Good morning to everyone. Thank you for joining, and welcome to the presentation of our Third Quarter Results. Before I continue, please be aware that there is an opportunity for you to ask questions through this presentation, and we would welcome any question that you might have. Today's agenda is very much same procedure as last year. I will present the highlights. My colleague, Terje Iversen, our CFO, will take you through our financial performance. I will conduct a short operational review of our third quarter performance. We will conclude this presentation with a market update and prospects going forward. Then to the highlights. Once again, we delivered a strong safety performance in the third quarter. Our time charter earnings ended at $192 million, and this compares to $195 million in the second quarter.
Our time charter earnings were slightly down to $27,892, and this compares to $29,486 in the second quarter. We delivered an EBIT of $59 million compared to $69 million in the second quarter. We saw a slight uptick in net result contributions from our terminals of $2.2 million compared to $1.8 million in the previous quarter. Our group net result was $40 million, and this compares to $54 million in the previous quarter. The adjusted net result was $43 million compared to $56 million in the second quarter. Our carbon intensity, the AER, was stable at 6.9, which is the same as we reported in the second quarter. During the quarter, we took delivery of three newbuildings, one owned 26,000 tonner, the Bow Pluto, and also two newbuildings on time charter.
After the quarter- end, we have concluded the sale of two 15-year-old coated Chemical Tankers. Terje Iversen will take you through the financial effects of that sale. We also signed agreements for two additional stainless steel super segregators, and this will bring our Kitanihon class up to 10 vessels in total. This concludes the highlights, and by that, I give the word to Terje Iversen.
Thank you very much, Harald, and good morning and good afternoon to all of you. I will, as Harald mentioned, take you through the financials, and I will start with the income statement. As Harald told, we had time charter earnings this quarter of $192 million, slightly below second quarter. Looking behind the figures, we saw reduced spot rates, but we also saw increased lifted volume, which then led to a stable development in time charter earnings. We also saw an increase in commercial revenue days because of more vessels, increase of 455 days due to the vessels that were delivered in the previous quarter and also the three that was delivered in this quarter. Time charter expenses ended at $11.7 million, while operating expenses increased somewhat to $58 million.
Main reason for the increase being delivery of three new vessels joining the fleet in the quarter. We saw also G&A increased slightly, reason being actually that the G&A in the second quarter was lower than usual during the average of the year. Share of net result from associates and joint ventures ended at $2.8 million, up from $2.2 million, of which Odfjell Terminals contributed with $2.2 million in net result versus $1.8 in the second quarter. That leaves us with an EBITDA of $105.5 million compared to $111.3 million in the second quarter. Depreciation increased due to delivery of five new vessels in the second quarter and in the third quarter, so it ended at $46.2 million. After a small capital gain of $0.4 million we are left with EBIT of $58.9 million compared to $68.8 million in the second quarter. Net interest expenses increased.
That relates to three new vessels being delivered in the third quarter, and also the fact that we had a positive effect on net financial expenses of $1.6 million in the second quarter as a one-off in the second quarter, and that is also then explaining that why we are increasing in this third quarter. After other financial items and taxes, we are then delivering a net result of $40.4 million compared to $53.5. Adjusting for non-recurring items, net result was $43 million in the third quarter. When comparing with the second quarter, we should also remember that we had a positive one-off related to a customer settlement in the second quarter of $6.9 million. That then inflated the net result in that quarter.
Looking at time charter earnings per day compared to cash break-even, we saw that time charter earnings per day fell somewhat to 27,892 compared to 29,486 in the previous quarter, as mentioned, driven mainly by softer spot markets. On the other side, we saw positive development in cash break-even. In the third quarter, it ended at 20,874 compared to 21,804 in the second quarter. Bringing the 12 months rolling average to 21,870. So we actually seen a quite positive development on the cash break-even, and the level this last 12-month rolling average is actually the lowest that we have seen since 2021. The decrease, of course, driven this quarter by added revenue days from the newbuildings delivered in the second and third quarter, and also less off-hire days in the third quarter. Going forward, we expect a slight increase in the cash break-even for around 22,200 at average for 2026.
The P&L break-even, very much at the same level. That was 22,115 compared to 22,281 in the previous quarter. Looking at the balance sheet, there were some changes in ships and newbuilding contracts. We took, as mentioned, delivery of Bow Pluto, 26,000 DWT newbuilding in the quarter. At the same time, we made an agreement to sell two vessels that has been then reclassified as held for sale in the balance sheet per end of September. After the end of the quarter, we took advantage, I would say, of the strong S&P market, and we sold two coated vessels, being Bow Elm and Bow Lind. We expect the transaction to result in capital gain of $9.6 million and giving a net positive cash effect when we repay the debt on the vessels of around $35 million.
The vessels will then be delivered in the fourth quarter of 2026 and early first quarter 2027, and the capital gain will then be booked in the quarter where we deliver those vessels. Cash and cash equivalents at $165.9 million. Total available liquidity decreased by $7 million to $378 million when we are including available drawing facilities. Also, of course, the cash per end of September is also then reflecting that we paid out $41 million in dividend related to the adjusted net result for the first half. On the debt side, we see that other current assets increased due to the two vessels that has been classified as held for sale in the third quarter.
Total equity increased by $13 million in line with the comprehensive income we delivered in the third quarter, then subtracting the dividend that we paid during the same quarter. Non-current interest-bearing debt increased due to the financing of Bow Pluto, and also then on non-current debts, right-of-use assets also increased due to the new time charter vessels being capitalized on our balance sheet. Looking at the cash flow for this quarter, we saw that we delivered quite a strong operating cash flow, $85 million in the third quarter, increase of $4.3 million from the second quarter, reflecting a stable time charter earnings compared to second quarter due to increased commercial revenue days and at the same time a stable working capital this quarter. Net cash flow for operating activities ended at $84.9 million compared to $80.6 million in the second quarter.
On investing side, we saw that we delivered Bow Pluto, and that investment was financed by new bank debt. In total, net cash flow for investing activities ended at -$ 42.9 million. On the debt side, we took new interest-bearing debt on Bow Pluto, and we paid dividend of $41.4 million, leading to net cash flow from financing activities of -$ 41.4 million. In total this quarter, we had a positive change in cash and cash equivalents of $0.6 million. Looking at the more long-term development for the cash flow, free cash flow, showing the last 11 quarters here, we had, as I mentioned, a strong operating cash flow this quarter, $85 million, up from $80.6 million in the previous quarter. While we saw cash flow of investment was -$ 42.9 million, which then includes the final installment for delivery of Bow Pluto in the quarter.
Free cash flow then ended at $42 million in the third quarter, down from $61.1 million in the previous quarter. We should also remember that we had a sale of a newbuilding contract in the second quarter that positively impacted net cash flow from investments. Looking at the 12 months rolling free cash flow, ended at then $49.7 million. If you adjust that for debt repayment related to right-of-use assets, it reached $35.6 million. On the debt side, not that much happening. We have interest-bearing debt end of third quarter of $767 million, excluding debts, right-of-use assets. If you include that, total is then $1 billion 153 million per end of third quarter. As mentioned a few times, the Bow Pluto was delivered to Odfjell in July.
That was financed by a new tranche on an existing bank facility during the quarter. Looking at the scheduled repayments going forward, we have a few balloons maturing in the coming years, but not material amounts. In the fourth quarter, we would then plan to repay the debt on the two vessels, Bow Elm and Bow Lind. We have a larger loan facility maturing in the fourth quarter 2027, and we are already starting to look into options to refinance that based on the strong bank market that we are seeing today. Projected interest-bearing debt going forward, we can expect a small decrease from $777 million today to $718 million end of this year, but then we expect to see an increase in 2027, mostly then due to the delivery of new vessels coming on long-term time charter to Odfjell.
Also the four Kitanihon vessels being delivered in the coming years. As mentioned here, we are also in the process of securing financing for those four vessels that we are building for our own balance sheet. I would say that we are in good progress, and we expect to finalize that close to the end of this year. CapEx and time charter commitments, not that much happening here. We took delivery of the Bow Pluto, so the remaining CapEx commitments up on the right side here is then consisting of the remaining CapEx related to the four 40,000 DWT newbuildings being delivered for the Kitanihon from the first quarter 2027 to the second quarter 2029. In total, $253.6 million in remaining installments.
On the time charter commitments, we now have 14 vessels that are secured on long-term charters when they are delivered from Odfjell from the third quarter 2026 through 2029. That is in total, the time charter for this vessel of $847 million. When these are then taking delivery of and capitalized on our balance sheet, that will lead to an increase in right-of-use assets and corresponding debt on these assets of $436 million. We also then, after the quarter, we concluded two additional 40,000 DWT newbuildings on long-term charters for delivery in 2029, and these are not included in the figures since these were concluded after the quarter. I will leave the word to you again, Harald.
Thank you very much. I will then continue with an operational review of our third quarter performance. First to our volume development. We saw a significant increase in the volumes lifted in the third quarter, 3.6 million, and the vast majority of that increase is due to an increase in spot volumes. That is, I would say, only natural, as our customers are prevented from taking long-term positions in today's very volatile market. Our contract cargoes remained stable, similar to the two previous quarter, around 1.5 million tons. That means that since the whole increase was due to spot volumes, our contract share of the total volume was diluted from 46% to around 42% in the third quarters. We did not renew any contracts during the quarter. The third quarter is normally a very quiet quarter when it comes to contract renewals. Then to the rate developments.
Our so-called ODFIX Index saw a decline of 8.5%, while the Clarksons Spot Time Charter Index saw a decline of almost 19%. Here, it's very important, once again, to notice that the Odfjell Index is showing the average of freight rates during the quarter, while the Clarksons Spot Index is comparing the rates at the previous quarter and with the rates at the end of the third quarter. Therefore, those two graphs are not entirely comparable. We saw stable volumes when it came to the specialty chemicals. We saw a significant uptick when it came to transportation of commodity chemicals, and the big increases were due to increased volumes of products like caustic soda, BTX, and methanol.
We saw a decline when it came to veg oils and biofuels. I am also happy to see that we were able to utilize available capacity on the CPP trades, where we saw a relatively significant uptick in those volumes. So, stable on specialties, up on commodities and CPP. Then to our carbon intensity, that remains stable at an AER of 6.9. This is the same as we reported in the previous quarter and slightly up from last year. The reason for that is simply due to the inefficiencies as a consequence of the war in the Middle East. As mentioned, we have signed agreements for another two Kitanihon super segregators. That brings that class up to 10 vessels. When all vessels have been delivered, we will have a fleet of 12 vessels with suction sails by the end of 2029. Then to the Tank Terminals.
The heading here is stable and solid performance. Our occupancy rate remained at 95%. This is the same as we reported in the second quarter. EBITDA was slightly up to $11.3 million in the third quarter, and this compares to $10.7 million in the previous quarter. Net result for our share was $1.9 million, and this compares to $1.3 million in the second quarter. Overall, we expect the performance to remain broadly stable. We do see positive signs in the U.S., and we do see positive signs in Europe. At the same time, we see that the situation for our terminal in Ulsan, Korea, remains challenging, and that is solely due to the situation in the Middle East. On the expansion side, we continue to expand our terminals. The E5 project was concluded and finished slightly after quarter- end.
This project was concluded on schedule and within budget, and it adds 10 carbon steel tanks with a total capacity of almost 89,000 cu m. We are also expanding in Antwerp. Here we are constructing the so-called Tank Pit S, and Tank Pit S will add 18 stainless steel tanks and a total of 36,000 cu m of new capacity at our Antwerp terminal. This project is on schedule, it's on budget, and we expect the tank pit to be operational in the first quarter next year. Then to a market update and the prospects going forward. As mentioned, we have seen a decline in freight rates over the quarter. At the same time, VLCCs, as we all know, are logging record high market rates.
We see solid earnings on the product side, but also a decline during the quarter for the product tankers. This is also seen in the freight rates for chemicals. West of Suez, we have seen a decline somewhere between 30% and 40%. This is mainly due to more vessels being moved from the Eastern trades and into the Atlantic basin. However, we also saw that towards the end of the quarter, the rates stabilized west of Suez at the present levels. East of Suez, we saw a slight uptick in freight rates towards the end of the quarter. Then to the swing tonnage. The swing vessels remain at historical low levels. During the quarter, we logged approximately 2% of MR tankers swinging into the Chemical segment, and that remains a historical very low figure.
We also have seen, after the breakout of the war, a tendency to slightly more core deep sea chemical tankers swinging into CPP, and the number here is today around 17%. The order book, we have seen no new orders except for the two vessels that we have ordered. We have not seen any new orders for super segregators, and we have seen few orders in the medium stainless steel segment, and the medium stainless steel segment is mainly dominated by 25,000 tons. This implies that the order book remains around 18% of the fleet. The biggest increase will be seen in the medium stainless steel segment. Here we will see, at year end, we will have seen a fleet increase in this segment of 9%, and then it is slowly tailing off towards 2028 and 2029.
For large stainless steel and super segregators, we see a relatively stable increase of 3% - 4% over this year and the two coming years, and then it will be tailing off in 2029, and we will see a negative development from 2030 and onwards. When it comes to the external factors that has an impact on our trades, we saw that we saw a small and positive increase in the seaborne chemical and bio exports during the quarter. We have seen that IMF has a slight positive revision of the world GDP growth, and we have seen that freight rates in our segments have flattened out and even show a slight uptick at the end of the quarter behind us. On the supply side, we do see that there is a strong delivery pipeline this year and also next year that will add capacity to our core fleets.
We also expect that the high crude and CPP rates will continue to discourage swing tonnage for entering into the Chemical Tanker segments. To summarize this presentation, we delivered a group net result of $40 million in the third quarter, and this compares to $54 million in the previous quarter. Total time charter earnings saw a slight decrease, and this is mainly due to slower spot rates, and particularly in the trades west of Suez. We saw a solid increase in lifted volumes, and we also saw that we are able to put our increasing fleet into work from day one, and they all enter the projected trades, and they all deliver revenue from day one. On the terminal side, we saw a slightly stronger EBITDA and net result development, and we do think that our terminals perform very well despite the challenging geopolitical situation.
The outlook, spot markets have softened during the third quarter, but still we see rates at historically strong levels. We will see an increase in the fleets going forward, and we do expect swing tonnage to remain low and around present levels. On one side, we see market inefficiencies. We see limited swing tonnage in our trades, but we also see vessel deliveries, and we also see diminishing inventories around the world. This adds some risk to the coming quarters, and for that reason, we expect the underlying net result for the next quarter to be somewhat lower than what we saw in the third quarter. This concludes our presentation of Odfjell's Third Quarter Results, and by that, we are ready to answer any question that you might have.
Good morning, everyone, and good afternoon. We have received a few questions so far, and the Q&A functionality is still open throughout the Q&A session, so if anyone else has any questions, please feel free. Starting off with a question to you, Harald, and I'll just read it as it's written here. Thanks for the presentation, Harald. You recently sold coated ships, and your CPP volumes surged significantly. Can you please share your view on the benefits of having large ships being able to swing into CPPs, and do you think it's a strategic necessity as chemicals become commoditized and product tanker markets remain volatile, thus profitable?
Yes, correct.
It's a long question, I guess.
It was a long question, but I will try to answer as good as I can. When it comes to the ship sale, this is simply Odfjell taking advantage of a very strong secondhand market. These two vessels were planned to be sold, and we sold them slightly earlier than we initially had planned. You have to take into consideration that next year we will start taking deliveries of new coated MR chemical tankers from China. We are selling slightly before the replacement vessels are being delivered. I think if you look at Odfjell's new building profile, it is evident that we have a strong belief in the larger, most sophisticated chemical tankers. That is basically the core of Odfjell business, and that is where we are determined to defend our market position.
The characteristics of our fleet development is clearly that we are building up a larger fleet of large and super segregators. Those vessels are capable of swinging into the CPP market, as I think was indicated in the question.
Yeah. I think the next question just came in here. It kind of relates to the same topic. It says, "It seems that despite the significant drop in chemical volumes, Odfjell benefited from increased CPP volumes. Harald, do you think this is sustainable? Can we keep relying on CPP volumes if Hormuz chemical flows do not return in the coming quarters?
I think what is important to notice from the quarter behind us is Odfjell and our team's fantastic ability to utilize the existing markets. What we have done is that we have taken all the available MR similar capacity and swung it into CPP, simply because there are money to be earned in that segment. Do we rely on CPP? No, not at all. This is an opportunity that we are utilizing, and we are not a CPP company.
Good. Thank you. Then there is a question that goes to you, Terje. Cash break-even has shown a positive development over the last quarters, but how do you expect this to develop going forward?
As I mentioned, we are actually at the lowest level now than we have been in five years' time. We have had a large focus on keeping cash break-even down. Of course, we're also helped by reduced debt on our balance sheet, so that takes also down the cash break-even. Going forward, we will continue with that. On one side, we will also see the positive effect from new vessels coming into our fleet, so we have more vessels to spread the cost over. So that will take the cash break-even down. But on the other side, we will have some inflation, both on OpEx and G&A. And of course, we will also then increase the debt on our balance sheet, especially when we get these new 40,000 deadweight ton vessels delivered.
There'll be a mix there, but only a slight increase, I would say, is expected in the coming year.
Okay.
Yeah.
Good. Thank you. Then there is a question here from Odin. Again, it's back to the CPP market. I guess that's the big news of the quarter.
Yeah, I can imagine.
It's slightly similar, I would say, but I'll read it here. If COA share remains low, can we expect increased lifting of CPP? I guess, you answered that in the previous question.
The answer to that is yes. I think the COA share figure is kind of artificial. The COA share goes down when spot goes up. You have to look at the actual numbers, and there you see that we are extremely stable when it comes to the volumes in our contracts. That, I think, is good to see, and it's reassuring to see that our customers, despite all the uncertainty and volatility, our customers stick to the contracts. They continue to transport the volumes. But yes, to the extent that we have spare capacity and to the extent that the CPP market is more beneficial than the Chemical Tanker market, then yes, we will continue to swing into CPP.
Thank you. Then I think there was one remaining question here, and that's, I guess, a bit on the back of recent developments in the U.S. and the election and then Middle East. But if we see a potential peace treaty in the Middle East and a resumed transit through the Strait of Hormuz for chemical tankers and chemical volumes, can you comment a bit on expected effects on the Chemical Tanker markets from that, positive or negative?
I think the immediate effect of a reopening of Hormuz is that we will see a restocking of inventories. Our base case is that you will see immediate increase in transported volumes simply to refill all the inventories that we know that today are starting to bottom out. Then the next thing that will happen is, of course, that the shortfall of, I think, 15%-20% of the world's chemicals will gradually be phased into our markets again. That is development that we look forward to. We are an industrialized chemical tanker company, and I think, on one hand, that is our core business, to service the industrialized part of this business. At the same time, I think we have given a solid evidence that when that market is not functioning, then we are able to turn around.
We are able to capitalize on the markets that are there.
Good. Thank you. There was one question that came in here now. Again, this goes to you, Harald. Odfjell does not have a large regional fleet of ships below 19,000 deadweight ton. Does Odfjell not see intra-regional markets in Asia, Europe, and the Americas as attractive as inter-regional trades? I guess that goes to our strategy.
Yeah. That digs into the core of the Odfjell strategy. I think the wisest thing that we can do right now is to continue to do what we are really best at doing. Odfjell, in my opinion, is by far the leading and best operator of deep sea chemical tankers. We do recognize that there are plenty of good operators of regional tonnage, and I'm not sure that the concept that we are pursuing in the deep sea segment would be transferable to the regional segments. We leave that segment to those who are experts on the regional trades, and we focus on our core business, which is deep sea transportation of chemicals.
Sounds good. I think on that note, that was the end of the Q&A session.
Thank you. Then to all of you who have been following us here today, thank you for attending, and I look forward to seeing you again in approximately three months' time. Thank you very much.