TTS (Transport Trade Services) S.A. (TTS) Earnings Call Transcript & Summary

Hello, everyone, again, and we would like to welcome you to our video conference for the financial results for the first half of 2024. Very briefly, I'm not going to repeat the information available but there are a couple of aspects that remain important for our first half of the year. First half, the results are affected by the significant reduction of grain flows from Ukraine. This manifested at the beginning of the year. And this was caused by the reopening of Ukrainian exports via Odessa. In relation to the results, what we stated in the report and we reiterate is the fact that the very good effects that we benefited from in terms of Ukrainian exports via Constanta last year are significantly diminishing, and we are returning to a normal trend, let's call it, in terms of long-term development. So if you want to have a correct image, in terms of what will follow, please take into account that this development will continue. We are actually simply coming back to a normal situation in relation to Ukraine as before the war. Moreover, now we are waiting for your questions. We have already received the first question that I may answer to it.

We received it via e-mail. The question sounds as follows. Are there any chances to achieve the revenue and expense budget for 2024? And well, we come forward with a rectification and adjustment of the budget. So this is the question.

Hello again. The budget was drafted at the beginning of the year in February, if I'm not mistaken, based on data and results that we had at the time and estimations that our partners transmitted to us. Since then, there have been a lot of developments and events, the development of the situation in Ukraine that affected the new transportation flows and volumes. And we had huge volumes in these 2 years previously and higher prices, and they continued and translated to a huge growth of assets especially in terms of river transport and they had an indirect impact on traditional goods flows during the war. Overall, these effects of the war in Ukraine were visible in 2022 and fully in 2023. The beginning of the year was more or less following the same trend. But of course, the effects were annulled in a way at a huge speed that was surprising for us. We expected a recovery just not as quick as it happened. And the sole argument is the fact that Ukrainian ports via Odessa started to resume their activity as of last fall. But at the beginning of this year, they started working at full pre-war levels. We're talking about goods that they manage throughout the year in Odessa and the other parts that constitute the great basin of Odessa, as it is called. So in addition to this impact of sudden decrease of flows via Odessa. We're not only mentioning grains, we're mentioning minerals as well and all of the goods. And we are also witnessing a drought that has been unmatched up until now, it was sudden -- had a sudden onset in June, and it majorly affected the grains -- crops in Romania, especially Sunflower. And it also affected crops from other countries as well, traditional countries, let's call them on the grains market which is Hungary and so on. But the effects are less in significance in this regard. So this natural phenomenon and economic events such as stagnation of metal production as of April, May, which we presented in the report at Page 14, you can see analyze all the elements that we mentioned. And this all led to a situation in which the development of our activity has not been as for February. It's difficult to answer such a question because if in February, we had certain elements that we based our assumptions upon, the market right now is very volatile. There are events that are happening very quickly and suddenly. So that's why we still don't consider that we could revise the budget because when you revise the budget, you have to have facts. And right now, we can't estimate other figures as compared to the ones we already estimated. If this will happen -- if we obtain figures that are somewhat certain, of course, we will come back to you and inform you about the potential revision of the budget, and of the figures for 2024.

Yes. And there is another aspect that we have to take into account right now, if we analyze only the first half of the year, we are not at a level that could justify a budget rectification. We are relatively close to the figures estimated in the budget, but the differences are not as big as to justify a rectification. But, of course, once the results for Q3 are available, we will take a decision at the moment. We are monitoring the situation. But before we have the results for Q3 before we publish them, we can take into account a potential rectification of the budget.

The next question?

Okay. I'm going to ask the question in Romanian so that everyone can understand. Is there a reason why you did not report revenue breakdown by each business unit and volume pipe this quarter?

So the answer is as follows. We usually don't carry out this breakdown per segment and volume type -- goods type in terms of revenue in the report. For a simple reason, if we were to go into this high detail level. It's a lot of commercial information that we do not want to publish that relates to contractual volumes and tariffs, contractual tariffs. However, there is an indication if you want, in the financial statements, in the consolidated financial statements that's where you can view a breakdown per segment, per main business units, and you can draw conclusions -- general conclusions, but we cannot go into a higher detailed level because the information is a commercial nature. Our markets are very low in terms of number of competitors. So that's why our competitors would take this information, of course, and use it. So we can't give you information in terms of contract types, client types. We didn't give out this breakdown this quarter. We didn't give out such breakdowns in previous quarters either.

Let's move on Mr. Mustafa. No, Mr. Mario Martin has left the meeting and will view the meeting subsequently. Moving on. The question is as far as you say, we are returning to the situation pre-war. The question is, what effects will investments -- the investments of over NOK 400 million, I'm not sure if this is the correct figure. But it's an approximate amount. These investments, what effect will they have? Have they changed the company or not? So the question -- this is how I understand this question. Maybe you can correct me if I am wrong, will we return to -- if we return to the situation pre-war without investments or the pre-war situation plus current investments?

And I think we can answer. We can say that yes, we are returning to the situation before the war, the normal development pre-war with the effects of the investments but without the effect of Ukraine. So the equation if you want is as follows: pre-war minus Ukraine plus investments. And of course, these investments will produce and will be reflected in terms of effects in our future estimations, please don't interpret this, later on, the growth pre-war without taking into account the investments. Of course, these investments will be reflected in our future results because these investments will start to produce and we are going to see these results in the future.

Next question from Mr. [indiscernible].

Hello, how flexible is the cost structure, for example, salary increase from last year that you had to carry out as a result of increased demand? So how flexible is the structure cost in terms of salaries?

I think we discussed this subject at the last meeting that we have, the salary component, so all salary costs are as per -- or have a fixed part and a variable part. No, -- so it's clear that the variable side of the salary costs relates to the production process. And we have already taken into account the measures to reduce the impact of salaries on every activity segment. So there are specific aspects related to fleet, to port management activities. So each activity has a set of measures in place in order to reduce expenses, not only salary expenses, but other expenses as well. What we have to remember is that there is always a threshold underneath you can't go. So in terms of salaries, there is a level that we cannot go under because that is a mandatory requirement. So there is a certain level that we have to maintain. There are certain measures in place and other measures that are currently in implementation. Obviously, here, there is an inertia moment that we are facing. These measures are coming at a later stage as compared to the impact of the market and on the market of the development.

Before you explain the next question. Let's talk about the Decirom because it's important. So the next question, where does the difference of [ EUR 47 million ] labor net result and [ EUR 37 million ] per consolidated level. Where does the difference between these 2 amounts come from? So that Decirom wasn't supposed to bring a surplus in terms of profit. And now I'm going to answer in relation to the Decirom. So Decirom is currently in a full investment process. And of course, we inherited investments that took place before the takeover. So the Decirom has a huge amortization level. In terms of balance sheet, the P&L is loaded with amortizations, write-offs. And it's good because it releases an important cash flow. But this is not reflected in the profit. The situation will continue, of course, because the investments conducted up to 2023 will not be amortized in a year, from the new investments that we carried out and continue to carry out, they will continue. But from our point of view, if you want, the profit of Decirom is less important. What's important for us is for the company to have a good EBITDA. And right now, we are relatively satisfied with the situation and even more satisfied with the fact that if you analyze the volumes, the only goods segment type of goods that recorded a growth in the first half of the year. And now seems to look good in terms of the second half of the year are chemical products and chemical products from the chemical products, good or a high [ waiting ] was brought forward by the Decirom. So Decirom already is contributing to the situation in terms of our revenues in general.

The difference before of [ EUR 47 million ] and the [ EUR 37 million ] is justified by the dividends that were recorded were [ EUR 9.7 ] million. This is the reason behind the difference in the 2 results. So it was the dividend that was included. And of course, we need to talk about the amortizations, which are, of course, dividends is a lot higher than the amortizations. Decirom is about to sign the contracts -- the 2 contracts that we talked about. I talked about in the conference -- they are nonagricultural contracts. There are 3 new flows, 2 are new for the group but also for Decirom. And there is another one that has no correlation to Decirom. These flows are nonagricultural, including the 3 ones that we're exploring to bring to the group. There is a logic of the business, meaning that the minerals have a higher predictability degree and they're less volatile when compared to agricultural products. Now we have some blockages from the downstream flow. When we talk about the products, the agri products globally is priced which were at a level that is not comfortable. The market expects better prices. The minerals have an amortization effect of tempering of the curves. And this is the reason behind the decision. There are situations where the minerals disappeared the flows but there are extraordinary events as they were, 1.5 million -- 2 million tons disappeared for example, after the war, and did not reappear. So this is correlated to the energy prices and also correlated to the war. They are more stable as volume when compared to agri products. This is why we are looking at non-agri flows currently.

We have somebody who wants to talk to us.

Hello, everybody. Thank you, gentlemen, for your present presentation. Of course, it's more detailed what was published. Many of us are aged though -- [ lie to me beautifully ]. This is a saying that we used to use in the day. I would like you, of course, for you to [ "lie to me beautifully" ]. There are problems about the budget because we cannot -- the budget, we have figures when compared -- when talking about the future, of course, there are uncertainties, where are we heading with this company? Which are the main drivers you can find in? Which are the directions of the company. This will be the engine for the future growth and future profit, and this is the reasoning behind our investments. I know it sounds a bit romantic and silly, but we also need a story, not only the figures from the quarterly or half the year results. Of course, invested time. You invested in motions. Your mind into companies, where are we heading, I'm sorry for this unique question?

Mrs. [indiscernible]. I asked her to talk. No -- leave her alone. I thought she wanted to talk. No, she didn't. Our colleagues need to answer this question. I would start by saying that this company very clearly has a future. I'm not worried at all, because the 3 main directions that we operate on correspond to the mass flows of goods, they are very good for the River Transport, and it becomes a necessity for agriculture. Of course, it's drought dominated year, and the situation meant national -- about a national interest in irrigation. If the plans do become actions and the results the [indiscernible] Canal would bring water to [ Barragan ] to be finished, and other irrigation works that are being planned to be completed, this would mean that the Romanian agriculture to be able to produce also in crisis mode. The quantities is here, the production was not affected. And we could see in the Sunflower and the Corn harvest. But the market situation in this moment does not allow a grain trade because the prices are too low. And we have inventory, and of course, the decision moment is being delayed. In the steel industry, I see that the economy and the situation will go -- will reach the point that without the steel industry, Europe cannot survive, as a joke, we need steel for the tanks, and we don't produce them and we buy it from the enemy, it's just a wording. Of course, I believe that the things will -- from a national level in Romania and Serbia, the steel industry will gain the resources needed to evolve at a European level, there is demand. In Germany, for example, the management has to buy green steel. So for the steel industry to become green, of course, you government, you authorities need to acquire so that, of course, the investments are needed. From the chemicals industry, fertilizes -- materials for fertilizers, we have developed this direction of the industry. The industry has a continuous activity and the -- and of course, we need raw materials. Of course, it's more profitable the seasonal agriculture, but there are moments periods where seasonally, we do not have volumes. And that's why the industry sector is very important. And in the steel industry, aside the raw materials required minerals, we have the laminated products that we transferred from the producer to the beneficiary currently, Romania that 40 years ago was producing 10 million steel, and we were exporting now why importing, and we want to integrate port to Constanta infrastructure to have the equipment necessary for a different flow of laminated from Europe to Romania. In the chemical industry, we have [indiscernible] parts and the end product, we have the fertilizer. We have the route completely changed from exports to imports. And currently, we have fertilizers that come from Europe in downstream. And we have exporters to Austria to Serbia and Port Constanta is a port that transfer from outside to Europe is being done, and of course, depending on the supply. We are in a moment that we have a market issue, a pricing issue. And this, of course, is transitory. We have seen similar crisis in 2008, 2009, where we had blockages in the goods due to pricing, and there were margins very low about 4 million tons disappeared then. And now we can see the same thing, but guaranteed after the storm, the sun shines brighter. It's also a period with military conflict, but the future is a bright one. We would look at [indiscernible] who it is the business. It's a logistic integrated operator. We are very happy to be able to buy Decirom last year. We have that in Constanta, this changed the possibilities of evolution for our company. We have 2,000 kilometers that can be served, connected or not, developed or not on the 3 main business segments. The CEO talked about the history. These -- this is a structure of assets geographically balanced, that serves a logistics with an entry and exit point in Constanta Port. When we work here, and we're talking about the [indiscernible] activity is not just about today or tomorrow. It's about the future. And our future is connected to the growth of several industries in the [indiscernible] Basin, but we have the fundamental vector of economic growth because as a principle, the economy has to increase. Of course, it goes up, it goes down now. Now the CEO has said very clearly. We have an excess of volatility. It's an uncertainty which leads to temper us in communicating some data that are not very clear. On the long term, we don't have any issue to build new projects because we have 10 countries on the 3 business lines. We have the chemistry, steel and metallurgic. It's unavoidable, it's like the stock exchange. We have a top leader as the trading prices and the other companies that are going down. So as the stock market computes a BET index, this is what we compete for the economic evolution. We would like to tell you about some secrets in our jobs. There are 40 of you participants, we cannot -- we have nothing against our competition, but we need to maintain our company and business secrets.

Let's talk about focusing. What you can clearly see -- and we're talking about operating business line. Operation will begin to increase in terms of importance and strategy worth, operation itself is less volatile compared to transportation. First off, because operation in Constanta, does not transport only on the Danube, [ about third ] is transported on the Danube. There is also railway transport, traffic transport, but operation is the same. So the volumes that we managed are already higher than volumes transported. It happened last year as well. So there is a trend for balancing, let's call it -- 10 years ago, we're focused on transport and not operation. Gradually, we made a shift. So as I stated, you can already see if you analyze the port statement, you can see certain effects from what I mentioned before. And the second important thing, as we did in previous situation workflows disappeared, we bring in new flows. Of course, we cannot go into detail probably in half a year or a year, we will be able to say clearly what flows I am referencing right now. But right now, we cannot tell you. The volume is all important. Periods are important because we're talking about long-term contracts. It's the same client profile that we have in our history. But right now, we cannot go into further detail for a simple reason, until we have a work period active, we cannot give you details in this regard. We cannot give out this information. This is a very interesting news piece of news. Gabriel, if we want or whoever wants to add things?

So taking into account these geopolitical developments from the area, taking into account the logistical chains. Some of them haven't appeared right now, but they will appear who knows maybe vertical flows, Greece, Hungary, Romania, on that side. So how do you envisage developments in this regard? What will be the future of the Constanta port or Danube's future and [indiscernible] political logistics structure that is now in the area and will be in the area.

So now we're talking about goods flows. The Greece Serbia route by Hungary relates to finished products, containers and the like. What we are talking about, we're talking about gross bulk merchandise goods. And they are not good for this route that you mentioned. If we combine it with the metal goods, everything takes place on the Danube. Hopefully, all of our products from this area are on the Danube -- transported on the Danube. So the assets are organized in order for goods to be taken over on the Danube. Of course, finished products can be transported on the Danube and other routes as well. Chemical plants that are still working. We're talking about [indiscernible], which is on the Danube, a couple of hundred meters away from the Danube, but you understand the idea. So the objectives of investments and developments that we see and we envisage were built in order to relate to entry and exit through and from the Danube. If we're talking about grains is different, Serbia in relation to Constanta will, of course, be transported via the Danube. The area from Serbia has a direct opening to the Danube Basin. In Romania, it's a different story. It's a combination of trucks, as we mentioned beforehand, silos in Constanta a lot of the goods come via railway and trucks, less via water transportation. So the development is constant. And we can't give out an estimation, we can't see an end of a certain development and then state that things will be stationary after that point. Who knows maybe if -- when a development phase on railway will be concluded, we would move on to a different type of development, but we don't envisage an impact and the option with Greek ports and Chinese contribution to these ports is not for us or we don't envisage it. Except for the end of the railway for Central Europe and maybe for Hungary, which is less important for us, containers from Serbia or towards Serbia are not transported on the Danube. Containers to the Hungary or -- to Hungary or from Hungary are not on the Danube. So the impact might be positive in the future because we tried to operate container transportation to these areas. And one of the main obstacles encountered relates to what happens to empty containers. So you take the container full from Constanta to Belgarde, let's say, or to another port where you can operate these goods. What happens when they return empty? If there are more flows, of course, then maybe you can avoid empty load transportation. Maybe that's when you can create a network of transportation routes that could balance out this discrepancy. This is just an example, okay?

Yes, this is very interesting. I'm sorry that you cannot -- I cannot join you tomorrow. I would have wanted to be, but I'm starting my holiday leave. Okay. Next question. Thank you, Cauis.

Can you tell us how the activity took place in the third quarter as compared to the same quarter from the years before the war? We know the third quarter is the best in terms of profitability.

Unfortunately, we cannot go into detail. We can say right now in relation to the whole half of the year, not necessarily about Q3. Without going into detail is that it relates to the situation of the markets. For minerals, in terms of minerals, we are still affected by the metal industry that has stagnated a bit. In addition to the plants that are closed, which we all know, the environmental conditions and cost conditions right now make the situation to be a bit stagnant. So that's the situation of our plants that are functioning right now. In terms of agricultural flows, the blockage is real, Russia and Ukraine have flooded the market. We are talking about the agricultural market at international level. So international markets are not convenient or good for traders who work in the Danube basin and now who are waiting for better prices. That's the situation. And the products in terms of what I stated before, we can already see that there is a good development in this regard. In relation to markets themselves, the transportation market is right now in a difficult spot resettlement period, let's say, the effect of the overcapacity from last year is showing its influence and our flows with Ukrainian grains continue not at the level of 2023, but these flows continue because our contracts are concluded for longer periods of time. And in terms of the market itself, I stated -- before, it is a resettlement period under shooting period, because in addition to the separation of flows, from Ukraine there is also an overall overcapacity state as for 2023, everyone hurried to buy fleets, there were huge volumes and everybody hope that these volumes would continue in 2024 and forward. This was not a situation. The volumes have disappeared the fleet remains. So that's why we have these issues in the transportation market. But of course, things will settle in this regard as well. On the medium term, you can't go with costs. You can go forward with costs. Of course, for a short period, everyone is running after cash. Nobody is analyzing profit, we're talking about the spot segment right now, which, of course, ready and affects us as well. But things will not continue for a long time. They can't. We don't know when the situation will become better in terms of conditions for us, but this is the situation that we can describe right now without, of course, referencing the third quarter.

Next question investments in Decirom. A question about these investments. When will the new story spaces be finalized? And how much revenue can we generate from external activities and how will we expand abroad?

So 3 questions. Decirom, Hungary and Austria and expansion abroad. So for the first question, I can answer. We started this year with a project in terms of storage units, which was inherited, let's say, it was envisaged for the older flows of Decirom. We replaced 2 new storage area units for these 2 new flows that will come to the Decirom, they are dedicated to these flows, they have long-term contracts in place for the first one. It will become operational in a provisionary way in a month, let's say, at a more consolidated level or in a more stable form probably at the end of the year. I don't know how to -- I don't have a precise date in mind. The second storage unit, we are currently debating and discussing -- negotiating. It's a different type of client environment. So both storage units have a client behind them, and one will be opened quicker and will start to function. The contract is in place, it's signed. So there is no hindrance in terms of exploitation. The second one, we're still working on the final form and position for the second storage for the second flow of goods. And in the meantime, 2 of the cranes of Decirom have started modernization works, one of the larger cranes and one of the smaller cranes at the low depth [indiscernible]. And for these flows that we are preparing right now, we carried out an acquisition that was not envisaged basically this entire flow did not exist on paper half a year ago. And we invested in 2 new motorized goods handlers, 32 tonnes capacity for each of these machines. So this is the current status of investments.

The second question was how much do we generate with Hungary and Austria?

Okay. Austria in principle is a company bought -- it's an agent. It's a broker for TTS and representative on the local market, if you will, for contacts with clients and so on information. So a small impact. And Hungary has a significantly good business. So towards 10% is Hungary, from the overall activity. But a large part of this turnover comes from railway transportation as intermediary, more -- if we will have opportunities to further invest in a foreign country, yes, of course. We take the opportunities that were given. We're ready. Our debt ratio is very low. And this allows us, as last year in 6 months, to go through the overall process when we see an opportunity will be there, and we will profit from that opportunity. The issue is with the opportunities -- as you go upstream on the Danube, the fleets are less and less. So yes, whenever an opportunity is available we have no issues in expanding our business, the quarter with the highest revenues, none of them, it's very hard to say which of the quarters is the highest. There isn't a perfect seasonality. In theory, but just in theory, the order should be for Q3, Q4, Q2, Q1, and this is because we have the downstream agri market. And there are blockages. We have harvests that can be higher or lower, but mainly the blockages in the agri market has an impact, of course, on transport and shipments. So we don't have a set before that. If around us, everything is perfect we should have Q3, Q4, Q2, Q1. When we are talking about going to the situation from 2021 or 2022. 2022 was the weirdest year. We had the war, the fees, there was a stagnation. In the second half, it was all about Ukraine. I don't know how to answer to you relatively to 2022. I don't know how to respond to this question right now.

The next question, which is the difference between the Decirom and Sochep.

This is a very interesting question. Both of them are port operators. Sochep is bigger as a surface, as vessels and stores and an advantage for Sochep is the old container terminal. And this was the only container before the investment in the South in Dubai Port. Sochep is active, operates a lot of containers. This is the main difference, actually, when we compare about the services, but Sochep is a number of times higher from all perspectives than Decirom.

The next question. What business lines could bring the call to the company in the 2 years, considering the European requirements to move the road transport to revert to the river transport?

How to tell you. The wish of the European Union to bring the goods to the river is just a wish. If we talk about the trucks in Romania, the fleet we don't have trucks. But if we look at the fleet, the estimates are two to three-fold increase in the fleet. In the trucks, we don't know. But we have a huge one in Romania, the fleet of trucks. I drove a longer distance throughout Europe, and I was scared. I didn't drive through the center of Europe. When I looked at the number of trucks that we could see, it's very scary. So the policy is one or the number of fleets in Greece or the river ways in Greece respectfully on Danube -- our Danube up to Hungary and all including Hungary, we don't see any transfer from a road and rail to the fit. What you see in the European Union is something strictly political. It has nothing to do with the reality. When we talk about road transport, investors will never let this happen. Yes, it will be nice. It will be a good perspective to move to transfer to the river.

If the volumes of transport from Ukraine decreased, where do we see the volume increasing in the operating port?

It's simple. It's sort of the answer. The port operating market has other flows and going to and coming from other countries. And we have the other 66% of Constanta port is by road and by rail. That's why port operating activities are more stable, and that's why we are focusing on that, but they are more pauses and destinations -- more destinations. The goods from Ukraine, it's about the fleet. So we have on barges, which is in Constanta. Included in grains, the Canopus terminal Decirom is by rail and road transported goods. Decirom 80% of the budget comes to -- so from there, we can see this discrepancy.

Mr. Mustafa, can you hear us? Yes, I can hear you. Hello there's a short delay, and I'm sorry about that.

I might repeat myself. So technical from the upgrading that was with the barges being covered, that were announced last year. This year, how many will they be upgraded? How many are included in the investment plan?

When talking about the upgrades, we're talking about covering the barges, And the engines, there was a problem in upgrading, modernizing to increase performance. When talking about modernization of the engine, this is a long-term process. We don't include that in this plan. The next capital repairs in 2026, we will be talking if we change the engines or we perform capital repair works. No interventions to vessels that were finished last year. This year, we don't have any upgraded plan. So when talking about barges, the covering process was stopped. There are a couple of them still made to be performed. We rather invested in 8 new barges that they are undergoing. So 4 are in the finishing stages this year. The new barges that continue the modernization process that we mentioned a couple of years ago, we want to get rid of all the slips in our fleet and replace them with barges. This is the situation currently. When we're looking at the revenues and profitability, this year we pay more attention to the investments, new one or nonurgent one this year. The second question is about the [indiscernible]. The transport on the Danube, of course, it will be affected in the second quarter than in the first quarter -- will be without disclosing details business insights, we look -- we're looking in the media. The navigation process is not stopped. There we have a convoy of 6 barges -- it's opened and 2 barges, 2 x 2 enter -- they are more in Serbia. There are actually steps, so there we can see barge by barge. This year started later. In July, there was an impact, a negative one. The first semester was optimal. So the situation is not perfect. It is not wonderful but the drainage are being performed by the Bulgarians, they are draining. So last year, they performed that, also this year, but they reduced capacity this time. Them and us if we talk about this process. Probably, there is financial aspect to it. So it's about a budgeting issue.

And the second crane is it operating?

Yes, yes. It's performing. It's operating from last year.

So the decrease on grain from Ukraine, are they justified in this year?

There are some nuances here. In Constanta, we have 3 cranes. More performing cranes old. So plus 2, this 5 cranes, we also had 3 regular cranes. And at maximum, we had 2 from Galati, who are additional. Now they're back after the maximum -- after the peak, they went back. So now we have 5 big cranes, 3 smaller ones, which are not that performance when required. The decrease in the operating side was not as big as transport, because the goods do not come only from Ukraine. Here, we're talking about grains. The goods also from Ukraine. We still have goods from Ukraine. Also on the Danube and this is being operated by other port operators, they don't have their cranes, floating cranes. So now increasing our capacity in terms of operation, we manage our goods, and we also offer services in terms of operation to other port operators from the Constanta port. So there is a balance, if you will, that changes every day. I would like to add something that was unclear from last year. These floating cranes are not aimed only for operation outside -- they can also work, so -- at Canopus, we work when needed simultaneously from the terminal and from the floating crane in order to increase our operation speed. So wherever needed in our port or for others, it helps the terminal or another operate quicker. And there are situations such as last year as the cape size that we conducted -- right last year. So our part -- [indiscernible] was part was done by us at our level. So they work not only for Ukrainian grains, so they can be utilized at any terminal, thank you, very useful. I think it was unclear.

Yes, it wasn't clear because as we are not experts in terms of sea aspects, we saw that those floating cranes are only used at sea. We didn't know that they can be converted to be used in other ways in terms of [indiscernible], for example.

Moving on, let's see. Financial impact to these new contracts? We can't -- or before we move into detail, I would like to state something that our contracts in principle are based on certain work programs in terms of ores, minerals, so people know that next year, 7 ships will come, 1 in April, 2 in June and so on. And based on this, we work -- that's why we work based on the program of the client. It's difficult for us to establish how much of the turnover, what percentage will be brought in from these contracts. So the figures are stable. When such a flow appears, I can -- for example, I can tell you about one of the flows that we already have from the perspective of the client, they start out for a period of 5 years. But we can now in 2 years, for example, the client can now in 2 years, what volume this client will operate. But we have an overall picture of the volume because we know what storage units we require in order to carry out this contract. But we cannot give you specific or concrete figures. It's impossible. Moving on, will we move to sea transport? Does anybody want to answer?

The young people of the team. Maybe it is possible in the future to include this aspect in our structure. In theory, of course, it's always easier as compared to in practice. Sea transport is different thing all together as compared to river transport that we conduct right now. We are open, but -- we can't do such a shift, carry out such a shift so easily. It's a huge market, a bigger market, very competitive. You need specialized staffers, and you also need a long-term project and a very long-term project as well. I would say that it is in our mind, we are thinking about such a project for the future. We cannot give you an answer right now.

Let's allow Mr. Martin to ask his question. No, before, Mr. Martin, let's take another question. So negative impacts of the amortization of the Decirom.

So there are 2 aspects. First off, the Decirom came with a huge amortization value. I don't know for cranes, what is the right of period. So 14 years, that's huge. Investments that we inherited, the 3 cranes acquired by Decirom before we took over the company will be reflected in theory in the next 14 years or after 14 years, it depends because this does not mean that amortizations will not increase. Of course, they will increase, we come with our own investments, but in terms of the group, they are not as relevant or it's not relevant. As that Decirom is loaded with the write-offs and amortizations, it means that we can -- we did not buy Decirom for dividends. We bought it for to operate and for it to give us this support in the port of Constanta. That's why we don't call it -- that's why we call it an investment for the next 100 years. There's no going around it.

The next question, Mario Martin, let's hear out. Mr. Martin, you have the floor. Can you hear us? Let's wait for Mr. Martin to intervene. Mr. Martin, can you hear us? Let's move on to the next question, and then we can come back. Georgio -- modernization, what the advantage is?

Okay. So this modernization has 2 phases. One that we already concluded, the one included -- other one with European funds. We still have our next steps that are difficult. And the second, there is a project initiated by the Ministry of Transportation and Port Authorities at Georgia that replaces one structure with a vertical one. And it brings forward 20 meters in terms of platform, additional platforms. The advantage brought forward by the second phase of the modernization relates practically to increase in terms of port operation activities, so a larger surface to conduct operations. And if we have such a vertical structure, we can eliminate the issues that we had in terms of operation with the previous structure because low water can always lead to issues when you have the current structure due to the further distance from the shore and so on. So these are the 2 main advantages. The advantage of vertical structure and the advantage of a larger surface for operations.

Next question, let's see the question. We can see it. Good. So can we give a rough guidance in terms of volumes outlook for this year? And if we have -- if we can revise our expectations for the long-term growth?

In terms of long-term growth, I can answer. Okay. So long-term wise, I repeat it's good for us to -- and it's best for us to analyze previous or all the variations, 2021, 2022. 2022, of course, is maybe a higher growth as compared to normal development because the Ukraine appeared in the second half of the year. As time passes, you will see that hike caused by Ukraine will disappear and the development will recover. After normalization, it will be as before 2022. 2021, it's difficult to pinpoint the event because 2021 was a special year. Moving on in terms of volumes for this year, more information than the information included in the report is not possible for us to give. It's what we mentioned beforehand regarding the situation on the market and so on. When referencing the question related to the budget rectification. Yes. So we're talking about the Danube and the Black Sea. We are as opportunistic on the Danube as we are on the Black Sea.

Let Cauis has a comment, not a question. Considering the solid financial position, do you believe that the share buyback program in order to -- for their allotment will be opportune at this pricing?

I don't know what to say. At this moment. We do not plan to make a share buyback like the one on the New York Stock Exchange, where everybody instead of investing is buying back the shares, so that they artificially increased their dividend. So we don't have plans regarding this -- the sustainment of the price on the market in this moment. In comparison to the American market, we have more long-term benefits by investing and not in the absolute profit.

This question has been answered already, do you see new acquisitions?

Yes, if the opportunities arises, we will be ready. So the debt ratio is very low. The banks want to finance us, but we need to find the key opportunities.

How much from the expense and revenue budget do you think you will obtain this year as a percentage?

We don't know, when the deviations will be significant. Yes, we will consider updating the budget. But in the third quarter, we need to see clearly what is going on, and we need to report that. Because it would be like acting before the publication. There is a news in the media, the Romanian government are fighting the Ludogorets Razgrad from [ Bulgaria ].

Yes, I also run this article. It's not good to comment on such issues just because of information. We loaded in Georgia port. It's a small port. That's -- the Moldova Republic and that operates all goods. They also have containers -- it's a small port 7-meter traditional bet what other strategic interests are for our government for this acquisition. They want to sell it, the EBRD wants to sell. We -- at TTS, we don't have any interest, direct, immediate or strategic in having a participation in this project.

I think we answered all the questions. And thank you, that we can go back to the conference this year. We're participating there. Thank you for participating. Of course, the recording, the video and audio and the transcript will be available on the Internet, when they will be published, we will communicate via the newsletter or in any other way. Thank you very much, and we will see you after the next report. [Statements in English on this transcript were spoken by an interpreter present on the live call.]