Baltic Horizon Fund (NHCBHFFT) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to today's web seminar, which is -- in which Baltic Horizon Fund introduces the audited financial results of 2019. [Operator Instructions] Today's web seminar will be held in English and is hosted by the Fund Manager, Tarmo Karotam. Right now, I would love to give the mic over to Tarmo. Please.

Thank you. Good afternoon. This is Tarmo. And I think this is the first webinar to be held from home office. I would like to give an update of this webinar, not only on the 2019 audited results, but as we are already quite well into 2020 with certain developments regarding COVID-19 virus. Then of course, I will try to give an update on that part as well. The presentation is structured so that we will firstly go over the portfolio and just to remind our position in terms of segments and geographies and also talk about '19 -- 2019, then move on to COVID topic, and then finish off by financing overview and overview of our loans. I would like to say that, yes, 2019 was quite a good year for us, but let's just go into it now in more detail. So this is the snapshot of the past 2 years. And I think, overall, over the past 2 years, we're quite satisfied that, despite of our relatively rapid growth across the Baltics, acquiring properties in office and retail segments, we were able to sustain also an attractive dividend yield. And as you know, our dividends are paid quarterly. So we don't have just an annual dividend, but we have more flexibility to decide on dividends. And so far, regularly, we've been every quarter -- based on the previous quarter results, we have been paying out the cash flows generated. Of course, we are planning to do that as well on a longer period of time since we are a cash flow producing investment and rather consider us as a dividend stock. And yes, there's been quite a few questions about now the upcoming dividend, but let me come back to you about that a bit later. We have had, yes, several acquisitions in the office segment and also 1 large acquisition in Central Riga, in the old town of Riga last year, when we had acquired the historic Galerija Centrs Shopping. I would say 2019 was, in that sense, also quite an efficient year, meaning that we were raising capital in the spring, specifically for Galerija. And we were able to close Galerija within 1 month after taking capital on board. So we could put the equity work quite quickly. In regards to the North Star Business Centre in Vilnius, which we acquired in October, where we have Lithuania Tax Authority as the anchor tenant, we raised some additional capital there as well specifically for this asset. And we were able to close this transaction actually 5 days after getting capital on board. So that also showed, I think, in our results that the rental revenues started to occur very quickly. Then as the end of the last year, and that this hasn't changed since we haven't had any acquisitions up until now, and this is a breakdown in terms of geography and segments. So we are about 51% in retail and 45% in office. Leisure there is the cinema building in Tallinn. And we have also an age breakdown there, which gives you an overview of our stock and how old they are. Actually, Galerija Centrs is almost 90 years old, so -- but it has been refurbished many times as it is an old town property. A few words about the portfolio, a few more words, is that in addition to the diversified -- there's a diversification in terms of segments and geographies. We have also diversification in terms of tenants. We have about 330 tenants in total in our portfolio, let's say. There's a bit more than 50%. I think it's even closer to 2/3 are in retail sector and 1/3 in office sector, but that is not exactly also the representation of the NOA. In the office segment, just to remind, we have tenants such as Latvia State Forestry, which is the picture here on the right side below. We have also Exigen and LNK in this LNK property on the right there. And of course, Lithuania Tax Agency, I mentioned, Estonia Social Services or we have the information agency, Estonia Information Agency. We have Swedbank, SEB back-offices and also many other tenants in Lithuania, for example, Vilniaus water supply, Vilnius city, Bosch and Intrum and several others. So quite a strong tenant mix in the office part. And in the retail part, I would like to break it down a bit further. Of the retail, of the 51%, the 3 largest shopping centers that we have in Central Tallinn, Riga and Vilnius form about 40% of the portfolio, and about 10% are neighborhood supermarkets that I think you're also well aware of, smaller assets such as Pirita, SKY and Domus Pro retail complex. So this is kind of a helicopter overview, just to remind everybody before I go now into more detail about them. So maybe one more word is that about our retail assets. As you know, our strategy has been to not acquire large destination shopping centers, but acquire retail assets. Either they're located in suburbs, in very densely populated neighborhoods, or central cities, in central areas in the old town and around. And I think those 3 larger shopping centers, which actually consider -- compare it to the large destination shopping centers are relatively small, between 15,000 and 20,000 square meters, whereas the large destination shopping centers are anywhere between 50,000 to 200,000 square meters. So this has been our strategy. We haven't changed that. And this is the result of last year. Here is the historic growth story in figures, and we've had a strong occupancy over the years, with now maybe just to note that we have had a bit of a higher vacancy in Postimaja and Pirita and Tallinn, the retail assets like-on-like to 2018. That's also partly because we have our preparations for refurbishment and the concept change that we have been planning there. But I think, generally, retail and other assets, the valuations and NOIs have remained quite stable, and we have had a bit of a growth -- rental growth like-to-like in office segments. So generally, the portfolio has been stable in 2019. And yes, currently our largest allocation segment -- segment allocation and country allocation has been Riga, Latvia. And we've had a bit more retail in our portfolio, which we now, this year, wanted to dilute with additional office acquisitions since the opportunities in the market are -- let's say, they're not all available at the same time. So I'd say the target going forward has been to focus on office segment primarily. I think this is one of the most important tables, at least for myself and for the management of Baltic Horizon. It is to make sure that our portfolio is developing good cash flows and also sustainable cash flow. So here, you can see the net rental income growth. That's been, I think, largely to do with additional acquisitions and -- but also some like-to-like rental growth in office segment. We've had some, let's say, some efficiency maybe found in fund administrative expenses since our management fee is regressive. The bigger the fund gets, the smaller the average management fee. Whereas in interest expenses, we have had a bit of an increase during this year. This is, of course, mainly to do with new loans, but also a slight increase of the average cost of debt, which still today and at the end of last year is 2.6%. CapEx expenditures, these are just regular maintenance CapEx to do immediate repair works and has been relatively stable over the year. And here at the below, you can see the generated net cash flow from operations which is roughly, I think, a little bit more than EUR 11 million for 2019 based on the quarterly results. So after each quarter, about 5, 6 weeks later, we have been paying out then the dividend based on the previous quarter. A few, I think, important ratios or percentages to keep in mind that if you look at the sort of the fixed costs or fixed expenses of the fund, which primarily includes fund administration and external interest expenses, then this is about 38.9% of the NOI. The fund admin is about 15% of that. And 23.9% is the external interest, which we, on a monthly basis, but also on a quarterly basis, in some cases like the bond, pay to our creditors. So we'll get more into that a bit later. Now when -- of course, you are aware of what's been happening in regards to COVID-19 virus and the measures that the governments in the Baltic States have been taking to limit the spreading of the virus. I think that, personally, the harsh measures, I think, have been warranted. I guess everybody is looking forward to a, let's say -- quicker, let's say, horrific sort of periods where everything is closed and then to get back to life as normal as soon as possible. Just a quick review. In Lithuania, the shopping centers have been closed among other public places and such as concert halls, cinemas, everything pretty much except for grocery stores, then pharmacies, opticians and pet stores. So -- and we have some of those tenants also in both Europa and in Domus Pro. Of course, food stores are still doing very well, and -- but the rest of the shopping center has been closed by the government decree in Lithuania. In Estonia, the government also arrived to the conclusion that the shopping centers need to be closed, whereas some neighborhood shops and some stand-alone retail units should stay open, including the do-it-yourself stores. But with the government decree, the shopping centers were closed now at the end of last week, also restricting the operation of all tenants, except for grocery stores and pharmacies. In regards to gym and such as MyFitness, in our case, we have in our -- 2 of our assets in Pirita and Postimaja and Forum Cinemas. The cinema, they have been closed already 2 weeks by the government decree to limit the spreading of the virus. In Latvia, the situation is slightly different. In Latvia, they have closed the shopping centers only for the weekends. That's the rule right now. And in -- during the weekdays, the shopping centers are allowed to be open. Also, maybe it's because the spreading of the virus or at least the official results of the virus spreading has been the lowest compared to Estonia and Lithuania. But that being said, in the large shopping centers that we own in Tallinn, Riga, Vilnius, the footfall has dropped quite tremendously more than 70%, sometimes even more than 80%. So of course, for those tenants, unless they had good online channels, which many of them still did which that formed quite a small percentage of the revenue, the tenant sales have dropped overnight pretty much to 0. When it comes to supermarkets, neighborhood supermarkets, then the situation is slightly better there. And the football hasn't dropped that much, but also dropped around 40%, 50%, in some cases. But as I said, the food stores, pharmacies are open. As well in Domus Pro, the -- as far as I understood from the property manager, the 2 pizza places are open that -- as they have capacity to make pizzas and other food products for takeaway purposes. In regards to our office part, what we know through our property managers who are on the ground, and who are giving us daily information about the communication -- direct communication with smaller tenants, and as well -- we are as well involved in communication with some of the larger tenants directly, the properties are looked after, meaning that even though office buildings are actually open for visitors, and some people do alternate sort of visits from home office to main office, but still the occupancy, actual occupancy, daily occupancy of our properties has been dropping. And -- but of course, for some tenants, very vital business works and also technical works to keep systems running, have to be done from the main office. So still quite many tenants are operational in the building. But as has been also declared by the government, people should stay at home and watch their health and hygiene and, if go outside, then respect rules of no closer than 2 meters to each other and 2 persons at a time. Now we have had this, let's say, crisis situation, escalating from around mid-March. So this has been ongoing now for more than 2 weeks. And it escalated, of course, extremely quickly and basically overnight -- new restrictions overnight. It was also about people getting sick and new sort of clusters found in each of our countries. So the restrictive measures have been, yes, quite harsh from the government side and also affecting, of course, our tenants, especially in retail segment. Quite immediately, we sent out a letter to our partners, to our tenants, also service providers, that we want to keep our communication channels open at various levels, at property management levels for daily information, for portfolio manager levels with more strategic discussions of the situation and, of course, on management level as well. So our message has been that -- or was at the moment that is keep the communication channels open. Let's look after our health and hygiene. We have increased the cleaning services for all of our properties, trying to do our best to limit the spreading of the virus. And -- but we have also said to many of our tenants that it is too early to enter in any kind of discussions because we don't know how long this lockdown will last, of course, and what are the repercussions for various tenant segments as well what sort of government support measures will be in place. But we have been in active dialogue with them. And now 2 -- more than 2 weeks later, we're still, of course, in discussion because it's very clear that April will be clearly a lockdown month for all of our shopping centers then, except for groceries and pharmacies and some food production facilities. But needless to say, I think there will be a negative impact also for the fund. The question is, of course, to what extent. And I would like to hope that the tenants that we have, the majority of the tenants that we have in our portfolio are long term, are one of the -- some of the strongest in the market, international tenants groups. But of course, it is very unexpected for everybody, also for the international retailers that have been forced to face basically a global lockdown in many cases, but have still liquidity and will to go through this crisis together with landlords. I'll get into that -- into more of this also later. Today, we have quite a sufficient liquidity buffer. At the end of last year, we had about EUR 9.8 million in cash, free cash on our various bank accounts. And this cash was actually a buffer for any future developments or expansions, so that's a better word, within our portfolio. As you know, there are quite a few. Today, the only expansion, which is -- which we have started is the Meraki office preparation since end of last year in Q4, and we are chasing there a couple of large tenants. So -- but I'll get back into this a bit later. Now of course, the question is, how would we deal with our tenants in April and potentially also in May and maybe even in June? I think we're taking this month-by-month together with tenants to see how long this lockdown -- official lockdown will last. And currently, what we have been communicating to many of our tenants is that we will give any kind of deferrals and waiver of any penalties or interests for any rent payments. But it's, again, too early to start negotiations with the various tenants in our portfolio because there are really a wide variety of retail tenants that we have, starting with gyms. We have flower shops. We have suitcase shops, golf -- what do you call this, major golf areas and, of course, grocery stores, cinemas. And many of them are very differently affected and will be differently affected also when we come out of the crisis. So we would rather -- I think we're very much open to discussions and later on negotiations, but currently, it is so ambiguous that even if you would agree something today, potentially, in 2 weeks later, you would have to review the whole discussion, whole negotiation. So we are very much closely monitoring how the state is and the governments are giving various measures to various companies since it affects really everybody. And I think the governments have started with measures to make sure that the employees over the next couple of months don't all get fired and that are -- can actually remain employed. And that's, of course, very important for retailers. Retailers themselves are looking for now various ways how to boost their sales through online channels, which will give them a little bit of relief, but of course, not so much short term. And I think, also from what I've seen, some initiatives from real estate associations, they would also -- they are also planning to approach governments and for any kind of support measures in regards to the 3 key aspects, I think, for all property owners, large-scale property owners is the bank charges, the utility charges and certain taxes, such as real estate tax, which potentially the government can help us with. So in our case, we very much would like to still take each tenant case-by-case. It takes, of course, a lot of work, and we are preparing for that work now in April, May. So -- and we hope that at some point, we will be able to forecast quite clearly as well the -- let's say, the probable end of this lockdown and this health crisis, at least in our small regions. But I think this is yet to come, and we'll still have to stand by and keep discussing this with various parties around. So moving on to financing. And this is, of course, very key for every real estate fund, real estate group. On one hand, you have the income. And from the other side, you have the expenses. And so just to reemphasize a few things, our LTV, around 57%; cost of debt, 2.6%; fixed weighted debt maturity, a little bit more than 3 years; and we basically have no amortization or payment of principals in any of our bank loans. And as you recall, that was the primary target in 2018 to manage our cash flows better. Yes, it did increase our cost of debt somewhat, but I think the benefits were there, and I think the benefits we can also very much feel right now. Even though -- we will also talk to all of our banks, and the banks have also openly said in the market that they can give some waivers of some, let's say, easier covenant clauses, and they can also give moratoriums for principal payments quite easily. So we don't have to really ask that in any case. And of course, now the interest payments that we have in front of the banks, that's something -- that's an obligation, of course, to consider. Just -- but also, there's been quite a bit of dialogue in the markets by bond market players and, of course, by many people being affected directly with the private loans that the banks should step up a bit and also consider interest rate moratoriums, at least for these periods of lockdown. I think that remains to be seen. But let's say, in our case, we have an annual interest expense of approximately EUR 5 million, a little bit more, I think, and the cash buffer of roughly EUR 9 million at this point. So in regards to our loan maturities, then as you can also see from the graph, the majority of our loans become refinanceable in 2, 3 years in 2022 and 2023. So we still have a bit of time to plan that, and it is not an acute topic today. And, yes, so the banks have been quite friendly towards us and have promised to waive any kind of covenant breaches, if there will be any, also during this year. So this is more of a detailed breakdown of our loan portfolio and also shows the fixed rate portion, so I think it's quite comprehensible. We have various -- maybe a few words about the covenants. So we have various covenants in our bank loans and actually -- and also for the bond. And in regards to the bank loans, since our LTVs with the banks are between, let's say, 35% to 45%, then we feel relatively comfortable as we do have some buffer for valuation decreases or anything similar, also including the covenants regarding EBITDA and things like that. I think what's important to maybe mention here is that the most significant moment will be probably year-end because year-end valuations are the ones to be taken into consideration in our -- by our creditors. So as I understood, from -- the semiannual valuations are not the topic of focus from their side. Also, contractually, it's not so set. The main valuations review is always at the year-end. So we have quite a bit of time until then. And we are -- I think it's clear that, in Q1, we are not breaching any of our covenants. And in Q2, we have 1 or 2 places where we -- 1 of 2 loans where we need to really monitor the situation. But of course, we are aiming not to breach any covenants during this year, at least not the small various covenants on the CSR and EBITDA. But I think the big question mark is, of course, at the year-end, it's very difficult to predict at this point any sort of movements in values. We've spoken to valuators as well, and their answer has been that we are not going to accept any valuations works anyway for the next couple of months or so because the situation is so ambiguous. That's not even possible to give any value updates. At the same time, yes, while the banks have been sort of insinuating that the cost of debt will slightly increase after this and -- but I think, in our valuations, the cost of debt assumptions are very long term. And they are, I think, between 3% and 4% already now with an assumption that that's where the long-term level will be. So again, it's very difficult to say at this point how the valuations will be effective at the year-end. But, yes, we did draw in many of our undrawn bank loans last year, and we did have a liquidity buffer since December that we are now working on and managing. Yes, well, maybe just a few words there, I think, our -- on this slide, our -- yes, financial expenses, of course, rose quite a bit, but so did our other rows, and that's because of the enlargement of the portfolio during the last year. We did have a lower profit, accounting profit, because the valuations overall stood pretty much at the same level. But with an assumption of CapEx, there was a slight loss. But again, I think from the cash flow -- operating cash flow perspective, we had a very good year in 2019. Here, you can see the cash buffer, which, yes, was affected by the dividend payout in January, but we've also had some rental receivables, of course, in January and February and then also in March. As far as I have -- I'm aware of that, yes, there was already some higher indebtedness in March, but still a majority of our invoices were also paid in March. I'm going to see if I can answer also some of the questions that I have received and I haven't now talked about. In regards to tenant contracts, I would say, and there's been a lot of discussions about the force majeure laws and how that is interpreted. And does it free the tenants to pay any kind of obligations? Or how exactly is it? And also, in our case, can we use this with talking with the banks or working with insurance companies? The answer there is that it really depends, first of all, country-by-country and contract-by-contract. And I think the idea is, of course, not to start arguing about force majeure clause and what this means to get out of any kind of, I don't know, obligations also for the tenant side. So the idea is to discuss and then mutually agree on how we are going to survive this period together. I think it's also clear that some concepts will not survive this. Weaker concepts, weaker tenants will find themselves in bankruptcy. We hope that, as we understand, that we shouldn't have too many of them, but there could be surprises depending on how long this moratorium lasts. But as I say, a certain cleanup sometimes during the economy and also in the retail and real estate sector is sometimes needed to free up resources. And we do hope that going forward, location, location, location prevails. But I think we'll have changes in our tenant mix in the future, but we'll definitely like to keep some of our key tenants on a very long-term basis. That's our focus. There's been a few questions about the dividend for Q1. Now the upcoming -- the dividend decision in the end of April, I have to say that we have not made a decision yet. Of course, there -- if we look at our peers and many other companies, many of them are suspending the dividend payment. Some of them have paid out the dividend, as this has been the decision for last year. We have not made the decision yet, but as we've been monitoring the situation, of course, very closely. And we will, of course, make a disclosure through the stock exchange at the moment that we can decide. And of course, cash is king at this point. There's various arguments for both sides. What gives us also good flexibility is that we pay our dividends on a quarterly basis, and we have ways how to adjust the dividend payouts during the year, given these unexpected circumstances, black swans. So I think I will only answer this question right now that when we make the decision, we will immediately announce it to the market. So just to wrap up here, and before many -- some other questions may have not been written in the question box, before we go into that, yes, generally, the fund is in a quite satisfactory financial position. Yes, we do have in our retail segment, which has been hit during these quarantine periods, of course, not as much as hospitality, which we'll also see a very long recuperation period. And the longer this lockdown stays, then, of course, it will also affect the habits and behaviors of people and maybe not only in retail and leisure and hospitality segments, but also in other real estate segments. It's very early to estimate any of that, but I think also difficult times for these co-working spaces and similar. But I think we have to take it month-by-month and see how quickly, at least in the region, the disease can be managed and at least to continue business in this region. Also, in our close cooperation with the Nordic countries, that's key right now. So it could be so that, of course, what is likely to recuperate after the lockdown is essentials shopping and services. We estimate that luxury goods are probably not going to recuperate so quickly. People are defensive for some time. It could be as well that the leisure travel and domestic travel will have a boost, and I think people may be interested in that instead of going abroad. Business travel, I think, may also take a long time to recover, but then again, the memories of our people is very, very short. And looking also what's happening at European Central Bank levels and also in the States, how much money is now going to be printed and again pushed into the system, then, let's say, the cost of debt, at least for governmental companies and governments, will remain extremely low and negative, as Estonia has already taken EUR 1 billion, close to EUR 1 billion loan with a negative interest rate. And so that situation still remains at the background. And so it's a bit different than compared to 2008, 2009, where there was a lot of debt in the system and very little equity to survive this crisis. But again, I have to say that it still remains ambiguous, and it's difficult to see really various scenarios. So -- and if you would ask me how much indebtedness we will have in April and May, then of course, we expect the tenants that have been less affected by this crisis to continue to respect their obligations and pay rent. But we will also see, I think, especially in retail side, some indebtedness. And of course, then we have discussed tenant-by-tenant how we're going to deal with that. Of course, we're open to give them a certain support. But again, tenant-by-tenant, we'll have to see how much that will be and for what period this will be. But -- yes, our, let's say, overall strategy for this year has been -- and let's say, if there wasn't any crisis, then what it would have been is to continue growing the portfolio, mainly in office segment, because we wanted to diversify a bit more into that segment and, of course, continue working on our expansion projects as we still don't have the final building permits for, for example, Postimaja and the Europa's concept change. So that will take preparations during this year. And of course, we will try to now take into consideration any effects of this crisis on the concept change. And perhaps, it's a very good time to work on this concept change for the next, let's say, a period of 5 years. We have a building permit to renew Pirita. We're preparing that as well on the side. It's a small project. And then, as I mentioned, we have Meraki project, the office development next to Domus Pro. We have started with the first phase in December with an investment of up to EUR 4 million. Some of it has already been completed. We're working on the foundation and underground parking in order to have certain level of pre-construction in order to qualify in the tenant auctions, let's say, tenant tenders. So we are actively trying to see if -- since the tenant tenders are still ongoing, we have also decided to continue participating in these tenant tenders, which are, of course, very important going forward. And at the moment, we have about 11% net leasable area pre-let. But in order to really continue construction, we need to have that much higher. So far, let's say we have slowed down these expansion projects generally, but they are not so large cash outflows for us. That's like in development companies or construction companies. For them, if you would have many, many developments happening at the same time, of course, obligations to pay for already done work, in our agreements, I always aim to emphasize and negotiate very flexible exit terms for any contract as much as possible. And let's say, we can make decisions very quickly, but I think considering the current cash buffer, we can afford to continue slowly making -- working on these expansion projects. But, yes, if it gets worse and it prolongs further, the lockdown and the quarantine, and then we'll may have to reconsider that. So let's see if we have any questions.

Quite a few questions. Okay. The question is about raising additional capital considering the discount currently on the market. And since we are listed fund, along with other listed equities and real estate companies, the effect has been imminent, especially as we have seen retail investors cashing out. So the discount to NAV is about 30% right now. I think 25%, 30%. It fluctuates somewhere there. And of course, raising capital at NAV is quite difficult right now. Now the question is that, would you believe or would any investor believe that the 30% discount actually represents the long-term value of our portfolio? Then that's -- I think that's a big discussion point there. And whether how much the NAV will be affected at the year-end, I think time will tell. And if there are certain adjustments needed to be made, then, of course, we will consider that with the investor base. But again, this is -- to raise capital at any other price than the NAV is the investors' decision. It's an investor meeting decision. And at some point, to raise capital at a certain discount may actually be warranted in order to beef up the equity part and take advantage of, let's say, opportunities on the market, which is, again, too early to say how many and what kind of opportunities will there be. So it's a complex question. We do have -- we have been working with a few new institutional investors over the years to onboard them. And of course, these discussions are ongoing, but that's, of course, a very valid question that it's not easy at the moment to raise new equity. What is the realistic time line of Postimaja expansion? Yes. So it's been quite a technical process so far, meaning that it took us a bit quite -- basically a full year to polish the old deed of land there and to actually develop a concept that will work and have all the permits in place. So that has taken some time. So our current, let's say, quite a well thought-through deadline is that we will start -- we will be ready to complete the preparations by end of this year and start construction beginning of next year. So -- but it all depends on as well that we are getting the final permits and also that we're getting the concept of a new expansion to be the right one, especially now considering the changes that we may face after the crisis in retail. I think I answered the other questions about the expansion projects, but they are -- they've been slowed down. And we're slowly progressing with architects and with our project managers, but currently, we have slowed them down. But I think the main construction, in an ideal scenario, without COVID, we would have had only the construction of Meraki project this year and potentially some refurbishment of Pirita this year. The rest -- the other projects, we've always aimed to distribute these expansions over many years, not to take the risk in 1 year. And so that's the case also right now that Postimaja and potentially Europa will be the following years -- the focus in the following years. Just a question on the drop on value. I don't want to speculate with any kind of estimates here. And so I really cannot give you an acute number. There is also a message about or a question about share buyback. So the answer there is that, I think cash is king at the moment. And I think any kind of support we would -- or let's say, yes, it might be a good deal at the moment to buy back units on the stock market instead of making new acquisitions. But I think, at the moment, we're quite defensive. And let's say we would rather keep the cash on our bank account at least until we have a better view on how long this lockdown lasts and what's actually the upcoming cash flows in our fund. So the presentation and the video presentation, actually, the recording will be available after this presentation in the -- through the Nasdaq Exchange. So there will be a Nasdaq announcement with all the details. So this presentation can be reviewed later on. So yes, there's been a question on the banks as well in the potential breaches of covenants. I think, as I mentioned, we don't aim to breach any covenants this quarter. And so far, we understand that most covenants should also stay intact in second quarter. And as I mentioned, the mid-year valuations are not to be taken in account in terms of loan agreements and also in the bond covenants as far as I remember. So in short term, the -- we should be fine. But yes, the banks have already also said that with players such as us and many other players, they are willing to be quite friendly and at least waive any covenant breaches, immediate covenant breaches. Yes, we have 2 loan refinances also this year. So I think, so far, we expect that we are able to refinance for a shorter period of time and -- but we haven't started any negotiations in that regard yet. The share of revenue that will have deferral of 90 days, it's -- at the moment, we're internally going to look and see who qualifies for that. We want our more dedicated tenants to be eligible for that. It's -- again, it's difficult to put a number on it, but I'd say it's somewhere between 20%, 30%, roughly, but it is still to be decided and to see how the tenants react currently. Honestly, I have no idea. So we will be much smarter in 1 month's time. I talked about the potential -- yes, the government subsidiaries, which we are aiming to do or talk about at least with the governments. Again, too early to say. Most assets affected by corona, of course, are our 3 largest shopping centers. So Galerija Centrs in Riga, Postimaja & Coca-Cola Plaza in Tallinn and then, yes, Europa. There's a question about lease expiries. And lease expiries, this year, there will be no major lease expiries, let's say, more than -- higher than 1% or 2%. So of course, there are ongoing small lease expiries, but I think our portfolio is quite well diversified there, with Rimi, the grocery store, being the largest tenant with a share of about 8%. And then we have several office tenants, single tenants, such as G4S, Latvian State Forestry and some others, who are also our top tenants. So there could be a few, but -- and of course, there may be some bankruptcies, but we currently estimate that smaller -- some smaller, weaker concepts will not survive this. And yes, final question about dividend. The official time line based on the financial calendar is end of April, week 17. But if we make a decision earlier, then, of course, we will communicate that to the market through Nasdaq. Okay. I think this is our questions. I hope this was informative, and we hope to keep communicating through various channels and, of course, very, very dedicated communication with our tenants. And so -- and that, of course, those discussions lie ahead. And of course, primary goal for us is to see the peak of the virus. And hopefully, we'll understand better when exactly is the lockdown going to stop, and then start to work from then onwards to restore and recuperate the situation for everybody. So on the AGM question, well, the AGM is planned as per the financial calendar in May. So the question is that whether we can actually gather since government decree is to not allow any sort of gatherings of people, more than 2% -- 2 people. So that remains to be seen. I mean May currently seems so far away that, I think, let's take it's still day-by-day. And let's work hard on the portfolio. That's what our team has been now focusing on. Once again, thank you. And stay safe, stay healthy, and we'll get through this together.

Dear ladies and gentlemen, thank you for participating in today's web seminar. The recording, as Tarmo mentioned before, will be available soon. Thank you. And stay well.