EuroDry Ltd. (EDRY) on Q4 2021 Results - Earnings Call Transcript
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Operator: 0:04 Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Conference Call on the Fourth Quarter 2021 Financial Results. We have with us today Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session . 0:45 I must advise you that this conference is being recorded today. Please be reminded that the company announced results today with a press release that has been publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone that in today's presentation and conference call, EuroDry will be making forward-looking statements. Those statements are between the meaning of the Federal Securities Laws. 1:10 Matters discussed may be forward-looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to Slide 2 on the webcast presentation, which has the full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. 1:51 I’d now like to pass the floor over to Mr. Pittas. Thank you sir. Please go ahead.
Aristides Pittas: 1:58 Good morning, ladies and gentlemen. And thank you all for joining us today for our scheduled conference call. Together with me is Tasos Aslidis, our chief financial officer. The purpose of today's call is to discuss our financial results for the full year and quarter ended December 31, 2021. 2:20 Please turn to slide 3, our income statement highlights are shown here. This is by far the best quarter since the separation of EuroDry from Euroseas back in 2018. For the fourth quarter of 2021, we reported the total net revenues of $22.3 million and the net income of $16 million. After adjusting for an approximate $2.9 million fair value gain in derivatives and $0.8 million of preferred and preferred deemed dividends. 2:59 Adjusted net income attributable to common shareholders was $12.3 million or $4.29 per share diluted. Adjusted EBITDA for the quarter stood at $16 million. For the full year 2021, our net revenue was $64.4 million, and net income was $31.2 million. Our adjusted net income was $30.3 million or $11.88 per share diluted, after adjusting for an approximate $0.8 million change in fair value of derivatives, the $1.65 million loss on debt extinguishment and $1.75 million of preferred and preferred deemed dividends. 3:48 Adjusted EBITDA for the 12 months of 2021 stood as $42.3 million. Both the quarterly and the yearly changes of net revenues and adjusted EBITDA were higher than the previous years by multiple measures of magnitude as can be seen in the slide. Our CFO Tasos Aslidis will go over our financial highlights in more detail later on in the presentation. 4:18 Please turn to slide 4 for our operational highlights. As previously announced on January 19, 2022, the company agreed to acquire Motor Vessel with Molyvos Luck, in 2014 built Supramax Vessel for $22.2 million. The vessel was financed by own funds, but it expected to be further financed postdelivery with a bank loan estimated between $10 million to $11 million. The vessels existing charter will be assumed at $13,250 per day until April 2022. The vessel is expected to be delivered within next week. 5:08 The Charter in France, our Motor Vessel Alexandros P is fixed for the trip of about 50 to 55 days at $45,000 per day, followed by $26,000 per day for the next 35 days, plus a $600,000 gross ballast bonus. Motor Vessel Good Heart, it was fixed for approximately 12 to 18 days at $33,000 per day followed by $30,250 per day for 20, 25 days and thereafter fixed for the times charter at $35,000 per day for the period between October to mid December 2022. 5:51 Finally Motor Vessel Tasos was fixed for the trip of about 80 to 90 days at $15,750 per day. During the first quarter of 2021, the company settled the 90 days of previously sold forward freight agreements, the equivalent of one Panamax vessel, which was originally sold at a rate of $12,550 per day at the loss of $2 million. In addition, during the quarter, we sold the 90 days in Q1 2022 of FFAs equivalent to get a one Panamax vessel as $31,500 per day, subsequently closing that position $23,200 per day a few days later, realizing a gain of about $750,000. 6:48 The total net realized loss from FFA contracts was about $1.26 million for the quarter. There were no drydockings during the fourth quarter of 2021. Furthermore throughout at the market offerings in 2021, we raised approximately $10 million of net proceeds by issuing $341,000 shares approximately at an average share price close to $30 per share. Also, during 2021, we redeemed all outstanding Series B preferred shares at par $16.6 million in total. Out of this amount, the last $13.6 million was redeemed in December 2021. 7:44 Please turn to slide 5 for the summary of EuroDry’s current fleet. With the acquisition of Molyvos Luck, EuroDry’s fleet has increased to 10 units. Further complementing our cluster of motor vessels with highly efficient eco designs and attractive commercial characteristics in terms of fuel efficiency and operations requirements. Our current fleet has an average age of 12.9 years with a current carrying capacity of around $726,000 deadweight tons, about 50% higher than what it was at the beginning of the year. 8:28 Slide 6, shows the current vessel employment schedule. As you can see, fixed rate coverage in the remaining of 2022 stands at about 19%. This figure of course, excludes ships on index charters which are secured employments, but are open to market fluctuations. 8:53 Now let's turn on Slide 7, where we'll go over the market highlights for the quarter ended in December 31, 2021 now, the Drybulk fleet earnings after peaking in October 2021, when they registered the highest level since early 2010, subsequently retreated by about 35% in November and December, while in January ’22, they retreated by approximately another 30%. 9:27 At the same time after initially retreating to one-year time charter rates recover the debate during December 2021 and January 2022 suggesting that there are expectations amongst the market participants that the spot earnings a cyclically common effects during the first couple of months of every year is only temporary. During the last week, we are already seeing quite a strong positive reversal in the spot market, and we expect Clarksons data to be released on Friday to show an increase of at least $2,000 to $3,000 on the spot rate, and $1,000 on the one year to see, the relative to the further report data which is included in our presentation. 10:17 Even if the present levels though, Spot earnings are at high levels relative to the last decade generally, and very high levels, especially relative to the time of the year. According to Clarkson's second-hand bulk carrier price index slightly decreased by approximately 0.2% during Q4 2021, while new building prices have increased to more than $38 million for Kamsarmax vessels and $35 million for Ultrmax vessels respectively. The fleet grew by 3.6% during 2021. 11:03 Please now turn to slide 9. The IMF’s revised outlook is largely led by growth markdowns in the two largest economies, the US and China. According to the January IMF report, global growth is expected to decrease from 5.9% in 2021 to 4.4% in 2022, 0.5 percentage point lower since the previous projections in October. However, the 0.5% growth of the IMF expects will be delayed in 2022. The IMF now forecasts it will gain it in 2023 and has increased its projection for 2023, 5.5% to a level of 3.8%. 11:59 Prospects for emerging markets in developing economies and also generally followed growth then 2021 and 2022, except for India, which is expected to be steady at around pose a nice 9% level. From the developed economies Japan and ASEAN-5 should do better than 2021, whilst the US citing tighter Fed policy and then anticipated hold to any further stimulus spending by congress, reduced its growth forecast for 2022 since October, but by 1.2 percentage points to just 4%. 12:45 China's economic growth is projected to be only 4.8% in 2022 before picking up again in 2023 as the Central Bank steadily ramps up policies in towards dock of South of downturn. The lower growth rate underlines multiple headwinds facing the world's second largest economy due to a property downturn, a crackdown on debt, proper pollution measures and strict COVID-19 curves, which have soft businesses and reduced consumption. 13:21 Looking at the dry bulk trade and according to Clarksons research, demand is expected to grow by 2.2% in 2022 compared to 4.8% for the previous year. For 2023, we expect dry bulk trade to grow at a moderate pace of 2.3%. Unfortunately, demand for ships is affected, not only by demand for the commodities, but by changes in logistical and trading patterns, vessel speed and all the other parameters that have become so difficult to evaluate and critical during the last few years due to the combined effects of the pandemic and the environmental consideration. 14:10 Please turn to Slide 10. The orderbook as a percentage of total fleet up until February 2022, stands at 6.8%, which is still around the lowest levels we've seen in the last 25 plus years. Please turn to Slide 11 for our Drybulk Fleet Overview. Whilst Clarksons expects new deliveries of about 3.1% of the current fleet to be delivered in 2022 and 2.6% in 2023. We expect a net fleet growth of around 2% during 2022 and below 1% in 2023 after also taking into account scrapping, sleepers and other possible removals. Consequently, this sector is well positioned for a strong year and structurally for the next several years, thanks to a very limited supply growth. 15:15 Please turn to Slide 12, where we summarize our outlook in the DryBulk Market. As previously mentioned, global recovery continues, yet new COVID-19 variant, rising energy prices and elevated inflation still weigh in and may slow economic growth. The market has been on a strong trajectory on the back of highly supportive conditions in the commodity markets having reached 11 years highs in Q3 2021. In the last quarter, we have seen a significant fall, reflecting mostly reduced demand for from China, which has affected primarily the Capesize market, but the trickle down to the smaller segments as well. We expect earnings to remain volatile at high levels as the short and medium-term outlook are generally positive and supported by one of the lowest order books ever. Seasonal weaknesses can also be expected. 16:22 Furthermore, ordering of new ships for 2023 deliveries is expected to be extremely low to nearly nonexistent due to lack of available slots in shipyards. In addition, as mentioned in previous quarters, the lack of clarity for the fuel of the future remains unknown, something that makes placing a new order a very risky option. Overall, we expect the market to remain at relatively high levels with more stability on the smaller sizes and more volatility in the Capesize sector. Congestion ease timing and the implementation of the new IMO environmental regulations in January 2023 will be key elements in the direction of the market. 17:16 Let's turn to Slide 13. The left side of the slide shows the evolution of one-year time charter age of Panamax dry bulk vessels since 2002. As of the end of last week, the one-year time charter rate for Panamax with capacity of 75,000 deadweight tons, stood at $22,625 and as we said, is now rising. On the right-hand side of the slide, you can see the historical price range for the 10-year old Panamax vessel, which has a current price of around $25 million. 17:58 Over the past year, Drybulk prices have gradually been increasing, exceeding the historical medium and average levels, but still are significantly lower than prices seen in the beginning of 2011. We believe that it is highly probable that this period will be a period with higher prices and higher earnings than the last decade where both earnings and prices and also inflation were extremely low. And as such, we are prepared to adapt to this changing environment and continue growing EuroDry steadily, but cautiously for the benefit of our shareholders. 18:43 Let me now pass the floor over to our CFO, Tasos Aslidis to go over our various financial highlights in more detail. Tasos, the floor is yours.
Tasos Aslidis: 18:54 Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. Over the next 5 slides, I will give you an overview of our financial highlights for the fourth quarter and full year of 2021 and compare them with our financial results in the equivalent periods of 2020. 19:19 For that, let's turn to Slide 15. For the fourth quarter of 2021, the company reported total net revenues of $22.3 million, representing a 248% increase over total net revenues of $6.4 million during the fourth quarter of 2020. This increase was the result of the increased average time charter equivalent rate and by our vessels and the higher number of vessels we operated in the fourth quarter of last year compared to the same period of 2020. 19:56 The company reported a net income for the period of $16 million and a net income attributable to common shareholders of $15.2 million as compared to a net loss of $0.3 million and a net loss attributable to common shareholders of $0.7 million for the same period of 2020. Interest and other financing costs for the fourth quarter of 2021 were $0.7 million as compared to $0.5 million for the same period of 2020. The increase mainly due to the higher average debt outstanding for the period. 20:40 Adjusted EBITDA for the fourth quarter of 2021 was $16 million compared to $1.8 million achieved during the fourth quarter of 2020, an increase of 773%. Basic earnings per share attributable to common shareholders for the fourth quarter of 2021 were $5.38, calculated on about 2.8 million weighted average number of shares outstanding, while fully diluted earnings per share were $5.32 calculated on about 2.9 million shares weighted average number of shares outstanding compared to basic and diluted loss per share of $0.31 for the fourth quarter of 2020. 21:37 Excluding the effect on the income attributable to common shareholders for the quarter of the change in fair value of our FFA derivatives and the unrealized gain on interest rate swaps, the adjusted earnings attributable to common shareholders for the quarter, ended December 31, 2021, which have been $4.34 basic and $4.29 diluted compared to adjusted loss per share of $0.34 for the same quarter of 2020. 22:19 Usually, security analysts do not include the above items in the published estimates of earnings per share. I would also like to highlight here that the adjusted net income attributable to common shareholders for the fourth quarter of 2021 includes a $0.5 million charge is classified as preferred being the dividend, which is the result of the redemption of our remaining preferred shares during the quarter without which, the adjusted diluted earnings per share for the quarter would have been $4.48. Let's now move to the right half of the slide to discuss the same figures for the full year of 2021. 23:08 For the full year of 2021, the company reported total net revenues of $64.4 million, representing a 189% increase although total net revenues of $22.3 million during the full year of 2020. Again, as a result, of the increased time charter equivalent rate of vessels earned and the higher average number of vessels we operate. The company reported a net income for the period of $31.2 million and net income attributable to common shareholders of $29.4 million as compared to a net loss for the period for the year of $5.9 million and a net loss attributable to common shareholders of $7.5 million for 2020. 24:02 Interest and other financing costs for 2021 remained unchanged at about $2.3 million compared to the same period of 2020. The number you see on this slide includes a $1.7 million attributed to a loss on debt extinguishment due to the conversion of part of our debt in the second quarter of 2021 to common equity. 24:32 For 2021, the company recognized a $0.3 million gain on foreign interest rate swaps and a $4.1 million realized loss on FFA contracts as compared to a loss on derivatives of $0.8 million for 2020, which was compared of $0.3 million loss in FFA contracts and a $0.5 million loss on free interest rate swaps for last year. Adjusted EBITDA for 2021 was $42.3 million compared to $3.7 million achieved during 2020, an increase of 1,050%. Basic earnings per share attributable to common shareholders for 2021 were $11.63 calculated on about 2.5 million weighted average number of shares outstanding, while fully diluted earnings per share were $11.53 million calculated again on about 2.5 million weighted average number of shares outstanding compared to basic and diluted loss of $3.20 per share for 2020. Excluding these factors, the earnings attributable to common shareholders for the year of the change in the fair value of derivatives and the loss on debt extinguishment, the adjusted earnings attributable to common shareholders for the year 2021, which has been $11.98 basic and $11.88 diluted compared to an adjusted loss of $3.04 basic and diluted for 2020. And as previously mentioned, secured channel does not include the above adjustments in the estimates of earnings per share. 26:29 I will mention again that as I did for my presentation for the quarterly results that the adjusted net income attributable to common shareholders includes a deemed preferred dividend charge of $0.7 million for the year as a result of our full redemption of our preferred sales. After that redemption, our capital strategy has been simplified includes only bank debt and common equity. 26:57 Let's now turn to Slide 16 to review our fleet performance. We will start our review by looking first at our fleet utilization rate for the fourth quarter of 2020 and 2021. As usual, our fleet utilization rate is broken down into commercial and operational. During the fourth quarter of 2021, our commercial utilization rate was 99.8%, while our operational utilization rate was 99.5% compared to 100% commercial and 99.9% operational for the fourth quarter of last year. On average, 9 vessels were owned and operated during the fourth quarter of 2021, earning an average time charter equivalent rate of $29,157 per day compared to 7 vessels that we operated in the same period of 2020, aiming an average time charter equivalent rate of $10,761 per vessel per day, almost a threefold increase in charter rates between the 2 years. Our total daily operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, averaged about $6,324 per vessel per day during the fourth quarter of 2021 compared to $6,258 per vessel per day for the fourth quarter of 2020. 28:37 If we move further down on this table, we can see the cash flow breakeven rate that we had during the fourth quarter of this year, which takes into account also drydocking expenses, cash interest expenses, loan repayments and any preferred dividend payments is paid in cash. Thus, for the fourth quarter of 2021, our daily cash flow breakeven rate was about $11,625 per vessel per day compared to $9,574 per vessel per day for the fourth quarter of 2020. 29:14 Let's now look on the right part of the slide to review the same figures for the full year. During 2021, our commercial utilization rate was 99.9%, while our operational was 99.6% compared to 100% commercial and 99.7% operational for 2020. On average, 7.9 vessels were owned and operated during 2021 earning an average time charter equivalent rate of $24,222 compared to 7 vessels owned and operated during 2020, earning on average $9,687 per vessel per day. 30:13 Our total operating expenses again, including management fees, G&A expenses, but excluding drydocking costs for 2021, amounted to $6,456 per vessel per day compared to $6,211 per vessel per day for 2020. Let's look, again, the bottom of this table to see our cash flow breakeven rate for the year, which amounted to $10,728 per vessel per day in 2021 compared to $10,800 for 2020. 30:41 Let's move now to Slide 17. If we review this slide for the last year and to serve as a calculation tool to enable our shareholders and investors to assess the earnings potential of our fleet in the coming year and under the current environment. The table shown in the slide has 2 components I will briefly explain. The top part refers to our fixed rate contracts. As you can see, our contracted coverage in fixed rate contracts is about 19% for the year, about 50% for the first quarter, but declined to 14% and 10% in the second and third quarters and is very small in the fourth quarter. 31:27 This strategy reflects our expectation that the market will remain rather strong at levels indicated by the forward-freight markets. The rest of our vessels that are employed in contracts are linked to the relevant to their size Baltic Dry Index. Our calculator indicatively shows further below the Supramax and Panamax Baltic forward rates as of February 8, 2022, in this instance and also shows how this index levels get translated to rates for our ships. We actually show here the final blended rate for the open days of our fleet, which you can see right below the Supramax and Panamax forward rates in the table. Based on these assumptions and by further assuming for simplicity, $6,700 per vessel per day operating and G&A costs and a 5% commission rate, one can estimate the contribution to the EBITDA of our open days. The final result is additionally adjusted for our preliminary dry dock expenses expected during 2022. 32:50 This overall exercise is meant to provide a simple tool to calculate our EBITDA for this year. Obviously, one can end -- see their own assumptions about the rates to do that. It's worth observing that its current rates, one would expect an annualized EBITDA rate that is above that what we recorded in 2021. Furthermore, one can use this calculator to estimate the dependence of our 2022 EBITDA to the average rate earned by our open days. For example, it changed for $1,000 per day in the average rate and -- by our open days, which result in about $2.8 million change in our 2022 EBITDA. 33:59 Let's now move to Slide 18 to review our debt profile. On the part of this slide, we can see our loan -- the loan repayments of our bank debt. As of September 31, 2021, we had an outstanding bank debt of about $7.9 million. By looking at the chart, we can see that we had debt repayments between $10.5 million and $14.1 million over the next -- each year over the next 3 years before our loan repayments dropped to between $4 million and $5 million in 2024 and 2025. Our next payment is towards the end of 2023 for about $11.3 million, and that refers to one of our Kamsarmax vessel. 34:21 We expect to be able to refinance that balloon payment as we have done in several previous locations. A quick note here on the cost of our funding or the cost of our debt, the annualized margin of our debt is about 2.8%. Assuming the LIBOR rate of about 0.3% on the top of it, we can estimate the cost of our bank debt to be around 3.1%. At the bottom of this slide, we can also see a projection for our cash flow breakeven level for the next 12 months which are expected to be around $24,500 (ph) per vessel per day. You can see the components that make up that breakeven level. 35:21 Let's now conclude by moving to Slide 19, where we can see some highlights from our balance sheet in a simplified way. This slide shows you a snapshot of our assets and liabilities. On our asset side, you can see that we have cash and other assets of about $32.6 million and also the book value of our vessels of $128.5 million making our total book value of our assets at $161.3 million. On the liability side, our debt as of December 31, 2021, stood at $79.4 million, which approximately represents 49.3% of the book value of our assets. 36:14 Accounting for other liabilities as of December 31, 2021, of $3.8 million, we can get a book value -- a net book value of $78 million which translates to $26.8 per share. However, we estimate that as of the end of December 2021, the market value of our 9 vessels was about $182 million, that is 42% higher than the respective book values, suggesting the per share should be around $45.3 per share. And although our share price has recently increased and traded around $24 to $25, it is still significantly below the level of what we estimate our to be, thus potentially representing a significant appreciation opportunity to our shareholders. 37:14 And with that comment, I would like to turn the floor back to Aristides to continue the call.
Aristides Pittas: 37:21 Thank you, Tasos. Let me open up the floor for any questions we may have.
Q - Tate Sullivan: 37:46 Have a good day and Tasos and Aristides.
Tasos Aslidis: 37:48 Hi.
Tate Sullivan: 37:51 Hi, Starting on the – as I have in the past since you've introduced the EBITDA calculator. And Tasos, can you just go over a couple of changes. I apologize if I missed it on the indicative drydocking costs. I do not think you included those in the January presentation and also a slight increase in the OpEx and G&A vessel per day cost from $6,500 to $6,700. Can you just walk over why you decided to make those changes, please?
Tasos Aslidis: 38:21 Regarding the drydocking costs, we always included them simply in 2021, we had a very -- almost no drydocking expenses. So that's why we have included them and absolutely, sorry we didn't have drydocking expenses in 2020, but almost no drydocking expenses in 2021. So it was -- it made a very small difference and perhaps didn't list them explicitly on the EBITDA calculator for 2022, it's something due that we should take into account, probably different from other presentations are always our EBITDA is net of drydocking expenses. And we increased the estimate for our OpEx engineering costs partly to be conservative and as we have seen some increases in the cost due to growing and other developments.
Q – Tate Sullivan: 39:24 Okay. Great. And then for the Q1 EBITDA, does it on the same slide, does it include the gross ballast bonus for the Alexandros ship? Or how will your account for that?
Tasos Aslidis: 39:39 It should include the ballast bonus.
Tate Sullivan (Analysts): 39:44 Okay. Great. And then the acquisition of the Molyvos Luck, you announced it a little after January, $21.2 million is all of that cash coming out of your cash flow statement in this current quarter or was there -- maybe you finalized it a bit?
Tasos Aslidis: 40:04 That's correct. We intend to finance about half of the acquisition costs with bank debt, but we'll do it after the acquisition will pay for the vessel with CAGR that we currently have in our balance sheet.
Tate Sullivan: 40:16 Yeah. Thank you. Aristides, I'd love to hear just more, you gave some comments before. I mean, in your career in shipping and increase the rapid increase in the cash on your balance sheet. Have you seen that before? And would you say you continue to evaluate balancing that between acquisitions, if you can still forecast a positive IRR going forward versus repurchases? Can you give an update on, putting missing context in your shipping career, please?
Aristides Pittas: 40:46 Sure. I mean, last time, we saw this significant increases was really back in 2006 and '07 and '08. So that was the last 3 years when we saw a very significant growth in our cash position, and that was the time where we managed to grow the company from 7 vessels at the time to -- about 20 vessels by the end of that cycle. And Again, we are seeing it now. We think that it will give us an opportunity to continue growing the company. which is the primary task, but we have to always do it cautiously and conservatively because we know how shipping is and how things can change when nobody expects them to change. 41:55 We don't expect the change. We cannot foresee what could cause a correction. But you always have to be careful. So we have to maintain a strong balance sheet. Therefore keep enough liquidity and -- in hand and also keep leverage low, but at the same time, be able to grow the company. We did consider also instituting share buyback program in our last board meeting. We didn't -- we decided against it at the end because the share price started to gradually correct. It still is, we think, very low. But it's come off extreme lows that would warrant such a scheme to be implemented. It's still very low our share price, but we decided against it, growth of the company, we think is more important.
Tate Sullivan: 43:14 Thank you. And just a follow-up on that. Going, I mean, through this current cycle with leverage, I mean net debt to EBITDA a little below two times to end the year, and I forecast going at well below 1x with no acquisitions. I mean what debt ratios are you looking at? And what would you like to have through cycles, if you could put that in context, how you're looking at that?
Aristides Pittas: 43:37 In a good market – in the good market, we would want to see that going down to below 30% level because with the correction in the market and the prices dropping, it can easily go to above 50%, as prices drop based on real vessel prices. So we should be always below the 30% based on real prices.
Tate Sullivan: 44:17 Okay. Thank you both for your follow up questions.
Tasos Aslidis: 44:22 Thank you.
Aristides Pittas: 44:23 Thank you.
Operator: 44:24 Thank you. Your next question is from the line of Poe Fratt of NOBLE Capital Markets. Please go ahead. Your line is now open.
Charles Fratt: 44:37 Good morning Aristides. Good morning Tasos. This is Poe Fratt from NOBLE Capital Markets.
Aristides Pittas: 44:44 Good morning.
Tasos Aslidis: 44:43 HI.
Charles Fratt: 44:44 You've done a good job of expanding the fleet and enhancing the fleet of just over the last couple of quarters. Can you talk about how the S&P market looks right now? And sort of what we should expect in activities. And as the , does the potential to sell some of the oldest assets, come into view. Can you just talk about sort of fleet composition in the context of what the current S&P market looks like?
Aristides Pittas: 45:18 Yes. It's difficult to say because it's a very dynamic market Poe, it's something that we evaluate, both during the quarter and of course at our quarterly Board meetings. So it's difficult to say what has happened and what we have seen is we saw the market correct, as you said, as we've seen, as we've witnessed during the last quarter. It was a drop that we expected because seasonally, we do expect a correction in the market. Maybe it's been stronger the correction than what we all expected. We think that we will see a change going forward and the stronger market as we go into Q2, as historically seasonally happens. 46:24 So prices did correct a little bit, and we think we took advantage of that in buying this vessel that we did. We have to see how it develops within Q2 because things go in parallel, obviously. As the market strengthens, we will be making more money, and then we will be having more money available to grow, but prices will be higher. So always, it's a difficult balancing act. If this happens, we are also conscious as you rightly say that a couple of our vessels are over 20 years of age, and we will need to replace them. 47:12 So it's in our mind that we might need to swap maybe 1 or 2 of our elder vessels with a couple younger vessels, that's also greening the fleet a little bit. It's a possible action. But we don't have any particular decisions made yet. So I don't want to say more other than what I told you that we are considering all these options.
Charles Fratt: 47:43 Great. And maybe you could just highlight the activity on the FFA front. What drove you to close out the FFA that you had in place for the first quarter of '22 in the fourth quarter? And then does this mean you don't have any FFAs in place right now? And then...
Aristides Pittas: 48:06 Correct. We have nothing in place right now. We use the FFAs only as a hedge. I mean we never take any FFA position on speculation. We take it only as a hedge. So only to fix against open days that we have on our ships. And that's what we did when we thought that at $30,000 we could fix Q1 for one of our ships. It seemed a good idea. It was a good idea. We did it. Then -- when -- after 2 weeks of time when the markets have dropped that much, we said, well, let's get this nice profit of $750,000, and we closed that position and returned the vessel into the market. So in retrospect, it would have been better to have kept that position because we would have kept the cover on the ship, and it would have made more money. But we were happy at the time with that profit.
Charles Fratt: 49:28 And then Aristides, with the larger fleet, does your view on hedging changed at all, meaning with more open days, do you think that you'll do more hedging in the future? Or do you ...
Aristides Pittas: 49:44 Yes, but the hedging can be done also by fixing on a time charter basis, right? So we will not only be doing it through FFAs. We are also doing it and can do it on fixing time charter. It's exactly the same result. So you see the Good Heart, we fixed that vessel for 1 year's charter at $25,000 a day during the last quarter. That is also hedging our position to an extent. We are not very much hedged. We are only, as you saw 19% covered for 2022, which is not a lot. We still think we want to be quite open. But you can expect that you will see us within Q2, which is traditionally quite a strong month to increase that coverage, either through FFAs or through time charters.
Charles Fratt: 50:53 Understood. And then Tasos, it looks like you're aiming to finance about 50% of the latest acquisition. You typically -- when you line up an acquisition, it seems like you have the terms pretty well if not fixed, at least preliminary terms. Would you be able to share any preliminary terms on the new debt that you might be looking at?
Tasos Aslidis: 51:22 I think we're -- I mean, we don't have fixed terms this time around because we have to buy the vessel outright and finance after the acquisition, as I mentioned. But we expect to see a LIBOR margin to be around between 2% and 2.5%. We're looking to finance about 50% of the vessel.
Charles Fratt: 51:43 And do you think you can get 5-year term? Or sort of what should we be thinking about sort of...
Tasos Aslidis: 51:51 I'm sure we'll get 4 to 5-year term for the loan and the profile up to the age of 16, 17.
Charles Fratt: 52:01 Great. Thanks for your time.
Aristides Pittas: 52:06 Thank you guys.
Tasos Aslidis: 52:07 Thank you.
Operator: 52:01 Thank you. There are no further questions at this time. So may I hand the meeting back to Mr. Aristides Pittas for any closing remarks.
Aristides Pittas: 52:21 Thank you all for being with us for our quarterly call, and we'll be with you during our next quarter to discuss Q1 results. Thank you.
Tasos Aslidis: 52:35 Thanks, everybody.
Operator: 52:39 That concludes the presentation. Thank you for participating. You may disconnect.
