Euroseas (NASDAQ:ESEA) Q3 2020 Earnings Call

0:00 Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference Call on the third quarter 2020 financial results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer, and Mr. Tasos Aslidis, Chief Financial Officer of the company. At this time, all participants are in 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 1 on your telephone keypad. I must advise you that this conference is being recorded today. Forward-looking statement. Please be reminded that the company announced their results with a press release that has been publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone that in today's presentation and conference call, Euroseas will be making forward-looking statements.

0:49 These statements are within the meaning of the Federal Security's laws. Matter discussed may be forward-looking statements which are based on current managed Expectations that involve risks and uncertainties that may result in such expectations not being realised. I kindly draw your attention to slide number two of the webcast presentation, which has the full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And now I would like to pass the floor to Mr Pittas. Please go ahead, sir. Good afternoon, ladies and gentlemen, and welcome to our scheduled conference call for today.

1:35 Together with me is Stasios Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the three- and nine-month period ended September 30, 2020. Let's turn to slide three to see our income statement highlights. For the first quarter, we reported total revenue of $12.3 million. Net income was $0.2 million, and net income attributable to common shareholders after the $0.2 million dividend on the Series B preferred shares was $30,000, or one cent gain per share basic and diluted. Adjusted net loss attributable to common shareholders for the period was $1.5 million, or $0.26 per share, basic and diluted, after taking into account one-off sales proceeds and some below-current market charges.

2:37 Adjusted EBITDA was $1.2 million. Tasos will review our financial highlights in more detail later on in the presentation. Please turn to slide 4 to view in detail our recent chartering, operational and sale and purchase developments. During the quarter, the MV E&C Hydra was chartered for a period of 3-7 months at $7,200 per day. The charterer of MV Synergy Auckland declared the 8-12 months option, which is based on context, minus 10%. The vessel currently earns about $15,400 per day starting this past October.

3:22 The MV Adridiki G was fixed for a trip for a period of 40 to 70 days at $8,250 per day. There were no dry docking expenses for the third quarter. With regards to idle and commercial of hire, The EM Ebreviki was idle for about 30 days between charters, whilst the EM Hydra was idle for a couple of days between the charters. On the S&P front, in November 2020, we completed the sale of motor vessel EM Athens for a total of approximately $4.1 million of net proceeds, of which $3.75 million was used to repay the outstanding loan of the vessel.

4:11 In addition to EM Athens, during Q3 we completed the sale of motor vessel Ninos, our 30-year-old vessel and eldest vessel in the fleet, for a total of approximately 2.3 million of net proceeds, of which 1 million was used to repay the outstanding loan of the vessel. Please turn to slide 5 where you can see our current fleet profile. Upon the completion of the above-mentioned sales, We now have 14 vessels which include 9 feeders and 5 intermediate container carriers with approximately 539,000 deadweight tons and 42,300 TEU capacity.

4:56 The weighted average age of the fleet by TEU is 15.5 years. Let's go on to slide 6 for our vessel employment chart. As of October 30th, we have about 93% coverage for the remainder of 2020 and about 40% for 2021, based on maximum charter durations. Naturally, we expect that as the market rates increase, the current charters will keep our vessels for the maximum duration possible. Please go to slide 7. Over the last five years, our operational fleet utilization has been in excess of 98.8%. Euroseas has an outstanding safety and environmental record, but at the same time the company is managing to keep costs low, despite running an elder fleet than the other listed companies.

5:56 For the third quarter of 2020, our operational fleet utilization was 99.9%, while the commercial fleet utilization rate in the third quarter was 97.9%. The graph on the page compares daily costs excluding dry docking since 2011 with the average of our peers. Overall, our costs achieved are amongst the lowest of the public shipping companies. Let's go to slide 9 to look at the time charter rates that we had in the market during the third quarter and beyond. Time shutter rates during the third quarter increased across all container ship sizes.

6:44 Rates increased further significantly in October and November 2020 up till today, with time shutter rates for feeder and intermediate sized vessels reaching 2010-2011 levels, the highest levels observed in the last decade. Please turn to slide 10, where we saw the general container ship market highlights of the third quarter in more detail. According to clusters, 1700 TEU jet vessels increased from an average of $6,300 per day in Q2 to $7,050 per day in Q3, and currently it stands at $11,150 The 2,500 TEU geared vessel increased from an average of 7,600 in Q2 to 8,500 in Q3 and currently stands at about $14,100 per day. Similar type of changes we have on the larger sizes as well.

7:44 The 4,250 TEU gearless vessel increased from an average of 8,500 in Q2 to 12,700 in Q3 and currently stands at 22,000. The 5,600 TEU GLS vessel fell from an average of 18,000 in Q1 to 13,000 in Q2 but currently stands at $26,500. Average second-hand prices for older than 20-year-old vessels remained among their scrap prices in Q3, which, however, were about 10% higher as compared to their level during the second quarter.

8:44 Lately, these prices have increased by about 25% as well. For younger vessels of about 5 to 15 years old, There was a price increase of approximately 10% for the 3,500 TEU range, whereas smaller vessels remained flat. However, since October and following the increase in charter rates, prices and interest for acquisitions increased substantially. During this time, the new building prices with no scrubbers China built were stapled with some downward pressure, but the absence of transactions except from a few larger vessels, indicates the lack of interest at current asking prices.

9:33 The inactive container ship fleet currently stands at about 1.5%, totaling 0.35 million TEU. This includes idle due to scrubbing and retrofitting. It should also be noted that these numbers are down from the 2.7 million TEU as of mid-May, and the ship capacity kept inactive for the Stratoreg profit reached its lowest level since mid-2019 and is now close to zero. The number of vessels scrapped increased in Q3 as scrapping in Q1 and the first part of Q2 were restricted by the lockdowns in India, Pakistan and Bangladesh that did not allow more ships to be scrapped during that period when the market was depressed.

10:27 Overall, the fleet has grown by 2.4% in 2020, without of course accounting for the idle reactivations or idling etc. This turns to slide 11. As a result of the pandemic, the economic and trade world environment has dramatically negatively changed in 2020. The last two quarters had been negatively impacted, but recovery seems to have come faster than IMF's initial estimates, which has revised upwards its GDP estimates. The IMF projected world GDP growth in 2020 has been revised upwards from the minus 4.9% during the last quarter to minus 4.4% in October.

11:21 The U.S. economic growth is projected at minus 4.3%. While the Eurozone is expected to need a steeper road to recovery, with GDP fairer growth expected for 2020 at minus 8.3%. All remaining important economies are now expected to contract, as is clearly evident in the slide, yet at lower rates than those expected a quarter ago. Except for India, where a staggering contraction of 10.3% is expected, In 2021, global growth according to the IMF is projected to return to growth, recovering from a decline in 2020 of minus 5.4% to a positive 5.2% growth rate. Naturally, as the decline in 2020 is now projected to be smaller, the rebound in 2021 is also expected to be lower.

12:22 Specifically, in 2020, the US is expected to grow by 3.1%, while Eurozone's growth is expected to be around 5.2%, and China's very strong 8.2%. Similarly, all other developed economies are projected to show a strong recovery. In terms of demand, For containerized trade, which closely correlates to global GDP growth and is measured in TEU per mile, according to Clarkson's, it is now estimated at a negative 4.5% in 2020. However, most recent indications taking into account the latest surge in trade suggest that possibly trade growth will end up at around zero growth this year.

13:16 Notwithstanding this as a fact, a high growth rate of 5.9% is expected to return in 2021, indicating a strong improvement of the global economy. At this point, we should note that the trade and growth projections currently made will probably be revised as COVID-19 develops, but also due to the uncertainty of the geopolitical situation, and especially trade between US and China. Therefore, market development projections are harder than usual to make. Please turn to slide 12 to review the container ship age profile and order delivery schedule.

14:02 As we can see in the container ship age profile chart on the left side of the slide, overall the containerized fleet is a young fleet with a mere 6% of ships being over 20 years old. However, the older vessels are mainly concentrated in the smaller sized classes where our ships operate. Consequently, the growth of the fleet in these segments might even be negative in the next couple of years as the older ships are more likely to be scratched. The right side chart shows the delivery schedule of the current container ship order book which is expressed as a percentage of the fleet. The circled figures for the years 2017 to 2019 show the action on fleet growth after taking into account scrapping, cancellations and slippages.

14:56 The red circled figures for 2020 to 2022 show just the order book before any scrapping and slippages. Currently, the total container ship order book stands at 7.8% of the fleet, a figure which is the lowest observed in more than 20 years. This low level of order book provides a source of optimism for the quick recovery of the rates if trade demand recovers as supply side pressures will be at minimum levels. Please turn to slide 3 where we discuss our outlook summary. The unknown duration of the pandemic and its financial consequences have made predictions about the future trade very difficult.

15:47 The coming of the vaccines, which now seem highly probable till the middle of 2021, gives rise to optimism that we will soon revert to a more normalized market, where demand will continue to be affected by more classical drivers, such as politics and economics. Recently revised projections by Hal Robinson estimate that the 2020 container head hole demand will end up at around 0%. A dramatic improvement of previous forecasts would suggest a much better picture than what Clarkson's numbers still indicate, as economies are reopening faster.

16:32 However, recent lockdowns in Europe much long down this trend. Under these developments of a not as bad an overall market in 2020, it is probable that 2021 demand growth, whilst remaining strong, will not be as strong as indicated in the earlier slide. Ordering of new seats is expected to be contained in the midst of the still uncertain developments and, more importantly, the lack of clarity of the future. As not knowing the optimal seat for even five years out makes the placing of any new order quite speculative and risky. Therefore, for 2021 and 2022, the expected improvement in demand and the low order book could be a catalyst for a continuing booming market, provided that all COVID-19-related negative disruptions will cease to exist and trade wars will not flare up again.

17:40 Let's turn to slide 14. The left side of the slide shows the evolution of the one-year time charter rates for containers of 2,500 TEUs since 2000. Since the financial crisis of 2008, rates stayed rather depressed, with three spikes within the $5,500 to $14,900 per day range. Currently, we see again strong charter rates, flirting with the high scene in 2010 to 2011. But, of course, they are still lower than the supercycle levels witnessed in the mid-2000s.

18:26 The right-hand side of the slide shows vessel values in relation to historical prices since 2011. As we can see, containership values are still significantly below the median and average historical values. This indicates The purchases of six of today's current values could prove very good investments. And with that, I will now pass the floor to our CFO Tasos Aslidis to go over our financial highlights in more detail. Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you through the next four slides to give you an overview of our financial results for the three- and nine-month periods ended September 30, 2020.

19:18 Let's first turn at slide 16. For the third quarter of 2020, the Company reported total net revenues of 12.3 million, representing a 19.4% increase for the total net revenues of 10.3 million during the third quarter of last year. and which was the result of the increased number of vessels operated during this last quarter and was partly offset by lower time charter rates our vessels earned as compared to the same period of last year. The company reported net income for the period of 0.2 million, a net income attributable to common shareholders of 0.03 million as compared to a net loss of 0.2 million and a net loss attributable to common shareholders of 0.3 million respectively for the third quarter of 2019.

20:18 The results of the third quarter of 2020 include a 0.3 million amortization of below-marked time chart contracts acquired and a 1.3 million net gain on sale of essence. Depreciation expense for the third quarter of 2020 was 1.6 million as compared to 1.1 million for the same period of last year due again to the increased number of vessels owned and operated by the company. Adjected EBITDA for the third quarter of 2020 was 1.2 million compared to 1.6 million achieved during the third quarter of 2019. Basic and diluted earnings per se attributable to common share holders for the third quarter of 2020 was $0.1, calculated on 5.7 million shares basically diluted, others number of shares outstanding.

21:22 Compared to basically diluted loss per share of $0.10 for the third quarter of 2019, calculated on $3.3 million, basing a diluted weighted average number of shares outstanding. Excluding the effect on the loss attributable to common shareholders for the quarter of the amortization of the below-market time charter contracts acquired, the net gain on sale of vessels, and the unrealized loss on derivatives, the adjusted loss attributable to common shareholders for the quarter ended September 30, 2020, would have been $0.26 per share, basically diluted, compared to an adjusted loss of $0.15 per share, basically diluted for the same period of last year. Usually, security analysts do not include the above items in their published estimates of earnings per share.

22:25 Let's now look to our figures for the first nine months of 2020. For that period, the company reported A total net revenues of 41.3 million, representing a 54.5% increase over total net revenues of 26.7 million during the first nine months of 2019, again as a result of the increased average number of vessels combined in this case with the higher time charter rates our vessels earn during the period of this year compared to last. The company reported net income for the period of 3.5 million, a net income attributable to common shareholders of 2.9 million, as compared to a net loss of 0.9 million and a net loss attributable to common shareholders of 2.5 million respectively for the first nine months of 2019.

23:23 The results for the first nine months of 2020 include a 1.3 million net gain on sailor vessels, a 1.5 million amortization of below-market time-chartered contracts acquired, a 0.1 loss on write-down of vessels held for sale, and a 0.6 million of unrealized loss on derivatives. Comparatively, the results for the first nine months of 2019 include a 0.2 million amortization of below-market time-chartered contracts acquired, and a 0.04 million of unrealized gain on derivatives. Inverse, another financing cost for the first nine months of 2020 amounted to 3.3 million compared to 2.3 million for the same period of last year.

24:16 This increase is due to the increased amount of debt in the current period compared to the same period of 2019 and is partly offset by the decreased LIBOR rates of our bank loans during the nine month period of this year as compared to last. Depreciation expense for the first nine months of 2020 was 5.0 million compared to 2.7 million during the same period of 2019 as a result of the higher number of vessels we own and operate. Adjusted EBITDA for the first nine months of 2020 was 9.7 million compared to 4.1 million during the first nine months of 2019. Again, the increase due to the higher number of assets.

25:06 Basic and diluted earnings per share attributable to common shareholders for the first nine months of 2020 were $0.52, calculated from 5.6 million basic and diluted weighted average number of shares outstanding, compared to a loss per share of $1.19 for the first nine months of 2019, calculated on 2.1 million shares outstanding. Excluding the effect on the income attributable to common shareholders for the first nine months of 2020 of the unrealized loss on derivatives, the net gain on sale of vessels, the loss on write-down of a vessel set for sale, and the amortization of the below-market time-charter contracts acquired, the adjusted earnings per share attributable to common shareholders for the nine-month period ended September 30, 2020, which have been $0.15, compared to an adjusted loss per share of $1.3 for the same period of 2019.

26:20 As I mentioned earlier, security analysts do not include the above items in the published estimates of earnings per cent. Let's now turn to slide 17 to review our fleet performance in a little bit more detail than I already discussed earlier. Let's first look at our fleet utilization rates, and let's start with our third quarter numbers on the left part of the slide, as usual, which as usual are broken down into commercial and operational. As you can see in this slide, for the third quarter of 2020, we reported 97.9% commercial utilization rate and 99.9% operational utilization rate compared to 100% commercial and 99.9% operational for the third quarter of last year.

27:15 I would like to remind you here that our utilization rate calculation does not include vessels in any scheduled repairs or dry docks, if any of those events happened during the period. On average, 16.5 vessels were owned and operated during the third quarter of 2020, earning an average time charter equivalent rate of $8,403 per vessel per day, compared to $8,554 per vessel per day during the same period, the third quarter of 2019, a quarter during which we operated 13.5 vessels on average. Our total daily vessel operating expenses including management fees, general and administrative expenses but excluding dry docking costs averaged $6,759 per vessel per day during the third quarter of this year compared to $6,388 per vessel per day and others during the same period of 2019.

28:24 Let's now look at the bottom of the table to our daily cash flow breakeven levels presented here on a per vessel per day basis. For the third quarter of 2020, our cash flow breakeven level was $7,924 per vessel per day compared to $9,101 per vessel per day for the same period of 2019. Let's now look at the right part of the slide to review the same figures for the 9 month periods. So for the 9 month period we reported a 97.2% commercial utilization rate and a 98.5% operational utilization rate during 2020 compared to 98.8% commercial and 100% operational for the same period of last year.

29:22 During the first nine months of this year we operated 18.2 vessels on average with a time charter equivalent rate of $9,171 per vessel per day compared to a time charter equivalent rate of $8,638 per vessel per day during the same period, the first nine months of 2019. a period though during which we operated 11.8 vessels on average. Our total daily vessel operating expenses, again, including management fees, general and administrative expenses, but without dry docking costs, average for the period $6,234 per vessel per day, compared to $6,348 per vessel per day for the same period, first nine months of 2019.

30:18 Looking again at the bottom of the table, we can see that our cash flow breakeven level for the first nine months of this year was $8,362 per vessel per day compared to $9,005 per vessel per day for the first nine months of 2019. Let's now move to slide 18 to review our debt profile. This slide shows In the bottom graph, our cash flow breakeven level expectations for the next 12 months, and on the top of the slide, we can see our scheduled debt repayments over the next several years. As we can see, in 2020, our loan repayments included $11.75 million of prepayments due to the sale of the four vessels that we showed during the year. including the E.M. Athens that Aristides mentioned earlier that was sold in November.

31:21 Our loan repayments, as we can see again in the shaded part of the bars of the chart, over the next three years continue to decline. In terms of our balloon payments, in 2021 we have to repay about $12 million for a balloon payment that is covered with four of our vessels. In 2022, there is a small balloon payment of 1.9 million due, again covered by one of our vessels. And finally, in 2023, we have balloon payments of about $33 million, representing loans collateralized by the remaining nine of our vessels.

32:06 We believe that as we did in the past, we'll be able to refinance all of our balloon payments when they come due. Let me make a quick note on the cost of our funding before we move to reviewing our cash flow breakeven levels. We have an average margin on our bank debt of about 3.6% and assuming a LIBOR rate of 0.3%, our senior debt cost would average about 3.9%. If we take into account the cost of a related party loan and the preferred equity dividends, our average cost of our non-equity funding as of September 30th was about 4.5%. Let's now look at the bottom of this table where we can see our cash flow breakeven level expectation over the next 12 months in dollars per day.

33:04 Our loan repayments that we discussed previously, make a contribution of $1,300 to that cash flow break-even level. If we make assumptions for the remaining components of our cash flow break-even level, that is our operating expenses, G&A expenses, interest, dry docking costs, and then cash payment for our preferred stock dividend, we come up with a cash flow break-even level for the next 12 months of about As previously mentioned, we have agreed with the holders of our CLB preferred shares to have the option to pay the quarterly dividend in kind for the period to January 29, 2021 by issuing additional preferred shares.

33:58 Let's now turn to slide 19. This slide provides highlights from our balance sheet. As of September 30, 2020, we had cash and other assets of about 10 million. The book value of our vessels was about 103 million, giving us a total value of book assets of about 113 million. On the liability side, we have an outstanding bank debt of 75.5 million, preferred equity of 8.4 million, and Paterlaidil for about $5.7 million, thus leaving us with a net book value of $23.6 million or approximately $4 per cent.

34:50 If we adjust the book value of our vessels with their market values as of the end of October, we can calculate the net asset value of our fleet to be in the range of 32-33 million, or about $5.6 per share. Recently, our shares have been trading around between 3 and 3.5, more recently a little above that level range. We believe that these trading rates represent a significant discount to both our book and net asset value per share, thus offering good appreciation potential of our shareholders and good investment opportunities for other investors.

35:37 And with that, I would like to turn the floor back to Aristides to manage the remaining of the call. Thank you Tasos. I want to open up the floor to any questions you may have. Thank you. Ladies and gentlemen, as a reminder, if you wish to ask a question, please press star 1 on your telephone keypad or wait for the automated message advising your line is open. Please then state your first and last name before you ask your question. If you wish to cancel your request, please press star 2 once again. Please press star 1 if you wish to ask a question. Your first question is coming now. Please go ahead, caller. Your line is open.

36:30 Thank you. Good day. Keith Sullivan from Maxim Group. Can you follow up with some comments on the Athens sale? And you noted market values for ships have increased recently as well. And then at that sale, you avoided some dry docking expenses. Do you have a similar dynamic with other remaining ships in your fleet with contracts expiring this year that you may consider selling? Or how will you evaluate that? No, I think the Athens was the last vessel that we sold this year. We did sell it at the value of about a million dollars, about the scrap value, indicating this improvement in the market that we have seen. and confirming this improvement in the market that we have seen. It was a vessel that was due for special survey, so we would have needed to pay between $1 and $1.5 million to pass the special survey and install the ballast water treatment plant. So we decided to sell that ship at the time. We don't have any intention to sell any other of our ships in the foreseeable future right now.

37:57 Thank you. And that $1 million figure that you mentioned related to Athens, will you recognize a gain on sale with that $4.9 million of net proceeds? The gain of Athens will be recognized next quarter. It was sold in November. But there will be a book gain on that. Okay. And then you referred to the November 19th purchase agreement and issuing a small amount of shares related to that. Are there additional shares in the next year related to that November 2019 acquisition or any other payment obligations related? No, that was an agreement with the seller of the vessels that if the container market a year down was strong, stronger than where it was last year, there would be an extra compensation of $125,000 per vessel on the four ships that we acquired.

39:07 So, paid in stock. So, that was that, and there is no other warrants outstanding of any kind. Great. And is there any, you mentioned, that happens avoiding the special survey in ballast water. Can you just review uses of cash in the near term? Are there other ships that require special surveys that you can't talk about? There is no imminent special survey in any of our ships within this quarter or the next quarter. I think the next special survey could be on the Veredicti in Q2 next year.

39:58 But there again, the inclination right now is to keep the vessel unemployed and pass it through a special survey. We might have some ships, I think there are a couple of synergy ships that might pass in water surveys in the first quarter. Nothing really dramatic in terms of cost. Okay, thank you for all that detail. Have a great rest of the day. Thanks, Dave. Thank you, Dave. Thank you. Thank you. Your next question is coming now. Please go ahead. Your line is open. Hi, it's Paul Frantz from Noble Capital Markets.

40:43 Aristides, can you – I'm sorry, Tassos, can you just highlight again on the Athens? It sounds like you're going to book a gain of a million dollars in the fourth quarter. I don't have on top of my head what would be the gain that we're going to book, but it will probably be around that level. I need to look at my depreciation level. Okay, I just wasn't clear on that. And then the dry dock expense that you avoided, could you quantify that? Yes, I said it was between $1 and $1.5 million. It involved... The full special survey plus the installation of the ballast motor treatment plant.

41:31 Great, thank you so much. And then when you look at TASOS on your slide 18, you talked about the preferred dividends and you have $100 a day of preferred dividends. Just to clarify, is that assuming that you're going to pay The preferred dividends starting in January of 2021 in cash? That's right. Okay. And then when you look at, you know, the market's moved significantly, you have 40% of your days booked in 2021. Do you have a rate that's associated with that forward cover?

42:17 No. I mean, I don't have the calculation set, but the rate is the average of the rate shown on slide 6. Okay. I would say it's just below 10,000. There are three vessels, Paul, that will be fixed within this year in the next couple of weeks. which we expect to fix at high levels and will affect this number. So in about a couple of weeks we should have a better clarity as three vessels we are aiming to fix for at least a year.

43:07 And you anticipated my next question, Aristides, is just your ability to move your fleet up to market weights and it sounds, it looks like, you know, the two, you know, 2600 TEU vessels, the, what is it, the story in the Evriki, that's the name of my grandmother, Evriki, yes. And I apologize to her for mispronouncing it. It's not easy. But could you talk about, you know, is there any reason why those Two vessels wouldn't move up into what you're showing as the market rate in the 14,000 range? No, there is no reason they would not move up to that level.

43:56 Okay. It has a slight complication because it will have to pass special surveys, so there will be a special survey clause which might affect a little bit the rate, but still... Rates, we feel, are even higher than the 14,000 that is shown in the graph at this point. That's helpful. And then the smaller one, the June Express, any reason why that wouldn't move up into the 11,000, 12,000 range? Yeah, I think it will be in that range that you mentioned, 11,000, 11,500, something like that. And then as you look, it sounds like you were, would there be any discount if you went out a year, Aristides?

44:50 Generally for the smaller vessels, it's not easy to get longer than a year, but today some shutters are talking about that. But of course there would be a discount involved, so we will see how we will decide to fix. Yeah, that's sort of the trade-off of getting cover versus the current rate. And any thoughts on moving more of your fleet to the indexed rates? You know, when you look at the Oakland, you know, that's been able to capture the near-term move in rates pretty well, but The rest of the fleet is more static, if you will. Any thoughts on moving more of the fleet to indexed rates?

45:39 Starters generally in container shipping don't do it as much. In the dry bulk side, we have many fixers which are indexed linked. But on the container side, there is very few charters that want to proceed along that way, so that's why you don't see it that much. We like that. Yeah, a little more predictability? Yeah, it's not extremely predictable, but at least it guarantees full employment, because you never know how the index will move. If there's more predictability, if you fix a year at a certain rate, you know exactly what you're going to make.

46:25 Yep, sorry, that's what I was alluding to, as opposed to indexes can move around a lot. Tassos, when you look at the balloon payment that's due next year, it's just a little bit over $12 million. When do you think you'll be able to talk about... I think we should be able to push it out for two years at least, and most likely we'll do a three-year refinancing. This is during December next year, so there is some time to see how the market develops and how The scrap value of the four vessels alone should be sufficient to cover that balloon.

47:25 So I expect, judging from our past success in refinancing those payments, we would have no dramatic issue to refinance it. Okay. And Aristides, you talked about the contingent payment on the The acquisition that USU shares. I think, I'm not sure, it might have been asked, but I'm not sure you addressed it, but can you talk about why you used the ATM program in August? Is it going to be active going into the next couple quarters? Is that something we should expect? Or just what happened in August that made you use the ATM program?

48:11 We saw an increase in the price of the stock that we felt warranted the use of the ATM in order to increase our liquidity. We think that with the current market and with the fixtures that we have done and we will do, We will use the ATM only opportunistically if we do see sudden rises in the stock price, which we have seen in a few occasions through probably momentum or algorithmic trading that hits these smaller stocks at some point.

49:08 Typically, we use it when the price that we can sell shares is above the NAV at the time. So, we don't use it in any dilutive way. Yes, so looking to, you know, sort of that north of $5.56 a share range. And, Tassos, can you highlight just how much availability you have under the ATM? You know, how many shares you can use, whether it's a... Thank you. I will now hand the call back to Mr. Aristides Pittas for closing remarks. Please go ahead, sir. I want to thank everybody for listening in to the results of Q3 and things look good and probably Q4 results should be better than Q3 still. So we'll talk again at the beginning of the year to discuss the whole year and how prospects are at the time.

50:33 Thank you. Thanks everybody. Thank you. That does conclude today's conference call. Thank you for participating. You may all disconnect.