Welcome to the 2020 Bulkers Ltd. Q2 2025 Presentation. For the first part of this call, all participants are in a listen-only mode. Afterwards, there will be a question and answer session. To ask a question, please press five star on your telephone keypad. This call is being recorded. I will now turn the call over to CEO Lars-Christian Svensen. Please begin.
Thank you, operator. Welcome to the Q2 2025 Conference Call for 2020 Bulkers Ltd. My name is Lars-Christian Svensen, and I'm joined here today by our CFO, Vidar Hasund. Before we begin the presentation, I would like to remind you that we will be discussing matters that are forward-looking. These statements reflect the company's current views regarding future events and are subject to risks and uncertainties. Actual results may differ materially from those anticipated. With that, I will now proceed with the highlights of the quarter.
We reported a net profit of $5.8 million and an EBITDA of $9.6 million. Earnings per share was $0.25 for the second quarter. The gross time charter equivalent earnings for the quarter were approximately $29,700 per day, including gains on realized forward freight agreements. We declared a total of $0.37 in dividends for the months of April until June 2025. The dry docks for BULK SAO PAULO and BULK SANTOS were completed at a total cost of $2.6 million, which completes the company's dry docking commitments. We also realized the gain on FFA of $1.4 million for Q2 2025. In subsequent events, we entered into hedging transactions through FFAs, securing an average fixed rate of approximately $33,700 per day for two of our six vessels from 1st of August until 31st of December , 2025.
We announced this morning an achieved time charter equivalent of about $31,700 per day and a dividend payout of $0.15 per share for the month of July. With that, I will now pass the floor to Vidar.
Thank you, Lars-Christian. 2020 Bulkers Ltd. reports a net profit of $5.8 million and earnings per share of $0.25 for the second quarter of 2025. Operating profit was $7.2 million and EBITDA was $9.6 million for the quarter. Operating revenues and other income were $14.7 million for the second quarter. The average time charter equivalent rate was approximately $29,700 per day gross, including realized gains on forward freight agreements. Vessel operating expenses were $3.8 million, and the average operating expenses per ship per day were approximately $7,000 in the second quarter. G&A for the quarter was $1 million. 2020 Bulkers Ltd. recognized approximately $0.4 million in management fee recorded as other operating income in the financial statements. Interest expenses were $1.9 million for the quarter. Shareholders' equity was $149.7 million at the end of the quarter.
Interest-bearing debt was $112.5 million at the end of the second quarter and is non-amortizing until maturity in April 2029. Cash flow from operation was $3.8 million for the quarter, net of $2 million paid for dry docking. Cash and cash equivalents were $14.6 million at the end of the quarter. The company declared total dividends to shareholders of $0.37 per share for the months of April, May, and June 2025. That completes the financial section, and now back to you, Lars-Christian.
Thank you, Vidar. 2020 Bulkers Ltd. has six scrubber-fitted Newcastlemaxes with an average age of about five years. All vessels are time-chartered out on index-linked period contracts to solid counterparts. At any given time, we have the option to convert these vessels from index-linked to fixed rates using the forward FFA curve as a price metric. This structure has been an integral part of the company's commercial strategy, which has led us to a net profit every quarter since inception in 2019. Not only have we been profitable, but we have also paid out dividends to the shareholders in 62 consecutive months, which equals 154% of the total paid-in capital. We also have the industry's lowest cash break-even, which I will elaborate on in the next slide. With our cash break-even of $11,500 per day for the entire fleet, we like to view the company as bulletproof.
Due to our vessels' superior intake and speed design compared to a standard cape-size vessel, we only need a cape-size index to be above $7,500 a day to make money. As you can see from the historical market graph with the current company structure, 2020 Bulkers Ltd. will generate a profit and dividend capacity in almost any market. We take pride in our low cash break-even, but even more pride with our structure linking it to a healthy dividend potential. If the cape-size index is $20,000 per day, we will yield 12%. If the cape-size index is $30,000 a day, the company will yield about 22%. When the cape-size index is $40,000 a day, 2020 Bulkers Ltd. will yield about 32%. Now let's move over to the market section and where we are as we have entered the second half of the year.
The cape-size index is currently higher than the average from 2015 to 2024 and also higher than in 2023 and 2024, respectively, during the same period. The largest drivers have been increased bauxite exports from West Africa to China, but also strong iron ore exports from Brazil to China. Both legs are long-haul routes, which has provided a healthy market level and increased ton -miles. The ton -mile story continues to move in the right direction after a significant drop at the end of Q4 2024. Ton -mile in Q2 2025 for cape-size was close to the record period in Q2 2024 with a marginal decrease of 1.3%. Bauxite from Guinea has surpassed positive expectations every single month and was up 27% year -over -year. Iron ore was up 1%, but coal was down 40% year -over -year.
Chinese total imports were up 3%, and iron ore exports from Brazil increased by 4% year-over-year. In Q4 2024, we saw a decline in coal transported on cape-size and Newcastlemax, which led to weaker freight rates. Even though we're still not close to transport the pre-Q4 2024 coal volumes on the larger sizes, we have seen more coal come back on the capes and Newcastlemaxes in the last quarter. This is due to more activity on the grain trade for the Panamaxes, which has left more coal for the capes and Newcastlemaxes. We also see that for the first time in history, more bauxite is transported on the larger sizes than coal, which marks an important shift in trade dynamics. China's appetite for high-grade iron ore has exceeded even last year's record import numbers with a 4% increase year-over-year.
Strong exports from the Atlantic over the summer suggest that we have entered the iron ore season earlier than in previous years. Chinese iron ore inventories are down approximately 10% year-over-year, which indicates a healthy iron ore demand scenario. It's also worth mentioning that India will purchase 10 million tons of iron ore from Brazil in 2025, which takes the country one step further to becoming a net importer of the commodity, which gives us yet another frontal leg to stand on for the larger sizes. In the previous slide, we discussed short-term iron ore demand, which showed increased demand and decreasing Chinese iron ore stockpiles. Taking a deeper dive into the long-term developments, we note that domestic iron ore production was down 3% year-over-year in 2024 and 3% year -to -date in 2025.
This may be another signal that Chinese domestic iron ore production is becoming less economical and reduced due to its low Fe content estimated at around 20%. High-grade iron ore, often with an Fe content of 62% or higher, obtained from Brazil and other destinations, is preferred. This aligns with the bottom right graph, which shows that Brazilian iron ore has been taking a larger market share in China over time, which is naturally positive for ton miles. On the topic of high-grade iron ore, the first volumes from the Simandou mine in Guinea are expected to be exported in November 2025, according to latest updates. Over a 24-month ramp-up phase, the mine is targeting 120 million tons of high-grade iron ore per annum for the market.
With the additional Vale capacity increased by 2026, we expect a total of 170 million tons of high-grade iron ore from the Atlantic, most of which will be exported to China. As shown in the right graph, comparing these volumes to the record low order book, the supply story strengthens further. The bauxite volumes have been extraordinary so far this year, a 27% increase in ton miles year-over-year, and the world seaborne bauxite trade has been adjusted up another 15% since the second quarter in 2025. As communicated in previous reports, we believe this commodity is and will continue to be a driving force in cape-size and Newcastlemax ton -mile and increased freight rates in the coming years. We continue to highlight the historically low order book. We are at the 25-year record low, standing at 9.4% of the total existing cape-size fleet.
Active shipyards are down 60% from the peak in 2008, making it challenging to build any meaningful fleet capacity that could disrupt the favorable supply dynamics over the next few years. Asset prices remain at a strong level, and we believe the prices will remain high due to the limited yard capacity and few modern cape-size Newcastlemax tonnage available compared to the total fleet. The visibility of the limited vessel supply capacity remains, and we continue to thank other shipping segments for their new building additions, which makes it harder to find available shipyards building capes and Newcastlemaxes. We still see a significant increase in dry docking due to mandatory special surveys required for merchant vessels every five years. Vessels delivered in 2010 account for 10% of the total cape-size fleet and will need to undergo their 15-year special survey in 2025.
Additionally, there will be 5 and 10-year special surveys, meaning approximately 23% of the total cape-size and Newcastlemax fleet will be competing for dry docks base this year, with similar numbers to be expected for 2026. We estimate a total of 1.3%- 1.4% additional off-hire time for the total fleet due to dry docks alone in 2025 and 2026, not factoring in potential congestion and waiting time. Thank you, and I will now pass the floor back to the operator and welcome any questions that you might have.
Thank you. If you do wish to ask a question, please press five star on your telephone keypad. To withdraw your question, you may do so by pressing five star again. We will have a brief pause while questions are being registered. It is five star on your telephone to get in the queue. It does not seem like. Yes, we do have a question here from the Frode Morkedal from Clarkson Securities. Please go ahead, your line will now be unmuted.
Thank you. Do you have any figures on how much of this has been completed in Q3 and how much is pending for Q4? I mean.
Sorry to interrupt, but you fell out on the first half of the questions. Could you please repeat?
Okay. I started asking about the dry docking surveys, which is absorbing a lot of capacity, right? Do you have any figures on how much of that has already happened and how much is pending for the, let's say, remaining of the year?
The short answer to that is no. It's challenging to find exact data on when the various ships go in for dry docking or regular repair, etc. We have based our figures on the total fleet and the age that the various vessels are. We don't have the overview of which vessels are going into Q1, Q2, Q3, or Q4. However, it's challenging to have these timelines postponed more than a couple of months before you have to enter dry dock.
Okay. Fair enough. The question is on, I want to pick your brain on the Q1 SSA terms, basically. I mean, it's about, well, 16,000 mi, I guess, Q1 next year, which historically is a relatively strong level, right? Maybe what's your thought on that? Could CNMD already come in and help with the weakness, or do you think there's any further upside to that break into Q1?
Yeah, good question. We have a couple of interesting assets coming into Q1 this year, which we saw also in 2026, which we also saw Q1 this year with the bauxite volumes being very, very strong. Q1 settled at $13,000 this year. With the add-on from Simandou, we will obviously have to wait and see how much capacity they're able to put on stream from November into Q1. If the bauxite volumes continue and if Brazil is experiencing a dry season again, I think it's dangerous to be short in Q1 with the big drivers that we see in the market today. There's a reason why it's priced at $17,000 today. The expectations are high, but I also think the volumes will follow through to some extent.
When we decide to push the button and find security and cover for that period, I still think it's a little bit early, and we will need to see if the market continues to impress us throughout the year.
Makes sense.
If there are no further questions, thank you very much for calling in, and we look forward to speaking to you again in the next quarter.