Good morning, and welcome to the presentation of the Odfjell first quarter results. We are sending this live from our new studio here at our headquarters in Bergen. My name is Kristian Mørch. I am the CEO of Odfjell, but this is unfortunately gonna be my last appearance as the CEO because tomorrow I will be handing over the CEO responsibility to Harald Fotland. Harald, he will be available also for questions, and you will see him towards the end of this presentation. Seven years in Odfjell, it has been an amazing journey. It has been tough, but it has been rewarding. Odfjell today stands on what I think is the most competitive platform in our industry.
With the markets that are coming the way they are, which you will see in a moment, then I think good things are in front of us and the company is ready to be handed over to Harald. I also want to say that we are gonna take questions towards the end of the presentation. There should be a button on the top right-hand corner of your screen, I believe. If you post questions throughout the presentation, then Terje Iversen, the CFO of Odfjell, myself, and Harald Fotland, incoming CEO of Odfjell, will be happy to take any questions that you may have towards the end of the presentation. The agenda for today is I will take you through the highlights of the quarter.
As usual, Terje will come on and take you through the financials. We will briefly touch on operational review and our strategy. Not so much strategy this time. I will finish off with the prospects and the market update. As I mentioned, we would be happy to take any questions that you might have in the following Q&A. The highlights for the first quarter is that we are pleased with our first quarter results. Time charter earnings in Odfjell Tankers came in at $136 million, which is actually unchanged from the previous quarter, but we had fewer ship days to produce those numbers. So the markets are up compared to the previous quarter.
The net result contribution from terminals was $3 million, which is in line with the previous quarter. That gave us an EBIT of $27 million compared to $35 million the previous quarter, and a net result of $11 million compared to $15 million in the previous quarter. If you adjust those numbers for one-offs, then the first quarter results net result was $9 million, which was in line with the $10 million that we reported in the fourth quarter of 2021. Also positively this quarter is that our COA renewal rates were up 7% on average during the quarter. Actually, our contract coverage during the quarter was down slightly, down to 49%, which suited us well because the spot markets are firm.
There's no alarm bells going off. I'll speak more about the contract coverage in a moment. Finally, we also announced that the board is recommending a dividend of NOK 1 per share for fiscal year 2021, which is to be approved by the AGM, which is happening later on today. The board has also approved a dividend policy for the company where Odfjell will pay 50% of net income adjusted for extraordinary items on a semiannual basis. Terje, he will speak more about that when he comes on. Finally, as I said, Harald Fotland has been appointed as the company's new CEO.
I have been working with Harald in his capacity as CEO for the last seven years, and I can assure you that there's no other person who is better suited for the job than Harald, and I'm very happy to be handing over the reins to Harald at the close of business today. As you can see in the bottom right-hand corner, the quote is that we are pleased with our first quarter results. It reflects the competitive strength of the company. The chemical tanker market actually started the quarter not in a too high fashion, but it firmed throughout the quarter, and the quarter ended on a positive note. That strengthening of markets are continuing, so we are expecting to report stronger results in the second quarter.
At this point, I will hand it over to Terje, and then I will come back for the operational review.
Thank you, Kristian. I will, as usual, start with the P&L income statement this quarter. As you can see, our time charter earnings ended at $135.6 million, very comparable to the fourth quarter in 2021. We saw a weak start of the year, but that was offset by improving tanker rates towards the end of the quarter. Adjusting for fewer days, fewer calendar days and also fewer vessels, actually time charter earnings improved with around $3 million compared to the fourth quarter 2021. Time charter expenses very much in line with the fourth quarter. Also, OpEx continued to be quite stable. Net results from associates and joint ventures ended at $3.3 million compared to $2.6 million.
We got a good contribution from the terminal in the U.S., insurance proceeds of $2.4 million, of course impacting the figures in this quarter. If we adjust for depreciation of surplus values that we have on this joint venture, the terminals deliver a net result of around $5 million in the first quarter. D&A increased compared to the fourth quarter to $80 million. Main reason for the increase being that the fourth quarter last year, we had some one-offs that reduced the D&A compared to a normal level. We see we are more on a stable, normal level in the first quarter this year compared to what we should expect going forward. After operating income, we are at $67.4 million in EBITDA compared to $77.3 million.
Depreciation decreased from $43.6 to $4.7. Main reason, of course, we have slightly fewer vessels with the regional vessels being divested, but main reason being that we have reassessed the residual values. Which we do every year, end of year, due to increased steel prices and increased nickel prices. So it would be slightly reduction than in the depreciations going forward. No capital gain this quarter. That led to an EBIT of 26.7 compared to 35.3 in the fourth quarter. The main reason for the reduction is then we had this one-offs in the fourth quarter with $6 million from the war insurance. Also we had a quite substantial reduction in G&A, which I just touched upon.
On the other hand, we got kind of a $3 million improvement due to the decreased depreciation this quarter. That leaves us the net result of $11 million compared to $50 million in the fourth quarter. As Kristian mentioned, if you adjust for financials and non-recurring items, we are very much at the same level that we saw in the fourth quarter of 2021. Balance sheet, not that much to talk about. We have a cash position $61.5 million compared to $73.5 million, but if include undrawn loan facilities, we have the cash available at $123 million compared to $109 million end of fourth quarter.
IFRS adjusted equity is around 31%, compared to 29% end of last year, of course, impacted by the net result being positive, but also we had other comprehensive income, quite good figures due to the mark to market of our derivatives, mainly being interest rate hedge that we have done previously. Also on the balance sheet, we see that the equity is increasing, of course, but on the debt side, we have repaid in total this quarter around $55 million. Cash flow statement, we saw that operating cash flow decreased somewhat compared to the fourth quarter, under $29.7 million. Main reason being that we had quite good operating cash flow in the fourth quarter with these one-offs, but which I just mentioned.
On the investment side, we sold three regional vessels, giving proceeds of $21 million. Actually, that was more or less cash neutral transactions because we had around same amount of debt attached to these vessels, which was prepaid when we divested the vessels. Then we had investment in non-current assets being drydockings and also some energy-saving devices of $5.1 million this quarter compared to $6.8 million in the fourth quarter. That led to -$15.5 million in cash flow from investment activities. On the debt side, as I said, we have been quite active. We have done some refinancing. That is why we see new interest-bearing debt. On the other side, we have repaid existing debt of $123.6 million.
Net, we have paid down around $55 million. The new interest-bearing debt is actually refinancing of some vessels where we have extended the profile and, of course, also the maturity, but also seeing lower interest cost on these, this structure compared to where it was originally. After cash flow from investment activity, we have a net cash flow of negative $12 million compared to $18.8 end of fourth quarter. That leads to cash and cash equivalent of $61.5 compared to $73.5. But if you include undrawn loan facilities, we have an increase in available cash compared to end of last year. On a long-term basis, actually the free cash flow has developed.
As you can see, it has increased quite good compared to where it was one or two years back. We have a positive free cash flow and has been increasing for the last quarters. If you look at the rolling basis, we had a free cash flow in the fourth quarter or the first quarter of around $45 million. If you exclude debts paid on right of use of assets, we have around $30 million. The main reason for the cash flow going slightly down, as I said, we had quite a good development on the operational cash flow in the fourth quarter, while we didn't see that same effect in the first quarter this year.
We also saw increase in working capital in the first quarter due to increased gross revenue and also increase in bunker prices. Here we show the time charter earnings compared to the cash break-even. As you can see, this quarter, we delivered time charter earnings per day of $22,368 per day, up from $20,868 in the fourth quarter. This is above the expected annual cash break even for 2022 of $21,800 per day. We sold some vessels, as I mentioned, and that actually increased our time charter earnings per day because these vessels were smaller vessels delivering a lower average time charter earnings than the larger vessels in our fleet.
Cash break-even for the quarter ended at 21,476 compared to 20,308 in the fourth quarter, and $21,192 per day in 2021. An increase again is due to reversal of D&A provisions and fewer dockings in the fourth quarter. Going forward, we will see effect from lower debt, taking down our cash break-even, also improved terms on the debt, we expect. While on the other hand, we will see interest benchmark rates will pull in the opposite direction with increasing labor rates and increasing day rates in the market. Together with the annual accounts, we announced the dividend policy.
As also Kristian Mørch mentioned, main takeaways is that we intend to pay out 50% of net income adjusted for exceptional items, and also that dividends will be paid out semiannually. The board of directors will propose to a general meeting or decide on the timing on the final size of the dividend and always contingent on the financial strength of the company. Based on results in the first quarter and also the activity we see into the second quarter, there should be expectation for a positive development and a positive net result for the first half year. We should be in a good position to pay dividend already in August this year based on results in the first year. Of course, all that contingent on the financial strength of the company.
Just a slide on the bunker expenses. As most of you know, the oil price has increased, and we also see that the bunker cost or the bunker price in the market is increasing. But we see the same as we have shown for many quarters, that we have good effect from the bunker adjustment clauses in our contracts. So if you knock out that, the bunker cost that we have to book in our P&L is quite stable. Actually, comparing to the fourth quarter, we see an increase in net bunker cost from $44.9 million to $48.1 million, increase of $3.2 million. Looking behind the figures, the main reason or the only reason is that we don't have any financial hedging in the first quarter.
The $3.2 that we did took a positive effect in the fourth quarter was not the same in the first quarter because we don't have any financial hedging in the first quarter. Also going forward, we don't have any financial hedging in the balance sheet as of today. Debt developments, not that much new to tell about. In the second quarter, we have some balloons maturing. Of course, that has been taken care of already. We have a bond maturing in mid-June of $33 million US dollar equivalent that we repaid based on the cash we have on the balance sheet and also the proceeds we have got on a drawdown on new refinanced mortgage facilities.
We are in a good position with that and going forward, and we don't have any big maturity loan maturing before third quarter 2023. We are on a good path to reduce our debt, as we show on the lower part of this slide. We are repaying around $100 million per year on our gross interest-bearing debt. And we haven't ensured any refinancing of bond in this slide, so that will depend, of course, on the earnings and the market. But we are on a good path to come with deleveraging of our balance sheet and also reducing the cash requirement for the company. I will leave the floor to you again, Kristian.
Thank you, Terje. Operational review. First of all, I want to come back to the COA and volume development, as I spoke about during the introduction. If you look on the bottom left-hand side, you can see that our COA coverage fell to 49% during the quarter. This was driven mainly by port congestions and redelivery of tonnage, which means that when you're doing changes to your sailing pattern, then you don't have so many sailings and so on. At the same time, the spot markets were higher, so that takes a larger share. It is nothing. We're not signaling that we are dropping below where it is today, but that was the explanation for the first quarter.
As I also mentioned in the middle, on the bottom, you can see that the COA renewal rate this quarter was up by 7%, which is a very good sign. On the right-hand side, you can see that our total amount of tonnages of cargo carried is basically stable with what it was. You can see that the volumes carried by pool tonnage is dropping, and that's because we are redelivering some of the MRs that go into the Hafnia fleet. When you look at the rates and the cargo mix, you can see that the ODFIX this quarter is up by 3.6%, whereas the Clarksons Chemical Tanker Spot Index was 0.0. We have triple-checked that number.
I think the reason for that being flat was that the quarter started very slowly, actually on a negative trend, and then it picked up towards the end of the quarter. For the first quarter, it was zero for the Clarksons index. Since the end of the first quarter until today, the Clarksons Spot Index is up by 9.8%. That is also, of course, picking up the increases in our markets. We had some volume increases for our specialties, whereas both on the EasyChem and on Veg Oils, it was basically almost the same in terms of volumes, but something is happening, especially in the Veg Oils, that I'll speak about in a moment.
On CPP, those of you following the product tanker markets. Both for EasyChem and Veg Oil and for CPP, we are experiencing far less competition from swing tonnage, which is of course helping the real supply situation and is one of the reasons why our markets are firming at the moment. Very briefly about the Russia-Ukraine war. We don't call any Russian or Ukrainian ports frequently. Our last call in Ukraine was back in March 2020, and that was the only port call we have done in the last seven years.
Ukraine is not a country we call, and our last call in Russia was back in 2016 and in 2020 on the Pacific coast of Russia. We don't lift any Russian-related cargoes. We don't have any trades into the Black Sea or into the Russian part of the Baltic Sea and also not on the Pacific Coast. From a real trade perspective, this is not something that has a direct impact on how we trade in Odfjell. For the tank terminals, all the terminals that managed by us continue to maintain safe and continuous operation throughout the first quarter. The first quarter EBITDA ended at $9.4 million compared to $10.3 million in the fourth quarter of last year.
Both our U.S. terminals continue to perform well, and we are presently operating at near full capacity. The same is true in our terminal in Antwerp continues to deliver strong performance with a commercial occupancy of 100%, whereas our terminal in Korea is doing better, but is not, is of course suffering from some of the shutdowns and the COVID effects that are still hitting many of the Asian countries. It stayed consistent with the same quarter in 2021. The outlook for the terminals in U.S. and Europe remains positive with strong demand for storage capacity, and we expect the markets in Asia to gradually improve as well.
We can say about during the first quarter, we took a final investment decision for a new 36,000-cu m tank pit at our terminal in Antwerp. In Houston, the construction has started of Bay 13, which we spoke about on previous presentations. Things are developing as expected in our terminals site. Now I'll talk about prospects and market update. The first slide is a little bit busy, but one of the things that I wanted to touch briefly upon is when you look on the left-hand side, we have been taking a look at direct impact on chemical and veg oil trade flows from Russia and Ukraine. If you look at the Russian and Ukraine export volumes, global share of chemicals, then Russia is 2% and Ukraine is basically zero.
There is no real disruption to the global flow of chemicals because of this crisis. That picture is different when you look at the Veg Oils because Russia supplies 7% of the world's veg oil and Ukraine provides 12% of the global veg oil production. That is mainly in the sunflower seed oil. That supply has to be met from elsewhere, which means that suddenly you have Veg Oils market picking up. You have Veg Oils trading longer distances from the Far East and so on. That is causing some imbalances. Also, the Russian or the Western ban on Russian oil and refined products is, of course, also impacting the trades, and that is certainly something that's impacting the clean markets quite dramatically.
You have to have some trade changes which is boosting real demand. With supply as tight as it is, both in chemicals and in product tankers, then you're seeing what you're seeing on the right-hand side. You're seeing CPP markets firming. You are seeing palm oil markets firming, and you are seeing all the trades in the global chemical trade also firming. We are seeing a very robust increase in the global markets. This is a closer look at what happens to the chemical trades. These are dollar per ton rates that comes from the Clarksons.
On the left-hand side, you're looking at the trades west of Suez, and on the right-hand side, you're looking at trades east of Suez. It's clear when you look at this picture that since the turn of the year, those markets have started to pick up quite significantly, and we're seeing that trend continuing. I mentioned it already. Supply is very much under control. Very low deliveries, very few new orders being placed. Some scrapping going on. Basically we are looking at a supply picture that is zero or maybe even contracting during next year. With all the uncertainty about new technology and decarbonization and the shutdown in China, most owners are hesitant to place new orders.
That supply picture is the strongest picture we've been looking at for many, many years. With demand growing, that's a really good part of the fundamental story. That means that we are now above 90% utilization. We are somewhere between 91%-95%. By next year, we believe we are gonna be 95%, and that last time that happened was back in 2003, 2004. That was the beginning of quite a high, quite a long upturn in the global chemical trade. Supply is not gonna be available for the next coming years, and the demand story, as I said, is quite strong. We really have been saying that for some years.
We have been wrong about the timing, but this is basically what we have been saying, that the supply situation will tighten and demand for long-haul chemical transportation is strong and healthy. That's why we are guiding also positively for the next quarter. In summary, TCE for our results stayed unchanged for the first quarter. Relatively weak start to the quarter ended strongly and that continued throughout the quarter. In tankers, our results improved in the second quarter due to the tightening markets across all trade lanes starting from March. In terminals, we continued to perform well, recording positive occupancy growth and healthy activity levels. Our markets remain strong throughout 2022 and beyond. We think the market balance is tight.
We have not seen that tight a fundamental picture since 2007, 2008. That's why we are leaning out and saying, or we're not leaning out. We are confident that the strong market is now driving how we see the future, and we expect to report stronger results in the second quarter. Those were the last official words for me as the CEO. Harald will come in also during the Q&A. On a personal note, I wanna thank everybody who has been supporting the company, and I hope that you will give the same positive support to Harald and the team and the company is in the best possible shape and in the best possible hands for the future. Thank you very much.
Did we have any questions?
Yes. To the Q&A session, and thank you, Kristian. The first question that we have received is for Terje. You have $123 million of available liquidity and guiding for an even stronger second quarter that should increase further. Apart from the 50% in dividends, will this only be used to pay down the bond, or do you have other potential uses for this surplus cash?
In the first round, of course, we will use the cash available to repay the bond maturing in June already. Going forward, if we continue to see improving results and the same good cash flow as we have today, that will enable us to continue our path to deliver and also to decrease the cost of capital and the cash break-even. As I said before several times, we have an ambition to reduce cash break-even to be at a sustainable level that will mean around $19,000-$18,000 per day. That will enable us to approach that target in the coming years.
Thank you. To Kristian. Are you now being more active in the CPP market considering the strength we see there?
No, I don't think we are. The CPP market is not a natural hunting ground for Odfjell SE. We have seen also what we saw last year in the second quarter when the CPP markets really took off. Of course we do have ships that does the CPP well, and on occasion, we take advantage of that for backhauls, but our main focus is on the chemicals. We don't expect to be very active in the CPP markets, unless there are some earning pockets that we will pick up, but not from a sort of fundamental focus area. No.
Another question also market related. Would you say the strong improvement you see in the market today is artificially strong at this time, like we saw in 2020? Or do you see that the improvement is here to stay for a while?
No, I think the improvements are here to stay for a while, and the reason for that is that really what's driving this is the tightness in supply, and that will not go away. You know, demand will go up and down, and who knows whether China goes into a even more severe lockdown, and things can happen. But when you look at the volumes being shipped, and you look at what's available with tonnage, with 0 growth in ships, I think it's a very fundamental upturn this time. With the fear of sounding too overly optimistic, I really do want to remind everybody that we have not seen a strong supply-demand situation for the past, I would say almost 20 years. I think this.
We don't see an influx of new orders because of new technology and questions about that. I really do think this is a fundamental upturn.
Yes. One question related to China. Again, you touched upon it on the newbuilding side. On the market side, how is the COVID situation in China affecting your markets?
Well, it's drawing tonnage out of the market because it's difficult to get in and out of China. Of course, when industry is shut down, it will do something to demand. It is affecting us. If it was a real concern, the markets would not be doing what they're doing. I don't think it's a major issue. I mean, industry will resume and so on. It's not something that keeps us awake at night. Of course it's something that we watch. From an operational perspective, it is a challenge.
Yes. Lastly, a question for you, Harald. If I may, could you share some insight on what your immediate focus will be in your new role?
To be honest, I think I'm taking over tomorrow, and I think I deserve to share those thoughts with my colleagues before I share it publicly. What I can say is that by the board's choice of an internal candidate, I think that's a clear recognition of the results that we have achieved over the past seven years. We built the world's largest deep sea fleet of chemical tankers, and we probably have the most competent organization in the industry. I think the expectation is that we shall continue to build on that at that platform and further develop it. That will be my main priority for the coming months.
Yes. Thank you. Yes, there's no further questions, so maybe, you will have the last words today then, Harald.
Yeah, I can only say that I'm extremely excited by the opportunity, and I'm also confident that I'm leading a fantastic team in Odfjell SE. I'm looking forward to taking over for Kristian. I would also like to add that what Kristian has done to Odfjell SE during the past seven years is quite extraordinary. We started with a challenging starting point, and what we see today is totally different from what we saw back in 2015.
Thank you.
Thank you.