Earnings call transcript: MPC Container Ships Q3 2025 sees stock rise on strong revenue

MPC Container Ships ASA reported robust financial results for the third quarter of 2025, with revenues surpassing forecasts and a notable rise in stock price. The company announced Q3 revenues of $126 million, outperforming the revenue forecast of $116.06 million. This positive performance was reflected in the market, with the company’s stock price increasing by 4.49% following the announcement.

Key Takeaways

• Q3 revenues reached $126 million, exceeding forecasts.
• Stock price increased by 4.49% post-announcement.
• Revenue guidance for the year was raised to $500-$510 million.
• Fleet utilization remained high at 97.6%.
• The company declared its 16th consecutive dividend.

Company Performance

MPC Container Ships demonstrated strong performance in Q3 2025, with revenues significantly surpassing expectations. This growth is attributed to high fleet utilization and effective cost management. The company continues to strengthen its position in the container shipping market, particularly in the feeder segment, with a focus on eco-efficiency and fleet modernization.

Financial Highlights

• Revenue: $126 million, up from the forecasted $116.06 million.
• Adjusted EBITDA: $75 million.
• Dividend declared: $0.05 per share.
• Operational cash flow: Over $225 million year-to-date.
• Fleet utilization: 97.6%.

Earnings vs. Forecast

MPC Container Ships reported earnings per share (EPS) that were not specified in the data provided, but the revenue exceeded the forecast by approximately 8.6%. This positive surprise reflects the company’s effective operational strategies and market positioning.

Market Reaction

Following the earnings announcement, MPC Container Ships’ stock price rose by 4.49%, closing at $17.59 from a previous close of $16.83. This movement reflects investor confidence in the company’s ability to deliver strong financial results and maintain a competitive edge in the market.

Outlook & Guidance

The company increased its revenue guidance for the year to $500-$510 million and EBITDA guidance to $330-$340 million. MPC Container Ships is focusing on fleet modernization and exploring strategic initiatives, including vessel sales and forward fixtures, to enhance its market position.

Executive Commentary

CEO Constantin Baack emphasized the company’s strategic focus, stating, "Success will depend on resilience, compliance, and strategic agility." He also highlighted the importance of maintaining a modern fleet to ensure long-term success, saying, "Having an efficient, modern fleet that is commercially attractive to our customers is the foundation for long-term success."

Risks and Challenges

• Supply chain disruptions could impact operational efficiency.
• Market saturation in certain regions may limit growth opportunities.
• Macroeconomic pressures, such as fluctuating freight rates, could affect profitability.
• Regulatory changes in environmental standards may require additional investments.
• Geopolitical tensions could disrupt trade routes and logistics.

Q&A

During the earnings call, analysts inquired about the Red Sea route reopening and its impact on operations. The company addressed concerns regarding its dividend policy shift and provided insights into its vessel age and retrofit strategies. Additionally, potential new building options were discussed, highlighting the company’s commitment to fleet modernization and strategic growth initiatives.

Full transcript - MPC Container Ships ASA (MPCC) Q3 2025:

Constantin Baack, CEO, MPC Container Ships: Good afternoon and good morning, everyone. This is Constantin Baack, CEO of MPC Container Ships, and I’m joined by our CFO and Co-CEO, Moritz Fuhrmann. Welcome to our Q3 2025 earnings call. Thank you for joining us today to review MPC Container Ships’ third quarter and nine-month results for 2025. Earlier today, we issued a stock market announcement covering our Q3 results for the period ending September 30, 2025. Both the release and this presentation are available in the investor section of our website. Please note that today’s discussion includes forward-looking statements and indicative figures. Actual results may differ materially due to risks and uncertainties inherent in our business. Before diving into Q3, let’s briefly reflect on the first nine months of the year. We are pleased to report another strong quarter, underscoring the resilience of our business amid ongoing macroeconomic and geopolitical uncertainties.

Despite regulatory shifts and unpredictable trade policies, the container charter market and asset values remained firm. Time charter rates held up well, second-hand demand stayed strong, and idle capacity remained low. While the global order book is elevated, constrained supply in the small to midsize segment and aging fleet, as well as shifting trade patterns, support a favorable balance. Volatility remains, so we do not expect smooth sailings ahead. We focus on what we can control: continued disciplined fleet modernization, forward-fixing at attractive rates and periods, increasing coverage, maintaining a strong and flexible balance sheet, as well as strong investment capacity. Our disciplined capital allocation approach has delivered strong returns and dividends, and we remain committed to sustainable shareholder value. Looking forward, we see opportunities to selectively divest, invest, and grow, leveraging favorable market conditions while staying agile and focused on long-term value generation.

We’ll explore these themes in more detail during the presentation, and with that, I would like to hand over to Moritz.

Moritz Fuhrmann, CFO and Co-CEO, MPC Container Ships: Good morning, everyone, and also welcome from my side to MPCC’s earnings call for the third quarter of 2025. Our agenda for today starts with a review of Q3 highlights, after which we will spend some time on the current market dynamics and the outlook for the remainder of 2025. Starting with the highlights on slide number three, we continue to see a very strong quarterly performance based on revenues of $126 million and adjusted EBITDA for the third quarter of 2025 of $75 million. As a result of the very good financial performance, the board has declared the company’s 16th consecutive dividend with $0.05 per share, basically representing 50% of the adjusted net earnings for the third quarter of 2025 and also being the upper end of our dividend payout ratio range.

On the asset side and the fleet transition side, we continue to be very active as we handed over three previously sold vessels to the new respective owners, bringing the total to 10 vessels this year. On the flip side, we have been equally busy on the new building side and were able to reinvest the sales proceeds by contracting so far this year eight 4,500 TEUs and two 1,600 TEUs for a total consideration of around $525 million, bringing the total order book today to 11 vessels. The deliveries of the newly contracted vessels will start from the second half of 2027.

What is important to note, I think, is that all our new buildings have been ordered against very attractive long-term charters with durations of three, seven, eight, and 10 years, allowing for very meaningful de-risking throughout the fixed time charter period, while, and I think that is important, at the same time retaining significant upside potential during the remaining lifetime of the vessels. These transactions, we believe, are cementing our position in the market as the leading tonnage provider in the feeder segment and also underscoring our strategic importance and our relationships with the top-tier line operators. Our new building activity is also a result of the current positive market momentum, mostly reflected in our most recent chartering activity.

We have forward-fixed in total 11 vessels through two distinct on-block deals for durations between one and a half and two years and at rates between $17,000 and $23,000 per day, obviously depending on the vessel size and forward delivery window, adding significant coverage into 2028. The total revenue backlog increased quite sharply, now standing at $1.6 billion. Also, as a consequence, our open days coverage has increased quite meaningfully, so we’re now 92% and 55% covered for 2026 and 2027, respectively. Needless to say that 2025 is fully covered at 100%. Looking ahead into the remainder of 2025, and as the market remains very dynamic, we don’t see, as of now, at least any negative implication as a result of the most recent Red Sea announcement.

In any case, we will continue focusing on further driving our fleet transition as well as the retrofit program to improve the fleet composition and enhance long-term shareholder value. Based on the current market, we increased the revenue guidance to $500 million-$510 million and our EBITDA guidance to $330 million-$340 million. Turning to the next slide and looking at some of the KPIs for the third quarter, gross revenue and adjusted EBITDA came in slightly below previous quarter as a result of the remaining legacy contracts running off now. The markets are very supportive and charter rates and durations are very strong, however, not at levels we have seen in 2021 and 2022.

From a balance sheet perspective, and despite having drawn under new senior secured facilities, the leverage ratio with 34.6% is only slightly up relative to last quarter, while the net debt position has decreased to $107 million, underlining the conservative balance sheet structure that we have today. As mentioned before, on the top right-hand side, the board has declared a dividend of $0.05 per share, which will be paid in December this year. The operational cash flow generation remains very strong with more than $225 million year to date. While the fleet utilization at the bottom right was unchanged at 97.6%, the actual OPEX increased slightly due to one-off non-recurring items, and we expect a normalization trend for the next quarter.

Looking at slide number five, and I think very importantly focusing on the current chartering market as well, in particular our activity there recently, we’re clearly evidencing a very strong momentum with no slowdown whatsoever in activity by the line operators. In particular, we see very strong demand for feeder vessels. Actually, to the contrary, we see increased demand for forward fixtures at very strong levels, contrary to the most recent noise that we have heard and seen around the container market. Looking at the left-hand side and going into the third quarter, we have had 32 open positions stretching into the first quarter of 2027. In the last few weeks, we have proactively via two distinct charter package deals fixed 11 of those vessels, substantially reducing the open days going forward as we can see it.

The average forward fixture that we’ve done on those transactions is around 12 months, with the longest forward position that we fixed being 14 months out. The average duration is around two years, with very strong rates that are adding around $110 million to our revenue backlog through those transactions. I think also important to mention, all fixtures have been done with top-tier line operators. As the market remains elevated, we still have upside potential through 21 remaining open positions starting from Q1, Q2 next year. However, we are already, as we speak, already being approached by charters on some of these positions. In line with our chartering strategy, meaning being conservatives, we will try to fix also those vessels if we believe, of course, the offered rates and durations are a fair reflection of the current market.

In any case of the future chartering activity, our P&L has great earnings visibility, and with the limited number of open vessels in the not too distant future, we are very much shielded from any adverse market developments. On the asset side, on the S&P side, we haven’t concluded on any further vessel sales, but we see equally strong liquidity and demand on the S&P side. We are currently contemplating further asset disposals as we have done in the past, and that would potentially mean materializing very firm asset values that are, at least according to our numbers, implying NAV figures of north of NOK 35. On the next slide, we spend a bit more time on the investment side and in particular our efforts on the fleet transition, where we have been very active ever since the summer this year.

After having ordered four 4,500 TEU vessels over the summer against the three-year contract, we have recently announced two more newbuilding deals for six vessels, namely two 1,600 TEUs and another batch of four 4,500 TEUs against eight- and ten-year contracts with top-tier liner operators, growing our total order book to 11 vessels. The additional investments follow our usual approach that we have also done in the past as we combine asset investment with cash availability, providing significant de-risking throughout the charter period. As you can see on the left-hand side of the graph, our yet outstanding CapEx commitments of more than $550 million are pretty much covered by the contracted EBITDA, essentially enabling us to realize significant upside value once the vessels are running off their initial charters.

The vessels that we have contracted obviously have a staggered redelivery profile given the different charter durations, but on average, the vessels will be roughly seven years of age at charter expirations. To put things into perspective from a value perspective, the current age-adjusted FMV for these vessels is roughly $500 million-$550 million, i.e., a great combination of minimum residual risk while retaining maximum upside potential in what we believe will be a very constructive feeder market into the future. In general, we have taken and will continue to take a very prudent approach to these investment cases to minimize residual risk. I think the ability to structure and execute these transactions speaks for itself and is, I think, a great testament to the importance of MPCC as a strategic partner to the top-tier line operators globally.

Needless to say that these investments are further milestones in our fleet transition efforts, to which Constantin will speak a little later in the presentation in the outlook section. However, wanting to underline that we’re confident that building an enhanced and future-proof asset portfolio will support generating sustainable and long-term shareholder returns for our investors in the future. Turning to slide number seven, the cash flow, the usual cash flow bridge. Cash flow in Q3 2025 was again dominated by good operating cash flow of $73 million. On the investment side, we have paid down the first installments under our 4,000-4,500 TEUs that we ordered over the summer against three-year charters. In addition to the operating cash flow, we had around $50 million cash inflow through newly drawn senior secured debt that is secured against two 3,800 TEUs.

That facility features a $250 million accordion option that is earmarked to fund further growth in the future. The overall positive cash generation, sorry, substantially improved the company’s cash position and investment capacity to around $420 million by the end of September. In addition to the balance sheet liquidity, we retained further flexibility through our undrawn RCF. Lastly, by paying our 15th consecutive dividend in September in the amount of $22 million, MPCC continues returning capital to shareholders. Now north of one or still north of $1 billion has been distributed ever since we introduced our recurring dividend. As the board has today declared the next dividend, it serves, I think, as a very good testament that we will continue to reward shareholders through capital returns. Going to the next slide, we see MPCC’s quite conservatively structured balance sheet.

We have year to date executed on a number of measures, namely vessel divestments as well as drawing secured and unsecured debt facilities to improve the company’s liquidity position and therefore also the investment capacity as we face a, what we believe is needed fleet renewal. By the end of the third quarter, liquidity stood at around $470 million. However, pro forma adjusting for expected yard payments in the fourth quarter, MPCC has a pro forma implied liquidity of around $500 million, including a new upsized undrawn RCF that is currently in execution. In view of our fleet renewal efforts and new building CapEx commitments, the corresponding investment capacity is absolutely essential for us.

At the same time, we managed to achieve this capacity without, I think that is important, without compromising the overall robustness of the balance sheet as well as flexibility of the balance sheet with a conservative leverage ratio of below 35% and with 28 debt-free vessels with a fair market value of close to $700 million. While gross debt stands at $550 million, net debt adjusted for the pro forma liquidity remains very low. The vessel portfolio that we have on the water with a charter-free market value of $1.5 billion provides additional comfort. Not surprisingly, the current new building commitments will partly be funded through debt, which will be sourced in due course. The initial discussions we have had with potential lenders indicate a very healthy appetite for more than feeder tonnage secured by long-term charters.

Once fully delivered, the company’s gross debt is expected to grow. However, the expected additional leverage will be supported by the cash availability attached to our new builds. Going forward, we will ensure to use the investment capacity as prudently as we have done in the past by identifying and executing shareholder accretive transactions that help building a future-proof fleet. All in all, MPCC remains very disciplined on the capital allocation side of things as we have always done. On that note, I hand over to Constantin for the market update and outlook section. Thank you, Moritz. I would like to continue with the next agenda point, the market update. Throughout the previous quarters, I noted that volatility is here to stay, and Q3 has confirmed that view.

Looking ahead, I expect this environment of heightened uncertainty to persist not only through the remainder of the year, but well into the foreseeable future. Let me give you a quick overview of the three major themes shaping our outlook: geopolitical flashpoints, macroeconomic trends, and regulatory uncertainty. First, trade tensions and protectionist policies are disrupting global supply chains. This means higher costs and longer lead times as companies diversify sourcing. Second, regional conflicts and sanctions are creating root volatility and increasing compliance risk. Sanction screening and due diligence are critical. Finally, strategic bottlenecks like the Suez Canal remain vulnerable to political instability and security threats. A single disruption can ripple across global trade. Recently, major liner companies have announced plans to cautiously resume Red Sea transits, starting with limited sailings before a full return.

Normalization will likely be gradual as carriers balance security, insurance, and network adjustments, potentially easing cape route costs but introducing short-term rate volatility. How and when this will be fully normalized remains to be seen. Looking at the macroeconomic picture, global GDP growth is projected to grow 3.2% in 2025, easing slightly to 3.1% in 2026. Growth is uneven. Emerging Asia remains the engine while developed markets slow down. On trade flows, US container imports are declining, but strong Asian export growth offsets this. Expect east-west flows to remain robust, though rate volatility will persist. The IMO net zero framework has hit implementation setbacks, creating uncertainty around decarbonization pathways. We may see fragmented regional schemes emerge, adding complexity and compliance costs. The big picture, geopolitical risk, macro shifts, and regulatory uncertainties are converging. Success will depend on resilience, compliance, and strategic agility.

Let’s move from the macro picture to the container markets in more detail. Please have a look at slide 11. The chart on the left shows forward availability of vessels for the next six months. What can be observed is a tight supply environment with limited open tonnage in the short term. This reflects strong charter coverage and cautious fleet deployment by owners. The implication is that securing tonnage will remain competitive for liner companies supporting firm charter rates. The chart in the middle compares charter rates and freight rates over time. Charter rates have softened slightly from peak levels but remain historically elevated due to constrained supply. Freight rates, while volatile, are trending above pre-pandemic averages driven by network disruptions and lingering demand imbalances. Importantly, freight and charter rates have never been as decoupled as they are at present, highlighting a structural disconnect between liner profitability and vessel earnings.

The key takeaway here is that we believe margins for operators remain under pressure, but owners still benefit from strong time charter earnings. The graph on the right tracks secondhand and new building prices for container vessels. Secondhand prices have stabilized at high levels, reflecting scarcity of modern tonnage and strong residual values. New building prices remain firm, supported by full order books and higher input costs. Asset values are resilient, but prices for new buildings remain elevated. Now that we’ve covered the container market, let’s take a closer look at the carriers, the liner operators, and how they are positioning themselves for the future. Over the past years, and that can be seen on the left-hand side in the graph, carriers have made a significant financial shift. They’ve moved from historically high leverage ratios to a position of strong capitalization.

The stronger balance sheets give them resilience in a volatile market and the flexibility to invest strategically going forward. What we are seeing now is a clear emphasis in terms of focus of the liner strategy on terminal access as a key competitive advantage. Ownership or long-term partnerships are key to ensuring reliability and cost efficiency. Market share still matters, but reliability and service quality have become just as important for customers. Integrated terminal and liner operations help carriers maintain schedule control and deliver a better customer experience. On the fleet side, carriers remain opportunistic in the secondhand market, where we see a number of transactions driven by liners, i.e., they are taking advantage of attractive pricing when it appears.

At the same time, they are advancing their new building programs, and we now see this taking more and more shape in the small and mid-size segments as we have anticipated during the last couple of quarters. Often, this involves partnering with owners in tender processes or bilateral deals to secure competitive positions. Liners are very selective, with only few owners being invited to these processes. Overall, carriers are entering this next phase with stronger balance sheets, a sharper strategic focus, and a disciplined approach to fleet renewal, positioning themselves well for operational reliability, the energy transition, and importantly for us as owners, building slack into their network to better absorb disruptions. With that in mind, let’s move on to the next slide.

Now that we have looked at the carriers’ positioning, let’s turn to supply and demand fundamentals, starting with the supply side and then the trade growth outlook. The first graph on the left shows the order book, and what stands out is that it’s heavily geared towards the larger vessel sizes. In contrast, with the 1 to 6,000 TEU segment, the segment in which we are active, more than 800 vessels are over 20 years of age. This aging fleet means we expect a need for additional tonnage in the smaller sizes going forward, especially to serve regional and niche trades. The second graph on the right-hand side highlights the trade growth outlook. There are three key drivers here. First, stronger GDP growth in emerging markets compared to advanced economies will underpin demand.

Second, the diversification of sourcing strategies, companies spreading productions across multiple regions will continue to drive robust volume growth. Third, intra-regional trades remain critical. In fact, 98% of vessels deployed in these trades are smaller than 5,100 TEU, reinforcing the need for smaller ships in the global fleet mix. When we look at supply and demand together, the picture is clear. While the order book is concentrated in larger vessels, the aging smaller fleet and strong intra-regional demand point to a structural need for renewal in the mid-size and smaller sectors. As we look ahead on slide 14, the market continues to be shaped by a range of uncertainties. These challenges also present opportunities. The very forces disrupting global shipping are acting as catalysts for innovation, differentiation, and also long-term resilience.

Looking at US policy, firstly, they continue to create a volatile container market environment and a volatile global economic environment in total. Ongoing uncertainties around tariff announcements mean trade flows and demand outlooks could be impacted at short notice. Secondly, the Red Sea situation. This remains fluid. Recent statements suggest carriers may resume transits, but timing is still uncertain. A safe passage becomes viable. Carriers are expected to gradually leverage this route to cut transit times and costs, which could lead to periods of excess capacity. Third, the intra-regional trades continue to show resilience. Container trades into emerging markets have recorded consistent volume increases in recent years. Looking forward, these trades are forecast to outperform mainland routes driven by regional consumption and sourcing diversification. Finally, the fleet picture. Despite an uptick in new build orders for smaller sizes, feeder vessels remain an underinvested category.

There simply isn’t enough replacement tonnage to keep pace with the aging fleet currently on the water. While uncertainty persists, these dynamics highlight where opportunities lie, particularly in regional trades and particularly in smaller vessel segments. With that said, let me turn to the next part of today’s presentation, the company outlook. I would like to start with slide 16 with our charter backlog. On the left-hand side, you can find some details on MPCC’s forward coverage, illustrating that we’ve advanced the coverage significantly for 2026 and 2027 and beyond, as also alluded to by Moritz. As furthermore explained in detail by Moritz, we have utilized the strong charter market during the past few weeks and months, in particular also concluding forward fixtures.

On the back of this, in combination with our new building program, we have added additional volume to our backlog, and we now have a revenue backlog of $1.6 billion and a projected EBITDA backlog, which stands at around $1 billion. In terms of charter coverage, the year 2025 has been covered already months ago, and we are now also well covered for 2026 with 92% and 2027 with 55% in terms of operating days. The degree of forward revenue visibility for the next years has, in fact, never been better than it is today. On the right-hand side, you can see how the revenue backlog has developed over the last 12 months in terms of backlog consumed and backlog added to the now $1.6 billion.

Taking rational and prudent decisions has been the backbone of how we navigate MPCC’s fleet in the market, and we will continue to do so in the best interest of our customers and our shareholders. Let’s look at some measures that we have taken in terms of enhancing our fleet, and also let’s spend some time on how we will move forward strategically. In the current market environment, global developments from geopolitical tension to economic uncertainty and regulatory changes, they continue to shape the industry. While these external factors remain significant, our priority is clear: to execute on our strategy and focus relentlessly on the areas within our control, doing so with discipline and precision. This slide illustrates the results of executing that strategy over the past couple of years.

We do believe that having an efficient, modern fleet that is commercially attractive to our customers, the liner companies, is the foundation for long-term success at MPCC. Consequently, over the past few years, we have taken a number of measures to enhance and renew our fleet. As explained by Moritz earlier, our approach to fleet renewal is strategic and multifaceted. Investing in our existing fleet on the water, including substantial retrofit measures, acquiring eco-tonnage in the secondhand market, and contracting new buildings with attractive charters to top-tier liner operators attached, ensuring prudent de-risking of our CapEx. At the top left of the slide, you can see how our fleet has transitioned from a purely conventional fleet to one where 75% is now of eco-nature. Fleet renewal is only one part of the story. We have also placed a strong emphasis on other aspects of the business.

On the right-hand side of the slide, you will see some KPIs that reflect the execution of our balance strategy. Revenue backlog has grown from $1.1 billion to $1.6 billion from 2021 to 2025. At the same time, during that period, we have distributed more than $1.1 billion in dividends. We have freed up collateral, ensuring high balance sheet flexibility and investment capacity. As mentioned, we have invested $1.2 billion in retrofits, eco-tonnage, and new buildings, improving the average age of our fleet significantly from a 2007-built year on average in 2021 to 2014 today. Last but not least, we have also reduced the CO2 intensity by 43% compared to the 2008 baseline. These results, all of these results actually demonstrate how disciplined execution and strategic investment have strengthened MPCC’s position for the long term.

Moving on to slide 18, at MPCC, proactive management is not just an operational principle. It’s embedded in our strategy, and it drives long-term value creation across cycles. Let me explain our thinking in that respect and how we approach things. Firstly, we maintain a clear strategic focus on the intra-regional container shipping market, where we see structural resilience and attractive fundamentals. Our approach to asset acquisitions is cycle-aware and risk-adjusted, ensuring we act decisively when opportunities align with our return profile. Fleet transformation has been accelerating through strategic new build projects and targeted retrofits, positioning us for efficiency and compliance. Today, 75% of our fleet on a TEU basis consists of eco-efficient vessels, including new builds, eco-vessels, and retrofits. This, we believe, will be a key differentiator in the years ahead. Our proactive chartering strategy with extensive forward fixings provides strong financial and commercial visibility, reducing volatility.

We have built a broad funding base at lower cost of debt, supported by debt-free vessels and moderate leverage. This preserves investment capacity, allowing us to continue fleet transformation and seize opportunistic acquisitions when markets present value. This proactive approach is anchored in our strategy centered around MPCC and our people on shore and at sea and designed to be a good partner to our key stakeholders. As you can see on the right-hand side, we have identified a number of key stakeholders, including our customers, to which we want to be and we will be a reliable and strategic partner. Having executed and offered various strategic transactions and structures for top liner operators recently, we believe we are on a good track. To financing partners, we are a conservative yet agile partner, maintaining moderate leverage while tapping diverse funding sources, innovative but disciplined.

To shareholders, we are a good steward of capital across cycles. With deep market insight and a prudent, adaptable capital allocation strategy, we focus on what we can control, executing rational transactions with attractive risk-return profiles, maintaining balance sheet flexibility. In short, proactive management is how we translate strategy into action, delivering reliability, sustainability, and value across all stakeholders. Before we open the floor for questions, let me summarize the key takeaways from today’s call. Firstly, Q3 2025 has been another strong quarter for MPCC, driven by high fleet utilization and solid operational execution. We have secured $1.6 billion in charter backlog, ensuring full coverage for 2025 and 92% and 55% coverage for 2026 and 2027, respectively. This provides a very good visibility and stability in an otherwise uncertain market. We continue to divest older vessels and renew the fleet, reinforcing our long-term competitiveness and sustainability profile.

Our approach combines recurring distributions with attractive growth opportunities, creating long-term value across cycles. While the market outlook remains uncertain, MPCC focuses on what we can control, leveraging opportunities, driving fleet transition, and maintaining a robust balance sheet. In short, we remain committed to delivering value for all stakeholders through our disciplined execution of strategic agility. With that said, let’s open the floor for questions. For the Q&A, we have the first questions trickling in as we speak. We’ll take them one by one. The first question is of operational nature. Can you provide some color on the increased vessel OPEX compared to the third quarter of 2024? Looking back at the third quarter of 2024, it was a bit of a seasonal outlier, meaning the OPEX was quite low.

Going back even further, second quarter of 2024, the OPEX was around $7,500, so a bit more in line with what we see today. It is true that the OPEX this quarter has been a bit elevated. That is for insurance reasons. There have been some deductibles, so to speak, one-off items that we expect to normalize in the remainder of the year. There is a question related to the Red Sea. What will be the impact of a Red Sea reopening on feeders specifically in your estimation? Thank you for your question. We touched on this to some extent in the presentation, but I am, of course, happy to elaborate in a bit more detail on the Red Sea situation.

Maybe starting from a high-level perspective, a potential Red Sea reopening would primarily affect mainland container services and larger vessels on Asia-Europe routes, while the direct impact on smaller container ships is likely limited. That is the direct impact, and that is basically linked to the type of vessels that go through the Suez Canal. Usually, indirect effects, however, could obviously arise through changes in transshipment hubs, in feeder schedules, in networks, in regional connectivity, as carriers then obviously adjust their networks back to a Red Sea passage open mode. However, our expectation is that normalization may lead to periods of overcapacity, of course, and that will influence the overall market and also the smaller sizes as well.

Having said that, the situation remains quite fluid, and while major liners have communicated that they have plans to cautiously resume Red Sea transits, we think this will take a couple of quarters to gradually unwind the rerouting of the Cape, which obviously is on the cards for 2026 in our view as well. It is about balancing security, insurance, network adjustments, potential congestions, etc. There are various factors to be taken into consideration. I think just to put a few numbers to it, the rerouting, as I said, has predominantly tied up the larger vessels. According to Clarkson, around 720 vessels with an average size of 14,000 TEU are still diverting via the Cape. Smaller vessels have really seen negligible impact to that effect. That is our assessment when it comes to the impact of a potential Red Sea reopening.

We have two similar questions on the asset disposal side. Is the sale of the Felicia still expected to go forward for $12.3 million? Could you talk a bit about what went wrong with the sale? Shortly before handing over the vessel to the respective buyers, a legacy case has resurfaced, prompting official authorities to put a maritime lien on the vessel, which essentially means prohibiting us from handing over the vessel to the buyers. Luckily, the sales contract is structured in a way that we have a relatively wide delivery window stretching well into 2026. As we speak, we’re working together with the official authorities to get rid of that lien and in parallel also, obviously, with the buyers trying to deliver the vessel to them at some point in the future.

For the time being, the vessel is on time charter, and us still being the owners, obviously, we benefit from that locked-in cash flow on that specific vessel. There is a question regarding the new builds. Could you talk about the purchase options for additional new builds? When do they expire? Do you think they are likely to be exercised? First of all, some of the options that we held have already expired, in particular related to the earlier new building orders earlier this year, while others run until early 2026. We are in active discussions on further new buildings, including related to the options. We believe the deals that we have done this year are attractive, and we are hence considering to possibly do more. That is kind of where we are on the options.

There is a, I would say, related question more on the fleet, and that is, should we expect additional sales over the coming quarters, or do you view rechartering as a more attractive proposition? I think it’s, as always, a bit of a balancing and in the end, a mix of a mathematical calculation and also strategic consideration when it comes to the fleet profile. We are and we have done a number of forward fixtures. We are, at the same time, also in discussions to do more forward fixtures. There is also a pretty healthy second-hand market with vessels actually not just being chartered out on forward positions, but also being possibly sold on forward positions. We are exploring both.

What I would say as a general comment is that looking at the charter coverage for next year, 92% and 27.55%, we do believe that in the coming weeks and months, unless the market completely goes sour, which again, we do not expect, we would see through a mix of vessel sales potentially, but also some additional forward fixtures that we will be able to increase the coverage, certainly for 2027, as a result of that. We do believe, and again, these decisions about chartering or selling are linked to condition of the vessel, design of the vessel, attached charter of the vessel, also to some extent dry dock cycles, etc. There are a number of factors that we always consider.

As you have seen over the last years, sometimes the decision is then to charter the vessel out and maintain the optional value at the end of the charter with more upside. Sometimes the decision is to sell. I think currently we are in a market where we’re both depending on the specific vessel options are available. I would not rule out that we will also be a seller of ships in the near future, but I will definitely also think that we will see more forward fixtures from us in the weeks and months ahead. We have a question on the vessel and the lifetime of vessel. Do you think old vessels will keep getting new classification as long as the market is good, or could future environmental demand force scrapping earlier, even if the market is good?

Could a 30-year-old ship get a new classification if the environment is not an issue and the market is good? I mean, theoretically speaking, even a 40- or 50-year-old ship can get a new classification. It obviously is an economical and a financial decision, as you say, if the market is good and the income justifies paying a high price, which it is today, bringing a vessel through the fourth, fifth, or even sixth dry docking cycle. We believe that age becomes less and less relevant. Looking at the environmental impact becomes more important. Why do we think that? Because we have, in our own fleet, for example, retrofitted 20-year-old vessels, making them 20% or even more than 20% efficient relative to peer vessels in that sort of age bracket. Age becomes less relevant.

With those retrofits, we are making sure that these vessels, despite the age, will be in compliance with the regulatory pressure going forward. It is a bit of a mix of financial view on the vessel and also the vessel itself being eligible for a retrofit. There are certainly vessels where a retrofit will not achieve the efficiency gains that we have seen on our vessels. Yes, we have retrofitted 20-year-old ships. Can they trade up until 30, 35 years? Yes, certainly. There will also be, obviously, a financial element to that calculation. There is another question, which is reserving some parts of dividend payout for investment has been a reason for share price drop in Q2.

Does it mean that at some point MPCC will return to pay high dividends again, or this will be followed as a strategic approach to reinvest more and add value to the company instead of being a sole dividend payer in future? Okay. It is basically a capital allocation question here, the way I take it. Let me say that I think share price drop in Q2, I would not solely attribute that to the adjustment of dividend policy. I think a lot is also sentiment-driven. I mean, Q2 was obviously the heydays of the initial period of the Trump administration with a number of curveballs and uncertainty on global trade, etc.

As far as the capital allocation question is concerned in terms of high dividends versus investments, the way we see it is that we have introduced now a balanced capital allocation or payout strategy, which provides return to shareholders, return of capital to shareholders, but at the same time allows the company to continue to develop and continue to create long-term value, which is in the best interest of the company, its stakeholders, and its shareholders. Therefore, we have reallocated and have decided that earlier this year to reallocate some of the otherwise dividend out amounts to also grow and invest. Had we just continued to pay out dividends, we would basically be unwinding a company that, in our view, has a very good value, has a very good value proposition.

I think in particular, also the transactions that we have concluded this quarter are a reflection of this. That applies to both the forward fixing as well as the new buildings and the fleet renewal. As we have discussed throughout the presentation, having a 75% kind of eco fleet on the water now, whilst operating on a moderate to low leverage scenario, we believe this is a very good basis for continuation of adding value and creating long-term value to shareholders. Never say never on dividends, but I think we now have a balanced dividend policy out there. For the time being, we see significant opportunities in the market. We believe the new buildings that we have done are very attractive, and we believe this is also attractive going forward to possibly conclude on a few more on that route.

We have a CapEx-related question. Can you add some color on the dry docking schedule for 2026, 2027 relative to 2025? Only speaking for the coming year, we expect to have 18 dry dockings next year, which is a relatively strong increase from the number of dry dockings that we have had this year, although it is slightly below the year before. For 2024, we had around 20 dry dockings. For 2026, we expect to have 18 dry dockings. It is quite an operational challenge making sure all the vessels are being docked properly. We have been there before, so we have our fair share of experience of managing as many vessels going through dry docks in Europe and the Far East. At least for the time being, there are no further questions. We would hold up the line for a bit.

Since there have been a number of questions raised and we do not see anything coming up, we would conclude the call at this stage. Thank you, everyone, for your interest and for the question and the engagement. Just to sum it up, we believe it has been a very good quarter in many aspects, in financial and operational performance, but certainly also in adding value for the future, providing the forward fixtures, some additional new buildings. We are excited about the next quarters ahead. Yeah, looking forward to staying in touch. All the best. Take care. Bye-bye.

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