Navigator Holdings - Earnings Call - Q4 2020

Transcript

Speaker 0

Thank you for standing by, ladies and gentlemen, and welcome to the Navigator Holdings Conference Call on the Fourth Quarter and Year End twenty twenty Financial Results. We have with us Mr. David Buttus, Executive Chairman Mr. Harry Beans, Chief Executive Officer Mr. Neil Nolan, Chief Financial Officer and Mr.

Erwin Lindemann, Chief Commercial Officer. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today. And now I pass the floor to one of your speakers, Mr.

Butters. Please go ahead, sir.

Speaker 1

And thank you, and good morning, everyone, and welcome to the Navigator fourth quarter earnings conference call. Now as we conduct today's conference call, we will be making various forward looking statements, and these statements include, but they are not limited to, future expectations, plans and prospects from both a financial and operational perspective. These forward looking statements are based on management's assumptions, forecasts and expectations as of today's date and are, as such, subject to material risks and uncertainties. Actual results may differ significantly from our forward looking information and financial forecasts. Additional information about these factors and assumptions are included in our annual and quarterly reports filed with the Securities and Exchange Commission.

Today's call will include comments from Harry Deans, CEO Niall Nolan, our Chief Financial Officer and Oyvind Lineman, our Chief Commercial Officer. So Harry, why don't you take the call from here?

Speaker 2

Thanks, David. So good morning to everybody on the call. I hope you're all well and keeping safe. It's hard to believe that it's now well over a year since we entered our first lockdown, with most of us thinking it lasts for maybe three or four weeks at most. How wrong we were?

We are now in the second or third wave of infection, and new, more virulent variants have unfortunately emerged. Thankfully, science and modern medicine have succeeded in rapidly developing effective vaccines to combat this disease. More vaccines and counting have now been approved and have been rolled out worldwide, albeit the vaccine programs are inconsistent and patchy best across nations and geographies. Although overall, the business environment started to improve in the 2020, it is clear that the global business activity continues to be impacted by COVID-nineteen flare ups and the new strains. We expect vaccination levels rise significantly.

Turning to our Q3 call, we said that we were once again running our business remotely from our home offices worldwide. At that time, we expected that this would be the case well into Q1 twenty twenty one, if not beyond. We now expect that to last well into Q2 of this year. U. S.

LPG production and exports have been remarkably resilient throughout the pandemic, and there was no sign of that changing in Q4. The trend continued into 2021 throughout January and into mid February when the southern freeze or storm year brought snow and unseasonably cold weather to The U. S. Gulf Coast. The winter storm caused a huge amount of disruption to the upstream, midstream refinery and cracker production across the region with the majority of capacity shutting down.

By our estimates, we think at the height of the cold snap, almost 100% of Texas ethylene capacity and approaching 80% of all U. S. Oceans capacity was taken offline. Thankfully, this week, we've seen a sharp bounce back in production with the vast majority of operations already restarted or in the process of being ramped up. I'm pleased to report that the business is again profitable in Q4 for the third quarter in succession.

Our performance bounced back after the impact on Q3 of the Gulf hurricanes with a net income of $3,400,000 and an adjusted EBITDA of $32,000,000 both of which were an improvement on the same period last year. The quarterly and year to date operating revenue, net income and EBITDA have all improved substantially when compared to 2019. Our Morgan's Point ethylene joint venture terminal with a fourth quarter EBITDA of $2,100,000 was again profitable for the quarter and indeed finished and profit for the whole year. Equalization rates finished 2020 as we began strongly with a sharp recovery in the quarter and month to month increases. Q4 fleet utilization was much stronger at 91 with December utilization at numbers last seen in January 2020 of around 95%.

Changing 2021 continued where the OG had left off. Unfortunately, the recovery in utilization rates falcon when the Southern Freeze hit, bringing down the vast majority of U. S. Traffic capacity, virtually all PDH production and severely impacting most fractionation capacity in adults. This storm together with the Mont Belvieu pipeline and subsequent ethylene joint venture terminal force majeure caused major supply interruptions.

Rapid vessel rescheduling and repositioning enabled us to find alternative employment for the majority of our ethylene vessels. Nevertheless, utilization rates have dipped to around the mid-eighty percent level in February and are expected to stay at those levels for the remainder of Q1. As is typical, The U. S. Gulf cracker issues dramatically reduced the available olefin supplies, causing domestic prices spike and leading to the slamming shut of the healthy ethylene arbitrage to Asia.

But despite this blip, nothing has fundamentally changed. There are plentiful supplies of the most advantaged olefin feedstock in The U. S. Ethane, which coupled with olefin's overcapacity and the efficient ethylene market will ensure that the arb will recover as units ramp up, tanks are replenished and the product again is priced to move. Turning now to Crew Release.

I am pleased to report we have made further progress on overdue crew changes in Q4 in the face of ever changing legislation and restrictions. Navigator, together with countless other owners and ship managers, have signed the Neptune Declaration on Seafarer Well-being and Crew Changes. This declaration asked that all seafarers are recognized as key workers a request that coordinated time governmental approach be adopted to facilitate trade changes under internationally agreed health procedures. As testament to the hard work, the dedication and the strict adherence to the new gold standard hunting protocols of our seafarers, the Navigator Guards was fortunate not to experience a single confirmed COVID case in any of our 38 vessels in 2020. Talking about safety, we are proud of the efforts we have taken together with our partners to keep people safe, both physically and emotionally and to keep the products in the tanks.

Our overall fleet safety performance was the best in record. We increased the number of near miss reports, which is a leading safety indicator, while reducing the frequency of actual incidents. We've now reached a significant milestone, having surpassed eight hundred days with a lost time incident on our in house mines fleet. When it comes to safety though, we all know that you're only as good as your last second watch, so we continue to be vigilant. In late December, we completed Phase two of our Morgans Point ethylene JV terminal, when the 30,000 kiloton refrigerated ethylene storage tank was sufficiently successfully commissioned and brought into service.

And this can be seen in the supplemental pack. On the December 23, we reached the crucial milestone when the Navigator Atlas loaded the first cargo directly from the tank. Utilizing the tank facilitates faster vessel loading with speeds increasing almost tenfold. This new capability will allow us to increase throughput whilst improving efficiency for our customers as we reach the 1,000,000 tons nameplate capacity. By any metric, this construction project has exceeded all its targets with a safe on time and below budget completion.

And this is all the more impressive as the majority of the construction took place in the middle of the COVID-nineteen global pandemic. I'd like to take this opportunity to thank everybody involved in the successful delivery of this remarkable and unique project. We are now confident that we'll be able to exceed the terminal 1,000,000 tons nameplate capacity by at least 10% without any significant investment. Overall, Q4 was a good quarter for our business with momentum building month to month. We safely announced from the Q3 weather headwinds and saw the resulting improvements in our utilization rates.

Our ethylene JV terminal finished the year strongly with an annual throughput of over 420,000 tonnes, which was an excellent performance when you consider that Phase one was not fully commissioned until April with the refrigerated tank coming on stream in late December. Once the weather related U. S. Oil production issues and the force majeure subside, this tank capacity will dramatically boost the terminal throughput. When you look at stable cash flows from our take or pay contracts and this will help offset any volatility in the shipping business.

The handysize newbuild vessel order book continues at all time historical lows and this can be seen in Slide 13 of the supplemental presentation. This combined with a startup or the imminent startup of the three new North American export facilities, including our own Morgan's Point ethylene joint venture, the Repano terminal and the Prince Rupert facility will help underpin firming vessel utilization rates. This coupled with the healthy ethane arbitrage and the reopening of The U. S.-Asia ethylene arbitrage together with increasing demand for ethane and LPG in China will help boost exports and should bring improved fortunes for both the Handysize segment and for Navigator Gas. With those few remarks, I would like to hand you over to our CFO, Niall Nolan.

Niall? Thanks, Harry, and good morning all. As Harry referred to the fourth quarter results, with the fourth quarter results, the company has generated a profit in three of the last April 2020 that is excluding the unprecedented first quarter when COVID was initially determined the global pandemic and the world, including the currency markets collectively held its breath. The 2,400,000 profit generated during the fourth quarter compares very favorably against the $2,800,000 loss in the 2019 and indeed the $1,500,000 profit in the prior quarter. That resulted in a small loss of $400,000 for the full year of 2020 against the $16,700,000 loss for the full year of 2019.

EBITDA for this fourth quarter was $32,000,000 with $2,100,000 being generated from the operations of the terminal, following a weak October as a result of Hurricane Laura as discussed on our last earnings call and $29,900,000 from the shipping segment. Total operating revenue from the vessels during the quarter was $87,400,000 an increase of $6,000,000 from the $81,400,000 generated last quarter and an increase of $11,300,000 from the $76,100,000 generated during the fourth quarter of last year. This quarter's $84,000,000 was achieved by an increase in average charter rates, which rose to just over $21,100 per day or $632,500 per month from around $20,200 per day or $615,000 per month for the 2019. Average charter rates across the full year averaged $21,500 a day, a relatively small increase overall from the $20,800 per day achieved in 2019. Utilization improved during the quarter achieving 91% relative to 78.8% for the prior quarter.

And utilization for the full year 2020 was overall the same as 2019 at 86.8%. The meaningful earnings, which are aggregated and allocated to pool participants in accordance with pool points resulted in a net gain to the other participants in the pool of $500,000 during the fourth quarter. But overall, the other participants vessels contributed $400,000 to our vessels in the Lunar Pool since its formation at the April 2020. Revenue also increased by $1,400,000 due to an increased number of days that the vessels were trading during the year as a result of 2020 being a leap year and as a consequence of less days being taken up for vessel dry dockings. Nine vessel dry dockings were undertaken during 2020, taking a total of two twenty four days, two vessels less than planned as a result of delays associated with COVID-nineteen.

The cost of these mine dry dockings was approximately $10,200,000 The two delayed dockings along with 12 others are planned for 2021 at a total cost of $18,000,000 And as I mentioned later, this is the only planned capital expenditure of the company during 2021. Oil expenses increased significantly during the quarter, but these are pass through costs, which are increased operating revenue. The increase is primarily as a result of Canal transits, both Suez and Panama, which collectively rose from five transits during 2019 to '26 for the most recent quarter and from 22 transits during the full year of 2019 to 71 transits in 2020. Now fees are between $100,000 and $150,000 per transit and the increase in number is partly as a result of additional cargoes principally ethylene moving between The U. S.

Gulf and the Far East. Vessel operating expenses were $28,400,000 for the fourth quarter, equating to $8,119 per vessel per day and $109,500,000 for the full year equating to $7,873 per vessel per day, which is a 2% decrease from the vessel OpEx incurred during the full year 2019. General and administrative costs were $6,300,000 for the fourth quarter, similar to that of the 2019. However, G and A costs for the year was just under $24,000,000 a 14.3% increase from the $21,000,000 incurred in 2019. This $3,000,000 increase principally comprised of $1,200,000 for additional audit and internal control related fees, 1,000,000 on additional terminal insurance and uncrystallized losses of $400,000 related to the Indian Museum Europe and terminal formation legal fees of $05,000,000 The other income of $100,000 for the fourth quarter of $200,000 for the year relates to management fees received from our management of the Luna Pool.

Interest costs for the fourth quarter were $9,100,000 which is almost 26% less than the fourth quarter of last year as a result of reductions in U. S. LIBOR. Similarly, interest costs reduced by 15.5% year on year with interest of $41,100,000 for the year to December 2020. The share of the growth of the equity accounted joint venture, which is the equity internal generated a profit of $700,000 for the fourth quarter after a slow start to the quarter in October as a result of the effects of Hurricane Laura discussed earlier.

Net income for the fourth quarter, as mentioned, was $3,400,000 or $06 per share compared to a loss for the 2019 of $2,800,000 and this resulted in a small loss for the full year 2020 of $400,000 The balance sheet remains very strong and we have undertaken a number of refinancings this past year to further strengthen, including the refinancing of $100,000,000 Norwegian bonds, a $210,000,000 vessel loan refinancing and a $69,000,000 drawdown on the terminal credit facility. Cash at the year end stood at $59,300,000 We had a further $51,000,000 available from undrawn facilities for general corporate properties including from the terminal facility. During the quarter, we contributed $2,000,000 to the export terminal joint venture from the latter facility. And since the year end, have contributed what we believe will be the final $4,000,000 taking our total contributions for the terminal development to $146,500,000 which is under budget and as Harry mentioned, delivered on time and safely, all of which is a major achievement in the current environment and frankly at any time for a project of this type. The two final contributions to the Terminal JV were drawn from the terminal credit facility along with another $14,000,000 since the year end for general corporate purposes resulting in that facility being fully drawn at $69,000,000 As the construction of that terminal has now reached practical completion, the terminal facility construction loan has converted into a five year amortizing term loan attracting interest at U.

S. LIBOR plus 2.75%. Our total debt at December 31 stood at $850,200,000 which includes five vessels secured facilities, two Norwegian bonds and one terminal facility. There are no maturities on any of these facilities during this year. And with the exception of an $18,000,000 repayment in March year, there are no maturities on any facility until Q4 twenty twenty two.

The company was in was, of course, in compliance with Oilsek, its financial covenants on all its debt facilities at December 3120. Thank you. And I will now hand you over to Olga. Thanks, Nag. During 2020, we safely loaded, transported and delivered 5,200,000 metric tons of liquefied gases to our customers all over the world.

Out of the 5,200,000 metric tons, 5% of the volume was loaded in South America, 15% from The Middle East, 24% from Europe, 26% from North America and 29% from Asia. This shows the diversified international nature of our trades, which underpins resilience to fluctuations in any one region. However, as you have heard from Harry's commentary, North America plays an increasingly important role in the supply and exports of petrochemical handysize cargoes. Petrochemical cargoes constitute about 47% of our total earnings base and each cargo on average takes more than two months to complete due to the transcontinental nature of these trades. In comparison, LPG cargoes take on average ten days to complete.

Therefore, any change to petrochemical exports even a small quantity and affect the segment, our fleet and our utilization. The lingering impact of Hurricane Laura, the strongest hurricane on record making landfall in Louisiana, was seen going into October. Towards the October, The U. S. Ethylene industry fundamentals normalized as seen on Page nine of the supplemental materials, with prices coming down and ethylene exports recommencing.

Despite approximately ten days of tank commissioning during December at the joint venture terminal, it managed to export about 60,000 tonnes, up from 20,000 tonnes in October and 10,000 tonnes less than a high in January 2021. The impact is often first seen in our utilization rates. Our utilization rates went from mid-eighty percent level during October to above 90 for November and December. And the change can be really attributed to the normalization of U. S.

Ethylene pricing and availability. And the market dynamics seem to be working efficiently as prices came down a month after Hurricane Laura. We have 61% market share of all ethylene cargoes being exported from The U. S. During the quarter, which translates into seven voyages or employments of five vessels during the period.

LPG exports on handysize vessels from the East Coast increased during the period, going from two cargoes in November to five in December, reaching a peak of 10 cargoes in January. We have not seen such activity from Marcus Hook export complex since back in 2015 and 2016. Most of this LPG went across The Atlantic translating to a demand of an extra five handysize vessels during the month. Therefore, any incremental volume, even small, needing handysize transportation has the potential to influence the supply demand balance in a segment consisting of only 120 vessels. Conversely, there is a downside to a finely balanced market.

As you've heard previously, the sudden freeze caused unexpected ripple effects to the entire value chain from February onwards. U. S. Ethylene price increased dramatically. Asian price followed due to attract volume from other parts of the world to substitute the shortfall from America.

The U. S.-Asia arbitrage closed resulting in limited exports. The industry is expected to revert back to fundamental oversupply. Because ethane flatlined during both Hurricane Laura and the southern freeze and remains cost effective for U. S.

Producers. The silver lining from the Southern Freeze is twofold to us. Due to the high U. S. Domestic ethylene price, producers are highly motivated to get production back up at full utilization, minimizing time for the industry to return to normal.

The same happened post Hurricane Laura with ethylene pricing decreasing from a high of $600 a tonne in September to $400 a tonne at the end of the quarter. Secondly, all The U. S. PVH propane to propylene plants also shut, creating a surprising change. U.

S. Almost overnight went from being a net exporter of propylene to becoming a net importer of propylene. U. S. Domestic price of propylene almost tripled to $3,000 a ton.

This presented us with an opportunity. Four of our vessels, after completing discharge of butadiene and ethylene in Asia, grades and loaded propylene bound for America back across The Pacific. We effectively replaced a total of 150 rigged beef ballast days to 150 laden days. This illustrates that triangulation can be and is an upside for our handysize vessels. We are looking forward to the commissioning and startup of both Repauno Export Terminal in New Jersey and the Prince Rupert Export Terminal in British Columbia sometime during the month of April.

Our vessels as well as competitor vessels are currently being considered by various customers for both terminals and are undergoing technical assessment for compatibility. Therefore, to sum up, expected normalization of the ethylene supply demand balance in The U. S. And ramp up of the two new LPG export terminals should have a positive influence to our segment going into the spring and summer months. Thank you.

Speaker 1

Thank you, Oeyvind, Harry and Niall. And let's open up the call now to question and answer session.

Speaker 0

Thank you. You. We will now take our first question.

Speaker 2

Omar Nokta from Clarksons Petfew Securities. Thanks for the overview And just this is a question that you get fairly often. But wanted to ask if now with the marine terminal now officially completed and you've obviously got all your ships on the water, you have no CapEx and you're now starting to bring in cash without any commitments. How do you think about strategic priorities going forward? What sort of the top things on your list here as you look ahead into 2021 and into 2022?

Speaker 1

Sure. If you don't mind, I'll try to answer that and share the answer with Harry. Look, you're right. Our major capital expenditures are completed. The terminal is done, which required a fair amount of capital over the last couple of years.

Our building program is completed. We're satisfied with the fleet that we have right now. Some renewal will be needed in the future as with every shipping company. The immediate thing is to maximize what we have right now. That's our first really goal and we're basically on that course at the moment and I think it will unfold through 2021.

If things go as we expect them, we would think that it would be logical at some point in the not too distant future to focus on perhaps increasing the capacity of our ethylene joint venture. That terminal can be expanded relatively inexpensively. And as soon as we believe that the market is there and that we've fully exploited the existing capacity and tested its outside reaches, which I think we have yet to do, I think that could be an area where capital could be employed and employed extremely profitably. So that is it's just the most obvious thing that we would think about as far as new engagement with capital. Harry, do you have anything you would add to that?

Speaker 2

Thanks, David. Yes, no, I fully concur. I think the other thing, Omar, is you heard in my remarks that we're confident we can get 10% now out of the terminal and hopefully, we can get a bit more as well. We just need to run it consistent rates for a long enough period to see how much more we can get out of the terminal. So without spending any major CapEx at all, so we're going to maximize what we've got, as David said.

Another thing, I guess, I would add is that we're always on the lookout for any consolidation or any other things we can do in the marketplace, obviously at the right price. We continue to assess that. David mentioned that our fleet we will have to do some fleet renewal in the future as some of our fleet gets older. That's just the way it works in this industry. But we're equally looking to see if there's any investments we can make in our vessels to make them more sustainable and to reduce the CO2 and the carbon footprint.

That's all I had to add, David.

Speaker 1

Okay. Thank you, Harry. I think that's probably all we could say about right at the moment about future capital expenditures.

Speaker 2

Thanks, David. Harry, that's clear. And maybe just a follow-up. I wanted to ask about the terminal and the force majeure. Just generally, just a question, in this case, for instance, is that the declaration of the force majeure, for instance, does that cancel altogether the flow that would have been used in the incoming revenue for the JV?

Or does sort of the contract get extended by one or two months where the pipeline wasn't operable? David, can Yes. I answer Thanks, Omar. Unfortunately, coming from the chemical industry, I have a long history in force majeure, either declaring them or even the receiving March. So I know how it works.

Basically, the force majeure suspends the contract for that period. It doesn't extend it. It just suspends it. And it means that the the other declares force majeure has got an obligation to go out and try and find alternative supply as quickly as possible and then get back onto contractual terms again. So it doesn't extend it, it just suspends it.

Does that make sense, Omar? It does. It does. Thank you. That's clear.

And then I guess you mentioned the it's been remedied, the mechanical issue and that scheduled start up is for March. Has it already started up? Or is it still planned to be for March? Yes. Thanks, Omar.

Yes, we're starting up as we speak. So there's a mechanical integrity issue on the pipeline that leads from the cabins to our terminal. And I'm glad to say that they are commissioning and starting up as we speak. So we're hoping to see product flowing imminently. Okay.

Thank you. Very good. I'll leave it at that. Thanks guys. Thanks Omar.

Speaker 0

Thank you. We will now take our next question. Please go ahead. Your line is now open.

Speaker 3

Hey, guys. This is Sean Morgan from Evercore. So, yes, good morning. So to follow-up on Omar's question in regards to the JV terminal and the contribution on the income statement. So I think it's been a little difficult to sort of accurately predict how that's going to be in part because it's just it's coming in and sort of below the operating line.

But when I sort of look at the results you guys had last quarter versus this quarter and sort of thinking about the ramp that I at least I was expecting, is that more of like the commodity arbitrage dictating that decline from 3Q? Or is that disruption from the hurricane? And also given what we know now about the disruption, mechanical disruption in 2021, So how do you think about just kind of that contribution that we're going

Speaker 2

to be seeing? Ivan, do you want to talk about the marketplace and then maybe Nile can follow-up on the financials? So, Sean, what we mentioned in some of the commentary, the real reason of October reduction in utilization was the effect of the hurricane lower. There wasn't that much. It was only 20,000 tons of ethylene from the terminal during that period.

But then our utilization went, we're talking shipping now, went up in November and December to above 90%. And that is majority is because of an increased output throughput from the terminal. So in November and to December, it was 60,000 tonnes in December, and it was even more in January. So that has a positive impact on the shipping side. And the Arctic or trade contracts and all things being equal, in a normal world, whereby U.

S. Pricing is attractive internationally, then you'll see that flow going probably more than what the TSA agreement or the contracted volume is. That's the relationship. And underneath it all is the take or pay concept. So arbitrage opportunity really drives the additional tons, which is obviously beneficial on the shipping side.

Speaker 1

Did that explain that, Sean? Yes. I mean, not entirely.

Speaker 3

I mean, so what's driving the negative decline? Is it the commodity arbitrage or was it the volumes?

Speaker 1

It functions there's no downside in the commodity pricing because of the take or pay contracts.

Speaker 2

Okay.

Speaker 3

So it was volumes then?

Speaker 1

Yes, volumes. In the fourth quarter, there were two impacts on volumes. The first was Hurricane Laura that shut things down and there just wasn't the volume the incremental volumes to take over. The second part was the fact that in December, we had to fill the storage tanks. So we stopped exporting, loading into ships directly from the chiller.

We loaded from the chiller into the storage tanks.

Speaker 3

For a period of

Speaker 1

time during December, there were no volumes to export because they were being used to fill the tanks. By the December, those tanks were filled. And in January, we began what we would call a normalized function, and it worked just supremely well during January where volume and everything just was the way it should be. So unfortunately, you won't you'll see a distortion again in the fourth in the 2021, as you pointed out, simply because of the decrease that occurred in the Southern part of The United States. But it shouldn't be the commodity change, if there's a wide gap in the commodity arbitrage, that impact will only occur and be seen on incremental volumes over and above those committed on the long term take or pay basis.

Speaker 3

Got you. Yes. Okay. So I didn't realize filling the tanks was going to actually disrupt the flow of exports. Thought that could be done simultaneously.

So that actually clears it up quite well. And then just also on the conversion of the finance facility for the construction of the JV terminal. When that converts to the term loan, is that a 25 basis point step up in interest?

Speaker 2

Yes, it is. So it went from U. S. LIBOR 2.5 plus 2.5 to 2.75.

Speaker 3

Okay. That's interesting. Yes, I would imagine with the construction done, it would be less risky. But that's good to know. Okay, thanks.

That's all I have.

Speaker 0

Thank you. And we will now take our next question. Please go ahead. Your line is now open.

Speaker 1

Howdy gentlemen, it's Randy Giveans at Jefferies. How are you? Hey. So on the utilization, impressive number there, 91% for the fourth quarter. That said, you mentioned the Texas freeze, which we call frozen here in Houston.

How much of an impact to utilization should we expect from those winter storms? So what should

Speaker 2

we expect utilization for in

Speaker 1

the 2021? And then also how has this kind of improved utilization impacted the Handysize shipping rates?

Speaker 2

Hi, Randy. Hope it's not as cold in Houston as it was. Seems a recurring But the ripple effect has still felt even though we are in the March. So to your question, January was strong, so similar to December, middle-ninety percent. Then as Harry mentioned in his commentary, reverting back to the mid-80s during the remaining 2%.

So back to where we were at in October. So full

Speaker 1

quarter weighted seems like a high 80%.

Speaker 2

But it's not if you compare to third quarter where Maile mentioned we have sub-eighty percent, it doesn't look like that. That was a low point in 2020, which we are not seeing at the moment.

Speaker 1

Right. Right. All right. So mid to high 80s for the first quarter. Sounds fair.

And then on the in terms of rates?

Speaker 2

It's kind of sideways. I mean, we can we paid ourselves against the Clarkson twelve month time charter assessment. And since January, it has reduced slightly from, say, 700,000,000 to $680,000,000 We haven't dropped as much as some of the other segments, which are more volatile. So it's around about that level instead of in terms of twelve month charters, $650,000,006 $80,000,000 But spot market fluctuates, some are higher, some are lower. It all depends.

Right. Sounds The point is that it is not a crash that you've seen in some of the larger segments.

Speaker 1

Sure. Understandably so. All right. I guess while I have you, Slide 12. You show both the Repauno and the Pembina set to start in the coming weeks or maybe months.

Have you yet agreed to any exports or fixtures out of either project in the near term?

Speaker 2

As far as we are aware, none has completed yet. There are discussions, negotiations ongoing, as I mentioned in my commentary that vessels are being screened both locations for the compatibility. So both terminals, commercially and operationally, are gearing up for commencing exports in April, which is next month. So we've been talking about these two particular infrastructure projects for a while, but they're just around the corner and we expect a positive influence once they get up and going. Got it.

Speaker 1

All right. It sounds like by this time next call, we might have some fixtures that have been completed. Is that a fair assumption?

Speaker 2

All going well. The Handysize fixtures should be in the books. Time will tell you we'll do them. But for the Handysize segment, which obviously is a large part of it is absolutely. Yes, noted.

Good

Speaker 1

deal. That is it for me. Thanks, fellows.

Speaker 2

Thank you. Thanks.

Speaker 0

Thank you. We have no further questions at this time.

Speaker 1

Okay. If there are no further questions, I thank everyone for joining us this morning and look forward to our next call.

Speaker 0

Thank you very much. This concludes our conference call for today. Thank you all for participating. You may now disconnect.