Good day, and thank you for standing by. Welcome to the 2020 Bulkers Ltd E arnings Call for the Q2 2022. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you will need to slowly press star one and then one on your telephone. You will then hear an automated message advising that your hand is raised. Please note that today's conference is being recorded. I would now like to hand over to your speaker, Mr. Magnus Halvorsen. Please go ahead.
Thank you, operator. Welcome everyone to the Second Quarter 2022 Earnings Conference Call for 2020 Bulkers. As usual, I'm also joined here today by our Chief Financial Officer, Vidar Hasund. Before we start the presentation, we would like to remind you that we will be discussing matters that are forward-looking in nature. These forward-looking assumptions are based on the company's current views with regards to future events, and they're subject to risk and assumptions that are subject to uncertainties. Actual results may differ materially. With that, I'll move over to the highlights for the quarter. 2020 Bulkers generated a net profit of $12 million in the second quarter, which is up from $5.9 million earned during the first quarter. With that, we continue our track record of having been profitable every quarter since we got our first vessel in operation during Q3 2019.
We continue to outperform the Capesize index and achieve time charter equivalent earnings of $32,300 per day. This compares to the Baltic Capesize Index, which was around $21,600 per day during the second quarter. For the months of April through June, we announced a total of $0.52 per share in cash distributions. In April 2022, the company transferred eight Newcastlemax vessels that we own or operate from subsidiaries domiciled in Liberia to Norwegian limited liability subsidiaries. I'll go over to some of the key subsequent events so far in the third quarter. We have achieved time charter equivalent earnings of around $30,300 per day gross. On August 9th, the company transferred its tax domicile from Bermuda to Norway.
On August 10th, Neil Glass and Mi Hong Yoon resigned as directors of the company, while Viggo Bang-Hansen was appointed as a director. The board and the company would like to thank Neil and Mi Hong for their good contributions for the company for the time they were directors. With that, I will leave it over to Vidar.
Thank you, Magnus. 2020 Bulkers reports a net profit of $12 million for the second quarter of 2022. Operating profit was $14.5 million, and EBITDA was $17.4 million for the quarter. Earnings per share was $0.54. Revenues were $23.3 million for the second quarter, and average time charter equivalent rate was approximately $32,300 per day gross. Vessel operating expenses were $4.3 million, and the average operating expenses per ship per day was approximately $5,900 in the second quarter. G&A for the second quarter was $1.3 million and include approximately $0.3 million in fees, including connection with the transfer of vessels from Liberia subsidiaries to Norwegian subsidiaries. 2020 Bulkers is charging management fee to Himalaya Shipping on a quarterly basis.
Interest expense was $2.3 million in the second quarter. Shareholders equity was $154.6 million at the end of the quarter. Interest bearing debt was $228.7 million at the end of the second quarter, down from $232.4 million at the end of the first quarter. Cash flow from operations was $14.5 million for the second quarter. Cash and cash equivalents were $18.4 million at the end of the quarter. The company declared total cash distributions to shareholders of $0.52 per share for the months of April, May, and June 2022. That completes the financial section. Now back to you, Magnus.
As you know, 2020 Bulkers has a policy to pay free cash flow back to shareholders on a monthly basis, and we have now returned free cash flow to our shareholders for 25 consecutive months, which is every month since we had the full fleet delivered. Our Q2 cash distribution was $0.56 per share, equal to an annualized yield of around 20% based on yesterday's closing price. With a fleet that's a bit more than 2 years old on average, we have to date returned 72% of total paid in equity back to our shareholders. As you can see from this slide, we have over time shown a strong commercial performance relative to the time charter equivalent earnings results announced by our public peers who report separate earnings for Capesize and Newcastlemax.
In fact, we have outperformed all peers during each quarter except from the first quarter this year. This confirms the attractive performance of our scrubber-fitted Newcastlemax. The following slide looks at our cash generation available for distribution under various rate scenarios. For the balance of 2022, we have two ships fixed at healthy rates and six ships on index-linked charters.
The current FFA curve for September through December sits around $16,000 per day, which for illustration purposes could generate an annualized distributable cash flow of around 14 NOK per share, which would equal an annualized yield of around 12%. It's also worth noting that this slide illustrates our resilient cash break-even, where thanks to our overall low cash break-even, combined with two ships fixed at healthy rates, we generate free cash flow available for distribution as long as the Capesize market is above $5,000 per day for the six ships on index-linked charters. We find this to be very competitive and also highlights the attractive risk reward in our company structure. Looking at Capesize spot rates year-to-date, after a decent start to the year, we have seen a correction during the third quarter, a correction that's somewhat unusual from a normal seasonal perspective.
The correction in rates is mainly driven by a significant unwinding of congestion and fleet inefficiencies, where the percentage of Capesize vessels in port have fallen from a historical high at the beginning of the second quarter, down to current levels, which are back to the normal range seen prior to the COVID disruptions. Although overall trade volumes have been healthy, ton-miles have been negatively impacted by the weak Brazilian exports, which are down 3.6% year-over-year. Now taking a look at the steel market. Global crude steel production was 1,003 million tons for the period ended January through June 2022. This is down around 5% compared to the same period in 2021.
Chinese steel production for the same period fell by 6% year-over-year, with June production showing a somewhat better trend, only down 3% year-over-year. This is compared to earlier in the year when production was running at rates around 10% lower than the similar levels seen in 2021. In spite of the slowdown in the Chinese economy and implicit steel demand, Chinese steel rebar inventories are currently 20% below the level seen at the same time last year. We have, however, seen a correction in prices, with Chinese steel rebar prices down around 10% year-to-date. Following the continued weakness in the Chinese economy, China continues to increase infrastructure stimulus by increasing and bringing forward quotas for issuance of local government special infrastructure bonds.
The issuance of such bonds were more than 3 times higher during the first half of 2022 compared to the first half of 2021. As you can see, Chinese infrastructure and manufacturing fixed asset investments have increased on a year-on-year basis so far in 2022, while real estate fixed asset investment is still lagging. As a response, Chinese regulators have recently announced that they will provide liquidity to support selected private developers through the underwriting of new local bonds. Taking a look at the iron ore market. Total iron ore trade is relatively flat year-to-date compared to last year globally. While ton-miles have been negatively impacted on a year-on-year basis given the decline in Brazilian long-haul volumes.
Chinese iron ore imports were down 3% for the period from January to July 2022, but they have shown a more positive trend recently, with imports in July up 5% from a year earlier. For the first part of the year, we saw Chinese inventories growing in nominal terms as well as in days of consumption. However, inventories drew down sharply during the second quarter before building back somewhat over the last few weeks. They currently sit at levels around the average seen since 2017. As we have discussed in the past, the Capesize market has historically shown a strong correlation with Vale's production and Brazilian exports, which are typically higher in the second half of the year. So far this year, Brazilian exports are down 3.5% compared to the same period last year.
Vale has recently lowered their production guidance to 310-320 million tons for the year, down from their prior guidance of 320-335 million tons. Vale's updated guidance still implies a significant uptick in production volumes for the third and fourth quarter this year compared to the first and second quarter. We expect this will give some support to the market if it materializes. As you very often hear that Vale's guidance is not to be trusted, we have here included an overview of their track records in meeting their one-year prior guidance. As you can see, Vale production has historically come in fairly close to their guidance given one year earlier, except from the years 2019 and 2020, where they saw a negative impact from the Brumadinho accident and the following repair and maintenance.
Now looking at the supply side, the order book keeps shrinking and is now down to 5% of the existing fleet on order. This, in combination with Chinese yards essentially having very little capacity for new orders between now and the end of 2025, gives us great visibility that we are facing three years with the historically low fleet growth. Deliveries of Capesize will drop to approximately 10 million deadweight tons this year, down from 18 last year and 25 million in 2020. The order book for 2024 and 2025 is very light at 5.7 million deadweight tons and 0.4 million deadweight tons respectively. Scrapping year-to-date has been relatively modest, with 10 vessels totaling 1.67 million deadweight tons scrapped. This is down from 3.1 million tons during the same period last year.
If the somewhat weaker spot market persists, we could expect to see an uptick in scrapping, particularly given the upcoming environmental regulations. We have talked about these upcoming regulations in the past on previous calls, and to make it short, EEXI and CII comes into effect on January 2023, and they will give modern fuel-efficient tonnage, such as 2020 Bulkers fleet, a benefit over older legacy tonnage. Lastly, we'll conclude by giving a quick summary of the highlights in our investment case. We have a modern fleet of eight Newcastlemax vessels, all scrubber-fitted with an average age of around two and a half years.
Two of the vessels are fixed on fixed rates until the end of the year at $31,600 per day, plus scrubber profit shares. We have six ships on indexing charters that we converted to fixed rates on the basis of the FFA curve. The FFA curve implies TCE for a scrubber-fitted Newcastlemax of around $24,000 per day for September through December 2022. This compares to our cash break-even budget of around $15,300 per ship per day. We pay everything we earn back to shareholders as monthly distributions, where we so far has paid back 72% of the paid-in equity in the company. Lastly, we are looking at the most favorable supply side dynamics in more than 30 years.
With Chinese yards filling up even further, we feel that, like, that runway is becoming more secure and longer as we go on quarter- by- quarter. With that, I'll leave it open for questions.
Thank you, sir. As a reminder, if you wish to ask a question, you will need to slowly press star one and then one on your telephone and wait for your name to be announced. Once again, it's star one and then one on your telephone and wait for your name to be announced. We are going to take the first question. Please stand by. The first question comes from the line of Frode Mørkedal from Clarksons. Please ask your question. Your line is open.
Thank you. Hi, Magnus.
Hi, Frode. Hello.
Hello. I know you touched upon it already, but maybe you could just summarize your thoughts on the recent spot rate decline and what's going to move it higher in the near term.
Well, I think if you're gonna give one main reason for the decline, which frankly I think has caught also and many others by surprise, is the fact that largely all fleet inefficiencies that I guess you could attribute to COVID disruptions seem to have been dissolved over a quite short period. I think one part of it probably relates to the fact that Australia ended their 14-day quarantine, which had created some additional waiting time on that side. I think the other maybe more surprising part is in spite of China's zero COVID policy, we are seeing very efficient turnaround times at Chinese ports where a Capesize or Newcastlemax typically can arrive and discharge turnaround in 4 days these days.
I think that's obviously hurt the market. I think now we are at least back to, as you see from that graph earlier in the presentation, the sort of mid to slightly below mid-range from where we were pre-COVID. This I don't see as a particular risk at least going forward. Now I guess it's a more normal picture where any disruptions create a risk to the upside. I think when it comes to volumes, you know, that is not the main culprit in our view. I think we have some negative impact from the lack of export performance from Brazil. I think we don't know.
If you're going to trust what Vale says, you know, we should expect a pickup which would be in line with normal seasonality and all history shows that has an impact on rates. That could be one of the things driving the market going forward. I think other things that's worth noting is because of the weather season and maintenance, bauxite exports out of West Africa, which is a growing trade for Capesize and Newcastlemax, has been a bit lower but expected to pick up again in Q4. We'll see. We feel at least the...
I don't know if black swan is the right one, but we certainly didn't see the unwinding of congestion coming now given the zero COVID policy still in China. At least now it's happened and that's out of the market. I think those are kind of the shorter term considerations. Longer term, I think we do have this very supportive supply side picture where the yards are just getting continued to be filled up largely with container orders. There is actually very, very little capacity in the market from the yards before 2026. I mean, there's probably a few slots left in 2025, but not many.
I think in the longer term, we're going into a few years now with increased environmental regulations, and particularly from 2024 onwards, very low fleet growth. I think that gives us some comfort. Of course, another thing that could support the market, we're seeing this I mean, China, the Chinese economy is definitely struggling as we know. We also know China's historical response has been with stimulus. We are seeing that stimulus increasing. We think that will have an effect on infrastructure spending. There was some news out yesterday which I mentioned on the call as well, that the property sector is what's struggling the most. It seems like government entities are trying to step in with some credit support.
Whether that will be a game changer overnight, I don't think so, but it seems that they're actually there to support it and that we could see some marginal improvement.
Perfect. That's good color. Second question I had is, well, you have a great dividend policy each month, but if you look at the current share prices versus the NAV, would you also consider share buybacks, or is dividend just wholly, so to speak?
I think our main way of returning capital is definitely these cash distributions that we are making. Of course, we are out there to look at what makes the most sense in terms of creating shareholder value. That's a board decision that will have to be taken at some point. If the discounts get too wide between underlying values and the share price, it would be natural for the board to discuss buybacks. I don't think I can give any more color than that, but we are committed to our capital return policy, mostly through cash distributions. Of course, I mean, if we come to a point where the board thinks it's better to use some funds.
I mean, in theory, yes, that's not something I wouldn't rule out.
Okay, that's good. Final question is, maybe you can just talk about the decision to move tax domiciles to Norway. You know, pros and cons, if there are any cons. Thanks.
No. I think I can tell you it's been a very extensive process where the board has used for a longer period of time what we think are better advisors locally and internationally. I don't think I'm gonna go into kind of pro and con analysis, but I think if the conclusion is clearly that we think this is for the long-term benefit of the company. As part of that, we've also done an analysis of our shareholder base, and we believe that it should be neutral or for the benefit of the majority of the shareholders. We believe that the Norwegian tonnage tax scheme offers a very transparent and efficient structure for shipping companies such as ours.
We believe that's a good structure to be in.
Great. At least the Norwegian investors avoid double taxation, so that's good. Thanks. That's all I had.
Thank you. Any more questions?
Once again, if you do have any questions or comments at this time, please slowly press star one and then one on your telephone. That's star one and then one. Thank you. We have no further questions at this time. I'll hand back the conference to you for any closing remarks.
Okay, thank you. I want to thank everyone that dialed in, and if someone has any questions, always feel free to reach out. Thank you, everyone. We'll conclude the conference call.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect your line. Speakers, please stand by.