Euroseas Ltd. (ESEA) Earnings Call Transcript & Summary

Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference Call on the Fourth Quarter 2021 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. [Operator Instructions] I must advise you that this conference is being recorded today. Please be reminded that the company announced their results with a press release that has been publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone that in today's presentation, Euroseas will be making forward-looking statements. These statements are within the meaning of the federal securities laws. Matters discussed may be forward-looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to Slide #2 of the webcast presentation, which has the full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And now I would like to pass the floor to Mr. Pittas. Please go ahead, sir.

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the quarter ended and full year December 31, 2021. Let us turn to Slide 3. Our income statement highlights are shown here. The fourth quarter of 2021 was a seminal one for Euroseas as we recorded the highest net income level in our history. For the fourth quarter of 2021, we reported total net revenues of $38.3 million and net income attributable to common shareholders of $22.7 million. Adjusted net income attributable to common shareholders for the period was $22.9 million or $3.18 per share and $3.17 per share, basic and diluted, respectively. Adjusted EBITDA for the period stood at $26.1 million. For the full year of 2021, our net revenue was $93.9 million and net income attributable to common shareholders was $42.3 million. Adjusted net income attributable to common shareholders for the period was $42 million or $6.02 and $6.01 per share, basic and diluted, respectively. Adjusted EBITDA for the period stood at $52.7 million. Notably, net revenues for the quarter and full year as well as adjusted EBITDA were higher than the previous years by multiple measures of magnitude as can be seen on the slide. Our CFO, Tasos Aslidis, will go over financial highlights in more detail later on in the presentation. Please turn to Slide 4, where we discuss our recent chartering and operational developments. Motor vessel Marcos V was bought with the charter for approximately 36 to 42 months at $42,000 per day. The EM Astoria was fixed for a minimum period of about 36 to 38 months at $65,000 per day for the first year, followed by $50,000 per day for the second year and thereafter fixed $20,000 per day for the remaining period. Evridiki G was extended for a minimum period of 36 to 38 months at $40,000 per day. The EM Corfu was fixed for 36 to 40 days at $5,125 per day as their positioning trip to reach a drydock destination and is, therefore -- thereafter fixed for 36 to 38 months at $40,000 per day as well. Furthermore, Jonathan P was bought with a charter attached for a minimum period of 35 to 37 months and $27,000 per day. The Synergy Keelung had its option declared by the charterer for approximately 8 to 12 months at $14,500 per day, whilst the Synergy Oakland was fixed to about 48 to 51 months, 4 years, at $42,000 per day. The vessel is to be delivered by April 15, 2022. The previous charter of motor vessel Synergy Oakland of $200,002 per day exceeded its maximum duration by about 25 days due to port delays with payment of the higher charter rates to the company continuing during the extension. However, the extension resulted in the loss of the subsequent short-term charter of $130,000 per day that was to be performed before the 4-year charter would kick in. The vessel, after an idle day of about 15 days, was chartered for single voyage charter at $160,000 per day after the completion of which, it will commence the 4-year charter. The new charter arrangements will result in about the same average rate and total revenues as the original arrangements. Furthermore, 2 of our vessels incurred repairs and were involved in special surveys with drydocks in the fourth quarter. The Diamantis P for about 49 days between September and October 2021, and EM Corfu since 29th of December till about now. No vessels were idle or commercially off hire during the fourth quarter. Please turn to Slide 5, where we review our recent sale and purchase highlights. Two vessels were delivered during the fourth quarter of 2021, the Jonathan P, the 1,700 TEU container ship was delivered in October. And Marcos V, the 6,300 TEU container ship was delivered in December 2021. Also, as previously announced, on January 28, 2022, we signed a contract for the construction of 2 eco design fuel-efficient containerships, similar to the ones ordered in June 2021. The vessels will have a carrying capacity of 2,800 TEU each and will be built at Hyundai Mipo Dockyard in South Korea. The 2 newbuildings are scheduled to be delivered during the fourth quarter of 2023 and first quarter of 2024, respectively. The total consideration for each of these 2 newbuilding contracts is approximately $43.15 million and will be financed through the combination of debt and equity. This brings our newbuilding program to 4 vessels and solidifies our market presence in the larger feeder sector. Both vessels adhere to the current greenhouse gas and other requirements and significantly improve our fleet profile, both as concerns age and eco characteristics. It is noteworthy that the new vessels will consume about 30% less fuel than previous generation non-eco ships. Please turn to Slide 6, where you can see our current fleet profile. Euroseas' current fleet is comprised of 16 vessels on the water, including 10 feeder containerships and 6 intermediate container carriers. Euroseas' 16 container ships have a carrying capacity of 50,000 TEU and an average age of about 17 years. After the delivery of the 4 Feeder containership newbuildings in 2023 and the first half 2024, Euroseas' fleet will consist of 20 vessels with a total carrying capacity of close to 62,000 TEU. Slide 7 shows our vessel employment chart. As you may see, we have chartered almost more than 92% of our available capacity in 2022, about 62% of our available capacity in 2023 and about 40% of our available days in 2024, taking into account the newbuildings as well. At the contracted EBITDA level of about $113 million for 2022 and $92 million for 2023. Our contracted average time charter rate for 2022 stands at about $31,250 per day. Whilst for 2023 and 2024, it's higher estimated at $33,000 per day and $33,500 per day, respectively. Let's now turn to Slide 9 to review how the time charter market, in general, has fared over the period. As you can see, 6 to 12-month time charter rates continued to push to new highs despite a short-lived retreat in container rates that we witnessed during November and December of 2021. Please turn to Slide 10 to go over the overall market highlights. As we said, time charter rates across all segments skyrocketed over the past 12 months and have reached all-time highs. Additionally, during the fourth quarter, the average secondhand price index rose by about 16% in Q4 over Q3. Price increases varied across different age groups with the elder vessels have increased well in excess of 100% in 2021. During the fourth quarter, newbuilding prices also increased by approximately 3% due to steel prices being on the rise and high demand for new buildings on the back of the general containership market rise. The idle containership fleet as of the beginning of 2022 stands at only about 130,000 TEU, 0.5% of the fleet, the lowest level ever. These are vessels that will probably never be reactivated anyway. The percentage of containerships scrapped to date has dropped dramatically to approximately 12,000 TEU. Again, the lowest point ever. This is, of course, despite the fact that prices have increased to over $615 per lightweight tonne due to the high demand for steel. Overall, the fleet grew by about 3.9% in 2021, without, of course, accounting for the idle deactivations. The order book has significantly increased mainly through larger vessels, with the current order book-to-fleet ratio hovering around 24% compared to just 10% a year ago. Please turn to Slide 11. The IMF's revised outlook is largely led by growth markdowns in the 2 largest economies, the U.S. and China. According to the January 2022 IMF report, global growth is expected to decrease from 5.9% in 2021 to 4.4% (sic) [ 5.4% ] in 2022, 0.5 percentage point lower since the previous projections in October. However, the 0.5% growth the IMF expects will likely be gained in 2023, with forecast up from 3.3% in October 2021 to 3.8% in January 2022. Despite slowing down growth prospects for the emerging markets and developing economies are expected to go back to the pre-pandemic trend by 2023 except for India, which is expected to be steady at around 9%. Growth forecasts remain promising for advanced economies with Japan and the ASEAN-5 doing better than 2021, while the U.S., citing tighter Fed policies and an anticipated hold to any further stimulus spending by progress -- by Congress, has a reduced growth forecast for 2022 from 5.2 percentage points to 4%. China's economic growth is projected to be only 4.8% in 2022 before picking up again in 2023 as the central banks heavily ramps up policy to ward off a sharper downturn. The lower growth rate underlines multiple headwinds facing the world's second largest economy due to a property downturn, a crackdown on debt, tougher pollution measures and strict COVID-19 curbs, which have hit consumption. For 2022 and 2023, containerized trade is expected to grow at healthy levels of 3.6% and 3.5%, respectively. Please turn to Slide 12 to review the containership age profile and delivery schedule. As you can see in the containership age profile chart located on the left side of the slide, we have a young fleet with a mere 8% of ships being above 20 years old. However, the older vessels are mainly concentrated in the smaller classes where our ships operate. The right side chart shows the delivery schedule of the current containership order book, which is expressed as a percentage of the fleet. The circle figures for 2022 to 2025,reflect the anticipated fleet growth before scrapping and slippages. Currently, the total containership order book stands at 24.3% of the fleet, which is astonishing compared to a year ago when it stood at merely 10%. The majority of the deliveries are scheduled for the second half of 2023 onwards and even then will be concentrated on the larger-sized vessels. Please turn to Slide 13, where we discuss our outlook summary. As previously mentioned, global recovery continues yet new COVID-19 variants, rising energy prices and elevated inflation still weigh in and may slow economic growth. Containership trade remains positive with moderate supply growth in 2022 accelerating in 2023 and 2024. Port congestion has continued to significantly impact the container shipping markets, leading to excessive wait times and disrupting operator schedules. These logistical bottlenecks have resulted in new highs in container freight rates, which are expected to remain throughout 2022. The short-term outlook looks optimistic, reinforced by logistical disruptions and firm trade demand. Additionally, limited supply growth in 2022 should provide some rate support before increased newbuilding deliveries in 2023. In the medium to long term, that is in 2023 and beyond, fundamentals are very complex, with a range of factors likely to have an impact. Firstly, uncertainty may arise if demand for vessel wanes once supply chain disruptions ease. Secondly, material supply pressure from 2023 onwards may overtake demand growth due to increased deliveries. But last and not least, new environmental regulations will probably result in even slower steaming by 2023, 2024, effectively removing capacity from the market. The balance is very difficult to determine. Let's move to Slide 14. The left side of the slide shows the evolution of the 1-year time charter rates for containers of 2,500 TEUs since 2000. As discussed, we are witnessing the highest charter rates in the last 20 years. According to Clarksons last week, 1 year daily time charter rates for 2,500 TEU containerships stood at $76,000 per day. The right-hand side of the slide shows vessel values in relation to historical prices since 2012. As we can see, current containership values stand at about $52 million and have significantly increased above median and average levels and are now at the highest levels over the last decade. There is no doubt that at some point, both prices and charter rates would need to correct. But the big question is when will this happen? And how far further will they have reached still then? Because the only clear thing today is the lack of sufficient capacity to share with the world's needs of today. In this unsteady environment, we have secured and continue to secure as much earnings as possible and are looking to utilize the vast amount of liquidity we are creating in the optimal way to forge a strong balance sheet and grow the company in a manner that will continue to provide it with top returns in the evolving global shipping environment for the benefit of our shareholders. And with that, I will now pass the floor to our CFO, Tasos Aslidis, to go over our financial highlights in further detail.

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you through the next 5 slides of our presentation and give you an overview of our financial highlights for the fourth quarter and full year of 2021 and compare them with our results in the equivalent period of 2020. For that, let's turn to Slide 16. For the fourth quarter of 2021, the company reported total net revenues of $38.3 million, representing a 218% increase over total net revenues of $12 million during the fourth quarter of 2020. The increase was predominantly due to the higher average time charter rates our vessels earned in the fourth quarter of last year compared to the corresponding period of 2020. For the fourth quarter of 2021, the company reported net income and net income attributable to common shareholders of $22.7 million as compared to a net income of $0.6 million and a net income attributable to common shareholders of $0.4 million for the fourth quarter of 2020. Interest and other financing costs for the fourth quarter of 2021 amounted to about $0.8 million comparable to $0.8 million that we had for the same period of 2020, during which, though, we also recorded a loss on extinguishment of debt of about $0.5 million. Adjusted EBITDA for the fourth quarter of 2021 was $26.1 million compared to $2.1 million for the corresponding period of 2020, registering a 1,132% increase over the previous period. Basic earnings per share attributable to common shareholders for the fourth quarter of 2021 were $3.15 (sic) [ $3.14 ], while diluted earnings per share were $3.13 calculated, respectively, on 7.21 million and 7.24 million basic and diluted weighted average number of shares outstanding compared to basic diluted earnings per share of $0.07 for the fourth quarter of 2020, calculated on 6.15 million basic and diluted number of -- weighted average number of shares outstanding. Excluding the effect from the income attributable to common shareholders for the quarter of the unrealized loss on derivatives, the amortization of below market time charters acquired and the depreciation charge due to the increased value of the vessels acquired with below market bank charters, the adjusted earnings attributable to common shareholders for the quarter ended December 31, 2021 would have been $3.18 basic and $3.17 diluted compared to an adjusted loss of $0.16 per share, basic and diluted, for the quarter -- for the fourth quarter of 2020. Usually, security analysts do not include these items in their published estimates of earnings per share, and that's why we're making this adjustment as well. Let's now move to the right half of the slide to discuss the same figures for the full year of 2021. For the full year of 2021, the company reported total net revenues of $93.9 million, representing a 76% increase over total net revenues of $53.3 million during the 12 months of 2020. The company reported a net income for 2021 of $42.9 million and net income attributable to common shareholders of $42.3 million as compared to a net income of $4 million and net income attributable to common shareholders of $3.3 million for 2020. Interest and other financing costs for the 12 months of 2021 amounted to $2.8 million compared to $4.1 million for 2020, during which year, we also recorded a loss on the extinguishment of debt of $0.5 million, as I mentioned earlier. This decrease of interest expenses is due to the lower average level of debt we had during 2021 as compared to the previous year. Our debt only increased in the fourth quarter of 2021 when we partly financed with debt our latest 2 acquisitions. Adjusted EBITDA for 2021 was $52.7 million compared to $11.8 million during 2020. Basic earnings per share attributable to common shareholders for 2021 were $6.06 and diluted earnings per share were $6.05, calculated on 6.98 million and 6.99 million of basic and diluted weighted average number of shares outstanding compared to basic and diluted earnings per share of $0.58 for 2020. Again, excluding the effect on the income attributable to common shareholders for 2021 of the unrealized gain on derivatives, the amortization of the below market time charters acquired, the depreciation charged due to the increased value of the vessels acquired with below-market charters and the net loss on the sale of a vessel, the adjusted earnings attributable to common shareholders for the year of 2021 would have been $6.02 basic and $6.01 diluted compared to a marginal adjusted loss of essentially $0 per share basic and diluted for 2020. Let's now move to Slide 17 to review our fleet performance. We will start our review by looking first at our fleet utilization rates for the fourth quarter of 2021 and compare them to the same for 2022. As usual, our fleet utilization rate is broken down into commercial and operational. During the fourth quarter of 2021, our commercial utilization rate was 100%, while our operational utilization rate was 98.5% compared to 98.5% commercial and 96.3% operational for the fourth quarter of 2020. I should remind you here that our utilization rate calculation does not include vessels in drydock or scheduled repairs, if any such events would occur during the period we are considering. On average, 15.01 vessels were owned and operated during the fourth quarter of 2021, earning another time charter equivalent rate of $29,994 per day compared to 14.43 vessels owned and operated in the same period, the fourth quarter of 2020, earning on average $10,497 per day. Our total daily operating expenses, including management fees, general and administrative expenses but excluding drydock cost averaged $7,708 per vessel per day during the fourth quarter of 2021 compared to $7,164 per vessel per day for the fourth quarter of 2020. Our cash flow breakeven rate during the fourth quarter of 2021 was about $11,950 per vessel per day compared to $8,215 per vessel per day for the fourth quarter of 2020, the quarter during which we did not do any loan repayments. Let's now look at the right part of the slide to review the same figures for the full year. During 2021, our commercial utilization rate was, again, at 100%, while our operational utilization rate was 98.5% compared to 97.5% commercial and 98% operational for 2020. On average, during 2021, 14.25 vessels were owned and operated, earning an average time charter equivalent rate of $19,309 per day, compared to 17.23 vessels during 2020, earning on average $9,445 per day. Our total operating expenses, again, including management fees and G&A expenses, but excluding drydocking costs for 2021 amounted to $7,212 per vessel per day compared to $6,431 per vessel per day for the previous year 2020. Let's look again at the bottom of this table to review the cash flow breakeven rate we had for the year, which amounted to $10,783 in 2021 compared to $8,357 during 2020. Let's move now to Slide 18. We have become familiar with the slide by now. We have included this slide in the last 3 or 4 calls to provide our shareholders and investors with a tool to assess the earning potential of our fleet in the coming periods. The table shown in the slide has 2 parts. The first part refers to our already in-place contracts. The table shows the available days for hire, making assumptions for the stable drydockings. The number of contracted days in each period that we're reviewing, as well as the difference of the 2, what we call the remaining open days of our fleet. As you can see in the table, almost all of our vessel available days are contracted for 2022, 92%, while 62% of our fleet available days for 2023 are also contracted out. For the contracted base, the table shows the average contracted rate which allows you by making an assumption for the OpEx and G&A expenses per day to estimate the likely EBITDA contribution. For the remaining open days, whoever uses this calculator needs to make an assumption about the daily rate to be earned, which would allow him or her to estimate the EBITDA contribution of the open days. To provide an indicative calculation, if one used the same rate as the blended contracted rate, one can see the effect on the total EBITDA for 2022 and 2023. This overall exercise is meant to provide the tool to calculate our EBITDA for the -- for 2022, 2023, even 2024, if one wants to extend it, by entering one's own assumptions about the rates for the open days. It is hard though to let go unnoticed that for 2022, a year that more than 90% of our fleet is contracted out, we expect to likely double our EBITDA as compared to 2021 and see the figure -- that this figure could even grow further in 2023 if, of course, the rate assumptions in the table comes true. Let's now move to Slide 19 to review our debt profile. On the top part of the slide, we can see our scheduled current debt repayments over the next several years. Our loan repayment schedule for this year stands at $27.4 million with debt repayments of existing debt going down over the next 3 years. In addition to the regular repayments, the chart shows light blue bars are scheduled balloon payments. In 2022, we have a small balloon payment of $1.9 million, we have $30.7 million due to be paid in 2023, and a further 1.8 million balloon in 2024. In the past, we have typically financed our balloon payments, at least the larger ones, and we expect to be able to do so in the future if we choose to do so. Two further points here. First, we have 2 vessels which are currently unencumbered, the Joanna and Akinada Bridge. Second point that I would like to make is the chart does not include the debt that we expect to assume for the financing -- the part financing we are planning to take to finance our 4 newbuildings during 2023 and early 2024. For our newbuildings, we typically make the initial payments with our own funds and draw a loan to finance the last and larger payment and the delivery of the vessel. The final quick note on this slide on the cost of our debt as it relates to the loans outstanding at the end of last year. The average margin on our debt is about 3%, and assuming a LIBOR rate of 0.3%, our senior debt cost -- our current senior debt cost is on average 3.3%, and if one includes the cost of our interest rate swaps, is averaging 3.4%. Looking at the bottom of this table, we can see our cash flow breakeven level expectation for the next 12 months in dollars per vessel per day. You can see that our loan repayments that we just reviewed over the next 12 months are to make $4,250 per vessel per day contribution to our cash flow breakeven level. If we make similar assumptions for the remaining components of our cash flow breakeven level, our operating expenses, G&A expenses, interest payments and drydocking costs, we come up with a cash flow breakeven level for the next 12 months of just around $13,075 per vessel per day. Let's now move to Slide 20. This slide provides some highlights from our balance sheet, adjusted to reflect the market value of our fleet. As of December 2021, on a book value basis first and on our asset side, which has cash and other assets of about $37.1 million. And the book value of our vessels, including advances for the newbuildings and the acquisition of the vessels, including the acquired vessels, Jonathan P and Marcos V of $183.4 million (sic) [ $183.9 million ], giving us a total book value for our assets of about $221 million. On the liability side, we had an outstanding bank debt of $119 million and other liabilities of $8.5 million (sic) [ $26.2 million ]. However, as I started mentioning, the market value of our fleet is much higher than its book value, even if adjusted for the negative value of our charters, the latter result of an increasing market -- continuously increasing market. Specifically, we estimate that our vessels were -- was at the end of last year about $445 million inclusive of the appreciation of the value of our newbuilding contracts. If we replace the book value of our vessels, we can calculate the net asset value of our fleet to be around $337 million or around $46 per share. Recently, our sales have been trading in the range of $30 to $34 per share. And although this share price reflects a noteworthy increase since the beginning of the year, it still represents a significant discount to our net asset value per share, thus offering good appreciation potential for our shareholders and good investment opportunities for other investors. And with that, I would like to close my short presentation and pass the floor back to Aristides to continue our discussion.

Thank you, Tasos. Let me open up the floor for any questions that we may have.

[Operator Instructions] We will now take our first question.

This is Tate Sullivan from Maxim Group. I'm just starting with just a couple of follow-up questions with your comments about the order book currently being composed of much larger vessels for '23, particularly for entrance into the market in '23. Can you remind us of the benefit of the operating smaller ships in your fleet and taking delivery of smaller ships? And maybe you can comment on the future composition of the containership, will you please?

Sure. Obviously, there is always a cascading effect. When you have containerships, they all carry the same kind of cargo, which is containerships. But the smaller vessels can go into smaller ports where the bigger ones cannot. And the bigger ones tend to go from -- into the bigger ports where they discharge the cargo there. And from there, smaller ships pick up the cargo and take it smaller distances towards other smaller ports. So all type of vessels are needed. The big ordering is happening on the big vessels, the ones that do the transatlantic and the transpacific tradings mainly. So you realize that we also need ships that are smaller. Not a lot are being built of those smaller ships and the ones that exist are also the elder vessels around. So we think this is kind of a relatively niche market to be in, and we are traditionally focused on that market.

And with -- I mean, most of your capacity spoken for this year, most of your days, contracted days with -- I mean is there any chance newbuild -- additional newbuild capacity -- or ship capacity opens to build you new ships next year? Or is it really today the earliest delivery still for multiple years if you do decide to build above and beyond the 4 newbuilds you have on order?

We are considering the possibility to build new vessels as well. We're still looking at that possibility. The shipyards are quite full with new orders, though. So you cannot get them with prompt deliveries these days, which is a drawback. But we will see.

Okay. And just on a topic we talked about before, just targeted debt ratios going through the cycle. And if there is eventually a slowdown, is it -- I mean the capital ratio using net asset value, do you look at 30% level or 40% level of debt to capital ratios? Or how do you look at that over the cycle?

Yes. I mean we look at -- Tasos?

I was about to say, I believe the same thing as you were started saying that we have a current leverage ratio of just around 25% using charter-adjusted values. We intend to finance our newbuildings of around 60% to 65% of our contract value. So even with the newbuilding's finance, our leverage ratio will not be -- will be below around 35%. So it's a modest leverage ratio reflective of the point in the cycle we are, even if there is movement -- downward movement of the cycle will remain very, very low leverage at levels that we're quite comfortable to have throughout the cycle.

And last for me, just following up the newbuild comment. If you did order a ship today, just in terms of the update, I know it can vary. Is it middle 2024 delivery at this point?

Around that date, yes.

We will now take our next question.

This is Poe Fratt from NOBLE Capital Markets. Just to follow up on the newbuild question. It looks like between the time that you ordered the first 2 and then moved forward on the second 2, I was a little bit surprised that you were able to minimize the price increases. It would -- the price only went up for the newbuild about 15%. And can you just talk about whether you had options for the second 2 newbuilds or whether these were just new negotiations with the shipyard and you were able to minimize the cost increases?

They were new negotiations, Poe. They were new negotiations, we didn't -- we weren't able to get options. The shipyards are very difficult to give options these days, unfortunately, because they know that there is -- it's tight to order newbuild vessels. There's quite a lot of inquiry and not too many shipyards around to build ships. So they have bargaining power these days. The reason is that the price increase was not that high is that the delivery time is quite some time out, right? The deliveries are towards the end of '23 and beginning of '24, while the first 2 vessels have delivery at the beginning of '23, first and second quarter of '23. So it's not only that the price is more expensive, not too much, likely, but it's also 6 months later deliveries as well.

Yes. But that's commensurate with the time between when you ordered the first and second, isn't it?

True, true. It is. It is. It is. But if we were able to get an early delivery, it would be -- have been much more expensive.

Okay. Understood. And so when you're looking at -- I think you talked about the earliest to get another 2 potentially newbuilds out there. Would you be looking at a like increase in costs, say, closer to $100 million for 2 instead of $86 million or sort of -- have you gone...

I don't want to speculate too much when the discussions might be going on. But if there is something to announce, we'll definitely announce it. But I leave it at that right now, Poe.

Okay. I appreciate that. Would -- could you talk about -- I think in your last webcast or webinar, I thought I heard -- or maybe it was on the last quarterly conference call. I thought I heard that there was interest in the first 2 newbuilds as far as putting them under time charters. Can you update us on any potential time charters that you might have secured or in the potential -- or process the securing on the first...

Yes, that's right. Be sure that if there is something to be announced, there will be a press release announcing it. So there is nothing announceable at this point in time. People are showing some interest in fixing, but still, we are not actively marketing the ships for charter. We think it's something that might happen within the next few months, but we're not actively marketing them yet.

Okay. Great. And then can you talk about the -- as somebody has mentioned, you just don't have that much availability this year as far as new time charters. But can you talk about the open days that you have either on the Akinada Bridge or the -- now I forget what the second one is, it's closer. Is there any change in the market that would lead us to believe that you wouldn't be able to get similar terms as far as time charter length and rates on those 2 open vessels?

The ConTex Index just came out today as it comes twice a week, all constituents were green again, which means they were all up again a little bit. So the market continues to strengthen. So we think that the more we wait, the higher we can probably still fix. I don't know if this will continue forever. It can't obviously, but it continues. So we'll see.

And would you be looking for more length, Aristides? Or given the current forward cover you have, would you be more inclined to play more the short term and keep some of those open or exposed to the spot market?

No. It will depend on what interest we see from our clients. We are happy with the levels that we are seeing for long periods as well. So if we see for the [ smaller vessels ] 3 years, we might do the 3 years for the smaller vessels. For the bigger vessel, we would do anything from 3 to 5 years. If the rate for a single year was fantastic, we could consider that as well. We will see. We will see.

Yes, stay tuned. And then can we just walk through sort of your philosophy on potentially doing either stock buybacks or dividends, whether it's a special dividend or regular dividend. If I do the math on the next 2 years, 2022 and 2023, I come to the conclusion that you, from an operating cash flow standpoint, you'll generate more than $250 million based on what the current market and current forward cover is. And you have, from a cash perspective, about $65 million of CapEx on the newbuild program, assuming that you're going to finance 60% the final delivery payments on the newbuilds. And so you'll generate a significant amount of excess cash, if you will. And unless you make additional acquisitions, can you just talk about what potential plans you might have for assessing what you do with the excess cash?

Yes. As you have seen, our first priority has continued to be to use the liquidity that we generate to grow the company and to renew the fleet and position the company to be an even more significant player within the size segments that we are active. So this is the top priority. If we can find projects that make sense. So this is the most interesting thing for us. If we run out of investment ideas, then we might consider returning capital to shareholders. However, up to now, we've been able to find good opportunities to invest. And I think that every investment that we've done up to now already appears that it has been a good investment and is an investment which is returning significant additional value to the shareholders. So up to now, we've been able to find good investments. I hope we will continue to be able to do that. If we feel that we can't do it, then obviously, we will have to do something with the liquidity that we will be making that will benefit our shareholders. As I've said repeatedly, our family is one of the major shareholders within the company and our priority is to optimize the results.

Okay. Great. And if I could just ask one last question about just the cadence of the capital that you're going to spend on the newbuilds. You have $7.6 million so far, the deposits on the first 2 newbuilds. I assume there will be 10% deposits on the second 2 newbuilds this coming quarter, maybe the second quarter. Can you -- my math brings me to about $34 million of CapEx in 2022 for the newbuilds. And then about $98 million in the -- for the newbuilds in 2023. Are those numbers in the ballpark? Or can you give us an idea of how much CapEx you'll have for the newbuild program in '22 and '23?

I think those numbers are in the ballpark. I would expect that we will make about 6 installments for the first 2 newbuilds by the end of the year. We have made 2 and we'll make another 4, I guess. And then we'll pay the remaining delivery, 70% delivery. And we'll start making installments for the newbuildings. I would imagine that we'll do one, obviously, the first 10%. We have done that. And I think the rest of them will be in 2023.

Okay, great.

And the last one -- and the fourth one will be in 2024, the 70% of the fourth one.

Yes, that will bleed into the first quarter '24. Okay. Great.

We have no further questions at this time.

Okay. Thank you very much for being with us during this call, and we look forward to talking to you in 3 months' time. Thank you.

Thanks, everybody.

That concludes the conference today. Thank you for participating. You may all disconnect.