AS Tallink Grupp (TAL1T) Earnings Call Transcript & Summary

Good day, everyone. This is Joonas Joost from Tallink Group, and welcome all to the webinar introducing the results of the fourth quarter of 2021. In addition to myself, the results will be introduced today by the CEO of the group, Mr. Paavo Nogene; and Member of Management Board, Margus Schults. Unfortunately, Harri Hanschmidt couldn't join us today. As always, I think it's possible also to ask questions during the webinar, by writing your question in the question box on the right hand of your screen. And the questions will be addressed after the presentation and also as we have received some questions in writing in advance. After webinar, we will be first attending those questions, and then thereafter we'll be addressing the questions which have arrived during the webinar. And with that, I would give the word now to Paavo.

Good afternoon, everyone. It's nice to see that so many of you are attending this webinar today again. We have been working in pandemic or crisis situation already now more than 2 years. And I'm happy to say that we have been able to adapt company to the new normality, which has proved, I think, mainly, if you take a look over last year's second half financial result, we were able to stay in the positive side, net profit. And if you take into account, the Tallink asset base is approximately EUR 1.6 billion, which makes amortization quite high number of euros every year. We are kind of like satisfied that we were able to operate in the profit side with much less number of passengers during the 2021 second half. I believe that this should give some positive view to the investors and also to our financial partners about Tallink, the possibility to come out from this crisis is kind of like stronger than we entered. Because if we are able to keep this efficiency level we have reached right now during the period when the pandemic is slowing down or will get over this year, it can have a positive impact to our results in the future. And secondly, I'm very grateful to all these 37,334 investors we have right now, which number has been increased by 2,500 during the last quarter as well. We are very happy that during this pandemic period, we have seen that our investors' number has tripled. And at the same time, our secondary listing in Helsinki, we have already more than 9,500 investors. If you're going back just 3 or 4 years, all the Tallink Group altogether had around 11,000-12,000 investors. So only in Helsinki already, we're reaching this level. But I'm happy to answer your questions later. I will give this floor now to Margus Schults, who will give the overview -- more deeper way overview about the results 2021.

Good afternoon also from my side. And yes, I will guide you through the main business events what we had in Q4 and end of Q4, but also on this slide, we have summarized the whole 2021, because now we have a first unaudited result from the whole year. And yes, from operational side, we have still 15 vessels. We have kept them and managed to operate these vessels in the way that there was no need to sell them. We had one suspended route still in 2021, it was Riga-Stockholm. And out of our 4 hotels also Riga Hotel was closed. So the key effect for the whole year were, my first revenue was EUR 477 million which is approximately EUR 34 million higher than year before. So we have been able to increase revenues. We served 3 million passengers last year, which is about 1/4 less than in 2020. And just a reminder that in 2020, of course, we had 2.5 good months before the crisis started. We had -- and in 2021, we had a summer which was more restricted by different governments in 2021. In spite of a lesser number of passengers, the average price we earned from each passenger was high, and therefore, our revenue was also higher last year. Cargo units were stable on the level of 370,000 units and our asset base of our vessel mainly EUR 1.6 billion. By the end of year, last year, we had almost 4,800 employees. It's about 500 more than a year ago due to the fact that we had more vessels now in operations. But of course, from pre-COVID times when we had 7,200 employees, is significantly less. And our loyalty program, which is one of the probably largest in the region with almost 3 million members stayed stable. And as already mentioned, a number of shareholders and the FDR-holders increased in a very nice manner. Just a reminder about status of vessels. During last year -- second half of last year, most of our vessels, we were able to operate on, so to say, normal routes with some exceptions. Megastar and Star operated on Tallinn-Helsinki route. Silja Europa, also moved also Tallinn-Helsinki route accept some short-term charters in the fourth quarter. Baltic Queen operated on Tallinn-Stockholm route and Victoria was also -- which is normally operating in Tallinn-Stockholm was chartered in third quarter to Mediterranean. Then Silja Serenade and Symphony operated on Helsinki-Stockholm. They didn't start exactly at the end of -- in the beginning of Q3, because of the Finnish restrictions on border, but they operate -- started its operations from August. Galaxy and Baltic Princess operated normally and also our cargo vessels operated normally. And then we had also 2 vessels from usual Stockholm-Riga route. Isabelle was inactive and Romantika had few charters in Q3 and Q4. So of course, our Q4 operations were still impacted because of COVID-19 expansion. We had a very good starter -- start of Q4, actually and we saw that there was a clear increase in all our home markets towards traveling and actually, by volumes, October and November was second best and third best month in the whole year after July. So this is quite unusual if you compare normally. But yes, it shows that, again, when the COVID numbers go down and restrictions are removed, then there is clearly very rapidly returning interest from customers. But as we all know, and unfortunately new COVID variation Omicron became into the headlines in mid-December, which again, forced the governments to start to tighten different border restrictions and other restrictions in our home markets. So the end of the quarter was not as prosperous as the beginning, but still, I would say, in these circumstances, it was okay. And like already mentioned by Paavo, we ended the second half of last year with a small profit. And yes, I mentioned already that the result was also bumped by short-term charters we had in the Q4. And also, we opened new 3 Burger King restaurants in Lithuania during this quarter. There were also some events we want to highlight after the end of the quarter. We opened one new restaurant in the beginning of the year in Latvia. And by that now, the number of Burger King restaurants is increased to 15. We expect to open more restaurants during this year, but the speed of opening will be less than last year. Then luckily the situation with COVID has improved and in all our home markets basically have lifted restrictions in the first month of the year. Sweden opened already in the beginning of the year, removed all restrictions on the border and Finland removed border control since mid of February, and we'll keep only the travel -- health documents control on the border until now end of June. We also reached a dispute -- compromise in the dispute with support of Tallinn in a couple of weeks ago. So we ended our long-term dispute regarding port fees. And I think that the agreement and compromise which was achieved, and which content has been published on stock exchange, was good enough for both parties. The construction of MyStar, our new LNG-based vessel is continuing, but we expect that there are some smaller delays. So the operations are planned from June of this year. And of course, we are continuously exploring options for chartering our vessels. Of course, we always assess this charter versus economic results, what we have on our normal routes. But since there was quite a sufficient capacity on Baltic states already prior COVID, then we are very sure that for us economically more reasonable is to find this kind of options. And as soon as we will find any new option after the option to have with Romantika, we, of course, inform our investors. So of course, COVID situation still is unpredictable. We don't know where it is going. But we hope that with this Omicron variation, like many people predict, it will now be more stable. The state governmental decisions will be more predictable. There will be no severe lockdowns or closing of borders as maybe during the last 2 years. And like I mentioned already, we saw already during the crisis as soon as the situation improves and the restrictions are removed, then the number of passengers start to increase quite rapidly. And especially in Estonia and Finland, where, of course, most of our business is late, we hope that with the immunity situation, we see increased business during coming months, coming in. And of course, it's last but not least, to mention also it's not only border restrictions what we discussed, it's also the domestic restrictions like opening hours for restaurants or public events, because geologically when clients see that the domestic restrictions are very tight, the willingness of travel is lower even though border is opened. But now Finland will remove all restrictions from end of this month. Sweden has already done removing all domestic restrictions. And Estonia, due to a little bit higher COVID situation, is not decided final date, but is on the way also of lifting domestic restrictions. So we see all grounds at Q2, Q3 and further will be better business for us. And with that, let's go to more exact numbers, and I give the floor to Joonas.

Thank you, Margus. So yes, this Q4, we had more vessels in operations, more trips and also the volumes were higher. So compared to last year Q4, we had overall 12% more departures. The number of passengers was significantly more higher and exceeded EUR 1.1 million. As explained by Margus that, yes, October-November were very strong in terms of recovery of the passenger figures. Cargo numbers and passenger car numbers also improved, but relatively less compared to the passengers. Overall, the quarterly revenues exceeded EUR 166 million. And this time around, we also managed to earn gross profit of EUR 20 million. This result was also achieved in a situation where the fuel prices on the global scale were relatively hard and increased the fuel expenses for us. But overall, the cost of sales increased 50%, which is less than the 110% revenue increase. Hence, the overall efficiency improved in annual comparison. EBITDA was EUR 25.1 million. And I would highlight that this time around, the government financial support was quite limited at only EUR 1.4 million net amount. And in last year's comparison, the support in Q4 was quite high at nearly EUR 15 million, which meant that without the support last year's EBITDA would have been on the negative side. And although, we managed to operate the second half profitably, unfortunately, the Omicron variant at the end of the quarter had still some negative impact, and it did not allow us to perform net result-wise, profitably in the quarter. But given the circumstances of -- with COVID and also higher fuel prices, then this result can be considered quite good. As we had more ships in operations, the capital expenditures were somewhat higher than in the last quarter of 2020. This time around these were EUR 9.2 million. And I'm looking at the revenue development in terms of the operating segments. Then this time around, there was an increase in all of the segments and with the restaurant, shop sales on board and onshore increasing the most, nearly EUR 50 million. Several aspects impacting this area. The higher proportion of operations and long-term overnight routes, but also continuously higher spending by the passengers had a significant impact in this area. Then we also improved ticket sales. And this similarly was attributable to more overnight routes operated this year compared to last year. Although the competition in the cargo market remains high, we achieved better results than last year also in this regard. Slightly better development at hotels and the -- when we're looking at the charters, then the charters of short-term charter of Silja Europa and Romantika for 30 days during the quarter had almost EUR 10 million combined positive impact in this quarter. And when we are looking at the revenue development in terms of the geographical segments or routes, then the biggest impact was from Finland-Sweden route with near more than EUR 40 million better result than last year. And this very much attributes to the addition of the Helsinki-Stockholm on route, which was not operated last year, but also improvements on the Turku-Stockholm route. Estonia-Finland route also had high positive development at EUR 18 million. This was also due to somewhat more higher number of trips, but also improved number of passengers and passenger demand. On Estonia-Sweden route, we had additional operations of Baltic Queen, operating on Tallinn-Stockholm route, which was not operational last year, see definitely a positive impact from that. And other routes feature predominantly the change in the charter revenues but also was the hotels and additional of Burger King restaurants. So overall, when we look at the passenger development and in the top left-hand chart, then we can clearly see that in 2020, the first quarter was still resembling normal periods, second quarter being closed down with start of the COVID. In the summer, there was still bookings from previous times and the summer was relatively decent, although quite lower than normal years. And at the end of the quarter -- end of the year, Q4 in 2020 was also quite weak. So in '21, we had -- the first half was clearly very, very weak in terms of number of passengers, but also the summer months in Q3 were negatively impacted. But in Q4, with 1.1 million passengers it clearly maintains a better result than last year. Cargo seasonality remained fairly stable. But in the fourth quarter, the result is actually even stronger than showed in the last 3 years, including 2 years pre-pandemic 2018 and 2019. And the revenue development reflects largely also developments in the passenger volumes, although the more stable impact from cargo and also the addition of charter revenues meant that -- although the passenger numbers remained lower than in 2020, the revenues turned out higher. And when we're looking at EBITDA on the bottom right, then we managed to earn substantial -- more substantial results in Q3 and Q4. And in Q4, EUR 25 million EBITDA is actually fairly comparable due to the pre-pandemic year Q4. When you can see in 2018 and 2019, results were EUR 24 million and EUR 33 million, respectively. And also in terms of the net result, then actually, the result in the last quarter of this year resembles fairly much the levels where the Q4 result has been also pre-pandemic years, so minus EUR 3 million is not that much off from the minus EUR 2 million result in 2018. And very briefly, in terms of the full year comparison, as Margus mentioned, we managed EUR 34 million better result than last year, while having 20% less passengers. And also in the full year perspective, we managed a positive gross results. EBITDA for the entire year, EUR 58.3 million. And this result, also on the full year level, would have been positive even without the financial support, which wasn't the case this last year. Overall, the net result for the full year unaudited is minus EUR 56.6 million. Although it is still much on the negative side, this attributes mostly to the developments in the first half of the year and is a very strong and clear improvement over the last year's EUR 108 million net loss. For the full year, the investments amounted to EUR 20 million, significantly less than the EUR 100 million last year. But just as a reminder, last year, the EUR 70 million of the investment attributes to the new ships, including prepayments for MyStar and also the acquisition of the cargo vessel Sailor. So without those investments, 2020 CapEx was around EUR 30 million. And in terms of the balance sheet items and full year comparison, the total assets improved 4.6% and equity slipped to EUR 693 million. The overall interest-bearing liabilities were 10%-11% higher compared to the beginning of the year, net debt somewhat lower at EUR 652.4 million. And with the end of the year, and we have also disclosed the breakdown of the costs. Cost of goods sold still remains the largest cost item, cost line for us. But I'd highlight the improved efficiency here as the restaurant bar sales increased by 2% year-over-year, while the cost of goods sold was down by 5% year-over-year. The staff expenses at EUR 86.1 million were down by EUR 20 million in annual comparison over 26%, partly because of 2020 featured layoff expenses, but also due to the fact that the average number of employees was lower in '21 compared to 2020. And the fuel expenses due to the hike in the global fuel prices was higher by 28% or EUR 16 million compared to the last year. In the fourth quarter, the operating cash flows were positive at EUR 28 million. And this fact, together with the capital raise in the previous quarter helped us to reduce the outstanding overdraft balances during the quarter, which is reflected in the debt financing line. So overall, due to the EUR 30 million repayment of the debt financing, the change in cash during the quarter was negative by EUR 16 million. As mentioned before, at the end of the year, the total assets amounted to EUR 1.6 billion or EUR 1.586 billion, of which EUR 128 million was cash. The total interest-bearing liabilities were EUR 780 million, which includes both the bank debt and also right-of-use liabilities. The key financial ratios improved by the end of the year, but the net debt-to-EBITDA at 11.2x is still fairly high number. But again, I would highlight here that the EBITDA in the first half of the year was -- and also in the summer was actually quite poor and heavily impacted by the COVID situation. And the equity ratio improvement to 44% compared to the start of the quarter is due to the repayment of the outstanding overdraft balances. So at the end of the year, together with the overdraft balances and the available cash at hand, the total liquidity amount to EUR 262 million. And very lastly, we'll not stop too long here. There were no big changes in the debt structure. As mentioned only the repayment of the overdraft facilities during the quarter were the main changes. And I would highlight here that the principal [indiscernible] until the end of the first quarter of 2022. So these were the results of the fourth quarter this year, and now we would proceed to the questions and answers. And we'll start firstly with the questions that was sent us prior to the webinar.

So the first question is, is in the plans for the company to invest more in ro-ro ships and add more destinations between Baltics and Scandinavian countries, even more far destinations like Germany, for example.

Yes. Thank you for the question. No, we don't have plans to expand right now the fleet beyond the MyStar. We work to restore our current operations, and we try to increase the efficiency on the routes. So right now, we don't have a plan to buy more vessels. And Germany is a quite long route. It's always tricky to make it a profitable basis. And right now, if you take a look the fuel prices, then it's even more difficult. So we keep our current business model and working with our current routes.

Thank you. Will there be in this summer, any short-term time charter agreement with the Morocco state-owned company for any of the available ships?

We're working with different requests actually, and there are many different visitors. We should take our vessels to, to try to find out that -- is it possible to charter then. Right now, we have currently the contract with Romantika, which going to charter 22nd of March, so it's 1 month to go. And we'll start operations between the Netherlands and Norway. Currently, we haven't signed any more charter agreements, but we work with it because if we -- if you are able to reach the good conditions -- the financial conditions to charter out the vessels, we definitely calculate which is better for the company to charter out the vessel or use the vessel ourselves. And we are chartering out vessels only if it's profitable. We are not chartering out vessels just to reach the 0 level. This is not the case with us. So if we see there are possible to lower the risks and earn the profit, and the same time we see that we don't have enough profitable or enough good profitable route for our vessel, then we are happy to charter out. But we will let all the investors know about these deals via the stock exchange releases.

Thank you. Next question. What are the plans with the ship Star as a new LNG ship MyStar will replace the vessel on the Tallinn-Helsinki route?

Actually, I answered this as well with the previous answer. There are interest for the Star. We have visitors. We will see where we end up, if we don't reach enough good charter agreement, we have our own ideas for Star. So Star definitely will have work this summer, and we'll see is it a charter or it's something else, but we will let investors know.

Thank you. The next question. To my understanding, all travel restrictions have been lifted in Sweden and Finland, is there any travel recommendation in Finland that still stops Finnish people from coming to Estonia? Or are Finnish travelers deterred by the Estonian COVID restrictions?

I think it's more like a general question that it takes a bit of time to recover from such kind of crisis. And low season is -- low season has been with low passenger numbers always. And if we take into account, yes, there are still some restrictions. For example, if someone coming to Tallinn for weekend and staying in the hotel and from lobby bar or restaurant, these people need to leave at 11:00 in the evening, even if the same people going just to stay in the same hotel. These kind of jurisdictions, of course, having some impact. And at the same time, the Omicron wave is not over yet and some people just don't want to travel yet. And if you take a look also out from the window, let's say, that when the sunshine coming and spring starting to come out from this winter, and we believe that people are more active to travel as well. But at the same time, we are currently quite happy already about the passenger numbers between the Helsinki-Stockholm right now with one vessel operation. And we see also good passenger numbers on Tallinn-Stockholm, which we just started last week and again with one vessel. So numbers are growing and I think that it's more important right now that we are much more efficient. And even if these smaller numbers of passengers, we are able to operate not much worse than before the crisis. As Joonas mentioned, fourth quarter EBITDA level was actually quite similar for 2018 or a bit lower compared to 2019.

Thank you. Next question. Please give us an update on the latest you've heard about lifting Estonian restrictions?

The update is always changing. The main issue why the restrictions are still in place is that we have in the hospitals more than 600 people, and this is quite a big number compared with the -- how many people living in Estonia. So the government are waiting until this number is going down a bit, and then they have promised that they will reduce also the restrictions. So I personally -- if I take a look at other countries, how this Omicron wave have been in the last 8 weeks, then I think that we will see a better situation in second or third week of March. So by end of March, most probably all the restrictions in Estonia are gone, if they are not coming up any new type of virus. So let's keep our fingers crossed.

Let's keep our fingers crossed. Next question, if there are no restrictions in any of your home markets during this year's summer high season, what is your best guess regarding the passenger recovery during the summer high season? Would it be close to pre-pandemic levels or still far below pre-pandemic level?

It definitely will be below the pre-pandemic level, and there are many reasons. First of all, on some routes, we're operating with one vessel only. We are just going to open the Riga-Stockholm with one vessel. We're still operating Tallinn-Stockholm with one vessel. We have been operating 3 months Helsinki-Stockholm with one vessel if we take from January until end of March. Silja Europa is out of service almost 3 months and so on. So it's not going to be pre-pandemic numbers during this year. But maybe it's not also so important that we reach pre-pandemic passenger numbers already this year, I think it's more important that we operate as efficient as possible to reach as good as possible net profit during this year. And I believe that in the future, Tallink, not needing 9.7 million passengers to reach example EUR 50 million net profit. The management aim is to keep efficiency and reach that level with lower number of passengers as well. At the same time, the problem is, of course, the intercontinental travel. If you go back to 2019, Tallink had every day 1,000 Chinese passengers on board, so 350,000 passengers a year. So this takes also time and it depends a lot how example Finland is recovering, who need to bring these passengers to Europe. But we -- I personally hope that we reach at least 5 million passengers level this year. But I hope I'm wrong, and we reach some more. But let's see how the spring and summer goes. And actually, what happens in August or September, are we able to operate normal or the virus will play its game again and we need to adapt our businesses again? But let's hope that at least this COVID will disappear this year, or okay, it's not disappearing, but we need to adapt to live with this virus for future and let's hope that there are not so many restrictions coming up by end of the year.

Thank you. What is your strategy regarding special cruises this year, how many do you plan for? Do you plan for any special day cruises to Mariehamn this summer and if so, how many?

Yes, actually, we're already selling them. So everyone are welcome to buy the tickets. We have special cruises, we have Silja Europa vessel this summer, and we're going every Sunday to Visby from July and beginning of August. And also, we have 2 special cruises with Silja Europa to Mariehamn and if we see that there are more demand, we are happy to increase the special cruises numbers. But these are right now the cruises we are already selling in our system. So please feel free to buy the tickets.

Thank you. Do you expect all your vessels to be in full traffic this spring and so when?

We hope that all our vessels will be in traffic. The question is that are they in traffic in our routes or we are able to charter out more than Romantika -- besides the Romantika. So -- but yes, we have planned right now that Isabelle will start operations 6th of April between the Riga-Stockholm and Victoria will join 14th of April, Tallinn-Stockholm. But as I said, we're working same time with the charter possibilities as well. But most probably, the answer is yes, all the vessels are in traffic.

Thank you. And next question. The past 2 years, even during high season and without restrictions, the passenger and vehicle amount has been 10% to 50% lower compared to normal year. What is your forecast for this year?

Actually, I can't agree that passenger and vehicle amount has been 10% to 50% lower. It depends a lot for the route and -- but it's difficult to predict where we end up the year. So most important is right now to try to keep the prices and operate as efficient as possible. And I hope that we have shown in the last months that we are able to do it during also very tricky times and very difficult pandemic period.

Okay. The next question. What does the booking situation look like compared to the same time a year ago? How much have the bookings increased recently and are the cruises more demand in summer compared to winter?

Of course, the summer cruises are more demanded than the winter cruises, that's definitely for sure. Actually, the mindset has been changed quite a lot during this crisis. And of course, we have we have a lot of bookings already in our system for the summer period. But at the same time, we see that the bookings are coming in very last minute. It's not very surprising to us if even today, there are 500 up to 1,000 tickets sold for the same day departures. Of course, shuttle service is a big part of it. But you also see that for the cruises people making the decisions in the very last moment. And somehow, we understand it, because people want to be sure that they can travel, they are healthy. And they want to be sure that governments are not putting some restrictions, which starting from tomorrow and so on. So mindset has changed and people are buying the tickets late. But yes, already now, we have quite a nice number of bookings in our system for the summer. But for sure, the more bookings coming when really the season starts and weather is also better for the cruises -- especially for the summer cruises.

Thank you. Next question. How will the marketing activities in 2022 compare to the previous year? Are you planning any new activities and directions?

This I can call like business secret, how to market our products. So not going too deep into it. But we have -- again, I believe that we have shown that also with the much more limited marketing budget, we have been reaching some levels which are comparable already with the 2018 or '19. So let's keep this business secret how to market our products. And I hope that -- of course, marketing is always changing and depending situation and different routes, there are different strategies, and we take a serious look of our competitors as well. So we try to find a good balance between everything and the main goal is to have enough passengers on board to operate profitably.

Have you seen any changes in the activity of the Finnish customers?

Yes, in last weeks, we have seen that Finnish customers are more on board and coming to cruise between the Finland-Sweden and also already coming to Estonia. So yes, we believe and we are positive-minded that Finns also coming more already to enjoy, because everyone are tired of this crisis, which has been already more than 2 years, and everyone are very welcome on board overseas.

Thank you. Next question. Could you please provide an estimate of the financial impact of the agreement reached with Tallinna Sadam?

It's a tricky question. There are so many different aspects because port dues are depending how big vessel coming into the port and leaving the port, how many times vessel visiting the port, how many -- how much you have passengers on ports, so on, so on, so on. I can say this that as the Port of Tallinn has announced in their stock exchange release that they think or they believe their loss will be around EUR 2 million compared to last year results. This last year result is a very important part here. So if you take into account this estimate, we are estimating which vessels were operating this year, how many times vessels visiting the port. And one very important factor that MyStar having the bigger gross tonnage than Star -- gross tonnage is actually one of the biggest part of the port dues we need to pay. If you take this account that the vessel is around 14,000 GT bigger compared to Star, then we believe that this number is between EUR 2 million and EUR 3 million per year. And this contract is signed for a 10-year period. So as I said, Tallinna Sadam or Port of Tallinn hasn't said anything -- nothing wrong. Just they calculated based off last year numbers. We -- when we was negotiating this compromise, we was calculating it from our point of view and also the fact that MyStar having the gross tonnage over 50,000, Star is 36,000 around, so all these numbers together brings us to a higher number.

How does the arrival of MyStar affect your loan covenants at the Group level? Do you plan to negotiate for the extension of covenant waivers that should end as of Q1 this year?

No, we are not planning to negotiate the extension because last time we made the -- negotiated with our partners the loan agreements and extensions to -- or waivers to extensions and waivers, the MyStar financial partner was part of this deal we achieved. So our aim is to start to pay back the loans in second quarter as it is agreed and there are no upcoming negotiations due to MyStar arrival.

Thank you. The next question. When will you share the Burger King sales and financials? Currently, the Burger King is included in the consolidated results and the level of the financial results is still at low levels relative to the group and not exceeding the thresholds of significance. And the next question, I think it's 3 questions and actually, there will be more questions within the questions, but let's start. So can you disclose the number of departures you had during 2021? I'm not sure if this is disclosed or not disclosed yet in the results. But I think latest this info published in the audited Annual Report. Second question, how are you dealing with getting the personnel level up now that the active business season is approaching. Again, if you compare the wage level on similar positions pre-COVID and for the same positions today, how significant wage inflation are you witnessing today?

Yes. Actually, we started campaign to hire up to 500 people in Estonia and a campaign to hire the people also in Latvia and Sweden for the active business season. We -- Tallink is in good position because, first of all, our average salary onboard the vessels are normally higher than inland organizations in different countries. And also the working period or the schedule of work is -- example in Estonia, you are 2 weeks onboard and 2 weeks off, which allows us to hire the people also outside from Tallinn and actually more than half of the people working in Estonia are from outside of Tallinn. So people don't need to have the place to live in the same city where the vessels are parked. And when we announced yesterday just that we are hiring up to 500 people to work in Estonian organization onboard of vessels, already today, we have close to 300 CVs. So we actually don't see a very big program. And as I said, just the wage level is average. It's higher than inland organizations. It's for the same kind of work. So we believe that it's not very big problem.

Thank you. Any plans to fix the fuel price or still investigating the market?

Right now, we haven't fixed. The market is very volatile and we remember well what happened in 2020, beginning of 2020, when we had quite big amount price fixed and when the crash came, it was quite difficult to find ways how to cancel these contracts this way that it will be beneficial to our investors. So we right now have made a decision that we take a look how the market change in the coming months. But just right now, we're buying from the market with the market price. But Joonas, I think that you missed one question. You will resume loan principal payments for Q2. What is the total amount to be paid this year? I think this is a question to you.

Yes, that was the next question. Yes, we will resume loan principal payments starting from Q2. Typically, we haven't disclosed the repayment schedule, but overall, the annual level of the debt burden -- or the debt service prior to the COVID has been around EUR 80 million per year. And with -- we look to resume basically overall to the same level, but with that burden being somewhat higher and there have been somewhat more delays than overall, it will be -- it's expected to be a bit higher than that amount. The next question. Hello, thanks for all the information. What is the plans of the company in case we see prices of oil barrel in more high levels? And also, I would like to ask if the ships Megastar and MyStar are double-fueled ships?

Yes, Megastar and MyStar are both double-fueled ships, and we used this opportunity to balance the different prices. Right now, even the Megastar operating partly with diesel and mainly with LNG, it's I think it was 30%-70% percentage-wise. And we take a look how the market situation is. And we have changed actually also schedule for our vessels, long routes, for example, Helsinki-Stockholm route, we added half an hour. So such kind of small things we're doing.

And as we are fast approaching one hour mark, the last question. Cargo units result looks very strong in December and Q4, do you expect cargo units to decrease when more passengers will start traveling?

We are quite happy about the cargo improvements right now. If you take a look, we also sent to the stock January numbers, and you can see that cargo numbers increasing. So we hope to keep this. And of course, a lot depends what's happening in the import and export markets. But right now, the cargo is doing quite well, and we don't see right now the reasons the unit number should decrease.

Thank you. With that, we have exhausted 1 hour, in what I think in a good way. So thank you everyone for your interest and for your questions. And we'll meet again after the next quarter's results.