Q1 2024 Golden Ocean Group Ltd Earnings Call
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Operator: Good day, and thank you for standing by. Welcome to the first quarter 2024 Golden Ocean Grp Limited Earnings Conference. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 101 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lars Kjellberg. Please go ahead.
Okay.
Good day, and thank you for standing by.
Speaker Change: Welcome to the first quarter 'twenty to 'twenty four Golden Ocean Group Limited earnings Conference call. At this time, all participants are in a listen only mode.
Speaker Change: After the Speakers' presentation there'll be a question and answer session to ask a question. During the session you will need to press star one to one on your telephone you will then hear an automated message advising Johan does rates.
Speaker Change: She was Joe Your question. Please press star one again.
Speaker Change: Advised that today's conference is being recorded I.
Speaker Change: I would now like to hand, the conference over to your Speaker today Lars Christian. Please go ahead.
Peder Carl Gram Simonsen: Good day and welcome to the Golden Ocean Q1 2024 release. My name is Lars Christiaan Svensson, and I'm the CEO of Golden Ocean. Today our CFO, Peder Simonsen, and I will guide you through our Q1 numbers, forward outlook, and activities within the Golden Ocean Group. Here are the highlights for the first quarter of 2023.
Good day and welcome to the Golden Ocean Q1, 2024 release My name is Dr. Tom Simpson and I'm, the CEO of Golden Ocean.
Peder Carl Gram Simonsen: Our adjusted EBDA in the first quarter of 2024 ended up at $114.3 million compared to $123.2 million in Q4 2020. We delivered a net income of $65.4 million and earnings per share of $0.33, compared to a net income of $57.5 million and earnings per share of $0.29 for the fourth quarter of 2020. Our TCE rates for Cape, South, and Panamax vessels were about $27,200 per day and about $15,000 per day
Speaker Change: Our CFO Petter Cmos Benoit will guide you through our Q1 numbers forward outlook and activities within the Golden Ocean groups.
Speaker Change: Yeah, well the highlights for the first quarter of 2024.
Speaker Change: Our adjusted EBITDA in the first quarter of 2024.
Speaker Change: Ended up at $114 3 million compared to $123 2 million in the fourth quarter of 2023.
We delivered a net income of $65 4 million and earnings per share or 33 cents compared to a net income of 57.5 million and earnings per share with 29 for the fourth quarter of 2023.
Speaker Change: Our TCE rates for Capesize, and Panamax vessels for about $27200 per day and about $15000 per day, respectively.
Peder Carl Gram Simonsen: In conclusion, a combined fleet-wide net TC of about $22,600 per day for the core. For Q2, we have secured a net TC of $27,200 per day for 75% of the Cape Size days, and about $14,500 per day for 82% of the Panamax. For Q3, we locked in a net ETC of about $25,200 per day for 24% of the Cape Size days and about $20,500 per day for 41% of the Panama Express.
Speaker Change: Conclusion, the combined fleet wide net T C of about 22000 and $600 per day for the quarter.
Speaker Change: For Q2, we executed a net TCE of $27200 per day for 75% of the Capesize days and about $14500 per day for 82% of the Panamax size.
Speaker Change: For Q3 would be locked in on a TCE of about $25200 per day for 24% of the Capesize days and about $20500 per day for 41% of the Panamax days.
Peder Carl Gram Simonsen: With a strong result in Q1, where we were able to capitalise on our commercial strategy in full, we are pleased to declare a dividend of 30 cents per share for this first quarter of 2020. Peder, we'll now guide you through our numbers in detail. Over to you, Peder. Thank you.
Speaker Change: With a strong result in Q1, but we were able to capitalize on our commercial strategy and four we are pleased to declare a dividend of <unk> 30 per share for this first quarter 2024.
Peder Carl Gram Simonsen: If you move to slide 5, and look at our P&L for the quarter, we achieved strong commercial performance in an unusually healthy freight market for the season. Our CAPES came in at 27,200, and Panamaxis achieved 15 000 TCE rates for the quarter, which resulted in a total fleetwide TCE rate of 22,600, up from 22,000 in Q4 2023. We dried up two ships in Q1, which is the same as in Q4, contributing to approximately 97 days of fire versus 109 days of fire in Q4. We have three ships scheduled for dry dock in Q2-24, of which two vessels have been completed as of now this report.
Speaker Change: Eddie will now guide you through our numbers in detail over to you better.
Speaker Change: Thank you Richardson.
Speaker Change: If we move to slide five.
Eddie: And look at our P&L for the quarter, we achieved strong commercial performance and unusually healthy freight market for the season.
Eddie: Our capes came in at 27200.
Eddie: And Panamaxes achieved 15000 in TCE rates for the quarter, which.
Eddie: Filtered in the total fleet wide TCE rate of 22600 up from 22000 in Q4 2023.
Eddie: We dry docked two ships in Q1, which is the same as in Q4 contributing to approximately 97 days or four versus 109 days off hire in Q4.
Eddie: We have three ships scheduled for dry dock in Q2 24 of <unk>.
Eddie: Two vessels have been completed.
Peder Carl Gram Simonsen: This resulted in net revenues of 196.7 and changed quarter on quarter as stronger TCE performance was offset by fewer vessel days. Looking at our OPEX, we achieved total operating expenses of 62.6 versus 63.4 million in Q4. Running expenses were largely unchanged quarter-on-quarter, and OPEX reclassified from charter hire was 2.4 million, $0.7 million lower than in Q4. OPEX X-Dry Dock was $6,700 per ship per day, which is unchanged from Q4. Looking at our general and administrative expenses, we ended up at $7.4 million, which is up from $4.9 million in Q4. The increase mainly relates to non-recurring personnel expenses.
Eddie: This report.
Eddie: This resulted in net revenues of $196 seven unchanged quarter on quarter, a stronger TCE performance was offset by fewer vessel days.
Eddie: Looking at the Opex, we achieved total operating expenses of <unk>.
Eddie: $62 six versus $63 4 million in Q4 running expenses were largely unchanged quarter on quarter.
Eddie: And opex reclassified from charter hire.
Eddie: It was $2 4 million.
Eddie: 0.7 million lower than in Q4 Opex.
Eddie: Opex extra dry dock was six 6700.
Eddie: Per ship per day, which is unchanged from Q4.
Eddie: Looking at our general and administrative expenses, we ended up at $7 4 million, which is up from $4 9 million in Q4.
Eddie: The increase mainly relates to nonrecurring personnel expenses.
Peder Carl Gram Simonsen: Our daily GNA came in at 819 per ship per day. Net-of-Cost Recharge to Affiliated Companies, and $524 per day when adjusted for non-recurring expenses, in line with the last quarter, or Charter Higher Expense, came in at $7.3 million, slightly up from Q4, with fewer vessel days in our trading portfolio, was offset by profit split payments to our leasing counterpart, SFL Corp. Our net financial expenses were $27.2 million versus $27.3 million in Q4.
Eddie: Our daily G&A came in at $819 per ship per day.
Eddie: Net of cost recharged to affiliated companies.
Eddie: And $524 per day, when adjusted for nonrecurring expenses.
Eddie: In line with last quarter.
Eddie: Our charter hire expense came in at $7 3 million, which was slightly up from Q4 with a fewer vessel days in our trading portfolio was offset by profit split payments to our lithium counterpart SSL Corp.
Eddie: Our net financial expenses were $27 2 million versus $27 3 million in Q4.
Peder Carl Gram Simonsen: On our derivatives and on financial income, we recorded a gain of 7.3 million, which compares to a loss of 5.8 million in Q4. On derivatives, we recorded a gain of $12 million versus a loss of $8.2 million, which is the result of interest rate swaps gains of 9.6 million, which again includes 4.1 million in realized cash gains, and gains on FFA and bunker derivatives of 2.5 million. For results from investments in Associates, we recorded a loss of $4.6 million compared to a $2.7 million gain in Q4.
Eddie: On our derivatives and other financial income we.
Eddie: We recorded a gain of $7 3 million, which compares to a loss of $45 8 million in Q4.
Eddie: On derivatives, we recorded a gain of 12 million versus a loss of $8 2 million.
Eddie: <unk>.
Eddie: It's the result of interest rate swaps gains of $9 6 million.
Eddie: Which again includes $4 1 million in realized cash gains.
Eddie: And gains on FFA and bunker derivatives of $2 5 million.
Eddie: For results from investments and associates, we recorded a loss of $4 6 million compared to a $2 7 million gain in Q4. This relates to our investments in Swiss Marine TFC UFC.
Peder Carl Gram Simonsen: This relates to our investments in Swiss Marine, TFG, and UFC. In sum, we recorded a net profit of $65.4 million, or $0.33 per share, and an adjusted net profit of $58.4, or $0.29 per share, and a dividend of $0.30 declared for the quarter. Moving to slide six, and our cash flow.
Peder Carl Gram Simonsen: We recorded cash flow from operations of 115.8 million, which included 0.6 million in dividends received from associated companies. Cash Flow Use in Investments totaled $12.2 million, which mainly relates to $15.7 million relating to the sale of one Panamax vessel, which was offset by $27 million in installments and costs relating to our Camsomax new building. Cash flow used in financings was $74.9 million. This mainly comprises $35.4 million in scheduled debts and leased repayments, including prepayments relating to the sale of one Panamax vessel. 73.
Eddie: In sum, we recorded a net profit of $65 4 million or 33 per share and adjusted net profit of $58 four or 29 cents per share and the dividend of 30.
Eddie: Take care for the quarter.
Eddie: Moving to slide six.
Eddie: And our cash flow.
Eddie: We recorded cash flow from operations of $115 8 million, which include <unk> 6 million in dividends received from associated companies.
Eddie: Cash flow used in investments.
Eddie: Totaled $12 2 million, which mainly relates to $15 7 million relating to the sale of one panamax vessel, which was offset by $27 million in installments in costs relating to our camps IMAX new buildings.
Eddie: Cash flow used in financings were $74 9 million.
Eddie: This is mainly comprised of sub $35 4 million in scheduled debt and lease payments, including prepayments relating to the sale of one panamax vessel.
Peder Carl Gram Simonsen: $7 million in net proceeds from refinancings announced in the previous quarter, and $50 million in repayment under the revolving credit facility. Lastly, we had a dividend payment of 59.9 million relating to the Q4 results during Q1. Total net increase in cash of $28.8 million. Moving to slide seven, our balance sheets re-recorded cash and cash equivalents of $147.4 million, which includes $2.7 million in restricted cash. In addition, we have 125 million in undrawn available credit lines at quarter end. Debt and finance lease liabilities totalled $1.5 billion at the end of Q1, down by approximately $11 million quarter-on-quarter. Average fleet-wide loan-to-value under the company's debt facilities per quarter-end was 38.3%, and book equity of $1.9 billion led to a ratio of equity to total assets of approximately 55%.
73 point.
Eddie: 7 million in net proceeds from refinancings announced in the previous quarter.
Eddie: $50 million in repayments under the revolving credit facilities.
Eddie: Lastly, we had a dividend payment of $59 9 million relating to the Q4 results.
Eddie: During Q1.
Eddie: Total net increase in cash of 28 8 million.
Eddie: Moving to slide seven.
Eddie: Our balance sheet, we recorded cash and cash equivalents of $147 4 million.
Eddie: Which includes $2 7 million and restricted cash.
Eddie: In addition, we have $125 million and Undrawn and available credit lines at quarter end.
Eddie: Debt and finance lease liabilities totaled $1 5 billion end of Q1 down by approximately 11 million quarter on quarter.
Eddie: Average fleet wide loan to value under the company's debt facilities per quarter end was 38, 3%.
Eddie: And book equity of $1 9 billion.
Eddie: Led to a ratio of equity to total assets of approximately 55%.
Peder Carl Gram Simonsen: With that, I give the word back to Dr. Huston.
Speaker Change: With that I give the word back to the Houston. Thank you Peter.
Peder Carl Gram Simonsen: Thank you, Peder. We will then continue with the market outlook. First up, illustrating the Golden Ocean fleet composition. The solid financial platform Peder just described gives Golden Ocean the ability to tilt the fleet in the spot market when we see a trend we believe in, like we did in Q1. Large volatility and equally great monetary upside still lie in the larger segments, especially in the Cape Size Basin. As the graph illustrates, we're still the only company compared to our peers with meaningful market caps that are significant cap size exposures.
Speaker Change: Then continue with the market outlook first up illustrating the Golden Ocean fleet composition.
The solid financial platform had to just described gives golden ocean the ability to tilted fleet in the spot market. When we see a trend we believe likely down in Q1.
Large volatility an equally great monetary upsides still lives into larger segments, especially in the Capesize space.
Speaker Change: That's a graph illustrates we're still the only company compared to our peers with meaningful market caps that are significant keeps us exposure.
Peder Carl Gram Simonsen: With our dual listing in New York and Oslo and a market cap of around $3 billion, we offer significant liquidity and exposure to what we believe will be the most favorable dry bulk segments in the years to come, Panamax and Capeside. The global capesized trade continued its positive trajectory with almost a 4% increase in Q1, but more interestingly, the trade flows from the Atlantic to the Pacific were up 13% year-on-year, a massive tonne-mile absorption.
Speaker Change: With our dual listing in New York, and also and a market cap of around $3 billion.
Speaker Change: A large liquidity and exposure to what we believe will be the most favorable drybulk segments in the years to come Panamax and Cape sizes.
Speaker Change: The global Capesize trade continued its positive trajectory with almost 4% increase in Q1, but more interestingly the trade flows from the Atlantic to the Pacific were up 30% year on year and massive ton mile absorber.
Peder Carl Gram Simonsen: This was mostly driven by dry Brazil, where we saw an iron ore increase of 15% year-on-year, Colombian coal exports, where we noted a staggering 52% increase year-on-year, and a bauxite trade from West Africa, which reached record high export volumes and close to 10% increase year-on-year. China and India received most of the volumes with an import increase of 8% and 12% year-on-year growth for In addition to the mentioned high seaborne trade volumes, vessel transit through Suez was down 43% in Q1'24 versus Q1'23. The dry Panama Canal produced even fewer transits, with a 73% reduction over the same time.
Speaker Change: This was mostly driven by dry, Brazil, where we saw a nine or increase of 15% year on year Columbian coal exports, where we note that a staggering 52% increase year on year and the bauxite trade from West Africa, which reached record high exports volumes and close to 10% increase year on year.
Speaker Change: China, India received most of the volumes that are an important increase of eight and 12% year on year growth for the first quarter of 2024.
Speaker Change: In addition to dimension high seaborne trade volumes vessel transit through Suez are down 43% in Q1 24 versus Q1 'twenty three the dry Panama Canal produced even fewer transits with 73% reduction over the same time period.
Peder Carl Gram Simonsen: As we look further into iron ore, we note that China increased its iron ore imports by 5% year-on-year in the first quarter. More interestingly, the country has increased its imports from the Atlantic by over 30%, which is mostly handled on capesized vessels and acts as a solid ton-mile contributor, as mentioned previously in the presentation. In 2025, we can also expect the Simonsu iron ore mine in Guinea to start shipping the first of its forecasted 60 million tons of export capacity, which will further strengthen the tonne mile scenario, which we believe will continue to boost the cape size.
Speaker Change: As we look further into the iron ore B note that China increase the iron ore imports at 5% year on year end of first quarter more interesting lead the country has increased its imports from the Atlantic by over 30%, which is mostly handle on Capesize vessels and act as a solid total mile contributor as mentioned previously in the presentation.
Speaker Change: In 2025, we can also expect to Simandou iron ore mining Guinea to start shipping the first of its forecast of 60 million tons export capacity, which will further strengthen the ton mile scenario, which we believe will continue to boost the capesize sector.
Peder Carl Gram Simonsen: I would like to draw your attention to steel production. Although the Chinese steel production inventories remain flat compared to Q123, albeit steel consumption related to the property sector is down, China has had a solid increase in consumption related to infrastructure, plus 4%, the auto industry, plus 6%, and the energy sector has seen a 7% increase so far in 2024. Steel exports from the country are continuing at a high pace, with a 30% increase year-on-year.
Speaker Change: I would like to draw your attention to steel production.
Speaker Change: The Chinese steel production and inventories remained flat compared to Q1 'twenty three will.
Speaker Change: Albeit the steel consumption related to the property sector is down China has had a solid increase in consumption related to infrastructure plus 4% the auto industry, plus 6% and the energy sector has seen a 7% increase so far in 2024.
Speaker Change: The steel exports from the contract continuing at a high pace, but a 30% increase year on year.
Peder Carl Gram Simonsen: Shaking off the inflation ghost, the rest of the world increased its steel production by about 6% and is forecasted to increase at the same pace throughout the year and in 2025. In the previous quarter, we emphasized the capesite sector as the most attractive place to be in the dry space. Based on the last quarter, we're even more convinced about this thesis.
Speaker Change: Shaking off the inflation goes the rest of the world has increased their steel production by about 6% and is forecasted to increase at the same pace throughout the year and in 2025.
Speaker Change: In the previous quarter be emphasized the capesize sector as the most attractive place to be in the dry space based on the last quarter, we're even more convinced about this thesis.
Peder Carl Gram Simonsen: The order book remains at a 30-year low for cape sizes, and to put it in perspective, the additional volumes from the new Simandou mine in Guinea, when fully operational, will be able to absorb the 6% cape size order book on a standalone basis. 30% of the Capesize fleet will hit 20 years of age in 2030 and will either have to be modified to handle environmental regulations or look towards the scrapyards as we enter a new decade.
Speaker Change: The order book remains at a 30 year low for the Cape sizes and to put it in perspective, the additional volumes from new Simandou mine in Guinea, when fully operational will be able to absorb the 6% Capesize order book on a standalone basis.
Speaker Change: 30% of the Capesize fleet will hit 20 years of age in 2030, and the lighter has to be modified to handle the environmental regulations, all look towards the scrap yards as we enter a new decade.
Peder Carl Gram Simonsen: I would like to remind you that the Golden Ocean Fleet has a current average age just north of 7 years. As a last comment on this slide, congestion continues to be low, and the downside has already been priced in to the Cape Side sector. We round off this presentation as we normally do, illustrating the Golden Ocean cash flow potential. The market outlook is positive, and our fleet composition is well-situated to reap the rewards of what we believe will be a solid year for large-sized tribes. We're excited to create further value for our shareholders and to reach new milestones when it comes to yield and fleet optimization as we continue to navigate 2024.
Speaker Change: I would like to remind you that the Golden Ocean fleets has a current average age just north of seven years.
Speaker Change: As a last comment to this slide the congestion continues to be low and the downside has already been priced into the Cape size segment.
Speaker Change: We round off this presentation as we normally do illustrating the golden Ocean cash flow potential.
Speaker Change: The market outlook is positive and our fleet composition is well situated to reap the rewards of what we believe will be a solid year for large sized drybulk.
Speaker Change: We're excited to create further value for our shareholders and to reach new milestones when it comes to yield and fleet optimization as we continue to navigate 2024.
Peder Carl Gram Simonsen: I will now pass the word back to the operator and welcome any questions. Thank you.
Speaker Change: I would now pass the word back to the operator and welcome any questions. Thank you.
Operator: Thank you. As a reminder, to ask any questions, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We will now take our first question. Please stand by. And the first question comes from the line of Sherif Elmaghrabi from BTIG. Please go ahead; your line is now open.
Speaker Change: Thank you.
Speaker Change: Reminder, to ask any questions you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker Change: We will now take our first question please standby.
Speaker Change: Okay.
Speaker Change: And the first question comes from the line of service on the garage from B T I D.
Sherif Ehab Elmaghrabi: Hi, thanks for taking my questions. So first, on the recent flooding in Brazil, is the impact on grain exports there being felt by Panamaxes at all, or is it isolated to smaller vessel classes?
Speaker Change: Please go ahead. Your line is now open.
Speaker Change: Alright, thanks for taking my questions.
Speaker Change: So first on the recent flooding in Brazil is the impact on grain exports. They are being felt by panamaxes at all or is it isolated to smaller vessel classes.
Peder Carl Gram Simonsen: Hey there, thanks for the question. For now, we don't see the massive impact on the Panamaxis from this incident, so it's pretty much business as usual for what we can have.
Speaker Change: Hey, there thanks for the question.
Speaker Change: For now we.
Speaker Change: And don't see the massive impact on the Panamaxes on this on this incident, so it's pretty much business as usual from what we can observe sofa.
Peder Carl Gram Simonsen: Okay, and then any thoughts on chartering in more tonnage to flex the size of the fleet, given current spot market strength ahead of the seasonally stronger part of the year? For example, SFL has a handful of smaller bulkers, I believe, that are trading in the spot market.
Speaker Change: Okay, and then any thoughts on chartering in more tonnage to flex the size of the fleet given current spot market strength ahead of the seasonally stronger part of the year.
Speaker Change: For example, as it felt like a handful of smaller bulk of brokers I believe that are trading spot.
Peder Carl Gram Simonsen: Yes, we always look to optimize the fleet, and sometimes we take time chargers in as well to see the need. We like to first of all see a trend first before we time charge her in, but if we do, it's definitely going to be in the Cape size and the Panamax space, where we believe the strength will lie in the second phase.
Speaker Change: Yes, we always look to optimize the fleet and sometimes we take time charters and as well to see the need we would like to first of all see a trend first before we time charter in but if we do is definitely going to be indicate sized in the panamax space, where we believe the strength of ally in the second half of the year.
Sherif Ehab Elmaghrabi: That's helpful. Thanks for taking the time to answer my question. Thank you.
Speaker Change: Okay. That's helpful. Thanks for taking my questions. Thank you.
Operator: We will now take our next question. Please stand by, and the next question comes from the line of Omar Nokta from Jeffreys. Please go ahead; your line is now open.
Speaker Change: Thank you.
We will now take our next question.
Please standby.
Speaker Change: And the next question comes from the line of on Doctor from Jefferies. Please go ahead. Your line is now open.
Omar Mostafa Nokta: Thank you. I'm Lars Christian and Peder.
Speaker Change: Thank you and I'll ask Christian and better good afternoon, just had.
Peder Carl Gram Simonsen: Good afternoon. I just had a couple questions for you on the broader market, and you provided some good insight and detail in the last part of your presentation. I just wanted to ask kind of from a big picture perspective, what do you think is driving the market right now? We've seen figures for Chinese dough production coming off recently, and yet despite that, the CAPE market has been very strong or resilient. What would you say if you could identify maybe one driving force of the market? Is that something that you can't identify or give any perspective on? Yeah, most definitely.
Speaker Change: A couple of questions for you just on the broader market and you did you provided some good insight and detail.
Speaker Change: The last part of your presentation I just wanted to ask kind of thing.
Speaker Change: Big Picture perspective, what do you think is driving the market right now.
Speaker Change: We've seen figures for Chinese steel production coming off recently and yet despite that the Cape market has been very strong our resilient what would you say.
Speaker Change: If you could identify maybe one driving forces of the market is that something that you can identify or give any.
Peder Carl Gram Simonsen: Yeah, nice to speak to you again, Omar. I think there's [inaudible] So we see an appetite, especially on the cold side, India as being a strong importer still, and the Chinese are preferring, as far as we can observe this year, to import their volumes from Brazil instead of Australia. So it's been a good steady flow, and it takes me a little bit back to last year, where we saw the headlines on macro news from China and the property sector, et cetera, but we see record volumes being shipped every week, and that still continues.
Speaker Change: Perspective on speed.
Omar: To speak to you again, Omar I think Theres two things that we are not going to be able to avoid in this market and that is the Panama Canal Linda Suez Canal.
Omar: In addition to that we have a lot of coal from Colombia, moving the bauxite and iron ore has been flowing very strong and it is.
Omar: Ton mile intensive the only way to find these ships are going to be via the Cape of good hope there is not possible to get them through any cut outs anymore. So we see appetite, especially on the cold side, India as being a strong imports of steel and the Chinese are preferring as far as we can observe this year to import their volumes from Brazil, instead of Australia. So it's been a good steady flow.
And it takes me a little bit back to last year, where we saw the headlines on macro news from from China in the property sector et cetera, but we see record volumes being shipped every every week and that still continues.
Peder Carl Gram Simonsen: Okay, yeah, that's interesting. And you mentioned also, I think, Chinese steel exports being up, you know, 30% year over year in the first quarter. And I think, you know, last year, they were up tremendously as well. Is there, do you think there's a story that could develop for Chinese steel exports? And, you know, assuming that those remain strong and tariffs don't eat into them, is that something that could become a bullish thesis for DRIVEWALK as well? And if it were to be, which segment do you think would be best positioned?
Speaker Change: Okay, Yes.
Speaker Change: And you mentioned also I guess, the Chinese steel exports being up 30% year over year.
Speaker Change: In the first quarter and I think last year Theyre up tremendously as well is there do you think there is a story that could develop for Chinese steel exports.
Speaker Change: So assuming that those remained strong and tariffs don't eat into it.
Speaker Change: Is there.
Speaker Change: Is that something that could become a bullish thesis for dry bulk as well.
Speaker Change: If it were to be that.
Peder Carl Gram Simonsen: Yeah, I know it seems the steel obviously exported from China has been sold for a good period of time, and most of it has been lifted on the smaller sizes, i.e. supermaxes and handy sizes, and that hasn't really been enough to kick that market off properly. But if there are more steel trends coming out of China, we might see more backhaul cargoes on the panamaxes as well, which could be interesting for
Speaker Change: But what segment do you think would be best positioned yes.
Speaker Change: Yes.
Speaker Change: It seems the steel obviously export from China has been sold in over a good period of time and most of it has been lifted on the smaller sizes I assume <unk> and handy size and that Hasnt really been enough.
Speaker Change: To kick that market properly.
Speaker Change: But if theres more steel trends coming out of China, we might see more backhaul cargoes on the panamaxes as well, which can be interesting for the steel business.
Peder Carl Gram Simonsen: yeah okay and maybe just one final one for me and as you mentioned you positioned nicely with with the focus on the on the capes and you have the panamaxes but generally you're very top-heavy and positioned to take advantage of this tight market for the larger vessel you on your slide 13 you you discussed the order book where capes continue to be even though it's the the one market that is shining for the past say six to nine months it has the lowest orderable percentage you know given that how are you thinking about new buildings from here I know your Sharif was just asking about chartering in ships to flex the fleet how about in general just in terms of adding new capacity do you feel the need or is there an opportunity you think to to go into the new building market and take advantage of the low side
Speaker Change: Yes, okay.
Speaker Change: Maybe just one final one for me and as you mentioned.
Speaker Change: Positioned nicely with with a focus on the capes and Panamaxes that generally your very top heavy and positioned to take advantage of this tight market for the larger vessel you on your slide 13, you can you discuss the order book, where capes continued to be even though it's the one market that is shining for the past say, 6%.
Speaker Change: Nine months it has the lowest order book percentage given that.
Speaker Change: How are you thinking about.
Speaker Change: New buildings from here I know Youre, Sri I was just asking about chartering in ships to flex the fleet how about in general just in terms of adding new capacity do you feel the need.
Speaker Change: Or is there an opportunity.
Speaker Change: To go into the new building market and take advantage of the low side.
Peder Carl Gram Simonsen: Over the last three years, Omar, we've been quite active in acquiring tonnage to be ready for this cycle and the demand tightness that we see now. The last deal done on the Newcastle Max was $73 million, and we bought six of those sisters for $50 million last year. So for us, we don't have to do anything at the moment. We're quite happy with the position that we have, but we will obviously always look for accretive deals for the fleet, and we have the balance sheet to lift. Yeah,
Speaker Change: Over the last three years, so far we've been quite active on on acquiring tonnage to to be ready for this cycle and in demand tightness that we see now.
Speaker Change: The last done on the new costs in Mexico, $73 million and be bold six of those sisters for $50 million.
Speaker Change: Last year, so for US we don't have to do anything at the moment, we are quite happy with the position that we have but we will obviously always look for accretive deals to that to the fleet and we have the balance sheet too there as well.
Omar Mostafa Nokta: Yeah, yeah, no, that makes sense. I appreciate that. That's it for me. Thank you. Thanks, Omar. Thank you. As a reminder, to ask a question, you will need...
Speaker Change: Yes, yes, no that makes sense I appreciate that.
Speaker Change: That's it for me. Thank you thanks Omar.
Operator: As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. As there are no further questions, I would now like to conclude this conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.
Omar Mostafa Nokta: Thank you.
Speaker Change: As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker Change: As there are no further questions I would now like to conclude this conference call. Thank you for participating you may now disconnect speakers. Please standby.
Speaker Change: Okay.
Speaker Change: [music].