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Scorpio Bulkers Inc  (NYSE:SALT)
Q1 2019 Earnings Call
April 29, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Hello and welcome to the Scorpio Bulkers Incorporated First Quarter 2019 Conference Call. I would now like to turn the call over to Hugh Baker, Chief Financial Officer. Please go ahead, sir.

Hugh Baker -- Chief Financial Officer

Thank you, operator. Thank you all for joining us today. Welcome to the Scorpio Bulkers' first quarter earnings call. 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.

Earlier today, we issued our first quarter earnings press release, which is available on our website. The information discussed on this call is based on information as of today, April the 29th, 2019 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 purview 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 and sec.gov.

Call participants are advised that the audio of this conference call is being broadcast live on the Internet 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.

In addition to this call, there will be a short presentation available at www.scorpiobulkers.com on the Investor Relations page under reports and presentations. If you have any specific financial modelling questions, you can contact me later and discuss offline.

Now, I'd like to introduce Emanuele Lauro.

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Thank you, Hugh and thanks everybody for being with us today. Welcome to the first quarter call for Scorpio Bulkers. The result serves to demonstrate the resilience of the Company through a testing period in the dry bulk space. This quarter, there had been some particularly unhelpful headwinds, of which you will hear more of during the call. Against this backdrop, we continued to generate positive operating cash flow and have further enhanced our balance sheet flexibility.

As the past few months have demonstrated, we should expect the unexpected. That said, the forward market and the recent acceleration in US and Chinese GDP indicate that the worst may now be behind us. Although the dry bulk shipping will always be subject to the noise of the macro economy, shareholders can rightfully expect management to make informed technical, commercial and financial decisions through these peaks and troughs. Seen in that context, this quarter has been one of marked progress and we are quietly pleased with how the Company is positioned. Commercially, we have made selected disposals of tonnage where we believe the price offered represented good value for the Company. Furthermore, our decision in the second half of 2018 to take selected time charter coverage through this period has proven to be right. Technically, we remain engaged with a significant dry docking program, which will leave much of our fleet, scrubber equipped, furthering its best-in-class position as a go-to modern, cost efficient fleet into the dislocation of IMO 2020.

Financially, we have engaged in selective sale leasebacks improving the balance sheet liquidity. This serves to demonstrate our access to top lenders worldwide and market leading rates for finance. Our clear intention is to return more cash to shareholders when the market allows. With this in mind, we have renewed the buyback authorization and reduced our cash operating expenses year-on-year; the timely investment in STNG shares when mark-to-market continues to pay off handsomely for SALT shareholders.

With this, my remarks are closed and I would like to hand over the call back to Hugh.

Hugh Baker -- Chief Financial Officer

Thank you, Emanuele. I would like to refer you all to the presentation in respect of today's earnings release, which supplements the information provided by the release. The first quarter of 2019 was an eventful quarter for the Company. During the quarter, we made a net loss of $3.5 million which amounted to a loss per share of $0.05. This included a $15.5 million, $0.23 gain on our investment in Scorpio Tankers and a $7.5 million, $0.11 writedown of assets held for sale. As a result, adjusted net income was $4 million, $0.06 a share excluding the writedown of assets held for sale. Adjusted EBITDA was $32.8 million.

Revenues for the first quarter were $50.4 million, which can be compared to the $54.3 million for the same quarter of 2018. Revenues were driven by Ultramax time charter equivalent earnings of $9,177 per day and Kamsarmax time charter equivalent earnings of $11,176 per day. Since the beginning of the current quarter, we can guide you that we have booked Ultramax time charter equivalent earnings of $9,779 per day book to date in Q2 -- in the second quarter of 2019 and Kamsarmax time charter equivalent earnings of $10,711 per day book to date in Q2 2019.

Our liquidity position as of April the 26th was $57.9 million in cash. Our fleet size has reduced during the first -- during the quarter due to the sale of two 2015-built Kamsarmax vessels for $48 million. Upon the completion of this sale during the second quarter, the Company's liquidity will increase by $18.6 million.

Capital expenditure of $3.7 million was incurred in the first quarter of 2019 for exhaust gas cleaning systems or scrubbers. Total capital expenditures to date on scrubbers has been $6.4 million. Full details of our expected future CapEx, scrubber CapEx program amounting to $120.6 million is contained in the earnings press released and the supporting presentation. In this respect, I'd like you to refer you to our most recent investor presentation, which is also on our website where we provide the basis behind our decision to install scrubbers not least through the calculations supporting the fuel savings we expect to generate from installing them.

The Company also executed and commenced various financings to increase liquidity. We sold and leasebacked three Ultramax vessels and four Kamsarmax vessels, which will increase liquidity by $57.2 million in the aggregate. In a separate transaction, we sold and leasebacked one Kamsarmax vessel, which will increase liquidity by $6.9 million. We sold and leasebacked six Ultramax vessels in a further transaction increasing liquidity by $62.4 million (ph). And finally, we sold and leasebacked two Ultramax vessels, which will increase liquidity by $17 million in the aggregate. I can also announce that we've raised $46 million through the financing for scrubbers. That is the upsizing of existing loan facilities.

Please (technical difficulty) announced $41 million of new financing, but over the last few weeks, we've achieved credit approval from two additional financial institutions to increase this amount by an additional $5 million to $46 million. The upsizings cover eight loan facilities supported by 10 lenders and we appreciate the support. If we add three of the lease financing's which include scrubber finance, we have 13 lenders financing scrubbers on 49 of our vessels. I'm aware that there have been recent changes in the financing of our fleet and for those investors or analysts who want to model our future debt, we have provided a detailed facility by facility overview of our future amortization schedule on Page 7 of the earnings presentation.

In respect of our liquidity position, I have mentioned that the Company has raised substantial amounts of new liquidity over Q1 and to date in Q2 in relation to the sale of the two vessels, the four (ph) sale and leaseback transactions and the upsizing of existing loan facilities. These liquidity raising announcements add up to a total of $208 million and are sufficient to pay for our scrubber program and also to repay our $73.6 million of bonds due in September. We continue to monitor our liquidity and expect to announce further more modest liquidity raising initiatives going forward.

The Company's Board of Directors declared a dividend of $0.02 per share on April the 26th, 2019. No stock has been purchased to date in 2019. As of April the 26th, 2019, $50 million remains available under our stock buyback program.

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

Questions and Answers:

Operator

(Operator Instructions) Our first question or comment comes from the line of Jon Chappell from Evercore. Your line is open.

Jonathan Chappell -- Evercore ISI -- Analyst

Thank you. Hugh, thanks for all the transparency in the presentation and the press release. Just a quick follow up on one of your last comments you made about continue do modest liquidity raises. Should we expect further sale and leasebacks given the fact that asset values have held up kind of relative to the market or are there other leverage you are thinking about pulling?

Hugh Baker -- Chief Financial Officer

I think as we said -- I think we're continuing to monitor our liquidity and we expect modest advancements going forward in that.

Jonathan Chappell -- Evercore ISI -- Analyst

All right. Scrubber financing, if we take all the facilities --

Hugh Baker -- Chief Financial Officer

Please -- Jon, please. Completely scripted on that, that may extend beyond, no (ph) sale leasebacks into possible sales too, we wouldn't write that out.

Jonathan Chappell -- Evercore ISI -- Analyst

Okay. That makes sense. On the scrubbers, you've raised -- if I add up everything, about $71 million of new financing potential for those out of $127 million CapEx. So it's a little under 60%. Is that a level you feel comfortable with or are you still looking to raise additional financing for the scrubber CapEx?

Hugh Baker -- Chief Financial Officer

No, I think we're done on the scrubber CapEx. Like I said, we've essentially received for (ph) scrubber financing on 49 of our vessels. The remaining five vessels are vessels under Japanese sale leaseback arrangements where the leasing counterparties are not providing scrubber finance. So I think that in respect of scrubber financing specifically, I don't think we're going to do any more. We're very happy with what we've done.

Jonathan Chappell -- Evercore ISI -- Analyst

All right. And if I tie everything together then, you've obviously achieved a lot on the liquidity scale and you have a pretty nice mark-to-market on STNG right now. Maybe time to take a victory lap and sell some of the STNG or you still think it's too early in that cycle and you'll look to raise liquidity in other avenues.

Hugh Baker -- Chief Financial Officer

Well, we think STNG's got a long way to go. It's not about declaring victory laps, it is about making money and we think the product market is coming along very well, in some senses is ahead of expectations, we're just coming to the end of a really deep refinery turnaround and all the data we're getting whether it's a long term time charters or increase in traded volumes or consolidation on the margin would indicate that very shortly the product market is going to start to put itself in a position to give off some pretty extraordinary numbers.

The STNG, Scorpio Bulkers management thinks that STNG's value -- NAV is closer to 40 (ph) than any other number. So we think there's a lot of upside in STNG and the liquidity measures we've done have been particularly designed to ensure that, remember we started back in January, February when it was unclear what was going to happen in trade disputes of the world or in some sense the world's view is worse than where it is today. It was designed so that we could really hold STNG shares for a long time and be in a position as shareholders to really benefit from what we expect to be a significant appreciation in those shares.

Jonathan Chappell -- Evercore ISI -- Analyst

Okay. Thank you for your answers and thanks again for the transparency in the releases.

Operator

Thank you. Our next question or comment comes from the line of Amit Mehrotra from Deutsche Bank. Your line is open.

Amit Mehrotra -- Deutsche Bank -- Analyst

Thanks, operator. Hi, everybody. I wanted to follow up on that last question because I think it's important in the context of just understanding what Scorpio Bulkers is just given that so much of your net asset value or fifth (ph) of the net asset value of the Company is attributable to the stake in STNG. So, Robert, it's obviously being a great investment, maybe the Company's best investment since inception, but there's also to be fair there's been criticism about the corporate governance implications rightfully or wrongfully, but that's just the fact. So obviously STNG is in a different place now than when you made the investment for the better. SALT's financial position and balance sheet, you guys are doing a lot of capital structure gymnastics given where the dry bulk market is. So why not release some of that balance sheet capacity, it accomplishes a lot of things, it alleviates some of the corporate governance implications or conclusions some people have reached. SALT gets better and then STNG's float further gets better for people -- broader market participants to participate in this product tanker up cycle. So why wouldn't you take some money off the table there?

Hugh Baker -- Chief Financial Officer

Well I guess that we felt that we did this in the best practice of way of doing it in good governance. The independent board directors made the decision under the guidance of their own counsel and their own investment bankers. So we felt that the way the investment was made was in line with good practice of corporate governance. We understand some of the criticism out there, but providing its legal and above board, I would have thought that good governance starts with making money and value for the shareholder and that's what the investment with STNG has done and that's what we expect it to continue to do in the future.

And as we explained, it is way too early to take an investment off when -- a few times, I mean you pointed out best investment. Well, this could well be the best investment this management has ever made in any area in terms of timing or shipping over the years because what's happening in the product market is something that a regulation has created on top of already tightening supply and demand and tightening price has now created a tremendous demand catalyst in what --

Amit Mehrotra -- Deutsche Bank -- Analyst

Yes, but do you understand what the -- this is a call -- conference call for a dry bulk company and we've spent more time talking about the product tanker market than the dry bulk market, isn't that weird to you? And so the question is, is that, when you meet investors, how do you pitch Scorpio Bulkers? Do you pitch it as a dry bulk company with an option on a product tanker company, isn't that kind of weird? And so, are you sacrificing Scorpio Bulkers for the outlook for STNG, which is clearly better and bigger and I'm just trying to understand where it strategically fits?

Robert Bugbee -- President and Director

Okay, so strategically, we made a decision back in October/November. It's pretty -- we put out a lot of our vessels on time charter. We didn't expect the market to -- let's say come under the pressure of the -- what happened with Vale, but we certainly expected at that time that the product market would -- because of its unusual phenomenon be in a position to materially outperform the dry cargo market during this period. Now that doesn't mean that we sell up every single thing right now and go into products. We took and we became the largest shareholder in what we considered the best product tanker company there is in the world and that's great and that's an investment. And in the meantime, the company has continued to -- continues to have the youngest mid-small size dry cargo fleet there is in the world and will benefit from that. We expect when the recovery comes in or will continue its progress once hopefully the US and China reach a trade agreement and there's world (ph) position, but the job -- it's a very, very good opportunity that came around and when I first started shipping -- actually forget about the past, nearly all of the billionaires of shipping actually have diverse portfolios. They really don't see anything wrong in making money first and that's what happened here.

And if in the future, SALT continues to look at and continues -- the board decides to continue to judge its investments based upon what it thinks is going to be its greatest returns, then fine, it may decide to be at its core, a dry bulk owner and around the edges invest opportunistically in the arbitrage that Wall Street provides from time-to-time. We haven't come to that conclusion. All we're doing right now --

Amit Mehrotra -- Deutsche Bank -- Analyst

Got it. So SALT are now -- is SALT a diversified holding company now, is that the way we should interpret it. I'm just trying to understand what you're saying? Is that the case?

Robert Bugbee -- President and Director

I don't know -- we haven't got to that decision yet. Right now, it is what it is, it's primarily a dry bulk company that happens to have -- be the largest shareholder in the largest product tanker company at this moment in time.

Amit Mehrotra -- Deutsche Bank -- Analyst

Yeah.

Robert Bugbee -- President and Director

We will see how this develops over time.

Amit Mehrotra -- Deutsche Bank -- Analyst

Okay. (multiple speakers).

Emanuele Lauro -- Chief Executive Officer

To echo what Robert is saying, I don't think we are sacrificing SALT in any shape or form. We were opportunistic and we took the opportunity to invest in product tankers. The management team has done this in the past, publicly and privately with investments in shipping and not (ph) but you may remember the gas investment, the crude investment, the container investment that the management team has done while involving other companies. If they were opportunistic -- we were opportunistic then and we've been opportunistic in October from a SALT perspective to look into STNG. That's it. I don't think we can look into more or conclude where SALT is going to go because if you look at -- if you take the STNG investments off SALT now, the market has done nothing, the dry cargo market unfortunately has done nothing in the last four, five months or six months and we would still be -- we will still own and operate the largest medium-sized dry cargo fleet and more modern medium-sized dry cargo fleet over there on the market, but we wouldn't have gained or lost much. That's what I'm saying.

Amit Mehrotra -- Deutsche Bank -- Analyst

No, that's fair and I'll hop off now. Just the only last thing I'll say is that when you say opportunistic the implication is -- there's a buying and selling going on and I guess that's the only point I just want to know. Clearly, I've been a fan of the investment in STNG, so I get it, but the VLCCs that you bought a while ago with STNG, you sold them? Right? And so you crystallized that value. It just seems to me based on what Robert was saying, five, six years from now, we could be sitting here still -- on the balance sheet still having that investment in STNG and I wasn't sure if it's an opportunistic investment or a strategic investment we should (multiple speakers).

Robert Bugbee -- President and Director

I don't think, I don't think, I don't think in five or six years you'll be having -- I'll make it simple, we don't think in five or six years you will have the investment on SALT's balance sheet. I do think that very clearly right now, we think that STNG is in a fantastic place for at least the next two or three years, now whether it takes off its stock at $60 or it takes it off at $70 or $80 or whether it's dividends part of it along the way, we don't know yet. We just know that $25 (ph) or we believe rather that $25 is just right at the first steps of a fantastic potential move in the product market in Scorpio Tankers.

Amit Mehrotra -- Deutsche Bank -- Analyst

Okay. That's fair. Thanks for taking my questions everybody. Appreciate it.

Robert Bugbee -- President and Director

Okay. Thanks again.

Operator

Thank you. Our next question or comment comes from the line of Gregory Lewis from BTIG. Your line is open.

Gregory Lewis -- BTIG -- Analyst

Good morning, everybody. I just had a question. You guys, you know, you've clearly been pretty opportunistic (inaudible) in the sale and leaseback of your fleet. Is there any sort of point we should think about where (technical difficulty) certain percentage of your fleet versus how much you're willing to actually put on sale and leaseback. And really what I'm getting, do you view sale and leasebacks much different than you do (technical difficulty).

Hugh Baker -- Chief Financial Officer

I think you've answered the question in sort of the last part (ph). The sale and leasebacks are very similar to the bank debt essentially on balance sheet debt. They are all based (ph) on (technical difficulty). Pricing tends to be slightly higher, but only slightly. (technical difficulty) few years ago, (technical difficulty) I think that we continue to monitor this. Again, I think we expect to (technical difficulty) we might make a few small changes, but essentially we don't see us doing a lot more sale and leasebacks at this time.

Gregory Lewis -- BTIG -- Analyst

Okay. Great. And then just (technical difficulty).

Hugh Baker -- Chief Financial Officer

The stock is trading at that time and even more so now that STNG has moved up, the stock was trading significantly below net asset value and I think that selling those assets at those price is -- was the most (technical difficulty) just doing sale leaseback isn't quite as flexible, long term in what you can do here (technical difficulty) by selling a couple of assets like we did at significantly (technical difficulty)

Gregory Lewis -- BTIG -- Analyst

Okay. So it could be (technical difficulty) buy back any stock in the first quarter you sold these vessels (technical difficulty) out of the fleet at some point in the second quarter and at that point maybe we could (technical difficulty) with that cash from these vessels we could see you guys start up the buyback that maybe --

Hugh Baker -- Chief Financial Officer

Maybe, I mean, well we're not going to telegraph that, but what I would say is that when you're doing so much refinancing et cetera et cetera, regardless of what liquidity you think you're doing in the first (ph) quarter, you would not be buying back stock in the middle of going to credit committees et cetera et cetera.

Gregory Lewis -- BTIG -- Analyst

Okay everybody, thank you for the time.

Operator

Thank you. Our next question or comment comes from the line of Randy Giveans from Jefferies. Your line is open.

Greg -- Jefferies -- Analyst

Hey, gentlemen. This is Greg on for Randy. Thanks for taking the call this morning. So a question on scrubber install cadence. Why are you guys installing until 4Q 2020, is that just have to do with coinciding the dry docking for the vessel with the scrubber install or is it shipyard space for retrofits that the constraint there kind of will you walk us through the idea there?

Cameron Mackey -- Chief Operating Officer

Yeah, hi, Greg. Cameron here. It's a combination of factors as you've described. So it's a rather complex optimization problem where you have vessels that are due for statutory dry docking, you have commercial considerations around positioning vessel, you have manufacturing constraints around the supply of the scrubbers themselves and then, of course, you have the available space in established ship repair facilities that can install and commission the scrubbers. So it's a combination of things. Now, others might promote that they can install scrubbers with vessels afloat or go to some unproven or out of the way repair facility.

We don't in general embrace those views or agree with those views. So this is a well-thought-out methodical process of the installing scrubbers and like I said the biggest savings comes from lining up that installation where (ph) already mandated dry docking and that reduces your off hire significantly. So that's what explains the timeline we've put in place.

Greg -- Jefferies -- Analyst

Okay and then lastly on that, I see in the kind of guidance that you guys provided in this table on the press release that you have $1.5 million that you're going to defer till Q1 2021. Is that just a timing issue or what's up with that payment?

Hugh Baker -- Chief Financial Officer

It's simply in accordance with the contracts.

Greg -- Jefferies -- Analyst

Okay. Okay. Makes sense. All right, so on another kind of idea here on share repurchases, why didn't you guys decide to make any share repurchases in Q1? And then also if you could reconcile in the press release the difference between the 71 million shares that you discussed in the balance sheet and in the dividend commentary and then the difference between 67 million that is in the income statement.

Robert Bugbee -- President and Director

Okay. The second Hugh can do that offline too. The first is a combination of two things. One is we were doing a lot of transactions in the first quarter and a lot of those are involving credit with lenders, credit with lessors et cetera, et cetera and the best thing to do always in situations like that is to keep the balance sheet as stable as you can. The second thing is that you actually need an open window in which to do it though we're doing so many transactions that I think the amount of days that the Company had an open window between either earnings or blacked out as a result of the transactions prevented it completely.

Greg -- Jefferies -- Analyst

Okay. Perfect. Well, thank you. That answers all my questions. Appreciate it.

Operator

Thank you. Our next question or comment comes from the line of Erik Hovi from Clarksons. Your line is open.

Erik Hovi -- Clarksons Platou Securities -- Analyst

Hey guys. Just a market-related question. So we are now seeing that South American grain and soybean exports are expected to exceed last year's volumes and further we saw that China now has bought 10 million tonnes (ph) of soybeans from the US last week. So given that the 100 year marking of the Communist Party comes in 2021, do we expect to see some Chinese stimuli and imports supporting dry bulk market going forwards?

Robert Bugbee -- President and Director

Yeah, we expect subject to the -- it's rational to us that the -- more than that, that the US and China will come to an agreement. We've still got some reasonably healthy growth out of China. Definitely the US economy is in OK (ph) shape and the sort of turbulence around other matters is coming to an end and you're seeing -- the irony is that our markets have been bidding (ph) up quite consistently all the way from -- let's say the middle of February in a very gentle way.

And so, yes, we're expecting this market to go forward and I think that's exciting. We're not suffering from what the cape sizes have suffered from. We do have -- expect to have growth in our field and if we noticed, the supply side of Ultramax's et cetera is pretty low, in terms of we're through the major part of deliveries.

So that side makes us confident that we have a dry cargo company that is in the right area at the moment that the cash flows are positive and remain positive over the bad. And as I said -- the manual said look we are still got the newest fleet, a very significant fleet in the public markets for dry cargo and that's where if you reverse what some of the other analysts said, 80% of the NAV is in dry cargo. So we felt no reason to do anything, but to tune the Company in terms of liquidity to ensure the safe passage through the uncertainties and take some insurance, but our base models are very optimistic for the core business of SALT going forward now.

Erik Hovi -- Clarksons Platou Securities -- Analyst

Great. Thanks. So just also to follow up on the previous scrubber question. So you have some updates on when you will start fitting? So far we have seen 13 (ph) Utras and Kamsars having fitted scrubber so far. And we see another 99 are reported for fitting. So how do you view the timeline for your guides versus your peers?

Robert Bugbee -- President and Director

So Cameron can go into detail, but I think most of our peers aren't doing scrubbers at all. If we look at the dry cargo market itself, the total dry cargo market.

Erik Hovi -- Clarksons Platou Securities -- Analyst

No (inaudible) there are 99 as we see them at least.

Robert Bugbee -- President and Director

It's 99.

Cameron Mackey -- Chief Operating Officer

Yes.

Robert Bugbee -- President and Director

And what's the (multiple speakers).

Erik Hovi -- Clarksons Platou Securities -- Analyst

Sorry guys, I didn't catch that.

Robert Bugbee -- President and Director

Well, the total fleet of Kamsars and Ultras is much higher than 99.

Erik Hovi -- Clarksons Platou Securities -- Analyst

Yeah, yeah, well the total fleet close to 500, I guess, but that's mostly on the bigger ones.

Cameron Mackey -- Chief Operating Officer

I'm sorry, maybe we misunderstand the question. Are you talking about the timing of the process by which we're installing scrubbers or our decision to install scrubbers in light of being a minority in the --

Erik Hovi -- Clarksons Platou Securities -- Analyst

No. The timing --

Cameron Mackey -- Chief Operating Officer

No. So as I mentioned before, the time or duration of a scrubber installation and commissioning is about 30 days off hire. And so we have plans to install scrubbers to try and minimize that time and also to maintain our commercial exposure largely balanced toward the western hemisphere Atlantic market and in light of other constraints around manufacturing and say installation availability at certain shipyards that we know can do the work, can do it on budget and on time. So when you look at all these constraints in total, that's really what dictates our installation program. Could we have done it earlier? Of course, but in light of the earlier risks around this time last year, around potential delays of implementation and other uncertainty, we felt that this was the right installation schedule for our fleet considering those constraints and the relevant risks involved in the capital commitment.

Erik Hovi -- Clarksons Platou Securities -- Analyst

Yeah. Makes sense. Thanks, guys. That's it for me.

Operator

Thank you. Our next question or comment comes from the line of Fotis Giannakoulis from Morgan Stanley. Your line is open.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Yes. Hi, gentlemen. Thank you. Cameron, this is probably for you. I want to ask you one company ask -- price risk of scrubber today and haven't been any preparation, what it would be the lead time both in terms of equipment manufacturer and also shipyard availability? And if you can give us a range, especially first-tier and second-tier scrubber installators?

Cameron Mackey -- Chief Operating Officer

Thank you, Fotis. It's not an easy question. There are competing technologies and yards and owners and manufacturers who will all tell you a story or sell you a song, but I think realistically, it would be 18 to 21 months. Largely the binding constraint there is first and foremost repair facility availability and then it would be the lead time around a proven manufacturer. There are a number of manufacturers that aren't proven. There are a number of repair facilities or installation methods which aren't really proven, but if you want to know what you're getting, I'd say 18 to 21 months or so.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Okay. That's very helpful. And the IMO 2020 day is approaching. I know it's probably a little bit on the early side, but I was wondering if there are any discussions with some of the charterers about period charters and what kind of difference do you see on the time charter market between a vessel with a scrubber and a vessel without the scrubber.

Cameron Mackey -- Chief Operating Officer

Thanks for the question. Others may join here, but the best example of that is on the larger vessels in new building where certain charters both in the dry bulk market and the tanker market and the container market for that matter have sponsored new buildings against long term charters where you can see the spread that IMO 2020 confers, and that spread obviously leads some sharing of the benefits to the charter and some to the owners. Now on Ultramaxs and Kamsarmaxs not so much. There are few examples in the market out there. We see regular inquiry all the time from charters wanting to fix our vessels either before and after the installation or only after, but I think at this point in time because we are confident in the spread, the fuel spread and we are confident in our assets and we are confident in our installation program that we're going to let this run a little bit before we give away a material portion of that benefit to a charterer, let alone, fix time charters at a point in the market that we don't feel is particularly attractive for us.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Thank you. And one last question about your installations. You mentioned that you are trying to match all the installations with dry docking. Did you have to accelerate dry docking, I understand that vessels they do not need to do a dry dock before there is -- the fifth anniversary since delivery. Most of your vessels are much young -- actually all your vessels are much younger than that.

Cameron Mackey -- Chief Operating Officer

No I didn't mean to suggest. And I apologize for the confusion. I didn't mean to suggest that all of our vessels need dry docking and that's when they're going to get the scrubber. Some of our vessels do in 2020, some in 2019, some in 2021, but we are trying to optimize our installation schedule around those vessels in the 2019 and 2020 window in order to minimize the time off hire. So I think it is the right thing to do when you're not sure what the freight environment and opportunity cost will be.

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Thank you. I appreciate your answers.

Operator

Thank you. Our next question or comment comes from the line of Liam Burke from B. Riley FBR. Your line is open.

Liam Burke -- B. Riley FBR -- Analyst

Thank you. You're serving fairly diverse markets. You touched on the soybean trade with China earlier in the discussion. Is there any parts of this diverse market that are rolling out better or worse than you'd anticipated as you're looking at the forecast for 2019?

Robert Bugbee -- President and Director

Not really. I mean, we -- so much of our expectations were related around the general trade negotiations. Obviously, we didn't -- it's not the market we directly in, but it clearly affects the psychology of the markets. We didn't expect the -- what's happened in the iron ore market as a result of the Vale incident, that's obviously a negative but then a plus and I think it's more of an important plus is that given the fact we haven't had a trade agreement yet, we're reasonably pleased with just generally the stuff we're seeing out of the China and the US related to their individual economies. So in that sense, the overall environment is healthy.

Liam Burke -- B. Riley FBR -- Analyst

And just touching on an earlier question on scrubbers being a competitive advantage. Obviously, you laid out the cost side and you mentioned on the newbuild side on longer term agreements. Are you seeing any kind of customer interest now on your current fleet?

Robert Bugbee -- President and Director

Well I think that rather than talk about our particular fleet, which, yes, I mean, we're a new fleet, so across the board of shipping, there are customers wanting and willing to pay more for vessels that have scrubbers especially if they're delivering in the middle of this year or the second or third quarter. And you only have to look to the iron ore market and see what 2020 recently done in a very weak -- this wasn't done in the last two weeks, they've done a couple of fixes that were really all about scrubbers and all about the willingness for the customer to pay up and secure that scrubber optionality.

Liam Burke -- B. Riley FBR -- Analyst

Great. Thank you.

Operator

Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.

Hugh Baker -- Chief Financial Officer

Okay. So thank you everybody. Look, I understand there are a number of things that we do or don't do at certain times that people have the information understand or don't understand, but general everything that guides us is that we're always reviewing all of our avenues all the time to maximize value for our shareholders and that's what we do, insiders ourselves own approximately 30% (ph) of this Company and that's our guideline is we're very aligned with the shareholders. We benefit from it and that's the judgment that we're doing. So thank you so much everybody for attending. Look forward to speaking to you in a few months.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone have a wonderful day.

Duration: 46 minutes

Call participants:

Hugh Baker -- Chief Financial Officer

Emanuele A. Lauro -- Chairman and Chief Executive Officer

Hugh Baker -- Chief Financial Officer

Jonathan Chappell -- Evercore ISI -- Analyst

Amit Mehrotra -- Deutsche Bank -- Analyst

Robert Bugbee -- President and Director

Emanuele Lauro -- Chief Executive Officer

Gregory Lewis -- BTIG -- Analyst

Greg -- Jefferies -- Analyst

Cameron Mackey -- Chief Operating Officer

Erik Hovi -- Clarksons Platou Securities -- Analyst

Fotis Giannakoulis -- Morgan Stanley -- Analyst

Liam Burke -- B. Riley FBR -- Analyst

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