Ernst Russ AG (ERAG) Earnings Call Transcript & Summary

Ladies and gentlemen, we warmly welcome you to the earnings call of Ernst Russ AG following the publication of the first half year figures of 2026. I am pleased to welcome the Co-CEO and CFO, Christopher Dr. Christopher Eilers; as well as Co-CEO and Chief Commercial Officer, Joseph Schuchmann, who will guide us through the presentation and the results shortly. After the presentation, you will have the possibility to place your questions directly to the management. And having said this, I'm handing over to you, Joseph.

Thank you, Judith. Thank you for the kind introduction. Good morning, ladies and gentlemen. Warm welcome to the nose earnings call for the second quarter and first half of 2026. My name, as Judith said, is Joseph Schuchmann. I'm the Co-CEO and Chief Commercial Officer of Ernt Russ, and I'm joined today, as always, by our co-CEO and CFO, Dr. Christopher Eilers. This is now our third quarterly earnings call, so we are slowly but surely turning this into a proper tradition. It's a pleasure to see so many familiar faces back in the audience, and I hope you all had a wonderful summer and back well rested. As always, let's start with a few housekeeping notes. This presentation has forward-looking statements. So please take them as such. I'll guide you through the presentation as first with a brief update on what we do in the company, how our fleet is performing and the markets that we operate in. and then Christopher will take you through the numbers. And then in the end, as always, we have a Q&A session. So let's dive in. For those of you who already know us, you would be aware, we are currently on route in our transformation as a company, a transformation in which we strive to create a leading diversified ship owner listed in Germany. Christopher and I are fortunate enough to lead this transformation, which started basically with the divestment of the fund business a few years ago with the success of the existing portfolio, existing shipping portfolio. This has brought us to a point of strength from where we aim to deliver more predictable long-term earnings for our shareholders. So when looking at how we conduct our business, manage our portfolio and position ourselves in the capital markets, the strategy that we communicated earlier this year is always the base layer. For those of you who might be in town, actually in Hamburg, will give a deep dive into our strategy morat the Hamburg Investor One target. In short, for those of you who can join us, we are shifting our portfolio into a modern, diversified asset base. It will be diversified across segments, across counterparties and across the shipping cycles through varying charter durations. You will see today we are on route to do that. We have increased charter backlog, long outstanding charter duration and a more modern diverse fleet. For those of you who are new to Ernst Russ, this is maybe a brief explanation of our business model. We are a tonnage provider, and in simpler terms, we are an owner of ship a ship owner. We supply our vessels to shipping lines and freight companies who charter them from us to serve their customers. So essentially, we are a flexibility provider, and we offer 2 kinds of flexibility operational flexibility, allowing our customers to scale their operations up and down and balance sheet flexibility through long-term operating leases, so our customers can grow without tying up too much capital. Our model is deliberately clean. We focus on investments, commercial management and ship financing, and we outsource the actual operations of the vessels, such as crewing, maintenance and insurance to a selected group of trusted partners. Our customers pay us a daily charter rate for the use of our vessels, and they, in turn, earn a freight rate for the transport services they provide. When looking at our fleet, sometimes I think it helps to zoom out is the absolute background of the global economy. And as you can see, we are right in the middle of it. So every thoughts on the Snap as you can see has a name. But there's also a segment that each of these ship caters and then there's an underlying commodity trade at CTSI and a charter contract with a strong partner that is underlying to its earning capabilities. As of the 30th of June, we had 27 vessels on the water with a market value of roughly USD 621 million. As you can see here in the lower picture, the first transaction this year at the end of March, at the beginning of April, we welcomed Ronnie and Charlie to modern multipurpose vessels, each on 7-year charters running to 2033. And as you can see here, it's one of them, transporting wind turbine blades. That picture shows a lot actually about this segment. Project cargo doesn't really fit into a container. It doesn't fit into a box. And this specialized tonnage catering for this especially in the renewable energy sector, it's really exciting to be a part of and really exciting to participate in. In May, fully in line with our strategy. We sold a ship. Our strategy is to buy and to sell ships when the time is right for the particular asset. We sold the container feeder EF Emira. She was handed over right after quarter end in July. So you see here that we have 27 ships on the water as of end of quarter, and then we have 26 ships right now. The average charter rate in our fleet stood at $19,700. And that is actually an increase of $2,300 of almost 15% versus the prior year. Our utilization, which is the on-hire time, so the time throughout the year that our vessels spent earning money is at 98.3%, which is a very, very strong number. Something to focus on as well is the average remaining minimum charter duration. It stood at 21.8 months with a charter backlog of USD 382 million. Please note that in this presentation, we have dissected the figures for the existing fleet and of our acquisition pipeline. So I will come to those numbers to the combined picture in a moment, but I thought or we thought it would be helpful to dissect what progress we're making on our existing fleet and what progress we are making actually on the new vessels that we are acquiring. Just as a small housekeeping note, the shipping KPIs, you will see we keep in U.S. dollars as the entire shipping world runs on U.S. dollars and the financial KPIs that Christopher will get into later, will be in euros as that is our accounting currency in Germany. Looking at our existing fleet, we have 10 new charter agreements that we signed in first half 2. of those in Q2. As mentioned, we have long-term employment for our new vessels, Ronnie and Charlie, that are 7-year contracts. On our Bulker fleet, we currently have 1 booker in the fleet. That was part of a revenue pool. And we have taken the ship out of the revenue pool. It's currently on short-term employment, and we will seek to get long-term employment when the time is right. We have added long-term coverage for Bakkafoss and Frida Russ until 2029. And I think I can give a short commercial update. We have also extended the have, which as of 30th of June was still as you could see here running until Q2 -- Q1 2027, and we have now extended here for almost 3 years. Let's get to the acquisition pipeline. When we look at the acquisition pipeline, when growing our fleet we really look at how do we diversify our earnings, how do we diversify across counterparts and how do we diversify across charter durations. So not every vessel or the entire fleet has a singular residual risk in 1 year, but rather we stretch it out over multiple years. As you know, we've added multipurpose ships, increased our exposure there. We have also modern our container fleet with with order of 2 new container ships and the 4 new buildings we acquired in the tanker space, which we are particularly excited about. Looking at the acquisition pipeline, you see here 6 newbuildings. Our fleet currently, as we said, and stands at 26 ships. So we are now on a run rate to have 32 ships in the fleet within the next couple of years. But of course, as you will have noticed when you follow us, we are quite active in portfolio management. So you can expect us to further increase our exposure in certain segments. And further manage the existing portfolio as we go along. Markets. Things remain quite fluid. There's a lot of geopolitical turmoil. The container markets are actually incredibly resilient. And the situation in the straight of a move since a few months ago or now, I think it's almost 4 or 5 months ago has created further disruption on top of the situation in the Red Sea. Regarding the Red Sea, this is the main, let's say, capacity restraints we currently see in the container market as the ships circumvent the Cape of Good Hope. But we do actually currently see some players returning gradually to the Red Sea, so we will have to see how that plays out. I mean the current increase in capacity going into the Red Sea on total numbers is still well below the 2023 levels but it is increasing. So we are very cautious when it comes to the combination of a potential Red Sea opening and the order book that we have in container markets. What we do have to see when looking at container markets that with the rapid growth that we see in the container fleet, the land-based infrastructure. So the terminals, the [indiscernible], the railroads, the bridges, et cetera, in the main import markets, they are actually struggling to keep up. So this also creates a lot of bottlenecks and is absorbing capacity. You have voting times -- so essentially, some in our industry are now saying that the ships are -- the container ships are the new and necessary real estate for the supply chain to keep moving because the storage levels and the hinterland connections are simply at the top of their capacity. As I said, this makes us rather bullish on containers going forward. We feel quite protected in the smaller feeder space, but we are very oblivious to the fact that there is a very large order book, especially in the larger sizes that can also have knock-on effects. So you can expect us to remain cautious and conservative to some extent. The bulker markets have had a phenomenal run past few months, and we are currently employing our Robina in the spot market. So we were able to capitalize on that to some extent, but of course, as 1 ship in the entire fleet. This doesn't tend to picture too much, but we are quite positively surprised by the Volkema this year. And also there disruption plays a major part in the uplift in rates. The multipurpose markets have remained stable. They are in very healthy territory. So this is indexes, right? So the levels that they are stable at are quite good for us. and the tanker markets, especially in the larger sizes and in the crude sector have gone completely off the rails as you will have seen in the news it does have to be said that the chemical tankers that we have bought into have also had a good run, but to a lesser extent than the big crude oil tankers. Anyhow, you see why it makes sense for us to strive diversification. The different markets behave differently under each scenario of the global economy. And as we execute our strategy, our earnings base should therefore create strong visibility to shareholders. and stable numbers. And talking about numbers, I would like to hand over to Christopher. Thank you.

Thank you very much, Joseph. Ladies and gentlemen, also from my side, a war very warm welcome and many thanks for joining us today. And as Joseph already said at the beginning, we hope you enjoyed the summer break, and we are very pleased to be back after the break and to reconnect with you today in order to resume the dialogue that has become a valued part in our calendar. And let me start by highlighting the financials for the second quarter of 2026 in more detail before we zoom out and focus on the half year results. So first of all, I would like to give you an overview of the financial KPIs for the last quarter. So we generated revenues of EUR 40.9 million after EUR 37.8 million in the first quarter. The increase is mainly due to the expansion of our fleet with our new 2 multipurpose vessels joining our fleet this year, as Joseph mentioned. The EBITDA stands at EUR 19.1 million and the EBIT at EUR 11.4 million. Both KPIs are almost at the same level as last quarter, as you can see on the diagram on the upper right side. I will come back to this in more detail on the next slide. So if I may say so, our balance sheet remains fortress. The equity ratio stands at 73.4% and the cash ratio at 184.4%. So while we are growing the fleet at a considerable speed, we are preserving a rather conservative financial profile, which you know from us also during the past. So as you can see on the debt-to-equity ratio slide, which is shown at the bottom right, which also represents our conservative approach. From the end of 2025 until now, there has been a slight increase, which is attributed to the financing of our new multipurpose wells. To round up the KPI slide, earnings per share came in at $0.28 for the second quarter of 2026. On the next 2 slides, I would like to walk you through the profit performance of the second quarter in a little bit more detail. So let us start with the revenues. You have already seen the headline figures of EUR 40.9 million. And what I would like to add here is the composition behind it because that is the more interesting part of the numbers. Our shipping segment actually contributed more than in the prior year, driven by the stronger average charter rate that Joseph already mentioned. This was offset by lower revenues from the management services. Other operating income declined and here we see some effect that will accompany us through most of this comparison. In the prior year second quarter included the gain from a vessel sale in an amount of EUR 5.2 million. So please note that the gain from the sale of the EF Emira will be shown in the P&L of the third quarter since the vessel was handed over in July this year. On the cost side, cost of materials increased, which is mainly due to higher dry docking costs this year, and destocking costs include expenses for extensive overhauls of the main engines and the bond stern truster as well as costs for silicon coating, which are partly borne by the charterer. In the beginning of the third quarter, our new MPP vessel, Ronnie successfully completed its first drydocking and 3 other vessels will also be docked this year. So in total, we will have 5 drydockings this year, besides the mandatory class renewal, it is important to mention on a general note, the docking preserve the substance of our vessels, improve the efficiency of fuel consumptions and are preconditioned for the higher utilization rate of 98.3% for our fleet, which Joseph mentioned. The personnel expenses assure and other operating expenses by contrast, remained certainly unchanged. And as you can see, our cost base is stable and our organizational setup is lean and efficient, which forms basis in our ongoing growth phase. Taking these effects into account, we come back the mentioned EBITDA of EUR 19.1 million and an EBIT of EUR 11.4 million for the second quarter of this year. But now we have a better understanding of the individual developments during the larvae reporting period sorry. So now let's focus a little bit on below the EBIT line. The nonoperating results benefited from positive currency effects in comparison to last year, where we experienced the opposite effect. So the U.S. dollar has a direct effect on our reporting, but the development in the second quarter of this year worked in our favor, so to speak. Looking at the net interest and investment income, we see a decline in comparison to the prior year reporting, which is mainly due to the fact that the numbers of the second quarter of 2025 included a one-off gain from the disposal of a noncore investment. So after deducting the minority interest, net income after minorities amounted to EUR 9.3 million compared with EUR 10.3 million in the second quarter of 2025. So this difference is once again almost entirely explained by the absence of the prior year vessel sale gains. So overall, this translates into earnings per share of $0.28 for the second quarter. Please allow me now to walk you through the cash flow for the second quarter very briefly since I would like to focus on the cash flow statement for the complete first half year of '26 in more detail in the following slides since this showcases our transformation phase, particularly well. So it's EUR 20.7 million, our operating cash flow remained very stable compared with the previous quarter. And on the investment side, the outflow mainly comprises the advanced payments for our 4 tanker newbuildings and our financing activities were driven primarily by our dividend payment of EUR 8.4 million in the second quarter. Sorry for jumping the slides. There you go. And as I mentioned earlier, the statement that our balance sheet remains a fortress. I'm pleased to explain the background on this in a little bit of more detail. So the total assets grew from at year-end to EUR 417.4 million, driven by the acquisition of the 2 multipurpose vessels and advanced payments for the 4 tanker newbuildings, which we will take over in the first half year of 2027. Our equity position grew to EUR 306.2 million per the 30th of June this year and the equity ratio of 73.4% combined with a smaller amount of securitized that gives us strong financial headroom to keep executing on our growth strategy. You might have noticed that interest-bearing liabilities rose from EUR 36.1 million to EUR 66.3 million, which is a result of the already mentioned financing of our 2 newbuilding entitiy -- vessels, sorry, not newbuildings. So as we published our half year report earlier this morning as the next step, I would like to additionally give you some background and details of the freshly published numbers. So for the first half year of 2026, revenues came in at almost at the same level of the prior year reporting period totaling at EUR 78.6 million. So let us quickly reflect on this development because we achieved this with a smaller fleet and a weaker U.S. dollar. So the offsetting factor was the strong increase in our average daily charter rates, which you have already mentioned, which rose by USD 2,304 to an average of USD 19,760 per day. So this resulted in an EBITDA for the half year of EUR 39.7 million and an EBIT of EUR 24.6 million. Therefore, the EBIT is roughly EUR 31 million below last year and results from the same reason as mentioned in the stand-alone view of the second quarter, which is the one-off gains of EUR 32.3 million from the sale of 2 container vessels, which we realized in the first half of 2025. The cash ratio and equity ratio are balance sheet dated, meaning they are cut off date related and therefore unchanged compared to the KPIs for the second quarter I explained earlier. So the figure that thankfully does move is, of course, the earnings per share at EUR 0.60 for the half year of 2026. On this slide, I always focus on the right photo, and I think it's a very good background on this slide. What do I mean by this? It is a colleague from us on board of one of our newly purchased NPP vessels named Charlie, which you can see on the lifebuoy on the right side of the picture. And it always reminds us on that all behind these figures we are presenting are real ships, real cargo and most importantly, real people who make this complex endeavor work for us as a team. So as promised, I would like to guide you now through the cash flow statement for the first half of this cash flow development showcases our company, which is simultaneously earning money from operations, investing in the future and returning capital for its shareholders. But first, let's start at the top. So the cash flow from operating activities came in at EUR 38.1 million compared with EUR 47.6 million in the prior year period. So 2 things I would like to explain as the main difference First of all, slightly lower EBITDA, excluding any vessel sales. And on the other hand, a timing effect in relation to the balance sheet cutoff date caused by certain expenses, which turned into payments at a later stage. So overall, the underlying cash generation of the fleet remains strong and steady. Now I would like to highlight the line where our transformation progress becomes most visible, which are the investing activities of our group. Here, we recorded an outflow of EUR 55.6 million compared with an inflow of EUR 36.7 million in the prior year. That swing of over EUR 90 million is a positive signal since it is our transformation in action. Last year, we were sellers, the disposal of 2 container ships brought in EUR 47.8 million. this year, we were mostly on the buying side. So total investments in ship assets amounted to EUR 60.2 million. This was for the investment Joseph mentioned earlier, the 2 multipurpose vessel, Ronnie and and Charlie and again, the advanced payments for our 4 tanker newbuildings. Partially offsetting this was generated by EUR 2.7 million from the sale of a nonstrategic equity interest, which was another small step in simplifying our structure. So financing activities contributed to positive EUR 19 million versus minus EUR 72 million in the prior year period. The main driver behind this were EUR 33.8 million of loans added to finance our ship investments and on the other hand, we executed a dividend payment of EUR 8.4 million to our shareholders and interest and repayments amounted to EUR 5.5 million which is down significantly from EUR 14.1 million. So further disposition includes distributions to minority shareholders at EUR 2.7 million after EUR 140 million last year. And finally, the stronger U.S. dollar at the balance sheet cutoff date added EUR 1.8 million. Taken together, our liquidity position, therefore, increased by EUR 3.4 million to EUR 11.7 million as of the 30th of June 2026. This brings me to the part of the presentation that some of you may have been waiting for, meaning our outlook and guidance for the remainder of the year. Following the guidance upgrade we published in May, we continue to expect an EBIT in the range of EUR 45 million to EUR 55 million for the full year, and the EBIT was upgraded from originally EUR 34 million to range, which was mainly due to the already mentioned sale of the EF Emira, which we executed in July this year. For revenues, we confirm the range of EUR 145 million to EUR 160 million. And therefore, it is important to note that as of the 30th of June, already EUR 151.4 million of that range were contracted. The remaining open factors, of course, for the marine part of this year are the development of the euro-U.S. dollar exchange rate, where we now assume $1.18 for the second half and fleet utilization, which we conservatively planned with 97%, which takes also into account the scheduled outstanding remaining dry dockings this year. Last but not least, I'm pleased to give you some update on the capital market side. As per [ Citra ] closing of yesterday evening, our share price currently stands at EUR 7.68. And on the top right of the slide, you can see our research coverage and our guidance within consensus of EUR 12.85. And when we started the transformation journey, we were covered only by 1 analyst. And today, we are proud that already 4 research providers cover and fruits, and we are in the fortunate position that all houses have a buy recommendation. And we're excited to share some more news on that end about new research analysts in the coming weeks. On the bottom right, we would like to highlight that our free float increased from 24.7% as per end of 25% to 28% as of the 30th of June, following a successful relocation of shares from our main shareholders. And I think it's fair to say that this underpins our strategic objective to even further increase the free float in order to increase the liquidity in our shares. And on another side, I'm very pleased to share that the Supervisory Board of Enforce AG has extended Joseph contract for further 5 years until the end of 2031. And I think that's a very important and clear signal for continuity for our strategic direction and which is well observed by Joseph's performance. And I only have to say for me personally, these are really exciting news, since I couldn't imagine a better sparing partner on this journey than you. As you can see on this slide, you will have plenty of opportunities to meet us in person or virtually in the second half of this year. already tomorrow, we will start, as Joseph said, by presenting at the Hamburg Investor One target here in our hometown Hamburg, and we'll dive a little deeper into our transformation journey on that occasion. And next Monday already, we will attend the fall conference in Frankfurt. And in September and October, we would travel to Paris in Oslo, before we close the conference season, so to speak, with the [indiscernible] Forum in Frankfurt. To recap the quarter, I would like to end with 4 key figures that sum up our progress in a precise manner. So number 1 is 4 segments. That are the diversified base we operate from, especially after entering the strategic important tanker segment and strengthening our NPP exposure. Number 2, 32 months. So the whole fleet has an average remaining minimum duration of outstanding charter contracts, giving us a very solid visibility on future earnings. Number three, USD 688.6 million, which is our total charter backlog, underlying the stability and the length of our fleet employment. And of course, a number from the capital market side shouldn't be missing. So 28%, which is our increased free float, reflecting the lower shareholder base. And I think as a whole, we are very proud to present those for KPIs. And coming to an end of the presentation, I would like to thank you very much for your continued interest in us. and Joseph and I are now very happy to take your questions, and I give back to you, Judith.

[Operator Instructions] And Thomas Wissler, you were first in the line, and we are happy to take your questions. Please unmute yourself.

Yes. As always, quite a good set of numbers. I have a couple of questions. You mentioned that the charter rates are incredibly resilient shape and that the charter backlog, it also looks very, very promising. But looking at the feeder container ships coming up for renewal in the next couple of months. what kind of day rate are you actually locking in right now compared to your fleet average? Are you trying to -- or will the average go up or down in the next couple of months when you come into the renewals? Maybe the second question is regarding the active asset management. The current secondhand ship there is present opportunities for further asset sales. I know that you're in active disposals at the moment. So what can we expect going forward? And the third question is regarding dry dockings, maybe you can run us through what we can expect in the second half of this year in terms of drydockings? How many driving are scheduled and how much expenses do we have to pencil in our models?

Yes, maybe I will take that. First, on the, let's say, outstanding ships we have opened for the coming months and, let's say, 6 to 12 months. what we are seeing is they virtually sold out charter market. There's virtually no ships available. We have some available. So we are keeping our cards quite close to the chest. And I think what you can expect in terms of strategy there is, and I think that we've shown this historically that we will balance the secondhand prices with what we can achieve on the charter market. I think the charter market has certainly strengthened from where these ships last were fixed. So if we seek to extend them, let's say, on particular normal similar durations. You can expect an increase in the average charter rate that we have throughout the fleet. That being said, of course, if an 800 TEU ship comes open or 13,000 view ship comes open, there will be a difference in how that impacts the average charter rate, right? So there's no even if we do fix a ship above our expectations or the current rate, then it doesn't necessarily mean that the overall average charter rate will have a significant impact. but we are very positive. We do see opportunities in disposals. But as I said, we need to balance what you can get. And what I mean by that is -- there's not only the charter rate that we are mindful about but also the charter duration, right? So when the market gets stronger, the durations you can fix actually also get longer, right? So you might be able to lock in the same rate but for double the amount of time. And that's also something that we are very conscious about as we are increasing our backlog that sometimes you give a discount to get a longer duration with a strong counterpart. Sometimes you take premium to take a short operation and playing that cycle versus selling a ship at the right time is really one of our core sort of management objectives. And what you can see from the past, I think we've mentioned it at the first earnings call that we had. I mean sometimes you see the benefit of taking a premium in the market with a risk to your portfolio that is very minimal. And sometimes you have a bigger ship or a fleet of ships that you could bind up as a bundle and you reduce the risk significantly by taking in a very, very long duration, right, as we did on the larger ship that we fixed on 7 years, we could have fixed that for 5 years as well. But that's the balance that we have to strike. And that's basically our main objective. I hope that sort of broad answer helped you a bit. And I think the second part was on the dry dockings, right?

Yes, correct.

Yes. So on the dry dockings, you -- I mean, we believe to be staying within our guidance financially. When it comes to timing, that's difficult to gauge at any given point because these are actively trading ships and then you have to take them out of the trade and put them into dry dock. And if that timing is never perfect, sometimes it slips into another quarter. Sometimes to the preceding quarter because you're actually actively working on positioning yourself to get the cheapest technically most effectful drydocking in the shortest period of time. So I -- we don't really guide on that specifically, but you can assume that throughout the portfolio with our dry dockings, that our guidance will be quite good.

Okay. Maybe one follow-up question. It's regarding your cash flow trajectory. For the second half, can you maybe walk us through what we can expect in the second half, how we should see your free cash flow development? Are you seeing any cash payments for the newbuilds or cash inflows from disposals? Or are you also planning to do more on shaping up the minority shareholders?

Maybe I take first half of that question. So the second half will have an impact because of the vessel sale that we already communicated, right? Because that was handed over in July, so that will be impacted from the -- on the new building side, from the current acquisition pipeline, we don't foresee any significant contributions to be spent from our side this year. The first tanker will actually come beginning of next year. So that we don't really see any big impact, I think, otherwise, Christopher, I'm happy for you to jive in.

If I may add. So looking at the cash flow for the second half year, all the mentioned factors are included, of course, when it comes to the asset proposal or even further investment into new ships, we have to be opportunistic. That is something which is not reflected in our guidance. And when it comes to cash outflow for the second half year, as Joseph said, based on the current already communicated acquisition, there is no further cash outflow for the second half of this year.

And we move on to Nikolas Demeter. Your question, please?

I hope you can hear me. Perfect. My question is about the EBIT guidance. You already mentioned that you have already locked in revenues. And then we also see that the ForEx exchange rate came a bit better than expected before. Does it mean because the business is really predictable, that we add up more in the upper part of the EBIT guidance? Or can you just give us a bit of flavor why it's still that take between $45 million and $55 million?

Yes. And I'll jump to that slide. As already on the second. As I already mentioned, from the revenue side already majority part on the upper end of the range is already contracted. So there's still uncertain factors, of course, is the development of the U.S. dollar euro until the -- for the whole second half of the year. which has only a certain effect since we started out our guidance with 1.20 for the whole year. But of course, still open factor is the utilization of fleet which we guide with 97% including the dry docking. So that will have an effect, which we, of course, as of now, cannot foresee if the dry dockings unfortunately, will take longer until they are being rerouted in their trade. That is something we have to see. But despite for that, I agree that we are rather on the upper side of the guidance.

Okay. Perfect. And I have one more question maybe about transactions and maybe potential buying. Do you have -- can you give you us some flavor here in the market where you could see right now some potential for buying? Do you have a segment where you look closely into where you think hear maybe a bit less. Can you tell us something about this?

Yes. Maybe I will chip in there. So I mean, what we see currently, the multipurpose segment, I think we've discussed this before, well, in the previous call. So the multi-purpose segment is a very good example of where we see value because the fleet is fairly old. The order book is very limited. The ability of this fleet to be replenished within the next couple of years is also fairly limited because of the all the yard space is full. And we see 3 structural demand drivers for this segment. We see the renewable energy build out we see the resurgence of oil and gas infrastructure because the, let's say, the years 2015 to 2022, we're all about oil production will peak. I think with the current demand for electricity and power globally, most people would say that the economy, maybe not the planet, but the economy will need both oil and gas and renewable energy. So these 2 infrastructures on the renewable and on the oil and gas side will need to be built out. You have the emerging markets that are extremely or growing extremely fast on the infrastructure side? And do you have the potential rebuilding of crisis areas globally. So you have 3 very strong demand drivers hitting a fleet that is structurally underbuilt with no real capacity to rebuild. That's why we invested, we are always looking to -- or currently, let's say, the picture there is certainly interesting enough to keep looking also in respect of how much of our earnings actually come from that segment, right? We have a lot of room to grow there. That being said, the project cargo market is very different to the container market, right? In the container market, you have 20, 25, 30 different large counterparts that are all financially very strong. The product market is more fragmented. So there, you really need to -- it's more nature, let's say, to find the counterpart that you're actually willing to fix with for 5 to 7 years. But we do see opportunities there. On the dry bulk space, we see quite good earnings, but we -- for ourselves, the asset prices that we would need to spend with our strategy. are not really attractive at the moment because the asset prices are priced in a way where people actually believe that the next 2, 3 years, will bring very good returns. And then afterwards, they hope to get rid of the ship at an even maybe premium price to what they paid. But our strategy, of course, is all about long-term cash flow visibility. -- for our shareholders. So we can't really take that risk because we deem it too high at the asset prices are in the dry bulk space almost unexplainably high to some extent. And then in the tanker space, we see lots of opportunity, not so much in the larger segments because there is where the ships are priced for a premium of what's happening in the next 6 to 12 months, which is not our strategy, right? But if you earn on a large tanker, if you earn $300,000, $400,000 a day, as some people do right now on the very large crude carriers for the next 6 months, then already half of your investment is back, right? But there's no -- nobody will write you a check for this amount of money right now. This is all market risk. And our strategy for the visibility of our shareholders is not to take too much market risk as shipping industry as a whole is sitting on a quite high point in the cycle, as you can see from our earnings in the past, right? We are -- it's been going incredibly well. So -- but in the smaller tanker space, we still see opportunity -- and then further, I mean, we see opportunity in the gas space. We see opportunity, possibly in the auto car carrier markets. And that's basically it.

And we will move on to [ Jester Oberius Captain ].

I have 4 questions, if I may, not too long so I hope you can answer those. Firstly, on the minority shareholders buy out of their interests, can you maybe comment on the time line of that and where you are in the process and the planning of that, how long will this process take you? Secondly, I see that you're focusing on long-term cash flows, as you mentioned. 2.7 years is now the charter duration average. How is this expected to go in the future going forward? Will this be at some point even higher? Is that your planning? Or does it depend probably I'd like to have some color on that, if I may. Thirdly, given your cash position and financial planning, can you maybe give some more color on your dividend policy? Is it expected to be progressive going forward? And lastly, maybe a funny question, but Ronnie and Charlie are on board. Can you maybe tell us something about whether [ Mick and Keith ] are to be expected to join us?

Maybe I'll take the one on the fleet and then Christopher take the dividend one. So Mick and Keith, our sister vessels to Ronnie Charlie, our customer names, their ships after Rock Stars. So that's basically their seem. Mick and Keith, currently, we have no plans or we are not in talks and these are as far as we know, with a different owner. And no, so short answer is no. The duration, yes, you can expect this to increase. Of course, every month, it decreases from the months that we have already capitalized, but you can expect this to increase with every new project that we do. As you see, our new project we did was 2 10-year time charters, two 7-year time charters and four 5-year time charters. Obviously, all above the 2.5 year, you do need to separate a bit. As I mentioned earlier, on the existing fleet which is debt free. We do have operational flexibility of maximizing shareholder profits. We do tend to go very as long as possible in the charter duration. But if we see an opportunity in the market to increase profits for our shareholders, then we might also decrease the duration a bit to get a higher charter rates. And the minority shareholders on a value adjusted basis, we are very, very far on this, right, because we cleared the minority shareholder structures in the very -- or the most valuable part of our fleet. And now on the EF [ Rita ] joint venture, we deem that to be strategic, and we will keep working on that. I mean we ordered newbuildings in that. And there we see value to keep that running. And on the other few very few joint ventures, we have, we've taken as they only present a small part of the value of our fleet right now, we take an opportunistic stance. So when we are in constant talks to see what we can do but we are not, let's say, breaking it over the knee because we -- these are debt-free ships and we have a lot of operational flexibility, and we will resolve them when the time is right for both partners. Sorry, dividend.

Yes, if I may, I think it's a direct relation to the increase in the charter that is our shift from -- within our transformation phase, really trying to increase the charter backlog to have more revenues visible for quite a period of time into the future. Since when we transformed the portfolio from the rather, let's say, asset play incentivized existing fleet to a more you play future fleet. Once we have this transformation executed a little bit further, then we will be in a position to really communicate a valid dividend policy. So as of now, we have to wait a little bit since I think it is important for us to establish a dividend policy when we are ready, when the charter backlog has even increased further.