Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you comment on the COA increases and the swing tonnage levels? A: We had an average rate increase in the 4th quarter of approximately 12%. Regarding swing tonnage, there's a turning point around $15,000 per day where product tankers might swing into chemicals. We saw a dip below this level, but it was too short to have a significant effect.
Q: Do you expect the contract coverage to increase from the current 53%? A: We anticipate maintaining a contract coverage between 55% and 60% on average during the year.
Q: Regarding the $15,000 MR rates as an entry point for product tankers into chemicals, is this a relative number? A: Yes, it is relative. When rates drop below $15,000, we observe tonnage moving into chemicals, but it must be sustained over time. Many product tankers are already operating in chemicals, and switching requires cleaning and positioning, which incurs costs.
Q: What is the current situation with the Red Sea, and what would be the implications of returning to it? A: The Houthis have stated they will not attack vessels as long as the truce is in place. Currently, the only solution is to avoid the area. Sailing around Africa is less efficient, but the impact varies depending on trade routes. For example, a route from Turkey to India now takes over 40 days instead of 11.
Q: How would a potential trade war between the US and Canada affect the chemical market? A: We are not directly involved in trades between Canada and the US, so there would be no direct impact on us. However, US dependency on Canadian crude oil could affect the crude segment, potentially stimulating the product segment.
Q: How should we think about volumes in 2025 compared to 2024? A: The production is there, but the issue is who is lifting those volumes. In the 4th quarter, too many swing tonnage vessels were lifting chemicals. It's crucial for these vessels to return to products so that chemicals are lifted by chemical tankers.
Q: Why have easy chemical rates declined more than specialized chemical rates? A: There are not enough specialized chemicals to fill all our vessels, so we transport a combination of easy and specialized chemicals. The sophistication of our ships allows us to carry a wide range of chemicals.
Q: What are your expectations for COA renewals going forward? A: It's too early to conclude on negotiations that haven't started yet. However, despite declining momentum in the fourth quarter, we renewed 45% of our total volumes with over 10% increases, which is a significant achievement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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