Welcome to the first quarter results presentation of Klaveness Combination Carriers. My name is Engebret Dahm. I'm the CEO of the company. Together with me, I have Liv Dyrnes, CFO. We will go through the questions after the presentation. Please send in questions while we present on this webcast solution. In our business, safety is priority number one. In these COVID-19 times, especially the safety of seafarers is important. We do whatever we can to ensure that there are no spread of the virus to our ships. We have made a number of precautionary measures to make sure this happens, and we're pleased to see that through this quarter and to date, there have been no incidents on board the ships. The ships are operating fine, without any problems, thanks to the dedication of our crew. Just to remind you who we are.
KCC stands out in the standardized shipping world with unique solutions, which we have developed over time. We are the world leader in combination carriers, having 80% of the world fleet of combination carriers, including new builds. We have two types of ships. We have the CABUs. We have nine ships on water, which are servicing the alumina industry, transporting caustic soda one way and dry bulk the other way, competing against MR tankers in the caustic soda trade and Panamax dry bulk in the dry bulk trades. We have three CLEANBUs on water, the new generation of ships, which are full-fledged LR1 tankers and a Kamsarmax bulk carrier at the same time. We have another five ships delivering over the next nine months.
Our concepts, which are combining wet and dry and efficient trading patterns, ensure that we are by far the most carbon efficient shipping solutions around today. We have set the missions to improve further, to reduce emissions and energy consumption on our ships and improve operations, and to reach the target of carbon neutral operation in 2030. The ability of our ships to load both dry and wet cargos and switch between the markets makes that our ships are more flexible and has a more diversified earnings base than most other shipping segments. We see we benefit that in a number of instances over the last year.
Seeing in the third quarter with a very strong dry market, the switching between dry and wet made the earnings stand out, and while the market fell into the first quarter, we substituted dry loading on one of our trades with a wet loading, which we have in our combo trades, the possibility we have, which increased earnings. We also saw that coming into April, we fixed all our CLEANBUs on time charters, where as a tanker, when the tanker market overshoot. This shows again, the flexibility the concepts have, which are extremely important in the volatile markets we have in the shipping world today. Again, pleased to present the results for the first quarter, the strongest quarter we've had in KCC since the company was established in 2018. We have earnings of the CABUs and CLEANBUs above $20,000 per day.
We have with the same fleet as in the fourth quarter, we have a 40% higher EBITDA, and we have a result of $4.3 million in the first quarter. The extremely strong tanker market over the recent months, in our opinion, was short-lived, which has shown to be the case. We decided to utilize this short period of time to do whatever we can to fix the earnings ahead in time. We fixed, as mentioned, three ships on CLEANBUs on time charter. We extended two CABU contracts and also sold FFAs derivatives ahead in time for the tanker market. We are also pleased to see that with the conclusion or credit approval of the last finance facility of the CLEANBUs, our company is fully financed, including the issue of a new bond we did in January of this year.
Based on the positive results, the board decided to triple the dividend payments to NOK 0.03 per share for the first quarter. The CABUs are servicing, as mentioned, the alumina industry, and alumina is the intermediate product in aluminum production. As you know, the aluminum industry is hardly hit by the COVID-19 situation due to much less demand from auto industry, construction, and aviation, for instance. Meaning that there are a number of smelters that has been curtailed and production falling off. All our alumina refinery customers in Australia and Brazil are among the world's most cost-efficient producers, and they are maintaining production at full production.
From what we understand from our customers, there are no plans to reduce production on these plants. That means that we are seeing to the right of this slide, you are seeing the number of bookings of caustic soda cargoes, and we are seeing that in the first half of this year, we have managed to increase considerably from the second half, and especially from the first half of 2019, where we had the issues around the Alunorte refinery in Brazil. We are seeing that the changes in the caustic soda market caused by the COVID-19 situation leads to regional price differences of caustic soda, which are supporting our main trades from Far East and Middle East to Australia. Meaning that we are confident that we can fill up the full capacity of the CABUs in the caustic soda combi trade for this year.
The results of $20,283 per day in the second quarter, up by around $1,200 per day is a very strong result. It is impacted by a settlement from one of the customers for underperformance in 2019 of about $800 per day impact. The good results are part, as I mentioned, that we have a more or less full utilization of the ships in our combi trades. Secondly, we did renew contracts at the end of 2019 at good levels. It is also right to say that the results are negatively impacted by the poor dry bulk market and the falling fuel prices. Looking over to the CLEANBUs, the phasing of the CLEANBUs are continuing and are progressing well. We are seeing that during the quarter and year to date, we have increased the number of customers.
We have substantially increased the number of terminals that we have called. We are also pleased to see that we have doubled the number of dry to wet switches. We have reached a very important milestone in the quarter where we have done the first switch between dry cargo and jet fuel, which is the most demanding type of wet commodity we transport. That happened now in May in Japan after we completed discharge of grain cargo from South America to China. This is a major milestone and shows that our ships are able to transport the most demanding CPP without any trace of cargo contamination. Looking at the CLEANBUs, we have increased the share of the capacity in combi trades in the first quarter.
We have maintained one ship in the tanker trade to develop new trades and to increase the number of terminal acceptance. The earnings in combi trade is very satisfactory, over $24,000 per day, exceeding the earnings of standard LR1 tankers. While the earnings as a tanker is somewhat below, which is due to the fact that operating only one ship in the tanker market is not ideal. The results of close to $21,000 per day for the first quarter is positive. We are pleased to see again that we are getting good earnings in the combi trade and two-third of the ships in combi capacity. Slightly underperforming the other one market, but more than three times the earnings of a standard dry ship.
Looking on the operation of the ships, we are pleased to see that the off-hire is minimal for the CLEANBUs for the first quarter. We are seeing that after a fairly demanding 2019 with a lot of guarantee works on especially the first ship, operation is strong. There is one guarantee item remaining on ship number two and three, which will be made for one of the ships during the fourth quarter of the year and one ship during the first half of the year, which will impact off-hire, but which will be covered as a guarantee item by the shipyard. The COVID-19 situation at the shipyard and delays has impacted delivery of the remaining new builds. We expect CLEANBU number four to be delivered in mid-July and the remaining ships to be one to two months delayed.
Also looking on the OpEx, we have had a good development. The CABUs are in line with expectations, about $7,100 per day, which is slightly above the year-end target. The CLEANBUs has also come down substantially in operating cost from $10,300 per day in the fourth quarter, which included a number of startup costs, down to close to $8,400 per day in the first quarter. The target for this year for the three ships that are in operation, the three ships that were delivered last year, is about $8,100 per day. While we expect the new ships delivering to be on higher due to startup costs. We have, as mentioned, high ambitions when it comes to decarbonizing our business. We have a number of ongoing projects, including investing in the ships during the upcoming dockings of three CABUs.
We also have a number of initiatives to improve the operational efficiency, to reduce carbon emissions per vessel, and to improve the carbon efficiency further over ships. The individual KPIs for one quarter isolated is difficult to make sense of. As you see from the below, where you have the carbon efficiency to the left, which is the best ever at 7.2. The ballast is slightly up because of one positioning voyage from Far East to U.S. with a lot of ballast. While the CO2 emission is up mainly due to calculation method reasons, which will be evened out further as the quarters go. The COVID-19 situation is a big concern and a big risk for all businesses and which is of course particularly true for a volatile business like shipping.
We are seeing to left, seeing in black is the Purchasing Managers' Index, a three-month moving average, which is a good indicator for the industrial production. Which is turning down quite dramatically in March, April. While we see the blue is the three-month moving average of the Baltic Dry Index, which is bottoming out. Yet we can't see from this graph any, we would call bottoming out of the macro cycle. A number of indicators, from everything from the coal consumption in China, which is the graph to the right, to the report of oil consumption figures for April, May, which shows that probably the trough in the world economy has been passed in April and May. That we are seeing the world economy restarting and improving.
Are, of course, uncertainty with respect to how fast and how long time it will take to get back to something which looks as a normal activity level. In the tanker markets, we have been through a spectacular boom over the last two months, which is partly due to increased oil supply due to the Saudi-Russian price war in combination with dramatic fall in oil demand, which led to a contango pricing for fuel, which again led to increased demand for floating storage for tankers. Also quite a bit increase of congestion in ports, as well as increased shipment volumes. The oil markets have normalized quicker than many expected. We are seeing the demand is picking up.
We are seeing supply and oil production and also refinery runs are decreasing quite a bit, which is again one of the reasons why the tanker market fell down quite dramatically over the last weeks. Still at the level which is good, but we expect there to be downside in the tanker market coming into the second half as the de-stocking starts up and ships under floating storage will be released. We have used, as mentioned, the time over April to fix two CABU contracts, important CABU contracts, one for 12 months, one for three years. Which means that we have close to three-quarter of our capacity for the CABUs covered for second half of the year, and a little bit less than half of the capacity for first half of next year.
In blue, you see the part which is fixed rate contracts, while the gray is the index linked contracts, which is then linked to the market. On the CLEANBUs, we see that we also are fully fixed for the second quarter. For the second half, we have, including the FFAs we have sold, we have covered around 60% of the financial exposure of the CLEANBUs for the second half. For the first half next year, we have fairly limited coverage, but we have some time charter coverage and some FFAs. The dry market had a strong quarter in the third quarter, fell back through the fourth quarter and into the first quarter as seasonally normal. We didn't get the pickup of the Chinese New Year due to COVID-19 situation and the strong, we call disruption in the world production, industrial production due to COVID-19 situation.
As the forward market, which is illustrated here on the graph to the left, shows there's optimism that the dry market will recover somewhat over the next quarters, partly due to expected increase the shipments of iron ore from Brazil, stimulated by Chinese positive stimulus packages. There are also the grain season from U.S. coming up after the summer, which should have a positive impact. In our business we are only hedging dry markets at fairly high levels, and we are more or less fixed for second quarter. We have one shipment left to be fixed for the second quarter. For the second half, we have about one third of the capacity fixed. When in terms of rates, while we are operationally wise, we are about 40% covered.
The levels we have covered are at good levels, good earnings, well above $10,000 per day, which were made partly in August, the autumn of 2018, and partly in the autumn of 2019. With that, I leave it to you to go through the figures in more detail.
Thank you, good morning, everyone. Q1 was impacted by a fleet in full operation, efficient combination trading, and support from a strengthening tanker market during the quarter. Net revenues ended at $22.4 million, up approximately 20% compared to the previous quarter, and up from $13.3 million in Q1 last year. Operating expenses and SG&A, quite stable over the last quarters. We had ended at a strong EBITDA for the quarter, adjusted of $12.9 million. That's 40% higher than last quarter and up from $4.7 million in Q1 last year. Depreciation, also quite stable over the last quarters, while net finance cost increased by approximately $1.4 million. The main reason for this is the repurchase of the KCC03 bond and the corresponding settlement of the swap. In total, $0.9 million in one-offs. We also saw $200 thousand higher interest rate costs related to higher bond debt.
In addition, we had some negative effects for the quarter. EBT, hence, ended at $4.3 million, up from $1.7 million last quarter, and negative $0.8 million in Q1 2019. This corresponds to $0.09 per share. I would also like to mention that we, from 1st of January this year, have accounted for all financial derivatives as hedge accounting, which means that the value change of these derivatives, the unrealized value change, will be part of the other comprehensive income going forward. We will hence see less volatility in the financial results going over P&L. When comparing EBITDA in Q1 this year compared to Q1 last year, we saw an improvement of $7.6 million. CABU net revenues up $3.5 million, mainly due to a much higher caustic soda volume, which again implies more combination trading. The rate per day was up $4,200 per day.
CLEANBU net revenues up $5.6 million, which of course relates mainly to two additional vessels in operation. The rate per day was up $10,000 per day. However, we took delivery of the first CLEANBU vessel in January last year, which impacted that quarter. We had off-hire related to the delivery, and we did not start combination trading for that vessel until later that year. Operating expenses up $1.8 million, also related to, or mainly related to, two additional CLEANBU vessels. All in all, EBITDA for the quarter, $12.9 million. The change driven by higher caustic soda volumes and the two additional vessels. When comparing to the previous quarter, we see an improvement of 40%, $3.7 million. CABU net revenues up $1 million. Rates are up $1,300 per day. This is mainly based on more combi trading.
We only had, as mentioned earlier, one positioning voyage for the CABU vessels this quarter that do not qualify for combination trading. CLEANBU net revenues up $2.5 million. Rate per day up $2,200 per day. OpEx and SG&A, quite stable. As mentioned earlier, for the quarter, we had both segments delivered earnings per day, about $20,000 per day. We saw much higher combination trading compared to last quarter, up from 80% to 92% for the CABU vessels and from 58% to 68% for the CLEANBU vessels. In addition, we only had nine off-hire days for the entire fleet in Q1. We have two main funding events this quarter, as Engebret mentioned in the start of the presentation. As mentioned earlier, we have refinanced the KCC03 bond. We repurchased $160 or close to $160 million in Q1, and we issued a new bond, five-year bond of NOK 500 million.
We are very pleased with the timing of this issue, when we see the situation that the world is in today, and also, we were able to get a 50 basis points lower margin. The bond was listed on Oslo Stock Exchange on Monday. We have also obtained credit approval for the bank financing of the last two CLEANBU vessels being delivered next year. This is subject to final documentation, but we estimate to close the transaction within the end of Q2. All in all, we are fully funded. We have a limited refinancing risk over the next years. Over to some balance sheet key financials. Equity ratio down from 47% at the end of the year to 43% by the end of Q1, mainly due to higher interest-bearing debt and also some negative impact on equity due to unrealized value changes of derivative of in total NOK 8.5 million.
Equity hence decreased by NOK 4.6 million. Cash and cash equivalents up NOK 21 million, based on a strong EBITDA and also higher interest-bearing debt. We have paid new building costs of NOK 10.3 million for the quarter. In addition to other regular cash flow items, we paid cash collateral of NOK 2.9 million related to negative value on the cross-currency interest rate swaps related to the bond debt. This is down to approximately NOK 500,000 today. Return on capital employed up from 4% on an annualized basis from Q4 to 8% in Q1. If we adjust for capital related to the new building program, of course, this would have been even higher. Dividends up from NOK 0.01 per share to NOK 0.03 per share and total approximately NOK 1.5 million and in line with our dividend policy. All in all, we deliver a strong financial result for the quarter.
We have a solid financial position. We have a fully funded new building program, and we continue to pay dividends. Thank you.
To wrap it up, the outlook for KCC, and despite the current difficult macro situation and the COVID-19 situation, is positive. First quarter was a strong quarter, and we are very pleased with the quarter, but we expect the second quarter to be even stronger. Based on the bookings we are made both on the CABUs and the CLEANBUs. We are more or less fully booked now for the remaining part of the quarter, so we are pleased to increase the guiding for the cargo earnings from NOK 17,000 per day we gave at the end of the first, when we made the presentation in early April, up to NOK 19,000-NOK 20,000 per day for today, the update. When it comes to the CLEANBUs, based on the fixtures we are made, we expect earnings of between NOK 28,000 and NOK 29,000 per day in the second quarter.
Looking ahead for the second half of the year, due to the decreasing and weaker tanker market, we expect earnings to fall back slightly. We have, based on the strong bookings we have of contracts and time charters, and also an expected improvements in the dry market, we expect also second half of the year to be a healthy year for the company. In this difficult world economy, having a diversified risk base and a high degree of efficiency is important. With the basis we have with being a fully financed company and with a good contract coverage, we believe we are probably more than most shipping companies, robust for whatever comes in the effects of the COVID-19 situation. With that, we are ready to take questions. Linda, do we have any questions?
We have one question. Good morning. You have previously aimed to exercise multiple of the remaining four options for CLEANBU new builds, subject to the company being able to secure equity financing. Have you changed your view on these options following the recent market turbulence?
I think as we have said, we are dependent on raising new capital to fund new builds. That means that as the market looks today, we are not going to declare these options in the short term. Luckily, we have four options, which are going. The next one is exercisable in October, and then we have another two options after the new year. We believe it makes sense for the company, assuming that we get the repricing of our shares to grow the fleet further. Again, there are no immediate plans for the next months to declare options.
The next question. Hi, can you say anything about the size of the new financing commitment for the two last new buildings?
Liv, will you take that?
Yes. It's in line with existing financing of the CLEANBUs, so it's approximately $30 million per vessel. Approximately the same profile, and it's a five-year tenor.
That looks like that's it.
That's it? Okay. Thank you for participating. Please reach out if you have further questions at any time. Thank you.