Thank you. Good afternoon, everyone, and welcome to the Quarterly Earnings Call for Q1 FY 2025-2026. I trust you've had a good look at the results which came out last evening. We'll do a quick run-through of the results and what led to those results, and after that, we can have Q&A. Mr. Rahul Sheth is here with me, and we will be happy to take questions after that. Customary disclaimers apply. Our consolidated net asset value is up slightly quarter on quarter as a result of the earnings accrual to the cash balance. The net profit, while down significantly versus a year ago, is up versus Q4 FY 2025. We've declared the 14th consecutive interim dividend, this time at INR 7.20 per share, representing a payout of about 27% on standalone earnings. I'm not going to go through the numbers here because I'm sure you've had time to go through them since yesterday. Just here, we have the standalone net asset value at the bottom, which is at INR 1,120 per share, down from INR 1,181 a year ago, which is, of course, due to the drop in the values of assets, but up from March, up slightly from the March number. This is what happened, and this is what resulted in those numbers. You see Q1 FY 2025, we had the crude tankers averaging $46,000 a day, which is down to $33,800 in Q1 FY 2026. The product tankers averaging $37,000 versus just under $25,000. That's a huge impact that we had. Of course, our LPG ships got repriced upwards, and therefore, there's an improvement from $36,700 to $43,800. The bulk carriers as well went down from about $18,000 to just under $15,000. Versus the immediate preceding quarter, we had some slight improvement. $31,000 on the crude tankers went to $33,000. The product tankers were about the same. LPG, again, continuing on charter, and therefore, the same. Dry bulk improving slightly as well. Along with the rates coming off, we also sold a few ships last year, so that also resulted in some reduction, not in the rates, but in the earnings on an absolute basis. Standalone net asset value, of course, it's been going up, though for the last two years now it's been, since March last year, it's now been stagnant. We had mentioned this earlier, that while asset prices can drop and therefore interrupt the growth in net asset value, earnings are quite strong, and the earnings growth and the cash accrual due to earnings sometimes compensates for the drop in the value of the ships themselves. These are the factors that led to the change in the net asset value. Similarly, for the consolidated net asset value, where you have a small drop in the consolidated net asset value. Let's look at what happened in the shipping market. You had the Suezmax earnings coming off from last year, and this is market earnings, and these are market benchmarks, so not necessarily reflective of exactly what the ships are doing. You also had the MR earnings coming off about 40% year-on- year. Now, what led to this? The dirty trade, which is the crude tanker trade, was flat year-on- year in the first quarter, which means that demand basically has plateaued. While you did not have too much of any addition of fleet, it still made the markets a little softer. You would remember that last year, we had the impact of the Red Sea closure, which happened in December 2023. Those effects lingered through the first half of calendar 2024, and that's why the rates were exceptionally high in Q1 of FY 2025, which is normally, Q1 is normally not a strong quarter for tankers. That was an unusual quarter, and we came off from those numbers. The product trade also was flat year -on- year, but mainly the long-haul trade, which is from east to west, the Eastern refineries exporting to the EU, remained flat. Therefore, you had weak demand while you had the fleet growing by about 3%. Again, the rates remained quite poor. Asset prices remained flat during the quarter, maybe about 5% down for older product tankers. On a year-on-year basis, we are talking of 30%+ drops in product tanker values, especially at the slightly older end. The order books have been building up in the last couple of years and still currently at 12% and 20% for crude and product tankers, respectively. Coming to dry bulk, we had a slightly weaker quarter than the corresponding quarter in both the Capes and the Supramaxes. Basically, we have the coal trade declining. That was a major reason for the weak dry bulk trade demand and therefore rates. Iron ore trade picked up slightly, but that wasn't enough to offset the global grain trade decline, which affects the smaller vessels more, that's the Supramaxes. Bauxite continued its strength through the first quarter, and that grew 19% year -on- year. The bulk carrier fleet year-on- year grew about 3%, and the order book still remains only at about 10% - 11% of the fleet. LPG, our four ships, of course, are on the time charter market. Earnings were down, but still at pretty strong levels. We are still looking at $40,000 a day on the spot market. The trade grew, and this is one trade that has been growing very strongly. You also have the fleet growing, and you have a very, very significant order book at 30%. Looking at fleet supply, as I mentioned, the order book hit the bottom in 2023 or so for tankers, and it's been picking up since then. You're now at 20% for product tankers and 12% for crude tankers. Looking at scrapping, of course, with these earnings, and the earnings even in dry bulk have been pretty decent. It more than covers operating expenses, and even if you have to do a dry dock in that year. Therefore, the scrapping has been very minimal. You can see that in the numbers for the last four or five years, we've seen basically no scrapping at all. Looking at asset prices, as I mentioned, they've been sort of range-bound, a little bit of movement in the last three months, maybe a 5% drop in product tankers and bulk carriers for the slightly older and smaller vessels. Coming to the oilfield services business, we have the standard data, and we have our rigs. All of them have got contracts, which is what we had reported in the last quarter. Two of our rigs, that's the Chetna and the Chaaya, have got short-term contracts, a four-month contract and a seven-month contract, both of which will start after the monsoon. We're talking of October, November, December. They will do the short-term contracts in India. We have got another rig coming off contract, that's the Chitra, coming off contract around December. She's already landed the next three-year contract. After doing the work between the contracts, she'll go back onto a new contract. Currently, the Chetna and the Chaaya are waiting for their contracts to start. We have a very small standby rate on the Chetna, and we are idling and not receiving any payment for the Chaaya. On the vessels front, all our vessels are more or less fixed through the year. Out of our 19 vessels, four are operating in the spot market on short contracts. These are the most capable vessels, which we have decided to operate on the spot market or on short-term contracts. Those vessels will continue to operate typically on the spot market unless we get a contract which we believe compensates us at a reasonable level. We have the vessels essentially fixed through most of the year, and the rigs also fixed, but we will have repricings starting in early 2026. This is the standard slide on debt equity. We have now net cash of about $600 million on a standalone basis. In the group, we have net cash of about $700 million, including the subsidiaries. The share price to consolidated net asset value remains at just about two-thirds, so we have a one-third discount. Finally, something that we're proud of, which is the foundation which works in the CSR social sector. We have partnered with many NGOs, and we have hopefully helped to transform many lives. Thank you. Now we're happy to take questions. Thank you very much. We will now begin the question and answer session. A request to all the participants to limit their questions to three each per participant and to rejoin the queue for follow-up questions. To ask a question, click on the raise hand icon tab available on your toolbar or on the Q&A tab available on the screen. Now you turn on your mic when the operator announces your name. Ladies and gentlemen, we will wait for a moment while the questions will be handed. Our first question comes from the line of Mohammed Farooq from Pearl Capital. Please go ahead. Hello. Mr. Mohammed Farooq, your line is unmuted. Please proceed with your question. Can you hear me? Yes, we can hear you. Okay, thank you. Good afternoon. Congratulations on the solid set of numbers this quarter. Given the improving spot rates as seen in the dry bulk index, the evolving tariff environment under Trump, and the expected trade rerouting due to both tariffs and ongoing Russian sanctions, how do you see Q2 shaping up? Do you anticipate this next quarter performance to be stronger than Q1, or broadly in line based on these developments? We can tell you what rates are like today. We don't make a forecast, but this is what is happening currently. Currently, rates for bulk carriers are better than they were in the last quarter. That's in Q1. For tankers, it's more or less the same as where it was in the last quarter, maybe marginally higher. That's where we are today. Again, to be clear, we've only finished a month of the quarter, so this could easily change. You know the nature of our markets. There are very big swings that happen on a daily and weekly basis. We'll not hazard a guess as to whether the quarter will be better or worse. What about the demand, sir, regarding the trade issues rerouting because of these tariffs? Is there a demand increase on that because of that? No, not really. There is no trade rerouting because of the tariffs. None of the commodities really are affected by these. On a very marginal basis, they may be affected, but there's no rerouting happening really, and no significant rerouting. If you want to just break it up sector by sector, the oil trade is not really affected by the tariffs because it's broadly out of it. If you look at LPG, China has a 10% tariff on exports from the U.S. We have seen some of that cargo go to U.S. exports of LPG go to certain other Southeast Asian countries, including India as well. We've seen China pick up more cargo from the Middle East. There's been some change. On the tan mine basis, there is a slight improvement on this rerouting. On dry bulk, the U.S. is not a major contributor to the dry bulk trade except for the grain trade. This happened even in the last time in 2018 or so when Trump had put on those tariffs. We saw some of the grain exports from the U.S. get sent instead of China to certain other Southeast Asian countries, but the Latin American countries picked up the volume to send it to China. We've seen some of that change as well. On an overall basis, on the dry bulk trade, it's not had a very big impact. Okay, great. Sir, again, as a long-term investor, our key objective is wealth creation. The company has posted strong results and maintained robust cash reserves. Its valuation, especially in terms of price to earning, remains among the lowest in the Indian market. Has the board discussed the possibility of a share buyback as a way to unlock value? Also, what other strategic measures are being considered or implemented to enhance the shareholder wealth and improve the market perception of the company's true value? Yeah. No, there has been no discussion around buyback at the board level. When we do that, there will be all appropriate disclosures. With regard to improving the shareholder value or the stock price, we are not experts in that. All we do is run our business to provide maximum returns from the business. We hope that someday that will be recognized and translated into the appropriate valuation for the stock. Beyond that, we communicate what we are doing as well as transparently as we can. Hopefully, that will have an impact sometime. Thank you, sir, and all the best. Thank you. Thank you. Next question comes from the line of Saket Kapoor from Kapoor & Company. Please go ahead. Yeah, Namaskar, sir. Yeah. Thank you for this opportunity. Yes, sir, you can hear me now? Yes, yes, loud and clear. Thank you, sir. Firstly, in terms of our offshore segment for this quarter, although the revenue has been down quarter-on-quarter, the profitability has moved up from INR 82 crore to INR 126 crore. What has contributed to these? Yeah. The main factor is that while the revenue has gone down, the contributions of the vessels business and the rig business have moved in different separate directions. The vessels business has given a much higher contribution in the revenue. While the rig business, because two of our rigs are effectively idling, the revenue dropped. What has happened because of that is that the rigs, when they are idling, we bring down the operating expenses to the bare minimum, and therefore, we save a lot of costs there. That's what has happened. For earning the additional revenue in the vessels business, we did not need to spend more. For the same revenue, basically, you had lower costs, and that's why we've had a better result despite having a very similar revenue number. Can you provide the split between the vessels and the rig revenue for this quarter and also for the preceding quarter? We don't give out the numbers. It's just one segment, which is the offshore segment. I can tell you that. Sorry. No, no, you can continue. Compensated for each other more or less. Yes, sir. You mentioned that since the rigs were idle and there is lower cost attributed to the same, and the vessels revenue and the profitability being higher, even the lower revenue has compensated for the same. This is what the understanding is. That is correct. That is correct. For the rig segment, I think ONGC came out with a tender one quarter ago, maybe four months ago, wherein previously there was some cancellation also, which happened because of the higher charter rate. The rate at which the tender happened was way below the previous rate. I'm just referring to the last rate where it was tendered out in the vicinity of $38,000- $45,000, whereas the preceding were in about $70,000. What has exactly changed in the rig market? If you could just give us some more color, how the rig charter rates have moved, and also the CapEx outlined by the PSUs, have they cut their CapEx? Because of this, our assets being idle, we have lowered the rates just to offer not to keep the assets idle. What's the thought process there? This question had come up in the last quarter's call as well, and we had addressed it there, but let me give you the short summary of it. The market was on an uptrend from 2021 all the way up to the end of 2023. In the end of 2023 was when we had the pricing where we were around $80,000 a day. I think it probably went up close to $90,000 a day. What happened in early 2024 is that Saudi Aramco, which is the largest hirer of rigs, customer for jackup rigs, suspended contracts for between 20 and 25 rigs in April-May 2024. That resulted in a change in the market, and therefore, the market sentiment went down and rates went down as well. In our case, we decided that we would like to have the employment while two rigs have got short-term employment. The third rig, we decided that we would like to take that contract and keep the rig employed even though the rates were likely to be much lower, and that's why we dropped the price and took that contract. We wanted to avoid idling on that rig. We decided it's better to take a low rate, which gives an EBITDA contribution rather than keep the rig idling. Currently, what's the status in terms of the current charter rates and when is the, if are there further contracts for deployment of rigs pending wherein we will be participating with the two idle ones or what's the updates that are currently? The two idle rigs have received contracts, short-term contracts. They are currently not working. However, both of the rigs have received contracts, one for four months and one for seven months. Both of them will go onto those contracts by the end of 2025. Therefore, we do not currently need to look for work for them. Of course, they will come off contract in the first half of 2026. At that time, we will require to find some work for them. Currently, we are not basically marketing any rigs. Can you give some color on where the charter rates are since the Aramco fiasco or the Aramco providing a lot of supply? You had the correct number. You are in the ballpark for the ONGC rates. Sir, last. Among one of the ticket. Yeah. Sorry, sir, I interrupted you. What were you telling? Catching the number of below $40,000, that's where that was the correct range of contracts. Lastly, sir, from the government PSU CapEx front, any understanding that we get in terms of the curtailment? This is not public information. We don't know what's happening there. All we know is that some contract tenders have got cancelled. Actually, the number of rigs with the largest customer in India have got reduced. We don't know what their long-term plans are clearly or what are the plans for the next 6- 12 months, whether they're going to come out with more tenders or not. Right, sir. Currently, sir, what portion of our business is from the government and how much is private? Sorry, you mean on the offshore business or the? Both. Total pipes are also in offshore also. In the shipping business, it's a small part. When you say government, I'm including PSUs. It's a small part of the business. Maybe less than 15% of our fleet is engaged in the PSU business in shipping. In the offshore business, the rigs, two rigs are operating with the largest customer who is the PSU. One of the short-term contracts is also with the PSU. The vessels which are operating in India, a majority are operating with the end client as ONGC. Whether directly or indirectly, they are working with ONGC. Okay, sir. Lastly, sir, on the shipping aspect, how do we book our order booking? I mean, if investors look at the visibility part, standing today in the month of July, what is the visibility we have in terms of the total fleet? How much, what kind of revenue have we booked, the charter rates, and how do we go on developing the building the order book going ahead? On the building, how much order book? Yeah. Now, the spot is we have maybe 20% of our fleet operating on charters, less than 20%. We are operating on charters. Typically, these are 1-2 year charters, and we take calls on this depending on the view we are taking on the market. If we get offered a good rate for a tank charter, we would take it. Our default mode would be to operate in the spot market. What are the conditions, sir, current market conditions? Current market conditions are the same as what they were in the previous quarter. Dry bulk slightly stronger, and tankers more or less the same. Okay. On the raw, our case is... Yeah, yeah. Thank you. I will do that, sir. Thank you. Ladies and gentlemen, request the participants to limit their questions to three each per participant and rejoin the queue for follow-up questions. Our next question comes from the line of Isha Shah from Nirzar Enterprise. Please go ahead. Am I audible, sir? Yes, yes, yes. Good afternoon, sir. I just have one question. I wanted to understand how is the shipping cycle across all our assets, in case of the tariffs that have recently been going on? Yeah. The shipping markets, spot markets have been reasonably strong for tankers, though they are down from a year ago, Q1 over Q1. They're still historically at fairly strong levels. Dry bulk are maybe around market averages. At current spot rates, they're probably above long-term averages as well. LPG offers are very, very high in the long-term historical context. That's where we are in rates compared to the long-term numbers that we've seen. How do you see the cycle? Is it like do we see it going upwards or how do you see the cycle now? The market's been strong. It's tough to see what can drive it upwards. For the market to get stronger, you need either demand, end-user demand to go up, or you need some logistical disruption, which makes the fleet less efficient. On the disruption, one never knows what can happen. On the demand side, it doesn't appear that economies are doing very well. There's not going to be a big demand upside really, whether it's in oil or dry commodities. The general outlook would be either you hold at this level or it gets weaker rather than having any upswing from here. Of course, you could have, say, seasonal improvements in oil demand, etc. Otherwise, the cycle is already pretty strong. Okay, okay. Thank you so much, sir. Thank you. Thank you. Our next question comes from the line of Himanshu Upadhyay from BugleRock P MS. Please go ahead. Hello, good afternoon. Hi, Himanshu. Yes, sir, hi. My first question was regarding this zone we are giving from Great Eastern Shipping Company Ltd to GIL at INR 450 crore. When we look at the consolidated balance numbers, what we give in the presentation and standalone, the difference between the net cash is around INR 1,000 crore. The largest subsidiary or working subsidiary for us is GIL. Would this majority of INR 1,000 crore be in GIL only or is it across various other subsidiaries? We are giving this zone or there's some CapEx plan on GIL and hence. There's no CapEx plan. Sorry, yeah, I got a question. There's no CapEx plan. About 50%- 60% of the cash that is sitting in GIL, let's say. The issue that is there is that the loan is in India, and a lot of the cash is in the overseas subsidiaries. There is some inefficiency in bringing the cash from the subsidiaries as of now. Therefore, it was felt better to do this transaction. Okay. And one more question, just to understand your thoughts for you. Nearly one year back and one and a half years back, it seemed we were much more eager to have a replacement of older ships with newer ships. As of today, when we see the product tankers and dry bulk, which is five to ten years age, it's down by 15% or 10%- 15% or whatever those percentages. That eagerness seems to be much lesser to renew the fleet, though we have done one transaction, but it is after a very long period of time. Any thoughts on that? Why at one year back, it seemed we were much more eager to replace the things, and right now we are going much slower when the prices are down nearly 15%? Himanshu, there has been no change in strategy on that front. We are as eager as earlier to continue with the switch strategy. We should just keep in mind that if asset values have come down 20%-30%, basically they come out for the ships we are going to buy and the ships we are going to replace them with. The delta, the extra capital that you will end up investing to conduct the switch strategy broadly remains the same. There has been no change of thought on that. We also look at when the ships are reaching those age profiles at which to conduct the switch. That's all. I'd say you still find the markets to be expensive and you are not thinking about expanding the fleet. The focus is just replacement currently. Yes, at the moment it is to replace. One more thing. On the offshore side, you stated that the resize jackup to other segments has done pretty well, and hence the numbers are much better. Is there any dry docking which is pending? Because before the jackup goes for these two orders, even if it is short term, or do you think this is the status quo for now or for next? Can you just explain the last statement? I could not hear it clearly. Oh, I was saying that we had demonstrated that the offshore segment did well. It It wasn't for vessels, which did pretty much better. I was just asking that is there any dry docking expenses pending before the jackup rigs go for tenders? Before every jackup tender that we deploy our rigs, there is some amount of work that gets done on the rigs. That's a part and parcel of the business. That's a certain amount of expenses you'll expect in every year. Of course, in this year, like Shiv had mentioned previously, we've got three rigs going on to contract. There are years where, if all the rigs are fixed out, there may be, you may not have a rig coming off contract, getting repriced. Generally, before a rig goes on to contract, there's always a little bit of expenses that we have to incur. Yeah, if you're looking for whether there's lumpy expenditure, yes, there is lumpy expenditure when a new contract. Yes. When you go on to a new contract. We expect that in the third and fourth quarter, I was just trying to understand if there is not a lumpy CapEx on dry docking which is pending. Yeah, or preparation for dry dock. Yes, or for dry dock with preparation for this contract. On some of our ships are Chinese built. How has that settlement happened? Many of the ships are generally trading between the U.S. and Europe and all those rules. Any forward penalties or all those? Is the market settled or are there still some disruptions happening for the Chinese-made ships which end up going to the U.S.A.? We have very few Chinese ships on the core of our eye. You should also keep in mind that when the USDR, which is, let's call it a tax which came on these Chinese-built or Chinese-owned ships, eventually they diluted the rules quite a bit. If you're trading within 1,000 nautical miles of the U.S., they're exempted. If you're below 81,000, the territory is exempted. We've done a calculation to see what is the impact of the Chinese-owned, Chinese-built. It only comes to about a few percentage, meaning like 2% or 3% of the entire world trade that would get liable for this tax or tariff. That's too minor to have a big impact because it's very easy for shipowners to reroute those vessels and not put those vessels on the U.S. freight. The tariff that they have discussed for those 2% of the fleet is prohibitive to the poor U.S. The market has also already taken it into account and there's been no real impact as well. It has already come into force as well. Yes, but, you know, it will not. Yeah. How significant can these be? In what we understand, even in the EU, they are increasing the number of sanctioned ships. Is there any impact of that, and what impact will the Chinese-made ships' higher tariff have? The sanctions also. We saw some sanctions coming out of Biden's administration at the end of January. We saw temporarily there was a sanction on, in China, there is a very big refining region called Shandong, which takes a lot of these ships. Temporarily in the month of February, maybe early part of March, there was a bit of uncertainty in the market of how these ships will fly. Somehow the market finds a way to rebalance. We've seen that the data that we can track shows that the exports out of Russia have not really changed, and they somehow find a way to eventually reach their destinations. We have not seen any material impact from these sanctions. Although recently there's been an EU sanction, it has not come into effect yet, but they have lowered the price cap. They basically said that if the price is below $60, international legitimate owners can lift cargo from Russia and transport them. A lot of Greek owners were doing that. Maybe 30%- 40% of the Russian exports were carried on legitimate trades, non-sanctioned trades. Now that they have put in a cap of $45, which is much lower, we'll have to see how that pans out because that's a big change. That's coming into effect in the month of September right now. They've given some time for the previous contracts to wind down. We'll have to see how that comes out because that's a big change. That's the first big change on the pricing broadly from the start of the war, which was three years ago. Thank you, sir. Thank you. Thank you. Our next question comes from the line of Karan Bhatelia from MAIQ Capital. Please go ahead. Thank you. Hello. Yeah, good evening, sir. Sir, congratulations on acquiring the Kamsarmax vessel. Sir, the company has engaged in substantial divestment of crude tankers over the period. What's the major reason for this? If you could just throw some light on it. Crude carriers, over the period we've reduced the crude carriers. What is the major reason? We had a few ships which hit an overage limit and therefore they had to exit the fleet. This happened a few years ago. At that point in time, the Russian war took place, asset values rose, and we did not switch those asset classes out. They just naturally ended their tradable life. There was no conscious call to reduce exposure to the crude segment. Ideally, we would like to increase the number of crude tankers again. Yeah, correct. Actually, my question was, I understand the reason of selling it off, but there was no replacement for that, you know, to acquire new vessels. Is the demand lacking, or is it because of the heightened geopolitical tensions? What's the? No, our intention is actually to increase the crude fleet again. What happened was, and another participant asked us on this call on our switching strategy. What happened is in 2022, once the Russian war took place, of course, the market increased substantially. Along with it, asset prices increased as well. Some of those crude tankers exited at the early part of that cycle. The Russian war, of course, has lasted a much longer period than we thought. We then had the Red Sea disruption, which kept the markets higher. Sometime in the end of calendar 2023, we decided that because we had lost, you know, we had peaked at 48, 49 ships sometime ago. We were at about 41, 42 ships in the end of 2023. At that point in time, we decided not to let the fleet come down in size any further. To continue to start a switch strategy and to maintain a certain amount of exposure to the market. It just so happened that we had already lost some of the crude tankers by then. Since then, we're just holding ground to whatever fleet capacity we had at that time. Just to be clear on the switch strategy, the switch strategy, according to us, works because you are selling an older ship at a high point in the cycle and then reinvesting that into a newer ship at the high point of the cycle. Now that we don't have those older ships, which have exited the fleet a few years ago, you can't really switch them because the sale had happened too far back. Got it, sir. Are there any plans, like, is the pricing level too high for the vessel to buy the ship, or maybe we could lease them? We have actually in-chartered one of the ships in our subsidiary in Greatship, which is a Suezmax tanker, one of the largest crude tankers. We have done that, but at the moment, we're not looking for any incremental purchases. Got it, sir. Thank you. I'll get back and give you. Thank you. Ladies and gentlemen, we'll move on to the text questions. The first text question we have is from the line of Surendra Yadav. The question is, what's the rationale for receiving refinancing in GIL? Similar arrangement could have been done during the last refinancing, which I believe was due in Q4 FY 2024. What changed from then to now? Why are we deploying cash at 7.5% ROI when IRR benchmarks are 10%- 15%? Yeah, so the loan which has been given to the subsidiary is over a period of two and a half years. What we felt now is that the amount of cash which is sitting with Great Eastern Shipping Company Ltd is not something that we can deploy within this period. Therefore, this is effectively surplus cash at least for the next two and a half years. We decided to do it now. To To measure this versus the ship IRR, which is over a much longer period of time, would not be fair. Thank you. Our next text question comes from the line of Amit Khetan from Laburnum Capital. The question is, the shipping segment has seen very low normalized OpEx of INR 270 crore this quarter compared to the last few quarters running at the top INR 300 crore-INR 330 crore. Is this just a function of operating a lower number of ships or is there some one-off element here? Yeah, there is one. Both of those are factors. One is a lower number of ships that we are operating as compared to. We have a 10% lower fleet versus Q1 of last year. The other thing is that we have actually had some reduction in cost. We have been focused on seeing how we can do some cost reductions. That's one minor thing. What has also happened is that Q1, we had significantly higher costs in Q4 as the immediate preceding quarter, as a result of which Q1 expenditure was less. That's the other impact that we had. To sum it up, one is lower number of ships. Second is actually lower cost per day per ship as a result of some efforts that we put in. Thank you. Our next text question comes from the line of Zahara Sherif. The question is, with the Rio Tinto's Simandou Iron Ore Mine expected to start production in November this year, is it true that up to 170 dedicated Capesize vessels will be required for shipments to China? Can the dry bulk market absorb this new demand? If not, what could be the shortfall and could it impact rates? I'm not sure whether it will require so many Capesize vessels, but yes, it's true. It's Great Eastern. Yeah, it's a Rio, but the mine is coming up. You should also keep in mind there is actually a lot of export also coming from Guinea in West Africa on bauxite. That will also absorb a lot of Capesize vessels. That's actually a longer haul. You're going to get a lot of demand for Capesizes from there. You do have a certain amount of fleet growth, and iron ore trade, let's say at least up till now this year, has been negative. Sometimes there's a rebalancing. Whether there is going to be, I think the question is leading on whether there's going to be some massive shortfall and a massive demand for Capesizes. It's important. It's It's difficult to predict the market, but this I think seems a bit of a stretch. Thank you. Our next text question comes from the line of Kuldeep Singh, an investor. The question is, what will be the catalyst of offshore utilization and rates? Will it be an increase in oil prices or more countries planning for exploration investment in their respective geographies to avoid energy dependence? Yes, this is true. The utilization rates for the offshore rigs and the vessels have come off since only part of calendar 2024, but it still remains decently strong. Yes, you know, eventually it just boils down to the oil companies' confidence in their drilling activities. Thank you. We have a text question from the line of Surendra Yadav. The question is, in continuation with the previous question of GIL ECB refinancing, can shareholders expect higher dividend payouts in case of similar markets given that the management feels deployment of CapEx is constrained? Yeah, you could see that the dividend payout, which was running at around the 20% mark in the last three years, has already gone up in this quarter at a 27% payout ratio. That's one indicator. We are not saying that this is a change which has been done permanently, but there has been an increase in the dividend payout ratio. Again, it'll be a function of whether we feel we can deploy the capital or not. Remember, I mentioned that this money comes back to Great Eastern Shipping Company Ltd within the next two and a half years. Therefore, it is still available for deployment in CapEx. It's not that the money has gone permanently from Great Eastern Shipping Company Ltd. It will be coming back. All we spent was that we don't require it for the next two and a half years because we already have a significant amount of capital. Out of the cash balance which is there in Great Eastern Shipping Company Ltd, the amount that we are talking about is less than 7% -8%. It's a small part of the cash balance of Great Eastern Shipping Company Ltd. Thank you. Any other voice questions? Yeah. Sorry, we have a follow-up question from the line of Mr. Saket Kapoor. Can you hear me, sir? Yes, sir. Sir, firstly, in terms of the profit from sale of ship, what have we outlined currently in terms of the profitability and the number of ships or the vessels which are up for sale? Secondly, sir, for investors, what should we be penciling in in terms of the revenue profile for us for the current financial year, taking into account the current business environment? Third point, sir, you were answering to one of the text questions about the capsized vessels requirement not moving up even when there will be a mine for iron ore from New Guinea getting upscaled. Can you explain what you were trying to allude to in that reply? Let me take that last question first. What we meant was the question said we said that there would be demand for 170 Capesizes. That seemed a little bit of a stretch. Basically, this is unless you have end-user demand going up by the same amount of iron ore, that demand cannot happen because you are just going to have a rerouting, which is either you take some Brazilian cargos, you replace some Brazilian cargos with cargos from Africa, or you replace some Australian cargos. It is only on the margin. It will have a significant impact, but maybe not a full 170 ships. That was the only point. It will have a positive impact. We just don't know how much that positive impact will be. You were saying that it depends, sir, one second. Sir, it depends on how the ramp-up is there and how much demand is there for the mineral from the steel-producing nation. That depends on how the demand will shape up. This is what you are trying to allude to? That is correct. From the importers. We have looked at it from the exporter point of view. Yes, the cargo is available. The question is whether the importer wants that much more cargo. That is where you have it. Is there an end-user demand for that iron? It is just that. That is all. Your other question was on profit on sale. We do not plan for profit on sale. We do not budget for it. If we see an opportunity to do a good transaction of a sale and the profit happens from that, then so be it. We are not planning and budgeting saying that I want to take X crores of profit on sale in this year or this quarter. That is something that we do not do. Finally, on the revenue profile for this year, as I have mentioned before, the market is extremely volatile. 80% of our capacity is open to the spot market. Therefore, it is very difficult to predict what earnings could be. That is why we do not do earnings forecasts at all. Sir, correct me here, there is one knowledge tax that is there for the other geographies that is not there for our institution or for the taxation part, for the shipping industries. We are at par with the international. On income tax from profit from operating ships, that's on freight and charter income of ships, we have something called tonnage tax, which is very common across the world. That is more or less at par. We may be very marginally higher than some jurisdictions which have zero tax, but we are more or less on par with regard to shipping income. That is profit from earning freight or charter hire from running ships. Right, sir. If I may add just a last point, how are the consumption of spares and stores and the fuel part of the story? How are those line items cost shaping up and how are we aligned to mitigate any adverse impact of the sales? If you take the QoQ number for the spares and stores, that has gone down significantly. What does this lower loading of spares and stores explain in terms of a QoQ basis? I would not read too much into it. One is it might be just on account of having fewer ships. The second thing is we expense these spares costs when the spares reach the ship. It could just happen that we were not able to deliver the spares on board the ship during the quarter, and therefore it got postponed to maybe July or August. Do not read too much into it. These things can happen just due to logistical reasons. Yes, we have made an attempt to bring down the cost of running the ships, but do not read too much into one quarter's data. What is then the key raw material for running? That is the fuel only, I think, so that is needed. For that, we have long-term cost. No, in a voyage charter, fuel is the largest cost, but that's only for vessels which are on voyage charter, which is a very small proportion of our fleet. The rest of the vessels typically are on contracts in which we do not take the fuel cost on our account. Our exposure to fuel price changes directly, direct exposure to fuel price changes is very minimal. Sir, lastly, to conclude, the fixed cost component for running the entire fleet is what, and what are the variable costs? The largest fixed cost component for running a ship is crew expenses, which works out to around $3,000 a day. That's the largest, $3,000- $3,500 a day. That's the largest fixed cost expense. Which we have to recognize. Yeah, other all variables. Others are all smaller costs. You might have maintenance costs, which may include lots of things, and may work out to about $2,000. Those are all much smaller costs. In the context of the revenues, these are pretty small and these are fixed costs, and they don't change that much on a year-to-year basis. Thank you. Thank you, sir, for elaborating all the answers. I hope to join again. Thank you. Thank you. Thank you. We have next questions. The next question comes from the line of Gaurav Jha. The question is, what is Great Eastern Shipping Company Ltd dividend policy and how is it calculated? Yeah, so the dividend, when we consider the dividend, the dividend policy says that we will take into account whatever other capital requirements may be there for the business while calculating the amount of dividend that can be paid. When the board has a discussion on how much dividend is to be paid, we also say how much would we like to retain for the modernizing of the fleet, for the expansion of the fleet. That's how it is calculated. Thank you. Our next text question is from Surendra Yadav. The question is, for Q1, what was the spot and time charter split for the three shipping segments, excluding gas? The Israel-Iran conflict in May-June led to a jump in rates of Suezmax and LR2. Was management able to lock in some contracts during the heightened spot rates? Yeah, the spot exposure in crude tankers is 100%. Spot exposure for dry bulk is probably around 80%- 90%. When I say spot exposure, that means contracts of less than six months. For product tankers, it's probably around 85%. Sorry, for product tankers, it's about 70% spot exposure. We did not lock in any contracts. That spike happened for a very short period, and we did not lock in any contracts at the time. It was a very short period of spike. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Ms. Anjali Kumar, Head of Corporate Communications, for closing comments. Thank you, everyone, for joining in our call today and for engaging with all your deep dive questions. The transcript of this call will be on our website. You are free to reach out to our IR team as well. We will be happy to have a meeting or a call with you. Thank you so much. Thank you, everyone. Thank you. On behalf of Great Eastern Shipping Company Ltd, that concludes this conference. Thank you for joining us and you may now disconnect your lines.