Ladies and gentlemen, thank you for standing by. Welcome to Stolt-Nielsen Limited presentation and conference call for the third quarter 2020 results. At this time, all participants are in a listen-only mode. I must advise you that this conference is being recorded today, Thursday, the eighth of October 2020. Now I would like to hand the conference over to your speaker today, CEO Niels Stolt-Nielsen. Please go ahead.
Thank you. Good morning. Good afternoon. Thank you for joining us on this third quarter earnings video conference. Together with me, as always, Jens Grüner-Hegge, our CFO. I will be presenting, I guess you can see on your screen, but you can also retrieve a copy on our website. Moving to the agenda, we will go through each of the businesses. Jens will take you through the financial highlights. Then we will open up for question and answers. The net profit from continuing operations came in at a nice $31 million. We saw a strong improvement in EBITDA from all of our business divisions. I think that one thing that was nice and what makes it a strong message is that the volume held up in all of our businesses.
In the beginning of the pandemic, we were expecting eventually the volume to start coming off as the global economy slowed down. That has not happened. In the third quarter, we saw relatively healthy volumes. On top of that, we also got our costs down, of course, much driven by the lower bunker cost because of the oil prices, but also the actions that we took early in the pandemic. Our gross debt also increased in the third quarter by $27 million. We have secured liquidity. Jens will take you more through that later. We have approximately $0.5 billion of liquidity. We also saw a strong recovery in Stolt Sea Farm in the third quarter, really the business division that was hit the most from the pandemic and the slowdown.
As we announced early in the quarter, Stolt Tankers, we took the opportunity to acquire five modern stainless steel ships from CTG, which is currently with Odfjell, but we will be taking them over towards the end of this year. Operating revenue slightly down, but EBITDA up to $139 for the quarter. Operating profit up by $24 million- $74 million. Net profit up $26 million from previous quarter, up to $29 million net profit. Our debt, as I said, was down $27 million and a gross debt of $2.540 billion. Tangible net worth slightly up at $1.6 billion.
If you look at the net profit variance analysis between the second quarter and the third quarter, you can see the nice blue columns there. Higher operating profit from Tankers of $8.1 million, a higher operating profit for Stolthaven of $3.5. STC, higher operating profit of $4.6, and a great recovery in Stolt Sea Farm of $8.6 million. Slightly higher corporate costs, higher net interest expense because of we secured a lot of liquidity, and that comes at an expense. Some more losses of $1.6 million of FX, and $2.9 million of higher income tax compared to previous quarter.
We took, as you remember, a write-off of our sturgeon business, our caviar business of $8 million in the last quarter, which we didn't have in this quarter, bringing the operating profit for the group in the third quarter to $29.2 million. Next, please. If we just quickly go back and see how the year developed. The pandemic started early in the year, the big impact started when the lockdown was announced. We were active, or Jens and the finance team did an issue in February of raising $141 million, really before the pandemic came out. That was a nice timing and good pricing. We took the advantage of the bond market. Europe went into lockdown and gradually the rest of the world went into lockdown.
At that time, right away, we announced that we want to hope for the best but prepared for the worst, and we went really into lockdown or emergency mode. We declared that we weren't going to pay a final dividend for 2019. We took initiatives of cutting costs, travel and entertaining, professional fees. We did everything possible on our cost structure. Totaling $21 million. We also cut back on capital expenditure, either delayed or canceled of $62 million. Then we started to talk to our banks. We looked at we want to secure enough liquidity to be able to make certain that we have enough liquidity to repay the bond that matures in March of 2021, but also to be able to face various downside scenarios. We put ourselves a target of raising an additional $250 million.
We talked to our banks, but while we were talking to our banks, the bond market opened up. We used that market and raised $132 million in June. Jens has also worked on financing several of our terminals, which then puts us in the position today of having $500 million of liquidity, which I think, puts us in a position of strength. Definitely having enough liquidity to be able to pay back the bond coming due in March of 2021, but also face if the market does turn or if the global economy does slow down significantly, we should be all right liquidity-wise. Next slide, please. ESG is becoming a big part of our lives in a good way. We at Stolt-Nielsen Limited, we have signed up for the United Nations Global Compact, and we have adopted the Global Reporting Initiative Sustainability Reporting Standards.
I've always said that we shouldn't just talk the talk, but really also deliver, and that's what we're working on. I'm quite proud when we start doing this reporting standard. I've always felt that we have operated in a responsible and sustainable way. Now when we start reporting it and measuring it, I'm quite satisfied to see what we have achieved so far. Of course, this is an exciting voyage and a journey which now we will be better at reporting on what we're doing. Also be part of the solution, trying to help innovate, and work towards a more sustainable future together. You will see more of this sort of reporting, and we will go deeper into the initiatives that we are taking in each of our businesses. Next slide, please. Going into Stolt Tankers, if you look on page nine.
The operating profit for the second quarter was $20 million, and I will explain the variance of how it came up to $28.1 million. We had higher trading results of $8.7 million and higher ship management expenses of $4.5 million. Lower depreciation and A&G that was driven by the initiative that has been taken of $3.6 million, and higher equity income of $0.4 million, bringing it up to $28.1 million. The revenue decreased because we had less operating days. The reason that we had less operating days is not our fleet shrinking, but it's because of COVID-19. We had two ships in quarantine. I think it was a week each. Also because of COVID-19 and the restriction associated with it has taken a longer time to do the scheduled dry docking. Lower number of operating days from 6,329 in the previous quarter to 6,108 in this quarter.
Utilization on the ships that were operating was actually up, which is a good sign. The contract that we renewed during the quarter, we had on average an increase of 3.9%. Trading results were up as bunker costs fell and utilization rose. The manning cost increased to $4.7 million, as the cost related to crew changes increased due to COVID restrictions. It is clear that the cost when I'm very proud, and it has really been the focus of the organization to change the crew that are overdue. I think we are down now close to the single digit of crew on board our 155 ships globally that are overdue. That, of course, comes with an additional cost. The airlines are jacking up the price, fully understandable.
We have taken the initiative sometimes to deviate our ships to the Philippines so that we can change the crew. That comes at a cost. If you look at the increased ship management cost for the quarter, if we didn't have the additional cost associated with changing the crew, that actually the ship management cost would have been lower. We again feel it is important to make certain that the people on the front line, especially on board our ships, that we spend whatever is necessary to get them back to their family and so that we can change them, let them have a break. Next slide, please. The bunker cost was, of course, a big reason why we had improved earnings in the quarter.
You can see that the average price of the bunkers that we consumed for the quarter of IFO and low sulfur fuel was $275 versus what we consumed in the second quarter of $388. It's a 29% decrease in the cost of the bunker that we consumed during the quarter. The cost of the bunker that we purchased was up 12% from $274- $307. On the right-hand side, the sailed-in index that we show of our deep sea fleet made a nice jump for the quarter, and let's hope it continues. Next slide, please. Market highlights. As I mentioned on the previous slide, we were able to get higher contract rates, sold COA volumes in most regions and we are approximately at 70% contract coverage. In other words, contracts over freight and COAs.
As you can see on the slide here, the spot markets actually did weaken during July and August. This usually do happen in July and August during the seasonal downturn. If it's anything beyond that, we don't think so. We are actually now starting, and you can see it slightly in the Middle East to Europe and also the TPW, Transpacific West, that it has started to pick up again. We are cautiously optimistic that that was nothing more than a seasonal slowdown. Because of the contract portfolio that we've had in place, 70% contract coverage, we have relatively small volume available for spot and therefore when we do fix spot, we can be more selective in which spot contracts that we go after.
I think, that balance that we have, even though we see a small dip in the COAs, we don't see that clearly in our sailed-in because of our chartering strategy. Of course, the worrying thing is always that when the MR time charter rates have weakened, did weaken in the third quarter. Again, it didn't impact us because of our strategy towards going long contract. The Inter-Europe services are the regional fleet, Stolt-Nielsen Inter-Europe Service. It was a weak spot market reflecting a slowdown in Europe from the lockdown. Customers' outlook is slightly more positive in the fourth quarter. If there is one of our services in one of our regional markets that are having a challenging period, it is the Inter-Europe.
SNITS, Stolt-Nielsen Inland Tanker Service, that's our barges on the Rhine, doing healthy, relatively well, even though we saw a weak spot market that is continuing to deliver nicely under our contract portfolio. SNICS, Stolt-Nielsen Inter-Caribbean Service, the COA volumes were stable at 80%. The spot market weakened slightly. The SNAPS, that's the joint venture we have with NYK in Asia, improved results in the third quarter due to tighter tonnage supply and Chinese demand grew, combined with the low fuel prices. Next slide, please. If you look going forward, what does it look like? Well, we know what the supply side is, the supply side, even though there were additional tonnage announced by one of our competitors in the last quarter, the order book still remains at a total order book that includes coated, less sophisticated tonnage at 7.2%, which is low.
If you look at what the stainless steel part of that order book is, it's at 4.7%. A healthy supply side. You can see that I don't expect any huge orders going forward. On the supply side looks good. The question is. It's always been the supply side of our equation that has been the challenge because we know the owners and speculators have ordered too much ships. It has never really been the demand side. If you look historically, the demand for this business, the service that we provide, has steadily grown in line with the global GDP and the global trade, which is a multiplier of global GDP. It's always been very steady. It's the supply side that's messed up the market. This time around, it's absolutely the supply side looks very healthy. Now, let's see.
It's very difficult to say what's going to happen in the world going forward. It's so much uncertainty. If you took Richardson Lawrie, which we follow, they are showing here that there's going to be a decline in trade volume in 2020 for what we transport. They show a nice gradual pickup of a compound annual growth rate of 6.3%, taking all of the chemical market. If that happens, and I hope they are, and we do believe that they are right. If that happens, I think we will see a very healthy shipping market going forward. Next slide, please. Stolthaven terminals. What can I say? It's only blue positive development. Steady as she goes. Operating revenue up to $59.8, slightly up. EBITDA up from $52.2 up to $36.4. Operating profit $22.7, up from $19.2 in the previous quarter.
Utilization slightly down to $93.7, down from $95.2. The operating performance, excluding one-offs, improved results as a result of the cost saving initiatives that we have taken throughout the group. The equity income improved as results of prior quarter one-offs, higher utilization and change in product mix. An increase in joint venture equity income. Strong and stable customer portfolio with underlying market conditions remaining stable in all regions. A lower impact of COVID-19 on the overall storage industry. We have seen that yes, some of the areas, the throughput, the number of moves that the customers use in the tank, have come down. When they want to renew, if the contracts are up for renewal, they all renew it because they don't want to lose that space. Maybe the throughput is down, but the contracts remain healthy in all of the regions.
Of course, packaging and healthcare industries remain strong, as we see during the pandemic. However, agrochem, industrial gases, paints and coating have a positive outlook, and the automotive industry has seen some recovery. Utilization in the industry remains stable with some weakening in petroleum. Next slide, please. This is just a visual effect of how the utilization has since steadily improved and we're now up at steadily around 94%-95%, which is excellent. Next slide, please. The market outlook. The chemical activity in the US Gulf and the U.S. rose by 2.5% on the three-month moving average. The US markets, we see steady overall, but chemicals and base oils in the automotive industry is still weak. Chemical capacity expansion is still active. Petroleum, LNG, LPG market has softened and expansion have been put on hold.
Steady flow of inquiries for additional storage in our both Houston terminal and our New Orleans terminal. Asia, the Chinese chemical market has showed signs of improved post-lockdown, but full recovery will be subject to the export market, which has not started to take off yet. The Korean market remains stable for chemicals, but Southeast Asia is lagging in recovery. Singapore's overall chemical output fell by 2.4% year-on-year in July. The European market remains steady for chemicals, although the broader market remains weak due to exposure to the automotive sector, which accounts for 10%-15% of the total chemical demand. Excluding pharmaceutical, chemicals output fell by 3.6% year-on-year in the first half of the year. In South America, our terminal in Brazil, the chemical market continues to show signs of weakness with approximately 20%-30% drop in throughput in recent months.
Signs of recovery for both petroleum and chemicals we see at the current time. Next slide, please. Moving over to Stolt Tank Containers. There we saw a slowdown in June and July. We actually saw a pickup in August. We had less shipments, we had lower transportation revenue of $9.6 million. That is lower rate and lower number of shipments. We had lower demurrage and additional revenues of just $200,000. As a result of the lower number of shipments, we also had lower move expenses. Part of the move expenses is that the fuel surcharge in the second quarter was quite high, and that is something that we didn't have in the third quarter.
We had lower repositioning expenses of $0.6 and also here saving initiatives, lower other operating expenses and A&G of $3.7 and slightly lower equity income from our joint venture of $1.4 brings our operating profit for the quarter, $17.5 million. Next slide, please. Market outlook. STC, Stolt Tank Containers is always a kind of a first in, first out good indicator where things are going. The good news is that in August and September, things have been very active, and right now they are very active. We are short containers everywhere, which is always a good sign. I'm not saying that it's less competition. There's a lot of competition, but there's a lot of activity going on. Shipment levels expected to gradually return as economy rebound. If you ask our customers, they don't expect levels to come back to normal until 2021.
I think I've covered most of it. We will of course continue to focus on the digitization and optimization of our processes. That is something that has served us well. We had a record number of shipments in the month of March when everybody was sitting at home. Our systems are working very nicely, and that's something that we will continue to work on, actually more now than ever. Next slide, please. Stolt Sea Farm. Here we saw from a negative operating loss of $4.7 million, we saw a nice recovery up to $3.9 million. That is because of higher turbot sales, both the volume and the price, higher sole sales, both volume and price, slightly higher operating expense because sorry, lower operating expense of $1.6 and lower depreciation and others of $1.1, bringing it to $3.9 million. Next slide, please.
Just a word on Stolt Sea Farm, because the people I'm now talking to are mostly shipping analysts. Stolt Sea Farm is not getting its fair share of analysis amongst the analysts that are following Stolt-Nielsen Limited. We need to do something about that. I fully understand that there's a conglomerate discount on Stolt-Nielsen Limited because we are in shipping terminals, tank containers. We are being portrayed as a shipping company, even though half of our assets are in non-shipping activities. The analysts, when they do the sum of the part analysis, are putting the right value on ships, on terminals, and on containers. Sure, relatively. Often, pretty close to the right value. They're not putting under the current structure, not putting any value on Stolt Sea Farm. Basically nothing.
I think that this is something that we need to work on and making Stolt Sea Farm more transparent. I kindly ask the analysts out there, the shipping analysts out there to ask their seafood division to have a look at Stolt Sea Farm, and we will be better at providing more information, more detailed information. When I look at how agriculture companies, land-based agriculture companies, that are trying to become land-based or are trying out recirculation technology, and if I look at the pricing that they are achieving, I start wondering, if we can continue with this current structure where Stolt Sea Farm is kind of, not getting any visibility or value under the current structure. I just remind you, we have a unique position where we have a multi-site production.
We have 13 farms around the world, so spreading our risk so that we don't have everything at one location. We have two hatcheries that supplies both sole and turbot. Our operations today are in five different countries. We sell our products in 30+ countries, and we have 450 employees globally. Next slide, please. Sustainability is, of course, big part of our reality, our everyday life now. Land-based farming is something that a lot of companies are trying. I would like to remind, or you can pass this on to the seafood analyst in your bank, that we have been doing land-based agriculture for 35 years. We have done recirculation for 20 years. These are just two pictures of our farms, but this is real stuff. It's nothing that we promise to deliver.
We have cracked the code of how to produce consistently juveniles for both sole and turbot. We have done that over 20 years, we've done research on sole, we have cracked the code, we are now ready to go on full scale. We have two recirculation plants, one that is up and running and one that will be completed by the end of this year. This is something that, it's not a pie in the sky kind of thing. We are there. We have enabled that. We have proven technology. This is something that we will work on. It doesn't help to talk to shipping analysts, that's our fault because the way we're structured. It's absolutely something that we need to work on. Next slide. Stolt-Nielsen Gas.
I'm sorry we didn't update the picture of the ship that is on sea trials. It's scheduled now to be delivered on the 12th of October. The first ship will then go to Petronas for a three-year charter. The second ship, probably at end of this year or beginning of next year, also on a three-year bareboat to Hygo, formerly known as Golar Power. We have loans in place that is agreed upon that we will draw down upon delivery for the two first ships. We have four additional ships, which is being built with SOE Nantong in China. The delivery of that one is the first half of 2021. I believe we are also working on securing financing for those four ships. Our terminal in Sardinia has been impacted by the COVID-19, but we expect that to be in operation.
It's being delayed from the end of this year to the beginning of next year. Next slide, please. That, I think, completes my part of it, and then Jens will take you through the financials.
Thank you, Niels. Good afternoon to those of you in Europe, and good morning for those of you in the United States. As Niels said, I'll review the financials and some balance sheet items, and also want to remind you that we have not only this presentation, but also our press release that came out this morning together with the interim financials. They're posted on our website at www.stolt-nielsen.com. Our fiscal year runs from 1st of December through November 30th, for those of you who weren't aware of that. I also want to mention another thing in that 2020 is our first year where we report according to IFRS 16. There are some 2019 and 2020 numbers that are not directly comparable. Just keep that in mind when you look at the year-to-date numbers.
What you have on this slide here is a view of our net profit. If we start with the operating profit before one-offs on top. You see the quarter came in at $72 million, which was a substantial improvement, up from the $51.2 million that we had in the second quarter. Not many one-offs this quarter. We had one adjustment at Stolthaven, but operating profit as reported, you see, was up about $24 million. A significant part of this improvement came from Tankers and STC. A lot of it was, as Niels explained, driven by lower bunker cost, together with also a strong recovery that we saw in Stolt Sea Farm from the relatively weak second quarter.
In addition, it's worth noting that we had quite a significant reduction in our A&G, administrative and general expenses this quarter. That's something that relates to the initiatives that we put in place early on in the pandemic. Our A&G cost year to date, if you look at that, gives you better visibility of it is actually down about $18 million, or about 12%. Some of this is due to FX impact. Some of this is also due to the IFRS 16 treatment. A good portion of it is also driven by the initiatives that were put in early on in the pandemic. Net interest expense increased as a result of the debt we took on. Also, as we retired some of the March 2021 bond, we had a write-off of debt issuance costs that typically are amortized over the whole duration of the bond.
We retired about $80 million and had to take a rated share of the debt issuance cost. Looking at the income tax expense, you see that for this quarter it was $4.6 million, up $2.9 million, as Niels mentioned. That is really tied to a higher tax at Stolt Sea Farm due to the higher fair value of the inventory, the IFRS adjustment that we do to the inventory. Net profit from continuing operations, therefore, came in at $30.5 million, and that's up from $12.3 million that we showed in the second quarter. As you will see below there was a $9.3 million loss in the prior quarter compared to $1.3 million this quarter from discontinued operations, so an $8 million swing. That puts us at a $29.2 million net profit this quarter. Also, if you take a look at the EBITDA.
EBITDA, this is before the fair value adjustment for biological assets and insurance reimbursements. That came in at $139 million, which is substantially up on the $122.8 reported in the second quarter. This is a slightly different view of the balance sheet, I'm focusing here on the covenants. You can see in the top left quadrant, you have our debt. This is gross debt of $2.54 billion at the end of the third quarter. Slightly down from $2.568 in the prior quarter. Likewise, you're seeing an increase in our tangible net worth, which is the light blue column coming up at $1.607 billion, up from $1.58 billion in the second quarter. Those two improvements combined resulted in our debts to tangible net worth coming down from $1.62 billion in the prior quarter down to $1.58 billion. Again, this is measured basis IFRS 16.
For those of you who are used to seeing this pre-IFRS 16, it means that we would have been about at the one and a half to one, perhaps even a bit lower this quarter. Commensurate with the target set by the board. Going to the right-hand side, you see another one of our covenants is EBITDA to interest expense. With the improvement in the EBITDA, that ratio also improved to 3.41 for the quarter. To the bottom left, you have our net debt to EBITDA, not exactly a covenant, but still an important measure of our leverage, and that dropped significantly down to 4.85 for the quarter, driven by the stronger EBITDA.
If you look at the bottom right quadrant, you can see part of the driver here in that we are seeing lower EBITDA quarters dropping off and higher EBITDA quarters being added to what is a 12-month rolling total of the EBITDA. I mentioned the impact of IFRS 16. If you compare like for like, the impact year to date of IFRS 16 on EBITDA is about $35 million. If you compare those two, that means overall EBITDA year to date is about a $5 million improvement. That still does not negate the significant improvement that we have seen throughout the year where we started with a weak quarter but now showing strong signs of improvement. That $35 million equates to about 11 and a half. Still, if you take out 11 and a half of the third quarter, it's still very strong quarter EBITDA-wise.
Looking at our capital expenditures. Year to date, we have done $117 million. For the quarter, the third quarter long, we spent about $44 million. This is driven by $22 million spent in the tankers, and that includes about $14 million on the progress payments for the five ships that we have bought. We also spent about $16 million in terminals, predominantly in New Orleans and New Zealand. Also as part of our commitment to Avenir, we injected a further $5 million in additional equity as they are getting ready to take delivery of their first ship. Stolt Sea Farm completed the construction earlier this year of the Cervo recirculation farm. The part that you see here is our net contribution for the Portuguese farm, about $2 million in the third quarter. That farm is expected to come on in 2021.
The CapEx, you will see for 2021 has now increased significantly for tankers, and that's of course reflecting the acquisition of the five ships from CTG. Next view here is really a development of our liquidity position as we go forward. If you start on the left-hand column, you will see where we ended the second quarter with $230 million in cash and $181 million in availability under our two revolving credit lines. For a total of $411 million. During the third quarter, we saw operating cash flow of $107 million. We had the capital expenditures that I just went through of $44 million. Under other investments, this includes money spent on dry docking. Well, dry docking was about $5 million for the quarter, and in addition, we sold assets for about $10 million.
That actually had a positive impact of $5 million. If you look at these three combined, that means our free cash flow ended up being $68 million for the quarter, marginally up from $64 million in the second quarter. Also, we did the bond in June that Niels mentioned, SNI09, $132 million inflow. About $80 million of which was used to retire the March 2021 bond, and a further $32 million on regular principal payments for a total of $112 million. We had repayment of the outstanding balance on the main revolving credit line that we had of $130 million. After that repayment, we have not drawn anything on the revolving credit line that's fully available for use. We also paid down $12 million on our finance lease liabilities.
If you add in also the effect of the exchange rates effects, we ended up with cash of $184 million, so slightly down from $230 million, but a substantial increase in our availability under our two revolving credit lines, up to $311 million for total liquidity of $495 million at the end of the third quarter. To remind you of our objectives is still that we want to improve our free cash flow, reduce debt, and maintain a strong liquidity position going forward. That leads us to finally the maturity profile. You see that we have about $48 million left for the rest of 2020. With our liquidity position, pretty much all of the 2021 is taken care of. We are in a very good position going forward. The March 2021 bond, this SNI05, will be repaid with cash on hand.
In addition to what we already showed you on liquidity, we are working on additional facilities. One $65 million facility to be secured by the Moerdijk and Dagenham terminals, expected to close in the next few weeks. Also the $100 million revolving credit facility as part of our COVID initiative, just to make sure that we have access, should it be necessary, to additional liquidity in case there should be a what we call a worst case hit from the COVID-19 pandemic. In addition, we will now start also working on financing the five CTG ships that were acquired. Two of those will go into our joint venture with NYK, and there will be non-recourse financing secured for those two ships. Three ships we will take on our own balance sheet. With that, I would like to pass it back to you, Niels.
Key messages before we open up for questions. Relatively strong quarter, with nice contribution from all the businesses. Makes us cautiously optimistic that maybe it's not going to hit us as hard as we initially expected. However, we are prepared. We hope for the best, we plan for the worst. We are ready if there is a further slowdown or if there's further restrictions in the world due to the pandemic. Jens showed you that we have a strong liquidity position. We have taken early actions, not only short-term action, but I think we have learned a lot of potential long-term savings coming out of that exercise. It's a favorable supply-demand, at least supply side, in tankers. When the global economy eventually do recover, we should have a strong shipping market, and then we will proceed with the IPO that we have planned for.
We believe, we are seeing steady as she goes, Stolthaven, steady improvement there. Stolt Tank Containers, also great activity, steady improvements as she goes in both terminals and tank containers. Sea Farm, we saw a nice recovery in the third quarter. Of course, a big part of that market is in the restaurants and the hotel sector, if there is a major lockdown again, that might be impacted, long-term prospect for that business continue to look fantastic. I think we are in a strong position, we are well prepared for whatever may come our way. Operator, or how does it work? We are now open up for question. Regarding the COA renewals, is the 3.9% increase a number compared to the same period last year?
The 3.9% is what we achieved in the third quarter. Each quarter, we announce the results of if we were able to, on average, to get an increase or decrease, so it's comparable to previous quarter. How much of the cost reductions are sustainable versus temporary one-offs? Well, that is a discussion that we have internally, and I don't want to put a number on it. A big part of it is because we have a hiring freeze, we have promotional freeze, we have cut back dramatically on consultants, we've cut some salaries, which is not sustainable in the long run, and we have a hiring freeze, and no travel and entertainment.
Of course, we have learned that we are able to do the same amount of business under this kind of cost structure, and we are now analyzing what we can save long term and maintain long term, and what needs to come back towards normal. I don't want to give a number, but I think there are savings that we can get out of this and this exercise. What about a partial spinoff of Stolt Sea Farm? This is again, Philip Sisney. Well, we need to do something, because under the current structure, the analysts, I understand that maybe the shareholders or the equity market continue to price Stolt-Nielsen as a conglomerate, and they look at us as a shipping company, and shipping is totally out of flavor these days. There is justification for keeping tankers, terminals, and tank containers together.
The fish, the Stolt Sea Farm, I've always said that we have built up an absolute fantastic knowledge in both turbot and sole, and we have spent 20 years in developing sole. I don't want to do anything with that business before we are able to show the EBITDA coming from that 20 years of investments in developing the species. If you look at other industries, other companies that are listed, that are trying to develop land-based farming or recirculation farming, and you look at their pricing, some of these companies haven't produced a ton of fish and are priced higher than the market cap of Stolt-Nielsen Limited. We are exploring the opportunities. We are looking at various ways of how to get the valuation more transparent for Stolt Sea Farm. You mentioned increased ocean freight costs for containers to impact margins.
How big share of your container activity is seaborne traded versus land-based traded? I would say that 90% of our business is seaborne and 10% probably is domestic. Now remember, both the trucking and the ocean freight is to pass on through the customer. It lags. When the cost goes down, it takes a longer time to pass down to the customer. When the costs go up, we are trying to be as quick as possible to pass it on. There is always a lag. Just to answer your question, I think that I can come back to you with the exact number, but I would estimate that 90% of the container moves are over the ocean. What kind of COA coverage should we expect going forward, for example, for the fourth quarter and 2021? I think that 70% is pretty correct.
You can plan on that. Would a spinoff Stolt Sea Farm in a separate IPO through a dividend to the existing shareholder be a potential structure that you could look at to achieve proper valuation? Yeah, there's different ways of doing it. We're exploring to see what are the alternatives. Sir, Mr. Stolt-Nielsen said that "Let's hope it will increase" when talking about SNI index, now at 0.61. However, looking at the report chemical tanker spot rate reported quarter to quarter, that could perhaps seem a tiny bit optimistic. The index that we report are actually numbers, so that's not being optimistic, that's just reporting the fact. As you correctly point out, the reports from July and August show a drop in spot rates. That is really why we went long, been focusing on long contracts, and that's why we have a 70% contract portfolio.
The only thing I can say is we think it was a slowdown as a result of the summer, that we are seeing in September and also continuing into October, that the nominations that we see on the contracts are healthy. We are not seeing any kind of fundamental deterioration in the chemical tanker segment. That is .
Okay. Sorry. Go ahead, operator. There's one on the phone.
Thank you. Your first question comes from the line of Anders Karlsen. Please go ahead, your line is now open.
Yes, good afternoon. My question goes a little bit to the five vessels that you are acquiring. You said two will go to NYK, but the others, are they going to be replacing existing tonnage, or are they going to be an addition to whatever you have today?
Let's look at the five. The five ships that we acquired this summer. They were ordered for $42 million, $43 million. I think Odfjell bought them for around $40 million, $41 million a piece. I'm pleased to announce that we bought them for $27.1 million a piece. Of course, you have some takeover costs on top of $27.2 million. These ships will enter into the Stolt-Nielsen pool. It was an opportunistic buy. In the short run, it will be an increase. Of course, we have an aging fleet, and we have no new building program. I guess this gives us a little more room before we need to start ordering new ships again. This is a win-win for everybody.
We don't add additional tonnage into the total chemical fleet. It replaces some of the older ships that are scheduled to be renewed. We don't have any like, these will be replacing those ships. In the short run, it will be an addition. There will be no total addition to the chemical fleet in the world. There will be addition to our fleet. We will recycle ships that are between 25 and 30 years old, as we feel when the time is correct for that.
Okay. A little bit follow-up to an earlier question linked to G&A costs. It kind of seems very random how they evolve, I guess, except that they are very much down compared to where they used to be. Once again, can you say a little bit more about what level is a sustainable decrease and how much can we expect to move up again when you do go back traveling and all of these other things that are closed down during COVID?
It's very difficult to say. I think that we should be able to retain some of these savings permanently. As we grow as an organization and as you have a salary inflation, et cetera. I think overall, we should become more productive and more efficient. I don't think it's necessary. I don't think people want to travel as much as we did before. I think that the way we are doing and talking to each other now, I think it's very important to have face-to-face meeting, but maybe not as much as we used to. I think the world has changed, and so will we. It is too early, and we will work on it, and now we are working on it to see what is permanent savings and what we have to go back to. We can't forever have a hiring freeze.
We need to do promotions, and we need to a certain extent, have external consultants help us. Of course, we have learned during this lockdown that we were actually able to deliver an excellent service working from home, not traveling, not promoting, not hiring. Just with the current resources that we have, we deliver an excellent, uninterrupted service to our customers. We need just to find the right balance. The only thing I can say is that there will be permanent savings from this exercise, but you're not going to get me to say what number that is going to be. Trust me, it is very much a focus of the organization.
Okay. A quick question on the container side. The movement cost per container this quarter was the lowest that I have seen, at least dating back to 2008 or something. You said something that you expected it to come back. Is it going to come back to more normalized levels? Is this a one-off quarter with such low cost base for the container segment, or can we expect to see lower costs moving around containers as a standard going forward?
I think that the move-related costs came down significantly because they were, I wouldn't say artificially, but they were high in the first and the second quarter, driven by the fuel surcharge because of the low sulfur fuel coming into effect 2020. I also think that there was a lower number, that trucking costs were low because of low activity during the pandemic, so that cost came down. The ocean freight didn't come down because they were able to manage the supply side of the number sailing. Instead of me guessing, let me just, Jens, make certain that we come back with that information to see if we believe that we will come back to normal cost or if there's permanent savings on transportation costs, too. We'll come back to you.
Okay. Just a final, a little bit of defense to the shipping analysts. You've never been very open about anything in Stolt Sea Farm, so it's kind of difficult to judge. I've been following the company for a few years, so there's never been any volumes or anything on a quarterly basis, and it makes it difficult to address.
I fully understand.
Feedback from a shipping analyst.
Yeah.
But-
I'm not-
That's okay.
Yeah. Thank you very much. It's our fault the way that current structure is. My message is that we need to make Stolt Sea Farm more transparent so that it gets the proper valuation, both by the analysts that follow the company, but also by the market. We will look into that and look at our alternatives. We have not received any further questions here. Operator, are there any other questions?
We do have one more question on the phone line. This comes from Lukas Daul of ABG. Please ask your question.
Thank you. Good afternoon, gentlemen. I was wondering, the financing plans going forward that you have put on slide 39, when that is carried out, will you have any unencumbered assets left that you can use as collateral?
Yes. We still have some terminals that are unencumbered, and investments in the joint venture terminals that are unencumbered. I think if you look at more specifically, the Australian, New Zealand terminals have no debt against them, neither the Brazilian terminal, and neither the Korean terminal that we are holding in that terminal.
Okay, very good. On the bunker costs that you sort of touched upon in the beginning of the presentation, going forward, could the rule of thumb be that whatever your purchase cost was in the prior quarter, that's what's going to be the consumed cost in the following quarter?
Not directly. The lead time isn't a full whole quarter, so it's difficult now to say that looking at the purchase from this slide that is on the screen now, the $307 in the third quarter may not be exactly what we'll have as a consume cost in the fourth quarter. The second quarter purchase equals the third quarter consumed pretty much is a bit more of a coincidence because the prices came down and then came slightly back up again. If you assume that the $307 gives us some visibility into the fourth quarter, and then we have to apply a bit of delayed impact from what we see happening in bunker prices, that should give you a way of getting an approximation of what the consumed cost might be in the fourth quarter.
Okay, that sounds good. Thank you.
Thank you. There are no further questions at this time. Please continue.
Thank you very much for attending our earnings call, and we'll talk again for the fourth quarter. Thank you very much.
That does conclude our presentation for today. Thank you all for participating. You may now disconnect.