Q4 2023 Euroseas Ltd Earnings Call
Operator: www.thevenusproject.com Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas conference call on the fourth quarter 2023 financial results. We have with us Mr. Aristides Pidas, Chairman and Chief Executive Officer, and Mr. Tasos Aslitis, Chief Financial Officer of Euroseas. At this time, all participants are in a listen-only mode.
Yeah.
[music].
Thank you for standing by ladies and gentlemen, and welcome to the Euro six conference call on the fourth quarter 2023 financial results, we have with US Mr. Aristides, <unk>, Chairman and Chief Executive Officer, and Mr. Tussles athlete as Chief Financial Officer of the company at.
At this time all participants are in a listen only mode.
Operator: There will be a presentation followed by a question and answer session. At which time, if you wish to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today. Please be reminded that the company announced its results in a press release that has been publicly distributed. Before passing the floor to Mr. Peters, I would like to remind everyone that in today's presentation and conference call, Euroseas will be making forward-looking statements that are within the meaning of the federal securities laws.
It would be a presentation, followed by question and answer session.
At which time if you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced I must advise you that this conference is being recorded today. Please be reminded that the company announced their results with a press release that has been publicly distributed.
Before passing the floor to Mr. Peter I would like to remind everyone that in todays presentation and conference call, you'll see well be making forward looking statements. These statements are within the meaning of the federal Securities laws matters discussed may be forward looking statements, which are based on current management expectations that involve risks and uncertainties.
Operator: The matters discussed may be forward-looking statements, which are based on current management expectations that involve risk and uncertainties that may result in such expectations not being realized. I kindly draw your attention to slide number two of the webcast presentation, which includes the full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. Now, I would like to pass the floor to Mr. Peters. Please go ahead, sir.
It may result in such expectations not being realized.
Kindly draw your attention to slide number two of the webcast presentation, which has the full forward looking statement.
At the same statement was also included in the press release, please take a moment to go through the whole statement and read it.
And now I would like to pass the floor to Mr. Peter <unk>. Please go ahead Sir.
Mr. Peters: Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Tata Saslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the three-and-twelve-month period ended December 31, 2020. Please turn to slide 3 of the presentation to go over our financial results. You have had another strong quarter, having reported total net revenues of $49.1 million and a net income of $24.7 million, or $3.56 per cent per basic and diluted shares for the fourth quarter of 2025. Adopted net income for the quarter was $25 million, or $3.61 per diluted share. Adjusted EBITDA for the period was $32.4 million.
Good morning, ladies and gentlemen, and thank you all for joining us today for our schedule is called for in school.
Together with me and stocks, especially the Chief Financial Officer.
The purpose of today's call is to discuss our financial results for the three.
In the 12 month period ended December 31st.
Yeah.
Let us turn to slide three of the present.
Patients to go over there quite nicely that he does.
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Revenues were $49 $1 million and the net income was $24 $7 million or $3.56 per basic.
Basic and diluted.
The basic and diluted shares for the fourth quarter of 2010.
Adjusted net income for the quota that was 25 million or $3 $61 per diluted share.
Adjusted EBITDA for the period to a $32 4 million.
Mr. Peters: Please refer to the press release for a full reconciliation of adjusted net income and adjusted EBITDA to net income. Our CFO, Tasos Oslidis, will go over our financial highlights in more detail later on in the presentation. We are very pleased to announce that our Board of Directors has declared a quarterly dividend of $0.60 per common share for the fourth quarter of 2023, reflecting a 20% increase from the prior quarterly dividend of $0.50 per share. The dividend, which is payable on or about March 11, 2024, to shareholders of record on March 4, 2024, reinforces our durable growth business model, which is supported by strong cash generation and financial strength, and further demonstrates our commitment to delivering shareholder The annualized dividend yield, based on the current share price, is about 7%.
Please refer to the press release for a full reconciliation of adjusted net income and adjusted EBITDA to net income.
Our CFO.
Maybe if you could go all go to the financial highlights from the movies days Nate that all into consideration.
We are very pleased to announce that our board of directors have declared a quarterly dividend of 60 cents per common share for the fourth quarter of 'twenty 'twenty City.
Next thing a 20% increase from the prior quarterly dividend of 50 cents per share.
The dividend, which is payable and move about March 11, 2024 to shareholders of record of the lots for 'twenty 'twenty four and eight.
Just want to.
Good old business model, which is supported by strong cash generation and financial scale and further demonstrates our commitment to delivering samples different classes.
The annualized dividend to you based on the guidance said it right, it's about 7% base.
Mr. Peters: This is the eighth consecutive quarter of paying meaningful dividends. As of February 21, 2024, we had repurchased 400,000 shares in the open market for a total of about $8.2 million under our share repurchase plan of up to $20 million, announced in May 2022 and extended for another year. Thus, about 5.5% of our outstanding sales have been repurchased and withdrawn.
This is the eighth consecutive quarter of paying meaningful dividends.
As of February 'twenty, one 'twenty 'twenty four we kept them that's just 400000 shares.
In the open market for a total of about $8.2 million.
I've sat expenses plan of up to $20 million announced in May 2022, and extended for another year.
That's about five 5% of that outstanding sales have been the fastest in Victoria.
Mr. Peters: We will continue to use our share repurchase program at management's discretion, depending on our stock price, to enhance our ability to drive long-term shareholder value. Please turn to slide 4, where we discuss our recent sale and purchase rather than an operational development. The delivery of our third vessel from our nine-vessel new building program took place on February 6. Motor Vessel Tender Seoul is an ECO-EDI Phase III vessel, 2,800 TEU feet of container ship new building from Hyundai Mipodokya in South Korea. The vessel is equipped with a TSV engine and other sustainability-linked features, including the installation of an AMP, an Alternative Maritime Power System.
We will continue to use a sad, but that's just kind of look at management's discretion, depending on stock price.
So that ability.
To drive long term shareholder value.
Please turn to slide four where I will discuss our recent standby purchase activity that you've had before.
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They literally have a third version for about nine vessels.
Well get them took place on February six.
Most of the vessels dental show is a Nashville E D I face to be back to 2000, and 850, you feed that container ship new building.
And die and we put it all kicked in South Korea.
The vessel is equipped with a tier three energy and other sustainability linked features including installation of an a and b and that they're looking for maritime power system.
Mr. Peters: The vessel is financed through retained earnings and a sale and leaseback agreement with the Japanese owner and leasing house. Following its delivery, the Motobesky Tender Soul commenced an 8-10 month charter at a rate of $17,000 a day. On the chartering side, MotoVessel Aegean Express, our eldest and smallest vessel, was fixed for a minimum period of 10 to maximum 15 days at $7,000 per day, then extended with the same charterers for one to two months at the same level of $7,000 per day, and thereafter fixed again for a minimum of 35 to maximum 55 days, again at $7,000 per day. Motor Vessel Synergy Answer The charter was extended for approximately 40 to 60 days at $18,250 per day until February 2024, and subsequently fixed at a nominal $2 per day for a trip with empty containers to the shipyard to have a scheduled dry dock performed.
The vessel is financed through will get done.
It's day to day, the news and the sale and leaseback agreement with the New zone live in at least in house.
Following the leaves of it most of the vessels that were sold and commenced an eight to 10 months faster at a rate of $17000 a day.
On the chartering side.
Motor vessel Aegean Express I would imagine just the smallest vessels with <unk>.
Fixed for a minimum period of time to maximum of 15 days at $7000. A day and then extended with the same size that is for one to two months at the same level of $7000 a day and there are still a fixed again for many more months 35, some excellent 55 days again et cetera.
Good day.
Most of the vessels seamless that is good.
So I felt it was extended for approximately.
40 to 60 days at $18250 per day in February of 'twenty 'twenty four and subsequently finished the nominal $2 a day.
Empty containers for the shipyard to have cars scheduled dry docks before.
Mr. Peters: The other vessel that we fixed during the quarter was Moter Vs. Johanna, whose charter was extended for a minimum between 25th April and maximum 25th May at $10,250 per day. Regarding dry dockings, motor vessel Synergy Busan underwent its scheduled special survey for approximately 25 days in the month of December. During this period, retrofits valued at around $1.6 million were conducted.
The other vessels that we fixed during the quarter was most of the vessels Joanna who Samsung was extended for many moving between if you're facing some extra incentive fees for me, it's 10000 to have them at $50 per day.
Regarding dry dockings for motor vessel, she never dreamed of Sun and the vantage scheduled special survey for approximately 25 days in the month of December.
During this period it has a face value.
One 6 million will come back.
Mr. Peters: They were partially funded by the Charter. This resulted in a performance improvement of over 25% for the vessel. Meanwhile, Motor Vessel Synergy Oakland was also dry docked for approximately 18.5 days, about scheduled special surveys. There was no commercial or items of higher time during the course.
They were partially funded by the charter schools.
This resulted in a performance improvement.
Over 25% for the vessel.
Meanwhile, motor vessel. She made a joke Linda was also dry docks of approximately 18 and a half days to pass its.
Scheduled special survey.
There was no commercial off.
High uptime during the quarter.
Mr. Peters: Next, please turn to slide 5 for an update on our current lead profile. Our current fleet is comprised of 20 vessels in the water, including 13 feeder container ships and 7 intermediate container carriers, with a total carrying capacity of just under 61,700 feet and an average age of 16.1 years. Turn to slide 6, where we show our 6 remaining vessels under construction, with deliveries expected throughout 2024. The six new buildings have a total carrying capacity of 13,800 TEU, including three with a carrying capacity of 2,800 TEU each and three with a carrying capacity of 1,800 TEU.
Next please turn to slide five for an update on the carbon fleet profile.
Our current fleet is comprised of 20 vessels in the water, including 17 feeder container ships and seven intermediate containment Guy who lives with a total carrying capacity of just out of the 61007 trying to compete.
And then I've ever its age of 16 for inviting us.
Turning to slide six where we show our six remaining vessels under construction with deliveries expected throughout 2024.
The six new buildings have a total carrying capacity of 13800 teu, including three with a carrying capacity of 2000 and they tend to be you each I'm sorry, with the Caribbean capacity about 1800 EZ reach.
Mr. Peters: On a fully delivered basis, the company's fleet will increase to 26 vessels with a total cargo capacity in excess of 75,000. Let's now turn to slide 7 for the Vessel Employment Update. As you can see, we have very strong charter covers throughout the next two years, with about 71% of our fleet being fixed for 2024 and almost 23% for 2025. A significant charter coverage at profitable rates for the remainder of the year suggests highly profitable quarters that will further enhance our fluid liquidity throughout 2024 into 2025. Due to disruptions in trade patterns caused by the attacks on vessels in the Red Sea, charter rates have increased from their low levels in December 2020. Certain of our vessels whose charters expired during this time have benefited from these disruptions, and we anticipate our vessels opening up soon, as well as our upcoming new buildings, will likely benefit from the same trend. Let's turn to slide 9 to review how the 6-12 month time-shortening rates have developed over the last 10 years. During the fourth quarter of 2023, container supermarkets were down across all segments.
On a fully diluted basis, the company's fleet will increase to 26 vessels with a total cargo capacity in excess of 75000 feet.
Let's now turn to slide seven for the vessel employment upbeat.
As you May see we kept very strong charter coverage go out the next two years with about 71% of our fleet being fixed for 'twenty 'twenty, four and almost 23% for drinks 25.
I have significant chocolate God forbid profitable rate for the remainder of the year. So that's highly profitable quarters, just confirmed it in house or liquidity cause loud stretchy fanciful into 'twenty French Fry.
Due to disruptions in trade patterns caused by the attacks some vessels in the Red Sea charter rates have increased from their low leverage in December transparency.
Certain of our vessels, whose chocolate has expired doing besides having benefited from these disruptions and we anticipate our vessels opening up soon.
Well as our upcoming new buildings will likely benefit from the same Savannah.
Let's turn to slide nine.
Do you count this is driving most of the time charter rates have developed over the last 10 years.
During the fourth quarter of 2023 container shipping markets were down across all segments.
Mr. Peters: But the trend has reversed since December, primarily due to the disruptions in the Red Sea, as vessels have withdrawn from the river. For the sectors we are primarily operating in, charter rates are about 30-35% higher in February from the low seen at the end of 2020. As of February 16, the 6 to 12-month charter rate for the 2,500 TEU containers stood at $15,500 per day, which is higher than the historical median of $9,200 per day but at similar levels to the 10-year average rate of $15,386 per day. The trends and comparisons to median and average rates are similar across the sizes of 17,000 to 4,400 TEU vessels.
The trend because of your first sales in December okay.
They really do to describe certain davinci asbestos that'd be limited from the visa.
For the sectors, primarily primarily operating charter rates at about 50% to 55% higher in February from the low seen that's yet to a different city.
As of February 16, the fix to dreadful charter age for three to 5000 Teu container ships.
The $15500 a day, approximately which is higher than the historical medium overnight thousands to kind of put a day, but at similar levels to the rebate and survey of 15000 tons, a day and $86 per day.
The trends in comparison to media and the leverage of eight assuming 11 across the sizes of 17002 fucking 400 Teu vessels.
Mr. Peters: Moving on to slide 10, we go over some further market highlights. During the fourth quarter of 2023, as mentioned, rates were down across all sectors. The current increase is mainly attributed to the Red Sea crisis, which is still ongoing, and its full impact is yet to be seen. It is quite clear, however, that these events will shape the way charter rates develop, at least in the near future. Average rates per day during the fourth quarter of 2023 decreased by 21% compared to the third quarter of 2023. The average second-hand price index saw a decrease of around 7.7% during Q4 2023 compared to Q3 2023.
Moving on to Slide 10, we go work with several chosen market highlights.
During the fourth quarter of 2023 as I mentioned the rates were down in the commercial segments.
The Guy who can give you.
Do you attribute it to the Red Sea crisis, which is still evolving.
And it's fully impact is yet to be seen.
It's quite clear however that these events will shape the way charter rates develop at least in the near future.
I've met with the rates per day during the fourth quarter of 'twenty fee decreased by 21% compared to the first to go through that.
Yeah.
The average secondhand pricing in VIX, so a big piece of it at seven 7% during the fourth quarter of 2020 to be comparable to the set up to go to a certain sense to me.
Mr. Peters: But we have already seen a reversal of this trend during January and February. While prices continue to lag significantly behind the peak levels seen in 2022, they are above the average levels observed before the COVID-19 pandemic. The new building price index maintained stability in the fourth quarter of 2023 compared to the third quarter. However, new building prices continue to stay elevated due to cost inflation and extended yard load.
But if you have already seen a reversal of these trends during January and February.
Right now, it's just continued to lag significantly behind the peak levels seen in 2022.
The average levels observed before the COVID-19 seven daily.
The new raising pricing to maintain stability in the fourth Gulf coast, 'twenty 'twenty compared to the third quarter.
New building prices continue to stay elevated due to cost inflation and extensive gotta bogus.
Mr. Peters: Although there has been some easing in new-build contracting from the exceptionally firm levels witnessed during 2022, it remains relatively strong, driven by ongoing interest from financially robust lines of companies seeking to renew their fleets with apparently few investments. As of January 29, 2024, the idle fleet, excluding vessels under repair, stands at 0.23 million DEU, accounting for 0.8% of the total. This marks a decline from its peak of 0.8 million TEU just one year ago, with a downward trend observed by the observer himself.
Although there has been some amazing new contracting from the exception of any firm levels. Mr June 'twenty through 'twenty two.
It remains relatively strong.
Given by ongoing interest from financially robust line of companies seeking to renew the police we did better if your investees.
Yeah.
As of January 29, 2024.
Police excluding vessels under the bed stand at two point to 3 million Teu.
Accounting for 8% of adult athlete.
Most of the decline for me to speak of point 8 million Teu.
Just one year ago.
The downward trend observed instead.
Mr. Peters: In 2023, 83 vessels totaling 160,000 TEU were scrapped. Because of historically healthy charter rates, demolition activity remained moderate compared to historical standards in 2020. However, it is anticipated to notably increase in the coming years due to factors such as weaker markets, supply growth, and environmental regulations adding pressure. In the fourth quarter of 2023, scrapping prices softened slightly to approximately $535 per lightweight ton, although they remained about 30% higher than the average observed in 2019. Finally, the fleet expanded by a strong 8.1% in 2023 without accounting for idle vessel reactivation. Please now turn to slide 11.
And drastic 23, 83 vessels totaling 560000 Teu approximately with Scott.
Because starting from Mackenzie childs debates demolition activity remained moderate compared to historical standards of transparency.
However, if you send dissipated to North Africa, the increase in the coming years due to factors such as weaker markets supply grow and then it's like a man.
Relations I think Felicia.
In the fourth quarter of 'twenty 'twenty to be scrapping prices softened slightly.
Absolutely 500 or $55 per lightweight ton, although there remains about 30% higher than the average observed in 2019.
Finally.
The police expanded by a strong eight 1% in 2020 to be without the accounting for that in the best way to execute base.
Please note that on slide 11.
Mr. Peters: With its latest uptake in January 2024, the IMF raised its forecast for global growth compared to the October 2023 outlook, from 2.9% to 3.1% for 2024 and from 3.1% to 3.2% for 2025, as a result of greater-than-expected resilience in the United States and fiscal support in China. We expect to see this recovery, although the IMF also warns of risks from wars and inflation. Risks surrounding COVID-19 have declined in much of the world.
With its latest uptake in January 'twenty 'twenty four V. I a M. Best surveys fall Festival global gold compared to the October 'twenty to 'twenty three outlook from two 9% to 341 per cent for 'twenty three before.
Three one to three 2% for 2020 five.
There's also greater than expected the resilience in the United States and fiscal support in China.
We expect to see this recovery, although V. I a M. Best also water risks from was inflation.
And he said I don't think COVID-19, however decline in much of the world.
Mr. Peters: The forecast for 2024 and 2025 is, however, still below the historical average of 3.8%, as elevated central bank policy rates to fight inflation and the withdrawal of fiscal support amid high debt weigh on economic activity. Low underlying productivity growth also accelerates this slow trend. As per the analysts, global growth is likely to recover from 2025 onwards, supported by the unwinding of supply-side issues and interest rate cuts starting in 2021. Global inflation is forecast by the IMF to decline steadily starting from 2024, due to tighter monetary policy aided by lower international commodity prices, and is expected to fall to 5.8% in 2024 and 4.4% in 2025, with the 2025 forecast having been revised down. However, new commodity price hikes from geopolitical shocks, including continued attacks in the Red Sea and supply disruptions, or new persistent and delaying inflation, could perhaps prolong tight monetary conditions.
The forecast for 2021 'twenty 'twenty five is however, still below the historical evidence of people who paid for Syn <unk>.
As the elevator Central Bank policy of Ace to fight inflation, and then withdraw in the Frisco support to the meat side that weigh on economic uneconomic activity.
Hello underlying productivity goals also exchange rates dislocated.
I spend at the other elite global growth is likely to recover from 10 to 25 fundamentals supported by the unwinding of supply side issues and the interest rate cuts that thing.
Paul.
Global inflation is focus by the IMF to decline steadily stocking for 'twenty 'twenty for.
Due to tightened money doesn't bother me see aided by lower international commodity prices.
And he is expected to fall to five 8% from 2024, and four 4% and 25.
2025.
Hi, Dara.
However, new commodity price spikes from geopolitical shocks, including continued that actually the red sea and supply disruptions.
Ms assistant underlying inflation.
Perhaps we lost all of that along with other countries.
Mr. Peters: China's growth forecast of 5.2% in 2024 and 4.6% in 2025 has been revised upwards even after having had major headwinds due to lower confidence and an underwhelming boost to economic activity following its reopening and persistent public dissent. Similarly, growth in other emerging and developing countries, including India and the Middle East, is projected to continue quite strongly for the next couple of years. India's growth is expected to be 6.5% in both 2024 and 2025. Container ship trade demand was forecast to increase quite significantly in 2024 by collapses in the January report, as tonne-mile demand will be affected by disruptions in the Red Sea and restrictions on the Suez Canal and Panama Canal, as well as the slower speeds necessitated by the IMO environmental rules and the introduction of the EU ETS.
So I am just good old forecast of five 2% in 2024, and four 6% and 2025 has been revised upwards, even after having had some major headwinds due to Lubbock unconvinced Underwood, whose economic activity following its reopening in fish.
Houston public sector.
Similarly grow looking another Muslim developing countries, including India and D is there upside you should go exactly to continue quite strongly for the next couple of years.
India's coal is expected to be six and the prospects and involves visiting fourth and fifth site.
Containership Crazy Mountain was forecast to increase quite significantly 2020 foot by collapses. Instead of January before I started my demand is going to be affected by the sharp something that I can see them because it makes sense for them to switch can imagine pandemic on us as well as a slower speeds and associate in the face.
David D. I am always like a medical schools and the introduction of B E.
Mr. Peters: We anticipate that Clarkson's apparent demand estimate will further rise in February as the effects of the Red Sea near closure are appearing more severe than originally assumed. Please turn to slide 12, where you can see the total Fleet H profile and container support. The container ship fleet is relatively young, with most vessels under 15 years old, and only 10% of the fleet over 20 years, the largest percentage of which, though, lies within the feed the vessel, suggesting high potential for recycling for this type of... As of February 2024, the order book as a percentage of total fleet stands at 23.9%, down from nearly 30% six months ago. Turning on to slide 13, we also go over the Fleet Age Profile for the..., for These sizes of vessels are the backbone of our operations and the primary focus of our new building program.
Yes.
We anticipate the Clarksons if I haven't demand estimate will further rise in February as the effects of the Red Sea near closure.
Most of the year than originally issue.
Please turn to slide 12, where you can see the total fleet age profile and container ship out before.
The containership fleet is relatively young with most vessels under 15 years old and only 10% of the fleet over 20 years old.
The largest percentage of which though lies within the feed the vessels.
Resting hypotension that effective recycling for this type of shoes.
As of February 2024, the author of the book as a percentage of the fleet status.
Four 9%.
Down from nearly 30% six months ago.
Turning on to Slide 15, we all should go what would the fleet age profile.
Four ships in the 1000 to 3000 Teu days.
Sizes of vessels are the backbone of our operations and the primary focus of our new building program.
Mr. Peters: The order book here stands at 8.9% as of February 2024, half the rate a year ago. According to Clarkson's, new deliveries are projected at an estimated 8% in 2024 and a very modest 1.9% in 2025. Furthermore, with over 50% of the fleet aged over 15 years, these are very favorable fundamentals for this sector. New environmental regulations suggesting lower speeds and increased recycling in the segment in the coming years will accentuate the positivity of the thesis in favor of lessons of the sizes we offer.
The order book here stands at 849% as of February 2024 half of eight a year ago.
According to Clarksons, new deliveries are projected that an estimated 8% in 2024.
And the very modest one 9% in 2025.
Furthermore, with over 50% of the fleet age the over 16 years.
These are really favorable fundamentals for these sick.
New environmental regulations, suggesting lowest speed and then could Easton cycling in the segment in the coming years augment the positivity of the thesis in favor of vessels of the sizes we operate.
Mr. Peters: Let's move to Slide 14, where we discuss our Outlook Summary for the Container Ship Mark. Container shipping faces pressure due to the influx of new capacity into the fleet, especially during this year, where deliveries are expected to amount to about 11% of the fleet measured in TEA.
Let's move to slide 14, where we discuss our outlook summary for the containership market.
Container shipping faces pressures due to the influx of new capacity into the fleet, especially during this year, where they live their lives are expected to amount to about 11% of the fleet measured in Teu.
Mr. Peters: However, recent events, primarily in the Red Sea, but also the Panama Canal and the implementation of the EU ETS, have led to a doubling of shipping freight rates and reversing the drop in share prices. The Context Index has surged by 33% since December 21, 2020. In 2024, significant challenges are initially expected. However, the balancing of supply and demand by the situations in the Suez Canal and the Panama Canal is casting doubts on this unfavorable scenario.
However, recent events, primarily in the Red Sea, but also the Panama Canal and they implement they shouldn't have the EU ETS have led to a doubling of shipping freight rates and reversing the dog and Stockbridge.
The context index has served by 33% since December 21st with it to see.
In 'twenty 'twenty four significant challenges initially expected however.
However, the balancing of supply and demand situations in the Suez Canal or at sea and the Panama Canal are casting doubt on decent favorable scenario.
Mr. Peters: Following recent vessel attacks in the Red Sea and the Gulf of Aden, major container ship operators have announced a pause in transits through the area. This rerouting via the Cape of Good Hope impacts capacity supply and demand very positively. If the situations in the Panama Canal and the Red Sea are resolved, a further softening in container freight and charter markets is anticipated, driven by the accelerated capacity growth. However, an extended period of vessel rerouting away from the Suez Canal would probably lead to further increased charters.
Following a recent vessel attacks in the Red Sea and the Gulf of Aden Major containership operators have allowed us to pause in France exclude the area. This rebooting via the Cape of good hope impacts capacity supply and demand very closely.
These are the situations with the Panama Canal and the Red She had resolved a further softening in container weights in softer markets. These anticipated driven by the accelerated capacity to grow.
Over an extended period the vessel rerouting away from distressed cannot would probably lead to further increase in charter rates.
Mr. Peters: In 2025, in the absence of the Suez Canal, the Red Sea, and the Panama Canals... Supply and demand dynamics suggest a continued softening of the market. However, market conditions are very difficult to predict, and sensitivity to factors such as geopolitical developments, capacity management, vessel speed, and various other inefficiencies like congestion is crucial, and it can't be easily faulted. If, however, normalization occurs, and both the Suez and the Panama Canals operate efficiently, the softening in 2025 could be significant due to the substantial fleet expansion. The transition towards cleaner energy sources is gaining momentum in the container subsector.
In 2025, and the absence of this risk a lot of the bid season, Panama Canal leashes supply and demand dynamics suggest the continued softening of the market.
Market conditions are very difficult to predict sensitivity to factors such as geopolitical developments capacity management vessel speed.
I wish I'd done any efficiencies like congestion and pollution and it can be easily focus.
If I remember my Lavation look good in both the swelling the Panama can now drop away sufficiently the Salford in England 25 could be significant use of its extensive lease expires.
We transitioned towards cleaner energy sources is gaining momentum in the containership sector.
Mr. Peters: While there is a clear shift underway, the long-term outcome remains highly uncertain. The gap between charter rates achieved by eco-friendly vessels is expected to widen further as charterers increasingly prioritize environmentally friendly transportation options. Moving on to slide 15, the left chart shows the evolution of the one-year time charter rate for containers with a capacity of two-and-a-half thousand TEU since 2013, while one-year time shutter rates are far below their peak in early 2020. But, as previously mentioned, they have recovered to 15,500 per day, which is similar to the historical average and higher than the historical median. The right-hand chart shows the historical range for new buildings and 10-year-old second-hand container ships with a capacity of 2,500 each.
Right. If there is a clear shift out of the way the long term a company remains highly uncertain.
The gap between charter rates achieved by equity currently vessel is expected to widen further chocolate is increasingly prioritize doing better maintain family of transportation options.
Moving on to slide 15.
The left chart shows the evolution of one year time charter rate for containers or the capacity of two and a half thousand Teu since 2015.
One year time charter rates are far below their peak in early 2022 because previously mentioned heavily governance in 15, and a half thousand per day, which is similar to the historical average and higher than the historical median.
The right hand chart shows that historical range for new buildings, and 10 year old second hand container ships with a capacity of two and a half thousand Teu.
Mr. Peters: Values are rebounding from their end-of-year prices and remain stubbornly high compared to both historical average and median levels. At these price levels, we are reluctant to pursue further acquisitions unless they can be combined with charters that will reduce residual values at their expiration to levels below historical means. We feel very well protected against market volatility, with a high concentrated revenue, contracted revenue coverage throughout 2024 and 2025, having already covered 70% and 25% of our operating days, respectively, at very healthy rates. Our strong balance sheet will allow us to take delivery of the remainder of the container ship new buildings, while keeping leverage low at around 60%. It will also allow us to now pay an increased dividend and execute on our stock repurchase program to continue rewarding our shareholders. Even after these actions, our liquidity will have further increased. And with that, I will pass the floor to Tassos. Thank you very much, Aristidis. Good morning from me as well, ladies and gentlemen.
Ryan Who's a rebounding from that end of the year prices and they remain stubbornly high compares to book your stomach a lot better than median levels.
At these price levels, we are reluctant to pursue further acquisitions unless they can be combined with charters to reduce residual values etcetera exploration to levels below historical median.
We feel very well protected against market volatility with a high concentrated revenue contracted revenue covers glass 'twenty 'twenty four 'twenty 25, having really radical 7% and 25% or above operating days, respectively, that's very kind of fee rates.
Our strong balance sheet will allow us to take delivery of the remainder of the containership buildings, while keeping leverage low at around 60%.
It will also allow us to now pay an increased dividend and executing our stock repurchase program to continue rewarding our shareholders.
Even after these actions our liquidity would have further activities.
We therefore continue to evaluate investment opportunities rates may incrementally get reset of avenues and get out to potentially.
And with that I would pass the floor to cashless release.
Thank you very much I think Dennis good morning from me as well, ladies and gentlemen.
Tasos: Over the next four slides, as usual, I will give you an overview of our financial highlights for the fourth quarter and full year of 2023 and compare those to the same periods of last year. For that, let's turn to slides event. For the fourth quarter of 2023, the company reported total net revenues of $49.7 million, representing a 15.8% increase over total net revenues of $42.9 million during the fourth quarter of 2022, and that was mainly a result of the increased average number of vessels we operated in the fourth quarter of 2023 compared to the corresponding period of the year before. The company reported a net income for the period. 25.3 million as compared to a net income of 20.3 million for the fourth quarter of 2020.
Over the next four slides.
I wouldn't give you an overview of our financial highlights for the fourth quarter and full year of 'twenty plan between when compare those to the same period last year.
So with that let's turn to slide 17.
For the fourth quarter of 2023, the company reported total net revenues of $49 7 million, representing 16, 8% increase over total net revenues of $42 9 million during the fourth quarter of 2022.
And that was mainly result of the increased.
Number of vessels we operated.
Fourth quarter 2023, compared to the corresponding period.
Before.
The company reported a net income for the period.
$25 3 million as compared to a net income of 23 million.
For the fourth quarter.
Sure.
Tasos: Interest and other financing costs for the fourth quarter of 2023 amounted to $2.8 million before detecting capitalized interest income of $0.3 million earned from the self-financing of the pre-delivery payments for our new building program for a total net interest and financing costs of $2.5 million for the period compared to $1.6 million in the same period of 2022 after deducting capitalized intruded interest income for that period of $0.4 million. This increase in our interest expenses is due to the increased amount of debt we carry and the increased weighted average rate, the SOFR rate, that our bank loans paid in the most recent period compared to the period of the previous year.
Interest and other financing costs for the fourth quarter of plant turnkey suite.
Mountain Dew point.
8 million before the packing capitalize interest income.
3 million.
Some of the self financing.
But can you give any payments or even building program.
Total net interest and financing costs of $2 5 million.
<unk>.
Compared to $1 6 million in the same.
In 2020.
Cool.
After.
Ducting capitalizing interest income.
Going for me.
This increase in cash.
Due to the increased amount of debt that we carry.
On occasion the weighted.
I'll bet Seth are suffering with our bank loans made in the most recent period compared to the previous.
Yeah.
Tasos: Adjusted EBITDA for the fourth quarter of 2023 increased to $33 million compared to $22.9 million for the corresponding period in the fourth quarter of 2022. Basic and diluted earnings per share for the fourth quarter of 2023 were $3.58 and $3.56, respectively, calculated on about 6.9 million basic and diluted weighted average number of shares outstanding, as compared to basic and diluted earnings per share of $2.87 and $2.86, respectively, for the fourth quarter of 2022. Excluding the effect on the net income for the quarter of the Unrealized Lotion Derivative.
I'm just it can be done with it.
Fourth quarter of 2023.
They used to.
3 million compared to $22 9 million for the corresponding period, the fourth quarter of 2022.
Basic and diluted earnings per share for the fourth quarter of <unk> were $6 58.
$3.56 respectively.
Let it on about $6 9 million basic and diluted weighted average number of shares outstanding.
As compared to basic and diluted earnings per share of $2 87 and $2.
86 cents respectively.
Fourth quarter was 2022.
Excluding the effect on the net income.
For the quarter.
The unrealized loss on derivatives.
Tasos: The Amortization of Fair Value of Below-Marked Time Charters Acquired and the Vessel Depreciation on the Portion of the Consideration of Vessels Acquired with Attached Time Charters allocated to the below-market time-sharper part. The adjusted earnings for the quarter ended December 31, 2023, which would have been $3.62 basic and $3.61 diluted, as compared to adjusted earnings of $2.50, Usually, security analysts do not include the above items in their published estimates of learning stressors.
Amortization of fair value below market time charter stock wise and the vessel depreciation.
On the portion of the consideration of vessels acquired time charters.
Allocated to the below market time charter spot.
Adjusted earnings for the quarter ended December 31st line.
It would have been $6 and six two cents basic and $2.61 diluted.
As compared to adjusted earnings of two point $2.50 basic and diluted for the quarter ended December 31st playing to.
'twenty two.
Usually security analysts do not include both type items in their published Mitchell, especially.
Tasos: Let's now look at the right part of the slide and review the numbers for the corresponding 12-month period ending December 31, 2023 and December 31, 2022. For the full year of 2023, the company reported total net revenues of $190 million, representing a 4% increase over total net revenues of $182.7 million during 2022, again mainly the result of the increased number of vessels we owned and operated in 2023 compared to the year before. The company reported net income for the year of $115.2 million as compared to a net income of $106.2 million for 2020. Interest and other financing costs for 2023 amounted to $9.8 million, again before deducting capitalized imputed interest income of $3.4 million earned, as I mentioned earlier, from self-financing the pre-delivery payments of our new building program, for a total interest and other financing cost of $6.4 million compared to $5.1 million for the same period of 2022, which was derived after deducting capitalized imputed interest Again, this increase is due to the increased amount of debt that we have and the higher software rates that our bank loans had to pay as compared to the year before.
Let's now look to the right part of the slide and review the numbers for the corresponding 12 months' period.
Ending December 20.
'twenty three.
'twenty two.
For the full year of 2023, the company reported total lifetime bring yourself 119 million, representing a 4% increase with total net revenues of $192 7 million. During 2022 again, mainly the result of increased number of vessels we own it.
I hate it.
And then in 2023 compared to the year before.
The company reported net income for the year.
And then in $15 2 million as.
Compared to a net income of 100 and Kings point to median for 'twenty to 'twenty two.
Interest and other financing costs amounted.
Amounted to $9 8 million again before the packing capitalize them.
Net income of $3 4 million and as I mentioned earlier, some self financing the pre delivery payments of hot New building program.
Total interest and other financing costs of $6 4 million.
Compared to $5 1 million for the same periods of strength in Utah.
Which was.
After deducting capitalized <unk>.
Income for 22 million.
Yeah.
Again this is due to the increased amount of debt that we had and the higher sulfur HAGE. The bank all of our bank loans to pay as compared to the year before.
Tasos: Moving to the EBITDA figures, adjusted EBITDA for the 12 months of 2023 was $124 million compared to $114.4 million during 2022, primarily the result of higher revenues, as I mentioned earlier. Basic and diluted earnings per share for 2023 were $16.53 basic and $16.52 diluted, calculated on about 6.9 million basically diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of 14.79 and 14.78 dollars per share, respectively, for 2022. Excluding the effect on net income for the year of the unrealized... Loss on derivatives, impairment loss, amortization of the below market time charter acquired, and vessel depreciation attributed to the below market. Charters acquired, and gain on time charter agreement termination, as well as gain on sailor vessel. The adjusted earnings for the year ended December 31, 2023, which were $14.99 basic and $14.98 diluted, compared to earnings of $13.23 basic and $13.21 diluted for the year before. As I mentioned before, analysts do not include those adjustments that we subtracted in their estimates of earnings per share.
Moving to the EBITDA figures adjusted EBITDA for the 12 months of 'twenty to 'twenty three.
Yeah.
24 million compared to $14 4 million during 2022, primarily the result of higher than anything you mentioned.
Basic and diluted earnings per share for 2023 were $16 53 basic and $16.02 diluted culture.
Calculated on about $6 9 million.
Basic and diluted weighted average number of shares outstanding compared to basic and diluted earnings per share or $14 79.
14 points of NK dollars.
Seth respectively.
'twenty two.
Okay.
Excluding the effect on net income.
For the year.
Their lives.
Loss from Guinea, but.
Pediment loss amortization of the below market time charter suck y.
The vessel depreciation attributed to the below market.
Yeah.
<unk>.
Acquired.
And gain on time charter agreement termination as well as gain on sale of vessel.
The adjusted earnings for the year ended December 31st 2023, which are being $14.99 basic and $14.98 diluted compared to earnings of $17.23 basic.
$13 and Duane D. One cents per diluted for the year before.
And as I mentioned before on that list.
All such documents do we subtract it means actually mentioned earnings per share and that's why we make we're making the adjustments.
Tasos: That's why we make, we're making the adjustments. Let's now turn to slide 18 to review our fleet performance. We'll start our review by looking at our utilization rates, first for the fourth quarter and then the full year of 2023 and compare them to the same period in 2020. Starting with the fourth quarter of 2023, our commercial utilization rate was 100%, while our operational utilization rate was 99.5%, compared to 100% commercial and 95.1% operational for the fourth quarter of 2022. On average, 19 vessels were owned and operated during the fourth quarter of 2023, earning an average time charter equivalent rate of $29,704 per day, compared to 18 vessels in the same period of 2022, earning on average $29,399 per day.
Let's now turn to slide 18 to review our fleet performance.
We'll start our review by looking at our utilization rates for the fourth quarter and then the full year.
Thank you sweet and compare it to the same thing or you're just trying to trying to do.
Starting with the fourth quarter of 'twenty to 'twenty three.
Commercial utilization rate was 100%.
While our operational utilization rate was 99, 5%.
Compared to a 100% commercial and 95, 1% operational for the fourth quarter of 'twenty to 'twenty two.
Well not minutes 19 vessels were owned and operated during the fourth quarter of 'twenty three.
And then can Navios time charter equivalent rate was.
$9700 per day compared to 18 vessels from the same period of 2022 banging on NASDAQ, it's $29299 per day.
Tasos: Total operating expenses, including vessel running expenses, management fees, and other G&A expenses but excluding dry docking costs, were $7,923 per vessel per day for the fourth quarter of 2023 compared to $7,937 for the same period of 2020. If we move further down this table, we can see the cash flow break-even rate, which takes also into account dry docking expenses, interest expenses, and loan repayment. Thus, for the fourth quarter of 2023, our daily cash flow break-even rate was $15,000 per vessel per day, compared to $15,801 per vessel per day for the same period in the fourth quarter of 2023. Let's now look at the right part of the slide to review the same figures for the full year. During the entire 2023, our commercial utilization rate was 99.6%, while our operational utilization rate was 99.1%, compared to 99.9% commercial and 98.4% operational for 2020. On average, 18.25 vessels were owned and operated during 2023, earning an average time charter equivalent rate of $29,807 per day compared to 17.1 vessels owned and operated during 2022, earning on average $31,964 per vessel per day.
Total operating expenses, including vessel expenses management fees and other G&A expenses, but excluding drydocking costs were.
$7923 per vessel per day.
Fourth quarter strength in Q3 compared to $7977 for the same period 'twenty.
2022.
Even if we even farther down on this table, we can see the cash flow breakeven rate, which takes also into account drydocking expenses interest expenses from loan repayments.
Thus for the fourth quarter of 2023.
Daily.
Cash flow break even rate was $15000 per vessel per day compared to 16008 founding in $1 per vessel per day for the same period in the fourth quarter of 2022.
Let's now look on the right part of the slide to give you the same figures for the full year.
Getting the entire plane to 'twenty three our commercial utilization rate was 99, 6%.
While our operational utilization was 99, 1%.
Compared to 99, 9% commercial and 98, 4% of passionate language 'twenty.
Well not very much.
18 point 25 vessels were owned and operated during 2023.
And not that it's time charter equivalent rate of $29807 per day compared to 17.1 vessels owned and operated during 2022.
You cannot vote since the.
$1964 per vessel per day.
Tasos: Total operating expenses, again, including vessel running expenses, management fees, and other G&A expenses but excluding the idolating cost, were $7,906 for 2023, as compared to $7,548 per vessel per day for 2022. Again, looking at the bottom of this table, we can see the cash flow break-even rate for the year, including. Dry docking expenses, intake expenses, and loan repayments, which amounted to $14,186 per vessel per day in 2023, compared to $14,508 per vessel per day in 2022.
Okay.
Total operating expenses again, including vessel hanging expenses management fees and other G&A expenses.
But excluding drydocking costs were $7906.
For 'twenty to 'twenty three.
That's compared to $7548 per vessel per day.
'twenty two.
Again looking at the bottom of this table or excuse me cash flow breakeven rate for the year.
Yeah, including.
The hydro can expenses interest expenses and loan repayments, which were 2023 amounted to $4196.
<unk> per day compared to $14500.
The vessel for 'twenty to 'twenty two.
Finally, if we look at the very last line on this on this slide we can see the common dividend that we paid expressed in dollars per day.
Tasos: Finally, if we look at the very last line on this slide, we can see the common dividend that we paid expressed in dollars per day for the fourth quarter of 2023 that amounted to about $2,015 per vessel per day, while for the full year it amounted to $1,015. Let's now move to slide 19 to review our debt profile and our forward cash flow breakeven level. As of December 31st, 2023, our total debt amounted to about $131 million.
For the fourth quarter.
'twenty 'twenty, but amounted to about $2015 per vessel per day.
For the full year amounted to two.
2000, and hunting and $4 per vessel per day.
Let's now move to slide 19 to review.
Our debt profile and our forward cash flow break even level.
As of December 31st 2023.
Our total debt amounted to about 131 me.
The chart shows our current debt repayment schedule for the next three years.
2023 we made repayments totaling $68 98 million.
Tasos: The chart shows our current debt repayment schedule for the next three years. In 2023, we made loan repayments totaling $68.98 million, which included a payment of $27 million that was refinanced and balloons totaling $13.3 million for five of our vessels, which remain unencumbered, raising the number of unencumbered vessels in our fleet to seven. In 2024 and 2025, our projected loan payments decreased to around $31.2 million and $18.1 million, respectively, with balloons due in 2024 of 1.8 million and in 2025 of 18.3 million. The point here is regarding the cost of our debt, which carries an average margin of 2.31%. Assuming a soft rate of around 5.31, the cost of our senior debt, tenths as of December 31st of 7.62%, but including the cost of certain interest rate swaps that we have. This figure gets reduced to about 7.32% on average, as about 15% of our debt is hedged at a soft rate of around 3.4%.
A figure which includes payments trying to saving me million daus or finance.
Balloons totaling $13 3 million correspond with our vessels, which remain unencumbered.
Using the number of unencumbered vessels in our fleet to seven.
<unk> 24 in 2025, our projected loan payments decreased to around $71 2 million and $18 1 million respectively with balloons.
In 2024 1.8 million homes in 2025 or $18 3 million.
The point here and guarding the cost of our debt.
Each case another margin of two point, 71%.
Assuming a soft freight pounds 571, the Costa farms senior debt stands as of December 31st 762%.
Including the cost of certain interest rate swaps that we have.
This figure it gets reduced to about seven point, 72% on average it's about 15% of the flower that you said at the shelf right.
Around three 4%.
I like to draw your attention on the bottom of the slide where we present the leveling component itself our expected cash flow breakeven for the next 12 months and it was so the breakeven level.
Cash flow at the body's levels.
Tasos: I'd like to draw your attention now to the bottom of the slide, where we present the level and components of our expected cash flow break-even for the next 12 months. And we'll show the break-even cash flow at various levels. First, our EBW rate even level is $8,643 per vessel per day, a buy that you see somewhere in the middle of the slide. In total, including interest and loan repayments, our projected cash flow breakeven level over the next 12 months is expected to be around $14,658 per vessel per day.
So I start with EBITDA breakeven level.
8600 and of course, it's $8 per vessel per day bothered you see somewhere in the middle of the slide.
In total <unk>.
Interest and loan repayments.
Projected cash flow breakeven level over.
The next 12 months is expected to be around $13658 per vessel per day.
To sum up our presentation, let's move to slide 12 to review several highlights from our balance sheet.
As of December 31st 2023.
Our assets include.
Cause another composites, which amount to about seven to $1 7 million.
Advances that we pay to our new building program kind of spend it's about $85 4 million.
Tasos: To sum up our presentation, let's move to slide 20 to review certain highlights from our balance. As of December 31st, 2023, our assets include cash and other current assets, which amount to about 71.7 million. Advances that we have paid for our new building program currently stand at about 85.4 million as of December 31st, 2023, and the book value of our vessels is $267.7 million, resulting in a total book value of our assets of about $224.7 million. On the liability side, as I previously mentioned, we had debt standing at $131 million, equivalent to about 31% of the book value of our assets.
Finished.
2023, and the book value of our vessels was 267.7 million, resulting total book value of our assets well for about $224 7 million.
On the liability side as I previously mentioned, we kept that spending that I'm doing a 71 million equivalent to about 71% of the book value far outfits.
Fair value below market, sorry to sell quiet is approximately seven.
Seven 6 million, representing about one 2% of our assets and other liabilities.
Stands at about 11 million accounting for another two 6% of our total book value of fibrosis.
Tasos: The fair value of below-market charters acquired is approximately $7.6 million, representing about 1.2% of our assets, and other liabilities stand at about $11 million, accounting for another 2.6% of our total book value. Regarding shareholder equity, I would like to highlight two points. First, that as of December 31st, 2023, our retained earnings turned positive, reflecting the profitability of the last four years, which erased the losses of the previous decade. And this happened even after payment of almost $25 million in dividends during 2022 and 2021. And second, that the market value for our fleet surpasses its book value significantly. Utilizing the Charter Adjusted Values, for both our fleet and our new building contracts, the value of our fleet is about $337 million, thus about $70 million more than its book value. This translates to a net asset value of about $352.5 million for our company, which is equivalent to approximately $50.9 per share.
Regarding shareholders equity I would like to highlight two points.
The initial plan.
As of December 31st 2023.
Our retained earnings turn positive, reflecting the profitability of the last four years, which as well.
The losses from the previous they can't eat and these shipping even after payment of almost $25 million of dividends during 2022 and 'twenty 'twenty thing.
And second if the market value for a fleet sure surpasses did you book each book value significantly.
Utilizing the charter adjusted values.
Both of our fleet and our new building product contracts.
<unk> estimated.
Value.
Felipe.
About seven.
7 million, that's about 70 million more than the than its book value.
This translates to a net asset value of about 52.
Half a million for our company, which is equivalent to approximately.
$59 per se.
I'm surprised yesterday close to $34, which compared to our net asset value as it presents itself question discount.
There's been considerable appreciation potential.
Tasos: Our share price closed yesterday at $34, which compared to our net asset value represents a substantial discount, suggesting considerable appreciation potential for our shareholders and investors. And with those remarks, I would like to pass the floor back to Aristidis to continue the call. Thank you, Tasso.
Shareholders and investors.
And with those remarks, I would like to pass the floor back to Sirius to continue the call.
Okay.
Thank you Doug So let me now open up the floor for any questions you may have.
Thank you we will now conduct a question and answer session.
I'd like to ask a question. Please press star one on your telephone keypad.
Operator: Let me now open up the floor for any questions you may have. Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
Hey, confirmation tone will indicate your line is in the question queue.
You May press star two if he would like to.
We moved your question from the queue. So participants using speaker equipment. It may be necessary to pick up your handset before pressing just talkies once again that's star one at this time.
One moment, while we poll for my first question.
Our first question comes from Tate Sullivan with Maxim Group. Please proceed.
Yeah.
Operator: You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star 1 at this time. One moment while we post our first question. Our first question comes from Tate Sullivan with Maxim Group. Please proceed. Hi, thank you. Good morning.
I think keep in mind.
First on that on the 20% dividend increase and I mean, 2023, having a payout ratio of about 12%.
Can you talk about how you evaluated increasing the 20 per cent dividend did you look across the shipping sector of payout ratios and what made you comfortable will get it I mean, the ability of your.
Tate H. Sullivan: First on the 20% dividend increase, and I mean, 2023, having a payout ratio of about 12%. Can you talk about how you evaluated increasing the 20% dividend? Did you look across the shipping sector at payout ratios? And, and what made you comfortable given, I mean, the ability of your company to get contracts on your six future new ships. I think the primary concern was that we wanted to offer our shareholders significant dividend yields. So we want to satisfy our shareholders. However, with the increase in the share price going down to 5-6%, the dividend yield was not at the level that we like to see. We know that our payout ratio is, even today.
They get contracts on euro six future new builds.
Gotcha.
I think.
The primary concern it was of the three bumps to offer to our shareholders.
Significant defend the dividend yields.
So we want to satisfy our shareholders, we felt with the increasing the share price going down to five 6% dividend yield was not that to a level that we like to see we know that that would pay out a today issue even today is low.
So we are keeping the excess liquidity in order to be able to find opportunities to invest when the time is right, but at the same time, we really want those shareholders could be satisfied until we get them more than they would be getting in concert a bunch of investments bond and stuff like that.
So that was really the reason we did it.
As we've said many times, we have ample liquidity events. We are collecting until we've decided to do we have the secured during the strong time of the markets and we're trying to make optimal use of that.
Mr. Peters: We are keeping the excess liquidity in order to find opportunities to invest when the time is right. But at the same time, we really want our shareholders to be satisfied and to be getting more than they would be getting in conservative investments, bonds, stuff like that. So that was really the reason we did it.
Okay, great. Thanks, Yeah, it's great to see and then on the Aegean Express and coupled with your comment of maybe holding off on acquisitions for now.
We're getting where asset values are particularly with the increase in rates to the Red Sea.
Mr. Peters: As we've said many times, we have ample liquidity that we are collecting through the charters that we have secured during the strong times of the markets, and we're trying to make optimal use of that. Great. Thanks, Gail. It was great to see you.
<unk> how are you evaluating the Aegean Express a 7000 rate versus breakeven EBITDA level of about 8600.
Scrapping versus future contract availability.
Mr. Peters: And then on the Aegean Express, and coupled with your comment of maybe holding off on acquisitions for now, given where asset values are, particularly with the increase in rates due to the Red Sea situation, how are you evaluating the Aegean Express, the 7,000 rate versus breakeven, even a level of about 8,600, scrapping versus future contract availability? Well, last year in our model, we were assuming that we would be scrapping the Aegean Express at the completion of the Charter because we thought the market would be soft. But with this strengthening market, the 7,000 level, which is just above break-even for this particular vessel that has no debt assigned to it and low operating expenses, we felt it was best to keep it because, really, we don't know how this market will develop. So we want to have the option of earning significantly more than what we can earn by selling the vessel today at scrap value plus a little bit. So that's the reason we are keeping it. It has a positive option value for us, and it's contributing just a little bit because 7,000 is above break-even.
Well last year in our model, we let it assuming that we would be scrapping the Aegean express at the completion of the child.
Because we thought the market would be solved.
But we leased strengthening maas good to the 7000 level, which is just above breakeven for this but did you let a medicine that has no debt assigned and low operating expenses.
We felt it is best to keep it because it.
But really we don't know how this market.
We'll develop so we want to have the option of.
That doesn't mean significantly more than what we can learn by selling the vessels today at the scrap value plus a little bit.
So that's the reason we are keeping at it has in the options by a positive option value for us and it's contributing just a little bit because the 7000 is above with a breakeven.
Hey, Thank you and last one for me on the capital commitments for the new builds including to lead the ship delivered this current quarter can you give us an update on that the outflow for this current quarter and then a total capital commitments for that all the new builds.
Tasos: Thank you. And the last one for me, Tasos, is on the capital commitments for the new builds, including the ship delivered this current quarter. Can you give an update on the outflow for this current quarter and then the total capital commitments for all the new builds? I think the remaining six new buildings have... I believe, off the top of my head, something like $220 million that we need to... total contract price, of which about $65 million, give or take, has been on the table, already paid, and we expect to finance 60% of the... of the contract price, that's about $130 million.
I think I think the remaining six new buildings.
I believe around the top of my head something like 220 million that we need to put total contract price.
Weitz about.
65 give or take has been oh.
You bet.
And we expect to finance, 60% of their cloud.
Okay contract with price, it's not about the founder and uncertainty of millions. So we kept about I believe 70 million of additional equity contribution I made this calculation off the top of my head trying to subtract the best one took delivery of Manhattan.
Tasos: So we have about, I believe, $30 million of additional equity contributions to make. I made this calculation off the top of my head, trying to subtract the vessel we took delivery of already. Okay, cool. Thank you for that. Okay, thank you very much. Thank you, Dave. Thank you. Our next question comes from Christopher Sicario with Art.
Okay, well. Thank you for that okay. Thank you very much.
Thank you Dave.
Thank you. Our next question comes from Christopher <unk> with <unk> Securities. Please proceed.
Oh, congrats on Oh, I'm, a good cook around.
I'll start with the dividend hike.
Operator: Securities, please proceed. Hello, it's Rex on another good quarter and definitely positive with the dividend hike, and it's Christopher Shelly in the Arctic. I believe it was. A different name, that's what I was told. Anyway, um... Can you elaborate a bit on the talk ring discussions, both with regard to vessels coming over for now and... On the new build, how long durations can you get now and how do you value duration compared to rate levels? True. True.
And I think yeah I believe it was.
I'll bet you name it.
All right.
Anyway.
Can you elaborate a bit some torque ring discussions.
Well that's true.
Awesome coming over for now and well on.
On the Newbuild, Oh, Oh, Oh, how long durations can you get small and how do you sort of full body inflammation compared to today's levels.
Sure.
Mr. Peters: Yes, we are already discussing the charter of our first new building vessel to be delivered in April. The duration is between one and two years.
Yes, we are already discussing are the childhood.
Of Oh, the first new building vessels could be they live with the Navy blue.
Duration is between one and two years, one and two years, we are looking at the various offices that we have.
Mr. Peters: We are looking at the various offers that we have, and we'll decide depending on the level of if we go for one or two years. So there are discussions there. There are discussions about a couple of ships that open up within the next month or two months or so for periods of up to a year. We will see. I mean, there is interest in the vessels that are coming up within the next couple of months, and we are focusing on these vessels for the time being, but we have nothing to report yet. Yeah, great. And with regard to the comment you made in the report on potential accretive investment opportunities. Is this something, Salvation Army?
And we'll decide depending on the level of if we go for one or two years or so.
There is discussions that are there are discussions about a couple of ships that the open up.
Within the next month or two months or so.
For periods of up to a year.
We will see I mean, there is interest in the vessels that are coming up within the next couple of months and we are focusing on these vessels for the time being but nothing to report yet.
Okay great.
Yeah. The comments you made in the reports on.
Hum pencil a creep in.
Once opportunities its just something.
Mr. Peters: Company or M&A or whatever you're doing here. Well, to be honest, it's individual vessel acquisitions at this stage, primarily, that we are looking at. We're looking at quite a few things, but there is, again, nothing to report. We need to feel comfortable about the deal before, before advancing, America.
Oh.
Uh huh.
Sorry.
Company or M&A or.
Yeah.
No it wouldn't be honest I'd say to individual vessel acquisitions at this stage, but I may really that we are looking at.
We're looking at quite a few things, but that is again nothing to report.
We need to feel comfortable about the deal before.
Operator: Thank you, bye. Thank you, thank you. Once again, ladies and gentlemen, to ask a question, please press star 1 on your telephone keypad.
Before advancing.
Okay.
Okay. Thanks, that's all for me have a good day. Thank.
Thank you. Thank you and thank you for saying.
Once again, ladies and gentlemen to ask a question. Please press star one on your telephone keypad.
Operator: Our next question comes from Clement Mollins with Value Investors Edge. Please proceed. Good afternoon, thank you for taking my questions. I wanted to start by asking about the upgrades on the Synergy Busan.
Our next question comes from climate violins with value Investor's edge. Please proceed.
Good afternoon. Thank you for taking my questions I wanted to start by asking about the upgrades on the synergy piece of that.
Clement Mollins: You mentioned it will improve the vessel's performance by about 20%. And I was wondering, relative to the 1.6 million price tag of the upgrades, could you provide some further insight on the expected ROI? The ship has completed its dry dock, and we have data on the first month after the delivery of the vessel, after the ship, and after the retrofit. The indications are that we are talking about a 25% improvement in performance, and, based on our budgeted figures, we estimated that within two years we would have recovered the whole investment. It might be even sooner.
You mentioned it will improve the vessel's performance by about 20%.
I was wondering relative to the one 6 million right.
Could you provide some further insight on the expected ROI.
Hi.
We have taken deliberate I mean, the shippers completed dry dog and we have the data in the first month after the delivery of the vessel lost with the ship after the retrofits the.
The indications are that we are talking about 25% a improvement in the performance.
On the budget didn't feel good.
We estimated that are within two years, we would have recovered the whole investment.
It might be even sooner.
Mr. Peters: That's very helpful, thank you. My second question is market-related. No one knows when the disruption in the Red Sea will be over, but I was wondering, should that happen? How fast do you think the market would readjust once again?
That's very helpful. Thank you. My second question is market related no one knows when disruption indirect you will be over but I was wondering should that happen.
Do you see in the market what do we hadn't yet once again.
Mr. Peters: It takes a long time for markets to readjust to changes, so I think that even if things were to end tomorrow, it will take at least six months before we go back to normality, and I don't see it ending tomorrow. Generally, it takes time for the markets to readjust. Makes sense. That's all from me. Thank you for taking my questions. Thank you. Thank you. The next question comes from Paul Fratt with Alliance Global Partners. Please proceed. Yeah. Hi Erskine, it's Tazos. You've covered a lot of ground, but just, I'm not sure you mentioned it, but could you just highlight whether the dividend increase will be reviewed annually?
It takes a long time before it gets to readjust on changes so I think that even if this thing is relative to end tomorrow.
It will take at least six months before we'd go back to normality.
And I don't see them being tomorrow, but.
Generally it takes time for the markets to readjust.
That's all for me. Thank you for taking my questions.
Thank you.
Thank you Rob next question comes from Paul Frac with Alliance Global Partners. Please proceed.
Hi, She did say pass it on.
But a lot of ground, but just.
I'm not sure you mentioned it but could you just highlight whether.
On the dividend increase would be.
Speed reviewed annually.
Paul Fratt: Is that sort of something we should expect? Usually, I mean, dividends are reviewed quarterly by our board, but the expectation, obviously, when we announced it is that this will continue throughout the year. I am not committing 100% that that will be the case, but we feel very comfortable that we will be able to continue for at least another year. Great, thank you. Thanks. Thank you. We have a follow-up question from Tate Sullivan with Maxim Group.
It's something we should expect.
Usually usually I mean.
We then Saturday viewed club digitally by our board.
Bob.
The expectation obviously, when we announced it is that at least will continue throughout the year.
Uh huh.
I am not committing to 100% that that will be the case, but we feel very comfortable that we will be able to continue for at least another year.
Great. Thank you.
Thanks.
Thank you we have a follow up question from Tate Sullivan with Maxim Group. Please proceed.
Operator: Please proceed. Oh, thank you for taking a fall. I may possibly apologize if I missed it earlier, but the Akinata Bridge in the hall damage from last year is the 1.1 million expense this fourth quarter on higher insurance related to that. And you still have outstanding insurance related to the haul damage for the.
Thank you for taking the follow up I, maybe I apologize if I missed it earlier, but the auction out of branch in the hall damage from last year is the $1 1 million.
That's good fourth quarter on higher insurance related to that and do you still have outstanding insurance claims related to the hull damage can be economic.
And so when you take that yeah, I think we have where we have collected a good number of the.
Tate H. Sullivan: I think we have collected a good number of the outstanding claims on Akinada, that's why our receivables, our other receivables, if you look at our balance sheet, have come down significantly this quarter. There might be some small things, but by and large, we have collected most of the insurance claims, and was that $1.1 million charge Tassell sent for for higher insurance related to the Akinata claim, there is No, we indeed... Go ahead, Tasso. No, no, I don't...
And outstanding claims and all Nike not there and that's why our receivables receivables. If you look at our balance sheet come down significantly.
And this quarter.
<unk> be some small changes, but by and large we have collected most of the a.
Insurance claims.
And was that 1.1 million charged hustle sitting for Q for higher insurance related to the Okinawa claims.
Or is something separate.
No.
Thank you.
Go ahead Doug.
I I I am I don't I cannot relate to such a charge in Q4.
And.
B.
Tasos: I cannot relate to such a charge in Q4, and some other operating income that you probably will see in Q4 relates to some recoveries from Aegean Express. Okay, thank you very much. Indeed, on Aegean Express, we collected a bit more than we had assumed before, and that's why you see that increase. We would try to be conservative in our estimates of what would be paid on the insurance, and we did get a little more on the Aegean Express claims, which is reflected in our Q4 figures. Yes, exactly. That's exactly what I wanted to say. I think we got about a million dollars more than what we thought we would get from the insurance proceeds because, as always, we are very conservative when we budget for such things.
Yeah.
Some of it.
I'm, sorry, I'm seeing some other okay. How are you thinking.
I think you probably seen in Q4, HD Aegean ex some recoveries from Mcgeean experience.
Okay.
Understood. Okay. Thank you very much.
And indeed on the Aegean Express.
And again, sorry, you're asking when Aegean expansion, we collected a bit more than what we had assumed before and that's why you see that increase and we would try to be conservative in our estimates, but what would you be paid and that the insurance and we did get a little more on.
And then on the Aegean Express a P.
<unk>, which is reflected on our Q4 P M.
Yes, exactly that's what they wanted to say I think we got about $10 million more than what we thought we would get from the insurance proceeds because as always we are very conservative.
When we budget such things.
Yeah.
Mr. Peters: Thank you. At this time, I would like to turn the floor back over to the CEO, Mr. Peters, for closing comments. Thank you all for participating in today's conference call, and we will be back to you with our Q1 results in three months' time. Goodbye. Thanks, everybody. Thank you for your questions. Thanks. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.
Thank you at this time I would like to turn the floor back over to the CEO, Mr. Peter for closing comments.
Thank you all for participating in today's call are in school and we will be back to you with a two.
Q1 results in three months studying.
Goodbye and thanks, everybody. Thank you for your questions. Thanks.
That concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Okay.