Welcome to OET second quarter and first half 2022 financial results presentation. We will begin shortly. Ioannis Alafouzos, CEO and Chairman, Aristidis Alafouzos, COO, and Konstantinos Oikonomopoulos, CFO of Okeanis Eco Tankers will take you through the presentation. They will be pleased to address any question raised at the end of the call. I would like to advise you that this session is being recorded. Konstantinos will begin the presentation now.
Thank you, operator. Welcome to the presentation of OET's results for the second quarter of 2022. We will discuss matters that are forward-looking in nature. These forward-looking statements are based on our current expectation about future events, including the company's commercial performance, dividend policy, projected capital expenditure, and anticipated debt capital commitments. Actual results may differ materially from the expectations reflected in these forward-looking statements. Starting on Slide 5 in the executive summary, we review the highlights of the quarter. OET returns to free cash flow generation on the back of improving markets. In particular, we generated net revenue of $36 million, that is 36% up quarter-on-quarter, Adjusted EBITDA of $25 million, that is 52% up quarter-on-quarter, and an adjusted profit of $8.5 million or $0.26 per share.
Our fleet-wide PC for the quarter came in at 29,900, which is 21% up versus the first quarter of this year. At the end of the second quarter, OET reports total liquidity of $72.4 million, 121% higher year-over-year, and 65% leverage. During the quarter, we have drawn our first sustainability-linked loan with usage towards refinancing debt on two of our VLCCs and also for general corporate purposes. The company is now operating on a fully delivered fleet following the delivery of the last VLCC under construction during the second quarter. Our board of directors agreed and we announced a cash dividend of $0.30 per share or $10 million in total. We are now moving to Slide 6.
On Slide 6, we provide a summary of trading data for our share and also present OET's total return since IPO in 2018. Since listing and adjusted for distributions, assuming reinvested into our stock, total return comes in above 100% to 119% based on yesterday's close at NOK 130. Notably, our weighted average buyback price stands at NOK 62.9 and is lower than half of the current trading. We are now moving to Slide 7. We summarize our corporate debt and chartering structure on Slide 7. 47% of the company is owned by public investors other than the sponsor.
The company owns a fleet of 6 Suezmaxes and 8 VLCCs and is now running on a fully delivered basis while the average age stands at three years. As you can also see on the slide, our financing mix includes a variety of finance providers and the group's financial flexibility is also shown through the variety of sourcing its capital. Lastly, three of our vessels are currently on long-term charters that end in the second and third quarter of 2023, while the rest of the fleet is trading either spot or under short-term TC. I will now hand over to Aristidis for our commercial and market update.
Thank you, Konstantinos. During Q2, we achieved a fleet-wide TCE rate of $29,900 per operating day. Our VLCCs generated $18,600 per day in the spot market at 2% outperformance relative to our tanker peers who have reported Q2 earnings. OET had a weaker result in Q2 due to IFRS accounting principles and our decision to reposition most of our VLCC fleet in the West following the disruption in trading patterns after the Russian invasion in Ukraine. The Nissos Anafi, Nissos Donoussa, Nissos Keros, and Nissos Kythnos were all fixed for backhaul voyages loading in West Africa to discharge into Europe, coming open from China. The TCE for these voyages was below the round voyage equivalent of a Middle East Gulf to China or West Africa to China or U.S. Gulf to China, but dramatically improved our position.
Since the West has begun to self-sanction from Russian oil, new trade routes have emerged for VLCCs. The two most important being West Africa to Europe and US Gulf to Europe. These voyages freight very well on a round voyage basis, and being short in duration allows us to keep our position in the West, where we're able to choose the opportune moment to fix longer front haul voyages back to the east, when the market firms, taking advantage of a minimal ballast leg. In Q2 and Q3, our eco scrubber fleet benefited greatly from the increased bunker prices and spread between VLSFO and HFO, which reached $550 at one point and is currently trading closer to $280 per metric ton.
Our Suezmax has generated $41,500 per spot day, an 80% outperformance relative to our tanker peers that have reported Q2 earnings so far. We are very happy with our Suezmax performance in Q2. We had 75% of our fleet available, Suezmax fleet available for spot voyages when rates spiked in mid-Q2, and we took advantage of this by fixing a few short time charters as well as front haul voyages. Similarly to the VLCCs, our Suezmaxes took advantage of extremely well-priced bunkers in the West that gave a further boost to these time charter equivalents. Moving on to Slide 10. We provide our guidance for Q3. So far in Q3, we have fixed 60% of our VLCC spot days at $31,900 per day.
72% outperformance relative to our tanker peers that have reported Q2 earnings, and 70% of our Suezmax spot days at $60,400, 109% outperformance relative to our tanker peers who have reported their Q2 earnings. On the VLCCs, we fixed Nissos Kythnos, Nissos Anafi, and Nissos Donousa, which were all open in the West, as I mentioned on the Q2 update, for lucrative West Africa and U.S. Gulf voyages discharging into Europe, the shorter round-trip voyages I mentioned again. We like these voyages again because they freight very well while they're short and the vessels remain in the West. This gives us optionality to capture spikes in the market more effectively with our smaller fleet when compared to our larger competitors.
In addition, Nissos Kea and Nissos Nikouria will redeliver from their short long time charters after their delivery this year in the end of Q3. This will bring our spot exposure on the VLCCs to seven of eight vessels right before the historically firm winter market of Q4. Our only vessel left on time charter, as Constantinos mentioned, will be Nissos Despotiko, which has 10 months left at around $48,000 per day. We're very happy with our performance on the Suezmaxes as well. We've managed excellent triangulation on the fleet, as well as taking short-term time charters that will redeliver the vessels in Q3 in time for the winter market. On all segments, but Suezmax in particular, have benefited from Europe's need to replace Russian crude. Cargoes from the US Gulf, West Africa, and the AG have become much more frequent.
We do not anticipate this to end, and believe that the crude segment will be able to triangulate and reduce ballast days while optimizing TCE for the short to medium term. The evidence of having the most efficient, well-proven fleet has never been more clear again. On Slide 11, we look at the change in trade patterns and the effect on the crude market ton-miles. Starting from the left-hand side, Russian crude exports that would be sold into Europe before the invasion in Ukraine have now shifted to the east, mainly China and India, which are much farther away. Europe, on the other hand, is now sourcing its crude supplies from other crude buying regions which are farther away than the replaced Russian crude.
We have looked at the change in European crude imports from various trading regions year on year, and it is evident that Europe is gradually shifting supplies from neighboring Russia to further origins. While U.S. Gulf exports can shift on Aframax, Suezmax, or VLCC, West Africa and Middle East Gulf cargos will move and benefit much more on larger vessels like Suezmax and VLCC. The collective impact is mirrored on the right-hand side in the higher average crude tanker sailing distance. A result that is very positive for our tankers' trade and benefiting ton-miles. Moving to Slide 12, we focus on the second part of the tanker demand equation and in particular trade volumes. Consensus energy agencies suggest growing seaborne crude tanker volumes from 2021 lows following easing mobility restrictions associated with the pandemic and the end of the supply cut by OPEC.
Drivers in such volume growth over the next couple of years is the Middle East Gulf and the United States that are expected to contribute 2.5 and 1.6 additional million barrels per day. On the bottom part of the slide, we provide an overview of the incremental volume potential in the event of an easing sanction scenario for Venezuelan crude. In the summary, we would expect in excess of 1 million barrels per day. In such a case, that could translate to equivalent to more than 20 additional VLCCs and 10 additional Suezmaxes. Moving on to Slide 13. We take a closer look at key indicators from China that play an important role in our markets, especially in longer-haul trades associated with VLCC. The Chinese government is supporting weak domestic production through elevating infrastructure spending to help the country recover quickly from the pandemic.
Mobility restrictions are scarcer, and it seems China is moving away slowly from the pandemic, and this is reflected in port congestion, now standing at pre-pandemic levels. Chinese liquid demand is also pointing towards that direction. Chinese demand will be the key driver to change tanker earnings and move them materially higher again. Moving to Slide 14, we look at the constructive fundamentals for the tanker supply side. We believe that we're looking at the best medium-term supply fundamentals for our sector in more than a decade. The order book is at a historically low level, which combined with declining yard capacity, suggests that fleet growth will remain manageable for years to come, including earliest deliveries being in mid-2025 for a substantial amount of ships. Regulatory pressures are expected to amplify the positive supply outlook.
More than 30% of the crude tanker fleet is expected not to comply with carbon intensity rating, and owners of such vessels will need to reduce speed to comply. Hence, we expect our competitive advantage to be strong in the coming years and continue being charterers' first choice to perform voyages at optimum speeds. Moving on to Slide 15 now, and adding everything together, we believe that the combination of growth in absolute seaborne crude trade volumes, longer voyage distances, constructive supply side, and elevated demand for crude as it is in this S&P market, is expected to improve vessel utilization, charter rates, and asset values. The current pricing of secondhand vessels is translating to a meaningful discount to replacement costs, signaling upside potential and re-rating on secondhand values.
We expect the improvement in charter rates together with a very tight S&P market to be reflected in asset values in the short to medium term. To give you a short update on S&P activity, we have seen a material uptick in values. In June, $95 million and $98 million was paid for a 2020 and a 2021 built VLCC, which is up from last done at $90 million. In the past week, a 2020-built VLCC was sold for $108 million, and the deposit for this vessel has been lodged to the seller. Now handing you back to Konstantinos to give you an overview of our financial information.
Thank you, Aristidis. Now turning to Slide 17 to have an in-depth look on our income statement and the summary. Following improvement in our Time Charter Equivalent quarter-on-quarter at 29,900, we generated $36 million in TCE revenues and $25 million Adjusted EBITDA. Our bottom line improved as well, and we report an adjusted profit of $8.5 million or 26 cents per share. Our fleet-wide OPEX, including management fees, came in at $8,650 per day, and our G&A stood at $724 per day. We are moving now to Slide 18, where we provide a summary of our main balance sheet items. We report 121% higher cash year-on-year at $72.4 million.
Our debt stands at $763 million, higher compared to 4Q 2021, mainly following the delivery of our two VLCCs during the first half of the year. Our book leverage came in at 65% and book value of equity at 160 NOK per share. Moving now to Slide 19 with a summary of our cash flows. Our EBITDA generation was translated to operating cash flow, and we report $21 million for the first half of the year in operating cash. Movements in investment and financing activities for the quarter relate mainly to yard payments for the delivery of Nissos Kea and debt drawdown to finance such. We are now moving to Slide 20, where we will summarize our debt maturity profile and also provide a guidance for our future CapEx.
Total debt weighted average maturity of our debt stands at 4.6 years. Our average spread over base rate for bank financing stands at 2.36%, while we report an all-in cost of 3.17% spread above base rate on an entire debt stack. Our first day purchase option for two Suezmaxes under more expensive financings compared to what we would usually achieve in the market comes in 2024 for two of our Suezmaxes. Now we're having a look at the right-hand side where we summarize our expected scheduled CapEx for our fleet. Going forward, we will perform 2 dry dockings in 2023. We have 0 dry dockings for the remaining of 2022, and we will perform 5 dry dockings in 2024.
We are moving now to Slide 22, where we summarize our ESG and emissions reporting. For the first half of the year, our ratings for EEOI and AER came in below well guidance from Poseidon Principles benchmark values. We now conclude with some thoughts for the outlook and our investment thesis from our CEO. This is Ioannis Alafouzos. OET, we feel, is the best vehicle to capture the next or maybe the current tanker cycle. We have the most efficient fleet in a very high bunker price environment. We have a track record of outperforming our competitors. We have shown our commitment to returning value to shareholders and selling ships at profitable prices.
Our fleet is positioned with its spot exposure to capture as much of the upside as possible in the short and medium term. When the tanker market faces zero current ordering and the historically low order book, as we said earlier, increasing ton-miles and crude trade volumes going forward. Thank you. I think that is the way we're done, and we expect your questions.
Thank you. If you would like to ask a question, please press star one now on your telephone keypad. The first question comes from the line of Petter Haugen, calling from ABG. Please go ahead.
Hello, guys. This is Peter from ABG, calling in. Just, well, firstly, impressive results, in particular on the Suezmax fixtures for Q3. I'm asking myself, what sort of levels would you find acceptable to fix longer-dated charters? Secondly, what would you think in terms of either investing more or selling ships at both sort of current levels but, in the case of disposing assets, what would be your thinking around the levels at which you would think that to be a real option? Thank you.
Thank you, Peter. I'll answer the time charter, and then I'll hand over the S&P to Yannis. On the TC, I think that before we consider longer term deals, we'd like them to come into line closer to the picture we've done on Nissos Despotiko, which is in the very high forties for VLCCs and the comparative rate for Suezmaxes. As you know, we're very bullish on the market, so the current three to five year deal is in the high thirties, and we think that's very undervalued at the moment. The second question is regarding whether it's an opportune moment to further invest or divest in tankers.
Well, it's difficult to say, but undoubtedly it's more difficult to invest now in tankers because the price is very high. As Aristidis mentioned, we expect significantly higher rates in the future. It might make sense, but it would be a dangerous investment. At the same time, of course, I mean, if you are a shipping company and you want to renew your fleet and you can sell all the ships for a profit and renew them at these levels, and then renew them with more modern vessels at these levels, then the investment makes a lot of sense. In general, this is not an opportune time to make investment, but there are exceptions, especially if you are already in shipping and you are selling some ships and buying some others at current prices.
Okay. Thanks. If I can quickly follow up on the more sort of short-term market here. Personally, I've spent lots of time trying to understand to what extent the U.S. in particular is capable of increasing their exports substantially from here. But if that is the case, it I suppose Metro would perhaps go sort of silent and not into the spot market. If you can share some thoughts on the activity seen in the U.S. Gulf and also in terms of how much is done on VLCCs and what is done on reloadings or smaller ships.
Speaking with charters and clients, we expect that the end of Q3 and the early Q4, which is like, you know, the visibility they have currently to be extremely busy on U.S. Gulf exports. We're quite bullish that there will be a lot of cargoes being sold both to Europe and to the East. In the very short term, today, there's a lot of outstanding US Gulf cargoes on VLCCs, both going into Europe and to the East. Last done rates were around the $7 million mark to the East and, you know, rates had fallen, you know, even below $5 million last year.
We do believe that there is an opportunity that the rates for East could go up by $1, $1.5, maybe hopefully more, $2 million if this period is sustained and the cargoes end up being firm and lifting, and the VLCC, a few VLCCs are fixed away. To give you a kind of picture of what that would make for one of our ships that's open in Europe, just to balance the United States and then sail to China laden with $8 or $8.5 million would give a TCE of around $80,000 a day for three to 3.5 months. Currently, in the short term, we do think that the VLCCs have upside and more upside than we do on the Suezmax and Aframax segment.
That's very helpful. Thank you. Thank you so much. That's all for me.
The next question comes from the line of Climent Molins, calling from Value Investors Edge. Please go ahead.
Good morning, and thank you for taking my questions. I wanted to start by asking about the financing the sponsor provided for the acquisition of the Nissos Kea and the Nissos Nikouria. Should we expect the repayment of the sponsor financing in the near term, or are you comfortable holding onto the facility until closer to maturity?
Hi. Hi, and thank you for your question. The sponsor debt on these two vessels is repayable in a time of two years. At the company's sole discretion, we have budgeted some repayments along the way, and we will finalize the full repayment upon the maturity of this facility.
All right. That's helpful. Kind of following up on that question, what kind of cash balances would you be comfortable with going forward? Because you had previously operated with closer to $30-$35 million. Could you provide some kind of guidance on what you would be comfortable with going forward?
We certainly want to increase our liquidity because of the volatility of the market, but also interest rates which are rising. We took a significant profit from some positions we had taken with low interest rates. We made about $11 million-$12 million. We don't have, like, any cover now on interest rates. To give you an idea, let's say, we can survive with 3.5% interest rates in a market like 2021, which was the worst historical market for two years.
where we have decided that our liquidity should be at least $70 million, and as the market continues in this way to increase it depending on our cash flow by $10-$15 million every quarter. Let's say we feel we're very secure because we're increasing our cash position because of the very-
All right.
Uncertain interest rate environment.
All right. Thanks for the color. Final question from me. Given the improving market backdrop, is there any appetite to pursue a U.S. listing in the medium term, or are you comfortable as is?
The US listing is something that we've begun the, let's say, KYC and procedural process of looking into co-listing with New York and Oslo. We will update the market and our investors accordingly when we have further news and a time schedule.
Yes. All right. Thank you very much for taking my questions, and congratulations for the quarter.
We currently have no question coming through, so as a final reminder, if you'd like to ask a question, please press star one now. Well, there are no more questions on the phone at the moment, so we'll pass over to you, host.
Okay. There is, we can see two questions which have been sent to us. One is, what would we consider, our NAV to be under the current market values? It depends, I guess. Maybe we thought it was around 140 yesterday. Now with the sale of the VLCC, 2020 VLCC at $108 million, I don't know, it might be 150. It's going up all the time because the prices are going up. Yeah, that's it. The second question is, Suezmax PC rates for Q3. Is that catching? Does Baltic East mean that you have taken cargoes out of Russia? If so, is this something? Well, first of all, we are only trading in legal cargoes and non-sanctioned cargoes.
Secondly, most major owners, including, for example, the likes of Frontline, go to sea and transport non-sanctioned Russian crude or Russian products. Just for an example, the European Union has been importing more diesel today than what it was importing before the war. We feel that especially there's a bias, especially with Greek shipowners, that they're going to Russia. I would like to tell, it's an interesting question that you have asked because I would like to mention that all Western oil majors transport and buy crude from Russia today. I cannot understand why we have this hypocrisy about not going to Russia when the whole Western world needs and transports crude oil full stop.
When the war started, we took a decision not to go to Russia because like everybody else, we were very emotional and we felt very distressed with what was going on. As time progressed, we realized that first of all, a lot of our competitors and all the majors were lifting oil from Russia. Secondly, we saw that the European Union was encouraging even this process. In fact, recently they have made insuring ships, I mean, European insured ships going to Russia a little bit easier. Yeah. That's my position. We would certainly not go anywhere where there is a sanctioned cargo, full stop. Okay. Thank you, operator.
If there are no more questions, thank you all for participation and listening in. See you.
We have no question at the moment, so yeah, thank you for joining today's call. You might now disconnect. Thank you. Host, please stay connected.