Q1 2024 Genco Shipping & Trading Ltd Earnings Call
Speaker Change: [music] please standby your.
Program is about to begin.
Uh huh.
Speaker Change: Good morning, ladies and gentlemen, and welcome to the Genco shipping and trading limited first quarter 2024 earnings conference call and presentation.
Speaker Change: Before we begin please note that there will be a slide presentation accompanying today's conference call.
Speaker Change: That presentation can be obtained from <unk> website at www dot of Genco shipping <unk> Dot com.
Speaker Change: Jim for everyone. Today's conference is being recorded and is now being webcast at the company's website www Dot Genco shipping dotcom.
Jim: We will conduct a question and answer session. After the opening remarks instructions will follow at that time.
Jim: A replay of the conference will be accessible anytime during the next two weeks by dialing 893, eight to 487 and entering the pass code 24967.
Speaker Change: At this time I will now turn the conference over to the company. Please go ahead.
Speaker Change: Good morning, before we begin our presentation I note that in this conference call, we will be making certain forward looking statements pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995, such forward looking statements use words, such as anticipate budget estimate expect project intend plan believe and other.
Speaker Change: <unk> and terms of similar meaning in connection with a discussion of potential future events circumstances or future operating or financial performance. These forward looking statements are based on management's current expectations and observations for a discussion of factors that could cause results to differ. Please see the company's press release that was issued yesterday the materials relating to this call posted on the.
Speaker Change: Company's website and the company's filings with the Securities and Exchange Commission, including without limitation. The company's annual report on Form 10-K for the year ended December 31, 2023, and the company's reports on Form 10-Q and form 8-K subsequently filed with the SEC.
John C. Wobensmith: Time, I would like to introduce John woven Smith, Chief Executive Officer of Genco shipping <unk> trading limited.
John C. Wobensmith: Good morning, everyone welcome to Genco as first quarter 2024 conference call in.
Speaker Change: In addition to reviewing our Q1 2024 and year to date highlights we want to use this opportunity to provide an update on the progress we are making three years into a comprehensive value strategy as well as on the industry's current fundamentals. We will then open up the call for questions for additional information. Please also or.
John C. Wobensmith: For our earnings presentation posted on our website.
John C. Wobensmith: Separately from our earnings release, we issued a press release yesterday with the news that leading proxy advisory firm ISS made recommendations consistent with those of our board for all of the items to be voted on at our annual meeting of shareholders. This year. While we are pleased with this result, the focus of our call. This morning.
John C. Wobensmith: We'll be over the results for the first quarter of 2024, and the ongoing implementation of our comprehensive value strategy. If you wish to see more information regarding matters to be voted on at our annual meeting. Please refer to the press release, I mentioned or our website at www dot vote for.
John C. Wobensmith: <unk> Dot com.
John C. Wobensmith: Beginning on slide five during the first quarter, we further executed our value strategy, which is aimed at driving returns through the drybulk cycles, and creating sustained long term shareholder value.
John C. Wobensmith: Building on a solid end to 2023 Q1 2024 marked another strong quarter for Genco, we drew on our leading commercial platform and significant operating leverage to generate Q1 net income was $18 $8 million driven by fleet wide time charter equivalent rate of 19.
John C. Wobensmith: <unk> thousand $219, notably she wants TCE increased relative to Q4 for the first time in over 15 years in terms of shareholder returns, we increased the Q1 dividend quarter over quarter.
John C. Wobensmith: It's a 42 cents per share as our strong Q1 earnings flowed into our dividend consistent with our transparent policy during.
John C. Wobensmith: During the quarter. We also further improved our risk reward balance as we voluntarily paid down debt and improved our net leverage position to 7% as we approach our goal of net debt zero.
John C. Wobensmith: Turning to slide six we provide a snapshot of how our approach to capital allocation centered around dividends deleveraging and growth has developed since implementing our value strategy a little over three years ago.
John C. Wobensmith: In 2021, we laid out a clear path and related objectives to transfer genco into a low leverage high dividend, yielding company with significant financial flexibility to provide shareholders with returns and opportunistically grow through the Drybulk shipping cycles since that time, we have paid down $279 million.
John C. Wobensmith: A debt, while distributing nearly $200 million to shareholders in the form of dividends and investing $236 million in our fleet as.
John C. Wobensmith: As we implemented the strategy in 2021, we prioritize vessel acquisitions and debt paydowns to reduce our cash flow breakeven when the cyclical turn in the market began creating a strong foundation for the execution of our value strategy.
John C. Wobensmith: Since 2022, we have continued to voluntarily pay down debt, while increasing our focus on dividends on page seven we highlight the compelling dividends, we have provided to shareholders. The first quarter dividend marks our 19th consecutive quarterly dividend payment, representing the longest period of consecutive dividends.
John C. Wobensmith: In our peer group over this time, we have declared $5.57 per share and dividends were approximately 25% of the current share price.
John C. Wobensmith: Complementing shareholder returns during Q1, we continued to prioritize fleet renewal as highlighted on page eight.
John C. Wobensmith: Following the timely acquisition of two high specification Capesize vessels in Q4, we divested three 2009 to 2010 built vessels that delivered to buyers in Q1 and early Q2 2024 through these transactions we have improved the fuel efficiency of our fleet increased.
John C. Wobensmith: Our earnings power and reduced our fleet's average age and saved approximately $10 million and dry docking capex for 2024 importantly, we also increased utilization in the current strong market, but the execution of this phase of our fleet renewal plan. We have further advanced our barbell approach to fleet.
John C. Wobensmith: Position as shown on page nine.
John C. Wobensmith: Capesize vessels provide high operating leverage and upside potential with a focus on the iron ore coal and oxide trades, while the minor bulk vessels provide more stable earnings streams operate on diverse trade routes that are more closely linked to global GDP growth. We believe owning shifts in both of these sectors support genco has value.
John C. Wobensmith: G <unk>.
John C. Wobensmith: Moving forward, we continue to evaluate further opportunities in the sale and purchase market. The further renew our fleet.
John C. Wobensmith: Turning to slide 10, we continue to generate strong TCE performance in Q1, our fleet right TCE increased by 38% on a year over year basis. Looking ahead to Q2, 65% of our available days are fixed to date at over $20000 a day pointing.
John C. Wobensmith: To another firm quarter as this is well above our cash flow breakeven rate of approximately $10000 per day.
John C. Wobensmith: Turning to slide 11, we believe <unk> remains in a highly advantageous position moving forward specifically, we have an industry low net loan to value and cash flow break even rate and nearly $300 million and undrawn revolver availability. This provides significant financial flexibility and optionality for the company going forward.
John C. Wobensmith: We believe our low leverage high dividend payout model executed in scale is industry, leading in the dry bulk shipping public markets, given the volatility and cyclicality of dry bulk shipping. We also believe it creates a favorable risk reward balance to provide sizable returns to shareholders opportunist.
John C. Wobensmith: As we grow the fleet and enhance our earnings power through the cycles.
John C. Wobensmith: I'll now turn the call over to Peter Allen, Our Chief Financial Officer.
Peter Allen: Thank you John on slides 13 through 15, we highlight our first quarter financial results Genco recorded net income of $18 $8 million or <unk> 44 cents in 43 basic and diluted earnings per share respectively. Adjusted net income amounted to $21 $4 million or basic and diluted earnings per share of <unk> 50.
John C. Wobensmith: And 49 cents, excluding other operating expenses of $1 $8 million loss on sale of vessels of $1 million in unrealized fuel gains of <unk> $2 million adjusted EBITDA for Q1 totaled $41 9 million more than double the total from the same period of 2023.
John C. Wobensmith: During the first quarter, our net revenues increased by 44% on a year over year basis, while our recurring cost structure remained approximately flat over the period illustrating the high degree of operating leverage inherent in the business. This operating leverage is best displayed by our Capesize vessels, which are under Tc of 25000 and $600 per day in Q1.
John C. Wobensmith: 2020 for nearly $10000 per day higher than the same period of last year with such operating leverage there is less of a need for financial leverage to achieve strong returns.
John C. Wobensmith: On slide 16, we highlight the trajectory of our debt outstanding and our continued voluntary debt repayments in the year to date, we have utilized the built in flexibility of our $500 million revolving credit facility to voluntarily pay down $85 million of debt. So far this year, primarily use utilizing proceeds from vessel sales.
John C. Wobensmith: On a go forward basis, we estimate these debt pay downs will reduce interest expense by approximately $5 million on annualized basis or approximately $350 per vessel per day on our cash flow breakeven rate.
John C. Wobensmith: Now paid down nearly 75% of our debt or $334 million, resulting in a pro forma net loan to value ratio of 7%.
John C. Wobensmith: Given our 100% revolving credit facility, we plan to continue to actively manage our debt balance to save on interest expense, while opportunistically drawing down for vessel purchases given our nearly 300 million of Undrawn capacity at the end of Q1.
John C. Wobensmith: Moving to slide 17, we highlight our transparent dividend policy, which targets a distribution based on 100% of excess quarterly cash flow, excluding maintenance and it withholds or holding for future investment.
John C. Wobensmith: The nature of our variable dividend policy and our fleets operating leverage enables shareholders to directly benefit from freight rate increases as we've seen over the last couple of quarters.
John C. Wobensmith: Our Q1 2024 dividend.
John C. Wobensmith: Represents an annualized yield of seven 4% on the current share price well above to your U S treasury rate of approximately four 8%.
John C. Wobensmith: Going ahead to Q2 2024, we anticipate our cash flow breakeven rate, excluding incremental annual meeting related expenses to be $10207 per vessel per day, well below our Q2, TCE estimates to date of $20126 for 65% fixed pointing to another strong quarter.
John C. Wobensmith: These incremental annual meeting related expenses will also be excluded from the Q2 dividend calculation.
John C. Wobensmith: I will now turn the call over to Michael or our Drybulk market analyst to discuss the industry's current fundamentals.
Michael: Thank you Peter as depicted on slide 19, the dry bulk market remained at elevated levels. During the first quarter. These strong rates occurred during the historically softest quarter of the year for freight rates. However, Q1, capesize rates reached a 15 year high for the period driven by continued tightness in vessel supply in the Atlantic Basin.
John C. Wobensmith: We dry weather in Brazil, India, but enabling increased iron ore exports.
John C. Wobensmith: In Q2 to date, Capesize and Super Max rates remain at firm levels experiencing a strong push in recent days to approximately 28000 and $16000 per day, respectively.
John C. Wobensmith: With a well balanced dry bulk market as we have seen in recent years events that impact the supply of ships can have an effect on the freight market is.
John C. Wobensmith: As highlighted on slides 20, and 21 low water levels in the Panama Canal impacted the number of ships that could transit, resulting in heavy delays and rerouting of vessels.
John C. Wobensmith: Initially vessels were diverted through the Suez Canal, however attacks on commercial vessels in the region led many shipping companies to no longer transit the southern Red Sea and the Gulf of Aden area further disrupting the efficiency of the global dry bulk fleet.
John C. Wobensmith: Regarding the Chinese steel complex on slides 22, and 23, China's iron ore imports rose by 5% in Q1 2024 year over year, well iron ore port inventories have been building since October.
John C. Wobensmith: In terms of steel production the World Steel Association forecast China's output to remain at around 2023 levels. While the rest of the world is expected to see growth of 4% led by 8% growth from India wanting.
John C. Wobensmith: Wanting to an increase in demand for in developed countries and support from secondary trade routes.
John C. Wobensmith: In terms of the grain trade. We are currently in the midst of the South American grain season.
John C. Wobensmith: D as forecasting substantial increase in exports from both Brazil, and Argentina, and additional 25 million tons of corn and soybeans are expected to be shipped this marketing year, helping support minor bulk rates.
John C. Wobensmith: Regarding the vessels excuse me regarding the supply side outlined on slides 25 to 27 net fleet growth in 2023 was 3%.
John C. Wobensmith: Historically low order book as a percentage of the fleet as well as near term and longer term environmental regulations are expected to keep the growth low in the coming years.
John C. Wobensmith: While we expect volatility in the freight market. The foundation of a low supply growth picture provides a solid basis for our constructive view of the dry bulk market going forward.
Speaker Change: This concludes our presentation and we would now be happy to take your questions.
Speaker Change: Thank you, ladies and gentlemen, we will now conduct the question and answer session.
Speaker Change: If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: You may withdraw your question my pricing start to.
Speaker Change: Once again Joseph question. Please press star one on your telephone keypad.
Speaker Change: And we will take our first question from Omar <unk> with Jefferies. Please go ahead.
Omar: Thank you Hey, guys good morning nice quarter.
Omar: Thank you yeah, yeah, yeah. So I mean, obviously, we're seeing a strong cape market in your averages so far point to the solid earnings continuing into the second quarter.
Omar: You talked a bit here on the market, there's been a lot of discussion on bauxite over the past several months or quarters really.
Speaker Change: As a new trade in the market, that's really supportive of Capes and maybe could you just give a little bit more color kind of on how that market or how that trade has been developing because in the past it's always been capes in iron ore and those are two kind of married at the head how its bauxite come in and influence things from your perspective here over the past few quarters.
Speaker Change: Yourself.
Speaker Change: Well I think yeah, Omar and I wouldn't necessarily call it a new trade.
Speaker Change: Because it's been around for a few years, but it it it's now getting to the point, where it's it's meaningful in terms of ton miles.
Speaker Change: And so there's a significant amount of bauxite. That's as you said coming out of West Africa, it's going to to Asia. So it's a relatively long a.
Speaker Change: Long route creating ton miles the the nice thing about the <unk> side trade also is there there is still growth that that is projected for this year and in next year and it and it clearly is supplementing.
Speaker Change: The iron ore trade.
Speaker Change: Coming out of <unk>.
Speaker Change: Coming out of out of Brazil, So you're getting.
Speaker Change: You know more of a balanced Atlantic basin versus you know what are what's happening in Australia in terms of in terms of the iron ore trade and you know just going back to that to the growth numbers I mean, where we're projecting in 2024 this year, 8% year on year growth on a tonnage basis.
Speaker Change: Yes.
Speaker Change: Okay. Thanks, John and then I guess, maybe just on that you mentioned the balance sort of Atlantic market.
Speaker Change: Iron ore tends to be.
Speaker Change: So obviously, a big chunk of the total dry bulk trade, but that tends to have volatility, especially kind of Brazil.
Speaker Change: Being a bit more of a swing, perhaps especially in the beginning of the year, usually although we haven't seen it this year.
Speaker Change: You're kind of either your lenses bauxite does that does that exhibit similar type of volatility normally or is it more of a consistent as you mentioned just gradual growth in terms of cargo.
Speaker Change: Yeah, Hi, Omar.
Omar: I'll take that one so yeah, you're definitely right. There is a certain amount of volatility on the bauxite trade. There's a in Q3, there tends to be the rainy season. So there is that seasonality.
Speaker Change: It gives you know it's important on the case to have that extra option within the Atlantic Basin. This year and particularly in Q1, we saw Brazilian iron ore exports up 12% year over year. In Q1 also saw strong bauxite exports. So that just gives us more optionality within an already tight Atlantic basin.
Omar: But yeah, there is that additional seasonality.
Omar: In Q3 with the rainy season with bauxite and then it picks.
Omar: Picks up sequentially in Q4, and obviously Q3 and Q4 are our strong periods for Brazilian iron ore traditionally.
Speaker Change: Got it okay. Thank you and then maybe just one final one for me guys. Thanks for that color.
Speaker Change: I noticed you've you fixed the genco liberty for for one year here.
Speaker Change: <unk> 5000, which is clearly above but I would say that market averages we've seen recently.
Omar: Seemingly above the forward FFA curve, it's above at least visibly the one year time charter assessments from various broker houses.
Speaker Change: Well what what.
Speaker Change: What's happened I guess it is the market is stronger than headline rates are for index rates are.
Speaker Change: Our assessment is this repeatable. This 35000 any color you can give perhaps just on kind of that versus what we got to see data door yeah.
Speaker Change: Sure.
Speaker Change: Look at her perspective, you know, we did that a little while ago and so the you know at least the SFA market was a little bit higher than what it is today, though is that we've certainly seen it recover over the last two weeks.
Speaker Change: That would be a difficult rate to recreate today. However, you know we look at it shows you how we think in terms of and we've said this from time to time, when we see good a good rates and there is liquidity in the market, particularly in the Capes will take the opportunity to take some risks.
Speaker Change: Off the table from a portfolio approach and that's exactly what we did with the with the Liberty. So you know we're going to keep an eye on the market and make those decisions going forward, but.
Speaker Change: The Cape market is strong and I think you know, who we talk about supply and the supply situation. All the time and it's very much still the case with the low order book I think.
Speaker Change: The the biggest change that we've seen over the last few years is that because of that low supply. When you do have demand incremental demand movements to the upside you immediately see it in in the freight markets and I'm sure. You can sure you can remember back in 2015 and 2016, while we had a oversupply.
Speaker Change: Asian, and Yeah, you could've had massive amounts of new iron ore come in and freight rates would move it's just not the case today, there's a very good supply and demand balance. So when you have incremental movements in our in demand you see it in the freight market.
Speaker Change: Yeah no definitely.
Speaker Change: Great well, thanks, Don is very very helpful context, although I'll turn it over.
Speaker Change: We'll take our next question from Liam Burke with B Riley. Please go ahead.
Liam Dalton Burke: Good morning, John Good morning, Peter Good.
Liam Dalton Burke: Good morning Liam.
Liam Dalton Burke: John you balanced the barbell.
Liam Dalton Burke: Our strategy on the fleet.
Liam Dalton Burke: He's looking to.
Liam Dalton Burke: Managed to the your assets with asset values. So high what does it look like for your ability to add more vessels.
John: So I kind of look at it in terms, maybe three three buckets you know from a fleet renewal standpoint, we're going to continue to do that we're going to continue to dispose of our older ships and redeploy that capital into newer more fuel efficient assets, which obviously increase our.
Liam Dalton Burke: Our potential earnings power and potential dividend payouts.
Liam Dalton Burke: When you look at just buying vessels for cash. These days I I do think values are in the 90 percentile, which is which is great. But obviously there is an elevated level of risk it at buying at those levels.
Liam Dalton Burke: I am hopeful optimistic that our that our equity will continue to you know really close the gap on NAV I mean, we're we're pretty close now so that you can then.
Liam Dalton Burke: Now start using if the if for that for the proper deal you can use your your equity as currency and I think that that will make sense, if you're if you're if you're buying assets in this market.
Liam Dalton Burke: Are those who say the three ways I look at it.
Speaker Change: Great Thanks, John and on the Capesize.
Speaker Change: <unk> charters you have with the index you really.
Speaker Change: Over earning on those assets do.
Speaker Change: Do you see more opportunities to time charter capesize or is there any thought where you can do some longer term charters on your non capesize vessels.
Speaker Change: Look the index deals are obviously, great. We picked we've picked some pretty good spots on on timing when to pull the trigger on the index deals and as you said.
Speaker Change: They are.
Speaker Change: They're earning quite a premium to what to the Dci plus scrubber economics on top of it.
Speaker Change: In terms of fixed rate.
Speaker Change: I talked about the Liberty earlier on the call we will from time to time as this market.
Speaker Change: Genco doesn't have scheduled amortization, but you have been regularly paying down almost $9 million until this year when repayments that stepped up.
Speaker Change: So my question is how are you thinking about voluntary repayments going forward, especially now that the debt per vessel is so low.
Speaker Change: Thanks for that.
Speaker Change: The vessel is under $3 million per ship, which is pretty remarkable when you think of where scrap value is.
Speaker Change: In that sense and also who are the vessel values are as well. So it's a very low leverage situation as you alluded to in terms of in terms of our debt our voluntary debt repayments because we don't have any scheduled debt amortization until facility maturity in 2028.
Speaker Change: With a full rcs structure that we have currently we're really managing our debt balance to save interest expense and essentially reduce our breakeven and increase our dividend capacity. So.
Speaker Change: We're really focused on paying down whatever whatever debt, we do have but we did sell $65 million worth of ships. This year to date. So we took that cash and pay down the rcs, knowing full well that if we do need it we can we can redraw. So on a go forward basis, it's still that.
Speaker Change: $8 $75 million target $35 million for the year.
Speaker Change: Actively manage it with the Rcs structure, knowing that we won't lose our borrowing capacity.
Speaker Change: I would add that.
Speaker Change: That $8 75, as part of the overall reserve, which which includes paying.
Speaker Change: Paying down the debt, but also.
Speaker Change: Keeping monies held back for fleet renewal as obviously, it's a in shipping you have depreciating assets.
Speaker Change: But look from from time to time, we'll obviously look at that reserve make sure. It's make sure it's appropriate based on our capital allocation.
Speaker Change: We will continue to look at all avenues within capital allocation and make the right decision that the at the board level.
Speaker Change: But we are we are obviously getting closer to our target of net debt zero. So.
Speaker Change: We're looking at quite a few things these days.
Speaker Change: Thanks, that's really good color.
Speaker Change: And then on fleet management.
Speaker Change: What sort of specs do you look forward the vessels that you might acquire you still three older shifts added to in Q4, but especially given where values have climbed too and I am curious also how numerous of those opportunities in the sale and purchase market.
Speaker Change: So.
Speaker Change: We are solely focused on what I would refer to as eco vessels, which are really in the end of the day 2015 and newer.
Speaker Change: They carry the much more fuel efficient.
Speaker Change: Engine designs.
Speaker Change: That's paramount for Us I would say in the Cape size market.
Speaker Change: Not as easy.
Speaker Change: Ships do not come up for sale as often the deal that we were able to do in in December was.
Speaker Change: A fantastic deal the timing was good but also the ability to get our hands on those those two modern capesize ships.
Speaker Change: Quite a bit easier in the in the <unk> sector, there's just more liquidity more assets available for sale, but.
Speaker Change: Patients pays off as you saw what we did in December so I'm confident that we'll be able to continue the fleet renewal strategy.
Speaker Change: Thank you and once again that is star one on your telephone keypad. If you would like to join the queue. We will move next with Paul Frac with Alliance Global Partners. Please go ahead.
Paul Frac: Your line is open.
Paul Frac: Good morning, John Good morning, Peter sorry about that I don't know.
Paul Frac: Hey.
Paul Frac: You mentioned John on the S&P market, you potentially as your stock moves up closer to NAV.
Paul Frac: So it becomes a.
Speaker Change: And narrow in Quebec, so to speak have you turned any deals down.
Paul Frac: In the past because of your equity value, where the seller who has been looking for equity.
Paul Frac: I don't I wouldn't go so far as to say, we've turned things down it's probably more of.
Paul Frac: We've opted not to do things in a way.
Paul Frac: With equity.
Paul Frac: Clearly issuing equity below NAV. He is is is dilutive and that's not something we're looking to do.
Paul Frac: But yeah as I as I said before at you know where were.
Paul Frac: We're getting a we're getting very close than a V and cautious.
Paul Frac: Cautiously optimistic that that will get there and hopefully above that.
Paul Frac: As the as the value strategy continues and then you have that is as you said you have that our arrow in your quiver in terms of an option to use it as a.
Paul Frac: Hopefully a large piece of the purchase price.
Paul Frac: Okay, Great and then when you look at your forward cover you know really strong on capes little more muted on the ultra and supers.
Speaker Change: Can you give me an idea of sort of how how the rest of the quarter looks I mean, where are you currently booking pace versus the ultras and supers my sense is that the Cape market is down a little bit relative to the first whether you would've been broken in March and April.
Paul Frac: And they hold true supers is up a little bit is that.
Paul Frac: Directionally correct or could you just give me sort of a flavor of how you are.
Paul Frac: Where youre booking right now.
Paul Frac: While spot rates for Capes are now around $29000 a day today right and keeping in mind, we have a we have those index deals right that are earning.
Paul Frac: Significant premiums above at PCI number that I just quoted.
Paul Frac: <unk>.
Paul Frac: I think when you look at.
Paul Frac: When you look at the Atlantic base, and the numbers are a little bit higher.
Paul Frac: And we do tend to break the fleet up a little bit. We do have we do have a couple of ships that are balancing to the Atlantic right now.
Paul Frac: That we have and fix them.
Speaker Change: So I think what you're referring to is you know the market definitely softened up.
Speaker Change: A few weeks ago, but then you know the last two weeks, we've seen strengthening again right. So.
Speaker Change: And I think we're in a pretty good position.
Speaker Change: Few weeks ago, because we just didn't have a lot of ships open.
Speaker Change: Whereas whereas now we have chips that are opening up again and in a in a little bit of a stronger market.
Speaker Change: But it's all relative power I mean, these numbers are all pretty good right now.
Speaker Change: Nope.
Speaker Change: Even the softness that we saw a few weeks ago.
Speaker Change: We were still.
Speaker Change: Very high numbers on Capes and.
Speaker Change: In particular.
Speaker Change: No reason to complain can you talk about the ultra and Super routes, where you sort of squeezed the rest of the quarter, there and where current rates are.
Speaker Change: Well I mean, as I said, the spot rates forgetting any adjustments for scrubbers or.
Speaker Change: Our fuel efficiency of vessels you know the spot rates in the capes are somewhere around 29 spot rates on the ultra Supers are 14 515 today.
Speaker Change:
Speaker Change: It's hard to it's hard to predict what the next 25% of our 35% of fixtures.
Speaker Change: Is going to be but as you also know we're very good that once we get into sort of the low to mid ninety's on a percentage basis of fixing for the quarter, we put out.
Speaker Change: The average fleet right.
Speaker Change: On a TCE basis to give guidance for people for the for that quarter.
Speaker Change: Which which will continue we'll continue to do that.
Speaker Change: Our way through that.
Speaker Change: And then Peter can we just clarifying on two questions on the cost side once a clarification, but I think I heard you say that the annual meeting costs.
Speaker Change: Looks like Google round about $5 5 million next quarter will be excluded from the dividend calculation so that.
Speaker Change: That won't impact your <unk>.
Speaker Change: Dividend payout.
Peter Allen: Yeah, Hi, Poe, that's correct. So for Q2, it would be estimated about $4 5 million and that would be excluded from the dividend calculation Thats correct just like it was in Q1.
Poe: Meaning it will not.
Poe: Meaning it will not take away from the dividend payout potential.
Speaker Change: Understood Sorry Britain down four five.
Speaker Change: And then can you just talk about your cost guidance on page 39.
Speaker Change: In the appendix it looks like Youre running a little bit higher on the opex side and the G&A side.
Speaker Change: Are those just first half.
Speaker Change: And then we should potentially see opex and G&A come down over the second half of the year could you just could be a flavor ban.
Speaker Change: Two cost components.
Speaker Change: Yeah sure so on the Opex side, its more timing related.
Speaker Change: First quarter of this this number is actually not too far off from what our Q Q1 actuals were.
Speaker Change: It is more timing related than anything else, we look to we like to look at this stuff over a 12 month period typically than just three months quarter to quarter on it on the G&A side, a lot of that stuff is front loaded as well and we would anticipate that.
Speaker Change: Not really moving much but.
Speaker Change: There is a frontloaded nature to the G&A side as well.
Speaker Change: Okay, great. Thanks for your time.
Speaker Change: Thank you Paul.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time. This concludes your conference call for today, we thank you for participating and ask you. Please disconnect your lines.
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