Good day and welcome to the Stolt-Nielsen third quarter 2019 results presentation. At this time, participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you need to press star and one on your telephone and wait for your name to be announced. 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 Grüner-Hegge, CFO of Stolt-Nielsen. We will be going through the normal presentation, which is on our website and the agenda. We will give you an update on the Stolt Groenland. We will go through the third quarter highlights. I will go through each of the businesses. Jens will take you through the financials. We will open up for question and answer at the end. On September 28th, on Saturday, an explosion occurred followed by a fire on Stolt Groenland 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. We will do everything possible to continuously operate safely. 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, Stolt Tankers, well-positioned for the recovery. 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 result despite the challenging market and is well positioned for growth as it maintains its leadership position. At Stolt Sea Farm, the market outlook for turbot and sole is very positive, and the two new farms that we're building in Spain and Portugal for the sole will further support growth in that segment. We are pursuing exciting project 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 million, 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 2020. The debt will be coming down, or it is coming down.
Moving on to slide number six, third quarter 2019 highlights. Stolt Tankers, the operating profit was $15 million, and that's up from $12.8 million, mainly due to a 1.6% decrease in operating expenses. Stolthaven Terminals' operating profit of $19.5 million, slightly down from $19.7 million in previous quarter. Utilization was unchanged at around 91%, while the product handle was marginally down. Stolt Tank Containers, the operating profit was $12.1 million and that's down from $12.6 million 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 $1.1 million, down from a loss of $1.4 million in the previous quarter, reflecting our share of the development expenses in Avenir.
Corporate and others, an operating loss of $2 million versus a $2.1 million in previous quarter. That gives us a meager $3.7 million profit for the quarter, slightly up or basically the same as the previous quarter. Far from where we need to be, but still it is still positive. Moving on to slide seven, which is the net profit variant analysis between the second and the first quarter. We delivered a $3.6 million net profit last quarter. We had $2.1 million higher operating profit in Stolt Tankers, slight $200,000 down in Stolt Offshore, $500,000 down in Stolt Tank Containers, and then after the fair valuation of the biomass in Stolt Sea Farm of a -$1.2 million and lower SNG operating loss of $0.3 million positive. That's from the divisional operating profit divisions.
We had financing expenses of $1.9 million higher than previous quarter and $1.4 million lower tax, bringing it to net profit of $3.7 million for the quarter. Moving on to page eight Stolt Tankers highlights. The third quarter revenue was moderately down compared to the second quarter. The deep sea revenue increased 2.2%, and the regional fleet decreased by 8.5%. The decrease in the regional is more driven by positioning of ships that were going for dry dock. Owning expenses decreased 3.9% compared 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.
In reality, only two of the contracts, they were big contracts, and they are well priced. There they got a reduction, all other contracts that we renewed were with a profit or with an increase. We lost some contracts and we won some contracts. Overall, the majority of the contracts that we renewed in the third quarter were up. Moving on to page nine. Tanker market has bottomed out, the revenue slightly up, gross profit slightly up. Not much to say here. Moving on to page 10, which is the variance analysis in operating profit between first and second quarter, second and third quarter. Slightly lower operating revenue, better operating expenses. Lower operating expenses of $1.3, slightly higher depreciation, higher income from our joint venture, A&G expenses, et cetera, brings us from $19.7 to $19.5. The bunker cost hedges.
The average price for IFO consumed decreased to $407 per ton in the third quarter. That's down from $417 per ton in the second quarter. Year to date, COA bunker clause covers 65% of our total volume. The bunker hedges that we have through our bunker clauses cover 64% of total volume. The $1.3 million loss on the third quarter bunker hedge compared to the second quarter loss of $0.7 million reflects the lower price and increasingly negative forward curve for the HFO, the heavy fuel oil. IMO 2020, effective, as you know, on January 1st, 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. Of course, it's a 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 2020. 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. Of the contracts that have been renewed into 2020, 50% of them have a full pass-through of cost. The remaining are to be renewed for the rest of the year.
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 we renewed early 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. If we don't come to an agreement, we can move out of that contract or both party can walk away. 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. 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. I actually believe it is.
The question is, of course, how fast it will be going, but I don't think that we will see a further deterioration. 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 the order book for the third quarter of 2019. 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. 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. I must 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. 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 it's more a political recession that is looming rather than the fundamental.
What we are seeing, IMF is predicting that the updated estimate for 2019 growth is slow down from 3.2 a year ago down to 2.9, and in 2021, 2.7 and 2.8 respectively. Still a global GDP. 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%-4% demand growth for 2020 as a reasonable assumption. 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 1st.
Here are these slides, I think, I believe they're from Clarksons and show also their predictions about the growth in trade 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 $1.3 million, resulting of a $0.8 million improvement in gross profit. Equity income from our joint venture increased by 7.7% to $5.8 million due to higher utilization at our joint venture terminal in Antwerp. Utilization for the wholly owned terminals remained at 91%, while the total product handle decreased 0.8% compared to the second quarter. Non-strategic Stolthaven terminal in Altona, Australia was sold at the end of July for AUD 10 million.
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. Quickly going through the variance analysis in 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&G expense of $700,000 and others of $0.6, bringing us $19.5. More importantly, on page 19, the team at Stolthaven 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, is $111 million at the end of the year.
If we combine it with the joint venture, we will be at $130 million. 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 million. That is $130 million from the wholly owned and around $30 million from the joint ventures. The joint venture is not EBITDA, that's equity income. The market for Stolthaven, the U.S. market is slightly weaker, reflecting the impact on the ongoing U.S.-China dispute and a 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.
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. Because of the ongoing slowdown in the economy that we also see, so both the U.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. The Brazil market remains generally stable for petroleum and chemicals. Moving on to Stolt Tank Containers.
STC's revenue was unchanged from the second quarter as a 3.9% decrease in transportation revenue was mostly offset by increase in the M&R 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 high 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 intra-regional trade with shorter shipments. Change in trading patterns, as we see it. 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 $ half a million and others of $0.4 gives us $12.1. The market development. Global slowdown of activity in main market is putting pressure on margin, no doubt. The trade war between U.S. 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.
That has caused an imbalance of the fleet, not only for us, but for everyone. You have a buildup of tank containers in both China and the U.S. because of the different trade flows. That has resulted in huge competition of whatever business is available to reposition those tanks. One of the reason 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 container. You also see that we have spent much more on empty repositioning in the last quarter. That's the negative side. The positive side is that if this trade war changes or stops or they come to some sort of agreement, 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. 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. 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 inventory is built up, as I just said, and ocean freight rates are expected to increase due to the 2020 for the steam liners and also tighter ocean freight capacity in certain markets. Seafarm. The turbot revenue increased on page 25. The turbot revenue increased to 24.3% from 21.5%, driven by a 21.6% increase in volume sold.
We had much better growth than expected, partly offset by lower average price as part of the sales promotion. The sole revenue decreased $2.7 million from $3 million, driven by 13.8% decrease in volume 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 sole farm under construction in Spain and Portugal using Stolt Sea Farm recirculation technology. Operation in Spain. This is the picture of the one in Spain. It is almost complete. You can see that we have solar panels to help us heat the water. It is total recirculation, and it will be stocked with fish towards the end of this year, the beginning of next year. If you look at Stolt Sea Farm, it is a little disturbance in the whole picture.
Stolt Sea Farm, the turbot business makes around between $10 million and $12 million per year net profit. The development cost of sole is around $4.5 million per year. You have the caviar, which is having extremely tough time that is affecting, which we are working on solving. The two main businesses within Stolt Sea Farm, $10 million to $12 million net profit for sole and the development cost of the sole until we get these new farms up and running is around $4.5 million. Next year will be the same thing because we will stack up and we will build up the biomass in the sole farm. From end of 2020 or beginning of 2021, we should see the revenue coming out of that business too. Stolt-Nielsen Avenir. As you know, we are a 45% shareholder in Avenir LNG. Ships on order.
We have 4 7,500 cubic meter and 2 60,000, as well as building a terminal in Sardinia. The first of the ships that are being delivered, hopefully in January of next year, is going on a 3-year charter to Petronas. We are working on the second ship also to be going on time charter or bareboat at similar terms once that ship is delivered. Very close to fixing that. We have 2 ships on bareboat. The strategy in Avenir is not to be a tonnage provider. We don't want to be a shipping company. We would like to be a supplier of small scale LNG. 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.
Before you can make a margin on the gas, you need to build up the necessary offtake. Which we are doing in Sardinia now. Until you have that offtake, we would like to time charter or bareboat out the ships to finance this whole operation. With those two time charters or these two bareboats, I think actually the company will be making money next year. The terminal in Sardinia, Higas terminal, is construction and progressing well, and operation is expected to commence in August of next year. 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+. That will be serious good business. Some nice pictures. Unfortunately, we had the fire on the second ship.
Not the one that is going to be delivered to Petronas, but the second ship might be delivered. Instead of being delivered in March, they're looking at somewhere during the summer. That brings us to the financial statements. I give the word to Jens.
Okay. Thank you, Nils. 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 2019, that were released this morning, and I will also give some further guidance on certain specific P&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. You will also find this on our webpage at www.stolt-nielsen.com under investor relations, the 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 million. That's slightly down from $41.5 million 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. Sorry. Stolt Tank Containers 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 on two assets. One was the Stolt Kilauea, where we had a gain of $1.4 million. Then we also sold the Altona terminal down in Australia with a gain of $0.7 million. The reported operating profit then was $43.1 million. That is slightly up from the prior quarter. Net interest expense was $34.7 million. That is up from the prior quarter.
It was mostly due to a partial write-off of some debt issuance cost as we have been refinancing some of our debt and had to expense this. FX losses, as you see there at -$1.9 million, was consistent really with the prior quarter. That's really reflecting a continued strong dollar. Income taxes were lower and that's really driven by the poor results that we had at Stolt Sea Farm. Net, we came in at $3.4 million or $3.7 million for those attributable to equity holders of SNL. If you look at the EBITDA, you note that's at $106 million and also this is before fair value of biological assets, insurance reimbursements, and other one-time non-cash items. Going over to next slide, the balance sheet, you will see that the debt at quarter end was $2.37 billion.
That's a reduction of $56 million 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 are operating in now, we are able to produce a positive free cash flow. Our liquidity position also improved by some $189 million to about almost $600 million, it's $599 million to be exact, following the long-term debt issuance that I will touch on later. The current maturity of debts, if you look at the liability side of the balance sheet, that was at $434 million. Of this, $147 million related to the bond that matured on September 4th, just after the quarter end, and has been repaid in cash.
Other debt that we have maturing within the next 12 months includes the April bond with $160 million maturing in April 2020, as well as Australasia terminal loan of some $52 million maturing in the second quarter next year. Moving over to the covenants then. If you look at the tangible net worth, that held steady at $1.6 billion, and consequently the debt to tangible net worth went down. 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. That is really reflecting the weakening EBITDA. I'll come a little bit back on how the impact of past EBITDA quarters is impacting the covenants.
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, 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 $84.9 million. As you see, that was up from $48.5 in the previous quarter. $20 million of this improvement is due to the timing of interest payments. The way the debt is structured, we have a heavy payment of interest in the second and the fourth quarter, also some principal payments, as we'll 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. If you look down to the next section, you see the capital expenditures, and they reflected the terminal investments of $19 million, $9 million on dry docking of ships, $12 million on regulatory tanker capital expenditures, and $6 million on Stolt Sea Farm. In total, we were about $48.6 million in capital expenditures. We also had a positive cash flow impact from the sale of the Stolt Kilauea and the Altona terminal of $11.4 million, as you see there. Net cash used in investing activities was then net $35.2 million negative.
During the third quarter, you see we repaid some $104 million of long and short-term debt, we also repaid the full outstanding balance on our revolving credit line that was some $340 million. This was done with the $409 million that we raised in new debt as well as from free cash flow. Looking at the net, the cash flow for the quarter was a positive $9.4 million after all this, that resulted in a cash balance at the end of the quarter of $143 million. Very high compared to our historic averages, 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 is presented excluding any impact of the IFRS fair value of the biological assets, insurance reimbursements, and other one-time non-cash items. You see here the Tankers’ EBITDA was up slightly, but really not much different from the last four quarters. That is really due to the lower sublet and M&R expenses, which really offset the lower regional revenue that Nils mentioned earlier. Terminals EBITDA was up and that is consistent with the trend that we have seen for a while now. STC's EBITDA decreased due to the continued pressure on margins and lower shipment volume. As a result, the SNL’s EBITDA for the quarter was $106 million, as you will see in the bottom right quadrant. Not much change really from the previous three quarters.
Coming back to the covenants, the two EBITDA covenants, and you will see the impact here more clearly in this last calculation, we have had the, which quarter was that? The third quarter of 2018 dropping off. The prior quarter, we had the second quarter of 2018 dropping off. Those were two high EBITDA quarters. That has caused a deterioration of those two covenants. Going forward, you will see next quarter, the quarter that will drop off will be the $103 million. We actually expect to see an improvement going forward on those covenants. Going on to the capital expenditures program. Note that this excludes the dry docking of ships. Capital expenditures for the quarter were $40 million. Year to date, we have spent $100 million. This was, as I mentioned, split between terminals with $19 million and tankers, $12 million for regulatory CapEx.
In addition, we have spent year to date through the third quarter, we spent $21 million on dry dockings. As of August 31st, you also see that the remaining capital expenditures were $117 million. That's a lot to spend in one quarter only. Our expectation is really that a good portion of that $117 million will be pushed out to the first quarter of 2020. Looking at what we expect to come over the next subsequent four years, we have about $258 million that's on schedule to be spent between 2020 and 2023. Just a few key items there is about $23 million is expected for ballast water treatment systems. We have some $20 million that are for ongoing terminal investments. For tank containers, we have some $10 million that's related to a Houston facility and wastewater treatment there.
We have the new farms in Spain and Portugal for Stolt Sea Farm. There's also one item there, the $36 million 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 million, and $36 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 million U.S. private placement, drew down on that on September 17th. We also concluded a $416 million sale leaseback with China Merchant Bank Financial Leasing. We drew down $232 million on that prior to the quarter end. That will continue to receive funds from that.
I think $141 was received now mid-September, then we have a further $43 that will be drawn down in mid-October. With these two new financings, that gave us the liquidity to repay the $148 million bond that matured on September 4th. We still have available liquidity to pay off the $160 million bond in April 2020, and the $52 million terminal facility in Australia, without having to go back to the bond market. Even after this, the aim is that we shall still sit with $200 million in available liquidity. All in all, a very strong debt profile and liquidity position for the company going forward. Addressing the 2021 and 2022 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 one and a half to one, and you can see that we have adhered to that more or less, as we've stuck to about one and a half 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. 2018, we had some $300 million in free cash flow before interest, but after capital expenditures.
That's come down a little bit this year because of partly the weaker market, but also because of some more capital expenditures. We expect to end that up around maybe $200 million at the end of the year. That really depends on how much of the CapEx we're able to do. It also gives us liquidity to repay, after interest, to repay on debt. 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&G. For the quarter, we're at $51.9 million. That's down from $52.8 as you saw in the second quarter. Our guidance for the third quarter was $55. We ended up well below that, much due to also the continued weak dollar.
Our guidance for the fourth quarter of this year is a slight increase to $52.7 million as you see. Moving to depreciation and amortization. For the third quarter, this was $64.3 million, slightly up from the $63.8 million that we had in the prior quarter. That was against the guidance of $65.1 million. The high depreciation from the prior quarter was really driven by an increase in the terminal's depreciation, that was because additional capacity was brought online. This was the conclusion of the expansion that we did in Santos, Brazil. Hence we had to start depreciating that. Our guidance for this quarter, the fourth quarter, is $64.7 million. That's because we expect slightly higher depreciation in tankers due to the hefty dry docking program that we've had, that will be then written off until the next dry dock.
Moving over to share or profit of JVs and tax. The profit from our share profit from JVs was $6.6 million this quarter, and that was up from $5.3 million 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 reflects the high utilization that we saw at our joint venture terminal in Antwerp, Belgium. Our guidance for the next quarter is $7 million, as you see, and that's reflecting a bit of optimism in the tanker markets and continued improvements in terminals and steady going in SGN and SGC. Tax expense for the quarter was $3.2 million.
That's down from $4.3, that really reflects the lower income that we saw, the decrease was driven by the lower income in Stolt Sea Farm. Just briefly, this is a repeat of what we said last quarter, first of all, IFRS 16 does not apply to us yet. It will not apply to us until the quarter starting December 1st of this year. There's no cash impact from the changeover to IFRS 16. It will impact our balance sheet by some $189 million on the asset and debt side. EBITA is estimated, this will change by the time we actually get there, it's estimated to have a positive impact on EBITA of some $47 million. The covenants will be impacted slightly, as you see at the bottom right of this slide.
More importantly, in all our bank facilities, we have agreement that we can continue with the old covenant measurement until we reach a mutual agreement on the revision of those financial covenants. With that, I would like to hand it back to Jens.
The key takeaways, as Jens showed you, $3.4 million net profit for the quarter on an EBITDA of $106. We start 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. 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 million-plus of free cash flow. Stolt 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. Yes, it's a challenging market condition now, but I think the fundamentals in that business in the long run are healthy.
Stolt Sea Farm continues to show underlying improvements or promise in both the turbot and the sole business. 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 for the next two years. Thank you, guys. That completes our presentation. We will then open up for questions. We'll start here in Oslo for anyone that has any questions. Yeah. Out front.
Yeah. Hi. I was wondering about Stolt Groenland. She is one of your advanced ships, and there isn't that many of them around. Is that going to create any issues for you operationally, that she's going to be out of service for a while?
No, it's going to create less supply and hopefully higher demand. Let's see what happens. No, we will be able to service our contracts with our fleet, without the Stolt Groenland, without any problems. You remember we used to have 80% COA rates of coverage, now we are at 70. We have lost some, we are also hopefully opening up more spot space for the recovering market. We do have enough tonnage to be able to service the contracts that we are committed for. She is one of the ones that we call the N-43s. They're built in Norway, 43,000 deadweight, partly stainless steel, but also some coated tanks, because at that time, the stainless steel prices were high. She's not the most sophisticated, but up there.
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.
Secondly, in terms of scrubbers, you mentioned that you had a mixed program. How many ships are you going to install on them? How many are left in terms of installation?
We have usually not stated, but we will say. It's a total of 14, is it? Sorry, 20, but 14 new ones and then six on new buildings. I'll have to come back to you how many have been already installed, how many will be installed by the end of 2019. I'll come back to you with the exact timing of the installation of the scrubbers. Out of a large fleet, 14, that's it. Yeah.
Petter Haugen, 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. We don't have that exact answer now.
You, in the presentation, Nils, you said that 0.5% wasn't available as of yet. At what point do you think you will actually start to do sea trials with?
We have started sea trials with.
Okay.
Yeah. Sea trials, yeah.
Thank you.
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