MPC Container Ships ASA (MPCC) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Financial Year 2020 Annual General Meeting. [Operator Instructions] I would now like to hand the conference over to your CEO today, Constantin Baack. Please go ahead.

Many thanks, operator, and hello, and good afternoon to everyone listening in, in these still unusual times. We are presently, obviously, in a market environment that is unusual also in terms of the annual general meetings. As such, we are hosting this conference call in line with the currently applicable COVID situation. Let me raise some introductory remarks before we run into the agenda. First of all, this is Constantin Baack, I'm the CEO of the company, and I'm presently representing also Ulf Holländer, the Chairman of the Board, who is unfortunately unable to attend, but whom I'm representing by way of proxy. Please be reminded that we have, in these unusual times, obviously, a situation where we have encouraged shareholders to abstain from appearing in person at the Annual General Meeting, but we hope this form provides the opportunity for all shareholders to raise questions on the agenda items or other aspects of the company's business. The AGM is being broadcasted live, so everyone has the opportunity to jump in with questions. I will pause after each agenda item to allow for questions, either in raising or by way of a verbal contribution. The webcast attendance will not be minuted As a formal attendance of the general meeting, that will be done separately in light of the advanced voting procedure that has been implemented adhering to the respective guidelines. Now let me just start off with a short summary of votes being represented. In total we have 194,358,195 shares represented at today's general meeting, comprising of 298,135 shares represented by proxy; 1,749,432 shares having voted in advance; and a further 192,310,628 shares represented via voting instructions. In sum, 49.3% of the company's outstanding share capital is thus represented on the 2020 Annual General Meeting. On that note, I would like to jump into the agenda, and I would like to start off with the election of a chairperson as a person to -- and a person to cosign the minutes. The proposal is that I, Constantin Baack, am elected to chair the general meeting; and Teodor Teigen is elected to cosign the minutes. We have advanced votings in, and on that agenda item, we have 100% of the votes in favor with 194,246,792 votes in favor; no votes Against; and 111,403 votes abstaining. In total, that represents 100% approval, and that item is therefore approved. If there are any comments or questions, I would pause for a short while to allow shareholders listening in to raise questions.

[Operator Instructions]

If that is not the case, I would continue with agenda Item 2, approval of the notice and agenda. The proposal is to approve the Annual General Meeting notice and agenda. We have 100% voting in favor with some rounding differences of votes voting abstain; 80,287 votes have abstained; the remaining votes have voted in favor, and therefore, this agenda item is approved by the Annual General Meeting. I would likewise, again, wait a couple of seconds to allow for questions to come in. I'm just seeing a question coming in. Someone asking, "Is there no sound?" I hope everyone can hear us properly. We are just pausing at the moment to allow for questions on agenda item two, if that person has joined slightly delayed. And on that basis, I would continue with agenda item three. Approval of the financial year 2020 annual accounts and directors' report of the company and the group, including the allocation of the financial year 2020 results and consideration of the statement of corporate governance. The annual financial statements, the directors' report the auditor's opinion and the statement on corporate governance are all published on the company's website. The Board has proposed that the general meeting passes the following resolutions: firstly, the annual accounts and the directors' report for 2020 are approved. Furthermore, the results of the financial year 2020 is allocated to retain losses. And thirdly, no dividend is declared for the financial year 2020. On that agenda item, we again have 100% voting in favor with only 581, and this is obviously compared to the overall vote number that, nevertheless, adds up to 100% in favor, 581 votes against; and 104,827 votes abstaining. So overall, we have rounded 100% approval of that item. And on that basis, I would again pause to allow for questions. If there are no questions on this item, I would like to proceed to item number four, approval of the remuneration of the company's auditor, references made to note 9 in the annual financial statements. In 2020, the remuneration of the company's auditor for the statutory audit of the company shall be paid in accordance with the invoice, and the Board proposes that the general meeting passes the following resolution: the auditor's remuneration shall be paid in accordance with invoice. On agenda item four, we again have 100% approval with only a small number voting against and abstain. So overall, we have 100% approval, 194,252,787 votes for that resolution. On that basis, that resolution is passed. Please advise if there are any questions on that agenda item. I would pause again. There are no questions. I would continue with agenda Item 5, which is the approval of the statement regarding remuneration of the executive management. The statement of the Board regarding remuneration for executive management is enclosed to as Appendix 2 to the Annual General Meeting notice. The Board proposes that the general meeting passes the following resolution: the general meeting endorses the statement of the Board regarding remuneration for executive management. On this agenda item, we have 98.5% voting for, which is 191,316,315 votes in favor. We have 2,893,803 votes against, which is 1.5%. And we have 148,077 votes voting abstain. On that basis, that resolution is passed, and I would -- with 98.5% of the votes voting in favor. And I would like to pause again to allow for questions. That does not seem to be the case. And I would like to continue with agenda item six, election of members to the Board. The Board proposes that the general meeting passes the following resolution: the current board has reelected for a period of 2 years from the date of this general meeting. The Board will then consist of the following members: Mr. Ulf Holländer, as the Chairman, Dr. Axel Octavio Schroeder as Board member; Darren Maupin as Board member; Ellen Merete Hanetho, as Board member; and Laura Carballo as Board member. On that agenda item, we have the following voting results: Firstly, on Ulf Holländer, we have 99.4% voting in favor and 0.6% voting Against. Ulf Holländer's reelection is thereby approved by the general meeting; Dr. Axel Schroeder we have 100% voting in favor; Darren Maupin, we have 100% voting in favor; Ellen Hanetho we have 100% in favor; and Laura Carballo, we also have 100% voting in favor. On that basis, the Board is reelected in the previous composition, and I would pause again for questions on that agenda item. That does not seem to be the case, and therefore, I would like to continue with the next agenda item, election of Board observer. The Board proposes that the general meeting passes the following resolution: Paul Gough is reelected as observer to the Board for a period of 2 years from the date of this general meeting. On this agenda item, we have 100% of total votes voting in favor. And on that basis, the reelection of Paul Gough as an observer to the Board is approved by the Annual General Meeting, and I would pause again to allow for questions. It doesn't seem the case, and I would like to continue with agenda item eight, determination of the Board remuneration for the financial year 2021. It is proposed that the general meeting passes the following resolution: each member of the Board shall receive NOK 200,000 in remuneration for the financial year 2021. On that agenda item, we have 100% approval. And therefore, this agenda item is passed and approved by the AGM. Again, I would stand still for a short while to allow for questions. That does not seem to be the case. And therefore, I would like to continue with agenda item nine, approval of the authority to increase the company's share capital. The Board believes that it is in the best interest of the company that the Board is granted authorization to increase the company's share capital in line with the proposed authority. The Board, therefore, proposes that the general meeting passes the various solutions that -- which were also set out in the notice and are shown on the web. I will not read them out in detail unless there are any questions on this very aspect, but instead, would like to continue with the voting on that very item. We have 98.1% of the votes voting in favor of this agenda item, 1.9% of the votes voting against that item; and on the basis of those casted votes, that agenda item is approved by the general meeting. I would pause here again to allow for questions on this aspect.

There is a question through the web by Martin [ Wengström], which I would like to read out and then answer. Martin [ Wengström ] asks, it is usual to ask for 10%. Why 25%? Obviously, different businesses and different market dynamics require different thresholds. We have, as MPC Container Ships in the past, always opted for a slightly higher threshold than in the past or then the 10% that Martin [ Wengström ] has suggested, this is in line with the company's strategy and also dynamic market environment to be able to address opportunities in the market if those opportunities arise. In the past, it has always been practiced by the Board to be very clear and very shareholder-friendly in the way any equity raises have been conducted, not least, the equity raise that took place last year. We're all shareholders, we're obviously treated equal. That is a very key principle of the company and the Board and the management. And therefore, we have opted -- or the Board has opted for proposing 25% which, as I said, also received majority approval by the shareholders represented on this AGM with 98.1% on the 25% basis. Happy to answer further questions or follow-up questions from Martin [ Wengström ] or others, and I would pause again to allow for a follow-up question if there is any. There does not seem to be a follow-up question. Obviously, feel free to raise that question also later on if more questions arise. We will not limit the question -- the ability to raise questions through the respective agenda item. Sorry, there's another question coming in. There's a question by [ Ravi Mays ] from Brussels, and he asked what is the primary goal of the capital raise, buying of vessels on second-hand market? There is no -- this is just an authority that is being asked. So that does not necessarily mean that this capital raise will be executed. So it's barely an existing authority for the Board. And there is no equity raise planned as yet. Otherwise, that would have been proposed and communicated, obviously, to the market and shareholders. So this is barely an authority to answer the question of [ Ravi Mays ] from Brussels. We would continue if there are more questions on that very subject, please feel free to submit them. We will then get back to that topic, obviously, and answer any questions that might come up. But I would now move on with the next agenda item, being item number ten, approval of authority to take up convertible loans. Sorry, there's another question. So from [ Reinhard Matthews ] comes the questions. Why don't we use convertible bonds? This is probably something I will answer after we have covered this agenda item number ten, which exactly addresses the convertible side of things. I will, as a starter, read out the agenda item and the voting and then reply to the question raised just now on the convertibles. The Board believes that it's in the best interest of the company that the Board has granted with authority to take up convertible loans or bonds. And therefore, the Board proposes that the general meeting passes the following resolution, and that is set out in the notice, as well as visible on the web to be authorized, basically, pursuant to the Public Limited Liability Companies Act as set out in the notice and on the web. If there is interest, I'm happy to read that out if there is a question on that very aspect.

I would like to then go on the voting before I answer the question that has been raised on that subject. On that subject, we have 98% of the votes of this AGM voting in favor -- and for this subject; and 2% of the votes voting against. So we have an approval for the authority to take up convertible loans or bonds. There is a respective approval in place on that basis, and now I would like to jump back to the question of [ Reinhard Matthews ] who raised the question, why you don't use convertible bonds. Obviously, this very aspect of asking for an approval provides for the flexibility to do so. For the time being, the ultimate goal of the company is, obviously, also to delever to some extent. There are various ways possible to do so. Of course, both the container markets, the earnings capacity of the company, as well as the credit market provide for a lot of opportunities to reorganize the balance sheet. And the convertible bond could be an instrument to opt for. However, it is not yet planned, but the authority would obviously address that and provides the board with the flexibility to also go that path if that seemed to be in the best interest of all shareholders. Are there any further questions on agenda item ten? That does not seem to be the case. And therefore, I would like to move on to the next agenda item, approval of authority to acquire own shares. The Board believes that it's in the best interest of the company that the Board has granted such an authorization to acquire shares in the company, i.e., own shares. And the exact proposal on that agenda item has been set out in the notice and can also be read here on the web. We have 100% of the votes voting in favor. We have some, let's say, smaller votes against and in abstain, we have 61,144 votes against and 51,140 votes abstaining from this agenda item. However, overall, it's still 100% approval of this agenda item. And therefore, this agenda item is approved by the AGM. I would again pause here for questions. There seems to be no question on that agenda item. I would, therefore, jump to the next agenda item, which is item number 12, reverse share split in order to facilitate orderly trading and pricing of the company shares. The Board proposes to at least be granted the authority to implement a reverse share split in the ratio of 1:10 so that 10 shares in the company are consolidated to 1 share. It is -- that is basically in line with an authority that has been asked for and granted by the general meeting in the past. And it is proposed that the shareholders with a number of shares that cannot be divided by 10 will have their number of shares rounded up to the closest whole number free of charge. So there is a mechanism in place, as you can see from the web, from the presentation that is shown. And we -- and that is being the proposal by the Board has also set out in detail in the notice to the Annual General Meeting. We have 99.6% of the votes voting in favor of this agenda item with 0.4% voting against. Therefore, this agenda item is approved by the AGM, and I would again pause for shareholders to raise questions if there are any on this agenda item. There does not seem to be any question on that agenda item. And then I would like to move to the last item on the agenda, which is the resolution to amend the notice period for extraordinary general meetings according to the Public Limited Liability Companies Act, the general meeting may permit with effect until the next annual general meeting, that the notice period for extraordinary general meetings is shortened to 2 weeks if shareholders are allowed to vote electronically at the general meeting in accordance with paragraph 5 to 8 of the Public -- a of the Public limited Liability Companies Act. The Board believes that this is practical and in the best interest of the company that the notice period for any Extraordinary General Meeting to be held up until the next year's Annual General meeting is reduced from 3 to 2 weeks. And therefore, the Board proposes to pass the resolution as set out on the notice and also shown on the web. I will now read out the votings. We have, in total, rounded again, 100% of the votes in favor with 42,553 votes against and 106,422 voting abstain, but that is on a rounded basis, still 100% of the votes in favor of that agenda item. And therefore, this item is also approved. And I would pause here for a while in order to allow for further questions, obviously, also on other agenda items before I would like to conclude on the official agenda and voting items for this AGM, and then provide a short update on the market. There seems to be no further questions on the agenda, and I would like to, therefore, conclude with all agenda items 1 to 13 being approved. In line with what I said -- oh sorry, there's 1 further question from [ Reinhard Matthews ]. He is raising the question, what is the actual value of your vessels' portfolio? Well, that is obviously a good question because the market is developing very dynamically, therefore, nailing down the actual value of the fleet can follow different valuation, let's say, methodologies. If you look at, for example, vessels value as one source of daily available vessel valuations, however, this is a valuation that encompasses a charter-free fleet, which we obviously don't have. But there, the latest vessels value, I think, earlier this week, was around 875 or 880 million, I believe. But this is obviously a moving target. The market continues to go up. Every charter that we fix is basically adding EBITDA and cash flow certainty, and therefore, adding value. I will get to that in a bit more detail on the valuation aspects when I run through a market update and what we currently see in terms of the dynamics around asset values and charter values. Having said that, there's a follow-up question from [ Reinhard Matthews ] on that very aspect, who ask who -- probably what is the actual NAV of the company. Obviously, the NAV of the company as well is a moving target, and I think everyone has its own read on the NAV. And I think especially the market dynamics that I've just explained, in particular, the increasing charter coverage that we are currently executing on based on our charter strategy. And again, I will get to that when we run through the presentation. But the actual NAV is moving by the day in line with the charter coverage that we are able to secure on a daily basis. The NAV, if you look at the vessels value, for example, which again does not factor in any charters, would be somewhere between $640 million, but this is obviously a snapshot. And again, vessels value does not factor in any charter values that we certainly have in our portfolio. On that note, again, there's the opportunity to raise more questions also when we run through the presentation in more detail in terms of the market update and financial year 2020 review and the short outlook. So I would now conclude on the official part, again, with agenda items 1 to 13 being approved as just discussed. And I would now like to continue with a market update. Of course, questions are welcome at any time. Let me start off with a short overview of -- and that is in line with information that we have disclosed in the past also on our website, where we have, on a very frequent basis this year already uploaded charter fixtures and also in line with the guidance that we have provided to the market, basically an overview of fixed operating days and consequently, revenues for 2021. On this chart, you can see the respectively fixed operating days for the consolidated vessels of our fleet, which is 56 -- 58 vessels, sorry, based on the balance sheet date, and 8 vessels owned in a JV. But this is just the consolidated vessels, and we have fixed around 81% of the days. This is obviously moving by every fixture that we conclude. I'll get to that in a minute, but that represents around $193 million of revenues being fixed for this year and roughly $88 million of revenues being fixed for 2022. And that you can see in the comment box where we have also illustrated the respective time charter equivalent rate for 2021 and 2022. Just as an indicator or reference, the current spot charter rate for the MPCC vessel basket would be around $21,500 per day according to Clarksons, so well above the currently fixed rates, which illustrates the improving kind of TCE environment in which we currently operate, and that we are, as we fix ships, continuously increasing the secured revenues and also the blended secured time charter equivalent fixed. At the bottom of this slide, you can see the indicative upcoming charter renewals. Again, this is a slide that we have previously communicated by our website. You can see that there's -- 25 fixtures have already been done this year, of which 18 have been done for -- that's the dark gray part of the column, has been done for vessels smaller than 2,000 TEU and only 7 for vessels above 2,000 TEU. We will have more also of the slightly larger vessels being fixed in the upcoming 1 or 2 quarters. And the average time charter equivalent that has been fixed on the 25 vessels is $16,650 an per day and the average contract length is 60 months, and that is increasing, basically, from fixture to fixture, but I'll get to the charter duration later on. So that gives you an idea of fixed operating days and indicative upcoming charters. Now let me go into the -- some highlights on the market on Slide 22. You can see market dashboard with the first 4 line items, freight rates, charter rates, idle fleet and average charter period being more momentum indicators, showing the different developments between January 2017 and April 2021 in terms of how the respective indicators and figures have evolved. And it is worth highlighting that the market momentum is very strong and continues to be very strong in the container sector. And at the same time, and I'll get to that in a minute, we also have very favorable midterm market fundamentals. When looking at the 4 momentum indicators that I mentioned, the first 4 line items, you can see that freight rates have gone up significantly over the last couple of years. And today, at a very high level due to market disruptions. For example, the recent events in the Suez Canal, also strikes on, for example, the recent event in the Suez Canal also strikes on, for example, the port of L.A. Long Beach and others add to this in terms of disruption in the market in addition to the significantly increased volumes that we have seen post COVID. So on the back of that, freight rates have really rallied and is significantly high. Same applies to charter rates. The charter rate index, the CapEx is at an all-time high at the very moment, whilst the idle -- number of idle vessels is below 1%, which is also, in historical terms very, very low. And I think the charter rate, in particular, has to be seen in conjunction with the average charter periods that have been secured and can be secured in the market. And this is now all basically market data. So the average charter period, 4 vessels between 1 and 5,000 TEU have been around 20 months, and that number is continuously increasing, and that is also a 10 year high. Now looking at some of the fundamentals, order book to fleet, and there, we have differentiated between the overall order book, as well as the order book of vessels below 6,000 TEU, which is Intra-Regional vessels, basically in those markets where we, as MPC Container Ships, operates our fleet. And as you can see, there has recently been a -- quite a step-up in order book to fleet ratio from 10.6% to 15%. Particularly in the last 6 months, we have seen a significant number of vessel orders, mainly in the very large sizes, above 15,000 TEU. And their order book remains very low and also in historic terms, especially for smaller tonnage, which is very encouraging. And then we -- the final 2 line items show the supply growth forecast and very much relevant is obviously the April 2021 forecast, and there is an excess demand expected for this year in an already very tight operating environment. Now let me jump to the next slide on market where we have consolidated kind of perspective on the, let's say, freight and liner market as well as charter rates and secondhand values. It's worth noting on the top left, which is a reflection of what I said earlier. We have seen a slight dip in freight rates earlier this year, but only by a margin, and freight rates are still at a very, very high level. Liner profitability is on a multiyear high as a result of solid volumes and very strong freight rates and liner operators like Maersk and OOCL or others have continuously increased their guidance over the last couple of weeks. And overall, also volumes on a very solid high level. Sorry, just on the lower part of this chart, where we have compared charter rates and secondhand values for 15-year-old vessels. On the example of a 2,800 TEU containership, what is -- what can be noted is the fact that charter rates have increased way more than asset value. So asset values are lagging behind, which is no surprise and fairly common in the shipping market. I think the interesting part is that last time we saw rates of that level, we have seen asset prices that were significantly higher than we see -- than what we see today in this index. And another interesting part is that these rates, you can actually lock in for a prolonged period of 2 up to 3 years at this very moment, suggesting also further support for asset values going forward. Now in terms of short-term dynamics, again, I think the CapEx on the top left, we touched on that. Charter rate development on the top right shows kind of the bend in the curve last year, the disruption due to covert and the uncertainties, but now they're really in light of significantly high volumes, container volumes as well as freight rates and consequently, charter rates. And again, we are at an all-time high in terms of the index. At the bottom left, you can see the idle statistics at the very low point. 0.8% of the global fleet is idle, which again is basically a 0 number. If you look at the kind of certain vessels being out of service for class renewals or others. And if you then look on the right-hand -- bottom right, you can see S&P deals and 50-year-old secondhand prices increasing significantly as well as, obviously, the activity, which is the light blue columns in the background, which shows the activity and the number of deals and then at the same time, the secondhand prices, which are obviously strongly supported by the increasing charter rates. On that note, charter rights and asset prices, I think it's worth also looking forward a bit and at the dynamics. The most recent dynamics year-to-date in the charter market, time charter rate momentum in the Intra-Regional vessel sizes, 1,000 to 5,000 TEU at the top left, and this is a candlestick illustration, which shows the increase of rates from the beginning of the month until the end of the month. It shows that there have been a constant increase in momentum since July, August last year, and in particular, this year, we have seen very strong development of rates. That went hand-in-hand with what you can see at the top right, increased average periods and smaller redelivery spreads, so the window in which vessel could be redelivered from the charter. The interesting bit is, obviously, that increasing charter rates and longer periods go hand-in-hand, reflecting a tightness of the market and the ability for container owners, containership owners, like ourselves, to be able to lock in not just high rates but also at a very much prolonged period compared to the previous 5 years. And that in itself does not just add cash flow visibility and allow us to lock in these cash flows, it also provides for a tighter market going forward, which we have illustrated at the bottom left. Where we looked at vessel availability going forward, on the basis of the periods that are being fixed. So every vessel that is being fixed now is basically out of the market, on average, for 20 months. That means the vessel availability going forward is very limited, and that's in a market environment where we also have very limited supply growth, as I've illustrated in one of the earlier slides.

Then there's just a question coming in through the web from [ Reinhard Matthews ], who has asked, within your portfolio, are there any vessels which are relatively old, where it is an option to sell in the rising secondhand market? That question, I would like to answer as follows. Of course, there is and we are always actively looking at our portfolio. And we have sold a few smaller units end of last year and have actually bought slightly larger units as well. So we are constantly trying to optimize our vessel portfolio. In today's market, vessel age isn't necessarily the determining factor because you can basically -- and that's to the point of secondhand values versus charter rates. You can today conclude charters for 2 up to 3 years for vessels in our size bracket, and you can basically secure a significant EBITDA and value. Having said that, just an example, 2,800 TEU vessel, which has a scrap value of around $4.5 million to $5 million. You can lock in 2 or 3 charter contract, which contributes another $16 million to $18 million in EBITDA. If you add those numbers up, you arrive at somewhere between 20 and 22 million in secured cash flow. And that vessel is then, at the end of that period, still 17, 18 years of age. So to answer your question, you will not be able to get that paid in the S&P market today. So by concluding charters on that basis, you can basically secure a significant cash flow, which goes beyond the potential proceeds from sale in the market. Having said that, we are obviously selectively considering potential sales and would not rule out to sell ships if the return is attractive, especially comparing it with the opportunity to charter out vessels. But at the moment, the charter market provides significant opportunity and upside that continue to operate the vessels is the preferred route of action. However, that can obviously change as the market is very dynamic at the very moment. There's another question from [ Miguel Carazzo ], who asks whether the presentation will be available on the website. It is not planned to have the full presentation available on the website. But we have most of that information on the website anyway. So if [ Miguel Carazzo ], if you would like to kind of approach us through the Investor Relations or info at e-mail address. We can guide you through the web if you haven't found the information because this is all information that has been disclosed in the past as far as the market information is concerned.

On that note, let me jump into kind of the fundamentals of the market before we conclude with more company specifics. On slide -- on the next slide here, you can see demand and supply on the top left and top right in terms of the overall market and the -- specifically, the Intra-Regional, the relevant market for our fleet. You can see that there has obviously been in the past, in particular, in 2020, in both markets, a significant gap between supply and demand growth, which has led to the disruption. However, most of that was attributable to the first half of last year, where we have experienced lockdowns and basically a severe disruption in the whole supply chain, which has led to a bend in demand growth. Most recently, especially since the second half of this year -- of last year, plus the beginning of this year, we have seen very strong demand growth, which according to MSI Clarksons and other research houses, and we share that view, translates into a significant demand growth expected for this year as you can see on the top left of around 6% to 7% on the overall market in terms of demand growth and 7% to 8% of growth in Intra-Regional markets, which compares with respective supply growth, which is the blue lines on the top left and top right. So we expect an excess demand for the overall market, hence, continued strengthening and tightening of the market in an already very tight market in terms of supply and demand throughout 2021 and 2022. The order book to fleet illustrated at the bottom, I think I touched on that already. So if there are any further questions, please let me know. But that gives you an idea of the order book to fleet development and in particular, on the bottom right, how the order book, by size, is actually composed and how that has changed since October 2020. Since that point in time, we have actually seen quite a number of new orders being placed. Now let me run through some key events. And obviously, this is basically yesterday's news. So I will keep it swift just in case of question on those aspects, I will -- I'm happy to elaborate in a bit more detail. But obviously, COVID has affected our performance in the financial year last year quite dramatically with its development from a kind of more regional virus to a global pandemic. We have, on the corporate side, obviously, had to tackle that with various initiatives, recapitalization of the company and also operational challenges, which I think we -- thanks to our crew and our onshore staff, we have been able to weather that from an operational perspective pretty well. At the same time, we have further worked on, obviously, transparency in our sustainability reporting, which has been released in connection with our annual report, and you can all visit that on our website. In terms of operationally, as I mentioned before, we have optimized the portfolio by selling a few vessels and buying a few vessels, and we have had a very intense year of fixing activity last year due to a very short period that we had to accept in a turbulent market environment and going forward. And again, we are obviously putting a continuous focus on OpEx improvements, which we have, even in a COVID market environment, been able to achieve last year. On that note, let me wrap up with the last few slides, and this graph on the left basically shows the market cap and share price development of the company, the share price being the gray line in different periods, '19, '20 and '21 year-to-date. As you can see, we have basically seen a very challenging 2020 by way of share performance in light of the challenges out there as a result of COVID. So 2019 was basically characterized by a trade war and some demand disruptions on that part. 2020 has seen a very volatile market first half year; very challenging second half year, basically consolidation of our efforts now for 2021, and that is also reflected by the guidance that we have provided for the full year. We see a highly favorable outlook in light of the various developments in terms of charter rate development periods that we are able to log in and obviously, in particular, the supply side outlook. On the group financials, I will skip that one. If there are any questions on that. Again, we have had our earnings call in detail and went through the financials, so if there are any questions on that very aspect, please feel free to raise them. But I would like to then conclude with a short kind of market, short-term, midterm, long-term assessment, as well as our company profile and the key premises for our outlook. First of all, as0 illustrated and discussed during this presentation, we see very, very strong market fundamentals, historically strong container market. Given kind of our charter book, we are very well positioned to benefit from this upswing, and we have already done so and have been able to lock in significant EBITDA on good rates and strong periods. And we are still kind of able to do so in what we expect will be an exciting year 2021 with continuously strong charter rates and period that we can achieve. In the midterm, as I mentioned also throughout the presentation, we see a very favorable rebalancing of supply and demand, especially on the supply side. If -- I mean, we know what will come into the market in terms of deliveries from the shipyard for the next 18 to 24 months. If you were to order a newbuild today, you would hardly get slots in 2023. So we have a very good visibility. And in particular, in our segment, there's very limited newbuilding ordering activity. In the long term, obviously, a very key aspect that will shape the industry or affect the industry landscape is the general energy transition and obviously, decarbonization efforts of the overall industry and the global economy as such. We believe this is a very relevant trade that will affect the industry. And as we progress throughout 2021, I think we will see more and more or clearer on how that also translates into regulations, which are lined up and still need to be articulated and very detailed by the IMO and other governing bodies. We believe this will have a very relevant impact on the overall industry landscape. In terms of our corporate profile and how we kind of see ourselves and move forward, we are the largest container tonnage provider for Intra-Regional trade. We have, as a key ingredient, set ourselves a very prudent capital allocation principles. We have allocated the capital in a time in the market where we have seen very low asset values, which are increasing now. So any addition to the fleet needs to be seen in conjunction with the risk and return profile as we have done in the past. Our focus is on a low financial leverage. We believe this is the way to go about it in the current market, especially given our significant operational leverage due to our cash breakeven situation and the existing charter book. And obviously, we look at a very strong cash generation capacity, as I've alluded to earlier, with a cash breakeven of around $8,000 to $8,500 thousand dollars per day in vessel and current spot markets of around $21,000 for our basket. In terms of portfolio composition, looking at our kind of risk profile, we see ourselves also, compared to peers, as having very low residual value risk. And in shifting as an owner of assets, it's all about managing residual value risk and optimizing your profitability on that basis. We believe we are very well positioned to address that and obviously, to maintain reliable operations, which, we are still in a COVID environment as far as the operation is concerned. And therefore, a very strong focus is on our fleet, on our crew on board and maintaining a very solid operations while protecting and safeguarding the various stakeholders, in particular, also our crews. And in the overall picture of the energy transition, we believe that with our age profile, on average, roughly 13.5 years old, is the fleet, we feel that we are very well positioned in that age bracket to take the right steps and the decisions in light of the upcoming energy transition. Which, in our view, will certainly take a prolonged time in light of the challenges that go hand-in-hand with that. But we believe we are very well positioned on that basis. And then to wrap up, going forward, we see 3 aspects as very relevant. Firstly, we want to maintain our discipline when it comes to capital allocation decisions. Financial leverage delevering is a very key item to seek to optimize the balance sheet and the portfolio in a market like this by way of delevering, potentially optimizing the portfolio is definitely very relevant aspect that we see going forward. And obviously, we see ourselves as being fairly resilient to volatility in the market that might come along the way, especially on the back of the existing charter coverage. And finally, as I alluded to before, we feel well positioned with our age bracket and a low leverage to go into the next 5 to 10 years in the container space. And on that basis, I would like to conclude, thank everyone for obviously their interest and open the floor for questions to the extent there are any further questions on the various items that we've just discussed.

[Operator Instructions] There are no questions coming through on the line, sir.

Thank you. I can also see no further questions -- oh, sorry, there are further questions. Are there? No, I don't think so. We'll wait for another minute or so to see whether there are questions. I -- sorry, there is another question by [ Ravi Mays ] He said, he referred to an interview by the analyst, J Mintzmyer with Mr. Baack, which is myself, in February, there was talk of considering listing in the U.S. before the end of 2021. Is there already a firm opinion on this on the part of the Executive Board or is there already communicable progress? The question in the discussion with J Mintzmyer and since I was present in that discussion, I can give some color on that, was whether that was a potential path. And of course, looking at the options in the capital market is always a potential path to consider that. And we have considered that in the past. To answer your question, there is no there's no decision that, that would be the path we take as yet on the Board, but it's certainly an option. But at this point in time, there's nothing being lined up or lined up or communicable on that very aspect. There is another question coming in through the web by [indiscernible] who asked, do you have a time frame for when you will be able to pay dividends. That basically goes back to the question of capital allocation. And of course, we are currently in a market environment where we can lock in very significant and strong cash flows. So returning capital to investors is a key item on the discussions of the Board and obviously also for the senior management. And we have kind of a discussion on that in the second half of this year once we have full visibility on 2021 earnings. And in all likelihood, also pretty good visibility on 2022 earnings. And when we will have also addressed some of the strategic aspects when it comes to optimizing the balance sheet. But that is something that is obviously on the cards to consider returning capital to investors. Another question comes in from [indiscernible] from Stockholm regarding the reverse split. This is very often negative for the stock price. What is your thought on that? The thought on that is not necessarily to execute that reverse share split immediately. We have obtained a resolution -- sorry, an authority on that already in the previous EGM end of last year. It's a matter of flexibility and being sure that one does not trade at a, let's call it, penny stock, because that also has negative consequences. So we would very carefully consider to execute that but it also has a lot of benefits when looking at a potential of not being a penny stock. However, this is an authority, and we would very carefully weigh up the pros and cons when it comes to the execution of the share split. Another question from [ Reinhard Matthews ]. Is your share, at the moment, undervalued? And would you use the share buyback program at the moment? I think I did spend some time on this earlier, where I said, we are currently in a market where every charter that we fix increases the NAV. So you're basically chasing your own tail in that respect, which in turn means that the share price is moving and the NAV is moving. So the share buyback program is a possible instrument to return capital to investors in case the share is undervalued. I think at the moment, there is still quite a dynamic development both in terms of the development of the NAV in light of the charter market developments and our ability to charter out vessels, and at the same time, the development of the stock price. So it is an instrument that could be used, but at the moment, I think the development of the stock price reflects also the development of the NAV, which is still dynamic, given the ability to lock in these charter rates. There's another question by [indiscernible]. Where do you see the range of the charter periods for your smaller ships, sub 1,500 to you going forward? We have in fact, been able to fix 1,300 TEUs in the pool in which we operate together with 1 other owner for up to 3 years already. This is obviously nothing that can be done for every single position at this stage. But the trend is clearly moving towards longer rates at -- sorry, longer periods at interesting rates. So we are basically also seeing periods of up to 3 years for vessels sub 1,500. Having said that, I would say the range is somewhere between 12, maybe more 18 months and up to 3 years. But that is not possible on every single fixture. It really depends also on the region where the vessel is currently operating. We have, for example, seen 3-year fixtures for vessels sub 1,500 TEU in the Americas and the Caribs, for example. That is the question of [indiscernible]. I will wait for a bit because I'm seeing that there have been a few questions coming in. So let's hang in there for a moment and see whether there are further questions or some follow-up questions from participants.

[Operator Instructions]

There is 1 question by [ Ray Wenner ]. He asked any thoughts on future takeover bids. I'm not particularly sure what [ Ray Wenner ] is referring to here. There is nothing lined up nor anything has been addressed, so I'm not aware of anything in that respect. So maybe you can qualify that somewhat. So I understand where you're coming from, but there's certainly nothing I'm aware of or that has been brought to the company's attention.

No questions coming through on the line.

Let's wait for 1 more minute before we conclude and close to allow people to make further questions. All right. That doesn't seem to be the case. In this continuous unusual time, I thank everyone for interest and for participating, obviously and for contributing in this AGM. All agenda items have been approved with the significant majority. And I would like to express my hope that we return to normality soon, and that the next AGM might be held in a slightly different setting. And on that note, I would like to wish everyone good health and a pleasant day, and thanks for your interest. And thanks also to you, operator.

Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect. Speakers, please stay on the line.