Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the d'Amico International Shipping full year 2022 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be a Q&A session. For operator assistance via web call, please press the headset icon on the bottom left side of the screen. For conference call assistance, please press star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Paolo d'Amico, Chairman and CEO. Please go ahead, sir.
Thank you. Hello to everybody. Thank you for attending our 2022 results presentation. As usual, I would skip the executive summary because we are not repeating ourselves. I leave the floor to Carlos to start with the financial part of the presentation. I'll join you in a second moment. Thank you.
Good afternoon to everyone. As usual, we just start with a quick look, a glance at our fleet at the end of the year. 36 vessels, 20 of which 20 owned, eight bareboat chartered in and eight time chartered in, of which six long term. Mostly MR vessels, 34 out of 36, and then a new presence in the LR1 and the Handy segments. Young fleet, average age of 7.6 years relative to an industry average of 12.8. Increasingly, an ECO fleet. We are now at 79% of the owned and vessels which are ECO. And 78% of the entire controlled fleet, which is ECO.
In terms of CapEx commitments, the usual slide we show here, as you know well, we finished our new building program in 2019. Last year, it wasn't planned at the beginning of the year, but some attractive opportunities materialized during the year, which we took advantage of. We, for a share redemption, we acquired the shares we didn't own in the JV we had with the Glencore group for $27.4 million. That was a very attractive deal which for us we were fortunate in the timing. The values of the vessels which were used to determine the share price for the younger vessels were around $21.2 million and $19.75 million for the older one.
The one vessel built in 2010, the other three were built in 2011. Soon after that, a few months later, these vessels were worth around $27 million-$28 million. It's a very attractive price for us. Also, we exercised the purchase option on a vessel TC-ed in, the High Adventurer, which was delivered to us in December last year. The purchase option was denominated in yen. That's one of the reasons why the price was so attractive. When we took delivery of the vessel, it was worth around $40 million, and the purchase price was around $30 million. Also a very attractive deal there.
We also exercised at the end of last year, the purchase option on another vessel TC in at the same price in yen, which translates into $30 million in this case. Delivery should occur of this vessel around May this year. It's a sister vessel. Will be also around five years old by when it is delivered to us. Also at a very attractive price relative to the vessel's current market value. This year in 2023, we also have $14.5 million in maintenance CapEx plan. That is the, let's say, high case. It involves dry dock special surveys for 10 vessels. It is possible that some of these special surveys might actually slip into 2024.
The actual investment figure might end up being slightly lower than that. It also includes the installation of two scrubbers on two of our LR1s, which are stopping for special surveys this year. Going on to the following page, we show our bank debt repayments. Good news here is we have refinanced all the debt which matures in 2023, we only have one facility for one vessel maturing in 2024 with a balloon of around $22 million. We are now working on refinancing this, there is a lot of interest from banks, we are seeing very attractive terms.
We are confident we are going to be refinancing this balloon soon, in the first half of this year, most likely, at very good conditions. In 2025, we only have one balloon, also for one vessel of around $11 million to be refinanced. We have a good way, runway without having to be concerned about refinancings. Not that that is a source of concern in any way. It's given the very strong markets we are experiencing, and we are going to most likely be experiencing over the coming years. In terms of daily bank loan repayments, they have been on a downward trend, a significant downward trend since 2019. They are expected to increase in 2023, mostly as a result of the 2022 refinancings.
They are going to resume their downward trend after that. That is also positive for us in terms of maintaining a low cash breakeven. In terms of purchase options on these vessels, we refinanced last year two of our leasing transactions with new leasing deals at substantially lower costs for the High Fidelity and High Discovery. We have exercised purchase options on two vessels. The High Voyager, which was delivered to us in January this year, and which we are keeping that fleet for now. The High Freedom, which will be delivered to us around April, May this year, and which we also intend to keep that fleet. Also, we have the intention of further strengthening the company, reducing our breakeven going forward.
There are three other options which we are likely to exercise this year. The plan is to exercise these gradually over the course of the year. A remaining one, which we are going to be exercising in most likely in 2024. In terms of our purchase options on time chartered in vessels, we already discussed those relating to the Adventurer and the Explorer. The remaining four options are also in the money, as previously stated, these exercise prices for these options are not as attractive as those for the Adventurer and Explorer.
Given the flexibility we have by time chartering in these vessels, and we prefer for now not to delay exercise of these options to a later date potentially. We will continue monitoring the situation and reevaluate whether to exercise these potentially at a later date, closer to the end of their firm periods for their time chartering contracts. For in terms of contract coverage, relative to our last update related to our Q3 results, we as planned, we have increased our coverage, which is now for 2023 at around $20,000, well, 20%. Also the average rates for these contracts are increasing throughout the year.
Starting from Q2, they are at around $28,000-$29,000 per day. Much more attractive levels than we have benefited from or that we have experienced rather in 2022. Going on to the following page, we give some highlights of how the Q1 2023 is progressing. We have for the quarter 24% of our available employment days fixed at an average rate of around $35,000. We have around 58% fixed at an average rate of $38,800, giving a blended rate of $34,700 for 82% of the days.
That implies that if on the remaining three days for the quarter, we were to earn $20,000 per day, our blended rate overall would be of just over $32,000 for Q1. If we were to earn as much as $30,000 on the remaining three days, our blended rate would be closer to $34,000. Going on to the following page, we show the fleet evolution, which on the left-hand side of the slide and on the right, top-hand side of the slide, we show the sensitivity for every $1,000 per day and $3,000 per day change in the TC equivalent rate. For 2023, the sensitivity is around $8 million for every $1,000 per day.
On the bottom left-hand side, we show the recurring results on the fixed contract dates, including the time charter contracts and what has been already fixed through spot contracts for fiscal year 2023, assuming P&L breakeven of around $15,000 per day for the fleet. On the right-hand side, we show the net results which could be achieved in 2023, 2024 and 2025 for different scenarios for the free days. Assuming $20,000 or $25,000 or $30,000 on the free days. Assuming $20,000 on the free days, our net earnings for 2023 would be of $111 million, and assuming $30,000 on the free days, our net earnings for 2023 would be $194 million.
Going on to the following page, we show the evolution of our direct operating costs. We have achieved very good results over the last few years here. Of course, in 2022 we were confronted with a much more severe inflationary environment, but despite this, we managed to contain our cost increases in of these daily operating costs to only 1.9%, and they are still below where they were in 2018, which is, I would say, a very good result. In terms of the inflationary pressures were more pronounced in relation to crew costs and to insurance costs.
Insurance costs increases were also related to the increase in vessel values and the requirement to insure the vessels at these higher values. The G&A evolution has also been positive since 2018, although we have been experiencing more upward pressure here already starting from 2020. The increase in 2022 relative to 2021 is, to a large extent, attributable also to the variable compensation component for our employees, well, which of course is linked to the very strong performance of the company in 2022. Going on to the following page. We show a quick look at our financial position and financial strength.
The ratio between the net financial position and the fleet market value, shouldn't come as a surprise, declined significantly since the end of 2021. It stood at 36% at the end of 2022, relative to 60% at the end of 2021. We were at 73% at the end of 2018. That is a big improvement. Vessel values have held up well also in the beginning of 2023, actually moving slightly upwards. We have also been generating substantial amounts of cash this year. Our expectation is that this ratio will have improved, further improved by when we approve our Q1 financials. Going on to the following page, where we finally have the key line items of our P&L.
Q4 was exceptionally strong, $72 million in profits, the strongest quarter for this so far. On an annual basis, excluding non-recurring items, it was the strongest result so far for this with profits of almost $135 million. Excluding non-recurring items for once, the profits are actually slightly fallen for Q4 , just below $70 million. There was a reversal of impairment of $2 million in the quarter on two vessels from which we had in the past recognized an impairment. However, on a full year basis, excluding non-recurring items, the results are even higher, and they are at $137.6 million.
Going on to the following page, we show the results of both our vessels employed on the spot market and of the average rates for our TC contracts and the bareboat charter contracts, as well as the blended rates. There is, of course, a very clear trend of quarter-on-quarter improvement throughout last year. The Q1, the market was still subdued with an average rate of $12,900, but then every quarter since has been better. We have almost $29,000 per day achieved in Q2, $37,000 in Q3, and almost $43,000 per day achieved in Q4 for our vessels operating on the spot market.
TC average rates have been close to breakeven throughout most of last year, with the exception of Q4, where we started seeing these average rates increasing, they were at almost $20,000 in Q4, leading us to a blended rate in Q4 of $38,300. Overall, the blended rate for 2022 was $26,400. That is the summary of the key financial highlights, I pass it over to Paolo for the market overview.
Thank you. Thank you, Carlos. According to Clarksons today, the one-year time charters for an ECO MR are $33,500 per day. For an LR1, $41,000 per day. This gives you an idea where the market is at this exact moment. As you can see from the graph, we still have room on asset values for some increase. If we move on to the Ukrainian situation, of course, as you know, we have two dates, one in December and one in February, when Europe banned basically all Russian cargos before crude and later on products. This is both, clearly, EU imports slipped to very low levels. The Russian oil exports slipped to 16% in January 2023 compared to 50% in February 2022.
Russia has been looking for buyers somewhere else, they found them in Turkey, in China, and in India as historically known is happening. As far as Russia refined product export, the loadings for European ports decreased by 33% between January 2021 and February 2023. Turkey increased by 191%, and Africa in general increased by 664%. I mean, countries in North Africa were, that usually historically were not importing Russian diesel, today they are importing heavily due of course, to discounted price. As you know, OPEC announced a larger and not expected cut of 2 million barrels per day.
As you, being a part of the OPEC countries not in position to produce the full amount, the real cut is around 1 million barrels. The forecast for the supply on a worldwide basis, we are talking about 101, so we are over taking the 100 million barrels per day in all the world. Going ahead, COVID is a story of the past, as we hope. It's not any more an element of impact. China now, as you know, is opening up, and we already start seeing the result of it. The oil demand is growing and, of course, the refining throughput is following up.
Here again, we have refineries which are pushing more and more the capacity. The levels of the product in inventories are very low. Which means that this is the basis for increased movement in the short future. We have a very tight market, a diesel market in the U.S. and in Europe. U.S. is not common because normally U.S. is an exporter of diesel. In this case, they are even importing on the East Coast. The jet fuel demand with world going back to travel for holidays and for business, but mostly for holidays, the jet fuel demand is rising strongly.
There are more and more flights operated by the airlines and, of course, the jet fuel is rising steeply. The crude tanker market is recovering in a very strong way. We shouldn't see any more the competition of crude oil tankers in the clean market, as we saw in the past, because crude is paying very good rates. The long-term demand is always healthy and with a good growth. Total oil seaborne trade from refined products is still one third of the total. It's very strong. We have the usual changes in refinery landscape. This is a slide you know very well. The growth of refinery capacity is mostly concentrated in Middle East and Far East, which means very much far away from the markets, the consuming markets.
U.S. shale oil is increasing very slowly because resources are not used to increase production, but are mostly used to pay back debt and to pay shareholders. Now, just to look to the supply side of the industry. In Europe, we have two indexes which are coming in force this year. One called EEXI, which is an index representing the ship itself. So how much efficient is the ship. CII, which is an operational index, which tells you how much efficient you are in your operation. Both of them related to CO2 emissions.
These indexes will force old ships and efficient ships either to move out of the market and go for scrap or to reduce speed, because an old ship and an inefficient ship, as the only tool it has to reduce emission is to reduce your speed. Both elements are elements which are shrinking the supply side, which is a positive effect for us. You notice also the fleet is getting older, so the candidates for demolition are increasing by number. We see in the graph the growth of the number of ships for, I mean, percentage-wise, of ship which are overstating the 15th year and the 20th year of age. 15 year is the last anniversary for commercial reasons. I mean, the top oil companies would never touch a ship older than 15 years.
20 years is because it becomes the age where you really seriously think to demolish the ship. The deliveries are very slow coming in on the coming months. There is a very limited new building order. The reason is because the costs for a new ship, it grow a lot. If you think that our MRs, we all paid them around $42 million-$43 million, today you need $45 million-$46 million to build the same ship. The second reason is technological, because we still don't know the final fuels that we are going to use, so nobody wants to take a risk on longer term and to have an obsolete ship. Last but not least, the yard availability, because the yard are full of full containers orders and LNG ships.
This doesn't give any space or very limited space for product carriers. There are some new building orders, but they are very marginal. The final result of all this, that we have a really, a very low fleet growth. We are talking about less than 1%, which means to me that the degree is flat. Thank you very much. I'll be giving back to Carlos for NAV.
Yeah. Just a quick look here at NAV to end the presentation. In the red line here in the graph, we show overall NAV in absolute terms, and it has been rising steadily since December 2020, and it ended last year at almost $740 million, which on a per share basis translates to $0.6 per share. Our share price was at the end of last year, I will translate it into dollars at the trading at $2.4 per share, so still at a substantial discount. Since then, the share price has traded up quite a bit.
Of course also the NAV has risen most likely in the meantime both because of the increase in asset values and also of course because of the strong cash generation that we have been witnessing this quarter. Although the shares have performed very well over the last over the last year, they still seem to be attractively priced relative to intrinsic value and fundamentals. I believe that's it. I will pass it over to you for the Q&A session.
This is the Chorus Call conference operator. We will now begin the question and answer session. To enter the queue for questions, please click on the Q&A icon on the left side of your screen, and then press the Raise Your Hand button. Please do not mute your microphone locally, and when prompted, make sure you turn on your webcam in the pop-up window. If you are on the phone instead, please press star and one on your telephone. The first question is from Matteo Bonizzoni of Kepler Cheuvreux. Please go ahead.
Thank you. I have two questions. The first one is related to the market evolution, to the fleet value evolution in principle. You have showed that the fleet value has materially recovered over the last quarter, particularly since the beginning of 2022. It still remains in terms of valuation per ship, both for newbuilding and versus below previous peaks which were touched in 2007, 2008. You are out of the business differently from us. I'm asking to you, do you expect maybe the trend of the asset value to continue to go up and maybe to reach the levels touched in 2007, 2008? Second question regards your financial charges.
Can you remind us a little bit of sensitivity with regards to the financial charges related to the interest rates on the market, fixed versus variable rates, and an approximate indication of interest charges for 2023, on a sensible assumption on interest rates or some sensitivities? Thank you.
Okay. Thanks for the questions. In relation to the asset values, yes, it is true, as we are showing now again here on page 20, that they are still well below the last super cycle peaks that were reached in 2008, 2007. In terms of five-year-old vessels, they are still 23% below last cycle peaks, and 10-year-old vessels around 29% below. There is therefore room for these vessel values to move up to continue rising. It's also interesting to note that TC rates when vessel values were last at these levels in 2007 and 2008 were actually slightly lower than where they are today.
The spot rates peaks that we have reached in 2022, and particularly in the end of 2022, were not seen at that time. That seems to indicate that there is a misalignment between asset values and earnings, which could reflect the fact that the market participants are not that convinced about how long this up cycle can last. We do see very strong fundamentals. I mean, there's of course, one element which of the up cycle, which is linked to the inefficiencies generated by the Ukrainian war, and nobody knows how long that will last. We all hope that will end as soon as possible.
There are underlying fundamentals which both depend on the war, which are very supportive of the market. We are talking here still of the pent-up demand coming as China reopens, and in particular increase in demand for jet fuel, which is still well below pre-COVID levels. In particular, international long-haul flights still have to stay well below pre-COVID levels and have a lot of room to increase. Of course, the supply side, which has never looked so good. When we were in the last cycle peak, the supply side was not nearly as good. Actually, it was terrible. There was a lot of vessels on order.
Now we find ourselves at the beginning of a recovery where we actually have an order book, which is at an historical low, which is unheard of. What is really positive is that the incentives for the vessels seem to be quite limited now because vessel prices moved up, new building prices quite significantly, not only because of the strong fundamentals in our sector, but also because we were the last of the main shipping sectors to peak in the last in these last few years. We had the container sectors and the global sector that did much better before us, and the gas sector. Yards got full with new buildings for these type of vessels.
Of course, reducing their appetite to build product tankers and contributing to the firmness in the prices and delaying the delivery. Even if vessels are ordered today, they will only be delivered in 2025, which means that we have a very good two-year runway before we can eventually be confronted with that supply issue, which in any case we don't see materializing for now. In terms of financial charges, including the cash that we expect, the average cash balance that we expect to have this year, and taking into account the investments, which is hedged, our sensitivity for every 1% increase in the SOFR/LIBOR rate is of our net results is of -$0.6 million.
For 2024, given our expectations, I would say rather prudent expectations for the market, we actually expect to be perfectly balanced and not to have any sensitivity whatsoever to the interest rate. In terms of absolute numbers for the interest rate, I would rather not communicate because I mean, that would also imply an assumption about what the SOFR rate or LIBOR rate would be this year, which I guess you can make your own assumptions in that respect.
Thank you.
The next question is from Daniele Alibrandi of Stifel. Please go ahead.
Good afternoon, thanks for taking my question. Congrats on these strong results. Yeah, I've got several question. I'll start with three to be taken one by one. My first one is on TC out contracts. Some of your TC contracts were expiring in January, but you managed to increase the cover, as you said, up to 20%. I also saw that the time chartering activity has peaked in Q1, increasing, increased in Q1. A shipbroker was saying 13 vessels were booked on clean product tankers, most of them are ours. The question is, basically, I was curious to know if you are seeing the negotiation getting tougher given the volatility in the underlying market or not because charterers are basically surrendering.
If we can take the $20,000 level as a good proxy also for the year on TC fixing rate. This is my first question.
Mm-hmm.
Yeah. What, what I can say is that, number one, charterers never surrender . Is a continuous fight. I have to say, we are quite resistant to this number, but we have to accept it because, however we do it, I mean, the market it is what it is now. My studies are in our favor, and it plays well. I didn't understand very well about the $20,000. Sorry.
$28,000. I saw that in in the one of your charts.
Yeah. Was.
$28,000 more or less for each quarter. was.
That was the average for the contract coverage, average rates for Q2 2028- Q4 2029.
Exactly.
That's for the existing contracts which are signed. Today, if you fix an ECO MR vessel according to Clarksons, the going rate should be around $33,000-$34,000 per day for one year for an ECO MR vessel. For an ECO LR1 vessel, around $41,000 per day. New fixtures done, if we were to fix new vessels on time charters today, these are likely to be the levels that we are going to be achieving on these contracts.
Okay. $28,000 is, let's say, rather cautious if you maybe fix.
Is an average, yes.
Yeah. It's the average of existing contracts. I mean, we have in particular one contract, which is a bareboat charter out contract, which was fixed some time ago, which is bringing down that average, because it is at a TC equivalent rate of around $20,000 if you transform it into a TC equivalent. That is why the average is not higher than that. Hopefully as we fix more vessels on time charter, we can that average can increase.
Okay. The second one is I'm not sure to have well understood your slide 13, the two charts at the bottom of the page. You are basically saying that $55 million in net profit today is already booked, and the difference will come from the different scenario from the spot, right? $55 million already booked.
No.
Is that correct?
$75 million. $74.5 million.
Yes, yes. $75 million, sorry. $75 million. Yes.
Yeah. Slide 14. Yes.
Yes.
Yes. That is the case, yes. That, you could interpret it that way. You could interpret it.
Right.
On our remaining three days, we were to break even, so earn $15,000 per day, our net profit for the year could potentially be this much. Of course, this relies also on an assumption about our costs, which generally speaking are not very volatile. But yeah, that is a correct interpretation, yes.
Okay, fantastic. The last one, how should we think about the level of the loan to value through the cycle that makes you comfortable with assuming asset assuming, let's say, asset values at this level where we are today? This year, you I guess the loan to value will further go down.
Yeah.
Just to understand how basically how much extra cash you could end up?
Well, I mean, as we communicated, today and in the recent past, quite consistently, our plan, we plan to continue deleveraging. As you saw from our press release, The board proposed a dividend of $22 million to the shareholders, which has to be approved at the next AGM. Some cash is being distributed to shareholders. Of course, if the results continue being as good or even better than we had last year, most likely the more dividends will be arriving to the shareholders. We do plan to continue deleveraging and strengthening our balance sheet by exercising these options on the vessels which are currently on bareboat charter, and initially at least keeping them debt free.
When the right opportunities arise for us to make attractive investments, we will most likely lever up again our balance sheet so that we have the firepower to make these investments.
Just to follow up on this, because I remember that you mentioned in a couple of calls, earlier calls that you were also saying you're seeing example Ardmore and seeing, I mean, the distribution policy. Are you thinking maybe also there are some space to see a start of a quarterly dividend? I mean, or can we start to also to think about this or it's too early to say?
I would say it's a bit too early, most likely to look at that. We are definitely, you know, as I mentioned, the group seems inclined to distribute more cash to its shareholders if the results continue being as strong. Of course, given after we, you know, we have reached our objectives in terms of strengthening our balance sheet, it is likely that a higher percentage of the profits will be distributed to the shareholders, although we don't have an explicit dividend policy.
Okay. Fantastic. Congratulations and good luck for the future.
Thank you. Thank you.
The next question is from Massimo Bonisoli of EQUITA. Please go ahead.
Hello, good afternoon. I have two question, one qualitative and one clarification. Can you provide some color on the tanker market and the competitive environment post Clean Products embargo, and also by different routes? The second question is on your slide on page 39, you do not include any more the unexpected capital effect by at the end of 2022. Does it mean net working capital is normalized, or how should we interpret it? Thank you.
As far as the market after the last embargo, what's happening and what was basically forecast is that. For the moment, the system is already stocked. You see movement, but they are not yet that great. The principal place of supply for diesel is coming out of the Middle East. Is starting also out of China. This is something that we knew and this will increase with online terribly. We have to wait for the springtime, because in springtime you have the agriculture which starts. You have an increase on diesel consumption. We expect a tighter market, of course, as far as Europe. As we said, even U.S . Is short of diesel due to maintenance of refineries, due to high consumption for bad weather.
The bad weather in U.S. also limited in some days the refining activity. Also U.S. has a shortage problem. As I said, U.S. will go in competition with Europe for the diesel buys. As said, what was coming, the 40% which that of European consumption, which was coming out of Russia now is coming by far, by more distant routes. In the meantime, we are seeing, again, an activity in the sale and purchase market of all product carriers, both we don't know by whom, and we suppose part of them probably will end up in the so-called shadow fleet. Because also Russia has the problem to move its own diesel, you know, in more distant places.
They do not have, I mean, they didn't have it in the recent past, a good, a big fleet of product carriers, on the contrary of a good ones.
The other question on the NAV, yes, thank you, Massimo, for spotting this. Actually, the NAV does include the working capital, the net working capital. It's up $79 million in December. It doesn't appear that the blue bar doesn't appear in the graph, but it is included in the calculation for arriving at $757 million in NAV. It is actually an increase, so we had quite a big increase in receivables towards the end of the year. A lot of our charters were a bit slow in paying. I mean, this is a trend that we actually saw throughout the year. They have been slower than usual in paying.
They usually pay the freight 3-5 days after discharge. They were often paying even two weeks after this. Of course, there's also some gaming towards the end of the year where they want to show for potentially a higher, a better cash position, so they delay payments. Unfortunately, charter contracts don't provide us much leverage in forcing them to pay earlier. A lot of that cash has already come in, of course, since the end of the year. Actually 100% has come in already at that. It's not a bad debt problem, it's just an industry phenomenon. It impacted us as other shipping companies in the same way.
Actually what we have been seeing is that the payment performance has improved quite markedly this year. Charters are now back at paying freight at 3- 5 days after discharge, which is what we usually experience.
If I may squeeze in a very quick follow-up question. Just on your dry docks, you mentioned before you want to install two scrubbers on two LR1s. Will this dry docks impact a particular quarter or will be spread across the year?
The dry docks, they are pretty much spread throughout the year. There are three which are expected to happen at the end of the year, which might be postponed, because there is some flexibility on the timing of the dry dock. It is also possible, if we were to stretch it to the last possible date that these dry docks happen in 2024, or some might start in 2023 and end in 2024.
Very clear. Thank you. Congratulations again.
The next question is from Climent Molins from Value Investor's Edge
Good morning. Thank you for taking my questions. I wanted to start by asking about your TC- in vessels. Could you provide some commentary on when the TC vessels without purchase options are to be re-delivered to their owners?
Yes, we have. Cannot provide you the exact details, but what we do provide, which might be helpful, is in the slide here where we show the fleet evolution, getting there. You see here, this is the average vessels controlled in these years in 23.5. You see already that in 2024 we have a decrease in the fleet relative to 2023. The light blue are the firm TCIs. We have 7.3 vessels of firm TCIs in 2023. It goes down to 3.2 in 2024. We have on the gray bar 1.9 vessel optional TCIs.
These are vessels which, we, depending on the market conditions, can decide to extend the time charter ends or redeliver them to the owners. In 2025, the firm TCIs fall to two vessels. We have two vessels which are with also optional TCIs. You also see the evolution on the bareboat chartered in vessels here, how they throughout the, throughout the next three years.
That's helpful. Thank you. You've been clear you plan to continue the deleveraging while also outlining your willingness to distribute dividends if rates remain strong. Is there any appetite to pursue share repurchases given discount to maybe your shares are trading at or does the board generally prefer to stick to dividends?
No, I'll, I would say that the thinking right now is to stick to dividends, not really share repurchases. Of course we do have the room to act on share repurchases if we want to. We have today that our treasury shares represent 1.46% of the issued shares. The authorization provided by us would allow us to increase that to 15% of the issued shares. There is room to do much more. The thinking right now is mostly deleveraging and dividends.
Makes sense. That's all for me. Thank you for taking my questions. I look forward to the next quarter.
Thank you. Thank you.
As a reminder, if you wish to register for a question, please press Q&A on the left bar and raise your hand or press star and one on your telephone. For any further questions, please press Q&A on the left and raise your hand or press star and one on your phone. Gentlemen, there are no more questions registered at this time. I'll turn the conference back to you for any closing remarks.
Okay. Thank you very much then for joining us. At this point, we really meet again at the next call, which will be in May.
Yes, in May. 11th of May.
Thank you, and have a nice day. Thank you.
Thank you. Thank you.
Ladies and gentlemen, thank you for joining the conference. It's now over. You may disconnect your devices. Thank you.