Odfjell SE (ODF) Earnings Call Transcript & Summary

Okay. Good morning to all of you. A warm welcome to our annual and traditional Capital Markets Day. Before I start, I just want to say a few words about the situation for Odfjell in the Middle East. As many of you have seen, we have 4 vessels on the inside. Three of those vessels are so-called time charter vessels. They are hired in from Japanese shipowners and one of the vessels is fully owned by Odfjell. First of all, I want to say that they are all safe and sound on both those 4 vessels. And our focus over the past 80 days have been to maintain the endurance of those vessels. And first and foremost, that means that we have focused on the mental endurance to contribute to maintaining the atmosphere and the morale on board the ships and also the leadership on board those vessels. And secondly, we also need, kind of, operational endurance. So focus has also been on stocking the vessels up with provisions to make sure that they have enough food for whatever could happen and also to make sure that they have enough fuel to do whatever we would like them to do. And I must say that I'm impressed by the mentality on board, by the leadership on board and also by the fact that after more than 80 days, they are still in a position where they make rational and good decisions. So we are, I would say, well prepared to handle the situation as long as it takes before the Strait is opened. As many of you have seen over the past 1 or 2 days, there has been some positive signals from one of the parties in the conflict, but the other party is not that optimistic about the reopening. So we are just taking the situation as it is and trying to make the best out of it. And at the same time, we also try to assist our customers inside the strait because many of them are in an even worse position than we are. But we will come back to the Middle East in some of the presentations that are coming after me. I will just give you a brief introduction, and then Terje will take you through our financial performance. Bjørn Hammer, who is Chief Commercial Officer, will update you on Odfjell Tankers. We will have a short break. And then Nils Jørgen Selvik will summarize the shipping part and also serve as an introduction to the terminal update. So we hope to conclude this within slightly more than 2 hours, and then we will have a milling session outside afterwards. So that is the program for today. And then if you really want to understand the Odfjell strategy, the present Odfjell strategy, then you have -- I think you have to look at the last decade. In 2016, we did a major reorganization. We laid off 1/3 of the shore staff. The office in Bergen was reduced with 40%. And the reason for that was simply that we had too much debt in a very challenging market. Since then, we have gradually focused on deep sea shipping. So what you see today is an Odfjell that is 100% focused on deep sea transportation of liquid chemicals. And that means that we have exited the gas venture. We have exited regional transportation in Europe, and we have exited regional transportation in Asia. On top of that, we have also sold off the so-called one-off vessels. So today, we have a homogeneous fleet, mainly stainless steel and every vessel that is in our portfolio serves a purpose. So the purpose today is to capture the short term, makes the best out of any opportunity that can arise, but at the same time, keeping in mind that there are, at some point, tough times ahead, and we have to make sure that we also position ourselves for the next downturn. So, de-risk the long term. And that gives us 3 basic principles. We do not compromise on safety, safety procedures and safety work. I would say that, that goes through any operation that we are conducting, and we do not tolerate any deviation from our safety procedures. Secondly, we say that transportation -- deep sea transportation and storage of chemicals. That's our core business. That's the only thing that we focus on. And we have world-class ambitions in everything we do, meaning that if we cannot win, we do not compete. And that is the rationale for exiting those areas where we saw that there are competitors who are definitely better than us. So let's focus on what we are really, really good at. 2025 was another busy year for us to conduct our purpose. We today have 2,300 colleagues. And then on top of that, you can add another 1,000 serving on board our time charter vessels. So in total, we are providing food on the table for more than 3,000 persons. To perform our task, we have more than 70 vessels in our fleet today, and we also operate 4 terminals that Harald will introduce you to later on. Last year, we, first and foremost, had no severe incidents or accidents. We are also proud that we established the world's first operational green corridor. I'll come back to that later on. We introduced the first deep suction sails on deep sea vessels. We established a joint venture with the Nissen Group of Companies. That is a relationship that has been ongoing for approximately 1 decade. But last year, we formalized that cooperation. And finally, we continue to develop our terminals. We continue to build out new tank pits. Last year, we inaugurated 2 tank pits. And this year, we will inaugurate one tank pit in Antwerp. And we are also finally building out the so-called E5 area, land area in Ulsan. So there are plenty of exciting activities going on also on the terminal side, although that section sometimes gets less attention than what it really deserves. If we then shift to the markets, to the supply side. It's estimated that over the next approximately 4 years, we will see a relatively modest growth of 3.4%. But I think the major takeaway from this slide is that the world is 100% fully dependent on the services that we provide. It is not possible to imagine a world without liquid chemicals. These chemicals go into every industrialized process that you can possibly think of. And I think we will see some interesting effects of this dependency due to the conflict in the Middle East, where right now, 50% of the feedstock for the world's fertilizer industry has been shut off. I think in Norway, we will not see the consequences this year simply because the Norwegian farmers had already ordered their fertilizer for 2026 when the war broke out, but it will be interesting to see what happens next year. For other countries, which are ordering fertilizer at a later stage, they are already struggling with access and they are struggling with prices. And then you can add on methanol, where 1/3 of the world's methanol is trapped inside. 1/3 of some of the glycols that the world is dependent on are also trapped inside. Helium, which is a byproduct from the gas production, is also -- 1/3 is trapped inside. So I think we will see an interesting test on the world's dependency on many of those chemicals that we rely so much on. So although we project a modest growth, it's still an area that is set for growth going forward. That on the supply side, my colleagues will touch more upon this going forward. But we will see here that there is a relatively significant increase in the Middle East -- middle -- the medium-sized stainless steel segment this year, we expect a growth of 8%, which is quite significant. And then it will gradually slow down until 2030. In the large stainless steel segment, the story is quite different. Here, we basically see a flat development and the increase of 2.7% this year is mainly due to Odfjell's order book. So the growth in the super-segregators segment is basically due to Odfjell's order book. And this is the core of Odfjell's activity. We have a 40% share of the so-called super-segregators segment, meaning the world's biggest and most advanced chemical tankers. So although we have an order book of slightly more than 20%, we are not too worried about that order book. And then to sustainability. We have been focusing on reducing our so-called AER, the carbon intensity for all the way since 2007, 2008. In the beginning, we focused mainly on operational measures, meaning those measures that we could implement relatively cheaply, I would say. And that is, for instance, hull cleaning, that is weather routing, all those measures that contribute to reducing the fuel consumption. And then we have also done a lot when it comes to the technical measures where we have introduced the suction sails. We have developed new and more advanced propellers for ships. We have -- we have installed, I think, more than 200 various energy-saving devices on board of our fleet. And what we realized some 6 to 12 months ago was that we have performed most of the financially sound improvements when it comes to operational and technical matters. So if we wanted to reduce our carbon intensity further, we had to establish a third leg, which in our books today is the utilization of biofuel. And that is the reason why we established this green corridor between Brazil and Europe. There are today, I think, more than 100 initiatives where companies are trying to establish green corridors around the world. The initiative that I think has come furthest is a ferry company between Sweden and Finland, where they are trying to utilize biogas. And we put on some additional power to make sure that we would beat them before they managed to establish their corridor. So today, we have an up and running corridor between Rio Grande in Brazil and Rotterdam. It's not totally green. I have to say that. It's as green as it can get. It's based on B24, meaning that it's 24% biofuel blended into the fuel. But that is the greenest product that you can today get in Brazil. And we are determined to make it even greener, but then we say that then the ports will have to contribute by making the port rotations more efficient and also the customers have to contribute, not necessarily by paying up, but simply by giving us more cargo. So you have not seen the end of this story yet. And then plenty of people ask me what do you do about AI? A couple of words about that. We've had an AI strategy in Odfjell for the past 2 years. We started to focus on the people or colleagues to give them access to AI and also to train them in utilizing AI. When we are utilizing AI in Odfjell, we are using -- we are not using the Internet, we are using internal data. So we also realized that to maximize the output from the use of AI, we also needed to restructure our data. So today, we are halfway in that data restructuring. That project is on time and it's on budget, and we expect to finalize this restructuring by the end of next year -- today -- sorry, mid next year. Today, we have restructured all the operational data, meaning ship management and Odfjell Tankers. And then the support functions, IT, finance, HR and so on will follow suit. So we started with the people. And then today, the focus is on a department level where we see whether we can develop agents or solutions that will support not only the single employee, but each department. We have implemented the first agents already. And the next step will be to see whether we -- how we can utilize AI on a corporate level. And then I also have to say that we cannot -- so far, we cannot identify any cost savings, and we cannot identify any revenue increases. But what we have identified is that we are improving our decision-making. So we are making more information available at an earlier stage, and we are enabling our colleagues to make better decisions. And then I'm convinced that gradually, we will also see cost savings, and we will also see it on the top line. But we have a strong focus on AI, and I'm very satisfied with the way this is developing. And then finally, to the world and the geopolitical situation. On the left-hand side here, we have listed those elements or those factors that are relatively independent of the world situation. It's basically -- it's basic supply and demand factors, maybe with the exception of the shadow fleet, which I think we have to realize is here to stay, at least in some parts of the world. On the right-hand side, we have listed all those factors that are dependent on or consequences of the geopolitical situations, and we've tried to group them in 3. The first group is those economic weapons or threats of economic sanctions, which is something that we have to live with, I think, for the foreseeable future. We will see more regional requirements and restrictions. And then we've -- I think over the past few years, we've also seen that the world's chokepoints have become increasingly important. The Red Sea has been more or less closed for the past few years. Now we see the same happening in the Strait of Hormuz, and it will also be interesting to see what happens to the Panama Canal if this El Nino effect really becomes as strong as some people believe it will. And finally, we have plenty of other consequences of these factors relating to more congestion because when all the cargo is going from fewer ports, then there will be more vessels calling those ports. And also, we see -- we've seen that the bunker price has doubled since the outbreak of the war, and we also see that insurance costs and other costs are fluctuating. But all in all, I would say that when these things happen, there seems to be a flight to safety and security among our customers, which is generally a benefit for the large and well-run operators. So all these factors does not necessarily have a negative influence on our operations. So that was my brief introduction, and then I give the word to you, Terje.

Thank you, Harald, and good morning to all of you. I will start by looking at our financial performance and some financial KPIs, the last 15 years, actually. This is showing from 2011 until 2025. And as you can see, we have delivered quite a solid increase in the EBITDA from our tanker business and from the terminals in total the last 5 years. While we were delivering around -- in the range of USD 100 million to USD 200 million in EBITDA from 2011 until 2020, we have delivered in excess of USD 400 million in EBITDA annually since 2021. We have also seen that the return on capital employed has increased. While we have delivered a return on invested capital since actually we were listing the company back in the '80s of around 9% annually. We delivered a 5-year average return on capital employed of 13.5% and delivered 20.1% return on equity in the last 5 years. We have also used the situation to increase -- improve our equity ratio quite substantially. While we were around 26% equity share in 2020, last time when we completed the fleet renewal program with the Hudong vessels and the CTG vessels, we have improved the equity ratio to 49% end of 2025. Also loan-to-value, we had a loan-to-value at a peak of 65% in 2020, and we are now around 44% for our fleet, which gives us ample room and solidity and also room to grow our business going forward. Cash breakeven has been quite stable throughout this period, while we have seen a small increase in the cash breakeven in the last few years due to the cost inflation that we have seen. We have strengthened our balance sheet, as mentioned. We have also delivered solid dividend in the last few years. We have reduced our debt with USD 470 million since the height in 2020. And in parallel, we have, since we reinstated our dividend policy beginning of 2022, delivered USD 390 million in dividend to our shareholders. And that equals around 42% of the current market cap of the share. Also improved the net interest-bearing debt above EBITDA. We are around 2.5 now compared to well above 5.5, if you look further back in the time series. And going forward, we expect that to be -- continue to be around the same level based on the annualization of the earnings we delivered in first quarter 2026 and based on the fleet growth that we are expecting in the coming years. And the dividend policy is to pay 50% of the net results 2x a year, and we expect to continue with that policy going forward based on the situation today. We see a solid access to capital in the market at competitive and improving terms. We show here that we have a bank debt of around USD 600 million end of first quarter, which is 29% of our capital structure, increasing from 21% back in 2018. In that time, we had much more financial leases on our balance sheet. And we have kind of turned around from financial leases, which is a more expensive financing and replaced that with bank debt in the last couple of years, offering lower leverage, but lower margin and much more competitive terms than financing our activity in the financial lease structures. So that has decreased the financial lease to USD 56 million end of first quarter, which is only 3% of the capital structure compared to 21% back in 2018. And we only have a few Japanese lessors in our portfolio per end of first quarter. Also, the bond market, we are still in the bond market, around USD 100 million outstanding, but it's only 5% of our total capital structure compared to 13% back in 2018. Right-of-use assets debt or IFRS16 debt is around USD 300 million in the first quarter, 15% of our total capital structure compared to 12% back in 2018. And that is also given that we have increased the number of time charter vessels, but we also used the opportunity to buy back a few of the time charter vessels throughout the couple of last years and turn that into bank debt instead of right-of-use assets debt. Equity, as I mentioned, we are at close to 50% equity share and total equity is close to USD 1 billion end of first quarter '26. We are still below -- looking at the share price below book values. On the other side, we see a growing number of shareholders, but of course, share liquidity is still a focus area for Odfjell. This is showing the bank debt has developed or the total debt in the company has developed and expected going forward. We have around USD 1.5 billion in -- we had that end of 2020 in external debt for our company, which is now around NOK 1 billion end of first quarter. And we see the same as I mentioned here, that the financial lease is decreasing quite substantially, while the bank debt part is increasing slightly. And we still have a substantial part of our debt within operational lease or right-of-use assets debt. If we look into the future, based on the newbuildings that we are taking into our fleet, both the time charter vessels and the owned vessels, we expect bank debt to increase to USD 1.357 billion end of second quarter 2029, and we have this last vessel delivered to Odfjell. We have reduced the financial lease debt, as mentioned. We expect an increase, of course, then the operational lease debt going forward based on the 17 new vessels that we are going to take delivery of. But we've also seen that our average cost of capital has been reduced from average 3.18% back in 2020 to 1.95% end of first quarter. Also mentioning that our existing time charter fleets account for around 20% of our revenue days and also 20% of the time charter earnings and net results for the last 4 quarters. So we are getting a substantial return out of the time charter vessels that we have in our fleet today. We have 5 newbuildings on order. One has been financed in the bank market already, while the 4 that we ordered last time, we haven't financed in the market yet. But for this illustration, we have assumed that we will obtain bank financing to secure the financing for those 4 vessels. This is more an illustration on how the bank or the debt structure has developed since March 2020. And here, we see the same that we have still a substantial part of operational leases. Financial leases has decreased substantially, while we are seeing an increase in the bank debt and expect that to slightly continue to increase. But on the other side, we will see a quite strong or high increase in the operational lease debt on our balance sheet based on the time charter vessels that we are taking delivery of going forward. Cash breakeven has been on our agenda for several years, of course. We have -- we are showing here what is the total cash breakeven per last 12 months ending first quarter. that is USD 22,650. If you break that down to owned vessels or bareboat chartered vessels and time charter vessels, we see that time charter vessels has a cash breakeven of USD 21,172. We have then included allocated G&A, just for illustration purposes of USD 3,202, while USD 17,970 is the average time charter rates that we are paying for the existing time charter fleet. Looking forward, including the 17 new time charter vessels to be entered into our fleet, the average time charter rates to be paid is around USD 21,000 per day. For the owned vessels and the bareboat charter vessels, the time charter or the cash breakeven is USD 23,132. And of course, OpEx is a large part of that with USD 9,659, while the finance element is USD 7,112 (sic) [ USD 7,812 ] . And looking into the OpEx, we, of course -- crew is a large part, 55%, while technical provision and ship generalist remain a main part of the total OpEx for our vessels. On the finance part, we see that installments is around 60% of the cost or the cash breakeven finance cost, while margin is only 17%, substantially decreased compared to what we showed a couple of years back. Looking further into the cash breakeven, this is showing how it has developed since 2019. We then have a cash breakeven of USD 21,981, increasing to USD 22,507 based on the forecast for 2026. We have seen a stable development in cash breakeven last year, and we forecast a slightly decrease due to the time the new 10 vessels to enter into our fleet in 2026. So we have more vessels to spread the cost over than we had before 2026. Longer term, breakeven remains above 2019 level as we have seen some cost inflation for OpEx and also slightly for G&A. And we have refinanced many of our vessels the last couple of years. As I said, we have replaced financial leases with bank debt to a large extent. And we have improved or reduced the cash element of the financing cost with around USD 830 per day in 2025 compared to 2019. Looking further back, we actually we see that we have reduced our cash breakeven compared to where we were in 2012, where we were close to USD 27,000 per days, we have actually improved that figure with 16% compared to that time. But that was before we had a company turnaround that Harald mentioned, and we substantially reduced our cost, both for G&A and also for our OpEx and for our total capital structure. This is more illustration what we can expect of free cash flow going forward based on different rate scenarios. As you can see here, we are pointing that last 12 months, we had average time charter earnings per day of USD 28,400. That gives us a free cash flow to equity of USD 134 million. And we look at -- if you look at EBITDA less interest expenses and IFRS16 capital repayments, that figure was USD 266 million. This is also shown a sensitivity that if we increase or assume that the time charter rate increased with USD 1,000 per day, the cash -- free cash flow from our existing business will increase with USD 24 million per year. And we also here illustrated what will the new vessels that are coming into our fleet, time charter vessels contribute based on the same time charter scenarios. So if you look at a scenario with USD 29,000 per day in time charter, that will equal free cash flow of USD 148 million based on the existing fleet. And if we assume that the time charter, the new time charter vessels are delivering the same time charter earnings per day, that will take the free cash flow to USD 181 million based on that scenario. We are also building a solid investment capacity for future growth for our company. This is showing both the time charter vessels that we have secured already. It's also including the newbuilding program with the 5 vessels and how that will impact our liquidity and equity for the company. And as you see, the liquidity impact of the time charter vessels will be quite limited, while it will take 6% of the equity percentage when all these are activated and capitalized on our balance sheet. The newbuild program will require some more liquidity, USD 94 million and will reduce our equity percentage when all delivered with 5%. And here we are illustrating potential investments. Those are not planned, but we are just indicating what could be done and how that would impact our equity and liquidity. And we have illustrated a potential acquisition of 4 vessels, secondhand vessels for USD 50 million per vessel and loan-to-value of 65%. And we also illustrated a potential terminal investment of USD 200 million and we expect that would impact our liquidity and equity. And if you look at compared to where we are today, March '26, we are at 46%. That is after we paid the dividend from last half '25, we are at 46% equity share. Looking at the planned and decided investments that will reduce our equity share with around 11%. If we also include the potential investments, that will reduce our equity percentage with further 9%. But if we assume then that we -- until all these vessels are delivered, we are going to deliver the same time charter earnings that we delivered in first quarter this year, that will lead to an increase in the equity percentage of 10%, also including continued dividend at 50% of the net result being paid to our shareholders. And then we will be well within our target equity range between 30% and 40% based on such a scenario. So we are showing that we have ample capacity to further growth and a quite solid balance sheet based on actually the investment that we have decided, and we could potentially do more than we have done already. Here, we have updated our estimated NAV based on various assumptions and external indications. We are showing the book values end of first quarter '25, it says maybe it's '26, I would assume. Then we have book values of USD 1.471 billion. And we have looked into external broker estimates year-end 2025, conservatively adjusted those down with 10% and we then reached an excess value for our fleet with USD 322 million based on the broker indications. And we've also done, of course, internal valuations and that more than support these values based on how we are looking at the future and estimated revenue forecast for our vessels. We also have the time charter vessels that we currently have on the water. If we compare what the time charter rates we are paying with what we have to pay in today's market, chartering the same vessels, we assume that we will have a conservative value for the time charter fleet of around USD 90 million. And the terminal business, if we are looking at more multiple approach on the terminals using a rather conservative multiple compared to what we see in the market, we could add on USD 250 million in excess values above the book values for our terminals. Then we reach a value-adjusted long-term asset value of USD 2.133 billion. And based on the current exchange rates for U.S. dollar and Norwegian kroner, we then reach a price share -- value adjusted price value of NOK 189 per share, well above current market value per share and also above the book value that we have on our balance sheet. This is showing how we have performed as a company or share since last 12 months. We are comparing here with -- there are not that many companies to compare with, but we are comparing with chemical tanker operator and a few product tanker companies. And we see that we have since first quarter of 2021, our share price has increased with 319%, which is 33% in average per year. And if you include the dividend that we have paid in the same period, we have a total return of 502%, which gives a compounded average growth rate of 43%, which is in the higher level when we are comparing to these peers within the product tanker and the chemical tanker segment. As I said, we are still below what we would like to. We see that the analysts, most of them have a hold recommendation currently. But on the positive side, we see an increase -- continued increase in the number of shareholders in the company. To summarize, we have utilized the strong markets in recent years to strengthen our balance sheet and also delivering substantial or solid returns to our shareholders. We have successfully optimized our debt structure, and we have access to a wide variety of funding sources and quite a competitive cost of capital in today's market. We're also renewing and growing our fleet through a balanced approach, combining the newbuildings for our own account, 5 vessels with the capital growth through the additional time charter vessels that we are going to get delivered in the coming years. And also our balance sheet supports future time charter commitments and our CapEx program and also underpinning, as I also illustrated, increased dividend capacity under the current market conditions. Equal -- last word, equal treatment of our shareholders remains a priority, and we continue to favor dividends over share buybacks. Then I'll leave the word to Bjørn.

Good morning, everyone. My name is Bjørn Hammer, and I'm the Chief Commercial Officer in Odfjell. And I'm responsible for Odfjell Tankers, which is our commercial and operational platform, which covers everything we do on freight and commercial operations as well as what we do on the asset side when it comes to sale and purchase, newbuildings, time charters and so on. Over the next 20 minutes or so, I will take you through our commercial strategy and our market position and also why we think that Odfjell Tankers is very well positioned to both navigate the very complex environment we see today as well as growing into the future. Odfjell Tankers is a preferred operator in the deep sea transportation of specialty cargoes. We operate today a fleet of 72 tankers with a total deadweight capacity of 2.5 million tonnes. We carry approximately 13.4 million tonnes every year across 2,500 nearly port calls and almost -- we do almost 9,000 individual cargo operations annually. Our strategic strengths are very clear. We have a modern and fuel-efficient fleet, out of which is mostly stainless steel. We have a global presence across all major deep sea chemical trade routes, and we have a proven capability in managing very high complex cargo operation. And this makes us a trusted partner to the leading chemical companies, and we have today about 60 different contracts, which makes up for about half of our annual volumes. This slide demonstrates the Odfjell trading model and the global reach of our operation. Every year, we start out by allocating all the available ship days in our fleet to the various trade lane based on the commitments we have under our contracts to provide sailings. That can vary from typically 1 to 2 sailings and in some cases, even up to 3 monthly sailings under these contracts. And in return, our customers are obligated to provide cargoes for these sailings. Some of the tradings that we operate in, they have a very natural flow of more specialty chemicals, and they, therefore, require a more dedicated contract service. And these are trades that typically originate from the U.S. Gulf, and we define those as our front hauls. And in the majority of the trades that we operate, there is a significant imbalance in between the cargoes going on the front hauls and the cargoes going on the backhauls. Taking, for example, the transatlantic trade that we do, if we go from U.S. Gulf to Europe, we will have -- we will be nearly 100% contracted -- while as we're coming back again to the U.S. Gulf, we will be almost fully spot exposed and we'll need to tap into spot market and even the CPP markets. And if we look at the trade that we do from the U.S. Gulf down to South America, we send 3 ships a month down that way also with almost all contract-based cargoes, and we need to base those voyages coming back up again solely on the spot market. The COA voyages, they are very complex. We combine a lot of different contracts on one keel. We load very -- a lot of different parcels that have different cargo proprietories. They will need a lot of focus on various berths that we call in the U.S. Gulf. And in the most extreme circumstances, we will bring 40 different products on one keel loaded from 10 different berths in the U.S. Gulf and to an equal number of berths coming down the East Coast of South America divided over 5 ports. So optimizing each and every COA voyage is, of course, extremely important to limit as much as we can the time spent in port but also minimize the cost that we will incur. And equally important is obviously also to find the right program in bringing these ships as quickly as we can back into position and into the front hauls. But the fact of the matter is that even though we have about 50% contract coverage, almost all the available ship days in our fleet are allocated to provide for these various contract trades. And of course, to have this contract portfolio and have it as robust and as diversified as possible is a key part of our strategy. We consistently, as I said, maintain a contract coverage of about 50% in a broad range of contracts. The number is 60 -- and -- but these are all contracts that we have built up over decades. They may only be 1 to 2 years in length, but a lot of the contracts that we have are contracts that we've had for more than 10 years. If you look at the total customer base, it's also quite wide, including both COA and spot. We cater for more than 200 contracts annually and with only -- the 10% top customers represent less than 40% of the total volumes, which also limits our concentration risk quite substantially. And it's equally important with our product diversification, we carry more than 400 different products every year. Our customer base, as you see down to the left corner here, it includes practically all global chemical producers as well as traders and distributors. And many of these customers are on the Fortune 500 list. So this is truly a significant portfolio that is built for resilience. And this resilience is also very evident if we look at our TCE performance. Our current TCE performance as of first quarter this year sits at just over USD 27,000 a day, and that's giving us a free cash flow of nearly USD 5,000 a day compared to the cash breakeven that Terje was just talking about. And since the start of the market upturn, we have managed to improve our contract terms significantly. And although it's quite evident that the markets are down from the very peaks we saw in the mid of 2024, we have now established a floor that is approximately 40% above pre-cycle earnings. And if we look at the more recent market development, we have seen a quite significant firming in spot rates even adjusted for increases in bunker prices in trades, particularly those that either originates or ends west of Suez. And with that, the immediate market sentiment is, therefore, quite positive. And if we look into more detail on what the effects the Middle East conflict has on our market, of course, the Iranian military has effectively blocked and trapped all the tankers currently inside the Hormuz and really halting the cargo flows. As Harald was mentioning, it's now choking and holding in about 17% of the global supply of chemicals worldwide, and that's based on 2025 numbers, as you can see on the chart to the very right. And all of those customers who've been depending on the volumes coming out of the Middle East, they have been forced to find alternative supply from different locations around the world, which has both pushed the freight cost, but also the freight rates we see for those trades. And there are also other knock-off effects. We're seeing that, and it's already been mentioned that a substantial part of the chemical feedstocks are also coming out of the Middle East. That is both naphtha as seen here, but also sulfur, which is an important part of the fertilizer production. And the effects of the naphtha shutdown towards the Asian refineries is that we've seen some force majeures declared already. So of course, in the near term, this has had a quite positive effect on earnings and on freight rates. However, in the more long run, we will see a -- it will probably have a negative effect on volumes, not that it necessarily translate into lower freight because there will still be a disruptive picture where cargoes need to be traveling longer distances from alternative supply points. And of course, it's very hard to predict when the Hormuz will reopen, but it's even harder to predict the long-term effects that it will have. Of course, since the original attack from -- under the Operation Epic Fury when Israel and U.S. attacked Iran, there has been a lot of different signals in the market. There has been ceasefire announcements. There has been port blockades. There's been a escort operation and a lot of things that has caused a lot of instability in the region. And I think that will lead a lot of people to avoid bringing supply chain back again into the Hormuz. And it's also quite evident as we see a lot of industry experts coming with various statements. We have seen the Dow CEO saying that they estimate 275 days from a potential opening until their supply chain will turn back to normal. And also Saudi Aramco CEO has warned that it may take until 2027 for the situation to normalize. And of course, we're also seeing that on a more structural note, the U.S. has gained a lot of market share in different product categories such as naphtha, methanol and lubricants. And these changes will probably last a lot longer than the conflict itself. We are nevertheless well positioned to both capture positive effects from this near-term disruption, but we're also actively mitigating the medium-term demand risk that might come, and we're doing that through the commercial platform that we have and the flexibility that's within it. And as we see here, our COA coverage normally ranges from about 45% to 70% maximum with an average of about 58%. When markets are strong, we typically deploy more capacity in the spot market, and we can see how the share of spot volumes carried by Odfjell has increased quite a lot from April '25 up until April '26. That's a 75% increase in spot volumes. And we're also very dynamic when it comes to our product mix. We shift into those categories that provides the best returns, and we maximize that by prioritizing those products. And a very good example of that is ethylene glycol that Harald was also mentioning earlier. This is from -- relating more to the U.S.-China trade tensions. And as those intensified, we pivoted volumes around the U.S. Gulf to India trade. And that's -- as you can see, the volumes there has increased quite a lot, and we have captured really meaningful earnings by shifting capacity into that trade. And this sort of adaptability is really a core of our commercial strength. If we move on to talk about our fleet, as Harald has mentioned already, during the last years, we've done a transition in our fleet to really have a strategic focus on deep sea market. And today, we have a very streamlined fleet with vessels that only suit for that category. We only have ships that are in the size of 20,000 deadweight up to 55,000 deadweight. The number of the vessels in the fleet is 72, but we also have 22 ships on order, which includes both our own newbuildings, but also ships that we will take on long-term time charter arrangements. And we also hold about 40% of the total super-segregator fleet, which is our most important category. So the super-segregators are the ships between 30,000 deadweight up to 55,000 deadweight -- 50,000 deadweight with 52 tanks. We also have a fleet of 7 tankers that are in the large stainless steel segments, typically 33,000 deadweight ships with 16 tanks. We also have a fleet of 28 medium stainless steel ships with another 7 on order. And we also have a small fleet of coated MRs with another 2 vessels on order. Our fleet has also been very actively transformed when it comes to the age profile of the ships. We -- since the 2025 fleet, we have about 70 ships on order. In 2026, we will take delivery of another 10 ships -- we've taken 2, so another 8 is coming. In 2027, there will be 9. And in 2028, another three. In 2029, two, that can bring the high case scenario of our fleet up to 94 vessels. At the same time, we have the flexibility to either redeliver some of the ships and also potential sale of older assets that gives us the flexibility to somewhere between 94 and 82 vessels. Since 2022, we've done 13 additions to the fleet, and we have, at the same time, either sold or recycled 12 ships that has not been the right fit either because of age or because of size and other factors. And that brings us to a total average of the fleet, which is right where we wanted to be in around 35,000 deadweight tonne. And the average fleet age has gone from 12.9 to 10.6. And as we take delivery of more newbuildings going forward, it will further improve. I think one of those things that really separates us from our competition is that laser focus that we have on the deep sea chemicals and our ability to continuously develop and have good access to investment opportunities within that segment and that are a good strategic fit for Odfjell. And one of our most recent significant achievement is the very competitive pricing that we have managed to obtain for our new series of super-segregators. Obviously, the newbuildings market has moved a lot since last time Odfjell were taking delivery of newbuildings back in early -- sorry, late 2019, early 2020. The Clarksons Index indicates an increase in prices -- newbuilding prices of 50%, whereas the newbuildings that we have ordered is only 16% up from the order we did back then. That is, of course, done because of our relationships that we have with both Japanese owners as well as Japanese shipyards and not at least the very favorable yen-U.S. dollar exchange rate. And for Odfjell, we have really focused our efforts when it comes to newbuilding and sourcing of new vessels in Japan. That is partly because of quality reasons, partly because of security in delivery times, but also to some extent, for geopolitical risk management. Sustainability is not a compliance exercise for Odfjell. It is a genuine strategic priority and a source of competitive advantage. And we continue our path towards net zero shipping. So far, as you've heard many times before, we have made significant installments in our existing fleet. We have invested USD 40 million in -- across 140 different energy saving devices. Our latest focus now on innovation when it comes to improving emission of vessels is 2 projects that we would like to highlight here. One is the installation and adoption of what's called Gate rudder, which is a new rudder design that improves water flow to the propeller and also reduces the drag. And we're also following the success of the installation of the sails on our Bow Olympus, we have decided to install sails on a significant part of our newbuildings that are coming. And to that extent, the Bow Erikson is definitely the most tangible expression of such investments. She is the first tanker -- chemical tanker that will be installed with these systems, both Gate rudder and with sales. The combination of these investments and installments will reduce bunker consumption somewhere between 19% and 23%, which gives us a possible annual saving up to $1 million per vessel. These ships are, of course, our super-segregator replacement. They are 40,000 deadweight tonne, and they have 28 tanks and are installed in addition to the Gate rudder system, the 4 sails as you see on this picture. And in addition to this first Bow Erikson that we took delivery of back in March, we have another 7 of those on order, 4 of which will be owned by Odfjell and the remaining 4 will be on long-term time charters with purchase options. So to summarize, Odfjell, we maintain a leading position in the chemical tanker market with 72 vessels on the water, a global presence and deep customer relationship and the world's largest -- with the world's largest chemical companies. Our contract portfolio, it's robust, it's diversified and providing stable commercial floor across all market conditions. We have a flexible platform, and we do adjust our spot exposure. We adjust our product mix and trade -- as trade focus rapidly move. Our fleet is modern, and it's strategically aligned and with a 22-vessel-strong order book, clear focus on the deep sea tanker segment and our decarbonization program, it positions us well for the regulatory and the commercial environment that is coming ahead. So with that, I think we will take a break and then... [Break]

The chemical tanker segment is specialized and industrialized in nature, but it is also linked to the other larger tanker segments. Most all of the products that we transport, the chemicals are predominantly derived from oil and gas feedstock, and I will come back to some considerations on feedstock. The vessel characteristics, we see that a chemical tanker is obviously focused on carrying chemicals, but it can also do and do from time to time CPP cargoes or clean petroleum products. Our neighboring segment, the product tankers, they, of course, are focused on the CPP trade, and they do also quite a bit of veg oil trade. And we also see them from time to time doing crude as an opportunistic play, but maybe more common, we see them swing into chemical segment and carry certain chemicals, but they cannot carry all chemicals. And chemicals are often transported in smaller lot sizes than are ideal for a larger product tanker to carry, but we certainly see a correlation and swing between those 2 segments. Looking at the earnings volatility, and these are average annual earnings. We see that the chemical tanker segment as represented by Odfjell here, has a much lower volatility than the larger tanker segments. This, in turn, relates to our industrial nature and our high level of contracts of affreightment, as Bjørn already discussed. If we then move over to the production side for the chemical industry, we see that we have some clear chemical production hubs and chemical product exporting regions. North America and Middle East are the 2 largest ones today, and they have been so for quite a while. And this production and export capacity is built on their domestic oil and gas industry, giving them a comparative advantage over most other regions. Europe, on the other hand, has been on a structural decline for quite some years and accelerated certainly over the last 4 to 5 years with the increase in energy costs and also regulatory challenges compared to competing regions. These figures here are maybe understating Europe a little bit because these are export figures and do not sort of represent their total production capability. So Europe do still have a large and significant petrochemical industry, but a lot of the products are transported intra-regionally or intra-Europe and goes to further downstream production and products. Production is forecasted to grow with about 2% per annum over the next 4 to 5 years. Not all of that production capacity will result in liquid chemicals transported on a vessel, but certainly a significant share of it. If we then move on to the feedstock side of the chemical industry. I will not go through this in full detail, but I just want to highlight a few characteristics about feedstocks. As I mentioned, the feedstocks to produce chemicals are generally derived from oil and gas. And we usually split it into a gas-based petrochemical route or an oil-based petrochemical route. The gas-based routes will usually produce a high level of -- from natural gas, you will get methane-rich gas, which often will become carried on an LNG tanker. But you also get for further petrochemical industry, you get the ethane gas. This is steam cracked into ethylene, still a gas, which in turn is made into a variety of liquid chemicals that we carry on Odfjell tankers. However, the product range from ethylene are less varied than what we see from the oil-based petrochemical route. The main feedstock from the crude oil route is naphtha, -- and from naphtha, you can get almost the full spector of petrochemical products and a higher variety as such. If we then turn back to the production hubs, as I started with 2 slides ago, we see that North America and the Middle East have clear feedstock advantage in terms of their availability. Both these regions could have feedstock from the whole sector, as mentioned on the previous slide, but a lot of the naphtha and LPG and crude oil is good for exporting. It's being exported to other regions, while ethane is very difficult to transport due to its extreme low boiling point. And as such, it is used into further petrochemical value chain and production of products. Europe, as mentioned, does not have a feedstock advantage. They do have quite a bit of naphtha from the European refinery industry. But of course, prices are high and not really competitive with other regions today. As Bjørn already touched upon, the Asian production capacities are, to a high degree, dependent on naphtha. This naphtha in turn is usually imported from the Middle East region or at least a high degree of it. And of course, today, they are trying to source from other regions. We know that some countries have quite substantial strategic inventories, but these are being rapidly drawn down. So this will have an impact on volumes coming out of the Asian region for the time ahead of us. China, of course, is an interesting case because it does not have a feedstock advantage per se. It imports a lot of the feedstock it uses, although it does use quite a bit of coal, Chinese coal for petrochemical industry as well. But they have made a strategic choice to build up their production capacity and the strategic goal to become self-sufficient. But we do see that for the time being, there is a clear oversupply on production from China and also a bit of softness in the economic development, resulting in quite substantial volumes being exported out of China, even though they also import quite substantial volumes. So China, we see significant flows both coming in and out. If we then move on to the Odfjell mix, so to speak, Bjørn touched upon this already, but I will just highlight that we are very dedicated towards the chemical side of the chemical tanker segment, meaning we carry more than -- or more than 80% of the volumes that we carry within a given year are chemicals. That's a higher share than what you will see in the overall chemical tanker segment. This is, of course, because we are focused on the industrial side, on the chemical producers and on their contracts of affreightments. And the core of the chemicals we carry are specialty chems, and they account for around 40% to 50% of the volume that we carried over the last 12 months. These are often in smaller lot sizes characterized by a high degree of contract coverage and often require stainless steel capacity to be transported. So we see little or no competition from swing tonnage on these type of chemicals. On the commodity chemicals on the other side, they are easier to carry. They are transported in larger lot sizes and has a higher degree of spot cargoes. And this is also where we see some competition from product tankers. And then we do also carry vegetable oils and CPP, but they sort of make up the remaining 20% of the picture. If we then move on to the rates, and these are here illustrated by the Clarksons Spot Chemical Index. We see that over the last 4 years or so, the market has been driven to a large degree by geopolitical events, which in turn have resulted in supply shocks or really increased sailing distance and increased inefficiencies. So the market was improving from around 2021 based on fundamentals. And then it certainly accelerated with the Russian invasion of Ukraine, resulting in significantly increase in sailing distances and also, of course, more directly for the product tanker segment, in turn, removing the swing tonnage from the chemical tanker segment. Then we had a period of sort of market readjustment, but this was also a period of a lot of talk around Chinese or softness in Chinese growth and economy, and we saw sort of rates coming back down before they had another ramp-up due to the Houthis' attack on commercial vessels in the Red Sea and the subsequent rerouting out of that area, again, driving up distance and inefficiency in the market. And then, of course, lately, with the U.S.-Israel attack on Iran, we saw jump -- very significant jump in rates. But please bear in mind that these are gross rates. So a significant part of this jump is driven merely by the fact that fuel costs have increased substantially. But if you take rates on a TC level or account for the increase in fuel costs, then there is still a significant increase in rates in the current market, in particularly west of Suez. Looking a bit on the demand side going forward, we see that -- and we have seen this that chemical volumes are closely correlated to general economic development, global economic development, GDP growth. We see in particularly as emerging economies are becoming mature, we see a significant increase in the demand for chemicals, while the maturing economies have a more stable development. Although there has been downward revisions on expected GDP growth going forward, we still see that most forecasts are for positive growth in the coming years and positive growth in all key regions. This graph on the left-hand side here is -- it looks a bit volatile perhaps for being a chemical tanker market, but it is showing the marginal changes on volumes, on ton mile and then compared to change in GDP growth. So if we had had a longer time series here, which we have had in previous presentations, you would have certainly seen how ton mile has been a key driver for -- or sorry, increased sailing distance has been a key driver for the increase in ton mile. Going forward, we expect a more modest growth, as Harald touched upon, around 1% a year in volume growth. And we do not expect that distance can increase significantly from current levels, but we still see some growth on the distance as well. Please note that these forecast numbers are from before the current situation and the closure of the Strait of Hormuz. So looking at more updated and I'm sorry, there's a bit of text here, but jumping down here. We have seen that estimates for 2026 are that volumes will see some decline due to the situation in the Middle East. We see around estimates of around 4% decline on volumes, but only a 2% decline on ton-mile. So this, in turn, as Bjørn also talked about, has to do with the alternative sourcing of products from other regions, in particularly the U.S. that has a dampening effect. And then depending on how long this will go on, we do expect that volumes will grow at a modest rate again from maybe towards the end of the year or early 2027. But there will also be disruptions from the Middle East situations for a long time. And we will perhaps see some increased volatility due to that in terms of when it reopens, volumes that will be transported out. Then there will be a question about the capability of the region to turn back on production to full levels. But we anticipate some sort of catch-up effect in the beginning maybe and then perhaps some longer-term disruptions to the production capacity. And then the question mark becomes what is the demand effect. So to sum up, we believe that the fundamentals are expected to support a balanced development. We do acknowledge that forecasted growth is quite modest, and we do expect a net fleet growth in the coming 2 to 3 years. But we also believe there is some added potential for recycling in the chemical tanker fleet depending on how the market develops. And -- looking at the swing tonnage, it is currently at a historically low level. We expect that to remain the case for the time being. But of course, should the product tankers see a downturn, there is a risk to swing coming back into our segment. I think to -- if you look at this figure of around 2.5%, if you account for the fact that a lot of chemical tanker operators such as ourselves also have MRs in our fleet, the actual sort of swing tonnage is closer to 0, and we also see some increased CPP volumes on chemical tankers in the current situation. So we believe it is a fairly balanced outlook. There are some key risks for sure, the Middle East being the top one and of course, how that will play on secondary effects in terms of increased inflation, potential effects on downstream demand. But we also see that this situation creates some opportunities for a global operator such as Odfjell. And with that, I would give the word on to Adrian, who will talk about terminals.

So good morning. My name is Adrian Lenning, and I'm the Managing Director for Odfjell Terminals. -- now after Bjørn has taken us through tankers and Nils through the market outlook, I'll spend the next few slides talking a bit about what we are focused on and where we're headed as a terminal platform within Odfjell. And for those of you who were here last year, you'll probably see that the focus remains fairly unchanged, and that is because we see that the model is working, and we intend to continue building and scaling on that. Today, we have a platform that consists of 4 terminals globally. We have Houston and Charleston in the U.S. We have OTK in Ulsan, Korea and Noord Natie Odfjell terminals in Antwerp, Belgium. Together, these represent approximately 1.3 million cubic meters of storage capacity. And for us as Odfjell, it generated approximately USD 44 million of EBITDA in 2025. That is from the underlying terminals. And I say one common denominator for these 3 -- or these 4 terminals is that they're all local leaders in their respective geographical markets. These are, I'd say, super segregators on land. These are high-spec terminals and high-quality organizations that allow us to handle some of the most challenging products and the most demanding -- serve the most demanding customers that are out there. And also common for all 4 assets is that we see a clear potential to continue to develop and grow the assets and drive value creation. Odfjell Terminals is a core infrastructure business, and it has all the attributes that come with that. We're an essential part of -- and a very integrated part of our customers' supply chains. We have long-dated assets with high barriers to entry, strong stickiness with our customers and in terms of pricing. And that gives us very good visibility on future cash flows and on distribution capacity. And through our contract structures, we have a very effective hedge against inflation. And these are scarce assets that are very difficult to combine. That's all good and nice, but why should a company like Odfjell be dedicating resources and capital to this? That's mainly because we think we are the absolute best owners for these assets. We understand the customers. We understand the products. We understand the operational challenges and the safety standards that are required to run these assets as good as possible. And that allows us to be an active, well-informed industrial owner, focused on long-term sustainable value creation. And when it comes to how we manage our assets, there is a very clear division today between what our local management teams do and what we do as a headquarter organization. So the local teams out at each location, those are the heroes who run the business from day to day. Those are the operators. And we are -- as an owner, we're focused on helping the teams set strategic direction and ensure that we have drive and focus on those initiatives that matters most for performance improvement. And we set for each of our terminals, we set multiyear performance improvement plans and work methodically to execute on those. We identify the levers and pull the levers that we see have the most impact, and we're starting to see very strong results from that. That goes across commercial optimization, operational improvements and expansions. And together, that's -- it's a simple but very powerful toolbox. And while I would love to do this on a bigger scale with more assets in our portfolio, what we've seen over the last years is that the absolute most interesting and attractive projects that we can execute on are the expansions that we do within our own footprint. Since 2018, we have built out 8 new tank pits. That's approximately 190,000 cubic meters of storage capacity. And we're currently adding 2 more, totaling another 130,000 cubes of capacity. And these are all projects that have investment returns in the high teens to the mid-20s with a very controlled risk profile. Either we build them out with customer contracts underpinned or with very clear customer demand. And all projects have been locally funded, delivered on budget and on time. This is just one as a case study to show how we work. This is Noord Natie, where since 2018, we've grown EBITDA by approximately 95% through expansions and operational improvements. That is, as I said, approximately 10% CAGR year-on-year for the last 7 years. And that's by building and improving consistently year-on-year. And again, all self-funded and while also distributing dividends up to us at Odfjell. And this has been achieved through very practical hands-on work by our local team with a bit of support from us. Another example is in Korea, OTK, where you also see the very clear result of how we work with our assets. Historically, that's an asset that we've struggled with from -- for about a decade until '22, '23, we had close to 0 growth and deteriorating margins. But over the last 3, 4 years, we've worked very actively with the local management team in Ulsan, and we're now starting to see a very significant change. In 2023, we launched what we have called the full potential plan for OTK. And the ambition was to see if we could find a path to double the value of the company over a 5-year period. And we're currently very well on track there, and I'm quite confident that we'll overdeliver on those initial ambitions. In 2025, we were -- we delivered an EBITDA that was approximately 50% up from 2022. And we launched 2 new major projects at the terminal, one expansion project called E5 and a new infrastructure improvement project where we're adding additional jetty capacity to the terminal. And when you layer disciplined M&A on top of that, then you have a very powerful toolbox. So in that respect, I think OTK is probably the best result of what we're trying to do with this portfolio and what I hope we can do with more assets in the future. So if we zoom out a bit and look at the portfolio as a whole, you see the combination of commercial optimization, operational performance improvement and expansions has grown EBITDA by approximately 85% since 2018. And if you look at the run rate EBITDA, including the projects that we will be bringing on stream by the end of the year 2026, then we're looking at a doubling of EBITDA compared to 2018. All this looks fairly obvious and almost simple. But my clear view is that this is only possible because we are Odfjell and we're able to use the Odfjell platform to work with these assets. So to summarize, what we have today is a terminal platform that is built around local leaders in key chemical hubs. These are high-quality infrastructure assets, long life, resilient, difficult to replicate and with potential to grow further. And together with our local teams, we've improved performance, expanded capacity and created value step by step. Since 2018, that has translated into significant capacity growth and around 85% EBITDA growth. And while we're still much smaller than the tanker business, we're starting to build a fundament that represents a fairly tangible underlying value for Odfjell and Odfjell share. And we believe there's more to do, more to build, both through organic growth, but also selectively through strategic opportunities where we see that Odfjell can be the best owner of those assets. And with that, I'll give the word back to Harald.

Okay, thanks a lot to all of you. We have now come to the fun part. We will have a brief Q&A moderated by Ole Stenhagen. So I invite all of our speakers to the floor. I guess you have some questions for us. And then, of course, the audience is also free to ask questions.

Thank you. I think the key is that the audience has questions. So I'm going to kick it off then. I have 2 practical Hormuz questions. I'm thinking about the Red Sea, there's been opening, almost opening, kind of opening, some people will go through, some won't. What will it look like when Hormuz is open? How do we even know?

I think that's a very good question. I think last year, we had a slide -- I had a slide at least that says that we didn't foresee the Red Sea to open anytime soon. And that was proven right. And I agree with you, there were some owners starting to sell through that has now obviously died down. And our focus now is [harvesting] initially has been to get these ships out. I think it will take a lot of time. Even if these ships were able to sail out tomorrow, it will take a lot of thought to put into actually some ships back in again into the Hormuz. We've been so focused on getting these out. And I think that the condition and the state of the refining business in Saudi Arabia and in the Emirates and in Kuwait, where we will load a lot of volumes is still also very unknown. And even when we talk to some of our key clients there, the information we have is very, very uncertain. So I think it will take a long time, as we said, until this is turning back to a normalized situation where we will go in and load significant volumes in the Middle East.

And that sort of tags on to my next question. I think you're a little bit careful because you're -- I mean, you're on top of storage, you're on top of transportation. And you've just shown us that a cargo that I can't even say the name of ships to the U.S. and the world is supplied. And what I think is happening certainly across the oil and refinery refined product space is that People are drawing inventories. There is demand destruction. There's new trade patterns, but there's a lot of inventory draw. So even if things start to normalize, there will be a very long time where everything is in the wrong place and where people want to rebuild inventories. So I think even if in theory, it opens tomorrow, everything is hunky dory inside, we're still looking at a year or something where trades will be very, very unusual.

Yes, I absolutely agree with that. And we're already seeing signs of that, that customers that we know have been dependent on Middle East volumes are now thinking that even if there is peace, what will that peace look like for how long will it last? I'm not going to take the risk on having my supply chain so tied up on the Middle East volumes. I will start buying from other parts of the world. And we've seen some of the Korean refiners that has been left out of the market in places of the world now are regaining market share, selling Korean materials into the U.S. that we haven't seen also in a long time. So there will be more permanent shifts. And you don't buy just a spot volume. You will probably need to secure a longer supply term contract, maybe for 12, maybe for 24 months, which also indicates that these ships will not just be able to switch around very rapidly.

Sorry, Adrian touched his eyes, I thought he was going to come with some really, really deep insight on that. Yes. So I'm sort of seeing a big question mark and then a long period of turbulence and then a reshuffling of how people want to do things even if we see people forgetting. And then the challenge comes that you've got contracts, you spoke about your U.S. Gulf front haul. Your whole thing is built up around your contracts and then you optimize utilization by getting on the cargoes. And so this is going to be very hard for you.

It is a very -- it's a hard exercise to do. And of course, it requires us to have a very good and strong long dialogue with our customers that will -- we've been in contact with them. We've had commitments out of the Middle East, which obviously we very quickly agree that we cannot load there. And then we shifted our capacity to where we know our customers can move better volumes. And I think Odfjell, we've been very strong in the U.S. It's been our most important market for a long time. And that is very important nowadays when we see that the ones that are really benefiting from this are U.S. manufacturers and also our asset base are the larger tankers, which is more suited for the American market. So we are very well positioned to actually shift and then support these customers.

[indiscernible]. A question to Adrian. Given the energy crisis in Asia, have you started seeing some government either taking strategic decisions to increase storage capacity in the region or actually globally?

Yes. As in our segment, we haven't seen anything direct. But I think the energy security, not only in Asia, but all over is absolutely back on the agenda. What we see very concretely right now is what was mentioned earlier that suddenly, we need to start our customers and the government starts tapping into strategic reserves. We have a key supplier into the region that had 5 weeks ago, they had 4 weeks left of supply of feedstock. Production is still ongoing, but that is strategic supply that is now being tapped. And it's clear that once we come out of this, both governments and I think also producers and all through the value chain will want to have more buffer.

It was great to see you take out an NAV calculation value. And it was nice to see the high number. But one thing I wonder about is your charter in tonnage. It seems to me that one thing is that, yes, you've got added value in having relatively cheap charters. Then you had some purchase options. It's hard to know exactly how they'll play out, but they're probably below today's market. So there's some more value there. But then on the breakeven on those chartered-in vessels, I think what I find so great about those charters is that 5, 7 years and you can say, no, no, we don't want to go on with the ship or you can say, yes, we'd like to continue. And that whole flexibility that you're getting by a financial lease, it's your ship, you're going to have it until the end, you're just financing it for a while. With these ships, you're really getting a lot of optionality. And how do you think about playing that? Will you -- do you think you'll be playing it? Or do you think these are essentially higher purchases that you'll end up with the ship? So how do you think about it as a group?

I think if you look back what we have done in the last couple of years, we have used purchase options at several locations. And I think we have got kind of bought vessel back below -- quite below the market. I think we have indicated in our presentation that we have bought back vessels around USD 30 million, USD 40 million below market, and there will be certainly opportunities based on the portfolio we have at current as well. But we are not putting any value on that in this NAV calculation because it's some years ahead of us and to kind of discount that now and indicate any value of the purchase options we have currently, it's a bit early. So let's see when we are getting there, what kind of values that are hidden in the portfolio.

From 72 to almost 90 ships. 94, almost more than. What is the right size?

Fleet-wise?

Yes. I know it's all the ships in the world, but except for that, what...

It's a good question. We've had the 100 ship target before. It's not an absolute target as such. But the point has been that we have a platform that can handle more ships than what we currently have. It's been a shift, as I said, from tonnage types that didn't fit where we want to be strategically. Then we -- the fleet shrunk somewhat. We are at 72 ships now that are fully purposed to the strategy. And the ships that we are adding now is also suiting towards that strategy. We think that the 94 ships that we've shown here is certainly something that we, as an organization, very easily can handle and without actually having to expand anything in our organization, well, at least very little. So it's a very good target for us. And as we've also shown, there is some cushion and flexibility and to the point about being able to redeliver ships if we don't want to extend, of course, we need to see what the market looks like. But the way we see the access we have to customers and the business that we have been presented, we are very comfortable that this 94 ships in the coming 3 years is a very good target for Odfjell. And it regains a market share that we've had historically. So it's a good target for us.

So the $3,200 of G&A is going to come down then? More ships.

Yes. And I think we also indicated that in our forecasted cash breakeven going forward that we will get the benefit out of the platform we have. We are adding new vessels, new selling days, but we are not adding any G&A costs to secure those revenues.

No. I can just elaborate a little bit. When it comes to these purchase options, I think last year, we exercised 7, I think, purchase options. And you have to remember that those vessels were contracts that we entered into around 2016. And then it took a year or 2 to build the vessels and then the options matured in last year, meaning that those were contracts that we entered into at the very lowest part of the cycle. So those purchase options were extremely favorable, and we were just catching in on all of them. When it comes to the future, when purchase options that will expire something early -- sometime early 2030, it's too early to say whether that will be in the money or not. But what we do know is that by having all those purchase options, we have kind of given us leeway on the technology shift. So should something happen when it comes to the green transition and future fuels, future engine types and so on, we have the liberty to simply hand back the vessels and say thank you very much. So part of the reason is, of course, that this gives us plenty of flexibility when it comes to adapting to the technology change within shipping.

Which is a perfect segue to that fantastic graph where you show Clarksons Newbuilding Index up by 50% and you're doing 16% up. And -- so compliments for the relationship that you developed in Japan with Nissin, with the trading houses, with the yards, everything. But comparing those ships, is it fair, Hudong versus Kitanihon? Is it a straightforward comparison?

It's never a straight easy comparison. Of course, the Hudong have some qualities in which was right at the time, and they are slightly larger ships, but the price that we have obtained for the newbuilding includes all of these technology advantages as you saw, both the gate rudder system as well as the wind propulsion system. So it's a relatively fair comparison, I will say, granted that the ships are slightly smaller, but more technology advanced. So yes.

And then I have one -- this was a very efficient presentation. You kept it rolling. So there was one thing I saw on one slide that I wondered about. You said you invested $40 million in gadgets to improve economies. I think I saw a different number earlier, not in this but last year. And I'm thinking that $40 million is not very much since 2014 because you've done so much. And you could have put up a number saying what kind of savings have we made because those numbers...

Yes, we have shown that previously.

I remember $120 million or something on the savings side, but I'm not sure that I believe in the $40 million.

I think it all depends on the oil price or the fuel price, whether those investments are in the money or not. But as you say, we have invested slightly -- somewhere between USD 40 million and USD 50 million on energy saving devices. The most -- the biggest project and maybe the project that we are most proud of is the Propeller project, where we rebuilt the gears and designed new propellers for our 19 biggest super segregators. And that project alone saved us reduced the fuel consumption with more than 20% -- and that project had a down payment period of 2.5 years, and that is more or less the average of the projects that we have run, meaning that the return on -- the average return on all those energy saving projects today is approximately 50% per year. So we are saving around USD 20-plus million in fuel because of these investments.

And it doesn't come into the cash breakeven number because it's before time charter equivalent. If it did, that would have been a significant cut in where you are. And since you're actually contracting dollars per ton, it would be nice to see all this put together because you've made giant strides.

The challenge is that we've done all the low-hanging fruit. So when we are looking at projects today, we don't see 2.5 year down payment. It's more. But of course, again, it's very fuel price dependent. So today, with an average fuel price of maybe USD 800, those energy saving devices are basically printing money.

One question. When you say disciplined M&A, Adrian, what kind of opportunities are there? And when you say disciplined, that means that there are quite a few opportunities, but there's only a small subset you'd like to look at. Can you talk more about the thinking there?

Yes. So I think there is some 8,000 terminal assets globally. And we have distilled that down to a very, very small list of assets that could potentially make sense. But so far, we have seen that what makes most sense for us is just to continue doing what we do on our existing portfolio. When we restructured this back in 2018, we had a lot to prove. We had some years of not so good performance. So our focus has really been to kind of try to over-deliver on those investments that we've made over the last years, and we're holding any M&A opportunity to that same standard. And in today's market, it's -- that is not easy. But there are potentially opportunities where we are the natural and best buyer and where price isn't necessarily the only criteria, and those are possibly the opportunities that we would act on.

Because you're not speaking enough about how -- what a big turnaround it was from a huge number of terminals that didn't make money to a smaller number that is actually making money and improving results, which is a nice story to tell. you're telling where you are, but you could actually take a little bit of sunshine from the turnaround still.

Yes. No, it's -- we were about approximately 3x the size we are today. So some of that is a result of good work, and then we've had some -- we've had the help of good markets during the last few years as well.

Very[indiscernible] today. I enjoy talking about this. I'm fine.

We too.

So I once asked one of your then colleagues, is there synergies between terminals and tankers? And he said, I'm convinced there is. I don't know how to measure it, but there must be. What is the house view today about the interaction between terminals and tankers? Is there synergy -- is there room to do better? Is AI the answer to open it?

When it comes to commercial synergies, on the terminal side and on the shipping side, there are different decision-makers. And there is also different duration of the contracts. So finding commercial synergies is, I would say, extremely difficult. But then on the operational side and on the business intelligence side, there are clearly high potential for synergies, simply on improving the interaction between terminal and ship and also when it comes to getting access to information about cargo flow. So on the commercial side, there are indirect synergies. There are clear operational synergies, but there are no direct commercial synergies. There are -- I would say that customers would likely anticipate price reductions to accept a logistics solution that is maybe not optimal for them because the starting point is that every customer has developed a concept that is optimal for them. So when we come and say that you have to change, then it's optimal for us, but not necessarily for the customer. And then they said, okay, if we are going to adjust the chain of logistics, then we accept the price to go down -- so there are obvious challenges when it comes to this cross-selling point.

Anyone who's working in the bank knows that you can have a meeting with the bank without getting a new credit card. So those cross-sales are very hard. But what are the levers to pull on business intelligence and operationally? Is it incentives? Or is it something that happens on its own? Or do you have forums for it? Or how do you do it?

We have developed platforms internally to make sure that there are regular meetings, there are regular systems for information exchange and so on. So that is well taken care of.

You mentioned Panama and we talk about geopolitics and Panama may be a problem this year. But you use the old canal if you go through? Or how important is Panama for the chemical tanker trade?

We have a lot of sailings through Panama. So it's obviously a very important transit for us. We have both our trades going back and forth to Asia from the U.S. Gulf and also the trade that we do to West Coast South America is very important. And we've seen even last year -- the year before last, there was also a significant choke in the Panama Canal that has big effects on rates and of course, on the bidding of going through the Panama Canal and even the old Panama Canal gets congested. And so it is important, and we've seen that it has quite significant effects on the market if ships line up outside Panama Canal, yes.

So there's another possible problem?

Yes. Yes.

It's going to throw you off the schedule.

I think Panama has learned from the previous disruption a couple of years ago, where we also saw that there was too little water in the lakes, so they had to reduce number of vessels going through the Panama Canal. So right now, there is more water inside the lakes than there has ever been. So they are preparing for a future scenario of drought. And then if El Nino should start this summer or autumn, I think we will first see the effects next year. So we don't foresee any drought disruptions this year. But what we see right now is longer waiting times because of those vessels not being able to trade out of the Middle East, they are trading out of the U.S. and the shortest way to the Far East is through the Panama Canal. And therefore, there are more vessels sailing through there than there used to be.

One question to the market slide. It's been kind of stable with you and Stolt being the big ones and then someone nibbling, but there's not really been any new competitors. I with all this turbulence, with all these -- are somebody else trying to get in? Are people trying to use J19s or J25s or something to steal more of your cargo? Or is it a stable competitive landscape? It's the same people for every contract been there for 30 years, know who they are?

I can -- so I think it's been a shift to go. You now have 3 very clearly largest operators with Stolt and with MOL and ourselves. And a lot -- there's been a lot of consolidations if you look at from where the market was 10-plus years ago. What we have seen is there's a lot of new entrants that have bought Chinese-made 25,000 tonnes, which is sort of the replacement of the old J19 is now a C-25. I think a lot of those ships are now up for resale. They're trying to -- and I think there's a good chance that those ships will be consolidated. And of course, they were ordered at the time when the market was quite different. And as we tried to explain earlier also that that the -- of course, the market has improved, and we saw also the chart where you've seen that the rates go up quite significantly. But a lot of these operators are involving themselves around trades from the Middle East and to China. And with that market almost disappearing, it's very hard for them to trade. So I think there's a good chance that although there is an anticipated deconsolidation through new entrants with this Chinese tonnage, a lot of it will be absorbed on the back of lacking these trading opportunities going forward.

And just to add to that with C-25s, they naturally belong, as you say, in the Middle East, Asian regional trade. And it's also hard for them to shift to the Atlantic Basin or to the U.S. Gulf because they are -- a lot of them are Chinese owned and then you bear the risk of U.S. port fees, of course. So if anything, we've seen a shift from Chinese operators away from U.S. Gulf into Middle East, Asia and then.

Exactly. And to add to that, of course, 25,000 tonnes is actually too small of a ship to trade between U.S. Gulf and Asia. And that's -- hence, our strength in the American market has been around the larger tankers that we have. You saw the average size of OTL fleet is now 35,000 deadweight tonnes, which is much more suited to the trade that we do in and out of the U.S., which is the benefit in the current situation.

I looked at this medium size, you had the biggest order book there. And my thought was exactly around this. Is that replacement of J19s, which were below 20? So when you really look at where they're going to be deployed, the order book isn't so big after all that it's ships are getting a little bit bigger, you're replacing the J19 with the J25. Is that why it's so big? Is that a hypothesis?

That is certainly a big part of the explanation, yes.

But could you use those J25 ships if you got them?

We can use J25. I mean it is our biggest single tonnage segment today is the 25,000 tonnage. And the way we trade is that they, of course, our strength is in the big tankers, but we see all the spillover effects and we take advantage of the positions that we have with the larger tankers in the 25, 000 segments. So it's a very important segment also for Odfjell. And we've grown that position, but we make sure that, that growth is piggybacked on the bigger ships and the customer relationships we have through those vessels.

Anyone?

Just a comment on -- you said that we have a big order book. The big is a relative word.

The biggest among the 3. So, 9% still relatively big, it was bigger than the other...

For simplicity, let's say that we have 75 vessels. And let's say that average lifetime of these ships is 25 years. That means that every year, we have to build 3 vessels simply to maintain the number of vessels. And then if we also want to maintain our market share and the market is growing, let's say that we add 1 vessel simply to maintain market share. That's 4 vessels per year. And then if we want to also provide a slight growth of our market share, that's 5 vessels per year. And today, over 4 years, we are building 22 vessels. So it's more or less what we need to show strength and maintain our position in this market.

I agree. My comment was to the slide that the 9% of the medium versus the other 3 sizes. But yes, that's a very good point. And I think looking at the order book or the deliveries, that's a perspective that's easy to lose. I think most of us thought, oh, that was a lot of dividends being invested in new ships, and there's another story to it. Are there any final comments that -- are you guys going to come with some final comments? No. Anyone here who wants to have a final say, Harald?

I think what I just said was a..

That was super. In order to be in there and fight, we need equipment, absolutely. Thank you.

Thanks to all of you.