Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry conference call on the fourth quarter 2018 financial results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer, and Mr. Anastasios Aslidis, Chief Financial Officer of the company. At this time, all participant lines are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. I must advise the conference is being recorded today. I would now like to pass the floor to your first speaker, Mr. Pittas. Please go ahead, sir.
Thank you all for joining us today for our scheduled conference call. Together with me is Anastasios Aslidis, our CFO. The purpose of today's call is to discuss our financial results for the fourth quarter period ended December 31, 2018, and our full year 2018 results. In May 2018, Euroseas contributed to EuroDry its dry bulk fleet of six vessels, one Ultramax and two Kamsarmax vessels built between 2016 and 2018, and three Japanese-built Panamax vessels built between 2000 and 2004. EuroDry was spun off from Euroseas on May 30, 2018. The results in this presentation refer to the dry bulk fleet for the periods presented. Please turn to slide three. Our income statement highlights are shown here. For the fourth quarter of 2018, we reported total net revenues of $7 million, adjusted EBITDA of $3.5 million, and adjusted net income attributable to common shareholders of $700,000.
Basic and diluted earnings per share attributable to common shareholders for the fourth quarter of 2018 was $0.31 per share. Our CFO, Anastasios Aslidis, will go over our financial highlights in more detail later on in this presentation. Please turn to slide four for our chartering operations and sale and purchase highlights. We recently announced the acquisition of the Star of Nippon, a Panamax-sized dry bulk carrier of 75,000 deadweight, built in 2004 in Japan for $10.1 million. The vessel was delivered to us on November 30, 2018 and renamed Starlight. The ship was immediately chartered out with earliest delivery in July and latest in October 2018 at $9,000 per day for the first 40 days, and thereafter at 100% of the BPI four-time charter route index. Our Pantelis was fixed for a trip of about 20 days at $11,000 per day on November 9.
Thereafter, it was fixed for a trip of about 50 days at $9,050 per day, and following that, fixed for a further trip of about 20 days at $5,500 per day. The Tasos was fixed for a trip of about 30 days at $7,750 per day from December 13, and then fixed for a trip of about 60 days at $12,250 per day, plus a ballast bonus of $225,000, which should result in about $7,000-$7,500 per day average time charter equivalent for the duration of the voyage. During the fourth quarter of 2018, the dry bulk market was influenced by the continued uncertainty caused by the trade tensions between the U.S. and China. Charter rates weakened throughout the quarter, as can be seen by our fixtures during this period, and further declines have been registered in January and February 2019.
In this environment, we have timely secured FFA contracts to cover the majority of our vessels with fixed-rate contracts during 2019. As a result, in the first quarter of 2019, we have covered the equivalent of 1.3 Panamax vessels at $11,950 per day with an FFA. For the second and third quarters of 2019, we have covered the equivalent of three Panamax vessels at $11,261 per day and $11,128 per day, respectively. For the fourth quarter of 2019, we fixed the equivalent of two vessels at $11,192 per day. It should be noted that there are size, route, and other important differences between FFA contracts and physical charters, notwithstanding the need to post cash margins, which may increase if the market changes against our positions.
Our initial margin for these positions was about $1 million, which we could now withdraw if needed, as the drop in the markets provides us with unrealized yet gains. There were no dry dockings or repairs during this quarter. Please turn to slide five for a current snapshot of EuroDry's fleet. Including the Starlight, EuroDry comprises now of seven dry bulk vessels with a cargo carrying capacity of 528,000 deadweight and with a fleet average age of 10.6 years old. Slide six shows the employment schedule. As you can see, effective coverage for the remainder of 2019 stands at about 66%.
Having secured the two Kamsarmaxes until mid-2020 on profitable rates, we are pursuing the strategy of employing the remaining five of our vessels on short-term contracts, index-linked contracts, or even pools, have secured the equivalent of a bit less than three additional vessels at around $11,200 per day through FFAs, as already mentioned. Please turn to slide eight. According to the January IMF projected world GDP growth report, in 2018, growth is still expected to be 3.7%, same as the previous quarter. Only the Eurozone and Japan have been revised downwards by about 0.2% to 1.8% and 0.9% respectively. All other main countries' expectations remain the same. For 2019, global GDP growth is expected to be 3.5%, down from 3.7% expected during the previous quarter. The mix of the various countries is expected to be a bit different, though, than in 2018.
The developed world and China should grow a bit less than in 2018, while some areas of the developing world, mainly India and Brazil, should grow at a slightly faster pace. Turning on to the dry bulk trade, according to Clarksons, the trade in 2018 is now projected to have grown by 2.7%, down from the 3.7% expected in the previous quarter estimate. In 2019, Clarksons expects a healthy 3.1% rate growth. We see more risks to the downside on this projection, especially after the Vale incident. Please turn to slide nine. The dry bulk order book is still close to its lowest point in over two decades, which is likely to set the stage for constrained fleet growth for at least the next couple of years, given that it takes about one and a half to two years for a vessel to be delivered once it has been ordered.
Let's turn to slide 10 for the dry bulk delivery schedule. At the beginning of 2019, the order book stood at 5%, up from the 2.9% of the beginning of 2018. This increase was partly due to slippage and partly due to new orders placed at the beginning of 2018. For 2020, the order book stands at 4.2% or about 40 million deadweight tons, still a very low number. Let's turn to slide 11, where we summarize our outlook on the dry bulk market. In 2018, we saw an average increase of about 25% in charter rates over 2017. The last quarter, however, as already said, disappointed, and rates ended up slightly worse than the average despite the opposite expectations, mainly due to the Chinese restriction on coal importing and a little bit slower iron ore trade.
Since the beginning of 2019, rates have been dropping again as a result of the global slowdown resulting from the trade war and the worsening sentiment. The recent accident in Vale’s iron ore mine in Brazil added insult to injury and seriously affected the market, which fell strongly and only now appears to be stabilizing at low levels. It is too early to make an assessment of the damage done to the annual coal production and exports from Brazil, and there are expectations that volumes lost due to the Vale incident will be replaced from other sources. Our analysis for 2019 and 2020 shows a roughly balanced supply-demand balance, which would suggest rates staying constant on average, although we expect Q1 2019 to be quite depressed.
The downward drivers are mainly Chinese, but also Indian iron ore and coal imports, which may surprise, however, either way in the remaining of the year. Whilst longer-term iron ore trading volume growth is at risk due to the lack of further mining production investments in both Australia and Brazil, the two major producers, the volumes expected to be shipped in 2019 and 2020 are quite strong. Coal imports, despite the longer-term concerns due to the overall desire to reduce coal use, have been surprisingly strong in 2018 and are expected to further grow in 2019 and 2020 as electricity demand growth remains robust. In a more general aspect, global GDP growth will affect our markets. Current expectations call for just a slight drop in global growth, which, if it materializes, will result in the market recovering in Q2 2019, and the latter part of the year.
A prerequisite of this trend reversal requires that the U.S. keeps interest rates from rising further, the China stabilization program works. Some agreement is reached between the two of them over trade. All these are highly likely to happen. Environmental regulations coming into effect as of 2020 are the wild card, which may or may not create a tighter market and which are adding uncertainty into the future. I will not dwell on the pros and cons of putting scrubbers on vessels here, as this matter has been exhaustively discussed within the industry. Suffice it to say that together with 95% and more of the vessel owners, we will not install scrubbers on our vessels, and we will burn fully compliant fuels, thus also helping to protect the environment beyond any doubt. Please turn to slide 12.
The left side of the slide shows the evolution on one year time charter of Panamax dry bulk vessels since 2001. While dry bulk vessel rates bounced back from the all-time lows in 2016, we were still below historical levels, even subtracting the two super cycle years. The right-hand side of this slide shows the vessel values in relation to historical prices. Dry bulk prices nearly doubled over all-time low values that were established at the beginning of 2016. Yet they are also still lower than historical average, even subtracting the two super cycle peak years. We believe that secondhand vessel values are still low compared to historical averages and also depreciated new build values, and expect to see an increase once the effects of the current global uncertainty due to trade wars and the disruptions due to IMO 2020 start settling.
If the current weak sentiment continues for a bit, it could create opportunities to further grow the company by buying more sea vessels. Notwithstanding the above, we also continue to explore possibilities of growing our listed company further through mergers or otherwise, if a partner providing mutually agreed synergies can be found. I will now pass the floor over to our CFO, Anastasios Aslidis, to go over our financial highlights in more detail.
Thank you very much, Aristides. Good morning from me, ladies and gentlemen. I will now take you over our financial highlights for the fourth quarter and full year of 2018 and compare to the carve-out results of 2017 for our EuroDry fleet. Let's look first at the fourth quarter numbers on slide 14. For the fourth quarter of this year, we reported total net revenues of $7 million, representing a 21% increase over total net revenues of $5.8 million during the fourth quarter of 2017, and that was the result of the increased number of vessels and the increased average time charter rates that our vessels earned during the period.
We reported net income for the period of $4.8 million and net income attributable to common shareholders of $0.6 million as compared to net income and net income attributable to common shareholders of $1.3 million for the same period of last year. The difference between net income and net income attributable to common shareholders accounts for the dividend that we paid to our Series B preferred shares for the fourth quarter of this year. This preferred dividend was paid in kind by issuing conditional Series B preferred shares. This is the last period that we pay the preferred dividend in kind. Starting in February 2019, we will be paying this dividend in cash. Adjusted EBITDA for the fourth quarter of 2018 was $3.5 million compared to $2.9 million achieved during the fourth quarter of last year, an increase of 22%.
Excluding the effect from earnings attributable to common shareholders for the quarter of the gain or loss in derivatives, the adjusted net earnings attributable to common shareholders for the quarter ended December 31st, 2019, would have been $0.31 per share, basic and diluted, compared to adjusted income per share of $0.55, basic and diluted, for the same quarter of last year. Let's now look at the right part of the slide and review the figures for the full years 2017 and 2018. For 2018, we reported total net revenues of $24.5 million, representing a 28% increase over total net revenues of $19.2 million during 2017, which again, is the result of the increased number of vessels we operated and the increased rates that our vessels earned.
We reported net income for the period of $1.1 million and net income attributable to common shareholders of $0.6 million as compared to net income and net income attributable to common shareholders of $0.8 million for the period of 2017, for the whole year 2017. As we stated, the difference between the net income and net income attributable to common shareholders is the dividend we paid to our Series B preferred shares. Adjusted EBITDA for the 12 months of 2018 was $9.4 million compared to $7.4 million achieved during last year. Again, an increase of about 27%. Excluding the effect on the earnings attributable to common shareholders of a gain or loss on derivatives, the adjusted net income per share for this year would have been $0.24 compared to $0.36 for 2017.
Let's now turn to slide 15 to review our fleet performance for the full quarter and full year of 2018 in compare to the same period of the previous year. Again, let's start with our fourth quarter numbers. Our utilization rates, as usual, is broken down into commercial and operational, where we had 100% commercial utilization rate for the quarter and 99.6% operational utilization rate compared to 100% commercial and 99.9% operational for 2017. I would like to remind you here that our utilization rate calculation does not include vessels in scheduled dry docks, scheduled repairs, or in lay-up if any such events are reported during the period. During this year, we operated 5.7 vessels as compared to 4.9 vessels during 2017.
If we move further down to this table, at the bottom of it, we can see the cash flow break-even rate per day that we had for the year, which is about $11,634 per vessel per day for 2018, as compared to $7,086 for 2017. Let's now move to the following slide 16, to review our debt profile. In this slide, you can see the loan repayments for the remaining life of our debt as well as the balloon repayments. In 2019, you can see a balloon payment of $4 million, which we expect to be able to refinance as we did in previous balloons for that loan. After that, we have no balloon payments for the remaining of 2019 and 2020, with the next balloon payment being in 2021.
If you look at our loan repayments on a per vessel per day basis, those contribute $2,950 to our daily cash flow break-even level, and you can see that number on the lower line of the table on the right side of the slide. If we make assumptions for the remaining items that make up our cash flow break-even rate, like operating expenses, general administrative expenses, interest, dry dock, et cetera, we see that our overall cash flow break-even for the next 12 months is estimated to be just below $12,000 per vessel per day. Let's now move to slide 17, where I give you some highlights from our balances. This is a simplified version of our balances, where we show the main groupings of our assets and our liabilities.
On the asset side, we have cash and other liquidity of about $10.3 million, plus restricted cash of $3.4 million. We also have other assets of $3.3 million, and our main assets, the value of our vessels, accounts for about $111 million as of the end of last year. As of the end of last year, the market value for our fleet is very close to our book value of the vessels. The total assets amount to about $127.7 million. On the liability side, we have bank debt of about $64 million, which approximately accounts for 50% of our assets. We have a preferred equity of $19.6 million, which approximately accounts for 15% of our total assets, and other liabilities of $2 million.
That leaves our net book value around $42 million or $18.5 per share, which, as I mentioned earlier, is approximately the same as our net asset value per share. If we look at our closing share price last Friday of $7.89 per share, that represents a significant discount to the value of the company, and should that gap narrows, that would represent a significant appreciation for our shareholders. With that, let me pass the floor back to our CEO.
Thank you, Tasos. Let me open up the floor for any questions you may have.
Thank you, participants. As a reminder, if you wish to ask a question, it is star one on your telephone keypad. Again, star one to ask a question. The first question is from the line of James Jang. Please go ahead. Your line is now open.
Hey, good afternoon, guys.
Hi, James.
Hi, James.
The rates have been a little weak, to say the least, for the first quarter. With the Pantelis being fixed at $5,500, what should we be looking at once that comes off charter at the end of the quarter? Would that be refixed? Is there an option for the charterer to extend that contract?
The market currently seems to have stabilized a little bit and rising. Of course, still, we could expect a low number, maybe around $6,000 a day. We've got a few days till the vessel opens up again, so let's see how the market develops.
Like for the Pantelis, would you be more comfortable operating on the spot, or would you look to fix it short-term?
The biggest we would do would be one voyage, let's say, from where we are to South America and back, which would be 90 days. We would not fix this elder ship on period because they trade better when they do direct voyages. It would be, again, a fixer of between 20-25 days to 90 days. A longer period fixer would probably be at even higher rate than the $6,000, maybe $7 or something like that today. Things move a lot these days, so let's see how the market develops till the time it opens up.
Okay. For the Alexandros, it's in the Guardian pool, right? How long is it going to still be in the pool for the rest of the year?
Most probably it will. We can take it out after a few more months, but we are generally satisfied with the performance of the pool. We are making a little bit more than the index on the vessel. I think we will probably leave it there.
Okay. What are your thoughts on the macro side for coal this year? Do you think demand will stay elevated, or do you think it'll be flat year-over-year?
I think that coal has surprised on the upside more times than less during the last three, four years. Again, the basic expectation that most analysts hold is that it will be flat. I think it's possible that it can be a little bit higher than that. Coal is still needed and will be needed to provide electricity for quite some time now. We don't see peak coal having been reached.
Okay. All right, great. Thanks a lot. I'll drop off now.
Thanks, James. Thank you.
Participants, as a final reminder, if you wish to ask a question, please press star one on your telephone keypad. We have no questions at this time. Speaker, please continue.
Well, thank you for listening in to our end-of-year results conference call. We'll host another one in three months' time to see how things have developed since, yes.
Thank you very much.
Thank you. That does conclude the conference for today. Thank you all for participating, and you may now disconnect.