Diana Shipping Inc. (DSX) Q2 2021 Earnings Report, Transcript and Summary

Greetings, and welcome to the Diana Shipping 2021 Second Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Ed Nebb of Investor Relations. Thank you, sir. Please go ahead.

Thank you, Donna, and thanks to all of you for joining us for the Diana Shipping Inc. 2021 second quarter conference call. The members of the management team who are with us today are Ms. Semiramis Paliou, Chief Executive Officer; Mr. Anastasios Margaronis, President; Mr. Ioannis Zafirakis, Chief Financial Officer, Chief Strategy Officer, Treasurer and Secretary; Mr. Eleftherios Papatrifon, Chief Operating Officer; and Ms. Maria Dede, Chief Accounting Officer. Before management begins their remarks, let me just remind you of the safe harbor notice, which you can see on today's news release. Certain statements made during the conference call, which are not historical fact, are forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act. Forward-looking statements are based on assumptions, expectations, projections or beliefs as to future events that may or may not prove to be accurate for description of the risks, uncertainties and other factors that may cause future results to differ from the forward-looking statements. Please refer to the company's filings with the Securities and Exchange Commission. And now without further delay it is my pleasure to turn the call over to Ms. Semiramis Paliou, Chief Executive Officer.

Thank you, Ed. Good morning ladies and gentlemen, and welcome to Diana Shipping Inc. second quarter 2021 earnings call. My name is, as Ed mentioned, Semiramis Paliou, the company's CEO. And it is an honor and a privilege to be presenting to you today. Let's turn to Slide number 4. I will briefly update you on the company snapshot as of today. We currently have 36 vessels in the water with a carrying capacity of approximately 4.6 million deadweight tons. This is one vessel less from last quarter due to delivery of the motor vessel Naias to her buyers late last week. We expect our fleet to grow again by one vessel though, after we take delivery of our recent acquisition, the motor vessel, Magnolia, a Japanese built 2011 Kamsarmax vessel. Our fleet utilization has remained at very high level coming in at 99.6% for the second quarter of 2021 as against 98.6% for the first quarter of the year. 31 vessels of our fleet continue to be managed in-house by Diana Shipping Services and five vessels are managed by our 50:50 joint venture with Wilhelmsen Ship Management. At the end of the second quarter, we employed 876 people at sea and the shore. Let's move on to Slide number 5. I will go over the highlights of the second quarter and recent developments. Market conditions have remained robust during the last quarter and continue being positive to this date. While we have seen some volatility, especially in the FFA rates during this period, spot rates remain firm and are close to 10 year highs for every dry bulk segment. Stacy will expand further on the market dynamics and the market acquisitions for the near to medium-term further on in this call. Specifically for our company, in April we put in place an ATM program, which we view as a good tool to have and to use should specific market conditions exist. As of today, we have not utilized the ATM program. In June of this year, we successfully issued a five year US$125 million senior secured bonds on the Oslo Stock Exchange with a coupon of 8.375%, approximately US$74 million of the proceeds were utilized for the repurchase of the majority of our existing 9.5% senior unsecured bonds. And the remainder of the new bond proceeds will be used for the repurchase of the remaining old bonds in September and for general working purposes. Within July, we agreed to acquire the motor vessel Magnolia, a 2011 Japanese built Kamsarmax vessels for US$22 million. We anticipate taking delivery of our new acquisition by the end of February of next year. Also last week, the motor vessel Naias was delivered to their new owners. The combination of the two sale and purchase transactions has allowed us to maintain our fleet size intact, while at the same time improving somewhat the average age of our fleet. In July, a tender offer was initiated to repurchase approximately 3.33 million common shares at the price of US$4.5 per share. As we have done in the past, we are ready to put the use of our liquidity when we feel that our shares are trading at levels that we consider attractive given the prevailing market fundamentals. Also within July, we concluded a supplemental agreement with Nordea to extend the existing loan maturity until 2024 while at the same time upsizing the facility by US$460,000. As we stand, we are very comfortable with our debt maturity profile and Ioannis will go over this in more detail further on in our call. Lastly, our consistent chartering strategy has allowed us to have currently secured approximately US$167 million of contracted revenues for full year 2021. Turning to the financial highlights on the second quarter of 2021 on Slide 6. We find ourselves as of June 30, 2021 with a cash and cash equivalents position of US$155 million, including restricted cash as against US$82.9 million as of December 31, 2020. Our debt net of deferred financing costs stood at US$461.5 million at the end of the second quarter of 2021 as against US$420.3 million at the end of 2020. Our time charter revenues for the second quarter of 2021 amounted to US$47 million as against US$41 million for the second quarter of 2020. Last but not least, the company this quarter returned to profitability posting a profit of $0.02 per share for the second quarter of 2021 versus a loss of $0.14 per share for the same period of 2020. Again, Ioannis will go over these as well as the six month numbers in more details further on in this call. Moving on to Slide 7, you find a summary of all of our recent chartering activities. Once again, consistent with our conservative and disciplined chartering strategy, we have taken advantage of the improving chartering markets and have secured attractive time charters for eight vessels of our fleet. More specifically, we charted six Panamax to Post-Panamax vessels at the weighted average daily rate of US$25,693 and for a remaining average period of 116 days per vessel. This can be compared to the US$16,571 weighted average daily rate we achieved for the fixtures presented during our last earnings calls, a clear indication of the market improvement. We have also charted 2 Capesize vessels at a weighted average rate of US$25,957 a day for a remaining average period of 234 days. Again, this is a significant improvement from the US$18,896 we achieved as an average weighted daily rate for last quarter's fixtures. We will continue chartering our vessels that will be redelivered to us in a similar way by staggering maturities, locking in cash flows and positioning us in a manner that will allow us to continue to participate in a continuously improved market in a balanced way as evidenced by the recent fixtures just presented. I will now turn the call over to Ioannis to go over our second quarter 2021 financials in more detail.

Thank you, Semira. I'm very pleased to be discussing today with you our operational results for this quarter and the six months ended June 30, 2021. As you can see in this slide, during the quarter we recorded a net income of $1.4 million that is $0.02 per share. Our time charter revenues increased from $41 million in the second quarter of 2020 to $47 million in the second quarter of 2021, then that represents an increase of about 15% despite the fact that we've had more vessels in the previous quarter. Of course, you understand that this increase is attributed to the increase in the charter rates that we achieved for our vessels compared to what we had in the same quarter last year. At the same time, the whole year's expenses were only $2.3 million compared to $3.8 million for the same quarter in 2020. And that decrease is attributed to some gains that we make from bankers and compared to a loss that we had of $1.6 million last year. We have managed to decrease our operating expenses by 8% to $19.2 million compared to $20.8 million last year and of course this has to do with a less number of vessels in our fleet. At the same time, our general and administrative expenses increased to $7.2 million compared to $6.8 million for the same quarter last year, mainly because we had an increased cost on restricted stock. Interest and finance cost continues to decrease in this quarter and, of course, this is attributable to the decreased interest rates and the decreased average debt of ours. Now, if we look at the six months and these numbers, we've had a net loss attributed to common stockholders of $1.4 million and that's $0.02 per share. The time charter revenues increased to $88.1 million compared to $84.7 million for the same period last year for the same reasons that we explained earlier. Our voyage expenses decreased in the first half of 2021 compared to the same periods of 2020, again because we had $0.7 million gain from bankers compared to $2.9 million loss last year. The voyage operating expenses again were less $37.7 million from $42.1 million that we had in the first quarter of 2020. General and administrative expenses decreased to $13.9 million compared to $16.2 million in the first half of 2020. Because the number in 2020 was increased due to accelerated vesting of restricted shares of our board members, if you remember what we said that day. This interest and finance costs amounted to $9.3 million compared to $12 million last year due to the decreased average debt of ours and also the interest rates decrease. Looking at the balance sheet of ours, as you can see that our cast, cash equivalent and restricted cash increased to $155 million compared to $82.9 million and that has to do with the refinancing agreements we entered into the six month period of 2021, including the $91 million loans from ABN AMRO and $125 million refinancing of our 9.5% unsecured bonds with a new issuance at a decreased coupon of 8.375%. These transactions caused the increase in long-term debt net of deferred finance cost by $41 million. However, it is worth mentioning that our net debt stands at only $315 million. Looking at some selected financial data now, you probably are – you are aware that in 2020 we sold two vessels, as of December 31, 2020 we had agreed to sell three vessels, which were delivered to their new owners in the first quarter of 2021. The sale of these vessels resulted in less ownership days during the reported quarter of 2021 compared to the same quarter last year. Nevertheless, our fleet utilization improved to 99.6% for the second quarter of 2021 compared to 98.3% for the same quarter last year. Better utilization rates and time charter rates resulted in the increase of our daily time charter equivalent rate to 13.47 compared to 10.5 last year. Daily operating expenses were at 5,696 compared to 5,577 for the same quarter in 2020, mainly due to some minor increase in the crew expenses. In the first half of 2021, fleet utilization increased to 99% compared to 97% for the same period. The daily time charter rate equivalent for the first half of 2021 was 12,400 compared to 10,900 for the same period last year. Daily operating expenses slightly decreased to 5,548 compared to 5,593 for the same period last year, that's a 1% decrease. Now let's go into more interesting stuff looking at how we have managed to make our current debt amortization profile based on what we have done recently as explained by our CEO, we have managed to create the picture that you see here regarding our debt amortization. And you can see clearly here how strength our debt amortization profile is currently stands especially what we have done recently with Nordea supplemental agreement that we did and we basically exercise both of our options to bring the debt facility two years – maturing two years ahead from now. And the interesting – just to put some things in perspective, looking at this profile, assuming that in the next three years, we are earning $21,000 on average on our vessels, we would have generated free cash flow to repay the entire debt of our till 2032, or if we were to have fix all of our vessels at $16,800 for the next five years, we would have generated again the same amount repaying all of our debt. If we move to the next slide, you can see, again, a similar slide to what we have explained in the previous quarter regarding our free cash flow breakeven, which we find very healthy. And if you compare that with the average daily time charter rate of fixed revenues for 2021, you can see that especially for 2022 that there is a lot of free cash flow. I think the next slide gives you a better picture and the whole idea of where we stand now as a company and based on the market conditions, on the left-hand side, you can see for 2021, the remaining period for 2021, the ability of the company to generate based on the FFAs around $42 million as a free cost flow. And for 2022, the same exercise, if we assume that our cash flow breakeven is the number that we gave you earlier and we fixed our vessels for one year based on the FFAs that exist today or recently. We can generate another $134 million for 2022. On the right hand side, you can see that on a daily basis, but I think she's really interesting to understand where we stand today based on our cash position, based on our debt position and also our cash flow generating position. I think, there are going to be questions about that, but I leave it for now and I give the floor to Stacy to talk about the market, the dry bulk and market overview.

Thank you, Ioannis. I will start with Slide 17, the obvious place to look at the latest developments in the dry bulk carrier earnings in both the spot and period markets. They need to be placed in perspective by looking at the Baltic indices and how they have moved during the last three months or so. Present levels will also be compared with the all-time highs reached about 13 years ago. On April 1, the first trading day of the second quarter, the BDI stood at 2072 on August 2, yesterday, it closed at 3282. The all-time high of this index was 11,793 on May 20, 2008. The Baltic Cape Index was at 2394 on April 1, yesterday it closed at 4,272. This index reached the 19,687 on June 5, 2008. On April 1, the Baltic Panamax Index stood at 2484 and yesterday closed at 3290, the all time high of this index was 11,713 on October 30, 2007. At the beginning of the second quarter, the 5 T/C routes for Cape stood at $19,853 a day, yesterday the rate was 35,429, with the all time high being 233,988 and for Kamsarmax now the five time charter rate was at 22,354 per day on April 1, while yesterday it reached 29,610 with an all-time high of 94,977. These statistics, which I may have been a bit too much detailed on help to remind us how far we are at present from the all time highs seen nearly 13 years ago, whichever does not mean that those are the levels we will witness before the market turns the south again. It does though help us remember that earnings even though appearing to be at profitable levels, they certainly are, they are nowhere near their all time high. Looking at Slides now 18, and soon we'll shift into 19 to look at the prices of commodities. We'd like to mention that global GDP growth has been driving up commodity demand for at least the last 20 years and impressive compound average growth rates for all major commodities shipped in bulk have helped to increase demand for bulk carrier tonnage and have underpinned the recent increase in earnings. GDP growth in China is expected to be 8.4% this year and 5.6% in 2022. In the United States, GDP is expected to grow by 6.4% this year and by 3.5% next. In Europe, growth is estimated to be 4.4% this year and 3.8% in 2022, while world GDP growth figures are 6.5% for this year and estimated at 4.4% for 2022. According to the latest report issued by Clarksons bulker ton mile demand is projected to grow by 4.3% this year, and should be compared with an estimated 3.3% growth in the fleet during the same period. Demand in 2022 is expected to grow by 2.2%, while supply is anticipated to increase by near 1%. Looking at iron ore, it's projected that worldwide iron ore volumes expected to grow by around 4% this year and a further 1% in 2022. While volumes look set to continue strengthening year-on-year growth is expected to slow somewhat during the second half of this year, compared to the record volume seen the same period in 2020. As regard to Chinese iron ore prices, which we will look at in the next slide, these have increased by 38% year-to-date according to Clarksons. The Chinese government, according to Clarksons, have shown concern over the rapid increase in commodity prices. In this regard to cool off steel demand, the government canceled export tax rebates in April and steel mills are producing steel also from scrap, that's partly replacing expensive iron ore requirements. Likewise, the Chinese government is utilizing according to Commodore Research, its reserves of every type of bulk commodity, including coal in an effort to alleviate commodity shortages, goes to a certain extent by steep price increases. Coking coal now, we have shipments expected to grow by 6% this year after dropping by 7% in 2020. This is mainly due to the effects of the pandemic. China's ban on imports of coal from Australia have led to increases of shipments from Australia to India, Japan, Korea, and Taiwan, which in some cases have led to increases in ton mile demand. Coking coal prices have increased according to Howe Robinson by 100% since this time last year. On thermal coal – in regard to thermal coal, after a steep drop of 10% in 2020 shipments are expected by Clarksons to increase by 4% in 2021 with volumes reaching 956 million tons. Shipments are expected to grow by another 1% in 2022. In this respect, it's worth mentioning some statistics from Commodore Research. They report that Indian power plants' coal stockpiles stand at 43% below last year's levels and are just enough to meet 13 days of demand. Clarksons report that Australian thermal coal prices have increased 38% year-to-date and according to Howe Robinson prices are up 214% from this time last year. In China, the government is using, as mentioned earlier, coal reserves to help alleviate coal and other commodity shortages. As a result of all this, it is safe to conclude that more coal is needed to meet demand and also to rebuild stockpiles for the future. Looking at the longer-term picture coal consumption is supposed to drop from current levels by 20% until 2030. We agree with Clarksons that seaborne coal trade might outperform this because of growing demand from markets in Southeast Asia and China. However, it does look likely that seaborne coal trade peaked in 2019 and that coming years may well mark a turning point as the post-pandemic rebound starts giving way to a longer-term softening in demand. On grains now, according to Clarksons seaborne grain trade, during 2021 season, is expected to grow by 4.5% this year and reach 534 million tons. Clarksons predict a further increase of 2% in 2022. Chinese seaborne grain imports were up 50% during the first five months of this year. During the same period, the United States grain exports were up 50% as well. In line with the commodity price trend, Clarksons report U.S. corn prices have gone up 37% year-to-date and U.S. wheat prices are up 6% over the same period. Moving on to the supply now in the shipping industry on Slide 20, according to banchero costa in 2021, net of slippage and cancellation about 348 bulkers are expected to be delivered with a total capacity of 34.1 million deadweight. According to Clarksons, the bulk carrier order book now stands at 626 ships with a total of 53.7 million deadweight, the lowest level in tonnage term since 2003 and that is less than 6% of the current ship capacity, the lowest percentage since 1991. Interesting to note as Clarksons point out that the order book stood at 80.5% of the trading fleet following the onset of the financial crisis. The fleet of vessels between 65,000 and 80,000 deadweight has actually shrunk inside during the first five months of this year, according to banchero costa and so has the fleet have shipped between 120,000 and 190,000 deadweight. This [indiscernible] building orders partly reflects continued uncertainty over fuel and technology choices against the background of an increasingly strict environmental and regulatory agenda. Even though 16% of tonnage ordered this year is LNG capable. There is no clear winner to date in terms of alternative fuel choices to oil. From the worldwide building order book today 42% in CGT terms is accounted 4% by LNG carriers and 39% by container ships. Therefore, a mere 19% of the order book is represented for all other types of vessels combined. Looking quickly at scrapping, even though age is only one factor in decision-making process to scrap the vessel, it is worth noting that 23% of Panamaxes and 11% of Capes are over 15 years in age. Clarksons expect that about 7.7 million deadweight worth of bulkers will be scrapped this year and about 12.2 million deadweight in 2022. Even though banchero costa estimate about double that capacity will be scrapped this year, we consider this as being overoptimistic if earnings remain at current levels or move higher. Finally, the outlook of the industry. We have the same view as we expressed in our last quarterly presentation as regards the outlook of the bulk carrier industry. In summary, nothing has happened to make us change our agreement with the view expressed by Howe Robinson in their monthly report. In short, we believe that world GDP growth will follow the 2005-2021 trend and lead to sharp increases in seaborne cargo volume. This may lead to increases of about 6.7% for 2021 and 4.3% in 2022 higher volumes than the Clarksons estimate referred to about. Therefore, we remain optimistic about the longevity of the good bulk carrier market we are witnessing today. This pleasant scenario could be ruined by an abrupt drop in demand due to factors unrelated to shipping or a sharp increase in new building orders. As we mentioned though earlier on, yards do not have much capacity to offer to dry bulk new buildings, which in any event they do not like too much because of the low profit margins compared to other types of ships. Thank you. Now, Semiramis will give us also the closing comments of this presentation.

Thank you, Stacy. Thank you. Before we move on to the questions and answer session, I would like to sum up the key points as follows. As it has been the case across all market cycles, the company has maintained a robust balance sheet that serves as a guarantee for the seamless continuous operation of the company. Recent moves have reduced even further the cash flow breakeven points as compared to recent years and in conjunction with the prevailing positive dry box market, it allows the company to generate even stronger free cash flows. The company is in the fortunate position that conditions arrived to entertain a potential fleet growth, fleet renewal and our dividend distribution. Lastly, we remain committed in maintaining the disciplined strategy that has been implemented since inception, which has allowed and should continue to support shareholder value generation throughout the various market cycles. Now, I will turn the call over to the operator to commence the question-and-answer session. Thank you.

Thank you. The floor is now open for questions. [Operator Instructions] Our first question is coming from Randy Giveans of Jefferies. Please go ahead.

Howdy team Diana, how is it going?

Very well. Thank you, Randy.

Excellent. All right, well, I guess, the first question, the S&P market for secondhand shifts very robust right now. You recently announced that acquisition of a 2011 built Kamsarmax, but not until February of 2022. So, I guess, why that vessel and why such a delay in delivery? And then are you evaluating any further potential of sales or acquisitions?

The best is that we have done – hi, this is Ioannis Zafirakis.

Hi, Ioannis.

If we – I think the most important factor for us is to feel comfortable with the vessels that we were buying. There are not a lot of nice vessels around and it had to do a quality and the type of vessels. And also for us taking such a forward delivery, it is not something that we do usually, but we feel very comfortable with the way we have headed our risk with the existing charters. So to cut the long story short, the reason why we bought this vessel, it has to do with the quality of that vessel. And also, I want you to understand that this doesn't mean that we will start a buying spree or start by investors. These vessel was one of – we've had extra money – we have raised extra money from the new bond issuance, and we think that was one of the good ways to utilize this amount.

That's there. And then I guess speaking of another good way to utilize the amount, the tender offer, obviously I think that was a great decision. Any updates around that expiring here in about two weeks? How did you maybe come up with the 4.50 share price and then the 3.3 million share amount?

Again, this is a very important point for us. First of all, you understand that we are there. One day we are trading close to NAV going – trying to go above NAV and suddenly for a reason that we don't understand all this, the dry bulk shipping stocks they dropped 25%, 20%. And we are aware to take advantage of this abnormality. And this is why we acted quickly and we put that tender offer into the market to buy at 4.5, which we considered to a very attractive price for our stock. Of course, you as an analyst you have your calculation regarding the NAV per share, and you see clearly that at 4.50, there is a big discount. So if we find any sales to buy at these numbers, we will consider that to be another good use, another good utilization of money that we have aside. The big picture is that we as a company, we have the ability to do whatever is most appropriate at any time in the cycle. And this is what we have created. We have created the company that we are there to act very quickly and take advantage of all the scenarios that exist at any time.

Sure. And I certainly applaud that decision you're showing your nimbleness and taking advantage of what we think is a kind of unforeseen pullback here. So, congrats again, good luck. Thank you.

Thank you.

You're welcome.

Thank you. Our next question is coming from Omar Nokta of Clarksons Securities. Please go ahead.

Yes, thank you. Hi, Ioannis. I just wanted to follow up maybe on Randy's question just regarding the Kamsarmax. It sounds like there's something specific perhaps about that shift that makes it worthwhile with awake, call it six or seven months. Is there any other color you can give us to what makes it – what makes the vessel standout relative to what else is out there?

I mean – hi, Omar. This is Eleftherios. In reality, I mean, the difference is not six to seven months, because if you're going to go out and then try to buy a similar vessel, if you could find one with prompt delivery then the delivery would probably be September, October, November of this year. So the extra time periods that we waited there was – is only maybe a quarter, maybe three months. On top of that, I mean, I think that the value, the price that we agreed was much lower than what we would have paid before, who had got this specific vessel in with a prompt delivery. To give you an example, an estimate would probably value that vessel with the October delivery of $25 million, so rather than paying in front that extra $3 million, we opted to wait and pay $3 million less with a – for a February delivery. So it was what Ioannis mentioned, the most important was finding the right asset, it was the Japanese built Kamsarmax vessel. We have similar vessels in our fleet. We know that they trade very well. They're very fuel efficient. They don't need a lot of modifications for any of the upcoming rules or the upcoming upgrade in 2023. And on top of that, we've viewed that it's better to save the $3 million rather than pay it upfront and then trying to get it through the charter market for the next three to six months.

Omar, you understand that the only difference of a forward delivery is not what you pay is the risk of chartering the vessel of our bank. That's the difference. Otherwise, if you were, as Eleftherios said, to take delivery of the vessel closure, you would have paid for it. So the only risk that we have taken is that the – at the time of February, when we are going to take delivery where the market is going to be in – whether it's going to be at the level that is going to justify the $22 million. But even for that, we have taken out precautions in case this extreme scenario happens by having kits without existing charters this kind of a risk. For us it's another vessel opening at the beginning of 2022.

Yes, thanks for that color. Yes. So – yes, so it just sounds like good quality vessel, a ship that you have operated vessels similar to and thus know what you're getting. Is there any concern at all that – Eleftherios, I appreciate you mentioning it's only three months or so from a normal S&P deal. Is there any concern that as you get closer to that February delivery date that maybe the seller decides that asset values have gone up too much and they'd rather renegotiate. Is there any risk to that that you see?

We have a contract – an MOA signed. The terms there are definite, and this cannot really happen. If it happens, of course, you have grounds for arbitration and we have a contract, but not usually I have never seen it myself.

And also the sellers are very serious a little bit. Japanese, I mean, they're very – I mean, they…

All of them are serious in a good market.

In a good market, but especially these specific sellers, they're the big Japanese counterparty. So…

In my long history in shipping seen this happen very, very rarely, but I do remember that it costs the person reneging on the contract more than he was ever hoping to make by taking the ship at a higher price. So I don't think anybody would seriously consider that.

Got it, thank you. And maybe just a separate question, obviously, Diana's longstanding approach to deploying your vessels on a one year contracts, two year and three years unavailable. We have seen a lot of at least from our side, we've noticed a lot of 12 months time charters, but we haven't really seen much in terms of duration going beyond that. Are you beginning to see any inquiry there? We've seen the market stay fairly strong here, six, seven months into the year? Are you seeing any inquiry getting into that two year and three year range? And is that something that's attractive to you?

I think it's a matter of how the FFA, I mean, all those inquiries will be based on the FFA and it's a matter of how the FFA curve flattens in the out years. So I mean – we are definitely, probably one of the companies that would seriously entertain going through for two or three year charters as long as that flattening, that curve behaves a little bit better, a lot this at better rates. So, I think, there is – if you go out there and ask and push, you're probably going to get it two, three years. We might not like it, but we are getting to the point I think that maybe sooner, rather than later, we might see the rates that would be appealing for us to fix for more than a year.

Got it, thank you guys.

In other words, Omar, if you ask for a three-year charter, you will find it. The question is what type of risk profile you want to have accepting a number that doesn't look lucrative. But you have seen us in the past that from the moment we would decide to expand the head in periods of ours; we'll do it without hesitation.

Yes. It sounds like, yes, it definitely sounds like there are opportunities, but maybe let the liquidity in the market come first. No, no need to push it? Very good. Alright. Thanks guys.

Now that you have mentioned that, I think it's an opportune time for me to say that yes, and this applies to all of our strategies. We strongly believe that there would be a point soon in the market where the sentiment, the how sustainable this subside is going to be, is going to be much clearer. We're going to have a clear view about the good market that is coming, and this is why you have seen us discipline in a disciplined manner, waiting before we release all of our weapons as accompanying the market. We think that by wasting, we have done a good job and we are ready and set to go soon because market conditions are going to be the optimum for us to do what we have – what we must do for the sake of our shareholders.

Understood. Thank you.

Welcome.

[Operator Instructions] Our next question is coming from Ben Nolan of Stifel. Please go ahead.

Thanks. So I have a few I'll start, actually I start maybe Anas with where you just ended with Omar and tying into Stacy's comments in his prepared remarks, sort of outlining a degree of optimism that you had tapped to the market. [indiscernible] as you've sort of always been an efficient market proponent, and that effectively the market evaluate the positives and negatives and equitably prices things. But clearly you sound more bullish and maybe the market or you expect the market to improve and like the FFA curve to improve it. Maybe can you outline, why you are sort of taking – maybe a more aggressive stance or why you feel like maybe the market isn't necessarily efficiently pricing in the, the fundamentals?

So I think now we have the appropriate balance sheet, the appropriate size as a company, to be able to have this discipline approach in ways. We think that based on what we see in the market in the short-term, but this is the only thing that someone can see. I think – we think that June is going to come the time where we can do what we know how to do properly in order to create value for our shareholders. And that will give us the opportunity to make the best out of what we have been waiting in a disciplined manner. I keep saying that because I've seen other companies that they are asked to do things before the dust settles. I think now it is more clear what is happening in the market. We are going to see the remaining of the year stronger and the next year beginning very strong. And that would be the best time we think for us to utilize our balance sheet in the best way possible for our shareholders. I cannot give you an assurance about what is going to happen or what we will do, but we haven't taken that decision. But the only thing that is certain and we have demonstrated recently is that we have options to do what we will consider to be the most appropriate risk reward ratio for our shareholders.

Okay. Well, let me approach it in a different way. You even there sound like you believe that the market is going to be going higher. The FFA curve for next year is lower than where we are currently by the decent amount, and I'm very low. What do you think the market is missing?

The market is missing the fact that the challenges that they are ahead, that they're over estimated. The actual problems that exist in the market, they have created the environment where the market is overreacting on those, and when you have an overreaction to a problem you create an opportunity. This is our belief. We think that the emissions issues, the financing issues the banking issues, they have been all – there is an overreaction in the market that has kept supply at very low levels and provided the demand, stays where it is improves a bit. We are going to see that happening. We're going to see the markets going even higher. People are very relaxed looking at the problem, but they don't understand that, that there has been already another reaction to those both problems.

Okay. And then just following, and I apologize for these macro questions. I usually don't like to ask them, but I thought it was an interesting time. Stacy, you outlined sort of where things were in 2008 and for all of you and [indiscernible] were there at that time, it was it was a whole lot of fun, but I never thought kind of levels again. Is there anything in the current supply and demand dynamic that either give you some hope that maybe it's possible or is it – is that maybe a little bit too, too optimistic of, or it's unlikely that we would see that sort of a scenario again?

Well, to say that it's likely will make us severe over optimistic and very aggressive, which we traditionally never are and never have been. But that it is possible, it is, and I can envisage a scenario for example, where demand continues going up, not in the explosive way that it did in 2008, but in a very healthy manner. And suddenly we realize that even if we want to build ships, we can't build them for the next three years for the reasons that I outlined briefly earlier on. In other words, lots of containers, lots of LNGs being built, et cetera, et cetera. So if we see that we cannot really meet demand, as we have mentioned, and particularly Ioannis has mentioned this in previous conference calls, you don't need an enormous shortage of ships to have rates going up by a lot. So if we see a persistent shortage of bulk carriers and psychology moves the right direction, we could conceivably see numbers of the order that we saw back in 2008. We're not saying it's likely, but the scenario that I outlined could bring us close to those figures, yes.

Okay. Great. And then last, just record keeping for me, I believe that you mentioned that you had not been active under the ATM program, is that correct? And if so, what the share count was a few million shares higher. How should we think about the share count, or the basis for the share count prior to the tender offering here?

The so found...

No, it's probably the best thing of – the best thing of… [Multiple Speakers]

Is the same number.

The same number, that was in the previous quarter.

Yes. Okay. Alright. I'll check my numbers there. Thanks.

You're welcome.

[Operator Instructions] There's no additional questions. Thank you at this time. I'd like to turn the floor back over to management for closing comments.

Thank you all for joining us today. We look forward to talking to you again at our next earnings call. Thank you very much.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and have a wonderful day.