MPC Container Ships ASA ($MPCC)

Good afternoon, and good morning, everyone. This is Constantin Bark, CEO of MPC Container Ships. I'm joined today by our CFO and Co-CEO, Morris Fuhmann. Thank you for taking the time to join our first quarter 2026 earnings call. Earlier today, we published our financial results for the first quarter ending March 31, 2026. The stock exchange announcement and the accompanying presentation are available in the Investor Relations section of our website. Before we begin, please note that today's discussion includes forward-looking statements and indicative figures. Actual results may differ materially due to the risks and uncertainties inherent in our business. Before turning to the presentation, I would like to briefly reflect on the first quarter of 2026. We are pleased to report a solid quarter in what continues to be an unusually complex environment. The opening months of 2026 have been shaped by escalating geopolitical tensions, most notably the closure of the Strait of Hormuz following the Iran conflict, rising energy prices and continued uncertainty around global trade policy. Against this backdrop, our business performed resiliently with high vessel utilization, solid earnings, generating good profits and continued strong chartering activity. On the commercial side, we concluded a number of attractive forward charter fixtures with top liner companies, further extending our coverage and building on our USD 2 billion revenue backlog. On the fleet side, we agreed the sale of a ship, which Morris will allude to in more detail and made good progress across our newbuilding program, both consistent with our strategy of high-grading the fleet while securing long-term employment on modern tonnage. On the balance sheet, we closed a revised revolving credit facility with extended maturity through December 2030, further enhancing our financial flexibility and investment capacity. We have deliberately maintained a robust and conservatively leveraged balance sheet, not as a constraint, but as a competitive advantage in volatile markets. This approach continues to support shareholder returns. We are announcing our 17th consecutive recurring dividend of USD 0.04 per share for Q1 2026, representing 50% of adjusted net profit. On the back of our high contract coverage and the progress made on vessel sales, we are raising our full year EBITDA guidance to USD 260 million to USD 280 million, while revenue guidance remains unchanged at USD 450 million to USD 460 million. One broader observation before I hand over. Two structural shifts are converging that will increasingly define competitive positioning in this industry. First, persistent disruption and unpredictability are driving a fundamental reorganization of global trade. companies diversifying their value chains. Liners are building more slack into their networks and regional trades are accelerating as a result. More flexible, smaller tonnage is the natural beneficiary of this shift as trade patterns become less concentrated and more distributed. And second, sharply rising energy costs make modern fuel-efficient tonnage a direct margin contributor for our customers, not just a compliance requirement. At current fuel price levels, the daily cost gap between a modern eco-design vessel and an older ship runs into thousands of dollars, and that gap falls on the liners bottom line. With our fleet renewal strategy, our modern and growing eco-design portfolio and our long-lasting relationships with the world's leading liner companies, we believe MPCC is very well positioned to benefit from both of these trends. And with that said, I would like to hand over to Moritz.

Good morning and good afternoon also from my side, and welcome to MPCC's First Quarter 2026 Earnings Call. Thank you for your -- for taking the time today to join us. We will walk through the key developments of this first quarter, our view on the container market and last but not least, the outlook for the remainder of 2026 and beyond. Today's agenda is, as usual, structured along three main blocks. First, we will run through the highlights of the first quarter, both operational and financially. Second, we will share our latest view on the container market and the structural drivers we see. And thirdly, we will close with our company outlook. Q1 '26 was another quarter of solid execution and continued momentum on all our key initiatives. Operational and commercial momentum, forward fixing activity continued at a very strong pace. As of today, we have effectively closed our 2026 book. We are 99% covered on open days, but we have also significantly extended visibility into the future, close to 70% of open days in '27 and 41% in '28 are already fixed. All recent fixtures have been concluded with the top 5 liner counterparties on attractive rate levels and also very importantly, meaningful durations, which speaks to MPCC's positioning as a preferred tonnage provider. In the feeder segment and asset values and charter rates remained firm during the quarter, supported by a tight tonnage supply, which we will come back to in the market section. Financially and capital structure, Q1 operating revenues came in at USD 119 million and adjusted EBITDA at $67 million, fully in line with our expectation and translating into a healthy net profit. In accordance with our distribution policy, the Board has declared a recurring quarterly dividend of $0.04 per share, corresponding to 50% of the adjusted net profit and marking our 18th consecutive recurring dividend payment. On the balance sheet side, we further improved flexibility by closing a revised and upsized revolving credit facility with Hammer Commercial Bank. And together with our cash position, this gives us a very strong liquidity profile to support both the newbuilding program and shareholder distributions as well as having the needed flexibility when it comes to accretive investment opportunities in the future. Some market context as well as the slightly revised guidance. Looking at the broader market backdrop, geopolitical shocks and rising oil prices have made volatility a structural feature of the container market. In that environment, obviously, fuel efficiency has become an increasingly important margin driver, and that is something our modernized fleet is well positioned to capture. And on the back of strong forward coverage and recent asset sales, we are raising our full year '26 EBITDA guidance range to $260 million to $280 million. Revenue guidance remains unchanged at $450 million to $460 million. Looking at subsequent events after the quarter end, we have forward fixed two further vessels at very attractive durations of close to -- or actually 2.5 years with top-tier liner operators. And we sold the vessel ASAlvar, which is a 2008-built 2000 TEU vessel for north of $22 million being subject to successful handover. This continues our strategy of high-grading our fleet. In short, another quarter of disciplined execution, extended forward visibility and a strengthened balance sheet. And with that overview, let me walk you through the financials in more detail on the next slide. Looking at the profit and loss, gross revenue amounted to, as mentioned before, $190 million, broadly in line with Q1 '25. The slight softening in revenue reflects mostly a smaller core fleet following our continued portfolio optimization, partially offset by stronger TCE levels on forward fixed levels. Adjusted EBITDA, $67 million, slightly above the $66 million we have reported in Q1 '25, which demonstrates the quality of our forward coverage, but also our continued cost discipline. Adjusted net profit was around $40 million, translating into an adjusted EPS of $0.09 per share. And the adjusted EPS translates into a dividend per share just declared by the Board of $0.04, again, consistent with our 50% payout policy. Operating cash flow was close to $70 million for this quarter, a very solid level of cash generation that supports both our newbuilding program and continued shareholder distributions, as I will show you in the cash flow bridge in a moment. From a balance sheet perspective, total assets stood at $1.5 billion, broadly unchanged relative to year-end '25. Net debt was reduced significantly to $108 million, down from $150 million at year-end. And roughly half of the level we reported a year ago. This obviously reflects our continued debt repayments and disciplined free cash flow deployment. Leverage ratio also improved to 30.7%, down from 33% at year-end and clearly demonstrating a conservative capital structure that we have implemented for the company. Operational KPIs, adjusted OpEx per day came in at $7,660 per day, while adjusted average TCE for our fleet was north of $25,000 per day, essentially stable on very high levels. And obviously, worthwhile to highlight is our very strong fleet utilization of more than 99%, reflecting on the quality of our fleet and our operational platform. All in all, another very strong quarter of cash generation and further balance sheet strengthening. And before turning to the cash flow bridge and the capital structure, let us share some more color on our recent chartering and S&P activity on the next slide. The container market remained highly supportive throughout the quarter with sustained strong demand, in particular, for feeder tonnage and an increasing number of forward fixtures. All of our recent fixtures were concluded with top 5 liner companies. The AS Kalotta has been fixed in the very beginning of Q1 for 2 years at $28,500 per day. And most recently, we have been able to fix AS Constantina and AS Patria at identical terms both at rates of $26,500 per day for more or less 2.5 years, which is definitely an uptick in terms of durations what we have seen recently, where we have been fixing similar vessels for 2 years. The fixtures underlining two key points. First, from our perspective, the depth of demand for our segment continues to enable us extending visibility at attractive rate levels. And secondly, charterers are increasingly willing to commit for longer periods, a trend we obviously very much welcome and actively pursue. Looking on the status of sold vessels. On the divestment side, we continue to high-grade the portfolio. All of the following three vessels are subject to successful handover in the second quarter of '26. The first one being the Ace Felicia, which we have actually sold already last summer, is being handed over very soon. And in addition, we will hand over soon the Ice Clementina, which we have already reported earlier. And then as mentioned before, AS Alva is our most recent sale also being delivered very soon. We have sold for 22 -- roughly $22.5 million. And these sales obviously reinforce our strategy to monetize all the tonnage at what we see as attractive levels and recycle the proceeds into a more modern and more efficient fleet that will significantly enhance the long-term value of the company. On the next slide, let me now walk you through the cash flow bridge for the quarter, which I think is a very illustrative summary of how we deploy capital. Operating cash flow, we started the quarter with a strong cash position and generated solid operating cash flow fully consistent with the EBITDA. And this is obviously the engine that funds everything else you see on the slide. Investing cash flow, approximately $71 million we have paid for yard installments in relation to our new builds, in particular, 3,700 TEUs and 4,500 TEU as well as the keel laying of our remaining 1,300 TEU fuel methanol unit that is being delivered later this year. In addition, we have invested around $7 million into the vessels that is currently trading on the water, which is primarily upgrades and regulatory items. When it comes to the financing cash flow, the picture reflects a deliberate balance sheet between deleveraging and shareholder return. We have prepaid roughly $32 million under a HCOP facility plus a voluntarily prepayment of roughly $4 million in relation to a Kasi facility. In addition, we drew under a predelivery loan in relation to our 1,300 TEU dual fuel new build. And finally, we have paid in Q1 MPCC's 17th consecutive recurring dividend. Net of all of this, the balance sheet remains very liquid, and our financial flexibility continues to expand. And let me take that point one step further on the next slide when we look at the capital structure of MPCC. This slide nicely ties together what we have been doing both on the asset side and the funding side and shows why our balance sheet is in such a strong position to support further growth of the company. We continue to execute on our fleet renewal program with three vessels sold for a combined $52 million in expected net sales proceeds. In April of this year, we successfully closed a revised revolving credit facility with HCOP, extending the maturity into late 2030 and providing an increased capacity, improving the balance sheet flexibility. On a pro forma basis, including undrawn capacity under the RCF, we look at a liquidity position of north of $500 million that is at our disposal, which is a significant firepower for future investment while maintaining a comfortable cash cushion. Beyond the liquidity we just talked about, the balance sheet remains conservatively structured with a high degree of flexibility. 30 vessels in our fleet are entirely debt-free with a fair market value of approximately $780 million. That is unencumbered value that we can deploy strategically, for example, to support additional newbuilds or opportunistic acquisitions. Our leverage ratio stands at close to 31%, clearly a conservative level for a company like MPCC. And we have reduced our debt cost by approximately 40% since 2022, which is also a direct result of our disciplined refinancing and diversification of our funding sources. In summary, we have a balance sheet that is built to be able to exercise when it comes to new interesting and accretive investment opportunities should they arise in the not-too-distant future as well as to absorb volatility when markets turn. And with that, I will hand over to Constantin, who will take you through our view on the market.

Thank you, Moritz. I would like to continue with the next agenda point, the market. From left to right, this slide shows, firstly, the charter rate development; secondly, the asset price development in terms of secondhand values and newbuilding prices; and thirdly, the forward availability of vessels. Going into 2026, the charter market has continued to perform very strongly. Charter rates have increased only slightly, but as we said before, they are starting from very strong levels. The low availability of tonnage and ongoing demand from charterers aided the continued geopolitical disruptions, which has kept rates at very attractive levels from a nonoperating owner perspective. Driven by this strong tonnage demand, asset prices for container vessels have also remained at very strong levels. Outside of the pandemic spike, secondhand prices are currently at the highest level since 2011, and major liner companies are still acquiring tonnage at these prices. When we look at the tonnage list with the 6 months going forward, there continues to be only very few ships available. The number has declined by approximately 30% compared to a year ago, which reflects the current market strength. This market strength is supported by several key disruptions at the moment, and I will turn to those on the next slide. Let me take a closer look at these disruptions. On paper, supply and demand have been diverging since 2023, and the market should be trending towards oversupply. In reality, however, rates have been increasing. And this slide goes a long way in explaining why. What we are observing is a series of distortions that taken together are quietly absorbing a significant share of global fleet capacity. On the demand side, the Red Sea diversions, which began in late 2023 are still in place. Every ship that reroutes around the Cape of -- good Hope sales longer, ties up tonnage for more days and inflates affected demand. The net effect is that average haul lengths are up roughly 12%. By now, that is a structural extension of the global trade lane, not a temporary detour. On the supply side, 2 forces are working in parallel. First, congestion. Pre-pandemic, congestion absorbed about 2.2% of global capacity. Between 2023 and 2026, that figure has averaged 5.3%, i.e., more than double the number. Second, slow steaming. With energy prices up sharply in 2026, carriers have throttled back fleet speeds, absorbing a further estimated 2% of effective capacity. Taking all of this together, we have what amounts to a roughly 19% delta and artificial demand boost and supply crunch simultaneously that the market is currently absorbing. The strategic response from carriers is accelerating. Vertical integration, buying terminals, locking in inland logistics, securing schedule reliability. The implications for counterparty quality and ownership relationships are clear. For us, the takeaway is clear. disruptions has become structural. And structurally, it is tightening the market. The question is no longer how long this will last, it is what will come on top of it. On the next slide, we look at the specific choke points that are currently active and those that could become a threat going forward. We have mapped the key maritime choke points that are currently active or represent a credible near-term risk and it's worth walking through each of them briefly. Starting with the Middle East, there's no comprehensive Iran deal in sight. And the strait of Holmulus remains de facto close on Iranian terms. Fragiseasefire holds, but both sides maintain incompatible red lines. In our assessment, a durable resolution that would allow a broad return to normal transits is not imminent. Moving to the Panama Canal. El Niño-driven low water levels are expected to persist into 2027, continuing to constrain daily transit capacity. Separately, the geopolitical friction between Panama in both the United States and China is likely to intensify, adding a second layer of risk. The practical effect is already visible. Spot transit prices are surging and waiting times for unbooked transits are increasing. And in East Asia, there's no signal of risk relaxation. Chinese concerns about any external interference in the region remains serious and publicly stated. The risk of a maritime blockade or quarantine around Taiwan is rising while U.S. strategic interest in the region has become less predictable. More imminently, intensified U.S. enforcement against the Romanian shadow fleet has the potential to directly disrupt China's oil supply with knock-on effects across regional trade flows. Taken together, these three hotspots illustrate that the disruptions currently supporting the charter market are not isolated events. They are geographically distributed and structurally persistent. This is the environment in which we are operating, and it underscores why contract coverage and balance sheet resilience matter so much right now. Despite all of this, we cannot disregard the supply side, and that is what the next slide addresses. The chart on this slide plots all major vessel size segments along 2 dimensions simultaneously. The order book to fleet ratio, i.e., how much new tonnage is on order relative to the existing fleet on the water and the share of the fleet already aged 20 years or older, which is a proxy for replacement urgency. The further right and lower segment sits, the older its fleet and the thinner its order book. That is where the structural opportunity lies, and that is precisely our segment because the order book set for delivery over the next years is still immense. -- close to 13 million TEU will hit the water by 2030. However, the order book remains heavily skewed towards the larger sizes. On the smaller sizes where most of the vintage fleet is active, the order book is not large enough to cover the replacement needs these older ships create. More than 1 in 4 units below 8,000 TEU is already 20 years of age or older, and that is today. These vessels were ordered in the early 2000s designed for higher speeds and anticipating permanently low fuel prices with little anticipation of the environmental standards that apply today, particularly in European waters. The order book-to-fleet ratios in the small segments remain remarkably contained, approximately 18% in the 1,000 TEU to 3,000 TEU range, 31% in the 3,000 to 6,000 TEU range and just 12% in the EUR 6,000 to EUR 8000 range. By contrast, the order book-to-fleet ratio is highest in the largest segment, where below 1% of the fleet is past 20 years of age. MBCC's strategy is clear, divesting older, less efficient vessels at attractive prices precisely when the cost disadvantage and reinvestment burden peak. And with 7 newbuildings in the pipeline and a EUR 2 billion plus order revenue backlog secured on charters, with several top liner companies, we are very well positioned. Our newbuild vessels are also designed to trade well beyond the initial charter period with low compliance costs, flexible deployment and overall efficiency, overall capacity growth. So where does that leave us in terms of market outlook? As is so often the case in shipping, it is all connected. There are 5 key forces shaping the market today. Middle East situation. While the closure of the straight of foremost is foremost an energy topic, a continued blockade would also have detrimental impacts on the global economy and by extension on world trade. For container shipping markets, the more pressing issue remains the question of if and when a return to the shorter route through the Red Sea will be possible. The behavior of the involved parties suggest no immediate incredible cease fire that would warrant a widespread reshuffling of liner services. A return during the summer peak season seems unlikely at this point, and we believe the observable disruptions will continue in the short term. Beyond the straight of foremus, there are 2 other choke points worth monitoring the Panama Canal, as I mentioned, the El Nino-driven low water levels, which are expected into 2027. as well as the geopolitical tensions between Panama and the United States and China. And in East Asia, as I mentioned previously, there is no signal of risk relaxation and the situation around Taiwan remains to be monitored very closely. The next point is macro economy. The IMF forecasts global GDP growth of just above 3% in 2026 with downside scenarios of 2.5% or 2% under adverse or severe conditions. Consumer sentiment has fallen to record lows, driven by energy prices, depleted household savings and elevated inflation expectations as well as volatile asset markets. This creates downside risk to trade volumes, particularly in main trades. Intra-regional trade resilience. Intra-regional demand is forecasted to grow at around 3.5% to 4% CAGR through 2030, slightly outpacing mainland trades. The largest market is intra-Asian and trade ex Asia into emerging markets remain key growth drivers, structurally favoring smaller to midsized vessels, which is exactly our fleet focus. Feeder modernization, 1/3 of the feeder fleet is 20 years older, while the order book-to-fleet ratio remains at a moderate 18%. At oil prices north of $100 per barrel, the daily fuel cost gap between a modern efficient vessel and a non-retrofitted 50-year-old vessel or older easily escalates to thousands of dollars per day, as I mentioned earlier. In addition, tightening regulatory requirements such as fuel, your maritime or EU ATS will only widen that margin over time. This is why we continue to modernize our fleet on behalf of MPCC. Energy price dynamics is another aspect to consider. Energy prices are up approximately 24% in 2026, the highest level since the start of the Ukraine war. Successive geopolitical shocks have made energy price volatility a permanent feature of the market. Fuel efficiency has become a direct margin driver and MPCC's eco-design fleet and retrofit program position us well on both the cost as well as the commercial side. In summary, to wrap up the market, uncertainty remains elevated. -- but the structural setup in our core segments is supportive. And with that, let me now turn to the company outlook section of our presentation. Let me start with our charter backlog. Our forward contract coverage has been further enhanced during the first quarter. As of today, we have secured approximately USD 2 billion in forward revenue backlog, translating into around USD 1.2 billion in projected EBITDA based on minimum contract periods and a conservative cost assumption. The contracted forward TCE stands at approximately $23,900 per day across the fixed book. Contract coverage stands at 99% for 2026, 69% for 2027 and 41% for 2028. These figures include 7 newbuildings under construction, all integrated into our forward employment profile as well as the 3 vessels sold subject to a successful handover in Q2 and Q3 of this year, respectively. To put this in context, since our Q4 earnings call, 2026 coverage has moved from 97% to 99% for '27 coverage from 58% to 69% and our forward revenue visibility for the next 2 years have never been stronger than they are today. On the right-hand side, the backlog development chart over the past 12 months illustrates the revenues consumed during the period and the additional backlog added arriving at the USD 2 billion I mentioned earlier. This development reflects the quality of our forward fixing strategy and the continued strong demand for tonnage. With that foundation in place, let us turn to our open positions on the next slide. The number of open positions for 2026 remains limited. This is a deliberate outcome of our forward fixing strategy. Based on minimum periods, we have 9 vessels to refix in full year 2026, reducing to just 1 if you look at maximum periods. This compares very favorably to the 50 minimum period openings we reported at Q4 2025. Looking into 2027, based on minimum periods, we have 15 vessels available. Looking at the current charter market, the table on the slide shows indicative rate levels and periods across our key feeder size clusters. Rates range from approximately $20,000 per day for 1,300 TEU vessels up to around $30,000 -- roughly $30,000 per day for 2,800 TEU tonnage with periods of 18 to 24 months, partly longer as we have also seen and as Moritz reported based on our most recent fixtures. Modern eco-design vessels continue to command a premium in both rates and period. We are already engaging actively on our open positions. The 3 fixtures Moritz mentioned demonstrate the continued market strength. The distribution across vessel sizes for the remaining 2026 openings is shown at the bottom of the right-hand slide with the majority in the 200 to 2,800 TEU cluster. Let us now turn to our strategic execution and fleet positioning. Our portfolio optimization continues to advance on all fronts. The ECO share of our fleet by TEU now exceeds 75%. The average year build for our vessel portfolio stands at 2015 compared to 2007 based on 2021 comparison, a gap that reflects both the accelerated fleet renewal we have executed as well as the disciplined management of the conventional tail, including vessel sales, but also upgrade investments. The newbuilding delivery time line runs from Q2 2026 through to Q2 2029 and is illustrated on the right-hand side, basically spanning 5 different vessel classes across 4 shipyards. All 17 newbuildings carry long-term charter employment. Turning to the financial profile of the newbuilding program. Total newbuilding construction CapEx is approximately $900 million. Against this, we have secured contracted revenues of approximately $1.2 billion and projected EBITDA of approximately USD 0.7 billion across the initial charter periods. The recycling value adds a further approximately USD 110 million to USD 120 million. Upon charter expiry, the average age of the newbuilding vessels will be approximately 8 years, providing substantial long-term value upside, which has been an important ingredient in our economic decision-making. Let's look forward and our forward focus remains structured and consistent. So let me briefly walk you through the 6 strategic priorities. Firstly, balanced charter alignment with regards to fleet renewal. We reinvest or invest selectively in modern, efficient tonnage where employment visibility supports the investment case. Renewal remains paced, return-driven and aligned with the demand of our customers. Selective portfolio optimization. We continue to divest older or noncore vessels where market conditions are attractive, recycling capital into assets that strengthen our competitive position. opportunistic deployment of capital in volatile markets. Market dislocations create compelling entry and exit points. Our balance sheet strength allows us to act with speed and discipline when risk-adjusted returns are attractive. Continued funding diversification and cost discipline. We maintain our focus on broadening the funding base and reducing the average cost of debt, demonstrated in Q1 by closing of the revised RCF, and we are working on further measures as we speak. Deepen strategic customer relationships and partnerships. Long-term relationships, repeat transactions and counterparty reliability are increasingly important differentiators, particularly as liners consolidate further. Reliable capital stewardship and sustained distributions. We remain committed to combining reinvestment for future growth with attractive recurring returns to shareholders. In summary, our objective is to combine resilience with long-term value creation through disciplined execution across market cycles. And with that, let me conclude the presentation. Let me close by summarizing the key messages from today. enhanced charter coverage and a strong backlog. With approximately $2 billion in secured revenue, we have achieved contract coverage of 99% for 2026, 69% for 2027 and 41% for 2028. This provides substantial multiyear earnings visibility and underpins cash flow stability. Continued proactive fleet strategy. We have divested 3 older vessels at attractive prices and progressed on our 17 vessel newbuilding program on schedule. The equal share of our fleet by TEU now exceeds 75% Shareholder value creation. We are declaring a Q1 2026 recurring dividend of USD 0.04 per share, 50% of adjusted net profit and cumulative distributions to shareholders have now exceeded USD 1 billion. Revised full year 2026 financial guidance. We are raising our EBITDA guidance to USD 260 million to USD 280 million. Revenue guidance remains unchanged at USD 450 million to USD 460 million. This reflects our high contract coverage and improved earnings visibility as well as effects from vessel sales. Navigating an uncertain market with discipline. The Middle East situation, energy prices, macro fragility and trade policy uncertainty are all live variables. But our strategy is clear, focus on what we can control. disciplined execution, fleet transition aligned with customer demand, opportunistic capital deployment and maintaining a robust balance sheet. This disciplined and resilient approach positions MPC Container Ships to navigate volatility while continuing to create long-term value. This concludes our presentation for today. Thank you all for your attention, and we are now happy to take your questions. Thank you.

Turning to the first question here received. Could you provide some color on the daily OpEx increase compared to Q1 '25? Main reason for the increase is the current inflationary environment that we are operating in, which is unfortunately not stopping for shipping. We have seen over the past couple of quarters, quite a strong increase in salary and wages of our seafarers, but also in relation to spare parts and obviously, most recently, travel cost. All this is the main driver for the OpEx increase that we have seen over the past year. Second question is relating to the depreciation. Could you provide some color on the depreciation increase compared to Q1 '25? Sure. In Q1 '25, we had a bit of an IFRS-related outlay. We have end of '24 acquired 4 modern ships, which we subsequently chartered out on a 3-year time charter. However, when acquiring the ships, the vessels came with a below-market time charter and that below market time charter has been reflected in the depreciation, essentially saying that the usual depreciation you would have expected based on purchase price, et cetera, was significantly lower. That IFRS effect is now being out of the picture, which explains the discrepancy between Q1 '25 and Q1 '26. On top of that, we have been, as you know, been very active over the past quarters in terms of portfolio optimization. We have been selling a couple of ships, which obviously is also impacting depreciation figures and also being mindful about our order book. First newbuilding is being delivered in August this year, which will also then have an impact on depreciation going forward.

Okay. There is another question. How is MTCC balancing the decision to sell older vessels versus rechartering them? And is the current market environment making rechartering more attractive than selling? -- does MPCC's current leverage level influence these decisions in any meaningful way. As we have also explained during the presentation, we are pursuing a pretty clear portfolio strategy, renewing the fleet, but at the same time, also making use of opportunities to charter out, obviously, existing tonnage to maintain a sizable fleet. I think we, at this point in time, see that the S&P market, meaning the asset values are slightly higher compared to the charter rates, both on very strong levels and also in historical context. We have, as explained during the presentation, done both recently. So we have sold older vessels to monetize and take the benefit, in particular, of less efficient designs where we also don't see a retrofit case and maybe more unique designs, whereas we have tried to streamline our portfolio and continue to charter them out to our good chartering clients. So going forward, you can expect us to take decisions that are linked to where is the vessel in the docking cycle. Is it a design that we deem fit for also retrofit case and also, of course, trying to enhance the chartering book because we do believe there is certainly option value at the end of the charter and maintaining a good fleet is very important. As far as the implication or impact -- potential impact of leverage is concerned, that does not really come into play in our view because we have basically all the more liquid and older ships in -- most of them are unencumbered or that free. So we are free to sell them at any given point in time without any prerepayment penalties or the like. So we always balance things. So we believe having a sizable portfolio is important, but continue to renew the fleet and sell older vessels at these price levels, which is accretive from an NAV standpoint is something that we definitely pursue. And you can expect that we potentially sell further vessels in the course of this year. There are no further questions at this stage. We would wait for another minute or so to see whether any further questions come in. That does not seem to be the case. And on that basis, we would conclude today's call. Thank you very much for your interest in the company and in our earnings call today. As articulated throughout the earnings call, we are looking ahead with a very positive mindset, and we believe that at MPCC, we are very well positioned to continue to benefit from the market dynamics, albeit these are challenging at times. Thanks a lot again. All the best, and take good care. Bye-bye.