Thank you for joining us on Navios Maritime Partners' Third Quarter 2020 earnings conference call. With us today from the company are Chairman and CEO, Ms. Angeliki Frangou, Chief Financial Officer, Mr. Stratos Desypris, and Executive Vice President of Business Development, Mr. George Achniotis. As a reminder, this conference call is being webcast. To access the webcast, please go to the investor section of Navios Partners website at www.navios-np.com. You'll see the webcast link in the middle of the page, and a copy of the presentation referenced in today's earnings conference call will also be found there. Now, I will review the safe harbor statement. This conference call could contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios Partners. Forward-looking statements are statements that are not historical facts.
Such forward-looking statements are based upon the current beliefs and expectations of Navios Partners' management and are subject to risks and uncertainties which could cause actual results to differ materially from the forward-looking statements. Such risks are fully discussed in Navios Partners' filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks. Navios Partners does not assume any obligation to update the information contained in this conference call. The agenda for today's call is as follows. First, Ms. Frangou will offer opening remarks. Mr. Desypris will give an overview on Navios Partners' financial results. Mr. Achniotis will provide an operational update and an industry overview. Lastly, we'll open the call to take questions. Now, I turn the call over to Navios Partners Chairman and CEO, Mrs. Angeliki Frangou. Angeliki?
Thank you, Doris. Good morning to all of you joining us on today's call. Given the difficulties associated with the pandemic, I am pleased with the results for the third quarter of 2020. During the third quarter, Navios Partners reported revenue of $64.5 million and adjusted EBITDA of $30.9 million. Although dry bulk demand in the first half of 2020 was hurt by the global shutdowns, fiscal stimulus and other policy measures helped global economies rebound in Q3 and continue to rebound in Q4. We believe that this improvement is attributable to the exit from quarantines, food security consideration, and new purchasing patterns in the pandemic economy. Consequently, we are optimistic about the expected growth in demand throughout Q4 in 2021. As you can see from slide five, NMM's fleet is currently 55 vessels. NMM holds a 35.7% interest in Navios Maritime Containers.
On slide six, you can see why Navios Partners is a premium dry bulk shipping platform. We maintain a strong balance sheet with low leverage. Our net debt to capitalization is 39.2%. We have staggered debt maturities and not committed growth CapEx requirements. We also have about $465 million in remaining contracted revenue and a low break-even of $5,365 per open day for Q4 2020. Slide seven details the pandemic impact on global trade. Obviously, GDP for the first half of 2020 was weak given the global shutdown. However, the economic outlook for 2021 is favorable. The IMF expects global GDP to grow by 5.2%, led mainly by China and an expected GDP growth of 8.2% next year. As a result of the disruption to economic activity during the first half of 2020, dry bulk trade is expected to contract by 2.7% in 2020.
However, as economies continue to recover, dry bulk trade is projected to increase by 3.9% in 2021. Slide eight shows our recent developments during the third quarter of 2020. For Q3, we generated $30.9 million in adjusted EBITDA and then $8.8 million in adjusted net income. As to our fleet update, we continue to renew our fleet and improve its age profile. We acquired two dry bulk vessels with an average age of six years for $51 million. We also agreed to sell two of our older vessels with an average age of 12 years for about $13 million. The acquisition of the two dry bulk vessels was partially financed with a $33 million loan from a commercial bank. The terms of the loan include a maturity in Q3 of 2025, amortization profile of 9.7 years, and an interest rate of 3.25 above LIBOR.
Our operating break-even for the fourth quarter of 2020 remains low. About 70% of our available days are fixed at about $14,000 net / day, and the remaining 30% of our open and index-linked days provide us with a low break-even of $5,365 per open and index day, excluding distributions and CapEx. Slide nine further details our Q4 operating breakeven. 69.6% of our available days are fixed at an average rate of $14,170 net / day. Our 1,481 open plus index-linked days provide us with flexibility and cash flow potential with a low breakeven estimated at $5,365 / day. Assuming one year time charter rate, we should be able to generate about $11.7 million in free cash flow for the fourth quarter of 2020. Slide 10 shows our liquidity. As of September 30th, 2020, we have a total cash of $30.6 million and total borrowings of $505.7 million.
Our net debt to book capitalization is 39.2%, and we have staggered majorities and no committed growth CapEx. At this point, I would like to turn the call over to Mr. Stratos Desypris, Navios Partners CFO, who will take you through the results for the third quarter of 2020. Stratos?
Thank you, Angeliki, and good morning, all. I will briefly review our unaudited financial results for the third quarter and nine months ended September 30, 2020. The financial information is included in the press release and is summarized in the slide presentation available on the company's website. Before I start discussing our financial highlights, I would like to draw your attention to certain one-off items that are listed in slide 11. For simplicity, the discussion of the financial results below exclude the effect of one-off items listed in these slides. Moving to the financial results as shown in slide 11, our revenue for the third quarter of 2020 increased by $1 million to $64.5 million compared to $63.5 million for Q3 of 2019. The increase was mainly due to the 39% increase in available days in 2020.
The increase was mitigated by 27% decrease in the time charter equivalent rate achieved in the third quarter of 2020. Adjusted EBITDA for the third quarter of 2020 was $30.9 million compared to $41.3 million in the third quarter of 2019. Compared to the second quarter of 2020, adjusted EBITDA increased by 116%, reflecting the significantly improved rate environment. Adjusted net income for the quarter amounted to $8.8 million. Operating surplus for the third quarter of 2020 amounted to $16 million, and replacement and maintenance CapEx reserve was $9.5 million. Fleet utilization for the third quarter of 2020 was over 99%. Moving to the nine-month operations, time charter revenue for the nine months of 2020 decreased by $0.6 million to $157.5 million compared to $158.1 million in 2019. The decrease was mainly due to the 22% decrease in the time charter equivalent achieved in the nine months of 2020.
This decrease was partially mitigated by the 30% increase in our available days. Adjusted EBITDA for the nine months of 2020 amounted to $64.3 million compared to $86.3 million in the same period of last year, mainly due to the $0.6 million decrease in revenues discussed above, an $18.6 million increase in vessel operating expenses due to our increased fleet, a $1 million decrease in equity in net earnings of affiliated companies, and a $1 million increase in net on other expenses. Adjusted net loss for the nine months of 2020 amounted to $2.9 million. Operating surplus for the nine months ended September 30, 2020, was $19.3 million. Turning to slide 12, I will briefly discuss some key balance data as of September 30, 2020. Cash and cash equivalents was $30.6 million. Long-term borrowings, including the current portion net of deferred fees, amounted to $505.7 million.
Our cost of debt has been significantly reduced as a result of the refinancing of the term loan due last year, as well as the decrease in LIBOR rates. This resulted in a reduction of interest expense and finance costs for the first nine months of 2020 by approximately $16.6 million compared to the same period of 2019. Net debt to book capitalization was 39.2% at the end of the quarter. Moving to slide 13, we declared a cash distribution for the third quarter of 2020 of $0.05 per unit, equivalent to $0.20 per unit on an annual basis. Our current annual distribution provides for an yield of 4.3% based on yesterday's closing price. Record date is November 9, and the payment date is November 13, 2020. Total cash distributions for the quarter amounted to $1.6 million. Slide 14 shows the details of our fleet.
We have a large modern vessel fleet with a total capacity of 5.5 million deadweight tons and an average age of 11 years. Our fleet consists of 55 vessels, 15 Cape sizes, 24 Panamax, six Ultra-Handymax, and 10 containerships. In slide 15, you can see the list of our fleet with the contracted rates and the respective expiration dates per vessel. Currently, we have contracted 98.7% of our available days for 2020 and 45.5% for 2021, including days contracted at index-linked charters. The expiration dates extend to 2028. In slide 16, you can see the details of Navios Containers. Currently, it controls 29 containerships. Navios Partners has a 35.7% ownership interest in Navios Containers. I now pass the call to George Achniotis, Executive Vice President of Business Development, to discuss the industry section. George?
Thank you, Stratos. Please turn to slide 18. Q3 saw a jump in the BDI with the quarterly average settling close to double Q2 at 1,522. The quarter started with a nine-month high of the BDI in July before softening in August. However, seasonality returned as the BDI reached a year-to-date high on October 6th at 2,097, led by Atlantic iron ore and grain exports primarily to China, before correcting over the last few weeks. However, the Chinese economy, which accounts for approximately 40% of global dry bulk trade, continued positive growth on the back of government stimulus, particularly aimed at infrastructure spending. China, according to the IMF, will be the only major economy to grow this year at 1.9%, with further growth of 8.2% expected in 2021.
With the entire globe continuing to be affected by the pandemic, the IMF projected global GDP contraction of 4.4% for 2020, led by 5.8% contraction in advanced economies. Governments have put in place unprecedented emergency monetary and fiscal plans to support the economies. In light of this, the IMF projects 5.2% global GDP growth in 2021. The 2020 updated forecast for dry bulk trade is a contraction of 2.7% and growth of 3.9% in 2021. Turning to slide 19. The graph on the left shows that for 2021, dry bulk demand for the three major cargoes of iron ore, coal, and grain is forecast to outpace 2020. This increase is led by coal, which is expected to grow by about 4.7% or 55 million tons. If you look at the graph on the right, net fleet growth is forecast to be 3.4% this year and only 1.3% for 2021.
Net fleet growth is expected to remain low over the next few years, as the order book is the lowest on record. Turning to slide 20. Despite the pandemic, Chinese iron ore imports are expected to increase by 7.4% in 2020. Chinese steel mills have reduced their iron ore stockpiles by about 34 million tons between June 2018 and October 2020. China set a monthly record for iron ore imports in July at about 110 million tons, with the second highest imports coming in September at 106 million tons, as steel production continues to set new records. With additional availability of iron ore in Q4, shipments from Brazil and Australia to China are expected to match Q3 levels as steel mills replenish stockpiles, driving demand for Capesize vessels. The Chinese fiscal stimulus and infrastructure spending should support steel production and in turn, dry bulk trade going forward.
Moving to slide 21. The combination of the pandemic and the significant drop in the price of oil and gas has resulted in reduced coal trade. Asian coal imports, which account for over 80% of the world's seaborne trade, are expected to decrease in 2020 by 6.5% but increase by 4.4% in 2021. This reduction has added pressure on the smaller size vessels, which has been partially offset by increased demand for grains discussed on the following slide. Turning to slide 22. Worldwide grain trade has been growing by approximately 5% CAGR since 2008, mainly driven by Asian demand. Overall, Asian grain imports are forecast to increase by 9.4% in 2020 and a further 3.3% in 2021. An ever-increasing world population, food security issues driven by the pandemic, as well as increasing protein demand worldwide, continues to support the global grain trade.
With the pandemic disruptions causing minimal grain trade disruptions, the International Grains Council projects record shipments of wheat, corn, and soybean for the 2020 crop year. Please turn to slide 23. The current order book stands at only 6.3% of the fleet, which is the lowest on record. New building contracting has collapsed and year- to- date is down by about 65% compared to 2019. With the order book being front-loaded this year and scrapping expected to accelerate to phase out the value losses, net fleet growth is expected to remain low at about 3.4% for 2020 and only 1.3% in 2021. Turning to slide 24. Vessels over 20 years of age are about 6.5% of the total fleet, which compares favorably with the previously mentioned low order book.
Scrapping, which started slowly due to a combination of the pandemic lockdown and logistical crew change challenges, now stands at 13.4 million tons year- to- date. This amount is almost 70% higher than the full year 2019 and is about 1.5% of the fleet. In conclusion, positive demand fundamentals, mainly due to the restart of economic activity around the world, along with reduced fleet availability, should provide support to the dry bulk market in its continuing effort to navigate through the pandemic storm. This concludes my presentation. I would now like to turn the call over to Angeliki for her final comments. Angeliki?
Thank you, George. This completes our formal presentation, and we open the call to questions.
At this time if you would like to ask a question. Please press star then the number one on your telephone keypad. Again, its star then the number one to ask a question. Your first question comes from the line of Chris Wetherbee with Citi.
Yeah. Hey, thanks for taking the question, guys. Hope you're well. I guess I wanted to start, George, where you left off on the order book, and maybe to get a better understanding of how we see this playing out. We're at the lowest level that we've seen, I guess, on record for the order book. It's just over 6% of the fleet. It seems that with uncertainty in the world, orders have been extraordinarily difficult to come by. As you go into 2021, how do you see this playing out? What would you expect in terms of fleet growth for the dry bulk fleet in 2021, number one? And then I guess maybe what the replenishment of the order book, if there is any, look like, number two?
Chris, this is Angeliki. I think one of the things that makes us very optimistic on dry bulk is that basically you have the lowest order book of 6.3% with vessels that are over 20, about 6.5%. Basically, you have overall almost one of the lowest order books. The reason that we are optimistic is because we have seen periods where order books are low, but then we start having an increase in orders around the world. The difference today is because of the technological uncertainty, and this is not something like a scrubber where you have this kind of a solution for a lot of the places. I think the technological issues, what will be the engine and what technology, this uncertainty really keeps the order book across shipping very low for some time.
That gives a runway where we see that demand is there because of food security, because of additional stockpiles for infrastructure. You have a condition that we haven't seen for a long time, and the technological uncertainty is something that will remain for some time because basically, shipping is doing it for a solution. It's a long haul and much more different. We don't have yet the solution on the engine or the correct something that will give the propulsion for this kind of movement. I think that this is a very positive issue, and that's why you will not see anyone jumping into shipping.
Okay. If you had to venture a guess, I think we're doing 3%+ in terms of fleet expansion in 2020. You'd expect that number to be lower, is my guess, in 2021?
2021, we expect it to be just over 1%.
Okay. That's helpful. I appreciate that. I guess I wanted to circle back to debt maturities in 2021, I think a little over $130 million. Can you talk a little bit about what the plan is for that and go into a bit more detail on how that is going to be addressed?
Let Stratos but these pictures, three facilities that were below around 50%, and all of them are very low leverage. The larger one is basically to cover the entire refinancing risk with scrap value, which vessels are not scrap, much more very valuable cash flows and everything, but they are very easily financeable contracts .
Just to add to what Angeliki has been saying, the three facilities, as we said, two of them are below 50% , you understand that it's very easily refinanceable. On the third one, you have two elements that you need to take into account. The first one is that the scrap value almost entirely covers the refinancing amount. On the second item that you have to take into account is that this facility includes the five HMM vessels, just the value of these five vessels alone is covering almost 2x the whole debt service of this facility. You understand, we feel very comfortable in refinancing this.
Okay. That's helpful. Thanks very much for the time. I appreciate it.
Thank you.
Your next question comes from the line of Randy Giveans with Jefferies.
Hi, this is Chris Robertson on for Randy. Thanks for taking our call. How are you, Angeliki?
Good morning. How are you doing?
Good. I guess just on our first question on the distribution cut. I guess now that the dry bulk and containership markets have improved, how are you thinking about increasing the distribution going forward? How will you balance that with unit repurchases, as you're trading at a pretty big discount to NAV at the moment?
This was a conservative posture. You have to realize we're in the pandemic economy. As such, we see positive effects, as I said. We have a restricted supply, a strong demand because of food security, because of need of inventory to be ahead. We have to have a conservative posture. As we see, today what we are doing is basically, we have a low breakeven, low leverage. We are ready to get the cash flows that we see that are generated. On dividends is something that when we see more normalized period, when we see visibility is far more clear, then we feel that we give a temporary rest. We have other ways to do. We can increase with buybacks, with other ways. I think on the current conditions, with the uncertainty that is developing, it's good to have a more conservative posture.
Okay. That's fair. I guess following up on that then, so around the decision to purchase the two vessels, in light of the discount to NAV in the unit price at the moment, what drove the decision to buy vessels now instead of maybe repurchasing some units?
We are a shipping company after all, and we have a portfolio of assets, and we need to replenish our fleet and make sure that we have the right assets to generate the cash flows. What we did is basically We bought two vessels that were six years old, a Kamsarmax and a Panamax, Japanese build, high quality, and sold some vessels that were over 12 years old. That is a replacement of assets that does make sense, and it is an ongoing part of our business, buying larger vessels, younger vessels to keep our earning capacity, to grow our earning capacity and keep refresh our portfolio. That is part of an ongoing process.
All right. Yeah, thanks for the clarity. That's it for us. Thank you.
Thank you. I would now like to turn the call back over to Angeliki.
Thank you. This completes our Q3 results.
Thank you. This concludes today's conference call. You may now disconnect.