AS Tallink Grupp (TAL1T) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Tallink Grupp's Q1 Results Webinar. Today, we have with us our group CEO, Paavo Nõgene; Member of Management Board, Harri Hanschmidt. And unfortunately, Financial Director, Veiko Haavapuu, couldn't join us today. We have received quite many questions in advance. So we will try to address them during the presentation and also after the presentation. But also, you have the possibility to send your questions during the webinar, using the question box on the right of the screen. And since we had a lot of questions, we would start -- we will give priority to the questions we received in advance. But we do hope that we'll manage to address all the questions in time of the webinar. But now I would give words to CEO, Paavo Nõgene -- sorry, Harri Hanschmidt, Member of Management Board.

Yes, hello from my side. My name is Harri Hanschmidt. I'm a member of the Management Board for Tallink Grupp. Thank you for tuning in, in these very challenging times. First of all, I would like to take the chance and thank all the Tallink Grupp staff for their contribution and hard work during this crisis, those who have kept on working in very challenging conditions, keeping people and goods moving between our countries and all those who are currently at home waiting to return to work. Considering the times we are living in and the uncertainties we are facing, the moral among our staff is actually quite good. And we are working hard to keep it that way through regular dialogue with them by sharing information and decisions as quickly as possible. We would also like to thank all our business partners for close cooperation and understanding through these difficult times and finding quick solutions. And lastly, our big thanks goes to our national authorities who have also worked very closely with these last few months to find solutions and implement measures for the long-term sustainability for our business and other businesses. Well, first, we start with the Q1 results, of course. And here, I would also like to remind you that we are in a state of emergency, but this only started in the last month of the first quarter in middle of March. So we will, of course, also talk about these topics. So first of all, we are still the leading European provider of leisure and business travel and sea transportation services in Baltic Sea. Our fleet consists of 14 vessels. Unfortunately, quite a few of those vessels today are suspended because of the COVID-19 emergency. But we truly hope this is temporary. Typically, have 7 ferry routes. Right now, 3 of the routes are suspended, and one is running on reduced capacity. Also, our hotels are -- 3 of them are closed, one is running on limited capacity, the Express Hotel. Last year, our revenues were around EUR 950 million with EUR 1.5 billion asset base, 7,200 employees and almost 10 million passengers transported. Our loyal customer program has 2.7 million members. We also transported 390,000 cargo units. On the next slide, we can maybe start talking a little bit about this COVID situation. And what was the first maybe response from the company. We firstly, of course, saw a little bit messages in January, February, where the Asian bookings started dropping away for the summertime. But then the crisis in March very quickly escalated and we tried to take very quick action to adapt. Of course, the hardest part was that all the countries declared state of emergency, and this meant that we had to suspend ships -- most of the ships straight away. And the ships that were running were helping to bring people home to Estonia, to Latvia, to Lithuania and also vise versa to Finland and Sweden, whoever was abroad and that was quite a while into the crisis where this transportation was kept going. Also, the goods were moving. So we have scaled down noncritical costs and investments to a minimum. We have -- we will not propose a dividend payment during the Annual General Meeting as we don't see that this is the right thing to do right now or impossible. We have decreased workload and remuneration of the staff by 30% for the whole group. And there is temporary state salary compensation measures active in each country. They vary a little bit between different countries. There has been some collective redundancy, unfortunately, affecting about 10% of the group employees. Also, hotel businesses affected as there are no hotel guests and no reason right now to open the hotel. We have gotten some support already from the Finland's National Emergency Supply Agencies for 3 vessels to continue the very necessary cargo transportation between the countries. This is support only for cargo. Here, I would like to remind that our vessels are much bigger and the cargo component is only small component. So we are happy to do this, but unfortunately, such type of business is not profitable in the long run, at least. We have been able to postpone the MyStar installment from Q2 to Q3. But here, I would like to remind that we are on track with building the new LNG ship MyStar. And such a project is quite long and carefully planned. So the shipyards have long queues. They're building other ships as well. So to do, for example, postponement of the ship is not really an option, but we are happy about the flexibility of postponing the payments. We have entered negotiations with financing institutions regarding covenants because in a normal economic situation, we have very strict governance. But right now, we -- at EBITDA level, et cetera, is not predictable. And therefore, this governance need to be temporarily perhaps changed. Also, we are talking about the loan payment schedules and are having very constructive talks with the banks. Also, we are negotiating with financial and other institutions regarding new liquidity financing. Liquidity right now is very important topic to gradually start operating again. And we need this liquidity even more in the next months because the way we can open the routes is that they will not be profitable the first day because there will be many different restrictions. We don't know how many vessels we need per route and so forth. This is very important for us. On the next slide, we have just the cost breakdown for the 2019 year. And I just would like to remind that we have some variable costs like the cost of goods that those we sell ships as we don't right now sell that many we don't have the -- most of this cost as well. Also, fuel cost is somewhat variable as we don't use so much fuel right now. The interest costs, net finance costs and amortization is the same. There is no change here. And all other costs like staff costs, marketing, important stevedoring and operating expenses, everything has been reduced on variable levels, but we don't give out the exact numbers. On Page 6, we can see the Q1 overview. Q1 is our typical low season. First 2 months were very good results before the crisis hit in March. So first, we saw a strong January, February passenger operations. A little bit sluggish operations on the cargo side. And obviously, the big effect in March came from the COVID outbreak. We already have a negative result on the gross profit level. And net profit is always negative. But this time, the net loss is some -- higher level increased by EUR 4.9 million. But still quite limited effect from COVID. On Page 7, we can see the drop in passenger numbers and this hit then in the second half of March or middle of March quite dramatically. And the full effect, obviously, we can see ease in the April month. On Page 8, we can see the typical seasonality and EBITDA level has been around EUR 4 million in the first quarter, now it's minus EUR 1 million. Passenger number also affected from 1.9 million to 1.6 million. Revenues down from EUR 179 million to EUR 155 million. Cargo units transported to us a little bit even higher because there was still possibility to conduct cargo transportation between the countries. On Page 9, we can see that our net profit now is minus EUR 30 million for the first quarter, and we hope that as we already see some less restrictions and plans from the government to end some of the lockdown, but this is very gradual for Estonia. The first restrictions are -- were eased on 5th of May. And on 11th of May, for example, shopping centers will open. On 1st of June, we already see beaches open and so forth. So this is definitely positive messages, and then we hope that all the other countries are going this way as well. And then we already are able from the 14th of May to transport people between Tallinn and Helsinki, between Estonia and Finland on commuting purposes and then other serious travel reasons. But I would like to give a word now to Joonas Joost, our Head of Investor Relations, who will continue with the presentation. Thank you very much.

Yes. Thank you. So when looking Q1 results on the segment level, then on the operating segments, we can see that actually the restaurant and shop sales and onboard sales declined in the same pace with the decline in the number of passengers. And obviously, also ticket sales was hurt due to the COVID situation and lower number of passengers. We managed to increase the number of cargo units, but actually, overall, the cargo market was relatively weak. And in addition to the weak cargo market, also the global fuel prices affected the cargo revenues through the fuel surcharge mechanics. Although we shut down or suspended operations of our hotels in a large extent, then the decline in hotel revenue is modest, but this is only because we actually had a very strong January-February results. And when looking at the only segment, which positively increases the income from the chartering of the vessels, this is due to the change in the renewed cargo agreement, which was actually done in the middle of Q4 in 2019. When looking on the geographical segment, then obviously, all the routes had the negative impact from COVID situation and the overall weak cargo market. But on top of that, each route had some other specific factors also, which impacted the result. And as we can see, for example, the Estonia-Finland and Finland-Sweden routes dropping the most in the revenues. These are the routes, which have also the highest most expensive vessels. And for example, Finland-Sweden route has also actually 4 vessels operating on the route. If you're looking at, for example, the very low decline in the revenue of the Estonia-Sweden route, then the main reason in that result is the fact that last year, the Baltic Queen was on a very lengthy maintenance and repair works. Not surprisingly on the income statement level, sales were down, as explained earlier, and we were not able to cut costs immediately in that same pace. So we saw that the EBITDA margin was actually -- our EBITDA was negative -- EBITDA margin actually was negative also in this quarter. And because the revenue decline was much faster than our ability to cut cost and actually that was also the reason why the gross profit was on the negative side in Q1. From the cash flow perspective, we see that the capital expenditure was actually EUR 2 million higher than in the last year same time, but we need to remember that we had docking of 5 vessels during the quarter. And also, we made EUR 12.4 million payment for the construction of Megastar. There was some positive net effect from debt financing. But overall, the change in cash during this quarter was negative EUR 22 million. And as you can see already on the operating cash flow level, the result is clearly weaker than last year. And in terms of financial position, I've said that there was only a fairly limited or relatively limited amount of negative impact of the COVID situation on the first quarter results. So at the end of March, it appears as that the financial position is still relatively okay, but this is -- this would only be okay sort of in the normal circumstances. So we can see that the net debt to EBITDA level isn't yet too bad and also the equity asset ratio isn't too bad. But this is, of course, not taking into account that we have lost more revenue already in April, and we still have the COVID situation ongoing. So at the end of the quarter, the interest-bearing liabilities amounted to just shy of EUR 600 million, of which the long-term bank loans were EUR 477 million. But as explained earlier, we are -- the negotiations with financial institutions and state of Estonia regarding new loan are still ongoing at this moment. Yes, as I said earlier, in the recent years, we were a company who was also paying dividends to the shareholders, but in line with our policy of paying dividends when the economic performance enables it then actually -- right now, we are in the situation where the economic situation and performance doesn't allow to pay any dividends. So this year, the Management Board has decided not to propose any dividends. And just to quickly recap the highlights and key facts in the Q1. So as mentioned, we had dockings, but less docking days compared to last year. There was a payment for the construction of MyStar, EUR 12.4 million. And also factually correct, we signed a memorandum of understanding to develop Tallinn City Hall with the City of Tallinn and in fact would include also ports -- Tallink port. And perhaps last -- in last webinar, we also promised to reveal some more details about the fuel price fixing agreements. So at the time, we agreed to fix about 65% of the total estimated fuel volume for the year 2020. But after the rapid escalation of the COVID situation and the stoppage of operation of many ships, then we were able to negotiate more flexible terms with one of their suppliers and we are right now paying market prices until the performance recovers to agreed levels. And regarding the other supplier, we are paying the fixed price, but only to the extent of the consumed volumes. And now after March, the material events that have taken place include the start of physical construction of MyStar in the beginning of April. Also during the month, we managed to increase overdraft limit by EUR 20 million. And we also opened Tallink Ekspress e-shop with home delivery service. Regarding Burger King restaurants, they are scheduled to be opened in Tallinn in the second half of May. And there are more openings planned later in the year. And first 4 restaurants will be in Estonia, Latvia and Lithuania restaurants, we're looking more in the -- later in the year in late Q3 and early Q4. Looking ahead also in Q3, we have nearly EUR 50 million installment for MyStar construction. As Harri explained earlier that the shipyard has their own commitments and costs relating to the construction of the ship, so when it was easier to negotiate the postponement of the first payment from early April to Q3, then right now, we -- from the perspective of also shipyard's view, we are not in a flexible position to further postpone payments for that ship. And yes, do we say right now, the negotiations of covenants and low schedules continue to ensure that we -- and then also -- sorry, and also new financing to ensure that we have sufficient liquidity. Typically, we haven't given much outlook, but I think it's also quite obvious in today's situation. And in respect to the COVID-19 situation that these year's earnings and all the financial results are highly uncertain and largely subject to decisions that the states will make regarding the timing of lifting of the restrictions and forms and other limitations and also how will the recovery period actually look like. And we clearly see that there was limited impact of COVID on Q1 results and full effect will be visible in Q2 results. So that concludes the presentation part. And now we would proceed to the questions.

And first, we would address the questions that we received in writing before the webinar. So the first questions would be, which steps did you take to explore possible financing opportunities and recovery scenarios?

Yes, good morning also from my side. My name is Paavo Nõgene, and I really hope that all you are safe. And this COVID-19 haven't caused any big troubles to you or your relatives or loved ones. Regarding the question, we have actually done a lot. We are in good discussions with all our partner banks. We are in discussion with different financial institutions in Europe. And we -- as also mentioned already discussing also with governments, especially with Government of Estonia. And we're looking to have some answers regarding our liquidity and later for long-term loan issues in coming weeks. So we definitely will let everyone know through the stock exchange release.

So this also actually sort of addresses the next question, which is in addition to the state guarantee loan, which other financing options are you considering?

Yes, we -- first of all, we're talking about the loan, state guaranteed loan or guarantee loan, which is actually for our assets. We have approximately EUR 1.5 billion worth assets, and we can guarantee the loans also with our vessels.

And given the current outflow of cash, when is the latest time you need to receive additional financing?

Yes, this is a good question, but we can't answer for that. We're working with our liquidity. And as yesterday late evening, we announced our first quarter results that are written, our liquidity situation. But the next information we will give out to -- after the second quarter with our stock exchange release. Thank you.

Which events should take place for the worst-case scenario to realize?

It's a good question. The tourist sector actually got a very big hit because the borders went closed. And we normally are living in the world, which is open, especially in Europe or Schengen. So the worst scenario can happen only when all the governments deciding that the borders will be closed in the future. But we all understand that this is not realistic to happen. So of course, the worse scenario can happen, then there are the reason that people can travel anymore within 1, 1.5 or 2 years.

Okay. What is the current rebound plan about -- regarding number of departures, routes, price campaigns, etc.?

We have different scenarios already, but we depend when we can choose, which is the best one, again from the government decisions need to take place. We know right now that from 14th of May, we can start some extra operations between Estonia and Finland. There are possibility again to travel to the work or family purposes also between the Turku-Stockholm route. We know that governments are planning to discuss the leisure purpose of traveling between Estonia and Finland from middle of June. But the decisions are not in place yet. So we need to wait them. We -- example with Estonia-Finland, we're adding already now from 14th of May some extra capacity with the barges on -- for the departures on Fridays and Sundays for vessel Star from Helsinki-Tallinn and Tallinn-Helsinki. We know -- already know that if we can start operations from Riga to Stockholm this year, we start them with 1 vessel only. We are not going to start operations with 2 vessels. So we know that time when people need to -- we need to give time for the people to trust traveling again and we know that it takes time, and we're working hard to make all necessary steps to build up this trust that traveling with Tallink silverline is safe. We're taking into account different new measures. Example, we have proposed to the governments that at least during the first month of open borders for tourism, we should sell only half capacity of vessel. We should allow only half capacity people to each room. Example, if you have in the business class 140 seats, we can sell the 70 seats and so on. So to prove to the people that we really care about the safety and we want to make sure that everyone who're buying the ticket with Tallink silverline vessels feel safe. So this is the most important priority right now. It's not so important what quality of entertainment we're giving to the people, but we need to ensure that today, they understand that traveling with Tallink silverline is really safe. And as soon as we get answers from the governments when we can start our normal operations, we will choose version, which we make to be available in different routes.

Okay. And while on the subject of potential recovery scenarios, there was one question also extending to when do you expect to be back at 2019 levels?

Difficult to say. Some experts saying that it takes -- in airline business, they're saying that it can take 4 or 5 years. We actually think that we need to look at a bit separately our customers from Europe and our customers from other continents, especially from Asia. Because we think that this coming summer and also the next summer, most probably we'll see more traveling to neighbor countries, which means that actually, if you're going back to 2008 when there was financial crisis, which was absolutely different. Then Tallink saw that the traveling between the Estonia and Finland was more active because it's more closer. And the people wants to travel. And actually, we think that during this epidemic crisis we have right now, we see the same thing that people most probably would like to travel more to the neighbor countries to feel more safe and to be more closer to their home. So it is difficult to say or try to find the answer when we will recover back to the 2019, but we hope that our main markets, Estonia -- main markets Finland, Estonia, Sweden, between these countries the traveling recovering during 1 year. Let's hope so, but traveling from other continents to Baltic Sea and this recovering period can be much longer.

Thank you. Are there options to dispose assets potentially via sale and leaseback? Or on the other hand, would there be even room for opportunistic acquisitions when you would, for some reason, be able to obtain sufficient financing?

Regarding the opportunistic acquisitions, so our focus is currently on ensuring the sustainability and restoring of our core business. And we are not planning to sell our vessels because during such a crisis is also not very good idea to sell the vessels. It's -- it can be only good idea to buy the vessels, but we are not going to sell any vessels right now.

There's a question. How large of an unrealized loss do you see arising from fuel hedge agreements?

We have never used any financial instruments for hedging the fuel risks. So there will also not be any such unrealized losses as referred to. But of course, the fuel market has changed dramatically in last months. We have some hedging agreements. But we are still buying the fuel with lower price than we did year before. And we also have agreed with one of our partner, new structure for buying the fuel. So we're working also in this topic to buy the fuel with reasonable price.

And continuing on the topic of expenses and covering expenses, how much state compensation do we expect for the port fees?

Government of Estonia has announced that they will pay back 75% from the port fees for all the vessels who are entering or arriving or departing from the port of Tallink facilities in Tallinn-Helsinki and Muuga. But this has not yet been officially approved. Actually, the parliament has made the decision, but the Ministry of Economic Affairs need to place it, and it takes some time. But we know that the aim is that they are paying back also port fees by 75% from the first quarter port fees. But as I said, it needs to take place first and then we can say exactly the amount and all the other information.

Next question. How has the value of ships changed during the months of only cargo traffic and longer dockings?

We don't see any change in the values right now, but we have been making the -- we're making -- or we're getting the ship values each year, end of the year, and we don't see this small period like this COVID-19 has been right now any change of value.

Okay. Regarding the Burger King franchise agreement, are there any consequences arising from the current situation?

Not yet. We actually are -- have used this time where shopping centers has been closed. Quite efficiently, we are ready to open in coming weeks more than one Burger King restaurant in Tallinn. Actually, we're going to open 3 of them. And at least 1 or 2 next coming also in near future. So yes, we have -- we are in good contact with the franchise owner and cooperating with them, but we don't see any programs to open Burger King restaurants in May. But for sure, if the governments are going to make some new decision because of the epidemic situation in the country, then we need to change our plans. But right now everything going per pipeline.

Maybe I will add here that the Burger King project is also quite a wrong project for us. And right now, the restaurants that we are working on, these properties were already found and rented before the crisis. The restaurants were built there, and we are quite nicely on schedule. So there is no need to even look at the franchise contract. Right now, obviously, we will see what happens next year. But right now, we were also able to divert more resources to the working project, especially IT resources, et cetera. We also had some drawbacks where we had problems getting, for example, monitors and cash registers, et cetera, but these supply lines have also been now are fine, and we are really happy when we can open the first restaurants already soon.

Thank you. And how is the morale of your employees right now?

It is, of course, everyone wants to go back to the sea and they're waiting for the time when we can start operations again. So everyone are optimistic and really working hard to help also the company in different fields where we need to help right now and everyone's waiting the first departure already with their own load vessel.

Okay. So there was a question -- another question about the financing and whether you're evaluating other loans than the state loan and LHP loan, which have been speculated in the media. But I think we already answered this question previously in talks of different institutions. So the next question, can you provide a rough estimate on how many of your Tallinn-Helsinki traffic passengers used to be work related? So how many passengers do you estimate could travel starting from 14th of May? And do you think it will be sufficient to break even on the service?

It is difficult to say because the times have changed and traveling between Estonia-Finland is a lot related with the work and possibility to do the work. We know that everywhere are the crisis, but what we can say is that for all carriers together, it's normally have been around 30,000 passenger cars traveling between Estonia-Finland in 1 week. So how much out of them coming back and starting to use the vessels, we don't know and can't predict.

I think we sort of answered the next one, but let's see if you want to elaborate. So your question is regarding the passenger capacity, so how much do the government 2 plus 2 rules reduce the maximum passenger capacity on different ships?

As I said also, we actually proposed to the governments that during the first month, at least, there should be only half capacity sold for the tickets, which means that if you have the Megastar 2,800, we can sell around 1,400. If we have a Star 2,000, we can sell around 1,000 and so on. We think that it is necessary. We work together with the authorities. We -- as I said, we would like to really make everything that traveling with us is safe and investing also into that. So of course, it's affecting our income, but it's income, for sure, with such kind limits are lower than last year during the high season. But if you take the low season, then this capacity should be absolutely enough for business. But we also -- we have also the version that if such kind of limits taking place, we have capacity to add vessels to, example, Estonia-Finland route in some days, if needed, to bring more people to Estonia or back to Finland. So we are ready also to add some departures with extra vessels if such kind of limits taking place for longer periods.

Thank you. And a question about hotel and office rental agreement. So the questions are, did the holes pay rent for the time they were closed in Q1? What do the rental agreements look like for the following months? And given the extraordinary liquidity issue, have there been changes in the rental agreements for Tallink's offices? If they have changed or will be changed, then by how much?

They will change. We are in negotiations with the owners. And right now, the answer is that all hotels are for the 6-month period where we don't need to pay the bills, but what will be the decrease in the rental agreements, rent fee will be clear during the May. But we are talking about the period -- longer period. So at least until the next summer, so we can give out this information with the quarter 2 report.

Okay. How has the start of the e-shop been?

It's -- we have actually 2 different e-shops. If you take the shopping.tallink.com, which is selling perfumery clothes and sweet and so on, confectionery, it's launched also in Finland and Sweden during the first quarter. It went quite well, of course, during the time when everyone were shopping in Internet. There are some transportation programs and delivery period was a bit longer than we would like to have it. But still, we think that shopping.tallink.com has been launched well in Finland and Sweden as well. And of course, we built a very fast new Tallink Ekspress shop, which is meant for your everyday needs more and this is starting -- it started well. We -- what is our competitive advantage is that if you're ordering today, you also will receive the goods today because we work here together with Tallink structure. And we see that here, we can see some more growth in future because if something has changed after the COVID-19, it is that people are shopping more from Internet.

I would like to add here as well that actually, this Tallink Ekspress is an interesting concept. We wanted to introduce this in Belgium as a physical shop, but due to this COVID emergency, we saw that we were able to actually do this in digital form. And obviously, it's a new concept. We are adding new goods every day and then making it more intuitive, and we're very happy that quite many people are already using this option and they then encourage you to do so. And hopefully, this concept will expand now both in digital version, but also in this physical store.

Thank you. Next question, we, I think, already covered also before, but why were the losses of the Finland-Sweden segment so high in Q1?

Sorry, no microphone. So it's actually a question of the amortization of the vessels. And we have there on that route 2 younger vessels and 2 a bit, both are ladies. And as the traffic stopped during the middle of March, amortization plays here a big role. And also cost of salaries as the union negotiations in different countries have different rules. And we paid due to the union agreements full salary to the workers until end of March. That's why also the result is more negative like it normally should be. But from the beginning of April, as also Joonas and Harri mentioned before, there are big decline in the salaries due to the different composition mechanism from different governments, we are very thankful.

Thank you. And there are, again, a bunch of questions about detailed level of running costs in the current situation in April. But the questions are whether about the monthly level or daily level. So -- and also questions about the cash burn and when do you require new liquidity. So those questions were addressed earlier when Harri was going over the changes in the costs. And yes, we would not will not disclose numeric figure right now. And in terms of low end, we need the financing. We are working on the liquidity, as we speak. About -- question about what are your plans for the fleet in the Riga-Stockholm route?

As I also answered, this summer, if authorities in fact will allow, we will start operations with 1 vessel only. And when -- and are we going back with the second vessel? These decisions will be made later.

Are there any other actions that can be done to further lower the costs?

Of course, there are different possible actions. But we -- until the moment when the government supporting the salaries in some different mechanisms in different countries, the management is also different. We -- and until we don't know actually when governments allow us to start operations, example, between Sweden routes. Until that moment, we're trying to not make any big steps. And -- but of course, if there are strict rules or we can't do business on the Stockholm routes, actually, we, of course, need to make some expertise as well. And why the Stockholm is -- question has most probably -- most of you know that Sweden choose different way to work with this virus than Estonia, Latvia or Finland. So everyone in the Europe actually looking Sweden, how the situation is there. And of course, it -- how the impact also for the decisions government need to make regarding opening the traveling between Sweden-Finland, Sweden-Estonia and Sweden-Latvia again.

Okay. Thank you. And the last question, which was submitted prior to the webinar in writing. When do you expect to be able to disclose information on your loan agreement discussions? Do we expect to need to strengthen our balance sheet with equity later in 2020?

We'll let everyone know as soon as possible. As I said before, we think that some information coming up in coming weeks. And all the other decisions, do we need to do something else, we will make later. Right now, we're working with different solutions to get short period liquidity loan and also for longer period liquidity loan.

Okay. So now we've covered all the questions that came in advance. I see that we have also several questions posted during the webinar. But at the same time, we have 6 minutes until the end of the webinar. So we will cover as many as we can, but it appears that we are going to be unable to cover all the mileage. So the first question is, what kind of maturities you have on your loans? What is the current picture with payment schedule?

We're working also with this and we announced all the changes in our payment schedules via the stock exchange release. We're talking with our good partner specs. So we will release all the information after the changes has done via the stock.

And MyStar payment schedule, now EUR 49 million on -- in Q3 remaining on delivery 2022?

Yes.

Question about COVID impact on the revenue and churn Q1 2020. I think these are visibly in the financial results we covered earlier and no specific impact stated. How close is the company in agreeing the EUR 150 million loan from the government? And what will be the interest rates and other terms of the transaction?

We announced it via the stock that Chamber of Commerce and Tallink headquarter are quite close to each other. So we hope to reach the agreement soon.

Does the -- do the redundancies in Latvia mean that the Latvian operation is over for good?

Actually, let's put it that way, that we made a decision that we can't start operations from Latvia this summer with 2 vessels, which means that we need to also make some redundancy process. And we have said also to our good employees in Latvia that if the market is getting back to the normal track, we are ready to talk again, to ask them to join with Tallink silverline team.

Will the Tallinn City Hall development project be postponed due to the current situation?

Our priority right now is for sure to resume to our core business and all the next decisions or plans coming after that.

What is the level at which you fixed fuel price in both contracts?

Let's put it, that day before 12th of March, it was very good level. After 12th of March, it's not so good ever.

And could you please comment on the recovery scenarios that you will be pacing your further decisions on perhaps Plan A, Plan B and Plan C?

I think that I already answered to those current questions. And from what we depend to place exact plan on table we thought we're going to operate in the next months.

Can you comment at what price did you fix fuel in Q1? Okay, this is -- seems to be a similar one that we had earlier. What is the amount of unencumbered assets that you hold?

Actually, as our asset base is EUR 1.5 billion. We -- my answer is this way that we are able to take loan more than also share mentioned EUR 150 million. So we have enough asset to take loan as much as we need right now to recover from this crisis.

Okay. What portion of salaries is compensated in Finland, Sweden and Latvia and for how many months?

It's very different. Latvia we are compensating until 70%, but not more than EUR 700 per month per employee in Finland. Actually, the situation is that 90% or 80% of people who were working in Finland are -- left you on paid holiday, and they will get paid from authorities. In Sweden, there are 3 different levels. So we need to pay salary in different periods from 20.8% -- 28% until 47.5%. And of course, we can also use these people for work than less than 100%. So the systems are very different. And the Estonia governmental institution is paying maximum EUR 1,000 per person. So systems are different, but they are, of course, helpful to our business.

Okay. Thank you, Paavo. And unfortunately, our time is up for this time. Thank you, everybody, for participating, sending your questions in, in advance and asking on the spots. And let's hope we all stay safe, and we will have improvement in the situation soon.

Thank you very much from my side as well.