CMB.TECH NV Ordinary Shares

Good afternoon and welcome to the CNB Tech earnings conference call for the third quarter of 2025. My name is Alexandre Sévrys and I'm joined by my colleagues Ludovic Sévrys, Enya Derkenden and Jois Daman. We have the usual topics we want to discuss with you today, starting with our financials and the highlights of the quarter. We will then move to the marine division market update and we will close with the conclusion and Q&A. I would like to start with the financial highlights and will therefore hand over to our CFO, Ludovic.

Thanks, Alex. If you move to the next slide. This is the typical overview of our company now post-Golden Ocean merger. We have roughly $11 billion worth of assets on the water and being constructed, over 250 ships. and we'll go further towards the metrics at a later time in the slide deck um but uh if you move to next slide alex you'll see that we finished the quarter uh with the result of roughly 17 million dollars of net profits um our ebda is to that $238 million, where we end the quarter with ample liquidity. We have more than $555 million worth of liquidity in the company. The contract backlog stayed the same, which means that we added a little bit compared to the natural attrition we have quarter on quarter. The capex right now sits at $1.6 billion, and our equity on total assets, book equity for the bond components, still sits above the 30.4%. We had a pretty active quarter, obviously apart from finishing the merger with GoldenOcean, but the Board decided to declare an interim dividend of 5 cents per share, which is going to be payable early January. Our CAPEX program is now fully funded. I'm happy to say that we have signed all new loan agreements on the remaining CAPEX. and the equity component has been covered by own liquidity and sale of assets. The backlog mentioned is still hovering around $3 billion. but we definitely took a big step forward again in our rejuvenation of the fleet, where we took delivery of seven new-built vessels, which have been announced in our training updates. We delivered two ships in Q3, but more importantly, we will generate another capital gain of roughly $50 million on the delivery of the VLC Dalma, the Cape-sized Battersea, and Zushan, and the Suez Max Sophia in Q4. On top of that, we just announced the order of a multiple-purpose accommodation service vessel, which is similar to our CISO-V, but in a bigger format, but Alex will discuss that at a later stage. Moving towards the coming quarters, we're quite excited with the time acquisition of Golden Ocean, a big increase in spot exposure on dry bulk, which is happening at the right moment, it's playing out well. We have 55,000 shipping days in 26, from which roughly 47,000 is spot. With a big focus on large tankers and large dry bulk, we're perfectly positioned to enjoy the good markets that we have today. Moving to the next slide, here we've made a simple assumption. If the market today would continue going forward, we would show what the free cash flow capacity is at current rates. This is a pure assumption, but you can see that at today's rates, we would add another $600 million of liquidity over a year. On top of the $420 million that we anticipate to pay back on the bonds and on the bridge financing. I'm happy to say, by the way, that we'll reduce the bridge by another $300 million by end of this quarter. But this slide shows that with the spot exposure and the good market we have, we can generate meaningful free cash flow, showing the operational leverage of the company. And if people sometimes don't like to spread out over a year, you can easily filter this into quarter by quarter. And this would mean a two-days market that we would add $250 million free cash flow per quarter, which I think is a pretty strong sign of our operational leverage. I'll move the floor back to Alex on the various marine divisions we have.

Yes, thank you Ludovic. I want to take you through our five divisions and the markets in which they operate and what has happened in Q3 and is happening right now in Q4. You can see our usual slide with the five main markets we operate in, the tankers, dry bulk containers, chemicals and the offshore markets. You see that we are still positive on tankers, positive on dry bulk, positive on the offshore markets. We are cautious since a couple of quarters already on containers and on chemicals, and it has to do with the fundamental supply-demand numbers. If I start with the divisions where we're a little bit more cautious, containers and chemicals, you can see the demand numbers for 2025 in containers were positive. but are expected to be quite flat or even down a little bit in 2026, combined by a huge order book in containers, 32%, and the fact that we are expecting gradual unwinding of the rerouting away from the Red Sea, so that ships would go through the Red Sea again, which represents today between 10% and 12% in ton miles. We think container markets will have a difficult time next year and probably also the year thereafter. Same can be said for chemical tankers, be it to a lesser extent. Supply demand is a little bit overweight in terms of the number of ships coming on stream, so we're also a little bit cautious on the chemical tankers. As you know, our two divisions, Delfis and BoChem, are mainly covered by time charters and have very little spot exposure. If we turn to the other segments, Starting with dry bulk, which is by far our biggest exposure today, we see that there was an increase in ton-mile demand growth for cave sizes this year of 0.8%, so not very meaningful, but still positive. Expected to ramp up next year to close to 3%. Combined with a supply figure where only 9% of the fleet is on order, where the fleet is also aging, 32% of the CAPEs is 15 years and plus, we believe that supply-demand fundamentals on dry bulk are actually very strong. On tankers, we are seeing demand growth this year, next year in ton-mile. We see that the fleet is growing, but because of all the inefficiencies that we are seeing in the market, and I'll talk about that in a minute, we still believe that definitely in the short term, the supply-demand figures look very good for tankers. Last but not least, on the offshore, offshore wind, but also offshore oil and gas. We have seen the offshore wind markets grow, even though some projects have been postponed. But there, for offshore supply vessels, there has been a lot of extra demand for the oil and gas, from the oil and gas market. So we are seeing offshore wind vessels going into the oil and gas market, and supply-demand fundamentals definitely in that market are also positive. I'd like to zoom in to Bossimar and maybe go back one slide. You see here one of the vessels from Golden Ocean that has been renamed to the Mineral Sakura, so our renaming program is in full swing. We are keeping the Golden Ocean or the Golden prefix for our Panamaxes, but are renaming all our Cape Sizes and Newcastle Maxes to Mineral prefixes. We have three large divisions in dry bulk, our Newcastle Maxes, our Cape Sizes, and our Kamsamaxes Panamaxes. If we focus on the Newcastle Maxis first, what have they done in Q3? We achieved a TCE of $29,500, and in Q4 to date, we are at close to $34,000. On our capes, the number for Q3 is 20,500, going up in this quarter at $26,200. You can see that we've already fixed quite a substantial amount of ships for Q4, but that number could still go up a little bit if the current markets stay strong. On the Camzamax and Panamaxes, definitely a positive surprise for this year. We have seen rates better than anticipated. We achieved rates around $13,500 in Q3, but that's already up in Q4 to $17,000. Main drivers for dry bulk, when we look at all the indicators, a lot of them are green. It's positive on the China steel mill utilization. It's positive on soybean imports to China. Brazil iron ore exports there are also very good. And, of course, the dry bulk fleet supply is growing, but we are seeing definitely in the larger segments more demand growth than supply growth of vessels. Sorry for that, just was a bit too quick. Zooming in on the demands of iron ore, coal, grain and bauxite, you can see that all numbers are positive, expected positive for 26 and 27, except for coal. But we believe definitely for the larger sizes that iron ore and bauxite are compensating or overcompensating the less demand for coal. Watch the space on grain as well. Not really a big driver for cave sizes, but important for our Panamaxes. The numbers there are very positive. And with the recent peace agreement on tariffs between China and the U.S., we're expecting that demand hopefully to continue on the tonne mile side. If we look at the number of ships on order compared to the existing fleet, you can see that in 2026 and 2027, we are going to add some cape sizes to the market. But all in all, including 2028, the order book to fleet is only 9%. The number for Panamaxes is 14% order book to fleet, but also there, with the demand figure, I think supply-demand should be balanced and definitely looking positive for that market. An important number to highlight is the average vessel age. As you can see, both Panamaxes and cave sizes are at historical highs in terms of average age, which always bodes well for potential scrapping. The next three slides are providing you more information on the Brazil iron ore trade, the Australia iron ore trade, and the Guinea iron ore and bauxite trade. On all three, I can say that we are at five-year highs in terms of output. You can see the numbers there on the slide. And we've basically tried as well to highlight the seasonality. Seasonality in the Atlantic Basin in Australia and for Guinea is dependent on rain. The rainy season usually in Brazil and Australia is in the first quarter. However, in Guinea, that's usually in the third and fourth quarters. So we see that the Guinea season can actually help our markets because when Australia and Brazil are down, they are up. Actually, in the rainy season of Guinea this year, it was less than expected. So we saw some good outputs regardless of the rainy season. The key takeaway here from this slide, and from the australia slide and from the guinea slide is that we are seeing volumes up volumes at five-year highs and the seasonality in q4 and q1 actually supportive i'd like to talk about our tankers uranav our tanker division and crude oil transportation We have a trading fleet of 10 VLCCs with another four eco VLCCs on order. Some of the pictures that you have seen during this presentation highlight the new VLCC that we took delivery of a couple of weeks ago, the Atribates. We have another four coming in the following weeks and months. We achieved $30,500 in Q3. Still far in Q4, we are at $68,000 with 78% fixed. We believe that number can still go up. The fixings and the bookings that we have done in recent days and in the coming weeks are looking very promising. We sold one older ship, the Dalma, which generated a capital gain of 26 million. We've extended one ship by year, the Donusa, and then we delivered two vessels to the new owners in Q3, the Hakata and the Hakone. On the Suez Maxis, we have 17 vessels on the water. We have another two ships coming in the fleet next year at the end of Q1. We sold one Suez Max, the Sophia, which was delivered in Q4. And the rates we achieved in Q3 was strong, was $48,000. And Q4 quarter to date, we are close to $60,000. But again, there, we still have some days to fix. So there is upside to that number. When we look at the main drivers and the main indicators, we see that a lot of indicators are positive. And also on the tanker feed supply, year on year, it's still a moderate feed growth. let's look at what's coming zooming in on the demands you can see that the forecasts are that there will still be an oversupply of oil in the coming months and quarters that leads to more storage that leads to more oil on the water that leads to definitely in the short term better rates Because if we look at the supply of vessels, you see that this year there's been very little new ships coming on the water. But it's starting to creep up. So next year, 26, and in 27, we will see more Suez Maxis and VLCCs come to the market. If you look at the average age of the fleet, this new supply should definitely be manageable. So in the very short term, maybe even medium term, we are still bullish on rates for tankers. What happens thereafter, a lot will depend on how many more tankers will be ordered and added to the order book. We are not at the single digit numbers anymore. For the VLCCs, we're at 15%. AutoBook2Fleet and SuezMax is 20%. So it's not what it used to be. But I would say that in the short to medium term, things are still looking very good. And also the age of the fleet is supportive. On containers, we can be quite brief. As you know, the exposure we have on containers is limited. Actually, it's zero. We have fixed all our ships to four vessels on the water to CMACGM, and then we have one ship coming next year on a 15-year charter. The market on containers has weakened. You can see the SCFI, which reflects the freight rates for containers paid. It has slipped down and is now at a level which is the lowest of the past two years. The high order book, more than 30% of ships on order, plus the Red Sea situation, which will unwind, lead us to being quite cautious on the supply side. Demand should also be lower next year, so container markets could be up for a bit of a rough patch. There, our spot exposure is also very limited. We have a couple of ships operating in a spool, so that's basically our spot exposure. All the rest is time-charted. We still have quite an interesting order book coming, with all ships having been fixed. One more chemical tanker that has already been christened, but that will deliver soon coming to our fleet. Next year, we'll have two product tankers coming to the fleet, which are fully fixed. And then we have our ships in 28 and 29 that were fixed to MOL that will come later. But so our spot exposure on chemicals is relatively limited. It's a less volatile market, but it has come off its very high levels of last year and the year before. But we are still at very healthy levels. And then I'll finish with Windcat, the offshore wind division. Some of you might have seen in our press release, but also in a separate Windcat press release, that we ordered a new CSOV, an enlarged version of the CSOV, which we call an MPASV. And I'll say something about that in a second. But maybe first zooming in on our going concern business. We have our CTVs, we have our CSOVs. We took delivery already of one CSOV. That ship has been fixed on a very short-term period for business in oil and gas in Australia. It already gave us earnings in the third quarter of $27,000. The fourth quarter rates are going up to $118,000 with most of the days already fixed. We have ordered this new multi-purpose accommodation service vessel, which I will discuss in a second. And then looking at our CTVs, you can see that the seasonally strong Q3, we achieved good rates of close to $3,500 a day on average. The slower period in Q4, our TCE sits at $2,800. Here you have a render of the newest new building order for CMB Tech. So we ordered one ship with another options for five vessels. It is based on our existing CSOV design for the 120 passengers on board, but we've upsized it to 150 to even 190 passengers on board. It will have a permanent gangway connection, which is better for oil and gas projects. It will be larger, so positive for our charters. When we look at the market, it will be the only vessel type that can truly operate between oil and gas on the one hand and the offshore wind on the other. Our existing ships are already suited to do that, but this one will be even better suited. We have a 100-ton subsea crane which is installed. And when we look at where that ship will compete, we see that the flotel market for oil and gas is one market that we will target. And when we look at designated ships for that market that also have the crane capability, we see that there's actually not that many vessels on the water and that are being built for this. Our markets are everywhere, but clearly one of the markets that will be interesting and something to follow is the Brazilian oil and gas market, where we see more than 30 FPSOs entering service in the next two to three years, which will need a lot of support vessels coming there. The reasoning behind this is that we want to trade in the two markets. Eventually, the ship will end up in offshore wind, but as long as the offshore wind is a little bit quieter, we can also go to oil and gas. And with this new building or with this newest addition to our fleet, we can end the part of the presentation and go to the Q&A.

Yes, we will now open the floor for questions. If you would like to ask a question, please raise your hand. Make sure to introduce yourself and unmute before asking your question. If you can't unmute, you can also use the Q&A section to ask your question. And if you're dialing in with a telephone, you can press star 5 to raise your hand and star 6 to unmute. And if you have any follow-up questions, of course, you can reach out to Joris. But I will now open the floor for questions, so you can raise your hands. The first one is Frode Myrkedal. You can now unmute and ask your question, please.

Yeah. Hi, everyone. This is Frode from Clarkson's. First, I wanted to ask you about IMO. You know, they delayed... the carbon pricing by a year at least. So what's your verdict on this? And have you seen any change, I guess, in terms of, let's say, interest or demand for dual fuel technology after that?

Yeah, thanks for that. I think it's a question many people have. Well, first on the delay, whether it's going to be a one-year delay, two-year delay or three-year delay, we don't know. We have, of course, not based our strategy on the IMO coming to fruition in 2028. It definitely helps our business case. But our strategy on dual fuel engines is based on finding like-minded partners to charter these vessels and use the technology to decarbonize. We have the EU legislation which is in place, which is definitely supportive. IMO would have been very nice to have. It's not a must-have for our strategy and for our plans. Our opinion on whether eventually they will find an agreement on the IMO level is that we don't know. But we do see that after the failure of IMO, there's a lot more discussion between countries on a bilateral basis to see what can be done on certain trade lanes, say Australia to China, for instance, or trades that are linked to Europe. So the last word has definitely not been said, but it will not change anything to our strategy.

Okay, fair enough. One question on your... let's say investment philosophy. So you ordered a few large COSVs, I guess you can call it. But how do you think about opportunities in other segments like dry bulk and tankers? Are you looking to invest more there or maybe trim or sell in those segments?

Well, I think we've invested already a lot over the last two, three years at the right time, I would say. We will always look opportunistically. at new buildings, but today clearly we think new buildings are quite pricey. That doesn't mean we would not order if it's the right value and if we believe that it will create value for us and our balance sheet can take it. You just saw that we ordered this extra wind vessel which is really an offshore vessel. We think there's very good value there. We think this is also something CNB Tech can perfectly do, even if we have more options that we can declare going forward. But that's on the new building side. On the second hand, you have seen, and we will continue to do that, that we're clearing out our older vessels, because we just think rates are very good and the prices for second-hand tonnage are at a level where we're rather sellers than buyers. We still have a couple of older vessels, don't be surprised if we clear them out, but then there will come a point where we're very satisfied with the age profile of our ship and we're very satisfied of basically staying on the market and enjoying the good markets.

Okay, last question on the dividend, so this is the five cents. you know second quarter in a row so that makes it tempting to think this is some type of minimum level going forward or should investors expect you know dividends are flexible going forward i think uh i'll take it um we have a fully discretionary dividend policy

um i think we've been pretty clear uh that every quarter the board will decide you know what we'll do with the cash that we have and it's fair to say um that with the mini film cash flow generation that we are seeing in Q4, that we're expecting in Q1, that there will definitely be a further look at how to reward the shareholders, whether that's share buyback, whether that's dividends, whether that's an accelerated clearing out of some of the bonds some people have mentioned, the bridge financing or just reducing leverage. I think it's these markets, the way we positioned ourselves in there, So that it goes very fast. And that I don't think we're there to say minimum dividends. We don't say, you know, maximum dividends. We're there to balance between rewarding shareholders and strengthening our balance sheets to be positioned for opportunities when they present themselves, whether it's organically or through M&A.

Okay, perfect. I'll turn it over. Thank you, guys. Thanks very much for that.

Moving on, Eric Havalt, you can now unmute and ask your question, please.

Yeah, hi, this is Eric from Pareto. Just following up a little bit on the S&P because you have, you haven't, I mean, do you have a sort of target list of the vessels you could dispose of? I'm thinking especially on the tanker side now where, you know, S&P markets are, are interesting, but the cash flows are also fantastic, right? So how do you balance that short-term cash flow versus potentially realizing some of these elevated asset values?

It all depends on the price. But I think, Eric, you will agree with me. If you're getting north of $50 million for 18, 19-year-old VLCCs, there's a good case to say that you should sell. Other people might say, no, keep it on the spot market and trade it out for another year. We are more in the first camp. I think tonnage, which is older than 15 years old at current valuations. And again, it will depend on the bid and it will depend on the price. We are more sellers than keeping it in our fleet. That doesn't mean we will do it at any cost.

And what about on the modern vessels though, to lock some of them up, to sort of de-risk a little bit your cash flows? Is that something you're looking at?

Yes, so a very good question, Eric. I think we've mentioned this in previous calls as well, and we've been very open about that. If we see good levels to take some cover, we will definitely do it. We like to have 40,000 spot days, but at one point, you know, we also want to use the market to take some cover, keep the young vessels in our fleet, but take some TC cover. Now, as we've not announced a lot of time charges, it also means that right now, both on tankers and on dry bulk, we've not been tempted by numbers that are good enough for us to take action.

Very good. And finally, should we read anything into the fact that you're not changing the prefix on the Panamax cancer fleet?

No, no, it's a good question. Looking back in the CMB days, we had a CMB prefix. Look, we're very happy and proud that Golden Ocean is now part of our company. Even though we're not using the brand name any longer, we like to respect the Golden Ocean history and keep them as part of our name and our brands by keeping the Golden prefix on Panamaxes. Excellent.

Thank you very much, guys.

Thanks, Eric. And Christophe Samuel, you can now unmute and ask your questions.

Yes, good afternoon, Christel Samman, KBC Securities. Thank you for taking my questions. A few have been addressed already, but maybe first to go a little bit deeper into IMO that was already touched upon. If the conditions would be right to consider new build ordering, would you for sure order ammonia or H2 ready or fitted vessels? Or could you nowadays also consider LNG ready or fitted vessels?

and then secondly um just with regards to the decision of of of the imo what impact does it have on your business plan for h2 industry and infra thank you yeah thank you christoph um so we are more convinced than ever that uh ammonia is a very good choice to decarbonize and the reason is not only because we are now getting very close to showing to the world that the technology actually works but also because we have seen over the last 12 months in China and in India, tremendous evolution on increasing the availability of the green ammonia molecules and reduction in the cost of the green ammonia molecules. So on IMO, even though, as I just said, I don't think there will be a lot of movement in the next couple of years, and I hope we will be surprised, we still think that technology and cost and availability of molecules will be the main driver to convince people like ourselves, but also partners that want to decarbonize their fleet to go for ammonia. So in short, right now we're not looking at any LNG projects. Never say never, but our choice of fuel is still ammonia. On your second question on H2-infra and H2-industry, you know these are all very small divisions. They are supporting the business we do on the development of hydrogen and ammonia engines on the industry side. And they are trying to develop molecules, producing molecules, but also sourcing molecules on the H2-infra side. There we have a lot of ongoing discussions with suppliers in China and India. to buy molecules for our fleet of next year. Nothing we can announce yet, but as soon as we have news on that, we will definitely let you know.

And maybe just as a follow-up, I mean, any change in the attitudes or the appetites of miners to conclude longer charges since the decision of the IMO has been made public?

That's again a very good question, Christophe. I think there's three categories of people. People like us that were convinced before the IMO discussion that we should decarbonize our fleet. And we have a couple of customers, as you saw in April with the deals that we announced, that will continue down that path. So people that were convinced are continuing to engage with us and continue their investments. There's another category of people, and that's still the vast majority in shipping, that take a very much wait-and-see attitude and that don't do anything and basically wait to see how this will evolve. And then the category in between, people that were hesitating a little bit, I think we definitely lost part of them, that they are not looking at it anymore and more than the camp of wait-and-see. But some others still continue to engage and ask questions. So it's a little bit of everything. The conclusion for us is simple. Had the IMO decision been taken a couple of weeks ago, it would definitely have propelled our business plan to a much higher speed. But it doesn't slow down our business plan, and it doesn't change our business plan. But it would definitely have helped.

Okay, clear. Thank you very much. Thank you, Christophe.

The next one is Clément Mollet. You may now unmute, please.

Hi, good afternoon. This is Clement. I'm from Value Investors Edge. I wanted to start by asking about your interest expenses for the quarter. Did those include any one-offs or is it, let's say, a clean quarter?

Good question, Clement. There's two things. Obviously, when you do leveraged buyouts, those bridges are somewhat more expensive. um we had 1.3 billion we've reduced that to close to 220 million uh end of quarter um but that definitely has explained our q2 and q3 figures of elevated interest expense on second point there is a obviously when we did those um acquisitions both from a year and a half point of view but also goal notion we had a back financing of re-leveraging the fleet to be able to pay back. And those refinancings, you always incur arrangement fees with the banks, and these you have to write off over the length of the financing. So if you refinance $2 billion over five years, you pay a percent arrangement fee, you're going to add $4 million of interest expense every year. And as we've been doing a lot of these, these obviously are increasing. uh the total interest expenses um that said i think only in the last uh three weeks we've been able to look at our total financing package uh where we had an average of you know software plus 275 throughout all our financings now we are actively working billion per billion to reduce that by 100 to 125 basis points So this is more going to be a topic of 2026, of optimizing our financing portfolio and costs as part of, I would say, integrating the businesses and optimizing our balance sheets.

Thanks for the call, that's helpful. My second question is also on the modeling side. First, should we expect G&A to come in at around 34 million as well in Q4?

and secondly where do you see the run rate on the gna front once you've realized any potential synergies from the merger with golden ocean yeah i think it's a it's a valid question uh when you do large-scale transactions you always incur a lot of lawyer fees auditor fees you know financial advisory fees and others and we've been doing that two years in a row doing multiple billion dollar transactions that has not helped our sdna full stop It is a review that we're making while we are integrating the teams, optimizing the insurance packages, the IT systems and everything like in normal M&A processes. This will be optimized. To put the actual figure, Clements, I think it's hard to say. I think 2026, give us a couple of quarters and you'll see those SG&E naturally normalized, I would say.

Makes sense. Thank you. And final question for me. Does the $1.57 billion in remaining commitments include the capex on the recent CSOV new build addition?

No, that's a good point. So in the Q4, we'll add that. Currently, as Alex mentioned, it's one ship. We can't disclose the new build price, but it's somewhat higher, I would say, than your smaller CSOV. But that is going to be added to the total capex.

Okay, perfect. I'll turn it over. Thank you for taking my questions. Any comments?

Then next up is Christopher. You can now unmute and ask your question, please.

Hello. Good afternoon. Can you comment a bit on when the options on the CSOVs are lapsing and when is the delivery of the optional vessels? In order to declare them, would you need to see any long-term contracts in the division or to put it differently, what do you need to see to declare these options?

We have a lot of time, so close to a year to declare the option. And then, of course, the options thereafter. Of course, the earlier we declared, the earlier the vessels could deliver. We're looking at deliveries in 2028 and 2029. Answer in terms of contracts, it's not a must-have to have a contract to lift the option.

Of course, if we get a contract straightaway, we could lift the option earlier, but we could also lift without a contract.

Perfect. And moving over to the tanker division, what type of time-shutter levels would you need to see in order to de-risk estimates here? It seems like rates are starting to move up quite fast.

Christopher, where do you pick the five-year? What do you pick a five-year for modern VLCC?

That's probably just below 50 or something.

so clearly that's not something we would do right now i mean we could still change our mind of course um but i think uh you know the the market would need to be uh higher on on long term and i'm talking five years plus them in order to consider so current rates are for us for our modern tonnage and i stress on modern tonnage uh we would need to see more and final one for me um in terms of the bond process you had on going

Can you just comment a bit on how you're looking to refinance the bond next year? Is it still only debt instruments with an equity covenant and not value just equity?

Yes, great question. I think we stopped the bond process because we had much cheaper alternatives. Christopher. So in that same flow, we are anticipating paying back the bonds with our own free cash flow, sale of assets and own liquidity. We don't anticipate the bond process to be reinitiated anytime soon. It's a cheap bond, six and a quarter. So we'll probably leave it to run until September 26th. um and if you know the way it's continuing uh not just the bond but also on the bridge uh we feel that we can pay this uh uh with our own means uh so we don't foresee any uh equity issuances or debt capital markets in the coming quarters thanks of course that's it from it thank you thanks the next up is uh axel you may now unmute and ask your question please

Thank you. Three questions for me. One, how do you see potential removal of US sanctions on Russian oil to influence the tanker market and the tanker rates? Second question, if the Guinea volumes on the iron ore just started replaces the Australian exports to China, how do you see this outlook, all this influence in the bullish outlook on the tribal market for the large tribal carriers? what kind of optimal financing structure kind of leverage are you looking for after you're taking delivery of your new billing program?

Okay, I'll take the two first questions and then maybe Ludovic you can comment on our finance structure. So on Ukraine, I think the easy thing to say is that before the fully-fledged war started in 2022, or when you look at the effect of the war, it was definitely positive for crude oil tankers. So if you would unwind it, one might say logically it will be negative. In our opinion, it's way too early to say, and actually we don't know. Maybe in theory, relief of sanctions on Russia could be negative for our market because then you unwind everything that has been put in place over the last two or three years. But in practical terms, I think there will be a lot of different levers that will play an impact on that. So the short answer to your question is we don't know what the impact will be. On Guinea cannibalizing Australian volumes, because I think that's what you mean, I think two things need to be said there. On iron ore specifically, you have to know that the very beginning, all the volumes are going to China and are actually being transported by Chinese ships, which is taking away capacity, so it's supporting the market in general. Going forward, of course, as we see a ramp up, and there would be any cannibalization, The logical immediate effect is that you're replacing short-ton mile with long-ton mile. So the effect is relatively positive. If on top of that you would see that the price of iron ore starts falling, you might push out some producers that have a higher break-even level. And again there, we think that will rather stimulate the high or the long-ton mile than the short-ton mile. All in all, cannibalization of volumes, of Australian volumes and replacing them by Guinea volumes, we think it will definitely have an impact on the market. But on a net basis, it could actually be positive.

It's on the structure. And then actually on the optimal loan-to-value, I mean, we are indicating a 50% loan-to-value throughout the cycle. We're somewhat north of that. So after the full delivery new building program assimilated, and most of it is going to be end-26, I think out of the 1.5 billion, we're taking a delivery of 1 billion worth of ships in 26. So thereafter, it's only a few ships that are on long-term planters. We're definitely targeting the 50%. But in your 50%, I think it's important to look at What is the cost of those financings? We still have some expensive leases on board. We still have bonds. We still have bridges. I think it's also the work in the next two quarters to take out, I would say, the more expensive debts, replace it by inexpensive financing, which is readily available for companies like us at this stage.

Thank you. Just a short follow-up. Maybe you partly answered that earlier, but could we then expect a fixed payout ratio or an explicit dividend policy different from what you have or don't have today?

No, we don't have. It's a fully discretionary dividend policy. I think while our balance sheet and our company is still in transition, I think that's an important one to say. We need to keep the flexibility to decide on every dollar that goes down on debts, M&A, new builds, rewarding shareholders to share back our dividends. So we're not going to go for a fixed payout any time in the short future.

Okay, many thanks. That's all from me.

And we have a few questions in the Q&A, so I will ask them. The first one, is it correct that the 2026 FCF sensitivities assume $180,000 a day in VLCC rates for the whole of 2026? Iso, can you provide more color on the factors behind such an assumption?

Sure. And it's 118, so 118 and not 180. I think this is not a projection. We are not believing that this could hold on for a year because we don't know. We are in a kind of market where it could go any way right now. Supply-demand looks positive, like Alex mentioned. We just want to show the free cash flow capacity. If at $118,000 a day for a full year for VLCCs, which is relatively small in our spot exposure compared to our dry bulk, where we anticipate $34,000, on new customers we're actually we're at 44 000 right now if you look at the market so it's it's just an assumption to show the operational leverage and the free cash flow generation capacity of our company hence it is strengthened by the belief that we will be able to pay back the bridges and the bombs uh and our new builds capex just by own cash flow we're fixing q4 already you know deep down q4 and we're starting to fix q1 So Q4 and Q1, there is a good likelihood that we are hovering around elevated levels. Is it going to be 118? We don't know. But is it going to be 34 for Newcastle Maxis? We don't even know as well. This could go up.

All right. Then the second question, what are your expectations for the Simandou mine opening? How important is the service to the offshore oil market OSVTU going forward? There are some very old vessels in operation by competitors. What are our depreciation rates?

So on Simandou, I think we've highlighted this already many times, that is of course going to be a meaningful impact as it ramps up to its full capacity of 120 million tons of extra iron ore. I think on the offshore market, we can be very clear. We have our CTVs for the offshore wind specifically. We have six CSOVs, which are a very meaningful investment of close to half a billion dollars, where we definitely want to continue to fix them well, short-term and long-term. We have now one extra CSOV, Excel. If it is successful, if we see traction with our customers, we will definitely order more. And the last question.

On depreciation rates, we depreciate, I think, 20 years to scrap. Now, on OSVs, the scrap is relatively light. So you can assume close to zero. But these are depreciation that we use on the offshore investments.

And we have one more question live. So, Kylian, you can now unmute and ask your question.

Good afternoon. Good morning, everyone. from ING. I have a couple of questions. My first question is with regard to the tariffs. Have you calculated what the impact was of tariffs on your company, let me say, between 3rd of April and the end of September? That's my first question. And the second question is about, let me say, if you look at your fixed contracts, 295, I think, 294 in that range. What do you think it will be at the end of 2020, 2025?

That were my two questions. Okay, thanks. Yeah, thank you, Céline. I'll answer your second question first. We have the intention, of course, to increase it. I think we've been very vocal about that. We want to take more cover when markets are high. We don't have a fixed target because a lot will depend on the market and what people are willing to offer us. But we definitely want to grow our fixed contract cover. The first question on the tariffs. Apart from the effects on the market in general with rerouting of ships and what this has had on some of our vessel fixtures, we have actually none or very little impact on tariffs. Our container ships, container ships are the ones that are more affected, are chartered out. So there it is, of course, an issue for our customer but not directly for us. And on the two other segments that would call the United States or would carry goods to and from the United States is dry bulk and its oil. And on dry bulk, we do very little to the United States. On oil, as you know, this has been exempted. So, in short, the impact of tariffs on us, on CNB Tech specifically, has been close to zero. Of course, the side effects on the broader market of rerouting of ships and people wanting to have Japanese or Korean-built ships to go to China and vice versa for China, that we have felt a little bit. But I must say that right now the effects are very limited.

Does that also mean that the end of tariffs is... does not have any impact in, let me say, 2026.

Well, again, I think now I'm talking as a shipping player in general, tariffs are always bad. We prefer not to have any tariffs because then trade can flow freely, and that means more opportunities for our ships to trade. So, again, I don't want to create a wrong impression. We are very much in favor of tariffs going away because that creates more trading opportunities for our ships. If you go on a micro level, what has happened in the United States compared to our fleet, there the impact has been limited.

My final question is about the, let me say, the order ratio for the VOCs US max. That is now above 12%, as I understand from your graphs. What is the delivery time of these vessels? That's mostly 26, 27. Is there anything to add to that in terms of when it is coming and what the impact might be?

Yeah, so it's 15% for VLCCs and 20% for Suezmax, so it's actually higher than the 12% you mentioned. 26, 27, we don't see any meaningful capacity that can still be added to the order book, but 28, we are seeing new yards or existing yards with extra capacity still coming on stream, so that number by 2028 could still go up. That's my belief.

and today again if if you would want to jump on these slots i mean we had one shipyard in china offering early slots for and 27 being 28 but any conventional yard as you see in the news flow you know uh on on the specific shipping news you are starting to talk n28 if you deliver to the if you order today beginning 29 even 2030. So shipyards are, you know, getting, you know, filled up with the current slots. As Alex mentioned, you can have new yards, you can have new capacity coming online as well. But definitely the traditional delivery time for VLC and Swayze Maxis are quite long now. Okay, thank you.

Thank you.

We have two additional questions written. So the Q4 2025 bookings for VLCCs look low versus the market rates. Can you comment on why?

It has to do with the trips that our vessels have been doing, and I'm supposing people are referring as well to some of our peers. There's some creative bookkeeping sometimes, load to discharge or discharge to discharge. But there is also a fact that some of our vessels are slightly older, and of course are earning less than more modern vessels that are operated by our peers. We just took delivery of one very modern ship. but we still have some tonnage which is 13 years old and which is logically then earning a little bit less because the vessels burn more fuel.

And then the last one, can you discuss the relationship between nukes and capes historically and going forward? Will this change go forward?

Well, the relationship is they move the same cargo. One ship is just five meters wider and carries 25,000 to 30,000 tons more. Cape sizes traditionally have been the workhorse of the fleet, but Newcastle Maxis are taking this over now because it is relatively cheaper just to build a slightly bigger ship than a cape size 180K. So same cargo, same trades. perfect i think that concludes the questions all right well then we will close this earnings call by thanking all of you for having dialed in and looking forward to speaking to you in the following weeks months or maybe on the next earnings call thank you very much thank you bye