VictoryShares International Free Cash Flow Growth ETF

Thank you for standing by, ladies and gentlemen, and welcome to Green Rod Shipping Holdings LTD conference call on the first quarter 2022 financial results. We have with us Mr. Stephen Griffiths, Interim Chief Executive Officer and Chief Financial Officer, and Mr. Carl Ackerley, Chief Operating 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 the automated message advising 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. Griffiths. Please go ahead.

Thank you, Operator. Welcome, everyone, and thank you for joining our call on the first quarter 2022 financial results. I'm also pleased to welcome Carl Ackerley to the call, who leads our commercial activities. Carl has spent over 10 years at Grinrod and plays an integral part of our chartering and operations. We look forward to his insights on the dry bulk market going forward. 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 bog 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 this slide presentation and in yesterday'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 a 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 gap measures, please see yesterday's press release and pages 23 to 25 of the slide deck, which is posted on our website and our filings with the SEC. Please turn to slide four for an overview of our first quarter 2022 financial results. After a transformational year in 2021 for Brynrod Shipping, in which we enjoyed record financial results for the full year overall, the company has enjoyed a historically strong start to 2022. For the first quarter of 2022, our gross profit, adjusted EBITDA, and adjusted net income increased materially year over year, reaching $40.7 million, $50.2 million, and $29.8 million, or $1.60 per ordinary share, respectively. As of March 31, 2022, we had cash and equivalents of $106.5 million and restricted cash of $6.6 million, which was similar to the year end, despite the strong results, as there was a working capital increase due to the timing of certain receivables collected shortly after the quarter end. I will go into more detail on our financials later in this presentation. Please now turn to slide five to look at our recent developments. On April the 14th, 2022, we entered into a contract to sell the 2016 bulk medium range product tanker, Matupu, for $30 million. This will be full cost. In anticipation of the sale, we have exercised the purchase option for the Matupu under her existing finance arrangement at a cost of $25.4 million, following the expiration of the current spare boat charter under which the vessel operated. Delivery of the vessel to us is expected on or about May 30, 2022, before onward delivery to her new owners planned on or about June 1, 2022. On May 10, 2022, we exercised the purchase option on the chartered end 2015 built Supermax Gulf Carrier RVS Pioneer for an amount of $18 million, with delivery planned on or about June 18, 2022. The vessel will remain chartered in at her original contract rate until delivery term. Grinrod has four remaining purchase options, which you will find on slide 22 of this presentation, which reflects our chartering fleet updates and provides information on our long-term chartering vessels and associated purchase options. Also on May the 10th, 2022, we agreed to extend the long-term charter on the 2014 built Supermax bulk carrier, the RVS Crimson Creek, for a period of 11 to 13 months at a charter end rate of $26,276 per day, commencing May the 1st, 2022. On May the 24th, 2022, our board of directors declared an interim quarterly cash dividend of 47 cents per ordinary share, payable on or about June the 20th, 2022, to all shareholders of record as of June the 10th, 2022. As of May the 24th, 2022, there were 18,958,025 common shares of the company outstanding, excluding treasury shares. Now I will go over the financial highlights and performance for the first quarter of 2022. Turning to slide seven, the first quarter of 2022 was the strongest first quarter for charter rates in over a decade and lays a solid foundation for the rest of the year. In this context, revenue increased to $110.3 million in Q1 2022, compared to $68.4 million for the same period, 2021. gross profit increased to $40.7 million in Q1 2022 compared to $12.6 million for the same period 2021. Net profit attributable to owners of the company increased to $29 million or $1.55 per ordinary share in Q1 2022 from $2.2 million or $0.11 per ordinary share in Q1 2021. Turning to slide eight, we have placed a priority on building a strong balance sheet and have maintained a healthy cash position while repaying $7 million of our debt in the first quarter of 2022. This strategy has reduced our net debt to $126 million while leaving us well positioned to pursue our growth and capital return strategies. On slide nine, we provide our bank loans and other borrowings repayment profiles. at March 31st, 2022. We continue to have limited debt maturities until 2025, which, combined with a conservative amortization profile, provides us with balance sheet flexibility going forward. Overall, we maintain low leverage, and this is even lower when you take into consideration the market value of our fleet, which is comprised mainly of modern Japanese-built ecovessels. Let's turn to slide 10. We will now briefly discuss our dry bulk operational performance for the first quarter of 2022. Handy sized TCE per day was 22,201 for the three months ended March 31st, 2022, versus 12,053 per day for the same period, 2021. Supermax Ultramax TCE per day was $24,385 per day for the three months ended March 31, 2022, versus $13,259 per day for the same period, 2021. As of May 19, 2022, we have contracted approximately 1,310 operating days at an average TCE of $26,875 per day for our handy sizes, and approximately 1,568 operating days at an average TCE of 29,498 per day for our Supermax Ultramax. The average long-term chartering cost per day for the Supermax Ultramax fleet for the second quarter of 2022 is expected to be approximately $13,997 per day. Now turning to slide 11. the scale of the rise in the dry bulk freight rates is easily demonstrated versus our historical results. During the first quarter of 2022, approximately 90% of our fleet was predominantly trading either on index-linked cargo contracts, short-term time charter, or in the spot market, leaving our company well-positioned to take advantage of the strong freight rate environment. To put this into context, with every $1,000 change in TCE per day equated to approximately 10.8 million of TCE revenue during the full year 2021 for the core fleet. As you can see on the graph, the dry bulk environment in the second quarter 2022 is having a strong performance than the first quarter 2022 around levels we had in the second half of 2021. Now turning to slide 12, it shows the core fleet cash break-even analysis for the first quarter, 2022. Break-even per vessel per day was as follows. For long-term chartering, which includes a daily G&A allocation, on top of the charter rate, the cost was $14,890 per day. For our own fleet, it was $11,782 per day, and the combined average total for the core drywall fleet with $12,474 per day. The cash break-even rate per day includes operational expenses, net G&A, interest expense, and debt repayment. You can contrast these figures to the daily TCE rates in the previous slide to assess the robustness of our profitability. With that, I would like to turn the call over to Carl to discuss the Zybalt market.

Thanks, Steve. Thanks. Now, if you could please turn to slide 14 to look at the fundamentals of the dry bog sector and how they've been developing against the current market environment. The war in Ukraine has led to reduced growth expectations for cargo levels in 2022 due to the loss of nearly all Ukrainian seaborne exports and many Russian cargoes, particularly in the grain and fertilizer sectors. The demand hit is being partially offset by longer voyages as replacement cargoes are sourced from further afield. This is demonstrated by ton mile demand expectations that are still expected to increase by 1.6% in 2022, whilst actual tons are projected to only increase by 0.3%. Andy's sizes and supermaxes continue to be helped by congestion in the container sector, which is leading to unitized cargoes as well as other previously containerized cargoes, such as certain steels, scrap, grain, and bag cargoes, moving into bulk. There is also containerization of a small number of handy bulk carriers, particularly logger types, which can take containers on and under deck. Please turn to slide 15. As the slide depicts, grain trade is expected to contract in 2022 primarily due to the loss of Ukrainian export cargoes, whilst coal trade has been impacted as well due to some buyers avoiding Russian coal cargoes. There has also been increased domestic coal production in China, reducing the need for their imports. COVID lockdowns in China have also created uncertainty with factory production under pressure, though commodity pricing remains resilient. Regarding iron ore, Varley has stated they plan to increase exports in the second half of the year, as normally happens in Q3-Q4 after the summer rains. We are also expecting a big push from West Australia for June, prior to the Australian fiscal year end. Miner bulks are expected to remain resilient due to the aforementioned decontainerisation, as well as the emerging markets continuing to grow and require product. Turning to slide 16, the dry bulk order book continues to shrink to multi-decade lows. It is estimated to be at only approximately 6.6% of the fleet. This potential growth is quite favorable, especially considering approximately 22% of the dry bulk fleet is 15 years or older, and approximately 11% of the dry bulk fleet 20 years or older, measured by dead weight. Despite strong market conditions, new ordering remains constrained by uncertainty relating to cost, practicality in terms of trading patterns and new fuel availability, engine technology, and emissions regulations pertaining to EEXI and CII. For 2022 and 2023, supply growth is forecast to be 2.2% and 0.4% respectively on the handy size and supermax order books, which are the smallest in the dry bulk fleet. Turning to slide 17, while we saw handy-sized supermax spot TC rates decrease at the beginning of this year, we have recently been seeing the market strengthening. Looking at the chart on the right-hand side, handy-sized supermax asset prices have increased approximately 10% since the start of 2022. And as long as the market retains strength, we believe this trend should continue. I would now like to turn the call back over to Steve.