Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Hapag-Lloyd Analysts and Investors first half 2023 results conference call. Hapag-Lloyd is represented by Rolf Habben Jansen, CEO, and Mark Frese, CFO. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star, followed by one on your touchtone telephone. Please press the star key followed by 0 for operator assistance. I would now like to turn the conference over to Mr. Rolf Habben Jansen, CEO. Please go ahead. Thank you very much for the introduction. Thanks everyone for making the time to join us here today. As always, we'll try to give you a quick overview and then afterwards, be happy to take any questions that you may have. I think a couple of opening remarks that I believe that when we look at the highlights for the first half, I think it's definitely been a challenging market, but with, especially in the first quarter, a very weak demand. I think a bit recovering towards the end of Q2, but still challenging and rates, of course, quite a lot down. I think on the Hapag side, there are a couple of things worth mentioning. One, definitely the completion of the acquisition of SAAM ports and logistics, which we closed last week. For us, an important milestone as we, as we build up our terminal and, and infrastructure business. Then we also have meantime taken delivery of first two of our new build LNG-powered mega vessels, which for us is also a something that we've been looking forward to for a long time. Financially, I would say so far the year unfolds more or less as we had anticipated. Definitely significant normalization of, of earnings, but still, when we look at half one, I'd still say with that overall, that's a pretty strong result. The average freight rate, of course, fell further in the, in the second quarter. Even if we see a couple of green shoots, I would say at the moment when we look at some of the spot rates in a number of the, of the main markets, our balance sheet remains strong. When we look at the markets, only a slow recovery expected, even if what we said in the beginning of the year, that somewhere between May and August, we would see a bit of an uptick in demand. This is something that we definitely see also when looking at our loadings over the last 10, 10 weeks or so. Of course, a lot of new vessels coming in, yeah, which partly will be absorbed by increased scrapping and slow steaming, but certainly not all of that. I think it's fair to say that, that supply growth will likely outpace demand growth in the remainder of this year, but also in, in 2024, which means that we actively need to manage costs again as we were used to also in the past. Way forward, earnings expected to continue to normalize. We expect to land within the range that, that we have indicated. We continue to build, to build our terminal business, and we'll also continue to take the measures that we have presented earlier to further improve our business. When looking at global demand, I think we all know these graphs. We see that, that in the last couple of months, volumes are coming closer and closer to, to what we saw last year. I personally expect that that orange line will cross the blue line at some point, hopefully in Q3, but latest in Q4. If we look at the rates, they're still at unsustainable levels in a number of trades. I can't emphasize enough that when we look at costs, because people always compare the rates pre-pandemic with post-pandemic, but we should not forget that cost is up between 25%-30% across the industry, and as such, rates will need to follow that pattern at some point in time. When looking at the highlights from our end, probably three things really worth mentioning before I hand over to Mark. First of all, last week, last week we completed the acquisition of SAAM Ports and Logistics. As that was an, as that's an activity that is present in many different countries, the regulatory approvals took, as expected, some time, but we're happy that we, we managed to get all the okays because that will, again, it underlines our commitment to Latin American market and certainly strengthens our position, particularly on the West Coast. On the ship side, we've taken delivery of the, of a number of the 13,000s already, but now also the, the 24K vessels are being delivered, and we took delivery of the first two of them. Meantime, apart from that, that will definitely help us to, to reduce emissions, but of course, we will still have to do more. In that context, I'd also point out, all the efforts we are making on biofuel, yeah, and the Ship Green product that we have launched. Many of you will also have seen the announcement where we indicated that we are also going to engage in a number of methanol main engine retrofits. That was an announcement together with CMA CGM and MSC. In terms of CO2 reduction target, for now, we are on track. Here you see the numbers until 22. I think based on what we see so far, we are also confident that in 23, we will achieve the targets that we have set ourselves. Of course, there's still more to be done if we want to get to the numbers that we've committed to for 2030. Finally, before I hand over to Mark, let me... A few words on customer satisfaction. I think many of you know that, that when we launched our strategy towards 2023 One of our key ambitions was to become number one for quality. In that context, we set ourselves targets for all kinds of quality promises, where you can see on the left-hand side that in many of those, we have made very, very good progress. We still need to work on, on schedule reliability, which is certainly one of the things on our to-do list for the upcoming couple of years. Also quite happy to see that when we look at our, our NPS score, which is indeed the recommendation rate or the Net Promoter Score that we get from our customers, that this time we got the highest score that we have achieved so far since we started measuring that. I think that's a big compliment to, to all the teams out there who have consistently been working on many things to, to make that customer experience better, and hopefully we can remain on that level or maybe even do a little bit better going forward. With that, I would hand it over to Mark for now, who will take us through the numbers. Yes, thank you, Rolf. Also from my side, a very good morning to everyone. As we will see, and as Rolf already said, the first half of 2023 was characterized by declining demand and for sure, significantly weaker freight rates for container transports. In this challenging market environment, we have again delivered a good operating result and maintained a very strong balance sheet. Now, taking a closer look at the financial performance, we see that the normalization of earnings set in as anticipated in the first half of 2023. Revenue decreased by 42% to $10.8 billion, and that is mainly due to significantly lower freight rates, but also to some extent due to a bit lower volumes. While we were able to reduce our cost base, it was evidently not enough to compensate for the revenue shortfall, for sure. As a result, EBITDA and EBIT fell to $3.8 billion and $2.8 billion, respectively. Nevertheless, margins and return on invested capital continued to be relatively high and well above historical levels. Group profit came in higher than the operating profit at $3.1 billion, as we generated a positive financial result, mainly due to the interest income on our substantial cash balances and fixed income investments. Transport volumes in H1 2023 declined by 3.4% to 5.8 billion TEU. The highest volume declines were recorded on the Far East and Middle East trades, while the Intra-Asia trade benefited from the redeployment of capacity following the normalization of the global supply chain. The Africa trade continued to keep up well, also due to our successful acquisition, as you know, of NileDutch in 2021 and the container liner business of Deutsche Afrika-Linien in 2022. As already outlined, the average freight rate in H1 2023 decreased significantly by 38% year-over-year to $1,761 per TEU. Asia-related connections recorded the highest declines. Our high contract portfolio, including multi-year contracts and our balanced geographic exposure, have helped us to cushion the severe spot rate declines we have seen this year or since end of last year. At the same time, the average bunker consumption price was down 11% on the back of lower oil prices. The decrease in unit cost was mainly driven by lower bunker prices and handling and haulage expenses as a result of the steady normalization of the supply chains. Inflationary pressure dampened the positive co-cost trend. That's why it's so important to focus on that. For example, port and canal fees included in the vessel and voyage line item increased clearly. In total, unit costs in H1 2023 were down by 5%, round about $66 per TEU as compared to H1 2022. In comparison to the peak unit cost of $1,458 recorded in Q4 2022, we were able to reduce the cost level in Q2 2023 by $250- $1,207 in that respective Q2. Taking a closer look at our cash flow, we can see that free cash flow was again clearly positive in the first half of 2023. Operating cash flow amounted to $4.1 billion due to the good operating results and positive working capital effects. We invested around $1.6 billion in terminal participations, as mentioned already, for sure, also in vessels and in our container fleet. In January 2023, we acquired 49% minority interest in the Italian Spinelli Group, and in April, a 40% interest in the Indian JN Port and Logistics. You know, these transactions, they were closed and paid at that time. In addition, we received our first 24,000 TEU LNG-powered vessel and made installment payments for our vessels currently under construction. In our investment and the investment cash flow included also a net cash inflow of $1 billion from the liquidation of time deposits. Financing cash flow, cash outflow, sorry, of $12.9 billion, mainly related to our dividend payment in May. Cash balance stood at $7.4 billion at the end of H1 2023. The consideration of $1 billion for the SAAM transaction, which was closed last week, we will then see included in the Q3 figures. I would like to finish my presentation with a brief outlook on our strong balance sheet and credit ratios. We were able to maintain a net liquidity position of $3.9 billion at the end of the first half of 2023, despite the high dividend payouts. At the same time, the liquidity reserve, which also includes fixed income investments of around $2 billion and our undrawn revolving credit facility, stood at $10.1 billion. With an equity base of more than $20 billion, our equity ratio stood at 66%, which is well above, as you know, of our target of 45%. Having said that, I would hand it back to Rolf again for a market outlook, market update and outlook. Rolf, please. Thank you very much. Yeah, when we look at market outlook, I think the, the, the slide that we tend to show gives you a bit of a flavor of where the order book stands, what we see as deliveries and orders that are being placed. I think in fairness, order book is still relatively high, although nowhere near to what we saw in 2009, and I can't emphasize enough that situation today is different than what we saw at that point in time. The global fleet is significantly older, yeah, on average, 28% is a lot less than, than 56% that we saw. We also have, you know, the need to absorb more capacity because of the new CII rules in particular. All in all, still definitely an order book that's on the high side, but not a situation as we saw it in 2009. Delivery is quite a lot in the pipeline, as was expected. Not that many orders being placed anymore, but still ordering, I would say, at an, at an elevated level. Inactive fleet, still fairly low, most likely also on the back of a lot of long charters that have been closed throughout the pandemic. I would expect the idle fleet to go up latest in the first half of 2024. When we look at the supply-demand balance, I think when you look realistically at what's going to happen there over the next 12-18 months, that it's quite likely that supply growth will outpace demand growth, because yes, we see some recovery of demand, but probably not at a huge pace. We do see an inflow of capacity. We will see some slippage, I think. We will see scrapping going up, but it will take a little bit of time to, to absorb all of that new tonnage. As such, I think the picture that's painted here is fair. When looking at our outlook, we basically confirm the outlook. We have expected a gradual normalization in 2023, and I believe that's also what we are seeing. We still think that our transport volume is going to grow a bit. Yeah. Bunker consumption is going to go down. Freight rates, obviously, as well, and the ranges that we have indicated for EBITDA and EBIT remain unchanged. What are our priorities for the remainder of the year? First and foremost, make sure that we continue to focus on service quality and, and customer satisfaction, because having happy customers will still put us in the best position to, to remain stable, also, if there is a, a somewhat more difficult period ahead. We'll continue to have a prudent financial policy, yeah. We're focusing on integrating the recent total acquisitions that have been closed in the first half of this year. We will continue to look at further efforts to accelerate our efforts on the sustainability front and to do more on decarbonization. Where needed, we will adapt to market positions. We'll continue to focus on cost. We'll invest in our teams, and as we've said, we're working this year to complete our strategy towards 2030, and we hope to wrap that up before the end of this year. With that, I think that concludes our introduction, and we would happily hand it over to you for Q&A. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star, followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, then you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selection. Anyone who has a question may press star, followed by one at this time. One moment for the first question, please. The first question comes from the line of Samuel Bland with J.P. Morgan. Please go ahead. Oh, thanks. Thanks for taking the question. I've got two, please. The first one is, just, maybe help us reconcile what's going on with peak season. We, we hear a lot elsewhere that it's quite a modest peak season, and yet we maybe see that the rates are going up a little bit. How would you explain that? I, I wondered maybe whether it's to do with what we're seeing on the Panama Canal, which seems to be getting worse. The second question is on your methanol ships. My understanding was that the methanol, the idea was to kind of run these on green methanol, and then there's a very large CO2 saving, and that green methanol is not very available at the moment. What, what do they sort of run on, on in the interim, and what sort of CO2 saving do you get on that? Thank you. Yeah, let me take the second one first. I think, now we've said we'd be happy to retrofit some ships so that they can run on methanol. Of course, that only gives a saving if it runs on green methanol, because if they run on traditional methanol, then the saving is, is very, very limited. That's also why the timing of the retrofits will, will need to be somewhat aligned with the availability of green methanol, because you're absolutely right, otherwise, the, the impact is, is very modest. As for the peak season, I still think we see a bit of that. When, when I look at the loadings that we have had over the last 10 weeks, then they are up versus previous year. We also see that there's more cases where we are really full and are getting close to having to roll cargo. I think that's not we're not the only ones who see that, and that's also why you see spot rates coming up on a number of the key trades. I think there is a bit of a peak season. Question is how long it's gonna last, but that you only know when it's over. Yeah, understood. Thank you very much. The next question comes from the line of Omar Nokta with Jefferies. Please go ahead. Thank you. Hi, hi, Rolf and Mark. Good morning. I wanted to ask about the SAM transaction. Now that that's completed, you've got a pretty meaningful footprint now in South America, or I guess actually the Americas in general. How are you thinking about the way you're operating your lines today? How much sort of reshuffling do you think, or do you anticipate you're gonna take on in order to maybe maximize your investment there, especially in the context that freight rates have seemingly continued to outperform into that Latin America market? Any, any color you can give there? I mean, I think we've done some studies about, you know, what potentially the synergies could be, and we're actually starting the dialogue now, now with the teams to see what it is that we can and cannot do to optimize our business. It's a little bit too early to, you know, to give, to say something firm on that, yeah. We will do a number of things, whatever we can, but of course, we also need to consult that with our partners, as we also do it when it is the other way around. I certainly expect that to have a positive impact, but the magnitude of it, we cannot estimate at this point. Okay, that, that's fair. Then maybe just one, one follow-up. You know, in terms of just deploying capital in the current environment, you guys have, in the past, been inquisitive, and you continue to focus on terminals. How are you thinking about deploying capital in this environment that we're seeing today, you know, given the uncertainty, in terms of deploying capital on M&A, particularly to strengthen your foothold in Terminal Link? Yeah, any perspective there for us here, as you think about the use of free cash? I mean, maybe Mark wants to chip in on that afterwards as well, but I think we've always been quite prudent, and that, that, you know, we only buy and invest if and when the right opportunity comes up and it's at a fair price. I think that remains our strategy. We have enough financial firing power to do something, yeah, if and when the right opportunity comes up, but we are not in a hurry. Yeah. Okay. Just adding and, and supporting that, Rolf, what you, you just said, I think we also should not be afraid. Sometimes it's good, and if the timing is right, and the price is right, and the opportunity is right, we should do that even in a market environment which doesn't look like that very much. I think overall, we stay very prudent as we were before. Yeah. Thank you. Appreciate the color. The next question comes from the line of Andy Chu with DB. Please go ahead. Morning. Three questions from me, please. Rolf, just in terms of guidance, you talk about a sort of gradual normalization, but, but you're keeping the sort of bottom end of your, say, EBIT guidance, which implies a loss in the second half of the year. Just wondered if you could comment on what, what it might take to get into EBIT losses in the second half. Appreciate there's obviously a lot of operating leverage within the business. Then a couple of numbers questions. Firstly, on interest income, just wondered if you could give some guidance, I think, in terms of total sort of interest income numbers, EUR 438 million at the first half. Could you help us in terms of full year guidance? In terms of unit costs and, and with cost being an important, element, given, the supply-demand outlook, what, what happens or what's your outlook plays on, on unit costs, for the second half and into 2024? Thank you very much. I'll take numbers one and three, and would suggest that Mark then afterwards comments on the interest income. In terms of our guidance, I think we just chosen to keep it unchanged, yeah. I believe that if we look at where we are now, that the first half of the year has unfolded more or less as we expected, and because of that, we decided not to make any changes to the guidance, yeah. I mean, that's not an indication that we are going to lose money. You should not read that as an indication that we expect to lose money in the second half of the year. On, on unit cost, I expect to see further improvement or, on unit cost in the second half of the year, yeah. The intention is definitely to also bring that then again, further down in 2024. How far that is possible, I mean, we're just going through that as we speak, and let's not forget that there are also a number of external factors, not last, bunker fuel, yeah. The cost of bunker, that, that definitely influences that. When you look at next year, we also shouldn't forget that we have also a number of factors that actually push that cost up, yeah, against, for example, the EUAs that we that we need to start paying as from 1st of January. With that, Mark, maybe, maybe you can give a couple of comments on the interest income. Yes, sure. I think when we looked at our overall position, due to the high liquidity position and our cash position, we were able to generate, more important, due to the change in interest rates overall, interest kicked in. That started gradually over, over the changing, we have seen. That will be a bigger position over the next coming quarters. We have to see that, that's also true, and full numbers you can see, and we can hand them out to you, what it means for the last half year. I think, Alexander, if we can do that? Don't have them from the top of my head now, the final numbers, but they were substantial for sure. Okay. Brilliant, that would be helpful. Could I just ask just one more question, just, maybe to Rolf. In terms of, of, of freight rates and the sort of 18-month look at outlook, given supply, demand, and that dynamic, is it fair to then just conclude, given that supply will be above, likely above demand, that freight rates from current levels will, it'll be difficult for them to do anything meaningfully in terms of, you know, rebounding from current, current levels? I don't know. I don't know, Andy. I mean, the freight rates are probably the most, the single most difficult thing to predict in, in our industry. I think that we see a number of lanes at the moment where rates are clearly below cost. I don't think that's sustainable. I believe that's also why you see a bit of a rebound in one or the other spot rate at the moment. I don't think that freight rates, freight rates on average are going to double, yeah, over the next 18 months, if, if that's your question. I would still expect that, that we. You know, there is still a fair chance, I think, that just, that they, on average, will be a bit better than when we have, what we have seen in some parts of Q2. It's anybody's guess because this, it's just the thing that's the most difficult to predict. Thank you. Rolf, are you, are you surprised with the relatively low levels of, of idling, or is that in line with your kind of, expectations? No, not, no, not so much because I believe that there's a lot of charter tonnage that, throughout the pandemic, was fixed for three or five years. That means that there's quite a lot of people who sit on long charter commitments at $35,000-$40,000 a day, and that makes just the barrier to then idle them quite a lot higher. That's also why I said earlier that I expect that, latest from the first half of 2024, idling will go up because that's when the first of those contracts start to run out. Right. Thank you very much. The next question comes from the line of Lars Heindorff with Nordea. Please go ahead. Yeah, morning. Thank you for taking my questions as well, also, a few one from, from my part. The first is on, on, on the volumes, I would say, but rather, maybe on, on, the talks that have been about the inventory cycle that's been going on. Now we're hearing a lot of other transport companies talk about they haven't really seen any sort of material destocking yet. Also, I think you maybe stick out a little bit compared to Rolf, compared to some of your peers, talking about maybe signs of improvement in volumes and/or maybe even a, a peak season. Maybe some flavor on if you get anything from the customers on, on believe where they are in the inventory cycle. That's the first one, please. I mean, the inventory cycle is difficult to read. I think when you look at the data that are out there, I think your point that it seems that there's still a bit of de-stocking to do is probably right. I think the challenge when you look at inventory is that you always need to look not only at what is the absolute amount of inventory you have, but also can you really use it? 'Cause I wouldn't rule out that there's also one or the other that has a lot of inventory of stuff that they don't re- that they really can't sell, and they may still need other stuff for Christmas. When you look at volumes, as, as I said, I mean, you know, we can only see what we see, and, and what we see is that, that demand over the last 10 weeks or so, or loadings over the last 10 weeks, better said, have been somewhat better. I believe also when you look at CTS statistics and others, you see that the gap to previous year is getting smaller and smaller, so I think that's also consistent. You see some spot rates going up on a, on a couple of the, the trades, particularly the Asia export trades. Also those, I think are signs that, you know, there's definitely a bit of a peak season. and whereas we saw globally, the market being over 4% down in the second half, in the first half of the year, I definitely expect that to be better in the second half also become, because we look at it compared to a fairly weak, especially last four months of 2022. Right. Then on, on the capacity side, I, I so agree with you about your view on, on the long-term TCs, which may be affecting idling, at least at this point in time. In terms of vessel speeds and also the compliance with the new regulation that stepped into force here on the 1st of January, are you slowing down or you have any further plans to slow even further down, maybe on, on, on vessel speeds? The reason why I ask that is because some of the data that we pick up on, on Clarksons, for example, they actually show quite a bit of an increase in the average container vessel speed over the past couple of months. Okay, well, we don't see that. We don't see an increase in the average vessel speed. Not, not sure how they, how they measure that. I think by and large, we see that some capacity is definitely being absorbed because of the new CII rules, because there are a number of services where we have had to add extra vessels to ensure that we remain compliant. I think so far we have done that in, I believe, 18 or 19 services and probably still a few more to come. I, I definitely think that will, you know, there will be some capacity required to cover that. When we talked about that a year ago, I think we said it's a high single-digit%, yeah, of the global fleet that most likely is, is needed for that. I still think that that's not, that assessment is probably not wrong. When we look at average vessel speed, we've actually come down a bit, and we also see that in the bunker consumption. Okay. All right, the last one is maybe on, on, on Latin. A few words on, on the development there. We have a lot of data points from both from the U.S. and Europe, but maybe not so much, on, on that and how volumes are developing on, on that trade lane. I think the volumes in, into Latin America have actually been surprisingly robust, yeah. We probably all thought it was gonna be a little bit weaker, that market, but we have been consistently full, yeah, in that market and, and in many cases, actually oversubscribed, yeah. All right. Thank you. The next question comes from the line of Parash Jain with HSBC. Please go ahead. Hi. Thank you. Hi, Rolf and Mark. I, I have two, maybe, maybe three, if I may. My first question is, is something that you have, you have both answered partially. When I, when I look at your full year guidance in the light of your first half result, I presume the single largest variable that you mentioned also is perhaps the freight rate and the fact that we are halfway through the third quarter and probably with, with some sort of upliftment in the short term, is it, is it the fourth quarter freight rate movement is, is the biggest uncertainty? In that context, would you like to share some color on, what are you seeing in terms of Northwest versus, North South route versus East West, short haul, long haul? Also, if you could share some color on how has been the, this round of contract cycle, particularly in North America. Maybe I'll, I'll get to the next after that. Yeah, I think when you look at, at freight rates, indeed, there's quite some uncertainty around Q4. Yeah, I think that's right. I think that's the biggest uncertainty, when is the peak season going to end, and what will then happen with rates? I think that's absolutely right. When you look at the rates, I think we saw initially that rates come, came down very rapidly, particularly on the Transpacific, with the Asia Europe following. The Atlantic has then followed also in Q2 and has gone to a very, very low level, and I think that has to rebound again at, at some point. The North South routes have been actually, I think, by and large, a bit more stable, yeah. Yeah, that will be all I can say about that. Any comment on the contract cycle in Transpacific, and-? Sorry. With the down in the spot rate, does it give some comfort that those contract rates are likely to be stickier, as originally contracted? I mean, the contract rates on the Transpacific are of course, down a lot, yeah, compared to what they were before. I think they will, if you look back on that in the last, in five years from today, then I think you will see that they have been low. Okay, these contract rates are even lower than 2019 level? I don't remember exactly what the contract rates were in 2019. If you take into account that the cost is 20%-30% higher, yeah, then they are certainly not 20%-30% higher than what we saw in 2019. Okay, lovely. My second question is more on your CO2 reduction target. To achieve your 2030 target, do you think that the LNG biofuel and retrofitting will take you there, or probably will need some push from some of the greener fuel, whether it's methanol or ammonia? I mean, we will certainly have to do more than what we have in the works at this moment, but I do believe that the new ships that are coming in, also the old ships that we are going to take out, biofuel, the fleet upgrade program that we're doing, which gives us a considerable saving on, on fuel, all those are, are levers that will help us to, to get there. I, I tend to agree with you that we haven't done everything yet, yeah, to ensure that we hit that target. Okay, we're only in 2023, so we still have a little bit of time. Okay, and is it too early to gauge customers, interest or seriousness towards paying for the, for, for the green fuel, in the absence of any, any carbon tax available at the moment? Uh Is the cost that you as a shipping line have to absorb, and freight it will be determined by just pure demand and supply? I, I think, you know, in, in our case, you can buy our Ship Green product, yeah, which gives you the opportunity to, to go to, become carbon neutral, and of course, you then need to pay for that. So far, I think we've launched that in May, and we've certainly seen a quite reasonable uptake on that. I believe that by and large, the market is increasingly recognizing that one has to pay for that, yeah, because the hypothesis that the lines will just absorb that is just totally unrealistic, and over time will also not happen. Fair enough. Then my last question along the same line, is, have you quantified the cost associated with EU ETS next year and FuelEU Maritime the year after? Just because it will be centric around Europe, do you think that it will put the European corporates probably on the spotlight, and they might be marginally on a disadvantageous position versus the global carriers outside Europe? I mean, we, we're, we're going through the process to assess what the, what the cost of that exactly will be. I mean, there's a whole ton of variables that you need to take into account, so I'd prefer not to, to just throw out a number at this point in time. We will certainly be able to give some further guidance on that as we move into the fourth quarter. Towards our customers, we will be fully transparent about what the cost will be, and then we will also charge that. Okay, perfect. Thank you so much, and have a, have a lovely day. The next question comes from the line of Mark Zack with Stifel. Please go ahead. Good morning from my side. Thank you for taking my questions. On a couple of data points. First, I guess in your presentation, you say that the volume on the Transpacific in the second quarter, year-over-year, is broadly flat. I guess if you look at CTS data, they show that it's down like mid-teens or something. Could you maybe tell us if this is just a, let's say, difference in scope, or is there anything in your verticals, the goods you move that is significantly different from what CTS data captures? That would be the first question. Second question would be on schedule reliability. I guess you showed that for June, it's like 61% schedule reliability. I believe that's somewhat below the average number that, for example, Sea-Intelligence, publishes. Here again, could you tell us if that's just a difference, let's say, in in definition and scope? Or if not, what's what's the reason that you are below average on on on schedule reliability, still? Then, the third question is on the recent jump in in spot rates on the Transpacific and the Far East. I guess we've now in the second or third week of this increase in spot rates. Could you tell us if you see the highest spot rates sticking for I don't know, for forward bookings for the next one or two weeks? If you expect these to, yeah, the spot rate increase to, to, to just fizzle out like, like the April and June spot rate decrease that we've, that we've observed. That's all from my side. Thank you. Maybe start from the bottom. I think on the, on the spot rates, yes, we've definitely seen that, that the spot rates seem to hold in the, in the markets. If we look the last couple of weeks, then the, the rates that have been booked in the short-term segment have definitely been up. You know, as, as, as you say, it's a short-term segment, so you need to look at that from week to week and, and how far that sticks. It's too early to talk about a trend. On schedule reliability, I mean, as I pointed out in the presentation, that's also something where we are not happy. Yeah, we, we are getting better there, but we're not there where we need to be, so we need to do more work on that. On the, on the Transpacific, you are right. Year to date, the Transpacific is down quite significantly. Last month, it's, it's better, though, the trend is, is different in, in Q1 than in the, in, say, May, June and, and July. We have, I think on the Transpacific, also done somewhat better than market, because we have taken some initiative to, to get some market share back that we lost over the last couple of years. Thank you. On doing more in schedule reliability, just to, to follow up. What, what is currently the main cause of the delays here? Just from, from the outside, look like, let's say, port congestion is mostly or, or totally absent, and there should be enough ships around. Why is the schedule reliability still below average, and maybe for the market, still not back to 2019 levels or so? One reason is, of course, that, you know, there is still a bit of disruption here and there. I mean, if I look at ports that are important to us, then we've seen quite a bit of disruption in Turkey, yeah, in and around Mersin, for example, after the earthquake. We've also seen quite a lot of difficulties in Canada, on the, on the West Coast, where Vancouver, for us, is a big hub. Those things definitely play a role. I'd still say that You look at the first half of this year, the situation has by and large normalized, but it simply takes time to get all the ships also back in position and to readjust the schedules, et cetera, et cetera. It took some time for it to go off track, and it will take also some time for, for it to get to get back on track. I think you see also industry-wide, that it's getting, it's quite a steady trend, that things are getting better, and I expect that to continue over the upcoming months and quarters. Right. Thank you very much. The next question comes from the line of Ben Tillman with Berenberg. Please go ahead. Yeah. Hey, good morning. Maybe just one question from my side, which is basically a follow-up on one of Mark's questions. Regarding volumes, we have seen that CTS is guiding 160 basis points decline in 2023. We're seeing that based on H1, your volumes are down by roughly 3.5%, but you're expecting a recovery. As you mentioned, you probably have seen it in late Q2 already. My question was just if we really have a slight increase in transferred volumes in 2023, across what trade lands, trade lanes do we see that growth coming from in H2? Is it a mixed picture? Is it one or two specific trade lanes where we see an acceleration of volume growth? Just to get a little bit of more color, where is the growth in the volumes coming from or expected to come from in H2? I look at H2, I think you'll see most of it coming from the Asian export trades. Those are the ones that have been a bit better now. Those are the ones that have been down a lot. That's especially when you look at it year-on-year, later on in end of Q3, beginning of Q4, one should expect to see growth compared to 2022. Mm-hmm. And maybe one more question regarding the product mix over there. Do you see any significant changes over there? You mentioned that Asian export trades, what, maybe just if you, if you have the data in your head, what type of product are we seeing there? Is it a similar mix as we have seen in the past, or does it look slightly different? To be honest, I'm not a, I'm not the expert about what are the commodities that we exactly move within the containers. I don't think we see a landslide shift. Yeah. Because these things simply take time. To be honest, I'm probably not the best person to ask for a commodity split. Hmm. Okay. Okay, yeah, that's it from my side. All questions were already answered before. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star followed by pne on your telephone. The next question comes from the line of Tom Swift with Morgan Stanley. Please go ahead. Hi. Good morning, everybody. I guess this is just a question from the, the credit side. Can you, can you just take me through, I suppose, like, the, the cash flow drivers over the second half? I mean, we know the EBITDA, but, you know, CapEx, interest, tax, any working capital, just thinking about the movements there. Then, you know, just thoughts on how you deal with some of the upcoming maturities, what's the plan for that? And do you have any plans for the one outstanding bond in particular? Thank you. I guess that Mark's probably in the best... Mark, please go ahead. Yeah. Yeah, absolutely. Starting with the last one, there are no plans to do something with our outstanding bond or to pay it back. No plans there. Looking at our cash position, first of all, for the first half, we had a very strong operating cash flow, which was in total, slightly, as I said, slightly above EUR 4 billion, EUR 4.1 billion. Big part coming from the first quarter, with close to EUR 2.8 billion and then around about EUR 2.4 billion from the operational side, in second quarter. When we look at our investment cash flow, investing cash flow, for sure, we had, as I said, we had big parts paid out for our transactions, which was, on the one hand side, this Spinelli deal in January and, on the other side, even an higher amount for JM Baxi in Q2. We invested into our ships, partially, some were delivered, some were payments we have done. We invested into our container fleet on top, so that all in all, gave a CapEx volume of EUR 1.6 billion in that first half. Then, you know, on our financing side, we have paid, quite a dramatic dividend, an extraordinary dividend, rightly so, because our invested investors and shareholders have supported us big time over the last decade, therefore, we paid out a dividend still sitting on a very good cash balance overall. When we look at our outstanding debt, we are having, you know, that we have done over the last two years, quite some substantial repayments. Our balance sheet right now with, a cash position, a net cash position of EUR 3.9 billion at end of Q2 or after the first half year. is still with a net leverage of zero. We always said that our net leverage should be somewhere below three times, so let's say somewhere around 2.5 times, where we are not right now. That might give an indication for future financings when we are doing something to get an even more effective balance sheet over time. When we look at our credit metrics, we would be, you could maybe say, easily in from, from the rating KPIs in investment-grade rating, but we are not looking at that right now. Would tie us into a financial policy, which we don't want to be tied into. You know, our KPIs we are looking at, so therefore, we will follow that route and even do more financings tomorrow when we would invest in to invest into assets. Very clear. Very helpful. Thank you. The next question comes from the line of Emily Fung with Barclays. Please go ahead. Yeah, good morning, actually, it's Alexia Dukan here. I had two questions as well, please. Just firstly, given your comments about the cost, the relative cost versus pre-pandemic being higher 20%-30%, and clearly spot rates not being as high or as firm versus pre-pandemic, what do you think needs to happen for the industry to avoid losses in the next couple of quarters? That's one, my first question. Secondly, can you give us a bit of your view on how you think about contract rates versus spot rates? Are your customers willing to commit volume forward with a discount to spot, or are they now kind of willing to accept a premium because you can offer better service, better reliability? Just keen to understand the contract spot dynamics better. Thank you. I, I think when you look ahead into the, into the upcoming couple of quarters, I think there's two things that will drive in the end, whether we're gonna be profitable or, or loss-giving. One is, of course, whether rates will recover a bit, where we've seen some signs that some of the spot rates are a bit better in the last couple of weeks than they were before. Let's see if that continues. The other end of it is, of course, cost containment. We are today significantly above where we were in 2019, 2020, and we're not gonna be able to get back to that level. But hopefully we can still shave a couple of percentage points off there as well, and that should then, the combination of those two, should hopefully prevent us from going into negative territory. In terms of contract rates versus spot rates, I mean, it's very difficult to give a general answer on that. I think there's always periods where contract rates are above spot rates, as they were, for example, in some parts of the second quarter. There are also times where it's the other way around. I think if you look at it in the long run, it actually doesn't matter all that much, yeah? When you look at markets today, this year, contract rates came down a lot. Right now, I think you see that, you know, people are becoming again a little bit nervous because the markets are so low, that going forward, I would not be surprised if we see an increasing number of customers also being prepared to commit volume for a longer period of time at an adequate rate that may or may not be above the spot rate at that specific point in time. That's interesting. Can I just ask a follow-up on your cost kind of response? I mean, how materially can you actually reduce unit costs? You know, if we take that relative figure of 20%-30% you referenced earlier. I mean, is it kind of 50% of that or, or less? What are the key levers you can actually pull? I mean, if you look at it, at the peak, our cost was a, was over 30% higher, yeah. I think the peak we've had was about a little bit more than 30% higher. I think we will not be able to shave off half of that, but it should also be more than 5%. Today, we have shaved off probably 5% of that. I would not be surprised if we can shave off another 5%. Great. Thank you. I appreciate the answers. The last question is a follow-up question from the line of Samuel Bland with J.P. Morgan. Please go ahead. Thanks for taking the, the follow-up. I, I touched on it earlier in my question. It was the, Panama Canal in particular. I, I just wanted to get a comment on that specifically, on whether that is, how disruptive that is at the moment. It sounds like it's getting worse, but is it having a big effect, or could it? Thank you. I mean, it has an effect because it's a draft, yeah, it's a draft issue, so that means you can load less on the ships. Of course, the impact should also not be overestimated because it has a, it has an effect on the carrying capacity of the ships that go through the Panama Canal. It has no effect on the ships that go into the East Coast, that go through Suez or just across the Atlantic a little, depending on where they're coming from. Yes, it has an effect. It's not immaterial, but it is also not huge. Okay, understood. Thank you. This was the last question today. Please direct any further questions to the investor relations team. I will hand over the conference back to Rolf Habben Jansen for any closing remarks. Yeah, thank you very much. Yeah, I think two things for me on to wrap things up. First of all, thank you very much for, for joining, and then maybe also a small organizational thing on, on our end. Maybe first of all, thank you, Heiko, for, yeah, for doing IR for a number of years, and good luck also in your new job and heading up M&A. Alexander will stay in, in IR, so he will be, yeah, continuing to take care of you. Michael Kasthl, who's now responsible for treasury and finance, will in addition, also take on the responsibility for IR. Michael, also, good luck to you. I believe Heiko, not sure whether you want to add anything to that. Only a couple of words from my end. First of all, thank you very much, Rolf. As you just said, I'm taking over a new responsibility and a new challenge here for Hapag-Lloyd as Head of M&A. I would like also to take the opportunity to thank all of you for the great cooperation over the past years. It's been a pleasure working with you, and I always appreciated your support, trust, and, of course, confidence. However, you should remain in very capable hands, as I hand over to Michael Kastl, Head of Treasury and Finances. Rolf also just said, with a longstanding history at Hapag-Lloyd in very senior finance positions, Alexander and the team will remain your main contacts. The team is very experienced and well familiar with all the IR and Hapag-Lloyd related topics. I'm convinced that the team will continue with the same passion and enthusiasm as before. I trust a good relationship will continue with the team. Please address any inquiries from now on to Alex and the team. As I will remain in shipping and with Hapag-Lloyd, there might be a chance that we, that our paths will cross again sometime in the future. For now, I wish you all, but especially Michael and the team, best of luck and everything. Michael, maybe some final remarks from your end. Thank you, Heiko. Very much looking forward into rejoining IR. I am brief introduction. I'm Michael. I joined Hapag-Lloyd in 1996. Since 2009, responsible for the treasury and finance team, so I built the foundation with our capital markets debut in 2010, so some experience in IR already. Thanks, Heiko, leaving me a really good team and all the capabilities here, and really looking forward to engage with all of you over the next couple of years. Thank you very much, and with this, I would hand over to the operator. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining and have a pleasant day.