Okay. Good afternoon and good morning, thank you for joining us for our fourth quarter 2020 earnings release. Today, it will be presented by myself, Niels Stolt-Nielsen, and Jens Grüner-Hegge, our CFO. The normal agenda, we will go through the fourth quarter results, take you to the highlights of Stolt-Nielsen Limited. I'll go through each of the businesses. Jens will take you through the financials, and then we'll open up for question and answers. I believe you can both call in or you can send the messages through... Yeah. If we go to slide 4, the fourth quarter highlights. It was a strong quarter giving us a record year for our company. A record year, at least as long as I've been CEO.
The net profit came in at $95.3 million. That is up from $74.7 million in the third quarter of 2022. The increase that we saw in the quarter was primarily driven by the improvements that we saw in the tanker trading division. EBITDA came in at $196 million, that is up from $184.4 million. Again, strong tanker results due to higher spot rates and also higher volumes. Terminals, marginally lower results due to softness in the European market, but that was offset by higher utilization, partly offset by higher utilization in our U.S. terminals. Tank containers had another strong quarter, and that's reflecting the success they've had in maintaining margin against a backdrop of declining ocean freight rates. I will be talking more about that, of course.
Stolthaven, the lower results excluding fair value due to the seasonality. You have to remember, the fourth quarter ends in November, and the Christmas sale starts in December. Free cash flow decreased slightly $123.6, and that's down from $140.4. We declared an interim dividend during our November board meeting of $1, which was paid out in 8th of December 2022. We continue to have a nice liquidity position of $473 million. That is down from $568 from the previous quarter. Jens will take you through that. The net debt to EBITDA ended the year at 2.85 as a multiple of the EBITDA.
Doing the net profit and our variance analysis from the third quarter to the fourth quarter. Here you clearly see that Tankers operating profit increased by $17. Stolthaven slightly higher of $0.1. SDC maintaining strong earnings of higher of $1.8. Sea Farm down by $2.4. Gas, $0.9. Lower corporate co-costs of $4.5. Others of $0.3 million, and lower income tax of $3.5, bringing us at $95.3 for the fourth quarter. If you look at the year at whole, what really happened, you know, it's we've been waiting for this, and this year was finally the year where things really fired on all cylinders.
You see, if you go back from 2006, we saw an enormous increase in our net profit for the year of $281, it's nicely illustrated. Also the EBITDA ended at $715 for the year, which is also significantly up. It's driven by, again, by firming of the tanker market. The fundamentals are strong. We've been seeing it for a long time. We know that the order book is low, and we were just waiting for that balance to happen. As you know, the balance was pushed in our favor very quickly when the product tanker market strengthened because of the war in Ukraine.
We are seeing, I'll talk about each businesses, it was really, so far, it's primarily the earnings increase that we've seen is driven by the higher volumes in the spot market. We also took the opportunity during the year to acquire also some nice secondhand tonnage, which brought our fleet to a record size of, I think it's now at 164 ships. In terminals, high utilization and throughput pushed operating profit up by 43% to $99 million in 2022, that is up from $62 million the previous year. Tank containers, the clear star, a record-breaking year with higher transport rates and the demurrage revenue increasing operating profit for, to $173 million for the year, that is up from $82 million in 2021.
Even in the fishes went our way too. The prices both for sole and turbot were fantastic and gave us a result accordingly. If we move to our biggest division, Stolt Tankers. We can just start with the variance, the operating profit variance analysis. This, we had a higher trading result compared to, I'm comparing the third quarter 2022 to the fourth quarter. We had a higher operating profit of $21.4 million compared to previous year. We had a higher net bunkering cost of $7.9 million. Higher operating expenses due to high maintenance and repair costs, consumables, and other owning expenses, you know, caused by inflation.
Higher depreciation of $0.5, higher equity income from our joint ventures, higher others bringing us the operating profit for the quarter to $78.2 million. The bunker cost, again, 99% of our COAs have bunker clauses. In, at the end of the year, the total volume covered by those bunker clauses is 63%. The bunker surcharge revenue was down by $20.3 as prices of the bunkers dropped, even though the price of the product we consumed remained was higher. The bunker consumed was down by only $12.3, resulting in a net increase in bunker cost of $8 million. Strong fundamentals.
We have, if you look at, on the charts, on the right-hand side, HBR, that what, that's what we call from Asia, back to Europe and the United States, and that's where we're seeing a really strengthening of the market. Of course, you see a dip in January. I think that is driven by, I would say, year-end inventory adjustment, holidays, Chinese New Year. We'll talk a little more specific about the market, how we see it now. Transatlantic is strong. Transpacific has had the right trend, but came off a bit, towards the end of the year and the beginning of this year. The Gulf westbound, that is AG to Europe, has also come off in the beginning of the year.
You know, at the still at a nice level. Now, the sailed-in for the quarter ended at 27,162. The spot volume in the fourth quarter versus COA was 37% spot, 63% contract. Approximately 55% of our COAs are renewed in the fourth quarter and in the first quarter of each year. We are now in a heavy contract season. As I wrote in the press release, we are pushing hard to get the contract rates up. We have let go or have not renewed quite a bit, part of the contract portfolio, because customers haven't been willing to accept the rates that we have asked.
We are being quite aggressive, and that's why our spot exposure has gone up. Most of the contracts that we have not renewed have not gone to other owners. A few have gone to other owners, but the other ones are mostly in the spot market. When they go to the spot market, we charge them the spot rate, which is currently higher than the COA rates. They're also starting to come back to see if we can come to an agreement. We haven't lost them, we just haven't renewed them. It has taken a longer time, they are exploring the spot market.
I don't think that they are structured, or in a way that they can handle their volumes through the spot market. We are standing firm. We are not backing off on the rates that we're asking, and I think that you will continue to see that we will be able to get and push through the contract rates. When we say that in the fourth quarter, we increased our COAs by 20% or 30%, you have to keep in mind that that is 30% increase on the contracts that we renewed. We are not telling you what the which contract we renewed and what level those contracts are.
It's quite difficult for you to kind of predict our sailed-in based on just saying 29%, because there's a lot of these contracts that haven't been renewed yet. I think what we discussed at long and how we're going to kind of give you better guidance, because just telling you what we were able to achieve on the contracts that we renewed doesn't give you the full picture. We have kind of said that based on what we are, we have renewed over the 1st, 2nd, 3rd, and 4th quarter of last year, and based on what we see is coming through the pipeline and what we see in the spot market, we're gonna give you a guidance of what we think the sailed-in on our fleet is going to be for the 1st quarter.
Based on what we are seeing now and based on the contracts that we have renewed, remember, when we renew a contract, when we go into contract negotiation, it's usually 1 to 2 months before the existing contract expires. Negotiate, and then we come to agreement, hopefully. It takes 2 years before those new rates apply. New voyages has to start with the new rates. That voyage takes 30 up to 60, even more days. To get the full impact, that whole voyage or the 2 months have to go before the existing contract expires, and then the new voyage has to be completed fully before you get the full impact of the increased. It's so difficult to explain in a simple way.
I think the best way we can do is to give you kind of based on what we're seeing today, based on the contracts that we have renewed, and what we believe the spot market is going to give us, we are indicating to you now that we believe 5%-7% increase in sailed-in for the first quarter of this year. Now, 5%-7%, it's actually, is it slowing down? Well, if we use what we are sailing in exactly now, it would be 7% up. There is a bit, you know, as you read, the product tanker market has come off a bit. The market out of the AG has come off a bit. I think it's temporary. I think it's, as I said, I think it's the year-end inventory adjustment.
I think it's, you know, the holidays and the Chinese New Year. I think once the inventory has kind of stabilized, and we're getting into the new year, I think that you'll start to see a continued improvement in sailed-in, and that we will be able to push through the increases in the contract. We are, we are being tough, and we're not backing off, and I don't see any reason to back off in what we're asking for. As we stand, we are around 37% spot. It might increase even further. In the long run, I think we will continue to have around 70% contract, but it needs to be at the right rates. Also, I think we have shown you this before.
For each $1,000 in sailed-in increase that we're able to get through, that gives us approximately $7 million increase in net income on the bottom line per quarter. We're giving you $5-$7 and what each $1,000 of increased sailed-in will give you on the bottom line. ESG. Actually, the emission intensity reduction, the target of reducing it by 50% by 2030, as we stand now, we, based on the reference date of 2028, we have reduced it by 30.4%. That is actually slightly less than previously reported, and that's because of the change of speed. We are still optimizing our fleet based on sailed-in. Actually, we have taken a slight step backwards.
We have a further 19.6% to go by 2030. Moving over to Stolthaven Terminals. Pretty steady. Comparing fourth quarter, the third quarter with the fourth quarter in operating profit, it was one-offs that we had in the third quarter. The normalized operating profit in the third quarter was actually $23.3. Slightly lower revenue because of throughput, as we mentioned. Lower throughput and slightly lower utilization, primarily driven by our in Asia and in Europe. Higher operating expense, primarily driven by inflation, lower depreciation, and equity, lower equity income, because of again, that's our joint venture in Europe, a slowdown in Europe in throughputs. Bringing the operating profit for the quarter to $20.8.
What we're seeing right now is that we're seeing high utilization in the U.S., but slightly lower throughput. Same thing in Europe. We're seeing utilization pretty stable, but lower throughput. Asia, slightly lower utilization and throughput. We're seeing a pickup as we speak right now, significant pickup in China. This is an illustration that we have shown you before. The blue, the black is the total current capacity at each of our terminals. The blue is the organic growth that we can do at existing terminals, land that we have at existing terminals. Give you an idea of what the expansion capacity is through organic growth. We have currently 240,000 cu m that we are planning for Houston, New Orleans, and Dagenham, Westport, and New Zealand.
The biggest part of that expansion is in Houston and New Orleans, where the market is quite strong and the margins are quite high. We have an additional 750,000 cu m that we can build at our existing terminal, as we call organic growth. We also have some greenfield project planned and also the potential at, for future expansion, at those terminals that we are building, one in Turkey, one in Taiwan, and we're looking at also in Brazil. Moving to Stolt Tank Containers. The operating profit for the third quarter was $43.1. Lower transportation revenue decreased by 14.8%. That was driven by the lower transportation rates and fewer shipments, but primarily driven by lower transportation rates from the container lines. We had higher demurrage and other revenue.
The demurrage increased by 18.6. We actually had a record amount of tanks on demurrage. It's good business, but unfortunately, demurrage is during COVID or during the logistical nightmare that we've been through or the drastic issue the world has been through, it was positive because customers ordered extra tanks, used them as storage, and also to have a buffer to be able to have product available. Now we see, you know, it's too early to say what the long-term trend, but now the demurrage is more driven by they're consuming less or taking a longer time to the logistical bottleneck has eased up. Now the demurrage is more driven by products being consumed, taking a longer time to consume.
In the fourth quarter, we had, you know, a great part of the income was from demurrage, but for the wrong reason. We're seeing that the demurrage is coming down going forward. When you have lower shipments and lower freight rates, we also lower move expenses. That was a positive of $25.6. Higher repositioning expenses, so we are starting to reposition empty tanks into areas where we are short tanks. We're seeing right now that there's a big shortage in China, so China is picking up quite significantly. We add higher other operating expenses, bringing the operating profit to $44.9 million for the fourth quarter. Market outlook, well, we say it in the headline, market margins expected to soften. Demand remains steady, but sign of margin pressure.
There's more shipment container line space available. The shipment time takes longer because they're not waiting in port to load or discharge. There are more tank containers available, causing more competition and putting pressure on margins. However, volumes out of Asia and the Middle East, India, very strong, and we're seeing a significant pickup in China. America is pretty flat. The big, the big change is in Europe. Europe is dramatically down, and that is of course driven by the energy prices, where the, when I'm talking about the various markets, I'm talking about the export market from these markets, from the various markets. Asia, Middle East, very strong. India, very strong. America, pretty flat. Europe is down dramatically. We are seeing downward pressure on margins in regions where space on container lines is opening up.
We're seeing a significant pickup, as I said, in the China exports. Carrier spot rates dropped globally as space on ships open up in most regions. New container line capacity is expected to be delivered in 2023. Just to talk about the expectation in the containers. We're still doing quite well. If you look at historically, forget about 2022, it was an exceptional year. At the historical levels, if you look at historical earnings, I think we're still going to be a very profitable division, but not at 19, no, 2022 levels. Quickly, Sea Farm. Comparing operating revenue, turbot sales were down by $2.2 million. Lower sole sales, that's sea-more seasonality. Lower operating expense of $0.7, lower depreciation, higher A&G.
Bringing the operating profit for the quarter of $1.4 million. If you look at the right-hand side, on 20, 2021 and 2022, we are seeing phenomenal growth both for turbot and sole. Our operation is doing fantastic. The growth on the sole business, land-based recirculation of the sole, it is growing faster than we had in our models. It is just an absolute fantastic development. The demand for sole is phenomenal. We're very excited, and the next step is of course to expand the existing recirculation where we are, but also build new, and that's what part of the growth plan is to go globally and develop these land-based recirculation farm.
Another nice little recognition here, I know you guys are shipping analysts, but we did win an award for Superior Taste Award from the International Taste Institute. That is quite important to think about land-based recirculation, land-based, that the taste that they gave us a three-star, the highest award you can from these specialists. That's a very, for our industry, that's a huge achievement and a big kind of stamp of approval for our technology. I'll give the word to Jens, who'll take you through financials, and I will come back and hopefully answer some questions.
Okay. Thank you very much, Niels. As Niels mentioned, our quarter ends November 30th, we do have that skewed financial year, as you know. Also for those who want to go in and download it, we have the presentation and of course, all the press releases that came out earlier today on our website, www.stolt-nielsen.com under the investor section. Feel free to go in there and take a look. We are also working on a year in review video, which we're actually proud of. We're very proud of what we do as a company and the function that we serve in the world. We're happy to share that with you in the form of a video.
Moving over to net profit, Niels has talked a lot about this already. I will do a quick reminder of some of the main items. You have the revenue slightly down from the previous quarter. Tankers freight revenue was up. That was driven by good volume and spot rates, as Nils mentioned. However, the bunker surcharge revenue was down $20 million because of the lower, rapidly falling bunker prices. That's of course also reflected in operating revenue. We also saw a reduction in Stolt Tank Containers revenue, not because of margin drop, but more because of the freight, ocean liner freight coming down. Those are really the big items there.
You see also that there's a similar or slightly larger reduction in the operating expense tied to very much the same events, bunker price and ocean liner freight. That resulted in our sort of gross margin, if you like, to be improved quarter on quarter. Other items to note, slight improvements in the joint venture, the share and profit of joint ventures. Administrative and general expenses were down from last quarter. It's because of slightly lower profit-sharing accrual. We had a gain on sale of two ships. One was for recycling, Stolt Groenland, so that ends the whole saga with Stolt Groenland. We sold a small ship for onwards trading. That was a $4 million gain. Net interest expense, you will see, is flat.
Even though we have a reduction in debt that I will come back to later, we have also seen an impact of rising interest rates. Very small because we're still close to 80% fixed on the interest rates. It ends up bringing us down to the net profit of $95.3 million versus $74.7 million last quarter. I noticed in the consensus that a number of analysts had a higher expectation.
I think a big part of that difference is due to what happened with the bunker surcharge revenue versus the bunker cost, which now with the fall in bunker prices, you would have expected to see that as a positive in the results, but it actually turned out to be a negative because of how we continue to consume historic price, historically priced bunker. On the bottom right, you have an EBITDA bridge that takes us from the full year 2021 EBITDA to the 2022 full year EBITDA. One thing I wanted to point out is you see Stolt Sea Farm is there with a negative $3. If you actually look under the hood of Stolt Sea Farm , you will see that there has been quite a good improvement in the operating results of Stolt Sea Farm .
Nils mentioned a great performance on volume and price. The difference there is the fair value of the inventory. And they had in last year, when prices were rising rapidly in 2021, they took a gain on the fair value of about $18 million, and that was absent in this year. Keep that in mind when you look at that, look at Stolt Sea Farm. Going over to our capital expenditures, which of course impact also our future debt levels. You will see in fourth quarter, we took delivery of 1 ship in September. That was one of those K Line ships that we bought. We also have then forecast that we will spend $42 million.
That's also related to 2 smaller ships that we have bought, as well as a barge that we're building for service to BASF, which is quite a fantastic groundbreaking project. For the terminals, not much in the fourth quarter, but a significant jump you, that you see for the 2023. A lot of this is the jetty that we then will finish off during the year at the Dagenham terminal. Otherwise, it's maintenance and repair. Once we finish off some of the project work for the other expansions that we talked about, you will see those also being reflected here, but those are not finally been approved by the board yet. Tank Containers, the 97 and 50 reflect growth in the fleet.
There are, because they are a prime performing business, they are out and aggressively growing their fleet as well. That's reflected in the $97 and $50 million predominantly. Stolt Sea Farm, that's expanding their capacity to continue to grow the business. Compared to 2022, when we spent about $184 million for the year, we're looking at an increase to about $267 million. It's ambitious. I would expect when we stand here in a year's time that some of that will have dropped off to 2024. But, yeah, we'll see how far we get on that. Moving over to cash flow.
Now, I want to spend a little bit more time on this because the nice consequence of improving results is that we're actually also improving our cash flow generation. If you look at the top line, the cash generated by operating activities looks to be pretty much in line with the prior quarter. However, that is driven by the negative impact of working capital. With an increase in our working capital, you've seen a drop a bit in the cash flow. Also on the next line, the interest paid was up, but that is because we have a number of loan facilities that have half-yearly interest payments. Every second and fourth quarter, you will see a higher interest expense.
That leaves us with $164 million this quarter versus $170 million-$180 million in the third quarter. Again, mostly working capital related. Capital expenditures was about $68 million. That number, in comparison with the previous slide I showed you, includes also the dry docking of ships. That's more notable when you look at the full year figure, because we spent close to $19 million on dry docking of ships during 2022. You have investments and advances to joint ventures that relate to the Taiwan project that Niels mentioned in the terminal section, where we are contributing our part of the equity capital.
We bought $6.6 million worth of shares that's relating to Kingfish that we bought during October, about 10% stake. You will see for the full year, we have spent $37 million challenging your memory a little bit, that goes back to earlier in the year when we bought up in Odfjell, and we also bought the shares in CoolCo. That means, we spent for the quarter about $78 million in investing activities versus $65 million in the previous quarter. For the year, we spent about $245 million versus $180 million in 2021.
During the quarter, we also took out debt, and we have every quarter a lot of debt activities, but you will see that the proceeds are not nearly as much as the retirement of debt of $287 million. The bulk of that was the bond that we retired in September, $175 million. If you look at the year overall, we added debt of $484, but we repaid debt of $684 $40, which was short-term debt with on some credit facilities. We paid during 2022, $51 per share in dividends, so that was $53.6 million.
As Niels mentioned, subsequent to the quarter end on December 8th, we paid a further $1 per share, which was an interim dividend, another $53.6 million. That excluding excluded from here means we had we spent about $173 million on financing activities, that brought our cash flow for the quarter to a - $82 million. We started out with a significant cash balance in order to be able to repay that bond in September, now we're down at $152 million. Subsequent to quarter end, we paid a dividend of $53 million, we're, you know, barring any inflows of cash, about $100 million. You see on the bottom right, you have our available liquidity.
The main tool we have is the revolving credit lines. One is consisting of a fairly large facility with a number of banks secured by ships. The other one is a $100 million facility secured by shares in one of our joint venture terminals. You have the light blue is the $152 million in cash. We have talked about reducing debt, and you get a bit of the view here on the top left side, where we, from the same quarter last year, have actually now managed to reduce our gross debt by $246 million. That's about 10% reduction in the debt.
It hasn't gone faster, one, because we have been active in building up the tanker fleet to the largest it's ever been, and we also have other projects ongoing. We're also hampered by the maturity of the debt in order to avoid break fees, et cetera. I'll come back to a little bit how we're looking now at cash going forward. If you look at our average cost of debt, it has come up a little bit to about 5.01%, but with the reduction in the debt, that remains steady. Looking at the bottom there, you have our debt maturity profile. You have the June maturity of $132 million. That's a bond, a NOK bond.
Our plan is to pay that off with cash on hand, and with the cash generation that we're going through now, we're building up that position. Likewise, as it stands now, depending on what we're going to do with capital expenditures and projects, our intention is to also pay off the February 2024 maturity of $141.5 million. Julián is also already working on the Singapore loan, which matures in March or May 2024. That's because that transitions from LIBOR to SOFR at the middle of this year. We might as well get that done. Now, if you take those away, you will see that on average, we have about sort of, let's say, $35 million in maturities, regular debt amortization each quarter.
If you add on to that, interest expense of $30 million, maybe we say $35 million, if interest rates continue to increase, and our interest rates will go up as we refinance new facilities and have to face today's reality. Thirty-five in amortization, $35 in interest puts us at $70 million. From the previous slide, you saw the cash flow. If you assume that we are going to be at a cash flow generation of $175 million, that will leave us with $105 million per quarter, really to take care of our capital expenditures and pay dividends.
Annualized $420 million, we had $260 million of capital expenditures. It's been very nice to now see that we have a very good development on our cash, a good balance between cash generation, capital expenditures, and debt service, which leaves a lot over also to service our shareholders. I believe that, you know, with what we see fundamentally in the market, we will actually see this story continue to improve going forward. Looking at financial KPIs, suffice to say, with a strong EBITDA, all the EBITDA-related ones are improving. Our balance sheet is strengthening with our Debt to Tangible Net Worth now at 1.16.
As a curiosity for those who have followed us for a while, if you go back to 2016 pre the Jo Tankers acquisition, that was the previous low at 1.20. This, finally we have now gotten to a better position than when we bought Jo Tankers. That's not a purchase we have ever regretted, by the way. With that, Niels, I would like to hand it back to you.
Thank you. Just again, give you an idea how we look at the next year for each of the businesses. We think that we will see a continued strengthening of the tanker market or the chemical tanker market. Steady improvement across the terminals in most regions. We expect margin pressure in tank containers, but I think that we will kind of be at normal levels pre 2022 in STC. I think that we will continue to see similar levels at Sea Farm as we did in 2022 for 2023 in Stolt Sea Farm.
Tankers being the biggest part of the group, I think that we will have also nice year for the group in 2023. Key messages. Performance across all of our businesses is robust. Strong fourth quarter capped a stellar 2022. Improved market and focus on delivering our strategy results in all businesses performing. Again, show you the EBITDA increase that we were able to achieve year-on-year. The net debt to EBITDA is at below 3 x. Stolt Tankers contract renewal season is ongoing. It's tough. We're remaining tough. I think the market really is in our favor. Market volatility is expected to continue. Our expectation of solid cash flow generation for debt service and dividend and growth.
Overall, I think that, yeah, we will have a good 2023. That completes the presentation. I don't know where we should start with questioning. We can start here if there's any questions in the room. I don't know if there's a microphone or anything, but just talk up so that they can probably hear you.
Sure. Erik Nørre, you've been pretty vocal over the last year with the, in terms of consolidation in the chemical tanker market, potential standalone entity. Has your views changed regarding that? Like, as you've been saying, the tanker market, the chemical tanker market is looking very strong. You're seeing some of the other segments maybe have gone up from the peak. What's, what's the remaining puzzle pieces that needs to be solved for work on that front?
The plan is to do an IPO of Stolt Tankers at the right time. As we explained during the third quarter earnings release, we need to have the right debt level remaining at Stolt-Nielsen, and we are approaching that now. Now it's more the timing opportunity. We are looking at 2023 IPO for Stolt Tankers. When it comes to the purpose of the IPO and making a standalone entity, Stolt-Nielsen will still be a big part of Stolt Tankers. But we would like to create this standalone entity to look for further consolidation. I think for this business, this industry to be sustainable through the cycle, there's room, we have to build scale.
The market is what the market is on the revenue side, but we need to build scale, and the only way to do that is to become bigger. Now, most shipping companies in this segment is now making money, so that's not really on the top of their agenda right now. We haven't given up. We still stand by that this is the, what is needed for the industry, but I don't think that's going to happen while it, the market is as strong as it is today. Any other questions in the room here? Okay. I have quite a few questions. Tanker values have gone up by 40%. Could this be reflected in asset values over time or eventually less depreciation? Tanker values have gone up by 40%.
Could this be reflected in asset value over time?
We operate the ships, really for life, from beginning to end. We don't write up our assets, on the books because market values increase. As such, that should not have any impact on the depreciation.
Your fleet size is up compared to earlier. What is the reason behind the increase in the number of vessels as you have also upped your fleet size in prior quarters? Can you comment a bit on this secondhand purchase or other reasons? Your fleet size is up compared to earlier. What is the reason behind the increase in the number of vessels, as you have also upped your fleet size in prior quarter?
This may be related to the yardstick in the earnings release.
Yeah, the yards-.
Yeah
... the yardstick in, is, the answer should be in the earnings release, right?
Yeah.
In the yardstick there.
In the back.
Anders, if you go in the back in, on the yardstick, you will see the answer to the question. At the last earnings presentation, you mentioned that 50% of net profit is a reasonable dividend level. Any updates or comments about increasing dividends? We did increase dividends. We called an interim dividend. Instead of being $0.50, we increased it to $1. We'll see what the board will decide in February when we have when we make a decision about what the final dividend for the year should be. We were around 50% dividend out of net profit, I think is a reasonable assumption. Again, that is determined by, recommended by the board and approved by the AGM. Can you comment on the impact of new carbon regulation on market balance?
Do you see increased scrapping or slow steaming as a result of this? What is the impact on your fleet, and do you expect any significant capital expenditure to stay compliant? The answer for us is derating some of our engines on the older ships and also slow steaming. Of course, slow steaming means less tonnage available for or less operating days or less tonnage available. That will strengthen the market. Capital expenditure to meet these targets? No. There will be some capital expenditure associated with the derating of the engine, but nothing significant. We continuously always look at way of becoming more fuel efficient. The real capital expenditure will be, of course, when we order new ships and try, and when we then determine what kind of power generation those ships will have.
You have had a few extremely well-timed fleet acquisition over the past five years. How satisfied are you with your fleet today? Yes, we have had some good acquisitions. We have been patient. We decided not to go and order new ships, and instead try to acquire existing tonnage in the market, which we have successfully done. Today's fleet, yes, it is an average age, I think 15 years. It is aging. We are aware of that, we felt that we needed to get our debt level down. The market needed really to improve before we were again going to start to order new ships. Of course, we are an industrial shipping company, and we will always have to order new buildings.
If we want to maintain our current position, of course, we will have to eventually order new ships. We continuously also look at acquiring existing tonnage, but also through consolidation or acquisition of one ship here and one ship there. I think that the price expectations are, it's not the right time to try to buy second-hand tonnage at this time. Is there any way you can give a little more guidance on Stolt Tank Containers EBIT development? Rates coming down, but utilization improving again due to stronger demand in some regions. Do we give any EBIT guidance, Jens?
No, we haven't done that for tank container.
No, we don't do it. The only thing I can say is that the guidance I can give you is that we expect that the year will be more similar to pre-2022 levels. That varies between $30 million net profit for the year, up to $65 million. Still a very, very profitable and a good business. We do not expect, and we are seeing the pressure in the market. We do not expect that we will have a 2022 year ahead of us. Are you closer or more motivated to look at tanker listing at this point or Sea Farm? We're not considering Sea Farm. As I said, we are looking at an IPO of Stoltankers. We need to get the right debt structure remaining at Stolt-Nielsen before we do it.
The cash generation from Stolt Tankers is now causing our debt level to come down. We are approaching that level where we feel comfortable, and now it's more a timing about how the market looks for an IPO of Stolt Tankers. Terminals, interesting slide. Can you please elaborate more on the organic CapEx expansion plans for Terminals, CapEx cubic meter, capacity in cubic meter for the next few years? If we go back to... No, sorry, wrong slide. I think he's referring to that slide. Planned is what is on the drawing board right now, but not necessarily approved yet, but most likely it's going to be approved in, within the next couple of quarters. The size of the CapEx, is that something that we-
It's, 240 in total, but we haven't-
Yeah, the, but the.
Yeah, I think we can.
A rough guidance is around $1 million per cubic meter. The total CapEx, capital expenditure will be around $240 million. Bond, how should we think about your presence in the Nordic bond market? Jens?
We've been benefiting very much from the bond market over the years, we were at one point over $900 million, which was way too high for us and our balance sheet, we felt. Having gotten it down has put it all in a much better balance. Ideally, we would like to see the debt down into the businesses rather than have that on an S&L corporate level. The bond market, if there is a need or an interesting opportunity that has a yield on that investment that would justify going to the bond market, I think that is something we would have to consider. At today's levels, to use bonds as a regular financing source, it's a bit too expensive, we feel.
We'd like to have a presence, but it needs to be at the right price.
Yeah. Mm.
The last question from Petter Haugan , what is your plan for new buildings in tankers? Yes, again, we eventually will have to order new ships. We don't have anything on order now, but at some times we need to put in new orders for the next generation of ships. When we have something ready, we will announce it. Of course, being an industrial shipping company, we need to build the core fleet, which is the large 30,000 deadweight plus stainless steel tank, chemical tankers. That was all the questions on the page here. Is there any call-ins? Operator? No.
There are currently no questions on the phone lines.
Thank you very much. No further questions here. Thank you very much for participating in the meeting, in the presentation. I hope that the guidance that we gave you on the sailed-in then is going to help your model. It's very difficult for us to kind of explain. There's so many different variables and moving parts within the COA negotiations. I can only emphasize that we were able to get 30% increase on the contracts that we did renew, and some of those contracts actually had caps on them. Some were 15%, 20%. The other ones, you know, we were talking 50% to over 100% increases, so we are pushing very hard. Most of the contracts coming up do not have caps.
I think that takes a while for some of our customers to accept. I do feel. I don't feel guilty. I'm not, of course, taking advantage of the market. For us to make a sustainable business out of it, we have had an historical return of around 5% the last 20 years in the tanker market. To be able to justify for us to spend, you know, three-quarters of a billion dollars in ordering new ships, we need to have the proper earnings, we need to get the rates, and we need to get the terms and conditions at the right level before we make that such commitment. That completes our presentation. Thank you very much for participating. Thank you.