Scorpio Bulkers (SALT) Q2 2018 Earnings Conference Call Transcript

Scorpio Bulkers (NYSE: SALT)
Q2 2018 Earnings Conference Call
Jul. 23, 2018 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

[Operator instructions] Hello, and welcome to the Scorpio Bulkers Inc. second-quarter 2018 conference call. I would now like to turn the call over to Hugh Baker, chief financial officer. Sir, go ahead.

Hugh Baker -- Chief Financial Officer

Thank you, operator. Thank you for joining us today. On the call with me are Emanuele Lauro, our chairman and chief executive officer; Robert Bugbee, our president; and Cameron Mackey, our chief operating officer. The information discussed on this call is based on information as of today, July 23, 2018, and may contain forward-looking statements that involve risk and uncertainty.

Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release that we issued today as well as Scorpio Bulkers' SEC filings, which are available at www.scorpiobulkers.com. Call participants are advised that the audio of this conference call is being broadcast live on the web, and is also being recorded for playback purposes. An archive of the webcast will be made available on the Investor Relations page of our website for approximately 14 days.

Now, I'd like to introduce Emanuele Lauro.

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Thank you, Hugh. Welcome to our second-quarter earnings call, everybody. Thank you for your time today. I will keep my comments brief here as it is pleasing to report that the company is making good progress on all its key operational and financial fronts.

Supply side factors in our industry remained benign, and as such, fundamentals continue to work in our favor. Although we acknowledge the macroeconomic factors could actually put the market recovery in jeopardy. We must respect the tone of negative macro commentary and the risk of a global trade war leading to a broader policy-driven slowdown. I have little to add to this noise, except that we are vigilant and watchful.

Near term, notwithstanding the escalating trade tensions, we have not seen any direct evidence of trade tensions decelerating Chinese economic activity or demand on our trade routes. We are pleased with the quarterly performance and the forward-bookings that we are announcing today. Should weakness occur, even if we don't expect it, we are well-suited to withstand more volatile markets. Through a combination of positive cash flows, the closing of recently announced sale-leasebacks and refinancing of existing commercial loans, we intend to increase, or have intended to increase, SALT's liquidity over the coming weeks.

Our balance sheet is well-positioned and we continue to bring our cost of debt finance lower. The company took delivery of its last newbuild vessel in the quarter, the SBI Lynx, a Kamsarmarx vessel. with our modern Echo spot fleet, we'll retain the operational and financial gearing to the steady recovery, which is so attractive to those of you who hold our shares. With that, I will hand the call back to Hugh Baker.

Hugh Baker -- Chief Financial Officer

Thank you, Emanuele. I'm pleased to announce positive net income of $800,000 and EBITDA of $28.1 million for the second quarter. The company also announced a dividend of $0.02 for the quarter, and I can confirm that no stock has been purchased since Q1. During the quarter, our Ultramax vessels earned $11,569 per day and our Kamsarmax vessels, $12,283 per day.

As of today, I can guide you that our Ultramaxes have earned $10,963 for 46% of the days of the third quarter, and our Kamsarmax have earned $13,374 per day for 47% of the days of the third quarter. Also, as Emanuele mentioned, we're also pleased to announce that we took delivery of our only remaining newbuilding vessels, SBI Lynx, which is a Kamsarmax in June. As of now, we have no vessels on order. Emanuele also mentioned that our balance sheet is well-positioned.

During the quarter, we drew down on our previously announced $12.8 million credit facility for SBI Lynx, we closed two previously announced lease financings for $36 million in aggregate, and announced a new $30 million credit facility to refinance two vessels. Our cash position today is $80.5 million, and we will continue to strengthen our balance sheet for a program of refinancing existing debt through new higher advanced, but lower cost loans and leases. We're very pleased with the support we have received from our key lenders and expect this to continue with refinancing, and we expect to continue this refinancing process in a fruitful and methodical way. I can guide you that we do expect to announce additional refinancing during August, which will substantially increase our liquidity position and financial flexibility going into the fourth quarter.

With that, I'd like to open the call to questions.

Questions and Answers:

Operator

Thank you. Our first question comes from Jon Chappell with Evercore. Your line is now open.

Jon Chappell -- Evercore ISI -- Analyst

Thank you. Good morning. Hugh, on the last point, on the refinancings, it's interesting to see still doing sale and leaseback transactions. Obviously, from Scorpio tanker side, that seems to be from a little bit forced to do that to kind of repair the balance sheet but from a Scorpio Bulkers standpoint, you already have a pretty robust balance sheet.

So why are you still choosing sale and leasebacks, is just that another arrow on the quiver? Does that address some of the macro risk that Emanuele is talking about? Or how do you view sale and leasebacks versus kind of just normal course refinancing?

Hugh Baker -- Chief Financial Officer

John, that's a very good question and I'm going to give you a very sensitive answer. The sale and leasebacks that we have engaged in at Scorpio Bulkers are slightly different from the sale and leasebacks that we've engaged in with Scorpio Tankers. The primary reason for the sales and leasebacks is because of the terms that they offer. The Scorpio Tankers sale-leasebacks are principally from Chinese leasing companies, and they display I think very favorable terms but the Scorpio Bulkers sale and leasebacks are different.

They're with different counterparties. They're not with Chinese leasing companies. And what we're seeing is very competitive terms on a single-ship-financing basis. And we are opportunistically taking advantage of these single ship financings to execute the sale and leasebacks that we have.

To give you an idea, they tend to have high advance rates, much higher than the sort of 60% advance rates you would normally see in bank finance, but the margin and pricing for these sale and leasebacks is actually lower than in our normal bank financings. So what you're seeing is and I think, that we are seeing 5-year fixed financings at a floating rate of LIBOR that is below 2% and we feel that's very competitive. And on an opportunistic and individual basis, we may continue to do that.

Jon Chappell -- Evercore ISI -- Analyst

OK, that's helpful. And one follow-up, I'm sure regulations are going to dominate this earnings seasons. You guys are first. You get to address it first.

A lot of the people use the S word but maybe let me ask you all differently. Your fleet is incredibly modern. I think there's two 2014s, everything else is '15 or newer, which would mean normally your first drydocking doesn't come until 2020, but do you expect any off-hire time ahead of 2020 associated with ballast water treatment installation or any other installation to meet upcoming regulations?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Jon, maybe I can take that. We continue to evaluate scrubbers. I think most in the community admits now or agree that the case for scrubbers is more compelling the larger the ship size, whether it's containers wet or dry. We continue to look at them, but we haven't yet gotten to the point where we feel that it's a good use for capital for Scorpio Bulkers.

That has to do both with the technology and technological risks, regulatory risks and most importantly, for smaller vessel sizes, the availability of HFO in holding them secondary or tertiary bunkering course post-2020. There may be a point where it becomes compelling, but it isn't to us today. But as and when we get closer to 2020, we'll see how the facts from the ground change.

Jon Chappell -- Evercore ISI -- Analyst

OK. Thank you, Em. Thanks, Hugh.

Operator

Thank you. Our next question comes from Randy Giveans with Jefferies.

Randy Giveans -- Jefferies -- Analyst

Thanks, and good morning, guys. First and foremost, congrats on the first-ever quarterly positive EPS. So hopefully more to come there. Two quick questions.

Currently, manageable leverage over [Inaudible] cash as you said. We're expecting pretty significant cash in the back half of 2018 and beyond. So as such, when looking at the dividend, how and when do you decide to increase it, or should we expect kind of dividends to stay at that $0.02 per quarter for the foreseeable future?

Robert Bugbee -- President and Director

Randy, it's Robert. I think we're going to take things one step at a time and that we went through, we'll take it from the fourth quarter last year, we did some very significant investments, grew the fleet by 20%, 25%, virtually using all cash. In the first quarter, we did another couple of things, in the first and second quarter. So basically, we're consolidating the balance sheet, keeping everything steady.

And now that we're hearing from Hugh at the beginning of this third quarter, the end of the second, we're trying to get the benefit of this through financing. I mean, Hugh has been pretty modest about what's he achieved in these sale-leasebacks, they really are incredibly good financing for the company, very high leverage against an extremely low fixed cost. So they do a number of things in terms of balancing out in a perhaps increasing interest rate curve. And the next thing that we're doing is we are taking the net benefit of a stronger balance sheet and refinancing at much lower cost than rate and so longer tenure and taking advantage not only the increased strength in the balance sheet and cash flows but increase in the value to the company to refinance the other part of the balance sheet in terms of some of the commercial loans that are either a little bit or older or were put in place when the company's balance sheet was weaker, and the dry market and the company wasn't strong enough.

Is that really what are going to be focusing on. And at this point, we haven't had any discussions other than accomplishing that. And that, we hope to pretty well have done by the next time we talk on the third quarter.

Randy Giveans -- Jefferies -- Analyst

All right. So $0.02 of the foreseeable future, got it. Going, I guess, you answered part of it with that question but looking at share repurchases, you did 1.2 million shares and average price of like $7.39 during 1Q '18. But as you mentioned, in the call, or Hugh did, during Q2, no share repurchases despite the share price dipping below $7 for a few days there and now still at $7.30, well below NAV.

So should we expect either share repurchases for debt repurchases here in 3Q '18? I know you're focusing on the balance sheet. But that this.

Hugh Baker -- Chief Financial Officer

We're going to focus on the balance sheet. We're not going -- the only comment I'll make to share repurchases is that we were locked up or we were in a blackout period when -- you can't always come, as a company, unfortunately, come in on those days where the stock is under pressure. In those periods, you're talking about where the stock traded in the 6s. I think those are at the -- the fair thing to do is to create a -- we own -- we're right alongside shareholders as management and insiders here, and we're [Inaudible] the strongest value we can, and the strongest value that we think at the moment is to spend this time taking the dividend as it were improved position of the company, and refinancing for much cheaper and better terms structurally going forward.

And that will then give us an amazing ability. I mean, if you imagine, $1 worth of cash on the company at the moment but it's not unreasonable to think that we could have at least $2 of cash on the balance sheet come the next time we talk on the earnings. And as you know, every sort of $10 million above your free cash flow or freedom cash is incrementally and more valuable. So for us, I think it's a question of being patient, obviously, becomes, a little bit more tempting just to take advantage if you have those really weak days and you're not blackout or restricted on windows and there's a volume there.

Otherwise, the company is going to focus on its mission to create a position between its modern fleet that really is very well-prepared for IMO '20. The fact that the fleet is on the spot market so it's very well-prepared for what we see as improving fundamentals. The balance sheet that is the world as good as extremely well-prepared of that size of buybacks and/or dividends. And also, if over this next two to three months, something unfortunate does happen in the world's macro outlook, the company is extremely prepared for that.

That, I think, is the things worth concentrating on.

Randy Giveans -- Jefferies -- Analyst

All right. Great to hear from you, Robert. All right. Thank you very much.

I'll pass it on.

Operator

Thank you. Our next question comes from Amit Mehrotra with Deutsche Bank. Your line is now open.

Amit Mehrotra -- Deutsche Bank -- Analyst

OK. Thank you. Hi, everybody. So the cash breakeven, I guess, obviously, in the second and third quarter, you're running above cash flow breakeven.

Cash flows accruing to book equity and equity holders for the first time, even, I think to Randy's point. If that trend continues, just related to all these questions around focusing on balance sheet, but you're already at 50% net LTV, there's obviously, a lot of opportunities out there from a growth perspective. If surplus cash flow, over and above debt amortization kind of starts to inflect higher, are you more inclined to delever the balance sheet further? Or are you more inclined to maybe return to growing the fleet in kind of a prudent way?

Hugh Baker -- Chief Financial Officer

Well, I think we spent the last two quarters and during the third, we're halfway through the third quarter, where we are pretty well shown the inclination which is to delever the balance sheet, increase liquidity. So as we can either take advantage of, let's say, any dislocation between what is the best fleet we should buy out there, which is our own fleet through buybacks or distributing value to shareholders. So there's not a -- we haven't really shown a strong inclination to grow the fleet further, which we think is substantial enough from an operating position. The other thing is that we left ourselves the opening in the last conference call, which we would restate that if there's something, start the line and you've got something that is particularly special out there, that a unique situation with modern ships at the right structure and whatever, of course, you would look at it.

So far, it's fairly rare to get that at the moment.

Amit Mehrotra -- Deutsche Bank -- Analyst

If I could do just maybe ask the question in reverse. Robert and Emanuele, if you look at SALT in addition to SALT, you obviously also owns the world's largest product tanker company, I would say, SALT is clearly, I would say, if it's fair to say a different company than when you envisioned it first back in 2013 when you floated it or a little earlier than that. We're also in an environment for many other companies whether it's [Inaudible] are sort of in growth mode or in looking to add high-value kind of young tonnage like what you have. So in that context, would you ever think about rolling the equity of SALT into another [ travel ] company and then maybe allowing yourself to give more attention to the product tanker size when you are the biggest and maybe there's more opportunity from a regulatory standpoint? I know the question is a little bit about the left field but just trying to think about how you think about that.

Robert Bugbee -- President and Director

Well, I think there are individual positions, to start with. It's a public company regardless of how much the inside its own self, it's a public company. So it's a hypothetical question until somebody actually makes a worthwhile offer. And -- or until the company itself, like in the case of a previous company called [Inaudible] management manage where the company felt that the upside was there to just -- was the right time to actually put the market for sale.

So until that time is whatever. The role you -- the role in that -- yes, I mean, you have to keep them separate, it's not...

Amit Mehrotra -- Deutsche Bank -- Analyst

Yes, maybe it's also an unfair question on a public call, so I fully understand that. Just one quick one for Cam, if I could. Just on Jonathan's question on IMO 2020, which I think that was a question he may be want to IMO 2020 for some reason, but I think related to IMO 2020, outside of scrubbers, could you just update us on your thoughts in terms of expectations around just based on your conversations with some of your fuel suppliers and things like that, what is your latest thoughts on where the spread between low and high sulfur fuel could go, because that seems to be kind of the big question mark? And then related to that just on the operations side, if we do see the -- is there like some formula or help or a little thumb that we can think of to try to understand the relationship between the cost of fuel, of bunkers, versus the kind of the speed of the vessel? I've heard numerous things out there in terms of exponential relationships between speed and propulsion, and so just any help there to help understand what the opportunity could be in terms of slow statement of the travel fleet?

Cameron Mackey -- Chief Operating Officer

Sure, no problem. Let me take the second one first. So as you may know, whether it's cars, airplanes, buses or ships, conventional engines follow an exponential power curve. So it is correct that by -- it depends on the design rating of the engine.

But in most circumstances, by cutting your speed by 20% or 30%, you can save maybe 50% on your fuel consumption. That will may not apply to all ship types and all transportation type but if you look very quickly at where a nominal rating lies on that exponential curve, you could see that there's an outsized benefit in consumption by reducing your speed just a little bit. So slow steaming indisputably provides great savings. And the question really is, at what cost, at what cost charter and at what opportunity cost for the vessel.

So it depends on the state of the market and obviously, what the customer wants. Going back to your first question, it is a very mixed bag on what the availability of different fuels would be, and what their relative pricing will be post-2020. Many believe that the spread, which comes somewhere in the high 300s will expand materially as we get toward 2020. I would caution, however, that there are a number of blended product coming to market, which in certain circumstances, can be quite useful substitutes for distillate post-2020, post regulatory role out.

And then how the market are just both in terms of pricing, but as importantly, in terms of availability and physical supply is still very, very much in question. I think the early adoption of larger ship types, the big container ships, the larger bulk carriers, the large tankers obviously, give us a good feeling about availability in some key global course, this sort of positive edge analysis developing is around fuel availability looks quite good. But when you get into smaller ships that have to bunker in, in areas way off those main trade routes, it's still very, very unknown and uncertain whether the benefit of a scrubber can be realized because you won't be able to find fuel. That is in doubt, the environment is changing rapidly and we're watching it.

Amit Mehrotra -- Deutsche Bank -- Analyst

Yes. One very, very quick one, and then I'll leave. On just your comment about blending down high sulfur fuel into more compliant fuel. Is it just the weighted average, i.e., if in order to blend down high-sulfur fuel into 0.5 or lower compliant fuel, you just need two to three times as much low-sulfur fuel to bring that down, is that how we should think about it?

Cameron Mackey -- Chief Operating Officer

No. Well, first of all, I won't purport special expertise here. You should really talk to the refining analyst. But my understanding is it's a combination of desulphurization, so additional steps in the refining process and blending down fuel with other feedstocks.

So it's not quite the simple but -- and therein lies the question on where those blends lie in the spectrum between -- in specification and pricing -- between distillate and heavy.

Amit Mehrotra -- Deutsche Bank -- Analyst

Got it. OK. Thank you so much for answering my question, guys. Good quarter.

Appreciate it.

Operator

Thank you. Our next question comes from Magnus Fyhr with Seaport Global. Your line is now open.

Magnus Fyhr -- Seaport Global -- Analyst

Yeah. Hi, good morning. Just two questions left as a follow-up on the capital allocation. I mean, your stock trade, pretty significant discounts NAV vis-à-vis the peer group.

It sounds like debt-reduction remains a focus for SALT. Can you elaborate on any targets over the next 12 months as far as debt-to-cap ratios?

Hugh Baker -- Chief Financial Officer

No. I think that we've elaborated enough by saying that we're spending this quarter, and we'd expect to put ourselves in a position where we have around $2 a share or whatever if cash on the balance sheet. And I didn't say that we were having a priority going forward on debt reduction. I said our priority was to create liquidity and refinancing in terms of a beneficial way to our improved position.

In fact, I think what I said is what we'll concentrate, take advantage of doing that, get liquidity to $2 a share or so, which will then give us various options at that point, which would include dividends, stock buybacks, other things. When it comes to buying ships, we've already have said to the previous question that except for a rare opportunity, which we don't necessarily foresee, we think we have a large enough fleet. So you should be able to triangulate from that point where we go from there.

Magnus Fyhr -- Seaport Global -- Analyst

OK. Well, thanks for clarifying. Just a follow-up or a question on the rates in the quarter. I know we're in this kind of seasonally weaker part of the year.

It looks like the spread between the Kamsarmax and Ultramax has increased here in the third quarter. I mean, is it -- can you explain that? Or is it just kind of in the seasonally weaker period where the bigger ships may get little a bit better bid?

Hugh Baker -- Chief Financial Officer

I think you've got -- I think it's more positive than that. I would say that the Ultramax has been doing fine for these last two quarters. If you put the second and the third as it is together, that's a great improvement over last year in what you correctly identified as a seasonally weak period. I think the oddity in this and I think you're going to, is it that the Capes and the Kamsarmax are just strong for a weak quarter, which is much more positive.

I think it's very interesting that ahead of the seasonally normal stronger quarter, the fourth quarter for Capes and Kamsarmaxes, you've just this sort of early start coming right now. I think it is a very, very good thing that I think it's going to be echoed by other owners as they -- as we Kamsarmaxes and Capes as they come to the earnings call. So I wouldn't see this as a negative in the Ultramaxes. The Ultramaxes on a year on year is very positive growth development.

And just simply rather, a big positive to the Kamsarmaxes and the Capes.

Magnus Fyhr -- Seaport Global -- Analyst

OK. I mean, Is there anything fundamentally, I mean, you're carrying a lot of coal -- anything you can talk about both in India and China as far as their purchases here?

Hugh Baker -- Chief Financial Officer

As I think that Emmanuel alluded to in the first part of the call and the earnings agreement further than that, so far we are only seeing positive developments and demand out of China out of India in terms of the commodity and have not yet seen any negatives as a result of economic or tariff or trade threats.

Magnus Fyhr -- Seaport Global -- Analyst

All right. Great. Thanks. That's it for me.

Operator

Thank you. Our next question comes from Noah Parquette with J.P.Morgan. Your line is now open.

Noah Parquette -- J.P.Morgan -- Analyst

Hey, thanks. We've heard that some explorers in the U.S. are thinking about sending soybeans down to South America before they're exported to China. Have you heard anything regarding that or have you seen anything like that that would support that in your fleet movements? And on the soybean issue, where do you guys think that U.S.

exports should go [Inaudible] China?

Hugh Baker -- Chief Financial Officer

It's a difficult one. I was down in Pennsylvania this week with a, talking to a soybean farmer who has 1,700 acres of soybeans, who was putting a brave face on it and sort of saying, 'Oh well, I've got the ability to store it up, I don't have to sell at  these really distressed prices.' But probably you have to start selling. So I think it's a difficult dynamic -- because simply because the price of soybeans themselves have fallen now in the U.S. more than the 25% of the tariff.

So you could just have the Chinese buying. At their all-in cost, shipping is fairly cheap. So for the Chinese, it's almost like so what, they're still buying net to them delivered at the same prices as before the tariffs were put in. You could have that.

So it's a hard one to handicap. And as you pointed out, if the tariffs do hold in pricing, people find ways around. So it wouldn't surprise me at all if they were to send ships to send soybeans to South America. I mean, we've seen this type of aberrations, where when the free trade is interrupted, we see this in the product market.

You've had U.S. petroleum products shipped because you can't do the cabotage [Inaudible] ways of avoiding that legally. So we just have to wait and see on the pricing day to day.

Noah Parquette -- J.P.Morgan -- Analyst

OK. Thanks. I just had one other, on 2020 obviously need to be finding new uses for fuel oil. One is power generation.

Have you guys given any thought to how that could impact coal electricity generation?

Unknown Executive

Noah, it's James. We worked briefly at a BTU comparison between the two and even at $100 a ton for coal, coal is still more efficient. But yes, there are possibilities that some of that could be used. But from a BTU standpoint, the coal even at $100 a ton is still more efficient, probably at least by two times as much.

Noah Parquette -- J.P.Morgan -- Analyst

OK. That's a -- that's great. Thanks.

Operator

Thank you. Our next question comes from Fotis Giannakoulis with Morgan Stanley. Your line now open.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Yes. Hi, guys. Hugh, I was very pleasantly surprised to see this very competitive sale and leasebacks financings. I'm trying to understand, whether it's providers of this type of capital? And how much availability there is for the broader market, this type of deals? Is there a new pocket of money that can replace the European bank lenders when they're shrinking?

Hugh Baker -- Chief Financial Officer

First, as I said earlier, it's not Chinese leasing companies, but I don't really go into too much detail beyond that. What I can say is that it is a generally done on a one or two vessel discrete bases. So it's generally not done in the same kind of quantity as we say as, for instance, Chinese leasing which generally require -- the sweet spot for Chinese lease transaction is generally north of $100 million, between $100 million to $150 million. So it is opportunistic one to two ship-leasing transactions but again, all very competitive on the fixed rate pricing that they offer.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Can you give us some sense of how much capacity these providers have, is this a one-off deal, one of -- some source of capital, has some specific? Or it's a group of potential lenders that they can provide widespread financing to the market?

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Let's put it this way, Fotis, we hope to absorb most of the company ourselves. So I wouldn't get excited and consider this as an alternative sources of financing going forward.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

That's very helpful, Emanuele. Thank you.

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Sure.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

And one more about the market. If you can -- people asked earlier about rains and the impact of the tariffs. I want to ask, the different type of commodities since you're transporting a very wide range of cargoes. How they have been performing.

Obviously, iron ore seems very strong. I'm wondering more about coal given the fact that China has said that they will increase domestic production. And if you can give us other sort of changes that you have seen in the trade among the smaller commodities?

Robert Bugbee -- President and Director

Hey, Fotis, on the coal side for China, it's hard to determine really what their approach will be. In terms of their imports relative to their consumption, I think they import something like 180 million metric tons, but they consume over 3 billion. So we have seen demand from both India and China for higher-quality coal, that, less-pollutive. In terms of the smaller commodities, bauxite, cement, logs, a lot of fertilizer coming from the U.S.

go to Europe have all been quite strong. Grains as well quarter over quarter. I would say that there hasn't been this is really one that has stood out relative to others because you're still pretty much renting the same space at the same price. But I think that global synchronized GDP has really benefited most segments.

I don't think we've seen anything yet in terms of different grain and soybean movements but it will really depend on kind of the announcements that come.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

And last about the Atlantic market, in the previous quarter, saw some unusual weakness. Sales Atlantic market normalize based on what we've seen from the Kamsarmax rate. And any impact -- lasting impact from the situation with bauxite with their [Inaudible] what we saw earlier, has this trade normalized now?

Robert Bugbee -- President and Director

I'd say that the Atlantic market has recovered, and it's probably more normalized. In terms of the bauxite, I haven't seen anything. We haven't had any situations where our vessels were affected by that directly obviously, the market as a whole. But other than that, I would say more normalized.

I'd say the Kamsarmaxes have definitely better benefited when you have Capes last week at $25,000 a day whereas as the Ultramaxes, as Robert mentioned, year over year are stronger but there's about 25 to 30 different cargoes that are carried on those Ultramaxes. And got 30 ships or something. So it's not one commodity, I would say.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Thank you very much, gentlemen.

Operator

Thank you. Our next question comes from Ben Nolan with Stifel. Your line is now open.

Ben Nolan -- Stifel Financial Corp. -- Analyst

Yeah. Thanks. So a few questions. I guess, related to where you are saying as a company.

It seems as though, and Robert, you alluded kind of being a plateau. You have now delivered all the ships and don't necessarily have aspirations and needing to grow further. Is this -- and the financing is largely done, although it sounds like there could be a little bit more to do. But isn't this an opportunity to look and see maybe if there are some opportunities or belt-tightening or anything else, do you think there's capacity to maybe squeeze more blood from the rock from a cost perspective here?

Robert Bugbee -- President and Director

I think that the -- look, we're doing -- clearly, there's capacity to make the financing more efficient as it were. And we had way, you may not see an absolute dollars or percentages but you're going to be, and we already are in an inflationary environment related to cost, that's not necessarily potentially as we go forward. And you're always doing what you can to be efficient, but you're not going to compromise on your standard. I don't think you're going to be able to improve your -- we're normally going to give up.

We're not going to follow other owners into non-IPF cruise and other examples. I don't know, Cameron, Emanuele, would you like to add to that?

Hugh Baker -- Chief Financial Officer

Naturally, Ben, then -- there are places where we should continue to see some efficiency to Robert's point. And that some of the function of maturity and also [Inaudible] properly run in after a year or two on the water. But apart from gradual improvements quarter over quarter, we're not inclined to make any sudden changes in our offerings.

Ben Nolan -- Stifel Financial Corp. -- Analyst

OK, that's helpful. And then maybe for Hugh kind of along those same lines, particularly after assuming there's a few of these sale-leasebacks. Are there any color, guide you may be able to give us as what to the spread relative to LIBOR should look like and sort of done?

Hugh Baker -- Chief Financial Officer

Yes, Ben. I mean, what we're seeing is that the company, as for our recent announcements, generally speaking, we would expect to secure financing in the sort of low LIBOR plus 200 range. The last two financings were at LIBOR plus 225 and LIBOR plus 240. I would say that the LIBOR plus 240 had financing had a very low fee, whereas the LIBOR plus 225 had a more normalized fee.

So I think we're very comfortable we're going to be financing in the sort of the mid- to low-200s over LIBOR and again, the lease financing, we're securing is generally marginally below 200 over LIBOR, if it's converted into a floating rate finance. So we don't see that changing too much. And I think the market for spreads from banks does change over time. But as a general point, I think we are where we are.

Ben Nolan -- Stifel Financial Corp. -- Analyst

OK. All right. I appreciate it. Thanks.

Operator

Thank you. We have no further questions at this time. I would now like to turn the call back to Hugh Baker for any further remarks.separate

Hugh Baker -- Chief Financial Officer

I have no further -- we have no further remarks. Thank you all for joining us today, and we look forward to speaking with you all soon.

Operator

[Operator signoff]

Duration: 47 minutes

Call Participants:

Hugh Baker -- Chief Financial Officer

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Jon Chappell -- Evercore ISI -- Analyst

Randy Giveans -- Jefferies -- Analyst

Robert Bugbee -- President and Director

Amit Mehrotra -- Deutsche Bank -- Analyst

Cameron Mackey -- Chief Operating Officer

Magnus Fyhr -- Seaport Global -- Analyst

Noah Parquette -- J.P.Morgan -- Analyst

Unknown Executive

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Ben Nolan -- Stifel Financial Corp. -- Analyst

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