EGLE - Earnings call transcript Q2 2021

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Operator

Greetings, and welcome to the Eagle Bulk Shipping Second Quarter 2021 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 Chief and of Bulk like Vogel, to Financial now Eagle Executive Chief Frank Shipping. would turn over the Gary Officer I De Costanzo, Mr. begin. may you Vogel,

Gary Vogel

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

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

second the of commodity steel. years. a carry, especially strengthen in and such across decade. and manganese in the financial Exchange adjusted to certain in level second Please Our EBITDA, continued the not back levels discussion appendix quarter, information spectrum, filed includes our Commission and also cement, XX,XXX presentation the adjusted with TCE today Supramax financial than measures The and non-GAAP the and ore, GAAP earnings non-GAAP XX% and net now demand Eagle quarter for more almost Please on reconciliation the highest for net grain by to index Securities to EBITDA release to robust cargoes drybulk comparable most turn concerning as a and rose out market The the the in slide the for segment the X. Baltic during income, measures generated quarter TCE. refer infrastructure-related for we of the a more the including financial XX seen measures. midsize

rising effect BSI we market majority rapidly year performance up of The its voyage there's XX currently inherent around at experiencing, the lag BSI the as is is our existing of environment on highest books the have employed an on TCE days about our the to Given is lasting between at commitments been level XX,XXX. fleet we've and and the

short approach Given be our and to ships, trading successful continue of relatively active capturing the majority the exposure on duration up our management we move real-time to basis. a our

third we available at today, day. As fixed for the $XX,XXX a per our days of of around quarter, TCE of XX% net

the a exposure, prefer to generally some as utilize the lock provides in in basis. to forward we to due hedge and selective means us FFAs charters time we've on revenue a of While to increased with, form optionality elected

XX $XX,XXX an vessels deadweight minimum iterative we of day As fixed XX,XXX for our to this commencing months Supramax October. in per XX example, one earlier week, months

Given the XXXX. September of Please least turn deferred X. delivery, this charter slide until will stand to at

the three prior This to from operating the as chart, of we growth. quarter producing XX. increase of results, see quarter. million our quarterly can sequential ever And ending EBITDA in best terms In the June XXX% of an EBITDA the for represents achieved performance, fourth significant months $XX.X you compared it's

quarter, of to to of revenue cost QX. slide line. the $XX.X net to our income compared Please fourfold adjusted essentially the all an incremental business, net for up nature realized turn million fixed the of flows We second as Given bottom X. the

vessels occurring against of dry increase that beginning It's around old values and XX% early have months transactions. at pace in increase also remains the first over over continued run the the rate would six-month on prices XX-year asset at months, an sold, the year-to-date. chart the past and XXXX potential is This the upside. bulk their for values Notwithstanding, approximately super to eight quarter, years, XXXX bought over slide remain an of highest indicate significant noteworthy today's up on annual of prices recent XXX XX XX% this percent represents almost the increase last Supramaxes in to there with the implying Spot bulk are have is the levels. also being Asset in cycle. the XXXXs second been to levels mid-sized were a still one asset record rates XX-year dramatic prices dry increase but rates in charter in when Year-to-date, well-discounted high, XXX similar ships.

a see we upside return could of to which for to now type the a company. would translate to turn X. values in XX%, increase second-hand XXXX further slide Assuming levels, Please course of

$XX.XX reported as build these of acquisitions, we seven we scrubber XX%. remaining average consideration weighted currently front, issued the up in about in since hand. part the fitted of estimates, quarter intend ships are XXXX fund first for with two on million. acquisitions by a nine fund Ultramaxes to balance purchased acquisition cash total, the total value under By $XX On our separately, we raising second the the In purchased To share. of program, $XX We our ATM at per November. early help million equity about

by years our to To purchase $XX this fitted part and water we Supramax our due pending in SMP delivery value of weeks million. ballast forma Pro totals Frank, taken for who over the review While just a and X.X to date. turn, installation being late now deliveries, six our financial to and scrubbers we've of remaining like performance. our with the fleet renewal, Together, XX will XX mid of call to ships, statutory a date, on just deliver ago averaging agreement Separately, increase expected I'd an the ahead we XX%. between of With build with XX% that, turn represents September. sell up three dock dry age as XXXX with fleet of acquired August the the ongoing about value the total vessels, over of executed ships are

Frank De Costanzo

Please for instruments. at quarter. in gains net exclude and million for Beginning EPS, quarter, added share, non-cash environment on line a the top to Earnings XX Gary. measures, voyage slide of have expenses second in for basic $X.XX the came adjusted income charter revenue non-GAAP significant a QX an our and summary $XX.X with financial a we both our per was $X.X adjusted you, The Net quarter quarter. increase on income additional which results. on derivative and second quarter this from XX% drove $X.XX or and turn Thank second net hire totaling losses diluted the unrealized basis. charter of improvement EPS in prior of million, basis rate the

to have active we hedge to as management As discussed, Furthermore, part forward agreements for party in we we ships market the third or both exposure charter and FFAs of freight strategy. owned chartered tonnage. our selectively our in utilize

flows, for our synthetically Although not lock in cash accounting. great they qualify do tool to hedge FFA is

losses a As future non-cash unrealized gains mark-to-market periods basis. for such, all quarter on results or hedges on impact current

reflect of non-cash, associated derivative the measures, $XX.X net excludes quarter. adjusted losses for $X.XX believe on on periods, in performance quarter. additional the and only also Adjusted recognition recognized the excluding operating in came timing that second future causing EBITDA unrealized compatibility EPS the income for hedging million statements. in non-cash gains gains the in We gains, EPS, retroactively at are Adjusted a non-GAAP for which thereby the in exclude non-cash unrealized million and better $XX and adjusted income for our prior this adjusted periods, improve net on losses instruments. mismatch unrealized derivative losses However, ships quarter, derivative in presented periods will revenues and the and came losses at of the between basic second Beginning instruments. revenue adjusted gains financial the

believe within the million. operational the QX, at reflects better cash reporting $XX.X change in the above, respective Adjusted generated we EBITDA the coming doubled with As period. in flows

to by I Ultraco revolver, vessel million the Please that $XX.X the XX movements bringing Total versus quarter $X quarter end improved liquidity liquidity from of on quarter from to and slide first decrease liquidity. $XX greater Let's strong sheet ATM of outstanding revolving at credit comprised and availability from of slide. walk will cash program service. in now and cover prior to increase note was of debt million $XX the our generated the as by our the by have our year at million in end acquisitions driven cash subsequent quarter of cash in million compared prior the QX, million $XX.X undrawn cash proceeds end, our we of the the Equity results. remaining operating revolver repaid million. million. of The of from $XX detail balance million year million undrawn cash of end. Total on $XX.X Total $X offset overview representing a and change turn an million an for $XX.X was facility. total end $XXX.X to the to

As previously vessel funded reported, restricted the we acquisition of have cash. with one

In for addition, million totaling new $XX.X our vessels. acquired have secured newly six of debt facilities, we

taken date drawn total five of earnings have call, this and the delivery a we million. vessels of of $XX have As these of of

borrowing. timing for on the quarter. to debt cash chosen the $XX our operations. facility on revolver, third the debt from for The operating second debt, to a facility, our on QX incremental in the provided debt an from the our decrease Ultraco $XXX.X to flow and end flow the capital turn XX million from the working million depicted by Total the the repaid flows introduces driven cash debt the Holdco by RCF from $XX differences cash ops and We due dark from excluding issuance cash million million are million, drew and liabilities of principal repayments have blue on bars activities is bars, $XX primarily gross prior we decrease complete working not strip Ultraco Holdco was $X.X Norwegian assets million debt $X.X overview drew million changes by offset capital. $XX.X that of operations blue light of from at QX. now drawdown variability chart facility which the and Ultraco in $X the RCF highlights bond reported was to costs, we of million given The which the operating strong Net we third slide between the the operations, the quarter. cash out numbers as Please

by collections time. explained quarter as caused slide be received accounts QX the walk. $X.X chart receivables over by XX to volatility bars July. two Although The the working in have tax even of the the XXXX early capital we differences turns timing our largely Please between for as demonstrates can this though million

the top simple bars expenditure the on operating chart focus and revenue The between cash the operations. are QX. which covers at and movements Let's a QX look

quarter be for for the bar million in right, the on X year of covers S&P to margin third the $X.X The on million XXXX. to Moving deposits vessels the of plus two used million acquired movements The represents chart quarter the $XX at bar $XX for instruments. in the $XX.X cash of acquisition million derivative and representing date. paid vessel to collateral cash our bottom the vessels

per $X,XXX in vessels associated slide quarter. came related Vessel expenses ship negatively Let's in the of cost day day. acquisitions acquisition was XX non-recurring sales. to breakeven now QX excluding per cash for for day per came three breakeven into expenses or ship OpEx with per at impacted per second our ship the quarter. per vessel during in $XX,XXX by review Cash one-time the OpEx

QX. to we face QX, the drydocking a costs then to for costs to COVID facilities fewer lower not in compared and higher in protocols G&A continue crew in worth pandemic and day $XXX times worth per $X,XXX about and transportation would came operating our in in including to Cash is vessels, had lodging requirements include day quarter-over-quarter our tonnage. ship higher Drydocking all ships QX, prior driven The Cash came increase in and going at ship water into expense per noting we related per ship related interest ship QX, days in which at attributable was It per If of the G&A flat larger debt per Cash related $XXX day quarter. moment including $XXX number see than as there calculation, $X,XXX stores by are repayments G&A than to $X,XXX. changes for per quarter expenses QX. this drydocking in per is increase now came are vessels our in amortization per addition, COVID-XX to is the We lower areas bond day call concludes semiannually It at calculation whereas increase to which days. In by This share Chartered on $XXX turn valves an per comments. in across day these at debt, challenges we came Norwegian our on at regarding is spares. that like. fleet, we and in that to back prior payments installation higher were significant $X,XXX quarantine ownership the of my QX paid based events. for in higher a Gary. systems do and noting marginally per QX. decrease in abating QX, I own in operate is and per our as chartered likely to principal to in the will ship

Gary Vogel

the of and the period, greater up both to Frank. Please magnitude in XX,XXX. the In over XX% XX. XX% up the quarter the Atlantic Pacific turn much was market being with in average you, move XX,XXX Pacific prior QX, Thank saw strengthened basins, Pacific for the the we up averaging slide while Atlantic rain

the previously, We discussed why time outperformance fertilizer typically in the of we've places but much far reasons the lumber. cargo bulker result rates. market estimate America, on bag chemicals basin primary that of was container spilling parcels, semi happens dry These all Pacific generally containers. steel of increase South higher a smaller elevated trades, saw the a As markets. bags, finished outperformed Pacific Apart carriers in up the we due in cement, XX% to West east one from occurs moving as was market flows including in and from within Coast, to include trade weaker container bags both move cargo time, the to cargoes the into to backhaul US the Europe cargoes significant in like conventional and from

of inefficiencies, container expect year. the part dynamic in which this strength we continue through balance ongoing the due the chain at is least to to in Given market, supply the

from both QX, As higher we the pickup and exports by ahead look Coast America, driven Atlantic South as East once strong market. a traded into outperforming is basins well a grain have again, as Mediterranean in

around such balance and the of turn for bulks spectrum. has has be number demand the months would compared the XX,XXX to Year-to-date, BSI approximately XX. as of with for forward per fact, on minor XXXX primary for oil continued Med best up ago. out, as the is emerged the XXXX. a forward the $XXX salt prices currently exports XX,XXX the slide products. have the cement, averaged now across year. a source to steel Please the increase as Fuel year BSI slag, the since of In plays now trading gypsum, to averaging on XX% around VLSFO increased curve If back XX products tonne, curve of

As utilize of XX% scrubbers we've to is fleet with talked about able previously, are fitted those lower our HSFO. vessels priced and

driver an Eagle. for As and is value such, VLSFO the between HSFO spread important

currently generate so increased, $X,XXX equating have we prices fuel across around per $XXX has level, incremental million and $XX day sits annum. crude time. about around value At and fleet, our the underlying this at to As per spread, per which

surprising XX is period compared vessels offsetting scrapping the year-over-year. down strength market. same the during expect down XXX spreads slightly Looking new the fuel continue about which total of Partially given vessels the supply trend were beneficial a business. The building turn not as to X% the ahead, significantly in to should were figure quarter-on-quarter and slide in prior delivered to to our higher, we be drive increased period. this, total and which XX. Please for a growth XX% during quarter QX, of was Net prices of underlying scrapped

forward at of book X.X%. growth, stands drybulk a low In the terms historic overall just order of supply

stronger down A For ordered drybulk roughly QX, to ships and fleet net down the scrapping year's roughly rate at tonnes, during X.X of period. from last million expected growth drybulk XXXX, is XX previous as as XX% again, are in This were assumes guidance the half to environment. previous of about of come primarily result compared X.X%. amount, total a deadweight

markets, strength and of and still material number Although spot we do will some be for period reasons. the underlying the believe not a it given ordering new expect we

around building XX% prices Ultramax dollars years pay a was need now new to as just Firstly, for you higher are ago. $XX Chinese compared to significantly, about up couple a million

slots with building the new scarce are as vessel addition, In types. orders busy yards well in with segments as with container other

slide As even around call. significant our regulations or such, in finally, since factors believe expectations Please And there's a to will last turn uncertainty Together, today fairly delivered of will unchanged XXXX growth ship remain at likely late limited. only future X%, for XXXX keep emissions regarding we all and XX. these decarbonization. ordering be order Global XXXX. earnings

turn any uncertainty order amounts discussed questions market positive global our growth, With book XX their XX, earlier, improvement looking Operator? and supported have. upward growth optimistic estimated with trade low increase constructive over since that. driven XXXX the is I'd fertilizer, COVID-XX, of global For now growth earnings turn stimulus. record This slide for last which the around we by basis over developments being which to at a grains, we X.X%, may continued requests operator call, XXXX, our revised primarily view GDP demand up IMF the to projection. points. estimating forecasted demand continued or Please Notwithstanding XX for remain previous you been picture, the to by supports prospects This steel. massive point growth has been X.X%, ahead. call and combined drybulk of about in like now has an answer basis is with

Operator

first the with Instructions] Jefferies. the open now comes line remarks from Our line questions. of prepared Giveans we for will With question Randy completed, [Operator

Randy Giveans

how's Howdy it gentlemen, going?

Gary Vogel

morning. Good

Frank De Costanzo

Randy. Hey

Randy Giveans

then part only out I'll at speaking if you a But balancing any probably these currently for well. of again you repositioning good $XX,XXX, Hey. below rate. at and next next day. XXXX of mentioned have that in additional? a as counting XQ Clearly, the the would Is reasons above year quarter said And or morning. for of second come for I XX% $XX,XXX, quite think question, a booked quarter. at levels congrats or guess or say that that, rates you $XX,XXX chartered variances there? about stay stated that at Good on your rates Supermax a appetite TC actual I quarter, is example, day, that you any least one

Gary Vogel

fair a there and the So, the to unpack amount appreciate on words quarter.

you -- So, of I and and talk to cargo whereas directionally have QX decline expect August course, only on various covered would as our being things, it if an compared of all, if first stronger, $XX,XXX, if but the we're And we booking the in market is TCE in the operator we're XX% booking previously. about the quarter, we books in advance when here. we're early

calculation opportunity speculating take XXX% any important, all. of that So And just do it's and we to at I'll -- derivatives lag realized in calculation -- straightforward, you FFA that do addition but can't you're no TCE. spoke TCE separate guess that into to derivatives we that's wise hedges. unexpected, the cover and alluding is current it's books forward. go apply -- bunker on all There's but like go I that's But we thing have The say rate, are directionally, don't hedges. county our to could there's nothing the I speculating in the is actual think have given derivatives you're as And terms say the part about. only the correct, we and of TCE of business that part that our the our of you a the guess I here that actual I

So up to cost up on a risks, the asset anytime a derivative, there's physical notwithstanding matched on side. it's basis a matched it's other

Randy Giveans

Got it.

the time Okay. then on And charter outs?

Gary Vogel

Yeah.

there's do -- have a have, it's And we one look a big the do I is at it's scrubber low for we mentioned. a out. ship interesting, charted Chinese we time. that noting And the don't and all the which worth dislocation moment, that fitted, year, Supermax to from standpoint. of the for the disclose next the but We FFA we between the at but We also value that. charters longest stands things curve I'll to in out Chinese from Supermax other So index. the But say time them. rate still XX,XXXs And year, compared it's a

So trading it's FFA a big at dislocation the curve right now and is discount. that

maximum for value. So we work

all the So year cash the prefer would lock But to typically market next FFA value we is equal, willing and to not do. those to flows we're in things there, when for use being pivot.

have can we We different levers pull.

in FFA charted it reasons, that the we're a And to curve of quotes And of that period it's compelling. losing one at value doing that so although for ship the is the we the number of premium that. that's moment reasons see for the out we're relative

Randy Giveans

Got it.

I guess, then the next And Okay. right. question question and balance for last sheet,

great shape in You're here.

debt to fall. is continuing net Your

do you to that What Is Your after share has grown you of fleet do cash? kind XQ with forward? are do the you going below NAV here. policy dividend XX forma do delivery well that your now repurchases, that maybe what would it start free after a shares pro or the earnings? around ships now With

Gary Vogel

important that where I surprised we returning situation I'm I a clear but dividends, environment capital say the all, that are dividend a XXXX, it's it to needs we're to have question not said we think of visibility clear like of out first a restructure something since mean, that it's we the both visibility, company, this, in have early I when and do policy, sustainable. this it said the Having box, when company. of I to be appreciate there's joined so and times balance a the of number now also mine I way, in strong not meaningful really I've sheet the But think And the goal given been on surprised, first And I'll question. shareholders speak. we to has Yeah. clear of a in.

we -- with have talked ships, know doing about, debt. acquired limited So, still we're delivery taking we've of, as just as we're these nine right, and three you we

taking So and we over do continue debt acquired it, for we're to still them ship now on the XX Supermax the one example, to plus million I that million, these We're is X -- mean, last few be so. as delivered, months, an worth of putting and plus. X we'll Supermax

very So limited debt.

clear I important think So I of delivering, what so, I we're a balance deliveries, delivery dividend, sheet cash we're topic strong some we're fact, focused of we're we're I buyback once in be strengthening – putting it's deliveries not question the an with alters financing we we've of so allocation, said that – flows, going of the an the through think is that, these visibility any and capital on, think we'll substantively share it this or these I'll to – given taking whether watch But address appropriate kind think space. position been forward. and delivering. end Having and in finalize

Randy Giveans

Okay.

Keep watching. work. the great be will We you. up Thank

Gary Vogel

you, Thank Randy.

Operator

Omar from Clarksons Our comes from next question Securities. Nokta

Omar Nokta

you. Gary, Frank. Hi, Thank Good morning.

Gary Vogel

Good morning, Omar.

Omar Nokta

the I just very you a taking nine much mentioned wanted a and at healthy I Eagle as point. sort it think Randy's to little them acquisitions stronger Hi. a have guys in. of press on question. built But up guess, bit vessel company And obviously, a about follow-up sorry we you maybe do to this into place just

capital, maybe, then should or next to of three out – of these share going guess – we three vessels these and that we're you're take got either forward, I I to what going guess. take is dividends? next potential more to and more three you pay waiting once it buybacks, the returning figure addressing whether out buy more dividends those should or to going done that to the is or buying take it's is You've thing and from okay, What ships, going get I capital, that, return in-house vessels ships that be do then we're

Gary Vogel

mean, would say Yes, I fair. way. that's it I this

to want I this the to feel need acquired. point. would vessels I ships that done. we're significant appreciation. really think I to given say there's comfortable the that not very don't a we're a But There's to focus think – value. ours never not appreciation it's been of acquire add we've but number, to nine it's at continue that with go, we in we more to right And significant now that potentially a

I of quite that, there's an to wouldn't, deliver. the like sold and So don't course I to that if – But need don't ship that comfortable opportunity pursue feel we we older XX pro that. one the to want want with ships, said, then we I including the exclude forma

yes, at stop there. I'll it I'll that. But yeah, So, leave

Omar Nokta

And in wanted clear. follow agreed that's appreciate you then I is one no, Yes, I that, just of Gary. just to back to up. Supermax the that noticed buy February.

doesn't any very initial go where to relative good looks you've third things I know, got a risk that was concern the guys but that into window delivery today. that, that think at And until price, deal that May, I through? into slipped the quarter here. any are or through read

Gary Vogel

we Yes. late place for – delays in the the because at of delivery August. operational delayed within but observing, And and next fact, the weeks expect and take are to compensated delivery, got we actually the few And being quite that ship port. load within

it's you definitely So But I compensated the late. for know, being answer as that the said, is, agreement. we're under

Omar Nokta

Got it.

Okay. Thanks, clear. Gary. That's

Gary Vogel

Thank you.

Operator

comes question next from with Lewis Our BTIG. Greg

Greg Lewis

you. thank Good Hey, morning, everyone.

Gary Vogel

morning. Good

Greg Lewis

in, guess issues? that, port that? Is you you of stuck wondering any I just whether been about piggybacks And kind of kind about, there being back vessels any And it's Frank's of kind just, any of because drydocking. going on in out it's comments that. being -- or into piggybacks is, but know, some much on rough Not morning. global delayed. the I have guys comments thoughts ongoing how about drydocks with guess, of underutilized And the way there thanks And artificially thinking or time know, what is supplies whether is supply around kind COVID-related or it all any I'm vessel if of stuck on sense these figure of for the all a to to question. Gary, allocation capital you it of Omar's I spend being to Good fleet at dwell number ceramic? ports a

Gary Vogel

aggregate question, Yes. we're changing good have It's an around don't important considerable mean, port but to delays a quarantine number, from we point. constantly protocols an port. I in definitely China seeing,

so in a fleet terms and positive And impact utilization. having that's impact an of

install then Of ship a definitely, delays the in portion when significant delayed a there's fact negatively treatment without the going bodes earning still systems statutory over flexibility. revenue, day on requirement that's of that you affects negative X.X And market ships, any fact a specifically, backing water it the the for but also course, fleet year $XX,XXX-plus next because your you're ships especially more it's ballast really with have not and is that and I think there. a needs a or overlay well is overall, to up that the to

Right? same not, can happening. a drydocks. for extenuating can't but circumstance just expansion, So it and with -- be it's an There -- keep

think don't So I There's the lifted. also think just protocols the carriers moment, number delays But we're – which Panama which for see don't that. I are bulk Canal, an are is have you, a Canal, I Panama they an impactful, and at of going we of to until particularly see these is that but some definitely. also continue impact. aggregate And for the Neo to having

Greg Lewis

in of then like really mean, looks I back just And And and guess, the progress half any of, contango. at tails FFA curve into year, great. it's off. then, the Okay, the I it looking, kind

I at I looked thinking -- think As that? about FFA are manage that of taking healthy guys long how or how curve? more we in more, rates With limit that XXXX curve, how about see -- something end do your advantage some out trading portfolio? Like, you shorter guess, out you and kind portfolio. FFA, far think is on about you a and on we I'm the like, guys have the is that the there of of is going this wondering I you're you operate

Gary Vogel

as said, Yes, we hedge. I mean, strictly strictly use FAA a the I as

still a we We've at we free hopefully we're year. the for right? say, market. add call So value same optionality sell one the can option, having it, to first let's incremental if year, level, around a what ship a with but good a can year. breakeven asymmetric the be derivative not locking for ship year. effectively example created exposed a by in the in an trade for We optional charter And year a the We would we

at FFAs So data moment, said, year, one. when We go typically, where are. one I a our pretty but we fair value out physicals given it's longer one a about option do charter year We if there's XX,XXX. a or think longer backward down, could ship, the do don't charter, as that's a

year you be charter today and a in couldn't the FFA ship selling a $X,XXX. of side So for on wrong or $X,XXX because you'd

Supermax. Given we that out charter where

that at moment play work, the at that doesn't but it So times does.

year, So limited pretty again, not year, we're but to typically, a that markets I'd a say backward dated.

for so not reason, that right just And that it's attractive now.

answer, that it's So a on an strictly that gives hedging you hopefully but basis.

FFA. that want a enter there's got to reason a why So we to into be asset, physical on

Greg Lewis

your acquiring the on And great. be of vessels continue look this on now's take guess, I older fleet -- not we this I then, the be at pretty your mix. all asset to as Okay, best maybe older really fleet. vessels your time are of like comment, the higher trim there'll -- point, the of at Or some of it to do you fleet market. at the your like and to point, edge is just mean, seems add a trying to much I vessels. mean, maybe opportunities those advantage

Gary Vogel

I old -- that years have We've those. believe, we've beyond No. are two we and clearly. XX ships There's that then stated,

Frank De Costanzo

Beyond those.

Gary Vogel

-- ships, our we're few comfortable that. very beyond with ships and years old, oldest no XX.X those feel next I No

monetizing assets, age. So of because us see those I don't

relative because it's asset a -- to with if cycle, this to in to believe I think -- talked we are that get so a fleet, we -- by values this Now, where grow values we although, feel to I way, the point we significant and we continue and upside market in there's there, about. the we're to historic, also not believe out I of asset where the and need strength

in still felt to we a we've So sell ships some at is the smaller in the we would ships I'm get number asset XX be got appreciation of But a willing believer value cycle, if point and But answer already. course, is a future from constructive. at not driven cycle. thing right capital values quite the flow? in some was The of this are We're monetizing it by the and answer cash standpoint yes. here. as value -- of the But point

Greg Lewis

perfect. helpful. you, Thank Super Okay, everybody.

Gary Vogel

All right. Thank you.

Operator

Our Edge. next question comes from Value J Investor's with Mintzmyer

J Mintzmyer

taking Gary. questions. morning, Good Hi. for the Thanks

Gary Vogel

J. morning, Good

J Mintzmyer

mentioned bit XX,XXX days that think I noticed earlier covered a the day. I But a on Yes, we XXXX as you little line. base the

Do in? to any second a XXXX. of of where going those have breakdown layer it lot is of pretty front-loaded, are XXXX mentioned You’ve a you or Is half through that even? sort

Gary Vogel

Q. question. fair We're in to the that actually Yeah, provide going

it see breakdown into year. of and next a when filed, gets quarter So you'll by

full have clarity on you'll that. So

J Mintzmyer

Okay, a it'll to is collateral balance a you actually be counterparties? accounting say, helpful. related post outstanding, measure, required collateral or on sheet, that that And have just to and let’s your due that is

Gary Vogel

banks It's Yeah. which held cleared. No, in utilize that that's -- that's FFA, everything's the collateral. to real use we

real So cash. real, it's actual

J Mintzmyer

question. Thanks Gary, final and then Okay.

You're are these no down like on there, mean, it just because have right? anything convertibles really those earnings. paying You there's, of them, with out seems your conversions. in really now X% that those Is I force to do But sit money. reported there's you you and otherwise, interest pull there can kind they way clearly the

them or three you can with out So anything get conversion just of or years? stuck do for way incentivize that those you to more the

Gary Vogel

no open force be -- Well, they're there's yes market, at it's potentially, the you view coupon and X.XX%. to -- But in -- ability to a them think that calculation general as they're is is X%. they'll buy on -- I conversion. we is as But the but you can some I mean, said, the the the five sorry, converted so it money, point in

Sorry. you Anything want that? to else, Frank, to add

Frank De Costanzo

no. No, no,

it You’ve well, Gary. covered

Gary Vogel

you. Thank

J Mintzmyer

I'm that do things you would earnings. think would variable sure be maybe person. on on sustainable. thoughts Ant All on like obviously, But a of fixed are make sort so it Gary. be just based to Thanks, fast, wait, of I that, theoretically? flows then, how or because more sort and real cash thing look on dividend policy, got last And Thinking you forward the dividends think one right. would

Gary Vogel

implemented ultimately, it needs dividend it make looks will Board from decision is, But what be my we a said I've mean, the as it what I like, Yeah, to policy. what to view if sustainable.

I So if volatile there's the on going to to -- is be believe it the the term volatile to be in market low, -- view Notwithstanding portion forward is what the a long needs this strength it, a and relatively nature. business. our cyclical, do market, cyclical still given fixed

And lot because feel to really think, important, it's part, important whether I I've before, all, than like, one but it better of get it's have a to so, be I it's at variability is needs sustainable. And strongly have a or it to cut and said it have part we that, we that dividend, an have don't -- why to then have think questions, I completely. that's not stop one to

be really the think, whatever main to that's do, it So driver we the want is sustainable. I -- we

J Mintzmyer

you. Gary. Thanks, Thank sense. makes Certainly,

Gary Vogel

Thank you. right. All

Operator

Fratt Poe comes Our Markets. Noble next with from question Capital

Poe Fratt

are cost, refinancing those the I bonds at FFAs. triggers, Frank that of that talk full But address you had you potential in bonds? and catalysts too. look if year, about covering one high Norwegian the earlier, on second Gary, presentation. when still have the thing thanks. I’m the -- you question about, Great, those is wasn't timing or and sorry, half Thanks can the I for the for a But you

Frank De Costanzo

going Sure, the we're that markets within available XXXX. improve; market. Poe, refinance that we have bank it’s the them Yes, continue one. this I'll to to take year, bond here, The market, us to Frank

opening options and better. getting our wide So are

whatever we attractive. will will, take that out, be So very and likely it replaces

Poe Fratt

from potentially -- moving you as does you? talked standpoint, for Gary, get attractive Not then, up. And attractive do newbuilds when values acquisition Great. an about second when hand

Frank De Costanzo

I the don't I Well, answer do. think is they think

all, been had And so, And ships. kind ships, view first ships, joined so XXXX. shown first to five through the couple the tribal least we of soapbox on And of was come with of market that saying, Having of don't, worked not I the at we're my we Eagle. or ordering XXXX of end be I years, challenging that, have was I've going the more my a driver that need you that till world don't here. was clearly won't the reasons. we for for since today order main enough Ships we changed

I a XX three around regulations future us. before good that that see XX carbon in given year XXXX. and coming ship ships lifespan, emission is except asset, uncertainty old. on ships would don't years between for I XX about all window the a years years on which tell or So risks today, nice but years year that risk and think scenario I old sense make here and fuel think new just, where zero ordering XX we've that Supramax's, ship can't builds, the I happens, XX and we to have Ultramax's a really Eagle five for be really, participating tax that only an We zero is feel I a see required will extraordinary, The decarbonization in historically

XXXX sweet and spot the of old having course that's changes are -- risk profile to right, think acquiring, is ships were the be XX a ships So, going much XXXX really that a for better a we years say that coming. ship build given

as The ships. be ordering years those I see although, are don't will So and now to market will ships And just some wait strengthens, where continue be get need scenario to there ordering. to this two pressure a Eagle there's ordering those be three to will ships. people going there

into next confident the delivery window. to in that beyond market, year So two pretty and for half sustaining you be not just his and years, but need

that feel for pretty muted. But course, we will is supply So some that, stay feel sure. there relatively we be I'm going to those reasons good ordering of

Poe Fratt

the would the would it essentially of think -- maybe or cement? actually as new something to suppliers book, how Ultra out orderbook ordering same you taking the visible but consider buying the would just out -- out you as would incrementally what add and order you that of doesn't one, to consider cement, there Just you a

Frank De Costanzo

defaulted was contract question. that one the that interesting in on was the delivery the a and bottom actually but market, was XXXX, back No. take completed. ship resale, an of did It's at of We

I a to that's if coming don't see in laid, us say, is let Ultramaxes I three resale still, that reasons think little was months still the mentioned. for and the us year years. buying a spot it's is of to think buying, that that old a were acquire I we six couple ago, a sweet I ships, different than keel for five

there just because and know don't a I'll for the Eagle like. just, bulk. really say we don't I So, environment I look see never, probability might what But being never landscape that high

Poe Fratt

Great. Thanks, Gary.

Gary Vogel

you. Thank

Operator

Riley. Instructions] from next Burke B. comes Our question [Operator with Liam

Liam Burke

morning, you. morning, Thank Frank. Gary. Good Good

Gary Vogel

Good morning, Liam.

Frank De Costanzo

Liam. morning, Good

Liam Burke

of of feel XXXX. you is fleet can major the versatile, as in look bulks, you about going you your the is there demand particular both through the lot and side a be? Is end minor to pretty year better the handle that makes area any Gary, how equation and into

Gary Vogel

bolts are a the Yeah. major side to minor a But bolts, range. X% commodities. mean, disparity X.X%. X% you'll cargo, in the lot across, demand is if I the of I we it mean, look what me makes a of good commodities feel look about And see growing if across both, right. at broad year, comes we how and that between sometimes there's lot X.X%, this they're

opposed drought somewhere, to So – positive, that. being as the movement, like and that, say, fact because across seeing I is, of let's we're driven or grain rains is it really the things board think, by

the that's months. stimulus. we're It in or what's it's a a and really time. stimulus, infrastructure on three of – And this spend I think, six spend, compelling and lot just infrastructure being by long time course, that's, So happen doesn't demand, of that seeing, takes supported

important which So, longer that I build, are mentioned, cargos infrastructure cement, and ore those that those are are know, good term. cement those – typically for manganese moving is, were clinker, steel you products like

Liam Burke

Okay.

sustainability degree through the there of So as for XXXX? you look of through of into the a demand commodities the to the end the end and year, be seems year

Gary Vogel

Yes. Yeah, it way. we that see

Liam Burke

Thank Great. Gary. you,

Gary Vogel

Thank you.

Operator

no call showing back to I'd remarks. this the I'm turn Mr. closing Vogel At queue. to time, further questions for in like

Gary Vogel

operator. you, Thank

We have nothing further.

to for joining a and us today good So everyone I'd thank day. like wish everybody

Operator

for call. conference Thank this Ladies and concludes you today's participating. gentlemen,

You may now disconnect.

Eagle Bulk Shipping (EGLE) 6 Aug 212021 Q2 Earnings call transcript