d'Amico International Shipping S.A.

Good afternoon, this is the Corsical Conference Operator. Welcome and thank you for joining the Damico International Shipping Full Year 2022 Results Conference Call. As a reminder, all participants are on listen-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. Thank you for attending our 2022 results presentation. As usual, I would skip the executive summary because we are not repeating ourselves. And I leave the floor to Carlos to start the financial part of the presentation. I'll join you in a second moment. Thank you.

Good afternoon to everyone. As usual, we just start with a quick look, a glance at our fleet as at the end of the year, 36 vessels, 20 of which 20 owned, 8 Belpo chartered in, and 8 time chartered in, of which 6 long-term. Mostly MR vessels, 24 out of 36, and then an equal presence in the LR1 and Handy segments. Young fleet, average age of 7.6 years relative to an industry average of 12.8, and Increasingly, an ECHO fleet, we are now at 79% of the owned and wearable vessels, which are ECHO, and 78% of the entire controlled fleet, which is ECHO. In terms of CAPEX commitments, the usual slide we show here, as you know well, we finished our new building program in 2019. Last year, it wasn't planned at the beginning of the year, but some attractive opportunities materialized during the year, which we took advantage of. So we, through a share redemption, we acquired the shares we didn't own in the JV we had with the Glencoe Group for $27.4 million. And that was a very attractive deal, which for us, we were fortunate in the timing. The values of the vessels which were used to determine the share price for the younger vessels were around 21.2 and 19.75 for the older ones. For the older one, the one vessel built in 2010, the other three were built in 2011. And soon after that, a few months later, these vessels were worth around 27 to $28 million. So it's a very attractive price for us. Also, we exercised the purchase option on a vessel TC Din, the High Adventurer, which was delivered to us in December last year. The purchase option was denominated in yen. That's one of the reasons why the price was so attractive. When we took delivery of the vessel, it was worth around 40 million, and the purchase price was around 30, so also very attractive deal there. We also exercised towards the end of last year the purchase option on another vessel to see in that the same price in yen, which translates into $30 million in this case. and delivery should occur of this vessel around May this year. So it's a sister vessel, will be also around five years old by when it is delivered to us. And also at a very attractive price relative to the vessel's current market value. This year in 23, we also have 14.5 million in maintenance capex plant. That is the, let's say a high case, It involves TriDoc special surveys for 10 vessels. It is possible that some of these special surveys might actually slip into 24, so the actual investment figure might end up being slightly lower than that. And it also includes the installation of two scrubbers on TriDoc. two of our LL1s which are stopping for special surveys this year. Going on to the following page, we show our bank debt repayments. Good news here is we have refinanced all the debt which matures in 23 and we only have one facility for one vessel maturing in 24 with a balloon of around $22 million. And we are now working on refinancing this, and there's a lot of interest from banks, and we are seeing very attractive terms. So we are confident we are going to be refinancing this balloon soon, in the first half of this year, most likely, at very good conditions. And then in 25, we only have one balloon also for one vessel of around $11 million to be refinanced. So we have a good runway without having to be concerned about refinancings. Not that that is a source of concern in any ways, given the very strong markets we are experiencing and we are going to most likely be experiencing over the coming years. In terms of daily bank loan repayments, They have been on a downward trend, a significant downward trend since 19. They are expected to increase in 23 mostly as a result of the 2022 refinancings, but then they are going to resume their downward trend after that. And so that is also positive for us in terms of maintaining a low cash break even. In terms of purchase options on these vessels, we refinanced last year two of our leasing transactions with new leasing deals at substantially lower costs for the high fidelity and high discovery. And we have exercised purchase options on two vessels, the high Voyager, which was delivered to us in January, this year in which we are keeping that free for now. And the high freedom, which would be delivered to us around April, May this year, and which we also intend to keep that free. Also, we have the intention of further strengthening the company, reducing our break-even going forward. So there are... three other options which we are likely to exercise this year. The plan is to exercise these gradually over the course of the year. And then a remaining one which we are going to be exercising in most likely in 2024. In terms of purchase options on time chartered vessels, we already discussed those relating to the adventurer and the explorer. The remaining four options are also in the money, but as previously stated, the exercise prices for these options are not as attractive as those for the adventurer and explorer, so given the flexibility we have by time chartering in these vessels. And we prefer for now to not to delay exercise of these options to a later date potentially. So we will continue monitoring the situation and reevaluate whether to exercise these potentially at a later date closer to the end of their firm periods for their time charter in contracts. In terms of contract coverage, relative to our last update relating to our Q3 results, we, as planned, we have increased our coverage, which is now for 2023 at around 20% And also the average rates for these contracts are increasing throughout the year. And starting from Q2, they are at around $28,000 to $29,000 per day, so much more attractive levels than we have benefited from or that we have experienced rather in 2022. Going on to the following page, we give some highlights of how the Q1 23 is progressing. We have fixed, we have for the quarter, 24% of our available employment days fixed at an average rate of around 25,000. and we have around 58% fixed at an average rate of 38,800, giving a blended rate of 34,700 for 82% of the days. That implies that if on the remaining three days for the quarter, we were to earn $20,000 per day, our blended rate overall would be of just over 32,000 for Q1. But if we were to earn as much as 30,000 on the remaining three days, our blended rate would be closer to 34,000. So going on to the following page. We show the fleet evolution, which on the left top hand side of the slide, and on the right top hand side of the slide, we show the sensitivity for every $1,000 per day and $3,000 per day change in the DC equivalent rate. And for this, so for 23, the sensitivity is around $8 million for every $1,000 per day. On the bottom left-hand side, we show the recurring results on the fixed contract dates, including the time charter contracts and what has been already fixed through spot contracts for fiscal year 23, assuming P&L breakeven of around $15,000 per day for the fee. And on the right-hand side, we show the net results, which could be achieved in 23, 24, and 25 for different scenarios for the free days. So assuming $20,000 or 25 or $30,000 on the free days. Assuming $20,000 on the free days, our net earnings for 23 would be of $111 million. And assuming $30,000 on the free days, our net earnings for 23 would be $194 million. Going on to the following page, we show the evolution of our direct operating costs. We have achieved very good results over the last few years here. Of course, in 22, we were confronted with a much more severe inflationary environment. But despite this, we managed to contain our cost increases of these daily operating costs to only 1.9%. and they are still below where they were in 2018, which is, I would say, a very good result. In terms of the inflationary pressures were more pronounced in relation to crew costs and to insurance costs. Insurance costs increases were also related to the increase in vessel values and the requirements to ensure the vessels at these higher values. The GNA evolution has also been positive since 18, although we have been experiencing more upward pressure here already starting from 2020. The increase in 2022 relative to 2021 is, to a large extent, attributable also to the variable compensation component for our employees, which, of course, is linked to the very strong performance of the company in 2022. Going on to the following page, we show a quick look at our financial position and financial strength. The ratio between the net financial position and the fleet market value, shouldn't come as a surprise, declined significantly since the end of 21. It stood at 36% at the end of 22. relative to 60% at the end of 21. And we were at 73% at the end of 2018. So that is a big improvement. And the vessel values have held up well also in the beginning of 23, actually moving slightly upwards. And we have also been generating substantial amounts of cash this year. So our expectation is that this ratio will have improved, further improved by when we approve our Q1 financials. Going on to the following page, here we finally have the key line items of our P&L. Q4 was exceptionally strong, $72 million in profits. the strongest quarter for this so far. And also on an annual basis, excluding non-recurring items, it was the strongest result so far for this with profits of almost $135 million. excluding non-recurring items for once. The profits are actually slightly smaller. Q4, they are just below $70 million. There was a reversal of impairment of $2 million in the quarter on two vessels for which we had in the past recognized an impairment. And however, on a full year basis, excluding non-recurring items, the results are even higher and they are at $137.6 million. Going on to the following page, we show the results of both our vessels employed on the spot market and of the average rates for our TC contracts and the Charter contracts, as well as the blended rates. And there is, of course, a very clear trend of quarter on quarter improvements throughout the last year. So the Q1, the market was still subdued with an average rate of 12.9, but then every quarter since has been We have almost $29,000 per day achieved in Q2, 37 in Q3, and almost $43,000 per day achieved in Q4 for our vessels operating on the spot market. TC average rates have been close to break even throughout most of last year. with the exception of Q4, where we started seeing these average rates increasing, and they were at almost 20,000 in Q4, leading us to a blended rate in Q4 of 38,300. Overall, the blended rate for 22 was 26,000, almost 400. And that is the summary of the the key financial highlights, and I pass it over to Paolo for the market overview.

Thank you.

Thank you, Carlos. According to Clarkson, today the one-year time chart for an ECO-MR are $33,500 per day, and for an LR-1, $41,000 per day. And this gives you an idea of where the market is at this exact moment. As you can see from the graph, we still have room on asset values for some increase. If we move on to the Ukrainian situation, of course, as you know, we have two dates, one in December and one in February when Europe banned basically all Russian cargoes before crude and later on on products. This is both clearly EU imports lead to very low levels and the Russian oil exports lead to 60% in January 2023 compared to 50% in February 2022. And Russia has been looking for buyers somewhere else, and they found them in Turkey, in China, and in India, as historically now is happening. As far as Russia refined product exports, The loadings for European ports decreased by 73% between January 21 and February 23. Turkey increased by 191%. And Africa, in general, increased by 664%. i mean countries in north africa that usually historically were not importing russian diesel today they are importing everything due of course to discounted price as you know uh opec announced a larger and not expected cut of two million barrels per day and but as you being part of the open country is not in position to to produce the full amount the real cut is around one million bar we the forecast for from a supply on a worldwide basis, we are talking about 101, so we are overtaking with 100 billion barrels per day in all the world. Going ahead, COVID is a story of the past and we hope it's not anymore an element of of impact. Also China now, as you know, is opening up and we already start seeing the result of it. The oil demand is growing and of course the refining throughput is following up. So here again we have refineries which are pushing more and more the capacity. The levels of product inventories are very low, which means that this is the basis for increased movement in the short future. We have a very tight diesel market. in the U.S. and in Europe. U.S. is not common because normally U.S. is an exporter of diesel. But in this case, they are even importing on the East Coast. And the jet fuel demand with the world going back to travel for holidays and for business, but mostly for holidays, but jet fuel demand is rising strongly. There are more and more flights operated by the airlines, and of course, the jet fuel is rising steeply. Also, the crude tanker market is recovering in a very strong way, so we shouldn't see any more the competition of crude oil tankers in the clean market, as we saw in the past, because crude is paying very good rates. The long-term demand is always healthy and with a good growth, and the total oil seaborne trade from refined products is still one-third of the total. is very strong. We have the usual changes in refinery landscape. This is a slide you know very well. The growth of the refining capacity is mostly concentrated in Middle East and Far East, which means very much far away from the market, the consuming markets. US Shell Oil is increasing very slowly because resources are not used to increase production, but are mostly used to pay back debts and to pay shareholders. And now just look to the supply side of the industry. In Europe, we have two indexes which are coming in force this year. One called EEXI, which is an index representing the ship itself. So how much efficient is the ship? And CII, which is an operational index, which tells you how much efficient you are in your operation. Both of them are related to CO2 emissions and these indexes will force all ships in efficient ships either to move out of a market and go for scrap or to reduce the speed because an old ship and an inefficient ship has the only tool it has to reduce emission is to reduce the speed. So both elements are elements which are shrinking the supply side, which is a positive effect for us. In all this also the fleet is getting older. So, The candidates for demolition are increasing by number. We see in the graph the growth of the number of ships, four, I mean, percentage wise, of ships which are overtaking the 15 year and the 20 year of age. 15 year is the last anniversary for commercial I mean, the top oil companies would never touch a ship older than 15 years, 20 years, because it becomes the age where you really seriously think to demolish the ship. The deliveries are very slow coming in on the coming months. There is a very limited new building order. The reason is because the cost for a new ship will grow a lot. If you think that our MAs, we all paid them around $32, $33 million. Today you need $45, $46 to build the same ship. The second reason is technological. Those who still don't know... We still don't know the final fuels that we are going to use. So nobody wants to take a risk on longer term and to have an obsolete ship. And last but not least, the yard availability because the yard are full of full containers, orders and LNG ships. And this doesn't give any space or very limited space for product carries. There are some new building orders, but they are very marginal. So the final result of all this, that we have a really very low fleet growth. We are talking about less than 1%, which means to me that basically it is flat. Thank you very much. I'll be giving back to Carlos for any

Yes, hi again to everyone. Just a quick look here at NAV to end the presentation. In the red line here in the graph, we show overall NAV in absolute terms, and it has been rising steadily since December 2020, and it ended last year at almost $740 million. which on a per share basis translate to $0.6 per share. Our share price was, at the end of last year, translated into dollars that was trading at $0.4 per share, so still at a substantial discount. Since then, the share price has traded up quite a bit, but of course also the NAV has risen most likely well in the meantime, both because of an increase in asset values and also, of course, because of the strong cash generation that we have been witnessing this quarter. So yeah, although the shares have performed very well over the last year, they still seem to be attractively priced relative to intrinsic value and fundamentals. And I believe that's it, so I will pass it over to you for the Q&A session.

This is the Chorus Call Conference operator. We will now begin the question and answer session. To enter the queue for questions, please click on the Q&A icon on the left side of your screen and then press the Raise Your Hand button. Please do not mute your microphone locally, and when prompted, make sure you turn on your webcam in the pop-up window. If you are on the phone instead, please press star and one on your telephone. The first question is from Matteo Bonizzoni of Kepler-Chevreux. Please go ahead.

Thank you. I have two questions. The first one is related to the nav evolution, to the fleet value evolution principles. So we have shown that the fleet value has materially recovered over the last quarter, particularly since the beginning of 2022, but it still remains in terms of valuation per ship, both for new buildings and the vessels below previous peaks, which were touched in 2007-2008. So you are of the business, differently from us, so I'm asking to you, do you expect maybe the trend of the asset value to continue to go up and maybe to reach the levels touched in 2007-2008. Second question is as regards your financial charges. Can you remind us a little bit of sensitivity as regards the financial charges in relation to the interest rates on the market, fixed versus variable rates, and an approximate indication of interest charges for 2023 on sensible assumption on interest rates or some sensitivities.

Thanks. Okay. So, thanks for the questions. In relation to the asset values, yes, it is true, as we are showing now again here on page 20, that they are still well below the last super cycle peaks that were reached in 2008, 2007. In terms of five-year-old vessels, they are still 23% below last cycle peaks and 10-year-old vessels around 29% below. There is therefore room for these vessel values to move up to continue rising. And it's also interesting to note that TC rates, when vessel values were last at these levels in 2007 and 2008, were actually slightly lower than where they are today. And also the spot rates of peaks that we have reached in 2022, particularly in the end of 2022, were not seen at that time. So that seems to indicate that there is a misalignment between asset values and earnings. which could reflect the fact that the market participants are not that convinced about how long this upcycle can last. But we do see very strong fundamentals. I mean, there's, of course, one element of the upcycle which is linked to the inefficiencies generated by the Ukrainian war. And nobody knows how long that will last. We all hope that will end as soon as possible. But there are underlying fundamentals which don't depend on the war, which are very supportive of the market. And we are talking here still of the pent-up demand coming as China reopens, and in particular increase in demand for jet fuel, which is still well below normal. pre-COVID levels. In particular, international long-haul flights still have to, still well below pre-COVID levels and have a lot of room to increase. And, of course, the supply side, which has never looked so good. When we were in the last cycle peak, the supply side was not nearly as good. Actually, it was terrible. There was a lot of vessels on order. Now we find ourselves at the beginning of a recovery where we actually have an order book, which is at a historical low, which is unheard of. And what is really positive is that the incentives to order vessels seem to be quite limited now because vessel prices moved up, new building prices, quite significantly. not only because of the strong fundamentals in our sector, but also because we were the last of the main shipping sectors to peak in these last few years. We had the container sectors and the dry boat sector that did much better before us and the gas sector. And so yards got full with new buildings for these type of vessels. and of course, reducing their appetite to build the product tankers and the contributing to the firmness in the prices and delaying delivery. So even if vessels are ordered today, they would only be delivered in 25, which means that we have a very good two year runway before we can eventually be confronted with a supply issue, which in any case, we don't see materializing for now. In terms of, Financial charges, including the cash that we expect, the average cash balance that we expect to have this year, and taking into account the indebtedness which is hedged, our sensitivity for every 1% increase in the software library rate of our net results is of minus $0.6 million. And for 2024, given our expectations, I would say rather prudent expectations for the market, we actually expect to be perfectly balanced and not to have any sensitivity whatsoever to the interest rate. In terms of absolute numbers for the interest rate, I would rather not communicate because, I mean, that would also imply an assumption about what the software rate or library rate would be this year, which I guess you can make your own assumptions in that respect.

Thank you.

The next question is from Daniele Alibrandi of Stifel. Please go ahead.

Good afternoon. Thanks for taking my question. Congrats on these strong results. I have several questions. I'll start with three to be taken one by one. So my first one is on TC-out contracts. Some of your TC contracts were expiring in January, but you managed to increase the coverage, as you said, to 20%. I also saw that the time-chartering activity has peaked in Q1, it's increasing. A SHIB broker was saying 30 vessels were booked on clean product tankers, most of them MRs. So the question is, basically I was curious to know if you are seeing the negotiation getting tougher given the volatility in the underlying market. or not because charters are basically surrendering. And if we can take the 20,000 level as a good proxy also for the year on this fixed rate. This is my first question.

What I could say is that number one, charters will never surrender. It is a continuous fight. And I have to say we are quite resistant to this number, but we have to accept it because either we do it, I mean, the market, it is what it is now. Thanks God is in our favor and it plays well. I didn't understand very well about the 20,000, sorry.

No, 28,000. I saw that in one of your charts. Yeah, it was... 28,000 more or less for each quarter.

That was the average for the contract coverage, average rates for Q2 to Q4, 28,000 to 29,000. Exactly. Yeah, that's for the existing contracts which are signed. Today, if you fix an ECHO MR vessel, according to Clarkson's, the going rate should be around $33,000, $34,000 per day for one year for an ECHO MR vessel. And for an ECHO, I allow one vessel around $41,000 per day. So, yeah, new fixtures done. If we were to fix new vessels on time charters today, these are likely to be the levels that we are going to be achieving on these contracts.

Okay, so 28 is, let's say, a rather... cautious if you maybe fix the... Yeah, it's the average of existing contracts.

I mean, we have in particular one contract, which is a bare boat charter out contract, which was fixed some time ago, which is bringing down that average because it is at a TC equivalent rate of around 20,000 if you transform it into a TC equivalent. So that is why the average is not higher than that. but hopefully as we fix more vessels on time chart, that average can increase. Okay, great.

And the second one, I'm not sure to have well understood your slide 13, the two charts at the bottom of the page. So you are basically saying that 55 million in net profit today is already booked and the difference will come from the different scenarios from the spot, right? So 55 already booked.

No, it's correct. 75, 74.5.

Yes, yes, 75, sorry, 75, yes.

Yeah, slide 14, yes. Yes, that is the case, yes. You could interpret it that way. You could interpret it. On our remaining three days, we were to break even, so earn $15,000 per day. our net profit for the year could potentially be this much. Of course, this relies also on an assumption about our costs, which generally speaking are not very volatile, but yeah, that is a correct interpretation, yes. Okay, fantastic.

And the last one, how should we think about the level of the loan-to-value through the cycle that makes you comfortable with assuming asset values at this level where we are today. Because this year, I guess the loan-to-value will further go down.

Yes.

So just to understand basically how much extra cash you could end up.

Well, I mean, as we communicated today and in the recent past quite consistently, we plan to continue the leveraging. As you saw from our press release, the board proposed a dividend of $22 million, which will have to be approved at the next AGM. So some cash is being distributed to shareholders. Of course, if the results continue being as good or even better than we had last year, most likely more dividends will be arriving to the shareholders. But we do plan to continue deleveraging and strengthening our balance sheets. by exercising these options on the vessels which are currently on bare boat charter and initially at least keeping them debt-free. And then when the right opportunities arise for us to make attractive investments, we would most likely lever up again our balance sheets so that we have the firepower to make these investments. Okay.

Just to follow up on this, because I remember that you mentioned in a couple of earlier calls that you were also saying you're seeing, for example, Armour and seeing their distribution policy. So are you thinking maybe also there are some space to see a start of a quarterly dividend or something? Can we start to think about this or is it too early to say?

I would say it's a bit too early, most likely, to look at that. But we are definitely, as I mentioned, the group seems inclined to distribute more cash to its shareholders if the results continue being as strong so and of course given after we you know we have reached our objectives in terms of strengthening our balance sheet it is likely that a higher percentage of the profits will will will be distributed to the to the shareholders although we don't have an explicit dividend policy

Okay, fantastic. Congratulations and good luck for the future. Thank you. Thank you.

The next question is from Massimo Bonisoli of Equita.

Please, go ahead. Hello, good afternoon. I have two questions, one qualitative and one clarification. Can you provide some color on the tanker market and the competitive environment post-claim product embargo and also by different route? And the second question is on your slide on page 39. You do not include anymore the unethical capital effect at the end of 2022. Does it mean that working capital is normalized or how should we interpret it? Thank you.

As far as the market after the last embargo, what's happening and what was basically forecast is that we are more, for the moment, the system is already stopped. So you see movement, but they are not yet that big. But the principal place of supply for diesel is coming out of the Middle East and is starting also out of China. and this is something that we knew and this will increase that online terribly we have to wait for the springtime because in springtime you have the agriculture which starts and so you have an increase on diesel consumption and we expect a tighter market, of course, as far as Europe. But as we said, even U.S. is short of diesel due to maintenance of refineries, due to high consumption for bad weather. The bad weather in U.S. also limited in some days the refining activity. So also U.S. has, let's say, a shortage problem. And as I said, U.S. will go in competition with Europe for the diesel battery. But as I say, what was coming, the 40% of European consumption, which was coming out of Russia, now is coming by far... In the meantime, we are seeing again an activity in the sale and purchase market of all product carriers, both we don't know by whom, and we suppose part of them probably will end up in the so-called shadow fleet. Because also Russia has a problem to move its own diesel in more distant places. And they do not have, I mean, they didn't have in the recent past a good, a big fleet of product carriers, on the contrary of the crude ones.

And then the other question on... On the NAV, yes, thank you, Massimo, for supporting this. Actually, the NAV does include the working capital, the net working capital. It's of $79 million in December. It doesn't appear, the blue bar doesn't appear in the graph, but it is included in the calculation. for arriving at $737 million in NAV. It is actually an increase. So we had quite a big increase in receivables towards the end of the year. A lot of our charters were a bit slow in paying. I mean, this is a trend that we actually saw throughout the year. They have been slower than usual in paying. They usually paid the freight three to five days after discharge, and they were often paying even two weeks after discharge. Of course, there's also some gaming towards the end of the year where they want to show potentially a higher, a better cash position, so they delay payments. Unfortunately, charter contracts don't provide as much leverage in forcing them to pay earlier. But a lot of that cash has already come in, of course, since the end of the year. So actually 100% has come in already. So it's not a bad debt problem. It's just an industry problem. It impacted us as other shipping companies in the same way. And actually what we have been seeing is that payment performance has improved quite markedly this year, and charters are now back at being freighted three to five days after discharge, which is what we usually experience.

If I may squeeze in a very quick follow-up question. Just on your dry docks, you mentioned before you want to install two scrubbers on 2LR1. Will this dry dock impact a particular quarter or will it be spread across the air?

The dry docks, they are pretty much spread throughout the year. There are three which are expected to happen at the end of the year and which might be postponed because there is some flexibility on the timing of the dry dock. So it is also possible if we were to stretch it to the last possible date that these dry docks happen. happen in 24 or some might start in 23 and end in 24. Very clear. Thank you.

Congratulations again.

The next question is from Clement Mullins of Value Investor Edge.

Good morning. Thank you for taking my questions. I want to start by asking about your TC investments. Could you provide some commentary on when the TCE vessels without purchase options are to be delivered to their owners?

Yes, we have some, cannot provide you the exact details, but what we do provide, which might be helpful, is in the slide here where we show the fleet evolution. Getting there. Yeah. You see here, this is the average vessels controlled in these years in 23, four and five. And you see already that in 24, we have a decrease in the fleet relative to 23. The light blue are the firm TCNs. So we have 7.3 vessels on firm TCNs in 23. It goes down to 3.2 in 24, but we have on the gray bar 1.9 vessel optional TCNs. So these are vessels which we, depending on the market conditions, can decide to extend the time charter ends or re-deliver them to the owners. And then in 25, the firm TCNs fall to two vessels, and we have two vessels which are with also optional TCNs. So you also see the evolution on the bare boat chartered in vessels here, how they throughout the next three years.

That's helpful. Thank you. And you've been clear you plan to continue the leveraging while also outlining your willingness to distribute dividends if rates remain strong. Is there any appetite to pursue share repurchases given the discount to NAD your shares are trading at? Or does the board generally prefer to stick to dividends?

No, but I would say that The thinking right now is to stick to dividends, not really share repurchases. But, of course, we do have the room to act on share repurchases if we want to. We have today that our treasury shares represent 1.46% of the issued shares. And the authorization provided to us would allow us to increase that to 15% of the issued shares. So there is room to do much more, but the thinking right now is mostly deleveraging and dividends.

Makes sense. That's all from me. Thank you for taking my questions, and congratulations for the quarter. Very good.

Thank you. Thank you.

As a reminder, if you wish to register for a question, please press Q&A on the left bar and raise your hand or press star and one on your telephone. For any further questions, please press Q&A on the left and raise your hand or press star and one on your phone.

Gentlemen, there are no more questions registered at this time.

I'll turn the conference back to you for any closing remarks.

Okay. Thank you very much, then, for joining us. And at this point, we will meet again at the next call, which will be in May. Yes, in May, 11th of May. So thank you and have a nice day. Thank you.

Thank you.