LPG - NYSE

Good morning, welcome to the Dorian LPG fourth quarter and fiscal year 2026 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on Dorian LPG's website, which is www.dorianlpg.com. I would now like to turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.

Thanks, Madison. Good morning, everyone. Thank you all for joining us for our fourth quarter 2026 results conference call. With me today are John Hadjipateras, Chairman, President, and CEO of Dorian LPG Limited, John Lycouris, Head of Energy Transition, and Tim Hansen, Chief Commercial Officer. As a reminder, this conference call webcast and a replay of this call will be available through May 27th, 2026. Many of our remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe, or similar indications of future expectations. Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors, as well as general economic conditions.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we express today. Additionally, let me refer you to our unaudited results for the quarterly and annual periods ended March 31, 2026, that were filed this morning on Form 8-K. In addition, please refer to our previous filings on Forms 10-K and 10-Q, where you'll find risk factors that could cause actual results to differ materially from those forward-looking statements. Please note that we expect to file our full 10-K no later than May 29th, 2026. Finally, I would encourage you to review the investor highlights slides posted this morning on our website. With that, I'll turn over the call to John Hadjipateras.

Thank you, Ted, and thanks for joining us today. My colleagues will share some useful and interesting information about the past quarters and our views of the market. First, I'd like to say a few words on capital allocation and provide some historical context on fleet development, which relates to risk management in a volatile market with a view to capturing upside. Today's price of a new building VLGC at approximately $115 million reflects an increase of approximately 2.5% per annum over the cost of our first VLGC, which was delivered to our predecessor company 20 years ago. She was ordered for a price of approximately $65 million in 2004. When she was delivered in 2006, the new building replacement cost was over $90 million.

From 2009 to 2012, the new building price hovered in the low $70 million range. The next order we placed was in 2012 for advanced ECO type series at just under $70 million each. The new building prices stayed in the $70 million range until 2021. The total VLGC fleet in 2005 comprised 102 ships. Today, the total fleet is 427 VLGCs. There are about 124 ships on order, representing nearly 30% of the existing fleet, compared to the all-time high of more than 50% in 2007. Our owned fleet comprises 18 ECO type with efficiency-enhancing features and two new dual-fuel ships. The average age of our fleet is 10.3 years. In the next few years, we hope to expand our fleet by adding new ships and expect that the catalyst for our investment in replacement tonnage will be innovation in the design and efficiency of new buildings.

The advent of ultra-long-stroke electronic engines informed our investment decision in 2012, and the development of dual-fuel engines supported our decisions for our investments in the Captain Markos delivered in 2023 and the Areion delivered a couple of months ago. We have witnessed the volatility I've described, and we've been the beneficiaries of a tremendous increase in the volume of seaborne trade of LPG in both absolute terms and in ton-mile terms. We have confidence in the further expansion of this trade, and our intention is, as always, with our capital allocation to proceed judiciously, mindful of our steadfast commitment to maintaining a solid balance sheet. We believe that this is the route by which we can earn the best return for our investors and continue to provide top-quality services to our customers and a safe and fair working environment for our people at sea and onshore.

I'll now pass you on to Ted.

Thanks, John. My comments today will focus on capital allocation, our financial position and liquidity, and our unaudited fourth quarter results. We've been active since the beginning of calendar 2026 in growing our business and rewarding shareholders. First, we took delivery of the Areion in late March, our fully ammonia-capable 93,000 cbm VLGC. As you would expect, she immediately started contributing to earnings, though we won't see the P&L impact until the first quarter of our fiscal 2027. The most recent irregular dividend of $1 per share, a significant increase from the prior quarters, reflected the strong underlying market and our board's commitment to creating shareholder value. Second, we completed the sale of the 2015-built Cobra in May, paying off $16.5 million of debt in the process. We expect to generate a gain on sale of approximately $30 million from her sale.

I would note that her sale price was actually greater than her contract price in 2015. Finally, we will complete the repurchase of the Corsair for her sale leaseback before month-end, which will require a payment of about $24.2 million in total and positions us to be flexible with any potential opportunities. In March 31, 2026, we reported $327.4 million of free cash, which was sequentially up from the previous quarter. Cash flow from operations was $82 million, or nearly $2 per share. As we noted in our press release, we borrowed $62.9 million upon closing of the delivery of the Areion, covering the final payment to the yard. As we disclosed then, the Areion loan has two tranches, one seven years and one 12 years. Weighted average spread of over 10 years and a weighted average margin between the two tranches of 125 basis points over SOFR.

We closed the fiscal year, therefore, with a debt balance of $565.8 million, but given the payoff of the debt in connection with the sale of the Cobra and the Corsair repurchase, the pro forma balance would be $524.7 million. Based on our stated book, however, at quarter end of $565 million of debt, our debt to total book cap stood at 33.2% and net debt to total cap of 14%. We continue to have well-structured and attractively priced debt capital with a current all-in cost of about $5 million. An undrawn revolver of $42.9 million and one debt-free vessel. Coupled with our strong free cash balance, we have a comfortable measure of financial flexibility.

We expect our cash cost per day for the coming year to be approximately $26,000 per day, excluding capital expenditures for the dry docking of the Captain John, which is currently planned for our fourth fiscal quarter. For the discussion of our fourth quarter results, you may find it useful to refer to the investor highlight slides posted this morning on our website. I remind you that my remarks will include a number of terms such as TCE, available days, and adjusted EBITDA. Please refer to our filings for the definitions of these terms. Looking at our fourth quarter chartering results, since our entire spot trading program is conducted through the Helios Pool, its reported spot results are the best measure of our spot chartering performance.

For the March 31 quarter, the Helios Pool earned a TCE per day for its spot and COA voyages of $65,600 per day, reflecting more favorable VLGC market conditions. Our utilization improved sequentially to 97.8% this quarter from 94.6% in the prior quarter as the last of our dry dockings for the 2014 to 2016 class was completed. The overall TCE result for the pool of nearly $63,300 per day reflects that very strong rate environment as well as our time charter out portfolio. On page four of our investor highlights material, you can see that we have six Dorian vessels on time charter within the pool, indicating spot exposure of just over 80% to the 31 vessels in the Helios Pool. Dorian's reported TCE revenue per available day for the quarter was about $63,615, which is the second highest TCE rate we have earned in our corporate existence.

For the year, we earned $52,238 per day, with the fourth quarter completely offsetting our sector's relatively slow start to the fiscal year. The current rate environment remains healthy, though Panama Canal transit fees are having an impact on realized rates. We'd note that most posted TCE rates do not include auction fees for VLGCs transiting the canal, which have ranged from $200,000 to as high as $4 million in the last weeks. Also, they do not include the effect of ballasting around the Cape of Good Hope, which can also have a significant impact on realized TCEs. We plan to issue our forward-booking information in the near future. Daily OpEx for the quarter was $9,548, excluding dry docking-related expenses, which was virtually flat with the prior quarter's $9,558.

Our gross time charter in expense for the six TCE-in vessels came in at $18.4 million, or about $34,100 per TCE-in day. Those vessels contributed positively to our quarterly profits. As a reminder, the profit-sharing expense on our P&L represents MOL Energia's portion of the net chartering profit. That's the charter hire earn less the charter hire expense on the BW Tokyo. Total G&A for the quarter was $13.3 million, and cash G&A, which is G&A excluding non-cash compensation expense, was about $11 million. This amount included accruals under our bonus plan of $3.5 million, the payment of which is subject to completion of our annual audit. $200,000 of statutory non-cash accruals and about $300,000 of pre-delivery costs related to the Areion. Excluding those amounts, our G&A was about $7.1 million, which reflects a level that we believe is sustainable for the near term.

Our reported adjusted EBITDA for the quarter is $106.6 million. Total cash interest expense for the quarter was $6.6 million, which is down sequentially from the prior quarter. Principal amortization remains steady at around $13 million. We expect the full quarter interest cost of the Areion to be approximately $800,000 in the coming quarter. The irregular dividend declared at the beginning of the month of $1 per share is our 19th and brings to $18.65 per share in irregular dividends that we have paid since September 21. The increase in the dividend versus the prior quarter is consistent with our previous discussions around the topic. It reflects a balanced mix between results and the long-term needs and prospects of the business.

Including the irregular dividend to be paid this month, we've paid nearly $770 million of dividends and have generated net income of $835 million since June 30, 2021, which is the quarter immediately prior to our first irregular dividend. As we've discussed, our board weighs current earnings, our near-term cash forecast, future investment needs, and the overall market environment among a number of factors in making its determination of the appropriate level, if any, for our dividends. As John Hadjipateras has already mentioned, our sector can be a volatile one, and our dividend policy needs to reflect that. The $1 per share irregular dividend certainly reflects a constructive market outlook while also allowing the company the flexibility for future fleet reinvestment.

We continue to be on the lookout for fleet renewal opportunities, and we'll be judicious with our free cash flow, working to balance shareholder distributions, debt reduction, and fleet investment. With that, I'll pass it over to Tim Hansen.

Yes, thank you, Ted, and good day, everyone. The quarter ending March 31st, 2026, ultimately carried the positive momentum from the quarter prior, and saw higher freight indices for the VLGC freight markets. I closed my remarks from the quarter prior about likely geopolitical impacts and the VLGC market's ability to demonstrate agility to capture the opportunities that arise from such challenges. We believe both have materialized and that the company has been a key actor in that story. The quarter ending March 31st, 2026, is best understood by looking at the period before hostilities in Iran started and the period after hostilities commenced, and to look at them separately. While global seaborne LPG transport was down for the quarter to levels not seen since the first calendar quarter in 2024, the decline was driven by the de facto closure of the Strait of Hormuz.

The decline masks the results of record high production levels from the North America, which hits a new record high of exports near the 20 million tons mark. The favorable fundamentals of LPG production and accompanying seaborne transport prior to the closure of the Strait of Hormuz further supported a first calendar quarter, seeing a wide West to East arbitrage and persistently high freight activity levels. This does not mean the freight markets only saw smooth sailing, however. Prior to the closure of the Strait of Hormuz, industry players was analyzing potential impacts from the removal of President Maduro in Venezuela, macroeconomic concerns brought on by the rhetoric threatening the end of the nation, and the U.S. Supreme Court striking down IEEPA tariffs.

It is not uncommon to see softness in the first calendar quarter in the freight markets with lower activity when importers reduce imports as spring approaches or due to a slowdown in the Far East around the Lunar New Year holidays. This was not the case in 2026. Activity was strong through the holiday season to compensate for the disruptions we saw in October and November during the port service fees spat between the U.S. and China. The winter in the Far East was long and cold, while cold snaps in the North America was not severe enough to weaken production levels. The West to East arbitrage was therefore applying, and VLGC freight was supported by the fundamentals. There were significant challenges to capture the value in the market, however, and periods of uncertainty because of developments in Venezuela, fierce protesting in Iran, and worries about nation cohesion.

While none of these factors directly impacted the VLGC LPG market, the macroeconomic picture was certainly complicated. If one subscribes to the argument that more internationally tradable Venezuelan oil was positive for the world economy, the caveat was if the Chinese economy would suffer by losing near monopoly access to low price Venezuelan crude oil. If one believed that the protests in Iran would topple the Islamic Republic and lead to softening sanctions, the likelihood of significant and dramatic scrapping of the shadow fleet would upend models of vessel supply. Right through the Supreme Court decision to strike down April tariffs, these geopolitical events, even if not directly impacting the VLGC freight market for long periods, ensured that the market players remained active at the desk to consider the upsides and the risks.

The period before the death of Ayatollah Khomeini was marked by positive VLGC fundamentals with value captured by an attentive and active market. Once Iran was bombed and thereafter retaliated against the Gulf neighboring countries, a new and complicated dynamic emerged for the VLGC market. The effects of the regional conflict are felt worldwide and through all parts of the economy. I'll focus on a few key aspects that directly impacted the VLGC markets over the relevant quarter and through April. Regarding freight levels, they have been mostly higher after the closure of the Strait of Hormuz, although it was not a consistent increase. For narrow windows of belief that the Strait of Hormuz would open, more vessels would hold back from balancing to the West and oversupply the Western market.

During other periods, there was zero belief in the strait opening and more vessels supply was available in the West. High freight has not been disruptive to the arbitrage as that widened dramatically on the back of importing nations facing shortages. The Far East index was bid up and import demands kept the arbitrage wide open. The fear of shortages spread to the bunker markets and the key bunker ports. Currently, prices have normalized and concerns of shocks to supply are less immediate. Through March, some ports saw a doubling of costs. Some countries ended bunkering services to prevent or to preserve energy stocks. Even to this day, from when storage tanks were reportedly hit in Jeddah, the physical export capacity were in question.

The higher freight markets on the back of the wide-open West to East arbitrage was further supported to cover the high bunker expenses for shipowners. Two additional external factors resulting from the Iran conflict have further raised freight levels. Trade lanes have had to recalibrate and did so successfully, resulting in longer ton-miles. The VLGC market already demonstrated ability to readjust quickly after the Russia's illegal war on Ukraine and through periods of tariff wars and have delivered again now. With minimal ability to supply, for example, India from the Middle East, there's been a greater flow of cargoes from the U.S. to China. The lengths of voyages and port turnaround uncertainty have tightened the market. The Panama Canal has contributed to absorbing vessels apart, resulting in significantly higher Panama costs with the increase in port fees.

This is mostly due to all goods and commodities, including LPG, seeing high delivered price in the Far East. Segments that previously saw less urgency to get to Asia quickly through the Panama Canal returned to use the canal, and congestion has been on a steady increase since the bombing of Iran commenced. The impact of an increasingly congested Panama Canal persists through this current calendar quarter as well, continuing to keep the availability of vessels tight and the freight markets high. With that, I will pass it over to Mr. John Lycouris.

Thank you, Tim. At Dorian LPG, we remain committed to continually enhancing energy efficiency and promoting the sustainability of both our operations and of our vessels. We currently operate 16 scrubber-fitted vessels and six dual-fuel LPG vessels after taking delivery of the VLGC/VLAC Areion. Higher oil prices in March due to the Middle East conflict and the subsequent blockage of the Strait of Hormuz led to higher bunker price differentials, which underscore the importance of scrubbers and our fuel efficiencies efforts. Scrubbers neutralize sulfur oxides from fuel oil while significantly reducing particulate matter and black carbon emissions when compared with conventional VLSFO, very low sulfur fuel oils. For the fourth fiscal quarter of 2026, our scrubber vessel savings amounted to about $3,482 per day per vessel, net of all scrubber operating expenses.

Fuel differentials between high sulfur fuel oil and very low sulfur fuel oil averaged $89 per metric ton, while that of LPG as fuel versus very low sulfur fuel oil stood at about $205 per metric ton, making LPG economically attractive for our dual-fuel vessels. We have now completed the statutory special survey and docking cycles of our 2014, 2016 class of vessels, with the last vessel completing her special survey during this past quarter. As previously announced, Dorian LPG took delivery in March, the 93,000 cbm dual-fuel new building, Areion, from Hanwha Ocean. The Areion is a dual-fuel ship, which can operate on LPG and fuel oil and fit to carry full cargoes of LPG and/or ammonia.

When operating on LPG, CO2 emissions are approximately 20% lower, while sulfur oxides, particulate matter, and other pollutants are significantly reduced. With this second wholly owned dual-fuel LPG vessel, 20% of our fleet now runs on low-emission alternative fuels. Areion is also fitted with a hybrid scrubber capable of closed-loop operation for restricted ports and for the emission control areas. Our March press release provides additional details on the ship's operating capabilities and her advanced technologies. MEPC 84 concluded their discussions of the IMO Net-

If the Net-

Thank you, John. Madison, if we have any questions, we're ready to take them.

Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question, and we'll pause for just a moment to allow everyone a chance to join the queue. We will take our first question from Omar Nokta with Clarksons Securities. Please go ahead. Your line is now open.

Thank you. Hi, John, Ted, Tim, and John. Thanks for the update. Sounds like clearly a lot of stuff is happening. You've had a nice quarter, and the next one looks like it's going to be off the charts. Just have a couple of questions. Maybe just first, it looks like you've taken advantage of a pretty good market here, to put some ships away on term charter, as you highlighted. I think it's been a while since we've seen you add perhaps this much in duration. Just want to get a sense, what's your appetite to do more of that? I guess perhaps maybe for both you and the charter, what's the desire look like to add more TC coverage? Are you willing to disclose any of the terms in terms of day rate?

Thank you, Omar. We've disclosed as much as I think we're entitled to disclose under the contracts that we have. As regards our future appetite, it really is rate dependent. There's always this element in a very high spot market where you're giving up the immediate earnings to get the length at the back end. I think we have a balanced view. I mean, we're not scared of the spot market, but if the rates are right for cover, well, we're happy to take more cover as well. I know this isn't very precise, but it's kind of a general idea of where we're at in terms of our approach to the chartering on term.

Okay. I appreciate it, John. That's helpful. And I guess maybe, I think, Ted, you were discussing sort of the spot market at the moment in terms of, say, rates and how they're not perhaps indicative of true earnings when you take into account some of the costs at the Panama Canal, whether it's the auction fee or maybe the wait time or the diversions. Do you care to maybe give a sense of, hey, if headline rates today, say, they're at $170,000 per day, what would you say is the true real earnings that are being captured? Any sense you're willing to or able to share?

Yeah, I am. I think Tim can answer that question. Yeah, Tim, you want to take a shot?

It's fluctuating quite a lot. If you see the auction fees, for example, on a Panama run went up to $4 million. If you divide that over a 60-some-day run where you are kind of reducing your TCEs with a 60,000+ a day, right? Not all hit that, so it's varying quite a lot. If you ballast around the Cape, you have a longer voyage so you have to spread out the same lumps of freight on more days which will drop the result even without, I think, anything by maybe $10,000 a day. Even you get shots on the Panama, you most likely wait a few days because you don't want to jeopardize running late for your slots because you will never get in. It's a bit of idle time.

It's depending on what trades you would pick, but you will easily, as time value is high be $10,000, $20,000, $30,000 below the highlight rates on average.

Okay. Thank you. All right. It still has the 100+ number.

It's still low, of course, yeah.

Yeah. Maybe just a last one from me, maybe just kind of on the point of the U.S. export market, because there's been a lot of discussion on Panama Canal and the diversions. I guess just generally, just given what's gone on in the market here over the past almost three months, has the VLGC trade, and I guess your business specifically, has it just completely shifted now to a pure U.S. exposure? Or are there other areas where you're active where there's cargoes to be taken?

For us, as Helios, where we trade the spot, from the time where we saw the neighbor ships heading towards the Gulf, we decided to stay away. We've always been very focused on the U.S., so up to 80% of our business or our liftings, and if you count the days with the longer voyages, maybe 90% of our coverage has been focused on U.S. Today it's basically sole U.S. and Canada, U.S. on the West Coast, where we do not touch AG. We do fix the occasional West African voyage, of course. If someone wants to pay up for the shorter voyages out of Australia, we would look at that. Yeah, 90%, 10%, I would say U.S., Canada.

Got it. Okay. Thanks, Tim, for that very helpful color. John, Ted, thank you. I'll pass it back.

Thank you, Omar.

Thanks.

Yeah, always good questions.

Thank you. We'll move next to Stephanie Moore with Jefferies. Please go ahead. Your line is now open.

Hi, good morning. Thank you for the question. Maybe just a follow-up to the last kind of string of questions here. Agreed, really strong quarter. Looks like the next quarter is going to be quite robust given the underlying environment. With that as the backdrop here, and what remains really strong cash generation and obviously a really constructive outlook, could you just maybe talk to us about how you are prioritizing capital allocation across dividend de-leveraging, fleet expansion, especially in this environment? An update there would be helpful.

Thanks. Thank you, Stephanie, and welcome to covering our sector. Yes, I'm going to hand over to Ted to give you an answer on that.

Hey, Stephanie. I think, look, it's a bit of a dynamic balancing act. As you know, our debt amortizes pretty steadily, and most of it's very attractively priced. We haven't seen a need to proactively manage prepaid debt. The dividend is obviously an important part of the story for investors. We continue to make that a centerpiece as we think about funding. As John kind of touched on, fleet reinvestment is certainly in the picture, always has been. It's a little different than some other sectors, say midstream, where it's a little bit easier to quantify how you're going to break things out. I think from our perspective, it's a bit fact and circumstance dependent. We are looking for those opportunities for fleet reinvestment as our fleet gets up in age. It's still a great fleet age. It still has great technology.

I think if we saw a great opportunity to acquire a meaningful fleet, we would do it. If we felt that we had to have some impact on the dividend, we'd have to look at that. On the other hand, it's a really big part of the total shareholder return story, and we care about it as share owners. It's a big part of our incentive share program here. There's a lot of driving forces to maintain a preponderance of focus on the dividend as we go ahead.

Thank you. Appreciate that. It's very helpful. Maybe just a high-level question from me. Would love to get your thoughts on just your outlook for the LPG sector for 2026, especially maybe if you touch on if we do see a ceasefire or a bit of normalization in the Middle East, how you're kind of viewing the impact on the overall sector would be helpful. That's it. Thank you.

Actually, Tim, do you want to take a shot at that?

Yeah.

Oh, yeah.

Yeah. Sorry, what do you want me to talk?

Stephanie asked about what our views were on the post-Middle East stabilization view of the LPG trade, which I'm passing to you because it's a really hard question.

Yeah. Thank you very much.

Yeah, no problem. Colleagues are for.

It's really depending on when it will happen because, even though we are profiting now from the longer haul and U.S. has managed to produce much more for exports, the LPG is still in short supply in the world. We are seeing if it lasts for longer, it will result in demand destruction. We also don't know exactly how badly hurt the Middle East is on their ability to export once it comes back open. We expect at the moment when it opens, we will probably see more vessels available with the ships captured in the Middle East available in the market, and it will be a little bit of time before the export ramps up again.

You could see a bit of an oversupply of ships at that point, but it's really depending on where the ships are positioned at the time and how people perceive the ability of the Middle Eastern exporters to ramp up again and whether they will hold ships back from the Middle East or not.

Yeah. Thanks, Tim.

Yeah.

Stephanie, as a general remark, I just tell you that what we try to do all the time is plan for the worst and hope for the best. I think the worst outcomes are so varied that it's impossible really to handicap them all. We try, and we're hoping for the best. At the moment, we're enjoying a good run, and I think that kind of encapsulates what we'd like to say on the subject right now.

Yeah, no, appreciate it. Thank you. Didn't mean to give you such a nuanced question there. The insight is very helpful. Thank you for the time.

Thanks, Stephanie.

Thank you, Stephanie.

Thank you. Once again, if you would like to ask a question, please press the star and one on your keypad now. We'll move next to Climent Molins with Value Investor's Edge. Please go ahead, your line is now open.

Hi. Thank you for taking my questions. Tim, you talked about the Panama Canal and the impact that increased transits has had on auction pricing. Does this apply to both the old and the new locks, or especially on the latter? Secondly, can you comment on the percentage of VLGCs transit that heading towards the Far East have decided to avoid the canal?

Good. Tim, can you answer that one, please?

Yeah. The auction fees at the moment, the impact is on the new canal. There has been some increases on the old canal as well or the old locks, not to any comparable effect. It's mainly the new canal. You could see some auction fees on the old canal coming up as there's going to be some repairs and maintenance in June, that can change. At the moment, the increases we have seen is on the auction fees on the new canal. With regards to routing, we see more and more people routing via Cape, we do the same as we have experienced the high canal cost. It's a moving situation. It went so that the value from the canal down to almost $1 million in a week or two. Again, we can change it now later.

At that time, you would already be on the ballast leg towards the Panama. Just imagine your risk appetite when evaluating the risk/reward of taking the chance and going via Cape.

Okay, that was very helpful. I have another question regarding Panama Canal. A couple of years ago, we had the El Niño event and it made a lot of Panama Canal Authority build more flexibility to tackle this. Have Canal Authority built more flexibility to tackle this should we see a repeat of the El Niño and little rain in the region? Should that happen, do you believe that we would see a repeat of what we saw a couple of years ago?

I think-

They learned a lot during the Cape in 2023 by being able to retain water, and that does have less outflux of the water, but they cannot prevent it. We will see a result of this if El Niño, which is likely to, or 7% or whatever it is likelihood at the moment, would happen over a longer period. We will see reduced draft in the Panama, maybe not to the extent as of 2023.

Okay. That's helpful. I'll turn it over. Thank you for taking my questions.

Thank you very much. Madison, I think we can close. Thank you everyone for your interest, and see you next quarter.