Ladies and gentlemen, thank you for standing by, and welcome to the Safe Bulkers Conference Call to discuss the Q1 2020 Financial Results. Today we have with us from Safe Bulkers, Chairman and Chief Executive Officer, Mr. Polys Hajioannou . President, Dr. Loukas Barmparis. Chief Financial Officer, Mr. Konstantinos Adamopoulos, and Chief Operating Officer, Mr. Ioannis Foteinos. At this time, all participants 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, you will need to press star one on your telephone keypad and wait for your name to be announced. 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 in Section 21E of the Securities Exchange Act of 1934, as amended concerning future events. The company's growth strategy and measures to implement such strategies, including expected vessel acquisitions and entering into further time charters. Words such as expects, intends, plans, believes, anticipate, 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 estimates, 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 U.S., 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 Konstantinos Adamopoulos. Please go ahead, sir.
Good morning to all. I am Konstantinos Adamopoulos, CFO of Safe Bulkers. Welcome to our conference call, and welcome to discuss the financial results for the Q1 of 2020. I would like to start by thanking our seafarers for their commitment and dedication throughout this harsh period, as collectively, we continue to serve our charters. Moving to slide four. We have been active in all fronts, operational, financial, and commercial, taking measures to ease the impact of COVID-19. In the operational forefront and in relation to our seafarers on board, the company's COVID-19 management plan has been disseminated to the vessels, incorporating measures to protect seafarers and shore employees' health and well-being, and to keep all our vessels sailing, continuously servicing our charters. In our shore operations, we have conducted remotely our business efficiently through since March 2020 and reopened our offices on May 4, 2020.
So far, we have zero COVID-19 incidents, both on board and at shore. We have secured the normal supply of bunkers, provisions, and potable water at main ports under specific procedures to avoid contact with port personnel. All critical technical services are maintained, and as all crew changes have been suspended, we have developed a detailed plan of such changes in order to increase crew availability and meet replacement demand once the changes resume. We have been also active in our environmental investments as seen in slide five. From the beginning of the year and until May 29, 2020, even during the peak of the COVID-19 pandemic, our program of dry dockings, ballast water treatment systems, and scrubber installations has continued. We have completed six dry dockings, five ballast water installations, four scrubber installations and had one resale newbuild vessel delivered.
In the financial forefront in slide six, following the refinancing concluded early 2020, which provided us with $53.1 million of additional liquidity and the drawdown of $3 million from our unsecured RCF, we took a further step in close cooperation with our lenders to preserve our strong financial position by pushing back to 2022 and 2023, a total of $39.1 million of loan repayments scheduled for 2020 and 2021. Also by drawing down $36.4 million from our existing available facilities. Moving to slide seven. In the commercial forefront, we have reached an agreement with a prominent charterer for four period time charters of non-scrubber fitted Panamax class vessels. Three five-year charters at the daily gross charter hire of $11,750 for the first two years and for the next three years at Baltic Exchange Times 97%, less $2,150, starting in the Q3 of 2020.
The one-year charter at the daily time charter rate linked to the Baltic Exchange BPI 82 TC times 109%, starting in the H1 of 2020, thus front-loading our future cash flows. The anticipated aggregate gross revenue of these four charters is $54.7 million until 2025, based on calculations of the current FFA curve. Let's move now into analyzing the market conditions. In slide nine, we present the outlook of the market as at the beginning of June in terms of charter rates for Capes and Panamax as well. So far, the market is mainly driven by COVID-19 and its effects in global economies. Most advanced economies have already announced stimulus packages to address the adverse effects of the pandemic. Another important driver so far is the U.S.-China trade war and the long-anticipated implementation of phase one deal, which was struck back in January.
Seasonality is a constant driver in the shipping market, setting the first quarter of every year as the weakest in terms of charter rates. Turning to slide 10, we present certain representative data on China, which seems to be the first country to recover from the pandemic. Chinese economy contracted by almost 7% in Q1. In response, China has announced the fiscal measures it intends to take to stimulate the economy back to growth territory. These include a fiscal stimulus package of almost CNY 3.6 trillion. That's equivalent about half a trillion dollars. A raise in the financial government's special bond quota of CNY 3.75 trillion and issuance of CNY 1 trillion of central government special bonds targeted as COVID-19 relief, and finally, business tax cuts and fee reductions worth CNY 500 trillion in total.
As evidenced in the bottom graph, Chinese industrial production indicators are rebounding, signaling what seems to be hopefully a V-shaped market recovery. The special purpose bonds should be the catalyst for a boost in industrial production and consequently for the uplift in demand in marine transportation commodities when the conditions in China normalize. Slide 11, we analyze the developments on imports of the major dry bulk commodities. As shown on the top graph, total iron ore imports into China in the January to April period were up 5% versus the same period of 2019. Rapid spread of COVID-19 in Brazil has halted exports of iron ore, which are down 17% year-on-year. This explains partially the depressed charter rates on Capes.
In the graph in the middle of the page, we present the thermal coal and lignite imports to China for the January to April period, which were increased by 46.6% versus the same period in 2019. From the bottom graph, we see that soybean imports to China in the same four months with a marginal increase versus the same period of 2019. We believe that the positive news coming from China and the gradual recovery of other importing countries worldwide will eventually increase demand for bulk. In slide 12, we present the status of the order book on Capes and Panamax to Post-Panamax. Order book is declining after 2020 with slippage and cancellations due to COVID-19 creating extensive delays.
The combination of aging of fleet, low charter rates, and increased CapEx for complying with environmental regulations may intensify scrapping activity, which has diminished due to lockdowns of demolition countries like India and Bangladesh. Lastly, the ongoing environmental discussions for emissions and decarbonization do not favor new orders. In slide 13, we present the effect of the global lockdowns and mobility restrictions on demand for oil and fuel. As presented on the top graph, according to BNEF, the global oil demand is also expected to evolve in a V -shape. The middle and bottom graphs represent the U.S. implied oil demand and the gasoline demand. We believe that as global lockdowns ease, oil demand will continue to improve in the H2 of 2020.
In slide 14, we present the price of the spread differential, also known as Hi-5, between the IMO 2020 compliant fuel versus the heavy fuel oil, which is used now only on the scrubber-fitted vessels in correlation with Brent prices. Compliant fuel and distillate products are closely related to the open up and recovery of global economies. The compliant fuel prices versus the HFO prices have shrunk. As evidenced on the graph, Hi-5 spread is correlated with Brent prices. We expect that the end of the global lockdown will lift mobility restrictions and hence the demand for oil and fuel. This will probably lead to recovery of Brent prices and to wider Hi-5 spread differential. Turning in slide 15, in the context of our environmental social responsibility, despite the tough environment, we have retrofitted 18 scrubbers and 25 ballast water treatment systems with an aggregate cost of $55.8 million.
By the end of the Q3 of 2020, we will have completed our scrubber installation program. On the bottom table, we estimate that expected downtime days for 2022 and 2023 in 2020 so as to assist our analysts with their projections. Let's summarize the key market takeaways in slide 16. Seasonality patterns are repetitive, intensified after a Chinese New Year by the COVID-19 pandemic. We believe the delays in Chinese shipyards, delays in ports due to quarantine, the diminished scrapping, and excessive environmental investments will control the supply side. China has introduced a fiscal stimulus package of about half a trillion dollars, its industrial indicators are rebounding, signaling what might possibly be a V-shape of the market recovery. There is a declining order book from 2020 onwards. At the same time, discussions on emissions and decarbonization will not favor new orders.
The combination of slip-up and cancellations due to the COVID-19 pandemic may create extensive delays. Furthermore, the aging fleet, low freight rates, and increased environmental CapEx may enhance the scrapping activity. The global lockdown has adversely affected the demand for oil and distillate fuels. We expect a slow rebound of global oil demand in the second half of this year as global lockdowns ease oil demand. The fuel price spread differential has shrunk for this reason during the Q1 of 2020, but if Brent recovers, then the spread might recover as well. Slide 17, the key notes points are that liquidity, which is in excess of $127 million, is a remark that we've done numerous dry dockings and already 90% of our environmental investments. Such liquidity in this unsafe environment provides us with flexibility.
Our ability to produce long-term period charters despite market conditions, adding front-loaded cash flows with this facility, is a hard evidence of excellent relations with our charterers. Our ability to complete our environmental investments in the peak of the pandemic is an evidence of our technical expertise. Lastly, our smooth and debt profile for the next years, while our leverage ratio is comfortably stands at 63%, is an evidence of the trust and support from our lenders. Let me continue with our liquidity in slide 19, which as of May 29 this year, stood at $127.2 million, shifting from $108 million. 20 will present what the blue columns are, the repayment schedule on a pro forma basis, taking into account the refinancing activities. The new loan facility for our last new build, which was delivered, and the unsecured revolving credit facility.
That is the repayment schedule as of March 31st, 2020.
No, this was from-
This was completed in Provides us with an additional liquidity of $53.1 million. During the Q1 , we drew down $10 million through our unsecured RCF. In April 2020, we drew down an additional $10 million available under this RCF named Troodos Oak. In addition, in close cooperation with our lenders, we pushed back $39.1 million of principal repayments. 2022 and 2023, which were originally scheduled for 2021 in the average tenor, creating a smoother repayment profile while maintaining the same governance path of debt. This resulted in increasing our flexibility during this period. Overall, following the quarter end, the company drew down $36.4 million and pushed back $39.1 million repayments to 2021. Moving to slide 21, we present our quarterly daily OPEX, which stood at $4,771 versus our quarterly daily G&A, stood at $1,371.
The aggregate figure for both these numbers for Q4 2019 was $6,142, demonstrating our focus on lean operations. We believe that this $6.1 thousand for both OPEX and G&A when comparing apples to apples, is one of the industry's lowest. Not the lowest, given the fact that we include in our OPEX all our dry docking expenses and in our G&A, our director compensation and all expenses related to the administration, while other companies may not include these numbers. Moving on to slide 22, we present our quarterly TCE, which stood at $9,089, affected by COVID-19, versus our quarterly OPEX, which stood at $4,771. Let's move to slide 23 with our quarterly financial highlights for the Q1 of 2020 compared to the same period of 2019. Net revenues decreased by 5% to $45.7 million from $48.3 million.
Our time charter equivalent rate per vessel decreased to $9,089 per day from $12,250 during the same period in 2019. Daily vessel OPEX increased by 15% to $4,771 compared to $4,153 for the same period in 2019. Whereas daily OPEX excluding dry docking and pre-delivery expenses increased by 3% to $4,285 for the Q1 of 2020 compared to $4,150 for the same period last year. Our adjusted EBITDA for the Q1 of 2020 decreased to $9.4 million compared to $24.9 million for the same period in 2019. Our adjusted loss per share for the Q1 of 2020 was $0.13, calculated on a weighted average number of 103.4 million shares, compared to adjusted earnings per share of $0.03 during the same period in 2019, calculated on a weighted average number of 101.6 million shares.
Closing our presentation in slide 24, we present our quarterly fleet data and average daily indicators compared to the same period last year. I would like to emphasize that in this period, we have worked extensively despite the tough market conditions, we have contracted three, five-year period time charters and one year period time charter, adding front-loaded cash flows. We have refinanced a large part of our debt early in 2020. We took six vessels to push back $39.1 million loan repayments. We also drew down $36.4 million. We have installed 18 scrubbers with only two remaining. We have a strong balance sheet, comfortable leverage, a smooth debt profile for 2020 and 2021, and liquidity over $127.2 million. 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 all our seafarers for their commitment and dedication and efforts throughout this tough period. Going forward, we'll maintain our determination to preserve our strong financial position in which we currently are, as we believe that the market signs are there for a market rebound once the COVID-19 impact is fully out of the way. Our press release presents in more detail our financial and operational results. We're now open to take questions.
As a reminder, if you would like to ask a question, please press star then the number one on your telephone keypad. Again, that is star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Chris Wetherbee.
Hey, guys. Good morning. This is James onto Chris. I just wanted to start with the balance sheet and touching some of the refinancings. I just wanted to get a sense of where you were. Are there additional refinancings that you'd like to pursue? Are you comfortable with what you've done so far? Just wanted to get a sense of what sort of the target capital structure is right now or what the goals you're working towards and see where you are in that process.
Yes. This is Loukas. Look, we are quite happy to have concluded very quickly this refinancing of certain facilities. Of course, the major job was done late last year. Right now you can see the principal payment schedule for the following years. We feel quite comfortable because we sit on a substantial liquidity which can cover the 2020 and 2021 principal payments. Having said that, of course, we shouldn't forget that the debt to asset ratio is 63%, which is still quite comfortable. The management feels that we are very fine at this position.
Got it. Kind of wanted to get a sense of the preferreds within that context. Is there anything that you think that you could opportunistically do there, or is that actually something that you're also comfortable with?
Could you repeat the question?
Yes. Just also wanted to touch on the preferreds. Are you comfortable with them where you are? Given the current environment, is there something that you could do opportunistically there, possibly repurchase at a discount, or they are fairly high cost of capital? To get a sense of if there's anything you could do on that side of the capital structure as well.
Yes, we are quite comfortable with preferreds, and I think the preferreds have played a very good, let's say, substantial part of the equity of the company. I think we should continue to maintain them in our balance sheet for, let's say, next periods.
Got it. Looking at OpEx, I know it's up about 3% year-over-year, as you said. Just wanted to get a sense of if that is the right run rate to think of moving forward, or if you have any opportunities to move it down, or if there's anything sort of one-time-ish in there. Essentially trying to get a outlook for OpEx per day.
Look, the OPEX that we always present is not comparable with several other companies that report differently the OPEX and the dry docking expenses. We put everything together. If you proceed with that, we should think that we did a large number of dry dockings and installations during the first quarter, despite the fact that we had this COVID-19 outbreak. We did it with our people in China, and we are quite comfortable. In the next quarter, I mean, we expect that this figure probably will go down because we have less dry dockings. The other thing is that also we have a program of reducing OPEX during this period. I think that we are quite happy and even in comparison with all our peers.
Yeah. Got it. I think you called out that OpEx per day, excluding dry docking expenses, was roughly $4,285. If we look at that moving forward, what should we be thinking of that particular number being? Also your ability to reduce that through some of your initiatives. Just trying to get an ex dry docking and ex delivery expenses. Trying to get a sense of what that might do across the next couple of quarters.
Yes, I think that we should look for a figure between $4,000 and $4,200. This is a reasonable assumption on our efforts. On that, then you need to top up with the dry docking expenses, as we said.
Got it. If you're thinking about the outlook at the moment, what is your expectation for rates? Do you think it'll be slow and gradual and occur maybe mid next year? Do you think it'll be sort of sharp and pointed and you could actually see some level of recovery in this year? Just trying to understand the outlook for the shape of recovery, if you will.
Yes. This is Polys. What we expect is the second half of this year to move towards break-even levels or slightly above break-even levels. As this uncertainty is still there with the pandemic and nobody knows how it will develop, if there's a second round coming or if there's a vaccine that may be produced, a lot will depend on that. If things get normalized, we expect that we will have a very strong 2021, because the supply of new buildings will be much less than what is this year, and demand will be back on track. We believe that we should have a good next 18 months if we don't have a new surprise from the pandemic.
Got it. Okay. Well, that's it for me. Thank you.
Thank you.
Your next question comes from Reggie Vivian.
Howdy, gentlemen. How's it going?
Yeah, fine. Thank you.
Excellent. We have a few questions for me. Looking at the kind of share issuances, you repurchased, I think it was like 3.3 million shares. What is the average price of that? Are you looking to be more conservative now or still looking at share repurchases at these levels?
Look, the margin is very comfortable with the company, and that's why from time to time, we have repurchase programs. I think that in the future, according to our assessment, we may continue to do such repurchase programs, either opportunistically or to support the stock price.
Sure. The average price for the shares that were repurchased?
Could you repeat please?
The average price for the shares that have been repurchased.
We have not reported that, but it's below the levels of stock today.
I think it's around the.
Around what? Sorry, couldn't hear you.
Around the price of maybe $1, $1.10, I think.
Similar to the price you offered for the vessel. Can you provide some color on the recent jump in the rates for Capesizes and kind of your expectations of this going forward?
Capesize rates are improving the last two or three weeks. We expect very soon the market to get over $15,000 a day, the spot market. Thereafter, a lot depends on how also the trend of the pandemic will develop in Brazil. If there's no big surprises there, and we can maintain the safety of the workers in the mines, we don't get any big surprises from that place. We think that there will be an increased volume of Brazilian iron ore moving to China. We see that the demand is there. You see that the price is going up of iron ore is more than $100 a ton. We expect the volume of Brazilian iron ore to help the market substantially. I think the market's already improving.
Basically, the usual pickup in demand that was in the past starting after the Chinese New Year, usually in every this year because of the pandemic in the Western Hemisphere is delayed, and we see it now in June. It's a two-month delay from other years. I expect to see a very strong July to December period for the iron ore trade.
Sure. Okay, I guess last question with all that in consideration, now that we're in almost mid-June, can you give some guidance on the Q2 compared to the first quarter in terms of that daily TCE? I know for the Q1 , you had $9,100. Where do you view the second quarter to be?
Yes. We don't give guides as such, but we expect definitely second quarter will be better than first quarter.
Oh, wow. Okay. Better than Q1 . Sounds good. Well, thanks so much.
Yeah. Thank you.
Your next question comes from Richard Diamond.
First, great job in a difficult environment. When the market's hot, it's easy to look good. This is a true demonstration of character. My impression is that mining involves, by its very nature, social distancing. I mean, people are wearing masks and they're far apart. It looks like the mines should be able to reopen in Brazil. I wondered if you could just give us some commentary, what you see happening on the ground in Brazil. Thank you.
When you mean on the ground, you mean in the various ports around the world?
No, on the ground in Brazil, what's happening today? What is your observation condition today?
We saw the reports over the weekend that there was some closure of mines in Brazil because of some increased COVID-19 hits by some workers there. I don't think this will last very long. Already Vale gave reassurances that their production will not be affected. Maybe there will be little bit of shortage of pellets for the local market. As far as exports are concerned, I don't think we will see any great deal of change of what was planned for export. We are reasonably optimistic and with also the improvement on the Far Eastern market, Capes will not ballast in volumes towards Brazil. Some of them are staying busy in the Pacific, this will give a chance, the long haul rate to help boost the market. Last year, the second half of last year, we enjoyed rates of $35,000 per day on the Capesizes.
This year, we would be happy if we have rates around $20,000 at the peak of Q3. We will be very happy with these numbers.
I share your sentiment. Thank you very much.
Thank you.
Gentlemen, there are no further questions. I will turn the call back over to you.
This concludes our conference call for the Q1 earnings. Thank you very much for your participation, and we look forward to seeing you. Thank you.
Thank you. Bye.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.