Okeanis Eco Tankers Corp. Q3 FY2024 earnings call

• Achieved healthy commercial and financial results: Adjusted EBITDA of $37.9 million, adjusted net profit of $14.5 million, and adjusted EPS of $0.45. Board declared 10th consecutive capital distribution of $0.45 per share.
• Successfully completed five-year drydocks for Nissos Kythnos, Nissos Rhenia, and Nissos Donoussa, with one more to be completed later in the month.
• Fleet has 14 vessels with average age of five years, youngest crude oil tanker fleet, and only pure eco and fully scrubber-fitted fleet, driving operational and commercial success.
• Post-refinancing, robust balance sheet with book leverage at 59% and market-adjusted net LPV at 40%. Financings mix of traditional and state leasebacks, with relationships in various markets.
• Q3 fleet-wide TCE at $43,900 per operating day; VLCCs at $43,100 per day (14% outperformance vs peers), Suezmaxes at $44,800 per spot day (27% outperformance vs peers).
• Drydocks completed about 10% below internal budget at ~$2 million per vessel, including use of high-spec tanks and graphene propeller coating, projecting 10% consumption benefit over five years.

In the third quarter of 2024, Okeanis Eco Tankers achieved a fleet-wide time-charted equivalent of about $44,000 per vessel per day. VLCCs were at $43,000 and Suezmaxes at $45,000. For the nine-month period, PC revenue stood at over $212 million. EBITDA was approximately $167 million, and net income was over $95 million, or $2.97 per share. The fleet consists of 14 vessels, all built at first-class yards in Korea and Japan, with an average age of five years, making it the youngest crude oil tanker fleet among listed fleets and the only pure eco and fully scrubber-fitted fleet, contributing to its operational and commercial success.

• Q4 has materially underperformed expectations due to factors like poor arbs, low U.S. exports, weak Chinese demand, terrible refining margins.
• So far in Q4, fixed 66% of fleet-wide days at $43,800 per day; 63% of VLCC spot days at $46,900 per day (26% outperformance vs peers), 70% of Suezmax days at $40,200 per day (23% outperformance vs peers).
• Anticipate short-term volatility but believe medium-term fundamentals are very favorable for the segment.

• Aging fleet faces challenges in meeting EEXI and CII compliance requirements, may be forced into slow steaming.
• Global yard capacity has nearly halved since 2010, reducing new ship replacement potential and increasing competition for new build plots.
• Demand, while expected to grow steadily, has a slower pace and is affected by short-term不利 factors.

Q: Was curious to hear directionally on how the quarter is progressing and if we're still seeing weakness as we finish the year A: Can look at indexes to guide, last week rates bottomed out from AG and West on VLCC, today sentiments stronger, but smaller segments need cargo push; hopefully rates rally further in next few weeks Q: If asset values started backing off enough, would there be any consideration to grow the fleet A: Focus on specific sub-segment of modern scrubber-fitted eco vessels, opportunities not there generally, but if fit scope and structure right to benefit shareholders without jeopardizing dividend capacity, would consider, but will remain disciplined