Wallenius Wilhelmsen Asa

Good morning and welcome to second quarter presentation from Valerius Willemsen. We will have a few slides to show you first and then a Q&A afterwards. If you're in the audience, you will get the chance to ask them. If you're on the link, please type it in in the chat and Anders will bring it up to us after the presentation. First of all, I must say I'm incredibly proud to stand here on behalf of 12,000 people and look at what we delivered in the last quarter. It can sound like an easy job, but it's not. I can tell you that the care and the challenge and the commitment in this organization is unique. And we have had plenty of reasons why we should not deliver a record quarter, but we were able to do that. So I'd like to reach out and say a big thank you to the organization. And then let's jump into the presentation itself. The highlights, we are delivering EBITDA of $507 million in the quarter, an all-time high. We are extremely pleased to see that the positive development in both government and logistics is continuing, and they are now a solid part also of our earnings. We are declaring a dividend of 61 cents for the quarter, and that represents 50% of the net profit for the first half of the year. And in line with our new pay-as-you-go dividend policy. Good morning and welcome to second quarter presentation from Valerius Willemsen. We will have a few slides to show you first and then a Q&A afterwards. If you're in the audience, you will get the chance to ask them. If you're on the link, please type it in in the chat and Anders will bring it up to us after the presentation. First of all, I must say I'm incredibly proud to stand here on behalf of 12,000 people and look at what we delivered in the last quarter. It can sound like an easy job, but it's not. I can tell you that the care and the challenge and the commitment in this organization is unique. And we have had plenty of reasons why we should not deliver a record quarter, but we were able to do that. So I'd like to reach out and say a big thank you to the organization. And then let's jump into the presentation itself. The highlights, we are delivering EBITDA of $507 million in the quarter, an all-time high. We are extremely pleased to see that the positive development in both government and logistics is continuing, and they are now a solid part also of our earnings. We are declaring a dividend of 61 cents for the quarter. And that represents 50% of the net profit for the first half of the year. And in line with our new pay-as-you-go dividend policy. We announced in the quarter that we have agreed to sell the Merritt terminal. And I will come back to that in some more detail. We placed an order for another four vessels. Total now of 12 Shaper vessels ordered. And we have had some changes in the management team. Mike Heinekamp, who has been running logistics, has been appointed chief strategy and corporate development officer, really working closely together with me and the rest of the management team to run the changes we need to deliver on new services to customers. And John Filito will take over as the COO of logistics. He is today running all of our vehicle processing activities in the Americas, the biggest single business unit in logistics. And then we have Levers, Torbjörn Vist, resigned by the end of July. He's moving out on an island nearby. But all in all we are very proud to deliver an all-time high EBITDA and we reiterate that we're quite confident that 2023 will be somewhat better than 2023. So then let's jump into some more of the details. Normally we don't talk that much about strategy but I wanted to give you a A little bit of an update on what we're working on, that we are also working on positioning Valerius Williamson for 2027. We have said that we want to be our customers' first choice in shipping. We believe we are, and we think we have solidified that. We're now ordering 12 vessels that can run on methanol when they are delivered. It's not ready for, it's real stuff. We have a clear strategy of being the preferred partner to our customers when it comes to finishing of vehicles, handling of vehicles, and high and heavy. And we see that our customers increasingly now are buying these services. The business area of logistics is growing. And the sale of Merat is not a sign of less investments or growth into logistics. It's purely a consequence of taking value off the table when we have more of a financial than a strategic holding. We have set up a complete new team of new top competence within digital and supply chain, recruited people from Polestar and Volvo and Lincoln Co. and others to really drive the digital agenda where we see our customers need a lot of help and where we see there is a big growth opportunity for us going forward. Then last but not least, we are delivering on our goal of reducing emissions. Last year, we used around 1% of biofuel mix. This year, more than 10%. And this year, our customers will pay more than $50 million for us to reduce emissions. We are growing with the partners we want. We are turning down customers and we are increasing volume with those who are joining our journey. And we are now, as you know, in negotiations with new contracts. And we're very happy to see that companies like Hyundai and Kia and others consider us a key partner and a strategic partner. And they actually want to grow with us. And then, last but not least, as I said, we are now setting up a unit. We realize that for us to really reach our strategy of being the post-production partner to the big OEMs of the world, we need to restructure our data, our systems, our processes, and our structure. And that's exactly what we will do over the next year or two. So we are also progressing well when it comes to delivering on our strategies. Then to a bit more of the hardcore for the quarter. The running 12-month earnings are continuing to increase. All-time high now of 1878. And we are paying a substantial dividend this year. For those who remember, we changed our policy We had an annual dividend where we, the following year, paid out the dividend in two tranches. So for 2023, we declared a dividend and we paid out in two tranches. One has been paid of $0.68. And then we have another one coming in August of 46 cents. In addition, we're this year declaring, this first half year declaring 61 cents. So altogether, if you hold a share of Valerius Williamson in 2024, you get a dividend of $1.75 for the year. So an extraordinary year in terms of dividend as well. A bit more details on shipping. On the green bar on the left, you can see that the volumes are somewhat up. We had a challenge with the Red Sea in the first quarter. That has stabilized, still there, still about 5% of capacity gone, but it has normalized. We were able to set up the trades efficiently, and we see that that's driving volume. High and heavy share is stable, and I'll come a little bit back to that. Earnings are increasing. This is because we are now seeing that there are coming new contracts and new rates into our business. The net rate, the blue line, is now pushing up to 60. But also we see that on the earnings of the vessels, we are now on a record high of $56,000 a day for the quarter. And this is partly due to new contracts and new rates, but also that we are now increasingly moving volumes for customers with higher paying contracts. Global production of cars has seen a slowdown. So despite that, they're still very tight in our segment. We saw in 2022, and in particular in 2023, that there was an overproduction of cars in the world, and the inventories increased substantially. So the global sale of cars this year expected to grow somewhat 2%, but the production will most likely go down with 2% to 3%. Meaning that we are now, as we speak, if you follow closely in the US, in Europe, there are a lot of campaigns on newly built cars to get down that inventory. The best analysis we can get, and also when we look at other analysis, is that we will be able to do that during this year. So as of next year, we will be back to global production. We'll grow more or less on par with global demand for cars, growing with 2-3% a year. The reason why it's so tight is that Asia in general, and China in particular, continues their growth. There's been a lot in the news lately about China and EU and EV tolls. That is right. We have seen over the last year, if you see the green at the bottom, that the volumes into Europe has flattened. But year over year, more or less every other market from China has grown with 30%. So the Chinese growth in car exports is not only linked to Europe. It's a global phenomenon, and it's growing tremendously, and we expect that to continue to grow at least for a while. I said I would come back to the high and heavy volumes. These are actually over high and heavy volumes, what we have recorded, how much we have moved. And as you can see, we are more or less since the peak plateau a year ago. Our volumes in high and heavy are down by about 15%. meaning that there is less cargo to be moved. This is due to softening in the agricultural industry. Farmers are investing less in equipment right now. It's a softening in the construction industry, as we all know that construction is softening. Mining is still holding up. It is our firm view, though, and also the feedback we get from customers, is that we are probably now at a new, call it low normal, and we expect a rebound in volumes into 2025. Meaning that we don't expect any further fall in high and heavy volumes. And if anything, there is an upside in these volumes. Having said that, we are able to replace the high and heavy volumes with very well-paying car and other type of volumes. So in terms of earnings, this has not proven to be a big issue for us. The other book is a big discussion theme in rural shipping. And yes, it's big. And yes, it's growing. Also in the last quarter, we had new vessels coming in. We have now more than 40% of the capacity on order, which of course is historically high. Not the highest on record, but historically high. But we did a little bit of a calculation to try to figure out why is it still so tight and what do we think for the next year. And if you take the end of 2023, you add in the tonnage that is delivered this year, then we adjust for the fact that 5% of the global capacity had lost due to the Red Sea, and we think that will continue for the year. And this year we expect a 10% growth in global demand. we have actually seen a tightening of the market in 2024. And this is just a theoretical assessment, but if we assume that we were 100% sold out by the end of last year, we should be more than 110% sold out by the end of this year. Then adding 11% of fleet growth next year, even with no growth in global demand, we're probably back to more or less full utilization of the fleet. We have just for illustration put in 5% growth, meaning that we are still having less capacity in the rural segment than demand requires. We see that the volumes are not shipped. We see that they are shipped in containers and in other modes. And our customers tell us that is not their preferred option. So this is why, yes, the order book is big and over time could become a challenge, but for the next year or two, we see expect still a very tight market. We also see that from our customers when renew contracts that they are very concerned about getting access to capacity also for 2025. Talking about customers, we are renewing a lot of contracts this year. 45% of our 2023 volumes are up for negotiations. We have announced one contract which was successfully closed at what we believe are market terms. We are continuing dialogue with others, and if anything, they want us to grow with them, not reduce volumes. And we see that rates are reflecting the market. So we are quite confident that we will be able to close the contracts we are working on for this year. The majority of them will be coming into our business at the beginning of next year. Next year is a much smaller renewal. We have about 15% of our volumes and then another 15% later. On logistics, we see high activity level. On the left side, you see the production volumes in the US. They are more or less back to pre-COVID levels. We are... Sitting at the end of the factory lines, we are dealing with cars produced in the US and North America and bought and used in North America, never seeing the sea. This is a big market for us, a big activity, and this is growing. And that's what you see on the right-hand side of Nolto. We have increasing volumes and also increasing margins because we are doing more. We are making more heavy installs in the cars and we get better margins for those installs. When it comes to high and heavy, we have seen a slowdown in volumes on the shipping. I showed that. On logistics, this turns out a little bit different. It actually turns out in terms of resting time in our facilities. So the high and heavy equipment rests longer with us, gives us decent income, but somewhat lower margin than what we get when we're actually building high and heavy equipment. But still, pretty good earnings and activity in high and heavy. Terminals increasing, partly due to the opening of the Brunswick terminal that we announced earlier this year, which is a significant and the biggest terminal in the US and now runs at more or less full capacity. Volumes a little bit muted by the effect of Baltimore being shut down, but that is now back to full operation. And our full terminal network is now up and running. Inland is more of a brokering and middleman business with lower margins and has less impact on the bottom line in logistics. MIRAT, I promise to come back to that. MIRAT is our public terminal in Melbourne, Australia. We are running that basically on behalf of the port of Melbourne and the industry in Australia, meaning that this is run as a complete separate business. We have a business model where we are integrating services for customers. And if you go to see Bruges here in Europe, you will see processing of cars and high and heavy equipment. Even we have logistics and other type of handling services inside the terminals and out of the terminals. Mirat, we need to run completely separate and has no strategic link to the rest of the business. Has been a very good financial investment, but as it doesn't really relate to our strategy, when we were able to capture a price which we think were very attractive, We agreed to sell for 220 million US dollars. We expect to close that deal by the end of this year, latest early next year. And what's pending now are approvals from the Port of Melbourne and also from governments in Australia. Obviously, we will have a significant gain from that sale. We have communicated that, and that will add to the dividend capacity and the dividend policy for second half of this year. if we're able to close it. Then quickly on sustainability before Torben comes in. We are very proud that we in June were recognized with an Ecovadis Gold. This is a label that is put on companies where they do an exceptional in-depth wide study of everything we do on sustainability. And to get a gold, that's 5% of the global companies get a gold award, and only 3% win in our industry. So the fact that we are awarded or recognized with gold tells us that we're doing a lot of right things on sustainability, which is also demonstrated by our numbers. If you look at our emissions, we are delivering consistently lower emissions. We are actually ahead of the targets we have set to reduce by 45% within 2030. And we see improvement both in terms of absolute emissions and relative emissions to the transport work we do. Safety is our number one priority. We see that we have continued a good performance in shipping, somewhat uptick in smaller incidents in logistics over the quarter. But we are still below the target for the year. And we see over time a steady decline in incidents and accidents across our business, also in logistics. So with that, I hand it over to Torbjörn.

Thank you, Lasse. Good to see everybody. I see some tanned faces in the audience, which is always a good sign after a summer holiday. Very pleased to be here to talk about the second quarter results. Turning to the highlights, this has been a phenomenal quarter. This is the record quarter, and this is despite some of the lower volumes that we have seen following the rerouting away from the Red Sea. More pleasingly, of course, is the fact that we have strong contribution from all segments. And in a system like ours with, you know, ocean, land-based, as well as government activities, it really is pleasing when everyone is firing on all cylinders. The revenue for the group came in at about 1.4 billion US dollars, which is up 8% quarter over quarter. And the adjusted EBITDA came in at 507%. which is up 16% in the quarter. Our cash position was down 212 million, and this is due to debt service as well as the dividend payment that took place during the second quarter. We continue with debt service as a result of which net debt ended up at 1.8 billion. The proposed dividend for the first half of 2024 is 50% of profit for the first half, which came in at 516 million. Hence, the dividend is 258 million. And this dividend will be paid along with the second tranche of the 23 dividend on October 10. As announced before the summer, we have restated our financials due to the accounting for the UCORP put call. This has impacted some of the key financial targets, and I will come back to that later in the presentation. But all in all, we continue to deliver very well on all financial targets, being ROCE equity ratio and the leverage ratio. Turning to the segment performance. Shipping reported an adjusted EBITDA of $409 million, which is a record quarter. for the segment. The 12% increase in adjusted EBITDA is linked to a combination higher contract rates as well as higher volumes in the quarter. Logistics reported revenue of 315 million, which is up around 5% in the quarter. And this reflects steady throughput of auto and storage revenues. Costs were almost flat, leaving adjusted EBITDA at $60 million, up 30% in the second quarter. In the result, there is around $2 million worth of positive effects due to a legal settlement in one terminal, as well as some government grants in Baltimore as a result of the bridge collapse. Government, we all see the geopolitical activity, and there is continued high activity in this segment, and the adjusted EBITDA ended at $48 million, which is up 43% quarter over quarter. So turning to the restatement of accounts and the treatment of the UCOR put call options, our financials for 2023 and the first quarter of 2024 has been restated following the change in accounting principle. The graphs at the bottom shows the impact on the equity ratio and the return on capital gains. employed as at the end of 2023, just as an illustration. If you look at the equity ratio, that obviously took a fairly significant hit as a result of posting a big number to the shareholders' equity, while the return on capital employed increases as the denominator decreases with the reduction in equity. If we look, and just for your information, if you want to deep dive into these things, they're listed in note two of the financial report. But just going through some of the adjustments that were made to our Q1 2024 financials, other non-current assets of 82 million was removed. This was the old way of accounting for it as a net asset. A put option liability of 847 was recognized in Q1. Just for information, that number is now 826, essentially due to FX movements in the quarter. On the equity side, we have reclassified $316 million from non-controlling interest linked to UCOR, and the balance of $613 million has been booked against equity attributable to the owners of the parent. The sum of the equity reduction is 929 million at the end of Q1 2024. And there is also a small P&L effect as we will no longer recognize value changes in the put call structure through the P&L that will be taken directly to the equity now going forward. So all the accounts have now been restated and will now form the basis of our accounts going forward. Looking at the revenue and EBITDA bridge, touched on some of these already, revenues is up 105 million in the quarter. Shipping had positive volume effects of $54 million and higher rates and fuel charges delivered 17 million. There were also clear positive revenue effects from logistics and government who delivered $14 and $18 million increase, respectively. The adjusted EBITDA is up $69 million quarter over quarter. Shipping increased by $43 million on the higher rates and volumes. Costs were a little bit up on the higher volumes, but the EBITDA margin improved quarter over quarter. Logistics was up 14 million on higher revenue, but almost flat costs, and government was up 15. So if we look at the cash flow slide, operating cash flow in the quarter delivered $393 million, and this represents a cash conversion of 77% in Q2, not LTM, but in Q2. We had some capex that includes investments related to dry dock, some projects and other tangible assets. We had some net debt service. As we outlined in our connection with our Q4, we are systematically working on lifting cash up to ASA, including lifting dividends up from UCORP. Of course, there we have a minority in HMG. So any dividends that we lift up to the parent, there will also be a payment to the minorities, and this is included in other financial items. In the quarter, we paid $287 million to the shareholders of ASA, and we'll come back to the dividend for the rest of the year. We have undrawn credit facilities of 372, and then there is an upcoming dividend in October now, which includes the tranche two for the 23 dividend of 193, plus the new policy dividend of 258 million for the first half. So in total, we are paying out almost 740 million US dollars during 2024. To the very right of the chart, there is an asset held for sale cash position. Following the announcement of the sale of Mirat, We have reclassified the assets and liabilities of this as assets held for sale, and this is in relation to the cash. So when we look at last 12 months, we continue to have good cash generation in terms of operating cash flow divided by EBITDA. Perhaps more importantly, when you look at the right side of the page, With the paid and announced dividends for 2024, we're essentially paying out 100% of the cash flow to equity rolling 12 months as of Q2 2024. And here we have taken essentially all the cash flow before any dividend payments, before any share repurchases, and before the change in the collateral, which is related to our US dollar bond debt, which sometimes requires a cash collateral. But this shows that we are paying a substantial dividend to our shareholders in 2024. So if we look at our balance sheet, we continue to maintain a very robust balance sheet and a strong liquidity position. The equity ratio was 35.7% at the end of Q2, slightly down from 36.5% in Q1 after the restatement. Why is it a little bit down? The reason is that once a dividend has been approved, even though it is paid in two tranches, approved at the AGM, that entire dividend for the year, no matter when it is paid, is taken to equity during the second quarter. So in Q2, the equity was affected by the fact that you recognize 100% of the dividend for 2023, plus the dividends paid to the non-controlling shareholders in UCORP. Net debt declined 40 million due to debt service and operating cash flow. And this is despite the dividend that has been paid. We have 21 unencumbered vessels with a rough market value of 1.2 billion and book value of 418 million. We continue our important work to be able to upstream cash to ASA. We have a different structure than some of our peers and we went through that at Q4, but we are systematically working on ways of lifting the cash up to ASA in order to free up cash that can be spent including paid in terms of dividends. As part of that, we have made very clear that we are reducing the bond debt that we have at ASA level. We have four bonds outstanding right now. The last bond we partially repaid in connection with the bond issuance earlier, but the remaining will be paid, I think it is October, it matures. So that will take down any future principal bond repayments out of ASA. And it will, of course, also reduce the coupon payments that is covered by ASA. So with that, I will hand it over to Lasse to go through the prospects. Thank you.

Thank you, Torbjörn. And let me do that quite quickly. We see tight markets. We expect tight markets to continue. This is driven by volume primarily from cars. High and heavy is somewhat muted, but we believe has found its floor. Logistics and demand for services and logistics are increasing, in particular in the US. And the demand for government services have kept up high due to the current geopolitical situation in the world. We have seen some disruptions this year, in particular Red Sea. We expect that to continue for the rest of this year. Of course, it's impossible to predict what happens in the Red Sea, but we see no signs that this will go away this year. And that in itself has an effect of around 100 million on our bottom line. But despite all that, we see strong demand, we see attractive contract renewals, and we expect this year to be somewhat better than last year. Thank you. So, on to us.

Is this working? Yeah. Yeah. Sunny shining. You have a rosy outlook. Everything looks good. We're paying, you know, a new dividend. We even have some questions from the web. So, you know, on that, I think we'll start with you, Lasse. Okay. There are a few questions around. the renewals for 2024, pushing into 2025, whether you can say something about the outlook in terms of earnings for the year after this. And there is also some questions around, you know, what is the target contract level and how negotiations are going. Can you talk a little bit about that?

Yeah, that's a lot of things. I mean, first of all, negotiations are going extremely well. We see that customers really want our services, and we are very happy to see that we are in a unique position that we can offer both ocean transport, terminals, processing, and inland movements, and increasingly that is of interest for our customers. Our customers are concerned about capacity. They really advance their contract negotiations. And we are well advanced in all negotiations for contracts that are expiring this year. There's no doubt that there are a couple of real big ones. And we have previously announced that the HMG contract is up for renewal. And this is no exception. We are moving forward with very constructive and very good dialogues with them. At the back of that, we believe that if anything, our volumes will be higher, not lower next year. We are renewing at higher rates. So there are all reasons to believe that 2025 will be another very good year, but we are not at this stage giving any specific indications on earnings levels for 2025.

Okay. Next one is for you, Torbjörn. Could you provide details on the company's debt management policy and target leverage ratio for the long term? In the last quarter, you mentioned the objective to maintain at least three bonds outstanding with the upcoming September 24 maturity. Could you shed some more light on your intentions moving forward?

As I said in the presentation, our intention is to repay the one bond which is maturing this fall. And then we would like to maintain the three bonds that we have outstanding in order to have a curve should we want to access that market later. And, you know, we obviously, in terms of the debt, normal debt service, you know, we have sort of two main components on the debt outside of the bonds. It's bank debt and it's the lease debt. You know, the bank debt we continue to service as per schedule. And of course, now, With the new build financing coming forward, we will be taking on new bank debt to finance that. We're in very good dialogue with a group of international and Korean banks to finance the first six vessels that will be located in UCOR. And then we will engage a little bit later with banks to put in place funding for the remaining six, which will be placed in WWO.

Okay, thank you. Then on to you, Lasse. A little bit outside of shipping, there is questions about how the logistics and government segment should be viewed going forward. Should we expect that the very strong performance that we saw in Q2 is going to continue into the second half of the year and on to next year?

Yeah, well, into next year, as I said, that's a little bit too early for us to comment on now. Also for logistics and government, as we said before, we believe that 2024 will be somewhat better than last year. We see the volumes in particular on the processing side and on the car vehicle side in the U.S. are strong and keeping up. If anything, we see increased local production of cars in the U.S. and partly also now in Europe. So we believe structurally for the long term, the services we have in terms of also handling volumes within a region, not only in and out of a region, has increasing attractivity. For government, it's a bit more difficult to predict what happens in terms of geopolitics and priorities for government. The signals we get is certainly that there's a high activity this year. Typically in the government, they put already now plans for next year. And for whatever we can see, activity level is still high. For government, it's important also to say that that capacity can also be used for regular ocean-going shipping. So there is a flexibility, and we already use that flexibility between government and shipping, where we charter vessels and borrow vessels across the businesses. So all in all, we expect the second half of this year for logistics and government to be very busy with high activity.

Thank you. Then I guess this one is for you, Lasse, and it's touched the put-call structure in UCOR. Do you have any plan to reduce the financial risk that the put-call structure in UCOR creates for you? If so, what is the plan?

We always have a plan to reduce exposure for sure. But the most important plan we can have in that is to make sure we have a close, deep partnership with HMG. And that's what we have. We have had this protocol structure for 20 odd years. Has never really been discussed on our side, on their side. No intention of changing anything. The ongoing contract negotiations, if anything, we are getting closer to HMG and increasing activity with them, not less. So we have been living well with this put call for a while. We just had to change the accounting principle. And there are no signs whatsoever from HMG that they think anything different around it either.

All right. Another one for you, Lasse, on the demand side. If demand weakens a little bit, is the company hedged against weaker rates because of the contracts?

Yes.

For sure. And we did... So if you... Take... 23 and 23. 70-ish percent of our book of of of of business

These are contracts that we go through 25 and 26, and some of them 27 and beyond. So if we see a little bit of softening in the market, we will still have volumes with agreed rates. And remember, we don't expect global volumes to reduce. Actually, we think both in terms of for cars, we think global volumes will increase next year. And for high and heavy, we think we're on a new low plateau and we will see that growing going forward. So in our industry, the issue is not whether the volumes are there. And if our customers have contracted with those volumes, they have to deliver. The challenge in our industry that has been raised by some is the supply of new vessels. But for us, that's really an opportunity.

If we can see a somewhat weak in the market in a couple of years, we can Slower. Slower. Thank you. Yes, for sure. We are now building a bridge. the next few years with contracts with customers that we believe will have substantial volumes. um then uh

And it goes on, you know, what is sufficient cash? What is sufficient cash and long-term liquidity position that he needs to hold to, you know, take on the fleet renewal and the fact that the UCOR put is potentially there at some point?

Yeah, look, we, of course, look at both fleet renewal. When you look at distributable reserves, you will, of course, look at things like the put call, even though we don't think it is likely that it will be exercised. And we have always been very clear that we want to have a liquidity position that allows us also to act counter-cyclically in different markets.

Then we have introduced a new dividend policy as a result. record dividends Keep in mind. is more than two acts of what we paid So it really shows. We are. Delivering. An extraordinary. High degree. Then we continue to work on

In the group, this is a complex matter, but as I mentioned in Q4, when you have a Korean entity, it used to be that we could only lift up cash once a year through a dividend. With privately held Korean companies, you're allowed to do it two times, which we have now implemented. So we are consistently working on freeing up cash lower down in the system in order to ensure that we maximize liquidity at the top. Because obviously, once you have it at the top, where we also get the best returns, we have the opportunity to pay out more to our customers.

shareholders as well as disposers through investments in the group. All right. Thank you. The next one is... It could be for either or. What is it? right you Yeah. Yeah. Yeah. has been strong in particular as the whole

security situation in Mirat, you know, led to a lot of extra activity. As you may remember, Lasse was showing you pictures of people sitting with big paintings into the engine block of the car, picking up seeds. Those type of activities draw some fairly significant super profits through the Mirat. But, you know, Merit has been a strong contributor, no doubt, but again, not strategic in terms of our overall end-to-end strategy. What we do see is that other parts of the business is also now starting to show strong contributions.

an important part of hold end to end strategy to ensure We have one. drive profit into the terminal side and into further activities. strong contributor but so other strong performing you Okay.

Then for you, Lasse, and it goes on the outlook. Can we quantify a little bit about somewhat better? Is that low single digits?

Yeah, we have deliberately not done that. So somewhat, I can tell as much that in my world, 20-30% is not somewhat. So obviously we're not in that range. But somewhat means that it's better. There's still, of course, uncertainty for how the year will turn out. But we are very confident now that it will be a better year than last year. And we say somewhat. It means that it's better, but it's not, you know, crazy much better than last year.

But you can probably also see that. So far. Thank you. somewhat but I understand the question to dividends there is a question special dividend is now is that we have a new dividend policy which is much more dynamic. Every half year, we can make a cup or a mine on the dividends. And. Remember, we have an extra dividend this year.

We are paying the full 2023 and we're adding the dividend for first half of 2024. So when you look at how we are paying a dividend this year, we are at $1.75, which is a substantial dividend for us. And we're paying out all free cash flow to equity over the last 12 months. So the way we see it is we already pay an extraordinary dividend. And then we have a new chance to do that by the end of this year or early next year when we have concluded second half. We see how the year turns out, what the cash position is, the financial commitments we have, and also how the merit transaction turns out.

So, of course, we cannot give any forward promises when it comes but for sure we are in a in terms of ... ... ... ... There is... But it's a little bit confusing. ... ... ...

If we assume that you have the same run rate in the second half, what dividend can you expect if you were to maximize the dividend policy?

Look, I'm sure he can use his own calculator, but I'm not going to stand here and say what the dividend will be for H2. But we're obviously delivering max in terms of the dividend policy for the first half. And then we'll have to come back and see what the dividend will be for the second half once we close the year.

Just adding to that, we're delivering max of what we call a normal dividend. But also in the policy, we can do extraordinary dividends, which is something we can also look at in the future. But as we said, we think this is