Q1 2025 Cmb.Tech NV Earnings Call
My name is Alexander <unk> I'm, the CEO of <unk> music.
I'm joined here today by my colleagues.
<unk> and <unk>.
We want to focus on our first quarter numbers, the financials and the highlights.
We also want to say few words about the same be taken Golden Ocean proposed merger.
We will say a few words about the decisions that were taken at the <unk> meeting a couple of weeks ago, and then zoom in on a different marine divisions and give you an update on where the market is to end as usual with the conclusion and time for questions and answers.
Ludovic: I would like now to hand, it over to our CFO ludovic.
Ludovic: Thanks, Alex and good afternoon everybody.
Ludovic: If we look at the Q1 figures of 225, we ended the quarter with a profit of a roughly $40 million excluding capital gains we would've resulted in a net income of minus $6 million.
Ludovic: These figures is that for the first time, we consolidate golden Ocean from a balance sheet perspective end of March but from a P&L perspective, we consulted as from the <unk> of March. So the figures include 19 days of Golden Ocean P&L My.
Ludovic: You Theres different depreciation models. So it is sometimes not a very easy to lucrative figures.
Ludovic: We have liquidity and have a march wouldn't seem to take a $345 million. Our contract backlog has been highlighted in a previous business updates Mr. We're reaching close to $3 billion very proud to say that we've added the rafi.
Ludovic: $1 billion in the first quarter, the Capex still remains at $2 2 billion and our equity on total assets wouldn't seem to take ended the quarter with 31, 9%.
Ludovic: Damian on the highlights.
Ludovic: We've mentioned the profits are the most important transaction, obviously was CME take buying the humans taken Golden Ocean, followed by an increased on open market transactions, which resulted in a term sheet signed for a merger transaction between <unk> and Golden Ocean on the business side. We've added two important long term contracts.
Ludovic: One with Ford is Q4, a new ammonia power Newcastle Mikes and then a.
Ludovic: Big Landmark agreement, we signed with the M oil Japanese company for three Newcastle Max's ammonia powered and six.
Chemical tankers that are ammonia already an ammonia powers <unk>.
Ludovic: <unk>, our strategy of diversification and decarbonization by taking delivery of five new building vessels, we had the four dry bulk vessels and one <unk>.
Ludovic: CTV.
Ludovic: At the same time, we decided not to declare a dividend for Q1 2025.
Ludovic: On the right side, you can see that in the divestment program. We've sold three Vlccs are where we're going to launch a close to 100 million dollar profit of capital gains are in the two next quarters.
Ludovic: And we have finalized the delivery.
Ludovic: Of the couple of IRA and the zest and <unk> six.
Ludovic: Which was the capital gain of $46 million in the first quarter.
Ludovic: And the contract backlog I had mentioned before.
Ludovic: The fleet on the water today stands at 113 vessels with another.
Ludovic: 46 Newbuild coming.
Ludovic: You can see that by the end of the year will be at 131 ships and then growing until the end of 'twenty six to roughly 150 vessels.
Ludovic: Zooming in on the P&L break evens the achieved earnings in rates in the first quarter and the anticipated earnings.
Ludovic: Quarter to date on the Q2, we can see the tankers are we have a good first quarter with an average of $40000 per day.
Ludovic: <unk>.
Ludovic: Second quarter to date, we're roughly $43000 per day on the brokers, we had a somewhat weaker first quarter, resulting in our a new cosmetics is earning $80000 per day.
Ludovic: Q2, we are up at $24000 the container and chemical tankers are mostly long term contracts, which are fixed at good rates and we do see an uptick in the earnings on our cities in the offline market.
Ludovic: This is an overview of the contract backlog that is well known to you with a notable additions of the chemical tankers on the floor and as tree ready ships in two industry fitted but also very happy to show the 12 year contracts, we had on the new customer mix.
Ludovic: Both vessels upon delivery.
Ludovic: I'll hand, it over now to Alex to discuss further the proposed merger between CME taken Golden Ocean.
Ludovic: Ludovic.
Speaker Change: Our zoom in on what we have already discussed on our capital markets day, which is indeed, a proposed merger between <unk> and Golden Ocean to.
Speaker Change: To create a leading diversified maritime group.
Speaker Change: On this slide you can see in one slide what the transaction entails.
Speaker Change: If the merger is approved of fleet would grow to 250 vessels about 200 on the water plus 50 new buildings.
Speaker Change: <unk> backlog as already mentioned would be $3 billion roughly one third of the fleet will be powered by ammonia or hydrogen and we.
Speaker Change: Would have an average age across our fleet of six years, So very young fleet.
Looking at some financial metrics of the proposed merger the total fair market value of the fleet would be $11 $1 billion, we estimate our NAV per share of close to $15 per share if the merger is consumed.
Speaker Change: Next commitments will not change too much because golden Ocean does not really have an order book, so that such Sim stands at $2.2 billion.
Speaker Change: Then we would have a listing of <unk> in New York NYSE in Brussels, Euronext, and we would apply for a listing on Oslo burst to FCB take listed in Norway as well.
Speaker Change: You can see at the bottom of the slides the fleet overview with the notable change if the merger goes through of adding 91 vessels to our Drybulk Division, which in one go will then become the biggest division in our group.
If you look at some of the open days and six days of statistics. There is a lot of information on this slide but I wanted to highlight the total number of days for 2025 that is assuming Golden Ocean Ncnb Techs together also for the whole year would be 55000 days.
Speaker Change: Yes.
Speaker Change: If the merger goes through in 2026, we would have 62400 days combined of which one eight will be covered by time charter contracts.
Speaker Change: We have it in the slides following some questions.
Speaker Change: Analysts on what's a pro forma free cash flow could look like for both companies over the year 2025 at the bottom of the slide you can see some of the sensitivities we have applied.
Speaker Change: Sensitivities are mainly applied on the open days.
Speaker Change: In the tanker Division Europe, and then the Drybulk Division <unk> combined with Golden Ocean.
Speaker Change: Can see that we have kind of a mid case forecast that the case.
Speaker Change: Set for Vlccs and Suezmax is around $60000 a day for Newcastle accident Capes at 26, and a half and four comes out marches on Panamaxes at close to $14000. We then deduct 20% to have a low case at 20%.
Speaker Change: Our high case and what is under conclusion is as you can see that for the year in the low case, we would have a free cash flow generation, excluding any additional sale of vessels of $250 million a high case at $750 million and our base case at half the $1 billion. This year you can also see on this slide.
Speaker Change: This is of course, a very heavily skewed towards our VLCC and suezmax segments, and our Cape size segments.
Speaker Change: I would like now to hand, it over to <unk>, among our head of Investor Relations to talk about the impact of the <unk> 83, the meeting at the EMA that was talking about greenhouse gas emissions noise over to you yes. Thank you Alex.
Speaker Change: Heart of CMV thick strategy Decarbonization is really important now decarbonization is either supported by self imposed targets by our clients by our charterers are on the other hand by the regulation that is already in place. Today. For example, surely you Maritime started gen. This year U Etfs, which started.
Speaker Change: January last year, and then now really supercharged by <unk> 83, which was initially voted a couple of weeks ago and will be.
Speaker Change: Sorry forward in October of this year.
Speaker Change: Now it may be see 83, if you look at the regulation on the next slides.
Speaker Change: From a framework perspective, there are some key items that you really need to think about if you see 80 trees about surely density. So it looks out to the intensity of ships fuel usage. So slow speeds are slow steaming will not help.
Speaker Change: In order to improve your intensity of your fuel you'll need to blend in either a biofuel or use other low carbon sources.
Speaker Change: The engine of the vessel now it is.
Speaker Change:
Speaker Change: Implementation, where we have the green is the direct compliance tier so meaning that for example in 2028, if you reduce your fuel intensity by 17% during diet compliance and you do not need to pay any penalties. If you go further you can even pool or bank those additional units by your.
Speaker Change: Oprah compliance now there are two other tiers and those tiers to build deep analyze do have tier one deficit.
Speaker Change: Is when you do reduce your fuel intensity by 4% in 2028, you will only need to pay $100 per ton of steel to equivalent on a regulatory basis and if you do not achieve this minus 4% you will need to pay a tier two deficit, which is 300.
Speaker Change: U S dollar per tonne of C. O two equivalent do mind, that's one ton of fuel is actually your meeting three tons of Cotwo. These are hefty penalties, which increased over the years between 2028 and 2015 now on the next slide we made a translation.
Speaker Change: What does this actually mean on the fuel price that an owner needs to pay for so the left hand side of the graph is showing the U S dollar per ton or equivalent now there are two major tipping points that you can see on the graph in 2032 buying either as a whole.
Speaker Change: Then that with biodiesel or all of their whole where the low carbon fuel like for example, ammonia will be at par so meaning that in 2032 and own the real pay the same amount, including all the penalties and the fines for low sulfur fuel oil biodiesel blend our low sulfur fuel oil with an update.
Speaker Change: Of Green ammonia, a second important tipping point is 2038, where you can see that this is the first year there.
Speaker Change: The dual fueled ammonia ship will have a lower bunker bill compare to an LNG carrier or or an LNG fueled engine or an ela devaul with biodiesel blended engine now it's important to take into consideration our into mines, we have fused several forecasts here so availability of.
Speaker Change: Fuel pricing of fuel, where she was here to Maersk Mckinney Miller institutes of decarbonization to define these cost and it could mean that if the availability of ammonia is bigger and cheaper that those tipping points either move forward or in the bad scenario.
Speaker Change: A bit further down the line now this shows the impact on the fuel costs on a per day basis.
Speaker Change: If you order today ship, we are lucky to have it delivered by let's say 2028, and then we need to operate that ship throughout the next 20 years throughout its entire lifecycle and here it becomes really clear that ordering today are dual fuel ammonia power chip does payback over the life.
Speaker Change: Of the ship, we made a comparison over ship delivered 2028.
Speaker Change: Operational until 2048 and that added all the fuel cost, including all the penalties and the PC 83, and there you see that there is a positive case.
Speaker Change: For low sulfur fuel blend that with a low carbon.
Speaker Change: Net of roughly $17 million compared to either buy or diesel blend our LNG blend with biomet team, making the case already today to order a dual fuel.
Speaker Change: <unk> ammonia powered vessel.
Speaker Change: Thank you you as is very clear.
Speaker Change: I would like now to take you to the market updates throughout all our marine divisions.
Speaker Change: And starting with a general overview on supply demand per division and where we feel the market is.
Speaker Change: The tankers, you will see that the growth in ton miles for crude oil is relatively flat forecast for this year and next year.
Speaker Change: At the same time, the order book to fleet still sits at historical low levels and the age of the fleet is still increasing on balance even with a flattish demand. We think that's the supply side of things is looking good and we are a positive for the crude oil markets. We have today 22.
Speaker Change: On the spot market and eight ships that are on time charter two ships coming on the new building side, which are also chartered.
Speaker Change: Moving to dry bulk this year it looks like to be a kind of a muted year relatively flattish definitely the first half of the year, we are seeing demands.
Speaker Change: Relatively under welding, but we do expect a definitely specifically for Cape sizes ton mile demands to increase.
Speaker Change: And again the same story as for tankers. The order book to fleet looks interesting because we are at historical lows around seven 8%.
Speaker Change: Definitely for the Cape sizes, and we see that the average age of our fleet is going up as well in conclusion. We are positive for Drybulk. We have today 14 vessels on the water that is of course, excluding the golden Ocean fleets, which might be added when the merger or if the merger is approved later in Q3.
Speaker Change: On the container side a lot has happened over the last couple of months are the two major issues, where the tariffs that were imposed by the Trump administration in the U S.
Speaker Change: Tariffs on tires off we will see what it will be in the second half of this year, but it's important to highlight that 8% of Teu miles have fallen under the tariffs.
Speaker Change: Now being suspended but we will not have to see what comes next the second big developments is a possible peace deal with the route is in Yemen, which would stop the attacks on merchant ships in the Red Sea if container vessels go through the Red Sea again, we will see a teu miles go down.
Speaker Change: Which again would not really be positive.
Speaker Change: <unk> trade.
Speaker Change: And with a relatively high order book.
Speaker Change: Which stands around 30% for the container signs on the short term one to two years we are.
Speaker Change: <unk> will of course as a company always looking at opportunities, but right now we have zero ships on the spot market all our ships on charter for our on the water and one is coming next year.
Speaker Change: Chemical tanker trades, we have moved our opinion to being a bit more cautious we are seeing product tanker, specifically MLR tankers come into the market, but the order book to fleet is reasonable, but we see that demand is not so very high and with the product tankers coming into our markets.
Speaker Change: This has put some kind of downward pressure on rates. This being said the vessels that we are operating on the spot market are still earning close to $20000 a day, which is definitely good.
We have another four ships on charter plus 10 vessels coming which are all fixed on long term.
Speaker Change: Finishing with offshore wind are seeing very healthy growth on the European market in terms of new offshore wind projects.
Speaker Change: With a 15% this year, 22% next year as expected we are seeing the CTV and this easily fleet growing as well, but in balance. We believe there is more demand for our ships then there will be supply of vessels. So we are positive for our ctv's and seasonal fees.
Speaker Change: Zooming in a bit more in detail on your NAV in the tanker markets.
Speaker Change: You can see what we have earned on the spot market for Vlccs and Suezmax. This in Q1, $35000 and $41000, which are good and healthy rates.
Speaker Change: For the second quarter, we have already fixed the rates as we have highlighted in <unk>.
Speaker Change: Our earnings release 40, thousands of four Vlccs at 42004, Suezmax just about two thirds of the days have already been fixed.
Speaker Change: When we look at some other highlights in euro and I've already mentioned by Ludwig We sold three Vlccs, which we'll deliver in Q2 and Q3, a capital gain of $100 million and then we finally delivered to their new owners.
Speaker Change: Some vessels.
Speaker Change: <unk> and <unk>.
Speaker Change: <unk> generated a profit of more than $45 million a lot of indicators on crude oil demands are positive.
Speaker Change: A little bit lower than what we would've hoped for.
Speaker Change: If we look at the long term markets are attractiveness of tankers. We believe it's positive the aging fleet, the low order book and <unk>.
Speaker Change: Even with global GDP, which has been corrected downwards, a bit we still see positive oil demand growth we.
Speaker Change: We do see a disconnect between the oil that will be produced in the ore that will be consumed usually that is a positive for tankers.
Speaker Change: Because more will be stored can be stored on tankers.
Speaker Change: And that should increase demand for our ships.
Speaker Change: Wrong.
Speaker Change: We believe that any change to the status quo could be positive if sanctions increase only wrong, we will see more oil being moved on conventional tankers from other areas like Saudi Arabia. If sanctions are relieved only wrong, we believe and hope that's the dock street will be pushed away by conventional tankers. So by both.
Speaker Change: Cases, a change to the status quo would be positive.
Speaker Change: And then Opex a lot has been said and written about what we see we've.
Speaker Change: We've put a little recap for those who can follow anymore on what's happening in OPEC plus on the left side of the slides you can see that there were group cuts voluntary cuts a first move voluntary gets a second move.
Speaker Change: A lot of talk about unwinding.
Speaker Change: Voluntary cuts happened last year and the year before but we saw that they were basically postpones continuously so volumes were not being increased opex and then in December we could start seeing that the narrative was changing to a gradual unwinding of the cuts so adding some.
Speaker Change: Barrels to the market, but at a very low level and then suddenly.
Speaker Change: You can see that things accelerated whether or not that has to do with the Trump administration talking to some of the OPEC members.
Speaker Change: Definitely there is a lot more movement in terms of announcing more volumes to the market in April was very slow we haven't seen it yet but.
Speaker Change: But we are seeing some pickup in may and it should if the full $2 2 million barrels will be unwound continue to add volumes all the way.
Speaker Change: Until November, which again will definitely be positive 40 months the flip side of those things of course is that the oil price has tanked and when you look at the forward curve you can see that there's been a big movements.
Speaker Change: The forward curve.
Speaker Change: And that prices are expected to be lower.
Speaker Change: Now I want to pause to Drybulk bus EMR and the dry bulk markets.
Speaker Change: Before we have 14 ships on the order of our new customers like new buildings is another 14 coming this year and in 2026 and two ships in 2027, we still have five ships to deliver this year.
Speaker Change: The first quarter.
Speaker Change: On Drybulk.
Speaker Change: Was traditionally slow we made earnings of $18400 on a Newcastle Max fleet, which is below our P&L breakeven, but we have seen our bookings for the second quarter a pick up again, we have about three quarters of our days already fixed at $24000 a day all ships all vary.
Speaker Change: Our ships are very economical and efficient so we are outperforming.
Speaker Change: We'll take our five T C.
Speaker Change: 40% of course, our ships also have more intake than the classical one capesize two very important deals were signed in all dry bulk division. During the first quarter are the deal with <unk> for three ammonia power new customer mixes and then the deal for one chip.
Speaker Change: Fortescue.
Speaker Change: You can see that on the indicators for dry bulk seaborne trade there are some positives some negatives overall, we believe that the balance is positive.
Speaker Change: We're highlighting a couple of key trends short term key trends, we see that the Atlantic iron ore trade.
Speaker Change: Out of Brazil for instance, Ah.
Speaker Change: Is positive you can see the trend lines on the left side between 2022 and 2025, we are above previous years.
Speaker Change: We are coming in the seasonally stronger second half of the year.
Speaker Change: Where we see that the weather related disturbance or going away drier weather means more exports can come from the Atlantic Basin, which again should be good for the drybulk market in general and specifically for Capes and Newcastle boxes.
Ginny: Ginny the West African trade is a very important trade AR has a tremendous increased over the last seven to 10 years to a very significant volumes as you can see on the slides again volumes have been very strong, but we're expecting that volumes will continue to pick up as the year proceeds and this is again.
Speaker Change: Long haul good ton mile trade out of the Atlantic flip.
Speaker Change: The flip side is that the Australian iron ore trade has disappointed somewhat mainly.
Speaker Change: Mainly weather related we expected when these weather disturbances have gone away that we will see more volume coming out of the Pacific on iron ore.
Speaker Change: Long term drybulk market trends are is on the supply side and aging fleet.
Speaker Change: Low order book, but something we are going to continue to highlight as well is that over the next three years one quarter of the fleet will have to undergo a special survey and that will create a crunch on capacity because all these shifts will need to go through there are second and third special surveys and will be taken out of.
Speaker Change: The markets for a longer period of time, so on the supply side things are still looking very good on the demand side I said in general the dry bulk trade has been slow so far this year, but when we look into the pockets of growth that are important for our larger it kicks out of Newcastle Max fleet being iron ore.
Speaker Change: It is looking very positive for all the reasons that I already just mentioned, but we do see our support on the coal story, specifically for India, and China and then for the smaller sizes, we see the grain trade is still growing very healthily.
Speaker Change: Of course, adding the Golden Ocean fleet to this story will only be beneficial we believe for.
Speaker Change: <unk> and Golden Ocean going forwards.
Speaker Change: The long term view for all keeps a new custom axis is that even though things have been relatively slow in the recent months, we see a stronger second half of the year and definitely a strong 26, probably even 2027 that will translate itself into much better utilization rates on our fleet better utilization better.
Speaker Change: Utilization will mean better rates for our ships.
Speaker Change: And then wrapping up with all three smaller divisions smelting with doses on the container side already mentioned the two key trends on the Red Sea and the tariffs as you know we don't have any spot exposure in the office some.
Speaker Change: Some people have asked us when we would start reinvesting in container vessels. It is definitely on our agenda, but we want to wait the right moment in the cycle and so far as we said we are cautious because of the high supply of ships coming and some of the positive demand drivers unwinding this year and next.
Speaker Change: Zooming in on the chemical tankers.
Speaker Change: I already mentioned the key drivers there the amount of tankers coming into our markets. When you look at our results even though the spot rates are slightly lower than they were last year. We are still seeing a very good rates. We were very satisfied with the performance of our spot fleet and again the majority of our fleet is fixed on long term charters.
Speaker Change: Ending with the ease of use this as a very recent picture taken Ah was Ah in Vietnam two weeks ago.
Speaker Change: So not only one but.
Speaker Change: Three of our beautiful ships, then you can see them. There one is already nearly ready which is the wind cut Rotterdam, but we have the wind catcher Amsterdam and wouldn't get hogland, which you can see at the left side of the slide which are already a float being finished for delivery later this year. So these three she's movies.
Speaker Change: We will deliver this year and maybe early next year.
Speaker Change: The key trends in offshore wind, but also oil and gas because these vessels can also trades in the oil and gas rates is that we see very good growth in new projects in Europe, which is our main market.
Speaker Change: But we also see that pharmacies are is demand is starting to pick up in Asia. So do not be surprised if one of our vessels would be fixed in Asia. Once you delivered from the yards in Vietnam.
Speaker Change: That wraps up our market updates we have added the slides are all still very extensive order book of 43 vessels you can see the ship types and the delivery dates are in this presentation, but I will not dwell into too much detail on that I would rather.
Speaker Change: For your attention for the first part of the presentation and hand, it over to India.
Speaker Change: Two deep Q&A, maybe before I do that just concludes.
Speaker Change: One points on each of the three points, we have added there.
Speaker Change: The term sheets with Golden Ocean of course, I think the main events of the quarter.
Speaker Change: Our portfolio, having added $1 billion of contracts is a strong highlight for the quarter as well and as we said we have not really changed our view on our different sub segments and markets.
Speaker Change: Definitely we are bullish on the tanker side and on the dry bulk side as well as exemplified with our investments in Golden Ocean.
Speaker Change: And yet over to you, yes, they will now start the Q&A.
Speaker Change: Want to ask a question. Please raise your hands and if I call your name at least and youth and also introduce yourself.
Speaker Change: So asking a question.
Speaker Change: If you are dialing in from a telephone we just the number you have to press star five to raise your hand and sorry.
Speaker Change: Good.
Speaker Change: Of course, if there's any problems a new thing you can also ask questions in our Q&A section or and connectivity.
Speaker Change: After this call.
Speaker Change: And I will now Oh, okay.
Speaker Change: And you May now and you then ask your question. Please.
Speaker Change: Yes.
Speaker Change: And herein.
Speaker Change: Perfect.
Yeah, Thanks for the slides on that.
Speaker Change: D C entity actually that suggested we shouldn't call. It I M O attempted to update which is easier to remember.
Speaker Change: Hmm.
Speaker Change: And then he did it I mean, it's.
Speaker Change: Somewhat.
Speaker Change: The Bolton I am all the time to time through which many people remember right because then.
Speaker Change: The industry were supposed to move out of high sulfur fuel oil into the.
Speaker Change: <unk> right now and sometimes death.
Speaker Change: We are supposed to move out of a VNS a phone so.
Speaker Change: The solution is of course, a dual fuel.
Speaker Change: Right and that that's where you come in and they are I think humana.
Speaker Change: Compelling argument.
Speaker Change: That's a very profitable so maybe you could talk about your ammonia solution on.
Speaker Change: Uh Huh I guess, you have some red deer ships and some that are being baked it and Jim says all right. So if you can talk a bit about that.
Speaker Change: Okay.
Speaker Change: Ah you're always has highlighted we are very positive about the decision that was taken at the idle. Some people think it wasn't an ambitious enough.
Speaker Change: We would say that the glass is half full it's a very strong step towards pushing people to having dual fuel engines and to start analyzing what is the best fuel of choice.
Speaker Change: Over the last couple of years, there's been a lot of debate about LNG about methanol about ammonia about hydrogen if.
Speaker Change: If we put all the data next to one another.
Speaker Change: And of course with the caveat that this still needs to be ratified in the month of October but if it goes through in October.
Speaker Change: The story is very clear.
Speaker Change: I want to order a ship today.
Speaker Change: Ammonia is the way to go.
Speaker Change: If you want to operate the ships today, which is already on the water ammonia will be the way to go latest by 2032. If your alternative is diesel and 2038. If your alternative is LNG with one very big important remark.
Speaker Change: We are using ammonia prices from.
Speaker Change: From the Maersk Center for Decarbonization.
Speaker Change: Ammonia prices their citizen equivalent of above $2000 of diesel.
Speaker Change: Diesel equivalents, we are seeing prices now being quoted to us for green ammonia that are much closer to $1000 per tonne, meaning that it would advance these deadlines.
Speaker Change: <unk> much earlier, maybe 2029 2030, and then on the LNG competition 2030 to 2033.
Speaker Change: All in all we are very very positive about the developments at the <unk> in our we call. It they may be see 83, but indeed, we should call. It <unk> 2028.
Speaker Change: What does this mean for our company one what you are seeing already people are contacting us for the vessels that are fully ready with ammonia engines that we are engaging with our customers now more and more and as you can see we already signed some contracts.
Speaker Change: Going forward for the fleet, which is ready to be retrofitted.
Speaker Change: We anticipate as well to have some very interesting discussions with customers on existing ships put them through a dry dock and potentially retrofit because now they suddenly have the visibility, but where does deadlines are and how they could lower their fuel bill and operating compliance with IMO 2028, and whether that retrofit doesn't happens in June.
Speaker Change: Three years from now already now that is of course, something we will discuss with our customers conclusion for US is the business case, we have built up over the last couple of years is strengthened thanks to the Idaho.
Speaker Change: S N anti very interesting.
Speaker Change:
Speaker Change: Another question I had as I had to start on the pro forma free cash flow. That's a very interesting just a clarification is this including debt.
Speaker Change: Debt repayments.
Speaker Change: Yes, that's including debt repayments.
Speaker Change: Excluding capital commitments to the yards.
Speaker Change: It has been a topic that analysts and investors have asked US. Okay. So we have a big order book.
Speaker Change: We always put in mind, roughly 900 million to 1 billion every 12 months need to be paid at the yards.
Speaker Change: Roughly $250 million.
Speaker Change: Per year it has to be funded to fulfill that capex commitments that is out of equity equity, we say operational cash flow, which we've tried to highlight here or sale of vessels. What we have tried to put on the slide is that even in a somewhat more bearish scenario compared to our average forecast.
Speaker Change: Of minus 20% on the under the base case, we still generated $250 million.
Speaker Change: Of excess cash flow, which was already much whit.
Speaker Change: The unfunded Capex that we have on a yearly basis now does it even excluding the.
Speaker Change: The excess cash we have on sale of ships you have seen the tree shifts we've sold it's fundamentally not in P&L, it's actually even more on cash that would come in on the ships and so that is the second buffer with market spot rates go even below our worst case scenario, obviously, we still have the.
Speaker Change: Capital did your excess cash or sale of vessels two funds.
Speaker Change: Thanks.
Speaker Change: Okay.
Speaker Change: Great that's very useful.
Speaker Change: I guess.
Speaker Change: In 2010 to six you'll have more vessel days on the capes right.
Speaker Change: That should actually be.
Speaker Change: It even better.
Speaker Change: Yes, assuming similar cash breakeven rates for next year right.
Speaker Change: This is correct I mean this is a one of the slides you see that in 2026, we have roughly 62000 ship days from which 12% so at one eight.
Speaker Change: As a long term contracts I E more than 88%.
Speaker Change: Is on the spots for which half of that as brokers.
Speaker Change: You can you can quickly calculate what the.
Speaker Change: Cash generation.
Speaker Change: It could be if we hit $26 on average anything above that is obviously the straight to an excess cash flow.
Speaker Change: Perfect. Thank you. Thank you guys.
Speaker Change: Thanks.
Speaker Change: Hey, Nick its Keith.
Speaker Change: You can now and you can ask your question.
Speaker Change: Yes.
Speaker Change: Afternoon, everybody maybe first also on.
Speaker Change: Marine teams at ammonia.
Speaker Change: You have a partnership with <unk> for the engine just remind me is that an exclusive partnership and in terms of.
Speaker Change: The timing of the technology to the market how does it compare to.
Speaker Change: Two competitors.
Speaker Change: And on the long term charters with mol.
Speaker Change: And do you already have some kind of visibility for what trade lane stake would be used screen corridor or whether it's monthly point to point or not.
Speaker Change: The first stock of my question and then Anne.
Speaker Change: Hum.
Speaker Change: [laughter] yards.
Speaker Change: Regarding.
Speaker Change: The port cost for channeling vessels.
Speaker Change: You see or do you expect significant changes.
Speaker Change: Delivery schedules because of potential consequences.
Speaker Change: Regarding slots in shipyards do you see or expect.
Speaker Change: Issues with capacity being reserved program defense August thank you.
Speaker Change: Okay. Thanks.
Speaker Change: Yourself.
Speaker Change: So just on the on your questions on ammonia and when G. D. We have a partnership with when you D. The Windsor Deacon perfect sell ammonia engines to our other people. Obviously they are delivering the first engine to us and this is why we are engaged on that partnership so there's no exclusivity there.
Speaker Change: We can also work with the other supplies like M. A N on ammonia engines I will always choose the best supplier for the best engine in terms of when the vessels will be ready.
Speaker Change: First engine will be ready after the summer as you know we will take delivery of the first fully fitted ammonia vessels in January of next year. So that is one of the very first.
Speaker Change: Ammonia, Newcastle Max and the World will be delivered and then we will take delivery of another seven in 'twenty six one container vessel and then on rigo, 27th and <unk>.
Speaker Change: <unk>.
Speaker Change: On the <unk> the <unk>.
Speaker Change: Trade Lane.
Speaker Change: We'll put the vessels on has not been defined yet, but typically it will be either Australia or Brazil. The two main trade lanes, but they might send them to Africa as well to Europe that we don't know yet so and so no decision has been taken yet.
Speaker Change: Where that vessel would be deployed.
Speaker Change: Some of the other questions on the shipyards, you mentioned that the impact of U S. T. R. I think in general to yourself.
Speaker Change: The USTR is still too early to say.
Speaker Change: We only know what has been publicly stated.
Speaker Change: But we also know that these things still have to be clarified a lot of us shipping lawyers still don't even.
Speaker Change: Fully know what the impact will be on leasing eventual ownership.
Speaker Change: So we still need some clarification.
Speaker Change: There we do feel is that obviously there is somewhat of a.
Speaker Change: Reluctance from ship owners to go to a shipyard in China.
Speaker Change: Cause of D. A.
Speaker Change: 10 show the impact of the USTR and so that is definitely something that we're seeing right now and then we have to say that it will probably be more on certain specific ship types for instance, container vessels, there will be more harder hit.
Speaker Change: And then other ship types, because there are quite a few injunctions, but it doesn't really make sense, it's still a little bit too early to assess the impact for preliminary assessments for all group is that it will be a very limited impact on your question on defense capacity being reserves. So that's yards are not marketing the burden that they have I would say we are not.
Speaker Change: Seeing that we are not seeing that shipyards commercial shipyards are still promoting their slots to different ship owners.
Speaker Change: Okay, and then can you comment on recent press rumors on CMV.
Speaker Change: Potentially altering what you'll see seem to.
Speaker Change: Suezmax is on the two options for consumers matches.
Speaker Change: I can be very clear on shortly about that we have not ordered these vessels.
Speaker Change: And rumors fly because obviously people know that we are constantly looking at opportunities.
Speaker Change: But we have not sought order to anything yet.
Yeah.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: He then.
Speaker Change: Sure.
Speaker Change: And you can ask your question.
Speaker Change: Hello, My name is Nick Kumar I'm, a private investor with a strong interest sitting in hydrogen.
Speaker Change: Yes Christians first of all could you. Please provide a brief update on the progress of your own upscale hydrogen and ammonia project in Namibia.
Speaker Change: Yeah, especially regarding the ammonia terminal and PV to fuel industrial production timeline.
Speaker Change: And defer the second <unk>.
Speaker Change: The recent major investments and fleet expansion and Golden Ocean do these investments.
Speaker Change: <unk> pose any risk to the funding or focus for your hydrogen and ammonia on infrastructure projects.
Speaker Change: Thank you.
Speaker Change: Thank you very much on us.
Speaker Change: So indeed as you can see we have not given a U and a clear update on what is happening in Namibia that is because so far.
Speaker Change: There's not been a lot of news to be announced so far what we have in Namibia is we have a hydrogen production station.
Speaker Change: Which is being completed as we speak we hope to start of production of our first hydrogen molecules very soon.
Speaker Change: Will be followed.
Speaker Change: By possibly a small scale ammonia production plants as well and indeed, you referred to the ammonia terminal project. We are full busy now we're doing the detailed engineering for our ammonia tank terminal in the Woolsey space and hope that in the following months, we can give more update on that but that's.
Speaker Change: Perfect is still very much alive it's.
Speaker Change: It's just that there's a lot of engineering work being done now so not really any commercial update we can give them that it's a little bit too early.
Speaker Change: You mentioned the PV two fuel project debt.
Speaker Change: We are also investing in Namibia.
Speaker Change: <unk> done on the tank terminal still doing a lot of engineering, securing the land plots, but proceeding as per plan and.
Speaker Change: And hopefully when we have something that we can announce we will definitely communicate that to you.
Speaker Change: Wanted to recap.
Speaker Change: I don't Philosopheme, Namibia is that we want to start with very clear projects that work.
Speaker Change: Showcase it to the markets that it can be done in Namibia supplies to local users local applications and then build and increase the scale gradually as we proceed. So this will be a theme that will definitely a mixed earnings calls come more and more as.
Speaker Change: And when we have a more meaningful things to announce but that's still very much on the agenda, maybe just to add to their because quite some investors and analysts have asked what this translate to towards Capex.
Speaker Change: And the next earnings call, which will be end of August we will have a dedicated slide also not just on our philosophy of why are we doing it but also on the committed capex.
Speaker Change: So that people can can have a clear view on that and their news to your point on the if we are investing in Golden Ocean does that mean that we have less money available for that midyear I would say to the country I believe that if the merger with Golden Ocean goes through we will have a much bigger balance sheet.
Speaker Change: Much more liquid share much.
Speaker Change: More access to different buckets of capital and financing. So I think that the Golden Ocean transaction will assist us in accelerating all projects in Namibia, rather than putting us on the back step. So we do believe that the Golden Ocean transaction on the country will help us to continue our investments in the production of molecules.
Speaker Change: I hope that answers. Your question gives so much sounds very interesting okay. Thank you.
Speaker Change: So very much.
Speaker Change: The next person it's a clear plan you may now and you didn't ask a question. Please.
Speaker Change: Hello. This is T Y Kilian can you hear me.
Speaker Change: Yes, yes.
Speaker Change: Alright.
Speaker Change: I'm going to have to ask some hard questions. So.
Speaker Change: I have listened attentively to all of your moves and.
Speaker Change: There are a couple of.
Speaker Change: Unsettling.
Speaker Change: News that I heard today.
Speaker Change: So one of the things that I am not convinced that it's going in the right direction is your dry bulk.
Speaker Change:
Speaker Change: What are your plans to improve your.
Speaker Change: Revenue.
Speaker Change: That sector. Besides put aside the merger the proposed merger.
Speaker Change: And.
Speaker Change: Are you acquiring new C routes or are you doing anything to increase.
Speaker Change: Your exposure on the spot.
Speaker Change: And.
Speaker Change: The next question I'll be asking to Mr. Ludovic, but I want to know what is being done to improve.
Speaker Change: The business.
Speaker Change: Especially on your dry bulk at this time.
Speaker Change: So thanks, a lot for your question Luke.
Speaker Change: The revenue and dry bulk is not something you can control when you're active on the spot market because the market is the market is a very transparent market. It's a commoditized business. What we can do of course is built the best ships. The most efficient ships and based on the freight that we get on the market has a better bottom line than older vessels.
Speaker Change: And I think we have proven that with our Newcastle matches, let's look at our numbers on Q1, you say that theres very unsettling I understand that you are disappointed in how the market was in Q1, but if you just compare with very similar vessels, we outperformed by 40%.
Speaker Change: In a way what are we doing to optimize our revenues. We are building very modern vessels, which in a given freight environments. We're always outperform other ship types.
Speaker Change: The fact that we've added.
Speaker Change: Or are trying to add more exposure to the dry bulk market.
Speaker Change: Is that we really believe that even though for one or two quarters the market might be a bit lower the medium to long term outlook is very promising.
Speaker Change: And they don't want to have a very promising that result, as well do you need to get access to their ships and that is why we invested in Golden Ocean are we adding sea routes as you say we are at their definition active on all the major routes with our fleets and we will be even more active when the Golden Ocean and these are golden.
Speaker Change: The transaction goes through.
Speaker Change: Scale of Golden Ocean.
Speaker Change: Always be something that can also improve our revenues because we also have more flexibility to position our vessels in the right basin and to catch the markets as and when they occur.
Speaker Change: No question.
Speaker Change: Thank you Mr <unk>.
Speaker Change: If at all possible I have a question to Mr. Ludovic.
Speaker Change:
Speaker Change: No.
Speaker Change: Taken into consideration you will report for Q1.
Speaker Change: The E P S.
Speaker Change: Obviously came.
Speaker Change: <unk> below the consensus estimates that's one thing that's understandable because of the market conditions.
Speaker Change: Looking at your peers in the industry.
Speaker Change:
Speaker Change: Almost every single one of them didn't withhold paying dividends, but I see that nothing has been declared and as an investor I think it's one of the most important things for me to know that where are we going with that is that something your supervisory board has.
Speaker Change: Discuss or is that something to look forward to maybe in Q2.
Speaker Change: I'd like to know that as an investor.
Speaker Change: No no absolutely not.
Speaker Change: And I think it's a it's a question we one we get quite lots, but two is heavily debated.
Speaker Change: And any give them meeting we have with the board and with management I think we have currently a fully discretionary dividend policy I think.
Speaker Change: We have changed that.
Speaker Change: From the previous management of previous company, <unk>, where they had a set percentage basis on the profits.
Speaker Change: We believe that with the growth that we're doing in the company.
Speaker Change: The dividend has to follow basically the balance sheet and also the investment opportunities we have.
Speaker Change: We don't like to have set dividend policy is based on net profits.
Every time.
Speaker Change: The end of the quarter, we discussed with the board. We have decided every dollar or are we going to paid out as dividends or are we going to invest in a new building secondhand or buying companies I think in the capital markets day presentation that we've done there which is online as well we're very clearly stated stats within the listed companies.
Speaker Change: The anchor shareholder has been.
Speaker Change: And in controls we have paid a lot of dividends previously so we do like dividends.
Speaker Change: There was a time them.
Speaker Change: When you paid them on average you can say that throughout the last 25 years, we paid 55% of net profits within the company is controlled by our family Symbian CME deck.
Speaker Change: So there's definitely track records that highlights that we do pay dividends and actually last year, we paid quite quite some hefty dividends that we didn't see me take this.
Speaker Change: For the moment and the growth as we are while we're doing a merger while we have a big Capex program I think our the board have decided to for this quarter not to be but it's something we analyze every quarter.
Speaker Change: Okay. Thank you for the clarification I appreciate it.
Speaker Change: Thanks, Thank you.
Speaker Change: And then the next person who wants to ask a question.
Speaker Change: So you can now ask your question.
Speaker Change: Hi, good afternoon, and thank you for taking my questions.
Speaker Change: I wanted to ask about your fleet positioning pro forma for the marriage here.
Speaker Change: Drybulk will represent most of the open days and looking at the medium term are you comfortable with that position.
Speaker Change: And secondly is there any appetite to continue consolidating give her own shipping and a strict.
Speaker Change: Thank you.
Speaker Change: So yes, we are very comfortable having a spot exposure on drybulk.
Speaker Change: <unk> is also one of the reasons, we did the Golden Ocean transaction.
For the reasons, we just explained to you we think that the supply demand dynamics are very positive.
Speaker Change: So going into the second half of this year, we're very happy to address both exposure.
Speaker Change: Adding to that as we've stated before as and when we see that we can take some coverage long term contracts on our existing fleet at good rates is definitely something we will investigate all strategy is being spot oriented in combination with a time charter cover and having a good balance between the two.
Speaker Change: So I think and I think just to add to that if I may.
Speaker Change: Since we are diversified.
Speaker Change: We operate definitely diversified assets.
Speaker Change: Some asset classes will be in a strong market some will be in a somewhat lower market I think what we tried to do is use our contract backlog to two the $3 billion that we mentioned to.
Speaker Change: So eventually allow.
Speaker Change: For the.
Speaker Change: The biggest spot exposure in markets that seemed quite promising with where as of today may be the earnings as we've seen in Q1 for Drybulk are not fantastic in terms of P&L or cash flow generation. The second parts that we actually use by being diversified shipping company and manage the risk of having a big spot exposure is having the axes of a large fleet and be.
Speaker Change: To sell some assets as you have seen every quarter, we sell a handful of assets most of the older assets not just to fund some of the new building program, but also to increase our liquidity position should the markets.
Speaker Change: Right now in some promising markets like drybulk, not be where we want them to be that at least we have always a strong balance sheet to go through that cycle, and then catch the right opportunity at Windsor market pick up.
Speaker Change: Yes, it makes sense and Q1 is obviously the seasonally weaker quarter for the right. So no surprise there.
Speaker Change: You've provided a lot of commentary on how ammonia will become competitive in the medium term with the keeps as example.
Speaker Change: However, I was wondering how are you thinking about the fuel of choice for middle sized assets, such as say comes from axis or C. S. Obese, both due to the lower cost and lower fuel consumption.
Speaker Change: We would say that we also believe for for instance will come so much is that ammonia will be the fuel of choice. It's just managing to find the engine that can be implemented.
Speaker Change: And managing to find the right trade lane for it comes IMAX, where the ammonia could be phones.
Speaker Change: The series a is we know today that we are doing today hydrogen engines on board because of the shorter distances because hydrogen in certain areas will probably be preferreds instead of ammonia because we think that eventually you could even F. O sees a visa on ammonia as well it will always be a mix of costs of course.
Speaker Change: Safety concerns and availability of the issue. We have stated many times before and again I know we have peers that have different views. We don't believe in methanol. We don't believe in LNG in the long term as a solution to Decarbonize shipping we think the two molecules of choice will be ammonia and hydrogen throughout the different segments. The small of the ship is.
Speaker Change: The more you could go to a hydrogen the bigger it is the more you will have to go to ammonia.
Speaker Change: Makes sense. Thank you for taking my questions.
Speaker Change: Yeah.
Speaker Change: I hit it Dan.
Speaker Change: So reading so I'm not sure if you still had a question for Dan or.
Speaker Change: And then you're still on mute.
Speaker Change: Yeah.
Speaker Change: Hello.
Speaker Change: I can we can look at great. Yes, just one quick last comment.
Speaker Change: <unk>, sorry, with a comment.
Speaker Change: One other thing that caught my attention was your fleet your euro and athlete for crude oil.
Speaker Change:
Speaker Change: What are we looking at.
Speaker Change: Im looking more long term hill.
Speaker Change: End of 2026.
Speaker Change: From the management point of view are we increasing the number of newer ships are requiring new ships.
Speaker Change: And.
Speaker Change: What is the projection.
Speaker Change: The daily tonnage rates.
Speaker Change: Looking for the rest of 2025.
You've taken into consideration that the futures seen seem to point downwards. Mr. Cerberus.
Speaker Change: What are what is the outlook.
Speaker Change: We think the future is pointing upwards.
Speaker Change: But you.
Speaker Change: You know for 2025 and 226, we are assuming rates anywhere between 40 and $60000 a day on our Vlccs and Suezmax says you also see that we are getting new building deliveries next year coming into our fleet.
Speaker Change: To your point of whether we will acquire new tonnage. We can do two things either we can buy a secondhand or we can order new buildings.
Speaker Change: Right now we are very happy with the fleet composition, we have we might sell some older vessels.
Speaker Change: And we will look opportunistically, if the prices are okay, whether to order more vessels or possibly by more secondhand, but we actually think that the rates for the next 18 months.
Speaker Change: Could actually more go up doesn't go down.
Speaker Change: Okay. Thank you that's that's more positive I appreciate it.
Thanks, Kevin.
Speaker Change: So we don't have any live questions anyone but we did receive a few recent one so that will just oh.
Speaker Change: The first one you have a large amount of treasury shares could those be used for further acquisition acquisitions are the issue.
Speaker Change: And the second one is what was there were some of them one by one and yes. So it's a good question. So the company has acquired quite a few.
Speaker Change: Our own shares in the last 18 months right now we keep them.
Speaker Change: It's a it's always good.
Speaker Change: To have treasury shares that we bought at a very low price.
Speaker Change: To be able to issue them on transactions and this could be linked with the Golden Ocean transaction it could be other transactions.
Speaker Change: For the moment, we will not canceled those shares.
Speaker Change: And the second one is what will be the availability of ammonia and hydrogen is hydrogen coming after with ammonia or methanol.
Speaker Change: Okay.
Speaker Change: Difficult to say a lot of projects have been stopped on the hydrogen on ammonia production a lot of new projects coming on stream.
Speaker Change: It will be an enzyme story, we see ammonia projects coming on stream in the world, we see hydrogen projects coming on stream.
Speaker Change: It will depend on the region.
Speaker Change: And the time it is slow, but we think that in the next five years supply will accelerate anything there to ads, there's sort of a wait and see attitude, sometimes from pretty developers to figure if I D.
Speaker Change: They want to see the demand photos and products.
Speaker Change: Where we believe.
Speaker Change: That's a shipping crude and a lot of visibility on demands that could accelerate decisions for these projects come on line. So it's a little bit of a chicken and egg problem that we have but as Alex said, we strongly believe that this will be accelerated in the next five years.
Speaker Change: And the third question you must have a lot of pushback on your I mean, I think the small flowed through the acquisition of Golden Ocean Elevators. For example, more freely available for institutions net short answer yes, if the merger goes through our free float will go to 38%. So that's an increase from 8% today to come.
Speaker Change: Bind company much bigger stronger larger market cap of 38%.
Speaker Change: And then one last one and what's the LNG propane 18 area of interest to you in the future.
Speaker Change: LNG is not really of interest right now, but the other segments could always be of interest.
Speaker Change: Right now our focus is on completing the merger with Golden Ocean and I think they're two ads, we've shown the slide into the capital markets day presentation. The investment parameters that we always take a supply and demand in specific kit.
Speaker Change: Target assets.
Speaker Change: And the order book to fleet ratio right now and on LNG.
Speaker Change: Pretty high on some of the other sectors as well, but as Alex mentioned this could change.
Speaker Change: Once our order book is being absorbed but that's it.
Speaker Change: Is that the right moments than I am.
Speaker Change: People look at are at any segment that that is out there.
Speaker Change: Okay, and I think that concludes the questions.
Speaker Change: Very good.
Speaker Change: So I would like to thank everyone for participating in this call as we have said before if you have any further questions. You can always reach out to us and my colleague you always done Mondays email address is in the presentation is there to assist you. Thank you very much and see you next time bye bye.
Speaker Change: The meeting will start shortly raise hand is disabled this meeting.