Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Eagle Bulk Shipping (EGLE)
Q2 2020 Earnings Call
Aug 07, 2020, 8:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Greetings and welcome to the Eagle Bulk Shipping second-quarter 2020 results conference call. [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions] I would now like to turn the call over to Gary Vogel, chief executive officer; and Frank De Costanzo, chief financial officer of Eagle Bulk Shipping. Mr.

Vogel, you may begin.

Gary Vogel -- Chief Executive Officer

Thank you and good morning. I'd like to welcome everyone to Eagle Bulk's second-quarter 2020 earnings call. To supplement our remarks today I would encourage participants to access the slide presentation that is available on our website at eagleships.com. Please note that part of our discussion today will include forward-looking statements.

These statements are not guarantees of future performance and are inherently subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements. Please refer to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties that may have a direct bearing on our operating results, our performance and our financial condition. Our discussion today also includes certain non-GAAP financial measures, including EBITDA, adjusted EBITDA and TCE.

10 stocks we like better than Eagle Bulk Shipping
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* 

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Eagle Bulk Shipping wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of August 1, 2020

Please refer to the appendix in the presentation and our earnings release filed with the Securities and Exchange Commission for more information concerning non-GAAP financial measures and a reconciliation to the most comparable GAAP financial measures. Before we begin with our presentation, I would like to take a moment to extend our sincere gratitude once again to our vessel crews, who've been severely affected by the logistical restrictions and disruptions caused by the outbreak of COVID-19. Although crew changes have commenced again, and we've been able to successfully repatriate about 250 of our seafarers during the past two months, a number of our colleagues at sea are still working beyond their contractual employment periods and remain away from their families during this unprecedented time. With regard to our onshore staff, I'm pleased to report that the majority of our colleagues based in Stamford, Singapore, and Copenhagen have now returned to working from the offices, albeit in modified schedules and with safety protocols.

Although I was very pleased with how well we functioned as a company on a remote basis, I believe we're much more effective when working under one roof and collaborating as a team. Please turn to Slide 5. As we discussed on our last earnings call, our markets have been significantly impacted by the outbreak of COVID-19. And for the second quarter, the Baltic Supramax Index, or BSI, averaged just $5,484 per day, making it the second lowest period for Supramax's on record after only Q1 of '16.

Rates were $6,250 at the beginning of the second quarter and have traded down to a low of $4,208 by April 23rd on the back of short-term shocks to both cargo demand and cargo supply. With the market under such distress, our results were, of course, negatively impacted. Eagle generated a net TCE for the second quarter of $8,038 per day, down 20% quarter on quarter, but representing a significant heat against the market of almost $3,000 per ship per day, or roughly 56%. We were able to achieve this outperformance by continuing to successfully execute on our active management approach to trading and by benefiting from operating scrubbers on the majority of our fleet, as well as from the realization of fuel spread hedges we put on early in the year when spreads were wider pre-COVID-19.

As addressed during our last earnings call, we hedged about 120,000 metric tons of fuel spread exposure. Since then these hedges were placed during a higher spread environment, the P&L contributions from these derivatives is significant, equating to almost $10 million, of which approximately $8 million has already been realized through the first half of the year either as a result of contracts maturing or through the monetization of positions ahead of exploration. While the outbreak of COVID-19 and the subsequent OPEC price war have negatively impacted fuel spreads, by our calculations, we've generated more than $20 million on our scrubber investment in just the first six months. While this is less than our original expectations, it's a very meaningful contribution, especially given the global pandemic and its impact to fuel pricing.

Looking ahead, as of today we have fixed about 66% of our available days for the third quarter at a net TCE of $9,220 per day. Given the quick and sharp recovery in the BSI, we do not expect that we'll be able to outperform the market in this quarter. As we've discussed previously, there's an inherent lag in our business. And when the markets sell off quickly, our outperformance tends to improve on a short-term relative basis.

Conversely, when the market runs out quickly, our performance relative to the market tends to lag in the short term. That is why we have always advocated looking at performance over a trailing 12-month period. And as of today, our outperformance versus the index is almost $2,000 per ship per day over that period. To put this into perspective, this equates to about $37 million of incremental EBITDA as compared with earnings just index rates.

Please turn to Slide 6. Our operating performance, as represented by EBITDA, was significantly impacted by the market in the second quarter, reflecting the severe weakness in the underlying rate environment. While EBITDA was marginally positive, as shown in the graph, it would have been significantly negative, absent of the roughly $12 million we were able to generate in outperformance. We believe our ability to consistently outperform the benchmark index as well as our peer group is a very meaningful differentiator for Eagle.

Please turn to Slide 7. As part of our ongoing fleet renewal program, we have reached an agreement to sell the golden eye, a 2002 built Supramax for the gross price of $5 million. Over these past four years, we have renewed 40% of our fleet, having acquired and sold a total of 35 vessels. These S&P transactions have vastly improved our fleet makeup.

The average size of our ships has increased. The average age of our fleet has remained fairly static over the period. And as is illustrated in the graph on the lower right-hand corner of the slide, our fleet emissions profile has significantly improved as measured by fuel consumption per deadweight ton. We plan to continue to also execute on our fleet renewal and growth program on an opportunistic basis.

With that, I would now like to turn the call over to Frank, who will now review our financial performance.

Frank De Costanzo -- Chief Financial Officer

Thank you, Gary. Please turn to Slide 9 for a summary of our second-quarter 2020 financial results. Revenue, net of both voyage and charter hire expenses totaled $28.9 million for the second quarter, a decrease of 31% from the prior quarter. The quarter-on-quarter drop in our top line was primarily driven by the sharp decrease in our underlying market caused by the COVID-19 pandemic.

In Q2, our TCE came in at $8,038, which is $2,880 above the adjusted BSI. We achieved significant savings in opex and G&A in the quarter. I will provide a bit of color later in my remarks. We incurred a net loss of $20.5 million in the second quarter, equating to a loss per share of about $0.28, both basic and diluted.

Adjusted EBITDA came in at $1.8 million. The decline in profitability in the quarter is a direct result of the significantly lower market. Please be reminded that our hedge positions, excluding interest rate swaps, do not receive hedge accounting treatment, resulting in the mark-to-market changes flowing through the income statement. Let's now turn to Slide 10 for an overview of our balance sheet and liquidity.

Total cash as of the end of June was $98.6 million, representing some increase of $26.4 million as compared to the end of the first quarter. The increase in cash was driven by $22.5 million in proceeds from the drawdown on our revolving credit facilities, $22.6 million in proceeds from the increase in our term loan, offset in part by capex spending on ballast water treatment system installations and remaining scrubber balances, which totaled together $4.3 million, as well as $11.3 million in principal debt payments. Total gross debt, excluding debt issuance costs at June 30th was $550.2 million. I would note that our term loan, three-month LIBOR floating rate exposure is fully hedged at a blended average of 58 basis points via interest rate swaps.

Please turn to Slide 11 for an overview of our cash flow from operations for the second quarter of 2020. At the top of the slide, you can see that net cash used in operating activities was $2.7 million in Q2, representing an improvement from $12.4 million in cash used prior quarter. The chart demonstrates the timing-driven variability that working capital introduces to cash from operations, as depicted by these differences between the dark blue bars, which are the reported cash from ops numbers and the light blue bars which strip out changes in operating assets and the liabilities, primarily working capital. I believe it is more meaningful to evaluate cash from ops from a June 2020 year-to-date perspective, which smooths out some of the noise.

Cash flows used in operating activities was $15.2 million for the first half of the year. But if changes in operating assets and these liabilities are excluded, cash used in operating activities would have been $1 million. The difference can be explained by movements in working capital plus collateral posted on our hedge book. Please turn to Slide 12 for a Q2 cash walk.

The chart at the top of the slide lays out the changes in the company's cash balances during Q2. Revenue and operating expenses are a simple look at the operations. The debt of the two large bars on the left is positive $2 million, essentially our Q2-adjusted EBITDA result. So, to the right, you will find bars covering the dry dock costs and capex for scrubbers and the ballast water treatment system costs.

The $45 million bar represents the net proceeds from revolving credit facility draws and proceeds from the term loan upsize. And finally, the bar totaling $21 million represents the debt principal and interest paid in the quarter. The chart on the bottom-half of the slide displays the changes in the company's cash for the first six months of 2020. Let's now review Slide 13 for our cash breakeven per ship per day.

Cash breakeven per ship per day came in at $10,135 for the second quarter, $649 lower than Q1. The decrease was primarily the result of lower opex, dry dock costs and G&A, in part offset by an increase in debt principal payments. Vessel expenses or opex came in at $4,447 per ship per day in Q2, an improvement of $762 as compared to the prior quarter. The decrease in opex per day was primarily attributable to a decrease in spend on stores and spares as well as lower crew travel expenses as a result of the COVID-19 restrictions.

Drydocking came in at $308 per ship per day in Q2, $830 lower than prior quarter. The decrease was a result of a decrease in the number of dry docks completed. Cash G&A came in at $1,328 per ship per day in Q2, down $177 from prior quarter. The improvement was driven by cost-saving measures instituted by the company as our response to the COVID-19 pandemic.

It is worth noting that our G&A per ship calculation is based on our own vessels, whereas we operate a larger fleet, including our chartered-in tonnage. In this regard, if we were to include the chartered-in days in our calculation, Q2 G&A per ship per day would have been $1,191. Cash interest expense came in at $1,569 per ship per day in Q2, which is relatively flat quarter over quarter. Cash debt principal payments came in at $2,483 per ship and per day in Q2, $1,205 higher than prior quarter.

The increase is attributable to principal repayments on our Norwegian bond, which is paid semiannually and a modest increase in the principal payments due on our term loan. This now concludes my comments. I will now turn the call back to Gary.

Gary Vogel -- Chief Executive Officer

Thank you, Frank. Please turn to Slide 15. Here, the dark blue line shows the BSI year to date with the forward curve depicted by a dotted line for the balance of the year. 2019 in early years are shown as well.

Stripping out the short-term impact from COVID-19, essentially, the period between late March and June, you'll note the market is trending similarly to how we performed last year. Spot BSI is currently in the $9,0000plus range, roughly $5,000 or 130% higher than the low reached in April. This recovery reflects a normalization in trade demand and the general easing of port and trade restrictions. In addition, the market has been further supported in recent months by a robust grain trade.

China imported a record 11.2 million tons of soybeans in the June. And for the full year 2020, China is expected to import 94 million tons, an increase of 7% over 2019. Although year to date, most of this product has been coming from Brazil, U.S. exports are expected to rise significantly during the second half of this year on the back of Phase 1 deal with the U.S.

As the spot market has recovered, so have our future expectations. Q4 FFAs are now trading at over $10,000 per day, representing an improvement of about 20% since our earnings call in May. Please turn to Slide 16. As we've discussed before, the Baltic Supramax Index is comprised of two major geographical components, the Atlantic and the Pacific.

Although quite volatile, on average, the Atlantic market has traded a significant premium to the Pacific historically. The reason for this is primarily due to the fact that the Atlantic basin is more of a loading area, while the Pacific is considered more of a discharging region where ships complete their voyages. And in addition to this, there's an additional tonnage in Asia as this is where virtually all new building ships get delivered and where vessels typically dry dock. You will note that the Atlantic relative premium spiked in Q1 as Pacific rates collapsed on the back of China and the rest of Asia's COVID-19 lockdown.

And as China started to come back online and the rest of the world started to enact its own port and trade restrictions, the ratio flipped the other way in Q2. And Q3 thus far, the ratio has flipped yet again with the Atlantic currently trading at a premium of over 50%, reflecting a normalization in fundamentals and overall trade demand. This volatility between the basins is just one of the many variables we look to capitalize on by actively trading our fleet and we're proactively positioning our vessels to capture their geographic swings in order to generate excess returns. Please turn to Slide 17.

Net supply growth increased in Q2 as a total of 159 dry bulk newbuilding vessels were delivered during the quarter, the highest level in three years. This was partially offset by 20 ships going to demolition. I think it's important to note that scrapping was down significantly in the quarter on the outbreak of COVID-19 led to all of the major ship-breaking nations suspending operations. But we do expect this number to rebound with restrictions getting lifted.

In terms of forward supply growth, fundamentals continue to improve with the dry bulk order book falling sharply and currently standing at just 7%, a historically low level. When looking at the Ultramax vessels as a percentage of the broader Handymax fleet, that order book is even lower at just around 5% and depleting rapidly. For 2020, dry bulk net fleet growth is now also expected to come in at 3%. This assumes scrapping of roughly 18 million deadweight tons, or more than double the amount in 2019.

A total of 36 dry bulk vessels were ordered during Q2. To put this in perspective, the quarterly average over the past 10 years was almost four times that or the 140 ships. We are encouraged by the relatively low number and believe it will stay low for various reasons we've addressed before. Please turn now to Slide 18.

Global growth expectations remain in flux and have been revised downwards since our last earnings call. The IMF is now projecting global GDP to contract by 4.9% in 2020 and then recover by 5.4% in '21. Dry bulk demand growth projections have been revised downward as well. As we've discussed on our last earnings call, we believe the contraction is heavily weighted toward the first half of the year, implying the balance of the year to be in recovery mode.

I think we're also seeing this play out in spot rates and in the forward curve. Notwithstanding uncertainty and the potential for further government actions to slow the virus' spread, we still remain cautiously optimistic in the continued normalization of trade demand, and we see our market being a beneficiary from the stimulus measures being put in place around the globe. So, with that, I'd now like to turn the call over to the operator and answer any questions that you may have. Operator?

Questions & Answers:


[Operator instructions] Our first question comes from the line of Omar Nokta from Clarksons Platou. Your line is now open.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Hi. Thank you, operator. Hey, guys. Good morning.

Gary Vogel -- Chief Executive Officer

Good morning.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Gary, I just wanted to check in with you a bit on the market. I know you talked a little bit about this in your opening remarks, but just there's been obviously a lot of action recently in the cape market with iron ore. Could you give a perspective on how that has come down and impacted the Supra/Ultra market? You mentioned the gains have been much more promising and -- or at least more consistent. And -- but in general, how has that iron ore trade picking up recently impacted the Supra/Ultra market in terms of, say, vessel availability and grade?

Gary Vogel -- Chief Executive Officer

Yes. I mean, it's a great question. I think, first of all, although we don't own any capes, we're big fans when the order of earnings is appropriate, meaning the most expensive ships earn the most. And that's where we are right now with capes leading the way.

There's not a direct competition with capes and Ultras, and certainly not Supra but there's definitely a knock-on effect as you move down from capes to Kamsars to Panamax. So we like the pull rather than the push down, the pull up. And so we don't move a lot of iron ore, just a couple of percent of our cargo book is iron ore, but it's definitely a positive. If we look at our market, I mean, clearly, the grain, particularly led by soybean as China, the pig population is being -- coming back significantly.

And expectation for Q4 out of the U.S. Gulf is pretty strong. We're already seeing it. But Brazil has taken, by far, the lion's share of soybeans thus far.

And with the U.S. harvest now coming on, we expect a pretty big push there. And we've seen it now, I talked about the Atlantic and Pacific markets, and it's really being led out of the Atlantic by particularly the U.S. Gulf trades out to Asia.

So we're seeing it in general. Clearly, there's a restocking going on as well from the shutdown, which is helpful. But even today, we're seeing October FFA is trading above $11,000. So really, there's definitely optimism, and there's some momentum in the market as the index is also trading back up.

This morning index came in up almost $100, back up to $94. So we feel good about the direction and the fundamentals behind it that are leading it. And we see it really in many areas. Markets can be moved by one area, but what we're seeing now is strength from the Atlantic, but also the PG is strong, and we're starting to see some more activity in Asia as well.

Omar Nokta -- Clarksons Platou Securities -- Analyst

OK. Thank you. And that's a really good color. And sorry to just bring it back to the iron ore.

I know you at Eagle, basically 2% of the cargoes are iron ore. And I guess that we can extrapolate that that's probably the same for the entire fleet in that segment. Do you think that there has been with this influx of iron ore trade that some Supras are getting sucked into that, so that when we do go into the U.S. harvest season, that we'll have a smaller fleet of Supras available to trade that market? You understand where I'm getting at? If we're looking at a smaller fleet available to trade that market we may end up having a tighter situation than currently?

Gary Vogel -- Chief Executive Officer

Yes. The simple answer is the lion's share of iron ore, which moves, of course, from Brazil, Australia, you're not using Supramax or even Ultramaxs to carry those cargoes. When we're moving the iron ore, it's from really tertiary type ports, whether it's places like West Coast, Central America, Europe. So really not the -- I don't see it as being a meaningful impact between the two, but at least that's not how we see it from Eagle's standpoint.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Yes, that's fair. I just wanted to ask just to get a sense. Another question, or final question. Frank talked about the opex having come down quarter over quarter, and that seems to be fairly consistent with a lot of other shipping companies that have been reporting earnings with basically [Inaudible] causing a lot of cash cost to come down [Inaudible].

Yesterday, Genco, in their report, they mentioned that obviously to expect a reversal as things start to thaw on the crew changes. But one thing that they had said that I thought was a bit interesting was that the, obviously after complete shutdown and inability to change crews earlier on in the pandemic, there was this window that opened up briefly. And then they mentioned that basically, that window was basically shut and now it's become more complicated. I just wanted to check, is that how you're seeing things as well? Is crew changes still extremely difficult and probably harder than where it was in, say, a few weeks ago?

Gary Vogel -- Chief Executive Officer

Yes. It's definitely a very fluid situation. And so Hong Kong was open and at the moment, it's closed. And Singapore, while not fully closed has definitely clamped down because of what I think they viewed as some violations of protocol.

Having said that, there's many other places that we're finding opportunities, but it's difficult. And I think it takes a company -- you have to be nimble and be willing to move in the last minute and things like that, and we're quarantining crews in advance and obviously testing and things like that. So there's additional commitment on time and flexibility and cost as well but we're getting it done, but it's not just a one-way street, getting more and more open. As I mentioned, those first two ports, which were two of the first to open up are now effectively closed.

So it's an ongoing battle, if you will, but we're getting it done.

Omar Nokta -- Clarksons Platou Securities -- Analyst

OK. Yes, like you said, it's very fluid, and things definitely continue to change. Well, good. Well, I appreciate that.

Thank you. And I'll leave it there.

Gary Vogel -- Chief Executive Officer

Thanks, Omar.


Our next question comes from the line of Liam Burke from B. Riley. Your line is now open.

Liam Burke -- B.. Riley FBR -- Analyst

Thank you. Good morning, Gary. Good morning, Frank.

Gary Vogel -- Chief Executive Officer

Good morning, Liam.

Frank De Costanzo -- Chief Financial Officer

Good morning.

Liam Burke -- B.. Riley FBR -- Analyst

Gary, you out-distance the adjusted BSI significantly and I mean, it's pretty consistent with your past results as well. But is there something going on within the market where there is more of a bias toward new vessels versus the older vessel operators? And could that possibly accelerate scrapping?

Gary Vogel -- Chief Executive Officer

Yes. I mean, the simple answer is that the newer vessels are more efficient and definitely more desirable to charters for all the reasons in terms of consumption, deadweight, etc. Having said that, every vessel has its -- has a par value. And at the moment, fuel prices are relatively weak, which benefits older vessels on a relative basis.

I do believe that as fuel prices start to moderate and go back to more normal levels and increase, given the IMO 2020 and the need for low-sulfur fuel, that will be a catalyst for scrapping. So we expected that to happen in early 2020. And clearly, given what happened in the fuel markets, that I think was temporized a bit. But long term, I think there's a bias toward the newer ships.

But all vessels have, like I said, a par value and are tradable, but the newer ships are more desirable, but especially in the long-haul trades, which are trades that we tend to focus on, cross trading between the Atlantic and the Pacific.

Liam Burke -- B.. Riley FBR -- Analyst

Is there any advantage that you have being able to carry both minor and major bulks? [Inaudible] be a rate difference?

Gary Vogel -- Chief Executive Officer

Yes. I mean, no question. All of our ships can carry both -- carry coal and grain, two of the major bulks, as I mentioned, not much iron ore, and those are our Supras as well as our Ultras. And we've always believed that having that balance between the two is a real advantage, right, stability, because we're not relying on just two markets effectively in terms of iron ore and coal.

So there's definitely a benefit there and less volatility. But that goes for all of our ships, the Supras as well as the Ultras. But as I said, the Ultramax vessels, which have a better efficiency and larger are more suited for the long-haul trades where they're spending most of their time at sea, and that particularly goes for our scrubber-fitted fleet. A lot's been made about the narrow spread.

But as I talked about in my prepared remarks, we've generated over $20 million thus far. And even on a run rate, if you look at next year's trading at around $90 fuel spread, for us that's close to $20 million annual in terms of cash flow. So pretty meaningful even in a narrow environment. And we actually expect that, that spread will widen as oil prices revert and increase.

And that's one of the reasons that we've chosen to monetize a significant amount of those hedges, which were taken in at significantly higher levels to take that profit and cash to the balance sheet.

Liam Burke -- B.. Riley FBR -- Analyst

Great. Thank you, Gary.

Gary Vogel -- Chief Executive Officer

Thank you.


Thank you. [Operator instructions] Our next question comes from the line of J Mintzmyer from Value Investor's Edge. Your line is now open.

J Mintzmyer -- Value Investor's Edge -- Analyst

Good morning, gentlemen. Thanks for taking my call and congratulations on the steady results.

Gary Vogel -- Chief Executive Officer

Thank you. Good morning.

J Mintzmyer -- Value Investor's Edge -- Analyst

Yes. So the first question I have is, you made a -- you had a little bit of a tighter liquidity position last quarter into the challenging market. I think that's pretty undeniable that this is a brutal dry bulk market, probably the worst we've seen since early 2016. But you made a nice effort to raise some incremental liquidity with the recent refinancing.

Do you think that latest incremental liquidity, does that get you through, barring like in apocalypse, does that get you through the rest of 2020 and into 2021 without the need for more equity or do you think there's going to be a couple more incremental liquidity additions?

Gary Vogel -- Chief Executive Officer

Look, I mean, I think there's clearly uncertainty in the market, but we feel very comfortable where we are. I mean, going into this, having unencumbered vessels and the revolvers is exactly for that unforeseen situation, which I think we can all agree that this global pandemic clearly falls under that category. So almost $100 million. And with rates trending up now, as I mentioned, we've given an indication that we're two-thirds covered in the low-9s.

But the forward market trading over 11 for October and high-10s for Q4, and we're actively engaged on using that market and hedging. And so if you look at a market in the mid-10s in Q4, notwithstanding the lag I talked about, but the market in the mid-10s, plus our historic premium that we've been able to generate, plus our scrubber revenue, you see we're well, well above -- that we would be well above our cash breakeven, which this quarter was 10, 1 and change. So we feel quite good about it, notwithstanding the uncertainty in the market. So at the -- yes, we don't see a need for further liquidity right now and we're looking toward, hopefully, a cash build as we get into the fourth quarter.

J Mintzmyer -- Value Investor's Edge -- Analyst

Absolutely. Let's hope we see that. I wanted to look at Slide 21 and look at the differences between your debt facilities. If you look at the facility on the far right, the Ultraco LLC, secured by a little bit better assets, I'm sure, but you have outstanding terms there.

It was LIBOR plus 250. You -- it looks like you swapped 100% of the floating part at 58 basis points for the term of that loan. Very friendly facility, you're looking at 3%. But if you look at the middle facility or the Shipco LLC, you have $184 million outstanding.

It's also senior secured, it's at 8.25% fixed, which might have looked good a couple of years ago, but looks like a massive outlier in this environment. So I guess question one there is it's maturing in 2022, is there a reasonable odds to switch to a more similar facility as the Ultraco? And secondly, I guess, kind of just related to that, can you talk to some of the differences? I guess, I see the nonrecourse, but anything else that keeps that at such an elevated cost to you guys?

Gary Vogel -- Chief Executive Officer

Yes, sure. I mean, first of all, you pointed out one of the aspects here. If it's -- it's a nonrecourse facility. I think the biggest differential as compared with the bank debt is a very low amortization.

And you'll see that that has our older vessels in it, which under traditional bank that would have a much more accelerated amortization profile. So I'd say going into this year, and I think the expectation to do something sooner probably was higher on the agenda. It was a noncall of 2.5. And so the first time we could have done something would have been May of this year.

But I think it's fair to say that it's something that we are aware of and I will look at. But the last few months has really been about focus on the current environment and getting through this period of uncertainty. But I think, as I said, it's something that we're definitely aware of that comparative to our bank financing, and we're going to -- we will be looking at it.

J Mintzmyer -- Value Investor's Edge -- Analyst

Absolutely. Makes sense to me. Keep up the good work, gentlemen. I appreciate seeing the stable results.

Gary Vogel -- Chief Executive Officer

Thank you. Appreciate it.


Thank you. At this time, I am showing no further questions. I would like to turn the call back over to Gary Vogel for closing remarks.

Gary Vogel -- Chief Executive Officer

Thank you, operator. We don't have anything further at this time. So I'd like to thank everyone for joining us today, and we wish everyone a good day. Thank you.


[Operator signoff]

Duration: 35 minutes

Call participants:

Gary Vogel -- Chief Executive Officer

Frank De Costanzo -- Chief Financial Officer

Omar Nokta -- Clarksons Platou Securities -- Analyst

Liam Burke -- B.. Riley FBR -- Analyst

J Mintzmyer -- Value Investor's Edge -- Analyst

More EGLE analysis

All earnings call transcripts