The Great Eastern Shipping Company Limited CC-Sep23.pdf · 2023-10-31
This is also about your CAPEX cycle, we have seen you in 2017 get aggressive on the CAPEX cycle and that decision has already gone through, now you are on net cash balance sheet. So, the key issue here that we think will drive valuations will be, the message that we get about how you are planning your next CAPEX cycle. At the moment you seem to be treading water, I mean you are only going to be replacing ships and your ship count and your DWT count probably is going to stay within the same range. At the same time we find someone like Frontline taking a leverage bet on two views. One is that crude ordering is not going to pick up for various technological and peak oil demand not supply, peak oil demand around the corner at 20 30. So, it depends on your view on what is happening to solar and wind conversion and you know the difference between renewables and oil, etc. So, when exactly that is going to hit whether it's 2027 or 2035. So, basically, there is a view of peak oil. The second is related to that is the LNG carrier. So, embedded in these two, somebody is taking a very brave leveraged bet that VLCCs will go into orbit. Now this kind of the previous questions also and your own answers kind of tells us that you are probably not aligned with this kind of an aggressive view, where somebody is even taking a leverage bet. You do have a significant cash reserve. And you could sort of provide for the MTM s, on potential MTM, should you get it wrong, but some message about what is happening to your CAPEX cycle, I mean, if we could get your comments on --
A related question given that the cost of idle funds is now pretty substantial and is probably taking away more and more, although it would have reduced somewhat given how interest rates have moved. And from what you are telling me that you are not going to use up all your cash, this is going to be , I mean, if we just project it out five years forward and all the cost of idle funds is going to cumulatively add up to quite a bit. So, are you thinking about that or doing something out of the box, in that area or you just treat it as a cost and just absorb it?