Euroseas (NASDAQ:ESEA) Q4 2020 Earnings Call

0:00 Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference call on the fourth quarter 2020 financial results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer, and Mr. Tafos 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 and wait for your name to be announced. I must advise you that this conference is being recorded today. 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, UACs will be making forward-looking statements.

0:53 These statements are within the meaning of the Federal Security's laws. Matters discussed may be forward-looking statements which are based on current management 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 pass the floor to Mr. Pittas. Please go ahead, sir. Good afternoon, ladies and gentlemen, and welcome to our scheduled conference call for today. Together with me is Anastasios Aslidis, our Chief Financial Officer.

1:38 The purpose of today's call is to discuss our financial results for the year-end and quarter-end of December 31, 2020. Let us turn to slide 3 to see our income statement highlights. For the full year of 2020, we reported total revenues of $53.3 million. Net income was $4 million, and net income attributable to common shareholders after the $0.7 million dividend on the Series B preferred shares was $3.3 million, or $0.58 per share, basic and diluted. Adjusted EBITDA was $11.8 million and adjusted net loss attributable to common shareholders for the year after adjusting mainly for vessels that were sold was 0.1 million or 0.02 cents per share basic and diluted. For the fourth quarter of 2020, We reported total net revenues of 12 million, net income was 0.6 million and net income attributable to common shareholders after the 0.2 million dividend and series B preferred shares was 0.4 million, 0.07 cents earnings per share basic and diluted.

3:06 Adjusted EBITDA was 2.1 million and there was an adjusted net loss attributable to common shareholders for the period of 1 million dollars or 16 cents per share basic and diluted. Tashos 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 operations and sale and purchase developments. The charterer of motor vessel Synergy Busan declared a 4-6 months option as of February 2021 at $12,000 per day. Motor Vessel Synergy Antwerp was extended for a period from September to December 2023 at $8,000 per day starting retroactively from January 1, 2021.

3:55 The Motor Vessel EM Astoria was extended for up to February 2022 at $18,650 as from December 2020. Moreover, every VTG was fixed for up to December 2021 at $15,500 a day as from December 2020. The Charterer of EM Species declared the 5-7 months option at $8,100 per day as from December 2020. Additionally, the Aegean Express was fixed up to April 2022 at $11,500 per day as from December 2020 again.

4:50 Finally note that in early October the EM IVRA was fixed for a period of 3-7 months at $7,200 per day. Today the going rate would be close to $10,000 per day more. This shows how much the market has moved up in the last 4-5 months. We should mention here that the EM Corfu suffered damage on its tail shaft and was idle since early December 2020 for two months for repairs in dry dock and resumed operations on February 10th. All the costs of the repair will be covered by insurance.

5:40 There were no dry docking expenses for the fourth quarter. On the S&P front, as we had previously reported, we sold motor vessel Liam Athens to its current charterer and this sale was completed in November 2020, for a total of approximately $4.9 million of net proceeds, of which $3.75 million was used to repay the outstanding loan of the vessel. Please turn to slide 5 where you can see our current fleet profile. Euroseas fleet currently consists of 14 vessels including 9 feeders and 5 intermediate container carriers with approximately 540,000 deadweight tons and 42,000 TEU capacity.

6:26 The weighted average age of the fleet is 15.8 years in TEU terms. Slide 6 shows our vessel employment chart. As you can see, as of February 22nd, we have about 62% coverage for the remainder of 2021, based on maximum charter durations. Naturally, with the continuing rise in rates, charters are expected to keep the vessels at a fixed rate as much as possible. As you can see, we have three vessels opening up for recharter in Q2, and five vessels in Q3, which we hope to be able to fix at rates at least double their current rates if the market stays strong till then.

7:22 Out of these eight ships, only Synergy Auckland, which is fixed at an index-based level, is earning low rates. The Synergy Auckland currently based on the index-based level is earning around $24,000 per day. So, in all, we expect that half of our fleet will be valued higher during the next three to six months. Please turn to slide A to look at how the market fared during the quarter and beyond. As shown in the slide, Time charter rates have increased significantly despite further concerns about the coronavirus pandemic, exceeding median levels and reaching 12-year highs for certain sizes, a development that we expect to continue in the near term.

8:22 Please turn to slide 9, where we give a bird's-eye view of the general container market of the fourth quarter. Water reversal of fortunes in just three months. According to Clarkson's 1700 TEU geared vessel chart, the rates increased from an average of 7,000 per day in Q3 to 11,400 per day in Q4 and currently stand at around $15,000 per day. The 2,500 TEU geared vessel increased from an average of $8,500 per day in Q3 to $14,200 in Q4 and currently stand close to $20,000 per day.

9:08 Chimza type of changes have been seen on the larger sizes as well. The 4,250 TEU gearless vessel increased from an average of 12,600 in Q3 to 22,200 in Q4 and currently stand at around $31,000 per day. The 5600TU gearless vessel increased from an average of $17,000 per day in Q3 to $26,000 in Q4 and currently stands at around $35,000 per day. Other second-hand prices for vessels between 5 to 20 years old rose significantly by between 40 to 70% and even 100% for good charter-free larger vessels.

10:00 During the fourth quarter, new building prices were stable, but since the beginning of the year, as steel prices have been on the rise and the container market has seen further increases, fresh interest for new buildings has emerged, leading to slightly firming prices. The inactive container ship fleet currently stands at about 1%, totaling approximately 250,000 TEU. This contrasts strongly with the peak less than nine months ago in mid-May 2020, which was 2.7 million TEU. The ship capacity, kept inactive for the scrapped retrofit, reached its lowest level since mid-2019 and is now close to zero.

10:56 The number of vessels scrapped decreased in Q4 to only six ships. or 7.4 thousand TEU, despite scrap prices having increased to over $450 per lightweight ton due to the high demand for steel. On the whole, in 2020 the fleet grew by 2.9%, without of course accounting for idle reactivations or idling etc. Please turn to slide 10. Given the recent global policy support and vaccine rollouts that have raised hopes of a turnaround in the pandemic later this year, the IMF has been gradually increasing its GDP estimates.

11:51 Among the developed and developing economies, China is the only country that managed to post a positive growth of 2.3% in 2020, having recovered faster from COVID-19. For 2021, the IMF projects that all significant countries will post positive growth. In fact, in their latest report in January, world GDP growth in 2021 has been revised further upwards from 5.2% in the previous quarter to 5.5% now. The US economy is estimated to grow at 5.1%, while the Eurozone's GDP is set to rebound by 4.2% in 2021.

12:39 Most important economies are expected to see a slight growth upturn when compared to the previous quarter, except for India, which according to the IMF's projection, will see a huge 3% further increase in its estimated growth. reaching a very impressive 11.8%. China is expected to grow at a very strong rate of 8.1%. For 2022 and 2023, global growth according to the IMF economic outlook will continue to see above-average increases at 4.2% and 3.8% respectively, with most individual countries continuing to grow above-trend except China, which however is also expected to be growing at a reasonable 5.6 to 5.7%. 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 estimates, we expect to see a strong rebound in demand, at 5.4% this year, whilst for 2022 and 2023 The containment rates are expected to hold up at reasonably high levels of 3.2% and 3.5% respectively.

14:06 Of course, all these forecasts should be taken with a pinch of salt as predicting the future is always difficult, but made even harder now due to the disruptions caused by COVID-19, which is changing established life patterns, has a yet unknown duration, and interacts with the uncertainty of the geopolitical situation and especially possible trade between US and China. Please turn to slide 11 to review the container shipage profile and order delivery schedule. As we can see in the container shipage 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.

15:00 However, the older vessels are mainly concentrated in the smaller size classes where our ships operate. Consequently, the growth of the fleet in these segments should be minimal and might even be negative in the next couple of years as no significant orders have been placed to date and some of the older ships are more likely to be scrapped despite the strong market. 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 2021 to 2023 are from just the order book before any scrapping and slippages.

15:45 Currently, the total container ship order book stands at 10.9% of the fleet, a figure which is of the lowest observed in more than 20 years. This low level of order book provides a source of optimism for the continuation, further strengthening of current market levels if trade demand further recovers given that the supply side will be at minimum levels. List per slide 12 where we discuss our outlook summary. The unknown duration of the pandemic and its financial consequences had made predictions about the future trade very difficult. However, if the distribution of vaccines can help with the containment of COVID-19 in the developed markets by the first half of 2021 as widely anticipated, Then in the second half of 2021 and 2022, and without experiencing catastrophic events, we can expect significant global demand growth.

16:50 In any event, current logistical bottlenecks are expected to remain at least till sometime in Q2. In 2021, overall demand is expected therefore to be significantly stronger than in 2020, and higher than the supply growth. This, of course, supports optimism for even stronger rates. However, we have already seen significant rate appreciation over the last three months, surpassing the highest levels of the last decade, so a modest correction, if and when logistical bottlenecks exist, cannot be ruled out. Longer-term fundamentals are hard to predict, and as always will depend a lot on the vessel ordering rate and the rate of growth of demand for container ships.

17:42 Deliveries from the existing order book scheduled for 2022 remain extremely small, even smaller than 2023, thus creating a positive environment which is likely to lead to a continuation of the good markets and perhaps even a further strengthening during 2022. For 2023 onwards, It's too early to try and make a call. New ordering has resumed in the last couple of months, especially for bigger vessels, but still the order book remains at historically low levels. For vessels in the sub-5000 TEU segments, it remains very small, at about 4% of the fleet.

18:29 Let's turn to slide 13. The left side of the slide shows the evolution of the one-year time charter rates for containers of 2,500 EU since 2000. Since the financial crisis of 2008, rates stayed rather depressed with three spikes within the $5,500 to $15,000 per day rates. Currently, we are witnessing stronger charter rates that exceed even the rate levels of 2010 and 2011. and are lower only than the levels we previously experienced in the mid-2000s. The right-hand side of the slide shows vessel values in relation to historical prices since 2011.

19:16 As we can see, current container ship values over the past 2-3 months have significantly increased above historical median and average levels of the past 10 years, but with further room to grow if the current market persists. Under the current market conditions, our strategy is to only acquire vessels in combination with securing medium to longer term charters that would bring the vessels down to median valuations by the end of the charters. At the same time, we are always open to growing the company, using our listed platform to potentially acquire vessels in exchange for shares, as we had also done in 2019 when we acquired 8 vessels.

20:03 In any event, the improved markets will increase the company's free cash flow and we will continue trying to optimize its use between further growth, strengthening the balance sheet and returning capital, having always our shareholders' best interest as our top priority. 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 fourth quarter and full year of 2020 and compare them to the same results of 2019.

20:53 For that, let's turn to slide 15. For the fourth quarter of 2020, the company reported total net revenues of 12 million, representing a 9.6% decrease of the total net revenues of 13.3 million during the fourth quarter of 2019, which was the result of the lower number of vessels operating during the quarter, Partly offset by the higher time charter rates our vessels earned in the fourth quarter of 2020 as compared to the previous year. The company reported net income for the period of 0.6 million, a net income attributable to common shareholders of 0.4 million, as compared to a net loss of 0.8 million and a net loss attributable to common shareholders of 0.9 million for the fourth quarter of 2019.

21:53 Interest and other financing costs for the fourth quarter of 2020 amounted to 0.8 million compared to 1.1 million for the same period of 2019 as a result of lower debt levers during the period. It should be noted that in 2000... In the fourth quarter of 2020, we also recorded a loss on debt extinguishment of 0.5 million due to the conversion of the loan to common stock as per the terms of the loan agreement in November 2020. Depreciation expense for the fourth quarter of 2020 was 1.6 million as compared to 1.5 million in the fourth quarter of 2019.

22:44 Dry docking expenses amounted to 0.1 million during the fourth quarter of 2020, comprising of the cost of one vessel completing the intermediate survey in water. For the same period of 2019, dry docking expenses amounted to 1.5 million due to the cost of one vessel completing her special survey with dry dock and two vessels completing their intermediate surveys in water. Adjusted EBITDA for the fourth quarter of 2020 was at 2.1 million compared to 1.2 million for the corresponding period of 2019, an increase of about 76%. Basic and diluted earnings per share attributable to common shareholders for the fourth quarter of 2020 were $0.07, calculated on 6.1 million basic diluted weighted average number of shares outstanding compared to a basic diluted loss per share of 0.18 dollars for the fourth quarter of 2019 calculated on 5 million basic diluted weighted average number of shares outstanding.

24:01 Excluding the effect on the income attributable to common shareholders for the quarter of the unrealized gain on derivatives, the amortization of below market time charges acquired, and the gain on the sale of a vessel, the adjusted loss attributable to common shareholders for the quarter ended December 31, 2020, puts have been $0.16 per share based and diluted. If we further adjust this number for the loss on debt extinguishment, The adjusted loss per share is reduced to $0.08 per share basically diluted for the fourth quarter of 2020 compared to an adjusted loss of $0.32 per share basically diluted for the fourth quarter of 2019.

24:52 Usually, as we stated in the past, security analysts do not include the above items in the published estimates of earnings per share. Let's now look at the right part of the slide to our figures for the 12 months for the full year of 2020. For that period, the full year, the company reported total net revenues of 53.3 million, representing a 33.2% increase over total net revenues of 40 million during the 12 months of 2019. That is due both to the higher other numbers under vessels we operated, and the higher earnings were during the period.

25:37 The company reported net income for the year of 4 million, a net income attributable to common shareholders of 3.3 million as compared to a net loss of 1.7 million and a net loss attributable to common shareholders of 3.5 million for the 12 months of 2019. Interest and other financing costs for the 12 months of 2020 amounted to 3.6 million compared to 3.4 million for 2019. Again, this increase is due to an increased amount of debt in 2020 as compared to the previous year.

26:23 Also for 2020, I should mention that as we had in the fourth quarter, the results for the year include a 0.5 million loss on debt extinguishment, the debt that was converted to common stock in November 2020. Depreciation expense for the 12 months of 2020 was 6.6 million as compared to 4.2 million for 2019 due to the increased number of vessels in our fleet during the year. Adjaka Dipita in 2020 was 11.8 million compared to 5.3 million during 2019, an increase of 124%. Basic diluted earnings per share, attributable to common shareholders for 2020, were 58 cents, calculated on 5.8 million shares basic diluted, as compared to a loss of $1.21 per share for the 12 months of 2019, calculated on 2.9 million basic diluted weighted average number of shares outstanding.

27:41 Excluding the effect on the income attributable to common shareholders for the year of the unrealized loss on derivatives, the amortization of the below-market time shortage acquired, The net gain on sale of vessels and the loss on write-down of vessels held for sale. The adjusted loss attributable to common shareholders for the year ended December 31, 2020 was 2 cents per share. And if we further adjust this for the loss on debt extinguishment, the year's contribution becomes a 6 cents gain per share as compared to adjusted loss of $1.52 per share, basically diluted, in 2019. Again, as previously mentioned, security analysts do not include these adjustments in their public statements of earnings per share.

28:40 Let's now move to slide 16 to review our fleet performance in a little bit more detailed format than we discussed earlier. As usual, we will start our review by looking first at our fleet utilization rates for the fourth quarter and full year of 2020 and compare them to 2019. Our fleet utilization rate is broken down into commercial and operational. During the fourth quarter of 2020, our commercial utilization rate was 98.5%, while our operational utilization rate was 96.3%, compared to a 100% commercial and 99.7% operational for the fourth quarter of 2019. Arbitralization rate calculation does not include vessels in scheduled repairs or dry docks if any of those events happened during the period. On average, 14.4 vessels were known and operated during the fourth quarter of 2020 earning another time charter equivalent rate of $10,497 per vessel per day compared to 16.84 vessels owned and operated in the same period of 2019 earning another time charter equivalent rate of $9,086 per vessel per day.

30:11 Our total daily vessel operating expenses including management fees, general and administrative and others. 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 fourth quarter of 2020, Our cash flow break-even level was $8,215 per vessel per day compared to $9,237 per vessel per day during the same period of 2019.

31:04 Let's look now at the right part of the slide to review the same figures for the 12-month period, the full year of 2020, and compare them again to 2019. For the full year in 2020, We reported a 97.5% commercial utilization rate, the 98% operational utilization rate, compared to 99.2% commercial and 99.9% operational utilization rates for 2019. During the 12 months of 2020, preventive vessels were owned and operated earning an average time charter equivalent rate of $9,445 per vessel per day, compared to 13.1 vessels operated during 2019, earning an average $8,782 per vessel per day.

32:09 Our total daily operation expenses, again including management fees, General Administer of Expenses but without dry-diking costs averaged for the year $6,431 per vessel per day compared to $6,294 per vessel per day during 2019. Looking again at the bottom of the table, we can see that our cash flow break-even levels for the 12 months of 2020 was $8,357. . Let's now move to slide 17, to review our debt profile.

32:56 This slide shows, in the bottom graph, our cash flow break-even level expectation for the next 12 months, and on the top part of the slide, we can see our scheduled debt repayments over the next several years. Our loan repayments during 2021 are scheduled to be 8.7 million. We can see this in the dark-stated part of the slide. And they are scheduled to decline over the next couple of years in 2022 and 2023. In 2021, we have balloon payments of about $12 million. collateralized by four of our vessels.

33:44 Also, we are scheduled to repay a loan, an affiliate loan of 2.5 million at the end of the first quarter. In 2022, there is a smaller balloon payment of 1.5 million dollars to be made, collateralized by all of our vessels. And finally, in 2023, We have balloon payments of about $33 million that is collateralized by the remaining four of our vessels. We will seek to refinance all of the above balloon payments when they come due. I would like to state here that in January 2021 we made a voluntary redemption of $2 million of our preferred equity Reducing the balance to a little more than $6 million.

34:46 An additional benefit for us of this voluntary payment was that our preferred shareholders agreed to keep the dividend rate for our preferred stock to 8% if paid in cash or 9% if paid in kind at the option of the company. This dividend rate was set to become 14% in January 2021 and will remain at the above-said levels of 8% or 9% for another two years. Let me now make a quick note on the cost of our funding before we move to reviewing our cash flow break-even levels. As we pay an average marginal of our bank debt of about 3.4%, and assuming a LIBO rate of 0.3%, our senior debt cost averages about 3.7%.

35:41 If we take into account, at least at the end of last year, of our affiliate loan and the cost of our preferred equity, our average cost of our non-equity funding as of December 31st, 2020 was about 4.5%. Let's now look at the bottom of this table where we can see our cash flow break-even level expectation over the next 12 months Our loan repayments, that we discussed previously, are to make $1,711 contribution to our cash flow breakeven level.

36:28 We will make similar assumptions for the remaining components of our cash flow breakeven, that is operating expenses, G&A expenses, interest, die docking costs, and for our preferred stock dividend, we come up with a cash flow break-even level for the next 12 months of $9,561 per vessel per day. Let's now move to slide 18. This slide provides highlights from our balance sheet, both on the basis of the book value for our vessels and as adjusted for the market value of the fleet. As of December 31, 2020, we had CAS and other assets of about 12.2 million, while the book value of our vessels was about 19.5 million, giving us total book assets of 110.7 million.

37:30 On the liability side, we had an outstanding back debt of 69.8 million, preferred equity of $8.4 million and other liabilities of about $5.2 million, thus leaving us with a net book value of $21.6 million. If we adjust the book value of our vessels with our charter-adjusted market values as of mid-February, we can calculate the net asset value of our fleet to be in the range of $80 million, or about $12 per share. Recently, our shares have been trading in the range of $8, $10, $11 per share. We believe that trading in this share price range represents a significant discount to our net asset value per share, thus offering good appreciation potential for our shareholders and good investment opportunities for other investors.

38:31 And with that, let me conclude my remarks. and turn the floor back to Aristides to manage the remaining of the call. Thank you, Tasso. Let us now open the floor to any questions that we may have. Thank you very much, sir. Ladies and gentlemen, as a reminder, if you wish to ask a question, please press star 1 on your telephone keypad. Our third question for today is from Tate Sullivan from Maxim Group. Please go ahead. Hello, good day, gentlemen. Thank you. Can you just provide more detail on the Corfu damage? What is the usual timing of the insurance proceeds? And does this kind of circumstance usually extend a time charter?

39:16 Is it still scheduled to expire in September, please? Good question. The proceeds, we expect to get them in January. In this quarter, most of it, maybe some of it next quarter, the charter can be extended. It's their option to extend, and obviously we expect them that they will extend it for the two months that the vessel was of hire. So that will mean that we will probably run for two additional months at the charter rate that we had and 1,200, if I remember well.

40:02 Okay. Okay. Thank you. And then how early with the backdrop of a positive market and I'm looking at your fleet profile with multiple ships with the time charter coming due this year, how early can you start to discuss with customers either extending or securing a new time charter contract? Is it a month before the current expiration or can that change quickly? The usual is about a month before the expiration, that is the usual. We can and we are thinking of approaching charters earlier, but if you approach them earlier, obviously you have to be prepared to get a little bit of a lower rate.

40:49 We might talk on several vessels earlier than that, but we might go up to about a month before the delivery. Thank you. And last one for me, and you gave a lot of good macro backdrop for demand from urgency for customers for container ships, and we've read a lot of examples of disruptions to the market, but from where your ships have been, can you just provide a specific example of I mean, a port that has some disruption for no available ships or inventory building, if you have an example. Ready? Yeah, I can get you information on that. I don't have it on hand, but there have been delays on various ships because of concession.

41:42 If you want, I can get you some information. I will get back to you on this. Okay. Well, thank you for all the previous comments, and have a good rest of the day. Thanks, Steve. Thank you. Our next question is from Pofat from Noble Markets. Please go ahead. Yeah, just to follow up on that first question about the insurance, what is the insurance amount that you're looking to recover, Aristides? About a million dollars. This is about $1 million. Okay. And then when you look at the conversation about the core zoo and the downtime and potentially extending it, does the current fleet profile use an assumption that it will be extended for two months, or is that two months in addition to time charters through September of 2021?

42:39 Okay. It should be two months in addition to the period indicated in our current chart. The charters have not exercised it yet, but I presume they will, of course. Yeah, I mean, considering it's at 10,200 and the current rates are well above that, you would assume. But I assume they'll wait probably... to see how the market develops in the third quarter before doing that? Yes, I would think so. Okay. And then when you look at the upcoming renewals, are you looking to extend out one to two years, even three years, or can you just sort of talk about your chartering strategy in the context of how many How much of the fleet's already extended out into 2022?

43:39 Yeah, as you see, the seven vessels that we have extended, they've all been between one to three years, and the intention is to do something similar. always keeping somehow of a staggered opening of our vessels so that not all ships open up at the same time. But we're looking for minimum one year and going up to three years and we will see how that will go depending on the need. And that's helpful. And then just to clarify on the Oakland, it is, you know, you're only one that's on an indexed rate. And in the Presentation, you indicate that its current rate is roughly 24,918, and then you put minus 10%. I'm just trying to clarify, is the fixed rate through April 21, 24,918, or is that less 10%? It's 34,918, less 10%.

44:41 Okay. Okay. And this is the formula. We are getting the index rate minus 10% and every three months we look at what the index is. So next time we will look at it is on the 24th of April and whatever that rate will be, we will be getting 10% less from that. Yeah, I was going to say it was a good rate, but then I noticed that the current rates are $31,000, but, you know, that's part of the market.

45:26 This will definitely happen. What's important for this particular ship is what the rate will be on the 34th of April, because that will set the rate for the upcoming three months. Great, that's helpful. and then Tassos, you talked about the operating costs and the breakeven. In the fourth quarter, it looked like OpEx were about 6,600, but you're forecasting for the next 12 months about $6,050. Can you talk about what might have moved up the fourth quarter OpEx and what you're seeing looking into 2021 from an OpEx standpoint? Yeah, this was partly due to one-time costs or cost to be in the fourth quarter. Some crew replacement, the majority of the increase had to do with the crew replacement costs because we had, you know, due to the pandemic, certain additional costs for that. And a couple of vessels were trading in areas that required more lubricant, more consumption, and more attention because of the difficulty of the trade, which we expect not to be the case in the coming year.

46:40 And if you look at the annual results, the level of OPEX was very comparable to last year, to 2019, I mean, indicating that the fourth quarter was a statistical outlier. Yeah, more of an aberration. And then when you look at your cash management, you know, from the standpoint of how you're going to decide whether you pick the preferred dividend or Can you just sort of walk us through how you're thinking on that? You know, the 100 basis point higher dividend to pick it. And then also in the context, true, you talked about, you know, a net asset value and you think your stock is, you know, well under that.

47:26 Does that mean that the ATM will be inactive over the course of, you know, until the stock moves up higher or not? Can you just sort of talk about your cash management, you know, over the next couple months? Regarding the cash management, we have the intention to pay the dividend on our preferred stock in cash, given that we have the liquidity, sufficient liquidity. We have the option to revert to paying kind if circumstances change. But our intention is to keep banking cash. I think even saving the 1% is significant.

48:12 Plus, I believe, as Arifid mentioned, if things develop the way we expect them, we hope them to develop and renew our vessels at higher rates, we would have the capacity to make significant reductions both in our preferred equity and our bank debt. Your other question was regarding the ATM and source activity. It looked like, you know, January, February, you sold stock at a little under $9, if my math is correct. And I was just wondering sort of how you, you know, look at that relative to your comments about you think the stock's undervalued.

48:58 Well, let me say... Let's close to what we believe an entire share value of our fleet is. That's not the sole condition, the sole consideration. It depends on other needs forecast, but generally we try not to dilute our shareholders, and that was our strategy and our objective all the past years, and we'll try to use fundraising in ways that increase the value of the share rather than decrease it. And then in the past couple calls, you've highlighted that, you know, certain vessels are less encumbered than others and you had a certain amount of availability.

49:43 Have you updated your current fleet for, you know, what potential you have as far as powering capacity? I mean, if you look very simply, if you look at slide 18, where we sort of put next to each other the market value of the vessels, Charter adjusted because, as Aristides mentioned, there are some of our charters below market now. And the bank debt, you can see we are, I think, even below 50, at or below 50%. I think we're at 45% leverage now. And, again, the market values might be even below 40%. So we have, I estimate that we have at least 20 million, even more, Thank you very much for participating in this call.

50:29 We'll talk again in three months' time. Thank you everyone for joining. You may now disconnect.