You for standing by, ladies and gentlemen, and welcome to the Tsakos Energy Navigation Conference Call on the 4th Quarter and Year End Financial Results. We have with us Mr. Takos Arapoglou, Chairman of the Board Mr. Nicholas Tsakos, President and CEO Mr. Paul Durham, Chief Financial Officer and Mr.
George Saroglou, Chief Operating 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 the conference is being recorded today. And I now pass the floor to Mr.
Nicholas Bornozis, President of Capital Link, Investor Relations Advisor of Tsakos Energy Navigations. Please go ahead, sir.
Thank you very much, and good morning to all of our participants. This is Nicolas Bonheus of Capital Link, Investor Relations Advisor to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the Q4 and full year 2018. In case we do not have a copy of today's earnings release, please call us at 212-661-7566 or email us at 10 10capitallink.com, and we will email a copy to you right away. Please note that parallel to today's conference call, there is also a live audio and slide webcast, which can be accessed on the company's website on the front page at www.tenn.gr.
The conference call will follow the presentation slides, so please, we urge you to access the presentation of the webcast. Please note that the slides of the webcast will be available as an archive on the company's website after the conference call. Also, please note that the slides of the webcast presentation are user controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. At this time, I would like to read the Safe Harbor statement. This conference call and slide presentation of the webcast contain certain forward looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward looking statements involve risks and uncertainties, which may affect TEN's business prospects and results of operations. Such risks are more fully disclosed in TEN's filings with the Securities and Exchange Commission. And before turning the floor over to the company, I would like to mention 2 things. First of all, on Monday, April 1, 2019, next week, the company's management will be participating at the Capital Limited International Shipping Conference in New York. Then on Wednesday, April 3, 2019, the company is hosting an Investor and Analyst Day of its own in New York.
Those of you interested to join the Investor and Analyst Day, please contact us at Capital Link, and we'll be happy to have you. You can call us at 212-66175 66. And now I will turn over the call to Mr. Takis Arapoglou, the Chairman of the Board of Tsakos Energy Navigation. Mr.
Arapoglou, please go ahead, sir.
Thank you, Nicolas. Good morning, everyone. Thank you for joining us today. Coming out of the longest bad market ever with positive operating performance, being able to pay obligations and a steady dividend is quite an achievement, confirming our operating model and our supreme industrial platform. It's important to note that we have managed to repay debt equivalent to $2 per share and to maintain a cash position of $2.5 per share equivalent.
And now with a stronger market in the 4th quarter, continuing at admittedly lower case in 2019, We're benefiting from our profit sharing arrangements and look forward to a stronger year, positioning for growth and for renewing our fleet and further growing our platform. Once again, I'd like to congratulate on behalf of the Board, Mr. Exakos and his colleagues, his team and wish them an equally successful 2019. That's it from me for now. Over to you, Nikos Tsakos.
Thank you.
Thank you, Chairman. And with you and the Board's support, hopefully, 2019 would be a much better year than 2018. 2018, to put it with a few words, was 0. It was a rough year, as you said, with a happy ending at the later part. The first three quarters, we experienced one of the worst spot tanker markets in recent memory.
However, the last part of the year and speaking over in the Q1 has been much more rewarding. Since the beginning of the year, and we are very close to the end of the new quarter, the market has the rates have normalized, but they have normalized at healthy and accretive levels. The VLCCs have averaged in the since the beginning of the year in the mid-30s, the Suezmaxes in the 20s together with the Aframaxes. The LR2s have done even better than that. Our clean inverters have done significantly better than that.
And even the product carriers are enjoying a period of revival with levels in the mid-20s for the larger vessels, the 50,000 plus category and upper teens for the 37,000 toners. So all the levels that we are enjoying in the spot market are accretive levels and we are looking forward even if we do not exactly believe, hopefully, it's true, the forecast that Mr. Saroglou will take you from various brokers that show a very strong revival of the market after in the second half, mainly due to the 2020 legislation taking ships out of competition for a significant period of time. I think the most important change that we have seen after a very tough year in 2018 was the company has been able again to continue its positive cash flow, positive operating cash flow, maintaining our dividend, continuously repaying significant, reducing our debt significantly. As the Chairman said, we have reduced $2 per share worth of debt and we are steadily maintaining always a strong liquidity of at least $2.5 per share for those of you, just to put it, that we are we have about 90,000,000 shares outstanding as a company.
But as I was saying, the most important part is that the psychology has changed and a big number of our charters are looking to take up to 3 years or even longer of accretive cover on existing tonnage. We are seeing the same with the LNG market. We have been fortunate to charter our ships out at accretive rates for the next couple of years. So we are looking, and I will talk later about this to grow this business significantly. And in our strategic relationships, after taking delivery last year of 15 vessels, growing the fleet by 30%, all of them with long term charters, we are now building 4 ships, all of them against very long employment.
So we believe, as we always said, to build responsibly and not to bring tonnage in the market with no employment. The company right now has 14 vessels on the fuel spot and 19 vessels on profit sharing arrangements, which allows us to take advantage of the movements in the market, however, maintaining a very good protection to our bottom line. And with this, I would ask Mr. Saroglou to give us the his report on the 2018 operating performance of the company and the beginning of the year since June. Thank you very much, Nikos, and good morning to all of you.
In our last earnings call back in November, we talked about the brighter prospects of the tanker market that were starting to emerge after 3 challenging quarters in 2018. Today, we report the operating and financial results of the Q4 of 2018, which are positive again. We are happy to reiterate our belief that the process for the tanker market continue to be favorable. Main drivers behind the market strength since the start of Q4 are, strong global oil demand growing year over year in excess of 1.3 dollars to 1,400,000 barrels per day. Higher OPEC and Russian production during the seasonally strong Q4 of 2018.
Strong crude oil exports from the United States, which added ton miles and global fleet utilization. Limited vessel supply as the global tanker fleet had very little growth in 2018, thanks to the highest scrapping levels since 2012. This environment, we saw and continue to see strong appetite by oil majors to partner with our company in accretive long term business projects and also extend charters as improved and profitable for the bottom line rates on existing vessels of the fleet as the company's recent announcements then on sale. Moving to Slide number 2. The left side presents the all in breakeven cost for the various vessel types that we operate in the company.
As you can see, the cost base is low. In addition to the low shipbuilding costs, we must highlight the purchasing power of Sacros Colombia Ship Management, our technical managers, and the continuous cost control efforts to maintain a low OpEx coverage for the fleet while keeping a very high fleet utilization rate quarter after quarter. Again, we reported utilization in excess of 96% that we believe qualifies as full employment. TEN's diversified fleet with the optionality it offers combined with its flexible chartering strategy ensures that Penn continues to maintain an impeccable debt service record and meet all its obligations irrespective of where the market cycle where we are in the market cycle. In addition, thanks to the profit sharing element that is part in a big portion of our fleet, then benefits when market conditions improve like now.
Based on the current market strength and the number of vessels operating in the spot market and in time charters with profit sharing, for every $1,000 increase in spot market rates, we have a positive $0.06 impact in annual earnings per share. Here we see in Slide number 3 the pro form a fleet. And we have 33 vessels from fixed rate time charters and 35 vessels or 51 percent of the pro form a fleet with spot market exposure in a combination of pure spot, POAs and time charters with profit sharing and minmax formulas. On average, we have 2.3 years of employment fixed forward and a backlog of $1,200,000,000 in minimum contracted revenue. Global oil demand continues to be strong.
Last year, it grew by 1,300,000 barrels per day. The expectation for 2019 is another growth year, adding 1,400,000 barrels per day of additional growth. The Q4 of 2018, for the first time, global oil demand was above 100,000,000 barrels per day. The next two slides talk about the supply of tankers. And as we see on the supply, scrapping continues to be high.
Fleet growth is low as the order book continues to decline. The introduction of new environmental regulations like the IMO 2020 sulfur cap from next year and the water ballast implementation from this year are expected to affect a big part of the tanker fleet that is approaching 20 years and have their next scheduled special survey before 2020. Therefore, tanker fleet growth in the next 2 to 3 years is expected to remain below the 3% and declining. Last slide, Slide number 7. The company announced today a $0.05 dividend.
The dividend chart presents the annual dollar value of all the common share dividends the company paid since 2002, which totaled 475,000,000 dollars or $10.81 per share. Graph on the right side of the slide is a forecast from Fearnleys, a well known ship broker from Norway. As you can see, VLCC rates are expected to trend higher from the start of the second half of twenty nineteen and reach multiyear highs. We are also positive about the market prospects and expect a strong market for all vessel categories. That concludes the operational part of our presentation.
Paul will walk you through the financial highlights for the Q4 full year. Paul? Thank you, George.
So after 3 difficult quarters, 2018 at last ended with a strong quarter, generating $26,300,000 operating income before impairment charges. Net income was $2,800,000 before impairment. But if we were allowed to exclude the unexpected end of year non cash bunker hedge valuation, net income would have been $13,600,000 A positive turn in crude tanker rates helped revenues increase by 14%. 9 Aframaxes on the spot earned $20,000 a day. 3 Suezmaxes on spot earned over $26,000 daily.
And the 2 VLCCs averaged $34,000 2 LNG carriers also enjoyed higher daily rates, earning $10,000 to $13,000 more than in the prior quarter 4, and since the year end, seeing rates increase further. We also saw meaningful profit share, especially from the Suezmaxes on profit share time charters, which resulted in a doubling their minimum hire rate. As a consequence, fleet average daily TC per ship increased by 17% to over $21,400 Total OpEx fell by 2% due to tight cost control, as George has mentioned, and to a stronger dollar. As a result, daily average OpEx per vessel was $7,715 with a simpler figure for the year, low levels by industry standards. Depreciation, amortization and G and A costs all remained at similar levels to the prior quarter 4 year.
5 of our older vessels are earmarked for possible sale. This decision affects their future cash flow, resulting in impairment charges of $66,000,000 reducing future depreciation charges by $1,000,000 per quarter. Finance costs increased due to higher interest rates offset by the effect of lower outstanding debt and the surprise fall in oil prices hitting year end bunker hedges, hedge valuations by nearly $11,000,000 Fortunately, valuations are already strongly back into positive territory as oil prices recover. However, in quarter 4, there were also cash gains of $3,700,000 received from Bunker Hedges. Actually, Bunker Hedge cash gains for the year totaled $9,900,000 So the overall impact of such hedges on 2018 net income was only $1,000,000 Total Q4 EBITDA was over $66,000,000 a 25% increase from the prior quarter 4, almost all vessels generating positive EBITDA.
And for the year, dollars 190,000,000 EBITDA, the year ending with a cash balance of $220,000,000 In quarter 4, there were net repayments of $28,000,000 bringing total debt down to $1,610,000,000 at year end, dollars 156,000,000 less than at the prior year end, adding $2 to the value per share and leaving net debt to capital at 48%. Finally, we are building 4 vessels for charter, dollars 25,000,000 cash has been paid in this respect to date. Most of the remainder will be paid by debt on excellent terms. And more finally, we believe this will be a good year for the sector and especially for TEN. We expect sale of vessels will release cash for accretive projects under consideration.
And this concludes my comments. And now I'll pass the call back to Nikolas.
Thank you. Thank you all very much. And as we previously said, 2018, I think, is behind us with a difficult year, but it has prepared the ground for an environment that I hope George's concern is right on the prediction, but I have to tell you, we are not taking decision based on this graph. I hope it's wrong, but then we will not be very happy if this comes through, but this is not influencing how we take our decisions. And with this, I would like to open the floor for any questions.
Thank you.
Thank you. We'll now take our first question. It comes from the
line of Ben Nolan. Your line is open.
Great. So I had caught me a little off guard there. I had a couple of questions actually. Number 1 is, as you look and obviously with the Suezmaxes and the Aframaxes before, it seems like almost everything in terms of appetite for long term charters from your customers has been on the crude tanker market. I was curious if there is any upside at all on the smaller size vessels for long term new builds and or is that not really something that is out there?
Thank you, Ben. Well, it is building up. I mean, you see companies like Exxon coming out and taking the product $50,000 to $37,000 or $53,000 on employment. But I think it starts with Suezmax and Aframax. For some reason, that's the flavor of this quarter.
And then it trickles down to the smaller sizes. So I would say the biggest interest that we are seeing today is Aframaxes, which means that with all these embargoes and protection is measured that are taking people or owners as well charters are looking for as a more flexible size of vessel, so they don't have to carry 1,000,000 barrels or 2 on the ship. So this is the biggest interest as we speak today and it goes to the smaller sizes. But Aframaxes is by far the biggest interest.
Interesting. And then I have just a couple of financial questions, Paul, for you. Could you maybe tell me what is the debt amortization schedule as it stands today for this year and next?
Sorry,
did that answer today?
Last thing, we're looking at scheduled repayments of $165,000,000
Similar to 2018, very similar. Yes. And going forward, similar kind of numbers, 2020 about $171,000,000 And then as debt starts coming down quite rapidly, we see in 2021, it's going down to about 147,000,000 and then the following year, 121,000,000 So it is coming down quite rapidly. And of course, there are balloons as well. No more balloons this year.
But in 2020, there will be about we reckon about €40,000,000 dollars 2021 is about 140,000,000
No, that's very detailed. I appreciate it, Paul. And then lastly for me, sort of along those lines, obviously, there was the $66,000,000 impairment this quarter related to the 5 vessels which you might be selling. Just curious if you've done any of the math and if looking at the remainder of the fleet, particularly some of those older vessels that might be coming available to sale as you go forward. Do you think that there are more of these pretty sizable impairments that might be coming down the line?
And if so, how does that, if at all, impact any of your loan covenants?
Well, as you know, we have very we have always followed a very conservative debt to equity. So I think we're under 50% as we speak today. And we have a big number of banks competing for TEN's business because we must be one of the very few at least publicly traded companies that since 1993 when we have been established, we have not reorganized at all our structures, but all I know about that, we'll be paying debt as scheduled initially from the beginning. And as Paul said, 2017 2018 were the heavy years for our debt repayments after 2019, as we go through 2019, that becomes less. So we do not expect to have any issues with our banks.
I think they look at it as a heavy action to allow for transactions to take place. As of your question, I think in the next couple of years, depending on market conditions, we might have a maximum of $50,000,000 of impaired hydro vessels grow over there. But this is something that depends on market conditions.
Thanks for more interest in any case on the fair market of the value, not so much the book value. So yes, we've been pretty consistent with the banks. They kind of never effectively bother us with regards to potential noncompliance or impairments. Am I right?
Yes, that makes sense.
Particularly, I have a point. I'm still a young fleet, so we don't really anticipate much more. But bear in mind, however, that we are always looking to keep a youngish fleet and sell vessels once they've gone over 10, 12 years. As soon as we start making that kind of decision, you're obliged to really to take that into account in the cash flow testing like we did this time. And that creates a large impairment.
Okay. No, that all makes sense. And I appreciate the time, guys. Thanks a lot.
Thank you. Our next question is from Fotis Giannakoulis from Morgan Stanley. Your line is open.
Yes. Hello and thank you. Nick, you mentioned about the interest of charters to provide long term employment, are you referring to your existing ships or the potential acquisition of additional ships? And if the market is not so cooperative as George or the brokers and analysts predict for next year, Which are the steps that you are willing to take to protect your liquidity? And if you can give us an estimate, what is the minimum cash balance that you will accept to have?
Well, starting with your first question, I think
both. So right now, we have a lot of appetite for almost all our charter free upfront markets for 3 to 5 year employment and at very interesting rates. We are pushing for profit sharing and this is something that we always like to get, take advantage of the high market. And of course, for new build investments, however, we do not consider a 2 or a 3 year employment enough to build the vessel. So we want to see something with 5 years and above that.
As you know, we have always we always want to maintain strong liquidity. And I think anything above $150,000,000 is something that we want to continue to maintain. If you look historically, if you go back in 10 years, I don't think we have been under $150,000,000 ever in the recent 10 years.
And allow me to insist a little bit on that. And I know that our outlook as analysts, and I assume for a lot of investors, is very positive. But if things do not develop as we expect, how are you planning to protect this liquidity? And just to give you some example, give up the growth or give up your dividend or raise new equity or raise additional capital somehow. Can you give us can you rank as your preferences of how you think of strengthening your liquidity position, especially given the anticipated repayment of the preferred that have escalating interest costs?
Yes. I think our first choice is by and the reason we incurred 5 or 6 of our assets is by sales of ships that will release the sales of the ships we are talking about will release in excess of $100,000,000 to our cash. And these are the ones that we are already in discussions for, and that's the reason we had we paid, I think, 5 or 6 of the vessels. So that is the first way to maintain our liquidity. And our growth right now, we have 4 ships after having a huge growth expansion in the last couple of years.
Now we have we're down to 4 vessels of which, as Fortune, the majority of our investment as equity has been already made and the remaining will be conservative debt finance. That's what we see very good terms. We're talking about interest rates under 150 basis points above LIBOR in that neighborhood. And you know that we are very for us, dividend is an important part, but the company continues to pay dividends. So I think starting with sales of ships, And of course, all this with the market is not performing as we all hope until we finally perform.
And one last question, a little bit of a strategic long term thinking that you can share with us. A lot of people are concerned about the growing penetration of renewables and the potential decline in oil demand for transportation. I know this is not a 1 or 2 or 5 year discussion. But when you buy assets, you buy for 20 or 25 years. How do you view how does this increase in renewables impact your decision to expand your fleet and buy or not buy any assets?
Well, I'll tell you this is a very valid point. We have always been looking to see when is peak oil, which peak oil period, now we're talking about 230,000,002,030, 2,035, And an answer to this is an increased investment on the gas side, which is something that we would like to be doing. So you will see us balancing the fleet going forward also by increasing the interest in the investment in between LNG. Dollars Thank you very much, Mick.
Thank you. And our final question is from George Berman from IFS Securities.
Good afternoon, gentlemen. Great report.
Hello?
Yes, we're here.
Okay. I have a couple of questions. The new contract announced for your LNG ships on March 15, Does that pencil out that you got a lower rate versus what they were on?
A much higher rate, significantly
higher. Also, Paul mentioned this in his financial presentation. We have a significant increase of the rate.
And you have fixed the rate basically for 36 months?
That's right.
Okay. The valuation charge you took this in the Q4 for $66,000,000 In general, this would indicate that your depreciation over the years was not sufficient to cover the final proceeds from when you sell those ships, right?
Yes. I think depreciation in shipping is for all the companies. I guess like the perhaps aviation is similar. It's the residual value, which has to do with the scrap. They
have to
buy by about 25 year economical life of an asset. However, and I think if the market drops much more than that, your statement is correct, but the market is very liquid and it has a lot of fluctuation. So the ships in the market will have a couple of good years, these vessels could double in money. So the reason we're taking this option right now is because we are selling those vessels. We would not have been selling something like that out of the blue.
Yes. So for various reasons at this point in time, the values are less than you anticipated than 5 or 10 years ago when you acquired those ships, right?
I do. I've reached the end of the time, yes.
Yes. Okay. And it would be fair to state that if Wade has expected rise in the VLCC, Suez and Aframax area, the values of those ships would then increase simply because people say, well, if I can get $75,000 for VLCC voyage, I pay more for the vessel.
Exactly. It's a liquid market.
Okay. General questions to your company stock. I've been involved as shareholder of the company for the last 3, 4 years. There's been a consistent drop down in the value. You have a number of preferred issues.
I don't know if they are redeemable or perpetual preferred. You as the management team cannot be very happy with the stock price performance. What would you tell an investor why they should invest today in Tsakos? Taking the $66,000,000 impairment charge out, you would have probably earned close to $0.13 a share above all estimates. You seem to win the company very well.
You have a very good handle on the marketplace, a mixture of fixed and spot rates and profit share.
What do you
think needs to happen for the shipping companies in general and yours in particular to receive a stronger valuation in the market?
Well, I think you hit the point. What has happened is that a lot of investors mainly in other companies, have been disappointed and there's not enough interest in the energy and tanker sector. We have been, as we said, the value of the company and we are the largest we have the management and the largest shareholders. So that I would say the pain and the disappointment in Sweden is twice as big because we're all in excess of 40% of the company. We've been buying during the periods that we can buy almost on a daily basis as investors in the company.
So we are looking forward to go through an environment of at least 6 to 9 months positive years. In 2016, our company was at $10 a share. So we have and not only ourselves. And nothing really has changed. We have navigated the company, grown at the same time.
So my aim is to see the company back at $10 a $7 to over 3 years ago. We actually used our shares at that time to purchase vessels because you have when you are at net asset value or above, you can use shares as a tool to grow your company, something, of course, we cannot do right now because the share price is very low.
So we hope we will
have a sustainable environment in the tanker market for the next 6 to 9 months that will allow at least the share price to come from what it is today.
Okay. Then one last thing, with the upcoming IMO 2020, could you remind us briefly on how you're positioned for the upcoming low sulfur situation there?
Yes. I mean, we are not one of these companies that is we are not selling scrubbers. We are not selling the scrubber dream to anybody. We believe that personally, I believe that the open loop scrubber is something very negative for the environment and for the future of our children. So I'm not but this is not a conversation about scrubbers.
And this is the reason we have not invested in scrubbers in any of the ships other than the ones that our charters are paying for and they're insisting. So we will end up to have perhaps a 10% of our fleet more or less that will have scrubbers that will be run with scrubbers, but that will be all paid by the charters. Also all the downtime would be paid by the charters.
And then your rest of your fleet would essentially utilize the low sulfur fuel as it becomes available worldwide?
Yes. I think this is true. And having the majority of our fleet in excess of 70% on long term charters and we are fixing all our vessels on charters to go well after the 2020 deadline, so 2021, 2022. And this means that all the responsibility for the vast majority possibility for bankers will be supplied by the charters, by our clients.
So in other words, if fuel is for low sulfur fuel is $200 a tonne more than the old type, you are not responsible for it. Your profit margins are not going to be cramped. You have a built in contract.
Yes, exactly. We have we will be affected if this is the case, which I don't believe, I think we will be seeing a very quick normalization of the prices. I think perhaps on average for 20 20, it will be perhaps even $100 $100 of difference and then it will be normalized. But our exposure is very minimal because we have a very small amount of our ships, 30% in the spot market.
And in the spot market, you would then contract that the additional fuel costs would be absorbed by the actual charter?
In the spot market, at the end, yes, the end user will be absorbing the cost. We will have in the spot market to face to pay the bankers, but the traveler will pay in the freight.
Right. And if the charterer wants to pay for your scrubbers, you say go ahead?
Yes, we do. I mean, they are our clients. The clients always drive, as we say, in the service business. So yes.
Right. In the overall shipping market, who do you who would you think are your most immediate competitors? Who do you compete on day to day the most?
Well, this is a huge market. It's a huge global market. So it's not competition, of course, is there. I mean, we have I would not call them competitors. We can call them our peer group.
And I think that peer group, our companies, well run companies like Euronav, which is a very good company. TK Shipping, which is a very on the large ships front line, double hull. And of course, not forget NAT, which is a very dynamic and colorful also company.
Yes, yes. Okay. You had mentioned that primarily when you sell the older ships, you would utilize funds received there to possibly renew or add to your fleet, particularly in the LNG sector. Do you think that there are any opportunities to acquire an existing company, an existing fleet? You just mentioned a few names, some of which are trading at similar to yourself at very distant values.
And in general, I've seen reports where all shipping companies trade significantly below their net asset value. So what do you think about availability of 1 or the other acquisition of an existing shipping line?
Well, I think consolidation, it is it's positive. However, you do not unless you are there to buy a company and immediately de liquidate the company, in shipping I'm talking, you don't really have the same effect of consolidation as you have in other businesses. Because regardless who owns the ships, the ships are in the water and are competing in the same market. So really, the consolidation, you can have an easier consolidation, I would say, a more effective consolidation by pulling our engines. So the synergies really in shipping are not so huge.
We are a part of a larger group that operates about 500 ships, manages 500 ships. So I want to believe that our running expenses are low and we try to make them lower. Even if we bought the frontline or if we merge with another company, I don't think this would have changed that much. The model of huge contamination, you can achieve it only if you pull, which means you don't have to buy it, it's our chips, but you can pull your commercial activities, so you don't under attack each
other. Okay.
All right. Thanks very much for your time today and good luck for the future.
Thank you very much. Thank you for your support. And again, I would like to we're looking very forward like every year when we announce our end of the year results and every quarter, parts of the management is coming. I'll be the CEO and a big part of the management. We will be in New York next week for Capital Link, the CMA, the Connecticut Maritime Association and various other events that are happening.
Recently, we are arranging a get together around noon on Wednesday with our shareholders and analysts. We would love to see as many of you as you would like there and ask you can ask any more questions. And we want to thank you all for your support and all the hope that 2019, we can see at least a share price double to what it is. Let's not forget that we pay repaid debt of $2 a share. We have cash of $2.5 a share.
So and that's $4.5 and our share is just about $3 So we have all to work to the right to make this to go accrues. Thank you very much.
Mikko, we have more questions from we
have one more question from Randy Giveans from Jefferies. Your line is open.
Hey, thanks for squeezing me in guys. How are you all?
Well, Randy, we're seeing you on Tuesday. You could ask me a question then. I'm joking. Go ahead, Randy. Thank you.
Yes, sir. Just a few
quick ones. So looking kind
of bigger picture, just market related, obviously, you've been a lot of news of increasing U. S. Crude exports. So the vast majority
of these are some VLCCs to Asia.
Have you also seen some increased demand for the Aframaxes?
Yes. I think we have a combined effect of embargo measures. And I think we have a lot of the big vessels, as you said, bringing or taking a lot of vessels from the U. S. So as you know, the U.
S. Harbors are not all of them made for VLCC. So the Aframaxes are doing a lot of the lightering. So there is demand on the Aframaxes for that. We are also seeing a lot of due to the embargo, India and China, in some cases, are trying are taking more cargo from West Africa.
So this is more turning miles. There are quite a few ships blocked in Venezuela, which is a question mark. And of course, we have the unfortunate event in the system, who would have we also have ships being blocked there. So this creates more miles. So it is it's a little bit more than the usual discrepancies happening.
And of course, as the year goes on, we have a discrepancy of the 2020 with some ships already been scheduled to get out of the market for to be scrubberized.
Got it. All right.
A few more rapid fire questions for me here. So looking at dry docking, I know you strategically pulled forward some to get ahead of maybe balance to our treatment regulations and whatnot. So what is your expectation now for dry docking in 2019 2020?
Okay. In this Q1 in 2019, we've done this Bellini and Salamina. In quarter 2, we have another 2 vessels, World Harmony and Shantel. Quarter 3, we'll do Risafe Princess and Saint Athlon and Masahe will probably have couple in quarter 4.
So I
think a well measured year for
our dry docks.
Got a similar cadence in 2020? Or will most of it be done this
year? 2020 will be
a few more. It will
probably be similar kind of pattern. We try to spread them evenly over the year. Obviously, when we get towards the end of the year, we'll decide whether to push it one side or the other. But generally, it's evenly spread. So you can count on an average about 2 to 3 per quarter.
All right. And then I noticed 2 things in your slides. Looking at Slide 5 first, you show only 9 VLCCs to be delivered in 2019 and then 60 in 2020. So do you expect that much a kind of significant slippage this year and a record number of deliveries next year?
There is quite a number of ships that because of 2020 have been scrubberized. They are delaying the deliveries. But I'm not saying to that effect for this. So when it's checked, Yes. I think there is a numerical discrepancy.
So it would be like, I think, here on the slide.
Okay. Okay. Yes, I wasn't sure if you were just expecting that many kind of back half vessels just to all get pushed into 2020 or this has already been about 14, I think, delivered 14 to 16 in 2019. But okay, that's fine. Looking at Slide 7.
This is the remaining order book.
Sure. Okay.
One more presentation question, Slide 7. It shows here you paid $13,000,000 in dividends in 2018. So that's basically 3 quarterly payments of $0.05 a share, dollars 4,400,000 each. So I guess what was what happened? Was it a timing issue for the 4th dividend payment?
And then going forward, any plans on increasing it? Obviously, your coverage ratios are extremely high in this market.
Well, as I said, we are very interested in increasing the dividend. So I think this dividend coincides with the 4th actual dividend for 2018, it's the 4th quarter. And our intention, if Ioannis right, we would like very much to increase the dividend in because this is something that affects us directly as a company and of course as shareholders.
Okay. And then last question, just a follow-up on the previous questions. You mentioned 10% of your fleet will likely have scrubbers. Now will those be installed this year? And will the charterer pay for the scrubber upfront?
Or will they pay you back over time via an increase in your daily charter rate?
That's a very, very good question. It's a mixed basket. I think 50%, we will they will pay us they will pay for everything upfront. And then a couple of ships, we are negotiating with them to increase the rate for the next and extend the charter so they will repay. So I would say a mixed bag.
The majority will be there to cover the total cost upfront. Okay.
And then just the timing on that. It looks like you have maybe you tell me if you've yet to kind of formalize the order. And if so, will you be able to formalize an order in April and still get it installed by 4Q 2019, 1Q 2020?
Yes. I think we are looking to have 2 scrubberized vessels for our clients within the 3rd quarter. And then the remaining starting in 2020. I have to say that there are enthusiasm also for because those are ships that have 5 10 year employment. So their enthusiasm has been dropping.
6 months ago, they were on the phone every day making calculations with the technical department pushing us towards everything. I think they tend to feel that perhaps the spread might not be as aggressive as they initially thought. So they're not they are not calling us to get scrubberized as much right now. So no news, good news.
Okay. All right. Well, hey, that's great color. Thank you again, and yes, I'll see you next week.
Thank you. And hopefully, you'll join we'll see
you when you join us for our shareholders event on Wednesday.
Okay. You have a good one.
Thank you. Nicolas?
I think we are at the end.
Thank you. Again, thank you very much for your support. Looking forward to see as many of you, I think Nick is keeping some slots there in his pocket for Capital Link on Monday. If anybody wants to come close and pass on, please talk to Nick, and we're looking forward to see you all next week. All the best.
Thank you.