Good afternoon. This is the Chorus Call conference operator. Welcome, thank you for joining the d'Amico Q3 and nine months 2019 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. If anyone needs 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, Chief Executive Officer. Please go ahead, sir.
Hello, good afternoon. Let's go through the executive summary of the first nine months of the year. Being nine months, you already know six months of it, but we pass rapidly through the whole thing. As you know, in March, this extraordinary general meeting authorized the board for an increase of its share capital with the issuance of new shares. This increase of capital has been 97.3% placed from the total number of rights were exercised, and the remaining part was placed on a private placement. The net result, and this is the new data, this posted a net loss of $32.5 million in the first nine months of 2019 versus a net loss of $41.2 in the first nine months of 2018.
If we exclude the non-recurring items from both years and the effects of IFRS 16 from 2019, this net result would have amounted to $15.1 million in the first nine months of 2019, compared to $44.4 million recorded in the same period of 2018. As you know, this has been, in these months, disposing of sales. Some of the sales have been straight sales of ships belonging to the joint venture, and others have been sale and leaseback, including the first JOLCO deal, which is a Japanese tax scheme that we did on one of our LR1 ships. We amended the financial covenant on all bank loans guaranteed by this because the application of IFRS 16 from January 1st of 2019, had a negative effect of 4.3 on this net worth to total asset ratio.
Based on this, we had a reduction of a minimum threshold ratio of 25%, when previously it was 35%. As far as the time charter equivalent, the daily spot rate has been $12,786 in the first nine months of 2019 versus $10,574 of the first nine months of 2018. Talking about outlook and time charter coverage, as you see, and as you certainly know, the market improved very well. Improved a lot, and is a substantial, let's say, improvement, which to my mind is not yet due to IMO 2020, but is due to a consequence, a domino effect of the blacklisting of the COSCO ships. This brought a very strong tightness in the crude market, and as a consequence of this, it spill over on the clean side. I leave now the floor to Carlos Balestra for the overview and key financials.
Yes, hello to everyone. Our fleet as of 30th of September consisted of 48 vessels, of which 32 either owned or on bareboat and 16 on time charter. We took delivery of our last new building on the 1st of October, which is not counted in these fleet numbers as of 30th of September. We have a very modern fleet, as you know, an average age of 6.4 years, 85% IMO class. We went through a very important fleet renewal program. We ordered 22 vessels since 2012, of which 10 MR, 6 Handys, and 6 LR1s. The new building CapEx as of 30th of September still included the last installment for the last vessel in our new building program, the other one that was delivered on the 1st of October. Our equity portion of that last installment corresponded to around $11 million.
The vessel is on a two-year time charter at a very profitable rate. We are going to be paying back this in around two years, thanks to this TC coverage. From 2020, we only have maintenance CapEx left. Relative to the previous presentation of the half year results, the outlay for these investments have been reduced. We now assume only $11.6 million. Before we were at around $14 million. The reason for the reduction is that we had a closer look at the actual repairs that our vessels need to undertake, and we identified some potential savings there. The program of the dry docks changed slightly with some of these events being postponed to 2021. In reality, we are most likely going to be selling some of our older vessels in 2020.
The actual outlay for this maintenance CapEx is going to be most likely substantially lower than the figure indicated here. We're going to be much lighter in terms of CapEx requirements next year. The same is true of debt repayments. We have stated several times, we had this facility with Intesa, which started off at $75 million, and we had to reimburse over 5 years, so $15 million of reimbursements plus interest every year. We finalized reimbursement of this facility in December this year, and thereafter therefore our debt reimbursements fall significantly. In 2019, we had $53 million in loan repayments, and for 2020, this should amount to $36 million. We assume that the balloons which will mature, the facilities that which will mature next year, we will be refinancing the balloons.
In most cases, these balloons are around 50%-55% of the vessel's value, so we don't foresee any problems refinancing the balloons. Going on to the next page. Just as a reminder that the fact that on the vessels we pursued sale lease backs for, we have purchase options, and these are very flexible structures, and they can be exercised from the first exercise date at any point in time with three months notice. Already four of these are, in theory, exercisable in 2019. Of all the options, some are already in the money and can be exercised. Some are theoretically in the money, and only one is actually out of the money. It's a High Priority, but it's only slightly out of the money.
A continuing recovery, we won't need too much of an upside to asset values, which have already been rising over the last year or so for this option to become in the money. Going on to the next page. Again, this hasn't changed much from when we last presented our first half results. We have fixed a number of our vessels this year at very attractive rates. The LR1s in particular at around $19,000 per day for one year. Also there was an MR2 fix for three years at $16,750. These period rates have been rising throughout the year as a testament to the very strong sentiment surrounding the sector, the very positive outlook, which is shared by both owners and charterers, oil majors, leading trading houses.
Today, if we were to fix one of our MR2 ECO vessels for one year, the rate would be around $17,500 per day, maybe even more, maybe even $18,000 per day. It's a further improvement relative to our last fixture. It goes without saying that those are very profitable rates for us. Our P&L breakeven this year was below $15,000 per day. Looking at our forward coverage and also comparing that with our historical coverage on the following page 12, we see that we touched a bottom in Q2 2019, where we had an average rate of $14,400 per day for our coverage, and then it starts rising, and also quite rapidly throughout 2020 and in 2021. If we look at 2020 as a whole, we have around 41% of our days, available vessel days covered at $16,000 per day, which is of course, a profitable rate for us.
The percentage of our ECO fleet has been rising and will continue rising over the next quarters. The chart at the bottom of this page here doesn't include vessel disposals, only the vessels which we already classified as held for sale, which currently are the Glenda Meredith and the Cielo di Guangzhou. As previously mentioned, in a stronger market next year, we are likely to sell some other of our older vessels. This percentage of fleet composed of ECO vessels is likely to rise faster than what we are showing here in this chart. On the following page, we show the fleet evolution, the average number of vessels we control. This will fall from an average of 48 vessels in Q4 '19 to around 39 vessels in 2021, as some of our TC-in vessels are redelivered to owners.
The average number of vessels in the spot market, however, rises significantly from 18 in Q4 2019 to 33.1 in 2021. The sensitivity next year for every $1,000 per day change in the TC equivalent earnings is now of $8.4 million. Last time we looked at this, it was $9.5. It came down slightly as we fixed more vessels on time charter. On the following page, we show how the costs have been coming down quite significantly, both on the direct operating costs of our vessels and the G&A.
In particular, the direct operating costs we have worked quite hard on, and we invested quite a lot on new technology, and we are managing our vessels now through a condition-based maintenance system, where we have some modern equipment which allows us to inspect several of the critical parts of our engine and determine exactly when they need to be replaced instead of relying on general statistics. Therefore, in some cases, we can delay significantly replacement of parts. In some cases, instead, we can anticipate problems and avoid an off-hire. It is a big change, and it has led to some very significant savings. In addition, also, we have been working hard to optimize our purchases, renegotiating contracts, standardizing parts that we purchase so that we can have volume discounts.
Thanks to the new building program that we just pursued, we now have a much more homogeneous fleet, which means that we can rely on the same type of spare parts for all our vessels. We have 22 vessels which are built from the same yard group, either in Korea or in Vietnam. That also helps us to obtain some savings. Of course, the young vessels are also cheaper to manage in that respect. The fact that our fleet has been recently renewed has helped us also to keep these costs under control. On the G&A, the biggest factor has definitely been the strong US dollar, but we have also been very careful in trying to obtain savings wherever we could on our G&A. We have reorganized some of our activities to obtain these savings.
Some additional savings in this respect might also be possible next year, although, of course, there is the currency effect, which is very important here. A lot will depend on how the US dollar will move next year, whether these savings can be maintained or not in full. Going on to the following page, the ratio of the net financial position to fleet market value has fallen from around 73% at the end of 2018 to 65%. Now, as of 30th of June, it was 66%. Despite the loss we recorded in Q3, this ratio improved slightly because vessel values continued rising throughout the quarter.
This is a much more acceptable ratio, but we seek to improve further, and it will be one of our priorities going further to further deleverage our balance sheet to position ourselves with a very strong balance sheet for the next cycle. Going on to the next page, we take a closer look at the P&L results. As Paolo previously mentioned, the loss in the first 9 months was of $32.5 million relative to $41 million in the first 9 months of last year. Excluding non-recurring items, the improvement is much more significant. It's minus $15 million relative to minus $44 million. For Q3 2019, excluding non-recurring items, we are at around minus $6 million relative to minus $21 million in Q3 2018. Also at the EBITDA level, the improvement is also very evident.
Even if we exclude the IFRS impact, which is of positive $26 million for the first nine months of 2018, our EBITDA would have amounted to $43 million, which is more than five times more than in the same period last year. Of course, this improvement is mainly attributable to the stronger spot markets. On page 17, we take a closer look at the results of our spot vessels as well as the vessels which are fixed on TC. We see that for the Q3 2019, the average result of our spot vessels was $11,600, which is weak. It is much better than in the same period last year when we averaged only $8,700 per day. Q3 is, of course, usually affected by the maintenance of refineries.
This year, this activity was a bit subdued relative to last year, as a lot of refineries stopped for longer in the spring in anticipation of IMO 2020. That is one of the reasons which explains the outperformance of Q3 '19 relative to Q3 '18. Overall, for over the nine months, we recorded a result of $12,800 per day on the spot market, which is an improvement of around $2,200 per day relative to what was achieved in the nine months of 2018. If we include the time charter coverage, which has been very valuable to us throughout these difficult years we have experienced, our blended result for the nine months of 2019 is around $13,700 per day. It's really around $1,000 per day lower than our P&L breakeven. We are not that far from our P&L breakeven.
Going on to the following page, we take a closer look at the result of our MR vessels relative to market benchmarks. As usual, we outperformed the Clarksons average. If we look at all our MR vessels on the spot market, if we look at only our ECO vessels, we outperformed significantly the Clarksons average, $15,300 per day was the result in the first nine months of the year of our ECO vessels. It's also quite interesting to note the outperformance of the ECO vessels relative to the conventional vessels, which was very significant this year. Going on to the market, I pass it over to Paolo again.
Thank you, Carlos. Let's look first of all to the potential upside of rates and asset values. If we take the last peak, we see that the one-year time charter and the spot rates today are 47% and 56% below that last cycle peak. We look at values. In that case, the new building, the five-year-old, and the 10-year-old vessel, the new building are 33% below the last market peak. The five-year-old are 44% below, the 10-year-old is 58% below. This does not mean that market will automatically go back there. That means certainly that there is a lot of room for improvement on both earnings and values.
As a matter of fact, on the rate slide, we can see how the one-year time charter for an MR non-ECO is improved up to more than $16,000 a day for a one-year charter today, which means you have to add a premium of $1,500 for an ECO ship. You are talking about $17,500, and I would even say that we are getting close to $18,000. The demand of the seaborne oil is increasing. It's been increasing all the way for the last close to 20 years. What is extremely interesting to my mind is the fact that on the year 2000, the oil products were playing only by 25% of the total moved were oil products. Today, this 25% became 35%. Of course, this is going to increase more and more due to the refining capacity, which is coming in force in these years.
We will see with another slide later on. We have an extremely surge in refining volumes, which is due of an anticipation of IMO 2020. The global refining throughput is expected to stay very elevated over the 2020 and this final part of 2019. Here, what I was saying before, we have a record growth in refining capacity in 2019. Only on 2019, is a forecast to rise by 2.7 million barrels per day. If we take the period between 2019 and 2021, is going to increase by 5.1 million barrels per day. Now, I remember that oil consumption in the world is around 100 million barrels per day. You have 5% increase on the refining side. This is a matter of three years.
The landscape of the refinery is changing, of course, and this is driving demand because, here again, we are moving away consumption from production of oil products. European refineries are, as you know, extremely old, and with the exclusion of few who did a big investment recently. They probably going to be extremely sacrificed by the fact that they produce a lot of high sulfur fuel. The CapEx and the price today is good enough to improve reserves and development of new oil, either on the shell side, even if it's partially recently slowing down, and also on the offshore side. Brazil is a little bit a proof of it. We have a very rapid growth of U.S. crude export, which is continuing.
I remember that U.S. crude export, they do not necessarily, because we always talk about China, but there are big players like Korea, Japan, that they are importing U.S. crude today. IMO 2020, a game changer. I think this is something that you know very well because we have been talking about this IMO 2020 for the last five years. It's something quite known. You know that we have to basically change our fuels, and this implies for those ones who want to be scrubber fitted to go for very extensive retrofitting, decreasing the fleet, decreasing the supply. This will, of course, create a better strength in the market. We see a lot of potential for floating storage because will be a moment where all these volumes have to go somewhere, talking about the high sulfur.
As a matter of fact, there are some bunker hubs, minor ones, which they are in difficulty to provide the high sulfur fuel because they are cleaning all their storage, and they are more heading to the 0.5% instead of keeping the 3.5%. One thing which is happening in this, I just read it yesterday, but it's quite interesting, is U.S. refinery are buying high sulfur fuel from Russia as a feedstock for their cokers in way to make gasoline and middle distillates out of it. High sulfur fuel is becoming also something new that it was not before and could end up in refineries for totally different reasons. It is not going to be only the utilities that are going to look to it, but also the sophisticated refineries. We have here a series of brokers' opinion.
I leave it to you to read it. They are all positive because it cannot be different, to be frank. The fleet growth is growing. The owners are very reluctant to place orders for two reasons. One, they want to see the market, where it goes. The second one, which I think is more important, they are, and we are, because we do the same job, extremely worried of the future technology, because as you know, 2030 is 12 years far away, and even 2050 is 30 years far away. It's very easy that you do something, building a ship today, you must be extremely careful on what fuel is going to win in the future, because you can have a modern ship getting obsolete very fast.
We have delays in scrapping, which they are going to happen because the older ships are getting more and more non-economic, so the high burners are going to be outplaced from the market. Even totally taking the new building values, you see that there is a bigger incentive still to stay on secondhand more than building a new ship, taking into consideration what I said before. That taking the new ship, you have to see what sort of engine you have to put on board. The market is clearly expected to be tighter for many elements, including the fact that many ships are going to retrofit the scrubbers. Also, I think we have finished our presentation.
There's only the last slide on the NAV.
Please.
We like to highlight there that, of course, our NAV after bottoming in December 2018, started moving up. It moved up between November 2018 and March 2019. Of course, after the capital increase, which was of around $50 million, it moved up more markedly between March and June to $285 million. It moved, however, up again to almost $300 million in September. I think for the first quarter in a long time, we have also on the NAV per share an improvement, a slight improvement. The NAV per share went from $0.23 to $0.24. Our share price has also moved up quite significantly here. As of 30th of September, it was still $0.10. I calculated this morning, our share price this morning was around €0.116 per share, which, in dollar terms is around a bit less than $0.13.
The discount to NAV was around 45%. Since then, I believe the share price has moved up quite a lot today. This discount is even smaller, but still very significant. We believe unjustified given the fundamentals of the company and of the sector. We are very positive also with regards to the future evolution of the share price of the DIS. I remember that in the past, we have also traded at a premium to NAV, so we don't see why that should not happen again. I think that the discount was maybe justified at the beginning of last year where there were concerns about the potential capital increase, dilutive capital increase.
Today, with the lighter debt and CapEx repayments going forward, the period contracts that we have in place at increasing rates throughout next year and in 2021, the prospects for the spot markets, which are unanimously, I would say, positive, both financial analysts as well as charters, oil majors, and owners seem to be very positive. The period rates at which we are fixing our vessels reflect that. We believe that this discount is totally unjustified and will definitely contract. Of course, the NAV, we should continue rising, also over the next quarter. I would say that's all. Thank you.
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 the touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. First question, sir, is from Luigi De Bellis, excuse me, from Equita SIM. Please go ahead.
Yes. Good afternoon to everybody. I have three questions. The first one, we have seen recently some pullback on crude tankers, the VLCC spot rates. Do you expect some correction from this very high level also for clean tankers? The second question, where do you expect spot rates to stabilize after this important spike of October and November? Where you are quarter to date in terms of spot rates? Final question on the positioning of your fleet trading route. Where are positioning now your vessels on the spot rates? Thank you.
As I said before, the reason why the market is what it is today is more due to the blacklisting of the COSCO fleet than of IMO 2020, because the effects of IMO 2020 were starting happening now. The blacklisting of the COSCO fleet and that 44 VLCCs have been put out of the market, basically. This tightened the crude oil market a lot, starting from the VLs and then went down to Suezmax and Aframax. As it touched the Aframax segment, many LR2s who are clean vessels and are of the Aframax size, moved from the clean trade to the dirty one. This start pulling also LR1s, created a tightening also in the clean market.
This is all due to the fact that a big piece of the fleet, of VLCCs fleet, but not only the VLCCs because COSCO has more different size of vessel, is being taken out of the market. Even if the blacklisting was hitting one single company, it was COSCO Dalian and another one. The traders were so afraid to get involved in sanctions that they just refused to touch the whole fleet altogether. This is why the market rise now. In all this, IMO 2020 is moving in. We start having more Middle East crude move, but is only on the beginning. The rise of the VL rates, the VLCCs rate, is being by far stronger than what happened on the clean vessels.
The correction on the VLCC can well happen and probably will be, I would say, irrelevant at the end of the day to a clean fleet. Well, still things have to happen. On top of that, demand will improve because, as we say, all this Middle East crude has to be moved. Now, if we want to set a rate where will be the market in the future, the paper market is talking more than $30,000 a day. That is the paper market. It is not mainstream. It is a different thing. I hope that this has been of some help.
Yes. Thank you.
The next question is from Matteo Bonizzoni of Kepler Cheuvreux. Please go ahead.
Good afternoon. I have a question as regard fleet rejuvenation or enlargement going forward. Basically you have reduced the net debt to fleet market value to around 65%, and in 2020 considering that the CapEx will be well below depreciation, you probably are going to go much below this level. What is your, let's say, midterm strategy in some years down the road? In other words, should we think that at some point you start to invest EUR 40 million-EUR 50 million per year? That is what you need to rejuvenate your fleet and to keep the fleet stable? Or are you considering at some point, and if and when, to go ahead with another major CapEx plan? What is your view or approach on this point? Thanks.
Yes, Matteo. Thank you for the question. Our number one priority now, as we mentioned in several occasions, is to continue deleveraging our balance sheet. We went through some difficult years now. We had to pursue a number of sale leaseback transactions, which increased our overall indebtedness. We want to, first of all, strengthen our balance sheet because in shipping, the important thing is to be in a position to be able to invest aggressively when the time is right. We cannot just pursue a strategy of constant renewal of the fleet. We need also to try to time the cycle and be able to then move in more aggressively when the values are right, when the prospects for recovery are right. I would say that our recent renewal program was very well timed.
It may be we received some vessels a bit early, and we were a bit caught out with regards to the sale of our older vessels, which we should have sold earlier. We were a bit stuck with them at a certain point because the liquidity for these vessels fell quite significantly, and it was very hard to do outright sales. That's why we had to pursue the sale and lease-back transactions to generate the liquidity we needed to finalize our new building program. Our number one priority will now be to sell some of these older vessels, which we would have sought to sell before, and we couldn't, at hopefully higher values with a stronger market next year. At the right time, with a stronger balance sheet, when we see a window, we will also consider new acquisition opportunities.
We cannot really tell you a figure now of how much we will be investing. It will be based on opportunities that would arise in the future.
Thank you.
Once again, if you wish to register for a question, please press star and one on your touch-tone telephone. As a reminder, please press star and one on your telephone. We're about to close the Q&A session. If you have any questions, please press star and one on your telephone. Mr. d'Amico, there are no questions registered, sir.
Good.
Would you like to make some closing remarks?
Just to thank everybody for being with us today, and I hope the next call will be even on a more positive tone. Thank you very much.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.