Half Year 2026 Pacific Basin Shipping Ltd Earnings Call
Speaker #1: Mr. Martin Fruergaard and Chief Financial Officer Mr. Jimmy Ng. For the first part of this call, all participants will be in a listen-only mode, and afterwards there will be a question-and-answer session.
Speaker #1: Mr. Fruergaard, please begin.
Speaker #2: Yes, thank you very much, and thank you all for your patience. And welcome, and thank you for attending PACIFIC BASINS 2026 interim result call.
Speaker #2: We will start by highlighting the key points in the published presentation, followed by Q&A. Please turn to slide 2. Drywall freight market strengthened year to date, supported by geopolitical disruption and trade inefficiencies.
Speaker #2: Particular those arising from the conflict in the Arabian Gulf. We were well positioned to benefit from the progressively improving freight market while continuing to outperform the market and deliver strong financial results in the first half of 2026.
Speaker #2: During the period, we generated an EBITDA of USD 197.8 million, an underlying profit of 94.9 million, and a net profit of 105 million USD.
Speaker #2: This represented a year-on-year increase of over 300% in net profit, reflecting both strong market conditions and continued commercial outperformance. Our balance sheet remained robust.
Speaker #2: As of 30 June 2026, we had a net cash of 157.2 million, we had available committed liquidity of 673.6 million, and operating cash flow of 143.5 million.
Speaker #2: Please turn to slide 3. We remain committed to delivering value to shareholders through dividends and share buybacks. For the first half of 2026, the board declared an interim dividend of 15.5 HKD per share, amounting to 102.2 million USD.
Speaker #2: This is consistent with our revised dividend policy which allows us to distribute up to 100% of annual net profit, excluding vessels disposal gains, when the company is in a net cash position.
Speaker #2: In addition, we repurchased approximately 9.5 million shares for 3.5 million USD during the first half of 2026 under our share buyback program of up to 40 million USD for the year.
Speaker #2: As our shares continue to trade below our fair market value NAV, we will continue to evaluate further buyback opportunities. Including the interim dividend announced and the share buybacks completed year to date, PACIFIC BASIN will return approximately 106 million USD to shareholders, equivalent to 103% of our net profit for the period.
Speaker #2: Of course, excluding vessels disposal gains. This reflects our continued commitment to delivering sustainable shareholder 4. As of end June 2026, we had a total of 254 vessels in operations, comprising 107 owned vessels, 13 long-term chartered, and 134 short-term chartered vessels.
Speaker #2: In terms of fleet renewal, we reshaped and expanded our new building program during the period, and we now have 10 new buildings in our order book, comprising 6 handy-sized vessels from China and 4 ultramarine vessels from Japan.
Speaker #2: We also hold the option on 2 dual-fuel ultramarine new buildings including these 2 options we have in total 12 new buildings on order, with delivery between 2028 and the first half of 2029.
Speaker #2: In addition to our new buildings and after declaring purchase option on 2 handy-sized TCN vessels for delivery in the second half of 2026, we still hold purchase options on additional 13 long-term chartered vessels, which are declarable between 2026 and 2031.
Speaker #2: During the period, we completed the sale of 1 supermax vessel and we have committed to sell another with delivery in August 2026. We will continue to look for different ways to renew and grow our fleet.
Speaker #2: We maintain a disciplined approach to cash, debt, and capital allocation, balancing fleet investment, financial strength, and returns to shareholders. We take a long-term countercyclical approach in fleet renewal, while maintaining our flexibility when considering fleet ownership versus chartering in.
Speaker #2: This enables us to shift between owned vessels, long-term chartered, and short-term charters, as market conditions evolve, and allow us to have the maximum optionality to grow our fleet.
Speaker #2: Our fleet is a result of many years of disciplined investment, which has created substantial earnings capacity and underlying value. Given the cyclicality of the industry and high asset values, it is important for us to maintain discipline and flexibility when managing our fleet and the employment of our capital.
Speaker #2: I'll now hand over to Jimmy, for an overview of the interim performance and financial review.
Speaker #3: Thank you, Martin. And good afternoon to everyone on the call. I will share with you the highlights of our business and financial performance in the first half of 2026.
Speaker #3: Please turn to slide 6. The market saw strong but also volatile freight rates in the first half of 2026. Geopolitical disruptions continue to be the key driver of the market throughout the period.
Speaker #3: In particular, the conflict in the Arabian Gulf, the temporary closure of the Strait of Hormuz, the resulting vessel rerouting, and the fluctuations in bunker prices all contributed to market uncertainty and increased tongue-mouth demand.
Speaker #3: During the period, market spot rates for handy-sized were approximately USD 12,200 per day, which is 40% higher year on year, and the rates for supermax were approximately 14,180 per day, which is 62% higher year on year.
Speaker #3: FFA for the remainder of the year remained strong, which suggests market expectations of a favorable freight market conditions to continue. Please turn to slide 7.
Speaker #3: In the first half of 2026, our average daily TCD earnings for handy-sized was 14,150, and for supermax was 16,550. Now, these numbers represent a year-on-year increase of 29% and 35%, respectively.
Speaker #3: Our TCUs outperformed the average spot market rates during the first half by 1,950 per day for handy-sized, and 2,370 per day for supermax. Now, this equates to outperformance of 16% for handy-sized, and 17% for supermax.
Speaker #3: Looking forward, for the third quarter of 2026, we have already covered 78% and 82% of our committed vessel days for our handy-sized and supermax core fleet, at 15,810 and 18,680 per day, respectively.
Speaker #3: Complementing our core business, our operating activity generated a total daily average margin of 1,060 per day, over a total of 12,650 operating days in the first half of 2026.
Speaker #3: Now, this would represent a 49% increase in operating activity margin year on year. Please turn to slide 8. We continued to maintain our cost-competitiveness of past years, reflecting disciplined vessel management, effective procurement, and continued focus on efficiency.
Speaker #3: Looking into the composition of vessel cost in the charts on the right-hand side of this page, you would see average daily OPEX for both handy-sized and supermax were broadly stable at around USD 4,790.
Speaker #3: The increase in depreciation for supermax vessels was primarily attributable to higher dry docking costs. Whereas you would also see the average daily finance costs decrease by 15% to around USD 110.
Speaker #3: Now, this is mainly due to a reduction in outstanding borrowings year on year. Long-term chartered vessel daily cost for handy-sized remained substantially unchanged, while debt for supermax was 5% higher, mainly due to higher long-term charter hire cost.
Speaker #3: Please turn to slide 9. We delivered solid interim results, benefiting from strong execution in an improved freight market. Revenue increased 9% year on year, to USD 1.1 billion, while TCE earnings rose 20% to over 660 million USD.
Speaker #3: As mentioned earlier, owned vessel costs remained well controlled and broadly in line with the previous year. Chartered vessel costs increased by 10%, and that was mainly due to the stronger freight rates during the period for our short-term chartered-in vessels.
Speaker #3: Operating performance before overheads increased to 138 million USD, compared with 62 million dollars in the first half of last year. With the robust performance underlying profit increased to 94.9 million USD, and profit attributable to shareholders rose to 105 million USD, demonstrating the resilience of our business model in this highly cyclical market.
Speaker #3: Please turn to slide 10. We continue to be disciplined with our capital allocation and our financial position remained very robust, with net cash of 157.2 million USD and available committed liquidity of around 674 million USD, as at the end of the period.
Speaker #3: As of 30 June, the total net book value of our 107 owned vessels was approximately 1.6 billion dollars, while the estimated market value of our owned vessels based on independent brokers' estimates was around 2.1 billion USD.
Speaker #3: A strong financial position provides a solid foundation for us to pursue a wide range of growth opportunities while retaining the flexibility to capitalize on attractive market opportunities as they arise.
Speaker #3: Please turn to slide 11. Our operating cash flow for the period was 143 million USD, inclusive of all long and short-term charter hire payments.
Speaker #3: We also realized 9.5 million from the sale of one supermax vessel, during the period with a strong operating cash flow where we paid certain loans of 88.9 million in total.
Speaker #3: Capex amounted to 57.3 million, and that included 19.3 million for one ultramask vessel that was delivered in 12 fleet in January. Along with 20.1 million for dry dockings and other additions, and also in January in April, we paid an initial amount of around 18 million out of a total consideration of 179 million for the 6 contracted conventional view handy-sized new buildings.
Speaker #3: During the first half, we also paid a total of 39.5 million for the 2025 final dividends. Now, with that, that takes our closing position as of 30 June to 207 million in cash with cash in hand, and in addition to that, we have 467 million in drawn facilities, and that takes our available liquidity to a total of 674 million you see on this page.
Speaker #3: Now, all in all, our effective commercial execution and capital management enabled strong cash generation that allow us to have the liquidity for future opportunities.
Speaker #3: Now, with that note, I will now hand you back to Martin for the updates on the market and our strategy.
Speaker #1: Yeah, thank you, Jimmy. And please turn to slide 13.
Speaker #2: Mind a bulk demand remained resilient as ongoing disruptions and inefficiencies in the market led to longer voyage distances. Although minor bulk volumes declined by 6% during the first half, vessels rerouting due to geopolitical conflicts and tensions offset some of the decrease, limiting the decline in ton mile demand to just 1%.
Speaker #2: Growth in bulk side was strong as expanding output from mainly from Guinea, mainly benefiting the larger bulk vessels. Grain volumes increased as a result of favorable harvest in most major exporting regions, iron ore was supported by Chinese import and stockpiling and Brazil and Australia mining majors recovered strongly from the weather-related disruptions last year.
Speaker #2: Coal ton mile demand was up given the closure of the Strait of Hormuz, constraining LNG deliveries to Asia, and a spike in natural gas prices.
Speaker #2: Please turn to slide 14. The global dry bulk net fleet growth is forecasted to increase to 3.9%, while the combined global fleet of handy-sized and supermax vessels is forecasted to grow by 4.2% in 2026.
Speaker #2: The total dry bulk order book currently stands at 14% of the existing fleet, while the combined handy-sized and supermax order book is at 12% of existing fleet.
Speaker #2: Both remain moderate by historical standards. Recycling remains historically low since 2022, leaving a large pool of potential scrapping candidates with approximately 14% of handy-sized and supermax fleet capacity now over 20 years old.
Speaker #2: Please turn to slide 15. Turning to the situation in the Middle East, the conflict has continued to create volatility in both the commodity and shipping markets.
Speaker #2: Following a brief reopening, the Strait of Hormuz was closed again, with around 1% of the subcape-sized fleet remaining trapped within the Arabian Gulf. Bunker prices with rose sharply on the at the onset of the conflict, have come back down but continue to be very volatile.
Speaker #2: The conflict the conflict also led to a spike in both natural gas and coal prices while the increase in coal demand in Europe was somewhat short-lived, we continue to see a widening premium of gas over coal, in Asia.
Speaker #2: Prompting some power utilities to increase coal purchases and provide and providing support for coal trade. For Pacific Basin, we currently do not have any vessels trapped in the Arabian Gulf, and the direct impact on our operations have been limited.
Speaker #2: Please turn to slide 16. Looking ahead, although geopolitical disruptions will remain a key influence on the industry, we maintain a positive outlook for the dry bulk market.
Speaker #2: IMF forecasts global GDP to grow by 3%, and China by 4.6% in 2026, reflecting resilient global economic activity. In terms of market dynamics, although supply growth is outpacing demand growth, freight markets continue to be supported by disruption-related inefficiencies including high bunker prices fuel supply constraints, longer voyage distance, adverse weather, and congestion, and so on.
Speaker #2: Overall, we expect dry bulk market conditions to remain resilient at the same time we may remain mindful of key uncertainties including geopolitical developments the pace of fleet deliveries and of course the weather-related disruptions.
Speaker #2: Against this backdrop, our strategic priorities reflect our agility in operations and commitment to shareholder return. We will continue to grow and renew our fleet in a disciplined countercyclical manner, advance our fuel transition strategy, leverage digital and AI capabilities to enhance commercial and operational performance, strengthen our cost competitiveness, and strive to enhance our performance and shareholder return.
Speaker #2: Please turn to slide 17. Our consistent outperformance is underpinned by the integrated platform we have built over many years. Our global network, longstanding customer relationships, and deep market knowledge enable us to secure better employment opportunities for our fleet and respond effectively to constantly evolving market conditions.
Speaker #2: Our extensive in-house capabilities, deep in-house fleet management expertise, and relentless focus on efficiency and safety enable us to deliver reliable transportation service to customers worldwide while maintaining a competitive cost base.
Speaker #2: Disciplined capital management is another important pillar of our resilience, we take a long-term countercyclical approach to investing in, renewing, and growing our fleet. By maintaining financial flexibility and asset optionality, we can adapt to and manage changing market conditions.
Speaker #2: Altogether, these strengths form the foundation of our outperformance enabling us to consistently outperform freight market, generate attractive and sustainable returns through the cycle, and create long-term value to our shareholders.
Speaker #2: With that, I conclude our 2026 interim result presentation and I hand the call a call back to the operator for the Q&A session. Thank you.
Speaker #1: Thank you. We will now begin our Q&A session. If you have a question for today's speaker, please join the Zoom link via the blue Ask a Question button, press the raise hand button, and you will enter a queue.
Speaker #1: After you are announced, please unmute yourself, state your name and company, and ask your question. If you find that your question has been answered before it's your turn to speak, please press the lower hand button to leave the queue.
Speaker #1: You may also type your questions in the Q&A box. Our first question is from Nathan Gee. Please unmute your line and ask your question.
Speaker #3: Hi, Martin. Hi, Jimmy. Thanks for the call and congrats on the strong results. Maybe a few questions from me. Firstly, on Hormuz, are you able to sort of size the boost to dry bulk markets from Hormuz and so I guess what's the net impact if tensions ease?
Speaker #3: Secondly, just in terms of forward cover, it seems like you have about 80% of 3Q covered this year. I think this time last year, for 3Q, you this just a deliberate strategy, given the market view?
Speaker #3: And then thirdly, potentially within El Niño, can you be talking about the potential impacts to the Panama Canal, dry bulk markets, and just remind us what happened last time?
Speaker #3: Thank you.
Speaker #2: Yeah, we'll try. First, the impact of the Strait of Hormuz. I have to say it's actually amazing that the market has been so resilient and so strong when you look at actually the 6% volumes cargo volume we lost in the beginning of the conflict.
Speaker #2: But even then the market has actually been strong and that's of course a clear indicator that we lost a lot of cargo mainly fertilizers and cement clinkers and aggregates but at the same time of course all these commodities had to be supplied from longer distance over longer distances and of course that has been very helpful for us.
Speaker #2: So when we say volumes are down 6% and I think we say the ton mile is down 1% and then we have an increasing market, that seems a little bit confusing but there of course we have to remember that 2% of the smaller ships were actually caught in the trapped in the Arabian Gulf and at the same time you had lots of disruption around where we had to go to other places where creating congestion, longer ton mile, higher bunker prices.
Speaker #2: So you have one of those scenarios once again where we see all these disruption happening in our market that is very helpful. I think actually if it opens up again yes there is still about a 1% of the smallest low cape size fleet in the Arabian Gulf.
Speaker #2: So it opens up of course they will start trading again I think for the bulk market you could also say that it would actually bring a lot of tons back to the market maybe tons that the world is still missing because you actually see now that the cargo volumes are coming up again but it's sourced somewhere else from somewhere else I think if Arabian Gulf opens up again I think there is a pent-up demand somewhere that still has to be covered.
Speaker #2: So it's not necessarily a bad thing if it opens up for the dry cargo space but let's see. The forward cover, you're absolutely right.
Speaker #2: I think what's really amazing this what I think we've done really well this year is that we have actually positioned ourselves very optimal this time it is actually quite difficult to outperform the market in an increasing market and I think still our outperformance is quite it's a quite big outperformance and we've done that even though the indices continue to go up during the year in it and that is of course also done by having taking being less aggressive or taking contract cargo when we entered the year and also during the year so we do have I think about 10%, 15% less cover I would actually say the cover we didn't have is actually quite well paying and it's still even though it is quite high numbers it is still especially for heavy size there's a lot of backhaul voyages included in it so I actually think we're in a super good position on that part and of course when you look at the FFAs and the indices the outlook is actually quite good for the rest of the year the final one is El Niño that is a good one it has so many impacts on it that is probably hard to where to start and where to end first of all the Panama Canal it's of course a combination also that there's a lot of tankers and gas ships going to Asia with hydrocarbons from the US so that is actually pushing out the bulk carriers but also there you see now a reduction in the allowed draft of the ships and that is of course due to less water in the lakes that actually feeds the Panama Canal that's probably a situation we saw it some years back a situation that probably will continue of course we see the weather impacts in Europe at the moment with the high temperature and what does that do well the water level in the rivers are historically low that actually means that the transport of the commodities in and out of the ports are limited but it also means that maybe nuclear power plants are running a little bit less because of lack of water it also means that the hydro power will also be less and the replacement for that is of course coal and other things and it links again into Ukraine where we see much more shooting on ships and ports between Russia and Ukraine that we how will Ukraine and Russia get the grains out it's definitely not out of the Black Sea because no ships at the moment are very limited ships which to go there so what's happening now is that normally they would have done it through the rivers the Donau that is actually not possible right now because of the water level 7% less waterfall in the monsoon in India that will have an impact on the hydro so I can continue and continue and continue I think the harvest in Europe is very poor quality of it is very poor so Nathan I can continue continue it remains to be seen of all these things but El Niño will have a major impact on the trade.
Speaker #2: That might be also some negative for us but overall again it's just disrupting the market.
Speaker #1: Perfect. Thank you. Thanks, Martin.
Speaker #3: Thank you. Our next question is from Deepak Maury Krishna. Please unmute your line and ask your question.
Speaker #2: Hi Martin. Hi Jimmy. Congratulations on a strong quarter in a rising market. You've outperformed so definitely kudos to your team. My questions are around the cover for the second half.
Speaker #2: I'll follow up. We see that so far in Q3 this port rates are trending sequentially higher. So is it fair to assume that we could see a seasonally stronger second half versus first half given that you've already covered significantly the third quarter already and there's more to come in the fourth quarter?
Speaker #2: That'll be my first question.
Speaker #4: Yeah, that is I think that is definitely correct. If you look we don't give forecast of course for the market but I think what's important to remember is that for first half it was a progressive increase in the freight rates to where we are now and again if you look at the indices you can see they are even higher than our cover is on that part and the indices of course do not have an outperformance included and again as I said earlier the cover we have there is actually a little bit of backhaul included in that part of it.
Speaker #4: So yes it is I think there's a good support in the market actually going forward for us at the moment. There is nothing indicating nothing that we can see that indicating rates will go down.
Speaker #2: Okay. And with respect to the coal demand Clarkson's and several other industry commentators and your peers who have reported have mentioned that coal could be a swing factor in second half given the disruptions to the gas supply and also given the hydro power deficit potentially because of the El Niño effect.
Speaker #2: Have you already started seeing an uptick in coal cargoes which you handle? Any color on that whether it is just expectation or is it something which is translating into reality?
Speaker #2: That'll be my second question.
Speaker #4: Yeah. I think we see not maybe less than hour ships. I think we are actually quite busy with other things than the coal but of course our focus probably somewhere else at the moment but I think on the Panamax as you see that you also see that the Pacific market is actually quite strong also on the Panamax ship.
Speaker #4: So I think that they are benefiting from mainly from this business. And we do we do you know we see the numbers and we can see there is an increase.
Speaker #4: It's also both India and China is of course using coal to gas part of it and as you say the gas prices are high availability low it has to be coal as a replacement.
Speaker #4: And again the temperature is very high the weather is brutal and yeah the electricity requirements are up. So it will probably be coal doing that.
Speaker #2: And maybe as a follow up given the different diverse cargo which you handle if you could help us understand during the first half and so far right which are the cargoes which you're seeing greater momentum or is the outperformance mainly driven by supply disruptions rather than the demand growth as such?
Speaker #4: Well I think actually when you look at if you look at our numbers I think on the attachment when you have time to do that you can actually see that our total volume moved in first half is somewhat down compared to last year because we have a little bit less ships all in all.
Speaker #4: But reality is this is a reflection of that we have we are sailing longer and you know there's more disruption in the trade. So I think that is also showing our volume moves also indicate a little bit what's happening in the market.
Speaker #4: It is becoming a little bit more cumbersome to move the cargoes and it's a longer voyages and it takes more time to do it.
Speaker #4: But otherwise I think the trading for us is you know we didn't have well we didn't have one time chart of ship in the Arabian Gulf which we got out with any cost to us on that part of it but so our ships actually been quite busy moving around and we are busy with the usual stuff.
Speaker #4: Maybe we're doing a little bit more break a little bit more steel cargoes and others which actually also is part of the outperformance of our ships.
Speaker #4: That we can combine doing parceling and other things that is also quite helpful in our outperformance of the market.
Speaker #2: Okay. And finally on the fleet expansion or fleet momentum right secondhand prices are high at the highest levels since 2010 perhaps. New build prices are not cheaper either.
Speaker #2: In this scenario will be will you be more of a seller of older vessels or would you look to acquire any vessels given that this could be a structural deficit in the fleet expansion for the entire market?
Speaker #2: And if you could also help us understand given the option which you have I think on slide I'm not sure slide this is you've mentioned something about two already declared and three more to be delivered.
Speaker #2: So net net how many more options do you have left?
Speaker #4: Good question. We always we spend a lot of time discussing that every time but anyway so our view on the first of all our view on the new building market is yes prices are high I think the yards have good margins on the ships but they also have full utilities you know they are fully used until 2930 and even the new capacity coming in has been a lot of orders of crude ships VLCCs Newcastle Maxis and very large tankers and car carriers so the yards are actually quite busy until 29 and 2030 but it's true prices are high.
Speaker #4: So what we have done in our growth is that of course we have done some new buildings when we thought you know we had the right timing to do it.
Speaker #4: There's also a limited amount of yards actually willing to build our smaller ships. So it becomes a little bit specialized when you want to have especially heavy sizes but also Ultramaxes.
Speaker #4: But we have placed some orders and I think we got the timing somewhat okay on those orders. And then on top of that we have taken the long-term chart that deals with purchase options and what we had and what we have is we have we actually have 16 long-term chartered ships of which I don't have to be careful again.
Speaker #4: We have 13.
Speaker #2: 13 long-term charter ships?
Speaker #4: 13 long-term chartered ships of which we have declared purchase option on two of them.
Speaker #2: Okay.
Speaker #4: And those two ships will be delivered end of this year. On top of that we have three more ships coming. One Ultra and two handy sizes.
Speaker #4: One is coming this year and two is coming next year. They also come with purchase options on it. So that actually brings our purchase options up to 13 ships.
Speaker #4: On that part of it. So if you take the time charter deals we have with purchase option 13 ships take our new buildings with 10 ships plus the two options we also have on new buildings the combined we actually have 25 ships that we can buy.
Speaker #4: We have buy but we only committed to 10 of them. That's actually
Speaker #2: Between now and 29 right? Between 28 and 29.
Speaker #4: That the options on these ships are declarable from basically now until 31.
Speaker #2: Okay. Okay. And once you declare these options how soon can you get delivery of those vessels into your fleet?
Speaker #4: Immediately. So all these ships also comes with options to extend the charter all of them with one option one year and also every year there is a purchase option at a fixed price.
Speaker #4: And we have designed this a little bit on purpose because of the new building prices. It's a good way to keep some optionality in our business.
Speaker #4: So should the market go continue to go up you know we will declare the option at the same time we are selling as you also asked about we will keep selling the older ships you know the value of those are quite high at the moment and it's a good hedge for us to do it that way.
Speaker #4: And then we have the purchase options we can declare instead.
Speaker #2: Okay. And a quick clarification. For the long-term charter vessels which you have the option to purchase the prices of those vessels have already been fixed or will they be determined at the time of declaration?
Speaker #4: They are fixed and again we have multiple options on the same ships every year you know one year go by and it's actually reducing over time with the age of the ship.
Speaker #4: But both the option to extend is at fixed time charter rates and the option to buy the ship purchase option is also a fixed price.
Speaker #2: Okay. Okay. And fair to assume that those are all in the money if you choose to purchase?
Speaker #4: That depends a little bit on how you look at it. You know this is a moment in time but as we also report we did declare one Ultra that we got delivered early this year and as I said we just declared two options for two handies so they are of course we would have done that unless they were in the money and we have option again next year and I also think that is in the money but again the optionality is the important thing so it can go up and it can go down and we can react to that part and I think that in a very cyclical business is a super important thing to have.
Speaker #2: Thank you very much and good luck for the second half looking forward to it.
Speaker #1: Thank you Deepak for the question. I'll read a question from the online platform. So the question is about CAPEX. So what is the CAPEX for the next few years?
Speaker #2: Yeah. Thanks Luna. If I can take this question. So I'll start with CAPEX for this year. If you look at our CAPEX over the past few years I think we are in terms of maintenance CAPEX particularly in our dry docking we have been fairly consistent.
Speaker #2: So if you look at our past four years numbers that would range anywhere between 40 to 50 million per year for dry docking. Now in the slides that we already described the first half we spent 20 million on dry docking.
Speaker #2: So I think it's safe to assume that we will continue to perform our dry docking fairly consistent with our historical pattern. Now the other part is the expansion CAPEX.
Speaker #2: We mentioned we have 10 new buildings. In the pipeline and we also mentioned we have paid a certain deposit on some of these new buildings.
Speaker #2: So the outstanding amount for these new buildings is to be paid is around 280 million. And when we sign these new buildings contract we disclose to payment schedule and you would have noticed in those payment schedule that it's a staged payment depending on the progress of the construction.
Speaker #2: So if you take reference to that this 280 million will be paid in the period from the second half of 2027 and gradually to 2028 onwards.
Speaker #2: I mentioned we are very well capitalized. We have we are in a net cash position and we have ample committed liquidity. In terms of our overall committed liquidity we have 6704 million as of June 2026 which will be more than enough to cover that 280 million.
Speaker #2: Expansion CAPEX and also with our strong operating cash flow I think we're a very good position to utilize our cash both to meet our committed CAPEX and also to take to take opportunities on the market when they arise.
Speaker #2: So I hope that help you on the on our CAPEX plan or our CAPEX schedule in the next few years.
Speaker #1: Thank you. As a gentle reminder if anyone would like to ask a question please use the raise hand function at the bottom of your screen or alternatively you may also type your questions into the Q&A box.
Speaker #1: We have one more question online. So the question is about slow steaming. Is the industry or PV adopting slow steaming to cut bunker cost?
Speaker #1: And is reduced speed one of the factor to contribute the high freight rates in the current market?
Speaker #4: Yeah. Yeah. Thank you for that question. It's I don't think we I don't think we cut we don't do anything to cut bunker costs but of course it is an area where we through a digitalization and AI are spending some time to make sure we optimize speed consumption on all our ships and use the right ships for the right cargoes and so on because there's of course a big difference between a modern ship and an old ship in respect to these part.
Speaker #4: But if you go if you go step back and look at the industry and so then actually this year we have not reduced speed on the fleet.
Speaker #4: It's actually gone up. The data says about 0.1%. So it's very little. But it has not reduced. Even though it has actually reduced for the last four or five years it has not reduced this year.
Speaker #4: Of course that might also be with an improving market that actually when you do the calculation and so on then they didn't make sense to keep the speed.
Speaker #4: And I don't think the reduced speed is a factor contributing to high freight rates as such. I think the volatility in the bunker prices and availability and risk of availability are not has actually also added some yeah some congestion in the bunker ports at certain stages and so on.
Speaker #4: And that I think those are just one of the additional disruptors that sort of added to limiting the supply and that has helped on that part.
Speaker #4: But it's not reduced speed that is driving the market at the moment.
Speaker #1: Thank you. As a final gentle reminder if anyone would like to ask a question please use the raise hand function at the bottom of your Zoom screen or alternatively ask a question in the Q&A box.
Speaker #1: One more question. From the online platform. Should we be expecting outperformance to continue?
Speaker #4: Well I think we have the data to show that we have always there's of course quarters when the market changes quite rapidly that it looks a little bit different.
Speaker #4: And that ups and downs in that but reality is you go over time we do keep the outperformance going in it. And of course it's our aim all the time to maximize the value of our platform to maximize that outperformance outperformance.
Speaker #4: But I think in all fairness I would say historically we have had an outperformance and I think we will continue to have that going forward.
Speaker #4: So you should expect that to continue yes.
Speaker #1: As there are no further questions we will now begin our closing remarks. Please go ahead Mr. Martin Fruergaard.
Speaker #4: Yeah. Thank you. So overall earnings have improved progressively during 2026 and we are well positioned to maximize earnings in the anticipated positive freight environment for the rest of the year.
Speaker #4: As we navigate market volatility arising from existing and potential new disruptions we will remain focused on enhancing our operational excellence maintaining a disciplined capital allocation and preserve maximum optionality in our growth ambitions.
Speaker #4: Ultimately with the aim to deliver sustainable returns to our shareholders. Thank you again for joining the call today. If you have any further questions please feel free to contact us.
Speaker #4: Thank you very much.
