Q2 2026 Star Bulk Carriers Corp Earnings Call
Speaker #1: Thank you for standing by, ladies and gentlemen. And welcome to the Star Bulk Carriers conference call on the second quarter 2026 financial results. We have with us Mr. Hamish Norton, president; Mr. Simos Spyrou, co-chief financial officer; Mr. Christos Begleris, co-chief financial officer; Mr. Constantinos Sinopolis, deputy chief financial officer; Mr. Nicos Rescos, chief operating officer; Mrs. Charis Plakantonaki, chief strategy officer; Mr. Constantinos Simantiras, head of market research.
Speaker #1: At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session at which time, if you wish to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced.
Speaker #1: I must advise you that this conference is being recorded today. We now pass the floor to one of your speakers today, Mr. Spyrou. Please go ahead, sir.
Speaker #2: Thank you, operator. Good morning, ladies and gentlemen. And thank you for joining us today; I'm Simos Spyrou, co-chief financial officer of Starbuck Carriers. And I would like to welcome you to our conference call regarding our financial results for the second quarter of 2026.
Speaker #2: Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement on slide number 2 of the presentation. In today’s presentation, we will review our second quarter 2026 company highlights: financial performance, capital allocation initiatives, cash evolution during the quarter, operational performance, and cash flow potential.
Speaker #2: Our continued investments in the fleet, developments on the regulatory front, and our perspective on industry fundamentals. We will then open the floor for questions.
Speaker #2: Turning to slide 3, the first quarter the second quarter was characterized by strong profitability, disciplined capital allocation, and continued balance sheet strength. For the second quarter of 2026, net income amounted to $144.9 million, while adjusted net income reached $134.8 million, or 1.21 adjusted earnings per share.
Speaker #2: Adjusted EBITDA was $184.2 million, demonstrating the robust cash-generating capacity of our platform. Shareholder returns: we continue to actively return capital to shareholders through our policy of distributing 100% of our operating cash flow subject to maintaining a minimum cash balance of $2.1 million per vessel.
Speaker #2: Our Board of Directors declared a $0.90 per share dividend for the quarter, payable on September 3 to all shareholders of record as of August 21.
Speaker #2: Our balance sheet remains a key strategic advantage. Total cash and cash equivalents are approximately at $532 million. Outstanding debt is approximately $955 million, and drawn revolver capacity at $110 million.
Speaker #2: Importantly, we also currently own 29 debt-free vessels with an aggregate market value close to $790 million. During the third quarter of 2026, we expect to collect net sale proceeds of approximately $31.5 million for the sold vessels.
Speaker #2: Our low leverage, as well as this unencumbered asset base, provides substantial financial flexibility to fund growth opportunities as well as downside protection. On the top right of the slide, you can see our per-vessel daily performance metrics for the quarter.
Speaker #2: Time-charter equivalent of 24,486 dollars per day per vessel. Combined daily operating expenses and net cash GNA expenses of $6,542 per day per vessel. This results in a daily cash margin of approximately $7,944 per vessel per day before debt service and capex.
Speaker #2: These numbers highlight the operating efficiency of our platform and our ability to generate meaningful cash flow. Slide 4 summarizes our capital allocation track record since 2021.
Speaker #2: Over this period, we have executed approximately $3.2 billion in value-enhancing actions including dividends, share repurchases, and debt repayment. Namely, we have returned approximately 14.9 dollars per shares in dividends representing approximately 52% of our current share price.
Speaker #2: We have reduced total net debt by 66%, bringing leverage to a level where net debt stands at 50% of the demolition value of our fleet.
Speaker #2: We have also expanded the fleet opportunistically through accretive fleet acquisitions issuing equity at or above NAV, thereby increasing scale while protecting per share value.
Speaker #2: The result is a larger more efficient platform with materially lower financial risk and significantly enhanced free cash flow per share potential. Slide number 5 illustrates the movement in our cash balance during the second quarter.
Speaker #2: We began the second quarter with $409 million in cash, we generated $150 million in operating cash flow, after vessel sale proceeds debt drawdowns and repayments capex payments related to new building installments and ESD and ballast water treatment installations and the fourth quarter dividend payment, we ended up with $565 million in cash.
Speaker #2: This sequential increase in cash underscores the strong internal cash generation of the company even after substantial shareholder returns and investments in fleet upgrades. Moving to slide number 6, in the second quarter of 2026, Starbucks delivered a well-balanced operating performance across all segments, supported by our diversified fleet of 138 vessels and over 12,200 ownership days.
Speaker #2: Newcastle Max and Cape Sides vessels contributed 35% of our revenue, and 39% of our adjusted EBITDA, benefiting from strong market positioning and representing 41% of our fleet market value.
Speaker #2: Panamax and Camps Max segment continued to provide stable earnings, contributing 28% of revenue, and 24% of adjusted EBITDA, namely 77.7 million and 42.4 million respectively.
Speaker #2: Ultramax and Supramax vessels remained the largest contributor to revenue at 37%, generating $104.4 million in revenue and $66.5 million in adjusted EBITDA reflecting the strength of our exposure in geared segment.
Speaker #2: Slide number 7 highlights the inherent operating leverage embedded in our business model. With approximately $49,000 fleet available days, on an annualized basis for the next 12 months, and based on the current next 12-month FFA curve, of approximately 22,000 per day on a fleet-wide basis, the company would generate approximately $4.1 per share of free cash flow.
Speaker #2: Representing 14.3% implied cash flow yield. The slide illustrates the strength of our platform in a rising market. Every 1,500 dollars per share fleet-wide increase in TCE equates to an EBITDA increase of 72 million.
Speaker #2: This would translate to 64 cents per share of incremental dividend to our shareholder given our existing approach to distributions. In summary, during the second quarter, we delivered solid profitability strengthened our liquidity position, continued to reduce leverage, returned meaningful capital-to-shareholders, and preserved significant opportunity for future capital allocation.
Speaker #2: Our balance sheet resilience operating efficience and disciplined capital allocation framework position us well to navigate market volatility while continuing to enhance per share value.
Speaker #2: With that, I will now pass the floor to our COO, Nicos Rescos, for an update on our operational performance and the continued investments we are making in our fleet.
Speaker #1: Thank you, Simo. Turning to slide 8, which covers our operational performance. We continue to operate one of the most cost-efficient platforms in a drive-out sector.
Speaker #1: Daily OPEX for the second quarter came in at $5,180 per vessel, and net cash GNA at $1,362, both among the lowest in our peer group as illustrated.
Speaker #1: The sustained cost discipline reflects our scale, our integrated management platform, which translates directly into superior cash generation through the cycle. Moving to slide 9, which our clients are fleet-wide investment program.
Speaker #1: On a new building front, all five of our latest generation high-specification Camps Max new buildings are on track for delivery during 2026, with 122 million dollars of capex remaining.
Speaker #1: Financing is in place, where we expect to draw down up to $129 million of debt against the five new building vessels, leaving the program fully funded on competitive terms.
Speaker #1: In a strengthening Camps Max market, the prompt deliveries of these vessels remain highly attractive to our customers, combined with a mark-to-market gain of our approximately 56 million for our shareholders.
Speaker #1: On vessel upgrades, during the second quarter, we continue pushing through with energy-saving devices and with high-efficiency propeller installations. Having completed 62 ESD installations across the fleet, with our further seven scheduled for the year, 88% of our fleet is now fitted with ESDs.
Speaker #1: On vessel efficiency, we continue investing in hull upgrades in way of optimized propellers, silicon paints, and deployment of hull cleaning robots where we measure tangible performance improvements ranging between 7% and 15%.
Speaker #1: This translates into improved commercial performance, lower emissions, and strengthens our competitiveness. The top right of the slide illustrates our capex schedule, presenting both the remaining new building installments and our vessel efficiency upgrade spending alongside the corresponding debt drawdowns.
Speaker #1: At the bottom, you can see our dry-dock schedule for the remainder of '26 and '27. For Q3 and Q4 2026, approximately 16 and 11 million, and around 460 and 280 off-hire days respectively.
Speaker #1: For 2027, we expect to have 17 million dollars in dry-dock costs and 450 off-hire days. Turning to slide 10 for our fleet update. We continue to actively rejuvenate the fleet through a disciplined combination of selective disposals and new building deliveries, prioritizing the divestment of old non-ecotonnage to reduce our average age and lift overall efficiency.
Speaker #1: As previously announced, the sales of Star Scarlet and Star Mariella were completed in Q2 2026. During the second quarter, we agreed to sell one mini KP2 Camps Maxes, namely Stariva, Star Moira, and Pendulum.
Speaker #1: Star Moira and Pendulum were delivered to the new owners in June and July 2026, while Stariva is expected to be delivered during the third quarter of this year.
Speaker #1: In connection with the sales mentioned above, in the second quarter of 2026, we collected sale proceeds of approximately $60.2 million, net of commissions, and made debt repayments of approximately $21.4 million. In the third quarter, we expect to collect sale proceeds of approximately $31.5 million, net of commissions.
Speaker #1: Overall, our total amount of approximately 70.3 million net of commission and debt repayments will be collected from the vessel sales. Having sold 50 vessels since 2023, we have reinvested most of the net sale proceeds to fund accretive share buybacks throughout this period.
Speaker #1: This quarter, also marks the start of our new building delivery cycle, with a latest generation Camps Max vessels joining the fleet. We took delivery of three out of the eight Camps Max new building vessels, and expect to take delivery of the five remaining during Q3 2026.
Speaker #1: We continue to maintain seven long-term chartering contracts, which provide commercial flexibility across market cycles. Starbulk operates one of the largest dry-back fleets among US and European listed peers, with 138 vessels on a fully delivered basis and an average age of approximately 12.4 years, providing scale, modernity, and operating leverage to compound shareholder value as the market cycle evolves.
Speaker #1: I will now pass the floor to our Chief Strategy Officer, Charis Plakantonaki, for an update on recent global environmental regulation developments and our ESG performance.
Speaker #3: Thank you, Nico. Please turn to slide 11, where we highlight our progress across ESG priorities. Ahead of the upcoming IMO, Marine Environment Protection Committee Starbulk remains actively engaged through the relevant industry organizations in the discussions on the net zero framework and its alternative proposals, committed to advancing practical, greenhouse gas reduction regulations with consistent global applications.
Speaker #3: On the European front, the emissions trading system was revised across sectors, keeping maritime in the scheme at 50% of emissions on EU voyages, broadening its scope and creating a dedicated allowance reserve for sustainable marine fuels.
Speaker #3: Starbulk continues to participate in the maritime emission reduction center, whose membership has expanded to include Cargill and Dubai dry-docks. Current programs of work span hull and propeller coatings, hull grooming robotics, wind assistant propulsion, onboard carbon capture, and staff generator retrofits.
Speaker #3: On the social front, we are advancing our people agenda through the development of a new crewing campaign in Manila, and the company portal to enhance corporate communication, alongside an extensive summer internship program supporting youth talent development.
Speaker #3: 15 Starbulk vessels take part in the adopted ship education program, bringing the experience of life at sea to schools across Greece. On governance, the fiscal year 2026 marks Starbulk's first sustainability reporting cycle under the EU Corporate Sustainability Reporting Directive, with its closures aligned to the European Sustainability Reporting Standards reinforcing data quality, internal controls, and assurance readiness.
Speaker #3: We continue to embed artificial intelligence responsibly across our operations, advancing the four pillars of our AI strategy: leveraging the AI capabilities of our software providers, piloting off-the-shelf AI tools, building custom AI solutions, and continuously scanning new technological developments.
Speaker #3: Recognizing the cyber risks associated with AI, we have deployed CrowdStrike AI Detection and Response, conducted a second consecutive year mandatory cybersecurity awareness training for all onshore staff, and performed a Deloitte Red Team Simulation.
Speaker #3: We also introduced a new AI usage policy governing the responsible use of AI by surveying staff in line with the EU's artificial intelligence act regulation.
Speaker #3: I will now pass the floor to our Head of Market Analysis, Constantinos Simantiras, for a market update and his closing remarks.
Speaker #2: Thank you, Charis. Please turn to slide 12 for a brief update on supply. During the first half of 2026, a total of 22.2 million deadweight tons was delivered, and 1.9 million deadweight tons was sent for demolition.
Speaker #2: That brings net fleet growth to 20.3 million deadweight, or 1.9% year to date, or 3.3% growth over the last 12 months. The new building order book has increased over the past three years, and presently stands at approximately 13.9% of the fleet.
Speaker #2: Despite an increase in capsize orders during the past few quarters, total dry-back contracting remains under relative control reflecting limited shipyard availability until late 2029, high shipbuilding costs, and ongoing uncertainty around green propulsion technologies.
Speaker #2: At the same time, the fleet continues to age, and by the end of 2027, approximately 50% of the current fleet would be over 15 years old.
Speaker #2: Furthermore, the growing number of vessels undergoing their third special survey is estimated to reduce effective fleet capacity by more than half a percent per annum during 2026 and 2027.
Speaker #2: The average steaming speed of the fleet remains at low levels of around 11 knots for a prolonged period, despite firm freight rates, as elevated bunker prices supported by tensions in the Middle East continue to encourage slow steaming.
Speaker #2: Finally, global port congestion fully normalized during 2025 and is now following seasonal patterns. Nevertheless, congestion has recently experienced a rebound due to adverse weather conditions and war-related inefficiencies.
Speaker #2: Let us now turn to slide 13 for a brief update of demand. According to Clarkson's, total dry-back trade during 2026 is projected to expand by 2.4% in tons, and 3.8% in ton- miles, for 2027 trade growth is estimated at 1.1% in tons and 1.8% in ton- miles.
Speaker #2: The duration and extent of the Middle East conflict remains the key uncertainty for the global microeconomic outlook. The IMF projects global GDP growth to slow from 3.5% in 2025 to 3% in 2026, amid higher energy prices and inflationary pressures, before recovering to 3.4% in 2027.
Speaker #2: So far, dry-back trade has remained resilient, as direct exposures through the Strait of Hormuz is relatively limited, while increased coal cargoes and restocking have provided strong support to the sector.
Speaker #2: During the first half of 2026, total dry-back trade increased by 3.3% year-on-year, supported by record-high grain volumes, a recovery in coal exports during the second quarter, and growth in iron ore oxide and mineral bond trades.
Speaker #2: Ton- miles expanded at a faster pace of 4.5%, driven by strong Atlantic exports and longer Pacific distances. Chinese dry-back imports increased by 5% year over year, in the first half, against a low base last year.
Speaker #2: However, during the second quarter, the country's economy grew at its lowest pace in more than three years, reflecting weak domestic consumption. The prolonged downturn in the property sector and lower fixed asset investments, while higher energy prices added further pressure.
Speaker #2: This has increased expectations for additional stimulus measures during the second half of the year. Dry-back imports from the rest of the world continue to recover, increasing by 2.8% year over year, despite the sharp decline in Middle East imports, supported by ongoing global restocking needs and strong commodity demand from Southeast Asia.
Speaker #2: Breaking it down by key commodities, iron ore trade is projected to expand by 2.8% in tons and by 3.1% in ton- miles in 2026.
Speaker #2: China's steel production declined by 3.1% year over year during the first half, driven by policy curves on steel supply, while production in the rest of the world increased by 0.9%.
Speaker #2: Chinese steel exports declined by 5.6% from last year's record levels, amid rising protectionism, but remained elevated. At the same time, domestic iron ore production fell by 6.5%, while stockpiles have declined from Q1 highs, indicating healthy demand going forward.
Speaker #2: Having said that, the iron ore market remains supply-driven, and ton- miles are expected to receive strong support from the continued ramp-up of high-quality iron ore from Simandu and stronger Brazil exports.
Speaker #2: Coal trade is projected to grow by 1% in tons and 2.7% in ton-miles during 2026, with demand forecasts recently revised upwards following a strong recovery during the second quarter, amid war-related dislocation in global energy markets.
Speaker #2: In China, thermal power generation rose 2.9% during the first half, while domestic production fell by 2.2%, widening the gap that Seaborne Cargoes must fill.
Speaker #2: India shows a similar pattern, with stockpiles drawn down sharply in recent months. A developing El Niño is expected to keep Northern Hemisphere temperatures elevated through the summer, adding to cooling demand.
Speaker #2: Together, these factors should sustain coal volumes at elevated levels through the remainder of 2026. Grain trade is projected to expand by 6.5% in tons and by 9.8% in ton- miles in 2026, total grain exports increased by 10% year over year during the first half, driven by record shipments from Latin America and seasonally strong U.S.
Speaker #2: exports, following the delayed trade truce with China last October. Grain volumes are expected to remain elevated during the second half of the year, as uncertainty over 2027 crop prospects, combined with escalating attacks on vessels in the Black Sea, is encouraging importers to build inventories.
Speaker #2: Mineral bond trade is projected to expand by 1.9% in tons and by 3% in ton- miles in 2026, exports increased marginally by 0.7% in Q in the second quarter, as a 45 decline in Middle East volumes, weighed on fertilizer, steel, and building materials trade.
Speaker #2: Guinean bauxite exports by contrast rose 16% during the first half and generated strong ton- miles for the Cape Side fleet. As a final comment, we remain optimistic about the dry-back market outlook, supported by a favorable supply backdrop, new long-distance Atlantic exports, and tightening environmental regulations.
Speaker #2: In a period of heightened geopolitical uncertainty, we remain focused on actively managing our diversified scrubber-fitted fleet to capitalize on market opportunities and deliver value to our shareholders.
Speaker #2: Without taking any more of your time, I will now pass the floor over to the operator to answer any questions you may have.
Speaker #1: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press *1 on your telephone keypad.
Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Speaker #1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.
Speaker #1: Our first question is from Omar Nocta with Clarkson's. Please proceed with your question.
Speaker #3: Thank you. Hi, guys. Good afternoon. Thank you for the detailed update you wrote on the company. Hi, Amish. Yeah, thanks for the update on the market and the company overall.
Speaker #3: And I guess I just wanted to dive just a little bit more into kind of the strategy at Star Walk at the moment. You've got the caste positions now up to 500 million.
Speaker #3: You're about to finalize the deliveries of the newbuilding Capes over these next several months. Dividend is ramping up with the strong dry bulk market we're seeing here.
Speaker #3: And just, I guess, as we think about your footprint in the market today, and given the better valuation of the stock, how are you thinking about the fleet and growth?
Speaker #3: Does it make sense to be a bit more acquisitive in this environment? Or what do you think about the fleet as it stands today?
Speaker #4: Well, the opportunity to be more acquisitive may it certainly looks better than it looked a couple of months ago. But on balance with cash, we think that probably cash is going to be better conserved for a little bit.
Speaker #4: We think the asset prices are relatively high. But with the share trading better, we'll see if there's an opportunity to use that as a currency and grow the platform.
Speaker #4: We can only do what we can do. It's been as you know, difficult over the last couple of years to do anything with the equity.
Speaker #5: And if I may add, Omar, hi. This is Christos. We ran calculations all the time on potential acquisitions of vessels, and as Amy said to justify a cash acquisition at today's levels, the break-even rates to produce a meaningful return to equity shareholders is quite high.
Speaker #5: So if we could use our share accretively we would definitely do so.
Speaker #3: Okay. Thanks for that, Caller. And I guess just maybe touching on that a bit, I recall a few quarters ago Petros had discussed the idea of going after the cancer max versus the Cape Size class because of the ROE was better.
Speaker #3: Do you still feel that way? Is it still more attractive if you were to deploy capital I guess it sounds like secondhand's a bit on the pricier side, but if you look at it, whether it's secondhand or a new buildings, is the cancer max still a bit more of an attractive asset class relative to Cape's purely on the when you look at it from an ROE perspective?
Speaker #5: Hi, Omar. This is Constantinos. We have definitely we definitely see a more balanced spread between the two, I would say, compared to the previous the comments we made a couple of quarters ago.
Speaker #5: I mean, values have increased on the cancer maxes. And the spread with Cape's have balanced in a way.
Speaker #4: And we've demonstrated an ability to do substantially better than index on both cancer maxes and ultra maxes.
Speaker #3: And hi, Omar. This is Nikos. There are windows in the market where there will be an arbitrage, like we did with the latest cancer max at the beginning of the year.
Speaker #3: Where there is a good mark-to-market profit that is sitting there. We feel that with new building window moving now well into '29 and '20, '30, and price is still firming up on the larger vessels, opportunities are more scarce.
Speaker #3: But as I said, there are some windows where we could combine a transaction with perhaps the commercial ability to secure part of the income going forward and reduce the break-even that Christos mentioned earlier.
Speaker #3: So we are cautious to see what how the market evolves in the next quarters. Okay. Yeah. Thank you. Thank you all for the responses.
Speaker #3: I'll turn it over.
Speaker #4: Thanks, Omar.
Speaker #1: Our next question is from Chris Robertson with Deutsche Bank. Please proceed with your question.
Speaker #2: Thank you, operator. Good morning and good afternoon, Team Star. Thank you for taking my questions.
Speaker #4: Hi, Chris.
Speaker #2: Just kind of following up on Omar's questions there, we talked a lot about being an acquirer or potential looking for secondhand assets and kind of the price friction there.
Speaker #2: But you could also be a seller into this market of some of the older tonnage. Just wanting to get your comments on what are the discussions like potentially there, given that secondhand prices are elevated?
Speaker #2: Is that preventing you from potentially going out and divesting some of the older assets and kind of the bid-ask spread between what you'd like to get and what potential buyers of those assets are seeking?
Speaker #5: Thank you, Chris. This is Nikos. We are in the market every day just to see what is the opportunity to dispose the remaining older assets less echo vessels.
Speaker #5: We see that the older vessels still command a good premium from the Chinese. We also see that the revenue side of these assets provides good yields for the company at the time being.
Speaker #5: So we are pacing ourselves forecasting what within the market will be before we dispose the next batch of, say, older cancer maxes. I think it will happen.
Speaker #5: But at the moment, with the earnings are very attractive and we see prices perhaps firming a bit further before we make a decision to sell a few more.
Speaker #4: And I think it's not directly relevant, but we haven't actually talked about the fact that the geopolitical situation has caused the spread between heavy fuel oil and very low sulfur fuel oil to be quite large.
Speaker #4: Recently, it's over 150 dollars a ton.
Speaker #3: Over 270.
Speaker #5: It's close to it's around 250. In Singapore. And this spreads on the older vessels really boost their yield. And I think we should also add that now that with our share trading at a smaller discount to NAV, the incentive to sell those high-yield earning vessels is less.
Speaker #4: Yeah.
Speaker #2: Makes sense. Yeah. Thank you for that, Caller. Just turning to the broader market here. As you think about Voyage and Cargoes from Brazil, whether it's iron ore agricultural products, and as it relates to the Panama Canal, so of course there's a few reduced transits per day.
Speaker #2: There could be risk here of drought as it relates to El Niño going forward. How much of your fleet in particular is being diverted via Cape of Good Hope rather than going through the canal?
Speaker #2: And what are you seeing in the broader market in terms of potential disruptions there that could only add to greater inefficiency and greater ton miles?
Speaker #1: Please and gentlemen, please remain on the line. We are experiencing a technical difficulty. Once again, please remain on the line. We are expecting we are experiencing a technical difficulty.
Speaker #1: Ladies and gentlemen.
Speaker #2: Hello?
Speaker #1: We are back. Chris, if you are there, you may continue with your question.
Speaker #2: Hi. Sorry, guys. I don't know how much my question you heard, but I was just speaking on as it relates to Brazilian volumes rather iron ore ag and going through the Panama Canal versus diverting via Cape of Good Hope.
Speaker #2: How much of your fleet is going via Cape? How much of the greater fleet is doing that? And I guess what's the expectation here around potential water conditions from El Niño and drought potential?
Speaker #2: And how much of that could potentially impact effective capacity and increased ton mile demand later this year?
Speaker #4: Okay. Hi, Chris. This is Constantinos. So on the Panama Canal, we expect that we will see less crossing it's worth mentioning that the dry bulk dry bulk vessels crossing the Panama Canal over the last few years have decreased in any case.
Speaker #4: Especially in the last year, in a way, we could say that they've been priced out slightly. However, the water levels are decreasing, as you mentioned, because of El Niño.
Speaker #4: We will see we expect to see a positive effect, especially on the Panamax vessels carrying during the US soybean season. And this is something that we should will be more pronounced during the September, November months.
Speaker #4: And as a fleet, we currently on the larger vessels, we go through the Cape of Good Hope, as you mentioned.
Speaker #2: All right. Great. Thanks for the color. I'll turn it over. Thank you.
Speaker #1: Once again, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Stephanie Moore with Jefferies.
Speaker #1: Please proceed with your question.
Speaker #6: Hi. Thank you. Appreciate the question.
Speaker #7: Hi, Stephanie.
Speaker #6: Hi there. I think you've you've pretty consistently have highlighted that the CMODU project is definitely a major source of future ton mile growth. Could you maybe give us an update on timing, expected export volumes over the next 12 to 24 months?
Speaker #6: When investors should be able to start to see a meaningful impact on either utilization or other demand? And on utilization or maybe any other demand initiatives that are gaining traction.
Speaker #6: So any update there, especially on timing would be helpful. Thank you.
Speaker #1: Ladies and gentlemen, we are experiencing a technical difficulty once again. Please remain on the line. We are experiencing a technical difficulty. Hello, ladies and gentlemen.
Speaker #1: We are back. And Stephanie, if you are there, you may proceed with your question.
Speaker #6: Hi there. I don't know if you heard that question, but I wanted to ask about the CMODU project. Obviously, you have called out in the past that it's a major source.
Speaker #1: Stephanie, I'm so sorry. They have disconnected again. I'm going to try dialing in a different number. Please hold.
Speaker #6: Oh, okay.
Speaker #1: Ladies and gentlemen, we have returned. Stephanie, if you are on the line, please continue your question.
Speaker #6: Yes. Hi, guys. So I just wanted to touch on the CMODU project. So obviously, the past you talked a lot about this being a major source of ton mile growth.
Speaker #6: So could you just give us an update on timing, expectations that you think that project will continue to ramp over the next 12 to 14 months?
Speaker #6: When should we start to see that major contribution? And then also, it's always helpful if there are any other projects or demand initiatives that are on our radar, even over the next couple of years.
Speaker #6: That's it for me. Thank you.
Speaker #4: Thank you, Stephanie. This is Constantinos, apologize for the technical issues we had. So CMODU, there were a bit a few delays at the end of last year.
Speaker #4: It is ramping up this year. It's running at a pace of approaching almost 20 million per annum capacity. I think the number will be somewhere between 15 and 20 million by the end of the year, but the pace is ramping up.
Speaker #4: And now we're going through the seasonality in Guinea. During the third quarter, due to rainy season, so volumes actually pull back during. The pace pulls back during August, July, August.
Speaker #4: But the expectations are that by 2027, the pace will ramp up to about between 45 to 50 million tons per annum. And further pushing, in 2028, we'll accelerate in 2028 closer approaching close to 100 million tons.
Speaker #4: And by 2029, might reach the full capacity of 120 million tons. Now we will closely follow. It's difficult to make to be sure that these will be followed strictly followed.
Speaker #4: Now, there are other volumes around in West Africa, which could add between 10 and 20 million tons. Over the next two years. And there's also expansion in Brazil, adding again about 10 to 20 million tons.
Speaker #4: So, over the next three to four years, we should see an increase of high-quality iron ore volumes—millions of tons—from the Atlantic combined.
Speaker #1: We have reached the end of the question-and-answer session. I would like to turn the floor back over to management for closing remarks.
Speaker #5: No closing remarks, operator. Thank you very much.
