Safe Bulkers, Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the SafeVolkers conference call to discuss the third quarter 2020 financial results. Today we have with us from SafeVolkers Chairman and Chief Executive Officer, Mr. Paulus Hanyano, President, Dr. Lucas Bamparas. Chief Financial Officer, Mr. Constantiano Adam Pollous, and Chief Operating Officer, Mr. Ionis Vittoni. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you do wish to ask a question, you will need to press star and 1 on your telephone keypad and wait for your name to be announced. Following this conference call, or you need any further information on the conference call or on the presentation, please contact Capital Link on 212-661-7566. I must advise you the conference is being recorded today. I will now read the forward-looking statement. Before we begin, please note that this presentation contains forward-looking statements as defined by Section 27A of the Securities Act 1933 as amended and Section 21E of the Securities Exchange Act of 1934. as amended. Concerning future events, the company's growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters. Words such as expects, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies. many of which are beyond the control of the company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the demand of dry bulk vessels. Competitive factors in the market in which the company operates, risk associated with operations outside the United States, and other factors listened from time to time in the company's filings with the Securities and Exchange Commission. The company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements. ...contain therein to reflect any change in the company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. I would now like to pass the floor to Dr. Bambaris. Please go ahead, sir.

Good morning. I'm Lucas Bambaris, President of SafeBudgets. Welcome to our conference call and webcast to discuss the financial results for the third quarter of 2020. Before I start the presentation, I would like to express our gratitude to all our seafarers, hoping that within 2021, we will reach a point that all efforts of the global community to produce treatments and vaccines will conclude and the pandemic will be controlled. There has been a negative effect from the COVID-19 pandemic on the company's results of operations and financial condition year-to-date due to lower demand, which resulted in relatively lower charter rates, as well as higher crew and related costs. We are happy to return to profitable operations the last quarter. In parallel, the company is maintaining a strong liquidity position that provides us with flexibility and is following a plan which in the first place is based on our high-quality Japanese fleet, 32 out of 42, with a big advantage over the environmental footprint compared to the global dry-bulk fleet, and further is aiming to gradually renew and deliver our fleet, targeting to be the leading quality dry-bulk company and create value for our shareholders. Management alignment due to shareholding stake And performance and trust built over the years are of paramount importance in the success of this plan. Let's move into slide four. We present here the performance of the Cape and Kamsa Machata in market for 2019 and here today as published by the Baltic Exchange. The COVID effect has been the major drive in both sizes. During the first wave of Q1, the chartering market traded at very low levels. But after Q1 and the resumption of economic activity, we evidenced healthy volumes of iron ore, coal and grain, especially on capes. The market peaked twice, reaching the levels of 35,000 USD. On time so much, the market has been trading higher than 10,000 since May. and picked during the summer months, exceeding 15,000 per day. Looking forward, we are monitoring closely the trade tensions developed between China and Australia, and we remain cautious on how a second wave of COVID may negatively affect the trade. However, recent COVID vaccine announcements brought optimism in the global markets. Turning to slide five, we provide more input in relation to the Chinese economic recovery. which remains the driving force of dry bulk. As shown in the graph, after a significant contraction in Q1 by almost 7%, the Chinese GDP has grown for two consecutive quarters. According to the National Bureau of Statistics of China, the Chinese GDP grew by 3.2% in Q2 and by 4.9% in Q3, averaging a stable recovery after controlling the pandemic. The resumption of trading activity is evidenced by the Chinese imports. There has been a substantial drop on imports during April and May. The gradual recovery of the Chinese economy during the summer months in combination with the muted trading activity of Q1 led to an aggressive import spree resulting to a year-on-year increase of 13.2% in September and 4.7% in October. Turning to slide 6, we gave more color on Chinese imports developments. September's iron ore imports increased by 8.2% month-on-month, 9.3% year-on-year, which for the period January to September, there was an actual increase of 10.6%. For thermal coal and lignite, imports have dropped by 9.6% in September, month-on-month, and 16.3% However, the total increase from January to September starts at 18.4 percent. This mixed outlook can be attributed firstly to seasonality, and secondly to the ongoing tension in the China-Australia trading relations. The lower graph represents the Chinese imports of soya beans. The September soya bean imports increased by 1.9 percent month-on-month, and by 19.4 percent year-on-year. Wheels for the period from January to September increased by 15.4% as compared to the same period in 2019. Going to slide 7, we present the current status of the order book in the two sectors where we operate, the CAPES and the Panamax to Post-Panamax. It is the first time after many years that the order book is so minimal. The contracted orders for CAPES amount for 4.6% of the total CAPES fleet, and from 2022 and onwards, the orders are minimal. Similarly, for Panamax to Post-Panamax, the orders for 2021 represent growth of the fleet of about 3.4%, and going forward, less than 1%. The aging of the fleet... The increased environmental capital expenditure requirements for complying, for example, with balance water treatment system regulations may enhance the scrapping activity, especially in an environment of low freight rates. Increased scrapping may lead to lower net growth of the fleet, as discussed above. Furthermore, the ongoing environmental discussions for emissions are beyond the ability of most of the CPIs to cope with technological advancements and produce designs which comply with them. In particular, for the Phase III of the Energy Efficiency Design Index, only very few cities can provide highly efficient designs that can comply with such emission requirements. Under these circumstances, the order book and hence the existing dryback fleet will not re-inflate anytime soon. Furthermore, the ambiguity of the future greenhouse gas measures and the lack of technological solutions in relation to new environmental friendly fuels enhance the uncertainty and put hold on new designs or new orders. At this point, let me refer to our focus on developing a plan for renewing our fleet with modern designs that adhere to the new environmental regulations and in this regard to point out our recent order of a Japanese-built drive bike, 82,000 deadweight tons, capsule class vessel, with a scheduled delivery in the first half of 2022. The vessel is designed to meet the latest requirements of Energy Efficiency Design Index to greenhouse gases and EEGI Phase 3. It will also comply with the latest NOx emissions regulations, the NOx Tier 3. Heading to next slide number eight, we make a brief presentation on the status of the fuels market. Global lockdowns and mobility restrictions have reduced the demand for fuels and distillate products. Presently, the price of 0.5% very low sulfur fuel oil, the IMO 2020 fuel, is relatively weak in comparison to high sulfur fuel oil prices, and thus their spread differential, the so-called high five, is in the region of 65 to 70 U.S. dollars. On the graphs in the left, we present the future market prices for very low-sulfur fuel oil, high-sulfur fuel oil, and high-five in Rotterdam and in Singapore. Futures market indicate recovery of the 0.5 percent very low-sulfur fuel oil, and the high-five is trading at... higher levels in the region of $80 to $90 for 2021, and further up to about $100 for 2023. The recovery of global economies, the restoration of mobility, and the recovery of crude oil prices may increase the demand of distillate products, and will likely push the High-5 differential to even higher levels. Let's now summarize in slide 9 the key takeaways for the market. We see a resumption of economic activity after lockdowns as China's GDP indicates a V-shaped recovery, witnessing healthy volumes of iron ore, coal and grain trade. At the same time, the second wave of COVID-19 remains a threat, but the recent COVID vaccine news brings optimism in global markets despite the recent trade tensions between China and Australia. The global lockdown has adversely affected demand for oil and distillate fuels. We may have a slow oil demand rebound, as global lockdowns is, with restoration of mobility, which will eventually lead to recovery of the Brent prices and to wider H5 spread differential. We have declining order book 2020 onwards, and the ongoing decarbonization discussions do not favor new orders. And finally, the aging of the fleet, the low freight rates, and the increased environmental topics may enhance the scrapping activity. Heading to slide 10, we show our fleet growth over the last years, having added a new order recently. It is important to note that our growth is gradual, The company has never entered in several orders that have distorted the supply side. At the same time, the company has kept the rate of growth even at loss-making markets and has invested always in the forefront of the technologies. Turning to slide 11, in the context of our environmental and social responsibility policies, we undertake significant environmental investments by retrofitting scrubbers and balanced water treatment systems on our fleet. We have already invested 66.7 million as of September 30, 2020, and have retrofitted all 20 of our scheduled scrubbers and 30 balanced water treatment systems so far. On the table, we provide an estimation of the expected downtime in days for Q4 2020 and Q1 2021 in order to assist analysts with their projections. Turning to slide 12, we have plotted the BPI index as market performance indicator and our stock price. The correlation historically was very strong. In 2019, the correlation decoupled due to the trade war, and during 2020, we have seen further decoupling due to COVID pandemic. Presently, our stock is trading at levels which we believe do not correspond with the market performance. This could potentially be a good entry point. Turning to slide 13, we focus on a strategic plan by gradually renewing our fleet, investing in new technologies and pressures with environmental footprints that adhere to new greenhouse gas regulations. So far, our environmental investments include balanced water treatment system, installation of scrubbers, a project that has been completed. Until now, we have invested 66.7 million, as I have already discussed. Furthermore, we saw the improvements that the new designs bring, which are related to the 500 dynamics, improved efficiency of propulsion systems, and managerial actions which focus on environmental operations. Concluding, in slide 14, let's summarize safe bucket takeaways. SB stock is at an attractive entry point. Exposure in the spot market allows quick return to profits whenever market conditions improve. Building advantage in environmental footprint due to Japanese tonnage 32 out of 42 vessels. Management with about 50% stake is aligned with shareholders. We have developed a plan over the following year which includes, in summary, lean operations, operational excellence, and technical expertise. Maintain strong liquidity, which provides for flexibility in this unstable environment, and the cushion for opportunistic moves. Gradual fleet renewal with the greenhouse gas EEDI Phase III, NOx Tier III vessels, in parallel with financing arrangements. deleveraging in parallel with other markets, targeting to be the leading quality drive-by company and create value for all our shareholders. Now I will pass the floor to our Chief Financial Officer, Konstantinos Adamopoulos, who will present our quarterly financials.

Thank you, Lucas, and good morning, everyone. Let me start with our chartering performance in slide 16, where we present our quarterly time charter equivalent, which was $12,575, versus our quarterly OPEX, which stood at $4,896. Moving on to our debt profile, as seen in slide 17, we present a repayment schedule as of September 30, 2020. As of November 6, 2020, our liquidity stood at $136 million, consisting of cash and bank-time deposits, restricted cash, funds available under our unsecured revolving credit facility, as well as the sale and leaseback arrangement for the new-built Kamsar Max-class vessel. Let me continue to slide 18 and focus on our debt amortization schedule versus the scrap value of our fleet. We have a smooth debt repayment profile for the coming two years, gradually deleveraging our company. Moving on to slide 19, we present our quarterly daily offers, which stood at $4,896, versus our quarterly daily G&A, which stood at $1,418. The aggregate figure for both OPEX and GNA for the third quarter of 2020 was $6,314, demonstrating our focus on lean operations. We believe that this amount for both OPEX and GNA, when comparing apples to apples, is one of the industry's lowest, if not the lowest. We include in this figure all our dry docking expenses and in our GNA our executive officer's compensation and all expenses related to the administration of our company. Let's now move to slide 20 with our quarterly financial highlights for the third quarter of 2020 compared to the same period of last year. Net revenues increased by 2% to $51.9 million from $50.7 million. During the third quarter of 2020, our time charted equivalent was $12,575 for the third quarter of 2020, compared to $13,311 during the same period in 2019. Net revenues were supported by the benefit from scrap refitted vessels, despite the reduced price differential between heavy fuel oil and compliant fuel, which was caused by the oil price war. and also by revenue contributed by our new building delivery. We took delivery back in April. Worker's expenses increased due to increased vessel repositioning expenses, higher loss on banker's sales, again due to the oil price war, and consumption costs for scrapped fitted vessels. Daily vessel operating expenses increased by 10%, to $4,896, compared to $4,448 for the same period in 2019. Daily vessel running expenses, excluding light docking and free delivery expenses, also increased by 10% to $4,459 for the third quarter of 2020, compared to $4,053 for the same period last year. Unadjusted EBITDA for the third quarter of 2020 decreased by 22.3 million dollars compared to 25.1 million dollars for the Q3 of 2019. Unadjusted Earnings Per Share for the third quarter of 2020 was almost zero cents calculated on a weighted average number of 102.2 million shares compared to three cents during the same period in 2019 calculated on a weighted average number of 101.3 million shares. Closing our presentation in slide 21, we saw our quarterly fleet data and average daily indicators compared to the same period last year. We would like to emphasize that in this period we have worked extensively, despite the tough market conditions, and we have completed the installation of all 20 scrappers, We have concluded the order of a Japanese modern design and technologically advanced vessel with delivery in the first half of 2022 with limited impact on our liquidity as we agreed at the same time 90% finance through a sale in this bulk arrangement. We have a strong balance sheet with comfortable leverage, a smooth trade profile for the next two years and a liquidity position of $136 million. And finally, we took measures to protect our seafarers and show employees health and well-being, and kept all of our vessels sailing continuously, servicing our charters. Once again, we would like to thank our seafarers for their commitment and dedication and efforts throughout this tough period. Our press release presents in more detail our financial operational results. We are now ready to take your questions.

Thank you. Thank you, ladies and gentlemen. We will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone keypad and wait for the automated message advising you your line is open. Please clearly state your first and last name before you ask your question. If you wish to cancel your request, please press star and 2. So once again, that is star 1 if you wish to ask a question. and star two to cancel the request. We will now take our first question. Please go ahead. Your line is now open.

Hey, guys. Chris Weatherby from Citi. Thanks for taking the question. I guess I'll... Hi, guys. You know, I guess a couple questions here. First, just wanted to think about the vessel, the fleet as it stands right now, just kind of taking a look at some of the older Panamaxes pushing towards that sort of 20-year mark over the course of the next couple of years. How do you think about those? Can you talk a little bit about the leverage that are on those vessels specifically, if any, and would you consider potentially some sales here as you look to course of the next, you know, several quarters?

Yes. The idea is to gradually renew the fleet. So we ordered a new technology vessel for 2022. And the idea is by that time to sell, you know, one or two of the older vessels. Of course, as you understand, the right time... should be next year, simply because right now you have the problems of the pandemic and the COVID, restricted visit of people on both ships because of traveling restrictions, you know. Buyer to buy an older ship, he has to inspect. And this is not easy, easily, operationally, to achieve in today's restrictions in the various ports of the world. So, yes, the idea is for next year to try and sell a couple of the older ships, and as we renew our fleet going forward, continue with selling those ships. I believe 2021 would be a... a market that we would be more operationally flexible, and our market conditions should be improved so we could materialize such sales. Okay. Okay.

That makes sense, and that's helpful. I appreciate that. You know, we have a little bit of a pickup in the order book in 2021. I mean, you know, depending on the vessel size, you know, maybe it's in line with 20, but there's still some delivery there. There's not a lot of, you know, vessels in the book beyond 2021. Have there been, or sort of what's the tone of conversations with shippers? I mean, what's sort of the discussion around the charter terms, the durations, with your customers about getting, you know, maybe rates potentially moving in the right direction and maybe getting a little bit of duration on charters and just kind of get a sense of maybe, you know, how your customers are setting up for the next, you know, sort of into 2021?

Yeah, up until last week, I think that... The views were very skeptical in the market with what was going on with the American elections and all the stories with the second round of the COVID-19. And the announcement on Monday by Pfizer about the vaccine that will come into availability by the start of the new year changed a little bit the sentiment. And this will take a few months to work into the system. I believe that as people start getting clearer picture about economic recovery and prospects of full recovery as we run into 2021, the interest of charters will come back for period business and trying to do some charters. At the moment there's very little activity and it's better for an owner to stay in the spot market because the period activity is at below break-even level. So it's absolutely no reason a healthy company should lock in period charters at today's market. We are overall fairly optimistic if we find a solution on the COVID-19 situation, that demand will be boosted while supply is controllable. So we should be entering into a good year. Should this announcement of the vaccine materialize into an effective... tool for humanity.

I guess the last question would be specifically around the expenses. So, you know, we've seen decent growth on a year-over-year basis, and I know kind year-over-year basis, what can you do to bring those numbers down sustainably? I know you operate relatively well compared to the broader industry, but I'm thinking specifically about your fleet. Are there things you can do on the cost side to continue to try to work into a better profitability scenario?

Look, first of all, the GME expenses are quite stabilized, and also they depend on a little bit on the exchange rate within euro and dollar. So the only parameter that could substantially change this level is the exchange rate. And I would like to repeat that in these G&A expenses we include management fees and the the audit fees and, you know, to run as a public company, and in the management fees we include also the compensation of the offices. On the other side, the operating expenses have a great influence of dry dockings, and Quite often, I mean, this year we had about 12, 15 dry dockings, which was for several reasons. One of the reasons was that we have also the scrubbers and the balanced water treatments that we were fitting in several versions. So the program was quite intense. And when you go to a shipyard, let's say sometimes a little bit earlier, you... you have the time to do some additional works and some additional checks on your equipment, which increase the cost. As we move along next year, we have a substantially lower number of dry dockings. I tend to say I believe it could be about five scheduled dry dockings that will reduce the figure. And this is because we have done so many this year. We have five next year. So we have brought a cost earlier this year compared to next year. The second point is that the company... continues to operate, and we have also an internal program to control further operating expenses. And I think that with the combination of the reduced dry dockings and the program that we have, this number will substantially be reduced, let's say, maybe 4.2 to 4.3 or 4 for next year. Okay. Okay. So that makes sense.

There's something I look forward to there. Okay. Fantastic. Well, listen, thanks very much for the time. I appreciate it.

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

Howdy, gentlemen. It's Randy Givens from Jefferies. How are you? All right. Well, on the Campster Max, the 2022 new building, what was the purchase price of that? And then secondly, following that, you know, why purchase this vessel instead of maybe repurchase common or preferred shares here? And then following up on the larger or the vessel acquisitions and the fleet renewal, any interest in an N-block purchase of modern secondhand Ultramaxes or Campster Maxes?

Yes. First of all, we are a shipowning company and we have to start from somewhere considering the annual of the fleet and we start adjusting ourselves to the new world about decarbonization, which will be the name of the game for the next five years. So by going into this design, we go at an all-time low of new building prices, like Japanese new building prices in the high 20s for a new technology ship. full of extras and full of all the new regulations included in the vessel. I mean, if we want to buy stock, we can buy stock at any time, we can buy reverse share at any time. Right now, we have a plan to start renewing the fleet, but as I said earlier, very selectively buying new technology ships, and hopefully next year at the right market conditions to sell our well-maintained older ships, hopefully as the world gets out of the pandemic. So this is not... something that has to be done in a big scale. It can be done in a very small scale, one or two ships during the next two years, and at the same time selling three or four of the older ships in various times during 2021. So we have to renew the fleet and keep the age of the fleet as young as possible. This was the idea behind it. I don't know where the prices of these ships will be when the market recovers. It could be $34-35 million. And of course we will not do it in any big scale like in previous times, 2013-2014. We will do it very gradually and out of hopefully better results as the market improves. What is very important to remember is that You have a company that we demonstrated that even during the worst year in memory since the mid-80s and 2016, 2020 is the worst year in memory. With the pandemic, with lockdowns all over the world, with operational issues, with crew change problems, which are increasing the cost. We managed in the first quarter that the world start moving. We demonstrated that we can turn back the stock, the stock and the result of a quarter into black, from red. I think this demonstration in a very difficult year that we can adjust so quickly back to profits, even small profits. like we did in this quarter, demonstrates that the company is there and can do things and can deliver results. I think, of course, we need a normalized world and a normalized situation to achieve better numbers.

If I may add also something about the question of buying back the common stock. I mean, during the previous years and for each quarter end, we record always the number of stocks. If you notice, I mean, this number has reached 106 million, about 106 million, and presently stands at about 102 million. Yes, this shows that the interest of the company is not the dilution, but sometimes we have issued historically in the past some shares, we bought back some shares, always to maximize the benefit of the company. And right now we're standing in almost the same number of shares that we stood a few years earlier. So this shows the performance of our anti-dilution policy in real terms, and not...and so at a certain point of time in the future you may see us buying some shares. But the important thing, or issue in some sense, but the important thing is that we want, our actions are always anti-dilutive, because the management here has about 50% of the company, and it will never dilute in such a way that it will not create value for all the shareholders.

Got it, okay. And then you mentioned about turning profits, you know, obviously in a tough third quarter. You know, your TCE rates increased pretty meaningfully from around 8,000 a day in the second quarter to almost 13,000 a day or so in the third quarter. Now, how big of an increase are you expecting in the fourth quarter?

Look, the fourth quarter is not developing enough. a lot differently from the third quarter. You know, the first month it was at similar levels. Now there is one more headwind that we have to face, which I believe personally that it will result into a strong tailwind at the end. But right now it's a headwind, it's a trade war between... Not trade war, it's like saying a trade... trade dispute between China and Australia on the import of Australian coking coal. We know that there are pressures, political pressures, from Chinese government to Australian exporters, and tariffs imposed in other commodities. but because they have these issues about the blame game for the pandemic. So this is a headwind we have at the moment. But at the same time, I believe that this will create the benefit of bringing the coal, which they desperately needed in China for the steel mills, the cooking coal, to bring it from further away. We already start seeing from U.S. Gulf, from U.S. East Coast, from Colombia, which is traveling the 10 miles, which is very, very, it will be very, very healthy for the market. So as the Chinese will start sourcing coal from further away, I think that the problem will become an opportunity. So we may see a lot better Q1 than we expect. So the answer to your question is that Q4 will be pretty similar to Q3, the way it develops, we are in the middle of Q4. But I'm more optimistic that Q1 will be nowhere near where the last couple of Q1s were, if things also with COVID-19 start to develop a little bit more positively. with the new news announced this Monday. So we are cautiously optimistic. Of course, you may be bored that we're every time saying that we're cautiously optimistic, but indeed now we believe that this will deliver into a positive market for 2021. Got it.

All right. I guess last question for on the ballast water treatment capex here for the remaining 12, I guess, in the fourth quarter in 2021?

As Lucas said, we have five dry dockings remaining planned for 2021. So it's nowhere near the 13 we had for 2020. And I think out of these five, we have three balance water treatments to install. So it will be looking a lot better. And, you know, I mean, we want to believe that this will show a lot in our OPEX in 2021. It should be about...

let's say, half a million per, so it's about $1.5 billion capital expenditure for these three vessels. What was that number?

About half a million. Got it, okay. And then, so the remaining BWTS systems will be 2022 and 2023 to get to your 12 remaining? Yes, there are not too many.

There are not too many because we have already reached 30. We'll go, I mean, next year at about 33%. Yes, the remaining will be in 2022 and 2023.

Let's say 75% is already done, and then we have three years for the last 25%. So we've done the investment, and, you know, I mean, of course, as you know, the investments never stop in this world. We have to focus on new projects. energy efficiency improvements and things like that. But at least we will concentrate to those and we will not have much of the rest hanging over the company. Got it. All right. Well, that's it for me.

Thanks so much. Thank you very much.

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

Hi, this is Frank Galantian for Ben. Thanks for taking our question. How do you think about adding to the fleet, kind of above and beyond the CancerMax new build with where current asset values are? Obviously, the fleet renewal. not being able to sell those new vessels now, or sorry, the older vessels now, are you guys limited in being able to kind of potentially take advantage of these asset values? And then how do you weigh that against protecting the balance sheet?

Yes, we cannot go out at full scale and do what we would have done in 2013, 2014. We have to do it very gradually and at a very, very... calculated basis. If we manage to sell three or four ships next year, this will open the door for more investments. Right now, we have done one. Maybe we do one more in the next few months. I mean, we have our eyes open because they are at very low prices, five, six million below previous designs, previous market levels and all the designs that we used to have. And I believe we should do something when there is the right opportunity, but always from balancing together with the liquidity we want to maintain in the company. And the relation we have with all our banks to be, you know, something that is not stretching the balance sheet and is not increasing the burden on the company. That's why it will be, if we do a new building, it will be a new building coupled with financing either in the form of a sale in this bank or some other form that will not be hurting the cash position of the company. So we will be very careful of how we do that. And next year, hopefully, I believe, the market will help us to sell a couple or three or four of the older units at a little bit better levels than this year. As I explained, this year it's impossible for a buyer of older ships to go and inspect the ships. You know, we have to respect that, but the buyer will only pay a very low price if he cannot inspect the ship and take his chances and allow, you know, the extra million or two in the price differential for any unpleasant surprises. So, in our case, we want the buyer to go on board and see the condition of the ships and not just, you know, offer a very low price and, you know, buy it

In any case, we make money out of these vessels, so it's okay for us.

Okay. And switching gears a little bit, I wanted to ask about scrubber operations. Obviously, there's been a lot less emphasis with the fuel spread compressing. But has there been any issues operating the scuppers? Have you guys been able to run them at near 100% utilization? And is there HSFO available everywhere kind of in a post-COVID world?

We're operating scrappers now since May 2019, so 18 months since we started. We haven't faced a single hour of hire. We are very happy with the quality of the equipment we have received from a very reputable manufacturer in Sweden, Alfa Laval. So we are getting a good value for the money we invested. As we enter next year, the current market expectation is $80 on the spread between the the two fuels, the heavy fuel oil and the VLSFO. This will mean a revenue for the company of an extra 10 million. So it's a revenue on top of what the ships are earning. So we think this is very good, and it's a lot better than 2020. got a $200 spread. But later in the year, after the COVID and after the oil price collapsed, the spread went down to $40 or $50, which is, of course, very low for the investment. So, at $80, it starts looking interesting again. And the forward, careful forward years For the company, it's an extra bonus to receive in the years to come. As I said, it's very, very important, the quality of the scrubber. And so far, so good. 18 months of operation of 20 scrubbers. have shown to us that the job has been done successfully. Regarding the availability of HFO, I absolutely don't find any issue all over the world to secure heavy fuel oil. And to be honest with you, we have certain ports around the world that we have people... who stocked up HFO to give us special deals better than the market deals to buy the HFO. So this is also something that helps a lot. But I have not experienced any port, any major port that we call that there is an issue of availability of heavy fuel oil. Only in some very minor ports you may not find, but you know, I mean, The operation of Kamsa Maxis and Pospana Maxis is so standardized that, you know, every two or three months you pass from certain key points that there's availability of all grades of fuel. I mean, the banker traders are very smart people, and the banker suppliers and the oil are very smart people to position their products at the places where the ships are passing from. So, I mean, for us it's absolutely no problem to secure the products At the relevant ports. Of course, when you pass from the relevant ports, you must have sometimes your operational people alert to take maximum benefit of the availability of fuel. So you don't take only 500 tons. If you are passing from Singapore, you take 2,000 tons. And you have the product on board to be used in the next couple of trips. And if you find cheap HFO in a chip port, you take advantage of it.

Alright, great. Thanks for the call. That's all I had. Appreciate it.

Thank you. You have to remember that, if I may add, sorry on the last question, that we are not managers of ships. As such, we are ship owners. In our job, we make a living out of those situations, you know, trying to maximize the returns of what the ships are doing and try to plan ahead and with the know-how we have of the market and because you have homogeneous fleet to try and maximize when such opportunities exist, you know. So you know in which spot you will face difficulty of securing, for example, low sulfur NGO, you take advantage on previous posts, you stock up, then you may sell to charters at more attractive prices when they go to a non-convenient port. All these things, you know, you have to be a shipowner to run it efficiently and properly. If you are just a manager and you are running ships for third parties, you will find at a certain point that The whole equation cannot be executed perfectly.

Thank you. There are no further questions. Please continue. Thank you, ladies and gentlemen. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you to all, and we're looking forward to discuss again with you for our results next quarter. Thank you. Thank you.