d'Amico International Shipping S.A. (DIS) Earnings Call Transcript & Summary

Good afternoon. This is the conference operator. Welcome, and thank you for joining the d'Amico International Shipping Third Quarter and 9 Months 2026 Results Web Call. [Operator Instructions] At this time, I would like to turn the conference over to Federico Rosen, CFO. Please go ahead, sir.

Hello, everybody, and welcome to our earnings call presentation. As usual, I would skip the executive summary and go straight to the snapshot of our fleet. As at the end of September, we had 28 vessels. Now this number is actually 27 as we delivered to the buyers 1 vessel that we sold that we announced the sale of during the year The High Tide was [ delivered ] at the beginning of this week. So currently, we have 6 LR1 vessels, 16 MRs. At the end of September, this number is 15, 16 Handys, plus we have 10 ships, 10 vessels under construction, 4 LR1s with expected delivery in the second half of 2027 and 4 LR2s and 2 Handys with expected deliveries in 2029. Young fleet, 10.2 years average years at the end of September. Also at the end of September, 96% of our fleet was eco. Actually this number now is 100% following the sale of the vessels that I've just mentioned. Looking on at our bank debt situation, the usual graph that we show, we've been quite active in the first 9 months of the year. We have voluntarily prepaid $59.2 million of existing facilities, and we had new drawdowns and new financing for a total of $75 million. Here, the goals that we have been trying to achieve was; one, to extend the maturity of our bank debt. At the end of last year, we still had quite a significant amount of debt expiring and maturing in 2027. As you can see, we have no longer that situation. The gray part of the bar show you the debt expiring each year. And actually, as you can see, the next net maturity debt expiring -- the next maturity debt is in 2028 of $3.8 million, quite a small amount and we're actually already working on that. Also the other goal that we had here was to reduce our average cost of debt given our strong financial situation, our increased credit rating, and we've been doing that. Actually, we've been refinancing some facilities carrying a margin over SOFR of 200 basis points, 220 basis points with new facilities at 140 basis points, 130 basis points over SOFR. Moving to the next slide. As usual here, we provide an outlook on the last quarter of the year. As you can see, as we speak, these are figures stated as of last night actually. We had 59% of our days in Q4 fixed on time charter at $24,200 a day. We have 25% of our days in Q4 fixed on the spot market at an average of $62,129 a day. So overall, the sum of these 2 components would entail a blended daily TCE of $35,500 a day or 84% of our Q4 days. So it looks like an extremely profitable quarter ahead. We also ran a sensitivity here on the free days so the unfixed days should we make $40,000 a day on those days, our blended TCE would be $36,258. Should we make $45,000 a day, it would rise to over $37,000. Should we make $50,000 a day, we would make almost $38,000 a day of blended daily TCE. Moving to the next slide. Up above, you see the estimated evolution of our fleet, given as you know, the newbuilding plan that we have with 4 vessels, as I mentioned before, expected to be delivered in the second half of 2027 and the other 6 expected to be delivered in 2029. One thing that I did remind you before is that we have also exercised the purchase options that we had on 2 bareboat chartering vessels, High Explorer and Fidelity. One of these 2 vessels was delivered already at the beginning this week, while the other one will be delivered to us in mid-January 2027. So at the end of this process, as you can see from this figure here for 2027, we will have fully owned fleet. Potential upside to earnings. This is the sensitivity that we have for every $1,000 a day that we make on the spot market. Of course, for the days that are unfixed at the moment that are free at the moment. And this number is $400,000 plus or minus on our bottom line for 2026. It's obviously higher for 2027 at $6.2 million and even higher for 2028 given the lower coverage that we have right now for that year and the amount is $10.4 million for each $1,000 a day on the spot rate that we achieved. Down at the bottom, you see our estimated net results on our fixed contract days. So this means that assuming to ran the rest of the year for the unfixed days at a breakeven level, we will make $152.4 million of estimated net profit in fiscal year 2026. Should we instead achieve an average on the unfixed days of $20,000 a day, then our potential net result rise to $154.4 million this year. Should we make $35,000 a day, we would be above $160 million of net profit for this year. Should we make $50,000 a day, then our net result would come close to $166 million that we're showing over here. Next slide, on the cost side. We had a daily OpEx cost of $8,347. Here, we saw some higher crew and insurance costs compared to the same period of 2025 and this is something that we've been seen during the year. G&A, we had a total cost of $22.3 million in the first 9 months of 2026 higher than $19.2 million we had in the same period of 2025. As I mentioned several times, this is really the reflection of an increased variable component of our personnel cost, which is obviously the consequence of the very strong financial performance that we've been achieving so far. Financial results. Moving to the net financial position at the end of September 2026. As you remember, we achieved for the first time, a net cash position at the end of June 2026. We increased this situation, this position even further. So at the end of September, we had a net cash position of $56.6 million or actually $58.3 million, excluding some residual effects arising from the application of the IFRS 16 with cash and cash equivalents of $265.4 million. So the ratio that we always calculate, which is the net financial position to fleet market value ratio was actually negative as we are in a net cash position of 4.3%. And this figure was, as we always say, as we always like to remember, was almost 73% at the end of 2018. P&L income statement, we made net profit of $107.2 million in the first 9 months of 2026. Net profit for Q3 was $27.8 million, so considerably better than in the same period of 2025. EBITDA came in at almost $146 million in the first 9 months of the year with an EBITDA margin over total net revenue of 64.7%. The total net result, as you can see, includes also a positive result on disposal of vessels of $5.3 million, which mainly comprised a gain on the sale of High Seas, which is the vessel that we sold in the second quarter of 2026. Next slide, key operating measures. We achieved a daily spot average of almost $41,100 a day in the first 9 months of the year. At the same time, we covered 63.2% of our days in 9 months at an average of $23,400 a day. So overall, we achieved a daily average TCE of $29,900 a day. This is, as you can see, considerably better than in the same period of 2025 when we made $23,473 on the spot market. We had a lower coverage of 48.4% at an average of $23,700 a day and our blended TCE was $23,583 a day. And passing on to Carlos.

Thank you, Federico. So we continue with some strategic considerations and then an overview of the market. Regarding our CapEx commitments, nothing has changed since we presented our half year results. We have still the commitments relating to the 10 newbuildings to be delivered to us in '27 and '29; 4 next year and the remaining 6 in '29. Overall, the investment for these vessels is around $512 million and outstanding commitments represent $425 million. We have now exercised all the purchase options on our lease vessels. The Discovery was delivered to us on the 2nd of November. And the High Fidelity was exercised and should be delivered to us around mid-January next year. And through these transactions, we managed to lower our breakeven rate by substantially reducing our financing costs. On the TC-IN vessels, we have also exercised all of them some time ago already. So nothing new here, just showing that the delta in price between the market value of the vessels as at the end of September and its book value has risen to $90 million from $57 million at the time these options were exercised. The TC covered rates and the TC coverage percentage. Here, we show on the left the annual figures; and on the right, the quarterly figures. We show that for next year, we have 38% of our fleet covered through fixed rate contracts at an average rate of $24,600. And on a quarterly basis, we show here the coverage for Q4 of 59%; and then Q1 next year at 54% and then declining gradually during the course of 2027 to end at 21% in Q4 next year. The rate is a bit stronger in the first quarters of next year, and then declines, but stays at very profitable levels for us also in the second half. As mentioned by Federico, by now, our fleet is 100% Eco following the sale of the High Tide. So very competitive fleet, good contract coverage, leaving, however, quite a lot of space to benefit from the current exceptionally strong spot markets. Possibly, we would increase a bit the coverage for '27 during the next few months. We will do that gradually and at very attractive rates, hopefully. Period rates as we will see are very strong now. And here we go. Here, we show the spot market rates, the yellow line on the left graph or MRs, which is again at record levels, in line with the levels reached at the beginning of the conflict in Iran. But what is interesting is also that the period rates, the blue line is instead at an even higher level than it was at the beginning of the conflict in Iran, showing a lot of confidence by market players that the spot market will stay at very high levels throughout next year. So -- and that is because irrespective of when the conflict in Iran ends, which, of course, has been the fact which has been generating the exceptional markets, which was layered upon many other factors, which are already supporting the market, irrespective of what happens there, there's going to be a phase of stock rebuilds, which is going to be pretty long estimated by analysts that to last between 12 and 18 months at least, which should support the market. Of course, the longer the situation continues with Iran, the longer we are going to be benefiting from these inefficiencies, which are present in the market right now, and we will then still have the stock build phase later, which will also support the market. So a very strong outlook. The fundamentals have improved over the course of this year. And that explains why period rates moved up and are at a higher level today than they were when the conflict started and also why asset values are reaching record levels. And so we are now seeing here the 5-year-old vessel values, which are pretty much around $50 million, so costing more than newbuildings or in line with newbuilding costs in Korea. So it's -- and more than newbuilding costs in good Chinese shipyards. The 1-year TC rate for an Eco MR vessel $43,000 and for an Eco LR1, $60,000 possibly, even more than that. So inventories, they have -- they came down a lot in the beginning of the war. Now as we see at the bottom -- the graph on the bottom left, since August volumes transiting Hormuz have gradually risen. The last 4 weeks average is 15 million barrels per day. And on the graph on the top right, we try to compare volumes transiting Hormuz before the war with these flows which have been transiting in the last 4 weeks plus what our estimate of the flows which have been redirected, the additional flows here. It's the delta. And the additional flows which were prior -- relative to volumes which were being exported through these ports prior to the war, Yanbu, Fujairah and Ceyhan, and another 3 million barrels are coming out of these ports. So overall, our estimate is the loss of flows as a result of the conflict in Iran is currently of around 2 million barrels per day. Considering there are additional flows, which have been reaching the market from other locations in particular, the Americas and some demand disruption, we feel that the market is currently quite balanced and further drawdowns in inventories might not occur if we continue seeing similar volumes coming out of Hormuz. Why has the Persian Gulf countries been so successful in exporting more? Well, it hasn't been, thanks to a more peaceful attitude by the Iranians. The Iranians have continued attacking vessels. Estimates we were provided is that around 5% of vessels crossing Hormuz are hit somehow, some suffering more serious damage than others. But the one important driver has been the fact that the national oil companies of the countries facing the Persian Gulf have been building their own fleet. So they have -- they went out into the market and bought in a very aggressive way, old tonnage in particular that they then crewed themselves. Rumors are that these were crewed with militaries and coast cards that is not confirmed by these countries. But it would explain why they are able to convince the crews to make such dangerous crossings, which has enabled them, as we see here the shuttle volumes. The shuttle tankers are the vessels which are mostly controlled by these national oil companies, which have been transporting a great portion of the oil transiting Hormuz. For crude, we are in September at 52%. We see here the evolution. The first country which was active in this respect was the UAE, then we had Kuwait, which came in and then Iraq in August and then most recently, also Saudi Arabia, the red bar here has been more active with these shuttle transits. Of course, there are also some private owners which have a bigger risk appetite, which are transiting Hormuz. We are not, and they are paying big premiums to their crews to convince them to undertake such dangerous voyages. And instead, well, another disruption that, of course, has been very important for the market has been Houthis. The situation has improved through the course of the last few years. But once again, the Houthis became more aggressive. This time, however, they have been targeted more specifically Saudi Arabian interests. So other shipowners have felt comfortable returning through transit in Bab al-Mandab because they are not targeted by the Houthis. But vessels transporting Saudi cargo or controlled by Saudi Arabian companies are avoiding such transit and which means that part of the product is -- which will usually have sailed to Asia is not from the Red Sea is now finding a home in other locations in the Mediterranean to avoid having to transit the strait. But those cargoes that are still destined to Asia are opting to sail a much longer route around Cape of Good Hope, which is very positive for ton miles. Russian refined product exports declined dramatically recently following a much softer decline in the first few years of the Ukrainian war because of the attacks, drone attacks by Ukraine to Russian refineries, which has been much more effective at curtailing exports from Russia than has been the sanctions which were imposed by Europe and the U.S. More recently, this agreement between the U.S. and Russia, which would allow Russia to export certain amount of diesel to the U.S. through a waiver of sanctions could lead to a slight increase in such exports, but it is being questioned -- the legality of this waiver is being questioned because it goes against legislation approved by the U.S. Congress, which prohibits such exports. So some vessels which were destined -- which had loaded in Russia were destined into the U.S. have already turned around and are not going to be delivering the cargoes to the U.S. So, in any case, if this agreement were to succeed, unless it is expanded, it is not expected to have a meaningful impact on the market. Refining margins for certain products are still at record levels. You see here diesel in particular, jet fuel. But surprisingly, these are the commodities which are mostly talked about. And so most people are aware that we are starting to face severe scarcities for these commodities with prices, of course, also having risen significantly, which explains these very attractive refining markets for these products. For gasoline, we have seen actually a different trend where refining margins have fallen recently. Diesel and jet stocks in the Atlantic Basin are very low. We see on the graph in the middle here, well below where they were last year and over -- at any point in time over the last 3 years. This situation means that there is a very big difference in gasoline prices between the East of Suez and the West. And so we see that this delta in prices between the West and the East has risen to very high levels, which opens very attractive arbitrage to buy products in the East and sell in the West, even when -- even if you have to pay very high freight rates. So this is very positive for the market and which means that there should be more imports by the West from Asia and over very long distances. So very positive for ton miles. What has been helping also the product markets over the last few months has been the resumption of exports by China following some restrictions imposed at the beginning of the war in Iran. As the crude availability improved because of the rising prices through Hormuz, China relaxed the restrictions and volume exported CPP volumes from China rose to over 1 million barrels per day higher than they were before the war started. There was some concern that these volumes could decline in the last part of the year. But recently, the Chinese authorities provided a fourth batch of export quotas to its refineries and mostly its state-owned refineries. And so unless other restrictive measures are introduced, given the very high refining margins, the expectation is that we are going to be seeing quite healthy exports from China also in the remaining 2 years of '26. What happened with sanctioned oil on the water? Well, it has declined very rapidly. There were wavers provided to Russian and Iranian oil to be sold at the beginning of the war. Iran, in particular, has been because of also the embargo, which prohibits it from -- which is stopping it from exporting more oil today has been drawing down the stocks very rapidly. But as these stocks terminate the impact of these sanctions, these embargoes on exports from Iran are going to be felt more severely by the country. And I think that is probably the plan, of course, of the U.S. administration in pursuing this tactics, which they hope are going to allow it to reach a more favorable peace deal with Iran in the future. How much more pain has to be inflicted in Iran before a peace agreement, which is more acceptable to the U.S. can be reached? I don't know. It is a question mark, but there is this possibility that especially because the alternative of strikes doesn't look very viable and that this will be the route pursued. And if that is the case, and this situation were to continue for some more months, that could be extremely positive for the product tanker market. The number of vessels sanctioned continued rising over the last few years, mostly thanks to additional sanctions by the U.S. Of course, as we know, the position of the U.S. has been more volatile and unpredictable. But these vessels, which have been sanctioned -- sanctions enforced also by the EU became stricter over the last few years, which makes it harder for them to trade, reducing their productivity and limiting them to trade when they are able to do so only within the sanctions cargo. So it's -- and of course, to those countries which are prepared to import such sanctioned cargo. So -- the situation in Venezuela has also been very positive for the market. This oil, a large portion is being exported to U.S. refineries, which were built to process this heavy Venezuelan crude. And the expected ramp-up in production in the coming years in Venezuela will also be positive for the market that this oil will be transported on non-sanctioned tonnage, whilst previously it was being transported on sanction tonnage and it will be transported over long distances. So the additional output that would be hopefully coming out from Venezuela should be very rich in ton miles and if a portion of it ends up in Asia. For now, it is not particularly rich in ton miles because a lot of it is being absorbed by the U.S. refining industry. But it's also positive that Venezuela is importing more naphtha from the U.S. because it is a very heavy crude that needs to be diluted for it to be transported on ships. Just returning on the issue I was mentioning before, even if this oil were to terminate in the U.S. given the incremental production that we're going to be seeing in the future, this would still be positive for the market because it would free up the U.S. to export more of its own oil to more distant locations probably in Asia. So it would still mean more oil from the Americas going to Asia. So the ramp-up -- the expected ramp-up in production in Venezuela should be positive. And this here is an important slide because a lot of the strength in the product tanker markets today is coming from the crude markets. The freight rates for the product tanker markets, as we saw, again is at record highs, period rates are like [ records ]. But what we are seeing in the crude market is unbelievable, as these rates are really, has skyrocketed. They moved up vertically for the Suezmaxes, but also the Aframaxes we see here, which are hovering over around $300,000 per day, which is much higher than the already very high rates, which LR2 vessels can achieve, which explains why you have had this migration of LR2 vessels towards dirty trades in the yellow line on the graph on the left with this decline in LR2 vessels trading clean. So despite the LR2 fleet having grown by 110 vessels between January '25 and October '26, the number of LR2s trading clean over the period has declined by 120 vessels. So that means that since these are also the larger product tankers there are, that there was a decline overall over this period in the product tanker fleet trading clean, which explains that -- it's one of the reasons on top of those, which we mentioned previously, explaining why the product tanker market has been so strong. And here, this is on the bottom left, this graph here is also important because it shows the additional crude that will be coming from the Americas, the yellow line there. So it will be transported over very long distances. And there's an expectation that there's going to be an increase in exports from the Americas to Asia of around 3 million barrels per day between 2025 and 2030. So that should be very positive for the crude tanker market and should help to absorb the additional tonnage, which is going to be coming to the market, especially on the VLCC and Suezmax space, which otherwise would be a source of concern. The refining landscape, this is only up to '27. We see these additions in the refineries in China, Middle East and other Asia, which is mostly India, with the closures that we have seen in Europe and in the Americas. So Africa is becoming a more important player and Angola has recently also announced a plan to double the capacity of its existing refinery before the end of the decade, so which would increase from 750,000 barrels per day to 1.4 million barrels per day. And they might also be building another refinery of a similar size, around 600,000, 700,000 barrels per day in the East of Africa and Kenya probably. So yes, so these changes in the refining landscape continue supporting ton miles in the product tanker space. So they are positive for our industry. Here, the fleet, some statistics relating to the fleet. We show the percentage of the fleet, which has more than 20 years of age. On the left for the MRs and LR1s is the blue line, and you see that it has risen from 16% at the end of '24 to 20% at the end of '25 and it reached 22.5% at the end of October this year. So if you look at the figures at the end of '25, the increase in the percentage of vessels which are more than 20 has been faster than the increase in the order book, which rose from 14.4% to 16.2%. So despite the renewed interest in ordering vessels that we have seen this year, this was more than compensated by the aging of the fleet, which should bode well for the market in the coming years. The situation is not as rosy if you look across all tankers, if you include also crude tankers because there, the increase in the order book has been faster with the order book reaching 26% of the overall fleet with especially the order books for the Suezmaxes and VLCCs, which are above 30% and the 33% mark having risen substantially and posing some concerns for the future. What is positive here is also that vessels, of course, they don't disappear after they become 20. They are usually demolished around 25 years of age. That is the case for the most product tankers. Actually, if you look at the larger crude tankers, the VLs and the Suezmaxes, the average demolition age has actually been lower than 25 and sometimes closer to actually 20 years of age. So there is a lot of space for vessels to be demolished starting in '28 and until 2035 to compensate for the vessels that have been delivered. And that is a very important factor, which should mitigate the acceleration in deliveries that we should see in the coming years of tankers because of the vessels already ordered and because of the vessels that will likely still be ordered in the future and as we are also seeing, unfortunately, an increase in shipbuilding capacity in China. So we see here that in the first 9 months, there was quite a lot of appetite for ordering MRs and LR1s with however, the order book, the percentage order book has not rising that much because, of course, in the meantime also a lot of MRs and LR1s were delivered, which left the order. And here, we show how the fleet growth should be accelerating. But this is the overall fleet growth. If you look at the sub-20 fleet growth in '27, it's actually much lower and across all product tankers, we are -- actually, we have a slightly negative fleet growth in the sub-20 fleet in 2027, and that is also very positive. And finally, here, we show the NAV evolution. We show that the NAV per share has risen to almost $12 per share and the overall NAV has risen to $1.4 billion, around $1.4 billion from around just over $1 billion at the end of '25. So a big increase in the NAV with the shares, however, still trading at a substantial discount to NAV, especially after the correction we have seen in the last few days, which we struggle to understand personally, but maybe in anticipation that a more Democratic Congress in the U.S. might lead to an earlier termination of the conflict in Iran. I'm not so sure that is the case because the conflict in Iran will terminate likely only when acceptable conditions can be reached for this conflict to terminate. Otherwise, the situation we have today with a market which -- oil market, which is pretty balanced and with all these flows transiting through Hormuz should be something which is manageable for some more months, especially on the oil market. I must say that the situation on the gas is more concerning in that respect. So -- and that could have more serious repercussions on the economy and might be a factor which forces the U.S. to accept less favorable terms earlier to end the conflict to normalize the situation in Iran. In terms of dividend policy, we have been increasing our payout ratio over the last few years, and we have reduced our debt ratios. We are currently net cash. And we have announced now an interim dividend of $40 million, which was approved by our Board today. And our expectation is that -- with the payout ratio today, our expectation is that the payout ratio out of the '26 results will be at the same level as it was in 2025, so 55%. But of course, that will be confirmed by the Board and then by our shareholders next year. So that is it, and I pass it over to you for the Q&A.

The first question is from Matteo Bonizzoni with Kepler Cheuvreux.

I have 3 questions. The first one is the following. How important were the ship-to-ship transfer in the Gulf of Oman to support rates over the recent weeks and months? Second question is as regards to the supply side. So the order, as you have said, have reached 16% of the circulating fleet. And in Slide 31, you show that in 2026, the net fleet growth was pretty, pretty contained, 0.8%, but next year should accelerate to 3.8%. So maybe a little bit of color of what impact this could have on rates according to different scenarios. You have already commented, but maybe if you can elaborate more on this 3 percentage points of net fleet growth is a sort of concern or not much? And the third and final one is on the dividend. I have calculated that based on the net profit 2026, your earnings per share should be not far from $1.3 per share. So in case you should distribute a final installment in line with the interim, you should reach around 50% payout on your net profit. Is this correct?

On the STS, let's start with the STS first. The STS has been important. The absolute numbers have been growing. But actually, the percentage of the volumes transiting as STS was actually slightly lower in September than it was in August. So we have seen also more direct cargoes being transported from A to B. So I think that the most important thing here for the market is that volumes continue transiting. And in that respect, I think that the market has been doing quite well here. There was a bit of a dip in the year, but the trend has been pretty steady of an increase over the last few months in the volumes that have been transited and this despite a very aggressive stance by Iran, with a lot of vessels being attacked, but often not severely damaged. So they continue transiting and some have had to stop for repairs. But you also have some private ship owners, which are attracted by the very profitable voyages that can be performed if you are prepared to take the risk to transit the straight and they are doing so. So they have organized themselves and have crews that are prepared to take this risk. They are paying these crews more. And so this trade has developed. And despite the volatility that we are seeing, it has ensured quite a lot of oil has transited. What we're also seeing is that once in the beginning, all the ship-to-ship, the large majority were occurring in the Gulf of Oman. More recently, we are seeing also some ship-to-ship activity occurring in more distant locations because there were instances of attacks to vessels while they were performing ship-to-ship transfers in the Gulf of Oman. So these -- the fact that these transfers are occurring also in more distant locations makes this trade even less efficient and it's also positive for the market. So that, I hope, provides some additional color on this ship issue. On the fleet growth, it has been -- yes, I mentioned that it is accelerating. If we look at only MRs and LR1, it's slight more than 3% -- slightly more actually than 5% if we look across all tankers next year, that's assuming very limited demolition. But what is important is that the fleet growth in the sub-20 across all product tankers is however actually negative. So you have more vessels turning 20 years, more deadweight tons, if this way my metric, turning 20 years next year, then you have deadweight tons of product tankers being delivered. So these vessels as they cross the 20-year threshold, they start being employed on more marginal trades. Of course, they don't disappear from the market, but a lot of them went into shadow fleet trades, sanctioned trades. But there is a limit to this sanctioned trade. Of course, Venezuela was one of the areas where these vessels were being employed and this is not the sanctioned trade anymore. Russia, of course, is an important sanctioned trade, but if it is done above the price cap, but the Russian exports have declined substantially. So there's less room for sanctioned vessels there. And so this over 20-year-old market for vessels, which is going to get quite crowded in the coming years because of the aging of the fleet, which is going to be reducing the profitability for these vessels, reducing their productivity and encouraging their demolition. So a lot of charters have the policy not to charter vessels which are more than 20 years of age, the oil majors in particular. And some terminals also don't accept vessels which are more than 20 years of age. So I think that despite you cannot only look at the overall fleet growth, which could be a source of concern for next year, you have to look also at these other nuances. And if you take these other factors into account, then the picture looks much more favorable for next year. And, finally on the dividend, I think that the market is very strong right now, right? I think it's typical that we provided some sensitivity on the Q4 and the fiscal year results for '26. So assuming $50,000 on free days, our profit for the year would be around $166 million, right? And this is not something -- usually, we use much lower figures here, right? So we included a higher variability here in the sensitivity this time because it refers also to '27 and '28 where -- especially '28 will be very hard to predict what the market is going to be at that point in time. But for '26 in particular, we are actually -- we feel that $50,000 is not really a stretch. We could potentially actually do better than $50,000 given where the market is today on the remaining free days. So we could potentially even do better than $166 million, right? But assuming it is $166 million, then 55% of this figure here would imply a dividend next year, which is higher...

$91 million. $166 million, it's $91 million.

$91 million. So it would imply a dividend next year of around $50 million after the interim dividend of $40 million.

The next question comes from Massimo Bonisoli with Equita.

I have 2 questions. One on the current trading environment. You have already fixed around 25% of the Q4 spot days at roughly $62,000 per day. So can you give us an update on where you are fixing the remaining spot days today, particularly in MR and LR1 and whether current market levels are still broadly consistent with the recent $70,000 to $80,000 per day market indications? The second question is on the coverage for 2027. Given the strength on the spot market, at what TC level would you fix? Or would you find attractive to lock in additional 2027 coverage? What is the hurdle rate here?

Yes. Thanks, Massimo. Good questions. On the spot, yes, the reason we mentioned just now to answering Matteo's questions that we are quite confident that we can do $50,000 on the free days, it's not a stretch. It's that today, we have a few vessels on subjects, a few LR1s at much higher level than that, right? I mean the LR1 market today you are still fixing around $100,000 per day. And then on the MR2, and that's why we have our exposure because our MR1s are covered. Yes, it's between $60,000 and $80,000 per day, I would say the market today, right? So it's still very positive figures. When the markets are so strong, it's difficult to predict how long they can stay at these extraordinary levels. But if they stay at these levels for a few more weeks, we don't need them to say for very long, then we will basically have fixed the rest of the year, considering voyages are fixed around 1 week earlier to 10 days or sometimes even and then it takes some time for the voyage to be performed, right? Sometimes they are also quite long voyages we have been fixing some vessels on some 50 days, 60 days voyages also. So yes, so we are quite positive for the rest of this year. The setup is very, very positive for the market. And I think that the outlook is also very good for next year. And that's why the period rates are so high. We will look to take some more coverage on some of our vessels. We will try to do it gradually because it's -- although period rates are high, spot rates are so high that by fixing vessels on time charter, you are sacrificing a lot of upside, and we already have quite a good coverage for next year. But I do expect we will fix some more vessels on time charter in the coming weeks and months, bringing this coverage for next year to more than 40%, maybe closer to 50% in the coming months. And then we will reassess our strategy and see whether we want to raise that coverage further. But we are in the market assessing opportunities all the time. But -- so yes, but we are not jumping on anything because the outlook for the market is very firm for the coming weeks.

The next question comes from Climent Molins with Value Investor's Edge.