Good day, and welcome to the Stolt Nielsen Third Quarter twenty nineteen Results Presentation. Mode. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Niels Stolt Nielsen, Chief Executive Officer.
Please go ahead, sir.
Thank you. Good afternoon, good morning. Thank you for joining us for our third quarter's earnings presentation here in Oslo. Together with me, as always, Jens Gunn Hecke, CFO of Stolt Nielsen. We will be going through the normal presentation, which is on our website.
And the agenda, we will give an update on the Stolt Gundam, then we will go through the third quarter highlights. I will go through each of the businesses. Jens will take you through the financials, and then we will open up for question and answer at the end. On September 28, on Saturday, an explosion occurred on the followed by a fire on Stolt Gwyneon that was berthed in Ulsan, South Korea. I'm very happy to say that all crew are accounted for and are safe.
As far as we know, there has been no external pollution, no cargo has been released into the ocean. Safety is the top priority in our company, and it always has been and it will continue to be. We will not be able to pursue or succeed with our strategy unless we can operate safely, and we will do everything possible to continuously operate safely. And we are actively cooperating with the investigations to determine the cause of the accident. At this time, it is unknown what happened.
The ship is fully insured. Stolt Nielsen highlights. I believe the chemical tanker market has bottomed out, and we are, as Stolt Tankers, well positioned for the recovery. And we have done all preparations necessary to make a swift and quick decision or go for an IPO once the market conditions are right. Stolthaven Terminals.
With the infrastructure investments made over the recent years, we are positioned to significantly grow the free cash flow without any further capacity expansion. STC keeps delivering solid results despite the challenging market and is well positioned for growth as it maintains its leadership position. Axle Sea from the market outlook for Turbot and Sol is very positive, and the two new farms that we're building in Spain and Portugal for the Sol will further support growth in that segment. We are pursuing exciting projects in Avenir LNG, where we are a 45% shareholder as the business plan is put into effect in a growing LNG small scale LNG market. The Stolt Nielsen balance sheet and liquidity is strong.
Following the refinancing exercise that we have been through, we have raised over $850,000,000 allowing us to repay more expensive debt and push out our maturity profile. All of our businesses will generate free cash flow by the end of twenty twenty. So the debt will be coming down or it is coming down. Then moving on to Slide six, third quarter twenty nineteen highlights. Stolt Tankers, the operating profit was $50,000,000 and that's up from $12,800,000 mainly due to a 1.6% decrease in operating expenses.
Stolthaven Terminals operating profit of $19,500,000 slightly down from 19,700,000.0 in the previous quarter. Utilization was unchanged at around 91%, while the product handle was marginally down. Stolt Tank Containers, the operating profit was 12.1%, and that's down from 12.6% due to the market softness and price competition. Shipment decreased approximately 1.2%. In Stolt Sea Farm, the operating profit before the fair value adjustment of inventories was 2.1%, and that's slightly up from the second quarter.
Stolt Nielsen Gas, the operating loss of $1,100,000 down from a loss of $1,400,000 in the previous quarter, reflecting our share of the development expenses in Avenir and Corporate and Others, an operating loss of $2,000,000 versus a $2,100,000 in previous quarter. That gives us a meager $3,700,000 profit for the quarter, slightly up or basically the same as previous quarter. Far from where we need to be, but still, it is on the positive side of still positive. Moving then on to the Slide seven, which is the net profit variance analysis between the second and the first quarter. We delivered a $3,600,000 net profit last quarter.
We had $2,100,000 higher operating profit in Stolt Tankers, slight $200,000 down in Stolt Offshore, $05,000,000 down in Stolt Tank Containers. And then after the fair value valuation of the biomass in Stolt Sea Farm of negative 1.2% and lower S and G operating loss of 0.3% positive. That's from the divisional operating profit divisions. Then we had financing expenses of 1.9% higher than previous quarter and slightly and $1,400,000 lower tax, bringing it to a net profit of $3,700,000 for the quarter. Then moving on to Page eight, Stolt Tankers highlights.
The third quarter revenue was marginally down compared to the second quarter. The deep sea revenue increased 2.2, and the regional fleet decreased by 8.5%. The regional the decrease in the regional is not driven by is more driven by positioning of ships that were going for dry dock. Owning expenses decreased 3.9% compared to with the second quarter, driven mainly by cost efficiencies programs that we're working on. The freight rates, COA renewals in the quarter were down 1.5% compared to a decrease of 2.5% in the previous quarter.
However, the majority of the contracts that we renewed in the third quarter was with an increase. So in reality, only two of the contracts, they were big contracts, and they are well priced, there they got a reduction, but all other contracts that we renewed were with a profit or with an increase. So we lost some contracts and we won some contracts, but overall, the majority of the contracts that we renewed in the third quarter were up. Moving on then to Page nine. Tanker market has bottomed out.
The revenue, slightly up. Gross profit, slightly up. Not much to say here. Then moving on to Page 10, which is the variance analysis in operating profit between first and second quarter second and third quarter. So slightly lower operating revenue, but higher but better operating expenses, so lower operating expenses of 1,300,000,000.0 slightly higher depreciation, higher income from our joint venture, A and G expenses, etcetera, brings us from 19,700,000,000.0 to $19.5 The bunker cost hedges.
The average price for IFO consumed decreased to $4.7 per tonne in the third quarter, and that's down from $417 per tonne in the second quarter. Year to date COA bunker clause covers 65% of our total volume. So the bunker hedges that we have through our bunker clauses cover 64% of total volume. The $1,300,000 loss on the third quarter bunker hedge compared to the second quarter loss of 700,000.0 reflects the lower price and the increasingly negative forward curve for the HFO, the heavy fuel oil. IMO 2020, effective, as you know, on 01/01/2020, all ships must consume low sulfur fuel, 0.5 down from 3.5.
Stolt Tankers' plan is a mix of ships with scrubbers and to buy marine gas oil of 0.1% or new fuels of 0.5% when it becomes available. We have a detailed changeover plan for 104 ships, including a tank by tank inventory of steps. Transition time is probably six weeks in service with cleaning plan. Target changeover date to ensure full consumption of high sulfur fuel. So of course, you'd like to use up the high it's quite a complex planning to make certain that you consume all of the heavy fuel oil that you have on board before the end of twenty twenty, but at the same time that you have only the right fuel on board when 2020 occurs.
Good progress is being made in passing cost increments to our customers. So of the contracts that have been renewed into twenty twenty, fifty percent of them have a full pass through of costs. The remaining are to be renewed for the rest of the year. So in other words, we have full success in passing on the increased bunker cost to our customers in the COAs. There are still some that haven't that we renewed earlier in the year where we decided that we were going to meet up in October to agree upon a bunker clause, and that is in progress.
But whatever we have renewed into and if we don't come to an agreement, we can move out of that contract or both parties can walk away. But whatever we have committed to into 2020 have a full pass through. Page 13. This is the Stolt Tankers Joint Services sailed in time charter index and sensitivity. And here you can see if you put on your glasses, you can see that there is a small uptick, and let's hope that that is the beginning of the turnaround.
And I actually believe it is. I don't think it's going to the question is, of course, how fast it will be going, but I don't think that we will see a further deterioration. And here, you can also see a 5% increase in time charter index gives a 5.3% impact on net profit. On Page 14, chemical tanker fleet and order book for the third quarter twenty nineteen. Unfortunately, the order book went from 7.2 to 8.1.
There was a Japanese tonnage provider that ordered some Japanese newbuild, 32,000 deadweight. So the order book stands at 8.1, up from 7.2. Supply growth will ease to an estimated 2% per annum in 2020, its lowest level since 2014 and less in 2021 as the order book continues to shrink. So I will say that with this order book and the slowing of new tonnage coming into our segment and as you can see that the bottom has from the contract negotiations and from our results, you can see that I sincerely believe that we have reached the bottom. Now how quick this market will turn around is how quickly we will see a strong market is difficult to say with so much uncertainty going on with the trade war and the impact that trade, I would say, is more a political recession that is looming rather than the fundamental.
So the what we're seeing in IMF is predicting that the updated estimate for 2019 growth is slowed down from 3.2 a year ago down to 2.9, And in 2021, two point seven and two point eight, respectively. So still a global GDP. And as long as there's a global GDP and as you know, the slowing down in supply of new ships coming into the market, I think we will continue to see a strengthening of our segment. For the chemical market, forecast to predict a wider range of outcomes than in recent year. Stolt Tankers see a 2% to 4% demand growth for 2020 as a reasonable assumption.
So as long as there's growth, I think that we will see improvements in our markets. The product tanker operators expect supply and demand balance in 2020 and IMO 2020 regulations starting on January 1. And here are these slides, think I believe they're from Clarksons, show also their predictions about the growth in trading of the various products that we carry. Moving on to Stolthaven Terminals, Page 16. The operating revenue was flat compared to the second quarter, while our expenses decreased by $1,300,000 resulting of a $800,000 improvement in gross profit.
Equity income from our joint venture increased by 7.7% to $5,800,000 due to higher utilization at our joint venture terminal in Antwerp. Utilization for the wholly owned terminals remained at 91%, while the total product handled decreased 0.8% compared to the second quarter. Non strategic Stolthaven terminal in Altona, Australia was sold at the July for 10,000,000. And here, you can see steady as we like it, and it's steady moving in the right direction, both the revenue, the gross operating profit and also the operating profit. So quickly going through the variance analysis and the operating profit between the third and fourth quarter on Page 18.
Slightly lower operating revenue of 0.2%, 1.3% of lower operating expense, slightly higher depreciation, slightly higher income from our joint venture of $400,000 lower A and G expense of $700,000 and others of 0.6%, bringing us 19.5%. But more importantly, on Page 19, the team at Soltaven has really delivered a turnaround, as we have talked about for quite a while. The compound annual growth rate of EBITDA since 2015 has been 11%. We estimate that these are the wholly owned, it's $111,000,000 at the end of the year. If we combine it with the joint venture, we will be at 130 Without doing anything further, without spending any more additional money, based on the capacity that we have and based on the contracts that we currently have and also that are in the pipeline, we estimate that the EBITDA from this business in 2023 should be 160,000,000 That is 130,000,000 from the wholly owned and around 30,000,000 from the joint ventures.
And the joint venture is not EBITDA, that's equity income. The market for Stolthaven. The U. S. Market is slightly reflecting the impact on the ongoing U.
S.-China dispute and the general slowdown in the economy. Europe demand remains stable for chemicals. The CPP market continues to see storage demand for IMO bunkers and jet fuel, although overall market remains weak with rates reflecting the situation. The Asian market, the Chinese market is generally weak. However, our terminal in Lingang, which was the location where we had the explosion, I'm pleased to say that the utilization there has now reached 75%, which is a great improvement.
Also because of the ongoing slowdown in the economy that we also see so both S.-China trade dispute and the slowdown in the Chinese economy, we are seeing a general slowdown in the area. The Korean market remains stable for chemicals. And also, the Brazil market remains generally stable for petroleum and chemicals. Then moving on to salt tank containers.
STC's operating revenue was unchanged from the second quarter as a 3.9% increase in transportation revenue was mostly offset a 3.9% decrease in transportation revenue was mostly offset by increase in demerge and other revenues. The third quarter saw a 1.2% decrease in the shipment due to the increased competition in some of the regions, the ongoing trade war between The U. S. And China and general economic softness. During the quarter, operating expenses increased by 0.9%, reflecting higher repositioning and move related expenses.
The transportation margin per shipment decreased 14.4% from the second quarter, reflecting tougher competitive environment. Utilization decreased to 67, and that's down from 69% in the second quarter, reflecting an increase in intraregional trade with shorter shipments, change in trading patterns as we see it. Still, the operating the revenue was marginally down. Our gross profit went from 29.7% up to 28.3, and the operating profit, as I reported earlier, 12.6% down to 12.1%. The variance analysis quickly going through from second to third, from 12.6%, lower revenue of 0.6%, lower freight cost of 0.9, positive, increase in tank rental cost of 0.9%, higher equity income from our joint venture of $05,000,000 and others of 0.4 gives us 12,100,000.0 The market development.
Global slowdown of activity in main market is putting pressure on margin, no doubt. The trade war between USA and China are not affecting trade volumes overall, but we have seen a change in trade flows. Just to give you an example, year on year, we have seen a drop of 65% reduction of shipment from China to U. S. And a 35% reduction from U.
S. To China. Huge. And that has caused an imbalance of the fleet, not only for us but for everyone. So you have a buildup of tank containers in both China and The United States because of the different trade flows, and that has resulted in huge competition of whatever business is available to reposition those tanks.
So one of the reasons that there's been highly competition is that because overall shipments are pretty much the same, but it's the buildup of inventory of tanks in these regions that have caused enormous competition to get whatever cargo is available to reposition the tank rotators. You also see that we have spent much more on empty repositioning in the last quarter. So that's the negative side. The positive side is that if the market, if this trade war changes or stops or they come to some sort of, this can change very quickly. I don't see an underlying fundamental I'm not worried about the tank container market.
That will quickly pick up again as long as well, I don't know how long this dispute is going to last, but basically, the demand is there. Yes, there's a lot of supply and a lot of competition, but we will be able to make a proper return even with strong competition, but this imbalance is making a disruption and making it very difficult to plan. Shift in trade flows is adding margin pressure in some markets where inventories build up, as I just said, and ocean freight rates are expected to increase due to the 2020 the steamliners and also a tighter ocean freight market in certain tighter ocean freight capacity in certain markets. Sea Farm. The turbot revenue increased on Page 25.
The turbot revenue increased to 24.3% from 21.5% driven by a 21.6% increase in volumes sold. We had much better growth than expected, partly offset by lower average price as part of the sales promotion. The sold revenue decreased $2,700,000 from $3,000,000 driven by a 13.8% decrease in volumes sold, while prices increased 3.2%. The fair value adjustment had a negative impact of 2.5 compared with a negative impact of 1.2 in the previous quarter. The new state of the art solar farm under construction in Spain and Portugal using Solsea Farm recirculation technology, operation in Spain.
This is the picture of the one in Spain. It's almost complete. You can see that we have solar panels to help us heat the water. It's total recirculation, and it will be stocked with fish towards the end of this year, beginning of next year. So if you look at Stolt Sea Farm, it's a little disturbance in the whole picture, but Stolt Sea Farm, the turbid business makes around between 10,000,000 and $12,000,000 per year net profit.
The sole, development cost of sole, is around $4,500,000 per year. And then you have the caviar, which is having an extremely tough time that is affecting, which we are working on solving. But the two main businesses within Seoul Sea Farm, $10,000,000 to $12,000,000 net profit for Seoul, and the development cost of the Seoul until we get these new farms up and running is around $4,500,000 Next year will be the same thing because we will stack up and we will build up the biomass in the soil farm, but then from end of 'twenty or beginning of 'twenty one, we should see the revenue coming out of that business too. Stolt Nielsen Avanir. As you know, we are a 45% shareholder in Avanir Energy.
Ships on order. We have four seven thousand five hundred cubic meter and two sixty thousand as well as building a terminal in Sardinia. The first of the ships that are being delivered, hopefully in January, is going on a three year charter to Petronas. And we're working on the second ship also to be going on time charter or bareboat to at similar terms once that ship is delivered, very close to fixing that. So then we have two ships on bareboat.
Now the strategy in Avenir is not to be a tonnage provider. We don't want be a shipping company. We would like to be a supplier of small scale LNG. So we would like to ship it. We would like to source it, ship it, store it, distribute it and sell it, make a margin on the gas.
But before you can make a margin on the gas, you need to build up the necessary offtake, and until which we are doing in Sardinia now. But until you have that offtake, we would like to time charter or bareboat out the ships to finance this whole operation. And with those two time charters or these two bareboats, I think actually the company will be making money next year. The terminal in Sardinia, High Gas Terminal is construction and progressing well and operation is expected to commence in August. And we are negotiating a term sheet with a major industrial offtake customer in Sardinia, which will be the largest single customer of 200,000 tons plus.
That will be serious good business. And some nice pictures. Unfortunately, we had a fire on the second ship, so not the one that is going to be delivered to Petronas, but the second ship might be delivered. So instead of being delivered in March, they're looking at somewhere during the summer. And that brings us to the financial statements, and I
give the word to Jens. Okay. Thank you, Niels. Good afternoon to everyone here in Oslo, and good morning to those of you listening in from The United States. As normal, I will provide some details about the financial results for the third quarter twenty nineteen that we released this morning, and I will also give some further guidance on certain specific P and L items for the next quarter.
I also want to remind you that we have filed the press release with the interim financial statements with the Oslo Stock Exchange, and you will also find this with on our webpage at www.stoltnielsen.com under Investor Relations, Investor section there. Moving on to the net profit. Operating profit, if you look at the top line there, operating profit before one offs for the third quarter was $41,000,000 That's slightly down from $41,500,000 in the prior quarter. Higher operating profits at Tankers as a result of the lower operating expenses were unfortunately more than offset by the higher negative fair value adjustment that we had at Stolt Sea Farm that Niels mentioned and lower profits at STC. STC sorry, Stolt Tankletain's decrease was a result of 1.2% fewer shipments and lower transportation margin, as mentioned by Niels.
During the quarter, we recorded a gain on sale of on two assets. One was the Stolt Kilauea, where we had a gain of 1,400,000.0 and then we also sold the Altona terminal down in Australia with a gain of $700,000 The net the reported operating profit then was $43,100,000 that's slightly up from the prior quarter. Net interest expense was $34,700,000 that's up from the prior quarter. It was mostly due to partial write off of some debt issuance costs as we have been refinancing some of our debt and had to expense this. FX losses, as you see there, at minus SEK 1,900,000.0, consistent was consistent really with the prior quarter, and that's really reflecting a continued strong dollar.
And income taxes were lower, and that's really driven by the poor results that we had at Stolt Sea Farm. So net, we came in at 3,400,000.0 or 3,700,000.0 for those attributable to equity holders of S and L. And if you look at the EBITDA, you know that's at 106,000,000 and also this is before fair value of biological assets, insurance reimbursements and other onetime noncash items. Going over to the next slide, the balance sheet. You will see that the debt at quarter end was $2,370,000,000 That's a reduction of $56,000,000 from the prior quarter as we had excess free cash flow from operations after capital expenditures.
And I think that's quite significant to note that even with the market that we're operating in now, we're able to produce a positive free cash flow. Our liquidity position also improved by some 189,000,000 to about almost $600,000,000 is $599,000,000 to be exact, following the long term debt issuance that I will touch on later. The current maturity of debt, if you look at the liability side of the balance sheet, that was at $434,000,000 Of this, 147,000,000 related to the bond that matured on September 4 just after the quarter end and has been repaid in cash. And other debts that we have maturing within the next twelve months includes the April bond with $160,000,000 maturing in April 2020 as well as Australasia terminal loan of some $52,000,000 maturing in the second quarter next year. So moving over to the covenants then.
We had debt to tangible net or if you look at the tangible net worth, that held steady at 1,600,000,000.0 and consequently, the debt to tangible net worth went down, so it was at 1.52 last quarter and is now down to 1.48. The EBITDA to interest expense, however, that was down from 3.2 in the prior quarter to 3.05 in this quarter, and that is really reflecting the weakening EBITDA. And I'll comment a little bit back on how the impact of past EBITDA quarters is impacting the covenants. And likewise, if you look down in the bullet points, you will see that we had the net debt to EBITDA of 5.27%, and that was up from 5.22% in the prior quarter. We do expect probably slightly higher interest expense for the next quarter, and that is again driven by the need to write off debt issuance cost as we continue to draw down on the new financing to replace existing financing.
Going over to the cash flow. Cash flow from operations was a positive €84,900,000 As you see, that was up from 48,500,000.0 in the previous quarter. And €20,000,000 of this improvement is due to the timing of interest payments. And the way the debt is structured, we have a heavy payment of interest in the second and the fourth quarter and also some principal payments, as you will see further down. In addition, we had working capital improvements, and that's really also because of the timing of accounts payable and voyage expenses and some insurance payments between the quarters.
So if you look down to the next section, you see the capital expenditures, and they reflected the terminal investments of $19,000,000.9000000 dollars on drydocking of ships, dollars 12,000,000 on regulatory tanker capital expenditures and $6,000,000 on Stolt Sea Farm. So in total, we were about $48,600,000 in capital expenditures. We also had a positive cash flow impact from the sale of the Sol Kilauea and the Altona terminal of $11,400,000 as you see there. So net cash used in investing activities was then net $35,200,000 negative. During the third quarter, you see we repaid some $104,000,000 of long and short term debt, and we also repaid the full outstanding balance on our revolving credit line was some $340,000,000 and this was done with the $4.00 $9,000,000 that we raised in new debt as well as from free cash flow.
So looking at the net, the cash flow for the quarter was a positive $9,400,000 after all this and that resulted in a cash balance at the end of the quarter of $143,000,000 very high compared to our historic averages, but a lot of that was because we had the bond maturing on September four days after the quarter end. As a reminder, when you look at the EBITDA on this next slide, this is again, it's presented excluding any impact of the IFRS fair value of the biological assets, insurance reimbursements and other onetime noncash items. You see here that Tankers' EBITDA was up slightly, but really not much different from the last four quarters, and that's really due to the sublet lower sublet and M and R expenses, which really offset the lower regional revenue that Nils mentioned earlier. Terminals EBITDA was up, and that's consistent with the trend that we have seen for a while now. And STC's EBITDA decreased due to the continued pressure on margins and lower shipment volume.
So as a result, SNL's EBITDA for the quarter was €106,000,000 as you will see in the bottom right quadrant. Not much changed really from the last from the previous three quarters. But coming back to the covenants, the two EBITDA covenants, and you will see the impact here more clearly in that in this last calculation, we have had the which quarter was that, the third quarter of 'eighteen dropping off. The prior quarter, had the second quarter of 'eighteen dropping off. Those were two high quarter, high EBITDA quarters, and that has caused the deterioration of those two covenants.
Going forward, you will see next quarter, the quarter that will drop off will be the 103,000,000, so we should not we actually expect to see an improvement going forward on those covenants. Going on to the capital expenditures program, note that this excludes the drydocking of ships, but capital expenditures for the quarter were $40,000,000 So year to date, we have spent $100,000,000 This was, as I mentioned, split between terminals with $19,000,000 and tankers, 12,000,000 for regulatory CapEx. And in addition, we have spent year to date through the third quarter, we spent $21,000,000 on dry dockings. As of August 31, you also see that the remaining capital expenditures were $117,000,000 That's a lot to spend in one quarter only. So our expectation is really that a good portion of that $117,000,000 will be pushed out to the first quarter of twenty twenty.
Looking at what we expect to come over the next subsequent four years, we have about $258,000,000 that's on schedule to be spent between 2020 and 2023. And just a few key items there is about $23,000,000 is expected for ballast water treatment systems. We have some 20,000,000 that are for terminal ongoing terminal investments. For tank containers, we have some 10,000,000 that's related to the Houston facility and wastewater treatment there. And then we have the new farms in Spain and Portugal for Stolt Sea Farm.
There's also one item there, the SEK 36,000,000 that is estimated for the remaining of the year, that is related to our investment in Avenir, where the three main owners have committed to inject a further €72,000,000 and 36,000,000 is our share of that. If we can go over to the debt maturity profile on the next slide. As mentioned earlier, there's been a lot of financing activity that Julian has been very busy with. First of all, we closed during the quarter on the $200,000,000 U. S.
Private placement, drew down on that on September 17. We also concluded a $416,000,000 sale leaseback with China Merchant Bank Financial Leasing, and we drew down $232,000,000 on that prior to the quarter end. That will continue to receive funds on that. I think 141,000,000 was received now mid September, and then we have a further 43,000,000 that will be drawn down in mid October. So with these two new financings, that gave us the liquidity to repay the $148,000,000 bond that matured on September 4.
And we still have available liquidity to pay off the $160,000,000 bond in April 2020 and the $52,000,000 terminal facility in Australasia without having to go back to the bond market. And even after this, then the aim is that we shall still sit with $200,000,000 in available liquidity. So all in all, a very strong debt profile and liquidity position for the company going forward. And addressing the 'twenty one and 'twenty two bond maturities, we do have unencumbered assets that should the bond market not be favorable at the time, that we can also lean on those. Looking at some of the key metrics that I've talked about earlier in more graphic form, the Board has really a self imposed limit on the debt to tangible net worth of 1.5 to one, and you can see that we have adhered to that more or less as we've stuck to about 1.5 to one and been diligent in keeping that where it is.
The aim is to, of course, get that down. EBITDA to interest expense has been on a declining trend line, as explained earlier, due to the declining EBITDA. Likewise, the net debt to EBITDA will possibly now flatten out, and we should hopefully see that, that starts decreasing. On the bottom right, you have our free cash flow. In 2018, we had some $300,000,000 in free cash flow before interest but after capital expenditures.
That's come down a little bit this year because of the partly the weaker market, but also because of some more capital expenditures. We expect to end up around maybe $200,000,000 at the end of the year, and that really depends on how much of the CapEx we're able to do. But it also gives us liquidity to repay after interest to repay on debt. And we would say even if we don't see a recovery in the market, we are still in a position where we will generate sufficient cash to be able to continue to reduce our debt load in 2020. Moving over to the A and G.
For the quarter, we're at 51,900,000 and that's down from 52,800,000.0 as we saw in the second quarter. Our guidance for the third quarter was 55,000,000 so we ended up well below that, much due to also continued weak dollar. And our guidance for the fourth quarter of this year is a slight increase to $52,700,000 as you see. Moving to depreciation and amortization. For the third quarter, this was $64,300,000 slightly up from the 63,800,000.0 that we had in the prior quarter, and that was against the guidance of $65,100,000 The high depreciation from the prior quarter was really driven by an increase in the terminals depreciation, and that was because additional capacity was brought online.
This was the conclusion of the expansion that we did in Santos, Brazil. So hence, we had to start depreciating that. Our guidance for the next for this quarter, the fourth quarter, is 64,700,000.0, and that's because we expect slightly higher depreciation in tankers due to the hefty drydocking program that we've had, and that will be then written off until the next depreciation no, next drydock, sorry. Moving over to share of profit of JVs and tax. The profit our share of profit from JVs was 6,600,000.0 this quarter, and that was up from 5,300,000.0 in the previous quarter as really all JV results improved, which is encouraging.
The two deep sea tanker JVs, they improved with higher revenues from the joint service as well as some better lower ship owning costs and also for our joint venture with NYK, the NYK Stolt Tankers, we also saw more operating days. At Stolthaven, the increase reflect the high utilization that we saw at our joint venture terminal in Belgium, in Antwerp, Belgium. Our guidance for the next quarter is $7,000,000 as you see, and that's reflecting a bit of optimism in the tanker markets and continued improvements in terminals and steady going in SGC. Tax expense for the quarter was 200,000.0, that's down from SEK 4,300,000.0, and that really reflects the lower income that we saw in the decrease was driven by the lower income in Stolt Sea Farm. Just briefly, and this is a repeat of what we said last quarter, but first of all, IFRS 16 does not apply to us yet.
It will not apply to us until the quarter starting December 1. There's no cash impact from the changeover to IFRS 16. It will impact our balance sheet by some SEK 189,000,000 on the asset and debt side. EBITDA is estimated, and this will change by the time we actually get there, but it's estimated to have a positive impact on EBITDA of some SEK 47,000,000. The covenants will be impacted slightly, as you see at the bottom right of this slide, but more importantly, with in all our bank facilities, we have agreement that we can continue with the old covenant measurement until we mutually reach a mutual agreement on the revision of those bank covenants on the financial covenants.
So with that, I would like to hand it back to Eunice.
The key takeaways. As Jens showed you, EUR 3,400,000.0 net profit for the quarter and EBITDA of 106,000,000. We started off, and we will end by saying that we believe the tanker market has bottomed out and that we are well positioned with our fleet for recovery, and we have prepared ourselves for an IPO. Stolthaven Terminals is stable and with a promising outlook. Again, the free cash flow coming from that business based on the assets that we have should give us 100,000,000 plus of free cash flow.
Steel Tank Containers is seeing an increased competition, a change in trade flows and a slower economic growth causing the pressure on the margin, but still delivering solid results. And I am yes, it's a challenging market condition now, but I think the fundamentals in that business in the long run are healthy. Still Seafarm continues to be show underlying improvements or promise in both the turbot and the sole business. And as Jens showed you, he's done a tremendous job in financing our business, which has given us ample cash and a competitively priced debt, and we're well positioned to for the next two years. Thank you, guys.
And that completes our presentation, and we will then open up for questions. We'll start here in Oslo for anyone that has any questions.
Yeah. Hi. I was wondering about Stolt Grundan, and she's one of your advanced chips, and there isn't that many of them around. Is that gonna create any issues for you operationally that she's gonna be out of service robot?
No. It's gonna create less supply and probably, hopefully, higher demand. Let's see what happens. It's No. We will be able to service our contracts our fleet without the salt grenade, without any problems.
You remember, we used to have 80% COA rate coverage. Now we are at 70%. We have lost some, but we're also hopefully opening up more spot space for the recovering market. So we do have enough tonnage to be able to service the contracts that we're committed for. She's one of the ones that we call the N43s they build in Norway, 43,000 deadweight, partly stainless steel but also some coated tanks because at that time, the stainless steel prices were high.
So she's not the most sophisticated but up there. But to answer your questions, we will be able to handle our sailing schedule and our contract commitments without the ship while she's out of service.
And secondly, in terms of scrubbers, you mentioned that you had a mixed program. How many ships are you gonna install on, and how many are left in terms of installation?
We have usually not stated it, but we will say it's a total of 14, is it? Sorry, 20, about 14 new ones and then six on new buildings. We have I'll have to come back to you how many have been already installed, how many will be installed by the 2019 and how much we so I'll come back to you with the exact timing of the installation of the scrubbers. So out of a fleet, large fleet, 14 is that's it.
Petter Huggen, Kepler Cheuvreux. Just a quick follow-up on the last one then. The 20 vessels, at what sort of relative to your total bunker consumption, how much will be scrubbed and how much will be retained in the compliant fuel?
Jens, will you do the math, please?
That's a tricky question to answer because it also depends on when the conversion will be concluded. So but we don't have that exact answer now.
And you, in the presentation, Nelsus, you said that 0.5% wasn't available as of yet. At what point do you think you will actually start to do trials with
We have started c trials with
Okay. Yeah.
C trials. Yeah.
Thank you.
If there's no further questions in Oslo, operator, can you ask if there's anybody on the phone that would like to ask any questions? Operator? Thank
No questions coming through on the line, sir.
If there's no further questions in Oslo, that completes our presentation. Thank you for taking the time to come. Thank you.
That does conclude our conference for today. Thank you all for participating. You may all disconnect.