ECO Q1 2026 Earnings Transcript

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DATE

Thursday, May 14, 2026 at 9 a.m. ET

CALL PARTICIPANTS

• Chairman and CEO — Aristidis Alafouzos
• CFO — Iraklis Sbarounis

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TAKEAWAYS

• Time Charter Equivalent (TCE) Rates -- Fleet-wide TCE averaged $93,100 per day, with $106,400 per day on spot VLCCs and $81,600 per day on Suezmax spot days.
• Adjusted EBITDA -- $110 million reported for the quarter.
• Adjusted Net Profit -- $89 million for the period, resulting in adjusted EPS of $2.33 based on the average share count.
• Dividend -- Board declared a quarterly dividend of $2 per share, representing 88% of reported net income, and marking the highest dividend since inception.
• Cumulative Dividends -- Over $550 million distributed since IPO, equaling approximately 2.5x the initial market cap.
• Fleet Expansion -- Total vessels stand at 16 (8 Suezmaxes, 8 VLCCs), average age of 6 years, with additional Suezmax newbuildings (Nissos Tigani and Nissos Vous) set for delivery soon.
• Cash Position -- $176.5 million in cash at quarter-end, including funds earmarked for vessel acquisitions; restricted cash of $45 million was deposited to reduce loan interest to 0.5% all-in.
• Debt Structure -- Balance sheet debt of $683 million, book leverage at 41%, with market-adjusted net LTV at just over 30% pro forma for acquisitions.
• Financing -- Three new bank loans executed totaling $190 million with tenors ranging 7-9 years and margins from SOFR plus 120–130 basis points, enabling elimination of all legacy sale-leasebacks.
• Cost of Debt -- Weighted average loan margin reduced to 1.47%, a 200 basis points improvement versus pre-SOFR transition, with consolidated debt projected over $750 million and $15 million annual interest savings expected once new financings are fully drawn.
• Commercial Performance Relative to Peers -- VLCC earnings were 28.5% higher and Suezmax earnings were 20% higher compared to reported peers; in Q2, VLCC and Suezmax spot bookings are 45% and 24% higher, respectively, versus peers.
• Q2 Bookings -- 56% of VLCC spot days fixed at $223,900 per day and 60% of Suezmax days at $187,300 per day; fixed portion fleet-wide average rate is about $202,900 per day covering roughly half the quarter.
• Operational Utilization -- Entire fleet achieved perfect utilization during the quarter.
• AG Market Disruption -- Company estimates 17% of global VLCC supply, or 22% of compliant fleet, is currently trapped or waiting outside the Arabian Gulf due to Hormuz closure, with 55 VLCCs in ballast waiting for reopening earlier in the week.
• Order Book and Fleet Demographics -- VLCC order book represents 27.5% and Suezmax order book 28.5% of the respective fleets (including 3.3 percentage points shuttle tankers for Suezmax), but by 2030, 61% of VLCCs and 41% of Suezmaxes will be over 15 and 20 years old, respectively.
• Scenario Planning -- Management outlined three Hormuz reopening scenarios, all supportive for tankers; structural shortfall of 7.5 million barrels per day arises due to pipeline capacity constraints, requiring sea transport.
• Capital Allocation Policy -- CFO Sbarounis said, "we have been committed to distributing out as much as possible within the constraints of our capital structure," with payout ratio historically averaging around 90% of EPS.

RISKS

• Management acknowledged, "The only meaningful risk in this path is demand destruction if it drags on for too long."
• Chairman Alafouzos flagged a commercial decision as a mistake, stating, "fixing the Nissos Nikouria for 1 year at a net rate of $90,000 per day" underperformed actual spot market values.
• Longer ballast voyages for new Suezmaxes negatively impacted Suezmax earnings due to extended repositioning from Korea to West Africa.

SUMMARY

Okeanis Eco Tankers (NYSE:ECO) delivered record-high TCE earnings across its Suezmax and VLCC fleets, declared its largest-ever quarterly dividend, and executed major debt refinancings lowering its cost of capital. For clarity, all references to Q1 and Q2 in this summary refer to the calendar quarters ending March 31 and June 30, 2026, respectively. Market conditions were shaped by both exceptional tanker demand following Middle East disruptions and a historically tight supply landscape, with substantial portions of the global VLCC fleet idled or waiting and an order book unable to catch up with rapid fleet aging. The company captured significantly higher rates than peers in both recent and forward bookings, underpinned by flexible commercial strategy and strategic fleet additions. Management provided detailed structural analysis supporting a favorable tanker backdrop for multiple potential market scenarios but explicitly flagged demand destruction as a key downside risk if regional disruptions persist.

• Chairman Alafouzos highlighted that combined Q1 and Q2 earnings will be stronger than any previous full year in company history, and potential distributions "are approaching our original listing price in 2018."
• Of all available spot days for Q2, roughly half have been fixed at rates that are more than double the previous quarter's fleet-wide TCE average.
• The company expects to further expand its Suezmax fleet with upcoming newbuild deliveries, enhancing operational leverage to volatile regional freight markets.
• Detailed vessel age profiles demonstrate that, even with an elevated order book, supply dynamics remain tight due to a large retirement queue and limited return of dark fleet tonnage into the compliant trading segment.
• Strategic mistakes—such as the one-year charter on Nissos Nikouria—are being openly reviewed within the context of an overall outperforming commercial strategy.

INDUSTRY GLOSSARY

• VLCC: Very Large Crude Carrier, a tanker class typically carrying 2 million barrels of oil, forming a cornerstone of the company's fleet and global seaborne crude oil transport.
• Suezmax: The largest tanker vessel class able to transit the Suez Canal, generally carrying about 1 million barrels of crude oil, critical for regional and flexible crude trading routes.
• TCE (Time Charter Equivalent): A metric standardizing voyage earnings per day across various chartering structures, reflecting gross daily vessel revenue after voyage expenses.
• AG (Arabian Gulf): Geographic term referring to the Persian/Arabian Gulf, a primary crude oil export region heavily impacting tanker market dynamics.
• SOFR (Secured Overnight Financing Rate): The benchmark U.S. dollar overnight interest rate used to price floating rate debt facilities, replacing LIBOR.
• FFA (Forward Freight Agreement): Derivative contracts enabling charterers or owners to hedge or speculate on future freight rate movements.
• LTV (Loan to Value): Ratio of debt outstanding to the appraised fleet value, signaling financial leverage and covenant compliance.

Full Conference Call Transcript

Aristidis Alafouzos: Thank you for taking the time to join our Q1 2026 call. Q1 was a record quarter for our company. And Q1 plus Q2 combined will be stronger than any previous year in our company's history. In fact, the potential distributions tied to this half year are approaching our original listing price in 2018. It definitely was and is an exciting, stressful, challenging and demanding quarter. This cumulative pressure surely overshadowed the pleasure of earning so much for our shareholders, which is regrettable.

Q1 began with a sell-off in freight into mid-January, where the market turned by the continued exquisite fundamentals, Venezuela reopening, India diversifying imports and most importantly, the extremely rapid consolidation of the VLCC market by Sinokor-Aponte joint venture. This strength continued until February 28, where the war in Iran began and set off a 2-, 3-, 4-week period of unprecedented strength in the tanker market overall. Following this explosive and unbelievable period, the market found a balance at extremely elevated rates where the loss of cargo from Hormuz closure is offset by ton miles, inefficiencies, vessels trapped inside and vessels outside waiting for the Hormuz to reopen.

Earlier this week, there were over 55 VLCCs in ballast waiting outside the high-risk area for a potential reopening. This doesn't include vessels waiting around Sri Lanka, off India, Singapore and the Sinokor fleet. Values and time charter rates have also seen consistent and profound strengthening throughout the quarter. We are in a period of record income and the anchoring bias on values, freight time charter rates 20 years ago doesn't hold anymore. The market needs to recognize this. What is the natural ceiling where rates and values can go? Internally at OET and looking at Q2, one of our greatest challenges going forward is keeping tonnage available for the immediate exposure to a Hormuz reopening while optimizing our performance.

I hand you over to Iraklis to go through the financials.

Iraklis Sbarounis: Thanks, Aristidis. Let's have a look at this record quarter. We achieved fleet-wide time charter equivalent of about $93,000 per vessel per day. That's $106,000 per day on our spot and $104,000 on all operating VLCC days and $82,000 on our Suezmax operating days all being spot. We report adjusted EBITDA of $110 million, adjusted net profit of $89 million and adjusted EPS of $2.33. This is based on our average share count for the quarter. Our Board declared a 16th consecutive quarterly dividend of $2 per share. This represents 88% of our reported net income on our current fully diluted share count post our January equity transaction.

This is the highest quarterly dividend amount since the company's inception, although I assume everyone is already modeling our second quarter. Over the last 4 quarters, we have distributed $5 per share or 96% of our reported net income for the period. In January, we executed another successful and accretive equity raise of $130 million in gross proceeds against [Audio Gap] On Slide 5. Since our IPO in Oslo, we have distributed approximately 2.5x our initial market cap with over $550 million paid in dividends. Since we have had a fully delivered fleet in 2022, we have paid out 91% of our reported net income, clearly demonstrating our commitment to distributing value to our shareholders.

Slide 6, we show the detail of our income statement for the quarter. TCE revenue stood at $132.2 million [Audio Gap]. At quarter end, we had $176.5 million of cash that included a portion of the equity earmarked for the acquisition of the Nissos Tigani and Nissos Vous. We also had almost $80 million in trade receivables. Our restricted cash figure as of March 31 includes an amount of $45 million we have deposited on short term against one of our loan facilities, which has the feature thlegacy sale at it reduces the interest paid to just 0.5% all-in. On a net basis, providing a better return than what we can achieve under our time deposit rates.

We may roll forward such cash characterized as restricted or a different amount on a short-term basis, depending on our cash flow needs and applicable rates. Our balance sheet debt was $683 million. Our book leverage stands at 41%, while our market-adjusted net LTV basis latest broker values and pro forma for the acquisitions and recent transactions is now just over 30%. On Slide 8, looking at our fleet. I'm pleased to show the addition of our most recently acquired modern and high-spec vessels.

We have a total of 16 vessels on the water, 8 Suezmaxes and 8 VLCCs with an average age of only 6 years, which will further improve once we get delivery shortly of the Nissos Tigani and Nissos Vous currently under construction in South Korea. As a reminder, from a maintenance CapEx perspective, our only dry dock for 2026 is that of the Milos 10-year survey. Slide 9, moving on to our capital structure. This is a quarterly update that I have been personally looking forward to for a while. We recently announced 3 new financings for 4 vessels as follows.

We purchased back from its sale and leaseback and refinanced the Nissos Rhenia with a new $50 million bank loan maturing in 7 years, priced at SOFR plus 125 basis points. This transaction closed last week. We will purchase back from its sale and leaseback and refinance the Nissos Despotiko with another $50 million bank loan maturing in 9 years, priced at SOFR plus 130 basis points. This transaction is expected to close in early June. We have also signed a $90 million bank loan for the Nissos Tigani and Nissos Vous maturing in 8 years, priced at SOFR plus 120 basis points. The Tigani will close in a couple of weeks and the Vous in early July.

We have taken advantage of the very competitive financing market and our financiers appetite to transact with us. Our most recent transactions have demonstrated the relationships and track record we have developed in 2 key banking markets for us in Greece and in Taiwan. We now have staggered maturities all the way through 2035, extremely attractive pricing, and we have finally put behind us all our legacy sale-leasebacks. On Slide 10, we look at our pricing on a vessel by vessel. All our loans are now priced below 2% with a weighted average margin of 1.47%. That's an improvement of more than 200 basis points compared to where we were prior to the LIBOR to SOFR transition in mid-2023.

On a consolidated debt of over $750 million, that's pro forma for the upcoming drawdowns, that's an impact of more than $15 million a year, straight into the bottom line. Quarter-on-quarter for a while, we have been seeing the material improvement into our interest expense, and starting in Q3 of this year, when all this will have concluded, we expect to see the full effect. We're extremely happy with where we are today. But of course, by nature, we continuously monitor the market for opportunities that may further optimize our structure, trying to improve one or all aspects of our debt structure, whether it's pricing, tenure, amortization profile or other terms that might add flexibility and agility.

I will now turn it back to Aristidis for the commercial market update.

Aristidis Alafouzos: Thank you, Iraklis, and great job on the refis. Now as I said during the intro, Q1 was a record quarter for the company. Amazing fundamentals, Venezuela reopening, the consolidation of the VLCC market and likely the biggest shock to oil trading in the past 50 years, all converged in the same 3 months. We concluded fixtures in Q1, mostly realized in Q2 that we could never have previously found, absolutely remarkable. Fleet-wide TCE came in at $93,100 per day with $106,400 on our spot VLCCs and $81,600 on the Suezmaxes, and we achieved perfect utilization across the fleet.

One commercial mistake I want to flag was fixing the Nissos Nikouria for 1 year at a net rate of $90,000 per day. With hindsight, the market gave us much more spot market values. Separately, the Nissos Keros is currently stuck inside the AG, and we haven't added an additional line for her in the table. She is being compensated on a commercially agreed rate while she waits to get out. We took delivery of the Nissos Piperi and Nissos Serifopoula also in this quarter. The market was so firm that we're able to fix -- we were able to fix cargoes from West Africa on our first voyages and get them into our trading patterns.

But the ballast voyage from Korea to West Africa was far longer than the laden, which did negatively impact our Suezmax earnings. On the Suezmaxes, we focused on trading the ships in the Atlantic Basin. We did not fix any vessels into the East and kept the voyages shorter while focusing on optimization in our preferred trades. On the VLCCs, early in the quarter, we committed to longer voyages to lock in higher earnings, balancing with some shorter voyage in the East to keep our fixing exposure intact within the quarter. The strategy is what ultimately led to Keros being trapped inside the Hormuz, but the same strategy is what set up the Q2 numbers.

Comparing our Q1 against the peers who have already reported, we are at 28.5% higher on our VLCCs and 20% higher on our Suezmaxes. Looking at our guidance for Q2, I believe it is likely that our Q2 earnings will be larger than any previous year's annual earnings. And whether that holds up on Q2 alone or not, Q1 and Q2 certainly combined will be. As of today, 56% of our available VLCC spot days are fixed at $223,900 per day and 60% of our Suezmax days at $187,300 per day, giving us a fleet-wide average of about $202,900 per day on the fixed portion, roughly half of the quarter.

Comparing Q2 against our peers with reported earnings, we are about 45% higher on our VLCCs and 24% higher on our Suezmaxes. We were in the lucky position of having significant exposure right around the spike in mid-March for voyages that were affected in Q2. We're able to fix 2 ships load in Yanbu with huge rates, and we fixed the Nissos Despotiko on the long-haul voyage right at the top of the market. On the Suezmax side, the short trading pattern allowed us to do multiple runs into a rapidly appreciating market. Some of the fixtures concluded those weeks were frankly unbelievable.

One additional Suezmax newbuilding, the Nissos Tigani is scheduled for delivery during the quarter, which will further reinforce our exposure and give us exposure to a potential Hormuz reopening later this quarter. Moving on to Slide 14. We reuse this slide every quarter, and I'm very proud of it, almost as proud as Iraklis on his refinancing slide. We had a gain quarter-on-quarter of over $25 million just on our commercial outperformance. I hope an analyst or TradeWinds picks this up. But if our fleet earned the average of our peers who have reported in Q1, our EPS would be over $0.65 less. Since Q4 2019, we have generated approximately $256 million of cumulative outperformance versus our peers.

On Slide 15, I take 2 things away from this chart. Firstly, we have had consistently elevated earnings going back to September of last year. That underpins the fundamental strength of the current market, a strength that predates the geopolitical shock and has only amplified by it. And secondly, the consistent strength of the market following the loss of the AG barrels. The message of this chart is that the disruption created a spike, but the underlying market has held level. To frame the scale of this, roughly 14.9 million barrels per day of crude exports and around 35% of global crude ton miles normally transit to Hormuz.

This is the largest single point shock the tanker market has ever absorbed. The well-known effects are visible on this page, extended ton miles, vessels trapped inside the AG and the redirection of Saudi and UAE volumes from Yanbu and the Sea of Oman, which has been the single biggest mitigating factor since the closure. But I want to highlight one of the factors that I think is underappreciated by the market, the number of VLCCs waiting outside the AG for potential reopening. Earlier this week, we counted 55 VLCCs in ballast sitting outside the high-risk area hoping for the reopening.

And the figure does not include, as I mentioned earlier, vessels positioning further afield like Sri Lanka, off India, Singapore or the Sinokor fleet. When you put it all together, 63 VLCCs trapped inside the AG, over 55 waiting outside of the AG and roughly 36 holding at Yanbu, this is 155 VLCCs effectively removed from spot supply. On a global VLCC fleet of 920 vessels, that is approximately 17% of the worldwide fleet, either trapped or waiting. If we assume the compliant fleet is around 700 vessels, and this is what affects us, that jumps to 22%. That is a massive restriction on compliant supply and is very supportive of freight. One more dynamic to note.

In recent weeks, previously, we have seen reduced interest from Asian buyers for Atlantic barrels, which, in my view, reflects an expectation of the Hormuz reopening. The longer that reopening is delayed, the more those Asian buyers will be forced back into the market, from the Atlantic, which we are seeing this week, which would tighten supply further and push rates higher again. Now looking forward, on Slide 17, we lay out three scenarios we see for how it resolves. I want to be clear upfront. We do not take a view on the macro conditions deteriorating. Our scenarios are about the shape of the Hormuz outcome and not about the demand side. All three paths are supportive tankers.

What changes between them is the timing, the shape and the duration of this strength. Before I walk through them, the key number to anchor is that the pre-destruction Hormuz exports were around 14.9 million barrels per day. The total pipeline rerouting capacity is only around 7.4 million barrels per day. That leaves a structural shortfall of about 7.5 million barrels per day, which we can only clear via long-haul ton miles by sea. That gap is what underwrites the demand backdrop in every scenario. Scenario 1, continued closure. Pipeline rerouting stays maxed out. Asian inventories continue to drink, Western barrels reroute to Asia and the trapped tonnage inside the AG persists.

The result is long-haul ton miles maximized and the compliant fleet supply is structurally constrained. The only meaningful risk in this path is demand destruction if it drags on for too long. Scenario 2, partial reopening. Iraqi exports ramp up and others as well. There's roughly 3.1 million barrels per day of capacity that could come back relatively quickly. Floating storage gradually releases into the market and the Yanbu and Fujairah rerouting continue at capacity. There are less Western barrels flowing east, but vessel repositioning will affect supply due to vessel repositioning. The whole scenario depends on transit normalization holding. Scenario 3, full reopening. Middle East exports normalize over, let's say, about 3 months.

And importantly, that is the same dynamic we saw with Venezuela. Any national oil company-linked sanctioned tonnage might find its way back, but the broader fleet stays isolated. On top of that, you would see Asian and SPR restocking demand coming through. There is an initial spike as oil storage drains and restocking provides a ton-mile tail and supported demand and returning supply moderates rates over the medium term, supportive. We assume that cargoes will only be lifted on conventional vessels. On Slide 18, beyond the Hormuz dynamic and directly linked to the current situation is another structural tailwind sitting in plain sight inventories.

OECD commercial inventories have been drawing and are sitting well below the 5-year range as you see on the right-hand side of the graph, and to this, the U.S. Strategic Petroleum Reserve. Inventory builds translate directly into tanker demand, which we read as positive. Slide 19, the order book, a topic that is starting to become relevant and it was a few quarters ago. Yes, the order book is up. VLCCs stand at 27.5% of the fleet. Suezmax is at 28.5%, although about 3.3 percentage points of the Suezmax number is shuttle tankers. On the face of it, that is a large number, and I understand the reflex.

There is an old saying in shipping that given enough time in a good market, owners will find a way to shoot themselves in the foot by over-ordering. And I will be first to admit historically the saying has not been wrong. But I would argue the cycle is slightly different. And the reason is on the right-hand side of the page and is supported by the next page as well, where we dive a little bit deeper into the actual numbers. Even today, in '26, 48% of the global VLCC fleet is over the age of 15, 22% is over 20. By 2030, those numbers grow to 61% over 15, and 41% over 20.

The Suezmax picture is essentially the same. Now if you also have a shadow or dark fleet, which sits within the higher bracket of the above, we know for certainty that most of the vessels will never come back. When you take those vessels out of the supply equation altogether, and we should because they're not competing for the same cargoes as we are, the compliant supply picture gets meaningfully tighter. So yes, the order book is up, but the aging fleet plus the dark fleet isolation gives you, in my view, a structurally tight compliant market for the next couple of years. The numbers on the next slide make this clear.

Slide 20 takes the point I just made and puts it into absolute numbers, which I think is the cleanest way to see it. On the VLCCs, fleet of 919 vessels today, order book of 250. By 2028, cumulative deliveries, including what has already arrived year-to-date, gets you to 184 vessels. But over the same period, 265 vessels will be over 15 years old, while 124 will be over 20 and 90 will be over 25. By 2030, you have 250 cumulative deliveries against 375 vessels over 15, and 180 20-plus. Put simply, 250 deliveries chasing a retirement queue of 375 ships. The order book doesn't catch the aging fleet. On the Suezmaxes, the same story.

By 2030, 204 deliveries against 274 vessels over the age of 20. That is the structurally tightness I was describing about in the previous slide in absolute numbers. So to tie the above altogether. On the demand side, we have the Hormuz ton-mile reset, inventory restocking ahead, plus all the fundamentals that existed prior to the Hormuz situation. On the supply side, we have a record order book that still does not catch a wave of vessels reaching the end of their useful life. Both sides of the equation point towards the right. Now I'll pass it to the moderator for the Q&A.

Operator: [Operator Instructions] Your first question comes from the line of Kristoffer Barth Skeie with Arctic.

Kristoffer Skeie: Congrats on a record Q2 bookings, really impressive. It has been quite right to keep the fleet open. But what we see now is that term rates are sort of creeping back up again now. And you see 1-year TCE on VLCCs around 120. So my question now is more on commercial strategy. Would you be keen to add more coverage, given that your targeted quite right in 2020 would be interesting to get your take on it.

Aristidis Alafouzos: Kristoffer, thank you for your question. I mean we even mentioned on the call the mistake of fixing the Nikouria on the $90,000 per year. So I think at this point, the time charter market isn't that interesting for us. And especially given the reopening of the Hormuz and how aggressively the rates can go up in that case, it will probably just one voyage at those rates, it will outperform even in a moderated spot environment afterwards any 1-year time charter. But just to add some more color to your question, we're also seeing significant increase in longer-term charter rates on all sizes. And I think the VLCC market for 3 years should be closer to the 70,000 mark.

Operator: Your next question comes from the line of Liam Burke with B. Riley Securities.

Liam Burke: Can we go back to your scenario 3 of a post-Strait of Hormuz opening? Would you anticipate whenever more normal times occur that there'll be more demand out of the Atlantic because buyers of crude would like to diversify away from the Mid East? And what would that mean for the demand on the Suezmax side?

Aristidis Alafouzos: Sorry, Liam, can you repeat your question? It came in a bit muffled.

Liam Burke: Okay, sure. Post -- at scenario 3, you discussed a where the Strait of Hormuz is completely reopened. What I was asking was, is there a situation where buyers of crude would want to diversify away from the Mid East, even with an open strait and buy more out of the Atlantic and what that would mean for the Suezmax understanding the low order book relative to the age of the fleet?

Aristidis Alafouzos: Thank you, Liam. I got the question now. It's a good question. And I think the -- we've also speaking to some refiners and charters but -- and reading news in the media. It's obvious that some of the Asian countries that have a very high reliance on AG crude will need to diversify going forward. And like, for example, the Japanese have 90% of their crude imports from the AG. That will have to meaningfully come down. And it may come from imports from West Africa or Brazil or the U.S. Gulf. So I think at the beginning, at least of the Hormuz reopening, everyone will buy whatever crude they can get their hands on.

But then as we move into more of the medium term where there is like more strategic and medium-term approach towards buying crude, they're going to start diversifying their purchases. Now in terms of the Suezmaxes, -- all this reopening and this diversification of crude purchases for strategic geopolitical reasons create inefficiencies. And the Suezmax is often a very versatile vessel that does well when the market is inefficient. And there's trading patterns that are less accustomed to, and people need options and there's different ports. So I think that generally, on a relative basis over the past 5 years, we've been able to outperform the VLCCs on our Suezmaxes.

And I do think that the Suezmaxes will still be very strong assets going forward compared to both the larger and smaller crude tankers.

Liam Burke: Great. And then just quickly, your operating cash flow was -- should probably be stronger in the second quarter. And I know you're taking 2 deliveries of 2 Suezmaxes later in the year. But post delivery, your capital allocation, I presume, is going to remain the same with the priority on returning cash to shareholders? Or is there any thought about accelerating debt reduction?

Iraklis Sbarounis: Liam, it's Iraklis. Absolutely, our capital allocation policy will remain the same. We have been committed to distributing out as much as possible within the constraints of our capital structure, of course. As we have explained in the past, it's not possible for us to maintain 100% of our EPS distribution given our capital structure and cash flow, but we aspire to increase that as much as possible, and we have been averaging around 90% for a while. Obviously, we have added already 2 Suezmaxes at the beginning of the year. We're going to be adding a couple more over the next few weeks or through the middle of the summer.

So our fleet has expanded a bit, and that should be reflected in how we approach our capital structure and balance sheet. But having said that, we will, of course, continue to distribute as much as possible.

Aristidis Alafouzos: Yes. And this has -- I mean, as a company, we're very comfortable with our LTV -- and if anything, it's probably on the lower side, but we're very comfortable with that. And we prefer, given our comfort to return our profits to shareholders directly rather than paying down debt in advance of the normal repayment schedule.

Operator: The next question comes from the line of Even Kolsgaard with Clarksons Securities.

Even Kolsgaard: So my first question is about your second quarter bookings. Obviously, super strong. But if you look at -- if I look at your fleet today, you can see that most of them are actually -- or almost all of them, if you look at the fleet are now open. So could you give us some color on the number of days for the remaining open days, get a sense of how the second quarter could come?

Iraklis Sbarounis: Yes, it's Iraklis. Sorry, a part of your question was a bit muffled. I think you inquired about our Q2 guidance and the impact, I guess, of how our bookings are recorded into our books and the impact of ballast days. Is that right?

Even Kolsgaard: Yes, that's right.

Iraklis Sbarounis: Okay. Perfect. Sure. So yes, as we have explained in the past, given our accounting policies, revenue recognition has an impact when we look at cutoff days between quarters. Rest assured that, obviously, when something is not booked in the previous quarter, we obviously pass it on and recognize in the following quarter. And we have seen in the past certain instances where this came into play. And that was also the case a little bit with our Suezmaxes in Q1 with certain fixtures that came in late in the quarter. For Q2, it's a little bit early to be able to have visibility on the ballast days of the quarter.

We still have 1.5 months ahead of us -- so depending on how the vessels trade, there may be some impact. But obviously, if you look at it from a TCE perspective, this gets averaged out.

Even Kolsgaard: Yes, that makes sense. And another one, which you touched upon briefly. So where do you want to position your fleet at the moment? And if you do see a reopening of or when you see a reopening of the Strait of Hormuz? Do you then want to, or do you want to take a risk and wait and see for when that opens? Or do you rather want to trade in the Atlantic until you are certain that the Strait of Hormuz is open?

Aristidis Alafouzos: Sorry, again, it's a bit muffled. Your question is whether we want to trade in the Hormuz if it reopened?

Even Kolsgaard: As a rule, do you want to take the risk and wait outside the Hormuz at the moment? Or do you prefer to just stay away until it actually is open?

Aristidis Alafouzos: No. Look, that's a good question. And if you take -- I mean one thing, just to give you some numerical examples, if you open -- if one of our VLCCs opens in Singapore today, and we ballast to the AG and we wait a whole month and we fix TD3 voyage, so AG to China and where the futures are pricing, I guess those would be July days. The vessel would earn $300,000 a day. I assume if you wait an extra 60 days, you'd earn $200,000 a day, a bit less. So clearly, at least where the future, the FFA market is pricing the AG reopening, the market is going to be extremely firm.

Just -- I mean, the way that we kind of thought about it is that, if you usually fix cargoes from the AG 3 weeks ahead, and there's around 160 cargoes a month recently, that's about 110 cargoes in the -- over 3 weeks. So usually, a cargo will fix 3 weeks ahead, like I said. But today is day 0 and 3 weeks is day 21, you need to cover for 110 cargoes. So I think all these ships that are sitting outside will be absorbed very, very quickly. And that doesn't even include whatever production -- or not production, but whatever exports can be increased because of crude sitting in storage.

So I think the immediate reopening will see a huge like sucking of whatever prompt tonnage is available in the area. So I mean, you need to be a bit careful because, okay, the future market might be wrong, it could be a little bit lower or it could stay closed for a lot longer. But the 30 days waiting to do a TD3 and earning $300,000, while the market today on the cargoes that we're looking at are between 120,000 and 150,000 is a big difference.

I think we've seen companies like Sinokor who are willing to just take the risk and look for the maximum upside and just wait on some ships as a general chartering strategy as a company. We've been a bit more pragmatic and looking to find the optimal cargoes that we like and not have too much waiting. So we need to do a bit of a combination. I mean we made a bit of a matrix internally, and we want to make sure that we have ships, there are at least a ship every week that could be in the area to do an AG cargo.

But I think it would be quite risky just to park everything outside of the AG and wait. And then Iraklis would start yelling at me because we wouldn't recognize any income for the rest of Q2. So we have like a huge Q3, but the Q2 actuals will come off a bit.

Iraklis Sbarounis: Even will be asking questions about it, but that's okay.

Aristidis Alafouzos: So we're balanced. I mean we're going to try to make sure we don't lose all our exposure to reopening on any given date, but we can't just sit everything off there and be completely risk on. The other good thing is that we have a Suezmax that was fixed East, so she'll be open in the East in the next month. And we also have the 2 newbuildings, which will be delivering end of May. So that's like mid- late June date for the AG and the other one is July. So we have 3 Suezmax in our whole VLCC fleet that will have exposure to the reopening at some point in the next few months.

So I think we're in a relatively good position on the bigger ships.

Operator: Your next question comes from the line of Climent Molins with Value Investor's Edge.

Climent Molins: Most has already been covered, but I wanted to ask you about the G&A for the quarter. I'm guessing there was an impact due to the offering to acquire the last 2 Suezmaxes as well as for bonuses. But where do you see the run rate for Q2 and thereafter on a, let's say, normalized basis?

Iraklis Sbarounis: Yes. You're right. This is more a timing issue. We expect -- we currently expect to finish the year maybe slightly higher than last year, 10%, 15% higher, something like that. But obviously, from a timing perspective, Q1 has been much more heavy than the rest of the quarters. The rest of the quarters, I expect we will go back to the usual run rate and spread relatively evenly at the moment. Just keep in mind, we also face because quite a lot of our expenses, including G&A, are in euros. So exchange rates -- the volatility on exchange rates also plays a role.

Climent Molins: Makes sense. And this one is just to confirm regarding the vessel trapped inside the AG, you showed 39 days fixed in Q2. Will the $74,000 per day be payable until it gets out?

Iraklis Sbarounis: Yes. I mean, under our commercial agreement, yes, we obviously have to show the number as of the latest information. And so long as it remains in, that's the number for now.

Operator: There are no further questions at this time. I will now turn the call back to Iraklis for closing remarks.

Iraklis Sbarounis: Yes. Thanks, everyone, for dialing in. As you probably are, we're also looking forward to our next update in early August. Thank you very much.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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