Global Ship Lease Inc (GSL) 2011 Q2 法說會逐字稿

Good day, everyone, and welcome to the Global Ship Lease Q2 2011 conference call. This call is being recorded. Joining us today on the call are Mr. Ian Webber, the Chief Executive Officer, and Ms. Susan Cook, the Chief Financial Officer. We will conduct a question-and-answer session after the opening remarks. Instructions will follow at that time.

I will now turn the call over to Mr. Webber. Please go ahead, sir.

Thank you very much. Good morning, everybody, and thank you for joining us today. As normal, we hope you have had a chance to look at the earnings release that we issued earlier today and been able to access via our website the slides that accompany this call.

Again as normal, I would like to remind you on slides one and two that today's call may include forward-looking statements that are based on current expectations and assumptions and are by their nature inherently uncertain and outside the Company's control. Actual results may differ materially from these forward-looking statements due to many factors including those described in the Safe Harbor section of the slide presentation.

We also draw your attention to the risk factors section of our annual report on Form 20-F filed on May 19, 2011, which you can access via our website or via the SEC's. All of our statements are qualified by these and other disclosures in our reports filed with the SEC. We do not undertake any duty to update forward-looking statements.

For reconciliations of the non-GAAP financial measures to which we will refer during this call to the most directly comparable measures calculated and presented in accordance with GAAP, you should refer to the earnings release that we issued this morning also available on our website at www.GlobalShipLease.com.

I would like to start by reviewing the second-quarter highlights. We will then discuss our fleet and charter portfolio. I will make a few comments on the industry overall before turning the call over to Susan to comment further on our financials. Then we'll open the call up for questions.

Slide three shows the Company's second-quarter highlights. During the quarter, our 17 long-term fixed-rate time charters allowed us to achieve stable and predictable cash flows as per our business model. With a fully unchartered fleet, utilization levels once again remained high for the quarter.

For the second quarter, we reported revenue of $38.8 million, down slightly from second quarter 2010 mainly due to 27 days of off hire for planned drydockings covering three vessels.

EBITDA for the second quarter was $25.7 million versus $27.4 million in the second quarter last year with a decrease again mainly due to planned drydockings in 2011. There were none in 2010 together with increased crew costs from wage increases flowing through from the third quarter last year and expenses associated with drydockings including bunker fuel consumed in getting to and from the drydock facility, which as owner we bear.

Normalized net earnings for the quarter were $5.8 million. This excludes a $13.6 million non-cash impairment charge relating to the purchase options for the ZIM vessels that I will discuss in more detail later and a $3.8 million non-cash interest rate derivative mark-to-market loss.

$5.8 million for this quarter compares to normalized net income of $7.5 million for the first quarter -- for the second quarter of 2010, which excludes a non-cash mark-to-market loss of $12.5 million. On a GAAP basis, we reported a net loss for the three months ended June 30, 2011 of $11.7 million compared to a net loss of $5 million for the comparable period last year.

Consistent with our focus on maintaining a strong balance sheet, we continue to use much of our cash flow to pay down debt including $10 million paid down in the second quarter and $23.9 million paid year-to-date, we reduced our debt by a total of just over $90 million to $509 million since the fourth quarter of 2009.

I would now like to discuss the Company's options to purchase the two 4250 TEU new buildings. As I am sure you remember in November 2010, we proactively converted the contractual obligations to acquire these two vessels into purchase options to provide the Company with the right but not the obligation to purchase them. The purchase of these vessels has always been predicated on achieving a strong economic return for shareholders by acquiring the vessels against the time charters which were attached by acquiring the vessels at attractive prices and financed on favorable terms. The transaction itself remains positive with good ships and a good charter rate and we have been spending a lot of time, significant effort over the last 18 months in seeking alternative financing structures.

However, as a result of challenging economic conditions, financing is not currently available on terms that would provide the requisite returns to us. Having regard to this and the relatively short time before the options expire, one in mid-September and the other in early October, it is unlikely that we will exercise the options to purchase the vessels. As a result, we have made the decision to write off the intangible assets associated with the purchase options.

It is important to note that this action does not impact our cash position nor does it impact the underlying option contracts themselves.

As we mentioned on the last call as a result of improved asset values through 2010 and the first quarter of 2011 combined with our aggressive pay down of debt, our loan to value ratio was below 75% at the last test date of April 30, 2011. The next test date with updated vessel values will be as at the end of November 2011, so over three months away.

Whilst the Board has decided not to reinstate a dividend this time wanting to preserve the strongest possible balance sheet given the generally fragile economic conditions and the uncertain outlook for the container sector, and where asset values might come to be in November, I would like to highlight our current thoughts on the Company's dividend policy.

Firstly, the Board recognizes the importance of dividends and providing a return to common shareholders over the long-term. Secondly, the Board continues to believe that our business model supports the delivery of sustainable dividends to common shareholders. Thirdly, the Board will continue to evaluate the dividend on a quarterly basis, taking into consideration a broad list of factors to ensure that we are able to meet the objective of distributing sustainable dividends to shareholders over the long term.

Moving on, slide four shows our fleet and charter profile. This should be familiar to everybody. Our fleet of 17 container ships now has an average age of just over seven years on a TEU weighted basis against an economic life of 30 years. All the vessels remain fully committed on long-term fixed-rate time charters with contracted revenue after allowance of three days off hire per vessel per year a smoothing out the effect of drydocking and allowing for a little unplanned off hire generating revenue of approximately $155 million on an annual basis.

With an average remaining duration of close to nine years left on our time charters on a weighted basis, our fleet represents total contracted revenue of approximately $1.3 billion. Importantly given the staggered exploration of our charters, the first charter renewals are not until the end of next year and then for only two of our 17 ships. These ships are currently at $28,500 a day each and they represent approximately 13% of our revenue.

While we would not be able to renew these charters at these levels today given the current softness in the short-term charter market, we expect industry conditions will be different when we come to focus on renewal during the course of next year.

Turning to slide five, I would like to talk to you about our historical performance by looking at several key metrics over the past 3.5 years. As you can see, we have grown our fleet from 12 vessels at the beginning of 2008 to 17 vessels currently, which enables us to increase revenue, EBITDA, and operating income. During this time, we have continued to produce consistent, predictable results throughout different and difficult market environments with the exception of GAAP operating income in two quarters as noted on the slide, which were negatively impacted by impairment charges relating to the purchase options.

Additionally, our utilization rates have remained at or near 100% as a direct result of our long-term charter strategy and having a well maintained modern fleet. We believe our performance demonstrates the strength of our business model and the stability it provides within a cyclical industry.

This is perhaps a good point at which to mention drydockings, which is one of the causes of the modest variability in our results from quarter-to-quarter and which do have an impact on cash flow. Each of our vessels has to undergo a special survey including a drydocking every five years. This is in order to remain in class apart from allowing for necessary maintenance work to be performed. As we have previously mentioned, we have got seven drydockings this year and six next year.

For each drydocking, we lose between 10 and 14 days of revenue and incur on average around $1.2 million of drydock and associated costs which recapitalize and amortize over the five years to the next drydocking.

Further, as I mentioned earlier, we pick up the bill for the fuel used in steaming from where the charter releases the vessel from service and the drydock facility. For your guidance, we estimate that the average fuel costs for this year's completed and in progress drydockings is around $90,000 a vessel.

The flip side of having 13 vessels docking in a two-year period is that in the next three years, we have light planned drydockings with only two in each of 2013 and 2014 and none in 2015.

I will now make a few comments on CMA CGM, our customer, largest shareholder, and third-largest container shipping company in the world.

As I mentioned on previous calls, CMA CGM has received an investment of $500 million from the Yildirim Group in January of this year and raised over $930 million in high yield bonds in April. This has strengthened their balance sheet and allows us to remove the uncertainty language in our financial statements.

As I am sure you understand, we can't speculate on CMA CGM's position or financial strength. However, I can tell you and remind you that CMA CGM has paid all charter hire due to us even during the challenging periods of 2008 and 2009 albeit with some delay.

The charters have performed. Right now payments are completely up-to-date and there is no hire outstanding.

I would now like to review the current fundamentals of the container shipping industry. Slide six shows supply and demand fundamentals from 2000 together with world GDP growth and an index of the time charter market updated from our first-quarter call in May with more recent forecasts of growth for 2011 and 2012. That said, the forecasts of growth, supply growth don't take into account the impact of the recent macroeconomic upheavals.

The general picture which I presented on the last call hasn't changed. Whilst forecast for demand growth in 2011 have come off a little in the last two or three months and forecast supply growth has increased a little in the last two or three months, overall supply and demand growth fundamentals look positive for the industry this year and next with expectations for trade growth outstripping the estimated increase in standing capacity of the global containership fleet.

So supply demand dynamics should be favorable particularly when you take into account the use of slow steaming which absorbs capacity and seems to be here to stay.

We have seen an increased level of new orders for vessels to be delivered two or three years out, orders being placed in the first half of this year, but generally these orders replace deliveries in the first half of this year, where particularly Q2 saw heavy deliveries with some 40% of scheduled full-year deliveries in that one quarter.

And so currently the order book is still under 30% of standing capacity, which is about the same as it was at the end of 2010 and remaining significantly down from a peak of 60% at the end of 2008. Idle capacity which has peaked at 12% and that was probably around the end of 2009, has been less than 2% for most of 2011.

Most of the new vessels that have been delivered this year have been post-Panamax or super post-Panamax. Many of these have been deployed in the long haul East-West trade lanes, which have historically been very sensitive to excess capacity or perceived excess capacity. This combined with worries about the global economy and the strengths of exports from China both to Europe and to North America has led to softness in freight rates in these mainline trades despite increased volumes. And we understand from industry comments, reasonable load factors.

Accordingly, second-quarter results reported so far by the liner companies have been weak and many are cautious about the rest of the year.

The next two or three months will be key as carriers try to secure freight rate increases during the peak shipping season on the main East-West trades.

Last quarter I observed that both charter rates and asset values had been essentially flat for three or four months. The uncertainty, the uncertain outlook for carriers generally reducing demand for chartered vessels reinforced by the cascade of midsize tonnage driven by the deployment of new larger vessels on those mainline East-West trades has negatively affected the charter market where short-term rates have come under pressure.

There hasn't been a great deal of activity in the sale and purchase market and it's difficult to tell what's happened to asset values although they will be softer than earlier in the year.

On financing, credit markets remained tight, although some banks are definitely open for new business particularly for lending against contracted revenue streams such as from a long-term charter and with the security of a vessel.

Raising capital in the public markets is, as I'm sure you will understand, currently very challenging and in large measure was behind our decision to write off the intangible assets associated with the purchase options. But this will change. As always, we remain focused on preserving our financial strength and flexibility over the long term.

I will now turn the call over to Susan.

Thank you, Ian. Slide eight shows our financial results. We generated revenue of $38.8 million in the second quarter, down from $39.6 million in the comparable period of 2010 mainly due to 27 days off hire for planned drydockings across three vessels.

For the six months year-to-date, revenue was $77.9 million, down $900,000 on revenue of $78.8 million in the comparative period mainly due to the drydockings.

We had five unplanned off hire days in the quarter which together with the 27 planned off hire days give utilization of 97.9% against 100% utilization in the second quarter of 2010 when there were no off hire days.

For the six-month period ended June 30, 2011, there were 30 planned off hire days and five unplanned off hire days giving utilization of 98.9% against two unplanned off hire days and utilization of 99.9% for the 2010 period.

Vessel operating expenses were $11.3 million for Q2 2011. The average cost per ownership day was $7,275, up $261 or 3.7% on $7,014 for the rolling four quarters ended March 31, 2011. The increase is due to higher crew costs from the third quarter of 2010 as a result of inflation and adverse exchange rate movements as some crude costs are denominated in euros as well as costs expensed in the second quarter 2011 relating to drydockings including bunker fuel consumed in steaming to and from the drydock facilities.

For the six months ended June 30, 2011, vessel operating expenses were $22.3 million or an average $7,247 per day compared to $19.7 million in the same period of 2010 or $6,418 per day.

Ian has already covered the $13.6 million impairment charge which has arisen because committed financing to purchase the two ZIM vessels is not currently available on terms that provide us with the required economics. Consequently and given the short time before the [options] expire, we have taken the prudent decision to write off the intangible assets relating to the purchase options which has no impact on our cash position.

Depreciation for the second quarter was $10 million the same as the comparable period of 2010 as there were no changes to the fleet. Similarly, depreciation for the six months ended June 30, 2011 was $19.9, the same as the comparative period in 2010.

We incurred general and administrative costs in the second quarter 2011 of $1.9 million which compares to $2.1 million for the comparable period of 2010.

G&A costs for the six months ended June 30, 2011 were $3.8 million compared to $3.9 million in 2010. Interest expense excluding the effective interest rate derivatives which do not qualify for hedge accounting were $5.1 million for the three months ended June 30, 2011 based on the Company's total borrowings under both the credit facility and $48 million of preferred shares that averaged $567 million.

Second quarter 2011 benefited from a 50 basis point reduction in margin as of May 1 as a result of the loan-to-value test at the end of April as well as lower average debt outstanding due to pre-payments.

Interest expense was $6 million in the second quarter of 2010. For the six months ended June 30, 2011, interest expense excluding the effect of our swaps was $10.7 million compared to the first half of 2010 of $11.9 million. Interest income is not material.

We have hedged our interest-rate exposure by entering into derivatives that swap floating-rate debt for fixed-rate debt to provide long-term stability and predictability to cash flows. These hedges do not qualify for hedge accounting under US GAAP and therefore the outstanding hedges are marked to market at each period end with a change in fair value being booked to the income and expenditure account.

The Company's derivative hedging instruments gave an $8.7 million loss in the three months ended June 30, 2011. Of this amount, $4.9 million was a realized loss for settlements of swaps in the period and $3.8 million was an unrealized loss for revaluation of the balance sheet position. This compares to a $16.4 million loss in the three months ended June 30, 2010, of which $3.9 million was a realized loss and $12.5 million was unrealized.

For the six months ended June 30, 2011, the total loss from the swaps was $8.5 million, which was $9.7 million realized and $1.2 million in unrealized gain. This compares to a total loss in the six months ended June 30, 2010 of $25.7 million, of which $8.3 million was realized and $17.3 million unrealized. At June 30, 2011, the total mark-to-market unrealized loss recognized as a liability on our balance sheet was $43.3 million. As you know, unrealized mark-to-market adjustments have no impact on operating performance or cash generation in the period reported.

We reported a net loss for the second quarter of $11.7 million, which includes the $13.6 million impairment charge and the $3.8 million non-cash interest rate derivative mark-to-market loss.

Normalized net income adjusted for these non-cash items was $5.8 million for the second quarter 2011 compared to $7.5 million for the three months ended June 30, 2010. The reduction is mainly from the impact of scheduled drydocking and higher crew costs.

For the second quarter 2010, net loss was $5 million after $12.5 million non-cash interest rate derivative mark-to-market loss. We present normalized net earnings in addition to GAAP measures as we believe it is a useful measure with which to assess the Company's financial performance as it adjusts for the effects of non-cash and other items.

Slide nine shows the balance sheet. Key items as of June 30, 2011, include cash at $32.3 million; total assets of $954.5 million of which $906 million is vessels; total debt of $557 million including the preferred shares; and shareholders equity of $324 million. And as I mentioned previously, the balance sheet position of our interest-rate swaps was a liability of $43.3 million.

I would now like to turn the call back to Ian for closing remarks.

Thank you. Before taking your questions, on slide 10, I would like to highlight a number of Global Ship Lease's strengths that we will believe will serve the Company well as we progress through 2011 and beyond.

Firstly, although we are currently seeing a slowdown in the recovery of containerboard shipping, our business model and $1.3 billion in contracted revenue with more than nine years on average of charter contracts remaining insulates us from the direct impact of volatile freight markets.

Secondly, we have no purchase obligations and we will continue to use our cash flow to pay down debt and strengthen our balance sheet.

Thirdly, our customer CMA CGM has raised $1.4 billion in the past six months and we consider their refinancing to be complete. And that is before any asset sales. CMA CGM has had a long history of operating successfully through the cycles and additionally through the worst of those cycles, 2008 and 2009, they continue to perform on our charter hire contracts.

Fourth, as I mentioned earlier, our Board understands the importance of dividends and is committed to introducing a sustainable dividend in due course. We believe that our business model supports the delivery of dividends to common shareholders over the long-term.

Finally, we don't need to raise any capital and we are committed to maintaining a strong balance sheet for the benefit of all of our shareholders.

I would now like to hand over to the operator, who will explain the Q&A process.

(Operator Instructions). [John Race], [DRS].

Good morning, Ian. I think it's good news that you are not pursuing the ZIM ships because it will allow you to hopefully focus back on the dividend. But more on the macro side, when would you expect to see the time charter index turn up again? Is it sometime this year or do you think it's really 2012?

I think that is an impossible question to answer, John, with any precision.

I know, but you made the statement that you thought things would strengthen up and all we have seen is the time charter index go down here. I was just wondering what gives you the assurance that you will see it go up and when did you think you would see it go up?

It depends on a whole basket of things, how supply demand is running in individual trade lanes, what the demand for particular size classes of container ships is from time to time. But as a sort of really, really gross generalization, unless there is a significant improvement in demand growth in the very next little while, the next month or two, the charter market, the spot charter market is likely to remain soft.

It doesn't mean it won't go up, but it's likely to remain soft for maybe the balance of this year as we move into what is traditionally a weaker sort of end of the year, but it could change quite quickly. As I said, a lot will turn on the next couple of months and what's happening in those East-West trades, whether manufacturers, retailers, importers restock the inventory levels in the US are quite low at the moment if they start building the inventory rapidly ahead of the holiday season at the end of the year. Then you could see a turn in not only the freight markets but also in the charter markets quite rapidly.

Okay, thank you.

(Operator Instructions). [Nathan Lafoon], [Harbor Capital].

Good morning, Ian. Thanks for taking my call. I have more of a macro question also. On the -- as you look at capacity supply, there are people in the drydock sector that would say it's not just 40% of the headline order book is phantom. In other words, shipbuilders maybe don't report cancellations. Everybody is very quick to announce orders. But the other side of that book in difficult times is very, very hard to assess. Do you find that there is any relationship in the container world to that kind of possible phantom number in the order book?

Thanks for the question, Nathan. The short answer is no. I think over the last couple or three years given the container sector was the sector that was suffering the most, I think anything significant in the order book that could be removed was removed and we are now looking at a relatively clean order book.

Now some of it may not be built or maybe converted, maybe deferred, but we don't think there's a huge amount of slack in the current order book, which is mostly for big vessels which as I am sure you know, the main operators are very keen to request and, because it gives huge economies of scale in the big East/West trades. There may be some slack in the smaller size order book, but overall it's not significant.

Drilling down on that, if these super post-Panamaxes, the 8 -- 13,000, 18,000 TEU ships that you would say have a high likelihood of delivery, how do you see trade on the Panamax and sub-Panamax level, Handymax level -- how did these two classes of ships compete for charters? Is there an advantage to being in the Panamax or less size? Is there a disadvantage? Drill down on that a little bit as far as outer fleet goes.

Well, we think not surprisingly it's an advantage to have Panamax and smaller as well as some of the larger ships. We do have some large ships as well, but I understand why your question.

The Panamax ships, 4000 TEU etc., are primarily deployed on North-South trades. Not only, but they are primarily deployed on North America-South America trades, Asia and South America, Australasia type trades. And they are also increasingly being used as feeder ships, bringing cargo from medium-sized exporting nations into central hubs for connection to the mainline East-West services (multiple speakers) Singapore as a [trade] shipment, for example.

Those trades, the North-South trades, have grown well in 2011 and continue to do relatively well. Furthermore, the order book for those ships generally the smaller sized ships is itself quite small. And we (technical difficulty) foresee that in a year or two's time there will be a significant shortage of those sorts of ships which will have consequent good effects on potential charter rates.

So you could in fact see a kind of bifurcated market separating these gigantic ships from the Handy size and Panamax size?

Well, not in the charter market because the really big ships don't feature in the charter market. They are still in folk's balance sheets or being financed by long-term time charters. It will be four, five, six even longer, 10 years before there's an active spot market in a 10,000 TEU container ship.

I see. One other question. I am not unhappy with the decision on the ZIM ships, but you said in your remarks that there were in fact banks that were open for business contingent upon -- if I understood you correctly -- a quality time charter and so on and so forth. Would that suggest anything about the quality of the ZIM charters?

No, absolutely not. Almost the contrary, actually. We spent a lot of time with our bank group or a number of our banks and with banks that we don't currently do business to. We spent a massive amount of time with them over the last six months or so and we have made very good progress in finding debt for these two vessels.

Nothing is agreed yet, but we can't access debt unless we have got the equity and that's where the challenge is right now is finding the 40% equity that we would need.

But aren't you kind of caught in a Catch 22 because when it comes time for [Clarksons] or somebody to value you, they don't value the charter, they value the steel.

Correct. You have to start somewhere until you get the equity in place first and then try and find debt or do you get debt in place and try to find equity later? And as I hope we tried to explain, it's not that we don't like the charterer. It's not that we don't like the ships. It's not that we don't like the charter rates. We just simply at this stage haven't been able to put together a financing package which provides us with the required economic returns that we expect and that we know our shareholders expect. We don't want to grow just for growth's sake. We want to grow if it's going to provide value to the business and to shareholders.

I hear you. I'm good. Thank you for taking my call.

Steve Springer, Target.

Yes, I would like to say I'm a little bit baffled by the Company financial strategy. The Company has filed a missed shelf from about (inaudible) employees I believe in February. (technical difficulty) the expectation was that there would be a refinancing. The markets were open earlier this year, although it's a much more difficult situation now. Clearly there has been an expectation of paying dividend.

Mike Gross, Chairman of the Board, we don't hear from Michael Gross. The Company is [traded] on the New York Stock Exchange presumably because the Company wants to access capital in the United States. Gross is in New York. You are in London. I just don't understand why the Company -- the Company has not been communicating well during this -- the 2011 (inaudible). What is going on with the loan-to-value test? What is going on in terms of refinancing? Is there (technical difficulty) discussion about dividends on this call? It sounds like (technical difficulty) or over the long-term.

I don't even understand what that means. So I am just wondering the investor relations, the transparency of this Company given the stress that it has been under, it's really inadequate. And I would like to put that out and hear some comment.

Thanks for your observations. And our priority, as it always is, as I would suggest for any business, is to look after what you've got, look after the business as it is today, which in our case is the 17 ships that we've got. We focus day to day on maintaining that fleet in good condition, maximizing revenue, collecting that revenue under our charters and securing a stable financial platform.

It is true that capital markets were open at the turn of the year and that's why we filed a shelf, which is still there to allow us to take advantage of those markets on an opportunistic basis as and when the Board deemed fit. But we had to get through our own loan-to-value tests in April before we could sensibly look at raising capital. Otherwise we would have had a gun to our heads from investors thinking that we were raising capital to sort out the loan-to-value and we would have had to pay too high a price for that capital. So that sort of takes us through to May and that is the first observation.

The second observation is that in order to get the best possible execution in, say, a high yield issue, we needed to get a decent credit rating from the credit rating agencies. And it became apparent that that wasn't going to be achievable until CMA CGM, our sole-source operating revenue, had completed its own refinancing, which as I said in our prepared remarks earlier, wasn't until the middle of the year. And then unfortunately, we all know what has happened in the last sort of six weeks or so.

But the crucial thing here is that we've got a business that is performing. We are generating over $100 million of EBITDA every year. Now we are having to clearly pay interest and we've got debt amortization which we weren't expecting to have when we first set the Company up, but we all know what has happened to secured debt facilities over the last couple of years and the need for borrowers to renegotiate terms with lenders.

This year we have got heavy drydocking as well and we have given more information in prepared remarks on the financial effects of that.

And in line with the -- we've got to look after what we've got principle, the Board has prudently decided not to recommence dividends yet, but to maintain as strong a balance sheet as possible in light of the uncertain economic position generally and specifically in the containership sector.

And although our next loan-to-value test is three months away, vessel values are soft today and we don't know where they are going to be during November but we want to preserve the maximum flexibility within the Company possible to handle any difficulties that may or may not come our way.

I don't know whether that sort of answers your question.

It generally does, but you did file the shelf in February knowing that you had to reach loan-to-value test. And I'm sure that there are circumstances. It's been a very difficult environment, so I would certainly recognize that. And it's not -- this is not as simple transaction that would take place. However, I do think that it would be appropriate for this Company to have Michael Gross on these calls since he is in the investment business and the issues in the United States where this company trades, A. And B, the chief issues facing this Company from an investor standpoint are financial issues. It would be appropriate for Michael Gross to take the lead in communicating with shareholders about these issues so that we can understand the strategy.

The fact is the stock has cratered. Now it has been a very difficult market but the stock has really been plummeted, has plummeted in part because there were expectations that there would be a resumption of dividend. There were expectations that there would be a refinancing and these issues should be addressed more proactively and in a more transparent way and the person to do that in my opinion on these calls, he should be making statements and giving some guidance and background information is Michael Gross. But thank you.

I've taken that comment well on board, let me discuss it with him. We value all comments from shareholders and we received a number of comments after last quarter's call and those comments have directed in part how we presented the second quarter today with what we hope was increased transparency for the benefit of everybody who is listening to the call. So let me take your point away and we will consider it very actively.

Thank you.

Thank you. We have no further questions at this time. I would now like to hand the conference back to Mr. Webber for closing remarks. Please go ahead, sir.

Thank you. Thanks for listening. Difficult times as I say in the next couple of months and the freight markets are going to be key. We look forward to talking to you in November for our third-quarter call. Thank you.

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect.