Euroseas Ltd.

Thank you for standing by, ladies and gentlemen, and welcome to the EURESYS conference call on the fourth quarter 2021 financial results. We have with us Mr. Aristides Pitas, 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 you that this conference is being recorded today. Please be reminded that the company announced their results with a press release that has been publicly distributed. Before passing the floor to Mr. Pitas, I would like to remind everyone that in today's presentation, Ulysses 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 number two of 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. And now I would like to pass the floor to Mr. Peters. Please go ahead, sir.

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 quarter ended and full year December 31, 2021. Let us turn to slide three. Our income statement highlights are shown here. The fourth quarter of 2021 was a seminal one for Eurosys as we recorded the highest net income level in our history. For the fourth quarter of 2021, we reported total net revenues of $38.3 million and net income attributable to common shareholders of $22.7 million. Adjusted net income attributable to common shareholders For the period, it was $32.9 million, or $3.18 per share, and $3.17 per share, basic and diluted, respectively. Adjusted EBITDA for the period stood at $26.1 million. For the full year of 2021, our net revenue was $93.9 million, and net income attributable to common shareholders was $42.3 million. Adjusted net income attributable to common shareholders for the period was $42 million, or $6.02 and $6.01 per share, basic and diluted respectively. Adjusted EBITDA for the period stood at $52.7 million. Notably, net revenues for the quarter and full year, as well as adjusted EBITDA, were higher than the previous years by multiple measures of magnitude, as can be seen on the slide. Our CFO, Tasosas Lilic, will go over financial highlights in more detail later on in the presentation. Please turn to slide 4 where we discuss our recent chartering and operational developments. Motor vessel Marcos V was bought with the charter for approximately 36 to 42 months at $42,000 per day. The EM Astoria was fixed for a minimum period of about 36 to 38 months at $65,000 per day for the first year, followed by $50,000 per day for the second year, and thereafter fixed at $20,000 per day for the remaining period. Every VKG was extended for a minimum period of 36 to 38 months at $40,000 per day. The EM Corfu was fixed for 36 to 40 days at $5,125 per day as a replacement. is thereafter fixed for 36 to 38 months at $40,000 per day as well. Furthermore, Jonathan P. was bought with a charter attached for a minimum period $14,500 per day, whilst the Synergy Auckland was fixed for about 48 to 51 months for years at $42,000 per day. The vessel is to be delivered by April 15, 2022. The previous charter payment of the higher charter rate to the company, continuing during the extension. However, the extension resulted in the loss of the subsequent short-term charter of $130,000 per day that was to be performed before the four-year charter would kick in. The vessel, after a nightly day of about 15 days, was chartered for a single voyage, The new charter arrangements will result in about the same average rate and total revenues as the original arrangements. Furthermore, two of our vessels incurred repairs and were involved in special surveys with dry docks in the fourth quarter. The Diamandis B, for about 49 days between September and October 2021, and DM Corfu, Since 29th of December till about now, no vessels were idle or commercially off-hire during the fourth quarter. Please turn to slide 5, where we review our recent sale and purchase highlights. Two vessels were delivered during the fourth quarter of 2019. Also, as previously announced, on January 28, 2022, we signed a contract for the construction of two EcoDesign fuel-efficient container ships, similar to the ones ordered in June 2021. and first quarter of 2024, respectively. The total consideration for each of these two new building contracts is approximately $43.15 million and will be financed through the combination of debt and equity. This brings our new building program to four vessels and solidifies our market presence in the larger field sector. Both vessels adhere to the current greenhouse gas and other requirements and significantly improve our fleet profile, both as concerns age and the echo characteristics. It is noteworthy that the new vessels will consume about 30% less fuel than previous generation non-echo ships. Please turn to slide 6, where you can see our current fleet profiles. Eurosea's current fleet is comprised of 16 vessels on the water, including 10 feeder container ships and six intermediate container carriers. Eurosea's 16 container ships have a cargo and the first half of 2024, Eurasia's fleet will consist of 20 vessels with a total carrying capacity of close to 62,000 TEU. Slide 7 shows our vessel employment chart. As you may see, we have charted almost more than 92% of our available capacity in 2022. percent of our available days in 2024, taking into account the new buildings as well, at a contracted EBITDA level of about $113 million for 2022 and $92 million for 2023. Our contracted average time charter rate for 2022 stands at about $31,250 per day. while for 2023 and 2024 it's higher, estimated at $33,000 per day and $33,500 per day, respectively. Let's now turn to slide 9 to review how to new highs, despite a short-lived retreat in container rates that we witnessed during November and December of 2021. Please turn to slide 10 to go over the overall market highlights. As we said, time charter rates across all segments skyrocketed over the past 12 months and have reached all-time highs. Additionally, during the fourth quarter, the average second-hand price index rose by about 16 percent in Q4 over Q3. Price increases varied across different age groups, with the elder vessels having increased well in excess of 100 percent in 2021. During the fourth quarter, new building prices also increased by approximately 3% due to steel prices being on the rise and high demand for new buildings on the back of the general container ship market rise. The idle container ship fleet, as of the beginning of 2022, stands at only about 130,000 TEU, anyway. The percentage of container ships scrapped to date has dropped dramatically to approximately 12,000 TEU, again the lowest point ever. This is, of course, despite the fact that prices have increased to over $615 per lightweight ton due to the high demand for steel. Overall, the fleet grew by about 3.9% in 2021. of course accounting for the idle deactivations. The order book has significantly increased, mainly through larger vessels, with the current order book to fleet ratio hovering around 24%, compared to just 10% a year ago. Please turn to slide 11. The IMF's revised outlook is largely led by growth markdowns in the two largest economies, the U.S. and China. According to the January 2022 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 likely be gained in 2023, with forecasts up from 3.3% in October 2021 to 3.8% in January 2022. Despite slowing down, growth prospects for emerging markets and developing economies are expected to go back to the pre-pandemic trend by 2023, for India, which is expected to be steady at around 9%. Growth forecasts remain promising for advanced economies, with Japan and the ASEAN 5 doing better than 20%. Congress has a reduced growth forecast for 2022 from 5.2 percentage points to 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 sharper downturn. The lower growth to a property downturn, a crackdown on debt, tougher pollution measures, and strict COVID-19 curbs which have hit consumption. For 2022 and 2023, containerized trade is expected to grow at healthy levels of 3.6% and 3.5% respectively. As you can see in the container shipage profile chart located on the left side of the slide, we have a young fleet, with a mere 8% of ships being above 20 years old. However, the older vessels are mainly concentrated in the smaller classes where our ships operate. figures for 2022 to 2025 reflect the anticipated fleet growth before scrapping and slippages. will be concentrated on the larger-sized vessels. Please turn to slide 13, where we discuss our outlook summary. 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. Container ship trade remains positive, with moderate supply growth in 2022, accelerating in 2023 and 2024. Port congestion has continued to significantly impact the container shipping markets, leading to excessive wait times and disrupting operator schedules. These logistical bottlenecks have resulted in new highs in container freight rates, which are expected to remain throughout 2022. The short-term outlook looks optimistic, reinforced by logistical disruptions and firm trade demand. Additionally, limited supply growth in 2022 should provide some rate support before increased new building deliveries in 2023. with a range of factors likely to have an impact. Firstly, uncertainty may arise if demand for vessels wanes once supply chain disruption is. Secondly, material supply pressure from 2023 onwards may overtake demand growth due to increased deliveries. But last and not least, New environmental regulations will probably result in even slower steaming by 2023, 2024, effectively removing capacity from the market. The balance is very difficult to determine. Let's move to slide 14. The left side of the slide shows the evolution of the one-year time-chart arrays TEU since 2000. As discussed, we are witnessing the highest charter rates in the last 20 years. According to Clarkson's last week, one-year daily time charter rates for 2,500 TEU container ships stood at $76,000 per day. The right-hand side of the slide shows vessel values in relation to historical prices since 2012. As we can see, current container ship values stand at about 52 million and have significantly increased above median and average levels and are now at the highest levels over the last decade. There is no doubt that at some point both prices and charter rates will need to correct, but the big question is when will this happen and how far further will they have reached till then. because the only clear thing today is the lack of sufficient capacity to service the world's needs of today. In this unsteady environment, we have secured and continue to secure as much earnings as possible and are looking to utilize the vast amount of liquidity

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you through the next five slides of our presentation and give you an overview of our financial highlights for the fourth quarter and full year of 2021 and compare them with our results in the equivalent period of 2020. For that, let's turn to slide 16. For the fourth quarter of 2021, the company reported total net revenues of $38.3 million, representing a 218% increase over total net revenues of $12 million during the fourth quarter of 2020. The increase was predominantly due to the higher average time charter rates of Russell Stern in the fourth quarter of last year compared to the corresponding period of 2020. For the fourth quarter of 2021, the company reported net income and net income attributable to common shareholders of 22.7 million as compared to a net income of 0.6 million and a net income attributable to common shareholders of 0.4 million for the fourth quarter of 2020. Interest and other financing costs for the fourth quarter of 2021 amounted to about 0.8 million, comparable to 0.8 million that we had for the same period of 2020, during which, though, we also recorded a loss on extinguishing of debt of about half a million. Adjusted EBITDA for the fourth quarter of 2021 was 26.1 million, compared to 2.1 million for the corresponding period of 2020, registering in a 1,132% increase over the previous period. Basic earnings per share attributable to common shareholders for the fourth quarter of 2021 were $3.15, while diluted earnings per share were $3.13, calculated respectively on 7.2%. 21 million and 7.24 million basic and diluted weighted average number of sales outstanding, compared to basic diluted earnings per share of $0.07 for the fourth quarter of 2020, calculated at 6.15 million basic diluted weighted average number of sales outstanding. Excluding the effect from the income attributable to common shareholders for the quarter of the unrealized loss and derivatives, the amortization of below-market time charters acquired, and the depreciation charged due to the increased value of the vessels acquired with below-market time charters, the adjusted earnings attributable to common shareholders for the quarter ended December 31, 2021, which has been $3.18 basic and $3.17 diluted, compared to an adjusted loss of $0.16 per share, basically diluted for the quarter of 2020. Usually, security analysts do not include these items in their public estimates of turnover per share, and that's why we're making this adjustment as well. 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 $93.9 million, representing a 76% increase over total net revenues of $53.3 million during the 12 months of 2020. The company reported a net income for 2021 of 42.9 million, a net income attributable to common shareholders of 42.3 million, as compared to a net income of 4 million, a net income attributable to common shareholders of 3.3 million for 2020. Interest and other financing costs for the 12 months of 2021 amounted to 2.8 million, compared to 4.1 million for 2020, during which year we also recorded a loss and an extinguishment of debt of half a million as I mentioned earlier. This decrease of interest expenses is due to the lower average level of debt we've had during 2021 as compared to the previous year. Our debt only increased in the fourth quarter of 2021 when we partly financed with debt our latest acquisitions. Adjusted dividend for 2021 was $52.7 million compared to $11.8 million during 2020. Basic earnings per share attributable to common shareholders for 2021 were $6.06, and diluted earnings per share were $6.05, calculated on $6.98 and $6.99 million of basically diluted weighted average number of shares outstanding, compared to basically diluted earnings per share of $0.58 for 2020. Again, excluding the effect on the income attributable to common shareholders for 2021 of the unrealized gain in derivatives, the amortization of the below-marked time-charger suppliers, the depreciation charged due to the increased value of the vessels acquired with below-market charters, and the net loss in the sale of a vessel, the adjusted earnings attributable to common shareholders for the year of 2021, which have been $6.02 basic and $6.01 diluted, compared to a marginal adjusted loss of essentially $0 per share basically diluted for 2020. Let's now move to slide 17 to review our fleet performance. We will start our review by looking first at our fleet utilization rates for the fourth quarter of 2021 and compare them to the same for 2024. As usual, our fleet utilization rate is broken down into commercial and operational. During the fourth quarter of 2021, Our commercial utilization rate was 100%, while our operational utilization rate was 98.5%, compared to 98.5% commercial and 96.3% operational for the fourth quarter of 2020. I should remind you here that our utilization rate calculation does not include vessels in dry dock or scheduled repairs, if any such events were to occur during the period we're considering. On average, 15.01 vessels were owned and operated during the fourth quarter of 2021, earning an average time charter equivalent rate of $29,994 per day, compared to 14.43 vessels owned and operated in the same period, the fourth quarter of 2020, earning on average $10,497 per day. Our total daily operating expenses, including management fees, general and administrative expenses, but excluding driver costs, averaged $7,708 per vessel per day during the fourth quarter of 2021, compared to $7,164 per vessel per day for the fourth quarter of 2020. Our cash flow breakeven rate during the fourth quarter of 2021 was about $11,950 per vessel per day, compared to $8,215 per vessel per day for the fourth quarter of 2020, the quarter during which we did not do any loan repayments. Let's now look at the right part of the slide to review the same figures for the full year. During 2021, our commercial utilization rate again 100%, while our operational utilization rate was 98.5%, compared to 97.5% commercial and 98% operational for 2020. On average, during 2021, 14.25 vessels were owned and operated, earning an average time charter equivalent rate of $19,309 per day, compared to 17.23 vessels during 2020, earning on average $9,445 per day. Our total operating expenses, again, including management fees and G&A expenses, but excluding die-doping costs for 2021, amounted to $7,212 per vessel per day compared to $6,431 per vessel per day for the previous year 2020. Let's look again at the bottom of this table to review the cash flow break-even rate we had for the year, which amounted to $10,783 in 2021, compared to $8,357 during 2020. Let's move now to slide 18. We have become familiar with this slide by now. We concluded this slide in the last three or four calls to provide our shareholders and investors with the tool to assess the earning potential of our fleet in the coming periods. The table shown in these slides has two parts. The first part refers to our already in place contracts. The table shows the available days for hire, making assumptions for the steady and dry dockings, the number of contracted days in each period that we're reviewing, as well as the difference of the two, what we call the remaining open days of our fleet. As you can see in the table, almost all of our vessel available days are contracted for 2022, 92%. while 62% of our FLIP available days for 2023 are also contracted out. For the contracted days, the table shows the average contracted rate, which allows you, by making an assumption for the OPEX and GNA expenses per day, to estimate the likely EBITDA contribution. For the remaining open days, whoever uses this calculator needs to make an assumption about the daily rate to be earned, which would allow him or her to estimate the EBITDA contribution over the open days. To provide an indicative calculation, if one used the same rate as the blended contracted rate, one can see the effect on the total EBITDA for 2022 and 2023. This overall exercise is meant to provide was the tool to calculate our EBITDA for 2022, 2023, even 2024, if one wants to extend it, by entering one's own assumptions about the rates for the open days. It is hard, though, to let go unnoticed that for 2022, a year that more than 90% of our fleet is contracted out, we expect to likely double our EBITDA as compared to 2021, and see the figure that this figure could even go farther in 2023, if, of course, the right assumptions in the table comes true. Let's now move to slide 19 to review our debt profile. On the top part of the slide, we can see our scheduled current debt repayments over the next several years. Our loan repayment schedule for this year stands at $27.4 million, with debt repayments of existing debt going down over the next three years. In addition to the regular repayments, the chart shows light blue bars are scheduled balloon payments. In 2022, we have a small balloon payment of $1.9 million. We have $30.7 million due to be paid in 2023. and a further 1.8 million balloon in 2024. In the past, we have typically financed our balloon payments, at least the larger ones, and we expect to be able to do so in the future if we choose to do so. Two further points here. First, we have two vessels that are currently unencumbered, the Joanna and the Kinada Bridge. point that I would like to make is the chart does not include the debt that we expect to assume for the financing, the part financing we are planning to take to finance our four new buildings during 2023 and early 2024. For our new buildings, we typically make the initial payments with our own funds and draw a loan to finance the last and larger payment at the delivery of the residents. The final quick note on this slide on the cost of our debt as it relates to the loans outstanding at the end of last year. The average margin on our debt is about 3 percent, and assuming a LIBOR rate of 0.3 percent, our senior debt cost, our current senior debt cost is on average 3.3 percent, and if one includes the cost of our interest rate swaps is averaging 3.4%. Looking at the bottom of this table, we can see our cash flow rate even level expectation for the next 12 months in dollars per vessel per day. You can see that our loan repayments that we just reviewed over the next 12 months are to make $4,250 per vessel per day contribution to our cash flow break-even level. If we make similar assumptions for the remaining components of our cash flow break-even level, our operating expenses, G&A expenses, interest payments, and dry docking costs, we come up with a cash flow break-even level for the next 12 months of just around $13,075 per vessel today. Let's now move to slight lending. This slide provides some highlights from our balances, adjusted to reflect the market value of our fleet. As of December 2021, on a book value basis first, and on our asset side, we set costs and other assets for about $7.1 million, and the book value of our vessels, including advances for the new buildings, and the acquisition of the vessels, including the acquired vessels Jonathan P. and Marcos V., of $183.4 million, giving us a total book value for our assets of about $221 million. On the liability side, we had an outstanding bank debt of $119 million and other liabilities of $8.5 million. started mentioning, the market value of our fleet is much higher than its book value, even if adjusted for the negative value of our charters, the latter a result of an increasing market, a continuously increasing market. Specifically, we estimate that our vessels were worth, at the end of last year, about $445 million. inclusive of the appreciation of the value of our new building contracts. If we use that instead of the book value for our vessels, we can calculate the net asset value for our fleet to be around $337 million, or around $46 per share. Recently, our shares have been trading in the range of $30 to $34 per share. And although this share price reflects a noteworthy increase in the beginning of the year, it still represents a significant discount to our net asset value per share, thus offering good appreciation potential for our shareholders and good investment opportunities for other investors. And with that, I would like to close my short presentation and pass the floor back to Aristides to continue our discussions.

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

Thank you. We will now begin the question and answer session. 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. Please state your first and last name before you ask your question. If you wish to cancel your request, please press star 2. Once again, that's star 1 if you wish to ask a question and star 2 to cancel the request. We will now take our first question. Please go ahead. Your line is now open.

Well, good day. This is Tate Sullivan from Maxim Group. I'm just starting just a couple follow-up questions with your comments about the order book. currently being composed of much larger vessels for 23, particularly for entrance into the market in 23. Can you remind us of the benefit of operating smaller ships in your fleet and taking delivery of smaller ships, and maybe even comment on the future composition of the container ship fleet, please?

Obviously there is always a cascading effect when you have container ships. They all carry the same kind of cargo, which is container ships, but the smaller vessels can go into smaller ports where the bigger ones cannot. And the bigger ones tend to go from into the bigger ports where they discharge the cargo there, and from there smaller ships pick up the cargo and take it smaller distances towards other smaller ports. So all type of vessels are needed. The big ordering is happening on the big vessels, the ones that do the transatlantic and the transpacific tradings mainly. So you realize that we also need ships that are smaller. Not a lot are being built. those smaller ships, and the ones that exist are also the elder vessels around. So we think this is kind of a relatively niche market to be in, and we are traditionally focused on that market. Thank you.

And with, I mean, most of your capacity spoken Is there any chance additional ship capacity opens to build you new ships in the next two years, or is really today the earliest delivery still for multiple years, if you do decide to build above and beyond the four new builds you have on order?

We are considering the possibility to build new vessels as well. We're still looking at that possibility. The shipyards are quite full with new orders, though, so you cannot get them with prompt deliveries these days, which is a drawback. But we will see.

Okay, thank you. And just on a topic we talked about before, just targeted debt ratios going through this cycle, and if there is eventually a slowdown, is it, I mean, the capital ratio using net asset value, do you look at 30% level or 40% level of debt to capital ratios, or how do you look at that over the cycle? Yes, I mean, we look at...

Well, I was about to say, I believe, the same thing as you were starting, saying that we have a current leverage ratio of just around 25 percent using charter-adjusted values. We intend to finance our new buildings at around 60 to 65 percent of our contract value. So even with our new buildings financed, our leverage ratio will be below around 35 percent. So it's a modest leverage ratio, reflective of the point in the cycle we are. Even if there is a movement, a downward movement of the cycle, it will remain very low leverage, leverage that we're quite comfortable to have throughout the cycle.

Thank you. And last for me, just following up the new build comment, if you did order a ship today, just in terms of the update, I know it can vary. Is it middle 2024 delivery at this point? Around that date, yes. Okay. Thank you both. Have a great rest of the day. Thank you. Thank you.

We will now take our next question. Please go ahead. Your line is now open.

Hi, this is Paul Fratt from Noble Capital Markets. Good afternoon to both of you. Just to follow up on the new build question, it looks like, you know, between the time that you ordered the first two and then move forward on the second two, I was a little bit surprised that you were able to minimize the price increases. The price only went up for the new builds about 15%. And can you just talk about whether you had options for the second two new builds or whether these were just new negotiations with the shipyard and you were able to minimize the cost increases?

There were new negotiations, Paul. There were new negotiations. We weren't able to get options. The shipyards are very difficult to give options these days, unfortunately, because they know that there is...it's tight to order new-built vessels. There's quite a lot of inquiry and not too many shipyards around to build ships. So they have a bargaining power these days. The reason is that the price increase was not that high, is that the delivery time is quite some time out, right? The deliveries are towards the end of 2020. of 23, first and second quarter of 23. So it's not only that the price is more expensive, not too much, luckily, but it's also six months later deliveries as well.

Yeah, but that's commensurate with the time between when you ordered the first and second, isn't it? True, true, it is, it is, it is.

But if we were able to get an early delivery, it would have been much more expensive.

Okay, understood. And so when you're looking at, you know, I think you talked about the earliest to get another two potentially new builds out there. Would you be looking at a like increase in costs, you know, say, you know, closer to $100 million for two instead of $86 million?

I don't want to speculate too much when the discussions might be going on, but if there is something to announce, we'll definitely announce it. But I leave it at that right now, Paul.

Okay. Well, I appreciate that. Could you talk about, I think in your last webcast or webinar, I thought I heard, or maybe it was on the last quarterly conference call, I thought I heard that there was interest in the first two new builds as far as putting them under time charters. Can you update us on any potential time charters that you might have secured or in the potential or process is occurring on the 1st of June?

Be sure that if there is something to be announced there will be a press release announcing it so there is nothing announceable at this point in time. People are showing some interest in fixing but still we are not actively marketing the ships for charter. We think it's something that be marketing them yet. Okay, great.

And then can you talk about the, you know, as somebody mentioned, you just don't have that much availability this year as far as new time charters, but can you talk about the, you know, open days that you have either on the Aconita Bridge or, you know, the, now I forget what the second one is, it's closer, but Is there any change in the market that would lead us to believe that you wouldn't be able to get similar terms as far as time charter length and rates on those two open vessels?

The context index just came out today as it comes, you know, twice a week. All constituents were green again, which means they were all up again a little bit. So the market continues to strengthen, so we think that the more we wait, the higher I don't know if this will continue forever. It can't, obviously, but it continues. So we'll see.

And would you be looking for more length airstreams? Or, you know, given the current Ford cover you have, would you be more inclined to play more the short term and keep some of those open or exposed to the spot market? Hmm.

No, it will depend on what interest we see from our clients. We are happy with the levels that we are seeing for long periods as well. So, you know, if we see for the smaller years, we might do the three years for the smaller vessels. And for the bigger vessel, we would do anything from three to five years. If the rate for a single year was fantastic, we could consider that as well. We will see. We will see.

Yep. Stay tuned. And then can we just walk through sort of your philosophy on... potentially doing either stock buybacks or dividends, whether it's a special dividend or regular dividend. If I did the math on the next two years, 2022 and 2023, I come to the conclusion that from an operating cash flow standpoint, you'll generate more than $250 million based on what the current market and current forward cover is. And you have, from a cash perspective, about $65 million of capex on the new build program, assuming that you're going to finance 60% of the final delivery payments on the new builds. And so you'll generate a significant amount of excess cash, if you will, And unless you make additional acquisitions, can you just talk about what potential plans you might have for assessing what you do with the excess cash?

As you have seen, our first priority has continued to be to use the liquidity that we generate to grow the company and to renew the fleet and position the company to be an even more significant player within the So this is the top priority, if we can find projects that make sense. So this is the most interesting thing for us. If we run out of investment ideas, then we might consider returning capital to shareholders. However, up to now we've been able to find good opportunities to invest Every investment that we've done up to now already appears that it has been a good investment to the shareholders. So up to now we've been able to find good investments. I hope we will continue to be able to do that. If we feel that we can't do it, then obviously we will have to do something with the liquidity But as I've said repeatedly, our family is one of the major shareholders within the company, and our priority is to optimize the results.

Okay, great. And if I could just ask one last question about just the cadence of the capital that you're going to spend on the new builds. You know, you have $7.6 million so far, you know, the deposits on the first two new builds. You know, I assume there will be 10% deposits on the second two new builds, you know, this coming quarter, maybe the second quarter. Can you... My math brings me to about $34 million of CapEx in 2022 for the new builds, and then about $98 million in... for the new builds in 2023. Are those numbers in the ballpark, or can you give us an idea of, you know, how much capex you'll have for the new build program in 2022 and 2023?

I think those numbers are in the ballpark. I would expect that we will make about six installments for the first two new builds by the end of the year. We have made two, and we'll make another four, I guess. And then we'll pay the remaining delivery, 70% delivery. And we'll start making installments for the new buildings. I would imagine that we'll do one, obviously, the first 10%. We have done that. And I think the rest of them will be in 2023. Okay, great. Thank you so much. And the fourth one will be in 2024, the $70,000 reform fund.

Yes, that will bleed into the first quarter of 2024. Okay, great. Thank you, Tassos. Okay. Thank you.

Okay, guys.

We have no further questions at this time.

Okay, thank you very much for being with us during this call, and we look forward to talking to you in three months.