Apr 29, 2019
Operator
Hello, and welcome to the Scorpio Bulkers Inc. First Quarter 2019's Conference Call.
I would now like to turn the call over to Hugh Baker, Chief Financial Officer. Please go ahead, sir.
Hugh Baker
Thank you, Operator. Thank you all for joining us today.
Welcome to the Scorpio Bulkers first quarter earnings call. On the call with me are Emanuele Lauro, our Chairman and Chief Executive Officer; Robert Bugbee, our President; and Cameron Mackey, our Chief Operating Officer.
Earlier today, we issued our first quarter earnings press release, which is available on our website. The information discussed on this call is based on information as of today, April 29, 2019, and may contain forward-looking statements that involve risk and uncertainty.
Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in the earnings press release that we issued today as well as Scorpio Bulkers' SEC filings, which are available at www.scorpiobulkers.com, and sec.gov.
Call participants are advised that the audio of this conference call is being broadcast live on the Internet and is also being recorded for playback purposes. An archive of the webcast will be made available on the Investor Relations page on our website for approximately 14 days.
In addition to this call, there will be a short presentation available on -- at www.scorpiobulkers.com on the Investor Relations page under Reports and Presentations. If you have any specific financial modeling questions, you can contact me later and discuss offline.
Now I'd like to introduce Emanuele Lauro.
Emanuele Lauro
Thank you, Hugh, and thanks, everybody, for being with us today. Welcome to the first quarter call for Scorpio Bulkers.
The result serves to demonstrate the resilience of the company through a testing period in the dry bulk space. This quarter, there have been some particularly unhelpful headwinds, which you will hear more of during the call.
Against this backdrop, we continue to generate positive operating cash flow and have further enhanced our balance sheet flexibility. As the past few months have demonstrated, we should expect the unexpected.
That said, the forward market and the recent acceleration in U.S. and Chinese GDP indicate that the worst may now be behind us.
Although the dry bulk shipping will always be subject to the noise of the macroeconomy, shareholders can rightfully expect management to make informed technical, commercial and financial decisions through these peaks and troughs. Seen in that context, this quarter has been one of marked progress and we're quietly pleased with how the company is positioned.
Commercially, we have made selected disposals of tonnage where we believe the price offered represented good value for the company. Furthermore, our decision in the second half of 2018 to take selected time charter coverage through this period has proven to be right.
Technically, we remain engaged with a significant dry docking program, which will leave much of our fleet scrubber equipped, furthering its best-in-class position as a go-to modern, cost-efficient fleet into the dislocation of IMO 2020. Financially, we have engaged in selective sale and leasebacks improving the balance sheet liquidity.
This serves to demonstrate our access to top lenders worldwide and market-leading rights for finance. Our clear intention is to return more cash to shareholders when the market allows.
With this in mind, we have renewed the buyback authorization and reduced our cash operating expenses year-on-year, the timely investment in STNG shares when mark-to-market continues to pay off handsomely for SALT's shareholders. With this, my remarks are closed, and I would like to hand over the call back to Hugh.
Hugh Baker
Thank you, Emanuele. I would like to refer you all to the presentation in respect of today's earnings release, which supplements the information provided by the release.
The first quarter of 2019 was an eventful quarter for the company. During the quarter, we made a net loss of $3.5 million, which amounted to a loss per share of $0.05.
This included a $15.5 million, $0.23, gain on our investments in Scorpio Tankers and a $7.5 million, $0.11, write-down of assets held for sale. As a result, adjusted net income was $4 million, $6 million -- $0.06 a share, excluding the write-down of assets held for sale.
Adjusted EBITDA was $32.8 million. Revenues for the first quarter were $50.4 million, which can be compared to the $54.3 million for the same quarter of 2018.
Revenues were driven by Ultramax time charter equivalent earnings of $9,177 per day and Kamsarmax time charter equivalent earnings of $11,176 per day. Since the beginning of the current quarter, we can guide you that we have booked Ultramax time charter equivalent earnings of $9,779 per day booked to date in Q2 -- in the second quarter of 2019 and Kamsarmax time charter equivalent earnings of $10,711 per day booked to date in Q2 2019.
Our liquidity position as of April 26 was $57.9 million in cash. Our fleet size has reduced during the first -- during the quarter due to the sale of 2 2015-built Kamsarmax vessels for $48 million.
Upon the completion of this sale during the second quarter, the company's liquidity will increase by $18.6 million. Capital expenditure of $3.7 million was incurred in the first quarter of 2019 for exhaust gas cleaning systems or scrubbers.
Total capital expenditures on -- to date on scrubbers has been $6.4 million. Full details of our expected future CapEx -- scrubber CapEx program amounting to $120.6 million is contained in the earnings press release and the supporting presentation.
In this respect, I'd like you to refer you to our most recent investor presentation, which is also on our website, where we provide the basis behind our decision to install scrubbers, not least through the calculations supporting the fuel savings we expect to generate from installing them. The company also executed and commenced various financings to increase liquidity.
We sold and leased back 3 Ultramax vessels and 4 Kamsarmax vessels, which will increase liquidity by $57.2 million in the aggregate. In a separate transaction, we sold and leased back one Kamsarmax vessels -- vessel, which will increase liquidity by $6.9 million.
We sold and leased back 6 Ultramax vessels in a further transaction, increasing liquidity by $62.4 million. And finally, we sold and leased back 2 Ultramax vessels, which will increase liquidity by $17 million in the aggregate.
I can also announce that we've raised $46 million through the financing for scrubbers that is the upsizing of existing loan facilities. Please note that we previously announced $41 million of new financing, but over the last few weeks, we've been -- we've achieved credit approval from 2 additional finance institutions to take -- to increase this amount by an additional $5 million to $46 million.
The upsizings cover 8 loan facilities supported by 10 lenders, and we appreciate their support. If we add 3 of the lease financings, which include scrubber finance, we have 13 lenders financing scrubbers on 49 of our vessels.
I'm aware that there've been recent changes in the financing of our fleet, and for those investors or analysts who want to model our future debt, we have provided a detailed facility-by-facility overview of our future amortization schedule on Page 7 of the earnings presentation. In respect of our liquidity position, I have mentioned that the company has raised substantial amounts of new liquidity over Q1 and to date in Q2 in relation to the sale of the two vessels, the four sale and leaseback transactions and upsizing of existing loan facilities.
These liquidity-raising announcements add up to a total of $208 million and are sufficient to pay for our scrubber program and also to repay $73.6 million of bonds due in September. We continue to monitor our liquidity and expect to announce furthermore more modest liquidity-raising initiatives going forward.
The company's Board of Directors declared a dividend of $0.02 per share on April 26, 2019. No stock has been purchased to date in 2019.
As of April 26, 2019, $50 million remains available under our stock buyback program. With that, I would like to open the call up to investors.
Operator
[Operator Instructions]. Our first question or comment comes from the line of Jon Chappell from Evercore.
Jonathan Chappell
Hugh, thanks for all the transparency in the presentation and the press release. Just a quick follow-up on one of your last comments you made about continuing to do modest liquidity raises.
Should we expect further sale and leasebacks given the fact that asset values have held up kind of relative to the market? Or are there other levers you're thinking about pulling?
Hugh Baker
I think as we said it, I think we're continuing to monitor our liquidity and we expect modest advancements going forward in that.
Jonathan Chappell
Okay. Scrubber financing, if we take all the facilities...
Robert Bugbee
Jon, to be completely descriptive on that, if that may extend beyond sale and leasebacks into possible sales too, we wouldn't write that out.
Jonathan Chappell
Okay. That makes sense.
On the scrubbers, you've raised about everything about $71 million of new financing potential for those out of the $127 million CapEx. So it's a little under 60%.
Is that a level you feel comfortable with, or are you still looking to raise additional financing for the scrubber CapEx?
Hugh Baker
No, I think we're done on the scrubber CapEx. And like I said, we have essentially received scrubber financing on 49 of our vessels.
The remaining 5 vessels are vessels under Japanese sale and leaseback arrangements, where the leasing counterparties are not providing scrubber finance. So I think the -- in respect of scrubber financing specifically, I don't think we're going to do anymore.
We're very happy with what we've done.
Jonathan Chappell
All right. And if I tie everything together, then you've obviously achieved a lot on the liquidity scale.
And you have a pretty nice mark-to-market on STNG right now. Maybe time to take a victory lap and sell some of the STNG or do you still think it's too early in that cycle and you'll look to raise liquidity in other avenues?
Robert Bugbee
Yes. Well, we think STNG has got a long way to go.
It's not about declaring victory lap, it's about making money. And we think the product market is coming along very well.
In some sense, it's ahead of expectations. We're just coming to the end of a really deep refinery turnaround.
And all the data we're getting, whether it's long-term time charters or increase in traded volumes or consolidation on the margin would indicate that very shortly, the product market is going to start to put itself in a position to give off some pretty extraordinary numbers. The STNG -- the Scorpio Bulkers management thinks that STNG's value -- NAV is closer to 40 than any other number.
So we think there's a lot of upside in STNG. And the liquidity measures we've done have been particularly designed to ensure that -- remember, we had started back in January, February when it was unclear what was going to happen in trade disputes of the world, or in some sense, the world's view was worse than where it is today.
It was designed so that we could really hold STNG shares for a long time, and be in a position, as shareholders, to really benefit from what we expect to be a significant appreciation in those shares.
Jonathan Chappell
Thanks again for the transparency in the releases.
Operator
Our next question or comment comes from the line of Amit Mehrotra from Deutsche Bank.
Amit Mehrotra
I wanted to follow up on that last question because I think it's important in the context of just understanding what Scorpio Bulkers is, just given that so much of your net asset value -- or 1/5 of the net asset value of the company is attributable to the stake in STNG. So, Robert, it's obviously been a great investment, maybe the company's best investment since inception.
But there's also -- to be fair, there's been criticism about the corporate governance implications rightfully or wrongfully, but that's just a fact. So obviously, STNG is in a different place now than when you made the investment for the better.
SALT's financial position and balance sheet you guys are doing a lot of capital structure gymnastics given where the dry bulk market is. So why not release some of that balance sheet capacity?
It accomplishes a lot of things. It alleviates some of the corporate governance implications or conclusions some people have reached.
SALT gets better, and then STNG's float further gets better for people -- broader market participants to participate in this product tanker upcycle. So why wouldn't you take some money off the table there?
Robert Bugbee
Well, I guess that we felt that we did this in the best practice of -- way of doing it in good governance. The independent Board directors made the decision under the guidance of their own counsel and their own investment bankers.
So we felt that the way the investment was made was in line with good practice of corporate governance. We understand some of the criticism out there but providing it's legal, and above all, I would have thought that good governance starts with making money and value for the shareholder, and that's what the investment with STNG has done and that's what we expect it to continue to do in the future.
And as we've explained it, it's way too early to take an investment off when a few times, and you pointed best investment. Well, this could well be the best investment this management has ever made in any area in terms of timing of shipping over the years because what's happening in the product market is something that a regulation has created a -- on top of already tightening supply and demand and tightening price has now created a tremendous demand catalyst in whatever...
Amit Mehrotra
Yes, but do you understand what the -- this is a call -- conference call for a dry bulk company, and we've spent more time talking about the product tanker market than the dry bulk market. Isn't that weird to you?
And so the question is that when you meet investors, how do you pitch Scorpio Bulkers? Do you pitch it as a dry bulk company with an option on a product tanker company?
Isn't that kind of weird? And so are you sacrificing Scorpio Bulkers for the outlook for STNG, which is clearly better and bigger?
I mean I'm just trying to see where it strategically fits.
Robert Bugbee
Ok. So strategically, we made a decision, back in October, November is pretty -- we put out a lot of our vessels on time charter.
We didn't expect the market to, let's say, come under the pressure of the -- what happened with Vale, but we certainly expected at that time that the product market would, because of its unusual phenomenon, be in a position to materially outperform the dry cargo market during this period. Now that doesn't mean that we sell up every single thing right now and go into products.
We took -- we became the largest shareholder in what we consider as the best product tanker company there is in the world, and that's great and that's an investment. And in the meantime, the company has continued to -- has -- continues to have the youngest mid-small sized dry cargo fleet there is in the world, and we'll benefit from that.
We expect when the recovery comes in, it will continue its progress once, hopefully, the U.S. and China reach a trade agreement and is well positioned.
But the job -- that -- it's a very, very good opportunity that came around. And when I first started shipping, and -- actually forget about the past, maybe all of the billionaires of shipping actually have diverse portfolios.
They really don't see anything wrong in making money first, and that's what's happened here. And if, in the future, SALT continues to look at and continues -- the Board decides to continue to judge its investments based upon what it thinks it's going to be its greatest returns, then fine.
It may decide to be, at its core, a dry bulk owner and around the edges, invest opportunistically in the arbitrage that Wall Street provides from time to time. We haven't come to that conclusion.
All we're doing right now...
Amit Mehrotra
Got it. So is SALT now -- is salt a diversified holding company now?
Is that the way we should interpret it? I'm just trying to understand what you're saying.
Is that the key?
Robert Bugbee
I don't know. We haven't got to that decision yet.
Right now, it is where it is. It's primarily a dry bulk company that happens to have -- be the largest shareholder in the largest product tanker company at this moment in time.
We will see how this develops over time.
Emanuele Lauro
Amit, to echo what Robert is saying, I don't think we are sacrificing SALT in any shape or form. We were opportunistic and we took the opportunity to invest in product tankers.
The management team has done this in the past publicly and privately, with investments in shipping and not, but you may remember the gas investment, the crude investment, the container investment that the management team has done whilst involved in other companies. They were opportunistic -- we were opportunistic then and we've been opportunistic in October, from a SALT perspective, to look into STNG.
That's it. I don't think we can look into more or conclude where SALT is going to go because if you look at -- if you take the STNG investments off the SALT now, the market has done nothing, the dry cargo market, unfortunately, has done nothing in the last 4, 5 months or 6 months.
And we would still be -- we would still own and operate the largest medium-sized dry cargo fleets and more modern medium-sized dry cargo fleets over there on the market. But we wouldn't be -- we wouldn't have gained or lost much, that's what I'm saying.
Amit Mehrotra
No, that's fair. And I'll hop off now.
Just as only last thing I'll say is that when you say opportunistic, the implication is there is a buying and selling going on. And I guess that's the only point I just want to know.
Clearly, I've been a fan of the investment in STNG so I get it. But the VLOCs that you bought a while ago with STNG, you sold them, right?
And so you crystallized that value. It just seems to me based on what Robert was saying, 5, 6 years from now, we could be sitting here still -- on the balance sheet still having that investment in STNG.
And I wasn't sure if it's an opportunistic investment or a strategic investment that we should be...
Robert Bugbee
I don't think in 5 or 6 years, you'd be having -- ill make it simple, we don't think in 5 or 6 years, you will have the investment on SALT's balance sheet. I do think that -- very clearly right now, we think that STNG is in a fantastic place for the next 2 or 3 years.
Now whether it takes off its stock at $60, whether it takes it off at $70 or $80 or whether dividends part of it along the way, we don't know yet. We just know that 25 -- or we believe rather that 25 is just right at the first steps of a fantastic potential move in the product market in Scorpio Tankers.
Operator
Our next question or comment comes from the line of Gregory Lewis from BTIG. Your line is open.
Gregory Lewis
I just had a question. You guys have clearly been pretty opportunistic or aggressive with the sale lease back for fleet.
Is there any sort of point we should take down where you -- how we should be thinking about maybe you want to own a certain percentage of your fleet versus how much you're willing to actually put on sale and leasebacks. And really what I am getting, you view sale and leasebacks much different than you do traditionally?
Hugh Baker
I think you've answered the question in its latter part. The sale and leasebacks are were very similar to the fact that they are essentially on balance sheet -- from balance sheet debt.
They're all priced on floating level of hosting [ph] basis. Tends to be longer than banks that pricing tends to be slightly higher but only slightly tend to be much more flexible than they were a few years ago but with significantly higher advance rates.
I think that we continue to monitor this. Again, I think we expect...
Gregory Lewis
I'm sorry, you're breaking off.
Robert Bugbee
You're making a few -- we might make a few small changes but essentially, we don't see us doing a lot more sale and leasebacks at this time.
Gregory Lewis
Okay. Great and then just following up on that.
It looks like a solid decision to go out and do -- you sold a couple of vessels. Is that sort of changing in philosophy or what was sort of the rationale behind selling the two Kamsar vessels?
Hugh Baker
The stock was trading at that time and even more so now that STNG has moved up, the stock was trading significantly below net asset value. And I think that selling those assets at those prices is -- was the most -- doing sale leasebacks isn't quite as flexible long term in what you could do here given terms as if you speed up a little bit of room by selling a couple of assets like we did [indiscernible].
Gregory Lewis
Okay. So it could be simply want to mean -- I know that you didn't buyback any stock in the first quarter.
You've sold these vessels. Those vessels are going to I guess sold out the fleet at some point in the second quarter and at that point maybe you could explore your potential that which at cash from these vessels we could see.
You guys start off to buyback?
Robert Bugbee
Maybe. I mean, we're not going to telegraph that but what I would say is that when you're doing so much refinancings, et cetera, et cetera, regardless of what liquidity you think you're doing in the first quarter, you would not be buying back stock in the middle of going to credit committees, et cetera, et cetera.
Operator
Our next question or comment comes from the line of Randy Giveans from Jefferies.
Unidentified Analyst
This is Greg on for Randy. So a question on scrubber install cadence.
Why are you guys installing until 4Q 2020? Has that just have to do with coinciding the dry docking for the vessel with the scrubber install, or is it shipyard space for retro fits?
That's the constraint there, kind of, will you walk us through the idea there?
Cameron Mackey
Yes, it's Cameron here. It's a combination of factors as you described.
So it's a rather complex optimization problem where you have vessels that are due for statutory dry docking. You have commercial considerations around positioning vessels.
You have manufacturing constraints around the supply of the scrubbers themselves. And then, of course, you have the available space in established ship repair facilities that can install and commission the scrubbers.
So it's a combination of things. Now others might promote that they can install scrubbers with vessels, a float or go to some unproven or out-of-the-way repair facility.
We don't, in general, embrace those views or agree with those views. So this is a well-thought-out methodical process of installing scrubbers.
And like we said the biggest saving comes from lining up that installation with already mandated dry docking, and that reduces your off-hire significantly. So that's what explains the time line we've put in place.
Unidentified Analyst
Okay. And then lastly on that is that -- I see in the kind of guidance that you guys provided in this table in the press release that you have $1.5 million that you're going to defer until Q1 2021.
Is that just a timing issue or what's up with that payment?
Robert Bugbee
It's simply in accordance with the contracts.
Unidentified Analyst
Okay, okay. Makes sense.
So on another, kind of, ID here on share repurchases. Why didn't you guys decide to make any share repurchases in Q1?
And then also if you could reconcile in the press release the difference between the 71 million shares that you discussed in the balance sheet and in the dividend commentary and the difference between 67 million that is in the income statement, please?
Hugh Baker
Okay. The second, you can see that off-line too.
The first is a combination of 2 things. One is we were doing a lot of transactions in the first quarter and a lot of those are involving credit with lenders, credit with lessors, et cetera, et cetera.
And you -- the best thing to do always in situations like that is to keep the balance sheet as stable as you can. The second thing is that you actually need an open window in which to do it that we're doing so many transactions that I think the amount of days that the company had an open window between either earnings or blacked out as a result of the transactions prevented it completely.
Operator
Our next question or comment comes from the line of Erik Hovi from Clarksons.
Erik Hovi
Just a market-related question. So we are now seeing that South American grain and soybean exports or expected to exceed last year's volumes, and further, we saw that China now has bought 10 million tons of soybeans from the U.S.
last week. So given that the 100-year marking of the Communist Party comes in 2021, do we expect to some Chinese stimuli and imports supporting dry port market going forwards?
Hugh Baker
Yes, we expect subject to the -- it's rational to us that the -- more than that, that the U.S. and China will come to an agreement.
We've still got some reasonably healthy growth out of China. Definitely, the U.S.
economy is in okay shape. And the, sort of, turbulence around other matters is coming to an end and you are seeing -- the irony is that our markets have been building up quite consistently all the way from, let's say, the middle of February in a very gentle way.
And so yes, we're expecting this market to go forward, and I think that's exciting that we're not suffering from what the Capesize has suffered from. We do have -- expect to have growth in our fields and if we notice the supply side of Ultramax, et cetera, is pretty low the -- in terms that we're through the major part of deliveries.
So that side makes us confident that we have a dry cargo company that is in the right area at the moment that the cash flows are positive and remained positive over the bad. And as I said -- as Emanuele said, look, we are still -- got the newest fleet, a very significant fleet, in the public market full of dry cargo and that's where, if you reverse what some of the other analysts said, 80% of the NAV is in dry cargo.
So we felt no reason to do anything but to tune the company in terms of liquidity to ensure the safe passage through the uncertainties and take some insurance but our base models are very optimistic for the core business of SALT going forward now.
Erik Hovi
Great. So just also to follow up on the previous scrubber question.
So do you have some updates on when you will start fitting? So far, we have seen 13 Utras and Kamsars having fitted scrubbers so far.
And we see another 99 are reported for fitting. So how do you view the time line for you guys versus your peers?
Robert Bugbee
So Cameron can go into detail, but I think most of our peers aren't doing scrubbers at all. If we look at the dry cargo market itself, the total dry cargo market.
Erik Hovi
No. Well [indiscernible] Ultras and Kamsars there are 99 as we see them at least.
Robert Bugbee
99, and what's the total fleet?
Erik Hovi
Sorry, guys, I did not catch that?
Hugh Baker
Well, the total fleet of Kamsars and Ultras, it's much higher than 99.
Erik Hovi
Yes, yes, the total -- yes, well, the total fleet is close to 500 I guess, but that's mostly on the bigger ones.
Cameron Mackey
I'm sorry, maybe we misunderstand the question. Are you talking about the timing of the process by which we're installing scrubbers, or our decision to install scrubbers in light of being a minority in the...
Erik Hovi
No, the timing. The timing, so...
Cameron Mackey
No, so as I mentioned before, the time or duration of a scrubber installation and commissioning is about 30 days or higher. And so we have a plan to install scrubbers to try and minimize that time and also to maintain our commercial exposure largely balanced towards the western hemisphere Atlantic market and in light of other constraints around manufacturing and installation availability at certain shipyards that we know can do the work, can do it on budget and on time.
So when you look at all these constraints in total, that's really what dictates our installation program. Could we have done it earlier?
Of course, but in light of the earlier risk around this time last year around potential delays of implementation and other uncertainty, we felt that this was the right installation schedule for our fleet concerning those constraints and the relative risks involved in the capital commitment.
Operator
Our next question or comment comes from the line of Fotis Giannakoulis from Morgan Stanley.
Fotis Giannakoulis
Cameron, this is probably for you. I want to ask you one company ask -- tries to install scrubber today and hasn't been any preparation, what it would be the lead time both in terms of equipment manufacturer and also shipyard availability?
And if you can give us a range, especially first-tier and second-tier scrubber installators?
Cameron Mackey
Thank you, Fotis. It's not an easy question.
There are competing technologies in yards and owners than manufacturers who will all tell you a story or sell you a song, but I think realistically, it would be 18 to 21 months. Largely, the binding constraint there is, first and foremost, repair facility availability.
And then it would be the lead time around a proven manufacturer. There are a number of manufacturers that aren't proven.
There are a number of repair facilities or installation methods which aren't really proven. But if you want, say, to know when you're getting, I'd say 18 to 21 months or so.
Fotis Giannakoulis
Okay. That's very helpful.
The IMO 2020 day is approaching. I know it's probably a little bit on the early side, but I was wondering if there are any discussions with some of the charterers about period charters?
And what kind of a difference do you see on the time charter market between a vessel with a scrubber and a vessel without a scrubber?
Robert Bugbee
Thanks for the question. Others may join here, but the best example of that is on the larger vessels and newbuilding, where certain charterers, both in the dry bulk market and the tanker market, and the container market, for that matter, have sponsored newbuildings against long-term charters where you can see the spread that IMO 2020 confers, and that spread obviously leads to some sharing of the benefits of the charter and some to the owners.
Now on Ultramaxes and Kamsarmaxes, not so much. There are a few examples in the market out there.
We see regular inquiry all the time from charterers wanting to fix our vessels either before and after the installation or only after. But I think at this point in time, because we are confident in the spread, the fuel spread, and we are confident in our assets and we are confident in our installation program that we're going to let this run a little bit before we give away a material portion of that benefit to a charterer, let alone fix time charters at a point in the market that we don't feel is particularly attractive for us.
Fotis Giannakoulis
And one last question about your installations. You meant some of you are trying to match all the installations with dry docking.
Did you have to accelerate dry docking? I understand that vessels, they do not need to do a dry dock before they reach the fifth anniversary since delivery.
Most of your vessels are much young -- actually, all your vessels are much younger than that.
Hugh Baker
No, I didn't mean to suggest, and I apologize for the confusion, I didn't mean to suggest that all of our vessels need dry docking, and that's when they're going to get a scrubber. Some of our vessels do, in 2020, some in 2019, some in 2021.
But we are trying to optimize our installation schedule around those vessels in the 2019 and '20 window in order to minimize the time off-hire. So I think it's the right thing to do when you're not sure what the freight environment and opportunity cost will be.
Operator
Our next question or comment comes from the line of Liam Burke from B. Riley FBR.
Liam Burke
You're serving fairly diverse markets. You touched on the soybean trade with China earlier in the discussion.
Is there any parts of this diverse market that are rolling out better or worse than you'd anticipate it as you're looking at the forecast for 2019?
Robert Bugbee
Not really. I mean we -- so much of our expectations were related around the general trade negotiations.
Obviously, we didn't -- it's not a market we're directly in, but it clearly affects the psychology of the markets. We didn't expect the -- what's happened in the iron ore market as a result of the Vale incident, that's obviously a negative.
But then a plus, and I think it's more of an important plus is that, given the fact that we haven't had a trade agreement yet, we're reasonably pleased with just generally the stuff we're seeing out of China and the U.S. related to their individual economies.
So in that sense, the overall environment is healthy.
Liam Burke
And just touching on an earlier question on scrubbers being a competitive advantage. Obviously, you laid out the cost side.
And you mentioned on the newbuild side on longer-term agreements. Are you seeing any kind of customer interest now on your current fleet?
Robert Bugbee
Well, I think that rather than talk about our particular fleet, which yes, I mean we're a new fleet, so across the board of shipping, there are customers wanting and willing to pay more for vessels that have scrubbers, especially if they're delivering in the middle of this year or the second or third quarter. And you only have to look to the iron ore market and see what 2020 recently has done in a very week.
This wasn't done in the last 2 weeks. They've done a couple of fixtures that were really all about scrubbers and all about the willingness for the customer to pay out and secure that scrubber optionality.
Operator
I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.
Hugh Baker
Okay. So thank you, everybody.
Look, I understand there are a number of things that we do or don't do at certain times that people have the information understand or don't understand. But generally, everything that guides us is that we're always reviewing all of our avenues all the time to maximize value for our shareholders.
And that's what we do. Insiders, ourselves own approximately 30% of this company, and that's -- our guideline is we're very aligned with the shareholders.
We benefit from it, and that's the judgment that we're doing. So thank you so much, everybody, for attending.
Look forward to speaking to you in a few months.
Operator
Ladies and gentlemen, thank you for participating in today's conference. This concludes the program.
You may now disconnect. Everyone, have a wonderful day.