Tsakos Energy Navigation Ltd (TEN) 2015 Q4 法說會逐字稿

Thank you for standing by, ladies and gentlemen and welcome to Tsakos Energy Navigation conference call on the fourth quarter 2015 financial results. We have with us Mr. Takis Arapoglou, Chairman of the Board; Mr. Nikolas 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. (Operator Instructions) I must advise you the conference is being recorded today, Tuesday, March 15, 2016. And I'll now pass the floor to Mr. Nicolas Bornozis, President of Capital Link, Investor Relations Advisor of Tsakos Energy Navigation. Please go ahead, sir.

Thank you very much and good morning to all of our participants. This is Nicolas Bornozis of Capital Link, Investor Relations Advisor to Tsakos Energy Navigation. This morning the Company publicly released its financial results for the fourth quarter and full year of 2015. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or email us at ten@capitallink.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 on the webcast on the website. Please note that the slides of the webcast presentation will be available and archived 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 contains 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.

Ladies and gentlemen, at this point, I would like to 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. The 2015 full-year results we published today are really outstanding in all fronts. Massive organic earnings growth, reduction in operating costs, a solid balance sheet, historically low leverage, high liquidity, fully funded new building program, accretive sale and purchase activity optimizing the asset allocation and 33% dividend increase to be further boosted by our measured stock buyback program.

Just to name a few. With a pro forma revenue of $1.5 billion and an average contract duration of over 2.7 years, excluding new buildings, TEN is perfectly positioned to continue offering shareholder value to its investors. Above all, TEN greatly benefits from the stability and long-term perspective offered by solid anchor investor and the hard work and commitment to excellence of its management team and people. We are certain that all these unique attributes distinguishing TEN from its peers would be appreciated and rewarded by our shareholders accordingly. Once again, congratulations to Nikol Tsakos, his management team and the Company's people for a spectacular performance, and over to you Nikol.

Chairman, thank you very much. Thank you for your good words and I have to say we are all very glad to be back here. It's beginning of our 23rd year and we continue to grow the Company from four ships to where we are today. And it's really rewarding that the underlying business is strong and as we speak today we are able to also notice a significant, again, a rebound -- positive rebound on our spot rate. So, we are seeing VLCCs again approaching close to the triple, the six-figure figures and I think this is all very positively going forward.

TEN is, as we said, is a Company that has a simple, stated and tried strategy and vision and this is something we have been continuously following and it has served us right. We are not the flavor of the month on every quarter and we are certainly not everybody's cup of tea for investors, because we are a diversified, large, growing, traditional, long-term operator. But I think our results make us -- gives us the satisfaction and we hope that also the long-term -- long value investor who wants to appreciates a significant return and a dividend will identify this.

In the meantime, the management -- the anchor investors are always very supportive of the Company by continuously buying our shares and we're looking forward for 2016 to be another year. It is going to be for us a pivotal year. We're going to have the largest growth we had since the inception of the Company 23 years ago. And we believe that this will also be finally reflected on our share price.

If we have to choose -- I think as long as our underlying business is going from strength to strength, I think the share price will find its own way. If it was the opposite, I'd be very worried there having a ballooning share price and a very negative underlying business. So, I think it's a luxury problem to have right now, and let's hope that our business will continue to grow and I'm sure the share price will catch up

And with that, I'll ask Mr. George Saroglou to give us the details for the last quarter, of course, which has been another very exciting quarter and the highlights of 2015. George?

Thank you, Nik. The Company reported today another strong quarter and profitable year, the best year since 2009. We're coming strong after outperforming the recent market downturn. 2015 was another profitable year, the 20th in the Company's history since inception in 1993. For those of you who are connected to the Internet, in our website there is an online slide presentation which format we will follow during the call.

Let's turn to slide number 3. In early November, we took delivery of the 2009-built suezmax, Pentathlon, and immediately took advantage of the strong stop freight market environment. This vessel partially replaced two of our older tankers, a 2002-built suezmax and a 2004-built handysize product tanker, which was sold during the year -- during last year.

A sister vessel to Pentathlon, the 2010-built suezmax Decathlon was also acquired and delivered to TEN in early February 2016. Decathlon also commenced trading in the spot market. During the year, we also acquired two newbuilding VLCCs that will be delivered to TEN later in 2016. Overall, TEN operated on average 48.6 vessels during the course of last year. As a result of this transaction, we have a pro forma fleet of 65 vessels excluding the option for a fourth shuttle tanker. Thanks to the modernity of the fleet and the balanced employment strategy, we continue to operate the fleet at a very high utilization rate, 98% for the year, which is effectively full employment considering that all vessels in the fleet, and in any fleet, have to periodically undergo scheduled repairs.

We should highlight that in order to capture the healthy rates that are currently available for time charter business as a result of a sustained strong export market, TEN has gradually fixed more vessels on time charter with or without profit sharing. With a newbuilding vessel that will enter the fleet during the year, we expect the annual contracted coverage of the fleet to increase to 60%. This number can increase further with those vessels whose charters will come up for renewal during the course of the year. To compare at this time last year, the secured coverage was 45%.

This 60% forward employment coverage for 2016 translates to $1.5 billion of minimum secured revenue.

The low oil price environment continues to impact the crude sector and TEN in a very positive way. World oil demand continues to be robust. 2015 has seen the strongest growth since 2010 at 1.8 million barrels per day. For 2016, global oil demand is expected to grow another 1.2 million barrels per day, which is 100,000 barrels per day higher than the average demand growth the world has experienced between 1990 and 2015. The growth in 2016 is expected to come mostly from non-OECD countries China and India being -- having the biggest part in the growth, while the US demand is expected to grow another 100,000 barrels per day.

On the supply side, in February 2016, OPEC produced 32.1 million barrels per day, which is a figure higher than their stated quota. This is a high production number in support of the tanker market. Iran's production is slowly coming back to pre-sanctioned levels. Iran has set 4 million barrels per day as their production target. In February, they produced 3.1 million barrels per day. OPEC and non-OPEC producers continue to discuss a production freeze, not a production cut based on the current production levels that are high. When or if that happens, it will not necessarily have a negative impact to tanker demand since the production freeze will cap the current high supply levels, which continue to provide healthy tanker returns.

Fleet growth is manageable for the next few years. Let's not forget that natural fleet replacement as we have 17% of the fleet which is currently over 15 years with the order book, as it stands right now until 2019, also at about the same level. The part of the fleet that is over 20 years currently stands a little over 5%. At the current market, we should not expect all 15-year-old vessels to be phased out, but scraping will take its toll, especially on those vessels closer to their fifth special survey anniversary.

With the main shipyards in financial distress, which could lead to restructuring and capacity cuts and financing of new orders, especially speculative, in the current ship lending environment being restricted, the current order book cannot grow fast. For all these reasons, we feel supply of tankers is manageable and as long as the oil keeps flowing, the freight markets will stay in healthy levels.

The next slide is the main financial highlights of our press release which Paul will present in more detail. I would like to highlight the strong profitability for both the fourth quarter and the year; so $158.2 million net income for the year which represents a fivefold increase from 2014, EBITDA for the year of $292.1 million versus $179.5 million for 2014, which represents a 63% increase and strong cash reserves at year-end of $305 million and balance sheet with net debt to capital at 43.6%.

In the next slide we see the Company's pro forma fleet of 65 vessels, which includes currently 50 vessels in operation and strong fleet growth. Thanks to the Company's newbuilding program which is already financed and built against long-term business as 12 out of the 15 newbuilding vessels the Company is constructing are fixed on time charters with minimum five-year duration excluding any optional periods.

The next slide lists the clients of TEN which all are blue-chip names with whom the Company is doing repeat business over the years. Thanks to the quality of service, fleet modernity and the safety record of the enterprise fleet. These 10 client names continue to account for over 75% of the 2015 revenue.

Slide 7 shows the low cost base of TEN that has been built since most of the fleet was basically built before the rise of the newbuilding price. The freight market has been strong and this is expected to remain strong during the year. On the left side of the slide we see the all-in break-even cost. On the right side of the slide, we see the average for last year in the spot market and clearly you see the profitability that one can very simply produce based on the all-in break-even cost that is listed on the left.

Next slide shows the employment slide. We continue to have a balanced employment strategy with a mix of spot charter, CoAs, and pooling arrangement and period charters with fixed rates and minimum rates with profit sharing arrangements.

Including the nine vessels that will be delivered to TEN during the course of the year, TEN will have a fleet of 27 vessels on time charter with fixed employment, nine vessels in time charter with profit sharing, two vessels under CoAs and 21 tankers taking advantage of the strong spot market. If we consider just the operating fleet in the water today, we have 31 vessels with secured employment in excess of 2.7 years and $857 million minimum expected revenue.

The next slide tells us what we see in the market and I think we have [stated] in the opening slide, oil demand continues to be strong. And given the forecast going forward to 2020 by the International Energy Agency they discuss that over the next five years the growth is expected to average 1.2 million barrels per day year over year, which is a very good number in support of the current tanker market.

On the newbuilding -- on the order book and the fleet, as we said, we feel that it's very much manageable as the current order book more or less is balanced with the part of the fleet that is getting closer to 20 years plus the issues that the main yards have which are currently at the restructuring and the scarcity of ship lending.

The next slide is basically the track record in the sale and purchase activities that we had since 2003. As we said, the Company sold for a profit and further trading two of its older vessels; one suezmax and one handysize vessel, and acquired during 2015 two resale newbuilding VLCCs and two modern suezmaxs. We continue to have interest to sell more and more of the first generation vessels we have in the fleet, vessels built up and until 2007.

Slide 12 shows the history of our cash divined distributions. We increased the dividend distribution in 2016 from $0.06 to $0.08 per quarter. This represents a 33% increase. We paid in total $0.24 in 2015 and we will pay in total $0.32 in 2016. The first dividend for 2016 will be paid on April 7. The next dividends for the year will be paid in July, September and December at dates that will be announced later.

The Company likes to reward shareholders with sustainable and growing dividends. In total since 2002, TEN paid $10.12 in cash dividends on the common shares or approximately $422 million and this compares with a listing price in our IPO of $7.50. In addition, the Company has a $20 million buyback program in place, but so far has disbursed just $1.1 million common shares at an all-in cost of $5.66.

Next slide has the most recent NAV calculation and lists the analyst coverage of TEN. The management vision is to continue growing the Company responsibly and at the same time have this reality being reflected in the Company's share price. At the same time, believing in the Company's value and the business in which we operate, management continues to increase their holding in the Company.

That concludes the operational part of our presentation. Paul will walk you through the financial highlights for the fourth quarter and the full year. Paul?

Thank you, George. Well quarter four represented a robust ending to an outstanding year for the tanker industry and especially for TEN. TEN achieved net income of $39.6 million, three times more than in quarter four 2014. 2015 net income, including $2 million gains on the sale of two vessels, was over $158 million, as George has mentioned, a five-time increase over the previous year.

Low oil prices kept tanker demand up and resulted in a 50% decrease in bunker prices which contributed to a significant reduction in voyage expenses. Revenue after voyage expenses was 13% from the prior quarter four. Despite the sale of two vessels in the year, $109 million more net revenue was generated than in 2014. Quarter four daily average TCE per vessel was $26,000, a 17% increase over quarter four 2014 while 2015 average rates increased 31% to $25,940. Our aframaxes mostly on spot earned average daily TCE rates in quarter four at nearly $28,000, a 22% increase over quarter four 2014 while our suezmaxes has earned average TCE rates at nearly $35,000, a 32% increase. Panamax, handymax and handysize daily TCE were in approximately the same range as in the previous quarter four and generated for the most part respectable earnings unless undergoing dry-dock.

Quarter four generated $75 million EBITDA, 35% up from the prior quarter four. All vessels had positive EBITDA apart from two product carriers in dry-dock. In the year, EBITDA increased by 63% to $292 million. Quarter four OpEx fell by 15% due to a 16% depreciation of the dollar against the euro, the sale of two vessels and savings achieved by our technical managers. Daily average OpEx per vessel for quarter four was $7,500, down $900 from the previous quarter four and a 11% reduction. For the year, daily OpEx per vessel fell by 3% to $7,900.

Finance costs fell by $7 million in quarter four and for the year fell by $13 million, in both cases, mainly due to the reversal of negative bunker swap valuations that were incurred in the prior quarter four. In quarter four, we repaid $82 million debt and (inaudible) $112 million, including a $52 million loan to refinance matured loans and $40 million for the acquisition of our new suezmax Pentathlon bringing total debt at the year-end to exactly $1.4 billion.

Nevertheless, our leverage levels were at historical lows with net debt to capital at below 44% and leverage based on actual vessel values at 47.5%. We have now arranged finance for all our newbuildings and acquisitions, all at competitive terms. We aim to sell certain older vessels in 2016 which will further release cash and reduce leverage. Two of these vessels are already being accounted for as-held for sale within current assets and the related loans transferred from long term to current liabilities. Depreciation on those vessels has ceased. We remain in a comfortable position to cover with expected cash flows remaining equity contributions on our newbuilding program and to finance share buybacks and quarterly dividends. And this concludes my comments, and now I'll hand the call back to Nik.

Thank you, Paul. Thank you. I think this is a very good messenger for the results and as I said we appreciate that 2015 was a very strong year. It seems that 2016 is shaping to be another strong year. This week the markets in almost all segments are going from strength to strength.

And with this we'd like to open the floor for any questions. Thank you.

(Operator Instructions) Michael Webber, Wells Fargo.

Good morning. This is Donald. Congrats on the quarter and thank you for taking my questions. I'll kick it off with a question on the market. You mentioned this briefly earlier but looking at the very sharp run-up in VLC rates moving from about $38,000 a day to close to $90,000 a day, do you think this run-up is purely seasonal on the back of the unwanted refinery maintenance or are there larger more structural factors at work here?

I think that what George mentioned before it proves the point that the market is very well balanced. I don't think that anything structurally happened in the last couple of weeks. There are, of course, more exports coming out of places like Iran, so there is more oil (technical difficulty). However, it shows that every small change is going straight into the market. So I think the market is well balanced. The market is taking -- absorbing any new supply quite carefully, I mean it takes any new supply of tonnage in. So I think overall, we are in a well-balanced market. We are seeing more storage coming up in China. So that's another -- we have delays in ports there and of course that's another factor that will help the market, plus we're getting finally a cold spell here in Europe, which I think we didn't have and that will also help us.

Thanks for the color on that. And then just a follow-up on the balance sheet. You have about $305 million in cash. Can you comment on your cash flow optionality moving forward as you think about your tool kit consisting of further deleveraging, additional growth, distribution increases or additional share buybacks or I guess is there a preference for one option above the others?

I think we fell quite -- you should never say never, but we feel quite satisfied right now that we've reached a level of growth with the new ships. I mean, 2016 is going to be our most active year in new vessels, almost -- most of them with long-term accretive employments and the rest being the two VLCCs of course are going to be I think right now very -- there is a huge appetite for them in the market and we are negotiating deals. So, I think unless some opportunities might arise in the second-hand market, I think we've reached our growth. We are where we wanted to be at this stage.

Of course, we are looking to deleverage our balance sheet. Although as you've seen, we have I think the lowest leverage ever at around 43.5%. However, we have our preferreds there and that's the way buying back our common shares, buying back our preferreds and of course our preferred distribution is the dividend. So, as long as the market maintains this momentum, we would expect to see some of these actions being taken by the Board.

Well, thank you for that color and congrats again on the quarter.

Thank you very much.

Noah Parquette, J.P. Morgan.

Thanks for taking my questions. I wanted to ask about charter coverage. You said that pretty high at 60% this year. When you are looking forward to 2017, do you have a target rate that you want to get to in terms of charter coverage? And I guess what are you seeing in your discussions, are there -- there are some competitors saying there is not liquidity for periods after one year, but what are you guys seeing? Thanks.

Thanks, Noah. Well, yes, there is no magic number, but historically we were always, I would say, two-third with long employment and one-third spot. I think we will go close to that. I think we will be approaching that level, perhaps exceeding it a little bit, but our aim is always to have long-term employment. There is long-term employment out there. And I think if we are -- I think in the next couple of days we will be announcing another major strategic transaction. We're waiting for subjects to be lifted and I think that will add to that percentages. So, I hope before we see you next week in New York to have those good news also. So that we will further increase our -- bring us closer to our target.

Okay, looking forward to seeing that. And I guess on the LNG vessel and the newbuild, can you give some update on where you are in terms of chartering that and how that fits in to your strategy? Thanks.

Yes, I think we are looking for a delivery in the beginning of -- later part of the third quarter, beginning of the fourth quarter. As you know, this market is going through a, I would say, difficult period. But of course our delivery gives us time to look forward. We are believers in the long-term prospects of [gas]. We're, I think, satisfied that we have not overstretched ourselves and we only have two vessels in that part of the business, but we will be looking to expand when the time is right. Right now we are discussing for flexible contracts for delivery. There is a lot of requirement for vessels like our vessels starting in 2017 and 2018. So, I think our aim is to bridge the gap between our delivery and the period that most of the trains infrastructure projects come on line and the demand for shipping will be there. So, we are believers, however, we are glad it's still a small percent of our diversified fleet.

Okay, that's very helpful. Thank you. That's all I have.

Sherif Elmaghrabi, Morgan Stanley.

Congratulations on a strong quarter. I think you touched on my first question earlier, but with such a large cash balance and as you fix more of your fleet on these long-term contracts, have you given any thought to another dividend increase this year or a special payout, perhaps even transitioning to a floating model similar to some of your peers or is repurchase program your primary avenue for returning capital?

Yes, I said, we are -- we have a strong cash balance, but of course we have one of the largest newbuilding programs in the Company's history so far. So, I think we will be using part of it, we're already using some of it, in taking over our ships because our -- we are conservative and we do not want to over-leverage ourselves. So we are using quite some and put it together with very, I would say, competitive terms -- we are getting very competitive terms in bank finance and for us this is important. Being the major shareholders, an increase in dividend when the time is right is always our preference and I think we have -- we will be looking after the half of the year to see how the year is going, but it's something that we always consider favorably.

Okay. And just a follow-up, what's your total remaining CapEx and how much of it is equity CapEx?

Paul?

At the moment, we are looking at paying another $700 million towards our newbuilding program, but much of that, over [$600 million] will be paid by already arranged debt. our equity exposure at the moment is about $100 million including estimated extras.

All right. That's very helpful. Thanks. One last question. You talked about -- in the press release you talked about the sale of your first-generation vessels. I was wondering if you think vessel values have already passed their peak and where you see them going from here. It seems that the price doesn't really reflect what these vessels have been earning?

Yes. I think, as I said, those ships are serving us really well as we speak. They are well depreciated. We look at anything which is 10 years or older as, I would say, first generation and we are discussing with buyers for the sale of those ships. It's true that because of the limited finance and the problems that are very evident in most of the segments of the shipping business [at bankers] which is dry cargo and container, the appetite for shipping from banks and investors is not there, but of course, our aim is to find the right channels and renew our fleet.

Okay, helpful. That's it for me. I will turn it over.

Thank you.

Thank you.

Spiro Dounis, UBS Securities.

Thanks for taking the question. Just wanted to follow-up, Nikolas you mentioned an accretive deal, I guess, coming in the next few days. And I am sorry if you touched on this, but in terms of the form it's going to take, is it something that maybe it's going to be newbuilds backed by a contract or is it that you're chartering vessels that you already own?

Chartering vessels that we already own.

Got it, got it. That helps. And then just maybe sticking on that point, you're obviously out there talking to all the oil majors and big trading houses, and I guess I am just wondering, in terms of inbound calls that you're getting maybe what vessel class are you seeing the most interest in right now broadly speaking?

I think right now suezmaxes and VLCCs seem to be the vessels that come first in line, but of course having a diversified fleet we are able to talk to them on all segments. But, I would say today VLCCs and suezmaxes are the biggest interest for long-term businesses.

Got it, got it, okay. And then just two housekeeping ones. I think just piggybacking on Noah's question on the LNG carriers, I think you mentioned the Maria, but maybe just addressing Neo Energy I think comes off charter I guess this quarter or maybe what the plans are there to recharter that vessel?

Yes, I think the Neo has been performing very good since we built the ship. It's been almost on its entire life on long-term very accretive business. I think right now we are discussing again with more flexible businesses which means perhaps a chartering conversion of the vessel into (inaudible) because there is quite an appetite for vessels like these.

Yes, certainly, that's interesting. And then last one from me, I see HMM is obviously on your top list of customers, I guess their tanker division. Just wondering with the financial difficulties going on there, we're hearing they are trying to cut charter rates. I am just wondering if you are impacted by that at all.

Well, we have not -- we have longer relationships with HMM. We are not seeing any effects. We are on a long-term employment with a minimum and profit shares with them and I think right now there is so much in the money. I don't think they are bothering, but we never had any issues with them.

Yes, makes sense. Just making sure. Thanks guys. Appreciate your time.

Robert Perri, AXIA Capital Markets.

Gentlemen, good quarter. Congratulations on a good quarter. Spiro just sort of took over one of the questions I wanted to ask you. But I guess just quickly, you mentioned that -- I know someone mentioned it before that all the vessels are financed now, the big one being the LNG carriers. Is there any terms you could disclose on that now or is it something you can't talk about at this stage, the financing for that vessel, the new one coming on?

Well, as I said, we try to always finance our vessels with a conservative profile, so it's going to be -- we are not looking for a 70% or 80% finance. We have always tried to be conservative in financing, but in exchange of that we get very good terms in the duration -- on the duration of the finance and of course on the pricing.

So, there are other companies that are, I would say, more aggressively financing their fleets that might go up to 70%, 75%. We're not -- we have never been -- even if you look at in our presentations, even in the worst times when the market was very poor, we were still, I think always under 60% [that was financed]. So, that's the reason we keep a little bit more extra cash because I think it carries us a long way.

Understood, understood. And I guess just touching on that briefly, I mean what are you seeing from the lenders these days, granted, I know you guys have always been very good customers, but is it tougher out there do you think nowadays or is it finally leveling off?

Well, they are always tough with me. So, Paul, I think should answer this question. (inaudible).

For us -- we've lived in a kind of privileged situation over the past few years through the bad times and the good times. There are a certain number of banks and I'm talking about as many as a dozen or more that recognize us as payers. We service our debt, we've got a perfect record in that respect, and therefore whenever we announce that we're looking at a project where or we're going to build a ship with a charter they are knocking on the door and offering us very good terms. So, I know it's sounding a bit over proud in that respect, but I think that's the situation we're in, that we are very fortunate to have excellent banks who recognize our qualities and they're prepared to provide a debt with us at very good terms.

And when I talk about terms, we're talking about a reasonable tenure in this day and age, let's say the days of the 12-year tenures have gone, but we're still getting six, seven years. We're getting margins which are very, very reasonable and it keeps our overall cost of debt. I mean it's still around 2.5% mark. So, I think in that respect, we're in a very good position.

Yes, I appreciate the color there. That's all from my end.

(Operator Instructions) As there are no further questions, I shall pass the floor back to you for closing remarks.

Thank you very much. Looking forward to visit with a lot of you next week in New York. I think we have to look forward to the CMA, the Capital Link and Deutsche Bank Conference and the management will be there on the back of the results and answering any questions.

In general, I think, it has been a very good year. It looks to be shaping up to be another positive year. We are placing the Company to be able to take advantage of that situation. And as I said, I mean we are, really and I think like most tanker companies as we mentioned in our press release, not happy or I would say disappointed with the performance of our shares. But we'd rather have that and have the underlying business going from strength to strength rather than the opposite.

I think that at the end of the day, the investors who are right now, most of them, recovering from low oil prices, many of them being long, and many of them investing in other segments of our industry, I think that we will identify that the tanker market still have legs and it will give its dues. But in the meantime, our aim is to keep a tight ship literally, keep costs under control, make sure that our vessels are utilized, as George said, at least 98% for the year and I think the results will talk for themselves.

Looking forward to see all of you next week or as many of you next week in New York. Thank you very much.

Thank you very much indeed and many thanks to all our speakers today. That does conclude the conference. Thank you all for participating. You may now disconnect.

Thank you.

Thanks to Arapoglou. Thank you, gentlemen.