Martin Fruergaard: Welcome, ladies and gentlemen, and thank you for attending Pacific Basin's 2024 Annual Results Earnings Call. My name is Martin Fruergaard, CEO of Pacific Basin. Assuming that you have already gone through the presentation, we will briefly highlight some of the key points discussed in it before we proceed with the Q&A session. In 2024, we generated an EBITDA of $333 million, an underlying profit of $114 million and a net profit of $132 million. This resulted in a 7% return on equity and an earnings per share of HK 0.199.

We have a strong balance sheet with net cash of about US$20 million and available committed liquidity of $548 million. Our core business generated $178 million before overheads benefited from the stronger freight market, while our operating activity contributed $17 million, having generated a margin of $630 per day over 27,610 days. In view of our sound cash generation, the Board recommends a final dividend of HK0.051 per share. Combined with the interim dividend distributed, this amounts to $61 million, which represents 50% of our net profit for the full year, excluding vessels disposal gains, consistent with our distribution policy. The Board has also approved another share buyback program of up to $40 million in 2025 as our shares continue to trade substantially below the current market value of our assets.

Please turn to Slide 4. In 2024, we completed the announced $40 million share buyback program, buying back and canceling a total of 138 million shares, which reduced our issued share capital by 2% after our convertible bond conversion in June 2024, resulting in the issue of 30 million shares. This combined with the recommended final dividend, means we are committed to distributing about $101 million or 83% of our 2024 net profit, excluding vessels disposal gains. Since 2021, we have generated approximately $1.75 billion in profits and are distributing around $1.17 billion or 67% of total net profits, excluding vessels disposals gains. We believe that buying back our own shares at significant discount to NAV is a strategy that enhances shareholder value more efficiently than acquiring secondhand vessels at current prices.

Please turn to Slide 5. In 2024, average market spot freight rates for Handysize and Supramax increased 24% and 21% year-on-year to US$11,120 and USD 12,920 net per day respectively. Global dry bulk demand growth, especially Chinese demand for coal, iron ore and bauxite supported the freight market in 2024, while disruptions in the Panama Canal and the Red Sea ironed out seasonality and drove ton-mile demand. However, the market weakened in the fourth quarter as transit through the Panama Canal normalized along with weaker-than-expected tradings export. Current forward freight agreements, or FFAs, indicate steady improvements in the remainder of the first quarter of 2025 despite hovering below the overall level in 2024.

As freight rates corrected in the fourth quarter in 2024, we anticipated a weaker start to 2025 and actually took cover for the first quarter at rates higher than the current spot market rates. Dry bulk market activity has picked up since the early Lunar New Year holiday at the end of January. Please turn to Slide 6. Global dry bulk loading volumes grew approximately 2% year-on-year, driven by robust Chinese demand. Minor bulk loadings increased 3% in 2024 due to increased loading of bauxite, agribulk, steel and forest products.

Bauxite continued to drive minor bulk loading mainly from Guinea and mainly carried by larger bulk carriers. China's weak property market dampened the demand for construction material, including cement and steel. Excess steel produced was exported, leading to a 26% year-on-year increase in Chinese steel export. Grain loadings increased by 4% year-on-year due to increased loadings from Argentina and the U.S., which had recovered from drought in 2023, while Ukraine grain loadings increased 84% year-on-year with the success of its own corridor, despite ongoing conflicts. Brazil’s strong soybean export at the start of the year was eroded by delay in corn exports and limited grains transport due to drought in the fourth quarter of 2024.

Coal loadings decreased 1% year-on-year as demand declined in Europe – in European countries and some East Asian countries under the renewable energy transition agenda. Chinese coal demand remained robust in 2024 due to lower domestic production and hydroelectric output in the first half 2024. And finally, iron ore loadings increased 4% year-on-year driven by increased production from key exporters, Australia and Brazil, along with strong Chinese demand due to its steady steel production, which benefited from improved steel margins giving favorable iron ore prices and robust steel demand especially in Southeast Asia. Please turn to Slide 7. For first quarter 2025, we have covered 92% and 100% of our committed vessel days for Handysize and Supramax core fleet at US$10,770 and US$12,680 per day, respectively.

These rates are higher than the current market spot rates, as well as the FFA rates, which are about $8,230 for Handysize and $8,480 for Supramax in the first quarter. We have more open days left this year, having covered 40% and 56% of our committed days compared to the same time last year. In 2024, our core business achieved average Handysize and Supramax daily TCE earnings of US$12,840 and US$13,630, which represents a 5% increase and a 1% decrease compared to 2023 respectively. In the fourth quarter of 2024, we reversed freight tax provisions from prior periods, which positively impacted our Handysize and Supramax TCE earnings by US$1,280 and US$1,920 per day respectively. This resulted in a full year increase in our Handysize and Supramax TCE earnings by US$320 per day and US$470 per day respectively.

We do not anticipate any further prior period freight tax adjustments affecting our future TCE calculation. Please turn to Slide 8. In 2024, our Handysize and our Supramax vessels outperformed the indices by US$1,720 and US$710 per day respectively. If we exclude the positive impact from the reversal of freight tax provision, the outperformance would have been US$1,400 and US$240 per day respectively. Handysize outperformance continued to improve over the year, driven by well-timed cargo coverage and our ability to optimize through triangulated trading.

On the other hand, our Supramax outperformance was limited by a high cargo cover as we anticipate the usual seasonal decline in the freight market, which unseasonally only materialized in the fourth quarter of 2024. In the fourth quarter of 2024, our Supramax fleet outperformed the index by US$3,620 per day or US$1,700 per day when excluding the impact from reversal of freight tax provisions. In 2024, our operating activity generated a margin of US$630 per day. Our operating activity margin was impacted by unforeseen weather-related disruptions and congestions in the fourth quarter of 2024, especially related to Chinese steel exports. Our operating activity days decreased 18% year-on-year to 27,610 days in 2024.

We will continue to expand our operating business, allowing us to capitalize on market volatility. Please turn to Slide 9. Our Handysize daily core vessel costs have increased marginally. Although OpEx decreased with normalized crew costs, higher depreciation costs from drydocking and fuel-efficiency investments, along with a slight increase in long-term charter vessel costs due to delivery of long-term chartered newbuilding vessels increased the blended cost – core vessel cost by 2% to $8,750 per day. We continue to remain cost competitive with our indicative owned fleet cash breakeven level further reducing to $4,710 per day before G&A, representing a 4% decrease year-on-year.

Please turn to Slide 10. Supramax-owned vessel, vessel depreciation costs also increased due to higher drydocking costs and investments in fuel efficiency technologies, including silicon paint. After the redelivery of higher cost long-term chartered-in vessels, our long-term chartered vessels days decreased and daily costs reduced 10% year-on-year to $16,310. As a result, our blended Supramax costs – daily core vessel costs also dropped 5% to $9,650. Our indicative owned fleet cash breakeven level increased slightly by 1% year-on-year to $5,130 per day before G&A.

Please turn to Slide 12. Revenue and TCE earnings increased due to high activity level and higher freight rates, but higher chartered cost of vessels required to fulfill cargo commitments, especially on the Supramax result in a slightly lower EBITDA in 2024. Our G&A has increased slightly, predominantly due to increased staff costs related mainly to our digitalization and optimization efforts. Our net profit was $132 million, further improved by gains on vessel disposal of five older Handysize vessels. Please turn to Slide 13.

We continue to maintain a robust financial position with $548 million of available committed liquidity, which includes $282 million of cash and deposits. Our operating cash inflow for the period was $259 million, inclusive of all long and short-term charter hire payments compared to $286 million in 2023. We realized $44 million from the sale of five older Handysize vessels, which has an average age of 20 years. Our CapEx amounted to $128 million, which included $46 million for drydocking, about $40 million initial payment for four newbuilding in Ultramax low-emission vessels and about $43 million for two vessels delivered into our fleet in 2024. We paid a total of $66 million in dividends, which included 2023 final basic and special dividends of HKD0.057 per share and the 2024 interim dividend of HKD0.041 per share we paid in August 2024.

We spent $40 million to buy back shares under the 2024 share buyback program and our net cash outflow from borrowing was $36 million in 2024. Please turn to Slide 14. Our balance sheet remains strong. We returned to a net cash position of $20 million in 2024 from a net borrowing of $39 million in 2023. Our owned vessels total net book value was about $1.7 billion, while the market value was estimated to be higher at $2 billion according to composite broker valuation.

As per December 31, 2024, we had 59 vessels that remain unmortgaged. Our goal is to optimize our capital allocation and ensure robust, safe and flexible capital structure, which will enable us to make strategic and countercyclical investments, pursue growth initiatives and deliver value to our shareholders going forward. Please turn to Slide 16. Minor bulk tonne-miles are expected to grow 2.3% in 2025, supported by broad-based trade demand and global economy, which is estimated to grow by 3.3% according to latest IMF forecast and increased trade volumes for minor bulk such as cement and clinker, ores and concentrates, fertilizer and steel. However, the demand for iron ore is expected to moderate due to reduced Chinese domestic housing construction and rising steel trade protectionism.

Similar, coal demand is anticipated to decline given ample stocks in China, increased domestic production in India and transition to renewable energy in Europe, European countries and some East Asian countries. On the other hand, climate change is expected to continue affecting domestic crop output. This may lead to increasing grain import volumes. Improvements in crush margins and hog prices in China may also support grain demand. Please turn to Slide 17.

The minor bulk fleet is forecasted to grow by 4.4% due to more deliveries in 2025 from orders placed during the strong market in 2021 and 2022, while scrapping is forecasted to remain muted at about 0.5% of the fleet. The combined order book is currently at about 10.9% of the total fleet, which is considered manageable compared to historical figures. Additionally, the scrapping pool continues to increase with approximately 14% and 11% of Handysize and Supramax capacity being over 20 years old. Going forward, we believe emission regulations will likely further reduce effects in dry bulk supply through slower speeds, accelerate the scrapping and increase downtime for retrofitting energy-saving technology. Therefore, we are confident in our sector’s long-term prospects despite the short-term supply increase.

Please turn to Slide 18. Transits through Panama Canal normalized after an increase in rainfall since the rainy season began in May 2024. As for the Suez Canal, the Houthis have suspended attacks on the non-Israeli shipping in the Red Sea under the Gaza ceasefire agreement. However, transits have yet to recover as shipping company maintain caution and insurance costs remain high. Small proportion of dry bulk fleet transit to Suez Canal compared to other shipping segments, particularly container ships.

Ship brokers estimate a 1% to 3% drop in dry bulk tonne-mile if Suez Canal transits recover. Please turn to Slide 19. Global commodity demand is expected to remain steady in 2025 despite easing demand for iron ore and coal. Additional support may come from anticipated further economic stimulus measures from China to meet growth targets, with a focus on expanding domestic demand and supporting consumption. Further disruptions arising from geopolitical tensions, trade tariffs and extreme weather conditions could potentially increase tonne-mile demand.

The current dry bulk fleet order book is around 10.4% and net fleet growth in 2025 is estimated to remain steady at 3% year-on-year. Pricing protectionism could negatively impact the global economy and trade, while tariffs and widening deficits in the U.S. could drive domestic inflation, impacting interest rate cuts. The complete unwinding of Red Sea disruption would result in decreased tonne-mile demand, although the impact is relatively limited in our sector. Additionally, the anticipated weak Handysize and Supramax vessel delivery in 2025 with an estimated net fleet growth of 4.4% is expected to outpace the 2.3% growth in minor bulk tonne-mile demand, while scrapping is forecasted to remain limited under the IMO in the next – until the IMO formalizes its next decarbonization regulations.

We remain cautiously optimistic about the year ahead and are prepared to seize any opportunities arising from increased volatility in 2025. Please turn to Slide 21. We maintain our disciplined approach to the growth and renewal of our fleet by acquiring modern secondhand vessels countercyclical by selling our older and less efficient vessels to unlock values. With LEV orders and long-term charters of newbuilding vessels that comes with purchase options, we aim to maximize our growth optionality with the ambition to reduce emissions and transition to net zero by 2050. 2024, we exercised the purchase option on 158,000 deadweight tonnage Supramax vessel built in 2016 and we sold five older Handysize vessels with an average age of 20 years for a net proceed of about $44 million.

Since 2021, we have been increasing our carrying capacity and fleet efficiency by selling 25 older vessels with a total capacity of 0.8 million deadweight tonnes, including 23 Handysize vessels, one Supramax and one Ultramax vessel and we have acquired 20 secondhand vessels with a total capacity of 1.1 million deadweight tonne, including six Handysize vessels and 14 Supramax and Ultramax vessels. As vessel values softened in recent months following the decline in freight rates, we will continue to assess strategic and countercyclical investment opportunities when they arise in the market. Please turn to Slide 22. In November 2024, we contracted 64,000 deadweight dual-fuel methanol Ultramax newbuilding LEVs from our Japanese partners for a consideration of $46.5 million each, with expected delivery in 2028 and 2029. Given the current order book and age profile of minor bulk fleet as well as with tightening regulations and limited shipyard capacity, we believe we are making the right move at the right time.

The deal is based on various considerations and expected benefits. These include added financial values from FuelEU emission pooling and selling overcompliance credit, which can accelerate payback as well as saving from using renewable fuel compared to the cost of carbon tax and penalties associated with conventional fuels, which are expected to rise with more emission regulations from among others, IMO. The move aligns with our long-term initiative to transition to net zero emission by 2050. Please turn to Slide 23. Our long-term chartered newbuilding vessels provide us with the opportunities to grow an improve efficiency without initial cash payout outlay.

In 2024, three 40,000 deadweight tonne Handysize newbuildings and one 64,000 deadweight tonne Ultramax newbuildings were delivered into our fleet. After legal events of long-term chartered vessels, we had 70 vessels at the end of 2024 that had extension and purchase options. In 2025, we retained purchase options on four Handysize vessels and one Ultramax vessel and we will evaluate whether to exercise these options. By maximizing optionality, we can better navigate market volatility and remain agile and competitive in different stages of the shipping cycle. Please turn to Slide 24.

We are well prepared to navigate the short-term uncertainties anticipated in 2025 as we plan for long-term growth. Our market position remains strong and we continue to be fully customer and cargo-focused. We aim to grow our position as both an owner and operator in the minor bulk segment. By maintaining a long open position, we can leverage market cycles as we optimize our short-term position to capture market volatility. In view of the market development, we are committed to further improving our cost and striving for sector-leading cost base.

We are enhancing our performance management approach and continue to invest in performance, digitalization and data use to continuously improve our productivity and profit margins. We aim to grow the company by implementing a disciplined and countercyclical strategy for our fleet growth and renewal. This involves acquiring modern secondhand vessels by selling older and less efficient vessels. We maintain a prudent approach and continuously evaluate vessel price development to maximize value creation through timely investment and divestments in our fleet. For capital allocation, we aim to maintain a robust and flexible capital structure with high liquidity, enabling countercyclical investments.

We have limited committed CapEx mainly relating to our usual dry dockings and investment in fleet optimization, excluding any vessel [indiscernible]. We remain positive about the long-term fundamentals and prospects of dry bulk shipping. Finally, following a search that presented us with a number of excellent candidates, we today announced that Jimmy Ng will join us May 12, 2025, as our new Chief Financial Officer. Please see our announcement dated today for a summary of his professional experience with U.S. and European investment banks and since 2008 with Hutchison Port Holdings.

I look forward to welcoming Jimmy to the team shortly and I’m confident that he will be a valuable addition to our leadership team and contribute well to the continued growth and success of Pacific Basin. Here, I would like to conclude our 2024 annual result presentation by thanking our colleagues at sea and at shore for their contribution to our result. I will now hand over the call to the operator for Q&A.

Operator: [Operator Instructions]
Unidentified

Company Representative: Online question coming from the Q&A. Regarding with your proposal, are the U.S.

potential actions on charges on the Chinese vessel going to impact PB?

Martin Fruergaard: Yes. Now the regulation is – of course, we’ve seen it and we have evaluated the consequence for us. Have to remember that majority of our ships are actually Japanese-built. We have 75% Japanese-built ships and 25% Chinese-built ships. And when you look at how much we call the U.S., I think it’s about 7% of our own ports are in the U.S.

So if the rules are being implemented as they look at the moment, then of course, it will have an impact, especially if we call the U.S. But I think when we look at what will happen, this will really disrupt our market. And it’s, again, one of those disruptors that overall we believe will be supportive for our – good for our – supportive for our market because certainly tonne-mile will be longer and people will, of course, have to position the right ships and do the right things when calling the U.S. So it will have an impact on our trading pattern. We will have to adjust that part.

And of course, we’ll have to see how the final rules they end up before we sort of decide exactly what to do on that part. But it’s one of those examples that people have an impact on the market because this is a startup, one again that will create volatility and also longer-term buying.

Operator: Our next question comes from Cathy Huang on the webinar. Please unmute your line and ask your question Cathy.

Cathy Huang: This is Cathy from HSBC.

So we would like to check your outlook on the dividend and this is the first question. And the second question is that Trump announced 10% more tariff on Chinese imports overnight. So can you assess the impact on Pacific Basin's operation?

Martin Fruergaard: Yes. So as we announced earlier here, we – the Board has recommended a total 50% dividend for 2024. And on top of that, a $40 million share buyback program that we will execute this year, similar to what we did last year.

And in respect to the tariffs coming in, I think what we – because there's a lot of things on the tariff side at the moment coming from the U.S. And U.S. is not a huge importer of dry cargo. They're probably more an exporter. They're not – in a global scale, not small, but they're not that big.

The thing we probably certainly look at is how are others going to retaliate to the U.S. tariffs. So mainly probably China. What's China going to do in return for these increased taxes implemented by the U.S. And we don't know that yet.

And of course, we are following that part of it. In general, we would say, again, these trade tariff – again, it will create these disruptors that actually sort of creates longer-term buy. It will make sort of not very optimized supply chain because you have many different things. So in that sense, it's quite positive for us. I think we always fear a little bit when we start talking about these things, it will have an impact on the global economy because we are actually also driven by the global economy fundamentally.

But all these disruptors, of course, adds on top of global growth. So short-term, definitely, an advantage if we have such issues. But in the longer run, we fear it might also impact the global growth. I hope that reply – gave the reply, Cathy.

Operator: There are currently no questions on the webinar.

[Operator Instructions] Our next question comes from Sandeep Verma [ph]. Sandeep, please unmute your line and ask your question. Thank you.

Unidentified Analyst: Thanks. Congratulations, Martin, on decent set of numbers.

I wanted to understand what percentage of your owned fleet is Chinese-built? And I have a follow-up after that.

Martin Fruergaard: What's the second question, Sandeep?

Unidentified Analyst: No, no. So I wanted to understand, in case if it is less than 25%, then would you be using this opportunity to buy some of the Chinese – I mean, would you be using this opportunity to kind of contract some of the Chinese shipyards for some of the ships because these may be available at a bargain price? I’m talking about a scenario if these proposals by USTR goes through. Thank you.

Martin Fruergaard: The first question, so we – it’s about 25% of our fleet is built in China and the remaining 75% is Japanese-built vessels.

And we also look at how many calls we actually have in the U.S. last year and that was 7% [ph]. I think it’s about 600 port calls actually. We have a lot of calls actually in that part, but percentage-wise, it’s actually only 7%. I think on the – what opportunities it will bring in the asset space, that remains to be seen.

Our newbuildings, they are from Japan, from [indiscernible] and they have newbuildings in China. And of course, if these rules are being implemented in how the program is today, there’s also some opportunities for us because we are mainly Japanese ships. So there might be some opportunities on that side of it. I think we are always following all opportunities to buy vessels in the market. And we actually like these – the volatility in the market, also in the asset prices, because it does give us some opportunity to do, we call it, countercyclical investments or at least investments where been good timing.

So of course, we follow this very carefully. But we have so far not seen that the Chinese-built ships are very discounted. I do actually think maybe there’s not so much trading going on, as much sale going on with Chinese ships at the moment. So people are probably holding back and waiting for – to see how the rules and regulation. But I agree with you, it might give some opportunities one way or another.

Unidentified Analyst: Understood. Very, very helpful. I’m just thinking of a possibility, I mean, for example, if your company has 20% of its fleet, which is Chinese-built, then probably you’d like to take it to 25% to take the advantage of probably cheap – I mean, probably cheaper ships available at Chinese yards than it would be another – it would be otherwise. And one clarification I’m looking for, when you say that 25% of your fleet is Chinese-built, you’re talking about your operating fleet or owned ships?

Martin Fruergaard: That’s our – the ships that we own, which is the 12 ships plus and then we also have four newbuilding. But out of the 112 ships, 25% are built in China in that time.

I think there’s a lot of things – it’s still a little bit early, but we, of course, have seen I’m sure the Japanese yards and maybe Koreans have seen more activity or more inquiries in respect to newbuildings from different other not necessarily dry cargo, but all segments for some who might want to get a little bit more balance in the fleet. I think if you look at the total fleet, how many ships are built in China, it’s a lot. And I think, in the dry cargo space, there are very, very few owners who do not have a much higher percentage of Chinese-built ships in their fleet than we do. I think actually we have a very limited number of Chinese-built ships in our fleet. And we have historically and still are – also because we normally keep the ships, but I have had sort of preference for the Japanese ships, also often – actually also trade better on the speed and consumption.

So we have always had a preference for the Japanese-built ships.

Unidentified Analyst: Understood. If I can ask one more follow-up, which is, what is the ratio of Chinese-built ships in your operating fleet? Because if this regulation goes through, that will be applicable for the operating fleet, not just for the owned ships. And if you have higher proportion of Chinese-built ship, higher than 25% of your operating fleet is Chinese-built, then you may be looking for, I mean, kind of exiting some of the charters, or chartering more Japanese-built ships to kind of benefit from this regulation.

Martin Fruergaard: Our chartered fleet, we have 17 long-term chartered ships, and they are all Japanese-built ships.

When you talk about 100 – I think it's 148 short-term chartered ships we have on at the moment. I actually don't have, right now that number. But all these ships are very short period, right? They are all on voyage maybe five to seven months. So they are all very short commitments in that part. Our big commitment is the 17 long-term newbuildings charters that we have from Japan, plus our own 112 ships that we trade at the moment, plus our four newbuildings from Japan.

And I'm sure you're right that if these rules are implemented, then of course, you will all see, maybe not call it 2-tier market, but you definitely see things will change and people will look for different kinds of ships to do it. But I think it's also important to remember that the majority of the dry cargo trade on our ships is outside the U.S. U.S. is not unimportant, but for the container – for the dry cargo space, our trade is much more outside U.S. than to U.S.

But I'm sure you will see a ship that is not Chinese-built and all the different structures will start probably more in the U.S. And what's going to happen in the container space and other spaces, that's going to be interesting to see. But this will have quite a disruption in the market if these rules are being accepted and implemented.

Unidentified Analyst: Understood. Thank you so much.

One clarification. For this proposed rules, so your company will be falling under Chinese shipping company? I mean, will it qualify as a Chinese shipping company or non-Chinese shipping company because your incorporation is not in China?

Martin Fruergaard: No. We – so we are Hong Kong listed, so I guess that depends a little bit on how others see Hong Kong and we don't know. We have to see how that [Technical Difficulty]

Unidentified Analyst: Understood. Thank you so much.

Martin Fruergaard: Thank you very much.

Operator: For our next question, we'll be heading back to Cathy Huang. Cathy, please could you mute your line and ask your next question. Thank you.

Cathy Huang: Hi, Martin, I have another question.

So we noticed that the cover ratio and rates in this year – in the first quarter of 2025 are lower versus the same last year. So is it in anticipation of freight rates to improve? How does this position Pacific Basin if there are more headwinds to demand? And as you mentioned, there will be oversupply?

Martin Fruergaard: Yes. I didn't say there will be oversupply. I'm just saying that at least according to Clarksons, there's more ship being delivered than what they expected the value to be. But – so we have to see how the disruptors actually impact the market going forward.

I think the – when you look at our cover, you said first quarter, actually, our cover first quarter, we are basically 100% covered [indiscernible] and entrepreneurs. And I'm glad we are because the market actually took some of the normal seasonal dip in January. So I think we are very well positioned for first quarter. But it's true that if you look for the full year, our cover this year is lower than we had at the same time last year. And I think we've been talking also at previous calls, the challenges we had last year.

We simply had too much cover, especially on the Supras that actually hit us in the sense that it was very tough for us to sort of optimize to do the triangle trading and do the things we normally do so well because we had too much cover on that side. So this year, we have reduced that a little bit. And the reason we've done that is also to make sure we have the space and the room to operate and position our ships in the right positions and maximize the earnings and the margins on our business. We have to see how the market is moving. We normally thrive quite well when we have volatility in the market.

We have the seasonality in these things. That's actually where we often perform the best in. So we have to see how this year is going. I have to say that when we ended last year, I think we were also a bit worried about the market. But again, multiple disruptors last year changed the market totally.

Not to the bad, it was actually quite good and we also outperformed the market, but we didn't get the margins we wanted on shipments. And this year, we try to position a little bit different to make sure that we can gain on the ops that we see in the market going forward. So I'm quite happy with the cover we have. I think it gives us a little bit of flexibility that is needed in these markets.

Cathy Huang: Yes, thank you.

That's very clear.

Operator: Okay. So there are currently no raised hands on the webinar. [Operator Instructions] I'll just give a moment to see if we get any final hands. Okay.

There are no further questions. And as there are no further questions, we will begin our closing remarks. So please go ahead, Mr. Martin Fruergaard. Thank you.

Martin Fruergaard: Yes. I'd like to thank you again for joining us today and for your continued support of Pacific Basin. If you have any further questions, please contact Cameron Ip [ph] from our Investor Relations department. Goodbye. Thanks.