Okeanis Eco Tankers Corp. (NYSE:ECO) Q1 2024 Earnings Call Transcript

Okeanis Eco Tankers Corp. (NYSE:ECO) Q1 2024 Earnings Call Transcript May 16, 2024

Operator: Welcome to the OET’s First Quarter 2024 Results — Financial Results Presentation. We will begin shortly. Aristidis Alafouzos, CEO; and Iraklis Sbarounis, CFO of Okeanis Eco Tankers, will take you through the presentation. We will be pleased to address any questions raised at the end of the call. I would like to advise you that this session is being recorded. Iraklis, please begin the presentation now.

Iraklis Sbarounis: Welcome to the presentation of Okeanis Eco Tankers results for the first quarter of 2024. We will discuss matters of the forward-looking nature, and actual results may differ from the expectations reflected in such forward-looking statements. Please read through the relevant disclaimer on Slide 2. So starting the presentation on Slide 4 and the executive summary. I’m pleased to present the highlights of the first quarter of 2024. It has been a very positive one. This marks the first quarter that we have been fully spot exposed across both our VLCC and Suezmax fleets. We achieved fleet wide time charter equivalent of over $63,000 per vessel per day, spot rates for VLCCs of $69,000 and spot Suezmaxes of $57,000.

We report adjusted EBITDA of $65.2 million, adjusted net profit of $39.6 million and adjusted EPS of $1.23. Our Board declared an eighth consecutive capital distribution of $1.10 per share, that is about 90% of our adjusted EPS as we continue delivering on our performance to distribute value to our shareholders. We remain very positive on the market outlook in parallel to our commitment to distribute as much as possible, always taking into account our capital structure and overall cash position. On a four quarter rolling basis, we have distributed $3.86 per share, that’s 92% and 93% respectively of our reported and adjusted EPS over the same period. On a nominal basis, that’s approximately $125 million. Slide 5, diving a little further into our P&L for the first three months of the year.

TCE revenue stood at $81 million, EBITDA of $65 million, reported net income of $42 million. This quarter, we recognized an extraordinary noncash gain of $2.3 million related to the amendments to our two leases on the VLCCs, Nissos Kea and Nissos Nikouria, which resulted in the recognition of a modification gain as per IFRS rules. We expect to amortize the gain through the duration of the leases. Including such gain and other minor cash adjustments, our reported EPS came out at $1.29. Moving on to Slide 6 and our balance sheet. We ended the quarter with $109 million of cash. You may remember that year end cash balance was affected by a higher than usual amount of receivables, which were collected at the beginning of the year. Our debt as of March 31st stood at $694 million, book leverage of 58%, while market adjusted net LTV based on our most recent broker values has now been reduced to approximately 40%, continuing to stand at more than comfortable levels for us.

On Slide 7, we summarize our corporate and capital structure as well as our employment profile. As we talked about earlier since late December, our entirely fleet is trading in the spot market. In the last quarter, we talked about four transactions that would materially improve our capital structure, including commencing with [indiscernible], the execution of the series of refinancings of our legacy expensive leases. We closed all four of these transactions within the quarter as expected. Overall, since the summer of 2023, we have improved the cost of debt on nine out of our 14 vessels by approximately 100 basis points, while in parallel, improving on other terms and extending maturities. The company is in a great and opportune position to take advantage of a competitive financing market landscape and the momentum achieved with all our last done transactions as we’re negotiating the refinancing of the [indiscernible], a significant milestone in improving our interest cost and capital structure.

And we also continue to be on the lookout for accretive opportunistic deals on other vessels. I’m now passing over the presentation to Aristidis for the commercial update.

Aristidis Alafouzos: Thank you, Iraklis. Q1 2024 was our first quarter of having full quarter of 100% spot exposure. This is where we want to be in this point of the cycle and we’re very confident here. The market was very well balanced in Q1 and the floor was established with strong resistance levels. During Q1, there were three or four tight moments where we saw the market firm and position list really tightened. And it genuinely felt as it could really run upwards more, but it’s stalled out. The major charters, especially loading out of the AG on VLCC, they’re very concentrated and effectively taking the steam out of the market when things get a bit tighter. Owners will break this control and take over the reins and control the market when we have a bit more power and there’s a further driver.

The market is currently balanced, as I said earlier. So we need a small — but it’s like some additional [OPEC] supply or seasonality to give us the strength. The effect of the closure of the Red Sea is now fully established in Q1 and it continues into Q2. And we’ve seen how crude trading patterns have changed on the crude market. Arab AG barrels, especially Iraqi [flowing] to Europe on Suezmaxes via the Suez Canal, they’re not either sold east or they’re parceled up on VLCCs and sent to Europe via the Cape of Good Hope. Likewise, again, Med Suezmax cargoes either loading in Libya or Algeria or from the Black Sea, which would go east on Suezmax, they’re now being parceled up again on VLCCs and getting sent around the Cape also. And we’ve capitalized on these types of voyages on our VLCCs and they worked out really well for us , because we’ve been able to triangulate and minimize [valves] to effectively nothing on some of our ships.

Given we have the dry dock, our 2019 built VLCCs this year, we took advantage of having our VLCC in the west to timing fix against these spikes we saw in Q1, our vessels to the East to position for the dry dock. These were highly profitable runs that outperformed the round voyage alternative of staying in the West by margin that offsets the value of being in the West. So we were happy to do these fixtures. And I think we would have probably done these fixtures even if we didn’t have the dry docks just because of the premium of the front haul versus the round voyage time charter [equivalent]. We plan the dry docks to occur during Q2 and Q3 in order to have the ships back and ready for a strong Q4. The dry docks are expected to take 15 to 20 days and the vessels won’t undergo through a maintenance, as well as sailing out with new high spec painting schemes that will actually make these ships more efficient than when they were delivered to us in newbuildings.

During the quarter, we have achieved a fleet YTC of 63,600 per operating day. Our VLCCs generated $68,800 per day in the spot market and this is a 47% outperformance relative to all our tanker peers that have reported Q1 earnings. Our Suezmaxes generated $56,700 per spot day and that’s a 10% outperformance relative to our tanker peers who have also reported Q1 earnings. These numbers reflect our actual book PCEs within the quarter as per our [counterparts]. And we will move on to Slide 10 for guidance on Q2. Q2 was another balanced and strong quarter where OET avoided some of the seasonal weakness in rates. For the past two weeks, we are experiencing this tightness in the market that I mentioned in the previous slide. If the owners had slightly more driving confidence, we could really see rates push on.

This being said, I would not be surprised if we have a summer surprise and we see a decent spike going into the summer. Overall, in Q2, our trading — in Q1, our trading strategy has changed a bit on the Vs and the Suezmaxes. The Suezmax fleet, since we don’t go through the Red Sea, has lost — we’ve lost the natural backhaul from the AG to the Europe. So the front hauls, either you have to price them on a round trip voyage or you have — or [ballast] back. This has made us to adjust the trading of the vessels more exclusively in the West and avoiding getting stuck out in the East without a backhaul. We always prefer trading in the West on Suezmaxes. And while on the VLCCs, we’re positioning, as I mentioned earlier, for the dry dock, and we have a strong presence in the East at the moment, which we haven’t had since 2022.

Once we completed dry docks though on the VLCC, we will likely return to a strategy where we minimize [ballast]. And we trade our VLCCs with a focus on getting back to the West using backhauls and then fixing front haul [indiscernible] [lease] or staying local when we think that the premium is not big enough to take the front haul [lease]. So far in Q2, we fixed 71% of our fleet spot days at $7,600 per day. We’ve done 82% of our VLCC spot base at $75,900 per day, that’s a 50% outperformance relative to our tanker peers who have reported Q2 earnings. And 57% of our Suezmax spot days at $60,800 per day, and that’s a 48% performance relative to our tanker peers that have reported Q2 earnings. On Slide 11, we have reformatted our outperformance slide.

I think what we try to show here is that this is a proven and consistent outperformance that grows when the market is strong and those extra materials in — those extra earnings for a market are very material. So at OET, we’re really focused on maintaining this consistency going forward and keeping the outperformance strong in the following quarters. On Slide 12. We think that OPEC+ has given stability to market prices and kept inventory levels in a steadily decreasing trajectory overall. We had expected OPEC cluster return some barrels in June or July, but this potentially made delay until late in the year due to the relative softening of oil prices. The side effect of OPEC+ stabilized in the market are the abnormalities that occur when you effectively regulate the market.

The floor and pricing has encouraged non-OPEC supply growth to effectively match global oil demand growth. This is occurring when OPEC spare capacity has been slowly growing due to the cuts and new production coming online. One question we have is how long will OPEC be able to manage their partners. With oil prices this high and energy transition in progress, we expect a weakening control of OPEC over its members and we expect more [indiscernible] and even a decent chance of countries breaking out and producing outside of their quotas. This is obviously very bullish for the market. On Slide 13, we look at the supply setup that seems too good to be true. A staggering amount of tonnage reaches the commercially restrictive age of 15 and 20 years over the next six years.

While shipyard capacity is steadily reduced and the quality yards that build tankers are focused on higher profit margin assets, like containers, LNGCs, VLGCs, car carriers, et cetera. The Read Sea situation has also caused a large tailwind to the container sector freight, which without would have had serious headwinds due to the delivery order book. This will bring a further newbuild contracting wave on containers, which we will see materialize over the coming months. This further restricts — the future container orders will further restrict availability for tankers and will reduce the potential supply for ’27, ’28 and onwards. Finally, although asset prices are high due to the strength in trade currently, the expected strength in future freight and the high newbuilding cost, we still believe there’s a material upside to values when we enter the phase where we see very strong freight strength in ’25 and ’26.

So it’s a unique and exciting time to be in tankers, and I’m handing it back to the operator.

Q&A Session

Operator: [Operator Instructions] So the first question comes from the line of Liam Burke of B. Riley.

Liam Burke: Your VLCCs are — due to the rerouting of traffic, the VLCCs are taking share from the Suezmax. But rates seem to be pretty elevated on a normalized basis. Is there any offset on the Suezmax possibly not — increase in non-OPEC+ plus production?

Aristidis Alafouzos: Yes, for sure, because I also think that the amount of oil that Suezmaxes were delivering from the Arabian Gulf to Europe prior to the Red Sea situation on Suezmax predominantly is a lot more today than what it is being delivered today on VLCC. So this gap in oil is transported from some other origin, whether it’s West Africa or the US Gulf or Brazil. And these are decent length voyages and predominantly, they will use Suezmaxes. Because we have to remember that the Mediterranean, especially is not a basin that’s designed to discharge VLCCs. We have discharged two, three maybe on the way to do four VLCCs in Europe, and everything has been via SPS on to Suezmaxes. So it also — like these VLCC voyages also create additional Suezmax voyages.

And whenever you have an SPS, you never know when the ship will arrive either our ship or the ship that’s coming, the weather delays. So you create additional Suezmax voyage from the VLCC rerouting as well. So I think it’s both a combination of non-OPEC Suezmax cargoes in the Atlantic Basin, bringing on Suezmaxes plus the inefficiency of VLCCs and the requirement to lighter on to Suez.

Liam Burke: And you mentioned it’s obvious, asset valuations are pretty elevated. Even in this environment, is there any interest or any possibility of adding assets?

Aristidis Alafouzos: Look, I mean we’ve been fairly prudent. I mean we’ve been very prudent since — I don’t know, since 2021 when we bought the last VLCC delivering in 2022. We’re very happy with the fleet. We don’t necessarily need to add assets at the moment. We definitely don’t want to add any assets that disrupt potential dividend payments. So that’s the number one concern of making sure we can keep returning our profits to shareholders. So I wouldn’t say that it’s very likely that we will be purchasing assets. Although we do see material upside to the values of assets and there are some ships being sold right now that are sister ships to ours, last time last year, it was around 113 that [indiscernible] bought 2019 those VLCCs. This year, the ship is six years old.

So it’s depreciated by whatever, 5%, 6% or — but I actually think that this price that these ships will be sold out, which are also 2019 will be higher than $113 million. So I think we’re there to see another small step up in valuation again.

Liam Burke: And I apologize, it’s last question, but I didn’t get it. In the prepared statements, you talked about outdistancing the benchmarks. I believe the Suezmaxes rates outdistance the comps by 10%. I didn’t get the VLCCs. And again, I apologize for that.

Aristidis Alafouzos: No problem. So the Suez — in Q1, the Suezmaxes outperformed all our comps by 10%. The VLCCs in Q1 outperformed all our comps by 47%. And in Q2, like given the percentage of days we fixed, we outperformed by 50%, all our comps who reported by 50% on VLCCs and 48% on Suezmaxes.

Operator: The next question comes from the line of Petter Haugen of ABG.

Petter Haugen: Start out where the earlier question and the — on the outperformance. Could you elaborate in a little bit more detail, because, well, as you say, you, yesterday or the day before, [VLCC] is guiding for $51,000 for Q2 on their pretty sort of modern fleet of VLCCs, while you today come to the market with close to $76,000 per day. So it almost sounds too good to be true, and please explain to me why it’s not?

Aristidis Alafouzos: I mean I can’t really explain why others are higher or lower, but I mean I can explain we’ve really managed to be able to fix — first of all, we had a lot of ships in the West. So these were doing round voyages, which historically have outperformed the [TD3] market. And because of the dry docks and because we felt that the West was slowly becoming oversaturated and this premium to the East was eroding, we thought it was time to go East. So we had ships that we’re opening in the North Sea. We had ships that were opening in the Med. We fixed the ship open in North Sea to load in the North Sea to go to China. So if our competitor has the same distance ballast and latent and where we have 500 miles one day ballast or two days ballast and then 60 latent, you can see how the TCE is going to be excellent for us, because we have no ballast days.

And the same goes for two or three ships in the Med. Again, we were discharging the Med on these cargoes coming from the AG or from the US Gulf. And then we found opportunity to load in the Med again, so minimal ballast, one, two, three days,and sail all the way down around Africa to China or to Korea. So the effect of triangulation that we’ll be able to achieve is really, really advantageous for us. It’s also a benefit that we have a relatively small fleet. So we’re very flexible in being able to choose the exact cargoes that we want, and having very good relationships that the company and the family have had for the past four years now in tankers that they’ve been maintained over that period as well.

Petter Haugen: That’s — so — but then again, you’re no positioning ships to the East. It sounded as if it’s perhaps a little bit more sort of front haul weighted in the Q2 guiding them. So well, first question, should we expect more ballast and less of an outperformance in Q3 and possibly Q4 when the dry docks are done?

Aristidis Alafouzos: I like how you said less of an outperformance. Yes, potentially. Look, I think once the dry docks are done the first voyage post dry dock will — it’s always a bit of a challenge because you lose your approvals, and the charterers are a bit concerned about some outdated issue that ships had 30 years ago, but because shipping is a slow changing industry, they’ve kept on. So the first voyage might — it’s not going to be the ideal voyage that we’ve done but we’re going to find something short and quick to get it over with. And then we’re going to get back to the way we usually trade ships. So repositioning to the West on these nice backhauls and then fixing fronthaul East again.

Petter Haugen: And in terms of dry docks, can I ask how many days do you plan now to spend for each of them? And what would you then in terms of the number of this again as price — as standard sort of work to be done, what is additional? I guess, the painting jobs is needed to be done either way. But if you have any additional days or OpEx in terms — CapEx in terms of upgrades better than what it was?

Aristidis Alafouzos: So the expected duration in the dry dock is 16 days at the moment. It could go a day quicker usually things take — delay a bit longer. But we’ve guided 15 to 20 days. I think you mentioned saying about maintenance. Yes, I mean we’re going to do everything that’s required for our ships to perform without issues as they have been performing for the next five years. So we want to overhaul major equipment that we don’t have issues with and have off-hire — commercial off hire time going forwards, and the ships have been running very hard. I mean since 2022, our fleet has been basically saling at full speed the whole time. And we’ve left very little time for the manager to do any kind of extra maintenance. So the dry dock, we need to do a good job here.

The paint scheme that we’re using, we’re using two types of paint. One is pure silicone by [Hempel] and another is a slightly more conventional by [Jotun]. We’re really positive about the effects of these pains. We’ve used some — we’ve used the [Hempel] on one of our Suezmaxes and we saw there that her performance was better than when she was delivered. So we’re quite excited about the effects of those paint. And I think we expect the whole cost, including all expenses, including port costs and everything like that to come in slightly above $2 million.

Iraklis Sbarounis: Peter, keep in mind, we are — just a reminder, we are capitalizing both dry dock expenses as well as the paint costs.

Petter Haugen: A quick sort of related question. Now we will come in to sort of — well, your ships are 2019 during the first write-off, but there is also quite a few 2009 build ships, which will do their third dry dock. Should we expect an abnormal amounts of dry dock days in the fleet this year? And what is the — well, is there sufficient dry dock capacity in the East for all the dry docks that will be done now with the sort of delivery boom we saw back in 2009, ’10?

Aristidis Alafouzos: I think in the next years when we see the wave of deliveries of 9, 10, 11, 12, which were very heavy delivery years, obviously, we will see a higher number of ships being dry docked and a decrease in the available VLCC fleet, which is positive for the market. I think though, that the market does have capacity to dry dock the ships. I haven’t heard that as a concern. It’s just that perhaps some people might not find optimum yard quality that they like or optimum slot timing. So we were very concerned about the quality of the yard, both for being able to overhaul the machinery that we want and to do the work we want and to apply the painting correctly but also to have the slot that we want. So for us, it was very key that we can get the ships in at some point in the summer.

They can do that first voyage and be all ready for a Q4 spike. So that’s been the strategy for us all along. And that’s also why Nissos Anafi, she’s a 2020-built VLCC, she doesn’t technically need to do her dry dock until next year, but we’re going to bring it forward. So we don’t have to be dry docking a ship in January, February of Q1 and missing out that strong market, which theoretically should be a lot firmer than what June or July maybe.

Petter Haugen: Just the final question for me on the market side of things. Do you see — or the US Gulf is perhaps at least from the screen I’m looking, not seemingly booming these days. It seems to be a bit slow. Well, the first part is, is that correct, is the US growth slower than it’s been sort of through the winter? And what is your expectation sort of on the other side of the summer in terms of activity out to the US Gulf?

Aristidis Alafouzos: So I think the activity within the US Gulf often depends a lot about the opportunities. And sometimes, they’re more open and sometimes they’re more closed and they may attract the liftings within that month. But what’s for sure is that the West is tight and the West has been attracting ships from the East, and that’s what’s been ballasting the East as well. So there is activity from the West and it has helped bring up the East rates and keep them out with the market [ballast]. So if we see — if your data showed that perhaps there’s been a bit of a drop-off in the liftings out of the US Gulf and we see that revert to, let’s say, last year’s average, it should be really bullish — it should be relatively bullish on the market because there will be these cargoes and the West is already tight, and it will force more people to ballast.

And yes — so overall, we’re positive. I think it’s just a matter of time until we have one of those drivers that I mentioned, it’s either more supply from OPEC or seasonality coming into play or some other geopolitical issue that really puts this market on the next level up.

Operator: The next question comes from the line of Bendik Nyttingnes of Clarksons Securities.

Bendik Nyttingnes: You’re now 100% spot, which is where you want to be at this point in the cycle. But is there any level or range where you’ll start to lock in earnings, or any sort of dynamics that would have to change before you change your strategy?

Aristidis Alafouzos: Well, I mean like most [fleets], our rate ideas are always 5,000 or 10,000 above the market. So whether they go up tomorrow, they’ll probably readjust upwards. But we have some numbers that we think are attractive for five year deals. I think as the market strengthens, the three year deal will — owners will start commanding a longer term period deals in order to give their ships away, and we’ll move into potential deal that can more commonly for five years. And if we get to the levels that we consider attractive, we definitely would fix out the ships. I don’t think that that potential will come this year. But going forward into 2025 when we really see the tightness or the lack of supply and more oil on the water, it’s a potential.

It’s definitely one of the things we’re considering about at the time of the cycle where we need to capitalize this investment, but we really don’t feel like we’re that close to that point yet. There’s still more upwards to go.

Bendik Nyttingnes: And if I can just have one more question. You mentioned that the appetite for adding assets is very high now. But if you were to grow, would you prefer VLs or the Suezmax segment and why?

Aristidis Alafouzos: It depends. Overall, I think the — I mean, the VLCC market is less ordered at the moment. So we’d probably lean on the VLCC market. The VLCC market also has become a lot more flexible and you’re able to triangulate the ships a lot more than what you were five years ago. So having, as I mentioned earlier, to B. Riley, that design of our fleet being relatively nimble and having good relationships, having more VLCCs and having these niche backhaul opportunities or front haul cargoes, I would — today, I would say that we’d prefer to expand into the VLCC market, if you force…

Iraklis Sbarounis: Or if you got us a good deal.

Operator: The next question comes from Eirik Haavaldsen of Pareto Securities.

Eirik Haavaldsen: I mean, I’m guessing a lot of questions, of course, we’ve touched upon it already on the outperformance, because I mean, it is a, as Petter said, a little bit hard to comprehend. I just see that you’ve done a few corridors out of the Black Sea, it seems like, at least in Q2 so far on Suezmaxes. So just wanted to — I mean I realize [CPC], there’s no — obviously, no sanctions. There’s no issues related to it. But I mean a slightly higher risk, I would say, than kind of mainstream Atlantic, Suezmax cargo. So just wanted to hear your thinking around that and what makes you — how you’re comfortable doing that? And then secondly, also on the VLCCs, it looks also like you’ve done some cargoes at least two up to Venezuela.

Again, no issues, no sanction, nothing at all. But just wanting to understand the premiums you’re able to get there and and your thinking around that? Because obviously, a few of the other listed companies are doing it now for whatever reason that might be. So just wanted to hear your thinking around that.

Aristidis Alafouzos: Yes, I mean that sounds like sour grapes. But sure, we can answer that. Look, I think if you look at where ships load crude oil, other than Norway and the US Gulf, almost every other place is a place that has an additional worst premium that you need insurance for, whether it’s West Africa, whether it’s the AG, whether it’s Libya, whether it’s the Black Sea. if you look at like, let’s say, if we do some statistics and see where have there been more incidents on VLCCs or Suezmaxes, I think the most dangerous place you could go is probably AG. I wouldn’t say it’s the Black Sea. I know it’s definitely not Libya or West Africa. And the AG is somewhere that everyone goes. The Suezmax cargoes that we lifted from the Black Sea in 2024, they were all from CPC and I think most of them were fixtures to US oil majors.

We don’t — we haven’t carried any Russian oil under the price cap in 2024 or in most in 2023, since the beginning of 2023. So the outperformance is cargoes that are available and safe. I don’t think that there’s any higher risk of loading in Libya, West Africa, Venezuela, Black Sea than there is in the AG, and the AG is somewhere where everyone goes, as I said. And our job — of course, safety is a concern and the crews, they’ve been with my family for some of them for 25 years. So there’s a very close relationship with these people. But once we get past and we feel comfortable with the safety, our job is to make as much money for the shareholders as we can. And some of these cargoes that we can find are also because of the relationships we have, which we mentioned earlier.

And perhaps some of the companies that use like tools or especially the pools, which don’t have the relationships we have, they won’t get access to these cargoes. So I think it’s more active rather than risk.

Eirik Haavaldsen: No sour grapes, just turning in questions being asked because I get them. So I have to ask…

Aristidis Alafouzos: No, not by you, by the person asking.

Operator: The next question comes from Climent Molins of Value Investors Edge.

Climent Molins: Most have already been covered, but I have a couple of modeling questions. First, it’s still maybe a bit early to tell, but should we expect a negative effect from load to discharge accounting on the back end of the quarter? And secondly, general and administrative expenses increased noticeably quarter-over-quarter. Is this attributable to the US listing and should we expect this to be a one-off?

Aristidis Alafouzos: Yes, I’ll answer both. On the ballast days in the load to discharge, it’s still a bit early to have a clear picture for what’s going to happen at the end of the quarter. So I would expect a slight effect like we see quarter-on-quarter. Obviously, one thing to keep in mind, and I think it’s quite evident by the results that we report every three months that it’s beneficial to look at both the actual results of the reported quarter as well as the guidance figures for the next one together, because there’s obviously a relationship. And when we do see an impact towards the end of the quarter, obviously, this is always captured in the following one. On G&A, you rightly point out. There’s — I mean, since last year, there’s been an increase in our G&A expenses.

The US listing element has two sides. One was — which has been — we’ve been hit by that, mostly in 2023, it’s what I would call is one-off expenses. And some of that has actually been incurred this side of the year as well as some of the expenses we received towards the end of the year. But there is also an element of the ongoing expenses that we will incur due to our listing in the US and, in fact, due to our dual listing. So some of the increased administrative expenses, unfortunately, is here to stay. I think our target and looking at the budgets and how it looked like last year, our target is to do better through the rest of the year compared to last year. But I wouldn’t expect it to be anywhere close to 2022. So I kind of think that’s a range with something closer to 2023.

Now having said all that, it’s a bit hard to extrapolate the total expense for the entire year if you look at individual quarters, because there is quite a significant variation between quarters. And I do expect that both Q1 and Q2 will be higher than what we see towards the rest of the year to keep that earmarked.

Operator: As there are no additional questions waiting at this time, I’d like to hand the conference back over to Iraklis for closing remarks.

Iraklis Sbarounis: Perfect. Thanks, everyone, for listening in. I think it was a quite productive call. We look forward to speaking again in August. Thank you.

Aristidis Alafouzos: Thank you very much. Have a nice afternoon.