Star Bulk Carriers Corp. (SBLK) on Q2 2021 Results - Earnings Call Transcript
Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Second Quarter 2021 Financial Results. We have with us Mr. Petros Pappas, Chief Executive Officer; Mr. Hamish Norton, President; Mr. Nicos Rescos, Chief Operating Officer; Mr. Simos Spyrou and Mr. Christos Begleris, co-Chief financial Officers of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. I must advise you that this conference is being recorded today. We now pass the floor to one of your speakers today, Mr. Christos Begleris. Please go ahead, Sir.
Christos Begleris: Thank you, operator. I’m Christos Begleris, co-CFO of Star Bulk. And I would like to welcome you to our conference call regarding our financial results for the second quarter of 2021. Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement. On Slide 02 of our presentation. In today’s presentation, we will go through our second quarter results, our cash evolution during the quarter and operational update and the latest industry fundamentals before opening up for questions. Let us now turn to Slide 03 of the presentation for a summary of our second quarter 2021 financial highlights. In the three months ending June 30th, 2021, TCE revenues amounted to $254.9 million compared to $97.1 million for the same period in 2020. Adjusted EBITDA for the second quarter 2021 was at $182.5 million versus $35.2 million in the second quarter 2020. Net income for the second quarter amounted to $124.2 million or $1.22 earnings per share versus $44.1 million net loss or $0.46 loss per share in the second quarter of 2020. Our TCE rate during this quarter was at $22,927 per vessel per day. Total cash today stands at $280.3 million with total debt at approximately $1.62 billion. In addition, we have the ability to use a $30 million revolving facility which is currently undrawn. During the second quarter of 2021, we took delivery of one Ultramax, and the two remaining Kamsarmax resales reaching a total of 128 vessels on the water. As of June 30th, 2021, we owned a 128 vessels and our total cash balance pro forma for the financing proceeds for the two resale Kamsarmax was at $282.8 million, resulting in a declared dividend per share of $0.70 payable on or about 08. In Slide 04, we show a significant annual interest cost savings of the company due to our refinancing efforts. Total existing facilities refinance or committed to the refinance amount to $333.7 million with new secured senior facilities of $391.7 million. Using the excess proceeds, our baby bond of $50 million was redeemed. The average margin for the increasing facilities to refinance is at 2.9% while the average margin for the new secured facilities is at 2.1%. Finally, the interest rate cost saving for Star Bulk is at $5.5 million, out of which $4.1 million are the interest cost savings attributed to the redemption of our baby bond and $1.4 million are due to the refinancing's of our senior secured facilities. Slide 05, graphically illustrates the changes in the company's cash balance during the second quarter. We started the quarter with $206.6 million in cash, generating positive cash flow from operating activities of $140.5 million due to the strong freight markets after including debt proceeds and repayments; vessel acquisitions; CapEx payments for scrubber; and ballast water treatment system instalments; as well as the dividend payment declared in the first quarter. We arrived at the cash balance of $242.8 million at the end of the second quarter. Please turn to Slide 06, where we summarize the evolution of net debt. Since the beginning of the year, we have been able to reduce our net debt by more than $228 million due to strong cash flow from operations. On Slide 07, we demonstrate the inherent operating leverage of the company to arriving freight markets and the potential increasing EBITDA with any freight or fuel spread increases. For example, we -- 46,500 fleet available days per year and additional daily fleet wide increase in TCE by 2,000 per day, we increased our EBITDA by $93 million. Similarly, assuming a total annual bunker consumption of 800,000 tons, an increase in the high five fuel spread by $25 per ton will generate an additional EBITDA of $20 million. I will now pass the floor to our COO, Nicos Rescos for an update on our operational performance.
Nicos Rescos: Thank you, Christos. Please turn to Slide 08 where we provide an operational update. OpEx excluding non-recurring expenses were a $4,280 for the first half of 2021. Net cost G&A expenses were at $1,087 per vessel per day for first half of 2021. Despite continued adverse COVID related restrictions which have a direct impact on OpEx. The combination of our in-house management and the scale of the group enable us to maintain very competitive costs with Star Bulk continues to remain at number one amongst our listed peers in terms of Rightship ratings. Since January 2020, Star Bulk maintains a 99.6% scrubber system availability across 120 vessels in 60,000 operating days and more than 1.2 million tons of HSFO consumed. The company has made significant progress in analyzing carbon emissions across its fleet in view of IMO 2023 decarbonization roadmap. We believe that our vessel emission profile will remain competitive within the upcoming carbon intensity index framework, which is expected to be adopted by the IMO in 2023. F Aiming to establish or require the version on measures ahead of the regulation effective date, we are estimating progress planning analysis, speaking part-to-part optimization practices, which will be adopted across our fleet as of January 2022. On the CapEx front, we're examining the long-term impact of various energy saving devices and applications and maintaining a competitive carbon intensity rating across our fleet well beyond 2023. We are actively engaged with various R&D workshops and consortium in collaboration with other stakeholders, including engine makers, classification society and pure technology innovators and carbon credit advisors in pursuit of technically and commercially viable solutions in reducing meaningfully our vessels carbon emissions footprint. Turning to Slide 99, we provide some guidance around the use of dry dock and ballast water treatment system expense for the next 12 months and the relevant total of five days. The numbers are based on current estimates around dry dock and retrofit planning, vessel employment and yard capacity. These figures incorporate our current understanding of present and future shipyards congestion. Since the beginning of the year, 33 vessels have entered dry dock and 13 have been retrofitted with ballast water treatment systems with the majority of our larger vessels scheduled for the year having completed their dry docks at the first quarter. Our expected dry dock expense for the next 12 months is estimated at $27.8 million, for the dry docking of 30 vessels with another $25.8 million of water ballast system CapEx. We expect to have 72% of our total fleet ballast water treatment by end of 2021 and 97% by end of 2022. In total, we expect to have approximately 825 offhire days for the forward 12 months period. I will now pass the floor to our CEO Petros Pappas for a market update and his closing remarks.
Petros Pappas: Thank you Nicos. Please turn to Slide 10 for a brief update of supply. During the first half of 2021, a total of 21.5 million deadweight was delivered and 4.4 million deadweight was sent to the Malaysian for a net fleet growth of 17.1 million deadweight or 3.1% year-on-year and 1.7% since the beginning of the year. The order book decreased to a record low 5.7% of the fleet with 11.1 million deadweight reported by Clarksons as firm orders between January and June. Since then, it rebounded to 23.6 million deadweight including some options that have been declared and last the order book increased to slightly above 6%. Upcoming environmental regulations and uncertainty on future propulsion has helped keep new orders under relative control with shipyard capacity is quickly filling up with container ships and other orders. Furthermore, the surge of global steel and iron ore prices has increased new building prices and boost scrap prices to new record price possibly aiding demolition and also discouraging new dry bulk orders. Average steaming speeds of the dry bulk fleet currently stand at 11.7 knots and despite the higher freight rate environment have only increased by 1% year-on-year partly due to higher bunker costs. As the global economy and oil products consumption recovers, we expect bunker prices experience upward pressures that will support higher freight rates and scrubber savings. While congestion has increased to the highest level of the last decade, when things related to COVID-19 and increased political tensions in China towards Australia and India have created strong inefficiencies for trade that have helped tighten the supply demand balance. Summarizing supply, net fleet growth is expected at 3% by the end of 2021 and should remain below 2% per annum during 2022 and 2023. Let’s now turn to Slide 11 for a brief update on demand. According to Clarksons, total dry bulk trade during 2021 is projected to expand by 4% in tons and 4.3% in ton miles. Dry bulk volumes are experiencing a strong recovery supported by synchronized global economic stimulus that focuses on the construction sector. Commodity prices raised historical high levels that should incentivize a strong expansion in production and trade during the next years. Furthermore, new Atlantic export projects increases in Pacific grain demand, are expected to inflate ton miles in vessel requirements over the next years. In the first half of 2021, dry bulk trade grew by more than 7.5% year-on-year by more than 5% compared to 2019 levels, as all cargo volumes increased rapidly especially grains and minor bulks. Iron ore ton miles are expected to expand by 3.6% during 2021. Chinese steel production expanded by 11.5% during the first half of the year to record high levels, while the steel makers from the rest of the world increased production by 15.6% and are still unable to meet regional demand. As a result, steel prices in the Atlantic are trading at a significant premium to the Pacific and the right price arbitrage has incentivized Pacific steel exports with smaller vessels benefiting the most during the last months. Brazil iron ore exports are slowly recovering from a 2019 disaster and during the first half of the year, increased by 15.3%. Vale reiterated their target of 400 million to 450 million tons of production capacity by the end of 2022. Coal ton miles are expected to expand by 5.3% during 2021 as global energy consumption experiences a strong recovery. During the first half of 2021, China and India thermal electricity output has been expanding at a higher pace than domestic production and has created shortages that have pushed stocks lower in prices to record highs. A Chinese ban on Australia coal has forced power retail business steelmakers to diversify and seek cold cargoes from longer distance sources such as South Africa, Colombia, the U.S. and Canada but also increased Indonesian imports that experienced long delays due to quarantines. In India, coal consumption experienced a slowdown during the second quarter due to the resurgence of COVID and the lockdown imposed by the government. However, during the last month, electricity production has rebounded and Indian buyers have returned to the market with increased import mix to replenish their stocks. Grain ton miles are expected to expand by 4.3% during 2021 after 11.3% increase during 2020. China's demand for grains is projected to remain strong in the medium-term as the current five-year plan focuses on food security. At the same time, the hog herd is fully recovered and stands 20% above the levels before the 2018 African swine fever outbreak. U.S. soybean and corn exports both experienced record high seasons while sales for the next marketing year stand with record levels for this time of the year. The Brazil soybean export season started with delay due to heavy rains at harvest areas but bit higher than last year and helped create a shortage of vessels in the Atlantic. Minor bulk ton miles are expected to expand by 4.3% during 2021. Minor bulk trade has the strongest positive correlation to global GDP growth and smaller gear vessels will continue to benefit significantly from the synchronized consumption recovery and restocking cycle during the rest of 2021 and 2022. Having said that, Capesizes are in the medium-term expected to benefit from cascading and strong import ton miles from Atlantic export cargoes such as West Africa bauxite. Finally, our outlook for the market remains positive. The record level order book combined with a lack of yard space, uncertainty on future vessel propulsion, and COVID related deficiencies inefficiencies, create a very favorable supply side picture for our industry. Increased government spending due to a synchronized pandemic stimulus programs has led to strong commodity demand globally with robust volumes of iron ore, gold, grains and minor bulks being transported, a trend which we expect will continue supporting our optimistic view on the future prospects of the dry bulk market. Without taking any more of your time, I will now pass the floor over to the operator to answer any questions you may have.
Operator: Thank you very much, Sir. Our first question for today is from Omar Nokta from Clarksons. Please go ahead.
Omar Nokta: Hi there, thank you. Hi guys, good afternoon.
Christos Begleris: Hi, Omar.
Petros Pappas: Hi, Omar.
Omar Nokta: Hi. I just wanted to check in on the cash thresholds for the dividend. Obviously a nice dividend this quarter. But I and I know I asked this on the last call but just wanted to see if you had any more updated thoughts. I know starting in the fourth quarter, the minimum cash you want to keep goes up to $2.1 million per vessel. So, across all of your 128 ships, that gets you to $256 million and then everything above that gets paid out. But given the strong market rising asset values, obviously you're lower leverage and you really have no committed CapEx from here. Any thoughts on lowering the required cash position?
Hamish Norton: I think Omar, in the far future we might review that but I think for the with the near and medium-term, you got to count on that $2.1 million per vessel being our rainy day fund. Yes, hopefully there won't be any rainy days but you never know and just loved it. As said, essentially lowers. This gives us further support to lower the -- those thresholds. Yes -- but in not in the near or medium-term.
Omar Nokta: Okay. That's fair, I appreciate that. And then maybe just a follow-up. You've now got your full suite in hand a 128 ships, you've got a large footprint across all the different asset classes. And how are you guys doing things today, are you still on the hunt for acquisitions and obviously using your equity when possible or do you take a step back with that, so prices have been risen so much. Kind of any color there?
Hamish Norton: Well look, we're still looking to grow and at such time as we can use our equity to make acquisitions of ships that increase earnings per share, that increase net asset value per share, that increase the dividend per share, that reduce the net leverage of the company and probably also reduce the fleet age for the company. We're going to do that as much as we can because that's what is the best thing for the shareholders. And in a situation where we're trading well, we should be able to do that.
Omar Nokta: Okay. Got it Hamish, and just to be clear to that: an acquisition that reduces your net leverage. So in effect, basically buying vessels for as much cash as possible a splash lower than your current LTV will be?
Hamish Norton: Yes, probably buying the vessels without debt but if our -- if we're trading well enough, we can nevertheless increase earnings per share, dividends per share, net asset value per share, and probably also reduce the average age of the fleet. So, it's going to be a quadruple or quintuple win.
Omar Nokta: Yes. And I'd better jump on, on to line.
Hamish Norton: Okay.
Omar Nokta: Yes Hamish, thanks for the color there.
Operator: Our next question is from Ben Nolan from Stifel. Please go ahead.
Ben Nolan: Yea, thanks. I was going to ask, maybe was sort of following on Omar's question there a little bit, not really about the dividend but you guys announced an ATM program. Most of the time when you've been doing these asset transactions, it's been shared through ships but can you maybe just -- well, talk me through a little bit like when and why you would be active under that ATM program? I know that it's in the release, that you haven't done anything with it yet but just sort of maybe a little color around the rationale and how you would think about deploying it?
Hamish Norton: I mean, it's basically what I told Omar. Basically, what we want to do is use the shares at the appropriate time to buy ships in such a way that it increases our earnings per share; our net asset value per share; our dividend per share; reduces our net leverage; and reduces our average fleet age. And we think we can do that pretty straightforwardly in a market that is a little bit more friendly to dry bulks in the market we see this morning but we think it's going to be actually quite easy to do that in the right market.
Ben Nolan: Okay. So, I guess maybe the question is would you do it preemptively, right. You say okay well we think we can buy something in the future that will be a accretive to all of those other things that you talked about, so we'll go ahead and be proactive or --.
Hamish Norton: We're going to do some. We're going to do the thing that is the best thing for the shareholders, basically we want to basically add as much value to the share as possible. But I wouldn't expect that we would do something on the one hand without having an opportunity on the other hand. I think we'll be pretty synchronized.
Ben Nolan: Okay, perfect.
Christos Begleris: And Ben, this is Christos, just to clarify. The levels that we are currently trading, we will not use the ATM. Yes, that's yes, I should have said that. We have no intention of using the ATM under current conditions.
Ben Nolan: Okay, very helpful. And then, with respect to sort of the market, if some of the categories were a little bit low like for instance the Supramax, Ultramax categories and even Panamax categories were a little bit lower than what we've seen in the market. And I think that you'd said Petros that in the last quarter that you'd sort of in the first part of the year, put some of those on shorter term contracts which I would assume kept the rates a little bit below where the spot market was. Any update on sort of your coverage into the back half; in the third quarter; fourth quarter; maybe even in the next year a little bit. Are there any sort of lingering effects of some of that coverage?
Petros Pappas: Ben, actually we had covered 50%. We had covered 50% of our Supra fleet towards the end of last year, beginning of this year, at relatively low levels, and that's why you saw this effect and above 25% of our Panamax fleet. As we stand now for Q3, we only have another six Supra's and four Panamax still at relatively low levels when I'm saying that I mean below 20,000 and that's it and nothing for Q4 onwards.
Ben Nolan: Okay, perfect. And then just sort of maybe to follow-on there and I'll be done. Are you currently looking to take cover with the existing fleet and current rates are still sort of riding the spot market?
Christos Begleris: We have as we've already said, covers about 65% of the fleet for Q3 at levels above of about 28,500. We have almost no cover for Q4 onwards where we very much believe in the market in the next few months, actually in the next few years to be honest. So, right now we are not intending to hedge but during Q4 depending on how things go and if the market is really strong, we might consider as part of our fleet to be hedged for the first half of next year. But that has not been decided yet, it will depend on how the market goes.
Ben Nolan: Perfect, alright, I appreciate it. And thanks, for all the color.
Christos Begleris: Thank you, Ben.
Operator: Thank you. Our next question is from Randy Giveans from Jefferies. Please go ahead.
Randy Giveans: Hi, rejoined on the call.
Petros Pappas: Hi.
Christos Begleris: Hi, Randy.
Randy Giveans: Hi. So, after all these recent refinancing's clearly your balance sheets in great shape, good decisions there to redeem that senior notes. So, with all those moving parts, what do you expect the net change in total debt to be during the third quarter?
Simos Spyrou: And when we say net change, Randy, you mean net change in the interest and debt principle amortization?
Randy Giveans: Yes, just like total debt. I think right now it was like 1.55 something like this I guess 1.58, what do you expect it to be at the end of 3Q?
Simos Spyrou: So, end of 3Q, our debt should be lowered by approximately $50 million. Okay?
Randy Giveans: Sorry?
Simos Spyrou: Then interest expense for this quarter --. Sorry?
Randy Giveans: Oh yes, go ahead. Interest expense?
Simos Spyrou: Interest expense for this quarter should be at around $14 million dropping to $12 million from the next quarters as you essentially have the cheaper debt kicking in.
Randy Giveans: Got it. Okay, perfect. So, I guess that $50 million change in debt, maybe another, I don't know, $20 million increase in working cap. If rates obviously stay where they are now, it seems like 3Q dividend could easily exceed $1, is that fair?
Simos Spyrou: Well, I guess, Randy you're the securities analyst. We just run the shipping company. And a lot of just how --.
Hamish Norton: Just mentioned.
Simos Spyrou: Right, yes. An increase of $25 million in working capital seems reasonable given that we are in a continuously rising freight environment.
Randy Giveans: Got it, alright. I'll go with my assumptions from there. And then just last question from me. Speaking of good decisions for you, right, I applaud the share repurchase authorization over the last month rates, asset values going up, share price has been going down. So with that, now that your fleets fully delivered, you still have a few older vessels, so you can reduce your average fleet age by maybe selling so those. So, how do you view potential asset sales and then using those proceeds for maybe share repurchases in the near-term?
Simos Spyrou: To the extent, there's an arbitrage to be done that favors the shareholders. We will look at it very seriously. But other than other than an arbitrage that favors the shareholders, we're not in the market to sell ships generally.
Randy Giveans: Sure. I think the arbitrage of a very old ship at NAV and buying shares at a 25% discount to NAV would qualify. But I'll note. Well, thank you for the time.
Petros Pappas: Thank you, Randy.
Simos Spyrou: Thank you, Randy.
Operator: Thank you. The next question is from Amit Mehrotra from Deutsche Bank. Please go ahead.
Amit Mehrotra: Thanks. Hi, everyone. Congrats on the results in the dividend payment. I wanted to follow-up on the last line of questioning regarding the calibration of expectations for dividend payments for the third quarter. The math, I want to walk through the cash flow math if that's okay for a minute. So, first and foremost, I think you said 28,000 per day majority of days booked for the third quarter. That's basically a surplus of $17,000 per day, we've got to call it 90 days maybe a little bit under 90 days. So, you are talking about close to $200 million of incremental cash flows maybe a little bit under that in the third quarter alone. I am going to throw some numbers at you, you tell me where I am wrong. You are paying out a little over $70 million in September, you got some working capital build, but net-net you are probably looking at well over a $100 million or so of incremental cash balance on the balance sheet. So, what’s going to, what’s wrong in that math because that would imply a dividend payment of well over a $1, $1.20, $1.30 per share, well what I am missing in this, the math and the numbers?
Simos Spyrou: Well, the math is the consequence of your assumptions that are raised and working capital but I don’t know that there any errors.
Amit Mehrotra: Yes. Because you've said working capital $25 million build, you have 65% of the days booked. So, I guess is the risk is on the 35% of the balance. But I think I would imagine that the 35% balance would be accretive to your all run rate today, it's that would you agree with that or not agree with that?
Christos Begleris: Amit, this is Christos. Yes, I think we would probably agree with that.
Amit Mehrotra: Okay, great. And so, the other line of question, Hamish you know you guys have embarked on this framework and strategy of deleveraging in that and you're marking all the surplus cash flows for dividends. I think the end game is really to have the equity value of the company, capitalize those dividends, which appear sustainable at a healthy premium that gives you the currency to then grow the fleet or deleverage the fleet vis-a-vis the currency that you have in the market. That's not working out as of right now and I understand there's some more --.
Hamish Norton: Not as of this morning but maybe next week.
Amit Mehrotra: Yes. So, I guess the question is that because the stock right now is trading like it's trading like ex-dividend, it's maybe actually even a little bit more than that. And so, if the market continues to not give credit to these payments, how steadfast are you in the management team and Petros and everybody committed to this framework, if the market over the next two three quarters continues to basically not capitalize these payments at all?
Hamish Norton: We're incredibly stubborn people. We're just unbelievably stubborn and we're going to keep at it until it works.
Amit Mehrotra: Okay. And then, the last point on the ATM. I understand -- like, the question I have is that you're basically telegraphing equity offerings down the road which may actually be counterproductive in capping the opportunity in the equity in the first place. So, what's the thought behind the ATM in that respect when essentially it could be counterproductive and having the market give you credit for what you guys are doing?
Hamish Norton: Well, the answer is we're not going to use the ATM in a way that's counterproductive to the share price. We're only going to use the ATM in a way that accretive to earnings per share; net asset value per share; dividends per share; reduction of the company's net leverage; and reducing the average fleet age. In what way is that going to be bad for the share price? We're not going to use the ATM in any way that will injure the share price in the slightest way. Just the opposite.
Amit Mehrotra: Got it, okay. And then the last question from me if I could is the asset value environment. One of the things that really moved the share price up from $10 to $20 in a relatively short period of time was obviously this asset value cycle that we had a mini cycle that we had. Where has that stalled out a little bit or if you can just tell, it's not an overly liquid market, so I'd love to get some perspective on have we taken a pause in the upside and asset values and or have they come in a little bit, what's the overall feel out there?
Christos Begleris: Well Amit, we're looking at historical levels of prices and incomes and we are seeing that prices have actually lagged incomes. So, I don't know if that is psychological and has to do with the fact that we've been not in great markets for the last several years or whether it is COVID related or I don't know what other fears people may have. But we are -- I want to repeat that we're extremely positive in this company not only for the next couple of years but for several years forward because of the environmental regulations which within our main trend because it's going to induce slow steaming; scrubbing; less ordering; delays in yards; or hires; it will affect supply in a very strong way. So, we think there's going to be a strong market, perhaps people are not yet persuaded that this good market can continue for long. We think it will and after a while if we're right, I believe that vessel prices will catch up with the rates we're seeing.
Amit Mehrotra: Got it. Okay, that makes sense. Thank you for taking my questions. Congrats again, I appreciate it.
Hamish Norton: Thanks, Amit.
Simos Spyrou: Thank you, Amit.
Christos Begleris: Thank you, Amit.
Operator: Thank you. Our next question is from J. Mintzmyer from Value Investor's Edge. Please go ahead.
J. Mintzmyer: Hi, good morning. Good afternoon, gentlemen. Congrats on a fantastic quarter.
Petros Pappas: Thank you.
Christos Begleris: Thank you, J.
J. Mintzmyer: I think the dividend has been well covered. I appreciate the analysts in front of me asking great questions there. The only question I'd add to that is you added the $50 million repurchase authorization, how do you prioritize that in comparison to keeping net cash available for the Q3 payouts, is it based on like a function of price to NAV or how do you think about that?
Simos Spyrou: No, it's actually pretty straightforward, we really have no intention of reducing the dividend as a result of share buybacks. If we are to use the share buyback authorization, it would be an arbitrage between vessel prices and share prices. And we would probably fund it by selling a vessel or two and using the cash released by that vessel to buy back the shares. We wouldn't be using cash that would otherwise go into a dividend. At least, certainly that's not the current intention.
J. Mintzmyer: Okay, that seems reasonable. So yes, definitely heard the other panelists, it looks like $1 is the very low end of next quarters dividend and that's good to see. Do you have any interest in acquiring potentially other equities and dry bulk firms, there's a couple firms including one major U.S. listed firm which owns exclusively midsized assets, which has high private equity ownership which trade at 70% to 80% price to NAV. Is there any interest in some sort of a stock acquisition in that way?
Simos Spyrou: I mean, we always are interested in acquisitions that could be accretive to our earnings per share and our dividend per share and our net asset value per share and so on. But frankly, at this moment we haven't been looking at any of the examples that you've mentioned in an active way.
J. Mintzmyer: Yes, certainly makes sense. I appreciate the heavy focus on per share metrics. And I think well the whole industry will be in a better place if that focus continues. Thanks again, gentlemen.
Petros Pappas: Right, welcome.
Simos Spyrou: You're welcome.
Operator: Thank you. There are no further questions that are waiting. I'll now hand the call back to the speakers for any closing comments.
Petros Pappas: No further comments, operator. Thank you very much.
Operator: Thank you, sir. Ladies and gentlemen, that does conclude the call for today. Thank you all for joining. You may now disconnect.
