Ladies and gentlemen, thank you for standing by, and welcome to today's Stolt Nielsen Limited Presentation and Conference Call First Quarter twenty twenty Results. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. I must advise you that your conference is being recorded today on Thursday, April 16. I would now like to hand the conference over to your speaker today, Niels Stolt Nielsen, CEO of Stolt Nielsen Limited.
Please go ahead, sir.
Thank you. Good morning, good afternoon. Thank you for joining us on this audio conference for our first quarter twenty twenty results presentation. I will be referring to a presentation, which you could either download or follow from our website. If you go to our website, www.mason.com, and, hit the latest presentation, on on the front page, you will be able to get our the earnings presentation, which we will be going through.
Together with me on the line is Jens Gruner Hege, our chief financial officer. If you move to the second page, forward looking statement, which I usually don't go through, but I would like to highlight the second paragraph. The following financial statements are not in accordance with IFRS as the COVID-nineteen pandemic is a triggering event for review of impairment, which has not yet been performed. Jens will explain why in his part of the presentation. Moving then to Page three.
The agenda this time will be, again, the Stolt Nielsen first quarter highlights. Then I will take you through a COVID-nineteen update, really starting off with what we are seeing right now in the markets in each of the businesses and also talking about a little about the actions that we have been taking. Then I will go through each of the businesses and review the first quarter performance. Jens will take you through the financials, and then we will move on to the Q and As. Moving to Page four.
I do regret to show you the loss. That's the first loss that we have had after 64 consecutive profitable quarters. The operating revenue, basically flat, but the EBITDA down 99.6%, and that's down from 116.6%. Operating profit also down to 16.6 and that's down from $48.46.8 dollars in the previous quarter. And net profit, 5,500,000.0 in the fourth quarter, down to $20,200,000 loss in the first quarter.
If you look at the net profit variance analysis and again, I will go through each of the business segments in detail later. Again, we delivered a 5.5% net profit in the fourth quarter of twenty nineteen, dollars 9,900,000.0 operating profit for Tankers, a $7,100,000 higher operating profit for Stolthaven. Stolthaven containers, 9,000,000 lower operating profit. Stolthaven, almost slightly higher, almost the same. Then but we did a big impairment of $12,000,000 on the biomass in the first quarter.
And other and corporates of $6,800,000 negative. Higher net finance expenses, slightly higher of $05,000,000 higher FX of $1.5 and lower income tax as a result of the impairment that we did on the biomass. So a lower tax income tax of 6,400,000.0 bringing us to $20,200,000 loss for the first quarter. Moving on to Page five, and I'll take you through each of the businesses. And again, this is really what we are currently seeing right now in the market, what operational things that we're seeing operational wise and also initiatives that we are to have been taking in each of the businesses, to be able to endure or ride out a prolonged downturn.
So just talking about the market right now in tankers, The ships are trading with minimal operational delays. Yeah. There are new procedures in port, but and there are some delays, but delays are are hours, not days. The spot market and the COA remains mostly stable, but some weaknesses in are emerging in some markets. So overall, spot markets have been holding up.
The COA nominations have been relatively healthy. And as you will relate to see and what we also presented in earnings release, the contracts that we renewed in the first quarter was up some 4.7%. So the momentum that we saw in the fourth quarter is carrying on into the first quarter even after the pandemic really started having its full impact. And I think also that is driven by a relatively healthy MR market, which we are seeing at around $25,000 a day. So right now, the markets are holding up relatively well, and it look looks like that is, you know, same in March and also going into April.
Operational update. The biggest challenge we have is, of course, being able to change the crew aboard the ships, and that's that's a quite a big challenge, not only else, but for the whole industry where the borders are closed and and airplanes are canceled. It's it's difficult to to change crew. However, our our technical platform, across the business has grown very well. We are receiving great feedback from our customers that, with the systems that we have in place and even when working from home, we have really not lost any operations because of this new environment that we live in.
On the saving initiatives in Tankers, and this is applied all across all of the businesses, we are looking at cutting back as much capital expenditure as possible, A and G savings. The capital expenditure on the tanker side has primarily we don't have any newbuildings on order, so CapEx there is primarily driven on the scrubbers. And where we have the opportunity to cancel scrubbers, we will. And there, we have identified also the sum related, but we have identified approximately $30,000,000 of savings, from tankers on CapEx. And the A and G savings, we've gone through hiring freeze.
We have term terminated all nonprofession all non essential professional fees, contract workers, temp workers, and we have kind of stopped, both travel and entertainment, and, of course, hiring freeze, as I said earlier. We have also go through an OpEx, taken out against all of the businesses. We have prepared a plan for a 2030%, 40% downside scenario, which has been developed in each of the businesses, with the associated savings initiatives. So not only A and G and CapEx, but also looking at OpEx savings under those scenarios. Moving to page six.
Terminals, high utilization globally, although the throughput is slightly down. So what we're seeing is high inquiries for storage of of products, but, of course, the throughput is down as consumption falls. Most contracts are fixed, storage contracts, but some revenues, of course, linked to the additional throughput. But of the of the business that we're in, I mean, terminal business is the one that is is I'm not worried about. That is quite secure for the at least for the next couple of years.
And refined products, Contango has resulted in increased demand in for storage, especially for CPP both in Europe and and in Korea. Operation update, all terminals impacted by the stay at home regulation able to achieve critical infrastructure approval, which allows work to continue with split work teams being implemented and identify vulnerable workers being removed from work. So we have kind of gone into two shifts so that if one shift has a case, we still have another shift that can can carry on the operations. So, again, operations are, you know, continuing as normal, if you call can call it normal. Saving initiative, this is really where we have identified most of the CapEx savings.
I think we will identify close to third or a little over $30,000,000 of capital expenditure. The instructions has really been across the businesses to hold back on all CapEx, unless it's committed to third party or it is a regulatory requirement. So in, for example, in tankage, we have a lot of ballast water treatment systems, which we have to proceed with because of regulatory requirement. We have also in tankage looked at delaying dry docking and talking to flags to see if that's possible, but just, again, to conserve cash. Going back to terminals, A and G savings, your hiring fees, termination of nonessential professional fees, and contractors.
And, again, also here, T and E has stopped. And again, here, we also have a twenty, thirty, 40 scenario plan in place, if that develops. Moving in tank containers. Here also, we're seeing a very active market as we are shortly later, the the shipments in in the month of of March is at the record levels. So and utilization is over 71%.
So the markets are holding up. And interestingly, we're also seeing, an increased inquiries for storage as we're using the tank containers for storage. And, of course, we're going out aggressively and securing as much business and long term business as possible. Operational update. All markets still operational, but impacted by the stay alone home regulation and restrictions locally, but all operation teams are working as usual.
Our platform is really showing its, you know, it's fantastic. We are getting fantastic feedback from our customers that we are not losing any business, from the staying at home or working from home. Systems are are are working very well. So, really, I think we are doing a tremendous job in in continuing to move the tank containers under these circumstances. Saving in this groups, very capital intense and light in this business, and very little capital expenditure pool.
There's a mostly what we've been able to identify where we hold back is the development of of of systems. What makes Stolt Tank Containers as market leaders is the how good they are at developing these fantastic systems. So so we haven't stopped them, but we have we haven't canceled them or we have put we have freeze them. And and here also, AMG and and and all the other things, we continue. We have implemented.
OpEx savings also, we have done the exercise of a twenty, thirty, forty scenario. So if that happens in this segment, we are ready to implement it if necessary. Stolt Sea Farm on page, eight. That is really the one that has been hit the hardest. I remind you that the turbot, which is our main product, most of that is gone to is being being sold sold to the restaurants and hotels and the catering business, and and that market is no longer there.
Our biggest market is Spain, Italy, and France, that that has fallen off a cliff. So that's a huge challenge. But we have taken the hit. We have taken and written down the biomass. The the challenge is, of course, then with initially, three weeks ago, the volume dropped dramatically.
We have to continue to harvest because it's it's a growing biomass, and we have to harvest. So, in the first weeks, we just had to push the products out. But now gradually, people, you know, even though they're at home, they still want to have enjoy their their fish. So now we're starting to see again a pickup in in retail sales, and we're developing new products so it's easier for people to to, to prepare the fish themselves. Operational wise, since March, 13 farm employees are splitting shifts and following all protocols to prevent, and preventive measures.
So, again, we have the shift so that so if if one shift gets it, we can continue. And we have a continued, contingency plan in place for feeders being delivered oxygen vaccines and low logistical supports. We're also, implementing slowing the biomass growth, so we have reduced the the feeding. And now, of course, when you have a lower biomass, our production per unit goes up. So that's gonna affect us.
But, without we're we're continuing as for the time being to put out the same amount of fish. So if the market picks up and we've taken it and we expect the market to be slow for the next two, three months. But when it picks up, we can quickly start feeding the fish again more, and and the growth in the biomass will pick up quite quickly. And so the initiatives, they have looked through everything, and and, again, they have held back on on CapEx and the same as all the business hire increase, temporary layoffs. And and in all of the businesses, in all of the regions of where we operate, we we look at the support that we can get when we we look at these layoff scenarios, and take the advantage of what the various governments have to offer.
We are moving to page nine, the action list. So in summary, we have identified the total savings from both A and G cutbacks, OpEx savings and CapEx savings. We have identified a total of $8,083,000,000 dollars. We also took the dramatic step of of, you know, the board volunteered to take a 20 50% hit on their fees, and the senior management, me and my direct reports, have taken a 20% cut. On the financing side, as you've seen on the front page, at the end of the first quarter, we have $519,000,000 of available liquidity.
Some of that has already been used to repay the the bond that came due in in April. We have, short term wise, have or at least for 2020, we have sufficient liquidity. And Jens will take you more in detail what we have. But in addition, we we have done various scenarios. As I said, we have done twenty, thirty, 40 Under the toughest scenario, and that's what in the scenario in which we operate, we want to make certain that we have enough liquidity.
And we have five terminals unencumbered with a potential, borrowing capacity close to $200,000,000 We also have significant additional value in shares in joint venture terminals, which we believe we would easily or relatively easily be able to borrow in the region of $200,000,000 So very much the focus is on, you know, the the short term. The last three weeks, we've been looking at cutting back and saving what it's in within our control. And then now we're working on securing additional liquidity so that we can ride out a storm. Now the the the target is, of course, to be able to have enough liquidity in place so that if the bond market is not back in March, we have that liquidity. That's what we're planning on.
We have ample headroom under all of our financial covenants. So even if we have to take a impairment in the second quarter, I think that we are within our covenants. We will be within our covenants covenants. And again, plans being implemented to for raising an additional $250,000,000 of liquidity, which will cover the twenty twenty one March twenty twenty one bond payment. Then moving to Page ten and eleven.
And this now I'll go through each of the businesses, the first quarter results. The operating revenue in Tankers was up to $280,000,000 up from $274,000,000 The EBITDA was down €49,500,000 down from 53,500,000.0. The operating profit, unfortunately, was down to 4,700,000.0, and that's down from 14,600,000.0. And operating days at sea in the quarter was basically the same as the previous quarter. If you look at the waterfall, the analysis, and this is an operating profit analysis, we had €14,600,000 of operating profit in the previous quarter.
That we had lower trading results of €3,900,000 And that is very much driven by the repositioning that we had to do because of the delays in drydocking, that we had as a result of the installation of the scrubbers and and the the ballast water. So and also, also the positioning that we need to do to serve our contracts because of the Grennan incidents. We have to work around that. So we had a lot of, expensive ballast legs, which hit us in the first quarter. We also had a transition cost going into IMO 2020.
It's very difficult to get it totally right. So we have €4,000,000 of expensive fuel that we bought, which we'll not be able to recover, basically, which we burnt in the fourth quarter, which we won't be able to retrieve from our contract customers. Even though we were very successful, we were able to implement the bunker clause. The fuel that we bought in 2019, we have 4,000,000, which we won't be able to recover. Then overall, the bunker costs were higher in the in the first quarter compared to the the fourth quarter.
And we have some higher all owning expenses. That's primarily driven on timing, but also higher insurance costs, of 2.1 total. We had some higher equity in 12.9 and others positive contribution of 2.1, which gave us an operating profit of 4.7. So I did say that most of these differences is were one offs in tankers. Moving to Page 12, the average price of the IFO and the very low sulfur fuel consumed was $5.00 6 in the first quarter, and that's compared to IFO consumed during the fourth quarter of three eighty four.
The average price of the IFO and LSF fuel was $545 per tonne, which was purchased compared with IFO of 401, the price of 401 in the fourth quarter. So the stuff that we bought in the first quarter was still, quite high. You know? But every day, we will start to, you know, improvement because of the cheaper fuel that we're buying and consuming now, but it will take time for that to come come to our bottom line. Again, the IMO transition cost us an extra $4,000,000, which is not recoverable from our customers.
The year to date COA bunker surcharge clauses cover 67.5% of our total fuel consumption. Unfortunately, we have a hedge in place, which is out of the money, which we had 36,000 tonnes from April 2020 until December 2020, which as of April 16 had a negative value of 4.2. Moving to Page 13, you can see our STJS, Stolt Tankage and Service sale and Time Charter Index and sensitivity. And unfortunately, we started to see a pickup, but, the market has changed or the issues that we had in the first quarter caused it to drop further. The positive news is that the CRH renewals in the quarter were up 4.74%.
So off the contracts that we did renew, were up 4.74. The order book on Page 14. The order book now stands at 5.3%, which is, you know, it keeps on falling. There will be some delays in deliveries because of
the
corona, but I'm but I question if there's any new ships going to be ordered anytime soon. So as I I expect that once we are out of this storm, the the the market will continue to or will be quite, will be quite strong. But, you know, it's up to anybody's guess how long this will last. Moving to page 15, market outlook. I wish I could predict.
We have so we we haven't seen the fall off fall yet. As I've said in many times, to the team, to the organization, is that, we're hoping for the best best, but we are planning for the worst. You know, moving chemicals around the world, which the feedstock for manufacturing, of course, is gonna impact us. But to what extent? You also have to remember that we are also carrying a lot of stuff which is essential, fertilizers, detergents, all your chemicals, which are useful, so probably detergent.
So not everything is gonna be dropped off, but, of course, there is going to be an impact. I'm not gonna speculate, you know, how this is going to develop. It depends on how long this lockdown is going to last. I hope it's it's not going to last forever. We can't you know, I think that the the the economic meltdown from a the the economic collapse that from a from an extended lockdown, we'll have a have bigger mortality than than the virus.
So we have to open up. And, hopefully, once all the countries have enough hospital beds and enough ventilators that they will start gradually to open up again. Again, we are hoping for the best but preparing for the worst. Now you you can say that what we're seeing in terminals, we're seeing a high inquiry for storage. And, of course, that is products that are are are, not being consumed.
So I wonder if the chemical manufacturers, like the oil producers, are continuing to produce because it's very expensive to close down the production entities. And so instead of closing down and if we believe it's going to be a two to three to four month slowdown, it is more economical to keep the factories going or keep the the processing plants to operating just at the lower lower volume, but keep them running instead of closing it down. That means that they will still still produce. They will still have to find storage for it. And, you know, the storage on the loading when the storage on the loading side and on the discharge side is full and when all the inventory is full, maybe then they will start looking for a floating storage.
That's an optimistic, you know, thought. But we are seeing it in the terminal side. We're seeing on the tank container side. Maybe we can also see it in on the shipping side. Moving to terminals on page 17.
The operating profit, basically the same. EBITDA, down. Operating profit, up 62%, and utilization up to 90.5%. That's up 1%. The operating revenue was flat, where utilization increased by to 90.5 due to the high utilization in New Orleans, Singapore and Australia terminals, although at lower rates.
The operating expenses, excluding the one offs of 1.3% for insurance costs in the fourth quarter decreased by 1.7% mainly due to lower costs lower cost facilities and maintenance expenses. The EBITDA decreased by 1,200,000.0 impacted by the lower equity income and the higher energy expenses. Operating profit increased because of prior quarter impairment of Newcastle Terminal of 5.5% and Port Alma, Bindersberg and Vineyard assets being fully depreciated in the fourth quarter. If you move to Page 18, where we have the waterfall, the fourth quarter operating profit was at 11.7%, slightly higher operating revenue of 0.1%, lower operating expenses of 0.4% and then lower appreciation because of the impairment within the fourth quarter in Australia. Slightly lower equity income and higher A and G expenses, bringing the operating profit of 18.9%.
Moving to Page 19. The markets remain strong. In The United States, we're seeing lots of inquiries. Europe is is is for for our terminal is full. Of course, our big terminal in in Antwerp is primarily c c p a big part of it is CPP.
And because of the combined way in the market, it's high demand for storage. The Chinese market remains weak, although storage inquiries increase due to inventory needing to be you know, again, people need to store the product. And we're seeing a relatively strong Korean market too. And then Brazil remains stable for petroleum, ethanol, and chemicals, although initial signs of weakness due to the ongoing lockdown due to corona. Again, the contract portfolio in the terminal business secures that business for at least the next two years, which gives me comfort.
Tank Containers on Page 21. Operating revenue is down 3%, down to 129.4%. EBITDA is down to 16.5 Operating profit down, to 6.7, and utilization up to 68.5. Subsequently, in the in this month, we have seen actually that going all the way up to 70 over 70%. If you look at the the waterfall, the fourth quarter operating profit was 15.7, 3.1% higher transportation revenue.
So what we what we saw in in in tank containers is high levels of activity, but it was more expensive to move the products and move the tanks. And that is really driven by several factors. We have lower demurrage of 3.2, lower other revenue of 4,000,000. That's a 4,000,000 that we had of one off with our customers in one of our biggest customers in the the fourth quarter. Higher move related expenses relates to the the IMO 2020 implementation, which we weren't able to pass through.
So, again, one off and also higher repositioning costs. And that that has been a challenge for the rapidly changing trade flows and the buildup of tank containers in China during the outbreak of the corona. We saw that we had to reposition tanks, that which comes at a cost. Lower operating expense of 2.4 and lower equity income of 6.7, or sorry, lower equity income of 0.6, giving an operating profit for the quarter of $6,700,000. Moving to page 22.
Again, demand is firm in in tank containers. The Asian markets remain busy, and China is picking up pace. In Europe, demand has slowed for the deluxe countries, but it's still strong in France for both chemicals and food grids. Demand in both North And South America remains steady, and the food grade business continues to grow. As we are drinking, sitting at home, the the boost that we transport is we're seeing a big pickup in in activity.
So continue with that, please. After quarter end, the utilization rates are slowly improving compared to the first quarter and have produced a record number of shipments. However, the margin continued to be under pressure, not only from competition, but also because of the additional costs associated with the movements. Still see from on Page 24, this is really where we have taken the biggest hit. We had an operating profit of 1.7% in the fourth quarter, lower turbosal of 0.1, lower salt sales of 0.9%, slightly higher caviar sales, lower operating expenses of 1.2%.
But then we did take the impairment at the end of the quarter based on the prices that we saw because of the corona of EUR 12,000,000. Lower fair value adjustment of 300,000.0, lower depreciation of higher lower depreciation of 300,000.0 and lower A and G of EUR 0.3 and other $0.1 coming in at negative $9,800,000 for Stolt Sea Farm. So really taking the hit in the adjustment of our inventory value in the first quarter. Moving on to Stolt Nielsen Gas on Page 26. I just would like to remind you that we will be the first ship to be delivered.
There are big delays, but the first ship that we are delivering will go to Petronas on a bareboat on a three year bareboat, and we expect the delivery to be in June. We also have a second ship, which are being, chartered out to Golar Power on a three year bareboat at similar terms, and the delivery for that ship is expected, in 2020. And we are at term sheets have been agreed for the financing for the first four ships. The terminal, the High Gas Terminal, Russia should commence operations in the fourth quarter. That is also being delayed because of the corona, but operations are expected to happen in 2020.
And we continue to negotiate, supply agreements for customers that will be going through high gas, but we're also looking at additional, agreement with a major industrial offtake customer in Sardinia, which has not yet been announced. That completes my part. I will give the word over to Jens, and I'll come back during the question and answers. Thank you, Jens.
Yes. Thank you, Niels. As Niels mentioned, I will provide a bit further details on the financial results as they were released today for the first quarter. Now due to the uncertainty that we're facing going forward, we will not provide the normal P and L guidance on the A and G depreciation, amortization and share of profit for JVs for the next quarter like we normally do. Also, this is the first quarter that we're recording as per IFRS 16.
So that has impact on the debt level as well as assets, interest expense, and EBITDA, and only a minor impact on the net profit. Furthermore, as we stated in our earnings release earlier today, I want to remind you that the financials recorded today are not strictly as per IFRS. Under IFRS, the coronavirus or COVID nineteen pandemic is an event that triggers an impairment review of the company's balance sheet. However, the company, we have so far been unable to quantify the possible impairments of long term assets due to the difficulties really in determining how this pandemic will evolve and the effects it may have, both in the value of the company's assets and our ability to continue as a growing concern. We will come back and perform the full impairment analysis ahead of the release of our second quarter results, which are scheduled for July 2.
When we did the impairment analysis for the full 02/2019 '19 results, we had ample headroom on most of our assets. So it's a good cushion. The press release as issued and this investor presentation is available on our website, as Niels mentioned, under the section of reporting presentations. Moving on to Slide 29. The operating profit before one offs for the first quarter was $28,500,000 quite a bit down from the $52,800,000 in the fourth quarter.
As explained by Nels, this was really driven by the lower results in tankers, which was down from 10,000,000, driven by scheduling issues, unrecoverable bunker costs and higher ship owning costs. STC was $9,000,000 lower due to lower demurrage revenue related expenses, including repos and lower other revenue relating to prior quarter. Stolt Sea Farm and Stolt Haven terminals were both mostly flat when we exclude the one offs. The major one off this quarter was, as mentioned already, the write down of the biomass volume, reflecting the difficult market situation that still Sea Farm is facing right now, following the shutdown of restaurants and hotels after the COVID nineteen outbreak. Net interest expense was slightly below the guidance of $35,300,000 but also slightly above the prior quarter.
We also had a small loss in FX, down from a gain in the prior quarter. And income tax was down significantly due to lower results in Stolt Sea Farm. As well as in the fourth quarter, we booked a provision for uncertain tax positions in relation to the Stolt Tank Container division. The net result, therefore, is a loss of $20,200,000 for the quarter. As Niels mentioned, our first loss making quarter since 02/2003.
EBITDA came in at 99,600,000.0 And note that the EBITDA is before the fair value of biological assets, insurance reimbursements and other onetime noncash items. If you can move on to Slide 30. As a reminder, one of our main objectives from a balance sheet perspective is to continue to focus on reducing debt while maintaining a strong liquidity position. Now as we applied IFRS 16, the debt increased, and the increase related to IFRS 16 was 184,000,000. And with that, we saw the increase to 2,580,000,000.00, and that's up from 2,340,000,000.00.
Our liquidity position was also marginally up from the prior quarter at $519,000,000 And if you recall, in early February, we did a bond issue of $142,000,000 to raise cash, take the opportunity while the market was there. And that was also to help us prepare for the repayment of the bond s and I o six, which was repaid last week. And you'll see that bond was reflected in the current maturity of debt on the balance sheet of $278,000,000. Tangible net worth slipped slightly from 1,600,000,000.0 to 1,580,000,000.00. And if you combine that with the slight debt increase due to IFRS 16, you see that the debt to tangible net worth ratio increased to 1.64 from 1.47 in the fourth quarter of twenty nineteen.
If you exclude the IFRS impact from that increase measured on a like for like with the fourth quarter, it would have been 1.52. It's also important to note that in our bank covenants, we have the ability to continue to measure these covenants, per pre IFRS 16. So it's the lower numbers that apply to us. The EBITDA to interest expense ratio for the quarter was three point o nine, slightly down from three twelve. But also here, you had an IFRS 16 impact, but this time in the opposite direction, The ratio would have been 2.92 without the IFRS 16 impact, and that's reflecting the lower EBITDA that we had this quarter.
The jump in net debt to EBITDA also reflected the impact of IFRS 16 as well as the slightly weaker EBITDA that we had in the quarter. Moving to Slide 31 to the cash flow. Cash flow from operations was positive $60,800,000 down from 68,900,000.0 again reflecting the weaker results this quarter, and this was partly compensated by the higher demurrage. The increase in cash used in investment activities really predominantly reflects the cash received from our divestment of our shareholding in Avance Gas Holding. It was about twenty five point nine million dollars in the prior quarter.
During the first quarter, as I mentioned, we raised about $142,000,000 in new bond proceeds. About 50,000,000 or so of this was used to retire part of the April 2020 bond, the SNI06. So we retired that early. And we also had some further scheduled principal payments making up the total of 93,200,000.0 in debt repayments. And also note that the dividend that is referred to here was the interim dividend paid in December.
Net cash for the quarter was a positive $55,300,000 resulting in a cash balance at quarter end of $191,300,000 Moving on to Slide 32. Here's a slightly different view from what we have shown you earlier. I want to share with you the quarterly view or debt maturity profile. As you see, the s and I o six is the one I referred to, which was repaid last week. So our focus now is on securing our position with regards to s and I o five maturing in March, And, therefore, we have taken a number of actions as mentioned by Niels to strengthen our position.
And we continue to test the balance sheet and our cash flow in downside scenarios, and that's reforming our action plan as we go forward so that we can be prepared for whatever eventuality is thrown at us. And if you go to next slide 33, you will here see the capital expenditures program and the reductions that we have so far earmarked. That's in total 62,000,000 split between tankers with 13, Stolthaven with 30. Stolthaven has reduced their cap expenditures by nine, and then corporate and other on BT projects with a further 9,000,000, so total 62. And if you subtract that from the remaining CapEx, you will get to just under $100,000,000 remaining for 2020.
And that's mostly comprised of safety and environmental related CapEx as well as committed or close to completion projects. If you move on to Slide 34, here on top, I have summarized the initiatives already put in place amounting to cash savings of €83,000,000 that Nielsen went through. Mentioned, it includes the cancellation of dividends that would have been payable in May, the reduction in board fees by 50% and the management pay by 20%, and other initiatives. We're also in the process of developing the downside plans where we will affect significant OpEx savings should we see a negative impact on our markets. Now importantly for our liquidity position is to highlight assets where we can
take
out further loans. We have been in discussions with our banks to secure liquidity for the eventuality that this will be needed in the future. And I must say we have received a fantastic support from our banks so far. We want to secure our position early so that we're in a strong position should the market slow down. You know, in addition to the in excess of 500,000,000 that we had at the end of the first quarter, we also sit on five unencumbered terminals that are generating good EBITDA.
And in addition, we had investments in joint venture terminals that are strategically positioned in hub areas, which have generated significant and continue to generate steady EBITDA. And that provides us in total with further borrowing capacity of in excess of $400,000,000. So if you look at the savings combined with the financing possibilities, we have further in excess of $500,000,000 in liquidity enhancing measures. That should put us in a strong position and could also put us in a position to take advantage of opportunities that might arise at the other end of the COVID pandemic. Moving to slide 35.
It's really to give you a show of the development of various key financial metrics. Keep in mind, this now reflects the IFRS 16, whereas the common ones are actually measured against pre IFRS 16 measures. Again, I'll leave that to you to read through. There is not much, to say at this at the moment. AMG on slide 36 was higher this quarter due to a fourth quarter adjustment for profit sharing and also inflationary salary increases.
And the the increase in depreciation and amortization was mainly due to IFRS 16 being applied this quarter. Moving on to Slide 37. Our share of profits in JVs was 5,100,000.0 That was in line with the prior quarter. The improvement in tankers was really due to a loss taken on an asset held for sale in the fourth quarter. Income taxes were lower due to the impairment in Stolt Sea Farm and also a nonrecurrence of a fourth quarter adjustment at STC.
So moving on to Slide 38. As a reminder again, the EBITDA figures as presented here exclude any impact of IFRS fair value adjustments and impairment to Stolt Sea Farm's inventory gain or loss on sale of assets and other noncash onetime events. Tankers EBITDA was down due to lower results, while terminals remained flat, although the operating margin improved. STC's EBITDA decreased due to the higher operating costs. As a result, SNL's EBITDA for the quarter decreased to $100,000,000 from $117,000,000 With that, I'll hand it back to you, Henriks.
Thank you, Jens. On Page 39, the key messages for 2020 for our presentation for 2020. As Jens showed you, over $500,000,000 of liquidity at the end of the first quarter. We have taken aggressive and early action to reduce cash burn in all of our businesses, and we continue to work on a downside plan in case the or or, you know, when the market slows down, that we're ready. So we have a plan in place to trigger once we see that downside.
We have unencumbered assets for, available for further financing, as Jens showed you, believing that we can raise a potential 4 additional $400,000,000. We have a strong and good relationship with our core banks, and we also have ample room under our bank covenants in even in in the downside scenarios that we have taken. I must say that the team and the the organization has has really stepped up and understands the serious ness of the situation, are working very hard in achieving all these savings and are very committed on on keeping the, you know, the operations going. I'm very admirable. And I hope that, you know, in these types of crisis, if you're able to navigate through these crisis, there will be opportunities arising from it.
That concludes our our presentation. Operator, now we will open up for any questions that are out there.
Thank you. We seem to have no questions at this time. And we have one question, and it comes from Erik Hamilton from Pareto Securities. Please go ahead. Your line is open.
Yeah. Hi. Just two questions, really. The first thing, I
mean, if we take a step back and look at your financial numbers now and read the comments around what's happening in the market and what we're seeing and compare that to what you're saying, it seems perhaps to us as outsiders that, you know, what we're doing and the focus we're having on liquidity is a little bit drastic. I mean, can you maybe give an indication on what you are expecting in terms of volume drops, what you're seeing in the second and maybe third quarter, both in terms of volumes, what your clients are saying and perhaps also a little bit on the on the cost side, in terms of bunkers and, you know, further IMO 2020 transition costs? Because to us, it it sounds a little bit like your world is about to fall apart, but we can't really see that, right, from your numbers.
Well, thank you for the question. I would just start by saying is that we're hoping for the best but preparing for the worst. And, you know, the the numbers are start you know, when half the population is sitting inside, I do expect that there's going to be a significant drop in economic activity and in in in global manufacturing, in global GDP. I hope I'm wrong. And if I'm wrong, well, we can handle it.
But we would like to prepare, and we would like to be early, so that we have that necessary liquidity in place. Again, as we are as we are saying right now, we are not seeing a significant drop. We're starting to see weaknesses in some market, but we haven't seen, you know, a dramatic drop anywhere yet except for still Sea Farm. But on the logistics business, it it continues. But we are preparing for it, and I think it's prudent to prepare for it so that you are ready.
Our customers, they don't nobody knows what what is going to happen. So the customers are very difficult to get, information out of them. I think what, as I said during the presentation, what I think is happening is that they would like to continue, you know, believing that this is going to be a three, four months lockdown, that that they would like to keep production going. And even though they don't have maybe they don't have customers for it, they produce it so that they can keep the plant going. So either they store it, you know, they ship it at the end destination, and that's what we're seeing now.
But, eventually, if if it's an extended lockdown or a slow economy, that is going to impact the the the demand for transportation. So I hope you're right that we are overreacting, but at least we're planning planning for the worst, hoping for the best. I don't expect to see I don't expect to see any further IMO 2020. That's that's, you know, a transition from '19 to '20. It's very difficult to to get the timing totally correct.
So I think that we won't see any further IMO 2020 issue. We will cancel as many scrubbers as possible. Again, that's primarily to preserve cash. But, you know, where we where the contractor or the supplier is, late and we can get out of the contract, we will.
You know, I I it's it's, of course, prudent. On on the tank containers, it seems a little bit like, you know, the the increase in volumes and activity, And then you almost had a negative effect because it it did raise the cost base by more than what you got the benefits. Is that something that has continued, or was that also a little bit of a one off thing?
Your line is is pretty bad, but I think your question is if the the one offs, or what happened in tank containers was, in in the Chinese New Year was extended. And as a result, customers kept on shipping containers into China. There was a buildup of containers in China, which caused an unbalanced supply of containers around the world, which caused us to have to reposition the tanks. So and repositioning costs were quite high during the first quarter as a result of it. And I think we will continue to see repositioning costs high going forward.
The underlying market, the shipments were subsequent after the first quarter, subsequently, we have seen utilization of 71%, and we have seen high number of, of record number of shipments. So the the moves are there, but the cost of doing those moves and and the work needed to get the moves done because of the cancellation of sailings by the liners has put an additional. So the margins are under pressure, not only from competition, but the cost of doing the move has gone up. And I think we will continue to see that for a while. But the positive thing is that for the time being, activity is high in tank containers.
We are seeing signs of weakness in some markets. But again, on the positive note, we're seeing an increased demand for requests for using tank containers as storage. Now, no. I don't know if that's yeah. That's good that's good news for us because that's, you know, a rental income for us.
But yeah. So I think that what we saw in the in the first quarter tank containers was was the the the poor results there are primarily driven by the effects that we saw from the the the sulfur fuel, the repo cost, and the repo cost was very much driven by the corona outbreak in China and also the the cost associated with each of the moves because of the uncertainty and and the change of trade flows.
Perfect. That's good color. Thank you.
Thank you. And your next question comes from Dennis Angeliopoulos from ABG. Please go ahead. Your line is open.
Good afternoon, gentlemen. First question, you guys might have asked it, but can we fully assume that you guys have cost pass through for the bunkers, that there is nothing sort of outlined?
Can you repeat the question? Because your line was also breaking up. What was that? That one?
It's can we now assume that you're a 100% fuel pass through?
Yes. The bunker clauses in our COAs, 99% of them, we have full pass through of the increased bunker cost.
And on the spot market, some of your business, have you seen pass through there?
Well, the pass through, the form that the bunker prices have fallen recently have fallen, the rates have not been falling. If we ask if if we have seen an increase, we started to see an increase in the spot rates before the the before the coronavirus. We saw a positive momentum. We were able to get both the contract rates and the spot rates up. And then since then, as as you've seen recently, the spot rates, the the bunker prices have fallen dramatically, and we have not seen the same fall in spot rates.
So that's a positive.
And then just a follow-up. From your tanker space, it seems that there's a lot of one offs that are negatively affecting the tankers in Q1. But when we look at the sales in TC index, it's falling in Q1. Can you add some color as to why that's happening? Because right now, it looks like it's the weakest quarter ever on your historical time series.
Jens? Did you Yeah.
Yeah. Well, it those one offs are driving, the fall as well in that spot. As we talked about on the tanker slide 11, the lower trading results were partly related to scheduling issues, etcetera, and that's a negative on the sale in revenue index. Likewise, the bunker related costs were are also directly impacting that sales in revenue index. So that's why you see that significant drop from, I think it was 0.54 last quarter down to 0.5 this quarter.
So really really in in tankers, really, three things happened. It was an early transition to low sulfur fuel, which which was around $4,000,000 that we weren't able to pass on. Then we had low utilization because of the ballast legs. And the ballast legs were due to the dry docking related to scrubbers and the ballast water treatment systems. And also, had the incidents, yeah, on the Grennan, which caused us to reposition ships to discharge Grennan, which, again, caused scheduling issues for the whole for the whole fleet.
And the third part that was also around 4,000,000. And the third part was, shipwrending expenses. That's more driven by timing, but also slightly higher insurance premium, and that was a total of 2 and a half. So I think that the the majority of the drop that you see in tankers was one offs.
So we can just safely assume that quarter on quarter, it would have been approximately the same, adjusting for the one offs?
Yes.
Thank you, gentlemen. That's all the questions I have today.
Actually, ENC was slightly better, wasn't it? Yeah.
Would have been probably marginally up to without guessing, but, yes, I agree.
Thank you.
Thank you. We have no further questions at this time. Okay.
Everyone, thank you very much for participating in our first quarter earnings release. That completes the presentation. Thank you very much, and and keep keep well.
That does conclude our conference for today. Thank you for participating. You may all disconnect. Speakers, please stand by.