EuroDry Ltd. Q2 FY2021 Earnings Call

Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Conference Call on the Second Quarter 2021 Financial Results. We have with us today, Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by question-and-answer session. I must advise you that this conference is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone that in today’s presentation and conference call, EuroDry will be making forward-looking statements. These statements are within the meaning of the federal securities laws. Matters discussed may be forward-looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to slide two of the webcast presentation, which has the full forward-looking statements. And the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And I would now like to pass the floor over to Mr. Pittas. Thank you, sir. Please go ahead.

Good morning everyone, and thank you for joining us today for our scheduled conference call. Alongside me is Tasos Aslidis, our Chief Financial Officer. The objective of today’s call is to go over our financial results for the six-month period and the quarter ending June 30, 2021. Please refer to slide three, which highlights our income statement. In the second quarter of 2021, we reported total net revenues of $14.1 million and a net income of $2.2 million. The adjusted net income attributable to common shareholders was $6.6 million, or $2.76 per diluted share. The primary difference between net income and adjusted net income was a paper loss of approximately $3 million on our FSAs for one vessel during Q3 and Q4 at $12,550 per day. Since we've accounted for this loss in Q2, our net income for Q3 and Q4 will remain unaffected by the lower FSA rate. Adjusted EBITDA for the quarter was $9.2 million. Our CFO, Tasos Aslidis, will provide more detailed financial highlights later in the presentation. Please turn to slide four for our operational highlights. The motor vessel Pantelis has been chartered for about 90 to 130 days at $23,000 per day, with a potential increase to 95% of the DPI if the trip extends. The Blessed Luck has been chartered for 11 to 13 months at $19,500 per day, and the Alexandros P is on a trip charter for about 65 days at $25,250 per day. During the second quarter, we settled 90 days of previously sold forward trade agreements equivalent to one Panamax vessel, originally sold at $12,500 per day, resulting in a loss of $590,000. We also sold FFAs for a similar 90-day term in Q3 and Q4 at $12,550 per day. The valuation of outstanding FFA contracts for Q3 and Q4 as of the end of June 2021 was negative $4.26 million, with $3.1 million of this loss incurred in the quarter. As we announced in May 2021, we acquired the motor vessel Blessed Luck, a 76,000 dry bulk vessel built in 2004 in Japan, for $12.12 million. At present, company cash is limited; the acquisition was partially financed by a seller’s credit of $5 million and a $6 million one-year bridge loan provided by a family-affiliated entity, approved by our independent Board members. Both the credit and the short-term loan have an annual interest rate of 8%. In July 2021, we repaid the seller’s credit and signed a term sheet with the bank for an $8 million loan, secured by the Blessed Luck, expected to be drawn in August. Additionally, as disclosed in June 2021, $3.3 million of the bridge loan was converted into common stock per its terms, leaving $2.7 million outstanding. There are no planned drydockings or major repairs for the second quarter of 2021. Please turn to slide five for a summary of EuroDry's current fleet. The acquisition of Blessed Luck increased our fleet to eight vessels, complementing our collection of medium-age Japanese-built Panamax vessels alongside newly built ones. Our fleet's average age is 13 years, with a cargo carrying capacity of about 600,000 deadweight tons. Slide six displays the current vessel employment schedule. The effective coverage for the remainder of 2021, including the Blessed Luck, is approximately 27% in minimum fixed-rate contracts. Including vessels hedged through FFA, our coverage rises to 40%, excluding six charters with secured employment open to market movements. We are satisfied with our forward coverage position and remain optimistic about market developments. Tasos will later present our EBITDA calculator, demonstrating how current FFA market predictions can enhance our EBITDA and earnings as well. The risk calculator will help you utilize your own charter rate assumptions to estimate our expected EBITDA and draw your conclusions regarding stock valuations. Now, let’s look at slide seven for the market highlights for the quarter ending June 30, 2021. During this quarter, the dry bulk index maintained strong performance as rates stayed firm due to demand growth, rising commodity prices, and operational delays. One-year TCE rates also remained robust. The average spot rates for Panamax vessels were $23,200 a day in the second quarter, increasing by July 30 to around $27,200 per day, peaking at approximately $30,400 at the end of June. One-year time charter rates for Panamax averaged close to $21,700 per day in Q2, reaching $26,900 by the end of the quarter. Last week, one-year time charter rates were around $24,000 per day. With strong dry bulk freight trading and levels not seen in the last decade, vessel prices have also risen. According to Clarksons, secondhand bulk carrier prices increased sharply by 45%, while new building prices rose by about 20% to over $32.5 million for Kamsarmax and $30 million for Ultramax vessels. In the first half of the year, the fleet grew by 2%. The global recovery is progressing solidly, but COVID-19 variants may introduce uncertainty. The latest forecasts show a downward revision for Asia and developing economies, contrasting with an upward revision for advanced economies that have accessed vaccines and can look forward to more normalized activities. The IMF forecasts global economic growth of 6% in 2021 and a 4.9% rise in 2022. The 2021 global forecast varies from April’s but includes offsetting factors. Expectations for emerging markets, particularly in Asia, have been lowered for 2021, while forecasts for advanced economies have improved. The 2022 global growth forecast has been upgraded by 0.5%, primarily due to improvements in advanced economies, especially the United States, projected to grow by 4.9%. China's and India's expected growth rates are 5.7% and 8.5%, respectively. For 2023, global growth is anticipated to be around 3.5%. Looking at dry bulk freight growth, Clarksons projects demand growth expectations to rise to 4.3% this year. For 2022 and 2023, the dry bulk trade is expected to grow at a moderate pace of 2.2% and 2.5%, respectively, which may be conservative if global growth remains robust. As we turn to slide 10, the order book as a percentage of the total fleet up to July 2021 stands at 6.1%, among the lowest levels seen in over 25 years. Given the current order book and ongoing demand trends, we expect support for the dry bulk market for the next couple of years. On slide 11, we can see our dry bulk fleet overview. According to Clarksons, fleet growth in 2021 will be around 3.8%, factoring in scrapping and other fleet changes. This growth is less than demand growth, reinforcing the case for a strengthening market, further accentuated by logistical bottlenecks we're experiencing. The current order book stands at about 6.1%, suggesting potential scrapping and inactivity could yield a minimum impact in 2022 and 2023. By 2024, new vessels must be built to avoid surpassing even previous supercycle rates if demand continues. Moving to slide 12, we summarize our outlook for the dry bulk market. Global recovery remains strong despite emerging COVID-19 variants that could slow but not halt economic growth. Several infrastructure projects have been announced but not yet implemented. The dry bulk market shows strong momentum backed by supportive commodity markets, which reached 11-year highs in mid-June 2021. Earnings may stabilize or retract from current high levels due to logistical challenges, but the short- to medium-term outlook remains positive, especially given the historically low order book. Ship deliveries in 2022 and 2023 are expected to be minimal due to limited shipyard slots. The uncertainty surrounding future fuel sources and optimal ship design complicates new orders as well. Overall, steady recovery in dry bulk volumes combined with limited supply growth and positive global sentiment should lead to further improvements into 2022 and beyond. However, market conditions could experience volatility due to ongoing risks from COVID-19 events and freight rates. Let’s move to slide 13. The left side illustrates the evolution of one-year time charter rates for Panamax dry bulk vessels since 2000. As of July 30, the one-year time rate for a 75,000 deadweight ton Panamax stood at around $24,000 per day, the highest in recent years and nearing 2010 levels. The dry bulk market has been firm since the start of the year, and we anticipate this trend to continue in the upcoming quarters, typically stronger than the first half. On the right, the current price for a 10-year-old Panamax vessel is about $22 million. Over the past year, dry bulk prices have gradually risen, exceeding historical median and average levels, yet remaining significantly below 2010 prices. As the freight rate environment strengthens, we expect to see substantial increases in vessel values. We are leveraging the strong market to generate notable earnings, boost our cash position, and enhance our balance sheets. As our free liquidity significantly increases next quarter, we are evaluating options to benefit our shareholders, which may include debt and equity reductions, further investments, share buybacks, or reinstating dividends, likely a combination of these strategies. We are also assessing potential mergers with other fleets, particularly using our stature as a public company to create significant advantages and value. Now, I’ll hand it over to our CFO, Tasos Aslidis, to discuss our financial highlights in further detail.

Thank you very much, Aristides. Good morning from me as well ladies and gentlemen. I will now take you through our financial highlights for the second quarter and first half of 2021 and compare to the same period of last year. For that, let's turn to slide 15. For the second quarter of 2021, the company reported total net revenues of $14.1 million, representing a 251% increase over total net revenues of $4 million during the second quarter of 2020. This was the result of the higher time charter rates our vessels earned during the period and the additional vessel we acquired in the middle of the second quarter of this year. The company also reported net income for the period of $2.2 million and net income attributable to common shareholders of $1.9 million as compared to a net loss and net loss attributable to common shareholders of $3.8 million and $4.2 million respectively, for the same period of 2020. Interest and other financial costs for the second quarter of 2021 amounted to $0.5 million compared to about $6 million for the same period of last year. Depreciation expenses for the second quarter of 2021 amounted to $1.8 million as compared to $1.6 million for the second quarter of last year. This increase is due to the higher number of vessels we owned during the second quarter of 2021. Adjusted EBITDA for the second quarter of 2021 was $9.2 million compared to a negative EBITDA level of minus $1.3 million reported during the same period of last year. Basic and diluted earnings per share attributable to common shareholders for the second quarter of 2021 was $0.83 basic and $0.81 diluted, compared to basic and diluted loss per share of $1.86 for the second quarter of 2020. Excluding the effect on the income attributable to common shareholders for the quarter of the unrealized loss on derivatives and the loss on debt extinguishment, the adjusted net income attributable to common shareholders was $6.6 million, compared to a loss of $3.9 million for the second quarter of last year and the adjusted earnings per share attributable to common shareholders for the quarter ended June 30, 2021 were $2.81 basic and $2.76 diluted for this year, compared to an adjusted loss per share of $1.73 basic and diluted for the same period of 2020. Usually, security analysts do not include the above items in their published estimates of earnings per share. Now, if we look at the numbers for the first half of 2021, for that period, the company reported total net revenues of $22.7 million, representing a 150% increase over total net revenues of $9.1 million during the first half of last year, which again was due to both the higher time charter rates our vessels earned and the additional vessel we acquired and operated for part of the period. The company reported net income for the period of $3.1 million and net income attributable to common shareholders of $2.4 million, as compared to a net loss of $6.1 million and net loss attributable to common shareholders of $6.9 million for the first half of the previous year. Interest and other financing costs for the first half of 2021 amounted to $1.1 million compared to $1.2 million for the same period of last year. Depreciation expenses for the first half of 2021 were $3.4 million compared to $3.3 million for 2020, again, a bit higher due to the additional vessel we owned. Adjusted EBITDA for the first half of 2021 was $13.2 million, compared to a negative $1 million reported during the first half of 2020. Basic and diluted earnings per share attributable to common shareholders for the first half of 2021 were $1.03 and $1.01 respectively, compared to basic and diluted loss per share of $3.03 for the first half of 2020. Excluding the effect on the earnings attributable to common shareholders for the first part of this year of the unrealized loss of derivatives and the loss on debt extinguishment, the adjusted net income attributable to common shareholders was $7.9 million, compared to a loss of $6.2 million during the first half of last year. The adjusted earnings per share attributable to common shareholders for the first half of this year were $3.40 basic and $3.33 diluted compared to a loss of $2.76 per share basic and diluted for the same period in the first half of 2020. As I mentioned earlier, security analysts typically do not include these adjustments in their published estimates of earnings per share. Let's now turn to slide 16 to review our fleet performance. We will start our review by looking first at our fleet utilization rates for the second quarter of 2021 and compare it to the same period of last year. As usual, our utilization rate is broken down into commercial and operational. During the second quarter of both 2021 and 2020, our commercial utilization rate was 100%, our operational utilization rate for the second quarter of this year was 99.4% compared to 99.9% for the same period of 2020. On average, we operated 7.37 vessels during the second quarter of 2021, earning an average time charter equivalent rate of $22,614 per day. A daily earnings rate that is three times higher compared to the average earnings of $7,297 per day of seven vessels during the second quarter of last year. Our total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs averaged about $6,467 per vessel per day during the second quarter of 2021, compared to $6,131 per vessel per day for the second quarter of 2020. If we move further down in this table, we can see the cash flow breakeven rate that we had during the second quarter of this year, which takes into account drydocking expenses, cash interest expense, loan repayments, and our preferred dividend payments if paid in cash. Thus, for the second quarter of 2021, our daily cash flow breakeven rate was about $10,313 per vessel per day, compared to $11,800 per vessel per day for the same period of 2020, mainly because of lower drydocking expenses included. Let's now review our utilization rate and the remaining figures for the first half of this year. During the first half of 2021, our commercial utilization rate was 100% and the operational utilization rate was 99.7%, compared to 100% commercial and operational utilization rate for the same period of last year. An average in 2021, the first part of the year, we operated 7.19 vessels, earning an average time charter equivalent rate of $18,879 per day, compared to seven vessels that we operated last year earning $7,690 per day on average. Our total daily operating expenses, including management fees, G&A, but excluding drydocking costs for the six-month period of this year, the first six months of this year amounted to $6,518 per vessel per day, compared to $6,093 per vessel per day for the first half of 2020. We look again at the bottom of this table to see our cash flow breakeven level, which for the first six months of this year amounted to $10,688 per vessel per day, compared to $11,489 for the same period in the first half of last year. Let's now move to slide 17. This is a relatively new slide. We started using it in the previous earnings presentation. And we included it here to provide our shareholders and investors a tool to assess the earning potential of our fleet for the rest of 2021. The table shown in this slide, there's two components. The first refers to our fixed rate contracts. It is worth noting that except for the charter of our vessel Blessed Luck, our vessels having fixed-rate contracts are totaling about 114 days during the third quarter and about eight days in the fourth quarter over and above the charter of Blessed Luck. We consider this for two issues, if the market is performing very well and producing significant earnings for us. The rest of our vessels are employed in contracts linked to the relevant Baltic Dry Index. Our calculator here indicatively shows the Supramax and Panamax Baltic forward rate as of August 3rd, 2021, and also shows how these index levels get translated to rates for our ships. We actually display the final blended rates for the open basis of our fleet, which you can see right below the Supramax and Panamax forward rates in the table, and which as you can see turns out to be very similar to the index levels. Based on these assumptions, and by further assuming for simplicity a $65,000 per vessel per day, operating expenses in G&A and a 5% commission rate, one can estimate the EBITDA contribution of our fleet. The final result is additionally adjusted for the FFA contract of 90 days per quarter for the rest of the year that we have presented. This reflects Panamax vessels equivalent. This overall presentation is meant to provide, as I mentioned, a tool to calculate our EBITDA for the remaining quarters of 2021. Obviously, one can adjust our own assumptions about the rates to do that. However, it is hard not to observe that EBITDA market rates for the rest of the year, as they are currently indicated by the FFA contracts materialize, our total EBITDA will exceed what we reported in the second quarter by about 50% and result in the EBITDA contribution from the second half of 2021 to be about double that of the first. Let's now move to slide 18. To review our debt repayment profile. On the top part of the slide, we see our loan repayments as well as our balloon payments of our bank debt as of June 30, 2021. The graph on the top does not include the seller's credit and the bridge loan for their position of Blessed Luck that I previously mentioned, but does include a bank loan we agreed to and plan to draw this money to finance the best. All in all, as of June 30, 2021, we had an outstanding debt of about $62 million, and that figure includes the seller credits and the remaining bridge loan. As you can see from the graph, we're going to make about $4.2 million of debt repayments during the remainder of 2021 and we have an $8 million balloon payment at the end of the year, which is collateralized by three or four Panamax vessels. This balloon payment in 2021 is well below the scrap price of the vessels collateralized. We anticipate that we will have no issues refinancing. In fact, we're in the process of doing that. Again, from this chart, we can see that we have a declining level of loan repayments over the next four years. Of course, assuming that the balloon payments are made as shown, with another balloon payment coming due in 2023 of about $11.3 million, which is collateralized by 2018 Kamsarmax vessels. Of course, when these balloon payments are financed, the revised loan profile will reflect that. I'd like to make a quick note here on the cost of funding. The average margin of our debt, as you can see from the comment on the right part of the slide is about 3.3%, assuming the LIBOR rate of about 0.3% on top of it, the cost of our senior debt is estimated to be around 3.6%. If we include in this figure the cost of the preferred equity, the average blended cost of our non-equity funding would be around 4.4% as of the end of the last quarter. Regarding our preferred equity, I would like to highlight that following a $3 million net redemption that we made in the first quarter of this year, we have agreed to reduce the dividend rates on the preferred equity to 8% per annum if paid in cash, until January 2023. At the bottom of the slide, we can see also a projection of our cash flow breakeven level over the following 12 months in the breakdown of it, which is expected to be around $11,231 per vessel per day. If we now move to the next slide, slide 19 where we can see some highlights from our balance sheet. This slide gives you a snapshot of our assets and liabilities in a simplified way. On the asset side, first, we can see that we have cash and other assets as of June 30, 2021, of about $19.9 million. Of course, on our assets, I will also give our vessels whose book value amounts to about $108 million, making our total book value of about $127.9 million. On the liability side, our debt as of the end of the last quarter stood at $62 million, which approximately represents 48% of the book value of our assets. Our preferred equities stood at about $13.6 million, which represents another 10.7% of our assets. And we have remaining liabilities for about $8.4 million or 6.6% of our book assets. That leaves us with a net book value of $44.6 million, which translates to $16.9 per share. However, the market value of our fleet is significantly higher than its book value. We need to make such an adjustment to get a better estimate for the value of the company. We estimate that this will be end of June 2021, the market value of each of the eight vessels we currently own to be in the range of $140 million to $145 million, that is 30% to 35% higher in the book value, resulting in an estimate for our net asset value per share of about $29. Although our share price has recently increased, our stock currently trades below that level and we believe our company investing in our company represents an opportunity with significant appreciation potential. And with that, I would like to turn the floor back to Aristides.

Thank you, Tasos. Let me now open up the floor for any questions you may have.

Thank you very much, sir. Our first question for today is from Tate Sullivan from Maxim Group. Please go ahead.

Hi. Thank you. First from me reviewing one of your comments on the new build market, Aristides, I think it was on slide 11 that you were. What did you say about 2023? I think you mentioned an urgent need to start building new vessels by 2023 based on that chart, but then those new vessels won’t enter the market for at least a couple of years, can you review the timing of that comment?

Yeah. So Tate, I think that because the current order book for 2022 and 2023 is very low. If demand stays strong, remains quite strong, we will have a shortage of sales. So at some point, we have to start ordering new vessels that will come in starting in 2024 onwards, because we will have a lack of new sales. So I think we will see more vessels being ordered during the next 18 months.

Okay. But the impact on the near-term rates has not appeared yet or at least has that started to appear, and what you're seeing in FFA is available for 2022?

Yeah. That is gradually increasing a lot, but not fast enough. I think it will probably increase faster. But of course, it will depend on other factors as well, the pandemic and logistical issues that we may be facing because of those and the global growth rate. So it's very difficult to project the future. What is relatively easy to see is that the order book for 2022 and 2023 deliveries is extremely low.

Yes. And then thank you for putting in the EBITDA calculator slide again with about 40 million of EBITDA on 2021. I was just interested in rolling forward to 2022. I mean, is the FSA market liquid enough for you to start locking in rates, the size of shifts you have on fixed contracts going into 2022 or it's still early to talk about the rates that you could start fixing for 2022?

So the FSA is liquid enough for somebody who wants to play the FSA markets for 2022. You can find the coverage there. But there are two things: one, we feel that that is still lower than what we will see later on in the year. So we are not inclined to take any protection at those levels today. Plus the FFAs have the significant issue that you have to post a lot of collateral in order to do an FFA trade. And if it moves against you, you have to increase that collateral. So it consumes a lot of cash; an easier way to roll forward, perhaps is to fix one-year time charter rates, which does not consume this extra liquidity.

Great. Thank you. And what one more for me, Tasos, for the use of cash in free in the current quarter and maybe I missed it. Maybe it was some netting out amounts to the Blessed Luck was a $12 million acquisition. But then the cost of the acquisition amount in terms of the cash outflows $7 million. Will there be another outflow in the third quarter based on the seller credit timing or how does that usually occur?

The difference is exactly the seller's credit spread. We said the seller loan essentially which I think we paid in July this year. So the remaining $5 million will be seen in our cash flow statements next quarter.

Okay. Perfect. Okay. Thank you very much.

Thank you, Tate.

Thank you, Mr. Sullivan. The next question is from Poe Fratt from Noble Capital Markets. Please go ahead.

Good morning, Aristides. Good morning, Tasos.

Hi, Poe.

Hi, Poe.

Aristides, could you talk about what's happened recently, in the context of Panamax has been a little weaker than Ultramax and to sort of what's going on there? And then also, could you give us a view on sort of the next six months, in the context of whether we're going to see the typical seasonality in the market or sort of what you're anticipating in the fourth and first quarters coming up?

Tough questions, tough questions, Poe. So it's not easy to talk about what has happened than what will happen in the next six months. Panamax has been very strong during the first part of the year due to the extra grain shipments that we had seen up to June. And this has quietened down a little bit in the last month. I think that probably explains a little bit of the softening of the Panamax market as compared to the Ultramax market, which we haven't seen any softening yet. So, going forward, of course, Q3 and Q4 are historically stronger periods than the first half. It remains to be seen exactly what will happen. We have the huge bottlenecks that are created because of the pandemic and the logistic issues, and the time it takes for bolts to discharge vessels and all that on one side. We have the proving demand from the western economies. On the other hand, it's very difficult to say exactly how the next few months will pan out. But I would think that we would expect the strong rates to continue, whether they will be much higher or much lower, it's very difficult to tell.

Great. Thanks. And can you talk about the decision or what happened with Alex P as far as exiting the GMax Pool, how you're viewing that? I mean, are you going to continue to let it work in the spot market or do you view that you potentially would put that on the time charter?

I think we decided to take it out after what was its been past years because we feel that we can employ it much better in the spot market at these high levels. So, that protection was not needed there. If at some point, we decide to fix it again for a year or something like that, that remains to be seen. We haven't decided on such things yet. We are trading in spot. We fixed it for our first cargo into Brazil for the next two months, which is usually an area where you can get high charter rates. We'll see how it goes. But there is no intention right now to fix for longer periods. We may, though, if we see Q3 strengthening, get a little bit more cover on maybe fixing one or two more vessels of our fleet for the yearly periods.

Okay, great. And then, Tasos, I know you're in discussions on the new loan, $12 million to take to refinance the balloon and add some extra. It looks like liquidity to $4 million can you talk about that decision? Also, if the context of the extra liquidity, and would you happen to have the terms yet, as far as the amortization and balloon payment that might be associated with a new $12 million loan?

It's actually, of course, it is relatively straightforward. I think, with increase in values, we can actually finance the $8 million using only two, or rather than vessels as collateral and drawing a loan of about $9 million. So we will be able to repay if we wanted the full loan and save your free ship unencumbered, who might end up doing is repaying the portion that is covered by those two ships and extending the loan for the third one. You are right in indicating that we might have a $4 million additional liquidity, which would be very useful as we are looking at possible investment opportunities or other uses of funds. I think they're long we're looking at a four-year term loan, with your normal amortization going down to about the cap value.

Okay. Great. And then Aristides, if you could just talk about, comment about potentially, with public security that you potentially would be looking for acquisition or opportunities to merge or acquire companies that are looking to exit. Can you talk about the strategy? Would it be more oriented towards renewing the fleet? Or would it be looking at your current fleet, and saying, we are looking for like vessels? I mean, can you just help me understand sort of strategically how the fleet might change over time?

Yeah. It's difficult to say what I can say because we don't have any projects that we are looking at right now. So it's difficult to say. Of course, we are there to look at every opportunity that could make sense for our stakeholders. But practically, we are focusing on the size of the ships that we currently own from Supramax up to Kamsarmax; that is the area we feel comfortable with. So, we're looking at projects there. We are open to look at all the vessels and the newer vessels. We would like the idea, if there is somebody who wants to contribute their vessel into EuroDry in exchange for investment costs, to go ahead and add that vessel, as long as it fits this broad criteria that I just told you. And of course, it makes financial sense. So we are open to such deals. We have discussed things in the past. We are not currently in any discussion, though, with anybody about the contribution of one or a group of vessels into the company.

Great. That's very helpful. Thank you so much.

Thank you, Poe.

Thank you.

Thank you. There are no further questions at this time. I will now hand the call back for closing comments.

Okay. Thank you, everybody, for this discussion today, and we will be back with you in three months' time to discuss the Q3 results. Thank you and enjoy the summer.

Thanks, everybody. Bye.

Thank you. Ladies and gentlemen, that does conclude the call. Thank you all for your participation. You may now disconnect.