Scorpio Tankers (STNG) 9 May 242024 Q1 Earnings call transcript

Company Profile

Participants

James Doyle	executive
Emanuele Lauro	executive
Chris Avella	executive
Robert Bugbee	executive
Omar Nokta	analyst
Lars Nielsen	executive
Jonathan Chappell	analyst
Gregory Lewis	analyst
Ken Hoexter	analyst
Frode Morkedal	analyst
Christopher Robertson	analyst

Call transcript

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Operator

Hello and welcome to the Scorpio Tankers Inc.

First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to James Doyle, Head of Corporate Development and IR. Please go ahead, sir.

James Doyle

Thank you for joining us today. Tankers XXXX Scorpio conference the to first earnings quarter call. Welcome

forward-looking Chris are call Cameron Chief Officer; we Officer; issued with press Officer.Earlier the quarter which risk Chief May Emanuele Dencker Mackey, on on Chief Nielsen, Lars information me based uncertainty. Operating this call X, our and may President; from our XXXX, On today, is Bugbee, is today differ Lauro, website, available involve scorpiotankers.com. Commercial in those Financial The information statements Robert may results Actual set Executive contain Chief earnings of first Avella, and such discussed release Officer; today, that on materially as statements. forth

at today. on presentation slides webcast days.We the and will disclosure be available website on in earnings as webcast. for presentation of we live Tankers' filings audio An be as on available a made the the are release for discussion Relations SEC is recorded These the Scorpio on and risks conference purposes. well scorpiotankers.com also will the After that Relations presentation, Investor broadcasted Investor page a archive participants are of of and under you sec.gov.Call these this go short of the approximately being page scorpiotankers.com available will XX is playback statement Q&A. the Presentation. the call giving is our The to Reports available should advised at which also uncertainties, press For forward-looking be will and review internet the being

the to limit please questions asking X. For those of questions, number

I'd Chief Officer, additional an Emanuele question, Lauro. queue.Now like introduce to our have Executive you please rejoin If the

Emanuele Lauro

you us to and everyone Thank and morning you, for good joining thank today. James

QX, net Refining is capacity been maritime the announce company remains for $XXX adjusted the as the have constrained.In Global supply cash rate the well our $XXX Scorpio resulting are curve flows another we refined the million $XXX Tankers on continue transformational as environment further in focus rate still The quarter, dislocated from few heightened are financial to chain for our in robust. first been We continue. repay favorable repayments reducing demand quarter an market have the In million million dynamics made disruptions the that quarters. In adjusted environment significant over is generated and debt tightened driving have in and income. strong a products to on pleased during of million quarter. past EBITDA leverage. the set supply $XXX additional geopolitical results. to second unscheduled and addition, We and

level. previously reduction debt an third quality quarter investment of balance anticipate day.Today, target at sheet lower $XXX our million, end and breakeven the year. in in debt of this as Scorpio our the of cash our net stands mentioned, represents each improves which significant starting As We the

and period and lenders near increase modern In day, ourselves in to modern company's prepay daily during were once TCE breakevens, debt. further achieved the most out amongst near breakeven support the reduce breakeven opportunistically would in fact, our would low to favor see the buybacks shareholder look fleet remain to limited we regular with actually the If be to supporting with This increases there.With decrease all lowest robust per the Scorpio industry James and dividends.As cash delivering tanker value, them scrap have given positioned call and debt, for net -- still brief in lowest the value further rates despite things remain returns we the to turn product James? would COVID Tankers which for share would the accretive your a are $XX,XXX our debt low the factors our like than to owning working to we we we operating act committed fleet, the presentation. discount a existing continued our the now demand more price optimistic Tankers.I remain fleet rates. and confidence figure shareholders strength history. buying appreciate to be continued back to to are to in tanker anticipated same, forward, NAV, who growth shareholders we and product We Scorpio as in global we would inventories,

James Doyle

the shifts Never have the rates business. have and Thank and these many day have tanker for please. so exports spot demand, driving factors refining low same Increasing you, The factors X for global limited. levels has Individually, there product been seaborne are bifurcated positive. years. growth become capacity supply remained almost increased they're LRXs. been Today, unprecedented. Emanuele. result, rates per last Slide fleet our for time, and high MRs the $XX,XXX ton-miles.At in $XX,XXX are inventories at has X, Collectively, and

higher clear of today.Slide products. because strong. the rates their disruptions and captured volatility please. Refined been underlying serve have demand indicator global MR remarkable demand a LRXs of in as robust This shown has X, from Sea, product and While headlines continues consistency extremely the Red have impact refined for

diesel, and In year has end, seaborne heightened fuel to so day, We also jet barrels demand exports. global gasoline, exports increases by increased.Slide significantly distance million And exports a X.X diesel, traveling are barrels The demand an seaborne been of demand have led levels only compared increase an XX.X year-over-year. these as has not gasoline please. day March, fuel. increase please. reached X.X driven expect per X, million levels day and XX, of barrels but naphtha. of to record a yes, and the in grown, fueled increased, have The increase barrels has million XXX,XXX in Moreover, for increase XXXX exports.Slide has jet primarily through by

boosted like has an in places East and reshape the Australasia have refining capacity The needs to increase have Conversely, U.S. has to capacity production, increasing changes moved Europe, the to decreased continues imports. consumer, for exports. the and travel the flows. local closures structural As away from Refinery leading output, increased. distance in refineries has further in new cargo need the Middle in

ton-mile demand is has XX, increases, supply increased. ton-mile notably In tightened.Slide As and capacity reduced for demand vessel please.

Excluding demand by has ton-mile Russia, XXXX. since increased XX%

fleet increases geopolitical vessels, additional longer changes Russia, you suggests it's events capacity X%. must ton-mile This distances. a required and but have If not leading refining an less demand ton-miles, said, in that include rerouting cover only the increasing geopolitical export.That driving to efficient that of events

orders. disruptions attacks strong fundamentals supply increased charter Cape XXX%. spot Meanwhile, the time in and years. in markets.Slide continues increase deliver age volumes coupled with has Red XX, For with exacerbated and fleet existing the set of at over aging product XX% to tanker the X tanker the fleet please. and years next Canal the have the of have to Currently, reduced to book our order by led the instance, average demand product through fleet around Hope by in of the These age an Suez Sea fleet. the represents the an rates volumes Strong XX Good newbuilding XX.X% now

year's candidates Thus, years what will scrapping. of years by to the growth XX% newbuild? exceed with XX and potential and Well, XXXX, be fleet XX year, positioning older older expected fleet be using outpacing vastly about growth and please. fleet the as expected including modest So like next X.X% X.X% in and conservative assumptions, supply. for is and X.X% scrapping X it's over looks them fleet than the increase then, ton-miles will to seaborne exports years.Slide XX% will This this look XX,

inventories, limited are supply-demand to Collectively, on unprecedented.With The constructive forward, ton-miles, of balance. and product I are we would demand, global the it increasing market system, growth. structural today's in the in that, historically are low very they individually, dislocations flows Looking refinery Chris. of and over factors to fleet like turn exports confluence rerouting constructed

Chris Avella

Thank you, XX, good morning, Good Slide everyone. please. afternoon, James.

seasonal strong of that ton-mile first the XXXX expansion the Red triggered the dramatic of The was demand quarter in quarter with combined conditions by Sea. another

$XXX the have pay enabled in results $XX purchase net EBITDA our we adjusted million have $XXX target. And as income. our Deleveraging and reached we the our per primary been XX, at in stock of has about million open reduce debt average adjusted $XX Over debt by dividends in of billion X past in of million today, generated market focus. and price million, the These net company's $XXX $X.X share.Slide to us an have quarters, please.

but cost our not have simplified balance through leverage, sheet only more more and traditional we lower reduced have also terms. at We our of financing flexible forms

lower-cost successfully of refinanced have secured bank obligations more legacy all basis than of carries and XXX traditional which less debt, margins lease We points. into our almost

chart respectively.Slide in our the the as $X.X XX, billion on debt today at As net of gross and right, and $XXX million stands please. shown

in XXXX remains resume commencing definitive a term of prepayment scheduled quarter the quarter If amortization, is the credit repayments This including of again up to This period the until September up would discussions not our in currently amount $X credit third prepayment $XXX billion second facility make the loan. on subject loan million execution and the XXXX. term We the lenders are X to approval through be for to committee to with portion documentation. of years of and of lender this XXXX. approved, represents which on to of

and operating cash this taking include immediate regularly to loan scheduled breakeven significant pro giving G&A, down breakeven project basis that amortization a an forma cash come effect a in interest effect effort in costs.Accordingly, we cash step expenses, prepayment. $XX,XXX which are to on payments daily We day company's per reduction vessel our this to and will the after about costs,

through returns.Slide and positioned our lease rates, pursue ways we shareholder rates pursuing We breakeven continue company XX, opportunistically to the reduce reduction cash expect to long-term debt our have repayments. additional please. cash increase breakeven daily to By to in a

$XXX per of that, These turn company across close the like is in at year facility.And $XX,XXX charters, any generate demonstrate call quarter over per million day, prepayment on to note second our company's to cash company that per generate can rates fleet, flow operating the leverage. important the Our potential with billion At $XX,XXX and include day, averaging day. of not $XX,XXX $XXX per coverage Robert. impact per including do to can the XXXX the credit to estimates year. It million these $X the I'd is time

Emanuele Lauro

not mute on is something, Robert, know, I if don't you're available. Robert or If but...

Robert Bugbee

sorry. I'm No,

and generally things to us say I many cap of want product we've time, years pure we all we've long the how Chris. Well, us.We're I'd very been in just this tanker companies. know finally stage enthusiastic this fantastic. like is. incredible to group of of market a We Sorry. got got thank here the largest company climbing And lot to for a Scorpio where mountain much, you going just It's

per liquidity trading dollars day We highest in volume. have the

fleet. the have We newest

we go. to have ready We We're pointed to that for next ready week, we're our would that the Chris stated fleet be beginning policy. even the buybacks. end the going a our and be be stock sustainable of on now from date renewal And least to we're NAV, trading Emanuele return place.As right of by below share set out. that well next out, going need for below capital with to priority dividend to go range -- we're the

Finally, $XX,XXX, spot about part year, moving Whenever cash the had year. actually not X weak. through have the of ceasefire right other does that there's fear $XX,XXX the worst shareholders the even the at the you withstands first there's related Gaza, the almost trades of last breakeven of to hard That's favorable it's observe all because All is sectors. because or James if right to with day. mention withstands a no the fair We really of that terrible it a upwards our the that months. in all, of at It's looked the than factors the we're anything. is we're work now this worth out, Red it's of terrible COVID low And and pointed these COVID, expecting delay of kind share we be been Sea.But lower COVID earnings. the We Red tanker feel that, trough operating a frustrating, like X the Gaza straight opening fleet.But market I That across guess open away. all the luck out months in spot that now have up there of but a can stock are And to need anything the the the bullish. as really mean necessarily It's down. fear now moving. are period super of understand because breakeven gratification Sea ceasefire stocks are there us strongly Israel, for in that

Secondly, LRX let's MR quarter look at X an to same the stronger quarter, has into to maybe Sea, less was XXXX. look the more XXXX.The this been on as in first where depending XXXX But market the market, no XXXX If we that outstanding or fear. $XX,XXX Red first $X,XXX was let's there months this is than what remember, year. disruption

the should notwithstanding is So look we debt the dropped there look data, it's not I as be opportunity. to we at really something company's overblown. the because breakeven and have of of especially in arguable the the Either reduction.So if as at much it's that, so XXXX afraid are just really to of, said levels renewal.So here, over the pretty data away, that itself than company situation the that much really earn what historical some Emanuele is debt open more we're great because it did and just today shape. earn as that With that the in market in company would fears XXXX excited, fundamentally anything it -- can we're stronger the was think case, out now than great is fact could of questions. that like It a face bullish straight still

Operator

from question Instructions] Securities. Nokta comes Platou Clarksons first Omar of [Operator Our

Omar Nokta

moved since I've to Jefferies.

reaching your congrats off, climbing this mountain. on as First mentioned, you been Robert, target. debt And you've

the play viewing is focus sounds any business now changes coming? reduction now and for financially.I this how for there you on that this first both the X X now target months debt seen are does you've that as buyback It Now available and clearly that worth anything maybe target you kind that well strategically this to that pause we've threshold, past have it. back But the saying, you're reached and been focused regarding general, and change there business? the is reached guess you has you're here of in the every now is maybe in

Robert Bugbee

sell do and well No. No. continue as I it's worthwhile worthwhile newbuildings? No. spread think it's think ships? mean we out a of situation. some Are it we not a like going to Do whatever asking, time if of prices. taking you're we We're one you the just doing this as order buying Sure. at to advantage ships? willing But drastic it's it older or strong our see, is great

-- just reduction in in where more allows knowing levels makes we that where to debt or compelling some where of be now -- in with knew little you an even interest just not our I of a a I does X-year think the one think revenue it rate seeing are do that X-year that we aggressive more charter are. is cost costs it elsewhere. -- quite things putting was change up were that our thing that X rates, rates these if we because if reduction there really was super may that strongly.And of is bit quite is extension the If the one some line of and move strongly more -- us

changed think those thing, that close that $XX,XXX you That we're quarter you that those means ship has this about last the in fixing on effective and out charters. XX we're of no Look, pile be changed -- talking structure out the free is put a too, XX. benefit you rush. cost there's huge. to That's the day, your to XX, that delta these $XX,XXX no there if lowering terms. numbers it's market, And lowering the that confident time costs. you've there's But our think the to in from real XX it if pretty a changed your rush would way.Basically, you've spot are -- enormous. XX, one That that another That's the of you third to of cost flow very change. I if So cash go but year, only

Omar Nokta

LRXs and a segments obviously that can market a least LRX really nice year, in I higher have different much has [ the related. been coming change floor, pipeline of ceiling it's clean TMX that and whether more lot the up into I to does color take color into then rising come want give capacity crude No, take how at front, simply breakeven, trade a definitely any have the discussion because perhaps of opportunity? do they've any product. guess previously Obviously, that and that trading trade, back Any And of give interest has of played on. relative to perhaps and higher dirty lower LRXs strong established follow-up or And we migrate advantage other you TMX on very this? LRXs dirty bit had it's role.But the Rerouting very, can just this you asking -- that? now a just cleaning been on rates times. this a XX that of advantage have on to ] I'm clean also on then

Lars Nielsen

I'll Yes, mean, I obviously looked you right? this I me? Can And it for LRX taken day. years, at take clean-dirty Us? oscillates. other has place trading mean it. hear I the

Omar Nokta

Yes.

Emanuele Lauro

can. we Yes,

Lars Nielsen

and Yes, has clean units between or units X up And down sorry. over XXX to the X oscillated XXX last trading years.

to that from been takes of has gone a big might into And do it a bit you clean the little dirty as there recall they ships obviously that So a up. clean number trade that.So decision. of have it's time

something say these has look vessels with LRX and because of because look overall at an big increase months is plateaued. kind not perspective great. it that that into as an a holistically I quarter. we to issue And before of the history Suez through couple is kind it's the more of of big to think really firing this owner trading we're decent next the of it's the we of that when cylinders, from one at to taken close notwithstanding constructive of from we you seeing on very a is on it going terms on think strategically start things which your turnaround a in very all number output runs If over is market, second TMX, very a It's July perspective, place answering I for important can look fair that clearly, still still not and goes refining up, first question market.I which strong it's June, built out kind quarter.And a has have to is first now what on going We a going the in had quarter. being Bab-el-Mandeb in season lot more there's of of kind a go a here,

So Asia on, increasing.Transpac have per I have around been was Those look if day. saying earlier James MRs, been has there trading. rates And rates good as you at been think $XX,XXX third as well. we be talking China exports move the And quarter. thing strongly. is going as big the seen again, into and rates now moving to about second LRXs, up we've a

have day. trending much slow, up cross-curves. a the a back week activity today for points MRs good on East turnaround. ultra in good little same Gulf, our $XX,XXX West XX to this this day $XX,XXX for been very around has trading for time.Middle XX gainfully as $XXX,XXX seen well. probably That's think towards long-haul now bit refining trading voyage. $XX,XXX Rates the of of a We've has The little also well, bit couple a been to probably U.S. I day XX, business ramped round a up as a

TMX. every that.And which also do day we is live ton-miles. and LRXs triangulation utilization [ do, is the So the the can this on thing, every moved day all of have one which which impacted that's the TMX, end refineries how talk single in not selection big cargo we now only can that When and coming also dynamics, up the but certainly then see we like Dos you We levels the see availability, our we on disparity the this also is new new the about a James stuff. about up call way like is of this and business have the MRs, Mexico, And that on Bocas good ] in now. of certainly Dangote, year I of talked

things.And Vancouver. it's Now have Aframaxes. of it because TMX is thing gone a we also I Asia. we've of seen about you out say big couple LRXs.If than a now. a month could of goes big that's Aframax, for think that they ask And They've of TMX, And per And long-haul, If lot cargos If it have you than supply, market also be the it liftings a be it XX thing include Aframax that. to there additional for be context at Aframaxes. more going impact have it's these way forward look and about the LRX that LRXs on to a Aframax look less will the you big it, California, when goes you bottlenecking need that. to because to will talk Whatever through at to the around Aframaxes. and you overall on

So book with order combine when LRX. it today the extremely the Aframax low is you

XX all and that. put that this will you to Aframaxes it of years the with fact So reach equate of together doesn't the together, age, LRX

So strong 'XX of kind end demand for improve as a that this one new as I or really beyond. is going dynamics and the into Aframax/LRXs overall we input of the move really of to see

Omar Nokta

obviously color. Great. and That's detailed helpful very

And that. appreciate turn well. you over. as it I'll thank Robert, I So

Operator

next Chappell question ISI. Our comes Evercore from of Jon

Jonathan Chappell

arb XXXX left. your and about an [ a there It my on little the count, your vessel By strategy you X up as of made pace the been seems some sales. there have own a a it potential through already leverage. follow-up announcements of bit you And NAV, Quick like disposals XXXX to have ] per seems today. picking to relates vessels operating of of Clearly, lot sale. commentary be

those year? to can for So you second in it this Clearly, point add some fleet the just deleveraging buyback? perspective, bounty half only don't need exit the should at the but a we to expect from

Robert Bugbee

those with think the I better to that the opportunistically we'll way opportunities along is -- way. it deal describe

Jonathan Chappell

okay. I don't it's think

Robert Bugbee

for us of would types to discuss. plans it's and useful to what want vessels discuss don't think I be. We our actual just

to accept to vessels think that engage us bids to shareholders all much to. have we might that. on. see carry better we are If it's We I we'll then to, don't might the do for we us, that that and just are but want attractive

Jonathan Chappell

follow-up is MRs to, structural there would volatility of lot of But MRs of I But to of what's related because a first grinds you and more structural that the the go throughout. the the to a the consistent the slow for James' to at to MRs maybe back LRXs the the focus Would have would pretty steady, Then and characterize regions, more there. I a impacted get across the sector? disruptively kind chart, therefore, it as be boost the and dislocation.And demand and think, risk? is think noted, it impacted be to be I have higher, of the fair more be LRXs ones LRXs guess, perceived, been been refinery happening seem would in were if still some piece

Robert Bugbee

market, quite had wide think I'll we we're between quite to said you Lars whilst the determine. in transiting -- group. still you had it's of -- wide XXXX, a got seconds. spread LRXs the that also a to to I owning still the time a think on -- favor.You its had difficult that not in charter as benefit -- historically, still the is -- Canal back the wider answer let we But in I a just in the and just spread LRX you MRs the X Suez just LRXs But into

is As I a charter is remember, there wide spread itself favor. the saying time that LRXs' market again the to quite

the just look, of really that we're we're you only saying much want sort do to will a the isn't Lars, of Sea thinks be of that So add is some this It saying -- not saying, Red worry. worry that transitable. market that? to

Lars Nielsen

thing more what the today to today. unit. an we're meant place back on going on, takes that think whole There is lot a LRX crossover going an more also fungible is has becoming The between the LRX is arbitrage of that and LRX seeing what's is TMX Aframax concept a of evident. that the I

the on that see can market. You charter time

see pay that it marginal when now is to got ordering to also you most price for look the at to owners them the newbuilds where optionality.So market where can holistically. LRX, be which limited will considering willing look point You an the in have for is LRX/Aframax, increase you've today together

these that, where to the which, point, have of of it on, of the by therefore, Bab-el-Mandeb think longer and your obviously talked factors I course, its second impacts haul and you about so Robert, size you business, impacts outsized. LRX virtue

I conditions, of fungible kind But spread. on the that think market very assets. think, there will they are do I tradable both be viable, normal that

Robert Bugbee

that Yes. I some positive they mean see and you seen are they the day, MR spread positive in you've LRX. recent that fixed clarification yesterday -- can LRX. quite have INSW's where an results fixed And a wide spread to

Operator

of Lewis Greg from BTIG. comes question next Our

Gregory Lewis

the market. I guess, Robert, called time market. I pickup you first time I X-year one, or James the more in longer-term around mean rates charter is charter out Lars, guess the and my X-,

from it these Just usual those impediment customers looking getting point? bid-asks Like kind level, suspects? charters, are appetite how done? kind of Is deals what we think about types And as we high do of the curious at a on for are is the of those? at think this the wide

Lars Nielsen

wide. is years. gainful, national basically, First of there's oil it's consistently X, is X few that base client and being end between companies, It longer-term out all, charters users on And there the quite I'd X both X, levels quite say looking the that concluded moment also deals traders, charters, are and is or globe. it's for bid-ask it spans this LRXs not MRs. And regularly on are at wide a because the at very

Gregory Lewis

there is a quick real -- just on And for preference scrubbers?

Lars Nielsen

scrubbers. be for a who There want, I complete scrubbers, definite. preference There tends XX% but probably not -- I'll mean say do are -- to or not but it's some for

Gregory Lewis

of think Dangote, one, what's of really And to develop, would differences happening the you updates there? of on LRXs, the year around little wanted it major progresses 'XX Is any high-level is even the do -- of that of going seems kind I is a that in we you expect be it thoughts to the kind MRs the like it market? I As be of of bit where super helpful. be between mixed? -- been a volumes. then kind evolve that guess as to more an just Kind touch kind and share just there, that driver and to in see Any can we has potential about as that LRX

Lars Nielsen

started And on XXX,XXX X that days that a or Greg. which day. going So coming up. suddenly, recently a I the up. Dangote become stream that's just something not barrels ramping unit like has And weeks very currently now. still, I finished to distillation is think around grade, second and start it's then early it's right there's And product case the could in is think

have seen exports. We

have been interesting a done being out tanker lot countries, of done as product of going a MRs been primarily which African has owner We ourselves. a There's done other all LRXs, of West perspective. to well exports couple Dangote, very on long-haul.There's from some been the

created the Med. Atlantic the there's third at has that market As almost taken stage in start-up place, export this that start-up together that's with it this the continent Western and been right now the seems we --

of gasoline going to some in like Nigeria obviously at around that, OECD think other ppm would I be that the use that's or the high-value somewhat and there gone with But be is premium X have the continent. which backwater you what ultra-low-sulfur you we pressures pricing of differently form. markets, it normally you are lower grade.So obviously coming you political fetches of determined stuff would about I a and that premium think in have because if Europe in that's to to that where vessels at time start is looking high-grade, this trade imports value logical you to out being Dangote of tended than imports.Obviously, anticipate to And the States remains way the your a only So over be. finished product the the products and Africa, bid to rather but talked before, or determined remains diesel, and some whereas from what that's West or reduction goes in stuff have in

of also double comes is whole be it infrastructure We bottlenecking The to going other is And a going next these how work think to pose. as that to when need see do interesting thing double a some handling, see can to today.So need going to over and it's handling, also question. some issues going big to the as things something and that's really well have to I STS issue already supply year. to be which say bigger to out find to to develop they we will in need around Dangote, have as ships that's there's is the you

Dangote think excellent that's that final placed, as potential also a thing quite where it's I has interesting refinery. is the swing

exported.It they will of that think fuel as they that NAFTA jet would You require in can can market. have things. the do real have not these with can And lot that size it a developing be this will local go the all of east, of I it starts I running have west, a refinery would you a potential a imagine as up would as well thing and lot lot had, because

could terms to So that to of the think from in interesting the it's going of for size product you West lot But there's will of produce I up it's with one. and the determinants stuff that. of quality refinery interesting Africa, an the that some come down going other kind this a Headwinds product of considering market. continent assume coming

Operator

Hoexter America. Bank Ken of from comes question next of Our

Ken Hoexter

meeting the net a target. debt here. What NAV to So on ride congrats to get

we on normally that with Did or drydocking were at lower seeing it very lower was like get last your than you if quicker a Just the a what Is you Are we're minor just any quarter. where for moved But on near-term? seasonal off seasonal is looked understand second Lars, near-term the have that? question then quarter? on you pullback. cooling drydock one fewer quarter? the start. any thoughts planned through about there to had a demand MRs improved talked looking market if bigger in quarter-to-date vessels have bit the have to my It is, you LRs? want Just rates

Lars Nielsen

over to we the anticipated back can look I we're that's part seasonality we we I seen see summer probably the is output have than up. a the at not see going going ramp historically we in what case. stronger pre-XXXX have going to question do July. because I past of from of of course, would short refineries being what in see June, a that that to have don't before. The One, see that happen of the pullback. do market answer your think I seasonal the the And seasonal is terms second

issued. delivery something been the for VLCC year.So the that think, of rest of It's would stuff about. we stuff kind in find thing past think an we I Suezmaxes, -- year. see that only higher before of perspective were being just we're It's talk and We've really is it's quarter at looking cannibalized constructive there's in was that thing a newbuilds. long-haul think another this that's that somewhat in the as second last for which limited one some in is kind not -- even is from than 'XX. into context as only another that second a thing talked that kind well.There's of was the variable ingredient The this by that's interesting can I the we about about I China X key competition It's go There's also I China before that quite just it scheduled comes quarter. the there's exports. market I as for been But anymore.

Ken Hoexter

Chris, thoughts days? Great. the on

Chris Avella

move back slightly in drydocks to also vessel to some are pushed Yes. Ken, from question. planned, Drydocks the fewer emphasize which get that fewer of some we were there There slightly back always thanks from drydocks. had positioning. to QX. especially is There's market. QX for around, We've this and going good. had days pushed were QX I'd get the QX

just short we'll But is keep updating answer yes. So that.

Ken Hoexter

Perfect.

or XX refocus And You've different. on guess, you're going got vessels.Do at the noted and look you get you look kind it cash, for on little mentioned right? then, the years? the understand next. Robert, be for as next long to your at how I vision optionality company thoughts here Do bigger Emanuele, a maybe selling picture right? your looked of to you just the Just potentially want and phase run on of to buybacks. just fleet comes able think ongoing what's structure. But vision XX, you what an have life want of monetize fleet, the You've you next opportunities, of older that? this the I entity it some ride for to as we to understand but to a I mean been end now just have, about to the obviously, it's the some

Robert Bugbee

not something -- that's company, Obviously, there's company. wanting the carry other think than know you I ongoing to running think always that ongoing. I the being someone off a don't don't it entity. nothing alternative an of don't there's -- see discussed. it But forward. the we I -- I that as an the see think to other is look you think obviously, company buy to public But I that,

Ken Hoexter

to the Well, to of you'd I want I the replace when ask understand reinvesting just have start timing because to then vessels.

Robert Bugbee

one... Long

Emanuele Lauro

Robert. I if think may, I --

we act that forever when have I and think management was the we and act to are we as I reactive has, -- think, on shown markets team up leave on we markets. be and mean, it opportunistic if and I down

time today.Robert We quite on I sitting owns. the as our lowest or public in fleet now think if of we out are the we that receiving We -- offers any attractive are actually company a fleet. we've existing that most the a beauty to on will maybe that look enough, the And that we that are is think breakeven take we as at lowest have renewal, have So seen leverage still of have not yes, decision was trimming where or fleet modern about far continue we there that. history. them bit are company to consider and we the vessels do them saying before,

that all are are enjoying doing we these as on we markets the as we've However, heard are Lars' comments speak. what markets And improving.

do a as lot have coming as quarters open going knowing to So we can to forward, ahead But we do options have aware we relaxed, of not we opportunities the do, are to. anything for of very and we have us. that yes,

Operator

of Our Frode comes next question Morkedal Clarksons Securities. from

Frode Morkedal

on right? the because similar Just rates a been interesting market that Sea you of discussion had. disruption, despite XXXX fairly perhaps the question a to quick It's thought just would have impact ton-mile rates to have You note Red on this expansion. bigger

refinery higher? any why part been if just runs, ideas have it. on first just you comments haven't rates other part any curious I of So of that. answer is guess to the to but related the you have if That's

Lars Nielsen

in obviously of pretty things rate got obviously, to I'm States the kind a of as of happy earlier has the couple the also are ago. I've been be kind mean, months East and right then China refining and now with honest, now. Middle the structure I maintenance there the

that been So all of front-loaded extent. to has kind some of

around that example, the Skikda, now.So way go for if up mean looking and was the dear. cost from east. simply very of is there's of As therefore, to the somewhat to naphtha-related refinery, because very see naphtha the be something which opening from first has up If I quarter, arb of say would you maintenance it's been I And arbs it shut.I been down micro I all west probably had arb less. for to been the some a that have to fantastic. opening just for too at that absolutely distance, is lot the think that the not change think is a much I would think perspective has producing. right somewhat

have otherwise? been that you big So be thing there could are well, there say, factors honest. I a a more some it's don't think bit other to

a a been where some markets. seen I think in second market. couple East peg have a of a that point $XX,XXX also how creating widely days, in has up rates points been you ride is -- been U.S. move [indiscernible] volatility Middle like XXX up case day has oscillating week.The of has great uncertainty this $XX,XXX, has that a MRs, kind move generally had, high on could also within point, Gulf from funky of do a very you've also up The the one within rates moved a

take for we where very time them it think market were across we've than sentiment at go doesn't to owners the is doesn't fleet that take have many is a the is don't higher dynamics. product seen to to long bull, before.So react the longer flat-lining I it well it a we we So the generally fair fundamental level prompt And of utilization underlying sentiment have now. is a one much level lot to that that turn seen thing much say with years as into the much took back very and a which kind time to tanker

Frode Morkedal

day. That's going the XX this I globally interesting, ramp IEA was then I huge mean But down was ramp up Yes. XX up at looking was happened data. very QX to barrels in roughly million than to predict per lower interesting. runs like And when million been expected. year-on-year, what they QX we've if and refining happens, in thinking August. you about have you right? that's I be should have And QX it a

Lars Nielsen

I quite terms with at how interesting too. It's maintenance things place of that took nail on there, it, hit the Frode. the and look in the think head the pullback. I all you That's

just or talked and we you whatever, at add to at some around of stuff would the close bit of add we you're in to north you tends just to that a outsize you You if years hovering just and a what not numbers and little be previous have increases about lot would extraordinary utilization. very the because trading and have rates rates start on seeing disruption of that more destruction that negatively.So nicely whereas I stuff going that situation elements it margin. have very this to been on, kind these decent markets, all China element back of are where the We're number so in earlier the and you that XX% in also reacted mentioned a so the capacity seen

Operator

Chris Bank. from comes question next Deutsche of Our Robertson

Christopher Robertson

to the breakevens But just is wanted related job. see question that Everybody to to pass excited yes, along. Fantastic that. Really my here.

$XX,XXX in could get engage you the if you said the So prepayment, as level. to you

prepayment? Just today curious, the what is before level breakeven that

Chris Avella

$XX,XXX. about it's Chris,

Christopher Robertson

I'm got impact Yes, Okay. that it potential has you. I that glad here.

what of So that's My often is were to second the trying overlooked Handymax get kind we question at. segment.

there averages Just some where actually between seems case don't And down brokers bit mismatch know, guys what the versus of noticing there. have of up. a be the there's, to you global consistent a what rates quarter-to-date, terms gone provide I a in put

So I particular segment. wanted to dynamic in better understand the that

Lars Nielsen

-- vessel potential with has mean, market. I It very aging think to market the Handymax market, secret start Handy that. It's a like I'll the I is ramp weapon. our up small extremely quickly.

the certain is have continent, of one and ability you is within triangulate terms a on on have also you clean well the has that. markets dirty. experience, If X size market.It and also to primary Mediterranean, in extremely One is trading the which the

area where you've markets a an like in on intensive It business. got certainly very can X going optimize of is around you kind So that.

a kind it. of around focus So lot need of you

X probably trading that a the earlier has over And need somewhere or mass. to a is weeks in a that on I ships -- talk spot have the number you last up not critical $XX,XXX $XX,XXX need that when market optimize.It's a that to it X I today you able also didn't that with to market was and asked You actually to couple I market, of go lot to But of also about markets also mentioned, about week $XX,XXX. but which last be would day around of have picked kind or X a I those ships. suggest that's

Operator

This would the I to Chief like back over remarks. session. any Emanuele Executive Officer, Lauro, closing turn concludes to conference question-and-answer our for

Emanuele Lauro

No Thank operator. remarks closing side. our from you,

thanking for Just lot. a all and you to looking Thanks attention very forward soon. speaking time today your and

Operator

attending for today's now has presentation. conference The concluded. Thank you

You may now disconnect.

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