Annual Report • Mar 11, 2025
Annual Report
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Untitled ANNUAL REPORT 2024 2020 BULKERS LTD. CONTENT Board of Directors’ Report 3 Responsibility Statement 10 Corporate Governance Report 11 Consolidated Financial Statements 15 Reconciliaon of Alternave Performance Measures 32 Auditors’ Report 33 Oces 38 2020 BULKERS LTD. ANNUAL REPORT 2024 3 2020 Bulkers Ltd. (together with its subsid- iaries, the “Company” or the “Group” or “2020 Bulkers”) is a limited liability company incorporated in Bermuda on September 26, 2017. The Company’s shares are traded on the Oslo Børs under the cker “2020”. 2020 Bulkers is an owner and operator of large dry bulk vessels. The Company has six Newcastlemax dry bulk vessels in oper- aon. All vessels are trading on charters to reputable counterpares. BOARD OF DIRECTORS’ REPORT KEY EVENTS DURING 2024 The Company reported net prot of US$76.3 million and EBITDA of US$93.2 million for 2024. The Company achieved average me charter equivalent earnings of approxi- mately US$31,900 per day, gross. The Company declared total cash distribuons and dividends of US$3.42 per share for 2024. The Company sold the vessels Bulk Shanghai and Bulk Seoul for a total consid- eraon of US$127.5 million and seled the sale leaseback nancing for both vessels. In March 2024, the interest rate swaps were terminated for US$2.9 million in cash. The vessels Bulk Sandeord and Bulk Sanago were drydocked at a total cost of US$2.2 million. The Company entered into a new amended non-amorzing loan facility, maturing in April 2029 with an interest rate of SOFR plus 195 basis points in margin. SUBSEQUENT EVENTS The Company achieved average me charter equivalent earnings for January and February 2025 of approximately US$16,700, and US$13,500, per day, gross, respecvely. So far in 2025, the Company has declared dividends and cash distribuons of US$0.04 per share for the months of January and February 2025. HEALTH, SAFETY AND ENVIRONMENT 2020 Bulkers is fully commied to health, safety, quality and environmental protec- on and idenes these as being essenal to long-term nancial and reputaonal success. 2020 Bulkers has outsourced ship man- agement to third party contractors. A structured due diligence and audit process is in place to ensure the highest ship man- agement standards are applied. Safety is at the core of our acvies, both in the oce and onboard our vessels, and we have a commitment to safeguard persons from harm or injury and prevent damage to property. 2020 Bulkers´ employ- ees are expected to idenfy operaonal risks and implement safe work pracces. 2020 Bulkers experienced no Loss Time Accidents (LTA) or other personnel injuries in 2024. This stasc includes seagoing crew under employment contracts with our technical managers. The 2020 Bulkers eet consists of six modern, fuel ecient 208,000 DWT Newcastlemax dry bulk vessels. The sis- ter vessels delivered by New Times Shipyard from August 2019 through June 2020 are ed with Exhaust Gas Cleaning Systems and Ballast Water Treatment Systems in compliance with internaonal regulaons. The vessels are esmated to be 36% more carbon emission eecve per ton mile compared to a standard non-eco Capesize vessel due to higher cargo carrying capac- ity, energy opmized ship hull design, high thermal and mechanical eciency of main and auxiliary engines and other energy consuming systems onboard. The 2020 Bulkers eet was delivered with an EEDI of 2.11, outperforming IMO requirements by 16% (phase 1). The Company sll benets from high focus on performance during contracng, as the eet also surpasses the EEDI requirements for vessels contracted between 2020 and 2024 by 6% (Phase 2). We are commied to make use of proven and economically viable means to reduce our environmental footprint. HUMAN RESOURCES AND DIVERSITY The Company prohibits discriminaon against any employee or prospecve 2020 BULKERS LTD. ANNUAL REPORT 2024 4 BOARD OF DIRECTORS’ REPORT employee on the basis of gender, race, color, age, religion, sexual preference, marital status, naonal origin, disability, ancestry, polical opinion, or any other basis prohibited by the laws that govern its operaons. This is embedded in the Company’s Code of Conduct. The Company will not engage in or support discriminaon and has adopted a non-discriminang pracce that strives to ensure equal treatment in recruit- ment, hiring, compensaon, access to training, employee benets and services, promoon, terminaon and rerement, irrespecve of age, gender, race, color, disability, religion or belief, language, naonal or social origin, trade union membership, or any other status recog- nized by internaonal law. This is embed- ded in the Company’s Code of Conduct. As of December 31, 2024, the Company had seven full me employees of which one was female and six were male employees. All seagoing crew are under employment contract with our technical managers. The Board of Directors consists of three members of which one is female and two are male. The absence due to sickness was approxi- mately zero % in 2024. GOING CONCERN In accordance with secon 3-3a of the Nor- wegian Accounng Act, the Board conrms that the prerequisites for the going concern assumpon exist and that the consolidated nancial statements have been prepared based on a going concern basis. CORPORATE DEVELOPMENTS AND FINANCING The Board remains focused on returning the majority of operaonal free cash ow aer debt service back to shareholders on a monthly basis. The Company has as of today declared dividends or cash distribuons for 57 consecuve months. Following the cash distribuon for Febru- ary 2025, the Company will have returned approximately 145% of the paid-in equity to shareholders. In February 2024, the Company signed an agreement to sell the vessels Bulk Shang- hai and Bulk Seoul to an unaliated third party for a total consideraon of US$127.5 million. The two vessels were owned by Ocean Yield under sale leaseback arrange- ments, and the Company exercised its opons with Ocean Yield to eectuate the sale. The Company recognized a net book gain of approximately US$40.9 million and the sales were completed on March 20, 2024, and April 4, 2024, for Bulk Shanghai and Bulk Seoul, respecvely. In April 2024, the Company signed an agreement to renance and amend its US$162.5 million Term Loan Facility matur- ing in March 2027. Pursuant to the new agreement, the Company repaid US$27.5 million of the outstanding amount under the Term Loan Facility, which was replaced with a new non-amorzing US$112.5 million Loan Facility maturing in April 2029. The new Loan Facility has an interest rate of SOFR+195 bps in margin. In August 2024, the Company sold 40% of the shares in 2020 Bulkers Management AS to Himalaya Shipping for a total consid- eraon of NOK 3.2 million. The Company has a solid funding situaon with a cash posion of approximately US$15 million as of March 5, 2025. Cash breakeven for the eet, which includes expected general and admin- istrave expenses, operang costs and debt service is esmated at approximately US$11,500 per vessel per day. The Company has as of March 5, 2025, approximately US$98 million of net debt, corresponding to approximately US$16 million per vessel. MANAGEMENT DISCUSSION AND ANALYSIS Consolidated Statements of Operaons Operang revenues were US$114.1 million for the twelve months ended December 31, 2024 (US$73.0 million for the twelve months ended December 31, 2023). The Company achieved an average me charter equivalent rate, gross, of US$31,900 for the twelve months ended December 31, 2024, compared to US$24,700 for the twelve months ended December 31, 2023. During the twelve months ended December 31, 2024, the Company recognized a gain of US$40.9 million for the sale of Bulk Shang- hai and Bulk Seoul on March 20, 2024, and April 4, 2024, respecvely. During the twelve months ended December 31, 2024, the Company charged Himalaya Shipping approximately US$1.5 million (US$1.1 million during the twelve months ended December 31, 2023) for management ser- vices recognized as Other operang income in the Consolidated Statements of Opera- ons. In addion, the Company recognized US$2.2 million in insurance selement during the twelve months ended December 31, 2023. Total operang expenses were US$30.4 mil- lion for the twelve months ended Decem- ber 31, 2024 (US$35.3 million for the twelve months ended December 31, 2023). Vessel operang expenses were US$16.1 million and US$19.4 million for the twelve months ended December 31, 2024 and 2020 BULKERS LTD. ANNUAL REPORT 2024 5 2023, respecvely. The decrease compared to the twelve months ended December 31, 2023, is primarily due to sale of the Bulk Shanghai and Bulk Seoul on March 20, 2024, and April 4, 2024, respecvely. Voyage expenses and commission were US$0.9 million for the twelve months ended December 31, 2024 (US$0.9 million for the twelve months ended December 31, 2023). General and administrave expenses were US$3.9 million for the twelve months ended December 31, 2024 (US$3.4 million for the twelve months ended December 31, 2023). Depreciaon and amorzaon were US$9.5 million and US$11.6 million for the twelve months ended December 31, 2024 and 2023, respecvely. The decrease com- pared to the twelve months ended Decem- ber 31, 2023, is primarily due to sale of the Bulk Shanghai and Bulk Seoul on March 20, 2024, and April 4, 2024, respecvely. Total nancial expenses, net, were US$6.7 million for the twelve months ended December 31, 2024 (US$10.6 million for the twelve months ended December 31, 2023). The decrease compared to the twelve months ended December 31, 2023 is primarily due to the selement of sale leaseback nancing for Bulk Seoul and Bulk Shanghai partly oset by higher interest expense on the term loan facility. Consolidated Balance Sheets The Company had total assets of US$266.6 million as of December 31, 2024, (Decem- ber 31, 2023: US$376.1 million). The decrease compared to total assets as of December 31, 2023, is primarily due to the sale of Bulk Shanghai and Bulk Seoul. Total shareholders’ equity was US$151.9 million and US$161.0 million as of Decem- ber 31, 2024 and December 31, 2023, respecvely. Total liabilies as of December 31, 2024, were US$114.7 million (December 31, 2023: US$215.1 million). The decrease is primarily due to the US$27.5 million repayment in connecon with renancing of the term loan as well as the repayment of the US$62.9 million outstanding balance on the sale leaseback nancing for Bulk Shanghai and Bulk Seoul. In addion, the Company paid US$3.7 million in scheduled amorzaon on both the term loan and the sale leaseback nancing during the rst three months of 2024. Consolidated Statements of Cash Flows Net cash provided by operang acvies was US$44.7 million for the twelve months ended December 31, 2024 (US$41.2million for the twelve months ended December 31, 2023). The increase compared to the twelve months ended December 31, 2023, is primarily due to higher me charter rates achieved partly oset by fewer eet operaonal days due to sale of vessels. Net cash received from invesng acvies was US$123.5 million for the twelve months ended December 31, 2024 (US$nil for the twelve months ended December 31, 2023). The Company received US$125.8 million in net proceeds from the sale of vessels and US$0.3 million in proceeds from the sale of 40% of the shares in 2020 Bulkers Management AS. The Company incurred US$2.2 million in expenses in con- necon with drydocking of Bulk Sandeord and Bulk Sanago and US$0.4 million relat- ing to scheduled drydockings in 2025. Net cash used in nancing acvies was US$182.8 million during the twelve months ended December 31, 2024 (US$26.1 million used in nancing acvies during the twelve months ended December 31, 2023). The Company repaid US$27.5 million on the term loan in connecon with the renancing, repaid the outstanding balance of US$62.9 million on the sale leaseback nancing for Bulk Shanghai and Bulk Seoul, paid scheduled amorzaon of US$3.7 million and paid US$86.0 million of dividends and cash distribuons during the twelve months ended December 31, 2024. The Company repaid US$14.8 million of long-term debt, paid US$14.5 million of cash distribuons and received US$3.2 million in proceeds from share issuances during the twelve months ended December 31, 2023. As of December 31, 2024, the Company’s cash and cash equivalents and restricted cash amounted to US$16.2 million (December 31, 2023: US$30.8 million). Outstanding shares As of December 31, 2024, the Company had a share capital of US$22,870,906 divided into 22,870,906 shares at par value of US$1.00 each. OUR FLEET The current chartering status is summa- rized in the table on the next page. During 2024 the Company had the follow- ing xed charter coverage: Five vessels xed for January 2024, at average US$20,869 per day, gross. Five vessels xed for February 2024, at average US$20,869 per day, gross. Three vessels xed for March 2024, at average US$19,177 per day, gross. In addion, all the above vessels earned scrubber benets during the xed rate me charter periods. BOARD OF DIRECTORS’ REPORT 2020 BULKERS LTD. ANNUAL REPORT 2024 6 COMMERCIAL UPDATE 2020 Bulkers has commercially outper- formed the Balc 5TC index for 63 out of 67 months since delivery of its rst vessel. All the concluded charters represent a signicant earnings premium to a standard Capesize vessel driven by the addional cargo intake and lower fuel consumpon. Charter- ers are also paying a premium to reect the economic benet of our vessels’ scrubbers. The structure of our index-linked contracts allows the Company to convert these charters to xed rates on the basis of the prevailing FFA market from me to me, should we wish to increase our level of xed charter coverage. DRY DOCKING The Bulk Sandeord and Bulk Sanago completed their ve year special surveys in March 2024. Total cost was US$2.2 million for both vessels. The Company incurred 13 days of oire per vessel in conjuncon with the special surveys. The Company expects to complete ve year special surveys for Bulk Shenzhen, Bulk Sydney, Bulk Sao Paulo and Bulk Santos during the rst half of 2025. The esmated total cost for all vessels is approximately US$5 million which will be funded from cash. MARKET COMMENTARY The Balc 5TC Capesize index averaged US$22,593 in 2024, up from US$16,389 in 2023. The index today (March 7, 2025) stands at US$20,084 having averaged US$9,954 year to date, down from US$22,326 during the same period in 2024. 2024 as a whole, generally saw good trade growth with Capesize ton-miles increasing 3.1%, compared to 2023. The year started out strong with Q1 averaging about USD 17,000 per day. The solid trend connued throughout the second and third quarter with a total tonne mile increase from Q1-Q3 of 5.5%. Albeit record China import of iron ore and bauxite for the total of 2024, the historical seasonality favouring Q4 contracted due to weak panamax mar- kets, where capesize coal volumes were cannabilized by the smaller segments. The Balc 5 TC index dropped from average of US$24,909 in the third quarter to average US$18,301 in the fourth quarter. The solid bauxite volumes have connued into 2025, and aer two large cyclones in Australia in January and February, Australia is export- ing iron ore again reecng the yearly guided volumes. The total increase in Capesize ton-miles in 2024 was driven by a 5.2% increase in Brazilian iron ore exports, while Australian export volumes grew 1% year over year. Bauxite export volumes have connued to grow, showing a 17% increase year over year, following more than 25% growth in 2023. So far in 2025, Capesize ton-miles have been supported by a 48% increase in Guinea bauxite exports, compared to the same period last year. Iron-ore exports are at compared to the same period last year, while coal tonne-miles are down 36%. Global crude steel producon for 2024 was down 1.5% year over year. The World ex. China had an 0.3% increase, while Chinese steel producon decreased 2.5%. Chinese iron ore imports were up by 4%, from 1,244 million tonnes in 2023 to 1,297 million tonnes in 2024. BOARD OF DIRECTORS’ REPORT Charter Ship name Delivery Charterer Rate US$ expiry Bulk Sandeord Aug-19 Koch Index linked + premium + scrubber benet Dec 26 – Dec 27 Bulk Sanago Sep-19 Koch Index linked + premium + scrubber benet Dec 26 – Dec 27 Bulk Shenzhen Jan-20 Koch Index linked + premium + scrubber benet Dec 26 – Dec 27 Bulk Sydney Jan-20 Koch Index linked + premium + scrubber benet Dec 26 – Dec 27 Bulk Sao Paulo Jun-20 European charterer Index linked + premium a + scrubber benet Apr 25 – Jun 25 Bulk Santos Jun-20 European charterer Index linked + premium + scrubber benet Apr 25 – Jun 25 2020 BULKERS LTD. ANNUAL REPORT 2024 7 Chinese iron ore port inventories have increased both in nominal and seasonal terms, and currently stand at 148 million tons, compared to 125 million tons a year ago. The last three months shows that the iron ore stockpiles are decreasing and the iron ore consumpon in terms of days are sll about the historical average. Growth in vessel supply will be moderate in the coming years with expected Capesize deliveries of 7.8 million dwt. in 2025, 10.4 million dwt. in 2026 and 13 million dwt. aer 2026. 11.4 million dwt. were delivered in 2024. As a consequence of the high ordering in other shipping segments, Chinese yards are believed to have very limited capacity for ordering of large drybulk vessels before 2028, with orders recently having been placed for delivery as late as 2029. This gives good visibility for limited supply growth in the coming years. New ordering is expected to remain subdued in part driven by uncertaines as it relates to the opmal propulsion systems to meet the shipping industry’s ambions for de-carbonizaon. The fact that large bulk carriers are a relavely low margin product for the shipyards also means the yards favor building container ships, tankers and gas carriers. Current newbuilding costs for a scrubber ed Newcastlemax in China is believed to be just under US$80 million. We reiterate upside to the future development in the Capesize market from current levels, relate to connued strong exports of iron ore and bauxite from Brazil and West Africa. The Simandou project in Guinea is reportedly progressing well, with the rst shipment expected in second half 2025, followed by a 24-month ramp-up to 60 million tonnes per annum for Phase 1 and an addional 60 million tonnes per annum for Phase 2. Furthermore, Vale aims to increase capacity by 50 million tonnes per annum by 2026 from its Var- gem Grande, Capanema, and S11D mines. The aging Capesize eet will enter a large Special Survey year in 2025, where 23% of the eet will have to drydock. This is a 52% increase compared to dry dockings completed in 2024. Historical drydock data from 2015 to date shows that a 5, 10 and 15 year Special Survey on average takes 13, 16 and 19 days to complete, respecvely. Key downside risks to the Capesize market include a connued economic slowdown in China, as well as heightened geopolical tensions, now also with trade wars includ- ing higher tolls and taris. CAPESIZE FLEET DEVELOPMENT The global Capesize eet stands at 400 million dwt. as of March 2025, up from 394 million dwt. in March 2024. The current orderbook for Capesize dry bulk vessels currently stands at 7.2% of the exisng eet, up from 6.5% in March 2024. 14.2 million dwt. was ordered in 2024, compared to 11.4 million dwt in 2023 0.84 million dwt. has been scrapped in 2024, compared to 1.0 million dwt. in 2023. CORPORATE GOVERNANCE REPORT AND ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT The Company has prepared a Corporate Governance Report which is included as a separate secon of this Annual Report. The Environmental Social and Governance Report can be found on the Company’s website. The Company has based its corpo- rate governance principles on the Norwe- gian Code of Pracce for Corporate Gov- ernance published on October 14, 2021 (the “Code”). There are, however, some areas where the Company’s governance principles dier from those of the Code, primarily due to dierences between the Bermuda Companies Act and/or the Com- pany’s Bye-laws and the Norwegian Public Limited Companies Act which are detailed in the Corporate Governance Report. RISK FACTORS The Company is exposed to a variety of risks, including market, operaonal and nancial risks. The most signicant risk to the Company is the cyclicality of the dry bulk market with aendant volality in freight rates, vessel values and consequently, protability. Fluc- tuaons in rates result from imbalances between the supply and demand for vessel capacity and changes in the supply and demand for the commodies carried by water internaonally. The supply of and demand for shipping capacity determine the freight rates. Because the factors aecng the supply and demand dynamics of the shipping segment the Group is invested in are outside of the Group’s control and are unpredictable, the nature, ming, direcon and degree of changes they inuence in business condions are also unpredictable. Other key risks are outlined below, which are not meant to be exhausve: The Company’s vessels will be subject to perils parcular to marine operaons, including capsizing, grounding, collision and loss and damage from severe weather or storms. The vessels may also be subject to other unintended accidents. Such circumstances may result in loss of or damage to the relevant vessel, damage to property (including other vessels) and damage to the environment or persons or for acons for damages connected with BOARD OF DIRECTORS’ REPORT 2020 BULKERS LTD. ANNUAL REPORT 2024 8 exisng and future contracts which cannot be fullled. Such events may lead to the Group being held liable for substanal amounts by contractual counterpares, injured pares, their insurer and public governments. In the event of polluon, the Group may be subject to strict liability. Environmental laws and regulaons appli- cable in the countries in which the Group operates have become more stringent in recent years. Such laws and regulaons may expose the Group to liability for the conduct of or condions caused by others, or for acts by the Group that were in com- pliance with all applicable laws at the me such acons were taken. The occurrence of the aforemenoned events may have a material adverse eect on the Group’s business, nancial condi- on, results of operaon and liquidity, and there can be no assurance that the Group’s insurance will fully compensate any such potenal losses and/or expenses. Further, the Company’s management will monitor the performance of each investment, however, the Company will rely upon third party technical and day-to-day manage- ment of the assets, and there can be no assurance that such management will operate successfully. The operaon of dry bulk vessels has certain unique operaonal risks and the cargo itself and its interacon with the vessel can be a risk factor. By their nature, dry bulk cargoes are oen heavy and may shi in a hold unless carefully distributed and stowed causing loss of vessel stability. High moisture bulk cargoes may cause free water surface on-top with subsequent loss of stability during a voyage, and certain cargoes may react badly to water expo- sure. In addion, dry bulk vessels are oen subjected to baering treatment during unloading operaons with grabs, and use of bulldozers to maximize cargo ouurn. This harsh handling may cause structural weakness or damage to the vessels and thus render them more suscepble to a hull breach at sea. Hull breaches in dry bulk vessels may lead to the ooding of cargo holds. If a dry bulk vessel suers ooding, the combinaon of cargo and sea water may result in very high shear force and bending moment and eventually cause catastrophic buckling or collapse of vessel’s bulkheads leading to the loss of the vessel. If the Group is unable to adequately maintain or safeguard its vessels, it may be unable to prevent such events. Any of these circumstances or events could neg- avely impact the Group’s business, nan- cial condion or results of operaons. In addion, the loss of any of its vessels could harm the Group’s reputaon as a safe and reliable vessel owner and operator. The Group’s success depends, to a signi- cant extent, upon the abilies and eorts of a small number of key personnel, employed in 2020 Bulkers Management AS and providing services to the Group under the terms of the Management Agreement, and there can be no assurance that such indi- viduals will connue to be employed by the Group and involved in the management of the Group in the future, or that their conn- ued involvement will guarantee the future success of the Group. If the Group does not retain such key competence, and/or if it is unable to aract new talent or competen- cies relevant for the future development of the Group, this may have a negave eect on the success of the Group, and the Group’s ability to expand its business and/ or to maintain and develop its compeve skill set, which will correspondingly have an adverse eect on the Group’s compeve posion and nancial performance. The Company generates revenues and incurs operang expenses in U.S. dollars and the majority of the general and administrave expenses are denominated in NOK. The Company has not hedged any foreign currency exposure. The interest rate on the term loan facility is based on SOFR + a margin. In April 2020 the Company entered into interest swap arrangements for the outstanding loan amount under the term loan unl August/ September 2024. In March 2024, the Com- pany terminated the interest rate swaps and is currently exposed to interest rate uctuaons. The Company has chartered out four vessels to Koch Shipping Pte. Ltd. and two vessels to a European charterer. The two customers are large internaonal companies, and 2020 Bulkers assess the companies as reputable counterpares with low credit risk. There is a concentraon of credit risk with respect to cash and cash equivalents to the extent that all of the amounts are carried with Danske Bank and Nordea. However, we believe this risk is remote, as Danske Bank and Nordea are established nancial instuons. The availability of nancing alternaves for future investment opportunies may be unavailable at suciently aracve terms. The Company is also exposed to general movements on the Oslo Børs, which may limit the possibility of raising new equity at aracve prices. With the increased use of technologies such as the internet to conduct business, the Group, service providers to the Group and Oslo Børs are suscepble to opera- onal, informaon security and related BOARD OF DIRECTORS’ REPORT 2020 BULKERS LTD. ANNUAL REPORT 2024 9 “cyber” risks both directly and indirectly, which could result in material adverse consequences for the Group and the share- holders, such as causing disrupons and impacng business operaons, potenally resulng in nancial losses. Unlike many other types of risks faced by the Group, these risks are typically not covered by any insurance. In general, cyber incidents can result from deliberate aacks or uninten- onal events. Cyber incidents include, but are not limited to, gaining unauthorized access to digital systems (e.g., through “hacking” or malicious soware coding) for purposes of misappropriang assets or sensive informaon, corrupng data, or causing operaonal disrupon. Cyberaacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service aacks on websites (i.e., eorts to make network services unavailable to intended users). 2020 Bulkers maintains Directors & O- cers liability insurance against liabilies incurred in their capacity as Director or Ocer. The insurance is capped at US$20 million. OUTLOOK 2020 Bulkers has a robust nancial struc- ture with moderate nancial leverage and a solid cash posion. Our operang cash breakeven is esmated at approximately US$11,500 per vessel per day. The current FFA curve for the balance of 2025 implies earnings of approximately US$32,000 per day for a scrubber ed Newcastlemax. The Company will connue its strong cap- ital discipline and will remain focused on returning the majority of free cash ow to shareholders as monthly dividends. This report includes forward looking statements. Forward looking statements are, typically, statements that do not reect historical facts and may be idened by words such as “ancipate”, “believe”, “connue”, “esmate”, “expect”, “intends”, “may”, “should”, “will” and similar expressions. The forward-looking statements in this report are based upon various assumpons, many of which are based, in turn, upon further assumpons. Although 2020 Bulkers Ltd. believes that these assumpons are reasonable, they are, by their nature, uncertain and subject to signicant known and unknown risks, conngencies and other factors which are dicult or impossible to predict and which are beyond our control. Such risks, uncer- taines, conngencies and other factors could cause actual events to dier mate- rially from the expectaons expressed or implied by the forward-looking statements included herein. The informaon, opinions and for- ward-looking statements contained herein speak only as of the date hereof and are subject to change without noce. ABOUT 2020 BULKERS LTD. 2020 Bulkers Ltd. is a limited liability company incorporated in Bermuda on 26 September 2017. The Company’s shares are traded on Oslo Børs under the cker “2020”. 2020 Bulkers is an owner and operator of large dry bulk vessels. The Company has six Newcastlemax dry bulk vessels in operaon. BOARD OF DIRECTORS’ REPORT March 10, 2025 /s/ Lori Wheeler Naess /s/ Viggo Bang-Hansen /s/ Magnus Halvorsen Lori Wheeler Naess Viggo Bang-Hansen Magnus Halvorsen Director Director Chairperson 2020 BULKERS LTD. ANNUAL REPORT 2024 10 We conrm that, to the best of our knowledge, the consolidated nancial statements for 2024, which have been prepared in accordance with US GAAP, give a fair presentaon of the Company’s consolidated assets, liabilies, nancial posion and result of operaons, and that the 2024 Board of Directors report includes a fair review of the informaon required under the Norwegian Securies Trading Act secon 5-6 fourth paragraph. RESPONSIBILITY STATEMENT March 10, 2025 /s/ Lori Wheeler Naess /s/ Viggo Bang-Hansen /s/ Magnus Halvorsen Lori Wheeler Naess Viggo Bang-Hansen Magnus Halvorsen Director Director Chairperson 2020 BULKERS LTD. ANNUAL REPORT 2024 11 CORPORATE GOVERNANCE REPORT 2020 Bulkers Ltd. (“2020 Bulkers” or “the Company”) is a company organized and exisng under the laws of Bermuda. The corporate governance principles applicable to the Company are set out in the Ber- muda Companies Act 1981, its bye-laws (the “Bye-laws”) and its memorandum of associaon. As a consequence of the lisng of the Company’s shares on the Oslo Børs (Oslo Stock Exchange, the “OSE”), certain aspects of Norwegian law, notably the Norwegian Securies Trading Act and the Norwegian Stock Exchange Regulaons are also relevant for its corporate governance policy. 1. 2020 BULKERS CORPORATE GOVERNANCE POLICY The overall corporate governance policy of 2020 Bulkers is the responsibility of its board of directors (the “Board”). In dening this policy, the Board will observe the requirements set out in applicable laws, cf. above, relevant recom- mendaons and the specic requirements arising from the Company’s business acvies. The most important recommendaon of relevance to the Company’s corporate gov- ernance is the Norwegian Code of Pracce for Corporate Governance of 14 October 2021 (the “Code”). The Board recognizes that the Code represents an important standard for cor- porate governance for companies whose shares are listed on the OSE. Most of the principles and recommendaons in the Code are included in the Company’s cor- porate governance policy. There are, how- ever, some areas where the Company’s governance principles dier from those of the Code, primarily due to dierences between the Bermuda Companies Act and/ or the Bye-laws and the Norwegian Public Limited Companies Act. These dierences are described below. The Board has codied certain corporate governance principles in a “Code of Con- duct,” applicable to all employees in the Company and its subsidiaries (the “2020 Bulkers Group”). The Code of Conduct can be found on the Company’s website (hps://2020bulkers. com/company/). The Board has formulated the Company’s overall mission and the core values on which all of the acvies of the 2020 Bulkers Group shall be based. These can be found on the Company’s website. The Board has, in line with the Code’s recommendaons, prepared this report in order to disclose those of its corporate governance principles which do not comply with the recommendaons of the Code. 2. THE BUSINESS The Company’s memorandum of associ- aon describes the Company’s objecves and purposes as unrestricted. This deviates from the recommendaon in the Code but is in line with the requirements of the Bermuda Companies Act. The Company has clear objecves and strategies for its business. These are described in the Company’s annual report and on its website. 3. EQUITY AND DIVIDENDS The Board strives to idenfy and pursue clear business goals and strategies for the Company, to assess and manage the risks associated with these, and to maintain an equity capital and liquidity posion which are sucient to match the same. Under the Bye-laws, the Board may declare dividends and cash distribuons without the approval of the shareholders in general meengs. This diers from the recommen- daon in the Code. The Company’s aim is to provide its shareholders with a compeve return on their investment through a posive development in the price of the Company’s shares and, when the Company’s cash ow allows, dividends or cash distribuons to its shareholders. The Company’s shareholders may, by way of a resoluon in a general meeng of all shareholders (a “General Meeng”) increase the Company’s authorized share capital, reduce the authorized share capital (by reducing the number of unissued but authorized shares) and increase or reduce the issued share capital. The procedures for such corporate acons are set out in the Bye-laws and the Bermuda Companies Act. The Board has, under Bermuda law, wide powers to issue authorized but unissued shares in the Company. The Board is also authorized in the Bye-laws to purchase the Company’s shares and hold these in treasury. These powers are not restricted to any specic purposes nor to a specic period as the Code recommends. 4. EQUITABLE TREATMENT OF SHARE HOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATES The Company has one class of shares only. Each share carries one vote. All shares have equal rights. All shares give a right to parcipate in General Meengs. Under the Bermuda Companies Act, no shareholder has a pre-empve right to subscribe for new shares in a limited company unless (and only to the extent 2020 BULKERS LTD. ANNUAL REPORT 2024 12 that) the right is expressly granted to the shareholder under the bye-laws of such company or under any contract between the shareholder and such company. The Bye-laws do not provide for pre-empve rights. The Board will only transact in the Compa- ny’s shares at their market value. Members of the Board (each a “Director”) and the Company’s senior management shall nofy the Board if they have any material interest, whether direct or indi- rect, in any transacon which the 2020 Bulkers Group intends to conclude. Following these guidelines, any Directors and/or members of the Company’s senior management who have an interest in any such transacon shall always refrain from parcipang in the discussions on whether to conclude such transacon or not in the relevant corporate bodies in the 2020 Bulkers Group. Further, the Board shall always consider whether it is appropriate to obtain an inde- pendent third-party valuaon of the object of any material transacon between the Company and any of its close associates. 5. FREELY NEGOTIABLE SHARES The Company’s shares are freely tradable. 6. GENERAL MEETINGS The Code requires that noce of General Meengs, (including any supporng docu- ments for the resoluons to be considered therein) is made available on the Compa- ny’s website no later than 21 days prior to the date of the General Meeng. The Bye-laws allow, in accordance with Bermuda law, for noce to be given no less than seven days (excluding the day on which the noce is served and the day on which the General Meeng to which it relates is to be held) prior to a General Meeng. This diers from the recommen- daon of the Code. The Board aspires to maintain good rela- ons with its shareholders and possible investors in its shares, and to have an investor relaon policy which complies with the OSE’s Code of Pracce for Investor Relaons. The Board shall ensure that as many share- holders as possible are able to parcipate in the General Meengs. To achieve a high rate of shareholder aendance therein the Company shall: provide, on its website, the date of and, if possible, further informaon on each General Meeng as early as possible, and at the latest seven days in advance thereof; provide, together with or before the noce is given, sucient supporng documentaon for any resoluon pro- posed to be made therein in order for the shareholders to prepare; ensure that any registraon deadline is set as close to the General Meeng as possible; and ensure that the shareholders may vote for each and all of the candidates for the Board. 7. NOMINATION COMMITTEE The Code recommends that the Company has a nominaon commiee. The Company is not, under Bermuda law, obliged to establish a nominaon commit- tee. The Board is of the opinion that there are, for the me being, not sucient rea- sons to establish a nominaon commiee. The Board will consult with the Company’s main shareholders prior to proposing candidates for Directors and will ensure that the Board consists of Directors with the experse and competence as shall be required by the Company from me to me. 8. CORPORATE ASSEMBLY AND BOARD OF DIRECTORS, COMPOSITION AND INDEPENDENCE The Company does not have a corporate assembly. According to the Bye-laws the Board shall consist of not less than two Directors. Currently the Board consists of three Direc- tors. It is the view of the Board that at least two of its Directors are independent of the Company’s main shareholders. Further, it is the view of the Board that a majority of the Directors are independent of the Com- pany’s senior managers and main business partners. Although the Chair performs certain execuve funcons, no Director is employed by the 2020 Bulkers Group. The Board will, in accordance with normal procedures for Bermuda companies, elect its chairman. This diers from the recom- mendaon in the Code that the General Meeng shall elect the chairman of the Board. The Directors shall, subject to applicable law and the Bye-laws, hold oce unl the rst General Meeng following such Director’s elecon. The Directors may be re-elected. A short descripon of the current Directors is available on the Company’s website – hps://2020bulkers.com/team/. CORPORATE GOVERNANCE REPORT 2020 BULKERS LTD. ANNUAL REPORT 2024 13 9. THE WORK OF THE BOARD The Code recommends that the Board develops and approves wrien guidelines for its own work as well as the work of the Company’s senior managers with parcular emphasis on establishing clear internal allocaon of responsibilies and dues. The Bermuda Companies Act does not require the Board to prepare such guide- lines. The Board is of the opinion that there are no reasons to issue such guide- lines at present. The Code recommends that the Board establishes an audit commiee and a remuneraon commiee. Although the Bermuda Companies Act does not require the Company to establish such commiees, the Board has estab- lished an Audit Commiee, but the Board is of the opinion that there is no reason to establish a remuneraon commiee at present. 10. RISK MANAGEMENT AND INTERNAL CONTROL The Board is focused on ensuring that the 2020 Bulkers Group’s business pracces are sound and that adequate internal control rounes are in place. The Board connuously assesses the possible con- sequences of and the risks related to the 2020 Bulkers Group’s operaons. The 2020 Bulkers Group is commied to protecng the health and safety of its employees and contractors in their acvi- es for the 2020 Bulkers Group and is com- mied to ensure generally accepted QHSE principles are integrated in everything the 2020 Bulkers Group does. The Board supervises the Company’s internal control systems. These cover both the 2020 Bulkers Group’s operaons and its guidelines for ethical conduct and social responsibility. 11. REMUNERATION OF THE DIRECTORS The remuneraon of the Directors is set by the General Meeng. The Company may, on occasion, pay Directors their fee in the Company’s shares and/or grant Direc- tors under the Company’s share opon scheme. Secon 11 of the Code requires that Directors should not take on specic assignments for the Company in addion to their appointment as Directors. The 2020 Bulkers Group will not refrain from engaging Directors for specic assignments for the Company if such engagement is considered benecial to the Company. This diers from the recommen- daon in the Code. However, such assign- ments will be disclosed to the Board and the Board shall approve the assignment, as well as the remuneraon. 12. REMUNERATION OF LEADING EMPLOYEES The remuneraon of the 2020 Bulkers Group’s senior managers is based on four components. The rst component is each individual’s xed salary. This is set based on the individual’s posion and responsibility and the internaonal salary level for com- parable posions. The second component is local com- pensaon such as mandatory pension payments. The third component is a variable, discre- onary bonus. Bonuses will be granted based on the performance of the 2020 Bulkers Group as a whole and each individ- ual in relaon to targets set annually. The fourth component is a share opon scheme established by the Company where share opons can be issued to senior managers in the 2020 Bulkers Group. The Code recommends that guidelines for the remuneraon of execuve personnel are prepared and approved by the General Meeng. Such guidelines should set forth an absolute limit to performance related remuneraon. The 2020 Bulkers Group’s remuneraon policy does not require such a procedure, nor does it contain any such limit. This diers from the recommenda- on in the Code. The Bye-laws permits the Board to issue share opons to the Company’s employees, including members of the 2020 Bulkers Group’s senior management team, without requiring that the General Meeng approves the number of opons granted or the terms and condions of such. In addion, the share opon scheme is an incenve program rather than remu- neraon directly limited to the Company’s results. 13. INFORMATION AND COMMUNICATION The Company is commied to provide informaon on its nancial situaon, ongoing projects and other circumstances relevant for the valuaon of the Company’s shares to the nancial markets on a regular basis. The Company is also commied to disclose all informaon necessary to assess the value of its shares on its website. Inter- ested pares will nd the Company’s latest news releases, nancial calendar, company presentaons, share and shareholder informaon, informaon about analyst coverage and other relevant informaon here. CORPORATE GOVERNANCE REPORT 2020 BULKERS LTD. ANNUAL REPORT 2024 14 Such informaon may also be found on the website of the OSE – hps://www. euronext.com/nb/markets/oslo. Informaon to the 2020 Bulkers Group’s shareholders shall be published on the Company’s website at the same me as it is sent to the shareholders. 14. TAKEOVER OFFER The Code recommends that the board of directors should establish guiding principles for how it will act in the event of a take-over bid. The same is not a require- ment under Bermuda law and the Board has not xed specic, wrien guidelines for such scenario other than as set out herein. In the event of a takeover oer, the Board will seek to ensure that the Compa- ny’s business acvies are not disrupted unnecessarily in the event a general oer is made for the Company’s shares. The Board will, furthermore, strive to ensure that shareholders are given sucient informa- on and me to form a view of the terms of such oer. If a takeover oer is made, the Board will issue a statement on its merits in accor- dance with statutory requirements and the recommendaons in the Code. The Board will consider obtaining a valua- on of the Company’s equity capital from an independent expert if a takeover oer is made in order to provide guidance to its shareholders as to whether to accept such oer or not. 15. AUDITOR The Board will, each year, agree a plan for the audit of the 2020 Bulkers Group’s accounts with its auditor. The Board will furthermore interact regularly with the auditor within the scope of this plan. CORPORATE GOVERNANCE REPORT 2020 BULKERS LTD. For the years ended December 31, 2024 and 2023 CONSOLIDATED FINANCIAL STATEMENTS 2020 BULKERS LTD. ANNUAL REPORT 2024 16 12 months to 12 months to (In millions of US$ except per share data) December 31, 2024 December 31, 2023 Time charter revenues 71.7 69.7 Other operang income 1.5 3.3 Gain on sale of vessels 40.9 - Vessel operang expenses (16.1) (19.4) Voyage expenses and commission (0.9) (0.9) General and administrave expenses (3.9) (3.4) Depreciaon and amorzaon (9.5) (11.6) Financial expenses, net Interest expense (6.8) (11.2) Other net nancial income (expense) 0.1 0.6 Net income before income taxes 77.0 27.1 Income tax (0.7) (1.5) Basic earnings per share 3.34 1.13 Diluted earnings per share 3.34 1.13 Consolidated Statements of Comprehensive Income Unrealized gain (loss) on interest rate swaps (0.7) (5.2) Reclassicaon for gains included in the statements of operaons due to hedge disconnuance (3.3) - CONSOLIDATED STATEMENTS OF OPERATIONS See accompanying notes that are an integral part of these Audited Consolidated Financial Statements. 2020 BULKERS LTD. ANNUAL REPORT 2024 17 (In millions of US$) December 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents 16.1 30.7 Restricted cash 0.1 0.1 Trade receivables 0.8 0.9 Accrued revenues 0.3 0.2 Other current assets 1.9 6.8 Vessels and equipment, net and drydocking 247.4 337.4 Total assets 266.6 376.1 LIABILITIES AND EQUITY Current poron of long-term debt - 14.8 Accounts payable 0.5 0.6 Accrued expenses 3.1 3.5 Declared cash distribuon - 4.1 Other current liabilies 1.0 3.0 Long-term debt 110.1 189.1 Common shares of par value US$1.0 per share: authorized 75,000,000 (2023:75,000,000). Issued and outstanding 22,870,906 (2023: 22,870,906) 22.9 22.9 Addional paid-in capital 1.0 1.5 Contributed surplus 12.1 11.2 Non-controlling interest 0.1 - Accumulated other comprehensive income - 4.0 Retained earnings 115.8 121.4 CONSOLIDATED BALANCE SHEETS See accompanying notes that are an integral part of these Audited Consolidated Financial Statements. March 10, 2025 /s/ Lori Wheeler Naess /s/ Viggo Bang-Hansen /s/ Magnus Halvorsen Lori Wheeler Naess Viggo Bang-Hansen Magnus Halvorsen Director Director Chairperson 2020 BULKERS LTD. ANNUAL REPORT 2024 18 12 months to 12 months to (In millions of US$) December 31, 2024 December 31, 2023 Net income 76.3 25.6 Gain on sale of vessels (40.9) - Cash received from selement of interest rate swaps 2.9 - Share based compensaon 0.2 0.1 Depreciaon and amorzaon 9.5 11.6 Change in trade receivables 0.1 1.3 Change in accrued revenues (0.1) - Change in accounts payable (0.1) (0.4) Change in other current assets and liabilies (3.2) 3.1 Change in other long-term liabilies - (0.1) Proceeds from sale of shares subsidiary 0.3 - Net proceeds from sale of vessels 125.8 - Cash paid for drydocking (2.6) - Repayment of long-term debt and fees paid for renancing and debt selement (96.8) (14.8) Net proceeds from share issuances - 3.2 Dividends and cash distribuons paid (86.0) (14.5) Net increase (decrease) in cash and cash equivalents and restricted cash (14.6) 15.1 Cash and cash equivalents and restricted cash at beginning of period 30.8 15.7 Interest paid (9.0) (10.8) Income taxes paid (1.3) (0.1) CONSOLIDATED STATEMENTS OF CASH FLOWS See accompanying notes that are an integral part of these Audited Consolidated Financial Statements. 2020 BULKERS LTD. ANNUAL REPORT 2024 19 Other (In millions of US$, except number of shares) Consolidated balance Issue of common shares 650 000 0.7 2.5 - - - - 3.2 Transfer(1) - - (1.6) 1.6 - - - - Share based compensaon - - 0.1 - - - - 0.1 Cash distribuons - - - (18.6) - - - (18.6) Total comprehensive income for the period - - - - - (5.2) 25.6 20.4 Consolidated balance Transfer(2) - - (0.9) 0.9 - - - - Share based compensaon - - 0.2 - - - - 0.2 Sale of shares in subsidiary (3) - - 0.2 - 0.1 - - 0.3 Dividends - - - - - - (81.9) (81.9) Total comprehensive income for the period - - - - - (4.0) 76.3 72.3 Consolidated balance (1) At the 2023 Annual General Meeng held May 9, 2023, it was approved to reduce the Share Premium Account (Recognized as Addional paid-in capital in the Consolidated Statements of Changes in Shareholders’ Equity) of the Company by US$1,594,000 and to credit the same amount resulng from the reducon to the Company’s Contributed Surplus account, with eect from May 9, 2023. (2) At the 2024 Annual General Meeng held May 7, 2024, it was approved to reduce the Share Premium Account (Recognized as Addional paid-in capital in the Consolidated Statements of Changes in Shareholders’ Equity) of the Company by US$889,250 and to credit the same amount resulng from the reducon to the Company’s Contributed Surplus account, with eect from May 7, 2024. (3) In August 2024, the Company sold 40% of the shares in 2020 Bulkers Management AS to Himalaya Shipping. CONSOLIDATED STATEMENTS OF CHANGESINSHARE HOLDERS’ EQUITY See accompanying notes that are an integral part of these Audited Consolidated Financial Statements. 2020 BULKERS LTD. ANNUAL REPORT 2024 20 1. GENERAL INFORMATION 2020 Bulkers Ltd. (together with its subsidiaries, the “Company” or the “Group” or “2020 Bulkers”) is a limited liability company incorporated in Bermuda on September 26, 2017. The Company’s shares are traded on Oslo Børs under the cker “2020”. 2020 Bulkers is an owner and operator of large dry bulk vessels. The Group has six Newcastlemax dry bulk vessels in operaon. Basis of presentaon Our consolidated nancial statements are prepared in accordance with accounng principles generally accepted in the United States of America (U.S. GAAP). 2. ACCOUNTING POLICIES Principle of Consolidaon The consolidated nancial statements include the assets and liabilies of the parent company and subsidiaries where we have control. All intercompany balances and transacons have been eliminated upon consolidaon. Use of esmates The preparaon of nancial statements in conformity with U.S. GAAP requires us to make esmates and assumpons that aect the amounts reported in our nancial statements and accompanying notes. Actual results could dier from those esmates. Fair value measurement We have determined the esmated fair value amounts presented in these consolidated nancial statements using available market informaon and appropriate methodologies. However, considerable judgment is required in interpreng market data to develop the esmates of fair value. The esmates presented in these consolidated nancial statements are not necessarily indicave of the amounts that we could realize in a current market exchange. The use of dierent market assumpons and/or esmaon methodologies may have a material eect on the esmated fair value amounts. We account for fair value measurement in accordance with the accounng standards guidance using fair value to measure assets and liabilies. The guidance provides a single denion for fair value, together with a framework for measuring it, and requires addional disclosure about the use of fair value to measure assets and liabilies. Reporng and funconal currency The Company and the majority of its subsidiaries have the US$ as their funconal currency because the majority of their revenues, expenses and nancing are denominated in US$. Accordingly, the Company’s reporng currency is also U.S. dollars. Foreign currency gains or losses on consolidaon are recorded as a separate component of other comprehensive income (loss) in shareholders’ equity for subsidiaries that have funconal currencies other than US$. Foreign currency Transacons in foreign currencies during the year are recognized at the rates of exchange in eect at the date of the transacon. Foreign currency monetary assets and liabilies are revalued using rates of exchange at the balance sheet date. Foreign currency transacon gains or losses are included in the consolidated statements of operaons. Revenue and expense recognion Our shipping revenues are primarily generated from me charters. In a me charter, the vessel is hired by the charterer for a specied period of me in exchange for consideraon which is based on a daily hire rate. The charterer has full discreon over the ports visited, shipping routes and vessel speed. In a me charter contract, we are responsible for all the costs incurred for running the vessel such as crew costs, vessel insurance, repairs and maintenance and lubes. Costs incurred by the Company in connecon with me charters are recognized on an accruals basis. The charterer bears the voyage related costs such as bunker expenses, port charges and canal tolls during the hire period. The performance NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2024 21 NOTES 2020 BULKERS LTD. NOTES obligaons in a me charter contract are sased over the term of the contract beginning when the vessel is delivered to the charterer unl it is redelivered back to the Group. The me charter contracts are considered operang leases and therefore do not fall under the scope of ASC 606 Revenue from Contracts with Customers because (i) the vessel is an idenable asset (ii) we do not have substanve substuon rights and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives the economic benets from such use. Time charter contracts are accounted for as operang leases in accordance with ASC 842 Leases and related interpretaons. For arrangements where the Company is the lessor, we intend to elect the praccal expedient which allows the Company to treat the lease and non-lease compo- nents as a single lease component for the leases where the ming and paern of transfer for the non-lease component and the associated lease component to the lessees are the same and the lease component, if accounted for separately, would be classied as an operang lease. Income from me charters is recognized on a straight-line basis over the period of the me charter contract (or lease contract) and at the prevailing rate for the relevant assessment period for variable or index-linked me charter contracts. Variable lease payments included into our me-charter agreements, such as prot sharing for fuel savings from scrubbers, that do not depend on an index or rate are excluded from the calculaon of lease payments and recognized in the period in which the variability is resolved. In a voyage charter contract, which we consider in scope of ASC 606, the charterer hires the vessel to transport a specic agreed upon cargo for a single voyage. The consideraon in such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis. Esmates and judgments are required in ascertaining the most likely outcome of a parcular voyage and actual outcomes may dier from esmates. In a voyage charter contract, the performance obligaons begin to be sased once the vessel begins loading the cargo. We have determined that our voyage charter contracts consist of a single performance obligaon of transporng the cargo within a specied me period. Therefore, the performance obligaon is met evenly as the voyage progresses, and the revenue is recognized on a straight-line basis over the voyage days from the commencement of loading to compleon of discharge. During 2024 and 2023, the Company had revenues from me charter contracts. The guidance also species treatment for certain contract related costs, being either incremental costs to obtain a contract, or costs to fulll a contract. Under the guidance, an enty shall recognize as an asset the incremental costs of obtaining a contract with a customer if the enty expects to recover those costs. The guidance also provides a praccal expedient whereby an enty may recognize the incremen- tal costs of obtaining a contract as an expense when incurred if the amorzaon period of the asset that the enty otherwise would have recognized is one year or less. Costs to fulll a contract must be capitalized if they meet certain criteria. In a voyage contract, the Company bears all voyage related costs such as fuel costs, port charges and canal tolls. These costs are considered contract fulllment costs because the costs are direct costs related to the performance of the contract and are expected to be recovered. The costs incurred during the period prior to commencement of loading the cargo, primarily bunkers, are deferred as they represent setup costs and are recorded as a current asset and are subsequently amorzed on a straight-line basis as we sasfy the performance obligaons under the contract. Share-based compensaon The cost of equity seled transacons is measured by reference to the fair value at the date on which the share opons are granted. The fair value of the share opons issued under the Company’s employee share opon plans is determined at the grant date taking into account the terms and condions upon which the opons are granted, and using a valuaon technique that is consistent with generally accepted valuaon methodologies for pricing nancial instruments, and that incorporates all factors and assumpons that knowledge- able, willing market parcipants would consider in determining fair value. The fair value of the share opons is recognized in General and administrave expense in the Consolidated Statements of Operaons, with a corresponding increase in equity over the period during which the employees become uncondionally entled to the opons. Compensaon cost is inially recognized based upon opons expected to vest, excluding forfeitures, with appropriate adjustments to reect actual forfeitures. Impairment of vessels We connually monitor events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. Among other indicators we look at the market capitalizaon of the Company against the net book value of equity and market condions in the dry bulk freight market. In assessing the recoverability of our vessels carrying amounts, we make assumpons regarding esmated future cash ows and esmates in respect of residual or scrap value. When such events or changes in circumstances are pres- ent, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash ows. If the total of the future cash ows is less than the carrying amount of those assets, we recog- nize an impairment loss based on the excess of the carrying amount over the lower of the fair market value of the assets, less cost to sell, and the net present value (“NPV”) of esmated future undiscounted cash ows from the employment of the asset (“value-in-use”). As of December 31,2024, and December 31, 2023, the Company had no indicaons that the carrying amount of a parcular vessel may not be fully recoverable. ANNUAL REPORT 2024 22 NOTES Sale lease-back transacons When a sale and leaseback transacon does not qualify for sale accounng, the transacon is accounted for as a nancing transacon by the seller-lessee. To account for a failed sale and leaseback transacon as a nancing arrangement, the seller-lessee does not derecognize the underlying asset; the seller-lessee connues depreciang the asset as if it was the legal owner. The sales proceeds received from the buyer-lessor are recognized as a nancial liability. A seller-lessee will make rental payments under the leaseback. These payments are allo- cated between interest expense and principal repayment of the nancial liability. The amount allocated to interest expense is determined by the incremental borrowing rate or imputed interest rate. The sale and lease back transacons that the Company entered into for Bulk Seoul and Bulk Shanghai, involved purchase obligaons and was therefore treated as nancing arrangements. Please refer to note 11. Deferred charges Costs associated with long-term nancing, including debt arrangement fees, are deferred and amorzed over the term of the relevant loan using the straight-line method as this approximates the eecve interest method. Amorzaon of loan costs will be included in “Interest expense” in the Consolidated Statements of Operaons. If a loan is repaid early, any unamorzed poron of the related deferred charge is charged against “Other nancial expenses” in the period in which the loan is repaid. Deferred charges are presented as a deduc- on from the corresponding liability in the Consolidated Balance Sheet. Vessels and equipment, net Vessels and equipment are recorded at historical cost less accumulated depreciaon and, if appropriate, impairment charges. Depreciaon is calculated on a straight-line basis over the useful life of the assets based on cost less esmated residual values. The esmated useful life for our vessels is 25 years. The esmated residual values are based on ten year average steel price and lightweight ton of the vessels. Drydocking Maintenance of class cercaon requires expenditure and can require taking a vessel out of service from me to me for survey, repairs or modicaons to meet class requirements. When delivered, the Group’s vessels can generally be expected to have to undergo a class survey once every ve years. The Group’s vessels are being built to the classicaon requirements of American Bureau of Shipping (ABS) and the Liberian Ship Register. Normal vessel repair and maintenance costs will be expensed when incurred. We will recognize the cost of a drydocking at the me the drydocking takes place. The Group will capitalize a substanal poron of the costs incurred during drydocking, including the survey costs and depreciates those costs on a straight-line basis from the me of compleon of a drydocking or intermediate survey unl the next scheduled drydocking or intermediate survey. Earnings per share Basic earnings per share (“EPS”) is computed based on the income available to common stockholders and the weighted average number of shares outstanding. Diluted earnings per share includes the eect of the assumed conversion of potenally diluve instruments, which for the Company includes share opons. The determinaon of diluve EPS may require us to make adjustments to net income and the weighted average shares outstanding used to compute basic EPS unless an-diluve. Trade receivables Trade receivables are presented net of allowances for doubul balances. At each balance sheet date, all potenally uncollecble accounts are assessed individually for purposes of determining the appropriate provision for doubul accounts. Cash and cash equivalents Cash compromises cash on hand and cash at bank. All demand and me deposits and highly liquid, low risk investments with original maturies of three months or less at the date of purchase are considered equivalent to cash. Cash and cash equivalents that are restricted as to their use are classied as Restricted cash in the Consolidated Balance Sheets. Interest-bearing debt Interest-bearing debt is recognized inially at fair value less directly aributable transacon costs. Subsequent to inial recognion, inter- est-bearing borrowings are stated at amorzed cost. Transacon costs are amorzed over the term of the loan. Current and long-term classicaon Assets and liabilies are classied as current assets and liabilies respecvely, if their maturity is within one year of the balance sheet date. Otherwise, they are classied as non-current assets and liabilies. Related pares Pares are related if one party has the ability, directly or indirectly, to control the other party or exercise signicant inuence over the other party in making nancial and operang decisions. Pares are also related if they are subject to common control or common signi- cant inuence. ANNUAL REPORT 2024 23 NOTES Interest rate hedging The interest rate swaps are recognized at fair value. All the interest rate swaps are designated for hedge accounng. Gains or losses on the hedging instrument are recognized in other comprehensive income (loss), to the extent that the hedge is determined to be eecve. All other gains or losses are recognized immediately in the consolidated statements of operaons. The fair values of the interest rate swaps are disclosed in note 12. The fair value of the interest rate swaps is recognized and presented as a current asset or liability for maturity equal to or less than twelve months and a non-current asset or liability for maturity exceeding twelve months. 3. RECENTLY ISSUED ACCOUNTING STANDARDS Adopon of new accounng standards Segment Reporng (Topic 280): Improvements to Reportable Segment Disclosures US FASB ASU 2023-07 The amendments in this Update improve nancial reporng by requiring disclosure of incremental segment informaon on an annual and interim basis for all public enes to enable investors to develop more decision-useful nancial analyses. Currently, Topic 280 requires that a public enty disclose certain informaon about its reportable segments. For example, a public enty is required to report a measure of segment prot or loss that the CODM uses to assess segment performance and make decisions about allocang resources. Topic 280 also requires other specied segment items and amounts, such as depreciaon, amorzaon, and deple- on expense, to be disclosed under certain circumstances. The amendments in this Update do not change or remove those disclosure requirements. The amendments in this Update also do not change how a public enty idenes its operang segments, aggregates those operang segments, or applies the quantave thresholds to determine its reportable segments. The amendments in this Update are eecve for scal years beginning aer December 15, 2023, and interim periods within scal years beginning aer December 15, 2024. Early adopon is permied. 4. INCOME TAXES 2020 Bulkers Ltd. is incorporated in Bermuda. 2020 Bulkers Ltd. transferred tax domicile from Bermuda to Norway eecve August 9, 2022. Our vessel owning subsidiaries are taxed under the Norwegian Tonnage Tax Regime. The esmated income tax expense for the twelve months ended December 31, 2024, is US$0.7 million (US$1.5 million for the twelve months ended December 31, 2023) and is related to taxable net nancial income (under the Norwegian Tonnage Tax Regime) primarily due to realized gains on interest rate swaps. The Group does not have any accrued interest or penales relang to income taxes. 5. SEGMENT INFORMATION Our chief operang decision maker, or the CODM, being our Board of Directors, measures performance based on our overall return to shareholders based on consolidated net income. The CODM does not review a measure of operang result at a lower level than the con- solidated group and we only have one reportable segment. Our vessels operate worldwide and therefore management will not evaluate performance by geographical region as this informaon is not meaningful. The CODM does review operang expenses on a quarterly basis. Of total vessel operang expenses of US$16.1 million (US$19.4 million for the twelve months ended December 31, 2023), crew costs amount to US$8.2 million (US$9.9 million for the twelve months ended December 31, 2023) for the twelve months ended December 31, 2024. For the year ended December 31, 2024, two customers accounted for 10 percent or more of our consolidated revenues in the amounts of US$49.0 million and US$22.7 million, respecvely. For the year ended December 31, 2023, three customers accounted for 10 percent or more of our consolidated revenues in the amounts of US$51.6 million, US$10.3 million and US$7.8 million, respecvely. ANNUAL REPORT 2024 24 NOTES 7. EARNINGS PER SHARE 12 months to 12 months to December 31, December 31, (In US$, except share numbers) 2024 2023 Basic earnings per share 3.34 1.13 Diluted earnings per share 3.34 1.13 Issued ordinary shares at the end of the period 22 870 906 22 870 906 Weighted average number of shares outstanding - basic 22 870 906 22 574 933 Weighted average number of shares outstanding - diluted 22 874 248 22 574 933 The computaon of basic EPS is based on the weighted average number of outstanding shares during the period. Diluted EPS includes the potenal eect of conversion of 60,000 of share opons (2023: none) outstanding issued to employees since the average share price for the twelve months to December 31, 2024, was above the strike price. Diluted EPS excludes the potenal eect of conversion of 115,000 of share opons (2023: 60,000) outstanding issued to directors and employees since the average share price for the twelve months to December 31, 2024, was below the strike price. 8. LEASES Lessor The Company had the following vessels on operang lease contracts as of December 31, 2024: Vessel Charterer Charter expiry Gross rate/day, USD Bulk Sandeord Koch Shipping Dec 26 - Dec 27 Index linked + premium + scrubber benet Bulk Sanago Koch Shipping Dec 26 - Dec 27 Index linked + premium + scrubber benet Bulk Shenzhen Koch Shipping Dec 26 - Dec 27 Index linked + premium + scrubber benet Bulk Sydney Koch Shipping Dec 26 - Dec 27 Index linked + premium + scrubber benet Bulk Sao Paulo European charterer Apr - Jun 25 Index linked + premium + scrubber benet Bulk Santos European charterer Apr - Jun 25 Index linked + premium + scrubber benet 6. REVENUES The Company recognized revenues from me charter contracts (described in note 8) during the twelve months ended December 31, 2024. The Company has recognized US$0.3 million (US$0.2 million as of December 31, 2023) of revenues which was not invoiced as of December 31, 2024, and the amount is recognized as Accrued revenues. In addion, the Company has invoiced US$0.7 million (US$2.3 million as of December 31, 2023) to customers which was not earned as of December 31, 2024, and the amount is recognized as Other current liabilies. During the twelve months ended December 31, 2024, the Company recognized US$1.5 million (US$1.1 million during the twelve months ended December 31, 2023) in management fee as Other operang income. During the twelve months ended Decem- ber 31, 2023, the Company recognized US$2.2 million in insurance selement as Other operang income. ANNUAL REPORT 2024 25 NOTES 9. VESSELS AND EQUIPMENT, NET Vessels and (In millions of US$) Capital expenditures - - - Capital expenditures - 2.6 2.6 Asset disposals (95.5) - (95.5) Cost as of December 31, 2024 287.9 2.6 290.5 Depreciaon 11.6 - 11.6 Depreciaon 9.2 0.3 9.5 Asset disposals - accumulated depreciaon (12.4) - (12.4) Balance as of December 31, 2024 245.1 2.3 247.4 See note 11 for informaon on sale of the vessels Bulk Shanghai and Bulk Seoul. 10. RELATED PARTY TRANSACTIONS In March 2023, Magnus Halvorsen, Chairperson of the Company, exercised 400,000 share opons at a strike price of US$4.985. In November 2023, Kate Blankenship, previous Director of the Company, exercised 75,000 share opons at a strike price of US$4.445. Kate Blankenship resigned as a Director on September 11, 2024, and consequently is not considered a related party. In December 2023, Vidar Hasund, Chief Financial Ocer of the Company, exercised 75,000 share opons at a strike price of US$4.445. ANNUAL REPORT 2024 26 NOTES Term loan facility In April 2024, the Company signed an agreement to renance and amend its US$162.5 million Term Loan Facility maturing in March 2027. Pursuant to the new agreement, the Company repaid US$27.5 million of the outstanding amount under the Term Loan Facility, which was replaced with a new non-amorzing US$112.5 million Loan Facility maturing in April 2029. The new Loan Facility has an interest rate of SOFR+195 bps in margin. The term loan facility contains the following nancial covenants for the Group (i) value adjusted equity shall be equal to or greater than 30% of value adjusted total assets, (ii) working capital (dened as consolidated current assets minus consolidated current liabilies (excluding current poron of long term debt and subordinated shareholder loans)) shall at all mes be no less than US$0 and (iii) free and available cash shall at all mes be the greater of (a) US$1.25 million per delivered vessel and (b) 5% of total debt. In addion, the fair market value of our vessels shall at all mes be at least 140% of the aggregate outstanding loans. As of December 31, 2024, we were compliant with the covenants and our obligaons under the term loan facility agreement. The vessels are pledged upon draw down of the loan facility, with cross collateral agreements in place for each vessel within the term loan facility. In March 2024, the Company terminated the interest rate swaps and received a cash selement of approximately US$2.9 million. The amount was transferred to the statements of operaons reducing interest expense unl original maturity of the interest rate swaps in August and September 2024. Sale and leaseback arrangement In October 2019, the Company entered into a sale and leaseback arrangement with Ocean Yield for its two Newcastlemax vessels, Bulk Seoul and Bulk Shanghai. The vessels were delivered from the yard on October 30, 2019, and November 6, 2019, respecvely, and were at delivery sold to Ocean Yield for a price per vessel of US$42 million, net of a US$5 million sellers’ credit. The vessels were chartered back to the Company on thirteen year bareboat charters which included a purchase obligaon at the end of the respecve charter peri- ods and certain opons to either sell or acquire the vessels during the charter periods. The bareboat charter hire was US$6,575 per day plus an adjustment based on LIBOR plus a margin of 450 basis points. Since the Company had purchase obligaons at the end of the char- ter periods, the Company accounted for the transacon as a nancing arrangement. The Company pledged the shares in the subsidiaries chartering the vessels back from Ocean Yield and issued certain guarantees in line with standard terms contained in sale and leaseback transacons. 11. DEBT (In millions of US$) December 31, 2024 December 31, 2023 Pledged Term loan Tranche I (“Bulk Sandeord”), balloon payment April 2029 17.9 22.9 Term loan Tranche II (“Bulk Sanago”), balloon payment April 2029 18.3 23.3 Term loan Tranche V (“Bulk Shenzhen”), balloon payment April 2029 18.7 23.8 Term loan Tranche VI (“Bulk Sydney”), balloon payment April 2029 18.8 23.7 Term loan Tranche VII (“Bulk Sao Paulo”), balloon payment April 2029 19.2 24.2 Term loan Tranche VIII (“Bulk Santos”), balloon payment April 2029 19.6 24.6 Other long term debt Vessel nancing (“Bulk Seoul”) - 32.0 Vessel nancing (“Bulk Shanghai”) - 32.0 Less current poron long term debt - (14.8) Less deferred loan costs (2.4) (2.6) ANNUAL REPORT 2024 27 NOTES 12. FINANCIAL ASSETS AND LIABILITIES Foreign currency risk The majority of our transacons, assets and liabilies are denominated in United States dollars. However, we incur expenditure in cur- rencies other than United States dollars, mainly in Norwegian kroner. There is a risk that currency uctuaons in transacons incurred in currencies other than the funconal currency will have a negave eect on the value of our cash ows. We are then exposed to currency uctuaons and we may enter into foreign currency swaps to migate such risk exposures. Fair values The guidance for fair value measurements applies to all assets and liabilies that are being measured and reported on a fair value basis. This guidance enables the reader of the nancial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the informaon used to determine fair values. The same guidance requires that assets and liabilies carried at fair value should be classied and disclosed in one of the following three categories based on the inputs used to determine its fair value: Level 1: Quoted market prices in acve markets for idencal assets or liabilies; Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data; Level 3: Unobservable inputs that are not corroborated by market data. The carrying value and esmated fair value of our cash and nancial instruments are as follows: December 31, 2024 December 31, 2023 (In millions of US$) Assets Cash and cash equivalents 1 16.1 16.1 30.7 30.7 Restricted cash 1 0.1 0.1 0.1 0.1 Other current assets (interest rate swaps) 2 - - 4.0 4.0 Current poron of long-term debt 2 - - 14.8 14.8 Long-term debt 2 112.5 110.1 193.4 189.1 Financial instruments included in the consolidated nancial statements within ‘Level 1 and 2’ of the fair value hierarchy are valued using quoted market prices, broker or dealer quotaons or alternave pricing sources with reasonable levels of price transparency. There have been no transfers between dierent levels in the fair value hierarchy during the periods presented. Concentraons of risk There is a concentraon of credit risk with respect to cash and cash equivalents to the extent that all of the amounts are carried with Dan- ske Bank and Nordea Bank. However, we believe this risk is remote, as Danske Bank and Nordea Bank are established nancial instuons. In February 2024, the Company signed an agreement to sell the vessels Bulk Shanghai and Bulk Seoul to an unaliated third party for a total consideraon of US$127.5 million. The Company exercised its opon with Ocean Yield to eectuate the sale. Bulk Shanghai and Bulk Seoul were delivered to the new owner on March 20, 2024, and April 4, 2024, respecvely, and the sale and leaseback arrangements were seled. The Company recognized a total gain of US$40.9 million for the sale of Bulk Shanghai and Bulk Seoul during the twelve months ended December 31, 2024. The outstanding long-term debt as of December 31, 2024, is repayable as follows: (In millions of US$) April 2029 112.5 ANNUAL REPORT 2024 28 NOTES 13. SHARE BASED PAYMENT COMPENSATION In April 2022, the Board approved a grant of 60,000 share opons to employees. Each share opon gives the holder the right to purchase one share in the Company at an exercise price of US$18 per share. The exercise price will be reduced by any dividends and cash distribuons paid. The share opons vest equally over a three year vesng period, commencing one year from date of grant and will expire ve years aer the grant date. The total esmated cost is approximately US$321k and will be expensed over the requisite service period. US$107k has been expensed in the twelve months ended December 31, 2024 (US$107k during the twelve months ended December 31, 2023). In September 2024, the Board approved a grant of 115,000 share opons to directors and employees. Each share opon gives the holder the right to purchase one share in the Company at an exercise price of US$16.7 per share. The exercise price will be reduced by any dividends and cash distribuons paid. The share opons vest equally over a three year vesng period, commencing one year from date of grant and will expire ve years aer the grant date. The total esmated cost is approximately US$345k and will be expensed over the requisite service period. US$70k has been expensed in the twelve months ended December 31, 2024. Granted - - - - Exercised (650 000) 0.5 4.8 9.5 Exercisable 20 000 4.0 16.8 13.3 Forfeited - - - - Granted 115 000 5.0 16.7 12.9 Exercised - - - - Exercisable 20 000 3.0 15.7 13.3 Forfeited - - - - The exercise price of US$18 per share for the share opons granted in April, 2022 was reduced with total cash distribuons and dividends of US$3.58, US$0.82 and US$1.12 for 2024, 2023 and 2022, respecvely. The exercise price of US$16.7 per share for the share opons granted in September 2024, was reduced with total dividends of US$0.66 for 2024. The fair value of the share opons granted in September 2024 and April 2022 was calculated using the Black-Scholes method. The signi- cant assumpons used to esmate the fair value of the share opons are set out below: 2024 2022 Grant date September 1 April 7 Risk-free rate 3.84% 2.66% Expected life 4.5 years 4 years Expected future volality 32% 61% ANNUAL REPORT 2024 29 NOTES 14. COMMITMENTS AND CONTINGENCIES The Company insures the legal liability risks for its shipping acvies with Assuranceforeningen SKULD and Assuranceforeningen Gard Gjensidig, both mutual protecon and indemnity associaons. As a member of these mutual associaons, the Company is subject to calls payable to the associaons based on the Company’s claims record in addion to the claim records of all other members of the associaons. A conngent liability exists to the extent that the claims records of the members of the associaons in the aggregate show signicant deterioraon, which result in addional calls on the members. To the best of our knowledge, there are no legal or arbitraon proceedings exisng or pending which have had or may have signicant eects on our nancial posion or protability and no such proceedings are pending or known to be contemplated. 15. COMPENSATION During the year ended December 31, 2024, we paid our execuve ocers (CEO, CFO, CTO, COO and CCO) aggregate compensaon of US$1.8 million (2023: US$1.3 million). In addion to cash compensaon, we recognized US$150k during the year ended December 31, 2024 (2023: 89k), relang to share opons granted to execuve ocers. As of December 31, 2024, the members of Management and Directors that hold shares and share opons of the Company are set out below: Lori Wheeler Naess Director - 7 500 Viggo Bang-Hansen Director - 7 500 Magnus Halvorsen* Chairperson 2 032 118 20 000 Herman Billung CEO 10 000 50 000 Vidar Hasund CFO 90 000 20 000 Lars-Chrisan Svensen CCO 4 700 30 000 Chrisan Dahll COO 15 130 15 000 Peer Lalic CTO - 15 000 * 1,527,026 shares held through his controlled company MH Capital AS, and 505,092 shares held privately. 12 months to 12 Months to (In millions of US$) December 31, 2024 December 31, 2023 Statutory audit fee 0.2 0.2 Other non-auding services - - Total fees 0.2 0.2 ANNUAL REPORT 2024 30 NOTES The Bank of New York Mellon SA/NV (nominee) 1 892 855 8.28 Avanza Bank AB (nominee) 1 580 927 6.91 J.P. Morgan Securies LLC (nominee) 1 554 327 6.80 MH Capital AS 1 527 026 6.68 Brown Brothers Harriman & Co. (nominee) 1 433 428 6.27 State Street Bank and Trust Comp (nominee) 708 277 3.10 Clearstream Banking S.A. (nominee) 683 047 2.99 Cibank, N.A. (nominee) 602 615 2.63 Verdipapirfondet Alfred Berg Gamba 573 077 2.51 Magnus Halvorsen 505 092 2.21 Skandinaviska Enskilda Banken AB (nominee) 436 147 1.91 DNB Bank ASA 417 031 1.82 Nordnet Bank AB (nominee) 407 506 1.78 Verdipapirfondet DNB Smb 405 679 1.77 Danske Bank A/S (nominee) 368 870 1.61 DNB Luxembourg S.A. (nominee) 357 340 1.56 Nordnet Livsforsikring AS 345 188 1.51 Masira Inversion SIL 330 756 1.45 DZ Privatbank S.A. (nominee) 293 286 1.28 Svenska Handelsbanken AB (nominee) 289 590 1.27 Total 14 712 064 64.33 Other shareholders 8 158 842 35.67 Total 22 870 906 100.00 16. SHAREHOLDERS’ EQUITY At the 2023 Annual General Meeng held May 9, 2023, it was approved to reduce the Share Premium Account (Recognized as Addional paid-in capital in the Consolidated Statements of Changes in Shareholders’ Equity) of the Company by US$1,594,000 and to credit the same amount resulng from the reducon to the Company’s Contributed Surplus account, with eect from May 9, 2023. At the 2024 Annual General Meeng held May 7, 2024, it was approved to reduce the Share Premium Account (Recognized as Addional paid-in capital in the Consolidated Statements of Changes in Shareholders’ Equity) of the Company by US$889,250 and to credit the same amount resulng from the reducon to the Company’s Contributed Surplus account, with eect from May 7, 2024. Share issue on exercise of opons March: US$4.985 per share 400 000 Share issue on exercise of opons September: US$4.725 per share 100 000 Share issue on exercise of opons November: US$4.445 per share 30 000 Share issue on exercise of opons December: US$4.445 per share 45 000 Share issue on exercise of opons December: US$4.445 per share 75 000 ANNUAL REPORT 2024 31 NOTES 17. SUBSEQUENT EVENTS Dividends and cash distribuons In January 2025, the Company declared a cash distribuon of US$0.05 per share for December 2024. In February 2025, the Company declared a dividend of US$0.03 per share for January 2025. In March 2025, the Company declared a cash distribuon of US$0.01 per share for February 2025. 2020 BULKERS LTD. ANNUAL REPORT 2024 32 RECONCILIATION OF ALTERNATIVE PERFOR MANCE MEASURES RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES 12 months to 12 months to (In millions of US$) December 31, 2024 December 31, 2023 Depreciaon and amorzaon (9.5) (11.6) EBITDA 93.2 49.3 12 months to 12 months to (In millions of US$, except per day data) December 31, 2024 December 31, 2023 Address commission (2.5) (2.5) Fleet operaonal days 2 328 2 920 The European Securies and Markets Authority (“ESMA”) issued guidelines on Alternave Performance Measures (“APMs”) that came into force on July 3, 2016. The Company has dened and explained the purpose of the following APMs: EBITDA, when used by the Company, means operang prot (loss) excluding depreciaon and amorzaon. The Company has included EBITDA as a supplemental disclosure because the Company believes that the measure provides useful informaon regarding the Compa- ny’s ability to service debt and pay dividends and provides a helpful measure for comparing its operang performance with that of other companies. Average me charter equivalent rate, gross, when used by the Company, means me charter revenues and voyage charter revenues excluding address commission, less voyage charter expenses and adjusted from “load to discharge” basis to “discharge to discharge” basis and divided by operaonal days. The Company has included Average me charter equivalent rate, gross, as a supplemental disclosure because the Company believes that the measure provides useful informaon regarding the eets’ daily income performance. ANNUAL REPORT 2024 33 AUDITORS’ REPORT PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo T: 02316, org. no.: 987 009 713 MVA, www.pwc.no Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap To the shareholders and Board of Directors of 2020 Bulkers Ltd. Independent Auditor’s Report Report on the Audit of the Financial Statements Opinion We have audited the consolidated financial statements of 2020 Bulkers Ltd. and its subsidiaries (the Group), which comprise the balance sheets as at December 31, 2024, statements of operations, comprehensive income, cash flows and changes in shareholders’ equity for the year then ended, and notes to the financial statements, including a summary of material accounting policies. In our opinion the accompanying consolidated financial statements give a fair presentation of the financial position of the Group as at December 31, 2024, and its financial performance and its cash flows for the year then ended in accordance with the accounting principles generally accepted in the United States of America (USGAAP). Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of the Group for 8 years from the incorporation of the Group on September 26, 2017, for the accounting year 2017. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. The Group’s business activities are largely unchanged compared to last year. We have not identified regulatory changes, transactions or other events that qualified as new key audit matters. The Impairment Assessment for Vessels and Equipment has the same characteristics and risks this year as the previous year and consequently have been an area of focus also for the 2024 audit. ANNUAL REPORT 2024 34 2 / 5 Key Audit Matters How our audit addressed the Key Audit Matter Impairment Assessment for Vessels and Equipment Refer to note 2 (Accounting policies) and note 9 (Vessels and equipment, net) where management explains how they assess the value of the vessels. The Group holds six Newcastlemax vessels on the balance sheet within Vessels and equipment, net, which transport dry cargoes globally. The vessels have a combined carrying amount of USD 247.4 million. The Group has not recognized an impairment on the Newcastlemax vessels in 2 024. Indicators of impairment for the vessels were assessed and not considered present during 2024. As explained in the notes, management considered, among others, the conditions in the dry bulk freight market, estimated fair value of the vessels, less cost of sale, and the market capitalization of the Group against the net book value of equity, which gave no indication of impairment. As a result of the above factors, management has not performed an impairment test. In their assessment of impairment indicators, management considers each vessel to be the lowest level for which an entity can separately identify cash flows that are largely independent of the cash flows of other assets and liabilities, and consequently we assessed indicators for impairment on the same basis. We focused on this area due to the significant carrying value of the vessels and the judgement inherent in the assessment of indicators of impairment. We evaluated and challenged management’s assessment of indicators of impairment and the process by which this was performed. We assessed management’s accounting policy against US GAAP and obtained explanations from management as to how the specific require ments of the standards, in particular ASC 360, were met. We also assessed the consistency year on year of the application of the accounting policy. To assess the estimates for fair value less costs of disposal as an indicator of impairment, management compiled broker valuation certificates for the vessels. We satisfied ourselves that the external brokers had both the objectivity and the competence to provide the estimate. To assess this, we corroborated that, under the terms of the bank lending facilities, specific brokers are identified as being approved for use, for purposes of minimum value clause covenant reporting. Management used brokers from thi s approved list. We interviewed selected brokers to understand how the estimates for fair value were compiled. We also satisfied ourselves that the brokers were provided with relevant facts in order to determine such an estimate, by testing key inputs such as build date, build location and certain key specifications back to the ships register. We found that management sufficiently understood the valuations from third party brokers, including the methodology used in arriving at the valuations, performing sen sitivity analysis, and performing comparisons to other available market data where possible. Management has also used the market intelligence obtained from the sale of two vessels to confirm the valuations obtained. In order to assess each of the assumptions in the impairment indicator assessment, we interviewed management and challenged their assumptions. For certain key assumptions we specifically used current and historical external market data to corroborate the f reight rates assessed by management. We challenged management on their assessment of market rates. We also corroborated management’s assessment with external market reports where possible. We considered that freight rates used by management were within an AUDITORS’ REPORT ANNUAL REPORT 2024 35 3 / 5 appropriate range and changes did not lead to any indication of impairment. We read note 2 (Accounting policies) and note 9 (Vessels and equipment, net) and assessed these to be in line with the requirements. No matters of consequence arose from the procedures above. Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the consolidated financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other information accompanying the financial statements. In connection with our audit of the consolidated financial statements, our responsibility is to read the Board of Directors’ report and the other information accompanying the consolidated financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other information accompanying the consolidated financial statements and the consolidated financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the consolidated financial statements otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the consolidated financial statements. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report ● is consistent with the consolidated financial statements and ● contains the information required by applicable statutory requirements. Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance and Corporate Social Responsibility. Responsibilities of Management for the Financial Statements Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with accounting principles generally accepted in the United States of America, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. AUDITORS’ REPORT ANNUAL REPORT 2024 36 4 / 5 As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ● identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ● obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. ● evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. ● conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern. ● evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a fair presentation. ● obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. AUDITORS’ REPORT ANNUAL REPORT 2024 37 AUDITORS’ REPORT 5 / 5 Report on Other Legal and Regulatory Requirements Report on Compliance with Requirement on European Single Electronic Format (ESEF) Opinion As part of the audit of the consolidated financial statements of 2020 Bulkers Ltd., we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name 2020 Bulkers Ltd. Annual Report 2024.xhtml, have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format. In our opinion, the consolidated financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF regulation. Management’s Responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. Auditor’s Responsibilities Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material respects, the consolidated financial statements included in the annual report have been prepared in compliance with ESEF. We conduct our work in compliance with the International Standard for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial information”. The standard requires us to plan and perform procedures to obtain reasonable assurance about whether the financial statements included in the annual report have been prepared in compliance with the ESEF Regulation. As part of our work, we have performed procedures to obtain an understanding of the Group’s processes for preparing the financial statements in compliance with the ESEF Regulation. We examine whether the financial statements are presented in XHTML-format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Oslo, March 10, 2025 PricewaterhouseCoopers AS Peter W. Wallace State Authorised Public Accountant (This document is signed electronically) ANNUAL REPORT 2024 38 AUDITORS’ REPORT Signers: Name This document package contains: - Closing page (this page) - The original document(s) - The electronic signatures. These are not visible in the document, but are electronically integrated. This le is sealed with a digital signature. The seal is a guarantee for the authenticity of the document. Method Date 2025-03-10 13:13BANKIDWallace, Peter William Auditor's report 2020 BULKERS LTD. OSLO OFFICE 2020 Bulkers Management AS Tjuvholmen allé 3, 9th oor, 0252 Oslo, Norway +47 22 83 30 00 BERMUDA OFFICE 2020 Bulkers Ltd. S.E. Pearman Bldg., 2nd oor, 9 Par-la-Ville Road Hamilton HM 11, Bermuda +1 441 542 9329 [email protected] OFFICES
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