StealthGas Q2 2009 Earnings Transcript

Aug.20.09 | About: StealthGas, Inc. (GASS)

StealthGas Inc. (NASDAQ:GASS)

Q2 2009 Earnings Call

August 20, 2009 11:00 AM ET

Executives

Harry N. Vafias - President and Chief Executive Officer

Andrew J. Simmons - Chief Financial Officer

Analysts

Natasha Boyden - Cantor Fitzgerald

Daniel Burke - Johnson Rice

Matt Beatty - Morgan Keegan

Jeff Geygan - Milwaukee Private Wealth Management

Ross DeMont - Midwood Capital

Operator

Good day and welcome to the StealthGas Inc. Second Quarter and First Six Months 2009 Results Conference Call. For your information today's conference is being recorded. At this time I would like to turn the conference over to your host today Mr. Harry Vafias, President and Chief Executive Officer. Please go ahead.

Harry N. Vafias

Thank you and good morning everyone. Welcome to our conference call and webcast to discuss the results for second quarter and six months ended June, 30, 09. I'm Harry Vafias, CEO of StealthGas and I would like to remind you please that we would be discussing forward-looking statements in today's conference call and presentation.

Regarding the Safe Harbor language, I would like to refer you to slide number 1 of this presentation, as well as to our press release and our second quarter and half year '09 results. With me today is Andrew Simmons, our CFO. If you need any further information on this conference call or the presentation, please contact Andrew or myself.

So let's start from the slide number 2. We continue with our business strategy despite the uncertainties presented by the world economy today and I would like to highlight how we continue with each implementation in the second quarter and the first half of '09 and later describe the outlook for the remainder of this year.

Our primary objective continues to run highly efficient and modern fleet on secure and primary contracts with first class charters that serves a very specific niche market that has no correlation whatsoever to most of our shipping sectors, many of which as you know well continue to experience significant downturns in both Charter 11 in particular through values.

Following the sale of the Gas Sophie on June 10 and the delivery of Gas Exelero on June 30th, our fleet numbered 42 vessels, 1400 size gas values and 2 million range product tankers.

Looking at the remainder of '09, -- a brand new M.R. product tanker joined our fleet on July 14th. It was immediately closed on the fleet year before charter. A similar vessel on is contracted for delivery on November this year and Courchevel will be really to close under three year double charter thus continuing our conservative portion regarding employment profile of our fleet.

Following the deliveries of these vessels have no further strategic deliveries of the ships until the first quarter of '11, and that was discussed in our press release that about 11 million of state payments due during 2010. We expect the cost of these financial from our internally generated cash flows.

We have showed to maintain another level of time, despite the near side increase in the size of the company's fleet, since October '05. After taking into consideration, the total fleet of 42 ships at the end of the second quarter '09, our net debt conversion ratio stood at 44.4%, which now impact in this changing times, capitalize our employment, charter our profile and -- charges should continue to work under team under team underlying financial utility of the company.

Our third objective has been to secure and maintain a visible revenue steam with statement and particularly cash flows and that continue to pursue a prudent growth strategy. At the moment, employment for our fleets for the remainder of '09 currently stands at 71% of the base, with about 40% over the covers for 2010 and nearly 20% fixed already for 2011.

As you will see from my results from Q2 '09, our time charter equivalent rate was $6638 per vessel per day compared to 7,909 in the corresponding quarter last year. We represented a decline of 16% thus reemphasizing the bond monitored slowly driving softer spot market trading. We have also again included in the adjusted time charter equivalent on the blended basis in our slide presentation for both the LPG vessels and the tankers as none of our vessels were on a double charter.

This not only gives you a more realistic figure in terms of the average time chart equivalent, but we have also adjusted the vessel upgrading expense line later in the presentation as its throughout this possible for the updating expenses although the vessels in our fleet.

On this basis of daily time charter was $7857 in fiscal '09 against 9304 for the same time last year, a reduction of $1447 per day or 15%, which are on the lines in terms of what we have faced in second quarter that predicted we would when we lost this traffic combined performance from May of this year.

However, despite these lower income levels, I'm very pleased to report that we remain quite profitable and as we will discuss in detail later on profitably above our net income break-even level.

We currently have investors in our fleet on bareboat charters which are the more secure in terms of operational risk, plus we're protected from such expenses as bankrupt borne insurance cost. Although it's no longer expenses of for the bareboat charters account.

Our fourth cost has been drawn in operating modern fleet of Gas carriers and in this respect, our average age is 10.8 years, not including the four tankers and our 5 brand new (inaudible) we have contracted for quarter between February 11 and May 2, 2009. In that comparison, industry average of about 20 years.

Its our compete belief that charters will increasingly look for modern and efficient tonnage through our modern fleet relative to the industry is my opinion important as we move forward in this uncertain period, we are operating in.

Our fifth objective has been to maintain close customer relations. The quality of our customer relations are exemplified by continued and consistently high utilization and the quality of our charters which also lowers our counter party risk.

I'm pleased to say that the day we continue not to have any issues in terms of charters performance and as you can see from our balance sheet we have very own true off credentials of the small amount of charters, breaking cash deposits or bank guarantees which secure the charters hires.

Our sixth goal has been to maintain cost-efficient operation. I am pleased to report yet another good performance in Q2 '09. Our net income breakeven level decrease by $296 a day to $5,557 per day compared to 5,853 in the same period of '08, at the reduce a critical performance in terms of managing our cost base has gone somewhat of deserving of the ability of the company to time.

Seen not as surprisingly income levels have not shifts, coming under some pressure. The closing -- cost effective management of our vessel continues to be a vital important area of operation of our company, given the relatively narrow margins which these vessels produce.

As I believe, we have again demonstrated in the second quarter of this year. Cost pressures as we have discussed in previous calls, especially to the crude cost in we have an ability to continue to be a factor but our proven policy of operating our relatively high numbers vessels of bareboat continues to some extent in this regard other cost have borne by the charter. Based on the knowledge that the crude and the availability of well trained crew for us specific tide, vessels will continue to be a challenge going forward.

Slide number 3. The slide demonstrates the development of our fleet. By the end of the first quarter '09, we had the fleet of 40 Gas Carriers and two product tankers, continuing our number one position in the space and product tanker sector. Now, at the end of '09 and that was time we started during 2010, our LPG fleet will remain at the same level for the vessel figure we previously discussed with the loan for new grand new product ventures.

Following this in '09, I want to confirm again apart from some 11 million of state payment due to the yard, constructing the five LPG ships, -- we have no capital commitments only to raise new finance and in the first quarter of '11 when they commence their deliveries, unless of course we sell a few of our older LPG vessels and thus we take the first earning to finance the call.

StealthGas continues to solidify its number one ranking in owned vessels in the 3000 to 8000 CBM segment upon which we are concentrating.

We continue to focus primarily on this segment because of the chunk of charters capital with a relatively stable rate that we will show later but we are at continuing to obtain even in this difficult period and the favorable order book and safe gross compared to the average size segments in the LPG segments and indeed many of the other sectors of shipping.

We currently have a market share of about 15% and after the acquisitions, we expect our market to increase it about 18% further enhancing our ever growing position of some influence within the market. Also we believe that our moving through the product trying to set the improved volume in turn to be well timed and to have continue that policy of deploying the vessels in secure, maybe it's a long time, bareboat charters, we have all four of these vessels. Once, the loss of deliberate vessel in deployed on maintenance long term bareboat charters to well known names.

Slide number 4. This slide demonstrates our fleet deployment profile and provides you with the earnings visibility freight over 43 current ships and the one tanker contracted to join the fleet in November '09.

At the bottom of the employment profile chart, we have included the percentage of days fixed. Using the exercise of stability and to the ability of our earnings, as you can see 71% of bareboat charters are already fixed for the remainder of '09, 40% for 2010 and about 20% for 2011.

In recent weeks, we've seen some positive signs in the charters market, but I am cautious and calling any return is yet to the levels of pure deployment that we saw earlier in the early years of the company's trading. We now turn to the financial highlights of the first quarter '09. So passing it on to our CFO, Mr. Andrew Simmons.

Andrew J. Simmons

Thank you, Harry and good morning everybody. We now please turn to slide number 5. The financial highlights of the second quarter of 2009.

With an average of 41.6 vessels owned, we realized net income -- net of 800,000 loss on the sales of Gas Sophie, $7.3 million on voyage revenues of 27.1 million, EBITDA of $14.6 million again excluding the loss the sale of Gas Sophie.

For the second quarter 2009, we reported a profit 2.7 million interest rates local currency hedging arrangements which included an unrealized non-cash profit of approximately $3.2 million and a realized cash lost of approximately $0.5 million.

For the non-cash provision, approximately $200,000 to restrictedstock portion of deferred stock based compensation.

Net income was $6.5 million or $0.29 per share, including the 300,000 loss on the sale of the Gas Sophie.

Our earnings per share for the second quarter 2009 excluding non-cash items and a loss attributable due to the sale of the vessel was $0.18 per share, calculated on 22 million average shares outstanding. Our net debt capitalization stood at 44.4% at the end of Q2 09, and we continue to believe in maintaining our leverage at moderate levels are and important as in generally it compares to regional majority of shipping companies.

We now turn to slide number 6. This slide provides you with an overview of the development of our income statements for five consecutive quarters and comparing our results from the second quarter of 2008 to the second quarter of '09, revenues have declined by 4.9%, EBITDA decline by 12.5% if we exclude the loss of the sales Gas Sophie.

Our EPS excluding non-cash items and the sale of the vessel was $0.29 per share or $0.18 per share if these items are included. Although we're always disappointed to announce lower profits, we will be taking into account for prevailing market conditions, the performance of the company in Q2 was quite creditable.

Also in looking at this slide we'd again point to relative steadiness of our business which coupled with our prudent financial structure that we will discuss later, we are now opinion to benefit the company as Sophie worldwide economic conditions begin to improve with some commentators suggesting they may.

We now turn to slide number 7 these are operating highlights for four prior quarters second quarter this year plus our half year figures. It was a provided comparison for the fiscal year 2008. In terms of fleet numbers in the second quarter '09 we owned and operated an average number of 41.6 vessels.

Total charters days for fleet during the second quarter of '09 were 3022 and we also have 743 total stop market days. This was as mentioned earlier by Harry as a significant increase of just 77 spot days in the same quarter last year.

In terms of average data results for vessel for the second quarter of '09, we achieved a time charter equivalent to $7,857 per day per vessel on the adjusted basis compared to $8,821 per day per vessel in Q1 '09.

Total operating expenses per day on a adjusted basis i.e. vessels on bareboat charters was $3,868 a day compared to $3,786 in Q1 of this year. And we continue to be relatively pleased with this performance and the day-to-day running has been expensive, particularly as we had crew pay increases in both September last year and April this year and the in light of the measures we indicated have even more stringent management on cost is assisting us to a degree in our ongoing performance.

Turning now to slide number 8 and 9, the financial highlights for the first half of '09 with an average of 41.2 vessels owned and operated in this period, we realized net income net of the $800,000 loss in the Gas Sophie of 7.5 million, on voyage revenues of 56.3 million and produced EBITDA of 23.2 million.

For the first half of 2009, we reported a non-cash loss of $3 million on interest rate swap and currency hedging arrangement and a realized cash loss of 1.6 million on interest rate swap arrangements.

Tougher non-cash provision of approximately $300,000 for restricted stock portion of deferred stock based compensation. Excluding non-cash items, net income was $10 million or $0.45 per share. Our earnings per share for the first half of 2009, excluding non-cash items and the loss of the vessel was $0.49 per share calculated on 22.2 million shares average outstanding.

Our net debt to market value of our existing fleet at the end of the first half of this year stood at 52.9% which we believe is among the lowest of the U.S shipping companies and underlines in our opinion operating stock price continues, as we discussed previously that markets continue to undervalue the company.

We now turn to slide number 10. As we've already discussed, we continue to strive to run our fleet in a very cost effective manner concentrating extremely hard on operating our ship efficiently and safely. We are pleased that operating expenses in Q2 of 09 were virtually the same as that of 2008 while we expect our local operating cost to rise in remainder 2009, its still remains a challenge. We're hopeful with the rate of increase in operating cost, we'll moderate as the year progresses.

So on a our cash flow basis our daily breakeven per vessel in second quarter 2009 was $5,512 per day if we deduct the realized loss on derivatives compared to 5,415 in Q1 of 09 which is encouraging from a cost standpoint.

So we turn back to slide number seven is that our total operating expenses are lower in the first six months of 2009 compared to the average for fiscal 2008. On net income basis, our daily breakeven posses of vessel net realize costs on derivatives for $5,507 per day in Q2 of '09 compared to 5,558 per day for the first quarter this year.

Therefore, unchanged which gained underlying the attention of management attached to this area and this performance was all to pass to some of the decline in the income level of the fleet.

We now turn to the slide number 11. This slide is our financial calculator. The slide provides with you a revenues we have already secured as of today till the end of 2009 based on contracted revenues under time and bareboat charters. Several contracted revenues were 103.3 million which is 92% of total 2008 revenues plus we have the variable in revenues we generated by those of our vessels of day that are not yet contracted full for the remainder of this year and that number is 2,527 days as the fleet currently stands.

So you can input the rate you wish to assume our average vessel not yet chartered you for the remainder of 2009 and you can calculate after the technical performance for the remainder of this year. Thank you very much for your kind attention and I will now hand you back to Harry for some further comments.

Harry N. Vafias

Let's move to slide 12. This slide shows the relevant seg markets over the past seven years for the medium size and the larger size Gas Carriers. In comparison med size and smaller semi-LPG vessels are from expense from much lower volatility and until recently set the growth in sales earnings from middle 500's.

Its clear from this data that our vessels ship form from the core of our business and that as far remote from dry vessel that container from over the past seven years has not experienced, overall fluctuations in rates but these are the shipping sectors in passing and we are hopeful despite the whole economic outlook that this relatively non-volatile study pattern discontinue to remain intact.

As I believe, we have proven to date despite the prevailing economic conditions through our reported revenues for the first half of this year. We sponge ourself for further insight by slide 15. EBITDA until now or chose one year equivalent issues in the year 2000 became the drive sectors into 3,500 should be end of Gas Carriers and 3200 semi-vessel vessels, which are difficult of the majority our fleet.

As you can see, based on the mean average for these sectors of this quite extended period, the level of volatility still higher in the dry and much spaces on in our core sector.

We continue to expect that the supply of product will increase in the next two to three years, plus demands are expected to continue to be steady particularly in the Far-East and developing well therefore we continue to believe that the outlook for our core market is encouraging and vessels continue to be contracted development in through 2011 and 2012 or is expected -- outlook as it materializes.

Slide 14. This slide indicates the freight rate of the vessels for our markets. The figures are based on independent estimates by Lorentzen & Stemoco. As you can see highlighted in yellow this segment continues to be as we have just discussed characterized by our relative stability and rates have been reasonably steady over the past two quarters and the independent forecast for the third quarter '09 is a drop by only 4% or 3,5000 segment and we drop by about 5% to 6% from the current levels in the 3000 to 100 semi-med tend to Gas carriers out on vessels for more industrial type usage.

Projected reductions which grew unwelcome to not nearly follows a loss making situation.

Slide 15. We continue to believe that the forecast of minimum fleet growth -- sector in the year 2010 and the negative fleet growth in '11 at the time when several scale large natural gas projects commencing, it is a defining positive outlook for our core sector.

There is an expectation of the supply over the due product and must be sure that this span will increase.

We continue to believe that this supply demand action is very encouraging for our company and its virtually unique situation within the shipping industry. But at least herein the condition's being faced by many of our -- other sectors in shipping today. Despite this product value (ph) we will not however expand our fleet further except when we're already contracting new buildings for delivery in '11 and '12.

I'll now turn to slide 16. We included this slide for the first time last quarter taking an example of different types of shipping companies making a comparison of good price to asset value compared to ours. We have now also included a comparison of tax earnings ratios the third.

As you can see from the slide based up on that analysis released last night, we continue to present a very attractive prospect for investors one benchmark against these companies. It would not benefit from the sectors that we have been discussing.

I believe that we can take another round in some logistics, a combination you could see a similar picture on a comparative basis. So in my view on this basis at least plus as highlighted earlier, our comparatively low debt to market value would continue not to be valued at the market and StealthGas in my view is an attractive company to invest in based upon these valuations and the outline we have discussed here today.

We have now actually reached the end of our presentation and we would like to open the floor for questions. So operator please open the floor. Thank you.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Our first question comes from Natasha Boyden from Cantor Fitzgerald. Please go ahead.

Natasha Boyden - Cantor Fitzgerald

Thank you, operator good morning Harry and I Andrew, how are you?

Andrew Simmons

Morning.

Harry Vafias

Hello.

Natasha Boyden - Cantor Fitzgerald

You mentioned in your release asset values of held up of veteran in the gas carry market and certainly another shipping sectors, can you provide any detail or perhaps the percentage regarding how asset values have declined or held up in your sector? And then secondly over the last couple of calls certainly Harry I think you pointed out that S&P activity has been slim to none, has that picked up at all or you still (inaudible)?

Harry Vafias

On your first question I don't need to comment. You saw the sale of the Gas Sophie, the decline usage in 10%. Well as better than me that the tank is the big ones especially and big bulk carriers, the decline has been close to 50%. So I think we lag in that point. On the second question you said these lack of activity of what?

Natasha Boyden - Cantor Fitzgerald

S&P activities, selling and purchase in the LPG carrier market, I mean that something I think you said over the last couple of quarters. I just really want to find out whether or not that was still the case or you've seen any pick up there?

Harry Vafias

That's still the case because we have discussed many times the banks are not giving any money, just the small buyers that want to buy such thing and think that the prices are attractive, basically cannot. So there is very few S&Ps been done and obviously we are always ready to sell some of the older vessels if we can of course get a reasonable price.

Natasha Boyden - Cantor Fitzgerald

Okay. I guess that leads me to trying get a handle on what is especially going forward, do you think asset values have declined enough? Are you are going to focus cash flow generation and de-leveraging? Again I think we've spoken before potentially doing share repurchases.

Harry Vafias

The subject has not changed. That we do not do any acquisitions of any type of ships and as discussed before if we can sell some of the older vessels and keep the cash for emergency purposes or if the values decline further then maybe we can use this cash or otherwise we use it to pay down debt

Natasha Boyden - Cantor Fitzgerald

Okay. And then lastly, just going to a new build, are they set to be delivered on time or is there a possibility of any delays at all?

Harry Vafias

Unfortunately for us the Japanese shipyards not only deliver in time but actually deliver ahead of schedule.

Natasha Boyden - Cantor Fitzgerald

Okay. All right well, thank you very much.

Harry Vafias

Thank you.

Operator

(Operator Instructions) We have our next question from Daniel Burke from Johnson Rice. Please go ahead.

Daniel Burke - Johnson Rice

Good afternoon guys.

Harry Vafias

Hello Daniel.

Daniel Burke - Johnson Rice

Harry, I wanted to ask you a question about China. China has imported record amounts of oil and iron ore in recent months. Can you talk to us about how you see China's role evolving in the LPG market. I guess the fact that their refining throughput’s have been rising, its probably prevented LPG imports from increasing markedly?

Harry Vafias

That is true. We have not seen of increase a huge increase of LPG imports in China. Don't forget that the Chinese are slowly, slowly building their own fleets and that applies mostly for tankers and carriers but we have also seen slowly, slowly then all during smaller gas time and buying from gas carriers not now but six, nine months ago.

And we believe that China is a major market, that's why we have quite a few vessels working specifically in China, only in China under local capital trades with Chinese flags. We think there's an appetite for them to take more but obviously, we don't expect huge numbers and we would be surprised if suddenly they come out and we see big orders for ships and of course huge imports of LPG. Then forget that also slowly increasing their exposure and their interest in natural gas and obviously, natural gas is a competitor of ours.

Daniel Burke - Johnson Rice

Fair enough, and then a question on the chartering side. Looks like the customer did elect to take the cancellation options that you previously disclosed existed on the Natalie and -- The Emperor also had a cancellation opportunity. Does the operator decide to extend or is that still outstanding?

Harry Vafias

Whatever options existed in our charted partners have been announced as we always do. We have not announced something else therefore the other ships remains as per the table in the slides.

Daniel Burke - Johnson Rice

Okay and you don't have any further table disclosures. You don't have any other ships facing early auction periods?

Harry Vafias

Whatever as you know these decisions whatever exist are not up to us, they are up to the charters, where there were early cancellation options, don't forget we have the cash bonus in the company had to pay the cash bonus to us. Therefore it's not the charter party. Because they're paying to us on every single ship that they returned only.

Daniel Burke - Johnson Rice

Fair enough. And then the last question I had was just on voyage expenses, not surprisingly that those are higher given the increase in the spot days of course. But I guess bunker prices were also rising sharply through the Q2 period. Did that in and of itself have an adverse impact on you relative to operating your vessels in the spot market here in Q3, where bunker and oil prices have been a little, I guess a little more flat than they were in the second quarter?

Harry Vafias

Don't forget that these are merely the ships with very little fuel consumptions and generally do small voyages. That's of course, bunkers affected like they effect all the companies but I would guess in a much, much more degree than for example a container ship that burns 5 times what our ship burns burns or a big tanker. But obviously as a most part of you, and you bank purchase go up and we do voyages. We have to buy the bunkers ourselves and that's an extra expense.

Daniel Burke - Johnson Rice

Okay, great. Thanks for your answers.

Harry Vafias

Thank you.

Operator

Our every question comes from Matt Beatty from Morgan Keegan. Please go ahead.

Matt Beatty - Morgan Keegan

Hello, everyone.

Andrew Simmons

Good morning.

Matt Beatty - Morgan Keegan

Harry, seems like the last quarter or two you seem to be in indifferent between spot rate in term and now its looks like in the press release you might be more leaning forwards term. Can you talk about the expectations for your spot rate trend in the next 6-12 months?

Harry Vafias

Before I took the company public, I was always a middle guy. That's why both our private fleets and public fleets are fixed on period. I was not indifferent, I was saying that if we don't see a reasonable number for sufficient period. Then we will play the as ship spot for a couple of months until the autumn comes which hopefully not only the rates will be slightly firmer but there will be more takers for the ships. Generally speaking, we never like spot trading. We are not gamblers. Since day one, we have minimum 75% of the fleeton period, I regained bareboat charters and we are glad to share in the period years we have closed rate to 80 or 90% which was above our initial target.

And the target remains the same. Obviously we don't control the market. We are in the worse market in the last decade and we are very, very happy that we are still quite profitable and we still have lots of long charters attached to the majority of the fleet. Obviously, now we have lower ideas and we are a bit softer now in negotiations as everyone is I guess. So it all depends to see how September starts and if there is more interest and our expectations for a cold winter.

Matt Beatty - Morgan Keegan

Okay. Andrew this one is probably for you. Can you talk about the dry docking schedule also for the next to 6 to 12 months and any guidance on expenses there?

Andrew Simmons

Yeah on the financial, on the slide, there's a figure for dry docking for this year which I think from memory is 1.3 million. And we've already spent some of that in the first half of this year. We spent about 266,000 of that in the first half this year. So it's about 1 million to 1.1 million to go and then for next year we have about $3.4 million of dry docking expenses. Sort modeled in but we have in the past managed to obviously bring those in under that level?

That's the level which we are currently mobile in at the moment.

Matt Beatty - Morgan Keegan

Okay, thanks guys.

Harry Vafias

Thank you.

Operator

Our next question comes from Jeff Geygan from Milwaukee Private Wealth Management. Please go ahead.

Jeff Geygan - Milwaukee Private Wealth Management

Thank you, good morning and congratulations on what I think is really a commendable performance in the very challenging time.

Andrew Simmons

Thank you very much.

Jeff Geygan - Milwaukee Private Wealth Management

The question that I would have and Andrew this may be best for you regarding the five vessels that you anticipate delivery in 2011 and 12, if market conditions should fail to improve between now and then what type of alternative or contingent plan would you have with respect to taking delivery and financing those vessels?

Harry Vafias

I'll answer that. First of all, we have a very good relation with we've built launch of vessels. We are the number one customer, the largest customer by the number of ships built. If this unfortunate situation which you describe takes place which means that the market is as bad as it is now for another three years, close to three years then we have quite a few options actually.

One option is to try to delay further the delivery as we have already done so. That's option number one. Option number two is try to cancel one or two ships. Of course it's going to be a penalty. But that we have weigh the pros and cons of that. Another option would be to may be a portion of the money over to the yard being paid in shares instead of cash.

Another option would be to sell more ships than we would sold from our second hand fleet to finance these ships either ones are still disappeared. This comes to my head at this moment.

Jeff Geygan - Milwaukee Private Wealth Management

Regarding option number two. You described how far in advance would you need to notify the ship yard that you want to no longer accept those ships assuming that they start building them in months or years in advance.

Harry Vafias

The ships are build one year in advance. So we have time to go at number one and number two there is no way that yards will accept to cancel the vessels unless of course you are bankrupt. Therefore obviously what you try to do is try to postpone the delivery, not cancelled, postpone the deliveries or let say cancel the first three vessels and may be cancel the last one or something like that.

Jeff Geygan - Milwaukee Private Wealth Management

All right. Thanks. I appreciate it.

Harry Vafias

Thank you.

Operator

(Operator Instructions). Our next question comes from Ross DeMont from Midwood. Please go ahead.

Ross DeMont - Midwood Capital

Hi guys. Harry, a couple of quick questions, did you recently restructure some of your ownership or holdings in the company or did I misread the filings?

Harry Vafias

It depends what you mean by restructure, I didn't restructure anything. I have not sold a single share since the IPO.

Ross DeMont - Midwood Capital

Okay.

Harry Vafias

I just wanted to give few shares to a family friend that has helped my grandfather 50 years ago and I thought that now is the right time to do it. And therefore I donated shares to him and that was it.

Ross DeMont - Midwood Capital

Okay, that must have been what I read. And on the dividends, once you guys get through your capital commitments this year I know it kind of a bit of a tougher year, I mean when do you think it's appropriate to, I know you consider it every quarter but to put the dividend back in place.

Harry Vafias

The dividend will be put back Obviously when the banks are back in business and when the freight market is slightly in better shape than it is today.

Ross DeMont - Midwood Capital

Okay, thanks, that's all I have

Unidentified Analyst

Thank you.

Operator

(Operator Instructions). As there are no further questions I would like to turn the call back over to your host today for any additional or closing remarks.

Harry Vafias

Thank you, I'd like to thank everyone for joining us today for our conference call for half '09 results. We look forward to having you with us again at our next conference call for our third quarter '09 results.

I hope to see the majority of you in our next informational which probably is going to take place in October. Thank you.

Operator

That will conclude today's conference call. Thank you for your participation ladies and gentlemen. You may now disconnect.

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