l pany .(US:CLCO)2024-02-28 18:54Financial Data and Key Metrics Changes - Full year time and voyage charter revenues were $347 million, and total operating revenues were $379 million, with operating income for the quarter reaching $55.1 million, an improvement of 14% compared to the third quarter of 2023 [2][5] - The fourth quarter operating margin reached 57%, with vessel operating expenses coming in at $16,600 per day per vessel, which was approximately $2,000 better than the previous two quarters [3][4] - Reported net income for the fourth quarter was $22.4 million compared to $39.2 million in the third quarter, primarily due to a $23 million unrealized mark-to-market valuation swing on interest rate swaps [5][6] - Adjusted EBITDA for the fourth quarter was a record $34.2 million, excluding non-recurring gains [22] Business Line Data and Key Metrics Changes - Time and voyage charter revenues for the fourth quarter were $89.3 million, resulting in an average time charter equivalent rate of $87,300 per day across the fleet, a record level [15][39] - Total operating revenues for the fourth quarter were $97.1 million, including non-cash amortization of net intangible liabilities of $4.5 million [16] Market Data and Key Metrics Changes - The company expects many more retirements in the coming years, which will create additional demand for modern tonnage [11][13] - The shipping market is anticipated to improve as demand increases with longer shipping distances, particularly due to disruptions in the Panama Canal and Red Sea [41][85] Company Strategy and Development Direction - The company is focused on securing long-term charters for newbuilds, targeting opportunities that align with market demand [93] - The company is confident in fixing newbuild vessels before delivery, despite current market conditions [50][67] Management's Comments on Operating Environment and Future Outlook - Management noted that the warm winter has led to falling gas prices, impacting shipping rates, but they expect rates to bounce back as demand increases [60][34] - The company anticipates that lower gas prices will facilitate demand in key markets, particularly in Asia [67][44] Other Important Information - The Board approved a dividend payout of $0.41 per share, representing approximately a 64% payout of fourth quarter net income [7][26] - The company declared a cumulative $88 million in dividends for 2023, distributing slightly more than the free cash flow available to equity holders [8] Q&A Session Summary Question: Confirmation of charter rate for Husky - Management confirmed that the charter rate needs to be above $80,000 per day [73] Question: Impact of disruptions in the Panama and Suez Canal - Management indicated that charterers are becoming more aware of their cargo needs and may require additional ships due to rerouting [85] Question: Economics of upgrading vessels with ALS system - Management explained that the performance of the vessel will be benchmarked before and after upgrades, with benefits shared between the company and the charterer [90][99] Question: Newbuilds and long-term charters - Management stated that the newbuilds are targeted at the long-term market, with a focus on structured RFP processes [93] Question: Newbuild prices and returns - Management noted that newbuild prices have decreased slightly but remain elevated compared to previous years, with potential for a standoff in the market [112]