2020 Bulkers Stock

Welcome to 2020 Bulkers Q4 2025 Financial Presentation. [Operator Instructions] This call is being recorded. I'll now turn the call over to CEO, Lars-Christian Svensen. Please begin.

Thank you, operator. Welcome to the Q4 2025 Conference Call for 2020 Bulkers. My name is Lars-Christian Svensen, and I will be joined here today by our Chairman, Magnus Halvorsen; and our CFO, Vidar Hasund. Before we start the presentation, I would like to remind you that we will be discussing matters that are forward-looking. These assumptions reflect the company's current views regarding future events and are subject to risks and uncertainties. Actual results may differ materially from those anticipated. I will now continue with the highlights of the quarter. We reported a net profit of $13.8 million and an EBITDA of $16.5 million for the fourth quarter of 2025.

We achieved an average time charter rate of about $39,300 per day in the same period. Our total dividends amounted to $0.63 for the months of October, November and December 2025. In October 2025, we signed an agreement to sell the Bulk Sao Paulo for a total of $72.75 million with Q1 2026 delivery. In November 2025, we signed further agreements to sell the Bulk Sydney and the Bulk Santos for a total of $145.5 million. These 2 vessels will also be delivered to new owners within Q1 2026. In subsequent events, we reported an average net TCE earnings of about $30,800 per day for the month of January 2026. And this morning, we also announced a dividend of $0.15 for the same month. And with that, I will now pass the word to Vidar.

Thank you, Lars-Christian. 2020 Bulkers reports a net profit of $13.8 million and earnings per share of $0.60 for the fourth quarter of 2025. Operating profit was $15.8 million and EBITDA was $16.5 million for the quarter. Operating revenues and other income were $21.4 million for the fourth quarter. The average time charter equivalent rate was approximately $39,300 per day gross. Vessel operating expenses were $3.5 million, and the average operating expenses per ship per day were approximately $6,300 in the fourth quarter. G&A for the fourth quarter was $1.1 million. 2020 Bulkers recognized approximately $0.5 million in management fee as other income in the financial statements.

Interest expense were $1.9 million for the quarter. Shareholders' equity was $148.4 million at the end of the quarter. Interest-bearing debt was $112.5 million at the end of the fourth quarter and is nonamortizing until maturity in April 2029. Cash flow from operations was $15.5 million for the quarter. Cash and cash equivalents were $22.1 million at the end of the quarter. The company declared total dividends to shareholders of $0.63 per share for the months of October, November and December 2025. That completes the financial section. And now over to you, Magnus.

Thank you, Vidar. As our remaining ships will now soon be delivered to their new owners, I just wanted to reflect and summarize a little bit the 2020 Bulkers history and the financial returns we've generated for our loyal shareholders. We started out in 2017 by ordering 8 scrubber-fitted Newcastlemax vessels at New Times Shipyard paying at the time, all-inclusive $47.6 million. And we believe at the time, there was a very interesting risk reward given the attractive newbuilding prices and falling order book. As we became an operating company, we remained profitable every single quarter from the delivery of our last vessels. And looking at what this has meant in terms of returns, the company was initially financed by $142 million in equity through a number of share issues. As of and including the declaration we made today, we have declared a total of $251 million in dividends and distributions to other shareholders.

And as we've reported today and Vidar went through, we expect to have net proceeds from the sale of the last vessels amounting to around $311 million after all debt has been repaid. Additionally, we have around $50 million on cash on the balance sheet as of today. What this means for the investors who supported us throughout the whole story, participating prorate in every equity offering since November 2017, we've generated an IRR of 28% per annum measured in dollars. For those and perhaps more relevant who came in on the IPO on then Oslo Axess in June 2019, the annual return, including dividends, has been 31% measured in U.S. dollars. This compares to 17% for the S&P 500 and just under 16% for the Oslo Stock Exchange measured in dollars for apples-to-apples comparison.

As we stated in the release today, our intention is to, as soon as possible, return all the proceeds from the sales to shareholders as well as the majority of cash on hand. We will retain a small amount in the company to support G&A, which will enable us to stay listed while we can evaluate potential strategic or other opportunities. Before I go to the Q&A, I'd like to thank everyone who's been part of the story so far. We obviously wouldn't have been able to do this without the investors. And I think particularly the ones that supported us in a very challenging share offering in May 2019. At the time, dry bulk was not exactly in fashion. It was very tough to get it done. And also a big thanks to the employees, the Board, the banks, brokers, New Times Shipyard and of course, very importantly, our very good charters, so -- which we have remained very loyal to. And with that, I'll leave it over to the operator for questions.

[Operator Instructions] As there appears to be no questions in the queue, I'll hand it back to the speakers for any closing remarks.

Okay. I think we've said what we want to do. So thank you, everyone, for dialing in. And if you have any questions that you didn't ask, feel free to reach out to us. Thank you very much.

Welcome to 2020 Bulkers Q3 2025 Financial Presentation. Today's call is being recorded. [Operator Instructions] I would now like to introduce CEO, Lars-Christian Svensen. Please begin.

Thank you, operator. Welcome to the Q3 2025 conference call for 2020 Bulkers. My name is Lars-Christian Svensen, and I'm joined here today by our CFO, Vidar Hasund. Before we begin the presentation, I would like to remind you that we will be discussing matters that are forward-looking. These statements reflect the company's current views regarding future events and are subject to risks and uncertainties. Actual results may materially differ from those anticipated.

I will now proceed with the highlights of the quarter. We reported a net profit of $9.8 million and an EBITDA of $14.2 million. The gross TCE earnings for the quarter were approximately $35,100 per day. We declared a total dividend of $0.54 per share for the months of July, August and September, and the company used FFA to hedge 2 vessels at $33,700 per day from the 1st of August until 31st December.

The company also signed agreements to sell vessels Bulk Sandefjord, Bulk Santiago and Bulk Shenzhen for a total consideration of $209 million with an agreed delivery to the new owners in Q1 2026. In subsequent events, we signed an agreement to sell the vessel Bulk Sao Paulo for a total consideration of $72.75 million with Q1 2026 delivery for this unit as well. For October, we achieved a time charter equivalent of about $36,000 per day and a dividend payout of $0.19 per share for the month. And with that, I will now pass the floor to Vidar.

Thank you, Lars-Christian. 2020 Bulkers reports a net profit of $9.8 million and earnings per share of $0.43 for the third quarter of 2025. Operating profit was $11.7 million, and EBITDA was $14.2 million for the quarter. Operating revenues and other income were $19.3 million for the third quarter. The average time charter equivalent rate was approximately $35,100 per day gross. Vessel operating expenses were $3.7 million and the average operating expenses per ship per day were approximately $6,600 in the third quarter.

G&A for the third quarter was $1.2 million. 2020 Bulkers recognized approximately $0.5 million in management fee as other operating income in the financial statements. Interest expense were $1.9 million for the quarter. Shareholders' equity was $148 million at the end of the quarter. Interest-bearing debt was $112.5 million at the end of the third quarter and is nonamortizing until maturity in April 2029. Cash flow from operations was $12.2 million for the quarter. Cash and cash equivalents were $15.2 million at the end of the quarter.

The company declared total dividends to shareholders of $0.54 per share for the months of July, August and September 2025. That completes the financial section. And now back to you, Lars-Christian.

Thank you, Vidar. 2020 bulkers still have 6 scrubber-fitted Newcastlemaxes with an average age of about 5 years. All vessels are time chartered out on index-linked period contracts to solid counterparts. At each given time, we have the option to convert the vessels from index-linked to fixed rates using the forward FFA curve as a price metric, if we see value in the forward curve.

This structure has been an integral part of the company's commercial strategy, which has led us to net profit every quarter since inception in 2019. Not only have we been positive, but we also paid out dividends to the shareholders in 65 consecutive months, which equals 163% of the total paid in capital. The company has an industry low cash breakeven of $11,500 per day for the entire fleet. Due to our vessels superior intake and speed design compared to a standard Capesize vessel, we only need the Baltic Capesize Index to be above $7,500 per day to make money.

As you can see from the historical market graph, with the current company structure, 2020 Bulkers will generate a profit and healthy dividend capacity in almost any market. We take pride in our low cash breakeven, but even more pride with our structure linking it with a healthy dividend capacity. If the Baltic Capesize Index is $20,000 per day, we will yield 12%. If the index is $30,000 per day, we'll yield about 20%. And when the Baltic Capesize Index hits $40,000 per day, 2020 Bulkers will yield about 30%.

Now let's move over to the market section. The Baltic Capesize Index is currently higher than the average from 2015 to 2024 and also higher than in 2023 and '24, respectively. The largest drivers have been increased bauxite exports from West Africa to China, but also strong iron ore exports from Brazil to China. Both legs are long-haul routes, which has provided a healthy market level and increased ton miles. The ton-mile story continues to move in the right direction after a significant drop at the end of Q4 '24.

Ton-mile for Q3 for Capesize was up 2% year-over-year, driven by long-haul trades from the Atlantic to Asia. Bauxite from Guinea has surpassed positive expectations every month and is up 28% year-over-year and 15% in Q3 alone. Iron ore exports are continuing its positive trajectory with increased exports from both Brazil and Australia and coal remains subdued and is currently down 15% in Q3 year-over-year.

In Q4 2024, we saw a decline in coal transported on Capesize and Newcastlemax, which led to weaker freight rates. We're still not close to transport the pre-Q4 '24 coal volumes on the larger sizes, but we are seeing more coal back on the Capes and Newcastlemaxes in the last 2 quarters. This is due to more activity on the grain trade for the Panamaxes, which has left more coal for our segments. We also see in 2025 that for the first time in history, more bauxite is transported on the larger sizes than coal, which marks an important shift in trade dynamics.

Bauxite is now responsible for 16% of the total Capesize and Newcastlemax volumes. China's appetite for high-grade iron ore has exceeded even last year's record import numbers with a 4% increase year-over-year. As you can see from the left graph, the domestic Chinese iron ore production is trending down. Domestic iron ore production was down 3% year-over-year in '24 and down 1% to date in 2025. This may be another signal that Chinese domestic iron ore production is becoming less economical due to its low Fe content estimated around 20%.

On the right graph, you can see that import volumes are on the rise with high-grade iron ore from the Atlantic being the main driver. The Chinese iron ore inventories down approximately 10% year-over-year, this indicates a healthy iron ore demand scenario, as we're soon wrapping up 2025. The first volumes from the Simandou mine in Guinea are currently being loaded according to our sources. This milestone represents another strong front leg from the Atlantic, which will continue to boost the ton-mile story.

Over a 24-month ramp-up phase, the mine is targeting 120 million tonnes of high-grade iron ore per annum for the market. With the additional Vale capacity increase by 2026, we expect a total of 170 million tonnes of high-grade iron ore from the Atlantic, most of which will be exported to China. As shown on the right graph, comparing these volumes to the record low order book, the supply story strengthens further.

The bauxite volumes have exceeded forecasted volumes by a land slide this year, a 28% increase in ton mile year-over-year and the world seaborne bauxite has had a 15% increase in Q3 2025. As the rain season is coming to an end in Guinea, we're positive to the bauxite story as we're entering the high season for this commodity in the coming quarter.

Before we end today's presentation, we continue to highlight the historically low order book. We are at a 25-year record low, standing at 9.3% of the total existing Capesize fleet. Active shipyards are down 60% from the peak in 2008, making it challenging to build any meaningful capacity that could disrupt the favorable supply dynamics for the next few years. The visibility of additional capacity remains, and we continue to thank other shipping segments for their continued newbuilding additions. I will now pass the word back to the operator and welcome any questions you might have.

[Operator Instructions] The first question is from the line of [ Patrick Talger ] from ABG.

A quick question in sort of the prospect after the 4 ships now is delivered to its new owners in Q1. Two ships left, what could you say about what is the right way employment, if any, for those 2? And in the event of the 4 being sold and the 2 remaining, what is your current plans for deploying those dollars coming from the ship sales, buying new ships, everything else in dividends or anything else?

Thank you for the question. We are, though, 4 to 5 months away from the transaction being closed and money into -- in the account. So it's a bit too early to announce what we're going to do going forward when we have 4, 5 months of business as usual here. We're trying to optimize as much as we can, make as much money as we can in the meantime.

And we take quite a lot of pride in being transparent and being shareholder-friendly, and we will naturally strive to continue that going forward as well. I do understand the question, but as always, we will notify the market if and when we buy or sell new ships.

Understood. Looking further into 2026, do you -- I remember if you sort of go back to, I think, it was in Q4 2023, you said that the first quarter in '24 would be not as weak as the market seems to expect. And at the time, that was a very accurate prediction. In terms of Q1 2026, do you think the bauxite volumes in combination with the Simandou volumes will counteract the normal very weak seasonality and particularly into February? Or will we see more or less the same as we saw in Q1 this year?

Whoever had a crystal ball, but I'll try. I think Q1 is more interesting now than it's been for many, many years because the bauxite volumes are up high season, as you know, out of Guinea. We'll expect a lot of volumes going from there into China. And in the Simandou mine as well, we will experience more volumes in that particular window than we have done in the past.

What's also quite alluring is that there is fairly dry in West Africa at that time of year. So we expect the volumes to keep on flowing. You obviously have the X factor from Brazil. Is it going to be a wet season? Is it going to be dry? But all in all, I think the historical Q1 doldrums will not have as much impact going forward and see a little bit more stable market across the quarters. I'm quite confident that Q1 will remain stronger in the years to come than what they've been in the past because of these new volumes and the ton-mile intensity of it all.

[Operator Instructions] It does not look like we have any further questions from the telephone call. So I'll hand it back to the speakers.

Thank you very much for listening in, and we look forward to speak to you next quarter as well. Thank you very much.

Thank you.