Q2 2026 The National Shipping Co of Saudi Arabia Earnings Call

Faris Al-Rabiah: On the Saudi Exchange website as well. We will open the floor for questions at the end of the presentation. With that, I will now turn it over to our CFO, Basil, to walk you through the key highlights and our financial performance during Q2.

Faris Al Gahtani: On the Saudi Exchange website as well. We will open the floor for questions at the end of the presentation. With that, I will now turn it over to our CFO, Basil, to walk you through the key highlights and our financial performance during Q2.

Speaker #1: exchange website as well. And we will open the floor for questions at the end of the presentation. With that, I'll now turn it over to our CFO, Basil, to walk you through the key highlights and our financial performance during the second quarter.

[Company Representative] (Bahri): Thank you, Faris. Good day, ladies and gentlemen, welcome to our call for Q2 2026. Q2 was another exceptional quarter for Bahri. We delivered revenues of SAR 6.3 billion and a net profit of SAR 2.7 billion, making this another record quarter and completing an outstanding H1 of the year. Beyond the headline numbers, what really stands out is how the business continued to perform in a very complex and volatile environment. The heightened geopolitical tension and disruption in the Arabian Gulf continued through Q2, followed more recently by the disruption in the Red Sea related to Bab el-Mandeb. These developments have affected trade flows, vessel availability, and the way our customers approach their shipping and logistics requirements.

Basil Abulhamayel: Thank you, Faris. Good day, ladies and gentlemen, welcome to our call for Q2 2026. Q2 was another exceptional quarter for Bahri. We delivered revenues of SAR 6.3 billion and a net profit of SAR 2.7 billion, making this another record quarter and completing an outstanding H1 of the year. Beyond the headline numbers, what really stands out is how the business continued to perform in a very complex and volatile environment. The heightened geopolitical tension and disruption in the Arabian Gulf continued through Q2, followed more recently by the disruption in the Red Sea related to Bab el-Mandeb. These developments have affected trade flows, vessel availability, and the way our customers approach their shipping and logistics requirements.

Speaker #2: Faris: Good day, ladies and gentlemen, and welcome to our call for the second quarter of 2026. The second quarter was another exceptional quarter for Bahri.

Speaker #2: We delivered revenues of 6.3 billion riyals and a net profit of 2.7 billion riyals, making this another record quarter and completing an outstanding first half of the year.

Speaker #2: But beyond the headline numbers, what really stands out is how the business continued to perform in a very complex and volatile Thank you, environment.

Speaker #2: The heights in geopolitical tension and disruption in the Arabian Gulf continued through the second quarter. Followed more recently by the disruption in the Red Sea related to Bab el Mendib, these developments have affected trade flows, vessel availability, and the way our customers approach their shipping and logistics requirements.

Speaker #2: However, in this environment, Bahri teams continue to respond with discipline and agility to serve our customers while keeping safety as our top priority. Our operations continue with resilience, with all of our vessels remaining commercially active during the quarter, including in the Red Sea.

[Company Representative] (Bahri): However, in this environment, Bahri teams continue to respond with discipline and agility to serve our customers while keeping safety as our top priority. Our operations continue with resilience, with all of our vessels remaining commercially active during the quarter, including in the Red Sea. Moreover, Bahri has a global footprint and our teams continue to expand our platform, including new international trade lanes to support long-term growth and resilience. Unfortunately, following quarter end, our VLCC, Wedyan, was involved in a minor incident while transiting the Strait of Hormuz on 7 July, and separately, our chemical tanker, NCC Masa, was also targeted in the Red Sea on 24 July. We are grateful that in both cases, all crew members are safe and both vessels remain seaworthy.

Basil Abulhamayel: However, in this environment, Bahri teams continue to respond with discipline and agility to serve our customers while keeping safety as our top priority. Our operations continue with resilience, with all of our vessels remaining commercially active during the quarter, including in the Red Sea. Moreover, Bahri has a global footprint and our teams continue to expand our platform, including new international trade lanes to support long-term growth and resilience. Unfortunately, following quarter end, our VLCC, Wedyan, was involved in a minor incident while transiting the Strait of Hormuz on 7 July, and separately, our chemical tanker, NCC Masa, was also targeted in the Red Sea on 24 July. We are grateful that in both cases, all crew members are safe and both vessels remain seaworthy.

Speaker #2: Moreover, Bahri has a global footprint, and our teams continue to expand our platform, including new international trade lanes to support long-term growth and resilience.

Speaker #2: Unfortunately, following quarter end, our VLCC with Yan was involved in a minor incident while transiting the Strait of Hormuz on July 7, and separately our chemical tanker NCC Massa was also targeted in the Red Sea on July 24.

Speaker #2: We are grateful that in both cases, all crew members are safe, and both vessels remain seaworthy. To be clear, any reports regarding other Bahri vessels being hit are unverified and should be treated as rumors unless confirmed by the relevant authorities through official communication channels.

[Company Representative] (Bahri): To be clear, any reports regarding other Bahri vessels being hit are unverified and should be treated as rumors unless confirmed by the relevant authorities through official communication channels. Importantly, we maintain a zero fatality and zero oil spill record, and our lost time injury rate improved to 0.13 injuries per million work hours during Q2 versus 0.39 one year ago. This reflects the continued professionalism of our crews at sea and the capability of our in-house ship management teams that are a backbone of our operations. During this volatile period, our scale, our fleet, our customer relationships, and our ability to respond to changing market conditions all came together to deliver our results. Let's move now to our fleet update. During the quarter, we acquired five IMO2 MR chemical tankers for Bahri Chemicals and products.

Basil Abulhamayel: To be clear, any reports regarding other Bahri vessels being hit are unverified and should be treated as rumors unless confirmed by the relevant authorities through official communication channels. Importantly, we maintain a zero fatality and zero oil spill record, and our lost time injury rate improved to 0.13 injuries per million work hours during Q2 versus 0.39 one year ago. This reflects the continued professionalism of our crews at sea and the capability of our in-house ship management teams that are a backbone of our operations. During this volatile period, our scale, our fleet, our customer relationships, and our ability to respond to changing market conditions all came together to deliver our results. Let's move now to our fleet update. During the quarter, we acquired five IMO2 MR chemical tankers for Bahri Chemicals and products.

Speaker #2: Importantly, we maintain a zero fatality and zero oil spill record, and our lost time injury rate improved to 0.13 injuries per million work hours during the second quarter versus 0.39 one year ago.

Speaker #2: This reflects the continued professionalism of our crews at sea and the capability of our in-house ship management teams that are a backbone of our operations.

Speaker #2: During this volatile period, our scale, our fleet, our customer relationships, and our ability to respond to changing market conditions all came together to deliver our results.

Speaker #2: Let's move now to our fleet update, during the quarter we acquired 5 IMO 2MR chemical tankers for Bahri Chemicals and products. These vessels were previously operated under long-term leases and so we and so were seamlessly integrated into our own fleet.

[Company Representative] (Bahri): These vessels were previously operated under long-term leases, were seamlessly integrated into our own fleet. The value of this opportunistic acquisition amounted to SAR 478 million. Four of the vessels were commercially deployed in late Q2, while the fifth entered service in July. We also sold one older VLCC during the quarter as part of our modernization side of our fleet program. In all, these transactions resulted in a record fleet size of 107 vessels. Following the record quarter, we signed a contract for two additional RoCon new-build vessels to be delivered in 2030. With this addition, our new build order book now stands at 12 vessels, including six Ultramax carriers, two OSVs, and four RoCon vessels with deliveries in H2 2026 all the way to 2030. Overall, these transactions reflect the discipline and strategic vision we apply to our fleet investments.

Basil Abulhamayel: These vessels were previously operated under long-term leases, were seamlessly integrated into our own fleet. The value of this opportunistic acquisition amounted to SAR 478 million. Four of the vessels were commercially deployed in late Q2, while the fifth entered service in July. We also sold one older VLCC during the quarter as part of our modernization side of our fleet program. In all, these transactions resulted in a record fleet size of 107 vessels. Following the record quarter, we signed a contract for two additional RoCon new-build vessels to be delivered in 2030. With this addition, our new build order book now stands at 12 vessels, including six Ultramax carriers, two OSVs, and four RoCon vessels with deliveries in H2 2026 all the way to 2030. Overall, these transactions reflect the discipline and strategic vision we apply to our fleet investments.

Speaker #2: The value of this opportunistic acquisition amounted to 478 million riyals. Four of the vessels were commercially deployed in late Q2, while the fifth entered service in July.

Speaker #2: We also sold one older VLCC during the quarter as part of our modernization of our fleet program. In all, these transactions resulted in a record fleet size of 107 vessels.

Speaker #2: Following the record quarter, we signed a contract for two additional ROCON newbuild vessels to be delivered in 2030. With this addition, our newbuild order book now stands at twelve vessels, including six Ultramax carriers, two OSVs, and four ROCON vessels, with deliveries in the second half of 2026 all the way to 2030.

Speaker #2: Overall, these transactions reflect the discipline and strategic vision we apply to our fleet investments. Let's now take a look at our financials. As mentioned earlier, the second quarter was another record for Bahri.

[Company Representative] (Bahri): Let's now take a look at our financials. As mentioned earlier, Q2 was another record for Bahri. Revenue came in at SAR 6.3 billion, up 2.6 times year on year. The main driver was Bahri Oil, where we saw materially stronger VLCC freight rates and increased chartering activity to meet customer requirements. EBITDA was SAR 3.4 billion, an increase of 3.1 times year on year. EBITDA margin expanded to 54%, reflecting the strength of the freight rate environment, the benefits of scale, and strong execution across the group. Net profit attributable to shareholders reached SAR 2.7 billion, more than six times what we earned in Q2 last year. Net operating cash flows was SAR 2.5 billion, up 280% year on year. Capital expenditure was SAR 547 million, mainly reflecting SAR 478 million related to the acquisition of the five chemical tankers I mentioned earlier.

Basil Abulhamayel: Let's now take a look at our financials. As mentioned earlier, Q2 was another record for Bahri. Revenue came in at SAR 6.3 billion, up 2.6 times year on year. The main driver was Bahri Oil, where we saw materially stronger VLCC freight rates and increased chartering activity to meet customer requirements. EBITDA was SAR 3.4 billion, an increase of 3.1 times year on year. EBITDA margin expanded to 54%, reflecting the strength of the freight rate environment, the benefits of scale, and strong execution across the group. Net profit attributable to shareholders reached SAR 2.7 billion, more than six times what we earned in Q2 last year. Net operating cash flows was SAR 2.5 billion, up 280% year on year. Capital expenditure was SAR 547 million, mainly reflecting SAR 478 million related to the acquisition of the five chemical tankers I mentioned earlier.

Speaker #2: Revenue came in at 6.3 billion riyals, up 2.6 times year-on-year. The main driver was Bahri Oil, where we saw materially stronger VLCC freight rates and increased chartering activity.

Speaker #2: To meet customer requirements, EBITDA was 3.4 billion riyals, an increase of 3.1 times year on year. EBITDA margin expanded to 54%, reflecting the strength of the freight rate environment.

Speaker #2: The benefits of scale and strong execution across the group—net profit attributable to shareholders reached 2.7 billion riyals, more than six times what we earned in Q2 last year.

Speaker #2: Net operating cash flows was 2.5 billion riyals, up 280% year on year. While capital expenditure was 547 million riyals, mainly reflecting 478 million related to the acquisition of the 5 chemical tankers I mentioned earlier.

Speaker #2: Additionally, we realized net proceeds of 215 million riyals through the sale of an older VLCC, which resulted in a gain of 63 million riyals on our P&L.

[Company Representative] (Bahri): Additionally, we realized net proceeds of SAR 215 million through the sale of an older VLCC, which resulted in a gain of SAR 63 million on our P&L. Free cash flow was positive at SAR 2 billion for the quarter, compared to an outflow of SAR 1 billion a year ago. This strong cash generation also supported further balance sheet improvement, which we will cover in more detail in the upcoming slide. As mentioned, we ended the quarter with 107 vessels, the largest in Bahri's history, while maintaining a healthy balance sheet. Over the last 12 months, net debt declined by SAR 3.4 billion to SAR 6.6 billion at the end of June, led by strong cash generation and de-leveraging of our balance sheet.

Basil Abulhamayel: Additionally, we realized net proceeds of SAR 215 million through the sale of an older VLCC, which resulted in a gain of SAR 63 million on our P&L. Free cash flow was positive at SAR 2 billion for the quarter, compared to an outflow of SAR 1 billion a year ago. This strong cash generation also supported further balance sheet improvement, which we will cover in more detail in the upcoming slide. As mentioned, we ended the quarter with 107 vessels, the largest in Bahri's history, while maintaining a healthy balance sheet. Over the last 12 months, net debt declined by SAR 3.4 billion to SAR 6.6 billion at the end of June, led by strong cash generation and de-leveraging of our balance sheet.

Speaker #2: Free cash flow was positive at 2 billion riyals for the quarter, compared to an outflow of 1 billion a year ago. This strong cash generation also supported further balance sheet improvement, which we will cover in more detail in the upcoming slide.

Speaker #2: As mentioned, we ended the quarter with 107 vessels, the largest in Bahri's history, while maintaining a healthy balance sheet. Over the last 12 months, net debt declined by SAR 3.4 billion to SAR 6.6 billion at the end of June, led by strong cash generation and deleveraging of our balance sheet.

Speaker #2: With lower net debt and stronger EBITDA, our net debt to EBITDA ratio improved significantly to 0.72 times compared to 2.19 times at the end of Q2 last year.

[Company Representative] (Bahri): With lower net debt and stronger EBITDA, our net debt to EBITDA ratio improved significantly to 0.72 times compared to 2.19 times at the end of Q2 last year. Our disciplined capital allocation and balance sheet flexibility ensures that Bahri is well-positioned to weather short-term volatility and capture future growth. From a high-level perspective, all of our BUs contributed positively to revenue and EBITDA growth this quarter. Bahri Oil was again the key driver of growth. The remaining business units contributed to revenue as shipping rates generally increased year on year. The others category includes income from associated companies, marine services, and corporate items. This segment had a positive SAR 147 million impact to EBITDA year on year, primarily reflecting a SAR 233 million contribution by our affiliate Petredec given favorable LPG market conditions. Now, let's drill down into each of the business units.

Basil Abulhamayel: With lower net debt and stronger EBITDA, our net debt to EBITDA ratio improved significantly to 0.72 times compared to 2.19 times at the end of Q2 last year. Our disciplined capital allocation and balance sheet flexibility ensures that Bahri is well-positioned to weather short-term volatility and capture future growth. From a high-level perspective, all of our BUs contributed positively to revenue and EBITDA growth this quarter. Bahri Oil was again the key driver of growth. The remaining business units contributed to revenue as shipping rates generally increased year on year. The others category includes income from associated companies, marine services, and corporate items. This segment had a positive SAR 147 million impact to EBITDA year on year, primarily reflecting a SAR 233 million contribution by our affiliate Petredec given favorable LPG market conditions. Now, let's drill down into each of the business units.

Speaker #2: Our disciplined capital allocation and balance sheet flexibility ensures that Bahri is well positioned to weather short-term volatility and capture future growth. From a high-level perspective, all of our BUs contributed positively to revenue and EBITDA growth this quarter.

Speaker #2: Bahri Oil was again the key driver of growth. The remaining business units contributed to revenue as shipping rates generally increased year on year. The 'Others' category includes income from associated companies, marine services, and corporate items.

Speaker #2: This segment had a positive SAR 147 million impact to EBITDA year on year, primarily reflecting a SAR 233 million contribution by our affiliate PetroDeck, given favorable LPG market conditions.

Speaker #2: Now let's drill down into each of the business units. In Bahri Oil, revenue increased 3.7 times year on year due to stronger VLCC rates and elevated customer demand, which were met by higher trading days and increased charter ends.

[Company Representative] (Bahri): In Bahri Oil, revenue increased 3.7x year-on-year due to stronger VLCC rates and elevated customer demand, which were met by higher trading days and increased charter ends. This translated into an EBITDA growing 3.9x and margins improving as a result of a stronger freight rate environment and SAR 63 million gain on the sale of one of our VLCCs. Market conditions continue to remain supportive given the tighter vessel availability and geopolitical risk premium. We saw trade routes shift to longer voyages, and as a result, global ton-mile increased during the H1. For example, the shift in Saudi crude exports from the Red Sea through Yanbu has added an additional 4 to 5 days to our routes to Asia. Looking ahead, Bahri Oil expects market visibility to remain closely linked to regional geopolitical developments.

Basil Abulhamayel: In Bahri Oil, revenue increased 3.7x year-on-year due to stronger VLCC rates and elevated customer demand, which were met by higher trading days and increased charter ends. This translated into an EBITDA growing 3.9x and margins improving as a result of a stronger freight rate environment and SAR 63 million gain on the sale of one of our VLCCs. Market conditions continue to remain supportive given the tighter vessel availability and geopolitical risk premium. We saw trade routes shift to longer voyages, and as a result, global ton-mile increased during the H1. For example, the shift in Saudi crude exports from the Red Sea through Yanbu has added an additional 4 to 5 days to our routes to Asia. Looking ahead, Bahri Oil expects market visibility to remain closely linked to regional geopolitical developments.

Speaker #2: This translated into an EBITDA growing 3.9 times and margins improving as a result of a stronger freight rate environment and 63 million gain on a sale of one of our VLCCs.

Speaker #2: Market conditions continue to remain supportive, given the tighter vessel availability and geopolitical risk premium. We saw trade routes shift to longer voyages and, as a result, global ton-mile increase during the first half.

Speaker #2: For example, the shift in Saudi crude exports from the Red Sea through Yanbu has added an additional 4 to 5 days to our routes to Asia.

Speaker #2: Looking ahead, Bahri Oil expects market visibility to remain closely linked to regional geopolitical developments. Meanwhile, we are staying focused on disciplined commercial execution, optimized fleet deployment, and flexibility in meeting customer requirements.

[Company Representative] (Bahri): Meanwhile, we are staying focused on disciplined commercial execution, optimized fleet deployment, and flexibility in meeting customer requirements. Turning to our Chemicals business, revenue increased 17% year-on-year while EBITDA grew 53%, with margin expanding meaningfully to 57%. The strong growth in both EBITDA and EBITDA margin reflects the optimization of cargo mix towards higher margin clean products, further supported by a positive shift in the revenue mix towards higher margin owned vessels. During the quarter, the business unit acquired 5 IMO2 MR chemical tankers that were previously operated under long-term leases. 4 of the vessels entered commercial deployment late in the quarter, while the fifth entered service in July after quarter end. At the same time, the lease contract for 1 chemical tanker expired during the quarter, and as a result, the long-term lease fleet stands at 2 vessels.

Basil Abulhamayel: Meanwhile, we are staying focused on disciplined commercial execution, optimized fleet deployment, and flexibility in meeting customer requirements. Turning to our Chemicals business, revenue increased 17% year-on-year while EBITDA grew 53%, with margin expanding meaningfully to 57%. The strong growth in both EBITDA and EBITDA margin reflects the optimization of cargo mix towards higher margin clean products, further supported by a positive shift in the revenue mix towards higher margin owned vessels. During the quarter, the business unit acquired 5 IMO2 MR chemical tankers that were previously operated under long-term leases. 4 of the vessels entered commercial deployment late in the quarter, while the fifth entered service in July after quarter end. At the same time, the lease contract for 1 chemical tanker expired during the quarter, and as a result, the long-term lease fleet stands at 2 vessels.

Speaker #2: Turning to our chemicals business, revenue increased 17% year on year, while EBITDA grew 50% 53% with margin expanding spending meaningfully to 57%. The strong growth in both EBITDA and EBITDA margin reflects the optimization of cargo mixed towards higher margin clean products, further supported by a positive shift in the revenue mix towards higher margin owned vessels.

Speaker #2: During the quarter, the business unit acquired five IMO 2MR chemical tankers that were previously operated under long-term leases. Four of the vessels entered commercial deployment late in the quarter, while the fifth entered service in July after quarter end.

Speaker #2: At the same time, the lease contract for one chemical tanker expired during the quarter and, as a result, the long-term lease leased fleet stands at 2 vessels.

Speaker #2: Looking ahead, the business unit anticipates continued volatility, given the geopolitical disruptions in the Straits of Hormuz and Bab el Mendib, along with market seasonality and shifting cargo flows.

[Company Representative] (Bahri): Looking ahead, the business unit anticipates continued volatility given the geopolitical disruptions in the Strait of Hormuz and Bab el-Mandeb, along with market seasonality and shifting cargo flows. However, the BU's fleet has a broad global footprint, which partly mitigates its exposure to the current regional risks. Against this backdrop, the BU will continue to focus on protecting earnings quality, optimizing fleet utilization, and expanding its customer base. Moving on to the Logistics business. This business unit delivered a strong Q2, with revenue increasing 58% year-on-year to SAR 437 million. EBITDA increased 154% to SAR 97 million while margin expanded to 22%, compared with 14% in the same quarter last year. The improvement was across both shipping and non-shipping segments of the BU. Bahri Line, the shipping segment, benefited from higher trade activity, stronger freight rates, and improved market access.

Basil Abulhamayel: Looking ahead, the business unit anticipates continued volatility given the geopolitical disruptions in the Strait of Hormuz and Bab el-Mandeb, along with market seasonality and shifting cargo flows. However, the BU's fleet has a broad global footprint, which partly mitigates its exposure to the current regional risks. Against this backdrop, the BU will continue to focus on protecting earnings quality, optimizing fleet utilization, and expanding its customer base. Moving on to the Logistics business. This business unit delivered a strong Q2, with revenue increasing 58% year-on-year to SAR 437 million. EBITDA increased 154% to SAR 97 million while margin expanded to 22%, compared with 14% in the same quarter last year. The improvement was across both shipping and non-shipping segments of the BU. Bahri Line, the shipping segment, benefited from higher trade activity, stronger freight rates, and improved market access.

Speaker #2: However, the BU's fleet has a broad global footprint, which partly mitigates its exposure to the current regional risks. Against this backdrop, the BU will continue to focus on protecting earnings quality, optimizing fleet utilization, and expanding its customer base.

Speaker #2: Moving on to the logistics business, this business unit delivered a strong second quarter with revenue increasing 50% 8% year on year, to 437 million riyals.

Speaker #2: EBITDA increased 154% to 97 million riyals, while the margin expanded to 22% compared with 14% in the same quarter last year. The improvement was seen across both shipping and non-shipping segments of the BU.

Speaker #2: Bahri Line, the shipping segment, benefited from higher trade activity, stronger freight rates, and improved market access. The segment also saw higher project cargo volumes and the added benefit of the full quarter contribution of the multi-purpose vessel added in June last year.

[Company Representative] (Bahri): The segment also saw higher private cargo volumes and the added benefit of the full quarter contribution of the multipurpose vessel added in June last year. The non-shipping segment, which includes Bahri Logistics and Bahri Air, also performed strongly. This was supported by shifts in cargo routing patterns as customers adjusted to regional disruption and looked for alternative logistics solutions. As a result, the segment saw stronger demand for cross-border transportation, air charter services, customized end-to-end logistics offerings, and transit solutions through Saudi Arabia. Following quarter end, the BU inaugurated its 95,000 square meter bonded zone warehouse at Jeddah Islamic Port, which is an important milestone in expanding the BU's logistics platform. Notably, the state-of-the-art facility includes a pharmaceutical grade cold storage featuring the most advanced technologies in the Kingdom. Looking ahead, the business unit remains focused on profitable growth, expanding specialized service offerings, and opening new international trade routes.

Basil Abulhamayel: The segment also saw higher private cargo volumes and the added benefit of the full quarter contribution of the multipurpose vessel added in June last year. The non-shipping segment, which includes Bahri Logistics and Bahri Air, also performed strongly. This was supported by shifts in cargo routing patterns as customers adjusted to regional disruption and looked for alternative logistics solutions. As a result, the segment saw stronger demand for cross-border transportation, air charter services, customized end-to-end logistics offerings, and transit solutions through Saudi Arabia. Following quarter end, the BU inaugurated its 95,000 square meter bonded zone warehouse at Jeddah Islamic Port, which is an important milestone in expanding the BU's logistics platform. Notably, the state-of-the-art facility includes a pharmaceutical grade cold storage featuring the most advanced technologies in the Kingdom. Looking ahead, the business unit remains focused on profitable growth, expanding specialized service offerings, and opening new international trade routes.

Speaker #2: The non-shipping segment, which includes Bahri Logistics and Bahri Air, also performed strongly. This was supported by shifts in cargo routing patterns as customers adjusted to regional disruption and looked for alternative logistics solutions.

Speaker #2: As a result, the segment saw a stronger demand for cross-border transportation, air charter services, customized end-to-end logistics offerings, and transit solutions through Saudi Arabia.

Speaker #2: Following quarter end, the BU inaugurated its 95,000 square meter bonded zone warehouse at Jeddah Islamic Port, which is an important milestone in expanding the BU's logistics platform.

Speaker #2: Notably, the state-of-the-art facility includes pharmaceutical-grade cold storage, featuring the most advanced technologies in the Kingdom. Looking ahead, the business unit remains focused on profitable growth, expanding specialized service offerings, and opening new international trade routes.

Speaker #2: Wrapping up with Bahri Dry Bulk, revenue saw strong growth as performance was driven by effective fleet management, strategic deployment, higher freight rates, and increased chartering activity to capture additional demand.

[Company Representative] (Bahri): Wrapping up with Bahri Dry Bulk, revenue saw strong growth as performance was driven by effective fleet management, strategic deployment, higher freight rates, and increased chartering activity to capture additional demand. This supported a strong increase in EBITDA, with margins improving across our own fleet as well as chartered vessels given favorable freight rates. Dry bulk market conditions continued to strengthen during the period, supported by tighter vessel availability and sustained demand for grains, fertilizers, coal, and other dry bulk cargoes. Looking ahead, Bahri will remain focused on disciplined commercial execution and operational continuity to support customer requirements given the volatile operating environment. In summary, our performance in H1 2026 demonstrates the execution of our strategy, especially in this very challenging environment.

Basil Abulhamayel: Wrapping up with Bahri Dry Bulk, revenue saw strong growth as performance was driven by effective fleet management, strategic deployment, higher freight rates, and increased chartering activity to capture additional demand. This supported a strong increase in EBITDA, with margins improving across our own fleet as well as chartered vessels given favorable freight rates. Dry bulk market conditions continued to strengthen during the period, supported by tighter vessel availability and sustained demand for grains, fertilizers, coal, and other dry bulk cargoes. Looking ahead, Bahri will remain focused on disciplined commercial execution and operational continuity to support customer requirements given the volatile operating environment. In summary, our performance in H1 2026 demonstrates the execution of our strategy, especially in this very challenging environment.

Speaker #2: This supported a strong increase in EBITDA with margins improving across our own fleet as well as chartered vessels, given favorable freight rates. Dry Bulk market conditions continue to strengthen during the period supported by tighter vessel availability and sustained demand for grains, fertilizers, coal, and other dry bulk cargoes.

Speaker #2: Looking ahead, the BU will remain disciplined, commercial remain focused on disciplined commercial execution, and operational continuity to support customer requirements given the volatile operating environment.

Speaker #2: In summary, our performance in the first half of '26 demonstrates the execution of our strategy. Especially in this very challenging environment, Bahri's priorities remain clear: operate safely, serve our customers reliably, maintain disciplined commercial execution, deploy our fleet with agility and continue creating long-term value for our shareholders.

[Company Representative] (Bahri): Bahri's priorities remain clear: operate safely, serve our customers reliably, maintain disciplined commercial execution, deploy our fleet with agility, and continue creating long-term value for our shareholders. Safety will always come first and remains a key guardrail in every decision we make. As we enter the H2 of the year, we do so from a position of strength. We have the largest owned fleet in Bahri's history. We are more global than ever, with deeper integration across the supply chain, and our balance sheet is significantly stronger. This gives us increased flexibility and resilience, with deeper capabilities to navigate market volatility. Looking ahead, we will remain focused on growing our business with disciplined execution, diversifying the business while building end-to-end logistics capabilities and optimizing our fleet to ensure we continue to add value to our shareholders. Thank you for your time and your continued trust in Bahri.

Basil Abulhamayel: Bahri's priorities remain clear: operate safely, serve our customers reliably, maintain disciplined commercial execution, deploy our fleet with agility, and continue creating long-term value for our shareholders. Safety will always come first and remains a key guardrail in every decision we make. As we enter the H2 of the year, we do so from a position of strength. We have the largest owned fleet in Bahri's history. We are more global than ever, with deeper integration across the supply chain, and our balance sheet is significantly stronger. This gives us increased flexibility and resilience, with deeper capabilities to navigate market volatility. Looking ahead, we will remain focused on growing our business with disciplined execution, diversifying the business while building end-to-end logistics capabilities and optimizing our fleet to ensure we continue to add value to our shareholders. Thank you for your time and your continued trust in Bahri.

Speaker #2: Safety will always come first and remains a key guardrail in every decision we make. As we enter the second half of the year, we do so from a position of strength.

Speaker #2: We have the largest owned fleet in Bahri's history. We are more global than ever, with deeper integration across the supply chain, and our balance sheet is significantly stronger.

Speaker #2: This gives us increased flexibility and resilience with deeper capabilities to navigate market volatility. Looking ahead, we will remain focused on growing our business with disciplined execution, diversifying the business while building end-to-end logistics capabilities, and optimizing our fleet to ensure we continue to add value to our shareholders.

Speaker #2: Thank you for your time and your continued trust in Bahri. With that, I will pass it over to Faris to open the Q&A session.

[Company Representative] (Bahri): With that, I will pass it over to Faris to open the Q&A session. Thank you.

Basil Abulhamayel: With that, I will pass it over to Faris to open the Q&A session. Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you, Fasil, for the presentation. We will now open the floor for the questions so please go ahead, Iyad, and start taking the questions from the investors.

Faris Al-Rabiah: Thank you, Bassam, for the presentation. We will now open the floor for the questions. Please go ahead, Iyad, and start taking the questions from the investors.

Faris Al Gahtani: Thank you, Bassam, for the presentation. We will now open the floor for the questions. Please go ahead, Iyad, and start taking the questions from the investors.

Speaker #3: Thank you so much. Ladies and gentlemen, please if you have any questions, please raise your hand or type in the chat box. The first question comes from the line of Rakan Abu Duyan.

Iyad Al-Humaydan: Thank you so much. Ladies and gentlemen, please, if you have any questions, please raise your hand or type in the chat box. The first question comes from the line of Rakan Abunayyan. Rakan, please unmute locally and go ahead. Before that, please mention your company name as well. Okay, I think Rakan is not available. Okay, the next question comes from the line of Brennan Ito. Please mention your company and limit your questions to one. Can you please unmute locally?

[Company Representative] (Bahri): Thank you so much. Ladies and gentlemen, please, if you have any questions, please raise your hand or type in the chat box. The first question comes from the line of Rakan Abunayyan. Rakan, please unmute locally and go ahead. Before that, please mention your company name as well. Okay, I think Rakan is not available. Okay, the next question comes from the line of Brennan Eatough. Please mention your company and limit your questions to one. Can you please unmute locally?

Speaker #3: Rakan, please unmute locally and go ahead. And before that, please mention your company name as well. Okay. I think Rakan is not available. Okay.

Speaker #3: The next question comes from the line of Brennan Ito. Please mention your company and limit your questions to one. Can you please unmute locally?

Speaker #4: Yeah. Hello. Am I audible right now?

Brennan Ito: Yeah, hello. Am I audible right now?

Brennan Eatough: Yeah, hello. Am I audible right now?

Speaker #3: Yes, you are.

Iyad Al-Humaydan: Yes, you are.

[Company Representative] (Bahri): Yes, you are.

Speaker #4: Yes.

Faris Al-Rabiah: Yes.

Faris Al Gahtani: Yes.

Speaker #3: Fantastic. Brennan Itoff, Riad Capital. Great to be speaking with you guys. Congrats on the quarter and all those regular things. So look, just right on the nose, are your vessels transiting Hormuz routinely now, or case by case?

Brennan Ito: Fantastic. Brennan Ito, Riyad Capital. Great to be speaking with you guys. Congrats on the quarter and all those regular things. Look, just right on the nose, are your vessels transiting Hormuz routinely now, or case by case? What would you say is the binding constraint? Is it insurance, crew, charter instruction, things of that nature? Because obviously the VLCC rates and those, even for product tankers, they're pretty high. It'd be interesting to just have you touch on that. What's the status? I'll leave the other stuff for everybody else in the chat box then, just to one.

Brennan Eatough: Fantastic. Brennan Eatough, Riyad Capital. Great to be speaking with you guys. Congrats on the quarter and all those regular things. Look, just right on the nose, are your vessels transiting Hormuz routinely now, or case by case? What would you say is the binding constraint? Is it insurance, crew, charter instruction, things of that nature? Because obviously the VLCC rates and those, even for product tankers, they're pretty high. It'd be interesting to just have you touch on that. What's the status? I'll leave the other stuff for everybody else in the chat box then, just to one.

Speaker #3: And what would you say is the binding constraint? Is it insurance, crew, charter instruction, things of that nature? Because obviously, the VLCC rates and those even for product tankers, they're pretty high.

Speaker #3: So it'd be interesting to just have you touch on that. What's the status? And then I'll leave the other stuff for everybody else in the chat box then just to one.

Speaker #1: Okay. Thank you, for the question. The answer to your question is yes, we are transiting on a case by case. And again, when we transit, as I mentioned, the security is the top priority.

[Company Representative] (Bahri): Okay. Thank you for the question. The answer to your question is yes, we are transiting on a case by case. Again, when we transit, as I mentioned, the security is the top priority and these transits are coordinated with all the relevant authorities. The answer is yes, we are transiting. I'll just leave it at that.

Basil Abulhamayel: Okay. Thank you for the question. The answer to your question is yes, we are transiting on a case by case. Again, when we transit, as I mentioned, the security is the top priority and these transits are coordinated with all the relevant authorities. The answer is yes, we are transiting. I'll just leave it at that.

Speaker #1: And these transits are coordinated with all the relevant authorities. So the answer is yes, we are transiting. And I'll just leave it at that.

Speaker #3: Okay. I really appreciate that. And if there's if I could just take one more. Is there has there been any disruption to loadings or berth availability or insurance terms?

Brennan Ito: Okay, I really appreciate that. If I could just take one more. Has there been any disruption to loadings or berth availability or insurance terms?

Brennan Eatough: Okay, I really appreciate that. If I could just take one more. Has there been any disruption to loadings or berth availability or insurance terms?

Speaker #1: Brennan, I'm sorry because the queue is quite long.

Iyad Al-Humaydan: Brennan, I'm sorry, because the queue is quite long and-

[Company Representative] (Bahri): Brennan, I'm sorry, because the queue is quite long and-

Speaker #3: Fair enough.

Brennan Ito: Fair enough

Brennan Eatough: Fair enough

Speaker #1: I have instructions from their management.

Iyad Al-Humaydan: I have instructions from the management.

[Company Representative] (Bahri): I have instructions from the management.

Speaker #3: All good. Do your thing. Cheers.

Brennan Ito: All good. Do your thing. Cheers.

Brennan Eatough: All good. Do your thing. Cheers.

Speaker #1: I promise you, I will come back to you. All right? Okay. So, the next question is from the line of Fahad Sheikh. Fahad, please unmute locally and go ahead.

Iyad Al-Humaydan: I promise you, I will come back to you.

[Company Representative] (Bahri): I promise you, I will come back to you.

Brennan Ito: Okay, fine.

Brennan Eatough: Okay, fine.

Iyad Al-Humaydan: All right. Okay, the next question is from the line of Fahad Shaikh. Fahad, please unmute locally and go ahead.

[Company Representative] (Bahri): All right. Okay, the next question is from the line of Fahad Shaikh. Fahad, please unmute locally and go ahead.

Speaker #5: Hi, good afternoon, and thank you for the presentation. Maybe just following up on the previous question—given what's been happening in Bab-el-Mandeb recently—I wanted to get some color from you in terms of whether you are transiting through the Red Sea, specifically through Bab-el-Mandeb. I understand there are some ways to go through Suez as well, but fully loaded VLCCs can't go through that.

Fahad Shaikh: Hi, good afternoon, and thank you for the presentation. Maybe just following on from the previous question, given what's been happening in Bab el-Mandeb recently, just to get some color from you in terms of, are you transiting through the Red Sea, through Bab el-Mandeb? I understand there are some ways to go through the Suez as well, fully loaded VLCCs can't go through that. Maybe just to get a bit of color in terms of what's happening right now. Thank you.

Fahad Shaikh: Hi, good afternoon, and thank you for the presentation. Maybe just following on from the previous question, given what's been happening in Bab el-Mandeb recently, just to get some color from you in terms of, are you transiting through the Red Sea, through Bab el-Mandeb? I understand there are some ways to go through the Suez as well, fully loaded VLCCs can't go through that. Maybe just to get a bit of color in terms of what's happening right now. Thank you.

Speaker #5: So, maybe just to get a bit of color in terms of what's happening right now. Thank you.

Speaker #1: Okay. Thank you, Fahad, for the question. We basically serve our customers where they need us to serve them. So, again, without getting into a lot of detail—as you can imagine, for security purposes—we continue to service our customers.

[Company Representative] (Bahri): Okay. Thank you, Fahad, for the question. We basically serve our customers where they need us to serve them. Again, without getting a lot of detail for, as you can imagine, security purposes, we continue to service our customers. We are doing a lot of transport in the north of the Red Sea to the Sumed pipeline, supporting our key client, obviously, Aramco, in their strategy of taking crude from the north through the Sumed line into Ain Sokhna in the Med.

Basil Abulhamayel: Okay. Thank you, Fahad, for the question. We basically serve our customers where they need us to serve them. Again, without getting a lot of detail for, as you can imagine, security purposes, we continue to service our customers. We are doing a lot of transport in the north of the Red Sea to the Sumed pipeline, supporting our key client, obviously, Aramco, in their strategy of taking crude from the north through the Sumed line into Ain Sokhna in the Med.

Speaker #1: ...of transport in the north of the Red Sea to the Sumed pipeline, supporting our key clients—obviously Aramco—in their strategy of taking crude from the north through the Sumed line into Ain Sokhna.

Speaker #1: In the Med.

Speaker #5: Perfect. Thank you.

Fahad Shaikh: Perfect. Thank you.

Fahad Shaikh: Perfect. Thank you.

Speaker #3: Thank you. The next question is from the line of Shahad Esemak. Shahad, please mention your company. You are unmuted right now. Please unmute locally and go ahead.

Iyad Al-Humaydan: Thank you. The next question is from the line of Shahad Alsemak. Shahad, please mention your company. You are unmuted right now. Please unmute locally and go ahead.

[Company Representative] (Bahri): Thank you. The next question is from the line of Shahd El Sammak. Shahd, please mention your company. You are unmuted right now. Please unmute locally and go ahead.

Shahad Alsemak: Am I audible?

Shahd El Sammak: Am I audible?

Speaker #3: Yes, you are.

Iyad Al-Humaydan: Yes, you are.

[Company Representative] (Bahri): Yes, you are.

Speaker #6: Yes. This is Shahad from Quincy Capital. I just wanted to ask you about so previously, we only saw the charter ends in the chemicals business unit, and now we've been seeing more charters in the oil and the dry oil and so on.

Shahad Alsemak: Yes. This is Shahad from Quantero Capital. I just wanted to ask you about, so previously we only saw the charter ends in the chemicals business unit, and now we've been seeing more charters in the oil and the dry bulk and so on. What's your take on the impact on the margins for this?

Shahd El Sammak: Yes. This is Shahd from Quencia Capital. I just wanted to ask you about, so previously we only saw the charter ends in the chemicals business unit, and now we've been seeing more charters in the oil and the dry bulk and so on. What's your take on the impact on the margins for this?

Speaker #6: So what's your take on the impact of on the margins for this?

Speaker #1: Well, obviously, I mean, it's the margin on a charter is lower than the fully owned. I think the what you're seeing, the spike on the charter end for the oil and the dry bulk is basically the peak that we have now, the spike in demand for capacity.

[Company Representative] (Bahri): Well, obviously, the margin on a charter is lower than the fully owned. I think what you're seeing, the spike on the charter end for the oil and the dry bulk, basically the peak that we have now, the spike in demand for capacity. Obviously it will be a lower margin, however, the rates have gone up significantly, and we're chartering in these vessels to meet the spike in demand. Obviously on an overall basis, you're going to see definitely a big increase in profitability. However, the margin on these chartered in will be less, but still quite significant nonetheless.

Basil Abulhamayel: Well, obviously, the margin on a charter is lower than the fully owned. I think what you're seeing, the spike on the charter end for the oil and the dry bulk, basically the peak that we have now, the spike in demand for capacity. Obviously it will be a lower margin, however, the rates have gone up significantly, and we're chartering in these vessels to meet the spike in demand. Obviously on an overall basis, you're going to see definitely a big increase in profitability. However, the margin on these chartered in will be less, but still quite significant nonetheless.

Speaker #1: And, given, obviously, it will be a lower margin; however, the rates have gone up significantly. And we're chartering in these vessels to meet the spike in demand.

Speaker #1: So obviously, on an overall basis, you're going to see definitely a big increase in profitability. However, the margin on these chartered in will be less, but still quite significant.

Speaker #1: Nonetheless.

Speaker #6: So are we supposed to expect this still going on to the rest of the year?

Shahad Alsemak: Are we supposed to expect this still going on through the rest of the year?

Shahd El Sammak: Are we supposed to expect this still going on through the rest of the year?

[Company Representative] (Bahri): Are you asking is the charters expected to go on for the rest of the year?

Basil Abulhamayel: Are you asking is the charters expected to go on for the rest of the year?

Speaker #1: Are you asking is the charters expected to go on to the rest of the year?

Speaker #6: Yes. Are they more long-term charters, or are they all just short-term because of the situation?

Shahad Alsemak: Yes. Are they more long-term charters or are they all just short-term because of the situation?

Shahd El Sammak: Yes. Are they more long-term charters or are they all just short-term because of the situation?

Speaker #1: No, no. No, no. These are not long-term. It's hard to tell you exactly for how long because the visibility is not that clear. However, these are intended to be short-term to meet the spikes that we have from customers.

[Company Representative] (Bahri): No, these are not long-term. It's hard to tell you exactly for how long, because the visibility is not that clear. However, these are intended to be short-term to meet the spikes that we have from customers.

Basil Abulhamayel: No, these are not long-term. It's hard to tell you exactly for how long, because the visibility is not that clear. However, these are intended to be short-term to meet the spikes that we have from customers.

Speaker #6: Great.

Shahad Alsemak: Great.

Shahd El Sammak: Great.

Speaker #1: Now, would this be one month, two months, three months? It's hard to tell.

[Company Representative] (Bahri): Now, whether it be one month, two months, three months, it's hard to tell.

Basil Abulhamayel: Now, whether it be one month, two months, three months, it's hard to tell.

Speaker #6: Okay. Okay. Thank you. Get back to.

Shahad Alsemak: Okay. Thank you. We'll get back in touch.

Shahd El Sammak: Okay. Thank you. We'll get back in touch.

Speaker #3: Thank you. The next question is from the line of Taha Javid. Taha, please mention your company and unmute locally and go ahead.

Iyad Al-Humaydan: Thank you, Shahad. Thank you. The next question is from the line of Taha Javed. Taha, please mention your company and unmute locally and go ahead.

[Company Representative] (Bahri): Thank you, Shahd. Thank you. The next question is from the line of Taha Javed. Taha, please mention your company and unmute locally and go ahead.

Speaker #4: Jihad and the management. I'm from Ames Investments. So just on the Suez Canal rerouting, obviously, the number of days will now increase if you have to deliver to Asia.

Taha Javed: GR and the management. I'm from AIMS Holding. Just on the Suez Canal rerouting, obviously the number of days will now increase if you have to deliver to Asia. How does that work for the company in terms of revenue and net profitability? Like the main client, Aramco, it pays you per day, freight rate, whatever longer time you get, so net-net more revenue for you guys, or they pay a fixed amount regardless of the time that it takes?

Taha Javed: GR and the management. I'm from AIMS Holding. Just on the Suez Canal rerouting, obviously the number of days will now increase if you have to deliver to Asia. How does that work for the company in terms of revenue and net profitability? Like the main client, Aramco, it pays you per day, freight rate, whatever longer time you get, so net-net more revenue for you guys, or they pay a fixed amount regardless of the time that it takes?

Speaker #4: So how does that work for the company in terms of revenue and net profitability? The main client, Aramco, it takes you pays you per day, fair trade, whatever longer time you get.

Speaker #4: So net-net more revenue for you guys, or they pay a fixed amount regardless of the time that it takes?

Speaker #1: No, no. Obviously, now, this new route to go to Asia, you would add roughly another 40 days to get to Asia if you're going to go through the Suez and out of the Med.

[Company Representative] (Bahri): No. Obviously now, this new route to go to Asia, you would add roughly another 40 days to get to Asia if you're going to go through the Suez and out of the Med. Our contracts are market-based, no, it's not a fixed. We will get definitely more revenue for those trips. The daily rate is high and the number of days is increased. When you increase this ton-mile, you effectively shrink the capacity, because now it takes longer for that vessel to go and come. That's what drives these charters, these daily rates quite high. We have increased daily rate and we have increased voyage days. You multiply the two and you will get a bigger number, obviously.

Basil Abulhamayel: No. Obviously now, this new route to go to Asia, you would add roughly another 40 days to get to Asia if you're going to go through the Suez and out of the Med. Our contracts are market-based, no, it's not a fixed. We will get definitely more revenue for those trips. The daily rate is high and the number of days is increased. When you increase this ton-mile, you effectively shrink the capacity, because now it takes longer for that vessel to go and come. That's what drives these charters, these daily rates quite high. We have increased daily rate and we have increased voyage days. You multiply the two and you will get a bigger number, obviously.

Speaker #1: And our contracts are market-based. So no, it's not a fixed we will get definitely more revenue for those trips. Because the daily rate is high and the number of days is increased.

Speaker #1: And so when you increase this ton-mile, you effectively shrink the capacity because now it takes longer for that vessel to go and come. And that's what drives these charter these daily rates quite high.

Speaker #1: So we have increased daily rate and we have increased voyage days. So you multiply the two and you get a bigger number, obviously.

Speaker #4: Great. Thank you so much.

Taha Javed: Great. Thank you so much.

Taha Javed: Great. Thank you so much.

Speaker #3: I will take some questions from the chat box, and I'll return back to the audible questions. This is a question from Rakan Abu Rayyan.

Iyad Al-Humaydan: I will take some questions from the chat box and I'll return back to the audible questions. This is a question from Rakan Abunayyan. He had a problem in his mic, I think. He sent his question in the box. He has two questions. How should we think about the fair value of VLCC fleet? Are vessel values as volatile as VLCC market rates?

[Company Representative] (Bahri): I will take some questions from the chat box and I'll return back to the audible questions. This is a question from Rakan Abunayyan. He had a problem in his mic, I think. He sent his question in the box. He has two questions. How should we think about the fair value of VLCC fleet? Are vessel values as volatile as VLCC market rates?

Speaker #3: He couldn't he has a problem in his mic, I think. So he sent his question in the box. So he has two questions. How should we think about the fair value of VLCC fleet?

Speaker #3: Are vessel values as volatile as VLCC market rates?

Speaker #1: I wouldn't say the VLCC rates you're talking about the value of the vessel, right?

[Company Representative] (Bahri): I wouldn't say the VLCC rates. You're talking about the value of the vessel, right?

Basil Abulhamayel: I wouldn't say the VLCC rates. You're talking about the value of the vessel, right?

Speaker #3: Yes. Fair value of the vessel, yeah.

Iyad Al-Humaydan: Yes. Fair value of the vessel, yeah.

[Company Representative] (Bahri): Yes. Fair value of the vessel, yeah.

Speaker #1: Fair value of the vessel, yeah. The fair value of the vessels is high and will continue to be high, we believe. Even before this conflict, asset prices have been increasing.

[Company Representative] (Bahri): Fair value of the vessels. Yeah. The fair value of the vessels is high and will continue to be high, we believe. Even before this conflict, asset prices have been increasing due to increasing demand, and there's not a lot of new builds coming out fast enough. Even before the conflict, asset prices were going up, and now, I think they will continue to go up even higher because as we said, when you have the longer ton-miles, you're effectively decreasing the supply of capacity. We see an upward trend in these asset prices, at least for the near term.

Basil Abulhamayel: Fair value of the vessels. Yeah. The fair value of the vessels is high and will continue to be high, we believe. Even before this conflict, asset prices have been increasing due to increasing demand, and there's not a lot of new builds coming out fast enough. Even before the conflict, asset prices were going up, and now, I think they will continue to go up even higher because as we said, when you have the longer ton-miles, you're effectively decreasing the supply of capacity. We see an upward trend in these asset prices, at least for the near term.

Speaker #1: Due to increasing demand and there's not a lot of new bills coming out fast enough. So even before the conflict, asset prices were going up and now, I think they will continue to go up even higher because as we said, when you have the longer ton-miles, you're effectively decreasing the supply of capacity.

Speaker #1: So we see an upward trend in these asset prices. At least for the near term.

Speaker #3: Okay, thank you. Also, he's asking another question about the capital allocation priorities. Is it repaying debt, fleet expansion, or dividends?

Iyad Al-Humaydan: Okay, thank you. He's asking another question about the capital allocation priorities. Is it repaying debt, fleet expansion, or dividends?

[Company Representative] (Bahri): Okay, thank you. He's asking another question about the capital allocation priorities. Is it repaying debt, fleet expansion, or dividends?

Speaker #1: Okay. Talking about capital allocation priorities. Of course, our priorities are upper end to invest. In the company, to keep the operation running. So this is your sort of maintenance capex and liquidity requirements to keep the company operating and addressing volatility and cash flows.

[Company Representative] (Bahri): Okay. Talking about capital allocation priorities, of course, our priorities are upfront to invest in the company to keep the operation running. This is your maintenance CapEx and liquidity requirements to keep the company operating and addressing volatility and cash flows. Of course, the fleet expansion comes right after that, where we assess our capital investments against a rigorous analysis and meeting certain hurdle rates. Then, of course, the residual will be the dividend distributions.

Basil Abulhamayel: Okay. Talking about capital allocation priorities, of course, our priorities are upfront to invest in the company to keep the operation running. This is your maintenance CapEx and liquidity requirements to keep the company operating and addressing volatility and cash flows. Of course, the fleet expansion comes right after that, where we assess our capital investments against a rigorous analysis and meeting certain hurdle rates. Then, of course, the residual will be the dividend distributions.

Speaker #1: Of course, the fleet expansion comes right after that, where we assess our capital investments against a rigorous analysis and meeting certain hurdle rates. And then, of course, the residual will be the dividend distributions.

Speaker #3: Okay. Thank you. The next question is from the line of Anissa Gerbois. Anissa, please mention your company and unmute locally and go ahead.

Iyad Al-Humaydan: Okay. Thank you. The next question is from the line of Anas Al Jarboua. Anas, please mention your company and unmute locally and go ahead.

[Company Representative] (Bahri): Okay. Thank you. The next question is from the line of Anas Aljarboua. Anas, please mention your company and unmute locally and go ahead.

Speaker #4: Yeah. Am I audible? تسمعني?

Anas Al Jarboua: Am I audible? Can you hear me?

Anas Aljarboua: Am I audible? Can you hear me?

Speaker #3: Yes. Loud and clear.

Iyad Al-Humaydan: Yes. Loud and clear.

[Company Representative] (Bahri): Yes. Loud and clear.

Speaker #4: يعطيكم العافية ومبروك على النتائج. أي هذا couple of questions, but maybe I will ask only one and get back to the queue. I would like to understand the composition of the TCE.

Anas Al Jarboua: I have a couple of questions, maybe I will ask only one and get back to the queue. I would like to understand the composition of the TCE.

Anas Aljarboua: I have a couple of questions, maybe I will ask only one and get back to the queue. I would like to understand the composition of the TCE.

Speaker #1: I'm sorry, could you repeat the question about the composition, Abdallah? Sorry, I didn't clearly hear your question.

[Company Representative] (Bahri): Sorry, the composition? Abdallah, can you repeat? Sorry, it didn't come clear, your question.

Basil Abulhamayel: Sorry, the composition? Abdallah, can you repeat? Sorry, it didn't come clear, your question.

Iyad Al-Humaydan: No.

[Company Representative] (Bahri): No.

Anas Al Jarboua: The state of performance during this period. Yes. From Smart Capital. I didn't mention the company name.

Anas Aljarboua: The state of performance during this period. Yes. From SAB Invest. I didn't mention the company name.

Speaker #4: To the state of form during this period, yes.

Speaker #1: So we didn't get the question that can you repeat?

[Company Representative] (Bahri): Sorry, we didn't get the question. Can you repeat?

Basil Abulhamayel: Sorry, we didn't get the question. Can you repeat?

Speaker #3: We can pick up that, Anissa. If you repeat the question.

Iyad Al-Humaydan: Can you pick up that, Anas? Can you repeat the question?

[Company Representative] (Bahri): Can you pick up that, Anas? Can you repeat the question?

Speaker #4: I want to understand the composition of the TCE because I think there is a two forces driving the TCE rate during this quarter, assuming that you're TCE is slightly tracking some of the benchmark spot.

Anas Al Jarboua: I want to understand the decomposition of the TCE, because I think there is two forces driving the TCE rate during this quarter, assuming that your TCE is slightly tracking some of the benchmark spot. How much of it is coming from the Strait of Hormuz risk premium, and how much of it is coming from the structural ton-mile lengthening during this period?

Anas Aljarboua: I want to understand the decomposition of the TCE, because I think there is two forces driving the TCE rate during this quarter, assuming that your TCE is slightly tracking some of the benchmark spot. How much of it is coming from the Strait of Hormuz risk premium, and how much of it is coming from the structural ton-mile lengthening during this period?

Speaker #4: So, how much of it is coming from the state of forms risk premium, and how much of it is coming from the structural ton-mile lengthening during this period?

Speaker #1: Well, I don't have the actual breakdown with me, but I can say quite a bit of it is coming from the current situation. But I can refer you to our investor relations team to get you more details on that breakdown.

[Company Representative] (Bahri): Well, I don't have the actual breakdown with me, but I can say quite a bit of it is coming from the current situation. I can refer you to our investor relations team to get you more details on that breakdown. Yeah, I'd be happy to get back to you, Anas. This is Sadis, head of IR. I'll get back to you on the details.

Basil Abulhamayel: Well, I don't have the actual breakdown with me, but I can say quite a bit of it is coming from the current situation. I can refer you to our investor relations team to get you more details on that breakdown.

Speaker #3: Yeah. I'll be happy to get back to you, Aniss. This is Faris. Head of IR. I'll get back to you on the details.

Faris Al Gahtani: Yeah, I'd be happy to get back to you, Anas. This is Faris, head of IR. I'll get back to you on the details.

Speaker #4: طيب. Because you don't have the answer to this question, just another one more question. Regarding the chartering activity during this quarter, which showed a massive increase.

Anas Al Jarboua: Because you don't have the answer to this question, just another one more question regarding the charter-in activity during this quarter, which showed a massive increase. How can we understand, let's say, how much of it is fixed, you secure the rate at, given that you have increased it to 40% during this quarter? How much of it is just on spot?

Anas Aljarboua: Because you don't have the answer to this question, just another one more question regarding the charter-in activity during this quarter, which showed a massive increase. How can we understand, let's say, how much of it is fixed, you secure the rate at, given that you have increased it to 40% during this quarter? How much of it is just on spot?

Speaker #4: So how can we understand the, let's say, how much of it is fixed? You secure the rate at giving that you have increased it to 40% during this quarter.

Speaker #4: And how much of it is just on spot?

Speaker #1: So you're asking the charter ends?

[Company Representative] (Bahri): You're asking about the charter-ins?

Basil Abulhamayel: You're asking about the charter-ins?

Speaker #4: Yes.

Anas Al Jarboua: Yes.

Anas Aljarboua: Yes.

Speaker #1: Yeah. So we bring in the chartered ends to meet the spike in demand for requirements for shipping. So we go out, we charter the vessel, and we uncharter it to the customer with a margin, obviously.

[Company Representative] (Bahri): Yeah. We bring in the charter-ins to meet the spike in demand, the requirements for shipping. We go out, we charter the vessel, and then we un-charter it to the customer with a margin, obviously.

Basil Abulhamayel: Yeah. We bring in the charter-ins to meet the spike in demand, the requirements for shipping. We go out, we charter the vessel, and then we un-charter it to the customer with a margin, obviously.

Speaker #4: Which usually used to be 5% EBITDA, going back to 2020 level.

Anas Al Jarboua: Which usually used to be 5% EBITDA, yeah, going back to 2020 level.

Anas Aljarboua: Which usually used to be 5% EBITDA, yeah, going back to 2020 level.

Speaker #1: I don't have the actual percentages. How much is the EBITDA? I don't know. Again, this will be another detail that investor relations can share with you.

[Company Representative] (Bahri): I don't have the actual percentages, how much is the EBITDA, I don't know. Again, this will be another detail that investor relations can share with you.

Basil Abulhamayel: I don't have the actual percentages, how much is the EBITDA, I don't know. Again, this will be another detail that investor relations can share with you.

Speaker #4: Okay. Thank you very much. Fair enough.

Anas Al Jarboua: Okay. Thank you very much. Fair enough.

Anas Aljarboua: Okay. Thank you very much. Fair enough.

Speaker #3: Yeah. The next question is from the line of Ahmed Ishaqi. Ahmed, please mention your company name and unmute locally and go ahead. Ahmed, Ahmed Ishaqi, if you can please unmute locally.

Iyad Al-Humaydan: The next question is from the line of Ahmed Al-Saki. Ahmed, please mention your company name and unmute locally and go ahead. Ahmed? Ahmed Al-Saki, if you can please unmute locally.

[Company Representative] (Bahri): The next question is from the line of Ahmed Zaki. Ahmed, please mention your company name and unmute locally and go ahead. Ahmed? Ahmed Zaki, if you can please unmute locally.

Speaker #4: السلام عليكم. Am I audible?

Ahmed Al-Saki: Am I audible?

Ahmed Zaki: Am I audible?

Speaker #3: Yes, you are.

Iyad Al-Humaydan: Loud and clear.

[Company Representative] (Bahri): Loud and clear.

Speaker #1: Yeah. We can hear you.

[Company Representative] (Bahri): We can hear you.

Basil Abulhamayel: We can hear you.

Speaker #4: It's Ahmed Ishaqi from Seaco Bank, Bahrain. So I have one question about the chemical tankers that were acquired. So you've mentioned that these were on long-term leases and you've acquired them for a capex of 468 million dollars.

Ahmed Al-Saki: It's Ahmed Al-Saki from SICO Bank, Bahrain. I have one question about chemical tankers that were acquired. You've mentioned that these were on long-term leases and you've acquired them for a CapEx of SAR 468 million. Going back to your statement about these tanker, or let's say most shipping assets have risen in value, especially because of the high demand. Why exactly have you purchased these vessels instead of keeping them in charters if you believe that these values are probably elevated given the geopolitical disruptions?

Ahmed Zaki: It's Ahmed Zaki from SICO Bank, Bahrain. I have one question about chemical tankers that were acquired. You've mentioned that these were on long-term leases and you've acquired them for a CapEx of SAR 468 million. Going back to your statement about these tanker, or let's say most shipping assets have risen in value, especially because of the high demand. Why exactly have you purchased these vessels instead of keeping them in charters if you believe that these values are probably elevated given the geopolitical disruptions?

Speaker #4: So going back to your statement about these tanker or let's say most shipping assets have risen in value, especially because of the high demand.

Speaker #4: So why exactly have you purchased these vessels instead of keeping them in charters if you believe that these values are probably elevated given the geopolitical disruptions?

Speaker #1: Yeah. Mumtaz, excellent question. I think in my statement, I mentioned a keyword. And that keyword was opportunistic. This was a transaction that was not your typical transaction that you would see in the current environment.

[Company Representative] (Bahri): Excellent question. I think in my statement, I mentioned a key word, that key word was opportunistic. This was a transaction that was not your typical transaction that you would see in the current environment. We were able to actually get a very good price on these vessels. The owners, at that time, saw the conflict and they didn't want to continue to trade the vessels here, we said, "Look, we want them." Let me just put it this way. We had some leverage on them where we got these vessels at a very competitive price.

Basil Abulhamayel: Excellent question. I think in my statement, I mentioned a key word, that key word was opportunistic. This was a transaction that was not your typical transaction that you would see in the current environment. We were able to actually get a very good price on these vessels. The owners, at that time, saw the conflict and they didn't want to continue to trade the vessels here, we said, "Look, we want them." Let me just put it this way. We had some leverage on them where we got these vessels at a very competitive price.

Speaker #1: We were able to actually get a very good price on these vessels. The owners at that time saw the conflict and they didn't want to sort of continue to trade the vessels.

Speaker #1: Here and we said, look, we want them and we had some let me just put it this way. We had some leverage on them where we got these vessels at a very, very, very competitive price.

Speaker #4: So given the capex 468 million, this is an average of 94 million per vessel. So if you would have wanted to acquire these vessels from the markets, how much would each cost?

Ahmed Al-Saki: Given the CapEx for SAR 168 million, this is an average of SAR 94 million per vessel. If you would've wanted to acquire these vessels from the market, how much would each cost? Just to get some insight about how much they would cost.

Ahmed Zaki: Given the CapEx for SAR 168 million, this is an average of SAR 94 million per vessel. If you would've wanted to acquire these vessels from the market, how much would each cost? Just to get some insight about how much they would cost.

Speaker #4: Just to get some insights about how.

Speaker #1: I think this is where we are. 468 million

[Company Representative] (Bahri): I think that's what Riyad talked about. SAR 468 million.

Basil Abulhamayel: I think that's what Riyad talked about. SAR 468 million.

Iyad Al-Humaydan: Riyadh.

[Company Representative] (Bahri): Riyadh.

[Company Representative] (Bahri): Riyadh.

Basil Abulhamayel: Riyadh.

Ahmed Al-Saki: Riyad.

Ahmed Zaki: Riyad.

Iyad Al-Humaydan: Riyad. Not Dakhil, Riyad.

Ahmed Zaki: Riyad. Not Dakhil, Riyad.

Speaker #4: Okay. Okay.

Ahmed Al-Saki: Okay.

Ahmed Zaki: Okay.

Speaker #1: So if you do the math, you'll see they're quite competitive.

[Company Representative] (Bahri): If you do the math, you'll see they're quite competitive.

Basil Abulhamayel: If you do the math, you'll see they're quite competitive.

Speaker #4: Okay.

Speaker #1: And this is why I said this was an opportunistic okay. But if you look at other vessel types in the current market, it's quite expensive.

Ahmed Al-Saki: Okay.

Ahmed Zaki: Okay.

[Company Representative] (Bahri): This is why I said this was opportunistic. Okay? If you look at other vessel types in the current market, it's quite expensive. Hence, I can just add more, if you look at our CapEx spend, and you look at our key free cash flow, you will see that our CapEx spend is not that high because we see that vessel prices are quite high right now. We've always said that we will buy at the right price. We will not just throw money at any price vessel. Like I said, when this came up, we jumped on it.

Basil Abulhamayel: This is why I said this was opportunistic. Okay? If you look at other vessel types in the current market, it's quite expensive. Hence, I can just add more, if you look at our CapEx spend, and you look at our key free cash flow, you will see that our CapEx spend is not that high because we see that vessel prices are quite high right now. We've always said that we will buy at the right price. We will not just throw money at any price vessel. Like I said, when this came up, we jumped on it.

Speaker #1: And hence, I mean, I can just add more. If you look at our capex spend and you look at our free cash flow, you will see that our capex spend is not that high because we see that vessel prices are quite high right now.

Speaker #1: And we've always said that we will buy at the right price. We will not just throw money at any priced vessel. So like I said, when this came up, we jumped on it.

Speaker #4: Yeah. Fair enough. I'll go back in the queue for more questions.

Ahmed Al-Saki: Yeah. Fair enough. I'll go back in the queue for more questions.

Ahmed Zaki: Yeah. Fair enough. I'll go back in the queue for more questions.

Speaker #3: Thank you, Ahmed. The next question is from the line of Amar Al-Hajji. Amar, please unmute locally and go ahead.

[Company Representative] (Bahri): Thank you.

Basil Abulhamayel: Thank you.

Iyad Al-Humaydan: The next question is from the line of Amer Al Hajri. Amer, please unmute locally and go ahead.

[Company Representative] (Bahri): The next question is from the line of Omar Al-Jahri. Omar, please unmute locally and go ahead.

Speaker #5: Thank you. Yeah. Presentation. This is Amar Al-Hajji from SMB Capital. So only one question regarding the ton-mile and the closure of Bab el-Mandeb. So as you mentioned, you're using some pipeline in Egypt.

Amer Al Hajri: Thank you, Riyadh. This is Amer Al Hajri from SMB Capital. Only one question regarding the ton-mile and the closure of Bab el-Mandeb. As you mentioned, you're using some pipeline in Egypt. However, my question is, are we transiting Suez Canal using our VLCCs, or we're not able to do it?

Omar Al-Jahri: Thank you, Riyadh. This is Omar Al-Jahri from SNB Capital. Only one question regarding the ton-mile and the closure of Bab el-Mandeb. As you mentioned, you're using some pipeline in Egypt. However, my question is, are we transiting Suez Canal using our VLCCs, or we're not able to do it?

Speaker #5: However, my question is, are we transiting Suez Canal using our BLCCs or we're not able to do it?

Speaker #1: No. Because the operation is too it's too cumbersome. The BLCC cannot cross.

[Company Representative] (Bahri): No, because the operation, it's too cumbersome. A VLCC cannot cross the Suez.

Basil Abulhamayel: No, because the operation, it's too cumbersome. A VLCC cannot cross the Suez.

Speaker #5: Exactly. Unless it's not fully loaded, right?

Amer Al Hajri: Exactly. Unless it's not fully loaded, right?

Omar Al-Jahri: Exactly. Unless it's not fully loaded, right?

Speaker #1: بالضبط. Exactly. Exactly. So

[Company Representative] (Bahri): Exactly.

Basil Abulhamayel: Exactly.

Amer Al Hajri: Would we use some pipeline to, let's say, unload some of the barrels and then transit Suez Canal and then reload again on Sidi Kerir, or we're not doing this?

Speaker #5: would we use some pipeline to, let's say, unload some of the barrels and then transit Suez Canal and then reload again on Sidi Karir?

Omar Al-Jahri: Would we use some pipeline to, let's say, unload some of the barrels and then transit Suez Canal and then reload again on Sidi Kerir, or we're not doing this?

Speaker #5: Or we're not doing this?

Speaker #1: I don't want to comment on the ramp operations. That is one option. One option is you empty the full vessel, and you have another vessel picking it up on the other side.

[Company Representative] (Bahri): I don't want to comment on Aramco operations, but that is one option. One option is you empty the full vessel, and you have another vessel picking it up on the other side.

Basil Abulhamayel: I don't want to comment on Aramco operations, but that is one option. One option is you empty the full vessel, and you have another vessel picking it up on the other side.

Speaker #1: Okay. So that vessel that delivered to Ansoufna is not the same vessel that would go through the Suez and pick it up. It would be another vessel there waiting, potentially.

[Company Representative] (Bahri): Okay? That vessel that delivered to Jubail is not the same vessel that would go through the Suez and pick it up. It would be another vessel there waiting, potentially. The other way, which is the more cumbersome way, is you empty and you go and you collect again.

Basil Abulhamayel: Okay? That vessel that delivered to Jubail is not the same vessel that would go through the Suez and pick it up. It would be another vessel there waiting, potentially. The other way, which is the more cumbersome way, is you empty and you go and you collect again.

Speaker #1: Or the other way, which is the most more cumbersome way, is you empty and you go and you collect again.

Speaker #5: And how many of our BLCCs are outside the Red of our BLCCs, I mean, please are now currently outside the Red Sea?

Amer Al Hajri: How many of our VLCCs are outside the Red Sea?

Omar Al-Jahri: How many of our VLCCs are outside the Red Sea?

[Company Representative] (Bahri): Sorry?

Basil Abulhamayel: Sorry?

Amer Al Hajri: How many of our VLCCs, I mean, fleets, are now currently outside the Red Sea?

Omar Al-Jahri: How many of our VLCCs, I mean, fleets, are now currently outside the Red Sea?

Speaker #1: And I would refer not to comment on that. Again, for security reasons and.

[Company Representative] (Bahri): I would prefer not to comment on that. Again, for security reasons.

Basil Abulhamayel: I would prefer not to comment on that. Again, for security reasons.

Speaker #5: Sure. Sure. Thank you.

Amer Al Hajri: Sure.

Omar Al-Jahri: Sure.

[Company Representative] (Bahri): Yeah.

Basil Abulhamayel: Yeah.

Amer Al Hajri: Sure. Thank you.

Omar Al-Jahri: Sure. Thank you.

Speaker #3: Thank you. The next question is from the line of Mohamed Etrian. Mohamed, please unmute locally and go ahead.

Iyad Al-Humaydan: Thank you. The next question is from the line of Mohammed Al-Thunayan. Mohammed, please unmute locally and go ahead.

[Company Representative] (Bahri): Thank you. The next question is from the line of Mohammed Al-Thunayan. Mohammed, please unmute locally and go ahead.

Speaker #5: السلام عليكم.

Mohammed Al-Thunayan: As-salamu alaykum. Thank you for having us.

Mohammed Al-Thunayan: As-salamu alaykum. Thank you for having us.

Speaker #3: Thank you for joining us.

Speaker #5: And congratulations on the great set of results. Just a follow-up question. So on the five recently acquired IMO to MR's chemical tankers, I believe you mentioned that these acquisitions are part of Bahri's fleet expansion and modernization program.

[Company Representative] (Bahri): Salaam.

Basil Abulhamayel: Salaam.

Mohammed Al-Thunayan: Congratulations on the great set of results. Just a follow-up question. On the five recently acquired IMO2 MR chemical tankers, I believe you mentioned that these acquisitions are part of Bahri's fleet expansion and modernization program. Is it therefore fair to assume that the company intends to gradually retire or dispose some of its older vessels, such as Dilam, Qassim, Maharah, which were built between 2006 and 2009 as part of this strategy? If so, could you provide some color on the expected pace of these disposals, especially given the currently tight second-hand vessel market and the strong valuations for older tonnage?

Mohammed Al-Thunayan: Congratulations on the great set of results. Just a follow-up question. On the five recently acquired IMO2 MR chemical tankers, I believe you mentioned that these acquisitions are part of Bahri's fleet expansion and modernization program. Is it therefore fair to assume that the company intends to gradually retire or dispose some of its older vessels, such as Dilam, Qassim, Maharah, which were built between 2006 and 2009 as part of this strategy? If so, could you provide some color on the expected pace of these disposals, especially given the currently tight second-hand vessel market and the strong valuations for older tonnage?

Speaker #5: So is it therefore fair to assume that the company intends to gradually retire or dispose some of its older vessels such as Gamar Ghassim, Meha, which were built between 2006, 2009 as part of the strategy?

Speaker #5: If so, could you provide some color on the expected pace of these disposals, especially given the currently tight secondhand vessel market and the strong valuations for older tonnage?

Speaker #1: Thank you, Mohamed. Very good question. Yes. We have a fleet modernization program across mainly across the fleet wherever the vessels are quite old. It's difficult to give you a timeline because as you sort of answered the question yourself, it's okay, you sell a vessel high now and then you go buy a vessel even higher.

[Company Representative] (Bahri): Thank you, Mohammed. Very good question. Yes. We have a fleet modernization program mainly across the fleet, wherever the vessels are quite old. It is difficult to give you a timeline because, as you sort of answered the question yourself. Okay, you sell a vessel high now, and then you go buy a vessel even higher. The question for us now is how long can we economically run the vessels we currently have? We take each vessel on a case-by-case basis, and then we do the analysis. Does it make sense to sell now, or does it make sense to continue to commercially deploy it and wait? The general direction is, yes, we want to modernize the fleet. However, I cannot tell you it is going to be on a sort of a straight line, linear fashion.

Basil Abulhamayel: Thank you, Mohammed. Very good question. Yes. We have a fleet modernization program mainly across the fleet, wherever the vessels are quite old. It is difficult to give you a timeline because, as you sort of answered the question yourself. Okay, you sell a vessel high now, and then you go buy a vessel even higher. The question for us now is how long can we economically run the vessels we currently have? We take each vessel on a case-by-case basis, and then we do the analysis. Does it make sense to sell now, or does it make sense to continue to commercially deploy it and wait? The general direction is, yes, we want to modernize the fleet. However, I cannot tell you it is going to be on a sort of a straight line, linear fashion.

Speaker #1: So the question for us now is how long can we economically run the vessels we currently have? So we take each vessel on a case-by-case basis.

Speaker #1: And then we do the analysis. Does it make sense to sell now or does it make sense to continue to commercially deploy it and wait?

Speaker #1: So the direction, the general direction is yes, we want to modernize the fleet. However, I cannot tell you it's going to be on a sort of a straight line linear fashion.

Speaker #1: We may have a year where we do a lot, and we may have a year where we don't do anything. I'll give you an example.

[Company Representative] (Bahri): We may have a year where we do a lot, and we may have a year where we do not do anything. I will give you an example. I believe it was last year, or maybe the year before, where we bought 10 VLCCs at one shot.

Basil Abulhamayel: We may have a year where we do a lot, and we may have a year where we do not do anything. I will give you an example. I believe it was last year, or maybe the year before, where we bought 10 VLCCs at one shot.

Speaker #1: I believe it was last year or maybe the year before where we bought 10 VLCCs at one shot.

Speaker #3: 24.

Speaker #1: Huh? Twenty-four. Twenty-four. Because again, in the market, we found a transaction. We found the asset values were favorable. And we did ten in one shot.

Iyad Al-Humaydan: 24.

[Company Representative] (Bahri): 24.

[Company Representative] (Bahri): Huh?

Basil Abulhamayel: Huh?

Iyad Al-Humaydan: 24.

[Company Representative] (Bahri): 24.

[Company Representative] (Bahri): 2024. Again, the market, we found a transaction, we found the asset values were favorable, and we did 10 in one shot. This year, we have done very little except for these five, which I said are opportunistic. Hopefully, inshallah, next year, if we believe the forecasters, maybe next year will be a better year for acquisition. I hope I answered your question. It is not a straight line type of answer. It just depends. Very clear. Very informative value as well. Thank you very much.

Basil Abulhamayel: 2024. Again, the market, we found a transaction, we found the asset values were favorable, and we did 10 in one shot. This year, we have done very little except for these five, which I said are opportunistic. Hopefully, inshallah, next year, if we believe the forecasters, maybe next year will be a better year for acquisition. I hope I answered your question. It is not a straight line type of answer. It just depends. Very clear. Very informative value as well. Thank you very much.

Speaker #1: This year, we've done very little except for these five, which I said are opportunistic. Hopefully, inshallah, next year, I mean, if we believe the forecasters maybe next year will be a better year for acquisition.

Speaker #1: I hope I answered your question. It's not a straightforward answer— it just depends.

Speaker #5: Very clear. Very informative as usual. Thank you very much.

Speaker #1: Thank you.

Speaker #3: Thank you, Mohamed. The next question is coming from the line. Please unmute locally and go ahead.

Raghad Al-Habi: Thank you.

Mohammed Al-Thunayan: Thank you.

Iyad Al-Humaydan: Thank you, Mohammed. The next question is coming from the line of Raghad Al-Habi. Raghad, please unmute locally and go ahead.

[Company Representative] (Bahri): Thank you, Mohammed. The next question is coming from the line of Raghad AlHarbi. Raghad, please unmute locally and go ahead.

Speaker #4: Thank you. Yeah. Thank you. Management, for your time. I have one question for now. Regarding the Red Sea and the Suez Canal situation, as you have clearly explained how it is difficult for VLCCs to pass if they were fully loaded.

Raghad Al-Habi: Thank you. Yeah, thank you management for your time. I have one question for now regarding the Red Sea and the Suez Canal situation. As you have clearly explained how it is difficult for VLCCs to pass if they were fully loaded. Since you are having a good proportion of charterers in, are you doing any smaller ships charter ends or are you strictly dealing with VLCCs even in your short-term charter ends? That's my question. Thank you.

Raghad AlHarbi: Thank you. Yeah, thank you management for your time. I have one question for now regarding the Red Sea and the Suez Canal situation. As you have clearly explained how it is difficult for VLCCs to pass if they were fully loaded. Since you are having a good proportion of charterers in, are you doing any smaller ships charter ends or are you strictly dealing with VLCCs even in your short-term charter ends? That's my question. Thank you.

Speaker #4: Since you are having a good proportion of charters in, are you doing any smaller ships charter ends or are you strictly dealing with VLCCs even in your short-term charter ends?

Speaker #4: That's my question. Thank you.

Speaker #1: Yeah, no, we're still doing VLCCs—mainly doing VLCCs. There's a big shortage of the smaller vessels, which are hard to find. But we are doing the VLCCs, and for us, it works fine.

[Company Representative] (Bahri): Yeah. No, we're still doing VLCCs. Mainly doing VLCCs. There's a big shortage of the smaller vessels.

Basil Abulhamayel: Yeah. No, we're still doing VLCCs. Mainly doing VLCCs. There's a big shortage of the smaller vessels.

[Company Representative] (Bahri): They're hard to find. We are doing the VLCCs, and for us, it works fine.

Basil Abulhamayel: They're hard to find. We are doing the VLCCs, and for us, it works fine.

Speaker #1: Because our main customer is a rampo and a rampo wants to move volume. They would rather have one ship carrying 2 million versus two ships, 1 million apiece.

[Company Representative] (Bahri): Because our main customer is Aramco, and Aramco wants to move volumes. They would rather have one ship carrying 2 million versus two ships, 1 million a piece. It works well for us, given who our client is. We're not bringing in the smaller vessels. We're just using the VLCCs.

Basil Abulhamayel: Because our main customer is Aramco, and Aramco wants to move volumes. They would rather have one ship carrying 2 million versus two ships, 1 million a piece. It works well for us, given who our client is. We're not bringing in the smaller vessels. We're just using the VLCCs.

Speaker #1: So it works well for us given who our client is. So we're not bringing in the smaller vessels. We're just using the VLCCs.

Speaker #4: Clear. I'll go back to the queue for my other question. Thank you.

Raghad Al-Habi: Clear. I'll go back to the queue for my other question. Thank you.

Raghad AlHarbi: Clear. I'll go back to the queue for my other question. Thank you.

Speaker #3: Thank you. The next question is from the line of. Please mention your company and mute locally and go ahead. Beder. Please unmute locally and go ahead.

Iyad Al-Humaydan: Thank you, Raghad. The next question is from the line of Bader Al Kahtani. Bader, please mention your company, unmute locally, and go ahead. Bader, please unmute locally and go ahead.

[Company Representative] (Bahri): Thank you, Raghad. The next question is from the line of Bader Alqahtani. Bader, please mention your company, unmute locally, and go ahead. Bader, please unmute locally and go ahead.

Speaker #5: Hello. السلام عليكم. Am I audible?

Bader Al Kahtani: Thank you.

Bader Alqahtani: Thank you.

Bader Al Kahtani: Hello. Salam alaikum. Am I audible?

Bader Alqahtani: Hello. Salam alaikum. Am I audible?

Speaker #3: Yes, you are.

Speaker #5: Yes. Thank you, Mohamed, for the presentation, and congratulations on the great set of results. So, given the favorable timing for the rates right now and the increase in the charters and revenues, are we seeing these charter ends come from clients other than Aramco?

Iyad Al-Humaydan: Yes, you are.

[Company Representative] (Bahri): Yes, you are.

[Company Representative] (Bahri): Yes.

Basil Abulhamayel: Yes.

Raghad Al-Habi: Thanks Majan for the presentation and congratulations for the great set of results. Given the favorable time for the rates right now, and the increase in the charter and revenues, are we seeing this charter ends comes from clients other than Aramco? If so, are we seeing an opportunity to acquire more clients in terms of maybe Aramco FOB or other than Aramco? We can see if there is an opportunity to expand the fleet maybe next year or the year after.

Bader Alqahtani: Thanks Majan for the presentation and congratulations for the great set of results. Given the favorable time for the rates right now, and the increase in the charter and revenues, are we seeing this charter ends comes from clients other than Aramco? If so, are we seeing an opportunity to acquire more clients in terms of maybe Aramco FOB or other than Aramco? We can see if there is an opportunity to expand the fleet maybe next year or the year after.

Speaker #5: And if so, are we seeing an opportunity to acquire more clients in terms of maybe Aramco FOB or other than Aramco? So we can see if there is an opportunity to expand the fleet maybe next year or the year after.

Speaker #1: Yeah. Thank you, Beder, for the question. Yes. I mean, we're always looking for more and more customers, obviously, and Aramco is a key client.

[Company Representative] (Bahri): Yeah. Thank you, Bader, for the question. Yes. I mean, we're always looking for more and more customers, obviously, and Aramco is a key client. However, we continue to look at additional clients in the Oil Business. The Chemicals Business is very active. In fact, a lot of the Chemicals clients are non-Aramco or Aramco-related. We have opened an office in Singapore to target more of international clients. One thing I mentioned in my remarks about the Bahri Chemicals and Products Business, a lot of their business right now is being done within Asia. Some of those vessels in the Bahri Chemicals don't even come to the region. They stay out there for months and months and months. This is why when I was saying we're diversifying our base and our operations, it's to help cushion the challenges we're facing here.

Basil Abulhamayel: Yeah. Thank you, Bader, for the question. Yes. I mean, we're always looking for more and more customers, obviously, and Aramco is a key client. However, we continue to look at additional clients in the Oil Business. The Chemicals Business is very active. In fact, a lot of the Chemicals clients are non-Aramco or Aramco-related. We have opened an office in Singapore to target more of international clients. One thing I mentioned in my remarks about the Bahri Chemicals and Products Business, a lot of their business right now is being done within Asia. Some of those vessels in the Bahri Chemicals don't even come to the region. They stay out there for months and months and months. This is why when I was saying we're diversifying our base and our operations, it's to help cushion the challenges we're facing here.

Speaker #1: However, we continue to look at additional clients in the oil. One business, the chemicals business, is very active and in fact, a lot of the chemicals clients are not Aramco or Aramco related.

Speaker #1: We have opened an office in Singapore to target more of international clients. One thing I mentioned in my remarks about the Bahri Chemicals and Products business, a lot of their business right now is being done within Asia.

Speaker #1: Some of those vessels in the Bahri Chemicals don't even come to the region. They stay out there for months and months and months. This is why I was saying we're diversifying our base and our operations.

Speaker #1: It's to help cushion the challenges we're facing here.

Speaker #5: So should we expect the charter and revenues will continue until the relationship with the clients build up from now until maybe when you see the favorable timing of acquiring business on VLCC or other to be happen?

Raghad Al-Habi: Should we expect the charter-end revenues will continue and the relationship with the clients build up from now until maybe when you see the favorable timing of acquiring vessels on VLCC or other to happen?

Bader Alqahtani: Should we expect the charter-end revenues will continue and the relationship with the clients build up from now until maybe when you see the favorable timing of acquiring vessels on VLCC or other to happen?

Speaker #1: Yes. That's what our plan, inshallah.

[Company Representative] (Bahri): Yes. That's our plan, inshallah.

Basil Abulhamayel: Yes. That's our plan, inshallah.

Speaker #5: Okay. Thank you, management. And good luck, inshallah.

Raghad Al-Habi: Okay. Thank you, Majan, and good luck. Inshallah.

Bader Alqahtani: Okay. Thank you, Majan, and good luck. Inshallah.

Speaker #3: Thank you, Beder. The next question is from the line of. Please unmute locally and go ahead. I'll mention your company as well.

Iyad Al-Humaydan: Thank you, Bader. The next question is from the line of Sayyed Ali. Sayyed, please unmute locally and go ahead. Mention your company as well.

Bader Alqahtani: Thank you, Bader. The next question is from the line of Syed Ali. Syed, please unmute locally and go ahead. Mention your company as well.

Speaker #6: Assalamu alaikum. Thank you for arranging the call. Thank you, management, for taking the call. This is Sayyid id Ali from Alin Capital. I just had one question with regards to financial times and a couple of other media outlets reporting on ships in and around the Red Sea.

Sayyed Ali: Asalam alaikum. Thank you for arranging the call. Thank you, management, for taking the call. This is Sayyed Ali from Alinma Investment. I just had one question with regards to Financial Times and a couple other media outlets reporting on ships in and around the Red Sea, or specifically actually Saudi-specific tankers not being insured or partially being insured or the specific route is not being insured. Can you just shed some light on how is the insurance working currently? If there's any sort of partial insurance that is going on in the regional limited insurance or contingent insurance policies that are being issued? Thank you.

Syed Ali: Asalam alaikum. Thank you for arranging the call. Thank you, management, for taking the call. This is Syed Ali from Alinma Capital. I just had one question with regards to Financial Times and a couple other media outlets reporting on ships in and around the Red Sea, or specifically actually Saudi-specific tankers not being insured or partially being insured or the specific route is not being insured. Can you just shed some light on how is the insurance working currently? If there's any sort of partial insurance that is going on in the regional limited insurance or contingent insurance policies that are being issued? Thank you.

Speaker #6: Specifically, actually, tankers Saudi specific tankers not being insured or partially being insured or the specific route is not being insured. Can you just shed some light on how does the insurance how is the insurance working currently?

Speaker #6: And is there any sort of partial insurance going on in the region, or limited insurance, or contingent insurance policies that are being issued?

Speaker #6: Thank you.

Speaker #1: Thank you, Sayyid. This is what I meant when I said don't listen to the media and listen to all kinds of things that are coming out there.

[Company Representative] (Bahri): Thank you, Sayyed. This is what I meant when I said, don't listen to the media and listen to all kinds of things that are coming out there. I can confirm to you 1,000% that all our vessels are 100% insured for hull, machinery, and war risk. Okay? I can guarantee you 1,000%. This article that came out in Financial Times was completely inaccurate. Yes, our insurance has increased. Our war risk insurance has increased. However, when you look at compared to what others, what it increased to, ours is very competitive. Even after the increase, it's very competitive. We have a big fleet. We are known to the insurers. Yes, there's heightened geopolitical risks. Also to remind, Bahri has been in this situation before. This is not news to us.

Basil Abulhamayel: Thank you, Syed. This is what I meant when I said, don't listen to the media and listen to all kinds of things that are coming out there. I can confirm to you 1,000% that all our vessels are 100% insured for hull, machinery, and war risk. Okay? I can guarantee you 1,000%. This article that came out in Financial Times was completely inaccurate. Yes, our insurance has increased. Our war risk insurance has increased. However, when you look at compared to what others, what it increased to, ours is very competitive. Even after the increase, it's very competitive. We have a big fleet. We are known to the insurers. Yes, there's heightened geopolitical risks. Also to remind, Bahri has been in this situation before. This is not news to us.

Speaker #1: I can confirm to you 1,000% that all our vessels are 100% insured for hull, machinery, and war risk. Okay? I can guarantee you 1,000%.

Speaker #1: This article that came out and the Financial Times was completely inaccurate. We yes, our insurance has increased. Our war risk insurance has increased. However, when you look at compared to what others what it increased to, ours is very, very, very competitive.

Speaker #1: Even after the increase, it's very, very competitive. We have a big fleet. We are known to the insurers. Yes, there's heightened geopolitical risks. And also to remind, Bahri has been in this situation before.

Speaker #1: This is not news to us. If you recall, the Houthis back in 2017, '18, '19, '20, we were transiting Bab al-Mandab and dealing with this stuff.

[Company Representative] (Bahri): If you recall the Houthis back in 2017, 2018, 2019, 2020, we were transiting Bab el-Mandeb and dealing with this stuff. We have security protocols. We have armed guards on vessels. We've seen this movie before. I just want to reassure and confirm that our insurance is in place and that it's still very competitive compared to what others are having to pay for it. Thank you for the reassurance, Mohammed.

Basil Abulhamayel: If you recall the Houthis back in 2017, 2018, 2019, 2020, we were transiting Bab el-Mandeb and dealing with this stuff. We have security protocols. We have armed guards on vessels. We've seen this movie before. I just want to reassure and confirm that our insurance is in place and that it's still very competitive compared to what others are having to pay for it. Thank you for the reassurance, Mohammed.

Speaker #1: I mean, we have security protocols. We have armed guards on vessels. So this is not we've seen this movie before. And I just want to reassure and confirm that our insurance is in place.

Speaker #1: And that it is still very competitive compared to what others are having to pay.

Speaker #5: Thank you for the reassurance, man.

Speaker #3: Thank you, Sayyid. The next question is from the line of. Please mention your company and mute locally and go ahead.

Iyad Al-Humaydan: Thank you, Sayyed. The next question is from the line of Zuhair Khatamjee. Please mention your company, unmute locally, and go ahead.

[Company Representative] (Bahri): Thank you, Syed. The next question is from the line of Zuhair Khatamjee. Please mention your company, unmute locally, and go ahead.

Speaker #6: Assalamu alaikum, gentlemen. Thank you for the call and congratulations on the results. I have a question about the cash you're generating in the last few quarters.

Zuhair Khatamjee: Salaam alaikum, gentlemen. Thank you for the call and congratulations on the results. I have a question about the cash you're generating in the last few quarters. You've generated abnormal amount. Are you able to give us an indication on the payout ratio you may give as a dividend?

Zuhair Khatamjee: Salaam alaikum, gentlemen. Thank you for the call and congratulations on the results. I have a question about the cash you're generating in the last few quarters. You've generated abnormal amount. Are you able to give us an indication on the payout ratio you may give as a dividend?

Speaker #6: You've generated an abnormal amount. Are you able to give us an indication of the payout ratio you may use for the dividend?

Speaker #1: No. Sorry.

[Company Representative] (Bahri): No. Sorry.

Basil Abulhamayel: No. Sorry.

Speaker #6: I mean, are you able to sort of communicate how the cash will be spent? Whether an increased dividend could be given or there's sort of some capital you see might be prioritized using it for?

Zuhair Khatamjee: Are you able to communicate how the cash will be spent, whether an increased dividend could be given or there's some capital use you might reprioritize using it for?

Zuhair Khatamjee: Are you able to communicate how the cash will be spent, whether an increased dividend could be given or there's some capital use you might reprioritize using it for?

Speaker #1: Yeah. I go back to our capital allocation policy. I mean, I don't want to commit anything on this call. And but we do have a.

[Company Representative] (Bahri): Yeah. I go back to our capital allocation policy. I don't want to commit anything on this call. We do have a capital allocation policy. That we make sure we look at maintaining our fleet, we look at investments, and then the residual is a potential dividend that we pay subject to, of course, board approval. I will leave it at that. I don't want to get into giving indications of, yeah.

Basil Abulhamayel: Yeah. I go back to our capital allocation policy. I don't want to commit anything on this call. We do have a capital allocation policy. That we make sure we look at maintaining our fleet, we look at investments, and then the residual is a potential dividend that we pay subject to, of course, board approval. I will leave it at that. I don't want to get into giving indications of, yeah.

Speaker #1: Our capital allocation policy ensures that we focus on maintaining our fleet. We make investments, and then the residual is a potential dividend that we pay, subject, of course, to board approval.

Speaker #1: So just I will leave it at that. I don't want to get into sort of giving indications of.

Speaker #6: Sure. I mean, on the capital allocation side, if that's obviously the other use, can you give us an indication as to how much you might spend there then?

Zuhair Khatamjee: Sure. On the capital allocation side, obviously that'll be use. Can you give us an indication as to how much you might spend there then?

Zuhair Khatamjee: Sure. On the capital allocation side, obviously that'll be use. Can you give us an indication as to how much you might spend there then?

Speaker #3: We have a very long queue of questions, so if you can go back to the queue, I will come back to you, inshallah, if we have time.

Iyad Al-Humaydan: We have a very long queue of questions. If you can go back to the queue and I will come back to you, Inshallah, if we have time.

[Company Representative] (Bahri): We have a very long queue of questions. If you can go back to the queue and I will come back to you, Inshallah, if we have time.

Speaker #6: Sure, sure.

Zuhair Khatamjee: Sure. Thank you.

Zuhair Khatamjee: Sure. Thank you.

Speaker #3: The next question is from the line of. Please unmute locally and go ahead.

Iyad Al-Humaydan: The next question is from the line of Mohammed Saad. Mohammed, please unmute locally and go ahead.

[Company Representative] (Bahri): The next question is from the line of Mohammed Saad. Mohammed, please unmute locally and go ahead.

Speaker #5: Thank you. Thank you, SNB. And thank you, management. This is Mohammed Saad from Al Rajhi. I have just one question. Can you please elaborate on your earlier comment that VLCC is going through the Suez Canal is very cumbersome operationally?

Mohammed Saad: Thank you. Thank you, S&P, and thank you, management. This is Mohammed Saad from Al Rajhi. I have just one question. Can you please elaborate on your earlier comment that VLCCs going through the Suez Canal is very cumbersome operationally? Is it that VLCCs are not going through the Suez Canal? Are you still taking your VLCCs through the Bab el-Mandeb? Also, with regards to the remaining vessels that you have in your fleet, are they still going through the Bab el-Mandeb apart from the VLCCs? What about the remaining vessels? Are they still going through the Bab el-Mandeb? That's my question.

Muhammad Saad: Thank you. Thank you, S&P, and thank you, management. This is Mohammed Saad from Al Rajhi. I have just one question. Can you please elaborate on your earlier comment that VLCCs going through the Suez Canal is very cumbersome operationally? Is it that VLCCs are not going through the Suez Canal? Are you still taking your VLCCs through the Bab el-Mandeb? Also, with regards to the remaining vessels that you have in your fleet, are they still going through the Bab el-Mandeb apart from the VLCCs? What about the remaining vessels? Are they still going through the Bab el-Mandeb? That's my question.

Speaker #5: So is it that VLCCs are not going through the Suez Canal? And are you still taking your VLCCs through the Bab al-Mandab? And also, with regards to the remaining fleets, vessels that you have in your fleet, are they still going through the Bab al-Mandab?

Speaker #5: Apart from the VLCCs, what about the remaining vessels? Are they still going through the Bab al-Mandab? That's my question.

Speaker #1: Okay. So your first question is: are VLCCs going through the Suez?

[Company Representative] (Bahri): Okay. Your first question is, are VLCCs going through the Suez?

Basil Abulhamayel: Okay. Your first question is, are VLCCs going through the Suez?

Speaker #5: Yes.

Mohammed Saad: Yes.

Muhammad Saad: Yes.

Speaker #1: Okay. You guys need to excuse me because it's very hard for me to answer these questions because of the security situation. I can tell you our VLCCs are supporting Aramco and feeding the Sumed pipeline to the Mediterranean.

[Company Representative] (Bahri): Okay. You guys need to excuse me because it's very hard for me to answer these questions because of the security situation. I can tell you, our VLCCs are supporting Aramco and feeding the Sumed pipeline to the Mediterranean. In the Mediterranean, there is other vessels to pick up the crude and taking it to international customers, whether it's in the US or Asia. Some of those VLCCs that are on the other side in the Mediterranean are Bahri VLCCs. Regarding the transiting Strait of Mandeb, are our vessels transiting? I honestly cannot comment on that, again, given the volatile situation we're in as we speak.

Basil Abulhamayel: Okay. You guys need to excuse me because it's very hard for me to answer these questions because of the security situation. I can tell you, our VLCCs are supporting Aramco and feeding the Sumed pipeline to the Mediterranean. In the Mediterranean, there is other vessels to pick up the crude and taking it to international customers, whether it's in the US or Asia. Some of those VLCCs that are on the other side in the Mediterranean are Bahri VLCCs. Regarding the transiting Strait of Mandeb, are our vessels transiting? I honestly cannot comment on that, again, given the volatile situation we're in as we speak.

Speaker #1: In the Mediterranean, there's other vessels to pick up the crude and taking it to international customers, whether it's in the US or Asia. And some of those VLCCs that are on the other side in the Mediterranean are Bahri VLCCs.

Speaker #1: Regarding the transiting Strait of Mandab, our vessels transiting I honestly cannot comment on that. Again, given the volatile situation or as we speak.

Speaker #5: Okay. Thank you.

Mohammed Saad: Okay. Thank you.

Muhammad Saad: Okay. Thank you.

Speaker #3: Thank you. I will read some questions from the chat box. One is from Abdulaziz. He's asking, given the massive cash flow generation in the recent quarters, what are you what are your plans?

Iyad Al-Humaydan: Thank you. I will read some questions from the chat box. One is from Abdulaziz Tubaiqi. He's asking, given the massive cash flow generation in the recent quarters, what are your plans? Buybacks, dividends, debt reduction? What are the priorities?

[Company Representative] (Bahri): Thank you. I will read some questions from the chat box. One is from Abdulaziz Tubaiqi. He's asking, given the massive cash flow generation in the recent quarters, what are your plans? Buybacks, dividends, debt reduction? What are the priorities?

Speaker #3: Buybacks, dividends, debt reduction, what are the priorities?

Speaker #1: Okay. Given the cash flow generation, yes, it's quite healthy. Given that the visibility for the rest of the year we have been in these situations before where the Bab al-Mandab has been closed.

[Company Representative] (Bahri): Okay. Given the cash flow generation, yes, it's quite healthy. Given that the visibility for the rest of the year, we have been in these situations before where Bab el-Mandeb has been closed, but the Strait of Hormuz was open, and vice versa. This is the first time where we have both closed at the same time. The uncertainty, the volatility is still there. We definitely will be keeping a bigger liquidity buffer, going forward for the rest of the year. We will be looking at, of course, investments as they come up. We're looking at possible investments into next year, not vessel-related. We have investments in our logistics business that are upcoming. There are investments beyond ships. We always talk about ships here, but Bahri has a wider portfolio of other investments. That is in the cards also.

Basil Abulhamayel: Okay. Given the cash flow generation, yes, it's quite healthy. Given that the visibility for the rest of the year, we have been in these situations before where Bab el-Mandeb has been closed, but the Strait of Hormuz was open, and vice versa. This is the first time where we have both closed at the same time. The uncertainty, the volatility is still there. We definitely will be keeping a bigger liquidity buffer, going forward for the rest of the year. We will be looking at, of course, investments as they come up. We're looking at possible investments into next year, not vessel-related. We have investments in our logistics business that are upcoming. There are investments beyond ships. We always talk about ships here, but Bahri has a wider portfolio of other investments. That is in the cards also.

Speaker #1: But the Strait of Hormuz was open. And vice versa. This is the first time where we have both closed at the same time. So the uncertainty, the volatility, is still there.

Speaker #1: So we definitely will be keeping a bigger liquidity buffer going forward for the rest of the year. We will be looking at, of course, investments as they come up.

Speaker #1: There's we're looking at possible investments into next year, not vessel-related. We have investments in our logistics business that are upcoming. So there are investments beyond ships.

Speaker #1: We always talk about ships here, but Bahri has a wider portfolio of other investments, so that is in the cards also. And, of course, we've been deleveraging a bit as we speak.

[Company Representative] (Bahri): Of course, we've been de-leveraging a bit as we speak, because we're not taking on new debt and we're paying down our existing debt. Again, I repeat, dividend will be residual that we will announce once we go to our board and we have a discussion about our capital allocation. If we see fit to make the distribution, we will.

Basil Abulhamayel: Of course, we've been de-leveraging a bit as we speak, because we're not taking on new debt and we're paying down our existing debt. Again, I repeat, dividend will be residual that we will announce once we go to our board and we have a discussion about our capital allocation. If we see fit to make the distribution, we will.

Speaker #1: Because we're not taking on new debt. And we're paying down our existing debt. But again, I repeat, dividend will be residual. That we will announce once we go to our board and we have a discussion about our capital allocation and if we see fit to make the distribution, we will.

Speaker #3: Thank you so much. We will go back now to Brennan. Brennan, please unmute locally and go ahead.

Iyad Al-Humaydan: Thank you so much. We will go back now to Brennan Rettig. Brennan, please unmute locally and go ahead.

[Company Representative] (Bahri): Thank you so much. We will go back now to Brennan Rettig. Brennan, please unmute locally and go ahead.

Speaker #4: Brennan?

[Company Representative] (Bahri): Brennan?

Basil Abulhamayel: Brennan?

Speaker #7: Yeah. Am I audible? Okay. Fantastic. Really appreciated you actually taking another question from me. I wanted to ask about the NCC Fajr. Maybe I mispronounced that.

Brennan Ito: Yeah. Am I audible?

Brennan Eatough: Yeah. Am I audible?

[Company Representative] (Bahri): Yes.

Basil Abulhamayel: Yes.

Brennan Ito: Okay, fantastic. Really appreciated you actually taking another question from me. I wanted to ask about the NCC Fajr. Maybe I'm mispronouncing that, apologies, but according to Argaam and some other news reports, there was, well, and SABIC as well sort of inferred, there was an extremely large chemical, liquids chemical loading. I wanted to ask, where did it load? Jubail or Yanbu? And what was the cargo exactly?

Brennan Eatough: Okay, fantastic. Really appreciated you actually taking another question from me. I wanted to ask about the NCC Fajr. Maybe I'm mispronouncing that, apologies, but according to Argaam and some other news reports, there was, well, and SABIC as well sort of inferred, there was an extremely large chemical, liquids chemical loading. I wanted to ask, where did it load? Jubail or Yanbu? And what was the cargo exactly?

Speaker #7: Apologies. But according to our government, some other news reports, there was and SABIC as well sort of inferred. There was an extremely large chemical liquids chemical loading and I wanted to ask where did it load?

Speaker #7: Jubail or Yanbu? And what was the cargo exactly?

Speaker #1: NCC Fajr is Brennan, thanks for the question. NCC Fajr is sorted out to SABIC. And I don't have visibility to be honest on it because they're the ones who sort of, let's say, manage it.

[Company Representative] (Bahri): Brennan, thanks for the question. NCC Fajr is chartered out to SABIC. I don't have visibility, to be honest, on it, because they're the ones who sort of, let's say, manage it. In terms of commercial management, it purely goes to SABIC. I don't have visibility on where it loaded, what was the cargo. We just charter the vessel to them, and they pay us a charter rate. In terms of commercial management, they run the whole thing.

Basil Abulhamayel: Brennan, thanks for the question. NCC Fajr is chartered out to SABIC. I don't have visibility, to be honest, on it, because they're the ones who sort of, let's say, manage it. In terms of commercial management, it purely goes to SABIC. I don't have visibility on where it loaded, what was the cargo. We just charter the vessel to them, and they pay us a charter rate. In terms of commercial management, they run the whole thing.

Speaker #1: In terms of commercial management, it's purely with SABIC. So, I don't have visibility on where it loaded or what was the cargo. We just chartered the vessel to them.

Speaker #1: And they pay us a charter rate. But in terms of commercial management, they run the whole thing. For that vessel specifically. So I don't have visibility, to be honest.

Brennan Ito: Oh, interesting.

Brennan Eatough: Oh, interesting.

[Company Representative] (Bahri): I don't have visibility, to be honest.

Basil Abulhamayel: I don't have visibility, to be honest.

Speaker #7: I'm genuinely curious. I was really not expecting that answer. Could you just maybe, for everyone, could you explain what that means? So you charter it but you don't know what's being—I don't understand.

Brennan Ito: I'm genuinely curious. I was really not expecting that answer. Could you just, maybe for everyone, could you explain what that means? You charter it, but you don't know what's being I don't understand.

Brennan Eatough: I'm genuinely curious. I was really not expecting that answer. Could you just, maybe for everyone, could you explain what that means? You charter it, but you don't know what's being I don't understand.

Speaker #1: Okay. This vessel is chartered out to SABIC. SABIC decides where to load, where to discharge, and what cargo is to be loaded in that vessel.

[Company Representative] (Bahri): Okay. This vessel is chartered out to SABIC. SABIC decides where to load, where to discharge, and what cargo is to be loaded in that vessel. We do the ship management piece, but they're the ones who call the shots on where it goes and what's loaded and what's not loaded. The short answer from me is I don't have visibility on it.

Basil Abulhamayel: Okay. This vessel is chartered out to SABIC. SABIC decides where to load, where to discharge, and what cargo is to be loaded in that vessel. We do the ship management piece, but they're the ones who call the shots on where it goes and what's loaded and what's not loaded. The short answer from me is I don't have visibility on it.

Speaker #1: We do the ship management piece, but they're the ones who call the shots on where it goes and what's loaded and what's not loaded.

Speaker #1: So the short answer for me is I don't have visibility on it.

Speaker #5: Thank you, management. Our next question comes from the line of Hamid Al-Masri. Mohammed, kindly introduce yourself. You're unmuted.

Operator: Thank you, management. Our next question comes from the line of Mohammed Almasri. Mohammed, kindly introduce yourself. You are unmuted.

Operator: Thank you, management. Our next question comes from the line of Mohammed Almasri. Mohammed, kindly introduce yourself. You are unmuted.

Speaker #7: Hi. Can you hear me?

Mohammed Almasri: Hi, can you hear me?

Mohammed Almasri: Hi, can you hear me?

Speaker #3: Yes. Hello? Yeah, Mohammed, we can hear you.

[Company Representative] (Bahri): Yes.

Basil Abulhamayel: Yes.

Mohammed Almasri: Hello?

Mohammed Almasri: Hello?

Operator: You are audible.

Operator: You are audible.

[Company Representative] (Bahri): Yeah, Mohammed, we can hear you.

Basil Abulhamayel: Yeah, Mohammed, we can hear you.

Speaker #7: Hi. This is Mohammed Al-Masri from CI Capital. Thank you for the presentation. I just had one question, please, regarding the vessels that were involved in the security incident.

Mohammed Almasri: Hi, this is Mohammed Almasri from CI Capital. Thank you for the presentation. I just had one question, please, regarding the vessels that were involved in the security incident. You've mentioned that 1 VLCC and a chemical tanker. What is the extent of the damages to these ships, and how soon can we expect them to resume operations? Please do correct me if I'm wrong, the number of VLCCs now are 49. Does that mean after the vessel that was struck, it's now 48? For the chemical tankers which are owned, do we also deduct by a single vessel? Thank you.

Mohammed Almasri: Hi, this is Mohammed Almasri from CI Capital. Thank you for the presentation. I just had one question, please, regarding the vessels that were involved in the security incident. You've mentioned that 1 VLCC and a chemical tanker. What is the extent of the damages to these ships, and how soon can we expect them to resume operations? Please do correct me if I'm wrong, the number of VLCCs now are 49. Does that mean after the vessel that was struck, it's now 48? For the chemical tankers which are owned, do we also deduct by a single vessel? Thank you.

Speaker #7: You've mentioned that one VLCC and a chemical tanker. What is the extent of the damages to these ships and how soon can we expect them to resume operations?

Speaker #7: And please do correct me if I'm wrong. The number of VLCCs now are 49. So does that mean after the vessel that was struck is now 48 and for the chemical tankers, which are around do we also deduct by a single vessel?

Speaker #7: Thank you.

Speaker #1: Yeah. I think you're referring to the ones that were announced. VLCC that was announced that was. That was involved in an incident that was a minor incident.

[Company Representative] (Bahri): Yeah. I think you're referring to the ones that were announced. The VLCC that was announced.

Basil Abulhamayel: Yeah. I think you're referring to the ones that were announced. The VLCC that was announced.

Mohammed Almasri: Yes

Mohammed Almasri: Yes

[Company Representative] (Bahri): It was involved in an incident, that was a minor incident. I think it was with Wedyan. The vessel is still seaworthy. It emptied its cargo and now it's going for repair. We understand the repair is very minor. In fact, probably a lot of it is deductible on our insurance. That's how minor it is. Yeah. That's the comment on the oil tanker. On the chemical tanker, there was nothing. There was the first report that there was a strike, after further inspection, it turned out there wasn't a strike and that there was a dent from an old football. That was it.

Basil Abulhamayel: It was involved in an incident, that was a minor incident. I think it was with Wedyan. The vessel is still seaworthy. It emptied its cargo and now it's going for repair. We understand the repair is very minor. In fact, probably a lot of it is deductible on our insurance. That's how minor it is. Yeah. That's the comment on the oil tanker. On the chemical tanker, there was nothing. There was the first report that there was a strike, after further inspection, it turned out there wasn't a strike and that there was a dent from an old football. That was it.

Speaker #1: I think it was with Yan. The vessel is still seaworthy. It emptied its cargo. And now it's going for repair. We understand the repair is very minor in fact, probably below the deductible of our insurance.

Speaker #1: So that's how minor it is. Yeah. So that's the comment on the oil tanker. On the chemical tanker, there was nothing. There was the first report that it was a strike but actual after further inspection, it turned out there wasn't a strike and that there was a dent from an old tugboat.

Speaker #1: That was it.

Speaker #7: Okay. That's great to hear. Thank you very much for the appreciation.

Mohammed Almasri: Okay. That's great to hear. Thank you very much. Really appreciate it.

Mohammed Almasri: Okay. That's great to hear. Thank you very much. Really appreciate it.

Speaker #1: Sure.

Speaker #5: Thank you, management. Our next question is a follow-up from the line of Anis Al-Jarbua. Anis, you're unmuted. Please proceed.

[Company Representative] (Bahri): Sure.

Operator: Thank you, management. Our next question is a follow-up from the line of Anas Aljarboua. Anas, you are unmuted. Please proceed.

Basil Abulhamayel: Sure.

Operator: Thank you, management. Our next question is a follow-up from the line of Anas Aljarboua. Anas, you are unmuted. Please proceed.

Speaker #8: Yes. Thank you. for taking my question again. Just one question on the COA. I saw around cool revenue contribution during the second half increasing to around 60, 68 percent roughly.

Anas Al Jarboua: Yes. Thank you. Yaatika Alafia, Abdullah, for taking my question again. Just one question on the COA. I saw Aramco revenue contribution during the H2 increasing to around 68% roughly. I just would like to understand how much flexibility do you have when you want to shift the book? Do you have a strong ability to go to the spot market and reduce Aramco contribution to the revenue, or it's just whatever you have with the COA?

Anas Aljarboua: Yes. Thank you. Yaatika Alafia, Abdullah, for taking my question again. Just one question on the COA. I saw Aramco revenue contribution during the H2 increasing to around 68% roughly. I just would like to understand how much flexibility do you have when you want to shift the book? Do you have a strong ability to go to the spot market and reduce Aramco contribution to the revenue, or it's just whatever you have with the COA?

Speaker #8: So I just would like to understand how much flexibility do you have when you want to shift the book? Do you have a strong ability to go to the spot market and reduce Aramco contribution to the revenue or it's just whatever you have with the COA?

Speaker #1: You're talking about the oil, correct?

Speaker #8: Yes, oil.

[Company Representative] (Bahri): You're talking about the oil, correct?

Basil Abulhamayel: You're talking about the oil, correct?

Speaker #1: Yeah, yeah, yeah. No, we do have flexibility to shift. No matter how much we shifted, Aramco is still a big chunk, obviously. But we do have flexibility to shift.

Anas Al Jarboua: Yes, oil.

Anas Aljarboua: Yes, oil.

[Company Representative] (Bahri): Yeah. No, we do have flexibility to shift. No matter how much we shift, Aramco is still a big chunk, obviously. We do have flexibility to shift. We have other customers besides Aramco. Our oil team is always adding customers, some of the majors. This is something we continue to work on and continue to try to increase because Aramco is still a big piece of the oil business. It's strategic in nature. We would always expect that. I would say, we're a separate legal entity. However, operationally, we like to think of ourselves as an extension to the energy supply chain for Aramco. Naturally, you're going to see a big contribution from the Aramco business.

Basil Abulhamayel: Yeah. No, we do have flexibility to shift. No matter how much we shift, Aramco is still a big chunk, obviously. We do have flexibility to shift. We have other customers besides Aramco. Our oil team is always adding customers, some of the majors. This is something we continue to work on and continue to try to increase because Aramco is still a big piece of the oil business. It's strategic in nature. We would always expect that. I would say, we're a separate legal entity. However, operationally, we like to think of ourselves as an extension to the energy supply chain for Aramco. Naturally, you're going to see a big contribution from the Aramco business.

Speaker #1: We do have other customers besides Aramco. Our oil team is always adding customers, including some of the majors, but this is something we continue to work on and continue to try to increase, because Aramco is still a big, big, big piece of the oil business.

Speaker #1: And it's strategic in nature. We would always expect that I would say we're separate legal entity. However, operationally, we like to think of ourselves as an extension to the energy supply chain for Aramco.

Speaker #1: So naturally, you're going to see a big contribution from the Aramco business.

Speaker #8: Aramco, I know you don't disclose the agreement, but it's mostly COA, right, contractor freight.

Anas Al Jarboua: Aramco, I know you don't disclose the agreement, it's mostly COA, right?

Anas Aljarboua: Aramco, I know you don't disclose the agreement, it's mostly COA, right?

Speaker #1: Yes. With Aramco Oil, yes.

[Company Representative] (Bahri): Yes.

Basil Abulhamayel: Yes.

Anas Al Jarboua: Okay.

Anas Aljarboua: Okay.

[Company Representative] (Bahri): With Aramco Oil, yes. Aramco, yeah.

Basil Abulhamayel: With Aramco Oil, yes. Aramco, yeah.

Speaker #8: Is it renewed every year on an annual basis, or what?

Anas Al Jarboua: Is it renewed every year on a yearly basis, or what's the-

Anas Aljarboua: Is it renewed every year on a yearly basis, or what's the-

Speaker #1: No, no. This is a long, long term.

[Company Representative] (Bahri): No. This is long-term.

Basil Abulhamayel: No. This is long-term.

Speaker #8: Okay, okay. Thank you very much.

Anas Al Jarboua: Okay.

Anas Aljarboua: Okay.

[Company Representative] (Bahri): Yeah.

Basil Abulhamayel: Yeah.

Anas Al Jarboua: Thank you. Thank you very much.

Anas Aljarboua: Thank you. Thank you very much.

Speaker #5: Thank you, management. Our final question is coming from the line of Raad Al-Thaybi. Raad, you're unmuted. Please proceed with the question.

Operator: Thank you, management. Our final question is coming from the line of Raz Thabe. Raz, you're unmuted. Please proceed with the question.

Operator: Thank you, management. Our final question is coming from the line of Raz Thabe. Raz, you're unmuted. Please proceed with the question.

Speaker #6: Thank you, Abdullah. This is Raad Al-Thaybi again from AMP Capital. My question is regarding the supply in the market and the secondhand market. During such a very strange and unique time, there are sometimes lots of ships that shift that happen in the market and lots of activities.

Raz Thabe: Thank you, Abdullah. This is Raz Thabe again from AMP Capital. My question is regarding the supply in the market and the secondhand market. During such very strange and unique times, there are sometimes lots of shifts that happen in the market and lots of activities. Just from your end, I would like to understand how is the supply right now. Is there any disruptions, or are the schedules going as usual? How is the secondhand market activity? Thank you.

Raghad AlHarbi: Thank you, Abdullah. This is Raz Thabe again from AMP Capital. My question is regarding the supply in the market and the secondhand market. During such very strange and unique times, there are sometimes lots of shifts that happen in the market and lots of activities. Just from your end, I would like to understand how is the supply right now. Is there any disruptions, or are the schedules going as usual? How is the secondhand market activity? Thank you.

Speaker #6: So just from your end, I would like to understand how the supply right now. Is there any disruptions or reschedules going as usual? And how is the secondhand market activity?

Speaker #6: Thank you.

Speaker #1: Well, the secondhand market activity is, I would say, active. It's just people who are I guess more trades you would see a lot of transactions, but at very high prices and people are using this now as an asset class and they have a view and they're buying the steel.

[Company Representative] (Bahri): A lot of the secondhand market activity is, I would say, active. This is people who are, I guess, more traders. You would see a lot of transactions, but at very high prices. People are using this now as an asset class, and they have a view, and they're buying to steal. I think there's one company, Synacor, I believe it is, that's going out and buying any tanker they can find because they have a view that they're going to make money on these in the next couple of years. It's very active, but for different reasons. For us, we are operators. We're in this for the long term. We're not traders that much. We always try to find the asset prices that make us competitive to service the customers.

Basil Abulhamayel: A lot of the secondhand market activity is, I would say, active. This is people who are, I guess, more traders. You would see a lot of transactions, but at very high prices. People are using this now as an asset class, and they have a view, and they're buying to steal. I think there's one company, Synacor, I believe it is, that's going out and buying any tanker they can find because they have a view that they're going to make money on these in the next couple of years. It's very active, but for different reasons. For us, we are operators. We're in this for the long term. We're not traders that much. We always try to find the asset prices that make us competitive to service the customers.

Speaker #1: I think there's one company Synacor, I believe it is. That's going out and buying any tanker they can find. Because they have a view that they're going to make money on these in the next couple of years.

Speaker #1: So it's very active. But for different reasons. And for us, we are operators. We're in this for the long term. We're not traders that much.

Speaker #1: So we always try to find the asset prices that make us competitive to service the customers. And there are others out there who are investors, who look at this as an asset class, just like you would look at fixed income or equity or whatever.

[Company Representative] (Bahri): There's others out there who are investors who look at this as an asset class, just like you would look at fixed income or equity or whatever, and they go and buy these and trade them. That's a big driver also.

Basil Abulhamayel: There's others out there who are investors who look at this as an asset class, just like you would look at fixed income or equity or whatever, and they go and buy these and trade them. That's a big driver also.

Speaker #1: And they go and buy these and trade them. So that's a big driver also.

Speaker #6: And supply overall for new orders and delivery of these orders?

Raghad Al-Habi: Supply overall for new orders and delivery of these orders?

Raghad AlHarbi: Supply overall for new orders and delivery of these orders?

Speaker #1: There's quite a few coming online. I don't have the number off the top of my head, but there are a lot of vessels that are coming out of shipyards in China.

[Company Representative] (Bahri): There's quite a few coming online. I don't have the number on the top of my head, but there are a lot of vessels that are coming out of shipyards out of China. However, there's a lot of aging vessels at the same time. Net-net, I believe it will be balanced over time. There's a lot of aging ships that will be going out of the market in the next three, four years. I think you will see an increase coming out from the new shipyards that you see. At the same time, the vessels going to scrap or going to a dark fleet or wherever they go after they finish their useful lives.

Basil Abulhamayel: There's quite a few coming online. I don't have the number on the top of my head, but there are a lot of vessels that are coming out of shipyards out of China. However, there's a lot of aging vessels at the same time. Net-net, I believe it will be balanced over time. There's a lot of aging ships that will be going out of the market in the next three, four years. I think you will see an increase coming out from the new shipyards that you see. At the same time, the vessels going to scrap or going to a dark fleet or wherever they go after they finish their useful lives.

Speaker #1: However, there's a lot of aging vessels at the same time. So net, I believe it will be balanced over time. There's a lot of aging ships that will be going out of the market in the next three, four years.

Speaker #1: So I think you will see an increase coming out from the new shipyards that you'll see at the same time the vessels going to scrap or going to the dark fleet or whatever they go after they finish their useful lives.

Speaker #1: Okay.

Speaker #5: Thank you, gentlemen.

Speaker #1: We'll end it here. Yeah. Thank you. Thank you, Abdullah. We'll end it here. So thank you all for sending today's call and all materials will shortly be uploaded to our website.

Operator: Thank you, gentlemen.

Operator: Thank you, gentlemen.

[Company Representative] (Bahri): We'll end it here. Yeah. Thank you. Thank you, Abdullah. We'll end it here. Thank you all for attending today's call. All materials will shortly be uploaded to our website. If you have any follow-up questions, please contact us via ir@bahri.sa. With that, we will conclude today's call. Thank you for your time. Goodbye.

Basil Abulhamayel: We'll end it here. Yeah. Thank you. Thank you, Abdullah. We'll end it here. Thank you all for attending today's call. All materials will shortly be uploaded to our website. If you have any follow-up questions, please contact us via ir@bahri.sa. With that, we will conclude today's call. Thank you for your time. Goodbye.

Speaker #1: And if you have any follow-up questions, please contact us ir@bahri.sa. With that, we will conclude today's call. So thank you for your time and goodbye.

Speaker #2: Thank you.

Anas Al Jarboua: Thank you.

Faris Al Gahtani: Thank you.

Speaker #5: FNB Capital would like to thank Bahri's management for taking the time to conduct this call. We would also like to thank all participants for attending.

Operator: AMP Capital would like to thank Bahri's management for taking the time to conduct this call. We would also like to thank all participants for attending.

Operator: AMP Capital would like to thank Bahri's management for taking the time to conduct this call. We would also like to thank all participants for attending.

Speaker #5: I wish you a pleasant day.

[Company Representative] (Bahri): Thank you.

Basil Abulhamayel: Thank you.

Operator: Wish you a pleasant day.

Operator: Wish you a pleasant day.

[Company Representative] (Bahri): Thank you.

Basil Abulhamayel: Thank you.

Anas Al Jarboua: Thank you, Abdullah.

Faris Al Gahtani: Thank you, Abdullah.

Operator: You may now disconnect.

Operator: You may now disconnect.

[Company Representative] (Bahri): Thanks. Bye.

Basil Abulhamayel: Thanks. Bye.

Anas Al Jarboua: Thank you. Bye.

Faris Al Gahtani: Thank you. Bye.

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