Good morning, everyone, and welcome to the first quarter results presentation for Stainless Tankers ASA. As usual, we've got a Q&A button on the screen, so any of you during the course of the presentation have any questions, please pose those using the Q&A button. We'll attempt to answer them hopefully we answer them during the course of the presentation anyway but if we haven't we'll come back to them at the end i'm joined here in london by irene as usual and we've also got nicholas we've also got nicholas on the video call here from our office in geneva before launching in to the presentation and you may have noticed in our results release this morning I wanted to just touch on a couple of organizational changes which are important both to Tufton as well as to stainless just starting with Tufton investment management the managing company for Stainless ASA. Ted Kulborg, our chairman and founder of the company back in 1985, has stepped down as chairman of the company, and I have assumed his role as chairman of Tufton Investment Management. As at the end of June, I will be relinquishing executive duties and step down as CEO of Tufton and Nicholas Tiragalas, our current CIO, will take my place as CEO. Now, Nicholas, together with my family and Ted's family, remain the major shareholders in the Tufton group. We remain on the management and investment committees and on the main board of the company as main shareholders so if you like there are there is a change of roles but not necessarily a change of the people involved in the strategic direction of the company just moving on to stainless ted is tendering his resignation as chairman of the company at the forthcoming AGM which is on the 20th and the board have supported me as being Ted's replacement as chairman of stainless and that will go that will go to the AGM for a vote. Tufton have therefore proposed that I am replaced as CEO of stainless tankers by Nicholas which mirrors in effect what we're doing what we're doing at tufton as well um and that that will all take place um post the um post the agm um the consistent factor and the solid solid rock will be our cfo uh sitting next to me and irene will continue in her um in her in her current role so i just wanted to get those organizational uh changes out of the way first anybody has any questions on those very very happy to um um take them or um answer them privately if there's anything that you wish to ask either nicholas um irene or myself so i think just moving on then we'll move on to the results presentation um itself and if we can flick to the if we can fit to the first slide um i'm just looking to the first slide uh i haven't got the first sorry here we are now we've got the first slide um okay so starting with the starting with the nav performance we've got a total return now of 53.6 percent since inception uh with 60 percent of the original equity has now been has now been distributed uh nav nav per share is at four dollars 71 um as at the end of the as at the end of the quarter, after having paid the 0.135 per share in March. NOC equivalent of that dollar share, NAV per share, is about 43.5, so very much at the time on the quoted share price. The financial results for the quarter, total return was up 2%, revenue at $8 million, up slightly on Q4, and EBITDA at $3.4 million, which is quite significantly up on the $2.6 million from Q4. Main reason for the improvement is higher pool rates, but also during the quarter, much improved utilisation, not as much planned time off for the dockings, and we've got better operating cost performance as well. the company has declared a first quarter 26 dividend at the same rate of 0.135 dollars per share which will be payable at the beginning at the beginning of june on the current well on the prevailing share price at quarter end of 44 this represents an 11.5 percent per annum dividend yield and following that distribution we will have returned 3.1 dollars per share representing 62 percent of the initial capital now i suppose the interesting bit is really looking at the market and looking at the market rates during the first quarter the stst pool incomes represented an average of 16.4. That average figure is represented by a fairly steadily increasing rate from January through February through March, with March ending up at just under uh seventeen thousand dollars a day and that average is up from fifteen and a half thousand dollars a day um in the in in q4 the the chemical market and we'll come on to this in a bit um we'll come on to this in a in in a bit more detail in the market but clearly the chemical tanker market was much slower responding to the events in the Middle East that happened at the end of February than we saw in the crude market and the products market. And really, it was really getting into late April that we started seeing big increases in the freight earnings in the chemical market, whereas we saw it a lot earlier in the crude and the product markets. But we have seen this steady increase. April is closed now, just slightly under $19,000 a day. May, well, still in progress at the moment, but we have nearly 80% of May fixed already. And that's round about the 25 000 a day range and what we're seeing already for fixtures in june is higher than may at the moment but clearly there is a lot of um there's a lot of time and there's a lot of change can happen very quickly as we have seen over the last couple of months so we're going to see a very strong Q2 when it comes to earnings. We'll come on to that market bit in a little while to just try and explain some of the fundamentals as to why we are currently seeing this spike in the rates. We've always talked about and are very conscious of the supply side of the fleet. There are a high number of deliveries currently scheduled for 2027 and indeed falling into 2028 now. Equally, we have always seen and continue to see a very high degree of slippage, that is vessels not being delivered on their schedule timing, particularly from the Chinese yards that are now starting to come into this market much more than the traditional Japanese market where deliveries are almost to the day adhered to. The outlook, as I say, We are projecting a strong Q2 pool guidance from WOMA and our own research leads us to believe that if there is some resolution in the Middle East, that we're likely to revert to a high-teams, low-20 type of rate environment in the second half of 26 with slightly higher figures in 2027 as a result of reconfiguring of trade routes. So using our projections for the second quarter and 19,000 a day for the second half of 26 and 20 a day for 2027 we then have a 1.6 times dividend coverage in our 18-month uh outlook which is the rolling outlook that we use for dividend cover purposes which is very strong um just turning to the usual charts that we show you um that we show you here uh the The NAV total return index on the right-hand scale now showing the 53.6 uplift since inception. This is clearly prior to the dividend that we've just declared today, with 60% of the total capital being returned. The gap chart on the right is showing us very close, $473 versus $471. dollars um that's should yeah it does say dollars per share on the left hand side um that's dollars per share and as i say that 471 is roughly is roughly 43 and a half um krona per share which is actually slightly under today's today's trading trading share price um and the movement there being approximately two dollars increase in net operating profit just under a dollar increase in the change in vessel values, and then roughly three having been paid out as dividends. On the earnings side and the market, since the end of Feb and the commencement of conflict in the Middle East, we've clearly seen a large drop-off in exports out of the Arabian Gulf, and that's represented in the chart on the left-hand side by the light green or turquoise line. That's driven off the right-hand scale, and we can see the drop-off there starting towards the end of the period. The Atlantic trades are shown in the dark blue line, and we can see the upward we can see the upward movements there and that's running off the left hand scale which is approximately three times the scale of the of the right hand scale so don't get confused by the individual lines I think it's the it's the relative movements that are important but basically what we've what we've seen and as I say we saw this in the crude tanker fleet and we saw this in the product tanker fleet slightly earlier than the chemicals is a a lot of vessels being stuck within the gulf itself reducing supply of vessels fortunately stainless has no vessels that are in the gulf and womar pool has very limited number of vessels which are in the Gulf, and they are still actually being paid for those vessels. So the actual blockage itself has not negatively impacted stainless, nor indeed the Womar pool. But what we've seen then from a macro fleet perspective is a massive movement of tonnage westbound in some in the crude and products areas to africa but also but also predominantly to the us and the americas lifting chemicals products and crude from those areas and then transporting much much longer tonne mile distances to supplement a lot of the asian trades that were previously coming out of the persian gulf and that's why we're seeing this spike in rates large transit of fleet westbound predominantly ballast and now actually performing much much longer haul trade routes servicing what is being missed from the traditional middle east export market we can see on the right um the pool results at um 16.4 which was up quarter on quarter anyway the spot market's starting to rise late march into april and then continuing um to do so um and basically as i say that loss of loss of export volume from the um gulf is being more than made up by longer voyages um out of out of the americas um and the pool is very well positioned um with more than 20 vessels in the atlantic basin where we're continuing to see much stronger rates interestingly just just as a bit of an anecdote but we were just discussing this morning at our market market meeting we're seeing the us now exporting 6.4 million barrels up from up from four um we're seeing the atlantic basin for product carriers now spot rates in the region of eighty thousand dollars a day versus the pacific which is about half that so the atlantic basin at the moment for products for easy chems for mainstream chems is a very very strong market and that is predominantly where the womar pool is positioned at the moment so i think um the pool has got that has got that absolutely right um for where we are just now um just an update on geopolitics outside outside directly of the um um iranian uh conflict and And we've mentioned this before and shown you the chart in the top left. This is looking at the crude and the product, VLCCs, Suez Maxis, AFRAs, crude trades, LRs, MRs, product trades. The reason for this, there is a knock-on from particularly the MRs in the product trade into the chemical tanker trade, where we're looking at the percentage of the fleet currently under sanctions. The grey bars are the position in August 24, the light blue bars in August 25, and the dark blue bars are where we are today. So what we're seeing in the product sector, which, if you like, is the relevant one for us in the chemical tanker trades, is a steady increase in the number of MRs and MRs, which are under-sanctioned, 16% of the total tanker feed. sanctioned as at the end of February when you add to that 10% of the fleet which is stuck in the Persian Gulf as a result of the closure of the strait we now have about 25% of the tanker fleet essentially unavailable for what we would classify as legitimate commercial trades so the The war and the sanctions are pushing a smaller pool of vessels into compliant trading, and this is another of the reasons why we're seeing this spike in rates. New building deliveries. We've just shown here a chart to give you an idea of this slippage factor, bearing in mind that the right-hand scale is increasing negative as we come down. What we're seeing there in 2025 is a large slippage number coming through there. Nearly half of the vessels that were planned actually not coming out in 2025. That will roll over into 26 and consequently it rolls over further and i think we will continue to see this as we see newer chinese yards trying to get in to the chemical tanker um new building new building space so i think although some of the order book figures may appear a little bit scary we need to be very cognizant of the slippage factor that will occur i also just talking about the supply side we also need to be wary that clearly in an improved freight rate environment there is less propensity to scrap so although we have an aging and an older global fleet of chemical tankers which one might naturally assume were starting uh where scrapping was starting to increase clearly if we're in a 24 25 26 000 a day freight rate environment uh we're not going to see a whole lot of scrapping um having said that it always comes at some stage so although it may not come when we actually plan it because of a favorable rate environment it will come um it will come eventually and we repeat on page eight the normal chart that we have on net fleet development um which is showing which is showing a fleet growth high in 26 27 um i think in reality We need to blend that, as I've said before, over the three, four year projection period, because there will be significant slippage. And you can see from the historical fleet growth figures that what we've seen since 2021, etc., is more likely to be extended on that same trajectory rather than the extreme jump up that the order book figures currently show for 26 and 27, and average out round about 4% per annum over the forthcoming three years. We've had 11 vessels delivered so far in 2026, and the order book is currently about 16% of the global fleet in our segment. so that's looking at 10 to 25 000 um deadweight deadweight um deadweight tonnage um to say with the order book one has to always look at how long the order book is to work out what the average per annum deliveries are and clearly as order books grow and extend further um you're dividing that by a greater number of years and indeed although we're showing here only through to 2028 we were discussing yesterday in oslo at the board meeting of some chemical tanker inquiries for new buildings actually being quoted beyond 2030 for delivery time so as i say the large large percentage in the order book but it is spread over an increasing number of years and matching as i say on average in our view round about four percent per annum which is in line with long-term compound average growth rates in demand we continue to see growth in exports from um the atlantic basin um and as i've mentioned already supply restrictions from the conflict and the war um in um iran and we i think one of the one of the longer-term consequences clearly if there is a resolution to the situation in the strait it's not going to impact um trade immediately i think things will the migration of stuff to atlantic basin will then have to remigrate back, which itself will most likely cause another spike in rates before the situation normalizes. But our view at Tufton, as with the Russia-Ukraine conflict, is that this issue with the strait is going to call into question energy supply security for a whole lot of different countries that haven't previously been impacted particularly here major asian um major major asian importers and i go and we reckon that some of the longer and increased trade routes will actually be maintained in order to maintain energy security in the same way that we've seen um oil product and gas situation change permanently we think from dependency upon Russia that there is going to be a change in dependency on some of the Middle Eastern exporters that people will be looking for alternatives which inevitably will lead to longer cargo passage so we are cautiously optimistic about the future. So with that I'm going to pass over to Irene who will take us through the detail of some of the numbers.
Overall the quarter reflects an improved operational and financial performance. operationally all vessels traded within the rumor pool achieving a stronger utilization just over 93 percent up from approximately 86 percent in the in the previous quarter this reflects the return to normalized operations following the completion of the previous quarter dry dockings, and despite the scheduled dry docking of Barboni. Importantly, the Barboni completed its fourth intermediate survey on time, and at a cost of $1.26 million, which was below the budget of $1.3 million. With the completion of the Barboni, we don't know whether the dry docks are scheduled for 2026, with the next Tridox scheduled in the first quarter of 2027. On the financial side, revenue increased to $8 million, compared to $7.3 million in the previous quarter, with net pool TCE averaging at $16,4,000, compared to $15,4,000 per day in the previous quarter. This resulted in an EBITDA of 3.4 million increase compared to 2.6 million in the previous quarter, and mainly reflected the higher pool rates, the improved utilization, and the lower OPEX, partly offset by the higher SG&A cost. The company overall recorded a net loss of 57,000, significantly lower than the net loss of one million the previous quarter. Moving on to the balance sheet, at the end of the quarter, unrestricted cash balance was at two million. Fleet book value at 86.9 million with an fleet market value and changed to 98.8 million. This reflects an app for the quarter of 63.6 million or equivalent to 4.71 per share, with LTV dropping to 37.5%. As for the company's dividend policy, the 4Q dividend was paid in March, with the company declaring a dividend of 13.5 cents per share for the first quarter of 2026 and payable on or about 1st of June. Since IPO, and including the dividend payable in the next few weeks. Total return is 3.10 per share, which is equivalent to approximately 62% of the initial capital raised. With this, we conclude our presentation and we can move on to any questions.
Okay, so just before turning to the questions, I just wanted to comment on the outlook and the forward strategy of the company. And we discussed many times before the aging fleet that we currently have and when the appropriate time is to be looking at asset disposals. um clearly with the market the way it is today and i think that since we last since we last spoke clearly the current situation was not an expected uh situation we need to take advantage of this exceptionally high um freight rate environment that we're currently in having said that we are very cognisant of the dry dockings, the forthcoming dry dockings that we have starting in Q1 and Q2 next year. So our view at the moment is that the disposal timing is likely to be in the latter part of this year to commence the disposals of the older vessels as they get closer, as they get closer to their fourth special survey, but trying to take as much advantage as we currently can of these extreme high freight rates. And just take into account there that basically, $25,000 a day is $17,000, $18,000 a day net, which is more than a 30% yield on the current valuation of our typical vessels. So that's an opportunity not to be missed at the moment, to significantly write down the overall investment. So we need to get this balance right from a timing point of view of taking as much advantage as we can of these current extreme rates, but as I say, being wary of the ageing of the ships and the forthcoming cost of the four special surveys, uh any cap one surveys and indeed the time off uh that is now required to do these increasing laborious tasks that in the last ships we've had in have been taking 30 to 35 days off so it's a big it's a big um it's a big loss of earnings period as well as a high capex period so we're very conscious of that and we've been discussing this with the board uh yesterday and we will put going to plan forward within the next couple of months when we're seeing how things are developing in the Middle East. I think Irene is just, I know you know the answer to the question, but there's a question there about the SG&A and what appears to be a very dramatic increase in the SG&A cost, but it's quite explainable, I think, isn't it?
