Euroseas Ltd. (ESEA) on Q3 2022 Results - Earnings Call Transcript
Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference Call on the Third Quarter 2022 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. . I must advise you that this conference is being recorded today. And please be reminded that the company announced their results 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, Euroseas will be making forward-looking statements. These statements are within the meaning of the federal securities laws. 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 of the webcast presentation, which has the full forward-looking statement, and the same statement was also included in the press release. Please take them over to go through the whole statement and read it. And now I would like to pass the floor to Mr. Pittas. Please go ahead, sir.
Aristides Pittas: Good morning, ladies and gentlemen. 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 third quarter and 9 months period ended September 30, 2022. Let's turn to Slide 3. For the first quarter of 2022, we reported total net revenues of $46 million and net income attributable to common shareholders of $25.2 million, or $3.50 per share basic and diluted. Adjusted net income attributable to common shareholders was $20.9 million of $2.90 per share basic and diluted. Adjusted EBITDA for the period stood at $26.2 million. As part of the company's common stock dividend plan, our Board of Directors declared a quarterly dividend of $0.50 per share for the first quarter of 2022 which will be payable on or about December 16 to shareholders of record on December 9, 2022. This represents a 9.4% annualized yield on our stock price of last Friday. As of November 14, 2022, we have also repurchased 139,000 of our common stock in the open market for about $3 million, under our share repurchase plan of up to $20 million announced in May 2022. Tasos will go over the financial highlights in more detail later in the presentation. Please turn to Slide 4, where we discuss our recent chartering and operational developments. We had no or chartering updates as our vessels were fully contracted during the quarter. There were also no idle or off-hire periods during the quarter. On the drydockings front, water vessel Hydra underwent repair to 46 days, of which about 6 days occurred in the second quarter and 40 days occurred within the third quarter of 2022. Water vessel EM Kea underwent for scheduled drydock as well for a total period of 51 days, of which 41 days were within the quarter and the rest during the fourth quarter. Water vessel Rena P also underwent the drydock for a period of about 33 days. Finally, water vessel Akinada Bridge and Aegean Express have both been in drydock since October 2022 and November 2022, respectively. While the Akinada Bridge was in drydock, a tail shaft system damage was identified. Hull & Machinery and Loss of Hire underwriters have been notified and the managers are presently working to evaluate necessary repair options. Please turn to Slide 5, where you can see our current fleet profile. Our fleet transition of 18 vessels, including 10 feeders and 8 intermediate containerships, with a cargo capacity of 59,000 TEU at an average age of 17 years, weighted by size in TEU. Turning to Slide 6, we present our vessels under construction. We consist of 9 echo feeder containerships. Six with a carrying capacity of 2,800 TEU each and 3 with a carrying capacity of 1,800 TEU each, expected to be delivered within 2023 and 2024. The 9 feeder containerships will have a capacity of 22,000 TEU. After the delivery of these new buildings, our fleet will consist of 27 vessels with a total carrying capacity of approximately 81,000 TEU. Slide 7 shows our vessel employment schedule. As you can see, fixed rate coverage stands at approximately 99% for the remainder of this year, 78% for 2023 and almost 54% for 2024. Turning on to Slide 9. We review how the 6 to 12-month time charter rates have developed over the last 10 years the end October, the last 10 years. Container charter rates have declined significantly since the beginning of September with lower container trade demand growth in response to the global economic slowdown, changing consumer patterns and the alleviation of transaction issues. Scheduled and newbuilding containership delivery starting from mid-2023 onwards, in combination with further softening and port congestion will likely add further pressure on the container shipping rates more so for the larger containership segments. Nevertheless, rates are still higher than at the end of 2020 and well above the 10-year historical median. Please turn to Slide 10, where we summarize the containership market highlights for the third quarter. As just mentioned, 1-year time charter rates across all segments have generally seen a sharp decline in the last 3 months. Average rates per day during the Q3 were down by 10% to 30% compared to Q2 2022 and have since fallen by more than 70%. The average secondhand price index decreased on average by about 12% in the third quarter of 2022 over the second quarter. While prices dropped at an even lower level in October 2022. The containership secondhand sales activity was a lot quieter in Q3 2022 as major macroeconomic uncertainties and weaker demand trends diminished any appetite for new investors. On the contrary, newbuilding price index increased by about 0.3% in the third quarter over the second quarter of 2022, Newbuilding prices remaining firm despite the growing negative market sentiment. The containership fleet has grown by approximately 3.4% year-to-date without accounting for idle vessels reactivation or further idling. The idle containership fleet as of October 24 stood at about 1.8% of the fleet and has been increasing gradually since last year. No containerships have been sold for scrap so far this year and now they are expected to be recycled by the end of the year as a result of strong containership markets thus far. However, it is projected to pick up from 2023, potentially as markets cool further, all the tonnage is replaced with more modern ships and increasing environmental regulations start coming into effect. Scrap prices softened to around $600 per lightweight ton in the third quarter. They still remain about 40% above the 2019 average as a result of currency depreciations and softening of steel markets. Please turn to Slide 11. The global GDP growth is forecast to slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023, according to the IMF. This is the weakest growth profile in the last 15 years apart from the global financial crisis and the critical phase of the COVID-19 pandemic. Russia's invasion of Ukraine, China's zero-COVID policy, soaring energy prices and global inflation, all weigh down heavily on the drydock counting. China's growth is projected to slow to 3.2% in 2022, significantly lower than the prepandemic years, marking one of the worst performances in almost half a century. In 2023 in, the IMF expects a -- sorry, I mean, standard strengthening to 4.4%. GDP growth from the United States was revised downwards to 1.6% for 2022 from 2.3% in previous projections and is now projected to inch down further to just 1% in 2023. On the other hand, European growth projections have increased to 3.1% from previously 2.6% in 2022. But the risks remain in the downside and in 2023, GDP growth is expected to be just 0.5%. Growth in emerging markets is forecast to be slow in 2022, while the only country with a better forecast seems to be Brazil with an anticipated growth of 2.8% from 1.7% previously forecasted due to the robust recovery in Latin America. For 2023, all other developing countries are expected to do a little bit worse than in 2022, except Russia, which should improve relatively to 2022, but still face a negative growth of 2.3%. Looking at the containerized trade, according to Clarksons' latest research, containerized trade is now expected to be negative 1.6% in 2022. For 2023, containerized trade is expected to grow by only 1.7%. Of course, trade and growth projections are being continuously revised as the effects of geopolitical tensions between Russia and Ukraine on world growth and trade are being continuously assessed. Please turn to Slide 12. The containership fleet is relatively young with most vessels under 15 years old and only 10% of the fleet over 20 years old. The right side of the slide shows delivery schedule of the current containership order book, which is expressed as a percentage of the fleet. The certain figures for 2022 to 2025 reflects the anticipated fleet growth before any scrapping slippages. Clarksons expects new deliveries of about 4.5% of the current fleet to be delivered in 2022, 9.5% in 2023 and 9.8% in 2024. Currently, the total containership order book stands at close to 29% of the fleet and the majority deliveries are a scheduled for the second half of 2023 onwards. Please turn to Slide 13, where you can see the fleet age profile and order book for ships for 1,000 to 3,000 TEU, which form the backbone of our operations and the size range where we have focused on newbuilding program. As you can see, the breakdown of this segment and the prospective of the book seem significantly better than the broader picture. The order book currently stands at 14.3%, half that of the whole fleet, and the number of vessels over 20 years at 20% is double that of the whole fleet. Thus, we are very optimistic that we will be able to employ the 7 eco newbuilds that will deliver from Q4 2023 to Q4 2024 at very satisfactory levels. I remind you that the first 2 vessels of our newbuilding program that will be delivered in the first half of 2023 have already been chartered for 3 years at very lucrative rates. Please turn to Slide 14, where we discuss our outlook summary for the containership markets. Political and economic uncertainties are affecting the prospects of containers shipping, with freight rates plunging over the past quarter, as already said. Decline in spot freight rates are to be mirrored in time-charter rates with benchmark rates falling by about 70% in the last month. While charter rates have also fallen due to the easing in supply chain disruptions that were built up over the pandemic, a lot of the slowdown in container investment demand has been due the weaker cargo movement. Container shipping market is facing volume headwinds amid an increasingly pessimistic economic outlook primarily due to the Russia-Ukraine conflict, inflationary pressures on consumers and a shift back towards services spending. Consequently, we expect the market softening trend to continue in the near term. The higher order book set to hit the water in the next 24 to 36 months is expected to exert a big pressure on the supply of ships and consequently time charter rates. Mitigating this pressure, the new environmental regulations will probably result in even slower steaming by 2023 and 2024, effectively, removing excess capacity from the market. This could slow the declining rates or even reverse it, if there is a stabilization in the global economy as well. Let's move to Slide 15. The left side of the slide shows the evolution of 1-year time charter rates for containers with a capacity of 2,500 TEU since 2010. The decline in rate is evident with 1 year daily time charter rates for these containers is currently standing at $19,200 per day according to Clarksons. The right-hand side of the slide shows the historical price range for the newbuilding and 10-year-old containerships with a capacity of 2,500 TEU. As you can see, there has been a sharp decline in secondhand vessel prices which have been rising steadily in the last 2 years 2022. In the meantime, newbuilding prices remain elevated despite a small drop in the last month. Mainly then the explosion of charter rates from late 2020 to August 2022 have allowed us to charter all our vessels at very profitable rates for periods extending up to 3 or more years, raising a backlog of contracted revenues in excess of $450 million. On the strength of this extremely successful period, we embarked onto our transformative new building program and ordered these 9 modern ecologically friendly feeder vessels, 2 of which we have already contracted as a forset for a minimum period of 3 years at highly profitable rates. We intend to gradually transition into one of the most environmentally friendly feeder operators. Our balance sheet has strengthened considerably as has our liquidity, which will continue to grow strongly during 2023 and 2024 as well despite our newbuilding program based on our secured charter covenants. In view of this, we continue to evaluate investment opportunities that may arise as market conditions change that with a focus on potential acquisitions that will not require above average charter rates to be profitable. Further, we are also returning cash to our shareholders through our established steady dividend and by executing on our buyback program. And with that, I will now pass the floor to our CFO, Tasos Aslidis to go over our financial highlights in further detail.
Anastasios Aslidis: Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. As usual, I will now take you through the next 4 slides of our presentation to give you an overview of our financial highlights for the third quarter and 9 months period ended September 30, 2022, and compare them to the same period of last year. For that, let's turn to Slide 17. In the third quarter of 2022, the company reported total net revenues of $46 million, representing an almost 100% increase of our total net revenues of $23 million during the third quarter of 2021, which was mainly the result of the higher average charter rates our vessels earned in the third quarter of this year, compared to last and the fact that we operated -- or we've operated 4 more vessels. The company reported a net income attributable to common shareholders for the third quarter of $25.2 million as compared a net income and a net income attributable to common shareholders of $8.5 million for the third quarter of last year, an increase of almost 200%. Interest and other financing costs for the first quarter -- for third quarter of 2022 amounted to $1.3 million, compared to $0.6 million for the same period of last year. This increase is due to the increased amount of debt we had, over twice as much over the same period of last year, an increase in the weighted average LIBOR rate in the current period compared to the same period in the third quarter of 2021. It is noteworthy that for the 3 months ended September 30, 2020, the company recognized an unrealized gain of $1.8 million on its interest rate swap contracts. For the 3 months ended September 30, 2021, last year, the company recognized a small gain on the same contracts. Adjusted EBITDA for the third quarter of 2022 was $26.2 million compared to $ 10.6 million achieved during the third quarter of 2021, an increase of almost 150%. Basic and diluted earnings per share attributable to common shareholders for the third quarter of this year were at $3.5 calculated on about 7.2 million weighted average number of shares outstanding, compared to basic diluted earnings per share of $1.18 and $1.17, respectively, for the third quarter of 2021, calculated again on about $7.2 million weighted average number of shares outstanding. Excluding the effect on the income attributable to common stockholders for the quarter of the unrealized gain in derivatives, the amortization of fair value of below market time charter supply and the vessel depreciation and the portion the consideration of vessel supply with attached charters allocated to below market charters, the adjusted earnings attributable to common shareholders for the quarter ended September 30, 2022, which has been $2.90 per share, basic diluted compared to adjusted earnings of $1.16 per share, basic diluted for the quarter, the same period of 2021, a quarter during which we excluded the unrealized gain on derivatives. Usually, security analysts do not include the above items in their publish estimates of earnings per share, that's why we make the adjustments ourselves. Let us now look at the numbers for the corresponding 9-month period ended September 30, 2022 and 2021. For the first 9 months of this year, the company reported total net revenues of $139.8 million representing a 150% increase of the total net revenues of $55.6 million during the first 9 months of 2021, again the result of higher average earnings, our vessels earned and a higher number of vessels owned and operated during the period compared to last year. The company reported a net income and net income attributable to common shareholders for the period of $85.9 million as compared to a net income of $20.2 million and a net income attributable to common shareholders of $19.6 million for the same period, the first 9 months of 2021, an increase of more than 300%. Interest and other financing costs for the first 9 months of 2022 amounted to $3.5 million compared to $2 million for the same period of last year. Again, this increase is due to the increased amount of debt and the higher LIBOR rates of our bank loans that we pay in the current period as compared to the previous one. Again, it is noteworthy that for the first 9 months of this year, the company recognized an unrealized gain of $4.1 million on its interest rate swap contracts, compared to a $0.4 million gain that we recognized over the same period of last year. Adjusted EBITDA for the first 9 months of 2022 was $91.5 million, compared to $26.6 million for the first 9 months of 2021, representing a 244% increase. Basic and diluted earnings per share attributable to common shareholders for the first 9 months of this year were $11.91 and $11.96, respectively, calculated on about 7.2 million weighted average number of shares outstanding, compared to basic and diluted earnings per share of $2.84 and $2.82 for the first 9 months of 2021. Again, excluding the effect on the income attributable to common shareholders for the first 9 months of this year, of the unrealized gain on derivatives, the amortization of fair value of below market charters acquired and the vessel depreciation on the portion of the consideration of vessels acquired with attached below-market charters, the adjusted earnings per share attributable to common shareholders for the first 9 months of this year, which has been $10.71 basic and $10.67 diluted compared to adjusted earnings per share of $2.76 basic and $2.74 diluted for the same period of last year. Let's now move to Slide 18 to review our fleet performance. As usual, we will start our review by looking first at our fleet utilization rates for the third quarter of 2022 and 2021. As usual and as always, our utilization rate is broken down to commercial and operational. During the third quarter of 2022, our commercial utilization rate was 100%, and our operational utilization rate was 99.5%, compared to 100% commercial and 98.8% operational for the third quarter of 2021. On average, 18 vessels were owned and operated during the third quarter of this year, earning an average time charter equivalent rate of $30,893 per day, compared to 14 vessels that we owned and operated during the third quarter of 2021, earning on average $19,482 per vessel per day. Our total operation expenses, including management fees and G&A expenses, but excluding drydocking costs, averaged $7,180 per vessel per day during the third quarter of this year, compared to $7,321 per vessel per day for the third quarter of 2021. If we move further down in this table, we can see the cash flow breakeven rate for the third quarter of 2022, which in addition to the operating cost mentioned above, takes into account interest expenses, drydocking expenses and loan repayments that excludes the loan repayments scheduled. Thus, during the third quarter of 2022, our day cash flow breakeven rate was $14,364 per vessel per day, compared to $11,831 per vessel per day for the same period of last year. Next, let's go over to the right part of this table and review our utilization rate on the remaining and the same figures for the 9-month period of the 2 years. During the first 9 months of 2022, our commercial utilization rate was 99.9% and our operational utilization rate 99.6%, compared to 100% commercial and 98.5% operational for the same period of last year. On average 16.8 vessels were owned and operated during the first 9 months of 2022 and an average time charter equivalent rate of $32,814 per day compared to 14 vessels earning $15,478 per day for the first 9 months of 2021. If we begin at the bottom of the table, we can see a breakeven rate, a customer breakeven rate for the 9-month period of 2022 being $14,018 per vessel per day compared to $10,377 per vessel per day for the same period of 2021, as you can see, drydocking expenses and loan repayments making up most of the difference. Let's now go to Slide 19 to review our debt profile and our forward cash breakeven level. On the top of the slide, you can see our strategy current debt repayments over the next several years. Our loan repayment staging for this year stands at about $28 million that is including, of course, the $20.7 million of repayments we made in the first 9 months that what accounts for the $1.9 million of our Balloon payment that we made earlier this year. With our -- with the debt payments of our current debt going down over the next couple of years. With Balloon payments -- we had a number of Balloon payments in 2022, which we expect to be able to refinance and which is to be . It is not that our debt profile does not include any debt that we expect to assume to finalize our rebuilding program. Let's have a quick look to the right part of the slide and to take a note about the cost of our debt. The average margin of our current debt is about 2.85% and assuming the LIBOR rate of around 4.5% means that the cost of our senior debt would be on average about 7.4% as of the end of September. However, we will account for our interest rate swaps and a portion of our debt. Our total average cost of debt as of September 30 drops down to about 5.9%. Looking now at the bottom of the table, you can see our cash flow breakeven level projected for the next 12 months which, as you can see, we expect to be just a bit above $14,000 per day -- per vessel per day, of which about $4,300 are contributed from our loan repayments. In concluding the presentation of our financial highlights, let's move to Slide 20. There is the -- our balance sheet. As of September 30, 2022, our assets include costs and other current assets amounting to about $41.1 million, advances that we paid for our newbuildings, standing at about $50.5 million. And of course, the book value of our vessels at around $230 million, resulting in a total book value for our assets of about $321.7 million. On the liability side, our debt as of September 30, 2022 stood at $115.7 million, representing about 36% of the book value for our assets. To report also on the liability side, the value of our recently acquired below-market charters, which was estimated taking into consideration the recent vessel acquisitions in the fair value of $38.8 million by about 12.1% of our assets. And with our other liabilities that amount to about $13.9 million or 4.3% of our total book value for our assets. However, the market value of our fleet is much higher than its book value. Based on our own experience, and using charter adjusted values for our fleet and newbuilding contracts, the estimated growth of our investments is approximately $432.6 million as of the end of September, which translates to a net asset value for our company of about $395 million or about $55 per share. Recently, our sales have been trading around $20 per share, thus representing a significant discount to our net asset value and the good appreciation potential for our shareholders and investors based on the above measure. But it is not . I would like to make a semi calculation that highlights certain financial aspects of and the strength of our balance and charter book. Between 1, 2022, and the end of 2024 when our newbuilding program concludes which has about 11,550 contractor days at an average rate of about $33,000 per day. There are also about 4,500 or so open days. If we demand the latter by taking into account all other costs, we are softer over the next 2 years and quarter about $20 per share. And on the top of that, learn something. Even if they just turn $10,000 per day, 1/3 of what our contracted base are that would add another $6 per share. This earnings suffice to fund the remaining equity portion of the newbuilding program. Then at the end of 2024, only the swap price of the existing second fleet of ours plus any remaining of its present debt, we got another $10 to $15 per share towards the value of the company, which we've not accounted yet for the payments we have already made for the $15 million or so I mentioned earlier, and the $32.5 million of cost . With the above quick alteration, I wanted to highlight the strength of our belief in the value of Euroseas. And with that, I would like to close my part of the presentation and turn the floor back to Aristides to continue the discussion.
Aristides Pittas: Thank you, Tasos. I want to open up the floor for any questions we may have.
Operator: . And our first question comes from the line of Tate Sullivan with Maxim Group.
Tate Sullivan: Can you first touch on the considerations of the repairs on the Akinada Bridge in terms of the remaining useful life of the vessel and how much the repairs may cost? And ultimately, what would make you decide to scrap the ship instead of repairing the ship, please?
Aristides Pittas: Yes. This is something I cannot really answer at this stage because we are still evaluating the situation. Of course, we believe that the cost of repairs will be covered by our insurance. So there isn't going to be a significant repair cost, but we need to see how much time this whole project would take before being able to make a final evaluation.
Tate Sullivan: Okay. And then regarding the newbuild market for containerships and understanding it's bifurcated between the larger ships and the size of your ships, is -- has there been any reports of any newbuild delivery delays at all? I know it's usually quite reliable. But in this current environment, do you expect to take your ships mostly on time from your shipyards?
Aristides Pittas: Yes, I would say. I do believe that we will take our ships mostly on time, building on one -- within the shipping, one of the most reputable shipyards in the world, which is known to be on time and not face delays. So I would not think that we will see delays, definitely not any significant delays.
Tate Sullivan: And last from me is, are there any risks with what we've seen the rates do and with the newbuilds under construction, not your, but across the industry. Have any operators considered selling ships under construction in this market or not at this point yet? Or could that be an opportunity going forward?
Aristides Pittas: We are not aware yet of somebody willing to go ahead and sell the ships at this point in time, especially at prices which are lower than the current newbuilding prices. So there is a lot of resistance on newbuild prices dropping, anyway they were never exhorted to be high as well the value of secondhand ships.
Operator: Our next question comes from the line of James Jang with Univest Securities.
James Jang: So the Akinada Bridge, yes, so the damages and everything, but I guess it would be fairly soon, we shouldn't look at any earnings from the vessel until, what, maybe -- if you don't scrap, that's all, I guess, until the second half of next year. Would that be fair to say?
Aristides Pittas: I think that's fair to say.
James Jang: Okay. And then going on to the vessels going off charter, you've got Joanna, the Keelung, Hydra, Kea and Antwerp. They're going to be coming off charters through '23. When do you start discussions with rechartering or extending charters? And if you could kind of let us know because it looks soft next year for rates with the new builds coming in and with the revised down forecast for economic growth. I mean would you be -- would you -- would it be fair to say that you would take below market charters at this point in time to protect some downside risk? Or would you be willing to go through '23 and then try to recharter them when the vessels are redelivered.
Aristides Pittas: Yes. I think that the reluctance at this stage to do something with vessels that are not from the charter as those wants to take on ships today that are coming open in 3- or 6-months' time. And similarly, the owners don't want to fix at rates that seem to be so much softer than they were. So the only fixes that you're seeing done are the very few vessels that are opening up that are currently being fixed.
James Jang: Okay. So what about the Joanna? Have you had any discussions with the current charter to extend even a few months? Or is that still up for discussion?
Aristides Pittas: We have not had any serious discussion yet. But we've agreed that we will be discussing within the next month or so. Because this ship indeed, it does come open. It's the first ship to come open and that we will be discussing, I presume within this next month.
James Jang: Okay. Excellent. And I guess my final question here is with what's let's say, 23 is really bad for rates. How does that affect the dividend? Would you be able to support the $0.50 as we -- '24 should be a better year. Like would you keep the $0.50 in '23 or in variable parts?
Aristides Pittas: Yes. I can tell you about the current thinking because, obviously, every quarter, we reevaluate, and we keep that privilege to decide what the dividend will be every quarter. But the way we have thought about it is that the dividend is sustainable and will continue within the next few quarters at least. I remind you that $0.50 that we are currently paying is just 15% of the net income that we are currently making. So we do expect that throughout 2023, we will easily be able to be paying a dividend, but I won't promise it, but I believe that, that will be the case.
James Jang: Okay. Excellent. Well, actually, just one final question here. I know that the market is soft and everything is doom and gloom right now, but how is the S&P market? Has it just gone quiet? Or is there still some activity?
Aristides Pittas: No, there's very, very little activity on the S&P market. Very little activity. Very few ships are coming open. Only a handful of buyers are in the market. People have secured longer term time charters for their vessels and they're not willing to sell at discounted prices. So we are really at a wait-and-see situation and only what is necessary is being done in today's markets.
Operator: And our next question comes from the line of Paul Fratt with Alias Global Partners.
Charles Fratt: Tasos, you went through the newbuild advances right now are $50 million. You have potentially financing of $200 million to $220 million. What are you assuming on your financing leverage levels? And then can you walk us through your remaining CapEx for the newbuilds in 2023, '24 and '25, just sort of an overall ballpark number for each year on your newbuild costs?
Anastasios Aslidis: We have -- our newbuilding program will cost about $260 million, of that amount $50 million we have already paid . We expect to fund it at about 60%. So that's why I said here on Slide 19, about $200 million to $220 million of debt coverage, about 60%. And we are to make -- we have to make about $200 million of equity payments between now and the end of 2024, which is when we expect our newbuilding program to end. And like we said and for the detailed scheduled of payments, but I would guess that we have to make about 40% payments of the remaining payments in 2022 and the remaining 60% in 2024. So more deliveries in 2024. So that would be my answer to that. I can get you, of course, a more capital capital expense to be.
Charles Fratt: Okay. Great. And then you talked about the current market. You talked about some of the rollovers potentially for the charters that are ending. Can you -- you've already got 2 of the 9 newbuilds. Are you in any discussions for locking in additional new builds? Or is it sort of the same thing that's going on in the market right now? Limited interest in making long-term commitments, and we'll have to wait to see the next newbuilds contracted.
Aristides Pittas: We are always monitoring the market, Poe. The truth is that right now with the current uncertainty I would think that we would probably not be moving within this side of the year for something new -- but we are constantly following the market and if there is something to discuss, we will obviously let you know.
Charles Fratt: And the next delivery is in Q4 of 2023. So is the route.
Operator: And we have reached the end of the question-and-answer session. I will now turn the call back over to Aristides Pittas for closing remarks.
Aristides Pittas: Thank you, everybody, for being with us today on our conference call, and we'll be back with you at the beginning of next year to discuss how the year closed. Thank you very much.
Anastasios Aslidis: Thank you, everybody.
Operator: This concludes it. You may disconnect your lines at this time. Thank you for your participation.
