Q4 2024 DHT Holdings Inc Earnings Call
Okay.
Speaker Change: Good day, and thank you for standing by and welcome to the Q4 2020 for DHT Holdings, Inc Earnings Conference call.
At this time all participants are in a listen only mode.
Speaker Change: After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on one on your telephone.
Speaker Change: And have an automated message advising Johann just raised to withdraw your question. Please press star one on one again please.
Speaker Change: Please be advised that today's conference is being recorded.
Speaker Change: I would now like to hand, the conference every to your first speaker today Laila Halvorsen. Please go ahead.
Speaker Change: Thank you.
Good morning, and good afternoon, everyone welcome and thank you for joining DHT holdings fourth quarter 'twenty 'twenty four earnings call.
Speaker Change: I'm joined by Dht's, President and CEO Mark Schneider.
Speaker Change: As usual, we'll go through the financial highlights before we open up for your questions.
Speaker Change: Two of the slide deck can be found on our website at this time, Chris Dot com.
Before we get started with todays call I would like to make the following remarks.
Speaker Change: A replay of this conference call will be available on our website th tankers dot com until February 13.
Speaker Change: In addition, our earnings press release will be available on our website and on Mesothelin car system, that's an extra boost to our form 6K.
Speaker Change: As a reminder, on this conference call will discuss matters that are forward looking in nature.
Speaker Change: These forward looking statements are based on our current expectations about future events as detailed in our financial reports.
Speaker Change: Actual results may differ materially from the expectations reflected in these forward looking statements.
Speaker Change: We urge you to read our periodic reports available on our website and on the first.
Speaker Change: System, including the risk factors in these reports for more information regarding risks.
Speaker Change: Ask yourself would start the presentation with some financial highlights.
Speaker Change: We continued to show a very strong balance sheet with love to leverage and significant liquidity before.
Speaker Change: The fourth quarter ended with total liquidity of 258 million.
Speaker Change: Hang on 78 million in cash and 110 million I don't have any room under our revolving credit facility.
Speaker Change: At quarter end financial leverage was 18% based on market values for the ships.
Speaker Change: 2000 13.8 million per vessel.
Speaker Change: No I mean, I think Richard you'll ship values.
Speaker Change: Now over to the P&L.
Speaker Change: <unk> revenue was down 50 basis of it.
Speaker Change: $5 5 million and everything else.
Speaker Change: Yeah for the fourth quarter.
Speaker Change: Net income came in at.
Speaker Change: Before five 7 million equal to a 34 cents per share.
Speaker Change: After adjusting for noncash reversal of prior impairment charges of $27 9 million net income came in at $26 8 million equal to 17 cents per share.
Speaker Change: That's what operating expenses for the quarter were 22 million and G&A for the quarter was $5 6 million out of which last year included a nonrecurring item.
Speaker Change: 7 million.
Speaker Change: For the fourth quarter, the average TCE for all the vessels in the spot market was Turkey.
Speaker Change: The dollar per day pardon the pun just under 15 years of age achieved earnings of $500 per day.
Speaker Change: Does that still sometimes structure also made $4500 per day, while the French combined TCE achieved for the quarter was 38 $800 per day.
Speaker Change: Net income for the full year of 'twenty 'twenty, four $181 5 million equal to $1 12 per share.
Just for the noncash reversal of prior impairment charges booked in the fourth quarter of $27 9 million.
Speaker Change: I think for 'twenty to 'twenty four came in at $153 6 million equal to 95 cents per share.
Speaker Change: Yet another strong year for DHT.
Speaker Change: That's not writing expenses for 'twenty 'twenty four were <unk> 6 million, which includes alone Curran our insurance deductible.
Speaker Change: G&A for 'twenty to 'twenty, four was $18 9 million.
Speaker Change: We estimate G&A for 2025 to be about 18, Midtown East Walton average quarterly run rate of four and a familiar.
Speaker Change: Depreciation for 'twenty to 'twenty four at 111.
Speaker Change: And based on our current fleet, we estimate our annual depreciation for 2020 for it to be about calling for a long time.
Speaker Change: For 'twenty 'twenty four or so customers that she taught you started with us in terms of dollar per day, while the average combined TCE came in at $45200 per day.
Speaker Change: That's just under 15 years of age achieved earnings of $49800 per day for the full year of 2024.
Speaker Change: On this slide we present, the cash flow highlights for the fourth quarter.
Speaker Change: Started the quarter with 74 million in cash so it generated 66 million and that was down.
Speaker Change: Ordinary debt repayments and cash interest amounted to $15 1 million.
Speaker Change: Uh-huh M M was allocated to shareholder through a cash dividend of $13 2 million animals used for share buybacks.
Speaker Change: $12 9 million was used for our new building program and 110 million restaurant under our.
Speaker Change: Yes.
Speaker Change: Positive changes in working working capital amounted to $9 3 million in the quarter ended with $78 million in cash.
Scott: And with that I will turn the call over to Scott.
Scott: Thank you Donna.
Speaker Change: We'll talk about our business update so during December we took advantage of the soft period in the capital markets to repurchase our own shares to the tune of one of them or half a million shares.
Scott: Shy of 1% of the company.
Scott: The average price was $8.89 almost $3 lower than yesterdays closing price.
Scott: Accretive to earnings per share and net asset.
Scott: Got it even by a good margin.
Scott: We entered into agreement to sell our oldest ship the DHT Scandinavia built into tougher fixed for a price of $43 4 million.
Scott: The vessel was debt free and we expect to save to generate a book gain of about $19 8 million.
Scott: The cash proceeds will be allocated to general corporate purposes here on the investments in vessels share buybacks and prepayment of debt.
Scott: The vessel was delivered to their new owners during January.
Scott: During the quarter, we paid $12 8 million in installments under our new building program, taking total installments during Q4 to 91 million.
Scott: Subsequent to the quarter, we secured a one year time charter for DST, China built two seven at $40000 per day.
Scott: <unk> commenced towards the end of January.
Scott: On this slide we will discuss capital allocation and dividend specifically.
Scott: The dividend for the fourth quarter of 2024 has declared a <unk> 17 per share.
Scott: This is as per our capital allocation policy of paying out 100% of ordinary net income quarterly cash dividends and marks our sixth consecutive quarterly cash dividend.
Scott: The shares will trade ex dividend on February 18, and the dividend will be paid on February 25.
Scott: In the graph to the left.
Scott: With our estimate the P&L and cash breakeven levels for 2035.
Scott: As you will see the difference between the two is estimated at $7000 per day for the year.
Scott: This discretionary cash flow will remain in the company and we allocate that for general corporate purposes with intention being to fund installments under our new building program.
Scott: The graph on the right illustrates the cumulative dividends since updating our capital allocation policy from the third quarter of 2022.
Scott: The accumulated amount is $2 36 per share and reflects well during a period in which our share price has appreciated.
Scott: We made share buybacks totaling $32 million equal to two 3% of the company.
Okay.
Scott: We will now discuss the bookings to date for the first quarter of 2035.
Scott: We expect 604 time charter days covered for the first quarter at 41700 per day.
Scott: In March <unk> improvement when compared to the prior quarter.
Scott: This rate assumes only the base rate for February and March for the time charter contract that has profit sharing feature.
Scott: We assume 1475 spot based in the quarter of which 74% have been booked at an average rate of 36 starts with 400.
Scott: Our ships that are younger than 15 years of age have been booked at 37.
Scott: Per day.
Scott: You will note that we have improved the rates on the bookings well compared to our business update on January five.
Scott: The current spot market for modern vessels with exhaust gas cleaning systems are in the 55 to $60000 range.
Scott: The spoke P&L breakeven for the quarter is estimated to be 21700 per day, a number you might use to estimate the net income contribution from our spot fleet for the first quarter.
Scott: Okay.
Scott: We believe our market is increasingly becoming a highly constructive supply story.
Scott: Heavy illustrate the demographics or the VLCC fleet.
Scott: Maybe look news to many of you, but nevertheless, we think it's important to reinforce the obvious which is that the VLCC fleet is set to shrink.
Scott: And at the time when demand for our services is growing.
Scott: By the end of 2026, we estimate 444 vlccs to be older than 15 years of age.
Scott: At the same point in time 202 are estimated to be over 20 years.
Scott: 104 to be older than 25 years.
Scott: These are staggering numbers and will increasingly support our business.
Scott: In the same context, we estimate almost 200 vlccs to belong to the so called Shadow fleets.
Scott: Following the recent additional sanctions 97, vlccs are now sanctioned making it harder for these vessels to operate and serve a purpose.
Scott: Furthermore, this adult the assessments are mostly in the older end of the saving fleet has included in the price paid for the fleet demographics.
Scott: The order book for maybe the seats as benign we'd have up nine 3% for capacity fill order there.
Scott: There will be five ships delivered this year 24 in 2644, and <unk> 70, 714 estimates of <unk> 28.
Scott: Next slide here, we will give some general market commentary.
Scott: The U S is actively announcing sanctions and tariffs.
Scott: Some of them will have limited impact on the market, but some could be a significant support to freight rates.
Scott: Overall, we expect sanctions from tariffs to somewhat disrupt trade, but in contrast to the impacts from the Russia, Ukraine conflict, we expect vlccs to be in high demand.
Scott: Sanctions and fiscally assist with some of the teapot refineries industry in China is resulting in changed procurement behavior of crude oil as state owned refiners are increasingly taking a prominent role which likely result in a reduced role for this other fleets.
Scott: China has announced support for fiscal policy measures stimuli.
Scott: We assume will drive increased economic activity and consumption.
Scott: This combined with net new refining capacity coming Onstream should result in some 300000 barrels per day increased demand for 20 to 35.
Scott: We further note that refining margins in China slightly improved signaling our successful reduction in inventories and increased economic activity.
Scott: As mentioned in the business outlook the spot market for modern vlccs with exhaust gas cleaning systems, allowing the $55 to 60000 order they range the good support and possibly continued upward trajectory.
Scott: There is significant interest from customers for time charter contracts, reflecting an aligned view that the market is fast becoming tighter as the modern compliant fleet is set to shrink over the next few years.
Scott: Based on positive feedback from our key stakeholders, namely shareholders customers and lending banks. We believe we have an appropriate strategies tailored to the structure of our market focusing on solid customer relations offering safe and reliable services.
Scott: Maintaining a competitive cost structure with robust breakeven levels as solid balance sheet and a clear capital allocation policy.
Scott: The whole DSD team appreciates this encouragement.
Scott: One is to work hard and operate with leading governing standards on a high level of integrity.
Scott: Operator over to you.
Speaker Change: Thank you if you would like to ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again please.
Scott: Please standby, while we compile the Q&A roster.
Scott: Thank you we will start with our first question.
Speaker Change: This is from the line of Jon Chappell from Evercore ISI. Please go ahead.
Jon Chappell: Thank you Brian.
Scott: Yeah.
Scott: So since the last call when I asked about kind of fleet development you sold.
Scandinavia, and then you're locked into China. So it seems like you are derisking.
Scott: Some of the older vessels in your fleet as we think about going forward differences now.
Scott: The optimism around asset values and time charter market. What do you think is the best path forward.
Scott: For again kind of the older ships in your fleet, our maybe you don't need as much spot exposure.
Scott: Monetizing them, a better alternative versus the time charter market or vice versa.
Scott: So two or three.
Scott: III ships built in 2007 in our fleets tools.
Scott: Two of them are on time charter, one, which we've talked about on this call for the customer's always today for for this year.
Scott: A woman that started last summer, which is everything else.
Scott: The second quarter at $49500 per day. So these are two very good time charters the third vessel in the spot market. So.
Scott: We might consider to divest.
Scott: One or two other ships.
Scott: Depending on time of price obviously so.
Scott: The two on time charter will continue to operate at least through their charters.
Scott: But.
Scott: So these ships have basically no debt. So there is sort of interesting opportunity in a way too.
To monetize that in a way and then reinvest the moment in the company.
Scott: One way or another in the line with sort of our capital allocation.
Scott: National policies in general so that's.
Scott: Thats really all I can say now that it's not that easy to sell older ships.
Scott: Must have an interest but it might be a counterpart that you cannot transact. It also so.
Scott: Races to hurdle a bit to get it done.
Scott: Alright.
Scott: And then as far as the new builds are concerned seeing the progress payments and what's laid out for the next 12 months and you still have some time.
Scott: But what was the what's kind of the model financing plan for those ships number one and number two just given the fuel efficiencies of them et cetera have you received any interest thus far.
Scott: Potentially locking those in or is the plan to keep them.
Scott: Kind of the Optionality of using the spot market next year.
Scott: Thank you so the base case.
Scott: Two for debt financing of those ships is a $60 million.
Scott: For verso.
Scott: But the chances are it might upset.
Scott: So look and Thats based on the sort of negotiations we have now all the financing thats intended to put in place. So if we.
Scott: She has more than 60.
Scott: Reallocate how the depth is distributed in the fleet potentially.
Scott: So it should be sort of a very good outcome for the company.
Scott: We are quite excited about the terms and the commercial pricing.
Scott: We expect to put in place.
Scott: Our target is to close this at some point in the second quarter of there. So in general we have great support from them from from our banking group and several sort of proposals on the table.
Scott: Our next question on this fuel efficiency of these ships and whether we have received and the interest. So in general there is significant interest for time charters.
Scott: There are two clients in particular that.
So the interest in the new buildings.
Scott: Too early to say, whether this is something we can execute total as normal there is always a bit of a delta between what the customer wants them.
Scott: We hope so, but I think with a tailwind from the spot market going forward now.
Scott: It should be possible too.
Scott: To get to something that could make a very good both commercial and financial sense for DHT Hum.
Scott: Great. Thank you sorry.
Scott: Thank you.
Scott: Thank you we will now take our next question.
Speaker Change: This is from the line of Mark <unk> from Clarksons <unk> Securities. Please go ahead.
Scott: Okay.
Scott: Hi.
Scott: Hello.
Scott: Your line is North America, yes.
Scott: Yes, now I can areas.
Scott: Okay. First question and then can you just talk about.
Scott: The recent jump in VLCC spot rates.
Scott: What do you think these levels are sustainable.
Scott: Driving this right.
Scott: And how do you see the market developing from here.
Scott: I think the market in general is very very tight.
Scott: This sort of a downward trajectory we had in the end of last year was mostly driven by.
Scott: Some inventory changes in the law.
Scott: Covid runs in the refineries in China.
Scott: But that those.
Scott: Those inventory seems to still be worked off as you can see on the refining margins.
Scott: In China, So that's one aspect.
Scott: As I mentioned that the market is tight finally balanced and it didnt take much to bring the market down in one way but.
Scott: More importantly, it didnt take much to bring the market up.
Scott: So the sentiment in particular and the reaction to <unk> was very dramatic in the market moved very very fast.
Scott: Without necessarily more cargos in the market participant expectations, you had a little bit of a setback with <unk>.
Scott: Back up again, and then I'll leave.
Scott: We feel it is more subset of sale. It is more cargo in the market at the same time as I talked about in detail the fleet is.
Scott: Really really getting tighter and tighter and there are so many pieces to the puzzle.
Scott: It's hard to be precise on which component is the driving factor.
Scott: I prefer to look at it more like the tipping point that the glass at some point is just full rifle lets say its slowing over it's overflowing so and.
Scott: In a way that's what I think we are seeing.
Hence for the beginning.
Scott: That's great to hear.
Scott: Next is on the capital allocation you talked about it I guess, but.
Alicia: So Alicia.
Scott: There are new spark.
Scott: The proceeds to buy back shares.
Scott: Very attractive levels I would say.
Scott: That made a lot of sense.
Scott: But of course now just talking back to.
Scott: Onetime nev more or less.
Scott: So the question is do you see better opportunities elsewhere.
Scott: One vessel.
Scott: Transactions or arb.
Scott: Our buyback still on the table.
Scott: So I think just to clarify the buybacks. We did in December they were done with the resources at hand, but there are a lot dependent on us selling the ship, but we felt there was dislocation.
Scott: A dislocation in the capital markets compared to the underlying dynamics of our business. So when we traded below nine box wherever I can.
Scott: On that and I think in hindsight proved to be a very good decision.
Scott: We also haven't stated service has three purposes for the cash proceeds from the sales can layer gives either vessel acquisitions as you asked about buybacks or debt prepayments.
Scott: Where the share prices pricing now we are normally lots of buying back stock.
Scott: We are always on the lookout for good investment opportunities in ships, but they're hard to find frankly.
Scott: Has that number sort of all aspects of the test to the left in terms. So H ship design delivery et cetera, and price of course, so that we have the capacity financially to do that if we if we want to.
Scott: And then lastly of course that is debt prepayments.
Scott: It would reduce interest expense in the company.
Scott: And it's a detailed question of whether we then increase.
Scott: Increase our staff capacity.
Scott: So we can access to funds.
Scott: Other activities later, if you want to or <unk>, many times in the past.
Scott: The focus that prepayments on taking out install scheduled installments.
Scott: There are certain periods. So you have to finally decide on that.
Scott: Maybe it will maybe be more clarity on that.
Scott: When we present, our first quarter earnings.
Yes.
Scott: Okay, Great that's clear thank you.
Scott: Thank you, we'll now take the next question.
This is from Omar <unk> from Jefferies. Please go ahead.
Speaker Change: Thank you good afternoon, I just had a follow up on.
Speaker Change: <unk> first question.
Speaker Change: Talking about the VLCC rates basically jumping here over the past 345 weeks.
Speaker Change: The 55 to 60 K range as you outlined.
Speaker Change: You mentioned that a big reason for that is their sentiment and then also just the fact that theres more cargo.
What about in terms of just the actual sanctions themselves.
Speaker Change: Part of it obviously sentiment, but have we seen an effect of that yet on rate has been.
Speaker Change: We're seeing shifts removed from service and that's part and.
Speaker Change: Partially why rates are rising or is that not even yet.
Speaker Change: Taking place.
Speaker Change: I think you're right in saying that the primary driver.
Speaker Change: This early pace has been sentiment, but we are seeing as I alluded to some change in behavior in China, and how they procure oil.
Speaker Change: That means from whom are from which countries and that's also will relate to how it's going to be transported so.
Speaker Change: There were sanctions that you might have seen for the Shandong.
Speaker Change: Binary complexes, which meant that ports could not.
Speaker Change: Taking ships that were sanctioned so thats.
The real thing.
Speaker Change: Secondly, we understand that there are some tax issues with several of these refiners that.
Speaker Change: It means that they will either face bankruptcy or.
Speaker Change: Transfer ownership to maybe maybe.
Speaker Change: It's all entities and this is already changing or driving the way oil is being procured. So that's why I'm, saying I think there is.
Speaker Change: There is also increased oil demand now and this is in the early innings I think what's at play here going forward.
Speaker Change: Okay. Thank you and then just a second.
Speaker Change: Second question, just on slide 10, where you outline the VLCC fleet and how it's developing.
Speaker Change: Aldo fleets do you have the 105.
Speaker Change: And then you have the 92 that are sanctioned.
Speaker Change: Any sense or are you able to see what the shadow is trading.
Speaker Change: 105 Vlccs.
Speaker Change: They are trading in today's market and then also what the other 92 are doing.
Speaker Change: It's hard because there is no access to track right. So there has to be sort of physically.
Speaker Change: <unk> III satellite images and you need to be liable as said it is not the task for DHT to do in the apparel, but I think we won't this fleet is very inefficient.
Speaker Change: And with that I don't think we should assume sort of a one for one change if.
Speaker Change: Thanks to the viral load essentials ship to shifting to a non sanctioned barrel.
Speaker Change: Can be more efficiency alphabet exact ratio is hard to be hard to be specific.
Speaker Change: But the compliance piece, obviously is more efficient and more productive if you like so.
Speaker Change: Again I'll just if you look at just the gradual shift in sort of the gravity and you're also seeing reports of some of these ships now being sold for demolition earlier.
Speaker Change: And we understand there are other discussions with brokers for breakers for several additional ships. So.
Speaker Change: I think <unk> stated earlier on that we looked at this shuttle fleet, that's sort of the new scrapping.
Speaker Change: In sort of in waiting until extra scrapping takes place and that might be the case mouser.
Speaker Change: Okay, and maybe just sorry, one final one just on the I'm just looking at the table.
Speaker Change: At the end of next year, they will have you'll have 184.
Speaker Change: LCC in the fleet that are 25 years or older. The U can you envision those shifts sticking around.
Speaker Change: H R.
Rob: Rob It's Scott.
You have to have a trade where actually equivalent to slip possible to do it and keep in mind. One thing is not just whether the customer using the ship can say im okay with a 25 year old ship.
Rob: You cannot nominate that ship to lift the cargo from say, Saudi Arabia are from ports in West Africa, or U S. A oclock because the terminals.
Rob: Got you.
Rob: Except that most of these ships.
Rob: It's the same and then most discharge ports.
Speaker Change: Uh huh.
Rob: Yeah.
Rob: The approval by the receiving facilities is also part of getting a deal done on the cargo. So all of this is just becoming very difficult to I have a very hard time to think that there are any commercial opportunities for these ships, maybe with a few exceptions, but the majority I think will be alpha business.
Speaker Change: Okay, all right very good thank you Brian.
Speaker Change: Thank you Mark.
Rob: Thank you.
Speaker Change: Your next question is from the line of pet to Hogan from APG Sandell color. Please go ahead.
Speaker Change: Good afternoon.
Speaker Change: A quick question on prices.
Speaker Change: Oaken about.
On the right side, it's been lots of volatility in terms of the quoted prices for ethylene.
Speaker Change: Nothing much has really changed over the past skus over the past months.
Speaker Change: If you were to sell or.
Speaker Change: Bye.
Speaker Change: What Im guess Im asking is the price of and the next transaction.
Speaker Change: New York VLCC resale VLCC work with that.
Speaker Change: Tom talked about today I think if it works out.
Speaker Change: So when you say resale and that assumes that it's solar product deliveries of delivery now so that will have to be a little bit five ships that are scheduled to be delivered this year and some of those ships are already oftentimes charter. So I think the likelihood of getting hold of those.
Speaker Change: As <unk> said its going to be difficult.
Speaker Change: There are some opportunities for maybe 26 delivery to pick up.
Speaker Change: Under construction from I would say shipyards in China have not built the FCC's before so then you need to be a buyer willing to.
Speaker Change: Venture out such a transaction.
Speaker Change: Given the fact that <unk> have no experience that it will be at the lower price tenants days to ship the come from Korea or from an experienced they are in China.
Speaker Change: The liquidity in this game is very very thin, if we wanted to buy a five year old ship.
Speaker Change: There may be potentially some things that can be done.
But.
Speaker Change: <unk>.
Speaker Change: It's not like a full range. So I'll ask this to pick up right. So.
Speaker Change: Liquidity is Tim there is quite a quite good liquidity on the borrowing side for ships that are sort of closing in the 15 years that our 12 13 14 years and there are.
Speaker Change: Few buyers.
Speaker Change: And there are still some of ours.
Speaker Change: The ships that are yet to be 20, Airbus So have sort of a couple of three years left in them.
Speaker Change: And I think that.
Speaker Change: All of the sort of political stuff going on.
Speaker Change: There will be a need for that.
Speaker Change: Some of the people that have been operating either on the fringes of this market oriented through renew themselves. So I think there will be continued sales of ships that are maybe a tad younger than some of the ships that are in that.
Speaker Change: In that fleet, so shifts that I build in 56789, maybe Russo.
Speaker Change: Okay.
Speaker Change: You bet.
Speaker Change: If I were to post a question like this.
Speaker Change: I have a five year old ship.
Speaker Change: All.
Speaker Change: Of which prices are hunkered down 14, we did that would be a buyer or seller out of 114, which is the price we would use it for a five year old ship.
Speaker Change: You can see a couple of days.
Speaker Change: Okay.
Speaker Change: Thank you.
Do you really expect me to reply to that.
Speaker Change: Sorry.
Speaker Change: But I'm not going to comment on that.
Speaker Change: Okay. Okay.
Speaker Change: No my my intention will simply just to get.
Speaker Change: So im feeling for whether those prices we now use.
Speaker Change: <unk> is in the marketplace too high or too low, but we will continue to do some.
Speaker Change: If I can follow up with sort of another question here.
Speaker Change: And then the balance on which we'll see some from <unk> Ben.
Speaker Change: Making Russian oil available again.
Speaker Change: Is it possible now too.
Speaker Change: And I understand that this is going to be speculation more than anything else.
Paul: Paul the VLCC market.
Speaker Change: C market didn't.
Paul: Didn't experience the same.
Paul: One question oil sanctions.
Paul: Yes.
Speaker Change: You can figure out how the impact of Russian oil potentially.
Paul: Being sanctioned.
Speaker Change: Again, we'll make an impact on the VLCC market.
Paul: Uh huh.
Paul: Yes.
Paul: So I understand the question. So I think the key sort of restrictions that drove this.
Paul: No.
Paul: Colby the dislocation in the earnings between Aframax, and Suezmax and Vlccs over these last two three years.
Paul: Was that primarily loading area, so rational in the Baltic Sea.
Maxie cannot accommodate vlccs if those.
Paul: We also have been able to accommodate vlccs I'd tell you the vlccs with a goal to India and China with Sanchez oil <unk>.
That was all possible. So if the rest of oil if for some reason are going to be redirected back to Europe.
Paul: B.
Much shorter hauls for the ships that have been engaged in long haul and the smallest sector such as efforts. The suezmax is and the oil currently going into Europe will then go out to Asia, again, which will be used only as disease, Hence my comment that I think.
Paul: The visa CSR that wants to stand.
Paul: So when there is and what's going on now how things will develop so it might be a little bit hit on the nose for somewhat smaller.
Paul: Smaller ships.
Paul: Okay. Okay. Thank you. Thank you.
Paul: Thank you.
Paul: Thank you.
Speaker Change: And the last question today is from the line of Greg Lewis from <unk>. Please go ahead.
Greg Lewis: Yeah, Yeah, hi, Thank you good afternoon, and thanks for taking my questions.
Greg Lewis: I guess my first question is around the comments you made.
Greg Lewis: Around maybe an increasing in demand in the time charter market I guess earlier last month, there was a trader that came in and took a couple of vessels.
Greg Lewis: I think it was for six seven months maybe.
Speaker Change: Yes, just as you see the time charter market developing your view is a lot more insightful than ours.
Greg Lewis: Could you maybe are there.
Greg Lewis: Largely a traders coming into this market are their captives that are coming in and is that hey, Theres, a new U S administration and tell out. The next couple of quarters are going to be messy or is that kind of some of the fundamentals that you're laying out where hey supply looks tight for the next couple of years and really what I'm wondering is are our customer.
Greg Lewis: Or potential charters, starting to look to get a little bit longer.
Greg Lewis: Yes, I understand.
Greg Lewis: The traders they are basically all of it in the market.
A lot of their pricing is driven by how the forward curve is looking at what they can do in the FFA market because they are typically sort of take off some of the exposure in the FFA market will take a profit that will float, but I think it will gradually developing is that number of end users.
Greg Lewis: Oil companies to refiners.
Greg Lewis: Some of the time charter fleets are shrinking because time charters are expiring.
Greg Lewis: And they also have business that they need to sort of performance. So they are coming a bit light.
Greg Lewis: Hence there are none.
Greg Lewis: Oh end users if you can use that expression.
Greg Lewis: Or is that already in the market now and the interest in.
Greg Lewis: Building up the fleet, replacing ships that are expiring.
Greg Lewis: Sure.
Greg Lewis: And we always at PST had a very serious customer focus and try to engage with <unk>.
Greg Lewis: Our customers the political Kissner spoke market. So I'm hopeful that there will be opportunities for us to to develop some of our fixed income for our fleet exactly how much we can do waste of athene and depends on the moment.
Greg Lewis: There is real demand from end users.
Greg Lewis: Okay, Great and then just my other question was on.
Greg Lewis: It seems to be a non event, but.
Greg Lewis: I guess last month.
Greg Lewis: The U S put some some Chinese shipyards under like a.
Greg Lewis: Oh, My God Black list or whatever I think it was not sanctioned but blacklist. It does does that create any impacts in terms of international trading companies.
Greg Lewis: Ability to use those yards.
Greg Lewis: Drydocking and special surveys or I would think it doesn't but I just want to clarify that.
Greg Lewis: Yes.
Greg Lewis: I appreciate that you think that I can clarify it.
Speaker Change: I'm not sure I can give you.
Greg Lewis: A critical aspect of that.
Speaker Change: I'm not so sure it is.
Speaker Change: It is an issue.
Speaker Change: At least not based on the information that's available to me now.
Speaker Change: Sorry, I don't see any further from that.
Speaker Change: That was helpful in and of itself. Thank you very much. Thank you. Thank you Greg. Thank you.
Speaker Change: Thank you there are no further questions I will now hand back to the speakers for any closing comments. Thank you.
Speaker Change: Okay. Thank you for all for dialing in to the <unk> earnings call. Your interest and support is highly appreciate it have a good day.
Speaker Change: Thank you. This concludes today's conference call. Thank you for participating and you may now disconnect.
Speaker Change: Okay.
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