Okeanis Eco Tankers(ECO) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved a fleet-wide TCE of over $45,000 per vessel per day, with adjusted EBITDA of $44.2 million, adjusted net profit of $20.4 million, and adjusted EPS of $0.63 for Q4 2023 [3][4] - For the fiscal year 2023, TCE revenue reached almost $300 million, a 54% increase from 2022, with EBITDA of $242 million and net profit of $145 million, both reflecting a 72% year-on-year increase [6][4] Business Line Data and Key Metrics Changes - In Q4, VLCCs generated $45,200 per day in the spot market, outperforming peers by 4%, while Suezmaxes generated $51,800 per spot day, outperforming peers by 17% [16][4] - The entire fleet is now positioned in the spot market, with significant improvements in operational efficiency noted, particularly with the upgraded paint specification on vessels [14][15] Market Data and Key Metrics Changes - The company reported a 50% increase in trading volumes since dual listing on the New York Stock Exchange, with 40% of total volume traded out of New York within 2.5 months [5] - The Red Sea tensions have created opportunities for VLCCs, with changes in crude movement patterns benefiting the fleet [20][25] Company Strategy and Development Direction - The company continues to focus on positioning its fleet predominantly in the West and taking advantage of market conditions to fix longer voyages to the East [14] - The management is optimistic about improving capital structure through refinancing and is actively seeking opportunities to optimize debt costs [12][11] Management Comments on Operating Environment and Future Outlook - Management expressed confidence that OPEC+ will eventually need to bring more barrels back to the market, which could lead to a significant increase in tanker demand [24][21] - The company anticipates a bullish market environment due to limited new vessel deliveries expected until 2027, with a significant portion of the fleet aging [29][30] Other Important Information - The company declared a capital distribution of $0.66 per share, representing 100% of reported EPS, continuing its commitment to shareholder value [4] - The company has successfully executed transactions to improve its capital structure, reducing debt costs and increasing flexibility [11][12] Q&A Session Summary Question: Impact of IFRS 16 on TCE equivalents - Management acknowledged that the impact varies quarter-on-quarter and depends on vessel positioning, with no significant impact expected for Q1 [31] Question: Relative VLCC market performance - Management indicated that VLCCs may see continued parceling of cargoes due to Red Sea tensions, but the extent of this is uncertain [33] Question: Preference for fleet expansion - If forced to expand, management would prefer VLCCs over Suezmaxes, anticipating a stronger market for VLCCs in the coming years [34] Question: Crude tanker activity and Red Sea situation - Management noted that Russian crude remains a significant portion of Suez transits, and they do not expect this to change unless extreme circumstances arise [36]