d'Amico International Shipping S.A.

Good afternoon. This is the Coruscall Conference Operator. Welcome and thank you for joining the D'Amico International Shipping Full Year 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, Chairman and CEO. Please go ahead, sir.

Thank you. Good afternoon to everybody. Thank you for joining us in this call. And we go straight to the presentation. And I would jump in. the executive summary, because it would be a repeat of what we are going to say in the second stage. So I think it's just useless. And I leave the floor to Carlos Barresta-Dimottola, who is our CAFO. Carlos, the floor is yours.

Thank you, Paolo, and good afternoon to everyone. So as usual, we start with a quick overview of our fleet profile. We control the 37 vessels at the end of the year. Over 70% either owned or bare-boated or controlled through bare-boat contracts. For us, bare-boat contracts are just alternative financing arrangements. Mostly an MR fleet, 25 out of these 37, and then an equal presence of six vessels in both the LR1 and Handy segments. Young fleet, average age of 7.1 years, mostly IMO class, and more importantly, mostly echo vessels. And today, this is a very important event. given the very high fuel oil prices that we are confronting. So these echo vessels are providing us a very important earnings upside relative to conventional vessels. We, as you know, we renewed our fleet ordering vessels since 2002, which were delivered to us between 14 and 19, 22 new buildings. And that is why we benefit from such a young fleet young and efficient fleet. Going forward, CapEx commitments, this hasn't changed very much since we last presented our Q3 results. Declining CapEx commitments now only related to maintenance CapEx. 2022 figures are just over 50% of the 2021 figures, which were just over 50% of the 2020 figures. So it has been declining, and it is over the next three years, it should stay at a pretty stable and low level. And we by now have installed water ballast tank systems in most of our vessels, and we don't have any new buildings on order. Going on to the following page, we are glad to, well, as previously announced, but to confirm that we have refinanced already all debt maturing in 2022. One of these loans was drawn down at the beginning of this year. The rest was already drawn down at the end of 21. And we are now starting to work on the refinancing of the 2023 maturities, which are more substantial, almost $110 million, the balloons relating to those financings. But we are seeing quite a lot of appetite. And so we expect to be able to achieve attractive terms and to close these refinancings soon. in the not too distant future, but definitely before the end of the year. And in terms of bank loan repayments on our own vessels, these have been declining and are expected to continue declining. We had some financings with some additional working capital facilities, which had a faster amortization profile and which we are either refinancing today with a new bank debt or we have what we will be fully repaying, in any case, over the next few years. And that explains the continuing downward trend in that respect. So we are also lighter in terms of – in terms of financing obligations going forward. Going on to the following page, the purchase options. This hasn't changed much from the last time. As you know, we exercised the purchase option on the high priority. We still have eight vessels which are financed through bare boat structures and they all have purchase options and there are seven of these are already exercisable. One will have Its first exercise date in March 24. They are all in the money or theoretically in the money. So at the right time, as soon as we see sustainable strong rates, we will be looking to exercise these options and to refinance them with traditional bank debt at a lower cost, reducing our financial break-even. Going on to the following page, the employment of our fleet. We recently added this blue line because we also have now one vessel pairboard charted out, which is quite unusual for us, but we kept the technical management of the vessel. And this employment was at a very attractive rate for us, a very profitable rate, and that explains why there is this increasing delta between the blue and the yellow lines, but most importantly, the blue lines, which includes both the bearable charter out contracts and the type charter out contracts is rising over the course of the next two years. And it's reached a trough in the Q4 of 21. And we are now starting to experience an increase in these rates. It's also quite positive. We believe that our coverage does fall over the next few quarters. It's still quite high in Q1, but it then falls to 32% in Q2 and then much lower in Q3 and Q4. And we do expect a much stronger market in the second half of the year and in particular in Q4. Of course, we are now, we are going to comment more on this later. experiencing exceptional circumstances given the conflict in Ukraine. And this has helped very much our markets. And we don't know for how long this will last. And Paolo will cover this more thoroughly in his part of the presentation. we are now in this very moment experiencing quite strong raids, which of course are strong for different reasons from the ones we would have expected and are also linked to the invasion of Ukraine. Also on this page we show underneath how the percentage of our fleet, which is ECO, has been rising over the last few years. And as I mentioned, this has become a very important factor today because of the very high fuel oil prices that we are experiencing. So the earnings differential between ECO and conventional vessels has increased significantly. And we are glad that for all our controlled vessels, the percentage of echo vessels in 2022 is going to be of 80%, and this should continue rising over the course of the next few years as we sell some of the older vessels that we still have in our fleet. Going on to the following page, we show the sensitivity of our earnings to a change of $1,000 per day in the TC equivalent earnings, and it is of around $9 million in 2022, and it rises to $12 million in 23. So there's quite a big upside potential in a strengthening market, which as you probably saw looking at other shipping sectors, which are now going through an up cycle, when markets do strengthen, they do strengthen, they can strengthen quite dramatically depending on the dynamics which are underlying the recovery. And therefore, we are glad that we have this increasing sensitivity going forward to what we expect to be a recovering market. We also worked quite hard on the cost fronts over the last few years, and we are glad that even in 2021, despite the inflationary pressures that we are starting to experience, we managed to keep our daily operating costs under control and only marginally higher than in 2020, but still well below the costs in 2018, so a 5% decrease. And the same applies to the GNA, where we did experience a slightly more pronounced increase in 2021, but where we are still well below the 2018 figure. There is also currency effect that penalized us in 2021. It is true that the dollar has strengthened quite significantly because of its safe haven appeal in the course of 2022. But on average in 2021, it was weaker than in 2020. And that is one of the factors which explains this increase in G&A costs last year, since 75% of our G&A costs are in currencies other than the US dollar, mostly in euros. Going on to the following page, our, a quick snapshot here of our financial structure. We have a, at the end of the 2021 or the ratio between the net financial position, the fleet market value is just over 60%. And we ended the year with $43 million in liquidity. This is a, in terms of ratio net financial position to fleet market value. We saw quite a big improvement relative to the figure at the end of 2020, which was closer to 66%. And this is thanks to our strategy of continuing to dispose of all the vessels to generate liquidity and strengthen our balance sheet, but also due to the increase in asset values we experienced in the second half of the year, partly driven by the pull effect of the increase in new building prices and in demolition prices, partly associated with the sharp increase in steel prices, but also on the new building front with the many orders that were received by by yards for other types of vessels, leading to most of their building capacity being filled up and therefore their pricing becoming more aggressive. Proforma for the disposal of the high-value, which occurred in the first few days of January, on the 4th of January, our liquidity at the end of the year would have been of just so $51 million. And the ratio of net financial position to meet fleet market value would have been just under 60%. So these are ratios which we are quite happy with. Of course, we will continue to seek to deliver job balance sheets. But given the very young age of our fleet, we believe these ratios are sustainable and healthy. Going on to the following page, we look here at the

Hello?

Yeah. Going on to the following page, we see that our loss for the year was of $37 million, and our loss in Q4 was of $8 million, excluding non-recurring items. Our loss in Q4 was of around $6.5 million, and $29 million for the year. The non-recurring items are mostly related to the disposals of the vessels that occurred in 2021. The high venture and the high value, which didn't occur in 2021, occurred in the beginning of 22, but the vessel was classified as held for sale at the end of 21. And and therefore we valued it at fair value at the end of the year. Going on to the following page, we show the evolution in more in detail, the evolution of our spot and TC covered average rates during the different quarters. And we see that Q4, Our average rate achieved on the spot vessels was of $12,000 per day. And it's important to highlight that this figure is higher than that achieved in Q420, where it was of around $11,700 per day. And this is on a year-on-year comparison. Q4 21 is the first quarter where we have an improvement relative to 2020. In Q3 2020, we had earned 12,900 and in Q3 21, only 9,200. So there was definitely an improvement already at the end of last year, which preceded, of course, the invasion of Ukraine by Russia. And this improvement was linked more with the market fundamentals, the underlying market fundamentals, which we see as very strong and which, irrespective of what happens in Ukraine, of course, we want this war to end as soon as possible, is going to be supporting our market. It's also important to note that relating to the Q4 results, although we don't have the detail here, the figure of 12,000, just over 12,000 of the spot market is composed of a very weak October a better November and a strong December. So in December, we were actually, I would say, pretty much at breakeven. And that was the first breakeven month for us in quite a long time. And the fact that we experienced this rally in last winter and at the end of last year is a very good sign that there is some tightness in the market and that the bad weather, which is usually experienced in these winter months, coupled with the additional volumes, which are usually traded during these months, was enough to generate this rally, which we did not experience at all in 2020, where we had the flat and low market throughout Q4. Overall, including the time-chartered contracts, which, as usual, we benefited from. It has proven the right strategy over the last few years to cover a part of our fleet. In Q4, we benefited of an average rate of around 14,500. Our blended earnings was of around 13,200 in Q4. And our blended earnings for the year was just below 13,000. So I pass it over to Paolo D'Amico who will now be covering the market overview.

Thank you, Carlos. Let's go to the first slide at page 18. We show here that there is... Quite big potential upside on asset values. Of course, I would skip the spot rates and the time charter rates because they are not really actual. This can tell you about 2021, but what's going on today is a different story due to the conflict. On the asset value, we still have a lot of space to grow. And so I think today's value, let's say, would be a good buy. Let's put it this way. Going on, COVID is receding rapidly. And of course, the pandemic is in an improved mood. The only thing that we can say here, but this is my personal opinion, I'm afraid that all these refugees coming over from Ukraine, we can have a restart of a pandemic because, as you know, In Ukraine, only 30% of the people are vaccinated, so 70% are not. So it's possible that we are going to have a restart there. But the demand is recovering, demand of oil and demand of products. People are moving again. We... The runs are increased by 3 million barrels a day on average, and we should go up to close to 4 million, which is exceeding the 2019 levels in Q4. So we are throwing on our back the reduction which was due to the COVID-19. The refined products inventories are very low, and this is a good thing for us because it means that we have to rebuild the stocks. Rebuilding the stocks is always creating an increase of demand. Now, we have this increase of demand of a barrel by OPEC, which is theoretical because many of the OPEC countries are not in condition to honor their increased quota. So it's been calculated that we are something like one million barrels less from the official number. And, of course, this is creating a very tight market. The vehicles are rolling again. Now, how long this is going to be has to be seen, because, as you know, gasoline is already at $4.20 a gallon, and diesel is already at $4.80 going to... versus $5 a gallon in the United States. The U.S. is a big market for us because in May starts the driving season after Memorial Day, and it goes through the old summer. But with these prices, we do not know what really is going to happen. As you know, Americans are very sensitive to the price of a gallon, so we have to see what is going to happen. Jet fuel is the same thing because also jet fuel is increasing in price, but the number of commercial flights is growing every day because people are traveling more we go ahead and more we are traveling here again we have to see what happens with COVID because if as I'm afraid COVID will be back I don't know what government are going to do certainly not I don't expect they are going to do the same lockdowns that they used in the past but let's see as you can see everything is very very fluid and very volatile, I would say. The impact of the Ukrainian war is a scenario which is evolving every day. Our market went in a state of shock, like all the markets in the Western world. We can we can load in Russian ports. I mean, they are not under sanction. Our activity is not under sanction for the moment. What is under sanction, of course, is where you're going to discharge because UK is not accepting ship from Russia anymore and probably also EU and United States. So basically, the ships can go only from Russia to the Far East or Far Eastern countries. We do not go to Russia for the moment. We do not go because it's not clear the risk that you are taking. Of course, freight rates on whatever is originated in Russia are through the sky, but... We do not want to take the risk of going there and maybe you have a further sanction which traps your ship in a Russian port or the same Russian authorities to hold your ship there. So it is a risk that we don't like to take at all. In this moment, what I personally expect that Russians are going to do sell discounted barrels of crude to China, and probably China is going to refine that barrel and resell it to us as diesel at full price. So it would be a hell of a big deal for the Chinese, but this has to be seen. So the moment is very confusing and very, as I said, very volatile. The seaborne demand for transportation of refined products, the long-term demand, is healthy and is always growing. And the participation of refined products to all the seaborne trade grew up from 25% on the beginning of the century to 36% today. So the share of refined products on the old seaborne trade is increasing. We have, as we saw that many times before, a big change in the refinery landscape, and you have these new projects of refineries of the last technology, all within, I would say all of them, close to all of them anyhow. between the Middle East and the Far East and China and you have countries that basically gave up completely their refining capability like New Zealand doesn't have one single refinery in function today and Australia is reducing a lot so I think they are left only with four refineries so They are both big import markets for refined products. And we expect, of course, a further reduction of the European refinery, but they are quite obsolete. We should expect a return of shale oil. Certainly with today's prices, it makes a lot of sense to drill. As you know, in the States, they didn't drill for quite a while because they focus in paying back shareholders and paying back bondholders. So we didn't use resources for further investment. But I think with today's prices, we will start moving. The good thing of Shell Oil is that you start drilling today and you have your barrel in six months' time, so it's a rather quick response. Going ahead, on the supply side, we have our fleet, not our, we have the fleet, the tanker fleet, getting older. And a very strong demolition market because the price of steel has gone by far higher than the $600 a ton. And to give you an idea, the LCC, a big ship that is basically worth between $18 and $20 million today, which for a 23, 24-year-old ship is a lot of money. And so we do expect many candidates to go to the scrapyard, and this should limit further the fleet growth and the supply. And we see it also from the next slide, the growing pool of demolition candidates. The yellow line are the ships. The percentage of a fleet older than 15 years and the blue one older than 20. Older of 15 because commercially the top oil companies, they don't take ships on charter older than 15. Over 20 because you have really a physical and technical. The ship becomes really old from a technical point of view. So the demolition, the pickup in demolition is already visible. And on 21 will be a lot of something between 50 to 60 of the MRs have been recycled. And we do expect this thing to go on more. this year. And as far as new building orders, you can see the curve is extremely limited. The number of new ships coming to the market is extremely limited. And if we add this to the demolition numbers, you can see that the fleet growth is really minimal. And this should be, and as you see, the last slide tells us that we have a growth of around 0.5%, which is absolutely nothing. This is basically flat. Saying that is the end of the market part of the presentation. The only thing I repeat, I can say today that things are extremely fluid. And, of course, rates are improving everywhere. You don't need to go to Russia to have a better chartering rate today. But, as you know, markets, they are looking for an equilibrium and at a certain point they will find the equilibrium. And there we have to see how big is, how far away we have to load for our destination. So the ton mile should, and we expect that, should improve, and we should have anyhow a better market than we used to have in 2021. Saying that, I think we can pass it on to the Q&A session.

Paolo, just quickly on the NAV, quickly a quick look at the NAV evolution before maybe we go over to the Q&A question, as we usually cover this slide too. Now, just to mention that our NAV reached a trough in March 21, and since then it has increased steadily. And since September, It is more or less flat, so we ended with an NAV of $288 million, which corresponded to a discount of a share price at the end of the year. It was at a discount of 55% to this NAV. The share price has since then been basically traded basically flat. So this discount is unaltered. It's one of the highest discounts we have experienced relative to our NAV in over the last 10 years almost. And we had maybe a slightly bigger discount in December 18, but that maybe was justified by the very weak markets and maybe a less strong financial position at the time by our company. Today, given the, well, the strong rates we are currently experiencing, of course, for the reasons we mentioned, which we don't know are sustainable, but more importantly, because of the imminent sustainable recoverings that we expect in the second half of the year, because of the very strong fundamentals that our market benefit from and because of our also much stronger balance sheet today, we feel this discount is definitely unjustified. And we hope and expect it will shrink over the course of the next few years. We can pass over to the Q&A then.

Excuse me, this is the Corusco conference operator. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove your sub from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Matteo Bonizzoni with Kepler. Please go ahead.

Thank you. I have some questions. The first question is... regarding the environment for your business. So you say that after the start of the Ukraine-Russia war, there was a quite significant strengthening of the rates for product tankers. I don't know if you quantified during the call, maybe I missed, but my question is if you can elaborate on a little bit more about the current rates on the spot side which you are experiencing. And I want some follow-up on this point regarding slide 24 of your presentation, which is clear that Russia exports around 5 million barrels per day of crude and 2 plus million barrels per day of refined products. So I guess that you are making the point that Europe in particular could try for substitutes in further areas compared to Russia, and that could stimulate the sea bond transportation of both crude and refined products. So can you elaborate on that point? The second question is regarding the refinancing which you announced last December, at the end of the last year, for $78 million. It's a sustainability-linked refinancing related to CO2 emission and also the evolution of the AER. I think I remember I read in the press release at that time, can you a little bit elaborate more on how it works in terms of cost? What is the cost of this refinancing, first of all, compared to your average cost of debt, and how it works as regards to these sustainability indicators? And the last question is as regards to the This recovery of the asset values which we saw during 2021, which I think is mostly related to the increase of the steel price, but potentially not only to that. What's your view? Do you expect the asset value to keep this level or to continue maybe to increase in the next quarter?

Thanks. I'll pick up the first one. I'll leave the rest to Carlos. To give you an idea... An AfraMax, which is a 100,000 deadweight ton ship, used to run at a rate of $6,000, $7,000 a day before. Going to Russia and coming in the Baltic and coming to North Europe is making $300,000 a day today. I mean, this is... is basically the difference of what's going on. This is going to Russia, of course. Not going to Russia, we are moved from a market which was roughly between, let's say, $11,000 to $13,000 a day before to a market which is over $20,000 a day today. Now, this is not everywhere. It's in the Mediterranean, in the Caribbean Sea, And it's starting also in the Far East. But, I mean, the market is improving a little bit everywhere. This is as far as the market. I leave to Carlos the rest of the questions.

Yeah, thanks. Thanks, Paolo. Now, regarding the refinancing, it is in particular that we closed last year, in particular the sustainability linked refinancing. The cost, I would say, was pretty much aligned or just below our average cost. But more importantly, it was below the most recent refinancings we had closed in the last few years, and it was 240 basis points over LIBOR, plus or minus five basis points, depending on our performance from the performance of our fleet from an emissions perspective, relative to this AER trajectory. And the KPI is based on the emissions of the entire fleet, not only the vessels financed by ABN. And, yeah, as you see, I mean, the differential which is linked to the sustainability linked indicator is not very significant. We are well below the AER trajectory. So to be able to benefit from this discount, the five basis points discount, we have to continue doing very well. So it is quite demanding targets that were set. But we expect to be able to achieve them, given the projections of the emissions of our fleet. And I would say that, you know, this is one reason why today we have quite a lot of interest from banks to work with us is that we have such a young fleet which perform well from this perspective. These banks, the major shipping banks financing the shipping sector signed on to the Poseidon principles whereby they commit to reduce the CO2 footprint of the vessels they finance. and therefore they are looking to finance young vessels that have low emissions like ours. And that allows us to achieve tighter pricing. We believe that we are going to be achieving even better pricing than we achieved on the facilities we closed last year on this year for the maturities. of our loans in 2023. So, but yeah, I would say that there's also on the ABN facility, there's also an additional discount of around five basis points if we employ the vessels on long-term contracts, which are of 18 months or longer. And the discount applies only to the vessels which are employed through such contracts. So, All in all, I would say it's a competitive facility. The other facilities that we closed last year have very similar terms in terms of pricing. The asset values, we still see a lot of potential for further upside. There is definitely an effect which is linked to the increase in new building prices and in demolition prices, but there is also an effect which is linked to the fundamentals of the industry, the expectations that we are very close to a recovery and therefore there is quite a lot of interest from buyers to acquire these vessels, which are are still today trading well below new building parity. So even the echo vessels today are trading well below new building parity. If you look at page 31 of our presentation, you'll see that a five-year-old vessel, which today is an echo vessel, is valued at 30 million. Whilst the new building parity, which reflects today's new building cost depreciated is around $35 million. So that is, you know, at least, you know, the upside that we see in a market once we reach break-even levels. And when we start becoming profitable and very profitable, we can very well go above the new building parity curve, as has happened often in the past. I believe that's it for these questions, so I pass it over to you for further questions.

The next question is from Massimo Bonisoli with Equita. Please go ahead.

Good afternoon and thank you for the presentation. My first question is on Russia. You mentioned before you do not want to take the risk to go to Russia with your ships, so your clients you cannot use your ship to load and unload products in Russian ports. But what about Russian players which have operations outside Russia? We know, for example, Lukoil in southern Italy. So do you expect also not to have operations with Russian players outside Russia? And the second question is on the hedging and the coverage. Given the fact that the spot rates are very high, do you expect to sharply accelerate your coverage going forward? And which forward prices are you targeting, the 2022 or longer dates? And just a third question on the refinancing cost, if you can give us a quantitative guidance on the overall funding cost for 2022.

Here again, I pick up the first questions. No, we do expect Russians, of course, to go to Russia. And they are going to do a big part of what is going to be the future Russian play, because If my feeling is right and China and India are going to be the two big buyers of the Russian barrels, you need somebody to carry on the product down there. There's going to be Russian ships and Chinese ships and probably what we call a ghost fleet, which is a fleet which has been operating... against the sanctions on Iran if Iran comes in the equation officially now. It doesn't need any more of this ghost ship, which probably will move on to Russian oil. So I think this is something that we should expect. The problem with Russian ships or Russian-related ships ships have that they cannot discharge in UK probably are not going to discharge in Europe and US so they have to go to the Far East and that's it, Far East and Middle East and as far as the coverage we are looking to all the opportunities the market is giving to give you an idea we just recently, recently is last week, fixed Vecelo Bianco, which is an LR1, for five months, to Braskem, which is a chemical industry in Brazil, and is the biggest chemical company in Brazil, and we fixed her for six months at $20,000 a day. The same ship was doing five days before $14,000 to $15,000 a day. And we saw this opportunity and we took it. Where we see things that make sense, of course, we will do it. Carlos, you want to answer the last one?

Yeah, thanks, Paolo. Yeah, just to add to that on the coverage that we also... Yes, hello. Can you hear me?

Hello?

I can hear you. Can you hear me? Yeah?

Yes, I can hear you. Okay, perfect. So also relating to the coverage, I will add that we saw quite a big spike in the paper market a few days ago for Q2. So we took coverage. for part of a vessel in Q2 through the TC2, TC14 rules at an equivalent rate, which was almost of $18,000 per day for a conventional vessel, which translates at more than $22,000 per day for an echo vessel. And I remind you, 80% of our fleet is echo. So that signals, you know, it gives a bit an idea of what is the expectation also from the players operating in the paper market of the earnings that MR vessels could be achieving in Q2 this year. So that was a small coverage. It's only part of a vessel that was covered, but it's just to give you an idea of what are these expectations. Relating instead to our financing, the cost of our funding will depend much more on how the forward rates move. So the swap rates that we will be able to achieve on the loans that we will be taking this year and then on the margins that we will be able to achieve. As previously mentioned, we do expect, but I don't want to make comments on this right now, to achieve even tighter margins than we were able to achieve in the financings that we closed last year. It must be remembered that the new financings that are negotiated this year have to be already from the beginning based on the software, not on the U.S. dollar library, and that therefore relative to the U.S. dollar library based on the three months reference, we are talking about 20 to 26 basis points less in terms of benchmark cost to which the margin is then applied. And so the current conflict in Ukraine, after a very sharp increase in the swap rates over the course of the last few months, they have dropped a bit. And there is an anticipation that the Fed might not move as aggressively in raising rates because of what is going on right now in Ukraine, and that possibly should allow us to then cover our interest rate exposure on the new loans we will be taking out this year at a lower average rate, hopefully. Thank you. I pass it over to you for further questions.

The next question is from Daniele Alibrandi with Stifel. Please go ahead. Mr. Alibrandi, your line is open.

Hello?

Mr. Alibrandi, maybe your line is on mute. We cannot hear you, unfortunately.

Sorry? Hello?

Hello, can you hear me? I can hear you.

Yes, I can hear you. We cannot hear you, Mr. Alibrandi.

Okay. Okay.

As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is from Adrian Bignel with Quero Capital. Please go ahead.

Hi there. Just a basic question on day rates. Obviously, the sort of The conflict in Ukraine means a lot of ton-mile distances change around not picking up Russian crude or Russian product. But how long do we think we will enjoy strong rates for? Is this something that's now shifted? And this could be two years of strong rates.

This depends very much on what is sanctioned and what not and how the sanction will go on because if this thing finishes fast as everybody hopes and probably come to a certain type of agreement. Certainly I don't think the world is going to be the same thing tomorrow because whatever it happens because we found out finally we realize how we are dependent on Russia and I would say on Russian energy, because we have 40% of Russian gas coming over. We have close to 50% of Russian refined products, which are mostly middle distillate, coming into Europe. And we are very heavily on coal, too, which is coming from Russia. So, in fact, we have this funny thing that... Germans are thinking of switching to coal, some power plants, but they are going to buy Russian coal at the end of the day. So, you know, certainly something will happen and the landscape of our suppliers is going to change. So I would say, I tend to say that the tonnage will increase and stay there for quite a while. And then at that point, we have to see how big the fleet is and the supply side, how it looks like. And if we have too many services, it's not going to be a big improvement. Or if we, as we expect due to demolition and too low new buildings coming in, the fleet is going to be basically flat. And then at that point, I think we are going to enjoy good rates for quite a while.

And in terms of rates, I mean, I'm asking an impossible question, but I mean, could we see rates up as high as sort of mid-20s towards 30, do you think, if sanctions are up for this year?

Not on a constant, let's say, on a constant basis. It can spike up easily in certain situations. It can easily happen this, but we cannot assume it as a future rate of a market, no.

Mr. D'Amico, Mr. Mottola, there are no more questions registered at this time.

Okay, then I thank you very much for joining us on this call, and we go for the next one. Thank you again. Have a nice day.