Q2 2024 Seanergy Maritime Holdings Corp Earnings Call
Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Synergy Maritime Holdings Co-op Conference Call on the 2nd Quarter, 6th Month and June 30th 2024 Financial Results. We have with us Mr. Stamatis Tsantanis, Chairman and CEO, and Mr. Stavros Gyftakis, Chief Financial Officer of Senegi Maritime Holdings Corp. At this time, all participants are in listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you would like to ask a question, please press star 1 and 1 on your telephone keypad. You will then hear an automated message advising your hand is raised.
Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Sanage Maritime Holdings Cup conference call on the second court and six month ended June 30, 2024 financial results.
Thank you for standing by ladies and gentlemen, and welcome to the synergy Maritime Holdings' Cope conference call on the second quarter and six months ended June 30th Twenty-twenty full financial results.
Operator: We have with us Mr. Stamatis Santanis, Chairman and CEO, and Mr. Stavros Gyftakis, Chief Financial Officer of Sanage Maritime Holdings Cup.
Speaker Change: We have with US Mr Tomorrow to Centene is chairman and CEO.
Speaker Change: Mr. Salvatore gift pack is chief financial Officer, self synergy Maritime Holdings' Culp.
Operator: At this time, all participants are in listen on the mode. There will be a presentation followed by a question-and-answer session. At which time, if you would like to ask a question, please press star 1 and 1 on your telephone keypad. You will then hear an automated message advising your hand is raised. Please be advised that this conference call is being recorded today.
Speaker Change: At this time all participants are in listen only mode. There will be a presentation followed by a question and answer session at which time. If you would like to ask a question. Please press star one and one on your telephone keypad, you'll be then he had no debate that message advising you hadn't is raised.
Operator: Please be advised that this conference call is being recorded today, Tuesday, August 6th, 2024. The archive webcast of the conference call will soon be made available on the Senegi website www.senegimaritime.com. To access today's presentation and listen to the archived audio file, visit the Synergy website following the webcast and presentation section under the Investor Relations page. Please now turn to slide two of the presentation. Many of the remarks today contain forward-looking statements based on current expectations.
Speaker Change: Please be advised that this conference call is being recorded today Tuesday August six 2024.
Operator: She is stay August 6, 2024.
Operator: The archives webcast of the conference call will soon be made available on the Sanage website www.fanagemaritime.com. To access today's presentation and listen to the archive audio file, visit the Sanage website following the webcast and presentation section under the Investor Relations page. Please now turn to slide two of the presentation. Many other remarks today contain forward-looking statements based on correct expectations. Actual results may defamate a relief from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to defamate a relief from those in the forward-looking statements is contained in the second quarter and six month ended June 30, 2024 earnings release.
Speaker Change: The archived webcast of the conference call will soon be made available on the tonnage of website www dot signage and maritime Dot com.
Speaker Change: To access todays presentation and listen to the archived audio file fizzy descended your web site. Following the webcast and presentation section under the Investor Relations page.
Speaker Change: Please now turn to slide two of the presentation.
Speaker Change: Many of our remarks today contain forward looking statements based on current expectations.
Speaker Change: Actual results may differ materially from the results projected from those forward looking statements additional information concerning factors that can cause the actual results to differ materially from those in the forward looking statements is contained in the second quarter and six months ended June 30 F. 'twenty to 'twenty four earnings release.
Operator: Which is available on the Sanage website again www.fanagemaritime.com.
Speaker Change: Which is available on the furniture website again www don't send you my retired dot com.
Operator: The actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to differ materially from those in the forward-looking statements is contained in the second quarter and sixth month under June 30th, 2024 earnings release, which is available on the Senergy website again at www.senergymaritime.com. I would now like to turn the conference over to one of your speakers today, the chairman and CEO of the company, Mr. Stamatios Tsantanis. Please go ahead, sir.
Operator: I would not like to turn the conference over to one of you speaker today, the Chairman and CEO of the company.
Speaker Change: I would now like to turn the conference over to one of your speaker today, the chairman and CEO of the company Mr. Matthew Suntans. Please go ahead Sir.
Stamatis Santanis: Mr. Stamati Santanis, please go ahead, sir.
Stamatis Santanis: Thank you, operator.
Matthew Suntans: Thank you operator Hello.
Stamatis Santanis: Hello, I would like to welcome everyone to our conference call. Today we are presenting the financial results for the second quarter and first six months of 2024 and an update on our recent corporate developments. We will commence our call with a brief overview of our main highlights for the second quarter, which are fully aligned with our corporate strategy, namely maximizing several returns while growing our fleet and maintaining a healthy balance with it. Following a strong start to the year, the second quarter of 2024 marked another record in our profitability, with a net income of 14.1 million.
Stamatios Tsantanis: Hello, I would like to welcome everyone to our conference call. Today we are presenting the financial results for the second quarter and first six months of 2024 and an update on our recent corporate developments. We will commence our call with a brief overview of our main highlights for the second quarter, which are fully aligned with our corporate strategy, namely maximizing shareholder returns while growing our fleet and maintaining a healthy balance sheet.
Speaker Change: Like to welcome everyone to our conference call.
Speaker Change: Today, we're presenting the financial results for the second quarter and first six months of 2024 and an update on our recent corporate developments.
Speaker Change: We will commence our call with a brief overview or main highlights for the second quarter, which are fully aligned with our corporate strategy, namely maximizing shareholder returns, while growing our fleet and maintain a healthy balance sheet.
Stamatios Tsantanis: Following a strong start to the year, the second quarter of 2024 marked another record in our profitability with a net income of $14.1 million. Synergy's focus as a pure-play capesize owner proved advantageous as our segment outperformed the smaller dry-bulk vessel class. The capesize market continued its positive momentum with a robust capesize index averaging about $22,600 per day.
Speaker Change: Following a strong start to the year the second quarter of 2024 marked another record in our profitability with a net income of $14 1 million.
Stamatis Santanis: Sinuses focus as a pure play case size owner proved advantages as our segment outperformed the smaller drybark vessel classes. The case as market continued its positive momentum with a Baltic case size index averaging about $22,600 per day. During this period, our daily times at equivalent of $26,600 a day outpaced the case as indexed by impressive 18% thanks for active commercial strategy, resulting in quarterly net revenues of 43.1 million, up significantly from 28.3 million in the same quarter last year. For the six months ending June 30, we reported net revenues of 81.4 million, a substantial increase from 46.4 million in the same period last year, based on a daily times after equivalent of about $25,400 a day, which exceeded the Baltic Capesize average again.
Speaker Change: <unk> focus as a pure play Capesize owner proved advantages as our segment outperformed the smaller dry bulk vessel classes.
Speaker Change: The Capesize market continued its positive momentum with the Baltic Capesize index, averaging about $22600 per day.
Stamatios Tsantanis: During this period, our daily time-charter equivalent of $26,600 a day outpaced the KHIS index by an impressive 18% thanks to our active commercial strategy, resulting in quarterly net revenues of $43.1 million, up significantly from $28.3 million in the same quarter last year. For the six months ending June 30, we reported net revenues of $81.4 million, a substantial increase from $46.4 million in the same period last year, based on a daily time-charter equivalent of about $25,400 a day, which exceeded the Baltic Cape size average again. Our profit for the six-month period was $24.3 million.
Speaker Change: During this period, our daily time charter equivalent of $26600 a day.
Speaker Change: Based the Capesize index by an impressive 18% thanks to our active commercial strategy, resulting in quarterly net revenues of $43 1 million up significantly from $28 3 million in the same quarter last year.
Speaker Change: For the six months ending June 30, we reported net revenues of $81 4 million a substantial increase from $46 4 million in the same period last year based on a daily time charter equivalent of about $25400, a day, which exceeded the Baltic Capesize average again.
Stamatis Santanis: Our profit for the six-month period was $24.3 million.
Speaker Change: Our profit for the six month period was $24 $3 million.
Stamatis Santanis: Given these favorable market conditions and our strong financial performance, our bulk of directors has revised our dividend policy to further enhance our focus on returning capital to our shareholders. Details of this policy will be discussed in the next slide. For the second quarter, our cash dividend will be 25 cents per share, up from a combined 15 cents per share in the first quarter of the year. Additionally, we have repurchased common shares worth approximately $1.8 million since our last update, bringing total stock repurchases to $2.7 million since the beginning of the year. We remain optimistic about the capesize market and expect to continue generously rewarding our shareholders in the upcoming quarters.
Stamatios Tsantanis: Given these favorable market conditions and our strong financial performance, our Board of Directors has revised our dividend policy to further enhance our focus on returning capital to our shareholders. Details of this policy will be discussed in the next slide. For the second quarter, our cash dividend will be $0.25 per share, up from a combined $0.15 per share in the first quarter of the year. Additionally, we have repurchased common shares worth approximately $1.8 million since our last update, bringing total stock repurchases to $2.7 million since the beginning of the year.
Speaker Change: Given these favorable market conditions, and our strong financial performance. Our board of directors has revised our dividend policy to further enhance our focus on returning capital to our shareholders.
Speaker Change: Details of this policy will be discussed in the next slide for.
Speaker Change: For the second quarter, our cash dividend will be 25 cents per share up from our combined <unk> 15 per share in the first quarter of the year.
Speaker Change: Additionally, we have repurchased common shares worth approximately $1 million since our last update bringing total stock repurchases to $2 $7 million since the beginning of the year.
Stamatios Tsantanis: We remain optimistic about the capesize market and expect to continue generously rewarding our shareholders in the upcoming quarter. Regarding our growth initiatives, during the second quarter, we took delivery of the ICON ship, a 2013 Cape-sized vessel built in Japan, acquired earlier in the year for $33.6 million. As is typically the case with our ships, the ICON ship has commenced employment under an index-linked time charter and is earning a premium to the Baltic Apes as an index. Additionally, we expect to take delivery in September of one more cape-sized vessel built in 2012 in Japan.
Speaker Change: We remain optimistic about the capesize market and expect to continue generously rewarding our shareholders in the upcoming quarters.
Stamatis Santanis: In regards to our growth initiatives, during the second quarter, we took the delivery of the Iconship at 2013 capesize vessel, built in Japan, acquired earlier in the year for $33.6 million. As is typically the case with our ships, the Iconship has commenced employment under an index-linked insider and is earning a premium to the Baltic Capesize index. Additionally, we expect to take delivery in September of one more capesize vessel built in 2012 in Japan. It is encouraging to note that both vessels have appreciated in market value since our acquisition, underscoring once again the good timing of our transactions and strong capesize fundamentals in play.
Speaker Change: In regards to our growth initiatives during the second quarter, we took delivery of the icon ship at 2013 Capesize vessel built in Japan acquired earlier in the year for $33 $6 million as is typically the case with our ships.
Speaker Change: The ship has commenced employment under an index linked time charter and is earning a premium to the Baltic Capesize index.
Speaker Change: Additionally, we expect to take delivery in September of one more capesize vessel built in 2012 in Japan It.
Stamatios Tsantanis: It is encouraging to note that both vessels have appreciated in market value since our acquisition, underscoring once again the good timing of our transactions and the strong Tate fundamentals in play. I would also like to highlight that, following 58.3 million dollars in financing and refinancing transactions completed during 2024, we ended the second quarter with a modest loan-to-value ratio, constantly below 40%, when netting from the debt our robust cash reserves. Let's move on to slide number 4 to discuss our new dividend policy.
Speaker Change: It is encouraging to note that both vessels have appreciated in market value since our acquisition underscoring once again, the good timing of transactions and the strong Cape fundamentals in place I would also like to highlight the following $58 $3 million in financing and refinancing transactions.
Stamatis Santanis: I would also like to highlight the following $58.3 million in financing and refinancing transactions completed during 2024. We ended the second quarter with a modest fleet alone to value ratio, comfortably below 40% when netting from the debt our robust cash reserves.
Speaker Change: Completed during 2024, we ended the second quarter with a modest fleet of loan to value ratio comfortably below 40% when netting from that a robust cash reserves, let's move on to slide number four to discuss our new dividend policy.
Stamatis Santanis: Let's move on to slide number four to discuss our new dividend policy. We have introduced a viable formula policy to further align our dividend distributions to the capesize market conditions while affirming our commitment to higher shareholder returns. Our quarterly dividend will be based on an operating cash flow generated during its quarter while considering our debt service and other commitments. As mentioned earlier, the cash dividend for the second quarter will be 25 cents per share, representing approximately half of our operating cash flow, net of the debt service of the quarter, and will be paid to all shareholders of record as of the 27th of September, on or about the 10th of October.
Stamatios Tsantanis: We have introduced a variable formula policy to further align our dividend distributions to the cape size market conditions while affirming our commitment to higher shareholder returns. Our quarterly dividend will be based on an operating cash flow generated during each quarter while considering our debt service and other commitments. As mentioned earlier, the cash dividend for the second quarter will be $0.25 per share, representing approximately half of our operating cash flow, net of the debt service for the quarter, and will be paid to all shareholders of record as of the 27th of September on or about the 10th of October. Slide 5.
Speaker Change: We have introduced a variable formula policy to further align our dividend distributions for the capesize market conditions, while affirming our commitment to higher shareholder returns our quarterly dividend will be based on an operating cash flow generated during each quarter, while considering our debt service and another commitment.
Speaker Change: <unk>.
Speaker Change: As mentioned earlier, the cash dividend for the second quarter will be 25 per share representing approximately half of our operating cash flow net of the debt service for the quarter and will be paid to all shareholders of record as of the 27th of September on or about the 10th of October.
Stamatios Tsantanis: In the next slide, we highlight our firm commitment to shareholder returns. Since the fourth quarter of 2021, we have paid $1.85 per share in cash dividends and repurchased $6 million in common shares and $36.9 million in convertible notes and warrants. Looking ahead, our new dividend policy, aligned with the current capesize market outlook, can deliver attractive capital returns to our shareholders. This sets Synergy apart from many of our drybulk peers, as our pure-plate capesize fleet outperforms smaller vessel sizes.
Stamatis Santanis: Slide five.
Stamatis Santanis: In the next slide, we highlight our firm commitment to shareholder returns. Since the fourth quarter of 2021, we have paid $1.85 per share in cash dividends and repurchased $6 million in common shares and $36.9 million in convertible notes and warrants. Sons Looking ahead, a new dividend policy, aligned with the current capesized market outlet, can deliver attractive catering terms to our shareholders. This sets synergy apart from many of our dry-bulk peers, as our pure-play capesized fleet outperforms smaller vessel sizes. We are dedicated to rewarding our shareholders accordingly.
Speaker Change: Slide five in the next slide we highlight our firm commitment to shareholder returns since the fourth quarter of 2021, we have paid $1 85 per share in cash dividends and repurchased $6 million in common shares and $36 $9 million in <unk>.
Speaker Change: Vegetable notes and warrants looking ahead, our new dividend policy align with the current capesize market outlet can deliver attractive capital returns to our shareholders. This sets synergy apart from many of our dry bulk peers as our.
Speaker Change: Our pure play Capesize fleet outperforms smaller vessel sizes.
Stamatios Tsantanis: We are dedicated to rewarding our shareholders accordingly. Lastly, I have made additional personal investments by purchasing common shares and call options on Synergy stock on the open market, reflecting once again my strong confidence in the company's future performance. Slide 6, Moving on to our commercial highlights, our fleet's daily time chatter equivalent outperformed the Baltic Cape Size Index by 18% in the second quarter and by 8% over the entire six-month period. Before passing the floor to Stavros, I would like to add that I am particularly pleased to see Synergy operating in a balanced manner within our stated business objectives, and I view this quarter's strong financial performance as a testament to our long-term corporate strategy.
Speaker Change: We are dedicated to rewarding our shareholders accordingly.
Stamatis Santanis: Lastly, I have made additional personal investments by purchasing common shares and call options on Synergy stock on the open market, reflecting once again my strong confidence in the company's future performance. Slide 6. Moving on to our commercial highlights, our fleet's daily times after equivalent outperform the bolted capesized index by 18% in the second quarter and by 8% over the entire six-month period. This strong performance was primarily driven by our proactive commercial strategy, including a well-timed hedging plan. For the second quarter, we secured the rates of approximately $28,000 a day for half of our operating days.
Speaker Change: Lastly, I have made additional personal investments by purchasing common shares and call options on synergy stock on the open market, reflecting once again my strong confidence in the company's future performance.
Speaker Change: Slide six.
Speaker Change: Moving on to our commercial highlights our fleet daily time charter equivalent outperformed the Baltic Capesize index by 18% in the second quarter and by 8% over the entire six month period.
Speaker Change: This strong performance was primarily driven by our proactive commercial strategy, including a well timed hedging plan.
Speaker Change: For the second quarter, we secured the rates of approximately $28000 a day for half of our operating days. Additionally, several of our vessels are equipped with exhaust gas scrubbers enhancing earnings and many of our ships have favorable fuel consumption specifications based on earlier installation.
Stamatis Santanis: Additionally, half of our vessels are equipped with exhaust gas scrubbers and enhancing earnings, and many of our ships have favorable fuel consumption specifications based on an earlier installation of energy saving devices and our proactive maintenance schedule. For the third quarter of 2024, based on the current FFA levels, we expect our daily times after equivalent to be equal to approximately $25,500, roughly in line with the case as index. This reflects the fact that we have fixed approximately 42% of our operating days for that period at a gross rate of $29,500. Overall, we have currently fixed 39% of operating days for the second half at a gross times after equivalent rate of $29,300.
Speaker Change: Of energy saving devices, and our proactive maintenance schedule.
Speaker Change: For the third quarter of 2024 based on the current FFA levels, we expect our daily time charter equivalent to be equal to approximately $25500 roughly in line with the Capesize index.
Speaker Change: This reflects the fact that we have fixed approximately 42% of our operating days for the period at a gross rate of $29500.
Speaker Change: We have currently fixed at 39% of operating days for the second half at a gross time charter equivalent rate of $29300.
Stamatis Santanis: Before passing the floor to Stavros, I would like to add that I'm particularly pleased to see synergy operating in a balanced manner within our stated business objectives, and I view this quarter's strong financial performance as a testament of our long-term corporate strategy.
Starwood: Before passing the floor to Starwood us I would like to add that I'm, particularly pleased to see synergy operating in a balanced manner within our stated business objectives and my view of this quarter's strong financial performance is a testament of our long term corporate strategy.
Stavros Gyftakis: Stavro, please go ahead.
Starwood: Please go ahead.
Stavros Gyftakis: Thank you, Samadic, and welcome everyone to our earnings call. Let's begin by viewing the key highlights of the financial statements for the second quarter and the six-month period ending June 30, 2024. We had another outstanding quarter, achieving record profitability supported by what seems to be a resilient capesized freight market. Our net revenue for the quarter reached 43.1 million, marking an approximate 50% increase compared to the same period last year. Additionally, our adjusted EBDA rose to 28 million, approximately 12 million higher than the same period last year. Our net income was 14.1 million compared to 700,000 last year, translating to an EPS of. For the six-month period, Arnett Revenue and Adjusted Divida reached 81.4 million and 51.2 million respectively, significantly surpassing last year's performance.
Starwood: Thank you Samantha and welcome everyone to our earnings call, let's begin by reviewing the key highlights of our financial statements for the second quarter and the six month period ending June 32024.
Speaker Change: We had another outstanding quarter, achieving record profitability supported by what seems to be a resilience capesize freight market our.
Speaker Change: Our net revenue for the quarter reached $43 1 million, marking an approximate 50% increase compared to the same period last year.
Speaker Change: Recently, our adjusted EBITDA rose to $28 million approximately $12 million higher than the same period last year.
Speaker Change: Our net income was $14 1 million compared to 700000 last year translating to an EPS of <unk> 68.
Speaker Change: For the six months period.
Speaker Change: Net revenues and adjusted EBITDA reached $81 4 million and $51 2 million, respectively significantly surpassing last year's performance our profitability in the first six months of 2024 set a record for the first half of the year at the same time, our net income was $24 three.
Speaker Change: Million compared to a net loss recorded in 2023, our EPS for the six month period was $1 $18.
Stavros Gyftakis: It was $1.18. Moving on to our balance sheet, I am pleased to report that our cost position at the end of the quarter stood at 38.2 million, or approximately 2.1 million per vessel. This was achieved despite consistent dividend payments, some share buybacks, and nearly 4.5 million advance for the announced vessel acquisition and a regular debt repayment. Our outstanding debt stood at 253 million at the end of the second quarter, resulting in a debt capital ratio of approximately 50% calculated against the total assets of the company.
Speaker Change: Moving onto our balance sheet.
Speaker Change: I am pleased to report that our cash position at the end of the quarter stood at $58 2 million or approximately $2 1 million per vessel.
Speaker Change: This was achieved despite consistent dividend payments, some share buybacks and nearly $45 million once we've announced vessel acquisition and our regular debt repayments.
Speaker Change: Our outstanding debt stood at $253 million at the end of the second quarter, resulting to a debt to capital ratio of approximately 50% calculated against the total assets of the company.
Stavros Gyftakis: I will provide more details on our financing shortly. Finally, total shareholder equity amounted to 254.7 million as of June 30, 2024.
Speaker Change: I will provide more details on our financing. Shortly finally total shareholders' equity amounted to $254 7 million as of June 32024.
Stavros Gyftakis: Let's now turn to slide 8 to discuss our profitability performance. Our hedging activities through FFA conversions and our overall commercial approach once again allowed us to perform the capes as market. Our second quarter TCE rose to 26.6 thousand, while our first half TCE reached 25.4 thousand, surpassing the TCE as someone explained earlier. Our Adjusted Divida for the first half was 51.2 million more than double compared to the same period in 2023. Meanwhile, our Adjusted Divida margin was maintained at around 60% for another quarter, demonstrating our effectiveness in converting revenue into operating profit. Looking ahead, we are optimistic that we will continue this trajectory in the second half of the year, while our ongoing investments in fleet renewal and operational efficiency are expected to further enhance our profitability.
Speaker Change: Let's now turn to slide eight to discuss our profitability performance, our hedging activities through FFA conversions and that overall commercial approach once again allowed us to outperform the capesize market, our second quarter TCE Rose to 26 6000, while our first half TCE reached 12.
Speaker Change: Five 4000, surpassing with Dci estimates explained earlier, our adjusted EBITDA for the first half was $51 2 million more than doubled compared to the same period in 2023.
Speaker Change: Meanwhile, our adjusted EBITDA margin was maintained at around 60% for another quarter, demonstrating our effectiveness and converting revenue into operating profit. Looking ahead. We are optimistic that we will continue this trajectory in the second half of the year, while our ongoing investments in fleet renew.
Stamatios Tsantanis: Looking ahead, we are optimistic that we will continue this trajectory in the second half of the year, while our ongoing investments in fleet renewal and operational efficiency are expected to further enhance our profitability. Additionally, we are closely monitoring market trends to capitalize on emerging opportunities and mitigate potential risks.
Speaker Change: Meanwhile, in operational efficiency are expected to further enhance our profitability. Additionally, we are closely monitoring market trends to capitalize on emerging opportunities and mitigate potential risks moving.
Stavros Gyftakis: Additionally, we are closely monitoring market trends to capitalize on emerging opportunities and mitigate potential risks.
Stavros Gyftakis: Moving now to slide 9, let's delve into more details about our debt profile. The health of our balance sheet is reflected in a modest loan to fleet value ratio of approximately 40% with a debt per vessel currently standing at about 40 million, almost 20 million less than the average market value of our ships. With the cost reserve of 38.2 million, we are well equipped to manage our financial obligations and seize new opportunities. This strong liquidity position, combined with our prudent financial management, ensures we can continue to support our strategic initiatives and maintain operational flexibility, while allowing us to distribute the significant part of our net operating cost flow as dividend to our shareholders after our revised dividend policy.
Speaker Change: Moving now to slide nine, let's delve into more details about our debt profile.
Speaker Change: Half of our balance sheet is reflected in a modest loan to fleet value ratio of approximately 40% with our debt per vessel currently standing at about $40 million almost $20 million less than the average market value of our ships.
Speaker Change: And with a cash reserve of $58 2 million, we are well equipped to manage their financial obligations and seize new opportunities with a strong liquidity position combined with our prudent financial management and ensures we can continue to support our strategic initiatives and maintain operational flexibility, while allowing us to Vista.
Speaker Change: The significant part of our net operating cash flow as dividends to our shareholders as per our revised dividend policy.
Stavros Gyftakis: On our financing activities, during the first six months, we completed three separate sale and lease-bag agreements, totaling 58.3 million, which is a week, a long-standing partner of the company on the financing side. This agreement were used to refine as the existing debt of the Elaship and Patriot Ship and to partial finance the acquisition of the Icon Ship as discussed in a previous call. Additionally, we are already in the process of concluding a transaction for the partial financing of our new, already announced capesized vessel at favourable terms for synergy, which shall see the completion of this acquisition with minimum impact on our liquidity.
Speaker Change: Under financing activities during the first six months, we completed three separate sale and leaseback agreements totaling $58 3 million with a week a longstanding partner of the company on the financing side.
Speaker Change: This agreement were used to refinance the existing debt of the last ship and patio cheap and to partially finance the acquisition of the eye can see.
Speaker Change: As discussed in our previous call at.
Speaker Change: Additionally, we are already in the process of concluding a transaction for the partial financing of our new already announced capesize vessel at favorable terms for <unk>, which will see the completion of this acquisition with minimum impact on our liquidity.
Stavros Gyftakis: Our latest transactions have already reduced our daily interest cost and lower the weight average margin of our financing to approximately 2.85%. This is also reflected in our interest expense, which has reduced by approximately $700,000 in the first six months of 2024 versus the same period last year.
Speaker Change: Our latest transactions have already reduced our daily indirect cost and lowered the weighted average margin of our financing to approximately 285%. This is also reflected in our interest expense, which has reduced by approximately $700000 in the first six months of 2024.
Speaker Change: This is the same periods last year, we anticipate further improvements over the next 12 months as some of our older higher priced loan facilities at <unk>.
Stavros Gyftakis: We anticipate further improvements over the next 12 months as some of our older and higher-price loan facilities are maturing, and we expect to be able to execute the refinancing at lower margins and improved overall terms. Finally, as we move to slide 10, I would like to reiterate that Synergy is well positioned to fully benefit from any upward movement in the capesized market. The current trends in our market indicate a potential for increased neirates; therefore, we are closely monitoring the activity and are ready to react to maximise our gains. At the same time, our comprehensive risk management strategies are designed to protect our revenue and cash flows against multiple utilities.
Speaker Change: Turing and we expect to be able to execute the refinancings at lower margins and improved overall terms.
Speaker Change: Finally, as we move to slide 10, I would like to reiterate the synergies will position to fully benefit from any upward movement in the capesize market.
Speaker Change: Current trends in our markets indicate the potential for increased day rate. Therefore, we are closely monitoring the activity and are ready to react to maximize our gains at the same time, our comprehensive risk monitoring sell duties are designed to protect our revenue and cash flows against market volatility.
Stavros Gyftakis: As Thomas mentioned earlier, we have to actively hedge 39% for available days for the second half. If capesized rates in the second half reach current deffaith levels, we anticipate our EBDA for 2024 will rise to approximately 113 million. The anticipated rise in EBDA will allow us to enhance the whole devalued through increased dividends and potential survival.
Speaker Change: As Tom mentioned earlier, we have proactively hit 39% of our available days for the second half if capesize rates in the second half for its current interest rate levels, we anticipate our EBITDA for 2024 will rise to approximately $130 million.
Tom: The anticipated rise in EBITDA will allow us to enhance shareholder value through increased dividends and potential share buybacks. This.
Stavros Gyftakis: This concludes my review.
Stamatis Santanis: I will now turn the call back to Stamatis, who will discuss the capesized market and in the fundamentals.
<unk>: This concludes my review I will now turn the call back to <unk>, who will discuss the capesize market and industry fundamentals for Marty.
Stamatis Santanis: Stamatis? Stamatis. Overall, the low capesized order books suggest limited-fit growth, which is likely to be at-paced by the growth in tonn-mile demand. In the first half of 2024, Brazilian iron ore exports rose by 6% compared to last year, driven by high prices and China restocking, allowing valet in Brazil to increase exports significantly. Meanwhile, Ginny's box-eye exports increased by 14% from the first half of 2023, tightening the Atlantic market. This increased tonn-miles absorbed more ships, impacting the capesized market. China's whole imports rose by about 12% a year's date due to strong energy demand. China's steel production is expected to fall slightly, with demand driven by manufacturing, infrastructure, and exports.
Marty: Thank you Gustavo.
Marty: Positive momentum from the start of the year continued into the second quarter with a Cape index, averaging $22600 for the period per day.
Marty: In recent months the market has remained relatively stable at high levels. Thanks to a strong volume of cargos limited fleet supply and psychological factors stemming from adverse geopolitical events.
Marty: Overall, the lower Capesize order book suggests limited fleet growth, which is likely to be outpaced by the growth in ton mile demand.
Speaker Change: In the first half of 2020 for Brazilian iron ore exports rose by 6% compared to last year, driven by higher prices in China, restocking, allowing violate in Brazil to increase exports significantly.
Stamatios Tsantanis: Meanwhile, Guinea's bauxite exports increased by 14% from the first half of 2023, tightening the Atlantic market. We have fixed approximately 40% of our second half days at very favourable rates, as I mentioned before, thus insulating our financial performance.
Speaker Change: Meanwhile, Guinness bauxite exports increased by 14% from the first half of 2023 tightening the Atlantic market.
Speaker Change: <unk> increased ton miles absorbed more ships impacting the capesize market.
China's coal imports rose by about 12% year to date due to strong energy demand unmet by domestic production.
Speaker Change: China's steel production is expected to fall slightly with demand driven by manufacturing infrastructure in exports.
Stamatis Santanis: Globally, steel production remains stable, with notable growth in Europe. I don't know what exports is onality suggests higher second half exports with major miners predicting a 6% increase over 203 levels for the second half. We have fixed approximately 40% of our second half days at very favorable rates, as I mentioned before, insulating our financial performance. For the box I trade, the long-term aluminum demand is strong, supported by projected cargo volume growth of 11% in the second half of 2024, and an annual increase of about 12%. Looking ahead, the Simandou iron ore project in West Africa, starting in 2026, will boost the planned cargo-enhancing tonne-mal demand for capesizes.
Speaker Change: Globally sales production remained stable with notable growth in Europe.
Speaker Change: Iron ore exports seasonality suggests higher second half exports with major miners predicting a 6% increase over 2020 levels for the second half we have fixed approximately 40% of our second half days at very favorable rates as I mentioned before insulating our financial performance.
Speaker Change: For the bauxite trade longer term aluminum demand is strong supported by projected cargo volume growth of 11% in the second half of 2012 before and an annual increase of about 12%.
Speaker Change: Looking ahead to the Simandou iron ore project in West Africa, starting in 2026 will boost Atlantic cargoes enhancing ton mile demand for Cape sizes.
Stamatis Santanis: Despite certain volatility, global consumption has historically grown, and major iron ore miners' investments in high-quality resources affirm our positive long-term outlook for capesized demand. Turning into supply, the order book for capesized vessels is at its lowest point in decades. Net capesized fleet growth is expected to be approximately 1.8% in 2024, and 1.3% in 2025, both below the growth in tonne-mile demand. Strict environmental regulations, high new building prices, and limited shipyard slots created a challenging environment for large vessel orders. This suggests fleet growth will lag behind demand for an extended period. As a result, we expect the capesized market balance to remain favorable for owners, ship owners in the coming years.
Speaker Change: Despite short term volatility global steel consumption has historically grown in major iron ore miners investments in high quality resources affirm our positive long term outlook for capesize demand turning into supply.
Speaker Change: The order book for Capesize vessels is at its lowest point in decades net Capesize fleet growth is expected to be approximately one 8% in 2024 and 130% in 2035, both below the growth in ton mile demand strict environmental regulations.
Speaker Change: Higher new building prices and limited shipyard slots created challenging environment for large vessel orders. They suggest fleet growth will lag behind demand for an extended period.
Speaker Change: As a result, we expect the capesize market balance to remain favorable for owners ship owners in the coming years.
Stamatis Santanis: To conclude, Synergy strategically positioned to benefit from the positive long-term trends in the capesized market. Our commitment to our business plan is centered around three main objectives: delivering substantial and attractive self-order returns. Capitalizing opportunities to grow or fleet through projects that offer high returns on capital, managing our growth with an acute awareness of the capesized market's high cyclicality, ensuring the sustainability of our balance it under all market conditions. With these key principles, I would like to close our call by stating that our company has performed strongly in all these key areas.
Speaker Change: To conclude.
Speaker Change: <unk> strategically positioned to benefit from the positive long term trends in the Capesize market our commitment to our business plan is centered around three main objectives.
Speaker Change: Delivering substantial and attractive shareholder returns.
Speaker Change: Capitalizing on opportunities to grow our fleet through projects that offer high returns on capital.
Speaker Change: Managing our growth with an acute awareness of the capesize market high cyclicality, ensuring the sustainability of our balance sheet under all market conditions.
Speaker Change: With these key principles I would like to close our call by stating that our company has performed strongly in all of these key areas. Thank you very much for listening operator, please take the call.
Stamatis Santanis: Thank you very much for listening.
Operator: Operator, please take the call. Thank you. As a reminder to ask a question, you need to first tell one and one on your telephone and wait for your name to be announced. Once again, it's tell one and one on your telephone and wait for your name to be announced.
Operator: As a reminder, to ask a question, you need to press star one and one on your telephone and wait for your name to be announced.
Speaker Change: Thank you as a reminder to ask a question you need to press star one on your telephone and wait for your name to be announced.
Speaker Change: Once again is still one and one on your telephone and wait for your name to be announced please standby, while we compile the Q&A roster.
Operator: Please stand by while we compare the Q&A roster.
Operator: We are now going to proceed with our first question.
Speaker Change: We are now going to proceed with our first question.
Liam Berg: The questions come from the line of Liam Berg from B. Riley. Please ask a question. Yes, thank you. The modest sub-ros are you today.
Speaker Change: So question is come from the line of Liam Burke from B Riley. Please ask your question.
Liam Burke: Yes. Thank you stay modest Bruce how are you today.
Stamatis Santanis: Hello, Liam. Good morning. We're very good. Thank you.
Liam Burke: Hello, Leon Good morning, we're very good thank you.
Liam Burke: I had a question on asset purchases the last two KFC, obviously capes.
You pretty opportunistic and.
Speaker Change: Certainly worth more than when you bought them.
Stamatis Santanis: How is the asset pipeline out there? Can you see any possibility of being able to add any more vessels? The answer is yes; there might be a couple more opportunities over the next three to six months. I'm not saying five or ten.
Speaker Change: How is the asset pipeline out there.
You see any possibility of being able to add any more vessels.
Speaker Change: The answer is yes.
Speaker Change: <unk> be a couple more opportunities over the next three to six months Im not saying $5 10.
Stamatis Santanis: I'm trying to be conservative because, again, our priority is to match my shareholders' attempts and, of course, grow the fleet in a very conservative manner. We're at a very good pace right now between, let's say, 19 and 21 cape size vessels and Newcastle maxis. I believe that's a very good number for now. And the important thing is to match my return on a per share basis. So I'm pretty confident that we will be able to source one, two, maybe three more ships over the course of the next three to six months. And I strongly believe that these opportunities will be very, very well priced compared to the current market levels.
Speaker Change: Trying to be conservative because again, our priority is to maximize shareholders' returns and of course grow the fleet in a very conservative manner. We're at a very good pace right now between let's say 19 in 'twenty, one capesize vessels in Newcastle mattresses, I believe thats, a very good number for now and the important thing is to maximize.
Speaker Change: Our return on a per share basis, so I am pretty confident that we will be able to source. One two maybe three more ships over the course of the next.
Speaker Change: Three to six months.
Speaker Change: And I strongly believe that these opportunities will be.
Speaker Change: Very very well priced compared to the current market levels. That's all I can say for now.
Liam Berg: That's all I can say for now. That's fair enough.
Stamatis Santanis: And just to tie that discussion into your dividend payout now, it's a pretty clear-cut formula on operating cash flow. But I'm presuming that additional asset purchases are in the mix once you get past paying the dividend and servicing debt. Well, I mean, we'll time maintain, you know, the operating cash flow was, you know, the guiding principle to put it this way. And I'm quite confident that the equity required for the acquisition of the ships can be absorbed one way or another. So I don't think that, you know, unless, which I doubt it, we come across the opportunities for ten ships.
Speaker Change: That's fair enough and just to tie tie that discussion into your dividend payout now, it's a pretty clear cut formula on operating cash flow.
Speaker Change: Im presuming that.
Speaker Change: Additional asset purchases are in the mix once you get past paying the dividend and servicing debt.
Speaker Change: Well I mean, we'll try and maintain.
Speaker Change: Operating cash flow wise.
Speaker Change: The guiding principle to put it this way.
Speaker Change: And I'm quite confident that the equity required for the acquisition of the ships can be absorbed one way or another so I don't think that you know.
Speaker Change: And less which I doubt it will come across opportunities of 410 ships if.
Stamatis Santanis: If it's one, two, or maybe three ships over the course of the next three to six months, the equity component required for these acquisitions is not going to affect, you know, the dividend formula. Great.
If it's one two or maybe three ships over the course over the next three to six months the equity component required for these acquisitions is not going to affect.
The dividend Formula.
Stamatis Santanis: Thank you, Stamattas. You're very welcome. Have a great day. Thank you; you too. Thank you.
Speaker Change: Great. Thank you so modest.
Youre very welcome have a great day.
Speaker Change: Thank you you too.
Speaker Change: Okay.
Operator: We are not going to proceed with our next question.
Thank you we are now going to proceed with our next question.
Christopher Balsky: The questions come from the line of Christopher Balsky from Arctic Securities. Please go ahead. Your line is opened.
Speaker Change: Our question comes from the line of Christopher both sticky from Arctic Securities.
Speaker Change: Please go ahead your line is open.
Stamatis Santanis: Hi, guys. How are you? Hello. We're very well. Good afternoon. And thanks for good market comments as always. And congrats on a solid quarter. It seems like the equity market is very safe for the new dividend policy. Can you share some more color on the threshold regarding the policy and sort of how. Obviously, you're paying; you're going to pay quite the chunk of distributions going forward, with close to 50% growth, free cash growth equity. But sort of, how do you look at that? They compare to buybacks because you're still at quite a discount to intrinsic value.
Speaker Change: Hi, guys how are you.
Speaker Change: Hello, we're very well good afternoon.
Christopher Bosticky: Good afternoon, and thanks for all for good market comments as always.
Speaker Change: Congrats on a solid quarter it seems like.
Speaker Change: The equity market is very pleased by the new dividend policy.
Speaker Change: Okay sure.
Speaker Change: More color on the on the threshold regarding.
Speaker Change: The policy.
Speaker Change: Ill.
Speaker Change: Okay.
Speaker Change: You're going to pay.
Speaker Change: Distributions going forward.
Speaker Change: Okay.
Speaker Change: Close to 50%.
Speaker Change: Free cash flow to equity, but sort of how are you.
Look at that the comparator buybacks because.
Speaker Change: Youre correct.
Speaker Change: Quite the discount.
Speaker Change: <unk> value.
Stamatis Santanis: That's a good question, and thank you for that. We are looking into the buybacks, of course. The only problem with the buybacks is that there is a certain limit up to how much stock we can, you know, proceed with buybacks because of the daily trading, you know, thresholds that we have.
Speaker Change: Yes.
Speaker Change: That's a great question and thank you for that.
Speaker Change: We are looking into the buybacks of course, the only problem with the buybacks is that there is a certain limit up to how much.
Stock we can.
Speaker Change: Proceeded with buybacks because of the daily trading.
Speaker Change: <unk> thresholds that we have so dividends for us as the best way to return capital to the shareholders and the more fair transparent demonstrate forward to be honest. So we will continue on the dividend of course.
Stamatis Santanis: So, dividend for us is the best way to return capital to the shareholders, and if the more fair, transparent and straightforward to be honest, so we will continue on the dividend course. If you want to have a guidance, a good guidance for future dividends, I believe that the Q2 dividend formula is a very good guidance. And I don't see that changing materially over the course of the next quarters unless something super major happens, you know, something seismic or, you know, adverse change or something like that. So, on a normal course of business, I would expect the Q2 to be a good guidance for your future reference.
Speaker Change: If you want to have a guidance a good guidance for future dividends I believe that the Q2 dividend formula is a very good guidance.
Speaker Change: I don't see that changing materially over the course of the next quarters, unless something Super major happens something sismi quarter.
Speaker Change: Adverse change or something like that so.
Speaker Change: On a normal course of business I would expect the Q2 to be a good guidance for your <unk>.
Christopher Balsky: Does that make sense? Perfect. Yes, absolutely.
Speaker Change: It's a reference because that makes sense.
Speaker Change: Yes, absolutely.
Christopher Balsky: And in terms of the market, could you share some color on sort of short-term rate expectations as we're seeing approaching sort of seasonal high and what's going to drive sort of the uptake in the short term. And in the long term, if you could share some more color on CMDU, obviously you mentioned it. And we agree that we think it will be quite a ton of mild booster. But are you seeing that the HP or other minors are in the market and open to locking too much to secure sort of these volumes? And what's your view and impression on these volumes?
Speaker Change: In terms of the market.
Speaker Change: Sure.
Speaker Change: Color on sort of short term rate expectations customer soon approaching sort of seasonal volume.
Speaker Change: What's going to drive.
Speaker Change: The uptake.
Speaker Change:
Speaker Change: In the short term.
Speaker Change: In the long term if you could share some more.
Speaker Change: More color on Simandou, obviously, you mentioned anthem we.
Speaker Change: We agreed that it will be quite the ton mile booster.
Speaker Change: Uh huh.
Speaker Change: Are you seeing that.
Speaker Change: HPE or other miners are in the market.
Speaker Change: Open to lock in tall much accurate team secures all apps.
Speaker Change: These volumes.
Speaker Change:
Speaker Change: What's your view on impression on these volumes.
Stamatis Santanis: Will it replace Australians once, or will it come in addition as of how do you view that dynamic?
Speaker Change: Australian <unk> will comment on this.
Speaker Change: Okay.
Speaker Change: You view that dynamic.
Stamatis Santanis: Well, that's a great question. And thank you for asking that. Despite the overall negative noise that we hear in the market and all these negativity coming across from cello here and there, the fundamentals for the dry bulk market and especially for the Cape sizes have not really changed at all over the course of the last two to three months. For example, the guidance from the big minors for the second half are all higher than the first half. So if we believe that the guidance from Valerio team to Enbi is accurate, they will be exporting five to seven percent more cargos in the second half of the year, which I believe is very, very good news.
Speaker Change: Well that said Thats a great question and thank you for asking that.
Despite the overall negative noise that we hear in the market and all this negativity coming across from shallow set here and there.
Speaker Change: The fundamentals for the dry bulk market and especially for the Cape sizes have not really changed at all over the course of the last two to three months for example, the guidance from the big miners for the second half are all higher than the first half. So if we believe that the guidance from Vale Rio Tinto BHP is accurate.
Speaker Change: They will be exporting 5% to 7% more cargos in the second half of the year, which I believe it is very very good news the inventories of China have started after quite some time instead of a built up to start producing.
Stamatis Santanis: The inventories of China have started after quite some time instead of a build up to start reducing, which is of course very good news for demand for iron ore and the stockpiles in China. And as far as supplies concerned, nothing has really changed. I mean, there has not been any material new building cape size deliveries; on the contrary. The global Cape size fleet is getting older and older by the day. The Red Sea is still closed. So the cold demand is still quite strong. Aluminum and box high demand is still quite strong. So I don't really see the fundamentals changing as you say in the short term.
Speaker Change: Which is of course, a very good news.
Speaker Change: Now for demand for iron ore on the stockpiles in China and.
Speaker Change: As far as supply is concerned nothing has really changed I mean, there has not been any material new building capesize deliveries on the contrary the global Capesize fleet is getting older and older by the day.
Speaker Change: The Red Sea is still closed.
Speaker Change: Coal demand is still quite strong aluminum.
Speaker Change: Bauxite demand is still quite strong so I don't really see the fundamentals changing.
As we say in the short term on the contrary I believe that the market.
Stamatis Santanis: On the contrary, I believe that the market may have bottomed or may be bottoming, and we may see an uprise, sorry, an uptick in the market over the next to the next few weeks. Again, a very, very careful estimate I want to make right now and a very careful prediction. All things being equal. But for the commercial arena that we see every day, you know, there is a big struggle for the miners to secure six, like you very well said, that there is no more prices on a dollar. So I see a lot of push upwards, which is trying to contain here and there with various ways.
Speaker Change: May have bottomed.
Speaker Change: It may be bottoming, and we may see.
Speaker Change: Enterprise.
Speaker Change: Uptick in the market over the course of the next few weeks.
Speaker Change: Again, a very very careful estimate I want to make it I found it very careful prediction.
Speaker Change: Things been equal but floor the commercial.
Speaker Change: Arena that we see every day.
Speaker Change: A big struggle for the miners to secure ships like you very well said at reasonable prices on a dollar per ton. So I see a lot of push.
Speaker Change: Upwards, which is trying to be contained here and there with values way. So I'm generally very very conservative optimistic.
Stamatis Santanis: So I'm generally very, very conservatively optimistic. Thank you. Thanks a lot, Stamatios. You are very welcome. You too. Thank you.
Speaker Change: Okay. Thanks, a lot.
Speaker Change: Hum.
Operator: You're very welcome.
Speaker Change: A great day.
Speaker Change: Youre very welcome Youtube.
Operator: As a reminder to ask a question, you need to press Tau 1 and 1 on your telephone and wait for your name to be announced. It's Tau 1 and 1 on your telephone. Thank you.
Speaker Change: Thank you as a reminder to ask a question you need to press Star one and one on your telephone and wait for your name to be announced it's Tal one and one on your telephone. Thank you.
Operator: We are now going to proceed with our next question.
Speaker Change: We are now going to proceed with our next question.
Tate Sullivan: The questions come from the line of Tate Sullivan from Maxine Grape. Please go ahead. Your line is opened.
Speaker Change: Our question comes from the line of Tate Sullivan from Maxim Group. Please go ahead. Your line is open.
Tate Sullivan: Oh, thank you.
Speaker Change: Okay.
Tate Sullivan: Thank you.
Stamatis Santanis: On the great balance on the FSA is going forward. Is the market liquid enough? Is it a six-month forward market or can you start to look in some rates for 2025? Yes.
Tate Sullivan: Moshe.
Moshe: Great balance on the FSA is going for market liquidity.
Speaker Change: Is it a six month forward market or can you start to lock in some rates for 2025, yes.
Stamatis Santanis: Good morning, Tate. Thanks for listening in to our call. We believe that the market of the FSA is quite liquid. Right now we're very, very well hedged for the second half of the year. About close to 40 percent of our fleet is covered at what we believe to be very strong rates. If we see peaks in the next few weeks or even months going forward, we will, of course, you know, push the trigger and fix some more ships at this high rate. So there's plenty of liquidity. If we want to do that, for the time being, we're just waiting still, and if the opportunity comes across, we're just going to take it.
Speaker Change: Good morning, Tate and thanks.
Tate Sullivan: For listening into our call.
We believe that the market of their faces quite liquid so right now, we're very very well hedged for the second half of the year about close to 40% of our fleet is covered that well.
Tate Sullivan: What we believe to be very strong rates.
Tate Sullivan: If we see peaks.
Tate Sullivan: Next few weeks or months going forward, we will of course.
Tate Sullivan: Push the trigger and fix a more ships at this higher rate. So there is plenty of liquidity. If we wanted to do that for the time being we're just waiting still and if the opportunity comes across we're just going to take it.
Stamatis Santanis: In your press release, the charter list for your fleet in this current, current, good at market with a good outlook to most the chart you usually extend the existing charter, existing contracts with the current charters or there will there be some turnover. Generally, we tend to extend with the same, with the same shutters. One of our ships, we have actually fixed for a period covering 2025 as well are most in the position. So, you know, we are optimistic that we will continue our excellent relationship that we have with the current charters and all these long-term partnerships that we have established over the course of the previous years.
Speaker Change: I was looking at in your press release, the charter list for your fleet.
Speaker Change: In this current current credit market with a good outlook to most of the chart you usually extend.
Speaker Change: Being chartered to existing contracts with their current charters are there will there be some turnover.
Speaker Change: Generally we tend to extend with attempt with SM charters one of our ships will have actually fixed for the period covering 2025 as well our most recent acquisition so.
Speaker Change: And are optimistic that we will continue our excellent relationship that we have with our current charters and told this long term partnership that we have established over the course of the previous years.
Tate Sullivan: Great to see the dividend policy and the repurchase. That’s thanks very much. Of course, of course, thank you, babe.
Speaker Change: Great to see the dividend policy and our repurchases Bob Thank you very much.
Operator: Of course, of course. Thank you, Tate.
Bob: Of course of course, thank you Tait.
Operator: We have no other questions at this time, so this concludes today's conference call. Thank you for participating.
Speaker Change: We have no further questions at this time. So this concludes today's conference call. Thank you for participating you may now disconnect your lines. Thank you.
Operator: You may now disconnect your lines. Thank you.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.