Great Eastern Shipping Company Ltd

NSE:GESHIP

Earnings Call Transcript 2024-Q1

[Operator]

Good evening, ladies and gentlemen. Thank you for standing by. Welcome to GE Shipping Earnings Call on declaration of its financial results for the quarter ended June 30, 2023.

[Operator Instructions]

I now hand over the conference to Mr. G. Shivakumar, Chief Financial Officer at The Great Eastern Shipping Company Limited to start the proceedings. Over to you, sir.

[G. Shivakumar, executive]

Thank you. Good afternoon, everyone. Thank you for joining us for this quarterly conference call to discuss our Q1 FY'24 results. I'll now take you through a quick presentation on the results and what's been happening in the market.

First, standard disclaimers apply. The highlights are that we once again had a very profitable quarter, and most of the profit came from the shipping business. NAV moved up in line with the profits, there was not much change overall in the fleet value in shipping. Tankers went up a little bit. Bulkers came down a little bit. Crude tankers went up a little bit and so did gas carriers, bulkers and product tankers came down a little bit.

So overall, the fleet value stayed the same. So the NAV went up to the extent of the earnings less the dividend that we paid up. We've declared an interim dividend of INR 12.90 per share, which includes INR 7.5 per share to commemorate the 7th anniversary of the company, which falls today. I won't go through the P&L you would have gone through the P&L, I'm sure. So I won't take you through the P&L in detail.

And we held normalized financials as well, and you would be familiar with the difference between the normalized financials and the reported financials and the adjustments that we do to arrive at the normalized financials. On the net asset value, one thing to note is the net asset value I mentioned. So on -- between March and June is up a little over INR 30 per share, again, reflecting the earnings, which have come in that first time alone.

And for consolidated as well, it's up by about INR 40 per share. And at consolidated at the midpoint, we are at about INR 1,200 per share. Now we'll go through the key ratios. These are the earnings, et cetera. Let's see what's happened to the markets, and these were the TCYs. So we saw from the very high levels of Q4, we've come off a little bit for the tankers.

The LPG carriers, of course, continue to be on time charter, and dry bulk were at pretty weak levels in Q4 FY'23. They've gone up from there. Versus a year ago, the story is very different. Dry bulk was quite strong last year. And last year, you would remember that in Q1, all the sectors were doing very well. You can see the averages across all the sectors of between 25,000 and 29,000 tonnes.

Dry bulk was much weaker this year versus previous year. And crude tankers, especially, were much stronger and of course product tankers also have been strong. And they sort of canceled each other out in the P&L when you look at it on a Q1 versus Q1 basis. So this is how our stand-alone NAV moved over the last 1 year. So we went up by about INR 260 per share, of which INR 200 per share is contributed by cash profits.

INR 88 is contributed by fleet value. And this question comes up often that what happens if your fleet value drops? Yes, the NAV might drop -- will drop if the fleet value drops. But remember that there is cash coming in all the time, which helps to improve the NAV. So it's not just a paper improvement in the net asset value. And of course, last year, we paid out INR 28.80 in dividends over the last 12 months. So that's also reduced.

And this is the movement last 5 years. This is from March 2018. So from INR 360 per share to just under INR 1,000 per share. This is standalone of course. On a consolidated basis, the story is sort of similar, except that in -- on the offshore side, there is a more significant contribution coming in from the change in the market value of the offshore assets because that market is picking up.

We have seen repricing of assets and contracts and assets, which has resulted in significant increases in the market value offshore rigs and vessels. Looking at what's happened to the shipping market. And again, this is -- we've seen that in April to June, we had lower levels than we had in Jan and March for Suezmax earnings.

We also had further take down in July. Last time, we had mentioned that typically, the summer months tend to be a little weaker for the tanker sector that is both product tankers and crude tankers. And that's what panned out. However, even at these levels, their ships are at very profitable levels. For instance, at $40,000 a day, which is the Suezmax average for July.

It is still an extremely profitable level. And more than $20,000 a day, which you can see for the MR, it is still a very profitable level. And again, you will find these even within strong cycles, you will find individual months, quarters where earnings are not very -- not as high as it used to be, but these are normal seasonal things and these are ups and downs to the site.

And the market is pretty volatile. So we've seen pricing ranging from $10,000 a day for voyages to $14,000 for voyages for [indiscernible], for instance. So what led to the -- to this slight weakness? So it's again, relative compared to what we had seen earlier in the year. We had OPEC plus crude production cuts, and we had refinery maintenance, which normally happens during Q1 and Q2 of the financial year.

So overall, the trade grew, but that growth slowed down a little bit. And therefore, the levels were slightly lower as -- earnings levels were slightly lower as compared to the previous quarter. Trade disruptions led by the European conflict, continue to boost tanker tonne miles. And we've seen crude and product supply rose at 3.5% and 2.5% year-on-year.

Asset prices remain firm. They are at the strongest since 2008. Order book is building up a little bit. Now this is building up to 3% and I think 9.5%. So we are seeing orders coming in for crude and product tankers, but still at pretty low levels. Looking at dry bulk. Dry bulk, obviously, has been significantly weaker than the same quarter of last year, as I mentioned earlier. But it's been for at least for Capesizes slightly better than it was in Jan and Feb.

So you see in Feb that we were down to around OpEx are slightly lower than that in the orange line in February of '23. But it's recovered from there, but still nowhere close to the levels that we saw last year. And for the smaller-sized vessels, like the Supramax, for instance, which you see on the right, rates are much weaker than they were last year. Now what's led to this?

We've seen increased tonne-mile demand. We have seen Chinese coal imports increasing by 90%. That's for the quarter over the same quarter in the previous year. Basically because hydropower generation has been poor. They're having a El Nino life conditions, so less water means less hydropower generation and which have been substituted by coal, which has been imported.

So Chinese iron ore imports, coal imports have been -- were quite good at the end of -- in last quarter though their iron ore seems to be coming off after the -- at the end of the quarter. The -- last year, one of the things we boosted the dry bulk market was the COVID-related congestion, which absorbed 3% to 4% extra of the dry bulk feed.

Now that has been completely reversed and that's added to the effective tonnage in the market, and that's led to some weak -- that's also contributed to the weakness. The negative is that the grain exports from Ukraine don't seem to be happening because the deal with Russia seems to have fallen through. And therefore, that grain is lost from the market, which is less cargo for the market.

Order book here continues to be close to all-time lows. There are orders going in all the time for dry bulk also. However, still the order book has not built up to any significant level. I must mention you can -- if you're going to order a tanker today, you'll probably have to go to end of -- middle to end of '26 at the larger yards. In dry bulk, it will also be some time in 2026.

You will have to be very lucky to get a slot before 2026 for building a new bulk area. LPG, the markets continue to be strong. Our ships are on time charter, but the spot earnings continue to be strong and much higher year-on-year. This is, again, resulting from very strong exports from the U.S. and drought in the Panama Canal, which has led to water levels falling, and which means that there is more congestion at the Panama Canal, which also then leads to ships taking the long way around, which is we've written COGH there. That is the Cape of good hope.

So they do come a long way down, which means that you need more ships. And all of you would understand that's more tonne miles, which is good for the business because it makes the market tighter. The order book is still elevated in a historical context. So we are in excess of 20% order book for the gas carriers. So this is where we are in the order book currently for the different sectors. I've already mentioned it earlier.

So what's happening to asset prices. Crude tankers seem to show that there has been a small drop off in prices. This is very marginal. They are at very elevated levels, and these are based on assessments of the market. So prices are still very, very fine. And you could have 1 million here and there on the margin, depending on the specific condition of that ship, but prices are extremely high. And you can make out because what was 100 to 110 year ago, 1.5 years ago, is now at about 160 for crude carriers and 140 to 150 for product tankers.

Dry bulks have come off by about 10% to 15% over the last 3 months. We are still above the levels that we saw in January -- above -- at or above the levels we saw in January. In LPG prices continue to rise, these are the, I think, the highest prices that we have ever seen for LPG ships. So those prices continue to rise because the markets have been so very strong. Scrapping has been nonexistent because the market has been so strong. There's no reason for anybody to scrap a crude or product tanker in this market. Even dry bulk has seen very minimal ramping.

Looking at the offshore business, the fleet supply -- there's no change really in the fleet supply. So there are a lot of rigs and vessels which are over age and they continue to be there, and we've had some cold stacked vessels and rigs as well. There hasn't been any new excitement in the market. There has been no higher pricing.

It's about a sideways market marginally higher in rates maybe, but we haven't seen any recent pricing in our -- in the local market. There is a gradual increase in utilization, but not a huge amount. So as I said, this is -- market is at firm levels. The rates are good, but there's been no further tightening since in the last 3 to 6 months.

We have repricings coming up. We have 5 vessels, which need to be repriced in the course of the next couple of months. And then we have four further vessels, which need to be repriced. In the rigs, we need one rig repriced in the first half of next FY, and we have one rig need to be repriced in the second half of FY'25.

Just a summary. We -- the strong cash flows have basically led to our -- we had $360 million of net debt at peak in less than 5 years ago, which is now net cash of $200-plus million. This is standalone. And this is what the business does in good years. It enables you -- it produces such strong cash flow.

And remember, this is after paying out a lot of dividends over the last couple of years. Share price to consolidated net asset value, we have -- the consolidated NAV is about INR 1,200 per share at the midpoint of the NAV. So we trade at about 33% discount to the consolidated net asset value. And again, these are our CSR partners.

That brings me to the end of the presentation. We are very happy to take questions.

[Operator]

[Operator Instructions]

We have a first question from Abhishek Nigam from B&K Securities.

[Abhishek Nigam, analyst]

So my first question is that if I look at shipping revenue as this quarter, I think they are down about 4% Q-on-Q. So just if you could give us some clarity on what happened there and what should we expect for the second quarter?

[G. Shivakumar, executive]

Yes. So the revenue days is a function of the ships that we sold. And basically, we sold 2 ships last year. We sold one crude tanker Aframax the Jag Lyall, and we sold one on MGC the Jag Vijaya. And so the capacity itself has dropped off to that extent.

[Abhishek Nigam, analyst]

Okay, okay. Fair enough. That's useful. And crude and product carrier derates now will be, at this point of time, like, say, end of July and early August, where will they be versus what you booked in the first quarter and also for dry bulk?

[G. Shivakumar, executive]

So spot markets come with -- you'll have to take this with a lot of caveats. And this may be the market as of yesterday, and it is not what the market might be that we would be earning. This is what the spot market has [indiscernible], okay? And what the spot market was yesterday. It is not necessarily what it is going to be tomorrow morning, and it all depends on when you're going to fix your ship. The crude tanker markets continue to be strong, at least for the Suezmaxes. The Aframaxes, currently, are a little weaker than they were in the first quarter. However, as I said, these things turn very quickly. The market you can see is quite tight. And when there's that level of tightness in the market, it doesn't take much to push the market the TCYs by $20,000 a day within a couple of days on voyages, okay?

So while it is currently a little bit lower than it was in the last quarter, it is not a reflection of what it can be because it has been quite volatile over the last 3 to 4 months. We've seen $5,000 a day and $40,000 a day within the space of a week, both being done on the same route. So it is really choppy. And therefore, not an indication of what it could be. But in general, as it stands today, it's a little bit [indiscernible] yesterday, a little bit weaker than it was in the last quarter. But again, seasonality in the group also plays a role in this.

[Abhishek Nigam, analyst]

Yes. Okay. Got it. So my -- what I'm trying to do is sort of form a view on that segment. The issue is, on one hand, OPEC has been cutting production and on the other hand you have seasonality, you have more refineries coming out of 25th now, which should sort of increase -- lead to increase in trade. So it's kind of talk to from a clear view right now.

[G. Shivakumar, executive]

Yes. So if you look at how the oil market is shaping up. So OPEC -- so Saudi Arabia did a separate cut, right? They did a separate cut of 1 million barrels a day for July and August. So that cut is for trying to balance the market, and that was when oil was in the 70s. Now the question is, what is their action when oil is in the 80s, for instance -- currently [ 80 to 83]. What is their action? Is it going to come back? Is that 1 million barrels a day, going to come back into the market? The second is, of course, the refineries are coming out of maintenance so that demand will be there. So you -- either you have drawing down from inventories, in which case then the price keeps climbing higher because the spot supply is not meeting demand or you have spot supply picking up in order to meet demand. So in which case, then you've got your got more crude cargoes starting to move again, which then tightens the market, once again. So the question is how does the price of oil, which is at [ 80 to 83 ]. Now is different from where it was when the cut was done. Again, we have an OPEC meeting coming up. And we know soon enough.

[Abhishek Nigam, analyst]

Fair enough. And when you look at your offshore NAV on a quarterly basis, so what I wanted to check was, where are the jack up rig price levels now versus the highs of the previous cycle? So if I just use any ballpark number I think on average a jack-up, you would cost about -- a new jack up will be about USD 180 million, say, in the last cycle. So are prices approaching those levels? Or are you still way below that?

[G. Shivakumar, executive]

So when you say new jack up, are you talking about new building contract?

[Abhishek Nigam, analyst]

I'm talking about new -- yes, new build contract for...

[G. Shivakumar, executive]

Modern jack-up in the water, which is already operated. So valuations for those have been -- we have got valuation, say, let's say, 10 years ago before the market went down. Valuations have been in the $210 million to $230 million range. That was the high point of the jack-up value. So excess of $200 million. Today, those rigs would be valued at maybe a little over $100 million.

[Abhishek Nigam, analyst]

The jack up rig upcycle asset price upcycle has sort of just begun. We are still very, very far from peak.

[G. Shivakumar, executive]

So again, we are far in the sense that it is lower in absolute terms. However, the earnings at that time were also different. So the earnings were at least -- so based on a pricing in the same market. The earnings were $40,000 per day more in that market versus the most recent pricing in India. So that is also a factor. Additional $40 million of cash flow that you could get versus today's rates.

[Abhishek Nigam, analyst]

Yes, okay. But I mean, those dayrates are, of course, also climbing. So I guess it's fair to assume that asset pressures will go up further?

[G. Shivakumar, executive]

Yes.

[Abhishek Nigam, analyst]

Okay. Last question from me. Asset prices for container ships in dry bulk, have they really connected to a level where you would be comfortable to acquire some?

[G. Shivakumar, executive]

Container is actually not yet. So I don't think they've corrected that much because there's been sort of a floor put under them. The market seems to be okay with buying them at higher levels also. Dry bulk also have dropped off significantly. They are getting closer, but maybe not yet there. Maybe the next transaction we see in the market and the dry bulk market -- to answer your previous business, the dry bulk market currently is a little weak and it's weaker than it was in the previous quarter, at least for the smaller sizes of vessel, the sub-capes are weaker than they were in the previous quarter. So yes, maybe with some more weakness the bulk market is probably holding out for a China stimulus because of the hope for China stimulus. And maybe if that doesn't come through, you will have some more weakness in dry bulk rates, which gives you an opportunity, but not necessarily yet. But it's coming -- it's going in that direction.

[Operator]

[Operator Instructions]

We have a question from Roshan Nair from B&K Securities.

We're not able to hear you clearly.

[Roshan Nair, analyst]

Is it audible now?

[G. Shivakumar, executive]

Yes, please go ahead.

[Roshan Nair, analyst]

So the gain on sale of Jag Lavanya that has been booked in this quarter?

[G. Shivakumar, executive]

So when Lavanya was delivered in July, so that the sale will be recorded in Q2 in the September quarter.

[Operator]

[Operator Instructions]

We have a question from Abhishek Nigam from B&K Securities.

[Abhishek Nigam, analyst]

So offshore is now EBIT positive, again, in this quarter, it was positive last quarter. More or less, it has been in the positive territory last 3, 4 quarters. So is it fair to assume that this is -- broken even and turned around and it will at least stay in the positive territory now for the foreseeable future.

[G. Shivakumar, executive]

We don't know about the foreseeable future. But yes, the worst, it seems, is behind us there. And yes, with the repricings which are happening, it appears that we will be back in positive territory at least breakeven.

[Abhishek Nigam, analyst]

Fair enough. And we already know we have some data points around the jack up rig market. On the offshore vessel side, what kind of repricings are happening? Like how much premium are you able to sort of command now versus the previous charter?

[G. Shivakumar, executive]

Yes. So in India, we are seeing pricing -- repricing happening at $2,000 to $3,000 a day higher than last done on the contract, sometimes more than that also. But on average, let's call it, $3,000 a day. In international markets, it's much more. So the international markets are quicker to react to these things and these are shorter-term contracts when there are specific requirements. So you could even have a $5,000, $7,000 improvement in rates for a short-term contract. So yes, every single repricing, I think, would be higher than the previous contract that we've done has been higher than the previous contract.

[Abhishek Nigam, analyst]

Okay. Fair enough. And just on the ONGC jack up rig tenders, is it possible to give us some details around the dates? And what is happening over there?

[G. Shivakumar, executive]

So there is a tender out currently, which is a 5 rig tender, which is jack ups, of course. We may not qualify for that particular tender because of the time. Our rigs are getting free from that -- rig is getting free from the earlier contract a little later. So there are tenders which keep coming out all the time. We haven't seen a repricing since our Greatdrill Chaaru got repriced, where we got the contract. We have not yet gone on to the new contract that will happen by end of this year, but we haven't seen a price point after that. But there will be tenders, there are tenders coming all the time. In fact, they seem to have quite a lot of requirements.

[Abhishek Nigam, analyst]

And besides ONGC, I mean, who will be the other sort of customers who are sort of putting out tenders over here?

[G. Shivakumar, executive]

The long-term contracts are basically from ONGC. Other players are looking for 2, 3 well contracts. For which you need a rig immediately. We are not really there to do those contracts and those are -- don't keep your rig really occupied for enough time. So we prefer to a slightly longer-term contracts. But basically, the Indian market for jack-ups is basically ONGC. The others are not really relevant here.

[Abhishek Nigam, analyst]

Okay. So my understanding is one of the jack-up rigs is coming off contract in, I think, October this year, if I'm not wrong? And is there a risk it could remain ideal for a while because...

[G. Shivakumar, executive]

The first rig coming off contract is a Greatdrill Chaaru, which is in September, October this year. She already has received the next 3-year contract at much higher pricing. So she will come off this contract, do the work required to be done between the two contracts and then hopefully go on hire for the next contract by the end of calendar 2023. So that's the first rig coming off contract. The next rig comes off contract in May, June next year. So that's the next week coming off contract. So there will be tenders for employment. We will bid into those tenders. And if we win those tenders, then it is unlikely, then hopefully, we will not have idling between contracts, except for the standard, where you have to do some work for the contract.

[Abhishek Nigam, analyst]

Sure. And just last question from me. So in the last cycle, there were really 4 yards, maybe 5 at max, which were really credible offshore yards. So the two in Singapore, Lamprell and 1 or 2 in China. This time, what we've seen is Lamprell, I think they declared bankruptcy, [indiscernible] merged together. So how many credible shipyards are out there, which are actively building rigs and have you seen any contracts of late for a newbuild contract?

[G. Shivakumar, executive]

So we haven't seen any contracts. We are told that there are some rigs, which are being built in Saudi Arabia, for Saudi Aramco, where I think Lamprell set up a yard -- they were going to set yard. I don't know how that's going because that's not really announced too much publicly. But it's a function of what the pricing is. And one estimate we heard for, say, reactivation of Singaporean yard to build jack-up rigs. So not reactivation of the yard, but reactivation of the rebuilding activity of the yards are working and doing other things. One estimate we heard is that if you -- if somebody is there to build a jack-up at $225 million plus, then -- and this was, I think, an analyst report.

It said that it will take prices in excess of $225 million for a new building jack up rig for the Singaporean yards to be interested in building again. And China, of course, one never knows because they're not necessarily operating fully on commercial considerations. They may just decide that they want to get back into building and -- rebuilding and capture the market, but we haven't seen any orders placed for many years.

[Operator]

We have a next question from the line of Vikram Suryavanshi from PhillipCapital.

[Vikram Suryavanshi, analyst]

I joined call a bit late. Just on gas side of business, we typically tend to have long-term contracts, but how is the renewables coming on gas side? And how are the rates are there, if you can give some idea on that?

[G. Shivakumar, executive]

So we haven't seen too many renewals recently. The rates are very high. We think that pricing will be significantly higher than our last contract than our current running contracts because the market is much stronger than it was, say, a year or so ago when we last did the pricing of our VLGC. So the MGC, the midsized gas carrier went on to a new contract, which has priced about 20%, 25% higher than she was priced in 2021. So yes, it is -- the rates are trending upwards because the spot rates are so high. Spot rates are $80,000 a day. So -- and that's going to pull time charter rates up. The assessment -- the broker assessment of time charter rates is also much higher than it was a year ago. It may be even higher than it was 6 months ago. So we haven't necessarily seen a pricing recently in this market in the Indian market, but we suspect it will be much higher than last year's rates. We're also coming up for pricing in the end of this year.

[Vikram Suryavanshi, analyst]

Okay. And on this cost structure side, are we seeing cost structure getting any material change, particularly the way we are seeing improvement in offshore side. So on the OpEx side, how is the cost structure? Is there any material change?

[G. Shivakumar, executive]

Yes. Good question. The operating -- the material change, especially in offshore, but also in shipping, is availability of manpower on ships. We have -- there is an issue with trained manpower, much more on the offshore vessel side because of all the vessels and activity, which is happening, reactivation of vessels, et cetera. And therefore, costs are going up. These are not going up in a huge way because operating expenses anyway were not a very large component. But yes, there is cost inflation happening due to crewing costs. To a slightly lesser dent on the overall OpEx, there is -- there are cost increases happening in shipping as well. So this is a common theme across. It's the other cost, yes, dry docking costs also are a little bit higher across the board, a little bit higher, more work to be done, steel, et cetera. So yes, costs are increasing, but not to a very significant extent. So I would say less than 10% increase in OpEx over the last 2 to 3 years.

[Vikram Suryavanshi, analyst]

Okay. And in offshore side, does we have increased exposure outside India? Or how is that mix between India and outside broadly in terms of revenue?

[G. Shivakumar, executive]

Yes, we have 4 vessels operating outside India currently. We might send out a couple more vessels to operate outside India. As I mentioned, the outside markets are quicker to catch up to market movements. And if we don't get rates, which we believe are fair and reflect the market in India, then we'll move the vessels outside India. So currently, we have 4. We could look at taking out a couple more assets at least if we get decent contracts.

[Operator]

We have a next question from Nikhil Jain from [indiscernible].

[Unknown Analyst]

I have a question on the cash allocation strategy. If the asset prices continue to hold strong, say, for the next 4 to 6 quarters, what possible cash allocation strategies could be considered such as increased dividends or buybacks?

[G. Shivakumar, executive]

Yes, if the rates remain strong, we could look at all of these options. We have paid out more -- much more dividends in the last year or so. We paid 6 consecutive quarterly dividends as of this quarter going back till and last year. So we are open to paying out more dividends, and we have paid out more dividends. Buyback, again, depends on the price, depends on the circumstances and whether it makes sense from a capital allocation point of view. We are not there to -- just as we are not there to invest in ships at any price, we are not there to buyback the stock at any price. It will always be if we can see value in it in the long term.

When considering a buyback, we have to keep in mind always that there is a 23% leakage, which is on account of the buyback tax, which was imposed in 2019, and which makes it very, very, very inefficient to do a buyback. So that's one factor, which is always there when you're thinking about a buyback as a capital allocation option. So at current value -- just as an example, at current values, let's say, INR 800 that would add INR 180 plus to the price per share that you pay. So that really disincentivizes a buyback because nobody is getting that. The shareholders are not getting it and the company has to pay it out. So that's something that we have to keep in mind. Otherwise, we will be patient and wait for the right opportunities. So we've seen this in the past that it pays to be patient really.

[Operator]

We have our next question from Vaibhav Badjatya from Honesty and Integrity Investment.

Can you speak a bit louder?

[Vaibhav Badjatya, analyst]

Is it better now?

[Operator]

You'll have to speak a bit louder.

[Vaibhav Badjatya, analyst]

So my question is on the supply side. So I understand that the shipyards are full and said that our delivery will be in 2026. But some of the assets which are already or on the might get delivered in 2025 -- so like -- my question is historically, have you seen any kind of rescheduling of delivery timelines because obviously, the shipyards have a lot of container ship orders, and the market has completely changed some of the order cancellations happened can the slots which [indiscernible] container ships sort of be replaced by or have you seen that slowly happening does that not happen?

[G. Shivakumar, executive]

We afford rumors of one of those happening, container ships getting -- orders getting converted into tankers. However, remember that these are large container ships, which can be converted into -- which are taking up a crude tanker spot. Typically, these large container ships get ordered with a contract, an employment contract at the time of placing the order typically. Either that or they're placed -- the orders are placed by container line itself, which has no interest in operating a tanker. So they will tend to take delivery if they have a contract attached or if they are being ordered actually by a container line.

It's only if it is an owner like us who has different sectors -- who operates in different sectors that you have a possibility of the order being restructured to a different type of ship. Because if it's a container ship company, it will be -- they will take delivery -- they want only a container ship. They don't want to convert it to a crude tanker, for instance. So far, we have not seen it. In theory, it can happen. But practically, it's slightly lower probability. We've seen this happen also in the past, where tankers got converted -- tanker orders got converted to bulkers and vice-versa.

[Vaibhav Badjatya, analyst]

Got it. So on the customer side, you explained that on the shipyard side the [indiscernible] are generally agile. I mean, the shipyards are generally in the manufacture and it all kind of ships.

[G. Shivakumar, executive]

Sorry, I've lost you.

[Vaibhav Badjatya, analyst]

Can you hear me?

[G. Shivakumar, executive]

Yes.

[Vaibhav Badjatya, analyst]

Yes. So on the Shipyard side, I mean, as capacity is generally fungible. I mean -- or for shipyards also it becomes difficult to kind of...

[G. Shivakumar, executive]

So let's say, take one of the large Korean yards the capacity is fungible, the dry dock in which they're bringing a large containership can also build a large crude carrier. So that pace can be used to build different types of ship, it can build an LNG carrier as well. But if they've started building a containership and they've placed orders for the equipment for a container ship, then you can't change midway to a crude tanker or to an LNG ship. That's very difficult. This [indiscernible] fungible. And the yards generally have the capability. So the large Korean yards has the capability to be 1 of those 3, which I mentioned. But again, subject to practical considerations, how far along are you in the process of building that line.

[Operator]

We have a next question from Rajesh Agarwal from Moneyore.

[Rajesh Agarwal, analyst]

Sir, when -- when all our LPG investments are coming for repricing?

[G. Shivakumar, executive]

They start in end of this year, November, December this year and go on till middle of '24. So within that order 6- to 8-month period.

[Rajesh Agarwal, analyst]

By starting December; '24 -- '23?

[G. Shivakumar, executive]

That's correct.

[Rajesh Agarwal, analyst]

And sir, what is the outlook on the dry bulk market now when China reopening and all.

[G. Shivakumar, executive]

So China reopened quite a month ago. Chinese imports, as I mentioned earlier in the presentation, has been quite strong. So iron ore imports are up. Coal imports are up a lot because of other reasons, not just because of reopening because hydro power generation was poor. The China reopening has happened in some ways. The question then is of a China stimulus is there a China stimulus coming, which is the next possible boost for dry bulk. Yes, dry bulk players are waiting for that stimulus for the market to go up. But let's see who knows, it's anybody's guess. But if that happens, when it happens.

[Rajesh Agarwal, analyst]

Dry bulk prices are still very lower.

[G. Shivakumar, executive]

Low you mean ship prices?

[Rajesh Agarwal, analyst]

Dry bulk freight?

[G. Shivakumar, executive]

You mean freight rates? Yes, freight rates are pretty low for -- especially for the smaller-sized vessels. They're quite low, and they're much lower than they were a year ago.

[Rajesh Agarwal, analyst]

How has been the moment in the last 1 month?

[G. Shivakumar, executive]

Last 1 month, they have been moving around low-ish levels. So probably $10,000...

[Rajesh Agarwal, analyst]

On operating parameters, are we breaking even in this dry bulk?

[G. Shivakumar, executive]

No, well above. We are earning on average much of our OpEx, close to breakeven on the dry bulk portfolio -- but ships are earning quite early. But overall, it's close to breakeven or at breakeven, I would say.

[Rajesh Agarwal, analyst]

So maximum dry bulker [indiscernible] spot?

[G. Shivakumar, executive]

That's correct.

[Operator]

[Operator Instructions]

There are no further questions, sir.

[G. Shivakumar, executive]

Thank you. Thank you, everyone, for your active participation in the in this con call. As always, a transcript and the recording will be uploaded in a few days. We are happy to any further questions that you have, you can reach out to us. You know our contact details, and you can find them on our website, and you can reach out to our Investor Relations team any time. Thank you.

[Operator]

On behalf of Great Eastern Shipping, we conclude this conference. Thank you for joining us, and you may now exit the meeting.