Euroseas Ltd.

Thank you for standing by, ladies and gentlemen, and welcome to the Euro-C's conference call on the second quarter 2023 financial results. We have with us Mr. Aristides Pidas, Chairman and Chief Executive Officer, and Mr. Tasos Aslides, 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 your name to be announced. I must advise you that this conference is being recorded today. Please be reminded that the company announced the results for the 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 and conference call, your OCs 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. Petas. 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 State Financial Officer. The purpose of today's call is to discuss our financial results for the six-month period and quarter ended June 30th, 2023. Let's turn to slide three of the presentation to go over our income statement highlights. We are very pleased with our results for the second quarter of 2023, which are one of the best results we have ever had since Eurosis became a container-focused public company in 2018. For the second quarter of 2023, we reported total net revenues of $47.7 million and the net income of $28.9 million, or $4.15 per diluted share. Adjusted net income was $29 million, or $4.17 per diluted share. Adjusted EBITDA for the quarter was $30.6 million. This refers to the price release for the reconciliation between adjusted net loss and adjusted EBITDA. As part of the company's common stock dividend plan, Our Board of Directors declared a quarterly dividend of 50 cents per common share for the second quarter of 2023, which will be paid on or above September 16th to the shareholders on record on September 9th, 2023. The annualized dividend yield based on current share price is about 9%. evidence to our shareholders. The original share repurchase program of $20 million approved by the Board in May 2022 has been extended for another year. As of August 9, we have repurchased 396,000 of our common stock in the open market, for a total of about $8.1 million. This represents close to 6% of our total shares. Tasos will go over the financial highlights in more detail later on in the presentation. I am also pleased to announce our third annual sustainability report, which covers our 2022 environmental, social, and governance progress in achieving our sustainability goal, our commitment to responsible business practices, and our social footprint. New in this new includes input from all our stakeholders. The report is based, as usual, on the Sustainability Accounting Standards Board standards, SASB, but additional criteria have been considered, such as the Global Reporting Initiative, GRI, and the NASDAQ ESG reporting guidelines, plus the United Nations Sustainable Development. The ESG report is available under the Corporate Please turn to slide 4, where we discuss our recent acquisitions, chartering and operational developments. As previously announced on July 6, 2023, the company took delivery of its second new building vessel, motor vessel Terataki, an Echo 2800 TEU feeder container ship from the Hyundai Meepo dockyard in South Korea. The vessel is EEDI Phase III compliant and equipped with a Tier III engine and other sustainability-linked features, including installation of AMB . The acquisition was financed with a combination of loan funds and a sustainability-linked loan provided by the National Bank of Greece. Following its delivery, at a gross rate of $48,000 per day. Continuing on the Charter front, the contract for motor vessel Joanna was extended for a period of 6-8 months on a daily rate of $13,900 per day. We also reached a mutual agreement with ZIM terminate the current charters for motor vessels Rena P and Emmanuel P, while concurrently fixing the vessels on new charters for a period of 20 to 24 months at $21,000 per vessel per day. These new charters are expected to contribute $2 to $4 million in extra revenues over the same period. During the second quarter of 2023, there were no dry docks or vessels of hire. Please turn to slide 5, where you can see our current fleet profile. Eurosea's current fleet is comprised of 19 vessels on the water, which includes 12 feeder container ships and 7 intermediate container carriers, with a total carrying capacity of about 59,000 TEU, and an average age of just below 16 years. Turning to slide 6, we show our vessels under construction, which currently consist of seven, they were nine up to very recently, of new echo feeder container ships. The seven new buildings are expected to be delivered in 2024, of 1,800 TEU each. After the delivery of the seven feeder containers at new buildings in 2024, Eurosis' fleet will consist of 26 vessels and a total carrying capacity in excess of 75,000 TEU. Let's now turn to slide 7 for a graphic view of our vessels' employment schedule. for 2023, and almost 64% for 2024. This very high charter coverage at quite profitable rates for the remainder of the year, but also for 2024, suggests that we should continue registering highly profitable quarters regardless of charter rate development. Let's now turn to slide 9. to review how the six to 12 month time charter rates have developed over the last 10 years. One year time charter rates were up during the first half of the second quarter, but have declined again by about 15% compared to their highs in May, and are about 75% lower than their levels a year ago. However, they are still significantly higher than their pre-pandemic levels. As of August 4, the 6-12 month time charter rate for a 2,500 EU constainership stood at $14,750 per day, which is higher than the 10-year median rate of $9,250 per day, but lower than the 10-year average rate of around $18,000 per day. $32,000 per day, which is much higher than the 10-year median rate of $10,750 per day, but still lower than the 10-year average rate of around 25, which of course was influenced by the stratospherically high rates that we had in 2021 and 2022. Moving on to slide 10, we go over some further market highlights. During the second quarter of 2023, one-year time sales rates, as previously said, slightly improved, but things have markedly decreased by about 15%. The average rates during the second quarter of 2023 were up by 19% compared to the previous quarter, as shown in the table. By and large, there was a resilience in the market during the second quarter, and even some upward momentum in the first half of the quarter. In view of this, rates across the SAI sectors have experienced some support amid an apparent uptick in line-at-honours demand, in tandem with a short-term lack of charter vessel availability. Only lately are we seeing a further correction. The average second-half price index increased by about 1% quarter-on-quarter, but has come down a bit since then, in line with the charter market decline. Second-hand prices remain high nevertheless. The new building price index increased by about 3% in the second quarter, compared to the previous quarter. New building prices generally remain high amid cost inflation and extended yard forward cover. The idle containers flee of the fleet. The idle fleet peaked in February 2023 at 0.8 million TEU, but has been trending downward ever since. Recycling activity edged higher during the second quarter, with Debolition remains fairly subdued amid some short-term improvements in freight and charter markets, which meant that some vessels circulated for recycling were instead sold for further trading. Recycling is anticipated to continue $560 per LWT, which still is about 40% above the 2019 average. Overall, the container ship fleet has grown by approximately 4.2% YTD without accounting for idle vessels reactivation. Please note slide 11. With its latest update in July 2023, the IMF's latest however still weaker by historical standards. Global growth is projected to fall from an estimated 3.5% in 2022 to 3% in both 2023 and 2024, from previous predictions of 2.8% for 2023 and 3% in 2024. Much slowdown in global activity is therefore anticipated in the second half of 2023 and the latter supported by rate cuts in many areas around the world and the expectation that inflation will continue to fall. China's reopening appears to be uneven and volatile, even stalled, some might say. Renewed softness in the housing market, growing concerns of local government financial risks and an uncertain external environment for the export sector weigh on the economy's near-term growth plan. China's growth forecast of 5.2% in 2023 and 4.5% in 2024 remains unchanged, while growth in other emerging and developing countries is projected to defy the overall global economic slowdown. There is strong demand from India, which delivered the biggest upside surprise so far this year. with its high GDP growth in Q1 that far exceeded expectations. This was driven by strong government capex and services exports. Despite the general global slowdown, the U.S. economy is forecast to moderately grow by 1.8%, which compared to the previous IMF growth forecast of 1.6%, seems to suggest that the US can potentially avoid recession concerns in the second half of 2023. However, the IMF seems to have lowered a little bit its growth projections for the US in 2024 to just 1% on its previous 1.1% growth forecast. On the other side of the world, literally, the Russian economy is faring better than expected. to 1.5% growth for 2023, up from 0.7% in the previous quarter, despite the effect of the sanctions with Western financial markets and many export markets for Russian companies and commodities closed. For 2024, demand is expected to return to a positive trade growth level of about 3.4%. Please turn to slide 12, where you can see the total fleet age profile and container ship order book. The container ship fleet is relatively young, with most vessels under 15 years old and only 10% of the fleet over 20. This is the size in which we mostly operate. The order book as a percentage of total fleet stands at 28.3% as of August 2023. Clarkson expects new deliveries of about 9.4% of the current fleet to be delivered within this year, 10.6% next year, and 6.4% in 2025. through the first half of 2025. Then in slide 13, we also go over the fleet dates, profile and order book for ships in the 1,000 to 3,000 TEU range, as these sizes are the backbone of our operations and the primary focus of our new building program. The order book here stands at just 11% as of August 2023. According to Clarkson, new deliveries within this year are estimated at 9.4%, 5.6% in 2024 and 1.2% in 2025. Additionally, 50% of the fleet, half the fleet, is over 15 years old. Clearly, the dynamics are very favorable. in the next few years. Let's move to slide 14, where we discuss our outlook summary for the container ship market. Daily higher rates for whole-size vessels have declined since last year's highs, following a pronounced correction in the second half of 2022. There are numerous signs that the previously shielded container ship charter market is now being affected by the decreasing demand for wholesome freight. Additionally, there has been a noticeable accumulation of available tonnage in smaller feeder sizes, leading to a larger decline in charter rates for these vessels. Although the container freight index initially rebounded in April 2023, recently freight rates softened again and further declines are anticipated as record deliveries continue to be incorporated by the market participants. Presently, the index sits at a level that is 80% lower than its peak in January 2022, returning to the pre-COVID 10-year average. Container volumes fell by 2% year on year, but still remain at above pre-pandemic levels. For the remainder of 2023, there are still considerable challenges ahead. General downward pressure expected to emerge as supply growth accelerates and an increasing number of charter vessels are delivered. On the other hand, however, fleet growth could be somewhat mitigated by environmental regulations that will force some vessels to either reduce their speeds or stop trading. But it remains to be seen how economic developments will develop, especially starting from 2024. This, we believe, will essentially determine future shipping volumes and overall demand, and thus the evolution of charter rates. The energy transition continues to gain traction and will play an important role in the evolution of the vessels of the future, but also on the trading patterns within the industry. While it's evident that a shift is taking place, yet to be fully determined. One thing, though, that is becoming obvious is that the spread between saturates achieved by ecovessels over conventional ones is expected to further increase. Also, the group fleet could mitigate it to an extent any differences. Let's move to slide 15. The left chart shows the evolution of one year time charter rate to containers with a capacity of 2500 TU since 2010. One year time charter rates are far below the early 2022 peak, but are above historical levels. As previously mentioned, the current one-year time chart stands at $14,750 per day, which is a much higher and profitable level than the historical median. At the same time, the right-hand chart shows the historical range for new building and 10-year-old container ships with a capacity of 2,500 TEU. As charter rates across the container market have remained relatively buoyant in the past several months, equally resilient and stubbornly high. We believe that we are well protected against market volatility with our high-contracted revenue coverage throughout 2023 and 2024 at very healthy rates. Our liquidity build-up will allow us to comfortably take delivery of the remaining seven new building vessels whilst keeping leverage low at around 60%. It will also allow us to continue paying a significant dividend and executing on our stock repurchase program as our price continues to hover at levels below 50% of NAV. At the same time, we will continue to evaluate investment opportunities with low risk that will incrementally increase our earnings and growth potential. I will pass the floor to our CFO Tasosas Leidis to go over our financial highlights in further detail.

Thank you very much, Mr. Leidis. Good morning from me as well, ladies and gentlemen. Over the next four slides, I will give you an overview of our financial highlights for the second quarter and first half of 2023 and compare them to the same periods of last year. For that, let's turn to slide 17. For the second quarter of 2023, the company reported total net revenues of $47.7 million, representing a 1.6% decrease over total net revenues of $48.5 million during the second quarter of last year. And that decrease was the result of the lowered financial rate our vessels earned in the second quarter of 2023, as compared to the same period of last year, partly offset by the increase in the average number of vessels we own and operated in the second quarter of this year. The company reported a net income for the period of 28.9 million as compared to a net income of 30.7 million for the same period of 2022. Interest and other financing costs for the second quarter of 2023 amounted to 1.2 million, which is the result of 2.4 million of interest and final cost paid for our loans, partly offset by 1.2 million of imputed interest income as we self-financed the construction of our new buildings before the delivery, compared to 1.1 million for the same period of last year, during which we had no imputed interest income. This increase of the interest paid for our loans is due to the increased amount of debt that we carry and the increase in the weighted average of LIBOR and SOF rates that we pay in the current period as compared to the same period of last year. Additionally, it should be noted that in the second quarter of 2023, we had interest income for about 265,000 compared to almost zero interest during the same period of 2022. Adjusted EBITDA for the second quarter of 2023 was 30.6 million compared to 34.2 million achieved during the same period, the second quarter of 2022. Basic and diluted earnings per share for the second quarter of this year was $4.17 and $4.15 respectively. calculated on about 6.9 million basic and about 7 million diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $4.26 and $4.24 for last year, respectively. Excluding the effect on the income of the unrealized loss on derivatives, the amortization of below-market time charges acquired, And the vessel depreciation on the portion of the consideration of vessels acquired with below-market charters allocated to the below-market charters, the adjusted earnings for the second quarter of 2023 would have been $4.19 per share basic and $4.17 diluted, compared to adjusted earnings of $4.10 and $4.08 basic and diluted, respectively, for the same quarter of last year, making for that quarter similar adjustments. Usually, security analysts do not include the above items in their public estimates of earnings per share. That's why we're making these adjustments. Let's now look at the numbers for the corresponding six-month periods, ended June 30th, 2023 in this year, and compare it to last year. For the first half of this year, The company reported total net revenues of $89.6 million, representing a 4.5% decrease over total net revenues of $93.9 million during the same period of 2022. The company reported a net income for the period of $57.6 million as compared to a net income of $60.7 million for the first half of last year. Interest and other financial costs for the first half of 2023 amounted to 2.1 million, which is the result of 4.4 million of interest and finance costs paid for our loans, outstanding, offset by 2.3 million of imputed interest income, as I mentioned, as we self-financed the construction of our new buildings before the delivery, compared to 2.1 million interest and financing costs paid during the same period of last year, during which, again, we did not have any included interest income. Again, this year, over the six-month period, we had an interest income of about $500,000 compared to almost zero interest during the same period of last year. Adjusted EBITDA for the first half of 2023 was $56.6 million compared to $65.3 million achieved during the third half of last year. Basic and diluted earnings per share for the first half of 2023 was $8.28 and $8.25, respectively, calculated on about 7 million weighted average number of social spending, and that compares to basic diluted earnings per share of $8.4 and $8.36, respectively, for the same period of that year. Making similar adjustments to our net income for the first half, as I described earlier, that we did for the second quarter, the adjusted earnings per share for the six-month period ended June 30, 2023, which had been $7.29, $7.26 basic and diluted, respectively, compared to adjusted earnings of $7.81 basic and $7.77 diluted for the same period, the third half of 2022. Let's now move to slide 18 to review our fleet performance. We'll start our review by looking at our fleet utilization rates for the second quarter of 2023 and 2022. As usual, our fleet utilization rate is broken down into commercial and operational components. During the second quarter of 2023, our commercial utilization rate was 100%, while our operational utilization rate was 99.8%, compared to 100% commercial and 99.7% operational for the second quarter of last year. On average, 17.95 vessels were owned and operated during the second quarter of this year, earning an average time charter equivalent rate of $30,133 per day, compared to 16.46 vessels that were owned and operated in the second quarter of last year, earning on average $33,714 per vessel per day. Our vessel daily operating expenses, including management fees, averaged $7,114 per vessel per day for the second quarter of this year, compared to $7,080 per vessel per day during the same period of 2022. G&A's expenses amounted to $715 and $652 per vessel per day respectively for the two periods. If we move further down on this table, we can see the cash flow breakeven rate for the second quarter of this year, which also takes into account direct working expenses, interest costs, and loan repayments. Thus, for the second quarter of 2023, our cash flow breakeven rate was $13,837 per vessel per day, compared to $13,560 per vessel per day during the second quarter of 2022. Finally, in the last line of the table, you can see the common dividend pay expressed in dollars per day per vessel. In the second quarter of 2023, we paid the equivalent of $2,217 per vessel per day in dividends compared to $2,414 for the same period of last year. Let us now go over the same figures for the six-month period of 2023 and compare them to the same period of last year. During the first half of 2023, our commercial utilization rate was 99.1% and our operational 98.7%, compared to 99.8% commercial and 99.6% operational for the same periods of last year. On average, we own and operated 17.52 vessels during the first half of this year, earning an average time charter equivalent rate of $29,705 per day, while for the same period of 2022, the company owned and operated 16.23 vessels earning an average of $33,843 per day. Our vessel operating expenses, again, including management fees, were $7,215 per vessel per day in the first half of this year, compared to $6,867 per vessel per day for the same period of life here. DNA expenses for the two periods amounted to $727 $567 respectively. Again, looking at the bottom of this table, we can see the cash flow break-even rate for the first half of 2023, which takes into account, as I mentioned, dry docking, interest, costs, and loan repayments. And that averaged $13,993 per vessel per day in the first half of this year. And that compares to $13,993 $805 per vessel per day for the same period of last year. The final line, we saw the dividend paid, expressed in dollars per day. During the first half of this year, that amount was $2,194 per vessel per day, and that compares to $1,207 per year, the difference being due to the fact that we started paying dividends in the second quarter of last year. Let's move on and go to slide 19 to review our debt profile and our forward cash flow break-even levels. Our total debt as of June 30th, 2023 stood at about 132.8 million. On the top of the slide, you can see a snapshot of our current debt repayment profile over the next several years. We have already made 27.15 million of loan repayments in 2023. And in the remaining part of the year, we are to make another 14.8 million of loan repayments, as well as we are due to pay balloons amounting to 27 million. The latter, we are in the process of refinancing. For 2024 and 2025, our loan repayments drop to about 31 million and 35 million, respectively, including balloons. choose to do so. The average margin of our current debt stands at about 2.54%, and assuming a soft rate of about $5.36, our cost of our senior debt amounts to about 7.9%. That figure would drop to 7.60% if we accounted for the portion of our debt for which the underlying software rate has been kept. I should state that we plan to partly finance our remaining new buildings with debt. Thus, over 2024, I would expect us to assume an additional about $165 million of debt to cover about 60% of the price of the new-built investments. I would like to draw your attention to the bottom of the slide now. where we present the level and components of our expected cash break-even level for the next 12 months. We expect to have, over the next 12 months, an EBITDA break-even level of about $8,851 per vessel per day, and in total, including interest and loan repayments, a total cash flow break-even level of about $14,682 per vessel per day. Let's sum up our presentation by moving to slide 20 to present some highlights on our balance sheet. As of June 30, 2023, our assets included cash and other current assets amounting to about $51.2 million. Also, our assets included advances that we paid for our new building programs, spending at about $93.8 million. And finally, They include the book value for our vessels, which was $224.3 million, resulting in a total book value for our assets of around $394.1 million. On the liability side, our debt as of June 30, 2023, as I previously mentioned, stood at $132.8 million, representing about 33.7% of the book value for our The fair value for below-market charters acquired is about $27.3 million, accounting for another about 7% of our assets, and other liabilities of about $10 million account for another 2.5% of the total book value of our assets. However, it should be noted here that the charter-adjusted market value of our fleet is much higher than its book value. Based on our own analysis and using market transactions, charter-adapted value for our fleet and new building contracts, we estimate the value of our fleet, charter-adapted again, to be approximately $369.6 million, which translates to a net asset value for our company of about $372 million, or about $53 per share. Recently, our shares have been trading around $21 per share, thus having a gap to our net asset value, and that gap representing a good appreciation potential for our shareholders and investors. With that, I would like to turn the floor back to Aristides to continue the call. Thank you, Tarsos.

Let me open up the floor for any questions we may have.

Thank you. We'll now be conducting the question and answer session. If you'd like to ask a question today, please press star 1 from your telephone keypad, and a confirmation tone will indicate that your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Once again, that's star 1 to ask a question. Thank you. Our first question is from Tate Sullivan with Maximum Group. Please issue your question.

Good day. How are you? On slide 13, you showed a little more than 9% fleet growth this year for TU vessels, less than 3,000. Is that indicating what you indicate here to date, that roughly half of the vessels have entered the fleet so far this year, with another half? And do you have approximate numbers of the new ships entering the fleet this year, actually?

Yes, half of the vessels that were supposed to, a little bit less than half of the vessels that were supposed to enter the fleet this year have actually entered already, yes.

What have you observed in terms of chartering activity for those new builds entering the

There were quite a few ships that were quite large that had already secured employment. Even smaller ships had already secured employment. For example, our Terataki that was delivered in July, we had secured the employment since last year. And it was obviously at very high rates. A similar vessel that opened up, that was delivered to somebody else and was not chartered, was able to be fixed at around $25,000 per day for a year. The ships that are being delivered are being fixed today, but at lower rates than what was achievable last year.

I think for the previous announcement, you announced it July 25th for the new contracts for the Reina P and Emanuel P, and I think you mentioned that was with Zim. Can you mention a part of how the negotiations went for that? I mean, when I first read the headline, I was expecting lower contracts for yourself, but you did extend them for longer terms at higher rates than the previous contract. So can you give more of the situation behind those contract negotiations if you can?

Sure. I have to be very clear to you so that we don't give any wrong impression. We had no obligation to cancel the charters that we had with Siemens. There was no such request. we were told that if we wanted the vessels free, we could take them and charter them elsewhere. We looked in the market, we saw that we could get something a little bit better than what, and for longer than what we had in our ZIM charters, and very amicably we agreed with ZIM that we would cancel the charter with them, and we would fix with OOCL what we did. So everything was done very amicably and without any distress.

Great example. Do you think that kind of example will occur in the container ship market for the rest of the year? I mean, does there continue to be counterparty risk with longer-term contracts, and how do you manage that this stuff?

I think that the main counterparties are all very credible operators of SIBs. So they will stick to the charters and will perform. I don't expect us to see non-performances. Everything that will be done, if there is some rearrangement, because some lines want to reduce or others want to increase the number of ships on the charter, everything will be done amicably and commercially and without disputes.

at OOCL. Thank you.

Thank you very much, David. Our next question is coming from the line of Christopher Skate with Arctic Securities. Pleased to see your questions.

Hello, how are you? Hi, Christopher. Congrats on a great quarter. I was just wondering if you can share some detail from how you are progressing on the on the seven new bills, both in terms of employment, but also on the financing side. I mean, how much is now remaining cash tax, and how much do you expect to fund through senior debt?

On the employment side, we haven't arranged anything yet. We are in contact with various charters, but I think it's too early to fix the ships yet. So we will see closer to the delivery date how we fix them. On the financial side, Tassos can brief a little bit more. We have arranged or are pretty close to arranging the financing of the first ship that we will will be delivered in 2024, and in discussions with other financiers regarding the rest. I feel very comfortable about it, but also you can add some figures.

Chris, we have about 280 million of vessel payments to make. The value of the vessels that were delivered is about 280 million. We have made about 60 million advance payments against that through equity. We have the equity already built in in our numbers that we will be able to cover with our own cash flow generation. As I mentioned earlier, we expect to assume incremental debt of around $165 million, give or take, to finance the vessels. So 165 million debt, about 60 we made, and we're gonna put another 60 million of equity to cover, and another 40 million of equity to cover the payments.

So 165 and then remaining 40 through cash on hand? That's correct. Okay, great. So with that, I mean, it's quite the comfortable level and it will definitely build a lot of cash over the coming coming quarters, and you mentioned in your presentation and results that you are building a significant war chest in order to pursue investment opportunities. So I just wondered, can you elaborate a bit on what you mean about that, and are we starting to see any opportunities out there in the market on secondhand transactions that might be interesting?

Sure. As I said in the presentation, our cash flow build-up is sufficient to easily finance the new building program that we have. It is sufficient for us to continue paying dividends in the foreseeable future that are significant. 10% yield, and, of course, to continue acting on our stock repurchase plan. But in addition to all that, the liquidity we are building, and we currently have, I think, about $50 million, is sufficient to also look at the potentially new At this stage, we would not buy something speculatively. We would only invest if we can find a deal that is backed by a charter that will bring the residual value of the vessel at the end of the charter at extremely low levels. So that is the strategy, and we feel comfortable about its implementation. Chris. Chris. Thank you.

Thank you.

That's it for me.

Thanks, Chris. Thank you. Our next question is from the line of Clement Mullins with Value Investors Edge. Please proceed with your questions.

Good morning. Thank you for taking my questions. I wanted to start by asking about the IGN Express. Could you provide an update on how the arbitration against the previous charter is going?

Yes, as we said in our previous call, in the previous quarter, we have assumed that we will recover that arbitration, and unfortunately it probably seems that we are moving along that line right now. The charter has disappeared. We think he is winding down the business. We can't find him. We can't locate the assets. But we continue trying to do that. So hopefully we will find something. But as we said, our projections suggest that this will be a loss that we have incurred already. So if there is any surprise, it can only be a positive surprise because we've planned for the worst.

Sounds good. You've pursued a very balanced approach to capital allocation by ordering new bills, distributing dividends, and repurchasing shares. Despite that, the market is still valuing the company at a significant discount to NAV, so share repurchases continue to make a lot of sense. Are tender offers something the board has or would consider, or do you prefer to stick with share repurchase in the open market?

I think that share repurchasing in the open market is the way that we want to continue. It is, you know, tender offer usually has to be made at a higher price, and we think that, you know, by implementing gradually the strategy with the stock repurchases, we are doing it more economically.

Makes sense. That's all from me. Thank you for taking my questions, and congratulations for the quarter. Thank you very much. Bye.

Thank you. At this time, we've reached the end of our question and answer session. I'll turn the call over to Aristides Pizas for closing remarks.

Thank you all for participating in this call, and we will be back with you in three months' time, hopefully with good results again.

Thanks, everybody.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.