Afternoon, ladies and gentlemen. Thank you for standing by and welcome to today's Stolt-Nielsen Limited presentation and conference call, first quarter 2019 results. At this time, all participants are in a listen-only mode. There will be a presentation followed by question and answer session, at which time, if you wish to ask a question, you will need to press star and one on your telephone and wait for a name to be announced. I must advise you that this conference is being recorded today, Thursday, 4th of April, 2019. Without any further delay, I would now like to turn the conference over to presenter today, Niels Stolt-Nielsen. Please go ahead, sir.
Thank you. Good morning, good afternoon. Thank you for joining us here in Oslo for our first quarter 2019 earnings presentation. Together with me, Jens Grüner-Hegge, CFO, and Julian Villar, Head of Corporate Finance. The agenda, I will be referring to a slide presentation, which doesn't have any pages on it. The agenda is as always, I'll go through the first quarter highlights. I'll go through each of the businesses. Jens will take you through the financials, we will open up for question and answers. Moving on to highlights. Stolt Tankers operating profit $14.3, that is up $7.7, that is mainly due to a positive swing on the bunker hedges of $7.5 million. We'll talk in detail about each of the businesses later. Stolthaven Terminals, the operating profit $18 versus $11.7 in the previous quarter.
The previous quarter had an impairment of $6.1, mostly for the Lingang terminal. Stolt Tank Containers operating profit $15.7, down from $18.1, mainly driven by the seasonality in the first quarter, the slowdown in the first quarter, driven by the Chinese New Year. We're also seeing some softness in the market due to the uncertainty of the global economy. Stolt Sea Farm operating profit before the fair value adjustment of inventory was $1 million versus $0.9 million, reflecting strong turbot sales during the Christmas season. That was offset by a write-down that we did in Sterling Caviar of $1.7 million due to some disease that we had in one of the farms.
Stolt-Nielsen Gas, again, that is our holdings in each of the three in Avance, Golar, but the main part is the Avenir, that is $500,000 cost, our share of the cost reflecting the development expenses of Avenir. Corporate and other operating loss was $3.6 million compared to a loss of $7 million in the prior quarter, which included a $5.9 million write-off of Stolt Bitumen in the fourth quarter of last year. That brings the operating profit to $42.8 million and a net profit of $7.9 million, giving an earnings per share of $0.13 per share for the quarter. I'd just like to highlight that we do have approximately 10 million of treasury shares or shares that we have bought back.
Seven of them are being used as collateral on one of our facilities, and therefore we don't get the Had we deducted the 10 million from the 60 million shares outstanding, we would have an earnings per share of $0.15. Moving on to the variant analysis of net profit between the fourth quarter of 2018 and the first quarter of 2019. Let me just go here and I can see it. The net profit in the fourth quarter was $3.6 million. As I said that we had the impairment in Stolthaven and Stolt Bitumen in the fourth quarter, which we don't have in this quarter, bringing it up by $12 million. The one-off gain that we had when we did the Avenir deal, which we don't have in this quarter, of $11.2 million.
Higher operating profit in Tankers by $6.6 million, slightly better in Stolthaven Terminals of $0.3 million. Seasonality, lower operating profit in Tanker tenants of $2.4 million, and Sea Farm of $4.4 million, lower operating profit after the fair value adjustment. The lower operating loss in Stolt-Nielsen Gas, including the cost of establishing Avenir LNG. Corporate, higher operating loss excluding Stolt Bitumen impairment impact in the fourth quarter of $2.5 million and others of + $1.5 million, bringing the net profit for the quarter of $7.9 million. Moving on to Stolt Tankers highlights. The revenue decreased by 5.1% compared to the previous quarter. This was partly due to fewer days in the quarter and also dry docking. 2.6% fewer deep-sea operating days as a result of that. Decline in the bunker surcharge revenue due to the lower bunker prices. Deep-sea rates were actually flat, and so were the volumes.
As I highlighted earlier, we had a gain of $3.4 million on our bunker hedges compared to a loss of $4.1 million in the fourth quarter of last year. The bunker cost decreased by 8% compared to the previous quarter. The COA rates renewals that we renewed in the quarter were unchanged, that is significant. As you probably remember, each time we have a presentation since 2016, we have announced that on average, the rates have been coming down. This is the first quarter where they were flat. You can hopefully take that as a sign that maybe we have finally reached the bottom. Moving on to next page. Revenue of $287.6 million the first quarter, the gross profit of $34.9 million. Operating profit of $14.3 million, here you see the operating days compared to the previous quarter.
Moving on to the operating profit variance between the fourth quarter and the first quarter. Operating profit of $7.7 million. Lower trading results. The lower trading results of $1.4 million, as we show here, is really not deep sea. Deep sea was pretty flat. That is primarily driven by SNIES, Stolt-Nielsen Inter-European Service, the regional fleet in Europe, which we saw a significant drop. It has started to pick up again, but that had the biggest impact. The bunker cost decrease more than offset by the reduced bunker surcharge of $1 million. We had higher bunker hedge results of $7.5 million. This is again a variance. We had slightly higher owning expenses compared to the previous quarter, we had lower depreciation from residual value adjustment because of the life extension that we did on some of the ships.
Lower A&G of $1.4 million and higher equity income from joint venture of $300,000 and - $0.4 million for others, bringing the total operating profit for the quarter of $14.3 million. The bunker costs and hedges. The average price of the fuel that we consumed decreased to $422 per ton in the first quarter, and that is down from $465 per ton in the fourth quarter. The bunker clause that we have in our contracts covers about 56% of the total volume in the first quarter. If you see, that used to be a bit higher, but because of the challenging market conditions that we have had, some of the customers in the COAs have not been willing to let us have a bunker clause. This is what happens when you have an extended period of a challenging market.
If you take down the paper hedges that we have included, we are approximately 70% hedged on our total fuel exposure for 2019. The first quarter 2019 gain on the bunker hedges resulted from an increase in bunker prices at the end of the first quarter compared to the fourth quarter as global crude prices recovered from a sharp but short decline. As you remember, at the end of our fourth quarter, there was a drop in the oil prices. At that time, actually, we were able to increase our paper hedges, so we timed that well. Moving on to the next page 10. Stolt Tankers Joint Services Sailed- in Time- Charter Index and sensitivity. You can again see here the challenging market that we have had since 2016. It may be difficult to see here, but it did level off.
The fourth quarter 2018 and the first quarter 2019 is flat, which again, hopefully is a sign that things have bottomed out. Moving on to page 11, the chemical tanker fleet and order book as it stands now. The fleet that we compare ourselves with is IMO 2 ships between the size of 15,000 ton deadweight to 50,000 ton deadweight. The average segregation size is less than 3,000 metric tons. It excludes non-core coated ships. That is the fleet that we compare ourselves and say that that is our competitive fleet. The order book in that fleet is currently at 8.4% of the existing fleet. All the remaining orders that is coming into the market are stainless steel. You can see here there are significant-- it was supposed to be dropping down further in 2019. But that has changed, not because there has been ordered more ships, but it is because the ships in 2018 have been delayed. So we do have quite a bit of ships coming in in 2019. But then you see it drops off significantly. Again, the total order will get 8.4%.
Moving on to page 12, Stolt Tankers market development. Our previous expectation for demand growth was at 4.5%. We have done it to 3.5% based on the slowing GDP growth that we read and see. This estimate is in the mid-range for forecasters of Richardson, Lloyd, Drewry, Clarksons and Greg. The potential tariff risk appears to have eased somewhat. The new building oversupply absorption will determine the pace of the market strengthening.
As I've been saying, as long as there's no new ships being ordered, and as long as the market continues to grow or the global GDP is positive, there will eventually become a balance in this market. It's taken an awful long time, but I think that we are now starting to see that balance. Of course, what happens with the global economy is difficult to say. But if we assume that in 3.5% growth in demand and no more new buildings coming in, I think we should see a market recovery. Increase in refining capacity in the U.S. Gulf should positively impact U.S. exports over time. This is the story that the market has been telling for a long time.
Actually during the first quarter, we had an extensive fire at the ITC terminal in Houston, which is right next to, or very close to our terminal. Which has caused closing of the Houston ship channel. They also spilled chemicals into the Houston ship channel. So when ships sail through, and they have partly opened again, but when ships sail through it, they need to be cleaned. So there is delays. There are customers that are not able to supply the cargo, the customers that are unable to discharge. There will be delays and there will be impacts from this in the second quarter. There will also be opportunities for the terminal division and the tank container division because these cargoes needs to move. But I think we will see an impact in the second quarter on Stolt Tankers as a result of this.
It's too early to give a number, but I would say fair to say that it will be at least $1 million. Moving on to page 13, Stolthaven Terminals highlights. Revenue and expenses were flat compared to the previous quarter, reflecting stable market conditions. Equity income from our joint ventures of $5.7 million was flat compared to the previous quarter, excluding one-offs. Utilization for our wholly owned terminals increased slightly to 92.3% compared to 91.4% previous quarter. The total product handle increased by 8.9%. We have major capital projects that have been completed, and that's the jetty in Houston is now fully completed and operational. Also the expansion that we have done in Ulsan has now started its operation. Therefore, I would think that you will see a continued improvement in results from Stolthaven Terminals going forward.
Quickly, the revenue $63 million, same as previous quarter. Gross profit, slightly down. Operating profit, slightly up to $18 million. Utilization, as you can see, has increased from fourth to the first quarter. Quickly through the operating profit variance analysis for Stolthaven Terminals between fourth quarter and first quarter. The fourth quarter 2018 was $11.7 million. One-off impairments of Stolthaven assets, that's the Lingang terminal that we did in the previous quarter, which we don't have in this quarter of $6.1 million. Higher operating of $300,000. Lower operating expense of $600,000. Higher depreciation because of the assets that we have built or the jetties that we have built and the new tanks we built of $1.6 million. Higher equity income from our joint venture, excluding impairment in the fourth quarter of $1.8 million+ and others of - $0.7 million.
Brings it from $11.7 million operating profit to $18 million operating profit for the quarter. Page 16, market development in the terminal division. Strong fundamentals in the U.S. Gulf, allowing for rate escalation at both Houston Terminal and the New Orleans Terminal. Both currently have a high utilization. Impact of the fire at ITC terminal in Houston is not yet known, although increases in inquiries has been seen in the market. The Singapore market remains challenging, currently working on multiple opportunities. The Chinese market has shown some improvement, although still negatively impacted by the uncertainty around the ongoing U.S.-China trade disputes and the general economic slowdown. Brazil remains stable and with strong demand for chemicals and CPP storage. Europe remains stable for chemicals. There has been some increase in inquiries for CPP, especially bunker fuel storage, which is related to the IMO 2020 coming up.
New Zealand and Australia are stable for chemicals, working on opportunities to increase the utilization and potential expansion of CPP. Capacity expansions continue. Projects continue in New Orleans, in New Zealand, and in Santos, Brazil. Moving over to Stolt Tank Containers, page 17, highlights. Revenue decreased 7.1% in the first quarter versus the fourth quarter, consistent with the seasonal patterns. Shipments were down 4.7%, and also lower demurrage billing during the quarter. Decrease in operating expenses of 7% reflects lower shipment volumes and reduction in inland and ocean freight costs per shipment. The utilization decreased by 1.9% to 66.3% compared to the previous quarter, tied again to the seasonal slowdown. However, we have seen a nice recovery subsequently. We are seeing volumes picking up again. Quickly through the highlights revenue. Slightly down again because of the seasonality. Gross profit, yeah, you can see it's steady, it's seasonal.
I must say that I'll talk about the market going forward. On page 19, $18.1 million operating profit in the fourth quarter, lower revenue of $9.5 million in this quarter, lower freight costs of positive $2.7 million, lower other operating expenses of $3.8 million, and lower A&G of $0.4 million, bringing it to $15.7 million operating profit for the quarter. The market development for Stolt Tank Containers. We are starting to see signs that the market is improving following the prolonged downturn since the second quarter of 2018. Margin pressure due to oversupply of tanks and smaller operators entering the global market is contained. As we have said that there has been an increased number of operators in this segment, and we are seeing a squeeze on margins. STC tank supply is supplemented with short-term leases. There are great leasing opportunities that we have captured.
Ocean freight rates are expected to firm due to the ocean carrier consolidation of the operators, and also the IMO 2020. I remind you that ocean freight is then passed on to our customers. Tight ocean freight capacity in certain markets. The market outlook remains promising, with pick up in activity seen in multiple markets. You can't deny that if you look at the top right graph, those numbers are the rolling four quarters shipments. We have seen a significant drop, more than seasonality. I think that is not because of more competition, because we can compete, it's seasonality and also uncertainty in the market, the global economy. Stolt Sea Farm, very quickly, highlights page 21. Turbot revenue increased by 2.9%, driven by a 4.4% increase in volume, partially offset by lower average price.
The sole revenue decreased due to lower volume sold as a result of less available inventory, and prices fell by 4.8% due to increased seasonal wild catch. The fair value adjustment and the negative impact of $2.1 compared to a positive impact of $2.4 in the previous quarter. We are completing or building two new sole farms, one in Portugal and one in Spain, using the recirculation technology that we have developed. It's land-based. The first one is expected to commence production. When I say production, that means you start putting fish into the farm, and it takes a year for the fish to be ready to be harvested. We are already starting to put fish in the farm already in 2019 in Spain, the following year in Portugal.
During the quarter, Sterling Caviar incurred a biomass write-down of $1.7 million because of the cease that we had at one of our sites. Revenue from $24.9- $25.4, the operating profit down to $2.5, the gross profits are at $2.5, the operating profit slightly up at $1 million. I'm just going to jump over that one. Avance Gas or Stolt-Nielsen Gas. You might know, we have established Avenir as a standalone company. Stolt-Nielsen owns 45%, Golar owns 22.5%, Höegh owns 22.5%, and the market, which lists on the OTC, owns the remaining 10%. In November, the company raised $110 million. $100 million from the founding partners and $10 million from the market. The founding partners have committed a further $72 million, so a total of $182 million from the equity coming into that company.
With that money, we're building a terminal in Sardinia we have two 7,500 tonners and two 20,000 tonners, also an additional two 7,500. So four 7,500 and two 20,000 cubic meter small scale LNG. The market is very exciting. Lots of opportunities. Again, our stated strategy is not really to be a shipping company, it's to be a small scale LNG supplier. Supplying remote communities, stranded customers with LNG. Using Höegh and Golar, the thinking is to be able to use their fleet of FSRUs or the unused capacity on their FSRUs around the world, also using our terminal capacity around the world to see if we can supply LNG competitively to the end user. That completes my part of the presentation for the time being, I'll give the word to Jens.
Can you hear me? Okay. Thank you, Niels, Good afternoon to everyone here, good morning to those calling in from the United States I'll provide some details about the financials as I normally do, as they were released today for the first quarter of 2019, Also some further guidance on some of the P&L items for the next quarter. I also want to remind you that today we have filed both the earnings release, the interim financials. We also posted this presentation on our website, we also filed them with Oslo Stock Exchange. In addition, for those of you that have been into our website, you will have seen that we have posted our annual report during March. With that, we also have included a few video interviews, so to say, with Niels and the divisional presidents, which I hope you'll find interesting.
Moving to the net profit. In the first quarter, if you look before one-offs, we had an operating profit of $44.6 million. That was up slightly from the fourth quarter, $41.7 million. As you were caught, it was rather uneventful when it came to one-offs this quarter with only one write-down of some of the biomass at Sterling Caviar, written down by $1.7 million. That compares to the previous quarter, where we took impairments at both Stolthaven Terminals and at Stolt Bitumen Services. After those one-offs, operating profit came in at $42.8 million, and that's a significant improvement above $28.9 million in the fourth quarter. Interest expense. Net interest expense came in as we guided pretty much at $34.2 million.
Not much to say about income tax, but I would like to point your attention to the fourth quarter, other, where we had $11.8 million, $11.2 million of that was a gain that we took related to setting up Avenir as a joint venture. That brings us down to a net profit of $6.6 million for the quarter, and that's up from $3.2 million in the prior quarter. Also, if you look at the EBITDA of $109 million, that was up slightly from $102.6 million in the prior quarter. Moving over to the balance sheet. You'll see here that debt is slightly up from the previous quarter. We're at $2.43 billion, and that's up from $2.39 billion in the prior quarter. Most of this is really if you look over the cash and equivalents, you see that is now up at $125 million.
We had the buildup of cash during the quarter, and this was very much because just around quarter end, we were busy with refinancing, and we did not manage to turn around and use that cash to pay down on the credit line. If you adjust that to normal, we would have been slightly below or in line with the prior quarter's debt. Just so you are aware of that. Current maturities of debt stands at $322 million. This includes the bond that matures in September of this year. It also includes a short-term credit facility of $60 million, which rolls over on an annual basis, and also some various smaller maturities that we have. Tangible net worth came in at $1.6 billion, and that's pretty much in line with where we were at the last quarter.
If you look at the debt to tangible net worth ratio, because the debt was slightly higher, we're at 1.5 versus 1.48 in the prior quarter. EBITDA to interest expense, because EBITDA was slightly up, improved somewhat from 3.34- 3.38, so mostly flat. Plenty of liquidity at the end of the quarter. We had available credit lines of $240 million+ $125 million in cash, as I mentioned, so a little over $350 million in available liquidity. Debt interest expense for the quarter was at an average rate of 5%. You see we have increased the fixed portion up to now 81% from where we were before. With that, we expect that the net interest expense for the next quarter, the second quarter of 2019, will come in at approximately $35 million.
One ratio I want to mention to you is the net debt to EBITDA, because that drives the pricing on some of our facilities. That remains under 5: 1 at 4.93, relatively stable. We also hope to keep it that way. Moving over to the cash flow. Cash flow from operations was a + $75 million, that was marginally down from $82 million in the prior quarter, that's mostly related to working capital movements. During the quarter, we spent on CapEx some $33 million, that's really split between terminals, about $15 million. We spent about $5.5 million on dry dockings and another $5.5 million on tanker CapEx. Now there's a $3.6 million on Stolt Sea Farm expenditures down in Spain and Portugal related to the new farms under construction.
Also, as mentioned, during the first quarter, we repaid a $150 million balance on a Jo Tankers acquisition facility. That was financed with a Japanese operating lease based on eight ships that we did. That was for $242 million. The balance of that facility is going towards reducing the outstanding on the revolving credit line. Also note that in the quarter, we paid dividends of some $13.5 million, we also bought back shares for just over $4 million. That puts the total cash flow for the quarter at a + $60 million and brought the cash balance up to $225 million, as mentioned. Moving over to the EBITDA. Just as a reminder, the EBITDA figures that we are presenting here, as you will see from the footnote, they exclude the impact of IFRS fair value adjustments to Stolt Sea Farm's inventory.
Also excludes gain or loss on sale of assets and other non-cash one-time events. Tankers EBITDA increased mainly due to the bunker hedge gain, as Niels explained. This was partly offset by the lower trading results at SNIES, the into European fleet. Terminals increased due to higher operating income from Houston and higher equity income from our joint venture terminals. STC's EBITDA decreased slightly, as discussed earlier, due to the seasonality. As a result, you see the SNL EBITDA increase from $103 million in the fourth quarter to $109 million in the first quarter of 2019. Moving over to CapEx. During the first quarter, we spent $27 million, this excludes the $5.5 million that we spent on the dry- docking of ships. If you add that in, we get up to $33 million rounded. Tankers CapEx came in at $5 million.
I won't go into further details on that. Just mention that we have remaining for 2019, $241 million, as we explained at the fourth quarter presentation, we're seeing an increase in the first quarter over the fourth quarter because of projects that were moved over. For the five-year period that we're showing here, we have a total of $433 million in CapEx, a bulk of this is really coming in 2019. Moving over to the debt maturity profile. If you look at the coloring, just to remind you of that, the black, it looks like a very dark blue. That's the normal amortization of debt. The lighter blue, those are the bond maturities that we have. The orange ones, those are balloon payments that we have on our various debt facilities.
With the $242 million Japanese operating lease that we just closed, puts us in funds to repay the $148 million bond maturity that matures in September. That leaves really for the rest of the year, just normal amortization as we progress. We're working on refinancing or providing the cash for a repayment of the bond that matures in March 2020 that you see there of $161 million. The balloon maturities that we have in 2020 of $115 million, the biggest part of that again is the AMZ terminal facility of some $70 million. Just to take a different view of the financial key metrics that we introduced last quarter. The top left quadrant shows the debts to tangible net worth. The covenant limit is 2: 1, which is marked by the dotted red line.
We're currently at around a self-imposed limit of 1.5: 1 that we don't want to go over. We aim to reduce this going forward. EBITDA to interest expense is hovering above 3: 1, the limit there is 2: 1. Bottom left, you have the net debt to EBITDA, which you see is just under the 5:1 mark, you can see we have gone above a little bit, aim is to again get that down. You have the free cash flow, and this is before interest. That's shown on the bottom right quadrant. Despite the expected increase in capital expenditures for 2019, we do expect to end up with a positive free cash flow. Not as much as we had in 2018, but still positive.
Moving over to some of the cost categories that we have. The A&G expense came in at $53.3 million for the quarter. That's down from $56.3 million in the prior quarter. Really most of that move is related to professional fees, legal expenses, some auditor fees, et cetera. That we had in the fourth quarter. Maybe got a little bit of help from the exchange rates as well, but that was really the big mover. Looking at the guidance going forward, our expectations is that for the second quarter of 2019, we'll end up at $54.5 million. Moving over to depreciation and amortization. We had a total depreciation in the first quarter of $62.6 million. Worth noting here is the tankers depreciation is down slightly because we have life extended some ships, some Danish-built 37,000 tonners.
We do once a year, we look at the residual value, and that has been adjusted up a little bit, and that has had an effect of reducing the depreciation for tankers. The Terminals' depreciation is because we have brought on more capacity. It's become operational, and that's when we stop capitalizing and start depreciating. The guidance for the next quarter is a slight increase up to about $63.7 million. More calendar days, et cetera, that accounts for more depreciation, otherwise, it's rather uneventful. Finally, the share of our profit of our joint ventures and the tax review. Our joint ventures contributed with $6.3 million in net profit for the quarter. That's our share. Our tankers is pretty much flat.
Stolthaven Terminals was up, partly because some expenses, some one-time expenses that we had in the fourth quarter, plus some improvements that we had in this quarter that just was. Looking at the guidance, we expect a slight increase to $7.8 million. Not much coming from tankers as we maintain a cautious outlook on the tanker market, but more because in terminals, because we now have the Ulsan terminal, that 160,000 cubic meter expansion is now operational, and that should start trickling through in improved equity income. On taxes, we came in at $3.5 million. That's up slightly from the prior quarter, and this was predominantly driven by the increase in profits in terminals rather than anything else. With that, I'd like to hand it back to you, Niels.
Key takeaways. A net profit of $6.6 million for the quarter, that's up from $3.2 million in the fourth quarter. The tanker market has stopped falling, and I would hope that that is a sign that we have reached the bottom, and I expect a gradual improvement. How fast is difficult to say, but I don't expect a further decline. Stable performance in Stolthaven Terminals. As new capacity comes on, I expect then also the earnings will improve. Tank Containers market has remained soft since last summer due to the economic uncertainty, but we are seeing a nice pickup in recent weeks. Avenir LNG, we are going to try to build a leading provider of small-scale LNG. Strong earnings base from the businesses supported by a positive free cash flow and continued debt reduction that we're been focusing on.
Stolt-Nielsen continues to have access to competitive funding and, as Jens showed you, healthy liquidity. That completes our presentation, and we now will then open up for questions. I think that if you have any questions, you need to get a microphone so that people on the phone can hear you. Start with Axel. Axel?
Thank you. Axel Styrman, Nordea. Just one quick question regarding your order book. As we know, the current ordering is quite slow in general in almost all market segments. There is ample shipping capacity, shipping link capacity available in Korea and China and elsewhere. Just wondering, the order book now is coming down to a lower level. What's your estimate if, looking at the core segment, and if someone came around and wanted to order new ships, how do you think that order book, how quickly could it increase again within 2020? We are soon in the middle of 2019.
Come on, let's be positive here. If you look at 2014, in the beginning of 2014, the order book was at 7%. At the end of the year, it was at 30%. That's how quickly it could change. That increase in 2014, that's what we are kind of finally now seeing. That's what we are absorbing. The reason it's difficult to say that, where is the balance? How much surplus is there? Yes, the order book will come down, but how much existing surplus is there? To answer your question, the order book can quickly come, but I would say that the next 2020 and 2021, I'm certain if there's not a demand collapse, which we have rarely seen. We saw a short reduction in demand after the financial crisis in 2008. In 2009, there was a slowdown in demand, but that actually picked up very quickly.
If you look at the demand for the services that we provide, it's very steady. If we assume that demand continues, and even if people start ordering now, I would expect that 2020 and 2021 should be healthy years.
Mr. Stolt-Nielsen.
Having said that, again, you guys follow the market as well as us. I think there is, for the time being, a bit of a reluctance to come into shipping, but especially into chemical tankers. They understand. Look at the historical return on this business. It's been 8%. It was 8% until 2000. From 2000 until today, it's been around 5.3%. The last 10 years, it's been 3.4%. It's expensive ships. They are highly operational. It's not just to buy an asset. As I said before, you need to have the right platform to be able to operate those assets. Maybe I'm naive, but I believe that the people that came in in 2014, I think that they're still trying to get out.
You actually answered my follow-up question, because that was related to why you think the order book is coming down, actually. Your conclusion is the low returns over the last 10 years, that is kind of the prime reason.
I think a lot of people have burnt themselves. We know that Odfjell, they have taken care of their fleet renewal program. We have through our new buildings and through the acquisition of Jo . The main operators have taken care of. I think I'm cautiously optimistic that we will see a nice run.
Thank you.
Håvard Hansen from TDN. You previously said that you worked on refinancing for older, or I say leaseback financing for older tankers. I wondered if you can give an update on that.
Jens, why don't you?
Yeah, that is in term sheet stage, so it's under progress. We expect to have that financing ready in good time before it actually will be needed. I think more important for us, we don't want to take on debt unless it is needed because you have to carry it on your books. You have to pay the fees, et cetera, that are needed. Main thing is we have taken care of the September maturity. We're making good progress on taking care of the March maturity for-
The bond maturity
Sorry, the bond maturities, yes. The rest is rolling as part of some normal cash flow planning.
Our goal is to be in a position where we don't have to be dependent upon the bond market this year or next year.
Lukas Daul from ABG. Last time we talked about you talking to clients about contract renewals for 2020 and beyond, having the bunker discussion around it. What is the latest on that front? Have you been able to sign any agreements where you have a full pass through of the bunker cost increase, or have you pushed that further to the right as you alluded to last time?
I just got off the phone, we just renewed a major contract with full pass through of the IMO 2020, which is a very important achievement. I've also stated that you can see the state of our industry and the challenges that we have. We have to pass it on. We have not accepted any contract where we don't recover the increase in fuel costs. There have been contracts, as you pointed out, that we've renewed the contract, we have agreed to address the bunker clause in October, that's when we start purchasing low sulfur fuel. We are seeing a nice development towards being able to include a bunker clause where we're able to pass it through. To give you specific numbers of percentages of what contracts, I don't have.
I can tell you that we haven't taken on any contracts where we will take the cost increase.
Okay.
Anders Karlsen, Danske Bank. You partly answered the question, you also said something that you have now less bunker coverage in your contractual rate. Is that a recent trend or is that old contracts?
These are old contracts. There has been contracts where the customers are not willing to give us a bunker clause. Then we of course adjust it in the freight rate. You have a negotiation and say, "Okay, you're not willing to give." We adjust it based on the freight rate, based on the current bunker cost. The fluctuation in the bunker cost is our risk, that's why you have seen that the bunker clause in the COA used to be around 65%. As I showed you here, it was 56%. You have to understand that the challenges of having an extended period of bad market doesn't only affect the freight rates, the dollar per tonne, it's also a deterioration of terms in the contracts.
They negotiate longer lay times, lower the merge, putting pressure on every part of the contract, which once the market turns around, it's not just to jack up the freight rates, it's also to recover some of these favorable terms that we have been forced to accept in the contracts.
Petter Haugen from Kepler Cheuvreux. You write in the report now that you have seen an increase in inquiries for CPP bunker storage related to the IMO 2020 regulation. Could you expand somewhat on that and to what extent is that expected to be meaningful in terms of your terminals?
We primarily focus on chemicals in our terminals. That comment refers to our joint venture, in Antwerp with Oiltanking for the capacity that we have available there. I don't know exactly which inquiries is being referred to, but I can find out and come back to you. Any other questions here in Oslo? Operator, can you ask if there's anybody on the phone that would like to ask any questions?
At the moment, we do not have any telephone question. Just a reminder, it is star and one on your telephone keypad if you wish to ask a question, please.
That completes the first quarter earnings release. Let's hope that when we come back here in the second quarter that we have seen a significant and nice recovery in tankers. We deserve it, and we need it. Thank you very much.
That does conclude the conference for today. Thank you all for participating. You may now disconnect.