Earnings Call: Q3 2019

Nov 15, 2019

Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Conference Call on the Q3 2019 Financial Results. We have with us today Mr. Pittas, Chairman and Chief Executive Officer and Mr. Aslidis, Chief Financial Officer of the company. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, Friday, 15th November, 2019. Please be reminded that the company announced its results through the press release that has been publicly distributed. Before passing the floor to Mr. Pitta, I would like to remind everyone that in today's presentation and conference call, EuroDry will be making forward looking statements. These statements are within the meaning of the federal securities laws. Matters discussed may be forward looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Kindly draw your attention to Slide 2 of the webcast presentation, which has a full forward looking statement and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. I would now like to pass the floor over to Mr. Pitta. Thank you, sir. Please go ahead. Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the 9 month period and quarter ended September 30, 2019. As a reminder, I would like to mention that in May 2018, Euroseas contributed to EuroDry's drybulk fleet of 6 vessels, 1 Ultramax and 2 Kansomax vessels built between 2016 2018, and 3 Japanese built Panamax vessels built between 2,000 and 2004. EuroDry was spun off from Euroseas on May 30, 2018. Since the spin off, EuroDry bought an additional Panamax bulker. Comparisons in the following presentation to periods of last year refer to the drybulk fleet existing at the time for the periods presented. Please turn to Slide 3. Our income statement highlights are shown here. The Q1 of 2019, we reported total net revenues of $7,700,000 adjusted EBITDA of $2,200,000 and adjusted net income attributable to common shareholders of minus $600,000 or minus $0.26 per share. Since the operation of EuroTie commenced as a separately listed public company, we have focused on positioning the company to capitalize on market opportunities. By refinancing a portion of our debt, we managed to raise the required funds and pursue selected vessel acquisitions like the Starlight, which we acquired late last year. We generally expect that the drybulk market could offer opportunities for realizing significant returns in the medium term as the fleet supply is expected to grow modestly in the next couple of years. Thus leaving the focus on trade demand developments which partly depends on geopolitical factors. The aftermath of the emissions implementation and ballast water treatment regulations over the next 2 years could possibly further squeeze vessel supply leading to a solid trade demand growth, therefore creating a very rewarding market environment for vessel owners. At the same time, U. S. Price stock continues to trade at a significant discount to its NAV. This discount we believe will start shrinking as the performance of EuroDry is appreciated and our fleet grows either through single vessel acquisitions or by exploiting our public platform to consolidate other fleets, thus offering additional returns to our shareholders. Please now see Slide 4, which shows how the markets improved all the way till nearly the end of Q3, but subsequently are correcting in Q4. Average spot levels for Panamaxes in Q3 were about $16,250 whilst average 1 year charters stood at around $13,600 per day. Please turn to Slide 5 for our chartering operational S and P and drydocking highlights. The Irini was fixed for about 11 months to 13 months at $12,500 per day for the 1st 55 days and thereafter at 100 percent of the BPI 40C Index. The Pantelis was fixed for about 90 to 100 days at $11,500 per day and the Tasos was fixed with a similar trip of about 100 to 120 days at $11,500 per day. At the beginning of Q4, we sold the Q4 contract, Q4 FSA contract at $14,550 the equivalent to the open days of 1 Panamax ship. Subsequently, we closed the above position with a net profit of about $112,000 which is the equivalent of about $1200 daily on 1 Panamax service for the whole of Q4. In the longer term, we may continue using FSAs solely to hedge our open day positions at management's discretion. Irene P completed its drydock in the Q3 of 2019 in roughly 30 days at a cost which is similar to the budget we had of approximately $1,100,000 including the balanced water treatment plant unit. Please turn to Slide 6 for the synopsis of the EuroDry fleet as of today. As you can see, EuroDry comprises of 7 drybulk vessels with a cargo carrying capacity of about 530,000 deadweight tons and with a fleet average age of 10.8 years. Slide 7 shows the employment schedule. Coverage for the remainder of 2019 as of November 1, excluding ships on index charters, which are open to market fluctuations, but have secured employment stands at about 56%. The only vessel that is still expected to open up for its charter during Q4 is MV Pantelis at some point in the second half of November. In the following slides, we synopsize our outlook in the drybulk market. Let's turn to Slide 9. The IMF projected gold GDP growth in 2019 is revised downwards from 3.2% in the previous quarter to 3% now. Among the developed economies, China's Q3 suggests a weakening growth rate of 6.1% compared to 6.2% in the previous quarter. For the advanced economies, the revision of U. S. Growth in 2019 reflects a less strong performance of 2.4% compared to 2.6% in the previous quarter. The IMF also scaled back predictions for the Eurozone slightly 1.2% from 1.3%, while India is down from 7% to 6.1% only. Only Brazil is expected to see a slow uplift from 0.8% to 0.9%. For 2020, the IMF predicts stronger growth of 3.4% even though the U. S, China and Japan are expected to grow a bit more slower. Stronger growth is expected for Europe, India, Russia and Brazil. It must be noted however that some analysts believe that global growth may be slightly lower in 2020 than in 2019. Looking on to the drybulk trade, according to Clarkson, the trade in 2019 is now projected to grow by 1 point 4%, up from 1.3% expected in the previous quarter estimates. In 2020 and according to Clarkson forecast, the trade rate is set to grow at a solid 2.9% rate. Please turn to Slide 10 to review the drybulk delivery schedule. Currently the order book stands at 5.7% for 2019 2020 and 3.3% for 2021. This is comparatively very low near the lowest levels of the last 20 years. Also note that due to slippage, cancellations or scrapping, the overall fleet growth during the next 2 years unless a significant number of new orders displayed should be very small. Please turn to Page 11, where we summarize our outlook on the drybulk market. Since the beginning of 2019, we have seen that rates for Capesize vessels moved from below OpEx levels in the Q1 to multi year highs of above $40,000 daily in the Q3. Panamaxes and Supramaxes were much less affected by the Vale disaster and dropped much less before increasing again also to multi year highs of about $18,000 per day $15,000 per day respectively by September. Since then, however, the market has corrected by about 50% currently standing at around the $9,000 mark for Panamax vessels. The main reason for these strong movements we've seen in this year in rates was the accident in Vale's iron ore mine in Brazil, which was estimated to reduce Brazilian iron ore exos by 90,000,000 tons annually until mines came back to operation. However, it seems that the big part of the capacity is already coming back. The Brazilian iron ore exports and the driver for the Cape market as said have shown improvements from minus 30% in the first half the year to minus 15% and still improving. Our mid year analysis for 2019 has been accurate predicting the total recovery of the market in the second half of the year as it happened. However, the rate expectations for the remaining 2 months of the year are rather flat in view of the return back into the market of the ships having installed scrubbers as compared to ships taking the time to install them and less coal imports by China. Our outlook moving forward is as follows. For 2020, our supply demand analysis shows a marginally negative balance, which would suggest a slightly softer market. However, especially in 2020, there might be unexpected disruptions due to the introduction of cleaner fuels, which could lead to a tighter than expected market by having delays and vessels speed drop. For 2021, our analysis indicates a promising year amidst a very low order book. Longer term, iron ore trading volume growth is at risk due to the lack of further mining production investments in both Australia and Brazil, the 2 major producers. Coal imports, despite the longer term concerns due to the overall desire to reduce coal use, are expected to further grow in 2020 following an about 10% rise in Chinese coal imports so far in 2019 as electricity demand growth remains robust there and in other developing areas. The grain trade is expected to rebound following a much desired trade agreement between China and the U. S. Next, please turn to Slide 12. The left side of the slide shows the evolution of 1 year time charter of Panamax dry bulk vessels since 2,001. Even though dry bulk vessel rates bounced back from the all time lows in 2016, we are still below historical median levels. The right hand side of the slide shows the vessel values in relation to 10 year historical prices. Of course, drybulk prices have moved above all time low values that were established at the beginning of 2016, but the median price of 10 year old Panamaxes is still lower than that. With the stabilizing and even improving freight rate environment, we would expect asset values to improve as well. I will now pass the floor over to our CFO, Tascha Slides to go over our financial highlights. Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you over our financial result highlights for the Q3 9 months period of 2019. For that please turn now to slide 14. For the Q3 of this year we reported net revenues of $7,700,000 representing 13% increase over total net revenues of $6,800,000 dollars during the Q3 of 2018 and that increase was mainly the result of the increased average number of vessels we operated this year. The company reported net loss for the period of €400,000 and net loss attributable to common shareholders of $800,000 as compared to net income of 1,700,000 dollars and net income attributable to common shareholders of $1,400,000 for the Q3 of 2018. Depreciation expenses for the Q3 of 2019 amounted to $1,600,000 dollars compared to $1,400,000 for the same period of last year. Interest and other financing costs for the Q3 of 2019 amounted to $800,000 remaining about the same to the corresponding period of last year. Adjusted EBITDA for the Q3 of 2019 was $2,200,000 compared to $3,800,000 for 2018. Basic and diluted loss per share attributable to common shareholders for the Q3 of 2019 was $0.35 calculated on $2,250,000 basic and diluted weighted average number of shares outstanding compared to basic and diluted earnings per share of $0.63 for the Q3 of last year. Excluding the effect on the income or loss attributable to common shareholders for the quarter of the unrealized gain or loss in derivatives, the adjusted loss attributable to common shareholders for the quarter ended September 30, 2019 would have been $0.26 per share basic and diluted compared to earnings of $0.62 basic and diluted for the same period for the Q3 of 2018. Usually, security analysts do not include unrealized items in the published estimates of earnings per share. Let's now move on the second half of the slide to discuss the 9 month results for this year. For the 9 months of this year, we reported total net revenues of DKK19.6 million, representing a 12% increase over total net revenues of DKK17.5 million during the Q3 of 2019. The result, the increase partly due to the higher average number of vessels we operated this year. The company reported net loss for the period, the 9 months, of SEK1.4 million and net loss attributable to common shareholders of $2,900,000 as compared to net income of $300,000 and net loss attributable to common shareholders of $1,000,000 for the same period of 2018. Depreciation expenses for the 9 month period of this year amounted to $4,800,000 compared to $3,900,000 for the same period of 2018. Interest and other financing costs for the 9 month period of this year amounted to $2,700,000 as compared to $1,800,000 for the 9 month period of 2018. Finally, adjusted EBITDA for the 1st 9 months of this year was $6,500,000 compared to 5,900,000 for the same period of 2018. Basic and diluted loss per share attributable to common shareholders for the 9 months for the 1st 9 months of 2019 was $1.31 calculated on 2,480,000 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $0 slightly negative at least, but 0 for the same period of 2019. Again, excluding the effect on the income or loss attributable to common shareholders for the period of the unrealized gain or loss in derivatives, the adjusted loss attributable to common shareholders for the 9 month period that ended September 30, 2019, would have been $1.13 compared to adjusted loss of $0.07 for the 1st 9 months of 2018. Again, typically security analysts do not include unrealized contributions into the estimates of results. Let's now turn to slide 15. In this slide, we will review our fleet performance for the Q3 of 2019 and the 9 month period and compare it to the corresponding periods of the previous year. Let's look first at our 3 month figures. Our utilization rate is as usual broken down into commercial and operational. For the Q1 of 2019, we had a 100% commercial utilization rate and 99.5% operational utilization rate compared to 100% commercial and 99.7% operational for the corresponding quarter of the previous year. I want to remind you here that our utilization rate calculation does not include vessels that were in scheduled drydocks or repairs if any such event occurred during the period. During the Q3 of this year, we operated 7 vessels with another time charter equivalent rate of $12,088 per vessel per day compared to 6 vessels during the same period Q3 of 2018, which earned an average $13,839 per vessel per day. Total daily vessel operating expenses including management fees, general and administrative expenses, but excluding the re dilution costs averaged $5,722 per vessel per day during the Q3 of this year compared to $6,182 per vessel per day for the same period same quarter of 2018. Let's now look at the bottom of this table to our daily cash flow breakeven level presented here on a per vessel per day basis. For the Q3 of 2019, we reported an operating cash flow breakeven level, including low underpayments and the cash portion of our preferred dividend of $11,222 per vessel per day compared to 11,100 and $15 per vessel per day for the Q3 of 2018. Now let's look on the right part of the slide to review our 9 month figures. Our utilization rate again here is broken into commercial and operational. We had a 99.9% commercial utilization rate for the quarter for the period for the 9 month period and 99.2 percent operational utilization rate compared to 100% commercial and 99.6 percent operational utilization rate for the corresponding 9 months of 2018. In the 9 month period, we operated 7 vessels with an average time charter equivalent rate of $10,750 per vessel per day compared to 5.5 vessels for the same period of 2018, the 1st 9 months, during which they earned $11,649 per vessel per day. Total daily operating expenses including management fees, general and administrative expenses and excluding direct operating costs averaged $5,839 per vessel per day during the 9 months of 2018 as compared to $6,512 per vessel per day for the same period of last year. Let's now look again at the bottom of this table to our daily cash flow breakeven level, again presented on a per vessel per day basis. For the 9 months, we reported an operating cash flow breakeven level including loan repayments and the cash portion of our preferred dividend of $11,314 per vessel per day as compared to $12,227 per vessel per day for the 1st 9 months of 2018. Let's now turn to slide 16. This slide shows on the right hand side an estimate of our cash flow breakeven level for the next 12 months. From the left side on the left side of the slide, we show our scheduled debt repayments including scheduled balloon repayments over the next 6 years. This chart shows our debt profile before and after the recent refinancing of the balloon payment of Irene that took place earlier this year. We see in the chart that we have no balloon payments coming up before 2021. We believe we have a very competitive cost of debt for the size of our company. The average senior debt margin stands at about 3%, which assuming a LIBOR cost of around 2% would translate to a no lien cost for our debt of about 5%. And if we included the cost of the dividend we paid to our preferred equity, the overall cost of debt and preferred equity financing is just around 5.9%. I would like to note here that we prepaid DKK4.3 million of Series B preferred shares in exchange of a decrease of the quarterly of the annual dividend rate to 9.25% from the 12% that it was originally until January 2021. At that time, the dividend the annual dividend rate would increase to 14%. The remaining amount of our Series B Preferred Shares is about $15,400,000 We see the contribution of our loan repayments to our cash flow breakeven expressed in dollars per day in the second to last line of the table at the right part of this slide. We can see there that our loan repayments over the next 12 months contribute about $2,750 per vessel per day to our cost flow breakeven level. In the same table, we can see that our preferred dividend amounts to about $5.50 per vessel per day. If we make similar assumptions for the rest of the components of our cash flow breakeven that is our operating expenses, general and administrative expenses, interest, drydocking, etcetera, always expecting a per vessel per day basis, we can estimate that we would have approximately a cash flow breakeven level over the next 12 months of $11,350 per vessel per day. Let's now turn to the next slide, slide 17. This slide provides in graphical form a snapshot of our balance sheet as of September 30, 2019 and helps us assess the intrinsic value of EuroDry stock highlighting how undervalued that is. The left bar of the chart stacks our assets, which are mainly the value of our fleet and the current assets including cash including our cash, while the right bar of the chart shows our bank debt to preferred stock and other liabilities with a difference shown in yellow being the net value of the company. As you can see, the book value of our vessels is about $107,000,000 which is very close to what we believe their market value is. Our outstanding debt is about $58,400,000 which represents about 50% of our total assets, while our preferred stock as I mentioned earlier amounts to about $15,400,000 representing roughly a little less of 15% of our total assets. Taking into account other current assets and liabilities, we conclude that we have a book value for the company of almost $40,000,000 or about $17.5 per share, which should be very close to the market value of our stock. With our stock trading at around $8 per share, we believe that an investment in EuroDry is a very attractive reposition. And with that, I would like to pass the floor back to our Chairman and CEO, Aristides to continue the call. Thank you, Tasos. Let's open the floor for any questions there might be. Thank you. We will now take our first question. Please go ahead. Your line is open. Hi. Tate Sullivan from Maxim Group. Good morning. Thanks for taking my questions. Can we start with just your market comments? And I mean, what are the and they were helpful in terms of the new supply coming into the market. But can you comment in terms of can you give an approximate number of active vessels in your market, including your own as well as the absolute number of scheduled additions for the next couple of years, please, if you have that available? We can get that number. I think it we don't have it on the top of our heads the expected fleet growth in terms of vessels or even deadweight for our segments, but we'll be happy to provide that information. That's the we don't have the actual numbers in my head, but what I have in my head is the percentage increase of vessels that will be supplied in 2019, 2020 2021. 2019 is practically done, so we don't care. But in 2020, we expect 5.7% increase in the fleet. The majority of that growth comes from Capesize vessels. So in the Panamax vessels where we are involved and the Supramax, it's a bit less than that. Similar growth rates are expected in 2021, about 5% 5.7%. No, sorry, 3.3% is in 2021, 5.7% is the 2019 and 2020 growth. From that you have to supply subtract the scrapping and the late deliveries and the occasional cancellations and all that stuff. So overall, we would expect the global fleet to grow around 3% next year. You can look at slide in slide 10, there is a little insert there in ORANZE that actually shows what are scheduled what is scheduled to be delivered by segment in terms of vessel numbers for the next 2 years. Perfect. So that is an indication. But the numbers that are still quoted, you are grossed, they are not net growth rates. The net growth rates are lower than the 5.7 that you mentioned. Yes. 5.7 is what is planned to be supplied to be delivered within that year. But it will not necessarily happen because there are delays and of course there will be scrapping which you have to subtract from that. Right. Okay. And then how in right now in terms of the newbuild market, how long does it take from the time of order to delivery roughly and based on Normally, it takes about 18 months from the time you order till the time you deliver, 18 to 24 months. Okay. And I know it's hard to generalize, but can you give some comments on what are the most common routes and ports for your ships or the number of ships around Brazil versus the numbers around Australia? And again, I know it's hard to tell us, but any comment? Yes, this is a big discussion. I suggest we have a call after this call and we can discuss the matters then. Okay, thanks. And then the last one for me. Is it do you have a normal time or an expected time between the contract for the one ship that ends the contract this month or is it hard to say? It will be in direct continuation. So there will be no downtime. In dry bulk these days, there is no downtime or waiting time. It will be in direct continuation. Okay. Okay. Thank you for that context and your earlier comments too. Have a good rest of the day. Thank you. Thank you. Thank you. We will now take our next question. Go ahead. Your line is open. Hi, Tassos? Yes. Hi. Yes, sorry. I can't tell if my line is open. This is Poe Fratt from Noble Capital Markets. Good morning. Just go back to Slide 10. Good morning. To go back to Slide 10, you're showing 5.9% or 5.7% growth. What has that's a growth number. What has scrapping run so far? We're almost done with the year. So what do you think the net growth is for 2019? Yes. I think it should be closer to 3%. 3.5%. 3.5%, I think. Let me I can Yes. Okay. Probably. That's what I can yes. Yes. Just want to clarify because that chart does show higher than expected growth just to make sure Ron Well, this is what that shows is the scheduled deliveries as a percent of the fleet. It's only the scheduled deliveries. It doesn't do all the accounting for the subtract the scrapping. If we do our list Also the 5.7% is what is in the analyst Clarkson's books to be delivered in this year, but not all of it will be delivered. There is a slippage of around 10% in that. So there is slippage, there is the scrapping. So overall, we expect that the growth rate will be around 3. 3.9%. I think if we did our internal little analysis, we will make assumptions for scrapping that happened and is expected to happen in the last couple of months, we would be just below 4%, 3.7% to 3.9% net growth of the fleet for 2019. Yes. Great. Yes, to scrapping and slippage, we'll mute that gross number and take it down by almost half. When you look at sort of the scrubber situation out there, there's my impression is that there's people have been scrambling to get shipyard time and the installations are maybe taking a little bit longer. Is that your impression too? And then second part of that question is, is IMO 20 20 changing your chartering strategy at all? Are you how are you approaching the potential for fuel cost to diverge here? Yes. First on the scrubber issue, you're absolutely right. It's not an impression. It's an actual fact that it has been taking longer to install the scrubbers than originally anticipated by maybe 10 days or something like that on average. So this obviously is happening. On the change of fuel in 2020 from January 2020, we are already taking the necessary measures and we will be starting to get supplies of high sulfur of low sulfur fuel oil on our ships. Obviously, before that time, we've already started in 1 or 2 ships. And there will be this disadvantage, let's say, for the ships that do not have scrubbers against the scrubber fitted ships, at least initially with price difference being around $2.50 per ton at this point in time, dollars 200 to $2.50 depending on the port. There are going to be problems in availability of both types of fuel. Some pumps will have only 1 or the other. So planning will need to be made on to where you bunker, which has to be much more careful. This is something we will be discussing together with our charters and helping them because they are the ones in time charters that direct the vessel where it needs to go. And we will be discussing with them to try and help and optimize the situation. But all this will create some disruption generally and this disruption is essentially reducing the number of ships available. So we think that it will be a positive disruption even though the scrubber fitted ships will be benefiting with higher time charter rates. Of course, if the time charter rates that they will be getting are sufficient to amortize the investment. This is something that remains to be seen. Great. But your chartering strategy won't change. You still expect to focus more on time charters that the fuel cost risk is on the customer for the charter? Yes. The big majority of our fixtures will be time charters, either spot time charters for one trip or longer term time charters, yes. Great. And then if you can if you look at the can you give us color on the Q3 rate from the Guardian pool on the Alexandros P? And then sort of give us an idea of where that is quarter to date for the Q4 that would be helpful. Yes. I can tell you that generally the Cardium pool has outperformed the index by a very little bit overall over the few years the year that we've been with them. So we've outperformed the index, of course, adjusted for the size of our vessel because the Supramax Index is for the 57000 deadweight vessel, but we are 60 3, which means that implies generally at least a 10% higher rate. And this is what we have been achieving. We have been achieving a little bit higher than 10% above the index historically up to now. And this quarter, I think it's running around the same level. We'll have better color when we get the next statement from them. Generally, results from pools in general have a small lag with the market. So if the market drops, they do a little better during the period of the market drop because they carry the older charters. And if the market increases, they do a little worse because they carry the lower charters that have been fixed before. So the same is reflected in the results of this pool. Yes. And a lot of companies give CIFO's forward cover percentage of days booked for the Q4 and sort of an average TCE rate. Do you have ballpark numbers for those 2? I know that most of your capacity is under contract but indexed. I was just trying to get a flavor of where we stand during the middle of the quarter on both on really rates? Yes. I mean, the best way to I mean, if you look on Slide 7, what we saw is fixed, which is what determines a big chunk of what our rates will be for the Q3. The remaining part, the unfixed part or the part that is opened linked to the market, I think looking at the index, the average index today is probably the best estimate of what the rate will be. This is what we do frankly ourselves to make a projection for the quarter. So I don't have on the top of my head a number to give you. But I mean you can see on Slide 7 the fixed charters and the ones that are linked to the index, the average to date index and whatever expectations you might want to put for the remaining 1.5 months would constitute a good guess for Q4. Yes. And I noticed on that that the Guardian pool, the Alexandros P is highlighted in blue, it shows as an option. And should we view that as an option or is that more in the pool, it's in the pool permanently and it should work and generate 112 pool points each quarter? Yes. It's our option really to exit the pool if we decide at any point that we want to do that. But this is not something we're currently considering. Yes. And so we should do this for full employment? At the full, yes. Yes. Okay, great. And then Tassos, if you could just talk about cost and what drove cost over the Q3 and then sort of where relative to what the $5,200 per day that you're guiding or offering for the next 12 months? That would be helpful. There is I mean, from quarter to quarter, there is some small variation on the operating expenses. There's nothing it's the way certain expenses happen and that affects the quarterly average. I think compared to the same period of last year that we saw, I think we saw a little lower cost compared to last year. I think we were having some vessels that were relatively new to the fleet. I think we had a vessel the Katarina had joined the fleet in the middle of last year and sort of originally the results the contribution of a new vessel is a little higher. But there is nothing there is no real trend there. I think we're doing just around budget. If you look at the quarter volatility of the OpEx, which I happened to see just to look at just before our call, it's around $5,000 give or take, even $100 up and down. So I think we are I think nothing special is happening with the cost. We're trying keep them as low as we can, which has been helped a little bit because the I think the exchange rate we had budgeted at 12 percentage is 10% of I mean, the dollar euro exchange rate is slightly lower. That's basically there's nothing more to add to that. And then you've done a good job of refinancing, redeeming the preferred or partially redeeming the preferred. Should we expect 2020 to be pretty quiet from a refinancing standpoint? You have what about $7,000,000 due in 20 20, when should we sort of expect you to start looking at the refinancing that you possibly might have to do in 2021? Yes. We will refinance the plan is to refinance the remaining of the preferred sometime towards the end of 2020 because in 2021 the coupon steps up to 14% and obviously, we don't want to do that. So the plan is to refinance it at some point within this year. Within next year. Yes, within this coming year. And in terms of debt, there is no urgency to refinance anything. We have no balloons. We have capacity excess we have borrowing capacity in one of our ships, Texania. And there is a possibility if we need to liquidity to invest, we can refinance 1 of our ships to increase by increasing the debt to create investment capacity, more investment capacity from what we already have. We have some. And would you highlight how much financing capacity that's on the Zena? I think probably $4,000,000 to $5,000,000 Great. Thank you so much. Thank you, Paul. Thanks for taking my questions. Thank you. There are no further questions at this time. I would now like to hand the floor back to Mr. Peter. Thank you all for listening in into our conference call this quarter and we'll be with you in next year, early next year to discuss how the year ended and what we think will happen. Thank you very much. Thank you, guys. Thanks, everybody. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.