Good morning, welcome to Höegh Autoliners first quarter presentations. My name is My Linh Vu, finance manager and IR responsible at Höegh Autoliners. With me today, we have our CEO, Andreas Enger, and our CFO, Per Øivind Rosmo, who will walk you through the last quarter business and financial updates. If you have any question, please send us an emails to our investor relation mailbox, IR@hoegh.com, and we will answer at the end of the presentations. With that, I will hand it over to you, Andreas.
Thank you, My Linh Vu. Welcome, we are pleased to starting to be repetitive, but once again, reporting our best quarter ever. It is, we are still operating in a quite a turbulent environment, but I'm quite proud that our team have had the capability of exploiting opportunities and producing once again, record results. Short in figures, that means an EBITDA of $171 million, 10% increase quarter-on-quarter, transforming into a net profit of $117 million. We now have a gross rate of 87.9, a 2% increase, stronger increase in net rates, which we come back to. We have strengthened our fleet by taking delivery of two previously bareboat chartered vessels during the quarter at very attractive price.
We are with this financial strength and with our outlook, have decided to increase our dividends to the upper end of the range in our dividend policy, and that means $60 million of dividends for the first quarter paid in May. That is a dividend level that still allows us to continue our fleet renewal program, with, you know, a strong equity component, and it allows us to continue to build resilience in the company. We are very pleased that we are able to or been able to get there. We have an equity ratio of 62%, meaning that we have a very strong balance sheet. Going through, starting with a little bit on the market. Volume is fairly stable, slightly down.
I think the main reason for, you know, a somewhat softer volume is that we are still seeing a market with heavy disruptions in many trades. Our trade to Australia, Oceania, which is one of our biggest ones, we have, you know, more than a week of waiting time per port call, which is obviously substantially eating into our capacity. We have also had a vessel for that for technical reasons have been, you know, out of operation for large part of the quarter. I must again, repeat and reiterate that, I am quite pleased and proud of how our trade team is able to, you know, constantly look for opportunities.
As some of you have seen the couple of vessels that we've had calling Oslo, which is not part of our trade structure, but is part of our continuous effort to make sure that we use all available time in our vessels in the best possible way, and that's part of what is producing a good quarter, even with a lot of lost time. High and heavy share talked about that a lot. I think it's sort of less important as an indicator. It remains around 25%. We have a strong demand and are building stronger relations with many of our key heavy equipment customers.
But we are, as you said, you know, deselecting some of the more opportunistic lower value, high and heavy cargo, against other and better paid, you know, cargo. That has then the contract renewals and our operating model has allowed us to increase the net rate by 9% quarter-on-quarter, to $74.4 per cube. I'm also quite pleased that I think we can say that we in the quarter or in during this year have had a breakthrough in, you know, our contracting dialogues with customers. We've said for about a year that we want to reserve capacity for 2023 and 2024 to customers that are interested in engaging in longer-term relationships.
And contract renewals so far in 2023, with both a substantial volume and an average duration approaching five years, meaning that we're getting traction on longer contracts. More importantly, these contracts also are much more balanced in the sense that the co-commitments from customers and commitments from us are balanced. That's obviously a very important feature for, you know, the sustainability of our contract structure. These contracts are also at rates that are accretive to our, to our, you know, current earnings levels. It's a strong performance.
The same line, I would sort of also emphasize that we do still have substantial a volume or contracts expiring in 2024 and also into 2025, at rate levels that were set, you know, in a substantially weaker market that still gives us, you know, opportunity to, you know, improve our total our backlog by renewing contracts in a much stronger market. The deep sea shipment of new vehicles is keeping up. China to Europe is the fastest-growing lane and is the key driver in the market. It obviously consumes a lot of capacity, and it represents quite a good and attractive market. High and heavy is still at high levels.
We experience, you know, very strong projections from our key high and heavy customers. Seems like mining might be about to level out, but it's again still at a high level and we expect it to remain solid and a solid contributor and will remain a important strategic part of, you know, serving the largest and most important equipment manufacturers in the world, well. Capacity is maybe the most repetitive. Time charter rates are high. They are at the level where, you know, I think we can, we are able to, I think, transform maybe the current day rates, if we wanted to.
you know, the charter rates today are substantially above the capacity cost for our newbuilds that starts coming in 2024. charters are still made, at, you know, with fairly long duration. we are continuing our policy of not entering into long-term charters at levels that are higher than our newbuild parity. but we are constantly, you know, working the market for trips and shorter things because we obviously could benefit from having more capacity. but our focus is to make the most out of the capacity we have by running it efficiently and creatively. obviously, there is, we are getting closer to the point where newbuilds comes.
I think those will be very welcome to the industry, very welcome to us because the current situation is not entirely sustainable. Into 2025, 2026, you know, capacity situation will normalize. Our expectation is that, you know, first, that the yards are sold out, so it's hard to add much capacity earlier. Also with our customer dialogues and contracting, that the increased environmental, you know, attention by customers, you know, and our strong new build program will also allow us to improve our contract structure, you know, in the years to come. Fleet and network is, you know, fully sort of optimized and utilized. We don't have any charters up for renewal.
As I said, we have new builds coming from late 2024 that the building is now the first vessel is well underway, and it seems like all processes at the yard is working well. Relations with the yard is good, and we have, you know, our team on site and see very good progress. We are, needless to say, you know, we're looking very much forward to getting the Aurora vessels from late 2024. Sustainability is taking an increasing role. We have, you know, just renewed, reaffirmed our corporate purpose and goals. I don't think the people, planet, prosperity is necessarily very creative, but it is the kind of dimensions that we are working on.
I think on the people side, the core theme is that, you know, we have a fully developed internal organization. We manage our own crew, we manage our own vessels. We do, we are able to design new builds. We have strong local teams, all over the world working with our customers. Nurturing and developing that team is very important, you know, both value and a commercial priority for us because we believe that having that, you know, stable, robust, fully internally managed, fully controlled organization is one of the things that helps us keeping momentum. We've been through a pandemic. We learned a lot about promoting well-being, and we are working, you know, on making sure that we are continuing the focus of well-being of our people.
At sea and on shore. Both are really important. And we are also, you know, actively working on digitizing our, both our internal environment and our vessels, which is also something that is, you know, changing the mode of operation both on board and at the offices. Planet. Sailing for Sustainability is one of our slogans. We have adopted a, what we call 30 by 30. We are going to cut emissions by more than 30% between 2010 and 2019 and 2030. We continue our objective and our goal of reaching net zero by 2040. And I would say we have, you know, the investment plans in place to, you know, have traction on that goal.
We are increasingly in dialogues with customers to partner to basically create a decarbonized deep-sea shipping services for the most ambitious and the strongest brands in the world. We are continuing to raise the bar in terms of asset lifecycle management, and although scrapping of vessels is not on the agenda for the time being, it is a core part of our, you know, lifecycle environmental focus. Prosperity is, you know, growing the business in a responsible way. As I said, we're making some progress. We have a strong focus on developing lasting relationships with customers that shares our ambitions and the business philosophy. We are very focused on creating and ensuring financial resilience by the way we deal with financial leverage and risk.
We are working continuously to optimize network and capacity to, you know, create value in a safe and sustainable way. I think we are victim, as many others, in the current environment with lack of capacity and big delays. We have not been able to have particular traction on our decarbonization this year because we don't have the new assets, and we are running our current assets, you know, a bit more intensively. We are quite frustrated in many ways in the sense that we have the tools to reduce speed and, you know, fuel consumption. Most ports in the world still serve on a first come, first serve basis.
We have lots of things to do in the industry to be able to leverage those tools, so that we're not, you know, racing to wait, as it's called, you know, to keep our place in the queue, knowing that we're going to wait for a week at the end of it. I think the more important thing is that we do have a very strong, you know, carbon emission level relative to the industry. I think we have at least one of the, if not the most ambitious, you know, trajectory. I think importantly, we have the investments and the tools in place to actually deliver on that trajectory. That's a very important part of our of our priority and of our story.
That's my part of the story. I'm now going to leave to Per Øivind to take you through some more details on the quarter financials. Per.
Thank you, Andreas. Good morning, everyone. Just short recap. The driver of our profitability is, as we have said before, it's the volumes and the net rates. As you can see, we had a small reduction in volumes from Q4 into Q1. Main reason is, as mentioned, Andreas mentioned, delays, eating up capacity, also some technical off-hire. We also had some repositioning of vessels to optimize the network. We, to some extent, we saw somewhat lower utilization in the beginning of the year, especially in January. For all practical purposes, it is now our capacity limiting our ability to grow the volumes. All vessels are, for all practical purposes, fully loaded. Net rate increased from Q4 into Q1 with 8.9%, from $68.3 per CBM to $74.4 per CBM.
In a historical perspective, this is the highest net rate that we have seen in our business. Transforming this into revenues, EBITDA and net profit, we see that the revenues quarter-on-quarter was more or less the same, $356 million in Q4 and $354 million in Q1. The reason why the revenues is somewhat lower is the volume and to some extent also reduced bunker compensation in Q1. The increase in net rate made it possible to keep the turnover more or less at the same level. Adjusted EBITDA increased from $156 million in Q4 to $171 million in Q1, increase of 9%. Comparing to the same quarter last year, we see that we have increased the EBITDA from $78 million - $171 million.
This transformed into a net profit of $124 million for the quarter, up by 3% from $120 million in Q4. Comparing it with Q1 2022, we see that the increase is $90 million. If you look at the numbers here, you will see that basically comparing with Q1 2022, the increase in the top line is basically going through. We have more or less the same increase in revenues, EBITDA, and net profit comparing with Q1 2022. If we look at the different elements in the change here and go back to Q1 2022, comparing with Q4 2022, we see that we had an increase in cargo revenue of $90 million.
We had $17 million higher bunker expenses, and then we were able to reduce our operating expenses by $5 million. We are running more efficient voyages. We have less port calls, and we have more volumes per port than we historically had, given the strong market. That gave us the $156 million in Q4. From Q4 into Q1, we had a small reduction in cargo revenue, as we saw from the previous slide, but we were also able to reduce our bunker expenses with $14 million. Again, we are able to reduce our operating expenses. This is mainly port expenses and expenses related to handling of cargo, and it all comes from more efficient voyages. That took us to $171 million. The balance sheet is, as Andrea said, very robust.
Our net interest-bearing debt was reduced again, and we now have $310 million in net interest-bearing debt, down from $379 million by the end of Q4. The net interest-bearing debt to EBITDA ratio is down to 0.6. The book value of the equity increased to $1.136 billion, up from $1.063 billion, and we have an equity ratio now of book equity ratio of 62%. Cash balance on the back of the strong operating result, we increased the cash balance from $184 million by the end of Q4 to $253 million by the end of Q1. We have the unused RCF on top of that, and that was $90 million by the end of Q1.
Our liquidity reserve is $343 million, including the RCF. The cash flow from operation was $175 million, more or less the same as the EBITDA, slightly above, meaning that we were able to reduce the working capital somewhat during the quarter. We invested the CapEx, $17 million. Out of the $17 million, $10 million was an installment for the new buildings that we are having under construction, and $7 million was drydocking and other CapEx. We used $18 million for debt service, mortgage installments, and interests. We also purchased two vessels during the quarter, Höegh Berlin and Höegh Tracer, $87 million in total for those two vessels.
We paid $44 million in dividend. We took new mortgage debt of $83 million related to the vessels that we have purchased recently. We paid $21 million in lease and time charter hire. Currency loss of $1 million. That took us from $184 million by the end of Q4 to $253 million by the end of Q1. As I said, in addition, $90 million in unused RCF. The balance sheet is strong. We have vessels and new buildings of $1.2 billion. We have cash and cash equivalents of $253 million. We have the remaining lease vessels that we have in the balance sheet is currently four.
We will buy another one in June, Höegh Trapper, so we will continue to reduce the right-of-use assets in the balance sheet and increase vessels and new buildings. We had bunker and trade receivables of $129 million. The equity was $1.1 billion, and we had the mortgage debt, $335 million, and we have lease liabilities related to the right-of-use assets of $228 million. Current liabilities was $80 million, and other non-current liabilities, $42 million. The book equity per share is $6, and that corresponds to NOK 64.5 by the end of the quarter. We also calculate the net asset value by replacing book value of vessels with market value of vessels and looking at the additional value that we have in the variable chartered vessels.
We have calculated the net asset value to be $2.1 billion, corresponding to $10.4 per share or NOK 112. Looking at the dividend and how it has developed over the last four quarters, we started to pay $15 million for second quarter 2022, 30% of the net profit at that point in time. We kept it at 30% for third quarter, and we paid $20 million. Then we increased the payout ratio to 40% in February, the dividend that we paid for Q4. That was $44 million. Now we are increasing again both the amount and the payout ratio. We have increased to 50%, and we will pay $60 million in dividend later this month. The estimated payment date is May 16.
That is all from the financial presentation. Andreas will say a few words about the outlook.
Thank you, Per. Yes, at the end of a strong quarter, it's also fantastic to be able to report that we believe the outlook is continuing to be strong. There is a strong market, and we are basically believe that we are still in a positive trend that will allow us to continue to, you know, reprice contracts and develop our business and also increase duration of our backlog. Q2 have started very well, and we expect it to be another strong quarter. Clearly, you know, this very positive, you know, view on the company, you know, is maybe somewhat in contrast to some of the macro trends. We are closely monitoring global macro.
e way our markets work now, it continues to look like the depressed deliveries of vehicles and to some extent equipment during the pandemic and during the semiconductor shortages means that we are upholding our volumes and business well, also in a somewhat more challenging macro situation. So for us, we still see a positive development. We see customers that have, you know, strong outlooks for their needs for deep sea shipment. And we are looking towards another good quarter in the second quarter this year. Thank you.
Yes, let's come to the Q&A part. We have received one questions from our analyst, Petter Haugen. Could we comment something about the rate level in the new contracts in context of the current net rate?
I mean, I don't think we would provide very much detail. It varies with, you know, directions and whatever. But, you know, we are entering contracts at levels that are, you know, well above our current rates. So, you know, the rate environment is strong. That also goes for contracts with longer duration.
Yeah. Thank you. Let's give our online audience a few more minutes to start to send in questions. Yes, the next question is from our analyst, Frode Mørkedal from Clarksons. The question is about efficiencies, inefficiencies, and waiting time. In term of the inefficiencies and waiting time, can you provide an update about your fleet and the wider industry as well your outlook for inefficiencies?
I mean, I think there are two things that stands out in terms of inefficiencies. One is that Australia, Oceania, which is, you know, one of our largest trades, has been, I must say, quite awful during the quarter. I also went down there myself to sort of try to see what we can do about it, but it is huge challenge. We are, you know, we are waiting more than a week per port call in Australia. That is a big challenge that is impacting us and our customers in ways that we are struggling with finding good solutions to.
I think on the, on the other hand, you can say that in the rest of the world, and actually waiting time has improved. The total picture is but so it's now much more focused on trades. It does impact, you know, when we have, it takes it means that given that a large part of our trades have returned trades through Australia, it means that we have substantially longer voyages. That impacts also, you know, our capacity out of, out of Asia, because of the delays. It's a big problem. It's partially driven by, you know, bugs and seeds and things that are also to some extent seasonal.
We can hope that it will ease a little bit in the summer season. It is a recurring problem in winter and we are working quite hard with, you know, with our customers and in cargo preparation to make sure that we minimize the problem. It's also a lack of capacity and efficiency in the ports as such. It is a big challenge. I think globally it has actually improved. It doesn't help us that much when we eat so much, so many days out of the round trip by being clogged up in Australia.
Thank you, Andreas. We are still waiting for the more questions to come in. More questions? Today is a very quiet morning. As we mentioned, if you have further questions, please do not hesitate in sending us an email to our investor relation mailbox at IR@hoegh.com, we will get back to you right away. That brings us to the end of our presentation. Thank you very much for your attention, we look forward to seeing you next time.