Good morning, everyone, and welcome to the fourth quarter 2023 results presentation of Klaveness Combination Carriers. My name is Engebret Dahm . I'm the CEO of the company, and together with me, I have Liv Dyrnes, the CFO and Assistant CEO. Please use the webcast solution to write your questions, and we will go through it after the presentation. Fourth quarter was a very strong quarter and ended at just spectacular 2023. The strong product tanker market and also an improving dry bulk market in the fourth quarter helped us achieve $36,823 per day as an average for our CABU and CLEANBU fleet. That is about $3,000 above the mid-range of the guiding we gave back in October last year. It reflects a premium to the dry bulk market earnings of 2.6 and a premium to the product tanker of 1.2.
Looking at the EBITDA, we are seeing a 30% increase in EBITDA compared to the second quarter, ending at $36.5 million. This was positively impacted by the continued strong carbon performance, but it's mainly the 35% increase in CLEANBU earnings that explains the solid EBITDA development. We can continue to live up to our dividend policy of paying minimum 80% of the free cash flow as dividend to our shareholders. The board decided to increase the dividends from $0.25-$0.35 per share for the fourth quarter. This equates to a running yield of around 14% compared to yesterday's share price close. Last four quarters, including the fourth quarter, we have as a company paid out $72.3 million to our shareholders, which is quite solid. Looking at 2023 as a whole, it was the best year ever for KCC. It's a year with record profitability.
It's a year where we have showed solid progress in strengthening the resilience of our business, and it's a year where we have advanced well on our decarbonization ambitions. We got good help from the markets, especially the product tanker market. But it's truly the team in KCC and an ownership manager at KSM that has made 2023 just a fantastic year for KCC. So we'd like to use this opportunity to thank them all for their hard work, their dedication, and support to our company. Looking at the three markets that impact KCC earnings, starting up with the product tanker market in blue, which is showing the LR1 spot market.
The market continued through the fourth quarter to improve, but there were large regional differences in the market, where especially the Atlantic market and the US Gulf market were substantially stronger than the average in both December, November, and December.
The market spiked towards the end of December, mainly due to the Red Sea situation where product tanker started deviating away from Suez Transit in December. This strong market development has continued into January as practically Suez has closed for a large part of product tanker owners. The situation has calmed down slightly in February, normalizing to some extent, finding a path for operating the fleet on longer deviations, mainly around Cape. The dry bulk market has also improved in the second half of the fourth quarter, peaking in mid-December and has in December and January calmed down somewhat, mainly due to seasonal factors, due to the start of the Chinese New Year, now in February. Fuel prices have been flattish despite the large instability in the Middle East since the start of the Gaza War.
Looking at the product tanker market, it is a market that, in our opinion, has very solid fundamentals. On the consumption side, we see how the IEA estimates for oil consumption and oil production, they expect an increase of 1.4 million barrels per day in consumption in 2024 and a production increase of 0.6 million barrels per day, which is pretty solid despite still weak demand in Europe and in China. The OECD stocks are below the five-year average. You see the black dot to the left and hence indicating that there are no overhang and indicates a fairly balanced oil market. We note that the special inventory situation in Europe is low. That could have a positive effect for the market for the next months. The ordering of product tankers has increased substantially through 2023. It now counts around 13% of the fleet.
But when we take into account the lower ordering of crude tankers, the total tanker order book ends up at 7%, which is still at a reasonable level. A large part of the ordering of product tankers are Aframax, which are switching between Aframax crude and products. So we believe that in totality, looking at the order book, it's still at a reasonable level that should have no reason for concern. The drought situation in Panama and the more recent disruptions of transit through the Red Sea and Suez has had a significant positive effect on an already very tight product tanker market. Panama transits are marked in black, is 26% lower than in January 2023 and 43% lower than in 2022. The Suez transits have fallen by 40% since the second half of last year, with the fleet deviating around mainly the Cape of Good Hope.
The sailing distances are lower, which effectively increased the ton mile demand. Clarksons estimated 2%-3% increased ton mile demand only from the Suez situation. This effect may be short-lived. We know that in Panama, the previous El Niños, the water depth bottomed out in April, May, and normalized through the summer. This is likely to happen again. What's going to happen in the Red Sea, which will decide the transit situation through Suez, is difficult to estimate, but it's likely that it will be possible to find a way to reopen the trade over the next months. Irrespective of this, there are a large disruption in the product tanker market caused by the ban on Russian oil and oil products in the G7 and EU.
Here we just see one example with the increased demand for Russian diesel into Brazil, which before January was 0% of the Brazilian imports and now in January 2024 is 86% of the total market. So this disruption of trade leads to longer sailing distances and hence enhanced more ton-mile demand. Looking at the dry market, the fundamentals are not as strong as in the product tanker market, but we believe the fundamentals are improving. The graph to the left, we see the demand, the so-called deadweight demand, has increased by 4.4% in 2023, which is solid and is driven mainly by strong Chinese demand from, amongst others, coal and bauxite. So the big question is whether China will maintain the solid growth given the problems in the property sector. That remains the main risk in the dry market at the moment.
Looking at the graph in the middle, we see that the port turnover time, which is an indication for the congestion, has increased in the second and the fourth quarter of last year, which are then opposite development from what happened in the second and the third quarter. So the increased port turnover on time implies lower efficient fleet growth and hence is a strengthening factor for the dry market. As illustrated in the graph to the right, the supply situation in the dry market is a positive sign. The ordering of dry ships has increased over 2023, but is still at the low level of around 8% of the fleet. And that translates into very low fleet growth for the dry market for the coming years, between 2% and 2.3% for the next for 2024 and 2025.
2026 also looks to have a low fleet growth, although that could be more in orders coming into the order book for 2026. Also for the dry market, the Suez and the Panama disruption is lending support to the market. Again, we see the Panama transits already started to fall in the second half of last year, which has led to the fact that the long-haul trades from the U.S. to Asia on grains have been diverted to alternative routes. We see it's down 60% compared to the similar periods the year before. The fall in the dry transits is less dramatic, around 25% lower transits in January and February compared to the same period last year.
So looking at the possible effect on the markets, we see that the combination of the Suez disruption and the Panama disruption, assuming a full closure of both canals, could indicate a 3%-4% increased utilization in the markets. So again, over to KCC's performance, our combination carriers have three unique value creators. They have a higher efficiency due to lower ballast. They have a diversified earning space given that they are both in the dry and the tanker markets and they are more flexible vessels where we can shift the vessels to the market that is the relatively strongest. This graph shows the development over the last 10, 11 years with the KCC average time charter equivalent earnings in the columns and with the product tankers in the blue line and the dry in the gray line.
It shows a low volatility of earnings and also that our company has managed to outperform the standard markets in most years. For 2023, the average market earnings for the fleet was $34,983 per day, which matches more or less the product tanker spot market and is 2.5 times the earnings of the dry markets. You see the similar development looking at the last five quarters where you have a larger stability of earnings than the underlying markets. Again, we see that in the first half of last year, we underperformed the standard product tankers, while in the second half of the year, I'm pleased to see that we overperformed the market. As mentioned, we ended the year being at par with the product tanker spot market for the total year. For the dry market, as mentioned, we were 2.5 times the standard market.
The earnings of $36,823 is, as mentioned, a very strong performance for our company. Looking at the CABUs, it was another successful quarter. We maintained a high share of the capacity in tanker trade, 53%, which is then transportation of caustic soda to Australia. The strong efficiency of the CABUs was maintained in the quarter. 95% of the capacity was in combination trades, leading to only 10% ballast for the fleet. The earnings of the CABUs ended at $36,110 per day, which is around $1,000 per day lower than in the third quarter. We got the positive effect of a stronger dry market, which increased significantly the earnings on the dry market. But the somewhat weaker fleet productivity in terms of waiting time and scheduling left the end of the results somewhat lower.
The total earnings for the year for the CABUs ended at $34,700 per day, which is close to $8,000 higher than in 2022. We also, for the CLEANBUs, we maintained in the fourth quarter a very high share of the capacity in the product tanker market due to the strong tanker market and also the relatively high difference in earnings between the product tanker market and the dry market. We had several vessels trading in the Atlantic, and we were successful in taking benefit of the strong product tanker market in the Atlantic and U.S. Gulf in November and December. We also fixed one vegetable cargo, which is recorded as tanker trade. As a consequence of somewhat more optimistic trading this quarter, the share in combination trade fell from 84% in the third quarter to 78% in the fourth quarter.
But we were happy to see that the effect on ballast was minimal. In fact, we managed to reduce the ballast level down to 14%. So the result for the CLEANBUs is very strong for the fourth quarter, with a TCE of $37,540 per day, which is up $9,600 per day compared to the third quarter. The full year of 2023 ended at $35,214 per day, which is the highest earnings of the CLEANBU ever. So Liv, will you take over and lead us through the results? Thank you.
Yes. Thank you. Let's see. As usual, I would start with EBITDA, and I will start with fourth quarter before I move on to the full year of 2023. EBITDA for fourth quarter was $36.5 million, an increase, as Engebret mentioned, of more than 30% Q-on-Q.
As you can see from the graph here, the main driver is CLEANBU revenue and then higher TCE earnings. Engebret as well mentioned that the TCE earnings for the CLEANBUs increased by $9,600 per day from last quarter. For the CABUs, the TCE was a bit down, but we had no dry dockings in Q4, and hence we saw a positive effect of $2.6 million compared to last quarter. OpEx quite stable Q on Q, while SG&A increased by $0.7 million. This is mainly due to provisions made at year end and some higher project costs. Over to operating expenses. As I usually say, we continue to see normal variations between the quarters. However, on a full year basis, operating expenses increased by 3% from 2022 to 2023.
As you can see in the graph to the left, the CLEANBU increased by 8%, while the CABU OpEx actually was down 1%. All in all, 3% increase, which is quite good, I think, in this inflationary environment. It's partly as well driven by condition-based maintenance, which means that we might see some more volatility in the OpEx. One comment related to off-hire for the year. Unscheduled off-hire was 2.3 days per vessel in 2023. We're down at more normal levels than what we saw in 2022, which was impacted by some large one-offs. The 2.3 days per vessel, it's a bit higher for the old vessels and a bit lower for the CLEANBUs, as we expect. We will dry dock 7 vessels this year, and you can see the full overview of both off-hire and costs on slide 41.
Over to the full P&L overview for Q4. Net financial items down by $0.5 million. It's mainly due to positive effects in Q4, somewhat offset by higher interest cost. Hence, profit after tax $25.9 million, an increase of 58.7% from last quarter. This corresponds to return on equity employed on an annualized basis for Q4 of 19% and return on equity of a strong 29%. Engebret already mentioned the increase in dividends and the yield of 14%. Over to full year 2023. EBITDA for 2023 $134.9 million, an increase of 26% from last year. It's mainly driven by CABU revenue. TCE earnings increased by 30% from 2022 to 2023. This amounts to approximately $21.5 million. Then we had less off-hire for both fleets, in total $3.8 million. And the CLEANBUs as well had somewhat higher TCE earnings, in total $6.9 million.
These three amounts is in total the $23.2 million and $9 million, as you can see, an increase year-on-year. OpEx, as mentioned, 3% up year-on-year, and SG&A an increase of $2.5 million. It's mainly related to higher underlying costs as well as a higher activity level, and then mainly related to project activity, both for the CABU 3 project, the new builds, as well as energy efficiency investments. We expensed the CABU 3 new building project expenses for the first half, and then we started to capitalize these costs from second half. The full P&L overview for 2023 compared to 2022 shows that depreciation is quite stable year-on-year, as expected. Net financial items increased by $1.5 million, and that's mainly due to a positive one-off in 2022 related to modification gain when we refinanced some debt.
Then we have somewhat higher underlying interest costs in 2023 compared to 2022, but that is partly offset by positive effects. Profit after tax, hence, ends at $86.9 million for 2023, an increase of close to 43% from last year. As you can see to the right, return on capital employed 17% and return on equity 24%, which ends a record year for KCC. Dividend per share in total for the year $1.25, which is well above the policy of minimum 80% distribution. Over to the balance sheet. No large changes Q- on- Q because we have had no major events in the quarter. Hence, the equity ratios increase slightly and continues to be at very solid levels, now at 57.6%. Lastly, some comments related to the cash flow for the quarter. As mentioned, no large events, and hence you here see the usual items.
EBITDA, change in working capital, some CapEx, debt service and dividend. Based on this, both the cash and the available liquidity increases by close to $3 million for the quarter. Available liquidity ends at $181 million. As usual, I will also like to mention that the very solid cash position is as well due to the commitments we have related to new builds, as well as energy efficiency investments. We as well renewed the short-term overdraft facility that we have had over the last years. This is a working capital facility in the chartering company. However, we decided to scale it down a bit to $8 million, both due to the very solid cash position that we have in the group and due to the need that we have for this facility. Yeah, so that ends my presentation. Over to you again, Engebret.
Thank you, Liv.
Decarbonization is, as we like to present to you, central to everything we do. It impacts the way we work with our customers, the contract format. It impacts how we finance our company, our reporting, how we trade and operate our vessels, and the focus we have on improving the energy efficiency on our fleet. I'm pleased to say that our main KPIs for decarbonization, which is the carbon intensity or the so-called EEOI, measuring the carbon efficiency of the transportation work, has improved in 2023. The EEOI was down from 6.9%- 6.5% in 2023, a 6% reduction. We have, as mentioned, made large investments in energy efficiency measures on our fleet. We have in total invested to date, used $13.5 million in various initiatives, where the large retrofits of shaft generator and air lubrication system on two ships count for a large part.
We have, in addition, committed in total $19.4 million in 2024 and 2025, which is mainly linked to retrofit of shaft generator and air lubrication system on four vessels. So if we add it up and together, the total committed funds are $32.9 million, which is surpassing the $25 million raised back two years ago. In order for decarbonization to be sustainable, it has to be profitable. And the large investments we do in our fleet are profitable based on the current fuel prices. Looking to the graph to the left, the current fuel price is currently $640 per tonne. If we add the cost of carbon within the EU Emissions Trading Scheme, the price increases to $860 per tonne. But you see a still enormous gap up to the costs of new zero-emission fuels.
Looking at methanol, which rumors are saying will be priced currently at the heavy fuel equivalent of $2,500 per tonne. So we are convinced that fuel prices for the shipping industry will increase over the coming years. Shipping was included into the EU's Emissions Trading Scheme and subject to a gradually increasing share of carbon emissions to be reported and buying emissions allowances. There are new initiatives coming with the mandatory blending of fuels in the EU from next year, and IMO is likely to introduce new measures in 2027. So we are convinced that the investments that we do already, the ones that were made over the last three years, have a payback based on current fuel price of $6.9, as you see at the graph to the right, that the payback will decrease further and make it even more profitable.
The graph shows that the value of efficiency increases as fuel prices increase and the payback decreases as a consequence. We are making large efforts to have and maintain an environmental strategy, which is both ambitious and at the same time realistic, built on specific and identified initiatives. We'll make large efforts in our reporting, making it transparent and also of what we are doing, how we progress, and also the risks involved in the transition that we, as a company and as our industry and our customers' industry, have started. I'm very pleased to see that also the third parties are noticing what we are doing and what our strong finance team under Liv has been doing. We last week received the A-rating from CDP, the world's leading disclosure system for climate environmental reporting.
Being on the A-list is a very inspirational and a big encouragement to all of us in our company. From our understanding, it's the only A-rating in Norwegian shipping. Looking ahead, KCC is well positioned for what looks to be another exciting year in our main markets. The increase looking on the CABUs, the graph to the left shows that we have been able to increase further our market share in the Australian market and the number of caustic soda cargoes booked for next year. Looking to the graph to the right, you see that what we have booked covers around 95% of the tanker capacity of the CABUs in 2024. The booked contracts are a mix of index-linked or floating-rate contracts and fixed-rate contracts.
As you will see from the graph, the share of the fixed-rate contracts have decreased from around 74% of the contract days to 40% of the contract days in 2024. The freight rates fixed for the fixed-rate contracts are somewhat lower than in 2023, mainly a reflection that the market last autumn in 2023, when the contracts were negotiated, were substantially weaker than the similar time in 2022 when the 2023 contracts were negotiated. To date, the index-linked contracts have overperformed the fixed-rate contracts, and in 2023, it was the opposite. Many analysts have noticed that Alcoa, one of our main customers in the trade of caustic soda into Australia, have decided to close the refinery in Kwinana, closer to Perth, which will take place during the summer of 2024.
It is the oldest and smallest of the Australian alumina refineries and is the least efficient of Alcoa's three plants in Australia. If we look on the totality of the Australian alumina refineries imports, which is the graph to the right, we see that closure will have an effect of 0.3 million tonne lower caustic soda imports into Australia. So assuming that KCC maintains its market share with the Australian alumina industry, it will have an impact of three to four cargoes per year. We expect to maintain volumes and hopefully improve volumes going forward. We expect that the possible reduction in the shipment for the alumina industry will be more than offset by the growing lithium imports to the growing lithium industry in Australia. We made last year the first shipment of a small parcel of 10,000 tonnes into one of the refineries.
Two refineries are now up and running and are ramping up production. The third one will start up production next year. I had the pleasure of visiting all of these potential customers in Perth in January. It's good to see the optimism and the growth ambitions of that industry going forward. In 2024, we have demonstrated 2023, w e have demonstrated the benefits of a very high trading flexibility of our CLEANBUs. I just wanted to show you an example. Here we have an important trade, a shipment of CPP into the East Coast of the U.S. The fact that the CLEANBUs are both a dry bulk ship, a tanker for oil and a tanker for EC chemicals, we have more optionality and more alternatives for what will be the next voyage after coming into the East Coast.
We could take clean petroleum products out of the U.S. Gulf out of South America or to Europe. We could take dry from the U.S. Gulf into the Far East or to Europe. We could if we go south to Brazil, we could take dry sugar grains out of Brazil and Argentina into Europe or the Middle East or the Far East. And thirdly, we can take caustic soda into South America or into Australia, and we can take veg oil out of South America. So this optionality creates value. We have more alternatives to choose from and to choose the one that is relatively highly priced and where we have cargoes that fit the dates of the vessels. This has created value in 2023, and we are convinced it will create value in 2024.
Now this translates into our ability to switch capacity between the markets which are the strongest. This graph shows the LR1 tanker market in blue columns, dollar per day, compared to the percentage of the CLEANBU capacity employed in the tanker market. As we mentioned already, the CLEANBUs maintain a high share of capacity in the tanker market in the second half. Also in the start of 2024, the share has been very high due to the extraordinarily strong pro-tanker market. For the CLEANBUs, when introducing the fleet over the last years, an important thing and important target for us has been to increase the acceptability of the CLEANBUs with demanding customers in the oil industry. We're very pleased to see the very strong progress we have made through the year.
Our target is that wherever we sail our ships and our main trades, all terminals, all customers should accept the ships. We still have a little way to go, but we have come a long way to secure that we get our ships traded into the best trades for the ships. Our business is to date, to a large extent, based on repeat customers in repeat trades. The graph to the right just shows the percentage of the capacity that are on fixed-rate contracts or term charters, on index-linked contracts or open and trading in the spot market. We note that for the CLEANBUs, around 20% of the capacity in the tanker capacity of the ships are reflecting one ship that is chartered out on term charter up to January 2025.
The contracts booked to date, which are all index-linked, account for 13%, leaving 66% of the capacity not committed. We expect to increase that the share of contracts over the year. So with the limited tank fixed-rate tanker market coverage, 40% for the CABUs and 20% for the CLEANBUs, we have a large exposure to the development in the product tanker market. This is also the case for the dry bulk market exposure. We have 25% of the total dry bulk days for the CABU and the CLEANBU fleet fixed on fixed-rate contracts. So looking at the future market development, the current market forward pricing, which is indicated here in dotted lines, are a good indication for what happened. But as we normally like to say, it's it has shown that it's not always the best indications going back in time.
Looking at the product tanker market in the dotted blue line, we see the first quarter, the start of the year, reflects the spike in the market that's already happened. But still, the forward market, despite the backwardation, shows an optimism that the market remains strong through 2025. Another positive element looking on the black line is that the forward market expects a substantially higher market in 2024 than we have seen in 2025, which is good for KCC having a relatively strong product tanker market and a relatively and a very strong product tanker market looking into 2024. Our market view, as I already mentioned, we believe in a strong product tanker market through 2024. And we also believe that the dry market will keep up well and can again surprise on the upside. The start of 2024 has been strong.
90% of the capacity has been booked for both the CABUs and the CLEANBUs. So our guiding for the first quarter term charter equivalent earnings for the CABUs are between $32,000 and $33,000 per day. It's somewhat down compared to the fourth quarter, mainly due to weaker dry bulk market in from mid-December. Looking at the CLEANBUs in the middle, it's a spectacular increase in earnings, increasing by 40% compared to the fourth quarter, a guiding between $48,000 and $50,000 per day. And the average guiding is between $40,000 and $41,500 per day. So looking ahead for the remaining 2024, what I explained, we are optimistic for the markets. But I would like again, would like to stress that the markets are likely to remain highly volatile, far more than a normal seasonal variation should indicate.
We're also facing an unprecedented geopolitical risk and also the macroeconomic risks mainly relating to China. So with our high trading flexibility and diversified earnings base, we have shown that we have a lower risk business model than most other tanker and dry bulk owners. At the same time, we have shown that we've been able to get the most out of the markets that are the strongest. And this can be illustrated in this graph where we measured the returns of invested capital against the volatility of earnings. And in the graph, we have compared KCC to most of the other listed dry bulk and product tanker and some chemical tanker companies. And from the graph, you see the returns on the vertical axis and the volatility on the horizontal axis.
In this comparison, we see that KCC has the best relation between risks and return. It's the reason why we continue to claim that KCC has the best risk-adjusted return in the shipping industry, in the tanker and dry bulk industry. We're working hard to keep it that way going forward, which is important to secure as continue strong results relative to the underlying underlying markets and a continue high dividend yields to our shareholders. We will present the total annual report and the ESG performance report each March. Please tune in. Then we are ready for questions.
Yes, Engebret. We will start with dividends. Will there be a dividends increase in 2024?
I think, as we normally like to say, the dividend, of course, will will be impacted by our results, which again is a reflection of the markets. The dividend policy is constant and is maintained. So given our optimism of the markets, I'm pretty certain there will be a very good dividend yield. But whether it will increase compared to 2023 is too early to say.
Since we're on that topic, a question along similar lines that just came in. How should we think about your dividend capacity this year considering the high DD and EXT CapEx? Is it fair to assume that you will draw on your cash balance or the RSF to finance the ECT CapEx?
That is right, that we have already funded both the large energy efficiency investments that are made are already funded. And that goes the same with the new building and the installments that will be made to the shipyard. So we do believe that the investment itself should not impact the dividend potential. But of course, the off-hire could have an effect.
And how are you looking at Q2 versus Q1 and Q4 based on the fixtures you've done so far?
Again, our fixtures are, as mentioned, 90% of the first quarter, and we have limited fixtures beyond what we have done on contracts for the remaining three quarters of the year. But based on, for instance, what we see on the optimism in the dry market and what looks likely to happen from it, for us, it seems that the second quarter should be another strong quarter for the company. But again, it remains to be seen given the volatility in the markets.
Another question on dividends, but I think you just covered it. So from the same sender, do you expect finance costs to stay at Q4 levels, or is this quarter more impacted by one-offs?
I think that would be a question to Liv more than to me.
I don't have a mic, but maybe you can hear me. I think we have some positive one-offs on effects in Q4, but I think underlying wise, it's quite comparable. Our Q1 will be quite comparable to to Q4.
Thank you, Liv.
And how are you thinking about more new builds considering high new build prices, but also the renewal requirements of the fleet?
I think we have repeatedly said that we believe we have a unique concept that we should over time be able to expand. And you are right. Maybe the reason why asking is that we haven't been too clear about our growth emission plans.
We are working to develop new concepts. We are working on a second generation CLEANBU design. So we are, as an administration, are working as a company, are working to make sure that we have the concepts that are profitable and we can act when the right timing is there. At the moment, the newbuilding market is very tight. It has tightened since we did the contracting of our CABUs last year. And again, we will use efforts to ensure that we follow the newbuilding market and that we will try to position ourselves to act when the market timing is right. There are no immediate need for any contracting in KCC.
The remaining two old CABUs that is not yet replaced by the new building program are expected to continue trading up to the end of this decade.
A question on the CLEANBUs. Are there any CLEANBUs which trade only as tankers, i.e., no dry bulk cargo?
Yeah, we have one ship, as mentioned. We have one ship chartered on a 2-year charter, which expires in January 2025, which is only trading as a tanker. And that is based on our policy that when we charter old ships to others on either short term charter trips or at term charter, it's always only as a tanker or alternatively as a dry bulk, depending on the market situation.
Otherwise, the other ships are, as we saw, has a high share of the capacity trading in combination trading, but in a certain part of the year or in certain months, some of them may trade as a tanker just as we did in fourth quarter in the trades between U.S. Gulf and Brazil, where we benefited from a super strong product tanker market in the Atlantic.
Another question on future fixtures. Should we expect you to fix more capacity longer term? And if you do, is it possible to see you fix ships on long term TC contracts, or would you sign up COAs?
One of our targets for this year is that we will try to develop fixed-rate contracts for our CLEANBUs, which is not easily available in today's market given the very spot-mindedness of the business, where the long term fixture possibilities is mainly linked to term charters. So we do not expect to increase substantially our share of the fleet on term charter. So our target would be linked to finding contracts of affreightment that has a component of fixed rate going forward.
And a question about the Silverstream installation. Did you expect a huge impact by the air lubrication system in the context of EBITDA?
I can't give you an exact figure on effect on EBITDA, but it's clear that the Silverstream in combination with the shaft generator installation has shown a result of a 10% reduction in fuel consumption, which again has a significant impact on the EBITDA and the results of the company. And as we increase the installations over this year and next year, this will have increasingly important effect on our results.
Yeah. And a question here. In a scenario where the dry bulk market in 2024 is in line with 2023 levels, how much impact would CABU TCE rates have seen from the new CSS contracts versus the 2023 contracts?
So the question was regarding the dry market effect on the caustic soda.
2024 versus 2023 levels.
So again, given that we already have booked up the capacity, these ships will trade in combination in 2024. So meaning that the dry market, the state of the markets would have very limited effect on the trading in terms of allocation between dry and tanker trade in 2024, but because it's more or less already given. So when it comes to the CABU earnings, it's then mainly linked to the strength of the tanker market. And our contracts are linked to MR tanker indices. And if you believe in a strong MR tanker market, then also the earnings for the caustic soda shipments and hence the term charter equivalent earnings of the CABUs will be strong in 2024.
And a follow-up question on CLEANBUs. If current relative strength in tanker versus dry rates persists, could we expect CLEANBUs to remain at 75%-80% tanker days in all quarters in 2024?
That is right. I think this 75%, of course, is partly reflecting the one ship on term charter. So if you deduct that, you may be around 2/3 of the capacity in tanker trade. And if you have this big gap between the dry bulk and the product tanker market, you can expect that this share will be continued.
Okay. And what is your stance on the Rio Tinto vessels? When do you think they will be available for a potential acquisition?
Rio Tinto is an important customer for KCC, and it has been that way for 30-40 years. They have their 2 ships. They operate in their own trades.
From our understanding, they would like to keep it that way, at least for the next years. So, at the moment, we do not expect that there will be any potential. But of course, as we share our thoughts with Rio Tinto, we believe that we can operate these ships more efficiently given the scale of our operation. But that is a choice that we respect that Rio Tinto decides what's best for themselves. Okay. That's it. Thank you.