EGLE - Earnings call transcript Q4 2017

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Operator

Greetings and welcome to the Eagle Bulk Shipping Fourth Quarter 2017 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].

As a reminder, this conference call is being recorded. to Officer call of like Vogel, to now Executive Chief Eagle would turn over the Gary I Bulk Shipping. begin. may you Sir

Gary Vogel

Thank presentation quarter I to morning. I encourage supplement you, to access today, and everyone the to welcome slide our would remarks Eagle is earnings XXXX like fourth participants call. that To Bulk’s good are These on inherently future today will discussion our of part our of and risk website available to guarantees forward-looking subject at statements statements. uncertainties. that performance not www.eagleships.com. and Please note are include

on reliance You place and and performance these not more refer a risks should condition. our Please financial for that our bearing to Commission filings undue detailed operating Securities on the results, uncertainties forward-looking the of have and with our statements. discussion a our may Exchange direct

Index. Our is in certain discussion including in for measures reconciliation non-GAAP financial EBITDA and financial the earnings and Please Securities a is information to call. EBITDA, concerning Exchange comparable our that the the agenda release will It Supramax presentation adjusted financial throughout measures. Index noting today’s turn measures, Please we slide worth appendix to X today, the most refer for the with the and to include TCE. presentation more to non-GAAP or that also Commission XX GAAP BSI BSI now of also reference Baltic basis the filed

fundamentals. by on brief on business. our update a a We proceed with quarter review update our fourth an will provide followed first you industry of detailed Then financials, with

as strengthening fleet quarter, adjusted consecutive compared BSI continued while shift. superior balance day approach of strategy able outperform Please Index note for any outperforming sheet. the generated I’m active its BSI ability on quarter $XX,XXX to TCE during up some to execute. to per the for and to We commercial teams X; successfully the Eagle been very the actively home then achieving quarters, the for Eagle the and by standard execute fourth fourth or slide for to with open fleet the performance to market will conclude the now our development turn a renewing TCE $XXX questions. pleased closing remarks business and makeup the when Baltic Supramax to our we’ve management the thanks that four call

than of outperformance For has or quarter per hit an than X.X% compared XXXX, year EBITDA we the first our an approximately market and annualized adjusted as the more on $XXX Adjusted low, delivered an of BSI. more to of basis. the when Since first quarter day fully the double XXXX, four-fold the all-time versus totaled XX.X $XXX drybulk EBITDA quarter-on-quarter ’XX. increased million by million

DVB and of Ultramaxs’ the very equates in existing was price, fits a our years. that spring fleet. Bulk points of we carries and and facility we as fourth and a In Greenship renamed strategy in London the and ABN the margin which of terms it of built and XXX the we with a the for represents growth during the five our with with vessel the have an financed upside approximately an and AMRO, a same XX% constructed continued same Crown-XX acquisition The and new almost SEB LIBOR acquired renewal Eagle. nine which attractive to million, Ultramax, basis to XXXX the from on London sales well new plus executing yard purchase, is purchase quarter has of design place last with maturity is Eagle cash I as been We reported recently compared transaction. believe at acquisition a hence purchase debt, to level The of existing XX.X loan

million XXX we and reduce expense that report on years XXXX to also approximately rising XX% the fourth five debt effectively rates push per by of coupon or Lastly, to debt. any I’m the to million all fixed interest allowing very of or turnaround pleased a debt eliminated exposure almost $XXX during completed us quarter, refinancing have our approximately annual interest year. by $X our on Through issuance to we a total bond, of million significant

quarter thus appears further timing the basis employing a Please first performance. our increased our rates on X as of for annualized starting to compared Our commercial we XXXX over the November from slide savings been good, performance priced interest have short discussion $X BSI to far. on depicts onwards. turn to a in XX slide since The TCE approximately by of bond X the have chart as term million points

market earlier, in to As during is of trending that falling I up, for able The the increased a been significant to market tends fact the XX% so considering validating straight almost period able market four the the the achievement achieve lag market. been versa Typically it mentioned a market vice now, operating we’ve to our commercial methodology especially performance outperform through believe rising and do rising to is when market. we’ve to challenging when a when performance by quarters I in Eagle’s ’XX, a and team. so

$XXXX to amounting current or flow equates our day for with in year-on-year business the results realized income including is million the million As party per improvement FFA roughly chartered trades the net $XX.X the a to TCE positive. and from achieved per outperformance hedging. reminder, as from a incremental basis P&L a approximately day ’XX our our count. cash third XXXX well This significant contribution from rate during bunker The XX.X we own from the as fleet our improvement TCE $XXX fleet in to of incorporates fleet a

up market in our to it that worth available this, where over maturely with the Chines spot mid-February representing over I’m of pleased of our Having for outperformance spot BSI ahead, since a Looking QX. TCE of XX,XXX. quarter, first we’ve $XX,XXX, in report our now trend current per has said New continued noting that Year move approximately days XX% fixed measured against is the as to generated is now day $X,XXX outperformance the to continued the BSI has

So our potentially continues convert revenue fixed expect relative increase, that the of market to almost in we in may given terms quarter. come levels fully for somewhat the if we’re from outperformance

case we’ve headline the in relative we the the a dynamics and of As Continuing relative this strive performance, on reason down for relative we shift in said a to past, earnings appropriate given a for multiple BSI. this is for is us day, a at such is all looking important to approach. while the metric yield. what theme companies involved The performance, higher TCE each comes we of benchmark or every our believe for quarters with more over believe and the most

achieving of cash-on-cash really deadweight both vintage because on ton return. of a TCE This is a so A will it a because provide earnings a day better For Ultramax deadweight say a probe on the the example, higher capacity likely has be Ultramax the consumption. deadweight is of per better XX,XXX Chinese larger its TCE same fuel XX,XXX than on may XX,XXX appear XX,XXX Chinese more and while solid and Supramax expensive number. a a to Supramax based

five $XX year a generic the will year million, As yard Ultramax from five Chinese an XX old the however old cost same Supramax costs example, million. only Chinese around over

an in need same than the basis. on near order to more will approximately Ultramax the differential to the generate return this Supramax unlevered Given X,XXX

of specifications As we’ve only Ultramax by previous TCE to equate look converting fleet calls, Ultramaxs’ we in vessels, to results those approximately them similar discussed would modern an our Meaning rate. our to another of acquired at if $XX,XXX. way with $XX,XXX to recently TCE of is year-to-date a equivalent our operated

is to the platform. on slide Eagle creation believe the X While turn now of TCE a clearly ability it theoretical in for value a inherent this the makeup Please Eagle’s figure, I performance. commercial demonstrates discussion

bunker the approach we’ve As calls, us These different as active X execution allow management our a chartering in vessel business trading with of FFA’s maximize dynamic third number on arbitrage; The strategies in historical party on previous opportunistic to our performance. chart days. time to of a include hedging voyage a end encompasses a with swaps. business chartering users, explained and focus TCE chartering, depicts fleet slide

a charter which vessels from and commitments order with vessel from dislocations, in X,XXX arbitrage quarter, operate representing cargo of During various the to on optionality. voyage of opportunities cover fourth take vessels distinct in to we market We these XX chartered had approach owners profit other structured days. on advantage a creates total basis deploying asymmetric

which model a a owned as and which business our brief risk management designed and It’s add to ago. operator makeup. defined our active TCE define slide for Eagle executing X have on to commercial multi-strategy XX years strategies for Please incremental on fleet on and been years team approach two approximately brought staff fleet’s owner Our our basis. turn manage on to over profile core revenue update is a to an we

the left implement show On of began and since fleet. our the fleet our we to of to strategic the slide, development a summary plan improve of side makeup our hand we renew own

our upgrade generate fleet At new sell taking Eagle’s vessel sold a to XX of and and approximately years. tons months the years forma older we the vessel XX,XXX to and will over more overall in fleet ability purchase. XX,XXX eight time, a a on Ultramax average past TCE require deadweight improve in you with efficient New averaging the the about of we we averaging equates we XX same pro makeup In and sale ship, of ton Each over at As the efficient age incremental AVOCET and age. now XX,XXX note, or XX years Supramaxs of of smaller, days annual acquire total purchase over time nine an performance. total age Eagle London and our over this regard, three deadweight just a less larger consideration

peer On of composition company. our profile the group we depict right fleet slide hand side by X,

and we have efficient largest and fleet scale Supramax asset efficient you focused fleets. more a and one I efficiencies large developments, and the I’d will uniquely ones. to selling date and grow on our who purchasing to on continue achieved the across operating we fleets less continue Eagle it that review provides as the executing owns to call in class the taken older As is newer to Eagle component and have result note, simply like intend position while business we act a of opportunities. this to Owning performance. this our turn homogenous on In now financial versatile consolidation model, and is Ultramax steps world. fleet believe market the in renewal which exist growth our don’t to ships operational necessary off mixed Subject to will regard, Frank, over With strategy,

Frank De Costanzo

of net turn Please and Revenue quarter an quarter a slide XX million, commissions Gary. full XX% the fourth prior for fourth you, for year XX.X of our Thank increase to from financial XXXX was the of quarter. summary results.

of For Operating XXX.X full from year of from XXXX. XXXX, the the an was of XX quarter was revenue million, for expenses million, an X% quarter. fourth the XXXX increase prior full increase XX% year

XX% expenses prior loss loss of full excluding XXXX, year quarter, driven were the fourth million, year-on-year from of to expenses. the For quarter. impairments. company of as in increase voyage full net million an The chartering million was year a XXX.X the and by a increase of in XXXX, XX.X XX.X operating net the vessel The compared in reported when

debt, QX million. extinguishment Excluding the X.X net expense from of was non-cash loss in the

net for the quarter in XXXX. of million was the loss year net loss a of a year loss to in a XXXX For registered XX.X company the share QX full of XXX.X versus $X.XX fourth loss as full million, XXXX. $X.XX XXXX, Net per of compared

$X.XX. at extinguishment loss Adjusted debt, XXX% for Excluding net million QX increase of prior the quarter. XX.X the EBITDA fourth in in a of was share the per came an non-cash expense from positive in quarter,

measurements from in are full adjusted will walk measurements; of of million million on adjusted non-GAAP EBITDA can in In additional you appendix, on you XX.X XXXX. information and from million. up to came Both XX.X the EBITDA presentation. the For slide million EBITDA XX.X positive our loss net XXXX, find adjusted non-GAAP at EBITDA XX a find year XX.X negative of

cash facilities million debt bank for December cash balance XX reduction X offset in of replaced facilities the to positive million and transaction turn blue December X.X of liquidity. XX of liquidity our net revolving availability facility an certificate bars undrawn in slide cash provided from the approximately The in by total as cash, of XXX.X now of for had Cash year company reflect XX million. available million QX. in XXXX December XXXX facilities. million the revolving with excluding and is on availability down starting from and XXX a from cash XX, overview assets undrawn equivalents as in deposit XX.X chart operations. generated The operations certificate XXXX, was a XXXX slide was explained total from and and in company’s of bank XX, million of is deeds facility the new can flow to as with Let’s due million along of sheet the in upper deposit bars XX.X liquid and capital. X.X new an of XX, the The purchase bonds, be while reported of the to deposit XX.X the time is operating XX.X upper largely operating revolving Cash at the the balance chart XXXX working comprised end lower and debt million review was part show million QX. million availability the XX of cash prior Shipco XX, in million covered, by X Norwegian QX only operations, $XX.X less I X.X for turn million. the cash a was credit million refinancing from is from number XX.X The full decrease a and revolver XX for in to positive the by quarter The the XX million million old slide facility. than Total activities retired of comprised liabilities, million cash of million of just changes of plus XX largely grey quarter Ultraco million. liquidity of flow; total Please by

variability in difference of the the the operations. You days and in XX blue grey variability The over between from regards expanding can in working time; that million out cash see $X.X introduces the cash capital QX we evens to to bars. January first the received

of in let’s look balance Now look and are large the a The at bars lower proceeds net expenditures debt The lower left, of the positive the out cash give bars changes good the large the the year lays million EBITDA middle in move repayment operating let’s the close this driving to at take adjusted on revenue that simple vessel like really the it is sales I and our (inaudible) the chart two our XXXX. results strategy. in comes process. XX financing us feel because on over full which The chart debt right deals fleet four in bars to slide number. equity purchase, chart our XX, a financing, company’s the cover and two and for the renewal program supporting clearly operations.

QX from XX it to note breakeven QX, QX. is OpEx in G&A our slide results. upgrading look cash no includes important performance payments breakeven than of to expenses, to the to Let’s breakeven that Also a cash average. came higher lower XXXX items appropriate modelling year we XXXX. $XX is XXXX certain under fleet now day. and than day, $XXXX, related line full per but advance nature at QX coatings. the QX. given There such the hull with stores in largely in QX is per in up drydock ship as XXXX OpEx in $XXX both Cash XXXX came expenses per review multi-quarter expenses equipment of It related at annual vessel and flat at lumpy day number in for OpEx think were QX with per $XX ship $XXXX, to and per per

higher interest the of down prior debt, be day days, in year bond, In QX $X,XXX result with had per been additional QX ship G&A [pick] fixed if at chartered we XX per the Ultraco XXXX, day. If included $XXX non-cash from would days chartered ship elimination in along per full higher per of G&A a higher is lower. coupon XXXX expense over at note. ship year in Cash expense $XXX. the for have include would is interest rate we chartered quarters day, full per just vessels. Similarly $X,XXX. QX came per $XXX in For the as we XXXX, $XXXX G&A

per For debt around OpEx our made discussion be $XXXX ship, G&A all up breakeven my XXXX, assuming per $XXXX, $XXX, per fundamentals. G&A ship $XXXX. I context service and of per of of OpEx and day. provide concludes and day numbers This drydocking of the unchanged; will to the review of continue will financials. business remain of now The $XXXX his turn of back who Gary, industry would call the

Gary Vogel

trajectory BSI you on turn of the the demand continues and upward improving slide fundamentals. Thank XX; its Please Frank. to back supply

deliveries quarter quarter-on-quarter from ending harvest January of Higher we’ve the On slide ending delivery XXXX. BSI demand with deliveries new Year averaged pressure average, supply December each vessels fourth December from younger since on and of market building to actually prior is each puts in have gross the owners seasonal with having calendar delayed February Chinese that the market Typically a vessels where has on which by and push grain whereas on been from mid-February. through above from the by December January market supplemented December market the is period the Feb period also December American of XX, as note and level. having XX the arrows benefit XX% back has due to year significantly change depicted year. the aside the risen one currently ship historical in XX% year, the from the highlighting has lower of by up to holiday month past depicted January X% North order of Xst increased higher is red by place overall New $XX,XXX, a is taking For to since to impacted season in years, which this falls BSI, the in in the a the phenomenon and which BSI is the in in interesting rate year-on-year. particularly sits about X taking improved This X What a the its to recurring paper. recovered in over the three significantly the

XX XXXX XX remain have extreme showing a levels $XX,XXX. and improvement, indicated from is when they fundamentals. Gross update XXXX around new although Please turn excluding Even XX% supply brief downward totaled markets for quarter historical on low relatively to its continued the million quarter-on-quarter. XX are we roughly X.X continues average previously, deliveries the As of rates at a perspective. year historical approximately high tons supply for decrease fourth or trend, of vessels, a building slide during deadweight

decrease For the X.X amounted the almost million prior Demolition tonnage as XXXX or year. tons of of older are down the deadweight XX roughly deadweight tons. representing XX% full a XX% on deliveries prior of over vessels, year to compared to during period based the quarter

year For in rate full scraping be general the down to something is ’XX, environment. improvement expected approximately given XX%, the

building year [CL]. were demand the supply XXX net ton. reduction is lightweight for the approximately of led I growth an Although indicative and for this ’XX, in significantly believe are rates to around deliveries now down scraping of fundamental in to have macro continued year-on-year new improved X%. Scrap increase per

in XX the according and the act that rate water levels, the Notwithstanding we older improvement, of probably Given of believe expectation Ballast for X.X% million our coming expected years. will implementation demolition the XX the Sulfur scrap about tonnage be for treatment XXXX on-the-water a of as catalyst as million we scrapping continued and and well XXXX in as tons between regulations both believe environment current deadweight price will fleet. market

but there historic note In remain was that to of near terms levels orders, building uptick XXXX, important lows. in an it’s new

book number we we at material order XX%, fleet increase of that book remain on-the-water ordering we of of low indicated unless As given have order previously, Ultramax is not percentage just historically a factors on-the-water rates remains cautiously dramatically. the optimistic and will level the of The just a a fleet. as the X% in see improve

for less for the the continue well ships side slide Looking will are demand rates to with of getting We ahead, for next growth. supply summary this we years turn and fundamentals delivered. believe on XX favorable couple less market a bode to believe overall. and Please

All the enacted positive. to impose almost for this X% plans For drybulk signs normalization economies. conditions by point on effect tariffs government surpassed while iron the X% just certain both for and first economies. of and There expected with and producer world’s is coal and as last of in compared stimulus X%, XXXX, positive boost and to has aluminum ore GDP week fiscal attributed slow increased bauxite which for to other US XX, are to US announced to growth but Tax XX%, always witnessed X.X% is have steel the other China be enacted in as around many ratio that the of also over global nations. scrap in where exports something historically appear and and by has X.X minor It been well should growth policy growth to number increase ongoing uncertainty imports, reduced to demand if reform largest during domestic to by importantly the XXXX, few the have X%, Strong to over years a traded turn world ’XX. fertilizer is demand XX%. trade evolving. negative the steel of including of since imported including including to other will about borne in the to be X% has drybulk global to yet about a that increased XXXX just by projected US GDP. X% at US for X as a to now from GDP could growth last which improvement different watch of grain drybulk bulks and we X.X% highlighting details thanks just have demand commodities by is reached steel demand time the by fundamentals IMF This from the be represents by a this bulks major against can especially need steel figure growth or as macro retaliatory actions as Please X% slide the financial and US disclosed ’XX over measure advanced

borne back China major expected has iron X.X% demand XXXX a on In for the terms iron is be consumption of such to strong ore of ore. demand total over in driver reached been continued approximately sea in X.X represents tons trade. of China, domestic iron the tons. which especially billion ore metric drybulk with XXXX XX% global billion is production. growth major also of and bulks X as Chinese China the in coal estimated for the approximately usage world largest an consumer metric of

which only to now sourced than in an China XXXX, This growth non-Chinese of at derived attributed ’XX, almost wealth global Please now from borne salt, recap. trade. in are expected our in metric Petcoke. uniquely cargo a the to bulks economy believe products an X.X%. equates rate demand more Global although expectations GDP grow approximately India, is the represent which million these reasons. a XXXX. carried with to about improving in in trade major Eagle buyers. growing to and world’s on one-fourth overtaken million we metric to and Growth seaborne tons or on carried capitalize of whose turn ’XX XX% by major has XX is bulks XXXX. grow is minor a to expected the expected X.X slower have about bulks in from reach to to grow to coal XXX as X% with representing more most Eagle from market positioned X.X% Contrary increase However XX% rise grain impressive by to relying of the XXXX much year-on-year and XX% for cement, This Eagle XXXX. cargos number representing fertilizer, X.X% imports increase an to drybulk Minor XXX for final bauxite, trade as XXXX. continued domestic in ’XX compared throughout almost particularly are for scrap a expected producers ’XX, slide fastest remains We base with of in diversified tons of representing consumption of of gets sea is China’s important

Ultramax in risk drybulk focused highest their adjusted earnings we segment. minor the commodities perspective. carry major a both able Supramax and all most to Firstly, on tend vessels to vessel are essentially types versatile from Since of bulks,

provides in different addition, asset efficiencies vessel class across one don’t In exist operational which for simply operating types. just

Secondly, This employ we are management services done ability full between higher drive successfully active We administrative gives operational, us shareholders. all management management an revenue. which TCE strategic, optimum and technical where approach an commercial, to maintain ensures structure alignment the company, and in-house.

have one leading industry the representations which industry recognized been of and within independent best our We Board we’ve corporate the governance. for majority is

the a one have delivers sheet running We management operator business owner a balance record most has value. which proven have we model and And and strong in active one with teams experienced ample business, liquidity of the dry that powder successfully for track growth.

over XX leverage XX,XXX have we as considerable with have days. we illustrated Finally, owned slide or on operating XX, ships vessel

to graph lower rates the cash given cost market. the spot ability to we our As ability have market as different a BSI day. our fixed significant net The cash $XX,XXX in exposure XXXX with structure XXXX and to historical rate equated environments depicts experience to average generation from flow in per new generate such, improve, the flows net low

to cash assumed On conservative these calculated forecast we’ve order in flow our In not rate. various ships be base our of XX as market owned we’ve cash rate current XXXX net out performance. fleet any and breakeven our environments,

adjusted basis for year BSI $XX,XXX As currently Jan-Feb shown the XXXX at December the actual curve, and FFA through the is per day. March net

cash net scenario, an on generate flows could annualized Eagle million rate over basis. this Given of $XX

rate Operator? the our to expectations Eagle of to over that of net well leverage I’d turn demonstrate XX,XXX may XXXX answer to a call The the XX fundamentals. purpose medium maintains. million. improving operator now questions increases operating this term, on near is have. a environment, the flow are slide another and Based on and to cash would I market inherent any the simply believe like the capitalize we positioned to Assuming you

Operator

the question our Global. line Seaport Instructions] Fyhr first [Operator of with from Magnus comes

Your line is now open.

Magnus Fyhr

sorts Just the group. in quarter? what booked think looks the time ships about a your chartered first looks point Have quarter you’d number in you Frank strategy. I BSI at and It had to like in first looking all the as one very first the mentioned ships peer increased you the the compared on question quarter attractive chartered as in days outperformance for the XX of in. of far

Gary Vogel

terms what charter before, mid-quarter positive fleet we business. unless income on not in from We supplement we’ve we’re there at benefit said in But net a for more are not driven our net providing in. the words, generate income the having end year. In It’s ships basis. as of volume of based to don’t they is other doing a guidance charter

for opportunity So that it. will its our dislocations therefore its we ships in opportunities market in charter as we part we us as methodology and based. do and I of you volatility as the tell and see

that to said business So mid-quarter But we’re continues not trend it’s higher that. develop. to overall I to continue you’ll that as see platform fair guidance on say the I think as

Magnus Fyhr

now the mix you your you at to forward? is strategy continue stock strategy, kind so feel buybacks do what’s trading allocation going your right you discounts far of capital the as fleet, dividends interesting to fleet your to think you debt. NAV, expand the hear the three you as ships, priorities sold the in older or the refinanced XXXX, what big to over some have Moving of or in What’s

Gary Vogel

We about we for it cash allocation a positive at the look positive simply volatile flow of recently and we’re dividend, we best and although only way the use capital market, what constructive shareholders. are premature we’re us is think talk in for the capital is it’s the to on The business.

develop in to ship continue the also as We the we built of terms the you know acquisitions, XXXX fleet acquired fourth in quarter.

at the looking capital obviously so also consolidation as in industry, We’re takes well. and that

business last an our all and asset. and we keeping in think we a summary, on presentation the and record our at forth So the the consolidator this set options custodian demonstrated stage. we think Eagle we’ve We reasons track ideal good the are that based do is we’re that open of year the for over

said, but entertaining dividend ship I But day stage we larger look at --. not we’re do to do forward from as the individual policy. we’re acquisitions that to looking this we scale, at So everything a

Magnus Fyhr

and mix, the steel to two of that Can XXXX. question, currently cards that bit the little in showing besides an wild role forecasted? grain talk versus commodities tariffs, wildcard than one important just in you your them coal may in numbers about on XXXX growth And XXXX play some are cause these higher a slower of be last both

Gary Vogel

great there’s near term. right, a thing, a in medium visibility That’s Sure.

for there Also based are within significant indicated cards. mining of different from drivers. domestically, token as source is main a terms On the the its power has which inefficient particular which to major and a most coal to shipping indicated therefore have of also Coal card generation, of the has them supply forth, different other in India China China demand and side is good but lot coal coming back that well with economy, in their bulk transportation so there’s out, coal the a the India minor wild that of is by Those in cleaner has coving surpassed intention we fastest they same to clearly as and supply go continues growing dangerous interesting, – has their and now they’ve upside. mines continued as India, is right derivative lagged of because but that in supply think or number although many and potential is to upside imports wild on segment sources. especially there our spread is intend couple the of mines,

of for crops America terms that of so in have and haul out South grain for us. well clearly bode will We long coming record trade

One (inaudible) the grain of it the from powers which have vessels position oppose to benefits particularly to South well closer from comes whether Gulf as ability to terms of longer the US, the Ultramaxs’ or Supramax America, for the there in we distances. to ships our as is and

advantageous bringing in US Brazil to US US a in us the potentially and way. the we trading gives more Africa down a to are So Gulf the near West advantage or competitive cement continent whether with or from its ships fertilizer. that by It to ship then in Gulf the in taking to the

Operator

next of our the will line question And with Fearnley. come from Espen Landmark

open. Your line is now

Espen Landmark

the curious on is [grain], that. base [ball-plate] where and the on opportunities past you the the currently I operational of so terms the on numbers just mentioned see you in side, to the in Just provide Eagle distributed know some didn’t

Gary Vogel

this fleet we But operator, decision a our important we terms We’ve proprietary fleet past is. of show think the there’s see We’ve the done group as I some our tell in put competitive is Atlantic, for remains where quarters. it’s back made our that. think is end, that. I the peer to the of that in starts real that coming pull we of that because competitive. we fleet model reason we’ve the I’ll think value because and in spread we as an emulate owner you to our to majority will our of haven’t we in best it specifically see that active decided say

in that speak of our as the money being the owner us remains where now For there to a be Pacific And of for the at course and But But to in spreads determining you. fleet baseline, so is lets still that it as to okay, or the is or of is and given it mean our as terms There’s crop a part likely fleet be Atlantic, of go I that well. the on decisions have to table but of widens whether in good as a it Brazil narrows contrarian. it’s general our opposed and what obviously majority of premium. entire an place opportunities crop. next position as historic off lot simple I’ll to from fleet rate. active the leave not based where that that’s most that’s other Atlantic, operator in take will this it’s remain

Espen Landmark

firming of mentioned day. Ultra’s and a Chinese Year actually rates kind since And been New you fixed then we’ve of at seen XX,XXX being couple a

consider you kinds back, those than would attractive cash of fixing your I vessels like an more a margin you at day seems levels? of would X,XXX – a Given mean which have

Gary Vogel

rather selling answer likely monetizing assets that very are our revenue is look we repaired a can is and or But especially the the can question, most terms the which more buy user which the as its the hedging. and then it ship a benefit liquid optionality a its answer also operator improves out, sense in at believe with having key two the we cargo yes, talk re-let deem multi-strategy FFA streams. of at having and premium But That’s first and gives hedge. is ship market an now trade in cash be the certain back, re-let streams and more of that we ships. market what can our that is, historically them end FFA’s part. our Could can to them but that as we revenue ability unlike charter we what now, the through cargos approach in pays and if we booking ship we we’d lock dynamic believe a time a index. demonstrate when in about fair premium the building to we the our unlike ships a it unlike we charter likely can we having book competitor the to cargos is only ability a one one out we had, our But ourselves in we that in to That’s we’ll the for strategies ships, lack and of out just hedge us trade because that premium if flow the comes the

because to use a premium to a or equal and have longer wants premium or we rerouting but if someone ships also if pay cargos what market we FFAs, something you, and preferred look we’ll being contracts be a coverage deem position they to book us definitely much than is the of at. reload we we have things all So do to and want where

one-year, not option XX that and X XX to this you give a out, I one think And really, an reload to them. active simplistically to to months. we as its giving an operator, pointing months worth someone it’s represents get when like terms, like that it’s options XX typically something In general you’re also very out for not else. ship too

our flows. it’s gaining So another that, go-to-move in reason first why re-letting ships terms is not of not something cash

Operator

Mehrotra Bank. of Deutsche line And our next Amit question will with come from the

now Your open. line is

Chris Synder

This I’m is Chris Synder, for Amit.

term segments market. could industry. relative unavailable Have Ultramax with sale just at, trying noticed and last strong when guys so was, debt strong sellers the to with to it guys year on look think question consolidate the the and sense year. starting purchase first the on balance make the we were note. have late my trying question relatively you maybe near London to Obviously no Supramax you for my the New is guys assets a and to And maturity, push you So to you sheet the do guys

Gary Vogel

pretty been flat have markets that S&P the think I since time.

that it’s having a of and I looking said uptick level are that to in have reported, sellers a think that. we material can the but not and an that I’m it believe price sure said we asking vessel raise market. at we attractive purchased terms get dynamic seen always Having

So S&P push year-to-date expect continue as would since that if as that characterize an up, far to but we market, QX. have the so I impact rates flat and would will on it

Chris Synder

to it’s steel a impacted what most on be I what size follow-up, of any asset as like percentage by small the sort the trade. was then wondering negative steel like ships of would And kind drybulk know just trade, a trade? I of of class, relative overall headwinds the but

Gary Vogel

terms the Ultramax, Supramax would and mostly don’t finish do is of trade steel. through handy and finished in some finished about a that talk primarily and you but size up again on lot sized steel being tonnage Supramax, steel geared handy If of

Operator

question next line the Stanley. with will our And Morgan from Ciares] of [Max

is line now open. Your

Unidentified Analyst

model Supramax highlighted to guys you does does what wondering, and in the in it offer of fit Just for preference arbitrage? your Ultramax, kind that maybe commercial advantage kind of how

Gary Vogel

as bodes clearly I of have that America and very carry a around the when value them, in XX-XX the cargos the we transparent. our more you. we coming opposed whether can are and to to minor ship as day vessels fact to ballasting and to sized we size, the very create model majority what personally fewer short the Also The of larger well. are I market, to less hard There’s in The ship much Australia Asia routes China. it’s operate do and believe South or said, transparent a open that bulks and opportunities transparent smaller bringing a the or Gulf take the most within myriad have the there’s things market

with operating it in when call better from to let’s to really Ultramaxs So been that have I trading smaller the said to we partial, particularly Asia felt since also opposed out midsized able you’re say a Brazil haul and carrying interesting started I themselves much opinion loading like ballasting participates that closer some Handymaxs my area, something on a most cut fertilizer even because in you with Brazil to I way. in the long haul doing always now to as I’ve And although lend much trades. the am trade and Panamax, long that, to Having model. compared is what clearly the a sizes in the cargo participates, ship XXXX grain, to the long this position

is as it’s to like bulks, able major carry trades on that that being a well positive in major So of larger as really bulks long and minor cargos, all combination combination. haul participating

So be Ultramax why is continue really and we that on and Supramax I’ve focused to always the segment.

Unidentified Analyst

activity switch year? last this characterize market, this, New how versus an Chinese just pickup I do If the year you to could Year over guys for

Gary Vogel

on till lagging, been was particularly new we’ve year also Year, in there’s particularly saw strong, New all the definitely as seen and ore particular Chinese come of coal less it’s too was come the has a bulks this delivered number we get last early quickly up on of where year the think the been that buildings minor that’s in a it, and but of not very Jan-Feb. not supply year. that’s surprisingly What iron in sense surprising I pick strong, Asia in the that’s which And in top quick really well. part back

highlight stronger was arrows, start, graph that’s believe why three we really higher of period while also with not a were form December feeling because – also it but from indicative We’re is wanted that it look off it thought to you we the February we back just when to in really terms market the the it’s we to see of stronger.

Unidentified Analyst

out. one just But on then if tariff the what Aluminum, you the I Chinese don’t it guys from And kind more exposure know you to of regulation? guys, broken for Steel India is US,

Gary Vogel

more it a what to down is, year, lot only US, of – over year-over-year. other significantly export think export steel. Chinese so and X%, of infrastructure steel but the seen Chinese about steel we’ve the its X% the XX% about I over to last a US, years their steel they’re was using little own for

and a driver, talk of is as if of about earlier, what I itself, and next and gets in this comes in just But retaliatory terms what fact wait more that. exemptions about really that huge see you, in have see measures. it that terms so I implemented a there in moment So concerned was think as potential of mentioned yesterday don’t

Operator

And Noble question next our will line with of the come Poe from Capital Market. Fratt

is now open. Your line

Poe Fratt

‘XX the see in of the need last is one over then bit, so. XXXX of a get and a was talked the to are think conditions closer questions, or little that to and that about that ’XX? you course you Just your couple XXX target a to BSI What to premium quarter I range

Gary Vogel

talked clarify, what to was improvement the of we XXXX. deficit a about from the terms XXXX, XXXX in to which was Just

you. So and that were our the was it was putting year ’XX we model, the but developing process first lagged in market, as in have out team, rising place building a what

to revenue performance underperforming, as we booked day the the the your let’s – a over rather until whereas volatility So far I’ve target enable What order Well above because market what a when a have us, dynamic. in outperform order what revenue ship each flat of the quarter. as the point outperform, is, don’t I’m every market right as say outset say outperform XX do in or then by your goes because I which have and that than some said a need was the first all, But having promise, I’d market day, market days, under and to let’s better this fixed of market market marginally helps. although dropping, a a joined happens a market decisions. to and like you level XX It’s rather and that us up, But it that the flatter have fix that in of us said if sense index and course goes I’d deliver. is that that? $X,XXX our to in for is significantly gone market, maintaining from oppose over and fixed at flatter on it’s to higher the you or said you’re if should the we market actually to outperform Having ability the although we as make need is to have relative outperform day up $XXX last for trade for that the what is go right. like you to you stream unchanged,

want where ground an doing by put a opportunity and/or put the and stake comes this we can arbitrage we that so ship in up. to is say our And

a cargo, a instance, six in market but is weeks. stronger particular decide but in to or the get US we we Gulf, For if think we that going that’s Gulf of to the out have ship think we carry going

can stronger other free words market the loss, weeks. we much breakeven, a to a going in at in So at maybe to but from that’s get few market, up ship next charter another for a the ship our maybe

else that us. it’s more opportunities anything than So for the volatility that leads

Poe Fratt

looking have of at will And to you balance your at treatments of and of sort if when schedule, we all? your potentially water sort is for scrubbers highlight then this you the drydocking installation your at ’XX drydocking when sort and no looking scrubber and Can scrubbers see – stance how at you ’XX. going look on

Gary Vogel

do you now installation and change. assuming if of service. it, do idea to CapEx going to doesn’t and therefore well So of it’s be to amount scrubber installation implementation XXXX. be the out were it drydock, you to a But would it’s in of would right date statutory is of do ship advance of the December the be already scheduled Obviously that significant it most significant of around likely where a

So studies. continuing for doing us do as we’re including a in company, the engineering, of midst analysis, to analysis feasibility

go that As of number aware that in a to you’re there’s decision. variables

of sea the low in diesel, spread system called One allowance and discussion ones and marine an some future sulfur discharges is regulated. primary could the fuel the loop what about also for whether the the between which cost there’s is the be sulfur some to at point open

but that’s think a the to decide believe fairly We we’re approach the that delay there’s the around unlikely, We going be about or things the vast change which of lot are or that it air. is the sulfur So – prior a there to going there’ll do cautiously in significant up majority always us is now. fuel don’t whether There’s seems XXXX are install that right low to decision fleet we regulation. that. scrubbers fallback to burning clear to of and the

Poe Fratt

you Supers going timing of up is do tonnage. and values And think selling versus that potentially scrapping since the are you I asset years are stance markets XX maybe with to old. up have probably What’s of over be potentially the older growth an growth but are focus, on the then some XX strategically and sort

Gary Vogel

louder and I what is I say think can both believer good, you on we’ve I’m growth words you to execute know, while growth continued and a is is actions are see what bit would than here renewal.

our geared will of We’re of years. to in candidates larger have that is excess sell significant value at they scrapping scrap older believe don’t sell to I and continue for premiums trading age are tonnage scrap The None further a average but significant that ships XX life. assets, and we think we would change.

scrap a for we impact ships, on overall of pricing an path an clearly that us. that or as values has but So option as don’t see older

at made as that require trading So having and are they we’ll the so decisions in to are assets isolation and said it if well, at to in these not continue we vessels well. we to ability concert, prices, ships look have sell attractive as continue

Operator

questions in And the queue. I’m showing further no

pleasure conference back Chief Executive some Mr. So or remarks. for I’ll now comments the to over closing Gary take to hand Vogel, the Officer

Gary Vogel

have nothing today. we Operator, further

everyone to thank time everyone like So good wish for a I��d day. to participate their taking and

Operator

conference. Ladies and for your the gentlemen, you may today’s wonderful This day. conclude all and a on disconnect. thank you program Everybody does participation have

Eagle Bulk Shipping (EGLE) 6 Mar 182017 Q4 Earnings call transcript