The Great Eastern Shipping Company Limited (GESHIP) Q2 2027 Earnings Call Transcript

Good evening, ladies and gentlemen. Thank you for standing by. Welcome to the Great Eastern Shipping Company Limited earnings call on declaration of its financial results for the quarter ended 30th September 2026. At this moment, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. I now hand the conference over to Mr. Shivakumar. Executive Director and CFO at the Great Eastern Chiving Company Limited. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for attending this conference call, this quarterly conference call. We have kept it a couple of days later than usual because we were told that a lot of people will be out for the long Diwali weekend. So, you would have had time to take a look at our results and our presentation as well. Nevertheless, I will take you through the presentation quickly and then we can jump straight into Q&A. Standard disclaimers apply. Another very profitable quarter, slightly lower than the previous immediately preceding Thank you. The NAV is at its highest level and the interim dividend has been maintained at the previous quarter's level of 14 rupees 40 pesa per share for this quarter. I won't go too much into these numbers. Let us look at what the markets have done. First of all, looking at the SuezMax earnings, the one caveat I will put, while it shows earnings spiking to $600,000 and $700,000 a day, you need to keep in mind here that this includes some routes that get a huge risk premium. Because they involve physical danger to the ship's cargo, the ships, their cargos, and their crews, this is, there are two specific routes. One is loading from inside the Strait of Hormuz, that is loading from either Iraq or Astonura or from Abu Dhabi. And the second is loading from the Black Sea port of Novorossi. which again has seen several attacks from Ukraine. This is a Russian port where oil is loaded. While the oil itself is not sanctioned because it is not Russian oil, it's But a lot of ships have been attacked while waiting to load at Novrosis or after they have loaded there. So, those two loading areas get a huge premium, which of course, we do not participate in. And therefore, that number is spiked because of the big premium, which is attached to those loading areas. Without those, the average SuezMax earnings would probably have maxed out at about $350,000 to $400,000 a day on the spot market. This was about a month ago, maybe in early, very late September or early October, when SuezMaxes were at those levels. In the last 10 to 12 days, rates have dropped off very significantly for crude tankers, specifically for Afromaxes and Suezmaxes. Suezmaxes, the rates that we are talking about 350 to 400,000 at the peak a month ago are currently at about 130 to $150,000 a day. Still very high numbers in historical terms and even in comparison with last year, but they come off a lot and every day we see these rates coming off by 15, 20, $25,000 a day. This market action was caused by the renewed traffic through the Strait of Hormuz. So, there are now, there is now a standard process where there are some ships which are just doing what we call a shuttle service, they load inside and come outside, they discharge into another ship which then takes the oil to the ultimate destination. So these shuttle, the ships which are doing the shuttle earn a huge premium. Okay. What? Happens because of this is that the entire supply chain has become very inefficient. Typically, a Middle East to Far East voyage takes about 45-46 days on a VLCC. This shuttle process, because you have to load twice, you have to discharge twice, the ship is loading inside, coming outside, then offloading to another ship. And that adds eight to nine days on average to the voyage time, which is an 18 to 20% reduction in efficiency. And that resulted again, when efficiency gets reduced, the market becomes tighter and therefore rates spike. So that's what we saw last quarter, which is this happened in August, September, and up to early October. Now, product tankers took some more time to react. So, now they are at an MR tanker is probably around $50,000 to $60,000 a day, where we had, again, we had a shortage of diesel, we had diesel crack spreads going up a lot. And therefore, this trade continues to be reasonably strong. It has not yet faced. The kind of correction that we saw in the Suez Maxes and Afra Maxes. Looking at the order book, we are, the order book is pretty high for crude tankers, it is about 22% for the product tankers. On dry bulk, it has been nowhere near as exciting as in the case of the tankers, but it still Still has been at profitable levels. Coal trade has grown a little bit, the INO trade has grown, bauxite continues to be strong. And therefore, the ships continue to be earning at reasonably profitable levels. Cape sizes which were at around 40,000 in September have now come down to the 30,000-ish level, 30,000 to 35,000 level. So it's come off a little bit, but again, higher than it was in the previous The prices across the board have gone up, so bulk carrier prices are probably up 5-10% during the quarter. Tanker prices for the large crew tankers, the Suez Maxis, it probably gone up 50% in the last quarter, which is reflected in our net asset value for the smaller tankers, probably Keep between 5 and 20 percent depending on the vintage of the fleet. Coming to LPG. LPG, of course, all of our ships are on time charter, but these are the spot rates. The spot rates have been exceptionally strong, again, because of the disruption. So basically, the oil, the LPG is not coming out so much from these through the Strait of Hormuz. And this is being sourced from the US, which is, of course, a much longer ton Um, my, uh... And this is led to a tightness in the fleet. So, we are seeing spot rates at about $140,000 a day in H1 versus $55,000 in the same period the previous year. Again, I must emphasize our shifts are all on time charter, fixed rate time charter except for one which has a profit share built into it. I mentioned already on asset price movements, you can see that almost vertical line in crude tankers and you can see everything else is moving up quite gradually. LPG also saw a big spike. The order book continues to be solid. LPG is now almost 40% of the fleet. The order The book is almost 40%. As I said, crude anchors 28%, product anchors 22, and dry bulk also starting to take up. So we are now at almost 16% of the existing fleet. This is year wise, we won't go too much into it. Scrapping, of course, logically, you would not be scrapping ships when earnings are so high. So earnings have kept scrapping to very minimal levels. Typically, the tankers which have been scrapped tend to be those which have been sanctioned and are very old. And therefore, because they don't have an opportunity to trade and take advantage of these markets, they just opt to scrap the ships. Coming to the offshore business, jackup market utilization remains quite decent. Of course, there is some turmoil in the Middle East about contract suspensions, rigs put on standby, etc. But not much change in the jackup utilization.

Won't go into this.

This is a standard slide on the age of the fleet. We have repricings. Here we have a couple of updates. We have got two contracts in India, three year contracts for two of our rigs. So, those now show and on the extreme right of this graph as the two rigs which next need repricing These two rigs will go on to their contracts in the next six months. And we will be employed all the way up to FI 30. So, we only have one rig left now for which we need to find employment. Apart from that, we also have 8 vessels which are up for repricing. Four of these have been bid into tenders in India. We await the outcome of those tenders. These are general overviews. I will just, yeah, we have added in the last quarter, we only did two transactions. One is we sold our 2009-bit LR2 tanker Jaglokish. We replaced with a more modern LR2 tanker Jaglokishman. So that is a transaction which was done in July, a set of transactions which was done in July. After that, we have added... Two vessels in the last week, that's one Kamsar Max, the Jag Amit, which is 2015 built, and the Jag Vikrant, which is a very large gas carrier, which is also 2015 built. The Jag Vikrant comes with a charter attached, so she is on a fixed rate contract. For almost three years, this goes up to around September, 2029. So again, she will not be participating in the current spot market. She has no pricing points for the next almost three years. Apart from this, we have two more vessels where we've committed. We have a CancerMax bulk carrier, which again will be delivered to us within this month or the next month. This is a 2019 This is a 15-bit bulk area. And we have a new building SuezMax tanker which will come to us in about two years time, a little over two years time. You can see what happened here, I just focus on the TCYs, you can see what happened here between Q1 and Q2 and while the shipping profitability came down a bit. We had average. TCY about $93,000 a day for crew carriers in Q1, which came down to about 73k. The big impact was felt by the Afromaxes, which were averaging about 80, almost $85,000 in the first quarter, and that came down to about $50,000 in the second quarter. So, that's mainly what dragged down from these DCYs. Product tankers as well came off quite a bit in the quarter from 45,000 on average to about 32,000. LPGs the repricings took our rates up slightly from 41 to 46 and dry bulk again was a small improvement from the previous quarter. But the big down was from the crude and product tankers in the in Q2 over Q1. We have done two time charter transactions, and this is something we had generally tended to operate our crew tankers, our SuezMax tankers on the spot market. In the last quarter, we have tied up two of our SuezMaxes on one-year charters each. So they have gone on to the charters in September, August, September. And so those will be out till, one of them is an in charter ship, one is an owned ship, both of those are locked in now till August, September next year. But otherwise, we had one LR2 tanker as well, which we fixed out on charter in July, the Jag Lakshman, we took delivery and fixed her out on a one year charter again at a very profitable level. So, she We've also been fixed on Charter. As I mentioned, the LPG carrier that we took delivery last week also has a charter attached That's why it goes for three years. Yeah, I think nothing else really to highlight. We have the usual slides here, but we are happy to I think we will straight away go to Q&A. Thank you.

Thank you very much. We will now begin the question and answer session. To ask a question, please click on the Q&A tab on the panel and click on the raise hand icon button. The operator will announce your name when it's your turn to ask a question. Please accept the prompt on your screen, unmute your microphone, and proceed with your question. Ladies and gentlemen, we will wait for a moment while the question clears up. First question is from Nanook Rajesh Chen, individual investor. Please go ahead.

Yeah, thanks for the opportunity. Sir, congrats on a great set of numbers. So my first question is, when the rates had spiked in September and early October and they were close to all-time highs, right, for crude especially, right, why did you not fix more of your crude and product tankers on time charter for two years? So you mentioned that you have fixed two of your ships on one-year charter and after that one is in charter and one is owned, right? So, what was your thought process in not fixing more shifts on time charter for longer duration, even if it was 25% below the spot rate?

Okay.

Unfortunately, the rates that were available, it's a good question. The rates that are available in the time charter market were at a very, very big discount to the spot rates. So, for instance, when rates were at $300,000 a day in the spot market for a SuezMax, the two-year time charter rate was probably around $60,000 or max $70,000 a day. So, the discount you have to take to fix on time charter is 60% to 70% at least. So, it was not available at a 20% discount to the spot rates. That only happens in weak markets, where you will get closer to a 20% discount. In not a weak market, you will get it in a market which is normal strong market. Let's say at a $45,000 spot market, you could possibly get a $35,000 two-year time chart, but not in such a, in a In such a hot market as we saw in the last three months.

Okay, sir, if you were to fix, let's say, more of your ships at today's time charter rates, how much, theoretically, how much of the pad could you lock in for the next two years if you were to fix it at time charter? Would you be able to, let's say, lock in pad of close to 2,000 crores or that number is, you know, I mean, much lower?

Much lower, much lower. So, you will not be able to get, okay, couple of things here. Some of the ships cannot be fixed on time charter. The ships which are very old cannot be fixed on time charter. So, say if you have a MR tanker, which is 18 or 19 years old, it cannot be fixed. It's very difficult to fix on time charter except by discounting a lot.

Okay.

So, your, but in this market, you cannot lock in these returns, these rates by fixing out. Because then that, at least not in this market, then you need a much stronger market, spot market, to be able to lock in these numbers. So, for instance, we have averaged $75,000, right, for the, for the root tankers. In order to make that $75,000 per day, then you can possibly log in for the SuezMax tanker for... At the top of the market, you could have locked in a SuezMax tanker at that number for two years, but certainly not an AfroMax tanker for that period. So you can't lock in. So if I'm reading your question right, you're saying, can you have, could you have made this profit, sort of, could you have created this base of profit just by fixing out and assuring yourself of this level of profit?

Answer is no. Okay, but, but even then why did you choose to fix only one Suez max because you do have 3 Suez maxes, right?

We have 3 owned plus 1 in chartered. We fixed 1 owned and 1 in chartered. So, we fixed 2 out of our 4 Suez maxes that we run. So, 50% of our Suez max fleet is, is fixed.

Thank you, Rajesh. I request to come back for a follow-up question. Next question is from man of Amit Keta from Laburnum Capital. Please go ahead.

Hi, am I Audible?

Yes, Amit, you are Audible.

Yeah, hi. So, my first question is, you know, this is the new Swissmax, new build that we've taken, right? This is Mark's significant departure from what we've done historically. Just want to get your thoughts on this. Does this 50-letter management becoming a little more constructive in terms of doing more JPEGs on the tanker market or? Is this just a replacement kit where new build has become cheaper relative to say the older tankers which have moved up much more?

Yeah, a little bit of both. So, this is because we saw very high numbers on the second hand ships. It is also getting looks like it is It's going to be a little difficult to replace. Shifts for the next year or two, especially because prices have just gone to such high levels. We also saw a little pocket of value in this particular ship and therefore, we decided to go for it. The, this is again part of portfolio construction, our ideal is to buy second hand ships. And we have a couple of other ways, where, you know, where we would be able to maximize bang for the buck by buying say a 5 to 12 year old ship in the weak markets. We also recognize that it may not be possible to execute at those levels. So you need to have a core of say, very modern ships like new building ships. And so this is just a move in that direction. I just want to see you also want to see, again, price increase being and I want to see you as a short term.

Is it the best market for your market?

Well, I know that price is relatively high and I think you're going to use the market So, more than expect market price to remain strong, it is probably an expression of our view that we may not be able to deploy all our capital when the prices, even when the prices are weak. Because, you know, the cash generation which is happening because of the And if we have to deploy all of that capital in the secondhand market, as I said, in those vessels which give you fantastic IRRs in an Excel sheet, you know, we are sort of recognizing that you may not be able to deploy, and we need to deploy in excess of a billion dollars in ships. So, we are just doing this as a little bit of insurance in case we are not able to buy those cheap ships. But this would meet a... Sorry, go ahead.

No, I just wanted to confirm this would meet a hurdle requirement in terms of IRR based on whatever median rates we use in terms of determining the minimum IRR we need.

Yes. So, a couple of things here. Maybe not, it will come close to it, not strictly so possibly, but it will form that base where you can, you know, you have much more optionality where you can lock in charters and things like that because it's such a modern ship. So we believe that it will turn out to be a decent investment.

Thank you. Amit, I'll request to come back for a follow-up question. Next question is from Lano Vijaykumar Subramanian from Trustline Holdings. Please go ahead. Vijay Kumar, may I request you to unmute your line and proceed with your question. Vijay Komarapagin, can you meet your line and proceed with your question?

Yeah, just one second.

Can you hear me? Hello? Can you hear me? Yes, I can hear you.

So, actually in the earlier today morning interview at CNBC, you were referring that the current shipping prices are at elevated levels and that is captured in the net asset value of your currently. So, what do you think if the NAV, if you consider the pre-war level, what would be the fair value of the NAV you should consider?

Sorry, when you say pre-war, this is pre-Iran war, because there are a couple of wars going on currently.

Yeah, yeah, Iran war, yes, yeah.

So, the Iran war, so, if we.

I will give it to the power, you can say.

Yeah, sorry. So, beginning of this year, January By 2026, right? Yeah, yeah. So, if we priced.

Thank you very much.

So, this is that is basically for the crude tanker that does not happen so much for the other vessels. So, the example I gave was for a Suezmax tanker. It is not happened so much on the other sector. So, the crude tanker has seen the most, the larger crude tanker Suezmax and BLCC has seen the most spectacular rise in prices in this last 3 to 6 month period.

That's my question. Thank you.

Thank you. Thank you very much. Next question is from land of Rajakumar from RK Invest. Please go ahead.

Yeah, good evening. Can you hear me?

Yeah, good evening. I can hear you loud and clear. Yeah, thank you.

Thanks for the opportunity. Sir, the first question is, I see that the flight turnings have softened Q&Q, but you're saying the asset prices have moved up. So, just wonder what is the disconnect?

Yeah, so this is just the normal leads and lags. So, let's just take the crew tanker again because it's the most extreme example. The crude tanker freight rates started strengthening significantly from around the middle of August, let's say beginning middle of August. The earnings, typically these are 45 to 60 day voyages. So if you fixed a ship on 1st of August, typically the voyage would go on till sometime in September. So, the earnings that you are seeing of... July to September will be the spot markets up to maximum 15th of August, let's say, okay. The prices of the ships are influenced by the spot rates including of September. If the market has spiked in September, the freight markets, those rates will be seen in the subsequent Second quarter P&L. However, the ship prices would already have reacted to those freight rates. So it's just that timing thing because you fix a voyage, you perform that voyage and that comes into your PNL over the next 45 to 60 days.

Okay, got it, sir. Yeah, I understand. I understand what you're saying. Yeah. Okay. So the second question is, I see that company, the PSU company like IOC is pouring into shipping. They've asked for tenders, you know, for purchase ships. So do you think when a non-serious player like IOC is getting into shipping, is it a, is it a, I mean, is it something that we can call that the shipping industry is speaking or the shipping cycle is speaking?

I would not call them a non serious player. They are one of our customers.

From a shipping standpoint.

Yeah, so non shipping player. I think so I think there are different strategic considerations what is also happening and let me make this into a bigger picture thing. I think beyond the, you know, beyond finding the efficient way to do things. The world is moving into a situation or has been shaken so much that you say that I want to move from just in time to just in case. So for instance, we India used to import maybe 90% of its LPG from the Middle East because it is the most efficient way to efficient route. You reduce the freight to the minimum possible, and it was most efficient. The issue which happens is, if you have a situation like today's, then suddenly you don't have supplies, okay? Therefore, you have to now start hedging, even if it means that you find the, you are not able to do it in the most efficient possible way. Even getting into shipping sometimes for an end user. Today you will find, and not just today, over the last two months, The Middle Eastern oil companies, these are the producers and exporters of oil, have bought a huge number of either crude tankers or LPG ships, because again, they want to control their supply chain. So I think, of course, IOC started talking of doing this maybe several months before that. But this is sort of the direction in which we are heading where everybody is looking And welcome to the call. to protect their supply chains rather than just finding the most efficient cost efficient way of doing things. Okay. Got it.

And lastly, on the buyback, I think you, I mean, we have almost done with the 75% of the minimum threshold requirement. Given that the shipping cycle is kind of peaking, and I hope the share price will also be volatile go forward. So my request is if you could slow down your buybacks so that if there is any significant fall in prices that can be cushioned, so the long-term investors are protected.

That's our intention to complete the buyback as soon as possible. And because we see it, see the way that we looked at it is we put a peak, we put a cap of 1,530 because we felt that is a reasonable price to buy. And this is the same approach where, and again, I'm taking it on a slightly broader philosophical level. Where you look at, say you want to buy a ship and you find the $35 million for that ship is reasonably cheap, but it could easily be $32 million in three months time. So are you tempted to hold out for that $32 million, which is a better price? I don't think we should do that. So we think this is a good price at which to buy and we will buy and our intention is to complete the buyback and we will, you know, who knows what happens to market. But, yeah, our intention is to try to complete it at the earliest.

Okay. Got it, sir. Thank you so much. Thank you.

Thank you. Next question is from line of M. Manishwapadhyay from Stead4Investments. Please go ahead. Hello.

So, happy Diwali to everyone. Great results. I had a question I was going through two months back on the annual report. Okay. And one thing in our chairman statement, we have stated that most of our newly acquired ships have overseas registrations and flags. What does it mean? Are they bought in foreign subsidiaries and how does it impact the business?

Will it also lead to change in transaction?

I will just complete the question. Are they bought in and how does it impact the business? Will it lead to any change in the taxation for the company? So, some clarity on all these aspects will be helpful.

Yeah, yeah, thank you. It's good that you asked the question because, I mean, it's probably not clear to a lot of people. And this gives us an opportunity to clarify. So, there is a provision where an Indian shipping company, that is an Indian shipping company registered in India, the company, can own ships under foreign flag. This is something which came about 10 years ago, before that it was not permitted. An Indian shipping company could only hold ships under the Indian flag, and if you wanted a foreign flag, you needed to set up a subsidiary which would own those foreign flag ships. This provision came in 2014, and we have taken advantage of it, there are operational reasons and there are tax reasons for this, and the tax is related to indirect tax, not direct. The operational reason, the main operational reason is that we are under Marshall Islands flag for all of these foreign flagships. The Marshall Islands flag offers a, has a better reputation internationally. Some of our customers, and you know that. 80% plus of our ships are working in the international market. And they prefer to have the Marshall Islands flag because it leads to minimal disruption at ports. And that is why we have opted to keep those ships under the foreign flag. So, they continue to be owned by Great Eastern Shipping Company, Mumbai. And operated from here. It's just the flag is different.

Okay. And any preference, let's say, historically, Indian oil, large companies would prefer Indian companies, Indian ships or Indian flagships. So those things remain the same or is there any change in those? I'm sorry. Yeah, good. Good that you asked that.

So, in line of preference, we will be below an Indian owned Indian flagship. So, we will be below that level in preference when it comes to say the right of first refusal for an Indian customer's business.

However, we are okay with that. We have weighed that also in the decision.

And we are okay with that. So we are second in preference for Indian business vis-a-vis an Indian flag.

Okay, and the taxation will remain the same means on these? Tunnage tax.

Yeah, yeah. So, tunnage tax applies. So, in fact, we pay Indian tunnage tax on these ships as well. Because, yeah.

Okay, yeah, thanks on that. And one more thing, on the offshore side, if I look the previous PPT, okay. There were 4 offshore vessels reprising in first half FI 27 and 4 in second half FI 27. But in this quarter PPT, it is now all 8 vessels reprising in second half FI 27. Yeah. So, was there some extension in previous contract or delay in getting these?

No, we did short term contract. Yeah, we did some short term contracts which come through in which get over in the second So, the four which were originally to be repriced will have to be repriced in the cycle, they continue, but the four which were to be repriced in H1 were put on to short term contracts which then come off in H2 and therefore, we will need to find further business.

So, what were earlier 4 shifts in second half to go, there we have already got the tenders means what you were trying to explain in your comments, we have been

into tenders we have not got the awards yet.

Okay, okay. And one more thing, the coverage days what we give in the slide, okay.

Yes.

Is it at the end of, let us see the quarter, so 30th September status or is it as of the result day status? This is as of last week.

Yeah, this is as of last week. So, after 30th September status. No, but it is.

So, let's say when you give the crude carriers coverage of operating days, this is I think slide 26 or 27, where it is 58% of it. So, it means as of 1st October, the status was 58% were revenue days were covered for the Q3 FY27. Yes, yes. Okay, so now it would be much higher. That's right, it will be much higher.

That's right.

Okay, okay. Yeah, for further queries, I will join back in with you. Thanks.

Thank you very much. I request to all the participants kindly limited to questions per participant and rejoin for the follow-up. Next question is from the line of OJ Singh, individual investor. Please go ahead.

Thank you. Hello. Hi. Thank you for the opportunity. Are you guys able to hear me? Hello.

Yes, I can hear you loud and clear.

Yeah, thank you. So I just wanted to ask you this. So we hold about 8,500 crores of net cash on our balance sheet, right? And even if we discount the asset value to the values that we had, say, in January by 250 that you guys just mentioned, we discount it, it becomes like 2,000 is the NAB right now, 2,900, something like that. That becomes the NAB. So can we not do a buyback again? So once we complete this buyback, can we not do a buyback again so that we capture long-term value instead of giving dividends like a 14, 14 rupees dividend? Because it creates a tax track. Don't you think there's another way of deploying capital and then getting long-term value out of it?

Yeah, so couple of things here. One is the regulatory aspect of a buyback. The one of the reasons, and when I spoke to the one of the previous callers, I said that our intention is to complete the buyback at the earliest. You cannot do another buyback for 12 months from the date of closure of the previous buyback. Okay, so your clock starts from the day you close the buyback. Okay, and that's why our intention is to do it as early as possible. So for the next 12 months, we are out in any case from whenever we close this buyback. So that's what the second is I want to clarify the decision to do a buyback is not one of returning money to shareholders. It is a capital allocation decision. We are doing a buyback as a way to buy our own fleet at a discount. Okay. So we are looking at it not as a replacement for buying ships, not as a replacement for dividend, but as a replacement for buying ships, because we are getting ships at current values at a discount. So that's one. The dividend we pay because we have shareholders who will not offer and we have a lot of loyal shareholders who will not offer their shares even in a buyback. They hold the shares and they held the shares for decades. And we believe that we still owe it to them if you are making a profit to pay a dividend. So we will continue to pay a dividend.

Okay, I just had that question, because I thought that giving everybody, because any which ways, I think a large, your

calculation is very logical, that it is more tax efficient for a large shareholder, it is more tax efficient to tender in a buyback. But we found that it's not everybody who's tendering in a buyback. It is some of our shareholders, they've just held for many, many years. And again, because for us, it is not a dividend decision, it is a capital allocation decision that we just think about it differently.

Okay. Okay. Thank you. I just had this one question. Thank you.

Thank you. Thank you very much. Next question is from the line of Beneet Banka from Namora. Please go ahead. Hello, Beneath? Beneath, may I request to unmute your line and proceed with the question, please?

Hi, am I audible now? Sorry. Yeah. Yeah. Yeah.

Yeah.

Thanks for the opportunity. I had a question on the immediate fallout of the, say, the, what between the USD run gets completed somehow in next one quarter. So, what will be the immediate fallout in terms of crew tanker rates? So, with a lot of ship to ship transfers happening, a lot of inefficiencies haven't created and it will go away. How will the 10-mile demand be impacted, especially for the food tankers? And will that be offset by, say, some of the shadow carriers and sanctions vessels going off the market, which probably have been used in the state of Hormuz? Yeah, and is there any meaning to scrappage of tanker that will offset the lower tonne mile

Yeah, so yeah, so this is a complex situation and thanks for your question. This is something that we think about all the time when we are planning. So, the first impact of a cessation of these hostilities, let us assume you just go back to where we were in Jan Feb before This entire thing started, okay? Immediately, as you said, the inefficiencies get knocked out and you get back to the market that existed before. Now what was the market that existed before? The market that existed before was the Suezmax tanker in early February was earning 70 to 80,000 dollars a day. So it was a strong market going into the war itself. We already had a tightening going into the wall. Therefore, you will have a strong market, obviously not as strong as it is today. Today, you are still even after the significant fall in the last two weeks, you are still at $130,000 to $150,000 a day in the spot market. So, profitability levels will come down, but still at significantly higher numbers than we saw a year ago. Okay, so that's why. That's the first impact. The second impact is this. What happens if you're going back to January? What has happened to the world since then? We have drawn down from inventories to consume because we were running, we just didn't have the oil. The oil was not coming out through the state of hormones for at least three months, and we have drawn down from inventories. People will replenish those inventories and there will still be a lot of demand for ships. To be carrying crude oil out of the Middle East to all the importing nations. So you will have that demand coming through. You will, on the other hand, you need to think about what happens to the shadow fleet. Now the shadow fleet, what can happen to it? What are the contours of a US-Iran deal? Does it involve Iran coming out of sanctions? If it involves Iran coming out of sanctions, then that comes into the broader tanker market. Today, those cargoes which are coming out of Iran, of course, there are no cargoes coming out of Iran for the last three, four months, but The cargoes. Which used to come out of Iran were never carried on ships like ours. They were carried on a dedicated fleet of ships which were under sanctions. Either the Iranian tanker company had them or similar sanctioned entities. And that's what you have referred to as a shadow fleet. If Iran comes out of sanctions as part of the deal, that means Iranian oil comes back into the main market, which means we can access ships like ours, and that is the legit trade can access those cargoes, which means this market expands the sanctioned trade market contracts. Which means those shadow fleet ships which are too old to trade in the main market will probably get scrapped as you mentioned. So it's complicated, it depends on how the deal is actually written. If it is written as, just to summarize, if a deal is done which says Iran is free from sanctions and therefore can participate in the overall oil export market. That means that all of us can do that trade, the legitimate tanker trade increases in size because Iranian cargoes come there, the shadow trade becomes zero, at least the Iranian trade, which means that those shadow ships, which are 25 years old, lot of them are very old, then just have to be removed from the fleet and will get scrapped. So, You could have the short-term impact of a deal could be that, obviously, it comes down from these very frothy high numbers, but still remains at reasonably firm levels for some time to come as countries start building up their stocks, stocks of oil again, which they have drawn down in the period between March and say August, September.

Thanks, sir. And just to follow up on this, so... When we compare it from, say, February till now, there have been a lot of built-up in the order book also. So, order book currently, I think, is about 28% for crude tanks. And I'm not sure what is the number for shadow fleet in terms of percentage. And will that be enough to offset the strong order book that we're going to see over the next couple of years? And if not, the rates for levels probably have to come down significantly because of the supply demand mismatch.

So, the we used to show this another slide before which is proportion of fleet which is more than 20 years old for crude tankers that used to be 20 plus percent of the fleet being more than 20 years of age and 20 years is where a normal crude tank under normal markets a crude tanker would stop trading in the international market. Okay, so that fleet in a weak market will tend to get removed. But coming to your question on what can happen with the new supplies of ships, the supply of ships and this 28% order book is fairly rear-ended. So you have of the 28%, only 7.5%, which is coming between now and end of 2027. Most of it is coming in 28, 29 and now pushing into 2030 as well. So, it is fairly rear ended. This is not an immediate threat for the market. The immediate threat for the market is really the if everything becomes peaceful again and everything moves back to operating efficiently. So, the supply we don't believe is a major threat here of new ships. It's more on just the normalization of the supply chain.

Just last one, and why, so you said, you said the headline, day rates for Suzymex are very high around 7,700 dollars, 700k dollars. But for your route 3 operate the numbers are much lower 350k kind of numbers. So, because Jesco does not operate in those high risk areas. So, may I know what is the reason Jesco does not operate in two routes which are high risk because I think insurance is covered by their clients.

So, yes, the issue is not insurance. Finally, we think about the crews. We have our crew on board these ships. And we cannot knowingly send them into a situation of danger. Most operators in the world are like us. There are very few who are actually doing that. And it's a personal choice that a ship owner makes. This is a choice that we made that we don't want to put our seafarers in danger of being attacked by a drone, a missile, whatever else it might be. So, again, that's just the approach we have taken. It's sort of similar. Our objective is not to take these kind of risks. For instance, Since 2022, February, when the Russia-Ukraine war started, we have not done Russian trade at all, though it is still legitimate at certain price levels, but we have not done it at all. There are a lot of European companies who still do that trade, but we just don't take that risk saying that we don't want to take even a 5% chance that we could get sanctioned. So these are just some risks that we don't take at all.

The NAV growth this quarter was very strong because September end prices are very high, now prices have fallen, so NAV growth this quarter could be negative because of the prices repricing lower.

We don't know, actually, whether prices have fallen. We haven't seen any transactions done for crude tankers. And this is mainly a crude tanker phenomenon, where the prices shot up in the last quarter. We have not seen any transactions in the last two weeks, so we don't know where it will end. I think it will be, it has to be significantly lower. But again, let's see. You know, this is... So, we have a lot of questions about the cash flow, but if you could get a significant drop in fleet value. Now, how that functions vis-a-vis operating cash flows that we have to see. Also, another factor is the exchange rate. So, we were at 95.5 in end of September. And now we are at below 94. So that's another factor in the NEB.

Thank you, sir. All the best for the next quarter.

Thank you, Vinny. Thank you. Next question is from Lanark Harish, individual investor. Please go ahead. Harish, may I request you to unmute your line and proceed with your question, please? Hi, sir. If you can hear us, may I request to unmute your line name and proceed with your question, please. Due to no response, we move on to the next participant. Next question is from the line of Rajesh Jain, individual investor. Please go ahead.

Yeah, thanks for the follow-up again. At what TCY have you booked the 60% coverage days for crude product and dry bulk for the December quarter?

I don't have the numbers offhand, but I think they would be a little higher than the previous quarter's averages.

Okay, so considering that, considering the lag effect of the voyages, right, which you mentioned, can we say that a significant part of the September fight spike will show up in the October to December quarter? Yes, that is absolutely right. Yeah. And because the spike was indeed very significant, can we say that the TCY, which you have booked at your 60% coverage days would be at least 20-30% higher, if not more?

I am not going to put a number to it, but yes, they are, they will be significantly higher than the previous quarter's rates. For tankers, just to clarify for tank, for crude and product tankers only.

Yes, yes, yes, I understand that. And as per my calculations, so even if I take your NAV, current NAV and subtract 250 to go back to the January fleet valuation, but I mean, it looks like, you know, that 2000 could be a floor for your NAV, right? Because if you reduce the 250 rupees and lead and come to 1950, and then there will be, you know, about 100 odd EPS for at least one quarter and then maybe strong 50-70. So theoretically or probability wise, 2000 could be a floor for your NEB for the next two quarters at least, right? I mean, if I understand incorrect, the way

you have done your calculation is 100% correct. So and this is the point that we keep making on the NAV, which is that the ship value translates to cash flows. So a large part of the NAV accretion actually comes from cash flows. Now, whether the drop in ship values will be higher than or lower than the cash accretion is anybody's guess. It's, you know, just to, it's not very, it's not a very low number in January this year. The ship prices were already really high. Okay, so... It's not sort of the low case for asset prices.

Sir, the government of India had a mission to save the outflow of freight that was paid to overseas shipping companies, and some estimates have put that number at $80 billion. I am not sure if that is right. So, how can GEship benefit from this vision of the government, and have you been in any discussions?

Yeah, so I have also heard this number. I think I have heard some $70 billion plus. The issue is a large part of the freight is actually paid on containers movement, is on the container movement rather than on the commodity movement, as is a commodity movement business. I don't think the commodity business, commodity freight rates are so high. Today, they might be pretty high for crude tankers, but I think a small part of it is commodities like the crude and LPG imports. We are participating in those to the extent we can. We are, however, we will participate in those when it makes commercial sense for us to do so. If we can, if we get a fair price for participating in this trade, we will do so. If we do not get what we think the ship is worth for a particular voyage or for a particular business, So, we are able to operate all over the world and we will take whichever voyage maximizes our earnings. We are happy to participate in the Indian business, the Exim trade. We do not participate in the coastal trade because that is some segment that we do not want to enter. But on the export import trade, we are very much there and willing to participate.

So, just one last question. So, for advanced bookings. Can the charterers cancel if the freight economics break before the cargo is physically lifted?

Contractually, no. This will lead to a contractually, contractually they cannot cancel. Typically the way it is fixed is that you fix on what is called subjects. So, let us say today we want to fix a cargo for loading on say 25th of November. So, we will tie up all the commercial details say today is 11th of November. The customer has two to three days, sometimes, sometimes it's just one day in which to confirm because they also have to get the confirmations from the loading area, the discharging port, the load port, discharge port, etc. So, you have one or two days to confirm. After that, when the deal is confirmed, then We are contractually obliged to perform, both sides are contractually obliged to perform that point. If they decide to cancel it, then it's a contractual dispute which will go into legal process.

Okay, sir, when you acquire a ship and it joins your fleet, are you able to, I mean, is there a time lag in putting the ship to use or you are able to plan in advance and and employ the ship immediately?

So we plan in advance. In some cases, it takes up to three to four days to do the change of flag to, you know, do everything because So, in effect, you have, your people have to familiarize themselves with the ship. So, this is, sometimes we have done it in one to two days, but typically this will take three to five days. But after that, the ship is earning. All right. Okay. All right, sir. Thank you.

Thank you. Thank you. Next question is from Nainu Falguni Dutta. From answer over financials, please go ahead. Malguni, may I request to unmute your line and proceed with your question, please? Welcome, everyone, and welcome to the question. G2 no response. We move on to the next participant. Next question is from the line of Rajesh Agarwal from Manior. Please go ahead.

Rajesh, go ahead. Can you hear me?

Yeah, you are very faint. Yeah.

Sir, my question is, you feel the last mile, the mileage will not come down, come down in the next six months, one year? Shipping mileage? Sorry?

Sorry, you mean the time? Sorry to interrupt, but you are sounding very distant. Can you come closer towards your microphone and talk?

Okay. Sir, do you feel the mileage will come down in the next six months, one year, the shipping mileage?

You mean the ton-mile demand, the trade pattern? Yes. If anybody has guessed what happens, see the latest impact has come not from a change in mileage, but it has come from the inefficiency of doing the shuttle service through the state of hormones. So the mileage has remained the same except that you are doing two load and two discharge versus one load and one discharge, and you have a waiting time in between. So, if anybody's guess what happens to this Iran situation really. So, you know, it's really tough to focus what will happen tomorrow also there.

And sir, when will our volume growth will come, not the pricing growth, volume growth, number of... Human capacity.

Yeah, it will come when ship prices come down to our levels. The tanker prices are not at our levels. So, we are not investing currently. When they come down to our levels, we will be happy to do this.

So, in next money, no capacity will come, additional capacity?

It depends on the, if the market gives us opportunities, we are happy to buy, we are ready to buy every day. So, if the market gives us the price that we are looking for, the ship that we are looking for, and the price that we are looking for, we will execute.

But it will be a second-hand ship, it won't be a fresh ship, order ship.

Yes, if you order a ship, you will only get it 3 to 4 years from now. So, what we are looking for currently is, you know, when we are looking at prices, when I am talking about getting the prices, lower prices, I am talking about second-hand ships.

Okay. So, what is your experience in the order, the shipping orders, you feel it is on the higher side or the lower side?

So, the order book is quite high. It's picked up quite a bit in the last two years or so for the, especially for the crude tanker and you can see this graph where it was less than 10% in 2024 and now at 28%. For product tankers, it picked up earlier, but it's still at 22%. It is a fairly high order book. It should be seen in the context of the aging fleet. And there are a lot of old tankers which need to be replaced. Lot of this will be replacement demand for those ships.

Ok, and but the scrapping is on the higher side, so the net ship condition may be lower, sir.

No, the scrapping is very low. Scrapping has been very low in the last Scrapping will increase, sir. It will increase only when the market comes down. In this market, it does not make sense to scrap any ships.

So overall, the next ship addition in next one year will be higher or lower? That is what happens.

It depends on the market, but as it stands today, it looks like there will be positive fleet growth in FY27.

Thank you. Thank you, sir. I'm through.

Sorry, calendar 27, not FY27.

Calendar 27. Thank you.

Thank you, sir.

Thank you. Thank you. Next follow-up question is from the line of Amit Khaitan from Liburnum Capital. Please go ahead.

Hi, thanks for the follow-up. Hi, can you hear me? Yeah, I can hear you. So, yeah, so just on the offshore segment, right, if I look at the numbers for the last two quarters, the operating EBITDA is probably under run rate of 1,000 crores per annum. Is that a sustainable number for the near to medium term given most of these rig contracts are typically for three years? So, is that number sustainable for the next maybe two years or so?

In general, yes, I would say. However, we have one caveat there, which is that we have couple of rigs which are coming off contracts and have to be prepared for their new three-year contracts. This typically involves two things which affect the P&L. One is significant downtime of between 60 and 90 days for each turnaround. So that 60 to 90 days of not earning. It also involves significant expenditure. Therefore, in the immediate term, this is a negative while obviously See, it is good to get these 3 year contracts, if you can make a profit on them etcetera. But in the immediate term, these are going to be drag on the P and L. Got it.

So, the next couple of quarters could be weak, but after that it should be fine.

That is correct. So, you get this pain out of the way and then after that you settle into hopefully a steady state kind of earning.

Got it. And directionally, could you give a sense of the two new contracts that we got in terms of pricing, how much higher or lower they were compared to the previous contract on them?

So, one of them was coming off from a short-term contract. So, not really comparable. The other has, the pricing has reduced significantly. So, from the previous contract, I was down by about 25-30,000 dollars a day.

Okay. Okay. All right. Thank you.

Thank you.

Thank you. Next question is from Nilanav Ishwari Saroge. From Self Investor, please go ahead. Hello. Hello. Yes, Ishwari.

Can you hear me?

Yes.

Good evening, sir. Good evening.

My question is that the company has delivered a strong performance over the last few months.

Pishwari, sorry to interrupt, but you're sounding very distant. Can you speak a little louder, please?

Actually, I'm loud enough. Hello, can you hear me now? Yeah, yeah, this is better. Is better? Okay. My question is that the company has delivered a strong performance over the last two quarters. Okay. And initiatives such as share buyback have also a positive stretch towards enhancing the shareholder value. However, despite this encouraging development, the stock prices have not responded meaningfully in the last two years, if I say.

Yeah.

So what is the management's outlook for Q3 and Q4? And more importantly, what are the key growth drivers or strategic initiatives that could act as a meaningful catalyst for unlocking the shareholder value and driving a re-rating for the stock?

So, I will take the last part first. Our strategy is to wait for the right opportunities to deploy capital for expansion. We believe that best returns for shareholders will be made by investing at the right levels. We do not see those levels currently and we are willing to wait. We have been through these cycles before and we have seen these and therefore our approach is to wait for the right time and the right price to invest in. And we believe over the long term that will deliver value for the shareholders. So, our model is fairly straightforward that way. You buy when prices are fairly cheap and you hold for the long term, you will make a good return for the shareholders. Now, yes, we have had a couple of good quarters. In fact, we have had a couple of good years. The last The last two quarters have been exceptional. We don't know what the markets will do. We are exposed to the spot market significantly. And therefore, if the market goes up, we will benefit from it, from the market movement. And that's the approach that we are taking here. Now, I won't comment on, you know, market valuations of our stock, etc. because you are the experts on that. We only know the shipping business.

Okay, what about the outlook of Q3 and Q4, any strong catalyst?

There's no catalyst, internal catalyst. We have purchased a couple of ships extra, but it is not enough to change anything significant in the P&L. And external catalyst, there are many, many of them. The whole market is being driven by geopolitics. And is anybody's guess what happens on that geopolitical front, even tomorrow? We don't know what can happen tomorrow also on the various wars that are going on.

Thank you, sir. That's all.

Thank you.

Thank you. Next question is from the line of Vijay Kumar Subramanian from Trustline Holdings. Please go ahead.

Thank you. Thank you. My questions were answered by the previous participants, but I should congratulate you for articulating it well, and the management walks the talk in terms of value investing philosophy, and it's sticking to that what they told us. Excellent. Thank you.

Thank you for your kind words.

Thank you. Next follow-up question is from the line of Himanshapalya from Stead4 Investments. Please go ahead.

Yeah. Hi. My one question was on the LPG side. Okay. We have seen a pretty humongous increase in the rates on the spot side. Okay. Yeah. Where the spot rates currently also very high. Okay. Yes. How have the three-year term charter rates moved in last six to nine months? Because that is the place where we generally play on in the market. So some thoughts on that. And So, this LPG carrier what we purchased. So, we purchased and then we bid for a contract and then we won the contract. So, that is the status. No, no, no, no, no. So, the ship came with a contract.

She had a contract attached. So, when we negotiated the purchase of the ship, we also were in had discussions with the existing charter and the charter continues under our Thank you.

Okay.

And any more LPG contract to renew in next three to six months? And generally, how the period charters have moved in last six months for the three-year or two-year contract where we generally are in the LPG carrier segment?

So, the contract that I saw, which was a one-year contract in India. I heard rumors of a $100,000 a day contract for one year for an Indian business. Not 100% sure if it got done. This was about two weeks ago, but I think which seems plausible because that's where the market level is. I don't know where the two to three year rate is because we haven't seen any transactions. Typically, the Indian market is one to two years, and this was a one year deal. So, that's where the rates are for a one-year transaction, about $100,000 a day.

And do we have any renegotiations in next three to six months or anything else?

No, so the only repricing we have is for an NGC, which is coming off contract probably in January or so. So, in the next couple of months, but not a VLGC. So, that's an MGC. The pricing I was mentioning was for a VLGC. We haven't seen any recent MGC pricings. And this should continue? That's probably $40,000 to $50,000 a day at least. I think that's where the market would be. As I said, we haven't seen any pricings recently. So, this is a guess.

And this LPG carrier, what we have chartered out, okay? Is it again in Indian seas or outside India seas? It is outside India. It is an international oil company.

Sorry, we have one LPG ship which comes off charter in about six months time. So, one coming out in March, April and one coming I am talking about VLGC.

Okay. And in offshore, how many would be in India and how many would be outside India, the boats?

We have four boats currently outside India. Remaining 15 are in India. Yeah, thanks so much, sir.

Thank you very much.

Thank you. Next question is from the line of Devis Javar and a visual investor. Please go ahead.

Am I audible?

Yes, I can hear you.

Congratulations, sir. Like earlier shareholders remarked, you always believed on the badly investing principles in the shipping business as well. My question is not regarding GE Shipping's business, but as you have a lot of knowledge and a lot of experience from last 40 years in shipping. So, I just want to understand that, has this war and the situation, like the geopolitical situation we are facing since 2024, has this changed the stance for order book? Like, for example, this Iran war, every Southeast Asian country felt the heat because of non-availability of these tankers and other commodities. Non-availability of fuel, yeah. So, like, everyone was trained at some point. So, in a normal course of events, the world always moves towards efficiencies like... Countries prefer, like, the oil companies prefer the lowest rate the charter is offering. But after conditions like this, do you think that this could change and there could be some redundancies in terms of crew tankers, like, some nations would say, like, we need to have a reserve of tankers as well for our crew, in terms of, in terms, like, Some day in case of an emergency or war like situation like we had right now. So do you think the order book as a percentage of leads can remain elevated for the

Yeah, so I think your point is very valid. And I mentioned earlier that people might be thinking where they used to think just in time to just in case, which so you have to provide for the risk of not being able to, you know, not having your supply chain sorted out. So the one thing that can happen is people start building inventories. So importing countries start building oil, more oil inventories, so strategic reserves. They could also look at buying ships of their own so that they control the supply chain. I mentioned earlier, we have seen the exporting, oil exporting companies. So, whether it's the Iraqi oil company or Adnock or Aramco. All of them have been buying crude tankers, some of them even buying LPG ships, so that they are able to control the supply chain and push the oil through the straight of foremost. So, all of this will happen and all of these absolutely agree with you that all of these could change the behavior of the investor in different ways of people or the participants in the shipping business in different ways. We don't know how. I don't know if it will go so far as to build too many ships. Because you can always buy ships in the second-hand market. That is what the Middle Eastern oil companies have done. They just bought ships in the second-hand market. So, you could buy it in the second-hand market. It does not necessarily mean that you have to build the ships. So, but absolutely right. These are going to be interesting times as to how people react to what we have seen We have been in the last 8 to 9 months.

And sir, like, you have been studying and you also pointed out in this call that NAV is linked to cash flow. So do you think, like, have you seen in recent past, like, NAV is not falling if the rates are falling still, like, for as of now, In this current quarter, the rates are falling, but has the NAV also moved in the same proportion? Is the correlation still going on or is it broken somewhat?

Yes, a good question. We have not seen pricing points in the last two to three weeks when the crude tanker market freight rates have fallen. However, in the past, we have seen that while the first in 2008, we had a very strong market between 2004 and 2008 for tankers. And while that first drop in prices happened very quickly, because we also had a financial crisis at the time, that's the time we had the global financial crisis, the It took some time for ship prices really to come to very cheap levels. So while earnings went down quite fast, the ship prices did not drop at the same pace. So it took some time because the market retains hope. And so maybe it took with a lag of maybe a year that the prices of ships actually dropped. After the freight rates fell. Again, I must clarify, while freight rates have fallen a lot in the last two weeks, they are still at very, very high levels for crew tankers. They are higher than they were last year. At this time, they are much higher than they were last year at this time.

Thanks, sir. That's all from my side.

Thank you. Thank you. Next question is from the line of Arjun Kumar from 101. Please go ahead. Holden, may I request you to unmute your line and proceed with your question, please?

Due to no response, we move on to the next participant.

Next follow-up question is from the line of Harsh and a visual investor. Please go ahead. Lordship, can you hear us? Can you please unmute and proceed with your question? Due to no response, we move on to the next participant. Next question is from the land of Aryamanthaparya, an individual investor. Please go ahead.

Hi, can you hear me?

Yes, I can hear you loud and clear. Please go.

Yes, so my question was, for example, the SuezMax rates have spiked a lot recently. We weren't able to capture most of it since we were operating in different routes. So just wanted to understand any benchmarks that we can track the different segments because the headline numbers say something else and the routes we operate in are something else. So, we can guide us, we can track rates.

Just to clarify, we were able to capture the spikes in a couple of our spot fixtures. It's just that we don't capture the spikes given in the market averages, because the market averages include routes that we don't, that we don't participate in for various reasons, mainly risk.

So, unfortunately, this is the route which gets reported.

The Baltic Exchange reports for different routes, reports freight rates for different routes. So, if you have access to that, you could look at that and I think they also have an account on X. So, you could see if that is available. But the standard database of spot rates includes all of the routes, unfortunately.

Okay. Thank you. That's all from my side.

All the best.

Thank you.

Thank you. Next question is from Lanov Arjun Kumar from 101. Please go ahead. Hello. Go ahead, sir. You are already here. Arjun. Hello.

Hello. Am I already here?

Yes, we can hear you.

Yeah. Sir, you mentioned just in the previous last question that the good prices, the threat has been fallen. How can you see in the next year these prices and what will be the impact on the EPS on this call or something?

So, we don't forecast. Most of our capacity is on the spot market and therefore, we do not forecast what our earnings could be and we do not give guidance because it is not possible for us unless we are able to forecast the spot market accurately. As I mentioned to one of the earlier questions, this all of this market rates action, Over the last couple of years, and especially over the last six to nine months, has been caused by geopolitical disruption. You know, this last thing where suddenly you find rates doubling for tankers, or more than doubling for tankers in the spot market is because of the war which is happening now in the Middle East where the state of Hormuz, you know, is sort of closed And it has made things very inefficient. Now, The question is, what is going to happen there? And nobody knows what's going to happen there.

And therefore, it's impossible to

forecast where rates could go. Even if it is next week, it's very difficult to forecast whether rates will be down or up. So we don't even try to forecast these things.

So, just as I am going through your annual balance sheet, there you have told that a spot threat threat has been doubled from FY25 to FY26.

Yeah. Yes.

So, can I conclude or walk past that the threat will come back to what was at FY24 or FY23 after this war has been released?

Yes, the thing is that it's a fairly complicated set of things which are interacting and resulting in the freight rate. So, I'll just not oversimplify it. Broadly, yes, they should come down if the war gets over. The first reaction should be for freight rates to come down because they went up to the war.

So, can it be a ballpark that your revenue will fall and the EPS will also... The half from this, what is your reporting right now?

Again, you know, this is, you know, these are forecasts which are impossible to do, and that's why we don't do these forecasts.

Because we don't know what is the...

Sorry? What will be the revenue guidance for the next two years going your flight?

Now, as I said before, we don't do revenue guidance because we don't know. What rates our ships will earn? 70% plus of our capacity, close to 80% of our capacity is open to the spot market. The ship which is today earning $60,000 may next month be earning either $30,000 or $80,000 a day, depending on where the spot market is. And that is why we do not give revenue guidance.

Sir, just one last question. What is the break-even price for your fleet's ship that you said that price is $80,000? Just one, any one.

Yeah, sure. I'll give you a blended break-even rate for an entire fleet, which is one number. So, the number should be around the $13,000 per day mark. At $13,000 a day across our fleet, we will be around break-even. Thank you, sir. Thank you.

Thank you very much. As there are no further questions, I'll hand the conference over to the management for closing comments.

Thank you, everyone. Thank you for your active participation. As always, it was a pleasure. We will be posting both the recording and the transcript of this shortly. And again, thank you and have a very good festive season.

Thank you very much. On behalf of the Great Eastern Shipping Company Limited, that concludes this conference. Thank you for joining us, and you may now leave the meeting. Thank you.