...The meeting as an attendee, and will be muted throughout the meeting. A warm welcome to today's earnings call of the Havila Kystruten AS, following the publication of the Q1 figures of 2024. With me today is CEO, Bent Martini, and CFO, Aleksander Røynesdal, so the gentlemen will speak shortly and guide us through the presentation and the results. Following the presentation, we will move over to a Q&A session, in which you will be allowed to place your questions directly to them. Having said this, Bent, I hand over to you.
Thanks a lot, and welcome to this presentation. Next slide, please. This is a statement from our majority owner and the founder of the company, Per Sævik, which we take as our mission, namely, to secure an environmentally friendly and sustainable operation. That is extremely important for us. Next slide, please. Some historical facts. We are operating in the coastal, Norwegian Coastal Route or the Post ship route, and Havila Kystruten is listed on the Euronext Growth under the ticker HKI. We operate between Bergen and Kirkenes. It's 34 ports northwards and 34 port-- 33 ports southwards.
The route is operated under a concession with the Norwegian Ministry of Transport, where the Norwegian Ministry is kind of buying services related to the port-to-port travelers, and also goods transportation. This contract or the concession and the duration of the concession is from 2021 until end of 2030, and the Norwegian government have the option to extend the contract with one year. We, as Havila Kystruten, is one of two operators, and we have four vessels out of 11 operating in this route. As mentioned, the majority owner, which is the Havila Group, is a family-owned enterprise founded by Per Sævik in Fosnavåg back in the 1980s. Next slide, please.
We do have, at least what we feel is, the world's most environmentally friendly cruise fleet. The vessels is operated in a hybrid mode, natural gas operations, with a huge battery package where we are able to reduce the CO2 footprint by 35%-40%. We are also fitted to operate with biogas, meaning that we can reduce the CO2 emission by 90%, going climate neutral. We do have one of the world's largest battery package on board, which enable us to sail emission-free for at least 4 hours, which we also have done into the World Heritage Fjords since June 2022.
We also reduced the NOx and the SOx emissions by +90%, which is much higher than the requirements in the contract. Of course, having totally new vessels, we have been able to both optimize the hull performance. We have already thought about going zero emission in the future, so the vessels are hydrogen-ready or ammonia-ready. We are having a focus on the total environmental footprint, also focus on the food waste, and all food are kind of sourced locally. We also have full recovery of kind of heat on board, reducing the energy consumptions as much as possible with the present technology available. Next, please. Of course, when we are looking into first quarter 2024, we have defined 2024 as year zero for this company.
We have overcome significant challenges since the startup. We will not, kind of, go into the details on those challenges. I guess most have heard about those. But for us, 2024 is kind of a fresh start. We are methodically building the organization with a clear aim of providing good working environment for the employees, where the employees can both thrive and succeed. And the focus has been on occupancy, enhancing the brand, and achieving exceptional customer satisfaction. Of course, the financial results reflect the challenging startup and ongoing investment in the operational growth. We can highlight that we have been able to have a high production also in the first quarter, and 99.5% operational ship uptime.
We have been able to reduce the CO2 by 36%. We have a Net Promoter Score or customer satisfaction above 70, which is extremely high in this segment. And we are seeing that we have a positive trend and good development, though still negative EBITDA. Next, please. Beautiful picture of two of the sisters meeting in the Lofoten area. And then I will give the word to Aleksander to take us through more of the details of the financial figures. Yes, Aleksander.
Thank you, Bent. So, looking at the figures on the operational side, the positive trend continues. We continue to grow revenues quite rapidly. You know, some of this is, of course, due to the fact that the last two ships was delivered in second half of last year, but we are also growing occupancy quarter by quarter, just the first seasonal changes. And we are growing the rate, the cabin rate that we are realizing. So, revenues is up about 17% compared to the fourth quarter of last year. We're almost three times the revenue compared to first quarter last year. And you know, this is a pretty rapid growth in earnings, and it's taking a bit of a toll on the organization.
We're experiencing what you would call typical growth pains, but I think from you know from our perspective that's positive, and that is what we want. But now that we've been able to build up you know a solid occupancy and contract backlog you know the focus now is on improving margins and improving the EBITDA generation. And I think that this is a bit of a twofold thing. First of all, there's a good potential to increase the cabin rate going forward. The cabin rate for the first quarter and also for previous quarter are impacted by you know partly by previous years' cancellations. I think everyone who has followed the company knows that we had a lot of cancellations last year because of late delivery of the ships.
You know, for the clients that wanted to travel with us, you know, despite of the cancellations, we have offered, you know, these clients to travel at a later date at the same price. And this is impacting the pricing in the first quarter, but we see that this effect is reduced quarter by quarter now. We've also had quite a number of bookings for larger groups through agents, which is also done, you know, historically at a bit of a lower level than what we are doing now. So the bookings we are making at the moment are substantially higher than what has been booked in the past, and especially in the last few years. The second side of that is cost.
You know, with such high revenue growth, there's naturally, you know, inefficiencies in how we work and how the organization functions. So as revenue growth stabilizes and, you know, the organization matures, I think, you know, there's a lot of potential for cost optimization throughout the organization. And last but not least, you know, we've taken a hit on the fuel costs compared to the market levels for the last quarter, and this is related to a hedging of the fuel costs. We are implementing a hedging strategy for LNG, and this really relates to the fact that we, you know, we have a lot of forward booking, a lot of forward booking, you know, one year ahead, two year ahead.
It's a little bit about protecting the margins on the tickets that we sell forward. Next slide. So, if you look at the booking status, and I also want to touch upon the channel mix. Now that we have a solid booking backlog for the year, we have 66% already booked. For 2025, we have 21% booked. The estimate for the full year, based on the pace that we see now for booking, is just below 80%. Just to elaborate a bit on that, you know, just below 80%, it means, you know, somewhere between 60%-76% up to 80%.
So it's within that range that we see the full year ending. And with, you know, a good booking and backlog, we are now able to focus more on the pricing and selling the quality of the product. You know, we believe we have a premium product for the coastal route. And it's all about getting up the pricing for us now. A part of this is, you know, tied into the booking channels. This is, you know, in which channel does our client, you know, book the travels that they perform with us? And historically, the coastal route has been booked a lot through agencies through groups. And, you know, this was how we started off, and we started off this way to build up the occupancy rate.
But we have been very focused on, you know, with, limited marketing, marketing budgets, we have been focused on digital marketing, being always on. And through this, we have been able to really grow the sales through our own channels. And this is positive. You know, from our perspective, we can own the customer journey, and then it also enables us to, you know, to get some more of the margins, instead of the agents. And then, also the clients will benefit from direct booking. Next slide, please. A few words on the financials and especially the liability side of the balance sheet. We completed the refinancing in April.
It was concluded end of the month, and we really strengthened the balance sheet and improved the liquidity situation by replacing secured debt, which was the Tranche B of the secured loan that we had, with unsecured shareholder loans, which are, you know, cheaper and very flexible in terms of repayments. So we can repay these shareholder loans without any call premiums at any time that we want. In addition, we established an overdraft facility with the majority shareholder. It's quite normal in this business to have an overdraft because of the seasonal the seasonality in the revenues.
And this enables us to, you know, in the summer months, in the high season, we build up cash, and then in the low season, we, you know, businesses like us all often need an RCF to get through the low season. So with this refinancing, you know, we feel confident about the liquidity situation for the next 12 months. So, in terms of financing, I think the next stop is the maturity in July of 2026. We have about EUR 255 million nominal, in nominal figures, that matures in July of 2026.
This is, of course, you know, it's a loan that we have a high interest rate on, and it's really reflective of the past and the issues of the past with sanction financing and delayed delivery. But the discussions we are having now on a potential refinancing is positive. We have very solid underlying asset values. If you look at the broker values of the ship's fleet, you know, it's all close to NOK 700 million. We have checked the new building cost, and which is similar or even higher. So there's a lot of upside, or what you could say, value-adjusted equity in the company because of the asset values.
And if you look at the loan-to-value basis, we are, you know, just around 50%, which is pretty conservative, for a business like this. So in, in terms of the refinancing discussions, the key now is to build the operational track record. You know, we have the asset values, we, we have the contract with, with the government and, and the foundation, and, and now it's about building a track record that, that showcases, debt service, capability. And I think through the discussions with the potential financiers, you know, there's a lot of positive feedback on the ESG profile of the ships, which Bent mentioned earlier. There's not a lot of, of ships in this segment that has such a, a good ESG profile.
And people, you know, banks and financiers, they like the contract with the Norwegian government and the fact that there's a long track record on the coastal route. In terms of timing, I think, you know, we need to build operational track record, and so timing for refinancing is likely, you know, more likely within 2025. Next slide, please. Just a few words on the KPIs that we have started reporting. Of course, on the vessel side, we are now fully operational with all four ships, which was phased in in second half of last year. Occupancy, we have a higher occupancy of 68% compared to the fourth quarter. We're higher than first quarter last year.
We see that this occupancy rate in the remaining of the year will be higher, you know, achieving close to 80% occupancy. The cabin factor is stable or slightly increasing, which is positive in terms of, you know, we have additional cruise passengers on board the ships that can spend on board. And the cabin rate is, you know, a lot higher than fourth quarter last year and also compared to the first quarter of 2023. Going forward, we are positive and see that the cabin rate will likely exceed those of the high season last year. So, there's. It's a pretty positive outlook on the pricing going forward. Next slide, please.
Okay, so a few words to end with before we start with the Q&A. You know, without forgetting the hardship and the challenges that has been overcome, I think, as Bent mentioned, 2024 is really year zero for us. It's about proving the operating model. It's about, you know, achieving the revenue targets and start trimming and improving the margins for the business, and under a normalized scenario. We will continue to be a leader in ESG. We support, you know, stricter regulations on the route. Today, the requirement is 25% reduction in CO2 emissions compared to the reference year. We are delivering, you know, 35% or higher.
As Bent mentioned, we can, by blending in biogas, go climate neutral tomorrow, so it's about making the fuel available. So we support stricter regulations in, you know, this concession period and also in the next concession period. We will, you know, facilitate the refinancing in 2025 and reduce the interest rate levels and subsequently the costs that we are incurring on the... Which is really not reflective of, you know, the assets, the value of the assets and the underlying business with the solid contract with Norwegian State. The high interest rate that we're paying is really reflective of the issues of the past.
And lastly, but least, you know, we are focusing on the coastal route and delivering in this concession period, and we will also participate in the next concession period with our ships. And, you know, I think we're quite positive with regards to that, having ships that can go climate neutral tomorrow and that are built, you know, at a substantial discount to what new building prices are today for similar type of ships. I think that concludes the presentation from the company. And, I guess it's now for a Q&A.
Absolutely. Thank you so much, Alexander and Bent, for your presentation and guiding us through the results. So we will now move over to our Q&A session. For a dynamic conversation, we appreciate it if you would ask your questions in person via audio line. To do so, please click on the virtual Raise Your Hand button on the lower part of your screen, and if you have dialed in via phone, please use the key combination star key nine to enter the queue, followed by pressing star key six to unmute yourself. If you're not able to speak freely today, you can also submit your questions in our chat box.
This is what Alexander already has done, so he has a question: Can you quantify how much revenue you have lost due to the fact that previously booked trips that were canceled were executed now in Q1? How much more revenue would we have generated if these trips were booked regularly?
You want to take it or should I take it? Yeah. I think, you know, we have not recorded this in such a detail that we can give an exact figure on it. What we know is that we had multiple cancellations last year, and these trips were rebooked, you know, in, in this year, most of them in, in the early part of the year. So this is, this is reducing, you know, quarter by quarter. But we don't have a specific, you know, figure that we can, we can give at this point in time. But it, it's, it's, you know, it's included as, as it is, you know, a substantial deviation compared to what we would have expected.
All right. Thank you so much for answering. So another question in the chat box is: Can you please elaborate more on the potential refining options for the remaining, I guess it should be, bond tranches?
Yeah. I guess for these type of ships and this type of business, there's ship financing available, you know, traditional bank financing, potentially, you know, combined with the bond market. If you look at similar cruise or ferry companies in the Nordics, many of them are financed with bank debt, bank debt that is secured in the ships, supported by unsecured bonds, which is often issued at the Nordic Exchange. Then, you know, with the contract with the Norwegian government, there's a bit of an infrastructure element to the business. So there is interest among pension funds, institutional investors that look upon this type of exposure.
And then last but not least, you know, leasing is an active segment within ship financing, and I think we will consider all of these options. And then, once we have, you know, a solution in place, we will be able to execute a refinancing. I hope that answered it.
Thank you so much. So in the meantime, we received two further questions which are, yeah, in the same theme. So I guess it would be enough just to read one of them out. Given the positive trend in your operating performance, would it be fair to assume that you will break even at EBITDA level in the second quarter of 2024?
Yeah, I, I think we can say that we will.
That's absolutely the target and our belief that we will do, yes.
All right. Thank you. Then, if you were to refinance today, what would be the level of interest expenses? If I remember correctly, the current is around 13.5%, including PIK.
Yeah, the current interest rate is slightly reduced. You know, the Euribor is down, and the Euribor curve is a little bit, you know, it's falling. So the current interest rate is around 12.5%. After the-- there's also a margin reduction of 0.75% after the repayment of Tranche B. If you look at the refinancing bank debt, you know, it's Euribor plus 2-2.5%. Color Line, which is, you know, a ferry company in the Scandinavian countries, recently issued... It's a big company, but they recently issued an unsecured bond at 3% plus three months LIBOR. So, I mean, there's a substantial potential for lower interest rate costs once the refinancing is completed.
I mean, we need to take into account that the financiers, they need to see a track record of positive EBITDA or positive cash generation that can service the debt. The loan to values are very good. For us, it's about proving the operating cash flow to enable the refinancing.
All right. Thank you so much. And then we will move over with the virtual hand from Tim Kruse. You should be able to speak now. I guess it's not working by now, so maybe, Tim, you can submit your questions in our chat box, and then we will just wait a couple of seconds for further questions. As it seems by now, everything is answered so far. At this point, just a quick reminder to everyone, if there are still open topics you would like to discuss, just let us know. I guess at least Tim has a question, so we will wait a few more couples. But in the meantime, we received another question in the chat box from Stefan. What is the composition of customers, especially for the U.S. and for Great Britain?
Yeah. What we see is that we have been growing, especially in the U.S. this first quarter. So that's a very positive development. We still have, of course, a high composition of German-speaking both from Germany and Austria and Switzerland. So that's about 45%-50% of the customers are coming from those countries, but also growing in the U.K. And we also do see that there is a positive trend of growing in the Nordic countries. The Asian market is coming back but not that much yet. And 5-6% of the total kind of customers are from the Asian markets.
We believe that during the year and coming year, also the Asian market will come back.
All right. Thank you so much. So now we receive further question: Is the contractual revenue effect in Q1 also for the next quarters?
Does it mean that, the positive change from last year? If, if that's the question, then, you know, the, the contract is index adjusted, every year. So the, the contractual revenues for 2024 is NOK 411 million.
Yeah.
We have an option here that has a lower rate, and we are, you know, accounting-wise, we are accruing for that over the duration of the contract. But the cash coming in from the contract with the government is NOK 411 million for 2024, divided, you know, equally, same amount each month.
All right. Thank you so much. So another question: Will more cash be required before refinancing?
I think not how we see the world today. You know, the refinancing that was completed in April was completed in a way that with the intention of managing liquidity until the refinancing of the remaining tranche, the Tranche A. So, you know, with what we see today, that's not required.
All right. So next question: How will cancellation of Pollux round trip affect Q2?
It's a bit difficult to be exact on that. We do not think it will affect necessarily on the financial side. The cost of the repairs was a part of the guarantee, so both related to the yard and the Kongsberg and the suppliers. We also have kind of a loss of hire insurance involved here. So, financially wise, we should not have any impact, as I see it, on the present period. So, and luckily, more than 80% of the guests have kind of just accepted to change to other vessels in the same period, at the same price.
So, it does not really affect necessarily the results that much.
All right. Thank you so much. Is there a need for hedging currency?
I think it's a valid question when you're looking at the huge, say, unrealized losses and gains that we have on currency in, in the balance sheet and P&L. But I mean, the, the alternative market and, and the valuations of the ships is done in euro or dollar, so it's in, in a, you know, the residual value of the ships are in, in foreign currency. And the majority of our revenues is, you know, collected from clients in, in Europe and, and the U.S. and, and Great Britain. So, I mean, the, the bulk of, of, of revenues is in foreign currency. So, having debts in Europe makes most sense for us. I think the, to get...
To take out the noise in the P&L, it would probably make more sense to have a balance sheet and a P&L in euro, rather than changing the debt, because the underlying business is really in foreign currency.
All right. So then, what are the cabin rates you are selling at the moment?
I don't know what we can say, but it's, you know, it's a lot higher than what we realized in the first quarter.
All right. And then, and now the last question, just a quick one: Will the presentation from today be shared afterwards?
Yeah, we will share the presentation, and we will make the recording available on our website. So it will be shared and presented to the market, so.
Great. Thank you so much. So by now, we have one question left. So what are your expectations on cash flow for Q2 and Q3?
That's a very general question. I mean, looking at, you know, the... We're going into high season, as I mentioned earlier. In the high season, we generate positive cash flow. So the expectations is that we will, you know, generate a positive cash flow in the high season. That's the expectation.
All right. So by now, it seems there are no further questions left. So let me quickly check our chat box. Now, seems everything is answered so far. So thank you, everyone, for joining and your shown interest in Havila. So should further questions arise at a later time, so please feel free to contact Bent and Alexander. So thank you for listening and all your questions. So I wish you all a lovely remaining day and weekend, and I'll hand back to you, Bent and Alexander, for some final remarks.
Yeah. Thanks a lot for joining up on this presentation. As coming from kind of a lot of challenges last 2, 3 years at least, we really do see a positive upside going forward. And as also mentioned in this presentation, we do also see how we are going to optimize kind of the operations. We have fantastic vessels. We have fantastic employees on board the vessels. The customers have giving giving-- they are giving us a very positive response, and the bookings are quite good going forward, also into 2025. So the future is positive. So yeah, thanks a lot for listening.