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And welcome to today's presentation of Gramkkar Carries results for Q1 1 2024. My name is George Wist, I'm the CEO of Grumman Carriers. And usual, I'm joined by CFO, Gunnar Kuran. Today's presentation will be a bit different. This morning, we announced together with SAS Shipping Services, which is a subsidiary of the MSA Group, a recommended voluntary offer for all the shares in gram card carriers. The offer is at 263 0.69 per share. In addition, we are paying a dividend next week of NOK9 per share for the Q1 which comes on top. First, briefly about the quarter. The Board has approved a Q1 dividend of NOK9 per share equivalent to about NOK0.82 Increased daily time charter earnings for Panamax and midsize vessels plus vessel sale gains supported by Q1 net profit. Our strong revenue backlog provides long term earnings visibility. We maintain focus on optimizing our capital structure and we refinanced 1 vessel here in Q1 at lower interest rate costs. And we continue to create additional value through asset transactions we see a continued positive market There are also others which are positive on the market and outlook for groundcar carriers. Reflected in the offer from the MSC Group announced this morning, which has been anonymously recommended by our Board.

Let's look at the details of the announced offer. It values Ground Car Carriers equity at NOK7 point 6 4,000,000,000 [indiscernible] or approximately $695,000,000 The offer plus the Q1 dividend represents a 28.3% premium to yesterday's close. The Board recommendation is based on several factors. Including an independent fairness opinion. The largest shareholders, the Board and management representing 55.85 percent of the shares have pre accepted the offer. The intention of the MSC Group is to continue operation as it is under the same brand name with the same people delivering the same quality service to all our customers. The MSC Group is a privately owned conglomerate led by the Aponte family who founded it in 1970. Their headquarter in Geneva and is a world leading in shipping and logistics. [indiscernible] SAS Shipping Agency Services [indiscernible] is a wholly owned subsidiary of the MSC Group. Some technical details about the offer. The offer period will start after publication of the offer document expected in May. The offer period will then remain open for 20 days but MSC Group can extend this if they want to. Closing is expected in Q3, It's conditional on satisfaction or waiver of all the conditions in the offer.

The intention then is to de list from the Oslo Stock Exchange and withdraw from trading on OTCQX in New York. We consider this offer by 1 of the world's leading maritime groups as a validation of our unique position as a leading car carrier tonnage provider and the commitment put by the entire organization [indiscernible] and our existing owners. Then let's go back to Q1. Revenue was 54,900,000 which is slightly down from €56,400,000 in Q4 last year. EBITDA was $40,800,000 dollars slightly down from $41,600,000 in Q4. The revenue reflects increased Panamax and Midtime midsize time charter earnings with the Viking Queen starting its new contract in February. This was offset by vessel off hire relating to drydocking and repair. Net profit was 31,200,000 dollars including a $5,600,000 gain on the Viking Princess sale. Our Q4 net profit was 37,800,000 dollars and included a gain of €13,100,000 on vessel sales. With all vessels on long term charters, we did not sign any new contracts in Q1. The change in backlog The revenue backlog provides good earnings visibility with an average contract duration now of more than 3 years. The time charter breakeven is marginally changed reflecting good control [indiscernible] OpEx expenses and financing costs.

And for the quarter, we returned, as per normal, 75% of net to our shareholders.

We will distribute $23,740,000 by way of repayment of paid in capital for Q1. A slight decrease from Q4 mainly due to gains of vessel sales of 5.6% in Q1 versus sales gains of 30 13.1% in Q4. Including Q1, we will have distributed more than $100,000,000 since IPO. Just as a reminder, the offer of 263 0.69 per share is after the Q1 dividend payment. End user demand for car carriers remains strong and we are almost back at pre COVID levels last year and we're expecting to reach pre COVID levels this year. We see a continued shortage of vessels and the charter rate remains stable at current record levels. We continue to create value through asset transactions. Fleet optimization and a keen focus on minimizing cost of debt. We will shortly hand over the Viking Amber to its new owner, and will book a gain of $36,500,000 here in Q2. The vessel was sold at an attractive price in line with the stern focus on optimizing returns for our shareholders. We have in Q4 and Q1 refinanced 3 vessels Our average margin is now close to 2% with a further step down as our net debt to EBITDA ratio goes below 1.5.

Which we do expect later this year. I will now hand it over to you, Gunnar. For the financial section. Thank you, Georgi.

The average TC rate for the quarter was up $1400 33,700 The main contributor to this was the Viking Queen being delivered on [indiscernible] and also the sale of 2 distribution vessels in Q4 contributed to an higher leverage. We're expecting a further positive impact in this quarter. Being [indiscernible] the Q3 earnings from the Viking Queen New Sharter. Operating expenses are developing in line with expectations. With the cash breakeven rate remaining stable Utilization for the quarter was somewhat low at 94% And this was mainly due to the planned docking of the Viking Drive [indiscernible] And these stockings were somewhat prolonged because of repairs and Chinese New Year celebrations in China where we docked 1 of the vessels. Moving on to the next slide. Looking at the charter book, we have not agreed any new charter this quarter. But one change here is that we have made an agreement to sell the Viking Amber So she was the only vessel we had open this year. So now the open positions are limited to the Viking Passero and Mediterranean Sea coming open in 2025. [indiscernible] With this charter book visibility on the revenues, remain very good. Which I will Move on to on the next slide.

So as I mentioned, we didn't sign any new contracts in Q1. So [indiscernible] charter backlog now stands at $7.94 On the bar chart, on the right here, you see the revenue backlog and how it will be recognized over the next, yes, 2, yes. [indiscernible] very good visibility on revenues and earnings. Moving to the financial key figures. The revenue and earnings reflect execution of our strong backlog As Georg have mentioned, revenue and EBITDA was slightly down from Q4. And we had higher TC earnings on [indiscernible] This was, again, as I mentioned, somewhat offset by the prolonged off hire period for the 2 vessels that Operation of the remaining fleet was very good, high utilization.

EBIT is down somewhat, again, as Georg mentioned, this is due to the we had a higher gain on the sale of the Viking Constanza in Q4. And then we booked the 5,600,000 dollars gain on the Viking Princess in Q1 Operating cash flow from operations was NOK 41,000,000 versus NOK 48,000,000 in the prior quarter. We continue to optimize our capital structure and cost base to maximize profit and returns. Lower cost of debt support our long term cash flow visibility. We did Viking Bravery and Mediterranean Sea in Q4. And we have completed the 2nd Panamax vessel that was on a lease. Which we have refinanced for the leading Japanese bank. Further expanding our group of banks. Total debt outstanding at the end of the quarter was 2 69,000,000 [indiscernible] part of these refinancings, we have added to our liquidity reserves significantly and we have added $15,000,000 in revolver under with one of the refinancings. So end of the quarter, we had $118,000,000 in liquidity reserve including revolving facilities. I think with that, I'll hand it back to you Georg.

Thank you. Good night. Of vessels open for fixing in 2024. This reflects the tight market with most car carriers now booked on long term charters. Volume growth, as I said, is expected in 20242025 despite economic uncertainty lower growth expectations, weaker consumer confidence and also the conflicts in Ukraine and the Middle East. New car sales are expected to be back at pre COVID levels later this year. Auto manufacturers continue to prioritize export models U. S. Inventories of import brands remain at low levels, although coming back. China's export continued to grow and record high heavy volumes gives a very tight market for car carriers. In sum, it looks still quite strong. The main drivers for the car carrier market export from Asia to the world. The rest is predominantly backhaul trade. China is the main reason for the strong market and significant increase in Asian export since pre COVID. They're clearly helped by Japan and South Korea, which is maintaining and slightly growing their market share. They are taking market share more from European seaborne export drive with all of this drives the average sailing distance and ton mile demand. The increase from 2019 to 2023 translates into about 110 Panamax vessels of demand.

More than 50% of 2023 export from Asia headed to North America and Europe. Long distance [indiscernible] There is also the situation which rights which have been a lot of focus lately about the potential consequence of an import ban on electric vehicles from China to Europe. As you can see in the middle bar chart, that's the green part at the top. It is a lot less than people envisaged. There is still a large volume out of China is internal combustion engine and also hybrid models going to world markets [indiscernible] as you can see, the share going on battery related to Europe is actually a lot less than what people perceive when you read the popular press. Over 5,000,000 Chinese vehicles were exported in 2023, and just 10% was EVs to Europe. Or to EU And that's important distinction because EU are the one scrambling with doing import duties. The strong growth of Chinese vehicle exports this compares to the rolling last 12 months EV share of 30% of total export. China has rapidly become the largest car in sport in the world. We saw a little bit of easing because of Chinese New Year, but in in March, we're straight back up again.

Export are seasonal predominantly driven by that effect. This implies further ton mile demand growth This is driven by Chinese car brands growing internationally and international car brands such as Tesla, followed by Volkswagen, BMW, Volvo, and Drellin Motors investing in production in China. In China, they're all benefiting from an established battery electric value chain, modern production facilities modern port infrastructure well established auto parts supply chain and a large skilled and cost efficient workforce. We continue to see a shortage of car shipping capacity We have matched the AIS data of all the vessels leaving the Asian region together with export data And you can see that there's a clear deficit between and how is that possible? Well, we know that quite a number of cars are now leaving on dry cargo vessels, container vessels. Etcetera, and even multipurpose vessels to fill this. They're just isn't enough car carriers. So people who want to export have to choose in means of transport. Closing this gap out of Asia, would require all move back to car carriers, an extra 90 4 car carriers on an annualized basis.

The order book has increased above historic average levels in response to the strong market fundamentals and this large export boom out of the Far East, The fundamentals remain in place and support a continued firm market. We are coming from almost a decade of negative fleet growth. Net only 11 newbuildings were delivered in 2020 [indiscernible] and so far in 20 24, only 8 vessels have been delivered so far. We do expect and we do see certain slippage on some shipyards. So the order book, which you see on the graph, will most likely the way we see it, we pushed out somewhat in time. When it comes to additional newbuildings, the earliest available delivery dates for our order now is in 2728 And we have now even seen contracts delivering in 'twenty 9 and options into 2,030 and even 2,031. Further vessels are needed to meet growing demand replacement requirements and of course reduce fleet efficiency due to environmental regulation. The age profile of the fleet indicates a substantial recycling potential. So the PCT market [indiscernible] as we see it, remain strong in the coming years. [indiscernible] is a unique pure play investment opportunity We see attractive market fundamentals and we have successfully captured a strong market through fixtures and value adding vessel transactions.

We have good visibility on growing earnings and cash generation. I think that is what is reflected in today's [indiscernible] We will now move on to our Q and A session. Thank Thank you for the presentation, Georging Janoff. My name is Auguste, and I'll be moderating this Q and A session.

Just a reminder to everybody watching at home, if you have any questions, feel free to type them into the chat function at the invite people. So as you mentioned, a little bit of a special a special conference call, obviously, with the offer and the first question. Gotten here is regarding that. Can you please further develop why you believe the offer price is fair?

So I think the Board announced we have considered this from of course, different angles. And and also taking on third party valuation advice. So I think as the press release saying also what I mentioned, it's It's almost 18% premium to our all time high. It's a 28% premium to yesterday's close. And it also stacks up quite well if you also believe what analysts are saying on their recommendation and the value proposition. So when you balance all this, we think it's a fair offer. And I think that's also why you see such a high pre commitment rate from existing shareholders and management and also anonymously recommended by the Board of Directors.

Yes, sounds good. Then a few more questions, pretty much all of them regarding the offer. Congrats. What is your take on the timing of the offer versus your market outlook?

That's a tricky question. I think we they approached us and and I mean they do their homework. They have their analysis. So I think it's yes, I think they they like what we have created. They like the stability of the business. So I think and they probably have seen that we deliver consistently dividends. So I think they I think it all came together, whether it was that week or the the month or the quarter and the day or the after, it's difficult to gauge. But they approached us as I don't know all the ins and outs of that. [indiscernible] Sounds good. Then a bit of a detailed one. Can you clarify if the 54.5 percent block of irrevocables from shareholders remain binding in the event of a higher offer or if it can lapse like the 1.3% from the management?

Yes. So I think hopefully, the press release is clear. The 4 largest shareholders, they are hard undertaking hard underwritings. While the somewhat smaller bit by management is underwritten, but they have the upside or they can go if there's if potentially there is a high Okay.

Voluntary offer to go through from the common shareholders?

Well, I think I hope again that the press release is clear. They have made an offer and they have made a condition that they reach 90%. But they also reserve the right to waive that in the event they should not reach that immediately. So it's yes, Yes. That is clear. And then there's one in Norwegian, but I'll translate. Congratulations. Is there any plans about what management will do moving forward within shipping? [indiscernible] the buyer here is very clear. He is not just buying ships. He is buying a platform. He is buying all the DNA and the people that the ground car carriers. So he's buying the he's going to continue with the name the people, everything. So for our customers, they will not feel a difference. For us, in the company, we will now have go back to being a private held company if this all goes through. We've been there before. We went public. Now we go private again. I think the commitment of a wealthy shipping savvy single owner, is extremely interesting.

Sounds good. Then there is so far the last question. So if anybody has anything more, please feel free to type them. Is the unanimous board recommendation waivable binding.

I mean, it is binding. I think has to expect that if there's a higher bid coming, then the Board, of course, considers and are working for all shareholders. So in the case there is a higher bid, I would suspect the board will then recommend a higher bid.

Yes, that makes sense. Then there is one. Did you speak to any other possible acquirers? Or was it a bilateral discussion with MSC that led to the offer?

This has been a bilateral negotiation.

Okay.

Then so far, I can't see any further a minute or so to type in, and I can take one in the meantime. Mentioned obviously that a lot of cars are have been moved on container vessels and continue to do so because it's a very tight market. And now you have the biggest liner acquiring or attempting to acquire a car carrier company. Do you think that there'll be sort of more of this moving forward with people in players in the different segments kind of looking at at each other's sort of industries. Well, I think we've seen it a little bit already, right? We've seen CMA, CGM, have committed a few car carriers think in the past, we've seen it. I mean, APMuller did it and then they exited and same with Sales AVA in Chile. They have also been looking at it in Korea. Group, of course, have been in both segments. So So I think we've seen it before. I think yes, I think just looking at it, it seems like that there is something there. But But it's I mean, this is early days for us. We are not privileged to to inner thoughts of our of this [indiscernible] [indiscernible] Of course not.

Still no questions. So maybe one to kind of round things off a bit. How do you see sort of car carriers going forward next sort of 5 years in terms of strategy thinking of the vessels that are coming next year is sort of the thinking in general, I mean, dependent on the market of course, to continue with long charters and kind of stable stable revenue streams? Or will you maybe look to mix things up a little bit?

No, I think we have our Huddl strategy. I think can I believe we have been very clear on what we have been after? Of course, if this offer goes through, I think then we will sit down with with a new shareholder and have a strategy session and hammer out the new strategy for the company. Whether that means we stay as is or he wants to change go a bit shorter, I really don't know and then we shouldn't speculate.

Okay. Sounds good. Then there are no further questions. So I'll leave the floor to you.

No. But thanks everyone for listening. And if there is any questions to the offer of technical nature and so forth, please do reach out. The contact details are at the bottom of the press releases. So thank you all for listening and wish you all a great day.