Financial Data and Key Metrics Changes - Average Time Charter Equivalent (TCE) rate increased to $78,400 per day from $77,200 in the previous quarter, expected to rise further in Q3 due to full chartering of the existing fleet [3][18] - Total operating revenues for Q2 2024 were reported at $83.4 million, aligning with guidance and slightly above consensus estimates [18] - Adjusted EBITDA for Q2 2024 was $55.7 million, down from $58.5 million in Q1 2024, primarily due to lower TCE revenues [19][22] - Net income decreased to $26.1 million in Q2 from $36.6 million in Q1, largely due to reduced unrealized gains on interest rate swaps [22] Business Line Data and Key Metrics Changes - TCE revenues for the quarter were $76.4 million, a slight decrease from $78.7 million in the previous quarter, impacted by one vessel in dry dock and lower floating rates [18][19] - The Kool Blizzard vessel transitioned to a new 12-month charter, expected to generate approximately $10,000 more per day compared to its previous earnings [6] Market Data and Key Metrics Changes - The LNG market has been quiet during the summer, but expectations for increased activity in the winter season due to new supply and tender activity are anticipated [4][8] - The Asia Pacific region shows strong appetite for LNG, which is beneficial for shipping due to increased shipping distances [10] Company Strategy and Development Direction - The company maintains a strong backlog of $1.8 billion, equivalent to approximately 62 years of backlog, with an average TCE rate of $79,000 per day per vessel [23] - The company is focused on securing long-term charters while balancing the optionality of higher rates in the future [32] Management's Comments on Operating Environment and Future Outlook - Management noted that the LNG market sentiment is split between long-term and short-term charterers, with optimism for securing long-term deals [28] - The company expects a moderate increase in TCE rates and charter revenues in Q3 compared to Q2, despite ongoing dry dock activities [20][21] Other Important Information - The company has maintained a dividend of $0.41 per share, with a payout ratio of approximately 70% of net income [22][24] - Cash and cash equivalents totaled approximately $84 million, down from $106 million in the previous quarter, primarily due to debt amortization [24] Q&A Session Summary Question: Current market sentiment for the uncommitted newbuild - Management indicated a split market with some looking for long-term contracts while others are hesitant due to short-term market conditions [27][28] Question: Impact of upgraded TFDEs on vessel desirability - Management highlighted potential for increased day rates and attractiveness compared to older vessels, with expectations of sharing upside with charterers [29][30] Question: Outlook for the spot market - Management suggested two favorable scenarios for shipping: a cold winter increasing demand or volumes heading to emerging markets [35][36] Question: Long-term charter rates for Kool Tiger - Management expressed confidence in achieving competitive long-term rates similar to previous deals, with expectations of around $95,000 for shorter-term charters [38][39] Question: Impact of the Suez Canal on shipping routes - Management noted that while the Suez Canal's closure could affect arbitrage opportunities, it would not significantly impact overall shipping demand [37]
l pany .(CLCO) - 2024 Q2 - Earnings Call Transcript