Klaveness Combination Carriers ASA (KCC) Q4 FY2025 Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Klaveness Combination Carriers Q4 2025 Report Presentation. You may have also noticed that, we published our annual report for 2025 today as well. So this presentation will cover some numbers from 2025, but it will primarily focus on the Q4 findings or the Q4 results. So today, first up on the agenda will be CEO, Engebret Dahm, who will go through a brief summary of the report, followed by CFO and Deputy CEO, Liv Dyrnes, who will walk you through the financials, as well as the sustainability performance for Q4. Engebret will then conclude with the market update and the future outlook for KCC in the coming months. So as usual, we will have an option for you to submit questions at the very end. So we have a new way of doing the -- of submitting your questions through a chat in case it looks a little bit different from the last time. [Operator Instructions] One last thing that, is new is that, for Investor Relations, we are now sending out all of our updates through a platform called MFN. So it may look a little bit different than what you are used to. So with that, I think we can go ahead and get started. Engebret, you're up.

Thank you, Haley, and good morning, everyone. Allow me to start with a short summary of 2025, which taking everything into account was a good year for KCC, a strong second half, offsetting partly a weak first half. This slide presents the many key events for KCC in 2025. I would like you to have 3 main takeaways. Firstly, we have used 2025 to expand the CLEANBU trading pattern and customer base, making the business more resilient to geopolitical risks that we experienced in 2025. Secondly, we have made the CABU business much stronger by increasing our market share in our important trades to Australia and also starting the work to diversify the CABU trading to more a global business. And thirdly, we stay committed to considerably improving our environmental footprint and maintain full transparency in our progress despite, as you know, all headwinds the green agenda is facing in shipping. This positive development had not been possible without the stellar performance of the KCC team, and I would like to use the opportunity to thank each and every one of my colleagues for their support and their hard work in 2025. Over to the fourth quarter. So the fourth quarter was an overall positive quarter for KCC with improving trading efficiency, very strong operational performance, as well as good support from the product tanker and dry bulk market. We ended 2025 with the highest quarterly time charter earnings of the year, ending at $29,333 per day, which is $400 higher than in the third quarter. And it ended in the middle of the guiding range we gave back when we presented the third quarter in October. Both the EBITDA and earnings after tax, however, came in slightly lower due to double number of off-hire days following docking of 3 vessels in the fourth quarter, while we had less than 1 docking in the third quarter. EBITDA ended at $22.6 million in the fourth quarter versus $24 million in the third quarter and earnings after tax ended at $10.4 million in the fourth quarter against $12 million in the third quarter. The BOD decided to pay a dividend of $0.08 per share in total of $4.76 million for the fourth quarter. This is $0.04 lower than in the third quarter, reflecting a lower adjusted cash flow to equity due to the mentioned high number of vessel dockings. But the KCC's dividend policy remains unchanged. Quarterly dividends shall equate to minimum 80% of adjusted cash flow, and the payout ratio in the fourth quarter was 89% of adjusted cash flow to equity. In 2025, we have paid $17.4 million in dividends in total $0.85 per share, corresponding to a payout ratio of 87% of adjusted cash flow. In addition, the company paid out $6.6 million in share buybacks. As mentioned in the third quarter, we had a larger-than-normal docking activity in 2025, with 7 vessels being docked. As a comparison, we will dock 4 ships in 2026 that everything else being equal, will improve the dividend capacity of the company in 2026. So let's take a closer look at the market development and KCC's commercial performance for the fourth quarter. As been widely reported, the crude tanker market experienced a significant spike in the fourth quarter, which also had positive impact on the product tanker market. This development has continued with positive momentum into 2026. But looking at the part of the quarter impacting the fourth quarter earnings from June to early December, the average product tanker spot earnings was, in fact, lower than the second and the third quarter, especially October as the blue line shows, was relatively weak. The market improved from the last weeks of November and through December, with sustained strength into 2026. On the dry bulk side, we have had the strongest second half market since the dry bulk boom in 2021, '22. The dry bulk market remained firm through the quarter at $15,000 to $17,000 per day for Kamsarmax against around $10,000 per day in the first half. We had a shorter and more modest seasonal downturn starting in mid-December and recovering already in mid-January, making the start of 2022 the best -- '26, the best since 2022. The CABU had another strong quarter in the fourth quarter, with close to perfect trading. The CABU fleet was fully employed in trading to and from Australia with 96% of the CABU days employed in combi trading. With a tight schedule, and it was necessary to ballast vessel, resulting in marginally higher ballast than the 2 previous quarters, which also increased the share of the CABU days employed in the tanker market. Time charter earnings ended at $31,840, close to $1,800 higher than in the third quarter. The CABU earnings were supported by continued strong caustic soda earnings on the floating rate contracts, supported by the strong MR tanker market. And dry bulk earnings also improved considerably ending fourth quarter 15% higher than the third quarter. The CLEANBUs had a reasonably good quarter with good progress in trading efficiency, freight pricing, and also business development. In the fourth quarter, the CLEANBUs maintained a high share of the capacity trading west of Suez, around 84%, predominantly in the long-haul trades, including triangular trades, where the share in tanker trading ended at around 59%. With this efficient trading, 87% of the capacity was in combination trade with a low ballast of 15%. The time charter earnings came in at $26,851 per day, which is close to $900 lower than in the third quarter despite improving dry bulk earnings. The time charter earnings of the CLEANBUs reflect 2 factors. Firstly, a large part of the fixtures we made in the quarter were made in October, which was before the market started to improve. And secondly, when we refix the ships in December, many of the trading days were not recorded into reporting for the fourth quarter due to the IFRS rules, having a negative impact of around $1,300 per day in the quarter. We have improved, progressed, as mentioned, well on the business development, with making the first shipments, successful shipments for ExxonMobil and also increasing our activity in trades for shipment of naphtha into Asia. So by that, I leave over to Liv.

Yes. Thank you, Engebret, and good morning, everyone. So let's start with Q4 before I will also present some more details related to 2025 in total. Let's see, here we go. So this is the EBITDA bridge from Q3 to Q4. EBITDA for Q4 ended at $22.6 million, a decline of 6% from last quarter. The CABU TCE rate increased by $1,800 per day, while the CLEANBU TCE rates declined by approximately $900 per day. And as Engebret mentioned, this was the fleet average TCE earnings per day, they were the highest quarter so far in -- or for 2025. But more importantly, and as we said in the Q3 presentation as well, we had considerably dry docking days in Q4. So the number of off-hire days were twice as high in Q4 compared to Q3, and this had a negative Q-on-Q effect of $2.2 million. Other income mainly relates to settlement of a loss of fire insurance claim from 2024, where we had a long dry docking stay. Operating expenses, I'll come back to on the next slide. Administrative expenses increased by $0.4 million. It's partly prioritization effects, and it's partly due to a very high activity level in Q4. So let's have a look at operating expenses. For Q4, the OpEx increased by $0.7 million from Q3. But I think more importantly, we should look at the operating expenses for 2025 compared to 2024. This was actually down year-on-year. As you can see in the left graph here, operating expenses per day for the CABUs were flat year-on-year and slightly down for the CLEANBUs 2%. While we saw an increase in crewing expenses as we expected, and this accounts for 45% to 50% of operating expenses, we saw a decline, especially related to costs for spare parts and provisions. In 2026, we so far expect normal development, underlying development in operating expenses. But it's worth mentioning that we will have operating expenses for the newbuilds that occur before the delivery of the newbuilds. And hence, we will have expenses without operating days, sorry, which will impact the OpEx per day negatively. Then the full income statement for Q4. Depreciation increased by 4%, and this is driven by the heavy dry docking program in Q4 and earlier in the year as well. Net financial items improved by approximately 4%, but in real terms, only $0.1 million. Profit after tax, $10.4 million, close to 14% down from last quarter. This corresponds to return on equity -- return on capital employed of 9% and return on equity of 11% on an annualized basis for Q4. Engebret already mentioned the $0.08 per share dividend, 90% of the adjusted cash flow to equity and 45% of profit after tax. Then over to the EBITDA bridge for 2025. As you can see here, EBITDA amounted to $79.8 million, a reduction of 37%. And what stands out here is, of course, the CABU and CLEANBU TCE rates. The CLEANBU TCE rates were down by $13,000 per day and the CABU down by $5,000 per day. This is mainly driven by a weaker product tanker market. MR rates were down $8,000 per day and LR1 rates down $13,000 per day. For the CLEANBUs, this also reflects somewhat less optimal trading, partly impacted by the uncertainty related to the introduction of the USTR port fees that were later postponed as well as combination carriers receiving exemption. For the CLEANBUs, we also experienced somewhat less trading in wet trades and in total as well as impacted by somewhat weaker dry bulk markets. However, I think it's worth emphasizing that while the decline is quite large, especially for the CLEANBUs, it still reflects a strong underlying product tanker market, but it came down from incredibly high levels in 2024. I think this also illustrates that the CABU segment is less volatile than the CLEANBUs, partly due to the contract portfolio as well as the very efficient trading that we have in the patterns to and from Australia. I will not go into the details for the other items here as they are minor compared to the TCE rate development. But if we then have a look at the income statement for the year in full as well, you will see the same trend for depreciation here as in Q4. Depreciation increased by 14%, reflected by the heavy dry-docking program in '25, as well as quite some heavy dry dockings in '24 as well. Net financial items improved by more than 20%. It's partly driven by currency effects, but the main effect here is capitalization of part of the interest cost on the new buildings in total, $2.5 million for 2025. Profit after tax, $33.4 million, a decline of 60% from last year. Return on capital employed, 7% and return on equity, 9%. The dividend per share in total for the year, $0.285. This reflects adjusted cash flow to equity payout of 87% and slightly above 50% of profit after tax. Next year, we will probably see the payout ratio and the percentage of adjusted cash flow to equity being more similar as we have less dry dockings and somewhat higher depreciations. The balance sheet. Here, we see total assets increased by $22 million from last quarter until the end of the year and ended at $665 million. The main changes relate to vessels and newbuilding contracts driven by dry dockings as well as yard payments. On the equity and liabilities side of the balance sheet, you will see that, equity increased by $3.2 million, while total interest-bearing debt increased by approximately $17 million, partly due to the refinancing of the CABU facility and upsizing of this facility as well as drawdown on revolving credit facilities. This resulted in an equity ratio of 55% at year-end, down from 56% last quarter. And then over to the last slide when it comes to the financials, the cash flow. The cash at year-end was $49.7 million, down $0.6 million from the end of last quarter and available long-term liquidity ended at $117.7 million, a decline of $9.4 million. This reflects the positive contribution from EBITDA of $22.7 million. We had a slight negative impact of working capital changes, but the main effect here is definitely capital expenditures that amounted to $27.4 million for the quarter. Debt service within the normal range and then RCF and refinancing I already mentioned. And in total, for the cash flow from the finance activities, a negative impact of $7.1 million related to Q3 dividends paid in Q4. But still a very strong cash and available long-term liquidity position, slightly decreasing as expected due to the new build investments. Then lastly, some short comments related to sustainability. With the updated strategy presented in December last year, KCC reaffirmed our ambition to decarbonize our activities. So in 2025, we were already more than 30% better when it comes to the carbon intensity, the EEOI compared to the standard vessels in our trades. And we strongly believe that the value of this competitive advantage will increase going forward. However, we have as well learned quite a lot over the last years. And based on this, we have revised our targets and trajectory somewhat. The base case for 2030 is now -- for the base case target is 5.1. That's a reduction of 16% compared to 2025. And this is mainly based on improved trading and operational efficiency, as well as some improvements in the energy efficiency area. Then we as well have included a more stretched case, which is at 4.4 in 2030. That's close to a 30% reduction from 2025. This includes heavier investments in energy efficiency measures as well as start using biofuels as part of the fuel mix. However, this requires support from customers and regulators as well. In comparison, the 4.4 used to be 4.1 in the old trajectory. So we still have large or high ambitions, but we have to adjust to realities as well. That being said, you will here see a quite strong development in 2025. EEOI for Q4 ended at 5.8. That's the best ever quarterly EEOI performance. And in total for the year, 6.1. This was off a target for the year, but it was a reduction of close to 8% from last year. The Q4 performance is driven by the -- a broad range of different underlying drivers that had a positive impact in Q4. You will see 3 of them to the right here, we will see that the time spent sailing above -- sorry, below 13 knots reached 74%, which is a strong number. The underlying technical fuel performance of the vessel reached 12% better than the baseline and then as well the laden or the weight while sailing laden, the cargo weight was as well at historically strong levels. So I continue to repeat efforts pay off. It's going in the right direction, but we will see some volatility from quarter-to-quarter here as well. Engebret, then over to you again.

Thank you, Liv. So let's continue to look at the product tanker and dry bulk markets, which despite many analysts cautious estimations, continue to overperform expectations. We continue to appreciate the considerable risks in both markets, partly driven by geopolitical risks. For instance, in the dry market, we have the Chinese buying of grains. In the tanker market, we have, for instance, the sanctions on the shadow fleet. We still maintain a cautious optimistic expectations for both markets. So let's start off with the product tanker market. Looking here on the growth in ton-mile demand that had a very strong performance in the tanker market in the second half of the year, as you see from the blue line. This was mainly driven by a strong development in the crude tanker market with a bit softer development for product tankers. This continued with strong momentum into 2026, as you see on the dot to the left. And surprisingly, based on preliminary figures, it seems that the product tankers have performed better than the crude tankers in the start of 2026. According to Rystad, the total liquids supply growth will end up at 3.4 million barrels per day in 2026 versus 2025, with supply growth mainly tilted to the west, while OPEC+ is likely to maintain production quotas and possibly increase slightly that production. Expected growth in demand is limited to 0.85 million barrels per day, which leaves increasing levels of inventories buildup that is expected in the year, which will be positive for the ton-mile development in the tanker market. Also, the outlook for production at refineries are positive, where there is expected 0.75% increased refinery runs in 2026 versus 2025, which is mainly in Asia, while demand -- increased demand will be partly in Europe, which will support growth in long-haul distances in 2026. The supply growth of product tankers increased in 2025 and will likely accelerate further in 2026. But as we have seen in 2025, the strong growth in the crude trade are likely to absorb a big part of it. Looking here at the graph, we see that in 2025, the LR2 tanker fleet increased by more than 50 ships. However, during the year, the actual number of ships trading clean reduced by 12, meaning that the crude trade absorbed more than the full fleet growth in the product tanker market. Looking at the biggest potential source of demand growth for compliant tankers are the increasingly stricter sanctions on the shadow fleet from both U.S. and Europe. According to Clarksons, around 24% of the tanker fleet are either sanctioned or are in some way associated with an entity being sanctioned. In 2026, this has resulted in a considerable drop in volumes shipped in the main trades for sanctioned tankers. The graph shows the large drop in cargoes shipped on sanctioned tankers from Russia to India and China and from Iran to China. This comes on the top of the recent changes happening in Venezuela, where sanctioned tankers will lose market share. All this development is likely to support the growth in demand for compliant, or what we call mainstream tankers and which can increase growth by -- demand growth for compliant tankers by 3% to 5% in 2026 according to estimates. Turning over to the dry market. The efficiency of the dry bulk fleet is reducing as the fleet is aging, which is also the case for tankers. As the graph shows, when vessels turn 15 years, an increasing share of days are used in dock, and also waiting time for older ships increase. The average age for the dry bulk fleet increases to 13 years in 2026 and increasing share as much as 9% of the fleet turns 15 years and will go through the 15-year special survey. So this has a positive effect on the effective fleet growth. Looking on the graph there, with dry bulk deliveries accounting for close to 4% of the dry bulk fleet, even with the modest expected scrapping, the lower efficiency and productivity and transport work of the older fleet will, according to Klaveness' research estimates, lead to as low supply growth as 2.4% in 2026, which looks easily to be absorbed by expected demand growth. The main growth story on the dry bulk market in '26 is the long-haul trades from Atlantic to the Pacific, the so-called front-haul trades, where we expect a strong increase in both bauxite and iron ore exports out of Guinea, which will imply a solid ton-mile growth for Capesize. As has been the case in every cycle, a strong Capesize market spills over into the Panamax market. We have been hearing about Capesize shipments being split into 2 Panamax shipments for iron ore trades from Brazil to Middle East. And we also see that, the Panamaxes get an increasing share of coal shipments as the graph to the right shows. According to Klaveness Research, we can see a 3% to 5% increase in Panamax coal shipments for 2026 and '27, even if there are 0 growth of tonne of coal shipments in this period. And when we talk about demand growth for Panamaxes, that's also mentioned the tightening additional grain demand expected in '26 due to a very, very strong Brazilian soya bean crop projected this year. So in the final part of the presentation, let me set the commercial outlook in the context of the updated strategy, which we presented at the Capital Market Day in December. Before I finally end by going through the guiding for the first quarter. So let's look on the CABUs and the 4 main targets for the CABUs for the next 5 years is partly to further strengthen the business we have in Australia. We shall diversify the CABU trading to new regions, making CABU a global business. And thirdly, we will -- as we expand the CABU and CLEANBU business, we shall improve the synergies between the CABUs and the CLEANBUs. And if we succeed with all this, we have a very good basis for continuing the renewal of the CABU fleet and possibly grow the CABU fleet going forward. As normal during the fourth quarter every year, we negotiate the contract renewals for shipment of caustic soda to Australia. We last year experienced a solid growth in demand for CABUs, partly driven by increasing number of Chinese ports being able to load the CABUs and also to utilize the full shipment capacity of the CABUs, which are between 30% to 50% higher than the competing MRs. We also had positive effects of the ongoing fleet renewal, which increases the competitiveness of our business against the standard MRs, which we compete against. So as the graph shows, we ended with a substantially increasing our market share in the caustic soda trade to Australia. We booked around 10 more cargoes for 2026 than we did in 2025, which is a more than 20% increase. This secures the full utilization of the increasing cargo fleet in trades to Australia in 2026, where we take delivery of 3 newbuilds and we will, over the year, take out 2 ships of the older ships in the trade. We will also have contract backing for supporting the CLEANBU trade into Australia. And in total, we look well set to continue to keep -- maintain a high market share in these important trades for us into Australia. We took delivery of the first third-generation CABU vessels, the Balder last Friday. And we will start loading the first caustic soda cargo to Australia on that ship coming Sunday. As mentioned, these CABU vessels strengthens our competitiveness and increasingly create value for our customers. Comparing it to the outgoing Cargo 1 vessels, the vessels have between 7% to 15% larger carrying capacity depending on the depth in the port we are servicing. The higher cargo intake for our caustic soda customers implies lower freight costs, and it's a win-win also in respect to our profitability. The new vessels will have 20% to 25% improved fuel efficiency, which are coming from extensive energy efficiency measures installed, and also improved design across the ship. The improved fuel efficiency and the higher size in total reduces the carbon footprint by 25% to 30%, which continues to be an important factor for our customers in Australia. And in totality, these ships have a 20% higher carrying capacity -- earnings capacity, sorry, than the older ships that are gradually being phased out. So in total, the new ships that we welcome to our fleet is something that will substantially support our business in '26. We reported back in December, the conclusion of a 32 months contract with 70% hydro-owned Alunorte for shipment of caustic soda from U.S. Gulf to Brazil. In mid-December, we completed the 25-year docking and life extension program for our oldest ship MV Barcarena and we started the positioning of the vessel via Australia and South Africa into the U.S. Gulf. As planned, this positioning is expensive due to long ballast and it's part of the investment that we do in order to get this trade started. It will have a negative effect on the CABU earnings in the first quarter. But for the second quarter, it will have solid positive results, which will although in the current market will be at lower levels than what the CABUs achieved in the trade to Australia. The reintroduction of the CABUs into the trade in Brazil represents an important diversification of the CABUs and is a part of our plan to make the CABUs a global business over the next 5 years. So putting everything into context in terms of the contract booking, we for the first quarter, we are close to fully booked. We have booked 85% of the CABU days and 77% of the CLEANBU days for the first quarter. So let's then concentrate on the 3 last quarter of the year. On the dry bulk side, as the graph green here is showing, we have deliberately a limited contract booking for the year. We rely on repeat customers, where we often are the preferred carrier. We renewed this autumn the 3-year floating rate contract with aluminum of Bahrain for shipment of alumina from Australia to Middle East. And this accounts for around 7% of our dry bulk capacity. At the moment, we have no fixed rate coverage in the dry bulk market. We have an FFA that we concluded in December for the 3 last quarter of the year, accounting for around 12% of the capacity. We expect to add 1 fixed rate contract and 1 floating rate contract over the next weeks and to gradually build the contract book over 2026. On the tanker side, however, around 40% fixed rate part of the caustic soda contracts booked to Australia and adding the fixed rate contract of Barcarena with Alunorte into Brazil adds up to around 29% fixed rate coverage of the total tanker capacity of the KCC fleet for the last 3 quarters of 2026. And if you add the floating rate contracts, KCC has around 56% contract backlog relative to the total capacity in 2026. So let's then just conclude on the outlook and the guiding for the first quarter, with a very strong product tanker market in the start of 2026. The start also for KCC earnings is very strong. And the first quarter is expected to be the strongest quarter for KCC since the third quarter of 2024. The CABUs continued their solid performance, with especially healthy earnings on the floating rate contracts into Australia, but with somewhat weaker dry bulk earnings given the seasonal market downturn in December and first part of January. As mentioned, the positioning voyage of Barcarena into the U.S. Gulf will have a temporary negative effect on the CABU earnings, which we estimate around $2,400 per day compared to the expected performance for the 3 last quarters of the year. So if you add this element, we are at around the same earnings as in the fourth quarter, but the guiding is between $28,500 and $29,500 per day for the CABUs. We are very pleased to see the positive effects of the strong product tanker market but also post effects of good business development in the CLEANBU guiding for the first quarter, ending up at $34,500 to $36,500 per day, a solid improvement compared to the second half of 2025. We capitalize on the strong product tanker market by successfully replacing dry bulk cargoes, with shipments of naphtha from U.S. Gulf into Asia. And this again illustrates the unique trading flexibility of our CLEANBUs, where we can optimize the fleet and employment according to the relative strength of the different markets we address. The share of tanker trading for the CLEANBUs is estimated to increase from 59% in the fourth quarter to around 85% in the first quarter. The outlook for 2026 with the current market prospects and contract bookings looks very strong. And we have already started to add well-paying tanker cargoes into the second quarter of the year. We are mindful that there are considerable risks to both the dry bulk and the product tanker market. But respectively, we are confident that KCC looks likely to deliver on the promised value creation versus standard markets, a higher time charter earnings and a lower volatility of the shipping cycle, and we target to continue to give the best risk-adjusted return in dry bulk and tanker shipping. So that summarized the presentation, and we are ready for questions.

Yes. Thank you so much for a great presentation, Liv and Engebret. We have some questions that have come through. The first one I'm going to ask is, how much should we expect the dry-docking schedule for Q1 to impact Q1 dividends? I think Liv is going to take this one.

So as mentioned, I think we had 145 dry docking days in Q4 or off-hire days. And the estimation for Q1 is 70 off-hire days. The on-hire days will increase or is estimated to increase by 87 days.

Okay. Thank you. We have actually quite a few questions that have come through regarding the first-generation CABUs. So what is the plan for the first-generation CABU? Is it likely to see longer-term contracts for these as well?

Yes, of course, we are joking with this that, we believe in eternal life. But of course, we -- it has to make sense -- the life extension has to make sense compared to the alternatives, which with the quality or technical quality of these vessels are to sell them in the secondhand market as a dry bulk vessel. We are working on estimating and updating to get the detailed cost estimates for bringing the next 2 old CABUs through the 25-year docking and life extension program. And we also start working with customers to see whether we can make a similar contract life extension of the next ship that is the Banastar that is -- reaches her 25-year anniversary in October. So we -- it's a bit too early to say how we -- whether we will succeed or not. We hope we can do it on that ship and the next ships that are coming into new trades, which are mainly into Brazil, or into Indonesia. But again, we'll come back and inform you when we have advanced this.

Okay. Thank you. We'll move on to a few questions around the CLEANBUs now. So what are the key drivers behind the strong CLEANBU Q1 guidance? Is it primarily driven by stronger markets?

It is, of course, well supported by the stronger product tanker market. But as mentioned, it's also important the way we have optimized the trading of the ships by instead of as normal taking out dry bulk cargoes eastbound out of Brazil, we use the positions we had in Americas to transport naphtha from U.S. Gulf for important customers, like BP into Asia, which with a substantially higher earnings. So this is a part of, as I mentioned, the flexibility of the ships and how we build relations also with new customers, like ExxonMobil and others.

And that will result in a higher capacity trading in wet.

Absolutely. That's right. As Liv says, we estimate around 85% of the capacity to be in the tanker market. And again, showing that we -- in order to capitalize on the strong tanker market, we maximize the days in the tanker market while maintaining the combination trading in a smart way.

Okay. And how do you view further fleet growth given the increase in caustic soda cargo volumes and the potential in the CLEANBU segment? Would you consider contracting new builds if newbuilding prices decline?

I think we -- what we are working on both on the CABU and CLEANBU side is to make the business stronger and more resilient and to improve the base to expand the number of customers and trades. And if we achieve that, again, depending on the timing and the state of the newbuilding market, we are quite confident that we should, over the next years, be able to grow the fleet.

Okay. And how do you expect the coverage for 2027 to develop through the year? And what is the current fixed price coverage for 2028?

At the moment, we -- the only fixed rate coverage we have for 2028 are the part -- the last part of -- sorry, we don't have any 2028 coverage for fixed rate coverage. Barcarena will -- sorry no, that's right. Barcarena will continue through '28, sorry. So that's the only fixed rate coverage we have for '28. We expect that the contract coverage for '27 will -- of course, it will be the contract renewals that we will do during the second half of 2026. And we would expect that the fixed rate portion will be quite similar to what we achieved for 2026. And then we are continuously evaluating opportunities in the tanker market to possibly expand the fixed rate coverage over the coming months depending on how the market moves.

Okay. Can you give some color on the floating rate portion for tankers? Are these index linked? And if so, can you share which?

Looking at, as mentioned on the caustic soda contracts into Australia, slightly more than 60% of the booked contracts are index-linked or floating rate contracts as we like to tell it. And in this mechanism is linked to one of the indices for shipment of clean petroleum products into Australia. We believe it's a win-win mechanism for our customers and for KCC, giving in most markets as strong earnings.

Okay. I think that is all we have for now, and we're kind of running out of time. So I think we can wrap up.

Thank you for joining, and you know where to find us if you have further questions. Thank you.