Euroseas Ltd. (ESEA) Earnings Call Transcript & Summary

Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas conference call on the second quarter 2022 financial results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Anastasios Aslidis Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session.[Operator Instructions] I must advise you that this conference call 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 and conference call, 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 region. And now I would like to pass the floor to Mr. Pittas. Please go ahead, sir.

Good morning, ladies and gentlemen. Thank you all for joining us today for our scheduled conference call. Together with me Tasos lead Subsea Financial Officer. The purpose of today's call is to discuss our financial results for the 6-month period and costs that ended June 30, 2022. Let's turn to Slide 3. Our income statement highlights are shown here. The second quarter of 2022 was another great quarter for us, reducing the best results since our inception with an extremely high charge coverage for the remainder of the year through to 2024, we expect to be able to deliver a robust profitability for the next couple of years regardless of market developments. For the second quarter of 2022, we reported total net revenues of $48.5 million and net income of $30.7 million or $4.24 per share diluted. Adjusted net income attributable to common shareholders was $29.6 million or $4.08 per share diluted. Adjusted EBITDA for the period stood at $34.2 million. As part of the company's common stock dividend plan, our Board of Directors declared a quarterly dividend of $0.50 per share for the second quarter of 2022, which will be payable on or about September 16, 2022, to shareholders of record on September 9, 2022. The finalized corresponds to a yield of about 7%. As of August 10, 2022, we have repurchased 40,000 shares of our common stock in the open market for about $900,000. Under our share repurchase plan of up to $20 million, which was announced in May 2022. We go over the financial highlights in more detail later in the presentation. Please turn to Slide 4, where we discuss our recent chartering and operational developments. During the second quarter, we took delivery of M/V Emmanuel P and M/V Rena P on May 24 and June 27, respectively. Both vessels have a capacity of 4,250 TEU and we build in 2005 and 2007. There were no new charters this quarter as all our vessels are fixed until the fourth quarter of 2022. Regarding repairs and drydockings, it recommends the second scheduled drydock, which was completed in the third quarter of 2022. There were no idle vessels during this quarter. Please turn to Slide 5, where you can see our fleet profile. Our current fleet consists of 18 vessels, including 10 feeder and 8 intermediate containerships with a cargo capacity of close to 60,000 TEU and an average age of 17 years weighted by size in TEU. Turning to Slide 6, we present our vessels under construction, which consists of 9 feeder container ships, which are expected to be delivered in 2023 and 2024. The 9 feeder container ship new buildings will have a capacity of 22,000 TEU. After the delivery of these new buildings, our fleet will consist of 27 vessels with a total carrying capacity of approximately 81,000 TEU. Slide 7 shows our vessel employment schedule. As you can see, [fixed rate] coverage as of the end of Q2 2022 stands at approximately 98% for the remainder of 2022, 78% for 2023 and almost 54% for 2024. Let's now turn to Slide 9 to review how the 6- to 12-month time charter rate has developed in the last decade. Charter rates were low across all segments until mid-2020. But since the onset of the pandemic, we have dramatically improved, posting all-time highs. Even the rate started retreating towards the end of 2021, we jumped to new highs during the first half of the year. In the last few months, rates appear to have decreased due to a number of reasons, including a lack of demand for longer-term charters, meaning 3 years plus, partly due to the limited availability of vessels and partly because of the wait-and-see approach of charters as well as lower demand for the transportation of finished goods, which is triggered by the uncertainty surrounding the ongoing geopolitical and global economic events. Nevertheless, rates still remain at record high by any historical comparison. Please on Slide 10, where we summarize the containership market highlights for the second quarter 2022. Time charter rates across all segments declined slightly over the past 3 months, but are still higher than at the start of 2022, more than 4x higher than at the end of 2020 and still well above the historical medium of the last 12 years. Even though the secondhand price index decreased levels by about 3% in the second quarter of 2022 over the previous quarter. secondhand prices remain very high historically. Generally speaking, the market softened a bit in the second quarter as the war in Ukraine raised uncertainty and diminished appetite for any investments. In the meantime, the newbuilding price index increased by about 2.6% in the second quarter of 2022 over the past quarter. In fact, we believe prices for containership rose even further in the second quarter against the backdrop of decreasing slot availability at yards, rising building costs, manpower costs and energy costs. The containership fleet has grown by approximately 2% year-to-date without accounting for idle vessels reactivation/idling. The Idle containership fleet as of July 18, 2022 stands at about 0.9% of the fleet and has remained stable during the last year at the lowest levels. However,this number includes Iranian sanctioned ships and ships that were involved in blank sailings due to the lockdowns in China during May and June bringing the actual number of ships really idle and inoperable to a very low number. The containership market conditions still being exceptionally strong, no containers have been sold for recycling so far this year and are now expected to be recycled by the end of the year. By in large this has been the quietest period for containership scrapping since 2006. Scrapping prices fell sharply to about $600 per lightweight ton in the second quarter of 2022. The prices were clearly impacted by currency depreciation and the softening of the steel markets locally. In addition, these prices are based on a very shallow market with no transactions reported and only available bids much lower than what owners are willing to accept. Please turn to Slide 11. The global GDP growth forecast has been further reduced for 2022 according to the IMF latest report as several global events have hit our economy already weakened by the pandemic. The ongoing geopolitical conflict between Russia and Ukraine added to existing inflationary progressions that had already started building up due to the economic stimuli provided during the Pandemic. Containerized Trade monetary policies, including a series of aggressive interest rate hikes to help address inflation. We renovated energy prices, mainly due to the Russia Ukraine conflict and lingering supply chain issues as well as additional slowdowns due to sporadic Covid-19 lockdowns and the property sector crisis that may further suppress Chinese growth the IMF lowered its global GDP estimates from 3.6% to 3.2% for this year and to 2.9% for 2023. GDP growth in the United States was revised downwards to 2.3% for 2022, a 1.4 percentage point lower from [indiscernible] due to lower growth in tighter monetary policies. In European growth has dropped to 2.6% resulting from the Russian Ukraine conflict and tighter monetary policies. Due to global spill over caused by its various regional issues, China's growth was also revised down to 3.3% for 2022, a 1.1 percentage difference from the H quarter. Growth in emerging markets and developing economies is also expected to sharply to accelerate. And India's forecast has been revised down to 7.4% to 22% and 6.1% for 2023, while the only country with better forecast this quarter seems to be Brazil with an anticipated growth of 1.7% in 2022 from 0.8% previously due to the robust category in Latin America. From the developed economy, Japan and the ASEAN-5 also been revised downwards for 2022 and 2023 due to concerns about slowing economies following the U.S. interest rate hike and ongoing inflation. Looking at the container trade and according to custom research demand, demand is expected to decline by 0.6% in 2022 compared to 6.5% growth from the previous year. For 2023, containerized trade is projected to grow by 2.3%. Rate and growth contractions are being continuously revised as the effects of the lockdowns in China and geopolitical tensions between Russia and Ukraine on world growth and trade are being continuously assessed. Please turn to Slide 12. The containership fleet is relatively down with the most vessels under 15 years old and only 9% of the fleet over 20 years old. The right side chart shows the delivery schedule of the current containership book, which is expressed as a percentage of the fleet. The circle figures for 2022 to 2025 reflects the anticipated fleet growth before any scrapping and slippages. Clarkson's expects new deliveries of about 4.5% of the current fleet to be delivered in 2022, 9.5% in 2023 were 9.7% in 2024. Currently, the total container ship orderbook stands at 27.8% of the fleet and the majority of the deliveries are scheduled for the second part of 2023 onwards. Please turn to Slide 13, where you can see the fleet age profile and orderbook proceeds from 1,000 to 3,000 TEU. It can be seen here, the number of vessels in this size range that are 20 years is 22%, much larger than the 9% for the average of the fleet shown in the previous slide. Also, the total order in this size bracket is under 13%, about half of that on the whole fleet. In other words, the supply dynamics for the smaller sizes are much more favorable than for the bigger ships. This was one of the prime reasons for us tracking a new building program around these sizes. Please turn to Slide 14, where we discuss our outlook summary for the containership market. Charter rates have dropped by about 10% to 20% from recent record highs, while Freight rates have fallen circa 20% to 30% below historical highs. Nevertheless, they both still remain spectacular. Pressure on container trade has increased as macroeconomic headwinds locked down in China, the Russia Ukraine conflict inflationary pressure on consumers and a shift back towards services spending have impacted volumes. Ongoing disruption caused by port congestion remains extremely supportive to the charter market despite trade volumes in 2022, having come under pressure. Charter rates have shown some signs of softening, edging down only marginally. The charterers appear reluctant to fix longer periods or fix forward. With port congestion likely to take time to ease, demand remains above pre-Covid levels despite the major headwinds and the moderate fleet expansion. Container market conditions look likely to remain positive in the short-term Consequently, we expect the remainder of 2022 to remain strong. However, in 2023, increased delivery, easing of port congestion and demand destruction should take their toll and charter rates should decline significantly. Looking beyond 2023 fundamentals are complex with a range of factors likely have an impact, including the direction of global growth rates, which may move in either direction depending on the fight control inflation and the outcome of the Ukraine-Russia war. Material supply pressure from 2023 onwards, which may overtake demand growth and lastly, new environmental regulations which will probably result in even slower steaming by 2023 to 2024, effectively, removing capacity from the market Let's move to Slide 15. The left chart of the slide, shows the evolution of 1-year time charter rates for containers with a capacity of 2,500 TEU since 2010. According to Clarksons, as we move ahead the 1 year daily time charter rates both 2,500 TEU containership stood at $72,500 per day. The right-hand side of the slide shows the historical price rate for the newbuilding and the 10-year old container ship with the capacity of [ 1,100 TEU ]. As you can see, second [ hand ] prices increased significantly in [ time ] charter rates during the last 2 years. However, the increase in prices for newbuildings was muted. This was the second reason that called for us to invest a significant part of the projects we have secured in newbuilding prices. The first being the underinvestment in smaller 5 versus as already discussed. The third, and probably the most important reason for putting in place our newbuilding program was the fact that due to environmental concerns, the world will need new, more economic [ conversions ]. These ships, which consume nearly half the fuel that [indiscernible] do, we [indiscernible] to a greener environment. We are confident that this will be appreciated by the markets too in revolving our vessels with higher charters than for render ships. Indeed, this has been the case for our first 2 vessels that have been former chartered for a 3-year period starting upon the deliveries in first half of 2023 at $48,000 per day, a rate which repays a full investment in just 3 years. Given our charter fleet between now and the end of 2024 has very profitable rates that are to generate significant cash flow reserves, we intend to use the cash flow we are generating not only to fund the equity portion of our 9-vessel newbuilding program, but also reward our shareholders via our ongoing dividend and share repurchase program. Notwithstanding the above, we will still have a significant war chest to pursue other investment opportunities which can be accretive to our shareholders when such opportunities arise. 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 [indiscernible] As usual, I will now take you through the next 5 slides of our presentation and give you an overview of our financial highlights for the second quarter and first half of 2022 and comparing to the same period of last year. So with that, let's turn first to Slide 17. The company reported total net revenues for the second quarter of $48.5 million, representing a 165% increase of our total net revenue of $18.3 million during the second quarter of 2021. This is being the result of the increased time charter rate of our vessel in the second quarter of this year compared to last. And also, due to the case in the other number of vessels, we only operated in the second quarter of this year, again, compared to last year. The company reported a net income, a net income attributable to common shareholders for the period, of $30.7 million as compared to a net income of $7.9 million, a net income attributable to common shareholders of $7.6 million, respectively, for the same period of 2021. Interest and other financing costs for the second quarter of 2022 amounted to $131 million compared to $0.7 million for the same period of 2021. This increase is due to the increased amount of debt and the increase in the weighted average LIBOR rate that we paid in the current period compared to the same period of last year. Adjusted EBITDA for the second quarter of 2022 was $34.2 million compared to $10.3 million achieved during the second quarter of 2021, an increase of 231%. Earnings per share attributable to common shareholders for the second quarter of 2022 were $4.26 and $4.24, basic and diluted calculated on about 7.2 million weighted average number of shares outstanding as compared to basic and diluted earnings per share of $1.12 and $1.11 respectively for the second quarter of 2021 calculated on 6.8 million approximately basic diluted weighted average number of shares outstanding. Excluding the effect on the income attributable to common shareholders of the unrealizing 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 time charters. The adjusted earnings attributable to common shareholders for the quarter would be $4.1 per share basis and $4.08 per share diluted respectively, compared to adjusted [indiscernible] diluted over quarter ended June 30 year 2021. For that quarter, we excluded the unrealized loss on derivatives. Usually, [indiscernible] do not include the above items in the [ bank statements ] while they are making [indiscernible]. Now let's view with the numbers for the 6-month period. The first half of 2022, the company had a total net revenues of $93.9 million, representing a 188% increase over total net revenues of $32.6 million for the first half of 2021. We reported net income and net income attributable to common shareholders for the period in the first half of $60.7 million compared to a net income of $11.7 million and net income attributable to common shareholders of $11.1 million for the first half of 2021, an increase of 445%. Interest and other financing costs for the first half of 2022 amounted to $2.1 million compared to $1.4 million for the same period of 2021. This increase, again, is due to the increased amount of debt repayment and the increase in the average LIBOR we paid for the period. Adjusted EBITDA for the first half of 2022 were $65.3 million compared to $15.9 million for the same period the first half of 2021. Earnings per share attributable to common shareholders for the first half of 2022 were $8.40 basic and calculated on 7.2 million average number of shares outstanding, and $8.36 per share diluted, calculated on 7.3 million average weighted number of shares outstanding compared to basic and diluted earnings per share of $1.65 and $1.64, respectively, for the first half of 2021. Again, excluding the effect on the income attributable to common shareholders for the first half of this year of the unrealized gain on derivatives, the amortization of below market time charters acquired, the depreciation charge, the increased value of the vessels acquired with below market charters, the adjusted earnings per share to the common shareholders for the 6-month period [indiscernible] basic and $7.77 diluted compared to adjusted earnings of $1.58 per share basic and $1.57 per share diluted for the same period of 2021, against [indiscernible] the unrealized derivatives and the loss on the sale of the vessel. Let's now go to Slide 18 to review our fleet performance. We will start our review by looking first at our fleet utilization rate for the second quarter of 2022 in comparison to 2021. As usual, our utilization rate is broken down to commercial and operational. During the second quarter of 2022, our commercial utilization rate was 100% and our operational utilization rate was 99.7%, compared to 100% commercial and 99% operational for the second quarter of last year. On average, 16.46 vessels were owned and operated during the second quarter of this year, earning an average time charter equivalent rate of $33,714 per day compared to 14 vessels that we owned and operated in the second quarter of 2021, earning an average of $14,853 per day. Our total operating expenses, including management fees, G&A expenses, but excluding drydocking costs, averaged $7,732 per vessel per day during the second quarter of this year compared to $6,860 per vessel per day for the second quarter of 2021. If we move further down in this [ page ], we can see the cash flow breakeven rate for the second quarter of 2022, which in addition to the operating costs mentioned above takes into account interest expenses, drydocking expenses and loan repayments, excluding our balloon repayments. Thus, during the second quarter of 2022, our daily cash flow breakeven rate was $13,561 per vessel per day compared to $9,937 per vessel per day for the same period in second quarter of last year, with a big part of the difference being accounted by the higher loan repayments made during this period. Next, let's go over to our utilization rate and remaining of the figures for the first half of the year and compare them again to the same period of 2021. During the first half of 2022, our commercial utilization rate was 99.8%, and our operational utilization rate 99.6% compared to 100% commercial, and 98.3% operational utilization rate for the same period in the first half of last year. [ Owned ] and operated 16.23 vessels in the first half of 2022, earning an average per charter equivalent rate of $33,843 per day compared to 14 vessels and $13,523 per day during the first half of 2021. Our total operating expenses, again, including management fees, G&A expenses, [ excluding ] drydocking costs were $7,534 per day during the first half of this year compared to $6,887 per vessel per day for the same period of 2021. If you move further down on the table, you can see again the cash flow breakeven rate for the first 6 months of 2022. And that amount to be at $13,805 per vessel per day compared to $9,638 per vessel per day for the first half of 2021. It differs again mostly being accounted by the [ prior loan ] repayments during this year. We now move to Slide 19. This slide provides our shareholders and investors a tool to assess the earnings potential of our fleet in the coming periods. The same is shown here, we call it EBITDA calculator, it has 2 parts. The first part refers to our current contracts in place. Starting the current vessel data available, the fleet shows the available fleet days and after making some assumptions for days [indiscernible]. Also, it shows the number of contracted days, the percent coverage and the average contracted rates in this period. By making an assumption for the operating expenses and other G&A expenses and the drydocking cost, we can estimate the EBITDA contribution of the contracted portion of our fleet. The second part of the table and for future periods, we can see the difference of the available days and the contracted days what we call the remaining open days of our fleet. To complete our EBITDA calculation for the entire fleet, we need to make an assumption about the average rates that will be earned by our open days. Here, one could make his or her own assumptions. In this category, we would assume that the open days in the second half of 2022, 2023 and 2024, we [indiscernible] the same rate as the average of the current contracted days, you can see we can get the estimates of EBITDA that we see at the bottom of the table. Furthermore, knowing our open days in this period, we can easily calculate the sensitivity of our EBITDA estimates to chalk the rate changes. The note below the table provides the sensitivity of our EBITDA to [indiscernible] rate changes. For example, if our 2023 open days are assumed to earn $20,000 per day instead of $33,218 shown in the table, our EBITDA for the year would be approximately $143 million. Let's now move to Slide 20 to review our debt profile. On the top of the slide, you can see our steady current debt repayments over the next several years. Our loan repayment schedule without balloons for this year stands at about $27.4 million with our debt repayments of the current debt going down over the next couple of years. There a number of [indiscernible] payments coming June 2023, which we expect to assume be able to [ finance ] if we choose to do so. If not, then our debt profile does not include any new debt that we expect to assume to finance our newbuilding program. A quick look on this slide about the cost of our debt, which is related to the launch of [ spending ] at the end of the last quarter. The average margin of our debt is about 3% and assuming the LIBOR rate of around 2.8%, our cost of senior debt would be an average about 5.8%. If I include the cost of our interest rate swaps, which are an average about 1.7%, the overall cost of our debt is comedown a bit to about 4.7%. Looking now at the [ documented ] table, we can see our cash flow breakeven level expectation for the next 12 months in dollars per vessel per day. You can see the [indiscernible] components that make up our cash flow breakeven level that [indiscernible] and the final breakeven rate for the next 12 months, we expect to be a little over [ $13,993 ] of which about $4,227 per vessel per day is a contribution from loan payments. While looking this presentation, let's now move to Slide 21 to provide some highlights on our balance sheet. As of June 30, 2022, our assets to include cash and other assets amounting to about $17.1 million, advances for our newbuildings of about $37.8 million and the present book value for our vessels of about $233.6 million, resulting in book value for our assets to about $288.5 million. On the liability side, our debt as of June 30, 2022, stood at $105.2 million, representing about 36.5% of the book value of our assets. We said on our liability side to report the value of our recently acquired below market charters, which was estimated in order to record the recent vessel acquisitions in their fair value of $42.7 million or 14.8% of our assets and other liabilities amounting to about $7.4 million or 2.5% of our total assets, resulting in about $123 million book value of our shareholders' equity. However, the market value for our fleet is much higher than its book value. Based on our own estimations, using the charter-adjusted market value of our vessels and newbuilding contracts, our vessels are worth -- are estimated to be about $538 million as of the end of June 2022, which translate to a net asset value of [ $439 ] million or about $66 per share. Recently, our shares have been trading in the range between $22 and $29 per share, [indiscernible] representing a significant discount to our net asset value in offering good appreciation potential for our sale process and good investment opportunities for our investors. And with that, I would like to close my presentation and pass the floor back to Aristides to continue the discussion.

Thank you, Tasos. May I now open up the floor for any questions you may have. Thank you.

[Operator Instructions] Our first question is from Tate Sullivan with Maxim Group.

With your comments about no scrapping this year but then with the rates -- potential rates to decline meaningfully in '23 and then taking delivery of 9 newbuilds over the next 3 years -- 2.5 years. What's the balance you look for? When would you decide to start to scrap some of your older ships? Or would we have to see rates decline for those ships to below breakeven levels? Or would you look for some other factor, please?

Sure. Of course, everything will depend on how the market develops, right? Depend -- so we're not taking any decision now about what we're going to do in 2024 when essentially most of these charters end. We've got a couple of years left for most of the ships which are under employment. So we will take the decision much closer to the time. If at that time, the market is [indiscernible], then probably we will scrap them. If the market is still holding well and the ships are worth passing the next [ survey ] and can still contribute, we will keep them. It's a decision for the future, not for now.

Okay. And then with -- you commented on the newbuilds and 3-year rates, well, in general, in the market, 3-year rates no longer available currently. But are you still trying -- going to target potentially 1 or 2-year rates serve or even shorter based on -- it will just depend on how severe the decline is in '23 for the newbuild contracts?

Again, this is not a decision that I think will be taken this year, except if we see a sudden strengthening in interest and in demand for longer-term charters. We would prefer to fix longer term, but we've got a lot of time to wait till then because the next -- the third vessel to be delivered to us only comes in the third or fourth quarter of 2023, 4th quarter actually. So we've got more than a year's time till that ship delivers and we will wait and see.

Even if the rate decline, and if you look at the [indiscernible] of charter rate, you can see that there's a decline assumed there. The levels are way above what our newbuildings breakeven and would be significant profitable anyway.

Yes, great point. And Tasos, just a quick one on the capital ratio based on the NAV, mean are you still on a fully delivered basis potentially, I mean, with your NAV ratio below, capital ratio below 20% based on a fully delivered basis, sort of basis, are you targeting 30% to 35% capital ratios?

I think we -- you mean the level of [indiscernible] right? The...

Yes. Yes.

The newbuildings, we intend to finance on the order of 50% to 60% of the contract price as a base, and we see what other options we get. So if you blend the [indiscernible] leverage, which is below 20% of the base of market values in the, let's say, 60% leverage of the newbuildings, we will be in [indiscernible] below 40% of our leverage, even assuming some decline of our aging of the vessels.

Our next question is from Poe Fratt with Alliance Global Partners.

Several questions. First of which is a housekeeping item. It looks like over the last 2 quarters, your commission rates have dropped into the 3.5% range from closer to 100 basis points higher. Have commission rates declined, or is that just something that is something else going on there?

No. The commission rates really depend on who the charterer is and through which channels we are able to fix them. There's been a few fixes with very little commission rate charge, which affects the average. But I wouldn't consider this as a norm.

If you look at the [ release ] that we have on our website, Poe, you will see at least in one case, there is an [indiscernible] the [ rate ] is sort of net of commission because the way that deal was developed we have built the absolute lower commission rate because it is paid before the results. So we don't record it, and that might really what reduces the average.

Okay. Yes. I'm just using 4.5%. So I just wanted to fine-tune that. Then, secondly, if you could talk about the updated EBITDA calculated on Page 19. It didn't look like '23 and '24 changed much from the bottom line total EBITDA number, but the EBITDA number versus the first quarter went down just about almost $7 million. It looks like some of that was drydocking expenses. But can you just talk about the changes in the second quarter EBITDA calculator versus the first quarter EBITDA calculator?

Yes. These are meant to be used as tools to put their own assumptions, and the assumptions that is put on those tables, that is to repeat the existing contracted rate [indiscernible] assumption. If you want to put that ratio there is, if we were [indiscernible] were different at towards the existing contract that would result in a difference in the EBITDA. Or it could be the other [indiscernible] operating costs due to [indiscernible] in this quarter or higher drydocking cost or [indiscernible] drydock for more quarters than others. So those were the reasons that might change the EBITDA on to the margins.

Okay. But it looked like, Tasos, the average contracted TC rate went down from $32,000 to about $31,200 is down by about $800. And why would that have gone down if it's already contracted?

I mean I need to get back to you on that to [indiscernible] means that the certain vessels that set the driver were shifted and changed the other to something like that. I mean we get back to you on that one.

Okay. Yes, it didn't look like the 2023 drydocking nor the '24 drydocking estimates changed at all. So just nitpicky, but just wanted to check that out. Then if you look on Page 20 that your drydocking expenses are up over the next 12 months. So your interest expenses. So your breakeven is up about $750 on a pre-debt amortization schedule. What -- other than what you've already talked about, is there anything else going on as far as pushing those numbers up? Is it drydocking or the interest expenses? The interest expense seems to be going up pretty materially relative to the last quarter. And your debt expense or debt loads shouldn't have gone up that much and your capital structure hasn't -- shouldn't change much over the next 12 months. So just trying to figure out why that would be up $380 relative to the first quarter.