Welcome to today's Pacific Basin 2022 third quarter trading update call. I'm now pleased to present Chief Executive Officer, Mr. Martin Fruergaard. For the first part of this call, all participants will be in listen only mode, and afterward, there will be a question and answer section. Mr. Fruergaard, please begin. Yeah, thank you very much. Welcome, ladies and gentlemen, and thank you for attending Pacific Basin's third quarter trading update call. My name is Martin Fruergaard. I'm Chief Executive Officer, and I'm joined by our CFO, Peter Schulz. Please turn to slide three. The minor bulk freight market in the third quarter of 2022 softened compared to the first half of the year, as increasing inflation and interest rates slowed global growth and weakening construction activity and zero COVID policies drove a slowdown in the Chinese economy. Index spot rates for Handysize and Supramax ships averaged $16,010 and $18,714 net per day, respectively, in the third quarter of 2022, both representing a decrease of 27% compared to the first half of 2022. Significantly lower than normal grain loadings due to the conflict in Ukraine and a slow start to the U.S. grain season impacted demand in the period. Despite this, the average minor bulk freight rates is historically high, and the market has remained considerably firmer compared to pre-pandemic levels. We see the market supported by continued overall robust loadings in minor bulks and an increase in the seaborne coal trade due to the high demand in Europe for non-Russian coal, and this despite record domestic Chinese coal production. Currently, we are experiencing improved market conditions with rate increases for both Handysize and Supramax in the Atlantic market due to improving grain export out of South America and the continents. Please turn to slide four. Global minor bulk loadings grew approximately 8% in the year to September compared to the same period last year. Growth in minor bulk loadings moderated in the third quarter to 5% year-on-year, and we expect the global macroeconomic outlook and slow Chinese economic recovery to weigh on minor bulk demand for the remainder of 2022, with some upside potential, potentially coming from any loosening of Chinese COVID related restrictions and a revival of residential construction activity. Weaker container rates also waited somewhat on the minor bulk market as some cargos were containerized. Global grain loadings were down 6% year-to-date, partly as a result of the situation in Ukraine, but also due to the U.S. grain season experiencing a slow start as low water levels in the upper reaches of the Mississippi River made barging grain for export difficult. We expect Ukrainian volumes to continue to grow, assuming an extension of the Ukraine grain export agreement and as more owners feel increasingly comfortable engaging in this trade, and for U.S. grain exports to increase as water levels in the Mississippi River rise. Both of these developments would further support the Atlantic freight market going into fourth quarter. Coal volumes loaded in a year to September increased 2% compared to the same period in 2021. There's a significant increase in European and Indian coal imports due to global energy security concerns and a general displacement of Russian volumes, helping to mitigate the impact of record Chinese domestic thermal coal production and weak coking coal imports. The conflict in Ukraine has also had a positive long-term impact as Europe increasingly source coal from more distant locations such as Australia, United States, Canada, and Colombia. Please turn to slide five. Our core business generated average Handysize and Supramax daily TCE earnings of $23,620 and $26,640 net per day in the third quarter, representing a decrease of 10% and 21% compared to the first half of 2022. So far, 74% and 89% of our contracted Handysize and Supramax days in the fourth quarter of 2022 are covered at $18,760 and $20,480 net per day, respectively. Our Supramax cover rates we have provided exclude any scrubber benefit, which is currently about $2,200 per day across our entire core Supramax fleet. We are focused on optimizing our short-term cover to maximize earnings over what is commonly a softer market during the Northern Hemisphere winter and Chinese New Year periods. Please turn to slide six. Both our Handysize and Supramax vessels outperformed the average Handysize and Supramax indices by $7,610 and $7,900 per day, respectively. In the third quarter, our operating activity generated a positive margin of $3,860 net per day over 4,780 operating days. This was our strongest quarterly operating activity performance so far in 2022. Our performance continues to benefit from our diverse cargo and customer base and the close customer interaction facilitated by our extensive global office network, and is again a testament to the great commercial acumen and operational excellence of our organization, both ashore and at sea. Our performance is also reconfirmed by our external benchmarking, and we are pleased to see that we not only outperform the spot market rates index but also our peer group. Our potentially softer market in the early 2023 will negatively impact our near term outperformance as well as our operating margins as we have chartered in commitments, particularly in Supramax, taking during the stronger market earlier this year. Please turn to slide seven. Prior to the IMO 2020 sulfur cap, we invested some $62 million on installing scrubbers on 28 of our Supramax vessels, and we are pleased to report that we have now fully recovered this investment considerably faster than expected. In the third quarter, scrubbers contributed 2,810 per day to our TCE earnings across our entire core Supramax fleet, equivalent to an annualized run rate of approximately $49 million. We have acquired an additional five Supramaxes with scrubbers since January 2020 for a total scrubber-fitted owned fleet today of 33 vessels. Along with these, we have three scrubber-fitted long term Supramax chartered in ships, taking our total core scrubber-fitted fleet to 36 vessels. Please turn to slide nine. IMF forecasting global GDP growth of 3.2% for 2022 and 2.7% for 2023, reflecting impacts of higher inflation and interest rates, ongoing conflict in Ukraine and a slowdown in the Chinese economy. Expectations are for dry bulk demand to moderate as is typical going into the Northern Hemisphere winter and Chinese New Year periods, with the first quarter typically being the weakest of the year. In the medium to long term, we are optimistic about the prospects of the dry bulk market despite any short term headwinds. We expect demand will be supported by significant global infrastructure investment, particularly in emerging markets such as India and countries in the ASEAN region. We expect global food and energy security issues to support demand and positive ton miles for both grain, coal and a number of minor bulks. And we expect the eventual relaxation of China's COVID mitigation controls next year, giving rise to further government-led infrastructure investment in support of the residential construction sector. Please turn to slide 10. We see that a long established relationship between dry bulk earnings and new building contracting has been broken. The dry bulk order book is at a record low of 7%, and the uncertainty over new environmental regulation and the high cost of new buildings will continue to discourage any significant new ship ordering. We don't expect the ordering of minor bulk zero emission ready vessels to be commercially feasible until mid-decade at the earliest. Clarksons Research forecasting just 0.2% fleet growth for Handysize and Supramax in 2023, and we expect this to continue to support the market. Please turn to slide 11. From next year, ship owners will report individual vessels, EEXI and CII data, and many will have to implement engine power limitations, with non-compliance beginning to have real associated consequences from 2024. The CII in particular is expected to have a material effect on vessel speeds and carrying capacity over time, as slowing vessel speed is the most effective way to reduce fuel consumption. Based on our current fleet alone, and assuming our ambitions of achieving C or better, we estimate a potential reduction in carrying capacity of up to 25% by 2030. In addition, we expect scrapping to increase in coming years as IMO fuel efficiency rules will encourage owners to phase out older, less efficient ships. Please turn to slide 13. We have over time maintained our strategy to grow and renew our fleet while adjusting as the market fluctuates. Our focus has been on minor bulk shipping, operational and cost excellence, and all the while organically growing our fleet from 33 owned ships in 2011 to 121 in 2020. Due to strong secondhand prices and in line with our strategy, we have recently been focused on selling some of our smaller, older Handysize ships, thereby crystallizing value and further optimizing our fleet to meet tightening environmental regulations. We have sold 14 Handysize vessels since the beginning of 2020, the latest one being sold in the third quarter 2022. Vessel values are now softening with the freight market, and we have taken advantage of the recent volatility to again consider purchasing high quality second-hand vessels. During the third quarter, we agreed to acquire one scrubber-fitted Supramax ship, which is our first vessel purchase since December 2021. Going forward, we will continue our organic fleet growth and renewal, and we'll invest in zero emission-ready ships when they become commercially viable for minor bulk trades and the required global bunkering infrastructure is being built out. Please turn to slide 14. We will continue to trade our ships efficiently for high laden to ballast utilization, and we constantly seek, assess, and implement energy efficient operating measures, including looking for collaboration solutions with our customers, tonnage providers, ports, and other stakeholders. This will ensure that our existing ships running on conventional fuel oil can maintain sound annual efficiency ratio ratings and continue to trade for the foreseeable future. We are preparing ourselves for shipping's eventual inclusion in the European Union Emissions Trading System among other EU initiatives to drive decarbonization in shipping. The European Fit for 55 package remains subject to negotiations between the European Council, Parliament, and Commission, and is now likely to apply to shipping from 2024 onwards. The consequence of these rules will include the progressive slowing of ship speeds and over time accelerated scrapping of older and less efficient ships become no longer fit for trading. Please turn to slide 15. Given the supportive fundamentals of our industry, market rates continue to be historically high and well above our break-even level for both Handysize and Supramax vessels. Despite any short-term headwinds, we continue to be excited by the long-term prospect of dry bulk shipping and especially the minor bulk segment. Our large and modern owned fleet of highly versatile Handysize and Supramax ships, combined with our close customer partnerships, enhanced access to cargo opportunities, competitive cost, and high vessel utilization, makes us well-positioned for the future. Ladies and gentlemen, that concludes our trading update presentation. I will now hand over the call to our operator for Q&A. Thank you. We will now begin our question and answer session. If you have a question for any of today's speakers, please press star one on your telephone keypad and you will enter the queue. After you are announced, please ask your question. If you find that your question has been answered before your turn, please press star two to cancel your question. Once again, please press star one to ask your question. Our first question comes from Parash Jain with HSBC, and please go ahead. Yeah. Thank you, and thanks, Martin. I have two questions, if I may, and the first one is probably a bit hypothetical, but can you help us understand if Russia-Ukraine war ends tomorrow, how would it change some of those trade lanes, the arguments around longer ton mile, in general, demand? And on the same line, what is your expectation in terms of China's appetite for dry bulk if 2023 starts on a clean slate with no COVID-related disruption? Thank you. Good questions. The first one is, I think it's a little bit hard for me to reply to it because it, I guess it'll depend a little. Even if the war ends, I wonder a little bit if the restrictions on Russian export will end. Bur clearly if the war ends, I'm sure that we will see export of Ukrainian grain. I think that will be good, all in all. That will increase the volumes, which is like down quite a bit here in third quarter compared to what it usually is. The question is, of course, if the war ends, does that mean that the world will start again to take commodities out of Russia? If the world will do that, I think it'd probably be good for the world economy, but I'm a little bit uncertain, Parash, if that's gonna happen. We can only follow that. In respect to China, I think if China opens up early next year, I think that will have a positive impact on the world economy and of course on the volumes going in and out of China. Just because China opens up doesn't mean that the world's GDP will grow or demand will grow for goods but for sure 1.4 billion people in China coming out of COVID. I'm fairly sure that will also mean some extra spending in China and a bigger flow of various commodities. And we have to remember that China actually been slow for some time now already. And even though we still have a fairly good minor bulk market, and I think if China opens up, I think it will have a positive effect on the minor bulk commodities. Okay. Perfect. Thank you so much, Martin, and have a good day. Thank you. If anyone wish to ask the question, please press star one on the telephone keypad. Our next question comes from Andrew Lee with Jefferies. Andrew, please go ahead. Yep. Hey. Hi. Thanks everyone for this presentation. I have a few questions. Maybe the first one is, are you expecting that rates will start rebounding into year-end? I know you mentioned that you expect like, first quarter next year before Chinese New Year, seasonality means that rates would come down. Does that mean that, yeah, you expect rates and demand to pick up into year-end? The second part of that is that the rates have actually been a little bit weaker than people have been expecting. Is that in line with your expectations, right? Because you previously noted that you expected near term there'd be a little bit pressure. Is it in line or is it worse than expected? Part C of the same question, sorry, is you mentioned that you're more positive on the longer term. How do you define longer term or medium term versus short term? Right. So that's the first question. Second question is on the CII regulations, right? You mentioned that you expect 25% of the fleet could actually get scrapped if that goes to. Is that based on the whole fleet or is that based on Pacific Basin? And does that mean that if I'm looking on slide 14, right, you have around 32 vessels that are rating D, seven that are rated E. Does that mean that all 39 needs to be scrapped within that needs to be scrapped? That's the second question. Final question I have is on you mentioned that, container rates were low, so some volume got shifted. Could you quantify how much volume shifted across? Thank you. There was so many questions. If we start first with the short, medium and long. That's a good question. I think actually we are a little bit positively surprised about how strong the market still is when you're considering all the things that's happening in the world at the moment. I'm actually a bit surprised how good our market actually still continue to be. And I think that also comes a little bit because, you know, of course, China is a big player in dry cargo, but for us it's only 10% of our loading and discharge. And I think we still see in the ASEAN countries, so the Southeast Asia still being very active. We see a lot of cement clinker going into the U.S., and then bauxite and now we see the grain out of South America, and we see coal distribution in Europe. Actually our markets are holding up quite well. We would also say that coming into fourth quarter, we do see some grain being postponed and now it's coming to the market. That actually might be part. That's also why we see the Atlantic market coming up somewhat. Again, we see short term, which is maybe the next six months. At least the first quarter, we normally see a weaker market. We expect the same to happen this year. I think it's down to how deep will the crisis be and how long will it be. I think that's, for us, very hard to predict. But you know, we of course our hope is that it's gonna be short and not too deep, and therefore we are actually quite positive about second quarter, third quarter next year, already. But we have to follow a little bit how GDP is going in the world and how the world is developing on that side. In respect to the CII, I think first of all the calculation we have made is not, doesn't mean that we have to scrap 25% of the ships. What we try to do is that we look at our fleet and say with the rules we have coming up, we'll have to reduce our impact with 2% a year to 2026, and thereafter at least 2% going forward. What will that mean for us if we have to keep all the ships in CII rating? That means we will have to reduce speed. And for us that means that we would have to reduce speed by up to 25%. So the carrying capacity of our supply over the period for our ships will be 25% less. And we feel our fleet is maybe a good picture of how the global minor bulk fleet looks like. So I think what we're trying to say here is that if everybody has to comply with these rules, then supply will come down by between 15% and 25% by 2030, if it has to be done only on speed. It's not that the ships will necessarily be scrapped, but we just reduce speed and therefore the global supply will be less. It was an attempt to sort of show you what is the impact actually of these IMO rules when they come into force. I don't know, Peter, if you have anything else to add to that. No, I agree with that. Just these calculations on carrying capacity is compared using the average speed of the last five years of our fleet. So it's compared to a baseline based on last five years average, just to note. At the moment of course, the global dry bulk fleet is going fairly slowly at slightly above 11 knots. Historically, we have been a little bit faster than that, but that is the baseline. And if we just go to slide 14, then maybe a short comment on that. On slide 14, this is where this is how we are rated on the AER today. That doesn't mean that if they're rated at E, it doesn't mean that they are bad ships. It is actually more a reflection of how we are trading the ships. That has big impact on the rating. So it could be just by trading the ship differently, that some of the ships will not be in E, but they could actually go in C or even B. And when we look at our fleet today, we are prepared for the rules coming into force, and we will be in compliance with the rules when they come into force. So therefore, some of these ships that are in E, we have to do something different in the trading pattern of those, and we will do so, or we have to reduce our speed. Then the last question about containers. It's really hard to say how much it is, but it is clear that some of the even odd cargos that we were moving in at the height of the market earlier, on the deck or something else has been returning. It's slowly returning to the containers, and they will put them in the containers again. So that impact has, of course, taken a little bit off the top of the market as well, in it. In the bigger picture, it's very hard to justify or quantify how much it is. And of course, as the container market is coming down, some cargos will return to containers. I'm sure there's also some MPVs, multi-purpose ships that will return again to normal dry cargos instead of containers. I hope that replied, Andrew, what you had asked for. It does. Maybe I can just one quick follow-up question. The 25% speed reduction is from 11 knots. What's the slowest that the vessels can sail? No, it's not from 11 knots. It's from the average speed over the last five years, which is higher than 11 knots. I can't remember exactly off the top of my head it is, but it's higher than 11 knots, Andrew. Okay. That's good. And then my- One final question. I need to jump off the call. Yeah. Sorry. Sorry, one final question then I need to jump off. The vessels that you bought, right, could you give us a little bit of detail how much you paid and the size? Also, are you seeing more attractive offers to the vessel prices, and are the owners actually being more willing to negotiate a nice price for you guys? Like, by what I mean is, like, more of a discount. I'm not giving you the exact price, but the fair market value of the assets has come down, and the price we paid for this ship reflect a lower price compared to what was paid earlier in the year. On top of that, this ship has a scrubber fitted, and of course, you can see the benefits of the scrubber as well. We get that as well to the ship, and it's a Japanese build that fits very well into our fleet. We felt that was a good investment to do. But the price for the ship is down compared to what it was three-six months ago. Okay, thank you. Thank you. And our next question comes from Nathan Gee with Bank of America. Nathan, please go ahead. Hey, Martin. Thanks for the call. Can you talk a little bit more about your comments around bulk fundamentals moderating into 2023? So I guess, should we maybe think about 3Q as a good baseline for average rates next year, or could things be even worse than what we've seen in 3Q 2022? I think it's fair to say it all links to the global GDP. How is the world actually going? And then of course, if the recession, if we really get into recession and it is a deep recession, I think that will have an impact on the dry cargo markets. And again, it's always a question about how much does it spread to Southeast Asia. Today it's of course very much Europe, very much the U.S., and but how does it actually spread to other regions? Remember that especially us on the minor bulk, we do trade our ships around the world in many different places. And only 10% U.S., I think it's about 20% the U.S. b etween 10 and 20 is Europe. So I think it very much depends on how deep is this recession gonna be and how long is it gonna be. And of course, if that is gonna be deep and longer, then of course it will impact our market going forward. Okay. Thank you. Sorry, Nathan, do you have any follow-up questions? No. That's fine. Thanks, Martin. Thank you. Once again, if anyone wish to ask a question, please press star one on the telephone keypad. Once again, if anyone wish to ask a question, please press star one on the telephone keypad. And next we have a follow-up questions from Andrew Lee with Jefferies. Andrew, please go ahead. Hey. One final question I have is, so if rates are coming down, is there any way that you can cut costs any further? Oh, if we could reduce cost further? Yes. Yeah, any other way to I think actually we already today our break-even cost is. I think it's $10,200 for Handys and $10,600 for the Supramax. I actually think that is an industry low we have. Can we reduce it further? Yes, we could probably do some things to reduce it. Yeah. [audio distortion] Yeah. So of course again, if China opens up and our Chinese seafarer can fly cheaper and without restrictions, that will also help us. In a bigger picture, I don't think we can sort of, you know, we can't halve it or anything like that. Maybe we can reduce a little bit, but we come already from a very competitive level on our cost. And I think it's fair to say our cash break-even cost is even lesser. Okay, thank you. Thank you. Just to remind again, if you wish to ask question, please press star one on the telephone keypad. As there is no further questions, we will now begin closing comment. Please go ahead, Mr. Fruergaard. Yeah. I'd like to thank you again for joining us today and for your continued support to Pacific Basin. If you have any further questions, please contact Peter Budd from our Investor Relations Department. Thank you very much, and goodbye. Thank you. This concludes our conference call today. Thank you all for attending. Goodbye.