DOF Group ASA (DOFG) Earnings Call Transcript & Summary

Good morning, and welcome to the quarter 2 financial presentation for DOF. We will start with a presentation, and after the presentation we open for the Q&A session. Questions must be asked in the Q&A part of the webcast system, so we need questions in writing. We also have a few questions received prior to the webcast, which we will answer in the session after the presentation. So once again, welcome, and we start with the operational or with the highlights in the quarter, please. First, financial highlights in quarter 2. So as you see, we had an operating revenue of NOK 2.5 billion, so up NOK 500 million compared to same quarter last year. Net gain on sale of assets, NOK 32 million compared to NOK 31 million, giving us an EBITDA of NOK 848 million compared to NOK 680 million. Depreciation is NOK 346 million, and leaving then NOK 501 million in EBIT. And as you see, we have high unrealized currency losses in the quarter due to strengthening of U.S. dollar towards NOK and Brazilian reals. So leaving a profit -- or loss, you could say, for the quarter at minus NOK 1.3 billion. As a consequence of the strengthening of U.S. dollar, the NOK amount -- the debt in NOK have increased, so we have a net debt now close to NOK 22 billion. The equity is negative and an equity ratio of minus 7%. A few words on the financial debt restructuring, we will come back to that later in the presentation. But as you all know, we signed a restructuring agreement with the secured lenders and a group of bondholders representing 40% of total outstanding bonds. So the main terms that was agreed -- that has been agreed was a conversion of approximately NOK 6 billion in debt to equity across all major silos within the group, the DOFCON joint venture excluded. The shareholders will -- the holders of the shares will receive 4% of the shares after the conversion. I'll leave it like that. We will, as I said, come back to the restructuring later in the presentation. When we look at the operational highlights, the average utilization of the fleet was 85%, that's up from 80% last year. We have seen a good performance in the Atlantic and Brazil subsea regions. We have seen softer performance in the U.S. and the -- or the North America and the Asia Pacific region. Stable performance from the pipelayer fleet in the joint venture with Technip. In Brazil, in particular, we have had high -- also in quarter 2 high costs from COVID, from the outbreak we had then. We had 10, 11 boats hit by COVID outbreak in quarter 1 and the cost has also been in the P&L in quarter 2. We see high tender activity globally, and we have also seen an improved North Sea spot market for OSVs. We have to mention that, of course, we have had very little exposure to the spot market in quarter 2. The fleet: 55 vessels, 47 owned; 2 vessels sold in the quarter. And by the end of the quarter, the last overlay boat left the lay-up and is now trading in the North Sea spot market. It was an older PSV that left -- was the last boat at the lay-up. The backlog, we have built backlog in quarter 2. I think we have around NOK 4.5 billion in awards in quarter 2. So the backlog now stands at NOK 19 billion by the end of the quarter. For quarter 3 this year, we have secured NOK 2.5 billion in backlog. And as you saw from the previous page, we had a turnover in quarter 2 at NOK 2.5 billion. So the backlog secured for quarter 3 is the same as the turnover in quarter 2. For the remainder of the year, we have NOK 4.5 billion. So meaning we have NOK 2 billion in backlog for quarter 4. After the balance date or just earlier this week, we sent the press release that we have been awarded a large contract in Brazil with a total of $253 million in -- that will then be added to the backlog and meaning that we, at the time we're talking, we have around NOK 21 billion in backlog in the group. So the table below shows how that is distributed. So as we don't mention, '22 is already mentioned, but then we see for '23 we have approx in total between 6 -- close to NOK 6.7 billion in backlog then for '23. So a good foundation for '23. And of course, hopefully, we're going to build a bit more backlog before we start '23. If we look at the next page, please. We have started showing some of the selected contracts and projects we have on lately. On the left-hand side is Hywind Tampen, which we have done all the marine operations, meaning including the project management and engineering. We have done the pre-lay mooring of all the anchor systems and then tow-out and hookup of the floating turbines for Equinor on that project. So that has been going well, and of course, it's a very important reference project for future work within the floating wind market. On the -- we extended here Africa with Technip at -- leaving here and firm until '24. We also did 5 long-term contract in Brazil for Brazilian owned and flagged anchor handlers. Total estimated revenue over the firm period is $330 million. Then we did an extension or a new country in Brazil on what we call a PIDF project, which is an IRM project, inspection project for Petrobras in Brazil, where we deliver the full scope, project management, small part of engineering and then the offshore scope. And the total value of that contract of around $100 million. And we execute that with the prime vessels of Skandi Carla and Geoholm and then we will use another boat for part of the project. So very happy with that extension, and it's been a good the first -- PIDF number one has been a very good project for us. Then finally, we just released a contract for 3 RSVs, which is also working in the IRM market in Brazil for Petrobras, today have been extended -- the existing contract has been extended towards end of the year. And then 2 of the boats will commence a new 3-year contract in January. And the last boat, Skandi Commander, then will commence -- probably we extend it to November then she will work on the PIDF until August '23 and then they start the new 3-year contract. So very happy with that. And also, we see a decent rate increase on the new contract compared to the existing contract. Then we turn the page. And this slide is well known and you have seen it before. It shows some key info on DOF operating from 6 continents; 20 offices globally in all the main oil and gas markets; 55 vessels, as mentioned before; head office in Norway; and around 4,000 employees. 29 subsea boats; 15 anchor handlers, and that is large anchor handlers and of course a lot of them are equipment ROVs, and of course, do quite a bit of work also in the subsea market. 11 PSVs. And then we have one of the world's largest fleet of ROVs and also AUVs. So in total, we have 73 ROVs and AUVs whereof then 2 AUVs. And interesting enough, one of the AUVs will -- on the new RSV contract, one of the AUVs will work permanently on one of the boats for the entire 3-year contract. This is the first time we actually received such a long-term contract for an AUV. We find that very encouraging and look forward to that. If you look at what we do globally, in the North Sea, the PSV fleet mainly operates in the North Sea. And then the anchor handling fleet works in the North Sea and mainly in Brazil. And then globally, we do what you can call subsea services and also some service within renewables globally. So all the way from a lot of IRM contracts, but also then subsea construction and then gradually more SURF work globally. So I'll leave it like that, that page. Then I don't spend too much time on this. But of course, this is very important for us and we focus a lot on ESG globally. And of course, then you see on the bottom on the right-hand side here where you see we get recognition globally for our work in this space where, for instance, Financial Times have -- normally announce European Climate Leader in 2022, where we have a very high standing with Amnesty International and so on. So we are proud of the results we achieved in that space. Then please, next page. Then I'll leave it to our CFO, Hilde Dronen, to do the financial part of the presentation.

Thank you. And I will start on the restructuring. First, with the background, the key principle for the restructuring and then a summary of what it includes. And as you can see here, the background is that the DOF Group's financial position is not sustainable and the equity is lost. And that's why we have negotiated with the group's creditors since June 2020, meaning that we have had standstill arrangement with no payments of interest and installments since June 2020. The target has, of course, been to agree a restructuring solution and to allow the group to continue as going concern. The relevant debt is in DOF ASA, the holding company in the subsidiaries, DOF Rederi, Norskan Offshore Ltda., and the debt in DOF Subsea Group, both secured and unsecured, but excluding the debt in the DOFCON JV. And all these groups has not served normal debt service since June 2020 and it now totals approximately NOK 21 billion. It's also worth mentioning that the vast majority of the NOK 21 billion is based on standstill agreement with no payments of installment and interest. The majority of debt will fall due in the absence of the restructuring. And even though the markets have improved since June 2020, we also see it this quarter the group is still not in position to service its debt without a significant conversion of debt to equity. So then I will go a bit to the key principles of the restructuring. So next slide, please. What is the most important for the restructuring is to keep the group as one group and that is the best way to protect and maximize values, and that is something that the group's creditor have agreed upon. And of course, ensuring a sufficient runway for the group to focus on the operation and improve its market position. One important key principle for the restructuring has also been equal treatment of all the shareholders in DOF ASA. The DOF Subsea Group represent the majority of the asset value and the EBITDA generation of the DOF Group. You will see that further down in the presentation. But just to exemplify it, the DOF Subsea has represented for several quarters more than 70% of the group's EBITDA. Our conversion of the bond debt, which is in DOF Subsea and not in DOF ASA, would result that DOF ASA will lose its ownership in DOF Subsea. Hence, an agreement with DOF Subsea bondholders is required to protect DOF ASA's ownership of DOF Subsea and to continue as going concern. So if we then go to next and the main transactions. It's detailed -- described in the press release and in the presentation attached to the press release. So I will just summarize the main transaction, and that is that approximately NOK 2.5 billion of the DOF Subsea bond will be converted into equity in DOF ASA. The remaining debt of NOK 675 million will stay in DOF Subsea and with peak interest and where the margin has been reduced to 2% from approximately 10%. Approximately NOK 3.2 billion of the DOF Rederi and DOF ASA debt will be converted into equity in DOF ASA. And bear in mind that DOF ASA is a guarantor for the total debt in DOF Rederi as well as the total debt in Norskan Offshore. The DOF ASA guarantee portion of the Norskan Offshore debt will be reduced to approximately 70% of the debt outstanding. And we have also agreed amendments to the Norskan existing loan facility includes softer amortization. Currently, it is 25% and it will be reduced to 15% of normal amortization. DOF Subsea will enter into a syndicated loan facility, the DOF Subsea Group, including soft interest and amortization terms, and the facility matures in January 2026. And DOF Rederi will enter into a new fleet loan including the same soft interest and soft amortization, and the fleet loan matures in January 2026. After the restructuring, the pro forma equity split will be 43% for the lenders, the secured lenders; 53% approximately -- or approximately 43% for the existing lenders, approximately 53% for the bondholders and 4% for the existing shareholders. So then we can summarize the numbers. Next, please. As shown in the highlights, the operational EBITDA for the group is NOK 848 million versus NOK 680 million. And the average utilization is higher than same quarter last year. And the split is 84% in the PSV segment, 82% for the anchor handlers and 86% for the Subsea. And as you see in second quarter '21, 75% of the EBITDA in the group was from the DOF Subsea and 78% is the EBITDA from DOF Subsea this quarter. So just emphasizing again DOF -- and continued ownership in DOF Subsea for DOF ASA is wider. And here you see the split, NOK 648 million from the DOF Subsea and NOK 202 million from DOF Supply, which include DOF Rederi and Norskan. Utilization, 85% for Subsea and 84% for the Supply, respectively. The PSV fleet, we have sold 2 vessels. It's 2 old vessels, a lot of strategic importance for the group. We have reactivated the last vessel in lay-up and the vessel is from third quarter operating in the spot market. We have seen improved utilization versus last year. But this part of the fleet has been a little exposed to the North Sea spot market, meaning that the vessels has mostly been operating on firm contracts in the period. In the anchor handler segment, we have had stable operation in Brazil, but we have suffered from high operational cost already explained due to COVID. A big COVID outbreak on 11 vessels in first quarter has unfortunately impacted the cost also in second quarter. In addition, we have had some cash renewals on 2 vessels and we have started the mobilization on 2 -- on the new contracts within the anchor handler segment. In the North Sea spot market, we have achieved good earnings and better performance compared to last quarter and also stable operation on the one vessels working on a firm contract. But by the end of the quarter, these vessels actually completed planned class renewal. In Subsea, already mentioned, very good performance from the Brazil and the Atlantic regions and variable performance and utilization of fleet in the North America and Asia regions. In the PLSV fleet, we have had good performance, but reduced utilization due to mobilization for one vessel to a new contract, that's Skandi Niteroi, and she is currently operating on a new firm contract with Petrobras. So if you go to the P&L. Operating revenue of NOK 2.5 billion versus NOK 2 billion in first quarter last year and an EBITDA of NOK 848 million versus NOK 680 million. The NOK 32 million in gain from sale of vessels represent the sale of the vessel, the 2 PSVs. And we have also had achieved an approved operational result for this fleet compared to last year even with fewer vessels. In the anchor handler, the operational result is in line with last year, but the margin is down due to high cost in Brazil. And as already mentioned, improved operational result from the vessels in the North Sea. The main reason for increased revenue is from the Subsea segment and especially our PIDF project in Brazil, where we had high activity but also in the Atlantic region and especially related to the Hywind Tampen project and other projects in the North Sea and also an FSV project in West Africa. And already mentioned stable operation from the PLSV fleet. The depreciations is NOK 346 million versus NOK 313 million last year. No impairment this quarter. We have received updated broker estimates for our fleet and they have slightly increased, and on average, just below 2% for the entire fleet. The financial costs has increased versus last year. And this includes paid interest and also a capitalized interest due to standstill arrangements. But the main loss this quarter is an unrealized loss of NOK 1.5 billion due to significant strengthening U.S. dollar to NOK and BRL, which was also mentioned in our first quarter presentation. So if you go to the segments. And here, you see the result for the 3 segments, the PSV, an operating result of NOK 53 million versus NOK 12 million, and that includes the gain from sale of 2 vessels. On the anchor handler, it's NOK 122 million and NOK 129 million. But here, you see that the margin has been reduced due to high costs on -- especially for the fleet in Brazil. Looking at the Subsea, you can see that a significant increase in revenue from NOK 2 billion to NOK 1.6 billion and that gives a depreciation of NOK 673 million versus NOK 539 million, and the margin is in line of the previous year due to more project activity versus time charter activity. So if we go to next, these are the DOF Subsea segment. So DOF Subsea report 2 segments, 1 for Subsea IMR project and 1 from long-term chartering. The long-term chartering segment include the 7 PLSVs and 1 vessel, diving vessel, working on a long-term contract in South America. If we start on the Subsea project, we have achieved a revenue of close to NOK 1.5 billion and an EBITDA of NOK 300 million and a 20% in margin, where particularly 2 regions have performed. The backlog for this part of the business is NOK 6.5 billion by end of the quarter. It's close to 700 employees, and the number of employees in this segment has increased during the quarter due to increased activity. And it includes 16 vessels in operation, of which 2 are hired in from external parties. And on the long term, it's NOK 483 million in revenues with a 72% margin gives NOK 347 million in EBITDA, and the backlog is NOK 5.3 billion, and it represents 8 vessels in operation in second quarter. Next, please. If you look at the balance and if you compare the balance from last quarter and this quarter, you can see that the long-term assets, meaning vessels and ROVs mainly, has increased. And the main reason for that is strengthening U.S. dollar to NOK and BRL. So the FX effect on the tangible assets is mainly -- is close to NOK 1 billion and it's depreciated by NOK 346 million. And we have -- there are CapEx and others, mainly class dockings and some conversion of NOK 244 million. The deferred taxes is mainly related to the DOFCON JV. So that gives total current assets, noncurrent assets, of NOK 19.5 billion versus NOK 18.6 million. The receivables has increased from NOK 2.7 billion to NOK 3.1 billion and reflects a high activity in some of the regions. The cash is NOK 2.2 billion, which is more or less the same or slightly lower than first quarter even though we have had standstill on interest and installments for the majority of the secured and unsecured debt. On the equity, it's negative from NOK 780 million to NOK 1.8 billion due to a weak result this quarter. The noncurrent interesting-bearing debt mainly or only represent the DOFCON JV liabilities and a few leases in DOF Subsea. The current portion of that of close to NOK 21 billion represent the holding debt in DOF ASA of up to NOK 1.3 billion. It includes the DOF Subsea secured and unsecured debt of NOK 10.5 billion. It includes DOF Rederi secured debt of NOK 3.4 billion. And it includes Norskan secured debt of NOK 5.5 billion. And the reason, as already explained, why this is current is because we have negotiated a restructuring alternative for the group, and the group has not been able to service this debt with normal amortization. And the majority of this debt is also under the standstill arrangement. So if you go to next, on the cash flow. The cash flow achieved this quarter versus last quarter is NOK 671 million versus NOK 395 million. And the main reason for an improved cash flow is less working capital tied up in the quarter, which -- and the working capital tied up in second quarter '21 was significant. The interest paid is NOK 110 million, but this doesn't -- that doesn't represent the actual cost. And the capitalized cost this quarter is approximately NOK 328 million and that is due to the standstill agreements. Sale of the tangible assets are the sale of 2 PSVs. Purchase of tangible assets are mainly class dockings, but there are some costs related to conversion due to new contracts. Payment of borrowings are NOK 582 million, of which approximately NOK 100 million comes from the DOFCON JV. We have some minor debt service in Norskan and we have some debt service in DOF Subsea and that also include nothing of restricted cash on certain facilities. The sale of the vessels of NOK 76 million, the proceeds from the sale has gone to pay down the debt. The restricted cash by end of June is approximately NOK 180 million. So if we go to next, this is what we normally show and here you see the quarterly EBITDA. And it's, of course, very positive to see that the EBITDA performance is increasing. And it's mainly an increased activity within project activity, which -- where we have normally a lower margin than on the time charter activity. But it's also important to see that the equity is now negative with NOK 1.8 billion. And the current debt has increased the short-term debt has increased from NOK 4.6 billion to NOK 23 billion in total during these quarters, the net interest-bearing debt of close to NOK 22 billion. So if you go to next, these are the key financials. And here, you can see that revenue has increased, the EBITDA the last 12 months is slightly above NOK 3 billion. And the backlog, as reported, is approximately NOK 19 billion and does not include contracts awarded after balance sheet. Then I give the word to Mons.

Thank you. A few slides on the market and then finally the outlook. So I don't read all of this, it's just a few highlights is that we expect both offshore CapEx and offshore OpEx to increase going forward. And then also on the -- in the wind market -- wind turbines and substation also we expect an increase in '22, but then a bit lower in '23 and '24 and then an uptick in '25. Of course, the full renewable market is, especially the fixed -- bottom-fixed market is only -- we are only a niche player in that in certain segments. So more relevant for us is the offshore floating market. And there, of course, we expect that market to, after '25, to become a more important part of the group's activities. And as mentioned, we have been able now with Hywind Tampen, which is so far the world's largest float -- offshore floating wind farm. On the next page, it shows demand predicted by the Offshore Vessel Report in quarter 2 shows expected demand in oil and gas and wind. And there, of course, we see -- we expected a growth both in oil and gas and in wind comparing '23 with '22. On the next page, it's a split then within the different vessel types, anchor handlers, PSVs and so on. And also here, we see a positive trend, expected positive trend in all -- on all vessel types comparing '23 with '22. But then we also see a dip then comparing '24 with '23. On the next one, it's a few comment on the outlook. And the outlook is focused now on the next quarter, as we normally do. First a bit on the markets and then finally some on the financial side. In the PSV market, of course, it's been a fairly strong few months in the summer with a strong market, both in the U.K. and in Norway. What we have seen over the last few weeks is that the market, especially in the U.K. sector, has turned softer. And we expect then a softer market in quarter 3 compared to the strong market we saw in part of quarter 2. On the anchor handling side, it's still high activity in Brazil. It was a good spot market during summer, especially in June, July. And -- but what we see now is that the good market has been followed by a much softer market. And of course, rate levels is -- has fallen lot, so last pictures is below GBP 20,000 a day. And we expect -- for quarter 3, we expect a softer market and a more volatile market. So we expect lower earnings from the spot-exposed anchor handlers in the North Sea. On the Subsea side, we have had high activity, as mentioned in Brazil and at the Atlantic regions. We expect that to continue in quarter 3. The activities we have had in the North America and APAC region have been mixed in first half, and we do expect increased activity on our own operations in quarter 3 compared to first half. As mentioned, the group's backlog so far for quarter 3 is NOK 2.5 billion. And as you all know, you can remember that's the same as the turnover we had in quarter 2. So it's a very high backlog for quarter 3. And then for the last quarter, it's NOK 2 billion in backlog today. So you could say a very high backlog then for remainder of the year in the DOF Group. Looking at what numbers we expect. We do expect that the operational EBITDA in quarter 3 to be in line or slightly better than what we saw in quarter 2. Then some final comments on the financials. As we all know, the restructuring agreement has been signed in June with the secured lenders and 40% of the bondholders. The restructuring, as we know, is necessary to secure a sufficient runway and a sustainable balance sheet for the group and is expected to be closed in quarter 4. Then that was the last page of the presentation. And then we move to the Q&A session.

And we will start with some questions we have received, the frequently asked questions we have received before the webcast. And as mentioned, the question can be asked in the webcast system so we will do them after we have done the pre-asked questions. So then I'll start with the first question we have got before the webcast, and that is how an increase in book value of ships and book equity impact restructuring. Book values and book equity does not impact the restructuring. The restructuring is necessary because the group has and has had insufficient cash flow to service debt, and most of the debt will fall due absent the restructuring. The group has a total debt of approx NOK 25 billion -- NOK 21 billion, excluding the DOFCON joint venture. The vast majority is passed its stated maturity date, and absent the restructuring, must be repaid immediately. Question number two, can DOF refinance on ordinary market terms without the restructuring? It is not possible for the group to refinance approx NOK 25 billion in bank or the bond market. Our existing debt has been sold at significant discount to face value, leaving no rationale for banks or investor buy a new debt at full price. Under the restructuring, as Hilde has mentioned in the presentation, the reinstated debt will have better terms. [ Remind ] the financial covenants, lower interest rate, [indiscernible] margin and lower amortization than market terms. New loans and market terms would require considerable new equity, which is unlikely available. It's also worth mentioning that, of course, a lot of the banks that have financed this industry have communicated that they will no longer finance and enter into new loans in our industry. Moving to question number three. We have a question, why can we not revert to the 2019 restructuring proposal? The 2019 refinancing proposal was presented before the 2020 market downturn. And it also only covered DOF Subsea. It did not include DOF ASA, DOF Rederi or Norskan. New question, number four. What support do you have for the restructuring agreement? The agreement is supported by, one, the Board of Directors; two, the largest shareholders, the largest shareholder Møgster Offshore and primary [ insiders ] representing approximately [ 25% ] of the shares. All secure lenders, banks and all bondholders are involved in the negotiation, representing approx 40% of all bonds. Question 5, what will happen with a no in the EGM, in Norwegian then [Foreign Language]. The answer is it is agreed with lenders that the Board shall explore if there are any or alternative realistic solutions available to avoid bankruptcy proceedings. But as things stand, it is not considered likely that any search for an alternative will provide a better solution for shareholders than the agreement we have on the table. It is further likely that any alternative solution will be detrimental to the shareholders. Then we have a question, what is the new debt repayment structure? And here, we refer to as described in more detail in the presentation attached to the press release we sent in June regarding the restructuring. And as mentioned, the terms are significantly better than the current terms of the loans. So we please kindly ask you to study the debt presentation attached to the press release. Then question number seven, why not use cash from DOFCON to reduce debt in DOF Rederi? We also today said that any payments from DOFCON joint venture are paid to DOF Subsea AS. And bondholders in DOF Subsea will naturally not accept that such proceeds or distribute to any other companies, also the DOF Subsea Group, unless the bond debt is repaid first. Further, the secured lenders of DOF Subsea will not approve of using cash to repay bond debt unless their secured debt, which is guaranteed, is repaid first. Then question number eight, how much free cash does DOF Group have? And as Hilde showed when she went through the financials and the balance sheet, as of 30 June 30 '22, our cash position was NOK 1.8 billion across the group, which, of course, is significantly below the total debt of approx NOK 25 billion that will fall due absent the refinancing. Then the final pre-asked question is does any of DOF's top management own bonds or bank debt? And the answer to that is no. So then, I don't know, Hilde, if there are any questions.

No. Yes. But let me just sum up the key messages and your own source, Mons. The point is that the DOF Group has significant debt with a current value of NOK 21 billion, of which the majority will fall due absent the restructuring. And the group is not able to pay such debt. And as already mentioned by Mons, the available refinancing, financing resources have been very limited and are also decreasing going forward. And that is due to less banks willing to have exposure in the old industry, which is an additional challenge for the group. The group, therefore, has to restructure a significant amount of its debt and to reduce the debt level. The equity to require -- the equity required to refinance the group without significant debt conversion is not available. Consequently, the proposed restructuring is considered to be only possibility for DOF ASA to continue as going concern and avoid bankruptcy. Pursuant to the proposed restructure, the shareholders will retain 4% even if the equity is lost as long as the group is not in a position to pay its debt and the book equity is negative by minus NOK 1.8 billion. And if the restructure is rejected by the shareholders in the EGM, that will be detrimental for the existing shareholders and the likelihood for leaving with no value is high. So we have received some questions.

Yes, yes. So I see them myself here, yes. So perhaps the first question is to your knowledge as the current main shareholder holds position in DOF's debt facility of bonds. And it's not public who owns the bonds. And so really, we have no comment to that question really.

We don't know.

We don't know, yes. So you have to ask the main shareholder about that. Next, how much of your restructuring costs have already been paid? And what is the total cost estimate? I don't know, Hilde, if we...

We don't have the exact number on that and that's something we have to come back to. But we -- it's a significant cost, that's what I can say. But I don't have the exact number.

Then there is a question. Is it correct that bondholder would get 53% from converting NOK 2.5 billion of debt plus senior lenders 43% from converting NOK 3.2 billion. Hilde, I guess you have already answered that question, yes, in the presentation.