Thank you. Good afternoon, good morning. Thank you for joining us for our second quarter's earnings release. I do apologize for the delay in the start up. We have had some technical issue in uploading the presentation that we are about to hold on our webpage, but you will be able to see the presentation, which I will be referring to.
If you go to our webpage to the section of Investor Presentations, you will follow it on the webcast. Again, apologies for this. Together with me, as always, Jens Gruner Heggen is Chief Financial Officer. If we go to Page three, which is the agenda page, I will go through the second quarter highlights. I will take you through the actions we have taken in regard to the pandemic, COVID-nineteen.
I'll go through each of the businesses. Jens will take you through the financials and then we will open up at the end for question and answers. If we then move to Page four, which says highlights of Q2 twenty twenty, better than expected. We reported a net profit from continuing operations of $12,300,000 for the quarter, and that's up from a loss of $19,300,000 in the previous quarter. Stolt Tankers reported an operating profit of $20,000,000 and that is up from 4,700,000.0 That mainly reflects the increase in, Deep Sea revenue, which was, driven from healthy COA nominations, strong volume from the COA nomination, a strong spot market and also increased number of operating days.
Installed payment terminals, we reported an operating profit of 19.2%, and that is up from 18.9 I just got a message in here. The presentation is now uploaded on the website also. Again, 19.2 in the second quarter, up from 18.9 in terminals as the market overall remained stable. Utilization rose to 95% in our wholly owned terminals and to 97% in our joint venture terminals. Stolt Tank Containers reported an operating profit of $13,000,000 and that is up from $6,700,000 in the first quarter.
That is a result of higher demurrage and lower repositioning costs. The total shipments were basically unchanged, though we were able to get higher utilization by 1.7% compared to the previous quarter. So Sea Farm reported an operating loss of $4,700,000 which includes an impairment of $1,800,000 That compared to an operating loss of $8,800,000 in the first quarter, which reflected a $12,000,000 write down of our biomass in the first quarter. We have classified sterling caviars as held for sale, and we have taken an impairment of $8,100,000, in the quarter. As always, I will go into more detail when I go through each of the businesses.
If you go to Page five, where we compare the net profit from the first quarter to the second quarter for the group, operating revenue came in at 503 point dollars $5,000,000 that is up from $479,100,000 in the first quarter. EBITDA, dollars 100,000,000, and that is up from $100,000,000 in the first quarter. Operating profit, 49,400,000.0, that is up from 17,600,000.0 in the first quarter and a net profit for the quarter of $3,000,000 Now I previously reported in the previous slide that we had a net profit from continuing operation of 12.3 The 3,000,000 reflects then the impairment and the write down we did on our Sterling Caviar. So if you look at from ongoing operation, we would actually have had a 12,300,000 profit. If you look at the variance analysis, we had a net loss of $20,200,000 in the first quarter.
We have $15,200,000 better operating profit from Stolt Tankers, dollars 300,000 better operating profit from terminals, 300,000.0 higher operating profit from tank containers. We had a lower operating loss of 4.2% installed Sea Farm and 5.7% improvement in corporate and other operations from corporate and that mainly reflects the recruitment or a reduction in the recruitment of profit sharing to the organization. We had a lower net finance expense of 1,600,000.0 due to lower interest rates, slightly higher non OpEx and FX losses of 1,300,000.0 slightly higher income tax of $05,000,000 and again, the $8,300,000 CFAR loss from discontinued operation, that is again the write down of the Sterling Caviar. And that gives us a $3,000,000 profit for the quarter. Moving to Page six, COVID-nineteen, the action list update.
Our goal is, of course, to preserve cash. As I reported in the first quarter earnings release, immediately when the pandemic hit us, when we went into lockdown, we were very much focused on preserving cash. And we have taken actions and we continue to take action. We canceled our dividend, the fine dividend for '19. We cut back on all travel and entertainment and training.
The board and the senior management did a voluntary salary cut. We cut back on professional fees and contractors. The total savings from those actions are so far $21,000,000 In addition, we reviewed all the CapExes and needs of the businesses, and we identified $62,000,000 which we can either cancel or delay. So a total of $83,000,000 of cash savings that we have identified in 2020. The target then also was to secure sufficient liquidity to weather a substantial downturn.
We went through, each of the businesses, and we asked them to go through a scenario where we do a twenty, thirty, 40% downside in revenue. Not that we necessarily believe it's going to happen, and this is important to to stipulate is that it is just a preparation. It doesn't mean that we necessarily believe it's gonna happen, but we we we really work under hoping for the best but preparing for the worst. And the market and the world that we live in now is so uncertain, so we want to make certain that we are in a position to ride out whatever comes our way. At the end of the quarter, we had $411,000,000 of available liquidity, very much thanks to Jens and his team of securing necessary liquidity.
We have 65,000,000 financing secured by two terminals. The term sheet has agreed upon and credit has been approved. So that's addition to the $4.11. As you know, we did a successful $132,000,000 bond issue in June, and we're also in discussion of popping up an existing terminal facility in Singapore. And we're also considering an additional 100,000,000 RCF loan credit facility.
As it stands right now, we have approximately $465,000,000 of cash and overdraft facility available. And that's what we have now. And, of course, then we also have the other finances or or opportunities that we are pursuing as as listed on page six. But, as you realize, we'll put us in a position to have enough liquidity to repay the bond coming due at the end of the year in the first quarter in March of twenty twenty one. It also with the additional financing beyond what we have already secured, but listed here, we will have enough liquidity to face a 40% revenue reduction and still be able to meet our obligation and still have liquidity reserves.
Again, hoping for the best, but preparing for a prolonged downturn. If you then move to Page seven, Page eight, Stolt Tankers second quarter highlights. I would like to remind you that the first quarter, we had a poor performance in Tankers, not very much driven by the COVID-nineteen, but because of the repositioning of ships and the delays in dry docking due to ballast water treatment installation and also scrubber installation. So we had around 300 a little over three hundred days less operating days in the first quarter compared to the second quarter. So much of the improvement that we see is, of course, the more operating days because we didn't have the delays related to the dry dockings.
The operating revenue came in at €293,900,000 That is up from 280,700,000.0 The EBITDA went from 49,500,000.0 up to $65,000,000 The operating profit, again, from 4,700,000.0 up to $20,000,000 and the operating days rate went up from 618 up to 6,018 up to 6,329. If we look at the operating profit variance from first quarter to the second quarter, our operating profit came in at 4.7, $15,300,000 higher trading results, 3,600,000.0 higher net bunker cost. And you have to remember that we are over 70% contractor for freightments, and they have a bunker clause in each of the most of those contracts. So when the bunker prices are high, we got a lot of surcharge. When the bunker prices are low, we need to give money back.
So that's why under the CUAs, we have to basically give most of the the benefits back on the when they when the bunker prices fall. So our net cost for the quarter was marginally lower, 1.5, but because we had a paper hedge loss in the quarter of approximately $4,000,000 the net cost for the group came in at 3,600,000.0 We had a 2,300,000 lower operating expense, slightly higher depreciation of $1,100,000 and higher equity income from our joint venture of 2,400,000.0 bringing the quarter's operating profit for tankers to $20,000,000. If you go to page nine, the contracts that we renewed for the quarter the contracts that we renewed in the second quarter were on average up 5%. And I would say that under these circumstances, that reflects a relatively strong market taking the the the current environment into consideration. It reflects the, I think, the balance between supply and demand, as currently stands is working in our favor.
The volume, were up a total of 9%. COA volume up 15%. When we have when we have a higher bigger nominations from the COA, we have less spot space, so our total The freight rates overall of the volume that we carried was up 1%. The COA rates that we carried during the quarter was up 2%, while the spot volume was down 0.4%. Now we we stipulate in the earnings release that the spot market was strong, and it was strong.
But the bunker prices fell significantly in the quarter, so we really got the benefit from a lower bunker price, but the spot rates didn't go down. Utilization went up by 3% and the sailed in revenue for the Deep Sea fleet went up 13% for the quarter. The Clarkson, now of course, the second quarter we had a strong MR market, which then meant that the Swing Fudge didn't operate that much in our segment. And as a result, we saw the strong spot market and then, of course, enjoy that. If you look at the Clarkson spot chemical index, you can see that towards the end of the second quarter, the the spot index fell, and I think that unfortunately reflects the fall also in the MR market.
And that may be, of course, an indication of what is to come for the third and fourth quarter. If we go to Page 10, the average price of the IFR and the variable sulfur fuel consumed was $388 per ton in the second quarter, and that compares to $501 per ton of the price of what we consumed in the second quarter. The average price that that of IFO and very low sulfur fuel that we purchased in the second quarter was $274 per ton, and that compares to a $546 per ton in the first quarter. As I already mentioned, much of the benefit of low bunk costs is passed through As tankers was burning older higher cost inventory, while bunker search up clause rebates based on the lower stock price.
So only the net benefit that we had for the quarter was really 1,200,000. If you go to page 11, which is the SGJS, slow tankers joint service, sailed in time charter index and sensitivity, you can see a nice significant pickup in the second quarter. And you can read at your convenience the sensitivity. If we have a 5% increase in index, that gives us a net profit impact of 5.6. So every 5% is around 5,600,000.0 at the on the bottom line for tankers.
If you go to page 12, we have a historic low order book in our segment, and I think that it will continue, because of the environment that we live in. The order book is at stands at now at 5.4%. That is slightly up from 5.3 in the first quarter. So there were some few ships being ordered, not really big ships, but more small sized ships. During the same period, we also expect that the older ships confronted to 24, approximately the same amount of dead work will leave our segment, but probably towards the later part of that period while the new buildings will come in in the earlier part of this period.
The core chemical deep sea feed growth will significantly drop. So the growth will drop in 2020 and 2021 as you see on the chart here. We do, however, expect maybe that the pandemic is causing delays in the new buildings and the orders, the ships that are on order. So as as I stated, we have had a challenging shipping market for a long time, and finally, the order book started to, come down and and the the balance between supply and demand came into our favor, and then then this damn pandemic came along. But still, under these challenging circumstances, we are able to get a a, increases in our COAs, which I think believe is a reflection of of this, supply and demand being in our favor and definitely so going forward.
So if you believe in a in a v shaped recovery, I believe we will have a very strong market in chemical tankers going forward. 13, and here's the market outlook. It's impossible to predict, or it's very difficult to predict. You know, we're hoping from the best start preparing for the for a downside scenario if that comes. The May sales in revenue was the highest we have seen since November, and all trade dates were, of course, boosted by the strong CPP or the MR market and also the lower bunker prices.
The US Gulf to Asian mark and India market was strong, but we saw weaker demand or weaker shipment demand in in the Atlantic, Transatlantic East and West, and also in South America. And then my market is down. You know, it came up to almost 72 or $73,000 a day, and it's today around 10,000, maybe even lower. What I can say, is that nominations continue to be healthy. We are seeing more swing tonnage coming back into our segment because of the weakening of the MR market.
However, again, the nomination are relatively healthy in most areas. July nominations looks pretty good. We are a bit worried about what will happen in August and after that. The European fleet, so I will go through the regional fleet. And the regional fleet, the European fleet is the one that is suffering the most.
We are it's extremely low activity. We haven't seen it that slow. Unfortunately, we have a relatively small fleet there, so the financial impact is not that big. If you look at all the regional fleets, which we own 100%, which is the inter European business, the inland barge business, the Inter Caribbean business and the transhipment business in Asia. The actual results, went from $1,200,000 profit in the first quarter up to $3,500,000, in the second quarter.
So there was an improvement primarily driven by Schmitz, the inland tanker business, the barge business and the Caribbean business, while the European business was very challenging. If you look at the Asia Pacific business, that's what we call SNAPS, which is a joint venture with MYK. We saw an improvement there. We went from a $05,000,000 loss in the joint venture in Asia to a slight $200,000 profit in in in Asia. I think that reflects the pickup of activity in Asia, and we expect that snaps will continue to see improved performance.
If we then move to the terminal business on Page 15, here again we compare the operating profit between the first quarter and the second quarter. It it continues to steadily improve. And this is, again, what I call the steady long term steady cash flow coming out of this business. And the team are doing a very good job in in in the situation. You know, we we talk about the people that are sitting and working from home, but there are some work that cannot be done from home.
Those are the seafarers. Those are the operators that are on the frontline, and they've done a tremendous job in keeping the operation going. My hats off to the whole team. The operating revenue went from 61.7% in the first quarter, slightly down to 59.7 the EBITDA from 33,400,000.0 up to 35,300,000.0, and the operating profit from 18,900,000.0 up to 19,200,000.0 in the second quarter. And utilization went from 90,500,000.0 up to 95.2%.
If you look at the operating profit variance, the first quarter was 18,900,000 slightly lower revenue. So lower revenue but higher utilization. We were able to secure some trading business from some traders. We filled up our tanks, lower paying business, but higher utilization. So the overall positive benefit because there was lower operating expenses associated with that with those contracts.
Slightly higher depreciation, higher equity income of EUR 400,000.0 and lower A and G and other expenses of EUR 300,000.0, bringing the operating profit to EUR 19,200,000.0 for the quarter. Steady as she goes, and this, I think, this is the segment where we actually are the most comfortable because of the contracts and the customer base and the locations of our terminal. If you go to Page 16, installed tailings terminals performance, stable and steady performance throughout the quarter. The terminal The US terminals were stable utilization and stayed up above 90% and fully operational during the lockdown. The Brazil and Europe 15 terminals saw a drop in chemical and throughput, but we saw healthy ethanol demand in Brazil.
The ANZ, that's the Australian and New Zealand terminal and the Singapore terminal saw an increased activity during the second quarter, which helped to increase the utilization to 94%, almost 95%, up from 90%. The equity income from our joint venture went from $5,600,000 up to $6,000,000 to the quarter. If you look at the graph below, it kind of illustrates the steadiness of the performance of this business. And I think it will continue to do so going forward. If you look at the markets, The US market, going forward, US market overall steady, but chemical and base oil into ultimate automated automotive industry, is still weak.
I mean, part of our business is, of course, rewards, and, of course, those are still being stored, but there's very little throughput. We are seeing still lots of inquiries, and we are pursuing lots of opportunities both in the Houston and New Orleans terminal. Asia, the Chinese chemical market had a slow showed signs of improvement post lockdown. The the Korean market remained stable for chemicals, but Southeast Asia is lagging in recovery. The European market, I think, was probably the most challenging because of the European economy.
European market remains steady for chemicals, although the broader market remains weak due to the significant exposure to industries such as car manufacturing. The petroleum storage, which we have at our Otza terminal in Antwerp, remains strong. The Brazil market, steady. The chemical market continues to be a sign of weakness with a pickup expected once lockdown eases. And the petroleum and ethanol markets remain more stable, including on the throughput.
If you then go to Page eighteen and nineteen, Page 19 for Stolt Tank Containers, Operating profit, 135,200,000.0. That's up from €129,400,000 in the first quarter. EBITDA increased from 16,500,000.0 to 21.2 Operating profit up from $6,700,000 to $13,000,000 and utilization went from 68,500,000.0 up to $69,700,000 So a very, very good picture. I would like to remind you that we had an issue in the first quarter, where we had some higher contract charges because of the uncertainty, know, tanker tonnage is always a early reactor to to changes in the market. So if we compare the first quarter to the second quarter, we had higher transport revenue of half a million.
We had higher demurrage and additional revenue of 4.3. We had higher other revenue of point eight. That's like these add on charges that we did. We had lower move related expenses in the second quarter, so lower trucking expenses, lower ocean container line expenses, and we had less repositioning expenses. We were hit by repositioning expenses in in the first quarter, less so in the second quarter with higher repositioning costs in the first quarter, less so in the second quarter.
And higher other operating expenses of $3,000,000 brings the operating profit for the total tank container business to 13,000,000 for the quarter. The tank container market highlights. Demand was firm during the second quarter. Shipments were slightly down, but margins were up due to demerrage revenue. The total shipments were about flat for the quarter, quarter on quarter, but actually tailed off towards the end of the second quarter.
Volumes into and out of Europe were weak and continue to be weak, but it was offset by good volumes out of US and South America. The demurrage revenue was up due to strong shipments in February, March. And when the customers receive the tanks, they've been holding on longer on to those tanks, which, again, I guess, reflects that the the the product is not moving through the factory fast enough, and they use our tank containers as storage and then recharge them the merge, which is good for us. Repositioning costs were down due to well positioned tanks relative to man and less intraregional shipments, so more long haul shipments. The ocean freight, as I said earlier, has come down as container line market has softened.
If you go to page 21, looking forward, this kind of reflects the bottom graph reflects the development of the tank container fleets, and you can see that we have been growing and expanding aggressively for a long time. And we're hoping we will continue to do so going forward. This market continues to grow, and the fundamentals in this market are very strong. As I said earlier, there are more operators, more competition. But through our platform, we are very well positioned to be able to compete profitably and this market continues to grow.
As we see the market now, we see that the Asian markets remain busy and good demand in oil and chemical trade, an increase in exports to Europe. So the Asian export business is doing well, looking healthy. The European export is down due to the lockdown, and also the European demand is down due to lockdowns in Europe. The South American exports are strong and a positive outlook for the coming quarter. Demand in North America is holding up thanks to the the diversification of our customer base.
And the food grade business is very strong and doing very well. I guess we tend to consume more alcohol during when we sit at home in a lockdown. After second quarter, shipments were down. So as we've mentioned, we saw a drop in shipments in June, but actually, the July shipments or bookings have been picking up again. So it's too early to say.
It's very difficult to predict, but we thought we saw a drop in June. We did see a drop in June, but we actually started to see a pickup again in July. And, also, this is the summer months, so we usually do see a drop off. So is it because of COVID nineteen, or is it because of seasonal? It's it's difficult to predict.
But, overall, I'm I'm bullish that the STOLT tank containers will be well going forward. Then moving to store C front, that is the business that has been hardest hit because of the COVID nineteen. I remind you that the turbot pig water is what we call the Norwegian, but the turbot business is primarily sold to the retail sorry, to restaurants and hotels and all in Europe and most all over the world, and that have impacted our business quite significantly. On Page 23, we compare the first and second quarter again with operating profit. Operating revenue, 13,600,000.0 for the second quarter.
That's down from 24,000,000 in the first quarter. EBITA, negative 1,600,000.0 in the second quarter, and that is down from 2,900,000.0 in the in the in the first quarter. And the operating loss was 4,700,000.0. That is down from 8,800,000.0. I'll remind you that we did take a $12,000,000 impairment on our biomass in the first quarter, which we didn't have in the first in the second quarter.
So operating profit or actually, operating loss for the first quarter was 8.8. Lower turbot sales in the second quarter, so less volume being sold in the second quarter at lower price, lower sale of Sol. We have lower operating expenses because of the actions that we have taken. And also when you harvest and form less volume, of course, the expenses go down. And we had we did have the impairment that we had in the first quarter, so a less impairment of 11.6, slightly higher impairment of 1.8, and lower AMG of positive 0.2, which pays the operating loss of 4.7.
If you go to page 24, the market has been weak for seafood, especially the high value species like turbot and saw. We have adjusted our prices to the weak demand, which has allowed us to keep the flow of sales going. And we have switched the sales, and we pushed more into the retail segment rather than the restaurant and hotels. Our action plan, as a result of the COVID, we have successfully taken steps to preserve cash. They have secured their own finance, local financing, so Exposito has not been a cash drain on the group.
They have been able to get extra credit from our vendors. We have held back on CapEx and higher fees, and we have achieved grants from, the local government. We have they are very much focused on the working capital and we with no relevant bad debt. We've reduced OpEx by the reduction of biomass. We have improved the feeding efficiency.
We have reduced the energy consumption, and we have tight control of the maintenance expenditures. How does the rest of the year look like? Well, we have written down the biomass. So and I think that the the the value of the biomass that we have now in full Sea Farm is at less than €6. We are now selling above €6.
For us to go breakeven for the remainder of the year, in full CFARM, we need to have a price of 7.5, and we are down 6.6 as we speak. So I think we we have we have reached the bottom, and the markets are now opening up again. As you most most of you know, that's Spain, Italy, France, they're all opening up. The restaurants are opening up. The hotels are opening up, And we are seeing, actually, quicker and earlier than we expected the recovery in this market.
So I believe the bottom has been reached in StoneCity Farm, and and, yeah, hopefully, we'll get back to our normal prices quickly. Stolt, gas, not much to report. We have, as you know, fixed, one ship to Petrolas, the first ship for a three m time charter. Now the challenge here is, of course, that the ships are being built in China, and they are being delayed. But we're working together with our charter with Petronas, and they understand, and we're working together.
So we do expect the ships to be delivered at the end of the third quarter so that we will start generating new revenue there. We also have a one ship on bareboat to Golar Power, We believe that that ship will also be the the second ship will also be delayed. But, again, we're working together with Golar Power, and I expect that that ship will not may slip into 2021. There are high active so there's a lot of activity going on Sardin on page 27. The terminal that we're building there is also being delayed.
We now believe that we will be operational at the end of the year, again driven by COVID. But also, we are working on on and making great progress in in in selling LNG to the local market. So it overall looks promising. When we get the cash flow from the two first ships, it will certainly help. We do not expect that we need any further equity to be able to take delivery or meet the the investment that we have committed to.
That brings me to page 28, Jens, to take us through the financials.
Okay. Thank you very much, Niz. Again, good afternoon, and good morning to those of you calling in from The United States. I will, as per normal, provide details about the financial results that we released today for the second quarter. And considering the COVID nineteen pandemic, I'll also give you an outlook of our cash flow forecast going forward, something we usually don't do, but we thought it was important to to share that with you.
I want to remind you that we have today filed our financial statements for the second quarter with the Oslo Stock Exchange. And as Panold, you will find the press release, the interim financials as well as this investor presentation posted on our website, which is www.stoltnielsen.com under the section Reports and Presentations in the Investor section. So moving on to Slide 29. This is the Stolt Nielsen Limited net profit loss overview. Operating profit before one offs for the second quarter was $51,200,000 That's significantly up from the $29,500,000 that we posted in the first quarter, and that's really reflecting the good recovery in both tankers and tank containers, as Nils discussed, and reduced operating loss in Stolt Sea Farm.
Also terminals had a steady performance, but a strengthening U. S. Dollar during the second quarter masked the positive impact of the improvement in utilization that was achieved in terminals, and that was predominantly in Singapore and Australia. During the quarter, you will see we wrote off capitalized expenses of $1,800,000 that was at our sole farm in Iceland. And consequently, the operating profit for the quarter was $49,400,000 up from $17,600,000 in the prior quarter.
Net interest expense continued to go down and was $33,400,000 for the first quarter second quarter, and that was a decrease of 1,600,000.0 And we had an FX loss, small FX loss of $1,000,000 The group tax charge for the second quarter was 1,700,000 a $05,000,000 increase from the prior quarter. Also, as Niels mentioned, in the second quarter, we reclassified the Sterling Caviar business as held for sale. And in the process, we wrote down the assets of the business by 8,100,000.0 Consequently, we can report a net profit from continuing operations, which now fully excludes the Caviar business. So the continuing operations profit was $12,300,000 That was a good improvement from the loss of $19,400,000 in the prior quarter. The loss that we took from discontinued operations was $9,300,000 That is the $8,100,000 that we wrote down the business with as well as the quarterly running loss of 1,200,000.0 And you will see that we have excluded the caviar business from prior quarters as well.
Consequently, the net profit came in at 3,000,000 for the quarter, and EBITDA came in at 122,800,000.0. And, again, note that the EBITDA is before the fair value biological assets, insurance reimbursements, and other onetime noncash items. Can we move on to page 30, please? This time, we have decided to show you a different view of the balance sheet, and we're focusing more on the covenants. If you look in the top left quadrant, you will see that the total debt at quarter end was $2,567,000,000 and that's down from $2,585,000,000 in the first quarter.
Tangible net worth remained flat at 1,580,000,000.00 And consequently, we saw that the debt to tangible net worth ratio declined slightly from 1.64 to 1.62. If we want to look at net debt, subtracting out the cash, net debt was at $2,340,000,000 at the end of the second quarter as we had a significant cash balance of $230,000,000 Total assets for the quarter stood at just over 4,700,000,000.0. Looking at the other column, the EBITDA to interest expense to the right, you'll see that with the improvement in the EBITDA that we experienced in the second quarter, the EBITDA to interest expense ratio improved to 3.18 from three point o five in the first quarter. And keep in mind, this is calculated over the last twelve months. So likewise, our net debt to EBITDA had a significant improvement from 5.64 to 5.27, as you will see in the bottom left quadrant.
Our liquidity position at quarter end stood at 411,000,000, and that's made up of $230,000,000 in cash, as mentioned, and a $181,000,000 in availability under the revolving credit line. This is down from the prior quarter, but keep in mind, at at the end of the first quarter, we had just raised a $142,000,000 bonds to prepare us for the bond maturity, the bond that matured in April, so during the second quarter. If we move on to slide 31, please, This is the capital expenditures program. Year to date, we have done 73,000,000, but for the quarter, the second quarter alone, we had about $40,000,000 in capital expenditures. Remind you that this excludes what we pay for dry docking of the tankers.
For tankers, we spent 12,000,000 on nondrydock expenditures, 15,000,000 for terminals. STC was about 2,000,000. And interesting enough, we had negative 2,000,000 for Stolt Sea Farm as they received grants on prior related to prior capital expenditures done in Spain. We also invested further $10,000,000 into Arvonor Gas during the quarter, and we had spent $3,000,000 in corporate. That leaves us with about $98,000,000 remaining for the year, and some of the reduction that we had of the 62,000,000 have been pushed in over to 2021.
So in '21, we expect about $89,000,000 of capital expenditures.
Moving on
to Slide 32. This is a different view of our liquidity position or our cash flow, if you like, than what we normally show you. It's trying to give a bit more of a visual view. The free cash flow increased to $64,000,000 in the second quarter from '23 in the first quarter. So if you look at the graph, you start at the left hand column, you will see we had liquidity available at the end of the first quarter of $511,000,000.
Operating cash flow for the quarter was a 108,000,000. Then we have capital expenditures of 36,000,000. That's different from what I showed you on the prior slide because that does not include the 10,000,000 that we invest in Avenir, but it does include 6,000,000 that we spent on drydocking. And then we had other investments, which included was 8,000,000. That's 10,000,000 invested in Alvenir, less 2,000,000 that we received in dividends from our joint ventures.
We then had took on additional debt. As I mentioned, we drew down on the revolving credit line during the quarter of 130,000,000. And, also, as Niels mentioned, Stolt Sea Farm took on very advantageous loans of $14,000,000 separately. And during the quarter, we paid down $155,000,000 in debt, and that included 110,000,000 approximately on the bond that matured in April, thus regular debt maturities of some $45,000,000. We also paid $9,000,000 on finance leases, and the FX had a small impact.
And thus, we ended up at 411,000,000 in the liquidity at the end of the second quarter. Moving to slide 33. What I want to share with you here is that since we acquired JERIO Tankers back in 2016 and subsequently took delivery of what was a quite significant newbuilding program, we saw a debt peak within the 2018 at $2,448,000,000. And since then, we embarked on a program to reduce debt, control capital expenditures, preserve liquidity. And we have since then seen that our debt, net debt, has been reduced by 280,000,000.
And I remind you that this has been through what has been a very weak market for tankers. So in even in a weak market for the main business, we've been able to improve on our debt situation. You will see in the first quarter and 2020 the little gray boxes on the top, that's the IFRS 16 treatment of our finance leases, so the debt portion of those leases. Debt net debt now stands at $2,168,000,000 at the end of the second quarter, so down $280,000,000. Bottom left, you have our debt maturity profile.
And having repaid the April bond, there's not much left in 2020, about $80,000,000. With the bonds that we just issued now in June that actually settled on Monday, we reduced the March 2021 bond from a $232,000,000 outstanding down to 154 as many of the bondholders rolled from that bond into the new bond. And we have a 159 of regular principal payments. And you see the bonds going forward. The $175,000,000 bond in 2022 is a late twenty two maturity, so there's lots of time to prepare for that.
As mentioned, we did a bond, a 125,000,000,000 NOK bond that settled on Monday, June 29, and it was 522,000,000 that we repurchased. We are working on additional financing, as Nils mentioned, dollars 65,000,000 to be secured by the Moerdijk and Diagon terminals. It's the one that has progressed the most at the moment. So if you move on to slide 34, here we give you a view of the liquidity going forward, and this is in light of the bond that is maturing in March, and we want to
give you comfort that we
are in a good position going forward. So we start with the left hand column, $411,000,000 in liquidity at the end of the second quarter. Then we did the bond now in June, 132,000,000. That's s and I o one. And you see the dotted line going over to the $78,000,000 redemption of the March 2021 bond.
We then had creditor approval for a $65,000,000 terminal financing, and we're we're working on the documentation. Then over the next twelve months until the end of the second quarter twenty twenty one, we have done a conservative emphasized conservative of our operating cash flow of about $350,000,000. We will have further capital expenditures of about $158,000,000 in that same period over the next twelve months. And then we will have debt reductions, regular debt principal payments of a 159,000,000 as well as the remaining balance of the 03/20/2011 of a 154,000,000 as well as interest payments, lest we forget, of a 131,000,000, and that leaves us with a liquidity position at the end of the 2021 of $280,000,000 with the next sort of more significant maturity being the September 2022 bond coming. This does not include the $100,000,000 RCF that Anis mentioned.
It does not include the terminal top up financing that we are considering for the Singapore terminal. We also have further unencumbered assets should that be necessary that we can also use to finance further or to raise further liquidity should that be needed. So just want to share that with you as a view going forward. And with that, Nils, I would like to hand it back to you.
Thank you, Jens. Before we open for questions, just the key messages that I want to give you is that we, as we showed you, have taken early action to improve liquidity position and to protect our revenue base. We have secured good contracts in tankers that secures volume. Each business is well positioned within their respective segments. If needed, we have done a downside scenario action plan where we have established further OpEx savings and cash sources identified.
So we have made plans in each
of the businesses, as I said,
if it should happen that we have actions to be taken. We have unencumbered assets, as Jens said, available for further $200,000,000 financing. We have ample room under our covenants, And we have, as also again showed you, a liquidity to repay the March 21 bond. It's already secured. And I feel then very I feel comfortable with the position that we are in on certain times ahead, but I think that whatever comes our way, we will be ready.
And also in these times, there will always be opportunities that arise, and I hope to be able to take advantage of that. Operator, that concludes our presentation. We would now like to open up for any questions that the callers may have. Thank you.
And your first question comes from Erik Halvorsen from Pareto. Please go ahead.
Yes, hi. Just first on the opportunities you mentioned there. I mean, it's been a crazy six months, right? So what if you could be a little bit more specific on what type of opportunities, maybe which of the segments you would I mean, is it mostly on the tanker side? Or is it across all of your industries?
Is it something completely new?
It's not new. And as I I remain remind you, we we are very much focused on reducing our debt and and and conserving cash to ride out whatever downturn comes our way. But we are seeing fantastic opportunities in the tanker business, sorry, in the terminal business to expand, which we would like to pursue. I don't think those opportunities will run away, but there are opportunities there for further expansion in the terminal business. Tank container business, we've always you know, we have we have expanded through buying or building our own tank containers, but we're also expanded by taking over competitors.
So if there are competitors for other platforms out there that are suffering, we would like to see and and and pursue those opportunities. And then, of course, tankers. I think there is further room for consolidation, and there's many ways of doing that. And I think using our platform and using our, yeah, balance sheet, hopefully, we will be able to pursue some such such opportunities. It doesn't necessarily be a mean that we acquire, but we can maybe see if there's a a way of operating our pool pool agreements.
So we we we would like to, know, to answer your questions, there are opportunities that are arising in each of our businesses.
Understand. And second, when you have more than 95% utilization on your terminals this quarter, Yet the EBIT increase from the first quarter isn't that substantial. I mean is it fair to say that some of the increase quarter over quarter was lower paying storage products? Or how should and second, how has that moved into the third quarter?
So the reason that we have increased in utilization is because we took we had as we said, we had to have a have had this challenging market in Singapore. We were able to secure some, three month contracts with some traders, which, you know, is is low paying business, low margin business. So the core business that we focus is chemicals. That is steady. That hasn't changed.
What we saw the pickup of utilization in Singapore and in Australia is lower paying business, but higher volumes. So that's why the utilization picked up. It does not so so it does not reflect that that the chem the the core chemical market is weakening. It's actually remaining the same, and it's healthy. But we just took the opportunity to secure some trading business in that quarter.
We'll see if that lasts in the third and fourth quarter.
Okay. But there's nothing on the normal chemical storage business that has changed dramatically over the past, well, since kind of the the craziness of April, I would say?
No. Not at all. I I would say that to the contrary, we are seeing steady inquiries for storage of chemicals in our main terminals.
Fantastic. Okay. And finally, on the corporate and other operating profit there, there's a what you say is the delta there of about $9,000,000 positive on corporate and other, reflecting a lower profit sharing accrual. Can you shed some light on that? And how should we model that going forward?
Because obviously, dollars 4,000,000 or $5,000,000 per quarter is a substantial amount. Is it a one off?
Think it was $5,700,000 in corporate numbers. Can you elaborate?
Yeah. It's it's actually comprised of a number of small items, but the big one is clearly the the the profit sharing. We over accrued in the in the first quarter, which if you look at the results, should not have been done, and this was a reversal. I think if you look going forward, you can sort of keep it, yeah, I mean, keep it as a very small percentage of the net profit, not to really confuse the results. This was a onetime correction of an over accrual in the first quarter.
Okay. So it should still be okay, I understand. Thank you.
And
your next question comes from Anders Karlsson from Danske Bank. Please go ahead.
Thank you. Just a question on your contract coverage. You state that you are increasing your contract coverage. Can you say bit more how much approximately, you know, we are have on the contract or on the call us now? Or do you see that going forward?
Yeah. I mean, that's in our concern, we want to secure so it was, I think, from 70 I think 73%. So so not that much. But I remind you that most of the contract because we've been operating in such a weak market for a long period of time, there is not volume guaranteed under these contracts. So it's if if you do contract from Houston, but also down for, you know, one particular product, the cost here is to ship with you at a agreed freight rate from that those two books, but they they don't guarantee it.
They don't have to ship. So there's no minimum guaranteed minimum and and maximum volume on the contract. But there is no minimum volume guarantee. So what we are focused on is really to to fix additional cargoes where there is a minimum volume guarantee down in the complex to secure volume that is out there. Just just you know, I am of the opinion that we believe that the market will slow down when you you know, we haven't seen the volume slowdown yet.
But when you see what is happening in the airline industry and the car manufacturer and the construction industry, hopefully, we haven't seen the impact yet. But if you believe that there's going to be a slowdown in the globe over the continent, we felt it prudent to secure volume too. So we have gone after additional business, and we've been focusing on business that guarantees volume. And actually, we've been able to achieve relatively good rates. I mean, as we showed, the average rate increase on the contracts that we renewed was 5%.
So that's the thinking. Okay.
So In terms of in terms of G and A expenses, I mean, it came down from about SEK 52,000,000 last quarter to about SEK 45,000,000 this quarter. How much of that is temporary effects following COVID-nineteen, no traveling, no entertainment, whatever? And how much of that could actually be translated into permanent savings?
Well, it's I think that we we we can't continue to have no traveling. We can't continue forever to to to not hire people. So, you know, we we have taken dramatic action on the hiring feature. Even if people retire or people leave us, we we have stopped all hiring, and that can't go on forever. So that will most likely come back again.
It's probably gonna take a while before we go back to normal. But from, I would say, from 45 back up to you know, I'm just guessing here, Jens, but around back to 50,000,000, most likely. And, also, we did a a volunteer we volunteered to cut our the senior management to take a salary cut and to and the board to take a cut, etcetera. So once we feel that we are through this storm, I think that it's only fair to compensate for the sacrifices that they may then go back to normal again. The permanent savings on the permanent savings, I would say, as you know, working from home works.
You know, we are, of course, keeping an eye on productivity, but working from home works. So going forward, with the systems, with the technology, and all the things that we've done, there are savings. There are permanent savings that we can can achieve. So less office space. I think that we will never go back to the same sort of traveling that we did.
We we find out that having these teams meetings works very well. So it will be a different but it's too early to identify, but it's very much in our focus to to create permanent savings from the experience that we've had in this pandemic.
Maybe I can add.
In the second quarter, we also saw that the US dollar strengthened, which also has the impact of reducing the AMG in foreign currency locations in U. S. Dollar terms.
Okay. Thank you. And then one final one. In The U. S, I mean, you have the ITC terminal that is probably still out as far as I know in Houston.
Are you fully utilized there? Or is there more to add on to utilization and revenues in the Houston and in The U. S. Area on the chemical side?
So in both Houston and New Orleans, we have lots of space to expand, which we are looking at projects. So even though we have capital expenditure restraints right now, there are projects that we are pursuing and looking at, and we have additional space to build additional tanks. So we've put in place all the infrastructure. As you probably know, we built a new jetty in Houston. And we have the East property, which is not full.
So there's plenty of room for expansion there. And also in New Orleans, within our wall, this protective wall that we built, we have plenty of space for expansion there. Really on top of the priority list on spending or capital expenditure once we open up again is to develop and pursue these opportunities that we consistently see in The U. S. Gulf.
Utilization is high both in Houston and New Orleans. We are building additional there are some tanks still being built in New Orleans, but it's all contracted out. So what we've been focusing on now since basically utilization is at max, we have been we've been, calling low margin business and replace it with a higher margin business, and that is ongoing. So that's why I say that without further capital expenditure, I think that we will still continue to see improved earnings from the Terminal division because we've been focusing on, one, getting our operating costs down, but also getting higher margin business into the terminals. Yes, so we have expansion for additional land bought in Houston and New Orleans, but the growth that you will see in the short run is coming from lower operating costs, but also higher paying higher margin business that we're replacing low margin business when the contract expire with higher paying business, taking advantage of the relatively strong market in The U.
S. Gulf.
Okay. Thank you. That's all for me. Thank you.
Operator?
Thank you. And we have no further questions at the moment.
I guess then that completes our presentation. I would like to thank you for taking the time, and we'll talk again when we release our third quarter results. Keep well, thank you for participating. That completes the presentation.