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.

Thank you, Carlos. Talking about the market, not too many things have changed since we last met. If we look at the asset values, what we can say that the rates improve quite a lot from the start of the Ukraine war and also the values, but the values have been not so fast as the rate are being. This is quite normal because the values on ships, they follow after a time element, the improvement of rates. On the refined products from Russia, it happened what we forecast really, since the cap and since the sanctions, the flow has been diverted from Europe, from Russia to Europe. they go even more further away like India, China, Africa, Turkey, and Brazil, and Middle East. So more ton miles for the Russian exports and also more ton miles for the European imports. Everybody was predicting a deficit due to the OPEC Plus cuts on production for the second half of this year. But what we are experiencing today, that the flow of crude, at least, is basically steady. So this cut has been offset by a few elements. And... I suppose these elements come from OPEC members who are supplying more than their quotas. The Venezuela opening to the United States, which of course is not going to be a big increase for infrastructure problem, but it's going to be an increase. And we have most of the non-OPEC countries like Brazil and today also Guyana, which is a big producer at this point, who are pumping more. So the so-called cuts that Saudi Arabia and the rest acted a few months ago, thanks God for a moment it's been offset. The three puts from refinery has been recovering and today we are in a We are in a phase where not all the refineries are out of the maintenance period in the full maintenance period. So the operation of refineries and as a consequence the flow of cargoes is quite difficult to assess in a full way. Inventories for refineries products are low. And the cracks, even if today they have been corrected downwards on some products, are still high. We think that NAFTA and diesel, who are today not really the big winners, for next year they should They should improve and give us a better growth of 24. The 23 has been fueled more by jet fuel due to many people going back to fly. Not as much as we thought. China didn't perform the way that many analysts were predicting. The domestic flights have been full back to 2019 levels, but below the whole flights, no. As I said, we have a strong support from the crude side of the industry because of this increase of production of crude oil from non-OPEC countries. As a matter of fact, there are quite a number of the LCCs moving in this moment, streaming to the U.S. Gulf to load American crude, and only 50% of them, they are fixed. So the rest is going on pure speculation. The changes of the refined Landscape, you know them. On the positive side, we have the big part of it coming from Middle East, China, and India. On the negative side, we have to keep in mind that the Dangote refinery next year should go to power in Nigeria. This is going to, of course, affect the imports of clean products to West Africa, and it's going to be a very long program. So it's not going to affect it that fast. Shell oil is increasing. Its production is growing. This is good news because it will be an element of of more crude coming to the market. And so on the demand side, I would say overall the situation is still very positive. This netting up any sort of recession forecasts that have been taken up to now. Looking to the supply side, There are elements to think that demolition should start kicking at a certain point. One, because of the new indexes which are coming into force in Europe, the scarce financing for older vessels, the price of steel which is still sustained for demolition. the growing pool of demolition candidates because the big bulk of product carriers is being built in the first decade of this millennium. So from year 2012 up to 2010. So these ships are becoming, the youngest one is 13 years old, but the oldest one is being 23 years old. These ships are becoming more and more candidates to be phased out. So we have very slow deliveries in front of us. The new building orders are very limited due to the price, to the uncertainty of the fuels for the future. So, and the final result, we have a very low fleet growth, basically flat, very close to flat. So I would say overall into the demand element and even more on the supply side, I think the overall look of a market is still positive for quite a while. I leave the floor to Carlos again. to comment on the NAV. Thank you, Paolo.

And on the NAV here, and it shouldn't come as a surprise, there was a further increase relative to June. So on a per share basis in US dollars, at the end of June, we were at 7.1. And now we are at almost 7.9. And on an absolute basis, our NAD increased from 870 million to 947 million. And this includes, as I was referring to before, also the value of the purchase options on the TCN vessels. which we estimate are in the money for 34 million as at the end of September. So as at the end of September, translating our closing share price into US dollars, we were at the discount of 38% to NAV. Since then, the share price traded up a bit. And therefore, using yesterday's closing share price, our discount to NAV was slightly lower. It was of 30%. Still substantial, but slightly lower. There's still a lot of upside here, also taking into account the fact that our NAB should continue rising, especially because of our strong forecasted cash generation in the coming quarters. But we also believe vessel values should be well supported. And as we have shown in our presentation, Vessel values are still well below the peaks reached in the last super cycle, whilst instead earnings are at the same or higher than they were in that last cycle. So there is still room in theory for vessel values to continue increasing. So I think that's it. These were the key messages and we pass over to you for the Q&A session. Thank you very much.

This is the Coruscant 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 1 on your keypad. The first question is from Matteo Bonizzoni of Kepler Chevreux. Please go ahead.

Thank you. I have two questions. The first one relates to the interim delivery and distribution. So you are now distributing the vacuum condenser for infants. My question is, should you expect more or less a similar distribution with the final installment next spring? And does this interim dividend distribution have an implication structurally on your future dividend policy? And the second question relates to slide 34, in which you show that new building orders are continuing to be under control, but there has been some pick-up, no? because there are now 100 Vestas MR and LR1 which have been ordered this year to date, which is something which we have not seen after 2015 for several years. So that's pretty natural because the market is very healthy. Just to have your feeling, we clearly say that these deliveries will not come before 2026 or 2027. And so I would ensure that for at least another two, three years, the fleet growth is well under control. Do you expect for the pickup and growth of renewable energy or there is maybe a cap also in terms of shipbuilding capacity that prevents this evolution? Thanks.

I pick up a second one, maybe. so yes I mean the delivery forecast is more than manageable and most of these ships will come out in 2025 and I can tell you that today delivery on an MR from let's say an historical shipyard is not going to happen before end of 2026 and we start talking early 2027 so if you see the project done few of them are still on traditional ships some of them are on new dual fuel ships which are dictated premiums up to $9 to $10 million on the price of the conventional MR. So we are talking already of ships costing $51 million, and which are entering in already programmed trades with main charters around the world. This is not going to affect too much the existing market the way it is. And still there, We are talking about beginning 2026. So I would say the 24 months in front of us, starting from today, are more than controlled. And anyhow, after that, things are looking, let's say, in a positive way due to lack of supply.

Yeah, I'd like to just add to what Paolo just mentioned, that It's also an important consideration that we have already almost 10% of the fleet, which is more than 20 years old. And as Paolo was mentioning, a lot of these vessels are going to be turning 25 years old very soon. Starting from 22, as we show here in this graph, There's quite a steep increase every year almost in the number of vessels that would have been within those years. And these are all vessels which are eventually going to become 25-year-olds in a few years' time. So the 22 vessels in 2027 and so forth. And this is really a demolition wall that the market is going to be benefiting. I mean, if you look at the vessels, the millions of deadweight tons that were delivered in 23 and 24, and you compare them to the fleet size today, it represents potential demolitions of 3.8% around in 2008 and 5.8% in 2029. Now, since 2011, we never had deliveries in none of these years which were higher than 5.8%. I mean, the peak here maybe was 6% in 2016 or 5.5%, I cannot see exactly here. But I mean, it's... So, and since then, yard capacity for construction of most vessels, in particular product tankers, has decreased substantially because yards lost money during many years. And they are facing a lot of inflationary pressures in the And the labor costs as well as higher costs for steel, and so it is very unlikely that we're going to be seeing a big ramp up in production capacity. for product anchors and therefore deliveries, even if the yards were inundated with orders, annual deliveries are likely to exceed these numbers. So, and we see here in 25, that despite the 100 vessels that were ordered today, the annual deliveries are just above 2% of the fleet. So here we are assuming a 0.7% fleet growth because of natural scrapping, which is below 2%, because we have had very little scrapping over the last few years, and the fleet is aging very fast. This is not driven by a bad market. This is driven by vessels reaching 25 years of age. They're just becoming too old to continue trading. It's very, very difficult to trade vessels after 25 years of age. So that should be very supportive for the market going forward. On the dividend front, the interim dividend that we are distributing now, of course, is a reflection of the very strong markets and more will come most likely next year. And if the markets continue being as strong The expectation is that next year we should be distributing more dividends than we distributed this year. That much we can say. We don't provide, we don't have an explicit dividend policy, but what we have said, we try to be consistent here, is that as our leverage ratios fall, we will be distributing a higher percentage of our profits as dividends. This year we had the final dividend of 22 million out of the 2022 results, plus this interim dividend of 20 million. Next year, hopefully, we can do better than that in terms of cash distributions.

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

Yes, good afternoon. Thanks for taking my question. I have two first questions on spot rate, and I would appreciate if you can comment both on current trading and more on a longer-term basis. So two sub-questions, basically. How the market is evolving on the spot rates, because this is the first winter season with the embargo, and some peers have even disclosed a higher spot rate looking in Q4 versus Q3. So any comments there? the latest weeks, despite you provided some visibility on the slide that would be appreciated. And on the more longer term, looking at this year, what do you think would be the lowest level of spot rate below, which is very unlikely to end up from your standpoint? So I'm asking basically your worst case scenario here. And the second question is regarding the other direct operating costs. What was the driver of the decrease in Q3 and what would be a good proxy for Q4? The level of Q3 or the level seen in Q4 last year? Thank you.

Thanks, Daniele, for the questions. Some of them, I must say, are quite difficult to answer, but we will try.

We are here for difficult questions.

So on the spot rates, I think I'll go back to the slide where we give a preview here of what's happening on the market. So we are almost at 30,000 on the fixtures so far for for the spot days in this quarter. Our expectation here is that we should be able to do at least as well as we have done so far in the remainder of the quarter. That's because usually we have this improvement in the second half of Q4. And what we usually see is that the crude vessels start running around mid-October and then the product anchors around one month later, right? It's the time which is required for this crude to be transported to the refineries and then for it to be refined and transported by us. So it's not a coincidence that there is this lag of around one month. We saw this year also a very important rally on the crude tankers, especially on Afra Maxis and Swiss Maxis, but also the LCCs to a certain extent. So that's promising. It is an indication that there was quite a lot of crude oil moving. And... It also supports what we have been seeing in terms of crude oil price, where there has been some weakness recently, which probably reflects a much more balanced market than what was anticipated in the beginning of the quarter. there was this expectation that the market was going to be in deficit. But instead, there is quite a big level of non-compliance by OPEC in terms of cuts, which had been agreed to. Iran has also increased its exports this year. And more recently, there has been this agreement to allow Venezuela to export temporarily its crude without sanctions, which is not probably going to have a big impact in the market, but nonetheless, it's also one factor at play. And therefore, we are quite positive that we are going to be seeing a ramp up in refining throughputs in the second half of November and December, refineries are still terminating their maintenance programs now. So we have actually witnessed over the last week a strengthening of the market in the Atlantic, but it was mostly driven by the bad weather that we have experienced over the last few days, both in Europe and in the U.S., and to a certain extent also the Panama Canal restrictions which is going to become are going to become much worse in the coming months but they are already playing into the psychology in the market into the sentiment let's say so you know when people fixing vessels in the West today they are They have this anticipation that the market is going to become tighter also because of these restrictions in transit on the Panama Canal. And so when they fix, you know, owners are firmer in their negotiations and they're able to secure higher rates. So all of that is already contributing to a strong market. And what is missing is the increase in refining tool puts, but that is going to arrive. And when that arrives, the market is going to strengthen even more, especially in Asia, where it has been a bit weak over the last few weeks. But hopefully we are close to a bottom there. And the tougher question you had is the one relating to our worst-case scenario for next year. Unfortunately, we cannot be of much help because our markets – very difficult to predict with precision. We can analyze trends, try to forecast trends, which of course also depend on certain assumptions about what is going to happen in the future. But we think that if the geopolitical situation continues being like it is today. Plus, we avoid a deep recession, which I would say is the base case today, especially in the U.S. European economy is a bit less dynamic and it's showing some more worrying signs of weakness than the U.S. one. But if we are able to avoid that scenario, then oil consumption should continue increasing next year. And so we'll refine in throughputs and then we'll further support the market because of the very low deliveries that we are pretty sure are going to happen next year. So we are quite positive about 2024 currently. And finally, in terms of the other direct operating costs, I'm trying to go back to the slide where we have, wait, let's see here. So yeah, for the nine months of the year, the average was of 7,150 relative to 7,800 for the first six months. So we do expect that in the Q4, we are going to be seeing a rate which is probably going to allow us to reduce this average value for the year slightly. So the average value for the full year 23, we don't expect it to be higher than the 7,450. Potentially it should actually be slightly lower than that. There's also an element where we do concentrate purchases spare parts in the first part of the year and that also explains why these costs tend to be a bit higher in the beginning of the year and then they tend to fall during the rest of the year.

Thank you.

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

Good afternoon. Thank you for the very interesting presentation. I have two questions. One is a clarification on the dividend policy. I understand there is not an explicit policy on shareholder remuneration. But if I got correctly from your press release, your intention is to increase remuneration over the next few years. So I was wondering if this intention is relative to earnings or on an absolute basis. and if it is including buyback or not. The second question is more a strategic one. You are in a privileged position where you can wait to order a new vessel to substitute older ones that you mentioned before, you have a 10% of fleet, which is 20% years old. So at which point in time do you believe you will need to order new vessel to substitute the old one or to maybe to increase the flip?

Thank you.

Thanks, Massimo. Good questions. So the first one. I'll try to answer the first one in terms of the dividends and the buybacks. You're correct in stating that, yes, we don't have an explicit dividend policy. And what we have said is that we will be distributing an increasing proportion of our profits as we deliver a job balance sheet. So, of course, if our results for some reason, next year were to be, which we don't anticipate now, were to be much weaker than they were this year, the absolute dividends number for the dividends distributed might actually end up being lower than this year. But they could potentially still represent a higher proportion of the profits that we would be generating next year. So that was the message that we that we wanted to give to the market. Given our expected developments for the market next year, I think there's a good chance that the absolute number of dividends distributed next year could end up being higher than that which we distributed in 2022. And that is including, let's say, the buybacks. So the buybacks, we... We momentarily stopped now. We have room to do much more. The authorization that we have would allow us to purchase up to 15% of the shares issued, including the shares already repurchased. The reason we stopped is not because we don't think the shares represent good value anymore. We think they are very attractively priced still. but because we don't want to overdo it and then negatively affect the liquidity of our shares since we already have a controlling shareholder which has a very significant participation in the company.

Going to replacement strategy of the fleet with a possible new building program, when the market is strong, is the most difficult thing to figure out. Of course, we are opportunistic in the sense that if a deal is there, we look at it, and I can tell you we are looking at a lot of things every day, but due to the values where they are today, is not really feasible for us to do anything. If not to keep going with the politics and the strategy, we always say it. So deleveraging and distributing dividends. What I can say that normally yards, they start worrying 24 months before an expected lack of new orders in the sense if they are let's assume as reality is that the shipyards today they are delivering on something older today they are going to deliver it in end of 2026 beginning 2027 then the moment where the yachts will start thinking of their future orders will be second half of 2024. So I would say on this very stupid calculation, which is not, but I think certainly in 2024 we'll be softly looking at what's going on. But from there to take a final concrete decision to build a ship, this is something which is going to take even more time. I hope it does answer your question.

Thank you. Thank you very much.

The next question is from Climant Mullins of Value Investors Edge. Please go ahead.

Good morning. Thank you for taking my questions. I wanted to start by asking about asset valuations. You've made the point that asset values are sitting well below previous peaks despite its strong market environment. But what do you think are the main reasons behind this? And secondly, do you expect the spread in valuations between modern and older tankers to continue to widen? Thank you.

I would say the basic dynamics, you know it better than me. It's a matter of supply and demand. So probably the demand is not as strong yet as it was in the past. Certainly what is aggravating the market today, the sale and purchase market today, against the past, in the past you didn't have any sort of technological challenges in front of you. The emissions were not a problem. We were not going to enter in a phase where you were going to pay your emissions in Europe. I mean, it was a different world. Today the world is more complicated, and this probably is reflecting in a way also on the value of older ships. So it goes everything down to supply and demand. Certainly if you look at the future and the way things are with the supply of new ship restrained where it is, and the demolition element, which is kicking in with more and more strength every year, which is passing due to the fact that we say what we said before, the bulk of the product carrier fleet is being built in the first two, 10 years of this millennium. You see that, I mean, the element of demand and supply is getting tighter and tighter, and this should be reflected in the value at a certain point, in more value at a certain point, because we already have a lot of value there.

Yeah, makes sense. And I had another question about the Panama Canal. I know it's not a huge transit point for tankers, and as I understand it, the EMRs can also use the old Panama locks, which have not seen that much congestion, but I was wondering whether you've seen any effects from this on the overall market?

No, I mean, the effects of the Panama Canal on emers, we saw them because a lot of emers have been queuing, waiting to pass through the Panama Canal because they restricted the number of ships allowed to pass through. A lot of supply of tankers has been idle, waiting to pass through the canal. So you have it, in a way, in an hour. And it's affecting AMAs in the same way it's affecting many other ships. Of course, the trade of clean products from the U.S. Gulf to the Far East is limited to NAFTA, is limited to fuel, commodities. It's not a main route, let's put it this way, of clean petroleum products. That is affecting anyhow. And there is another element that is not very much seen in the market are the Jones Act ships because a lot of supply to all the west coast of the United States is coming out of Texas and Louisiana with American flagships. Now, these are going to stop which means that California has to supply, California, Oregon, and Washington has to supply their own needs from Korea, Japan, and China. And you can realize the ton mile is going to sky up there. So the Panama Canal can be something which can play quite heavily on the market, at least on the west of Suez Mountains.

Thanks for the call, that's really interesting. That's all from me. Thank you for taking my questions and congratulations for the quarter.

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 1 on your telephone. For any further questions, please press Q&A on the left bar and raise your hand or press stall one on your telephone.

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

Okay, so at this point, thank you very much for being with us. I hope we satisfied all your questions. your questions and uh let's see at the next quarter thank you bye bye thank you