Safe Bulkers, Inc. (SB) CEO Polys Hajioannou on Q2 2022 Results – Earnings Call Transcript

Safe Bulkers, Inc. (NYSE:SB) Q1 2022 Results Conference Call July 28, 2022 12:00 PM ET

Company Participants

Polys Hajioannou – Chairman and Chief Executive Officer

Loukas Barmparis – President

Konstantinos Adamopoulos – Chief Financial Officer

Conference Call Participants

Omar Nokta – Jefferies

Benjamin Nolan – Stifel

Climent Molins – Value Investor’s Edge


Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers Conference Call to discuss the Second Quarter 2022 Financial Results.

Today, we have with us from Safe Bulkers’, Chairman and Chief Executive Officer, Mr. Polys Hajioannou; President, Dr. Loukas Barmparis; and Chief Financial Officer, Mr. Konstantinos Adamopoulos.

At this time, all participants are in a listen only mode. There will be a presentation followed by question-and-answer session. [Operator Instructions]

Following this conference call, if you need any further information on the conference call or the presentation, please contact Capital Link at 212-661-7566. I must advise you that this conference is being recorded today.

Before we begin, please note that this presentation contains Forward-Looking Statements as defined in Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended, concerning future events, the Company’s growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters. Words such as expects, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify Forward-Looking Statements.

Although the company believes that the expectations reflected in such Forward-Looking Statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company.

Actual results may differ materially from those expressed or implied by such Forward-Looking Statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the demand for dry bulk vessels, competitive factors in a market in which the company operates, risks associated with operations outside the United States and other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission.

The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any Forward-Looking Statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

And now I will pass the floor to Dr. Barmparis. Please go ahead, sir.

Loukas Barmparis

Good morning. I’m Loukas Barmparis, President of Safe Bulkers. Welcome to our conference call and webcast to discuss the financial results for the second quarter of 2022. The second quarter was a good quarter.

As we see in Slide 3, our EPS reached the $0.40 per share, and we maintain our dividend policy of $0.05 per share. We are different than many of our peers as their free cash flows not only reward our shareholders through the dividend policy, but in parallel, we create intrinsic value through an extensive fleet expansion program with 11 newbuilds which comply with environmental regulations after 2025 known as IMO Phase 3 or CO2 emissions.

They also comply with the most stringent NOx regulations Tier III. Having taking delivery of the first Kamsarmax MV Vassos and where we are expecting the next delivery of a post Panamax, namely climate respects the next few days. We have already seen in the first vessel a notable increase of earnings capability due to impressive savings in fuel consumption.

We tend to compete on this basis without a little bit fleet but the most important is that all these orders with deliveries within the next two and a half years were placed timely in relatively at low prices substantially lower than the valuations today.

We are maintaining a comfortable leverage in order of our fleet scrap value, about 6.8 million per vessel, while the average age of our fleet although the fleet is aging, has stabilized in about 10.5 years due to our renewal strategy and the delivery of the newbuilds.

Our liquidity and capital resources are maintained strongest at 294.8 million, which together with a contract revenue of 390 million provides flexibility and cloud management in capital allocation.

I also need to highlight the importance of our scrubbing investments in Israel expensive environment. We have recently stored an additional scrub every one of our capes. The operation of scrubbers in our fleet further enhances our earnings capabilities.

During last quarter, as we see in Slide 4, we continued setting moves that improve our capital flow. In other words, we redeemed 37.3 million of [refurbishing] (Ph) saving in preferred dividends 8% of this amount on an annual basis and have initiated the buyback program acquiring from the market one million shares.

Of course, our main focus is linear operations in this inflationary environment. As a result of our daily operating expenses were $4,981 and our daily G&A expenses, which include the management fees were $1,382.

We believe that the increase of fuel prices are reflected in several OpEx cost components such as transportation costs, lubricants, costs for tickets for group changes, although the overall repatriation costs may gradually reduce if there are no restrictions, paints for dry docking, et cetera. Our OpEx are also affected as the cost of certain environmental upgrades, such as oil production based applications is expensive.

Moving to Slide 5, we would like to highlight additional points that make our management unique compared to our peers. Being one of the 10 pure global companies with six years plus experience in public since 2008, we enjoy the benefits of a sound corporate governance together with the alignment of our CEO and Chairman of the Board of Directors Polys Hajioannou, which is achieved through his shareholding percentage of about 40%.

For our management with 40% ownership, even during the extensive low charter, market conditions and the oversupply or basis of the past. We never did the reverse split. We never filed for Chapter 11 we avoided unwanted capital increases unless it goes our credit for all our shareholders.

We try to do the right thing. For example, we have 0% permission to chartering management and throughout management’s direct relations we achieved lower average startup chartering commissions to third-parties of 4% compared to the market standard which is 5%.

Our actual scheme on the game is what differentiates us, being ourselves shareholders of 40% when we make newbuild orders at a low market and create value for our shareholders, when such newbuild orders have appreciated by 20% to 25% today, or when we manage our versus aiming to achieve the best performance, or when we do all such prudent actions to make our company stronger.

The advantage that we see today is that in the future, there is no order in the levels of the past. So we remain cautiously optimistic, despite the global instability caused by invasions, energy crisis or inflationary pressure and well prepared in terms of environmental regulations.

As you can see Slide 6, our second ESG report was issued on July 25, focused on corporate governance, support of local communities with scholarship programs support of seafarers during COVID restrictions, training of personnel, 371 million investments in 11 Phase 3 newbuilds ahead of peers environmental brake upgrades in 2022 on existing fleet of 2.2 million use of about 2,000 tons of bio fuel by the end of May 2022 and meeting 1,550 tons less CO2. Reported also of verified EOI data for 2021. Please take a look on our sustainability report in our website as taking oil deductions for investments is what differentiates the Safe Bulkers.

Moving on Slide 7 for a single piece of quarterly results. As a general comment our 2022 second quarter profitability exceeded second quarter of 2021 profitability by 10 million in net revenues of 91.6 million in net income of 50.3 million.

We have achieved an EBITDA of 66.5 million and maintain significant liquidity and capital resources of over 600 million. We have redeemed in April 2020 to more than a quarter of our preferred shares improving our weighted average cost of capital. We have a significant cash flow visibility with over 360 million of charter contracts.

Our financial strength as reflected to our EPS were $0.40 per share enabled our board declared a dividend of $0.05 per common share. But at the same time we are renewing our fleet with second hand and face renewables well ahead of the competition.

Moving on to Slide 8, we highlight certain key figures of Safe Bulkers. All numbers which are presented here are as of quarter end. More specifically on the right graph, we compare our liquidity with our outstanding CapEx.

Our [indiscernible] CapEx resources was 294.8 million consisting of 159.4 million in cash and in-hand 55.4 million enrollment available revolving the bushing fed facilities and secured commitments.

Against outstanding CapEx, which were 319.5 million in relation to the remaining 10 Phase 3 renewables on the order book in our second case to be acquired within [indiscernible]. We have already paid as advances for CapEx 58.9 million.

On top of our liquidity capital resources we had a support and an additional borrowing capacity in relation to Chevron unencumbered, the existing basis is one 709 rubles upon their delivery. On the left graph we compare our debt against scrap value is against contract revenues and cash.

Our cash was 139.4 million and our contract revenue excluding struck scrubber benefit was 393.7 million net of commissions from our non-cancelable support and period time charter contracts. This is against our outstanding consolidated debt of 432.6 million, which includes the €100 million unsecured bonds.

We need to see that our fleet’s cap volume of 359.3 million, which is present in the last column, and is calculated on the basis of our fleet aggregate lightweight launch cap rate of $5.65 of lightweight ton is in the same order as they get.

Moving on to Slide 10, in the dry bulk market data will present the development of the CRB commodity index, which currently starts at a five year high. The index reflects basic commodities if future prices, for example, energy, agriculture, precious metals and industrial minerals, which represent leading indicators for Safe Inc.

As a result of the ongoing Russian Ukrainian war, we have witnessed a rabid surge of prices during 2022. The updated forecast of IMF released yesterday downgrades the expected growth of global GDP a 3.2 for 2022, lowered from 3.6 NAV and are 2.9 for 2023, lowered from 3.6 NAV.

In China further lock downs and the deepening of real estate crises have left those to be revised downwards by 1.1% with major global spillovers. In U.S. lower growth earlier this year reduced house hold purchasing power and tighter monetary policy drove a downward position of 1.4 in the sense in the real GDP growth. Improved significant downgrades reflect spillovers from the war in Ukraine and tighter monetary policy.

Global inflation has been revised up due to the war induced commodity prices increases. They brought in price pressures on food and energy prices, as well as lingering supply demand imbalances, as it is anticipated to reach 6.6% in advanced economies and 9.5% in emerging market and developing economies this year. Upward revisions of almost 1% from April.

In 2023, discretionary monetary policy is expected to affect global output, with projected increase by just 2.9%. The projected 2022 Chinese GDP stands at 3.3% despite the zero COVID policy lock downs and then 4.6% for 2023.

We note when increased activity on Chinese iron ore demand is the national target to control carbon emission is to be met and the struggle domestic coal production evidence in mainland China.

In India the projected predatory 2022 GDP stands at 7.4% and it is anticipated to reach 6.1% of 2023. The forecasted global dry budget on demand is expected to increase only by 0.2% in 2022 supported by the industrial materials like iron ore and coal and also by the agricultural commodities.

Let’s turn to Slide 11 to have a quick look at our capes aftermarket market conditions. As shown the top graph the capes market for the year-to-date continues to be healthy. Capes lately have been volatile, driven by the commodities dynamics, which got analyzed.

The forward freight agreement curve, present in red color is about 25,000 for 2022. Similarly, for Panamax as seen in the bottom graph, the FFA carries about 20,000 for 2022. The prevailing commodities market is likely to support the freight market throughout this year.

On Slide 12, we present our scheduled order book deliveries. We have one more delivery in 2022 which is imminent, which is the delivery of on post Panamax namely MV Climate Respect in the next few days. This is the second delivery this year, the first being [indiscernible] in May.

We have five more newbuild deliveries in 2023, three in 2024, and one at the beginning of 2025. A total of 11 Phase 3 newbuilds which will maintain Safe Bulkers average fleet rate at 10.8 years in 2025.

In the bottom graph, we present the record low order book and expected fleet growth for the forward years up to 2026 for all vessel sizes. The supply fundamentals are strong as we witnessed a historically low order book and the shortage in CP capacity, which is guided by other sectors orders mainly containerships in L&Ts.

Turning to Slide 15, we focus on intrinsic value creation as a result of our investments in scrubber technology currently installed on 18 of our vessels. The surge in fuel prices in the last months, which is more evident in today’s market, has pushed the very low sulfur fuel oil versus a [indiscernible] differential at high levels, which is translated to increased revenues for the scrubber-fitted vessels. Presently, the so called Hi-5 in Singapore stands about $290 per ton and according to the future market, the balance for 2022 stands at about $280 per ton.

On an annual average consumption of about an Australian 7,200 metric tons of for our 18 scrubber fitter basis, they implied scrubber gain potential is about $26 million per annum in aggregate at the 250 assume spread. Let me know here that we have agreed five additional scrubbers installations for our Capesize class vessel.

Furthermore, the Company is pursuing a vessel upgrade program during dry-dockings, in the amount of about $2.2 million for 2022, which involves environmental upgrades including application of low friction paints and installation of energy saving devices.

Concluding the Section in Slide 14, we would like to reiterate that without existing liquidity and contracted revenue with our existing order book ahead of the competition and without strong financial position. We set the ground for a period where environmental regulations will dictate the competition rules.

We believe that we are well prepared that the market will continue to provide opportunities either in relation to our operations and profitability, or in relation to new technologies and fleet renewal.

Now, let me pass the floor to our CFO, Konstantinos Adamopoulos for our financial coverage.

Konstantinos Adamopoulos

Thank you, Loukas and good morning to everyone. Let me start with our quarterly financial highlights on Slide 16. During the second quarter of 2022, we operate in an improved charter market environment compared to the same period of 2021 with low interest expenses and increase revenues which also include the earnings from scrubber fitted versus.

Our quarterly net revenues stood at $91.6 million up from $81.6 million for the same period of last year. Net revenues increased by 12% compared to the same period in 2021, mainly due to the increased time charter equivalent end rate as a result of the improved market, assisted by the additional revenues and by charter – vessels.

The daily times charter equivalent was $25,050 compared to $21,098 of 2021. The net income from the second quarter of 2022 reached $50.3 million, compared to net income of $32.4 million during the same period in 2021.

Our daily OpEx was $4,981 versus $4,874 last year, and the same number excluding drydocking and delivery expenses stood at $4,648 versus $4,539. Daily vessel, operating expenses marginally increased by 2%, mainly affected by increased repairs and maintenance expenses, and also increased lubricant costs.

Our all-in OpEx G&A for Q2 2022 which we believe is one of the most competitive compared to our peers stood at $6,363 this includes all drydocking and bedevil expenses, as well as our directors and officers compensation. Our adjusted EBITDA for the second quarter of 2022 increased to $66.5 million, compared to $54.1 million for the same period in 2021.

Our adjusted earnings per share for the second quarter of 2022 was $0.42, calculated on a weighted average number of 121.6 million shares, compared to $0.31 during the same period of 2021, calculated the weighted average number of 109.7 million shares.

Let me conclude on Slide 17, with our quarterly operational highlights for the second quarter of 2022 and then comparison with the same because of 2021. We are further very satisfactory financial performance or $0.40 per share and the Company’s Board of Directors declare the $0.05 dividend for common share.

During the second quarter, we took delivery of our first customer new bill. We believe that our newbuild will provide us with substantial operational information advantages for the years to come.

We would like to emphasize that the Company is maintaining a healthy cash position of about $167 million as of 22 July, and another 140.4 million in revolving credits and secured commitments. The combined liquidity of over 300 million and provides us with significant firepower.

Furthermore, we have contracted revenue from our non-cancelable spot and peer – charter contract of over 360 million as of commissions and this number does not exclude does not include scrub revenue. And we have also additional borrowing capacity in relation to seven debt free vessels, one secondhand and also nine newbuilds upon their delivery.

We believe that a strong liquidity and relative low leverage will enable us to be flexible with our capital while still rewarding our shareholders. Our press release presented more detail of our financial and operating results and we are now ready to take your questions.

Question-and-Answer Session


Thank you sir. [Operator Instructions] I show our first question comes from the line of Omar Nokta from Jefferies. Please go ahead.

Omar Nokta

Hey guys, good afternoon. Thanks for the overview, I think was pretty good and detailed. I did want to ask about the buyback, you guys announced last month, the five million buyback and you put it to work pretty quickly, I would say with a million already repurchased. Stock has done fairly well here over the past several weeks. How are you thinking about buybacks from here? Stocks gone up potential still has more to go, but just wanted to think about or hear what you have to say regarding potential further capital put the worker on the buyback?

Loukas Barmparis

We have announced that we will do a buyback up to five million. We have done as we have said one million. This buyback is done opportunistically when the market is very low. And because we believe that and when we believe that our stock is undervalued. We expect this program will continue and we make this size this buyback program from time-to-time, when we feel it the time is right.

Omar Nokta

Thanks. And I guess in regards to the dividend, obviously we started that last year. Any updated thoughts on how you see that number? I’m just asking, you obviously know this, but I think the majority of your U.S. peers have a formulaic payout to their dividend based off of quarterly earnings. I’m not saying you have to do that. But just wondering are you comfortable leaving the dividend as it is on that nominal $0.05 a quarter? Can you see yourself migrating to a formulaic payout similar to some of the other players?

Loukas Barmparis

Because we have this dividend policy and we take a decision of dividend quarterly. It seems, I mean, of course, we would like to see a steady dividend, but I would like to remind you that we are one of the few companies that have an extensive investment program in newbuild. And so, we direct our free flows to several points.

So, the one is the investment, because we really want to invest in Phase 3 vessels, as we have already seen from the operations, the first one will be much more profitable to the company compared to all the other vessels we have, because it bends substantially less fuel. And this is something that you can mean where details are shown in our ESG report, which is presented in our website.

The second report, we want to reward our shareholders with a meaning dividend, which is related also at this point, it is not, I would say it should be considered as a good compare to the actual value of our stock. And of course, we have also direct some small portion of our free cash flows to the buyback program to support our Company.

We did those additional options. For example, we redeemed a substantial number of a preferred, which improves our work and our capital structure. And I think this will be beneficial in the long run for our common shareholders. So we have a very comprehensive multiple way of thinking compared to the dividend policy.

We are not single minded only towards paying dividends that remind you that our CEO has 40% in the company, so he would be very happy to have additional ever more dividends. But the important thing is to have a strong company in front of ahead of this more stringent regulations that we have come that will affect the everyone in companies like us that we are investing in – will be able to, to react and be able to be more profitable than the others and to compete on the basis of environmental performance.

Omar Nokta

Now, very prudent on your part there. I understand. Thank you. Just one follow-up. I wanted to ask about maybe just the mechanics of the Capesize time charters, you mentioned them in the past also, but just wanted to understand how do the scrubber benefit work for instance? The latest release, you mentioned, those two vessels that are fixed, I believe three years each, there’s a fuel benefit of 5.4 million in addition, based off of that $220 assume fuel spread? Is that just an assumption? And you might just think you just don’t mind sharing the mechanics?

Konstantinos Adamopoulos

Yes, look currently our Capesize bulk carrier consumes around 10,000 tons of fuel every year, based on the sick days of the vessel. So on this quantity, if you assume $220 usually you give a 10% discount charters from period charters was trouble benefits, it means you get around 200. So it is around two million a year.

So over the course of the three years, you expect to get something between five million and six million on the revenue of the vessel, which is a very good return if you remember scrubber at the time, we invested the cost, including installation and cost of the scrubber and the cost of all the technical services costing around 3 million per vessel.

It is a very good return coming at the appropriate time. Of course, we have the very low scrubber. And if it didn’t 2020 due to COVID and then improved one in 2021. And much more improved in 2022 with the effects of the war and the widening overall oil prices and the spread between HFO and realist support.

We are optimistic that this will be a steady income. And we are proceeding to invest in all our Capesize scrubbers in the next six to nine-months. Because we think even up 200 or 150 or 160 still a profitable investment after two or three years. So we are going to do this investment on all the higher consumption vessels.

Omar Nokta

Interesting. Thank you. And I guess that is I was going to ask that that you mentioned initially that the you typically share that that the charter only takes 10% as a discount and you are keeping that 90% benefit based on…

Loukas Barmparis

And look on those two specific charters we managed to keep 90% it depends on the market situation, sometimes shutters press for 20% to keep sometimes you managed to get away with 10%, some of the times you have to give 15%. It is only relation also to the basic rate that you are getting.

Sometimes you decide that you can give chunk a little bit more on the scrubber and get a little bit better rates on the higher. So it is a given take practice. Sometimes when the spread is very high also charter, he’s earning 10%, $200,000 to $300,000 a year from zero investment. So far for them as well as nice return on massive.

Omar Nokta

Definitely. And just as you mentioned the scrubbers that you are going to install on the handful of remaining capes? Is that something you are going to do proactively as in pull them from trading and install them are you doing that as sort of a normal part of their service?

Loukas Barmparis

And look, no, we will do some of them a bit earlier, and some of them during their normal surveys. We are doing other environmental improvements, so at the same time. Well, let’s say more urge to do those investments and those improvements as early as possible to reduce real oil consumption by 5%, 10% and improve the initials of the ships.

And at the same time, we’ll take advantage of the 20, 25 days downtime, but we may have to do the early back scrubber investment. So we’ll start turning back the premium wise to have high oil prices.

We don’t expect oil prices to drop anytime soon, despite the talks of coming session and things like that. We believe that will be struggled or in the next six to 12-months to keep oil prices contained. You see already what is happening with the effects of the world about you see Russia is playing a game with the gas supplies to Europe and I think the current oil prices will remain at least for the next 12-months.

So, this will give at least for owners who invested the timeline scrubbers some extra cushion that will support earnings during a time that fed market will not be over performing but would be rather stable or a little bit lower than we used to have in 2021.

But for us is a good investment that is good, we made the timely they will have the technical knowhow we can do it quickly, we can make the changes the investments very quickly we have secured the scrubbers which also this is a struggle. These days we have secured this scrubber equipment timely. It is all from the same manufacturers, which was the most reliable manufacturers.

And I believe it is a good investment on behalf of the company. Now you make back the investment in two years or three years. For me it is a good investment when you compare assets you make your target is to make the breakeven in eight or 10-years here you make in two or three. So it is a very good investment on ships that the biggest ships that they have big consumptions.

Omar Nokta

Got it. very good and helpful. I will leave it at that.

Loukas Barmparis

Thank you.


Thank you. And I show our next question comes from the line of Ben Nolan from Stifel. Please go ahead.

Benjamin Nolan

Yes, sorry. Actually, Omar asked my question. Thanks guys.


Thank you. [Operator Instructions] And I show our next question comes from the line of Climent Molins from Value Investor’s Edge.

Climent Molins

Hi thank you for taking my questions. For me on the last question regarding the installation of scrubbers on the remainder of Cape sizes, when should we expect the retrofits to be conducted? And how many of those are expected before the year-end?

Polys Hajioannou

One will be definitely before year-end towards the end of the year. And three more I think it will be in the first quarter just after the Chinese New Year in the end of the first quarter of 2023. Loukas, you may correct me by saying something inaccurate. I think these are about the dates we have.

We have the availability of intelligent scrubbers and the ships, their cycles, those surveys and those classification survey cycles to coincide with intermediate offers or surveys of the assets. You remember, you want to have down lines without doing other things.

Loukas Barmparis

Yes, it is correct. It is correct. I mean, they want our CRM, the other three other Chinese to hear one thought was 2023 hearing.

Climent Molins

And you have been very active with blue expansion over the past couple of years, adding new rules and selective second hand tonnage. I was wondering what is your current stance regarding additional acquisitions and on a similar note, could you provide some commentary on how you be the oldest person of your fleet?

Polys Hajioannou

Yes, look at the fleet expansion which started late in 2020, we felt the market will start recovering from the COVID-19. The demand side at least. We are strong believers in the in the of the dry bulk market simply because we never remember that we had dry bulk.

Repeat the question please?

Climent Molins

Yes, I was wondering if you could provide some additional commentary on your stance regarding potentially continuing to expand the fleet and your views on how you treat the oldest portion of your fleet right now?

Loukas Barmparis

Yes. So, as you have seen, we have done substantial savings of vessels and acquisition of younger vessels. So we have done I would say the biggest part of it not all in terms of second kind of acquisitions. We have done a good ordering of a newbuild vessels.

Our oldest vessels that we have in our fleet, which are 2004 – markers have a despite the fact that quite old, we have very good environmental performance. So we are willing to separate them in the next step period, although from time-to-time, we may share one, but I don’t think that we should expect something spectacular.

The most important thing is our investment strategy focused on Phase 3 vessels. And of course, I would like to say that we are monitoring any future developments in terms of fuels, which I believe will come quite late in terms of alternative fuels or make green fuels, I don’t believe that this will be a something of the next two to three years, it will be later on.

And of course, the production of green fuels will come even later. So we need to see more, let’s say substantial proofs that on what technology should we move. That is why we are skeptical, and concerned about new orders.

But we have done our part of the job, because this 11 seats that we have bought that being Phase 3 have substantial, substantially lower performance, lower in a consumption compared to. I would say by something like performs lower consumption compared to a similar sized vessels. And that creates profit, so we intend to compete on this basis.

Otherwise we monitor the situation. And of course, another point that I want to mention, which I don’t know, if we have done that can see now is that the company is also using quite substantially biofuels, which represent also a good reduction in CO2 emissions compared to the normal or standard HFO.

So maybe in the future, we may have some old assumptions or some selective sets of older vessels, but they are quite energy efficient. Maybe we can find another second hand, but it is quite probable. And we will try to see what will be the next generation of vessels that we can invest.

Konstantinos Adamopoulos

If I may add to what Loukas said. The delivery of the newbuild is coming for Safe Bulkers or the time that fuel oil price £1,000. We never thought we never thought when we ordered those vessels that we will be getting them at a time when a ton of fuel is really supposed – fuel is worth £1,000. We consider the sound investment with the price of oil of $500 or $400 a ton on the VLSFO.

We order the ships timely because of the consumption and on the new regulations. And because we have got a price of around 30 million vessels, 40, 45, but they are worth today. So the fact that we are receiving the ships at the time, when the market is costing the fuel oil VLSFO one ton is costing 1,000 bucks or in some places even more than that 1,200 or something like this is another benefit for this investment. So this is very well shown in the next quarter’s results.

Climent Molins

Alright. Thank you very much for the color. That is all for me. Thanks for taking my questions and congratulations for this quarter.

Polys Hajioannou

Thank you very much.


Thank you. I’m sure no further questions in the queue. At this time, I would like to turn the call back over to Dr. Loukas Barmparis, President for closing remarks.

Loukas Barmparis

Thank you very much to all and we are looking forward to discuss again with you our financial performance for the third quarter, which will happen somewhere in November. Thank you again and have a nice day.


Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.

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