Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Average TCE increased to $78,400 per day, surpassing peers and expected to rise further in the third quarter.
- Revenue aligned with guidance despite dry-dock delays, with subsequent dry-docks completed ahead of schedule and budget.
- Dividend maintained at $0.41 per share, supported by a strong backlog and new charter agreements.
- The first new build is on schedule for delivery at the end of October, with the second expected in the first quarter of 2025.
- Strong interest in long-term charters for the Kool Tiger, with potential for attractive winter rates.
Negative Points
- Revenue was impacted by extended off-hire periods due to dry-dock delays.
- Adjusted EBITDA decreased to $55.7 million from $58.5 million in the previous quarter.
- Net income fell to $26.1 million from $36.6 million in the first quarter, partly due to reduced unrealized gains on interest rate swaps.
- Operating income decreased by $2.7 million compared to the prior quarter.
- The LNG carrier market has been subdued over the summer, with term rates remaining relatively soft.
Q & A Highlights
Q: Could you provide additional color on the current market sentiment for the uncommitted new build and the appetite for contract length and options?
A: The market is split between those looking for long-term commitments and those playing short-term market weaknesses. We are optimistic about securing a long-term charter, as these processes typically result in deals. Short-term charters are influenced by market delays, contributing to a softer summer. - Richard Tyrrell, CEO
Q: How do the upgrades to TFDE vessels impact their desirability compared to modern two-strokes?
A: The upgrades add value and make the vessels more attractive. We share in the upside with charterers, potentially earning a few thousand dollars more than typical TFDE vessels. Quality tonnage is prioritized, and upgraded vessels are better positioned in the market. - Richard Tyrrell, CEO
Q: How do you see the Panama Canal's long-term slot allocation and reservoir expansion impacting global shipping routes?
A: More vessels will use the Panama Canal as capacity allows, but optimization will take time. The market has adapted to longer routes, with slower sailing offering fuel savings and environmental benefits. Some normalization is expected, but not significantly. - Richard Tyrrell, CEO
Q: What is your view on the spot market, especially with the winter season approaching?
A: The market could go either way, both favorable for shipping. A cold winter could increase storage demand, while volumes heading East to emerging markets like India and Thailand would benefit shipping due to longer distances. - Richard Tyrrell, CEO
Q: Regarding the Kool Tiger, what is your confidence in achieving the projected multi-month and long-term charter rates?
A: We are confident in achieving long-term rates similar to previous deals, with some variation based on contract duration. Short-term rates depend on the winter market, but $95,000 is a reasonable assumption. Our plan is to combine short-term and long-term charters for optimal results. - Richard Tyrrell, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
