Euroseas Ltd.

Thank you for standing by, ladies and gentlemen, and welcome to EuroC's conference call on the first quarter 2024 financial results. We have with us Mr. Aristoteles Piedas, Chairman and Chief Executive Officer, and Mr. Tassos Asselides, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. 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 call is being recorded today. Please be reminded that the company announced the results with a press release that has been publicly distributed. Before passing the floor over to Mr. Pitas, I would like to remind everyone that in today's presentation and conference call, EROCs will be making forward-looking statements. These statements are within the meanings of the federal security 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 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. And now I would like to pass the floor over to Mr. Pitas. 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 Dr. Soslidis, our chief financial officer. The purpose of today's call is to discuss our financial results for the three-month period ended March 31, 2024. Let's turn to slide three of the presentation to go over our income statement highlights. For the first quarter of 2024, we reported total net revenues of $46.7 million and a net income of $20 million, or 2.87 cents per diluted share. Adjusted net income for the quarter was $18.5 million, or $2.66 cents per diluted share. Adjusted EBITDA for the period was $24.6 million. The reconciliation of the adjusted net income and adjusted EBITDA to net income is shown in the press release. Our CFO, Tasos, will go over our financial highlights in more detail later on in the presentation. As part of the company's common stock dividend plan, our board of directors declared again a quarterly dividend of $0.60 per common share for the first quarter of 2024, which will be payable on or about June 21, 2024, to shareholders of record on June 14. The annualized dividend yield, based on the current share price, is again above $0.06. This is the ninth consecutive quarter of paying meaningful dividends. As of May 23, 2024, we had also repurchased 400,705 of our common stock in the open market for a total of about $8.2 million, since the initiation of our share repurchase plan of up to $20 million, which was announced in May 2022. We will continue to use our sales repurchase program at management's discretion, depending on our stock price, to enhance our ability to drive long-term shareholder value. Please turn to slide 4, where we discuss our recent sales and purchase, new building, chartering and operational developments. On the S&P front, we have agreed to sell Motovessel Astoria, a 2,800 TEU feeder container ship vessel built in 2004 for approximately $10 million to an unaffiliated party. The sale capitalises on the current strong asset prices and we will log a significant profit next quarter when the deal closes. The vessel is expected to be delivered to her new owners by mid-June 2024. The delivery of our fourth new building vessel from the series of nine took place on April 25th. Motor vessel Leonida Z, a new building fuel efficient 2,800 TEU feeder container ship, was chartered with Hapac Lloyd, one of the largest liner companies, for a period of about two years at a daily rate of $20,000 a day. This charter is expected to contribute about $9 million of EBITDA for the contracted period and increases our 2024 charter coverage to about 88%. Moreover, the delivery of the fifth vessel took place on May 13th, when motor vessel Monica, a fuel-efficient 1800 TEU feeder vessel, was chartered for a minimum period of 10 to a maximum period of 12 months, at the option of the charterer, at a daily rate of $16,000 per day. Continuing on the charter side, our Aegean Express, our smallest and oldest vessel, was fixed for a minimum period of seven to nine months at $8,000 a day, starting from March 23rd. after a three-day wait, while motor vessel Synergy Antwerp was fixed for a minimum of 11.5 months to a maximum of 14 months at 26,500 per day, starting immediately upon delivery from the shipyard, where it underwent its normal dry docks and retrofits. And this new charter starts from April 2, 2024. Finally, Motovessel Joanna was just extended for a minimum of two to maximum of three months with current charters at $13,500 per day. Regarding dry dockings, our Motovessel Synergy Auckland underwent its scheduled special survey for approximately 18 days. Our motor vessel Marcos successfully completed its scheduled 31-day dry dock, which included retrofits worth about $1.8 million. As in the case of the recent retrofit of motor vessel Synergy Busan, we cooperated closely with the Charterer to fund the modifications of the vessel and share the economic benefits from the improved performance. The Charter has contemporaneously declared the option to extend the Charter by an additional minimum seven months until August 2025. The added retrofits resulted in an improvement of consumption in the commercial speed range by about 25%. As per our agreement with the charters, if the vessel is employed after the current charter period, then the owners will refund part of the cost to the charters, up to a maximum of 50%. The motor vessel Synergy Antwerp, as I said, also successfully completed its scheduled 30-day drive. As part of our efforts to minimize our carbon footprint, C2 underwent a $1.25 million retrofit. Next, please turn to slide 5 for an update on our current fleet profile. Our current fleet is comprised now of 22 vessels in the water, the 15 feeder container ships and 7 intermediate container carriers, with a total carrying capacity of just under 66,500 TEU and an average age of 15 years, rated by TEU. Turn to slide 6. Here we show our four remaining vessels under construction with deliveries expected throughout 2024. The four new buildings have a total carrying capacity of 9,200 TEU and they include two 2,800 TEU vessels and two 1,800 TEU vessels. After the delivery of its four remaining FIDE container ship new buildings in 2024, Eurus' fleet will consist of 26 vessels with a total carrying capacity of about 75,000 TEU. Let's now turn to slide 7 to see the vessel employment graphically. As you may see, we have a very strong charter coverage throughout the next two years, with about 88% of our fleet being fixed for 2024 and about 32% for 2025. Our significant charter coverage and profitable rates for the remainder of the year suggest highly profitable quarters that will further enhance our fleet liquidity throughout 2024 and 2025. Let's turn to slide 9 for a broader market review, starting with the development of the 6-12 month time charter rates over the last 10 years. During the first quarter and extending into mid-May 2024, container ship charter rates have shown a robust recovery, surging significantly from the low levels at the start of the year across all segments. As of May 17, 2024, the six- to 12-month charter rate for a 2,500 TEU container ship stood at $19,500 per day, which is higher than the historical median of $9,200 per day, about double, and well supported when compared also with a 10-year average of about $15,500 per day. The comparisons to median and average rates are similar across the smaller and larger container subsizes as well. Moving on to slide 10, we go over some further market highlights. As mentioned, one-year time charter rates improved across all segments in the first quarter, and charter rates have increased by approximately 73% to date since the low of December 21, 2023. The current increase is mainly attributed to the tensions in the Red Sea and consequent route diversions. The full impact of rerouting is yet to be seen, though, and these geopolitical issues are still evolving. As said before, charter rates since the end of the year have increased by over 70%. Average daily rates increased by 26% over the average of Q4 2023 during the first quarter of 2024. And that can be seen in the table below across all container segments. The vast increase in rates during May 2020 24 is primarily due to the routing from the Red Sea. The average second-hand price index saw an increase of about 11% during the first quarter of 2024 compared to the fourth quarter of 2023. While prices, of course, continue to lag significantly behind the peak levels seen in 2022, they are above the average levels observed before the COVID-19 pandemic. The new building price index increased by about 7% in the first quarter compared to the previous quarter. New building prices continue to stay elevated due to cost inflation and extended yard forward cover. Although there has been some easing in new-build contracting from the exceptional high levels witnessed during COVID-19, it remains relatively firm amid continued appetite from liner companies with excess cash renewing their fleets with alternative fuel vessels. As of May 6, 2024, the idle fleet, excluding vessels under repair, stands at just 190,000 TEU, accounting for 0.7% of the total fleet. This marks a decline from its peak of about 800,000 TEU just one year ago, with a downward trend observed since then. In 2024, up to now, 23 vessels accounting for 33,000 EU have been scrapped. We expect demolition activity to increase slightly in the remainder of 2024 after a number of quieter years which were due to the higher charter rates. Although the current geopolitical disruptions may continue to limit scrapping at the end. In the first quarter of 2024, scalping prices softened slightly to approximately $540 per light-year return, remaining, though, above the average observed in 2019 by about 30%. Overall, the fleet continues to grow, having expanded by about 4% year-to-date, without accounting, of course, for idle vessel reactivation. Please turn to slide 11. The IMF's latest update from April 2024 projects that the global economy will see another year of slow yet steady growth, raising the forecast from 3.1% to 3.2% in 2024. This growth rate is expected to continue into 2025. This is largely due to a sizable improvement in the economic outlook for the United States, offset by a more modest slowdown in emerging and developing economies. The forecast for the next five years is at its lowest in decades at 3.1%. The global economy has been surprisingly resilient despite significant central bank interest rate hikes to restore price stability. Indeed, global inflation is declining steadily and is projected to lower from 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with the advanced economies returning to their inflation targets sooner than emerging markets and developing economies. Now anticipate that the three Federal Reserve rate cuts that were projected by the end of be reduced to 2 or 1 due to this persistent inflation. During this quarter, the IMF upgraded significantly Russia's 2024 growth forecast to 3.2 percent from the 2.6 percent projected in January 2024, due to the continued strong oil exports amid higher global oil prices, despite the price-cut mechanism imposed by Western countries. as well as due to strong government spending and investment related to war production, along with higher consumer spending in the tight labor market. The IMF also upgraded RASA's 2025 growth forecast to 1.8% from 1.1%. It seems that the Western sanctions are not working. For shipping, we continue to monitor China's economy closely, which is relatively to the past struggling by the enduring downturn in its property sector. The Chinese economy is focused to grow by just 4.6% in 2024 and 4.1% in 2025. China's economic woes may further intensify due to trade tensions in an already weakened geopolitical environment, and therefore stability may take even longer to be restored. On a more positive note, though, growth in India is projected to remain strong at 6.8% in 2024 and 6.5% in 2025, with robustness reflecting strong domestic demand and rising working-age population. Similarly, the ASEAN 5 economies are expected to grow quite strongly, thus assisting shipping. According to Plaxo's forecast, container ship trade demand is expected to significantly increase from the 5.5% which was previous projections to 9.2% now. However, a decrease of 2.4% in trade demand Forecasts assume about half a year more of disruption to container trade due to Red Sea rerouting, uplifting TEU mile demand to about 11% currently and 5% overall for the full year. are less severe, but demand estimates have allowed for some additional trans-Pacific trade volumes being shipped to the U.S. West Coast rather than the East Coast, given restrictions on the Panama Canal transit. This is generally, though, a much smaller impact than the Red Sea disruption. And, of course, a longer-than-assumed crisis in the Red Sea will likely result in significant higher demand growth. 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 years old. The largest percentage of which, though, lies within feeder vessels, suggesting high potential recycling for this type of ship. As of April 24, 2024, the order book as a percentage of fleet stands at around 21%, reduced from close to 30%, which we saw last year. Turning on to slide 13, we also go over the fleet age profile and order book for ships in the 1,000 to 3,000 TEU range. These sizes of vessels are the backbone of our operations and the primary focus of our new building program. The order book here stands at 6.8% as of May 24, 2024. According to Clarkson's, new deliveries are projected to be approximately 8% this year, 1.9% in 2025, and 0.7% in 2026 and beyond. suggesting that after 2024 we will have minimal deliveries in 2025 and 2026. With over 50% of the fleet being over 15 years old, these favourable fundamentals suggest an anticipated reduction in fleet size in the coming years. Let's move to slide 14 where we discuss a route look summary for the container ship market. The container shipping markets have significantly strengthened since last December, due to the rerouting of vessels away from the Red Sea and the Gulf of Aden. The rerouting has had a substantial impact on the supply-demand balance, as most vessels on affected east-west services are now taking longer alternative routes. Consequently, demand for ships has increased, boosting fleet utilization by more than 10%. Freight rates have surged and charter rates have significantly risen and continue to climb, indicating a hold to the previous softening trend, at least for now. The context index has increased by 73% since December 21. For the remainder of 2024, we anticipate a strong However, the substantial new vessel supply is expected to gradually take over and lead to lower rates. Despite this, the potential risk of a full closure of the Strait of Hormuz, although it has minimal impact on containers, and the ongoing disruption in the Suez Canal and the Red Sea continue to affect vessel activity in the shipping markets. The Red Sea security crisis shows no signs of resolution, and the Israel-Iran crisis could further exacerbate the situation. If geopolitical tensions ease, we anticipate a softening in container freight and charter markets, driven by the accelerated capacity growth. Conversely, if these tensions persist, the extended period of vessel rerouting would support higher charter rates. Looking ahead to 2025, if geopolitical issues are resolved, supply and demand fundamentals would likely lead to a softening of the market. The extent of this softening will depend on the development of the geopolitical situation, but if conditions normalize, the significant fleet expansion could result in a substantial decline. In any event, market conditions will remain challenging. Market performance will be sensitive to capacity management, vessel speeds, and various inefficiencies such as congestion that could alleviate some of the pressure. Also, the energy transition has continued to gain momentum in the container ship sector. Whilst it is evident that a shift is taking place, the long-term outcome remains uncertain. One thing is sure, though. The spread between become more sensitive to greener transport options. Let's move to slide 15. The left chart shows the evolution of one-year time-charter rates to containers with a capacity of 2,500 TEUs since 2013. One-year time-charter rates are far below their peak in early back lost ground to stand at $19,500 per day, above historical average and median rates. The right-hand chart illustrates a historical range for new-build and 10-year-old second-hand containers, each with a capacity of 2,500 EU. Recent data shows a rebound from year-end prices, with values still remaining significantly higher than both the historical average and median levels. New building prices for containers of this size currently stand at $41.25 million, while the historical average and median price for new buildings of this size for the last 10 years is $33.7 and $31.5 million, respectively. For the 10-year-old second-hand vessels of this size, prices currently stand at while their respective historical average and median prices are approximately $17 million and $13 million respectively. Given these persistently elevated prices, we are hesitant to pursue further acquisitions unless they can be paired with charters that will reduce residual values at expiration to below the historical median. And with that, I'll pass the floor to our CFO, Tasos, to go over the financial highlights in further detail.

Thank you very much, Aristides. 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 first quarter of 2024 and compare those results to the same period of last year. For that, let's turn to slide 17. For the first quarter of 2024, the company reported total net revenues of 46.7 million, representing an 11% increase over total net revenues of 41.9 million during the first quarter of 2023. We reported a net income for the period of 20 million as compared to a net income of 28.8 million for the first quarter of last year. Interest and other financing costs for the first quarter of 2024 amounted to 3.2 million as compared to interest and other financing costs of 2 million for the same period of 2023. This increase is due to the increased amount of debt we carry and the increase in the soft rates of our bank rates in the current period as compared to the same period of last year. In the first quarter of 2024, our interest figures are reduced by the capitalized imputed interest of 1.4 million earned due to the self-financing of the pre-delivery payments for our new building program as compared to 1.1 million of imputed interest during the same period of last year. Finally, interest income in the first quarter of this year amounted to compared to 0.23 million in the same period of 2023. Adjusted EBITDA for the first quarter of 2024 was 24.6 million compared to 26 million achieved in the same period of last year. Basic and diluted earnings per share for the first quarter of this year were $2.89 and $2.87 respectively, calculated on approximately 6.9 million basic and 7 million diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $4.11 and $4.10 for the first quarter of 2023, calculated in turn on approximately $7 million basically diluted to weighted average number of shares outstanding. Excluding the effect on the income for the quarter of the unrealized loss or gain on derivatives, the amortization of below-market time charges acquired, the depreciation charged due to the increased value of vessels acquired with below-market time charges, and for the first quarter of 2023, the gain on a sale of a vessel, The adjusted earnings per share for the quarter ended March 31, 2024 would have been $2.67 and $2.66 per share, basically diluted respectively, compared to adjusted earnings of $3.10 and $3.09 per share, basically diluted respectively for the first quarter of 2023. Usually, security analysts do not include the above items in the published estimates of earnings per share. I would like to mention here that during the first quarter of 2024, we had three dry dockings, two of which included, as I already mentioned, retrofits in order to improve the carbon footprint and future airing capacity of the vessels. These dry docks resulted in increased dry docking expenses for the period, and loss of proportionally more revenue days as compared to either the first quarter of last year or the previous quarter. These investments influence obviously our earnings per share this quarter, but will be reversed in subsequent periods. Let's now move to slide 18 to review our fleet performance. We will start our review by first examining the utilization rates during the first quarter of this year as compared to the previous year. As usual, our fruit utilization rate is broken down into commercial and operational. During the first quarter of 2024, our commercial utilization rate was 99.8%, while our operational utilization rate was 99.9%, compared to 98.1% commercial and 97.6% operational for the first quarter of last year. On average, 19.6 vessels were owned and operated during the first quarter of 2024, earning an average time charter equivalent rate of $27,806 per vessel, compared to 17.1 vessels in the same period of 2023, earning on average $29,231 per day. Our total daily operating expenses, including management fees, G&A expenses, but excluding direct working costs, were $7,963 per vessel per day for the first quarter of this year, compared to $8,000 and $74 per visit per day for the first quarter of 2023. If we include our interest expenses, direct working expenses and loan repayments, our cash flow break-even rate per day during the first quarter of 2024 was $17,171 per day versus $14,160 during quarter of last year, the difference being due, as I mentioned earlier, to the increased dry-drying expenses during the quarter. Finally, if we look at the very last line of this slide, we can see the common dividend expressed in dollars per day per vessel that we paid in the two periods. For the first quarter of 2024, that amounted to about $2,328 per version per day, while for the same period of last year, it amounted to $2,271 per version per day. Let's now move to slide 19 to review our debt profile and our forward cash flow break-even level. As of March 31st, 2024, our total debt amounted to approximately 148.6 million. The chart at the top left of the slide displays our current debt repayment schedule for the next four years. 9.4 million in the first quarter of this year, and we expect to make an additional 25.7 million in the remaining of the year for a total of about 35 million. In 2025, our projected loan payments are around 19.9 million, along with balloon payments of 17.6 million. While in 2026, our loan repayments are expected to amount to about 13 million with no balloon payments due. Please note that these figures include repayments from the two loans we drew in the second quarter of 2024 to partly finance the acquisition of our recent deliveries, Moniva Z and Monica, from our new building program. They do not include repayments for approximately another 100 million of debt we expect to assume to partly finance the next four remaining new buildings from our new building program. A few words now regarding the cost of our debt as of the end of the last quarter. The average was 2.29%, and assuming a software rate of around 5.31%, the cost of our senior debt as of March 31st was approximately 7.6%. If we further include the savings from certain interest rate swaps we have for a portion of our debt, The overall cost of our debt is reduced to about 7.34%, as approximately 13% of our debt carries a base soft rate of around 3.4%. I would like to draw your attention now to the bottom of this slide, where we present the level and components of our expected cash flow breakeven for the next 12 months, and show various cash flow breakeven levels. First, our EBITDA breakeven level is $7,645 per vessel per day. If we add to that interest, expenses, and loan repayments, our overall projected breakeven level over the next 12 months is expected to be around $13,653 per vessel per day. Let's sum up now our presentation of the financial figures. by moving to the next slide, slide 20, to review some highlights from our balances. Our assets mainly include cash and other current assets, advances for vessels under construction, and of course our vessels in the water, their book value. As of March 31st, 2024, we had cash and other current assets amounting to about 70.2 million. advances that we paid for our new building program of about 87.7 million, and vessels with a book value of around 308 million, resulting in a total book value for our assets of about 466 million. On the liability side, our debt, as I mentioned, as of March 31st, stood at 148.6 million, which represents approximately 32% of the book value for our assets. We had also other liabilities, like the fair value of our below-market acquired charters, representing about 1.4% of our assets, and other liabilities totaling about 20.4 million, or 4.4 of our total assets. resulting in a net book value for our shareholders of about $291 million or about $41 per share. However, I think it is important to highlight here that the market value of our fleet significantly exceeds its book value. We estimate that the charter-adjusted value of our fleet to be in the range of 390 to 395 million, which translates to a net asset value for the company of 385 to 390 million, or around 54 to 55 dollars per share. Our closing price yesterday was just under 37 dollars, a level at a significant discount to our NAV, and thus representing a considerable appreciation potential for our shareholders and investors. With that, I'd like to turn the floor back to Aristides to continue the call.

Thank you, Tasho. Let us now open up the floor for any questions.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question is from Tate Sullivan with Maxim Group. Please proceed.

Thank you. Good day. Starting with the cash commitments for the new builds yet to be delivered and the two that were already delivered this quarter, you said you're adding $100 million, I think I heard, in debt to finance those new builds. What's the remaining new build commitment or the payment schedule?

The remaining, I think, I can make a quick estimate. I believe we have... We have paid about 87. I think it would be roughly about 20 million. I can get you a more exact number, but I think roughly about 20 million would be the equity commitment.

Okay, so a total of 120. Okay, okay. Thank you. And then for the contracting... the new builds? And then since you already, you contracted the Monica already for $16,000. And then can you talk about the Stephania K? Do you still expect to get that before the end of the quarter? Should we expect a similar new build rate? Or if you could decide to go longer term, could it be lower than that $16,000 daily rate?

I think that we will be able to fix something which is very similar to this level. We would like to fix around a year's time. We will see. We are talking with some charters, and we will know relatively soon.

And just logistically, you start to get paid on the contracts for new builds right when they exit? And then to toss this for the financing for the new builds, thank you, RC. Will you secure the financing upon delivery, or will you get financing for the installment payments for the remaining? How have you managed that?

We finance, we pay the installment payments ourselves, and we arrange delivery financing. Usually we arrange the financing of the vessels and delivery a month or more in advance. For example, the next two vessels that we expect to take delivery of are already financed, as we announced already. The last two, we haven't completed our financing arrangements yet. Okay.

Excellent. Thank you very much.

Thank you, Tate.

As a reminder, there's star 1 on your telephone keypad if you would like to ask a question. Our next question is from Christopher Ski with Arctic Securities. Please proceed. Good morning. How are you?

Good morning. We're fine. Thank you. Thank you for taking the questions. I was wondering if you could provide some call on... more color on the ongoing transfer discussion with regards to the open vessel days in 25 and into 26. Are you seeing a lot of interest for forward fixing by liners? And with regards to that, has the duration on these discussions changed in recent months? Are you seeing sort of upside for the longer transfers now that spot rate has bounced back? Thanks.

Yes. We currently don't have many ships opening up soon, other than this new building vessel that will take delivery in about a month and a half time. So there's not too much to fix at this point. The market, though, is definitely improving. We've seen that we fixed our 2,800 TEU ship at around $20,000 a day about a month ago for two years. And now we've seen similar ships being fixed at $25,000 a day. So the market is firming up. Periods available are increasing. And there is a continuous increase in the market. How long this continues is very difficult to say. The liners would fix ships that open up within the next couple of months, but they wouldn't offer anything really competitive for ships opening up six months from today, and therefore we're not really active in trying to find something today.

Okay, thanks.

And our next question is Tate Sullivan with Maxim Group. Please proceed.

A follow-up. Sorry. Thank you. You announced the sale of Astoria in April for $10 million. The 20F indicated a cost of the repairing value of $3.95. Did that change, or are there other considerations for the implied gain on that sale for this current quarter?

I think that would be...that's correct. The difference of the two minus commission expense or whatever would be the implied capital gain on sale. Okay. All right.

Thank you. Thank you. Sure. As a reminder, this is Star 1 on your telephone keypad. If you would like to ask a question, we will pause for a brief moment to see if there's any follow-up questions. Okay, and we do have a follow-up from Christopher with Arctic Securities. Please proceed.

Hi again. Can you just comment on what you're seeing in terms of some interests on potential divestment? I mean, you saw the one in April as previously mentioned. Are you considering to reduce... of exposure or reduce your feet by divesting the vessel?

We are considering what to do with the elder vessels as the charters expire and we haven't taken any decisions yet but of course the elder vessels which initially we thought that we would be needing to scrap at the end of the lucrative charters that we have secured for all of them. Today the market is better, so we are considering the options that we have of reselling them or keeping them and rechartering them, and we will develop our strategy as things move on.

Okay, good. And it has a very useful life. What do you see as a typical useful life on these vessels now?

Well, technically, even though we have the issues with the CII and the EXI and all these new requirements, technically the ships can still easily last till the 25th year. And by sailing at a little bit slower speeds, they do satisfy the requirements. So it's more of a commercial decision to decide what to do with them rather than the technical decision. So that means that if charter rates are satisfactory, we can easily keep them for longer.

Okay, perfect.

We have reached the end of our question and answer session. I would like to turn the conference back over to Mr. Pitas for closing remarks.

Well, thank you all for listening in to our results of this quarter. We will be back to you in three months' time. Thank you. Bye. Thanks, everybody.

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