Hello, and welcome to the Concordia Maritime Audiocast for Teleconference Q1 2022. Throughout the call, all participants will be in listen-only mode, and afterwards there'll be a question and answer session. Just to remind you, this conference call is being recorded. Today, I am pleased to present CEO Erik Lewenhaupt and CFO Martin Nerfeldt. Please begin your meeting. Okay, thank you. Welcome everyone to the Concordia Maritime Q1 earnings call. I'm Erik Lewenhaupt, and I'm joined here with Martin Nerfeldt, our CFO. We can kick off. Next picture, please. Whenever you're ready, we're ready for next slide. Okay. We can go to slide number 3. There we go. Q1. The highlights Q1 is the sale of 2 of our P-MAX vessels, which were both delivered during Q1. The Stena Polaris, our Ice Class 1A ship, which has been chartered out on a bareboat. We launched a technical design study for potential conversion of P-MAX tanker to containerships, and we also have new long-term financial covenants with the bank consortium up until Q4 2024. For the Q1 as such, we have a result before tax of -SEK 30.4 million. Next picture, please. Could we have the next slide? Okay, seems we have a bit of delay, but I'll jump to slide number 4. Okay, there we go. Perfect. Q1 2022, a stronger market we've seen and unfortunately. Okay, now we went one too far. I'm still on slide number 4. Unfortunately, as it is, the war in Ukraine has affected the freight markets in a positive way. Tanker market in particular, as you can see on the blue graph here, the Suezmax market jumped very quickly and to quite high earnings, which has since then fallen back. The green graph is the MR market, which took a bit longer to react, but on the opposite, have stayed on relatively healthy levels all up until today. Next slide, please. Next, now I'm on slide number 5, which is the MR development, and now we're looking on a 4-year period. On slide number 5, we have the market, which is the dark blue staples there, which is the ClarkSea Index, and above is the Concordia earnings. As you can see, over the past four years, we've had a relatively mediocre market with earnings somewhere between $5,000 and $10,000 per day, with the exception of the end of 2019 and early 2020, when the crude price fell and inventories started to replenish. Since then, unfortunately, the market has been on a very low level on both products and spots. We can move on to the next slide, please. This is slide number 6, which is the Suezmax market in the crude tankers. You see the same development there, that you have a relatively low earnings over the past four years, up until the end of 2019 and early 2020. Concordia earnings have, as well here, stayed above index, but with a slightly tighter margin. Now I move to slide number 7, the fleet status as of today. You can see, this is relatively much in the blue, so to say, as we have had the majority of our fleet on charter with Stena Bulk since the autumn. So currently we have of our fleet of 8 P-MAXs, we have 7 on charter to Stena Bulk on time charter, and the red one here is the bareboat charter of the Stena Polaris, which we will come back to. In the spot, we still have the crude oil tanker, Stena Stream. Move to next slide, please, which is slide number 8. It may be of interest as well for you to know how Stena Bulk are in fact themselves chartering the PMAX fleet that they have on time charter. On slide number 8, we can see that they have quite a balanced portfolio, where 4 of the vessels are on spot or short contracts. This would be contracts which is less than 6 months. 2 of them are in the Far East and trading dirty. 2 are in the Atlantic and mainly in U.S. Gulf with clean products. 1 ship has just been delivered on a medium-term chartering arrangement with an oil major, 6-month option. Three vessels are on 12 to 18-month contract, and that is including the bareboat of the Stena Polaris. It's quite a balanced portfolio of clean and dirty, of short and mid-term charters, and east and west. Then we move on to slide number 9, which is an overview of the fleet as it is today. As just mentioned, after the sale of the two P-MAXes, we have 8 product tankers left. Seven of these are now under the contract to Stena Bulk, and one with the bareboats, which I will come back to on the next slide. In addition, we have one ship exposure in the crude market, which is the Stena Supreme. We have in this quarterly report also mentioned that we have initiated a sales process of the Stena Supreme. This is due to the fact there are a couple of factors here, which have coincided. One is that. Well, first of all, the Stena Supreme has been on a bareboat to Concordia Maritime since 2016 with yearly purchase options. The bareboat is from a Japanese owner, and the purchase options are priced in yen. Since the start of this year, the dollar to yen exchange rate has changed, and the yen has depreciated. Meanwhile, the asset values for tankers in general and for the Stena Supreme have increased. From Concordia, we think this is a good time to test the water and see if we can lock in a profit by first purchasing the ship and then selling it off on the market. That process is currently on the way. I shift to slide number 10, which is a description of the Stena Polaris charter. Now, this is a bit of a unusual contract. It's a bareboat for starter, and it's through a U.S. entity called Crowley Maritime. The background is a tender from the U.S. Military Sealift Command, which was launched in May last year, where Crowley Maritime, which is a ship owner and logistics company, wanted to participate but did not have a ship. They contacted us, and we made an arrangement with the Stena Polaris. In December, the contract was awarded, and Crowley won. We have bareboated the Stena Polaris into Crowley on one option one up to 5 years in total with a minimum period of 12 months. Crowley, in turn, have put on a U.S. crew and a U.S. flag and time chartered the vessel out to Military Sealift Command. For us, this is a good employment, and it's also a good quality approval of the P-MAX concept and design. Revenue-wise, a bareboat and time charter cannot really be compared fully, but if you put on an approximate OpEx to the bareboat rate, this would be equivalent of a time charter of roughly $18,000 per day. We move on to slide number 11, which is an update on the container conversion project. This is something that we launched early this year, and a part of trying to see if we can get additional values out of the P-MAXes' very unique specifications and design. We have investigated together with Stena Teknik and a German consulting company, whether these ships can be converted to container carriers. After a couple of months' study, we can conclude that technically they are fully convertible to a 2,100 TEU feeder. That part is more or less complete. Whether it's commercially viable is a different story, and we are there in discussions with a few potential counterparts. We'll see. There is still a number of commercially related challenges to conclude before we would venture into such a conversion, and we would not do a conversion on speculation. We'll see how that ends up. Finally, if we move to slide number 12, we want to update on the environmental regulations, and in particular on the IMO EEXI and CII, which is part of the IMO short-term measures. The EEXI, which is a design index, referring to the technical efficiency of a ship. The regulation here is complete. From Concordia, we have also made a plan on how to comply with this regulation, which starts in 2023. We will plan for an engine power limitation for the vessels in the fleet, which is likely not affecting the operational effect and which costs are manageable. This will be done starting probably end of 2022 and during the course of the year of 2023. There is also another regulation, which is the Carbon Intensity Indicator, CII. This is different cause this refers fully to the ship's operational efficiency. This regulation is not fully complete as of yet. The final definitions, et cetera, will be taken in June during the IMO MEPC meeting. We are following this development, and we'll come up and revert with the plan for Carbon Intensity Indicator later this year. Finally, we just wanted to bring up the EU ETS, which is one out of several, we should say, regulations from the EU that affects maritime. The ETS has been operating for a number of years. What is new is that maritime will be included in 2023 or 2024. It could be pushed back a year or so. This will lead to an increased cost for the ships that operates within the EU and to and from the EU. This will be less of an effect for Concordia as most of our ships do not trade to the EU on a regular basis. I shift over to you, Martin, and slide number 13, please. Thank you very much, Erik. Very good. I'll go to slide number 13, and here we see the results for the Q1. We also see for the corresponding quarter of 2021. Here we could see if we look at the income side, it's less than 2021 if you compare Q1 2022. You have to add the line below what is called voyage-related operating costs. Because 2021, the vessels were on the spot market, but now they're on TC. We have to see the net amount between these two figures. You could see that 2022 has started much better. For the operating costs, you see also a quite big reduction. That's because we don't have any Suezmax started in right now. On the seagoing personnel costs, that's a cost-saving exercise that is going on. On the personnel expenses, it's also a cost reduction compared to last year. Other external costs, here you see a small increase, and the difference is the P&L effect of the sale of 2 P-MAXes. You see depreciation is going down. That's why we took a write-down during 2021 and also that we have sold 2 vessels, and that is the effect of that. From the net finance, it's almost identical to 2021. The result after tax is -SEK 30.5 compared to -SEK 121.4 for the corresponding period last year. If we then move to page number 14, we look at the key ratios. The equity ratio is 14% compared to 25%. That we are allowed to do an adjustment, an IFRS adjustment to this, so it's ending up at 17%. We have available liquidity of SEK 34.5, and we have an equity per share of SEK 5.80 as of Q1 2022. We'll move to page number 15. Just a general thing here that we always try to specify all different things that is happening on board. Even if it's small items, we specify them in the quarterly report in a way. I could just start first as we are quite proud of the average number of vetting observations. So far, average vetting observations is 2, and that is fairly good, I must say. We have had two damage to property, one high potential near miss, and also one restricted work case. From a bunker consumption point of view, you see a reduction. That's why it's a combination of many things. One thing is that we have sold the IMOIIMAX vessel and also that we have sold two P-MAX vessel, but it's a general reduction anyway. From a CO2 point of view, you could see that it's quite substantial lower figures compared to last quarter 2021. Of course, the thing that is extremely important for us is oil spill. We haven't recorded any oil spill at all for quarter 2022. Now I'm going to hand over to Erik for the outlook on page 17. Thank you. Yes. Okay. Outlook for the time being is, yeah, that's the bird, and then we move to the next one. Currently, we're seeing a stronger market, particularly in clean. Crude has not moved in the same way, at least not the last few weeks. Overall, most shipping segments have reacted positively during the Q1. Of course, it's the war in Ukraine, which is the main affecting factor here. Most analysts are expecting an increase in ton-mile demand, and we will come back to that when it comes to tanker business. We also see a general increase in demand for oil post-COVID when we start to travel again as we did before. However, COVID is not over in all areas and especially in China, as you have been following, it's still very much present with lockdowns and quarantines making logistics and shipping difficult in the Chinese ports in general. In general also, we see quite a modest increase in fleet growth over the coming years. Now we move to slide number 18, please. We can just follow the oil consumption and production, which is a long graph here, keeping very tight, and OPEC doing their best to keep the pressure up and the price levels high. The smaller graph here is from J.P. Morgan projecting oil demand and production up to 2030. According to their estimates, peak oil will not happen until 2030. The production basically of alternatives to oil and fossils is not enough. According to this study, we still have some time to go to peak oil, and we'll see a gradual increase of demand all the way up to 2030. Then we shift to slide number 19, please. Looking in particular at the effect of the war and how this will affect ton-miles. Of course, this is a moving picture, and we haven't seen the end of this as of yet, but we're starting to see at least some movements which may or may not be on a more long-term or even permanent basis. As you noted in the news just now, the EU will stop and sanction Russian products and crudes gradually during this year until end of this year and completely phase it out by then. Those volumes will have to go elsewhere, and Europe has to find supply from other areas. Reading analysts estimates, we can conclude that it seems like crude is going from Russia increasingly into China and also increasingly into India with a discounted price. Products are refined in India and exported out. The Russian products which have gone to Europe will potentially find their way to South America, among others, but South America has been pointed out as one, and which is currently supplied by the U.S. The U.S. volumes will, in that case, go to Europe, and also potentially the release of more crude from the U.S. Strategic Petroleum Reserve will also go towards Europe. As you can understand, this is, it's not an exact science, but in general, we seem to have an increase of ton-miles estimated on our hands. These numbers that we have here are from Lorentzen, who estimate an increase of 11% on product tankers and 15% on crude tankers going forward. We move now to next slide, number 20. This is the inventories. As you can see on the left-hand side, they have been in gradual decline ever since early 2020 when the inventories increased, when the crude price completely collapsed, if you remember. Since then, if you follow the orange slide and later on the blue line and all the way up until the black line in the left-hand field, there's been a decrease in inventory levels. As of today, on the right-hand side, they are 11% below the five-year average in OECD. Low inventory levels, and in the US with the release from the Strategic Petroleum Reserve, they will be even lower. The question is, when will this be replenished? Of course, with a high crude price, that doesn't speak for that it will happen today, but at some point, that will have to give. We move to the next slide, 21, and we look on the fleet side. We can conclude that the ordering at least year to date in tankers has been very low. Something like 7 ships has been recorded, 5 MRs and 2 LR2s compared to last year, which had quite a number of MRs ordered and a few other crude and larger tankers as well. Low ordering so far and new building prices, which is the index on the right, which is the Clarksons index, is on very high level. It's not that there hasn't been any ships ordered. On the contrary, 164 container vessels and 43 LNG carriers has reportedly been ordered, so far this year. Order books are full up until 2025, and prices are in general high. We move to the next slide, 22. One reason that the prices are high is also reflecting in the phasing out of ships, and that's the high steel price. You can see the scrapping and recycling price levels on the graph here on the left, and the top one is in Asia, and the lower one is in Turkey. As you can see, ever since early 2020, we've had an increasing trend here, and price levels now are record high. That hasn't really shown in scrapping numbers. In 2020, only 19 ships. Last year, 74. So far this year, estimated 25 are actually scrapped. Not sold for scrapped, but actually scrapped out or recycled. We hope that this will continue and that the trend will be going up. Of course, with the freight market, at least in products, who knows? We move to slide number 23, which is the order book. This graph goes all the way back until early 2000s, 2005, 2006, 2007, and 2008, where the economy was on an all-time high. That also is very evident when you look on the order book in tankers. Economy came down, and the market came down, and also the order book fell. Today's levels, as you can see on the right, crude 6.8% of the existing fleet and products, 4.7%. At least on products, that looks manageable. If you compared to other segments, bulk around same numbers, 6.6%. Look on LNG and containers, which has 33% and 26% of the fleet on order, respectively. Total world fleet, 9.5%. Then we can shift to the next slide, 24, where we have the estimated net growth of product tankers in the coming years, which looks manageable. The estimated average growth in the coming four years is something like 2%. Looking back on the past few years, it's been considerably higher. To sum up in terms of market view, we are cautiously optimistic, we would say, with looking on fundamentals and at least from what we've seen so far in terms of the effect from the war. We shift to the next slide, 25. Just highlighting that there are a number of X factors or black swans here. I think Lloyd's List put it quite nicely in an article, was it last week, wondering if we have reached the peak of uncertainty right now. We have the consequences of the war on European energy policy, the production and consumption. We have a world economic situation which is troubling, both with rising inflation and interest rates. We have the question whether COVID will now finally be phased out also in China or if we are still not there just yet. We can shift to the next slide, 26, please. The focus then for Concordia is to keep working with improving our financial stability. We will continue to turn every stone to try and evaluate whatever opportunities we can find to get the most out of the P-MAX fleet and their unique specifications and continue to analyze potential business opportunities in this market that we're in. We can shift to the last slide, 27. In general, to sum up, we see a somewhat stronger market, still not fully reflected in the Q1 earnings. At least on product tankers, we have seen relatively high rates at the end of Q1 and in April. Product tankers today are trending around $30,000 per day, depending on geographical area, etc. Somewhere around there on clean petroleum products, we should say. We see positive macro factors or fundamentals, but with many potential black swans out there that can quickly change the picture. We have time charter and bareboat agreements for the P-MAX vessels. We have put the crude oil Suezmax Stena Supreme up for sale. We continue to focus on strengthening liquidity and our financial position. That sums it up, then we move to the next slide, 28, and see if we have any questions from the listeners please. We have actually got a question emailed in. We have a question already now. Yeah, we take that first. It's from Kepler Cheuvreux here. I'm just reading, and then we could see who is answering. Are any of the vessels on charter to Stena Bulk chartered out at levels that will trigger a potential profit share? We can say that in general, the profit share arrangement that we have on the time charter is settled on a 6- months basis. For the current period, this will be in June and hopefully have this ready for the Q2 reporting. We will see. Six months is a long time. Currently some of the ships are trading very well. Some have been severely lower during the Q1. It's a bit early to say what kind of levels we will see at the end of Q2. I think we'll have to leave it there. With that, we hand it over to the operator and see if there are any other questions. Thank you. If you wish to ask a question, please dial zero one on your telephone keypad now to enter the queue. There'll be a brief pause now whilst we register any question. Okay. Currently, there seems to be no questions from the phone lines at this time. Okay. With that, we would like to thank you all and welcome you back for the Q2 in August the seventeenth. Stay safe, take care. Very good. Bye-bye. Bye-bye.