Q1 2024 Diana Shipping Inc Earnings Call
All of the formal presentation.
Speaker Change: [music], many places, especially in queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded we sound like we're going to turn the call over to Ed <unk> Investor Relations. Please go ahead.
Speaker Change: Thank you, Kevin and thanks to everyone, who is joining us for the Diana Shipping Inc. 2024, first quarter conference call, leading the call today is semiramis, Paula you Chief Executive Officer, and she will now introduce the other members of the management team. So I will turn the call over to Ms. Pauli.
Ed: Thank you Ed.
Operator: will follow the formal presentation. You may be placed into the question queue at any time by pressing star 1 on your telephone keypad.
Speaker Change: Good morning, ladies and gentlemen, and welcome to Diana Shipping Inc. First quarter 2020 for financial results Conference call as I said I am sending them as part of the C O. The company and it's my pleasure to present alongside RSP team. Mr. Stacy My head on this director and President.
Operator: As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Ed Nebb, Investor Relations. Please go ahead, Ed. Thank you, Kevin, and
Edward Nebb: Thank you, Kevin, and thanks to everyone who is joining us for the Diana Shipping Inc. 2024 first quarter conference call. Leading the call today is Semiramis Paliou, Chief Executive Officer, and she will now introduce the other members of the management team. So I will turn the call over to Ms. Paliou.
Semiramis Paliou: Good morning, ladies and gentlemen, and welcome to Diana Shipping Inc.'s first quarter 2024 financial results conference call. As I said, I am Semiramis Paliou, the CEO of the company, and it's my pleasure to present, alongside our esteemed team, Mrs. Stacy Margaronis, Director and President, Mr. Ioannis Zafirakis, Director, CFO, and Chief Strategy Officer, Mr. Lefteris Papatriffon, Director, and Ms. Maria Dede, Chief Accounting Officer.
Speaker Change: MS City honest Iraqi director, CFO, and Chief Strategy Officer, Mr. Let's say just stop at today's one director and MS Maria that Chief Accounting Officer.
Semiramis Paliou: Before we begin, I'd like to remind everyone to review the forward-looking statements on page 4 of the accompanying presentation. The first quarter of 2024 started unusually strong, with Cape Size earnings being the highest in 14 years and pulling along the other sectors. Even though the markets have softened since, the sentiment is still strong for the balance of the year.
Speaker Change: Before we begin I'd like to remind everyone to review the forward looking statements on page four of the accompanying presentation.
The first quarter of 2024 started unusually strong with Capesize earnings being the highest in 14 years and pulling along with the other sectors.
Speaker Change: Even though the market has softened since the sentiment is still strong for the balance of the year.
Semiramis Paliou: In the context of this announcement, we will pay a cash dividend for the first quarter of 2024 of 75 cents per common share. Turning to slide 5, I will review with you the company snapshot as of today. Our fleet comprises 39 dry bulk vessels in the water, with a total dead weight of approximately 4.4 million tons. The company is also expecting to take delivery of two methanol-duo-fuel new-building CamperMax drive-out vessels. Our fleet utilization has remained consistently high, reaching 99.1% for the first quarter of 2024, attributed to our prudent and efficient management of our vessels. Additionally, as of the end of March, we employed 993 people at sea and ashore.
Speaker Change: And this background, we announced a cash dividend for the first quarter of 2020 for all 75 cents per call.
Speaker Change: Sure.
Speaker Change: Turning to slide five I will review with you the company's snapshot as of today.
Speaker Change: Our fleet comprises of 39 dry bulk vessels in the water with a total deadweight of approximately $4 4 million tonnes.
Speaker Change: The company is also expecting to take delivery of two methanol dual fuel new building <unk> dry bulk vessels.
Speaker Change: Our fleet utilization has remained consistently high reaching 99, 1% for the first quarter of 2024.
Speaker Change: Committed to a prudent and efficient management of our vessels.
Speaker Change: Additionally, as of the end of March we employed a 993 people, let's see the floor.
Semiramis Paliou: Moving on to slide 6, let's go over the key highlights for the first quarter and recent developments. In February 2024, the company executed the contract for the acquisition of two 81,200 deadweight methanol-dual-fuel, new-building Camp Thermax dry-bulk vessels, built at Trinesi Group, for a purchase price of US$46 million each. These vessels are expected to be delivered to the company in the second half of 2027 and the first half of 2028, respectively. We take pride in our role as an industry leader, continually striving to enhance our fleet and operations for the benefit of our stakeholders and the environment.
Speaker Change: Moving on to slide six let's go over the key highlights for the first quarter and recent developments.
Speaker Change: In February 2020 for the company executed a contract for the acquisition of 281200 deadweight methanol dual fuel new building <unk> dry bulk vessels built at two nights ago for a purchase price of $46 million each.
Speaker Change: These vessels are expected to be delivered to the company in the second half of 2027, and the first half of 2028, respectively.
We take pride in our role as an industry leader.
Speaker Change: Continually striving to enhance our fleet and operations for the benefit of all stakeholders and the environment.
Semiramis Paliou: In addition, the joint venture entity, Windward Offshore, increased its investment from two to four high-spec commissioning service operation vessels, DSOVs, to be built at Vard Yard as a result of exercising its option to construct two additional vessels. The continued participation in this venture is another reflection of the company's commitment to a greener and more sustainable shipping industry. These investments also underscore our focus on seeking new opportunities for the company and our shareholders that may arise from the transition to new energy solutions. Furthermore, continuing the renewal and modernization of our fleet, one vessel has been sold to an affiliate third party. Motor Vessel Houston was sold at a net sale price of approximately 23.3 million U.S. dollars.
Speaker Change: In addition, the joint venture entity Windhorst offshore increase its investment from two to four high spec commissioning service operation vessel the Suvs.
Speaker Change: He built the bard yards as a result of exercising its option to construct two additional vessels.
Speaker Change: The continued participation in this venture is another reflection of the company's commitment to a greener and more sustainable shipping industry.
Speaker Change: These investments also underscore our focus on seeking new opportunities for the company and our shareholders that may arise from the transition to new energy solutions.
Speaker Change: Furthermore, continuing during you on and modernization of our fleet. One vessel has been sold to an affiliate of third party.
Speaker Change: Motor vessel Houston was sold at a net sale price of approximately $23 3 million U S dollars.
Semiramis Paliou: In December 2023, we completed the pro-rata distribution of warrants to holders of the company's common stock, of which, as of May 20, $3,284,000, 1372 were exercised. The warrant distribution provided us with an opportunity to raise equity in a non-diluted manner for our existing shareholders. As of May 2024, the company has secured revenue for 66% of the remaining ownership days of the year 2024, amounting to approximately 96.8 million US dollars in contracted revenue.
Speaker Change: In December 2023, we completed the pro rata distribution of Warren to holders of the company's common stock of which as of May 20.
Speaker Change: <unk> 3.284 million.
Speaker Change: Mm 372 were exercised the warrants distribution provided us with an opportunity to raise equity in a non diluted manner for our existing shareholders.
Speaker Change: As of May 2024, the company has secured the revenue for 66% of the remaining ownership days of the year 2024 amounting to approximately $96 8 million U S dollars of contracted revenues. Additionally, the company has secured approximately 40.
Semiramis Paliou: Additionally, the company has secured approximately US$48.8 million of contracted revenues for the year 2025, representing 18% of the available ownership dates for the entire year. Ioannis will provide a more detailed analysis of our cash flow generation potential based on the current market environment further on. As mentioned earlier, we are pleased to declare a quarterly cash dividend of 7.5 cents per common share, totaling approximately 9.1 million U.S. dollars. Finally, we are happy to share that our company has been honored with the Gold Environmental Leader Award and Gold Diversity, Equity, and Inclusion Leader Award at the 2024 ESG Shipping Awards International.
Speaker Change: $8 8 million U S dollars of contracted revenues for the year 2025, representing 18% of the available ownership days for the entire year.
Speaker Change: Yeah, and this will provide a more detailed analysis of our cash flow generation potential based on the current market environment further.
Speaker Change: As a man as mentioned earlier, we are pleased to declare a quarterly cash dividend of $7.05 per common share totaling approximately $9 1 million U S dollars.
Finally, we are happy to share that our company has been honored with a goal of environmental leader Award and gold diversity equity and inclusion leader award at the 2020 for ESG Shipping Awards internationally.
Semiramis Paliou: Moving on to slide 7, let's review a summary of our recent chartering activities. We have continued to implement our disciplined chartering strategy by securing profitable-time charters for four vessels since our last earnings presentation in February 2024. To provide some detail, we have chartered one Ultramax vessel with a weighted average daily rate of US$16,500 for an average period of 452 days. Additionally, two Panamax vessels have been chartered at a weighted average daily rate of $14,573 per day for an average period of 472 days, and one Cape-sized vessel has been chartered with an average daily rate of $27,150 and a remaining average period of 543
Speaker Change: Moving on to slide seven let's review a summary of our recent chartering activity.
Speaker Change: So we have continued to implement our disciplined chartering strategy by securing profitable time charters for four vessels since our last earnings presentation in February 2024 to.
Speaker Change: To provide some detail we have chartered the one panamax vessel with a weighted average daily rate of $16500 for an average period of 452 days.
Speaker Change: Additionally, two panamax vessels have been chartered at a weighted average daily rate of $14573 per day for an average period of 472 days.
Speaker Change: And one capesize vessels have been chartered with an average daily rate of 27150 U S donors and the remaining average period of 543 days.
Speaker Change: Okay.
Semiramis Paliou: Friday illustrates our commitment to strategically charter our vessels in a staggered manner. Our emphasis is on securing positive free cash flows through our disciplined employment strategy and positioning ourselves in a balanced way to participate in the market efficiently. I will now pass the floor to Ioannis to provide a more detailed analysis of our financials.
Speaker Change: Slide eight.
Speaker Change: Hey, listen straights or commitments to strategically chartering our vessels in a staggered manner.
Speaker Change: Our emphasis is on the security and positive free cash flow through our disciplined employment strategy and positioning ourselves in a balanced way to participate in the market efficiently.
Speaker Change: I will now pass the floor to guy needs to provide a more detailed analysis for our financials.
Ioannis G. Zafirakis: Thank you, Semiramis, and... As you can see in this simplified slide, simplified from the previous one, the time charter revenues for the first quarter of 2024 were in the vicinity of $58 million, compared to 52.5 and 52.6 in the same quarter the previous year. The Aurebida also was at 27.8 million compared to 45.9, and the net income stood at $2.1 million compared to $22 million in the first quarter of 2023. This is why the earnings per common share on a diluted basis are at 0.1 compared to the same quarter last year.
Thank you.
Speaker Change: Hum.
Speaker Change: As you can see in this simplified slide.
Speaker Change: <unk> five point from the previous one.
Speaker Change: The time charter revenues for the first quarter of 2020 for the word in the vicinity of $58 million.
Speaker Change: Compared to 52.5 0.6 are in the same quarter previous year.
Speaker Change: B, our EBITDA also rose at a 27 8 million compared to $45 nine.
Speaker Change: And then net income.
Speaker Change: Stood at $2.1 million compared to $22 million of the first quarter of 2023.
Speaker Change: This is why the added hormones are on a diluted basis.
Speaker Change: Zero one.
Speaker Change: DRAM center compared to 22 cents.
Speaker Change: In the same quarter last year.
Ioannis G. Zafirakis: However, the cash position of our company, together with the restricted cash, is at $160 billion, and the long-term debt and finance liabilities are at $628 million compared to $642 in the same quarter of the previous year. Looking at the summary of the selected financial and other data, I think what we should look at is that the number of vessels has decreased to 39, and Shevan V. Avedis from 41.5. And the same applies for the ownership days, which is slightly lower than the previous same quarter last year.
Speaker Change: However, the cash position of our company.
Speaker Change: Together with the sleep discuss these other countries.
Speaker Change: Yeah.
Speaker Change: And the long term Oh that then fine us liability sees that she founded in 2018, we Didnt go to <unk>.
Speaker Change: Third to 642.
Speaker Change: At the same quarter previous year.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Oh.
Speaker Change: Somebody else I say, let's define us in another data I think what we should look at is that the number of vessels has decreased to 39.
Speaker Change: 70 of it is from 41 five.
Speaker Change: And the same applies for the ownership days, which.
Speaker Change: Which is a slightly lower then.
Speaker Change: But at the.
Speaker Change: In the same quarter last year.
Ioannis G. Zafirakis: So, our time charter equivalent is at $15,000 approximately, compared to $18.5 million for the same period of the previous year. Daily operating expenses are at 5,800 approximately compared to 5,400. This is a particular trend for this quarter; we do not expect it to continue for the other quarters and the other is for the year, so this is going to be... The other slide, which has the amortization profile and the balance profile of our debt, you can see clearly that the company has managed very well its facilities and we have no maturities for the remaining of 2024, the entire 2025, and we have a bond maturing in 2026 only, and Very well balanced and controlled.
Speaker Change: And so our time charter equivalent.
Is that a $15000 approximately compared to 18.5.
Speaker Change: At the same cost.
The previous year.
Speaker Change: Really your operating expenses.
Speaker Change: Thank you.
Speaker Change: <unk> 5800, approximately compared to 5400.
Speaker Change: This is a particular credit for this quarter, we do not expect to continue.
Speaker Change: Other quarters and the other is for the Oh This is gonna be.
Speaker Change: No.
Speaker Change: If we move to <unk>.
The other slides, which caused the amortization profile and the balanced profile of our debt you can see.
Speaker Change: Clearly the company has managed very well there.
Speaker Change: Facilities, and we have no maturities for the remaining of 2020 for the entire 2025 and we have the bone.
Maturing in 2026 only.
Speaker Change: And.
Speaker Change: The violence profile at the bottom you can see how well positioned.
Speaker Change: Position the company. He says they got the remaining amount of debt.
Speaker Change: Going forward.
Speaker Change: Very well balanced and controlled.
Anastasios C. Margaronis: The break even... Based on the existing FFAs, this can be close to $14 million. [inaudible] A leeway on a per day basis for 2025, close to $1,000. Of course, all of these are based on the current FFA care, something that we keep forgetting to mention to our shareholders is how well we did as regards the dividends that we paid since the third quarter of 2021.
Speaker Change: Okay.
Speaker Change: The breakeven.
Speaker Change: I'd hate to watch you can see that there is.
Speaker Change: The ability of the company.
Speaker Change: Unfixed days that we have.
Speaker Change: To improve.
Speaker Change: Or are they venues and ended up.
Speaker Change: With.
Speaker Change: $4 million above our breakeven.
Speaker Change: For the remaining of 2024.
Speaker Change: And for 2025 based on the existing Ffa's are these can be close to $14 million.
Speaker Change: Their needs are.
Speaker Change: They leeway on a per day basis for 2025 close to a thousand dollar of course all of these are based on the cotton.
Hey, Curt.
Speaker Change: It's something that.
Speaker Change: We need to point out something that we keep forgetting Masco, Inc to all shareholders.
Speaker Change: How well we'd need as regards with the dividends that we paid it seems the third quarter of 2021.
Speaker Change: We have managed to pay around two point.
Speaker Change: Five six.
Speaker Change: This per share either.
Speaker Change: Gosh, a dividend or a dividend in kind.
Speaker Change: Of course.
Speaker Change:
Speaker Change: Zero point.
Speaker Change: Seven 0.075 that we are facing now.
Speaker Change: A continuation of that.
Speaker Change: Particular poorly.
Anastasios C. Margaronis: We have managed to pay around $2.56 per share, either as a cash dividend or dividend in kind. Of course. The 0.075 that we are paying now is a continuation of that particular policy. Now, we pass the floor to Stelios Margaronis for... (inaudible)
Speaker Change: We thought that would pass the floor to space them out not only for.
Speaker Change: I bought it.
Speaker Change: Capital.
Speaker Change: Stacey.
Jackie: Thank you Jackie.
Anastasios C. Margaronis: A warm welcome to the participants of this quarterly learning school of our company. If we cast our sights back to the beginning of the year, the bulk carrier market has so far been strong compared to 2023 and its 10-year earnings average. Laxman's average bulk sector earnings were $15,500 per day from January through the end of April, and above were $17,500 a day by mid-May. The main factors supporting this trend were, firstly, demand growth in the Atlantic for cargo such as iron ore from Brazil and bauxite from Guinea.
Speaker Change: A warm welcome to the participants of this quarterly earnings call of our company.
If we cast our ties back to the beginning of the year. The bulk carrier market has so far being strong compared to 2023 and 10 year round the.
Speaker Change: The Clarksons average bulk sector earnings we're exceeding the 5000 per day from January through the end of April and about 17, and a half thousand dollars a day by mid May.
Anastasios C. Margaronis: Secondly, the Red Sea disruption, which increased the ton-mile demand through alternative routing, about 0.7% for cape sizes and 2.9% for camshare maxes and smaller. Thirdly, the Panama Canal restrictions due to low water levels have again increased 10 miles. We increase demand for shipments of bulk commodities to India and China. Related in some cases, contributing to the above-mentioned factors were the following events.
Speaker Change: The main factors supporting this trend, where firstly demand growth thing the Atlantic for carpet catch up iron ore from Brazil, and bauxite from gaming.
Speaker Change: Secondly, the rest of the year disruption, which increase the ton mile demand to alternative routing.
Speaker Change: 70% for Cape sizes, and two 9% for cancer Max's and smaller.
Speaker Change: Currently the Panama Canal restrictions due to low water level ever getting increased ton miles.
Speaker Change: To meet increased demand for shipman well.
Commodities to India and China.
Speaker Change: Related in some cases contributing to the above mentioned factors were the following events between it.
Anastasios C. Margaronis: We saw a return of growth in steel production outside China, a return of growth in global grain trade, and finally China's contraction of domestic coal production. Government decisions also influence rates in less direct ways.
Speaker Change: Return of growth of our steel production outside China.
Speaker Change: The return of growth in global grain trade.
Speaker Change: And finally, China contraction of domestic coal production.
Speaker Change: Government decisions also influence rates and less directly. An example is the recent announcements that the Chinese government, we spent $42 billion to buy us on calls and remarkable decision impossible to imagine happening outside China.
Anastasios C. Margaronis: An example is the recent announcement that the Chinese government will spend $42 billion to buy and sell homes. A remarkable decision, impossible to imagine happening outside China, which will have a profound effect on the absorption of the huge surplus of residences remaining unsold following the building boom of a few years ago. In this short presentation, we will try to establish which of the above factors will continue supporting the bulk market, which might drop out, and which new ones might emerge due to seasonal and other factors.
It will have a profound effect and the absorption of the huge a surplus of residences remaining in so Paulo in the building boom of a few years ago.
Speaker Change: In the short presentation, we will try to establish switch of the above factors will continue supporting the bulk market, which might drop out and which new ones my marriage due to seasonal and other factors.
Anastasios C. Margaronis: The Panama Canal restriction is the most likely factor to drop out of the lift over the short to medium term, while the Red Sea disruption remains a wild card. Meanwhile, continuous demand for bulk commodities from China and India will depend on factors that we will mention later on. Looking quickly at macroeconomic factors, GDP growth forecasts for major economies have not changed much since our last report. According to the April 24th forecast by the I.M.S., World GDP is expected to grow by 3.2% this year and by 4.1% in 2025, China by 4.6% this year and 4.1% in 2025, India by 6.8% this year and 6.5% next year, and the U.S. by 2.7% this year and 1.9% in 2025. The eurozone is expected to grow by just 0.8% this year and by 1.5% in 2025.
Speaker Change: The Panama Canal restrictions as the most likely factor to drop out of the lift over the short to medium term, while the red Sea disruption remains a wildcard.
Speaker Change: While continued demand for bulk commodities from China, and India will depend on factors. We mentioned later on.
Speaker Change: Looking quickly at macro economic factors.
Speaker Change: GDP growth forecast of a major economies have not changed much since our last report.
Speaker Change: According to the April 2012.
Speaker Change: The April 24, I think apart from the forecast over the Iron man.
Speaker Change: World GDP is expected to grow by three 2% this year and in 2025.
Speaker Change: Right.
With China growing by four 6% this year and four 1% in 2025, India by six 8% this year and six and a half next year in the U S. By two 7% this year and one 9% in 2025.
Speaker Change: The Euro area is expected to grow by just <unk>, 8% this year and by one half percent in 2025.
Anastasios C. Margaronis: Let's look at demand now. It is encouraging to note that, according to Commodore Research, year-on-year steel production outside China remains strong this year and is expected to continue showing strength as GDP growth increases. Global steel production last year was just under 1.9 billion tons, up 0.1%, while Chinese steel production shrank by about 1% during that period. However, strong manufacturing output in China has continued to contribute to significant steel consumption to help counter weakness in demand from the construction industry.
Speaker Change: Let's look at demand now.
Speaker Change: Encouraging to note that according to <unk>.
Speaker Change: Commodore research year on year steel production outside China remained strong for this year and is expected to continue showing strength of GDP growth increase.
Speaker Change: Global steel production last year was just under $1 9 billion tons up.
Speaker Change: Five 1% Chinese steel production shrank by about 1% during that period.
Speaker Change: Strong manufacturing output in China has continued to contribute to significant steel consumption to help counter weakness in demand from the construction industry.
Anastasios C. Margaronis: The iron ore trade is expected to increase this year by 1% and remain stable in 2025. Brazilian exports are expected to grow by 5% this year and reach nearly 400 million tons, while Australian exports are expected to remain flat. Coal exports, both coking and steaming coal combined, are expected to show very small increases with China, India, Indonesia, Europe, and Australia each having their effect on total shipments, which are expected to reach about 1.3 billion metric tons.
Speaker Change: The iron ore trade is expected to increase this year by 1% to remain stable in 2025.
Speaker Change: Brazilian exports are expected to grow by 5% this year and reached nearly 400 million tons and Australian exports are expected to remain flat.
Coal exports, both coking Internet steaming coal combined are expected to show a very small increases with China, India, Indonesia, Europe, and Australia, each having their effect on the total shipments which are expected to reach about one 3 billion metric tons.
Anastasios C. Margaronis: Chinese demand will slow down, and European demand will continue to decline. In China, hydropower production is starting to increase rapidly, and at the same time, China's coal-derived electricity generation growth has continued to exceed domestic coal output growth. India is expected to import record volumes of coal as electricity demand is once again outpacing domestic coal production growth. Grain exports are expected to grow by 3% this year and the next, reaching about 559 million metric tons during the next grain season.
Chinese demand slowdown in European demand will continue to decline.
Speaker Change: In China hydropower production is starting to increase traffic and that's the same time China's coal derived electricity generation growth has continued to exceed domestic coal output.
India is expected to import record volumes of coal or electricity demand is once again outpacing domestic coal production growth.
Speaker Change: Grain exports are expected to grow by 3% to hear nginx, reaching about 559 million metric tons. During the next great piece.
Anastasios C. Margaronis: Soybeans from the U.S. and China will be negatively affected due to better-priced products from Argentina and Brazil. Minor bulk trades are expected to grow by 4% here and 3% in 2025, reaching 2,284 million metric tons. As we know well, this grade is highly correlated to global GDP growth.
Speaker Change: Soybeans from the U S. China will be negatively affected due to better price product from Argentina and Brazil.
Speaker Change: Minor bulk trades are expected to grow by 4% this year and 3% in 2025, reaching at 2280 4 million metric tons.
Speaker Change: As we know well this trade is highly correlated to global GDP growth.
Anastasios C. Margaronis: Bauxite and other metals such as nickel, manganese ore, and scrap are expected to play a major role in supporting the increased trade going forward. Their shipments are expected to increase by 6% this year and by 4% in 2025. Soy meal, rice, and fertilizers are expected to show strong volume gains as well.
Speaker Change: Bauxite another message such as nickel manganese ore scrap I would expect it to play a major role in supporting the increased trade going forward.
Speaker Change: Their shipments are expected to increase by 6% this year and by 4% in 2025.
Speaker Change: So I mean, its rights and fertilizers that are expected to show strong volume gains as well.
Anastasios C. Margaronis: Most of the above-mentioned commodities are shipped in Ultramax taxis, such as those in our fleet. Turning to the supply side, according to Classroom, the new building order book remains low at around 9.3% of the existing fleet. In the Cape sector, the ships on order are about 6.2% of the existing fleet. For Panama-Capture maxes, it stands at 12.6%, and for handy maxes, around 11%.
Speaker Change: Most of the above mentioned commodities are shifting nuclear Max facts, such as those in our fleet.
Speaker Change: Turning to the supply side.
Speaker Change: According to Clarksons, the new building order book remains low at around nine 3% of the existing fleet indicate sector of the ships on order are about six 2% of the existing fleet for Panamax capture Max as it stands at 12, 6% and for <unk> around that.
Anastasios C. Margaronis: New building contracting of bulk carriers this year is about 130 vessels, according to Glasserson, which is 44% fewer than at this time last year. Considering expected deletions and additions to the fleet, the Cape fleet should increase by 1.5% this year and by only 1% in 2025. The Panamax and Camtramax fleet is expected to grow by 3.5% this year and by 3% in 2025. The equivalent numbers for HandiMaxxers are 4% for 2024 and 3.3% for 2025.
New building contracting of bulk carriers. This year is about a 130 vessels according to Clarkson, which is 44% fewer.
Speaker Change: At this time last year.
Speaker Change: Considering expected deletions. In addition to the fleet the Cape Fleet should increase by one 5% this year and by only 1% in 2025.
Speaker Change: Panamax and capture Max fleet is expected to grow by three 5% this year.
Speaker Change: By 3% in 2025.
Speaker Change: The equivalent numbers for anti Max's are 4% for 24 and three 3% for 2025.
Anastasios C. Margaronis: Looking to the end of this year, demand for bulk iron is expected to be 3.6% higher than in 2023, and supply of bulkers is expected to be 3% higher than last year. Examine the fleet's age structure. Looking at the age of the bulk area, at least 25% of handi-maxers are 15 years or older, while for panamaxers this percentage goes to 27%, and for capes it is 16%.
Speaker Change: Looking to the end of this year demand for bulk carriers is expected to be three 6% higher than in 2023 and supplier fuddruckers is expected to be 3% higher.
Speaker Change: Okay.
Speaker Change: Look at the fleet age is structure.
Speaker Change: Looking at the age of the bulk carrier fleet.
Speaker Change: 5% of <unk> 15 years or older one for Panamaxes. This percentage goes to 27% and four case it is 16%.
Anastasios C. Margaronis: Any weakness in earnings going forward will most certainly lead a number of these aging ships to the scrapyard. Looking at the age structure of the fleet, it is interesting to keep in mind that a significant number of large bulk carriers will become 15 years old in 2026 and will face their third special survey. Their future will depend greatly on their condition and how environmentally friendly they can become with retrofits and other interventions.
Speaker Change: Any weakness in earnings going forward will most certainly Lee and number of these 18 ships.
Speaker Change: Scrap yard.
Speaker Change: Looking at the structure of the fleet. It is interesting to keep in mind that a significant number of large bulk carriers will become 15 years old in 2026 and face their third special survey.
Speaker Change: The future will much depend on their condition and contractor mentally frankly, they can become with retrofitting another intervention.
Anastasios C. Margaronis: Undoubtedly another pool for potential scrap candidates, depending on the prevailing market conditions. About 25% of the battle fleet capacity is estimated to have a D or E rating for CII as of the end of 2023. So, as mentioned earlier, slower operation, and increased ESP retrofitting.
Speaker Change: And definitely another pool for potential scrap candidates, depending from that prevailing market conditions.
Speaker Change: About 25% of the bus fleet capacity are estimated to have a D. R E racing.
Speaker Change: For Ci Ty as of the end of 2023.
Speaker Change: So as mentioned earlier slower operating speeds increased ESP retrofit.
Anastasios C. Margaronis: Some demolition of the older units and increasingly confused markets are factors that will influence the freight market going forward. Turning to demolition, according to Craptions, 5.4 million deadweight workers were scrapped in 2023, and so far, 1.5 million deadweights have been scrapped this year, which is on par with last year. For 2025, this is expected to increase to about 7 million deadweight tons. This year, about 1.8 million deadweight tons of cape-sized vessels are expected to be scrapped and about 2.4 million deadweight tons in 2025. Panamaxis and Kamsa-Maxis are expected to be scrapping to the tune of about 2.5 million dead weight this year and 3.7 million net weight, and Lukas Eftesman.
Speaker Change: Some simulation of the older units and increasingly.
Speaker Change: Market.
Speaker Change: Actors that will influence the freight market going forward.
Speaker Change: Turning to demolition now according to Clarksons, five 4 million deadweight worth of buffers with scrap in 2023 and so far.
Speaker Change: Half million deadweight has been scrapped this year.
Speaker Change: It's on par.
Speaker Change: For 2025. This is expected to increase to about 7 million deadweight tons.
Speaker Change: This year about $1 8 million deadweight of Capesize vessels are expected to be scrapped and about $2 4 million deadweight in 2025, Panama.
Speaker Change: Panamaxes in country in Mexico are expected to be scrapping the tune of about $2 5 million deadweight this year and $3 seven Nick.
Speaker Change: Hey, look I pass it back.
Anastasios C. Margaronis: New building prices, according to Clarkson, have increased by 3% this year, with Newcastle Max prices having gone up by 6% and Ultramax new building prices having gone up by 3%. However, smaller ship prices have been more or less steady. Second-hand ship prices have been going up across the board, particularly since early this year. The 3-month trend for 5-year-old capes is up 12% and for older 10-year-old ships as much as 21%. For Comsomag, prices of 5-year-old vessels have increased by 9% and 10-year-old ships by 14%. We have witnessed similar increases in the prices of second-hand Ultramax vessels. So, finally, let's look at the outline.
Speaker Change: New building prices.
Speaker Change: According to Clarksons have increased by 3% this year with new cutting Max prices, having gone up by 6% and ultra Max pricing, having gone up by 3% smaller ship prices has been more or less steady.
Speaker Change: Secondhand prices have been going up across the board, particularly since early this year.
Okay three months trend four five year old Cape is up 12%.
Speaker Change: And for all of their 10 year old ships as much as 21%.
Speaker Change: For contract prices of five year old vessels have increased by 9% and 10 year old ships by 14%.
Speaker Change: We have witnessed similar increases in the practice of secondhand Fulton IMAX.
Speaker Change: So finally, let's look at the outlook.
Anastasios C. Margaronis: Apart from unexpected factors such as adverse weather, which can have a negative effect on the supply-demand balance of our goods, we are cautious about 2025. We agree with Clarkson that the bulk carrier sector supply-demand balance initially appeared somewhat softer in 2025, which could lead to a softer freight market. However, drive bus demand is expected to increase by about 1.6% in ton-miles, assuming red sea disruption has eased by the end of this
Speaker Change: Apart from unexpected factors, such as adverse weather, which can have a negative effect on the supply demand balance.
clarksons: We are cautious about 2025, we agree with clarksons that the bulk carrier sector supply demand balance initially appear somewhat softer in 2025, which could lead to a softer freight market dry.
clarksons: Dry bulk demand is expected to increase by about one 6% in ton miles.
clarksons: Assuming Brexit disruption has eased by the end of this year. Meanwhile.
Anastasios C. Margaronis: Meanwhile, fleet growth is expected to come in at around 2.5% in 2025, and even slower operating speed, increased TST refitting, and increased demolition of all the units will all influence the markets in 2025, hopefully counterbalancing this negative effect of surplus tonnage mentioned above. So to summarize, we should be focusing on the following positive and negative factors which may affect the dry bulk industry over the next few quarters. On the positive side, relatively low new building and old book with deliveries spread over the next four years.
clarksons: Meanwhile, fleet growth is expected to come in at around 25% in 2025.
clarksons: Even slower operating speed.
clarksons: Increased ESP, reflecting increased demolition of older units will all influenced the market in 2025, hopefully counterbalancing this negative effect of surplus tonnage mentioned above.
clarksons: So to summarize we should be focusing on the following positive and negative factors, which may affect the dry bulk industry over the next few quarters.
clarksons: On the positive side.
clarksons: Relatively low new building order book with deliveries spread over the next four years.
Anastasios C. Margaronis: Secondly, continued sailing restrictions in the Panama Canal, Red Sea risks of attack, and increasing sun mile demand. China's contraction of domestic coal production, an increase in congestion, even slower operating speed, and continued growth in Asia outside China. On the negative side... We have to look for new geopolitical disruptions and tight monetary policies leading to a worldwide recession. Secondly, reversal of higher congestion trends and an easing of tensions in the Middle East, allowing again free and safe transit through the Red Sea.
clarksons: Secondly, continue sailing restrictions in the Panama Canal.
Speaker Change: Let's see risks of attack increasing ton mile demand.
Speaker Change: China's contraction of domestic coal production.
Speaker Change: And increasing congestion.
Speaker Change: Even slower operating speed and continued growth in Asia outside China.
Speaker Change: On the negative side.
Speaker Change: We have to look for new geopolitical disruption in and tight monetary policy, leading to a worldwide recession.
Speaker Change: Secondly, the reversal of higher congestion.
Speaker Change: Easing of tensions in the middle East, allowing again free and safe traveling through the Red Sea.
Anastasios C. Margaronis: Large increase in new building orders due to excessive optimism and finally the development of a trade war between major trading nations such as the US and China. At this point, I will pass the call to our CEO, Semiramis Paliou, for the highlights of our company's business strategy going forward. Thank you, stay safe.
Speaker Change: The large increase in new building ordering due to excessive optimism.
Speaker Change: And finally development of a trade war between major trading nations, such as the U S and China.
Sumit: At this point I will pass the call to our CEO Sumit I mean, its value for the highlights of our company's business strategy going forward.
Semiramis Paliou: Thank you, Stacey. And before we open the call up to our questions and answers session, I would like to summarize the key points from today's presentation. We adhere to our strategy of providing relative stability in a cyclical business and aiming to maximize long-term shareholder value. A cornerstone of executing this strategy is the prudent and active management of our balance sheet. We are continuously renewing and modernizing our fleet and enhancing our ecological footprint with greener investments.
Speaker Change: Thank you Stacey.
CEO Sumit: And before we open the call up to our questions and answer session I would like to summarize the key points from today's presentation.
Sumit I: We adhere to our strategy of providing a relative stability in a cyclical business and aiming to maximize long term shareholder value a corner store stone for exact executing this strategy is the prudent and active management of our balance sheet.
Speaker Change: We are continuously renewing and modernizing our fleet and enhancing our ecological footprint with greener investments.
Semiramis Paliou: This aligns with our commitment to sustainability and environmental responsibility. Furthermore, our focus is on generating and securing positive free cash flows. We also remain committed to rewarding our shareholders with attractive cash and in-kind dividends whenever possible. And lastly, we are keeping abreast of developments in the shipping and energy sectors for potential attractive opportunities presented to us. With that, thank you all for joining us today, and we look forward to answering your questions during the Q&A session.
Speaker Change: This aligns with our commitment to sustainability and environmental responsibility.
Speaker Change: Our focus is on generating in securing positive free cash flows. We also remain committed to rewarding our shareholders with attractive cash and then kind of dividends whenever possible.
Speaker Change: And lastly, we're keeping abreast of developments in the shipping and energy sectors for potential attractive opportunities presented to us.
Speaker Change: With that thank you all for joining us today, and we look forward to addressing your questions during the Q&A session.
Operator: Thank you. We will now be conducting a question and answer session. If you would like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
Speaker Change: Thank you, we'll now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad.
Operator: You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. Once again, that's Star One to be placed into question. One moment, please, while we poll for questions. I want to hear that star 1 should be placed in the question. We have reached the end of our question and answer session. I will turn the floor over to management for any further or closing comments.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue.
Speaker Change: For participants using speaker equipment may be necessary to pick up your handset before pressing star one once again Thats star one to be placed into the question queue.
Speaker Change: Okay.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Yeah.
Speaker Change: Once again Thats star one to be placed in the question queue.
Speaker Change: Hey, rich end of our question and answer session I'll turn the floor over to management for any further or closing comments.
Semiramis Paliou: With that, I would like to thank you again, and we look forward to catching up on our next call with our next financial results. Thank you very much.
Speaker Change: With that I would like to thank you again, and we look forward to catching up.
Speaker Change: On our next call our next financial results. Thank you very much.
Operator: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
Speaker Change: Thank you that does conclude today's teleconference. Webcast. You may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.
Speaker Change: Yeah.