Good day and thank you for standing by. Welcome to the MPC Container Ships Q1 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Alternatively, you may submit your question via the webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today, Mr. Constantin Baack, CEO, and Mr. Moritz Fuhrmann, CFO of the company. Please go ahead.
Thank you, operator. Good afternoon and good morning, everyone. This is Constantin Baack, CEO of MPC Container Ships. As announced, I'm joined by our CFO, Moritz Fuhrmann. I would like to welcome you to our Q1 2023 earnings call. Thank you for joining us to discuss MPC Container Ships first quarter earnings. This morning, we have issued a stock market announcement covering MPCC's first quarter results for the period ending March 31st, 2023. The release, as well as the accompanying presentation for this conference call are available on the Investor and Media section of our website. Please be advised that the material provided and our discussion today contains certain forward-looking statements and indicative figures. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with our business.
Before we start with today's presentation, a few words from my side reflecting on the start of the year and the first quarter. We are pleased to report another solid performance and a strong quarterly result today, despite prevailing macroeconomic and geopolitical uncertainties. The container market has clearly come down from the historical highs seen in 2021 and early 2022, yet the charter market is still at very healthy levels. The freight market has recently shown signs of stabilization, and the charter market has actually improved during the past weeks and months to solid levels well above historical averages, both in terms of charter rates and charter periods. At MPCC, we continue to focus on being agile and well-equipped to adjust our operations and strategy to fit the prevailing market conditions.
Be a good and reliable partner to our customers and of course, to create value to our shareholders. We have been able to capitalize on the strong markets by locking in long-term time charter contracts at very attractive rates and selectively sell vessels. We have placed a clear emphasis on returning proceeds from profitable operations to shareholders by way of significant dividends, and at the same time, we also continue to deleverage the company and currently operate with an industry-low leverage. During the first quarter, as part of our ongoing strategy for selective portfolio optimization, we have announced several new and accretive portfolio measures, which includes continued divestment from older vessels and investment in younger, larger scrubber-fitted vessels with existing charters attached. These measures are not only earnings accretive, but also important efforts to maintain the long-term competitive position of MPCC.
We will now run you through the first quarter, the markets, and an outlook for the company in more detail, and I would like to hand over to our CFO, Moritz Fuhrmann, at this point.
Thank you, Constantin. Looking at some highlights, at the start of the presentation, we're very happy to report, operating revenues coming in strongly at $180 million, mostly in line with expectations, adjusted for some one-off effects, of $25 million concerning the redelivery of AS Carlotta. The net profit came in at $120 million, again, adjusted for some one-off effects in the quarter. We're talking about a net profit of close to $90 million, on which basis the board has declared a recurring dividend of $0.15 per share. At the same time, since we're emphasizing on returning capital to shareholders, we continue to operate on an industry, low leverage of 15%, slightly down from last quarter, which was 16%.
While we continue to return capital to shareholders, we also continue to optimize the fee portfolio that we have. We acquired 2 ships in the 1st quarter and took also delivery of one 2,800 TEU ship and one 3,400 TEU ship. Whilst we were able to sell one older vessel in the portfolio, which was 20 years old and was a part of the Blue Water joint venture. From that perspective, also being able to streamline the corporate structure. Since the end of last quarter and earlier this year, the charter market or the container market in general has developed relatively favorable.
There was a dull period starting into the year, but more recently, we have seen some very strong fixtures, not only in our portfolio, also in the wider market. Very happy to report that we've been able to lock in some strong charter rates, but also probably more important, strong durations of up to one and a half years. Despite some clouds at the horizon from a container market perspective, we strongly believe that MPCC is well positioned within the feeder segment that clearly shows a decent supply demand fundamental going forward. Despite the aforementioned market uncertainty, we are very well positioned with a revenue backlog of $1.3 billion.
For 2023, we already locked in almost 90% of open days, so very little exposure to potential market volatility. On that basis, we are reconfirming the guidance that we put out in the last reporting of $610 million-$630 million revenue and $420 million-$450 million EBITDA. Looking at some company KPIs in more detail. Again, gross revenue came in strongly at $180 million. EBITDA, $141 million, adjusted for one-off effects. This is $110 million. Net profit at $120 million, again, adjusted for one-off effects, $89 million.
The balance sheet has grown slightly on the back of the acquisitions that we made in Q1, but also on some new building installments that we paid. Net debt almost unchanged relative to last quarter. Industry low, we're talking about $28 million. The leverage ratio as mentioned, slightly down from 16% to 15%. On that basis, again, dividend per share of $0.15 in line with last quarter. We should mention that the $0.15 is excluding the $0.07 that we already declared and distributed as event driven dividend in February 2023, so $0.22 in total. Operational KPIs, very happy to report that OpEx has come down since we are seeing that COVID impact is slightly fading out.
Historically we have seen some one-off effects relating to COVID in operating ships that is now phasing out. Average CCE also mostly in line with last quarter. Utilization is slightly down due to a higher number of dry dockings and some repositioning of vessels in our fleet. Looking at the commercial side of things, again, very happy to report that since last reporting and to date, we've been able to fix seven vessels in the market. I think it's fair to say that both charter rates but also duration, as you can see, shows a very positive trajectory and is also above our expectation.
For the time being, there's no sign of slowdown, as we continue obviously to talk to the operators in the market and we see a decent demand for feeder vessels. That's on the chartering side. On the portfolio side of things, again, as mentioned before, we've been able to acquire two scrubber-fitted secondhand ships in the market and took delivery of them within the Q1. Both vessels, obviously important to mention, are accretive both from an EPS and a DPS long-term perspective to the overall portfolio, and we've been able to sell out one of the older ships in the portfolio.
At the same time, we obviously continue to invest in the fleet, also together with operators to make our fleet as fit as possible for the upcoming regulatory environment that will obviously have an impact on, on the shipping industry. Looking at the cash development over the quarter, not much to report. Almost unchanged, slightly down $7 million. Obviously, strong operating top line translated into operating cash flow of $155 million. Investing cash flow, aforementioned vessel acquisition, new building installments, but also dry docking related expenses of $17 million. Net interest expense, $2 million. We also draw down a new facility of $8.3 million in Q1 to support the vessel acquisition, we just mentioned.
We, at the same time, continue to pay down on the existing debt facility, so $50 million towards the H Corp facility. Most importantly, for investors, we continue to pay distributions in the amount of or in the tune of $66.6 million recurring and $31 million event driven early in the year in February 2023. Talking about dividends in more detail, obviously emphasis remains on returning capital to shareholders. Again, 15 dollars cents declared in for Q1 this year being paid out in June this year. What is important to mention in regards to the recurring dividend is that historically we have been paying out dividends from our share premium account, which by now or by paying this dividend will be depleted.
For this time, but also going forward, we will pay $0.12 from the share premium and $0.03 from the retained earnings, whilst going forward, these dividends will be paid entirely from retained earnings. Over time, and since we embarked on the dividend journey, we have distributed more than $600 million to investors, implying a 50%-55% dividend yield if you were to buy in the stock, Jan 2022, and implying a 24% compelling dividend yield if you were to buy in the stock in Jan 2023. From that perspective, very impressive, value proposition to investors. On that happy note, hopefully I'm passing over to Constantin and the market section.
Thank you, Moritz. I would like to now continue with a brief market update. Please turn to slide 9. Starting off with some observations from the container freight market. The graph on this slide shows the key indicators for the ocean freight, namely the freight rate index, as a dark blue line and the annual TEU throughput as a red line. What you can see is obviously the steep increase that we have observed in 2021 and peaking in mid-2022 and then obviously coming down as communicated before and as observed in the market, in particular in Q3, Q4, last year, but also still early this year. We now, you know, recently have observed somewhat of a stabilization of freight rates, at least on certain trades.
It's worth noting that we are still 15%-20% above historical averages when you look at freight rates in general, at least when you look at the CCFI composite index. Next to the CCFI on intra-regional trades, the markets have come down not as much. Admittedly, they were also not as high. There we have only seen around 40% drop from an all-time highs. That is just a side note. We'll touch on the, let's say, nuances of intra-regional trade versus the global market as we go through the market section. Let me spend a few words on inflation and interest rates. Of course, certain inflation indicators are still high.
However, they have cooled off a bit, and in particular, energy and food inflation. Core inflation remains a bit sticky. At the same time, we also look at a rather tight labor markets, in particular in several advanced economies. We have also seen central banks obviously increasing interest rates, although going forward a more moderate approach is expected. In terms of GDP growth, we have basically seen a flat development compared to the last quarter that we reported on a slight reduction by the IMF. However, we still look at a growth for 2023 of around 2.5%-3% on GDP side. Container demand pretty much in line with GDP growth, also somewhere around 2.5% for this year.
For next year it is expected to be significantly stronger. Two important aspects when looking at the picture is also the question of regionalization and also intra-regional trades. We'll touch on that in a bit more detail as we go through the presentation. I think what is worth highlighting is that exports out of China into the US in particular, have come down, but it has been picked up to some extent by other Southeast Asian countries in terms of volumes going into the US out of Asia. On that note, I would like to move on to the next slide 10. Please turn to that slide, where we now look at the S&P market and charter market dynamics in a bit more detail.
It is worth, when looking at the chart on the left-hand side, becomes apparent that S&P prices and charter rates have also come down, quite significantly from historic highs. However, that is worth noting, you know, whilst they have dropped by around 70%-75%, charter rates, we are above 100%, more than 100% above, historic averages. We're still in a fairly healthy market environment. As you can see from this chart, and this is obviously an index usually lag behind reality to some extent. That is a reflection that markets have actually improved, over the last couple of weeks and months.
That is both in terms of rates as illustrated here, but also in terms of periods, as Moritz has mentioned earlier, when looking also at our very pictures that we have concluded over the last couple of weeks and months. MSC, Hapag, CMA in particular, have been pretty inactive most of Q3 and Q4, 2022 and early 2023. A lot of these names have come back to the market and have chartered in more tonnage. On the back of that, we have seen this upswing in rates and also in periods. On the right-hand side here you can see a illustration that we have in there for quite some time now, showing the vessel availability.
One factor that at least, you know, during our Q4 earnings call, I did mention that this is at least a factor that might lead to a stabilization of rates even though the overall macro picture wasn't great. We currently see around 350 to 370 vessels still being available for the rest of this year in the charter market. I do believe that that is one attributing factor to the stabilization rates and periods that we've seen over the last couple of weeks and months. It certainly is way below the levels that we've seen over the past couple of years. We also observe slower speeds, a very important factor as well, depending on the trades, up to 10% in speed reductions.
You can see at the bottom, the second box from the right at the bottom, is a desktop analysis from a few of the research houses. If you reduce the speeds by one knot, which is probably somewhere between 5% and 10%, at current trading speeds, that would be an effective supply reduction of 6%-7%. We're talking about quite some notable implications. Q1 is obviously now completed, but it remains to be seen how that will pay out during the latter part of this year. We certainly see capacity implications from slower speeds already today. Overall, we can conclude that we are observing a fairly robust charter market at present.
That is obviously a way more promising picture than we have seen in Q3, Q4 last year and before Chinese New Year, earlier this year. Please turn to the next page 11 of the presentation, where we take a closer look at demand and trade growth and also the deployment structure by trade. On the left-hand side, we have illustrated main lane trades, other East-West trades, as well as North-South trades and intra-regional trades stacked in the different columns. Trade outlook according to MSI. The expectation is that the overall market will grow at a CAGR of around 4.6% over the next couple of years. Whilst that is the overall market picture, the intra-regional trades are expected to grow disproportionately stronger.
As, by the way, we have seen over the last, 10, 15 years, with the exception of, the COVID period, 2020, 2021, 2022, where the main lane trades, grew quite significantly as well. That is expected to be the case going forward. A disproportionate, trade growth, demand growth from, for intra-regional trade, also linked to the interconnectivity, of this world, that will, in our view, also benefit some of the Southeast Asian countries, and in particular India. One driver behind that is supply chain diversification from a lot of shippers, and other companies.
On the deployment side, on the right-hand side, the pie charts, you can see, that is something that tends to be underrated by market observers, is the high relevance of intra-regional trade. You see the different trades here in pie charts, in the middle of the pie chart, you can see the number of vessels deployed in this specific trade. What you can see is the, in terms of number of vessels deployed, the intra-regional trade is by far the largest trade globally. We're looking at around 50% of the global fleet, of around 5,000 vessels actually being deployed in intra-regional trade.
You look at the intra-regional trades specifically, around 98% of the vessels deployed in intra-regional trade are actually below 5,000 TEU, i.e., in the sweet spot category that we are focused on. We believe that is a very interesting picture. We also see that that hasn't changed over the last couple of decades, despite certain cascading effects. We believe this will be a very relevant aspect going forward when looking at trade development. Now on this slide, we have also put that in context with age structure. Also a very important criteria in our view. Now we have looked at the relevance of intra-regional trade and of the smaller tonnage below 5,000 TEU for those very trades.
If you now look at order book and age structure of the fleet on the water, on the left-hand side, we have shown the different size categories from larger than 17,000 TEU at the top, down to smaller than 1,000 TEU at the bottom, and different age structure brackets. What is an interesting figure to mention here is that more than 1,000 vessels below 3,000 TEU are actually above 20 years of age. That is highly relevant when looking at the order book and at the replacement needs, and also at the demand growth perspective that I have just alluded to.
When you look at the age structure, and then in combination with, on the right-hand side, the order book and the deliveries, yes, the order book is very significant on overall perspective. The order book is certainly underrepresented when looking at the smaller sizes. We believe that there is a significant supply gap in the years ahead, and probably not this year, probably not next year. We believe over the next 3-8 years, there will be a shortage of smaller vessels. Actually, we will need more new buildings in the smaller sizes. That is a very important aspect.
What is also interesting to see, 2M announced, Maersk and MSC announced a few weeks back that they will deploy 9 additional ships of around 20,000 TEU in size, in total around 200,000 TEU in their services. They will basically absorb by adjusting to slower speeds. Adjusting services accordingly, i.e., part of the order book will basically be digested by an adjustment of the service offering by the liner company. Overall, yes, the order book is significant, but the devil is in the detail, and we firmly believe that the smaller vessels will not be as exposed as the larger part of the fleet.
On the next slide 13, we have looked at some additional factors that will influence the supply side and are important. From left to right, on the left-hand side, we have shown the development of container ship average speeds. This is obviously a large blended basket across sizes. We can report that on average on our vessels, we have seen quite a significant reduction in speeds compared to last year and year to date, basically. Hence we believe regulation will have further implications on vessel trading speeds. Slow steaming is obviously a potential instrument to further address that very aspect. We firmly believe that on average, we will see slower speeds going forward. Secondly, in the middle of this slide, shipyard capacities.
The yard capacities are effectively maxed out for 2023 and 2024, and even for 2025 to a large extent. Meaning that, talking again about the number of vessels that need to be replaced over the next 3 to 5 to 8 years, particularly on the smaller sizes due to age, due to the age structure, is that we firmly believe that there will be a quite a fully utilized shipyard capacity that will limit the number of newbuilds. Again, we will need newbuilds, and we will see new newbuilds in the smaller sizes. The yard capacity certainly suggests that it will be very tight to actually replace the fleet, especially in the smaller sizes over the foreseeable future.
Lastly, and obviously one important aspect, and I alluded to that, a few minutes ago, is the question of, you know, distribution of the order book and the question of cascading effects. How will actually the large order book, potentially trigger down? We believe that, you know, most of the vessels, 12,000, 17,000 or above 17,000 TEU in size, will actually not be able, and the trades will not really suggest that they can actually eat into the smaller sizes. Over the last 20 years, the proportion of larger ships in intra-regional trades has been very, very limited. The cascading is not a perfect cascade where we will see, 12,000, 15,000, 17,000 TEU vessels actually replacing smaller vessels.
We firmly believe that there is still a underrepresented order book in the smaller sizes, which needs to be addressed, especially given the age profile. Let me wrap up the market section with a quick summary on an illustration on why we believe there's quite a robust midterm outlook for intra-regional trades. Firstly, on the top left, you can see a chart where on the Y-axis, we have shown the order book to fleet ratios for the different vessel sizes that we have just talked through. On the X-axis, we see the percentage of fleet on the water being 20 years or older.
What you can see is that a very significant part of the fleet in the bottom right corner here is actually the smaller sizes where we will see the need for replacement tonnage over the next 5 to 10 years. At the same time, they are significantly underrepresented in terms of order book. That looks different for the, let's say, mid-size segment, 6,000 to 8,000 TEU and 8,000 to 12,000 TEU, and certainly completely different for the very large part of the order book and, small part of the fleet in an aging profile. Now, in addition to that, the demand outlook, I went through that, there is a disproportionate growth expectation.
We also see and do believe that CII impact will be more pronounced for the smaller sizes. We believe the overall picture in the midterm, and that doesn't mean this year, that doesn't mean next year. We as a company are well positioned for this in next year, but we believe over the next three to eight years, there will be a shortage of vessels in our very segment. On that note, I would like to move on to the company outlook section, where I will kick off with the first slide and then hand over to Moritz. Please turn to slide number 15. That is, I believe. Yes.
I would like to start with a short review of our capital allocation principles and development over the last 18 months, which is illustrated on this slide. Value for a shipping company, in my view, can be generated by obviously entering the market at good price levels, but also by executing the right charging strategy and portfolio strategy. However, and that is very important, from our point of view, there's also the question of the right capital allocation approach and discipline, including returning capital to investors, but at the same time, also achieving a long-term value proposition for the company and its shareholders. Slide 16 now shows the development of a few key elements over time since Q3 2021.
The graph on top shows one, the first is the red line, which is the reduction of debt. From Q3 2021, around $350 million down to $150 million gross debt today. The blue line shows the execution of our dividend strategy from basically starting early 2022, and now with a total dividend up to now of around $600 million. At the same time, and that's at the bottom of this slide, we brought down the leverage ratio significantly down from 35% to 15% as per end of this quarter. Very importantly, we did all of that without compromising on our fleet. To the contrary, firstly, we have maintained a fleet of 66 vessels, and as you can see at the bottom.
We have, at the same time, replaced a number of vessels over time. Sold smaller, slightly older vessels and acquired younger, slightly larger vessels, including new builds with attractive charters attached. We have also at the same time, been able to free up a significant part of our collateral that was encumbered under certain financing. Whilst we had only three unencumbered vessels end of 2021, we now have freed up collateral and have around 50% of our fleet unencumbered, providing us with both a high discretion in the decision about our capital allocation and also with a great balance sheet flexibility.
Therefore, we firmly believe that finding the right balance between returning capital to investors, operating at a low to moderate leverage, yet being positioned to utilize market opportunities and optimize the fleet is the way to run a company and a very attractive operating model. On that note, I would like to hand over to Moritz to run you through some more details in terms of company outlook.
Thank you. Turning to slide 17 and a bit more detailed outlook on our very robust backlog of $1.3 billion on the revenue side of things and $1 billion on the EBITDA side of things. As you can see, the remainder of 2023 is almost covered from an open day perspective, only 10%, a bit more than 10% open days. Leaving little room for market volatility when it comes to the top line. Also going into 2024, there's a decent amount of 60% of open days already covered with an average rate of close to $35,000, which again, from a historical point of view is a very, very, very strong number.
Obviously, over time and going forward, you will see that we will sort of be harvesting the backlog that we have on the books. As you can see and based on recent fixtures in the market, we feel relatively comfortable in the position that we're in, especially looking at the remainder of 2023, but also going into 2024, as the most recent fixtures that we have done duration of 12-18 months, stretching well into 2024. The backlog itself, the revenue backlog of $1.3 billion is well covered by a resilient and diversified book of operators. Two-thirds is covered by the top 10 liner companies.
Good names, good credits. 7%, top 20 liner companies, including Unifeeder Express lines, and a fair share is covered by cargo-backed owners. Operators. 91% of our backlog is covered by good names, good credits, and there's a decent visibility on the backlog with the remaining average contract duration of 2.1 years. Looking commercially at the remainder of 2023, you can see that there's a very limited number of open vessels that we need to fix, which is 10, 2 for the remainder of this quarter, 5 ships in Q3, and 3 ships in Q4.
Again, based on Constantin's comment on the market and what we have evidenced since the last reporting in terms of charter rates on our own fleet, but also duration and looking at the size distribution of our open ships for remainder of 2023, we feel relatively comfortable for the position that we're in and being able to execute on accretive fixtures for the rest of the year. Looking at the company valuation, this slide is an evergreen almost. We do spend some time every call on the company valuation. You can see the net debt is almost not existing with $28 million.
Based on the market cap from yesterday, we're talking about an enterprise value of $744 million, which is 1.3 times covered by the contracted backlog alone. This obviously is excluding any steel value of our fleet on the water, including the new building, including the recycling value of the entire fleet, which needless to say is way too conservative to look at. The enterprise value would be covered 1.6 times.
From that perspective, we see a very significant and strong upside potential beyond the contracted cash flow that we have, not only on a steel value, but also on the basis of what we see in the market right now and what we're being able to fix. On open vessels, in the coming quarters. Illustrating some sensitivities, and I should say that this is obviously no forecast or financial guidance, but running some sensitivities both on the top line but also on the net profit basis. Clarksons 10-year and 5-year historical average for open days in our fleet.
You can see that there's very limited volatility in 2023 on the top line, but also on the net profit, and that volatility is increasing going forward. Especially looking at 2025 and again, running some sensitivities on historical averages, you can see that the implied dividend yields remain to be very compelling, between 22%-34%. Obviously coming down from close to 50% in 2023. Again, based on certain assumptions, both on the income side of things, but also on the cost side of things. In conjunction with the slide 20 that we just talked about, a very interesting and compelling investment proposal and value proposition from our point of view.
Last but not least, also looking at the company's balance sheet and the debt side of things. As mentioned before, we are emphasizing on operating on an industry low leverage. You can see that the leverage currently stands at close to $150 million and is expected to decrease below $100 million by the end of this year. Always bearing in mind that this is considerably below the recycling value of the fleet. There's significant headroom and very low risk from a debt perspective. We're very happy to report that on our new building, the Ecoboxes, the 5,500 TEUs that are being delivered in 2024 from Hanjin. We've been able to sign a loan documentation for a +70% LTV financing that is ECA covered.
The lenders here are Korea Development Bank and K-SURE, and that includes a pre-delivery and a post-delivery facility. It's I think a testament to the company and the strengths of the company also being seen in the market. Also important to mention the flexibility that we have from a balance sheet perspective. We mentioned before that we started to look more actively in the market in terms of fleet optimization, fleet renewals when it comes to selling some of the older ships, but also looking at accretive acquisition from a portfolio perspective.
That illustrates very well that there's sufficient balance sheet capacity to potentially free up some liquidity for potential acquisitions and at the same time not jeopardizing the recurring dividend that obviously is being set from the operating business of MPCC. To summarize, MPCC is very well positioned for further value creation. We continue to perform strongly from a financial but also operational point of view. We have a very low leverage on the balance sheet, with more than 50% of the fleet being unencumbered and providing us with much needed flexibility when it comes to executing on fleet optimization strategy.
Again, very, very confident, comfortable position from a current market perspective, with recent pictures, strongly above historical averages and more importantly also showing very decent duration of up to 1.5 years. Also from a wider market perspective, we feel very comfortable in the feeder segment, with a decent supply demand outlook and going forward. Again, we have a very strong revenue backlog of $1.3 billion, providing very high earnings visibility and as mentioned before, with variable, very low volatility when it comes to 2023 and open days.
Hence, I think that the company is very well positioned to capture any market opportunities when it comes to fleet optimizations and obviously always being mindful and emphasizing on returning capital to shareholders. On that note, I'm handing back to the operators for any questions, Q&A that might come in through the line.
Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, if you wish to ask a question, please press star one and one on your telephone. If you wish to ask a question via the webcast, please type it in the box and click submit.
If there are no questions through the line operator, there are a few questions through the web that we could take up as a starter. There is a question by Pål Dahl. Pretty long question, so I will try to read the essence of it. Congratulations on another great quarter.
In recent years, MPCC has done a significant repayment of debt. In the presentation, page 22, it looks like this is about to change in the coming years. Repayment of debt in the quarter to come. When I read the new building program section report, I get another impression. The main question is, out of what will we finance our new building program? Could you please also elaborate a bit more around the debt reduction in the coming years in combination with the payment of the new building program? I would hand over to Moritz, who has basically addressed that question, as far as I am concerned, but maybe you can quickly summarize some of the aspects more, especially on the new builds.
Yes. happy to do that. I think there is the look at our fleet is twofold. Obviously, there's the fleet on the water with a different average age, where we have a clear intention of retaining the low leverage that you can see right now. Whereas when we're looking at new buildings, younger, more modern Ecobox vessels, that can always have a very strong charter backlog, we feel comfortable enough to incur higher debt. To your question in terms of funding, as it's structured right now, both new building projects are probably being financed through debt in the tune of 70%-75% of construction value, and the remainder is being funded through equity.
That obviously is much different than to the existing fleet on the water, where, again, we will try to retain a relatively low, low leverage and hence a low cost break-even.
There is another question in terms of the JV. In the recent quarters, there has been a significant decline in the number of joint venture vessels owned by JV. This has been interpreted as portfolio optimization. Can you elaborate about the future plans for the JV and MPCC? Will it be a portfolio optimization for MPCC to sell the remaining vessels in the JV or to buy them wholly in MPCC? Both could be an option. We have kind of sold vessels in the JV. We have 2 more vessels left. We had around 12 months ago, we had 8.
The trajectory is probably more on the exit course when you look at the JV vessels. We are currently exploring our options when it comes to the last 2 JV vessels together with our joint venture partner. Both options are available to possibly, or actually three options, to possibly continue to trade the vessels, to sell them, and or to possibly find an agreed solution with our joint venture partner for one of the partners to continue. The past has shown that we will find good ways forward on the JV, and I'm not at all concerned about that.
Then there is a question around share buyback, that the share premium account is empty, basically, as Moritz has also explained during the call. Does this mean that share buyback are more likely in the near future in combination with ordinary dividends? Yes, we have been clear about that in the past. Again, we have done share buybacks in the past. What we will continue to do is to have a reliable recurring distribution on a quarterly basis, 75% of adjusted net profits. That will continue. That will also, in all likelihood, continue in the form of dividends, then out of retained earnings, as explained.
In instances where we, for example, sell ships or have other event-driven effect, we would continue share buybacks as a ingredient into the mix as well, obviously subject to market environment, share price, et cetera, et cetera. It is important when looking at share buyback that it is also a question, what do you buy back? If you buy back our own share, you would obviously buy back to a large extent the larger part of our slightly older fleet. If you enter into a very attractive kind of charter-backed new building constellation, as we have done in the past, that is nothing that you can directly buy back in form of share buyback. That is only one part of the portfolio.
Therefore, we have continued to also acquire vessels at the right price with the right attitude, and always with a focus on being EPS and also DPS accretive to shareholders and hence, enhance the value of the company. There's another question around the quarterly reports, and that is more, sorry, that is more a question around the long-term future for MPCC. What are the strategies for the company in the long run? Where are MPCC in N years time? What are the priorities in different phases of the business cycle, in particular, when it comes to fleet renewals, vessel sales, debt levels, joint ventures, green corridors? Those are a few buzzwords that have been raised here.
As I've explained earlier, we will continue to execute our, as we deem, proven capital allocation strategy and principles. We will adhere to them. That is a mix of returning capital to investors as a focus, especially in a market environment like this, where we have a strong backlog. At the same time, we will continue to operate on a low leverage, as Moritz has alluded to. We are, even with the kind of new building financing, we are operating at a significant lower debt level than the scrap value of the fleet. Industry-wide, very low level. However, we are also well positioned to act on opportunities, and we have done that over the last years, that we have selectively sold, selectively bought vessels.
As I've explained in the with the introduction slide on the company outlook, we have maintained a similar fleet size. We have paid in the interim $600 million dividends, and we have de-levered the company. We will continue that path going forward. We would be, you know, agnostic and adjust our strategy to the market environment as you should do. We will continue to be a good steward of capital in the best interest of shareholders. I think green corridors, lower debt levels, fleet renewals, and vessel sale are all ingredients that play a key role. We will just continue to execute on that basis. I think that's what people can expect for 2023 and also for MPCC in 10 years' time from now.
We look at some additional questions. There's one question regarding the stabilization of the charter market. The stabilization of the charter market has slowed down over the last two weeks according to HARPEX index. Do we expect increasing flat or decreasing charter rates going forward? Well, the charter rates are at very healthy levels, as I've explained. If our fleet, which is not the case, would be completely free of charters today, and we would charter all the vessels out at today's levels, we would probably be looking at a dividend yield of 20%. That is kind of disregarding the $1.3 billion backlog that we already have in the books. That gives you an idea of where the charter market is. The charter market is at healthy levels.
The charter market over the last two weeks, I wouldn't say has slowed down just because the HARPEX index has slowed down. Index is not always 100% up to date. We have seen the market already increasing slightly earlier. Whoever has attended our February earnings call, I already indicated that there are some positive developments in the market that we have seen subsequently. We expect the rates this year potentially to be a bit bumpy. It really depends. However, at the moment, you know, we have a very low idle fleet globally, so high utilization of the global fleet. You know, rates and periods have gotten longer and longer. Does that mean we will see a clear trajectory towards a very good market?
That I'm not sure. We believe that, you know, we will not see a disastrous market for the remainder of this year. Again, we are at very healthy levels at the moment. There's another question around share buyback. We discussed that. There is a question around transferring share capital to share premium. Does that make sense? That doesn't really make sense in our view. We have looked at it. Let me check. It's also not that easy under Norwegian law. Obviously it would require also consent from our financing partners. We don't think that, you know, transferring share capital to share premium account is a viable path forward.
There's another question from Palmer saying, "In the current market environment, does it make economic sense for companies to place orders for new builds? What are the rate levels or other key indicators that need to be considered for it to be financially viable with the current new building prices? Apart from rate levels, are there any other triggers such as regulatory changes or technological advancements that can significantly impact the decision to order new builds?" As we have done in the past, I mean, we have ordered new builds once we have been able to secure a charter. Once we have visibility on de-risking of the significant investment that a new building would mean. Obviously, you know, ordering new builds, if you find the right charter, does make sense.
We truly believe that there is a significant need for replacement tonnage when it comes to the smaller sizes. It could be a path forward to look at new builds together with partners. Having said that, we want to be very selective on that. We will certainly not be running to the shipyards. We would be in close dialogue with our partners to consider possibly new builds if we get the right de-risking attached in terms of charters. There's one question around new building deliveries. At what point in time during 2024 are the 4 new builds expected to be delivered throughout the year? Basically, first half of the year, 2 vessels, and second half of the year, 2 vessels. This is roughly the schedule.
There's a question around yard capacity. What is your outlook on yard capacity and prices in the coming years, especially considering the demand from other sectors, dry bulk and tank? As I mentioned during the presentation, we believe that there will be quite a constraint on yard capacity going forward. You know, there are a lot of LNG carriers and large container vessels in the books of the shipyard. There is a limited capacity, so we believe, you know, to my point earlier, that the replacement of the aging fleet, especially in the smaller sizes, cannot be addressed by the current yard capacity over the next 3-5 years, in our view. That is a very relevant factor. In addition, in terms of prices, obviously, prices have gone up quite a bit.
Labor costs have gone up, commodity prices have gone up, et cetera. Labor shortages is also an issue. We don't necessarily expect, sorry, new building prices to come down anytime soon. There's another question around share buyback. We discussed that.
Yeah. The next question is around recent results and performance from liner operators, which are our counterparts, especially for Maersk and ZIM. Could it possibly be that existing contracts are being renegotiated? For the time being, there's no sign whatsoever of any renegotiation in terms of charter contracts. I mean, as mentioned before, and tried to explain in our deck, we feel very comfortable with the distribution of our exposure across a variety of counterparts.
Despite the steep drop in liner companies, and as we all know, Maersk and ZIM have recently reported their Q1 results. I think it's very important to mention, to emphasize that despite the steep drop in earnings, the companies are still posting or guiding results for a full year, which is significantly above the last 10 years. From that perspective, we feel relatively comfortable with our exposure towards especially those two names being Maersk and ZIM.
Okay. There is another question around extra taxes in the Panama Canal. Will that, whether that will affect MPCC. All kinds of taxes and levies related to the trading of the vessels are generally with the charterers, so it will not have an impact on us. There is a question around the management team, that shareholders are fairly happy with the management team, and where we see ourselves in 3 years. Well, we will continue to grow the company, obviously, and we look forward to pave along. There's another question, in terms of how we see our market position in comparison to competitors. Being a young company, you were able to acquire market share quite fast, do you expect to keep gaining market share, or do you regard...
Who do you regard as your strongest competitor? I think that's a difficult question. Maybe not a difficult question, it's actually a good question, because who are the competitors? Obviously, when you look at tonnage providers in the smaller sizes, we are the largest. There are bigger, there's Contship, Seaspan owns a few ships, but the market is super fragmented still. I mean, even with our 66 vessels, including the newbuilds, we are only very, very minor owner of ships when you look at the global capacity. In our segment, the segment we focus on, intra-regional vessels, there are around 2,500 vessels. Owning 66 out of those doesn't make us...
We are one of the largest, if not the largest, but it doesn't really make us dominating that market. I think, it really boils down to also when you have bought the ship, at what price, how is your charting strategy, how do you allocate your capital going forward? It's not necessarily all about gaining market share for us. It's around executing or conducting a profitable business, and making sure, you know, we do the right thing at the right time, rather than necessarily gaining market share. There are obviously benefits from certain sizes, and I think going forward with more and more regulation, if you are a sizable owner, you certainly have benefits. Also in terms of access to funding, debt, et cetera.
In principle, I think that can be achieved if you have at least 40 ships, 40-50 ships maybe, and we are well beyond that point. And again, it's not about gaining market share, it's about taking the right decisions in this market when it comes to the fleet. Maybe I hand back to the operator to see whether there are any further questions through the line. There are, at this stage, no further questions through the web. Operator, is there any further question on your side?
There seems to be no questions from the phone lines.
Okay. we're seeing no further questions through the web either. I would like to take the opportunity to thank everyone for their interest. Obviously we are very happy with a very solid first quarter. We look forward to continuation and to continue operating in 2023, well into 2024. We are excited and very positive about the outlook, we thank everyone for their support and look forward to what is ahead of us. Thank you very much, moderator, and on that basis, back to you. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.