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Eagle Bulk Shipping (NASDAQ:EGLE)
Q4 2020 Earnings Call
Mar 05, 2021, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Greetings and welcome to the Eagle Bulk Shipping fourth-quarter 2020 results conference call. [Operator instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator instructions] As a reminder, this conference call is being recorded. I would now like to hand 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 fourth-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 risk 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.

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 our presentation, I'd like to take this opportunity to once again thank our crews for going above and beyond in dealing with all of the challenges they have faced as a result of the restrictions and disruptions caused by the outbreak of COVID-19 last year. We're pleased to see the wider community paying attention to seafarer welfare and understanding their importance to global commerce. We're strong advocates for all seafarers and are proud signatories to the Neptune Declaration, which seeks to improve their standing.

We have and will continue to make seafarer welfare a priority at Eagle with a constant goal of continuing to maintain zero seafarers working beyond their contractual employment periods. Please turn to Slide 5. On the back of an improving macroeconomic landscape, freight environment, and overall capital markets, I'm pleased to report that we raised $25 million in growth equity this past December. We immediately put this money to work and acquired a total of seven vessels at what we consider to be very attractive levels.

The total purchase price consideration is about $86 million in cash and 542,000 Eagle shares. These acquisitions are comprised of four modern high spec scrubber-fitted SDARI-64 Ultramaxes built at Chengxi Shipyard and three 2011-built CROWN-58 Supramaxes built at Dayang Shipyard. We've taken delivery of two of the vessels thus far, with the remaining expected to deliver between March and May. Please turn to Slide 6.

Pro forma for our acquisitions. Our fleet currently totals 52 ships, all of them are Supramax, Ultramax segment. Forty-five of our vessels, or 87% of our fleet, are fitted with scrubbers, giving us exposure to the recently widening fuel spreads. Since starting to execute on our fleet renewal and growth initiative, we've now turned over more than half our fleet, acquiring 27 vessels and selling 19.

These sale and purchase transactions have vastly improved our fleet makeup in terms of age, size, and emissions. Please turn to Slide 7. Our markets continue to trade up during the fourth quarter with the BSI ending December at $11,424 per day and averaging $10,749 for the full period, representing an 8% increase as compared to the prior quarter. We believe the improving trend in markets is reflective of the continued recovery in global GDP post the economic shock caused by COVID-19, as well as the normalization in certain drybulk flows.

In particular, the fourth quarter was supported by a number of factors, including increased demand for agricultural products as China continued to build back their pig population, increased purchase of construction materials such as steel, cement, clinker, and other minor bulks, and increased thermal coal shipments as China increased purchases of Indonesian coal on the back of greater domestic demand and restrictions on Australian imports. And finally, India also saw normalization of coal demand to pre-COVID levels. As depicted in the chart, Eagle generated a net TCE for the fourth quarter of $11,190 per day, up 16% quarter on quarter, representing a beat of roughly $1,000 compared to market. As we've discussed in previous calls, it's challenging to catch and beat a rapidly rising market as a percentage of these are fixed in advance and where voyages average about 45 days in duration.

In addition, given the weakness in the markets back in early 2020 and lack of visibility due to COVID-19, we increased our hedge position for the second half of 2020 in order to provide us with appropriate downside protection. While this negatively affected our performance for the quarter, we believe it was the prudent thing to do and was more than offset by the positive contribution from our platform methodology, as well as operating scrubbers on the majority of our fleet. It's also worth noting that as of the end of 2020, those defensive hedges were completely closed. For the full-year 2020, our TCE outperformance was $1,964 per ship per day, equating to approximately $37 million in incremental annual cash flow based on our current fleet size.

We entered Q1 well-positioned with roughly 70% of our fleet next open in the Atlantic where the market has been particularly strong. The BSI, which was around $11,400 at the start of the year, has rallied since. As of today, we affix about 93% of our available days for the first quarter had a net TCE of $15,085 per day. Please turn to Slide 8.

Turning back to the fourth quarter, the top-line growth we experienced contributed to an improved operating performance for the period, reflected by $22 million of EBITDA, the highest level in two years. With that, I'd now like to turn the call over to Frank who will review our financial performance.

Frank De Costanzo -- Chief Financial Officer

Thank you, Gary. Please turn to Slide 10 for a summary of our fourth-quarter and full-year 2020 financial results. The improvement in the chartering market drove top-line growth in Q4 with revenue net of both voyage and charter hire expenses totaling $50.1 million, an increase of 15% from the prior quarter. In Q4, our TCE came in at $11,190, which is $961 above the adjusted net BSI.

For the year, revenue net of both voyage and charter hire expenses was $164.3 million, remaining relatively flat as compared to 2019. For the full-year 2020, our TCE came in at $9,710, which is $1,964 above the adjusted net BSI and $675 a day lower than prior year. We reported a net income of $115,000 for the fourth quarter, versus a net loss of $11.2 million in the third quarter. Basic and diluted earnings per share for the fourth quarter were $0.01, versus a loss per share of $1.09 for the third quarter of 2020.

Adjusted EBITDA improved in Q4, coming in at $22 million, as compared to $11.5 million in the prior quarter and $9.8 million in the fourth quarter of 2019. Adjusted EBITDA for the full-year 2020 came in at $54.1 million, as compared to $48.7 million in 2019. Let's now turn to Slide 11 for an overview of our balance sheet and liquidity. Throughout the course of the pandemic, we maintained a strong liquidity position.

Total cash inclusive of $18.9 million of restricted cash was $88.8 million at December 31, 2020, representing an increase of $3.6 million as compared to the end of the third quarter. The increase in cash was primarily a result of proceeds from the sale of three vessels, proceeds raised from the equity issuance in December 2020, and cash provided by operating activities, offset in part by the principal payments on the Norwegian Bond and the Ultraco Debt, along with the repayment of the Ultraco Debt Facility revolver, capex spending, and deposits paid on the Oslo Eagle and Helsinki Eagle acquisitions. Total liquidity increased to $143.8 million at the end of Q4. Liquidity is comprised of total cash of $88.8 million and $55 million of the undrawn availability on the Ultraco revolving credit facility.

Total gross debt, excluding debt issuance costs at the end of Q4, were $475.6 million, a decrease of $46.8 million from the prior quarter. The decrease is due to the $35 million we repaid on the Ultraco revolving credit facility, a principal repayment of $7.8 million on the Ultraco Debt Facility, and a principal payment of $4 million on -- on Norwegian Bond. As Gary mentioned earlier, we have acquired seven ships of the past couple months. The Oslo Eagle, which we took delivery of in January, was slotted into the shi -- Shipco silo and was fully funded by restricted cash on hand.

The remaining six vessels are to be funded by a combination of equity issued to the sellers, cash on hand, keeping in mind, we had $25 million of which we raised in December. Looking ahead, we may add debt at some point in the future. Please now turn to Slide 12 for an overview of our cash flow from operations for the fourth quarter of 2020. Net cash provided by operating activities was $14.9 million in Q4, a $2.1 million increase from $12.8 million in net cash provided by our operating activities in Q3 2020.

Cash flow was strong in the quarter on improving charter hire rates, industrial and commercial platform performance. For the full-year 2020, cash flows provided by operating activities were $12.6 million. Please now turn to Slide 13 for the Q4 and year-to-date 2020 cash walk. To the top of the slide lays out the changes in the company's cash balances during Q4.

Revenue and operating expenditures are simple look at the operations. The net of these two large bars at the left is positive $21 million, which is very close to our adjusted EBITDA number. We incurred $3 million of drydocking expenses and $3 million of capex expenses in the quarter. The $60 million of vessel S&P represents the proceeds from the sale of four vessels, less deposits paid for two acquired vessels.

We repaid the remaining $35 million drawn from our Ultraco revolving credit facility, raised $24 million in net proceeds from the issuance of equity in December, and a total of $21 million represents the debt principal and interest paid in the quarter. The churn at the bottom half of the slide displays the changes in the company's cash for the full-year 2020. Let's now review Slide 14 for our cash break-even per ship per day. Cash break-even per ship per day came in at $11,553 for the fourth quarter.

Vessel expenses or opex came in at $4,718 per ship per day in Q4, $66 lower than prior quarter. The decrease in opex per day was primarily a result of the decrease in the number of crew changes in the quarter. Drydocking came in at $784 per ship per day in Q4 $152 lower than prior quarter. The decrease was a result of a decrease in the number of drydocks.

Cash G&A came in at $1,824 per ship per day in Q4, up $228 from Q3. The increase was in part caused by a decrease in owned days due to the sale of four vessels. It is worth noting that our G&A per-ship calculation is based on our owned vessels, whereas we operate a larger fleet including our chartered-in tonnage. If we were to include the chartered-in days in our calculation, G&A per ship per day would decrease by about $200.

Cash interest expense came in at $1,555 per ship per day in Q4 which was slightly lower quarter over quarter, driven by decreases in our total outstanding debt and lower interest rates. Cash debt principal payments came in at $2,673 per ship per day in Q4, $955 higher than the prior quarter. The increase is attributable to amortization repayments on our Norwegian bond debt which are paid semi-annually in Q2 and Q4. This concludes my comments.

I will now turn the call back to Gary.

Gary Vogel -- Chief Executive Officer

Thank you, Frank. Please turn to Slide 16. Here, we depict the BSI for the last five calendar years plus 2021 year to date which is represented by the dark blue line. I believe a picture is worth a thousand words and the velocity of the recent increase as well as the levels are quite demonstrative.

Year to date, the BSI is averaging approximately $13,800 with current spot above $20,000. I think it's particularly noteworthy that the markets exhibited such strength during Q1, a period which typically represents a seasonal low due to, among other things, elevated newbuilding deliveries that tend to occur in January and the Lunar New Year holiday in February. In recent weeks, we've been able to book strong fixtures across most regions to transport a diverse mix of cargos, including fertilizer from the Baltic, sugar and grains from Brazil, pet coke from the U.S. Gulf, and manganese ore from West Africa, among others, all at levels not seen for many years.

Please turn to Slide 17. Looking at rates from a more historical perspective, the BSI is now trading at a 10-year high. Although 2020 demand and rates were severely impacted by COVID-19, we believe we may be back on track in terms of a long-term cyclical recovery which began to take shape back in 2016. Given improving supply side fundamentals and expected further recovery in global GDP in drybulk demand, notwithstanding inherent volatility, we believe rates can continue to remain strong for the foreseeable future.

We typically don't discuss asset prices, but I think it's worthwhile to note that if rates remain strong or increase even further, we could see a material upswing to values. To put this into context, a five-year-old Ultramax today is worth around $17 million, while in 2010, a five-year-old Supermax was valued at over $27 million. Please turn to Slide 18. Fuel prices, as well as spreads between high-sulfur fuel oil and very-low-sulfur fuel oil, came under significant pressure last year due to the demand shock caused by COVID-19, as well as the OPEC Russian oil price war.

Notwithstanding extreme volatility, market fuel spreads averaged roughly $100 per ton for calendar 2020. And for Eagle, given the hedges we put in place in early 2020, we were able to realize an average fuel spread of approximately $150 for the year helping us to generate over $26 million in savings from operating scrubbers, basis is the first 12 months of operation. It's also worth noting that we closed out all of our 2021 fuel spread hedges totaling 72,000 tons during last year at a weighted average price of around $105. This level is now well below 2021's current quoted spread of approximately $120.

We did so with a view that with the world coming back online and oil demand normalizing, there will be continued upward pressure to underlying fuel prices and spreads, both of which will be supportive toward our earning capability on a go-forward basis. Please turn to Slide 19. On the supply side, given the visibility, not much has changed since our last update in November and fundamentals remain positive. Net supply growth decreased in Q4.

A total of 88 drybulk newbuilding vessels were delivered during the period, down 15% quarter on quarter. And offsetting this, a total of 38 vessels were scrapped during the same period. In terms of forward supply growth, the overall drybulk order book stands at just 6%, a 25-year low. And when looking at Ultramax vessels as a percentage of the broader Handymax fleet, the order book is even lower at just around 5%.

For 2021,drybulk net fleet growth is expected to come in at 2.6% assuming scrap of roughly 10 million deadweight tons which is down about one-third compared to last year, primarily as a result of a stronger-rate environment. A total of 221 drybulk ships were ordered in 2020. It's interesting to note that over the past 25 years, there have only been three years which saw lower ordering: 1998, 2001, and 2016. If the freight market stays at elevated levels, we would expect ordering to pick up somewhat.

However, we do not believe it will be material, given relative pricing for secondhand tonnage, as well as uncertainties surrounding decarbonization regulations, as well as more restrictive access to financing. Please turn to Slide 20. Global growth expectations have been revised upward since our last earnings call, reflecting a normalization in activity thanks to the expected impact of vaccines and increased stimulus. The IMF is now estimating global GDP contracted by 3.5% in 2020 and is projecting a recovery of 5.5% in 2021.

Please turn to Slide 21. Drybulk demand growth has been revised significantly upward as well with 2020 now estimated to have contracted by 1.9%, as compared to a decrease of 4.5% which was being forecast back in July. For 2021, forecasts are indicating trade demand growth of a positive 3.7% as compared to last year. Notwithstanding uncertainty, we remain optimistic for the continued normalization of trade demand and see our market being a beneficiary from stimulus measures which are already being put in place around the globe.

With that, I would now like to turn the call over to the operator and answer any questions you may have. Operator?

Questions & Answers:


Operator

[Operator instructions] Our first question comes from Omar Nokta with Clarkson Platou Securities. You may proceed with your question.

Omar Nokta -- Clarkson Platou Securities -- Analyst

Thank you. Hi, Gary and Frank. The -- the commentary, I think, on the market in -- in some of the macro factors underlying things and -- and clearly, rates are -- are quite strong. I wanted to ask you how do you feel about where your fleet is today? And it's a question that you'd get constantly, but you -- you've added seven ships that what we -- when we look back in hindsight, are very well-timed.

And you also monetized some of the older ships in keeping with your fleet renewal plans. You know, what's your appetite today when you think about the outlook for further purchases? Do you feel the returns still makes sense? And also, you know, when it comes to selling older ships, do you still have an interest in doing that?

Gary Vogel -- Chief Executive Officer

Yeah. Thanks, Omar. I mean, I think, the -- the answer is we -- we still have an appetite. I think we -- while we have a -- a general, you know, goal of fleet renewal and growth, you know, each acquisition is -- is, you know, has to be, you know, measured and evaluated given market dynamics, you know, ability to raise -- raise capital or cash on the balance sheet.

And also, same -- same with divesting of -- of assets. So, you know, we now have three vessels left that are over 15 years old. I mean, they clearly are -- are on the, you know, sales potential -- sales for -- for us, always they have been. But, you know, fair value for those ships in our opinion is higher than where the market is today, given -- given the -- given the increase.

I mean, I can tell you that, you know, just this morning, you know, we traded Q2 to Q4 on the Baltic Supermax index to BSI at $16,250. That's up $6,000, you know, for those three quarters from just January. And so, that's -- that's meaningful cash flow on -- on -- on any given ship relative to the index. And so, you know, that has to be taken into account for the asset value in terms of -- of selling.

So, you know, while -- while our goal ultimately will be -- or we will sell those ships, you know, it has to be at the right time given -- given the economics and if we can garner the cash flow by operating on them for longer and -- and then sell them and that's -- that's what we will do. And -- and same in terms of acquisitions.

Omar Nokta -- Clarkson Platou Securities -- Analyst

Thanks, Gary. And, you know, kind of maybe sort of that theme, I guess, what, you know, so it was Supermax, Ultramax rates being over $20,000 today, especially this early as you mentioned in your opening remarks, things are pretty solid. You know, have you been -- have you been approached into, you know, entering at the time charters of say a year? Have you gone there yet? Do you see yourselves wanting to put vessels on contract? Or -- or -- or with your freight trading, do you -- do you see yourselves being more of the guys chartering in?

Gary Vogel -- Chief Executive Officer

So, first of all, if -- if I -- if I may, just a slight correction, we just got the index in -- during the call, so we're now just over $21,000. So -- but --

Omar Nokta -- Clarkson Platou Securities -- Analyst

You're right.

Gary Vogel -- Chief Executive Officer

No -- no worries. No worries. Tongue in cheek. But the answer is we -- we have been approached and we always value that relative to -- to the curve.

All things being equal, we prefer to, you know, keep control of our assets and trade them for the reasons you mentioned, right? The goal to outperform and we're able to hedge cash flows using -- using derivatives. You know, having said that, you know, given the dynamics in the market, there are, you know, operators and -- and who have positions they need to cover. And given the velocity of the change in the market, are there to pay up significantly for a vessel on period whether it's three to five or -- or seven to nine months and -- and -- and even longer. And if we can get significant premium to what we call par value, you know, on the curve, we will relet ships.

But, you know, you've heard me talk about it before when you relet a vessel, you give away an option at the end even if it's just, you know, a two, three-month option in terms of reletting window. And so, given that we can trade the ship ourselves, we -- we need to be paid for that when we do our internal calculations in order to relet a vessel. So, the answer is yes, but we -- we have multiple ways to lock in, you know, cash flows as -- as we go forward and -- and reletting ships is not the No. 1 for us.

Omar Nokta -- Clarkson Platou Securities -- Analyst

Got it. Thanks, that's pretty clear. Thanks, Gary. And maybe just sorry one -- one final one and -- and maybe for Frank.

You know the -- you talked a bit about the financing of the -- of the acquisitions you guys have done. I want to ask how do you think the appetite is for the -- for the Supramax since you acquired the 2011's? You know, they're not eco-design but they are sister ships to what you have. Do you see them being financed with traditional bank debt or -- or other means or do you prefer to keep them as a sort of unencumbered cash purchases?

Frank De Costanzo -- Chief Financial Officer

Hey, Omar. Thanks for the question. Yeah. The appetite for those ships in the bank market is good and we are considering putting on modest leverage similar to what we've done in the past on the Ultraco facility.

So, good appetite, and we're looking at doing something.

Omar Nokta -- Clarkson Platou Securities -- Analyst

OK. All right. Thanks, Frank, and thanks, Gary.

Gary Vogel -- Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Randy Giveans with Jefferies. You may proceed with your question.

Randy Giveans -- Jefferies -- Analyst

Howdy, gentlemen. How's it going?

Frank De Costanzo -- Chief Financial Officer

Good morning.

Gary Vogel -- Chief Executive Officer

Good morning.

Randy Giveans -- Jefferies -- Analyst

Hey, hey. So, I have obviously appreciated the quarter-to-date rate guidance, which as you mentioned well above benchmarks like the at a nine-year high, I think you said in your press release. So, can you break this out by Ultramax in Supramax? And then also, is there something maybe unique about this quarter in your operations that's somehow increasing the first quarter numbers but might result in lower second-quarter numbers or just purely a reflection of the state of the market and kind of your normal trading operations?

Gary Vogel -- Chief Executive Officer

Thanks for that. So -- so let me take it. First of all, we don't break out Ultramax from Supramax. And the reason is -- is that, you know, we trade our fleet as -- as one homogeneous and -- and arbitrage between vessels and cargos.

And -- and we think it kind of gives them the wrong picture if there's more -- if there's volatility between -- between the two. So, in the back of our earnings dec, you know we provide in the appendix a guide to relative earnings values of -- of different size ships and so you can break it out into yourself in terms of what our overall fleet is. You know, with our recent acquisitions, we've -- we've got you now -- got into a point where it's just over 50% of our ships pro forma for the deliveries, you know, will be Ultramaxes and that's a huge milestone for us, given that, you know, four years ago we were 100% Supramax player. In terms of this quarter -- in terms of this quarter, you know, the answer is there's -- there's always going to be volatility.

Our -- our market is such that, you know, backhaul trades. Our ships don't typically balance, you know, from let's say the Far East to Brazil and back. And because of that, there is -- there is considerable evolve between, you know, a backhaul trade of let's say $4,000 or $5,000 a day. And today, the outbound lines can be 35,000 even 40,000.

And so because of that, you can get volatility depending on how many ships are backhaul and fronthaul. Having said that, I can tell you that our -- our quarter is not -- these -- these numbers in the guidance are not based on a predominant, you know, amount of fronthaul business. So, I would say this is -- this is more about, you know, the business methodology but having the majority of our fleet in the Atlantic for this, you know, upturn in the market has definitely been helpful and we've been able to capture it but it hasn't been done by sending all these ships out at the -- at the moment. Our -- our balance remains similar to where we entered the quarter.

Randy Giveans -- Jefferies -- Analyst

Got it. OK, yeah. Just making sure that wasn't like a huge surge now and then you have no more availability for the next month or so. But sounds like not the case.

And then, you ended the fourth quarter with like you said $89 million in cash and other, whatever it was, $50 million in your undrawn 55 and your undrawn availability you should obviously be cash flow positive here in the coming quarters. Pretty manageable debt and amort shares trading close to NAV. So, all that being said, what are your plans for this free cash assuming rates stay relatively firm here in the coming quarters? Is it just given the cash on the balance sheet, repaying debt, and then paid down your -- your revolver in the past some kind of repurchases second-hand acquisitions? How do you get to balance this plethora of options?

Gary Vogel -- Chief Executive Officer

I -- I appreciate the question and I appreciate that we're in a situation where you have the ability to ask the question of given rates. But having said that, you know, we just acquired seven ships, as you point out. And -- and it's early days into the quarter. So, I think, we'd like to get deliveries on these ships.

As Frank mentioned, we're looking at, you know, the potential, you know, putting debt on -- on some or -- some or all of the acquisitions and then see how things play out and -- and you know what -- what the intention will be given opportunities in the market paying down debt things like that. So, it's still early days but -- but it's definitely, you know, on our -- on our radar and -- and we intend to turn to it. You know given -- given hopefully that this market you know continues to show strength as the forward curve indicates it does.

Randy Giveans -- Jefferies -- Analyst

Sounds good. That's it for me. Thanks again.

Gary Vogel -- Chief Executive Officer

All right. Thank you.

Operator

Thank you. Our next question comes from Gregory Lewis of BTIG. You may proceed with your question.

Gregory Lewis -- BTIG -- Analyst

Yes. Thank -- thank you and good morning and good afternoon, everybody. You know, Gary, I wanted to touch a little bit on -- on some of your comments, you made around. You know, the strengthening the curb and maintaining flexibility.

You know, at least for us, from our point of view, you know, the market has been much stronger than we expected. You know, there's, you know, and that's helped that, you know, the next few quarters of the curve. You know, while I understand why you want to maintain exposure to your vessels and not just turn over the keys to other operators. How -- how do you think about, you know, the strengths in the curve and -- and say the back half of the year, you know, $13, 000, $14,000 I guess it's not as high as today but it's still not being the slouch out.

You know, how -- should we think about the potential for the company to take advantage of that? And may -- maybe just lock in a little bit of coverage around the derivatives market realizing I'm not really sure how you can talk about that but any kind of color around that I think would be helpful.

Gary Vogel -- Chief Executive Officer

Yeah. A -- a -- absolutely. I mean, first of all, the -- the answer is yes. You can expect us to, you know, take advantage of opportunities and the fact that the -- the, you know, the strip as we call it is -- is trading over 16 and I mentioned, you know, we traded that this morning.

So, you know, locking in certain cash flows as we've said, you know, until further notice you don't consider us a spot player. And our goal is to outperform the spot index. But as we said last year for defensive reasons, we -- we communicated so we put on a significant number of hedges, you know, and -- and downside protection, given the uncertainty around COVID. And similarly, if -- if we get to a point where, you know, we want to communicate that we've done something substantial in terms of locking in cash flows.

So, even though at this point we're not -- we're not going to say that, rest assured we are, you know, managing the fleet in such a way that we think we can take advantage of -- of strengthening and then volatility as well. So, you know, we're quite aware of what you know 16,000 means over the back three quarters of this year from -- from a company standpoint and cash flow and -- and -- and we're going to act accordingly.

Gregory Lewis -- BTIG -- Analyst

OK. Great. Great. Thank you for that.

And then, just another one around scrubbers and it's kind of the same question and in a different way. I mean, we're bullish on the outlook for scrubbers in the press release last night. You kind -- you kind of -- I think in Frank's comments he touched on it, yeah? I mean, we're well off of the bottom in spread -- I saw for a loan of fuel. You know, I guess a couple of questions.

You mentioned, you know, that the fleet is -- I guess always get this way, are -- are there different markets where scrubber utilization would just be better, i.e, is there something around, you know, whether it's the Atlantic or the Pacific where vessels in certain markets just have a better chance to run utilization whether it's because of the distances or because of as we think about some ports aren't letting, you know, scrubbers be used? Is there any way to think about, you know, is there an ideal better allocation than others for scrubber vessels? Thanks.

Gary Vogel -- Chief Executive Officer

Yeah. Absolutely. So -- so the first thing I would do is, for the most part, you can discount where the ports allow scrubbers to be used because our -- our vessels have, you know, low consumption when we import. The -- the vast majority of consumption is at sea.

And so the way to look at it is -- is really the percentage of sea days as compared to a total voyage or -- or pulling back, you know, how many days of the year can you spend at sea. So, ships with scrubbers, you know, gaining that benefit are better off spending time at sea which typically is actually cross trading, you know, Atlantic to Pacific and Pacific to Atlantic, right? Because, you know, all things being equal, load and discharge, number of days to load and just charge of ship the more days you put in the middle at sea the better it is for scrubbers. So, we find our ships tend with scrubbers tend to be doing those long-haul trades. Of course, there are other dynamics involved but that's the main driver of trying to maximize the days at sea.

It's really no different than when you have a ship which is heavy on consumption and not very economical use you -- you do the opposite. You find a, you know, a business where the ships spend more time in port. And -- and -- and it's not as noticeable the consumption at sea

Gregory Lewis -- BTIG -- Analyst

OK, great. Thank you very much.

Gary Vogel -- Chief Executive Officer

Thank you.

Operator

Thank you. [Operator instructions] Our next question comes from Liam Burke with B. Riley. You may proceed with your question.

Liam Burke -- B. Riley Securities -- Analyst

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

Gary Vogel -- Chief Executive Officer

Good morning.

Liam Burke -- B. Riley Securities -- Analyst

Gary, you talked about the strong seasonally slow first -- season -- strong sea -- traditionally seasonally slow first quarter. And then, do you anticipate the traditional pattern of the subsequent quarters to continue at the macro even though you've had an unusually strong first quarter?

Gary Vogel -- Chief Executive Officer

Yeah. I -- I think -- I think I would separate it out in the sense that, you know, there's a number of reasons the first quarter has started off strong. We -- we had the fourth quarter, you know, China record 100 million tons of soybeans but -- but the real and, you know, the -- the standout here especially compared to the last few years with the, you know, trade war and tariffs are that the U.S. doubled its exports, you know, from 18 million to 36 million tons and the majority of that moves on the U.S.

harvest, which is you know a fourth quarter and carrying into the first quarter we're still loading beans to China now. And then -- and then, you've had a cold winter, you know, and more coal moving and -- and -- into China. So, that's been helpful, and also the lunar new year -- there was much less travel so -- so China really kind of pushed through it as opposed to the normal -- normal slowdown. Having said that, we don't really see a change to, you know, typically the strength coming into the second quarter is really on the Brazilian, you know, soybean movements.

And although the harvest has started a bit late, it's ramped up pretty significantly and expectation is -- is where we're already loading and -- and that that's going to be strong as well as China as, you know, continues to rebuild the pig population. So, we don't see anything on the horizon that would indicate that things are -- are, you know, out of whack for Q2 because of a strong Q1.

Liam Burke -- B. Riley Securities -- Analyst

Great. And Frank, I know you have time on the senior secured 2022s but are you looking now possibly reducing your interest rate? I'm understanding it's not due for a bit here?

Frank De Costanzo -- Chief Financial Officer

Hey, Liam. Yeah, sure, we are looking and, you know, as the market improves our options improve also. So, we're looking about across the broad spectrum of options -- bank debt, a new Norwegian bond, and -- and other instruments to see and find the ideal mix and we do expect that it will improve our -- our picture going forward once we do refine.

Liam Burke -- B. Riley Securities -- Analyst

Great. Thank you, Frank. Thank you, Gary.

Gary Vogel -- Chief Executive Officer

Thank you.

Operator

Thank you. I'm not showing any further questions. At this time, I would not like to turn the call back over to Gary Vogel for any further remarks.

Gary Vogel -- Chief Executive Officer

Thank you, operator. We have nothing further so I'd just like to thank everyone for joining us today and wish everyone a good day. Thank you.

Operator

[Operator signoff]

Duration: 40 minutes

Call participants:

Gary Vogel -- Chief Executive Officer

Frank De Costanzo -- Chief Financial Officer

Omar Nokta -- Clarkson Platou Securities -- Analyst

Randy Giveans -- Jefferies -- Analyst

Gregory Lewis -- BTIG -- Analyst

Liam Burke -- B. Riley Securities -- Analyst

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