Presentation through the orange Ask a Question button on the right bottom corner of the player. I will now hand you over to your host, Andrew Hampson, CEO, to begin today's conference. Thank you.
Richard, thank you very much for that introduction, and welcome to everybody from Irene and myself. We'll just run through the highlights, a little bit on the market outlook, the key financials, and then we'll open it up for a Q&A. If there are any, I think as before, if you table your questions, and we'll see if we can get to them all. Hopefully, our presentation will answer the majority of your questions in any event. So very pleased to announce third quarter 2024 results for Stainless Tankers ASA. We have a net asset value as at quarter end estimated at $ 7.53 per share. That's just over NOK 82 , and that's after the cumulative dividend paid of just over $1 per share, NOK 11. Total NAV return since inception, including the dividends, is 76%.
These results are on the back of an interesting third quarter where we've seen EBITDA drop slightly to $10.2 million and net income of $4.7 million on revenues just over $17 million. The earnings for the quarter have been impacted by weaker pool earnings, which during the quarter averaged roughly $21,500 a day. But underlying that saw a relatively steep falloff during the last three months, which has continued through the end of the quarter. But subsequent to the end of the quarter, we have seen the market returning back into the $20,000 a day range. Rates fell to $19,000 in October. We're already seeing the November fixtures, which are about 80% fixed at the moment, back well over $20,000 a day. The market, as we see it on a macro level and in the medium term, is still one of relatively low fleet growth.
Our current predictions are annual fleet growth in the region of 2.5% per annum over the period from now through mid-2027. And that compares to projected demand growth of around about 3% per annum. So we're still seeing demand growth outstrip anticipated fleet supply growth. The company has agreed to declare a dividend of $3.7 million, which is $0.275 per share, in line with last quarter and in line with expectations, keeping the dividend level flat. This produces an annualized yield in excess of 20% on invested equity. And the dividend this quarter will be payable on or around November 15. Looking forward, as I say, we've already seen rates come back in the latter part of October and through November. And indeed, December fixings are already showing encouraging results based on our current experience of November.
So we are expecting a return into the 20s again for the pool results. And we expect earnings and dividends to remain stable through 2025. The Womar Pool has done an excellent job, in our belief, over the last six months in refixing contracts of affreightment at levels well into the $20,000 a day range and actually increasing the level of COA coverage. So we have looked at and we have considered with the board yesterday as to whether or not we should be looking at fixing out any of the ships from Stainless, be it to the pool or otherwise in the time charter market. But given the level of contract of affreightment coverage, which the pool now has, we decided that there was no reason to actually fix ships separately because of that increased fixture level within the pool.
Just turning to the performance charts, the NAV, sorry, we haven't moved on the slide here. Has it actually moved on what they're seeing? Richard, okay, here we are. Sorry. Right. Okay. I think we're back. Sorry, we're back on track now. Sorry, I hadn't appreciated the summary slide was not showing during that brief talk. Just looking at the performance development since inception graphically, on the left-hand side here, we have in the light blue bars the NAV per share, sorry, the book value per share, and in the dark blue bars, the NAV per share. And I think this is really the main highlight that I want to stress on today is this dramatic increase in the actual fleet value. Clearly, on a book basis, we depreciate the vessels on a historic cost accounting basis.
In the dark blue bars, we look at a mark-to-market valuation of the company on an NAV basis, and that brings us to the market-based NAV of $7.53 per share as at the 30th of September. I think looking at the market values of the fleet since the end of September, those market values have increased since the end of September, so if we were to rebase an NAV today, it would most likely be marginally higher, and I think that that is actually the value market, also looking at the resilience of the charter rates, which we had experienced earlier in the year, so moving to the right-hand chart, and we look at where we started at $4.73 being the IPO proceeds. We've added just over $1.30 per share in operating profit and about $2.50 per share in the value change.
When we knock off the dividends that have already been distributed, that then makes the bridge between the $4.73 and the $7.53. And just to stress again, that total NAV return since inception is 76%. Just turning to the market, I think that we've seen quite clearly here, looking at the time chart of rates and the pool results, we can see very clearly here in the blue line. This is Clarksons's reported one-year TCs. We can see the falloff during the course of the summer and flattening out over the last month. As one might expect, the pool performance being predominantly a spot-based, although with that level of underlying COAs, we've got much more volatility and variability in that, exceeding the highs and actually dipping in some cases down below the lows, which is what we'd seen in the September-October period.
And as I said before, on the back of the current COA position in the fleet, Womar's forecast, the Womar Pool forecast, this is not Stainless's forecast, the Womar Pool forecast for 2025 is in the region of $22,000-$24,000 a day. I think we and Womar are aligned in predicting a recovery of pool results back to the $21,000 a day during December, which is in line with the level that the rates had fallen to in August and September. I think that the weakness in the market is, as we've said before, and I think many of you are aware, the linkage between the chemical tanker market, the product tanker market, and the crude tanker market and the cascade as we actually move through that.
I think the weaker tanker markets, negative impact of OPEC production cuts and various outages in the crude side has carried through into the product side, and then that has slightly impacted the chemicals as well. I think interestingly, and to the benefit of the chemical trades, we have stopped seeing the crude tankers cannibalizing into product. I think that has stopped. Our belief, and I think the market research side also believes that the product tanker market is now stabilizing at a rate which is unlikely to encourage more transgression of the product tankers into the chemical side. We are quite sure that we now have a more stable chemical tanker outlook going forward. We believe, as I say, that the rates will come back in December. We're already starting to see that now with the November and the December fixtures that we're already doing.
And the pool has done a fairly major repositioning of vessels. And we now have much more exposure in the markets east of Suez, which is good. And coupled with the COA coverage in the pool, we are expecting a good and stable rest of the quarter and into 2025. Just more on the sort of market side, I think the Suez disruption, we think, is likely to persist despite political events overnight. I think we're not necessarily seeing a resolution to that in the immediate future. But I think to note also, as we had reported last quarter, that the Panama situation has now normalized. I think it's worthwhile just looking a little bit at the chart on the right, which is looking at the freight markets and the average of 23 routes out of Clarksons.
It's very clear to see the falloff in the freight market that we've experienced during the third quarter. I think we need to put everything in relative terms here. Looking at this chart, you can see that although there has been quite a steep falloff, this is the only thing it's doing is bringing us back to the previous high that we were at towards the end of 2022. I think one should always keep these things in relative context, if you like, that although there has been a fall, it's a fall from a very high level. Just moving on, looking at the supply side, we've readjusted some of our forecasts, particularly on the scrapping side. I think that as the strong market continues, clearly, there is not much propensity to scrap in the stronger markets.
As a consequence, we've actually reduced our forecasts for fleet removals over the forecast period. At the same time, we've seen the order book rise. We're now at about 10.6% of the chemical tanker fleet. 20 new builds, Stainless, as we're looking at Stainless tankers here, 20 new builds ordered during the course of 2024 so far for delivery in 2025 and 2026, and 13 now adding to the order book in 2027. A larger number of vessels, but I think important that the order book is stretching out. I think the important statistic always is to look at the annual level of deliveries. The fact that the order book is lengthening is a function of yard capacity. I think we all feel that we've reached yard capacity at the moment.
And so further orders are just likely to extend the order book further. Twelve new vessels have been delivered year to date into the Stainless tanker fleet. There were 10 last quarter, so that's two more during the course of quarter three. There are five more vessels scheduled for the remainder of 2024. I think we all know that the deliveries towards the end of the year are most likely not going to happen. And I think we see a fair degree of slippage pushing that forward. So scheduled deliveries 2025, 2026 are up to 48 vessels and 13 into 2027. So on the basis of this and looking at then the overall fleet growth, as is shown in the red line in the chart, we're expecting that to peak around about 4% next year, slightly higher than 2024 before falling again in 2026.
An average fleet growth, as I said in the summary, of about 2.5% per annum. I think I will then just pass over to Irene to give us a summary of the financial performance in a little bit more detail.
Thank you, Andy. Starting from the net revenue, third quarter revenue was at $17.2 million, slightly higher than the second quarter revenue, which was impacted by the lower pool earnings as the market weakened. As already stated, net pool TC for the third quarter averaged at $21,400 per day compared to the second quarter at $23,800 per day. Utilization at 99% for this quarter. This was mainly due to the lower off-hire days throughout the quarter, whereas in the second quarter, off-hire days were impacted mainly by the dry docks of Orchid Madeira and Orchid Sylt.
During the quarter, we had all vessels trading in the Womar Pool. And moving on to the OpEx, we note that OpEx for the third quarter are slightly higher than the second quarter. And whereas moving on to the depreciation, we'll note an increase compared to the second quarter. And this was mainly due to lower scrap values caused by the declining steel prices. Net income for the quarter, $4.7 million compared to $4.5 million in the second quarter. At the end of the quarter, cash and cash equivalents comprising only of free cash flow was $3.8 million. Fleet market value, $35.5 million higher than the fleet book value, bringing our NAV $101.7 or $7.53 per share. And our LTV, based on the fleet market value, stable at 45.4% in the third quarter.
I would like to close this restating that the board has approved a dividend of $0.275 per share, which is expected to be paid on or about November 15th. Thank you. We can.
Thanks, Irene, for that. Thank you. I think just, I mean, Irene stated there, but I think it's quite important just to sort of stress again, and notice reading TradeWinds this morning, it's fascinating what TradeWinds manages to pick up, that they're reporting on the cash balance of $3.8 million, as stated in the slide here. This is an effect of free cash balance. So this is excluding all reserves. We have a very significant reserve account for the forthcoming dockings. And we also have mandatory and also self-imposed liquidity reserves within the company.
I think just important to stress there, which I noted from reading TradeWinds earlier, that the cash balance is actually significantly higher than the 3.8. This is the free cash float, if you like. Richard, have we got a few questions that people would like answers to?
We do. And just as a reminder, if any would like to ask a question or make a contribution to today's call, please send your questions through the Ask Question button on the right bottom corner of the player. Okay, Andy, our first question asks, noting in the financial statements that the conditions for vesting the first tranche of warrants were fulfilled, could you please share the specific exercise prices for this tranche?
Well, all of the details of the warrants are clearly laid out. They're in the prospectus. There are three tranches of warrants.
The first tranche vested earlier at a time when the total return had exceeded these various hurdle rates that were 25%, 50%, 75% uplift on the issue price plus dividend distributions. That's the actual trigger. That's the actual trigger for vesting. That then provides the optionality to actually declare the option, and those options, as we've stated before, the company, Stainless, has the alternative to cash settle those options or indeed to issue new shares to actually satisfy those options, and the strike prices of those, as I say, it's laid out in the prospectus, but basically, the strike price is the issue price less the cumulative distributions, so I hope that answers that question.
If you're wanting any guidance on that, our view at the moment, me with a Tufton hat on, is that it's very unlikely that those options are going to be exercised during the course of 2025.
Okay, our next question's in two parts, and it asks, regarding the sales of the Monax and Marmota, what is the progress? And the second part, should we expect a sale to conclude ahead of the upcoming SPS for both vessels?
Yeah, well, interesting question. We had the board meeting yesterday in Oslo. I had to get back to London today to actually give this presentation there. So I'm sorry that I haven't actually progressed very much overnight on this. But we were given the mandate by the board yesterday to start the process. It's something, as soon as I've finished this call, that we will be getting on with as soon as we can. The expectation, yes, is definitely that we'll do so, that we'll do so as soon as possible and therefore do so prior to the docking of those vessels.
Okay, our next question asks, approximately how much of 2025 is fixed through COAs?
Oh, that's an interesting question. To be honest, I don't, I mean, although I know the answer to the question, that is information for the Womar Pool to actually give out because Stainless has vessels within the pool. The pool is a bigger pool. I think that that actually is confidential information to the guys at Womar as to what percentage COA coverage they have, how they run their pool. That's their concern.
Clearly, they're in a competitive environment with other major chemical tanker pool operators. And I don't feel it's my place to actually disclose that information. Having said that, I think looking at any pooling operation of chemical tankers or product tankers or otherwise, that it's very, very rare that one would see a pooling operation with greater than 50% COA coverage. I think then it sort of ceases to be a spot pool if that's what you're saying. So I think I would say that on the upper end, one wouldn't expect to see it at a figure that was greater than 50%. And I think the norm is maybe in the region of 25%-30% type COA coverage. And so the answer will lie somewhere in between those two levels and closer to 50% if there's a concentration of COAs and closer to 25% if there's not.
So I think you can draw your own conclusion from that. But I don't wish to be drawn into divulging information which is confidential to Womar. But clearly, it's at a level where we, as the management of the company and the board of the company, have considered very carefully whether or not we should be fixing any individual vessels on the time charter market and have concluded that we do not think that is necessary given the level of coverage that we know is prevalent in the Womar Pool at the moment.
Okay, I'm going to read the next question out in two separate parts. So the first part, how is the bid-ask in the J19 S&P market and any recent transactions?
I think I don't really want to get too drawn on talking about the pricing and the sort of bid-ask spread on this. I mean, we're going to start the process. I don't want to, I don't really want to get drawn into talking about the pricing, etc., the actual process until we've actually started. I think the S&P market is very strong for these types of ships at the moment. There are a number of interests that we've already had expressed. And so we have a reasonably good idea of what's happening, but I don't want to get drawn publicly into actually discussing recent transactions and bid asks.
Okay, and the second part, what do you expect total dry docking cost to be in 2025?
Well, we've got a number of ships. We've got seven ships, including Monax and Marmota, which are due for docking, be it for special surveys or be it for intermediate surveys during the course of 2025.
We have experience both in Stainless and in Tufton and broader fleet of docking these types of vessels in recent times and also vessels of similar age. And our budgets for this depending upon the scope of work, depending on if we're going through CAP 1 surveys, depending upon where we're doing the dockings, etc. This is a range of between about $1.1-$1.4 million per vessel. But as I say, it will vary in each individual case depending upon the condition of the ship and also depending upon where we are actually docking. And it'll be our intention with the assistance of Womar in positioning the vessels to get the vessels positioned optimally in the Far East China region for these docking so as to limit those costs. And I think just on the costs, we've had good track record recently in meeting budget on the dockings.
We've got good experience there, so reasonably confident in those levels.
Okay, another question asks, what about more asset sales other than the two we alluded to?
At the moment, let's just handle these two. I think that's, I don't really want to go too much more into the process and stuff of the sales. Let us handle these two first, and then we'll look at the remainder of the fleet and we'll make decisions accordingly. I think it's worthwhile just sort of stating here that we made it very clear when we started Stainless that this is a dividend play vehicle. It's not our intention to develop the company into a fully-fledged operating company with longer life. It's always been our intention to return money to investors.
Clearly, once these ships are sold, that is what we will look to do in the best interests of the investors. I mean, I think that's maybe more what these questions are getting at, Richard, is more the sort of direction as to what happens. We are not deviating from what we laid out in the prospectus and from what we laid out in the various presentations that we've given to investors. We will go through the sales process of these two ships. We will look for the best and most effective way to return money to investors. Then we will continue to evaluate and operate the remainder of the fleet in an optimum way to achieve the best shareholder value.
Okay, thanks, Andy. There's no further questions at the moment. If you're happy to give it a minute or two before we close.
People have had plenty of time while I've been answering all of that. But I mean, if anybody does have any other questions, if they haven't posed them already, Irene and myself, very happy to take a call. If it's not something you wish to ask in public or just send us an email, I'm very happy to answer any questions you may have.
Okay, so we don't have any more questions. Hand it over to Andrew for any further closing remarks.
Well, as I say, we're looking forward to the fourth quarter. We're looking forward to 2025. I think we have strong conviction in a stabilization of the rates in the low $20,000 a day range.
And that will enable us to maintain a stable financial performance and a stable dividend flow, as I say, which at the moment is giving a 22% yield on current investment, which we think is a fantastic return. We will see what changes in the political environment over the coming months as the overnight results get confirmed and come in more. And that will be an interesting area to follow. And maybe at the next quarterly call, we can maybe discuss that in a little bit more detail. So thank you very much for your attention today and your time. And thank you very much for your support in your investment in Stainless Tankers ASA.
Okay, thank you for joining today's call, everybody. And you may now disconnect.