Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers conference call to discuss the fourth quarter 2020 financial results. Today, we have with us from Safe Bulkers, Chairman and Chief Executive Officer, Mr. Polys Hajioannou, President, Dr. Loukas Barmparis, and Chief Financial Officer, Mr. Konstantinos Adamopoulos. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. Following this conference call, if you need any further information on the conference call or on the presentation, please contact Capital Link at 212-661-7566. I must advise you that this conference is being recorded today.
Before we begin, please note that this presentation contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended, concerning future events, the company's growth, strategy, and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters. Words such as expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimations which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the company.
Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the demand for dry bulk vessels, competitive factors in the market in which the company operates, risks associated with operations outside the United States, and other factors listed from time to time in the company's filings with the Securities and Exchange Commission. The company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with respect thereto, or any change in events, conditions, or circumstances on which any statement is based. Now I pass the floor to Dr. Barmparis. Please go ahead, sir.
Good morning. I am Loukas Barmparis, President of Safe Bulkers. Welcome to our conference call and webcast to discuss your financial results for the fourth quarter of 2020. Starting our presentation on slide three, I would like to express our gratitude to all our seafarers, hoping that within 2021, we will reach a point that all efforts of the global community to produce treatments and vaccines will conclude and the pandemic will be controlled. To that end, Safe Bulkers has become a signatory of the Neptune Declaration. We have joined this global coalition signed by more than 600 companies and organizations in the shipping industry to share initiatives and actions combating the crew change crisis and repatriation of our seafarers. We are committed to the safety and well-being of our seafarers while ensuring a stronger maritime supply chain and the uninterrupted flow of commerce around the world.
As a general comment for 2020, despite the negative effect of COVID-19, the company is maintaining a strong liquidity position that provides us with flexibility and is following a plan, which in the first place is based on our high-quality Japanese fleet, 32 out of 42 vessels, with built-in advantage of environmental footprint compared to the global dry bulk fleet. Further, is aiming to upgrade and gradually renew our fleet with a view of forthcoming environmental changes and sensibly deleverage our balances, targeting to create value for our shareholders and be the leading quality dry bulk company. Management alignment with shareholding and performance and trust built over the years are of the paramount importance in the success of this plan. Moving on to slide five and the industry section, let us analyze the market conditions.
Recent COVID vaccine announcements brought optimism in the global trade market together with the underlying demand. The graphs present the development of the charter rates for Capes and Kamsarmaxes as published by Baltic Exchange. Both Capes and Panamax have recovered after the low first half of 2020, which was mainly due to the COVID-19 outbreak. For Kamsarmaxes, the market is trading above $10,000 since June 2020, and more impressively, is presently trading in the region of $17,000 or more, which is exceptionally strong given the seasonality low market occurring the first quarter of each year. Similarly, for Capes, the market peaked three times after June 2020, with the most recent in January 2021, when it reached $25,000 per day. Presently, the market is lower and is trading at about $11,000 for Capes.
However, the current FFAs sets the market levels closer to $20,000 for the remaining of the year. The resumption of economic activity and the healthy volumes of iron ore, coal, grain are the major drivers of this surge on rates. COVID-19 is still a concern, although acceleration of vaccination will likely control this pandemic. Heading to slide number six, we present certain aspects of Chinese activity which are indicators of the charter market conditions. The iron ore imports of China have been the driving force of the Cape market, and during the course of 2020, were up 9.3% year-on-year, despite finishing lower towards the end of the year. Regarding the thermal coal imports, as shown in the mid graph, we saw a big surge of imports during the end of year, with an overall increase of 1.4% for the whole calendar year of 2020.
The high demand for thermal coal, especially towards the winter months, has been reflected in the Panamax and Kamsarmax charter market. It is important to analyze the drivers of this big surge in demand for the thermal coal. As presented at the bottom graph, we see that the power generation in mainland China in December 2020 jumped by 13.4% month-on-month and by 11.2% year-on-year. Most importantly, the total China power generation was up 4% year-on-year, reflecting the overall economic development. The demand for Panamax and Kamsarmax is expected to remain firm as we are entering towards the grain season of exports ex East Coast, South America. The grain harvest of this year is expected to be remarkably high, and hence, the demand for Panamax and Kamsarmax vessels is also expected to be high.
Having analyzed a few important drivers of the demand, let's turn now to slide seven where we present the Panamax order book as a percentage of existing fleet for the last 25 years. Presently, the order book for both Capes and Panamax is the lowest since 2002, in combination with the 20% of world fleet being over 15 years old of age. Moving on to slide eight, we see that the remainder of 2021, the new orders are about 3% of the existing fleet of Capes and 3.7% for the Panamax and Kamsarmaxes. After 2021, the orders remain minimal. Taking into account the aging of the fleet, it is highly possible that scrapping activity will increase. It is also important to note that the shipyards' capacity is presently covered with orders from other sectors such as container ships and tankers.
On top of that, the ongoing environmental discussions for emissions and decarbonization certainly do not encourage new orders. Turning to slide nine, we present the latest developments on the fuel markets. During 2020, due to the pandemic and the worldwide lockdowns, the demand for distilled products dropped dramatically. Towards the end of 2020 and year to date, there has been gradual reopening of the economies, which in turn has stimulated the demand for oil and distilled products, leading to higher prices. The futures market of bunkers indicate a sustainable spread differential between the IMO 2020 compliant fuel, the Very Low Sulfur Fuel Oil, and the 3.5% High Sulfur Fuel Oil, the so-called Hi-5.
As shown in the graph, according to ICE Report Center, the spot price for the Hi-5 is in the region of $130 per metric ton, which for the remaining of calendar 2021, 2022, and 2023 is trading above $120. This spread differential of about $120 per metric ton for a Post-Panamax vessel, which on average burns about 7,500 metric tons per year if scrubber fitted could be translated to a good gain of about $900,000 per year or about $2,500 per day. Let me remind you that our company invests in scrubbers and has already retrofitted scrubbers to half of our fleet. The recovery of global economies, the restoration of mobility, and the recovery of Brent Crude oil prices may push this Hi-5 differential to pre-COVID-19 levels. Let me summarize certain key market takeaways in slide 10.
We have experienced an exceptionally strong start of 2021 with healthy volumes of iron ore, coal, and grain trade as the recent COVID vaccine news brought optimism in global markets despite the trade tensions between China and Australia. The global lockdown has adversely affected demand for oil and distilled fuels. We may have a slow oil demand rebound as global lockdowns ease with restoration of mobility, which will eventually may lead to the recovery of Brent prices and to even wider Hi-5 spread differentials. We have the lowest order book since 2002 as the ongoing decarbonization discussions do not favor new orders. The aging of fleet and the increased environmental restrictions for emissions may enhance the scrapping activity. Lastly, only a few shipbuilders have developed new environmental efficient vessels. In slide 11, we present our fleet growth over the last years.
In the context of our fleet renewal strategy, we have entered into agreements to acquire two Japanese-built Post-Panamax ships, which are designed to comply with the Energy Efficiency Design Index Phase 3 and the Tier III in relation to NOx emissions with scheduled delivery dates first half of our 2022 and third quarter of 2022. Presently, only a few shipyards have developed these new environmental efficient designs. At the same time, we have agreed to sell two of our older vessels, 2003 and 2004 build, replacing the one immediately with a 2011 build Japanese Panamax at a modest price differential. It is important to note that our growth is gradual. The company had never entered into several orders that have distorted the supply side.
At the same time, the company has kept a rate of growth even at loss-making markets and has invested always in the forefront of the technologies ahead of the competition. Turning to slide 12, I would like to focus on our fleet mix and point out that 75% of our fleet is Japanese versus 46% of the world fleet, providing us with a lower environmental footprint overall, lean operations, and cost building advantage. As seen in slide 13, currently, only a small number of vessels compared to world dry bulk fleet is built with EEDI index. We believe that we can identify less efficient vessels on those that are not built in Japan and on older designs before 2010. We expect that such vessels will face increased restrictions and additional costs or carbon emission taxes, making them less attractive the following years.
As presented in slide 14, Safe Bulkers, in the context of its environmental social responsibility policies, has invested ahead of competition and undertake significant environmental investments in new technologies and modern design and energy-efficient vessels to an aggregate amount of $67.2 million as of December 31st, 2020. We have already retrofitted all 20 of our scheduled scrubber installations with an additional scrubber order placed in 2021, and 10 of our vessels are already equipped with ballast water treatment systems. At the same time, according our fleet renewal strategy, we have placed two orders for greenhouse gas EEDI Phase III newbuilds for 2022. Let's move to slide 15, where we have plotted the BDI index as a market performance indicator in our chart price. The correlation historic has been very strong.
In 2019, the correlation of decoupling due to trade war, and during 2020, we have seen further decoupling due to COVID pandemic. At present, we believe that our stock is trading at levels relatively lower than the charter market performance. Now let's summarize our key points for Safe Bulkers. We are a pure dry bulk player. With our 20 vessels, we have a history of 60 years+ of uninterrupted presence in the dry bulk market. Our management team has more than 30 years of experience and continuous presence in the dry bulk industry. We are here for the long run. We preserve our liquidity, which provides financial flexibility, security in turbulence, and opportunistic asset acquisitions. Our spot market exposure allows expansion of profits in bull charter market conditions.
We have locked a good 38% of 2021 fleet days chartered under period time charters, 68% of which are index-linked, enjoying the improving charter market conditions. About 75% of our fleet is Japanese build, providing us with lower environmental footprint, lean operation, and cost building advantage from scrubber-fitted vessels based on increased fuel spread differential. We have actively centered the environmental preservation in the heart of our competitive strategy by investing more than $65 million in 2019 and 2020 that are fitting 50% of our fleet with exhaust cleaning devices, the scrubbers, which provide us with extra income capability in rising oil price environment. Management team has skin in the game that offers full alignment with shareholders. We have demonstrated our two-fold fleet renewal strategy.
On the one hand, looking towards 2030 with ordering greenhouse gas EEDI Phase III NOx Tier III Japanese newbuilds, and on the other hand, capturing the present market by opportunistic secondhand acquisitions, replacing older vessels at a modest price differential. At the same time, we continue with the gradual de-levering of the company. I will pass the floor to our CFO, Konstantinos Adamopoulos, for the analysis of our financial results.
Thank you, Loukas, and good morning to all. Let me start with our chartering performance in slide 18, where we present our quarterly Time Charter Equivalent rate, which stood at $12,319, versus our quarterly OpEx for the same period, which stood at $3,978. Moving on to slide 19, we present our quarterly daily OpEx versus our quarterly daily G&A, which stood at $1,469. The aggregate figure for both OpEx and G&A for the last quarter of 2020 was $5,447, demonstrating our focus on lean operations.
We believe that this number for both OpEx and G&A when comparing apple to apple is one of the industry's lower, if not the lowest, given the fact that we included in this figure all our dry docking and period labor expenses. Also in our G&A, our management fees and directors and officers' compensation, and all expenses related to the administration of our company as a public entity. Moving on to our debt profile, as seen in slide 20, we present our repayment schedule as of the end of the year of 2020. Our liquidity at the end of the year stood at $171.2 million, consisting of cash and bank time deposits, restricted cash, contracted and drawn borrowing capacity under a revolving credit facility and secured commitments, including sale and lease-back financing. In slide 21, focusing on our liquidity versus our CapEx commitments.
As of February 12, we had liquidity of $184.3 million, which included cash and cash equivalents, time deposits, restricted cash, funds available under the sale and lease-back agreements, new term loan agreement, and the revolving credit facility. Our aggregate remaining CapEx for the acquisition of the two newbuilds, as well as of the secondhand vessel, were $64 million, of which $12.6 million is due in 2021, and the remaining $51.4 million in 2022. In slide 22, we present our debt amortization schedule versus the scrap value of our fleet. We have a smooth debt repayment profile for the next two years, gradually de-leveraging our company. Let's now move to slide 23 with our quarterly financial highlights for the fourth quarter of 2020 compared to the same period of 2019.
As a general note, during the fourth quarter of 2020, we operated in a relatively weaker charter market environment with lower operating and interest expenses compared to the same period in 2019. While our revenues were partly supported by the additional earnings from scrubber-fitted vessels, the operation of one additional vessel, which we took delivery back in April of 2020, and also from the reduced bunker expenses. The net effect is reflected in our reduced TCE of $12,319 for the fourth quarter of 2020 compared to $13,770 during the same period in 2019. Net revenues decreased by 2% from $53.2 million- $52.2 million, mainly due to the reduced TCE because of weaker market, partially offset by the additional revenues earned by our scrubber-fitted vessels and the additional vessel delivered in 2020. Daily vessel running expenses decreased by 22% to $3,978 compared to $5,103 for the same period in 2019.
This decrease is associated with reduced dry dockings and provision of technical services and increased crew repatriation expenses due to the COVID pandemic. Daily running expenses, excluding dry docking and delivery expenses, also decreased by 13% to $3,955 for the fourth quarter of 2020 compared to $4,540 for the same period in 2019. Our adjusted EBITDA for the fourth quarter of 2020 increased to $26.3 million compared to $23.1 million for the same period in 2019. Our adjusted earnings per share for the fourth quarter of 2020 was $0.04, calculated on a weighted average of 100.2 million shares, compared to $0.01 in 2019, calculated on a weighted average number of 102.6 million shares. On the table of slide 24, we provide an estimation of the expected downtime in Q1 2021 in order to assist analysts with their projections.
Closing our presentation in slide 25, we present our quarterly fleet data and average daily indicators compared to the same period last year. We would like to emphasize that in this period we have worked extensively despite the tough market conditions, and we have concluded the order of two Japanese modern design and technologically advanced newbuilds with delivery in the first half and third quarter of 2020. We immediately tapped on our liquidity by agreeing 90% financing through sale and lease-back agreement for one and by committing term loan facility for the other one. We have sold two of our oldest vessels, built 2003 and 2004 at attractive prices, and immediately agreed the acquisition of 2011 Japanese-built vessel, sister ship to two of our vessels, with limited impact on our liquidity.
We have a strong balance sheet with comfortable leverage, a smooth debt profile for this and the next year, and a liquidity position of $184.3 million as of February 12. Finally, we took measures to protect our seafarers and shore employees health and well-being and kept all of our vessels sailing continuously, servicing our charters. Once again, we would like to thank our seafarers for their commitment and dedication throughout this tough period and drive the industry's attention to efforts relieving and preserving the well-being of our seamen. Our press release presents in more detail our financial and operational results, and we are now open to take your questions.
Thank you very much. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. Our first question today is from Randy Giveans. Please go ahead.
How are you, gentlemen? How's it going?
It's fine.
Great. I guess a few questions. Looking at first, the agreement for the acquisition of the 2011 built, the Panamax there. What are the thoughts behind that in terms of the ages? Also comparing that with the recent announcement for the two new builds, of additional vessels on the water. Comparing and contrasting a 10-year-old vessel and new builds.
Yeah. The 10-year vessel was done at the time when we sold two of the older ships of the company, the 2003 and the 2004 vessel. At a small premium, we managed to buy an 2011 built vessel before prices start rising, in which case with a small increase, we renew the age factor by eight years. The new builds are more long-term investment in new regulations and the new energy efficiency environment that will be delivered in the middle of second and third quarter of 2022, which was done ahead of the game in order to have good delivery periods, because right now deliveries are fully booked until 2023. The fleet renewal is a twofold fleet renewal. It's partly selling older ships and replacing them with younger ones and partly replacing them with brand new technology vessels.
Got it. Okay. I guess also looking at the repurchasing of the Series A. What kind of thought process around that and the savings with that? Would you look to maybe start a dividend or what is your thoughts around that incremental capital that's not being paid out now on the Series A?
That was a financing for the new build Pedhoulas Cherry, which was done a few years ago. We thought it was the time to redeem it, and in its place, we have refinanced the vessel through a sale and leaseback transaction, increasing also our liquidity. Yeah. As a result, according to our strategy to increase our liquidity and be more flexible in the market, now, having this strategy, we have substantial liquidity that provides us flexibility for other acquisitions, for future orders, for whatever. This is the thought process for redeeming the preferred A stock that was issued by one of our subsidiaries.
Got it. Then in terms of maybe a potential dividend at some point, are we still maybe too early in the up cycle?
Yes. In case of a potential dividend, there are two real truths. First of all, the management has about 50% of the company.
Yep.
The basic target of the family is to create a value for shareholders and to be able to restore the dividend. The second point is that we have come out of several years of bad markets, and even the last year, it is profitable at the end, but it was overall not profitable. We need to see, let's say, the development of the market and to be able to, let's say, more sustainable good markets in order to consider additional dividend, which always is at the end of the day, the target of each one that invests in any company, including our management. The fourth quarter of 2020 was the first profitable quarter after a very bad first half of 2020 and the breakeven quarter in Q3. The company shows that both its profits and its stock price is bouncing back after freight rates reversed.
We are adjusting very fast to the new environment and turning the losses of COVID-19 into profits. If things develop like we expect in 2021, we will have more profitable quarters, and then it will be more likely to consider how we distribute our funds.
Yeah, that completely makes sense. We're expecting many more profitable quarters, so we can have some patience on the dividend. Thanks so much.
Thank you. Thank you.
As a reminder, it's star one if you wish to ask a question. The next is from Ben Nolan from Stifel. Please go ahead.
Hi. This is Frank Galanti for Ben. For my first question, I just wanted to ask, given, I guess the two sales and a buyback or basically the fleet transactions and then the ordering of the new vessels, how much dry powder do you think you have in order to grow the fleet without tapping the ATM?
There is some dry powder and there is more to be created by possibly selling, later in 2021, a couple of more of the older ships, replacing them with younger tonnage. The most important is to see to how much the profits of Q4 will be developed now that the market is developing in a nice way, as freight rates start increasing meaningfully for the first two months of this year. We believe that our profits will strengthen. We have to bear in mind that also the company wants to do de-leveraging because it is a long-term sustainable profits and dividends for the shareholders and not into making a two or three quarters of dividends, and then to stop them when the market changes. We want to, at the same time, de-leverage.
One of the ways is to de-leverage is through, as the market increases, selling the older ships and replacing them with the newer ones that will be debt-free. The plan right now for the new acquisition is to remain debt-free. That doesn't contribute to the earnings as much as the two older ships were contributing at the same time. It will be a combination of factors that will decide things. We are very optimistic as things stand at the moment because the drybulk market is getting out of a very bad situation. We have the depression of 2015, 2016. We have the trade war in 2018, when the market start improving. In 2020, we had COVID-19. It's three major events in the last six years.
Right now, we are happy that, as I said in the past, that there's no bad thing without a good thing coming. All this crisis resulted into very little ordering of new ships. We have one of the lowest order books of the last 20 years. This, I believe, is a key point that will drive the profits higher and will drive the drybulk market to very, very profitable levels. The order book is below 6%, and we haven't seen this order book for ages. You have to remember in the previous commodity booming of 2013 and 2014, we had order books of 50% or 45%-50%. At that point, we couldn't carry on with the sustainable market.
Right now, I think that the part that everyone is missing is that this recovery, if it develops the way, and of course nobody knows, but if it develops the way we are thinking and most of the people are thinking it will develop along with the commodity boom, it will coincide with two or three years of low order book. Which coupled with the aging of the fleet and the decarbonization and the requirement for some of the ships to slow down in order to meet the greenhouse gases restrictions, I believe that this will give a major boost to the vessels that are well prepared for that phase of the market.
If I may add on that, if you consider the slide 2021, where we show our liquidity, which about $184 million against our capital expenditure requirements, about $60 million. I think at one point to say that looking in the future, in the present market environment, we can say that for each $1,000 that the Time Charter Equivalent increases, the profit of the company will be about $15 million. The liquidity, we foresee that the liquidity will increase in the following, let's say, quarters from the markets, which is very important and very wanted.
Okay, great. That's really helpful. I guess I wanted to ask about the Lake Despina Capesize that had the contract terminated early. Can you give a bit more context on why that transaction was completed, and if you'd be interested in doing the same for other vessels?
Look, the Lake Despina made a wash out agreement with the charterer of the vessel on their request. They asked to pay the differential between the market at the time and what was the charter rate for the ship. The ship had around three years remaining on share charter of $24,800 a day. We made the calculation, it came out to $8 million compensation. We received already this money. The ship has redelivered. We decided that we should keep this ship because it's a premium ship in the spot market and fix it on index link, like we have done a big part of our period vessels. We have done this one at 19% above the Baltic Capesize Index. We believe the Baltic Capesize Index will start performing a lot better. Of course, in January it was almost 30,000, the Baltic Capesize Index.
Right now in the Chinese New Year, it dropped back. I think that in the next couple of months, we will see Baltic Capesize Index above $20,000. I think that it's a good call from the company because if the spot market on the Baltic Capesize Index goes back to $20,000, which is not a big event these days, the company will be receiving the money it was receiving on the original charter. We have this flexibility. We took a decision in the last quarter of last year, any period business we were fixing to keep it index-linked because we believed in the market, and we wanted to enjoy the upside as soon as it would happen. We have around seven Panamax vessels and two Capes in index link.
Even if ships beat all three or all four now, they're enjoying rates of $17,000, $18,000 a day on their period charters. I think that was a good opportunity for us to wash out this charter, and also it was good for our charters, which were first class. They performed brilliantly for seven years, and they paid due compensation. On the other contracts we have, we never had a hint that the respective charters want to make anything like this. The one ship that has a long-term period remaining of another 10 years or + 11 years, the charter make an investment on the ship of environmental investment and adding scrubber and things like that. Their intention is to maintain the ship and perform as per charter party. They are a big company, conglomerate.
We never had a problem in the first 10 years of the charter. We don't expect any more contracts to be treated that way. At the same time, we are very happy with the standard of our counterparties because when we fix ships, we think that this is the most important element in our long experience is to with whom we fix and not only the rate, but with the reputation of the charter and the securities and the guarantees we get for those long-term charters. It's looking good at the moment, but we have to wait and see how the market develops. Right now, we are seeing in the middle of Chinese New Year, ships earning $35,000 a day in the Atlantic or $18,000 in the Pacific.
It's really looking good because last time I remember this sort of market in the first quarter was 2011. I think something similar is happening at the moment.
Okay, great. Thanks very much.
Thank you.
Ladies and gentlemen, as a reminder, it is star one if you have any questions. Okay, there are no further questions coming through. I will now hand back to management for closing remarks. Thank you.
Thank you very much for attending this presentation and our quarter results. We are looking forward to discussing during about three months for our first quarter results. Thank you to all, and have a nice day.
Thank you very much, sir. Ladies and gentlemen, that does conclude the call. Thank you everyone for joining. You may now disconnect.