Stolt-Nielsen Limited

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0:09 Okay. Good afternoon, good morning.

Thank you very much for joining us on this video conference presentation for our fourth quarter results for Stolt-Nielsen, which was streaming live from London. My name is Niels Stolt-Nielsen, I'm the CEO of Stolt-Nielsen and I'm here to get with Jens Grüner-Hegge our CFO.

And to get me from Rotterdam is our President of Stolt Tankers, Lucas Vos. 0:37 Again, thank you for joining this quarterly call.

I'd like to remind you that you can post questions at any time during the presentation by typing them into the question-and-answer window, which should appear on the right side of your screen. And this video conference will be recorded.

All questions will be answered at the end of the presentation. 0:59 So with that, let's move on to our agenda.

As always, I will take you through the highlights of Stolt-Nielsen. Lucas will go through Stolt Tankers, and then I'll go through Terminals, Containers and Sea Farm and also gas and then the Jens will take you through the financials and then we will move to the read of the questions and try to answer them.

1:27 If we then move to the fourth slide, the highlights for the quarter positive mostly in the green, the operating revenue up to $593, that's up from $580.9. mostly driven by the fantastic earnings that we've seen coming out of STC.

Operating profit was down from $79 down to $77, primarily driven by the $10 million impairment that we took, or it was driven by the impairment that we took in the terminals, our terminal Newcastle. Free cash flow is down from $106.4, down to $66.2.

Because of increased working capital, and increase receivables, which is kind of underlying positive because we're doing more business in STC. 2:21 EBITDA, up $162.9, that's up from $147.8.

Again, primarily driven by tankers. Net profit came in for the quarter $35 million, that's up from $33.5 in the previous quarter and our debt level is continues to reduce, but this ratio net debt-to-EBITDA is at $4.29 and that is the combination of increasing EBITDA and the steady decline in our debt level.

And at the end of the quarter, we also have $434 million available of liquidity, which will take you through nature. 3:08 Then, taking you through just quickly the net profit analysis from the third quarter of ‘21 to the fourth quarter of ‘21.

We saw slightly lower operating profit from Stolt Tankers, it's not a big – a lot of big movements here. The market remains the same, Lucas will talk about that later, but it was driven by slightly lower volume and slightly lower freight rates.

And Stolthaven Terminals, the operating profit was done by $1.4 lower throughputs; however, we had higher utilization so lower throughput lower results in lower wharfage, which then resulted in a slightly lower $1.4 million operating profits. 3:52 STC talked about that level later, but we actually had lower shipments in the fourth quarter than the previous quarter, but we had the higher margins and higher demerge.

So See Farm lower operating profit that is lower volume and the lower positive fair value adjusted for the quarter. So still profitable, but lower volumes because of seasonality.

I remind you our quarter ends at the end of November, Christmas sales is in December. So we had lower volume, but also a lower positive fair value adjustment for the quarter.

4:25 Stolt-Nielsen Gas improved operating profit, primarily driven by sale of land that we have had in Canada. But also more of the ships are coming online or being delivered in generating earnings.

We had the lower accrual for profit sharing because I think we're over recruited in the third quarter. So a lower accrual for profit sharing in the fourth quarter by 2.2.

So lower corporate costs, and then we have the $10 million impairment in Stolthaven Terminal. Losses on FX and other operators of $1 million and also lower income tax for the quarter of $3 million compared to previous quarter bring our annual result to at 30 – the quarterly result $35 million net profit and then the next slide, move it over to Lucas and then.

5:28 Yes. Thank you, Niels.

When we look at Stolt Tankers in isolation, I think the quarter has been slightly disappointing, primarily driven by the fact that we had lower contract volumes and a Weak Spot Market. Lower call volumes very much driven by a strong US Economy.

But I'll come back to that on later and which Weak Spot Market is still a reflection of a lot of the MR segment is in the chemical trade. So overall, lower results or utilization, therefore is also down with 3.4%.

I would also have to say it's, we have also increased our fleet, if you look year-on-year, to be well positioned for the upturn that we that we expect to happen in 2022. So, we're well positioned.

But utilization for this quarter was down. If you look at the operating days, slightly down to around $7000.

For your information for comparison, this time, the last year, it was around $6000. So we've added net a lot of operating data, we were prepared for the upcycle.

6:40 Lower Net Sale Bunker Cost, because we have – we're benefiting from the surcharge revenue in that prospect, so that is – that's good. And then there are a lot of one-offs in this – in this slide deck.

On this slide. I mean, we have the capital distribution of the Norsk.

Krigsforsikring, which is the insurance premium paid throughout 2010 through 2019, of which that has now been redistributed to the equity holders and $12 million (ph) is our share. So that comes positively, but counts negatively is that we have decided to dispose of the Stolt Groenland and have an agreement with our insurer on that issue.

But it means that we are taking a loss of $13 million (ph) into this into these quarter numbers. And these numbers are also the cell of the disproves two of our ships, which again, cloud sort of the it's a one off, but it does count the overall numbers.

7:48 I think the last point to mention on this is of course we've had a lot of impact from COVID, again on in 2021 and specifically also in this quarter. If you look for the year, we carry around $7 million with COVID related costs, which hopefully, in 2022, we won't have to carry anymore.

8:07 To go to the next slide on the bunker site, you can see that we are dealing with very high on bunker prices, again written from $496 in the third quarter to $530. In the fourth quarter; however, you see that our net bunker costs have overall gone down slightly.

That is because we get a lot of feedback from our customers. But it's also a reflection of that we consume a lot less we have this internal restructuring program where we can show the year-on-year we have a 10% reduction of our bunker consumption, which is good, but doesn't necessarily come back in these numbers because of the high bunker price.

8:51 If we look at our stair index, you can see that – that's still on a downward trend, although we have seen a little uptick in December and January. But it's still very much a reflection that the overall rate levels is very much impacted by the MR, our market in our – in our market.

So our overall share has been around $18,400, which is maybe not where we want to be. But you can also see that our average debt rate is going down.

It's because some of those bigger vessels are going out and you see a reflection of the fact that we have the in our fleet from Tufton, which we took you through, I think it was during the last call, and it takes her every time, done. 9:40 If you look at the current markets that would be on the next slides.

As I mentioned, already, there is a – there will be the next slide sir. Yes, thank you.

There is, of course, a strong US Economy, which means that a lot of the chemical production is used internally instead of being exported. So the US exports, they have been rather low, we see it coming back right now and particularly imports from Europe, from India and South America, so that's a good sign.

To return markets from Asia are very strong to Europe, and US and Europe has become overall chemical importer. And we see that coming back in these numbers.

10:32 The big unknown still is clearly the oil demand, which is dampened by the resurgence of the Omicron variant. But as it is less serious, we hope it's going to go away.

But it does mean that still of – a lot of MR Ships are into our market. If I look at the regional services, I'm very happy with what is happening right now in the markets, our Intra-European setup together with Essberger.

And the joint venture EMS tanker is performing quite well, we have around $2 million of synergies savings between the two companies, which is higher than we expected. And it's also a sign that further consolidation in that market would be a good thing.

11:18 If I look at the right product that we have the Inland Tanker Service, very strong, clean products demand and that is also a good indication that our own market is going well, Asia Pacific congestion, particularly in China and made higher spot rates which we benefited from. So also there, we are quite happy.

So we may not have seen the desired improvement on the Deepsea side, but we definitely you saw them already in the regional markets. 11:51 Looking forward, that would be the next slide.

I feel we're very well positioned to capitalize on the underlying market drivers, they are very positive. If we look at the chemical trade, it's developing positive around 6% growth.

It's driven by the recovery from COVID. But there's also new industrial capacity coming on stream.

There is a change in the flows, particularly with China becoming more independent, but overall underlying growth very good. 12:26 The supply side and maybe even better.

The picture is already in our favorite for quite a long time, I think what is it markable difference right now is that the order book is sort of closed if you want for 2024 and 2025, the yards are full. And they're not full with chemical tankers necessarily, but with other ships.

So the supply side will remain in our favor for quite a long time and the last one shows you that the market that we really depend on the oil side shows that the inventories are at record low these days. So we also expect that product to move again, it of course will depend on an increase of the output, which for the time being is sort of not coming along.

So we see the grant right now above the $90 and it hasn't been there for over seven years. So that's quite something.

13:21 The other issue clearly that we're monitoring closely is the geopolitical situation around to Ukraine, which might have a negative impact again on the oil production, overall, still very confident about the markets as it is right now. And with our increased fleet you will also see that going forward, we will have a lower contract ratio, but it's also driven by the fact that we want to be more exposed to the stock market to benefit from the upcycle when it will take place.

13:54 Last but not least, let me say something around our sustainability efforts. There we are quite on track.

We are 29% more efficient right now than we were in 2008. The target is to be 50% more efficient when we come to 2030.

So we have a 21% or more to go. We have plans in hand to achieve the majority of that but for the other Part clearly we depend on the new breakthrough, R&D basically on future propulsion.

That's not necessarily where my concern lies, my concern lies more – lies more on the supply change or if we have the future fuel, will it also be available in the outer ports that we tend to get to? And will we come to a fair distribution of the additional costs that will lead – that this will lead to in our industry?

14:50 Overall, very happy with the progress that we've made. And we were showing that Stolt-Nielsen is leading also when it comes to sustainability.

That's what I had news back to you. Thank you.

15:02 Thank you, Mr. Lucas, then going over Stolthaven Terminal.

Again, this is an operating profit variance between this third quarter and the fourth quarter. Okay, you can see the big impact here is of course, impairment with it, lower revenue of $0.8, I'm sorry, $800,000.

That is our utilization went up, but it was offset by lower throughput, low wharfage. primarily driven by terminals in, in Australia, in Singapore, and some in Lingang (ph) in China.

Not the dramatic changes, but a slight slowdown in the last quarter on throughput there. The other ones are stable, actually, some of them increased.

15:57 Slightly better operating expenses, then we have the impairment in Australia, the Australian investment has become, didn't develop as we expected. We really bought this, the company down there to develop the new castle.

The thinking – the strategy was, of course, that the Australia is closing down more and more refineries, there's going to be need for a bigger, bigger import of these refined products. Newcastle is very well located in regard to the mining industry and also Sydney, closer to the market than the other terminals or the other ports.

But that hasn't developed according to come. We're still working on it, but we found it prudent to take in a $10 million impairment on that investment.

16:46 Slightly lower depreciation from previous quarter equity income slightly lower and slightly higher. A&G bring you back the operating profit for the quarter of $8.4.

But I think you will just go back next quarter back to normal performance from the terminal division. 17:05 The markets remains healthy in the US Gulf, high utilization throughput in both in New Orleans and in Houston.

Our throughput reduction, I didn't mention that earlier. But the throughput reduction also came from the softness of the Chemical and Petroleum market in Brazil, which then lower utilization and throughput in samples.

The utilization of the European terminals are stable. As demand for chemicals remain steady.

Asia terminals have been impacted by the slowdown of the chemical market in China. And that is partly due to the chain constraints and restrictions on energy use that we will read about.

17:46 Mergers and acquisition activity remains high with numbers of international transactions, the latest that we read about what's in the mid-teens as a multiple EBITDA and there's a strong demand for chemical storage investments. Moving them over to Stolt Tank Containers, clearly the star of the show.

The operating profit for the third quarter was $24.7 when higher transportation revenue was up by $10.3 driven by an 18.4% increase in transportation rates and rising ocean costs partially offset by the decrease in shipment of 8.7%. 18:32 The demand remains and then we had higher demerged and other revenues of $6.8 compared to the previous quarter, offset by higher more related expenses.

Lower we had low repositioning, and slightly higher operating expenses and A&G are 3.1. Bringing the quarterly results fourth quarter to $36.4.

The demand remains strong and we expect both the demand to remain strong in the foreseeable future. It's very much driven of course, but we're seeing in the container line industry and we really don't see this market going to change for the next couple of years.

And if you look at the shipment development per quarter shipment development, annualized as the yellow on the top right side. We're up at $140,000 shipments for the 2021.

And you can also see the under the historical development of the revenue per shipment and transportation costs per shipment, the yellow being the transportation cost per shipment and the blue being revenue per shipment. So we have nicely been able to get the revenue per shipment up and the transportation cost per shipment has not gone up as fast as the revenue and of course impacts as you see the results from the Stolt Tankers.

20:07 So quite bullish for this, the segment, very pleased with how we were able to secure space on the container lines. Team did a tremendous job in securing space that was really the key is, with it with a huge demand in, on the container lines, for us being able to assess as a logistics service provider to go to our customers, okay, we can move your product, the discussion really didn't go on, what's the cost of moving this product?

Can you secure space and we had – we had space, so that really well done and I think we will continue to see good earnings coming out of it. 20:50 The merge, of course, has also increased.

That I think may also continue, I think the customers are now a bit worried they'd like to have a little bit of inventory because of the uncertainty on the logistical side on the logistics chain. So we're seeing quite significant demerged income coming into our customers using our tanker for longer time.

And of course, that is done reflected in the highest emerge for us, the merged income from us. 21:29 Moving to Stolt Sea Farm.

So, the third – the fourth quarter, as you know, our fourth quarter ends just before the Christmas sale. So, it is traditionally a slower month.

So, we had lower corporate sales, because we reduce our harvest and also lower sole sales in preparation for the Christmas sale. So, you sell lower volumes of target unsold, we had lower operating expense as a result of lower volume being harvested.

A&G approximately the same and on the other lower positive fair value adjustment of 3.3 for the quarter. So, operating profit went from $12.8 and down to $11.3.

So, nothing has changed in the market. 22:20 The demand for the product is seasonal, but the prices are –have been holding up.

We talked about this earlier, the growth plan that we have for Stolt Sea Farm. So, we have, well-established Turbot organization, they continue to lead with the largest producer of Turbot, we have the utilize the proven flow through technology, relatively steady versus very favorable market conditions for that, sole role out we have spent 20 years in developing or $75 million years and developing the sole technology land based research places for sole technology.

And as we have said already, we have two purpose built land based research farms which are now really starting to show significant improvement in the EBIT cost per kilo. We were able to achieve a 31% reduction in 2021 and we expect to achieve a total of 43% reduction by 2022.

Our target is to get to 50%, so we're seeing that the sign is working very well where we are able to increase the growth is phenomenal and we're managing the farm so that it all farms you manage risk you manage the season and we have, it's really working out well. And of course once those modules prove themselves as they're now doing.

We will then start to add additional module next to the existing farm but that was look at expanding in the future. So we have quite an ambitious growth plan for sole for the next 15 or 2035 plan we called, so the total volume ambition of 11,400 tons.

And we have, steps and we were making investments today for the juvenile production broodstock less than Stolt to meet this plan going forward. So, this is these are not only words, these are actions being taken to prepare us for or being in a position to develop this growth.

24:46 Moving to Stolt-Nielsen gas, as you know, we have two investments in LNG, one is good art and the other one is to develop an Avenir. We have done – as you know, we contracted six ships and one LN – and we built one LNG terminal.

The final vessel of the six is scheduled to be delivered in the second quarter – second quarter of 2022, sorry, fully funded investment program we have three ships on and we are building up the volume in our study near term terminal. So three ships on time charter, one is to shell, shell just lift in subjects just before Christmas, I think are just in the new year.

And we have currently two ships, two new Ford, one ship to new FORTRESS and one Petronas then we have two ships that have been delivered the $270,000, one will be in the med serving the market and then the other one will be in the NorthWest Europe, serving the bunkering in Baltic. 26:03 We are of course trying to develop the Stolthaven Terminal is up and running.

We are selling LNG, but of course with the LNG prices as where they are today. It makes the job more difficult to get the long-term prospects are still there.

Customers are still interested but you're making the conversion from diesel or heavy fuel or LNG when the LMP prices are where they are is it's a bit of a challenge, but the long-term trends has passed and change. The outlook for this market hasn't changed.

26:41 We also took care what we as I said we ordered six ships for 7.5 and to 20,000. We sold one of the 20,000, a bit opportunistic it also gives us access to the bunkering market in cooperation with the buyers, we will develop the bunkering market in China, but we sold one of these ships with a significant gain.

So the company is well funded to develop the strategy stated. That completes my part for the time being and then I'll give the computer to Jens to go through the financials.

27:22 Thank you. Thank you very much.

I just want to remind you, all of a few things were our fiscal year as Neil's mentioned, runs from December 1 through November 30. Also, we have today posted with the stock exchange, the press release with the earnings, the interim financials and also on our website www.stolt-nielsen.com.

We are posted both the press release, the interims as well as this presentation so you can find them there. In addition, we have today also posted a video that looks at 2021 in review, and talks also a little bit about the future.

So I encourage you all to go and have a look at that. 28:16 Niels and Lucas are covered, really the first bit of the fourth quarter financials in great detail.

So I will spend a little bit more time on the annual financials and if you look at the top line, you'll see their revenue has gone up quite substantially since fiscal year ’20, by over $200 million. This is driven predominantly by STC with the success here that they have had, having improved their revenue by $142 million.

This is of course different as Niels mentioned by this tightening of the liner markets and higher trucking costs, which are often passed through to the customers. 29:00 Shipments were up 8.4% over the year also supporting that revenue line.

Tankers had 2000 more operating days in 2020, following the acquisition of the CTG ships, and that helped to increase their annual revenue by just over $50 million and Stolt Sea Farm had a tremendous turnaround from 2020 and saw an increase of $30 million driven by a 6.5% growth in target volume and 82% growth in sole volume following the new forms coming online. 29:33 Moving down, you will see that we have impairment of assets, this year of 10 million as Neil's mentioned, that's the .

Impairment. Last year, we had the $12.4 million where we impaired goodwill, also in Australia and Asia.

Further down, you have the administrative and general expenses, which are quite substantially up from last year, about $32 to $33 million. And as it will recall, during 2020, the company was preserving cash and because expenses were delayed, we had a hiring freeze, travel was scaled back significantly.

Whereas this year, we've seen a catch up and a lot of those expenses. But also, with the improved results of the company this year, there's an increase in the profit sharing.

And in the long-term incentive plan. That has also been increasing the A&G cost.

There's some increase in professional fees due to initiatives that we've been working on during 2021. And also related to the niche at the beginning of the year, their IPO efforts that we did Stolt Sea Farm.

And finally, there's about $5.5 billion impact from FX, increasing our cost. 30:49 Further down, you see net interest expense flat quarter-on-quarter, but actually, but $11 million down year-on-year.

And this reflects predominantly the reduction in debt, but also the lower interest rates that we have seen. Although you will see later they are starting now to turn around a little bit.

Also worth mentioning is the income tax impact, which hasn't changed last quarter-on-quarter. But the income tax expenses up from $8.3 to $24.4 million from last year.

And this is driven by Stolt Sea farms, fantastic turnaround during the year. It is also driven by provisions that were taken at STC.

And then there also has been a tax rate increased in the UK as well as Netherland, which has impacted our tax expense. 31:45 So for the year, that brings us down to $78.8 million up from and looking at continuing operations only up from $39.2 and as you will see, there's $13.8 million loss from discontinued operations in 2020.

That was related to the sale of the caviar business back in 2020. 32:11 Now there's a lot of one-offs.

So I just want to give you a feel for what is the underlying performance trend of the company. By taking out the one-offs, you see the bottom line here shows the net profit line as reported both for fiscal year 2021, as well as the last two quarters and the same quarter in 2020.

In between you have the one-offs. With the positive DNK capital distribution being offset by the Australian Parliament and the loss on the ground alone.

But then we did have a positive gain on sale of assets. So taking those away, you would have – we would have had a higher net profit of $38.7 million this quarter.

That compares with similarly adjusted that profit probably quarter at 30.6 minutes. So there's a good improvement that we've seen in the run rate of the net profits quarter-on-quarter and also from last year, same quarter last year.

33:18 For an annual basis. Last year, most of the one-offs were negatively impacting net profits.

So taking them out, we would have ended up $51.3. But still, we're at $79.2 million, so quite a substantial increase this year and this really excludes any improvement in the biggest business which is tankers, which has held steady.

So a good underlying performance in our businesses. 33:48 Moving over to capital expenditures, you'll see overall year-on-year is at around $190 million.

We're expecting ‘22 to be pretty much on at the same level. Last year when we were cutting expenses and preserving cash.

We ended up at around $140 million. So we did see some catch up this year which will carry on into next year.

34:15 For sole tankers specifically, in the first quarter we acquired to CTG ships and that's the bulk of the $100 million spent in 2021 with the rest really being related to Ballast Water Treatment Systems, drydocking is not included here and that typical run rate is about $18 million to $20 million for drydocking annually. Stolthaven Terminals is mostly M&R, and in 2022, you will also see more catchup on M&R as well as a jetty construction at our Dagenham terminal, which will spill over into 2023.

For tank containers this year was mostly depo work that we were doing. And next year, we will see delivery of about 1000 new tank containers coming to the fleet as well as further depth of work.

35:09 The $21 million for Stolt Nielsen gas was the last part of our committed equity contribution into Avenir gas. And that sort of concludes the capitalization of our new gas at this phase.

And then finally, in corporate and other this really relates to our systems and our ongoing digitalization of the businesses. And we'll see that increase next year.

35:38 Then moving over to cash flow. Looking at your cash flow generated by the operating activities, Neil's already mentioned that the reduction in that cash flow was driven by increased working capital and we did see our receivables go up during the fourth quarter and again, emphasizing what Neil said that is really positive and that was increased activities.

And were naturally receivables have been building up. I do expect that this will show a bit of a reversal in the next quarter as we start collecting on those receivables as we collect on the ground non-insurance settlement and as we collect on the DNK capital distribution.

36:23 Moving down, you will see that we have capital expenditures of $28.5 million during the quarter, and for the year we spent $190 million. This actually excludes that joint venture, equity injections, but does include the drydocking.

So we're doing what we can to confuse you here. But it's on the line under you have our actual cash investments, net of intra-joint ventures net of dividends that we had received from the joint ventures, for the year and for the quarter.

So that gave us a problem investment activities, you see, it hasn't been a lot of cash going out in the last quarters, but for the year, we were at $180 million. 37:15 Then on the financing side, we have been busy reducing our debt levels.

So not much new financing that has been taken on. Instead, we have paid down quite a bit and you will see that when I come back to the balance sheet a little bit later.

That we have a good reduction in our debt levels year-on-year, a little bit less when you look at on quarter from quarter. And that means we ended the year with cash and cash equivalents of $124 million.

If you then look at the graph to the bottom right, you will see that we also in addition had about $310 million available liquidity under our various credit lines. So for total liquidity of $434 million at the end of the fourth quarter.

38:11 Looking at balance sheet in a graph format, if you look at the top left graph, you will see our debt to tangible network. This is actually one of our bank covenants.

And in our financing covenants, it should be below 2.25 to one and on the top, you will see we ended the quarter at 1.44 to one so there's been a good improvement there since it peaked in the second quarter. That's after we had bought the CTG ships and taken on debt to acquire them and since then we've made good progress on reducing our gross debt.

38:59 And the tangible network has remained mostly stable. But I should add that we have course paid dividends out and there's been some adjustments to other comprehensive income, which has impacted the tangible net worth.

So for all the annual basis, we see that during this year, from the end of 2020, we were at $2.5, we were at $2.5 billion in debt, we saw a peak at the end of the second quarter $2.6 billion, and we ended the year at $2.4 billion, so with a good reduction. 39:37 Then if we can jump to the bottom right quadrant here, we have a picture of our EBITDA development, starting with the fourth quarter of 2019 and you can see here there's been a positive trend line, you will note that for the last four quarters, we ended up with $538 million in EBITDA, so just over $0.5 billion dollars in EBITDA.

You will also see that there is a clear seasonality, where the first quarter every year tends to be the lowest EBITDA. So I would expect that we might see some reduction as we go into the first quarter due to seasonality.

But we are on a good positive trend due to the improvement in STC and Stolt Sea Farm and hopefully not too distant future loss in tankers. 40:32 Then that improvement in EBITDA if you go to the top right quadrant drives, and the bottom left quadrant that dries up to EBITDA driven covenants.

EBITDA to interest expense improved to $4.24. So that's quite a significant improvement much due to the EBITDA improvement.

And then the next step to EBITDA which isn't a corner, but is a measure of our leverage relative to cash flow generation had a significant reduction down to $4.29 from $4.7. So that's done helped us improve the strength of the balance sheet.

41:12 Moving to our debt maturity profile, you will see that on this the boxes are upcoming bond maturities. And the one we're focusing on now is that $175 million bond maturity in the third quarter in September of 2020.

These are actually the fourth quarter. This – the financings that we're working on at the moment to deal with these maturities is one we're working on a sustainability linked loan facility a revolving credit line, and combined with a term loan, which will replace our existing revolver – revolving credit line.

It's nice to see that on our ESG measurements, so that we can actually make this sustainability late and also in addition to that, we are working on refinancing our Japanese operating leases that are secured by tank containers, that's the $77 million but you see in the second quarter and $61 million in the fourth quarter. 42:24 Our expectation is that between those two efforts, we will cover the refinancing needs, for group at least as far as 2022 goals.

We expect to have these done by the end of February, pretty much and drawn the latest stage one needed. But that should take here of our refinancing needs.

It allows us the benefits of watching the bond market and go in and doing refinancing and the bond market that would be needed. 42:59 The graph at the bottom right has our average interest expense as well as our average cost of debt.

It has been on the declining trend. We are seeing interest rates going up.

Currently, we are about 84% fixed with the maturing of the bond in September we will see that fixed percentage dropped, but we are watching this and making sure that we minimized any impact from rising interest rates on the income statement. 43:33 And with that, I would like to pass it on back to Niels.

43:38 Thank you Jens. I just have one slide talking about the chemical tanker market.

The headlines or just when will the chemical tanker market provide a sustainable return? This market has been given a sustainable return in last twenty years for us it's been 5% in the last 20 years.

Return on capital volume, the last 10 years it has been 3%, it is not sustainable. Now on the demand side, something wrong with the demand side.

The demand is driven by the global GDP and global GDP, the global trade we know is global GDP so the demand side is not to the issue. It's the present steady actually, consistent in growth.

But there's kind of fundamentally challenges in the chemical tanker market. We see that when we have strong market, we beat our addresses and are very happy where you reach $30,000 dollars a day, $30,000 dollars a day on the shipment that called $70 million dollars is nothing to kind of, but because we've been beaten down for such a long time historically that's what we've been able to achieve and those cycles don't last that long and then we ordered too many ships and then we're going into down period again.

Now, I have to say that through these contracts down period is not as dramatic as in other segments. So if you look at the dry bulk or the LNG or the MR so are most container ship.

You see that these when the market collapses there they go down to $2000 dollars a day, we don't go down to $2000, we think notes we went down to from $17,000 dollars a day. 45:24 So, okay, there's a good set, it's more steady.

The downside is not but the upside is not high enough. And then we know that okay, we know that the market is going to come in the next couple of years – it’s going to come and the order book is low.

So that's good. So maybe next time around, it will be maybe three years because that's the time it would take to date over new ships and the order books very now.

So I think we will have a relatively good market in the next few years, but then we know that when the market strengthens, guess what we will continue to order new ships and then will go into a new cycle again. 46:06 And then we have the the MR that is really affecting our market.

And that's really was holding the market down more is because there's no jet fuel or the market low. They come in and I think it was in 2021, there was a record amount of chemicals being moved in these MR Tanker.

I think about 70% of what we carry, . But the MR tank market is impacting our market.

So that's another thought. And you have the emissions but that's the ESG and the emissions that's a good drive and that's everybody to say all industries are faced with that.

46:50 The challenge that we have in our segment, okay. So on the revenue side, it's the market that the decides.

But on the cost side, it's within our control and I don't think the MR market will come in and out in our segments. But the only way for us to be able to make is sustainable, this is sustainable is to use scale.

There's too many small operators out there. You can see it on top right hand side, there are number of operators that this is bought I think about 17,000 stainless deal and coated book to compete in our market.

So it's highly fragmented. 47:38 And the bottom of side, I think we got it from somewhere, how contained and how its consolidated.

And so the only way can I think that we can create a sustainable business area, knowing that the MR market will come in and out and knowing that there will be shifting order is to become a more sufficient. Industry, we need to create better skills and I believe to improve our flexibility the service to our customers and efficiency will give us a high return.

48:16 So the purpose of our IPO, our balances as you see is strong. We haven’t ordered ships for a while.

Our debt level is rapidly coming down. But we need to further consolidate at this industry, we need to build this economy scale so that we can have a lower cost, more efficiency, and I will provide better flexibility and service to our customers.

But living in an industry, an operating industry, and just sitting waiting for the market to improve, it's not the solution because we know that the market improve, we know them that others will, will continue speculate it in order too many ships. So we need to become, this is what tankers are doing, really working on digitization things started within our control.

But the purpose of the IPO is to make Stolt Tankers a standalone, clean chemical tagging company, and then we will use both shares and cash to see if there are acquisition or consolidation opportunities. I'm more and more convinced if I look at what is happening in the conveyor lines, that this is the way forward to create economies of scale.

49:44 What are we doing about it? Well, we are, we are trying in every direction to see if there are consolidation opportunities and, our balance sheet has come down, we made a conscious decision not to order ships in the fall and as being an industrial shipping company, we always have to order ships when we said no, we're not gonna order any more ships not for the time being we have, we bought , we bought CTD ships, we had our own new buildings, and we have actually expanded the grown our fleet, but now the market, needs to prove itself and then, you know, build up a reserves so that we can pursue these opportunities.

50:22 I hope the industry is listening. Okay.

Then move to the next slide, page 31. Again, key messages takeaways.

The highest operating profit since 2015 and if I'm not wrong, the EBITDA past $500 million for the first time. And that's without fair value adjustment without one-offs it passed.

So that's an achievement, fantastic performance by STC, Sea Farm and steady performance assaultive and even though we had to do the impairment. The chemical tanker market remained soft.

But the fundamentals were well positioned for the market recovery. 51:21 Yes, we continue to focus on cash flow generation to reduce our debt, as you see and showed you that our debt levels coming down or capital commitments are unlimited going forward.

And we will continue to provide a return to our shareholders. Over the last 20 years, we have given $1.1 billion to our shareholders.

So our share price haven't been too sexy, but our dividend at least, we have given something a steady return of cash to our shareholders. Improving balance sheet things and, with that – with the improved balance sheet, it gives us investment opportunities in all of our businesses.

So I'm, I'm overall quite optimistic for stagnation in all of our businesses, it's just a matter of time. And this result was without contribution or significant contribution, personal tankers.

I'm convinced that tankers are also start firing on all cylinders, that's cylinder and if we can fire all at the same time, I think that we could get some good years. And if that's.

52:32 That completes our presentation, how am I going to see the questions? So I got escaped, I think we escaped.

Why don't you bring it up?

52:57 I could meantime, take some Stolt tankers questions which I have in front of me in news.

53:02 Yeah, please. Good idea.

53:03 Yeah. So the Stolt tankers questions are primarily around our coverage.

And some some questions around the numbers, where traditionally, we have always been around the 70% contracts are covered in 2021, it has gone to around 66% and there has been some conscious walking away of contracts in that respect and we think in 2022, we all really be around the 60% number so definitely become more exposed to the stock market and therefore benefiting hopefully from that, that increase. 53:47 It's always a balancing act, some trade lanes, you will never get to a lower contract ratio because it's just a contract of a trade.

But we feel quite confident that with this type of level that we that we gain from the momentum that is going to take place. 54:07 There was one other question around the contract increases.

What we've seen in 2021, was around a 5% increase, and we see similar numbers coming through for 2022 with one notable distinction, and that is that we also shortening our contract periods for normally we gave option years away and now we're not doing that, again to make sure that we are able to benefit from increases in the coming years. I think that was basically the questions around tankers.

There were three or four questions, which I think sort of captured in one go, you think?

54:51 Thank you.

54:53 So I have one question is terminal, generally low return on equity industry, it seems like it, it is a quite a capital intensive industry. So there's a huge investment and it takes a long time to then build up so you have a huge upfront investment.

And it takes a long time to generate and build up the cash flow. But the return on the terminal industry should be, I think, in the in the double digit of the long run.

55:23 Then you have what percentage of time okay, Lucas, you talked about the tankers in this topic? Are there expansion plans for Avenir gas in case how, so Avenir we, we ordered six ships, we sold one of them, three of them are on charter, two of them are going to be in the stock market or be servicing our own supply contracts that we have secured, the expansion plan will most likely be in the form of building additional supply points to building terminals.

And then going forward. So we're looking at various projects, we have no intention at this time to order any more ships.

But we are looking at additional terminal in the same kind of formula same kind of same way as we've done in selenium.

56:15 Then I have on this asking on the time containers, I was wondering what kind of cost increase you've seen in terms of shipping and whether you have entered into contracts with carrying the rates for a period. Comments are on this will be appreciated.

So the cost over both in 2020 and 2021, I can come back to you and again, exactly what the container lines have and the trucking, but we're talking about doubling and tripling in some cases. But I remind you that is then passed on to, to the customer based on but with Allied because we have commitments towards our customers.

But those rates aren't on the quarter basis reviewed with our customer. So that's why it's a lag both on the way up and but also on the way down.

57:10 We have secured space, but not rates. We – that's what we did very well in 2021 Securing space.

And that's an ongoing challenge in these extremely competitive times. That the key here is done to secure enough space.

For the demerged revenues of chocolate in containers. Is this driven by customers using containers for storage or pure logistical delays, both but I think it's usually an indicator that with the delays, the unpredictable, delays that we see both on the ships on the caused by, then waiting three to four weeks to discharge or node and then also delays because of limited trucking availability.

The customers have built up or needs to build up the kind of a buffer so that their production doesn't end. So that's why I see, I think it takes a while for them or they use the containers as to storage.

58:21 Are you seeing any problems in relocating containers? And is this likely to drive cost?

58:29 Yeah, so we do re-empty, the empty repositioning. So, you know, it's an equal challenge in the security space for empty containers as they stood for, but we have seen basically during the last year, such a huge demand in each market.

So we try to, we always try to reduce the empty repositionings. But yes, it is a challenge to secure space even though they're empty.

59:07 Our high rates for containership bins lead to volumes going back to tankers. We have seen a several cases where our contained customers have, we have solved their problem by shipping it In our ships, this is something that we worked in on, providing our customers this flexibility, providing our customers this flexibility that we sold their logistical challenges.

But I received a big trend. No, we haven't.

We have seen a lot of inquiries. But you have to remember, if they want to switch back to the ships, they also need to secure storage and storage is limited availability and spot market.

So it's a kind of a long term decision for the customers to switch from containers to back to back to ships.

59:54 Okay, then we go to.

59:56 Can you please comment on your plans for refinancing beyond the $415 million loan agreement?

60:07 So, the $415 loan agreement covers refinancing of the liquidity tool, the revolving credit line, as well as the term loan that we have with China Exim that is secured by the five ships that were built in China. So we will combine those two creating that $415 million facility, then we have about $138 million into Japanese operating leases, maturing as mentioned earlier, and we're looking to put in place a new facility on top of those, which is now almost agreed on all main terms.

And that will be probably around $220 million, $225 million refinancing. So between those two, there is no immediate need, keeping in mind that it is expensive to sit with cash on the balance sheet.

What we do want to look at down the road, particularly since this $415 million facility is sustainability linked is also to in the future be able to issue sustainability linked bonds, once that's received that the next refinancing in the bond market is likely to happen. But I would expect that that wouldn't happen until much later in the year if at all this year.

61:38 And this just decarbonisation target install package, should we expect a refinancing of the US dollar $175 million during September to take the form of a sustainable income? I think you answered.

61:53 Congratulations on the results. Do you see contingent shipment picking up in the near term?

Or is it dependent upon overall congestion level? Furthermore, how do you see modular postal tanker that is developing near term.

So the first quarter is always a slow quarter, we have Christmas and you also have Chinese New Year. So there is a slowdown.

But as you saw even though the shipments were done, the merge levels were up. So we were able to maintain the margin.

And also the results due to the – to the – due to the merge. We are seeing a bit of a pickup already now.

So again, I expect that the first quarter and that this market to continue. How do you see margin for Stolt Tankers and developing in their near term?

62:43 I think that at this level, we should be pretty happy. Of course, we continue to see if we can do more shipments.

So holding back, it's not really the margin, but it's more being able to secure enough more space on the container ship. So that's the, that's the challenge.

63:04 For question for me, if I'm a tank is how looking for 2020 compared to 2021? I think you already answered that.

Well, what's the outcome of the renegotiation towards the year and 2021? Lucas?

63:21 Yeah, I also answered that one already. So that was negotiation going sort of 5%, up in 2021.

And we're looking at similar numbers for 2022. I did not answer the follow up, which was regarding to the EU carbon emission tax from 2023.

And are we able to put that into our contract. So right now, I did mention last time that it has quite a considerable impact on our costs or levels.

And we see the price for carbon only going up. So where we stand is we have put it into our contracts that it is a point of negotiation when when we come to it.

However, again on this, we look at a industry wide approach as well, because it's not only our segment, but it's clearly it's across the whole tanker shipping segment, where we need to make sure that we get to a proper split of the costs of decarbonisation. So it's, it's, let's say it's preliminary in our in our contract, but we are seeking an industry right solution.

64:34 And then there's also a question from the same person who are containers, how impacted by port congestion as our container, EBITDA, and utilization. But the reason that we're seeing such a strong market is, is of course, the, the container.

64:52 The containers are experiencing significant port congestion, the ships are waiting three to four weeks to discharge or to load. That means, of course, a lot more tanks are being held up.

So there's not only a shortage of space on the ships, but also shortage of containers available than that has put pressure. So, lower shipments fall at higher margins because of the lack of both space on the ships and on the containers.

To give you exactly what EBITDA impact and utilization impact just driven by port congestion is difficult to say. But this market is driven by a healthy demand.

But it's very much driven by the congestion cost or the strong component line market.

65:44 Sea Farm last two quarters have been solved. How would you think still see from how should we think about still See Farm in 2022?

65:55 Now, I think that the underlying principles aren't the same. There's a growing demand for fish.

You know, here's all that story before. But what we have, what we have seen is that after the lockdown, there are less fishing vessels in the ocean, or a lot of them went bankrupt.

So there's, there's a big demand, there's less wild catch of fish coming from the oceans. And that has caused a, yeah, that's part of the reasons why we've seen the price pick up and I don't think that's going to change.

The biggest impact we've really seen is the lockdown of restaurants, which has caused the restaurants which we serve to not buying our fish. But we are now seeing more and more opening.

And more and more opening of the economies opened a reduction of the COVID regulations and more and more restaurants opening up and I don't think that we will go back to where we were in the form of lockdown. So I'm quite bullish for 2022.

And continued growth in the sole – on the sole side of the business. So I am bullish.

And I would say that, of course there might be quarters where we have two weeks where we have to adjust our price. And that will have a fair value adjustment.

And that's, a big impact. But that will come up again.

So overall, I'm quite bullish that this market will continue for Stolt Sea Farm. For us and we're also we're very much focusing on expanding the market for our products, which hasn't really been a priority in previous years.

67:48 Are you worried that sound quality might be lost on the way to transitioning work from local offices to a new team formed by new hires at the Manila? Okay, I think this is an internal message.

No, I'm not I'm very convinced that the organization and the shared service center that we're building up in in Manila will do an outstanding job in whatever positions that we move the site to move to Manila. And actually, I think we will have even more focused on creating the shared services not only necessary Manila, but also in other locations.

68:27 Any update on timeline for IPO in the tanker division Sea Farm what we we've talked about this many times now the tanker? We will do, we already, we have done preparation now for a very long time and we are ready, but we need to have a better momentum in that market the market.

We need to show the earnings to the market before we can attempt an IPO. Sea Farms IPO was put on the shelf, that it's not a strategic decision that that is something that we that that we have any plans of doing in the foreseeable future.

We went into the market last year to check it's the same old story. We saw the pricing of land based recirculation companies in the market, some of the pricings were just phenomenal.

And some of the companies that are out there has an actually higher market so we felt it was our responsibility to kind of make the value of so for more transparent. And then we went and checked the market.

But we didn't achieve good enough feedback or, or interests. So we decided that, Stolt Sea Farm generates its own cash flow, we can leverage that cash flow and build and do this 2035 growth plan without having to raise any equity or separating out.

So for the time being that is on the shelf.

69:47 There, sir, lots of compliments for STC, and especially VM for having secured the needed space this year. Okay, these are internal messages.

Total SDN expenses were up by 30 million year on part of this was due to employee profit sharing what percentage of the 30 million does this entail?

70:09 So the A&G, you remember the A&G compared to 2020, and 2030. It was an exceptional year in 2013, we went into kind of lockdown mode, we went into an emergency mode into the back.

So we cut costs, we stopped hiring, we stopped consulting, so we really, really cut down to the bone in preparation for the unknown what the consequences may be of the pandemic. So the pickup that you see in 2021 is really a catch up of the highest that we have to do to run the business.

So if you look at the $30 million, what percentage of that is attributable to the profit sharing? I will say what run 20% of the $30 million.

71:05 And that I believe completes all the questions. So if there is no further questions.

71:14 That completes our fourth quarter earnings presentation. Thank you for participating and we will see each other again and hopefully maybe one day in the in person during the first quarter earnings release which is scheduled to be in end of March or in April.

Thank you. Thank you very much for participating.