Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- 2020 Bulkers Ltd (TTBKF, Financial) reported a net profit of $5.1 million for Q4 2024, with an EPS of $0.23.
- The company achieved time charter equivalent earnings of approximately $27,100 per day, significantly higher than the Baltic 5TC average of $18,300.
- Declared total dividends of $0.34 per share for Q4 2024, corresponding to a 12% annualized yield based on the current share price.
- The company has a competitive cash break-even point of around $11,500 per day, allowing it to sustain trading in a weaker spot market.
- 2020 Bulkers Ltd (TTBKF) has one of the youngest Newcastlemax fleets, with plans to upgrade vessels to enhance performance and exceed emission regulations.
Negative Points
- Vessel operating expenses were $4 million, with an average operating expense per ship per day of approximately $7,300.
- Net financial expenses were $2.1 million, primarily consisting of interest expenses.
- Interest-bearing debt stood at $112.5 million, with no amortization until maturity in April 2029.
- The company faces mandatory dry dockings for 25% of its fleet in 2025, which could impact operations.
- The coal demand on Capesizes slowed down significantly in Q4 2024, affecting overall market activity.
Q & A Highlights
Q: On the dry dockings, besides the obvious effects, are there any other P&L effects we should consider? Are there any cost savings associated with the upgrade, or is it more of a measure to stay compliant?
A: Lars Christian Svensen, Chief Commercial Officer: We are upgrading the ships with low-frequency paint, which will optimize fuel consumption. The budget includes these upgrades, and we expect better vessel performance. The only variable is the duration of the dry dock period, but we are on track with our projections.
Q: Regarding the coal market, is there a level where you expect to see a shift back to Capesizes from Panamaxes?
A: Lars Christian Svensen, Chief Commercial Officer: The Panamax rates in the Pacific have increased by 30% in a week, making it more viable to keep coal on Capesizes and Newcastlemaxes rather than splitting it to smaller sizes. It also depends on loading and discharging locations and voyage durations.
Q: Could you confirm whether the sequential increase in interest expenses is due to Q4 not benefiting from the accounting of the monetization of the swaps in early 2024?
A: Magnus Halvorsen, Chairman of the Board: Our interest rate swaps were terminated in March last year, and the gain was amortized through August and September. We now have a floating interest rate, and there are no current interest rate hedges.
Q: If a ceasefire agreement is reached in Ukraine, what are your expectations for the rebuilding? Do you anticipate any material impacts on Capesizes?
A: Magnus Halvorsen, Chairman of the Board: It's difficult to predict, but trades out of Ukraine might start before Russia. If grain elevators are operational, Panamaxes could benefit. For Capesizes, the impact would depend on iron ore exports from Ukraine, which could boost ton-mile scenarios.
Q: Are there any performance-enhancing measures planned for the vessels during dry dockings?
A: Magnus Halvorsen, Chairman of the Board: We are implementing performance-enhancing measures to maintain the standards of five-year-old vessels. However, this is more about maintaining current standards rather than achieving a change in premium.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
