Novaturas AB (NTU1L.VS) Earnings Call Transcript & Summary

Good morning. I would like to welcome you to Novaturas meeting with investors. I'm Amelia, an account manager at Nasdaq Vilnius, and I'm delighted to be the moderator for today's event. We will start with the presentation from the management, which will be followed by the Q&A session. [Operator Instructions] With that said, I am pleased to introduce today's presenters: CEO, Audrone Keinyte; and the CFO, Tomas Staskunas. Mrs. Keinyte, please, the floor is yours.

Good morning, dear investors and members of financial community. It is a pleasure for me to be here today and to present the results of Novaturas Group of the first half of the year of 2021. Together with me, there is our Financial Director, Tomas Staskunas, who will also assist me in the Q&A session at the end of the presentation. So to start with, we would look at the key financial indicators and also review the most important and significant events that happened in the first half of the year of 2021. But before that, I would like to have a very quick and short review of the business environment in 2021, specifically of the first quarter or the first half of the year. So first of all, in the Baltics, during the first quarter, we had very strict lockdowns. And therefore, let's say, the business activity, the travel business activity could not generate such capacities as usual because of very strict regulations, including traveling and, let's say, movement between the countries. However, starting from the second quarter, the vaccination process has gradually started in all 3 markets, and we have gained a more significant speed during May and June. And therefore, it definitely has changed, let's say, the possibility to do travel business activity. And the travel restrictions have started to be eased. And finally, at least in European Union, that has been accepted as standard, let's say, travel regulation between the countries, which definitely need this kind of business environment much more acceptable and easier for the tour operators and other businesses of the tourism industry. Novaturas Group has started the flight operation in [indiscernible] during the -- let's say, the hardest lockdown. And in certain markets in the Baltics, we were the first ones to start the flight operation as a tour operator and offer traveling possibilities to our clients. And this has proved to be a very -- I would say, very good decisions. We have put our leadership position and this allowed also us to achieve very positive results for the first quarter and the second quarter as well. So talking about the results. During the first half of the year of 2021, we have reached EUR 29 million of revenue. The turnover was not -- still lower, much lower compared to 2019 due to the factors that I had mentioned, because the first quarter still was a lockdown period in the Baltics, very limited possibility to travel. The second factor is that even though from April, the situation has started to be changing, however, it was a very gradual progress on all those objective factors that define our possibilities to do our -- let's say, to do our business activity. However, compared to 2020, the revenue is by 24% higher. So again, 2020 was, I would say, a very uncomparable year. In 2020, the first quarter was still pre-pandemic, even though the pandemic has started in the beginning of March, at least the first, let's say, signs of pandemic. And of course, it affected the first quarter results, but the most important is that the second quarter of 2020 was with no activity at all due to a very strict lockdown and, let's say, completely closed borders, we were not able to generate any revenue from our business. Therefore, the -- let's say, the first half of the year of 2021, during this period, we report this increase compared to 2020. Now talking about our profitability results. We are very, I would say, proud and -- proud to see that our -- to be able to present such results that's up close to 2019. So during the first quarter of 2021, we have reached to EUR 1.8 million of EBITDA, while in -- even in 2019, which was pre-pandemic year, and it was successful and very good, let's say, market conditions, so in 2019, first half of the year, we achieved EUR 1.7 million of EBITDA. So in 2021, we have managed to achieve to even 5% higher EBITDA than 2019, which was pre-pandemic year. Of course, 2020 was already the pandemic environment and pandemic context, so it is -- it was minus EUR 0.8 million. In talking about the net profit, again, we had very positive indicators and very positive results. We have achieved EUR 1.1 million of net profit this year, during the first half of the year, while even in 2019, we had much lower net profit. It was EUR 473,000. So we have an increase of 130%. This is mainly due to the financial activity that was done in 2019 by hedging policy and so on, which was not the case in 2021. And -- well, in 2020, the net loss was EUR 2.2 million. So definitely, if we look into the results of the first half of the year and considering that still the, let's say, pandemic situation is not over and the whole world is fighting with the virus spread, we are out to announce such positive results. The reasons why we managed even with lower revenue to achieve to such positive profitability ratios is, I would say, apart from the objective factors such as vaccination process, which has started in the second quarter in the Baltics, apart from, let's say, the regulations, which have also been much more balanced than last year, and apart from the fact that the market is recovering, the travel market is recovering due to the fact that people have not been traveling for a long time and there is a huge [indiscernible], but there are also certain important factors which may help us to achieve such results, and those factors are related to the actions and decisions taken by the management and Board of Novaturas Group. So it was a very clear strategy to remain very active in the market during pandemic to work very actively and proactively with our clients and our partners and to be there for the recovery of the markets this year and, of course, to aim to come back to the, let's say, business activity or size and capacity of the business activity of pre-pandemic years as soon as possible. So we have strengthened, I would say, leadership position in the markets and also in the destinations. So in the markets, we have been very active in working with our distribution channels, with our clients, and we are working and settling the -- let's say, a strong background for the future, as well we have been working very actively with our partners on the destinations to -- let's say, to cope with the crisis and also ensure that we have the best commercial conditions for the future. Then we have very carefully managed our capacity. We were always -- I would say, on a daily basis, monitoring the markets and increasing the capacity in order to -- again, to be the leader on the markets, and of course, controlling it very, very accurately. Then, of course, we continued with the cost control, with the strict cost control, and this continues for the future months and years. Additionally, we have been working actively with the processes, and we have been aiming to increase the efficiency to improve the process and so on. So therefore, the results as such, and then we will discuss them more, let's say, in details in the next slides. Now talking about the significant events that happened in the first half of the year of 2021. I would name just the highlights. So first of all, the financial facts. The investment for issued bonds emissions has reached Novaturas Group. Though recently, just a couple of days go, we have redeemed half of the convertible bonds and the value of EUR 2.5 million. So this investment has, of course, in general, helped us to ensure company's, let's say, liquidity -- positive liquidity situation in whatever scenario. Also, it helped us to strengthen our positions in the markets, in the destinations, to develop also our distribution channels, namely e-commerce, and we would -- this investment that's -- let's say, was done by [indiscernible], so it was -- it has proved also to be very -- how to say, very positive decision of Lithuanian government. And also by redeeming half of the convertible bonds, we have proved that we are very, let's say, financially healthy and very much prepared for the recovery of the markets or the travel market and the Baltics. As well during the first half of the year, the smallest tick size has been applied to Novaturas shares, and this also might -- should affect positively the liquidity of Novaturas shares in the capital markets. Further, during all the pandemic, let's say, situation, and not only this, I would say it is a continuous process, but especially the pandemic situation has speeded up certain optimization processes and the organizational structure of Novaturas Group. So we have made some changes in the management of Novaturas Latvian subsidiary. Considering the factor that a lot of functions are being centralized and so they get office in Lithuania, so we have continued our optimization process and centralization of certain functions in Lithuania by changing the management structure in Latvia. This has been done previously in Estonia and proved to be very right decision and brought us very positive results in terms of, let's say, our market position, in terms of our, let's say, functional control and also in terms of the, let's say, personnel administration and cost control. So therefore, the same change has also been done in June month in the Latvian subsidiary, whereas the sales person, sales -- head of sales would remain as the office administrator, but the main management would be done from Lithuania. Finally, as well during the second -- the first half of the year of 2021, we have also opened the sales to summer '22. We have opened the main destinations such as Turkey, Greece and Bulgaria. And we were the first ones on the market to open those destinations at summer '22 in general in the market. And this also allows us to -- let's say, to program the future more and to give the clientele alternative for the next year, which we expect to be positive for the travel market. Of course, nobody can forecast the pending execution, let's see how it will evolve, but we already see that the market recovering, even though with lower capacity than, let's say, 2019, but it is very sudden and people would be very much traveling in 2022 if the pandemic situation would be controlled. So having possibility to book 2022 holidays, now with the most attractive conditions to our clients is, I would say, attractive option to the market and also it helps us to be the first ones on the market and already begin to have the sales for the future. And apart from this, of course, I have to say that we are already selling -- our winter '21-'22 is already on sales. I would say that almost all destinations portfolio is already on the sales, except skiing destinations, which will be opened as well pretty much soon. Now talking about the second quarter site operation, well, we have entered gradually the summer season. In February and March, we have been operating Tenerife Island -- flights to Tenerife Island and also to Egypt. So they continued until end of April. And then in April, we have opened our main destination in Turkey, Antalya. In May 2021, we have opened our flights to Greek islands such as Crete, Rhodes and Corfu. And in June, finally, we opened the flights to Bulgaria, to Varna and Burgas, and also flights to Montenegro. So let's say, gradual and bit by bit, and we entered into the full summer season destinations portfolio, which was during the pre-pandemic years. And I would say that the -- there were -- I would say that all planned destinations -- or majority of planned destinations were opened, of course, gradually because the openings in many cases were suspended due to some uncertain situations to the regulations, with the requirements for the industry. But finally, it opened and it's -- let's say, the capacity increase or the demand increase has grown a lot and has been growing progressively for all those destinations. Now talking about the forward-looking statement for the third quarter of 2021. Due to the still -- due to the fact that we are still in the pandemic circumstances and also especially considering Delta situation, Delta virus, let's say, the threat, we are still suspending the forecast -- financial forecast for the third quarter. However, I would like to highlight that we are very much sure that even in the case of, let's say, the third virus wave, the business activity would continue because traveling -- or let's say, tourism and travel business has proved to be able to adapt to the virus circumstances. So all, let's say, safety measures have been implemented to the maximum, talking about the year -- or talking about the airplanes, talking about the resorts infrastructure, the hotels on the destinations are fully prepared to serve in such circumstances and to follow all the, let's say, most strict health measures that are applicable. As well, second factor which allows me to say that is that the market and the people already also got used to the pandemic situation and they've learned to have, let's say, as much as possible, normal life even under those pandemic circumstances. So therefore, the people will be [indiscernible] and will be willing to travel. Third, very important fact that the vaccination processes are continuing in all, let's say, world, and they will continue. And of course, that vaccination not only decreases the threat of the virus and the consequences of the virus we see, but also it gives a much more eased traveling conditions for the people. So considering this, the vaccination process and very standardized traveling regulations and also the European Union digital COVID certificates, all this allows us to resume, that the travel business would not be closed, and we would be able to continue with our business activity, hopefully, on the planned levels. Now in general, talking about the third quarter, historically, the third quarter was quite strong because it is the summer season, July and August. Furthermore, September, historically, was extremely, let's say, demand [ this ]. And therefore, we would expect that there would be better -- high demand for September, of course, unless we have some, let's say, negative effect of the virus spread, which we hope that would be controlled and would allow us to achieve to the numbers planned. We are targeting monthly volumes more than 20,000 pax for the third quarter group-wise. And also, we are targeting a positive profitability and hence, EBITDA. Now in terms of the flight operation, we are also increasing our destinations portfolio from September. It was also quite, I would say, a historical practice because from September, we have always opened some more exclusive destinations, which might be too much priced or too high priced or, let's say, less available in the summer season. And therefore, they were very much demanded in the winter season, so such destinations like Portugal, Algarve, Madeira; then Spain, Barcelona, Tenerife; then additional Greek islands such as Cephalonia; then Italian Sicily, Calabria; also Malaga in Spain. So a lot of new -- let's say, a bulk of interesting, more exclusive than ever destinations that would be operated during -- starting from September. And therefore, if everything goes according to the plan, then those destinations would definitely be operated. Now we are coming to the -- let's say, to more detailed review of our performance indicators. So here, we have the charts which indicates our number of pax sold and revenue in comparison in 2019, 2020. And as you see that in the second quarter of 2021, we have had 37,100 of passengers, which is still significantly lower compared to 2019 by 60% lower. But again, due to the fact that I have already mentioned that the summer season has started very gradually and quite slow in the destinations and we were increasing the capacities monthly, while in July, we reached, I would say, to the -- our, I would say, planned capacities and we are having significantly higher increase starting from July since the summer season is already well, let's say, developed in all destinations and it's ongoing. Then if we look into the revenue of the second quarter. So we have achieved EUR 23.5 million, which is by 56% lower compared to 2019. But of course, if we would compare those numbers to 2020, so as we see that still -- I mean 2020 was -- it shows that 2020 -- the second quarter of 2020 was with no activity at all. In terms of our product category or sales distribution between the product category, the biggest demand was on the flight package tours, so our traditional package where we have the flight, the hotel and the transfer included into the package. And this shows that -- let's say, that the market is coming back to the normal trend. We are going to, let's say, usual summer holidays and we are booking the flight package. Because on the first quarter, during the pandemic, we saw very much, I would say, different plans, which I would call pandemic traveling plans that we had a lot of flight on. We had a lot of long stays. Now the long stays or longer -- the stay is longer than usual, it is -- it's usual, before, people were traveling for 1 week stay, now we have quite popular 2 weeks stay but mainly with flight package tour. And I would say that, in general, maybe after the pandemic, I would say, that this trend might remain because the flight package tour is -- on booking a flight package tour operator, the client can feel much more safe because the tour operator holds and has all the responsibility for the clients' holiday. So in the case of anything, the clients -- the tour operator will take care of the clients. So the pandemic most probably has taught the market a certain lesson, whereas due to this, we've seen the changes in the sales distribution between the products and product category. As well during the first 2021 half of the year, we had very -- or almost no more sightseeing tours, again, due to the high restrictions, and this is natural. But we are happy that from the third quarter from June, we are able also to renew the sightseeing tours as well. And we'll gradually -- we hope that we will be able to come back to our previous, let's say, sightseeing tourist program. Now talking about if you look into the sales distribution between the markets. On the chart -- upper chart, we have the second quarter figures, and on the lower chart, we have half year figures. And as we see that the sales distribution between the markets maybe continues to be similar to previously. However, Latvia markets during the half -- first half of the year of 2021 was a bit lower than usual. Usually, the pax -- number of pax or turnover distribution between the markets was such. Lithuania used to have around 50% of the total group capacity. Then Estonia used to have around 30% of the group capacity, and Latvia around 20%. In the first half of the year of 2021, Latvia has achieved to 15% of the total, let's say, group capacity share, which was mainly due to the market situation, I would say. The government in Latvia has been, let's say, continuing with more strict regulations than in Lithuania and Estonia. And this, of course, had a strong influence on the market behavior. And due to this, we could not be so active and so aggressive in terms of planning in Latvia. So during the first half of the year, in Lithuania, we have achieved to 24,100 of the clients we have [ flights ]. Then in Latvia, we had 7,300 of the clients. And Estonia, we had 14,700 of the clients. And in total, if you would look and compare the total number of travelers that we have served during the first half of the year, so it is by 48% higher compared to 2020 and it is by 66% lower by 2019. But again, if -- and I would say that it is reasonable to compare to 2019. I would say that this -- the gap between the capacity and revenue numbers between 2019 and 2021 is reducing and is significantly reducing starting from the third quarter. In terms of the top destinations, again, we have the comparison with 2020 and 2019. So 2020, the first half of the year, I would say that this -- it can -- we cannot -- we can hardly compare those numbers. So I would pay a special attention to 2021 and 2019. And as we see that we are coming back to, let's say, usual sales distribution between the destinations. Turkey this year has a similar, let's say, sales share as 2019, 6.7%. Greece, Greece has higher sales share because the other destinations are not -- or have not been operating. And also during this year, during 2021, we have -- I would say that we have an increased demand for Greek destinations. Greece has also been one of the very few destinations that have been operated in 2020 during the pandemic year, and they were very much prepared to serve the clients and also the market was already -- they knew that Greece was open last year, and they've got used -- or they preferred -- or felt more confident to travel to the destination that was already performing and we had experience with in 2020. Then Egypt. Egypt, due to the fact that in 2020 we had no activity in the second quarter, that's why Egypt share in 2020 is such high. But we see that if we compare '21 and 2019, then the share is very similar. Bulgaria as well is very similar. Tenerife Island has a bigger share due to the fact that during the first quarter of this year, there was a very limited, let's say, variety of destinations and Tenerife was -- we were increasing capacities to Tenerife due to high demand. And then no skiing and almost no long-haul during the 2021. So therefore, the figures are such. Basically, talking about the destinations from 2021, even though with lower capacities, we have -- let's say, we have come back to our usual destination portfolio, and we are very happy that the destinations which were with less capacity but very unique and very exclusive, we have proven to be very successful this year. And certain destinations such as Montenegro, they have a huge demand and increased demand, and we were even increasing our capacity, and the capacity is even higher than any pre-pandemic year before. So therefore, let's say, the destination portfolio, I would say, majority of the destinations are in our portfolio during this year, and this shows that the market is recovering, market is looking for traveling options. And it gives us, let's say, a possibility and opportunity to offer to the client -- or to offer the product to different segments of the clients. As well in terms of the destinations, we continue strengthening our position there. We continue strengthening our operation with the hotels in order to have much better, let's say, commercial conditions and very [indiscernible] commercial conditions to our clients and to -- let's say, to increase our competitiveness in all destinations and our strategic partners' hotels. Talking about the distribution, our, let's say, sales share in e-commerce has increased slightly. We are -- during the first half of the year, we have 18.5% of the bookings which reached us during the -- through the web sales and GDS. And as well, of course, our main sales channel is our travel agencies, whereas during this year, we have reached 70% compared to -- 70% of the total sales share. And we continue being very active with our distribution channels, with our partners. We are strengthening our operation. We are also managing the financial risks and also considering that, let's say, much -- I would say that the travel market, tourism sector in general in the Baltic markets has proved and has shown their resistance even during this very huge crisis to the sector. So we continue not only strengthening but also controlling the risks even more than before. The profitability ratios. The profitability ratios are also very positive. Of course, the gross profit has -- is not as high as in 2019. So we had almost like 48% lower gross profits compared to 2019. We have reached to EUR 5.2 million during the first half of the year, but the EBITDA and the net profit results are very positive even compared to 2019. So the first quarter was almost EUR 1.8 million of EBITDA, which is higher than 2019 and it is significantly higher by 130% than -- the net profit is significantly higher than -- by 130% if compared to 2019. So during the first half of the year, we reached to EUR 1.1 million of net profit. On the second quarter, let's say, it was EUR 0.9 million. As I mentioned before, in the beginning of my presentation, despite lower capacities, despite lower turnover and despite the lower gross profit, we have managed to achieve a very good profitability -- positive profitability results due to several factors, and it was mainly a very strong, let's say -- well, I would say, strengthening our leadership, very, I would say, big business decisions, strong management of the processes within the company, optimization processes, strict cost control, which continues further. And apart from this, of course, that the business environment has been changing also positively if we compare to the previous year. So the vaccination progress, the recovery of the travel market and the fact that the people are willing to travel and, of course, the state health measures, which were also valid during the first half of the year in all of the Baltic countries, and we have taken all the possibilities to get and to use all the state measures. So all this influenced very positively the company's results in 2021, first half of the year. In terms of our, let's say, main performance indicators, the load factor, profit per pax and average package tour price, there are changes compared to 2019, and I would like to highlight the main ones. So first of all, the first -- during the, let's say, 2021 or still during this pandemic, let's say, year, there is a much -- how to say it, there is a probability to have lower load factor because of the fact that we have to -- in a case of, let's say, positive profit case, we give our clients possibility to have a certain insurance that they could change this -- their trip if they have a positive test result before the trip. So this, of course, increases certain risks. And therefore, due to that, during the first half of the year, we have achieved 19% of the load, which is by 7% lower than pre-pandemic year. As well, due to the fact that we started the summer season, we had a lot of [ interest ] to the destination. So all this together has influenced this load factor results. But bit by bit, we would be coming back to, let's say, our normal load factor ratios. In terms of the profit per pax. Profit per pax during the 2021 is higher than 2 years before and last year, of course. And during the first quarter, we had a significantly higher load factor profit per pax. During the second quarter, we had EUR 59 -- we achieved EUR 59 per pax, which is still higher than in 2019. In 2019, during the second quarter, we had EUR 37 per pax. And on average, we have EUR 77 of profit per pax during the 2021 first half of the year compared to EUR 41 per pax during the first half of the year of 2019. Again, the profit per pax, I would say, was very much -- it is a reflection of a combination and complex of effective business decisions that has given us this result. Also, another very positive indicator which we reported apart is the package tour price, which is increasing. It is increasing during the second quarter compared to 2019. We have EUR 756 average package tour price compared to EUR 626 in 2019. And if we would compare half of the year, so it is also higher compared to 2019. We have EUR 757 average package price during 2021 first half of the year. And in 2019, same period, we had EUR 617. So it shows that the clients are choosing more expensive, better products, more quality products that the duration of their holidays is also increasing. And it gives us a very positive indication of the markets, which allows us to think very positively and to presume that our future months next year would be very strong because the market economically strong, and that additional to that, they are -- they will be very much willing to travel out of the country. And so finally, the operating expenses. So the -- in terms of this, we have also positive figures. So excluding one-offs and commission, we have a reduction of 20% on our OpEx compared to 2020 and 40% compared to 2019. I would like to remind as well that last year, starting from March, we have implemented and [ screened ] strict cost saving policy, and already 2019 was decreased significantly. So 2020, the first half of the year was already decreased significantly compared to 2019. So finally, even this year, considering the recovery, we can manage to decrease the costs compared to 2020. And this shows effective management of the cost and the processes. And if we would compare total operating expenses to the year of 2020, so it's including one-offs and commissions, so we have very much similar numbers. And if you compare to 2019, it would be by 58% lower than 2019 the same period. So finally, let's say, considering our -- or talking about our OpEx, I would like to see that we are -- we will continue on the efficiency increase and strict cost control. However, due to the fact that the market is recovering and we are aiming to be the most active in the first months of the market, and we are doing so, so therefore, of course, we have to come back to, let's say, maybe not usual but higher costs for the future months compared to 2020 because 2020 was -- the whole year was a crisis year. And of course, the marketing, we have to pay much more -- or not pay, but to plan as bigger budget for the marketing activities, the personnel overheads, we are, how to say it, increasing them to the level that we would -- we still would have very balanced, let's say, costs, but also the best quality, the biggest activity on the market that would allow us to maintain or to stay the strongest leaders on the Baltic markets. So from my side for today, that's it. I now -- Tomas and me will be very happy to answer any questions you might have.

[Operator Instructions] So let's begin with the first question. Could you please comment on the main reasons for such a decrease in the price of Novaturas shares?

Hello, dear investors and members of financial community. I would comment that we as a company focus on too many areas. One area is definitely company reserves, company activity, strategy, focused strategy of the company, always reflecting the current situation in on the market. And we are doing lots of activities to be as efficient as possible and to achieve as high results as we are able in the environment. From a second point of view, we're trying to be a very transparent company, and we are very much focused on investor relations. We are trying to build one of the most transparent and reliable companies regarding information which we are presenting to the investors. And we believe that in the long run, these 2 main focus areas should allow our investors to have high return on their investment.

Another question is as following: Do you have business in Belarus? And do you have plans on expanding your business abroad?

So in terms of the Belarus, because of the obvious reasons, we suspended our sales activity there. I would like to highlight as well that in Belarus, we do not do any kind of, let's say, tour operating business from there. We do not operate flights. We were mainly focusing on it as a distribution channel. So we were selling our package tours from Lithuania to Belarus. But now definitely because of the pandemic and because of the political situation in Belarus, we have suspended it. Also, the company is constantly looking not only on, let's say, increasing its position in the current business scope, but also we are constantly evaluating possibilities to develop further. However, at this stage, I will not be able to comment more details on this.

Another question that we received is as following: As per your understanding, what could be the potential impact of the third COVID wave on Novaturas business, especially number of customers served, please?

Yes. So actually, because of that, we also did not provide financial forecast for the third quarter because all of us hear and see what's happening worldwide. However, as I had mentioned already during my presentation that -- and also the fact that during the most strict lockdown in the first quarter, we managed to generate -- to do business activity and to generate very positive financial results. So because of that, we are very much sure that we will be able to continue with our business even in the case of the third wave. And what allows us to think so are the following: first of all, the vaccination processes which -- whereas, let's say, around 40% or 50% of the society we can expect to be vaccinated. And the vaccinated travelers, they can easily travel without any additional regulations between at least the European Union countries. Second thing is the standardized travel regulations, which was not the case in the last year. There was a lot of chaos. Now it is very clear what kind of requirements are applied to all countries. And it ensures safe traveling because there are tests before and coming back. There are self-isolation requirements in the case of you are coming back from the country that gets the high -- let's say, have the high epidemiological ratios. So it has been -- the European Union has accepted a standardized -- these regulations of traveling. As well, the infrastructure adaptation, all resorts in the destinations are completely prepared to serve the customers under such, let's say, circumstances in such environment, and this already has been done in 2020. And all those, let's say, factors are kind of a guarantee or ensuring that you can travel safely. So therefore, I'm pretty sure that, let's say, there would not be such strict regulations and strict lockdown like the first that we had last year where we could not operate any destinations. And since there will be a possibility to operate destinations or at least some of the destinations, we will, of course, do our best to be the ones, like usually, that offer those destinations to the clients with the most attractive conditions. And the market is already willing to travel. The people already got used to this, to the traveling -- let's say, traveling conditions during -- in this context of pandemic.

Another question is as following: The company received the second tranche of EUR 10 million bond investment in May and June. However, the company repaid EUR 2.5 million in July. So what is the reason behind such early repayment? Any plans to repay more in the near future, please?

So the company negotiated [indiscernible] fund regarding this investment from the end of year 2020 till the first -- to February of 2021. Of course, during those negotiations, we were thinking about the worst possible scenarios. And the EUR 10 million investment was taken thinking about a very negative scenario of not being able to open in 2021. But as you can see, the company has been able to increase operation -- operational activities during 2021 first half. Each month is significantly improving in volumes. And also, the company is generating very positive margins. And so there is no such a high need of additional cash cushion currently. And that's why the decision was to repay EUR 2.5 million already in July. And regarding further repayments, the company will decide later on. And if the decision will be made, it will be properly announced to the financial community.

We have received one more question, which is as following: Apart from having first-mover advantage due to opening of holidays destinations, are there other reasons for such high profit margins compared to 2019, please?

So I will comment on this question. So yes, I would say that the very important fact that was already mentioned in the question, we were the first ones to open the destinations in the winter season, and then even though the competition followed in April with certain summer destinations, still, let's say, we were the first ones to open the other destinations as well such as Greece, Bulgaria and so on. So I would say that the fact that we were the first ones plus certain destinations, maybe due to our position in the market, we are able to offer many more destinations than the others. So this gives us also to have, let's say, possibility to have less competition on certain destinations, I would say, exclusive -- or demand of exclusive destinations that we have such as Montenegro and certain destinations we will open in September. This also might be the factor of this profit per pax. And finally, I would also like to say that we are working very much actively with our suppliers, and we are constantly, continuously reducing the net costs. And this, of course, is a very important factor for the profit per pax. We are -- due to the, let's say, better dynamic situation on the destinations, the hotels are also continuously reviewing the prices, and we are doing this on the daily basis and taking the biggest advantage from wherever we can in order to be able to offer our clients the most attractive commercial conditions and also to increase our profitability and to improve our company's results, which is very much needed, especially after this crisis. Also let's say, measures, which helped us to decrease, let's say, our -- which helped us -- or contributed to our -- let's say, to our company's results. So I would say those main factors.

And it seems we have the last question for you today, which is as following: What is the situation with the lawsuit against GetJet Airlines? What is the claim amount for the company? And significant sums should be disclosed for investors.

Okay. So I would comment on this question. So the lawsuit is ongoing. And unfortunately, at this stage, we are not able to indicate any kind of details because still the -- let's say, the result or the continuation of the lawsuit, it has many scenarios. So therefore, at this stage, we are not able to [ give ] any details.

It seems that all the questions were answered. On behalf of Nasdaq Vilnius, thank you, everyone. It was our pleasure being with you today. Recording of the presentation will be available in the Nasdaq Baltic YouTube channel. Dear management, thank you for the presentation and a very interesting Q&A session. Have a good day, everyone. Goodbye.

Thank you.