Tsakos Energy Navigation - Earnings Call - Q4 2024

Transcript

Operator (participant)

Good morning to all. Thank you for standing by, ladies and gentlemen, and welcome to Tsakos Energy Navigation conference call on the fourth quarter 2024 financial results. We have with us today Mr. Takis Arapoglou, Chairman of the Board; Mr. Nicolas Tsakos, Founder and CEO; Mr. Paul Durham, Chief Financial Officer; Mr. George Saroglou, President and Chief Operating Officer; and Mr. Harrys Kosmatos, CFO of the company. At this time, all participants are on a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. I must advise that this conference is being recorded today. Now I'd like to pass the floor over to your host, Mr.

Nicolas Bornozis, President of Capital Link and Investor Relations Advisor to Tsakos Energy Navigation. Please go ahead.

Nicolas Bornozis (Investor Relations Advisor)

Thank you very much, and good morning to all of our participants. I'm Nicolas Bornozis, President of Capital Link and Investor Relations Advisor to Tsakos Energy Navigation. This morning, the company publicly released its financial results for the 12 months and fourth quarter ended December 31st, 2024. In case you do not have a copy of today's earnings release, please call us at 212-661-7566 or email us at [email protected], and we will have a copy sent to you, emailed to you right away. Please note that parallel to today's conference call, there is also a live audio and slide webcast, which can be accessed on the company's website on the front page at www.tenn.gr. The conference call will follow the presentation slides, so please, we urge you to access the presentation slides on the company's website.

Please note that the slides of the webcast presentation will be available and archived on the website of the company after the conference call. Also, please note that the slides of the webcast presentation are user-controlled, and that means that by clicking on the proper button, you can move to the next or to the previous slide on your own. At this time, I would like to read the Safe Harbor Statement. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties which may affect TEN's business prospects and results of operations.

Before passing the floor to the Chairman, I would like to congratulate the company for the transformational milestone transaction to build nine shuttle tankers with secured 15-year employment. This transaction solidifies TEN's profitability and growth for many years ahead. By the way, it also proves how TEN's prudent capital allocation has enabled the company not only to move fast to close this transaction, but also to finance the equity portion required at this stage with your own funds without stretching the company's balance sheet. At this moment, I would like to pass the floor to Mr. Takis Arapoglou, Chairman of Tsakos Energy Navigation. Please, Mr. Arapoglou, go ahead.

Takis Arapoglou (Chairman of the Board)

Thank you. Thank you, Nicolas. Good morning and good afternoon to everyone. Thank you all for joining our call today for the fourth quarter 2024 and the full year 2024 results. As you've seen, excellent results from a market that continues to demonstrate strong fundamentals, a record 21 vessel expansion that will result in a fleet proforma of 82 vessels, and $4 billion of contracted revenues confirming the unique and robust industrial model of TEN. The milestone nine DP2 shuttle tanker deal worth $1.3 billion with Transpetro firmly establishes TEN among a very select group of leaders in the shuttle tanker business and demonstrates once more the commitment we have in servicing the needs of our customers, fully justifies our strategy of maintaining ample liquidity, and it also shows that it allows us to comfortably enter into such accretive mega-sized transactions.

The sale of one more of our oldest vessels generates, again, cash for the company, and the S&P activity of TEN in this front will continue in order to maintain a young fleet and generate additional cash. All this, I think, confirms the textbook nature of TEN's management that allows it to continue paying dividends uninterruptedly since inception, oblivious, I would say, to the cyclical nature of the market. Once again, congratulations to Nicolas Tsakos and the team for this excellent performance, which no doubt will continue keeping TEN in the forefront of the energy transportation business going forward. Thank you, and over to Nicolas Tsakos. Thanks.

Nikolas P. Tsakos (CEO)

Yes. Good afternoon and good morning to everybody. Thank you for your good words. The recent period has been a milestone period, as you mentioned, for the company. It's one of those periods where we leap up to our next stage. We did that back in 2007 when we became the largest ice-class operating fleet in the world. A few years later, in 2014, we became the largest operator for Equinor, one of the most prestigious and demanding end users in the world. Last year, we became the largest dual-fuel vessel operator, just helping our greener side of moving our vessels and keeping our environmental footprint in line. That was by the acquisition of a large fleet of modern dual-fuel vessels.

The Brazilian transaction, as we call it, big in Brazil, is a transaction that puts TEN in, makes TEN for sure the most modern, the most modern deep shuttle tanker operator, DP2 operator, and it complements our existing fleet, which we started in 2012 with four vessels already in the water, three being delivered very early next month. We have April, July, and then in 2026. All the vessels are being built, I would say, in the most superior shuttle tanker, South Korean yard. We had to compete with parties who had inferior or lower rates, more competitive rates than us, but they were building ships in other yards in the Far East, including China, where the expertise was not there.

Our experience, our long-term commitment to the segment, our training center, which is the only one that produces seafarers with accreditation from the Nautical Academy of the U.K., has given us the chance to be successful in achieving a positive result. In the meantime, we're still running business, always looking at extending with extended 21 new businesses with our major companies. As you may know, about 70% of our business is held by the six or seven very prestigious end users. We try to avoid employing our ships to operators or traders. We do it sometimes on the spot market, but long-term, we focus on the people who know and appreciate our services. Also, we have been active and will still be active in the S&P [Central Ventures market.

Just yesterday, we delivered one of our 2009 beautiful Suezmaxes for a capital gain after so many years since 2009 and freeing $30 million of cash. We're also in the market for two more similar transactions from now up to the end of the second quarter. In the meantime, we do not lose track of the day-to-day business, and the fundamentals are very positive. We are a company that has perhaps right now the largest new building program from any one peer group, a very specialized 21 vessel program. All of our program is financed, and there's significant competition from banks to finance.

One thing I have to make clear, we've been always criticized for keeping enough cash, but when transactions like this are there, we can achieve those transactions much better than any of our peer group without really putting strain on our balance sheet or ever having to use to raise equity. This mega transaction is fully financed by general equity and bank debt, which is competing at very attractive terms for our business. Still, I have to say I'm very proud about our team. It has been a very international, global transaction that we were able to achieve. What we are still disappointed is that our share price is half of what it was a year ago when I was here in the United States. Our company was much smaller.

Our company had much less prospects right now with 21 vessels, a 36% dynamic expansion, 82 vessels in the water very soon, and we have doubled our medium to long-term receivables from $2 billion to $4 billion within the last two months with these transactions. We hope, as the major shareholders here who know the value of our company, that very soon our share price will be where it should be. I mean, our book value is in excess of $3 billion. However, not including the new transactions, our market value is even higher than that, and our net debt is $1.5 billion. If you divide this by 30, you should see that the comfortable level where our share price should be should be closer to $50 than $16 or $17.

We know the value of our company, and hopefully, others will identify that this 32 years of continuous dividend, as the Chairman said, is going to go for at least another 32 years. With that, I would ask Mr. Kosmatos or George to please give us, Mr. Saroglou, our President, to give us his detailed report. Thank you.

George V. Saroglou (President and COO)

Thank you very much, Nicolas. We are very pleased to report today another profitable quarter and profitable year. There is a slide presentation that we will try to follow. You can look at it later on as well. Let's go straight to slide number four, which shows the growth of the company since inception in 1993 in terms of deadweight tons. As you can see here, we have turned every major crisis the world has faced into a growth opportunity for TEN thanks to our operating model. We have a counter-cyclical approach in investing in fleet growth by raising equity when we need it, which is usually at the bottom of the tanker market and not usually when our share price is at the top in order to fund growth projects. This is what Slide 5 shows. The strategy has served us very well so far.

In blue, you see the equity offerings in common shares since 1993. In red, the offerings in preferred shares. As you can see, since 2013, we have issued six series of preferred shares, and we have already redeemed, as we speak, four of them at par. The four that we have redeemed have a par value of approximately $225 million. We have announced today a major transaction in the shuttle tanker sector, and this is a milestone deal with Transpetro Petrobras in Brazil. We are building nine state-of-the-art DP2 shuttle tankers that will complement the four that are already in operation and three that we are building for a total proforma shuttle fleet of 16 tankers. This is a landmark transaction that makes TEN one of the largest shuttle tanker operators in the world today.

All 16 vessels are fixed on long employment to major energy companies, including, of course, Transpetro in Brazil. Since in the last two years, since January 1st of 2023, we have upgraded the quality of the fleet by divesting from our first-generation conventional tankers, replacing them with more energy-efficient new buildings and modern second-hand tankers, including dual-fuel vessels. We are very proud to have today one of the largest, being one of the largest owners of dual-fuel LNG-powered Aframax tankers with six vessels in the water. Slide six lists the conventional proforma fleet divided between crude and product tankers, spreading from large VLCCs to the smaller handysize tankers. We have nine new buildings that we expect to take delivery from the second quarter of this year until the third quarter of 2028. You see various colors in this slide.

The red color denotes the new building vessels, but also the vessels that we operate today in the spot market. With dark blue, we list the vessels under fixed-time charters, and with light blue, the vessels with time charters with profit sharing. In the next slide, which has the proforma specialized fleet, we list the 16 shuttle tankers, and on top of that slide, we listed the company's two LNG carriers. If we combine the two slides and account only for the current operating fleet of 61 vessels, 29 vessels or 48% of the operating fleet has market exposure through spot and time charter with profit sharing, while 51% or 84% of the fleet is in secured revenue contracts, which means time charters and time charters with profit sharing. Our biggest clients for both conventional and the specialized segment of the fleet are the names you see in Slide 8.

These are blue-chip names with whom we do repeat long-term business. The largest client of all today is ExxonMobil without yet accounting for the deal that we announced with Petrobras in Brazil. The left side of the next slide shows you the all-in break-even cost for the type of vessels we operate. We have a simple operating model. We try to have our time charter vessels generate revenue to cover the company's cash expenses, which means paying for the vessel operating expenses, finance expenses, overheads, chartering costs, and commissions. We let the revenue from the spot trading vessels contribute to the profitability of the company. Thanks to the profit sharing element, every $1,000 per day increase in spot rate has a positive impact of $0.12 in the annual earnings per share based on the number of 10 vessels that currently operate in the spot market.

I will pass the floor to Harrys Kosmatos, who will walk us through the financial performance of the quarter and the year.

Harrys Kosmatos (Co-CFO)

Hi. Thank you, George. Thanks. On behalf of our CFO, Paul Durham, myself, hello and welcome to our call. During 2024, TEN's fleet averaged approximately two vessels more compared to 2023, reaching 62 vessels in the water. As a result of the divestment of five older tankers, two Suezmaxes, two Aframaxes, and one LNG carrier, and the acquisition and/or delivery of nine vessels, namely five modern tankers from Norway's Viken Crude, the repurchase and termination of two sale and leaseback transactions involving two Suezmaxes, and the delivery of two dual-fuel LNG Aframaxes. Despite this fleet increase during the year, 15 vessels underwent scheduled dry dockings, while three performed repositioning voyages, all of which led to average fleet utilization for the year to settle at 92.5% from 96.3% in 2023, a still healthy level nonetheless.

Resulting from the above and combined with the somewhat softening tanker market, TEN still generated $804 million in gross revenues and $279 million in operating income, the latter after $49 million in capital gains from the sales mentioned above. TCE per ship per day during the 12-month period, which was naturally impacted by the dry dockings, settled at a still healthy $32,550, thanks to a large extent to the number of operating days on long-term secure revenue contracts corresponding to the long-term needs of our clients, 82% in 2024 compared to 77% in 2023. As a result, net income for 2024 was at $176 million, equating to $5.03 per common share, and adjusted EBITDA for the year at $400 million. Fleet operating expenses of $198 million modestly increased in line with the larger number and size of vessels in the fleet after the various acquisitions and divestments during the year.

Operating expenses per ship per day, however, were about 3% lower from the 2023 levels at $9,350, thanks again to efficient management performed by TEN's technical experts on shore and onboard vessels. Total debt and other financial liabilities at the end of the year were at $1.8 billion, which compares favorably to both the book and fair value of the fleet, $3 billion and just about $4 billion at the end of the year, respectively. At the same time, net debt to capital remained at a comparable 45%. Interest and finance costs for 2024, and reflecting the larger fleet size both in terms of vessels and vessel types, as well as continuing elevated global interest rates despite recent cuts, was at $112 million from $100 million in 2023, a manageable increase.

However, this inevitable and controlled cost increase was nullified by more as a result of the $4 million in reduced preferred coupon payments from amounts paid during 2023, $5 million in savings in forward variable hire from the repurchase of two Suezmaxes on leasing contracts in the summer of 2024, and $50 million in interest income. Cash at bank, as of December 31st, 2024, was at just under $350 million, a very healthy level despite having paid $258 million for common and preferred dividends, growth projects, and the exercise of the above leasing repurchase options. Results for the fourth quarter of 2024 were equally attractive, considering that four of the 15 vessels that underwent dry docking during that year happened in this quarter.

A fleet of 62 vessels, as opposed to about 60 in the fourth quarter of 2023, generated gross revenues of $188 million and operating income of $42 million, compared to $220 million and $57 million in the fourth quarter of 2023, respectively. Unlike the 2023 fourth quarter, no impairment charges were recorded during this 2024 fourth quarter. Fleet operating expenses for the fourth quarter of 2024, and despite the four dry dockings mentioned above and the larger fleet size, were at $51 million, just $1.3 million higher than the 2023 fourth quarter level. However, operating expenses per ship per day were marginally lower from the 2023 fourth quarter at $9,480. TCE per ship per day closed the quarter 3.2x higher than the above opex number at $30,107.

The resulting net income for the fourth quarter of 2024 was at $19.3 million, producing EPS of $0.42, reflecting the somewhat softer market driven by lower Asian oil imports, lower fleet utilization compared to 2023 fourth quarter, and the $4 million increase in depreciation and amortization charges the larger fleet entailed. Adjusted EBITDA finished the quarter at $85 million. Supported by the aforementioned results, TEN is in line and in line with its semi-annual dividend policy, will pay a common stock dividend of $0.60 in July 2025, identical to the level paid in July 2024.

In ending, it is pertinent to highlight what George mentioned earlier, that TEN today is undergoing its largest growth phase in its history, with 21 vessels on order, nine of which are the DP2 shuttle tankers on 15-year contracts with Transpetro Petrobras, as recently announced, which in their own right contribute in doubling TEN's minimum revenue backlog from $2 billion to $4 billion, while turning us into one of the largest shuttle tanker owners in the world. With this, I turn back to Nicolas for the closing remarks. Thank you.

Nikolas P. Tsakos (CEO)

Thank you, Harry and George, for putting the details on and putting some numbers on the bones. As we said, it is a very significant period of growth. We are starting the delivery, and yesterday was the very successful sea trials. I do not know if you guys have a picture. It was received overnight from South Korea from the Athens 2004, the first of the two TotalEnergies vessels to be delivered on the 28th of April, followed by the next one on the 28th of June, which will be the Paris 2024. We are keeping Olympian names for those state-of-the-art ships. Those ships will be identical sister vessels to the ones that we are going to build in South Korea, which might have a significantly higher cost than other yards, between 15%-20%.

There are ships that are going to be with us for a very, very long time. The Pentathlon, which was just sold yesterday, she was another Samsung vessel from 2009, and the new buyers were very impressed with her condition. The next is the Anfield. It seems we had a big Liverpool fan crowd when she was named, and she will be delivered in 2026. As soon as those ships will be in the water, 2027 and 2028, identical sister vessels, upgraded versions, environmentally friendly ones are going to follow. It is going to be a very exciting period, very accretive transactions that will add at least will almost double EBITDA when the company will be in full force.

As I said, we are a company, we are the company with the lowest, or I would say, let's put it positive, with the highest concentration of Japanese and Korean vessels. More than 90% of our vessels are Korean and Japanese. If you put it on deadweight tonnes, it is at 95%. We have always been believers that quality has a cost, and that's why we have these results as we speak. With that, I would like to open the floor for any questions. Thank you.

Operator (participant)

Thanks. At this time, we'll be conducting a question-and-answer session. If you'd 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'd 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. One moment, please, while we poll for questions. Our first question comes from Poe Fratt with Alliance Global Partners. Please proceed with your question.

Poe Fratt (Analyst)

Good afternoon. Congratulations on the shuttle tanker deal, getting all nine done. I had a question about the structure of how they're going to be operated. My understanding is that Transpetro is going to be providing the crews and operating the shuttle tankers under a bareboat charter. Is this the first time they've done this? Do you think that what's their capacity to be able to provide the crews for those? Is there a potential where you would, if they can't provide the crews by 2027, would you be able to step in and do the crewing on those shuttle tankers?

Nikolas P. Tsakos (CEO)

I have to say that's a very, very correct and to the point operational question. I think, yes, you're very right. They have been operating. As I said, currently, we have four vessels working in Brazilian waters, in which we also train in our Greek and Rio facilities Brazilian crew. The lack of highly educated or trained seafarers is a global phenomenon. It's not just in Brazil. That's why companies like us, we have our own, we run our own academy, so we take the young men and women, quite a big number of women, which is, I would say, an untapped shore of seafarers. Just less than 5% of the world's seafarers are women. We train them from 18 up to when they enter service. There's a very good probability that we will closely cooperate with Transpetro.

I would say one of the reasons that we were awarded, to our surprise initially, but for many surprise, all nine vessels, is our reputation and capacity to man and run those ships. I will be visiting very often that part of the world with our team. Our aim is to closely cooperate in actually running those ships, which will be a pleasure for us, and it will be very prudent for us because we will be able also to maintain our investment in the quality that we would like to. The short answer to your question is yes.

Poe Fratt (Analyst)

Okay. Great. On the assets front, it looks like you sold the Pentathlon Suezmax, 2009 vintage. You have four older Suezmaxes that are older than 2009. You talked about two potentially pending transactions. Can you give us some flavor on what assets might be under contract right now to be sold in the second quarter?

Nikolas P. Tsakos (CEO)

Yes. I mean, you are correct. Some of our older ships, however, they are chartered long-term to the major oil companies like ExxonMobil and BP. Because of their high-class features, they get a significant premium for almost 20 years we operate them. There could be candidates age-wise, although they're in excellent condition. We have our first-generation Aframax, the 2007 and 2008 ones. We expect to be able to net close to $130 million, including the recent sales of net profits for the sales. That is why I said the mega transaction, because of our strong liquidity and the sales of ships that are coming, would not affect our balance sheet. It's fully funded. There is no requirement for raising equity. We will still maintain a very, very strong liquidity going through that. We will be looking for the first-generation Aframax and Suezmax going forward.

Poe Fratt (Analyst)

Great. Thank you.

Nikolas P. Tsakos (CEO)

Thank you very much.

Operator (participant)

As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Climent Molins with Value Investor's Edge. Please proceed with your question.

Climent Molins (Analyst)

Hi. Thank you for taking my questions. I wanted to start by following up on Poe's question on selling the older side of the fleet. You mentioned decision only to make space for new eco-friendly vessels. I was wondering, generally speaking, does that refer to the vessels you have already ordered, or are you looking into adding additional tonnage over the coming months?

Nikolas P. Tsakos (CEO)

I mean, we are always looking at strategic opportunities, but I was referring to the 21 vessels that we have ordered currently. I think we have currently the largest renewal program for many of our fields going forward.

Climent Molins (Analyst)

That's helpful. Thank you. Shifting toward the recent shuttle tanker orders, is there any appetite to hedge the interest rate risk on the financing you secure for the shuttle tanker?

Nikolas P. Tsakos (CEO)

Yes, that's a very good point. We have a desk of two very stingy gentlemen sitting in our treasury department looking on a daily basis to find ways to make the financing even cheaper. Yes, we are looking on a daily basis. They are proposing to me and to our CFO various structures that could cap interest rate uplift or, yeah. I mean, we're very, very focused on that part of the business.

Climent Molins (Analyst)

Makes sense. Thank you. The Maria Energy is coming off contract in May. Could you talk a bit about how you plan to employ the vessel going forward? Are you willing to lock in a term contract despite the mediocre rates offered for LNG carriers? Secondly, is the sale of the vessel potentially in the cards?

Nikolas P. Tsakos (CEO)

That was your point about the cards?

Climent Molins (Analyst)

Whether you could consider selling the Maria Energy.

Nikolas P. Tsakos (CEO)

Perhaps, perhaps, yeah, just to refresh, the Maria Energy, the name of my late sister, is one of our largest ships. The vessel is fixed forward from May 2026 for 12-15 years at a very, very, very accretive rate to a major end user. What we have to do from May until next May is to cover a year of her operation before she's going to be delivered to a very, very long employment that actually will take her to the end of her life, earning a humongously high double-digit IRR and return on equity that when we build the ship, we never calculated it would be as big as that. Perhaps we have not communicated that yet to the market, or perhaps we did it a long time ago, but she is chartered from 2026 to 2040.

I think that's over my retirement age, but I'll be following developments.

Climent Molins (Analyst)

That's very interesting and helpful. Thank you. Final question from me. I wanted to ask about the dividend. You reiterated last year's $0.60 semiannual distribution. I was wondering, should the market improve going forward, would there be any appetite to potentially raise the second semiannual payment?

Nikolas P. Tsakos (CEO)

Yeah. I mean, that's what we've been doing. We always have the first dividend as a result of the year we just had, the year we just reported. And it was $0.60 last year. We maintained exactly $0.60 for the July semiannual dividend. If you recall, last year in December, we upped it because the market was very, very strong to $0.90. Hopefully, we can do the same, having such a big backlog of employment, and at least have the same dividend. That's what we do. We have our strategy meeting in October. By that time, we have a good view of the first nine months of the year. As we did last year, hopefully, we can do another $0.90 or even more, but let's stick. That's how we operate.

Climent Molins (Analyst)

Makes sense. That's everything from me. Thank you for taking my questions.

Nikolas P. Tsakos (CEO)

Thank you.

Operator (participant)

As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Poe Fratt with Alliance Global Partners. Please proceed with your question.

Poe Fratt (Analyst)

Just two quick ones about the operating stats. I think Harrys mentioned you had 15 dry docks in the 2024 timeframe. How many do you expect in 2025? Also, it looks like your G&A expenses were up in the second half of the year, I think, because of incentive comp. Can you give us sort of an idea of how the 2025 G&A expense line looks?

Nikolas P. Tsakos (CEO)

Yes. I mean, we are looking almost at the dry docks a month, which, considering that we operate a fleet in the water of 60 vessels, that's what you would expect. It's a five-year cycle. Sometimes when the ships are built, I mean, it is kind of not hard for someone to figure it out because it's every five years since the vessels. So if a vessel is built in 2010, she will have 15, 20, and 35 of her special service. As far as we expect the G&A to drop significantly, we've had the pleasure to distribute a big number of or a significant number of shares to our personnel on the ships and in our offices last year. I think that has created a good team feeling for them.

They're all now trying to make sure we get the share price back to about $30, which it should be.

Poe Fratt (Analyst)

Great. Thank you.

Operator (participant)

We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Mr. Nicolas Tsakos.

Nikolas P. Tsakos (CEO)

Thank you for listening in. It has been a very exciting and one of those game changers, as a lot of the international maritime and financial press has called our transactions going forward. We tend to do this every now and then to put the company to its next phase, but we always do it prudently and without putting the house for sale. The company is very well funded. The company can even do a similar transaction going forward without having to raise extra equity. We are in an environment that the underlying day-to-day market is maintaining strength. Right now, the Aframaxes, my son, he's 22, and he's training to be a broker in one of the famous brokerage houses. For him, it's very exciting to see that the winner of this week are the Aframaxes. Aframaxes today are in the 70,000 range.

The ones we have in profit share and the ones that are on the spot are really enjoying that. Suezmaxes is not far behind in the $50,000 range. Last week, the VLs were in the $50,000. It is a very, very lively and strong market with rates being very accretive, mainly for companies like that that have a low cost and a low break-even. We are looking at a well-balanced market. The geopolitical events around the world, starting with the Houthis attacking the world's fleet, and I think the very good defense of the United States and Greece and all the allies that are protecting our seafarers are going to open up further, hopefully, our oceans.

Of course, the increased part of the presence of a decaying gray fleet, and we've seen two incidents in the last month of gray ships actually being abandoned and putting environmental danger in the market, allows mainstream shipping companies like ourselves to enjoy healthy rates going forward. Again, just to reiterate that 60% of our business is done by ExxonMobil, our largest client, followed by Equinor, followed by Chevron, TotalEnergies, Petronas, of course, and BP. We are, in a sense, the floating pipelines of very, very demanding end users. We are getting rewarded for that. Hopefully, we will see this reward move to our share price like it was last year. With that, I would like to thank all of you for listening in. Thank you very much.

Operator (participant)

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.