d'Amico International Shipping S.A.

Good afternoon, this is the Coral Skull Conference operator. Welcome and thank you for joining the Danico International Shipping first quarter 2022 results. As a reminder, all participants are listening only mode. After the presentation, there will be a Q&A session. For operator assistance via web call, please press the headset icon on the bottom left side of your screen. For conference call assistance, please press star and zero on your 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. Hello to everybody. Good afternoon and welcome to our first quarter 2022 presentation. Going straight to the presentation itself, I would skip the executive summary because it's just a repeat of what we are going to say afterwards. And I would go straight to the first session on this overview, leaving the floor to Carlos Balestra, our CFO. Carlos, the floor is yours.

Thank you, Paolo. Good afternoon to everyone. As usual, we start with the slide just for a quick overview of our fleet as at the end of March. We controlled 36 vessels, of which 26 either owned or billboard chartered in, and 10 time chartered in, nine of which long-term. Mostly MRs, as usual, 24, and same number of LA-1s and HENDIs. We did announce recently the sale of one of our oldest vessels, our oldest vessel in the fleet, the high priority 17-year-old vessel. It will be delivered to the new owners around the 12th to the 15th of May, we expect. So it's still included in our fleet as of 31st of March, but it will be leaving us soon. We have a very modern fleet, average age of seven years, which actually falls following the disposal of the high priority to 6.6 years. And we mentioned here 81% of our own unbearable fleets, unbearable vessels are echo following the disposal of the high priority. This percentage actually rises to 84%. As you know well, we renewed our fleet through an important new building program with vessels which we started ordering in 2012 and which were delivered to us between 2014 and 19. Going on to the following page, we don't have any new building CAPEX commitments left. We do have maintenance capex planned, but also in this respect, the amounts have been falling from 12 million in 2020 to 6.8 in 2021, and it falls further to just below 4 million in 2022. And then it stays at around the same level in 2023 and 2024. On the bank debt side, as previously discussed, we have refinanced all the debt maturing in 2022, mostly at the end of last year. One of the facilities was drawn in Q1 this year. And we are currently working on refinancing the debt maturing 2023, and we are making good progress in that respect. We're seeing good appetite at very competitive terms from the banks we work with. And we expect to finalize this before the summer, if not all the refinancing, the large majority. In terms of... bank debt repayments. We finished reimbursing some facilities which had quite a fast amortization profile. That is why the daily bank loan repayments has been falling and is expected to continue falling. There are a few of these facilities with fast amortization that we are going to either refinance or finish reimbursing in the course of this year and next year, so. Going forward, the purchase options on our lease vessels, we already exercised one of these and then we sold the vessel, that priority, as we just discussed. There are still eight left, the, LTVs on these vessels are around 80% today, some slightly higher. Given the very strong markets we are currently experiencing, and we are going to discuss this in greater detail later, but we expect markets to stay at strong levels throughout the year and then also in the following years. We expect to be able to start exercising these options. Vessel values are also moving in the right direction in this respect. They started rising in the second half of last year and continued this trend also in the first part of this year. So these LTVs should be falling and we will, if needed, also have the the additional liquidity to invest at the right time to exercise these options and therefore lower costs of funding. Going on to the following page in terms of TC coverage. TC coverage is part of our strategy, our core strategy, of course, However, we do look at the prevailing market conditions and at the expected future market conditions when we decide how much coverage to take. So we intentionally, given the very positive outlook, which we anticipated for the second half of 2022, kept our coverage quite short. When we did take coverage, starting from the end of last year, we did so usually for not longer than 12 months and often also for a shorter period, around six months. That explains why our coverage falls quite rapidly throughout 2022. Already in Q2, we are at 38%. And then it falls even faster thereafter. And in 2023, our residual, our current coverage represents only 6% of our available vessel days. This coverage, which is falling, is, however, at increasing rates. The blue line includes also the bearable charter contract. And we see that the lowest level was reaching Q4 21, and this line starts rising quite fast. It's also very positive, especially in the current very high fuel oil price environment we're experiencing. And given the regulations that we are going to have, we're going to be facing from next year that we have an increasing proportion of echo vessels. This is for all our feet, including the time charted in vessels and for 2022. 80% of our fleet will be composed of echo vessels, and this should continue rising over the course of the next two years. This is the fleet evolution. We also included here in dark gray the optional TCN vessels. These are vessels which we TCN. in which we have extension options for these TCs. And they start some of these firm periods, terminate in 2023, one at the end of 2023 and a few others in 2024. And of course, in a very strong market as the one we anticipate we will have over the course of the next few years. we will be looking to exercise these extension options, which will allow us to control a larger fleet going forward. And we include also the sensitivity at the bottom for every $1,000 per day change in DTC equivalent earnings. And we see that we still have a $6.6 million sensitivity for the last three quarters of 2022 and of $11 million for 2023 and 2024. Going on to the following page. Also on the cost side, we have been achieving some good results. We did experience an increase in Q1 last year. Um, and, and then we, we, we, we, we experienced a further contraction in the Q1 of this year. Um, but the trend has been one of, uh, of falling, uh, direct operating costs. Of course, the, the fleet renewal program, uh, played an important role here. Uh, also the investments in technology, um, which allows us to, uh, better determine when to replace spare parts has helped. And in particular, in the first quarter of this year, we were helped by the strong U.S. dollar. This is even more important for our GNAs since 75% of our GNA costs are in currency other than the U.S. dollar, and most of which are in euros. So we are currently benefiting from the very strong US dollar in that respect. Going on to the following page, the ratio of net financial position to fleet market value improved relative to the year end figure from the decrease from 60.4 to 58.5. Despite the small loss we did in the quarter, this is of course because of the positive dynamics we discussed regarding vessel prices. Mostly the valuations of our vessels as of 31st of March were confirmed to be in line with those we had been provided as at year end. Of course, the vessels aged since. Formerly, they are one year older. So it does imply an increase in prices. And this trend is continuing also in April, has continued also in April. Of course, our liquidity position also improved slightly despite the loss we made. This is thanks to the sale of the high valid, which was delivered to a new owner in January. And it will improve further also thanks to the disposal of the high priority, which I previously mentioned. The net result, we have here the key P&L line items. It was a loss of 6.5 million, but excluding non-recurring items, the loss was of 4.2 million. The main non-recurring item being the asset impairment on the sale of the high priority. And in terms of data, Daily results on the employment of our vessels, on the vessels employed on the spot market, the average daily result obtained in the first quarter of the year was of around 12,900, including the TC coverage at almost $15,000 per day. That led us to a blended rate of 10%. 13,800, which was much better than the market, than the prevailing market in Q1. And if we look inside the quota, we had quite a good January, a very weak February, and then a stronger March. where we started benefiting from the effects of the war in Ukraine and the increase in the average distances over which these refined products are being transported and which Paolo is going to be discussing in greater detail soon. So I pass it over to Paolo now for the market overview.