Good morning, everybody, and welcome to the presentation of Odfjell's Third Quarter results. Before I continue, please note that you have the option to type in questions during the presentation, and those questions will be answered at the end of this session. Today's agenda should be well-known to all of you. I will start with the highlights, then my colleague Terje Iversen, our CFO, will take you through the financials. I will continue with an operational review, and we will end this session with a market update and our prospects going forward. To the highlights. We saw the third quarter continue the improvements from the second quarter. This is despite the fact that normally the third quarter is a seasonally slower quarter.
Our time charter earnings increased by 7% from $160 million- $171 million. The net result contribution from Odfjell Terminals was $8 million. This compares to $2 million in the second quarter. If we exclude insurance proceeds, then we saw stable results from the terminals in the third quarter. Our EBIT reached $71 million. This compares to $53 million in the second quarter. The net result was $50 million compared to $36 million in the previous quarter. If we adjust the net result for one-offs, then the corresponding figures are $46 million compared to $30 million in the second quarter. By that, Odfjell is presenting the best quarterly result in our history.
We renewed 6% of our contract portfolio in the third quarter, and on average, the rates were up by 9%. We have eight 25,000 stainless steel tankers on order for long-term charter. The first of these, the Bow Cheetah, was delivered in September, and the next one, Bow Panther, will be delivered later this month. This concludes the summary of the highlights for this quarter. With that, I will give the word to my colleague, Terje Iversen.
Thank you, Harald. I will, as usual, start with the income statement. I will say that the real big headlines this quarter is that we had a nice increase in the revenues, and we had a quite stable cost, both when it comes to OpEx and G&A and also finance, leading to also a net increase in the results on quite nice figures. If I go more into the details and the time charter earnings this quarter ended at $171 compared to $160 in the second quarter. That was based on quite stable number of revenue days for Odfjell-owned vessels. But we saw some reduction in the volumes driven by redelivery of external pool tonnage.
The main driver for the improved time charter earnings is the improved spot market that we saw across most trade lines in the third quarter. Operating expenses, as I said, quite on par with the preceding quarters. Looking at the net results from associates and joint ventures being our terminal business that ended at $7.6 million. That includes $5.7 million as insurance proceeds that are booked on the P&L this quarter. If you adjust for that and also adjust for some FX rates this quarter, the results for terminals in this quarter is quite on par with the second quarter this year. G&A $16.6 million, compared to $19.3 million in the second quarter.
That is quite a strong improvement, so to say, but we had some one-offs that were included in the second quarter, leading to a higher G&A that quarter compared to kind of the average that we have seen. We ended up with an EBITDA of $111.6 compared to $90 in the second quarter. Depreciation at $40.6, same as preceding quarter. After a small capital gain of $0.1, we had an EBIT or an operating result of $71.1 compared to $53 in the second quarter. Net interest expenses increased from $17.9-$18.8, main reason being increased market interest.
Even though we are reducing the debt, we see that we are hit by the increased rates in the markets. After other financial items and taxes, we then are presenting a net result of $50.2 compared to $38.0 in the second quarter. As Harald mentioned, if you adjust for non-recurring items, the adjusted results is $46 compared to $30 in the second quarter. That led to an EPS of $0.64 compared to $0.38 in the second quarter. We saw that our time charter earnings per day increased quite much during this quarter, while we see that the annual break-even level remained stable.
Our time charter earnings increased to $29,612 in the third quarter, up from $27,206 in the second quarter, which is well above our average annual cash break-even around $22,165. If you look at the quarter alone, we delivered a cash break-even at $22,694 versus $22,291 in the second quarter. The quarter-on-quarter increase was driven by higher interest rates and also some increased dry-docking expenses compared to the previous quarter. As you can see, we are still somewhat above our target, which is below $20,000 for the cash break-even. Our balance sheet. Most interesting is to note that right-of-use assets increased from $189- $197.5.
That is due to the level of the time charter vessel, Bow Cheetah, which has been capitalized and included in right-of-use assets. We see that the investment in associates and joint ventures ended at $159 million, down from $183 million in the second quarter. Main reason being that we took some cash out of the terminal division or the joint venture in terminals in the last quarter that was transferred to Odfjell and has now been further repaid to the external owners, reducing our share in the terminals. Cash position increased slightly to close to $100 million. If it includes undrawn loan facilities, we are around $157 million in available liquidity.
We also did an extraordinary debt repayment of $50 million in this quarter on top of scheduled installments of $20 million. Our equity continued to increase. We have now $630 million in equity. If you adjust for IFRS 16 debt, we are at an equity ratio of 36% compared to 33% end of last quarter. On the debt side, you can note that we have reclassified the bond maturing in September next year from long-term to short-term debt, around $110 million, which now is included in the current portion of interest-bearing debt. I will address that further later in the presentation. Cash flow statement.
That, of course, we see that we increased the operating cash flow from $68 million- $105 million this quarter, of course, driven by the improved profits, but we also saw a positive development in the working capital this quarter, which helped to the increase in the operating cash flow. On the investment side, we are continuing to do some small investment in energy-saving devices , and we also have some dry dockings, including $11.1 million. In total, we had cash flow from investment activities $30.6 million, but that included the item other, which actually is a repayment of debt to external parties within the terminal joint venture, which I just addressed at the previous slide.
On the debt side, we reduced our debt with $35 million, including the scheduled and additional debt reductions. We also paid dividend of $18.2 million in August this year, leading to a net cash flow from financing of $68.2 million. We ended up with a slight increase in the cash and cash equivalents this quarter. Looking at the cash flow on the longer term, this is the last 10 quarters. We continue to see an increase in the free cash flow. Looking at the 12 months rolling free cash flow, we reached $64 million this quarter. If you adjust for debt repayments related to right-of-use assets, capitalized on our balance sheet, we had a free cash flow of around $49 million.
The improved working capital in this quarter also helped on the operating cash flow as mentioned. We see that the working capital total this year has been reduced with $6 million, which is very comforting given the increased revenue we have seen through the year. As mentioned, we use the free cash flow to allocate to both dividend, but also additional debt repayments this quarter. If you look at this quarter alone, we delivered a free cash flow of $74 million, consisting of $107 million of operating cash flow, and then deducted for a - $30 million on investments.
As I mentioned, if you then adjust for the $20 million, which actually was repayment of debt to external parties, we are at the cash free cash flow this quarter of around $94 million. Looking forward, this is showing the debt installments going forward and also maturities. We have also announced in the quarterly report, we have this quarter exercised option to buy back the vessels which we have on financial lease. The aim is to refinance them in the bond market prior to the year-end. These vessels are on a financial lease, meaning that we have capitalized the vessels on our balance sheet.
The impact on the balance sheet will be more or less zero, except for we are targeting a reduction in debt on the vessel and also a reduction of our break-even levels through reduced margins on the bank financing that we are targeting and are expecting to close before year-end. We repaid additional $50 million on a revolving credit facility in the third quarter, and the total undrawn repaid is now around $57 million at the end of the quarter. Going forward, we have now to repay additional $110 million on the revolving loans that we have per today, but we are continuing to target higher cost facilities for early refinancing and also permanent repayments to reduce the cash break-even to reduce the capital cost for the group.
At the lower part of this slide, you see the estimated debt end of this year and also for 2023 and 2024 according to the loan we have in place today and the scheduled repayments. We are close to a $1 billion in debt, external debt end of this year. If we assume a full repayment of the bond mature in September next year, we will be around $835 million, and then within our target debt level, which is between $850 million-$900 million. We are continuing to do that, and we are considering what to do with the debt maturity in September.
Based on the cash flow we see today, we will have options and also could be alternative ways to just redeem and repay the full loan amount in September, when the loan is due. That will depend, of course, on the cash flow from the activities going forward. That was my presentation, back to you again, Harald.
Thank you, Terje. I will continue with an operational review and first we will have a look at our volumes. We saw that the volumes on the Odfjell fleet grew in the third quarter, while the effect of the pool tonnage that was redelivered was a slight decrease in total volumes. Chemical demand remained healthy through the quarter, and we also saw very robust spot markets. On the back of that, we see a strong demand for contracts over spot, and we also see that there is less capacity available for these contracts going forward. In the third quarter, we had a contract coverage of 49%, and this also corresponds to a decrease in total actual volumes of about 200,000 tons.
As mentioned earlier, we renewed 6% of our contract portfolio in the third quarter, and on average, the rates were up by 9%. We see that demand from charterers to enter into new contracts is high, and this should continue as continuing strong momentum for contract renewals also into the fourth quarter. As also mentioned earlier, we have some vessels that are being redelivered in the fourth quarter. That's four pool vessels, and this will partly be offset by the delivery of the Bow Cheetah in September and delivery of the Bow Panther in November. The financial impact of those redeliveries will therefore be negligible.
We saw the ODFIX increase by almost 10% during the quarter, and we saw the corresponding Clarksons Chemical Tanker Spot Index increase by almost 14%. Most important takeaway from this slide is that we see stable and good volumes in all chemical segments, and at the same time, we see reduced Odfjell activity in the CPP market. Our AER, this means our carbon intensity, increased slightly in the third quarter. This is due to speed increases on some of our vessel classes. I think that shows the sensitivity of carbon intensity related to speed adjustments. In Odfjell, we've had a strong focus on reducing our carbon intensity all the way since 2008.
We have reduced our carbon intensity with almost 50%. We are well below our internal trajectory leading up to 2030, and I can assure you that in Odfjell, we will continue to focus on technical and operational improvements to further reduce our impact on the environment. On the tank terminal side, we delivered an EBITDA of $13.8 million versus $8.5 million in the previous quarter. If we adjust for the previously mentioned non-recurring items, then we saw a stable result in the third quarter. The average commercial occupancy remained high for the terminal portfolio and ended at 97.5% in the third quarter. This is slightly up compared to the second quarter.
We have very strong activity in the United States and Europe, and we are close to 100% occupancy on those two terminals, and we also see strong activity levels. In Asia, our terminal in Ulsan sees improving figures. We have occupancy well above 90% and but a modest reduction in throughput. We do see that the present environment is dictating high inflation, high interest rates, and the risk of a recession. Despite this, we do anticipate that our terminal portfolio will be resilient to those changes, and we have a positive outlook for the terminal division into 2023.
If we look at the prospects going forward, then the first slide shows the development in freight rates in all our major trades. If we start with West of Suez, we see that the trend from the second quarter has continued with similar strength into the third quarter. The Atlantic Basin, we had average rate increases of 15%, and I would also like to highlight export rates of veg oil out of South America, where we now see rates which are almost double the corresponding quarter in 2021. East of Suez, we also saw very hefty increases. Exports out of Asia increased by 27%, and similarly, we saw exports out of the Middle East increasing by 28% and 41% respectively.
We have also seen that the MR market on the CPP side has remained strong, and that continues to drive swing tonnage out of the chemical segment and into the CPP segment. This trend is also explained in my next slide, where we have looked at vessel supply in various key chemical hubs. The two upper slides are describing availability of coated tonnage for chemical cargos. If you look away from quarterly variations, the trend is quite clear that in 2022, we see less tonnage available for chemical cargos compared to 2021. The background is of course that those vessels are swinging into the CPP market.
We see the same trend when it comes to stainless steel vessels available for chemical cargos in the key chemical hubs. Of course, the stainless steel vessels they don't have any market to swing into, the explanation why we see a decrease in available tonnage compared to the previous year are more complex. One of the explanation is that that more tonnage, older tonnage is sold for domestic and regional use in certain trades. Some of the tonnage is still counted, but it's no longer available in our trades.
We also see that the speed reductions have an impact, and finally, the third explanation is that the chemical tankers are traveling longer distances than they did the previous year. There is a higher ton-mile demand. The combination of vessels exiting our trade, vessels traveling longer distances, and vessels traveling at slower speed means that every vessel has less capacity to do port calls than the previous year. When it comes to the prospects, the first important item to notice here is that we have seen a clear decrease over time in the price of ethylene. Ethylene is among the most important building blocks for the chemicals that we transport.
It's also a fact that we've, during the past two years, have seen supply challenges and also a very strong demand in the United States, and that has reduced the availability of cargo for export from the U.S. When we now see a softening local demand in the U.S., we see that the challenges related to supply chain is easing up, and we also see that the building blocks are becoming cheaper, then we believe that this will stimulate export going forward. During the quarter, we've seen stable contract nominations, but we have been missing a strong spot market out of the U.S.
We believe that we now see the first signs that also the export market from the U.S. will be back on track. That will contribute to a market where we see very strong demand in all trade lanes. To summarize, the prospects, I think we are all well aware of the macroeconomics. We do see high inflation. We do see increasing interest rates. We do see that the economic growth is slowing down, and we see that the recession is coming closer and closer. We also see that there is an energy crisis in Europe, and we see increased political tension in many parts of the world.
At the back of this, we do believe that the chemical production will be reduced in the coming years. At the back of what I've previously presented to you, we do believe that more of these products will be made available for export. It is on the supply side that we will see the biggest changes. There is today very few vessels chemical tankers being built. There are very few vessels on order. We see swing tonnage going out of the chemical tanker market. We see older tonnage leaving or the international trades and going into regional and domestic trades.
We see that the average fleet speed is also continuing to go down, and the speed reduction will for many ship owners be mandatory when IMO implement the new regulations in 2023. To summarize today's presentation, this is another strong quarter for Odfjell, and the results are driven by a very robust chemical tanker spot market. On the tanker side, we see a strong performance and strong markets in all trades, and we believe that these will be stable going forward, partly due to more swing tonnage leaving our trades. We have a stable performance within Odfjell Terminals, and we have a positive outlook going forward.
The market outlook is that we do believe that the reductions in supply will outnumber our possible reduction in demand. We do believe that the more swing tonnage will leave our trades. We expect continued strong spot rates across going forward. Together with the improved terms that we will achieve on our contracts, that should translate into slightly improved time charter earnings in the fourth quarter. This concludes our presentation, and we will now continue with the questions.
Yeah. We have had a couple of questions so far, and I think the first one goes to you, Terje. How do you see development of cash breakeven towards your target range given the current global economic outlook?
If you see back a few years, we are now at the position where we have reduced the cash break-even quite substantially, I would say. We are at around $21,200. We are targeting even lower cash break-even going forward. We are working quite intensively to reduce our debt and also refinance with the lower margins. That will improve the cash break-even going forward. However, we see that there is inflation and also higher interest rates in the market, so that is pulling in the other direction. It's still challenging, but we still have a target to reach a cash break-even level below $20,000 per day.
Whether we achieve that next year or the year after, that will depend on the cash flow in the coming years and quarters.
Thank you. A question for you, Harald Fotland. There's a lot of talk about the expected EU regulations that will put a price on vessel emissions. What is Odfjell's stance on these changes?
Well, first, you are correct. From next year, we do expect that we will be paying a carbon levy in the EU region. To put this into perspective, Odfjell has been reducing our carbon intensity year by year since 2008, and we are determined to reduce our carbon intensity even further. We do believe that we have a leading position when it comes to the emissions from our vessels. On that background, we welcome any initiative that will contribute to bringing the whole shipping sector to improve the emissions from ships. We are positive to this development.
I would also say that we have systems in place to bring these additional costs on to the charterers.
Thank you. There are no further questions, so I'll leave it to you for some finishing remarks.
Thank you. This is a special day. We have presented the best quarterly result in Odfjell's history. Of course, this is first and foremost driven by improved market conditions. I would also like to highlight that this is also the result of seven years of continuous improvement in Oslo, in Odfjell. Secondly, another important item is that we are blessed with a staff in Odfjell, where everyone is pulling in the same direction. This is not a one-man job. This is the efforts of the entire Odfjell team. I'm sure that I speak for all of us when I say that this is a proud day in Odfjell's history.
I thank you all for listening in and wish you a continued good day. Thank you very much.