Good morning, and welcome to the presentation of the second quarter results for Odfjell SE, which we are live streaming here from Bergen today. I am Kristian Mørch. I'm the CEO of Odfjell SE. I'm joined today by Terje Iversen, the CFO of Odfjell. Before I start the presentation, I want to remind everybody that during the presentation, you can post questions online. We will be answering those questions towards the end of the presentation.
There should be a small button on the top right-hand corner of your screen, and you can post the questions, and we will collect them as we go. Today, I will start by covering the highlights of the presentation and the second quarter. Terje will come on and talk about the financial update. I will return and give you an operational update, and we'll end up talking about market prospects and our view on the coming quarter. We start by looking at the second quarter. It was a good quarter for Odfjell, and it was mainly driven by increased earnings in the chemical tanker sector. We had an EBITDA of $82 million during the second quarter, and that was compared to $66 million in the previous quarter. That's up $16 million.
All of that came from Odfjell Tankers that came in with an EBITDA of $74 million, whereas Terminals came in with the same EBITDA performance as it did in the previous quarter with $8 million. We had a net result of $31 million positive compared to a loss of $4 million last year. There has, however, in both quarters, been some non-recurring items, especially in the second quarter, relating to our sale of the Dalian terminal. If you net all that out, we came out with a net result positive of $17 million in the second quarter compared to $1 million in the first quarter. Our CoA renewals, it is not yet the big renewal season, but we did renew some CoAs during the second quarter. They were up by around 6%, which is the same trend that we have been seeing in the previous quarter.
It's positive to note that despite the, let's say, unusual circumstances, that there's a continuous positive momentum in the CoA rates. What also happened in the second quarter was that our CoA coverage dropped to 35%. That was an anomaly, we think. I have a slide later on in the pack that speaks about it. Since then, we have seen that contract renewals have stabilized, and we are now at around 45%-55% coverage, which is where we would like it to be. We are also saying that we have only so far seen very limited financial impact of COVID-19. Our markets have been holding up quite well, despite the fact that we have seen some drop in some mild demand. It still grows, but it has been impacted, and I'll speak about that later in the presentation as well.
Our biggest challenge with COVID-19 is the fact that we are unable to move crew around. We have about one third of our crew on board our ships that are on overtime, so to speak. Their contracts have expired, and we are unable to get them off the ships, and we are unable to get new crews on board the ships. That is not a challenge that Odfjell can solve alone, and it's a challenge for the entire shipping industry, and it's frankly a big headache for us. We are saying that the second quarter was a good quarter for Odfjell. It shows the agility and the resilience of our platform, the flexibility. We have been able to schedule ships into more profitable trades during the quarter, and I'll speak about that also later.
In terms of guidance, we are saying that the third quarter will be, even though it has started well, it will be influenced by the usual seasonality this time of year. We expect to report weaker results, but still positive results for the third quarter. I will speak more about that also in detail later in the presentation. At this point, I would like to hand it over to Terje to take you through the finance update.
Thank you, Kristian. Good morning to all of you. I will give you an update of the financial status end of first half and the results in the first quarter. I will start with the chemical tanker division in the second quarter, where we saw an increase in the time charter earnings. Time charter earnings ended at $137 million compared to $122 million in the first quarter. A solid increase. Looking at kind of behind the figures, we see that the number of days and also the volumes were much unchanged compared to the first quarter.
Kind of the improvement in the time charter results were more or less driven by the improvement where we saw in the spot market and Odfjell also being able to take advantage of the strong spot market with our flexible fleet and increasing the share of our vessels trading in the spot market. We also saw that the spot rates were kept quite high, and we were also able then to take full advantage of the lower bunker expenses that we saw in the quarter. Looking at the OpEx for the group for the tanker division, it was very much stable and kept at a stable level compared to the previous quarters.
On the G&A, we saw that we had a decrease in G&A from $15.1 to $13.8 this quarter, mainly driven by favorable currency exchange rates but also partly driven by decreasing traveling activities and other activities due to COVID-19. After OpEx and G&A, we ended at an EBITDA of $73.9 million compared to $57.9 million in the first quarter. After depreciation, we are then left with an operating result of EBIT at $37.1 million compared to $21.8 million. Looking at finance, we see that we had quite stable interest expenses this quarter compared to previous quarter, where we had other financial items contributing positively with $4.1 million compared to negative $4.9 million in the first quarter. The reason for that is that was driven by kind of derivatives, financial derivatives that developed positively this quarter.
This is the part of the derivatives that are not booked as hedge accounting that you then will find on the P&L. After finance and taxes, we are then left with a net result for tankers of $19.3 compared to negative $5.2 in the first quarter. If you adjust that for kind of non-recurring items, that would be the net financial items this quarter with $4.1, we are then at around $15 million as net result for the tanker division. Looking at terminals, we see that the revenue is quite stable. It's anyway down from $17.5-$16.0. Main reason is that we divested the terminal in Dalian during the quarter. That's also the reason that we see a decrease in operating expenses and G&A. We are left with an EBITDA of $7.6 compared to $8.1 in the first quarter.
Down on capital gain, we see that we have booked the capital gain related to sale of Dalian of $10.3, that is booked on the P&L. In addition, we have also booked a gain directly towards the equity of around $2 million, meaning that we had equity gain related to the sale of Dalian of $12 million, of which $10.3 were included in the P&L. That gives an EBIT of $12.5 compared to $2.7 in the first quarter. Net interest expenses, we see a decrease in that due to refinancing in the U.S. and cheaper financing and also lower LIBOR interest. That decreased from $1.2 to $0.7 this quarter. After taxes, we are left with EBITDA of $11.6 compared to $1.0 in the first quarter. Of course, $11.6 is then included with $10.3 from the gain of sale of Dalian.
Looking at the total, EBITDA ended at $81.9 compared to $66.3. Operating results, $49.7 million compared to $24.3. Net result down at $30.9 compared to negative $4.4. Adjust for non-recurring items being the gain from selling Dalian terminal and net finance this quarter, we are left in a net result of around $17 million. That gives an earnings per share of $0.39 per share. If you adjust for non-recurring items, you are around $0.26 per share in earnings. I move on with the balance sheet. We see that the balance sheet, we have an increase in ships and new building contracts due to delivery of one new building from Hudong. We see that we have investment in associated ventures of around $171.8 million.
The main part of that is related to the terminal business, which is $161 million in booked equity, which also includes cash in the various terminal joint ventures, around $45 million. The remainder of the $171.8 is then related to our booked equity in Odfjell Gas. Cash and cash equivalents. We see that we continue to build cash reserves close to $150 million in cash end of second quarter. We also see that the total equity is now around $550 million being equity share if you exclude right of use of assets at around 29% compared to 28% end of first quarter. Cash flow this quarter, we continued to deliver increased cash flow from operating activities. Cash flow from operating activities this quarter was $54.1.
If you include $31.7 from the first quarter, actually the accumulated cash from operating activities first half is very close to what we generated in cash flow from operating activities for the financial year 2019 in total. We see a positive development for sure. Investing activities, as I said, we took delivery of one newbuilding. In addition, we have paid installments. We had cash flow from investing activities at negative $51.4, but that also includes some dividend that we received from one of the terminals. Net cash flow from financing activities. We continued to be active doing refinancings. We had drawn a new loan, of course, on the newbuilding, but also we have done a refinance in this quarter. In total, we ended up with a positive cash flow for financing of $24.7 million this quarter.
In total, net cash flow ended at $27.3, increasing our cash to close to $450 at the end of the quarter. If you look at cash flow from free cash flow to equity, we see that this quarter we deliver around $17 million in positive and compared to negative $5 million in the preceding quarter. Just to move on the kind of liquidity and cash break-even, which we announced at the Capital Markets Day last year, where we had a clear ambition to arrive at a level around $18,000-$19,000 USD per day in cash break-even to be able to deliver positive cash flow throughout the cycles. We see here the development being the dark blue graph, how that has developed the last quarters, and we see that we continue to decrease the cash break-even.
First half this year, we were around $20,226 per day, which then is taking us closer to our target. If you compare that to what we delivered in TCE the same quarter at around $22,000, of course, then we had a positive cash flow to equity. This quarter, we continued on the trend to decrease the cash break-even going forward. At the same time, we expect to see some increase in the cash break-even in the second half this year due to increased dry dockings and also due to some refinances that we have done recently. Bunker expenses continue to be one of our main cost components, and you see kind of the rough volatility compared to the preceding quarter. We saw in the first quarter a large increase in the bunker expenses, mainly due to IMO 2020.
Last quarter, that cost increase was passed on to our customers. This quarter, we saw the opposite. We saw the bunker prices coming down for the various fuel types. At the same time, we were able to keep that advantage due to the strong markets that we saw in the second quarter. We also see that the spread between the various fuel types has more or less stabilized post IMO 2020. We see that this quarter we had net bunker expenses of around $36 million compared to $50 in the first quarter. Debt development, not very much new since the last time. We have some balloons maturing in the third quarter. We have signed terms for refinancing of those balloons. That has been taken care of. We have a bond maturity in January 2021, which I will come back to.
Besides that, we don't have any balloons of any material size before actually second quarter 2022, when we have a new bond that is maturing. On the lower part of the slide, you can see that we have estimated the debt development for the coming years. It's a slight increase since the last time we presented that due to the refinance that we currently have done and are about to do. In total, we will then be able to reduce the debt with around $216 million in the coming two years, reduce our debt levels with 70% if we repay these loans according to the installment profile and don't take up new loans in the coming years. As I mentioned, I would like to have a few words on the bond maturity in January 2021.
We have addressed that for a while now, and we have also said that we wanted to build a contingency plan to prepare to take out that loan without us being able or being willing to refinance that in the current market due to the pricing not found favorable. We have built the cash reserves, and we are about to do that. Here we have made an illustration how that may look based on the cash that we have for end of second quarter. We have around $148 million. We have in addition the sales proceeds from Dalian terminal with $27. In addition, we have signed a few refinancings, which add $32 million in cash. If we then just redeem the bond at maturity in January next year, we will have a cash balance post the bond maturity of $125 million.
We have also secured a liquidity facility that can be used to take out the bond with $50 million. If you include that, we will be around $175 million after repaying the bond in January 2021. Even though our game plan is still to refinance that bond before maturity, if we find the terms acceptable or favorable to Odfjell. We have built contingency and liquidity buffer to take care of without any refinancing in the market. I think I will leave the floor. Oh, sorry, I have one more slide on the CapEx. Not very much new to report on. We have still based on the balance sheet, or based on the first half, two newbuildings to be delivered. One of those has been delivered already, meaning that we have around $40 million in CapEx remaining, being this last newbuilding from Hudong.
That has been taken care of with the external financing, we don't have any equity installments for remaining CapEx plan. Tank terminals, we have not changed the figure since last time. This is based on estimated maintenance CapEx and also planned expansion for the terminals. We will address that more maybe due to various decisions to invest in the terminals. I will leave the floor to you, Kristian. Thank you.
Thank you, Terje. I will be talking about giving you an update on the operations, and then finally, I will speak about prospects and market updates. As I mentioned to begin with, we did see our CoA coverage drop during the second quarter, and there's really two reasons for it. First of all, I want to remind everybody that in the beginning of the second quarter, the world was a very uncertain place, and it still in many ways is a very uncertain place, and many of our customers were scrambling to understand and control their inventory. There was a lot of rebuilding of infrastructure in a way, or at least for stock. That meant that they reduced the throughput quite dramatically. The number of nominations we had during the second quarter was down, and that's one part of the reason.
The second reason is that it was a deliberate choice on our side, a decision to schedule ships into different trades. The second quarter, as I'll speak to on the next slide, was a very strong quarter for the CPP markets and the veg oil markets that drew with it. We were able to, because of the flexibility of the way that our program looks, to take tonnage out of the parcel trades and put them into the neighboring markets. There's really those two reasons. We do not expect to see a continuous drop and for the coverage to stay low. We are actually towards the end of the second quarter and into the third quarter, we are seeing a stabilization of the contract nominations to the level of 45%-55%, which we believe is kind of the sweet spot for Odfjell.
What I just mentioned is what you're looking at on the left-hand side. You saw the clean market increase, a major spike coming up during the second quarter. That drew with it the veg oil market. Those two things in combination took out tonnage from our market. The swing tonnage started swinging back into CPP and veg oils. That kind of helped us to keep a strong spot market also on the chemicals. On the middle of this slide, what you're looking at is the fact that you saw most trades. There are some trades where it's not the case. Most of our main trades, you also saw an increasing trend in the spot market for chemicals. On the right-hand of this slide, we are again comparing our performance from the ODFIX to the Clarksons average chemical tanker index.
You can see that the chemical tanker index for Clarksons contracted by 3.4% during this quarter, while our ODFIX index went up by 9%. It was really a quarter where our way of operating by keeping not too high contract coverage really paid off for us. I also want to say that operationally, and remind everybody that this was a quarter where most of our organization worldwide was working from home, crews that could not be changed in and out, some bottlenecks in ports. Despite of all that, we managed to reschedule our fleet and operate as well as we did. We are very happy, and I'm very impressed by the team's ability to operate as well as we did in the second quarter.
When you take a look at our terminals on slide number 16, what you're seeing is that the occupancy in general went up, our throughput, especially in the U.S., went down. That means that the terminals are basically full to the brim. We are 97% commercial occupancy around the world, it doesn't get much higher than that. There's less, at least during the second quarter, there's less product flowing through the terminal. That's something that we have been looking quite a lot at, is that the sign that there's going to be less product shipped? Is it a sign that things are slowing down for our customers? I'll address that on the next slide.
The big terminal to watch is Houston, and what we have seen towards the end of the second quarter and into the third quarter is that now throughput are again beginning to increase. We had a stable performance from the terminals, and it's good to see that the terminals remain full, and we have no reason to believe that that's going to change in the coming quarters. Talking about prospects and markets. The ton-mile demand is still growing, but when you're comparing that to the previous years in terms of growth, it went from 8% growth of ton-mile in 2019 to 1% growth between January and May. January and May is first quarter and most of the second for Odfjell. It shows the agility and the resilience of our platform, the flexibility.
We have been able to schedule ships into more profitable trades during the quarter, and I'll speak about that also later. In terms of guidance, we are saying that the third quarter, even though it has started well, it will be influenced by the usual seasonality this time of year. We expect to report weaker results, but still positive results for the third quarter. I will speak more about that also in detail later in the presentation. At this point, I would like to hand it over to Terje to take you through the finance update.
Thank you, Kristian, good morning to all of you. I will give you an update of the financial status end of the first half and the results in the first quarter. I will start with the Chemical Tanker division in the second quarter, where we saw an increase in the time charter earnings. Time charter earnings ended at $137 million compared to $122 in the first quarter. A solid increase. Looking at kind of behind the figures, we see that the number of days and also the volumes were much unchanged compared to the first quarter. The improvement in the time charter results were more or less driven by the improvement where we saw in the spot market and Odfjell also being able to take advantage of the strong spot market with our flexible fleet and increasing the share of our vessels trading in the spot market.
We also saw that the spot rates kept quite high, we were also able then to take full advantage of the lower bunker expenses that we saw in the quarter. Looking at the OpEx for the group for the Tanker division, it was very much stable and kept at a stable level compared to the previous quarters. On the G&A, we saw that we had a decrease in G&A from $15.1 to $13.8 this quarter, mainly driven by favorable currency exchange rates but also partly driven by decreasing traveling activities and other activities due to COVID-19. After OpEx and G&A, we had an EBITDA of $73.9 million compared to $57.9 in the first quarter. After depreciation, we are then left with an operating result of EBIT at $37.1 compared to $21.8.
Looking at finance, we see that we had quite stable interest expenses this quarter compared to the previous quarter, where we had other financial items contributing positively with $4.1 million compared to negative $4.9 million in the first quarter. The reason for that is that was driven by kind of derivatives, financial derivatives that developed positively this quarter. This is the part of the derivatives that are not booked as hedge accounting that you then will find on the P&L. After finance and taxes, we are then left with a net result for Tankers of $19.3 million compared to negative $5.2 million in the first quarter. If you adjust that for kind of non-recurring items, that would be the net financial items this quarter with $4.1 million, we are then at around $15 million as net result for the Tanker division. Looking at Terminals, we see that the revenue is quite stable.
It's on the way down from 17.5 to 16.0. Main reason is the quarter, and since then we have seen that activity is returning. It is, of course, quite a dramatic drop. You will see that it's not a contraction. When you look at how difficult and how uncertain the market has been for all of our customers and for all the consumers in the world during the second quarter, we still think that it's a sign of strength that demand is still growing despite of all of that. We have seen months where you have seen a contraction, but it would take quite a lot, it's quite a stretch of our imaginations to think that 2020 is going to be a contraction in demand. We just don't see that, but fourth quarter is still out.
Who knows what that's going to bring, the way that we look at it now is that we are still going to have continued positive growth in demand throughout 2020. For that to happen, for demand to start rebounding, there's in particular two sectors of industry that needs to pick up again. It's construction and automotive. Obviously, automotive have been one of the hardest hit industries, construction as well. If you look at the stimuli around the world being engaged by governments and so on, it is a lot pointed also towards construction. I think there are signs that things are already now beginning to pick up in construction, and I think on automotive, we have the worst behind us.
On this slide, if you read that in detail on the right-hand side of this slide, we are quoting what some of our main customers are saying about the demand to their investors, Dow Chemicals, LyondellBasell, and INEOS, three of the biggest chemical producers and traders in the world. All of them are saying in different wording, but the essence of what they're saying is that the Q2 was the low point, and they are seeing positive signs and encouraging signs also from construction and automotive. We think that the risk of a major contraction in demand is very limited. The supply side is stronger than it has been for many, many years. If you look at the top bars on this graph, you're looking at the swing tonnage.
It has gone from in March around up to 24% of the MRs being trading in chemicals to now being below 20%. Obviously with the, let's say, clean markets falling a little bit back now, you might see some of that return, it's not that easy, actually, when you look at what it takes to swing a ship back into chemicals from trading veg oils. We don't believe that it's going to be a full reversal. We are, in terms of real supply in our markets, we are getting some help from a reduced swing tonnage.
When you look at the fundamental supply, the next two bars in the middle one, you're looking at the number of new orders. There has been zero new orders in the last couple of quarters or very few at least. That means that the graph you're looking at on the bottom is that if you take the order book to fleet ratio, it stands at 4.1%, which is a historic low. That points towards the fact that when demand normalizes, then it will be quite a quick recovery. It also explains why, even with the drop in demand we have experienced in the second quarter that the market has fared as well as. It's a fairly robust supply-demand balance picture in our opinion. Future market developments.
If I start you on the right-hand side, the big picture, we still believe that it's going to be a positive demand growth. We say 2% to 4%. 4% is probably stretching it a little bit, fourth quarter may actually surprise us positively. We don't know, maybe a more realistic figure is around 2+ . We have to compare that and remember that the supply is going to grow by around 1%, if that. We are also seeing swing tonnage being removed. It is still a very positive story that demand is going to outgrow supply even in 2020. COVID-19, we don't want to sound over-optimistic. I think it's not a time to let down our guards. We have had a good quarter in the second quarter, but we are very aware of the fact that the COVID-19 can go both ways.
We are happy with the quarter, but we are also cautious in terms of how the rest of the year can play out. When you read all the market reports and you look at, for instance, IMF, I think there's a consensus that global growth will continue or will start rebounding in 2021. Everything will of course depend on vaccines and how well the world is dealing with the pandemic. In terms of swing tonnage, I mentioned that we are being helped in terms of real supply, and that's a good thing. We are also seeing very limited fleet growth. It is a strong picture. Short version is that we believe it's still a robust picture. We think the second quarter has proven that.
Yes, we have had help from the CPP markets, but if you look beyond that, we are seeing healthy fundamentals throughout the year. Summary and prospects. We are happy and satisfied with a good second quarter for Odfjell. Our platform shows that it works. Everything that we have been working on in terms of efficiencies and cost reductions in the last couple of years and good IT system is really helping us. Even though we are sitting from our home offices, we operate quite well through the complexity. We are happy with that. COVID-19 is still a big challenge. Our biggest challenge is seafarers. We cannot move seafarers around and the world really has to solve that. It also means that we are taking a precautionary approach to the coming quarters.
Terje spoke about us de-risking our balance sheet, building cash, making sure that we are not exposed to a bond market that may or may not be there when we have to replace the bond. Our CoA share was reduced in the second quarter, but it's not a sign that it's going to stay there. It has already begun stabilizing, so we don't see that as a major problem for us at all. The market outlook continues to be good, I would say, with the caveat that we don't know what the pandemic will do. The guidance for the third quarter is we expect our markets to be impacted by the usual seasonality, so we expect to report weaker results in the third quarter. The quarter has started well, and we believe that it's still going to be positive results for the third quarter.
I think that's what we have for the presentation. Has there been any questions posted online? Any questions? Yeah, Kristian.
One question for you, Kristian. Are you confident that full year 2020 would be profitable?
As I said, we have had a good start to 2020. I think we're going to leave the champagne in the cooler a little while yet, because there is great uncertainty. You can paint a very positive picture, but you can also paint the opposite. It's really difficult to see clearly. I think our models and the way that we look at demand and supply, it would take quite a lot for us not to come out of 2020 positive. We are careful guiding. This is not a guidance, but my opinion is that with the start we have had and with the way the third quarter is developing, then we are on the right track.
One question for you, Terje. Congratulations on a good quarter. Where would you say this quarterly result compares to previous earning cycles? What is the potential?
Thank you. Yeah, we think there is a potential, but of course, we don't want to guide too much about that. Simple math, you can use kind of the time charter earnings this quarter. We ended at around $22,000 per day. If we are able to increase that with $1,000 per day, which will look historically should be more than possible in historical picture at least, we will increase the yearly net result with around $25 million. Where we are today and compare that with kind of previous years, it's also a bit difficult because we have a different fleet now. We have larger vessels, we have more fuel-efficient vessels.
When we have prepared kind of the historical figures and looked at what has been a low cycle, mid-cycle, and a high cycle, you may say that for today, we are kind of in between a low cycle and mid-cycle, at least when you compare the time charter earnings this quarter to the kind of the years where we have defined the various cycles.
Yeah. There appears to be no further questions at the moment.
Okay. It's not too late, I guess, in a moment it will be. I want to remind everybody that even though we haven't had any more questions posted, then you please feel free to reach out to any one of us, Terje or Bjørn Kristian, Head of IR, or myself. We are happy to answer any questions you may have. I just want to thank everybody for listening and stay safe.