Financial Data and Key Metrics Changes - Adjusted EPS for Q3 2025 was $6.75 per share, compared to $6.50 per share in Q3 2024, reflecting a slight increase [9] - Adjusted net income decreased by $2.7 million to $124.1 million in Q3 2025 from $126.8 million in Q3 2024, primarily due to increased operating costs and decreased dividend income [10] - Adjusted EBITDA increased by 1.5% to $181.6 million in Q3 2025 from $178.9 million in Q3 2024 [13] Business Line Data and Key Metrics Changes - Vessel operating expenses increased by $2.4 million to $52.3 million in Q3 2025, attributed to a higher average number of vessels in the fleet [11] - Daily operating cost slightly increased to $6,927 per vessel per day in Q3 2025 from $6,860 in Q3 2024 [11] - Revenues from the container segment decreased by $4.3 million due to lower contracted charter rates [10] Market Data and Key Metrics Changes - Demand for mid-size and larger vessels remains strong, with new charters secured as far out as 2028 [5] - The charter market is robust, with the idle fleet at an all-time low [4] - Contracted charter backlog improved to $4.1 billion, with a 4.3-year average charter duration [13] Company Strategy and Development Direction - The company is selectively extending its new building program at below-market prices and has secured multi-year employment for new orders [5] - The company is also investing in the dry bulk cape-sized market segment, expecting outsized returns due to supply constraints [7] - A quarterly dividend increase to $0.90 per share was announced, consistent with the policy of yearly increases [7] Management's Comments on Operating Environment and Future Outlook - The ongoing war in Ukraine and the situation in the Middle East continue to impact operations, but trade tensions between the U.S. and China have eased, allowing trade to resume [4] - The company anticipates that conventional fuels will remain prevalent in the medium term despite long-term decarbonization goals [5] - Management expressed uncertainty about the strength of the market in 2026, noting that the opening of the canal will be a crucial factor [23] Other Important Information - The company completed a $500 million unsecured bond offering with a 6.85% coupon, enhancing its financial flexibility [6] - As of September 30, 2025, cash stood at $596 million, with total liquidity at $971 million [14] Q&A Session Questions and Answers Question: What is driving the strong demand for charters despite lower trade and tariffs? - Management noted that while tariffs have not changed overall production capacity, goods have been redirected, leading to increased demand for mid-sized ships outside traditional markets [22] Question: What triggered the investment in the Cape-sized vessel? - The company aims to grow its investment in the dry bulk market, which currently represents less than 5% of overall assets, and is focusing on selectively expanding in the second-hand market [25] Question: What is the outlook for the share repurchase program? - Management confirmed that the share buyback program continues, albeit at a smaller pace, as they believe the stock is undervalued [27]

Investment Rating - The report maintains a cautious outlook on container shipping, downgrading the sector due to structural headwinds and demand uncertainty beyond August [9][10]. Core Insights - The report highlights that US tariffs have limited direct impact on the bulk and tanker markets, while the Baltic Dry Index (BDI) increased by 2% week-on-week, driven by higher Panamax earnings [9][10]. - The report suggests a buy rating for Maersk, a hold for SITC, and a reduction for several other companies in the container shipping sector, indicating a selective investment approach [9][10]. Summary by Sections US Tariff Updates - The Trump administration delayed the 10% baseline tariff and set various tariffs for key trading partners, with significant implications for trade dynamics [2]. - Tariffs on copper and other commodities are set to take effect, which may influence demand in the bulk market [4][53]. Container Shipping Trends - The Shanghai Containerized Freight Index (SCFI) dropped 1.7% week-on-week, marking the fifth consecutive week of decline, although rates to the US showed some recovery [33][34]. - The report notes that while front-loading may temporarily boost cargo flows, significant demand uncertainty looms due to potential tariff impacts [3][9]. Baltic Dry Index and Dry Bulk Market - The BDI rose 2% week-on-week, with Panamax rates increasing by 14% due to strong demand in the Atlantic basin, while Capesize rates fell by 12% due to weak iron ore demand [52][58]. - The report anticipates a 3% growth in the dry bulk fleet but expects flattish demand, leading to a softening of freight rates in the coming years [58]. Freight Rates and Market Dynamics - Container shipping freight rates have shown variability, with the SCFI composite index reflecting a significant year-on-year decline of 43.3% [50]. - The report indicates that bunker prices and time charter rates are also trending, with specific rates for different vessel types being monitored closely [50][57].