Okeanis Eco Tankers(ECO) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company generated net revenue of $36 million, which is a 36% increase quarter-on-quarter [4] - Adjusted EBITDA reached $25 million, reflecting a 52% increase quarter-on-quarter [4] - Adjusted profit was reported at $8.5 million, or $0.26 per share [4] - Fleet-wide Time Charter Equivalent (TCE) for the quarter was $29,900, a 21% increase compared to the first quarter [5] - Total liquidity at the end of the second quarter was $72.4 million, which is 121% higher year-over-year [5][33] - The company reported a debt level of $763 million, with a leverage ratio of 65% [33] Business Line Data and Key Metrics Changes - VLCCs generated $18,600 per day in the spot market, outperforming peers by 2% [11] - Suezmaxes achieved $41,500 per spot day, outperforming peers by 80% [14] - In Q3, 60% of VLCC spot days were fixed at $31,900 per day, a 72% outperformance relative to peers [15] - 70% of Suezmax spot days were fixed at $60,400, a 109% outperformance relative to peers [15] Market Data and Key Metrics Changes - The company noted a shift in trade patterns due to the Russian invasion of Ukraine, with new trade routes emerging for VLCCs [12][20] - European crude imports are increasingly sourced from farther regions, replacing Russian crude [21] - The average crude tanker sailing distance has increased, positively impacting the company's trade [22] Company Strategy and Development Direction - The company aims to capture the current tanker cycle with a focus on maintaining a highly efficient fleet [39] - The strategy includes optimizing TCE and reducing ballast days while increasing spot exposure to capitalize on market spikes [19][39] - The company is considering a potential US listing in the medium term [55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the tanker market, anticipating increased US Gulf exports and higher rates in Q4 [47] - The company expects to benefit from the ongoing need to replace Russian crude in Europe [19] - Management highlighted the importance of maintaining liquidity due to market volatility and rising interest rates [54] Other Important Information - The company announced a cash dividend of $0.30 per share, totaling $10 million [5] - The fleet is now fully delivered, with a mix of long-term charters and spot trading [8] Q&A Session Summary Question: What levels would be acceptable for longer-dated charters? - Management indicated they would consider longer-term deals in the high 40s for VLCCs and comparable rates for Suezmaxes, noting current rates are undervalued [42][44] Question: Is there an appetite for further investment or selling ships? - Management stated it is more challenging to invest now due to high prices, but selling ships for profit to renew the fleet could make sense [44] Question: What is the outlook for US exports? - Management expects a busy period for US Gulf exports at the end of Q3 and early Q4, with potential for increased rates [47][48] Question: What are the expectations for cash balances going forward? - Management aims to increase liquidity to at least €70 million due to market volatility and rising interest rates [54] Question: Is there interest in pursuing a US listing? - Management has begun exploring the process for a potential US listing and will update investors accordingly [55]