Okeanis Eco Tankers Corp.

Hello to OET and welcome to OET's second quarter 2023 financial results presentation. We will begin shortly. Aristides Alafouzos, CEO, Herakles Zbarounis, CFO, and Konstantinos Economopoulos, Chief Development Officer 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. Hieraklis will begin the presentation now. Please go ahead, sir.

Welcome to the presentation of Okeaneseco Tankers' results for the second quarter of 2023. We will discuss matters that are forward-looking in nature, and actual results may differ from the expectations reflected in these forward-looking statements. Starting on slide four and the executive summary. I'm very pleased to present you the highlights of the third consecutive record-breaking quarter in terms of TCE revenue, EBITDA, and net income. Q2 was a historically excellent quarter, especially accounting for seasonality. Our fleet achieved a fleet-wide time-charted equivalent of $72,000 per vessel per day, and that includes our time-charted vessels. Spot rate across bull shoes, maxes, and VLCCs stood at about $83,000 per vessel per day. We report net EC revenue of over $90 million, a further increase from Q1, adjusted EBITDA of over $77 million, and adjusted net profit of $1.65 per share. Finally, our board has declared a fifth consecutive capital distribution of $1.50 per share. that is over 90% of our quarterly EPS and implies an annualized yield of 24% against our current trading price. We continue to deliver on our promise to distribute all available value to our shareholders. Over the last 15 months, we have distributed approximately $5 per share, or a total of 160 million. As in every quarter, We very carefully evaluated all available information related to the market outlook, global economic data, and our balance sheet, including preparing for the upcoming repayment of our $34 million sponsor's debt by Q1 and Q2 of next year, as well as our current fixtures of Q3. We're now moving to slide five. On slide five, we summarize our corporate and capital structure, as well as our employment profiles. Our track record, solid financial position, and strong relationship with our financiers continues to pay off. We recently announced the refinancing of the Kimolos, Polejandros, and Isoskeros at very accretive terms and matured it in 2028. Furthermore, we have declared our first purchase option under our sale and lease by financing over Sous-Max Vessel Milos. The transaction will close in February. Our other Sous-Max, the Poliagos, is next, with its purchase option kicking in in June. we expect to replace the debt of both the Nilos and the Polyogos at considerably improved terms. On the employment front, following the delivery from our charters of the Nisos Despotikos, all our VFCCs are now trading in the spot market. Our two Suezmax long-term time-chartered vessels, Nisos Tsikinos and Nisos Tsikinos, are expected to be delivered to us sometime within the fourth quarter of this year. More on that and the full commercial and market update from Aristides on the following slides.

Thank you, Rekli. Again, it was another record quarter for OEP. We entered Q2 coming off a very firm freight market, with VLCCs earning over $100,000 per day. The market was poised to adjust downwards, but was further magnified by the announcement of the OPIC Plus voluntary cuts. We found it very positive that VLCC freight took about one month to adjust before we saw another large spike in rates. This shows that even with the removal removal of barrels and therefore cargoes from the market by the OPEC plus voluntary cut, the fleet is well balanced and the ton mile effective sourcing crew from farther distances gives support. As we approach the summer, we took the decision to lock in longer and higher paying front haul fixtures from our west position. Simultaneously, we tried to reposition our eastern positions to the west when we found good opportunities. The Swiss NAC segment had a much stronger rally in the middle of Q2 in the VLCC and allowed us to lock in some very strong returns. Also, many of our fixtures from Q1 carried into Q2, which gave support to our final numbers. Milos was re-delivered from her time charter and will now trade in our spot fleet. During the quarter, we achieved a fleet YPC of $72,000 per day, including our time charters. Our VLCC generated $74,800 per day in the spot market, a 30% outperformance relative to our tanker peers who have reported Q2 earnings. Our SUISMA active generated $99,900 per spot day, a 60% outperformance relative to our tanker peers who have reported Q2 earnings. These numbers reflect our actual book TCE revenue within the quarter as per our accounting standards. Moving on to slide eight for guidance on Q3. Once again, the Saudis lollipop surprise oil cut surprised the market. and cut production again going into Q3. The Saudi cuts and their high OSPs have created a situation where Dubai Crude actually sells at a premium to Brent Crude today. The ARB is now open for Shara Crudes to move from the Atlantic Basin to the east. The headline news is negative, but the subsequent shifting of oil dynamics continues to give strong support to the VLCC market. One other development on the VLCCs was that the amount of vessels fixing from the West, like Brazil, West Africa, the U.S. Gulf, back into Europe, reduced as Asian demand for these barrels outpriced them. This caused more BLCCs to fix longer voyages to the East and leave fewer ships open in the West. Not having as many natural Western BLCC positions to offer into Western cargoes, balusters from the East would have to price Western cargoes in line with a similar TCE as AG cargoes. This gave further support to Western long-haul voyage freight routes. Taking this into account, we felt it was time to capitalize on summer strength and fix longer voyages to the east. We locked in four solid fixtures. In addition, we repositioned another two ships in the east that were open to keep our western presence. Nisos Despotikos was re-delivered from her time charter, and now 100% of our VLC seatlates is trading spots. In addition, Nisosiknos and Nisosiknos entered their delivery window from their long-term time charters, but we expect the vessels to be given back sometime in Q4. This is the first quarter since the war began where the Suez Maxes underperformed the VLCC fleet. This development was caused by the Western barrels that would have been sold into Europe on Afrin Suez being replaced by long-haul voyages on VLCCs. but also the Russian voluntary cut, which greatly reduced the amount of price gap voyages and left vessels competing for left business, and also the continued outage of Kurdish barrels being exported from Turkey. With oil approaching $90 a barrel, the return of Saudi, Russian, and Kurdish barrels in Q4 can be the stimulus for a massive rally in freight. China is expected to receive 52 million barrels in oil cargos in September, a 40% increase versus this month. With the weaker Sewer's Max market, we focused more on triangulating to optimize earnings. This quarter, we also have to dry dock cumulus and phalaenopsis in Turkey. Positioning for dry dock and certain limitations on what cargoes we can fix for the first voyage post-dry dock will negatively affect their spot performance. We've decided to upgrade the space specification on these two vessels, and we expect to see a consumption reduction of between 7.5% and 10%. So far in Q3, we have fixed 73% of our fleet-wide spot days at $63,200 per day, 76% of our VLCC spot days at $65,800 per day, a 46% outperformance relative to our tanker peers who have reported, and 65% of our sewage max spot days at $55,600 per day, a 16% outperformance relative to our tanker peers who have reported Q3 earnings. We continue to outperform our peers on both vessel segments, and we will do our best to keep this up in the future. Currently, our average outperformance since Q4 2019 is 40% on SWISMAXs and 20% on VLCCs when compared against our additional peers. Moving on to slide 10, we again highlight the future ton-mile demand story with a continued total increase in world oil demand, while the majority of this will come from the Asia-Pacific region. But as we see in slide 11, Cargo volumes will be added predominantly in the West. Given the current demand outlook and the inability for vessels to be delivered until 2027, vessel utilization we expect will approach record percentages in 24 and especially in 25. On slide 12, we take a brief look at the effect of the voluntary OPEC plus cuts and the additional Saudi and Russia cuts. OPEC stated earlier this week that the market may be undersupplied by almost two million barrels per day. The rate of stock depletion will require more supply to this market. Moving on to slide 13, another short-term bullish indicator is the strength in refinery margins that are continuously strengthening at historically very high levels. This is another sign of the need of supply of both crude to be refined and lack of products in the market. Now, taking a look at the supply side on slide 14, we wanted to highlight how different the fleet situation is to 2008. We almost have zero order book with a rapidly aging fleet which only increases as we go into the end of this decade. The amount of fleet renewal that will be needed for a 15-year or younger fleet to service the normal trade is astounding. I'm now handing over directly for the financials.