Dorian LPG - Q4 2023

Transcript

Operator (participant)

Greetings. Welcome to Dorian LPG Fourth Quarter 2023 Earnings. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on Dorian LPG's website, which is www.dorianlpg.com. I would now like to turn the conference over to Theodore Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.

Theodore Young (CFO and Treasurer)

Thank you, Sherry. Good morning, everyone, and thank you all for joining us for our fourth quarter 2023 results conference call. With me today are John Hadjipateras, Chairman, President, and CEO, Dorian LPG Ltd., John Lycouris, Chief Executive Officer of Dorian LPG (USA) LLC, and Tim Hansen, Chief Commercial Officer. As a reminder, this conference call webcast and replay of this call will be available through May 31st, 2023. Many of our remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe, or similar indications of future expectations. Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors as well as general economic conditions.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we express today. Additionally, let me refer you to our unaudited results for the period ended March 31, 2023 that were filed this morning on 8-K. In addition, please refer to our previous filings on forms 10-K and 10-Q, where you'll find risk factors that could cause actual results to differ materially from those forward-looking statements. Please note that we expect to file our full 10-K in the first week of June. Finally, you may wish to refer to the investor highlight slides posted this morning on our website for additional information that accompanies the speaker's comments today. With that, I'll turn over the call to John Hadjipateras.

John Hadjipateras (Chairman, President, and CEO)

Thanks, Ted. Thank you all for joining, John L. in Athens, Tim in Copenhagen, Ted and myself from Stamford. The fourth quarter marked the culmination of the best financial year in the company's history. Strong chartering results and a solid balance sheet enabled us to return nearly $225 million to our shareholders during fiscal 2023, and we remain conservatively capitalized with net debt to net total cap of 33%. The VLGC freight market experienced significant volatility in the quarter but has continued strengthening throughout 2023. Our financial results reflect the better rates and our diligent chartering management of the volatility. North America's export volumes have been supported by ample production and inventory, currently surpassing the 5-year average by 30% and exceeding last year's levels by 43%.

Estimates for U.S. exports point to further growth in 2023 and 2024. In its May short-term energy outlook, the EIA said it now estimates that U.S. LPG exports will grow 12.2% in 2023. The order book seems so far to be absorbed by increasing ton-mile demand. On the HR side, for our Ukrainian and Russian seafarers affected by the crisis, we introduced flexible arrangements for joining and repatriation. We added free accessible data communication services on board, supplemented medical insurance, and are providing a monthly allowance for displaced families. On the social front, we tasked two key executives to spearhead our diversion, equity, and inclusion efforts on board and on shore in cooperation with the All Aboard Alliance, an initiative which we helped develop with the Global Maritime Forum.

On the environmental front, we joined the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping as mission ambassadors and plan to lend our expertise to the center to collaborate on various decarbonization initiatives. The IMO's new EEXI and CII regulations resulted in an increasing focus by customers on quantifying voyage emissions, something we have been preparing for and are ready for. We are retrofitting our ships with energy-saving devices and premium paints and progressively reducing emissions and fuel costs through voyage optimization and close collaboration with our crews. As an example, we applied the first silicone paint on one of our ships with a target of about 5% in fuel savings. Our commitment to sensible and environmentally sustainable investment is evidenced by the addition of three dual-fuel VLGCs so far this year, with a fourth coming later in the summer.

These will trade in our Helios LPG pool. Three of them are capable of transiting the old and new Panama Canals, a strategic advantage we will leverage by trading around the congestion when it occurs in the new canal. John Lycouris will give you some more information and then followed by Tim and Ted. John?

John Lycouris (CEO)

Thank you, John. During the first quarter of 2023, the average daily fuel cost of low-sulfur fuel oil versus the high-sulfur fuel oil amounted to $5,226 per day, which benefited our scrubber vessels with improved voyage economics. The average realized savings over all available days of our scrubber vessels were about $212.5 per metric ton of high-sulfur fuel oil supplied versus low-sulfur fuel oil alternative. The hybrid feature of our scrubbers provided additional benefits for all emission control areas and the voyages in the North Sea. Our scrubber retrofit program for the fleet has been very successful in terms of return of capital invested, thereby validating our decision to make the retrofit investments in 2019 and 2020.

On the basis of such good results, we have committed to retrofit a further 3 scrubber units in the next quarters to our vessels that are coming up for dry docking, which will increase our fleet of scrubber vessels to 15. Note that the installed cost of these scrubbers is about two-thirds of the previous scrubber installations. With most spot voyages originating from Houston, our LPG dual-fuel vessels have benefited from attractive pricing of LPG versus low-sulfur fuel oil, which on average has recently amounted to $180 per metric ton. This does not take into consideration the additional energy efficiency of LPG, which stands at 11% over fuel oil. At the start of 2023, the EEXI and CII regulations by IMO entered into force, addressing international vessel carbon emissions.

To comply with the EEXI requirements, we have adopted measures that improve the technical efficiency of our fleet. We have installed several energy-saving devices, such as Mewis Duct and Propeller Boss Cap Fins, as well as implementing fleet-wide engine power limitation. These initiatives reduce fuel consumption, ensuring significantly lower carbon emissions that render our vessels EEXI compliant. In addition, we're implementing silicon antifouling hull coatings for our vessels during their upcoming dry docks, which provide additional improvements in performance and emission reduction, and which lead also to better CII ratings. Our fleet performance department in Denmark closely monitors daily vessel performance using state-of-the-art software, gathering live data to ensure optimal operational performance and emission profile for our vessels.

Our new tech department is following the latest developments in marine carbon capture and storage solutions, as well as wind-assisted propulsion, which will, we believe could be significant in addressing the IMO's midterm decarbonization ambitions. We're also examining the retrofit of advanced propeller designs in combination with the energy-saving devices mentioned above. Last month, the EU Parliament voted for the implementation of the EU Emissions Trading System, or ETS, for shipping, which is expected to be adopted in June 2023. Under this regulation, vessels over 5,000 gross tons, which includes all our vessels in our fleet, calling at EU ports, will be required to purchase and surrender EU carbon allowances commensurate with the amount of CO₂ tons emitted while entering, departing, or staying in EU waters.

In 2022, our vessels called at European ports 14% of the time, and thus we believe the financial impact on us will be limited based on the current trading patterns. The regulation, when it comes into effect in 2024, will be phased in at initially at 40%, then at 70%, and in 2026, 100% of all carbon emissions for those voyages and the voyages in and out of the EU. The current European EU allowances are priced at EUR 90 per ton of CO₂, and this is pricing as of May 19th. Dorian LPG has been monitoring and verifying its carbon emissions since 2018, and we are well prepared to comply with these regulations when they become effective.

Now I would like to pass it over to Tim Hansen, Chief Commercial Officer, for the commercial update.

Tim Hansen (Chief Commercial Officer)

Thank you, John. Good day, everyone. The fourth quarter, fiscal year ending in March 2023 saw the increased seaborne trade of LPG. The January to March period was the strongest corresponding quarter on record in terms of LPG transported on the seas. As per the previous quarter, North American export was buoyed by the relatively mild winter, dampening domestic LPG consumption and a continued record-setting product levels. The quarter ending March 2023 was the quarter with the highest export volumes on record for North America. Middle East export volumes for the quarter stood about 10.3 million tons, down from the two previous quarter, but nonetheless, it reflected a record for a first calendar quarter. The start of the year is historically characterized by volatility in the freight markets. The market must absorb the post-holiday season lull.

The LPG product market is historically in backwardation going into spring and the Lunar New Year celebrations in much of the Far East, resulting in the narrowing half and reduced trading activity. 2023 was no different. The East of Suez market saw the BLPG1, which is a benchmark for AG-Chiba rates, correct significantly downwards at the start of January. The impact through the first week of January was a fall of $41 per metric ton on the BLPG1 benchmark. The steep drop, however, was an overreaction after a quiet period, and it corrected towards the end of January as market players looked to lock away positions prior to the Lunar New Year celebrations. The sheer activity of the market created an upwards momentum again in the freight rates.

It has to be kept in mind that the drop was from a high level of $119 per metric tons on the benchmark rate, as a last quote in 2022, which equals a time charter equivalent of in excess of $100,000 per day on a non-scrubber ECO vessel. It fell to the lowest point in January, at the end of January, where the benchmark rate bottomed out at $57 per ton, equal to a time charter equivalent of $33,000 per day, before climbing to $102 per metric tons in the second half of February, or $85,000 per day, then sliding back to $65 per metric tons or $45,000 per day at the end of the quarter.

Thus, all in all, a strong quarter despite the volatility and degradation, and that bottom of the market considerably stronger than it has, what has been seen in the previous 1st quarters. Furthermore, with the West freight rate market in February being at a premium to the East, many vessels was positioned out of the East market and into the West. The month of February was mostly a story of steady improvement in the Eastern market, and March was largely a story of steady decline and little activity. For the West of Suez market, it followed a similar trend to the East of Suez market. January was the most volatile month of the quarter, with the 1st half of January seeing VLGC operators competing for the East-only discharge voyages, choosing employment over freight discipline.

It was only at the last week of January that the market regained a bullish sentiment. The Lunar New Year celebrations usually result in a quiet period for the VLGCs market, this year it was active. Product market fundamentals was positive and activity was strong. The dampness with the freight market truly taken off was the West having to absorb the tonnages ballasting in from the East. Only also when the relay tonnages were absorbed did the market see bigger jumps in the freight market. We saw a rising market during October and November with a downward correction in December. March was a quiet month in the spot market, somewhat explained by the market needing to digest the strong finish of February months and many players leaving the trading desk for business trips to the Far East.

Some volume activity is likely also explained by the macroeconomic worries after the banking sector's wobbles. The disappearance of risk appetite while central banks around the world considered rectifying action softened the activity and freight rates gradually softened as well. By the time activity had again picked up at the very end of March, the BLPG3, which is the West to East, West to East Index, was posted in the $90s per metric ton on the Houston-Chiba leg, somewhat not seen since August 2022. Still, earnings being equal to $33,000 per day at the bottom, with a top in February reaching $162 per metric ton or $86,000 per day. Over the quarter, there has also been more activity on the time charter market.

Despite 12 VLGCs new buildings being reportedly delivered during January and March and scheduled new building deliveries for the rest of the year, there's seemingly a drive to ensure vessel supply from several market players. This is indicative of the positive fundamentals of the VLGC market, with seaborne trade increasing and vessel supply being absorbed by the inherent inefficiencies in the market. The positive market fundamentals for VLGCs therefore remains as does the macroeconomic concerns. As was seen during the banking turmoil of March, however, the VLGC market is resilient as propane inventories continue to build in North America and demand for LPG remains robust. Thank you very much, and over to you, Ted.

Theodore Young (CFO and Treasurer)

Thanks, Tim. My comments today will focus on the recent capital allocation events, our financial position and liquidity, and our unaudited fourth quarter results. You may wish to refer to the investor highlight slides posted this morning on our website. On March 31, 2023, we reported $148 million of free cash. As of yesterday, May 23rd, our free cash balance stood at a virtually identical level of $148.6 million, which is net of the $40.4 million dividend that was paid on Monday. I'd note that on top of our free cash, we also have $11.4 million in available-for-sale securities.

The highlight of the quarter was, of course, the delivery of the Captain Markos, our dual-fuel 84,000 CBM VLGC delivered to us on March 31 at the Kawasaki Sakaide Shipyard in Japan. She was financed under a Japanese financing arrangement that we agreed in 2021. The tenor of that agreement is 13 years, and we amortize $210,000 per month until year 5, and thereafter, $250,000 per month until maturity. The interest rate is 2.59%, including the credit adjustment spread, plus 1-month term SOFR. Additionally, during the quarter, we voluntarily prepaid $15 million of debt under the Cresques Japanese financing arrangement.

With a debt balance at quarter end of $663.6 million, our total debt to total book capitalization stood at 43.2% and net debt to net total capitalization at 33.5%. Our leverage ratios are up marginally from last quarter due to the delivery of the Captain Markos, which added $56 million in debt on March 31. We have no refinancings until 2026, ample free cash, an undrawn revolver and one debt-free vessel. Thus, we have a significant measure of financial flexibility. We currently expect our cash cost per day, that's OpEx, G&A, time charter in cost, print interest and principal, for the coming year to be approximately $24,000-$25,000 per day.

Now I'd like to turn to our chartering results and again would remind you to look at the slides posted this morning on our website. For the quarter, we achieved total utilization of 95.7% for the quarter with a daily TCE, that's Time Charter Equivalent revenue over operating days as we define those terms in our filings, of $68,135, yielding utilization -djusted TCE or TCE revenue per available day of about $65,187. Spot TCE per available day, which reflects our portion of the net profits of the Helios LPG for the quarter, was about $68,019. Also, overall, the Helios LPG reported a spot TCE, including COAs of approximately $78,530 per available day for the quarter.

We note that we had previously indicated that the two-month lagged average was a good proxy for our chartering results. That guidance did not hold this quarter because of the volatility that Tim referenced, including the significant drop in rates from the end of September, sorry, the end of December to the beginning of January. Daily OpEx for the quarter was $10,304, excluding dry docking-related OpEx. It was $10,528 per day, including those amounts. Our OpEx increased somewhat sequentially as we experienced moderately higher costs per day for spares and stores, repairs and maintenance, and other miscellaneous expenses. Our time charter in expense for the 4 time charter in vessels increased to $7.2 million, reflecting the partial quarter of the HLS Citrine and the HLS Diamond.

For the quarter that ends on June 30th, we expect total TCE in expense of approximately $10.5 million, which will reflect full quarter contributions from the Citrine and Diamond. We expect the Cristobal, the fourth dual-fuel VLGC to join our fleet, to deliver during the quarter ending September 2023, and thus, for our TCE in cost to increase to $12.9 million for that quarter. On a fully delivered basis, we estimate total quarterly TCE and expense to be $13.2 million-$13.3 million. All these numbers are provided for your reference in the investor highlights slide posted this morning. Our total G&A for the quarter was $7.5 million, and cash G&A, which is G&A excluding non-cash compensation expense, was about $6.7 million.

Since we incurred about half a million dollars in pre-delivery G&A expense, if we exclude that amount, our cash G&A was about $6.2 million. Since our G&A normally skews higher in the fourth fiscal quarter or the first calendar quarter because of certain statutory accruals that we must make, we were pleased with our G&A control this quarter. Our reported adjusted EBITDA for the quarter was $102.1 million, which is the highest quarterly EBITDA in our corporate history. To put that amount in context, our total EBITDA for fiscal 2022 was $161.1 million. Interestingly, the March 2023 quarter also represented the highest ever level of U.S. Gulf loadings, 267 liftings to be precise, underscoring the significance of U.S. exports to the global LPG trade.

Turning to interest expense, our cash interest expense, which we define as the sum of the line items, interest expense, excluding deferred financing fees and other loan expenses, plus realized gain loss on interest rate swap derivatives, resulted in cash interest expense for the quarter of $7.1 million. With the addition of the Captain Markos and the reduced debt on the Cresques, we estimate that our total quarterly interest expense for the current quarter, that is the one ending June 30th, will be about $8.1 million, reflecting a full quarter of the Markos and the higher SOFR rates on our floating rate debt. Nonetheless, we continue to benefit from our hedging policy and the favorable pricing of our Japanese financing, leaving us with a current interest cost on a weighted average basis of 4.1%.

Although we currently hold a roughly 8.6%, sorry, 86% economic interest in Helios, we do not consolidate its P&L or balance sheet accounts, which has the effect of understating our cash and working capital. Thus, we believe it's useful to provide some additional insight in order to give a more complete picture. As of Tuesday, May 23rd, the pool had roughly $8.7 million of cash on hand. Turning to capital allocation, with a payment of another $1 regular dividend, we've now paid dividends in 7 of the last 8 quarters, totaling $8.50 per share or $343 million, $343.3 million.

Coupled with our $113 million self-tender offer and $115.5 million of open market repurchases, we have now returned over $570 million to our shareholders since our IPO. The significant dividend payments in the last year underscore our board's commitment to a sensible capital allocation policy that balances market outlook, operating and capital needs of the business, and an appropriate level of risk tolerance given the volatility in shipping. We remain cautiously optimistic about our cash flow generation over the coming months, but we'll be vigilant for changes in the global macroeconomic and energy market outlook. With that, I'll pass the call over to John Hadjipateras.

John Hadjipateras (Chairman, President, and CEO)

Thank you. Sherry, we're ready to take some questions.

Operator (participant)

Thank you. With the prepared remarks completed, we will now open the line for questions. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Omar Nokta with Jefferies. Please proceed.

Omar Nokta (Managing Director)

Thank you. Hey, guys. Good morning. Good afternoon. wanted to ask about the state of the VLGC market. Obviously, you know, in your opening remarks, you talked about just the strength that we're seeing, but just wanted to maybe dive a little bit further into it. You mentioned the new buildings. They've been absorbed so far. Given year-to-date rates have averaged basically 2 times what they did last year at this time, you know, perhaps the new buildings just aren't enough. Just want to get a sense from you kind of what's really been driving this market upturn that we've been seeing and sort of relentlessly continuing to strengthen as it proceed through the year?

John Hadjipateras (Chairman, President, and CEO)

Thanks for that. Great question, Omar. I'll let Tim have a go at answering it because he's right there on the front lines. I think I can introduce him by saying that last year the expectation was of fear of the order book. Already by the end of the last year, we were seeing anticipating a stronger 2023 than had been generally projected. Of course, we're pleased that it's continuing. I'll let Tim give you a little more color as to how confident we are about its strength and, you know, going forward with the usual caveats, of course. Tim?

Tim Hansen (Chief Commercial Officer)

Yeah. I mean, I think what has kept the market strong is the high production in the U.S., which was also spurred by the high crude prices and LNG prices due to the war in Ukraine and the sanctions against Russia. That's we have seen more product coming into the market than we initially had expected. We've also seen the global economy recovering better than was expected after the COVID, especially China has recovered better. With high oil prices also we have seen the demand for both during some of the winter as a substitution for LNG, which I think we discussed on previous calls.

Also now in the pet chem market as a Naphtha substitution. There has really been a good pricing of the LPG due to the competitive pricing of the LPG due to the high production of both crude oil and natural gas. With China recovering quicker, the import demands in China has also given the long haul voyages that of course also absorbed a lot of ton miles compared to what if you look at what the average has been, voyage lengths and the additional tons have some so to speak, gone longer haul, if you see that. That has tightened.

I think we have still not seen really the impact of the CII and EEXI yet. Also the Panama delays has not been worse than the normal or if there is a normal for Panama delays. There still are some factors that we see can give some resistance even if there's some downturn in the market. As I mentioned, you know, going forward, we see this reduction continue. Also, as I said, we have seen more time charter inquiries also for longer periods where it's been initially shorter periods because people was nervous about the market further out. Now we do see 2 and 3 years time charters being concluded as well as at decent levels.

There seems to be a general also, perception that this market should hold up.

Omar Nokta (Managing Director)

Thank you. That's very helpful. You know what? That actually does touch then your last comment just about the time charter market having, you know, definitely a bit more liquidity. I was going to ask about that. You know, you generally in the past had secured some vessels on medium-term charters, but recently over the past few years have become more maybe spot-focused. I know you extended the Concorde and the Corsair, maybe just on those two. Were those options that were exercised by the charter or were those new one-year contracts? That's the first question. Second is, as you mentioned, you know, about the two and three-year charters being done at decent levels in the market, are those interesting enough for Dorian to put on contract as well?

John Hadjipateras (Chairman, President, and CEO)

Tim? I mean, yeah, I can answer the last question. Is yes, partly, in a conservative way, we are picking up some. Tim, I think, both the Equinor and the Chevron. The Chevron was a new one. The Equinor was an option, I think. Tim, correct me if I'm wrong.

Tim Hansen (Chief Commercial Officer)

That's correct. Yeah. No, that's correct. One was options, and the other one was extension of the contract that expired.

John Hadjipateras (Chairman, President, and CEO)

Yeah.

Tim Hansen (Chief Commercial Officer)

Then we have done, as I say, the periods when we saw, like in December, we saw only like the shorter or one year with the prompt deliveries, where the charters could take advantage of the $100,000 per day market and then kind of hedge the risk further out, where now we're seeing two and three years. We have done a few of that through the pool to take a little bit of coverage there lately. We didn't do much over the winter, which is normally the usual time to extend.

We didn't really see the values as there was too much nervousness still about the forward market of the LPG and the influx of the new building where we had a bit more bullish view, I think, than most at the time.

Omar Nokta (Managing Director)

Okay, got it. Sorry to just, final question or sort of final follow-up. It sounds like just from your comments that if you were to enter into a time charter, that would be via the pool. The pool would put the vessel on contract. You wouldn't necessarily pluck it out of the pool and put it away.

Tim Hansen (Chief Commercial Officer)

yeah. The pool is structured so that longer-term deals is done outside the pool because that's more. You can say that is more like a financial decision. Then where we consider one, two and sometimes three years time charter is more, a spot trading strategy that, you know, these are deals that complement the spot trading strategy. That is done via the pool.

John Hadjipateras (Chairman, President, and CEO)

Right. Right.

Omar Nokta (Managing Director)

Got it. Well, thanks, guys. I'll turn it over. Congrats on the quarter.

John Hadjipateras (Chairman, President, and CEO)

Thanks, Omar.

Operator (participant)

As a reminder to star one on your telephone keypad if you would like to ask a question. Our next question is from Sean Morgan with Evercore ISI. Please proceed.

Sean Morgan (Managing Director of Equity Research)

Hey, guys. John, in his prepared remarks, kind of went through some of the, you know, efforts that you guys are undergoing to try and reduce carbon consumption, I guess also to, you know, improve operating performance, save on fuel and whatnot. Do you think what's sort of your expectation for, I guess, like the iteration after IMO 2020 and, and being sort of top-down promulgated to basically have to maybe change propulsion or do more in the way of carbon savings versus where the industry is kind of currently?

John Hadjipateras (Chairman, President, and CEO)

Did you say change, propulsion, you said?

Sean Morgan (Managing Director of Equity Research)

Yeah, just kinda like the next iteration of IMO 2020.

Are you sort of thinking in terms of where the industry's headed?

John Hadjipateras (Chairman, President, and CEO)

Boy, if we knew the answer. If we knew the answer. No. At the moment, we're just, we're looking at everything, and we think that there hasn't. There's no silver bullet yet. No, nobody can say that we that down the line, we're going to be all wind-powered or anything. I think it's a mix. I mean, I feel that we're managing our fleet as well as it can be and with a good mix of dual-fuel, scrubber, energy devices, lots of. We keep finding with new technology and all that, we keep finding low-hanging fruit to improve. Even, you know, 1%, 2%, 3%, you add up, it comes, you know, significant.

Down the line, of course, people have talked about ammonia and people have talked about methanol. You know, LNG, of course, so far has been the most popular dual-fuel, which to us didn't make sense, of course, because of, because of the trade that we're in. It's kind of easy to default to LPG as our dual-fuel of choice. I think in a way, the industry in general hasn't found one answer. It's in a funny sort of way, it's helping the balance because it's made investment less, how should I say? People are more reluctant to build ships. That's good from a fleet balance point of view.

Sean Morgan (Managing Director of Equity Research)

Okay. That's sort of interesting. You think after we kind of absorb this current wave of VLGC new builds that are sort of on for delivery, that we might see kind of a pause as the industry tries to take account of how to best position for potential new rules coming down the pipe?

John Hadjipateras (Chairman, President, and CEO)

Yeah, yeah. We'll naturally see a pause in after 2023 because the shipyards are full and the orders that have been coming in, there's still orders coming in for VLGCs, but they're trickling in. You know, I think that the bulge is in 2023 and early 2024, then that's it. It's a normal-

Sean Morgan (Managing Director of Equity Research)

Okay.

John Hadjipateras (Chairman, President, and CEO)

Sort of re-replacement.

Sean Morgan (Managing Director of Equity Research)

All right.

John Hadjipateras (Chairman, President, and CEO)

Age replacement.

Sean Morgan (Managing Director of Equity Research)

Thanks a lot, John. That's it for me.

John Hadjipateras (Chairman, President, and CEO)

Thanks, Sean.

Operator (participant)

That concludes our question-and-answer session. I would like to turn the call back over to John Hadjipateras for closing comments.

John Hadjipateras (Chairman, President, and CEO)

Thank you, Sherry. My closing comment is to thank everybody for your, for listening in and for your questions. Have a good summer until we meet again.

Operator (participant)

Thank you.

John Hadjipateras (Chairman, President, and CEO)

Bye-bye.

Operator (participant)

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.