Welcome to the presentation of the second quarter results for Odfjell SE, which we are streaming live here from Bergen today. We appreciate the interest in the company. As usual, we will be taking questions at the end of the presentation, but if you're watching this presentation offline and you don't have the ability to ask questions, please feel free to contact us also offline. As usual, I think there's a chance on your top right-hand corner of your screen, you should be able to post questions along, and we will address them towards the end of the presentation. The agenda for today is I will give you some highlights for the quarter, then Terje, as usual, Terje Iversen will come on and speak about the financials, and then I will come back with a brief update on operational review and strategy. Not so much strategy this time around.
Then we'll talk about prospects and market updates. The highlights of the second quarter in a nutshell, it was not a very exciting quarter for Odfjell. We are slightly up compared to the first quarter, mainly because of operational improvements, but we were in the middle of quite challenging markets and we continue to be in challenging markets. The time charter earnings in Odfjell Tankers was $123 million, which is up $3 million compared to the first quarter. The net results from terminals was in line with the first quarter with $1 million. We had an EBITDA of $11 million compared to $8 million in the previous quarter. That's also up $3 million. Our net results came in at -$8 million compared to -$16 million in the previous quarter. There were some one-off adjustments in those numbers.
They're not directly comparable, Terje will comment on that a little bit later. Second quarter is also not a busy quarter for us in terms of COA renewals. We did renew a few contracts and they were up average 5%. I'll speak more about the COAs and the COA renewals later on in the presentation. In terms of subsequent events, earlier this week, we announced that we have concluded the exit from the gas segment, something we have tried to achieve for quite some time. Terje has a slide with the impact of that later on in the presentation as well. I don't want to go into the key figures.
We will get back to that. As you can see in the quote on the bottom right-hand corner of this slide, we say that we continue to operate well, but the near-term markets remain unpredictable due to COVID-19 and a challenging product tanker market. We do maintain our fundamentally positive view on the chemical tanker markets and the markets in our key hubs for the terminals. The third quarter is usually a seasonally slow quarter, which together with the continued slow product tanker market, may result in a slightly weaker third quarter compared to the second quarter. There are some uncertainties with that. I'll talk more about the market fundamentals and the challenges we're facing later on in the presentation. At this point, I will hand it over to Terje to take you through the financials and then I will come back later.
Thank you very much, Kristian, and good morning to all of you. I will start with the income statement, which we are now presenting according to equity method, which we started with from the first quarter. This means that we are only consolidating our joint ventures, meaning our terminal assets in one line in the P&L and in the balance sheet. If I start with the figures this quarter, we see that net time charter earnings increased slightly from $120.4 million-$123.4 million this quarter. Main reason for the improvement is related to we had less interference from the Texas freeze, meaning that we had a slight increase in volumes on a number of days this quarter compared to the first quarter. Time charter expenses, $4.1 million. Very much comparable to the first quarter, where we see that operating expenses increased from $47.4 million-$49 million this quarter.
Main effect being that we had some insurance claims this quarter, and also saw that we had full effect from increase in number of vessels that we had in the first quarter. It's not an alarming increase in operating expenses, but we continue to see high cost related to crew due to COVID situation still being challenging. Share of net result from associates and joint ventures at 0.5. That is our net revenue from the terminal business. That includes also $1.7 million in depreciation of surplus values. If you deduct that, you have the net result that we have received from our joint ventures being $2.3 million in the second quarter. G&A continued to be on the low side, also due to the COVID situation, less traveling activities and less social activities.
The decrease is also related to the fact that we had some one-offs or increase in the first quarter that is not materialized in the second quarter. We have an EBITDA of $56.6 compared to $53.2 in the first quarter. Depreciation ended at $45.8. Major part of that, around $30 million, is related to our own assets or financial leases, while $15 million is related to depreciation of value in use assets that are capitalized according to IFRS 16. After depreciation and capital gain, we are left with an EBIT of $11.1 million, an increase compared to $7.8. With around $3 million being very much the same increase that we had in the net time charter earnings this quarter compared to the first quarter.
Other financial items. We had a capital gain related to refinancing this quarter of $1.6 million in gain, while we see that the net interest expenses is continuing to decrease due to the fact that we are decreasing the debt and we also are refinancing some of our debt with a lower margin than we had historically. After taxes, we have a net result of $7.8 million negative compared to $15.6 million negative in the first quarter. If we adjust for the one-off this quarter being the capital gain of $1.6 million, we have a net adjusted result of negative $10 million compared to adjusted result of negative $14 million in the first quarter. Looking at the balance sheets. We see that we have ships on balance sheet around $1.5 billion, a slight decrease due to depreciation, of course.
We also see that right of use of asset is slightly reduced due to some of the operating leases is decreasing the number of vessels and number of days. While we see that the investment in associate joint ventures also is slightly down to $179.8 due to the fact that we have received some dividends from the joint ventures during this quarter. We have a cash position of $56.9 compared to $71.9 in the first quarter. If you include undrawn bank loan facilities, we have a cash position of around $111 compared to $130 end of first quarter. The reduction is also due to the fact that we are reducing our debt, and we are refinancing some vessels with a lower loan-to-value than we had before the refinancings. Equity, we have a ratio of 29.4% excluding IFRS 16 related debt, compared to around 29.1% in the first quarter.
What we see on the debt side, that non-current interest-bearing debt is reduced from $1.1 billion to around $1 billion end of second quarter, but that has to be seen in relation to the increase in the current portion of interest-bearing debt going from around $100 million- $193.5 million. That is related to the fact that we have reclassified the bond that is maturing in June next year to being a short-term debt and not a long-term debt based on the accounting rules. We are reducing debt this quarter with around $33 million, and also with around $10 million including some vessel being refinanced with a lowe r loan-to-value. Cash flow statement. This quarter, we see that the cash flow from operating activities increased under $37 million compared to $19.3 million in the first quarter.
Main reason, of course, that we are delivering slightly improvement in the results, also due to the fact that we didn't see the negative development in working capital that we saw in the first quarter. We had a positive impact from that in the second quarter, but we still have too high working capital compared to where we want to be. Looking at the investing activities, we had some investment in assets being docking expense and also some energy-saving devices on our vessels. Total $88.4 million this quarter. After receiving dividends from our joint venture, we had net cash flow from investing activities a negative $5 million compared to negative $21.1 million in the first quarter.
On the debt side, as I said, we are reducing our debt, so we have negative cash flow from refinancing activities at $47.5 million this quarter, leading to a net cash flow for the quarter of negative $15 million and reducing our cash at around $56.9 million end of the second quarter. As I said, if we include undrawn bank facilities, we are around $110 million and around where we want to be and we are planning to be end of this quarter. Bunker expenses remains one of our main cost components. We saw that the bunker prices increased this quarter compared to previous quarter. Looking at the total bunker expenses for the fuel burn from our own vessels and also the pool vessels, that increased from $48 million to $58 million this quarter.
If you take out positive effects for financial hedging, bunker adjustment clauses, positive $4.3 million, and also deduct third party pool vessels, we are $40 million net bunker expenses compared to $34.2 million in the first quarter. We see that we get effect from the contract portfolio and the bunker adjustment clauses in our contracts. Going forward and for the second half of this year, we expect to be around 50% covered with the contract portfolio and the bunker adjustment clauses. We also have some financial hedging around 10% of our exposure. We today have a positive mark to market of a round $5 million. On the debt side, not that much to report about on, but we see that we have very limited refinance needs in the coming quarters. We have a bond maturing in June next year.
We still have ample of time, we think, and we are also have time to consider how to repay that and then potentially refinance that with some other debts that could be more or less expensive. Of course, whether we just repay without refinancing or refinance the term debt will also be market dependent, of course. On the lower part of this slide, you see that the debt is continuing to be reduced. This is showing how it could be reduced for the next two years if we just continue repaying our debt according to the installment profiles and not refinancing the bonds that is maturing in 2022. We could be on track to be around our target, $750 million-$900 million in outstanding debt by end of 2023.
Again, that will also then be market dependent, whether we have to refinancing some of the loans that we are not including in the figures. This is comparing our time charter earnings with our cash break-even. We ended around $21,000 cash break-even this quarter. That was a good reduction from last quarter, around $22,000. That will vary from quarter to quarter, and we still see that the time charter earnings is below the forecasted cash break-even for this year. We also see that we still have a way to go to reach our target to be at cash break-even around $80,000-$90,000 per day. As Kristian mentioned in the highlights, we did a transaction this quarter, signing up with BW Epic Kosan for sale of the two last gas vessels in our portfolio.
In total, the purchase price will be covered in cash also partly in shares in BW Epic Kosan. We will receive around $20 million in cash, which corresponds to the debt on the vessels. The remaining part of the equity we have in the vessels, we will receive around 6.9 million shares in BW Epic Kosan. If you use the share price for the day also the exchange rate, that corresponds to aroun d $17 million, adding up to $37 million in payment for the vessels, which is slightly above the values of the vessels in our books today. That will be a small capital gain, most likely booked in fourth quarter or potentially in the third quarter. In addition, also will improve our equity ratio and the balance sheet when we finalize that transaction. I will leave the word to you, Kristian Mørch.
Thank you, Terje. I will start by taking you through an operational review and update. If you take a look at this slide, what you're seeing on the left-hand side is comparison of the Odfjell index and the Clarksons Chemical Tanker Spot Index. I mentioned a few times that we are a little bit comparing apples to oranges, but they do represent a proxy for the markets. As you can also see in this quarter, t he Odfjell picked up with 2.6%, but the Clarksons index picked up by 1.4%. It doesn't feel like it picked up. It feels like a flat market. There was a small uptick. When you talk about the market, it's quite important to understand that this is not a demand problem.
I mean, the fundamental demand for chemicals, anyone who is trying to source plastics or fibers or any kind of raw materials at the moment know that there's a very, very strong demand. It's actually a disruption to the supply chains and a lack of supply and a lack of inventory that's driving the disruptions to the markets at the moment. When you look at the four categories, I would say if you look at specialty c hemicals and actually veg oils as well, that market is actually doing okay. We have okay nominations and there's quite a good activity, whereas when you go into the easy chemicals and the CPP, that's where the swing tonnage and the added supply that comes with it is teasing us a little bit, I would say. It's quite important to note that it's not a demand-driven disruption at the moment.
It's a supply chain-driven disruption. When you take a look at our COA portfolio, I'll start you off in the middle of this page. On the bottom, you can see the COA renewals. As I mentioned in the beginning, the second quarter is not a big quarter for renewing COAs, but we did renew a few, and they are up 5%. The same number for the first quarter was -5%. When you only renew a few contracts each quarter, you will see if it's a backhaul contract one quarter and a front haul the next, then you will see this figure jumping a little bit around. I think the most important thing is to note that our average COA rate renewal is up 4% since 2019.
At the same time, we have passed on the cost of the low sulfur fuel that happened at the beginning of 2020. It is a positive trend for our COA rates. On the left-hand side, you are looking at the COA coverage. That was 50% in the second quarter. Little bit lower nominations than we're used to. With the same contract portfolio in a normalized market, that number would be a little bit higher. We are within our sweet spot for contract coverage, which is between 50% and 60%. Our tank terminals, in spite of the challenging circumstances due to COVID-19, a lot of people moving around these terminals every day. We continue to operate well and maintain safe and efficient operations.
The EBITDA in the second quarter was $8 million, compared to $7 million in the previous quarter, as improvements in the U.S. and the Antwerp outweighed the reduced results in Asia. The U.S. market, as I mentioned a few times, still suffering from low inventories. Inventories is what a terminal does. When you have low inventory, you also have low levels of utilization in a terminal. That's how it works. That's, of course, affecting our U.S. terminals, and we are also recovering from the Texas freeze and the fire we had on the U.S. terminal in Houston in the beginning of the year. There has been enough challenges there, but we do see an improvement in activity levels also in the U.S.
I can also say the construction of a 35,000 cubic meter new tanks in Antwerp is proceeding on schedule, and it also means the challenges I spoke about before in Houston has meant that the engineering for Bay 13 has been delayed a little bit, but it's still something that we are working on. Turning to prospects and market updates. A little bit back to the inventory side. The effect is that exports out of the U.S. are slower than usual. The U.S.-based producers, they want to produce as much as they can, but they struggle themselves with their supply chains and getting feedstock. At the same time, you have very strong domestic demand, so it just means less inventory, which means less shipments. That means Asian customers and European customers and so on, they've had to source chemicals from other regions.
That's disrupting the usual picture a little bit. On the bottom of this page, you can see therefore that the rates relating to U.S. trades are flat, whereas the rates intra-Asia, where there's more activity, is actually going up. This is a disruption to the usual flows, and I think U.S.-based producers are scrambling to produce because what you'll see in the next slides is that their margins are high, and that was a segue to this slide. If you look on the right-hand side, all the way to the right, you see producers margins developments for key chemicals. If you look at methanol and ethylene glycol, you'll see that U.S.-based producers, their margins are going up while producers based in Europe and Asia are going down because of the increase in feedstock prices.
That just means that is another argument why we believe that the U.S. exports are going to resume as soon as production picks up. You also see the strong demand, in other ways, you are seeing it on the, for instance, the ethylene glycol prices. You have upgoing prices because of shortage of product. You are also seeing all the way to the left, that this is the key product inventories for Asian importers. That inventory is down 37% year-on-year. They are quite interested in filling these inventories. As I said, the supply is becoming an issue. The overall theme I mentioned a few times is that demand is not a problem, but it is a disruption to supply chains that is causing the ripples in the markets. The supply dynamics, we do not have a lot to add.
In the middle, you can see that the order book in chemical tankers is the lowest point it has been in 20 years. All the way on the right-hand side, you can see that ordering activity is low as well. The supply side is very much under control. What is not so much under control is what you're looking at on the left-hand side of this slide, and that is the swing tonnage. When product tankers, IMO II product tankers, when that market is as low as it has been, historically low in parts of this year, then it's natural that these IMO II ships, they find their way into easy chemicals and into what we call our markets. That means that the swing tonnage is picking up. We do need the product tanker markets to, I would say, normalize. We don't need it to spike.
We just need it to normalize, and we think that that will quite quickly reverse the trend of swing tonnage once that happens. Market conclusions, easing lockdowns around the world, good economic activity, healthy supply and demand fundamentals, and a lack of ordering activity means that we still continue to think that it's a fairly strong picture, but with some short-term disruptions. Supply growth in the next coming years will be around 1% compounded per year, and we believe demand for transport will grow by around four. That picture has not changed. There are short-term uncertainties relating to these disruptions that I spoke about and COVID-19 related disruptions that will continue to be around for a little while or maybe a longer while. At least operationally that continues to be a challenge.
The fundamental story that it is not a demand-driven drop, that is quite important when we look into the future. In summary, slight improvement in the second quarter compared to the first quarter, driven by operational improvements. Odfjell Tankers are performing well, we do need the product tanker markets to normalize. On Odfjell Terminals, stable results, efficient operations despite all the challenges, we think that is picking up. Our market outlook is strong fundamentally, with some short-term challenges. That also means that for the third quarter, which is usually a slow quarter, and that CPP market, it means that the third quarter may be slightly weaker than the second quarter. There are some uncertainties relating to that number. I think that was what we had on the presentation, I think we'll move to questions.
I don't know how many questions have been posted, if any.
There appears to be no questions so far. It appears like you were crystal clear.
Yeah, crystal clear or the opposite, who knows? It's not too late if anyone wants to pose a question. All right. Doesn't seem to be the case, but I can see a lot of people are listening on this presentation. If you didn't have a chance to ask the question, please feel free to call any one of us after this presentation or whenever, and we'll be happy to take your questions. In the meantime, I hope that everybody stays safe, and we thank you again for the interest in our company. Thank you.