Emanuele Lauro - CEO Brian Lee - CFO Robert Bugbee - President Cameron Mackey - COO James Doyle - VP.

Douglas Mavrinac - Jefferies Amit Mehrotra - Deutsche Bank Noah Parquette - JPMorgan Gregory Lewis - Credit Suisse Spiro Dounis - UBS.

Operator:.

Hello, and welcome to the Scorpio Tankers Fourth Quarter and Year-End 2015 Conference Call. Today's call is being recorded. I would now like to turn the call over to Brian Lee, Chief Financial Officer. Please go ahead, sir..

Thank you, and thanks everyone for joining us today. On the call with me are Emanuele Lauro, Chief Executive Officer; Robert Bugbee, President; Cameron Mackey, Chief Operating Officer.

The information discussed on this call is based on information as of today, February 29, 2016, and may contain forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements.

For discussions of these risks and uncertainties, you should review the forward-looking statement disclosure and the earnings press release that we issued earlier today, as well as on scorpiotankers.com, you'll see all of our SEC filings.

Call participants are advised that the audio of this conference call is being broadcast live on the internet and is also being record for both playback purposes. An archive of the webcast will be made available on the Investor Relations page of our website for approximately 14 days. Note, on the call, there will be a short slide presentation.

Those slides are available at the Investor Relations page as well. Now, I'd like to introduce Emanuele Lauro..

Thank you, Brian. And good morning and thanks for being with us today. The fourth quarter numbers were solid. 2015 numbers were solid. Year-over-year performance is improving and we're pleased about our things are shaping out. The vast majority of our fleet is now delivered and operating.

This combined with the current market conditions allow us to deliver consistent earnings, allows us to plan for a consistent dividend distribution in an environment where supply and demand from the mentors are looking consistently in our favor.

Despite the macroeconomic uncertainty of the last few weeks, all the macro factors related specifically to product tankers are actually in good shape. As we discussed multiple times in the past, trading patterns in the product tanker space have been changing quite substantially in the past five to seven years.

My colleagues James will walk you through a few slides in a minute, outlining and comparing the trade routes, differences between MRs and LR2. These trading patterns and the changes have undertaken in the last years is what showed us the solidity of the freight environment then we can expect going forward.

The shipping markets are generally volatile and cyclical, whilst we cannot plan for the unforeseen, we can certainly and we have certainly assessed, analyzed and prepared for the product tanker trade evolution of the last years. We have done this in many ways.

For example, choosing the assets, timing the order of these assets and their specification and deciding where to deploy them, I mean in which geographical area when these assets got delivered to us. Whilst we would like to tell you that the expansion of the company and its fleet was timed perfect due to results.

We must admit that a degree of [indiscernible] helpers in building, what is the biggest and most modern product tankers fleet in the world today. It's up to us now to make sure that we stay prompt and focus on creating value and returning capital to our shareholders.

With this, I would like to turn the call to James Doyle which will go through a couple of slides as I have discussed..

Thank you, Emanuele. The Scorpio Tankers' fourth quarter 2015 earnings presentation to be accessed on the Scorpio Tankers website through the webcast link under the event section as well as the corporate presentations' tab. Information in these slides is based on Scorpio Tankers' actual fixtures in 2015.

On slide two, we highlighted a comparison of the major MR and LR2 trade route we saw in 2015. As Emanuele said, these trade patterns changed and are very diverse, specifically in regards to the MRs. The top MR trade route was US Gulf to Caribs and compiled 10% of our fixtures. And the next was the Middle East and following US Gulf to UKC.

These cargos predominantly were cargo, where diesel and oil and gas link. The US refineries operated at 96.1% utilization in August of this year. The highest level on the decade, which was a large reason for such increasing activity in the Gulf. Now the LR2 major trade routes are composed, primarily Middle East to Far East at 17%.

However, what we've seen more is surprises moving in the Far East, not only discharging, but loading. Specifically, diesel, gas, oil, kerosene and jet. What we've seen is the Far East to South East Asia at 7%, Far East to West Africa at 7% and Far East to UKC at 6%.

The date difference here is when that the cargos go from the Middle East to the Far East, these cargos on the return are being carried farther and longer distances than they have in the past. On slide three, we do a breakdown of the world and discharged regions for MRs and LR2s. As you can see, loading in the MRs 26% loaded in the USG.

Of these load, diesel and gas well comprised 55%, and gasoline 26%. The UKC were 12%, with 82% gasoline and the Far East 13%, which composed of diesel, gas, oil at 44% and kerosene and gasoline at 20% each. Discharging was predominantly in Taurus and UC Max [ph] at 16% and UKC at 12%.

For the LR2s, one of the biggest differences we also saw with loading in UKC. In 2014, we did not have any gasoline cargos loaded in the UKC for LR2. We saw 54% of the cargos for the UKC at gasoline and 38% naphtha. From these gasoline cargos were primarily going to the Southeast Asia mainly San Port [ph].

The big change from 2014 has been the increase in the loading activity in the Far East.

These longer routes carrying diesel, gas, oil and kerosene and jet at discussed from Far East to West Africa, Far East to South East Asia consisting of diesel and gas, oil well as well Far East to UKC kerosene and jet has shown an increase in the trading activity on the return trip from the Far East.

What we also saw was for the first couple of slides was the UKC to South East Asia which consisted primarily of gasoline and naphtha. On the next slide, we show a breakdown in the cargos that were carried in each type of vessels. As you can see from the Scorpio MR cargo types, 40% were diesel and gas, oil and 39% gasoline.

In the LR2s, we saw an increase in diesel and gas oil now that composed of 36% and naphtha at 34%. The big increase we saw was actually in kerosene and jet in the prior year. And this is a reflection of cargos going to UKC mainly kerosene and jet fuel from the Far East.

In the next slide, slide five, you can see the fleet activity from vessels to the MRs and the LR2s. As you can see the MR activity is very diversifying, whereas the LR2, the smaller number of vessels you can see the activity going to the UKC as well as in the Middle East and Far East.

This is consistent with the data we have and for the good job of showing how these vessels trade, specifically the diversification of the MRs, but also the increasing diversification of the LR2. I would now like to turn the call over to Brian Lee, who will discuss the remaining part of the presentation..

Thanks, James. I just want to point out in slide six, where we have the schedule, the dividends to the adjusted EBITDA. There is a reconciliation in the appendix for that calculation.

But if you can see here, we have a strong sustainable dividend where the percentage in the Q4 2015 was 35%, but it went down overtime to Q3 was at 15%, so our dividend to our EBITDA at 15%. And finally 22% for Q4 and in 2015, that total was 19% of EBITDA was dividends made up 19% of the EBITDA.

So again to emphasize a strong stable and a sustainable overtime. Now, I would like to turn the call over to Robert Bugbee..

Hi. Good morning, everybody. We'd like to reemphasize a couple of points that the company, the Board, the management focused on running the business and focused on consistency and sustainability. We were excited about the prospects to the product market and all make this is whether it supply or demand it looks positive going forward.

We are however working in a general world environment, where the general capital markets are perceiving a number of financial risks, some of which pretty hard for us to handicap, certainly hard for us to control. So, therefore, we will be very focused remaining on its consistent sustainable approach.

That uncertainty in the capital markets though is helping us long-term. We do not see a building of the supply side, new building orders very constrained and I think all this is helping the product market probably to be stronger for a longer period and with those is opening remarks from all of this. We just like to open it up for question time..

Thank you. [Operator Instructions] And we'll take our first question from Doug Mavrinac with Jefferies..

Thank you, operator. Good morning, guys. First off, very nice job Robert on the charting performance for your fleet for 4Q and thus far in Q1 quarter from date, I mean these rates are very impressive compared to industry averages. So, just wanted to say that notice and that's very, very nice job.

When you look at where we stand today in the first quarter, you guys have locked in some very good rates thus far. But the current spot market has softened a bit from those levels.

My question is that just pure seasonality or do you see something bigger at work that's causing these LR rates and MR rates to be in the mid to high-teens right now?.

Well, things are moving very fast. So, I think you'd have a very natural seasonal say for 2 or 3 weeks like we are having in the moment on the LR2s before the LR2s really start entering their stronger season over the spring in the summer..

Right..

And so the rate that we've seen during the winter are strongly supportive that supportive in the MR2 to the extent that we really had no winter in the Northern Hemisphere and I think that's what really exciting about the product market is, so as these change went through some of the cargos that we're carrying is that they although it's fear the world industrial slowdown China et cetera.

The product market is so diverse and is really tapping into what this world economy is doing with low oil price low interest rate is stimulating the consumer, so you're saying the jet fuels and gasoline. Now, I would beg to differ with rates to the MR; the MRs have done exactly what they should do.

I mean they have tracking strongly last year on the seasonal basis, you had a little dip up until about a week ago and then last week they really started moving out very hard.

So, as we look at MRs today on this conference call after the end of the last week on a world adjusted basis and this obviously is for future earnings outside of what we've reported this morning for the first quarter. The overall rates have probably at the strongest where they've been for several months now. I mean TC14 made a big move last week.

The Asian market started to make move. So, again, we're feeling very good on the fundamentals market at the moment. We are confident that the LR2 obviously that been a fantastic bonus for the last 3, 4 months and give them 2 or 3 weeks as they turn towards their strongest season they'll come up to.

So, if anything as we speak right now, I think this is the fascinating thing about the product market for us, it's because month-over-month, week-over-week, quarter-over-quarter, we have our actuals have come in much better than our estimated earnings for the market points.

There is no possible way that if you had called us the Northern Hemisphere winter would not effectively exist for 2.5 months. What we have anticipated the earnings that we have delivered either at the end of the fourth quarter or this first 60% to 80% to the first quarter.

That is really encouraging that it's beating our internals and that can only be result of the real for the industrial everyday demand as opposed to seasonal..

Right. And because that's what it appears like Robert, because like you said, rates today are stronger than they were a year ago for finder catch utilization levels are higher than where we were a year ago. So sequentially, this seem like it was just - but I just wanted to make sure that you guys are recovering that..

I'd make a point, I mean I've read a couple of that reports and things and people still seem focused on sort of fourth quarter to third quarter sequentiality part, but it looks it's seasonal..

Right..

For us, we really - the better comparison for us is the fourth quarter '15 over the fourth quarter '14 is a huge difference; that's what really matter to us.

And the other thing is perhaps companies that have less consistent, less sustainable dividend policies than us, it is reasonable that people should care about quarter-over-quarter because that dividend is paid on. But our dividend does not move just because the fourth quarter seasonally is weaker than the third quarter..

Right. Yeah. And so then kind of taking some of those comments and then also some of the premier comments about kind of how the trades has evolved over the last 12 months, 44 months et cetera.

China is adding a lot of refining capacity this year and I know there not a big historical exporter, but my question for you guys is, could you start seeing some of those products make their way to the product market either directly in the form of additional increases in their dissolute exports or how do you see that affecting the regional pricing arbs that could then be in the field for the fire?.

I think that's one of the great ironies that the world and commodities is concerned about China, but China's development in refineries is actually added to product tanker demand, right. China does not exist for us in the product market up to a couple of years ago, except for base floor [ph] caustic sodas and things and this is really exciting.

I mean this is just pure incremental extra ton miles coming out of these and as we pointed out, we have really spoken about the LR2s before, but it's amazing that they set a modern LR2s with deep well pumps and the tank coatings. I mean they are not triangulating quite yet as the model, but they are triangulating on that front..

Right. Got it. Very helpful. And then final question before turn it over. You guys have recently been taking advantage of the three-year time charter market you announced some three-year time charter spec in October, you also secured some additional ones in December.

So my question is when you look at kind of your decisions behind securing those three year rates where the December ones similar to their October ones where there was a commercial aspect of it in terms of customer coming to you or was just the rate so good that you like right well walking this thing up at 18 grands a day for three years, that's pretty good deal..

Well, I can show you the rate of 18 for three years, we don’t think it's subdued.

But - consistency as Emanuele said, up to earnings and part of the way that you get good performance on your time charters and revenues in your pool is that we are targeting very specific customers that we believe that by enhancing relationships towards will enhance a spot trading and it was very okay to give certain of those customers a time charters to get closer to them to enhance the overall position.

And I think as a company is and even now it's open things up in a way what we just done now is become - we financially deleverage, but there are opportunities out there for us to take advantage of what is now opening up.

It's a quite an arbitrage situation between what we think we can earn in the spot market and what we think someone else without the systems and without the huge platform we have and customer relationships we have.

So, you could, I would expect that our - one of the things that you would see as you would see our stock take advantage of that aspect of it..

Well, it seems like you guys are already ensuring do a good job of that because like I said the industry averages for 4Q and thus far in Q1 were really good, so Robert that's all I had..

Yeah. If you can create a situation where you can take other people shift, what you've got the spread to the market that's a great position. Anyway, thank you..

Yeah. Thanks, Robert. Great job..

We'll take our next question from Ben Nolan with Stifel..

Hi, this is Steven [ph] in for Ben Nolan.

Just had a couple of questions first one is in around the operating expense, we know this was slightly higher than it had been in previous quarters, could you give a little color as to why that was?.

Part of that is a timing difference, you should look at, there was a lot of additional expenses in the quarter. So really one quarter from another is you can't always compare so that was just a little bit higher during that period..

Okay.

Moving forward, should we think of the fourth quarter as a good run rate?.

I would say it’s a little bit lower, so I would say for the LR2 is you're probably looking maybe around 7,200 and then for the other two categories, the MRs and the Handys around 6500, 6600..

Okay, great. Thank you.

Next one is with kind of the arbitrage spreads we're kind of seeing develop, have you seen any increased demand for floating storage for product tankers?.

No.

I think that’s another exciting aspect for the product tanker market is that it’s pretty well going from hand to mouth and none of our ships, we have a pretty extensive position if you add the pool ships to the Scorpio Tanker suite and not one of our ships around the stories [ph] contract and that's nearly 10% of the total spot market in the world..

Okay, perfect. Thank you.

And my last question deals of your share repurchase plan, a couple of more shares last quarter, so you still have the converts out there, how you're thinking about that program moving forward in terms of both the equity and the converts?.

I think it’s something that we wouldn’t discuss publicly..

Okay. Thank you for your time. I appreciate it..

Thank you..

And we’ll take our next question from Amit Mehrotra with Deutsche Bank..

Yes. Thank you. Good morning, afternoon, everybody. So, Robert, I just had a question on recent comment you just made on the prior question about Scorpio Tankers performance relative outperformance.

If you look at the reported TCEs for the company over the past couple of years and compare those to the average spot rates in each of the respected periods, the company really outperformed the market from most of 2014, but then that sort of outperformances disappeared sort of in 2015 where you know the TCEs achieved were pretty much in line with the quarter grades and the average quarter rates and in some cases well below.

I know there are a lot of variables you can go into this, but wondering if your thoughts on this observation and as the suite has basically gotten much bigger over the last year and a half, does the company sort of have ability to outperform the market diminish somewhat if you can….

Amit, I don’t know where you’re looking at, I mean you can look at public comp, you can look at the fact that we increased pool members into our pool, pool members that had choice, pool members that were pooled with other companies, other competitors who moved over to Scorpio Tankers of which the performance was what did it.

I think in many ways I have no idea because in some senses obviously we’ve outperformed indexes related to LR2s for example. And we’ve outperformed peers in straight up MR TCE positions.

So, from our side we’re very confident that in terms of the general market or the general earnings whether they are in the LR2s or MRs we are certainly creating ops against people with less size in terms of fleets and less scope and less sophisticated platforms..

Yeah, I mean maybe we can take it offline because maybe I'm looking at it incorrectly, but it just seems that if you take…..

I think you’re totally looking at it incorrectly..

Okay. All right..

We've met a record with the other companies that are comparing, but I don’t really want to, this is not about slanting other companies, this is about we operate comfortable in our own states and we’re already comfortable with our platform which has taken a while to evolve will help us create that consistent sustainable outperformance..

Okay. All right, let me just switch..

We told quarter-over-quarter, but overtime..

Okay. All right. Let me ask just one more if I could and just a question on the order book and the market. I mean it's definitely true that the rates really across the product tanker segment are very healthy albeit sort of still off the highs and mid-late last year, but still very healthy.

And with respect to the order book, the MR order book looks really good as we sort of look out over the next 12 to 18 months. But the LR order book is still quite significant and I just wanted to get your thoughts on that in terms of what kind of impact that could happen in the market and could you have a market where LRs and MRs sort of bifurcate..

Unlikely. Because as you've seen, you can't really have in the product market very long, one market, one of the major markets doing super well and the other one doing badly, because there is a double up cargos, so there were split cargos.

And I think that this is something we're trying to point out in this presentation is that the LR2 market is not the LR2 market at all, which was really just the ATX Japan with Naphtha. So, they are pretty well interrelated.

I think however, that we are seeing whether it's the refineries coming up in the Middle East and central like that will lead to the way the market is doing is that the demand side for the LR2 in general has been growing faster.

And I think that we are comfortable when we look at the - we don't total up, we don't separately look at Handys, MRs and LR2s. We look at the combined position in the market where you could see exception is perhaps in the I Plus Handys where with Russia doing what they can to maintain their exports.

The I Plus Handy looks fairly interesting as a separate category, because clearly you have that I Plus donations to trade in those areas of the time. And that order book is almost zero. So we're quite keen on relative, but otherwise LR1 MRs, LR2s it's kind of whatever..

And then a lot more [ph] said in their conference call that they actually had been asked to slowdown one of their ships significantly on its way to the ports. Because essentially the tanks referral, is that at all anecdotally what you're seeing in terms of..

No I think that I think that you can always have a ship in a volatile market. I can't remember the time of [indiscernible] conference call. And today the oil only goes up and down $1 a day, back then it was super volatile of $3 to $4 a day swings.

And I think that that would have been more related to a trader trying to hold in the best place to deliver the position..

Yeah. And last question from me and then I'll hop off. The sale of the MRs last week, can you just talk about what drove that I mean I think I know but it will be just helpful that if you could provide some color on that. And then on top of that is there any potential I know you're probably going to see - you're not going to rule out anything.

But is there anything sort of, are you done with that in terms of your portfolio trimming or can we expect something from more from asset sales. Thanks..

Well, I think everybody is looking for this sort of perfectly static model that exists forever through time. We will be very consistent with regard to maintaining the strength of the balance sheet. We think this was an appropriate move for many reasons.

There are so many I mean whether it's the stock and the security trading either below power or below NAV, whether it was for other commercial reasons. Whether it's just simply that in a time like this but it's not so bad when your capital markets are stressing out and are concerned about across multiple sectors, not just thing or the product market.

But across almost every asset backed sector with leverage. The capital markets are concerned. So I think that it's very appropriate to maintain that strength and consistency and sustainability and optionality that a strong balance sheet has fully financed gives you in these uncertain times..

Okay, thanks guys. Appreciate the good quarter..

And we'll go to our next question from Noah Parquette with JPMorgan..

I just have a couple of market questions to follow-up on the commerce about the China and product exports.

Where are you saying those exports going primarily? Are they still staying within kind of the regional area like in the Asian region or have you seen longer trade routes? Are you seeing a simpler situation where that goes as far as Europe?.

No, we're seeing from the Far East, we are seeing Far East to South East Asia which is a little bit closer at 7%, but we are also seeing Far East to West Africa at 7% and Far East to UKC at 6%. So they are going longer wages.

The UKC is primarily diesel, gas oil and kerosene and jet fuel and going to West Africa is also diesel and gas oil and we are also actually seeing is that UKC back to South East Asia being primarily gasoline..

Okay. That's interesting. Thanks.

And can you talk a little bit about how much the LR2 fleet you think is trading right now and has there been a significant shift over the last couple of quarters in that?.

No, it's been pretty stable. I mean the last 4-5 months or so both markets have been doing great.

I mean there is no recall for us to shift our vessels into 30 and it's very questionable as to actually what can be shifted back into clean when the time comes, I mean the owner is going to have to feel there is a pretty sustainable spread overtime and some of those vessels would find it very hard to come from crude to clean after trade being older and trading in crude for somewhat..

Okay. And then I just had a question talking about you're mentioning that optionality benefits of having a strong balance sheet. Obviously the share purchase program, Brian you talked about the shipyards constantly.

I mean how are the [indiscernible] shipyards right now in terms of their ability to lower prices I mean there has been any orders really for the last couple of months.

I mean is that something that you are looking at, is that on the table?.

Cameron..

Well, it's really the big question because I think unlike the last several years you have much more engagement between the sovereigns and the local commercial lenders with the yards on their pricing decisions and also obviously their G&A and cost structure. So, frankly it's been a game of chicken and nobody knows who is going to blink.

What is encouraging for us of course is as you say there has been a lot of ordering and furthermore we are pretty confident that there are some significant or at least material discussions about consolidation in the Korean market going on which would rationalize supply of course. So....

That specifically moving....

Quickly but it's going..

For us specifically, if you remember for the first serial options we have to declare we decline back in December and we don't really want to have a discussion in public.

But I think that it was reasonable to the most people to calculate to work out almost any alternative in terms of allocation on capital be better for the company right now than engaging in a series of new buildings..

Okay. That's all I want to hear. Thanks..

We'll take our next question from Gregory Lewis with Credit Suisse..

Thank you and good morning. Just as we look at supply when we look at the fleet where it is today. I guess one of your competitors this morning was talking about the discrimination of vessels once they reach an age of 15 to 20 years. Just curious if you are seeing that similar development obviously you don't have vessels that all.

But is that something that's going on in the industry where we are actually seeing that type of discrimination for vessels and so as the fleet potentially....

You want to really see that I mean we did a presentation I think the quarter ago or two quarters ago. Anyone who really see that discrimination take any real effect in the product market until next year..

Okay, perfect..

When the actual fleet age profile itself start to have a significant numbers turning 15 years old..

Okay, great. And then what the five MR product tanker sale.

Do you have clearly had a host of reasons for doing it? Is there are opportunities for Scorpio Tankers to potentially sell additional assets as sort of 2016 plays out?.

I think there are always opportunity to sell good quality assets that are creating great cash flows I mean notwithstanding where public securities and the product market is, I mean the relationship if each individual vessels EBITDA to their prices is pretty good at the moment. So the answer will be yes, we could sell other vessels.

However, we've rather we've been seeing that without going into details in relation to let's say when we've chartered out where we're having to see something an additional benefit to just doing straight commercial transaction..

Perfect. Thank you for the time..

Thank you..

And we'll take our next question from Sean Collins [ph] with Bank of America..

Great, thanks. Hi Robert and team good morning..

Good morning..

And I wanted to ask kind of a big picture question. So the sanctions again Iran were lifted in January and Iran is reentered the oil market.

I noticed early very early have you seen any impact or any development from that so far?.

In the products market on the margin some of the ships that are started to fix in there but I think the bigger part of it will come as we keep rolling through these months as you get let's say some more helping to just the aftermath and just the general crude oil side..

Okay, got it. Understand, a second question and understanding that you’ve covered a lot of ground thus far this morning.

Can you give us an update on recent trends in the vegetable, oil and the palm oil markets and kind a how they played out in the fourth quarter and how they look so far in the first quarter thus far?.

I would just say that from the big picture point of view, there are tremendous sort of economic and dietary and as a result dietary changes in countries like India and China that are extremely favorable to the transportation and demand for vegetable oils. There are cultural whether it's people wanting to have a palm oil if [indiscernible] Starbucks.

So we wanting to make so that children have their hair washed once a month in palm oils or even cooking for the low cholesterol aspect of the palm oils, in the west there are things that are driving overall palm oil demand. So both of those areas are extremely favorable.

And they are particularly favorable to the vessel that are sort of set them five years or younger as those are the vessels that are really carried the product for him consumption..

Got you. Understand and that is helpful. And just my last question, just wondering if you have found any regions of the world where you've seen more individual congestion. I know last call I think..

No again these things are like kind of far. I mean that there is really no contango storage trade in terms of products. There is no a whole bunch of the supply of the ships that completely choked up because they can't discharge, et cetera, et cetera from time-to-time the product market is so dispersed. And if you see that math that James put up.

You can have areas that simply because of bad weather you can have four, five days of delay as Panama Canal choked down with delays, great delay, you have the Mediterranean same so pretty well guarantee in the product market but on any given day there is one area where loading and discharging beautifully without delays and another area of the world that’s in a mess..

Got you. Understand. That’s helpful. Well, thank you for the time and the insight..

And we’ll go to our next question from Spiro Dounis with UBS..

Hey good morning again and thanks for taking the time. Just wanted to call it real quick on the decision to start vessels and more sort around capital allocation going forward.

So you’ve obviously been buying back shares and in the past you've also bought back some debt and you’re obviously paying a dividend and it sounds like placing newbuild orders is not off the table, but certainly not on the forefront of your mind at this point.

So just wondering with the cash flow that comes in maybe how we should expect that to be allocated?.

I think you need to expect within the constraint that we intend to play or not play, but we intend for other reasons mentioned to ensure that we have a consistently strong balance sheet that can provide sustainable dividend policies, sustainable earnings et cetera et cetera and continue to benefit from refinancing as book of lower position that’s about it, and we really don’t - there is no value creating position or tool for the company to discuss that in public..

No that's fair I understand that.

So maybe more broadly then just around dividend certainly right now not a lot of companies are receiving credit for it, but you guys are pretty diligent in terms of doing buyback instead just wondering maybe sort of conditions you need to seek broadly to maybe say, okay maybe it's time for another dividend increase?.

Well I think that first of all we have to look at - let's look at through all the things that we’ve done. So only a couple of years ago that it was fashionable for people to suggest that sting [ph] does in MLP well that thank god we didn’t go to.

Then it’s the full payout dividend or the semi-payout dividends I mean call us old fashion but we did think that they - only special dividend is the dividend that some can rely on every quarter I think that it’s quite clear that the company has surplus capital to the dividend it’s paying right now.

But at the same time, the dividend that we’re paying right now at 8%, 9% it's huge in terms of a traditional dividend bearing in mind, the EBITDA coverage you have on that the leverages of the company and the fact of the company is only, it's got fleet day sort of one-year-old..

Yeah that makes sense. That’s it from me. Thanks guys..

All things come overtime, so….

And we’ll go now to Robert Lever [ph] with Citi..

Hi. You’ve spoken a number of times on your balance sheet and decisions on capital, I was wondering if you’re speaking about your secured debt versus your unsecured debt would you at all entertain the idea of doing more on secured debts and maybe pay down some of the secured….

That’s again it’s a very polite and nice way you’re getting to allocation of capital..

Fair enough. All right, I have done all my questions here..

Thank you..

Okay, I’d like to thank everyone for joining us today and we look forward to speaking with everyone soon. Thank you very much. Have a good day..

That concludes today’s conference. We appreciate your participation..