Q2 2024 Scorpio Tankers Inc Earnings Call

Hello and welcome to the Scorpio Tankers Inc. second quarter 2024 conference call. All participants will be in listen-only mode.

Operator: 2nd Quarter 2024 conference call. Our participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone phone.

James Doyle: I would now like to turn the conference over to James Doyle, Head of Corporate Development and IR. Please go ahead, sir.

James Doyle: Thank you for joining us today.

Speaker Change: Thank you for joining us today welcome to the Scorpio tankers second quarter 2024 earnings conference call on the call with me today are <unk>, Chief Executive Officer, Robert Bugbee, President Cameron Mackey, Chief operating Officer, Chris <unk> Chief financial.

Operator: Thank you for joining us today. Welcome to the Scorpio Tankers' second quarter 2024 earnings conference call. On the call with me today are Emanuele Lauro, Chief Executive Officer; Robert Bugbee, President; Cameron Mackey, Chief Operating Officer; and Chris Avella, Chief Financial Officer. Earlier today, we issued our second quarter earnings press release, which is available on our website, Scorpiotankers.com. The information discussed on this call is based on information as of today, July 30th, 2024, and may contain forward-looking statements that involve risk and uncertainty. actual results may differ materially from those set forth in such statements.

James Doyle: Welcome to the Scorpio Tankers 2nd quarter 2024 earnings conference call. On the call with me today are Emanuele Lauro, Chief Executive Officer; Robert Bugbee, President; Cameron Mackey, Chief Operating Officer; Chris Amella, Chief Financial Officer. Earlier today, we issued our 2nd quarter earnings press release, which is available on our website, ScorpioTankers.com. The information discussed on this call is based on information as of today, July 30th, 2024, and may contain four looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For discussion of these risks and uncertainties, you should review the four looking statement disclosure in the earnings press release, as well as Scorpio Tankers' SEC filing, which are available at ScorpioTankers.com and SEC.gov.

Perfect.

Speaker Change: Today, we issued our second quarter earnings press release, which is available on our website Scorpio tankers dot com.

Formation discussed on this call is based on information as of today July 32024, and May contain forward looking statements that involve risk and uncertainty.

Speaker Change: Actual results may differ materially from those set forth in such statements for a discussion of these risks and uncertainties you should review the forward looking statement disclosure in the earnings press release as well as Scorpio tankers, SEC filings, which are available at Scorpio tankers, dotcom and S. T Dot Gov all participants.

Operator: For a discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release, as well as Scorpio Tankers' SEC filings, which are available at Scorpiotankers.com and sec.gov. All participants are advised that the audio of this conference call is being broadcast live on the internet and is also being recorded for playback purposes. An archive of the webcast will be made available on the investor relations page of our website for approximately 14 days.

James Doyle: All participants are advised that the audio of this conference call is being broadcast live on the internet and is also being recorded for playback purposes. An archive of the webcast will be made available on the Investor Relations page of our website for approximately 14 days.

Speaker Change: We're advised that the audio of this conference call is being broadcast live on the Internet and is also being recorded for playback purposes. The archive. The webcast will be made available on the Investor Relations page of our website for approximately 14 days, we will be giving this short presentation. Today. The presentation is available at Scorpio tankers dot com on the Investor Relations.

James Doyle: We will be giving a short presentation today. The presentation is available at ScorpioTankers.com on the Investor Relations page under Reports and Presentation. The slides will also be available on the webcast.

Operator: We will be giving a short presentation today. The presentation is available at Scorpiotankers.com on the investor relations page under reports and presentations. The slides will also be available during the webcast.

Speaker Change: Under reports and presentations.

Speaker Change: Slides will also be available on the webcast. After the presentation. We will go to Q&A for those asking questions. Please limit the number of questions to two.

James Doyle: After the presentation, we will go to Q&A for those asking questions. Please submit the number of questions to two. If you have an additional question, please rejoin the queue.

Operator: After the presentation, we will go to Q&A. For those asking questions, please limit the number of questions to two. If you have an additional question, please rejoin the queue. Now, I'd like to introduce our Chief Executive Officer, Emanuele Lauro. Thank you, James, and good morning or good afternoon, everyone, and thank you for joining us today.

Speaker Change: If you have an additional question please rejoin the queue.

Emanuele Lauro: Now I'd like to introduce our Chief Executive Officer, Emmanuel Elora.

Speaker Change: Now I'd like to introduce our Chief Executive Officer Emmanuel Iowa.

Emanuele Lauro: Thank you, James.

Emanuele A. Lauro: Thank you James and good morning, or good afternoon, everyone and thank you for joining us today.

Emanuele Lauro: Good morning or good afternoon, everyone. Thank you for joining us today. We are pleased to announce another strong quarter of financial results. In the second quarter, we continue to see a significant year-over-year increase in rates, and the company generated $278 million in adjusted EBDA and more than $188 million in adjusted net income. When we last spoke, I highlighted that we have positioned the company to further reduce debt, act opportunistically, and increase shareholder returns, and in the second quarter, we were able to do exactly that. During the quarter, we repaid almost $300 million in debt and executed on reducing our daily cash rate even to a level of $12,500 per day.

Emanuele A. Lauro: We are pleased to announce another strong quarter of financial results. In the second quarter, we continued to see a significant year-over-year increase in rates, and the company generated $278 million in adjusted EBITDA and more than $188 million in adjusted net income. When we last spoke, I highlighted that we have positioned the company to further reduce debt, act opportunistically, and increase shareholder returns. And in the second quarter, we were able to do exactly that.

Speaker Change: We are pleased to announce another strong quarter of financial results.

Speaker Change: The second quarter, we continued to see a significant year over year increase in rate and the company generated $278 million and adjusted EBITDA.

Speaker Change: More than $888 million.

Speaker Change: Adjusted net income.

Speaker Change: When we last spoke I highlighted that we have positioned the company to further reduce debt.

Speaker Change: Opportunistically and increase shareholder returns and in the second quarter, we were able to do exactly that.

Emanuele A. Lauro: During the quarter, we repaid almost $400 million in debt and executed on reducing our daily cash rate even further to a level of $12,500 per day. Our net debt has decreased from $1.4 billion in June 2023 to around $700 million today. In addition, on a pro forma basis, which assumes the closing of the four remaining vessel sales which we had previously announced, our net debt would be below $600 million as of today. The repayment of the net debt in these facilities could lower daily cash break evens by over $1,000 per day to $11,500 per day break even. June 1st.

Speaker Change: During the quarter, we repaid almost $400 million in bags and executed on reducing our daily cash breakeven.

Speaker Change: A little below $12500 per day.

Emanuele Lauro: Our net debt has decreased from $104 billion in June 2023 to around $700 million today. In addition, on a performance basis, which assumes the closing of the four remaining vessel sales, which we have previously announced, our net debt would be below $600 million as of today. We recently announced an agreement with the lenders on our $225 million credit facility to convert it from a term loan to a revolving credit facility. And we have also recently sent notice to pre-pay the outstanding debt on our facility with BMP and Signature for $64 million. The repayment of the net debt in these facilities could lower data cash rate events by over $1,000 per day to $11,500 per day rate events.

Speaker Change: Our net debt has decreased from $1 $4 billion in June 2023 to around $700 million two day.

Speaker Change: In addition on a pro forma basis, which assumes the closing of the four remaining vessels.

Speaker Change: Is which we had previously announced.

Speaker Change: Our net debt would be below $600 million.

Speaker Change: As of today.

Speaker Change: We recently announced an agreement with the lenders on our $225 million credit facility two converted from a term loan to our evolving credit facility and we have also recently sent a notice to prepay the outstanding debt on our facility with BNP.

Speaker Change: Cynosure.

Speaker Change: $64 million.

Speaker Change: The payment of the net debt in these facilities could lower daily cash breakeven by over $1000 per day to $11500 per day.

Speaker Change: For a few days.

Emanuele Lauro: Since June 1st, we have repurchased 1.4 million shares of our company for an aggregate $109 million at an average price of $78 per share. Selling all the assets at prices above consensus net asset value and repurchasing stock below net asset value is accrued and crystallizes value for shareholders, including share buybacks, and we have thus far returned $2.86 per share to shareholders during 2020-24. In addition to that, today we declared a quarterly dividend of $4.10 per share and announced the replenishment of our security's repurchase program with an increased authorization limit of $400 million. We are very optimistic for the rest of the year as we start the third quarter with a stock fleet average of $36,000 per day TCE.

Speaker Change: Since June 1st we had repurchased one 4 million shares.

Emanuele A. Lauro: We have repurchased 1.4 million shares of our company for an aggregate $109 million at an average price of $78 per share. Selling older assets at prices above consensus net asset value and repurchasing stock below net asset value is accretive and crystallizes value for shareholders. Including share buybacks and dividends, we have thus far returned $2.86 per share to shareholders during 2024. In addition to that, today we declared a quarterly dividend of $0.40 per share and announced the replenishment of our securities repurchase program with an increased authorization limit of $400 million.

Speaker Change: All of our company for an aggregate of $109 million.

Speaker Change: The average price of $78 per share.

Speaker Change: Selling older assets at prices above consensus net asset value and repurchasing stock below net asset value is accretive and crystallize value for shareholders.

Speaker Change: Including share buybacks and dividends, we have thus far to return $2.86 per share to shareholders viewing 'twenty twice before.

Speaker Change: In addition to that today, we declared a quarterly dividend of <unk> 40 cents per share and announced the replenishment of our securities repurchase program with an increase of authorization limit of $400 million.

Speaker Change: We are very optimistic for the rest of the year.

Emanuele A. Lauro: We are very optimistic for the rest of the year as we start the third quarter with a spot split average of $36,000 per day TCE. We remain committed to delivering value to our shareholders. We appreciate your continued support and confidence in Scorpio Tankers. With low leverage, a strong liquidity position, and a young fleet, we are uniquely positioned to capture what this high-rate environment has to offer. With that, my opening remarks are done, and I would like to turn the call over to James. Thank you, Emanuele.

Speaker Change: We started the third quarter with a spot fleet average of $36000 per day T. C D.

Emanuele Lauro: This is more than $10,000 higher than it was last year, which was $26,000 per day. So compared to last year, we are $10,000 higher in TCE for the third quarter. We remain committed to delivering value to our shareholders. We appreciate your continued support and confidence in Scorpio Tankers. With low leverage, a strong liquidity position, and a young fleet, we are uniquely positioned to capture what this high rate and settlement has to offer.

Speaker Change: We see more than $10000 higher than it was last year.

Speaker Change: <unk> was $26000 per day compared to last year, we are $10000 high yet in D C.

Speaker Change: For the third quarter.

Speaker Change: We remain committed to delivering bodies watershed older. We appreciate your continued support and confidence in the Scorpio downgrade with low leverage strong liquidity position and a young fleet. We are uniquely positioned to capture these high rate environment has to offer.

James Doyle: With this, my opening remarks are done, and I would like to turn the cold through James Bees.

Speaker Change: Would be my opening remarks are down and I would like to turn the call to James Please.

James Doyle: Thank you, old manually.

James: Thank you all menu Ali.

James Doyle: Slide seven, please. The ongoing strength in the product tanker market continues to exceed expectations. Increasing global demand and shifts in refining capacity have increased seaborne exports in ton miles, year-to-date average MR. Tanker earnings have reached their highest level since records began in 1990. The next highest earnings were recorded in 2022, followed by 2023, with 2005 ranking fourth.

James Doyle: Slide 7, please. The ongoing strength in the product-tanker market continues to exceed expectations. Increasing global demand and shifts in refining capacity have increased seaborne exports in time miles. At the same time, the fleet has become bi-cricated, and supply growth has been limited. Geopolitical events have further exacerbated the underlying supply and demand fundamentals. The combination of all these factors is unprecedented and has caused product tanker rates to remain at high levels to the last two and a half years. Year-to-date average MR tanker earnings have reached their highest levels since records began in 1990. The next highest earnings were recorded in 2022, oh by 2023, with 2005 ranking fourth.

James: Slide seven place.

James: The ongoing strength in the product tanker market continues to exceed expectations, increasing global demand and shifts in refining capacity have increased seaborne exports in ton miles at the same time. The fleet has become bifurcated and supply growth has been limited.

James: Political events have further exacerbated the strong underlying supply and demand fundamentals.

James: The combination of all these factors is unprecedented and has caused product tanker rates to remain at high levels through the last two and a half years year to date average emaar.

James: Tanker earnings have reached their highest level since records began in 1990. The next highest earnings were recorded in 2022.

James: By 2023 with 2005 ranking forest.

James Doyle: While the high rates are striking, the four in rates has arguably been more notable. As Emanuele mentioned, the year-over-year increase in rates has been significant. Despite the seasonal nature of our business, we have entered the third quarter with exceptionally strong rates, with LR2s at 44,000 per day and MRs at 34,000 per day. Well, current spot rates are well above historical averages and at levels which generate significant cash levels. The confluence of factors driving today's market remains intact, and thus we expect seasonality to return in our favor.

James Doyle: While the high rates are striking, the flooring rates are arguably more notable. As Emanuele mentioned, the year-over-year increase in rates has been significant. Despite the seasonal nature of our business, we have entered the third quarter with exceptionally strong rates, with LR2s at $44,000 per day and MRs at $34,000 per day. Global demand for refined products remains strong.

James: While the while the higher rates or striking the flooring rates has arguably been more notable as Emmanuel I mentioned the year over year increase in rates has been significant.

Speaker Change: Despite the seasonal nature of our business, we have entered the third quarter with exceptionally strong rates with Dell arches at 44000 per day or that Mars at 34000 per day well.

Speaker Change: While current spot rates are well above historical averages and while most of which generate significant cash flows a confluence of factors driving todays market remain intact and last we expect seasonality to return in our favor.

James Doyle: My name, please. Global demand for refined products remained strong. As we look to the second half of the year, we expect demand to increase by almost 1 million barrels per day compared to last year. And as global demand has increased, so I've seen borne exports by nine points. The increase in demand has led to a record level of sea borne exports. In June, exports reached 20.9 million barrels per day, the increase of 300,000 barrels year-over-year and up 3.2 million barrels compared to 2020. Moreover, not only have exports grown, but the distances these barrels are traveling has also significantly increased.

Nate: Hi, Nate.

Speaker Change: Global demand for refined products remains strong as we look to the second half of the year, we expect demand to increase by almost 1 million barrels per day compared to last year and as global demand has increased so have seaborne exports.

James Doyle: As we look to the second half of the year, we expect demand to increase by almost 1 million barrels per day compared to last year. And as global demand has increased, so have seaborne exports. 5-9-4.

Speaker Change: Please.

Nate: The increase in demand has led to a record level of seaborne exports in June exports reached $20 9 million barrels per day, an increase of 300000 barrels year over year and up $3 2 million barrels compared to 2020.

James Doyle: The increase in demand has led to a record level of seaborne exports. In June, exports reached 20.9 million barrels per day, an increase of 300,000 barrels year over year and up 3.2 million barrels compared to 2020. Moreover, not only have exports grown, but the distances these barrels are traveling have also significantly increased. 9-10, please.

Speaker Change: Moreover, not only of exports crown, but the distances. These barrels are traveling has also significantly increased.

James Doyle: By 10, please. Excluding Russia, year-to-date tonne-mile demand is 14% higher than 2019 levels. And including Russia, tonne-mile demand would increase in additional 4%, 18%. That will continue to avoid the Red Sea and transit around the Cape of Good Hope, leading to a less efficient fleet that must cover longer distances. These disruptions have exacerbated the strong supply and demand fundamentals in our markets. And it's not only geopolitical events driving tonne-miles, but also changes in refining capacity.

Speaker Change: Slide 10 please.

Nate: Excluding Russia year to date ton mile demand is 14% higher than 2019 level, including Russia ton mile demand would increase an additional 4% 18%.

James Doyle: Excluding Russia, year-to-date ton-mile demand is 14% higher than 2019 levels. Including Russia, ton-mile demand would increase by an additional 4%, or 18%. Vessels continue to avoid the Red Sea and transit around the Cape of Good Hope, leading to a less efficient fleet that must cover longer distances.

Nate: Vessels continue to avoid the Red Sea in transit around the Cape of good hope leading to a less efficient fleet that must cover longer distances. These disruptions have exacerbated the strong supply and demand fundamentals in our markets and it's not only geopolitical events driving ton miles, but awesome changes in refining capacity by 11.

James Doyle: By 11. Nigeria's long-awaited Dangote Refinery began production earlier this year and has exported over 200,000 barrels of refined product per day since April. While the refinery is still ramping up production, the early data suggests that the refinery may increase trading activity as opposed to reduce it. Changes in refining capacity are significantly altering global flows of refined products. From 2013 to 2023, excluding China in the Middle East, global refining capacity fell by nearly 3 million barrels a day. Conversely, over the same period, the Middle East added almost 4 million barrels per day of capacity and has become the incremental supplier for lost or closed production.

Speaker Change: Nigeria's long awaited didn't go to pay refinery began production earlier this year as export at over 200000 barrels of refined product per day since April while the refinery is still ramping up production. The early data suggests that the refinery may increased trading activity as opposed to reduce it changes in refining capacity or significantly alter.

Speaker Change: Globalflyer simplifying products from 2013 to 2023, excluding China and the Middle East Global refining capacity fell by nearly 3 million barrels a day.

Speaker Change: Firstly over the same period, the middle East added almost 4 million barrels per day of capacity and it's become the incremental supplier for Wassa close production.

James Doyle: This structural shift in capacity continues to reshape product flows, increase tonne-miles demand, and tighten supply.

Speaker Change: This structural shifting capacity continues to reshape product flows increased ton mile demand and tightened supply.

James Doyle: By prop, please. Canada's TMX pipeline has exceeded expectations in both throughput and AFRMAX LR2 loadings. In June, TMX exported 300,000 barrels of crude oil, and this is expected to increase by an additional 130,000 barrels through year end. This has and will continue to increase demand for AFRMAX LR2. Today, 56% of the LR2 fleet is trading queen products, which is another way of saying 44% of the LR2 fleet is trading crude oil. Historically, around 50 to 60% of the LR2 fleet has traded queen. We expect this ratio to continue getting the strong underlying fund and metals for Affirmax and LR2 vessels.

Paul: Paul Please.

Speaker Change: S. T M X pipeline has exceeded expectations in both throughput and Aframax LR two loadings in June T. M actually exported 300000 barrels of crude oil and this is expected to increase by an additional 100 <unk> hundred 30000 barrels through year end. This has and will continue to increase demand for Aframax and <unk>.

Speaker Change: Today, 56% of the LR to fleet is trading clean products, just another way of saying, 44% of the LR to fleet trading crude oil.

James Doyle: [inaudible] Today, 56% of the LR2 fleet is trading clean products, which is another way of saying 44% of the LR2 fleet is trading crude oil. Historically, around 50 to 60% of the LR2 fleet has traded clean. We expect this ratio to continue given the strong underlying fundamentals for AFRMAX and LR2 dust. Y13 for you, and thus declining AFRMAX growth will require LR2s to continue to service the larger crude oil market. While recent LR2 orders may appear high given their smaller fleet size, the combined LR2 AfriMaxx order book is only at 14%, which is modest and substantially below the 30-45% seen in the 2006-2008 period under similar earnings levels. Meanwhile, the fleet continues to age, with the average age of the product tanker fleet now at 13.6 years.

Historically around 50% to 60% of the LR to fleet, Australia, Queen we expect this ratio to continue given the strong underlying fundamentals for Aframax LR two vessels.

Paul: Slide 13 please.

James Doyle: Prior to 2010, the majority of Affirmax LR2 orders were uncoated Affirmax vessels as opposed to coated LR2 vessels. Since then, and especially recently, owners have increasingly opted for coated LR2 vessels because of the optionality to trade both crude and products. However, the increase in LR2 orders has come at the cost of the Affirmax vessels. And thus, declining Affirmax growth will require LR2s to continue to service the larger crude oil market. While recent LR2 orders may appear high given a smaller fleet size, the combined LR2 Affirmax order book is only at 14%, which is modest and substantially below the 30 to 45% seen in the 2006 to 2008 period under similar earnings levels.

Paul: 520, <unk> the majority of Aframax LR two orders for uncoated Aframax vessel as opposed to Codell. Our two vessels. Since then, especially recently owners have increasingly opted for Colorado are two vessels because of the optionality to trade both crude and products.

Paul: However, the increase in our two orders that's come at the cost of Aframax vessel.

Paul: Thus declining aframax graph more acquire LR twos.

Paul: To continue to service the larger crude oil market.

Paul: While recent LR two orders may appear high given they're smaller fleet size. The combined our two Aframax order book is only at 14%, which is modest and substantially below the 30% to 45% seen in the 2006 to 2008 period under similar earnings levels.

James Doyle: By 14 players, strong spot and time charter rates coupled with an aging fleet have led to an increase in new building orders. Currently, the order book that is set to deliver over the next four years represents 16% of the existing fleet, half of LR2 vessels. Meanwhile, the fleet continues to age, with the average age of the product tanker fleet now at 13.6 years.

Paul: 14th place.

Paul: Strong spot and time charter rates, coupled with an aging fleet have led to an increase in new building orders currently the order book that is set to deliver over the next four years represent 16% of the existing fleet half of which are like two vessels. Meanwhile, the fleet continues to age with the average age of the product tanker fleet now at 13.

Paul: Six years, so all of the fleet look like in 2026, including new builds well by Dan close to 50% of the fleet will be 15 years and 21% of the fleet.

James Doyle: So, what will the fleet look like in 2026, including new builds? Well, by then, close to 50% of the fleet will be older than 15 years, and 21% of the fleet will exceed 20 years and older, positioning them as potential candidates for scrapping. Thus, using conservative scrapping assumptions, fleet growth looks modest over the next several years.

James Doyle: So what will the fleet look like in 2026, including new builds? Well, by then, close to 50% of the fleet will be older than 15 years, and 21% of the fleet will be exceeding 20 years and older, positioning them as potential candidates for scrapping. 515, please. The confluence of factors in today's market are constructive individually: increasing demand, exports in ton miles, structural dislocations in the refinery system, rerouting of global product flows, and limited food growth. Collectively, they are unprecedented.

Paul: Well exceed 20 years and older.

Paul: The Shanghai them as potential candidates for scrapping.

Paul: Thus using conservative scrapping assumptions smooth gross books modest over the next several years.

James Doyle: By 15 players. Year-to-date seaboard exports in 10 miles have increased half a percent in 7.5 percent, significantly higher than this year's 1.3 percent fleet growth. Using minimal scrapping assumptions, we expect fleet growth of 3.5 and 5 percent over the next two years. However, using slightly higher scrapping assumptions and assuming a portion of the LR2 rebuilds trade in the crude markets, effective fleet growth would be 2 percent and 3.5 percent over the next three years.

Paul: Slide 15 please.

Paul: Year to date seaborne exports in ton miles increased half a percent and a 7.5% significantly higher than this year's one 3%. We grew up using minimal scrapping assumptions, we expect fleet growth of three and a half and 5% over the next two years, however, using slightly higher scrapping assumptions, assuming a portion of the <unk>.

Paul: X trade in the crude markets affected effective fleet growth would be 2% and three 5% over the next two years.

James Doyle: Looking forward, we are very constructive on the supply-demand balance. The confluence of sectors in today's market are constructive individually, increasing demand exports in 10 miles, structural dislocations in the refinery system, rerouting of global product flows, limited fleet growth.

Paul: Looking forward, we are very constructive on the supply demand balance.

Paul: Confluence of factors in today's market are constructive individually increasing demand exports in ton miles structural dislocations in their refinery system rerouting, our global product flows limited food crops.

Chris Amella: Collectively, they are unprecedented, but that I would like to turn it over to Chris. Thank you, James. Good morning or good afternoon, everyone.

Paul: Collectively they are unprecedented.

Christopher Avella: With that, I would like to turn it over to Chris. Next slide, 17, please. This improvement was driven by strong underlying demand, coupled with the expansion of ton-mile demand triggered by the conditions in the Red Sea. Over the past six quarters, we have generated $1.5 billion in adjusted EBITDA and $965 million in adjusted net income, paid $101 million in dividends, and purchased $543 million of the company's stock in the open market at an average price of about $53 per share.

Paul: I would like to turn it over to Chris.

Thank you James good morning, or good afternoon, everyone.

Chris Amella: Supplied 17, please. Second quarter of 2024 average daily TCE rates were a significant improvement over the same period last year. This improvement was driven by strong underlying demand, coupled with the expansion of ton-mile demand triggered by the conditions in the Reds. Over the past six quarters, we have generated $1.5 billion in the adjusted EBITDA and $965 million in the adjusted net income. These results have enabled us to reduce our debt by $955 million. Pay $101 million in dividends and purchase $543 million of the company stock in the open market at an average price of about $53 per share.

Chris: Slide 17 please.

Chris: Second quarter of 'twenty 'twenty four average daily TCE rates were a significant improvement over the same period last year.

Chris: This improvement was driven by strong underlying demand coupled with the expansion of ton mile demand triggered by the conditions in the Red Sea.

Chris: Over the past six quarters, we have generated $1.5 billion and adjusted EBITDA of $965 million and adjusted net income.

Chris: These results have enabled us to reduce our debt by $955 million.

Chris: $101 million in dividends and purchased $543 million of the company's stock in the open market at an average price of about $53 per share.

Chris Amella: In July, we have since repurchased an additional $55 million of the company stock. Including dividends and share buybacks, we have returned $152 million with $2.86 per share to shareholders thus far in 2024.

Chris: In July we have since repurchased an additional $55 million of the company's stock.

Chris: Including dividends and share buybacks, we have returned $152 million or $2 86 per share to shareholders. Thus far in 2024.

Chris Amella: Slide 18, please. We continue to de-leverage with the goal of maximizing balance sheet flexibility, lowering our cost of debt, and reducing our daily cash rate even rates. We have recently submitted notice to pre-pay our $64 million term loan with BNP Paribas and Signature. This facility was the most expensive bank financing on our balance sheet, currently varying interest at silver plus a margin of 291 basis points. This pre-payment is expected to occur before the end of the third quarter and will release five vessels that are currently collateralized under this facility. We have also reached an agreement with the lenders on our $225 million credit facility to convert this facility into a revolving credit facility.

Chris: Slide 18 please.

Christopher Avella: In July, we have since repurchased an additional $55 million of the company's stock. Including dividends and share buybacks, we have returned $152 million, or $2.86 per share, to shareholders thus far in 2024. Slide 18, please. We continue to deleverage with the goal of maximizing balance sheet flexibility, lowering our cost of debt, and reducing our daily cash break-even rate. We have recently submitted notice to prepay our $64 million term loan with BNP Paribas and Sinoshore.

Chris: We continued to deleverage with the goal of maximizing balance sheet flexibility lowering our cost of debt and reducing our daily cash breakeven rates.

Chris: We have recently submitted a notice to prepay our $64 million term loan.

Speaker Change: B M P powered blood and cynosure.

Speaker Change: Facility was the most expensive bank financing on our balance sheet currently bearing interest at Sulphur plus a margin of 291 basis points.

Christopher Avella: This prepayment is expected to occur before the end of the third quarter and will release five vessels that are currently collateralized under this facility. We've also reached an agreement with the lenders on our $225 million credit facility to convert this facility into a revolving credit facility. This amendment is expected to give the company the flexibility to make unscheduled repayments that can be redrawn in the future. There is currently $174 million outstanding on this facility as of today. The outstanding amount or amount available should we repay the revolver remains subject to the same quarterly amortization profile as the term loan.

Speaker Change: Prepayment is expected to occur before the end of the third quarter and will release five vessels that are currently collateralized under this facility.

Speaker Change: We've also reached an agreement with the lenders on our $225 million credit facility to convert this facility into a revolving credit facility.

Chris Amella: This amendment is expected to give the company the flexibility to make unscheduled repayments that can be re-drawn in the future. There is currently $174 million outstanding on this facility as of today. The outstanding amount, or amount available should we repay the revolver, remains subject to the same quarterly amortization profile as the term loan. A full repayment on both the BNP Parade and $225 million credit facility could potentially reduce our daily cash break-even costs, which include vessel operating costs, cash GNA, interest payments, and regularly scheduled loan amortization. By over $1,000 per day in the first year following repayment.

Speaker Change: This amendment is expected to give the company the flexibility to make unscheduled repayments that can be redrawn in the future.

Speaker Change: There is currently $174 million outstanding on this facility as of today.

Speaker Change: The outstanding amount or amount available should we repay the revolver remains subject to the same quarterly amortization profile is the term loan.

Speaker Change: A full repayment on both the BMP powered bot and $225 million credit facility could potentially reduce our daily cash breakeven cost which include vessel operating costs cash G&A interest payments and regularly scheduled loan amortization.

Christopher Avella: Full repayment on both the BNP Powered By and $225 million credit facility could potentially reduce our daily cash break-even costs, which include vessel operating costs, cash G&A, interest payments, and regularly scheduled loan amortization, by over $1,000 per day in the first year following repayment. As shown in the chart on the right, our gross and net debt, as of today, stands at $992 million and $712 million, respectively. On a pro forma basis, which assumes the closing of four remaining vessel sales which have been previously announced, our net debt would be below $600 million. This compares to net debt of $1.4 billion at the same time last year. Slide 19, please.

Speaker Change: By over $1000 per day in the first year following repayment.

Chris Amella: As shown in the chart on the right, our gross and net debt as of today stands at $992 million and $712 million, respectively. On a pro forma basis, which assumes the closing of four remaining vessel sales which have been previously announced, our net debt would be below $600 million. This compares to net debt of $1.4 billion at the same time last year.

Speaker Change: As shown in the chart on the right our gross and net debt as of today stands at $992 million and $712 million respectively.

Speaker Change: On a pro forma basis.

Speaker Change: Which assumes the closing of four remaining vessels sales, which had been previously announced our net debt would be below $600 million.

Speaker Change: This compares to net debt of $1.4 billion at the same time last year.

Speaker Change: Slide 19 please.

Chris Amella: Slide 19, please. Our debt repayment and refinancing initiatives over the last two years have been transformative to our forward debt service commitments. Through the end of 2025, our ongoing quarterly scheduled principal repayment obligations on our secured debt are less than $20 million per quarter. With a daily cash break-even rate of approximately $12,500 per day, these obligations are highly manageable and position the company to continue to opportunistically increase shareholder returns.

Speaker Change: Our debt repayment and refinancing initiatives over the last two years have been transformative to our forward debt service commitments.

Speaker Change: Through the end of 2025, our ongoing quarterly scheduled principal repayment obligations on our secured debt or less than $20 million per quarter.

Speaker Change: With a daily cash breakeven rate of approximately $12500 per day.

Speaker Change: These obligations are highly manageable and position the company to continue to Opportunistically increase shareholder returns.

Speaker Change: Slide 20 please.

Chris Amella: Slide 20, please. As we enter into what is typically the seasonal low point of the year, our third quarter of 2024 coverage across the fleet, including time charters, is almost $10,000 per day above the same levels in the prior year. To illustrate the company's cash generation potential, at $30,000 per day, the company can generate $652 million in cash flow per year. And at $40,000 per day, the company can generate over $1 billion per year.

Speaker Change: As we enter into what is typically the seasonal low point of the year or third quarter of 2024 coverage across the fleet, including time charters is almost $10000 per day above the same levels in the prior year.

Speaker Change: To illustrate the company's cash generation potential at $30000 per day, the company can generate $652 million in cash flow per year.

Christopher Avella: To illustrate the company's cash generation potential, at $30,000 per day, the company can generate $652 million in cash flow per year. And at $40,000 per day, the company can generate over $1 billion per year. That concludes the presentation, and with that, I'd like to turn the call over to Q&A. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone.

Speaker Change: And that $40000 per day, the company can generate over $1 billion per year.

Operator: That concludes the presentation, and with that, I'd like to turn the call over to Q&A. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you were using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Please permit yourself to run a question in one follow-up question.

Speaker Change: That concludes the presentation and with that I'd like to call turn the call over to Q&A.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Well now begin the question and answer session.

Speaker Change: Ask a question you May press Star then one on your Touchtone phone.

Operator: If you are using a speakerphone, please pick up your handset before pressing the keys. Please see the complete disclaimer at www.sites.google.com or at www.sites.google.com. Our first question comes from John Chappell of Evercore ISI. Go ahead, please. Thank you. Good morning.

Speaker Change: If people are using a speaker phone.

Speaker Change: Please pick up your handset before pressing the keys.

Speaker Change: What's that anytime you have a question has been addressed and you would like to withdraw your question. Please press star from too.

Speaker Change: Please limit yourself to one question and one follow up question.

John Shapiro: At this time, we will pass momentarily to a similar raster. Our first question comes from John Shapiro of Evercore ISI.

Speaker Change: At this time, our platform entirely to sample our roster.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Our first question comes from Jon Chapell of Evercore ISI go ahead. Please.

John Shapiro: Go ahead, please. Thank you. Good morning. Good afternoon.

Jonathan B. Chappell: Thank you good morning, good afternoon. So.

Chris Amella: So, Chris, you ended about two pages early in the presentation. If you go down a couple more pages, you have 15 time charters, which is just less than 15% of your fleet. Interestingly, you haven't commenced one in about a year and a third. So it feels like the time charter market is becoming a little deeper. The contract rates continue to push higher. We're two plus years into this up cycle.

Operator: Good afternoon, Chris. You ended about two pages early in the presentation. If you go down a couple more pages, you have 15 time charters, which is just less than 15% of your fleet. Interestingly, you haven't commenced one in about a year and a third. So it feels like the time charter market is becoming a little deeper, with the contract rates continuing to push higher. We're two plus years into this up cycle.

Chris: Chris you ended about two pages earlier in the presentation. If you go down a couple more pages you have 15 time charters, which is just less than 15% of your fleet. Interestingly you haven't commenced one in about a year and a third so it feels like the time charter market is becoming a little deeper the contract rates continuing to push higher where two plus.

Speaker Change: Years into this up cycle has there been any consideration of increasing the time chartered out exposure to the fleet as we go through the rest of this year and into next.

Robert Bugbee: Has there been any consideration of increasing the time charter-out exposure to the fleet as we go to the rest of this year and in the next? I think if we look at this historically, first of all, we've been very confident in the actual market itself that spot would be quite a better return than time charter, which it has still continued to do so. Also, we've been deleveraging, which is allowing us to take a more spot approach, and we've been selling assets. And the math would tell you that it's better to sell the asset than to put the less along time charter or how it's told us that relationship may change.

Robert L. Bugbee: Has there been any consideration of increasing the time charter exposure to the fleet as we go through the rest of this year and into next? I think if we look at this historically, first of all, we've been very confident in the actual market itself that Spot would provide a better return than Time Charter, which it still continues to do so. And also, we've been deleveraging, which is allowing us to take a, you know, more spotty approach.

Speaker Change: So but.

Speaker Change: I think if we look historically we've been very.

Speaker Change: Confident in yacht true market itself, what would be a lot better with time and time charter, which.

Speaker Change: Would you have.

Speaker Change: It still continues to do so.

Speaker Change: And also we've been deleveraging.

Speaker Change: Deleveraging.

Speaker Change: <unk>.

Speaker Change: Allowing us to take a.

Speaker Change: More spoke to coach.

Robert L. Bugbee: And we've been selling assets, and the math would tell you that it's better to sell the asset than to put the vessel on the time channel. It has told us that that relationship may change. We don't know.

Speaker Change: We've been selling assets.

Speaker Change: And the math would tell you that.

Speaker Change: So yes it.

Speaker Change: That's a long time charter or has told us that that relationship.

Robert L. Bugbee: We've also been focused on, you know, pruning the age of our fleet. So, you know, we've now gotten rid of all vessels that are older than 10 years. And, you know, we will continue to, continue to look at time charter opportunities. I would expect that this would be, let's say, there. I think the next place, we're confident, let's say, in the age of the fleet, we would still look at..., selling ships, as Emanuel was pointing out in his talk, you know, related to just the NAV to stock price ratio. But again, there's no, you know, desperate need to do that.

Speaker Change: Might change we don't know we've also been focused on.

Robert Bugbee: We don't know.

Robert Bugbee: We were also being focused on, you know, putting the age of our fleet. We've now got rid of the vessels that are older than 10 years. And we will continue to look at time charters. I would expect that this would be, let's say, the next place, the conference, let's say in the age of the fleet, we would still look at.

Speaker Change: Hmm.

Speaker Change: Cause if they put them in a duopoly. So we've now got rid of the.

Speaker Change: Vessels that are older than 10 years.

Speaker Change: And we will continue to.

Speaker Change: We continue to look at time charter opportunities.

Speaker Change: This would be lets say that.

Speaker Change: The next place, let's say in the age of the fleet, we would still look good.

Robert Bugbee: Selling Ship to the Manual is pointing out, and we've talked, you know, related to the state NAV to stock price ratio. But again, there's no, you know, the desperate need to do that will just take that opportunity to be like we've done before. But we will, you know, we're in the market watching it. And we're not anxious to fix, but on the other hand, you know, we're happy to fix. Yes, okay.

Speaker Change: Selling ships as ammonia was pointing out and we talk.

Speaker Change: You know really quickly just the when they meet with stock price ratio.

Speaker Change: But again, there's no no don't desperately need to do that we'll just take that opportunity quickly like we've done before.

James Doyle: We'll just take that opportunity like we've done before. But we will, you know, we're in the market, watching it, and we're not anxious to fix it, but on the other hand, you know, we're happy to fix it. Yeah, okay. Second question, maybe for James: I was reading last night that Russia is considering putting another export ban on diesel. Can you just remind us, I know it was pretty short lived the last time they did that, but the impact on the market during that last period and how you maybe think about the compare and contrast to what another diesel export ban from Russia could mean to the product market in the near term? John, you're right. It was very, but short-lived.

Speaker Change: But we will.

Speaker Change: Now we're in the market.

Speaker Change: Watching it.

Speaker Change:

Speaker Change: We're not.

Speaker Change: But on the other hand, you know we're happy to go quickly.

Speaker Change: Yep Okay.

James Doyle: The second question, maybe for James, I was reading last night that Russia is considering putting another export ban on diesel. Can you just remind us, I know it was pretty short live the last time they did that, but the impact on the market during that last period and how you maybe think about the compare contrast to what another diesel export ban from Russia could mean to the product market in the near term. John, you're right. It was a very short lift. We have seen Russian exports decline by about 300,000 barrels a day from kind of the one seven range to the one four over the last couple of months.

Speaker Change: Second question, maybe for James I was reading last night that Russia is considering putting another export ban on diesel.

James: Can you just remind us I know it was pretty short lived the last time, they did that but the impact in the market during that last period and how you maybe think about the compare contrast to what another diesel export ban from Russia could mean to the product market in the near term.

Speaker Change: John Youre right. It was a very short list.

James Doyle: We have seen Russian exports decline by about 300,000 barrels a day from kind of the 1.7 range to the 1.4 range over the last couple months. About a million barrels of that is distillate. So to frame that, you would basically lose about a million barrels of distillate in the market, which has been going to MED and Africa and the Middle East. So that would have to come most likely from the Middle East or the Atlantic Basin to make up for it and would certainly tighten the market, especially as you kind of get towards fall maintenance here, where distillate inventories start to build. I had it made.

John: We have seen Russian exports declined by about 300000 barrels a day from kind of the one seven range to the one four.

Speaker Change: Over the last couple of months about 1 million barrels of that is just to let so to frame that you would basically lose about 1 million barrels of distillate in the market, which has been going to bed and in Africa.

James Doyle: About a million barrels of that is distillate. So to frame that, you would basically lose about a million barrels of distillate in the market, which has been going to Mad and Africa and Middle East. So that would have to come most likely from the Middle East or the Atlantic Basin to make up for it. And with certain we tighten, tighten the market, especially, you know, as you kind of get towards all maintenance here, where we're distal and then to start to build ahead of me. Thanks, James.

Speaker Change: And middle East.

Speaker Change: So that would have to come most likely from the middle east or the Atlantic basin to make up for it and but certainly tightened tighten the market, especially as you kind of get towards fall maintenance here.

Speaker Change: Where we're in where distillate inventory start to build.

Speaker Change: Okay great.

Robert L. Bugbee: Okay, great. Thanks, James. Thanks, Robert. The next question comes from Omar Nokta of Jefferies. Go ahead, please.

Robert: Thanks, James Thanks, Robert.

Robert Bugbee: Thanks, Robert.

Speaker Change: Okay.

Omar Nokta: The next question comes from Omar Nocta of Jeffries.

Ahmar knockdown: Our next question comes from Ahmar knockdown of Jefferies Go ahead. Please.

Omar Nokta: Go ahead, please. And the next, perhaps, two to three quarters.

Ahmar knockdown: Thank you Hey, guys good morning, and good afternoon.

Robert L. Bugbee: Hey guys, good morning and good afternoon. I just wanted to touch on, you know, the debt. Obviously, you've reached your debt targets, you did that last quarter, and you're still generating a good amount of cash flow, and you're on pace to be basically in a net cash position here in the next perhaps two to three quarters. So just maybe a couple of questions on that are, you know, one, is that a place you want to be basically debt free?

Ahmar knockdown: Just wanted to touch on you know the debt obviously, you've reached your debt targets you did that last quarter, you're still generating a good amount of cash flow and you're on pace to be basically in a net cash position here in the next perhaps two to three quarters. So just maybe a couple of questions on that one is that a place you wanna be basically debt free and then too.

Robert Bugbee: So just maybe a couple questions on that is, you know, one is that a place you want to be basically debt free. And then two, do you see any compelling use of free cash at this point besides buying stock? I think that buying a, you know, the best public for that kind of fleet in the world at a discount is a pretty compelling use of cash. And that's what you've seen from our announcement. So we see we've been locked out from the market in the last two or three weeks because of earnings, but, you know, going into this earnings release before that.

Robert L. Bugbee: And then two, do you see any compelling use of free cash at this point besides buying stocks? Buying the best public product tanker fleet in the world at a discount is a pretty compelling use of cash, and that's been seen from our announcements. Obviously, we've been blacked out from the market in the last two or three weeks because of earnings, but you know, going into this earnings release before that, we were going along buying quite, you know, I wouldn't say aggressively, but buying regularly.

Speaker Change: Do you see any compelling use of free cash at this point besides buying stock.

Speaker Change: I think that.

Speaker Change: Buying a yeah that's public.

Speaker Change: In the world.

Speaker Change: Added discount is a pretty compelling use of cash.

Speaker Change: Hmm.

Speaker Change: Come on announcement, so let's see we've seen.

Speaker Change: Locked out from the market in the last two or three weeks.

Speaker Change: I mean, the you know going into the earnings release, the cool that you.

Robert Bugbee: We were going along buying quite, you know, I wouldn't say aggressively, but buying regularly. We pretty well, you know, anticipated the Wall Street would sort of react to in a way it's done in the sense of selling off.

Speaker Change: Going alone barring quiet.

Speaker Change: I wouldn't say aggressively but barring regularly.

Speaker Change:

Speaker Change: <unk>.

Speaker Change: Pretty well.

Robert L. Bugbee: We pretty well anticipated that Wall Street would sort of react in the way it has done, in the sense of selling off. Selling off as a result, really, rates are weaker than where they were in the very strong months of May and June, whereas we looked at it in a more holistic way and said, my God, the rates at the moment are at record levels for this time of year, and the market is very, very strong. And we're about to turn into our strongest season in a matter of weeks now.

Speaker Change: Dissipated the wall Street would sort of react to in.

Speaker Change: And the way it's done.

Speaker Change: Who's selling all.

Speaker Change:

Robert Bugbee: selling off as a result, really, that right to week as I'm where they were in the very strong months of May and June, whereas we look at it in a more holistic way, that my God, the right to the moment, record levels for this time of year, Morked is very, very strong, and we're about to turn into a stronger season and in a matter of weeks now, so it's very hard to, you know, it wouldn't be nice to think that we're going to get into a net cash position, but it might be to think that we've got an opportunity right now to buy our own shares and invest in a strong market pretty cheaply now.

Speaker Change: Selling off was a result really that rate can we get them, where they were in the very strong months of May and June, whereas we looked at it does not.

Speaker Change: More holistic way that my God the rates at the moment a record level, let's call. It the market is very very strong.

Speaker Change: And.

Speaker Change: We're about to turn into a stronger season, and you know in a matter of weeks now.

Robert L. Bugbee: So it's very hard to, and I'll put it this way. It wouldn't be nice to think that we're going to get into a net cash position, but it's nicer to think that we've got an opportunity right now to buy our own shares and invest in that in a strong market pretty cheaply now. Thanks, Robert. Yeah, and then just one quick follow-up to that, and maybe, as you kind of mentioned in talking with John and Emanuele's opening comments discussing the sale of the ships, crystallizing the disconnect between the stock price and NAV, in terms of buying further stock from here, you obviously bumped the buyback to $400 million. How do you think about buying this stock? Is that coming from asset sales, or is it coming from ongoing speculation? We're not going to give the market a read at all.

Speaker Change: Oh.

Speaker Change: It's very hard to say.

Speaker Change: All right.

Speaker Change: Yeah.

Speaker Change: Wouldn't be nice good thing that we're going to get into a net cash position.

Speaker Change: Well I think that we've got an opportunity right now.

Boylan: Boylan says less than.

Boylan: And a strong market.

Speaker Change: Pretty cheap right now.

Robert Bugbee: Thanks, Robert, yeah, and then just one quick follow-up to that and maybe, as you kind of, what you mentioned in talking with John and Manuel is opening comments discussing the sale of the shifts crystallizing, the disconnect between the stock price and NAV. In terms of buying further stock from here, you obviously bump the buy-back to the 400 million. How do you think about buying the stock? Is that coming from asset sales or is it coming from ongoing sales? No, we're not going to get the market to leave at all. Fair enough, okay, thank you. We know that shareholders have got, you know, allowed us to get into a position that is unbelievably strong, and, you know, we have the ability to act on what's on offer, and we, you know, it's better for our shareholders in the long-term that we keep quiet.

Robert: Thanks, Robert Yeah, and then just one quick follow up to that and maybe as you kind of you mentioned and talking with John and the menu. All these opening comments discussing the sale of the the shifts crystallizing that the disconnect between the stock price and an a b in terms of buying.

Speaker Change: Further stock from here you, obviously bumped the buyback to the 400 million how do you think about buying the stock is that coming from asset sales or is it coming from our ongoing. So we're not we're not we're not going to give the market a read at all.

Speaker Change: Fair enough. Okay. Thanks, remember, we went out to the shareholders of course and Uh Huh.

Robert L. Bugbee: Fair enough. Okay. Thanks, Robert. Unbelievably strong.

Speaker Change: It has allowed us to get into a position that is.

Speaker Change: Unbelievably strong.

Speaker Change: And you know we have the ability to do.

Speaker Change: Outgrowing, what's on offer and we have.

Speaker Change: You expect a call shareholders in the long term.

Speaker Change: Keep quiet.

Speaker Change: Yeah.

Robert Bugbee: Yeah, thank you.

Speaker Change: Thank you.

Karen Hoekster: Our next question comes from Karen Hoekster of Bank of America. Go ahead, please. Hey, great. Good afternoon and good morning. So maybe just talk a little bit about the market itself right now. It looks like you're percent of days that you've locked in are maybe a little bit lower. I think it's the lowest on the handy I've seen since you guys have recorded it down to 29%. The 43 on the LR2 seems to be maybe more seasonal. That's what you do.

Speaker Change: Our next question comes from Kenn Hoekstra of Bank of America go ahead. Please.

Robert L. Bugbee: And, you know, we have the ability to act on what's on offer, and we, you know, it's better for our shareholders in the long term that we keep quiet. Our next question comes from Ken Hoexter of Bank of America. Go ahead, please. Hey, great. Good afternoon and good morning.

Kenneth Scott Hoexter: Hey, great. Good afternoon, and good morning, So maybe just talk a little bit about the market itself right now it looks like your your percent of days that you've locked in or are maybe a little bit lower I think it's the lowest on the handy I I've seen since you guys have recorded it down at 29%. The 43 on the other two seems to be maybe more seasonal that's what you.

Robert L. Bugbee: So maybe just talk a little bit about the market itself right now. It looks like your percent of days that you've locked in is maybe a little bit lower. I think it's the lowest on the handy I've seen since you guys recorded it down to 29%. The 43% on the LR2 seems to be maybe more seasonal. That's what you do, it seems like, in the second and third quarter.

Karen Hoekster: It seems like in the second and third quarter, maybe talk about your thoughts on locking in and your expected on seasonality here. Or is it just rates were a little weaker and you're looking to hold off to get some of that seasonality? No, I think that, you know, we're, you know, they've just been weaker in that particular area in terms of, you know, people holding on. It's been a quiet summer. It's been a very volatile summer for credit things on from hand to mouth, but I think that, you know, but when we're using, you guys even got me years in the word weaker, it's really difficult to describe a market that is, you know, plus 30 a day on M R and plus 40 a day.

Speaker Change: It seems like in the in the second and third quarter, maybe talk about your thoughts on locking in then and your expected on on seasonality here or is it just rates were a little weaker than you were looking to hold off to get some of that seasonality.

Robert L. Bugbee: Maybe talk about your thoughts on locking in and your expectations for seasonality here. Or is it just rates were a little weaker, and you're looking to hold off to get some of that seasonality? No, I think that, you know, with, They've just been weaker in that particular area in terms of, you know, people are holding on. It's been a quiet summer. It's been a very volatile summer, so trade is being gone from hand to mouth.

Speaker Change: No I think that you know with <unk>.

Speaker Change: You know that they've just been weaker and in that particular area. In terms of you know people are holding on it's been a quiet summer it's been a very volatile.

Speaker Change: While the Cogs some months out.

Speaker Change: Crazy thing going from hand to mouth, but I think that when we usually I mean, you guys. Even got me using the word we get.

Robert L. Bugbee: But I think that, you know, when we're using the word weaker, you guys have even got me using the word weaker. It's really difficult to describe a market that is, you know, plus 30 a day on MRs and plus 40 a day on LR2s at the end of July and early August this week. It's really strong.

Speaker Change: It's really difficult to describe the market that is you know plus 30, a day and malls and plus 40, a day and all that a.

Robert Bugbee: And on LR2 is the end of July, you know, early or this is weak. It's really strong. So we're very, very pleased with this position because, you know, as it was pointed out with Chris earlier in the manual, you know, 19,000. But I like to take no opportunity to say to really important things here, your actual headline rate is $9,000, $10,000 a day above last year. It's not relevant to us where that rate is compared to June or the second quarter; it's relevant in its own season and its own time, and that's plus 10. Your cash operating costs are somewhere like $89,000 a day lower.

Speaker Change: To the end of July.

Speaker Change: Earlier this week.

Speaker Change: It's really strong so we're very very pleased with its position because.

Robert L. Bugbee: So we're very, very pleased with this position because, as it was pointed out with Chris earlier and Emanuele, you know, these are $9,000-$10,000. I'd like to take an opportunity to say two really important things here. Your actual headline rate is $9,000-$10,000 a day above last year. It's not relevant to us where that rate is compared to June or the second quarter. It's relevant in its own season, in its own time, and that's plus 10.

Speaker Change: Now as it was pointed out with Chris that ear and Emmanuel.

Speaker Change: 910000, what I'd like to take them up to let's say two really important things your actual headline rate is $910000 a day above last year.

Speaker Change: Not relevant to us where that rate as compared to the second quarter.

Speaker Change: Relevant.

Speaker Change: One season in its own time, that's plus 10.

Robert L. Bugbee: Your cash operating costs are somewhere like $8,000 to $9,000 a day lower. So you've got a very substantially strong differential between last year in terms of net cash flows and in actual markets. And we've never actually had a springboard that's this high, to, you know, we're almost, you know, we're almost halfway through this course.

Speaker Change: Cash operating costs to somewhere like eight $9000 a day law.

Robert Bugbee: So you've got a very substantially strong differential between last year in terms of net cash flows and in actual market, and we've never actually had a springboard for this high. We're almost halfway through this quarter now.

Speaker Change: So you've got a.

Speaker Change: And it is very substantial.

Speaker Change: A really strong differential between last year in terms of net tax clothes and been out to a market.

Speaker Change: And we've never actually had a.

Speaker Change: Springboard.

Speaker Change: At this time.

Speaker Change: Do you know, we're almost we're almost halfway through the third quarter now.

Speaker Change: Okay, Great and then.

Robert Bugbee: Great, and then I understand that definitely strong rates. I just wondered if you thought it was a move on seasonality or anything that you're looking at. No, this is a pure seasonality that changed between May, June, and now.

Robert L. Bugbee: That's great, and then um... No, I understand that. Definitely strong rates. I just wondered if you thought it was a move on seasonality or anything that you're looking into. No, this is pure seasonality, the change between May, June, and now.

No I understand that definitely strong rates I just wondered if you if you thought.

Speaker Change: It was a move on seasonality or anything that youre looking at.

Speaker Change: P S.

Speaker Change: Seasonality the change between May June and now yeah.

Robert L. Bugbee: Yeah. So, Robert, last week we chatted, you talked about customers increasing their interest in three-year time charters. You know, are you still seeing that interest as high, or are they getting nervous about the state of the market and looking to lock in longer term? What are your discussions like now? Well, I think that the... I think the demand is there, and T'Challa is still doing it.

Robert Bugbee: Yeah, so Robert, last week we chatted; you would talk about customers increasing the interest in three or time charters. Are you still seeing that interest as high? Are they getting nervous on the state of the market and looking to lock in longer term? What are your discussions like now? Well, I think the inquiry is there, and the charters still doing it again. I think we have to remember that this is a, I think in many industries and as well, especially the geopolitical thing. In fact, I think that people are, you know, in taking the holiday for the last three weeks or so, and we'll probably continue to have quiet market in terms of what you're talking strategically.

Speaker Change: Yeah, So Robert last week, we chatted you would talked about customers.

Speaker Change: Creasing the interest in <unk> and three year time charters.

Speaker Change: Are you still seeing that interest as high or are they.

Speaker Change: Getting nervous on on the state of the market and looking to lock in longer term what are your what are your discussions like.

Robert: Well I'd say a good day.

Speaker Change:

Speaker Change: And I think the quality is there and the child is still doing it again I think we have to remember that you know.

Robert L. Bugbee: Again, I think we have to remember that, you know, this is a, I think in many industries, and in ours as well, especially with the geopolitical things, I think that people are... You know, we've been taking a holiday for the last three weeks or so, and we'll probably continue to have quiet markets in terms of what you're talking about strategic things. So I would expect that there... activity in terms of a willing charterer and a willing owner getting together again in another three or four weeks. In the meantime, you may have, you know, a handful of fixtures or lower activity along the way. Great I appreciate the time, Robert.

<unk>.

Speaker Change: I think in many industries and in all of this as well, especially with the geopolitical thing, but I think that people are you.

Speaker Change: You know we've taken a holiday for the last three week, who calls and will probably continue to have quiet market in terms of what are you talking strategic thing So I would expect that.

Robert Bugbee: So I would expect that the activity in terms of willing, willing charter and a willing owner, getting together, will start to occur again in, you know, another three or four weeks. In the meantime, you may have, you know, a handful of pictures or lower activity along the way.

Speaker Change: Activity in terms of they're willing willing charterer and are willing owner.

Speaker Change: And together, we will start to occur again.

Speaker Change: Another three or four weeks and in the meantime, you may have.

Speaker Change: You know a handful of fixtures go lower activity along the way.

Robert Bugbee: Great, appreciate the time, Rob. Thank you. Thanks.

Speaker Change: Great I appreciate the time thank you.

Speaker Change: Thanks.

Greg Morris: Our next question comes from Greg Morris of B.T.R.G. Go ahead, please. Hi, thank you, and good morning, good afternoon, everybody. Thanks for taking my questions. You know, I just had a couple of market questions. One is, you know, I guess, you know, in the last couple of days, you know, with Dan Goade, I guess they're now allowed to buy crude directly from NNPC. And any kind of thoughts on what that has potential to do in terms of, you know, increasing volumes from Dan Goade, is that something that, you know, that market participants are thinking about or, you know, hey, it's, or is it kind of, hey, it's challenging the ramp up a refinery and it's, you know, it's just going to take a while.

Speaker Change: Our next question comes from Greg Lewis of H P. I G kind of place.

Robert L. Bugbee: Thank you. Our next question comes from Greg Lewis of BTIG. Go ahead, please. Hey, thank you, and good morning.

Gregory Robert Lewis: Good afternoon, everybody. Thanks for taking my questions. Um, you know, I just had a couple of market questions. One is, you know, I guess, in the last couple days with Dan Goatee, I guess they're now allowed to buy crude directly from an NPC. Any kind of thoughts on what that has the potential to do in terms of, you know, increasing volumes from Dan Goatee?

Gregory Robert Lewis: Hi, Thank you and good morning, good afternoon, everybody. Thanks for taking my questions.

Gregory Robert Lewis: I just had a couple of market questions. One is you know I guess you know in the last couple of days you know, what's Dan Goldie.

Speaker Change: I guess, they're now allowed to buy crude directly from N N. P say any kind of thoughts on what that has the potential to do in terms of you know increasing volumes from tango. Two is is that something that you know.

Gregory Robert Lewis: Is that something that, you know, that market participants are thinking about, or, you know, hey, it's, or is it kind of, hey, it's challenging the ramp-up refinery and it, You know, it's just going to take a while? Well, yeah, Greg, I think you're right. I think it takes time. I think it's sensitive to different crude pipelines.

Speaker Change: That market participants or thinking about or you know hey, it's or is it kind of how it gets challenging though ramp up a refinery and it's you know.

Speaker Change: It's just going to take awhile.

Speaker Change: Oh, Yeah, Greg I think I think you're right I think it. It takes time I think it's sensitive to different crude types I for us I think what we're focused on its first just looking at what's been exported.

James Doyle: Yeah, Greg, I think, I think you're right. I think it; it takes time. I think it's sensitive to different crude types. I, for us, I think what we're focused on is first just looking at what's been exported. You know, you've had jet fuel and fuel oil and nap. This summer, sorry, not this summer next year, we expect the RSC units probably to come online early next year, where they'll start making more gasoline and then we'll see how the trading dynamics play out. But in terms of the ramp-up stage, like other refineries, it takes time. And so they're going to go through some challenges here.

James Doyle: For us, I think what we're focused on is first just looking at what's been exported. You know, you have jet fuel and fuel oil and NAFTA. This summer, sorry, not this summer, next year. We expect the RSEC units to probably come online early next year, when they'll start making more gasoline, and then we'll see how the trading dynamics play out. But in terms of the ramp-up stage, like other refineries, it takes time, and so they're going to go through some challenges here. I know they had a fire a few weeks ago due to an effluent tank that was leaking. So, you know, just the regular kind of run-ups to run up.

Speaker Change: Jet fuel and fuel oil and naphtha.

Speaker Change: This summer sorry, not this summer next year, we expect.

Speaker Change: RFC senior Nats, probably to come online in early next year, where they start making more gasoline and then we'll see how the trading dynamics play out but in terms of the ramp up stage like other refineries. It takes time and so theyre going to go through some challenges here I know they've got a fire a few weeks ago.

James Doyle: I know they had a fire a few weeks ago due to an effluent tank that was leaking. So, you know, just regular kind of run-ups to run up. But the positive is we started to see exports come out on the product side. And I think that's a lot more bullish for the market than people were anticipating from products perspective.

Speaker Change: Due to and ethylene tank that that was leaking. So just regular kind of a run ups to run off but the positive is we starting to see exports come out on the product side and I think that's a lot more bullish for the market than people were anticipating from from a products perspective.

James Doyle: But the positive is we're starting to see exports come out on the product side, and I think that's a lot more bullish for the market than people were anticipating from a product perspective. Okay, great. And then just one more for me.

Speaker Change: Okay, Great and then just one more for me.

James Doyle: Okay, great. And then just one more for me, realizing that the scrubbers have been a great investment and have more than paid for themselves. A lot of fuel gets moved by product hackers. So just kind of curious, maybe at a high level, if you have thoughts around the recent move lower in the spread low sulfur and high sulfur fuel, just kind of curious how you're thinking about that. And hey, maybe it's just maybe this $100 price is the new normal, or is there something kind of seasonal or something that you see in the market that is keeping that spread lower than where it historically has been?

Gregory Robert Lewis: You know, realizing that the scrubbers have been a great investment and have more than paid for themselves. You know, a lot of fuel gets moved by product tankers. So, just kind of curious, you know, maybe at a high level, if you have thoughts around the recent move lower in the spread between low sulfur and high sulfur fuel at www.larryweaver.com. Um, I could take that if you want, Greg. That'd be great. Cameron, how are you? Yeah, I'm great.

Speaker Change: You know realizing that you know this.

Speaker Change: Scrubbers have been a great investment and have more than paid for themselves. You know a lot of fuel gets moved by product tankers. So just kind of curious you know maybe at a high level. If you have thoughts around you know the recent move lower you know in the spread between low sulfur and high.

Speaker Change: Sulfur fuel is.

Speaker Change: You know like just kind of curious how you're thinking about that and in hey, maybe it's just maybe this hundred dollar prices the new normal or is there something kind of seasonal or something that you're seeing in the market that as you know I guess keeping that spread lower than where it historically has been.

James Doyle: I can take that if you want, Greg. That'd be great. Came out real. Yeah, I'm great. Thank you. So we expect the spread to stay pretty narrow for the foreseeable future. In fact, there were, you know, regulatory reasons, but more important timing issues, important timing issues around our investment and scrubbers, where we predicted successfully a widen spread for a period of time, but our long term forecasts have been a narrower spread for reasons I could get into. So if we had to make that decision again today, it wouldn't be a great return on our capital.

Speaker Change: I can take that if you want Greg.

Gregory Robert Lewis: That'd be great came out Oh, yeah.

Gregory Robert Lewis: Yeah, great. Thank you. So we expect the spread to stay pretty narrow for the foreseeable future in fact.

Cameron Mackey: So we expect the spread to stay pretty narrow for the foreseeable future. In fact, there were, you know, regulatory reasons, but more important timing issues, important timing issues around our investment in scrubbers, where we predicted successfully a wider spread for a period of time, but our long-term forecasts have been a narrower spread for reasons I could get into. So if we had to make that decision again today, it wouldn't be a great return on our capital.

Speaker Change: There were you know.

Speaker Change: Regulatory reasons, but more important timing issues important timing issues around our investment in scrubbers, where we.

Speaker Change: Predicted successfully.

Speaker Change: A widened spread for a period of time, but our long term forecast had been in a narrow spread.

Speaker Change: If I could get into so if we had to make that decision again today.

Speaker Change: It wouldn't be a great return on our capital.

James Doyle: Okay, great.

Speaker Change: Okay, great. Thank you.

James Doyle: Thank you.

Speaker Change: Yeah.

Ben Nolan: The next question comes from Ben Nolan of Stifel. Go ahead, please. Yeah, I appreciate it. So I guess I have a couple of market questions myself. There's been, has been, continues to be some noise about crude tankers trading in the products. You know, we don't have great visibility into that sort of thing.

Speaker Change: The next question comes from Ben Nolan of Stifel Go ahead. Please.

Ben Nolan: Great, thank you. The next question comes from Ben Nolan of Stifle. Go ahead, please.

Ben Nolan: Yeah, I appreciate it. So, I guess I have a couple of market questions myself. There's been, has been, and continues to be some noise about crude tankers trading in products. You know, we don't have great visibility into that sort of thing. And so I was hoping that maybe you could give me a little bit of an update on how that's playing out and if there's been any shifts or changes or, or, or, or what you're seeing in that respect. [inaudible] Cam, I'll start, and maybe you can add if I leave something out.

Ben Nolan: I appreciate it.

So I guess I have a couple of market questions myself. The theres been has been and continues to be some some noise about crude tankers trading in the products.

You know, we don't have great visibility into that sort of thing and so I was hoping that maybe you could give.

James Doyle: And so I was hoping that maybe you could me a little bit of an update on how that's playing out and if there's been any shifts or changes or what you're seeing in that respect. I can't. I'll start, and maybe you can add if I leave something out. Sure, no, no. Then we have; we have seen it. So it's predominantly Sue's maxes that have carried distillate specifically diesel from India to the UK. They're going to discharge later this month and next month. The challenge is where do they go after? We can tell you that it's been done predominantly by commodity traders.

Speaker Change: Give me a little bit of an update on on how that's playing out and if there's been any shifts or changes or or or what you're seeing in that respect.

Speaker Change: Okay.

I Cam I'll start and maybe you can add if I leave something out.

James Doyle: Sure, no, no, please. Ben, we have seen it, so it's predominantly Suez Maxxes that have carried distillate, specifically diesel, from India to the UK. They're going to discharge later this month and next month. The challenge is, where do they go afterward? We can tell you that it's been done predominantly by commodity traders, so where that vessel goes after it discharges and it will need to lighter to smaller vessels remains unclear. But you would have to have a very weak crude oil market for those vessels to want to travel back to the Middle East or India to try to load another clean cargo.

Speaker Change: No no.

Speaker Change: It has been we have seen we have seen that so it's predominantly suezmax is that have carried a distillate specifically diesel.

Speaker Change: On India to the U K are they're gonna discharge later this month and next month.

Speaker Change: The challenge is where do they go after we can tell you that it's been done predominantly by commodity trader, so where that vessel goes after discharges and it will need to wider to smaller vessels remains unclear.

James Doyle: So where that vessel goes after it discharges, and it will need to lighter to smaller vessels remains unclear. But you would have to have a very weak crude oil market for those vessels to want to travel back to the Middle East or India to try to load another clean cargo. Yeah. The only thing I'd had been consistent with what we've said in in previous quarters and years is it is a significant investment to clean up a larger vessel that's been trading dirty. And so you're not talking about an easy process. In fact, you don't only have to clean the vessel, but you have to find intermediate cargoes that aren't as prone to contamination, like condensate, for example, in order to get that clean history.

Speaker Change: But you would have to have more.

Speaker Change: Very weak crude oil market.

Speaker Change: For for those vessels to want to travel back to the middle East or India to try to learn and other clean cargo.

Speaker Change: Yeah.

Speaker Change: Yeah. The only thing the only thing I'd add Ben is it consistent with what we've said in previous quarters and years as it is a significant investment to clean up a larger vessel that's been trading dirty.

James Doyle: The only thing I'd add, Ben, is consistent with what we've said in previous quarters and years, is that it is a significant investment to clean up a larger vessel that's been trading dirty. And so you're not talking about an easy process. In fact, you not only have to clean the vessel, but you have to find intermediate cargoes that aren't as prone to contamination, like condensate, for example, in order to get that clean history.

Ben Nolan: And so you're not talking about an easy process in fact.

Speaker Change: We have to clean up the vessel, but you have to find intermediate cargoes that aren't as prone to contamination like condensate for example.

Speaker Change: In order to get that clean history.

Cameron Mackey: Once they are cleaned up, historically, those same traders that James is referring to do not want to keep those vessels clean. They want to re-deliver them, because they have them mostly on charter themselves, want to re-deliver them back to the owner in a dirty condition. So whether it's a single voyage or several voyages, it has historically been a temporary thing and not ships cleaning up for long periods of time. Okay, that's a good color.

Speaker Change: Once they.

James Doyle: Once they are cleaned up, historically, those same traders that James is referring to do not want to keep those vessels clean. They want to re-deliver them because most they have them mostly on charter themselves want to re-deliver them back to the owner in a dirty condition.

Speaker Change: They are cleaned up.

James: Storage lease those same treaters that James.

Speaker Change #100: Referring to do not want to keep those vessels clean they want to redeliver them, because most mostly on charter themselves want to redeliver them back to the owner in a dirty condition.

James Doyle: So whether it's a single voyage or several voyages, it has historically been a temporary thing and not ships cleaning up for long periods of time. Okay, it's a great color; I appreciate it.

Speaker Change #100: So whether it's a single wage or several voyages.

Speaker Change #100: It is.

Speaker Change #101: Historically been a temporary Uh huh.

Speaker Change #101: A temporary thing and not chips cleaning up for long periods of time.

Speaker Change #101: Okay.

Ben Nolan: And then the next question is, you know, and I know this is, this is a wall of worry kind of thing, but I continue to sort of see that order book to fleet ratio moving higher. And I know that, you know, after the AfriMax, LR2 versus AfriMax and in age and everything else, just out of curiosity, is there a point at which you'd say, Oh, geez, I don't know, whatever it is 20% order book to fleet ratio or something that's starting to get frothy or, you know, just some senses, where you might think we are in that I mean, the outlook is very strong for the next two, you know, two, three years still. And you've got the aging counterbalancing, as you're saying.

Speaker Change #102: That's good color I appreciate it.

James Doyle: And then the next question is, you know, and I know this is a wall of worry kind of thing, but continue to sort of see that order both to fleet ratio moving higher. And I know that you know the Affirmax point LR2 versus Affirmax and age and everything else. Just out of curiosity, is there a point at which you'd say, oh geez, I don't know, whatever it is, 20% order booked to fleet ratio or something, that's starting to get frothy or you know, just some senses where you where you might think we are in that in the slope of risk with respect to supply.

Speaker Change #103: And then the next question is yeah, and I and I know. This is this is a wall of worry kind of thing but.

Speaker Change #104: You continue to sort of see that that order book to fleet ratio moving higher and I know that you know after the the Aframax LR, two versus Aframax, and and age and everything else, but just out of curiosity is there a point at which you say Oh geez I don't know whatever it is 20% order book to fleet.

Speaker Change #105: Ratio or something.

Speaker Change #106: That's starting to get frothy or.

Speaker Change #107: Just some sense is where are you where you might think we are in that are in that and the slope of of risk with respect to supply.

Speaker Change #107: Well.

Speaker Change #108: We don't we think were quite at the moment.

James Doyle: We don't think we're fine at the moment. And then the outlook is pretty strong next to, you know, two, three years still, and you've got the aging count balance. You just saying, you've also got a market that, you know, yes, you had these movements from crude oil ships carrying, you know, cleaning up and carrying clean, but as I said before, this market is at a record high because it's time of year, so it's absorbing that as well. So, no, we're fine. And, you know, it's a good try then, but there's no possible way we're going to start posting on our website.

Speaker Change #108: And the outlook is quite strong right now.

Speaker Change #109: Three years still got the aging counterbalance the thing.

Robert L. Bugbee: You've also got a market that, you know, yes, you've had the movements from crude oil ships carrying, you know, cleaning up and carrying clean. But as I said before, this market is, you know, it's at a record high for this time of year, so it's absorbing that as well.

Speaker Change #109: You've also got a market that you know.

Speaker Change #110: Yes, you had the.

Speaker Change #110: Movements from crude oil ships carrying you know clean me up and carrying clean but is it the pool is marketed.

Speaker Change #111: No. It's at a record high because it's kind of a year, so it's absorbing that as well.

Robert L. Bugbee: So, um... No, we're fine. And, you know, it's a good try then, but there's no possible way we're going to... start posting on our website and my little chart saying, you know, at this point, the market is out of supply, so we'll stop. 400. But it's a good card.

Speaker Change #110: So.

Speaker Change #110: No, where we acquire them and you know the good try them, but there's no possible way we're gonna.

Speaker Change #113: Got posted on our website in months ago, chopped, saying yeah.

James Doyle: I'm not going to go chop, saying, you know, at this point, the market is over supplied close to four under two. Well, but it's a good. Yeah, it's always the first. Yeah. All right, I appreciate it. Thank you, guys.

Speaker Change #119: At this point the market is over supplied whose scope.

Speaker Change #112: Well what it is.

Speaker Change #110: Goodbye.

Speaker Change #114: Oh, Yeah, yeah yeah.

Speaker Change #114: Always the first so yeah.

Speaker Change #114: Yeah.

Speaker Change #114: Cool.

Speaker Change #116: Alright I appreciate it thank you guys.

Chris Robertson: The next question comes from Chris Robertson of Deutsche Bank. Go ahead, please. Hi, everyone. Good morning. Thanks for taking my questions.

Speaker Change #115: Our next question comes from Chris Robertson of Deutsche Bank Go ahead. Please.

Robert L. Bugbee: Yeah, it's always a first. Yeah. All right, I appreciate it. Thank you, guys. The next question comes from Chris Robertson of Deutsche Bank. Go ahead, please. Hey, everyone. Good morning.

Christopher Warren Robertson: Hi, everyone. Good morning, Thanks for taking my questions. Let me first by saying congratulations on significantly lowering our cash breakeven level here I think it highlights. The strong efforts you guys have done to strengthen the balance sheet over the last several quarters. So I'm on that point, maybe Chris what will the cash breakeven level be do you think by the end of 2020.

Christopher Warren Robertson: Thanks for taking my questions. Let me first say congratulations on significantly lowering the cash breakeven level here. I think it highlights the strong efforts you guys have made to strengthen the balance sheet over the last several quarters. So on that point, maybe, Chris, what will the cash breakeven level be, do you think, by the end of 2025, if the debt prepayments and normal quarterly amortization continue? Hi Chris, thanks for the question. End of 2025 cash break even. So you have to layer in a lot of assumptions there.

Chris Robertson: Let me first by saying congratulations on significantly more in the cash, breaking the level here. I think it highlights the strong efforts you guys have done to strengthen the balance year of the last several quarters. So, on that point, maybe Chris, what will the cash breaking the level be? Do you think by the end of 2025, if the debt prepayments and normal quarterly amortization continues? Hi, Chris. Thanks for the question. End of 2025 cash break even. So, you have to wait here in a lot of assumptions there. Like we said earlier, we have this revolver, which we could potentially repay.

Speaker Change #118: Five yes, the debt prepayments and normal quarterly amortization continues.

Christopher Warren Robertson: Okay.

Christopher Warren Robertson: Hi, Chris Thanks for the question.

Speaker Change #120: End of 'twenty twenty-five cash break even so you you have to when Youre in a lot of assumptions there are like we said earlier.

Christopher Avella: Like we said earlier, we have this revolver which we could potentially repay. We could potentially get down to below $12,000 per day, assuming these prepayments.

Speaker Change #121: We have this revolver, which we could potentially repay.

Chris Amella: We could potentially get down to below $12,000 per day, assuming these prepayments. By the end of 2025, you have to take into consideration things like inflation and the resumption of certain debt repayments. The big one on our billion dollar credit facility does not resume until September of 2026, so there's still some time there. So I would guess somewhere around 13 or so to directly answer your question. That's just an estimate right now. Okay, yeah, that's fair.

Speaker Change #121: We could potentially get down to below $12000 per day.

Speaker Change #122: I'm assuming these prepayments.

Christopher Avella: By the end of 2025, you have to take into consideration things like inflation and the resumption of certain debt repayments. The big one on our billion-dollar credit facility does not resume until September of 2026, so there's still some time there, so I would guess somewhere around 13 or so, to directly answer your question. That's just an estimate right now. Okay, yeah, that's fair. Um, this is more of a high-level strategic question, maybe for Robert.

Speaker Change #122: At the end of 2025, and you have to take into consideration things like inflation.

Speaker Change #122: And the resumption of.

Speaker Change #122: Certain debt repayments.

The big one on our $1 billion credit facility does not resume until September of 'twenty 'twenty six so there's still some time there. So I would guess somewhere around 13 or so to directly answer. Your question. That's just an estimate right now.

Speaker Change #123: Okay, Yeah, that's fair.

Robert Bugbee: This is more of a high-level strategic question, maybe for Robert. Maybe not looking into the near future, Robert, but looking out a few years ahead. Are there any segments beyond the traditional, you know, refined product tanker space, whether it's in chemicals, whether it's in carbon capture and transport, any other sectors that might interest you in the future that are a bit tangential to the core of the business that I could look more attractive in the coming years? We'll pass on that. That's it. We'll pass on that.

Speaker Change #123: This is more of a high level strategic question maybe for Robert.

Christopher Avella: Maybe not looking into the near future, Robert, but looking at a few years ahead, are there any segments beyond the traditional, you know, refined product tanker space, whether it's chemicals, whether it's carbon capture and transport, any other sectors that might interest you in the future that are a bit tangential to the core of the business that could look more attractive in the coming years? We'll pause on that.

Robert: Maybe not looking into the near future Robert but looking out a few years ahead are there any segments beyond the traditional you know refined product tanker space, whether it's in chemicals, whether it's in carbon capture and transport any other sectors that might interest you in the future that are a bit in general to the core of the business that I could look.

Robert: More attractive than that.

Robert: Coming years.

Speaker Change #124: Oh, good pulse on that.

Speaker Change #124: Okay.

Speaker Change #124: Right.

Speaker Change #125: We could pass on that.

Robert L. Bugbee: Thanks for watching. All right. Well, that's it for me, guys.

Speaker Change #125: Okay.

Chris Robertson: Okay, all right, well that's it for me, guys. Thank you for the time.

Alright, well that's it for me guys. Thank you for the time.

Speaker Change #126: Thank you.

Operator: Thank you.

fight: Our next question comes from fight.

Frode Morkedal: Our next question comes from Frode Morkedal, from Clarkson Securities. Go ahead, sir. Thank you. Thank you, guys.

Christopher Warren Robertson: Thank you for your time. Thank you. Our next question comes from Frode Morkedal from Clarkson Securities. Go ahead, sir.

Speaker Change #128: Mark It out from Clarksons Securities go ahead Sir.

Speaker Change #129: Thank you.

Frode Morkedal: Thank you. Thank you. Thank you.

Speaker Change #130: Hey, guys.

Speaker Change #129:

James Doyle: Interesting chart on this page 12 where you show the LR2s trading clean, right? 56% percent. Right now, that seems to be fairly in line with long-term averages, but it's certainly above last year's level. Roughly when I look at this chart, maybe it was 52% last year. So, last year, more of the LR2s are trading dirty or crude, not how they're trading clean. That's been a negative least growth, right? Of probably 4% on the LR2s, and then I guess is what Ben's talking about the crude. But do you have any crude tanker trading clean? Do you have any data points of how much are we talking about?

Frode Morkedal: Interesting chart on page 12, where you show the LR2s trading clean, right, 56%. Right now, that seems to be fairly in line with long-term averages, but it's certainly above last year's level. Roughly, when I look at the chart, maybe it was 52% last year. Last year, more of the LRQs were trading dirty or crude; now they're trading clean, so that's been a negative. Please grow. Try it; you'll probably win 4% on the lottery.

Speaker Change #131: Interesting chart on this page 12, where you show the election is trading clean right.

Speaker Change #132: The 6%.

Speaker Change #133: Right now that seems to be turned in line.

Speaker Change #133: Long term averages.

Speaker Change #134: Certainly above last years level.

Speaker Change #134: Level and roughly when I look at the chart, maybe about 52% last year. So.

Speaker Change #134: Last year more of their luxury was a trading update.

Speaker Change #135: They don't know how they're creating clean so that's been a negative.

Speaker Change #135: This broke.

Speaker Change #135: Probably 4%.

Speaker Change #135:

Frode Morkedal: And then I guess this was Ben talking about crude oil, but do you have any, through tankers trading clean? Do you have any data points on how much we are talking about? How many investments are we talking about here? You're asking about the LR2s, Frode, how many have cleaned up, or not? I was talking about the accrued tankers, the VLPCs, the Sephora, and Cleaning. How many vessels are we talking about? [inaudible] Well, if I take the 20 count you mentioned, that's probably like 1%. So we're talking about maybe 2% higher effective leaf growth year on year, right? That's probably enough to explain why LF2s are $40,000 instead of $6,000.

Speaker Change #135: And then I guess.

Speaker Change #135: <unk> been talking about the crude but do you have any.

Speaker Change #135: Crude tankers trading clean them do you have any data points of or how much.

Speaker Change #136: Oh are we talking about how many vessels are we talking about here.

James Doyle: How many lessons are we talking about here? You're asking on the LR2s product, how many had cleaned up or how many?

Speaker Change #136: Yeah.

Speaker Change #136: You're you're asking on the on the LR twos Proto how many you have cleaned up or.

Speaker Change #136: Or how many I'm, sorry, I would still characterize them no I was thinking about the crude tankers the vlccs are creating.

James Doyle: Sorry, I was talking about the crude tankers. We've seen different estimates. So, if you look at like vessel tracking data specifically, the numbers probably around 12 because they've had to already have loaded that cargo. If you look at some broker reports, it can be up to 20 ships. That was something that we're tracking. What we don't know, and as Cameron highlighted, once that vessel arrives with that clean cargo to say, you're up if it's going to continue. So, it's something we're monitoring. We don't think that this is going to be sustainable long-term because we're bullish on the crude oil segment as well, but it's something we're monitoring, and we'll see.

Speaker Change #136: I mean, how many vessels that we're talking about.

Speaker Change #137: We've seen we've seen different estimates.

Speaker Change #138: So if you look at like vessel tracking data specifically the numbers probably around 12, because they've had to already have worded that cargo. If you look at some broker reports it can be up to 20 ships.

Speaker Change #138: It's something that we're tracking.

Cameron: What we don't know and that's Cameron highlighted once that vessel arrives with that clean cargo to say Europe.

Cameron: If it's going to continue so it's something we're monitoring we don't think that this is gonna be.

Hannibal long term because we're bullish on the crude oil segment as well, but it's something we're monitoring and.

Cameron: We'll see.

James Doyle: Okay, well, if I take the 20 count you mentioned, that's probably like a 1%. So we're talking probably like maybe 2% higher effective growth year-on-year, right? And that's probably enough to explain why a lot of those are 40,000 out of 60. So, yeah, rates are still good, but they could have been even higher, right? Well, the question is what happened when they, if they turn back the crude again, right? So the crude oil hope trade for it again, we're really happy with our 40th day and we're not complaining that it shouldn't be higher than you know, we hope that the LC market gets stronger sometimes.

Cameron: Sure.

Speaker Change #140: Well, it's I think there are plenty count dimension, that's probably like a 1%.

Speaker Change #140: So we're talking probably look maybe 2%.

Speaker Change #140: Higher effective lease growth year on year right.

Speaker Change #140: That's that's probably enough to explain why I, let to the 40000 instead of 60.

Speaker Change #140: So yes rates have been good but it could have been even higher right.

Robert L. Bugbee: So yeah, rates are still good, but they could have been even higher, right? So the question is, what happens if they turn back to crude again, right? Ah, the crude oil hope trade photo again. I think we're really happy with our 40 a day, and we're not complaining that it's going to be higher. We hope that the VLC market gets stronger sometime. It's been showing much promise now, so that's what it is. Fair enough. It seems like the Afro-Maxims and LO2s are fairly equal now in the spot market, so hopefully that will change back.

Speaker Change #141: So the question is.

Speaker Change #142: What happens when they if if the turn back to crude I guess, but oh crude oil hope trade creditor again.

Speaker Change #141: Thanks.

Speaker Change #141: They were really happy with all 40, a day and we're not complaining, but it'll be higher than you know, we we hope that the VLCC market get stronger some thought.

James Doyle: It's been showing much comments now, so that's what it is. Yeah, fair enough, it seems like an affirmation is not a lot to use us, say they equal now in the spot market, so yeah, they will change back.

Speaker Change #143: It's been selling much gauntlet smell fill it up with you.

Speaker Change #143: Yeah.

Speaker Change #144: Fair enough. It seems like you have a mechanism that luxury is outstanding equal now in the spot market. So yeah, hopefully that they will change back.

Robert L. Bugbee: Okay. Thank you very much, guys. Our next question comes from Liam Burke of B. Reilly FBR. Go ahead, please. Yes, thank you. I've got another macro question.

James Doyle: Okay, thank you very much, guys.

Speaker Change #145: Okay. Thank you very much less.

Liam Burke: Our next question comes from Liam Burke of B.

Speaker Change #145: Our next question comes from Liam Burke of B Riley FBR go ahead. Please.

Liam Dalton Burke: You know, on slide number eight, you're showing nice steady demand growth for refined products. The ton-mile demand has gotten a boost from the redistribution of global refinery capacity. This has been a multi-year event. How long do you see the redistribution of refinery capacity rolling out past this year and keeping ton-mile demand up there? Liam, it's a good question. I mean, there are a few refineries coming online outside of China. We highlighted Gangote, we've got Des Bocas, but really, the outlook is going to be addition by subtraction.

Liam Burke: Riley S. B. R. Go ahead, please. Thank you. I've got another macro question. You know, on slide number 8, you're showing nice, steady demand growth for refined products. The tonne mild demand has gotten a boost by the redistribution of global refinery capacity. This has been a multi-year event. How long do you see the redistribution of refinery rolling out past this year and keeping tonne mild demand up there? Liam, it's a good question. I mean, there's a few refineries coming online outside of China. We highlighted Dan Gote; we've got this focus, but really the outlook is going to be addition by subtraction.

Liam Dalton Burke: Thank you I've got another macro question.

Speaker Change #147: Slide number eight you're showing nice steady demand growth for refined products.

Speaker Change #148: Ton mile demand has gotten a boost by the redistribution of global refinery capacity.

Speaker Change #149: This has been a multiyear event how long do you see the redistribution of refinery are rolling out past, this year and and keeping ton mile demand up there.

James Doyle: So there are three refineries that are going to close next year for around 600,000 barrels of oil between the U.S. and Europe, two in Europe and one in the U.S. And so I think we're going to continue to see older refineries close and then have more modern refineries export product to those regions as demand increases or stays the same in those regions, as well as grows in other places. So I think this is going to be a long-term trend that's going to benefit product tankers as products are reshuffled around as refinery production closes in certain areas. Okay, so you're looking at a multi-year event, you've got an order book, which you've highlighted 14% over a period of time, plus you have scrapping.

Speaker Change #150: We and that's a it's a good question I mean, there is a few refineries coming on line outside of China. We highlighted Dan go day, we've got a spoke us but really the the outlook is going to be addition by subtraction. So there's three refineries that are going to close next year for around 600000 barrel.

James Doyle: So it's safe to think that if you're looking on the supply side based on ton mile demand, you'll continue to see a nice gap there on the supply and demand side. Great. Thank you, James. This concludes our question and answer session. I would like to turn the conference back over to CEO Emanuele Lauro for any closing remarks. Thank you very much, operator. We do not have any closing remarks apart from thanking everybody for their time and attention today and look forward to speaking with you all soon. Thanks a lot. The call is concluded. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

James Doyle: So there's three refineries that are going to close next year for around 600,000 barrels between the US and Europe, two in Europe, one in the US, and so I think we're going to continue to see older refineries close and then have, you know, more modern refineries export product to those regions as demand to increases or stay the same in those regions as well as grows in other places. So I think this is going to be a long-term trend that's going to benefit product tankers as products are reshuffled around as refinery production closes in certain areas.

Speaker Change #150: Between the U S and Europe.

Speaker Change #150: Two in Europe, one in the U S and so I think we're going to continue to see older refineries close and then have you know a more modern refineries export product to those regions as demand.

Speaker Change #150: Increases are safe and staying in those regions as well as growth in other places. So I think this is going to be a long term trend, that's gonna Baxter product tankers as products or reshuffled around as refinery production clauses in certain areas.

James Doyle: Okay, so you're looking at a multi-year event, you've got an order book which you've highlighted 14 percent over a period of time, plus you have scrapping. So it's safe to think that if you're looking on the supply side based on tonne mild demand, you'll continue to see, you know, a nice gap there on a supply-demand side. Exactly.

Speaker Change #151: Okay. So you were looking at a multiyear event, you've got an order book, which you've highlighted 14% over over a period of time plus you have.

Speaker Change #151: Scrapping so it's safe to think that if you're looking on the supply side based on ton mile demand you'll continue to see.

Speaker Change #151: A nice gap there on the supply demand side.

Speaker Change #151: Exactly.

James Doyle: Okay, great, thank you, James.

Speaker Change #152: Okay, great. Thank you James.

Speaker Change #152: Yeah.

Operator: This concludes our question and answer session.

Speaker Change #152: This concludes our question and answer session I would like to turn the conference back over to CEO, Tim on your outlook.

Emanuele Lauro: I would like to turn the conference back over to CEO Emmanuel Loro for any closing remarks. Thank you very much, but I do not have any closing remarks, apart from thanking everybody for their time and attention today and look forward to speaking with you all soon. Thanks a lot.

Tim: For any closing remarks.

Speaker Change #152: Yeah.

Tim: Thank you very much operator, we do not have any closing remarks apart from thanking everybody for their time and attention today and look forward to speaking with you. All soon thanks, a lot called is concluded.

Operator: The call is concluded. The conference has now concluded. Thank you for attending today's presentation.

Speaker Change #154: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Operator: You may not disconnect.