d'Amico International Shipping S.A. (DIS) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the d’Amico International Shipping Full Year 2020 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Paolo d’Amico, CEO of d'Amico International Shipping. Please go ahead, sir.

Thank you. Hello to everybody. Welcome to this full year 2020 presentation. Thank you for being with us. I would jump the executive summary because we end up repeating ourselves twice. So just to make things a little bit easier. I'll jump and just tell you as an introduction that DIS posted a net profit of $16.6 million in full year 2020, and an adjusted net result, excluding the nonrecurring and noncash items, of $22.5 million for full year 2020. What I would like to point out that the -- for fourth quarter 2020, DIS generated a daily spot average rate of $11,699. But if you blend that, with our time charter coverage, it becomes $15,192, which means that DIS got the right strategy last year as far as chartering out the fleet. But anyhow, I'll come back later on, on the market, and I leave the floor to Carlos Balestra on the financials. Thank you.

Yes. Thank you, Paolo. Good afternoon to everyone. Just a quick look, as usual, to our fleet profile. We'll start with that. Not much has changed since the last quarter. But if we look over a longer period, of course, you will notice that the fleet has been contracting slightly. It has been the result of the redelivery of some shorter-term TC in vessels and also, of course, the result of the vessel disposals that we actively pursued so as to strengthen our financial structure. And last year, we sold 5 vessels, 1 in JV and 4 fully owned. And therefore, we -- thanks to that, and, of course, also thanks to the good results in the year, we managed to significantly strengthen our balance sheet, as we will see later. We are -- and we remain, of course, a predominantly MR operator. I would also like to highlight that the TC-in fleet as the proportion of the overall fleet has decreased. And today, 70% of our fleet is either owned or bareboat chartered in. For us, these are like own vessels because we have purchase obligations. They're just financed through leasing structures. We have a very young fleet, an average age of 6.9 years, of course, which is a result of the disposals of the older vessels in our fleet and also of the delivery of several young vessels over the last few years, 22, which we ordered since 2012, and which were delivered to us since 2014, with the last 1 delivered in Q4 '19. Going on to the following page, CapEx commitments. This, as we have highlighted over the last few quarters, have been falling and will continue falling over the next few years. In 2021, it is of only $5.5 million of our estimates and relative to $12 million in 2020. It's only maintenance CapEx that we have left. And it will fall further to $3.1 million in 2022. Going on to the following page, the debt payments. Here, we would like to highlight once again that we are -- now we don't have any more balloons to refinance in 2021. We are fully refinanced there. So first balloons, which we will have to refinance in 2022, and we will start working on that in the second half of this year. And in terms of daily debt repayments on the owned vessels, we highlighted in the past already how this has fallen considerably since 2019 when we finished reimbursing the medium-term facility we had with Intesa. And it will gradually fall over the next 3 years and then more sharply in 2023. We have a small working capital facility on some vessels, which is fully reimbursed by 2022. And thereafter, therefore, our breakeven on the owned vessels will also benefit from having terminated the reimbursement of this facility. Going on to the following page, here, we show the purchase options we have. We've had 9. We exercised 1 in February this year on the High Priority. It was a bit of an outlier. It was, by far, the most expensive leasing structure we had. And it's also the only leasing structure we had on an owned vessel and it has a short-term maturity in October '22. So we had ample cash reserves, as you will see at the end of the year. So we decided to exercise this to save considerable amount of interest expense. And we refinanced with conditional bank debt at a quite a low LTV. Of course, the objective is then to sell this vessel at the right time. We are not in a hurry. Given the current markets -- weak markets, we're not going to be pushing for an imminent sale. But a very good opportunity arise, [ basically ] and possibly to dispose of this asset over the course of the next 18 months, maximum 2 years. Going on that -- of the remaining options, we have 8 remaining. 6 are already exercisable. 7 are theoretically in the money. A seventh option will be exercisable, the High Voyager, in April already this year, so very soon. And the Cielo di Houston -- that 1 we have to wait until 2024. So going on to the following page, we have a quick look here at our coverage and the average rates at which our vessels are covered. Since we last provided these figures, you will notice that the average rates for 2021 have fallen. But of course, also the percentage of the fleet covered has risen. We are now around 37% covered for the full year 2021 through contracts, which is slightly below our minimum target coverage of 40% for the following 12 months. It's as some contracts terminated, we would most likely be expanding them with the current charters. So this percentage coverage is slightly to increase, although, of course, at a lower rate than the currently average rate that we currently have given the current weak market conditions. Nonetheless, the average rates, which we have are above our breakeven on the contracts, I would say, well above. And also the positive aspect is that we have 51% coverage for Q1 and 43% for Q2 where we expect markets where we are seeing Q1 the markets, so we in Q2 don't expect markets to have improved. So for the second half of the year, there is a chance the market might show some kind of improvement. So we have a good chance of being open when more open -- more -- having more open days as the market starts improving in Q4 2021 especially than in 2022, where our coverage is still very low at only 10%. So we have covered when the market is weak now, and we will be exposed, hopefully, when the market will be strong or very strong in 2022. And we -- in terms of the percentage of the fleet that we control, it is increasingly an Eco fleet. This is as a percentage of all controlled vessels, so also TC-in vessels. It went up from 38% in Q1 '18 to 70% in Q4 '20 and an estimated 70% in FY '21. So as we continue selling some of our older vessels, this percentage will continue rising. If we go to the following page, we have the fleet evolution. And we show the average number of vessels controlled. It is falling slightly over the next 2 years as a result of the redelivery of some TC-in vessels. And -- but the spot exposure overall increases because of the lower contract coverage that I just mentioned. And therefore, in 2022, we have a $12 million exposure for every $1,000 per day change in the TC equipment rate and a $13 million exposure in 2023 and only $8.6 million 2021. So going on to the following page, Page 13. We look also at the cost here. We have been working hard to bring down our daily operating costs. Of course, we have benefited from the fact that we have an increasingly younger fleet. And of course, that means lower operating costs, lower failures. And also, we have benefited over the last few years on a relatively strong dollar since some of our technical management expenses are in currencies other than the U.S. dollar. And -- but we also have benefited from investments in technology, which allowed us to adopt condition-based maintenance, which means that we can inspect parts and we can determine much better when they have to be replaced, lengthening the average life of these spare parts in our vessels significantly and also reducing off-hires. And we also did quite well in terms of G&A costs. We have brought them down significantly since 2018 by 20%. So there is small increase between '19 and '20, but a very significant increase -- decrease between '18 and '20. Going on to the following page. On the net financial position, we see that the ratio between the fleet market value -- the net financial position and the fleet market value is of 66% at the end of the year. And that is still a very healthy level. It's slightly higher than at the end of '19, but significantly lower than at the end of 2018. The reason it deteriorated a bit relative to the end of '19 is that vessel values in the last quarter of the year especially came down as a result of the weak freight markets. Going on to the following page, a glance here at our results, of which Paolo already provided some highlights. Overall net result of $16.6 million in the year excluding nonrecurring items of $22.5 million. If we look at only Q4, the net result is of around $1 million. And excluding nonrecurring items, it's slightly negative of $3.6 million. But I can say that we comfortably outperformed all of our peers with regards to the Q4 results, thanks to our -- both a very good performance of our vessels on the spot market and -- but mainly because of our contract coverage strategy, which allowed us to be very covered in Q4 of last year at a very good rate. So that helped us a lot. And in detail, if we look at the following page, we have the figures. And then in Q4, we benefited from 56%, almost 57% contract coverage. And we earned on the spot market $11,700 per day, which allowed us to achieve a blended rate of almost $15,200 per day. For the full year, the spot result for vessels is of $16,770 and the blended result, including the contract coverage, of $16,560. And I now pass it over to Paolo that will walk you over our overview of the markets and of its fundamentals. Thank you.

Thank you, Carlos. The market history in 2020 is all known, but let's repeat it quickly. January started a good market. The fundamentals was there. But then arrived COVID. There's been a demand distraction due to that. And to add that, also Saudi Arabia and Russia started quarreling on prices. So the price of a barrel went -- collapsed and has been even negative for a few days. This pushed everybody to buy oil and the storage went up. Storage was full onshore and then they start chattering ships to store even more oil. This has been creating a lack of supply and -- but all this a certain point on the second half of the year collapsed -- I mean, the freight market collapsed. So the VLCCs were even touching $300,000 for few fixtures, of course, went down to under operating cost level. So this is history because we think that today things are bottoming up, bottoming up even in rates than -- but also on ships value. As Carlos said before, we suffered a little bit of a loss on the fleet market value to loans because of correction of ship prices on the fourth quarter. But this is -- I have to say, we already have a sentiment that is rebounding. So I'm very -- I mean, I'm very positive on response. Talking about refining, which is our main driver because it's where our demand comes from. It's forecast that the refining will grow by 5.4 million barrel per day in 2021. And consumption -- oil consumption will reach 96.4 million in 2021. This would mean that it's recovering 60% of the loss due to COVID. I remember that before COVID we were burning around 100 million barrel per day. The global refining throughput declined during 2020 by 7.2 million barrel and -- to 74.4 million, but we expect to recover around 4.1 million in 2021. So touching wood, we are on our way back up again. As I said, there has been a big buildup of floating storage on clean refined products. We had an increase from 25 million barrels stored in December 2019 to a peak of 75 million barrel in early May 2020. And then the unwind came in and the storage fall down to 25 million barrel by the end of 2020 from 75 million. So 50 million barrel stored have been unwinded basically in 6 months. And this created, of course, a strong market reaction, not only because of the barrel were stored close to consumption. So no shipping around. On top of that, we have more ships getting out of storage became available to the market. So an increase of supply. We still think -- we are on Page 21 -- that long-term demand is there. We believe in the fundamentals. Still the participation of oil products to the oil trade is of 1/3, so 33% of every ton of oil moved over the sea is a clean one. And of course, believing in future better market, we see a lot of potential on other asset values. So turning -- going back again to the refinery landscape, there are a lot of changes and dramatic changes, we would say. If you look at Page 23 and Page 24 together, you will see that, for instance, Oceania, so Australia and New Zealand, are losing a lot of their capacity -- domestic capacity. New Zealand is closing down the only refinery they have. And Australia is closing down from 10 refineries they used to have, they are only at 4 running and probably they are going to close even those 4. So both Australia and New Zealand will be net total -- net -- the total New Zealand and for a majority part Australia importer of clean products. These are ton mines. So is better demand for us. I can add to this that also in Europe, we had 5 refineries, which are already closed and we had talks that another 5 are going to close during the year due to the lack of demand and very low-margin -- refining margins. Adding to that, we have a very slow fleet growth. Even if we have a very lousy scrapping rate because basically very limited number of ship are going to the scrapyard, even if scrap value today is quite high because it's far over $400 per light ton, which is a good value. But anyhow, the crazy -- the fleet is expect to grow by 2.6% in '21 and 0.3% in '22. And yes, we expect, of course, pickup in demolition in '21 due to the values that we see on the steel. As far as newbuilding is still -- there is a strong concentration on the second-hand market. So the newbuilding orders are rather low. Up to now, there is more or less 10 MRs ordered. And I don't expect this big numbers going ahead. I remember that shipowners today are suffering not only because of the market, but also for technology because we do not know yet what is going to be the figure of the future. And the first appointment that we have is 2030. So it's 9 years far ahead, and 9 years are nothing in the life of a ship. And we cannot get there without knowing what is the technology needed by IMO. So this is constraining the newbuilding orders. So the fundamentals are there. I have to say that basically we are in the hands of vaccination programs around. There is a big expectation once the world will get, not totally vaccinated, but at least at 70%. So we expect a strong consumption there. I would say, from a general view, I mean, it's not only my opinion, the second half of the year should be by far better than the first half. So the market will be back to us again. Saying that, I think that's it, I mean, also on the market session.

Thank you. Just 1 quick look now at our NAV. We always ended the slide with the evolution of our net asset value. Not surprisingly, it has declined since September 2020. I would say that it's important to highlight that we are trading at still a very deep discount to our NAV at around 40%. If we take into account the share price as at the end of December, and therefore, there is a significant value there because asset prices, as we have shown in the presentation, they are at historically low levels. They have decreased during the course of the second half of 2020. And there is very strong potential for a bounce back in these values once the freight rates -- period rates start rising as demand and supply of oil increase with the economic recovery, which will -- we expect, of course, to occur during the course of the year and next year. And so we will have a double benefit, as we mentioned already in the past, which will be both that of an increasing NAV and that of a contraction in this discount to NAV. And as we also have highlighted in the past already, we do trade usually at a discount to NAV, but this discount does vary very much. And we have here -- we only look at year-end figures. For example, at the end of December, we were at a discount of 5% to our NAV only. And there were some brief periods where we were actually at the premium to NAV. And if you look today at, for example, dry bulk vessels, the dry bulk listed companies, they are trading at actually at a premium to NAV because the market has rebounded very strongly and asset values still haven't responded to the same extent, but of course, there's an expectation that they will rise. And therefore, the shares of the dry bulk companies -- several of them are at a small premium to NAV. So I would say that is all for today. Thank you. And I pass it over to you for any questions you might have.

[Operator Instructions] The first question is from Matteo Bonizzoni of Kepler.

I have some questions. The first 1 is regarding this decoupling, which we are seeing between that rates on the product tankers that I think remain currently depressed around $10,000 per day or below in that range and the rates for the dry bulk that have skyrocketed, driven probably by the cyclical recovery, particularly China and so on. You have said that you expect -- you believe that the rates for the product tankers have bottomed or are bottoming. Do you have any particular expectations for the pattern? We know that is very difficult to predict what will happen. But in your view, what could be the pattern over the next quarter for the rate of the product tanker? The second question is more on the long-term outlook because in this world, everybody's speaking about energy transition. Energy transition is happening actually, and then the speed we will see what will be. But it's a fact that there is a push for decarbonization and energy transition. According to projection, the peak on oil consumption is not around the corner, but there will be a near the future in which oil consumption and so also the consumption of refined products will start to structurally decline and will be probably a long-term trend. So what is your view on the future -- on the mid to long-term future for product tankers in this environment? And a last question is as regards fleet disposal. 2020 was quite intense year on the disposal. We have now a loan-to-value of 55.9%. You also say that you expected that the fleet erosion with the asset value erosion should also stop after this quite, I mean, significant erosion, which we have seen, particularly in the second half of the last year. Do you expect to implement more disposal or it's over?

Okay. I think I'd pick that. Certainly, I mean, what's happening. Dry is totally China driven. China is buying anything, and -- thanks God. So the dry side of our industry is running very well. But there is not really any major correlation between product tankers and dry bulk because the final client of the product tanker industry is wider, let's say, than bulk -- on the dry bulk one. As I said, yes, I feel that rates are bottoming. We are doing this not because we are better or worse, but we are doing better than crude. As a matter of fact, one of the competition we are suffering sometimes are newbuild -- crude newbuilding ships moving on clean. And this is due to the fact that maybe the product market is more flexible than crude because crude comes from a -- drive from A to B, from the oil well to the refinery. And it's a very fixed route Ivories, VLCC is Persian Gulf China or Persian Gulf -- U.S. Gulf or Persian Gulf North Europe. Products, they are coming from various refinery, and the demand is created by arbitration on price of the various products. And this can create quite substantial ton mines. For instance, today, California is mostly supplied from Korea. So you have a full Pacific Ocean in between. And -- but this is, again, is due to a price gain more than anything else. So yes, I feel the bottom is where we are. And also because from -- let's face it. As I said, the secret here is how fast we are going to be all vaccinated. And already in the United States, which is ahead of us, in Europe, you see that gasoline consumption is already going up. So we are -- we believe that driving season is going to be there. Plus there is a thing that people are compressed after more than a year of being closing in lockdowns -- in various lockdowns. So there is a sentiment of freedom, let's call it. And so I would say the immediate market is going to be better. Now how better it's going to be? This is really something I can't say. Looking at -- talking about decarbonization, which is a big challenge of the industry and talking also about oil consumption in the future. The first thing I have to say that our fleet will be steaming around from, let's say, the remaining part of this period of oil consumption because I don't think that the world will be moved to renewables at 100% in a matter of 15, 20 years totally. I mean, it will be a gradual thing. So clean products will be there for quite a while. On top of that, I remember that we are not carrying only petroleum products, but we are carrying also biofuels, for instance, which are the product, which will be sitting in between the fossil fuels and the renewable energy. So biofuel will be increasing in the future, and you have to move it. So there is another space for us. So I would say that looking ahead for the next 20 years, I think demand for us is still there, and I don't feel challenged by this. Of course, we are very cautious of thinking of newbuilding. And this is 1 of the reasons why shipowners are not building all the ships now. And we will see what is going to happen. I remember you that we have to face the change of fuels on our ships, but we still do not know in where -- in what sort of fuel we will end up. So we are still in the middle of a sort of no idea of what is going to happen on the medium term. So I know as far as disposal of ships, we are very opportunistic. So let's see values where we go. We don't need to sell, so as a basic point. And let's see where asset values are going to be. And if it makes sense, we are going to keep selling the older one. Certainly, we are going to dispose of the older one at a certain point. Is it going to happen this year? I don't know. I hope that I gave a good answer.

The next question is from Massimo Bonisoli of Equita.

A couple of questions from me. One is on the very low spot freight rates over the beginning of 2021. It is quite scary looking at the Clarksons prices. But I would like to know and to understand if your realized price on the spot market over January and February are different to what we see on Clarksons, and maybe your realized price was spot or higher? The second question is the -- regarding the stop in tax because of the freezing temperatures there. A few number of refineries were stopped there. And I would have expected a more positive impact on spot freight rate because of the very important level of production from refineries. That if you can give us some color on the market development following that stoppage and what happened there.

Carlos, you answer or me?

Yes. No, I would like to, yes, Paolo. Of course, yes. And I believe that it is not surprising, I would say, that rates are as low as they are today. I'm actually surprised that, occasionally, we have some regional spikes given the lack of refining activity that we are seeing today in the world. It's -- for us, usually a 2%, 3% change in demand is a big deal. I mean, it's -- but -- so what we saw in the second half of 2020 and the first few months of this year is unprecedented for us. And we are talking of refining throughputs in January and February 2021, which are of around 77 million, 76 million barrels per day relative to 83 million, 82 million at last year -- the same months last year. So it is a very sharp decrease of around 5 million barrels relative to last year. And it is not surprising at all that, that means -- that translates into a very weak market. I would say that it is instead a proof of the resilience of the sector. The fact that despite this extremely sharp drop in demand, rates are actually -- and they tend to be better than the ones that you've see in Clarksons, especially when the markets are weak because of triangulations, optimizations that we are able to do. So yes, rates are low, but they are not as low as probably you are seeing in the Clarksons indices. The opposite usually happens then when you have a spike in the market because then there are some lags in fixing vessels that may be still employed on older voyages, which are less profitable and then we don't capture all the upside that you see in the rates that are published by Clarksons and by other providers. So it's -- and as we mentioned, I mean, fortunately, we have good contract coverage. We have good contract coverage in the third quarter. So that definitely helps us. Massimo, I don't know if there was 1 part of your question. There was something...

Yes. For the freight rate, okay. Just the comment on tax asset. So that would have an impact on your freight rate...

What happened in the U.S. is that, of course, U.S. was already operating at very low throughput before that happened. So it was very marginal exporter, while historically, over the last few years, at least, it has been a very important exporter of refined products. So rates were already very low in the Atlantic before that happened. There was some surge in imports, so some strengthening on the TC2 rates from the Northern Europe to the U.S. following the event. But the U.S. still had quite ample refined product stocks, which it could work through. So what happened, it was a big drawdown in refined product stocks in the U.S. instead of a big surge in imports. So as we saw at a global level, refined product stocks, especially the floating, are back to the levels that we had at the end of '19. So all the increase related to the COVID was already reabsorbed. The onshore stocks are still slightly higher, but not too far from the 5-year averages. But of course, regionally, you have some big discrepancies. And in the U.S. today, you are for some products already below the 5-year averages because of this event that you mentioned.

Okay. And just a follow-up, if I may. You were mentioning before the, let's say, long-term change in the interest in technologies for -- to reduce greenhouse gases in the industry. Among the portfolio of technologies that may arise in a few years, which are the most likely in your opinion, I don't know, ammonia like -- or LNG or hydrogen or whatever?

Yes. There's -- well, I think that we have to look at this in 2 phases. I mean, there is the initial phase, which is that which will allow us to meet the 2030 targets -- CO2 reduction targets, which were established by the IMO. And then there's a second phase, which is much more challenging, which will allow us to meet the CO2 reduction target of 2050 where we have to reduce CO2 on a ton mile basis by 70% and overall CO2 emissions by 50% relative to 2008. So it is -- the existing technologies are not sufficient to allow us to meet these targets of 2050. With some improvements, for example, the -- which don't require huge CapEx expenses, it's said that 2030 targets can be met, for example, by the use of biofuels, which Paolo was referring to before. And we could potentially be transporting. So that mixture of traditional fossil fuels with vegetable oil, methane could potentially with mixtures of 20% biofuel, 30% -- could allow us to meet these targets, especially for the Eco vessels which, of course, already -- which already has substantial benefit relative to the conventional vessel in terms of fuel oil consumption. For the longer-term challenges, it is going to be more complicated, and that there's a lot of R&D that has to happen. There's an IMO fund, which is being set up. It has to be approved at next Marine Environment Protection Committee meeting in June this year. And if it is approved, and it needs then be funded. It will be funded through a tax on the convention of fuel oil, probably that the governments would have to pay. And then the research has to happen. Of course, there are already private initiatives -- several private initiatives, some sponsored by big shipping routes that have the strong shoulders to do so. And -- but more research -- a lot more research needs to happen before a final decision is made and then a big push is made towards the technology, which is deemed the most promising to meet these targets. Today, the frontrunners, I would say, are hydrogen, which, of course, is also talked a lot about in other areas as a clean fuel. And it could also be applicable as a fuel for shipping, but probably for the short sea shipping more than for the deep sea shipping. For the deep see shipping, ammonia looks more competitive. That's because the energy density of ammonia is much higher than that of hydrogen. And therefore, the storage space on board the vessels for the ammonia -- the storage space required is less. Of course, then you need to build, of course, also all the infrastructure onshore to be able to supply this. Ammonia is already a product which is traded and supplied because it's an important fertilizer. So it has this advantage. And of course, there are also other challenges linked to the emissions of ammonia, which have to be addressed, but which we believe with the right investments can be addressed.

[Operator Instructions] The next question is from Daniele Alibrandi of Stifel.

Yes. I have 2. You pointed out with interesting on what is happening. I understood that a number of refineries basically have shut down in Oceania regions, like Australia, New Zealand and Europe, while export-oriented refineries have been added in China, for example, and Middle East. So I was wondering if you already are seeing some, I mean, routes being influenced by this kind of trend? And the second question is a little bit more boring, but if you can provide us a sort of indication for financial expenses for 2021. I saw that for 2020. I mean it was down to $40 million. So are you still around $30 million or something more can be a good assumption?

I'll pick up the first one, and I leave the boring one to Carlos. Certainly, we are seeing a dominant position of the Chinese refining system and of a Middle Eastern one. 75% of growth in refining capacity is happening in Middle East and Far East. They are refinery of last generation. They are not producing any fuel, nonresidual fuel, and so are extremely efficient, and they have a very low competitive cost. I would say that China became an exporter more by a mistake than willingness because they build up the refining capacity thinking of consuming more products than what they do. Middle East instead, they came up with the idea of being exporters of products. But anyhow, they are dominating the product market today. And after, I would say -- second in line after this area is United States, which improved a lot technologically their refining capacity. I mean overall, I think the loser on medium term is going to be Europe, which is the biggest diesel market in the world. But of course, we have to take in consideration that decarbonization on transportation is going to happen. But here again, it's going to happen over the next 15 years. It's not going to happen tomorrow morning. So it's something which we have to keep an eye on. But we shouldn't be scared, let's say, immediately now. What you say it is perfectly right. We are seeing this change of trade with more loadings in Persian Gulf and the Red Sea and more loadings from China going as far as Europe and going as far as the United States as final destination. I'll leave to Carlos the second one.

Yes, Daniele. Yes, I think we should continue seeing the trend that we -- of course, of a reduction in the interest expenses also because the LIBOR rates are at very low levels. And we are not 100% covered in terms of IRS. So we are for fiscal year '21 including our leases, which are at fixed rates. We would -- we are around 77% covered. So we do have an exposure to the floating rate. So we would expect to benefit from the very low LIBOR rates. And of course, the fact that we have been reimbursing that, and, therefore, the interest expenses also follow accordingly. So it's definitely going to be less than the almost $40 million that you saw this year, probably a bit more than the $30 million you mentioned. But I cannot be much more precise than that because in our projections, our assumptions might not be completely aligned with yours in terms of -- so I wouldn't have a figure on a steady-state basis, which I can provide to you which is more precise than that.

The next question is from Matteo Bonizzoni of Kepler.

Yes. Just a quick follow-up. I will think that the IFRS 16 liabilities in 2020 declined quite sharply, I think, to $96 million from $122 million in 2019. So a EUR 26 million (sic) [ $26 million ] decline of IFRS 16 liabilities. Where does it come from? And can you provide an indication for the evolution in 2021?

No, look, we cannot provide you an indication for the evolution. Maybe on a separate call, we can guide you if you provide us your model. I mean it's simply the reimbursement of this -- of the -- a lot of these liabilities also arrive from time chartered in vessels on time charters, which are not necessarily that long. And so 1 year of reimbursements, 1 year less of time charters to be capitalized, let's say, makes a big difference to what the liability is and that is why there is this decrease. And it should continue following falling in the same -- I would say, a very similar way from the 1 you saw last year, I mean in 2020. So to be more precise, we will need to discuss with a model in front of us.

[Operator Instructions] Gentlemen, there are no more questions registered at this time. Back to you for any closing remarks you may have.

Let me thank you for participating in this call. It's been a challenge -- 2020 has been a challenging year, and we really hope that -- and we think that second half '21 will be the recovery of this pandemic disaster. Thank you, and talk you again at our next conference call.

Thank you.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.