Good morning, everyone, welcome to the first quarter results presentation for Stainless Tankers ASA. As usual, we've got a Q&A button on the screen, any of you during the course of the presentation have any questions, please pose those using the Q&A button. We'll attempt to answer them. Hopefully, we answer them during the course of the presentation anyway, if we haven't, we'll come back to them at the end. I'm joined here in London by Irene, as usual, we've also got Nicolas. We've also got Nicolas on the video call here from our office in Geneva.
Before launching into the presentation, and you may have noticed in our results release this morning, I wanted to just touch on a couple of organizational changes, which are important both to Tufton as well as to Stainless. Just starting with Tufton Investment Management, the managing company for Stainless Tankers ASA, Ted Kalborg, our Chairman and Founder of the company back in 1985, has stepped down as Chairman of the company, and I have assumed his role as Chairman of Tufton Investment Management. As at the end of June, I will be relinquishing executive duties and step down as CEO of Tufton, and Nicolas Tirogalas, our current CIO, will take my place as CEO.
Nicolas, together with my family and Ted's family, remain the major shareholders in the Tufton Group. We remain on the management and investment committees and on the main board of the company as main shareholders. If you like, there is a change of roles, but not necessarily a change of the people involved in the strategic direction of the company. Just moving on to Stainless. Ted is tendering his resignation as Chairman of the company at the forthcoming AGM, which is on the 20th. The board have supported me as being Ted's replacement as Chairman of Stainless, and that will go to the AGM for a vote.
Tufton have therefore proposed that I am replaced as CEO of Stainless Tankers by Nicolas, which mirrors in effect what we're doing at Tufton as well. That will all take place post the AGM. The consistent factor and the solid rock will be our CFO, sitting next to me. Irene will continue in her current role. I just wanted to get those organizational changes out of the way first. Anybody has any questions on those, very happy to take them or answer them privately if there's anything that you wish to ask either Nicolas, Irene or myself.
I think just moving on then, we'll move on to the results presentation itself, and if we can flick to the first slide. Well, I'm just flipping to the first slide. Hold on. Sorry, here we are now. Got the first slide. Okay, starting with the NAV performance, we've got a total return now of 53.6% since inception, with 60% of the original equity has now been distributed. NAV per share is at $4.71 as at the end of the quarter, after having paid the $0.135 per share in March.
$ equivalent of that dollar share NAV per share is about $ 43.5, so very much at the time on the quoted share price. The financial results for the quarter, total return was up 2%. Revenue at $8 million, up slightly on Q4, and EBITDA at $3.4 million, which is quite significantly up on the $2.6 million from Q4. Main reason for the improvement is higher pool rates, but also during the quarter, much improved utilization, not as much planned time off for the dockings, and we've got better operating cost performance as well.
The company has declared a first quarter 2026 dividend at the same rate of $0.135 per share, which will be payable at the beginning of June. On the prevailing share price at quarter end of 44, this represents an 11.5% per annum dividend yield. Following that distribution, we will have returned $3.1 per share, representing 62% of the initial capital. Now, I suppose the interesting bit is really looking at the market and looking at the market rates. During the first quarter, the STST Pool incomes represented an average of 16.4.
That average figure is represented by a fairly steadily increasing rate from January through February through March, with March ending up at just under $17,000 a day, and that average is up from $15,500 a day in Q4. The chemical market, and we'll come onto this in a bit, we'll come onto this in a bit more detail in the market. Clearly the chemical tanker market was much slower responding to the events in the Middle East that happened at the end of February than we saw in the crude market and the products market.
It was really getting into late April that we started seeing big increases in the freight earnings in the chemical market, whereas we saw it a lot earlier in the crude and the product markets, but we have seen this steady increase. April is closed now just slightly under $19,000 a day. May, well, it's still in progress at the moment, but we have nearly 80% of May fixed already, and that's round about the $20,000-$25,000 a day range. What we're seeing already for fixtures in June is higher than May at the moment. Clearly there is a lot of, there's a lot of time and there's a lot of change can happen very quickly, as we have seen over the last couple of months.
We're going to see a very strong Q2 when it comes to earnings. We'll come onto that market bit in a little while to just try and explain some of the fundamentals as to why we are currently seeing this spike in the rates. We've always talked about and are very conscious of the supply side of the fleet. There are a high number of deliveries currently scheduled for 2026, 2027, and indeed falling into 2028 now.
Equally, we have always seen and continue to see a very high degree of slippage, that is vessels not being delivered on their scheduled timing, particularly from the Chinese yards that are now starting to come into this market much more than the traditional Japanese market where deliveries are almost to the day adhered to. The outlook, as I say, we are projecting a strong Q2 pool guidance from Womar, and our own research leads us to believe that if there is some resolution in the Middle East, that we're likely to revert to a high teens, low 20 type of rate environment in the second half of 2026, with slightly higher figures in 2027 as a result of reconfiguring of trade routes.
Using our projections for the second quarter and 19,000 a day for the second half of 2026 and 20 a day for 2027, we have a 1.6 times dividend coverage in our 18-month outlook, which is the rolling outlook that we use for dividend cover purposes, which is very strong. Just turning to the usual charts that we show you, that we show you here, the NAV total return index on the right-hand scale, now showing the 53.6 uplift since inception. This is clearly prior to the dividend that we've just declared today, with 60% of the total capital being returned. The gap chart on the right is showing us very close, $4.73 versus $4.71. It does say dollars per share on the left-hand side.
That's dollars per share and as I say, that 471 is roughly $ 43.5 per share, which is actually slightly under today's trading share price. And the movement there being approximately $2 increase in net operating profit, just under $1 increase in the change in vessel values, and then roughly three having been paid out as dividends. On the earnings side and the market, since the end of February and the commencement of conflict in the Middle East, we've clearly seen a large drop-off in exports out of the Arabian Gulf, and that's represented in the chart on the left-hand side by the light green or turquoise line.
That's driven off the right-hand scale. We can see the drop-off there starting towards the end, towards the end of the period. The Atlantic trades are shown in the dark blue line. We can see the upward movements there. That's running off the left-hand scale, which is approximately 3x the scale of the right-hand scale. Don't get confused by the individual lines. I think it's the relative movements that are important. Basically what we've seen, and as I say, we saw this in the crude tanker fleet and we saw this in the product tanker fleet slightly earlier than the chemicals, is a lot of vessels being stuck within the Gulf itself, reducing supply of vessels.
Fortunately, Stainless has no vessels that are in the Gulf, and Womar pool has very limited number of vessels which are in the Gulf, and they are still actually being paid for those vessels. The actual blockage itself has not negatively impacted Stainless, nor indeed the Womar pool. What we've seen then from a macro fleet perspective is a massive movement of tonnage westbound in some in the crude and product areas to Africa, but also predominantly to the U.S. and the Americas, lifting chemicals, products and crude from those areas and then transporting much, much longer ton-mile distances to supplement a lot of the Asian trades that were previously coming out of the Persian Gulf. That's why we're seeing this spike in rates.
Large transit of fleet westbound, predominantly ballast, now actually performing much longer haul trade routes, servicing what is being missed from the traditional Middle East export market. We can see on the right, the pool result at 16.4, which was up quarter-on-quarter anyway. The spot market's starting to rise late March into April, continuing to do so. Basically, as I say, that loss of export volume from the Gulf is being more than made up by longer voyages out of the Americas. The pool is very well positioned with more than 20 vessels in the Atlantic Basin, where we're continuing to see much stronger rates.
Interestingly, just as a bit of an anecdote, but not, we were just discussing this morning at our market meeting, we're seeing the U.S. now exporting 6.4 million barrels up from four. We're seeing the Atlantic Basin for product carriers now spot rates in the region of $80,000 a day versus the Pacific, which is about half that. The Atlantic Basin at the moment for products, for easy chems, for mainstream chems, is a very, very strong market, and that is predominantly where the Womar Pool is positioned at the moment. I think the pool has got that absolutely right for where we are just now.
Just an update on the geopolitics outside directly of the Iranian conflict, and we've mentioned this before and shown you the chart in the top left. This is looking at the crude and the product, VLCCs, Suezmaxes, Aframaxes, crude trades, LRs, MRs, product trades. The reason for this, there is a knock-on from the particularly the MRs in the product trade into the chemical tanker trade, where we're looking at the percentage of the fleet currently under sanctions. The gray bars are the position in August 2024, the light blue bars in August 2025, and the dark blue bars are where we are today.
What we're seeing in the product sector, which, if you like, is the relevant one for us in the chemical tanker trades, is a steady increase in the number of LRs and MRs, which are under sanctioned. 16% of the total tanker fleet sanctioned as at the end of February. When you add to that 10% of the fleet which is stuck in the Persian Gulf as a result of the closure of the strait, we now have about 25% of the tanker fleet essentially unavailable for what we would classify as legitimate commercial trades. The war and the sanctions are pushing a smaller pool of vessels into compliant, into compliant trading, and this is another of the reasons why we're seeing this spike in rates.
New building deliveries. We've just shown here a chart to give you an idea of the slippage. Bearing in mind that the right-hand scale is negative as we increasing negative as we as we come down, what we're seeing there in 2025 is a large slippage number coming through there. Nearly half of the vessels that were planned actually not coming out in 2025, that will roll over into 2026, and consequently it rolls over further. I think we will continue to see this as we see newer Chinese yards trying to get into the chemical tanker, new building space. I think although some of the order book figures may appear a little bit scary, we need to be very cognizant of the slippage factor that will occur.
I also just talking about the supply side, we also need to be wary that clearly in an improved freight rate environment, there is less propensity to scrap. So although we have an aging and an older global fleet of chemical tankers, which one might naturally assume where scrapping was starting to increase, clearly if we're in a $24,000, $25,000, $26,000 a day freight rate environment, we're not going to see a whole lot of scrapping. Having said that, it always comes at some stage, so although it may not come when we actually plan it because of a favorable rate environment, it will come eventually. We repeat on page 8 the normal chart that we have of net fleet development, which is showing a fleet growth high in 2026, 2027.
I think in reality, we need to blend that, as I've said before, over the three, four-year projection period because there will be significant slippage. You can see from the historical fleet growth figures that what we've seen since 2021, et cetera, is more likely to be extended on that same trajectory rather than the extreme jump up that the order book figures currently show for 2026 and 2027, and average out round about 4% per annum over the forthcoming three years. We've had 11 vessels delivered so far in 2026, and the order book is currently about 16% of the global fleet in our segment. So that's looking at 10 to 25,000 deadweight tonnage.
As I say, with the order book, one has to always look at how long the order book is to work out what the average per annum deliveries are. Clearly as order books grow and extend further, you're dividing that by a greater number of years. Indeed, although we're showing here only through to 2028, we were discussing yesterday in Oslo at the board meeting of some chemical tanker inquiries for new buildings actually being quoted beyond 2030 for delivery time. As I say, the large percentage in the order book, but it is spread over an increasing number of years and matching, as I say, on average, in our view, round about 4% per annum, which is in line with long-term compound average growth rates in demand.
We continue to see a growth in exports from the Atlantic Basin, and as I've mentioned already, supply restrictions from the conflict and the war in Iran. I think one of the longer term consequences, clearly if there is a resolution to the situation in the Strait of Hormuz, it's not going to impact trade immediately. I think things will, the migration of stuff to Atlantic Basin will then have to remigrate back, which itself will most likely cause another spike in rates before the situation normalizes.
Our view at Tufton, as with the Russia-Ukraine conflict, is that this issue with the Strait of Hormuz is going to call into question energy security, energy supply security for a whole lot of different countries that haven't previously been impacted, particularly here major Asian importers. We reckon that some of the longer and increased trade routes will actually be maintained in order to maintain energy security in the same way that we've seen oil product and gas situation change permanently, we think, from dependency upon Russia, that there is going to be a change in dependency on some of the Middle Eastern exporters, that people will be looking for alternatives, which inevitably will lead to longer cargo passage.
We are cautiously optimistic about the future. With that, I'm gonna pass over to Irene, who will take us through the detail of some of the numbers.
Overall, the quarter reflects an improved operational and financial performance. Operationally, all vessels traded within the Womar pool, achieving a stronger utilization, just over 93%, up from approximately 86% in the previous quarter. This reflects the return to normalized operations, following the completion of the previous quarter dry dockings and despite the scheduled dry docking of Barbouni. Importantly, the Barbouni completed its fourth intermediate survey on time and at a cost of $ 1.26 million, which was below the budget of $ 1.3 million.
With the completion of the Barbouni, no further dry docks are scheduled for 2026, with the next dry dock scheduled in the first quarter of 2027. On the financial side, revenue increased to $8 million compared to $7.3 million in the previous quarter, with net pool TCE averaging at $16.4 thousand compared to $15.4 thousand per day in the previous quarter. This resulted in an EBITDA of $3.4 million increase compared to $2.6 million in the previous quarter, and mainly reflected the higher pool rates, the improved utilization, and the lower OpEx, partly offset by the higher SG&A cost.
The company overall recorded a net loss of $ 57,000, significantly lower than the net loss of $1 million the previous quarter. Moving on to the balance sheet. At the end of the quarter, unrestricted cash balance was at $ 2 million. Fleet book value at $ 86.9 million with an fleet market value unchanged to $ 98.8 million. This reflect an NAV for the quarter of $ 63.6 million or equivalent to $4.71 per share, with LTV dropping to 37.5%.
As for the company's dividend policy, the full Q dividend was paid in March, with the company declaring a dividend of $0.135 per share for the first quarter of 2026 and payable on or about first of June. Since IPO and including the dividend payable in the next few weeks, total return is $3.10 per share, which is equivalent to approximately 62% of the initial capital raised. With this, we conclude our presentation. We can move on to any questions.
Just before turning to the questions, I just wanted to comment on the outlook and the forward strategy of the company. We've discussed many times before the aging fleet that we currently have and when the appropriate time is to be looking at asset disposals. Clearly with the market the way it is today, I think that since we last spoke, clearly the current situation was not an expected situation. We need to take advantage of this exceptionally high freight rate environment that we're currently in.
Having said that, we are very cognizant of the dry dockings, the forthcoming dry dockings that we have starting in Q1 and Q2 next year. Our view at the moment is that the disposal timing is likely to be in the latter part of this year to commence the disposals of the older vessels as they get closer to their 4th special survey. Trying to take as much advantage as we currently can of these extreme high freight rates. Just take into account there that basically, you know, $25,000 a day is $17,000-$18,000 a day net, which is more than a 30% yield on the current valuation of our typical vessels.
That's an opportunity not to be missed at the moment to significantly write down the overall investment. We need to get this balance right from a timing point of view of taking as much advantage as we can of these current extreme rates. As I say, being wary of the aging of the ships and the forthcoming cost of the four special surveys, any CAP 1 surveys, and indeed the time off that is now required to do these increasing laborious tasks. I mean, the last ships we've had in have been taking 30-35 days off, so it's a big loss of earnings period as well as a high CapEx period.
We're very conscious of that, and we've been discussing this with the board yesterday, and we will put a plan forward within the next couple of months when we're seeing how things are developing in the Middle East. I think Irene was just I know you know the answer to the question, but there's a question there about the SG&A and what appears to be a very dramatic increase in the SG&A cost.
Yeah, that's correct.
It's quite explainable I think, isn't it?
Yeah. The reason of the high increase compared to the previous quarter is mainly to the fair value adjustments of the warrants. The fair value of the liability of the warrants, regardless that these have not vested yet, is being remeasured every quarter. For this quarter, this resulted in a revaluation loss, which as a result increased SG&A expenses compared to the previous quarter, in the previous quarter, we had a revaluation gain, reducing the cost to approximately $ 200,000.
Okay. I think, Irene, what we may do actually there in future.
We could break down.
is to split out the actual SG&A from the warrant so that it's
It's clear.
Yeah. as to what the underlying, you know, actual SG&A is, which is hardly moving at all. It's revaluation of the warrants being included within that category for brevity purposes, in showing the summary financials. Okay. We do not have any other questions at the moment, which says to me that we must have given you a thoroughly comprehensive review of the quarter, in that we've answered everything that you have. Busy times, very interesting times, you know, I think one of the main messages being high rates at the moment.
We've not endangered any STST ships or crews, and we will stay away from the Straits as best we can, and continue to benefit as we can. Hold on. There was another question there again. "How close to vesting of the second and third tranches of the debt warrants will the liability and accounts unwind?" If they don't vest, yes, the liability will eventually unwind. Our current, clearly depends upon the share price and any further capital returns and things like that, but our current thinking is that the second tranche may vest shortly before the end of the year. We're unsure about the third.
It's-
That's potentially too far in the future, but maybe unlikely that the third does vest. The second, I would have thought is fairly likely to vest before the end of the year. Okay. In the absence of any other questions, I think we'll call that a day, and we'll at least Irene and Nicholas will look forward to talking to you in a quarter's time.
Yeah. Mm-hmm.
in August. As I say, on, with regard to the organizational changes at Tufton and at Stainless, very happy to answer any individual questions that you may have on those if any of you have any. Thanks very much indeed for your time and attention, and we will get back to continuing to make this a very profitable investment. Thank you very much.
Thanks.