Earnings Call: Q3 2020

Nov 12, 2020

Welcome to the DFDS q three report 2020. Throughout the call, all participants will be in listen only mode. And afterwards, there will be a brief question and answer session. Please note, the call is being recorded. Today, I am pleased to present to you CEO, Torben Carlson and CFO, Karina Binken. Please begin your meeting. Good morning, everybody. Joining us today is also Searn Von Halt, Head of Investor Relations. As you know, we raised our outlook already in October when it became clear that we are in a much more stable and stronger situations since demand started to recover in late Q2 than we expected. You can see that our freight business was even stronger than Q3 last year. And as things look now with the stockpiling happening in UK, we expect strong freight demand also for the remainder of the year. The passenger business is, on the other hand, doing worse than we expected after Q2. We have index 10 in on many of the routes with regard to passengers. The good news, if you can talk about good news, is that there's no further downside from the passenger business at this moment in time. We talked about in Q2 changes we have done to our business model, both in freight and in passengers. And we can see that some of those initiatives are what is paying off for us today. But let's take a closer look at the quarter. On Page three, we state that there is a continued focus on keeping operational locations safe, including vessels. This is more important than ever as the second COVID outbreaks take speed across Europe. We've seen outbreaks on both some of our vessels in some of our port locations. With our crisis management team, we seem to be in a very good position to handle those situations and have been able to continue operations everywhere as planned. When we look at the Q3 freight volumes, they were up 1% and a little bit more up in October, as you can see on the graph to the right. Those volume increases, of course, also indicate that the gains we've seen in the freight business when we compare to 2019 are not driven by much higher or stronger freight volumes than last year, but rather than a very strong cost picture and efficiency picture, partly driven by the adaptations that we continuously do to our operation, whether that is how we handle empty or reduced operational warehouses, port operations and vessels throughout this period. Of course, on the other hand, passenger volumes are heavily reduced due to the tighter travel restrictions. With this short introduction, over to Karina, who will give you more details on the numbers. Yes. Thank you, Thorben. If we look at Slide four, overall top line down 20% and EBITDA declined 29%. And no surprise, it's to a very large degree impacted by the passenger activity. They were exceptionally hard hit by the travel restrictions and lockdowns. And that alone meant a decline in EBITDA of $445,000,000 And that meant that the rest of our business improved EBITDA by almost 100,000,000 Freight Ferry improved by $87,000,000 and as Thorem said, very much driven by the cost improvements and adaptations of the organization. Also in the logistics division, they did very well, and they reported a EBITDA up 36% and also a the result of tight cost control and cost savings throughout the system there. For the non allocated items, it's a bit of a technicality. We report them EUR 30,000,000 worse than last quarter or last year's quarter. But as you might recall, we saw the different picture in Q2. And this is simply because of we are now sharing the savings with the divisions that we have seen in the first half of the year at HQ levels. So let's turn to Slide five. The 20% driven by a 61% drop in passenger revenue, that was $639,000,000 less revenue from passenger activities in Q3, so a significant number for us. If we look at freight and logistics and take out the passenger activities, we will see Freight revenue being down 4% from the Ferry business and while Logistics were up 1%. So with the EBITDA improvements we saw in both Ferry and Logistics, that actually meant significant margin improvements in both divisions. So if we take out the passenger business, we saw Ferry increasing from 27% to 32%, and we saw Logistics improving from 8.5% to 11.5%. Further down in the P and L, depreciation was 4% lower than last year. It was on level with Q2. But when we compare to the 2019, we had returned some chartered ships. And under the IFRS rules, we see that, that means a lower depreciation rate. Finance cost, a decrease of $8,000,000 but underlying that, we actually had a positive variance on currency adjustments, so the interest cost in itself increased. Special items reported at $62,000,000 all related to the restructuring we announced at the end of Q2. We have, as you saw in Q2, announced six fifty people leaving the FDS. Since then, it was increased to 800,000,000 So we now saw more redundancy costs, which now for Q2 and Q3 in combination amounts to $129,000,000 If we turn to Slide six on the capital overview, slight increase in total assets due to the new buildings being included now. The positive news from the balance sheet side is the working capital. We reduced that by almost EUR 400,000,000 compared to Q3 twenty nineteen. The positive news there also fed into our cash flow, which we saw was being positive when we adjust for the lease impact, we saw it being positive of $313,000,000 due to a positive working capital impact. If we turn to the ROIC, it was now a decrease to 3.5%, clearly very much impacted by the ROIC in the passenger business. The final thing to note on this slide is when we look at the net interest bearing debt to EBITDA ratio, it was 4.3. It was better than we expected, which clearly also means that we are well within the updated covenants that we talked about after Q2. Let's turn to look in further detail on our Ferry business. We saw volumes on level with last year and 1% up with adjusted on a like for like basis. If we take a North Sea first, EBITDA down EUR 18,000,000, but please remember that we are up against tough comps because we had the DTF income in Q3 last year. Volumes up 2% on a like for like basis, driven by high activity in The UK to the continent, and that offset a lower activity, particularly on our Swedish routes, where, as you know, the automotive industry was a little bit later in recovering. Positive story in Q2 continued in Q3 in The Baltics. Volumes up 7% if we adjust for the restructuring. As we also talked about after Q2, the volume increase was followed by certain price pressure. So we did see a a decline in the freight related EBITDA as well, but the majority of the decline came from the passenger business even though we only, in inverted commerce, saw a decline of passenger numbers of 22%. On the channel, also a positive story on the freight side. Volume slightly up. We saw us gaining market shares after competitors had reduced capacity. Following the increased volumes and also cost savings and fewer sailings, we saw a good development in EBITDA from the freight business. However, the impact from the tax meant that overall, we reported a $98,000,000 decline in the channel business EBITDA. The exceptional quarter for the BU passenger, of course, is also visible on the EBITDA. We reported a loss for Q3. It is the high season, so we were up against the tough comparisons. So a decline of $235,000,000 compared to the same quarter last year. Mediterranean, we saw some good news from that side in the quarter. We have seen a slower but gradual recovery during Q3 in terms of volumes. September were above last year, and that trend continued into October. That was partly driven by higher exports, but also the fact that we regained some market share from land transport as our air travel for drivers was eased. Despite the Q3 overall, volumes declined 4%. Revenues were up, driven by higher unit revenue, and that meant that we could report a higher EBITDA, 27,000,000 above last year. But I will say that the underlying improvement is actually higher because we also included a $20,000,000 cost related to a volume commitment to a port terminal. Turning to logistics. Strong quarter in terms of earnings on the back of volumes slightly down on 2019. In The Nordics, volumes were up 2% as the Finnish acquisition outweighed a little bit of a slowdown in Sweden due to the impact from automotive. But the tight cost control across business, that meant that we saw a EUR 12,000,000 improvement in EBITDA. On the continent, we saw a 5% decline in volumes also related to the automotive, but also due to a decline in the Special Cargo division servicing the construction sector. However, when we look at the Special Cargo division, we did see an improvement in their business, improved efficiency and cost savings, and that contributed to a total improvement in the continent on EBITDA level of $8,000,000 Finally, if we look at The UK, we did see a slight increase in volumes, mainly due to high domestic activity with growth in the InmanhattanBelfast transport services. Also here, we benefited from low cost due to a strict tight follow-up and also a more efficient agency structure that we implemented. That concludes the review of the numbers. So back to you, Thorben. Thank you very much, Karina. And before we talk about the outlook, just a brief session on Brexit, where we are now all looking forward to the January 1 and the end of the transition period. We have organization and systems in place for this transition. We will be offering customs clearance services to our customers. We have hundreds of people in place, including people in our back office center in Poland to make sure we have the right skills and competencies and resources for the challenge. We are almost complete in integrating our operating systems with the different government customs systems. And we can see as the challenge becomes more and more evident for our customers that we receive a lot of requests from ferry and logistics customers for DFTS to assist them with this transition. The more curious note, we, of course, are continuing the planning of duty free sales. It is fair to say that with the current passenger situation, this is, of course, not something that will take off with a very heavy impact in January. But hopefully, as things normalize on the passenger side, we'll see some benefit from this. All in all, all the things we are doing here will support the Department for Transport, making sure that flow of goods will continue from Europe into The UK come January 1. Turning to Page 12. We raised the outlook already late October from the previous 2,200,000,000.0 to €2,500,000,000 EBITDA to now 2,500,000,000.0 to €2,700,000,000 We see the decrease in freight volumes for the full year less than 5%, where we previously have mentioned less than 10%. And also, as mentioned in the introduction, we will not see further disappointments from the passenger in this outlook as we already have a very, very conservative outlook for passengers for the rest of the year. But of course, uncertainty remains high with the COVID second wave consequences and also if something happens now the next couple of months leading up to the Brexit transition. We have not made changes to our investment outlook, which continues to stand at 1,600,000,000 We can now see that expectations are that we will actually have a positive free cash flow for 2020 despite our heavy investments and the challenges for our passenger divisions through the year. Turning to Page 12. What are then our strategic priorities looking ahead? We need to manage the Brexit transition best possible and as a business opportunity as we indicated on the other Brexit slide. We must continue to see organic growth in our freight parts of the businesses. We see a very good response to our more commercially focused and stronger business and organization structure that we implemented in June. We need to increase, of course, the passenger ROIC, but that is COVID related, but we also need to see improvement to the Mediterranean return. And Q3 was a very strong testament to that we are on the right path to achieve this. Then the ongoing adjustments of our passenger offerings will continue so that we are ready to meet our customers when they can travel again with a different mindset and a slightly different offering, addressing more of the transport needs than we have done in the past. COVID-nineteen and all the consequences of this is bound to show opportunities for a company like DFDS that is financially strong. We are looking into a number of different things and hope to see that some of these can turn into new business opportunities over the next quarters or so. With this, we will turn over for questions. So please go ahead. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad, and you'll be entered into a queue. After you're announced, please ask your question. And now please hold until we have the first question. So our first question comes from the line of Pan Toto from Carnegie. Your line is open. Please go ahead. Yes. Hi. It's Pan Toto here from Carnegie. Maybe on on on Brexit, the costs or are there any particular costs that we should be aware of triggered by this build of this organization, I guess, also training of people, etcetera, that is negatively impacting here in '20 that we should not sort of say big in for '21. And then then these costs, and I guess, there would be a lot of admin relating to customs, etcetera. How should we look at that, going forward? Will you be able, so to say, to, see that that as an additional, so to say, income stream where you can basically charge a fee? Or is it just a pass through? Or could even be, you know, backed by and can be, you know, a a negative pass for for 21 on on on costs? So how should we look at this Brexit transition? We have built costs for the last four years in this area. Of course, we've been conservative in the beginning and we are more bold now in hiring and training of people. Many of the people we've taken on and have retrained have been able to perform normal jobs in parallel. So it's very difficult for us to say exactly how much the extra cost has been for 2020, but it will be a double digit million number. However, going forward, we will start to see revenue coming from this cost as well. And we expect normal commercial margins and growth from this. So in all the Brexit debacle, this will be a positive that we will and we can see now that there's very high demand from customers. We've actually had to turn customers away if they haven't been able to commit before a certain deadline to make sure that we can provide a good service. So so this will just be an add on offering that we will have going forward with, hopefully, normal margins. And and then your communication with with clients going into '21, are you getting any feedback or any insights into how they will behave in in '21? I mean, I guess, they can't they confront you if they, you know, have new business opportunity and they want to secure space for transport. Are you seeing a lot of these initiatives, or is it a bit, so to say, more slow than usual on that front? Just to get an indication of how clients behaving going into Brexit. There is obviously, there's a building up of inventories now in Q4. We expect volumes to drop in Q1. We can see there is more demand for warehousing space and space for trailers, etcetera, because people fear a little bit that the flow will not be as usual. But there's nothing dramatic that you should expect to see from us other than these new business opportunities in in customs clearance and maybe some some storage that we will offer. Customers are not able to see through more dramatic changes that could potentially come from this. Okay. And then just maybe some household, if I may. The cost savings that you have now amounted to as DKK 300,000,000, but DKK 100,000,000 is fixed here in 2020 and the latter is DKK 200,000,000 in 2021. Is that primarily in in passengers, or is there some of this having effect in in ferry as well? That's the one thing. And the other thing is on redundancy so far, a 129 here, 9 mil in in in the first nine months. How much should should we expect of redundancies for the full year? Yeah. Then let me let me answer that one. Of the 300, the majority is, of course, related to the passenger because it's very much the number of people that we have reduced. But we do also have some synergies from some of the commercial changes we made where we made some changes between ferry and logistics. So but overall, I would I would apply, let's say, maybe 70% of that to to the passenger business. Of the of the the redundancy cost, we have not completed our discussions with the French union. As you know, that's a pretty tough one. So we cannot be a 100% sure that this is all. However, when we look at the provisions we have made now, we think it will be marginal if and when we will see more in Q4. Understood. Thanks a lot. Our next question comes from the line of Markus Delander from Nordea. Three questions, if I may. The first one regarding the mix changes and increased competition that you mentioned in in the report. Could you could you elaborate a little bit on that? We have seen some increased competition in The Baltics. I think that's maybe where we mentioned that, which is similar to what we've talked about before that a competitor has has started some savings into to Clipida. I am not sure. You have to help us a little bit with the mix changes. Where where in which context is that mentioned? Well, for example, if I look at the North Sea, revenue per lane meter there is down, I think, 6% quarter on quarter, and it's the lowest that's been in a long time. One of one of the things that have have happened in the North Sea is that we moved the volumes from our own special cargo business from a competitor to DFDS. They were not ideally located geographically, we had reduce their rates to make it overall an interesting proposition for logistics. So that is some of the mix changes we are alluding to. That has driven down the rate per meter. Then, of course, oil price had gone down like for like in the quarter. So that has also driven down the rate per meter, but of course, with a corresponding saving in fuel. Okay. Understood. Thank you. And my second question concerns the ship operation and maintenance costs, which are pretty low, at least as a percentage sales for the second quarter in a row. And I'm just wondering if there's an element of maintenance being postponed. And if so, if you could quantify that effect. It's it's, it's, of course, a difficult adjustment. We have asked the organization to be cautious with, with cost in this period. We do not believe that this will lead to significantly increased maintenance costs in 2021. But could there be some some millions that have been postponed? Absolutely. But it's not a it's not a major shift. Part of it has also been that there's been less less activity with some of the vessels. Okay. Okay. That's good to hear. And the final question, I guess it's similar to what Dan just asked, but I'm just curious if you've noticed any any change in change in behavior among customers after the the the new or the stricter COVID nineteen measures were implemented here over the past few weeks and across Europe. There are some concerns that that these measures, it could it could start impacting demand again as it did in in in April. But we've not been able to measure it scientifically, at this stage. But, it's obvious when when restaurants and bars and and major part of the of the social activities and and sizes stop that there are certain activities that we also carry out that will be impacted. So we are expecting some impact from this second COVID phase on these particular areas like foodservice, etcetera. Okay. And will that be in Q4? Or is it mid It's in Q4, but it's it's quite frankly, it's drowning in the effect of of the Brexit buildup. So so it's not it's not something we can separate and and say this will have a a major demand demand impact at this stage. Understood. Thank you very much. That's all from me. Thank you. The next question comes from the line of Casper Blunt from ABG Sundar Collier. Your line is open. Please go ahead. Thanks. Just a couple of quick questions from my side. I just want to follow-up on the Brexit stock building thesis. I suppose it seems fair to assume that there will be some stock building here in Q4 and then a flipping point in Q1. Can you quantify how much you have included in your guidance of a positive effect from a Brexit stock building here in Q4, which we would then, I guess, have to deduct in Q1 twenty twenty one? I I don't know that we can quantify that. Can try to look to to previous we we have some empirical data here from from before when they had done this, but it's basically you can see the October volumes that we are showing here. We are 2% up compared to last year. And I think before, we've seen some 10% drops following a quarter of buildup. So I think it would not be unusual to see drops of 10% or thereabout in Q1 in volumes. Okay. Fair enough. And then secondly, a question regarding pricing. I mean, after sort of the the volume rebound seen in the, I would say, almost global freight here in in September, October, we hear some shippers complaining about the tight capacity and, you know, sometimes it's difficult to to get things transported. Have you seen any possibilities of raising prices on the back of things like that? Not really. We have focused on maintaining the good capacities that we offer to the market also during the hard periods where other competitors reduced capacity so that we have kept the market shares we gained over the summer. And then to our belief in this row row market, there's not really been opportunities to increase prices. And I think the difference we've seen to previous years is that, yes, is that customers have been much more focused on making sure that their supply chains run and operate. So maybe the price pressure we have seen previously has eased both in the ferry freight and in logistics area. And therefore, the cost saving initiatives that we have been able to complete are showing quite well in bottom line. Okay. Thanks a lot. Our next question comes from the line of Howard Bauch from SVB. Your line is open. Please go ahead. Yes. Hello. Also a few questions from my side. A question on the operational leverage for FARIAN Q3, which was at a similar level as in Q2 at around this 40%, and that is significantly lower than the usual operating leverage level. Can you talk a bit about how you have managed to keep this operational leverage at these levels? I know you've mentioned the staff reductions and less sailings on the channel, but on the other hand, less day date should have the opposite effect during Q3 compared to Q2. If But you can elaborate a bit on that and also provide an indication on what we could expect for Q4. I'm not sure where you get the 40% in Q3 from. It's true that we did see an extraordinary drop in Q2, but we see it normalizing in Q3, the leverage. Okay. Just when you, yeah, take the delta in EBITDA and the delta in revenue for Ferry, I get to this 40 ish percent. Okay. But never mind. Let's go to the yeah. Next question on the staff reduction of these 800 employees. How much of this reduction is driven by less passenger activity, and how much could you say is more structural? Can you elaborate on that? Yes. A very large degree is related to the passenger business. And and when we say passenger, just bear in mind also going back to to Dan's question. It's not only the BU passenger. It's also when we talk passenger on the channel, but but a a very significant part of these 800 positions are related to passenger, and that would be maybe 75% up to 80% of that related to passenger direct or indirectly. And part of that is, of course, the direct impact of lower activity. But also, as we talked about before, we have changed the concept, etcetera, so so we can operate the ships going forward with with less staff. Okay. So what could you expect when activity picks up again following COVID restrictions and everything? Could you expect that these numbers will that some of these people will be rehired? Well, in general, when we see increase in volumes, we we we might have to to employ some of our people back, and that goes across. But the the vast majority of these people, we we we can can do without on a long term as well. Okay. Thank you. And then a question on the the agreement that you have with The UK's department for transport. Can you, in any way, quantify the size of this deal maybe in comparison to previous agreement? We cannot quantify it at this stage. It depends very much. There are some termination clauses for DFT. It will, in all likelihood, be be less than the income from the EFT agreement in 02/2019. Okay. I guess it's fair to say it. Public public knowledge is that it's £78,000,000 distributed by four ferry companies. Yeah. The maximum. But but the if if things go well, we are not likely to get the maximum. So it it could be a significantly lower amount than than last time. Okay. Thank you. That's all clear. No further questions from my side. Thank you. The next question comes from the line of Rory Cullenning from RBC. Your line is open. Please go ahead. Good morning. My first question relates to operations in the Mediterranean where, clearly, the financial performance has improved. And you mentioned that you've completed the scrubber investments there. I was also interested to hear if you could now fly drivers directly to Italy and if you are happy with operations at Trieste. We can fly them to Slovenia, which is the closest you get to Trieste anyway. And we are quite happy with the both that, of course, we can fly drivers again and also with the operation in Trieste. Even now when volumes are back, significantly improved from the situation last year. Okay, great. So you mentioned geopolitical risks in Turkey, but, clearly, the the Lyrius license has recently come to an end, on a change central bank leadership. I was just interested how you and customers were thinking about the macro backdrop in, in Turkey. What we have seen is that, when the significant Turkish lira drop set in that the imbalance increased again a little bit with less import coming into Turkey, whereas we had actually seen quite strong import driven growth as well before that. We have not started the latest development, but I saw that his son-in-law, I think, resigned as a finance minister, and I saw relatively strong comeback of the lira, maybe on the back of the vaccines. But but we can see that that Turkey functions well, despite the COVID situation. Production continues. And the weakness we see is that import is not as strong as we would have liked, but it's being compensated by strong exports. Great. Thanks. And and finally, would you be able to give an indication of the contribution of your, logistics acquisition at the end of the year? Do we have the we have these we had Swissman and Fraco that we acquired in December and then a small Cully Brothers in in March. Their EBIT year to date, my guess is that they maybe, year to date, have contributed fifteen fifteen, maybe 20,000,000 EBIT. It's around 10% on a full year basis. EBT. 10% more? Of the logistics total EBT. Okay. Which is then? Yeah. About $4,450. Yeah. They they are they are contributing according to plan. Probably, my guess is it would be €20,000,000 or so after EBIT and maybe 25,000,030 million euros EBITDA year to date. Thank you. Rough estimates. Sorry for not having the the exact numbers. That's okay. Thanks. Thank you. Our next question comes from the line of Stefan Williams from KSWI Tech Bank. Your line is open. Please go ahead. Good morning. My first question also relates to the Mediterranean situation. You said that you gained some market share. So could you provide some details? I think the last time you said that you had lost about 7%. So how much did you did you regain here? And what are the perspectives? Also, I read that the the German Hamburg port, they took a stake in a new terminal in in Trieste. I know it's it's mostly container, but also a railroad terminal. So could this then prospectively change some things with respect to your operations in the Mediterranean? When we talk about market share in Mediterranean, it's versus the drivers overland. And due to the question we had before from drivers not being able to be flown to Trieste and France, we lost market share to the tune of six, seven percentage points. We are seeing some recovery there, not a complete recovery, but maybe a couple of percentage points gain back recently. With regard to the new terminal being built in Trieste, there is already space terminal space. So we don't expect this primarily container focused terminal to change anything. We are the only operator from Turkey to Italy with a row row service. Okay. And then again, with the look, second question to the Brexit, and to the situation there. You also said that you gained some market share there. So, I think that P and L, Paris, they put out some vessels, but now they restart again to use more vessels. So is it only so is it a permanent gain of the market share that you could make there? And the second thing is, I read some comments from the Port Of Roth Lair. They think to establish routes directly from Ireland to Continental Europe. I know there are still some routes, I think, from Brittany Perry's, but could this be really an option for for you or other competitors, a dialing from Ireland to to Continental Europe? Or is the The UK still the the most important transfer region for exports going to Ireland and vice versa? Stephen, that was a they were long questions, but let me try to see if I remember. The first one was market shares. We don't know if market shares will persist. We P and O have already put in operation their fourth vessel, which seems to be what they want to do. That will obviously impact slightly our market shares, but we still feel that there's a good situation on the channel from a freight perspective. With regard to new routes, there are routes today from Ireland to Cherbourg in France. Whether the situation with Brexit will lead to new activity between Ireland and continent remains to be seen. Okay. Thank you. You're welcome. Thank you. Our next question comes from the line of Lars Handels from SEB. Your line is open. Please go ahead. Thank you and good morning. Also a few questions from my side, please. The first two regarding sort of get a better sense for how you have adjusted your capacity and how you maybe will adjust capacity during this pandemic. You talked a little bit about the the channel. You've been, as far as I understand, been keeping six vessels there, P and L down to to to four vessels, so maybe even lower at some point. What's the reasoning behind keeping the six vessels? And could you or would you consider maybe to lower the amount of vessels? Should we have a sort of more escalation of a second wave? We have, during this period, reduced to five as well during periods. And now with the Brexit looming, there is a need for all six vessels. We then managed capacity by reducing sailings across these six vessels. In the beginning, we reduced more or less capacity wise the same as P and O. But because of the frequency, we have been able to gain some market share. So I guess it depends a little bit P and O have larger vessels. So I'm quite sure it makes sense for them to reduce the way they have done in terms of the savings in vessels, whereas with our slightly, on average, smaller vessels, it has made makes sense to do it the way we have done. And overall, it has, of course, been good market wise that that we both have taken out capacity either through reduced lessons or through reduced departures. Okay. And then on on still staying in in the passenger business on Copenhagen Oslo. You've taken out now one of the business there. What would it require for that to return? Any any views on that? Well, Norway would have to open their borders for for Danish citizens. Right now, only vital workers or what do we call them? You know, are able to enter Norway. So, and Norwegians going to Denmark will, will endure ten days quarantine. So so this would have to change for us to to deploy the second vessel again. And then the third the third one is on on the Baltics. You've made some changes out there. And to be honest, I'm not entirely sure exactly how this has been going on, at least on on the Patiski Hankel route as far as I understand. And I can see actually that invested capital is up there quite considerably. How much more capacity have you actually deployed if you have deployed more? But I assume that will be more there since the the cap says up much. The changes we have made is that we have basically stopped our own operation on the Panditsky Hanko route, which was never a commercial success. And we have then diverted some of the capacity to our Paldiski Capellcia route. If there is an increase in invested capital in Baltics, then it's when seen over the quarter, we have moved a vessel from another division. We obviously haven't acquired new vessels or entered new lease arrangements. But we'll investigate that further. And you can if you want, I'm sure, Sean can give you your precise answer after the call. Okay. No, no, that's fine. And then the last one is on on business opportunities. In your presentation, you said that you had a strong balance sheet despite how it's what I would call sort of a fair degree of leverage if you look at net debt to EBITDA. And then, that you are looking at new business opportunities. Can you give us a little bit more on that? There is nothing, you know, just around the corner. But we do, of course, see that different segments have developed very differently during this pandemic. So we are monitoring this closely to see where there could be opportunities that that we should pursue either in the ferry space or in the logistics space. But will the agreement that you have made now, think it was earlier this year, with the banks, will that allow you to go out and make acquisitions? Yes. It would. And in terms of size, can you give us any indications? No. But but we we do not feel that we are restrained from the opportunities that that that we think could be relevant. Okay. Alright. Thank you very much. You're welcome. Thank you. I remind you that if you'd like to ask a question to the speakers, please press 01 on your telephone keypad. Are no further questions at this time. I'll pass back to the speakers. Thank you. Thank you very much, and thank you, everybody, for joining the call and for the many good questions. We've tried to lay out, of course, the reasons for the strong performance in Q3 and also talked about the challenges on the passenger side. We hope you have a good feeling for where our priorities lie for 2021. And we look forward to meeting you in the next quarterly call. Have a good day.