Q4 2024 EuroDry Ltd Earnings Call
Speaker Change: [music].
Thank you for standing by ladies and gentlemen, welcome to the Euro dry limited.
Call on the fourth quarter 2024 financial results.
Aristides: We have us today, Mr. Aristides, <unk>, Chairman and Chief Executive Officer and.
Tsakos: Mr Tsakos, Stds, Chief financial Officer of the company.
Aristides: At this time all participants are in a listen only mode.
Aristides: There'll be a presentation followed by a question and answer session at which time if you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced.
Aristides: I must advise you that this conference call is being recorded today.
Speaker Change: Mind, you that the company announced its results with a press release that has been publicly distributed.
Aristides: Before passing the floor to Mr. Peters.
Aristides: I'd like to remind everyone that in todays presentation and conference call, you'll drive will be making forward looking statements.
Aristides: These statements are within the meaning of the federal Securities laws.
Aristides: Matters discussed may maybe forward looking statements, which are based on current management expectations kind of all risks and uncertainties that may result, in such expectations not being realized.
Aristides: I tried to draw your attention to slide number two of the webcast presentation, which has the full forward looking statement.
Aristides: And the same statement, which also included in the press release, please take a moment to go through the whole statement and read it.
Speaker Change: And now I would like to pass the floor over to Mr. Pretax. Please go ahead Sir.
Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call.
Speaker Change: Together with me is reached if that's assessed leave yourself Chief Financial Officer.
Speaker Change: The purpose of today's call is to discuss our financial results for the three and 12 months periods ended December 31st 2024.
Speaker Change: Please turn to slide three of the presentation.
Speaker Change: Our financial highlights as shown here.
Speaker Change: For the fourth quarter of 2024, we reported total net revenues of $14 $5 million and the net loss attributable to controlling shareholders of $3.3 million or one don't live and 20 cents loss per basic and diluted share.
Speaker Change: Adjusted net loss attributable to controlling shareholders for the captive was point $7 million or 25 cents per basic and diluted share.
Speaker Change: Adjusted EBITDA for the period was $4 8 million lives.
Speaker Change: The single biggest loss with the quota it was the 2.8 million paper loss, which we incurred by recognizing an impairment on one elder vessels, which we had purchased at a relatively high price.
Speaker Change: Please refer to the press release for the detailed reconciliation of adjusted net loss and adjusted EBITDA.
Speaker Change: Our CFO task, especially this will go over the financial highlights in more detail later on in the presentation.
Speaker Change: Since the initiation of our repurchase plan of up to $10 million announced in August 2022, and extended twice until August 2025 today, we have repurchased 334000 shares of our common stock in the open market for total.
Speaker Change: $5 $3 million in proceeds.
Speaker Change: We will continue to execute the share repurchase program at our current share price levels.
Speaker Change: During this call we successfully completed the refinancing of two of our vessels through it the 30 million dollar loan, which further increased our cash reserves by about $11 million.
Speaker Change: Please turn to slide four for our recent developments.
Speaker Change: November 2024, we signed the contract with Tangshan Zoo. She building for the construction of 263000 deadweight bulk carriers.
Speaker Change: Both vessels are geared at golf course, and the build to E. D. I phase III design standard.
Speaker Change: The two new buildings are scheduled to be delivered during the second and third quarters of 2027.
Speaker Change: The consideration for each vessel is about $36 million and will be financed by a combination of debt and equity.
Speaker Change: Additionally, we sold the motor vessel Tassos the eldest vessel in our fleet built in 2000 for demolition for approximately $5 million in cash.
Speaker Change: Motor vessel Tassos ease of 75000 deadweight panamax dry bulk vessel and is expected to be delivered foods buyers and then affiliated third party by early March 2025 upon completion of the present charter.
Speaker Change: The gain on the sale of the vessel is expected to be approximately two $1 million.
Speaker Change: On the chartering front the duration of the majority of our fixtures so the ranging between 20% to 65 days at closing to the minimum duration.
Speaker Change: Giving us flexibility for future employment.
Speaker Change: You can see the specifics of the various items in the accompanying presentation.
Speaker Change: Throughout the quarter, there were no scheduled dry dockings or repairs.
Speaker Change: Allowing us to maintain full operational efficiency.
Speaker Change: While we experienced no commercial off hire during the quarter.
Motor vessel less lag had a seven day committed commercial off hire in January 2025.
Speaker Change: Please turn to slide five.
Speaker Change: Judy raised fleet currently consists of 13 vessels, including five panamax dry bulk ideas five ultra Max two comes to the mix and the supermarkets dry bulk carrier.
Speaker Change: Our 13 dry bulk carriers have been cut.
Speaker Change: Turning to the capacity of the books with 920000 deadweight tons.
Speaker Change: After the sale of motor vessel passes which is expected by early March 2025 unit tries fleet will consist of 12 vessels.
Speaker Change: Nothing not including the doses the average age will drop to 13 six years from floating in the half years currently.
Speaker Change: As a reminder, euro dry owns 61% of the entities that own water vessels.
Maria: And Maria.
Maria: Remaining 39% is owned by owners, who presented by MLP project Finance.
Maria: It was referred to as the MLP investors.
Maria: The delivery of the $2 63, and a half thousand.
Maria: Those deadweight new buildings would you say to take place in the second and third quarters of 2027, the company's fleet will increase to float in dry bulk vessels and with the cargo capacity carrying capacity of just under.
Maria: The 1 million deadweight.
Maria: Please turn to slide six for the further update on our fleet employment.
Maria: Fixed rate coverage for 2025 was approximately 18% through existing centers.
Maria: This percentage excludes ships on index charters, which are open to market fluctuations, but have secured employment.
Maria: Our vessels are chartered under short term charters until rates rise enough for a longer time.
Maria: To be deemed beneficial.
Maria: Turning to slide eight we go up with the market highlights for the fourth quarter ended December 31st 2020 full up until recently.
Maria: In Q4, 2024, panamax vessels experienced the decline in both one year time charter and spot rates.
Maria: The average one year time charter rate for Panamax vessels soon stood at $12700 per day for the quarter dropping to 11250 per day by the end of December.
Maria: Similarly, the average one year spot rates for Panamaxes during the quarter was $9250 per day with a decline to about $7700 per day in the last day of Q4.
Maria: Both of the Baltic Panamax index, and the Baltic dry index, so sub contractions during the period dropping by 30% and 28% respectively.
Maria: However from year end 2024 to February 21, 2025, one year time charter rates for Panamax vessels have rebounded by 12% and similarly spot rates have increased by 14% in the same time period.
Maria: On the Super Max size, we saw less violent drops in Q1.
Maria: Currently spot rates at about one $2000 per day higher than Panamaxes.
Maria: But one year charters at about $500 less than the corresponding panamax rates.
Maria: Please turn to slide nine.
Maria: The Imf's latest updates from January 2025 projects stable against somewhat underwhelming global economic forecast showing only a slight improvement to three 3% of GDP growth from three 2% predicted in October 24.
Maria: Three 3% GDP growth is also the estimate for 2026.
Maria: Why is the U S Casino Napa Division with growth now forecast to grow two 7% in 2025. This stands in Stark contrast to other advanced economies, particularly in Europe.
Maria: Have seen either of downgrades or stable growth outlooks at around 1% only.
Maria: Adding to this uncertainty the new U S administration rapid policy changes and the reversal, particularly concerning trade policies and geopolitical conflicts collectively pose risks to the medium term growth prospects.
Maria: Local inflation is still expected to decline however, the near term trajectory to price stability.
We'll be challenged with persistent surfaces and wages inflation.
Maria: In several parts of the world leading to the synchronized monetary policy responses.
Maria: The risks to the global inflation outlook will be tilted to the upside given the prospects of increased protectionism geopolitical tensions.
Maria: And demographic constraints.
Maria: Emerging markets continued to drive global growth led by India vision five countries China.
Maria: So he knows growth appears to be slightly revised upwards, but in the lopsided fashion with projections of four 6% this year and for the 5% next year as the country continues to fade debit domestic demand persistent deflationary pressures and falling property markets.
Maria: India is projected to maintain steady economic growth of six 5% in both 2025 and 2026 driven by strong investment activity robust agricultural performance and continued expansion of the services sector, which remains a key engine of economic growth.
Maria: Southeast Asian countries are also positioned for solid growth benefiting from a regional demand and investment movement.
Maria: In parallel to global GDP issues.
Maria: <unk> forecasts indicate a more challenging period ahead for the dry bulk trade with demand growth sharply decelerating from 5% in 2024 to just 049 percent in 2025.
Maria: Followed by stagnant trade levels in 2026.
Maria: While supply constraints and environmental regulations may offer some great support.
Maria: Political risks in the Red Sea persist and despite the guys. A ceasefire is swift return to normal shipping operations maintenance like.
Maria: In light of these projections, we remain cautious about the outlook for the dry bulk sector, given key micro economic risks and the evolving geopolitical tensions which could impact medium growth post spin.
Maria: Please turn to slide 10, where we review the current state of the overdue book in the Drybulk sector.
Maria: As you can see as of February 25. The order book is currently at just 10.5% of the fleet still standing among the lowest historical levels.
Okay.
Turning to slide 11, let us look into the supply fundamentals in a bit more detail.
Maria: As of February 2025, the total dry bulk vessel operating fleet was 14150 vessels.
Maria: According to Clarksons latest report new deliveries as a percentage of total fleet at.
Maria: Expected to be three 7% in 2025 to be in the 5% in 2026 and 3% in 2027 onwards.
Maria: The actual fleet growth is of course expected to be lower than the aforementioned figures due to scrapping and slippage.
Maria: If the 10% of the fleet that is older than 20 years, we worked to be scrapped within the next three years. We would then up with a fleet that has zero growth.
Maria: Factors such as increased flows leeming hot slow steaming highest scrapping of AIDS and the tightening a bit.
Maria: Mental regulations could further constrain the available bulk of fleet.
Maria: Of course, the reopening of sways.
Maria: In the opposite direction.
Maria: Please turn to slide 12, where we summarize our outlook for the dry bulk market.
Maria: As already said in 2024, the bulk carrier charter market experienced mixed results with the Capesize segment experiencing games, while smaller vessel categories, such as <unk>. When it comes to the next phase significant declines.
Maria: The reopening of the Panama Canal.
Maria: Using a post congestion placed additional pressure on the dry bulk market contributed to contributing to a decline in freight rates some of which reached multi year lows.
Maria: The fourth quarter underperformed expectations with average charter rates for ultra <unk> and comes from like vessels falling by 25% year over year, reflecting the broader market weakness.
Maria: Looking ahead, the 2025 bulk carrier demand outlook suggests the softer market compared to 24.
Maria: The key factor in China, slowing dry bulk imports, which are not expected to match the robust growth seen in 2000.
Maria: Q3, and 'twenty four.
Maria: Sure.
While there is recent government stimulus measures have supported sentiment.
Maria: Unlikely to feed to substantial structural improvements in demand, especially given the persistently high stockpiles.
Maria: Additionally, the U S trade policy is emerging as a critical factor for the dry bulk sector under the new Trump administration.
Maria: <unk>, China, Mexico, and Canada could this could disrupt grain and minor bulk trade, particularly if escalating trade tensions lead to the value of it.
Maria: <unk> measures.
Maria: My initial reaction to the measures announced yesterday regarding Chinese vessel penalties and extra fees on calling the U S.
Maria: They will not pass as they remain and perhaps the only consequence will meet to make products imported to the U S more expensive to the U S consumer.
Maria: Meanwhile, however, geopolitical risks in the Red Sea remain unresolved despite.
Maria: Despite the Gaza ceasefire shipping in the region is unlikely to return to normalcy in the near term and any easing of Ritchie disruptions could further constrained dry bulk demand growth, adding to the challenges facing the market.
Maria: However on the supply side. The vessel ordering has remained relatively limited primarily due to shipyard capacity constraints and uncertainty surrounding the fuel of the future.
Maria: A growing number of methanol in LNG fuel.
Maria: The order book to fleet ratio remains at historically low levels, which could create the backdrop for potential charter rate recovery if demand strengthens.
Maria: However trends differ across vessel classes, while panamax and welcome back. So the books are returned historical medium levels with the Capesize fleet remained near historical lows, but it's comparatively younger meaningfully renewal pressures may be less than immediate.
Maria: Furthermore, the new environmental regulations, excluding <unk>.
Maria: I E you Etfs and purely U.
Maria: <unk> two further constrained vessel supply through increased scrapping has slowed operations speeds.
Maria: These regulatory measures could help mitigate excess fleet capacity supporting the market <unk> seen effective tonnage availability.
Maria: Let's turn to slide 15.
Maria: As of February 21, 2025, the one year time charter rate for Panamax ships with the capacity of 75000 deadweight tons is at $12625 per day.
Maria: Actually have higher than a week ago, but below the historical median of $13560 per day.
Maria: Meanwhile, the market for 10 year old Panamax bulk carriers remains relatively strong with current prices at 24, and a half million dollars well above the historical medium of $14 $8 million and the average of $17 4 million Douglas.
Maria: However, as of the fourth quarter of <unk>.
Maria: Before asset values have experienced a notable decline for the mid 2020 for peak of $29 $5 million, reflecting broker broader market.
Maria: We are closely monitoring the developments.
Maria: The market's dropped further and consequently vessel prices also drove we will be able to acquire one or two more vessels.
Maria: The chart the market improves.
Maria: Current fluid fleet will become profitable again.
Speaker Change: And with that let me pass the floor over to our CFO <unk> <unk> to go over financial highlights in more detail.
Speaker Change: Thank you very much and good morning from me as well, ladies and gentlemen.
Speaker Change: Over the next four slides.
Speaker Change: We'll give you an overview of our financial highlights for.
Speaker Change: For the fourth quarter and full year of 2024 and compared to the same periods of last year.
Speaker Change: Let's turn to slide 15.
Speaker Change: For the fourth quarter of 'twenty 'twenty four we reported total net revenues.
Speaker Change: And the $5 million representing.
Speaker Change: Eight 7% decrease over total net revenues of $15 9 million during the fourth quarter of last year.
And this was the result of the lower time charter rates our vessels earned.
The fourth quarter of this year as compared to their lives.
Speaker Change: Is there another financing costs for the fourth quarter of 2003, and four including interest income.
Speaker Change: It's about $1 9 million the same level.
Speaker Change: Same period of 2023.
Speaker Change: Adjusted EBITDA for the fourth quarter of 2024 was $4 8 million compared to $6 6 million achieved during the fourth quarter of last year.
Speaker Change: Basic and diluted loss per share.
Speaker Change: Attributable to controlling shareholders for the fourth quarter of 2024 was $1, 20% calculated on about $2 7 million.
Speaker Change: Basic and diluted weighted average number of shares outstanding.
Speaker Change: Compared to earnings of 13.
Speaker Change: Sure.
Speaker Change: But to controlling shareholders calculated on approximately $2 7 million.
Speaker Change: Basic and $2 8 million diluted weighted average number of shares outstanding in the fourth quarter of last year.
Speaker Change: Excluding the effect on the loss attributable to the controlling shareholders for the quarter.
Speaker Change: Of the unrealized gain on derivatives and the permanent vessel.
Speaker Change: The adjusted loss per share for the quarter ended December 31st 2024.
Speaker Change: You have been 25.
Speaker Change: Basic and diluted.
Speaker Change: Compared to adjusted earnings.
Speaker Change: In the fourth quarter of 2020 fee of <unk>.
Speaker Change: $71 and $70 per share basic and diluted.
Speaker Change: Let's now look at the numbers for her corresponding full years 'twenty 'twenty four and 'twenty three.
Speaker Change: For the full year of 2024.
Speaker Change: Company reported total net revenues of $61 1 million.
Speaker Change: Representing a 28, 3% increase over total net revenues of 46 points four to $7 6 million during the 12 months of 2023.
Speaker Change: That was the result of the increased number of vessels operated during class transport and the slightly higher time charter rates earned by our vessels on average in 2024 compared to.
Speaker Change: For 2020.
Speaker Change: Interest and other financing cost again, including interest income for the 12 months of 'twenty 'twenty four amounted to $7 9 million compared to $5 6 million for the same period of 2023.
Speaker Change: Interest income was about $49 million in 2023 versus $4 1 million for.
Speaker Change: Interest expense for the period.
Speaker Change: Here was higher due to the increased amount of debt you are.
Speaker Change: During the year as compared to the previous slide.
Adjusted EBITDA for the 12 months of 2024 was $12 4 million compared to $14 6 million during 2023.
Speaker Change: Basic and diluted loss per share attributable to controlling shareholders for <unk>.
Speaker Change: <unk> 24 was $3 and 54% calculated on about $2 7 million.
Speaker Change: Basic and diluted weighted average number of shares outstanding comp.
Speaker Change: Compared to basic and diluted loss per share.
Speaker Change: They're able to control shareholders for 2020 fee of 151.0 $5.
Speaker Change: Calculated too.
Speaker Change: When about $2 8 million basic and diluted.
Speaker Change: Weighted average number of shares.
Speaker Change: For the previous year.
Speaker Change: Again, excluding the effect on the net loss.
Speaker Change: The vote to controlling shareholders for the year.
Speaker Change: Realized.
Speaker Change: <unk> and derivatives.
Speaker Change: And the Paramount lost on the vessel.
Speaker Change: The adjusted loss for the year 2024 would have been $3 from two cents.
Speaker Change: Basic and diluted compared to adjusted earnings per share of about 12 cents basic and diluted for the same period of 2000 transitory.
Speaker Change: Let's now move to slide 16 to review our fleet performance.
Speaker Change: As usual, we'll start we'll start our review by looking at utilization effective utilization rates for the fourth quarter and full year for <unk> 'twenty 'twenty four 'twenty to 'twenty three.
Speaker Change: Let's first look at <unk>.
Speaker Change: <unk> hundred 20 for fourth quarter.
Speaker Change: Our commercial utilization rate during the quarter was the front of a percent while our parents kind of utilization rate was 99, 4%.
Speaker Change: Compared to a 500% comercio.
Speaker Change: 99, 5% operational for the same period of time.
Speaker Change: On average.
Speaker Change: In vessels were owned and operated during the fourth quarter of 'twenty 'twenty four and.
Speaker Change: And now there is time charter equivalent rate.
Speaker Change: $12200 per vessel per day compared to $12 two vessels in the same period, the fourth quarter of transparency and you can never time charter equivalent rate of $14570 per day.
Speaker Change: Our total operating expenses, including management fees.
Speaker Change: General and administrative expenses, but excluding drydocking costs were several thousand.
Speaker Change: $87 per vessel per day during the fourth quarter of 2024 compared to $7640 per vessel per day during the fourth quarter of last year.
Speaker Change: 2023.
Speaker Change: If we move further down on this table, we can see the cash flow breakeven rate.
Speaker Change: <unk> takes wholesale to a problem.
Speaker Change: <unk> expenses interest expenses and loan repayments.
Speaker Change: Boston pasta.
Speaker Change: The fourth quarter of 2010 for our daily cash flow breakeven rate was 11000.
Speaker Change: $529 per vessel per day.
Speaker Change: As compared to $12263 per vessel per day for the same period of 2023.
Speaker Change: Let's now look at the right part.
Speaker Change: Of the table.
Speaker Change: Do you view the same figures for the full year.
Speaker Change: During the full year of 2010 before our commercial utilization rate was 99, 9% our fashion utilization rate 98, 9% compared to $99 for Comercio and $98 five professionals in 2023.
Speaker Change: On average.
Speaker Change: We own and operate the 13 vessels.
Speaker Change: During 2024.
Speaker Change: And average time charter rate of about 13000.
Speaker Change: $39 per vessel per day compared to $10 six vessels for the whole of 2020.
Speaker Change: Yeah.
Speaker Change: <unk> thousand $5028 per vessel per day.
Speaker Change: Our total operating expenses for the year.
Speaker Change: Including management fees.
Speaker Change: G&A expenses.
Speaker Change: Yeah, but excluding <unk> cost average $6097 per vessel.
Speaker Change: Good day and campaigns.
Speaker Change: Compared to $7131 per vessel per day in 2023.
Speaker Change: Again at the bottom of this table, we can see the cash flow cash flow breakeven rate for the entire year, which were closed for a month.
Speaker Change: $221 per vessel per day compared to 13000.
Speaker Change: And fourth a $1 Portland, Kansas City.
Speaker Change: The increase being primarily due to the higher drydocking expenses, we incur in 2024 compared to the year before.
Speaker Change: Let's now turn to slide 17 to review our debt profile.
Speaker Change: As of December 31st 2024.
Speaker Change: Our outstanding debt stood at about an $8 million.
Speaker Change: Total repayments for 2025.
Speaker Change: 2026.
Speaker Change: 11, or $12 1 million and $11 3 million respectively.
Speaker Change: We have a small balloon payments due in 2026 2 million in the BK balloon payment due in 2027.
Speaker Change: About $10 million with an additional approximately 10 million of repayments.
Speaker Change: To be made in 2020.
Speaker Change: An important point to highlight in this slide.
Speaker Change: Its margin or foreign debt.
Speaker Change: As of December 31st 2021 to two.
Speaker Change: 2.08% oversaw.
Speaker Change: Assuming a software three months off rate of four <unk>.
Speaker Change: Yeah Yeah.
Speaker Change: 31%.
Speaker Change: Making the cost of our senior debt is approximately six point, 39%.
Speaker Change: It's actually lower because of the swap side.
Speaker Change: Some of our debt for a lower rate so our effective.
Speaker Change: The effective cost of our senior debt is about six 3%.
Speaker Change: At the bottom of the slide we can see our projected cash flow breakeven level for the next 12 months.
Speaker Change: Turning to 2025 broken down into its various components.
Speaker Change: Overall, we expect to have lower cash flow breakeven level in 2025 of around $11600 per vessel per day.
Speaker Change: While our EBITDA breakeven level is about seven 7596.
Speaker Change: $6 per vessel per day.
Speaker Change: We're almost done a lot for them to be done, let's move to slide 18.
Where we can see as usual some highlights from our borrowers.
Speaker Change: This slide offers a snapshot of our assets and liabilities.
Speaker Change: Well not rocket science first our balance sheet is very savvy includes the book value for our investors.
Speaker Change: As of the end of 2020 before amounted to about.
Speaker Change: 85.
Speaker Change: Five years ago.
Speaker Change: We had also.
Speaker Change: Advancements made four hours instead of $7 2 million and also.
Speaker Change: And some of our assets.
Of about 29 2 million.
Speaker Change: That if you can talk about.
Speaker Change: Book value.
Speaker Change: Value of assets of about 222 million.
Speaker Change: On the liability side as I mentioned earlier our debt.
Speaker Change: Two.
Speaker Change: Nate.
Speaker Change: Media, representing about 49% of total book value of our assets and we had other.
Speaker Change: Liabilities in minority interest.
Speaker Change: Route.
Speaker Change: $4 5 million in other liabilities in the box.
Speaker Change: Almost $90 million of minority interest in the center of our partners in those two vessels.
Speaker Change: Is that the thinking.
Speaker Change: The book value of shareholder equity.
Speaker Change: Above 500 million or $75 $5 per se.
Speaker Change: Our estimated market value of our vessels.
Speaker Change: As soon as the end of last year was 202 million approximately 20% higher.
Speaker Change: With respect to book value.
Speaker Change: Testing.
Speaker Change: And then the deeper sands Nexus for $45.
Speaker Change: Even with our share case lately between 10 and $11.
Speaker Change: I appreciate the.
Speaker Change: Our potential for appreciation.
Speaker Change: So, yes shoot market conditions or other factors.
Speaker Change: Lead to a reduction of this discounting.
Speaker Change: And with that I'd like to pass the floor back to our speakers to continue the call.
Speaker Change: Thank you Tassos.
Speaker Change: Let me open up the floor for any questions you may have.
Speaker Change: Thank you, we'll now be conducting a question answer session.
Speaker Change: Like to be placed in the question queue. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue you.
Speaker Change: You May press star two if he'd like to move your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one one moment. Please while we poll for questions.
Tate Sullivan: First question today is coming from Tate Sullivan from Maxim Group. Your line is now live.
Speaker Change: Thank you.
Speaker Change: My first question. Please on for the for Q impairment of $2 8 million was that related to <unk>.
Speaker Change: Current quarter.
Speaker Change: No it's actually growing faster as we recorded the capital gain on when we will report a gain on sale.
Speaker Change: You mentioned, a number around 2 million.
Speaker Change: As that goes on another vessel Santa Cruz.
Speaker Change: The last one that we bought we bought one of the last time that we bought.
Speaker Change: That was bought on their high end points in the cycle and are testing indicated we should say your environment.
Speaker Change: Okay.
Speaker Change: Thank you and then can you talk about the Newbuild negotiations.
Speaker Change: With any of your organizations have you worked with the specific shipyard before and did their newbuild price decrease in the last couple of months or how does the price negotiations work.
Speaker Change: Well.
Speaker Change: We haven't built anything at that shipyard days in the past, but we did a lot of research and talked to a lot of ship jobs.
Speaker Change: Before we finally concluded with these guys we got a.
Speaker Change: A lot of information from other owners that we know.
Speaker Change: That have also all the chipset those shipyard, it's maybe the last few years and have had a good cooperation.
Speaker Change: Seeing quality results. So this obviously pay played a major impacting us selecting that shipyard.
Speaker Change: Having said that.
Speaker Change: Okay.
Speaker Change: Dr negotiation as always on price in the <unk>.
Speaker Change: On the.
Speaker Change: The equipment that will be put on board.
Speaker Change: And all that stuff.
I feel we got a good price.
Speaker Change: Today prices, maybe slightly softening.
Speaker Change: But not with the deliveries in 2027, we're talking about deliveries in 2028. These days, mostly so I think prices are.
Speaker Change: Probably around the same levels that we secured.
Speaker Change: Okay upfront later delivery, Okay, and then the specs on the Newbuild you mentioned, so eco I imagine that describe it means with scrubbers.
Speaker Change: Did you consider no equal equal equal does not mean, we describe those.
Speaker Change: It does not mean, we described it means the most modern electronic engine practically.
Speaker Change: And the lower consumption that these ships have a relevant to even to the prairie view sequel vessels. So that the vessels are very economic in the fuel consumption.
Speaker Change: And then did it.
Speaker Change: Does that shipyard or did you consider shipyards with dual LNG.
Speaker Change: Or is that not realistic for drybulk rate no. No. We did we did look at that and we did consider that and it is quite more expensive to provide for LNG, especially the LNG tanks that are needed.
Speaker Change: And we don't think that our LNG will be a long term solution.
Speaker Change: We want to have the most modern up to date and economic sips.
Speaker Change: With today's technology.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thanks.
Speaker Change: Thank you as a reminder, that star one to be placed in the question queue.
Speaker Change: Our next question is coming from Mark Reichman from Noble capital markets. Your line is now live.
Speaker Change: On page eight of your presentation.
Speaker Change: You can see the difference between the spot and the one year Tc rates. So at what point would you begin locking in one year charters.
Speaker Change: And what might you expect the average to be for the last three quarters of the year.
Speaker Change: Very difficult to make projections about what the average will be for the next three quarters of the year extremely difficult they will not have as good.
Speaker Change: However.
Speaker Change: Tassos showed that our breakeven levels are around $11000 per day.
Speaker Change: If we go up to that I'm, sorry that this for the more modern ships of a 15 $16000 a day, we might consider it for one or two about the seats.
Speaker Change: No.
Speaker Change: Otherwise, we will probably continue to play the spot market the spot market is improving the traditional lull over the first two months.
Speaker Change: You know we've experienced it and we are hoping that we will see a further improvement in the rates within the next two or three months.
Speaker Change: So it sounds like Youre pretty confident this at the spot rates are going to continue their trajectory that theres not theres more upside than there is downside in other words you don't you perceive you think it's still beneficial to keep the keep those positions open with the hope that the rates keep going up versus ending up with lower in Lawrence.
Speaker Change: Spot rates.
Great Hey, good eggs downside.
Speaker Change: There is downside risk, obviously, but it is not huge but upside you never know how high it's going to go so you know balancing risk the risk reward.
Speaker Change: Sure.
Speaker Change: We are keeping all the ammunition.
Speaker Change: Municipal live right now and waiting to see how the market develops within the next three months.
Speaker Change: Okay and then the second question is really for <unk> looking at page 17, and your breakeven, but I was just wondering if you might just elaborate a little bit on the vessel expense expectations for 2025 relative to 2024, given that youll have lower fewer dry dock days and also you've got the sale of the M D.
Speaker Change: <unk>.
I think the chart I put on slide 17 reflects.
Speaker Change: The removal of the <unk>.
Speaker Change: St. Louis pastures.
Speaker Change: The scheduled dry dockings.
Speaker Change: On the Opex side.
Speaker Change: Yeah, we haven't finalized our budgets for 2025, but I said preliminary budget.
Speaker Change: We're using a 3% increase over the budget of last year.
Speaker Change: I think we.
Speaker Change: <unk>.
Speaker Change: The year ended that's below last year's budget for the operating expenses.
Speaker Change: And we're budgeting conservatively, 3% over last year's budget.
Speaker Change:
Speaker Change: I think all the days of the virus components as shown on the bottom part of slide 17.
Speaker Change: Okay and then the last question is just I know, it's a ways away.
Speaker Change: Vessels that will be delivered in 2027, just how do you kind of think about financing that I mean, I know you've talked about debt and equity will be weighted towards debt or the equity portion will that be.
Speaker Change: Cash generated internally or just how are you kind of thinking about that currently.
Speaker Change: That would definitely be we'll have a good part of it financed with debt.
Speaker Change: I think judging from our previous financings at.
Speaker Change: 55% to 60% of that.
Speaker Change: Yeah. It was financed by debt, we might try to an even higher percentage in this case.
The equity portion and we have obviously paid the first installment of 10% and would you have to make another three oh shucks installments before the delivery of the vessel for another 22 million that we would need to pay to the yard in 'twenty to 'twenty six 'twenty 27 before the vessels.
Speaker Change: Great.
Speaker Change: So we haven't really.
Speaker Change: And our lives our plans how to finance that or we can hopefully will generate that organically, but at the present market it would be tough, but hopefully the market will improve.
Speaker Change: Save that we can look for alternative ways to finance the equity portion.
Speaker Change: That's great. Thank you very much.
Mark Reichman: Thank you Mark thanks for the interest.
Speaker Change: Thank you as a reminder, its star one to be placed in the question queue.
Speaker Change: Our next question is coming from Paul <unk> from Alliance Global Partners. Your line is that loss.
Paul: Hi, Hello, Hello.
Speaker Change: Hello.
Speaker Change: Alright.
Speaker Change: Can you just go over the Newbuild payments it sounds like you're not going to happen in newbuild payments in 2025.
Speaker Change: You quantified how much of the Newbuild cost.
Speaker Change: We'll land in 'twenty 2026, and then 2027.
Speaker Change: I think in 2026, we will have to pay $14 4 million two times, 10% per vessel.
Speaker Change: And then another 10% that is another $7 2 million.
Speaker Change: In 2007 pre delivery payments and then finally the final 60% my guess it will be paid when they deliver the vessels.
Speaker Change: As mentioned the second in the first quarter of 2027.
Speaker Change: Great. That's really helpful. And then just to clarify it doesn't makes sense to put scrubbers on new builds at this point in time correct.
Speaker Change: This is not something which is subtle but so some owners are food thing on scrubbers, all the smaller vessels.
Speaker Change: Some are not.
Speaker Change: Whilst I think that the verdict is out there for the very big vessels that have high consumption that you should put the scrub at all for what is it that makes our vessels that consume so little I'm not sure that it is worth it I also have some.
Speaker Change: Patients against the whole concept of scrubbers and how much they are and if at all they are polluting the sea but.
Speaker Change: Uh huh.
Speaker Change: No we're not splitting the mall.
Speaker Change: It all depends of course on how the price differential between the February fewer Lloyd and the low sulfur fuel oil develops but right now it is quite low. So there is no huge advantage of having a scrubber it might become even lower so so then there is definitely no one's about in terms of having a scrubber.
Speaker Change: Its might pick up again.
Speaker Change: You know you might recover the investment of this club in a small period of time.
Speaker Change: So different kinds of investors.
Speaker Change: Understood and then.
Speaker Change: Everything is I think you mentioned that you know if asset values so often.
Speaker Change: Are you potentially might look at making acquisitions.
Speaker Change: How much.
Speaker Change: How can you give us an idea of sort of the.
Speaker Change: Alright.
Speaker Change: Activity in the S&P market are you seeing a lot more potential transactions or asset values close to where you might pull the trigger on acquisitions can you just give us a flavor for.
Speaker Change: Your your current.
Speaker Change: Your current assessment of the S&P market.
Speaker Change: Like I I can tell you that our prices have been dropping ever since.
Speaker Change: October November last year.
Speaker Change: The beginning of February.
Speaker Change: They've they've had corrected I would say on the 10.
Speaker Change: 10 years old ships that we traditionally are looking at they had dropped by about 15%. We thought that if they were to drop by about 30% from those highs.
Speaker Change: They could become an interesting proposition.
Speaker Change: A couple of deals were done last two weeks in fact, we bid on one of those ships.
Speaker Change: But the prices rather than continuing that are softening.
Speaker Change: With elevated for these vessels so they those a little bit again and now we've been short the market improving.
Speaker Change: I don't think that we will see you.
Speaker Change: You know imminently lower prices so we.
Speaker Change: We would like to see prices drop by another 15%.
Speaker Change: Two to consider.
Speaker Change: Buying something I think I couldnt have been more clear.
Speaker Change: That's great.
Speaker Change: Sorry.
Speaker Change: I think we're always on the look for interesting.
Speaker Change: Faxes.
Speaker Change: We keep it my group keeps each busy evaluating do you have sort of a time, although they don't pass the first one yes.
Speaker Change: And then how.
Speaker Change: How current is that anybody that you talked about the mid Forty's is does that fully incorporates a 15% drop in asset values or.
Speaker Change: Is that 15% sort of a lagging or I'm, sorry is that $45 sort of a lagging.
Speaker Change: Is there a lag between which you see that the softness hit that.
Speaker Change: Yeah.
Speaker Change: He's already.
Speaker Change: I recall on the top of my head the previews and September valuation was around 250.
Speaker Change: If I'm not mistaken medium.
Speaker Change: <unk> by the year end the market kept dropped by essentially 15%.
Speaker Change: And maybe by the middle of January.
Speaker Change: <unk> January.
Speaker Change: He might have dropped a little bit more but it sounds like.
Speaker Change: It rebounded a bit here more recently.
Speaker Change: I mean, it's.
Speaker Change: So in the ballpark.
Speaker Change: It is to be more arthritis towards the end of the year. The number I quoted to you in the presentation, but.
Speaker Change: Where do you calculated pro form of today's run visors, which would be not far from it.
Speaker Change: Okay.
Speaker Change: I know you're.
Speaker Change: You're hesitant.
Speaker Change: Put out your crystal ball on what the rest of the year, It's gonna look like from a TCE standpoint, but can you.
Speaker Change: Many other companies talk about what they booked in the quarter so part.
Speaker Change: Percentage, that's already booked for the quarter at a rate that's associated with those bookings.
Speaker Change: You have it.
Speaker Change: Similar.
Speaker Change: Metric available towards where do we stand at this point in the quarter as far as the first quarter.
Speaker Change: Yes.
Speaker Change: I think that's what's going to tell you after the call or when we are based on the existing side of that is because now we were at the end of February. So obviously I would think 80% of what we're going to make is already booked.
Speaker Change: So so there is we have an idea about it but I don't have it offhand.
Speaker Change: You can get a flavor of the charters were concluded.
Speaker Change: Currently the really cover.
Speaker Change: The quarter to date.
Speaker Change: Yeah.
Speaker Change: Yes, I think on average I can one one partner have eyeball them to be below $10000.
Speaker Change: <unk>.
Speaker Change: Okay, that's great, but improving firming up until the second quarter potentially would be.
Speaker Change: Look a little bit better than the first quarter.
Speaker Change: March was even better they are vessels that would be the contract rollover in March we'd be better and Oh.
Speaker Change: I would dare to say, most certainly Q2 will be an even better because it's also a seasonally better quarter.
Speaker Change: But also already I mean, the the last fixture than we did I think was the youngest speed test, which was fixed for $12000, which is higher than you know the leverage we were seeing.
Speaker Change: Even one month ago.
Speaker Change: Great really helpful. Thank you.
Speaker Change: Thanks, guys. Thanks, Paul.
Speaker Change: Thank you we've reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.
Thank you all for listening.
Speaker Change: And today, we'll be back to you at the beginning of a what is it.
Speaker Change: Middle of May middle of May.
Speaker Change: Yes.
Speaker Change: With the Q1 results and hopefully will be better because the market couches.
Speaker Change: Yeah.
Sean: Thanks, Sean again.
Speaker Change: Thank you that concludes today's teleconference. You may disconnect. Your line at this time and have a wonderful day.
Sean: You for your participation today.