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spk01: Thank you for joining us for Navios Maritime Partners' first quarter 2023 earnings conference call. With us today from the company are Chairwoman and CEO, Ms. Angeliki Fango, Chief Operating Officer, Ms. Estrada De Cipres, Chief Financial Officer, Ms. Aerie Cerrone, and Vice Chairman, Mr. Tepe Trone. As a reminder, this conference call is being webcast. To access the webcast, please go to the investor section of Navios Partners website at www.navios-mlp.com. You'll see the webcasting link in the middle of the page, and a copy of the presentation referenced in today's earnings conference call will also be found there. Now I will review the safe harbor statement. This conference call could contain forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995 about Marriott's partners. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Navia's partners' management and are subject to risks and insurgencies, which could cause actual results to differ materially from the forward-looking statements. Such risks are more fully discussed in Navios Partners' filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks. Navios Partners does not assume any obligation to update the information contained in this conference call. The agenda for today's call is as follows. First, Ms. Van Gogh will offer opening remarks. Next, Mr. DeCebris will give an overview of Navios Partners' segment data. Next, Ms. Cerrone will give an overview of Navios Partners' financial results. Then Mr. Patron will provide an industry overview. And lastly, we'll open the call to take questions. Now I turn the call over to Navi's partners, Chairwoman and CEO, Ms. Angeliki Frango. Angeliki?
spk08: Good morning to all of you joining us on today's call. I am pleased with the results for the first quarter of 2023, in which we reported revenue and net income of $309.5 million and $99.2 million, respectively. We are also pleased to report net earnings per common unit of $3.22 for the quarter. Navios Partners is a leading publicly listed shipping company diversified in 15 asset classes in three sectors with an average vessel age of about 9.6 years. We have 173 vessels split roughly equally in three sectors based on a charter-adjusted value. In addition to diversification, we have been actively managing our portfolio to maintain a younger, more technologically advanced fleet as we believe the newer technologies are a competitive advantage both in terms of operating efficiencies and also for fuel emissions. We have rationalized our fleet by selling old vessels and acquiring new vessels. As I said last quarter, we are also focused on reducing leverage rates. Most recently, we reduced our net LTV to about 42% in the first quarter of 2023 from about 45% in the fourth quarter of 2022, measured for vessels in the water. Our stated goal is to continue to reduce leverage so that our net LTV falls within a range of 20% to 25%. Please turn to slide seven. We continue to finance a new building program on attractive terms. Since our last earnings, we secured $438.6 million of new financing at an average margin of 1.8%. $343.6 million of which financed six new building vessels. We have also refinanced $95 million for eight tanker vessels at the same average margin. We have also taken advantage of market conditions. to secure $161 million of long-term contracted revenue and to sell vessels generating $242.2 million in gross sales proceeds. As to contracted revenue, we have secured $52.7 million for two tankers over 2.7 years and $107.8 million for seven container ships over two years. For sales, we sold eight vessels for $160.3 million in the first quarter of 2023 and expected to close on the sale of the remaining five vessels for an additional $81.9 million in the second quarter of 2023. Our operating cash flow is strong. For the remaining nine months of 2023, our revenue is expected to exceed total cash cost by $70.2 million. With 15,469 open and index days, we would expect to generate significant additional cash in 2023. Please turn to slide 8. We implemented our diversified strategy in late 2020. Since then, we have made three significant acquisitions. A container ship company with 29 vessels in the first quarter of 2021, a tanker company with 45 vessels in the third quarter of 2021, and a 36-vessel dry-bike fleet in the third quarter of 2022. As a result of this transformation, our financial performance has strengthened materially, which this slide demonstrates by referring to adjusted EBITDA. A $155.4 million of Q1 2023 adjusted EBITDA represents a 23.2% increase over the first quarter of 2022 and 361.1% increase over the first quarter of 2021. Our 2022 adjusted EBITDA of $667.9 million represented a 56.6% increase compared to 2021 and a 569.2% increase compared to 2020. I now turn the presentation over to Mr. Stratos, the Cyprus Navier Partners Chief Operating Officer. Stratos.
spk00: Thank you, Angeliki, and good morning all. Please turn to slide 9, which details our strong operating free cash flow potential for 2023. We fixed 63% of available days at an average rate of $27,688 net per day. Our contracted revenue exceeded expected total cash expense for the remaining nine months of 2023 by over $70 million. We have 15,469 open and index-linked days that will provide additional profitability once fixed. Slide 10 demonstrates the basic principles of our diversified platform in action. We aim to benefit from countercyclicality, which creates the opportunity to deploy cash flows from well-performing segments into assets in underperforming segments. We believe a diversified asset base moves volatility on our financial statements. You can see this dynamic playing itself out in our asset base. As of Q1 2023, container values dropped by 4%, while dry bulk and tankage vessel values increased by 9% and 2% respectively. In sum, the net change to our fleet value is an increase of approximately 3%. Multiple segments also allow us to optimize chartering. In segments with attractive returns, we can enter into period charters. In other segments, we can be patient. As you can see from the chart on the bottom of the slide, we have fixed 86% of our 13,602 total available days for the second quarter of 2023, at a net average rate of $25,654 per day. Our container ships are 100% fixed at $38,613 net per day, our tankers 90% at $28,033 net per day, and our dry bulk fleet is 79% fixed at $17,458 net per day. In slide 11, you can see our fleet renewal activities. We are always renewing the fleet so that we maintain a young profile, benefiting from newer technologies and more carbon efficient vessels. We have 1.4 billion remaining investment in 21 new building vessels that we deliver to our fleet through 2026. In our container ships, we are acquiring 12 vessels for a total of $860 million. We hedged our investment by entering into long-term credit-worthy charters, generating about $1.1 billion in contracted revenue for about six and a half years' average duration of the related charters. In the tanker space, we entered the LR2 Aframax subsector by ordering six vessels for a total price of approximately $380 million. These vessels have been chartered out for five years at an average net rate of $26,580 net per day, generating revenues of approximately $290 million. We have also ordered two high-spec MR2 vessels for about $80 million. Finally, on the dryback fleet, we have one cape-sized vessel on order that will be delivered in June 2023, which has been chartered out for five years at a net rate of almost $20,000 per day. We have been also very active in opportunistically selling older vessels tailored to segment fundamentals. Year-to-date, we have sold a total of 13 vessels with an average age of approximately 14.5 years for 242.2 million. We sold seven tanker vessels for a total consideration of about 160 million, taking into advantage a strong tanker market and the corresponding increase in demand for second-hand tonnage. Also, we sold six dry bulk vessels for a total price of 82.4 million. Moving to slide 12, we continue to secure long-term employment for our fleet. As Angeliki mentioned earlier, in Q4, we have created over 160 million additional contracted revenue. Approximately 110 million relates to seven container ships chartered for an average of two years at an average net rate of $21,296 net per day. Also, we have contracted two tanker vessels for an average duration of 2.7 years at a net rate of $27,089 per day, expected to generate over $50 million in revenue. Our total contracted revenue amounts to $3.4 billion. 0.8 billion relates to our clunker fleet, 0.4 billion to our dry pile fleet, while 2.2 billion of our contracted revenue comes from our container ships with charters extending through 2036 with a diverse group of quality counterparties. About 55% of this contracted revenue from container ships will be earned in the next two and a half years. I now pass the call to Eri Cironi, our CFO, which will take you through the financial highlights. Eri? Hi.
spk06: Thank you, Stratos, and good morning, all. I will briefly review our unaudited financial results for the first quarter of 2023. The financial information is included in the press release and is summarized in the slide presentation available on the company's website. Moving to the earnings highlights in slide 13, total revenue for the first quarter of 2023 increased by 31% to $309.5 million compared to $236.6 million for the same period in 2022. Time charter revenue for the period is understated by $13 million because U.S. GAAP rules require the recognition of revenue for our charters with de-escalating rates on a straight line basis. Available days increased by 24% to 13,908 compared to 11,228 for the same quarter last year. Our average time charter equivalent rate increased by 2% to 20,811 per day compared to 20,386 per day for the same period in 2022. In terms of sector performance, both tankers and containers enjoyed improved rates compared to the same period last year. TCE rates for our tankers increased by 86% to 28,477 and for our containers by 29% to 34,987. In contrast, our dry fleet TCE rate was 45% lower compared to the same period last year at 10,998. EBITDA for Q1-23 increased by 50% to $188.8 million compared to $126.1 million for the same period last year. Time charter and voyage expenses increased by $22.7 million as a result of higher bunker expenses as a number of our vessels were employed on freight voyages and higher bear boat and charter in high expenses following recent vessel acquisitions. Operating expenses and general administrative expenses increased mainly due to the expansion of our fleet. Net income for Q1 2023 increased by 16% to $99.2 million compared to $85.7 million in Q1 2022. Earnings per unit were $3.22. Net income was negatively affected by a 22.3 million increase in interest expense, mainly as a result of the increase in our average interest rate cost from 3.7% in Q1 2022 to 7% in Q1 2023. Turning to slide 14, I will briefly discuss some key balance sheet data. As of March 31, 2023, cash and cash equivalents were $213.2 million. In Q1 2023, we paid $62.1 million of pre-derivery installments and other capitalized expenses under a new building program and $51.3 million for vessel acquisitions and improvements. We sold eight vessels for $157.7 million net adding $100.8 million cash after the repayment of their respective debt. Our other current assets decreased mainly due to the decrease in accounts receivable from charters which were settled post-year end. Our other current liabilities decreased following the payments made in accordance with the Vessel Management Agreement. Long-term borrowings, including the current portion net of deferred fees, amounted to $1.87 billion. Net debt to book capitalization decreased to 38.4%. Slide 15 highlights our debt profile. We continue to diversify our funding sources between bank debt and leasing structures, while 32% of our debt has fixed interest at an average rate of 5.6%. We also try to mitigate part of the increased interest rate cost, having reduced the average margin for our floating debt by 50 basis points to 2.6% from 3.1% in Q1 2022. Our maturity profile is staggered with no significant balloons due in any single year. Slide 16 gives an update of the Q1 2023 debt developments. In terms of our new building program, approximately 75% of our new building debt is already concluded, or 91% if we include those in documentation phase, at an average margin of 1.8%. We have used the opportunity to expand our financing resources, adding new banks and lessors, while we have also included our first export credit agency-backed facilities in China and South Korea. Finally, we have arranged 95 million of new financings for existing vessels at an average margin of 1.8%, representing an improvement of 171 basis points from the previous financings. Thanks to slide 17, you can see our ESG initiatives. We aspire to have net zero emissions by 2050. In this process, we have been pioneering by investing in new energy-efficient vessels and reducing emissions through energy-saving devices and efficient vessel operations. NAVIOS is a socially conscious group whose core values include diversity, inclusion, and safety. We have very strong corporate governance and clear code of ethics. Our board is composed by majority independent directors and independent committees that oversee our management and operations. I now pass the call to Ted Patron to take you through the industry section. Ted?
spk09: Thank you, Ari. Please turn to slide 20 for the review of the tanker industry. World GDP is expected to grow at 2.8% in 2023 based on the IMF's April forecast, and is forecast to be 3% in 2024. There is an 85% correlation of world oil demand to global GDP growth. In spite of economic uncertainties and the Ukraine crisis, the IEA projects a 2.2 million barrels per day or 2.2% increase in world demand for 2023 to 102 million barrels per day, exceeding 2019 pre-pandemic levels. China, in particular, accounts for 60% of global oil demand growth in 2023, rising 1.3 million barrels per day, or 8.8% over 2022, to average an all-time high of 16 million barrels per day. After a strong Q4 across all asset classes, firm tanker rates continued in 2023 on the back of strong supply and demand fundamentals, minimum fleet growth and shifting trading patterns resulting in longer haul trade routes, especially for Suez and AfriMax. Recent declines in U.S. crude exports and OPEC cuts, although less than the headline numbers, have put downward pressure on VLCC rates, particularly out of the MEG. Turning to slide 21, tanker rates across the board remain strong due to previously mentioned supply and demand fundamentals combined with the invasion of Ukraine, which has shifted Russian crude and product exports to long-haul routes out to India and China. Additionally, European refineries are replacing Russian crude with products with supply from the U.S., Brazil, and the Middle East, further increasing ton miles and trade inefficiencies. Product tankers should also be aided by discounted Russian crude exported to the Indian Ocean and the Far East, returning to the Atlantic as clean product. This could add upward pressure on already strong rates. 2023 crude and product ton-mile growth is expected to increase 5.6% and 10.9% respectively, with continued ton-mile growth in 2024. Turning to slide 22, VOCC net fleet growth is projected at 2.1% for 2023 and negative fleet growth of negative 1.5% for 2024. This decline can be partially attributed to owner's hesitance to order expensive, long-lived assets in light of macroeconomic uncertainty and engine technology concerns due to the CO2 restrictions enforced since the beginning of this year. The current record low order book is only 1.4% of the fleet or only 13 vessels, the lowest in 30 years. Eleven VLCCs will deliver during the balance of this year, none in 2024 and none in 2025 and 2026. Vessels over 20 years of age are 14% of the total fleet, or 127 vessels, which is about 10 times the order book. Turning to slide 23, product tanker net fleet growth is rejected at 1.6% for 2023 and only 0.3% for 2024. The current product tanker order book is 8% of the fleet, or 188 vessels, one of the lowest on record, and it compares favorably with the 9.9% of the fleet or 358 vessels which are 20 years of age or older. Including the tanker sector review, tanker rates across the board continue to strong levels. The combination of below average global inventories, oil demand returning to pre-pandemic levels, new longer trade routes to both crude and products, as well as the Lotus order book in three decades, and the IMO 2023 regulations should provide for healthy tanker earnings going forward. Please turn to slide 25 for the review of the dry bulk industry. Normal seasonality in Q1 and slower than expected recovery in the Chinese economy put downward pressure across all asset classes, particularly Cape size. The Baltic Dry Index, the BDI, averaged only 1,011, a circa 50% reduction from the same period last year, and the lowest quarterly average since Q2 of 2022. Overall, the Chinese reversal of a zero COVID policy and the additional fiscal stimulus combined with the weakening U.S. dollar point to stronger demand during the second half, as indicated by higher import numbers for INR coal, as well as higher futures on all asset classes. Overall, dry bulk trade in 2023 is projected to increase by about 2%. Going forward, long-term supply and demand fundamentals remain intact. China's reopening economy, the historical order book, declining net fleet growth during the latter part of this year and into 2024, softening U.S. dollar and tightening GHG emissions regulations remain positive factors. Please turn to slide 26. With regard to iron ore, following the reopening of the Chinese economy, China's GDP grew by 4.5% in Q1 of this year. Further, China's fiscal stimulus focus on supporting the real estate sector should boost iron ore demand in the second half of 2023. Overall, global iron ore trade is expected to increase by 0.6% in 2023, with trade increasing by 8.1% in the second half of 2023 over the first half of this year. Concerning coal, global coal consumption reached a record 8.025 billion tons in 2022, and that figure is expected to be surpassed in 2023. The Ukraine crisis continues to impact global coal imports as European supply concerns persist. The EU ban on Russian coal will lead to shifting trading patterns toward longer haul routes. Overall, 2023 seaborne coal trade growth is expected to be supported by an estimated 4.4% growth in tonne miles. Additionally, coal trade is expected to increase 5.4% in the second half of 23 over the first half of this year. On the grain side, global seaborne trade volume is negatively impacted by the war in Ukraine, but is expected to increase by 3.2% in this year. Trade route adjustments due to the war are shifting trading patterns to longer haul routes. The global grain trade continues to be driven by heightened food security issues, driven initially by the pandemic. Ton-mile growth is expected to increase by 4% in 2023 due to the war and weather-related crop harvest issues. Please turn to slide 27. The current order book stands at 6.9% of the fleet, one of the lowest since the early 1980s. Net fleet growth for 2023 is expected at 2.4%, and only 0.6% in 2024. As owners remove tons, that has become uneconomic. due to the IMO 2023 CO2 rules enforced since the beginning of this year. Vessels over 20 years of age are about 8.8% of the total fleet, which compares favorably with the historically low order book. And concluding our dry bulk sector review, continuing demand for natural resources, China's reopening, war and sanction-related long or whole trades combined with slowing pace of new building deliveries all support freight rates going forward. Please turn to slide 29 for a review of the container industry. After three consecutive quarters of falling rates, the Shanghai Container Freight Index, SCFI, may have found a floor, at least temporarily, as the index bounced off a low of 907 in March and currently stands at 972, which is still higher above the historical pre-COVID averages. This is mainly due to China's reopening, its 4.5% GDP growth in Q1, and increasing exports and, in turn, increasing box and time charter rates recently. Global container trade is expected to remain under pressure in 23 for macroeconomic issues, including inflation, the war in Ukraine, and elevated deliveries. As you'll note in the graph in the lower right, the U.S. retail inventory to sales ratio is off the recent low, but still low below the long-term average. The graph on the lower left shows a continuing growth in U.S. consumer purchases of goods, which is still above pre-pandemic levels. Imports to the U.S. have slowed, easing port takeaway bottlenecks and port congestion. Containership rates have tightened recently, surprising most analysts as imports continue and newbie deliveries are slow to hit the water. Overall, 2023 container trade is projected to decrease by 1.1% in 2023 but increase by 3.3% in 2024. Turn to the slide 30. Net fleet growth is expected to be 6.9% for this year and 5.8% for 2024. The current order book stands at 28.4% against 11.4% of the fleet 20 years in age or older. About 72% of the order book is for 10,000 TEU vessels or larger. In concluding the container sector review, although supply and demand fundamentals remain challenged due to economic and geopolitical uncertainties, the combination of China's reversal of its zero COVID policy, additional fiscal stimulus, and the IMF's April revision to world GDP growth to 2.8% in 23 and 3.0% in 24 provide a counterpoint to a challenging 23. This concludes our presentation. I'd like now to turn the call over to Angeliki for her final comments. Angeliki?
spk08: Thank you, Deb. This completes our formal presentation. We open the call to questions.
spk04: Thank you. At this time, we will open the floor for questions. If you would like to ask a question, please press the star and 1 on your touchtone phone. You may remove yourself from the queue at any time by pressing star 2. Once again, that is star and 1 to ask a question. Our first question comes from Omar Nocta with Jefferies.
spk02: Thank you. Hey, guys. Good afternoon. First, just wanted to maybe ask strategically about the business and obviously, you know, the balance sheet. You've gotten the net LTV down to 42% from 45 last quarter. Your aim or target is to get it to that 20, 25% threshold. It looks like you're on pace to get there perhaps over the next couple of years. I wanted to ask, is there something you're looking to do strategically when you get to that point versus not being able to do that now? Or is it just simply you're looking to deliver to have that added flexibility down the line?
spk08: Good morning, Omar. I mean, this is – by the way, I think that you got it well. We are well positioned. We are generating the cash. I mean, the first model is performing well. Our $4.5 billion assets in the first quarter generated gas and brought our net MPV from 45% in Q4 to 42%. And basically, you have now three sectors. The containers that were cautious, we saw that they are performing better than we thought. We did over $100 million of contracted revenue from five vessels. over the two years, and we are seeing, and this is actually performing much better than we thought, on the tankers, the other sector we are in, we see structural changes, strong ton-mile demand on crude, strong ton-mile demand on product, restricted supply, and good cash flows, and on the dry bulk, second half of the year, can be, because of China, much healthier than the first half. So with that background, and knowing that we cover all our expenses and we have $40 million above our expenses for the remaining nine months, you know that we have 16,000 days. You do your own calculation of what the rates will be, that every 10,000 we provide $160 million of free cash. And this is about, at the end of the story, about total returns. We bring in our net LTV down to 2025, and it's about our total returns. By doing, we should be able to measure on this total return, and we have, I think we have done well. And I will put a slide on that if you look since 2020 when we started this project. this strategy, this diversified strategy, and we hope that we will do well in the future. It's a patient but also a very steady strategy we have articulated over the last quarter.
spk02: Thanks Angeliki. Yeah, no, that's clear. And then just in general, in terms of how you are, you clearly had the portfolio approach, you're diversified across three segments. And, you know, each market's moving in its own direction, presenting its own opportunities and risks, perhaps. But just to kind of think about where you're positioned now, you've sold some older ships, you've brought in some of that cash. Your new buildings, you've mostly locked away on longer-term charters, so you risk those. In terms of kind of how we think about Navios strategically with, say, whether it's use of cash or just how it looks at its fleet or manages it, should we think Navios in the in the current environment, is perhaps, one, a seller of older ships and then also a harvester of cash flows, and then, three, not going to be as acquisitive on the acquisition front as it has been? Is that fair to say, basically selling older ships, harvesting cash, and not being acquisitive?
spk08: Listen, we are modernizing our fleet. That is a clear path. Getting more efficient vessels makes sense. And your investment is quite significant. We are actually seeing that as we are there to do acquisitions depending on the opportunity. So we are not – it is not – I think what we like about the diversified platform is that we can be able to capture every opportunity that comes to us without being restricted one way or the other. I mean, you remember when we were doing dry bulk in 2021, when we did our containers early on, then we entered a new sector in the tankers. We expanded again on the tanker. So we can be very – we will seek the best, more attractive opportunity. Modernizing the fleet is something that will be always ongoing. I mean, I think that creates on every aspect on the – being more, you know, more efficient, fuel efficient is a driver in the market.
spk02: Thank you. And maybe just one final one for me just about the containers, because clearly that's been a nice source of visibility, and you've paid off a lot of those shifts significantly. So really the free cash is fairly significant from that stream of the business. I just wanted to ask about what we're seeing in the market today. Clearly we went from a very quiet market. time charter market at the beginning of the year to one that's become much more active. And you've been able to put away some shifts that are on the water today on medium-term charters. Just wanted to ask, you do have a few vessels that roll off contract here in the next several quarters, not a tremendous amount, but you do have some that roll off. What do those contract discussions look like? And then maybe are you able to give us a sense of how far in advance of when those shifts would be scheduled to roll off, would you be able to secure them on new contracts today?
spk08: Actually, Omar, this is very interesting. We were cautious about the sector, but we saw very healthy levels. We have basically fixed everything, and Stratos will take you through, but basically we fixed everything at a very good and attractive rate. And what we see from the market is, you know, you can actually secure nice cash flows and visibility from that.
spk00: I mean, no matter on the fixing fraud, I mean, the latest transactions that we did was generated over 100 million of contracted revenue for the next 2.7 years. And if you see also, you can see it in our presentation, we have nothing left opening in 2023. So, okay, we have a vessel that, you know, the delivery period is between, let's say, the end of the year and the beginning of next year, but effectively there's nothing open. So we have fully covered our position on this sector.
spk02: Thanks, Jaros. And I guess, you know, say, for a vessel that's opening up in six or seven months, is now the time that you're having dialogue, or has it become much more of like an August-September time period?
spk08: We have fixed the container sector, basically. We don't have anything open.
spk00: So, yeah, the ones that are coming next year, I think today it's too early to start thinking about that. I think this is a question that we have towards going to the end of the next quarter. You know, at the later part of Q3, this is when we'll start, you know, discussing the market and seeing what is the availability.
spk02: Got it. Okay. Well, thanks, Stratos, and thanks, Angeliki.
spk04: Thank you. Thank you. Our next question comes from Chris Weatherby with Citigroup.
spk12: Good morning. Good afternoon. This is Rob on for Chris. Good morning. I guess just to piggyback on that last question with regard to the container ship market, could you give us a sense of what your expectations are for the back half of the year with regard to volume kind of across the broader industry. And it sounds like we're starting to see a little bit of seasonality return to the container ship trade and how that kind of fits into your time charter approach. It would be great to get a little bit of color there.
spk08: I think the good thing is that we are totally fixed for the container. We have only one vessel at the end of the year, but that will give you the container sector idea.
spk10: You see the, you know, use the SCFI as a proxy, right, at the box rate, but use it as a proxy for the industry, and it's kind of bounced off the bottom, so maybe we found the bottom here. You see the chart we have? On one of the slides, the U.S. consumer continues to buy goods at a healthy level. There will be some pressure on the rates, but the good thing, obviously, we've already mentioned in the other question, was we're fixed out for the year. But, you know, for us, I think the market, the second half, could show some pressure on the bigger rates. Remember, most of our ships are below 13,000 TEU, and if you take the order book for the entire fleet, it's probably close to 30, but for under 13%, it's probably around 13%, 14%. So that holds up well for our sector, and I think that's why you've seen us be able to put out chips forward for period at some higher rates.
spk12: Yeah, no, that certainly has come across, and you've been able to secure the vessels over the past several quarters at some very good rates that are adding to your contracted revenue as well as generating some nice free cash. So
spk11: I guess, you know, as you look forward with regard to the vessels, you know, kind of looking out a year as some of those container ships come off charter, how do you think about kind of the redeployment? Would you prefer to have those under long-term charters as well?
spk05: Or if we're in a kind of a stronger demand environment, would you consider using some Some of those where you're using your tanker fleet kind of more on shorter-term charters.
spk10: The model we have is to put out vessels on a medium to longer-term charter according to where we are in the cycle. When we get to the end of the year, if the cycle is different than we think, we may be putting out the ships on longer term. But let's see then where the cycle is for each sector. especially the containers.
spk05: Maybe it surprises us like it did in Q1. No, it makes sense. And then you guys clearly have taken advantage of that with regard to some vessel sales as it has kind of tied a bow on... the leverage question. How should we be thinking about kind of the deleveraging? Are there more? Are you hoping to kind of do additional vessel sales over the, you know, over the duration of 2023? Or should we think about this as more, um,
spk11: using the free cash flow that you're generating from your fleet to de-lever and get closer to your target leverage ratio.
spk08: You know, I think we have done a fair sale of the vessels that we had. It's about 13 vessels that we are ready to sold this year and are going to be already delivered in the Q1 and Q2. You know, there may be a couple, but I think the majority of this has been completed. I think where we see the cash generation is in a very simple thing. We have contracted revenue that exceeds our total expense by $70 million for the remaining nine months. And we have about almost 16,000 open index days.
spk07: I mean, if you see on page 9, you have the actual type of sales in the open days. If you calculate all that, whatever you assume rate, this is your strong cash flow generation. Every $10,000, it's about $100. over $150 million. So that's basically how you can deliver quite significantly with the cash flows of the company.
spk05: Makes sense. Appreciate that.
spk03: Thank you. That concludes our question and answer session. I'll now turn the call back over over to Angeliki for any additional or closing remarks.
spk07: Thank you. This completes our Q1 results. Thank you.
spk03: This concludes today's call. Thank you for your participation. You may disconnect at any time.
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