Good day, and welcome to the Nakilat fourth quarter 2021 results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ahmed Hazem. Please go ahead.
Thank you, sir. Hello, everyone. Good morning and good afternoon, ladies and gentlemen. This is Ahmed Hazem from EFG Hermes Research. Hope everyone is staying safe and healthy. We'd like to welcome you all today on Nakilat's fourth quarter 2021 results conference call. With us on the line is Mr. Hani Abuaker, CFO of Nakilat, and Mr. Fotios Zeritis, Head of Investor Relations. Without further delay, I'd like to hand over the call to Fotios. Fotios, please go ahead.
Hello, Ahmed. Good morning, everyone, and welcome to Nakilat's 2021 results conference call. For your convenience, this transcript of this call and presentation will be available on the company's investor relations section of our website. As a reminder, this conference call is being recorded and media or press is not allowed to attend this IR conference call. Many of our remarks contain forward-looking statements, and for our factors that cause actual results to differ materially from these forward-looking statements, please refer to slide 2 of the investor relations presentation. In addition, some of our remarks contain non-IFRS financial measures. A reconciliation of this is included in the note of this presentation. Nakilat CFO Hani Abuaker will begin today's call with a discussion of company's highlights, followed by a brief discussion of group's earnings results.
After I will give you an overview of LNG shipping market, and afterwards, I will provide you some highlights on Nakilat's new ESG report. Finally, Nakilat CFO, Hani Abuaker, will walk you through the company's business outlook. Then we'll be both happy to address any question from you guys. Now, I would like to hand it over to the CFO of Nakilat, Mr. Hani Abuaker. Hani, please go ahead.
Thank you, Fotios. Hello, everyone, and welcome to Nakilat full year 2021 earnings results conference call. Together with our Head of Investor Relations, Mr. Fotios Zeritis, we'll guide you through today's presentation. I hope all of you and your family are staying safe and follow the required precautionary measures against the COVID-19. I will call it maybe hopefully this time is the endemic rather than the pandemic. Before getting into the company's great financial results, again, we will always want to mention that Nakilat attractive investment proposition of capitalizing on a growing demand for LNG has been well received by the capital market and the global investors.
First of all, I am pleased to say that 2021 was a very successful year for Nakilat in terms of executing our strategy, which has resulted in achieving high profitability to our shareholders. Yesterday, our board of directors has recommended a cash dividend of 12 QAR per share as a result of rewarding sustainable return to our shareholders based on the company's performance of this year. Since 2009, Nakilat has been committed to rewarding our shareholders with continuous cash dividend distribution and simultaneously expand our LNG shipping portfolio with assets that have a long technical and economic life. Despite of the challenges of the COVID-19, the year of 2021 was overall a successful year for the company. Given Nakilat's strong financial operation capabilities, I'm confident that we will continue to grow our LNG fleet further with high quality charterers and counterparties.
Now please turn to slides 7 and 8 of the presentation. As you can see, we are delighted to report a net profit of QAR 1.35 billion or 0.24 per share for the fiscal year 2021, which represents an increase of 16.7% compared to the same period in 2020. Which was effectively supported by a great improvement in our performance in the LNG shipping segment, the jointly owned and part of it to the wholly owned segment. In addition to adding 2 new LNG vessels in our jointly owned. Nakilat EBITDA reached QAR 1.35 billion in 2021, again, due to the operational excellence and the expansion of our fleet.
Nakilat's goal is always to maximize our bottom line sustainable growth and create added value to our shareholders. Finally, Nakilat current ratio is at 1.17, and our return on equity is close to 13.5%. Finally, Nakilat successfully took the delivery on January 2022 of our fourth LNG carrier newbuild Global Sealine, which we jointly own. However, we commercially and technically manage it here in-house by NSQL. The delivery of the vessels brings Nakilat NSQL in-house management of operation of 25 LNGs, 4 LPGs and 1 floating storage regasification unit, 1 FSRU. As a result of all of the above, Nakilat has demonstrated to all stakeholders its world-class in-house ship management competency and can navigate through any volatile environment.
Now, let me hand it back to Fotios to take you through the overview of the LNG shipping market. Fotios, if you can please take it from here.
Thank you, Hani. Hello, everyone. I would like to give you a brief update of the LNG shipping market at the beginning. During the second half of 2021, the LNG shipping rates strengthened with Asia and Europe competing with each other for LNG cargos, amid low inventories in both regions. In 2021, the high level of term chartering was due to a strong LNG demand, ton-mile growth, and logistical bottlenecks around the world. This dynamic, along with a wide arbitrage for delivering LNG to Asia from the United States during 2021, lead charterers to seek term coverage and security of the shipping capacity. Drewry retains its positive outlook on LNG trade in the following years, with rising demand, which is reflecting the need for LNG by countries who are focused towards the decarbonization goals, while also preserving the energy security.
Drewry projects global LNG trade growth at a compound annual growth rate of 4.6% from 2021 to 2026 due to strengthening demand for power generation as well as industrial and marine bunkering consumption. As a result of this, LNG shipping will also benefit from positive LNG trade outlook as it translates to a rise in shipping demand, especially with increasing exports from United States to Asia. According to Clarksons, the average spot charter rates in the fourth quarter of 2021 for modern vessels tonnage is around $154,000 per day. For the DFDE vessel, is $148,000 per day. For the steam vessels, it was approximately $105,000 per day, the average rates for the fourth quarter of 2021.
Clarksons also assess the average 2021 one-year LNG shipping charter rates at $105,000 for the ME-GI/X-DFs, $86,000 per day for DFDEs, and $57,000 for steams, which is a very helpful benchmark when an owner discusses term charter opportunities. Please turn to slide 11 and 12 of our presentation. In 2021, you can see that the global LNG fleet has 615 vessels in operation and another 157 conventional LNG carriers on the order book until 2025 as per Clarksons. This implies an increase of 26% of the total LNG fleet in terms of number of vessels LNG as of December 2021.
As per the above, the long-term outlook for LNG shipping remains healthy, driven by the upcoming global LNG supply growth, the increased demand for LNG, which will tie up the shipping capacity and will increase shipping requirements. As I mentioned earlier, we would like to give you a short brief of Nakilat's recent ESG updates and initiatives. You can move to the slide 14 of our IR presentation. As we mentioned during our previous conference calls, that Nakilat has sensed the emerging needs and requirements to build a world-class ESG system based on international ESG frameworks and standards. Consequently, the company developed an ESG roadmap during 2020 and 2021 on how the company will address global ESG reporting needs and create the world-class ESG report, which will accurately reflect the company's ESG status and commitment on transparency.
As a result of this, Nakilat published during December 2021 its new environmental, social, and governance ESG report 2020. In this report, featuring important environmental data on gas emission during the company's fleet operations, Nakilat ESG report demonstrates to all stakeholders the company's commitment and active involvement in finding solution to reduce carbon emission in the transport industry in line with IMO's ambition. In addition, it takes a detailed look at important areas such as health safety, climate change, human capital management, including diversity, equity, and inclusion, as well as governance practices. Furthermore, Nakilat's 2020 ESG report was prepared in accordance with the Global Reporting Initiative, GRI standards, and is aligned with the international standards such as United Nations Global Compact, Sustainability Accounting Standards Board, SASB, and Poseidon Principles.
To enhance Nakilat's credibility on its ESG report, the report received an independent limited assurance by Ernst & Young. Now, I would like to hand it back to Mr. Hani Abuaker to give you an insight into Nakilat's business outlook. Hani, please go ahead.
Thank you, Fotios, for the brief overview of the LNG shipping market and the company's highlights on the ESG. Now, I will shortly discuss Nakilat business outlook for 2022. We expect another successful year for Nakilat due to the management effort to maximize the utilization of our entire fleet and to optimize our operating costs. In addition, we see more positive momentum from our shipyard segments that has not really contributed due to COVID-19 in the past couple of years. We would expect it to be coming in line with the normalization after COVID-19. It goes without saying that Nakilat is continuously screening the global LNG shipping market to identify attractive business opportunities, which will add value to our shareholders.
As a final note, before we start to take questions, we would like to inform you that we will not be taking any questions during today's call with respect to QatarEnergy North Field expansion. In addition, Nakilat cannot comment on commercial and technical details related to the North Field LNG project that is owned by Qatargas and by QatarEnergy and Qatargas. For additional details on QatarEnergy announcement, we refer you to QatarEnergy press releases, which is available on their own website. Thank you very much. I think we can ask the operator to open the floor for questions.
The first question comes from Santosh Gupta from Drewry Maritime Financial Research. Please go ahead.
Thank you. Hi, Hani and Fotios. I have two questions. First one is, in case you can, throw more light on the 4 vessels which have secured term charter contracts, at least, like, roughly what is going to be the duration for this term charter contract. Second one is, we saw that the group's share of the net profit, particularly for the shipping segment, has increased if we compare 2020 and 2021. If you could throw some light on the reason thereof. Thank you.
Yeah. Hi, Santosh. First of all, about the term charter, we don't provide details, specific ones about the current fleet or the ones that you just recently received. This is usually confidential information that we don't really discuss about commercial numbers. However, in relation to the better performance that we have seen from the LNG JV, as you can see, there's so many different elements have really contributed to this better performance. You know, 2021, we entered into it. Remember that there's a deleveraging is happening in these joint ventures, so we're paying back the debt. Our interest expense is lower. Better performance by different companies and the way they operate.
We have secured better rates for the short term, you know, portion of our portfolios that is owned with our jointly owned companies. The addition of the new vessels that we had in 2021. All of these has contributed to these better results in 2021. Favorable market condition to some of the, you know, some of the vessels that we lost on the short term with our joint ventures. Better performance with the addition of the two vessels or three vessels in 2021. Lower financing costs, optimizing of the operating costs. All of it honestly has really contributed to such a good performance.
Sure. Thank you.
I hope I answered your question.
Yeah. Thank you.
Thank you. We have currently no further questions in the queue. As a reminder, to ask a question, please signal by pressing star one. We'll pause for just a moment to allow you to.
If there are no further questions, maybe I can take this time to ask one question myself. We noticed that there was a change in probably accounting in the wholly-owned vessels because the other income that used to appear on a separate line now has become part of the revenue for the wholly-owned vessels. Can you please clarify what happened there? Also, could you give us a bit of update on what's the status of the LPG vessels and the LPG markets, and the JV there? Thank you.
Maybe I'll take the first one, and Fotios can give an update about the second one. What we thought about before, we used to have a line about the other income or. Truly, they were about the. It used to be about some sort of revenue generated from previously received to from our charter for the improvement of our vessels performance or vessels or OPEX or changes to some of the CapEx. That used to be reported as a different line item. We thought it's insignificant, and we thought it is part of the actually wholly owned LNG, and it is related to the operation of the wholly owned LNG, and this is why we start to report it on that top line.
This is purely the reason, because it is truly related to the wholly owned LNG vessels about some of the previous improvement. The amount is very insignificant. I think it's usually between QAR 5 million-QAR 10 million max, and that's why we start to report it on the top line. Fotios, you can take the second one.
Hello. Regarding the second question about the LPG, as you know, Nakilat owns only four very large gas carrier, which means that we have only a minor exposure on LPG spot markets to begin with. According to Clarksons, the average spot very large gas carriers were approximately at $35,600 per day in 2021. The current spot very large gas carrier spot rate is approximately at $35,000. Generally speaking, the current fleet order book remains at reasonable levels and supports the VLGC market at the medium term. Looking to the future, market participants are optimistic that all LPG will continue to penetrate a variety end user markets globally, and we expect to be a healthy market, this sentiment of the market.
I hope I answer your question, Ahmed.
Yes, very clearly. Thank you, Mr. Hani. Thank you, Fotios. Maybe one last question. Are there any plans strategically to increase the number of vessels managed in-house instead of status quo? Can we expect another maybe few vessels to come in-house?
Any new vessels that we will secure, we are always looking to manage them in-house. If there's something that is new vessels that we are gonna look for and buy, then for sure, yes, we are always intend to manage them in-house.
Okay. Thank you. Maybe, Operator, do we have any questions in the Q&A now?
Yes, we have one more question from Nafez Alabbas from Ajeez Capital.
Well, thank you, gentlemen, for the call, and congratulations again on the results. My question is on the refinancing of some of the maturing debt. Do you have any update on the talks with the banks or the talks are still at an early stage? Thank you.
You know, Nafeez, we always go through if there's something is maturing and we have to refinance, we always you know able to do that. We have you know different debt will be maturing in 2022 and some in later on in 2025 or 2026. This is for us, business as usual. We are, as a company, the largest LNG shipping company in the world with our contract best rated shipping company. We don't foresee any sort of issues with our refinancing of our debt that is maturing. The only thing this might provide us, at least in 2022 or 2023, a sort of favorable outcome by having them refinance at favorable rates.
All right. Thank you.
You're welcome.
Thank you. We have no further questions in the queue at this time.
Okay. If there are no further questions, Mr. Hani, would you like to give some closing remarks?
I would like to thank you all for your time and the questions and answers. Usually, we discuss it with our senior management here to ensure that your comments or concerns is well heard. That's it from my side. Please stay safe, and hopefully we can see you sometime in the near future in person, and looking forward for that. Thanks.
Thank you. This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.
Thank you, everyone. Have a good day.