Hafnia - Earnings Call - Q2 2025

Transcript

Speaker 3

Hello! Welcome to Hafnia's second quarter 2025 financial results presentation. We will begin shortly. You will be brought to today's presentation by Hafnia's CEO, Mikael Skov, CFO Perry Van Echtelt, Søren Winther, VP Commercial, and Thomas Andersen, EVP, Head of Investor Relations. They will be pleased to address any questions after the presentation. Should you have any questions, you can submit them via the chat function or use the raise hand function to be unmuted to ask your question verbally. Questions will be answered at the end of the presentation. You will receive further instructions as required. During this conference call, some statements may be considered forward-looking, reflecting management's current expectations. These statements involve risks, uncertainties, and other factors, many of which are beyond Hafnia's control, that could cause actual results, performance, or plans to differ significantly from those expressed or implied.

Additionally, this conference call does not constitute an offer or solicitation to buy or sell any securities. With that, I am pleased to turn the call over to Hafnia's CEO, Mikael Skov.

Speaker 4

Thank you. Hello everyone, and thank you for joining Hafnia's second quarter 2025 earnings call. My name is Mikael Skov, CEO of Hafnia, and with me today are our CFO, Perry Van Echtelt, our VP Commercial, Søren Winther, and our EVP and Head of Investor Relations, Thomas Andersen. We have earlier today issued our second quarter earnings, which are now available on our website. Over the course of the call, we will take you through Hafnia's second quarter performance and provide an update of the current market outlook. We will also share our recent financial developments and conclude with an update on our sustainability initiatives. Let's move to the next slide, which is slide number two. Before proceeding, I would like to go through our safe harbor statement.

The information discussed on this call is based on information we have today, which may include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from these statements. This call does not constitute an offer to buy or sell securities. Thank you for your attention, and let's begin with a look at our results for the quarter. Going to slide number four. The second quarter has experienced an improvement in trade volume and ton miles, driven by strong underlying demand and improved refinery margins. This has supported the spot market, and I'm pleased to announce another quarter of strong results for Hafnia. For the second quarter, we achieved $134.2 million in adjusted EBITDA and generated a net profit of $75.3 million, reflecting the strength of our operational execution and underlying market.

Our performance was further supported by our adjacent fee-generating business, including our commercial pool and bunkering operations, which together contributed $7.9 million to our overall results. Seascale Energy, our bunkering joint venture with Cargill, commenced operations in mid-May. On the fleet development side, our dual-fuel methanol MR IMO2 newbuild program in partnership with Socatra has proceeded as planned. In May, we took delivery of the Ecomarc Guillen, the second vessel in the fleet, and in July, the Ecomarc Garon, the third vessel in the joint venture. Moving to slide number five. Next, I would like to highlight Hafnia's key investment attributes. Hafnia is a global leader in the product and chemical tanker market, operating one of the largest and most diversified fleets in the industry. We own and have chartered in a total of 126 vessels with a lower than industry average age of 9.4 years.

At the end of the second quarter, our net asset value stood at approximately $3.3 billion, equating to an NAV of $6.55 or 66.07 Norwegian kroner per share. We operate our own in-house technical management and global commercial platform with chartering teams across Asia, Europe, the Middle East, and the U.S.A. Our technical team upholds the highest safety and environmental standards, while our chartering team manages approximately 80 third-party vessels across our eight different pools. At Hafnia, we take a proactive approach to market evaluation, continuously seeking opportunities as part of our active management strategy. Our diversified business model, including the pool platform and Seascale Energy, our bunkering procurement platform, complements our operations and provides steady, reliable revenue. Finally, Hafnia maintains a transparent and consistent dividend policy, having paid consistent dividends across the past years.

For the full year 2024, we paid out 82.8% of net profit through dividends and share buybacks, with total dividends in 2024 reaching $1.16 per share. Let's move on to the next slide, which is slide number six. At the end of the second quarter, our net LTV ratio remained unchanged from the first quarter at 24.1%, reflecting a balance of both a decrease in vessel market values and a further debt reduction. In line with our dividend policy, we declare a payout ratio of 80% for the quarter. This equates to a total cash dividend of $60.3 million or $0.1210 per share. For shareholders receiving dividends in Norwegian kroner, the exchange rate will be based on the value date, which is two business days before the payment date. This marks 14 consecutive quarters of dividends, underlying consistent shareholder returns and a commitment to delivering long-term value.

Søren Winther, our VP Commercial, will now be sharing the industry review and market outlook.

Speaker 1

Thanks, Mikael. Let me start with an update on the current market conditions in the product tanker and clean product segments where Hafnia primarily operates, and then share our outlook for the months ahead. Looking at clean products on water, we see volumes in 2025 sitting above the last four-year average, supporting the year-to-date market resilience. Q3 represents an uncommon seasonal rise in clean products on water and volumes loaded. Despite about 140 additional product tankers being sanctioned this year, clean product volumes transported on sanctioned vessels have decreased by 17%. On the right, we zoom in on the unseasonal change in clean product volumes. Q2 to Q3 volumes on water this year exceeded average movements observed in prior years by over 30%, underlining the fundamental strength of current achievable earnings for the quarter. Moving on to slide nine. Improvement in demand fundamentals is further illustrated here.

Looking at the year-on-year ton mile comparison for clean products in July, we can see a clear trend of continuous growth since 2020. This is further supported by cargo volumes loaded, reaching their highest levels in the past eight years, reinforcing the view that oil demand remains resilient with limited signs of downside risk in the medium term. On the other hand, dirty petroleum cargo volumes and ton miles have been on a decline since 2023, reflecting weaker fundamentals compared to clean products. However, the recent OPEC Plus decision to boost production in September is expected to support crude tanker rates in the short term and also benefit the product tanker market through higher refinery throughput and exports. Moving on to slide ten, we have seen a strong recovery in accumulated ton days for the clean segment since the end of 2024, significantly surpassing the three-year average by Q3.

This has also led to a recovery in earnings in early 2025. In Q2, earnings reached the lowest levels of 2025, mainly due to the Western Hemisphere drawing down on accumulated inventory overhang. In Q3, earnings and ton days have shown a strong countercyclical recovery, driven by tight European gasoline and distillate supply as a result of continued refinery closures and an August incident in the Nigerian Dangote refinery, resulting in a 15 to 20-day production stop, forcing a demand in Nigeria for European gasoline, which further tightens the product space in the Atlantic Basin. These factors drive ton mile increases and strong trading margins from the U.S. and the Eastern Basin for Q3 to date.

The graph on the right provides further evidence that distillate flows east to west were countercyclical high for the month of July and expected to stay strong for August and September, benefiting from high trading margins between the regions. Moving on to slide 11, the increase is enforced by two main factors and is expected to carry into Q4. Firstly, global refinery margins remain strong, with the three-month forward curve staying healthy. Secondly, global refinery outages for the remainder of the year appear very limited and are projected to reach a three-year low. This will support higher volumes and longer hold trading, with average voyage length and ton days to potentially improve further.

The combination of lower than usual turnarounds in the Eastern Hemisphere and refinery closures in the Western Hemisphere, plus planned maintenance of the Nigerian Dangote refinery in Q4, forms the foundation for further ton mile improvement towards the end of the year. Moving on to slide 12, inventory levels are a fundamental driver of the product tanker market. Data for both dirty and clean trades point to significant draws in 2025. These low inventory levels will help amplify the impact of strong refinery margins and low outages, reinforcing the market effects highlighted on the previous slides to replenish inventories. Moving on to slide 13, crude tanker cannibalization has been a key topic at the end of 2024. This has gradually returned in 2025, with its largest impact in February, June, and July of this year.

However, the key driver of this has shifted, with 2024 primarily being from large tankers cleaning up and repositioning west of Suez, where 2025's cannibalization largely originates from new build tonnage. We expect the cannibalization for the remainder of the year to be minimal, but limited new build deliveries expected, and also keeping in mind that Q4 deliveries could likely defer to achieve a 2026 nameplate. The year-to-date impact on tanker supply has also been minimal. Despite a sizable number of new build deliveries, the net additional competing deadweight in 2025 remains limited, at only 0.3% for the clean trade and 1.2% for the dirty trade. This is mainly being offset by vessels turning 20 years of age, as well as an increasing number of sanctioned tonnage, reducing effective supply.

Importantly, 28 out of 37 newbuild LR2s have shifted into the Aframax trade, further tightening supply within clean product tanker markets. Slide 14, the supply outlook remains positive. From 2025 to 2028, we expect about 114 million deadweight worth of newbuild tankers across Handys to VLCCs. Over the same period, potential scrapping could reach 167 million deadweight based on typical scrapping ages of 23 years for larger segments and 25 years for MRs and Handys. Beyond that, another 87 million deadweight tons could leave the market between 2029 and 2031. It's also worth noting that we did not account for any differences in utilization between newbuilds and older vessels. Slide 15, sanctioned vessels continue to have a large impact on the fleet supply. The UK, UN, and OFAC sanctioned another 409 tankers during 2025, bringing the total to around 800 tankers trading outside normal market competition routes.

We estimate approximately that another 335 vessels have engaged in sanctioned trade regions, signaling the potential for additional sanctioning. The dark fleet is identified as tonnage with questionable ownership and predominantly older age profile, while the gray fleet is associated with reputable ownership. Now, Perry, our CFO, will bring you through the financial developments. Over to you, Perry.

Speaker 4

Thanks, Søren, and good morning and afternoon, everyone. Hafnia boasted another strong financial performance in the second quarter, driven by an improving spot market and a disciplined operating platform. For the second quarter, we posted an adjusted EBITDA of $134.2 million, resulting in a net profit of $75.3 million or $0.15 per share. Our commercial pool management and bunkering businesses contributed $7.9 million in operating income, and with the launch of Seascale Energy in mid-May, our bunker procurement business has been transferred to the joint venture and will now be accounted for using the equity method moving forward in the coming quarters. We continue to deliver strong returns with a 13.2% return on equity and a 10.6% return on invested capital this quarter. On the balance sheet, net LTV stayed unchanged at 24.1% compared to the last quarter as further debt reduction balanced out a decrease in vessel values.

The chart on the top right displays our liquidity profile. We have access to over $450 million in liquidity at the end of Q2. This includes $194 million in cash and around $260 million in drawdown capacity under our credit facilities. Additionally, in early July, we secured a $715 million revolving credit facility, which I will discuss shortly. We also remain well protected against interest rate volatility. At the end of Q2, 55% of our interest rate exposure was hedged at a weighted average base rate of 1.95%. If we then move on to the operating summary, you'll see we continue to produce strong operating cash flows thanks to our solid balance sheet and low breakeven levels. For the quarter, we earned a TCE income of $231.2 million, averaging $24,452 per day across our vessel segments.

With many of our own vessels built in the years of 2015 and 2016, several will undergo their second dry dock this year and next. As a result, our Q2 results were affected by numerous vessels being in dry dock or undergoing repairs, leading to about 630 off-hire days during the quarter. We expect fewer dry dockings and repairs in Q3, resulting in roughly 510 off-hire days, and starting from the last quarter, we anticipate a dry docking schedule to ease and off-hire days to decrease. We move to the next page. Our delevering efforts over the past two years have enabled us to significantly reduce our net debt to the tune of $500 million compared to the same period in 2023.

While current market conditions led to an approximately 5% decline in vessel values quarter on quarter, we maintained our net LTV at 24.1%, supported by a reduction in our net debt. In July, we concluded a new $750 million amortizing revolving credit facility with a syndicate of 11 banks. This facility has a very competitive margin, a tenure of seven years, and an age-adjusted amortization profile of 20 years. It also includes an uncommitted accordion tranche of up to $417 million, exercisable within two years. Since the closing of that facility, we've drawn approximately $290 million under this RCF to refinance existing debt that this facility is replacing, and Hafnia currently maintains around $600 million in undrawn capacity with a highly competitive margin and, as said, a very attractive structure.

This facility not only reduces our overall funding costs but also lowers our cash flow breakeven levels and further strengthens our balance sheet resilience. If we move on to the next page, as demonstrated here on this slide, our earnings have strengthened quarter on quarter, positioning us for a robust performance in 2025. As of August 15, we had secured 75% of the earning days for the third quarter at an average rate of $25,395 per day across the segments. For the remainder of the year, 48% of earning days are covered at an average rate of $23,623 per day. If you look at the scenarios for covered rates and analysts' consensus, they indicate robust net profits in the range of $305 to $310 million for the full year. Michael, over to you for the next few slides.

Speaker 5

Thank you for this. We now go to slide number 22. Let me now turn to Hafnia's sustainability strategy and goals. As a leading company in our industry, we understand the responsibility we have in building a more sustainable maritime future. We set high standards and work to meet them, aiming to make a positive difference for communities and stakeholders. We are also consistently collaborating with industry partners and international organizations to develop long-term solutions for the challenges shipping faces. This keeps us at the forefront of change, ensuring Hafnia actively participates in this transition. Going to slide number 23, here we showcase some of the strategic initiatives we have been working on. Take Seascale Energy, for example. It has recently started operations and aims to provide more reliable, efficient, and sustainable solutions for customers worldwide.

Through smart investments and strong partnerships, Hafnia is positioning itself at the forefront of maritime innovation. Slide 24. Looking ahead to the rest of the year, Hafnia remains strong. The positive momentum from the first quarter continued into the second and third quarters, driven by growth in trade volumes and ton miles. We achieved solid earnings while keeping our 80% dividend payout ratio. Market fundamentals remain robust, with limited fleet supply and improved spot rates. Our proven operational excellence, along with recent refinancing, boosts both our resilience to market changes and our ability to pursue new opportunities. This concludes our presentation. With that, I would now like to open the call for questions.

Speaker 3

We will begin our Q&A session now. Should you wish to ask questions, you can submit them via the chat function or use the raise hand function to be unmuted to ask your questions verbally. Everyone, we will take the questions from the raise hand function first before moving on to any questions submitted into the chat. When I state your name, please remember to take yourself off mute before speaking, and then once you've finished your question, please remember to re-mute yourself to avoid any background noise. Frode, I believe you had raised your hand first. May I ask you to unmute yourself?

Speaker 7

Yes, thank you. Hi guys. First off, congrats on the good trading performance and the Q3 guidance. My first question is on the refinancing you announced. I assume that you'll draw that fully and, you know, refinance the existing debt. Can you perhaps quantify the improvement to cash breakeven rates and, you know, how that will be after you have refinanced?

Speaker 4

Yeah, sure. Sorry, Frode, I had to look for the unmute button. Thanks for that question. Yes, we're very happy with that refinancing. First of all, it brings down our funding cost further. I think on the element that we have refinanced now, you would see a margin improvement of 50 to 60 basis points overall. The structure in itself also gives a longer profile and more flexibility in terms of paying down. Looking towards our cash flow breakeven, I think that would go towards roughly $13,000 if the whole refinancing takes its effect later on in the year.

Speaker 7

Okay, that's roughly a $1,000 improvement or something like that.

Speaker 4

Yeah, depending on whether you're looking at averages or quarter on quarter.

Speaker 7

Okay, so 50 to 60 basis points, that's, I guess, has a positive effect on EPS and therefore dividend capacity. There is a longer amortization profile, it sounds like, right, as well.

Speaker 4

Yes, exactly.

Speaker 7

Okay, thanks. I had a question on the market, I guess. You, I think on slide nine, you showed the July ton mile figures. Seaborne trade appeared to be up quite healthy, like 4% year on year, and then ton miles were up like 1%. You know, that indicates that the average miles were still down year on year in July. You said you expected the long haul movements on LR2s to improve going into Q4. Maybe you can elaborate on that, please.

Speaker 4

Yeah, hi Frode, Søren here. I think we, on a general note, we have seen an improvement in ton mile over years, over years. What we are alluding to on the improving ton mile right now is more related to here and now factors. The fact that Europe has drawn quite heavily on inventories in Q2 and Prax in Immingham going Chapter 11 together with a few other planned refinery shutdowns or stops in reality causes Europe to draw really tight on middle distillate and following that on gasoline more because there was a refinery outage in the Nigerian Dangote refinery, which has called upon European gasoline products to service demand in principle, which basically drives an east-to-west arc that has been present but not at the volumes that you have seen to the latter part of Q2 and way into Q3 now.

That drives a significant amount of ton mile on a general note. China has had to step in on some product supply as well, which is obviously even longer ton miles. The comment originates from there and really drives the abnormality that you're seeing in Q3 now. You would typically see a pretty steep draw in ton miles and also volumes of cargo on water, which you are not seeing in a freak year like this and achievable earnings now that is superseding many other quarters of Q3 over years. Did that answer your question?

Speaker 7

Yes, perfect, thank you.

Speaker 3

Okay, thank you, Frode, for your questions and Perry and Søren for your responses. I am moving on to Omar Nokta. Omar, can you please unmute yourself?

Speaker 0

Yes, thank you. Hi guys, thanks for the update. Just maybe a follow-up question perhaps to Frode's on the market. You know, as we've been looking at the spot market and your bookings so far here in the third quarter, there seems to be a noticeable shift where it's the MRs and the Handys that are driving higher and they're outpacing the LRs. Are you maybe able to explain what's driving that, maybe that divergence where it's the smaller ships that are really improving and it's the LRs that have been somewhat stagnant? Is that normal or what could you say is really behind this shift in vessel classes?

Speaker 4

Yeah, hi Omar, Søren here again. I actually think I'll turn the question a little bit around. The fact is that the LR1s and the LR2s in particular have been very resilient through Q2 and have produced quite significant numbers and significantly above the MRs. If it looks on paper like the MRs have improved and the others have not, the 2s and 1s have remained on very high levels, you know, above 30 for the LR1s and in the very high 30s for the LR2s. It's merely the MRs catching up rather than the 2s and the 1s getting more wind in the sails, if you like.

Speaker 0

Okay, thank you. It's, yeah, MRs just sort of playing catch up. Maybe just a follow-up, and I know you probably answered this several times in the past, but you were just discussing earlier in the presentation the cannibalization and whatnot. Does Hafnia, as a platform, do you sort of reverse cannibalize if the opportunities make sense to go into the dirty trade or does that maybe disrupt too much the clean trading platform?

Speaker 4

No, in principle not. You can say that where the value is and where you can do some swapping is between, for the LR1 segments, is into the Panamaxes. Keeping in mind that the Panamax segment is somewhere between 90 and 100 ships only in a very, very confined trade, you've got to be very careful in how many ships you move into that sort of segment before you kill yourself, sort of thing. On the LR2s, it's much more evident to switch between Aframax and clean trade, and there's actually opportunities to go dirty and then clean up again if you have the right swing. That we will look at. Obviously, we're not players on the Suezmax VLCC game, and you can't really cannibalize that. It's really the bigger ships. We do have some dirty presence both in the Panamax segment and also on the MR side.

Again, dirty MR is also in the Eastern Hemisphere, at least, very, very confined and limited to about 45, 50 ships. You've got to be careful a little bit how you cannibalize your own market if you go that way around before you sort of kill your own earnings.

Speaker 0

Okay, thank you. Appreciate the color, Søren. I'll turn it over.

Speaker 4

Yeah, no worries. Thank you.

Speaker 3

Thank you, Omar. Thank you, Søren. I am going to move on to Petter Haugen. Can you please unmute yourself?

Speaker 6

Thank you so much, and good afternoon to the team here. Quick question on the sanctions. My impression is that the OFAC sanctions are sort of harder to work around and more effectful than UK, EU sanctioning. Is that correct? To what extent would you say that sanctions now on the margin are having a real impact in terms of removing tonnage from the markets?

Speaker 4

Hi Petter, Søren here again. You can say that the OFAC sanctions are probably the ones that have existed the longest time and where you had the early Iran and Venezuela sanctions coming on. As a market pool, it may be seen like they have more effect, but the actual fact is if you have a ship sanctioned by EU or by UK even, you have to be a relatively confident charter to go out and take even that sort of ship because many of the companies that we deal with will have EU and UK presence of some sort. You can say maybe the OFAC sanctions get a little bit closer to the dollar, but our experience in the market is that no matter where you're sanctioned, you're not really welcome in the world that we are trading in at least to a large extent for sure.

You will find that if you go through ship by ship, you will find many of the OFAC sanctioned ships be double listed in EU, and obviously in our material we have gone by IMO number. There is one sanction per ship and no double counting in that.

Speaker 6

Understood. Thank you for that. I suppose the next question would be to some extent related because on your page number 14, you look upon the scrapping potential here. If I understood you correctly, you have simply just used the age brackets to point to what would be sort of relevant to look at. Given the strength of the market, but also these sanctionings or sanctioning of, in predominantly older ships, how do you think about the more realistic scrapping scenario going through the next, say, six to 12 months?

Speaker 4

I think it's all interlinked somehow. I think as long as the now almost 800 sanctioned ships have a home to play in, which is outside the more oldest adjacent trades, if you like, you know, the Indian cargo ties trade and Indonesia and other places. I guess if you removed the Russian playground for sanctioned tonnage now, you would have to put a lot of tonnage over 20 years into an adjacent trade that is a non-growing trade that is sort of pretty static. I would assume you would see accelerated scrapping. Maybe I can take, there's a question in the chat as well. The debt rate that we specify here is exactly as you say.

It's an age group and it's on average previously scrapped vessels, i.e., over time its scrap age for a LR1 to a VLCC is about 23 years, and it's 25 years for Handys and MR. So it's scrap potential that we are talking about here. To add a little bit of flavor, when you look at ships over 20 years, it's not like you're super welcome in an overall trading market on a general note. There's a lot of big trading houses, including oil majors, that do not take ships over 20 years simply, which means that the utilization of the fleet goes down. As you say, you would find a lot of tonnage over 20 years being part of the sanctioned fleet for sure.

Speaker 6

Okay, thank you. I'll leave it at that. Thank you.

Speaker 4

Okay, thank you.

Speaker 3

Thank you, Petter. Thank you, Søren. Clément Morlands, may I ask you to unmute yourself?

Speaker 2

Hi, can you hear me?

Speaker 3

Hi, yes, we can hear you.

Speaker 2

Good. My questions. The U.S. has been vocal regarding their opposition to the IMO's net zero framework. There is a lot of uncertainty, but could you talk a bit about your expectations regarding the October meeting and whether you think the new regulation will still be approved? If it's not, what could be the next steps regarding the potential decarbonization for shipping?

Speaker 6

Thank you. Thank you for that question. It's Mikael here. As you clearly point out, you know, when it comes to these kind of political major decision points, there's always an element of uncertainty, I guess, overall. I do think that from where we are sitting, we do believe that the IMO will vote this through and that it will come into effect. When it comes to Hafnia's strategy about how we see the future of decarbonization, etc., we are working on the assumption that IMO will vote through what has been proposed, even without the U.S. being supportive of it. That's kind of how we see it. I guess it's fair to say that the world we live in today is obviously influenced by a lot of geopolitical events that keep on changing the agenda.

That's, for now, at least our working assumption, and that's how we believe it's going to play out.

Speaker 2

Makes sense. Thank you for the cover. I'll turn it over. Thank you for taking my questions.

Speaker 3

Thank you, Clément. Thank you, Mikael. Gregory, may I ask you to unmute yourself? Gregory, we don't seem to hear you. I can see you're off mute. Okay, Gregory, maybe you would like to put your question in the chat. We're unable to hear you. There is actually, I will actually head into the chat questions for now, and I'll come back to you, Gregory. We have one from Tony, who asks, looking ahead, do you anticipate returning value to shareholders via dividends, share buybacks, or a combination?

Speaker 6

Thank you for that question. Basically, the way that we view that part of our business is that we have a dividend policy, which has been clearly described. That is what we are focusing on. When it comes to share buybacks, we do, of course, debate that every quarter and we'll continue to do it. For the time being, the dividend policy is what stands. If there's any share buybacks, it will be in addition to the existing dividend policy. That is the way we look at it at the moment.

Speaker 3

Okay, thank you, Mikael. Leading on to the next question coming from Hans Henrik, also again regarding share buybacks. Regarding the share buyback back in December, given the limited positive impact on share price, what is your position on this now? Will you refrain from further buybacks despite strong cash position? I guess will you refrain from further?

Speaker 6

I think that was a little bit what I said earlier. As I said, basically the dividend policy is that we are paying out out of the net profit % that is linked to the net LTV. If there are any share buybacks, that would be in addition to that.

Speaker 3

Okay, thank you. I'm actually not seeing any more questions in the chat or the Q&A. I actually do see Gregory's hand is still raised. Maybe we'll just give Gregory a couple of seconds in case he'd like to... Okay, now his hand is not raised anymore. I'm not seeing anything else more. We have come to the end of today's presentation. Thank you, everyone, for attending Hafnia's second quarter 2025 financial results conference call. You can find more information plus the recording of this meeting available online at www.hafnia.com. Oh, sorry, is there one more question? We have another question, sorry. Coming back to the Q&A now. This is also from Hans Henrik. Would it not make more sense to use cash to reduce debt and increase dividends?

Speaker 4

Yeah, thanks for that. It's Perry here. I think it is, as Mikael alluded to, that we have a very clear dividend policy. We pay out our dividends in cash. Once we see more opportunities to distribute either by buybacks or anything, that will be coming on top of that. I think we're quite comfortable with the stable and high payout ratio that we have at the moment. We look at it on a quarter by quarter basis, otherwise not so much to add to that for the moment.

Speaker 3

Thank you, Perry. I'm going to wait a couple more seconds in case anything else is coming through in the chat or the Q&A. Otherwise, we're at the end of today's presentation. If you'd like to re-listen to this presentation later, you can find it on our website in the investor relations section. Thank you, everyone, for attending, and thank you for the great questions. Speak next time.