Anastasios Psaropoulos : In compliance with new regulations, it may needed also.
Omar Nokta : Well, that’s interesting. And I guess, I think it was in response maybe to Chris’ question about the liners, I mean it is definitely a very interesting setup at this point. You’re talking about cash resiliency potential to be in a net cash position at assuming you do nothing, which you won’t. But yes, we’re definitely — Tom, you mentioned the Lehman crisis shortly after you came public. I mean, yes, it looks like this downturn that we’re seeing if this is indeed a downturn, both liners and the owners are in a much stronger cash position than they were back then. So I guess when we think about the capital that you’ve got and you want to put that to work, is there any segment of the industry that you want to be investing in when the time is right? Or is it more about just the transaction and whether it’s accretive or not?
Georgios Youroukos : Well, the first point that we always look at is risk. Every transaction we look at is viewed by us from a risk perspective. First of all, we do not want to take risk on board. We want to take the minimum. Then we want the transaction to be immediately accretive. So we want the cash to hit our balance sheet very quickly. So that means that as of today, we’re looking at in this market because the market has not bottomed. The price of ships have not bottomed. We are looking at deals where we would have some kind of a charter together with it or we can put it right away into a charter so we can ensure growth of our EBITDA and cash flow and be a deal that is accretive immediately. Now our sweet spot of ships, since we’ve said always, it’s the Post-Panamax, this is what we like the most, let’s say, without saying that the rest of the ships we don’t like.
But if you ask me what’s my favorite, it’s Post-Panamax because these ships always offer the best economy of scale to the liner companies. And that’s where we have been focusing always. But I would say that we’re focusing on midsized ships between, let’s say, 2,500 to 11,000 with more razor focus on the Post-Panamax, which is like 5,000 and above. But again, it’s deal by deal.
Omar Nokta : Got it. Thanks, George. And maybe just one final one. I think maybe for Tassos, you mentioned the cash position and the restricted part of it. And I think it was $118 million that is advanced charter hire that’s been paid. Can you just remind us how much of that — how much — what does that constitute in terms of recognizing those revenues in the future?
Anastasios Psaropoulos : This has to do with the way we have initially recognized and received the money. And as far as I remember now, we are going to build up some more cash in that case, so we increase the deferred revenue until next year, the same period, and then this will start running through our revenue.
Omar Nokta : Okay. So I just wanted to double check the $118 million, I think — is that basically what you’re going to be receiving in a year’s time or will start within the next?
Ian Webber : If I may, we’ve already got it.
Anastasios Psaropoulos : Correct. Sorry, yes, correct.
Ian Webber : We’ve collected the cash. And then the charterer will still pay a little bit more than the headline charter rate and that cash will build a bit. But then the charter starts paying less than the headline charter rate. And we start leaking if you want to use that word, advance receipt of cash through the income statement. That’s the timing difference between recognizing revenue and receiving cash. That’s all. Yes. And then it’s also obviously very good sort of credit practice from our perspective as well.
Omar Nokta : Absolutely. Yes. I just wanted to just make sure for modeling purposes, I’m not double counting the incoming revenue stream.
Ian Webber : No, no, no. Just look at the charter rates in our tables and ignore the balance sheet.
Anastasios Psaropoulos : You can a little bit — just to assist you can a little bit match this $118 million, let’s say, with the two lines, which are in our current liabilities and long-term liabilities, which refer to deferred revenue. Just to match a little bit the liability to offer the service.
Thomas Lister : Yes. And the thing that we wanted to make clear, Omar, to everyone, particularly for modeling purposes, is that yes, we have a certain amount of cash on our balance sheet, which is always good news. But a very substantial slice of that is tied up either as prepaid charter hire, as we’ve just discussed or for other purposes. So there’s not a huge amount there that’s available as free liquidity, let’s say.
Operator: Our next question comes from Climent Molins from Value Investor’s Edge.
Climent Molins : Following up on Omar’s question regarding vessel acquisitions, do you have a preference for modern eco ships? Or are you agnostic in that regard and think that there is, let’s say, a right price for all assets?
Georgios Youroukos : I would say that we do not have a preference as long as the deal and the price is the right one. We are not set to opportunistically acquire ships yet without a charter. We don’t feel that the prices have bottomed to the point that we would be buying ships even opportunistically. So, so far, at this level, at this point, we’re looking at the combination of cash flow and acquisition price. So in this respect, whether it’s an eco ship or an existing design, let’s call it, an older design, whatever you want to call it. It’s not that relevant as long as — we’re looking at ships that have either a good potential on a good spec always the top-tier specs, some maybe enhancements of their characteristics, maybe they have some modifications to make them more eco-friendly. But more or less ships that can operate for in the foreseeable future very successfully.
Thomas Lister : And just to be clear, Climent, we’re not talking about new buildings. We are talking about existing ships that could be acquired and would be immediately accretive to cash flows from the time of acquisition just as a sort of a parenthetical.
Climent Molins : Yes, that’s helpful. I also wanted to ask about the CapEx related to energy savings and emissions reduction. Could you provide some commentary on the payback you are seeing on those investments?
Thomas Lister : It’s difficult because they vary a huge amount on a sort of deal-to-deal, charter at a charter basis. But there is, I would say, almost invariably a commercial agreement with the charterer such that we’re confident that whatever money goes into the ship, to enhance, it will be more than recovered either by way of an uplift in the value of the ship or by way of increased earnings or both.
Climent Molins : Makes sense. And final question for me. You’ve been clear you’d like to continue strengthening the balance sheet to withstand market volatility going forward. And I was wondering, how do you plan to balance this with additional shareholder returns?
Thomas Lister : I’m sorry, Climent, I didn’t understand the question. Would you mind repeating it?
