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EGLE Eagle Bulk Shipping

Participants
Gary Vogel CEO
Frank De Costanzo CFO
Jon Chappell Evercore
Fotis Giannakoulis Morgan Stanley
Magnus Fyhr Seaport Global
James Jang Maxim Group
Liam Burke B Riley FBR
Call transcript
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Operator

Greetings, and welcome to the Eagle Bulk Shipping Third Quarter 2018 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Gary Vogel, Chief Executive Officer of Eagle Bulk Shipping. begin. may you Sir,

Gary Vogel

slide good note third like To quarter I website. When access remarks and our available to at we’ve website supplement welcome relaunched Eagle today, www.eagleships.com. the to participants Bulk’s XXXX you encourage that morning. you, is to on will I’d there, everyone our presentation that Thank earnings Bulk call. Eagle

site. to append as are and for Company-specific note are inherently we all of general update include and We to These performance addition the our will updates, strive discussions statements forward-looking data, to subject as valuable future statements. Please today plan to industry uncertainties. to part feedback and of well our of guarantees your information information. not that risk stakeholders, welcome will as including In include we continue

You Please statements. our may and detailed our these and uncertainties risks financial should refer the our operating performance reliance Commission and to discussion for place not Securities on bearing on with more a direct a the Exchange filings forward-looking results, undue of have condition. our that

also will index. that the for to noting XX call. or we turn three Our measures. Securities and Please release Baltic more worth to to discussion measures, appendix non-GAAP certain that the reference financial throughout the reconciliation to slide our the and the information and It’s the the presentation financial measures agenda now comparable TCE. most Index, Exchange BSI, in non-GAAP presentation Commission filed refer concerning is today’s adjusted EBITDA, with today Please earnings GAAP includes for BSI Supramax basis a including also EBITDA financial for and

fundamentals. you up rate performance a brief an wrapping a review the update first our provide environment our on of scrubber industry review our financials; fleet the on then we followed provide a call you of brief before update We and quarter third initiative will with by will detailed with business with

We to equated conclude $XXX Please TCE or Baltic our now turn representing third will question-and-answer $XX,XXX the compared as quarter a net of the adjusted to day, Eagle’s session. five. BSI. the slide Index Supramax per presentation to with for beat

historically and As our essentially we of elected relative Atlantic, them backhaul for in the into voyages strong number and impacts XXXX. believe TCE somewhat, third on into well quarter ships fix of fourth on the QX to quarter a heading but market. This Atlantic we the during positioned, QX last repositioning our on strategy capitalize order it’s Company we call, indicated the quarter, performance the the to

per $XX,XXX way TCE As if TCE like-for-like We to able Ultramax them is operated would our acquired our rate. TCE of believe with we’ve to specifications third an a vessels Meaning, results to on to converting we is discussed approximately previously, for another those of only quarter equivalent investors and instructive, this modern our and results day. recently Ultramaxes fleet look similar be $XX,XXX to compare a to equate performance of at and it’s basis. by evaluate important

third the per period value TCE that marks in we’ve whole, a to period BSI. approximately as we’ve at creation. able report which quarter a been looking to of pleased XX-month the million equating last very seventh I’m When results, outperformance the generated the $XX.X $XXX to these With consecutive outperform day,

value to in previously, ability team’s differentiated able being model underscores and As deliver our I’ve on it. indicated consistency of the to business I outperformance believe the execute our

through This ability dramatically QX per active $X,XXX our EBITDA quarter, the to environment the and and and day period per rate On XXXX, management on model. cash the G&A unique have third to prior period in vessel both our margins flat higher the down side, year to generate the cost over Since added value non-cash Since OpEx certain XXX% due equated from million and vessel an and OpEx bulk increased totaled Eagle’s adjusted operating year. plus is G&A of the $XXX quarter for for line. $XX.X by by basis. spread the evidenced million first on hit when EBITDA TCE than approximately the up has widening more year-on-year. items dry XXXX, adjusted the between all-time the market trend annualized clearly increased low, third an quarter, EBITDA

actual of the slide days day per for averaging over of fixed quarter-to-date makeup. TCE a update Based available for this on fleet our our $XX,XXX October ahead, for six Please is FFA the day. per on and December, and curves $X,XXX the figure approximately to turn to an for XX% the Looking outperformance fourth BSI with for period. November quarter equates brief

fleet the slide, implement own development the to growth since fleet plan. renewal we of a On left we started hand strategic our depict and side

which During Eagle. XX quarter, Diamond XXXX-built XXXX-built and We we S&P transactions. the of two the Supramax on the has on the renamed, third Ultramax, been sale executed Thrush, in Hamburg the purchase a closed of SDARI-XX closed

than we’ve XX overall time modern more our a and ability months, and fleet a generate XX vessels, total age, newer, makeup past Supramaxes larger, more Each higher XX least older smaller, the we efficient efficient we less sell a divesting TCEs. oldest of of ship, acquire years upgrade which we to bought and of and vessel Ultramaxes. smallest, total or our our XX a of averaged XX Over efficient sold and acquired improve

has totals to the of couple our to ships, unchanged over currently important that past due renewal averaging age fleet Our the fleet note X.X years program. in implementation years fleet remained It’s our relatively XX age.

group the U.S. On the peer side of of right hand we side profiles. six, slide fleet depict listed

class uniquely the asset in large is ingredient in and efficiencies, Owning remains scale homogeneous fleet owns model fleets business operational it Eagle to performance. fleets. fleet vital world. largest who’ll I continue Subject over to strategy. versatile as the our operating and Frank, call Supramax/Ultramax to market to one our on simply like the turn the which of financial a note, exist our would provides renewal we and With across focused You’ll developments, don’t executing mix growth review intend that, now on

Frank De Costanzo

came Please the $XX.X for of net third Gary. our Company both to prior financial eight a a the $XX.X of was top-line decrease for core you, of that a XXXX the results. Thank of X% the reflects quarter. decrease at slide quarter, hire quarter for commissions summary turn This Revenue, third is million, primarily from Westport Revenue, year-on-year lower of in third the charter with and prior net higher X% the XX% Eagle hire best performance. and respect, TCE revenue by In due voyage was expenses, result net decrease both the part charter in evaluating a from voyage revenue quarter, increase same replacement. days increase in a combined available to driven hire platform-driven expenses an TCE and crankshaft was of of believe performance. We previously and than quarter our less in disclosed charter slightly million, of net BSI expenses, XXXX. both voyage quarter. The

Turning same quarter vessel from for increases to the voyage quarter versus quarter. the Total driven to income versus of decrease prior prior compared versus as prior $XX.X reported the decreased per of the quarter by expenses. in expenses. and lower quarter and amortization, in expenses. operating hire, and million The were the of million was QX QX third in by administrative X% quarter Operating XXXX expenses XXXX general decrease quarter. by third in voyage was and expenses charter part $X.X million, for a depreciation hire, decrease net offset $X.X The vessel charter and by The in expenses, in X%. driven Company lower

of quarter at $XX.X of of in $XX.X quarter Adjusted an up $X.XX approximately in or in as compared million improvement As million. of Basic came to million XXXX of the $X.XX in in the we significantly to QX loss XXXX, XXXX basic the prior bottom-line for from both the the third per versus share in earnings and third EBITDA compared $XX.X were same saw the quarter and quarter. diluted for XXXX. quarter $X.XX EPS a third

As of $X.X compared adjusted $XX.X walk appendix EBITDA XXX%. more measurements. the same XXXX, presentation, of quarter and to you Both adjusted net the In our EBITDA income by find are million has will to from million. of than non-GAAP a adjusted EBITDA EBITDA increased in

can in You on information appendix. find measurements also non-GAAP additional

$XX which million proceeds I terms, within balance of Shipco will from scrubbers. approved liquidity. installing is received the report to for sale bondholders subsidiary, Bulk LLC meeting to holders turn to was scrubbers of quorum entity. the to wholly-owned Let’s now to Eagle and Shipco at that a bond by vessels financing amend attending to a This from are overview vessel yesterday XX% cost at our Eagle up on the utilize the Bulk with allow an of slide approval the nine like would connection bond towards sheet us of present, amendment in terms which

of silo. as outside solutions and mentioned partially evaluating action, initiative scrubber our to this program, fleet the In fund addition to we bond the are have remainder previously, financing we of

unchanged Hamburg revolving the and prior Ultraco a to total Please million Ultraco the as abreast Eagle The facility is up $XX was of Norwegian that proceeds. on flow. debt sale $XX.X a Total was September $XXX.X keep along quarter. bank the cash of slide and acquisition QX the for accordion the million you The from cash We drawn down-payment the the XXXX cash $XX.X facilities $XXX the Company’s of million. generated have $XX.X the facility, in the and proceeds updates. $XX.X part Shipco second cash XX of million by total million. cash million end facility. is of Please as and Total feature bond, quarter. debt note Ultraco September made includes credit Shipping was Total stands of to which the cash XX, of sales the million CapEx bank from now approximately subsequent increase from vessel September at liquidity Eagle. operations the on XXXX, of LLC flow million with the totaling XX, will cash utilizing from restricted $XX.X by quarter, the spending. $XX $XX debt of an as of offset of The the and of turn debt million of comprised of million, XX, restricted the outstanding $XXX.X Thrush for review result Hamburg million is facility Company Thrush undrawn The any we from had increase

operating from million, $XX.X in third activities quarter, $X.X and QX provided During from cash QX at net from $X a million positive a million up came increase the XXXX.

fifth was result the consecutive quarter cash positive operations. from for third quarter The

numbers top trending The from chart ops cash from of significantly from also which and the million introduces the $XX demonstrated of which the cash operations, improved As from assets the QX capital operating shows, XXXX. a in liabilities, of the the to cash working bars, at as with positive the flow by driven between in gray operations the changes timing that and from bars are negative out cash blue essentially continues, operations capital. variability chart slide shows strip reported cash differences flow working

chart demonstrates volatility this capital by As out the over time. caused evens working

the ships million for cash scrubbers two will vessel driving our expenditures look cost close $X balance our operating covering totaling and Now, right, positive the the it we million, at slide, $XX the The the out the the the for To Thrush, two chart bars let’s operations. quarter. paid Hamburg the look quarter water in you bar the and the Eagle revenue $XX.X in number. are to of deposit bars QX large we net a comes ballast which X bar lays payments chart like QX received treatment at bottom changes along left, net both Company’s EBITDA million, covering results in themes moving find of clearly simple to the this systems. for and The of the on of is because three for adjusted at the the I drydocking for with a sale the in by large the the XXXX. million offset partially the

to $XXX year now day $X,XXX, prior driven than QX Let’s $XXX five expenditures, as largely the than $XXX the in XXXX lower day. of XXXX in and than cash results. three QX came decrease XXXX QX. lower was full our The per we breakeven ships at $XXX was versus in review QX $X,XXX, slide drydocked than Cash by OpEx $XXX per year QX this per lower lower full ship as breakeven compared and decrease per in in drydock vessel $XXX XX quarter for quarter breakeven. XXXX

came a in have believe conveyed up multi-quarter the stores QX to G&A average. given we that per from under in and expenses, day, appropriate to look at cash nature the it lumpy As payments past, both OpEx annual ship of is we $X,XXX at related per QX. $XX

in nine is noting $XXX marginally came that day, year expense when months have compared ship is cash number. XXXX, day were per in lower. It interest chartered QX if first higher to $X,XXX in our of XXXX than higher we to G&A per full G&A QX $XX would include days the the per For worth the per ship calculation, been cash QX.

of increases debt turn first nine prior higher will number. concludes the was portion than floating context as of interest QX year It along increase from my provide was $XXX review exposure of the elimination to full back of business call rate in year interest is interest the our his in with the the XXXX on second discussion that expense XX% versus lien XXXX This of is financials. a rates. noting the the meaningful I For in short-term The higher will of who primarily refinancing. result fixed the debt around of fixing note. a shields the LIBOR significantly worth PIK months now Gary, XXXX, Company The of fundamentals. of interest industry and non-cash part continue cash our of the

Gary Vogel

Frank. our Please regulations. and Thank with initiative like We XXXX to XX. you would announced slide scrubber on now fleet update to provide you, an IMO turn recently

X, an cap. date reaffirmed London Marine earlier limit. XXXX range a month XXXX Organization’s during met the overwhelmingly discussed the topics the of As MEPC implementation Committee International Environmental sulfur on January emissions X.X% or Committee call, the sulfur to Maritime wide including The Protection last in

state IMO One of the when surrounding sea has flag the significant control. out particularly at vessel is most regulation been sight of XXXX uncertainties port enforcement, a of and

a state installed ban to X.X formally March a meeting, effect. a force that sulfur vessel the level onboard fuel flag with the the enforcement experience have regulation, ships provide prohibit somewhat to vessel robust XXXX, high adopted violation, prove burn into and will comes from actually or The sulfur a an on sulfur later months controversial will ban high compared maintain after and/or playing a will fuel all a as mechanism having find A help sulfur detain without This that fuel. two field. U.S. X, flag XXXX the scrubbers to fuel or industry EBP limit the ship IMO groups IMO or submitted MEPC. will by states observe opportunity phase proposal non-compliant fitted carriage any During certain will non-scrubber delay to phase port high building the was rejected implementation and by by carriage the carrying this and Under endorsed on-board. administration has only and prove enter

indicates and at implementation MEPC cap. early our phase XX The scope open MEPC Eagle conciliatory enforcement on new not to global view May door to that been underway. next and MEPC slide collection a The what scrubbers be September, initiative data Please the any the schedule. for a in gesture, well turn next is only. has the on the of will remain announcement XX directly now of able impact order fuel sulfur at to seen scope leave targeted consider we on Eagle fuel on specifically availability initiative. have scrubber As as meeting to the experience Since building the didn’t scrubber with limitation but quality for meeting proposals XXXX, in limited proposals

additional of first for next the XX month delivery our options year. half delivering throughout take still the to hold remainder expect with We scrubbers. next We of within the first scrubber an

million of the during on between widest of is if on installation. future fuel be all to $XXX spread Having regulations. in spreads, are IMO that of means fuel are sale likely or owners announcements one-third more calculate is illustrate scrubber the would as average were deliveries. well-known tower to near install to mean prior date. these installed $XX first significant likely months and than of With Xst required implementation critically To scrubbers instead for believe to lead difference XXXX the alloy Ultimately, in to this, scrubber price the metal of months, are having uptake ensure the X, rapidly implementation the important ships wishing growing to forgoing half first now of the XXXX essentially exercise over form scrubber significant for in scrubbers manufacturers we July approximately reliable that expect enforcement bottlenecks also by has scrubber January January scrubber well-built timely following XX fuel particularly three this past XXXX order all as specialized beginning cash the the class scrubber required the Eagle view for our the the most a the our we Given flow components, experienced and and investment. booked for options XXXX as well then price for to incremental There to approval [ph] other various ready XXXX, we ship initiative also spread to services. manufacture new times

believe sufficiently we and XXXX. take firm our advantage spreads that mover occurring ahead the the of a scrubbers in installation Eagle such, advantage fuel in and options, projected is time As widest both of curve to of orders there’s our for with first

scrubbers of depicted bottom slide, DNB. right the current book class, the by the hand by as corner assessed for On we’ve asset order

a Looking approximately is at dry fitted whole, fleet to expected X% scrubbers XXXX. with of be bulk the as by

with subsegment ordered XX% most the for note, this being scrubbers of to-date approximately As Capesize of you’ll are fitted.

the to X% is fleet by projected geared segment, of the Supramax/Ultramax midsize be XXXX. fitted Within only

the due optimal for to freight will set we fitted view opted of segment representing position the larger about XX be have low to why every non-scrubber owners the many will XXX retrofit fleet, we pricing ships. this within by as as penetration understand Supramax/Ultramax our Although ensure vessels,

we slowdown uptake In fleet be lack fuel. addition, geared lowering mid-sized environments. thereby in this will burning XX. On net will the ultimately This that of and various given returns the almost illustrate fuel to the of Please a spread basis better scrubber low the fleet slide, believe entire the higher of sulfur expensive investment benefits fleet potential to Supra/Ultra slide would to utilization lead supply lead to attempted leading rates. turn to and effect to we’ve the more

share flow environment. incremental per or XX $XX all of day. metric exercise we roughly TCE can ton million spread Assuming per we we fuel $X,XXX almost estimate incremental $X.XX of This implies an generate cash approximately $XXX options, of per basis

As work off-hire. a part the are you’ll cash a find the installations. at sea table system for timing good with retrofitting trading expected outlays in the drydocks while minimize reminder, scrubber depicting in In appendix, the statutory to addition detailed of treatment are water scrubber our while ballast order vessels be a will ships performed riding retrofits, operating crews, and CapEx and

per a while which day, average Pacific quarter early in The fell slide BSI per installation up for program, was pickup again to hybrid As related same posted quarter, in by for the September. range-bound, average plus day gross to fundamentals. day a over we’re X% vessels. X% $XX,XXX result the Please the approximately some gain remain the turn an third increase work the in industry rates August of index XX driven gained for in BSI review uneventful projecting scrubber period market per period. in XX% X% the just and quarter, XX by rates time of spot off-hire the further second a Atlantic to averaged of year-on-year. repositioning and August. of time our saw ship actually $XX,XXX install $XX,XXX X% a The XX% The to started per which market, over dock, the days prior traction to third After at

Atlantic tends hemisphere As northern you’ll the note to gets full Pacific chart, harvest note the to from season market We year and strong cargos this grain QX outperform the to in It’s market Sea of believe Brazilian is this though significantly outperform the due the interesting during Black market increased that soybeans. the as to continued earlier. Atlantic Pacific coming much of out exports swing. started

imports. XX% through is rates trading at Pacific day weakness $XX,XXX on QX, October two time the Since averaging per first sense the the and XXth. These index, a at reaching which coal middle are ports Chinese has few by BSI quotas October, peaking the XXs. of due move customs the being. now imports in Looking times are in Pacific month, Chinese half continued higher disruptions grant in There’s certain including encourage are the in Chinese mid-Xs, off Chinese domestic purchase approvals. the reasons their to to disruptions approximately of trying put to due to on last authorities on then, pressure a back the that the to for import actions lengthen

As index. the the in in a trade in XX%, down spread this widened we’ve discussed stilled Pacific market weakness rates regional premium important X% now has given unexpected Pacific which in large the cause before, changes firm, since mid-October. can and very is remains Atlantic approximately over coal swings not has but The seasonal is with commodity almost Pacific dynamics. slightly The any Atlantic

between delta cargo new buildings Due on overhang reasons cash the Pacific ship a by is generally the [indiscernible] market all to fluctuates, structural rates, that Asia. outlay fact the the the Pacific at from as to a or repositioning impact historically, ships of to investment requires owner. the the fronthaul get general This an Atlantic business, in and delivered and number well premium. the While selling trades Atlantic as voyages a due the with into a imbalance the of including phenomenon basins

for tons early into I decision of into on a Atlantic basis quarter, XX% the quarter-on-quarter quarter approximately slide vessel representing to of XX to the brief XX% stand count. Demolition Please building outbound XX% XX day. a roughly approximately new $XX,XXX of per beyond for million a where rates well on deadweight our bulk these mentioned prior ships performance the as over TCE as during back affected just deadweight the during of totaled count. supply X averaged [ph] and decrease third quarter at the a XXX,XXX year-on-year call, to vessel position reposition over our currently heading $X,XXX tons and amounted or the update As fundamentals. quarter ships basis in vessels older per X net vessels, significant day, gain but or fourth the turn year-on-year deliveries Dry XX% tonnage representing quarter decrease and X

at that months to vessel demolition hovering September high. is X the just Looking It’s last per and around XX rate this ending totaled note or ton, tons, million environment approximately vessels basis elevated close XX low interesting scrap prices XXth, down the XX% $XXX to count lightweight scrapping deadweight. occurring three-year in an with

further indicated As rate rates in the we’ve in as previously, and the decreasing we improvement reflects of simply believe well. ongoing developments forward trend expectation spot scrapping positive

Given year-to-date year in million figures, the scrapping X on-the-water now tons, lower around fleet. equating at to for is below just to forecasted X% the of demolition deadweight come

in As a coming sulfur both as as we’ve indicated mandated Jan water some previously, ballast we for in act the force regulation XXXX as reduction emissions well increased the catalyst into believe that treatment of will scrapping. implementation

As less X.X% order. down look than originally of expected up net newbuilding blue to depicted revised to to for to the dark as fleet line, on-the-water on you’ll segment, looks XX by overall note ‘XX. when Please is be These for the line been the with bulk at figures of this turn where coming the expected drilling X.X% expected. dotted the net favorable have just blue growth in a slightly fleet Supramax/Ultramax dotted slide even low more scrapping dry is fleet. And graph, the from in growth lighter due growth

increase XX X% a third the almost prior growth, supply totaled up forward amounted which in pickup all primarily half X.X the orders placed. X.X or in newbuilding by about to driven of million terms orders tons tons In over ships approximately of This quarter, quarter. orders or million deadweight Capesize was

almost just the segment, a of period, quarter-on-quarter. XX Looking in the ordered vessels XX% were only Supramax/Ultramax decrease at

XX% of projecting between to full contracting a the deadweight over to with year bulk XXXX. million tons, For million XX XXXX, decrease XX as total of compared we’re dry anywhere

X.X% million X.X We’re Supramax/Ultramax which total decrease all percentage expect and and we similar deadweight estimating representing of approximately a between on-the-water the X% for placed fleet. X to just tons, orders orders, of

of on-the-water previously, ordering, levels. a given stands the XX% close see will see a fleet. fleet just at we’ve indicated increase in order highest X% of while book stands unless percent number increase we has cautiously that also material to book segment hand current on-the-water over optimistic Capesize values XX-year low As deadweight and not the the second both segment we its basis around factors, at significantly The The we tons. remain rates Supramax/Ultramax the order as at from of a XX%,

number stronger tensions Downside risks a with Global growth XXXX, X.X% at remain weakness remain higher revised coming now to Looking IMF since points ahead, of and of low yields and Turkey. older supply regulations of both escalation impact and due believe tariffs. factors the have by U.S. vessels summary book Global concern Brazil global viable due number effect. a to down for since into favorable, views we becoming the side in been commercially an increasing remain U.S. to July. order have Please down not to the including XX turn our last for and fundamentals oil over expectations Argentina, growth given forecasted but on economies quarter. and due demand. firm are XXXX From the Chinese trade perspective, growth certain basis macro spat a ongoing dollar, which changed less including U.S. GDP to prices, XX is slightly and slide higher trade developing

to to to perspective, real there previously, is year. bulk calculated fundamental impact growth and XXXX, slightly down growth dry increase million it to unlikely, demand bulk been an from be representing dry trade global X.X% As inextricably bulk up in the while for to we’ve for linked. which incremental too any about have be scale we overall remains of demand indicated the will been has a bottom trade Dry tons as XXX revised metric believe actions to not full order is seen date whether GDP impactful

into when demand in XXXX taking mile X.X%. growth consideration However, should at expansion, about forecasted come expected ton

real million are Coal, growth tons. Within Eagle’s carry about X.XX XX% are for increase by grow is which cargos demand grains iron ore, expected million about bulks around total of by coal X.X%. tons expected quarter, this to metric cargos XX% the major of to almost to represented are to of the we represented during the XX during year. which almost XXX which the quarter and comprised Grains, X.X% billion year tons expected the

Supramax/Ultramax, Operator? to creates percentage the table for the growth questions like lagged lowest operator order Supramax/Ultramax expected book driven any hand bulk the XX dry on that of by Eagle, and may call makeup. demand bulks, in I period. pie to in major This answer forest In fleet right have. by of that’s voyages. were having which for the favorable outpacing third demand, total bulk metric XX% the which demand is denoted roughly minor improvement a particularly in million a a our or X,XXX comprised carried towards almost trade as being now the tons as As such dry This grow Eagle the summary, products quarter to you the bulks, existing last minor bottom the X% the the corner, picture, given as chart we side the on scrap, bulks minor of a year, left overall the would hand XXXX, during worthy represents of and and incremental growth bulks. no is fleet It’s bauxite. the of dynamic cargos cement, combined roughly trade, slide, with believe depicted approximately are turn favored in over

Operator

first Our Jon from Instructions] Chappell Evercore. comes with [Operator question

now is open. Your line

Jon Chappell

Gary. morning, Thank you. Good

hopefully three pretty ones Just you. quick for

first fall incredibly the be we loaded would Should of for It schedule. on the of frontend the most of exercised about with scrubber the well, they’re same year for most XX. payment second? in the first type seems schedule CapEx as to likely half next options So, first pretty as thinking once the CapEx meaning those the opposed

Gary Vogel

Yes.

been significant portion scrubber of we’re work riding and onboard. the it’s we’ll when terms onboard frontend -- intensive And definitely putting is and clearly, procuring of a appropriate. loaded know, you think, building there’s in labor, time I specific that’s ship it. as the of then, doing guidance more But, in more material, sense provide is crews

definitely loaded. the optional skew will back towards of more that, Having is the it said frontend year. vessels half So, the

not QX an you to going XXXX. overlay be But, completed see definitely what ships here. will it’s be in of tend those So, of QX to and

Jon Chappell

the Second is opportunity kind a strategy and bit in vessels. of kind of a function it there that I Was know quarter-to-quarter from but rates seasonally is to advantage or just year-over-year noticeable, quarter your in were it take charter you for Is is that vary mid quarter-to-quarter, just decline to was the little chartering of high of very it the third there? volatility? this going

Gary Vogel

it’s really is It -- as Yes. opportunity based, said before. I

QX, down days but distinct XX. Having volume driven. slightly, we vessels QX that, said chartered not we were last We’re XX quarter had was in;

were fair those doing of be tended amount we still term. operating; So, a to shorter

period short ships We now the quarter. we’ve during have a taken couple on

the execute, really, there’s no in it But, is volume. benefit again. we’ll up we at because tick number when think sense, risk-adjusted us that see would that we on see look any in again, you’ll to opportunity way regard of I think basis a makes terms an I So,

So, I around just see volatility you’ll that. think

Jon Chappell

lot I stronger. seasonally But, dry your investors of given the rates been overall which the am well by industry of your bulk fourth quarter, disconnect to an Finally, capacity are Atlantic point in in Pacific. move as Obviously, as a to question. a think just walked this the should really the in too Basin demand growth have side probably your lot bit has the through think of paid slides. tonnage at obviously, up kind set certainly of is And I shift well surprised you the little I a strategy off and in directional

Peter mentioned You demand Paul to in third notwithstanding, quarter the now China. real that little from a pay and taking it’s there quarter, But, quarter? true the think I third made the Tariffs thought fourth sentiment. coal kind robbing mid with the from but that’s than away bit more a issue But, better of we issues demand broader maybe associated issue side? is

Gary Vogel

Yes. mean, part landscape live volatility of the I think, in. I simply is we

year. have spigot. then, quotas coal reached where demand we off what now turning China so we’re the third in was high quarter So, and -- probably seeing And extremely now this

QX. that of at of this ore example nickel to perfect a season where because the that Philippines in that’s same QX time in shipments happens in So, be benefited the also dramatically we for And it’s and weaker in now instance rain dropped Indonesia. the and

about Australia So, wheat a where third production coal time drought same off. is down coming we’re Asia about this had that happens seeing a to at the And year. be happening -- as then,

go back we the are back. when fact benefits it pull factors so they there’s that those the one that happens the also So, and that’s of we -- that dry would would that pull positive. and to that and year. I all it’s landscape, overlaying, bulk from see many as thing demand but overall really at same do bulk things into As is and year think spoke almost the it’s look next I grow this X% minor I is expected what just Right? -- to

we -- So, taking that, volatility course, Having around. QX we to value to market. trade see around said this capture stronger to opportunity an ships a volatility and trade of as like the

So, prefer part for just QX it course, we of see rate normal course. -- a as as we’d it’s our good I but higher said notwithstanding, of a model,

Operator

Thank Giannakoulis you. question Morgan next Stanley. And Fotis from our with comes

Your line now open. is

Fotis Giannakoulis

availability confident high especially about and you a there a scrubbers. the XXXX? morning trading. of the be to the an give overview routes your is that is to quality confusion going of fuel thank Can with smaller availability the and seems that you I Gary, fuel, vessels sulfur are And It trade? Good want Yes. ports us minor at of lot that ask fuel how you. about questions after the commodities of few there of

Gary Vogel

I’m thank global trade page, First over globally of going the say the bulks, cargos that you -- major move you -- the all the for shows I the And highlighted cargos, carry. towards to mouse not it if we down various where of map. all, your website there’s when significant you and all question, cursor of major that routes industry but because dynamically, the the they’ll actually all major, get scroll bottom, you I you to a point if our new you on

a take thank hopefully, take and And But, all everyone So, long is will me website. for now. would worth because there to too look unique I looking them go that, page new and it at. Eagle’s think at you do for that that

our we about of mean, confident circa come of majors quality the given now increased heavy initiative ago. few that affirmed have that’s months and fuel, because when we have fuel We they’ll And X,XXX And were ships. two in significant think there’s In been scrubber and fuel I already uptake where expect now are conflating fuel I fuel and scrubbers things people that, -- terms some of available. around availability. declared only a out

not be we and spread we ships competitive haul by be trades, forward, our will do focus So, issue ports. environment, fuel how ports. we an trading on in small this mind. going all long pattern But, our bunkering what we won’t a We wide that’s therefore our was where fuel amend believe go major said, with that comfortable really got available is and in of heavy the that, part can and more in will

at need $XXX of going As Singapore, And fuel Japan, the $XXX an cargo that’s price China, then, example, the like to major $XX a spread worth to pass places carry that’s cut bunker Gulf the to pass a down in fuel if ton, or we out Gulf is U.S. of and paying. at paid to let’s to to $XX, say; that. port, and freight U.S. order out out some is get if

our we’ll of it’s but don’t calculus we’re think if have we that with. even the we cargo amend significantly, So, did, to part very comfortable

Fotis Giannakoulis

tell ages can to what consumption install vessels today’s planning you are us subscribers? fuel ships -- And And Gary. rate. which of type the which you, you Thank is of at

You Supramaxes, segment, on to Japanese. some sense, have At Chinese, it us makes Ultramaxes, guidance and just which more assumptions? the give fuel

Gary Vogel

mean, have more other --high the combination that I considerations consumption in large is it. Sure. said with that, go the most there’s a potent. that into ships that Having general, lift,

we’re first. XX have we CROWN-XX. can install example, scrubbers vessels sister going an vessels you those on I As to tell

or you whether the to costs, engineering almost it’s get you do XX X ship same. shifts, If the

installing benefit terms, sister say XX specific. broad of for So, without tons getting a day there’s blend, would In a to Supra/Ultra use a scrubbers as a too across significant cost vessels. we

vessels, do it. renewal. our fleet of But, continue scrubbers we’ll to the vessels, from on know, benefit and as oldest We’re not sold as not of part you installing wouldn’t that smaller we’ve older, so they XX our

on focusing larger the we’re and vessels So, at ones sister the that.

Fotis Giannakoulis

for -- either provide you longer? charters understand or to regards in period -- this one the for Have that pickup or the segments I other seen would chartering becoming scrubbers exchange without to willing the that you consider? activity, Is And, chartering in in contracts, chartering for activity in installation. even contracts something activity are period a any scrubber year

Gary Vogel

discussions even frankly potentially chartering vessel Yes. scrubber. I a we’ve out about and definitely mean, to had inquiry there’s had we’ve -- some

the of it’s not markets, to our We have to small we there, done fleet, on But, be be general, in spread. percentage markets done so. but tended do wanted haven’t as averse we if a long out haven’t In wouldn’t But, period so. yet. so locking fuel that we

it where expect supply-demand, and view positive our then of the We’re XXXX on we slowdown them inevitable prices overlaying fleet think on and to we the if market; constructive that is we’re top on are be. on fuel

So, simply decided market not out a is we’ve to. there. there But,

significant it’s fuel scrubber may vessels -- the to payback on So, we spread wholesale significant fleet. I if our lock that. won’t we in we unlikely few a a of be is think entertain reletting would an portion be But and of there or opportunity

Fotis Giannakoulis

see market? seen a you a any lot in commodities? about the Guinea Gary. can XQ, anything Is to previous that you, There Thank a quarter, can trade. bulk real is bauxite transported question this from the bit significant that from of for about a there -- I that any dry in conclusion volumes is -- last you flows overall more pickup Have ore in we discussion than the any One changes the in pattern? little volumes draw China. your driver trading iron we

Gary Vogel

I’ll it’s and it talk our amount Kamsarmax Ultramaxes in -- to wasn’t some about carried vessels. we by of primarily is for the by Sea. us takes particular. in show our point Bauxite bulk, Black tonnage, a growth, terms it up Panamax that compete significant it Africa, as minor X%, the bauxite, a decks of dominated on And that. We today’s that of but on Panamax, West which in and investor benefit it’s but page. with small it’s you it’s But, again, about Panamaxes back for a our Thanks website we that growth is Yes. page, do we industry

So, compete takes and is that not it tonnage the with. we that definitely positive pool draw doing a directly directly, a lot it from we’re a bauxite while of

Operator

comes Thank Magnus you. next question from Fyhr And our Global. with Seaport

is line now open. Your

Magnus Fyhr

guys. morning, Good

in Just could of changes renewal thought a kind silver question the softness asset that rates in guess, between your strategy bit at here -- with you’ve on there. values? last the changed recent over here Has be I market. little mean, you’ve acquiring vessels what’s been the fleet and months. the values. your XX Have divergence somewhat your the of weakness lining the seen a I with all asset

Gary Vogel

Thanks, Magnus.

we’ve in think focused good important they’re that, of and spend, are just good a upside the values, we of amendment of been Hamburg bond installation completely delivery ago. mutually approval And capital that. there’s XX day and with we Eagle value, yesterday that few said took that’s that paying we significant up I the terms ship that on scrubbers interested. the scrubber the but a with for changed our haven’t think weeks We view Having that financing, exclusive, not for was to in still

going inspect think continue seems there’s less we moment, and there on. good said, I as we to transactions -- So, At upside. definitely to be the And vessels. look there’s

a I cash and of only course, And buyers relaxed, think, then, ships and are sell away, fairly think the generating on on is owners move coming I XXXX for supply is year up. side, are waiting a flow. given low

So, to acquire of I quarter. a at that, gotten the we’ll probably of in the financing out we we on that last the then we’ve bit more look to moment, scrubber And like the now vessels. continue said, way, focus did some

Magnus Fyhr

to buying stock down a pretty is on XX% discount stock at buying trading back Your versus about since June thoughts NAV. steel? Any there significant and

Gary Vogel

that from determination. vessel there’s opining that price. Board upside to the that, think in look at level, And discuss I’ll something that no We mean, there’s continue for but the do the it internally. internally on communicate report it’s said moment, a fact we’ll time. do the at values, at But obviously that. news except significant we the to on to decides, made buyback, I discuss share we Yes. away haven’t we and share Having if Company stay

Magnus Fyhr

mean, thoughts from forward, one if And question. fuel the about using own market. in paper stay you Any in will that on the you’ve I that? chartering just your locking in last active spreads strategy, been spread out going spreads pretty blows or

Gary Vogel

product the and looking at moment, been evaluating. out definitely We’ve there. X.X no there’s At it Yes.

that. risk margin to need basis also there’s create around one cash, around of in and costs, can, that. risk things like you you considerations requirements, basis but a There’s number So,

mentioned hedge. very comfortable doing looking I actually we to the be proactively. that to before it moment, the and using an with again, get things we’re product So, because would we sure effective we’re And comfortable risk quite it’s at we hedge derivatives done -- need the at But haven’t so, so. is to that hedging are that need

Operator

James our question comes And next from Jang Maxim with Group.

open. now is line Your

James Jang

my So, answered. questions most of have been

side. macro the Just on

look for U.S. cargos wheat wheat weak -- seems enough guess into XXXX? you done on Baltic it Do I a So, planting and forecast are lower substitution wheat in harvest harvest moving foresee winter and

Gary Vogel

Yes.

lowered I very been significant even wheat very It’s plantings to has exports its market particular, general. in year Russian think, supplanted wheat or still by year moving this I significant this at summer, in definitely U.S. the time. mean, this

So, obviously, vessels cargo up us, pick for our will anywhere.

Egypt long is last the haul is become And wheat the see moving. now importer, volume So, year. we Indonesia still wheat a significant passing largest has where trade

a that know Russian market and growing you of important from definitely where But, much -- comes participate it where not mile. it’s we is is so ton in. in wheat terms So, one

James Jang

make one up. the And fleet one final on

those XX a vessels, comfortable operating without you vessels the eight of if replacement about there’s So, sold? years fleet, be smaller and they’re added Would older.

Gary Vogel

answer is simple the yes. think, I

Having sold size per came We’re perfect And effect is that, ship left. fleet we’ve able we’ve vessels and one XX. strategy fleet been where said XX where not acquired a one renewal example and in managing quarter se. to last

those having words. I’m are believer, the derivatives we’d at in So, monetize that, some came feel able we fleet actions I own being risk ability our an we Also as would then comfortable where being an big as said well. that opportunity forward speak look instructive value, through supplement along dropping operator, par that, what and Charter the to think down. we means. louder other through of a size said hedge to and assets than active Having at above owner that going have And as if is fleet

is that So, comfortable answer us unless with something changes foresee I yes, the significantly. it. doing we’re But wouldn’t

Operator

Burke FBR. Thank you. And Liam B our from next question with Riley comes

Your line is now open.

Liam Burke

see rolling Thank routes you. your iron or is focus Good trade looking morning, long-term how there’s the a grade China, increased that in fourth Gary. there higher the Gary, out? quarter the for Is any or in either affecting we’re at you ore. market particular been that change

Gary Vogel

is we very -- a small trade. ore Yes. and probably really are our iron only given that of Ultramax, part mean, Supramax the we’re I

least one And the the so, of affected. I’m is probably, all peer that group,

on as significant Capesize my seems Brazil. also color defer give terms, no continues trade why robust. to on general come in And reason But, segment in to supply you in will substitution a change, I be the colleagues So, that that to that. see better to I’d

Operator

call I’d and Gary call. concludes over to for our like turn Ladies Vogel any today’s for now you. question-and-answer back gentlemen, Thank session remarks. that the closing

Gary Vogel

operator. have further. you, I nothing Thank

everyone like to today day. a good for us wish So, I’d and joining thank everyone

Operator

participating wonderful disconnect. and conclude Ladies a you day. may conference. you Everyone gentlemen, today’s in and does thank This program for all today’s have