Jinhui Shipping and Transportation Limited ($JIN)

Good morning to those in Europe. Good afternoon to those in Asia. Thank you for joining Jinhui Shipping and Transportation Limited Q1 2026 Results Presentation. I believe you've all had a look at the results and have a copy of the presentation slide shall begin. For Q1 2026, revenue for the quarter, USD 33 million. Earnings before interest, tax, depreciation and amortization, USD 17 million. We have recorded a net profit of $4 million for the quarter. Basic earnings per share at USD 0.04 and gearing ratio as of the end of the quarter, 5%. This slide shows the comparison quarter-on-quarter. I think the good news, in particular, is the average daily time charter equivalent has risen 23% quarter-on-quarter. Our chartering revenue declined by 17% to $32.8 million, primarily due to a reduced number of vessels in operation. We've sold off a number of older vessels. And of course, at the same time, we have committed to build some new ships, which will be delivered going forward. The group recorded a consolidated net profit of $4 million for Q1 2026 compared to $17 million for Q1 2025. The decrease was mainly due to the absence of a one-off settlement income of $20.2 million from the nonperformance of a charteredparty in the previous Q1 2025. Average TCE improved at 23%, as described just now. Our fleet renewal strategy is still going ahead. During the quarter, 2 vessels were disposed at an aggregate consideration of USD 47 million and scheduled deliveries to the new owners, the buyers in Q3 2026. In February 2026, the group entered into 2 shipbuilding contracts for the construction of 2 Ultramax newbuildings, at a consideration of USD 34 million per vessel, both scheduled for delivery in 2029. Shipping-related expenses declined 36% from $21.6 million in the last corresponding quarter to $13.9 million in the current quarter. The reduction reflects a reduced number of vessels in operation alongside a decline in hire payments from expiry of certain chartered-in engagements last year. The group recorded 4% increase in daily running costs to USD 5,612 per day compared with Q1 2025. The increase is primarily due to higher crew costs, expenditure on spare parts for vessels, driven by an increase in operational demand and the need for maintenance to ensure optimal performance. During the quarter, total CapEx amounted to $9.8 million, in which $9 million was paid for vessels under construction. Total secured borrowings decreased to USD 107 million as of end of the quarter, with current portion of USD 12 million and noncurrent portion of USD 95 million. So here is a summary snapshot of the financials, self-explanatory, so I won't go into details. As of Q1 2026, our total assets is at USD 539 million. Total equity USD 383.9 million. Total borrowings $107 million, rounding up, USD 107 million. Current ratio of 3.71:1, gearing of 5%. We have available liquidity at USD 87.76 million. Return on equity 1.13%. Of course, some may ask why are we keeping such a low gearing. It's not just for the sake of conservative. But of course, we have newbuildings coming in, so we will have to make capacity for borrowings for our new vessels going forward. As of yesterday, we have 21 vessels, total carrying capacity of 1.68 million deadweight tonnes and 98% utilization rate. In January, our Supramax's contracted to dispose in December 2025 had been canceled due to one of the contractual clauses cannot be fulfilled. In February, the group entered into 2 shipbuilding contracts, each with a deadweight of 64,100 metric tonnes at a consideration of USD 34 million per vessel to be delivered -- scheduled delivery in 2029. In March, 2 vessels were sold for USD 23.5 million and USD 24 million respectively, both with deadweight of 63,485 metric tonnes. The vessels will be delivered to the buyers in Q3 2026. At the reporting date, the group's order book comprised of 8 newbuildings, 1 to be delivered in 2026, 1 in 2027, 4 to be delivered in 2028 and 2 to be delivered in 2029. And as of the end of the quarter, we are operating 21 vessels, of which 18 are our own vessels and 3 chartered-in. Here's the detail of our own vessels. And in terms of our chartered-in vessels, we have 2 remaining, 1 Panamax and 1 Capesize. And below is the 8 vessels newbuildings to be delivered between 2026 and 2029. So here's the evolve -- our evolving fleet size. We are taking the opportunity to renew and hopefully, we'll slowly build up our fleet again. Our total debt included bank loans and other borrowings of USD 107 million. Bank loans represented revolving loans and term loans, which were secured by group's motor vessels, land and buildings, investment properties and financial assets at fair value through profit or loss to secure credit facilities. As of the end of the quarter, 11% will be repayable within 1 year, 68% will be repayable within 2 years, 8% within 3 to 5, and 13% 5 years plus. In terms of cargo mix, 63% will be minerals, 13% coal, 8% agricultural products, 4% cement, 4% steel product, 3% fertilizers and 5% other [indiscernible]. In terms of distribution of cargo, 32% South America; 21% Africa; 20% Asia, excluding China; 13% Australia; 5% China; 4% Europe and 5% North America. In terms of the discharging ports, 45% of the cargo goes to China; 28% goes to Asia, excluding China; 21% goes to Africa and 6% goes to South America. As of the end of Q1 2026, the TCE has improved fairly significantly, especially on the Capesize and Panamax sector. Capesize TCE as of Q1 2026 USD 30,408 per day that is; Panamax, USD 17,705 per day; Ultramax, USD 13,710 per day. This will be equivalent to an average for the entire fleet, USD 16,290 per day. As at the reporting date, we have successfully covered 33% of our Capesize and 100% of Panamax vessels days for the rest of 2026, with an average rate of $23,000 and $19,000 per day, respectively. For Ultramax/Supramax, 51% of vessel days were covered at an average rate of USD 14,000 per day for the rest of 2026. Daily vessel running costs, Q1 2026, $5,612 compared to Q1 2025 of $5,375 and the full year 2025, $5,895. To be honest, I don't see fairly big movements here. So -- and I explained already earlier on, crew costs, maintenance costs, operational needs, et cetera, there's a slight increase when compared quarter-on-quarter. Nothing alarming on this front. More importantly, on the outlook. We see right now balanced freight market and asset market. And we hope and we expect that it will continue to be steady for the rest of the year. The supply and demand of dry bulk vessels in fairly good balance, particularly strong on the Capesize. However, at the same time, we do see some signs of disconnection between asset prices and freight. And that's why we will always stay cautious. At the same time, we will continue to look for opportunities to maintain a young fleet, i.e., for older vessels, if we see a good price in the market, good buyer, we may consider disposal of older vessels. And then if they are available, whether in the secondhand market or newbuilding market, good opportunities, we will do such trades again, continue. But most important of all, we'll continue to achieve growth while maintaining a healthy balance sheet. I think one thing that is very important for everyone to like to hear is dividend. For this current quarter, there is no declaration of dividend by the Board of Directors. Now if anybody has any questions, please fire away.

Okay. Question 1 first on the Middle East. We actually have fairly minimal exposure of our vessels in the Middle East, whether it's during the conflict or normally, it's not an area that we frequently visit. No, we have minimal exposure there. And in terms of risk insurance, I believe you mean the war risk. I don't have a number right in front of me right now, but it's -- again, it's minimal, and it's actually paid by the charterers, not us. Which are the countries in Africa that receives our cargoes? For -- actually, for the loading of cargoes, I think it's the usual -- very obvious suspect Guinea, Sierra Leoni, Ghana, bauxite trades. For discharging, it will be the same countries, maybe some other neighboring countries. I actually do not have -- know the exact names, not in front of me. We actually -- most of our contracts are on time charter basis. So we do not take cargo contracts in terms of the -- if you're asking about the [indiscernible] volume, no, we do TCEs. If I am to sell the oldest Capesize, what would be the price? I can't -- we haven't put it in the market to tell. But if you work on the benchmark, recently 2016 Imabari Capesize has been reported to go for USD 60 million plus. The company has locked in 51% of its Ultramax/Supramax daily charter rate of $14,000, any update on this? This is the update. This is the update. Otherwise, I mean, we see a steady, possibly improving market. And we have to balance what we lock in and what we put on spot. If we lock everything in, then we won't be able to take advantage of a rising freight market if we have nothing on spot. Is that something you are considering, meaning selling the oldest Capesize built in 2008? I have to kill you if you are to know, joke. We can't say. It's something that we will always look at and see whether the price to fetch right away versus whether we see further upside in terms of freight. Right now, we do not have any plans to sell this older Capesize, not now, not at this very moment. We look at all opportunities very seriously. Thank you for your comment. Any further questions? Well, hopefully, Q2 will be better than Q1. That's all I am going to say. I can -- I can see how others, non-industry participants from the financial markets, from an investment professional thinking that we are overly conservative. Maybe we have the handicap of being in shipping for too long, we have seen extreme volatilities. Hence, we will tend to be conservative. At the same time, I don't -- I'm not sure whether when you say -- you see us as perhaps overly conservative. Does that mean in terms of leveraging or what. But I think being conservative in our industry pays off overall in the longer term. I think I touched on this, maybe we look like we are overly conservative right now in terms of gearing. But as we have a sizable newbuilding program. In fact, if you look at it, as of the March 2026, the capital commitment aggregates to USD 232 million. And we will be adding on leverage to fund this newbuilding program in due course, but we'll do it by stage. So you will see eventually gearing picking up back again. Of course, we will be delighted if it is so low 2 years down the road. That means in terms of cash flow, in terms of freight, we are making extremely, extremely healthy money. So I think this is how we're approaching things. We are freeing up capacity. If you talk about conservative, in terms of balance sheet, freeing up capacity to add on leverage in any time. Well, thank you. Yes. I mean, we've seen -- I've always described, we've seen cash raining down shipping, but we've also seen -- excuse me for my language, s*** hits the fan. So things can be very, very bad. And we remember the pain, so we believe being conservative will pay in the long term [indiscernible]. Any more questions from anyone? Okay. If there are no further questions, I'll call this the end to the presentation. Thank you very much for dialing in, and I look forward to reporting even better numbers in coming quarters. Thank you.