Class CNBC Focus Trimestrali: d'Amico International Shipping commenti ai risultati Q3 & 9M 2023

First of all, thank you. So, a series of decisive things happened. First, in February, sanctions and related price caps on petroleum products leaving Russia came into effect. Now, I recall that Russia was Europe's largest supplier of diesel, and clearly this created the situation where Europe no longer bought diesel from Russia but went to buy it much further away: it went to buy it in the United States, the Middle East, India, and some cargoes even in China. And Russia, in turn, had to sell its diesel in Africa, Turkey, the Middle East, and South America. The moral of the story: the routes lengthened terribly, and this created an increase in demand for tankers. Here we are talking about refined products, as we were saying. The second element is that the Panama Canal, due to drought, reduced passage frequencies and thus created queues that reached up to a month of waiting to pass from one side to the other, from the Atlantic to the Pacific and vice versa. And this inefficiency obviously removed capacity from the market: many ships were stranded in these queues, taken out of market availability, and this was another element of increase in rates. Then, clearly, there were extremely strong refining margins, first on gasoline and then on diesel during these nine months, so refineries were very pushed to refine mainly gasoline and diesel, whose prices became extremely volatile and increased significantly. This created the conditions for strong arbitrages. When this happens, there are large movements of products from one side to the other, from East to West. Moreover, the West, mainly Europe, closed much of its refining capacity, so it depended heavily on China, India, and the Middle East for its supplies. All of this, on average, in its combination, created the increase in demand that led to these results.

Well, I would say, I would say that there is no need to worry. There is a need to be careful, without a doubt, to take hedges where hedges make sense, and we have done that and continue to do so. Clarkson, one of the largest shipbrokers in the world, forecasts an increase in ton-miles, which basically indicates the quantity transported over distance. So the longer the distance, the more demand there is, and it sees a 7% increase, which is not insignificant at all. And so, what happens is that a possible recession could be greatly offset by a longer and more distant flow, thus giving stronger demand. If China then consumes less, it will mean that China will have more refining capacity available for export cargoes, because we do not look at China for refined products, we do not look at China as importers of crude, but as exporters of products. And if it refines less for its domestic market, it will refine more for export cargoes. Now, China is far from everything: it is far from Europe, it is far from the United States, and so it could be extremely valid as a factor for our market. It could be an extremely positive element. Another thing to consider: if Panama becomes a problem, and it is becoming a problem because it continues to reduce the number of daily transits, everything on the West Coast, i.e., the western coast of the Americas, from Canada down to Tierra del Fuego, will have to be supplied. Previously it was supplied from Texas and Louisiana; now it will have to be supplied from Korea, Japan, China, so even longer routes. Certainly. So I feel like saying that 2024 will be a good year. How good is yet to be seen, but certainly positive.

We have always said that our policy was based on two things: first, debt reduction, and therefore leverage reduction, which we have regularly carried out. And second, distribution in line with leverage reduction, distribution to shareholders. We have started today to do something we did not do in the past, namely to pay an interim dividend. But since we had the elements to do it, we wanted in a way to reward shareholders thanks to the results we have achieved. If we continue to achieve results on this model, we will continue to achieve positive results in this way, and it is something we will continue to do in the future. Are acquisitions planned in the future, perhaps even with paper against paper, with a buyback? No, no acquisitions for the moment. In 2024 we will begin to review the renewal of the fleet, so investments in fleet renewal.

Infinite thanks to all of you.