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 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, welcome to everybody. Good afternoon. Thank you for joining us on our call for the 2023 results. We go straight to the presentation. And I leave the floor to our CFO, Carlos Balaiz-Frenway, to start the job. Thank you, Carlos.

Thank you, Paolo, and good afternoon to everyone. As usual, we start with the slide here where we give a quick glance at our team composition, which is, as at the end of the year, was still composed of 36 vessels with BMRs representing the large majority of these vessels, 24, and then we co-presence in the other one and many side segments. As some of you that follow us closely probably saw, we announced the sale of a vessel recently, the Amanda Medley, at a very strong price and it was the oldest owned vessel in our fleet. 2010 built and we sold it for 27.4 million. So our fleet has changed slightly since then. We also, we delivered a vessel which was on time charter in, which was also a very old vessel which we had on time charter in. following a sale and time charter back deal many years ago. So we have an increasingly, I would say, modern fleet as we sell and deliver some of our older vessels. And going on to the following slide, we show our CapEx commitments as we the investments, the main investment last year was related to the exercise of the purchase option on the TCM vessel, the High Explorer, for around $29.8 million. We also had quite a lot of maintenance capex last year, around $12 million. This figure goes slightly down for the following two years, where it is pretty stable at around $9 million before it increases slightly in 2026. We don't have, as of today, other investments planned, but we will talk a bit more about that later. But there's a highlight that we will be exercising purchase options on other TC investors going forward. Here we show bank debt repayments. We have reimbursed at the end of last year a few of our more expensive loans, and therefore our annual repayments have fallen for the next two years. It's around $27 million. We don't have any values to refinance before 2026. Bank debt repayments have been falling quite fast on the right hand side as we have exercised some vessels which were previously bubble charted in and we have kept these debt free. And we were quite active in that respect last year. Going on to the following slide here we show And as you see from the table on the left, there were five of these options exercise last year. And so we now only have three options that can be exercised. One could have been exercised in March this year, but we decided not to do so and wait until next year. The next opportunity to exercise this option is in September 25. It's effectively a purchase obligation, and therefore we will be exercising the option at that date. The reason we did an exercise early is that the implicit cost of funds of this facility is very low, and it's better for us to keep it going. On the other two options, we plan to exercise them at the first opportunity, so the high discovery in September 24 and high fidelity in September 25. They are not particularly expensive deals, financing transactions, we were lucky to negotiate these transactions just before interest rates started moving up quite quite aggressively. So here we have the time chart that in vessels I was referring to previously on the left hand side those which were already exercised and on the right hand side those that we can still exercise and we are likely to be exercising two of these this year. and the remaining two next year. So I think they are all well in the money. And given the current market conditions and the outlook for the market, it makes sense for us to exercise them early. So that's the plan. Going on to the following slide, here we show our contract coverage. And it's slightly higher this year than it was last year. The average rates for these contracts throughout the year, it's pretty stable at around 28,000. dollars per day. And overall, we have 54% of our available vessel days of 24 kelp. Higher percentage coverage. There is some background noise. Somebody maybe left a microphone open. 40% falling to 23% in Q4, 24. And then next year, we only have 30% of our available days covered. At the bottom of the slide, we show the percentage of our fleet, which is Echo. And this also has been steadily rising and there's another step up this year with the percentage of the trees, which is rising from 78 to 84%. Also because of the sale of the . Here we show instead, we give some highlights of how we are performing in this first quarter of 2024. I'm glad to say that the performance has been, this shouldn't be surprising given the market has been very strong in our performance. Therefore also, we on the spot market, we achieved an average rate of over 38,000, 38,250. on the days already fixed, which represent 53% of the available days in the quarter. We have another 40% of our available days in the quarter which are fixed through time-chartered contracts at an average rate of 28,150, which gives us a blended rate of almost 34,000 for 94% of the available days in the quarter. We have a very good visibility of our earnings in the Q1 of this year, and it's looking very good and stronger than Q1 last year. So it's a very good start of the year for us. And going on to the following slide here, So we show some graphs which give an idea of what our results could look like this year and in the following two years. On the bottom left, we show the profits on the days which are already fixed, both type charters and spot, which means that if in the remaining three days we work to break even, our profits for the year 2024 would be of around 93 million already which is already a very strong result only after only two months and a half into the year but if we instead were to fix the remaining three days at an average rate of 25 000 per day our profit for the year would be of around 152 million dollars if we were to fix these remaining three days at $30,000 per day, on average, our profits for the year would be off $184 million. So it looks as though 2024 is also going to be a very strong year for us. And going on to the costs. from, as we have seen in our previous quarterly presentations, and as was widely expected, there was quite a sharp increase in costs this year. We are not the only sector who has experienced this inflationary pressure. I would say that the inflationary pressure was present pretty much across the board for all from major cost items, but it was particularly pronounced for crew costs, also because of a lower availability of Ukrainian crew. Also on our vessels, we have a number of Ukrainian officers in particular, and therefore, That was one of the factors which contributed to this increase in costs. But we also saw quite a big increase in insurance costs as we had to insure our vessels at higher levels to reflect the increase in their values over the last few years. On the G&A front, there was a sharp increase this year, which is linked mostly to the increase in variable compensation, reflecting the strong performance of the company in 2022 and even more so in 2023. And so it is linked to the long-term incentive plan and short-term compensation for targets which were reached. And of course this additional compensation would largely disappear if markets for some reason were to weaken. um going on to the uh to the following slide uh we show here our leverage situation which has improved remarkably um at the end of 19 the ratio between the net financial position and market value was at 73 percent at the end of last year uh end of 22 it was at 36 percent And at the end of 23, it had fallen to 18%. And so we have today a very strong balance sheet. Cash and cash equivalents at the end of the year were at 111 million. But since then, it has already increased quite a bit because of the very strong performance in the first quarter this year. And going on to the following page, we show here the key line items of the P&L. Q4 was not our strongest quarter, I would say, but still we managed to achieve a profit of almost $44 million. Trading was a bit weaker, especially in the first part of the quarter, but then I would say second half of November and December, as is usually the case, was quite strong. And thanks to this result in Q4, we were able to achieve an overall profit for the year of $192 million, which excluding non-recurring items is almost $187 million. Moving on to the following slide, we show here instead the daily results for our vessels employed on the spot market and on type charter contracts. We see that Q1 was the strongest quarter of the year, 36,650, which as I previously mentioned is lower than the average rate we have achieved so far on the spot market in Q1 this year. The remaining quarters, the results we achieved were pretty stable on the spot market, actually, despite quite a lot of volatility during the year at high levels, but we averaged almost the same in Q1 and Q2 and Q3, around 31,750. and then 31,000 in Q4 for a blend for an average for the year of 32,900 on the spot market, which coupled with our coverage at an average rate of 28,100 left or blended rates for the year of 31,450. And now I pass it over to Paolo for the market overview.