided by healthy refinery margins and discounted Russian crude exported to the Indian Ocean and the Far East, returning to the Atlantic as clean product. Crude tonnemile growth increased by 6.2% in 2023 and is expected to grow by a further 4.1% in 2024. Similarly, product ton miles increased 9.6% in 2023 and are expected to grow 7.3% in 2024. These percentage increases assume some continued canal restrictions but could rise based on the duration of these sanctions.
Eric tanker net fleet growth was two 1% for 2023 and projected to be only one 4% for 2024.
Product tanker order book is 12, 7% of the fleet one of the lowest on record and is approximately equal to 14, 6% of the fleet, which is 20 years of age or older.
And concluding the tanker sector review tanker rates across the board continue at historically healthy levels combination of below average global inventories growth in oil demand longer new longer trading routes for both crude and products as well as one of the lowest order book in three decades, and the IMO 2023 regulations should provide for healthy.
Tanker earnings going forward.
Please turn to slide 24 for a review of the Drybulk industry. The first eight months of 'twenty 'twenty four right in all sectors remained muted as record Chinese imports were mitigated by unwinding congestion Chinese raw material demand continue throughout 'twenty three on the back of persistent economic stimulus and continued stockpiling.
Atlantic exports of iron ore and bauxite angry and in Q4, but both the BD and Cape rates to peak on December 4th at 3346 points and $54584 respectively.
Ted Petron: Turn to slide 21, VLCC net fleet growth is projected at 2.2% for 2023 and negative fleet growth of 0.5% for 2024. This decline can be partially attributed to owners' hesitance to order expensive, long-lived assets in light of macroeconomic uncertainty and engine technology concerns due to CO2 restrictions enforced since the beginning of the year. The current record low order book is only 2.6% of the fleet, or only 23 vessels, one of the lowest in 30 years. Vessels over 20 years of age are about 17% of the fleet, or 157 vessels, which is almost 7 times the order book. Turn to slide 22.
The BD I opened 2024 at 2093 and year to date average stands at approximately 1600 levels rarely seen in the early part of the year.
<unk> had a negative headlines Chinese imports of iron ore coal soybeans and bauxite in 'twenty three were up 16% over 2022.
With regard to iron ore China's GDP grew at five 2% in Q4 of 'twenty three Chinese continue stimulus measures and stocking should assist iron ore demand, which recorded record in point in 2023 of 1.16 billion tons.
Poultry continues to be impacted by the war in Ukraine, as a ban on Russian coal shifted trading patterns towards longer haul route.
Global imports are expected to increase 3% or about 19 million tons second half of 2024 over the first half of 2024.
Ted Petron: Product tanker Netflix growth was 2.1% for 2023 and projected to be only 1.4% for 2024. The current product tanker order book is 12.7% of the fleet, one of the lowest on record, and is approximately equal to 14.6% of the fleet, which is 20 years of age or older. In conclusion, tanker rates across the board continue at historically healthy levels.
As with coal to global grain trade is also impacted by the war in Ukraine shifting trading patents for longer haul routes seaborne grain trade volume is expected to grow by 1.9% in 2024.
Going forward supply and demand fundamentals remain intact and normally seasonally stronger Q2 historical low order book, continuing canal restrictions and tightening tht emissions regulations remain positive factors, which are reflected in the period and FFA market.
Please turn to slide 25 the.
The current order book stands at eight 5% of the fleet one of the lowest since COVID-19 nineties net fleet growth for 2023 was three 1% and is expected to be only two 3% in 'twenty 'twenty. Four is owners remove tonnage that will be uneconomic due to I M. O 2023 C O two rules enforced since the beginning of this year.
Ted Petron: A combination of below-average global inventories, growth in oil demand, new longer trading routes for both crude and products, as well as one of the lowest order books in three decades, and the IMO-2023 regulations should provide for healthy tanker earnings going forward. Please turn to slide 24 for a review of the dry bulk industry. For the first eight months of 2024, rates in all sectors remained muted, as record Chinese imports were mitigated by unwinding congestion. Chinese raw material demand continued throughout 23 on the back of persistent economic stimulus and continued stockpiles.
Vessels over 20 years of age are about 10.1% of the total fleet, which compares favorably with the historically low order book.
In concluding our Drybulk sector review, continuing demand for natural resources restrictions and transient both Panama and Suez Canal War and sanction related longer haul trade combined with the slowing pace of Newbuild deliveries all support freight rates going forward.
Please turn to slide 27 for a review of the container industry.
The S. C F. I currently stand at $21 66 up some 150% over 2023 low of 887 at September 29, and 14% higher than that opened in 2024.
Ted Petron: Strong Atlantic exports of iron ore, bauxite, and grain in Q4 led both the BDI and CAPE rates to peak on December 4th at 3,346 points and $54,584, respectively. The BDI opened in 2024 at 2,093, and the year-to-date average stands at approximately 1,600, levels rarely seen in the early part of the year. In spite of the negative headlines, Chinese imports of iron ore, coal, soybeans, and bauxite in 2023 were up 16% over 2022. With regard to INR, China's GDP grew at 5.2% in Q4 of 2023. Chinese continued stimulus measures and stocking should assist INR demand, which recorded record endpoints in 2023 of 1.16 billion tons. However, coal trade continues to be impacted by the war in Ukraine as a ban on Russian coal shifts trading patterns towards longer haul routes.
Downward pressure from reduced trade and increasing deliveries for most of the 23, but Sci Fi levels back down to pre pandemic levels. However, a slight improvement in trade flow followed by rerouting of vessels away from the Red Sea and around the Cape of good hope for increased ton miles, which propelled Sci Fi levels back above the previously mentioned pre pandemic.
Level.
Put pressure for time charter rates should remain for the duration of the Red Sea disruption. However, continuing record fleet growth should eventually modify these gains and reverse course, when the middle East conflict settles.
No. The trade is expected to grow by three 8% in 'twenty, four and three 1% and 25, new billing deliveries in 'twenty four 'twenty five will be equivalent to approximately 17% of the fleet. After a record net fleet growth of 8%. This year followed by a similar level in 2025. This should continue to put pressure on rates for some time.
The graph on the lower left shows the continuing growth in U S consumer purchases of goods, which is still above pre pandemic levels in line with recently reported U S. GDP growth for 2023 imports in the U S have slowed easing port takeaway bottlenecks and port congestion, but inventories may be affected by the longer ton miles due to previously mentioned trade.
Ted Petron: Global imports are expected to increase 3% or about 19 million tons in the second half of 2024 over the first half of 2024. As with coal, the global grain trade is also impacted by the war in Ukraine, shifting trading patterns toward longer haul routes. Seaborne grain trade volume is expected to grow by 1.9% in 2024. Going forward, supply and demand fundamentals remain intact, and normally seasonally stronger in Q2, the historical low order book, continuing canal restrictions, and tightening GHG emissions regulations remain positive factors which are reflected in the period and FFA markets. Please turn to slide 25. Current order books stand at 8.5% of the fleet, one of the lowest since the mid-1990s.
Structures.
Turning to slide 28, net fleet growth was eight 2% for 2020 three and is expected to be 8% for 2024. The current order book stands at 23, 6% against 12, 3% of the fleet 20 years of age or older.
About 72% of the order book is 10000 teu vessels or larger.
Including the container sector review supply and demand fundamentals remain challenged due to economic and geopolitical uncertainties and elevated order book whoever the prospect of Chinese stimulus, increasing ton miles and the world GDP growth at three 1% for twenty-four provide a counterpoint to a challenging 20 for this.
This concludes our presentation I would now like to turn the call over to Angela Leaky for final comments. Thank you Ricky.
Thank you Dan.
For my presentation, and we open the call to questions.
At this time, if you would like to ask a question. Please press star and one on your telephone keypad.
Ted Petron: Net fleet growth for 2023 was 3.1% and is expected to be only 2.3% in 2024, as owners remove tonnage that will be uneconomic due to the IMO 2023 CO2 rules enforced since the beginning of this year. Vessels over 20 years of age are about 10.1% of the total fleet, which compares favorably with the historically low order book. In concluding our dry bulk sector review, continuing demand for natural resources, restrictions in transiting both the Panama and Suez Canals, war and sanction-related longer haul trades combined with a slowing pace of new building deliveries all support freight rates going forward. Please turn to slide 27 for a review of the container industry. The SCFI currently stands at 21.66, up some 150% over its 2023 low of 8.87 on September 29th and 14% higher than it opened in 2024. However, downward pressure from reduced trade and increasing deliveries for most of 2023 brought SCFI levels back down to pre-pandemic levels.
You may remove yourself at any time by pressing star two.
Once again, if you would like to ask a question. Please press star one at this time.
Our first question will come from Omar knockdown with Jefferies. Please go ahead.
Hey, guys. Good morning, good afternoon.
Thanks for the update.
You've got very good detail I think just on the company and the market overall.
Had a couple of follow ups and maybe just kind of big picture wanted to ask about strategy you show on slide eight the priorities in 'twenty, three which we're deleveraging and fleet renewal building the backlog and then maintaining our profitability.
Generally I would say executed on that and how do you see strategy in 'twenty or is that changed in any way relative to 'twenty three especially in the context of what's going on disruption wise black.
Black Sea and the rest of it thank.
Thank you.
Hi, good morning.
I mean, basically we have actually if we'll get paid here.
Yes.
On the strategy page eight and.
Yeah.
Our target is wrong.
Very well articulated.
To have 20, 25%.
Net LTV.
And we gave you a scorecard with Gabriel we have about 176.
And we have done that in 20 cities, even though we're showing 17 vessels.
Ted Petron: However, a slight improvement in trade flow followed by rerouting of vessels away from the Red Sea and around the Cape of Good Hope brought increased ton miles, which propelled SCFI levels back above the previously mentioned pre-pandemic levels. Upward pressure on time charter rates should remain for the duration of the Red Sea disruption. However, continuing record fleet growth should eventually modify these gains and reverse course when the Middle East conflict settles. Though the trade is expected to grow by 3.8% in 2024 and 3.1% in 2025, new building deliveries in 2024 and 2025 will be equivalent to approximately 17% of the fleet, after record net fleet growth of 8% this year followed by a similar level in 2025. This should continue to put pressure on interest rates for some time.
Keeping the average age of the same increasing.
About $1 8 billion.
Creating a that's a bit of Oh.
Almost 750 and net cash of 300 almost.
Almost 800 million.
Contracted revenue is a very important.
I lived in a strategy that gives us ability to navigate so we have about three points.
And we manage the bank.
Nothing.
38.
Sure.
Actually seeing the disruptions, which contributed to a better market and also we see economists that the top 10 economies.
Anyway.
Even with some weaknesses.
We believe that as we go.
Continuing.
Yes.
'twenty 'twenty four will have a much better understanding.
How that market before.
And that will give us a lot of options.
Thanks, Angela and I guess as you mentioned in the opening remarks did that Youre focused on and what you can control given all the uncertainty.
You know the.
Ted Petron: The graph on the lower left shows the continuing growth in U.S. consumer purchases of goods, which is still above pre-pandemic levels, in line with recently reported U.S. GDP growth for 2023. Imports into the U.S. have slowed, easing port takeaway bottlenecks and port congestion, but inventories may be affected by the longer ton miles due to previously mentioned trade disruptions. Turning to slide 28, Net Fleet growth was 8.2% for 2023 and is expected to be 8% for 2024. The current order book stands at 23.6% against 12.3% of the fleet 20 years of age or older.
Obviously, the 38% LTV, obviously much stronger than where it was a part of that is obviously incoming cash you've also had asset value appreciation.
Just studying installed 17 ships recently.
You have been taking delivery of several of the contracted new buildings, yes, more new buildings to come.
We've seen very firm prices in a sale and purchase market, we at least what it looks like particularly in Drybulk and tankers, how do you see the obvious kind of reacting in this context.
Rising values.
So options have led to higher incoming cash flow. It's also now let perhaps to rising values.
Are you expecting to sell more ships into strength and take advantage of these opportunities.
And perhaps help you delever sooner.
Ted Petron: About 72% of the order book is for 10,000 TEU vessels or larger. In concluding the Container Sector Review, supply and demand fundamentals remain challenged due to economic and geopolitical uncertainties in an elevated order book. However, the prospect of Chinese stimulus, increasing ton miles, and a world GDP growth of 3.1% for 2024 provide a counterpoint to a challenging 2024. This concludes our presentation. I would now like to turn the call over to Angeliki for her final comments.
And if that's the case any specific segment that you see an opportunity to sell into strength.
We are very decent but doesn't that then you'll have seen that over the last couple of years, we always compare.
And they seem to have a nice day.
And then Saturday when do we see.
Josh all the 15 a.
Especially I mean do you I mean that was at a historically high level.
Of course, she didn't get Capex and at the same time, we may take opportunities of fixing out of it. So this is something that we constantly with the target of the 20% to 25% net LTV. It works both ways you can create either cash flow a fab.
Operator: Thank you, Deb. This completes our formal presentation, and we open the call to questions. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself at any time by pressing star 2.
Cash flows over the period.
A five year deal.
By segment and product that was a historically high level.
So this is something that we would like.
Omar Nocta: Once again, if you would like to ask a question, please press star 1 at this time. Our first question will come from Omar Nocta with Jeffries. Please go ahead.
So think of that.
Gotcha.
And we're thinking about it and we are maximizing the opportunity.
One of the things we have to be a license at this kind of a market.
Omar Nocta: Thank you. Hey guys, good morning. Good afternoon.
We will have a strong market and shipping that is delivering some.
Angeliki N. Frangou: Thanks for the update. Very good detail, I think, just on the company and the market overall. I just had a couple of follow-ups and maybe just kind of the big picture. I wanted to ask about strategy. You show on slide 8 the priorities in 23, which were deleveraging and fleet renewal, building the backlog, and maintaining profitability. You generally, I would say, executed on that.
Absent any new efficiencies.
The Panama Canal conflicts and good economy, you don't know how much of what is actually affecting the market. That's why you see it being and.
And taking the opportunity on fixing and also keeping.
In other sector spot exposure.
Bala.
Yeah, no that makes sense and maybe a final one for me just then Ted discussed.
Angeliki N. Frangou: How do you see strategy in 24? Does that change in any way relative to 23, especially in the context of what's going on disruption-wise in the Black Sea and the Red Sea? Thank you. Good morning, Omar.
The container market and how that strengthens here recently, obviously a lot of uncertainties ahead, given the order book you do have a handful, but not a big amount that you have a handful of smaller vessels that come available for new charter has there been any shift in how liners have approached you or ship owners in general about.
Angeliki N. Frangou: I mean, basically, we have actually put a page here, I mean, on the strategy page, page 8, and this is... Our target, as we have very well articulated, is to have a 20-25% net LTV. And we gave a scorecard. We have about 176 vessels, and we have done that in 23, even though we sold 17 vessels, keeping the average age the same, increasing our revenue to about $1.3 billion, creating an adjustment of almost $750 million, and a cash of almost $300 million. Contracted revenue is a very important element in our strategy that gives us the ability to navigate. So we have about 3.3 billion, and we've managed to bring our net LTV to 38%. As we've seen, the disruptions which have contributed to a better market, and also, we've seen economies that are the top ten economies are doing pretty well. We believe that as we continue and develop within the 2024 period, we will have a much better understanding of how the market will perform, and that will give us a lot of options. Thanks, Angeliki.
Looking for vessels.
Any sort of sense, you can give on potential of duration relative to what had been available say three months ago.
If there is one sector.
He has been really.
Yeah.
Positive way in the container.
So.
Definitely we have seen.
And we have about four vessels coming open and this is a kind of an environment.
You can do a two year charter and create the contracted revenue or.
Oh this is the kind of opportunity.
Definitely.
You know the additional at all the case.
And the additional strength.
Dana has positively affected that sector, but do you think this option that you don't know when and how this will change.
Yes, definitely okay, well. Thanks, Thanks, Angelica that's it for me I'll turn it over.
Thank you.
Thank you. Our next question comes from Chris Wetherbee with Citigroup. Please go ahead.
Angeliki N. Frangou: And I guess, as you mentioned in the opening remarks, you'll focus on what you can control, given all the uncertainty. You know, obviously, the 38% LTV is obviously much stronger than where it was. Part of that is obviously incoming cash. You've also had asset value appreciation. You just said you sold 17 shifts recently.
Hey, thanks.
I guess I wanted to come back to the.
Is that targeting a leverage target that you mentioned I think 25%. So can you talk about sort of timing how do you think obviously the market is stronger now so does that accelerate the timeline at all in terms of reaching that want to get a sense of how you think.
Around that.
I think one of the issues you have this.
Angeliki N. Frangou: You have been taking delivery of several of the contracted new buildings. You have more new buildings to come. Just, you know, we've seen very firm prices in the sale and purchase market, at least that is what it looks like, particularly in dry bulk and tankers. How do you see Navios reacting in this context of rising values?
If I take it back in October.
I'll stop there and I'll stop there.
First of 2020, and Sydney, Nobody knew what really happened and wish you all a totally different market that created cash flows.
If I was coming up.
If we look at 'twenty, two and before I think this is something that.
Angeliki N. Frangou: You know, the disruptions have led to higher incoming cash flow, and it's also now led, perhaps, to rising values. Are you expecting to sell more shifts into strength and take advantage of these opportunities and perhaps help you deliver sooner? And if that's the case, any specific segments that you see an opportunity to sell into strength? Even though we are very disciplined in that, and you have seen us over the last couple of years, we always compare residual value, sale value, and charter rate. When we see, I mean, we just sold a 15-year-old VLCC with a special survey due. I mean, that was at a historically high level, and others like it.
See how we.
Because you're going to have.
Hey, you know.
These actions.
Political events.
And then you'll see the real economy.
Economists out there how they're performing they are not.
Doing badly, but you don't know how much of the issue.
If only one side of that.
That will actually give you the opportunity because you may have volumes coming up we have seen so far.
Kelly on the guidelines.
I guess coming up.
And all that.
Effect in a significant way.
We have a nice season.
A very strong Q1 that has been that we haven't seen for a long time.
Angeliki N. Frangou: So this is something that we will do constantly with the target of the 20-25% net LTV. It works both ways; you can create either cash flow up front or through cash flows over the period. We just did a five-year deal on the tanker segment on product that was at historically high levels, very historically high. So this is something that we are concentrating on, and we are maximizing the opportunity. One of the things we have to realize is that this kind of a market we are having, we have a strong market in shipping, that is driven by... Disruption and Inefficiencies, the Red Sea, the Panama Canal, Conflicts, and Good Economies. You don't know how much of what is actually affecting the market. That's why you see us being... Taking the opportunity on fixing and also keeping in other sectors spot exposure. It's a balance. Yeah, no, that makes sense.
Developing over the year can bring you very quickly in your targets.
Okay.
Okay.
We will have the opportunity to know better sorry.
No no no that's helpful. I appreciate it.
And then I guess, yes.
What do you think about the disruptions on the container side, whether it be read your Panama Canal I guess I guess two questions for you.
Okay.
Maybe more operational so bear with me I guess are you seeing anything correct.
Demand standpoint, transferring more to the U S West coast over U S East Coast, and then I think.
I guess generally speaking are you seeing liner companies change.
The weighted fully vessels to account for this are striking is getting longer more vessels being early twenties shrink I don't know how transparent that is to you as a vessel owner, but any comments you have there would be helpful. In terms of how the operations are changing as a result of what's going on with the Ritchie.
Angeliki N. Frangou: And maybe a final one for me, Justin. Ted discussed the container market and how that's strengthened here recently. Obviously, a lot of uncertainties ahead given the order book. You do have a handful, not a big amount, but you have a handful of smaller vessels that are coming available for new charter. Has there been any shift in how liners have approached you or ship owners in general about looking for vessels in any sort of sense you can give on potential duration relative to what had been available, say, three months ago? If there is one sector that the Red Sea has affected in a very positive way, it has been containment. So, I mean, definitely, we have seen that.
We had some very interesting conversation.
Some of their lineup that will give you in the in depth.
Victor.
Hey, Matt.
Affected by both event.
Hey, Chris I would say.
Sector Thats affected the most at 34% of.
Container seem to go through that area of 20% of the vessels you have had a lot of switching over to the west coast they've been.
So as you said have been moving there.
There are shifts around so obviously, if you look at them.
The Sci Fi going from the far east into the West Coast has tripled since November so theres a lot of movement around the cargo. So a lot of inefficiencies maybe it settles down maybe we've seen the high but theres going to be continued upward pressure well. This major sector gets eliminated right.
Angeliki N. Frangou: We have about four vessels that are coming open, and this is the kind of environment where we'll judge where you can do a two-year charter and create a contracted revenue or sale. This is the kind of opportunity that you will be looking for. Definitely, you know, the additional routes around the Cape and additional strings of containers that you need have positively affected that.
You're just moving thinking you're moving routes around and now they've got to figure out what chips are going to go where it's changing the landscape.
And it looks to be with us for a while.
Do you have a sense of what you think the actual capacity reduction is from sort of a variety of disruption going on in the market.
Chris Wetherbee: But it's a disruption that you don't know when or how this will change. Thank you. Our next question comes from Chris Wetherbee with Citigroup. Please go ahead, accelerate the timeline at all in terms of reaching that one to get it set. I think one of the issues, I'll say, you have this... These are options that if I take you back on October 1st of 2023, nobody knows what will happen. And we saw a totally different market that created cash flows and values coming up. And then you will see the real, the economies of how they are performing, which they are not generally doing badly, but you don't know how much of the wind is from the one side or the other. And that will actually give you the opportunity because you may have values coming up.
Well if you have if you have.
Think about if you have 34% of the containers going through and 20% of the vessels. So you're having the bigger vessels going that way. So it's a bigger disruptions of Europe, there's probably more inflationary. So it's sort of the mainline shifts that are going to have to be diverted the mainline chips can't come to the states, but you have to fill in with the smaller ships and so that's affecting the U S with the 14 to 16000.
Okay.
Okay.
I think that you can see.
Uh huh.
That is absolutely that's going to have over 10% online.
Overall, the world I'm, just going to Europe, it's a good 33% more on the round so that you know.
Thank you for that.
Okay, well thanks, so much for the time I appreciate it.
Angeliki N. Frangou: We have seen values coming on the dry bulk, on tankers coming up. You don't know how that will affect us in a significant way. We have a very strong Q1 that hasn't been seen for a long time. This development over the year can bring you very quickly to your target. We will have, in the second half, we will have the opportunity to know better.
Thank you.
Thank you at this time I would like to turn the call back to Angela key for any closing remarks.
Thank you this completes our call today.
Thank you.
And this does conclude today's call. We thank you for your participation you may disconnect at anytime.
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Angeliki N. Frangou: Sorry. Okay, no, that's helpful. I appreciate it. And then I guess, yeah, I mean... and maybe more operational, so bear with me, I guess. Are you seeing anything from a demand standpoint transferring more to the U.S. West Coast? And, I guess, generally speaking, are you seeing liner companies change?
Yes.
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Ted Petron: and the way they deploy that. www.kenhub.com I'm not a vessel owner, but any comments you have there would be helpful in terms of how the operation. We've had some very interesting conversations with some of the liners, but Ted will give you more in depth. I think this is a sector that is very, very much in demand. Thank you, Chris. I would say it's the sector that's affected the most, that 34% of... to go through that area, 20% of the vessel. Associations have been moving their, The SEFI going from the Far East into the West Coast, changing thinking and moving routes around, and now they've got to figure out which ships are going to go where.
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No.
Yeah.
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Ted Petron: It's changing the landscape, and it looks to be with us for a while. Do you have a sense of what the actual capacity reduction is from the variety of disruptions going on in the market? Having a ton of miles of rail, I think that you can see that you can build... You know, there was added afterwards that you can have over 10% on the mile effect.
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Ted Petron: Overall, the world, I'm just going to Europe, it's a good 33% more. Yeah. Fantastic. Well, thanks so much for your time. I appreciate it. Thank you. Thank you. At this time, I would like to turn the call back to Angeliki for any closing remarks.
Uh huh.
Okay.
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Angeliki N. Frangou: Thank you. This completes our quarterly... Thank you. Thank you. This does conclude today's call. We thank you for your participation. You may disconnect at any time.
Okay.
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