DFDS A/S (DFDS) Earnings Call Transcript & Summary

Welcome to the DFDS Inter Report Q1 2020. [Operator Instructions] Today, I'm pleased to present CEO, Torben Carlsen; and CFO, Karina Deacon. Please begin your meeting.

Good morning. Karina and I are, as usual, joined by Søren Brøndholt, our Head of Investor Relations. Throughout our system, we continue to deliver reliable and efficient freight, ferry and logistics services despite the COVID-19 situation. Our strong network and our highly experienced people have helped us to keep all businesses operating. The expectation is that our passenger business, where travel and -- border travel restrictions and border crossings have caused suspension of the 2 pax routes and loss of passengers will, of course, be the exception. This is where we had to close down operation. Our financial position remains strong. We've used our strength to secure additional liquidity reserves, and we'll come back to that. With this brief introduction, I will hand over to Karina.

Yes. If we look at Slide 4, let me talk you through the Q1 results. The first quarter can be really split in 2 parts. We had a quite good start to the year. And after the first 2 months, the results, they were overall in line with expectations. As anticipated when we started the year, the freight volumes linked to the U.K. were for the first 2 months of 2020 lower than last year. As you will recall, that volumes in Q1 of 2019 were boosted by the U.K. stockpiling. We also saw that the freight volumes between Europe and Turkey were above 2019 for the first 2 months of 2020, which was also what we expected. And then came March. And in the mid-March, we were all hit by the COVID-19 effects. And obviously, that had an immediate impact on our activities and thereby on their results. So when we look at the quarter, overall, our revenue was down 1%. It was significantly impacted by the suspension of the 2 passenger routes that Torben just mentioned and also the lower number of passengers on other routes, not least the Channel. We did also see a decrease in the freight volumes as the manufacturing plant suspended operations, not least in the automotive industry. That meant that the effect of earnings was more severe than on the top line, so we report a decline in EBITDA before special items of 10%, arriving at DKK 610 million, which was only slightly ahead of where we were 2 years ago. It's worth noticing that more than half of the decline in EBITDA came from the passenger business, after the suspension of the route. In addition to the passenger impact, the decline came from increased earnings in the comparison period in Q1 2019 from the U.K., but also from negative impact on freight volumes in March, and a lower result from the special cargo in logistics, and I'll come back to that shortly. Let's turn to Slide 5. Just a few words on the P&L and other KPIs. As mentioned, COVID-19 only had a limited impact on revenue with a decline of 1%. It was a net result of the impact from COVID-19 and then the positive impact from the 2 acquisitions we did in December '19. And also a positive impact from a new bunker surcharge model, which we implemented in Mediterranean from the beginning of the year, after the transition to the new sulfur rules. As mentioned, EBITDA was down 10%, and together with an increase in depreciation of DKK 31 million, we saw EBIT before special items being down by 43%. We had a little bit of headwind on the finance costs, which were lower by DKK 40 million from positive variances on currency, mostly from the Norwegian kroner and the British pound versus euro. All in all, our profit before tax decreased 36% to DKK 96 million. On the balance sheet, we saw a slight increase in invested capital of 2% compared to year-end, mainly due to working -- the higher working capital. We are, of course, monitoring that very closely. But fortunately, we don't see a significant increase in our trade receivables. Return on invested capital was 7.3%, a little bit down from year-end of 8.1%, but clearly significantly down from the first quarter of 2019. Net interest-bearing debt went up slightly also from year-end following the significant CapEx investments we have for the year, also in Q1, related to the new buildings, dockings and scrubber installations. All in all, that meant a slight increase in our leverage, which we reported at 3.5x at the end of Q1. If we turn to Slide 6 and look into our ferry business, when we look at the routes, there, we see a mixed picture with a positive EBIT impact from the Baltics and the Med, whereas we see a rather significant impact from North Sea, Channel and, of course, the passenger business. North Sea was down DKK 42 million compared to last year. They did have difficult comps due to the U.K. situation. However, 6% lower volumes were also a result of bad weather in February, and then, of course, the lockdowns that came in March, not least affecting the automotive business in the northern area. The results also included a negative impact from a new route, which we opened in June last year. If we look at the Baltics, we see a positive impact compared to the quarter of last year. The volumes were slightly down, but we had significantly lower cost, bearing in mind that in the first quarter of 2019, we had significant excess costs related to dockings and also replacement ferries. In the Channel, we saw the largest decline in EBIT, very much linked to the fact that volumes overall were down by 10%. As mentioned a couple of times now, we did expect that, but of course, we were also impacted by the lockdowns that came in the middle of March. And also after a good start in January, February with the passenger volumes on level, we saw a significant decline of 22% in March, which of course, impacted the result in Channel. If we look at the Med, we saw an improvement in EBIT of DKK 9 million. As I mentioned, we started out well with January, February showing a 10% volume pickup from 2019. However, when we came into March, that was more or less offset by a decline of 12% as market demand slowed down, and operations were impacted by travel restrictions for drivers. Finally, passengers did DKK 20 million lower EBIT. They were, of course, significantly impacted by the suspension of the routes. Turning to Slide 7, having a look at logistics. The logistics results in Q1 were a disappointment. And as you can see, not least in Continent, we had a significant decline from last year. If we look at the Nordics, they were slightly below volumes from last year, if we exclude the volumes from the Finnish acquisition. But we did see a generally lower trailer volume in all key corridors. That meant that EBIT was down DKK 4 million, but that was also impacted by the fact that we had lower activity in the specialized services in Sweden, which have a higher earnings. Then when we look at Continent, as I mentioned, we did have a significant negative impact from the Continent. Again, some reduction was anticipated due to the link to the U.K., which mainly impact the Dutch and the German corridor. But we did see our special cargo division being further hit. There was a slowdown in the construction sector across Europe, but definitely also in relation to the U.K. And that meant that we saw a decline in volumes of more than 6% on a like-for-like basis. However, when we look at EBIT, we saw the significant decline mainly from special cargo. And that was, of course, partly to do with the slowdown in the construction business, but we also have some internal inefficiencies in our trucking operations, and we incurred some one-off charges amounting to DKK 8 million. Finally, U.K., Ireland, they saw a decline in units of almost 10%, resulting in a decline in EBIT of DKK 4 million. If we look outside the cold chain, the results were actually improving over 2019, but we were hit by 2 things in the first quarter. First of all, we had bad weather in the beginning of the year, meaning that there was hardly any fish to catch in Scotland. Later on when the weather turned better and we could actually catch fish, we saw a lack of demand from overseas markets and also in the catering business, of course, both impacted by the lockdowns. On the positive side, when we look at the logistics business, we saw good results from the 2 acquisitions, both Freeco in Finland and Huisman in the Netherlands developed as expected. Then I'll pass the word over to you again, Torben.

Thank you very much. And we will now turn our attention to how we have responded to the COVID-19 pandemic and what measures we have taken to keep employees and DFDS healthy through the situation. On employee health, we are following all government guidelines to keep our operational sites and offices safe and reliable, both for our employees and for our customers. We have been swiftly adapting our capacity. We'll come back to that on the next slide. We have moved fast to introduce cost-saving initiatives, and we have reduced the CapEx expectation for 2020 by around DKK 700 million from DKK 2.3 billion to now DKK 1.6 billion. We participate in government wage and fixed cost compensation programs across Europe, which, for example, means that we have -- that the 2,800 people or employees that we have sent home are on different programs introduced by governments throughout Europe. Finally, we have secured sufficient liquidity to weather the crisis and also to pursue opportunities that may arise from the crisis. On Page 10, more details on what we have done to adapt our capacities to the lower demand. All our 20 ferry routes that mainly carry freight are operating. But volumes have been impacted since mid-March as is evident from the table to the right, which means that we have responded through a reduction of capacity and cost by conducting fewer sailings and even laying out ferries. So in addition to the 4 passenger ferries that we laid off in connection with the suspension of our passenger services in March, we have laid off another 12 of our freight ferries to make sure that we have the right capacity of course, observing that we also need a certain frequency to maintain a reliable and attractive service for our customers throughout our system. But in total, 16 ferries out of a pre-COVID-19 level of just above 50. So a significant reduction in capacity that, except for the passenger business, have meant that we have been able to continue to service our customers everywhere throughout Europe. Turning to Page 11. Suspension since mid-March of our 2 passenger routes, 1 from Copenhagen to Oslo and the other from Amsterdam to Newcastle was necessary as border closings and travel restrictions were introduced. We still have passenger capacity in place on the Channel and in the Baltic Sea, where we operate ro-pax and day ferries, but of course, it is only for essential travel that the capacity remains open. In our forecast, that we'll come back to, we have assumed some return of passengers from August on all routes that can carry passengers and reopening of our passenger route as well. Although passenger normally represents 16% to 17% of our revenue with the most complex of our business completely locked down, we can see an impact of our -- on our outlook coming 60% from the passenger side despite the relatively low normal revenue rate. Turning to Page 12. What have we done on our liquidity. We decided when the virus broke out and the consequences became clear to approach our banks, and we have committed additional liquidity facilities to the tune of DKK 1 billion. We have also had a discussion with our banks around the covenants that are included in our loan agreement relating to the UN Ro-Ro acquisition in 2018. And these have been adjusted to reflect our new situation and our new view of the results, the coming quarters and years, so that we, with these 2 initiatives, can put all our attention to how we manage through the prices and pursue the opportunities rather than having to worry about whether we have enough liquidity or whether we reach any covenant with banks. With this, let's turn to the outlook on Page 14, where the headline is that our 2020 EBITDA is likely to be reduced towards DKK 2 billion, down from last year's DKK 3.6 billion, so a significant development. We suspended the outlook 18th of March when there was no visibility to how 2020 would end. Now introducing an updated outlook, but only at a group EBITDA level and for investments. Obviously, this outlook builds on a number of important assumptions, especially on how freight volumes develop for the remainder of the year and what the timing of lifting of travel restrictions on passengers will be. Full year, we now assume a negative 15% development on freight volumes. And you've seen in Q1, we are down 7% partly driven by the ramp-up, of course, of volumes Q1 to U.K. last year, but a significant turning to the worst the rest of the year compared to Q1, where COVID-19 was not a major factor. Passenger volumes, as I said before, we assume that they slowly ramp up from August and maybe on the Channel already from July. Conclusion. With this view of the near future is that our EBITDA could approach DKK 2 billion for 2020. At the same time, as also mentioned on the previous slide, we have reduced our investment outlook to now DKK 1.6 billion for the year. Page 15, DFDS is well positioned to meet the challenges and opportunities that have come from the COVID-19 situation. We have demonstrated a fast adaptation to the new situation. Our organization is responding extremely well to the new challenges. And we begin to see the outline of a way out of the crisis and also an outline of new opportunities that come from structural market changes, opportunities that we are well positioned to pursue. With this, we will turn to questions from the audience.

[Operator Instructions] And first question comes from the line of Dan Togo from Carnegie.

First question regarding the compensation schemes. How much do you allow for that in your guidance? And can you elaborate maybe a bit on the amounts and how it's distributed on the passenger business and on the Channel? That's the first question.

We have sent home 2,800 people. The programs vary from country to country. The main impact or the reason for the sending home of the 2,800 people are from the 2 closed-down passenger routes and the suspension of passenger services on, for example, the Channel. So the biggest part of the compensation comes from the passenger business. We have probably included to the tune of just over DKK 100 million in these forecasts.

And could that amount be higher than that, possibly? Or what is sort of say, the -- yes, the possible outcome here?

This is based on what we know now and what governments have introduced. At this stage if programs are extended or improved, then that number would change.

And then on your financial leverage. You have more than DKK 12 billion net debt right now and EBITDA approaching DKK 2 billion, and your previous covenant was at 4.5x. Does this -- new negotiations, does this -- with the banks, does this include a leverage up to 6x? And what is sort of say the effects of you breaching? And what is also the headroom to pursue these opportunities which you talk about, Torben, if this -- if they arise, you could think of -- could maybe imagine that the life of nobody has a huge problem right now, and that could reintroduce one of these initiatives to get hold of these ferries. I don't know if that is totally perceivable right now, but I'm just thinking a bit loud here. So what are the opportunity to pursue these opportunities? And what happens if you breach, so to say?

We -- as I mentioned, we have now adjusted the covenants to reflect our view of the situation. So it's not an option to -- or a likelihood that we breach our covenants. The opportunities, we are not being more specific on those at this stage. All companies are adjusting to the new situation. We can just see, as I also mentioned, the outline of opportunities that could arise. We have not qualified them -- sorry, quantified them yet or done anything more specific. We just note that we have the strength to pursue such opportunities should they materialize.

Could you elaborate a bit about how much firepower you have for this?

How much what, sorry?

How much firepower you have for this?

No. We will not go into that detail at this stage. And again, there is not a specific opportunity that we are talking about here. It is small and big movements across our different markets that we can see will turn into opportunities, and these can be smaller and larger in nature.

Okay. And then a question on the CapEx side, which you have reduced now from this DKK 2.3 billion to DKK 1.6 billion. This DKK 700 million, what is it you have taken out? And will that amount just appear again in '21, '22, instead?

Partly. One of the things we have done is that we expect our 6 new build to move into '21 instead of '20. So that one will come in '21 instead. Other than that, I think it's more of a movement -- what you take you take from this year and move it into next year, but then next year will move to the year after. So it's more of a -- it will come, of course, but we can postpone it somewhat. And then there is a little bit of things where we said, okay, you simply don't have to do that. But if I give you an example, when we look into our logistics business, you can say is it now that we exchange a big part of our fleet and enter into long-term leasing obligations or should we just extend for 6 months, and then we can do it later. Those are the sort of things that we have looked into.

Okay. And then just a final question from my side. Your guidance -- this DKK 2 billion that you could approach, is that -- it sounds a bit like this is the worst case. Is that around DKK 2 billion? Or is that what you see realistic right now? Or is it a worst-case scenario?

We always guide realistically, Dan. Otherwise, I think we would be in trouble with the financial authority in Denmark.

Our next question comes from Marcus Bellander from Nordea.

Yes, I want to follow up on that, whether guidance is realistic or not. I mean I suppose it could be realistic but still conservative. And I'm when crunching the numbers on this, it seems like you're implicitly guiding for volumes to be down about 17% or 18% in the period May through December. Is that your -- is that the scenario you have included in your guidance?

That's more or less accurate, Marcus. And that's, of course, not a flat line. That's slower now, and we expect it to be better towards the end of the year.

Okay. But doesn't that seem like a conservative scenario given that April is down 24% and that arguably will be one of the worst months?

We, of course, lack some visibility here, Marcus. Totally agree. We monitor closely as car factories reopen, the strategy of the different countries throughout Europe on reopening of the economies will impact this number. If there is a more aggressive strategy on reopenings, you may very well be correct that the drop in volumes will be less.

Okay. And also regarding this scenario, you include for your passenger ships. You say they will -- you expect a gradual ramp-up from August. I'm just wondering what this is based on. Could we not see passengers returning to the passenger ships earlier? Or is there something -- do authorities view them as, I don't know -- are you not allowed to open those -- or reopen the routes because authorities forbid?

We could, in principle, operate those routes today. Since they are -- at least Copenhagen-Oslo, more than 90% passenger based, and the borders in both Denmark and Norway are closed, we don't operate them. We have large spaces on board if there were -- even if there were restrictions of 500 people or whatever, we would not be categorized as one event. We are subject to other rules and regulations. So we do not think that it is a challenge for us to reopen and travel with passengers also before that, but it requires that the borders open, and of course, that people want to travel again. And there we have taken, you could call that a conservative view, that we will open our dedicated passenger routes in August with limited capacity and volumes. It also makes our forecast less vulnerable, you can say, because it means that July, June, a lot of August is not coming, which is where we traditionally would make quite a good chunk of the money on our passenger business. So even if we are slightly wrong and it will only be in September, the impact on our forecast is limited.

Okay. Understood. And then final question, and sorry for harping on this. But your net debt to EBITDA, I'm just thinking if you make DKK 2 billion of EBITDA and you have DKK 1.6 billion of CapEx, I mean, there's barely enough money to pay interest on your loans. Are banks really okay with this? They are okay to lend you to pay interest, so to speak?

I'm not sure they look at it like that. But we have -- we could easily have taken up more liquidity than what we have decided to do. So there's plenty of interest from all our core banks and also new banks to give us money,

To give you money. That sounds great.

They expect the fact, Marcus on both...

All right. Thank you for clarifying that.

Our next question comes from Lars Heindorff from SEB.

Head off -- or actually, the update coming up and giving the guidance. I know you have some assumptions behind that, which is, I think, is fine given the uncertainty. But the first question is regarding the disclosure you gave on the June volumes. I'm sure that you have an idea about how things develop, and I just wanted to hear, we can see the numbers for April. Have those numbers in April, is that sort of stabilized at that level? Have you seen any improvement throughout the month? Or how are things looking at the moment?

April has been steadily bad. But we knew that early on in April due to the -- especially on the automotive, there's been some visibility because all factories have announced their closures and when they would reopen, et cetera. Our numbers are particularly hard hit, our Sweden business and our Turkey business, which are relatively automotive-intensive. So it's not reasonable to say that we've seen a gradual improvement through April, but it has been as expected from the beginning of April. And car manufacturers have announced openings that they have also carried through. And we do now see that, for example, Volvo, which, of course, is important to us, have started producing cars again both in Gothenburg and Ghent. So we -- this forecast is based on that April, then maybe some of May is probably the low point in terms of demand and production. So I don't know if that answers your question Lars.

Yes. Yes, it does. That's very fine. And have you been getting any indications from the automotive industry? I know that -- I mean it's not only Volvo that is starting up. I think Volkswagen is starting up as well. Daimler, I don't know if they are a customer of yours, but they are probably not starting up with 100%. It will be sort of a gradual bounce back, you can call it that. I assume that is also what you have assumed in the guidance that you've been giving.

This is what we have in. And in some places, they've started 3-shift production in other places, it's much less. We approach typically 7, 10 days before changes to production schedules because the factories rely on us, of course also being ready, whether we do cross stocking or warehousing or transportation services for them. We have -- all the major car manufacturers in Turkey are our customers and then, of course, select European ones as well.

Okay. And then regarding the passenger division. I hear what you say, and I can read the statements that you have released this morning. But I just want to get kind of -- sort of a feeling for what will happen if something goes wrong and that you're not able sort of to resume operations in August. Because if I recall it correctly then, I think July, August, I don't know about September as well, but at least August, which are the biggest month for you guys in terms of passenger volumes. Would that change the guidance materially if you instead assume that it will resume operations in October, something like that?

We have -- I think I mentioned it briefly, was it to Dan Togo's question. We have -- and thank you for complimenting us on coming out with an outlook. I can say that the passenger business is probably the main reason we do that so that the market can get a view on what -- how that business is impacting us. And with the assumptions we put in now with a very slow start in August, this means that basically, we have said there is no main season this year in passenger. When you get into least September, but thereafter, it is a lower impact that you see. Of course, we are completely -- if we were to be completely shut down, we have some fixed cost, we have some people cost. But in the bigger scheme of things, it's a manageable situation also in relation to this outlook that we have sent out.

Okay. And then regarding the financial situation, which is -- I understand now with the new agreements that you have with the bank that you stated that the covenants are no longer an issue. I'm just -- I sense you were not willing to disclose the new covenants. So I'm going to ask in a different way, which is and hopefully, you can help me. But what I'm aiming for is to get a feeling for -- is this -- is there any time limit on those covenants? I mean, i.e., is this just about this year? Or is there anything built into those agreement that you need to reduce your net debt to EBITDA into '21 at a certain speed or anything like that?

Now that you asked so nicely, I can disclose or we can disclose that in '22, we will be returning to normal in this agreement. So we have sufficient time to have our business recovering, so that we have only asked for a limited period of time for these adjustments to our covenants. There are no restrictions that the bank have put on us to try to reduce debt or anything like that. Those -- we have -- it has been a strict discussion about where the covenant should be.

Okay. And on the debt, do you expect that you will be able to keep the net debt level that you have by the end of the quarter, also by the end of this year? Or do you expect that to increase?

You can always do the math, right. Our EBITDA and our CapEx is provided. So I will leave that for your capable Excel sheets.

The next question comes from Ruairi Cullinane from RBC.

My first question, I was wondering if you'd be able to tell us what your passenger volume guidance translates into in terms of year-on-year decline. Secondly, I was wondering if you have sort of any updated views on what's the right level of leverage in the long term for your business as a result of this? Are you still sort of targeting the 2 to 3x range in the long term? And then finally, I was wondering if there had been any changes beyond what you're communicating in the Baltic Sea in terms of the competitive landscape. I was wondering if there had been any -- how the more passenger-focused ferry operators had responded to the current crisis on your routes.

Excellent questions. Number one, I think we guide -- yes, Karina, do you want to...

Yes. We don't state it explicitly, but I can say that it amounts to somewhere around a decline of more than half, so more than 50% down in passenger volumes when we look across the year.

Yes. And in terms of financial impact, I think we mentioned that 60% or more of the decline from last year's DKK 3.6 billion to DKK 2 billion comes from the passenger activities, not just the 2 passenger routes, but also the activities on the Channel, primarily.

And just to add to that, as you know, Channel is a transportation route more than sort of a mini break holiday-type. So we do expect that to pick up quicker than the other passenger routes.

Ruairi, what was the second question?

Long-term leverage, are you happy with...

Yes. The leverage, exactly, sorry. We have not changed our financial policy towards the Board of the 2 point -- 2 to 3x leverage. We have previously communicated that we have no problem approaching 4 in connection with M&A. Now you can say we can probably expand that to, say, we would not have a problem of being around 4 if we were on a recovery trend from COVID, but we certainly do not want to stay where we are and will be in 2020. So when -- towards the end of '21, we will begin to see levels that could have been contained in our original agreement. And then during '22, I would expect that you would see us approaching the normal levels, maybe slightly above 3. On the Baltics, which is the closest, I guess, we come to a normal Q question. We have seen the least impact from corona. A lot of the passengers that we carry in the Baltics are commuting workers, drivers repositioning for their trucks. And we have seen, being around 10% downturn maybe on passengers, 15 maybe, but no dramatic development on the Baltics, which of course, is not just us. But many of the operators have been doing quite fine throughout the Baltic Sea. We've seen competitors that are heavily passenger-dependent suspending services, which have also taken out freight capacity from the market, which we have then benefited from because we have continued with more or less full capacity on the Baltics. So that's also the background for the relatively strong Q1. And going forward for the year, you will not see Baltic being a main contributor to the downturn as far as we can see at the moment. There are competitors who are struggling a lot, who are heavily depending on passengers, and they are -- competitors more positioned like ourselves with ro-pax services that are doing quite well. I don't know if that sufficiently answers your question.

Yes, that's helpful. thank you.

Our next question comes from Simon Rowe from Janus Henderson.

I just wonder whether you can update on how well the logistics side of the Turkish operation works at the moment. I mean because I know that there's a dynamic between the ferry and overland routes and even whether the borders between Italy and other countries are open. I mean how are you affected by these factors at the moment?

That's -- Simon, good question. We -- Turkey to Italy has been a struggle to keep operations going, especially in the beginning of the outbreak. Italy, obviously, hard hit. We have this special system that we fly drivers from Turkey to Italy and to France. And then they have -- then they can stay doing cabotage driving for some time, and then they have to come back and get exchanged. And we've not been able to continue the flights. The flights from Turkey to Italy have been stopped by Turkish Airlines and other operators. On the other hand, some of the visa regulations that forced the drivers to come back have been suspended by the country, so that they have been allowed to continue working. So there has been a lot of effort put into this. We've looked at alternative ports in Croatia and other places to have us back off if something were to break down. We've been able to keep our people safe in the port, which was our big worry, of course, that if you have a significant outbreak there or in one of our other main ports that could impact a lot of freight services. But we've been able to -- with a lot of contacts with authorities in the relevant countries, to keep everything floating. Overland has been also having some challenges with closed borders and queuing. So it's probably -- it's probably been equally challenging also for overland transportation. When we look at market shares, it looks like we have definitely been able to maintain our market share versus overland. Some of the operational issues that we had due to congestion in 2019 have been at least temporarily solved. So we provide a good service, we believe, to our customers. We've had so big frequencies between Istanbul and Italy that even with the reductions we put in, there's still a very, very attractive service for our customers. So if anything, we have a small hope that Turkey could come out stronger from this crisis as some customers who haven't used ferry before have come to us and have had to use us. Bosch Siemens, for example. So that's the status in Turkey, Simon.

Okay. And one other question. Going back to the passenger business, and you were talking about the assumption that essentially some cross-channel passenger business comes back in the summer. Does that assume that the French border opens? Because I'm not very clear at the moment whether it's actually possible to go to France in a car from the U.K.

You -- that's a good question. Right now, we cannot -- I don't think you should try, unless you can come up with a really good excuse for going there. So this is assuming that the border closings are discontinued. And the counting -- ideas of getting 14 days quarantine will be dropped. So when we say a gradual revert -- resumption of passenger services on the Channel in July, it does imply that you can now travel between those 2 countries without having an essential need.

And have you had any special information on that topic?

No. We, of course, keep close contact with the authorities and you get different signals. But we have nothing to substantiate that other than we can see that there is a big drive among both governments and politicians and industries across Europe to try to open the borders. We saw Germany. They are now opening from Denmark the 15th of May, which will of course, put pressure on Denmark to do something similar. Although that may come a little bit later. And so we think something will start happening over the summer on border openings.

And lastly, can you say something about how much extra you're going to have to pay for this financial headroom?

In absolute numbers, I don't think we have that. We, of course, pay some commitment fees for extra liquidity that we have secured. We have an interest grid also impacts our existing facilities, but it's nothing serious. We have not introduced new -- there's no new grids or anything like introduced. It's based on all -- all is based on the existing agreement.

Thank you. And there appear to be no further audio questions. I'll return the conference to you.

Thank you very much. We -- although DFDS and the whole world have been hard hit by an unprecedented pandemic, we are adopting to the new situation. We remain confident that we, as things normalize, will be strongly positioned to deliver on our pre-COVID-19 strategic priorities and pre-COVID-19 financial ambitions. We thank you for listening in and look forward to the next update probably in August. Have a good day.