d'Amico International Shipping S.A.

Good afternoon. This is the Corsco Conference Operator. Welcome and thank you for joining the D'Amico International Shipping 3rd Quarter and 9 Months 2023 Results Conference Call. As a reminder, all participants are in 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 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 and welcome to our usual quarter call. Thank you to BUS. So going to a presentation, we would jump the executive summary as usual because we are not complicating things. Say that I pass on the floor to Carlos Ballestradino, who is our CFO. Thank you.

Thank you, Paolo, and good afternoon to everyone. So we start as usual with our fleet overview. As of 30th of September, we control the fleet of 36 vessels, so the same as at 30th of June, when we last presented our results. but the fleet composition changed slightly. So now we have 26 on vessels, so two more than as of 34 June. And we have three bare boat chartered in vessels. instead of five, which we had last time. We still have seven vessels charted in. And, of course, we are still, our main segment is still DMRs, where we have, where we control 24 vessels, and then we have an equal presence on the other ones and MVs. Young fleets, 8.3 years average age relative to an industry average of 12.5 for the MRs and 13.7 for the LL1s. And mostly ecodesign, this percentage has been rising over the course of the last few years and should continue rising in the future. We have such a young fleet because of the important new building program which we were involved with, through which we ordered 22 vessels since 2012 and which were delivered to us, all of them by the end of 2019. Yes. Hello. I think there was a technical problem, unfortunately, with our microphone. So I apologize for that. We continue with the presentation. So CapEx commitments for the full year and the maintenance CapEx expected is of 11.1 million. And that figure is slightly down from what we had anticipated at the beginning of the year. That's because a few dry dots were postponed to next year. So at the beginning of the year, we expected the maintenance capex of 14.5. And then, of course, the maintenance capex for 24 now is estimated at 6.4 million, which is higher than what we initially forecasted of 3.3 million. Going on to the, of course, then the other big investment this year was the exercise of the purchase option of the High Explorer for around $30 million, which was the best one that was already delivered to us. So going on to the following slide, here we show bank debt repayments. We used to show also the upcoming balloons, which had to be refinanced, but there are none here shown because there are none upcoming in the next two years. So the first balloons we have are only at the end of 2026. So that is, of course, positive for us. And the daily loan repayments on our loans have been falling as a result of the purchase options we have been exercising. And some of these vessels, we have kept them debt-free. Also the new laws that we recently drew down had a slightly longer maturity profile, which also helped in this respect. Going on to the following slide, the purchase options of the lease vessels. So there are only three left now. which can be exercised next year, M1 in September 25. So we will eventually be exercising these options. Some of them it's quite convenient to exercise early. Maybe one of them we might wait closer to the purchase obligation date, which is the charity booster. But we will eventually, of course, be exercising all of these and reducing our break-even by doing so and so on. And going on to the following page, we show the vessels which are time-charted in, on which we have purchase options. Two already exercised, they were denominated in yen, and because of the strong depreciation of the yen relative to the U.S. dollar, they were particularly attractive. The remaining four are also very attractive, as we will see later when we look at our NAV. We have also included the value of these options now in our NAV calculation. They are all in the money, and they can all be exercised. So something might happen also on this front, depending on how the market develops. And here we show instead our coverage and our Q4 coverage now is at 33% of the available vessel days at an average rate of almost 28,000. And we have also increased our coverage for 24, which now stands at 25%. at an average rate of 26,600. We have recently fixed three handies and one LR1 on time-chartered contracts, and that has contributed to this increase in coverage for 2024. um so 26.6 is lower than what our vessels are earning on the spot market today but it's still a very good rate and it provides us some good visibility on the earnings already for next year which Going on to the following page, we show here, we have some on how we have been trading in Q4, and we have 33% of the available days in the quarter, which were fixed through TC contracts at an average rate of 27,900, and another 33% which were fixed on spot voyages at an average rate of almost 30,000, 29,820. Giving a blended rate for two thirds of the days in the quarter of almost $29,000. And so hopefully we can do even better than that. By the end of the quarter, usually we see the market strengthening in the second half of November and in December, and we expect the markets to follow that trend also this year. Going on to the following page, page 14, we show our fleet evolution. And we show at the bottom left the recurring results on the fixed contract days, so both time charter and spot contracts already fixed. And for 23, we are already at $182 million. And for 24, we are at $35 million. So we are starting to have some visibility also on 2024. What does that mean for the full year 23? Well, I mean, those figures we are showing here on the bottom, they are just potential scenarios which will help you investors and analysts then make your own assumptions. We are not providing guidance here. But if we were to earn $25,000 per day on the remaining three days, our would be 191 million. At $30,000 per day on the remaining three days, our profit for the year would be almost 197. The 24 instead at $25,000 per day on the three days, our profits would be of 123 million and of almost 170 at $30,000 per day. very strong results potentially if the spot market continues being as strong as this year, where we were on average about $30,000 per day. Going on to our costs, daily operating costs. As was expected this year, we saw an increase in these costs. We have been pretty flat between 19 and 22. But this year, as most other sectors, we were confronted with important inflationary pressures, which affected, of course, also the crew wages for us, but also insurance costs, because we had to insure our vessels at much higher values, reflecting the current market values, and And of course, that also contributed to the increase in direct operating costs. There were also increasing costs for spare parts. But the good news here is that as we had expected, the daily operating costs for the nine months of this year are lower than they were in the first half of the year, where we were at around 7,800. And now we are below 7,500. So there's an improvement there, which was anticipated by us. But we are glad we are seeing that in the actual figures. And on the G&E front, there was a big increase this year. A lot of that increase is linked to variable remuneration, which is connected to the very strong results that we achieved in 2022 and we have been achieving this year. So a lot of this increase will unwind eventually if markets correct. Of course, we don't expect that to happen soon. So it is a buffer, a safety buffer, which we have. And so not all of this increases, it's a permanent increase in GNA. Here we are showing instead the ratio between the feed market value and our net financial position, as well as some balance sheet figures. This ratio improved from 36% at the end of 22 to 21 and a half percent as of 30th of September. As at the end of June, it was around 25%. So it improved also relative to the end of the first half. And we expect it to continue improving, although at the lower pace going forward, it will continue improving because we expect to continue generating substantial amount of cash in Q4 this year. and also next year. And we ended the quarter with 105 million in cash, which is slightly less than our cash balance at the end of the first half of the year. And at the end of last year, at the end of the first half, we had 130 million in cash. The decrease is due to the fact that we took delivery of two purchase, of two vessels on which we had exercised purchase options in Q3 this year. And it's due to the share repurchases for 6.1 million euros, which took place in Q3 this year. vessel values increased slightly during the quarter, which also helped this ratio improve. Going on to the following slide, we show our results, key P&L line items, for Q3 and for the nine months this year and for the same periods last year. And in Q3 this year, our profits were of almost $50 million, so $48.9 million. So $5.3 million more than our profits in Q3 2022. And in the first nine months, our profits were almost $150 million. So well above what we achieved in the first nine months of last year. These very strong results were achieved because of the very strong spot markets that we benefited from this year. um and uh our average rates in the year when the spot market was of 33 400 um and we have seen that there was a slight correction between Q1 and Q2 in the average spot rates achieved. But since then, average spot rates have kept pretty steady. And if you look at the blended rates, so including also the type charter contracts in Q2 this year and Q3 this year, they're actually pretty much aligned. There's only a $30 per day difference. we achieved 30,860 in Q3 this year. So this is it for the financial highlights and I pass it over to Paolo for the market overview.