EuroDry Ltd.

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. Astridis Peters, 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 at which time if you wish to ask a question please press star 1 on your telephone keypad and wait for the automated message advising your line is open. I must advise 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 Peters 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 law. Matters discussed may be forward-looking statements which are based on current management expectations. 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 two 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. I would now like to pass the floor over to Mr. Peters. Thank you, sir. Please go ahead.

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 quote our end of December 31st, 2021. Please turn to slide three. Our income statement highlights are shown here. This is by far the best quarter since the separation of Eurodrive from Eurosys back in 2018. For the fourth quarter of 2021, we reported total net revenues of $22.3 million and a 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. 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, a $1.65 million loss on debt extinguishment and 1.75 million of preferred and preferred deemed dividends. Adjusted EBITDA for the 12 months of 2021 stood at $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 Astelidis will go over our financial highlights in more detail later on in the presentation. Please turn to slide 4 for our operational highlights. As previously announced, on January 19, 2022, the company agreed to acquire motor vessel Molibos-Lac, a 2014 built Supramax vessel for $22.2 million. The vessel was financed by own funds, but is expected to be further financed post-delivery with a bank loan estimated between $10-11 million. The vessel's existing charter will be assumed at $13,250 per day until April 2022. The vessel is expected to be delivered within next week. On the Charter in front, our Motor Vessel Alexander Spi is fixed for a trip of about 50-55 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 was fixed for approximately 12-18 days at $33,000 per day, followed by $30,250 per day for 20-25 days, and thereafter fixed on a time charter at $25,000 per day for a period between October to mid-December 2022. Finally, motor vessel Tassos was fixed for a trip of about 80-90 days at $15,750 per day. During the fourth quarter of 2021, the company settled the 90 days of previously sold forward trade agreements, the equivalent of one Panamax vessel, which was originally sold at a rate of $12,550 per day at a loss of $2 million. In addition, during the quarter, we sold 90 days in Q1 2022 of FFAs, the equivalent again of one Panamax vessel, at $31,500 per day, subsequently closing that position at $23,200 per day a few days later, realizing a gain of about $750,000. The total net realized loss from FFA contracts was about $1.26 million for the quarter. There were no dry dockings during the fourth quarter of 2021. Furthermore, through our 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 our 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. Please turn to slide 5 for the summary of Eurodry's current fleet. With the acquisition of Modigos LAC, Eurodry's fleet has increased to 10 units, further complementing our cluster of modern vessels with highly efficient eco-designs and attractive commercial characteristics in terms of fuel efficiency and operating 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. 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 six on-index charters that have secured employment but are open to market fluctuations. Now let's turn to slide seven, where we'll go over the market highlights for the quarter ended in December 31st, 2021, and up to now. The dry bulk spot 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 2022 they retreated by approximately another 30%. At the same time, after initially retreating two, one-year time charter rates recovered the debate during December 2021 and January 2022, suggesting that there are expectations amongst the market participants that the spot earnings retreat, a cyclically common effect 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 Clarkson's data to be released on Friday to show an increase of at least $2,000 to $3,000 on the spot rates and $1,000 on the one-year TC relative to the February 4 data which is included in our presentation. Even at 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 Camser Max vessels and $35 million for Ultramax vessels, respectively. The fleet grew by 3.6% during 2021. Please now turn to slide nine. 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, half a percentage point lower since the previous projections in October. However, the 0.5% growth 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 by 0.5% to a level of 3.8%. Prospects for emerging markets and developing economies are also generally for lower growth than 2021. in 2022, except for India, which is expected to be steady at a nice 9% level. From the developed economies, Japan and the ASEAN Five should do better than 2021, whilst the US, citing tighter Fed policy and an anticipated halt to any further stimulus spending by Congress, reduced its growth forecast for 2022 since October by 1.2 percentage points to just 4%. 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 policy easing to ward off a sharp downturn. The lower growth rate underlines multiple headwinds facing the world's second-largest economy due to a property downturn, a crackdown on debt, tougher pollution measures, and strict COVID-19 curves, which have shut businesses and reduced consumption. Looking at the dryback trade, and according to Clarkson 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 considerations. Please turn to slide 10. The order book 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 dry bulk 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, they expect a net fleet growth of around 2% during 2022, and below 1% in 2023, after also taking into account scrapping, slippage, 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. Please turn to slide 12, where we summarize our outlook in the dry bulk market. As previously mentioned, global recovery continues, yet new COVID-19 variants, 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 iron ore from China, which has affected primarily the Cape-sized market, but has trickled 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. Furthermore, ordering of new ships for 2023 deliveries is expected to be extremely low 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 cave size sector. and the implementation of the new IMO environmental regulations in January 2023 will be key elements in the direction of the market. Let's turn to slide 13. The left side of the slide shows the evolution of one-year time charter age of PANOMEX dry bulk vessels since 2002. As of the end of last week, The one-year time charter rate for Panamax ships 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 a 10-year-old Panamax vessel, which has a current price of around $25 million. Over the past year, dry bulk prices have gradually been increasing, exceeding the historical median 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. Let me now pass the floor over to our CFO, Tassos Asselidis, to go over our various financial highlights in more detail. Tassos, the floor is yours.

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. Over the next five 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. 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 earned 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. 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. 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, compared to basic diluted loss per share of $0.31 for the fourth quarter of 2020. 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 34 cents for the same quarter of 2020. Usually, security analysts do not include the above items in their published estimate 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 half a million charge as classified as preferred deemed dividend, which is the result of the redemption of all 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. For the full year of 2021, the company reported total net revenues of 64.4 million, representing a 189% increase over total net revenues of 22.3 million during the full year of 2020, again as a result of the increased average time charter equivalent rate of vessel sharing and the higher average number of vessels we operate. The company reported a net income for the period of 31.2 million and a 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. 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 charge 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. For 2021, the company recognized a 0.3 million gain on four 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 comprised of a 0.3 million loss on FFA contracts and a 0.5 million loss on three 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 diluted loss of $3.20 per share for 2020. Excluding the effect on 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 would have been $11.98 basic and $11.88 diluted. Compared to an adjusted loss of $3.04 basic diluted for 2020. Again, as previously mentioned, security analysts do not include the above adjustments in the estimates of earnings per share. I will mention again that, as I did in my presentation for the quality 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 shares. After that redemption, our capital structure has been simplified and includes only bank debt and common equity. Let's now turn to slide 16 to review our fleet performance. We will start our review by looking first at our fleet utilization rates for the fourth quarter of 2020 and 2021. As usual, our fleet utilization rate is broken down to 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, nine 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 seven vessels, that we operated in the same period of 2020, earning an average time chart equivalent rate of $10,761 per vessel per day, almost a threefold increase in charter rates between the two years. Our total daily operating expenses, including management fees, general and administrative expenses, but excluding dry docking 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. 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 dry docking expenses, cash intern expenses, loan repayments, and any preferred dividend payments if 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. 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 contract equivalent rate of $24,222, compared to seven vessels owned and operated during 2020, earning on average $9,387 per vessel per day. Our total operating expenses, again, including management fees, G&A expenses, but excluding dry docking costs for 2021, amounting to $6,456 per vessel per day, compared to $6,211 per vessel per day, for 2020. Let's look again at the bottom of this table to see our flow break-even rate for the year, which amounted to $10,728 per vessel per day in 2021, compared to $10,800 for 2020. Let's move now to slide 17. We have used 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 this slide has two 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. It is about 50% for the first quarter but declines to 14 and 10% in the second and third quarters and is very small in the fourth quarter. This chartering 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 dry bulk Baltic Dry Index. Our calculator indicatively shows, further below, the Supramax and Panamax Baltic forego rates, S of February 8, 2022 in this instance, and also shows how these 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 Supermax and Panamax forgo rates in the table. Based on these assumptions, and by further assuming for simplicity $6,700 per vessel per day operating and GNA 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. This overall exercise is meant to provide a simple tool to calculate our EBITDA for this year. Obviously, one can enter his or her own assumptions about the rates to do that. It is worth observing that at current FFA rates, one would expect an annualized EBITDA rate that is above that that 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, a change of $1,000 per day in the average rate earned by our open days would result in about 2.8 million change in our 2022 EBITDA. Let's now move to slide 18 to review our debt profile. On the top part of this slide, we can see 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 have debt repayments between $10.5 and $14.1 million each year over the next three years, before our loan repayments drop to between $4 and $5 million in 2024 and 2025. Our next balloon payment is towards the end of 2023 for about $11.3 million, and that refers to one of our Kamstermax vessels. We expect to be able to refinance that balloon payment as we have done in numerous previous occasions. A quick note here on the cost of our funding, or the cost of our debt. The annual life margin of our debt is about 2.8%. Assuming a 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 $12,500 per vessel per day. You can see the components that make up that breakeven level. 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 for our vessels of 128.5 million, making our total book value for our assets at 161.3 million. On the liability side, our debt as of December 31, 2021, at 79.4 million, which approximately represents 49.3% of the book value of our assets. Accounting for other liabilities, as of December 31st, 2021, of 3.8 million, we can get 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 nine vessels was about 182 million, that is 42% higher than the respective book values, suggesting that our NAEV 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 NAV to be, thus potentially representing a significant appreciation opportunity to our shareholders. And with that comment, I would like to turn the floor back to Aristides to continue the call.

Thank you, Tassos. Let me open up the floor for any questions we may have.

Thank you. Ladies and gentlemen, may I remind you, please, if you'd like to ask a question, please press star and 1 on your telephone. And your first request is from the line of Tate Sullivan from Maxing Group. Please go ahead.

Hello. Good day. Hi. Starting on the, as I have in the past since you've introduced the EBITDA calculator, And Tassos, can you just go over a couple of changes? I apologize if I missed it on the indicative dry docking costs. I do not think you included those in the January presentation. And also a slight increase in the OPEX and GNA vessel per day cost from $6,500 to $6,700. Can you just walk over why you decided to make those changes, please?

Regarding the dry docking costs, we always included them. Simply in 2021, we had very, almost no dry docking expenses. So that's why we have included them. And actually, sorry, we did have dry docking expenses. in 2020, but almost no dry docking expense in 2021, so it made a very small difference, and perhaps we didn't list them explicitly in the EBITDA calculator. For 2022, it's something that we should take into account. Probably different from other presentations, always our EBITDA is net of dry docking expenses. And we increased the Estimate for our OPEX and GNA cost partly to be conservative, as we have seen some increases in the cost due to growing and other developments.

Great. And then for the Q1 EBITDA, on the same slide, does it include the grossed ballast bonus for the Alexandros ship, or how will you account for that?

It should include the... the balance bonus.

Okay, great. And then the acquisition of the Malibu's luck, you announced it a little after January 21.2. Is all of that cash coming out of your cash flow statement in this current quarter? That's correct.

We intend to finance about half of the acquisition costs with bank debt, but we'll do it after the acquisition. We'll pay for the vessel with cash that we currently have in our balance sheet.

Thank you. And Eris, I'd love to hear just more. You gave some comments before, I mean, in your career in shipping and the rapid increase in the cash on your balance sheet. Have you seen that before? And would you say you just continue to evaluate balancing that between acquisitions, if you can still forecast positive IRR going forward versus repurchases. Can you give an update on putting this in context in your shipping career, please?

Sure. I mean, last time we saw these significant increases was really back in 2006 and 2007. So that was the last three 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 seven vessels at the time to about 20 vessels by the end of that cycle. 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. We don't expect a 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 in hand and also keep leverage low, but at the same time be able to grow the company. We did consider... also instituting a share buyback program in our last board meeting. 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 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.

Thank you. And just to follow up on that, going through this current cycle with leverage, I mean, net debt to EBITDA a little below two times to end the year, and I have forecasts going at well below one times 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?

In a good market, we would want to see that going down to below 30% leverage. 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.

Okay. All right. Thank you both for your follow-up questions. Thank you, Dave.

Thank you. Your next question is from the line of Paul Fratt of Noble Capital Markets. Please go ahead. Your line is now open.

Good morning, Aristides. Good morning, Tassos. This is Paul Fratt from Noble Capital Markets. You've done a good job of expanding the fleet and enhancing the fleet 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 fleet grows, 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?

Yes, it's difficult to say because it's a very dynamic market, Paul, and 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 a stronger market as we go into Q2, as historically, seasonally happens. 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. So it's in our mind that we might need to swap maybe one or two 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.

Great. And maybe you could just highlight the activity on the FFA front. You know, what drove you to close out the FFA that you had in place for the, you know, the first quarter 22 and the fourth quarter? And then does this mean you don't have any FFAs in place right now?

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. 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 after two weeks of time when the market had 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.

And then Aristides, with a larger fleet, does your view on hedging change at all? Meaning with more open days, do you think that you'll do more hedging in the future or do you

Yes, but the hedging can be done also by fixing 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 a 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.

Understood. It looks like you're aiming to finance about 50% of the latest acquisition. 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?

I think we're, I mean, we don't have fixed terms this time around because we have enough cash to buy the vessel outright and finance it 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.

And do you think you can get a five-year term or sort of what should we be thinking about sort of

I'm sure we'll get a four- to five-year term for the loan and the profile up to the age of 16, 17.

Great. Thanks for your time.

Thank you, guys. Thank you, Paul.

Thank you. There are no further questions at this time, so may I hand the meeting back to Mr. Aristides-Peters for any closing remarks?

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.

Thanks everybody.

That concludes the presentation. Thank you for participating. You may disconnect.