Welcome to the OET's fourth quarter and 12 months 2022 financial results presentation. We will begin shortly. Aristidis Alafouzos, CEO, Iraklis Sbarounis, CFO and Konstantinos Oikonomopoulos, Chief Development Officer of Okeanis Eco Tankers will take you through the presentation. They will be pleased to address any questions raised at the end of the call. I would like to advise you that this session is being recorded. Iraklis will begin the presentation now.
Welcome to the presentation of Okeanis Eco Tankers results for the fourth quarter of 2022. We will discuss matters that are forward-looking in nature, and actual results may differ from the expectations reflected in these forward-looking statements. Starting on slide four, in the executive summary, I'm glad to present the highlights of our strongest quarter since inception. The firm tanker market dynamics, in combination with our eco, young, and fuel-efficient fleet, has resulted in a fleet-wide time charter equivalent of $63,800 per vessel per day, and that includes our fixed TCs. We report net TCE revenue of over $82 million, that is over 68% increase from our third quarter.
Adjusted EBITDA of approximately $7 million, that's over 86% up from Q3, and adjusted net profit of $1.51 per share, which is more than 2.5 times compared to Q3, a trend that we have seen since earlier in the year. Finally, our board has declared a third consecutive capital distribution. The distribution which relates to our fourth quarter performance, taking also into account what we expect to be a strong Q1 and adjusting for our capital structure considerations will be $1.25 per share or approximately $40 million. That implies a yield against our current trading price of approximately 24%. We're now moving to slide five, where we wanted to illustrate what sets us apart from our peers.
Having the advantage of a very young, on average three years old fleet, which is fully scrubber fitted and eco-designed, we're able to capture consistently superior results compared to the market. More on that performance later on. On slide six, we summarize our corporate and capital structure as well as our employment profile. We are running on a fully delivered fleet of six Suezmax and eight VLCC tankers. We have a mix of financing providers, both within the traditional banking sector as well as the sale and leaseback market from both Europe as well as the continuously growing Asian market. While our financing needs are pretty much covered for at least the short term, our track record and long-lasting relationships will provide flexibility for future needs as and when they arise.
On the employment front that we will talk about more in the next few slides, our long-term time charter contracts remain three, expected to run through the 2nd and 3rd quarter of this year. The remainder, of course, of our fleet is trading either spot or under short-term time charters. I will now hand over the presentation to Aristidis before our commercial and market update and what I think will be more interesting color than mine to our 4th quarter as well as Q1 of this year.
Thank you, Iraklis. Q4 was another fantastic quarter with extremely firm spot rates for both our VLCC and Suezmax fleet. I would like to congratulate the whole OET team for continuing to outperform against our peers. The disruption of oil trade patterns plus the SPR re-releases resulted in significant increases in ton-mile demand. Oil on the water reached a post-Covid high. Chinese cargo fixtures were also very strong in October and November, but subdued in December, which led to the weakening of the VLCC market. We have guided from Q1 of 2022 that we believe there is superior value of trading our modern eco scrubber assets in the West. We brought ship after ship to the West on backhaul voyages, and we are very happy our strategy paid off so nicely. In Q4 alone, we created Western spot exposure of 5 VLCCs and 3 Suezmax voyages.
Having the position of fleet for the winter months, Q4's focus was on maximizing income. Our results would have been even higher, but we were a bit unlucky as two of our Western-position VLCC delayed completing their previous voyage and got canceled for their next. These voyages were fixed at TC of above $120,000 per day, and the replacement voyages were fixed at slightly lower rates, but still very healthy. We wanted to take advantage of the firm levels in Q4 and fix a few longer voyages to lock in higher rates for longer periods. Two examples: Nissos Rhenia was fixed on a Brazil to Los Angeles voyage, which was a 120-day voyage inclusive of waiting time to discharge on the merge at six-digit earnings.
The benefit of this voyage was that the position remained in the West when she was open. We fixed on her next voyage from Brazil to Europe again at over $100,000 a day. Our VLCC, Nissos Kea, opened in the east and was fixed on a voyage from Turkey to China with a duration of over 110 days at, again, six-digit earnings. The Suezmax market was also incredibly firm. The ease of finding cargoes to triangulate is something I had not experienced before. To give you an example, in 2022, we fixed the Kimolos from North Europe to China, followed by North Asia to India, followed by Iraq to U.S. Gulf, followed by U.S. Gulf to Europe. Our Suezmax, Milos, was fixed on a six-eight month short time charter.
During the quarter, we achieved a fleet-wide TCE rate of $64,300 per operating day. Our VLCC has generated $69,100 per day in the spot market, a 14% outperformance relative to our tanker peers that have reported Q4 earnings. Our Suezmax has generated $82,100 per spot day, a 42% outperformance relative to our tanker peers that have reported Q4 earnings. Moving on to slide nine for guidance on Q1. The beauty of voyages carrying over from one quarter to the next. Overall, the market weakened in December and until mid-January. Comparing unfixed available VLCC tonnage, mid-January was a peak with around 75 ships available for cargoes. The lows of late November was around 30 ships when the spot market hit its peak.
Since mid-January, the available tonnage has consistently eroded, breaching the lowest number we saw in November. This is very constructive given it's February. The United States has been extremely busy on VLCC. We have seen 44 VLCC cargoes so far in March, which is a record. In comparison, March 2022 was only 27 cargoes, April 2022 was only 24 cargoes. This April, we are also expecting SPR to begin releasing again, it should be another record month. In Q1, we had Western spot exposure of six VLCCs and four Suezmax voyages. On our ships on a round voyage basis for the VLCCs, any fixture in the East is around $60,000-$65,000 per day, while fixtures in the West today are around $85,000 per day.
While a one-way voyage from the US Gulf to China would earn between $85,000-$90,000. We do not believe the spread between a West round voyage to a West to East voyage is large enough to justify giving up our position in the West yet. So far in Q1, we have fixed 80% of our fleet-wide spot days at $100,200 per day. 78% of our VLCC spot days at $91,700 per day, a 65% outperformance relative to our tanker peers who have reported Q1 earnings. 84% of our Suezmax spot days at $118,600, a 127% outperformance relative to our tanker peers who have reported Q1 earnings.
We just repositioned another VLCC into the West and got the voyage confirmed about two hours ago. Moving on to slide 10. Looking a few quarters ahead, we are in the lucky position to have the best fundamentals of my career. The order book is extremely low at a time when the fleet is the oldest it has been for many years. We have seen extremely limited new building orders in the Suezmax and VLCC sectors. Almost all the orders have a long-term time charter attached as well. The yards that can build these large crude tankers are focused on more profitable segments such as containers, VLGC, PCTC, and LNG, which have continued demand.
The demand for these ships is robust. The preference of the yard is evident, as in 2023 we have already seen 25 large containers, 8 LNG, 5 VLGC, and 17 PCTC orders placed. These asset classes are built in berths that compete with the Suezmax and VLCCs. Current pricing in Korea for a VLCC and Suezmax is over $115 million and $82.5 million respectively. The lack of new buildings delivering in 2023 and 2024 will lead to negative fleet growth. The demand for older tonnage for the dark and gray fleet is very strong. The reason that asset prices are so high for overage tonnage. My view is that once a ship enters a dark or gray fleet, it no longer competes against us.
If we look at the fleet from this perspective, we have seen a huge contraction of the international fleet as the dark and gray fleet has grown significantly. They estimate it to be over 600 ships. Furthermore, given the cost required for tonnage of such age and what we anticipate to be suboptimal levels of maintenance by such operators, it is likely that we will see in the future further tapping into the availability to supply vessels. Moving to slide 10, we focus on the crude demand from China and the continued effect of the Russian crude dislocation. The increase in ton miles due to Europe resourcing all of its crude away from Russia while Russia is forced to sell to India and China is huge.
This changes the LCC trade completely, with US Gulf, Brazil, and West Africa to Europe becoming common voyages, which we like very much. Imports from the Middle East to Europe on Suezmaxes have also trended up significantly. So far, we have seen most of Russian crude being sold into India, while we expect the Chinese demand to increase as they open up post-COVID. China is an important driver of the tanker market, and the incremental demand we see post-COVID will be a prevalence of ton-miles. Chinese refiners already have increased their utilization rates by 2 percentage points from January to February to 77% and runs are around 14.7 million barrels per day. Refinery maintenance is expected to begin in March and finish in May. Even so, we expect refinery runs up in Q2 to be over 10% year-on-year higher.
Crude imports will continue to rise in March and April and should be over 11 million barrels per day, with an additional 1 million barrel per day growth in 2023 on a year-on-year basis. We also expect product exports to remain elevated from China in Q1 and Q2. The next batch of export quotas are expected to be released this May. Moving on to slide 12, we take a crack combining the two previous slides to produce a VLCC and Suezmax supply and demand anticipated balance. The signals are quite clear that 2023 and 2024 will be excellent years for us, allowing for significant earning capacity and shareholder returns. I hand you back to Efthimios for the financial update.
Thank you, Aristidis. Moving on to slide 14, we summarize our net income statement for the quarter. Our increased TCE revenues translate to record EBITDA of approximately $70 million and net profit just shy of $49 million or $1.50 per share. Moving to slide 15 and our balance sheet summary. As of year-end, we had cash on our balance sheet of over $88 million. Our debt stood at $739 million, reflecting approximately the $12 million amortization compared to the previous quarter. Our book leverage came in at 61%, while market-adjusted LTV, based on year-end broker value, stands below 50%. Moving on to our ESG section on slides 17 and 18.
On emissions reporting, we publish our fleet annual efficiency ratio data and fleet energy efficiency operational indicator data, which are in line with guidance and regulations. On slide 18, this is something you've seen from us before. We calculate our competitive advantage, based on average banker spread of around $260 per metric ton to stand at $19,500 per day for VLCCs and approximately $13,000 per day for Suezmaxes. Okeanis owns ECO and scrubber-fitted vessels and holds a significant competitive advantage against 73% of the VLCC fleet and 84% of the Suezmax fleet. This concludes our presentation, and I will be happy to answer any questions. Handing it back to you, operator.
Thank you. For our callers, if you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. If you change your mind or want to withdraw your question, please press star two. Please ensure your lines are unmuted locally, and you'll be prompted when to ask your question. The first question comes from the line of Petter Haugen from ABG. Please go ahead.
Hi, Petter.
Good afternoon, guys. Hi, and congrats with a fabulous Q1 guiding. It seems like Western positioned ships as like slice bread base. Are you capable of giving further guidance to the remaining 20% of your coverage for Q1? Also perhaps touch upon what you now, I suppose that some of your cargos is also in this anticipation of what will be next and going into Q2. Yeah. Guidance for the remaining approximately 20% for Q1 and what should we think about Q2?
Hi, Petter. It's Aristidis. For Q1, I mean, to give you a rough idea, at the moment, we have two ships that will be fixed in the East and one ship that will be fixed in the West on the VLCCs. On the Suezmaxes, we'll have one ship that's opening in the West and maybe one ship that's opening in the East. It's fairly limited. In terms of Q2, we're pretty positive because we think that the SPR will be a big driver of strength in the market. We see that the US Gulf, let's say, US Gulf China versus AG China, there's a premium to it right now. The market on the VLCCs and in general is much tighter in the West. We do think that will also tighten the overall balance of the global market.
I think we're pretty constructive on Q2 as well. I wouldn't be surprised if we see a spike on the VLCCs.
That's interesting. Thank you. Going further, as you, as you state yourself, 2024, 2025 looks very tight. No one is ordering. Why don't you order a few ships here?
There has been some ordering. There's been ordering on other segments. You know? You have seen, like I mentioned, on LNG, et cetera, and a bit on MR2s and LR2s, there have been some orders. On the Suezmaxes, we've been very lucky that there's been such limited ordering. I think also because of the orders in the other asset classes I mentioned, the order book has also been pushed out quite a bit farther than, let's say, the berths that are available for MR2s or LR2s. Why are we not ordering? At the moment, we're still focused on returning capital to shareholders, which we've said is the main intention of OET all along.
Yes. Yes. It doesn't take many quarters to do that with these rates. I read you that ordering ships here is still not something you actively think about.
Yeah, that's correct.
Okay. Okay, that's all from me. Thank you.
The next question comes from the line of Eirik Haavaldsen from Pareto Securities. Please go ahead.
Yeah. Hi. Again, a fantastic quarter. On dividend, on the shareholder returns, It's sort of refreshing to see a company paying everything out basically. Should we think about your cash position now as the level that you're comfortable with going forward as well? No need to give any understanding. There was no need to accumulate further cash holdings, is that the right way to think about it? Everything, well, that should be paid out.
Yeah. I'll take that. Hi Eirik Haavaldsen, this is Iraklis Sbarounis. Look, we're comfortable with our liquidity levels, but obviously we continuously reevaluate our needs for the future. We take into account the increasing interest rate environment and global inflationary issues. There is no set amount over which we would have made the decision to proceed with the full payout of excess cash. You know, we continuously assess and balance our current and future needs. Our expectation on the market and of course, if any accretive opportunities might arise in the future, we will always consider that.
With regards to the dividend decision itself, for this quarter, obviously we took into account our performance in Q4, but we also had the visibility on the anticipated strong Q1 quarter as well. We are also considering capital structure where our quarterly debt repayment exceeds our quarterly depreciation. Taking all of that into account, we were comfortable with the number that the board concluded, and we will be assessing in a similar way what we'll be doing the next quarter, which hopefully will be equally, if not better, in terms of numbers.
Fair. As you mentioned there, you know, the rising interest rates, I mean, you one of few companies that have had decent or still have, you know, a decent LTV, which I think is an asset in this market environment. Any plans or thoughts to refinance? I mean, you have some Ocean Yield leases and so on. Anything there that might happen in the future?
I mean, for the foreseeable future, we don't have any refinancing plans. The more expensive side of our capital structure, which is under the leases that we have with we will only be able to start exercising potentially purchase options starting next year. This is still a bit further away while the rest of our capital structure is at actually quite healthy and competitive levels. Nothing for the foreseeable future, but starting next year we will be exploring that further.
Okay. One market related also, if I may, I mean, there's a lot of talk about what might happen to Russian exports from next month and, you know, them holding back cargos or, you know, production issues or whatnot. Are you seeing anything here that could impact the Suezmax market at all? I mean, it's been remarkably steady and solid for a long period of time now. Is that at all going to impact things you believe?
I mean, just thinking practically, I think that it'll be much more challenging for the Russians to export their products from the Western ports. I wouldn't be surprised if we see production of, let's say, overall production come off a little bit as they've stated. We see exports of crude remaining pretty much flat and they will slow down the refining capacity in the West.
Okay. You're seeing signs of that.
No, no. I'm not seeing any signs. I'm just saying that this is what I would expect to happen. That the cuts will reduce the refinery runs and we'll see fewer Russian product exports rather than crude.
Okay. Fair. Okay. Thank you, again, a wonderful quarter.
Thank you very much.
Thanks.
We have a web question from Frode Mørkedal or will you seek long-term employment for some vessels?
Hey, Friedrich. I mean, that's currently, I would say that three-year deals on VLCCs are around $50,000 a day and Suezmax are just below $40,000 per day for our ships. With the outlook that we have, we strongly believe that the rates that are being discussed today are considered market today undervalueMørkedal the potential that we can earn in the spot market going forward. Unless these rates materially change, the three ships that will redeliver to us will be traded in the spot market. We have included the short TC Milos delivers early in Q2. The Thesprotico, which is on to Equinor for three years, will finish sometime in June, and the two Suezmax, Sikinos and Poliegos will come back in Q4. Thank you.
Another question from Mikel Askeland. You're guiding on TCE for Q1. Is that on a discharge to discharge basis?
Yeah. That is correct.
Follow-up question. Russian trades are very limited when it comes to transparency for those who are in the market. Given that you have done those kinds of trades, can you shed some color on the, what kind of TCE premium compared to our other trades?
There's, as you said, there's very little transparency in this market, so it very much depends. It's a hard question to answer because, you know, you don't know exactly what you're comparing it around voyage or a discharge to discharge voyage.
That's all for the web questions. Back to you, Iraklis.
Well, thank you very much everyone for listening to our Q4 presentation. We look forward to touching base again next quarter, hopefully with even better news. Thank you very much.
Thank you.
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