TTS (Transport Trade Services) S.A. ($TTS)

Hello, everyone, and welcome to our video conference regarding Q1 results for 2026. I am joined by Mr. Ion Stanciu; Mrs. Miruna Mihailescu; Nicoleta Florescu, CFO; Mr. Tudor Boboc, IR Specialist; and Mrs. Daniela Maior, our consultant in what concerns IR and communication. As you are accustomed by now, we are going to list the results, the financial results and the overall market situation, after which we wait to hear from you to hear your questions. So what am I supposed to do read the title card. Yes. So let's move on. So Q1 2026 was a difficult quarter in what concerns market conditions, but they show a stabilization trend. Aggregated rolling 12-month volumes remain -- our aggregated volumes remain between 10.24 million tonnes, 10.42 million tonnes over the last 4 quarters. So that's the analysis. So our volumes are tending to stabilize. We also saw a slight increased trend in terms of average tariffs started in Q3. This was manifested continuously throughout 3 quarters. So average tariffs as of Q1 2026 were more than 3.1% as compared to Q2 2025. Mineral cargo flows increased plus 27% in Q1 '26 compared to Q1 2025. So continuous growth. The main reason relates to accessing new cargo flows by TTS, not necessarily an increase in what concerns volumes overall on the market. Agricultural cargoes decreased continuously, reaching minus 28.6% as compared to Q1 2025. And chemical cargo flows have been on a slight downward trend since Q2 2025. Now we are at minus 9%, reflecting the effects of tighter international sanctions regime. The operational mix for the 12-month period remains stable, 42%, 43% river transport and 57%, 58% port operations in the last quarters. And the cargo mix -- so the cargo mix for rolling 12-month period, 64%, 65% industrial cargoes, namely minerals and chemicals and 32%, 33% agricultural cargoes. In what concerns the financial side, indicators improved. So profitability indicators improved both at consolidated and individual level. Group level indicators have returned positive territory. Rolling 12-month operating cash flow increased across the board and stand-alone level and revenues decreased by 0.4%, driven by a 1.3% decline in volumes, which was partially offset by higher tariffs. Profitability margins have been improving since Q3 with more significant increases at consolidated level. Now let's move on to the financial data. So Q1 2026, as you can see on the chart, as published in our reports, is the first quarter after a long period in which the results for the 12-month period at the group level were all positive, RON 19.3 million result -- operational result and EBITDA RON 102.5 million for the 12-month period. Margins substantially increased as of Q3 last year from 12.5% in Q2 to 15.8% in Q1 2026. Again, we are talking about EBITDA for a 12-month period. The profit margin increased. It moved from the negative territory towards a positive territory after a long period of negative values. At quarterly level, again, we had a small loss, RON 2.2 million, but the margins at quarterly level have reached 14.8%. The biggest margin in the past year was in Q3, but this relates to seasonality. It's not something that can occur each quarter. At individual level, the margins for the 12-month period seem to be stable between 10.2% and 10.6% in the last 4 quarters, EBITDA margin and 6.8% increasing profit margin has reached 7.2% for the 12-month period, so higher than the fiscal year 2025, 7.4% in Q1. So Q1 was slightly weaker than Q4, but when discussing, analyzing the 12-month period, all indicators show growth. Another important aspect to mention from our point of view, liquidity increased, more precisely increase of cash from operations in the past 12 months at consolidated level, where it increased from RON 54.9 million in H1 2025 and it reached RON 86.5 million in the first quarter of 2026. Again, at TTS individual level, we moved from minus RON 24 million in Q1 2025, and we reached a level of RON 42.4 million in Q1 2026, so measured based on a 12-month period. And cash value at the end of the period in Q1 2026 was higher when compared to all 4 previous quarters at consolidated level and at stand-alone level as well. As I mentioned, in terms of revenues, we saw a bit of a recoil as compared to Q4, and this was reflected in the 12 months revenue value as well. And this is due to a slight reduction in terms of cargo goods, cargo volumes compensated by tariff increase. Moving forward to operations. Here, you can best see the stabilization of our cargoes of our volumes between 10.24 million tonnes in Q2 2025 and now 10.28 million tonnes in Q1 2026. And then what concerns cargo mix, you can see the stabilization in what concerns transport and operations, 42%, 43% river transport, 57%, 58% port operations. And what concerns cargoes, agricultural cargo decreases in weighting. It has reached 32% from the total volume. Industrial cargo has increased 64% based on our strategy to reduce overall volatility and what concerns volumes and the financial side as well. Separately, when we look at the cargo mix, you can see that industrial cargoes have continuously increased in the past 4 quarters. We are talking about volumes in the past 12 months and agricultural products have decreased continuously from 4.6 million in Q1 2025 to 3.32 million in Q1 2026. And the best development was registered by mineral cargo. They continuously grew as of Q2 2025 from 3.67 million tonnes Q1 2025 to 4.66 million tonnes. And when discussing chemical cargo, there is a slight decrease trend. So in Q1 2026, 1.98 compared to Q2 2025, 2.18 when the first measures related to sanctions were applied. This is our brief presentation of the quarter overall. And now we are here and waiting for your questions. We are here for details.

[ Mr. Paraschiv ], we have an increase in EBITDA of 64%. How much of this improvement is structural? Which level of EBITDA normalized should we wait for in the medium term?

In the first section, there is a structural change from the first quarter of 2024 to optimize the whole group. We saw reduces in costs on river transport, 30%, I think, when compared Q1 2025. So we have a decrease of 30%. I'm not sure, do you have the figures? When looking at the port operations, we have a decrease in structural costs. They're not temporal. Starting with Q3 last year, we have reached a cost structure and an expenses level, which is very competitive at the market level. We aligned to the market practices because there was no other solution. We have a 14% on the budgeted figures, 14% is the level of EBITDA increase. And let's be a bit more philosophical. We have strategic principles that we are continuing to implement, and it has to do with everyday life. As beautiful and young we are, one of the principles is to be as stable as possible in everything we carry out. And that's where we saw the decrease in grains. In the agricultural market is more and more volatile. We need stability, and we found it in the industrial products. And the second principle, which is fundamental, and it applies to day-to-day life. If you spend what you have or you produce what you need to spend. If we cannot produce any more higher levels, we need to balance with expenses what we can sustain for real so that we do not affect the capacity. So we saw that in 2024 when we started taking and implementing the first measures. So it's not only here in Bucharest from the Bucharest headquarters like a legislative manner. So we talk to our colleagues in the subsidiaries and then we implemented them. And we are now and having controllable and controlled expenses. We are optimistic that we can keep this level of expenditures. It's a structural change. Of course, there will be variations up and down as per our activity levels. For the grains, for example, we can see in exports in the volumes in Danube, we will have additional costs in fuels, in transport. So those will increase in the absolute value, but we will keep it at that 30% overall as weighing.

I will ask Mr. [ Christian ] [indiscernible] also. The reducing of expenses with personnel and third parties. Is it sustainable?

Yes. But in an actual constant implementation, it's not just a number. And everybody has to follow that number under any circumstances. So we have to look at our capacity to generate revenues and also to incur expenses.

[indiscernible] wants to talk.

Can you hear me?

Yes.

We have a question about one line in the P&L about consumables. Just a second, please. You had the goods sold increase that was significant in the finished goods. So this cost is correlated to the activity from Agrimol subsidiary, which has a typical activity, and it sells wood. It trades good -- wood. So it has to do with the value of the finished goods, but it increased also as the weighing.

Yes, because it had an increase in the activity. They had some additional exports and also the turnover increased. So those are proportional. More volumes, more cost for the finished goods. This is in the others segment.

As a confusion, it doesn't -- it's not related with the fuel cost.

No. So it's raw materials and materials.

This is clear. Looking at the budget, you have a better visibility now in the agricultural sector. Are the hypothesis still valid that you outlined in the budget?

Yes. The second quarter is weaker than the first quarter normally. And then Q3 due to the agricultural harvest, it's higher than all the other 3 quarters in the year. And this year seems to be the same. If on the mineral side and chemicals one, industrial, we see a stabilization. We had a hit with, of course, the Gulf war, which affected the fertilizer market. The other minerals evolved in line with the estimates we had. So we see a stabilization we hope up to the next -- the end of the year. As per the data we consider for the budget. For the agri products, of course, very unpredictable. We're looking at the history, partly somehow also information from the market, from the clients. This year, we can tell you that it's not typical as per the last 2 years. It's very close to a further period. We had a winter with snow and humidity, then spring, which is also -- was also humid and in these conditions, the summer harvest seems almost is actually, except for a catastrophe. So we look at the Rapeseeds and at the grain we'll have a very good as per last year harvest. So we expect massive export volumes. Corn is a bit uncertain. We need to see the temperatures in June and July to see if they materialize or not. So we can answer this question at the beginning of August. On paper, we will have grains for export. The problem is, as you could see in the media, those are public information. The past year has been a chain of bankruptcies of the great intermediaries of grains in Romania. There are others with big problems and they provide unpredictability. And this year, there is uncertainty about how the logistics plays out because between the multinationals and the farmers, it's almost a void because these intermediaries have disappeared, and we are a bit afraid that will be highly exposed to truck road transport. So now we have quantities or even higher that we budgeted at the beginning of this year. And this data refers to Q3. As Mr. Techera said, it's a bit too soon to know how we will fulfill or not the budget figures this year. We will look at Q2 preliminary report because then we will have a clearer view on the grain traffic that will be transported this year. For now, on paper, things are the same.

Talking about the road transport. So these companies that import from Romania, don't they take care of the logistics, but -- or who manages the logistics aspect? Isn't it a chain or is it very affected?

It's very complicated. We talked to the leaders of the grain transport. The farmers are large and small. The large ones have their own -- there's only a few of them with 10,000 hectares that transport their own goods. But the medium and small ones, they don't have the capacity to transport their goods to Constanta only by road, by truck. You need to get to Constanta, then you have the river transport. This also happens very well organized for them. the local farmers, Mania or whatever, they have an easier access to trucks. And there, they sell the goods to the highest bidder for a multinational company to organize as such to go to each farmer, it means a very high effort as personnel and geographical covering. And the clients say, for me to collect all the goods, and I cannot justify that work force that is required for us to -- and we don't know. So things are currently unfolding. So they receive the cargo. They take them on shorter routes. And this is easy to manage. But things get complicated when we talk about organizing longer routes.

I understand. And you were saying that at quantity level, you have a better visibility and you are reaching a similar level to the level of last year. So why are you still doubting if you will achieve the budget?

Well, Nicoleta was talking about lumber. The company that produces lumber has contracts for this year that modify their turnover buy an end value, a beautiful end value. And then the Gulf war started. When the Gulf war started, the company conducted huge efforts to help the cargo reach its destination and then it stopped. A lot of things can happen. Grains market is volatile. We have a huge surplus on the market in autumn. Nobody knows how things will develop. Nobody knows what will happen with the Ukraine-Russia relationship. So there are so many variables, so many uncertainties that we would be unprofessional to say, yes, we can achieve the budget. We can simply say that it will be better than now. At the beginning of Q3, we are optimistic enough to say that there is a positive trend. But of course, there is fear that things might change. There was a drone that exploded today, this morning in a place, of course, that was far enough to not affect or impact infrastructure. So things are uncertain.

I see. Okay. So we will, hopefully, have more visibility during the next call.

Yes, definitely.

And the next question, I believe is answered -- has been answered. Do you believe river transport on the Danube can be affected by the Ukrainian war next year if things continue with the Ukraine-Russia war? Yes, the same impact with a slight difference that probably river transport capacities existing on the Danube today will decrease -- will probably visibly decrease as compared to the previous year. There are no further questions right now. Okay. So another question has appeared. Can you add comments related to development of minerals and chemical cargoes?

Of course, we can add some comments in this regard. We do not possess information, public information or private information that [indiscernible] will restart anytime soon their activity or at all. Once we saw that their activity is stopped, we tried to continue to reactivate older discussions because these were additional cargo flows. And the advantage of these additional cargo flows is -- okay, they're not constant, but they are more constant as compared to other cargoes. So fertilizers, seasonality, agricultural goods seasonality. So 2 new cargo flows have entered into operation in August, they will be reflected in results at a monthly stable level, tens of thousands of tons [indiscernible], the unit is working, but at half capacity as far as I know, it's working. It's stable under current conditions. The rules regarding carbon emissions, we don't know them yet. They could impact our activity. Import of finished products via Constanta is stable, somewhat stable. But on the other side, you see Ford Dacia have laid off a lot of people. So there is a lower consumption level in terms of sheets via Constanta port that we operated with the help of the [indiscernible]. Constructions are going as we all know, but raw materials, concrete and so on comes from import. If constructions continue to show low development, then we will see what will happen. The Gulf war has affected cargo flows. We had fertilizer products from China. They have disappeared right now. The Gulf, obviously, nothing coming from there. Russia nothing is coming from Russia, except for unsanctionable categories, and these are very few overall in number, so exempt from sanctions. I don't know how to call this situation. It's something out of our control. It's unpredictable. And grains are unpredictable due to seasonality. So for industrial cargoes because we are starting to distinguish between industrial and nonindustrial cargoes. So in terms of industrial cargoes, we can count on stability with fluctuations, of course, but slight fluctuations. namely for this year and next year. And who knows, maybe we will have a surprise. Maybe [indiscernible] will start activity again. But for other cargoes, things, as [indiscernible] mentioned before, so uncertain.

And another question from [indiscernible], details regarding investments, Decirom and Canopus. Are they according to plan? [indiscernible] can go more into detail. Canopus, I am closer to Canopus, so I can give you more details. So Canopus right now is will -- so mid-July, we will start trials for a part of the new silo. So by mid-July, it will be finalized. The investment will be finalized, and we will start also trials with cargoes for the first 3 [indiscernible] because you can't conduct trials for all of them at once. And our [indiscernible] colleagues have allocated already volumes, and we will start at the beginning of June. Then after 1 month first trial, we will enter into operation. So in July, somewhere in July, everything will be concluded. and almost half or at least half of the silo will be functional. The new capacity, we changed certain weighing units and devices. So the investment is more comprehensive. Who wants to visit? So if there is anybody interested in visiting, it's worth a visit. And then what concerns the [indiscernible], the second crane on the refurbishment will probably be concluded in autumn. So we are trying or we are preparing ourselves to access European funds. We want to apply. Yes, because the accessing is another thing. We want to apply for European funds for refurbishment, only electrical cranes. And right now, at the beginning phase, we have a project for a multifunctional storage unit. We haven't decided the technical solution yet, which will actually serve several fats so that it can be used for several types of cargoes. So this is the situation right now. There are no other questions right now. Let's wait a couple more minutes and see if any other questions appear. And if not, in 5 minutes, we will close the session. So no other questions have arrived. We can close the video conference. Thank you for participating. Thank you for sending your questions. And we are going to see each other at the video conference for the first half of the year. Goodbye, everyone.