Good afternoon. This is the Chorus Call conference operator . Welcome, and thank you for joining the d'Amico second quarter and first half 2020 results conference call. As a reminder, all participants are in listen- only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Paolo d'Amico, Chairman and CEO of d'Amico. Please go ahead, sir.
Hello to everybody, and thank you for joining us to our usual call. Let's go straight to the results. On the first half of 2020, our company posted a net profit of $17,100,000. This is versus $24.3 million loss in first half 2019. Adjusted net result, excluding non-recurring non-cash items from both periods, we have $26.4 million in first half 2020 versus a loss of $9.2 million on first half of 2019. We have an increase of $35.6 million year-on-year. In Q2 2020, the company posted its best quarterly result since Q2 2015, with a net profit of $15.6 million versus a loss of $18.8 million last year. Here again, excluding non-recurring items from both Q2 2020 and Q2 2019, the net result would have been $20.1 million profit this year against a loss of $4.8 million last year.
The daily spot rate on the first half of 2020 has been $21,238 per day, against $13,326 achieved last year. It's a 59.4% improvement or if you prefer, a $7,900 per day improvement. In Q2 2020, this generated its best quarterly spot result since Q3 2008, with a daily spot average rate of $25,118. 92.1% higher than the $13,000 achieved on Q2 of 2019. 63% of the company days on first half 2020 were covered through time charter contracts, at an average daily rate of $16,042, against the coverage on the first half of 2019 of 47.3% coverage at $14,496. The company achieved a total daily average rate of $17,930 on the first half of 2020 versus $13,879 of last year, and $19,555 on Q2 2020 against $13,710 on Q2 2019.
The net financial position, excluding IFRS 16 to the fleet market value ratio, was 62% at the end of June 2020, versus 64% at the end of 2019, and compared with the 72.9% at the end of 2018. In April 2020, this announced that GLENDA International Shipping, a 50/50 joint venture with Glencore, signed a memorandum of agreement for the sale of the MR Vessel GLENDA Meredith. In Q2 2020, this transaction allowed Glenda to generate around $18.8 million in cash, net of commission. In May 2020, this announced that d'Amico Tankers signed a memorandum of agreement for the sale of the Handysize vessel Cielo di Guangzhou. In Q2 2020, this transaction allowed d'Amico Tankers to generate $8.8 million in cash, net of commissions. Both of these vessels were delivered to their new owners before the end of the first semester.
In July 2020, this announced that d'Amico Tankers signed a memorandum of agreement for the sale of two MRs, High Progress and High Performance. This further transaction will allow d'Amico Tankers to generate a total net cash around of $16.3 million in the second half of 2020. Talking about the market, the beginning of the year, the general idea and outlook was quite positive based on the fundamentals due to the implementation on IMO 2020. We were expecting a very good period. Unfortunately, the sentiment changed rapidly at the end of January when COVID arrived in China, COVID-19. Basically, killing the demand and refining activity of the biggest importer of crude oil in the world. In March, the OPEC members and Russia, they didn't agree on a price, this took basically, the oil market to a price war, which killed the price of a barrel at very low levels.
This sparked a rush from many traders and oil companies to try to stock as much oil as they could. As you know, the oil storage on shore is being rapidly filled up, and then they start moving at sea, which has been taking in a lot of crude oil tankers and also, product tankers who went on dirty. The storage moved also a lot on products. After this war, OPEC+, they agreed to reduce the production in two tranches, one in June, and another one should be now in July. This is already improving the price of a barrel. Certainly, for us today, we are very much in a different market since the last three, four months. We look at the end of the year in a very positive way because we think the fundamentals are still there.
Of course, we must see how COVID will, let's say, behave. If we are going to have a second wave, if we are going to have a lockdown again, I don't think so, and how all this will fall on our system. Said that, I leave the word to Carlos.
Yes. Good afternoon to everyone. Just a quick look at our fleet, which as at June 30th, was composed of 42 vessels. Fortunately, thanks to the strong markets over the last year or so, or at least strengthening markets over the last year or so, and very strong markets over the last six months, we had the opportunity to sell some of our older vessels, which we have intended to do for some time now. We found a much greater liquidity in the market over this period, so we managed to execute on this plan. Therefore, we have now a very young fleet, 6.8 years, of course, also young because of the important new building program that we executed between 2012 and 2019. Which entailed the delivery of 22 new buildings to us and over $750 million in investments just in terms of payments to the yards.
We are basically an MR player, with a presence also most recently in the LR1 segment that we built. They are all eco vessels and in the Handysize segment, too. Going on to the following page, the new building, the CapEx commitments. Important to highlight that they now don't comprise any more investments for new buildings. We are much lighter in that respect, and it's only maintenance CapEx over the foreseeable future. Also the second half of the year, in terms of maintenance CapEx, is much lighter than the first half. It's only around $3 million in investments against $7 million in the first half of the year. The CapEx commitments fall further in 2021, where we only have $5 million in commitment, in 2022, which is around $4 million.
Going on to the next page, the bank debt repayments, also are going to be lighter from this year, following the reimbursement of the Intesa facility which we had, which entailed $15 million in repayments every year, and that was in addition to the traditional bank financing we use. That has been fully reimbursed in December 2019. In terms of refinancing needs, balloons, upcoming balloons, we still have some here that we show in 2020, and those are relating to vessels which are in joint venture with Glencore through GLENDA International Shipping. We are in advanced discussions already, working on the loan documentation for the refinancing of these vessels. For the balloons which are here shown in 2021 of $26 million, we are in advanced discussions with some banks to refinance these, and we hope to finalize these in Q3 this year.
We would only have, if we manage to execute on this plan, the $65 million to be refinanced in 2022. We believe we are in a very strong position also in terms of bank debt repayments. In terms of purchase options, all the purchase options we have on the nine sale-and-lease-back deals we closed on are theoretically in the money, and six of these are already exercisable today. Another three will become so soon. One in September this year, another one in April 2021.
The fact that they are in the money doesn't mean we will be exercising them, because they would, in any case, entail quite high LTV loans which cannot be obtained today with traditional banks, and therefore they would require additional equity, which we right now prefer not to invest for this purpose, given the uncertainty regarding the timing of the recovery because of COVID. At a later stage, when we have more visibility on the firming market, that could be a potential use of funds for the cash that we have been generating this year, both operationally and through vessel disposals. Going on to the following page. The coverage we benefited from the very strong markets in Q2 this year, and to a lesser extent, also in Q1. We nonetheless kept our feet firmly on the ground. We realized that the strong markets was based on imbalances.
As Paolo was mentioning, we entered the year with very strong fundamentals and a very positive outlook for completely different reasons. Things changed fast with COVID. We continued taking contract coverage throughout Q2, when the markets were booming, and we managed to increase our contract coverage for the second half of the year to 57%, at an average rate of $16,400. This positions us very well to confront the weak markets we have right now, and particularly in Q3, we are 62% covered. It's almost 2/3 at $16,300. Hopefully, this soft patch will not last that long. The eco vessels in our fleet has been increasing as we have been selling the older vessels, as previously mentioned. Going on to the following page, we show the fleet evolution. This is, let's say, the organic fleet evolution.
If we don't do anything, and the fleet decreases naturally as some of these TC-ins terminate. The sensitivity to every $1,000 per day change in TC equivalent earnings we showed at the bottom right of the page, and it is actually quite low today for 2020. It's only $3 million. It rises considerably in 2021 to $10 million because we are still very exposed to the spot market in 2021, although with a slightly smaller fleet. Going on to the following page, the daily operating costs. They have been falling. This is for the half year 2020 compared to the half year 2019 and 2018. There was a slight improvement also relative to the first half of 2019. Of course, the biggest improvement was between the first half of 2018 and the first half of 2019.
Overall, we have an 11% decrease since the first half of 2018. It is due to the fact that we are managing a younger fleet, more efficient fleet, to changes in our purchasing strategy, and to the stronger dollar to a small extent, and also that we experienced during this period, mostly, I would say, to investments also in technology and the adoption of condition-based maintenance. Which allows us to considerably lengthen the life of spare parts, and bringing and generating important savings for us in this respect. On the G&A, we reorganized some of our activities, and we managed to achieve some savings. We also benefited to some extent of the strong dollar. We achieved the saving relative to the first half of 2018. There's an increase relative to the first half of 2019.
These are daily figures. The increase is mostly attributable to the fact that we are managing, in the first half of 2020, a slightly smaller fleet than we did in the first half of 2019. I can assure you, our G&As are very competitive on a daily basis still today in the first half of 2020 relative to most of our, or if not all of our listed peers. Going on to the following page. On the ratio of net financial position to fleet market value. This is also a key indicator we follow and we aim to keep within certain levels. It has been falling since December 2018 when it was at 73%. It fell to 64% by the end of 2019, also thanks to the capital increase that we pursued that year. It fell further to 62% as of 30th of June.
It benefited, in addition to the capital increase I mentioned, of course, from the strong operating cash flow generation in the first half of the year. We finished the first half with over $50 million in cash, which is quite a comfortable position to be in, given that our minimum liquidity covenants in our bank financings is of $25 million. As I mentioned, the sensitivity for every $1,000 per day change in the TC equivalent earnings is only around $3 million for the second half of 2020. In addition to that, as Paolo mentioned in the beginning of the presentation, in July, we signed MOAs for the sale of two additional vessels, which should bring in another $16 million to our coffers. We have very much stronger financial position and liquidity position generally.
Looking at the key line items of the P&L, as Paolo mentioned in Q2 2020, the profit of $15.6 million, excluding non-recurring items of $20 million, this figure is the strongest since Q2 2015. Of course, it was driven mostly by the very strong markets in the second quarter of the year. If we look at the first half, the bottom line figure of $17 million, excluding the recurring items, we are at $26 million . If we look in detail at the daily results of our vessels trading on the spot market and employed through TC contracts on page 16, we see that the average rate for the vessels operating on the spot market was of $25,000 in Q2, and that is the highest since Q3 2008. It is a very strong result.
Even if we look at the first half, we are above $20,000, we are at $21,200. Coupled with the TC contracts, which were just over 60% for Q2 on the first half, we have a blended average of $19,500 for Q2 and $17,900 for the first half 2020. I pass it over to Paolo again for the market overview.
Thank you, Carlos. Going back to the market, as I said, we started the year with a very positive note. Of course, unfortunately, at the end of the first month, the outlook changed immediately with COVID in China. Of course, the world has been in a lockdown. Half of the planet has been closed. The demand destruction of crude oil and refined products has been extremely important. It's been devastating. OPEC+, they didn't agree on the price. This took them to a sort of price war, and this sparked the market because there has been a big rush to storing oil and storing product. Not only, the crude oil market was so strong that many product carriers got there in way of taking better rates. A lso the product market [audio distortion]. We got very good rates for a certain period of time.
Of course, this demand was driven by the storage factor, basically, because the final demand, as we say, was not there. Once that the Russians and the Saudis agreed again on the cut of production, things went worse for us because the market went back where it really were the fundamentals of the market. There's been a large drop in oil demand, and of course, in refining throughputs. It looks like according to IEA, global oil demand is expected to fall by 7.9 million barrel per day, which means 92.1 million barrel per day in 2020. This, relative to last year, where we were close to 100 million. We think we will recover 5.3 million in 2021. The global refinery runs are forecast to fall by 6.4 million barrel per day in 2020 to 75.1 million barrel. This is the, let's say, yesterday's story.
This has been the impact of COVID on our system. Still looking at tomorrow and the day after tomorrow, we think that the fundamentals are there. We see that the participation, for instance, of products on the total oil seaborne trade increased from year 2000, was 25%, today is 34%. There is a long-term growth on refining capacity. We are talking about something like between 2020 and 2024, of 6 million barrels, and 75% of the 6 million barrels are, let's say, far away from Europe, and this is substantially Europe, which is the main diesel market. The ton mile elements should be more than positive, should increase, giving a better outlook for the product carriers industry. Against all this, we have a very low growth of a fleet. The supply is, number one, it's been postponed because during the lockdowns, ships are not being delivered, basically.
Now they are coming back, and even with very low scrapping, the fleet growth is expected to be only 2% in 2020 and 1.2% in 2021. We should even expect a reduction on the fleet growth already on the second half of this year. Due to many reason, one of these, the uncertainty of the future fuels, and let's say worries from the shipowners in general, there is very limited new building order. Putting all this together, we think that the fundamentals will play on our favor in the future. Of course, the big question mark is how big, how strong is going to be the second wave of COVID, if it's ever coming. Thank you very much.
Just a final look at the NAV evolution. Our NAV per share is of $0.25 on page 32. There is a small decrease relative to March 2021 when it was at $0.26 per share. The overall NAV, after peaking in March 2020 at $320, is at $313. This despite the profit, despite the cash generation, because of a softening in vessel values in the second quarter of the year, reflecting the much weaker markets in June this year, after the April and May peaks we experienced. Basically, that's it. Shares are trading at a huge discount to NAV nonetheless. We are in a, I believe, very strong financial and liquidity position. Therefore, the risks of dilutive capital increases, I believe, are very limited. Therefore, I believe also this discount is excessive.
It's not justified by the fundamentals, which, as Paolo exposed, although there's a lot of uncertainty around the short- term, and there's of course a period of adjustment to digest these excess inventories which have built up as a result of the imbalances related to COVID and to the flooding of oil in March by OPEC+. We believe that this process should not be very long. Half of the increase in floating storage since December was apparently already reabsorbed in a few months since the OPEC cut production. That is a very positive sign. Medium and longer term, we are very positive on the fundamentals, and therefore we don't feel this discount is justified. Thank you very much, and I pass it over to you for the questions.
Excuse me. This is the Chorus Call conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Matteo Bonizzoni with Kepler. Please go ahead.
Good afternoon. I have some questions. First one is what are you seeing on the asset values? Are you seeing some deflation in the transaction values? Yes or no? What are your expectation going forward? I would like to know as regards the next financial position, we have seen a nice deleverage over the last couple of quarters driven by low CapEx and also I think the asset disposal. If you can clarify how much was included already in first half and how much of the recently announced fleet disposal should be included in terms of cash in the second half. Should we expect net financial debt, excluding the IFRS 16, to be somewhat below or in the region of $500 million at the end of the year? Thanks.
I'll start with the second question. Regarding the CapEx and the vessel disposals, the cash from the sale of the Cielo di Guangzhou and the GLENDA Meredith are already part of our first half financials. The cash that we would receive on the sales of the High Progress and High Performance of around $16 million will come in the second half of the year. It is possible that we might even sell another vessel before the end of the year. Regarding asset values, they have come down, but not in a considerable way. We are still able to sell vessels at quite attractive values. Let's remember that they had increased considerably. We have a slide in the presentation where we look at this. We can go back to that particular slide.
It's on page 18, there we show the five-year-old and 10-year-old asset values. We see that there is this decrease for the 10-year-old asset values from $20 million to $18 million. It's a 10% decrease. We see the similar decrease also for the five-year-old vessels from $31 million peak around February, March to $27.5 million. $27.5 million is still considerably higher than the $22 million that we had in October 2016, and $18 million is also considerably higher than the $15.5 million we had in October 2016. Yes, there was a correction. It reflects the weaker spot markets, the uncertain outlook over the next 12 months. The fact that the asset values haven't increased by more is a testament to the fact that most players still are very confident in the medium to longer term fundamentals of the sector.
People are not ready to just sell at any price, and they want to hold on to their good assets t o be able to participate in the recovery when it happens, which will be driven by the same fundamentals which were driving the recovery until the end of last year, beginning of this year, before COVID-19. If anything, I think that in terms of order book, things improved further because as Paolo mentioned, there was very little demolished over the last 18 months. Therefore, the potential for demolition increased going forward. We have today, the proportion of the fleet that is greater than 20 years is higher than the order book. That is a very good sign.
Thank you.
The next question is from Massimo Bonisoli with EQUITA. Please go ahead.
Yes, good afternoon. Thank you for the presentation. A couple of questions. One, regards the coverage of your spot rates. Considering the increase in the coverage that you have taken, thanks to the quite high prices on the market. What are the level of prices that would trigger further coverage in the future, in the sense that now the market seems to be less strong than before? The second question is, considering the deleverage of the balance sheet that took place over the past few quarters, what is the leverage range that you would consider as normal in your balance sheet and maybe that could trigger some dividend payment going forward? We have been talking about this in Q1. I don't know if this has changed over the past quarter.
Talking about the rates. Today rate for a one-year period, it should be around $13,000-$14,000, let's say, for a non-eco ship. It should increase, let's say, by close to $1,000 for an eco ship. This is a ballpark. Going longer, is it possible because there is no market today? There have been some tentative deals for three years, but, of course, due to the uncertainty, charterers, they moved away, and they are not taking position longer than a year time. As far as the second question, excuse me, can you repeat it?
In the sense that, you have been deleveraging the balance sheet recently. Now you have a leverage that is quite sound considering the fleet available. Do you consider this leverage already a level in which you can start paying dividend going forward? Let's say you wait for the deleverage to consider dividend payments?
No, we think that we are still on our deleverage mode. That is our opinion, because we want to have a very prudent approach to the future.
Okay. Thank you.
Thank you.
As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is from Daniele Alibrandi with MainFirst . Please go ahead. Mr. Alibrandi, maybe your line is on mute. We cannot hear you.
Can you hear me?
Yes, now we can.
Okay. Thanks for the line. Just a question actually on how do you see EBITDA evolving in 2020? We've seen the market is not as buoyant as in April, May. Rates have a little bit come down. Just how do you see, maybe if you can give us more visibility now that we are in early August, maybe on the EBITDA also, consensus is quite wide, around $140. Do you still see maybe this level is achievable? Thank you.
Unfortunately, today, to look at the future markets, you must be more a virologist than a shipper. It's complicated to say. We had just one moment in South America a few weeks ago where there's been a lack of tonnage. Market moved immediately from $10,000 to $20,000 a day for one ship on one trip. There is a sensitivity in the market, which is very strong. Means that the product has to be moved, and in some cases, to be moved fast enough at any cost. Difficult to say what is going to happen tomorrow. If we keep going the way we are, we are seeing anyhow some improvements coming in. Of course, today, take for instance, this month and next month, this should be the gasoline period, because America should be driving its cars on the streets.
Unfortunately, they are not, because they are, most of them, locked down at home. As you see a movement or in a state you have more people coming out, you realize immediately, there is a very strong sensitivity, you realize immediately the demand. I think it's, to me, impossible to give a serious answer to what is going to happen from here to the end of the year. The only thing I know that this COVID is going to finish, then our forces will come in, and the fundamentals, as we say, are there and are positive.
Thank you.
Once again, if you wish to ask a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Gentlemen, would you like to add any further comments to conclude the conference?
Not really. Thank you very much to everybody.
Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.