Q4 2024 Capital Clean Energy Carriers Corp Earnings Call
Thank you for setting by as.
Speaker Change: And welcome to the capital Clean Energy carriers Corp, fourth quarter 2024 financial results Conference call.
Speaker Change: We have with US Mr. Jeremy Campbell.
Speaker Change: But youre right this ship.
Richard: <unk> Executive Officer Richard.
Speaker Change: It's Brian Gallagher.
Speaker Change: Executive Vice President Investor Relations and Mr. Nicos <unk>.
Nicos: Chief commercial officer.
Nicos: At this time all participants are in a listen only mode. There will be a presentation followed by a question and answer session at which time. If you if you wish to ask a question.
Nicos: Press Star one on your telephone keypad and wait for your name to be announced and.
Nicos: I must advise you that this conference is being recorded today.
Nicos: The statements in todays conference call that are not historical facts, including our expectations regarding acquisition transactions and our expected effect on us cash generation equity returns.
Nicos: Debt levels, our ability to pursue growth opportunities, our expectations or objectives regarding future distribution amounts.
Nicos: Or unit buyback amounts.
Nicos: Capital Reserve amounts distribution coverage future earnings capital allocation as well as our expectations regarding market fundamentals.
Nicos: The employment of our vessels, including re delivery dates and charter rates may be forward looking statements as such as defined in section 20 <unk> of the securities of the Securities Exchange Act of 1934 as amended.
Nicos: Forward looking statements involve risks and uncertainties that could cause the stated or forecasted results to be materially different from those anticipated unless required by law we expressly.
Nicos: <unk> disclaims any obligation to update revise or revise any of these forward looking statements, whether because of future events, new information a change in our views or expectations expectations to conform to actual results or otherwise, we make no prediction or statement about the performance of our common shares.
Nicos: I would now like to hand over.
Speaker Change: The call to your speaker today, Mr. <unk>.
Nicos: Brian Gallagher. Please go ahead Sir.
Nicos: Thank you.
Speaker Change: Morning afternoon, wherever you are and thanks for joining the capital clean energy carriers Q4, 2024 earnings call. As a reminder, we'll be referring to the supporting slides available on our website as we go through today's presentation.
Nicos: So let's start with the highlights on slide three.
Nicos: We're very busy period for the company during 2020 for the fourth quarter was more standard and routine the company generated net income of $28 million from continuing operations.
Nicos: This dividend of <unk> <unk> per share has been declared.
Nicos: The five container vessels agreed to be sold the company completed the sale of three of these within the quarter. One in January 2025, while the loss was and is expected to be delivered in early March to its new owners.
Nicos: As discussed on our last call we remain focused on improving the liquidity in our share and have initiated an ATM program to help us address that issue.
Nicos: We continue to work hard to improve and build the company profile and are pleased that we now have increased research coverage to seven analysts that's up from three this time last year.
Nicos: Look forward to delivering further initiatives and our capital market engagement during the year.
Nicos: We know and appreciate that this will take time, but we are aware that this is necessary to provide the group with a trading currency in the future and further strategic optionality.
Nicos: The key event during the quarter was the challenging LNG spot market background, which not only was absolutely its usual Windsor freight rally, but also saw rates hit multiyear lows driven by an oversupply of vessels and lower ton mile trading patterns.
Nicos: Capital Clean energy carriers is largely insulated from these short term headwinds, but we believe there will be a silver lining to this market in terms of a rationalization of the supply side.
Nicholas: Our new head of commercial Nicholas <unk> with <unk>.
Nicos: Went through this in detail much later.
Nicholas: With that I'll hand, it over to our Chief Executive Jerry kind of Georgia has to run through the clinic.
Speaker Change: Thank you Brian.
Speaker Change: And good morning, or good afternoon, everybody.
Speaker Change: You said this was a.
Speaker Change: A more routine quarter for <unk>.
Speaker Change: <unk>.
Speaker Change: Turning to the financial slide five profit from continuing operations rates the $28 million, we derived a further $72 2 million in one off gains this quarter from completing the sale of three out of the five container vessels, we agreed to sell last quarter.
Speaker Change: We will continue to be opportunistic about the sale of the three remaining container vessels. As these are modern eco vessels with long term cash flow attached.
Speaker Change: We declared a dividend of <unk> 15 cents for the quarter I think that is a good opportunity to reflect on what we have delivered since the company's listing on NASDAQ in 2007.
Speaker Change: This quarter is the 70 <unk> consecutive quarter that the company has paid a cash dividend.
Speaker Change: In total the company has returned its kind of a market cap over $1 billion back to shareholders in cash dividends and shares.
Speaker Change: Returning value to our shareholders is in our DNA and we look forward for the company to add further to that track record going forward as our fleet under construction is delivered in 2026 and 2027.
Speaker Change: Now the quarter showed operating income from continuing operations of <unk> 20.
Speaker Change: $8 million up from $1 1 million during the comparative quarter last year.
Speaker Change: Interest charges rose as the fleet increased in size to $36 7 million compared to $25 8 million during the same quarter last year.
Speaker Change: At the same time interest charges were lower by approximately 4 million compared to the previous quarter Q3 'twenty four.
Speaker Change: Reflecting the softening of sulfur.
Speaker Change: Now turning to slide six we see that our balance sheet continues to grow with the addition of new vessels in their asset base as of year end 2024 was over 1 billion higher than the same period last year.
Speaker Change: Also our leverage ratio has improved quarter on quarter, reflecting improved cash generation on the back of the net cash proceeds generated from the sale of three out of the five container vessels, we agreed to sell back in September.
Speaker Change: Importantly, our net leverage fell below 50% at year end.
Speaker Change: Our capital base consolidate now for a period as we have not delivery scheduled until early 2026.
Speaker Change: Turning now to the next slide slide seven.
Speaker Change: On slide seven you can see our revenue backlog of $2 5 billion remaining highly diversified with no counterpart, having more than 20% share.
Speaker Change: $2 2 billion of this backlog is expected to come from our LNG assets.
Speaker Change: Our remaining type of duration is seven years, and we expect to add to the strength as we start again, taking deliveries of our new builds in 2026 onwards, and fixing long term employment for these assets.
Speaker Change: If I'm moving now to slide nine and our LNG market slides I would like to introduce our new Chief commercial officer, Nicols Supervacuous, who will run through the slides and be available to answer your questions at the end of the call.
Speaker Change: Nicolas joins us from the LNG trading side that country partners building on a decade embedded in various roles in the LNG sector welcome Nicolas.
Speaker Change: Over to you.
Speaker Change: Okay.
Speaker Change: Thank you Jerry and good afternoon, everybody. Thank you for inviting me to speak on this call.
Speaker Change: I would like to start with slide nine of the presentation and I would like to briefly talk about the current state of the LNG freight market. The reasons that led to this market and our view of how the market will develop in the future.
Speaker Change: Despite the LNG demand, reaching its seasonal peak in the fourth quarter in global gas prices, reaching a multi month high dividends. Your freight market remained under pressure dropping two old time seasonal lows. This.
Speaker Change: This weakness is the product of a fully maintain or increase in supply and reduction in ton mile demand for LNG carriers lifting U S cargoes, a situation in which ramped up throughout the year, but reached its peak in Q4.
Speaker Change: On the supply side delays of certain liquefaction projects left the vessels that we're delivering against those projects exposed to the spot and short term market less I think significant pressure on charter rates for those periods specifically throughout 2024, New Orleans, Chicago Fleet grew by 62 ships, whereas global LNG trade grew more.
Speaker Change: Generally by just around one 7% due to limited project startups, mainly from the U S.
Speaker Change: The delivery ramp up of vessels throughout the year with significant starting with 12 deliveries in the first quarter and ending with 23 deliveries by the fourth quarter.
Speaker Change: On the demand side, the weakness in the Drake mttf spread driven by subdued demand in Asia and stronger than expected demand in Europe on the back of supply outages in our colder weather led to an erosion in ton mile demand and a further increase in the supply of vessels in the Atlantic Basin.
Speaker Change: The combination of the above led to a significant drop in short term charter rates in Q4.
Speaker Change: Evident in slide nine.
Speaker Change: What is also demonstrating the same chart. However is that despite the weakness in the short term market rates for longer periods display greater resilience on the back of stronger fundamentals starting from the second half of the decade.
Speaker Change: Long term charter rates still command, a significant premium compared to short term rates with the latest fixture for a period of over 10 years for a modern two stroke vessels in 2027 reported close to 90000 Boes per day.
Speaker Change: Long term rates are supported by limited availability of new buildings, the expectation that demand for those new buildings without pay supply as well as high new building prices both for the ships on the water, but also for any new orders.
Speaker Change: Turning to slide 10.
Speaker Change: Is it indicating the chart. The order book comprises of 317 vessels of those only 18, including our ships are.
Speaker Change: Free represented a very low ratio just 6% of opening new buildings for total order book.
Speaker Change: The same time as mentioned new building prices remained almost at all time highs around $260 million for a new order preventing a surge of speculative orders.
Speaker Change: A key part of our thesis however, what happens to the older technology vessels, which is covered on slide 11.
Speaker Change: The current weakness in the spot and short term market is expected to accelerate the commercial removal of older smaller and less efficient vessels approaches that increasing pace last year with a record high of eight older steam turbine vessels being sold for scrap.
Speaker Change: Currently around 200 vessels, which is approximately 32% of the current fleet are older steam turbine vessels.
Speaker Change: Turning to slide 10 to expand on this point.
Speaker Change: It is clear from the chart on the left hand side that the re delivery profile of those ships is ramping up while the long term chartered under which most of these vessels operate are not expected to be renewed for a combination of commercial and environmental reasons.
Speaker Change: In 2025 more than half of the steam fleet, which is around 120 vessels are still operating under long term charters. However, this number is expected to drop to just 36 ships by 2030.
Speaker Change: Given the current age profile of the steam fleet and their upcoming fourth and fifth special surveys a large portion of these vessels is expected to retire or possibly sold for alternative use.
Speaker Change: That covers the supply side on LNG shipping and I would like now to turn to the demand side slide 13.
Speaker Change: Even though LNG supply was flat year on year in 2020 for an incremental 200 million tons per annum of LNG liquefaction capacity that have taken FID.
Speaker Change: Currently under construction is expected to come online between 2025 and 2030, along with an additional approximately 150 to 170 million tons, which are waiting regulatory and investment approvals approvals, but I don't expect it to be accelerated under the new U S administration.
Speaker Change: As a result, the growth in global LNG supply stemming from an increasingly liquefaction capacity. Later. This decade suggests that demand for LNG carriers is expected to outpace supply over the coming years and lead to a tightening of the market from 2026 or 2027 onwards in summary, when looking further ahead the long term.
Speaker Change: Modern LNG carriers remains robust, especially for state of the art latest generation vessels, such as those controlled by C. C C.
Speaker Change: Combination of removals of older technology shifts and the increasingly reflection capacity between 2025, and 2030 provides fertile ground for modern LNG carriers and demand for those vessels is expected to exceed supply Linux about tightening the market and healthy charter rates during the second half of the decade.
Speaker Change: Yes.
Speaker Change: Our charter profile looking at slide 14 remains robust solid with $2 2 billion of revenue backlog, all with Blue Chip Counterparties, where we have a long and strong relationships.
Speaker Change: Looking at open positions and in terms of strategy. We will continue to have an opportunistic approach and look to diversify our open positions. Both in terms of win with fixed and for how long with explorer.
Speaker Change: While we continue to seek long term employment for some of our open positions in 2026 and 2027, we also see value in the midterm space, Let's say three to five years as we aim to stagger and see value in spreading and diversifying our delivery profile.
Speaker Change: That concludes the slides on the LNG market and I will now pass the floor back to Jerry.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Thank you Nicholas.
Speaker Change: So slide 16 looks at our fleet today and the growth we have in place with 16 more vessels scheduled to join the company by 2027.
Speaker Change: Our LNG fleet on the water will be augmented by six new vessels growing the core LNG fleet by 50% by the third quarter of 2027.
Speaker Change: Midsize gas carriers will be on the water by that final Lindsay.
Speaker Change: How do you deliver reflecting in full our people, though what's the gas transportation and solution company.
Speaker Change: For the moment, we still retained three containers, which have long term employment in place for the next eight years with options to extend by a further six years beyond that.
Speaker Change: These vessels will give us strategic optionality, which we will consider going forward.
Speaker Change: As Nicolas outlined in his remarks, there are strong grounds to see the LNG market rebalancing some time from 2026 onwards.
Speaker Change: The current short term freight rate headwinds as he illustrated generate the vessel supply response as well as other technology vessels exit the fleet.
Speaker Change: Importantly, the company will have a very young fleet delivering the lowest unit freight cost possible to date to our customers with the lowest environmental footprint, both critical aspects to say for success, given the commercial requirements and the emerging regulatory environment when it comes to carbon and methane emissions.
Speaker Change: So to conclude and before we take questions. Please turn to the summary slide number 17.
Speaker Change: In short.
Speaker Change: Capital Clean energy carriers is expected to control the largest LNG to stroke carrier fleet available to investors upon delivery. In addition to the other 10 multi gas vessels.
Speaker Change: The company has considerable contract coverage of 70 years already have strong visibility on cash flows. While we believe that we have an advantage over many of our peers in only being invested in the latest cast technology vessels with.
Speaker Change: With almost all having to you if you will capabilities.
Speaker Change: Finally, we will continue our endeavors to raise the public profile of the company and its trading liquidity.
Speaker Change: Brian pointed out at the beginning of the call we have undertaken a number of initiatives that have started bearing fruit.
Speaker Change: The increased analyst coverage and wider engagement with Investor community and expect also the ATM to help incremental in that direction.
Speaker Change: Appreciate of course at building a profile will take time, but we're pleased and proud of the progress. We have made in just 12 months I look forward to making further gains on our objectives going forward.
Speaker Change: With that I will hand, it back to the operator for Q&A. Thank you for your attention.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, if you would like to ask some question. Please press star one on your telephone keypad and a confirmation tone will indicate your line is in the question queue. We.
Speaker Change: You May press Star two if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: And our first question comes from the line of Liam Burke with B Riley Securities. Please proceed yes.
Liam Burke: Thank you hi, Jerry how are you.
Speaker Change: I am good how are you.
Good thank you.
Liam Burke: With the rates being at.
At the bottom I mean, thats put it mildly.
Speaker Change: Are there any assets available that you'd be interested in looking at or are you happy with the six new builds that you have on an order.
Liam Burke: Interestingly enough.
Liam Burke: When you look at the fixtures that you see in these.
Liam Burke: <unk>.
Liam Burke: As you say quite challenging spot market.
Liam Burke:
Liam Burke: I'm not sure if there is a single one that is really.
Liam Burke: Being concluded I mean for two stroke vessels bye bye.
By owners.
Liam Burke: The overwhelming majority of these speaks yours relate so effectively vessels that.
Liam Burke: Charters have.
Liam Burke: Chartered for long term charters and because of the delay in certain projects and they don't have the volume. So they are redeploying them in the market. So what I'm trying to say with this is that it.
Liam Burke: We don't have yet.
Liam Burke: Owners.
Liam Burke: And possibly with one seat.
Liam Burke: Suffering to the extent that you will see distressed asset the assets.
Liam Burke: In the market that's at least for two stroke vessels, so I think <unk> and potentially.
Liam Burke: Steam turbine vessels is another story.
Liam Burke: At the same time, new building prices have been quite steady.
Liam Burke: If anything we have seen a.
Liam Burke: A data point, which is not very different from what we have seen that.
Liam Burke: And previously so around that $255 million to $116 million Mark and we are hearing also of a number of projects that.
Liam Burke: They are out there.
Liam Burke: And potentially we will start the new round of.
Liam Burke: Of ordering for some projects that you have for 2028 and 2029, so shipyards would not be inclined to lower their prices.
Liam Burke: So if there are assets out there that.
Liam Burke: <unk> become increasingly interested in terms of price or if we see again, new building prices come down of course, we would be interested to look at it but there is no indication of these test yet.
Liam Burke: Great. Thank you and on the six new builds.
Liam Burke: Have you started discussions with potential shippers on longer term charters or long term charters.
Liam Burke: Or do you anticipate having to operate in the spot market when it looks like between recycling and new production coming online.
Liam Burke: They do just fine.
Nicolas: Let me pass this question to Nicolas.
Liam Burke: That's based upon sorry.
Speaker Change: Hi, and thank you for this question and it's a reasonable question to ask.
Speaker Change: All we can say about this is that there have been multiple discussions and fixtures for medium to long term charters over the last few months.
Speaker Change: While challenging support in short term charter market has resulted in weaker sentiment.
Speaker Change: Arguably some price erosion.
Speaker Change: Don't see that happening in the long term space.
Speaker Change: As mentioned previously the latest charter for 10, a year plus is still in the 90.
Speaker Change: Per day range, and we don't see that situation changing from 426 27 onwards.
Speaker Change: We are under no pressure to give in on pricing and with new deliveries being 12, or so months away. We continue to engage with charterers and hopefully we'll have more to report going forward.
Speaker Change: For us it still remains very important to stagger, our charter expirations in the re delivery profile and potentially also.
Speaker Change: Time some of these re deliveries towards the end of the decade, where we see the market potentially being very tight. So we're looking at everything both midterm and long term charters and we want to diversify what we're trying to do but we.
Speaker Change: We would hope to share more with you in <unk>.
Speaker Change: Next few months.
Speaker Change: Great. Thank you Nikos. Thank you Gerry.
Liam Burke: Thank you Liam.
Liam Burke: Again, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: And the next question comes from the line of Alexander.
Liam Burke: Right.
Speaker Change: Leather research. Please proceed.
Speaker Change: Good afternoon, and thanks for the time.
Speaker Change: So I think.
Speaker Change: At.
Speaker Change: Taking a quick look at the.
Speaker Change: <unk>.
Speaker Change: Liquid <unk> carriers.
Speaker Change: Can you provide any update on that.
Speaker Change: Progress with commercial discussions for those assets.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: Here I.
Speaker Change: I think we went Oh, if you wanted a more long term fundamentals of that business in the previous quarter, but overall as we have said in the past.
Speaker Change: These vessels are due for delivery in 2000.
Speaker Change: 26, oh spread across the quarters.
Speaker Change: I think given the trajectory of the CCA <unk> project that will need a shipping.
Speaker Change: Which is from mostly from 2000 22029 onwards, and as we have said in the past. The idea is that these vessels being multi gas carriers.
Speaker Change: It will be deployed in the.
Speaker Change: Sure.
Speaker Change: To medium term market, let's say.
In the LPG and ammonia business.
Speaker Change: Actually we see quite a bit of interest because.
Speaker Change: In the handy sized LPG ammonia segment, which is where these ships belonged to 22000 cubic.
Speaker Change: Segment, there is a very small order book.
Speaker Change: I mean in addition to our shapes are theres, another four or five seats that are on order.
Speaker Change: And it tends to be quite an AIDS.
Speaker Change: Our fleet profile so.
Speaker Change: Thank you.
Speaker Change: You should expect that.
Speaker Change: As these vessels come closer to delivery, we will have.
Speaker Change: We will deploy them in that business.
Speaker Change: We are also discussing some long term business and with time charter some of them they find quite interesting the flexibility of these assets. So.
Speaker Change: The ability to do ammonia.
Speaker Change: In the early years, and then seamlessly go into.
Speaker Change: The liquid business and there are quite a few energy companies that are across these type of business. So the production of blue and green ammonia as well as into Cc U S projects.
Speaker Change: So I think.
Speaker Change: Over the next few months, but especially closer to delivery so towards the end of the year, we will have more news on unemployment.
Speaker Change: Alright, thank you for the detail there.
Speaker Change: Just a quick follow up looking at the container vessels can you give a general sense of the S&P market at the moment, what sort of appetite are you seeing for those three remaining assets.
Speaker Change: Yeah.
Speaker Change: Continued market.
Speaker Change: It remains quite.
Speaker Change: Robust both in terms of asset values as well as in terms of earnings.
Speaker Change: New building prices, which has an overall pattern also remained quite high. So today the replacement value of these assets will be closer to $150 million of course they are.
Speaker Change: Baird sort to say Theres a couple in there.
Speaker Change: Evaluation because of the long term charter rates. So this is more of a cash flow.
Speaker Change: If you want exercise.
Speaker Change: Given also that there is a number of two year options after the.
Speaker Change: And of the same period, which is another eight to nine years, depending on the ship.
Speaker Change: So.
Speaker Change: I think demand is quite robust the movement of interest rates, though probably is more correlated with.
Speaker Change: The valuation of these vessels than actually the underlying container assets, we're quite opportunistic in the sense that if we see a good bit to we will look to take it otherwise. We are also happy to stay with this long term cash flow underlying the gas business.
Speaker Change: Alright, Thank you for the additional color there.
Speaker Change: All from my side I'll turn it back over thank you guys. Thank.
Speaker Change: Thank you Alex.
Speaker Change: Once again, ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: And the next question comes from the line of Omar <unk>.
Jefferies: Jefferies. Please proceed.
Speaker Change: Thank you.
Speaker Change: Hey, guys good afternoon.
Speaker Change: Thanks for the update.
Speaker Change: Hi, Jerry I just wanted to ask maybe just a couple of questions perhaps on the market just to get a bit more kind of understanding because.
Speaker Change: Clearly LNG spot rates, which youre not exposed but come off quite a bit.
Speaker Change: And it's been like that for perhaps over the past four or five months.
Speaker Change: There is oversupply with the <unk>.
Speaker Change: The new buildings ahead of project startups.
Speaker Change: Could you, maybe just talk a little bit about what youre actually seeing in the spot market is it just simply too many vessels.
Speaker Change: And not enough cargo to spread around or.
Speaker Change: Or is the spot market itself, just not seeing any action.
Speaker Change: Thank you Omar I think I'll, let <unk> take the difficult questions Hollander.
Speaker Change: Hi, Omar.
Speaker Change: Reason number one in this market.
Speaker Change: The situation right now can be summarized by two main.
Speaker Change: Factors one is an increase in supply as you very accurately stated there's been many projects that were supposed to deliver in 2024, and we are delayed well into 2025, or even 2026 Golden pass being one of them with around 18 million tons of production, which equates to demand for around 30 ships.
Speaker Change: Just one example, there are three or four more projects that were delayed for the same period.
Speaker Change: And also the as I.
Speaker Change: During the presentation the.
Speaker Change: Narrowing of the jerky mttf spread led to all of those vessels are Jerry referred to being the <unk>.
Speaker Change: Targeting Europe as the best value destination, which led to a further increase of supply of vessels in the Atlantic Basin.
Speaker Change: What is more looking down the forward curve for Jay came into ETF.
Speaker Change: That spread remains to be or that are made to be shot in vessels pointing to Europe. So that gave us the charters and the sublet theres a confidence to look to charter the vessels for short term periods multi month or one year charters and then be happy to play the spot market now in terms of activity from the cargo side there hasnt been production in.
Speaker Change: There have been discussions in volumes, but all of those.
Speaker Change: Fixtures.
Speaker Change: Popping up low rates because there is an oversupply of ships.
Speaker Change:
Speaker Change: Your question sort of your question. The first part was why is the market in the state, which is which this is a summary, but did you follow up with when do we expect this to improve or how do we expect it to end.
Speaker Change: Yes.
Speaker Change: I guess that's the.
Speaker Change: More of a crystal ball question.
Speaker Change: Hurt to maybe get a sense from that it sounds like.
Speaker Change: The timing on the correction is not.
Speaker Change: Not really a crystal ball is just.
Hands on many things, but the reasons that will drive the correction are very clear and again I've mentioned in the presentation. When it comes down to two main factors. One is the fact that Ah.
Speaker Change: Third of the LNG carrier fleet right now, which are the steam ships cannot survive in this environment. There are not simply even if you seek for alternative solutions like let's say FSU project deficit or do conversions or even laying up.
Speaker Change: T D.
Speaker Change: A market in which the vessels would suffer for far too long and it's a multi month periods.
Speaker Change: We simply have to see scrubbing now the ramping up of scrapping and how quickly those vessels will.
Speaker Change: Will be removed is a bit of a crystal ball, but our view is that at least 80 to 100 ships would be removed in the next three to four years.
Speaker Change: That's one that's a supply side reaction right now we have the demand side reaction, which happens from 2026 27 onwards for the new projects coming online, which.
Speaker Change: While we see by 2030 based on current if ideas and projects under construction and another 200 million tons will hit the water that's demand for approximately 350 ships and if we are accounting for that project.
Speaker Change: Our clothes and how the sba's and our pending some regulatory approvals, which will be facilitated by the Trump administration, we could easily see another 170 million tons on top of those 200. So it's.
Speaker Change: It's not a matter of if but the matter of when the market will correct and our viewers.
Speaker Change: By mid 2027, and we should see that inflection point I hope that answers your question.
Speaker Change: It does thank you.
And then maybe just as a.
Speaker Change: Follow up I think Liam had asked this before just in terms of the new buildings that you have.
Speaker Change: Those deliver and if we're still in that stock market, where you need to put them on the.
Speaker Change: And to spot trading do you have the capability to do so in house or is there anything that you need to do in order to do that or are you got to go from that.
Speaker Change: We are 100% good to go if we needed to do that but that is not our strategy and we would not have to do that.
Speaker Change: What we are trying to do and there are currently active discussions for which I cannot go into too much details, but what we're trying to do is as mentioned before.
Speaker Change: Diversifying our delivery profile into periods that we expect the market to be very tight for example, let's say we have this new buildings in 2026, we'll look at anything from 15 year time charters to three or four year time charters.
Speaker Change: If we if the latter takes place then we would take the vessels back in 2020, 920, 30, where we see a significant.
A supply deficit compared to the demand for LNG carriers, whereas if the former is the case then we are still looking at very healthy time charter rates, which are around 90, plus thousand dollars per day. So.
Speaker Change: There is very.
Very low probability we would and there the.
Speaker Change: <unk> market with those ships, we won't have to.
Speaker Change: We will announce more.
Speaker Change: As the months progressed, we have time.
Speaker Change: Indeed, okay very good.
Speaker Change: For that that's helpful color I'll pass it over.
Speaker Change: Yeah.
Speaker Change: Thank you again, ladies and gentlemen, thank you for asking the question.
Speaker Change: So I'm going to tell from Keybanc.
Speaker Change: Operator, it looks like there are no additional questions.
Speaker Change: So I would like to thank everybody for joining today's call.
Jay: I'm sorry, Jay.
Jay: We do have one more question.
Speaker Change: Let me take your loan loans with value Investor's edge. Please proceed.
Speaker Change: Good afternoon. Thank you for taking my questions.
Speaker Change: Most of it has already been covered but I wanted to ask a question on the modeling type.
Speaker Change: The amount of fixed debt declined quarter over quarter.
Speaker Change: Is that attributable to the sale of the container ships and if so should we expect an additional decline in Q1.
Speaker Change: The vessels that we sold the 5000 Teu vessels that we sold they had no additional debt.
Speaker Change: So any decline in that that you've seen from our scheduled debt amortization.
Speaker Change: Makes sense.
Speaker Change: Secondly.
Speaker Change: Is there any potential for assays to refinancings going forward should you need additional liquidity for our upcoming opportunities.
Speaker Change: So what we are looking to do and this is and we are quite advanced and that is to have also.
Speaker Change: And then the ability to take pre delivery financing for certain of our new builds.
Of course.
Speaker Change: $150 million syndicated already plus the expected.
Proceeds from the sale of the fourth vessel starting from the fifth vessel. We are obviously quite a good place.
Speaker Change: <unk> of <unk>.
Speaker Change: Our liquid position, but having these pre delivery financing option.
Speaker Change: It could be an additional liquidity lever for.
Speaker Change: As you say potentially new opportunities.
Speaker Change: It could be quite significant by the way.
Speaker Change: Thanks for the color makes sense. That's all for me. Thank you for taking my questions.
Speaker Change: Of course, thank you.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, if you would like to ask a question. Please press.
Speaker Change: Star one on your telephone.
Speaker Change: You bet.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time.
Joe: I'd like to turn the call back to Joe.
Joe: Closing comments.
Joe: Again, thank you all for joining us today.
Joe: Okay.
Joe: This concludes today's conference you may disconnect your lines at this time.
Joe: Enjoy the rest of your day.
Joe: Okay.
Joe: [music].