Okay, yep. Then I think we have it.
We have everything. Okay, then I start again. Welcome to the investment presentation of Western Bulk for Second Half 2023. Next page, Kenneth. Agenda: Kenneth will first go through the second half's results and also balance sheet, and then now we go through the main reason behind the results, and then talk about measures to improve the performance, and then again Q&A. Kenneth, please.
Yes, first just the plain results, and then Hans will revert more with explanations behind. A s you see, the results, the P&L net TC $2.3 million in the second half of the year, $9.3 million for the full year. That's down from $116 million for the full year in 2022. T he thing is, we managed to generate a positive trading performance, but not enough to cover the G&A. We have a cost base of about $25 million, which is kind of the fixed cost for salary and IT systems and offices and so. T hat's down from $47.6 million last year, but that's mainly due to bonus accrual. W e managed to keep the cost level at about $25 million. That's what we've kept for several years now. N et TC has to be above $25 million to generate a net profit.
That's not been the case for the first and second half of the year. Looking at the fleet, we managed to increase the fleet somewhat to 128 vessels. I know we have ambitions of increasing more, but as Hans will revert to, market circumstances have been the best for volume growth. Second half year, we reached 126 vessels and 128 for the full year. That's up from 111 in same full year last year. Quite a lot of the increase is from Panamax. We had a good growth within the Panamax segment, which Hans also will revert to, while it's been more a stable volume within the Supramax and Ultramax segments. Then net TC per ship day of $100 a day in the second half of the year, $202 for the full year.
As I mentioned, not enough to get into positive territory as we have a break-even at TC margin per ship day of around $550/ day at the current volume. T hen net TC margin per ship day, 1% of the market in the second half of the year, 2% for the full year. Of course, that's below the historical average. We say that this should be between 7% and 11%. T hat's a percentage of a BSI at $11,255 a day, which is kind of in line with historical average as well. I t's not the market level itself that's causing us not reaching the results. Net TC margin per ship day, as mentioned, $100 a day, 1% of the BSI with a volume of 128 vessels for the second half of the year.
As you see on the bottom left graph, net TC margin per ship day varied quite significantly over the last periods with $100 as a low, at least since back during 2020 and so far back. Net TC margin also, percent of market, 1% is also on the low side. An average volume you see increasing somewhat throughout the period. We are focusing on some growth, but not growing too much to balance out, call it, the cost of the investment in the growth. Then looking at a balance sheet: book equity $52 million and free cash of $33 million. We also have undrawn credit facilities of $35 million. I say book equity 52, healthy level. It's down from $68 million in 2022, but that's due to we paid $7 million in dividend and also operational loss throughout 2023.
Looking at the cash situation, it's decreased from $57 million to $33 million following dividend payments and operational loss, but still at the healthy level with room to grow volume as we haven't drawn anything on the $35 million credit facilities. You see restricted cash also coming down. That's primarily due to the setup of the financing as well. We have improved the way we finance our borrowing. I t requires less restricted cash. A lso the remaining $7.5 million in restricted cash is related to margins for derivative trading, where you have to pay some margins upfront for the trading. A s mentioned, no interest-bearing debt. T hen other payables, which is our main balance sheet item of about $54 million, mainly estimated costs for ongoing live voyages. T hat will vary a lot with activity and the overall cost level. That's it for this.
Then I'll leave it to Hans.
Yeah, the main reason behind that 2023 result. If we go to next, Kenneth. The main reason for it is that we have had two negative market views in hindsight that used to see that was wrong. A s we said about the first half year, we had a negative and a short position into this sharp increase in the market after Chinese New Year, which we lost quite a lot on. We were trying to ride the backwardation and the contango in the market. T he irony is that we've been sitting through that position. We've been good. T hat's the way it is. We've been stopped out by how much risk we can take. T hen also in second half, we also had a negative position when going into this increase in the autumn.
Then at the end of the year, we were not short, but then we got some losses due to the Panama Canal situation where we had a lot of cargo that should go through the channel. Y eah, we had to go around and paying very high money to go through. If we make the next, Kenneth. This year seems like a year that our business model had got everything against us. Because if you look at the structure of the market this year, it's been a situation for most of the year where you had the tonnage was priced at a certain level, and then you had the FFA priced quite significantly behind that or below that, I mean. T hat means that if you take a vessel and try to hedge it, you're locking a loss.
As you know, we tried not to take outright risk out on the curve. We should take most of the risk within six months or even less. That makes it very difficult for us to get on period tonnage without taking too much risk out on the curve. The same you had with the cargo, which then again, forward cargo was then priced under the FFA curve. I f you then take forward cargo and try to hedge it with FFA or a vessel, you lock in a loss. That makes our business model very difficult to handle. We are left with playing the spot-spot market and playing the different basins risk or taking outright risk far out on the curve.
That's again led that we got too little period tonnage on the book, and then again, too little optionality to play with when this sharp increase in the market comes. The third point here is that this is just a part of our normal business, but this year that has gone against us, that we use a lot of FFA to hedge our positions. N ormally that goes in zero because you win some, you lose some. T his year, for example, we had quite a lot of cargo going through the Panama Canal, and that was partly hedged with FFA. T hen you get this sharp uptick in the market, as we see as we show with the top curve here, and you hedge it with the middle curve. That is not a good position. W e got some million dollars in loss on the Panama Canal situation.
If we take the next, Kenneth. As I said, we're left with spot-spot as one of the main things to do arbitrage and to make money on this year. T hen you normally start with the cargo. W hen you get this sharp increase in the market, it gets much more difficult to take cargo and a vessel at the same time. A gain, very little opportunities for us to make money. W e had done quite well on spot-spot this year, but not as good as we hoped to. A gain, a difficult market for our business model. Next, Kenneth. We also tried to grow volume. A s I said two slides ago, it's been hard to get on more period tonnage. hen we had tried to grow, but at a cost.
Most of the growth had come from the Panamax, and we were expecting that that's going to cost us money. W e have taken on tonnage, and we're building, and we're building good relationships to customers. W e're going to continue that activity. And Mohneesh now run that business from Dubai. W e have been hiring people recently, and are still looking to hire people to grow the Panamax business because we see that this huge opportunity to take our skills from the Supramax market and use that in the Panamax market. I think that still we're going to see growth, and you're still going to see us putting more efforts and more resources into the Panamax market. A gain, volume growth has been difficult to maintain. It was difficult to maintain our existing volume this year due to what I said earlier.
It has come to a cost to grow the volume. Next, Kenneth. Last one here is that, as I say again, Panama Canal is now running about 60% capacity. It was down to like 50%. The price of going through spiked through the roof. Now it's coming down again. A s I said, due to the hedging and also due to that some of our vessels had to go around, has cost us quite a few million dollars. Yeah, that's something that happens, and that's kind of risk we're running in this market. The next one, Kenneth. To sum it up, as I said, to sum up what has gone wrong this year, we have been too negative on the market this year. We underestimated how strong the market's going to be.
As I said, the business model, when you had the pricing with steel, FFA, and cargo, as I said on the previous slide, made it very hard to take risk and to play the market with our business model where we're not taking risk far out on the curve. Spot-spot has been difficult due to the market structures. We have been investing in new business. It costs quite a lot of money. Also the same with the Panama Canal situation. Next, Kenneth. If we look at going forward, take the next one. It's no big change in strategy. We're still trying to build the commercial strength of the company, building new trades, developing the existing one, trying to increase the volume both in Handysize Supramax and Panamax, and yeah, continue building the company.
Being close to the customers, yeah, it doesn't have to say too much about that. We're working very hard with our existing customers to better understand their needs and fill their needs, and also working hard to get new customers and getting close to the customers. The only asset this company has is the people. As I said earlier, we are recruiting new people now for growing Panamax. We're also investing in existing people and recruiting both by the trainee program, but also hiring more experienced people. Working smarter is back again, as I said earlier, about technology, trying to use our databases and technology to do better decisions, taking the right risk, and optimizing our fleet.
Especially, we've seen this year, we're doing huge steps forward in the way that we optimize the fleet and picking the right vessels to fill the cargo that the cargo needs. Y eah, that's about it. T hen I guess, Kenneth, we open up for Q&A. Hello again, Lian.
Yes. Hello. Can you hear me?
Yes, I hear you.
Good. Thinking about the Panamax capabilities that you're building up, what type of costs are we seeing needing to be incurred? More on a fixed basis, I'm thinking, on this?
The fixed base is driven by people. We are not adding to the administration, this kind of thing. It's just down to the people that we hire for doing the chartering and maybe a little bit on operations.
Okay. I understand that the markets have been unfavorable in terms of where the FFAs have been versus tonnage and cargo. C an you say anything about what has caused this situation? Is there anything that we can look out for when we look forward as to how this has developed this year?
The reason why you have the pricing structure in the market where you have had tonnage priced even adjusted for Handysize and everything above the FFA and the forward cargo below that again, the reason for that, I don't really know. I think it has something with the optimism in the market. It has something to do with the total structure. W e've also seen that this year, it seems like the FFA market has lived very much its life on its own. For example, if you look at, as I said, the spike you had in the market in the first half, February, March, that actually settled lower than if you look at the pricing of the Q2 FFA, it actually settled lower than the pricing at the beginning of February.
It was a spike in FFA, which partly was followed by the real market, and then everything fell down again.
Okay. I guess the sentiment in the market seems to have changed quite a bit, right? There's a lot more optimism now than there is before. I guess the question is really, does that leave less on the table for you guys than previously?
It's a tough competition out there. You see some of the shipowners have tried to go into vertical, to take more of the value chain. It's a tough competition. That said, the last few months, it's been possible again to take tonnage and to hedge it. We'll see that it's better now for our business model to take positions.
Okay. Thank you. I'll leave it over.
Then Ulrik. Yeah.
Hi. Morning, everyone. Hey, Hans. I just want to get some more color, if I can, about what you're doing with Panamaxes currently. I believe that you've closed the Copenhagen office. Do you have any Panamaxes on charter? What are you doing right now, and what happened subsequent to when you first attempted to get into Panamaxes at the end of 2022? Can you just walk us through what happened there?
Nothing special, to be honest. We didn't announce we're going to do it at the Panamax. We hired one person in Copenhagen to run the business. We're building up. We have some ships on period. Mohneesh in Dubai has taken all the responsibility. W e hire people and want to grow that business. It's nothing more complicated than that.
Okay. It's been handed over. How many Panamaxes do you have in the fleet currently, then?
To be honest.
We don't comment specifically on the various segments. A s I said in the presentation, a lot of the growth is due to Panamax. D efinitely, we see some synergies between the segments, bringing the knowledge and the experience from trading within the Supramax segment, which to some extent, you can say, is a bit more complex, and use some of that competence within the Panamax area. D efinitely, there is an ambition to grow that area and also grow our presence then within the Singapore office, Dubai office, and in Oslo/Copenhagen office to actually create the global presence within the Panamax area. I think maybe it takes some investments to get up there and get the full market view and full coverage with employees. W e have been hiring, and we are still hiring more to grow within that area and see a potential within it.
Okay. You still have a Copenhagen office then because it wasn't mentioned in your report?
We still have the office, but there's no one employed there right now.
Okay. Okay. All right. That's it. Thank you so much.
Welcome. More questions?
Yeah.
Yeah. No question then. With that, thank you for the meeting.
Thank you very much.
Thank you.