Omar Nokta

Omar Nokta with Clarkson Securities inquired about the drivers behind the counter-seasonal strength in the spot VLGC market rates, which are at 2+ year highs, and what this implies for the overall market outlook in 2026. He also asked about the deployment of Dorian LPG's fleet, specifically the time charter for the Chaparral into 2027, seeking details on the rate. Finally, he questioned the funding strategy for the remaining $62 million payment for the newbuilding delivery.

Answer

Chief Commercial Officer Tim Hansen attributed the Q1 strength to a spillover from Q4 2025's uncertainties, including less activity, U.S. fog, and Saudi pricing adjustments, alongside increasing production levels and efficient U.S. terminal operations, leading to a positive outlook for 2026. CEO John Hadjipateras and Tim Hansen noted that specific time charter rates are not disclosed but described the Chaparral's charter as an opportunistic deal. CFO Ted Young added that forward booking information is provided later in the quarter due to market volatility and highlighted Brazil as a potential growth market. Ted Young also confirmed plans to finance the newbuilding payment, with further details to be announced.

Omar Nokta with Clarkson Securities inquired about the drivers behind the counter-seasonal strength in the spot VLGC market, which has reached 2+ year highs, and what this trend implies for the overall market outlook for 2026. He also asked for details on the rate for the Chaparral's time charter into 2027 and the funding plan for the upcoming newbuilding delivery.

Answer

Chief Commercial Officer Tim Hansen attributed the market strength to a spillover from Q4 2025 uncertainties, increased production levels, and U.S. terminal efficiency, expressing a positive outlook for 2026. Regarding the Chaparral's charter, Mr. Hansen noted it was an opportunistic deal, while CFO Ted Young mentioned forward booking details would be provided later due to volatility and highlighted Brazil as a growth market for the charter. Mr. Young also confirmed plans to finance the newbuilding payment, with details to follow.

Omar Nokta from Jefferies inquired about the key drivers behind the recent surge in VLGC spot rates, why freight is capturing a larger share of the U.S. export arbitrage, and the potential impact of ethane carrier competition.

Answer

Chairman, President & CEO John Hadjipateras, Chartering Manager Taro Rasmussen, and CFO Theodore Young explained the market strength is due to fundamental U.S. NGL export growth, trade flow adaptability, and Red Sea disruptions. They noted that expanded terminal capacity has lowered terminal fees, allowing freight to capture more of the arbitrage. They view ethane carriers as a potential overhang for the VLGC market if that trade is disrupted, but consider it an unlikely scenario.

Omar Nokta of Jefferies inquired about the drivers behind the recent VLGC market strength and extreme volatility, asking what trade pattern changes have emerged from the U.S.-China tariff situation. He also asked if management's comment that the dividend was set before recent trade talks hinted at a more generous future payout.

Answer

Chief Commercial Officer Tim Hansen attributed the rate strength to altered trade flows increasing ton-miles, as U.S. cargoes shifted to India and Southeast Asia. He noted that while these new routes have somewhat settled, the market was already fundamentally firm due to limited newbuilding deliveries and high drydocking activity. CEO John Hadjipateras added that current rates feel sustainable. Regarding the dividend, CFO Theodore Young clarified the decision was based on information available at the time and would not commit the Board to future actions, despite acknowledging the improved rate outlook.

Omar Nokta inquired about Dorian LPG's capital allocation priorities for 2025 amidst potential freight rate moderation and also asked about the market's ability to absorb the significant upcoming supply of new VLGCs and VLECs.

Answer

John Hadjipateras, Chairman, President and CEO, stated that capital allocation priorities remain consistent: prudent debt management, maintaining a strong cash position, and shareholder dividends. He expressed confidence that growth in the LPG trade and the emerging ammonia market would be sufficient to absorb the new vessel deliveries scheduled for 2026 and 2027, and clarified that new VLECs are expected to be absorbed by the expanding ethane trade rather than competing in the VLGC market.

Omar Nokta from Jefferies asked about the impact of U.S. terminal capacity constraints on VLGC spot rates, the potential for a soft patch until new terminals come online, and the outlook for winter seasonality's effect on the export arbitrage. He also requested clarification on forward bookings.

Answer

CEO John Hadjipateras stated that Panama Canal transit efficiency is a more significant factor for rates than terminal capacity, expecting increased demand from other vessel types to tighten the canal for VLGCs. Both Hadjipateras and CCO Tim Hansen noted that while a cold U.S. winter could pressure the arbitrage, high inventories should sustain exports, with the market's direction hinging on Asian demand and canal congestion. Executive Theodore Young reiterated forward guidance, stating that for the quarter ending December 31, 2024, over 60% of available days in the Helios pool are fixed at a TCE above $40,000 per day.

Omar Nokta inquired about Frontline's LR2 trading strategy, particularly the current gap between dirty and clean markets, and addressed recent chatter about selling the entire LR2 fleet. He also asked about the potential use of proceeds if the LR2s were sold and the likelihood of upside to the Q4 VLCC earnings guidance given current spot rates.

Answer

CEO Lars Barstad denied any plans to sell the LR2 fleet. He explained that many LR2s are currently trading dirty due to strong crude markets, and Suezmaxes are not cleaning up for clean cargoes, creating limited clean LR2 availability and potential for exponential rate developments. If LR2s were divested, Mr. Barstad indicated a natural focus on expanding the VLCC fleet, aligning with Frontline's long-term strategy and market outlook. Regarding Q4 VLCC earnings, he clarified that load-to-discharge accounting means only a portion of recent high-rate fixtures for December loadings will impact Q4, with the remainder flowing into January.

Omar Nokta inquired about Frontline's LR2 trading strategy, particularly concerning the spread between dirty and clean markets, and addressed rumors about the sale of the LR2 fleet. He also asked about the hypothetical use of proceeds from an LR2 sale and the potential for Q4 2025 realized rates to exceed current guidance given high spot rates and load-to-discharge accounting.

Answer

CEO Lars Barstad denied any plans to sell the LR2 fleet. He noted that many LR2s are currently trading dirty due to strong crude markets, limiting clean LR2 availability and suggesting potential for exponential rate developments. Hypothetically, if LR2s were divested, Mr. Barstad indicated a strategic focus on reinvesting in VLCCs, aligning with Frontline's long-term growth and economies of scale. For Q4 2025 rates, he explained that load-to-discharge accounting means only a portion of current high spot rates will be recognized in the quarter, making it difficult to definitively project upside.

Omar Nokta of Jefferies inquired about the dynamics of the long-haul VLCC trade, specifically the recent increase in west-to-east flows and how that might be affected by upcoming OPEC volume increases. He also asked for the drivers behind the recent spike in VLCC spot rates and the market's ability to sustain momentum.

Answer

CEO Lars Barstad suggested a potential winter contango in crude prices could further increase tanker utilization by incentivizing inventory builds and longer voyages. He attributed recent rate strength to a demand shift towards compliant tankers as sanctioned oil trade tapers off. Barstad noted a market ceiling around $50,000/day for VLCCs but expressed optimism that strong fundamentals and tight vessel availability could soon push rates through that level.

Omar Nokta questioned the current VLCC rate structure, asking if the full benefit of sanctions has been realized, and inquired about the primary driver for the recent refinancing of 24 VLCCs.

Answer

Executive Lars Barstad stated that the full market impact of sanctions has not yet been seen and that incremental oil demand is now being met by compliant sources, which should benefit the compliant fleet. Executive Inger Klemp confirmed the main driver for the refinancing was a significant margin reduction, from approximately 200 basis points to 170, with the extended duration being a secondary benefit.

Omar Nokta of Jefferies inquired about the Q1 2025 rate guidance, specifically asking how to account for ballast and non-earning days for the remainder of the quarter. He also asked for the reason behind the significant performance spread between Frontline's VLCCs and Euronav's vessels during Q4.

Answer

Executive Inger Klemp suggested using the historical pattern of guided versus actual reported rates as a 'rule of thumb' to estimate the final Q1 figures. Executive Lars Barstad added that trading patterns, particularly the proportion of long-haul voyages, materially affect ballast days and final TCE results. Regarding the performance spread, Barstad explained it was a result of a strategic decision to position non-scrubber vessels for a late-quarter rate spike in the Middle East that did not occur, which led to underperformance relative to vessels committed to long-haul voyages.

Omar Nokta of Jefferies questioned the development of the VLCC market, asking if rates could break out of their narrow range this winter, and requested a base case outlook for VLCC earnings potential in 2025 compared to 2024.

Answer

Executive Lars Barstad explained that while the VLCC market is range-bound, the balance is not 'completely awful,' but lacks the incremental barrels needed to push rates higher, particularly from the Atlantic basin to Asia. For 2025, he expressed that the market is highly sensitive to geopolitical events, such as potential changes to Iran sanctions, which could create a very strong position for tankers, and that he is hopeful 2025 will deliver the strength he previously anticipated for 2024.

Omar Nokta from Jefferies questioned the factors behind Frontline's strong Q3 VLCC bookings despite a soft spot market. He also asked about the potential market impact of prolonged Libyan export disruptions and increased scrutiny on Iranian crude, particularly concerning the 'dark fleet'.

Answer

Executive Lars Barstad explained that the robust VLCC bookings were due to their load-to-discharge reporting and strategic fleet repositioning away from the Middle East. He noted that Libyan disruptions now have a more localized impact. Regarding sanctions, Barstad argued that the 'dark fleet' is unlikely to return to the compliant market and may eventually become oversupplied as older vessels from the compliant fleet transition into it, which could trigger scrapping.

Omar Nokta inquired about the ongoing market speculation regarding a potential management buyout (MBO) and sought clarification on the recent changes to ZIM's board composition. He also asked about ZIM's strategy for returning to the Red Sea and its potential impact on Asia-Europe market share, as well as expectations for 2026 cost trends given current vessel redeliveries.

Answer

ZIM President and CEO Eli Glickman stated that the board is managing the process of board member changes, with two new highly professional members appointed, but declined to comment on MBO speculation. Glickman confirmed ZIM's willingness to return to the Red Sea/Suez Canal as soon as insurance companies approve, viewing it as an opportunity to potentially expand in Asia-Europe routes. CFO Xavier Destriau explained that ZIM is likely to continue returning less efficient, older, and more expensive vessels in 2026, focusing on operating larger, newer, and greener capacity, which should impact cost trends.

Omar Nokta inquired about market chatter regarding a potential management buyout, recent changes to the board composition, ZIM's strategy for returning to the Red Sea and potential market share gains on Asia-Europe routes, and expectations for cost reductions in 2026 due to vessel redeliveries.

Answer

President and CEO Eli Glickman stated that the board is managing the process of board member changes, with two new professional members appointed, and declined to comment on management buyout discussions. He confirmed ZIM's readiness to return to the Red Sea for shorter trade routes as soon as insurance approval is secured. CFO Xavier Destriau explained that ZIM is likely to continue redelivering less efficient, older, and non-LNG vessels in 2026 if freight rates remain pressured, noting that operated tonnage decreased from 780,000 TEUs at the start of 2025 to 710,000 TEUs currently.

Omar Nokta from Jefferies inquired about the drivers for the flat full-year volume guidance, questioning whether it was due to market weakness or a strategic pullback by ZIM. He also asked about the renewal strategy for the 34 vessels with expiring charters through 2026 and why reinstated Transpacific capacity has not been rerouted despite soft market conditions.

Answer

CFO Xavier Deslio explained that the flat volume guidance stems from a difficult year-over-year comparison against record volumes in H2 2024 and expectations for a weaker peak season in 2025. Regarding the 34 vessels, he stated that ZIM will use this flexibility to downsize its fleet if market conditions continue to deteriorate. For the Transpacific capacity, he suggested that robust volumes are still anticipated for the second half and that recent alliance reshuffles may have reduced operational agility among carriers.

Omar Nokta asked for clarification on why the Transpacific contract volume settled at a 30/70 split with spot rates, rather than the previously discussed 50/50 target. He also questioned the rationale for lowering the full-year volume growth forecast and asked for the proportion of Transpacific volume originating directly from China.

Answer

CFO Xavier Destriau clarified that while ZIM was open to a 50/50 contract split, the company maintained strict discipline on minimum acceptable rates. This, combined with some customers' 'wait-and-see' approach amid tariff uncertainty, led to the 30% contract level. The volume forecast was lowered due to a slower-than-expected post-Chinese New Year recovery and minor utilization effects from the new MSC partnership. He confirmed that China accounts for the significant majority, 60-70%, of ZIM's Transpacific cargo.

Omar Nokta sought to confirm if 2025 lease payments would be around $1.7-$1.8 billion and asked if the sustained volume run rate assumes the renewal of half its expiring charters. He also asked a strategic question about whether ZIM would consider diversifying into logistics given market complexities and its cash position.

Answer

CFO Xavier Destriau confirmed that 2025 lease payments would be 'clearly below the $2 billion mark.' He explained that even if no charters were renewed, average operated capacity in 2025 would still exceed 2024 levels, supporting volume. Strategically, he stated that ZIM's priority remains being a highly competitive ocean player, leveraging its modern fleet, LNG strategy, and key partnerships, rather than diversifying away from its core shipping business.

Omar Nokta asked about the confidence behind the special dividend, ZIM's strategic positioning for an uncertain 2025, and whether the special payout impacts the potential for a full-year dividend true-up. He also inquired about recent spot market trends and any lingering financial effects from the brief U.S. East Coast strike.

Answer

CFO Xavier Destriau explained that the special dividend reflects strong performance and a commitment to shareholders, noting the board will review the full-year payout policy in March. He stated ZIM is well-prepared for 2025 with its cost-efficient new fleet, flexibility to redeliver older ships, and proven agility. He also noted strong post-Golden Week demand and rate stabilization. CEO Eliyahu Glickman added that the results and dividend show confidence stemming from the new LNG fleet and the successful strategy of favoring spot rates.

Omar Nokta from Jefferies questioned Star Bulk Carriers' strategic focus on Kamsarmax newbuildings, seeking insight into the rationale behind this fleet composition choice over other vessel classes like Ultramaxes or Capes. He also inquired about strategies to bolster the company's Capesize presence given the current market for newbuildings and secondhand vessels.

Answer

CEO Petros Pappas explained that the Kamsarmax acquisitions are part of a fleet renewal strategy, capitalizing on early 2026 deliveries of scrubber-fitted eco-vessels at favorable prices. He detailed an arbitrage calculation, demonstrating that two Kamsarmaxes can yield similar EBITDA to a Capesize, making them an attractive investment given the scarcity of Capesize newbuilding slots. Mr. Pappas further elaborated on the value of Supramaxes through "pendulum trade" and their cost-effectiveness. Regarding Capesize vessels, he noted their high cost and limited availability of quality secondhand options. He also highlighted the company's disposal of approximately 28 older Supramaxes to rebalance the fleet, with Vice President Hamish Norton adding that they are retaining better-performing Ultramaxes.

Omar Nokta from Jefferies asked about Star Bulk Carriers' strategic focus on Kamsarmax newbuildings, inquiring into the specific advantages of this vessel class over Ultras or Capes. He also questioned the company's strategy for bolstering its Capesize presence, particularly given the long lead times for newbuilding orders, and discussed the approach to managing the existing Ultramax and Supramax fleet.

Answer

Petros Pappas (CEO, Star Bulk Carriers) explained that Kamsarmax newbuildings facilitate fleet renewal, were secured with early 2026 deliveries at low prices, and are scrubber-fitted eco vessels. He highlighted an arbitrage opportunity, noting that two Kamsarmaxes (totaling $70 million) offer similar investment returns to a Capesize, especially with Capesize newbuildings unavailable until late 2027/2028. He also detailed the 'pendulum trade' for Supramaxes, which makes them economically equivalent to Kamsarmaxes and Capes. Regarding Capesize presence, Mr. Pappas noted the high cost and limited availability of quality secondhand Capes. He added that the company has disposed of approximately 28 older, non-eco Supramaxes over the past 1.5-2 years to balance the fleet, while Hamish Norton (VP, Star Bulk Carriers) confirmed they are retaining better Ultramaxes.

Omar Nokta from Jefferies asked for management's perspective on the drivers behind the recent market improvement, its effect on seasonality, and how the company is balancing its share buyback program against dividend payments given recent stock performance.

Answer

CEO Petros Pappas attributed the market strength to seasonality, record June export volumes, a vessel location imbalance between the Atlantic and Pacific, and strong grain exports from Brazil. President Hamish Norton addressed capital allocation, stating that if the stock is cheap, they will prioritize buybacks, and if it performs well, they will build a cash reserve for future opportunities, likely capping the dividend at around 60% of cash flow.

Omar Nokta from Jefferies asked for a long-term outlook on the dry bulk market, highlighting the current state where freight rates are stable but not exciting, while vessel asset values remain high, and questioned how this tension might resolve.

Answer

CEO Petros Pappas provided a detailed analysis of market pros and cons. He noted positive drivers like long-haul bauxite and iron ore demand, environmental regulations, and potential reconstruction projects. Conversely, he pointed to negatives such as reduced Chinese coal and grain imports and low scrapping rates. Pappas concluded that he expects a moderate market following seasonal patterns, with potential for significant upside if geopolitical conflicts resolve, but acknowledged the year would likely be volatile.

Omar Nokta sought clarification on the calculation of 'excess cash' under the new dividend policy and asked about the capital allocation strategy, specifically whether share buybacks are funded only by the 40% of excess cash or if proceeds from vessel sales could also be used.

Answer

Executive Christos Begleris confirmed that excess cash is calculated as operating cash flow less debt principal repayments and dry dock expenses, subject to a per-vessel cash threshold. Executive Hamish Norton emphasized the company's flexibility, stating the 60% dividend is a maximum payout and that cash from operations or vessel sales can be used for buybacks or other opportunities. CFO Simos Spyrou provided a Q4 example, noting that the remaining 40% of excess cash was used for buybacks, and additional shares were repurchased using funds from vessel sales.

Omar Nokta asked about the progress of synergies from the Eagle Bulk merger, seeking clarity on the path to the $50 million target, future G&A expense modeling, and the reasons for the market divergence between strong Capesize rates and weaker sub-cape vessel performance.

Answer

COO Nicos Rescos and CFO Christos Begleris confirmed they are on track for the synergy target, noting the current annual run rate is $26 million from OpEx and G&A, with more savings expected from dry docks. Executive Simos Spyrou added details on G&A reduction. CEO Petros Pappas provided a comprehensive analysis of Panamax weakness, attributing it to supply growth, reduced port congestion, short-haul trade patterns, and lower long-haul grain exports.

Omar Nokta inquired about the drivers behind the robust demand for container shipping charters and newbuilding orders despite market uncertainties like lower trade, tariffs, and Red Sea transit issues, and whether this strong appetite is expected to persist into 2026. He also asked about Danaos' strategy for its Capesize vessel investments, including the recent 11th acquisition, and the rationale behind the age range of these vessels. Finally, he questioned the recent pace of the share repurchase program and future expectations.

Answer

CEO John Coustas explained that global production capacity remains unchanged, with goods redirected from China, and noted significant market dynamism outside traditional Western areas, particularly driving demand for mid-sized ships. He indicated difficulty in predicting 2026, pending the Red Sea canal reopening. Regarding Capesize investments, Dr. Coustas stated the intent to grow this segment, which currently represents less than 5% of total assets, by selectively acquiring good quality second-hand vessels as newbuildings are not currently sensible. CFO Evangelos Chatzis and CEO John Coustas confirmed the share repurchase program is ongoing, albeit at a smaller pace, as they believe the stock remains undervalued.

Omar Nokta inquired about the drivers behind the robust demand for container shipping charters and newbuilding orders despite market uncertainties, and whether this trend is expected to continue into 2026. He also asked about Danaos Corporation's strategy for its Cape-sized vessel investments and the recent activity, or lack thereof, in the company's share repurchase program.

Answer

CEO John Coustas explained that global production capacity remains strong, with goods redirected from China, and noted significant market dynamism outside traditional Western areas, particularly for mid-sized vessels. He acknowledged the difficulty in predicting 2026 but highlighted Danaos's strong fixed position for 2027. Regarding Cape-sized vessels, Mr. Coustas stated the intention to grow this segment, which currently represents less than 5% of total assets, by selectively acquiring good quality second-hand vessels. On share repurchases, Mr. Coustas confirmed the program is ongoing at a slower pace due to the belief that the stock remains undervalued, a point reinforced by CFO Evangelos Chatzis.

Omar Nokta of Jefferies inquired about the current charter market dynamics, the pace of forward fixing, capital allocation strategies including the pause in share buybacks, and the recent increase in daily vessel operating costs.

Answer

CEO John Coustas described the charter market as stable with strong demand, not anticipating significant changes in 2025. He explained the share buyback was paused due to the stock's rapid appreciation, deeming it more beneficial for long-term shareholders. CFO Evangelos Chatzis clarified that the Q2 rise in operating costs was due to specific bulk orders and is expected to normalize over the full year.

Omar Nokta asked about the company's strategy of pausing new vessel investments, the potential pace of future share buybacks given the stock's recent appreciation, and the rationale behind increasing its investment stake in Star Bulk.

Answer

John Coustas, an executive, explained that the focus is on optimizing the existing fleet with energy-saving devices to enhance competitiveness. He noted that while the company is generating significant cash, new vessel investments are on hold due to high prices and regulatory uncertainty around future fuels. Regarding buybacks, Coustas stated no specific targets are set for executing the remaining $100 million authorization. On the Star Bulk investment, Coustas called it a sensible opportunity, and Evangelos Chatzis, an executive, added that the additional shares were purchased at a compelling price to lower their average cost.

Omar Nokta from Jefferies inquired about Danaos's trajectory towards a net cash position in 2025, the company's strategic preference regarding leverage, the confidence behind recent newbuilding orders, and the current share count after recent buybacks.

Answer

CEO John Coustas explained that despite a new $850 million financing facility, the company's strong cash generation ensures it will not reach a negative net cash position. He noted confidence in new orders stems from market demand for modern ships and secured financing for other vessels, minimizing risk. Executive Evangelos Chatzis confirmed the share count is now just below 19 million, at approximately 18.8 to 18.9 million shares.

Omar Nokta of Jefferies Financial Group Inc. asked about Danaos's strategy for newbuild vessel orders given high prices and regulatory uncertainty, and also inquired about the company's outlook and future plans for its dry bulk segment following recent market softness.

Answer

CEO John Coustas stated that Danaos is temporarily pausing newbuild orders due to a combination of high asset prices (up 15-20%), which reduce returns, and significant uncertainty regarding future environmental regulations under the new U.S. administration. Regarding the dry bulk segment, Coustas described it as an "experience-building phase" with their 10-ship fleet. He confirmed they would consider acquiring more assets opportunistically but remain cautious due to the segment's dependence on Chinese demand and potential U.S. policy shifts.

Omar Nokta with Jefferies inquired about Navios Maritime Partners' strategy for fixing its vessels into 2026, specifically whether the company plans to keep the 42% of available days open to the spot market or pursue further long-term contracts, given its low break-even rate of $894 per day on open days. He also asked about opportunities in smaller containership segments and the deployment of proceeds from the recent $300 million bond issue.

Answer

CEO Angeliki Frangou and COO Stratos Desypris explained that the majority of open days are in dry bulk, where they see significant upside and healthy forward rates, providing flexibility. Ms. Frangou acknowledged increased activity in smaller containerships due to market inefficiencies but stressed careful consideration of counterparty, duration, and residual value risk for newbuilds. Regarding the bond proceeds, Ms. Frangou stated they were used to refinance existing floating rate debt, fix interest rates, diversify funding, and release $1.2 billion of debt-free vessels, enhancing optionality.

Omar Nokta inquired about Navios Maritime Partners' strategy for fixing its open vessel days in 2026, particularly given the low break-even rate of $894 per day on 42% of available days, asking if the company plans to keep these open for spot market exposure or continue securing long-term contracts. He also asked about opportunities in the sub-2,000 TEU feeder containership market and the deployment strategy for the $300 million bond proceeds.

Answer

CEO Angeliki Frangou and COO Stratos Desypris explained that the company maintains maximum flexibility, with most open days in dry bulk, and is comfortable fixing quarter-forward. They noted that containerships are largely covered, and dry bulk is showing strong rates, providing significant upside. Ms. Frangou added that while there's increased activity in smaller containerships, careful consideration of counterparty, duration, and residual value risk is crucial. Regarding the bond proceeds, Ms. Frangou highlighted that the unsecured bond diversified funding, fixed interest rates, and released $1.2 billion in debt-free vessels, providing significant optionality without increasing net debt.

Omar Nokta from Jefferies inquired about the two VLCCs recently freed from charter due to OFAC sanctions, asking about the re-chartering strategy and the finality of the contract termination. He also questioned the fleet renewal strategy, specifically regarding the charter status of new LR2 orders and the potential sale of other older container ships rolling off charter.

Answer

Chairwoman and CEO Angeliki Frangou confirmed the VLCC contract termination is irreversible and credited the risk management team for the swift action. She stated the vessels will trade in the healthy spot market, with long-term charters considered at an opportune time. Regarding fleet renewal, Frangou explained the sale of older container ships was a strategic move to capitalize on strong market prices. She noted that while new LR2 tankers were ordered without charters, reflecting confidence in the sector, the company would not acquire new container ships without charters in place.

Omar Nokta asked about Navios Partners' capital allocation strategy amidst significant geopolitical and market uncertainty, questioning the pace of share buybacks, the approach to fleet renewal, and the priority of cash preservation. He also inquired about current opportunities for asset acquisitions with long-term charters and sought commentary on asset value trends across the container, tanker, and dry bulk segments.

Answer

Executive Angeliki Frangou emphasized that "patience" is the core strategy in the current uncertain environment shaped by wars and U.S. tariffs. She highlighted the importance of past actions, including building a $340 million cash position, securing a $3.4 billion contract backlog, and deleveraging to a 35.2% net LTV. Frangou noted that while the company continues its capital return program, flexibility is paramount. She stated that large-scale newbuild-with-charter deals are scarce, but new opportunities may emerge from shifting trade patterns. Regarding asset values, she pointed to strength in the tanker market and the surprising resilience of the spot market across segments, which she views as a healthy sign.

Omar Nokta of Jefferies asked how significant geopolitical uncertainties, including tariffs and sanctions, are influencing Navios Partners' operational strategy, capital allocation, and shareholder returns. He also inquired about current chartering demand from container shipping customers amid these market conditions.

Answer

Executive Angeliki Frangou responded that while geopolitical events create numerous potential outcomes, Navios Partners' diversified fleet, $3.6 billion in contracted revenue, and low daily breakeven of $425 provide a crucial pillar of stability. Regarding container chartering, Frangou confirmed that major liner companies continue to show a strong appetite for securing vessel capacity and charter duration, a trend not diminished by the ongoing Red Sea disruptions.

Omar Nokta from Jefferies asked about Navios's view on potential pressure on ship values amid softening markets and whether this presents acquisition opportunities. He also inquired about the strategy for adding fixed contract coverage for 2025 given geopolitical risks, and sought clarity on the future pace of the company's share repurchase program.

Answer

Executive Angeliki Frangou stated that Navios will not alter its long-term strategy based on short-term market weakness, emphasizing the surprisingly strong performance over the last 18 months despite global risks. She highlighted the company's opportunistic approach to adding contracted revenue, such as the recent $300 million in the container sector, and affirmed that the deliberate capital return program, including buybacks and leverage targets, remains a core part of their strategy.

Omar Nokta asked about Okeanis Eco Tankers' asset strategy, specifically whether the company intends to scale further into VLCCs and Suezmaxes or diversify into Aframaxes, and how fleet growth might impact its ability to maintain a premium valuation.

Answer

Aristidis Alafouzos (CEO) stated that OET is carefully evaluating opportunities but has not yet found one that aligns with its criteria. He confirmed that VLCCs and Suezmaxes remain the company's sweet spot, and while the family has historical experience with Aframaxes, OET prefers to stick to its current core sectors. He believes the fleet could comfortably expand to 20-25 ships without significantly altering their trading strategy, emphasizing the importance of managing ship positioning to avoid sub-optimum cargo choices that can arise from too many vessels opening in the same area.

Omar Nokta from Jefferies inquired about the strategic and economic details of cleaning a VLCC for a diesel voyage, including its subsequent deployment and profitability compared to crude trading. He also asked for confirmation on whether the anticipated OPEC production increases are translating into tangible export cargoes hitting the market.

Answer

CEO Aristidis Alafouzos explained that the decision to clean a VLCC is based on a triangulation strategy, comparing the profitability of a clean backhaul voyage followed by a strong fronthaul against standard AG-East runs. He confirmed the vessel would return to the crude trade after its clean voyage. Alafouzos also stated that the recent 20% surge in VLCC rates indicates that increased OPEC barrels are indeed reaching the export market, tightening vessel supply.

Omar Nokta inquired if the product tanker market's sequential improvement, without the "sizzle" seen in crude tankers, was expected given OPEC shifts, and if it's merely a matter of time until product flows accelerate. He also asked about Ardmore Shipping's capital deployment strategy following the preferred share redemption, considering their strengthened balance sheet and flexibility, specifically regarding increased shareholder returns or future sale and purchase opportunities.

Answer

CEO Gernot Ruppelt stated that ample oil supply creates strong incentives for refineries, leading to strong refining margins and firm product on the water. He noted that market flirtation with contango could create interesting commodity plays and storage activity, adding layers of trading demand. President Bart Kelleher added that typical seasonality and refineries returning from maintenance could also contribute. Gernot Ruppelt further explained that future capital deployment would be guided by the market and strong governance, balancing shareholder returns with business growth. He highlighted successful past S&P transactions (e.g., 15% in-the-money within four months on recent MR acquisitions) and investments in vessel upgrades with short paybacks, confirming all avenues (dividends, buybacks, S&P, reinvestment) remain on the table.

Omar Nokta from Jefferies inquired about Ardmore Shipping's target leverage ratio following the recent acquisition of three MR tankers and the potential market impact of increased US pressure on Russian oil trade via tariffs.

Answer

CEO Gernot Ruppelt explained that the company prioritizes opportunistic value creation over specific leverage targets, highlighting the attractive pricing of the recent acquisitions. President & CFO Bart Kelleher added that Ardmore maintains moderate debt levels through the cycle to preserve flexibility and low breakevens. Regarding market dynamics, Mr. Ruppelt noted that geopolitical volatility and resulting shifts in trade flows are generally beneficial for the product tanker market.

Omar Nokta asked about the recent management changes, questioning if any strategic shifts are anticipated with the new leadership setup. He also sought perspective on how the announced OPEC production increase, which is seen as positive for crude tankers, is expected to impact the MR product tanker market.

Answer

Gernot Ruppelt, an executive, emphasized continuity in Ardmore's strategy, governance, and values, highlighting the strength of the company's internal talent pipeline. On the market outlook, Ruppelt explained that OPEC production increases support higher refining margins, which in turn incentivizes the production and transportation of refined products, benefiting the MR market. He reiterated that this positive demand driver complements the very compelling supply-side fundamentals of an aging fleet and a small order book.

Omar Nokta from Jefferies inquired about the potential market impact of the recent U.S. election, the drivers behind strong Q4 TCE bookings outperforming indices, and the rationale for repurchasing preferred shares versus other capital allocation options.

Answer

Executive Gernot Ruppelt stated that core market fundamentals like fleet age and trade dislocations are unaffected by U.S. politics and that any administration would likely favor policies supporting oil product circulation. He attributed strong TCE performance to their integrated platform and value-adding fleet investments. Executive Bart Kelleher added that preferred shares are viewed similarly to debt, and repurchasing them is an efficient way to reduce the company's breakeven rate, confirming there are no restrictions on further redemptions.

Omar Nokta of Jefferies asked for commentary on vessel value trends since Ardmore's recent MR acquisition and whether returns remain compelling. He also questioned if future strategy would focus on 'spread trades'—fine-tuning the fleet—rather than outright growth, and inquired about the preferred equity related to the e1 Marine divestment.

Answer

Incoming CEO Gernot Ruppelt explained that the company remains opportunistic, seeking value across the full spectrum from upgrading existing assets to gradual fleet modernization and growth. He noted that while markets are strong, pockets of value can still be found. Executive Vice Chairman Bart Kelleher clarified that the e1 Marine divestment does not trigger any action on the preferred equity and that the company's current priority is deleveraging traditional bank debt first.

Omar Nokteb of Jefferies asked about the recent outperformance of MR and Handy-size vessels compared to LRs in the spot market, and inquired if Hafnia engages in 'reverse cannibalization' by moving clean tankers into the dirty trade.

Answer

Soren Steenberg (Head of Asset Management) clarified that the trend is more about MRs catching up to the consistently high earnings of LR1s and LR2s, rather than LRs stagnating. He confirmed that Hafnia does consider switching LR2s to the Aframax dirty trade and LR1s to Panamax trade when opportunities arise, but does so cautiously to avoid disrupting the smaller, confined dirty markets.

Omar Nokta from Jefferies inquired about the factors driving the significant recent strength in LR2 tanker rates and questioned Hafnia's strategy regarding its fleet size, asking about potential vessel acquisitions or disposals.

Answer

Søren Winther, VP of Commercial, attributed the high LR2 rates of $53,000/day to favorable front-haul legs and shorter ballast sticks in the Eastern Hemisphere, noting the underlying market is closer to $35,000-$37,000/day. CEO Mikael Opstun Skov added that Hafnia's current focus is on harvesting returns from its existing fleet and returning capital to shareholders, rather than actively pursuing cash acquisitions. He indicated the company will continue its normal fleet renewal by selling older tonnage.

Omar Nokta asked about the real-world impact of sanctions on tanker usage by China and India, and whether the pressure from crude tanker cannibalization on the product market has subsided.

Answer

Søren Winther, VP of Commercial, confirmed that both China and India are showing adherence to sanctions by sourcing 'vanilla tonnes' and noted a significant drop in Iranian exports as evidence. He also stated that crude tanker cannibalization has returned to normal historical averages, primarily due to a stronger crude market.

Omar Nokta inquired about the drivers for Hafnia's strong Q2 sequential performance, particularly in the LR2 segment, and the market outlook given the cannibalization from larger crude tankers. He also asked for more specific timing on when the company expects to reach a sub-20% net LTV ratio, which would trigger a higher dividend payout.

Answer

EVP Commercial, Jens Christophersen, attributed the strong LR2 results to good vessel positioning and noted that while cannibalization from VLCCs and Suezmaxes was felt, the market remains robust. He expects this effect to diminish in Q4 as crude rates rise. CFO Perry Van Echtelt stated that while the trajectory to a sub-20% net LTV is clear, the exact timing in the second half of the year depends on vessel valuations.

Omar Nokta inquired about the terms and potential strategy for Hafnia's $120 million in-the-money purchase options on chartered vessels. He also asked for an overview of how the Red Sea rerouting has impacted different vessel segments and questioned the softer Q2 rates for LR2s.

Answer

CFO Perry Van Echtelt explained that while purchase options are exercisable regularly, it is currently cheaper to maintain the vessels as charters. EVP, Commercial, Jens Christophersen, added that the Red Sea impact is 'top-down,' affecting larger LR2s most significantly. He clarified that Hafnia's reported LR2 rates are influenced by substantial contract coverage, not purely the spot market, which he described as 'incredibly tight.'

Omar Nokta from Jefferies questioned the significant outperformance of MR vessel rates in the Q3 guidance compared to previous quarters and other vessel classes. He also asked for an update on the Sale and Purchase (S&P) market, specifically whether vessel values have found a floor and if there's potential for them to rise.

Answer

CEO Jacob Milkgaard attributed the MR strength to a confluence of factors: the highest clean petroleum product (CPP) volume on the water in over a year, a sharp reduction in market cannibalization from crude tankers, and broad-based underlying demand. Regarding vessel values, he stated that after a period of slow decline, prices appear to be stabilizing and could potentially increase if freight rates continue to climb.

Omar Nokta of Jefferies asked if the current charter market reflects potential refinery run cuts in Asia and if these cuts might expand to the West. He also sought an update on TORM's scrubber installation program and clarification on whether the dividend policy remains formulaic or has become more discretionary.

Answer

Executive Jacob Meldgaard stated that Asian client activity is recovering and that slower domestic demand in China could lead to higher product exports, benefiting tankers. He confirmed scrubber installations will proceed on a case-by-case basis. Executive Kim Balle explained that while the Board has final discretion, the dividend policy's core principle remains to distribute net cash generated quarterly.

Omar Nokta of Jefferies asked about the outlook for the third quarter, questioning if the recovery would be gradual or a full return to pre-Q2 levels. He also inquired about the specifics of the new terminal contracts and the process for increasing ethylene capacity at the terminal.

Answer

CEO Mads Peter Zacho confirmed that Q3 is expected to return to the more normalized levels seen before Q2's disruptions, noting that utilization was already back above 90% in July. EVP of IR & Business Development Randy Giveans addressed the terminal questions, stating that while specific contract details are commercially sensitive, they have multiple term sheets out to new customers. He added that the decision to flex capacity between ethane and ethylene is market-driven and can be made on a month-to-month basis, with new infrastructure providing more optionality.

Omar Nokta questioned the rationale and potential tax implications of the corporate redomicile to England and Wales, sought details on the charter contract for a newbuild vessel, and asked about the potential to recoup the terminal expansion investment through financing.

Answer

CEO Mads Peter Zacho and CFO Gary Chapman explained the redomicile aims to align the corporate structure with business operations in the U.S. and Europe, expecting a neutral financial impact. CCO Oeyvind Lindeman declined to provide specifics on the newbuild charter but highlighted it as a positive sign of long-term customer commitment. Gary Chapman stated that financing the terminal is being considered for later in the year, likely at a conservative leverage of around 50% LTV, once more offtake contracts are secured.

Omar Nokta of Jefferies asked about the financial impact of Hurricane Beryl on the Ethylene Terminal, the mechanics of take-or-pay contracts, the potential for exporting propane, and the company's plans for its newbuilding options.

Answer

EVP of Investor Relations Randall Giveans confirmed that under take-or-pay contracts, lost volumes will be compensated for in Q4 2024 or early 2025. He clarified the terminal was undamaged and is not equipped for propane. CEO Mads Zacho added that the newbuilding options expire on November 21 and will be discussed at the upcoming Board meeting.

Omar Nokta from Jefferies followed up on the India-Russia trade, asked about the financing plans for the newly acquired 2018-built vessel, and inquired about charterer appetite for the company's upcoming newbuilds.

Answer

President & CEO Svein Moxnes Harfjeld explained that India appears to be replacing Russian crude with feedstock from other sources, mainly the Middle East. He noted that the new vessel acquisition will be financed competitively, potentially allowing for prepayment of other debt. Regarding the newbuilds, he confirmed high-level interest from core customers but stated DHT is comfortable operating them in the spot market if long-term charters at acceptable returns don't materialize.

Omar Nokta from Jefferies asked if increased OPEC volumes could offset a potential decline from the Atlantic Basin during the summer. He also questioned how the VLCC market might react if a U.S.-Iran agreement were reached, bringing Iranian barrels back to the compliant market.

Answer

President and CEO Svein Moxnes Harfjeld expressed his view that planned OPEC volume increases could indeed lead to a robust summer market. On the Iran topic, he outlined two scenarios he sees as positive for the VLCC business: 1) An agreement would move Iranian oil onto the compliant fleet, increasing demand for legitimate vessels. 2) Continued pressure on Iran would force other Middle Eastern producers to increase output to cover the shortfall, also boosting VLCC demand.

Omar Nokta followed up on the recent VLCC rate jump, asking if it was driven by sentiment or the actual removal of sanctioned ships from service. He also inquired about the trading activity of the shadow fleet and the long-term commercial viability of vessels older than 25 years.

Answer

President and CEO Svein Moxnes Harfjeld explained that while sentiment was an initial driver, there are now tangible changes in Chinese oil procurement behavior due to sanctions, which is impacting the shadow fleet. He noted it's difficult to track the inefficient shadow fleet precisely but confirmed some are being sold for demolition. He expressed strong doubt that vessels over 25 years old could remain commercially viable due to widespread terminal and port restrictions.

Omar Nokta focused on geopolitical factors, asking about the potential for the shadow fleet to enter the compliant market if U.S. sanctions on Iran are tightened. He also inquired about the potential impact on the VLCC market if a peace deal were to be reached between Russia and Ukraine.

Answer

President and CEO Svein Moxnes Harfjeld dismissed the risk of the shadow fleet entering the compliant market as 'academic,' citing that these older vessels lack the necessary vetting and insurance. He believes tighter Iranian sanctions would be 'almost 100% certainly be a positive' for the market. Regarding a potential Russia-Ukraine peace deal, Harfjeld suggested it would be a 'long and winding road' for Russian oil to return to Europe and that an end to the conflict could ultimately be a positive for VLCCs as trade normalizes toward the most cost-efficient transport.

Omar Nokta from Jefferies inquired about the rationale behind the recent acquisition of a 2020-built Capesize vessel, Genco's appetite for further fleet expansion in the Capesize sector, and the potential for selling older Supramax vessels to fund new purchases.

Answer

President, CEO & Director John Wobensmith described the acquired vessel as a 'gem' due to its Japanese build, high fuel efficiency, and scrubber fitting. He confirmed a strong appetite for more Capesize vessels, citing compelling supply-demand fundamentals. Wobensmith also indicated that the company is focused on divesting two 20-year-old vessels, the Genco Predator and Genco Picardi, and is waiting for opportune market conditions to maximize their sale price.

Omar Nokta of Jefferies inquired about the new $50 million share repurchase program, asking for the rationale behind its size and how it integrates with the existing dividend policy. He also sought perspective on why vessel asset values have remained strong despite macroeconomic pressures.

Answer

CEO John Wobensmith clarified that the share repurchase program is an opportunistic and incremental tool, a 'bolt-on' to the primary dividend policy, intended to be used during periods of extreme downward volatility. He stated the size was benchmarked against peers as a percentage of market cap. Regarding asset values, Wobensmith explained that a limited supply of modern vessels for sale, combined with high newbuilding prices for far-out deliveries (late 2028/early 2029), is supporting the firm valuation of the existing fleet.

Omar Nokta of Jefferies LLC inquired about Genco's strategic positioning given its strong balance sheet in a soft dry bulk market and how the company views upcoming opportunities. He also asked about the dividend policy's application in a quarter with potentially negative earnings due to low spot rates.

Answer

CEO John Wobensmith explained that Genco's value strategy was designed to "play offense" in all market conditions, using its low leverage (5% net LTV) to acquire vessels at attractive prices during softer periods. Regarding the dividend, Wobensmith reiterated the commitment to the quarterly payout, referencing a track record of paying a $0.15 dividend even when the formula yielded zero. He highlighted the $0.45 per share reserve, which provides flexibility to smooth out payments during short-term market volatility.

Omar Nokta from Jefferies inquired about the potential impact of a new U.S. administration on drybulk markets, the causes of recent freight rate volatility, and the status of the bauxite force majeure issue in West Africa.

Answer

Executive John Wobensmith stated that he expects no substantial long-term impact on ton-miles from a new administration, as goods tend to find new, albeit sometimes less efficient, routes. He attributed recent rate weakness to a temporary oversupply of Capesize vessels in the Atlantic due to bauxite disruptions but expressed optimism for a year-end recovery. Wobensmith confirmed the force majeure is resolved, though bauxite volumes have not fully normalized.

Omar Nokta of Jefferies questioned the company's fleet renewal strategy of swapping older vessels for modern ones and sought details on the potential refinancing package for the six VLCCs coming off lease later in the year.

Answer

President, CEO & Director Lois Zabrocky confirmed the company's opportunistic approach to fleet renewal, noting they see upside in VLCCs. SVP & CFO Jeffrey Pribor discussed the VLCC refinancing, stating that while they have many options, including their revolver, they are evaluating alternatives to lower breakevens. He noted the financing terms would differ from the newbuilds, involving trade-offs between loan term, margin, and amortization profile.

Omar Nokta inquired about International Seaways' financing plans for its six LR1 newbuilds and the potential impact of refinancing the $250 million Ocean Yield debt facility on the company's cash breakeven rate.

Answer

CFO Jeffrey Pribor explained that the company has multiple attractive financing options for the LR1s, including its existing revolver, and is currently evaluating them. Regarding the debt refinancing, he confirmed it could reduce the daily cash breakeven rate by several hundred dollars, citing expected savings of at least 200 basis points on interest and lower amortization.

Omar Nokta inquired about the dividend policy, noting the payout ratio increased to 77% and asking about its future trajectory. He also asked if the recent VLCC-for-MR vessel swap signaled a strategic move away from crude or was purely a fleet modernization effort.

Answer

CFO Jeffrey Pribor clarified that shareholders should expect a minimum payout ratio of 75% going forward, providing consistency regardless of earnings fluctuations. CEO Lois Zabrocky explained the vessel swap was primarily focused on reducing the fleet's average age to capture a longer earnings horizon, not a strategic pivot away from crude tankers. She added that they will look to add to the large crude fleet when opportunities arise.

Omar Nokta of Jefferies inquired about the persistent softness in the product tanker market despite crude tankers exiting the trade, and asked what might trigger a recovery. He also questioned if the equity market's lack of excitement has impacted physical asset values or term charter rates.

Answer

CEO Lois Zabrocky highlighted the MR segment's strong Q3 performance ($29,000/day) and noted that factors like potential EU refinery closures support a positive outlook for 2025. Chief Commercial Officer Derek Solon added that term charter rates remain firm and significant price drops have not yet materialized in the sale and purchase market for older vessels.

Omar Nokta from Jefferies asked about the recent increase in newbuild orders for smaller vessels and whether GSL sees opportunities to place orders against long-term contracts. He also questioned if the recent opportunistic vessel sales were driven by firming asset values and if those values are holding up.

Answer

CEO Thomas Lister and Executive Chairman George Youroukos addressed the questions. They noted that while the industry recognizes the smaller vessel segments are underbuilt, the difficulty in securing very long-term charters limits speculative ordering, and GSL has not yet found newbuild opportunities that meet its risk/return criteria. Regarding asset sales, Mr. Lister confirmed that values remain attractive and sales are opportunistic decisions. Mr. Youroukos clarified that a higher price for a recent sale was due to the vessel's special survey being passed.

Omar Nokta asked for a characterization of the charter market over the past week following the China-U.S. trade deal, and questioned GSL's strategy for its growing cash balance, including whether it would be used for debt repayment or allowed to accumulate.

Answer

Executive Thomas A. Lister confirmed that after a quiet period in April, charter market interest and appetite have picked up again in the last week, mirroring the freight market. Regarding the cash position, he stated that in a time of maximum uncertainty, the company values 'maximum optionality.' The robust cash balance allows GSL to manage risks and quickly act on opportunities as they arise, while continuing to delever its balance sheet.

Omar Nokta inquired about the current state of the charter market post-peak season and asked if GSL is observing any pre-ordering activity from shippers in anticipation of potential future tariffs.

Answer

Executive Chairman Georgios Youroukos described the charter market as being at 'full steam' with strong forward-fixing demand and a shortage of quality ships. Executive Thomas A. Lister added that while liner operators show robust appetite for ships, he could not definitively link it to tariff pre-buying, though he noted industry reports suggest this may be occurring.

Omar Nokta of Jefferies sought clarification on the Q3 China volume run-rate compared to Q2, the progression of Vietnam volumes, and the company's long-term perspective on the need to secure US shipyard slots.

Answer

CFO Joel Wine confirmed that the Q3 volume run-rate is expected to be similar to the last six weeks of Q2. He noted that Vietnam volumes grew from high single-digit percentages last year to 21% of the China service in Q2 2025. CEO Matthew Cox added that while they expect a long-term sourcing shift out of China, it's too early to be concerned about securing shipyard slots for their next build cycle, which is not anticipated until the mid-2030s.

Omar Nokta of Jefferies sought clarification on the Q3 China volume run-rate compared to Q2, the progression of Vietnam volumes, and the company's long-term perspective on US shipbuilding and the potential need to secure shipyard slots.

Answer

EVP & CFO Joel Wine confirmed the Q3 volume run-rate is expected to be similar to the latter part of Q2 and noted Vietnam volumes were in the high single digits a year ago before the new service launch. Chairman & CEO Matthew Cox added that the mix of non-China origins should remain in the low 20% range, influenced by tariffs and customer de-risking. Regarding shipbuilding, Cox stated it is too early to be concerned about securing slots for their next build cycle, which is not anticipated until the mid-2030s.

Omar Nokta of Jefferies questioned the Q3 China volume run-rate compared to late Q2, sought details on the growth of Vietnam volumes, and asked about the potential need to secure US shipyard slots earlier than planned.

Answer

EVP and CFO Joel Wine confirmed it was a 'fair assumption' that Q3's volume run-rate would be similar to the last six weeks of Q2. He noted prior-year Vietnam volumes were in the high single digits before the second service launch. Chairman and CEO Matthew Cox added that he expects the non-China origin mix to remain in the 'low 20% ish' range. Regarding shipbuilding, Cox stated it is 'way too early' to worry about securing slots, as Matson has 'plenty of time' before its next build cycle in the mid-2030s.

Omar Nokta of Jefferies sought clarification on the volume run-rate for the China service, asking if Q3 volumes would be similar to the final two months of Q2. He also inquired about the progression of Vietnam volumes as a percentage of the China service and asked for Matson's long-term perspective on the potential need to secure US shipyard slots sooner than planned.

Answer

Joel Wine, EVP & CFO, confirmed it was a fair assumption that the Q3 volume run-rate would be consistent with the demand seen from mid-May through June. He also provided historical context on Vietnam volumes, noting they were in the high single-digits last year before the new service launch. Matthew Cox, Chairman, Director & CEO, added that he expects the non-China origin mix to remain in the low 20% range in the near term. Regarding shipbuilding, Cox stated it is too early to be concerned about securing shipyard slots, as Matson's next major build cycle is not anticipated until the mid-2030s, providing ample time to plan.

Omar Nokta of Jefferies followed up on the de minimis exemption, asking if it represents a long-term opportunity for Matson to gain permanent market share from airfreight. He also requested an update on the China volume trend since the initial 30% drop in April.

Answer

Matthew Cox, Chairman and CEO, stated his belief that the de minimis exemption change is permanent and will ultimately increase the total addressable market for ocean carriers, creating a durable opportunity for Matson's expedited services. On volume trends, he indicated that while it's still early, activity is beginning to resume as retailers and manufacturers negotiate tariff costs and face urgent needs to restock seasonal inventory, suggesting a gradual recovery in cargo movement.

Inquired about the company's fleet renewal strategy, specifically the pace of acquisitions versus sales, and whether future capital deployment would remain focused on core segments or expand into other vessel classes.

Answer

The company clarified that the phase of selling older ships is mostly complete, and the focus will now shift to gradually acquiring newer vessels. The immediate priority is to reinvest capital into their core Aframax and Suezmax segments, though other asset classes or newbuildings could be considered in the medium term.

Omar Nokta of Jefferies inquired about Teekay's fleet renewal strategy, asking for clarification on the future pace of vessel acquisitions versus sales. He also asked about capital deployment priorities and whether the company would focus on its core Suezmax and Aframax segments or expand into other vessel classes.

Answer

Kenneth Hvid, President & CEO of Teekay Tankers, responded that the significant selling of older vessels is now largely complete. He stated the company will now gradually increase the pace of acquiring newer ships, recycling the capital from recent sales. Hvid clarified that the near-term priority is acquiring single vessels within their core Aframax and Suezmax segments, while newbuilds or other asset classes are a possibility in the medium term.

Inquired about the minimum fleet size required to maintain commercial scale and questioned the long-term strategy of reinvesting in the volatile spot tanker market versus diversifying into other sectors.

Answer

The executive stated that while they are approaching a minimum comfortable fleet size, their commercial performance remains strong. He affirmed their commitment to the tanker space, citing strong performance and core expertise, but noted they are evaluating opportunities in adjacent vessel classes like VLCCs and MRs for future capital deployment.

Omar Nokta asked about the minimum fleet size Teekay needs to maintain its commercial presence and whether it still makes sense to deploy capital in the cyclical tanker market versus diversifying into a different business.

Answer

Executive Kenneth Hvid stated that while they have some room, the current fleet size is close to the minimum level they wish to maintain. He affirmed their commitment to the tanker sector, where their operating franchise has performed well, but noted they are actively evaluating adjacent segments like VLCCs and MRs for future capital allocation.

Omar Nokta asked about the minimum fleet size Teekay needs to maintain its commercial presence and critical mass. He also questioned the long-term strategy of reinvesting significant capital into the cyclical tanker market versus redeploying it into a different business with potentially more stable earnings.

Answer

Executive Kenneth Hvid stated that while there is still some room for vessel sales, the company is approaching the minimum fleet size it wants to maintain for its integrated operating model. Regarding strategy, Hvid affirmed that Teekay is pleased with its focus on the tanker sector, which has performed well. He added that the company actively evaluates adjacent segments like VLCCs and MRs, which are within its core competency, and expects attractive entry points to emerge in those areas.

Omar Nokta of Jefferies asked about the company's target fleet size for maintaining critical mass, the potential use of in-charters for growth, and the expected development of the new Trans Mountain Pipeline (TMX) spot market.

Answer

President and CEO Kevin Mackay stated there is no fixed target fleet size, but scale is crucial for market optionality. He noted that while in-charters remain a tool, a wide bid-ask spread has slowed activity. Regarding TMX, he emphasized it's early but expects it to create significant, specific Aframax demand, pulling vessels from other regions and causing market-wide dislocation.

Asked about the company's strategy for maintaining fleet size after vessel sales, the role of chartered-in vessels, and the expected development and pricing dynamics of the new TMX pipeline trade routes.

Answer

The company aims to maintain scale for market optionality by replacing older vessels with modern ones, likely from the secondhand market. Chartered-in vessels remain an option, but the current market makes new deals difficult. The TMX pipeline is expected to create significant new, long-haul demand for Aframaxes by pulling vessels from other regions, causing market dislocation that will support rates, though it's too early to predict specific trade patterns or pricing.

Omar Nokta from Jefferies asked for clarification on Teekay's fleet renewal strategy, questioning if the company plans to accelerate acquisitions after a period of significant vessel sales and how it prioritizes capital deployment across different vessel classes.

Answer

Kenneth Hvid, President, CEO & Director, clarified that after selling 11 older ships in the first half of the year, the company's focus is now shifting to gradually acquiring newer vessels. He stated that the primary priority is finding good purchase candidates within their core Suezmax and Aframax segments, with potential for larger acquisitions or newbuilds in the medium term.

Omar Nokta from Jefferies asked for more clarity on Teekay's statement about changing the pace of fleet renewal, questioning if this implies accelerating acquisitions. He also inquired about capital deployment priorities for fleet renewal, specifically whether the focus would remain on core Suezmax and Aframax segments or expand to other vessel sizes.

Answer

President and CEO Kenneth Hvid clarified that after actively selling 11 older vessels in the first half of 2025, the company's focus will now shift to gradually acquiring newer ships. Hvid stated that the primary, near-term priority is to find and purchase single vessels within their core Aframax and Suezmax segments, recycling capital from recent sales. He noted that while newbuilds or other asset classes could be considered in the medium term, the immediate strategy is to reload on their core fleet.

Omar Nokta of Jefferies asked for clarification on Teekay's fleet renewal strategy, questioning if the company plans to accelerate acquisitions and how it views capital deployment across different vessel classes.

Answer

President and CEO Kenneth Hvid explained that after significant sales of older vessels, the company will now gradually recycle that capital into newer ships. He stated the near-term priority is acquiring single vessels in their core Aframax and Suezmax segments, while larger moves like newbuilds are a medium-term consideration.

Omar Nokta of Jefferies asked for clarification on Teekay's fleet renewal strategy, specifically regarding the pace of acquisitions versus sales, and inquired about capital deployment priorities across different vessel classes like Aframax, Suezmax, and VLCCs.

Answer

Kenneth Hvid, President, CEO & Director, explained that the company has largely completed its vessel sales for now and will gradually increase the pace of acquisitions, recycling capital into newer ships. He stated the primary focus for near-term capital deployment is on single-vessel purchases within their core Aframax and Suezmax segments, where they see opportunities for positive arbitrage.

Omar Nokta of Jefferies inquired about Teekay Tankers' fleet renewal strategy, asking for clarification on the 'change the pace' of acquisitions versus sales. He also questioned the company's capital deployment priorities across different vessel classes, including their core Suezmax/Aframax segments and opportunistic plays like the recent VLCC acquisition.

Answer

President and CEO Kenneth Hvid explained that the active selling of 11 older vessels in H1 2025 is now 'largely done.' The company will now focus on recycling that capital to gradually acquire younger vessels, prioritizing single-vessel purchases within its core Aframax and Suezmax segments where they see positive arbitrage opportunities. Hvid noted that while newbuilds or other asset classes are medium-term considerations, the immediate priority is reloading the core fleet.

Omar Nokta from Jefferies followed up on the Ardmore investment, asking if it signals a new portfolio strategy of taking equity stakes in other companies. He also questioned the real-world impact of recent U.S. sanctions on Russian tankers on the Aframax market and the potential effects if those sanctions were lifted.

Answer

CEO Kenneth Hvid reiterated that the Ardmore stake is a small, opportunistic holding and that the company's primary focus remains on investing in and operating its own fleet. Director of Research Christian Waldegrave addressed the market question, confirming that sanctions have had an impact, causing logistical difficulties for Russian exports and forcing buyers to seek alternative sources, which has increased rate volatility. He noted the future is uncertain but that disruptions generally support volatility.

Omar Nokta of Jefferies asked for clarification on the tax implications of the Teekay Australia business. He then questioned what TNK's primary strategic priority is now that its balance sheet is debt-free and the corporate structure is streamlined. Finally, he sought management's outlook for the upcoming winter tanker market, particularly with the new TMX pipeline trade pattern.

Answer

CFO Brody Speers confirmed the Teekay Australia business is subject to a 30% tax rate in Australia. President and CEO Kenneth Hvid stated that TNK's strategy remains consistent: maximizing value and spot market exposure to capitalize on the strong tanker cycle. Regarding the market, Mr. Hvid noted that while the winter has not fully begun, there is a 'pulse' in the market, and new dynamics like the TMX pipeline are providing additional support for tanker demand, especially for long-haul voyages to Asia.

Omar Nokta from Jefferies inquired about Teekay Tankers' first vessel acquisition in several years, asking if the company plans to be more aggressive with acquisitions, if it's willing to shrink its fleet to modernize, and the rationale behind securing a new one-year time charter for an Aframax.

Answer

CEO Kevin Mackay explained that while fleet reinvestment is necessary, the company will be 'measured and prudent' with acquisitions due to high asset prices, rather than pursuing a large-scale fleet renewal. Mackay confirmed they are not fixated on a specific fleet size and are willing to sell older assets to reinvest in modern ships, prioritizing value. Regarding the charter, he stated it was a portfolio decision and a 'good hedge' to lock in a strong rate of nearly $50,000 per day.

Omar Nokta asked about the company's target fleet size amid vessel sales, the potential use of in-charters for growth, and the expected market development for the new Trans Mountain Pipeline (TMX) trade route.

Answer

President and CEO Kevin Mackay explained that there is no fixed target for fleet size, but maintaining scale for market optionality is key. He noted that while in-charters are a useful tool, the current bid-ask spread is too wide for new deals. Regarding TMX, Mackay stated it's early but expects it to create significant Aframax-specific tonne-mile demand by pulling ships from other regions, causing positive market dislocation.

Asked about the company's strategy regarding new containership orders after the dry bulk spinoff, and whether this signals a renewed focus on the container sector or was just an isolated opportunity.

Answer

The CFO clarified that the strategy has not shifted; the company has always focused on containers but found asset prices too high recently. The new order was an attractive, opportunistic deal that made sense on its own merits. The core strategy remains to selectively pursue accretive deals while being patient when prices are elevated.

Omar Nokta from Jefferies inquired about the recent order for four new container ships, asking if this signals a renewed strategic focus on the container sector following the dry bulk spin-off, or if it was an isolated, opportunistic transaction.

Answer

Gregory Zikos, CFO & Director of Costamare Inc., clarified that the company's focus has consistently been on containers. He explained that they had refrained from newbuild orders due to previously elevated asset prices. This specific deal was pursued because its terms—price, counterparty, and charter period—were favorable. Mr. Zikos reiterated that the core strategy remains unchanged: patiently wait for accretive opportunities rather than forcing deals in an expensive market.

Omar Nokta inquired about the rationale for the early redemption of the EUR 100 million Greek bonds and the company's forward-looking strategy for its CBI dry bulk trading platform amid recent personnel changes.

Answer

Executive Gregory Zikos explained that the early bond redemption was a strategic decision driven by tax and legal implications related to Pillar 2, despite the bonds' competitive 2.7% cost. Regarding the CBI platform, Zikos affirmed a strong, long-term commitment, stating there is 'absolutely no thought to scale it back.' He emphasized that the vessel owning and trading platforms are viewed as 'highly complementary activities' and that recent personnel changes do not alter the company's intention to continue investing in the dry bulk business.

Omar Nokta from Jefferies inquired about the rationale for the early redemption of low-cost Greek bonds and the company's future strategy for its CBI dry bulk trading platform following recent personnel changes.

Answer

Executive Gregory Zikos explained that the EUR 100 million bond redemption was necessary due to tax and legal implications under Pillar 2. Regarding the CBI platform, Zikos affirmed a strong, long-term commitment, stating there are no plans to scale it back and that the vessel owning and trading activities are viewed as highly complementary and will continue to receive investment.

Omar Nokta from Jefferies asked for more detail on the deployment strategy for the new MGC and LCO2 carriers, specifically regarding long-term contracts versus spot trading. He also questioned if recent positive sentiment from a U.S.-EU deal has translated into the charter market.

Answer

CEO Gerasimos Kalogiratos described an opportunistic fixing strategy for the new carriers, preferring spot-to-medium-term charters of up to three years to maintain flexibility for future LCO2 projects from 2028 onwards. CFO Nikos Kalapotharakos added that the positive sentiment from the U.S.-EU deal has indeed spurred multiple new term requirements, and Capital Clean Energy is actively involved in those discussions.

Omar Nokta inquired about the chartering strategy for the new MGC and LCO2 carriers, specifically regarding long-term contracts versus spot trading, and asked if recent positive sentiment from a U.S.-EU deal has translated into the charter market.

Answer

CEO Gerasimos Kalogiratos stated the company will be opportunistic with the new vessels, potentially using shorter-term charters of up to three years to remain available for dedicated LCO2 projects from 2028. CFO Nikos Kalapotharakos confirmed that positive market sentiment has spurred multiple new term charter requirements, and CCEC is actively involved in those discussions.

Omar Nokta of Jefferies inquired about Safe Bulkers' future share buyback strategy following the recent completion of a program and asked for commentary on the current state of the ship sale and purchase (S&P) market.

Answer

President Dr. Loukas Barmparis stated that buybacks are considered when markets are profitable and the stock is perceived as undervalued. Executive Polys Hajioannou added that S&P asset values have fallen (25% for older ships, 10-15% for modern ones) and are not currently attractive for acquisitions. He noted the company will not rush further buybacks due to the soft freight market and capital commitments for 6 newbuilds.

Omar Nokta from Jefferies inquired about the rationale for initiating and then quickly terminating a share buyback program, and sought clarity on the current state of vessel asset values amidst a softening freight market.

Answer

President Dr. Loukas Barmparis explained that buybacks are triggered by a low stock price relative to Net Asset Value but are paused when the freight market weakens significantly, as it did in December. He also noted that while asset values have softened, he doesn't expect a major decline due to buying interest from other shipping sectors. CFO Konstantinos Adamopoulos added that buyback decisions are continuously assessed against freight market performance.

Omar Nokta inquired about the significant disconnect between tanker equity prices and physical ship values, and asked if there have been any recent changes in chartering habits due to tariffs and trade tensions.

Answer

CEO Emanuele Lauro addressed ship values, attributing the recent correction to broad global uncertainty but expressed confidence that values will ultimately realign with strong freight rates. Chief Commercial Officer Lars Nielsen commented on chartering, noting that tariffs have fueled a rally in naphtha, increasing West-to-East cargo movements and creating strong demand for LR2 tankers.

Omar Nokta from Jefferies inquired about the observable impact of recent sanctions on trade flows and the strategic reasoning behind Scorpio Tankers' decision to accelerate its vessel dry-docking program in 2024.

Answer

President Robert Bugbee noted that the full impact of sanctions is often delayed. Chief Commercial Officer Lars Nielsen elaborated that while the second round of sanctions hits more mid-sized ships, the effect on rates is not yet apparent. Chief Operating Officer Cameron Mackey explained that the accelerated dry-docking was a strategic decision based on vessel positioning, commercial opportunities, and a forward market view, especially considering the Red Sea situation.

Omar Nokta inquired about Scorpio Tankers' investment in DHT Holdings, asking about the strategic rationale and whether it represents a short-term trade or a long-term holding. He also asked about the significance of the 4.9% stake and if the company plans to increase its crude tanker exposure.

Answer

President Robert Bugbee explained that the DHT investment is viewed as a long-term position to capitalize on an undervalued stock and a strengthening crude tanker market, which he sees as a tailwind for product tankers. He clarified that the investment does not restrict Scorpio's share buyback capacity and that the 4.9% stake was intentionally chosen to signal a passive investment with no further acquisitions planned. Mr. Bugbee confirmed there are no plans to acquire physical VLCCs.

Omar Nokta questioned Scorpio's debt strategy, asking if the ultimate goal is to be debt-free and what other compelling uses of cash exist besides share buybacks, and from where the cash for buybacks is sourced.

Answer

President Robert Bugbee emphasized that buying the company's stock at a discount to NAV is a highly compelling use of cash, especially given the market's strength. He noted the company is in an "unbelievably strong" position and declined to specify the source of funds for buybacks to maintain strategic flexibility.

Omar Nokta inquired about the drivers behind the recent momentum in the Capesize market and asked for the budgeted costs for the significant dry docking schedule planned for the first half of 2025.

Answer

Peder Carl Simonsen, Interim CEO and CFO, attributed the market rebound to improved weather in Australia boosting volumes and some coal cargoes shifting to Capesize vessels. Regarding dry docking, he explained that costs vary by vessel age and service type, with Q4 2024 costs being slightly elevated due to several 15-year dry docks. He added that the company is making additional investments in vessel upgrades, such as advanced paint, which increases overall expenses but enhances commercial performance.

Omar Nokta from Jefferies inquired about Golden Ocean's capital deployment strategy, asking whether the company views itself as a seller of vessels at current lofty prices, a buyer, or neither, and questioned the sustainability of the $0.30 dividend if earnings were to dip.

Answer

Interim CEO and CFO Peder Carl Simonsen stated that Golden Ocean is focused on selling older tonnage to renew its fleet, as it does not see value in acquiring modern vessels at current prices. He affirmed that the company prioritizes dividends over share buybacks and, while the payout is based on earnings, the firm's positive market outlook and low cash breakeven rates support the intention to pay dividends even through weaker periods.

Omar Nokta from Jefferies inquired about the fundamental drivers supporting strong Capesize rates despite a soft Chinese steel market and the reasons for the lack of a typical seasonal summer slowdown. He also asked for an explanation of the recent underperformance of the Panamax segment compared to both larger Capesize and smaller Supramax vessels.

Answer

Interim CEO and CFO Peder Carl Simonsen explained that strong underlying fundamentals, particularly healthy iron ore volumes from Brazil, have supported Capesize rates. He anticipates a seasonal ramp-up in bauxite exports and Chinese industrial activity. Regarding Panamaxes, Simonsen attributed the weakness to depressed sentiment and slightly low volumes but noted Golden Ocean's own results were bolstered by its ice-class business. He expects future support for Panamaxes from rising coal and grain volumes.

Asked about the implementation of the Gemini hub-and-spoke model, inquiring about the transition process, the potential for disruption, and the timeline to become fully operational.

Answer

The CEO clarified that the transition will be a direct switch from the 2M network to the Gemini network, not a phased approach. They expect an orderly transition with minimal disruption. The full network will take approximately 13 weeks to be completely cycled in, which is the duration of the longest service rotation.

Omar Nokta from Jefferies inquired about how the current tanker market cycle compares to historical cycles and what the company's dividend policy might look like after its Beal Bank debt facility is repaid.

Answer

Herbjørn Hansson (Founder, Chairman and CEO) stated that current market conditions are the best he has seen in his 50-year career, emphasizing the very low order book for new tankers. Bjørn Giæver (CFO) followed up by explaining that once the debt facility is repaid, the dividend could potentially double from its current level. He clarified that Nordic American Tankers does not have a formal payout ratio policy, but rather distributes excess cash as deemed appropriate.

Omar Nokta from Jefferies inquired about how the current tanker market cycle compares to historical cycles and asked about the company's dividend strategy after the Beal Bank facility is repaid.

Answer

Founder, Chairman and CEO Herbjørn Hansson stated that current market conditions are the best he has seen in his 50-year career, citing a very low order book for new tankers. CFO Bjørn Giæver added that once the Beal Bank debt is repaid, the dividend could potentially double, noting the company favors distributing excess cash over a fixed payout ratio policy.