Star Bulk Carriers Corp.

Thank you for standing by, ladies and gentlemen, and welcome to the Starbuck Carriers Conference call on the fourth quarter and year-end 2021 financial results. We have with us Mr. Petros Papas, Chief Executive Officer, Mr. Hamish Norton, President, Mr. Nikos Reskos, Chief Operating Officer, Mr. Simo Spirou, and Mr. Christos Begleris, Co-Chief Financial Officers 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. Begleris. Please go ahead, sir.

Thank you, operator. I'm Christos Begleris, co-chief financial officer of Starball Carriers, and I would like to welcome you to our conference call, regarding our financial results for the fourth quarter of 2021. Before we begin, I kindly ask you to take a moment to read the safe harbor statement on slide number two of our presentation. In today's presentation, we will go through our fourth quarter and full year results, cash evolution during the quarter, a walkthrough of our dividend policy, an overview of our balance sheet, and operational updates in the latest industry fundamentals before opening up for questions. Let us now turn to slide number three of the presentation for a summary of our fourth quarter 2021 highlights. The company reported a record performance for a second quarter in a row. Net income for the fourth quarter amounted to $300.2 million, and adjusted net income of $302.4 million, or $2.96 earnings per share. Adjusted EBITDA was $355.1 million for the quarter. On the bottom of the page, you can see the evolution of our adjusted net income and adjusted EBITDA performance. During the last eight quarters, our adjusted EBITDA has grown more than 10 times, illustrating the strong operating leverage Starbucks has on the improving dry bulk fundamentals. For the fourth quarter, as per our existing dividend policy formula, we declared a dividend per share of $2, payable on March 15, 2022. On the top right of the page, you will see our daily figures per vessel for the quarter. our time charter equivalent rate was $37,406 per vessel per day. Our combined daily OPEX and net cash GNA expenses per vessel per day amounted to $5,415 per day. Therefore, our TCE less OPEX and GNA is around $32,000. Looking at our chartering coverage, For Q1 2022, we have covered 80% of our fleet's available days at a daily rate of $26,100 per day. Slide 4 graphically illustrates the changes in the company's cash balance during the fourth quarter. We started the quarter with $371.7 million in cash. and generating meaningful positive cash flow from operating activities of $296.4 million due to the strong freight market. After including debt proceeds and repayments, capex payments for ballast water treatment system installments, buyback, and a third quarter dividend payment, we arrive at a cash balance of $473.3 million at the end of the quarter. Slide five has a walk-through of our dividend policy with an example of dividend calculation for the fourth quarter of 2021. As of December 31, we owned 128 vessels, and our total cash balance was $473.3 million. With a minimum cash balance per vessel of $2.1 million as of December 31, 2021, on February 16, 2022, Pursuant to our dividend policy, our Board of Directors declared a quarterly cash dividend of $2 per share payable on or about March 15, 2022, to all shareholders of record as of March 2, 2022. The ex-dividend date is expected to be March 1, 2022. Please turn to slide 6, where we highlight the continued strength of our balance sheets. Our total cash today stands at $593.7 million. Meanwhile, our total debt stands at approximately $1.5 billion. Our working capital stands at approximately $128 million. Our full year 22 amortization is $207 million. We have five unlevered vessels and no debt maturities until the third quarter of 2023. Year to date, our company has distributed dividends of $4.25 per share. We have fixed 55% of floating interest rate exposure to LIBOR at an average rate of 45 basis points. In slide seven, we demonstrate the inherent operating leverage and cash flow potential of the company, and they use the free cash flow per share, as well as the potential cash flow yield. For example, with approximately 46,700 fleet available days per year, based on the current 2022 FFA curve, Starbucks would produce $6.4 of free cash flow and a yield of 24%. I will now pass the floor to our COO, Nikos Reskos, for an update on our operational performance. Nikos Reskos Thank you, Christos.

Please send a slide date. We provide an operational update. Operating expenses excluding non-recurring expenses were $4,310 for the 12-month ending in 2021. Netcast GMA expenses were $1,050 per vessel per day for the same period. Despite continued adverse COVID-related restrictions, which have a direct impact on OPEX, the combination of our in-house management and the skill of the group enable us to maintain very competitive costs, being the lowest cost operator amongst our peers, and continuing to rate amongst the top three of our listed peers in terms of right-ship rating. On the ESG front, Starbucks in 2021 has participated in a carbon disclosure project, the world's leading environmental disclosure platform, achieving the highest score amongst U.S.-listed dry dog companies. Starbuck will continue focusing on sustainability and integrating it in every process throughout the company. Slide 9 provides a fleet snapshot and some guidance around our future dry dog and balanced water system installation expenses for the next 12 months and the relevant total of high days. Our expected dry dog expense for the 12-month period is estimated at $30.3 million, for the dry docking of 31 vessels, with another 19.2 million towards our balanced water capex. In total, we expect to have approximately 787 off-hike days for the forward 12-month period. We anticipate that 97% of our fleet will be fitted with balanced water systems within the first half of 2022. The above numbers are based on current estimates around dry dock and retrofit planning vessel employment, and yard capacity. On the scrubber utilization front, Strava has by now accumulated 109,000 days of scrubber operating experience. With Hi-5 fuel spurts having stabilized at levels of around $200 per ton based on Singapore's stock market prices, where we bunker 60 percent of our total annualized volume, we expect to have recouped our scrubber investment in full by the end of the second quarter of 2022. With an estimated annual life consumption of 800,000 tons of HSFO across the fleet, for the remainder of 2022, not a conservative spot high-five differential of $150 per ton would be subsidizing our break-even by $2,600 per vessel per day. With 94% of our vessels cover-fitted, a continued increase in the high-five spread can be a significant value generator for our company. I will now pass the floor to our CEO, Petros Papas, for our market update and his closing remarks.

Thank you, Nico. Please turn to slide 10 for a brief update of supply. During 2021, a total of 38 million deadweight was delivered, and 5.2 million deadweight was sent to demolition for a net fleet growth of 32.8 million deadweight, or 3.6%. New orders placed during 2021 increased to 40 million dead weight from a depressed 23.7 million dead weight during 2020. Despite the rebound of ordering activity, the new building order book remains at a historical low level and 26.4 million dead weight in 2023. Present order book for 2024 is just 11.8 million tons, with Japan quoting new building slots for October 2024. rebuilding costs have helped keep new orders under relative control, while the strong increase in container ship orders was filling up CPR capacity. Furthermore, the surge of global steel prices has pushed scrap prices to record levels and may make demolition of overage tunnels an attractive option during seasonal regulations gets underway starting 2023. Port congestion increased record levels during the third quarter of 2021 due to COVID-19-related quarantines, China's zero-tolerance policy, and other seasonal bottlenecks. Despite the high freight rate environment, average steaming speeds of the dry pack fleet increased by only 2% to 11.7 knots during 2021 due to strongly augmenting bunker costs. As the world reopens from COVID-19, Let's now turn to slide 11 for a brief update of demand. According to Clarkson, total dry bulk trade during 2021 is estimated to have expanded by 4.2% in ton miles. In the first half of 2021, total dry bulk volumes experienced a strong recovery due to synchronized global economic stimulus and to the gradual reopening of economies supported by vaccinations. The world economic reopening from COVID-19 is still at early stages, with the IMF projecting global GDP growth of 4.4% for 2022 and 3.8% for 2023. According to Clarkson, coal export ban in January, the weather disruptions in Brazil, and the Chinese Winter Olympics have affected trade volumes during the first months of the year. However, growth is expected to accelerate during the second quarter, supported by seasonality, Chinese stimulus, raw materials restocking needs, and improved vaccination rates worldwide. Moreover, record high commodity prices Iron ore trade expanded by 1.6% during 2021 and is projected to expand by 1.3% during 2022. China's steel production decreased by 2%. leading to tighter iron ore supplies and record high price. Brazil iron ore exports during the next five years. Coal trade rebounded by 7.9% during 2021 and is projected to expand by 2% during 2022. China and India's thermal electricity output increased at a higher pace than domestic coal production during 2021, and the combination created a shortage of supply that pushed power plant stocks lower and prices to new record highs. During the last months of Australian coal, forced power utilities, and steelmakers to diversify and seek coal cargoes from longer-distance sources such as South Africa, Colombia, the U.S., and Canada, but also from Indonesia that experience longer delays from quarantines. Coal demand from other major importers, like Indonesia implemented a ban on coal exports during January to safeguard the stable supply of the domestic utilities. Full-year Indonesia exports are expected to remain at the same levels with 2021, which indicates a significant increase in volumes over the ensuing months. Grain trade expanded by 1.5%. during 2022. China's demand for grains is projected to remain strong as the hog herd has fully recovered from the 2018 African swine fever outbreak, and the five-year plan will be focusing on food security. South American crop yields have recently been downgraded due to the severe drought conditions that have also led to delays. Nevertheless, North and South American grain and soybean Panamax vessel sizes. Mineral bulk trade expanded by 5.6 percent during 2021 and is projected to expand by 2.7 percent during 2022. We expect smaller-geared vessels to continue to benefit from the synchronized consumption recovery of mineral bulk trades and the spillover effects of the strong containers sector. miles for Cape size vessels. Finally, our outlook for the dry bulk market during 2022 Without taking any more of your time, I will now pass the floor over to the operator to answer any questions you may have.

Thank you. Ladies and gentlemen, if you wish to ask a question, please press star 1 on your telephone and wait for the automated message advising your line is open. To cancel your request, please press star 2. Once again, that's star 1 if you wish to ask a question. Your first question comes from the line of Amit Mehrotra of Deutsche Bank. Please ask your question.

Thanks, operator. Hi, thanks, everyone. Yeah, I was still here at the operator. There was an automated message. Sorry about that. Well, first of all, congrats on the quarter and the year. I wanted to ask about the cash flows for the first quarter. So you have 80% of the first quarter days booked at $26,000 a day. Obviously, that's a very, very solid number relative to your break-even. I'm just trying to understand... What that translates, based on our math, it translates to well over a dollar of dividend in the quarter. Now, I know, Hamish, you're going to say that's my job and not your job to come to an estimate. But I guess the more specific question is I'm trying to understand the moving parts on the cash flow. Obviously, there's some working capital considerations. There's maybe liquidity or cushion per vessel considerations. I'm just trying to understand how should we think about, you know, the dividend payment, how that translates relative to the TCE that you'll book in the first quarter.

Well, the working capital is actually working in our favor from 4Q2021 to 1Q2022 because the rates are down slightly, so the working capital basically is released. Mm-hmm. It's not a big effect, but it's beneficial to cash balances. And, you know, otherwise there should be no real surprises.

And if I may add, Hamid, I mean, if there is any sort of clues from our presentation pointing to what potentially the dividend could be, you see our cash balance today of $594 million. Now, obviously, this comes down by $204 million when we pay our dividend on March 15. Also, the debt principal payments for the quarter are normally... skewed towards the end of the quarter. But you basically get a feeling of potentially what the dividend will be.

Right, and the debt repayment is included in the $11,000 a day. So is it as simple as taking whatever the TCE is, $26,000 or whatever it will be, less the $11,000 times the revenue days, and that's kind of the dividend payment because you're at your maximum threshold. It might even be better than that because of the working capital benefit in the quarter.

Yeah, and correct, as you said, the cash threshold is, effectively stays at the $2.1 million per vessel that it was in December 31, 2021. So that does not increase from now onwards. Right.

So we don't have to build anything, you know, we don't have to build that balance first. So that's a benefit for the dividend in Q1 versus Q4.

Yep, so it's much cleaner. I got it. Okay, and then now a couple more questions if I could. So the debt pay down is obviously included in your break-even, which you mentioned. Hamish, I know that you've talked about kind of a desire to get to a net debt neutral position. And what I'm trying to figure out is, you know, your stock price is now around $30 per share, over $3 billion in market cap. Do you have any appetite or do you see an opportunity to accelerate that deleveraging position? or do you expect it to naturally happen with respect to the debt amortization?

Well, you know, look, we may find opportunities to acquire vessels in an accretive way at this point. You know, we'll see. But, you know, we're basically focused on maximizing the dividend per share and, you you know, basically benefiting shareholders to the greatest extent possible, and we may have a chance to do that.

Right, and I guess those ship-for-share deals that were so accretive a couple years ago, I mean, obviously you guys are more of a platform now. Your currency is more attractive. People may be willing to take even more of a discount for that liquidity. Is that a fair characterization of the opportunities you're seeing on the ship-for-share side?

Well, I mean, certainly we continue to see opportunities and, you know, there may in fact be even better opportunities to, you know, sell shares for cash and buy vessels for, you know, an attractive price as well.

Right. Okay. And the last question for me, maybe a little bit out of left field, but Hamish, I've heard stories of, you know, big retailers using actually dry bulk vessels to move containers. And the benefit of that, obviously, is dry bulk ships can kind of work around the, you know, don't have to call at congested container terminals. I assume that's obviously a very niche market, but super interesting nonetheless. I was wondering if that's something that is, in fact, happening and just given your position as The company's position is the biggest dry bulk. I'm sure they're seeing opportunities to be able to do that as well.

Well, I mean, it's happening to some extent. It's primarily happening with small vessels, with handy-sized vessels, particularly handy-sized vessels with so-called box-shaped holes. And so, you know, we are actively looking into trying to do movements like that, but, you know, it's a challenge. especially with the larger ships. But it's benefiting us as it's benefiting all of the dry-bulk players because it's taking some capacity out of the market. And, of course, cargoes moving from containers to small dry-bulk carriers also are taking up some dry-bulk capacity. Right. So, for example, like bag bites is an example of that.

Okay. Okay. All right. Thank you for taking my questions. Congratulations again. Appreciate the time. Thank you, Amit. Thanks, Amit.

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

Hi, guys. Omar Noska from Clarkson. Thanks for the presentation. Just had a couple follow-ups and maybe touching a little bit on this question. Maybe just kind of from a step-back perspective, how do you guys approach 2022 now and beyond in terms of company strategy, at least in relation to how you approach maybe 21. You guys were obviously quite inquisitive last year, early last year, and definitely before that. You've got the dividend now underway for the past several quarters, culminating with the $2 you just declared. Valuation-wise, your stock has done very well. It's now gotten to a premium valuation. So just wanted to maybe just kind of how do you guys approach strategically the company as you look out here over the next, you know, 12, 24 months?

Well, I mean, you know, basically, strategically, we will protect the dividend. Dividend is very important to us and to all the shareholders. And we'll try to build value in the share, and we'll try to de-lever as we've been doing. And so, I mean, basically, it's a continuation of of the strategy we've had, you know, we will savor growth when we can do it in a way that's good for the shareholders. Petro?

Yeah, also basically preparing for the future. When we will move to green fuels, this is a very important part of our strategy, and we have to think how we're going to deal with that.

Okay. Thank you. Hamish, anything else to add?

No, I was just going to say we've got a lot of people devoting a lot of time to decarbonization.

Very good. and i guess you know patrick you you talk a bit about the market and and and definitely you know it's been a bit of a a unique one at that obviously twenty one was a very good year and the best year for dry books and uh... you know that the financial crisis But we didn't get much support from the Chinese industrial markets. Obviously, iron ore was basically flat. You couldn't really, you know, count on China being active or consistently active. And yet the small ships really led the way. And we're kind of seeing potentially something like that again, at least for the first month and a half of 22. Is this kind of a sustainable way for the dry bulk trade to be, you know, just in your eyes for the smaller midsize vessels? out of the Chinese iron ore trade?

Actually, well, first, don't forget that they have their Communist Party celebration towards October, November. And usually China wants to show excellent results, great GDP growth every five years. the IRR reserve ratio by a few basis points. We think that they will cut taxes. They will be giving out more loans going forward, and they will support infrastructure. So we actually believe that China will rebound. Right now, the first couple of months, It was the Olympics, and we wanted to have the blue skies. So that's why it went slower. Also, what's important is that the steel production emission limits are pushed back to 2030. A few months ago, the limit was 2025. The one thing I personally wonder about is the COVID strategy they're following. This zero COVID policy, I'm not sure whether it will create any issues for their economy. I understand from our chairman who was visiting China, being the president of the Greek Olympic Committee and the European Committee, that they are developing vaccines against the Omicron. and they hope to be able to deal with that. Now, if they don't deal with that, we will have the advantage of off hires and If they manage to deal that, on the other hand, it may incentivize more trade. So, overall, we are actually much more positive about China this year than last year.

Got it. Thanks, Petros. And sorry, just a...that's very helpful. Further question for me, just wanted to ask about the ATM. You made a comment in the release that you haven't touched it, which makes sense. In fact, you bought back stock during the fourth quarter. How do you think about that $75 million ATM now? You know, the stock has gradually been evolving here towards a premium to NAV again. Do you just punch that ticket? Is it as simple as you've gotten now a premium valuation? Do you start to tap into that ATM, or is that just for, you know, down-the-line use?

Well, you know, as we stated, we haven't used it so far. We will use it when it's good for the shareholders, basically, if we can, you know, buy, shift, relative to the value we get for our shares, and it's accretive to the dividend, accretive to our earnings, accretive, you know, to our cash flow per share, and probably also allows us to reduce the average age of the fleet, we'll use it. And that will be good for everybody.

Okay, yeah, I just wanted to hear from you how you approach it, and it's not just as simple as a premium 10 AB means you issue stock and then eventually maybe you find a use for it. It comes hand in hand. It's going to be hand in hand, yeah. Great. Well, thanks, Hamish. Thanks, Petros. I'll turn it over. Thank you, Omar.

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

Howdy, Team Starbuck. It's Randy Givens from Jefferies. How's it going? Hi, Randy. Hi, Randy. Hey, hey. Two questions for me. Obviously, you just gave the quarter to date rate guidance, which is above expectations, frankly. Can you give some color on that on a per maybe asset class basis? Just trying to get a sense for maybe your Newcastle Max kind of scrubber premiums. For which premiums? In general, that's one specific question, but seeing if you can provide a little more color as a breakdown per asset class instead of, you know, 80% of 2017.

The Q4 results or Q1? Q1. One Q to date. Yes. Okay, Q1. Actually, we've covered 61% of our CAPE fleet. at about 24,300. Okay. We have covered about 96% of our Panamax fleet at about 25,800. And we have covered 85% of our Supra fleet at about 27,500. So the coverage is about 81%. at about $26,000, just a bit below that. And this is a net figure which includes scrubber benefits.

Sure. And it's, generally speaking, the forward market for the scrubber, you know, for the scrubber spread.

Yeah. Got it. All right. Hey, that's fair. Thank you for the granularity there. And then, Connie, bigger picture questions. It's been touched on earlier, but the dividend above $2 a share, great to see that. Great to see the share buybacks doing the right things here. Now, going forward, assuming you do look to eventually grow the fleet, it seems like the second-hand asset values have softened in recent weeks despite the FFA curve rising. So how do second-hand acquisitions compare to new buildings at these levels?

Secondhand, the new buildings. Right. Still new buildings are more expensive than secondhand. Like, for example, I was asking yesterday the Japanese how much would a Newcastle MAX cost, a Newcastle MAX, and when they had the earliest delivery. Probably their earliest delivery is end 24, beginning 25. Now, China would probably be somewhat cheaper than that. I would probably venture to think 65 or thereabouts. And a five-year-old Newcastle max today would probably be around 52 million in China. a few more million in Japan for a Japanese vessel.

Yeah, and neither one of those ships would burn ammonia.

Yeah, we're talking about normal fuel vessels. If we are to talk about LNG, having also the LNG, the energy ability, that would probably add between 10 and 13, 14 million on the price. So you see that for a five-year-old vessel, the differential is about 17, 18 million.

Sure. And then I guess briefly, since you opened that can of worms, any thoughts on LNG dual fuel versus ammonia versus traditional fuel, if you were to place a new build order?

We are, first of all, we're not minded to place new building orders. Okay. If we were to, we would have to research this very carefully on a well-to-wake basis, well-to-propeller basis. to make sure that LNG is the right solution, even on an interim basis. I think that our strategy, as we see it right now, is to keep our fleet within the parameters, within the environmental parameters of the future, the CII ones. Once we know what the new fuels are and when there's enough infrastructure for them and enough quantities, then we may decide which way to go. But that's not for tomorrow. This is probably for between 2025 and 2028. So that's actually eternity.

In the meantime, we're obviously focused on decarbonization through, you know, better bottom paints to reduce hull fouling, hull cleaning robots, energy-saving devices, route and speed optimization. And then we're also looking at carbon capture, which looks like it may be more practical than we would have thought even a few months ago. Yeah.

No, that's fair. So nice to see the shares above $30. I was confident it would get here this year, just didn't think it'd be this soon. So congrats again. Thank you. Thank you.

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

Hey, this is Ben. I, for one, was confident that we'd get to $30 by now. I wanted to delve in a little bit. Those rates, again, for the first quarter are really better than what I was thinking they would be. Can you maybe talk to, as you look at that, what maybe is the split between spot versus time charter contracts? In other words, do you have much time charter contract in there, and should we think that there will be some spillover into the second quarter or the back half of the year?

Yeah. Okay. Well, as we said, we're about 80 percent covered. We are covered at somewhat higher levels than that for a fraction of the 80 percent. But generally our intention is to keep the fleet as spot as we can, because we are expecting a stronger market right after the Chinese Olympics are over.

Right, okay. We are certainly seeing a stronger market, specifically in the handy, or, well, anything ultra-max and below. But the aim, as you said earlier, the priority number one is to protect the dividend. To me, it seems like the easiest and best way to do that is to take volatility out of the equation. That is most obviously done through time chartering. vessels, but you could also say, well, you know, what about locking in more of the interest rates or taking, you know, other aspects of the volatility out? How do you factor those two things, wanting to protect the dividend while at the same time, you know, having market exposure?

Yeah, that's obviously a, that's one of the central dilemmas of running a dry bulk company Because if you reduce volatility, you probably also reduce the average profitability. And so, you know, there's a tradeoff between being willing to accept volatility at high average rates and getting rid of volatility and maybe suffering from lower average rates. Basically, what we hope is the solution to that is reducing balance sheet leverage. so that we can deal with operational volatility while having, you know, perhaps a lower total volatility in our results. But, you know, it's always a dilemma.

And then if I may add, this is Christos, on the interest rate side, we basically locked 55% now of the outstanding indebtedness on the base rate at levels of around 45 basis points. And that's locked essentially for the next two and a half years. So we are protected to a big extent from volatility in base interest rates. On the chartering side, as Amy said, we were there to cover the smaller vessels for the first quarter because we thought that the market would be weaker. But from where we stand right now, drive up fundamentals, we feel confident about the market. And therefore, as Petro said, going forward, we're mostly spot.

But if we see rates that we consider to be very strong for the next quarters, we may hedge some more. But our usual strategy is during the last four months of each year to try to cover the first three, four months of the next year, because seasonally Q1 is weaker than the rest of the quarters.

Right. Okay, and that's all very helpful. And then lastly for me, you know, Amy, she talked about the possibility of using your shares, either generating cash from the sale of shares or using your shares to do acquisitions, so long as, or with the caveat that whatever you do, it's going to be accretive to you. the dividend, and then you were just talking about wanting to focus on delivering the balance sheet as much as possible to protect against volatility. Does that effectively mean that if you are out in the market to do acquisitions, anything you would do would probably need to meet a threshold such that it comes with very little or no debt and then is still also accretive? Is that the right way to think about it?

Well, first of all, we're not very leveraged now. So it's not that much of a stretch to buy a very low leverage, you know, shift and have it be accretive to the dividends. So, yeah, I mean, basically we want it to be accretive and we don't want to build leverage. So, you know, you've hit the nail on the head.

Let me come back to the previous question, just a bit regarding hedging. If you look at the order book, and actually 22, 23, and almost 24 are closed, we are looking at an average supply of maximum 25 million tons per annum for three years. This is below. This is about 2.7 percent. And then we are starting to face the environmental regulations, which will oblige some vessels to be scrapped. Others will have to slow down speed. And let's not forget that one knot in a slower speed equals about 6 percent less supply. And there's going to be vessels going to dry docks in order to do all these good things that Hamish mentioned earlier. So we think that we're coming up to a great market for the next few years, which is mostly supply-led and also environmentally-led. So we fear less keeping a fleet more spot than potentially at other times in our company's career.

All right. Well, thanks to all of you. I'm done with my questions now. I'll turn it over. Thank you. Thank you. Thank you, Ben.

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

Yeah, hi. This is Magnus Feer, H.U. Wainwright. Congratulations on the quarter and also joining the three billion dollar market club it's a very exclusive club in dry book shipping uh thank you first uh i most of my questions have been answered but i was just curious uh uh since uh you mentioned that potential acquisitions going forward uh you know with 128 vessels where i mean is there a limit on how many ships you can manage or you know uh You know, 150 to 200 vessels, is that kind of the max, or is there really no maximum?

I think there's probably effectively not a maximum, but... Well, we organize our company into fleets as far as operations and technical are concerned. uh... and uh... and uh... uh... maintenance marine maintenance uh... so basically the more vessels we have the more fleets we will have and then on the other hand uh... The positive thing about it is the economies of scale that we manage, and also G&A should lower. So I don't think there's going to be a problem. We'll just have to work. The management will have to work a bit harder, I suppose. Very good.

So the $4 billion club may not be too far in the future.

We have no further questions at this time. Please continue.

No more comments, operator. Thank you very much.