d'Amico International Shipping S.A.

This is the conference operator. Welcome and thank you for joining the D'Amico International Shipping First Quarter 2026 results web call. All participants are on listen-only mode and after the presentation, there will be a Q&A session. At this time, I would like to turn the conference over to Mr. Federico Rosen, CFO. Please go ahead, sir.

Hello, good afternoon, everybody, and welcome to our earnings call. So, jumping into the book, July 7th, next week of our week, at the end of March 26th, we had 29 vessels on the water, of which 27 owned and 2 were chartered. We actually, as you know, sold one of the ships and we delivered her to her buyers on the 24th of April, so now the ships on the water are 28. On top of that, we have 10 vessels under construction, four of which we expected to deliver in 2027, four MRs we expected to deliver in 2029, and two HENDIs we expected to deliver in 2029 as well. Every sheet of our fleet at the end of the period was 9.8 years, 93% of the fleet was eco-designed at the period end, now the percentage grows to 96% after the stage. of the high time. And putting the next slide on the back, we kept on executing our strategy of gradually repaying some of our most expensive debt and refinancing a portion of debt with a new facility at a much lower cost of debt. So we have been doing that since June 1, 2016. We returned, as you can see, we paid for $32.2 million in full vessels. We drew down the root facilities for $42 million in free ships. I consider the lower margin over the US dollar to suffer. On top of that, our strategy was also based on reusing or remediating our debt maturing in 2027, which is also a year in which we look at the delivery, as I mentioned before, of four of one vessels. So now, as you can see, we're expecting to be active again on the financing front in the remainder part of 2056, and we're waiting to get to 2077 with no debt to mature. Also, looking now on the right-hand side, you can see, as always, our daily bank loan repayment on our own pedestals, which was historically, in 2019, at $6,150 a day, and it's now $2,0049 a day. Here in 2019, we provided the usual estimated experience for the second quarter of the year, which has been so far much stronger than what we achieved first quarter of 2006. As you can see, we have already fixed 21% of our days at $59,733 a day on the spot market. At the same time, we cover 60% of our total pay at $23,560 a day. So overall, as we speak, we're talking about 81% of our total pay in Q2 2016, fixed at a blended average GDP of over $33,000 a day. So we're expecting an extremely profitable quarter at the end of June. Next slide. Accumulative evolution. So, based on considering also the vessels that we recently sold, we expect to have right now an average fleet of 28.3 vessels in 2026, rising in the expected delivery of our 10 yearly vessels to 24.7 by 2029. On the right, you see also our potential side burdens, our sensitivity to the spot market, the spot rate. So, as we speak, for every $1,000 a day of higher spot rates, that would translate to $3 million more on our bottom line. And of course, we see the increases for 27 and 28. our coverage is lower, as we speak, for those years. And right now, we have an activity of approximately $8 million for 2017 and $11 million for 2018. On the bottom of the slide, an interesting graph on the left. So, based on everything that we have fixed so far, both in terms of time charge and spot market, We, in assuming to run the rest of the year at a break-even level, we would make a net result at the end of the year of almost $83 million. And the same goes for the legal fee of already fixed, $27, and the figure would be $16.5 million already. Then on the right, we also show a sensitivity compared to this figure that I just mentioned. Should we run the remaining three days of 2016 at an average of $20,000 a day, then our net result for the year would be of almost $98 million. Should we run it at $22.5 million a day, the net result would rise to $105 million. Should we make $25,000 a day on the remaining three days of the year, then our net result would be even higher, $212.5 million. On the cost front, it's always not particularly meaningful to look at the OPEX costs on a quarterly basis. Anyway, we saw a slight increase in 2026 relative to the same period of last year. So, we have daily objects on our fleet of $8,600 a day. The reasons for this small increase are relatively dual. The same quarter of 25 was driven mostly by some higher accruing expenses and insurance costs. We actually had a total cost of $5.3 million in the first quarter of the year, compared to $6 million in 2025, so it might increase to approximately $700,000. Again, here is the increase, as we've mentioned, this is a many times increase that you can see relative to the previous years. It's obviously due to the higher personnel compensation, which is I actually meet the strong financial requirements that have been achieved in recent years. Net financial position. So, very strong net financial position at the end of the quarter. We had cash, cash equivalent of 189.6 billion dollars. Net financial position of 25.8 million dollars, excluding some small theft, serializing from the application of IRS 15. Our net financial position was of 23.8 million dollars. And that compares to a fleet market value of $1.2 billion. So the ratio between our net financial position and our fleet market value at the end of March 2016 was only 2%. And I'd like to remind you that this ratio was almost 73% at the end of 2019, when we started executing our deliberation plan over the last years. On the inflation side, we generated in the first three months of the year a net profit of $27.5 million, compared to $18.9 million in the same quarter of the previous year. Very strongly deducted almost $41 million, which entails a EBITDA margin of 50.5%. Excluding some small non-reported items, we achieved an adjusted net profit of $26.8 million in the first quarter of the year, compared to $19.2 million in 2025. key operating managers. We achieved a daily start rate of $32,164,000 a day in the first quarter of the year. this year is actually 90% higher than the last quarter of 2025, which was already the best quarter of 2025, and 53% higher than the first quarter of 2025. At the same time, we covered 62.2% of our total days of the first three months of the year, we have reached $23,000 a day. So our total plan as ABC was $26,500 a day for the first quarter of the year. And then back to Dr. Argos. So Dr. Lowe. So as usual, we now continue with our CAPEX commitment, which in relation to our investment plan comprising 10 vessels amounts to around $512 million, and with outstanding commitments of around $437 million. Most of these ultimates are planned for 27 and 29 coinciding with the deliveries of the vessels. In 27 we will be receiving four LR1s and then in 29 two LR1s and four MR2s. All ordered at first class Chinese shipyards. In relation to the options on the reefs vessels, well, the recent movement in port interest rates makes it less likely that these options will be exercised this year. Both of them can be exercised at any point in time with three months notice. We continue monitoring the situation and when a window opens up for us to exercise them, generating value for the company, we will do so. Here we show and set the difference between the market value and the exercise price and the exercise date of the options we exercised on the six vessels which were previously time charted in. And we also show today the difference or at the end of March the difference between the market value and the book value which is even higher than this difference was at the time of exercise. So far, the exercise of these options has generated substantial value for the company. In terms of contract coverage, we now have a 55% coverage for 2056, and an average rate of 23,400, a slightly higher rate of 33,500 for 2057, with, however, a much lower coverage of 23%. The fleet is increasing the echo, as mentioned by Federico, we only have one non-echo vessel in our fleet, which we plan to sell by the end of the year. In terms of freightways, well, as already highlighted by Federico, the pictures in Q2 have been extremely strong, reflecting the very strong spot market. As seen from the graph on the left-hand side of the yellow line, which depicts MR spot green earnings, which is at record levels, and of course also the short MTCs or the MTCs have reached record level. Data values have moved also up, older vessels by a higher percentage, new buildings not that much, but there was also an uptick in new building prices. And here, well, this is the major contributor to these exceptional markets, but of course this is The Iran conflict is being layered upon other geopolitical factors which were already supporting the market as well as strong and aligned on the metrics of the sector. So it adds more fuel to this rally and you see refining margins which are at very high levels, especially for certain products like the jet fuel and diesel. and creating arbitrage opportunities that are not always open on all roads, they open and close, but they are there. This is creating quite a lot of volatility also on rates, on spot rates in different regions. As the conflict started, we saw a very strong market, West of Suez and Weper, much weaker market, but east of Suez things better than moved west today. There's not that much difference between diametries that can be achieved in both basins. The disruption because of the war is very significant. There were around 20 million miles per day transiting the straight last year on average of oil, crude and refined products. And the beginning of the fiscal month of this year, the figure was even slightly higher, around 21. During the cold period, there were moments where there was quite a lot of volatility in the amount of oil that transited. There were some brief moments where more vessels were able to transit, but on average, just under 2 million miles per day were able to transit through Hormuz during the period. And 4 million miles per day were redirected with pipelines Yangbo or to Fujairah or Shekhan, therefore creating a net disruption of around 40 million barrels per day of lost flows. This was then compensated by the, partly by releases by DIA of the announced release of 100 million barrels. which, however, is being injected into the market at a rhythm of around 2 million barrels per day. And also by a drop in demand, of course, which is starting to become quite pronounced and is linked both to the high prices affecting demand for the more, for the products where there is a bit more elasticity, price elasticity of demand, generally they are quite inelastic, but also measures taken by certain governments And of course the delta is being met through reduction in stocks, which were quite abundant in particular in some countries before the conflict started. This, as you will see later, has helped the market so far, but it is dangerous, and as these stocks start reaching critical levels, There is a risk that oil prices could rise much faster than what we have seen so far and that economic activity could be much more severely impacted than what we have seen so far. So I'd like to highlight that from our perspective the reopening of the strait would be a positive because we are more concerned about the closure of the strait for too long because of the negative associated economic consequences. but the reopening instead should create some pent-up demand for our vessels, at least in the beginning, to rebuild stocks which were depleted during the conflict at a very rapid pace. Well, these are factors which have supported the market throughout last year and which explain the strengthening market that we saw before the conflict started. So there was a lot of oil being pushed into the market, but also a lot of inefficiencies because of the tougher sanctions that were being imposed on vessels trading Russian and Iranian and Venezuelan barrels. And therefore we saw this sharp increase in sanctioned oil and water last year. and a huge increase in the number of pencils suction, which reached over 1,000 pencils, representing 19% of the overall time-per-feet in bandwidth terms. We are now starting to see this unwinding, so we see that sanctioned oil on water has been falling, also because there were temporary waivers provided for this sanctioned oil to be discharged because of the war in Iran. So initially these waivers were provided to Russian oil, but then also to Iranian oil. And the Red Sea disruptions was very supportive in the first nine months of 1934, as mentioned. This became actually a headwind for the market afterwards because the higher costs of the longer rules through Cape of Good Hope meant that products were traded more regionally and ton miles actually declined thereafter because of this disruption. Venezuela, this is a positive for the market, this oil used to be transported on sanctioned vessels, so now it is being transported on compliant vessels, it is very beneficial in particular for the upper max sector, which are the most suited type of vessels to transport these out of Venezuela, but indirectly benefits also the product tankers transporting CPP through the well-known transmission mechanism that we will see later, whereby we have seen a lot of the LR2s transiting into dirty trails. And here this is the forecast that we, by the US Energy Information Administration of the production of Venezuela for 36.1 million miles per day. Actually, I've seen a report recently where it indicates that their production has already reached 1.2 million miles per day. The returning to the production levels of the late 1990s will take time most likely, but this initial ramp up was faster than anticipated. Russia's refined product exports continue declining, although staying at quite high levels, both as a result of the types of sanctions that were imposed, a larger number of sanctioned vessels, but also as a result of the attacks by the Ukrainians with drones, to export facilities, Russian export facilities. So it creates usually not very significant damage, but it does hamper their ability to export products. And we have seen these attacks occurring on a quite frequent basis, and it's creating a further obstacle to Russian export. Here, well, these are the estimates of the EIA in terms of demand and throughputs, refinery throughputs, sharp drop in demand as could be expected. in Q2 and a very sharp drop in refining volumes in particular in April. We will recover thereafter. Of course, it's very difficult to make such forecasts in this environment. A lot will depend on how the conflict with Iran evolves in the coming weeks. Also, in terms of oil supply, very useful to make forecasts. I mean, this was a market which was very well supplied. It was expected to move into contango during the course of this year, and now we are faced with the opposite situation with a very undersupplied market, as just mentioned. Inventories were at good levels before the war started, and we already see this drawdown here in Europe. And here we see this previously mentioned transmission mechanism between the dirt and clean markets an increasing number of LR2s trading dirty as depicted by the yellow line on the graph on the left and the rapidly declining number of LR2s trading clean, despite the quite fast of LR tools last year and in the beginning of this year. And this is because, of course, of the very strong markets, the dirty markets, the Afromax rates, which are still at very high levels. In terms of refinery landscape, there's not much new here. There were important closures of refineries in the Americas and in Europe over the last few years and with new refinery capacity coming online in China. So this increase in ton miles as Europe and the Americas have to import more from these more distant locations. The fleet on the supply side continues aging rapidly and the order book on the MR and LR1 sectors, which are those we operate in after peaking at the end of 24, has started declining. despite there being orders continuing to come in, But at a lower rate, and at a lower rate relative to the delivery of new vessels. So, at the end of March, this was about to decline to 13.5%, relative to almost 21% of this fleet, which it has already more than 20 years of age. So, important to note that by the end of 27, the fourth portion of the fleet, which is more than 20 years of age will have risen to almost 25%. So, a very sharp increase, which holds well for the market also next year. This is not surprising, this percentage which is rising of the fleet which is crossing the 20-year threshold, because it is aligned with the graph at the bottom where we show the vessels reaching 25 years of age. So the vessels which will reach 20 years of age in 2027 are those that will be reaching 25 years of age in 2032. And we see here by the graph that this represents 7.7% of the fleet around 10 million dead weight. So a very big number. portion of the fleet reaching 20 years of age already next year and starting to trade in more marginal trades. The picture is not as favorable if we look at across all bankers, including also crude bankers, because there has been quite a lot of orders coming in for crude bankers over the last few months. So here the order book rose to 20%. is now pretty much aligned with the portion of the trees which have more than 20 years of age. We can have a strong product tanker market even without a strong crude tanker market, but the opposite is not true. I mean, a strong crude tanker market will eventually generate a strong product tanker market. That is because the crude tanker market is much bigger than the product market as you see here looking at the left hand axis when we include also the crude time grace that the fleet size is much, much bigger than if we look only at the product market. We look here at the deliveries which have been accelerated. The positive thing to highlight here is that most of the deliveries that the quarter with the largest number of vessels to be delivered was Q1 and that is already behind us and we are still in an extremely strong market despite this huge number, quite large number of vessels I would say delivered in Q1. And if you instead look at deliveries in the coming quarter they actually come to the similar from what we saw in the last two quarters of the last year. In particular, if you look at Q4 26, there are 75 factors being delivered relative to 71 in Q4 25. So very, very similar number of factors. And here you look at the battles that were ordered in the first four months of this year, 28. which analyzes, puts it pretty much on par with just over 80 vessels ordered in 2025, which is quite a low number compared to the over 200 vessels ordered in 2025 and over 150 in 2023. And also and especially relative to the over 200 vessels, for example, ordered in 2013 when the fleet was much smaller. So these 225 vessels ordered in 2013 represented a much bigger portion of the fleet than, for example, the 200 vessels ordered in 2014. And the fleet growth is accelerating, but as I mentioned, the sub-20 fleet growth, even in 26 across all factors, is actually less than 1%. So this is supported for the market this year and will be supported also next year, because next year there are even more vessels turning 20 years of age. Our NAV has been rising. NAV per share at the end of March was around $10. And our discount at the end of the quarter was of 14%. And today it's even lower than that. So below 10%. Of course, this is relative to the 31st of March NAB, but this is a moving target. We know, for example, that some of our vessels that were valued at the 31st of March at a certain level today would be valued more because there were some transactions that happened afterwards for vessels which are very similar at higher levels than the valuations we received. Not much higher, but still higher. And of course we also generated a lot of cash in April this year. And finally here in terms of our payout ratio, it has been rising throughout the last few years in quite a regular fashion with the 55% payout ratio out of the 2025 net results. which is the highest payout ratio we have had and of course the balance sheet also which strengthened significantly as previously mentioned by Federico. So that's it and we pass it over to the Q&A. Thank you.

Thank you. 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. When announced, please click Continue on the pop-up window. If you are connected in audio only, please press star and 1 on your telephone. The first question is from Massimo Bonisoli of Equita. Please go ahead.

Hello, Carlos and Federico. I have two questions. One on the Strait of Hormuz reopening. Could you elaborate on the minimum safety and operational conditions required for the NICU to resume transit through the Strait of Hormuz, in the sense that there are plenty of situations to be cleared and we still don't know when.

the space will open for commercial traffic.

The second question is on the spot rate evolution, referring to your slide 9 of the presentation. Spot fixtures in April were running close to $60,000 per day.

Could you provide some color on the trends seen so far in May and on the current environment? from the latest contract concluded or under negotiation, do you expect the average realized pot rate in Q2 to remain around these levels, improve further, maybe normalize some water versus after it peaks? Thank you.

Thank you Massimo, two good questions. In terms of the transit through Hormuz, we are not going to be the first one venturing in that. I mean, we have to make sure that our main priority will be the safety of our crew. So an assessment will have to be made that the passage is safe. And of course, we will need to be able to ensure the risk, which will be reimbursed by the Charter. But there are situations like this also, exclusions to the policy, which can mean that you are still exposed to quite a lot of risks. So we will assess this very carefully and there's also the risk of mines still, so there has been some demining happening. But we don't know to what extent this has progressed and is near to completion. So we will take a prudent approach in that respect. try to employ our vessels in other regions initially. One port which we could consider calling initially could be the port of Dukun, which is closed but outside the strait of Ponvus, for example. which is also where there's also an important refinery which exports significant amounts, so that could be something we could consider, but we would be very prudent in that respect. In terms of the rates achieved, the almost 60,000 that we have shown for Q2 so far includes also some fixtures that run into May. The latest fixtures, I would say, are at slightly lower levels than that on average. But they are still at very good levels. I mean, today the spot market is still about 30,000 in both basins, in both east and west. There was more of a correction west recently, but I believe it is a temporary correction. This market in the US Gulf has always been very volatile. For example, the arbitrage for exporting NAFTA out of the U.S. Gulf closed momentarily a few weeks ago. It has, as we have shown in the presentation when we approved, our year-end results have risen to record highs. And thereafter it collapsed to levels which were lower than those we had before the conflict started and now it's starting to move up again. And Anaviz believes that it could in the coming weeks rise further and possibly return to those very high levels we saw because there's going to be an important need to import petrochemicals into Asia. it foremost doesn't open up in an important way soon. So very hard to forecast what will happen. Of course, if there is a reopening, then we expect a big surge in trade rates east of Suez. because we will be seeing more exports out of hormones, transiting hormones, but not only, I think also China will then of course be exporting much more. China, initially after the conflict started, stopped exports of refined products As a result, its stocks rose and are very abundant right now. And it recently declared that it will already, even without the hormones reopening, start exporting again in a more limited way to certain countries. It's more of a political move also to support some friendly countries which are suffering in this moment, but that in itself already should help the market in the North Asia region in the coming weeks. But with the reopening of HOMUS, then we should see a normalization of Chinese exports, so even bigger volumes coming to market, as well as, of course, a lot of volumes coming out of Bournemouth. Potentially, you know, if the reopening, if the passage of the strait is deemed safe by all, very large flows coming out of Bournemouth because tank storage in that area is full. So they have a very strong incentive to push out product very fast out of that region. And we don't have a lot of vessels there because we have all these vessels that move into the Atlantic basin. So we expect that basin to strengthen a lot. So again, this location, which on an end basis will be positive for the market. The market should come down in the U.S. gold, but net-net, I think it would be positive for the market. So it's positive, but it's very difficult to make forecasts in this moment. I think that's it in terms of answers.

If I may squeeze in another question, Carlos.

Just to understand how your fleet is positioned between east and west of Orbus right now.

We want to, it's very difficult to read and to make calls, so we are trying to keep quite a balanced allocation of the few vessels in the Americas. some trading West Africa and then a similar number in Asia trading out of Mostly Southeast Asia and the North Asia, out of Korea and out of Singapore. We have done some Australia runs recently. There was an increase in demand due to Australia of refined products. There was a fire in an important refinery in Australia, so there's also a seasonal uptick in demand now. before the winter season there, which was then also associated with an additional demand because of this fire in this refinery there. So, yeah. So, I mean, whatever happens, we should do quite well.

Very clear. Thank you very much.

The next question is from Clement Mullins, Value Investors Edge. Mr. Mullins, please go ahead. Your line is open. Please click continue. I think you are on mute. The next question is from Matteo Bonizzoni, Capital Chauffeur.

Thank you. Good afternoon. I have a quick question with regard to your capital allocation flexibility, let's say. So I would like to know if the current market environment, which is probably about what you had, what everybody had in mind in terms of rate and profitability and cash flow, could have an implication on dividend policy or buyback or also on the feasibility to further expand the fleet after the recent, I mean, decision which we have communicated on the new buildings. But, I mean, you have clearly more room to go potentially, so I would like to know what are your current thoughts as regards future capital allocation choices. Thanks.

Thank you, Matteo. I think that at this moment the very strong markets should not affect our policies in In this respect, we will, of course, look very carefully when we are closer to the end of the year, what could be the dividend policy out of the 26 results. If the market is as strong as it As it looks, it will be this year, then it is likely that we will be able to confirm a similar payout ratio that we had in 2025. Also, in terms of buyback, we will only do it very opportunistically if we see some very substantial unjustified weakness on the share price. And fleet-wise, we don't expect to make other investments at this stage. We are quite happy with the 10 vessels we have ordered. But if opportunities were to arise, more because of an unexpected correction, which creates an attractive entry point, then we might decides to take advantage of that. But with the 10 vessels we have ordered, today we have 28 vessels on the water. That represents quite a big percentage of our fleet, over $500 million in investments. So we don't feel we need to do more, but we will look at opportunities if they arise.

Thank you.

The next question is from Clement Mullins, Value Investors Edge.

Hi, good afternoon and thank you for taking my questions. Sorry for the technical problems before. Most have already been covered, but has the recent increase in asset prices changed your view on potentially exercising the purchase options on the high fidelity and the high discovery before than previously expected?

Yeah, the purchase options on the fidelity and discovery is the decision is more linked to the interest rate environment from our perspective because these are fixed rate financing transactions, which were done at the time where interest rates were very low. So of course the implicit margin in this deal is high relative to what we can achieve today, but the implicit swap rate is instead very low. So the only cost of financing on these deals is actually quite competitive still today. And we would need industries to move down more the forward industry curve to make the exercise of these options attractive. Otherwise, for us, it is probably more convenient to reimburse some floating rate debt that we have, which is costing us more than the facilities here. so that is our thinking today i mean of course we have the necessary liquidity to exercise these options but there are also other things we can do with the the liquidity that is potentially more attractive uh for us uh so we will uh we will only exercise them if we see this uh decreasing for the four grades Thank you for the question.

As a reminder, if you wish to ask a question, please click on the Q&A icon on the left side of your screen or press star 1 on your telephone. For any further questions, please click on the Q&A icon on the left side of your screen or press star 1 on your telephone. Gentlemen, there are no more questions registered at this time.

Thank you. Thank you everyone for participating in our call today and look forward to seeing you soon when we approve our Q2 results and good afternoon. Thank you. Thank you. Goodbye.

Ladies and gentlemen, thank you for joining the conference. It's now over. You may disconnect your devices. Thank you.