VictoryShares International Free Cash Flow Growth ETF

Thank you for standing by, ladies and gentlemen, and welcome to the Grindrott Shipping Holdings LTD conference call on the first, second quarter, and first half 2021 financial results. We have with us Mr. Martin Wade, Chief Executive Officer, and Mr. Stephen Griffiths, 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-answer session, at which time, if you wish to ask a question, please press star and 1 on your telephone keypad and wait for an automated message stating your line is open. I must advise you that this conference is being recorded today. We now pass the floor to one of your speakers today, Mr. Wade. Please go ahead.

Thank you, Operator. Welcome, everyone, and thank you for joining our call for the first quarter, second quarter, and first half of 2021. Let me please refer you to slide number two with the forward-looking statement disclaimer. On this call, we will make certain forward-looking statements, including statements regarding our future financial and operating performance. These statements include information regarding future time charter contracts, outlooks for the dry bulk and tanker markets, and other operating matters. These statements are based on the beliefs and expectations of management as of today. Our actual results may differ materially from our expectations, Investors should read carefully the risks and uncertainties described in the slide presentation and in today's press release, as well as the risk factors included in our annual report and our other filings with the SEC. We assume no obligation to revise or update forward-looking statements, whether as the result of new information, future events, or otherwise, except as required by law. In addition, during this call, we will be discussing certain non-GAAP financial measures For additional disclosures relating to these non-GAAP financial measures, including reconciliation to the most directly comparable GAAP measures, please see yesterday's press release and pages 24 and 25 of the slide deck, which is posted on our website and our filings with the SEC. Please turn to slide four, the first quarter, second quarter, and first half of 2021 financial highlights. Financial results for the second quarter of 2021 increased compared to the previous year due to favorable market conditions. Gross profit increased to $34.3 million in the second quarter of 2021, $1.8 million in the second quarter of 2020, while adjusted EBITDA in the second quarter of 2021 increased to $40.7 million compared to $9.2 million from the previous year. Net profit attributable to owners of the company increased to $19.8 million in the second quarter of 2021 from a loss of $11.8 million in the second quarter of 2020, while profit per share, EPS, was $1.02 in the second quarter of 2021 compared to a loss per share of $0.62 in the previous year. For the first half, gross profit was $48.2 million. Adjusted EBITDA was $62.5 million, while net profit attributable to owners of the company was $22.1 million. Finally, profit per share was $1.15 in the first half of 2021. Can we please now turn to slide five to look at operational highlights in the second quarter of the year? We sold the 2009 built small product stanker, the Breeder, for a gross price of $6.8 million, delivered to the buyers on April the 14th, 2021. We also sold the 2013 built medium range tankers Leopard Moon and Leopard Sun for a total gross price of $42.8 million with deliveries to the buyers on April the 12th and April the 20th this year. On May the 7th this year, the United Kingdom Upper Tribunal found in our favor with respect to a previously disclosed tax dispute with Her Majesty's Revenue and Customs, HMRC. HMRC decided not to appeal the decision, which prompted the release of $2.4 million in tax provisions that had been recorded in respect of such dispute in prior periods. On the 9th of May, we repaid the approximate $25.8 million remaining outstanding amount on the senior secured credit facility with an affiliate of Bain Capital Credit. On June the 28th, 2021, we announced our transition to a quarterly financial reporting from semi-annual reporting. During the second quarter, we also purchased a combination, a combined total of 38,467 ordinary shares in the open market on the NASDAQ and the JSC at an average price of $8.46 per share. Now, can we please turn to slide six to discuss recent developments? On July the 21st, the group entered into an agreement to acquire the remainder of IBS bulk held by Bain for a total consideration of $46.3 million, comprising of $37.2 million for the ordinary equity shares and $9.1 million for the preference shares. The purchase price was based on appraised values as of May 13th, 2021, and the IBS bulk balance sheet as of April the 30th, 2021. The agreement with Bain is subject to customary closing conditions with closing to occur no later than September the 30th, 2021. On the 17th of August, Grinrod Shipping entered into an agreement to purchase the 2019 Japanese-built Ultramax Bolt Carrier, IVS Phoenix, which we currently charter in from its owners for a price of $23.5 million, which we believe reflects a significantly reduced price per relative to management's estimate of the fair market value of the vessel due to the early termination of the prevailing charter agreement. In order to finance the acquisition, we have simultaneously entered into a financing arrangement with separate Japanese owners on attractive terms for a gross amount of $25 million, whereby the company will bare boat charter the vessel back for a period up to 15 years and has the right, but not the obligation, to acquire the vessel after the first two years of the charter. Transactions are expected to close by the end of September 2021, while the vessel will remain chartered in on the original terms until closing. Now can we please turn to slide seven, where we will go over our new dividend and capital return policy. Commencing from the quarter ending September 30th, the company intends, subject to operating needs and other circumstances, to return approximately 30% of its adjusted net income. This will be adjusted for extraordinary items to shareholders through a combination of quarterly dividends and or share repurchases. The company intends to pay a minimum quarterly base dividend of three US cents per share and an additional variable component that will consist of additional dividends and or share repurchases. The timing and amount dividend payments will be determined by our board of directors and could be affected by various factors, including our financial results and earnings, restrictions in our debt agreements, required capital expenditures, and the provision of Singapore law affecting the payment of dividend to shareholders and other factors. I would like to reiterate that our key policy focus is to create a simple, transparent, sustainable capital return policy that allows the company to retain significant cash flow to further strengthen the balance sheet and pursue growth, while rewarding shareholders with material dividends and or share repurchases in times of market strength. Now I'll pass the floor over to Steve Griffiths, our Chief Financial Officer, who will go over the financial highlights and performance for the second quarter of 2021. Steve. Thank you, Martin.

Focusing on some key metrics for the second quarter compared to the first quarter, gross profit increased to $34.3 million. for the three months ended June 30th, 2021 from 13.8 million for the three months ended March the 31st, 2021. Profit attributable to owners of the company for the three months ended June the 30th, 2021 increased to 19.8 million or $1.02 per share from 2.4 million or 12 cents per share for the three months ended March the 31st, 2021. Now looking into the first half figures, gross profit was $48.2 million for the six months ended June the 30th, 2021, while profit attributable to owners of the company for the six months ended June the 30th, 2021 was $22.1 million or $1.15 per share. And now turning to slide 10, the company was able to materially enhance our cash and liquidity during the first half, while simultaneously repaying over $66 million debt. With net debt reduced to $144 million as of June 30, 2021, we believe the company is well positioned to pursue its expected growth and capital return strategies. On slide 11, the company spent considerable effort over the last 12 months to refinance or redeem all of our upcoming maturities, partly through the timely sales of our tankers. Now, limited debt maturities until 2025, combined with a conservative amortization profile, provide the company with balance sheet flexibility going forward. Let's turn to slide 12. We will now briefly discuss results in the dry bulk business for the second quarter of 2021. In the dry bulk business, handy size TCE per day was $18,104 per day for the three months ended June 30th, 2021, and $5,852 per day for the same period in 2020. Supermax Ultramax TCE per day was $21,916 per day for the three months ended June 30, 2021, compared to $7,676 per day for the same period in 2020. As of August 16, 2021, we have contracted approximately 1,326 operating days at an average TCE of $25,205 per day, for our handy sizes and approximately 1,686 operating days at an average TCE of $30,666 per day for our SuperMaxes. The average long-term chartering cost per day for the SuperMax Ultramax fleet for the second half of 2021 is expected to be approximately $12,883 per day. The slide also provides figures for Q1 and the first half of 2021. Now turn to slide 13. The scale of the rise of the dry bulk freight rates thus far in 2021 is easily demonstrated versus our historical results. During the first half, approximately 90% of our fleet was predominantly trading either on index link cargo contracts, short-term time charges, or in the spot markets. leaving the company exceptionally well positioned to take advantage of the strong freight rate environment. Every $1,000 change in TCE per day equated to 5.4 million of TCE revenue during half one 2021. And that's for the core fleet. Now turning to slide 14, this slide shows the own fleet cash break-even analysis for the first half of 2021. Long-term chartering breakeven was $13,850 per vessel per day, and core dry bulk breakeven was $11,630 per vessel per day. The cash breakeven rate per day includes operational expenses, net G&A, interest expense, and debt repayment. With that, I would like to turn the call back over to Martin.