d'Amico International Shipping S.A.

Good afternoon. This is the Courts Call Conference Operator. Welcome and thank you for joining the NAMICO International Shipping First Quarter 2021 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Paolo D'Amico, CEO of D'Amico International Shipping. Please go ahead, sir.

Thank you. Good afternoon to everybody. Thank you for being with us today. Let's go straight to the presentation. Now, if you, with your permission, I would jump to the executive summary because we repeat ourselves later on during the presentation itself. So if you don't mind, I will leave the floor immediately, going to page six. I leave the floor to Carlos Balesta-Dimorto, our CFO, and then I will join you at the second part of the presentation. Carlos, please go ahead.

Good afternoon to everyone. As usual, just a quick glance at our feed composition at the end of the first quarter. We controlled 38 vessels. As always, our main segment is the MR segment, the workhorse of the product anchor industry and representing 68% of our controlled fleet. We have also, in terms of control, 74% almost of our fleet is either owned or bare boat. or control through bare bolts, which are just different financing arrangements. From our perspective and the remaining, there's mostly long-term time charters and only one short-term PC. It is a young fleet. The average age is of 6.7 years relative to an industry average, which is for both MRs and LF1s of 11.8 years. And it is a mostly eco fleet, around 75%, and IMO class 76%, relative to 39% for the industry. It's a young fleet, as we mentioned several times, since we ordered 22 new buildings since 2012 that were delivered between 14 and 19. In terms of CAPEX commitments, going on to the following page, We don't have any more new buildings on order, so we are much lighter in that respect. Also, in terms of maintenance topics, we are lighter. We had 12 million in 2020. This decreases by 50% around in 2021 to around 5.9 million, and by another 50% in 2022 to 3.1 million. and so that is helpful especially in the current weak markets going on to the following page we are also lighter in terms of debt repayments the daily debt repayments fell markedly between 19 and 20 after we finish reimbursing the medium term facility with It will drop further over the course of the next few years, in particular between 2022 and 2023, because of a working capital facility that we have, which has quite a fast amortization profile that we will finish reimbursing in 2022. We don't have any balloons to refinance in 2021. That is also positive. But we do have 65 million to refinance in 2022. and we will start working on these in the second half of this year. In terms of purchase options on page nine, we had nine these vessels with purchase options. One of these was exercise on the high priority. We have eight remaining, which seven are in the money or theoretically in the money. and also seven of these are already exercisable with the Chablis-Hulson, which is a JOCO, it's a slightly different structure, which is only exercisable from March 24th. We don't have intention now at this very moment to exercise other options given the current weak markets, but We monitor the situation closely and once we see the market moving in the right direction on a sustainable basis, we will definitely look into this possibility to obtain some hopefully important savings on our interest expenses. Going on to the following page, our QC coverage. As the previous presentations, this is falling throughout 2021. We did, however, manage to slightly increase this, fixing some vessels OTC during the quarter, so that we are now at 45% coverage for the second quarter of this year at a profitable rate for us of 15.4 on average. and the coverage falls, however, to 35% in Q3 and then to 22% in Q4. We have ongoing negotiations to increase this coverage, and we should be able to do so at quite attractive levels relative to today's spot mark. The percentage of our Ecofleet has been increasing since Q1 2018. It is now, for 2021, as I mentioned previously, around 74%, and it will increase further. This analysis here doesn't assume any vessel disposals, but if we do, as we plan, dispose of some of our older vessels over the course of the next few years, then of course this percentage will rise even faster. And this is important today, especially in today's environment with higher oil prices. The eco-premium has increased significantly, and it's today closer to around $2,000 per day on a one-year TC basis. Going on to the following page, we show our fleet profile, the evolution. The fleet decreases slightly. as some of our TCN vessels are delivered to their owners. Nonetheless, our exposure to the spot market, overall exposure rises given we have less coverage as we move forward, and therefore the sensitivity for every $1,000 per day change in ETC equivalent earnings also rises. It's only 6.7 million for the remainder of 2021, but it rises to 12 million in 2022. Going on to the following page, on the cost side, we did see some good results over the course of the last two years. between 18 and 21 in the first quarter. We had some exceptional items that weighed on these results. The figures are, however, lower than they were for the first quarter of 18. We did mention that we benefited from having younger feet. Several new vessels delivered over the course of the last few years. a homogeneous feed, more technology, condition-based maintenance, allowing to increase the average life of our spare parts. And we also benefited from a strong dollar over the course of the last few years. And this is partly reverting now. And that is also one of the factors that explains the increase that there was in the first quarter of this year relative to the first quarter of 2020, in addition to some, let's say, exceptional COVID-related savings that we had in the first quarter of last year, since both crew rotations and inspections of vessels were more limited than usual because of the COVID situation. On the GNA, we also achieved some important savings over the course of the last few years, which were confirmed in this case in the first quarter of this year, despite the weakening dollar. On the financial, going on to our financial position, Important to highlight that we ended the quarter with $56 million in cash and cash equivalents, which is still a very comfortable position relative to our minimum cash covenants on our loan facilities of $25 million. And the ratio between the net financial position and the feed market value increased from 65.9% to 68.5%. It increased as a result of the losses in the first quarter, and it increased as a result of the decrease in asset values, which, however, we're already seeing some signs of recovering as we cover the market overview later. We will talk more about that. But the ratio of 68.5% is still a healthy ratio, given we have a very young fleet, and it's much better in any case than the 73% we had at the end of 2019. So it's not something we are concerned about. And going on to the following page, the key P&L line items, the net result, lost $28 million, which excluding non-recurring items is a loss of $9.3 million. And in the first quarter of last year, the loss, the profit was of 6.3 million, excluding no recurring items, of 1.5 million, including such items. So on the key operating measures, on our top line, the ADTC spot rate for the period was just shy of $10,000 per day, which of course is not brilliant and it's a reflection of, of course, as we mentioned, the very weak markets, the very low volumes refined, the ongoing lockdowns in the first quarter, also in some key consuming developed economies, but of course also in some very important and popular emerging markets such as India and Brazil. And Brazil in particular is a very important importer of refined products. And so the effects of the weak spot market were mitigated by the TC coverage. We had almost 50% of our available days cover 2TC contracts at an average rate of 15.8. So our blended rate of 12.850 is still well below our financial and P&L breakeven, but it's much better than it would have been had we not had such a good level of coverage. And I pass it over to Paolo to the market overview.