Good morning to everyone, and welcome to this presentation of Odfjell's first quarter results. We are living in unpredictable times, and in that context, it's reassuring to know that the agenda for this presentation is very predictable. I will take you through the highlights. My colleague Terje Iversen, our CFO, will take you through our financial performance, and then I will conclude this presentation with an operational review and a market update and prospects for the coming quarter. Turning to the highlights, we once again delivered a strong safety performance in the first quarter, but in a much more challenging environment. We have four vessels inside the Strait of Hormuz, one vessel that we own and three vessels that are time chartered. I'm very happy to inform you that all crew are safe.
I'm impressed by the leadership that we observe on those four vessels. I'm impressed by the crew's ability to maintain the morale and atmosphere on board, and it also impresses me that they are still able to make rational considerations and decisions despite a very challenging situation. Our time charter earnings ended at $167 million, and that compares to $168 million in the fourth quarter. I have to add that these numbers are not totally comparable due to some changes in our pool distribution, and Terje will explain that more in detail when I give the word to him. Our time charter earnings per day ended at $27,232, and this compares to $27,978 in the fourth quarter.
The weaker results reflect, of course, the situation in the Middle East Gulf, but also, fewer commercial days and higher costs during the quarter. Our EBIT was $46 million, and this compares to $53 million in the fourth quarter. The net result contribution from Odfjell Terminals was $2.3 million, and this compares to $1.8 million in the previous quarter. The total net result for Odfjell SE was $32 million in the first quarter, compared to $38 million in the previous quarter. Adjusted for one-off items, the net result was $26 million compared to $38 million in the previous quarter. After the quarter end, Odfjell signed contracts to purchase four 40,000 deadweight ton super-segregators from the Kitanihon Shipbuilding in Japan.
The total amount of this investment is $290 million. We also, during the quarter, took delivery of three time charter vessels. Our carbon intensity, the AER, was 7.0 in the first quarter. This compares to 6.8 in the previous quarter. This is partly due to seasonal effects. It's partly due to the situation with standstill in the Middle East Gulf. It's partly also due to an increased number of dry docking days in the quarter. That summarizes my highlights. By that I give the word to CFO Terje Iversen.
Thank you, Harald. Good morning and good afternoon to all of you. I will, as usual, start with the income statements for this quarter. As Harald told you, we delivered time charter earnings this quarter of $167 million. To understand that figure, which is done very much in line with the fourth quarter last year, you also had to consider that we did some changes in our pool structure at end of last year. Previously we had three vessels in a pool, and we had pool distributions that was netted from the time charter earnings.
These pools, this pool has been restructured, so these three vessels are now on a flexible or a variable time charter arrangement, meaning that pool distributions has been moved down and included in time charter expenses. That also explains why time charter expenses is increasing this quarter from $7.4 million in the fourth quarter to $15.2 million in the first quarter. Also looking behind the figures in the fourth quarter, we saw that with the closure of the Strait of Hormuz, we saw a slight decline in total volumes and also a shift from contract volumes to spot volumes as our trade in the Middle East has a high level of contracts.
We also saw a slight decline in commercial revenue days, from 60 to 6,114, a decrease of 148 days due to less calendar days and also a higher dry docking activity this quarter. As I told you, time charter expenses increased to $15.2 million, while operating expenses increased from $50.2 million to $53.4 million. Reason for that being that we had more one-off technical expenses this quarter and also that we added three time charter vessels to our fleet in the first quarter. Share of net result from the associate and joint ventures went from $1.8 million to $2.8 million this quarter.
Increase in Odfjell Terminals contribution, which was $2.3 million compared to $1.8 million in the fourth quarter, and we also saw a positive contribution from the new joint venture, Odfjell Hakata Maritime of $0.5 million in the first quarter. G&A ended at $20.3 million compared to $23.5 million. Decline is mostly related to the fact that the G&A expenses was higher than normal in the preceding quarter, so we are now at a more normalized level, looking at G&A in the first quarter. We delivered EBITDA of $81 million compared to $88.9 million in the fourth quarter. Depreciation $14.1 million, up from $36.3 million.
Here, the reason is more or less that the fourth quarter in 2025 was a bit abnormal, lower than normal, and we are now at a more normalized level also when it comes to depreciation and amortizations going forward. We had a capital gain this quarter related to sale of two barges from our Brazilian subsidiary, $4.8 million, and that led us to an EBIT of $45.6 compared to $52.6 in the fourth quarter. Net inter-expenses, $14.3 million, after other financial items, taxes, we delivered a net result of $32 million, a decrease of $6 million from the fourth quarter. If you adjust for non-recurring items, we deliver a net result of $26 million in the first quarter.
The net result of $32 million equals an earnings per share of 41% this quarter compared to $0.48 in the fourth quarter. Looking at the time charter earnings compared to the cash break-even, we saw that our time charter earnings per day this quarter ended at $27,232, down from $27,978 in the previous quarter. Even though it's a quite good headroom comparing with our cash break-even, which in the first quarter was $22,984 compared to $21,817 in the fourth quarter, which is bringing the 12 months rolling average to $22,662. Increase in cash break-even this quarter was mainly then driven by higher dry docking activity and also slightly fewer commercial revenue days this quarter. Going forward, we expect the cash break-even to be average $22,200 per day through 2026.
Continuing the balance sheet, in this first quarter, we acquired one vessel that previously was a right-of-use asset, which was Bow Hercules. That explains why ships and new building contracts increased this quarter. It's also that we took delivery of three new time charter vessels, explaining why right-of-use asset increased from $227 million to $285.7 million this quarter. Cash and cash equivalents decreased to $131 million, while total liquidity available increased to $358 million when we are including available drawing facilities. During the quarter, we established a new revolving credit facility, which increased available drawing facilities by $65 million this quarter.
We drew $30 million in new debt under an existing revolving credit facility as a preparation for installment payments for the new buildings that we have order after end of the quarter. As you know, we paid $40 million in dividend also through the first quarter. Other current assets increased somewhat this quarter, mainly due to the fact that we have classified $80 million as assets held for sale by the end of this quarter, and we also saw an increase in current receivables of $17 million this quarter. Total equity decreased by $9 million, mainly of course then driven by $40 million in dividends being paid, and we are now at the equity percentage of 46% compared to 49% end of fourth quarter last year.
Non-current interest-bearing debt increased as a new bank facility was established during this quarter, which also refinanced two existing bank facilities. As mentioned, we draw $30 million as new debt end of March this quarter. Looking at the cash flow, operating cash flow ended at $50 million first quarter, a decrease of $24.3 million compared to fourth quarter, mainly reflecting increase in working capital of $50 million and also lower earnings this quarter. Looking at net cash flow from investing activities, we then got the proceeds from the sale of the barges from our Brazilian subsidiary, $4.7 million, and we also included here in the $25.4 investment in non-current assets.
Included in that is pre-delivery installments for 26,000 deadweight tons new buildings, which we paid this quarter. New interest-bearing debt, as I said, we have been quite active on debt side during this quarter. We have added a new interest-bearing debt of $145 million, but at the same time, we have repaid $133 million of current or existing loan facilities. We have also repaid $47.7 million in debt related to lease of debt right-of-use asset, but that is also actually a payment that has been kind of refinancing of the Bow Hercules, which we acquired in this quarter.
Looking at the cash flow on a more long-term basis, we saw, as I mentioned, operating cash flow ended at $49.7, down from $74 million in the previous quarter, driven by the increase in working capital mainly and lower earnings. Cash flow from investment was $21.7 compared to $14.7 million related to the pre-delivery installments. We then ended with, like, free cash flow this quarter of $28 million, down from $67.6 million in the previous quarter, which also was a very strong quarter I must add. Looking at the rolling cash flow on a quarterly basis, we are then at $48 million, and if you adjust that for debt repayments related to right-of-use assets, it reached $34.8 million.
Looking at the debt side, as you can see, we have limited debt maturities the coming quarters and the coming years. That is under control. We have not included here the debt we expect to draw or secure for the new buildings, the four new buildings. Looking at the projected interest-bearing debt here, which currently stand at $751 million, that is not included. Also going forward, based on this, we will be around $680 million in year end 2027. That is not including financing of the new buildings. If we assume 70% leverage, we are talking about maybe then adding around $200 million in external financing related to the new buildings.
Looking at the projected debt related to right-of-use assets, we are at $283 million in end of this quarter, and we expect, of course, that to increase based on 17 new time charter vessels being delivered to Odfjell in the coming years. That we expect it to be peak around 2027 at $587 million in total debt related to these time charter vessels. CapEx and time charter commitments. As I mentioned, Bow Hercules was acquired early first quarter, we have now completed all the purchase options that we had for operational leased vessels, this was financed through the new bank facility. In April, we included on here in this overview what the expected total payments for these four new buildings.
We have summarized the existing commitments that we have on our balance sheet already. Including these new ones, we are at $324.6 million in future CapEx commitments for new vessels into our fleet. On time charter vessels to be delivered, as mentioned, we have 17 vessels that are going to be delivered from the second quarter of 2026 to 2029. If we summarize nominal time charter hire for all these vessels, we are just above $1 billion in time charter commitments in total. After that, we will of course then capitalize on our balance sheets the bareboat element of these time charters, which then is calculated to be around $533 million as new right-of-use assets, and also then debt related to new right-of-use assets. I will leave the word to Harald again.
Thank you, Terje. I will continue with an operational review. We start with our volumes. In the first quarter, we transported 3.2 million tons of cargo, and that compares to 3.4 million tons in the fourth quarter. We saw a decline in the contract volumes. That share went down from 57% to 45%, and that's mainly due to shortfall of Middle East cargoes. We also saw a strong increase in spot volumes during the period. In addition to the closure of the Strait of Hormuz, we also saw slightly fewer commercial revenue days, which also contributed to the reduced volumes.
We have renewed approximately 20% of our contract portfolio, and here we have seen a modest reduction in average rates. If we look at the graph at the bottom left side of the page, we will see that we had an all-time high for spot volumes with 1.8 million tons. That's the highest reported figure for the past two years. Also, if you compare this first quarter with the first quarters of 2025 and 2024, you will notice that the volumes are relatively stable compared to same quarters on previous years.
Earnings, the spot, the ODFIX index was down with 1.8% during the quarter. At the same time, we saw an increase in the Clarksons Chemical Tanker Spot Index of 1.7%. When you compare those two graphs, it's very important to notice that the ODFIX index is comparing average rates throughout the quarter with average rates in the previous quarter. The Clarksons Chemical Tanker Spot Index is presenting the rates at the last day of the last quarter with the rates at the last day of this quarter.
Those two graphs are not totally comparable, but of course, they show similar trends. If we are looking at the four cargo groups, specialty chemicals, here we saw a decline in volumes, and that's mainly due to a decline in specialty glycols, and I will revert to that matter later in this presentation. On commodity chemicals, we saw stable total volumes, but we did see a decrease in commodity chemicals under contract compared to what we did on the spot side, meaning that the spot fixtures basically compensated for the shortfall on the contract side. We saw an uptick here on a, slight uptick on veg oils and biofuels. Here we doubled the volumes from 6% to 12%.
The increase was mainly due to increases in soya bean oil and FAME, and FAME is just a fancy word for biodiesel. On a clean product side, we saw very stable volumes around 4% of the total. Turning to sustainability, as mentioned, we saw a slight uptick in the average AER from 6.8 to 7.0. This is partly due to seasonal effects. It's partly due to the effects from the conflict in the Middle East Gulf, and it's partly due to an increased number of dry docking activity.
We believe that this uptick is temporary, and we still anticipate that for the full year, we will see an improvement of our carbon intensity, average carbon intensity. As mentioned, we have signed contracts for four new buildings from Kitanihon Shipbuilding in Japan. Those four vessels will be owned, and they are all equipped with sails. They are equipped with gate rudders, and they are equipped with all kinds of sophisticated energy efficiency devices, meaning that when those vessels are being delivered, they will contribute positively to our carbon intensity record. To our terminals, the headline here is stable performance. We saw an average occupancy rate of 94% in the fourth quarter, and that's slightly down from 96% in the previous quarter.
That reduction is mainly due to effects of the Middle East, of the conflict in the Middle East Gulf. Consolidated EBITDA in the first quarter was $10.6 million. That compares to $7.9 million. Some of you may remember that the previous quarter was impacted by non-recurring items at holding level. When we adjust for those non-recurring items, the EBITDA was very stable quarter-on-quarter. The consolidated net result for the first quarter from terminals was $1.8 million. This compares to a loss of $1.0 million in the previous quarter. Going forward, we expect stable performance on the terminal side. Finally, I would mention our two expansion projects.
One is at the Noord Natie terminal in Antwerp, where we are building out tank pit S, which is 18 duplex stainless steel tanks with a capacity of 36,000 cu m, and that tank pit will be operational sometime during the first quarter of next year. In addition to that, we are also building 88,000 cu m of carbon steel capacity at our terminal in Ulsan, the E5 project. We expect this tank pit to be or this project to be in operation from the end of this year. To the market update and prospects going forward. We all know that we have seen a positive momentum in both in VLCCs and on the product tanker side for some time.
Finally, we see that this effect is also spilling over to the chemical tanker segment. The graph on the right-hand side shows the differences in freight rates from end of last quarter to end of the first quarter. Here we see a significant uptick West of Suez, and particularly for the U.S. Gulf export trades. The average quarter-on-quarter changes, which is measuring average rates this quarter with previous quarter, here we also see that there is a significant positive momentum. We also see a positive momentum East of Suez, but not to the same extent that we see West of Suez. Also here we see that rates are moving in the right direction. Then to the swing tonnage.
Last year, we thought that we were, last quarter, we thought that we were reporting the absolute bottom when it comes to swing tonnage swinging into chemical tanker segments. We've seen a further decrease of that segment this quarter. Now we are seeing that MRs, coated MRs that traditionally has only done chemicals, they are now swinging into or have been swinging into the product tanker segment. A positive development in this situation. Order book, there are not much changes to the order book since last quarter. The biggest change is our own order of four vessels at Kitanihon. 21% of the sailing fleet is today on order.
The biggest impact will be seen in the medium stainless steel segment, where we this year anticipate that the capacity in this segment will increase with 8.4%. Then this will gradually tail off with an increase of 5.5% in 2027 and 1.4% in 2028. The large stainless steel and super-segregators segment is, I would say, very stable with only modest increases over the coming years. The graph at the bottom right side displays the sum of medium stainless steel, large stainless steel, and also the coated MRs with chemical tanker capacity. The three slides are not totally comparable. The bottom slide is also including some additional tonnage.
A few words about the situation in the Middle East Gulf. As you all know, approximately 20% of the world's access to energy has been shut off by the closure of the Strait of Hormuz. This deficit is not evenly spread around the world. If we look at Asia's dependency on chemicals from the Middle East Gulf, we see that South Asia rely on almost 30% of their imports come from Middle East Gulf. For Northeast Asia, 26% of their imports come from the Middle East Gulf. Southeast Asia has a relatively modest share of 16%, and even more modest in Europe, where only 11% of the chemicals being imported has their origin from the Middle East Gulf.
We then look at Asia in total, we see that 60% of their crude imports stem from Middle East Gulf, 30% of LNG imports, 50% of LPG imports, and 60% of naphtha imports. One of the specialty types of naphtha is what we all know as jet fuel. This is the reason why we are discussing shortfall of jet fuel in certain areas of the world. If we look at the different products that are being produced, helium, 30% of the helium stems from the Middle East Gulf. That helium is very important for the production of semiconductors.
Polypropylene ether, 70% of that product stems from the Middle East Gulf, and this is a vital component for the production of electronic components. Sulfur, 45%. This is important for the mining industry. It's vital in the production of batteries. It's also a feedstock for phosphoric acid, which again is an important ingredient for fertilizers. Urea is even more dramatic. 50% of the world production stems from the Middle East Gulf, and that is a vital component of the fertilizer production. Ethylene glycol, all of us use it for windshield washing, there are also plenty of sophisticated types of glycol, where we see that 53% of that glycol is today shut off from the world markets.
Finally, methanol. One-third of the world's methanol comes from the Middle East Gulf, this methanol is utilized in basically all kinds of industrialized processes. There is a significant shortfall of products that are vital to the world production and world economy. That shortfall is, as I said, not evenly distributed around the world. When it comes to normalization of this shortfall, I think no one really knows the condition of each of those production plants. We don't know how long it will take to repair those plants that have been damaged. We also do not know how long time it will take to reach normal production on each plant.
Careful estimates indicate that we have to assume that somewhere between six and 18 months will be required to go back to normal supplies from the Middle East Gulf. To summarize our market outlook when it comes to seaborne chemical export, we anticipate to see a decline in the second quarter. This is basically due to availability, and it's due to the cost of those products that are available. We also expect that we will continue to see disruptions due to the Middle East Gulf. We do see that charters are scrambling tonnage.
They are securing to-tonnage simply to have production transportation capacity for their own products, particularly out of the U.S. Gulf and, but also in the rest of Europe, of the Atlantic region. We do anticipate that the strong performance both in the VLCC segment and in the product tanker segment will encourage swing tonnage owner to remain in the CPP segments. On the newbuilding sides, we've seen that we expect increased capacity, particularly in the medium stainless steel segment. We've also seen that more and more vessels are overaged compared to what we normally think is the usual life expectancy.
However, during the first month of the second quarter, we have seen a slight uptake in recycling activity also for chemical tankers. The global economic growth, the world GDP has been revised slightly downwards, and the best case scenario now is around 3.1%, and the worst case scenario is around 2%. Finally, we would also like to mention the likelihood of an El Niño weather event from this summer, which potentially can affect the markets in the second half of 2026. We do anticipate a slight shortfall in chemical and veg oil demand.
We do expect that we will see increased focus on the major production hubs, which today are the U.S. Gulf and to some extent China if the products produced in China are not utilized domestically. We might see increased production in smaller areas like Europe and Brazil, provided that they have the capacity to increase production. We do expect that we will continue to see a general effect of inefficiencies and disruptions also in the second quarter. We've touched upon the newbuilding deliveries. Here we will see increased capacity. We've touched upon vessel recycling, where we will see a slight uptick in activity.
We have touched upon swing tonnage, where we anticipate to see low levels also in this quarter. To summarize this presentation, we delivered a net result of $32 million. This compares to $38 million in the previous quarter. From Odfjell Tankers, we saw a slight reduction in time charter earnings per day, but also in total time charter earnings. This reduction was partly due to fewer calendar days, fewer commercial days, and partly also due to the situation in the Middle East. Stable activity on Odfjell Terminals, stable underlying EBITDA development. We continue to expand our terminals on budget and on schedule. The outlook, we expect to see continued significant market disruptions also in the fourth quarter.
We will continue to see absence of volumes from the Middle East Gulf, and we will continue to see swing tonnage keeping out of our trades. To summarize this presentation and our guiding for the second quarter, we have seen April performing better than the average of the first three months. We have seen May, here we anticipate that the performance will be better than April. We anticipate that June will perform more or less in line with May, meaning that we expect our results to be higher in the second quarter as long as we don't see any unexpected effects towards the end of this quarter. This concludes our presentation, and we will now have the usual Q&A. Then I invite Nils and Terje to join us.
Thank you all. We have received some questions. I think we will just start at the top and go through them. Let's see here. The first one is about the Hormuz Strait, how does the Hormuz disruption alter our overall trading strategy? Are we repositioning our ships more to the West of Suez?
Our trading strategy is to be present in all markets. I think this conflict is a good example of why it's important to be present in all markets, by that we are not dependent on one single market alone. Yes, we are of course, we are of course rerouting all the vessels that should have been in the Middle East Gulf, they are being rerouted to new markets. The answer to that is yes, but we also have to take into consideration that we are in the deep sea market. It takes time to get the vessels into new positions.
Yeah. Thank you. The next one is also on the current situation in Middle East Gulf. When and how are we planning to bring the four ships stuck in the Gulf back?
Yeah, I cannot.
Difficult question to answer.
I cannot answer the when element of that question. What I can say is that we need solid guarantees from Iran that they will not attack our vessels when they are sailing through this Strait of Hormuz. When we receive those guarantees or statements, then we have to consult our advisors, and if we all agree that this is trustworthy, then we will sail out every vessel.
Yeah. The next question is regarding COA renewals, and it's from Jostein at DNB Carnegie. COA renewal terms have declined for some quarters. Is the current situation leaving potential for new COAs at improved terms, or are customers reluctant to commit longer term at higher rates in anticipation of the situation being resolved shortly?
I would say that that is a big question. The simple answer is yes. I think, I think many charterers have seen that to have some kind of contract coverage in their portfolio, it makes sense. This will have a positive impact on the charterer's thinking when it comes to securing long-term transportation of the products. I think it will also affect the sourcing of those products in a, in, in a longer term perspective. I think maybe some of those being dependent on these products might realize that they've been too dependent on one market.
I think we will see a more positive attitude towards contracts in general. I think we will also see some changes in the way the customers behave when it comes to from where they are sourcing the products. All in all, this is not bad when it comes to contracts in general.
Okay. Thank you. Next question, in the presentation you described products coming out of the Middle East Gulf, and this is just more specific here. What specific products were we exporting from the Gulf to Asia before the conflict?
I do not have all those products in detail. As I said in the presentation, a large share of those products were various types of glycols.
Yeah. There is a question here from [Hakan Larsen]. What is our AI strategy within the company? Are we expecting significant cost reductions due to operational improvements?
Well, our, a bit populistic explained, and in anticipation of a clear solution to the future fuel, our strategy is to reduce our consumption of fossil fuel as much as possible. The thinking is simply that the less fuel we are using, the more money we save, and that will also go for the future green fuel that we will be using, that the ones that use the least of this anticipated more expensive fuel will be winners in the future. Our strategy right now is laser-focused on bringing our average AER as low as possible. Having said that, we have done that for 15 years now.
We have improved our carbon intensity with more than 50%, and there is a limit for how low you can actually reach, and at the same time, making good financial considerations around those investments. That is basically the reason why we are now started to look further into, for example, biofuel, where we see that that might be a future solution for deep sea shipping when it comes to the future green fuel.
Yeah. Thank you. Yeah, no, I think that was the last question that we have received today.
Okay. I thank all of you for attending. I look forward to seeing you again in August, when we present our second quarter results, and then hopefully in a world that is better shape than what we experience today. Thank you very much for attending.