Okeanis Eco Tankers Corp.

Welcome to OET second quarter and first half 2022 financial results presentation. We will begin shortly. Ioannidis Alafouzos, CEO and Chairman Aristides Alafouzos, COO and Konstantinos Economopoulos, CFO of Okeanis EcoTankers will take you through the presentation. They will be pleased to address any questions raised at the end of the call. I would like to advise you that this session is being recorded. Constantinos will begin the presentation now.

Thank you, operator. Welcome to the presentation of OIT's results for the second quarter of 2022. We will discuss matters that are forward-looking in nature. These forward-looking statements are based on our current expectation about future events, including the company's commercial performance, dividend policy, projected capital expenditure, and anticipated debt capital commitments. Actual results may differ materially from the expectations reflected in these forward-looking statements. Starting on slide five, in the executive summary, we review the highlights of the quarters. OET returns to free cash flow generation on the back of improving markets. In particular, we generated net revenue of $36 million, that is 36% up quarter-on-quarter, adjusted EBITDA of $25 million, that is 52% up quarter-on-quarter, and an adjusted profit of $8.5 million, or $0.26 per share. Our fleet-wide PCE for the quarter came in at $29,900, which is 21% up versus the first quarter of this year. At the end of the second quarter, OECD reported total liquidity of $72.4 million, 121% higher year-over-year, and 65% leverage. During the quarter, we have drawn our face-to-ability-linked loan, with uses towards refinancing debt on two of our VLCCs, and also for general corporate purposes. The company is now operating on a fully-delivered fleet, following the delivery of the last VLCC under construction during the second quarter. Our board of directors agree, and we announce a cut dividend of $0.30 per share, or $10 million in total. We are now moving to slide six. On slide six, we provide a summary of trading data for our share and also present OET's total returns since IPO in 2018. Since lifting and adjusted for distributions, assuming reinvested into our stock, total return comes in above 100% to 119% based on yesterday's close. at 130 NOC. Notably, our weighted average buyback price stands at 52.9 NOC and is lower than half of the current trading. We are now moving to slide five, slide seven. Sorry. We summarize our corporate debt and sheltering structure on slide seven. 47% of the company is owned by public investors other than the sponsors. The company owns a fleet of six US maxis and eight VLCCs and is now running on a fully delivered basis, while the average age stands at three years. As you can also see on the slide, our financing mix includes a variety of finance providers, and the group's financial flexibility is also shown through the variety of sourcing its capital. Lastly, three of our vessels are currently on long-term chartering, as appended in the second and third quarter of 2023, while the rest of the fleet is trading either spot or under short-term PC. I will now hand over to Aristides for our commercial and market update. Thank you, Konstantinos.

During Q2, we achieved a fleet-wide PC rate of $29,900 per operating day. Our VLCC generated $18,600 per day in the spot market, a 2% outperformance relative to our tanker peers who have reported Q2 earnings. OAT had a weaker result in Q2 due to IFRS accounting principles, and our decision to reposition most of our VLCC fleet in the West following the disruption in trading patterns after the Russian invasion in Ukraine. the Nisos Anafi, Nisos Lanusa, Nisos Keros, and Nisos Kipnos were all fixed for backhaul voyages loading in West Africa to discharge into Europe, coming open from China. The TCE for these voyages was below the round voyage equivalent of a Middle East Gulf to China, or West Africa to China, or U.S. Gulf to China, but dramatically improved our position. Since the West has begun to self-sanction from Russian oil, new trade routes have emerged for BLCCs, the two most important being West Africa to Europe and US Gulf to Europe. So these voyages freight very well on a round voyage basis, and being short in duration allows us to keep our position in the West, where we're able to choose the opportune moment to fix longer front-haul voyages back to the East, and when the market firms taking advantage of a minimal battle flag. In Q2 and Q3, our Echo Scrubber fleet benefited greatly from the increased bunker prices and spread between BLSFO and HFO, which reached $550 at one point and is currently trading closer to $280 per metric ton. Our SuezMax has generated $41,500 per spot day, an 80% up performance relative to our tanker peers that have reported Q2 earnings so far. We are very happy with our SuezMax performance in Q2. We had 75% of our fleet available, sewage max fleet available for spot voyages when rates spiked in mid Q2 and we took advantage of this by fixing a few short time charters as well as front haul voyages. Similarly to the VLCCs, our sewage maxes took advantage of extremely well priced bunkers in the west that gave a further boost to these time charter crew. Moving on to slide 10, we provide our guidance for Q3. So far in Q3, we have fixed 60% of our VLCC spot days at $31,900 per day, a 72% outperformance relative to our tanker peers that have reported Q2 earnings, and 70% of our sewage max spot days at $60,400, a 109% outperformance relative to our tanker peers who have reported their Q2 earnings. On the Vs, we picked Nisos Kisnos, Nisos Hanake and Nisos Konusa, which were all open in the West, as I mentioned on the Q2 update, for lucrative West Africa and U.S. Gulf voyages discharging into Europe, the shorter round-trip voyages I mentioned again. We like these voyages again because they freight very well while they're short and the vessels remain in the West. This gives us optionality to capture spikes in the market more effectively with our smaller fleet when compared to our larger competitors. In addition, Nisos Kea and Nisos Nikolia will re-deliver from their short launch time charters after their delivery this year, in the end of Q3. This will bring our spot exposure on the Vs to 7 of 8 vessels, right before the historically firm winter market of Q4. Our only vessel left on time charter, as Kostadinov mentioned, will be Nisos Lispotko, which has 10 months left at around $48,000 per day. We're very happy with our performance on the Suez Max as well. We've managed excellent triangulation on the fleet, as well as taking short-term time charters that will re-deliver the vessels and Q3 in time for the winter market. On all segments, but Suez Max in particular, have benefited from Europe's need to replace Russian crew. Cargo from the U.S. Gulf, West Africa, and the Aegean have become much more frequent. We do not anticipate this to end and believe that the crude segment will be able to triangulate and reduce ballast days while optimizing TCE for the short to medium term. The evidence of having the most efficient, well-approved fleet has never been more clear again. On slide 11, we look at the change in trade patterns and the effect on the crude market timelines. Starting from the left-hand side, Russian crude exports that would be sold into Europe before the invasion in Ukraine have now shifted to the east, mainly China and India, which are much farther away. Europe, on the other hand, is now sourcing its crude supplies from other crude-buying regions, which are farther away than the replaced Russian crude. We have looked at the change in European crude imports from various trading regions year on year, and it is evident that Europe is gradually shifting supplies from neighboring Russia to further origins. While U.S. Gulf exports can shift on Afromax, Suezmax, or VLCC, West Africa and Middle East Gulf cargoes will move and benefit much more on larger vessels like Suezmax and VLCC. The collective impact is mirrored on the right-hand side in the higher average crew tanker sailing distance, a result that is very positive for our tankers' trade and benefiting ton miles. Moving to slide 12. we focus on the second part of the tanker demand equation, and in particular, trade volumes. Consensus Energy Agency suggests growing seaborne crew tanker volumes from 2021 lows following easing mobility restrictions associated with the pandemic and the end of the supply cuts by OPEC. Drivers in such volume growth over the next couple of years is admittedly soft in the United States. They're expected to contribute 2.5 and 1.6 additional million barrels per day. On the bottom part of the slide, we provide an overview of the incremental volume potential in the event of an easing sanction scenario for Venezuelan crude. In the summary, we would expect an excess of one million barrels per day. In such a case, that could translate to the equivalent of more than 20 additional VLCCs and 10 additional sewage masses. Moving on, slide 13. We take a closer look at key indicators from China. that play an important role in our markets, especially in longer-haul trades associated to VLCC. The Chinese government is supporting weak domestic production through elevating infrastructure spending to help the country recover quickly from the pandemic. Mobility restrictions are scarcer and seem China is moving away slowly from the pandemic, and this is reflecting poor congestion, now standing at pre-pandemic levels. Chinese liquid demand is also pointing towards that direction. Chinese demand will be the key driver to change tanker earnings and move them materially higher again. Moving to slide 14, we look at the constructive fundamentals for the tanker supply side. We believe that we're looking at the best medium-term supply fundamentals for our sector in more than a decade. The order book is at a historically low level, which combined with declining yard capacity suggests that fleet growth will remain manageable for years to come. including earliest deliveries being in mid-2025 for a substantial amount of ships. Regulatory pressures are expected to amplify the positive supply outlook. More than 30% of the crew tanker fleet is expected not to comply with carbon intensity ratings, and owners of such vessels will need to reduce speed to comply. Hence, we expect our competitive advantage to be strong in the coming years and continue being Charter's first choice to perform voyages at optimum speeds. Moving on to slide 15 now, and adding everything together, we believe that the combination of growth and absolute seaborne crude trade volumes, longer voyage distances, constructive supply side, and elevated demand for crude assets in this S&P market is expected to improve vessel utilization, charter rates, and assets values. The current pricing of second-hand vessels is translating to meaningful discounts to replacement costs, signaling upside potential and re-rating on second-hand values. We expect an improvement in charter rates together with a very tight S&P market to be reflected in asset values in the short to medium term. To give you a short update on S&P activity, we have seen a material uptick in values. In June, $95 million and $98 million was paid for a 2020 and a 2021 built VLCC, which is up from last done at $90 million. In the past week, a 2020 built VLCC was sold for $108 million, and the deposit for this vessel has been lodged to the seller. Now, handing you back to Kostadinos to give you an overview of our financial information.