Good morning, everyone, and welcome to the Q4 result presentation. My name is Engebret Dahm. I'm the CEO of the company. Together with me, I have Liv Dyrnes, the CFO. As normal, we take questions after the presentation. You can put in your questions on the webcast solution. We are a owner of 16 combination carriers that are both product tankers and dry bulk vessels. When they are in tanker mode, they compete against LR1 and MR product tankers. When they are in dry mode, they compete against Panamax and Kamsarmax dry bulk vessels. Our fleet reduces waste and inefficiencies in our main trades to South America and Australia, where the standard tankers and dry bulk vessels sail long distances without cargo on board.
Combining the cargo normally transported by a tanker and the cargo normally transported by a dry bulk vessel, we reduce with ballast being one-fourth or one-third of the standard tankers, vessels, we reduce the carbon footprint by 30%-40%. KCC has been around now for five years, and I can tell you it's been an exciting and in the start, a fairly challenging voyage. We took delivery of eight CLEANBUs, the new generation vessels, partly during in the COVID period, which led to delivery delays, and we had our share of teething problems. It also took some time to convince skeptical customers in the demanding product tanker market. The market was pretty bad except for some blips in the tanker market and until the recovery in the dry market during the spring of 2021.
Coming into the, to the end of 2021, we have started to harvest the hard work we have been doing. And we have managed to get a pretty wide acceptance of our CLEANBU fleet into the CPP market. We have improved our cargo trading. We have also got the good support of a strong dry market last year and a very strong tanker market from the spring of last year, and which last up to today. The company today stands as a financially strong company being well-positioned for what we believe is exciting shipping markets and well-positioned for taking the lead in the progress to low carbon shipping. We have from the start told you that we will deliver out 80% of our free cash flow as dividends to the shareholders.
In 2022, including the dividends for Q4 , we have paid out close to $53 million in dividends, which accounts for around 87% of the earnings or the cash flow. We continue to deliver what we promise. Starting off with the Q4 , it's been a very volatile quarter in the markets we trade. Dry market has continued to weaken during the quarter. The product tanker market boomed in from end November and December, falling back again in January. The fuel markets continued to decrease somewhat, but still are at high levels. The time charter earnings for the quarter is the second highest in our history. It ended at an average $31,500 per day, which is the upper range of the guiding.
This is 2 x the earnings of standard dry bulk vessels, but 20% lower than the spot market of standard product tankers. The results are strong, somewhat lower than in the Q3 , mainly due to the temporary lower CLEANBU earnings and slightly higher OpEx and SG&A. The board has decided to continue the high dividend distribution at $0.30 per share, giving around 15% running yield with yesterday's close share price of 80 crores. We have, as mentioned, a ambition to be a leader in low carbon shipping, and over the next years, we'll focus on improving the efficiency throughout our organization. We have a pretty efficient operation.
Here showing our business into South America, where we go with sugar and grains out of South America into Middle East and India, and we take clean petroleum products back again to South America. There are still potential to improve, and we are working together with customers to reach a further excellence in this operation. We are putting a lot of resources into improving the voyage execution, and an important part of that is how we are digitizing our vessels. By putting on board better tools for our crew to run the ships, better data and will make it possible to get a better follow-up from shore.
We have an quite ambitious energy efficiency program, where we are investing in several, and in fact, up to 15, 16 different energy efficiency measures on our vessels. On our modern ships, likely to invest something around $4 million per ship over the coming years. And we're seeing the effects of what we are doing in the emission results we are presenting. The CO₂ emission fell by 5% in 2022 compared to 2021, reaching close to our target of a 25% reduction compared to 2018. We also show, in total a 7% improvement in the carbon intensity from 2021 to 2022, but still falling short of a 25% target, from 2018 to 2022.
We are about to complete our revised environmental strategy, where we'll give you more insights. We'll present this the 29th of March. Please stay tuned. We have a diversified earnings base in our company, where our earnings are from a tanker market, the dry market, and we also have a positive effect from our efficiency and the benefit from higher fuel prices. If you look historically, we see that these three markets move in different directions. Looking here first on the dry market, this is the Capesize spot earnings peaking in October 2021, falling with some ups and downs, down to $7,600 per day yesterday. We see the opposite direction of the product tanker market.
This is the LR1 product tankers that from the spring of last year has kept at very high historical levels. As you see in end of last year, the boom reaching up to $70,000 per day, falling back again in January, but it's now yesterday up again to more than $40,000 per day. If you add on the top the fuel prices that they peaked last spring, but has kept at high levels, you see the positive diversification effect of having earnings from three different markets. Look, starting up with the dry market, the demand, dry bulk demand measured as deadweight-ton miles has flattened out in the H2 of the year after very strong growth in the first half of 2022 and 2021.
The main reason for the lower, and weaker dry market is the release of capacity from port congestion that has substantially increased the effective fleet growth in the dry market, as you see here from the line. In fact, over the last 8-10 months, we have in fact around 10 percentage point increase in supply in the market. The dry order book is still at low levels at around 7.6%, and the estimated fleet growth is around 2% for this year. To get the dry market to be more exciting, we need strong economic global growth.
We need higher industrial production. This graph show you the in blue the Purchasing Managers' Index globally adjusted for trade flows in the dry market measured against the Baltic Dry Index. You see that both has fallen quite a bit. The Purchasing Managers' Index has fallen below the inflection point between expansion and contraction, but has flattened out, which gives some hope that we could be over the worst. The dry market we are dependent on what's happening in China, and the recent opening gives quite a bit of hope for optimism. We believe that the poor condition of the property market still will be a drag on the demand from China.
Here you see the white curve, which is the start of construction projects in the property market, falling down substantially over the last year. It's been starting to flatten out. What's quite interesting to see in the blue line is which is the sale of excavators, which has been a good early indicator of what's happening in the property market in China, is that there could be some upside potential also in the property market over the coming months. Looking into other parts of the economy in China, we see more clear and solid signs that the Chinese economy is recovering. We see it on air travel, and this graph shows again the spectacular rise in metro passenger volume over the recent month. In totality, we are optimistic for the dry market.
There will be a seasonal upturn during the spring. We are optimistic that we'll see a added further positive factor in the H2 . Looking at the tanker market, we believe there still are very strong fundamentals in the market. We are seeing here the demand in blue and total supply in white, which are recovering back to the pre-COVID levels. There has been some lower demand in the oil markets over the recent months due to lower economic activity. We are seeing that the, in the dark blue line that the stock levels have increased through 2022. The dot in to the left shows you the current position being in the middle of the historical range pre-COVID.
The order book is historically low at around 4%, and we expect fleet growth in the product tanker market of 2%-3%, assuming no scrapping in the very strong dry market this year. What's critical for the tanker market is what's happening in Europe and the EU's ban on Russian crude and oil product imports. In expectation of the, of the ban on Russian product imports, which kicked in last week, Europe has gone through a frenzy in importing, diesel and other, oil products.
You see it here from the graph, the peaking here in the summer and falling back considerably in early part of this year, which is partly explains the downturn in the tanker market seen since New Year. That has led to increasing stock levels in Europe of oil products, gas oil, and you see the green line to the left showing the increase which has probably increased further from what the data suggests here. Actually has led to that Europe has been becoming a net exporter of oil products here in February.
Fundamental challenge or potential for the dry market, the product tanker market is of course that the substitution of Russian oil imports which are short-haul products from the Baltic with longer-haul products imports from Middle East, U.S., Gulf and possibly from the Far East will have an effect once the current high stock levels will fall down. Which will have a substantially positive effect on the total demand side through longer ton-miles, longer distances, which could have a positive demand effect of close to 10%. Going over to where we are, as KCC, we have looking here on the fixed rate tanker coverage and percent of total capacity.
In the Q1 , if you add the index-linked contracts and what we are about to fix now over the coming week, we are pretty much fully booked both on the tanker side and the dry bulk side. For the last three quarters of the year, we have booked caustic soda contracts for the CABU fleet, accounting around 33% of the total tanker capacity of the KCC. We have deliberately kept the fixed rate coverage for the dry bulk market low in expectations of a stronger dry market. We have only booked 5% of the capacity on fixed rate contracts. In addition, I would like to mention that we have a number of index-linked contracts where the freight is set according to market indices.
We have the caustic soda contracts, CSS, marked here, and the clean petroleum contracts in totality, accounting for around 20% of our capacity. Dry bulk index-linked contracts account for more than 20% of the capacity. Continuing with earnings, we have over time showed that we can outperform the standard dry bulk and product tanker spot markets. In 2022, we had an average earnings of $29,760, which is in totally more than $8,000 higher than in 2021. Outperforming dry markets with 1.4 and matching the product tanker spot market in a very high product tanker market.
Looking on the CABUs, we had a very tight schedule towards the end of the year with high caustic soda volumes and also continued port inefficiencies that led to two ballastings of CABUs from Australia to the Far East, impacting the days in combination trade and increasing also the ballasts. That also reflects that we have a higher share of the capacity in the tanker market for the CABUs in the Q4 . The earnings for the CABUs ended at $25,760 per day, which is 1.7x the dry bulk market, but 30% under the MR product tanker spot earnings.
The difference towards the MR product tanker market is due to the fact that 70% of our tanker days was fixed on fixed rate contracts concluded before the market upturn back in the Q4 of 2021. The reason for the lower earnings is a lower dry, lower, weaker dry market, but also partly impacted by lower trading efficiencies. In looking at 2022, the CABUs earned close to $26,800 per day, which is $5,200 higher than in 2021, matching the MR spot market and 1.3x the dry market.
We have, as mentioned, booked quite a bit of caustic soda contracts at very high levels before Christmas, now accounting for 75% of the total tanker capacity of the CABUs. That is a record high booking, and increasing market share in our trades for the CABUs to Australia. The levels we have fixed at are record high. Here we're trying to illustrate in the blue upward-pointing line is the 12-month MR tanker time charter market. The circles indicate the timing when we booked the contracts for 2022 at the end of 2021, and the timing of bookings for the 2023 contracts at the end of 2022.
We see the very strong development in the 12-month MR tanker, 12-month time charter market, giving the reason why we have managed to improve the earnings for the booked fixed rate contracts by two and half from 2022 to 2023. This very much higher earnings on our caustic soda contracts will create a very solid base for our CABU business of the coming year. Over to the CLEANBUs. We continued to work to improve our CLEANBU business further, and we were pleased yesterday to announce a three year contract with Raízen, a Brazilian energy company being a world leader in bioenergy and renewables. We'll transport sugar from Brazil into, amongst others, Middle East and India, and we'll transport clean petroleum products back again into Brazil and Argentina.
With Raízen, we have found a partner that shares our conviction that we need to be a leader in the transition to low-carbon world and a low-carbon shipping. We'll work closely with the Raízen to improve the efficiency of our business, matching inbound and outbound shipment for Raízen and find any way we can to improve the efficiency of our business. The CLEANBUs have had a pretty good quarter with a high proportion of days in combination and a much-reduced ballast percentage. The share of the capacity in tanker trade fell from 72% in the Q3 to 49% in the Q4 , just as we explained when we presented our Q3 results in November.
This is a natural variation between the quarters due to the positioning of the fleet, and you should basically look at these two quarters in a total context. Looking at the earnings, the earnings ended at $36,800 per day for the CLEANBUs, which is somewhat lower than the Q3 , mainly due to the temporary lower share of tanker trading for the CLEANBU fleet and also somewhat weaker dry market. We are still outperforming the dry market by 2.2 and are gaining 80% out of the booming LR1 product tanker market.
As a totality for 2022, we had earnings of $32,600 per day for the CLEANBUs, which are matching the very strong LR1 tanker spot market for the year and also outperforming standard Kamsarmaxes by 1.5 in a year which, as a totality, was a pretty strong dry bulk year . We are very pleased with the earnings of the CLEANBU fleet. We continued to work to capture the most we can out of the very strong tanker market. As mentioned, the average of the first and the second quarter of 2022 ended at 60% share in tanker trading, which is substantially up compared to the H1 .
In the Q1 of 2023, we expect 85% of the capacity will be in tanker trading, which is again, we'd call the normal variations between the quarter, but also indicates that we are working to increase the triangulation trading, and we also increase the trading as a standard tanker, which will have a somewhat negative effect on the ballast performance of our fleet. We will continue to improve our, of course, the efficiency of our combination trading. We are adding contracts. We have, together with the Raízen contract and existing contract with BP, 25% of the tanker days of the CLEANBUs are fixed on index-linked contracts, and we hope to increase that further by 10%-15% over the year.
These contracts secure that we can keep the ships in combination trading, a trade where we'll create value, the most value for the company over time. I have to mention also that we are looking into other possibilities to capture value in the tanker market. We are looking into fixing one vessel on a time charter, which will be an exemption from our policy of combination trading, but which will capture value in a strong tanker market. Liv, then I'll leave it over to you.
Thank you. I will, as I usually do, go through some of the aggregated financials for the quarter as well as 2022 in total this quarter. Adjusted EBITDA for Q4 ended at $28.1 million, a decrease of 18% Q-on-Q. That's mainly due to the lower CLEANBU TCE earnings of approximately $8,200 per day, in total amounting to a change of $6 million from last quarter. The fleet utilization was somewhat higher in Q4 compared to Q3, a total positive effect of approximately $1.6 million. Operating expenses increased by $1.6 million, I'll come back to that on the next slide, while administrative expenses increased by $0.3 million, that's mainly provisions for earlier quarters.
Operating expenses per day for the CABU vessels, for Q4 ended at approximately $9,000 per day. That's an increase of $1,800 per day from last quarter. It's mainly due to an incident in Q4, provision for costs related to that incident, 40% of the $1,800 per day. The remaining effect is timing of crewing and procurement. CLEANBU OpEx per day for Q4, approximately $9,400 for the CLEANBUs. That's slightly up from last quarter, approximately $350 per day.
As mentioned earlier, that's a volatility between the quarters, mainly related to crewing and procurement. If we have a look at the total numbers for 2022, you will see in the graph to the left that OpEx for the CABU ended at close to $7,850 per day. That's a 2% increase from last year. The CLEANBU, $8,790 per day, a 6% increase. The underlying operating expenses for the CABU was quite in line with 2021, hence the change of 2% or the increase of 2% that's mainly related to one-offs.
For the CLEANBU, the increase of 6% is due to three vessels ending their guarantee period, as well as some provisions related to a guarantee claim. Unscheduled off-hire, 122 days in 2022, 70% of this relates to four specific incidents, where of 40 days related to COVID infection on board a vessel. We do not expect this to be relevant for 2023. If we look at the remaining 30%, that's 2.3 days per vessel, which is quite in line with what we expect for normal operations. The full P&L for Q4 shown here, if we look at the depreciation, as we have gone through the other items related to EBITDA, depreciation is up $0.9 million.
As mentioned in the Q3 presentation, this mainly relates to depreciation period for dry docking. Net financial cost down by approximately $0.8 million, which is mainly due to FX. Profit for the quarter, $15.3 million, a decrease of 30% Q-on-Q, but still a very solid quarter with Return on Capital Employed of 12%. The entire profit for the quarter paid out as dividends to the shareholder. As Engebret mentioned, $0.30 per share as last quarter. The Adjusted EBITDA for 2022 in total amounted to $107 million. That's an increase of 73% from 2021. CABU TCE earnings increased by $5,200 per day and total amounting to $13.7 million.
The CLEANBU TCE earnings up more than $12,000 per day and total $30.6 million. We sold one old CABU vessel towards the end of 2021, and then we took delivery of three CLEANBUs in 2021. The net positive effect of this fleet change approximately $5 million. Operating expenses increased by $2.4 million from 2021 to 2022, as explained on the previous slide. Administrative expenses increased by $1.7 million. The latter is mainly due to, excuse me, due to a bonus provision that is higher in 2022, as we have had a very strong financial result for 2022.
It's also related to some less costs capitalized on the balance sheet, as well as a higher activity level and hence a higher headcount. If we have a look at the table to the right, you will see that depreciation increased by $2.6 million. The net fleet change is quite limited b ut the change here is then related mainly to the periodization or the effect of the dry docking period taken down from four to two to three years. Net financial items down by $1.1 million. The main change is related to the modification gain in 2022, partly offset by higher interest costs. We also had some positive effects in 2022.
Profit for the year, close to $61 million, an increase of 170% from 2021. Return on Capital Employed, 12% as for Q4 and t he pay-out ratio, including the announced dividends today, 87%, $1.01 per share for the year. Cash ended at close to $65 million at year-end 2022, a slight increase from the end of September. In addition to adjusted EBITDA, we had quite limited working capital effects for the quarter. Dry dock CapEx, $2.5 million. Debt service close to $11 million.
Other financial items is mainly interest income. We paid dividends of $15.7 million. Available liquidity close to $110 million, slightly down from last quarter. This is due to the renewal of the overdraft facility that we renew every year. We decided to decrease the, or reduce the credit limit from $20 million to $15 million due to the very solid cash position. If we have a look at the trend over a longer period, you will see that both solidity and liquidity has improved considerably during the year. Equity ratio has increased from 40% at year end 2021 to 46% at year end 2022. In addition to a strong profit, we as well had positive other comprehensive income. This is of course partly offset by the high dividend payments.
The development in available liquidity is somewhat more limited, but still a very solid cash position to support our business activities. The refinancing of the bank maturity that we have in December 2023 is progressing as planned with favorable terms, but it's still subject to the final term sheet and credit approval. We'll come back to an update on that later. Thank you, Engebret. Over to you again.
Thank you. Now we come to the most exciting part of this show where we look ahead, and looking at the historical development of the three markets and how the forward derivative market prices these markets. We are seeing that our optimism on the tanker market in the white line is shared by the forward markets, marked here in dotted lines. The same is the case for the energy markets where we're seeing the fuel prices are capped at fairly high levels through the three last quarters of the year. The dry market is fairly pessimistic in terms of the derivative pricing. There's an upturn during the spring, but fairly muted levels during the H2 . We believe that the dry market foreign market underestimates the potential in dry market.
If we are right, we are facing three strong markets in KCC, the dry market, the product tanker market, and the fuel market that will drive the earnings of our company and ensure that we continue the strong dividend payments and competitive yield to the shareholders. Based on what we already have booked, a fairly high proportion, the Q1 of 2023 will be a very strong quarter. The CABU earnings will increase to between $28,000-$29,000 per day, which is $2,000-$3,000 above the earnings of the last quarters. It's negatively impacted by the very weak dry bulk market, but supported by the very strong earnings secured on our fixed rate contracts for the year. The CLEAN is back above $40,000 per day.
I hope there are some upside potential here. It's fuelled by the strong tanker market and high tanker trading. On average, we have earnings between $34,000 and $35,400 per day, which is $3,500 to $4,000 above the earnings in the Q4 . This is a good start for the year and we hope also that the coming quarters can show the similar development. Summarizing, we believe that in these periods where we have the very high volatility as we saw last year, still high risks, both macroeconomic and geopolitical, our concept proves its value. We deliver the lowest carbon emission shipping service through our efficiency.
Through the diversification effect of being in three markets and the solid contract base, we have lower earnings volatility, and our efficiency secures that we deliver higher earnings than the standard markets over time. That's why we believe that the KCC share is among the best investments you can do in the shipping sector, and we will strive to create value for our shareholders. Thank you.
We have two questions today. The first one is: when will we see the effects of CSS CABU bookings? It seems the Q1 guiding doesn't fully reflect this with U.S. dollars $3,000 per day, quarter-on-quarter increase for CABU.
That's right. As, as I commented, the first quarter results are negatively impacted by an extremely poor first dry market in the early part of this year. Given that the CABU is only trade to Australia, there's also been, I would call, the Pacific market, dry market, that's been even weaker than average. That, that's the main explanation, a weak dry market. Also partly there are somewhat lower caustic soda volumes in the Q1 compared to the average for the next quarters. That's another effect impacting the Q1 results. That means Q2 , Q3 , Q4 , you will see better results for the CABUs. I am convinced about that.
Will you do more CoAs or stay in the spot market given the strong product market?
We will maintain a high, high share of capacity in the spot market. As I mentioned, we aim to increase the share booked on index linked contracts, where the earnings will vary according to the spot market, up to maybe 35%, 40%. Then we get the benefit out of the spot market. As I mentioned that we are considering to take one vessel out into the time charter market, but that will be limited to that single ship.
One more coming in. Regarding your CABU TC guidance, what specifically have you assumed for the dry bulk days?
The dry bulk days are, in fact, not much days left. It's actually a high proportion of fixed voyages. It is reflecting the foreign market for the coming months, which I think is pretty bad still. It's down at $7,000, $8,000 per day for Capesize.
That's it.
That's it. Thank you all for joining. Stay tuned. Thank you.