MPC Container Ships ASA

OSE:MPCC

Earnings Call Transcript 2021-Q4

[Operator]

Good day, and thank you for standing by. Welcome to the Q4 2021 Earnings Conference Call. [Operator Instructions]I would like hand the conference over to your first speaker today, Mr. Constantin Baack. Thank you, and please go ahead.

[Constantin Baack, Chief Executive Officer]

Thank you, operator, and good afternoon, and good morning, everyone. This is Constantin Baack, CEO of MPC Container Ships, and I would like to welcome you to our Q4 2021 earnings call. Thank you for joining us to discuss MPC Container Ships fourth quarter earnings. And this morning, we have issued a stock market announcement covering our fourth quarter results for the period ending December 31, 2021. The release as well as the accompanying presentation for this conference call are available on our Investor and Media section of our website.Please be advised that the material provided and our discussion today contains certain forward-looking statements as well as indicative figures. Actual results may differ materially from those stated or implied by forward-looking statements due to the risks and uncertainties associated with our business.And on that note, I would like to start today's presentation commencing with a short executive summary and some company highlights in Q4 and for the full year 2021, followed by a market update before I will conclude with the company outlook.So on that note, I would like to turn to Slide 4 of the presentation. I'm going to start with a short executive summary. First of all, the past quarter marks another key milestone for MPC Container Ships, as we have posted the best quarterly results and full year results in the company's history. For 2021, net profit was $190 million, and EBITDA came in at USD 290 million. For 2022, based on strong charter backlog, which we'll touch upon later on, we have issued an EBITDA guidance of $450 million to $470 million, reflecting a strong improvement of around 60% compared to 2021.On the portfolio side, 2021 remarkable year for the container shipping industry with historically good market conditions where we continue to execute on our portfolio strategy with a number of strategic measures. Firstly, the chartering side in 2021, we have concluded 54 multiyear charter contracts and creating value by building a solid revenue and EBITDA backlog for the years ahead.Furthermore, we have been able to capture market opportunities during the first half of 2021, in particular, by making 12 very attractive vessel acquisitions and arbitraging the disconnect between asset prices and charter values. We have also successfully completed 12 highly profitable strategic vessel sales in order to facilitate the refinancing and preparation of our distribution plan and subsequently, pay out a significant dividend to shareholders earlier this year.Being both a buyer and a seller of vessels in 2021, on the one hand, shows our strong execution capabilities in different market phases, and it also demonstrates that we follow our clear strategy, focusing on value-accretive investment decisions and for that matter, also divestment decisions and operations.On the balance sheet side, we have completed our balance sheet optimization in Q4 2021, thereby reducing the financial leverage and cost of debt and gaining flexibility by adding revolving credit facility structures and achieving more than 30 vessels being unencumbered.Finally, and very importantly, we achieved the goal of high discretion regarding capital allocation decisions, which was an important final step in order to implement our distribution plan. It places an emphasis on returning capital to shareholders.And talking of distribution plan following the EGM approval in January 2022, we have already commenced with the execution of the same. An initial USD 150 million in event-driven distribution has been paid out to shareholders in February and our first recurring quarterly dividend of USD 0.11 per share or around USD 50 million in total has been declared today and will be paid out in March, bringing distributions to shareholders in Q1 2022 alone to a total of USD 200 million.Overall, for MPCC, 2021 can be summarized as the year of transitioning from significant growth to a very strong value proposition on the back of high earnings visibility for the years ahead. Now please turn to Slide 5. With some more detailed financial and operational KPIs for Q4 of 2021, Q3 2021 as well as full year 2021, and full year 2020. On the back of the continuously strong container market, we have seen significant improvements of all financial performance indicators across the board basically. At $136 million net revenues in Q4 were notably higher compared to the previous quarter. Furthermore, Q4 2021 EBITDA at above $160 million. It's more than doubled compared to the respective Q3 2021 EBITDA figure of low $70 million.We would like to mention that this quarter, adjustments have been made for gains from vessel sales and other nonrecurring events for net profit of around $61 million for net profit and $65 million on an EBITDA basis, still demonstrating record numbers. Moreover, adjusted EPS increased to USD 0.15 per share from USD 0.11 per share in Q3 2021.In addition, we have also observed favorable and sustainable market developments in terms of operational performance, a solid fleet utilization, increasing average TCEs as well as average adjusted EBITDA per ownership day.On the balance sheet side, and I touched on that already, we have continue to delever the company, and we have built up a significant cash reserve, large portion of that, we have paid back to shareholders in the course of the first quarter already. For further details on our Q4 2021 financials, please refer to the appendix of this presentation or to the financial report that is available on our website.Moving ahead on the company highlights. Please move to Slide 7, where we continue with some corporate and operational highlights as well as a few macroeconomic observations. And then we start with corporate development. I already mentioned the completion of our balance sheet optimization measures as well as the commencement of the distribution plan. But at the same time, we have also seen as far as the share liquidity is concerned, solid trading volumes and the inclusion of MPCC in the MSCI Small Cap Index.We have further progress with our ESG ambitions. Our second ESG report will be published in March together with our 2021 annual report. We have recently joined the Maersk Mc-Kinney Center for Zero Carbon shipping as an active project partner, Mission Ambassador. And furthermore, various ESG measures are in execution. And we're actually in close dialogue with a number of our customers to explore, jointly conducting certain vessel upgrades and investments.Looking at some operational developments. As a next point, while COVID has remained certainly a challenge from an operational standpoint, we are very pleased with the operational performance in this difficult environment. This has only been made possible with the commendable efforts and flexibility of the crew serving on board our vessels and also our onshore staff for which I'm grateful. We have completed 15 dockings, 7 of which in Q4 2021. And at the same time we have done all preparatory steps for the upcoming EEXI and CII regulation. We are now waiting for the finalized regulation, which we expect in the next couple of weeks to clarify the remaining outstandings before we roll out certain power limitation efforts on our fleet. We are well prepared to be fully compliant after entry into force.With the present geopolitical tensions and the COVID pandemic still being omnipresent, our top operational priority continues to be the safety and well-being of our employees and the crews serving on both of our vessels as well as being a reliable partner to our customers.We will look at the market in a bit more detail in the next section. But on a macro level, the outlook suggests a fairly robust global economic growth for 2022 and 2023. With global disruption indicators at all-time highs, global supply chains are still under severe pressure. Very importantly, and certainly not lastly, the effects of the current geopolitical uncertainties, specifically the Ukraine-Russia crisis, are still difficult to assess. And the impact strongly depends on the developments and scenarios in the weeks and months ahead.Moving on to the portfolio highlights and charter fixing activity, please turn to Slide 8. Excluding some interim employment and positioning voyages, we have concluded the 54 fixtures in 2021. Just as a note, could this compares to around 170 fixtures for last year. You can see the number of fixtures, average charter rates, average TEU fixed and average periods for the respective quarters and full year 2021 in the table at the bottom. What this shows is that rates improved and periods got longer from quarter-to-quarter. Q4 provides a bit of a unique picture as firstly, we have on average fixed smaller vessels. And secondly, we have carried out a number of forward fixtures which is why the periods seem to be shorter than in Q3.In the graph above, you can see the longer forward nature of fixtures in ahead of the actual charter expiry from 1 month in the quarters 1 to 3 to 6 months in Q4. This development will become even more visible and relevant when looking at some of the fixtures that we have already concluded in the first 1.5 months of 2022, which we will show later in the deck. Overall, newly contracted charters in 2021 were above USD 1 billion in contracted volume.From portfolio highlights, in terms of chartering I would now like to move to the changes in the fleet composition. As explained earlier, we have been active both as a buyer of 12 vessels and a seller of 12 vessels in the course of 2021.I would now like to run you through our SnP activities in 2021 in a bit more detail. Let me start with the acquisitions, all of which we have conducted during the first half of 2021. At this time, we aimed at arbitraging the disconnect between asset prices and charter values. Already today, as can be seen on the bridge on the top left, we have been able to realized values and lock in revenues and EBITDA for the acquisitions that is well in the money compared initial acquisition costs.So we have already a backlog scrap value sales proceeds of some vessels that we had already continued to sell onwards as well as EBITDA that we have already digested and EBITDA that we have locked in of $306 million, which compares to $26 million in acquisition costs. With more upside provided with 2 more open positions in the course of this year, which if we assume current market environment, we would add another $90 million. So overall, the acquisitions are not just fully paid back already today, but they're already -- they also constitute a significant upside.Now let's have a look at the vessel sales in terms of numbers and rational. The majority of which was done in the latter half of 2021, when we saw the previous gap between asset values and charter values of assets basically closing. We have sold and handed over 9 vessels in 2021 with 2 more handed in Q1 2021, which was slightly delayed as initially expected. They were basically expected to be handed over still last year, but they were now handed over in the course of the first 6 weeks of this year. It is worth noting that we, amongst others, have sold on 3 vessels in October that we had only taken over with the closing of the some of the transactions in August because we have deemed the realizable price very compelling compared to the achievable charter value at that point in time.The overall rationale behind those sales was basically portfolio optimization. We have sold a number of slightly older and smaller vessels. And we also consider dry dock positions. And as I said, obtainable charter value versus realizable asset value, amongst others, to facilitate our refinancing and prepare for our distribution plan and of course, subsequently followed by the extraordinary dividend of $150 million that we distributed earlier this year.I would now like to provide an update on the market. So please have a look at Slide #11. Starting off with some observations from the container freight market. The graph on this slide shows the key indicators for ocean freight, namely the freight rate index and annual TEU throughput, i.e., volumes. Volumes are at all-time highs and the robust trade growth of around 4% is expected for 2022. Freight rates have increased steeply and are at record high levels at the moment. At the same time, liner operators have seen significantly longer freight contract durations, improving their forward visibility. For example, Maersk has recently announced that they are -- that they have seen an increase of 70% as far as long-term contracts are concerned.Congestions that are still omnipresent globally, in particular in the U.S., but also in other regions of this world translate into a trade inefficiency with around 12% of locked capacity.Please turn to Page 12 of the presentation, where we now look at the charter market dynamics in a bit more detail. This chart compares the average charter rates as well as forward fixing activities it to the teeth in form of the columns. What can be observed is that whilst charter rates have increased, we have seen more and more forward fixtures and not just the usual roll over 30 days ahead of a charter expiry, but well above that level, and that has already been indicated by some of the numbers that I mentioned earlier in terms of our Q4 fixtures, which we concluded 6 months ahead of the actual charter expiry.A very important factor, especially looking at 2022 charter positions. We look at that as far as our positions are concerned in a bit more detail in a minute. But as a general industry trend, this is a very important development to note.So we look at record spot rates but also at record period rates. And as far as charters are concerned, record low idle capacity as well as prolonged charter period. And that also supports significantly higher asset prices. And the value at the bottom right, you can see that Clarksons reference a 15-year-old 2,700 TEU recorded there at $48 million. I would argue in today's market, you would certainly achieve a higher price than that even.Now turning to Slide 13. The 2 graphs show overall supply and demand development on the left and a more focused supply and demand development for intra-regional trades. And basically, our vessel size is on the right-hand side, whilst the order book of container vessels is not insignificant at this stage. It is very much geared towards the very large ships, above 10,000, 12,000 TEU. And we actually see a very moderate to low fleet growth when it comes to the smaller sizes that service the intra-regional trades, the trades in which we operate.Overall, the share of smaller vessels, as you can see at the bottom right, basically vessels below 5,000 TEU, 98% of those vessels service the intra-regional trade. So that trade is clearly dominated by vessels in our size segment.Overall, rebalancing is expected. As you can see at the left on the left-hand side for the overall market. Yet, we foresee a continuous undersupply of tonnage for the smaller sizes as far as the current trading pattern is concerned.On that note, I would like to continue with the company outlook section. Please turn to Slide 15, where we have illustrated the upcoming charter positions in our fleet in 2022. On the left-hand side, you can see the number of vessels by quarter and the total for 2022, which is in total, 24 vessels. Already today, mid-February, we have been able to fix 14 out of these 24 vessels that are planned to be -- that were planned to be renewed this year.This, amongst others, shows the potential to significantly forward fixed charters, as I mentioned before. And the top right shows the already contracted and potentially contracted charter revenues for those 2022 positions. We were able to already contract charters with a total volume of $590 million, well into 2025, some even into 2026. And the light blue part of the revenue pie chart at the top right shows the open potential of $435 million in revenue based on current period charter market levels. And there, we have used as a reference, the respective figures from Clarksons that you can see at the bottom right of this chart.The respective projected EBITDA figures and the potential are shown next to the revenue pie chart at the very top right. And I think to sum up this picture, the significant forward nature in combination with very strong rates and solid periods is underlining the positive market environment and evidences, the expected scarcity of tonnage going forward in 2022.Now let me move on to Slide 16, from where we have basically from the 2022 outlook that we have shown on the previous slide now more into a longer-term perspective in terms of our contract coverage. On the left-hand side, you can see the charter coverage for 2022 by quarter, considering the total number of operating base, i.e. considering utilization of 95%. And as you will see, the year 2022 is already well covered, providing a very high visibility for 2022.On the right-hand side, you can see charter coverage per year for 2022 to 2025, including on top of the columns, the average fixed time charter equivalent for the respective period as well as the secured revenues in the red circles on top of the columns. Overall, this translates into a contracted revenue backlog of around USD 1.4 billion and an EBITDA backlog of secured EBITDA projections of around USD 1.1 billion.Overall, this is a picture that obviously reflects the increased duration in periods in terms of our charter coverage as well as the continuously improving charter market environment and very much enhanced visibility as far as next couple of years are concerned.Now let me continue with a sensitivity. On the right-hand side here, we have again provided some of the details of our distribution plan consisting of 2 pillars. One is event-driven distributions as we have carried out a few weeks ago when we have distributed $150 million from certain vessel sales that we have conducted as well as recurring distributions of 75% of adjusted net profit, which is to be calculated and paid out quarterly.On the left-hand side, we have prepared an indicative sensitivity in terms of revenues, EBITDA and net profit for the period 2022 to 2025. These scenarios are based on the current charter backlog provided on the previous page. And as such, are meant to show the distribution potential based on certain scenarios. Please note that these graphs do not constitute a guidance or forecast but should serve as illustrative earnings scenarios for the years ahead.We have shown 3 different scenarios. Scenario 1, on top, is a current rate scenario, i.e., assuming current charter rate levels and periods will prevail. Scenario 3 at the bottom is based on the 10-year average charter rates for our fleet based on Clarksons, and scenario 2, the mid case is a blended scenario, blending basically the assumptions of scenario 1 and scenario 3.By showing this, we wanted to show the potential in terms of earnings outlook as well as sensitivities in that respect as well as potential distribution capacities, which, as you can see, is significant for the years ahead.I would now like to wrap up the presentation with a few comments on the outlook. First of all, on the market. we continue to witness historically strong container markets with significant demand growth and high freight and charter rates. This is further amplified by global supply chain disruptions, a situation that we believe is unlikely to ease in the near term.We have created value by locking in attractive cash flows, and we'll continue to execute our charter strategy. We expect to see a rebalancing, as I mentioned, of supply and demand in certain size sectors in the midterm. However, less pronounced in the segment of intra-regional tonnage, i.e., the sector in which we are active. In the long run, the industry landscape will definitely be affected by the energy transition and decarbonization efforts, which are very important.On the company side, in these markets, we have positioned ourselves as a leading tonnage provider for intra-regional trades with low financial leverage and significant operating leverage as well as strong secured cash flow generation going forward.In shipping, and we firmly believe that it is primarily a capital allocation business, and we, therefore, believe that the discipline and rational decisions are essential. As such, we are committed to our investment principles and our strategy, as set out here on this slide, focusing on value-accretive decisions and operations.We basically follow 4 key principles: firstly, we target investments that achieve double-digit full-cycle equity returns with low leverage; we want to be very transparent and active in terms of our capital allocation decisions; we target and focus on opportunistic pursuit of per share accretive transactions within our industry and within our defined strategy; and lastly and very importantly, especially in this phase of value creation in our company, we ensure professional asset and portfolio management.History has proven that shipping is a cyclical industry. And therefore, we believe acting rational according to a very clear game plan is crucial. And it is worth highlighting that we firmly believe that there are times to invest and deploy capital. And there are also times to place an emphasis also on returning capital to investors.As such, we truly believe that we are well positioned going forward, and we will continue to place a very strong emphasis on creating shareholder value by focusing on transactions that are accretive on a per share basis. And with such a compelling risk reward profile, we certainly look forward to MPCC's value strategy continuing for the years to come.And on that note, I would like to hand back to you, operator, and open the floor for questions. Thank you.

[Operator]

[Operator Instructions] Our first question comes from the line of [ Belmont Mollins ].

[Unknown Analyst]

Belmont Mollins from Investors Edge. Congratulations for this quarter. First of all, I wanted to ask on congestion. There has been some commentary regarding easing congestion on the Los Angeles and Long Beach ports, but that seems to be offset by worsening conditions elsewhere. Could you provide some commentary on what are you seeing and on your expectations regarding congestion?

[Constantin Baack, Chief Executive Officer]

And I mean, if you look at the congestion or global disruption indicators as per today, for example, Kuehne+Nagel has issued an update today, we are at the highest level that we have seen ever. So to answer your initial question, overall, the situation is not easing whilst maybe on a regional basis, it is easing in the next couple of weeks and months ahead. We will obviously have to see certainly how also the geopolitical situation might affect further congestions and disruptions as well as the COVID situation. So it's very difficult to foresee. I think what is clear is that the disruption is nothing that will end over the next couple of weeks and months. We believe it will certainly last well into the second half of this year, if not throughout this year. At least some of the larger liner companies have foreseen very tense and disruptive supply chain to prevail throughout 2022.So what we definitely see is obviously the situation in the U.S., and that goes a bit up and down. Yet it has never come down to a level where I would say we don't have a significant and severe problem in terms of the supply chain going into the U.S. So whilst we see congestion going up and down a bit regionally, it's certainly here to stay for the foreseeable months and quarters in our view. And that is what we see.Obviously, there are always external factors that might accelerate the situation and those are difficult to predict, yet we firmly believe that we will see a prolonged disruptions across supply chains globally.

[Unknown Analyst]

All right. And you've been very clear regarding your dividend policy, and seen share pricing has started to react to it. However, you continue to treat a discount to NAV. And I was wondering if you could provide some commentary on your willingness to repurchase shares?

[Constantin Baack, Chief Executive Officer]

Sure. I mean share buyback and we have also been clear about that as part of our distribution plan that share buyback is certainly an option. Yet, we believe that to be very clear and clean on our distribution strategy and have a quarterly distribution, which could and is, in principle, a dividend. But to react on potential market disruptions and shares trading at a discount is definitely something where we would also consider to execute a share buyback. Yet, I believe the path that we have taken so far is the right one to decide that as we go.In the market like today, where we obviously see a disastrous the capital market development, it would be fantastic to do repurchase. Yet, I would doubt we would get enough volumes in the market like this. So share buyback is definitely 1 of the options that we consider and that is being discussed. Yet, we just got this ball rolling on our distribution plan, and a share buyback is something that is one of the ingredients in our consideration going forward.

[Unknown Analyst]

Sounds good. And final question for me regarding upcoming regulations. Do you expect any effect in your vessels?

[Constantin Baack, Chief Executive Officer]

I mean, first of all, we have done all the preparatory work, as I mentioned in my presentation. So we are ready to go. There are still a few open items as far as the regulation is concerned, to which we expect to be clarified by the regulatory bodies in the next couple weeks.As far as the kind of CapEx implication on our vessels is concerned, that is very limited. We will carry out on certain vessels, engine power limitation measures, which come at around $40,000 to $60,000 per vessel. The main question is always, will that actually impact the trading profile of the vessels? And in most of the cases, it doesn't, because our vessels are not operating at very high speeds these days.On the overall market, I think it will have an impact on overall trading speed because some trades will be affected. Others will not be affected that much. So overall I would say, it will and all likely be a net positive and the CapEx are negligible for the time being.Obviously, with the CII coming into force as a next step after the EEXI kind of implementation. We will see further impact on trading speeds, et cetera. But this at least for the foreseeable future, meaning the next couple of 1 to 3 years will not have an impact that much on our fleet as we see it. And it certainly will have an impact on trading speeds of the market in general and hence, on capacity.Operator, are there other questions through the line. Otherwise, I would have a look at the questions posted on the web and just run through those.

[Operator]

There are no further questions over the phone lines. Please continue.

[Constantin Baack, Chief Executive Officer]

Okay. Then I will have a look at the questions on the web. There's one question by Stein Eriksen. He's asking the market value heavily discounted compared to backlog and fleet value has there been serious contact from anyone interested in buying the company or the fleet.Stein, there has been no approach by any serious party to buy the company, all the fleet. We have obviously selectively sold a few vessels. And as we've alluded to, in particular, end of last year, we have done a small package deal to one of the big liner companies. We are also in discussions on chartering packages to liners. I think for the time being, that is not a path that I see a feasible and at least, we have not received any incoming to that effect.There is a question by Martin Engstroem. He says, hi, I wonder if you are in the process of either selling or buying new ships. What is your stance?Our stance is pretty clear. And that's why I also spent some time on explaining how we dealt with acquisitions and sales of portfolio vessels in the course of last year because the market is moving and sometimes there's a gap between a charter value that you can generate and secondhand value that you can realize in an SnP transaction.And I believe from the numbers that I went through, we have shown that we would be very rational into carrying out acquisition or vessel sales, depending on market environment. So for the time being, I believe that the charter market is very solidly pricing and currently, the vessels. And as such, chartering out vessels at this point in time is the more attractive path than selling a vessel in my view.Having said that, we would always look at a per share accretion of any transaction as we've done in the course of the last couple of years. So we would always weigh up the benefits from growth versus the disadvantages from growth. And as such, and given that I said earlier, it is about finding the right timing to deploy capital and to return capital to investors by implementing our distribution plan. I think we have made a very clear -- taken a very clear position on the current market environment that we believe returning capital to investors is certainly a very important ingredient given market is at present.Furthermore, there is a question by Albert Carlson. Congratulations on a good year. Will there be an event-driven dividend for the ship sale in January? Is it a good share price to start a share buyback program?First of all, we have, obviously, distributed some of the liquidity that we have obtained from the ship sales in January as well. So that liquidity is part of the $150 million. There's 1 more ship sale coming up, which is the AS Patricia, likely to be handed over in end of March, early April. And the idea is obviously to consider the use of proceeds, including in all likelihood, an event-driven distribution once that vessel has been successfully handed over. But overall, we have used the proceeds from the various vessel sales that we have conducted last year and early this year to address the 2 legs. 1 leg is to affect the refinancing and put us in a position for a significant distribution plan and then also pay out the initial tranche of liquidity that we have obtained from the vessel sales. On the share buyback, I think I alluded to that question already.There's another question by [indiscernible]. Can we expect any buyback of shares in Q1 and Q2? Will the company consider further vessel sales? What is the estimated company NAV today?I guess, on share buyback, I already alluded to that, please feel free to come up with additional questions on that. If I haven't answered the details that you were after for the vessel sales, I already touched on that. We would always consider vessel sales versus chartering options at the time we conclude a charter. Estimated company NAV. That is obviously a very significant moving target. So given the strong backlog, I think the EBITDA that we have locked in speaks for itself. If you look at the analysts covering the stock, they were there between high 30s to mid-40s in terms of NAV. Yet obviously, one has to consider the cash backlog. So that's at least the analyst opinion, which is maybe not completely off. And another sub-question, what will 25% of net profits we used for? Well, first of all, we look at net profits. So we still intend to delever the company. We have a very steep repayment profile on our debt. We believe to given our high operating leverage, we don't necessarily need a high financial leverage. We believe to have a very sound and solid platform that is capable of paying significant dividends for the quarters ahead in the years ahead is very important. And at the same time to nevertheless derisk the balance sheet. So part of that will be used to continue to delever. And obviously, and of course, we also want to maintain some flexibility in order to act should market conditions change or should opportunities come up. And we would, over time, consider whether that 25% might even be allocated for other means, including a potential distribution, maybe a share buyback or an acquisition if it meets our investment criteria.There's a question by Ulf Jarl Rødsand, what do you expect cash breakeven to be?I mean we have had cash breakeven last year somewhere. I mean, depending on how you define cash flow after debt service, we obviously had a lot of debt service last year. Given the refinancing, we have brought down our cost of debt significantly. So we look at all in, including CapEx, et cetera, probably at a cash breakeven of 8.5% per day and vessel. There's a question by Fredrik Bratol. Would you be able to guide on your CapEx estimates for dry dockings and EEXI retrofitting for 2022 and 2023? Of course, we can provide that for 2022. We basically have CapEx, and that includes upgrades as well as regulatory CapEx and upcoming dry dockings. We look at around $55 million roughly for 2022 and the shape below that for 2023. Of course, that is still subject to other regulatory investments that we intend to carry out. That is probably a good ballpark figure.There's a question by Harry Roseland. Will MPCC focus on buybacks to stabilize the share price, especially since it has plummeted in the last weeks?Well, I wouldn't say it has plummeted. I think today is a unique day across the board. I think our share price has stabilized quite a bit. I would assume that on the back of the increased cash flow coverage, not just for this year, but also going forward, that, that will in itself stabilize the share price. But of course, as I mentioned before, if need be and if attractive, we will definitely consider a share buyback as well. And there's a question by August Lim. Congratulation on the quarter. Two quick questions. OpEx and G&A were up a bit during the quarter. Is this related to the vessel handovers and or other Q4 effects and thus expected to normalize going forward.First of all, it is expected to normalize going forward. There were a few extraordinary items, amongst others, in relation to the refinancing, but also in relation to cover additional costs incurred due to certain COVID implications on the operations. None of that is sustainable. And hence, we expect levels to come down again to Q3 and Q2 levels.And then the second part to the question, finance costs were also higher. Yes, this -- sorry, I already replied to that. So this is certainly related to certain repayment costs in association with -- in connection with the repayment of the bond amongst others and call premiums, et cetera. The question by Vegard, first of all, can you elaborate a bit on what type of period of forward fixtures you have been approached for? Have there been any discussions for 2023 positions yet? This obviously is, to some extent, a bit of a confidential and also negotiation wise, a sensitive topic, yet, I can report that we have even been approached on 2023 positions already. And that's why I included that slide on the 2022 positions to also show that we are able to fix vessels in basically each of the quarters that we have for 2022, but there has even been discussions on certain 2023 positions already now without that -- without having concluded anything at this junction.And in terms of periods and on forward fixtures, we have, for example, seen 3-year extensions on Q3 positions, which from where we are today or from where we were earlier this year means basically 4 years, because you would basically have 9 to 10 months ahead extensions and then added another 3 years at the end of that, and we even had in excess of 40 months extensions on some vessels just recently.There's a question by Palmer Zeng. Why is this dividend a month in the future?We basically -- this is probably relates to our communication around the timing of the dividend. First of all, we have made a significant dividend just 2 weeks ago, where we have distributed out a significant part of the liquidity. And we will, as a result of that, obviously, accumulate the cash over the next couple of weeks. And therefore, we decided to keep it in a very clear fashion to always also going forward, actually have the quarterly dividend, basically, at the end of the respective following quarter as a rule of thumb.Then there's a question -- another question by [indiscernible]. How are the [indiscernible] linked in your vessel classes moving these days?There are some reports of vessels under 2,000 TEU receiving durations for well over 3 years. Is this accurate or is this simply rumors? There are some vessels, I would say, not well over 3 years, but we have seen, I would say, vessels up to 2,500, going maybe 34 to 40 months that we have seen, yes. It's obviously always a matter of price and duration and that we have seen for vessels 2,500 TEU and above. We are seeing periods approaching of 44 months, up to maybe even 48 to 50 months on maybe Panamaxes, up to 4, 5 years for the 4,300, et cetera, and we actually have one 4,300 coming up in the course of 2022 still. There's another question by Palmer Ling. In this market condition, can you the rest of the ships for 2022 with no significant discount? Has there been any discussions for charters starting 2023? I think the 2023 part I already answered.Yes, there is, I would say, a tangible discussion on a number of 2022 positions. I wouldn't say on all of them, but on the vast majority, actually, and to kind of push the button today, would not be possible, but to kind of further the dialogue over the next couple of weeks and months. And if the market continues in the same form and shape, I'm confident that we will be able to cover quite a number of forward positions already ahead of the actual charter expiry.And the question by Ray Bunner. Congratulations on the stunning quarter. What is your Ukraine situation regarding the supply-demand and container shipping going forward and specifically the feeder segment? I think this is a very relevant question, obviously, with the terrifying developments over the last 24 hours. Yet, it's very difficult to foresee. In general, obviously, we have actually 3 vessels that would trade to the region. One vessel was supposed to go there last week. In discussion with the charterer, we have avoided to the port called Odessa, and we will revisit that on a case-by-case basis.In general, I mean, the Ukraine situation will not have immediate direct effect on shipping. It might obviously, and it will obviously have an effect on the more macro indirect level, meaning, for example, commodity prices and oil prices, et cetera. So that is to be seen. And obviously, the magnitude and the impact of sanctions remains to be seen as well. I would say it's still a bit early to kind of draw a conclusion on that very aspect?And more specifically on the feeder segment, I would not see effect from where we are today. But again, it's very early, and we will have to see the actual implications and then also the scenario, right? What will happen in the near term, and that remains to be seen. So to really give a full fledged answer to that question is premature at this stage.There's a question from [indiscernible]. Regarding the EBITDA guidance for 2022. Can you say how much the JV contributes with? And the reason I ask is that consensus EBITDA, most likely excludes the JV as associated incisively accounted below EBITDA on the scenarios on Page 17. What do you think personally is the most likely scenario here on the blended mid-case scenario? Can you illustrate what type of rates are these?I'm just revisiting that slide again for the -- it's -- I mean the blended rates are -- we just did a blended rate approach from current market rates and 10-year average. So that's the 28,415 shown on Slide 17. That is the average.In terms of your question on EBITDA guidance, the effects of the JV. I will have to look that up here, just 1 second, to give you a heads-up on the JV contribution. It is roughly -- let me see. It is roughly -- I think our share is roughly $35 million to $40 million in terms of contribution. So that's we expect to achieve. I'm happy for to run you through the assumptions on the JV and the details bilaterally. I know that you update your model as well. But that's the ballpark figure, roughly.In terms of likely scenario. Again, I mean, our guidance is obviously out there. I mean, you see the sensitivity is limited to certainly, a smaller number of days. So the sensitivity on those rate assumptions for 2022 on net profit is not -- and EBITDA is not so significant. So I mean the mid case is the mid case, and it's probably mid to mediocre conservative case, so to say, looking at where rates are today. And it all depends on the extent you can now forward fix the remaining 2022 positions.There's a question from Ernest Nagel. Do you see the sanctions against Russia could affect MPCC's business? Obviously, first of all, the question is what sanctions?We don't know the full magnitude of all the sanctions. We have seen a number of sanctions being communicated and imposed over the last couple of hours, and we will have to see how that develops. Obviously, sanctions will more have an indirect effect on MPCC. I mean we have contracts. We have certain developments. Obviously, the commodity prices, I think, will be the more relevant factor impacting the global economy and also container trades. But I think there's -- at least at this junction, I don't foresee any direct impact from the Russian sanctions on MPCC's business, certainly not on our operations rather indirect.And there's Ray Bunner with another question. You have approximately 30 versus unencumbered. Is there a strategy to be debt-free at some point?Well, obviously, being debt free is not the ultimate goal, yet to managing risk and return is very important. And we believe looking at age profile, looking at operating leverage, that's possibly considering to take out some additional financing on those vessels is a potential way forward. For the time being, we don't believe that levering up, and given the already significant distribution capacity is the way to go about it.We feel comfortable with reducing debt levels given the age profile to have, let's say, 50% with the current fleet, 50% of scrap as a target floor leverage going forward is probably something we could consider. And -- but it also depends on the opportunities that might arise. And I think with these unencumbered vessels, we have a high degree of optionality. And very importantly, we have a very high degree of discretion over our capital allocation decision from the cash that we generate with these unencumbered vessels.There are no strings attached. There is no financing, and there are no covenants on those vessels. So to be free in our decision-making is what we believe will be an added value.There's another question from Freddie Flatow And given the current observable market rates for our forward fixture and asset value of [ ASM ], what would be your preferred route sell or charter? Is [ ASM ] the Baby Panamax so the 2010 built 4,300 TEU, that vessel is likely open in the course of Q4. I think the charter market is currently making jumps in terms of periods, adding a year here ,adding a year there, and it really boils down to being able to either charter the vessel out maybe even for 5 years, then I think a charter would be a very attractive route because I doubt that you would get the same value in the secondhand price in the secondhand market at this stage.Having said that, as we said -- as I said earlier, we would always compare option to sell versus option to charter out and see what is the more accretive path forward. So for the time being, I think it is premature to take a conclusion there. Yet, we would compare the both. And I would say, the moment we can get a 5-year contract, for example. It will be difficult to see how that would be compensated by a comparable secondhand sale.There's [indiscernible], the company involved with any region counterparts that can be affected by sanctions throughout Russia and Russian companies? No, we are not. We obviously do a very -- we have a very clear kind of sanctions policy out there, KYC procedures, everything, and we don't have any one, at least, identified at this stage. It would be subject to counterparts. We have the large liner companies of this globe as counterparts, and we are not affected as far as we can see from today and today's sanctions.[indiscernible] with another question. You have previously said the dividends with net profit adjusted for several factors, including CapEx above, if applicable, but Slide 20 appears to not adjust for CapEx in Q4. Will the CapEx figure of $55 million you provided earlier affect the dividend distributions?No. What we said is that mainly has to be -- what we have to consider is certainly extraordinary CapEx in relation to new regulations, et cetera. So we want to make sure that if there are any extraordinary CapEx that go beyond the normal level that we might cater for that in connection with the dividend policy. But in general, we do not intend to deduct the CapEx as such from the net profit to adjust for the dividend potential.There's one -- there's more question from Ray Bunner. What does the soon to be new board member, Peter Frederiksen bring to the MPC table going forward?Peter Frederiksen is a very experienced person from the liner industry for various decades working for Maersk and then also Hamburg Sud. He has a very strong background in the industry. I think he will add additional perspective to the Board in that effect. And he has actually, over the last couple of years, served as a supporter in the founding Board, which is a Board that supports the management as well. And so he is a very knowledgeable person. He knows the industry inside out. He knows especially also in smaller vessel sizes very well. And I'm actually looking forward to him joining the Board and working closely with him going forward.Let me see whether there is another question. No, there are no further questions. We would wait for a second moderator. I don't know if there are any questions through the telephone line.

[Operator]

There are no further questions over the phone lines.

[Constantin Baack, Chief Executive Officer]

Okay. Then I will wait another minute before we conclude, but I don't see any further -- here, hang on. And there is another question by Ray Bunner, what would be a legit force majeure event regarding a typical charter contracts for MPCC? I'm not sure exactly you mean with legit force majeure event. I mean, we have a contract and a real force majeure event is not really part of the equation there. There are obviously various clauses as far as the charter parties are concerned, but there is no kind of general force majeure event clause as such. So I'm not really sure what that question exactly refers to.Unless there is a follow-on question by Ray. I would conclude the call. Many thanks for the interest. Many thanks for the various questions and good discussion here. Feel free to follow up to our IR desk, obviously. And we are looking forward to 2022. And many thanks for your attention, and also many thanks to you, moderator, and all the best.

[Operator]

That does conclude our conference for today. Thank you all for participating. You may all disconnect. Speakers, please stand by. Thank you.