Capital Product Partners LP (NASDAQ:CPLP) Q1 2020 Earnings Conference Call May 6, 2020 10:00 AM ET
Gerasimos Kalogiratos - CEO
Conference Call Participants
Randall Giveans - Jefferies
Liam Burke - B. Riley FBR, Inc.
J. Mintzmyer - Value Investor
Thank you for standing by, and welcome to the Capital Product Partners' First Quarter 2020 Financial Results Conference Call. We have with us Mr. Jerry Kalogiratos, Chief Executive Officer of the company. [Operator Instructions]. I must advise you, the conference is being recorded today, the 6th of May 2020.
The statements in today's conference call that are not historical facts, including, among other things, the expected financial performance of CPLP's business, CPLP's ability to pursue growth opportunities, CPLP's expectations or objectives regarding future distribution and market and charter rate expectations and in particular, the effects of COVID-19 on the market and on the financial condition and operations of CPLP and the container industry in general may be forward-looking statements, as such are defined in Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties that could cause our stated or forecasted results to be materially different from those anticipated. Unless required by law, we expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations to conform to actual results or otherwise. We assume no responsibility for the accuracy and completeness of the forward-looking statements. We make no prediction or statement about the performance of our common units.
I would now like to hand over to your speaker today, Mr. Kalogiratos. Please go ahead, sir.
Thank you, Summer, and thank you all for joining us today. As a reminder, we will be referring to the supporting slides available on our website as we go through today's presentation. As previously announced, we concluded on March 27, 2019, the spin-off of the partnership's tanker fleet and subsequent merger with DSS Holdings, forming Diamond S Shipping. Accordingly, we'll present our financial results for the first quarter 2020 as well as comparative periods on a continuing operations basis, except where reference is made to discontinued operations.
The partnership's net income from continuing operations for the first quarter was $6.7 million compared with a net income from continuing operations of $7.2 million for the first quarter of 2019. Our Board of Directors declared a cash distribution of $0.35 per common unit for the first quarter of 2020. The first quarter cash distribution will be paid on May 15 to common unitholders of record on May 9. As previously announced, we completed in the first quarter 2020 the acquisition of the 3 10,000 TEU containers with long-term charters to Hapag-Lloyd. Moreover, during the quarter, we retrofitted 2 more of our vessels with scrubbers, successfully completing our scrubber installation program. Upon completion of the installation of the scrubber and ballast water treatment systems as well as passing its special survey via Archimidis, our 8,000 TEU containership delivered to MSC to resume its long-term employment at an increased rate. As a result, the partnership's charter coverage for the remainder of 2020 and for 2021 stands at 90% and 73%, respectively, and correspondingly, the partnership's remaining charter durations stood at the end of the first quarter at 4.4 years.
Turning to Slide 3. The revenues for the quarter were $33.7 million compared to $26.8 million during the first quarter of 2019. The increase in revenue is attributable to the increase in the size of our fleet following the acquisition of the 3 10,000 TEU containers early in the first quarter of 2020 and the increase in the average charter rates earned by certain of our vessels. The increase in revenue was partly offset by the off-hire period incurred by certain of our vessels in connection with the installation of scrubber systems and passing of their special survey during the first quarter of 2020.
Total expense for the quarter were $22.5 million compared to $15.4 million in the first quarter of 2019. Total vessel operating expenses during the first quarter of 2020 amounted to $9.9 million compared to $6.6 million during the first quarter of 2019. The increase in operating expense was mainly due to costs incurred during the passing of special survey of 3 of our ships during the quarter and the increase in the size of our fleet. Total expenses for the quarter also includes vessel depreciation and amortization of $9.6 million compared to $7.2 million in the first quarter of 2019. The increase was mainly attributable to the increase in the size of our fleet and completion of the special surveys and installation of scrubber systems on 7 of our vessels during the second half of 2019 and the first quarter of 2020.
General and administrative expenses for the first quarter of 2020 amounted to $1.8 million as compared to $1 million in the first quarter of 2019. The increase is mainly attributable to noncash items associated with the partnership's equity incentive plan. The partnership has recorded net income from continuing operations of $6.7 million compared with a net income from continuing operations of $7.2 million for the first quarter of 2019.
On Slide 4, you can see the details of our operating surplus calculations and determine the distributions to our unitholders compared to the previous quarter. Operating surplus is a non-GAAP financial measure, which is defined fully in our press release. We have generated approximately $21.1 million in cash from operations for the quarter before accounting for the capital reserve. We allocated $10.2 million to the capital reserve compared to $7.7 million in the previous quarter, reflecting the increase in debt amortization costs associated with the acquisition of the 3 10,000 TEU container vessels. After adjusting for the capital reserve, the adjusted operating surplus amounted to $10.9 million, which translates into approximately 1.6x common unit distribution coverages.
On Slide 5, you can see the details of our balance sheet. As of the end of the first quarter, the partner's capital amounted to $407.3 million, an increase of $0.6 million compared to $406.7 million as of year-end 2019. The increase reflects net income for the first quarter 2020 and the amortization associated with the equity incentive plan, partly offset by distributions declared and paid during the first quarter of 2020 in the total amount of $6.6 million.
Total debt increased by $107.8 million to $370.2 million compared to $262.4 million as of the end of 2019. The increase is attributable to the term loan entered with Hamburg Commercial Bank and the sale and leaseback transaction entered into with CMB Financial Leasing in connection with the acquisition of the 3 10,000 TEU containers in January 2020, partially offset by scheduled principal payments during the period.
Total cash as of the end of the quarter amounted $23.3 million, including restricted cash of $7 million.
Turning to Slide 6. The COVID-19 pandemic has created unprecedented societal and economic disruption. While the full impact trajectory and duration of the pandemic remains uncertain, we have so far identified the following actual or potential adverse effects to the partnership. Firstly, a direct impact of the COVID-19 outbreak in China were the delays in excess of 35 days on average and the increased costs associated with the two vessels that had scrubbers retrofitted during the first quarter of 2020.
We have, however, completed both scrubber retrofit successfully, and both vessels have resumed their respective employment. While the off-hire period for the Hyundai Platinum was capped at 12 days, the Archimidis went off-hire from January 4 to April 12, which adversely affected our revenue generation for the quarter as we were expecting under normal circumstances a shorter stay in the yard. In addition, as a result of the prolonged stay for both vessels in their respective shipyards and broken logistics chains as well as travel restrictions for attending engineers, we incurred increased costs for passing the special surveys of these vessels, which have adversely affected our operating expenses. It's important to highlight here that the partnership does not have any remaining scrubber retrofit commitments at the moment.
Average installation and scrubber equipment costs across the 7 vessels were slightly in excess of $4 million, with approximately 63 days of idle time with 4 or 5 vessels on charter to HMM was capped at 12 off-hire days.
Moving on, another related matter to the outbreak of COVID-19 in China was a delay in completing the refinancing of our 3 9,000 TEU container vessels. We have been in close contact with ICBC, the leasing institution involved in this refinancing, and we would now expect to close the transaction within May 2020, with the only amendment being an increase of restricted cash by approximately $5 million -- $5.1 million until long-term employment has been found for the first vessel. It is important to stress here that this refinancing has numerous benefits for the partnership as it will increase our liquidity by approximately $38.8 million, reduce the pro rata debt amortization for these 3 vessels by $3.4 million per year, while the interest margin of this lease is 65 basis points lower than the existing loan agreement for these vessels.
As we will discuss later on in the industry section, the COVID-19 pandemic has had and continues to have an adverse effect on logistics chains, consumer demand, economic activity and global GDP growth. As a result, we expect that we will see a material reduction in container charter rates across the spectrum, at least in the short term. As there is a high degree of uncertainty with regard to the duration for which social distancing measures will need to be in place across the globe, it's very difficult to predict the actual impact of COVID-19 on demand for container vessels and hence, chartering rates. However, due to CPLP's conservative business model, with 90% of available days fixed for 2020 and approximately 73% next year, we have limited exposure in the short to medium term to the container charter market.
On a related matter, if the industry experience a prolonged slump in charter rates and/or limited availability of shipping finance and a decreased cost, we may also see in the medium to long term weaker second-hand and new building asset values. I would like to stress that the partnership's balance sheet is solid with our net charter free LTV as defined in our loan agreement standing at less than 47% at the end of the first quarter of 2020. This effectively means that we have material headroom in our balance sheet. Moreover, the incremental liquidity we expect to generate from the refinancing will allow us to further fortify our balance sheet as well as take advantage of any opportunities that may arise. Last but not least, the very important aspect of COVID-19 has been its impact on our crews and personnel. Our ship managers have moved early to implement a comprehensive policy with regard to the pandemic, providing guidelines to our vessels on a number of issues, including proactive measures such as suspension of crew changes on all vessels and motivation for crews to remain on board, continued sharing of information with crews on all relevant precautions through circulars, medical and mental health support 24/7, introduction of COVID-19 clauses in charter parties, COVID-19 risk assessment prior to entering ports, restriction on visitors coming on board the vessels and the implementation of social distancing measures as well as working remotely for our managers, office staff and extended social distancing measures with rotating personnel even after local restrictions of movement have been lifted. Some of these measures, and in particular, the increased cost of crew members wages that we have -- that have completed their contract is expected to result in increased OpEx as long as worldwide travel restrictions remain in place. In addition, it is important to note that the longer travel restrictions remain in place, the higher the risk that we might face operational disruptions as we are unable to rotate crews, have service engineers attend their vessels or send critical spares as the need arises.
Moving to Slide 7. We are pleased that the Archimidis resumed on April 12 its long-term charter with MSC after successfully completing the installation of a scrubber and ballast water treatment systems and passing a special survey. The charter is set to expire at the earliest in February 2024. With regard to charter renewals, 4 of our ships will roll off their charters in the next 12 months. The first one being the CMA CGM Amazon, with CMA CGM has advised that they will redeliver to us around the 6th of June. Thereafter, she will pass her first special survey and should be available for new employment in late June to early July. As we move closer to the vessel stop in position, we will commence discussions with potential charters.
Given the current state of the market, the uncertainty around the COVID-19 impact and liners is focused on reducing capacity before they start considering future requirements, it is very difficult to assess today what the market rate would be for this vessel. However, our strategy to only leave the more modern vessels in our fleet with market exposure does pay off in this adverse environment. Our 9,000 TEU vessel series are eco wide beam vessels with higher reefer intake and an AMP system. And as such, are very popular with liners, even in an environment with low bunker costs. Hence, we expect that even in a weak market and as liner requirements emerge again going forward, these are the vessels that will be the first secure employment. After the Amazon comes our sole dry dock vessel, the Cape Agamemnon, which expect to be redelivered to us at the earliest at the end of June.
Thereafter, she will go into dry dock to pass its second special survey and install a ballast water treatment system. As such, we expect that she will be open for employment in mid-to-end July. Currently, the 1-year period market for capesize with these characteristics and delivery position should be in the region of low teens. Again, we shall discuss employment prospects a few weeks before delivery for this vessel and also remain opportunistic in terms of divestment. Our third charter renewal does not come up before September and the last one in January of next year, and both relate to our remaining 2 9,000 TEU container vessels. These target charter expirations should allow us to capture improved rates if the charter market recovers towards the end of the year into 2021. Generally speaking, if the offered rates for all these vessels that come up for employment renewal are substantially below historical averages, we shall endeavor to fix rather short term, that is 6 to 12 months at this stage, but always taking a balanced decision between duration and dayrates.
Importantly, after these four charter renewals, we do not have any other charter renewals until early 2024. At this point, I think it's important also to shortly discuss the potential impact of COVID-19 in our counterparties. It has been reported that so far, more than 400 deep sea sailings have been canceled while as we saw discussed in the industry section, analysts expected 2-digit container trade contraction for this year, followed by a strong but more limited return to growth in 2021, assuming a gradual resumption of normalized economic activity. Many liner companies have thus revisited their forward projections materially downwards and some have stopped providing forward guidance altogether due to the uncertainties surrounding the extent and duration of the COVID-19 adverse impact. A prolonged slump in charter rates and continued disruption to global logistics chain will surely put financial pressure on all liner companies.
So far, our counterparties have performed without problems or delays, and all our vessels are currently being employed in the trade. CMA CGM and HMM have openly discussed or announced measures to shore up their liquidity positions, while Hapag-Lloyd has one of the strongest balance sheets in the business. MSC is more packed with regard to its financial condition, but it continues to perform, and we have very recently seen them come to the market and pick up attractive tonnage cheaply. So all in all, we do not have, for the moment, any reason to believe that any of our counterparties will not be in a position to survive the current market conditions. Moreover, governments and central banks across a number of different countries have announced fiscal and monetary packages, which have been designed to support ailing companies from the COVID-19 impact. And liner companies could be potential beneficiaries of such funding. However, I would like to stress once again the uncertainty surrounding the impact of COVID-19 and the difficulty in making informed projections.
On Slide 8, we review the container market. Since the onset of COVID-19, an increasing number of governments globally have enforced self-isolation lockdown measures, the duration and severity of which remain uncertain. The pandemic, in particular, has led to disruption in consumer activity, which is the most important factor of container demand. The immediate consequence has been blanked sailings and service suspension, which have now reached all trade lanes. Due to the shock in economic activity and trade volumes, which is set to continue well into the second quarter, the base case projection for the container trade for 2020 has been revised to a 10.7% contraction.
On the positive side, analysts expect container demand to rebound strongly in 2021 with 9.3% growth, assuming a gradual but unhindered return of economic activity. Our expectation is that the Neo-Panamax container segment will be better insulated from the COVID-19 adverse effects compared to other sizes as there's a limited number of available ships from tramp owners. For the moment, operators are taking a wait-and-see attitude until the full scope of COVID-19 impact is understood, and their prime focus remains on own tonnage and long-term committed tonnage. As such, it is very difficult today to call the period market for our 9,000 TEU vessels as the market rebalances. But we expect that in the short to medium run, we will see substantially reduced charter rates compared to what we experienced at the beginning of the year.
Turning to Slide 9. There is potentially a silver lining when it comes to the impact of COVID-19 on container vessel supply. Notably, shipyard deliveries have been and continue to be affected by travel and labor disruption as well as equipment shortages. As a result, slippage and potential cancellations are expected to increase materially for this year, as shipyards delay new building deliveries and the owners will increasingly face difficulties taking delivery in this adverse environment. Meanwhile, contracting has been, in any case, minimum, with just 13 containers ordered year-to-date, and the container order book corresponding to 10.2% of the total fleet as of the end of the quarter has seen a slight decrease from the previous quarter. This is an important data point as unlike the previous container market saw that followed the 2009 financial crisis, the order book this time around is at historical lows potentially helping a swifter recovery as soon as demand growth is restored.
As a result of the increased redeliveries of vessels by liners, the idle fleet presently stands at 11% for the total fleet from 6% at the beginning of the year. This includes approximately 3% of container capacity in drydocks for scrubber installation. The recent drop, however, in oil prices and the reduction of the HSFO/VLSFO spread probably means that in the medium to long run, we will see fewer vessels being retrofitted with scrubbers and potentially some scrubber retrofit cancellations for the projects that are still in the early stages.
Moreover, scrap yards in the subcontinent remain close due to local restrictions. This is important as scrapping of vessels in this area is an important conduit for balancing the market. And as long as these restrictions remain in place, tonnage that have been otherwise removed from the market will continue to compete for business. As national quarantines are gradually lifted in the coming months, we expect to see an increased amount of vessels being scrapped.
Overall, analyst supply growth forecast for full year 2020 stands at 2.7% while provisional forecast for full year 2021 stand at 3%, but there are a number of factors that could still materially affect these projections.
I would like to conclude here by saying once again that the COVID-19 pandemic and its adverse impact on human life, economic activity and logistical chains is a unique and unprecedented event with continuously and rapidly changing effects across a number of fronts, including socioeconomic trends, trade patterns and the world economic outlook that are very hard to assess at this point in time. As discussed earlier on, in this environment, we have prioritized the health and safety of our crews as well as our onshore employees by implementing, together with our managers, comprehensive measures and policies with regard to COVID-19.
It's also clear that the container charter market has been adversely affected by the pandemic, but the extended duration of the impact is very difficult to predict at this stage. As we only have a limited amount of vessels coming off charter in the next 12 months and as they come off unemployment in a staggered manner, we should be in a position to capitalize from a potential gradual recovery going forward. In addition, our low leverage compared to our peers and the expected completion of the ICBC refinancing that is expected to generate additional liquidity should provide us with added flexibility in this environment. Once the uncertainty around the COVID-19 impact abates, we are looking forward to resuming growing the partnership and the partnership's long-term distributable cash flow.
And with that, I'm happy to answer any questions you may have.
[Operator Instructions]. We will now take our first question. Please go ahead. Your line is now open.
This is Randy Giveans at Jefferies. How's it going?
All right and well. How are you?
I'm all right. All right. I guess, first and kind of foremost, looking at the upcoming maturities for Amazon -- and Amazon and Uruguay for charter extensions, do you have a time line or kind of rate assumptions for what you think you'll be doing with this?
Yes, that's, I guess, the -- probably the most important question at this point. As I said in my prepared remarks, the problem, Randy, is that it is very difficult to see where the market is going at this point. I mean, if you look at the chart that we have included in our presentation with regard to where charter rates are at the moment that we got off from Clarksons, you'll see that they seem unchanged, right, still in the -- somewhere in the mid-30s. And that's because it's very difficult to understand where the market is today.
Earlier in this year, I think we were probably in the strongest market we have seen for 7 years. But I think the market changed dramatically in the course, really, of a couple of weeks as soon as Europe and U.S. went into a lockdown. I think before, as long as it was only a China issue, and it seemed that the outbreak will be contained there, there was less concern. But I think as soon as the rest of the world went to lockdown, then you see -- then that's when you saw operators taking emergency measures and started to rearrange their own tonnage and redeliver any surplus capacity that they can.
I think that these type of abrupt changes we have seen in the past. And by now, I think the liners have a number of tools at their disposal, such as slower speeds, more port calls, longer services. And of course, we will see increased scrapping once scrap yards are open. But I do think that when it comes to our ships, which are these modern 9,000 TEU eco ships with high reefer and intake, these tend to be scarce, in any case, they keep [indiscernible] from operators. So I think as soon as operators start to look at their requirements, and then there is potentially the expectation that they have been redelivering more tonnage than they actually should have, they will be probably the ships that they would look at first.
Now just to give you a sense of magnitude with regard to potential ranges for the rechartering of those ships, we can only be guided from history in a way. I mean the highest that we have seen is probably very recently around 12 months in excess of $40,000, and the low point was around $13,000, $14,000 just after the Hanjin bankruptcy. When Hanjin went bankrupt, they redelivered a number of similar ships just suddenly to the market. And then we saw rates plunge as demand was, at the time, quite weak and there was a lot of supply.
Having said that, what -- the other thing that we saw from the Hanjin bankruptcy is that charter rates for these vessels quickly recovered. I think, within 5 to 7 months, they were back in the very high 20s. So I assume that we will end up somewhere between the levels that I mentioned. I mean, this is going to be $15,000 or $20,000 or $25,000. At this point, it's very difficult to predict. You saw also that many liner companies all have difficulties making projections about the future. But as far as CPLP is concerned, I think as long as there is employment for the ships, we have very good staying power. Our cash breakeven across the fleet is around $18,000 per vessel, only, that's including debt service and SG&A.
And so even -- if you look at the vessels that we have fixed until 2024 and the capesize that should be relatively easy to fix, it's a liquid market. That would give you an average rate of around $29,000 to $30,000 per day for those 10 vessels. So the cash flow generation is quite strong. So assuming that we fix, let's say, this 9,000 TEU container vessels trading at, let's call it, let's say, $15,000, so the low end of what we have seen after the Hanjin bankruptcy, still we can deliver distribution coverage after capital reserves, well in excess of 1x, potentially closer at 1.5x. So while it is a very unfortunate turn of events, at the same time, I think the way that we have set up our business model, and it was a very conscious decision to put away, for example, our old 8,000 TEU ships on the long-term charter and leave market exposure with our 9,000 TEUs, and I think this protects us, to a very large extent, from the current market conditions and it underpins our distribution and distributable cash flow going forward.
Got it. Okay. And then looks like the Archimidis slipped about 12 days [indiscernible]
Randy, sorry, I couldn't hear you very well. If you -- Randy, if you could please repeat. It was a -- I can hardly hear you.
Yes. I was saying it looks like the Archimidis slipped about 12 days into the second quarter. Are there any other off-hire days this quarter and any scrubber-related CapEx that's been pushed into the second quarter?
No. The -- other than the 12 days of the Archimidis, there's no other scheduled off-hire days for the fleet. It depends a bit on when the Amazon will go into drydock. Potentially, if it's being redelivered around the 10th of June, it is fair to assume that she will go directly into drydock, and that will be 15 to then 20 days stay. So as far as the -- any CapEx is concerned, there might be some incremental CapEx from the scrubber installation of the Archimidis into the second quarter, but it's going to be a very small number, I expect.
Perfect. All right. And then just quickly, your common units, they're yielding 16%. So any thoughts on selling the Cape Agamemnon, and then you can repurchase up to, what, 10% of your outstanding units?
Look, I think at this point, not too long ago, the -- our yield was 26%. It has -- it is now, as you say, still disappointing, but we have come a long way. It's an extremely volatile market. Let's see where we land. I think at this point, it is important to maintain liquidity, and then we discuss capital allocation once we have more visibility. But I think it's the prudent thing to do at this point is to wait until we have more visibility into what we fix for our 9,000 TEU ships and the Cape Agamemnon, and we take it from there.
Now if there is a very good offer on the table and to sell the Cape, we would look at it. But I don't think it is on the cards today to -- or at least as long as these things going on to redeploy capital one way or another, bid to buy ships or to buy stock or increase the distribution.
And we will now take our next question. This comes from Liam Burke from B. Riley.
Liam Burke, B. Riley FBR. I know this is probably a longer-term understanding your priorities here, understanding the short-term -- or the near-term uncertainty in the open-endedness of the recovery of the liner trade. But when you're looking in the long term for CPLP, your acquisition strategy, is that the same once things get back to some semblance of normalcy?
Yes, absolutely. I don't think anything has changed. And the most important signal of that is that we paid our distribution. We delivered 1.6x coverage. As I said earlier on, even in this adverse environment, provided that there is a market, we should be able not only to sustain the distribution but continue to offer a very solid distribution coverage, maybe not the kind of coverage that we were expecting a few months back. But the business model is very much in place.
And what I'm trying to say is that it's good to maintain liquidity as long as certainty is place. Let us see where we are in the next quarter or 2. But as soon as we have that type of visibility, I think we will continue on the same path. That is to rebuild and grow CPLP by acquiring assets with medium- to long-term charters attached. Large containers, Neo-Panamaxes, we do believe is an interesting segment. As we have said in the past, you can find longer-term employment. They continue to be quite attractive to liners. And they would fit very nicely with our existing fleet.
Other type of assets, again, as long as the long-term charters are in place, we would look at those as well. But as I said, we are not rushing into any decisions with regard to capital allocation at this point.
And your next question comes from J. Mintzmyer from Value Investor.
Jerry, this is J. Mintzmyer with Value Investor's Edge. So I think Randy and Liam already asked some great questions about capital allocation. It sounds like we're not getting too many answers on those. When is -- when do you think we'll reassess that? Would that be maybe next quarter? Or do you think we might have to wait even until the end of the year for that sort of response?
I think it very much depends on the developments around COVID-19. I mean you have seen much larger companies than us stop providing forward guidance. So I think -- I mean, I'm sure you have come across interviews by heads of liner companies that they don't have -- that they clearly say they don't have visibility. So let us see where we are. And as I said, in a few months from now, I think it very much depends on how the current developments with regard to the easing of social restrictions is developing. So if this is a successful experiment and we don't see an uptick in COVID-19 issues and the resumption of economic activity, then I think or, of course, some sort of silver bullet like a vaccine or a medicine that would help everybody attain more visibility and resume economic activity. And hence, we will have also visibility with regard to our cash flows and the recharting of our ships. And then, of course, we can resume discussions. And once we can -- we have those data points and we can look at our share price, our distribution yield, what else we can do in terms of growth and we can discuss with our Board capital allocation. But I think at this point, the prudent thing to do is maintain liquidity and flexibility.
Yes, it certainly makes sense in this environment to try to stay as liquid as possible. It was good to see that the Korea Development Bank did provide a new credit line to Hyundai. So I think that's going to help you out at least on your charter side.
Just one little question on that for you. Earlier, 52-week lows this year hit the low 5s, right? So very depressed share price. Does it perhaps make some sense to have a share repurchase program out there, even if you're not necessarily ready to use it today, just in case those sort of market craziness got revisited, say, something like a $30 million, $50 million program that you authorized with the Board, but maybe you don't necessarily want to use it yet, but just in case. Any thoughts on that?
It is. You make a good point, J. And I have said this in the past that it's -- that's one -- definitely one tool in the tool set. On the other hand, I think just saying that you will do a share repurchase and not doing it will, of course, bring other complaints. So I think that's something we will look at. Don't forget that the unit price was not for too long, around $5. And in the end, I think people were caught equally by surprise as to how this -- how quickly the markets dropped as well as how quickly the markets recovered. But I take your point, and that's something that we will consider in the future.
Final question from me. Tankers have been kind of a hot trade lately, maybe not today, but they've been kind of popular. And there's been some folks thinking mistakenly, right, not doing much diligence, thinking that CPLP, Capital Product Partners, is a tanker company. I think we had this conversation earlier about a potential name change. It just made more sense, maybe something like capital maritime partners or capital shipping partners or something like that. Might that be something on the docket to kind of remove this confusion from the market and make things a little bit more streamlined?
Of course, we will consider, hopefully, investors CPLP that retained their exposure in Diamond S after the spin-off were able to have their exposure in the tanker market, which is doing quite well. But we will, of course, look into this over the coming quarters.
[Operator Instructions]. And there are no further questions at this time. I'd now like to hand the call back to yourself, Mr. Kalogiratos.
Thank you all for joining us today.
Thank you. That does conclude our conference. Thank you for joining. You may now disconnect.