Q4 2024 Seanergy Maritime Holdings Corp Earnings Call
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Stamatios Tsantanis, Stavros Gyftakis
Speaker Change: It doesn't have an automated message advising that Johan this raised please be advised that this conference call is being recorded today Thursday March to say 20 to 25, the archived webcast of the conference call will soon be made available on the synergy website www dot synergy maritime dot com to access.
Speaker Change: Today's presentation and listen to the archived audio fall is it the synergy website following the webcast and presentation section under the Investor Relations page.
Speaker Change: Please now turn to slide two of the presentation. Many of our remarks today contain forward looking statements based on current expectations actual results may differ materially from the results protected from those forward looking statements.
Speaker Change: Information concerning factors that could cause the actual results to differ materially from those in the forward looking statements is contained in the fourth quarter and year ended December 31st tangible earnings release, which is available on the synergy website again, www dot synergy maritime Dot Com I would now.
Speaker Change: Let's turn the conference over to one of your speakers today, the chairman and CEO of the company. Mr. Stomata Santander. Please go ahead Sir.
Stomata Santander: Thank you operator and welcome everyone.
Stomata Santander: Today, we're pleased to present, our financial results for the fourth quarter and full year 2024, along with key corporate updates.
Stomata Santander: I will discuss our record profitability strategic fleet expansion and capital return initiatives.
Stomata Santander: Well as our outlook on the Capesize market and the factors positioning synergy for the long term success. We're pleased to report another strong and profitable quarter, marking our fourth consecutive year of profitability.
Stomata Santander: Synergies consistent financial performance underscores the strength of our Capesize focused strategy.
Stomata Santander: Our effective hedging approach once again allowed us to outperform the Baltic Capesize index, PCI and our diversified dry bulk peers, many of whom remain exposed to weaker performance of smaller vessel classes.
Stomata Santander: 2024 was a record year for synergy with net income, reaching $43 5 million compared to just $2 3 million in 2023. It is important to note that our Q4 and full year results include the one off legal expenses related to our AGM in litigation, which had a temporary impact to our bottom.
Speaker Change: Leigh sovereigns, who will provide further details on this later in the call our strategic focus remains on balancing capital returns fleet growth and financial discipline, ensuring maximum shareholder value as we continue to operate in a fundamentally strong capesize market, reflecting our solid Q4 performance.
Speaker Change: We have declared a cash quarterly dividend of <unk> 10 per share, bringing our total 2020 for dividends to 76 cents per share or $15 $6 million in total distributions. Additionally, we repurchased 226000 shares at an average price of $9 $44 during Q4, but enforcing our.
Speaker Change: It meant to shareholder value.
Speaker Change: As part of our capital allocation strategy, we continuously assess the balance between dividends and buybacks and given the recent pressure on dry bulk equities, we acted decisively to maximize value for our shareholders on the fleet expansion front. We recently took delivery of two high quality Japanese built vessels that may ship and the blue chip.
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Speaker Change: With these additions our total fleet has grown to 21 vessels, representing a carrying capacity of three 8 million deadweight tons pure play Cape size of new customer boxes in 2024, and early 2025, we have invested $138 million in force premium vessels further.
Speaker Change: Strengthening our fleet cash flow generation potential given the positive kpis fundamentals, we firmly believe that acquiring high quality vessels at attractive valuations enhances our ability to deliver strong returns throughout the cycle since the beginning of 2024, and we have successfully completed a $174 million and final.
Speaker Change: Lansing salary financings reinforcing our ability to support fleet expansion, while maintaining financial flexibility establish who will provide additional insights into these transactions, but I would like to highlight that we ended the year with a fleet loan to value of 45%, while expanding our fleet and delivering significant capital returns to us.
Speaker Change: Shareholders.
Speaker Change: Capesize market remains well positioned to continue strength underpinned by robust demand for iron ore bauxite and cold with trade volumes, increasing in 2024 limited fleet expansion with met Capesize fleet growth at just one 7% in 2024 and projected declined further to one 4% in 2000.
Speaker Change: 25, 2024, and 2025 represents the lowest capesize delivery years since 2003, reinforcing a favorable supply demand balance. Despite short term volatility we expect the market set up for 2025 and beyond remain highly supportive during Q4.
Speaker Change: For 2024, we generated revenues of $41 7 million daily TC time charter equivalent rate of $23200 a day net income of $6 6 million.
Speaker Change: Slide three prioritizing shareholder returns.
Speaker Change: Turning to slide three our clear and disciplined capital return strategy continues to maximize value for shareholders through consistent dividends and strategic buybacks over the past three years, we have distributed more than $14 million in dividends equating to $2 $21 per share when including surgery.
Speaker Change: Purchases and convertible note buybacks, our total capital return amounted to $87 million.
Speaker Change: Representing approximately 60% of our current equity market capitalization. This reflects our strong commitment to shareholder value while at the same time, allowing us to strategically expand our fleet in a capital efficient manner.
Speaker Change: Relative to simultaneously grow the fleet and reward shareholders with significant capital returns underscores synergies financial strength and confidence in the Capesize markets long term fundamentals as the market remains strong in the years ahead, we remain committed to maintaining a balanced approach to growth and shareholder distributions.
Speaker Change: <unk> slide four commercial highlights and fleet updates moving to slide four synergy once again delivered industry, leading time charter equivalent performance in both Q4 and full year 2024, our Q4 daily TCE was $23100, while the full year Tc.
Speaker Change: $25100 per day outperforming the Baltic Capesize index by 27% and 11% respectively. This outperformance validates our strategic focus on the Capesize segment setting us apart from other diversified dry bulk peers remain exposed to smaller vessels.
Speaker Change: Classes with weaker returns even amid a weaker Q4 market, we maximize the earnings by strategically looking in FSA based fixed rates for a portion of our fleet days, ensuring greater revenue stability and enhanced profitability looking ahead to 2025, we have already seen.
22% of our operating days at an average gross rate exceeding $22100. A day for Q1 2025, we expect an indicative time charter equivalent of approximately $13400 per day, our focus remains on strategically fixing vessels at profitable rates and ensuring.
Speaker Change: Cash flow visibility and maximizing shareholder returns our fleet expansion continued in Q4 2024, reinforcing our position as a leading pure play capesize operator.
Speaker Change: <unk> 2010, before we took delivery of the 2012 built kaisership completing another year of targeted fleet expansion combined investment and I can ship delivery June 'twenty, 'twenty, four and CASM ship totaled $69 3 million, representing an excellent value relative to their estimated market prices. Both vessels are on index.
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Speaker Change: Linked charters with a premium over the PCI, providing strong cash flow visibility into 2025 and beyond in addition, we exercised a highly attractive purchase option for the 2011 built Newcastle Max that Titan ship at 20 $25 million at yearend 2020 for Titan ships Maher.
Speaker Change: Get value exceeded $35 million, highlighting our ability to secure high quality assets at compelling prices. The vessel operate on an index linked charter with a fixed floor and significant profit sharing upside ensuring strong earnings potential recent additions to our fleet two additional Japanese built vessels acquired since.
Speaker Change: Last quarterly update.
Speaker Change: And we May ship in 2013, built Newcastle MX and the <unk> Blue ship in 2011 built Capesize total investment of $69 million further expanding our high quality efficient fleet. The blue chip is expected to enter an index linked time charter while they may ship will operate under a structured.
Speaker Change: Fixed floor time charter with profit sharing similar to the pattern ships charter with three 8 million deadweight tons of pure play 21, Cape sizes, and new customer Maxes now in operation synergy has achieved significant flipped scale, but we remain committed to disciplined growth we continue to evaluate.
Speaker Change: <unk> strategic fleet opportunities, leveraging our deep industry relationships and access to high quality assets to enhance shareholder value.
Speaker Change: I will now pass the call to establish who will fill you in on our financial information for the quarter and the full year as well as discussing our balance sheet and debt refinancings Stavros. Please go ahead.
Speaker Change: Somatic and welcome to everyone joining us for todays earnings call, let's begin with slide five we will review the key highlights of our financial performance for the fourth quarter and the full year ending December 31st 2020 for our net revenue for the quarter was $41 7 million based on the daily time charter equivalent for Boe.
Speaker Change: <unk> 2000, $3200 at the same time, our adjusted EBITDA and net income reached $20 4 million and $6 6 million respectively. Despite the softening capesize market, we delivered a solid performance underscoring our resilience and ability to navigate macro fluctuations effectively on a full year.
Speaker Change: Basis, we achieved record profitability, reflecting both a keeps us market and the successful execution of our strategy. Our net revenue surged to $167 5 million up 50% year over year with a time charter equivalent ascending to approximately $25100.
Speaker Change: EBITDA grew to $98 4 million and our net income rose significantly to $43 5 million compared to 53 million and $2 3 million respectively. In 2023 earnings per share reached $2 $12 posting an impressive increase from zero point $12 last year.
Speaker Change: Moving onto our balance sheet, our cash position strengthened further in 2020 for closing the year at $34 9 million equivalent to approximately $1 8 million per vessel with a strong cash position was achieved despite retaining $25 million to shareholders through dividends and share buybacks more.
Speaker Change: We maintain leverage at moderate levels. Despite the fleet expansion that took place during the year keeping the total debt of $261 5 million for our book values debt to capital ratio of less than 50%. Once again this financial strength provides valuable flexibility, particularly in the.
Speaker Change: Current environment with a temporary softening of that keeps us market, ensuring we can effectively manage liquidity and see strategic opportunities. Our total assets reached 545 8 million, while our stockholder equity stood at $262 2 million, notably we delivered robust.
Thank you for standing by ladies and gentlemen, and welcome to the synergy Maritime Holdings Corp Conference call on the fourth quarter and year ended December 31st Twenty-twenty full financial results, we have with US Mr. Stem off his son, Thomas Chairman and CEO and Mr. Starbucks gift package, Chief financial officer of synergy in Maritime.
Speaker Change: Our OE of 17% for the full year, demonstrating our ability to drive shareholder value through operational efficiency and strategic capital allocation.
Speaker Change: Moving to slide six we can see that we again delivered robust core profitability with our adjusted EBITDA nearly doubling year over year.
Holding call at this time, all participants are in a listen only mode there'll be a presentation followed by question and answer session at which time, if you wish to like if you wish to like coffee question. Please press star one on your telephone keypad and you will then have an automated message advising that Johan has raised please be advised.
Speaker Change: <unk> highlighted earlier, our time charter equivalent outperformed the Dci on both a quarterly and annual basis, our adjusted EBITDA margin expanded to 57, 6% this year, reflecting our ongoing efforts on improving operational efficiency and cost management. This improvement underscores our commitment.
Speaker Change: This conference call is being recorded today Thursday March to say 20 to 25, the archived webcast of the conference call will soon be made available on the synergy website www dot synergy maritime dot com to access today's presentation and listen to the archived audio fall visit the synergy website.
Speaker Change: Maintaining strong financial health and delivering value to our stakeholders, even in a challenging market environment. In fact based on the current FFA rates, we anticipate our EBITDA to reach close to $80 million for the full year 2025. Additionally, our operating cash flow margin ratio improved significantly compared to last.
Speaker Change: Following the webcast and presentation section under the Investor Relations page.
Speaker Change: Here between 44%, indicating our ongoing efforts to enhance our ability to generate cash from our core operations on the expense side. We successfully maintained daily opex per vessel at 7000 effectively at the same level with the previous year, despite inflationary pressure and the gating factor of our vessels.
Speaker Change: Please now turn to slide two of the presentation. Many of the remarks today contain forward looking statements based on current expectations actual results may differ materially from the results projected from those forward looking statements additional information concerning factors that could cause the actual results to differ materially from those in the forward looking statements.
Speaker Change: In addition, it's important to note that this record profitability was achieved despite incurring significant one off expense in 2020 for having to do with a proxy fight and related litigation. This cost totaled $4 1 million for the year with about 6% of those expenses impacting G&A.
Speaker Change: <unk> is contained in the fourth quarter and year ended December 31st 2024 earnings release, which is available on the synergy website again www dot synergy maritime Dot Com I would now like to turn the conference over to one of your speakers today, the chairman and CEO of the company Mr. Stomata Sun.
Speaker Change: And net income over the fourth quarter, turning to slide seven we will discuss our debt optimization initiatives from the start of 'twenty 'twenty four update we successfully completed $174 4 million in financing and refinancing transaction. Despite these financings we have managed to maintain our leverage in the model.
Speaker Change: Thomas Please go ahead Sir.
Speaker Change: Thank you operator and welcome everyone.
Speaker Change: Today, we're pleased to present, our financial results for the fourth quarter and full year 2024, along with key corporate updates.
Speaker Change: We'll discuss our record profitability strategic fleet expansion and capital return initiatives as well as our outlook on the Capesize market and the factors positioning synergy for the long term success. We're pleased to report another strong and profitable quarter, marking our fourth consecutive year of profitability.
Speaker Change: We're at levels, which are debt per vessel currently standing at $13 8 million slightly higher than the average scrap value of the vessels regarding cash interest expenses reduced daily cash interest expense of approximately 2700 per vessel through refinancing and refinancing transactions we successfully.
Speaker Change: Synergies consistent financial performance underscores the strength of our Capesize focused strategy.
Speaker Change: <unk> lowered our weighted average margin in 2024 and expect this to decrease further through our recent agreements should this margin tightening get combined with the rate cuts from the fed it would lead to significant reduction of our daily interest expense now before we move on let me highlight some details on our latest transactions.
Speaker Change: Our effective hedging approach once again allowed us to outperform the Baltic Capesize index, PCI and our diversified dry bulk peers, many of whom remain exposed to weaker performance of smaller vessel classes.
Speaker Change: In February we finalized another sustainability loan to refinance existing debt of worship and ownership in the significantly improved terms and partially finance the acquisition of our latest Newcastle marks the measured the total amount of the transaction was $53 6 million through the term five years and an interest rate.
Speaker Change: 2024 was a record year for synergy with net income, reaching $43 5 million compared to just $2 3 million in 2023. It is important to note that our Q4 and full year results include the one off legal expenses related to our AGM in litigation, which had a temporary impact to our bottom.
Speaker Change: Of 2.05% plus term so far for around 55 basis points lower than the rate of the refinanced agreement. This is a sustainability linked loan as I said before so the rate can be further reviews based on the achievement of certain emission reduction targets through refinancing.
Fly sovereigns: Fly sovereigns will provide further details on this later in the call.
Fly sovereigns: Strategic focus remains on balancing capital returns solid growth and financial discipline, ensuring maximum shareholder value as we continue to operate in a fundamentally strong capesize market, reflecting on our solid Q4 performance. We have declared cash quarterly dividend of <unk> 10 per share, bringing our total to <unk>.
Speaker Change: We minimize vehicle to outlay for the acquisition of the May see safeguarding our liquidity position in a seasonally weak market. Additionally, we recently signed a term sheet with reputable Chinese lessor for two sale and leaseback agreements totaling approximately $34 5 million, which remains currently subject to documentation with agreed.
Fly sovereigns: <unk> 24 dividend to <unk> 76 per share or $15 6 million and total distributions. Additionally, we repurchased 226000 shares at an average price of $9 $44 during Q4, but enforcing our commitment to shareholder value.
Speaker Change: <unk> will be utilized to refinance the only balloon payments pending this year shaping a clear path for 2025. We are also expected to add further liquidity to the company and it will vary significantly improved interest rate compared to the existing indebtedness two ships.
Fly sovereigns: Part of our capital allocation strategy, we continuously assess the balance between dividends and buybacks and given the recent pressure on dry bulk equities, we acted decisively to maximize value for our shareholders on the fleet expansion front. We recently took delivery of two high quality Japanese built vessels that may ship and the blue chip.
Speaker Change: Now moving to slide eight I would like to highlight once again, a resilient operating leverage and our strategic positioning to capitalize on any upward movement in the capesize market at the same time, our risk management strategy is in place to safeguard our revenue and cash flows against market volatility of the Max mentioned earlier, we have already hit 20%.
Fly sovereigns: With these additions our total fleet has grown to 21 vessels, representing cutting capacity of $3 8 million deadweight tonnage pure play Capesize and new customer mixes in 2024, and <unk> 2025, we have invested $138 million and four bringing vessels further.
Speaker Change: <unk> four days for the year effectively leveraging freight market spikes as you can see in the graph if it keeps those rates in 2025 align with the current ex <unk>.
Fly sovereigns: Strengthening our fleet cash flow generation potential given the positive kpis fundamentals, we firmly believe that acquiring high quality vessels at attractive valuations enhances our ability to deliver strong returns throughout the cycle. Since the beginning of 2024, we have successfully completed a $174 million in finance.
Speaker Change: Our EBITDA for 2025 to be approximately $78 million in more favorable scenario EBITDA could exceed 100 million summarized we are well prepared to navigate market fluctuations and seize opportunities, we will commit to driving sustainable growth and enhancing shareholder value.
Fly sovereigns: <unk> salary financings reinforcing our ability to support fleet expansion, while maintaining financial flexibility establish who will provide additional insights into these transactions, but I would like to highlight that we ended the year with a fleet loan to value of 45%, while expanding our fleet and delivering significant capital returns to us.
Speaker Change: That concludes my review of our financial results and update I will now pass the call back to Marty who will provide insights into the keeps us market and industry fundamentals somatic.
Speaker Change: Safety sovereign slide nine overall 2024 was a strong year for the Capesize market with BCA, averaging $22400 a day a significant increase from the $16600 a day in 2023, the combination of historically low fleet growth and rising ton mile.
Fly sovereigns: Shareholders.
Fly sovereigns: <unk> market remains well positioned to continue strength underpinned by robust demand for iron ore bauxite and cold with trade volumes, increasing in 2024 limited fleet expansion with net Capesize fleet growth at just one 7% in 2024 and projected declined further to one 4% in 2000.
Speaker Change: Demand from Atlantic Basin cargoes continues to support our positive long term trajectory wireless short term volatility remains driven by factors such as weather disruptions and inventory restocking cycles and seasonality. We believe the structural fundamentals remain strong supporting sustained vessel earnings in the years ahead.
Fly sovereigns: 75, 2024, and 2025 represents the lowest capesize delivery years since 2003, reinforcing a favorable supply demand balance. Despite short term volatility we expect the market set up for 2025 and beyond remain highly supportive during Q4.
Speaker Change: In Q4 2020 for the Capesize market experienced a collection with <unk>, averaging $18300 per day compared to $24900 in Q3 and $28100. In Q4 2023. This decline was mainly due to reduced Brazilian iron ore.
Fly sovereigns: 2024, we generated revenues of $41 7 million daily TC time charter equivalent rate of $23200. A day net income of $6 6 million slide three prioritizing shareholder returns.
Speaker Change: Exports lower Capesize coal cargos from eastern Australia, weaker panamax rates, which increased downward pressure on capesize vessels of similar ships absorb part of the core trade for the full year Capesize ton mile demand grew by approximately 4% fueled by higher seaborne iron ore shipments.
Fly sovereigns: Turning to slide three our clear and disciplined capital return strategy continues to maximize value for shareholders through consistent dividends and strategic buybacks over the past three years, we have distributed more than $14 million in dividends equating to $21 per share when including surgery.
Speaker Change: As well in Brazil achieved its highest production since 2019, China's bauxite imports reached 159 million tons up $18 million from 2023 with over three quarters transported on Cape size vessels fleet growth remains limited at around 2% and.
Fly sovereigns: Purchases and convertible note buybacks, our total capital return amounted to $87 million.
Fly sovereigns: Representing approximately 60% of our current equity market capitalization. This reflects our strong commitment to shareholder value while at the same time, allowing us to strategically expand our fleet in a capital efficient manner, our ability to simultaneously grow the fleet and reward shareholders with significant.
Speaker Change: <unk> to match demand growth, resulting in a tighter market for most of the year regarding 2025 market outlook. Looking ahead capesize demand is expected to be increasingly driven by rising Atlantic to Asia cargo flows leading to longer voyage distances and higher ton mile requirements.
Fly sovereigns: Capital returns underscores synergies financial strength and confidence in the Capesize markets long term fundamentals as the market remains strong in the years ahead, we remain committed to maintaining a balanced approach to growth and shareholder distributions slide four commercial highlights and fleet updates will be.
Speaker Change: West Africa bauxite exports expected to increase by about 20 million tons in 2025 supported by rising global aluminum demand and improved export logistics iron ore trade growth. Brazil's Vale exports are expected to remain very strong and in addition, we expect to see the Simandou mine.
Fly sovereigns: Slide four synergy once again delivered industry, leading time charter equivalent performance in both Q4 and full year 2024, our Q4 daily TCE was $23100, while the full year Tc reached $25100 per day outperform.
Speaker Change: <unk> project in West Africa said to finally commenced seaborne iron ore shipments in late 2025 coal demand Chinas coal imports surged 14, 4% in 2024 as domestic production struggle to meet demand while short term fluctuations may occur due to inventory cycles.
Fly sovereigns: The Baltic Capesize index by 27% and 11% respectively. This outperformance validates our strategic focus on the Capesize segment setting us apart from other diversified dry bulk peers remain exposed to smaller vessel classes with weaker returns even amidst the weaker Q4.
Speaker Change: Long term demand remains solid, particularly for industrial and energy needs. These factors set the stage for a potential demand upturn in the second half of 2025, supporting a stronger market environment and higher Capesize charter rates in the coming years slide 10.
Fly sovereigns: Market, we maximize earnings by strategically looking in FSA based fixed rates for a portion of our fleet days, ensuring greater revenue stability and enhanced profitability. Looking ahead to 2025, we have already secured a 22% of our operating days at an average gross rate exceeding.
Speaker Change: On the supply side vessel additions remain highly constrained with effective Capesize fleet growth projected at just one 5% in both 2025 and 2026. The current order book is at the lowest levels in 20 years and upcoming environmental regulations are set to further restrict new vessel deliveries.
Fly sovereigns: So the $2100 a day for Q1 2025, we expect an indicative time charter equivalent of approximately $13400 per day, our focus remains on strategically fixing vessels at profitable rates and ensuring cash flow visibility and maximizing shareholder returns our fleet.
Speaker Change: Factoring in the extensive dry dock schedule in 2025 of the global fleet net fleet growth could drop to as low as 1% reinforcing a tight supply environment additional port congestion remains at historically low levels, meaning any potential disruptions could only significant.
Fly sovereigns: <unk> continued in Q4 2024, reinforcing our position as a leading pure play capesize operator.
Speaker Change: Impact vessel availability and pushed up charter rates.
Fly sovereigns: 2010, before we took delivery of the 2012 build kaisership completing another year of targeted fleet expansion combined investment in Nikon ship delivery June 'twenty, 'twenty, four and CASM chip totaled $69 3 million, representing an excellent value relative to their estimated market prices. Both vessels are on index.
Speaker Change: Looking at new building activity that have been zero, new orders placed this year and given the pricing gap between new builds and second hand ships, we do not expect this trend to change in the near future.
Speaker Change: With only 40 capesize vessels scheduled for delivery in 2025, the combined deliveries for 2024, and 12, 25% represent the lowest level since 2003 as highly favorable dynamic for supply of the vessels.
Fly sovereigns: <unk> charters with a premium over the PCI, providing strong cash flow visibility into 2025 and beyond in addition, we exercised a highly attractive purchase option for the 2011 built Newcastle Max that Titan ship at 20 $25 million at yearend 2020 for Titan ships Mark.
Speaker Change: Given this tight supply backdrop and environmental regulations continue to reinforce the need for fleet replacement, while reducing vessel speeds and limiting overall capacity growth. This structural slowdown in fleet expansion and operational efficiency supports a strong long term outlook for the Capesize fundamental.
Fly sovereigns: That value exceeded $75 million, highlighting our ability to secure high quality assets at compelling prices. The vessel operate on an index linked charter with a fixed floor and significant profit sharing upside and touring strong earnings potential recent additions to our fleet two additional Japanese built vessels acquired since <unk>.
Speaker Change: <unk> conclusion synergies pure play Capesize strategy is now a proven model positioning us to capitalize on long term industry tailwind with three clear objectives capital returns, we remain committed to maximizing shareholder value through dividends and share buybacks flip.
Fly sovereigns: Last quarterly update.
Fly sovereigns: And we May ship in 2013, built new customer mix and the MV Blue ship in 2011 built Capesize total investment of $69 million further expanding our high quality efficient flip the blue chip is expected to enter an index linked time charter while they may ship will operate under a structured.
Speaker Change: We focus on strategic high return fleet expansion and ensuring sustainable value creation financial strength will continue to balance growth with financial discipline, maintaining a flexible balance sheet that allows us to navigate market volatility while enhancing.
Fly sovereigns: Fixed floor time charter with profit sharing similar to the pattern charter with $3 8 million deadweight tons of pure play 21, Cape sizes, and new customer maxes now in operation.
Speaker Change: Returns synergy is successfully delivering on these priorities as reflected in our strong financial performance and share price growth with a favorable capesize market outlook and a disciplined strategy, we remain well positioned to drive sustained value for our shareholders. On this note I would like to turn the call back to the operator.
Fly sovereigns: <unk> has achieved significant flip scale, but we remain committed to disciplined growth will continue to evaluate strategic fleet opportunities leveraging our deep industry relationships and access to high quality assets to enhance shareholder value.
And answer any questions you may have operator, please take the call.
Fly sovereigns: I will now pass the call to establish who will fill you in on our financial information for the quarter and the full year as well as discussing our balance sheet and debt refinancings Stavros. Please go ahead. Thank.
Speaker Change: Thank you.
Speaker Change: To ask a question you will need to press star one on your telephone and wait for your name to be announced please standby, while we compile the Q&A roster.
Thank you Samantha and welcome to everyone joining us for todays earnings call.
Stavros: Let's begin with slide five we will review the key highlights of our financial performance for the fourth quarter and the full year ending December 31st 2020 for our net revenue for the quarter was $41 7 million based on the daily time charter equivalent for bulk $23200 at the same time, our adjusted <unk>.
Speaker Change: Our first question.
Speaker Change: Comes from the line of Liam Burke from B Riley financial Please go ahead.
Liam Burke: Hi, How're you doing.
Speaker Change: Hi, Good morning late last year to view thank.
Liam Burke: Thank you you too.
Stavros: And net income reached $24 million to $6 6 million respectively. Despite the softening keeps us market, we delivered a solid performance underscoring our resilience and ability to navigate market fluctuations effectively on a full year basis, we achieved record profitability, reflecting both through the <unk>.
Liam Burke: <unk>.
Liam Burke: We are all familiar with the supply demand dynamics long term of the.
Liam Burke: The Capesize fleet, but.
Rates were understandably very low in the first quarter for a number of reasons, including seasonality, but they took a fairly precipitous bounce into the end of the quarter and into the second quarter.
Stavros: <unk> market and the successful execution of our strategy, our net revenue surged to $167 5 million up 50% year over year with a time charter equivalent ascending to approximately 25001.
Liam Burke: Can you give us a sense as to what's.
Liam Burke: <unk>.
Liam Burke: Pretty steep short term rebound.
Speaker Change: That's a great question. The short answer to that is it is not the Cape size segment fault. It is actually the reason why we have seen very limited congestion on the capital markets. So we have assessed that the previous.
Stavros: $100 adjusted EBITDA grew to $98 4 million and our net income rose significantly to $43 5 million compared to 53 million and $2 3 million respectively. In 2023 earnings per share reached $2 $12 posting an impressive increase from zero point.
Speaker Change: Let's say six months from September onwards congestion of the cancer <unk> went down to almost zero.
Stavros: Last year moving onto our balance sheet, our cash position strengthened further in 2020 for closing the year at $34 9 million equivalent to approximately $1 8 million per vessel. This strong cash position was achieved despite retaining two and a half million dollars simple goes through dividends and share.
Speaker Change: We'll discuss for a few seconds about the capital market to let you know what I mean, Samsung Max at any given point. There were 102 200 ships waiting that Paramaribo in South America. There were 102 200 ships waiting to pass the Panama Canal due to the.
Speaker Change: Previous periods of drought and you had another 200 100 to 100 comes through <unk> in the Black Sea for our grain corridor nothing of that exists today since the second half of last year. All of this approximately 600 ships are out and about looking for cargos and the <unk>.
Stavros: Buybacks more importantly, we maintain leverage at moderate levels. Despite the fleet expansion that took place during the year keeping the total debt of $261 5 million for our booked value debt to capital ratio of less than 50%. Once again recently and relative strength provides valuable flexibility.
Speaker Change: But collapsed down to $5000. So we had this paradox back in September October where you had the capesize market at 25000, and the <unk> market at 5000, So unavoidably. The charter started to split of cargoes and a lot of comps out of Max.
Stavros: Particularly in the current environment with a temporary soft and use it keeps us market, ensuring we can effectively manage liquidity and see strategic opportunities. Our total assets reached 545 8 million, while our stockholders' equity stood at $262 2 million, notably with.
Speaker Change: <unk> ships started to pick up coal cargoes from the Cape sizing cannibalizing the capesize sector. So that's the main driver low congestion of the cancer marketers is what led to this sharp decline in the Capesize.
Stavros: Delivered robust our OE of 17% for the full year, demonstrating our ability to drive shareholder value through operational efficiency and strategic capital allocation.
Stavros: Moving on slide six we can see that we again delivered robust core profitability with our adjusted EBITDA nearly doubling year over year.
Speaker Change: You know rates as well because since the beginning of the year the volumes are Super high.
Speaker Change: You had the closure of the Red Sea, which also has helped the market and at the same time you had a very low speed of the fleet that we have the lowest flip speed on the capes or the last five years all of this.
Speaker Change: As <unk> highlighted earlier, our tentative equivalent outperformed the Dci on both a quarterly and annual basis, our adjusted EBITDA margin expanded to 57, 6% this year.
Speaker Change: Factors combine and of course the supply of ships is very limited all of these factors combined.
Speaker Change: On going efforts on improving operational efficiency and cost management.
Speaker Change: This improvement underscores our commitment to maintaining strong financial health and delivering value to our stakeholders, even in a challenging market environment. In fact based on the current <unk> rate, we anticipate our EBITDA to reach close to $80 million for the full year 2025. Additionally, our operating cash flow margin.
It would have implied a market of $25000 a day, but that didn't happen because unfortunately, the smaller segment caliber.
Speaker Change: Cannibalize, the Capesize and our new customer mix now we have seen that starting to reverse and Thats why we have the futures at these higher rates for the remainder of the year with an average of 22000 barrels a day, so that makes us feel a little bit more optimistic about that.
Speaker Change: <unk> improved significantly compared to last year between 44%, indicating our ongoing efforts to enhance our ability to generate cash from our collaborations with the expense side. We successfully maintained daily opex per vessel at 7000 effectively at the same level with the previous year, despite inflationary pressures.
Speaker Change: Restructure of the year, but unfortunately, it was not driven by the fundamentals of the Capesize segment. It was due to the fact that we had more effective supply on the campus of Abaxis into the market. That's our initial assessment internal assessment from our research Department I'm speaking to a lot of market participants.
Speaker Change: And the $85 four vessels.
Speaker Change: Additionally, it is important to note that this record profitability was achieved despite incurring significant one off expense in 2020 for having to do with a proxy fight and related litigation. This cost totaled $4 1 million for the year with about 6% of loose expenses impacting G&A and Lindsay.
Speaker Change: That's great. Thank you.
These are nitpicking questions, but I mean on both Opex and SG&A you had on the Opex you had delivery expenses on the new vessels.
Speaker Change: On the SG&A, you had legal related to the to the proxy fight.
Speaker Change: Going into next year, those one timers behind you or do you have some excess costs coming into the earlier into the first quarter.
Speaker Change: In the fourth quarter.
Speaker Change: Turning to slide seven we will discuss our debt optimization initiatives from the start of 'twenty 'twenty four update we successfully completed $174 4 million in financing and refinancing transaction. Despite this financing should have managed to maintain our leverage at moderate levels of debt per vessel.
Liam Burke: Hi, Liam Hello from my side, So no going forward, we expect opex to remain pretty much the same level at around 7000.
Liam Burke: Per ship per day, and then on G&A, a good proxy it would be 2023.
Speaker Change: Standing at $13 8 million slightly higher than the average scrap value of the vessels regarding cash interest expenses reduced daily cash interest expense of approximately 2700 per vessel through refinancing and refinancing transactions, we successfully lowered our weighted average margin.
Liam Burke: Taking taking out all the expenses that we incurred for the litigation, which were around $4 million for the full year of $2 4 million of which.
Liam Burke: <expletive> the bottom line of the fourth quarter, we expect this to range about one 5% 2000 per vessel per day.
Speaker Change: Before and expect this to decrease further through our recent agreements should this margin tightening get combined with rate cuts from the fed it would lead to significant reduction of our daily interest expense now before we move on.
Speaker Change: Great. Thank you very much.
Speaker Change: Thank you Leah.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Mark Reichman from Naval Capital markets. Please go ahead.
Speaker Change: Let me highlight some details on our latest transactions in February we finalized another sustainability loan to refinance existing debt of all keep an ownership in the significantly improved terms and partially finance the acquisition of our latest Newcastle amongst the Macy's the total amount of the transaction was $53 6 million.
Speaker Change: Thank you and good morning.
Speaker Change: Hi, Good morning, I have is just I wanted to focus on the first quarter of.
Speaker Change: 2025, so you've already given the operational days at $17 66, which is actually a little higher than what we had in there.
Speaker Change: Does that include both the Blue chip in the my ship.
Speaker Change: The term five years and an interest rate of 2.05% plus so far per run 55 basis points lower than the rate of the refinanced agreement. This is a sustainability linked loan as I said before so the rate can be further reviews based on the achievement of certain image.
Speaker Change: February delivery dates.
Speaker Change: Well the answer is yes that includes the ships that were delivered to us earlier than what we had initially anticipated.
Speaker Change: Thanks to our good contacts with the sellers and good relationships with managed to take delivery of these two great assets.
Speaker Change: <unk> reduction targets through.
Speaker Change: This financing will minimize vehicle to outlay for the acquisition of the Macy's safeguarding our liquidity position in a seasonally weak market. Additionally, we recently signed a term sheet with reputable Chinese lessor for two sale and leaseback agreements totaling approximately $34 5 million, which remains currently subject to documentation.
Speaker Change: Ahead of time and that is going to help us put them into work.
Speaker Change: Immediately.
Speaker Change: And especially starting in Q2 that we see the market going up a lot compared to Q1, so thats the short answer to that.
Speaker Change: So is Q1 is at 19 vessels or is it 21 vessels.
Speaker Change: These agreements will be utilized to refinements, we only balloon payments pending this year shaping a clear path for 2025. We are also expected to add further liquidity to the company and it will vary significantly improved interest rate compared to the existing business. The two ships now moving.
Speaker Change: Whether it was whether you start earning money beginning in the second quarter or where they will they be in service in the first quarter.
Speaker Change: Okay.
Speaker Change: I think that you can count them 21 ships from Q2 for Q1, I would say an average of 19.
Speaker Change: Slide eight I would like to highlight once again, a resilient operating leverage and our strategic positioning to capitalize on any upward movement in the capesize market at the same time, our risk management strategy is in place to safeguard our revenue and cash flows against market volatility of the Max mentioned earlier, we have already hit 22% of our debt.
Speaker Change: <unk> 19 for three quarters.
Speaker Change: Yes.
Speaker Change: Okay got you now the other question is.
Speaker Change: The.
Speaker Change: Off hire days, so I know you had planned to do.
Three dry dockings in the first quarter and then one dry docking each quarter after that.
Speaker Change: Could you just maybe talk a little bit about your expectations. There in terms of off hire days.
Speaker Change: For the year effectively leveraging freight market spikes as you can see in the graph if keeps those rates in 2025.
Speaker Change: So you should expect around high market established you should expect around 22 and final Carey days per vessel during the dry docking. Although estimates as noted previously we should pick dry docking year for the Cape sizes. The majority of the fleet was built.
Speaker Change: Your line with the current <unk>, we anticipate our EBITDA for 2025 to be approximately $78 million in more favorable scenario EBITDA could exceed $100 million.
Speaker Change: Summarized we are well prepared to navigate module fluctuations since these opportunities, we will commit to driving sustainable growth and enhancing shareholder value.
Speaker Change: 2000, 9010, 2011, so there.
Speaker Change: And in some case you would expect unforeseen delays, we expect dry docking days to move a bit forward.
Speaker Change: That concludes my review of our financial results and update I will now pass the call back to Marty who will provide insights into the keeps us market and industry fundamentals. So Marty.
Due to the congestion I should say in the Chinese shipyards right now, but on average I would.
Speaker Change: Factor in 'twenty to 'twenty five off hire days for each drydocking.
Speaker Change: Same for several slide nine overall 2024 was a strong year for the Capesize market with the BCA, averaging $22400 a day a significant increase from the $16600 a day in 2023, the combination of historically low fleet growth and rising ton mile.
Speaker Change: Okay, Great and then just lastly.
Speaker Change: Just looking at the Capesize vessel rates I mean, obviously.
Speaker Change: Kind of in the low Twenty's first quarter expectations are quite low.
Speaker Change: Demand from Atlantic Basin cargoes continues to support our positive long term trajectory, while short term volatility remains driven by factors such as weather disruptions and inventory restocking cycles and seasonality. We believe the structural fundamentals remained strong supporting sustained vessel earnings in the years ahead.
Just looking ahead I mean do you expect that.
Speaker Change: They might hold at these levels or increase or do you think some of the.
Worries surroundings.
Speaker Change: Lumps tariffs moves.
Might have an impact or do you just think the fundamentals of the capesize market.
In Q4 2020 for the Capesize market experienced a correction to the PCI, averaging $18300 per day compared to $24900 in Q3 and $28100. In Q4 2023. The decline was mainly due to reduced Brazilian iron ore X.
Speaker Change: Rise above it all.
Speaker Change: Well that's the billion dollar question I guess, we are generally very optimistic because the fundamentals of the Capesize is appeared to be very strong also contrary to most if not all of our peers.
Speaker Change: Zero Chinese built ships with exception of one yeah. So we don't anticipate to be affected by any.
Speaker Change: Ports, lower Capesize coal cargos from eastern Australia, weaker panamax rates, which increased downward pressure on capesize vessels are similar ships absorb part of the coal trade for the full year capesize ton mile demand grew by approximately 4% fueled by higher seaborne iron ore shipments.
Speaker Change: Levies for Port calls in the United States not that we do but yes, we.
We don't expect to be attracted to that.
Speaker Change: All these tariffs and trade wars that are being discussed that can be either very bad news for the global trade not just dry bulks in capes, but the global trade, but also can be excellent news ones.
Speaker Change: As well in Brazil achieved its highest production since 2019, China's bauxite imports reached 159 million tons up $18 million from 2003 with over three quarters transported on Capesize vessels fleet growth remains limited at around 2%.
Speaker Change: The market normalizes into new trade patterns. So we cannot at the same time, we may have some positive news about the war was ending correct constructions things like that that are fundamental for the capesize rate. Nevertheless, Ah <unk>.
Speaker Change: <unk> to match demand growth, resulting in a tighter market for most of the year regarding 2025 market outlook. Looking ahead capesize demand is expected to be increasingly driven by rising Atlantic to Asia cargo flows leading to longer voyage distances and higher ton mile requirements.
Speaker Change: Demand for raw materials like iron ore coal and bauxite has been very very strong. So all of these fluctuations about.
Speaker Change: Freight rates are not driven by the demand that we find to be very strong but from effective supply of things.
Speaker Change: West Africa bauxite exports expected to increase by about 20 million tons in 2025 supported by rising global aluminum demand and improved export logistics iron ore trade growth Brazil's Val exports are expected to remain very strong and in addition, we expect to see the Simandou mining.
Speaker Change: Not so much related to capes.
Speaker Change: Okay, well. Thank you very much that's very helpful.
Speaker Change: Very welcome Thank you Mark.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Keith Sullivan from Maxim Group. Please go ahead.
Keith Sullivan: Hi, Thank you good day.
Speaker Change: People are purchasing dividend insider purchases and then some other some of your comments about the coal trade.
Speaker Change: Project in West Africa said to finally commenced seaborne iron ore shipments in late 2025 coal demand Chinas coal imports surged 14, 4% in 2024 as domestic production struggle to meet demand while short term fluctuations may occur due to inventory cycles.
Keith Sullivan: Impacts from lets call demand in Russia and Europe.
Speaker Change: Maybe the.
Keith Sullivan: Russia going forward.
Speaker Change: Seeing higher demands in.
Speaker Change: Asia for Paul.
Speaker Change: Good morning, Dave. Thank you about coal trade, we're generally very optimistic about coal trade.
Speaker Change: Long term demand remains solid, particularly for industrial and energy needs. These factors set the stage for a potential demand upturn in the second half of 2025, supporting a stronger market environment and higher Capesize charter rates in the coming years slide 10 on.
Together.
Speaker Change: President Trump's.
Speaker Change: As <unk> has.
Speaker Change: Many times I mentioned that coal is expected to drive a lot of the increased energy needs.
Speaker Change: For data centers.
Speaker Change: All other things associated to energy in the near future. So we're very optimistic about coal.
Speaker Change: On the supply side vessel additions remain highly constrained with effective Capesize fleet growth projected at just one 5% in both 275 and 2026. The current order book is at the lowest levels in 20 years and upcoming environmental regulations are set to further restrict new vessel deliveries.
Speaker Change: There is a lot of.
Speaker Change: New building capacity of coal fired power plants globally more than 100, Gigawatts of new energy production driven by coal. So overall, we don't see coal demand subsiding anytime soon but we feel that coal will continue to rise in the near future.
Speaker Change: Factoring in the extensive dry dock schedule in 2025 of the global fleet net fleet growth could drop to as low as 1% reinforcing a tight supply environment additional port congestion remains at historically low levels, meaning any potential disruptions could only significant.
Speaker Change: Fine.
Speaker Change: Okay.
Speaker Change: A few quarters, yet year to date are there any indications that Chinese companies building or product.
Speaker Change: <unk>.
Speaker Change: Impact vessel availability and push up charter rates.
Barry: Just Barry Alright, well activity.
Barry: So can you. Please repeat the question because you were breaking up.
Speaker Change: Looking at new building activity there have been zero, new orders placed this year and given the pricing gap between new builds and second hand ships, we do not expect this trend to change in the near future.
Barry: Oh, just newbuild activity due to say zero orders year to date period ultimately.
Barry: Yes, it's very limited there is a lot of factors leading to that there is uncertainty about Chinese built ships and also all the slots that could otherwise built Cape sizes are pretty much taken.
Speaker Change: With only 40 capesize vessels scheduled for delivery in 12 25, the combined deliveries for 2024, and 12, 25% represent the lowest level since 2003 as highly favorable dynamic for supply of the vessels.
Barry: <unk> taken until mid to end of 2028, So we don't really see any immediate threat for new buildings coming into the market.
Speaker Change: Given this tight supply backdrop environmental regulations continue to reinforce the need for fleet replacement, while reducing vessel speeds and limiting overall capacity growth. This structural slowdown in fleet expansion and operational efficiency support a strong long term outlook for the Capesize fundamental.
Barry: For many many quarters looking forward.
Barry: Yes. Thank you.
Barry: You're very welcome. Thank you.
Barry: Thank you.
Speaker Change: Your next question comes from the line of loss Ida from Arctic Securities. Please go ahead.
Speaker Change: <unk> conclusion synergies pure play Capesize strategy is now a proven model positioning us to capitalize on long term industry tailwind with three clear objectives capital returns, we remain committed to maximizing shareholder value through dividends and share buybacks flip.
Barry: Okay.
Ida: Thank you for taking my question.
Ida: Good morning, it's a pleasure good afternoon.
Speaker Change: And so I have a question regarding the market outlook.
Ida: As you all know Theres a lot of stuff going on.
Ida: Geopolitics Paradise, with China connecting to GDP growth target of 5% or announced this week and the Trump of course, what kind of developments are you monitoring the closest unless you think to have the most what do you expect to have the most impact moving forward and in the medium term.
Speaker Change: We focus on strategic high return fleet expansion and ensuring sustainable value creation financial strength will continue to balance growth with financial discipline, maintaining a flexible balance sheet that allows us to navigate market volatility while enhancing.
Ida: Well, it's a combination of events as I mentioned in the previous.
Speaker Change: Returns synergy is successfully delivering on these priorities as reflected in our strong financial performance and share price growth with a favorable capesize market outlook and a disciplined strategy, we remain well positioned to drive sustained value for our shareholders. On this note I would like to turn the call back to the operator.
Speaker Change: Questions, we don't really see any problems with demand and we haven't really seen any problems with demand for the last two to three years. Since 2023, 24 and 25. It appears that demand for raw materials will continue to be very strong even though you had bankruptcies in China from the real estate developers and all these things.
Speaker Change: And answer any questions you may have operator, please take the call.
Speaker Change: They still imported 4% to 5% more raw materials in the previous year, so demand as a ratio.
Speaker Change: Thank you.
Speaker Change: At the same time supply appears to be quite contained we were not expecting the big price differential between <unk> and <unk> immediate drop off that comes out of Max's and second hospital for last year and I don't think that everybody did.
Speaker Change: To ask a question you will need to press star one on your telephone and wait for your name to be announced please standby, while we compile the Q&A roster.
Speaker Change: Our first question.
Speaker Change: Given where the futures and the estimates were in June May and June last year. So second half it was extremely weak and that is what.
Tim Buck: Comes from the line of Tim Buck from B Riley financial Please go ahead.
Speaker Change: Hi, <unk>.
Speaker Change: Pull down.
Speaker Change: How're you doing.
Speaker Change: The Cape sizes by splitting the cargoes of the Capesize into Comstock.
Speaker Change: Good morning, Liam nice to hear from you.
Speaker Change: Thank you you too.
Speaker Change: It's always about the supply so when you have increases of effective supply. This is what.
Speaker Change: <unk>.
Speaker Change: We are all familiar with the supply demand dynamics long term.
Speaker Change: The Capesize fleet, but.
Speaker Change: Makes the market appears to be weaker also.
Speaker Change: Rates were understandably very low in the first quarter for a number of reasons, including seasonality, but they took a fairly precipitous bounce into the end of the quarter and into the second quarter.
Speaker Change: If we come to a full blown trade war globally, which we gave it a very small percentage as a probability if we come to that then we may see a temporary.
Speaker Change: A reduction of overall global trade, but this is not going to affect capesize that is going to be affecting all segments of shipping altogether in global trade. So I hope it will not come to that and I believe that the.
Speaker Change: Can you give us a sense as to what has created this.
Speaker Change: Pretty steep short term rebound.
Speaker Change: That's a great question and.
Speaker Change: The short answer to that is it is not the Capesize segment fault. It is actually the reason why we have seen very limited congestion on the capital markets. So we have assessed that the previous let's say six months from September onwards congestion of the cancer.
Speaker Change: Inertia of the global.
Speaker Change: Increase of the GDP is unstoppable and I certainly hope that we will see strong demand for raw materials going forward.
Speaker Change: Okay.
Speaker Change: Okay. Thank you very much.
Speaker Change: <unk> went down to almost zero I will discuss for a few seconds about the capital markets to let you know what I mean, Samsung Max at any given point. There were 102 200 ships waiting that Paramaribo in South America. There were 102 200 ships waiting to pass the Panama Canal due to the.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: There are currently no further questions I will hand, the call back for closing remarks.
Speaker Change: Well, thanks, once again, everyone for participating in our call and looking forward to be updating you soon with further developments in blue we look forward to a better market for the remainder of the year. Thank you very much and have a great day, great afternoon wherever you are thank you.
Speaker Change: Previous periods of drought and you had another 200 100 to 100 comes through <unk> in the Black Sea for the grain corridor nothing of that exists today since the second half of last year. All of this approximately 600 ships are out and about looking for cargos and the <unk>.
Speaker Change: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect speakers. Please standby.
Speaker Change: Collapsed down to $5000. So we had this paradox back in September October where you had the capesize market at 25000, and the <unk> market at 5000, So unavoidably the charters started to split the cargos and a lot of comfort Max.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: <unk> ships started to pick up coal cargoes from the Cape sizing cannibalizing the capesize sector. So that's the main driver no congestion of the capital markets is what led to this sharp decline in the Capesize.
Speaker Change: Rates as well because since the beginning of the year the volumes are Super high.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: You had the closure of the let's see which also has helped the market and at the same time you had a very low speed of the fleet, we have the lowest flip speed on the capes over the last five years all of this.
Speaker Change: Factors combined and of course the supply of ships is very limited all of these factors combined.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: It would have implied a market of 25000 Boes, a day, but that didn't happen because unfortunately, the smaller segment caliber.
Cannibalize, the Capesize and our new customer mix now we have seen that starting to reverse and Thats why we have the futures at these higher rates for the remainder of the year with an average of 22000 barrels a day, so that makes us feel a little bit more optimistic about that.
Speaker Change: The structure of the year, but unfortunately, it was not driven by the fundamentals of the Capesize segment. It was due to the fact that we had more effective supply on the <unk> into the market.
Speaker Change: Yes.
Speaker Change: Our initial assessment internal assessment from our research Department and speaking to a lot of market participants.
Speaker Change: That's great. Thank you.
Speaker Change: These are nitpicking questions, but I mean on both Opex and SG&A you had on the Opex you had delivery expenses on the new vessels.
Speaker Change: On the SG&A, you had legal related to the to the proxy fight.
Speaker Change: Going into next year, those one timers behind you or do you have some excess costs coming into the earlier into the first quarter.
Speaker Change: Hi, Liam Hello from my side, So no going forward, we expect opex to remain pretty much the same level at around 7000.
Speaker Change: Per ship per day, and then on G&A, a good proxy it would be 2023.
Taking taking out all the expenses that we incurred for the litigation, which were around $4 million for the full year of $2 4 million of which.
Speaker Change: Keep the bottom line of the fourth quarter, we expect this to range about one five to 2000 per vessel per day.
Speaker Change: Great. Thank you very much.
Leah: Thank you Leah.
Leah: Thank you.
Speaker Change: Your next question comes from the line of Mark Reichman from Naval Capital markets. Please go ahead.
Mark Reichman: Thank you and good morning.
Mark Reichman: Hi, Good morning, I have is just I wanted to focus on our first quarter of.
Mark Reichman: 2025, so you've already given the operational days at $17 66, which is actually a little higher than what we had in there.
Does that include both the blue ship in the mind shift as they.
Mark Reichman: February delivery dates.
Mark Reichman: Yes.
Mark Reichman: Well the answer is yes that includes the ships that were delivered to us earlier than what we had initially anticipated. Thanks.
Mark Reichman: Thanks to our good contacts with the sellers.
Mark Reichman: Relationships with managed to take delivery of these two great assets.
Mark Reichman: Ahead of time and that is going to help us put them into work.
Mark Reichman: Immediately.
Mark Reichman: And especially starting in Q2 that we see the market going up a lot compared to Q1, so thats the short answer to that.
Mark Reichman: So is Q1 is at 19 vessels or is it 'twenty one vessel will they go.
Mark Reichman: Whether you start earning money beginning in the second quarter or where they will they be in service in the first quarter.
Mark Reichman: Well.
Speaker Change: I think that you can count in 'twenty, one ships from Q2 for Q1, I would say an average of 19.
Mark Reichman: <unk> 19 for three quarters.
Mark Reichman: Yes.
Mark Reichman: Okay got you now the other question is.
Mark Reichman: The off hire days, so I know you had planned to do.
Mark Reichman: Three dry dockings in the first quarter and then one dry docking each quarter after that.
Mark Reichman: Could you just maybe talk a little bit about your expectations. There in terms of off hire days.
Mark Reichman: No you should expect around hi, Mark. This established you should expect around 22 and final client days per vessel during the dry docking. Although estimates as noted previously we should pick dry docking year for.
Mark Reichman: For the Cape sizes, the majority of the fleet was built.
Mark Reichman: Around 2000, 9010 2011, so there.
Mark Reichman: In some case you would expect unforeseen delays, we expect dry docking days to move a bit forward.
Mark Reichman: Due to the congestion I should say in Chinese shipyards, right now, but on average I would.
Mark Reichman: A factor in 'twenty to 'twenty five off hire days for each drydocking.
Mark Reichman: Okay, Great and then just lastly.
Mark Reichman: Just looking at the Capesize vessel rates I mean, obviously.
Mark Reichman: Kind of in the low twenties.
Mark Reichman: First quarter expectations are quite low.
Mark Reichman: Just looking ahead I mean do you expect that.
Mark Reichman: They might hold at these levels or increase or do you think some of the.
Mark Reichman: Worries surrounding us.
Mark Reichman: Trump's tariffs moves might.
Mark Reichman: It might have an impact or do you just think the fundamentals of the capesize market.
Mark Reichman: Rise above it all.
Mark Reichman: Well.
Mark Reichman: The $1 billion question I guess, we are generally very optimistic because the fundamentals of the Capesize is appeared to be very strong also contrary to most if not all of our peers.
Mark Reichman: We have zero Chinese built ships with exception of one so we don't anticipate to be affected by any.
Mark Reichman: Levies.
Mark Reichman: <unk> in the United States, not that we do but.
Mark Reichman: We don't we don't expect to be effective at that.
Mark Reichman: All these tariffs and trade wars that are being discussed can be either very bad news for the global trade not just dry bulks in capes, but the global trade, but also can be excellent news ones.
Mark Reichman: The market normalizes into new trade patterns. So we cannot at the same time, we may have some positive news about the war was ending correct constructions things like that that are fundamental for the capesize rate. Nevertheless.
Mark Reichman: Capesize demand for raw materials like iron ore coal and bauxite has been very very strong. So all of these fluctuations about.
Mark Reichman: The freight rates are not driven by the demand that we find to be very strong but from effective supply of things.
Mark Reichman: Not so much related to capes.
Mark Reichman: Okay, well. Thank you very much that's very helpful very.
Mark Reichman: Very welcome Thank you Mark.
Mark Reichman: Thank you.
Speaker Change: Your next question comes from the line of Keith Sullivan from Maxim Group. Please go ahead.
Keith Sullivan: Hi, Thank you good day.
Speaker Change: Peter referred to.
Speaker Change: <unk> and <unk>.
Speaker Change: By their purchases and then some other some of your comments about the coal trade.
Speaker Change: Any impacts from what's called demand in Russia and Europe.
Speaker Change: Maybe the overall complex.
Speaker Change: <unk>.
Speaker Change: Higher demand in General Asia for Paul.
Speaker Change: Good morning, Dave. Thank you about coal trade, we're generally very optimistic about coal trade.
Speaker Change: Altogether.
Speaker Change: President Trump's.
Speaker Change: It has many times I mentioned that coal is expected to drive a lot of the increased energy needs.
Speaker Change: For data centers.
Speaker Change: All other things associated to energy in the near future. So we're very optimistic about coal.
Speaker Change: There is a lot of <unk>.
Speaker Change: <unk> building capacity of coal fired power plants globally more than 100, Gigawatts of new energy production driven by coal. So overall, we don't see coal demand subsiding anytime soon but we feel that coal will continue to rise in the near future.
Speaker Change: That's fine.
Speaker Change: To confirm.
Speaker Change: Two quarters, yet year to date are there any indications of Chinese companies building or flattish.
Speaker Change: Fine.
Speaker Change: Alright, great.
Speaker Change: So can you. Please repeat the question because you were breaking up.
Speaker Change: Oh, just newbuild activity due to euro orders year to date period ultimately.
Speaker Change: Yes, it's very limited.
Speaker Change: A lot of factors leading to that there is uncertainty about Chinese built ships and also all the slots that could otherwise built capesize operated much.
Speaker Change: Taken until mid to end of 2028, so we don't really see any immediate threat for new buildings coming into the market.
Speaker Change: For many many quarters looking forward.
Yes. Thank you.
Speaker Change: You're very welcome. Thank you.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of loss either from Arctic Securities. Please go ahead.
Speaker Change: Thank you for taking my question.
Speaker Change: Good morning, it's a pleasure good afternoon.
Speaker Change: And so I have a question regarding the market outlook.
Speaker Change: As you all know Theres a lot of stuff going on.
Speaker Change: Gail Collins with China connecting to GDP growth target of 5% or announced this week.
Speaker Change: Trump of course, what kind of developments are you monitoring the closest and what do you think to have the most what do you expect the most impact moving forward.
Speaker Change: Near term.
Speaker Change: Well, it's a combination of events as I mentioned in the previous.
Speaker Change: Questions, we don't really see any problems with demand and we haven't really seen any problems with demand for the last two three years since 2023, 24 and 25. It appears that demand for raw materials will continue to be very strong even though you had bankruptcies in China from the real estate developers and all these things.
Speaker Change: They still reported 4% to 5% more raw materials in the previous year. So demand is not an issue.
Speaker Change: At the same time supply appears to be quite contained we were not expecting the big price differential between <unk> and <unk> immediate drop off that comes out of Max's and second hospital for last year and I don't think that everybody did.
Speaker Change: Given where the futures and the estimates were in June May and June last year. So second half was extremely weak and that is what.
Speaker Change: Pull down.
Speaker Change: The Cape sizes by splitting the cargoes of the Capesize in the coming months.
Speaker Change: It's always about the supply so when you have increases of effective supply. This is what.
Speaker Change: Makes the market appears to be weaker also if we come to a full blown trade war globally, which would give it a very small percentage as a probability if we come to that then we may see a temporary.
Speaker Change: A reduction of overall global trade, but this is not going to affect capesize is going to be affecting all segments of shipping altogether in global trade. So I hope it will not come to that and I believe that the.
Speaker Change: Inertia of the global.
Speaker Change: The increase of the GDP is unstoppable and I certainly hope that we will see strong demand for raw materials going forward.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: There are currently no further questions I will hand, the call back for closing remarks.
Speaker Change: Well, thanks, once again, everyone for participating in our call and looking forward, we will be updating you soon with further developments in blue we look forward to a better market for the remainder of the year. Thank you very much and have a great day, great afternoon wherever you are thank you.