Earnings Call Transcript - ASC Q2 2022

Operator, Operator

Good morning, ladies and gentlemen and welcome to the Ardmore Shipping Second Quarter 2022 Earnings Conference Call. Today's call is being recorded and an audio webcast and presentation are available in the Investor Relations section of the company's website at ardmoreshipping.com At this time I will turn the call over to Anthony Gurnee, Chief Executive Officer of Ardmore Shipping.

Anthony Gurnee, CEO

Thank you. Good morning and welcome to Ardmore Shipping's second quarter 2022 earnings call. First let me ask Paul to describe the format for the call and discuss forward-looking statements.

Paul Tivnan, CFO

Thanks, Tony and welcome, everyone. Before we begin our conference call, I would like to direct all the participants to our website at ardmoreshipping.com, where you will find a link to this morning's second quarter 2022 earnings release and presentation. Tony and I will take about 15 minutes to go through the presentation and then open up the call to questions. Turning to Slide 2. Please allow me to remind you that our discussion today contains forward-looking statements. Actual results may differ materially from the results projected from those forward-looking statements. And additional information concerning factors that could cause the actual results to differ materially from those in the forward-looking statements is contained in the second quarter 2022 earnings release which is available on our website. And now I will turn the call back over to Tony.

Anthony Gurnee, CEO

Thanks, Paul. I'll discuss highlights, recent market developments and overall Ardmore performance, after which, Paul will provide an update on product and chemical tanker fundamentals and financials. And then I'll conclude the presentation and open up the call for questions. So turning to Slide 4. The product and chemical tanker markets are continuing along at historically high levels, with many factors now contributing to ongoing momentum which we will discuss later on. Our MRs earned $30,500 per day for the second quarter, up from $15,900 last quarter. They're earning $46,600 so far in the third quarter with 45% fixed and are averaging $55,300 for fixtures concluded over the last two weeks. Additionally, our chemical tankers are now approaching similar levels on a capital adjusted basis. Given our operating leverage and spot exposure, this has translated into record earnings of $29 million or $0.82 a share for the second quarter and an estimated $65 million or $1.75 per share for the third quarter if these rates are sustained. Asset prices are also rising as buyers are now factoring in the strong market to their value estimates. Most recently the sale of a 2016 built Korean MR at $34.5 million, up 25% from $27.5 million at the beginning of the year. But despite the much improved market conditions, given the very challenging business environment we've just come through, our priority continues to be rebuilding financial strength in order to then continue through our capital allocation priorities once our leverage targets are met. To this end, we've just completed the refinancing of virtually all of our debt with our core lending banks, repaying most of our higher cost-lease portfolio, reducing it from 14 down to just two ships and thereby significantly lowering our debt cost. And we've also engaged in limited usage of the ATM program over the past quarter to further build financial strength. Operationally, we're very proud that our ships, the Ardmore Cherokee and the Ardmore Encounter, have recently won the Seafarer's Charity Maritime Safety Week competition, a testament to their crews' proactive approach to safety and their dedication to seafaring professionalism. Moving to Slide 5, on the product and chemical tanker market outlook. The market is being influenced by many factors but above all, a now deeply rooted energy crisis impacting virtually all energy classes on a global basis, most notably in Europe. While concerns about global economic slowdown should temper expectations, there's nevertheless a growing consensus that the conditions causing the crisis and thus the strong product tanker market may continue for some time. High oil prices and volatility are reflecting in part the underinvestment in oil and gas exploration for many years. As a result of the Ukraine war, energy security is now an immediate priority globally which will take some time to resolve. And low global oil inventories, the difficulty of restocking in a supply-constrained market and strong competition for reliable supplies will likely continue to drive physical supply-demand dislocation and thus our markets for some time to come. Under these conditions, MRs in particular are playing a vital role as the most flexible and the largest tanker asset class by number of ships, as they can trade virtually anywhere in the world and they comprise fully one third of the global tanker fleet. Also, it's important to point out that tanker demand is highly price elastic. The cost of freight even at today's high levels is less than 5% of the value of the cargo. So there would appear to be no practical upper limit on charter rates in terms of potential oil demand destruction. Meanwhile, chemical tanker rates are tracking MRs upwards as a similar dislocation in chemical and vegoil markets is driving tonne-mile demand in addition to which there is less competition for chemical cargoes from MRs. Moving to Slide 6 regarding Ardmore's commercial and financial performance. Our fleet employment strategy has positioned the company very well to maximize earnings in this market upturn. We made a deliberate move to spot trading away from time charter out going into 2022 in anticipation of an improving market. But of course, neither we nor anyone else anticipated the current strength. Technically, our fleet is trading 120% spot when including our time charter-in vessels, now totaling five, at an average TC-in rate of $12,600 per day. As mentioned, chemical tankers are now also doing very well on a capital-adjusted basis, notably engaging on very long haul voyages, reflecting a key driver in this market. In addition, the $40 million perpetual preferred issuance from last year has proven to be very valuable in managing financial risk, while leaving all the upside to our shareholders in this strong market. And then, in the meantime, we're continuing ahead with a business as usual approach regarding performance improvement in order to maximize earnings and cash flow, with an ongoing intense focus on trading performance and voyage optimization which is particularly important in this high bunker price environment. We're also continuing with vessel efficiency improvements consistent with our ETP but also cash flow. And then financially, the recently concluded refinancing will reduce our average credit spread from 3.2% down to 2.6%, resulting in roughly $2.2 million per annum savings. Assuming a continuation of strong market conditions, we anticipate a meaningful reduction in our leverage and our cash flow breakeven levels by year-end, thus opening up new capital allocation opportunities along with more sustainable ongoing profitability. And with that, I'll hand the call back over to Paul.

Paul Tivnan, CFO

Thanks, Tony. I'll take a look at the fundamentals, then move to financial review and capital allocation. Starting at Slide 8 for demand fundamentals. The demand outlook for product and chemical tankers remains very positive. The IEA is forecasting global oil demand to increase by 1.7 million barrels a day this year and 2.1 billion barrels a day in 2023 in spite of a deceleration of global economic activity. In particular, aviation activity continues to support oil demand, with jet fuel demand increasing by 900,000 barrels a day or 18% since the start of the year. And the disruption to trade flows associated with the Ukraine-Russia war and the energy crisis are adding to tonne-mile demand. For example, Europe is now sourcing refined oil products in the U.S. Gulf and the Middle East rather than Russia, and this is unlikely to change anytime soon. Meanwhile, as we've been saying for some time, the ongoing trend of refinery dislocation will continue to have a positive impact on product tanker demand, providing an additional layer of growth. Over the next four years, there's 8.9 million barrels a day of export refinery capacity growth in the Middle East and Asia as compared to 5.9 million barrels a day of closures of local market-focused refineries in the U.S., Europe, Japan and Australia. The combination of these developments means larger seaborne volumes of refined products moving over longer distances. Overall, product tanker tonne-mile demand is expected to grow by 3% to 4% annually over the medium term which should be well above supply growth. The chemical tanker demand outlook is also very positive, driven by ongoing global GDP growth and increasing petrochemical output in the long term and favorable tonne-mile demand forces consistent with the product tanker market in the near term. Moving to Slide 9. We'll take a closer look at the supply fundamentals. The supply outlook for product and chemical tankers is also favorable, driven by a low order book and increased scrapping levels. Net fleet growth, deliveries less scrapping, is expected to be well below demand growth for the coming years. Estimated net fleet growth in 2022 is 1.4% for product tankers and 1.1% for chemical tankers with the downward trend expected to continue, as you can see on the chart on the upper right. Scrapping has been running at more elevated levels for the past two years and given the age profile of the fleet, this should continue. 29 product tankers were scrapped year-to-date compared to 68 ships or 2% of the fleet scrapped last year. And while the resurgent market may slow scrapping in the near term, an aging fleet will ultimately see scrapping levels increase in the long term. Currently, 9% or 271 ships of the product tanker fleet and 13% or 239 ships of the chemical tanker fleet are over 20 years old and close to scrapping age. At the same time, the order book for product and chemical tankers remains low. The product tanker order book is at 6.2% or 179 ships and the chemical tanker order book is at 6.3% or 78 ships delivering over the next three years. New ordering activity is expected to remain low in the near term. There's very limited berth availability until 2025. And a lack of clarity on propulsion technology and emission regulations has dampened the willingness of tanker owners to order speculatively. Moving to Slide 11, we take a closer look at fleet and operational highlights. We are continuing to invest in the fleet to optimize operating performance. We expect to complete one drydocking and a ballast water treatment system installation in the fourth quarter with a total CapEx of $2.4 million. Forecasted revenue days for 2022 are approximately 9,750, including time charter-in ships, with chemical tankers representing 24% of fleet days for the year. And operationally, the fleet continues to perform very well with on-hire availability at 99.3% for the second quarter. Turning to Slide 12 for financial highlights and guidance. We're reporting earnings of $29 million or $0.82 per share for the second quarter, representing our strongest quarter ever. And in addition to a strong charter-in performance, we have continued our focus on cost control and efficiency improvements. Operating expenses are at $15.9 million for the second quarter compared to $16.4 million for the same period last year. And looking ahead, we expect OpEx for the third quarter to be lower at approximately $14 million following the sale of three ships. Charter-in expense was $2.3 million for the second quarter and will increase to $5 million in the third quarter, reflecting five ships on time charter-in which includes the charter-back with the three recently sold vessels. And as you can see in the chart, we have split the time charter-in expense between operating and capital components in our income statement from this quarter and more on that in a moment. Depreciation and amortization totaled $7.9 million in the second quarter, down $1.1 million from the prior quarter as a result of the sale of three ships. And we expect depreciation and amortization for the third quarter to be about approximately $8 million. Total overhead costs were $5.3 million for the quarter and we're forecasting them to be in line with the third quarter. Interest and financing costs, excluding nonrecurring items associated with the sale of the vessels, came in at $4.2 million for the second quarter and we expect it to be approximately $3.9 million in the third quarter following the prepayment of the debt associated with the vessel sales and the cost savings associated with the refinancing currently underway. And finally, this quarter, we are introducing EBITDAR which is EBITDA plus bareboat equivalent lease expense, as a metric to enable a comparable valuation with IFRS reporting peers. Ardmore reports under U.S. GAAP, while most of our peers report under IFRS. IFRS differs from U.S. GAAP in its presentation of lease expense by including it in depreciation, whereas U.S. GAAP does not. As a consequence, vessels that are chartered in for greater than one year result in higher EBITDA under IFRS than under U.S. GAAP. Therefore, to assist in the process of a like-for-like valuation, we are introducing EBITDAR as comparable to EBITDA reported by IFRS peers. The effect is that we will add back vessel lease expense which is the implied capital component of the time charter expense, to EBITDA to arrive at EBITDAR. A full reconciliation of this is provided on Slide 20 to this presentation and also in this quarter's earnings release, Form 6-K released this morning. And turning now to Slide 13. We can immediately see the reality of the current market. The charter rates for the second quarter were very strong but they pale in comparison with the charter rates in the third quarter. Fleet average TCE was $27,800 in the second quarter, with MRs earning $30,500 and chemicals earning $22,000 per day on a capital adjusted basis. And for the third quarter, with 45% of the days booked, the fleet average is $43,300 per day, comprising MR TCE of $46,600 per day and chemical tanker rates of $32,900 per day. And to put this in perspective, on Slide 14, we're highlighting our operating leverage and providing some illustrative calculations of EPS and net income at different TCE rates. In the highlighted bars, you can see annualized net income and EPS based on charter rates for the second quarter and approximate charter rates for the third quarter. Based on a fleet average TCE of $27,500 per day which is approximate to what we reported in the second quarter, this translated to annualized net income of $120 million and EPS of $3.25. Using fleet average rates of $42,000 per day for the third quarter based on the bookings to date, this translates to annualized net income of $265 million or $7.15 per share. As you can see, with our operating leverage, the higher rate environment is substantially resulting in stronger financial performance. Moving to the balance sheet, in the second quarter, we completed the refinancing of our debt facilities with our existing banks for three separate loans totaling $308 million. These new loans were used to refinance 19 vessels, including 9 financed under leases. The loans consist of a $185 million fully revolving credit facility, a $108 million senior term loan, and a $15 million receivables facility. The two main loan facilities are priced at an equivalent of LIBOR plus 2.25%, which represents a significant reduction from our previous debt pricing. All three loans are linked to sustainability and include a pricing adjustment feature associated with carbon emission reduction and other environmental and social initiatives. This refinancing is highly beneficial for the company as it allows us to eliminate costly leases, reducing the number of leased vessels from 14 to 2 since the beginning of the year. The average credit spread on the debt will decrease from 3.2% to 2.6%, resulting in annual interest savings of $2.2 million. The final documentation is currently in progress and we anticipate it will be fully completed in October when all the leases are refinanced. In addition to this refinancing, we utilized a limited amount of the at-the-market offering to strengthen our finances. We issued 2.8 million shares during the period at a weighted average price of $7.40 per share, raising $20.5 million in net proceeds. Due to these initiatives and favorable market conditions, we are on track to establish a strong balance sheet in alignment with our capital allocation objectives in a very short timeframe. Finally, moving to Slide 16 for our capital allocation policy. Our capital allocation policy was introduced in March of 2020 and the overall objective is to build shareholder value in a highly cyclical industry. The policy is designed to ensure that Ardmore is well positioned to capitalize on opportunities through the cycle and developments in the industry. Our priorities remain the same. We maintain the fleet over time in terms of number of owned ships, reduce leverage to below 40%, grow accretively to scale and return capital to shareholders. We've made significant progress towards these objectives over the past 18 months. The preferred share issuance in mid-2021 buttressed the balance sheet through the COVID weakness, while protecting upside for common shareholders. The exceptionally strong charter market is now affording a great opportunity to further improve capital structure and reduce debt. The priority now is to accelerate debt reduction and clear the pathway to consider different uses of cash when those targets are met. With that, I'd like to turn the call back over to Tony.

Anthony Gurnee, CEO

Thanks, Paul. To sum up then. MR charter rates are now at levels offering impressive returns. For this quarter, earnings are $29 million or $0.82 per share, representing an annualized return on equity of about 40%. For the third quarter to date, with 45% fixed, potential earnings of $65 million or $1.75 in EPS and an annualized return on equity of about 90% if these levels are sustained. We believe the product tanker market is being influenced above all by the energy crisis. While the prospects of a global slowdown should temper expectations, there is growing consensus that the energy crisis will not be resolved anytime soon. Meanwhile, product tanker supply-demand fundamentals also look favorable with solid demand growth expected on the back of strong oil demand growth even after recent downward revisions and product tanker supply constrained by shipyard berth availability and continued scrapping. As a company, we remain focused on operating performance and are making good progress in addition toward our capital allocation policy objectives, in other words, leverage reduction and fleet size management which, when met, will allow us to pivot to other priorities, in other words, further growth and returning capital to shareholders. In addition, our energy transition plan is still very much at the center of our thinking, most immediately driving efficiency improvements and progress with our e1 Marine joint venture, while continuing to seek opportunities in a gradually but nevertheless profoundly changing business landscape. On a final note, I want to take this moment to thank our CFO, Paul Tivnan, for all his effort, great results and companionship over these past 12 years and wish him the very best in his future endeavors. At the same time, as you will see in our separate press release, we're very pleased to welcome our new CFO, Bart Kelleher, to the team and we look forward to working with him from September 1. With that, we're happy to open up the call for questions.

Operator, Operator

The first question is from Sean Morgan of Evercore.

Sean Morgan, Analyst

I'm here for John today. He wanted me to express our sentiments to Paul and wish him luck in his new endeavor. I'm not sure where he's headed, but if it's New York, I believe we can accommodate one more Irishman here. Regarding the e1 Marine business, it's been about a year since that closed. Is it commercially ready to start licensing out for royalties, or where do we stand commercially with that business line?

Paul Tivnan, CFO

e1 Marine has made significant progress at Ardmore Corp, especially over the past few years and particularly in the last year. They are now at a stage where they can start issuing licenses. The current focus has been on adapting the technology for maritime use, and construction of the Hydrogen One vessel, announced last December, is progressing well. In our last call, we mentioned that they received principal approval from Lloyd's. Additionally, Hydrogen One's maritime partners have just ordered their fuel cells to integrate with the e1 system. A lot of advancements have been made in commercializing and adapting the technology for maritime applications. Moving forward, we anticipate commercial progress and potential licensing opportunities in the coming quarters.

Sean Morgan, Analyst

Okay. And then just a follow up for Tony, I think, on the broader market. We've had obviously a nice improvement here in rates on the clean MRs. I'm just wondering how much of that do you ascribe to sort of dislocation from Russia versus the changing geographies of clean product production and then, I guess, just kind of return of travel demand? And how sustainable do you think this nice, tight rebound we have is?

Anthony Gurnee, CEO

Yes, that's a good question, Sean, and it reflects our focus in the presentation. You're touching on a few important aspects. One is the fundamentals, particularly the return to jet fuel. Overall, there’s a healthy balance between supply and demand. Recently, we’ve been hearing about a broader energy crisis, which is partially influenced by the Ukraine war, but there are other contributing factors as well. This situation is unfolding while many consumers are operating with very low inventories and are having to seek reliable sources of supply from distant locations.

Operator, Operator

The next question is from Ben Nolan of Stifel.

Ben Nolan, Analyst

Good luck to you, Paul. But I guess I would start from a sort of a bigger picture, a macro question. You addressed this a little bit in the capital allocation with a target of 40% leverage. I mean these kind of daily rates, you're going to get there really fast, especially with the addition of the ATM that you've been somewhat on there. I guess, Tony, for you, big picture. If this market can sustain here or at least at reasonably healthy levels and the leverage gets down, where do you want Ardmore to be, I don't know, a year from now or two years from now? How would it look different now that things have sort of transitioned from theoretical to actually possible?

Anthony Gurnee, CEO

I believe that it will take a year or two from now. If the market maintains levels close to where it is now, we will achieve our leverage targets well in advance. Under those circumstances, we would likely be returning significant capital to shareholders and be well positioned to identify growth opportunities. If the market does not hold, we expect to see our financial strength build rapidly, which will provide us greater flexibility in capital allocation. Our main goal with the capital allocation policy was to prepare the company for well-timed and highly beneficial growth, along with a consistent return of capital to shareholders.

Ben Nolan, Analyst

Right. Although, I suppose the trade-off in this is always present in shipping. You mentioned in the presentation that MR values have significantly increased. It's always a trade-off. Do you invest in growth even though prices may be higher, or do you focus on returning capital? I'm trying to understand how you approach executing on growth.

Anthony Gurnee, CEO

I believe it's clear that we are not players driven by momentum. Therefore, we will be careful about when and how we pursue growth. The last significant step we took was quite some time ago with the Frontline fleet acquisition. We purchased those eco-design MR ships when they were approximately a year old for $29 million each. Currently, a six-year-old ship is valued at around $34 million or $35 million. Therefore, we don't necessarily need to excel in acquisitions. However, we see potential opportunities that may arise over the next year or two, even in relatively strong market conditions. Otherwise, we can afford to wait. We have an excellent fleet that is poised to generate substantial cash flow for at least the next three years.

Ben Nolan, Analyst

Right. And lastly, regarding the chartering strategy, are you considering securing gains from charter-ins by chartering out those vessels to ensure some cash flow visibility? What does the trend look like? Is there a significant decline in time charter compared to spot?

Anthony Gurnee, CEO

At the moment, the rates are significantly lower than in the past. We discussed spot rates, and the one-year time charter estimate is currently around $20,000, which is quite low. It may remain stable for a couple of years, so we are not yet interested in those numbers. Our perspective on the next one to two years will influence our decisions when opportunities arise. It’s important to consider the reliability of the counterparties and their ability to fulfill agreements even if rates decrease.

Paul Tivnan, CFO

Thanks, Ben. Will talk to you soon.

Operator, Operator

The next question comes from Omar Nokta of Jefferies.

Omar Nokta, Analyst

Yes. Congratulations on a very strong quarter. It seems like you have set up the third quarter to be even better. Paul, congratulations on your 12 years with Ardmore. It has been a pleasure, and I look forward to seeing what you have coming next. It’s definitely a good approach with those refinancings in the past couple of months. I wanted to ask about capital allocation. Your priorities are clearly maintaining the fleet, followed by reducing the target leverage to below 40%. This appears to be a shift from the past, where the target was simply to reach 40%. Now the goal is to go below that, which makes sense. Could you clarify how far below 40% you aim to go?

Anthony Gurnee, CEO

You're probably reading too much into this, Omar. I think we're satisfied with including the preferred in the leverage component, and we're comfortable being below 40% on a mid-cycle basis. It appears there's significant momentum heading toward that target right now.

Omar Nokta, Analyst

Do you think that figure is achievable by year-end based on current trends?

Anthony Gurnee, CEO

Yes, based on how things are playing out now, definitely. Just look at the forecast for 3Q. If you even have a moderate assumption for 4Q, I think that probably gets us there. We're very pleased when that happens because then it opens up all sorts of other opportunities, notably returning capital to shareholders but also looking for growth opportunities without playing into a hot market.

Omar Nokta, Analyst

Yes. Regarding fleet opportunities, do you believe it would make sense to deploy capital for buying ships again? A couple of years ago, after the floating storage boom, you had a significant amount of excess free cash and purchased an MR that was a bit older, built in 2010. How do you view the possibility of doing something similar in the future? Would you consider being opportunistic like that again, or are you more focused on acquiring younger ships?

Anthony Gurnee, CEO

That's a really good question. Look, we're really happy with that one acquisition we made. It did use quite a bit of cash. The reality is that, that ship then and even today has a breakeven rate, including full overhead allocation, of $11,700 per day; so that always works. We obviously, over time, need to consider how to rebuild, build and modernize our fleet. We think our timing is pretty good in that respect in terms of what the right type of ship will be for the future, meaning that nobody really knows quite yet but hopefully, we'll have visibility on that in a year or two. If in the meantime, interesting, either in the product or chemical space, opportunities come to buy more modern ships at a good price in some form, obviously, we'll take a hard look at that.

Omar Nokta, Analyst

You recently sold three of the older MRs and have seen a significant increase in asset values over the past few months. Are you considering monetizing another part of the Ardmore fleet, such as the Handys or the chemical tankers, or are you satisfied with your current holdings?

Anthony Gurnee, CEO

Yes, we held off on selling the ships for about a year, always intending to bring them back on medium-term charters. This strategy allowed us to exit ships nearing 15 years of age while maintaining their earnings potential and commercial presence. Currently, rates are quite strong, particularly in the dry bulk market, allowing for significant cash flow. Looking back, there may be a time when people realize that was the moment to sell, but predicting that is challenging. At this moment, it is not a primary concern for us.

Omar Nokta, Analyst

Got it. And again, Paul, a pleasure working with you and good luck in the future.

Paul Tivnan, CFO

Likewise, Omar.

Operator, Operator

The next question is from Chris Tsung of Webber Research.

Chris Tsung, Analyst

On the new sustainability linked loans replacing the existing facilities, can you expand a bit on the factors that were considered to secure these new rates? And what do the pricing adjustments look like?

Paul Tivnan, CFO

Great question. When considering sustainability-linked loans and the direction of the shipping finance market, obtaining attractive funding from top-tier banks requires demonstrating strong sustainability credentials and committing to significant carbon reduction targets. In terms of the loans, we have successfully secured very competitive rates, especially given the overall economic climate, which has resulted in significant savings on our existing debt. Regarding the pricing adjustment, it's around five basis points, which aligns with the market for sustainability-linked loans. The key takeaway is that to gain access to top-tier financing at competitive rates with leading banks, it's essential to incorporate a strong sustainability component.

Chris Tsung, Analyst

Got it. Yes. Congrats on securing that. That looks great. I'm wondering about Ardmore's scale and bandwidth; how long do you, Tony, plan to commercially manage those three chemical tankers?

Anthony Gurnee, CEO

Chris, you faded out there at the end. Could you repeat the question?

Chris Tsung, Analyst

Yes. Sure. So just when thinking about scale and bandwidth for your operations, like how long do you continue to commercially manage those three chemical tankers?

Anthony Gurnee, CEO

It's on an ongoing basis but I think they're really pleased with the results they're achieving right now. So hopefully, it will be with us for a while. But yes, those bring the fleet up to 30 ships all together which we think is okay for the time being in terms of commercial platform and market reach.

Chris Tsung, Analyst

Right. Okay. And for the three vessels that you sold and chartered back for two years, when would those options need to be declared? And are the rates firmer or softer than the current charter-in rates?

Anthony Gurnee, CEO

Yes. We haven't specified the exact rate yet. However, if the structure is a firm two years with an option for one year, I would assume the one-year option could probably be declared a few months before the end of that two-year period. They are just starting now. When you average the rate of the five ships, including the other two chartered-in, it comes to $12,600 per day, which is significantly lower than the current levels.

Paul Tivnan, CFO

Great. And lastly, just from all of us at Webber Research, congrats and best of luck to you, Paul. Thanks, Chris. Hopefully, we'll speak to you all soon.

Operator, Operator

This concludes our question-and-answer session and today's conference. Thank you for attending today's presentation. You may now disconnect.