Climent Molins

Climent Molins from Value Investor's Edge asked about the average speed of the VLGC fleet, specifically the potential for the eco-portion of the fleet to increase speed given solid rates, and the limitations imposed by environmental regulations. He also inquired about the performance improvements from installed energy-saving devices and silicone paint, including their impact on consumption levels and the typical Internal Rate of Return (IRR) or payback period for these investments.

Answer

Chief Commercial Officer Tim Hansen explained that non-LPG fuel eco-ships are largely capped by environmental regulations, allowing for only about 1-2 additional knots, while older vessels have no significant speed increase. He also noted that bad weather can further limit actual speeds. Head of Energy Transition John Lycouris stated that energy-saving devices and silicone paint each provide approximately a 5% improvement in energy saving, with a typical payback period of less than a year for these low-cost devices, though scrubbers have a longer payback.

Climent Molins from Value Investor's Edge asked about the potential for the VLGC fleet, particularly the eco-portion, to increase speed given solid rates, considering environmental regulations. He also sought more details on the energy-saving devices installed on vessels, including the resulting consumption improvements and the Internal Rate of Return (IRR) or payback period for these investments.

Answer

Chief Commercial Officer Tim Hansen explained that eco-type vessels are largely capped by environmental regulations, allowing only a marginal speed increase of one to two knots, with older ships having no additional leeway. Head of Energy Transition John Lycouris stated that energy-saving devices and silicone paints typically provide about a 5% improvement in energy saving, with a quick payback generally within a year for these low-cost devices, distinguishing them from scrubbers which have a longer payback period.

Climent Molins asked for specifics on Q1 2025 bookings, inquired about the exercise price for time-chartered vessels with purchase options, and questioned the company's view on share repurchases versus dividends given the stock's discount to NAV.

Answer

Theodore Young, an executive, reiterated forward guidance, stating that over 53% of Q1 available days were booked at an estimated TCE exceeding $37,000 per day, but declined to disclose purchase option prices. John Hadjipateras, Chairman, President and CEO, addressed shareholder returns by confirming the company has a repurchase authorization and is actively monitoring the stock price, indicating that accelerating buybacks is 'not off the table'.

Climent Molins from Value Investor's Edge inquired about the drivers behind the decline in Middle East exports and whether volumes would rebound if OPEC+ eases production cuts. He also asked for the expected timeline for the ammonia trade to meaningfully impact the VLGC market.

Answer

CEO John Hadjipateras confirmed that Middle East LPG exports are correlated with oil output and would likely increase if OPEC+ raises production. Regarding the ammonia trade, Hadjipateras explained that while the development of green ammonia is slower than the industry initially expected, he believes it could materialize suddenly. He noted that while it's uncertain if all new ammonia-capable vessels will carry ammonia upon delivery, a rapid development in the trade could be sufficient to absorb the new tonnage.

Climent Molins inquired about any one-off components in the Q3 interest expenses, the expected G&A run rate for Q4 and post-merger synergies, and whether the $1.57 billion in remaining CapEx commitments includes the recent CSOV new build.

Answer

CFO Ludovic Saverys explained that Q3 interest expenses were elevated due to more expensive bridge financing and arrangement fees from extensive refinancings, with optimization efforts planned for 2026. He noted that G&A has been impacted by M&A-related fees and will normalize as integration progresses, with a clearer run rate expected in 2026. He confirmed that the recent CSOV new build CapEx will be added in Q4.

Climent Molins, Head of Shipping Research at Value Investor's Edge, asked for clarification on CMB.TECH's interest expenses for the quarter, specifically if they included one-off costs. He also inquired about the expected G&A for Q4 and the run rate post-Golden Ocean merger synergies, and whether the remaining CapEx commitments included the recent CSOV newbuild.

Answer

CFO Ludovic Saverys explained that elevated interest expenses in Q2 and Q3 were due to more expensive bridge financing from leverage buyouts and arrangement fees from refinancings. He noted that G&A was impacted by M&A-related fees and is expected to normalize in 2026 after integration. He confirmed that the recent CSOV newbuild CapEx would be added to the Q4 remaining commitments.

Climent Molins asked about the factors contributing to the consistent and significant dirty over clean premium observed between Aframaxes and LR2s over the past couple of months.

Answer

Iraklis Sbarounis (CFO) attributed the premium to new LR2 deliveries, traditional Aframax owners initially trading clean, and increased compliant crude exports to India, Turkey, and China, which create more opportunities for dirty Aframaxes. He noted that dirty Aframaxes historically exhibit more volatility due to numerous regional trades. He anticipates greater flexibility with coated LR2s, allowing easier switching between clean and dirty markets, which should lead to rates finding balance over time. He also asked about the expected timing for the single Suezmax dry docking scheduled for 2026. Iraklis Sbarounis (CFO) stated that the dry docking for the Suezmax 'Milos' in 2026 is planned for the second half of the year, with flexibility to time it during a weaker market, and definitely not in Q1.

Climent Molins of Value Investor's Edge asked about the likely destination for Russian crude volumes if India continues to reduce its imports, questioning if China could absorb the excess. He also inquired about the enforceability and potential market impact of Europe's planned crackdown on refined products originating from Russian crude.

Answer

CEO Aristidis Alafouzos opined that China is the only viable outlet for Russian crude displaced from India and Turkey, a shift he believes would dramatically increase ton-miles and stretch the shadow fleet. Regarding the crackdown on refined products, he described the process of certifying non-Russian origin as 'messy' and unprecedented, suggesting significant implementation challenges and uncertain market effects.

Climent Molins of Value Investor's Edge inquired about the differential impact of U.S. versus European sanctions on the utilization of vessels in the Russian trade.

Answer

Aristidis Alafouzos (executive) explained that U.S. sanctions have a significantly larger and more direct impact on vessel utilization compared to EU or U.K. sanctions, particularly for trade involving Chinese buyers. He noted the effect of non-U.S. sanctions is more pertinent to Indian and Turkish buyers.

Climent Molins, Head of Shipping Research at Value Investor's Edge, asked about contracting discussions for older vessels like the Windsor Connexion, Forte Leyva, and Recife, comparing them to more modern tonnage, and whether the partnership considers disposing of these older vessels. He also inquired about the strategy for balancing fleet expansion with potential distribution increases in the medium term.

Answer

Derek Lowe, CEO & CFO of KNOT Offshore Partners, stated that the business model focuses on operating vessels rather than trading them, confirming active contracting discussions for all vessels without disclosing commercial details. Mr. Lowe explained that fleet growth through acquisitions is crucial for charter schedule expansion and fleet rejuvenation, viewing it as complementary to returns to unitholders, such as the unit buyback program, which is a smaller capital allocation compared to vessel acquisitions.

Climent Molins asked about contracting discussions for older vessels like Windsor Connexion, Forte Leyva, and Recife, comparing them to modern tonnage, and whether there's an appetite for vessel disposal. He also questioned how the company balances fleet expansion with potential distribution increases.

Answer

CEO and CFO Derek Lowe stated that KNOT Offshore Partners' business model focuses on operating vessels, not trading them, and confirmed active, ongoing contracting discussions for all vessels without disclosing commercial specifics. Mr. Lowe explained that fleet growth through acquisitions is crucial for expanding the charter schedule and rejuvenating the fleet, and that capital deployment for growth and unitholder returns (like the buyback program) are both necessary and not necessarily competing, given the scale of each.

Climent Molins from Value Investor's Edge asked about the contracting discussions for older vessels like the Windsor Connexion, Forte Leyva, and Recife, comparing them to more modern tonnage, and whether KNOT Offshore Partners has an appetite to dispose of these older vessels. He also questioned how the company plans to balance fleet expansion with potential distribution increases in the medium term.

Answer

CEO and CFO Derek Lowe stated that KNOT Offshore Partners' business model focuses on operating vessels rather than trading them, confirming active discussions with clients for these vessels. Mr. Lowe further explained that fleet growth through acquisitions and returns to unitholders, such as unit buybacks, are both considered necessary and complementary capital deployments, with acquisitions being crucial for fleet rejuvenation and maintaining average fleet age.

Climent Molins inquired about the specific timing for the Tove's dry docking and the potential cost advantages of modern shuttle tankers compared to older vessels.

Answer

CEO and CFO Derek Lowe indicated the Tove's dry docking is expected to straddle the end of Q3 and the start of Q4 2025. He found it difficult to comment on specific cost advantages between vessels of different ages, stating the 'eco component' is less of a factor in the shuttle tanker market and individual vessel costs are not disclosed.

Climent Molins asked about the pro forma debt repayment schedule following the Dan Sabia for Live Knutsen swap, specifically the impact on 2025 repayments. He also inquired about the North Sea market, asking if the start-up of the Penguins and Johan Castberg fields could help it close the performance gap with the Brazilian market.

Answer

CEO and CFO Derek Lowe advised that detailed debt information for the Live Knutsen facility would be provided in the upcoming 20-F filing, but confirmed its terms are highly comparable to the company's other debt facilities. Regarding market dynamics, Lowe stated that while the new North Sea projects are extremely welcome and key to that market's strengthening, the company does not view the two regions as directly competing to 'close a gap'.

Climent Molins from Value Investor's Edge inquired about the new ammonia carrier orders, asking if the Innova grant came with significant restrictions and if such grants could be repeated. He also asked about the deployment of proceeds from the sale of older vessels.

Answer

CEO Mads Peter Zacho explained that the Innova grant is tied to the vessel's advanced energy-efficiency technology but does not restrict global trading and is potentially repeatable for future innovative projects. CCO Oeyvind Lindeman and CEO Mads Peter Zacho clarified that proceeds from vessel sales are allocated via their capital program, with the near-term priority being the sale of more older ships rather than acquiring new ones, as the company has already made significant fleet renewal investments.

Climent Molins of Value Investor's Edge inquired about the primary driver for the quarter-over-quarter TCE rate increase and asked if deficiency payments from the Ethylene Export Terminal would boost the JV's Q2 contribution.

Answer

Chief Commercial Officer Oeyvind Lindeman attributed the TCE rate uplift primarily to the time charter market, as customers secured vessels at higher rates in anticipation of a tighter market in 2025. Chief Executive Officer Mads Peter Zacho confirmed that deficiency payments from the terminal will have a positive impact on the joint venture's financial results in the second quarter.

Climent Molins inquired about the long-term potential of the Morgan's Point terminal, asking if there is a clear path to reach its maximum flexible capacity of 3.2 million metric tons and the earliest possible timeline for this to occur.

Answer

EVP Randall Giveans explained that reaching maximum ethylene capacity is a long-term goal and not expected in the next 2-3 years. The path depends on the unwinding of existing ethane contracts on the flex train, particularly as partner Enterprise shifts ethane volumes to its new Neches River facility. The plan is for Morgan's Point to become increasingly flexible for ethylene over time as market conditions and contracts allow.

Climent Molins of Value Investor's Edge asked about the rate delta on rechartered semi-refrigerated and fully-refrigerated vessels and requested an update on the Blue Street CO2 shipping project MoU with Uniper.

Answer

CCO Oeyvind Lindeman highlighted a 10% year-over-year uplift in TCE rates, with Q3 averaging $29k/day versus $26k/day in the prior year. He stated the Uniper MoU is in a pre-FEED study phase, with commercial operations being a longer-term project targeted for the end of the decade.

Climent Molins of Value Investor's Edge asked for clarification on the timing of six anticipated drydockings mentioned for the second half of the year. He also inquired about GSL's future acquisition strategy, specifically the focus on larger vessels (e.g., over 4,000 TEU) relative to smaller feeder ships.

Answer

CEO Thomas Lister deferred the specific drydocking timing question for an offline follow-up. Executive Chairman George Youroukos answered the strategy question, stating a clear preference for post-panamax ships between 6,000 to 10,000 TEU due to their flexibility and cargo capacity. However, he emphasized this is a preference and does not exclude acquiring smaller ships if a deal makes strong economic sense.

Climent Molins asked about GSL's strategy for handling environmental regulations, improving vessel efficiency and CII ratings, and the rationale for issuing shares via its ATM program given the company's strong financial position.

Answer

Executive Thomas A. Lister explained that GSL collaborates with charterers on vessel retrofits, installs automated data capture systems, and ensures biofuel compatibility to improve efficiency and CII ratings. Regarding the ATM, he stated it's a tool for maintaining optionality, used opportunistically to issue shares at a favorable price ($27) and was halted when the price declined, reflecting a disciplined capital allocation strategy.

Climent Molins of Value Investor's Edge asked for commentary on speculative ordering in the feeder ship segment and inquired about how Danaos secured a prompt 2027 delivery for its most recent newbuild addition.

Answer

CEO John Coustas stated that the company is cautious about speculative feeder orders because it's difficult to secure long-term charters for them, and charterers are shifting towards larger, more efficient vessels. He clarified the prompt 2027 newbuild delivery was not a resale but was secured due to a strong, direct relationship with the shipyard, which offered an available construction berth.

Climent Molins from Value Investor's Edge asked for details on the dry bulk fleet's utilization, including scheduled off-hire days and the dry docking schedule. He also inquired about the company's appetite to expand its Capesize fleet.

Answer

CEO John Coustas clarified that nearly the entire dry bulk fleet completed dry docking and efficiency upgrades in the last six months, with no further dry dockings planned for the next 2-3 years. He also confirmed that Danaos remains focused on the Capesize segment and will increase its presence if vessel prices are attractive.

Climent Molins of Value Investor's Edge asked for confirmation on the timing of the recently completed share repurchase program and inquired about the chartering strategy for Capesize vessels with contracts expiring later in the year.

Answer

President Dr. Loukas Barmparis confirmed the entire 3 million share repurchase program was completed within the first quarter. Executive Polys Hajioannou explained the chartering strategy for upcoming open Capesize vessels, stating they will likely trade on the spot market due to unattractive period rates, unless a multi-year charter above $20,000/day becomes available.

Climent Molins of Value Investor's Edge asked for details on the specific upgrades and costs for the Hercules rig, the spending cadence for remaining container ship CapEx, and the Board's rationale for maintaining the dividend while balancing it with share repurchases.

Answer

Executive Ole Hjertaker detailed the Hercules upgrades, including a new drilling control system ($7-8M) and other work, emphasizing the investment maintains the rig's marketability and avoids costly reactivation from a cold stack. COO Trym Sjolie clarified that the remaining ~$18M in container ship upgrade costs will be incurred in Q2 and Q3 and are fully covered by charter rate increases. Ole Hjertaker also explained the dividend reflects long-term sustainable cash flow and that capital allocation, including recent buybacks, aims to maximize long-term shareholder value.

Climent Molins inquired about the strategy for redeploying net proceeds from the sale of eight Capesize vessels to Golden Ocean and asked for the timeline on a potential appeal of the $48 million Seadrill legal ruling.

Answer

CEO Ole Hjertaker stated that the company is segment-agnostic and will reinvest the capital based on the best risk-adjusted returns, not necessarily within the dry bulk sector. CFO Aksel Olesen addressed the legal question, noting the appeal deadline is March 5th, and if an appeal is filed, a new ruling could take up to another 12 months.

Climent Molins from Value Investor's Edge followed up on the Hercules rig, asking if revenue from the Equinor contract would be recognized in Q4 and requesting an estimate for daily expenses if the rig remains idle in 2025.

Answer

CEO Ole Hjertaker confirmed that revenue for the Hercules rig will be recognized in Q4, covering approximately two of the three months. For a potential idle period, he estimated daily operating expenses would be in the $75,000 to $100,000 range, a significant reduction from the ~$200,000 per day when fully operational. He stressed that the primary goal is to secure a new contract to generate positive cash flow.

Climent Molins asked if the newly acquired handysize vessels are expected to have lower daily operating expenses (OpEx) than the existing fleet and requested clarification on the amount of operating lease liabilities on the balance sheet.

Answer

CEO Mark Filanowski responded that the OpEx for the new handysize vessels is expected to be fairly similar to their Supramax vessels. CFO Gianni DelSignore clarified that the company has no operating leases capitalized on its balance sheet, as its charter-in strategy relies on short-term contracts that do not meet the accounting criteria for capitalization.

Climent Molins inquired about the strategic rationale for buying out the post-panamax JV interest now versus later and the potential for a similar transaction with the NBHC joint venture. He also asked about the future growth strategy for the services and terminals business, questioning whether it would be organic or through acquisitions.

Answer

Executive Mark Filanowski explained the JV buyout was opportune for both parties, simplifying Pangaea's balance sheet and consolidating its ice-class assets. He noted that while an NBHC buyout could be pursued if an opportunity arose, nothing is currently planned. Regarding the services business, Filanowski confirmed the strategy is primarily organic growth, citing the new Tampa facility and a potential Texas contract, while preferring an asset-light model over expensive land acquisitions for now.

Climent Molins of Value Investors Edge asked about the strategic trade-off between opportunistic growth via acquisitions and shareholder returns through share repurchases. He also inquired about drivers, beyond a flat forward curve, for the decline in vessels used for floating storage.

Answer

Richard Tyrrell (executive) clarified that the share repurchase program remains active and serves as a key benchmark against which any potential growth opportunity is measured. He attributed the decline in floating storage primarily to the flat price curve, which was exacerbated by Europe's aggressive refilling of storage, elevating prices during shoulder periods and eliminating the contango trade that typically incentivizes storage.

Climent Molins asked for the company's perspective on the potential impact of proposed U.S. port fees on Chinese-built vessels and how such a policy might affect global dry bulk trading patterns.

Answer

Peder Carl Simonsen, Interim CEO and CFO, commented that the proposal is still on the drawing board and lacks detail. He emphasized that for dry bulk, U.S. volumes are not a primary driver and can be replaced from other sources. He believes that, similar to other regulations, any additional costs would ultimately be passed on to the end-user through freight rates and would not fundamentally alter the dry bulk shipping outlook.

Climent Molins inquired about the seven vessels chartered-in under long-term agreements, asking if they are on fixed-rate contracts and requesting clarification on what portion of the quarter's $26 million in charter-in expenses was attributable to them.

Answer

CEO Petros Pappas confirmed that the seven long-term chartered-in vessels are on fixed-rate contracts for their initial seven-year duration. CFO Simos Spyrou clarified that the total charter-in expense also includes short-term charters and legacy Eagle Bulk vessels, and estimated that approximately 50% of the $26 million expense was attributable to the seven long-term chartered-in vessels.

Climent Molins asked how containership chartering discussions, including rates and durations, have evolved recently as a normalization in the Red Sea seems possible. He also inquired about the investment pipeline for Neptune Maritime Leasing and whether additional capital investments are planned for the coming quarters.

Answer

Gregory Zikos (Executive) clarified that the 12 recently announced charters were negotiated months ago, prior to recent ceasefire discussions. He noted that there has been no pressure on charter rates so far and that a return to normal Suez Canal transit may take time. Regarding Neptune Maritime Leasing, he confirmed a healthy pipeline with total investments and commitments over $500 million, adding that future equity contributions depend on securing back leverage for new deals on a case-by-case basis.

Climent Molins asked about the evolution of containership chartering discussions, specifically regarding rates and durations, given the potential for trade normalization in the Red Sea. He also inquired about the deal pipeline for Neptune Maritime Leasing and plans for further investment.

Answer

Executive Gregory Zikos clarified that the recently announced charters were negotiated months prior to ceasefire talks and that, currently, there is no downward pressure on charter rates. He noted the situation remains fragile. Regarding Neptune Maritime Leasing, Zikos confirmed a healthy pipeline with total investments and commitments approaching $500 million, adding that future equity contributions depend on securing back-leverage for new deals on a case-by-case basis.

Asked about the impact of the Red Sea situation on containership chartering discussions and rates, and for an update on the Neptune Maritime Leasing platform's pipeline and future investment plans.

Answer

The executive stated that recent charter deals were negotiated before the Red Sea news and that current rates and asset values remain firm, with the normalization of trade routes being uncertain. For Neptune Maritime Leasing, there is a healthy pipeline, and future equity contributions will depend on securing back leverage for new deals.

Climent Molins asked for the company's view on current asset pricing in the dry bulk sector, particularly for Capesize vessels, and separately inquired about any appetite to acquire modern containerships.

Answer

Executive Gregory Zikos stated that asset prices for Capesize vessels, especially newbuilds, are currently considered high and potentially 'a bit overpriced' relative to their chartering capacity, prompting a more cautious approach. On the containership side, Zikos confirmed that prices for both newbuilds and modern secondhand vessels remain high, creating what he termed 'excessive residual value risk.' This is the primary reason the company has maintained a conservative approach and has not recently acquired modern tonnage.

Climent Molins of Value Investor's Edge questioned the company's view on dry bulk asset pricing, its preference for Capesize exposure, and its appetite for acquiring modern containerships.

Answer

Executive Gregory Zikos stated that dry bulk asset prices, particularly for Capesize vessels, may be overpriced relative to their chartering potential, prompting a cautious acquisition approach. On the containership side, he affirmed that prices for modern tonnage remain historically high, representing an 'excessive residual value risk' that the company is currently avoiding.

Climent Molins from Value Investor's Edge inquired about the chartering strategy for the 2027 newbuilds, asking if the company would secure contracts soon or wait until closer to delivery. He also asked about the company's appetite for a dividend increase given the strong earnings visibility.

Answer

Executive Aristides Pittas stated that the company is very comfortable waiting until closer to the 2027 delivery date to charter the new vessels but would consider an attractive long-term offer if one emerged. Regarding the dividend, he confirmed it is a regular discussion point for the Board, which will re-evaluate it for the year-end results, balancing shareholder returns with growth investments and the active share repurchase program.