Ladies and gentlemen, welcome to the DFDS Q2 Report 2023 conference call. Throughout, all participants will be in a listen-only mode, and afterwards there will be a question-and-answer session. Today, I'm pleased to announce Torben Carlsen, CEO. Please go ahead. Thank you very much. Please turn to page three. Good morning. I am joined today by Karina Deacon, our CFO, and Søren Brøndum Andersen, our head of IR, as usual. As you have seen, we raised our outlook yesterday on the back of Q2 earnings above our initial expectations for the year. Last quarter, I mentioned we were confident about the resilience of our combined ferry, road, and rail transport network and our supplementary contract logistics solutions, and we remain confident about the next quarters as well. On page three, you see some of the key current drivers. Our operational performance was strong. We have adapted to the volume slowdown, we've achieved freight ferry rate increases, and we've taken steps to lower cost. Thus, we are very focused on continuing to be the preferred partner of customers. The strong performance was delivered despite headwinds on the channel due to the comparison to last year's situation and the Baltics due to the war in Ukraine. Turkey's volume growth slowed down. Lastly, the oil price spread has returned to normal levels. Our logistics acquisitions are doing well. The recent acquisition of Estron in the Netherlands is expected to close this month. Our customer offerings are stronger. We gain scale benefits. The final thing that's top of mind is optimizing our cash flow. Our adjusted free cash flow is trending at DKK 1.5 billion, as our CapEx this year mainly comprise regular maintenance. All in all, we are optimistic about the second half of the year. We have our hands firmly on all the levers we can control to navigate safely through the current challenging market conditions. Let's turn to slide 4. DFDS group EBITDA down 5% to DKK 1.4 billion. The Q2 2022 comparison, as I mentioned, impacted by elevated channel earnings from P&O suspension last year. Ferry freight EBITDA is down 20% due to lower volumes, the channel 2022 boost, and oil price spread normalization. Our passengers EBITDA is up 28%, driven by higher volumes. Logistics EBITDA is up 26%, including the positive impact from acquisitions. With this high-level introduction, over to Karina on page 5. Yes, thank you. If you look at the, the revenue, the reported revenue decreased 3% to DKK 6.9 billion. It was significantly impacted by lower bunker charges, as the fuel costs declined. If you exclude those bunker charges under the, the freight ferry, revenue was actually up at 2.5% for the group. Looking at the waterfall here to the right, we see these surcharges reflected in, in the ferry decline, which was almost entirely explained by these surcharges. The volume decline that we saw was almost compensated for by higher rates. Passenger business, up by 24% in number of passengers compared to Q2 2022. Q2 2022 was slightly impacted still by, by COVID restrictions, but nevertheless, 24% was pleasing to see, and we also saw higher spends, which increased the revenue. If we look at the sort of the old DFDS logistics, we saw a decline in revenue. There were lower volumes in the entire logistics network, and we also, in the logistics area, had lower surcharges for variables such as fuel and electricity. Finally, we closed in 2022 a relatively small business in Norway, but however, it did have an impact on the revenue here. Acquisitions, as you know, McBurney included for the first time for a full quarter, so they account for the majority of the DKK 390 here. To slide 6. We already mentioned that the EBITDA was down 5%, but as we also explained in the outlook, it was still better than what we had expected. Looking further in the P&L, on the depreciation, it was increased by 6%, but then very much due to acquisitions. The EBITA down, fall of 13% to DKK 755 million, which also meant that we saw a margin reduction of 1.2 percentage points. A line that we don't normally talk so much about, but with the relatively large new acquisition, the amortization line increased quite significantly from the purchase price allocation in relation to the acquisitions. We have the finance cost, significant increase. We have higher interest rates. It was almost a doubling on average since the second quarter of 2022, and then when we compare against 2022, we also have had an increase in the absolute level of net interest in debt. Finally, the effective tax rate, quite low in this quarter of around 4%. Nothing special there. It was simply due to some prior year adjustments, as, as you always have. Because our absolute level is relatively small, we've had a large impact. There's no change in our long-term expectations of 5%-7% effective tax rate. Turning to slide 7 on the balance sheet and cash flow. When we look at the ROIC before the acquisition intangibles, we saw an increase to 11.4%, up from 8.5 in the Q2 of 2022. We also saw an increase in ROIC, reported now at 8.4%, up from 6.3%, the same quarter last year. As Torben mentioned, we strengthened our operating cash flow, it was slightly reduced by our working capital increases and the higher finance costs. With the lower maintenance CapEx, we saw an adjusted free cash flow, almost on the same level as last year of DKK 600 million. LTM cash flow was DKK 1.5 billion, as mentioned by Torben. Finally, looking at leverage, we maintained the 2.9 leverage in our target range, despite the acquisition of McBurney. This was, of course, well ahead of the 3.3x earnings that we had in the second quarter of last year. Slide 8, a few words on ferry. Reported freight ferry revenue was down 13%, only 2% if adjusted for the change in the past surcharges. That means that the 15% volume reduction was almost offset by the higher rates that we have implemented from the beginning of the year. All in all, it meant that EBITDA was down 20%, partly impacted by the reduced volume, but also due to the channel impact from 2022 and higher in net bunker costs, following the decrease in spread. Passenger revenue, as I mentioned, up 14%. The increase in number of passengers came across all the activities, but the most significantly on the channel. We saw an increase on board spend, not least on the duty-free, where we saw a good uptake compared to Q2 2022. It's beginning to take off, as we had hoped for. That meant that the EBITDA on the passenger activity was up 28%, following the volumes and the spend. We saw in the passenger division, a saving on the bunker, simply because of the lower fuel price. On page 9, on the logistics, overall revenue was up 4%. If we look into the 2 divisions, the dry goods revenue was down 2% and 7% down if we adjust our positions, because in the logistics business, we saw quite a tougher quarter with volumes significantly down. We also saw the surcharges, as I mentioned, decrease. Cold chain reported a 10% increase in revenue, but obviously, McBurney had an impact. If we look at the organic growth, it was - 12%. Impacted significantly by lower volumes, especially within the meat transportation. As I mentioned, the closure of activities in Norway is part of the cold chain business. Total EBITDA in logistics was up 26%, and of course, the acquisition had a significant impact. If we look at the old DFDS businesses, it was slightly down, but we think that with the increasing or decreasing volumes, it was good to see that the dry goods, they held on to their earnings, whereas the cold chain saw a slight reduction, but that was also including certain restructuring charges after we have announced a closure of our office in Bruges. That concludes the review of the numbers. Then back to you, Torben. Thank you very much, Karina. On page 10, ferry CO2 emissions intensity reduced 8% across our route network, which is ahead of our 2030 plan. 45% of our 125 ordered e-trucks have, have been deployed. Customers show strong demand, and, and we have no, we see no problems in, in deploying the remaining as, as they get delivered. We have launched the DFDS decarbonization solution platform, where customers can now purchase CO2 reductions, certificates from us. linked to when we use biofuel and electricity in our operations. We have rolled out or begin, begun rollout of new health and safety system, primarily for the land based operations, where we feel that we still have potential to improve. Going to page 12. The summary of, of all what you've heard there, here then is that we have made an EBITDA outlook raise. This is, as we mentioned, due to strong H1 performance, but also that we see that the commercial and operation initiatives that we have launched and executing in H1 will support H2 performance, where also, as you can see in the ferry division, we managed in H1 lower volumes and fuel spread normalization. That volume decline is set to level off in H2, as, as Karina earlier explained. The Logistics division was able in Q2 to protect earnings despite lower volumes. It is our expectation that, that we are able to mirror that performance also in the second half. Revenue continues to be an unchanged outlook of around DKK 27 billion. CapEx outlook also unchanged, as mentioned, an EBITDA outlook raised to now DKK 4.8 billion-DKK 5.2 billion for the year. Our key priorities on page 13 is a continued focus on capacity management to match demand and supply. We continue to execute on our cost adaptation initiatives. We focus strongly on our customers and new customers so that we can fill the network in a balanced way. As mentioned, we have an Estron acquisition that closes this month and will help strengthen our network further. Our green transformation projects will continue to move forward. On the social element of ESG, there's an intensified drive to improve, our gender split at sea. There's a picture Atlas Seaways, with the chief engineer and, and female cadets, in the engine room, and we will more and more see larger groups of, of women on board the individual vessels to create a more balanced work environment. As mentioned, continued safety improvements have also been launched. With that, short introduction over for Q&A from the audience. 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 touchdown telephone. If you wish to remove yourself from the question queue, you may press star followed by two. Anyone who has a question may press star and one at this time. We are having our first question from Ruairi Cullinane from RBC Capital Markets. Please go ahead. Yes, good morning. My first question is on the price mix effect within your freight business, where Karina highlighted that freight revenues are down 2% on volumes 15% lower. How much of that is pricing? I guess, how much were rates up on average this year, and how much of that is a mix effect? Secondly, given your M&A ambitions, how do you see the 7.5% ROIC in logistics? Do you see that as in line with the 8% target, given we're at in the cycle? Or do you think more work needs to be done, and if so, where? Then, perhaps just on freight volumes, where the freight volume decline is still quite steep, given we're now starting to lack more comparable comps, could you please expand a little on your expectations there? You know, is the inventory destocking perhaps playing a role? Thank you. Good morning, Ruairi. That were many questions. I think when you look at the, and I think when you say freight volumes, you refer to our ferry freight volumes. What has happened is that the largest decline we've seen on the channel, so those are also our cheapest lane meters since, since the distance is, is relatively short. So when our, when our lane meters, primarily or, or, most parts are reduced on the channel, then the mix is so that, that the lane meter price goes up, and that is the background for the, for the relatively significant increase in, in lane meters. That, that you have a mix, mix change. As we also write, we have also managed to get price increases. For example, in the Turkish network, where we had not introduced general price increases since our acquisition in 2018, we have now managed a general price increase. On the, and you'll have to follow up if I missed some of it, but on the acquisitions and your subtle questions about ROIC performance in logistics in that connection, we are of course not pleased with the 7.5% ROIC. And mind you, the recent HSF acquisition has generated revenue in the ferry division with some, you know, EUR 4-EUR 5 million of benefits to the ferry. Regardless of that, we have seen some challenges in the meat market, where many meat producers in Europe have had challenges, which has caused relatively big imbalances in our cold chain system. This has been accentuated a little bit with the bad summer weather also, where some of the Italian and Spanish crops were destroyed. We certainly expect over, let's call it the next six, nine months, an increase in ROIC performance in logistics overall, but primarily coming from the cold chain side. You asked about? Expectations for freight in second half. Yes, and, and if, if you're talking ferry freight, then, as I think Karina mentioned, we've had these unusual situations. One, that P&O didn't operate last or 2022 Q2 or most of the quarter, and also the impact of the war in Baltic had not fully set in last year. Now, when we get to the second half of 2023, the comparisons are more regular, and we'll see a significantly lower decline in volumes in the second half of the year than we saw in the first half of the year. Maybe more specifically, we still see that Baltic, channel and the North Sea will have slight declines and probably a fairly flat Mediterranean volume development. Great, thank you. The next question is from line of Ulrik Bak, SEB. Please go ahead. Yes, hi, Torben and Karina. Also, a couple of questions from my side. I will take them one by one. Firstly, you mentioned quite a bit of comments about the bunker spread and surcharges, and you mentioned that Q2 revenues actually increased 2.5%, if you adjust for these bunker surcharges, compared to the reported growth at -3%. If I calculate that correctly, that corresponds to a negative impact of DKK 400 million in Q2 compared to last year. Can you shed some light on how much of this negative delta funnels through to your EBITDA in Q2? Also in that context, how we should think about Q3 and Q4? Well, that part of it, the charge is a, is a simple wash, because that is just passing on the increase in the charts or the decrease in the charts. That part, the 400, you shouldn't calculate anything of that. Of course, you can look at what else impacts the bunker cost on a net basis. There we have, I think we also talked about that after Q1. We have initiated some schedule optimization programs where we look at changing the speed of our sailings. Of course, then there's also the normal optimization of the number of sailings we do. We have talked about on the channel that we could optimize after the collaboration with P&O. All these things have have added t o reduced oil usage, hence some savings on that. Eventually, which I know you're going to come to, the development in the oil spread, where we, as we talked a lot about last year, had quite a significant spread in Q2 last year. For various reasons, which I just explained, we were able to mitigate that negative effect. Okay, looking at H2, have you hedged your position so, so you'll be able to mitigate it too? I would say, yes, we have hedged, but we cannot mitigate because, if you recall the spread levels, in Q3 and Q4, they were very significant compared to where we are at the moment. We will see also a significant impact in the second half of the year from the spread effect. Understood. A question about the channel. Obviously, we've spoken a lot about the market dynamics with the three operators, but can you just give a quick update on how you see the competitive landscape at the moment, and also how you expect the P&O's two new vessels will impact this, these dynamics? Thanks. We continue to do well operationally, and in terms of getting the market share that corresponds to our operational number of trips. The dynamics, when you look at the market shares, seem to be that the tunnel actually has lost market share. Whether that's a consequence of their firm surcharge policy with the electricity, or whether it is or maybe a combination of also the strong schedule that we now offer with P&O, it's of course hard to tell. This means that some of the market share that Irish Ferries have picked up has been sponsored by the tunnel. As far as we can see, P&O are doing, have market shares above their capacity, whereas it's the opposite is true for Irish Ferries. So maybe that is a consequence of the larger ferries that they now operate at P&O. All in all, we are pleased with the performance, and on the passenger side, the market is strong, also in terms of the pricing mechanics that are in place in the markets. Okay. so you have in fact, market share loss following P&O's 2 new ferries, which will enter, yeah, the trade lane in, in H2? Well, one of them has entered already. So we, we, you know, if we lose a 0.2% market share, that's not gonna change our outlook, right? We, we're very confident with our outlook for the channel in H2. Okay. Then just a final question, your revenue per lane meter, also to the previous question just asked. With channel making up a higher share of your volume mix, should we expect revenue per lane meter to decline in H2, or also the impact from the bunker spread? Would it be a fair assumption that the revenue per lane meter should decline in H2 compared to H1? Channel will not have a bigger share. Channel has reduced its share, if it then, if, if we assume that the reductions in the channel volumes now start to resemble the rest of the system, then there would not be that mixed impact. In terms of the fuel, then I think, of course, if, if fuel goes down, then our lane meter price, including fuel, will go down. That we can adjust for in the calculations. The underlying price is not going down per lane meter. We don't offer reductions to customers other than the changes in BAF on a monthly basis. Understood. Thank you. The next question is from the line of Dan Togo Jensen with Carnegie Investment Bank. Your question, please. Okay. Thank you. A few from my side as well here. Could you speak a bit about your implied guidance for second half, implying DKK 2.4 billion-DKK 2.8 billion at the EBITDA level? When we compare to last year, where you had DKK 2.7 billion, what should take it down relatively towards the DKK 2.4 billion? You have mentioned now the bunker spread, are there other things that could work against you when we compare to last year? Elaborate a bit on that spread you have implied for second half. That's the first question. Thanks. Unfortunately, the bunker impact is quite significant. I think we have touched upon that a few times. So on the negative side, that will be the explanation. Then there are, there are certain positives on the other side that, that potentially could take it a little bit up. We have, of course, the acquisition impact, and, and a, a small improvement on the, on the both the freight ferry and the pack side. But overall, from, from the negative side, only BAF to mention. Okay, fair enough. Then, then maybe some words on how you see Turkey developing. You're mentioning you're definitely seeing a slowdown, primarily that was caused by slowdown in Europe. How should we think of Turkish volumes going into 2024? You mentioned top, you saw it flat, more or less, here in second half. Is that also a good, so to say, projection for 2024, or should growth return at some point? For 2024? I, I, I think, I think for now, we, we can see that the slowdown, and primarily Germany is, is, you know, part of the explanation for the, for the flat development in Turkey. The economic measures that Turkey is now taking to curb inflation are hurting a little bit, but hopefully only in the short run. We see this as very positive that inflation is getting curbed. Of course, we hope that in 2024 markets have normalized, and if Germany is back in shape in 2024, together with the rest of Europe, then for certain, Turkey is a place we would, we would see strong growth. I have nothing scientific at this stage. We're, we're much more focused, of course, on the next six months, and there we, we see this flattish development. Okay. Then finally, just on CapEx, your DKK 2.8, that includes the DKK 1.2 in M&A this year, so underlying DKK 1.6 billion, so to say at one rate. Is that the one rate we should look out for here in coming years? Maybe can you elaborate a bit on us, how you see so to say new vessels entering the fleet, decisions of new vessels, and how that could impact the DKK 1.6 CapEx? Thanks. Let me comment on the maintenance, the 1.6. I think we are probably a little bit in the low end with the expectation for 1.6. We also have some acquisitions, for instance, like UN Ro-Ro or Uncertain, which has a bigger fleet. If I, without giving any guidance, I would in my spreadsheet, up it a little bit. Mm. the coming weeks. And then I'll let you, Torben, talk about the- Yeah, we have, we have no, no new vessels in the horizon. Okay. Thanks. Next question is in the line of Michael Vitfell- Rasmussen with Danske Bank. Please go ahead. Yeah, thank you, very much. Three questions from me. First of all, could you just talk a little bit more in detail about the cost initiatives that you do in the logistics division? Do you expect to further accelerate that into the second half in terms of the market environment that we see out there? Then maybe also if you could comment something in absolute terms in terms of costs. My second question is on the unallocated EBITDA. What is driving the difference from DKK 50 million to DKK 100 million? Finally, if you could just discuss a little bit on the target EBITDA margin for ferry passenger. Now you see, the duty-free growing. What do you expect going forward from, from that division? Thank you. Let me start with the logistics cost. We, we have what we do is that when we see volumes dropping, we reduce our haulage. We, we are reducing third-party haulage, we're reducing internal haulage, which means selling trucks, reducing our number of drivers. It's in the planning, planning sections where it's, it's, it's, it's very much proportional to the activity level that we make, make adjustments. Then it has a lot been about, that's not on the cost side, but to make sure that, that we get the right volumes, the right customers in, so that when we lose volumes northbound, that we that that we don't get more volumes in southbound, but, but rather compensate what we have lost. It is, it is basically, in the logistics area, this is a continuous mindset to adjust. We have for 2023 been very clear that this could happen, therefore, we have acted fast. This is part of the reasons why Q2 looks so, so relatively good. Part of the explanation is also that we had some units in 2022 that did not perform 100%. We have successfully managed to turn some of those units around, also helping safeguarding the level, of course. In absolute numbers, I, I cannot tell you the cost savings because it is a mix of having, you know, reduced third-party haulage and internal cost. The third party haulage is a lever that we can automatically increase and decrease almost on a weekly basis. Yes, that I can take the unallocated. The answer is that it's very much a rounding. If you, if you look at 2022, it was 76, and then when we guide, we try to have round numbers. Q1, we said, about 50. Now, maybe it was sort of rounded up to 100. Don't put more into that. If you're looking for the marginal increase, then slightly more G&A or IT, that we call them G&A cost, but don't put anything or put more into that other than it's a slight rounding. When you asked about the margin in the passenger business, it's a little bit of a difficult one because-... Remember the way that we report our EBITDA in passenger, we have sort of the, the full cost, if you could say it like that, from the, what the old BU passenger, so the Oslo, Copenhagen, and the Newcastle and Amsterdam. Whereas when we measure profitability on the channel, the Baltics, we take it as a, as a marginal income compared to the, the freight business. I don't think we can meaningfully give a, a% number for the passenger business. It very much depends on the, on the split between them. There's no doubt that we work very hard on improving what we get out, get out of each passenger, and that comes, of course, both on the, on the sea fare that we can, we can charge. And then, of course, looking at the onboard spend, being duty-free on the UK routes or being other spends, on, on our other routes. We are, we're quite pleased with what the, the team is doing there, and they continue to, to see if they can improve. Great. Thank you very much. If I just may, add another question. On Ekol, if you could just add a bit more flavor on kind of the next steps from your side, and also just to understand the phrase that you put in the report here in terms of the commitments in relation to continuing access for all logistics players to your ferry network. If you please, explain that phrasing, please. Thank you. Can you, and then can you repeat that? What was the sentence you referred to? Commitment. Yeah. What you put in the, in the report is, "As a part of the review process, DFDS has undertaken commitments in relation to continued access for all logistic operators to DFDS ferry routes to and from Turkey. Got it. Got it. Well, the Turkish authorities have, have said that if we were to acquire Ekol, they would not object to it. That has taken 1.5 years almost to before at least we decided to ask them until the conclusion has come. As part of that, there have been a number of questions, and one is whether we would, as a consequence of this, restrict other hauliers and freight forwarders access to our ferry services. We have, of course, gladly entered the commitment to say, "No, we are not going to restrict anybody else's access to our ferry network because of this acquisition." That's what, what that sentence means. In terms of what's next, because it has taken a long time, we are not up to date in terms of, of the performance of Ekol, and it has not been possible to, to, to keep the process going for that long. We will, we will restart the process, and have discussions with Ekol, and then if, if, if they turn out positive, I would expect something early in, in 2024, not, not before that. Great. Thank you very much, the best of luck. Thank you. Thank you. The next question is from line of Lars Heindorff with Nordea. Please go ahead. This morning. Thank you, for taking my questions, also a few one from me, taking one of, one at a time. A question regarding the bunker. I'll try to ask in a little bit different way. I can see that you offered lane minuses up by roughly 2%, but your consumption is down by 13%. You've already indicated that you've been doing some network optimization and also maybe sailing a bit slower. I just want to get your thoughts about this. Is this a relationship that will continue into the third quarter and maybe also even beyond that? It's a little bit hard to hear all your, your views, Lars, but, but we expect the, the, the drive to reduce consumption will continue. My guess is that, that we still have initiatives that, that will also show a significant decreases next quarter. Part of it is from the slowdown, part of it is, I think also Karina mentioned the partnership with P&O, where we have not just slowed down but actually canceled a number of sailings on the channel because we can offer attractive schedules without performing all the sailings ourselves. That, that will also still have an effect in Q3 since, since, since that was not put in place at that stage last year. We'll continue to see reduced bunker consumption through our network in Q3. Sorry if I, I didn't hear your question completely. No, no, that's, that's fine. You answered, answered very clearly. Is it better now? Yes. Okay. Then a question on, on, on the passenger side. You've been talking quite a bit about increasing spend, but if I calculate a revenue per pax, it's down by 70% year-over-year in Q2. I just wanted to get your view on what, what is driving this decline, because we also have been seeing quite a decline in the previous 4 quarters. Then because of, you know, at the same time, you talk about increasing spend per pax, and you talk about the duty for you that you've been setting up as well. I mean, what is driving this decline? Is that an underlying structural change, or should we see something along the same lines into Q3? We haven't calculated it, but when we look at this, we look at it on a route by route basis, where we see the increase, when there are mix changes. In this quarter, I'm pretty confident we'll have seen the channel potentially moving, and even though they now spend duty-free, it's in comparison to how much a passenger on board also Copenhagen spends much less. My guess is it's mix changes. We can come back to that if you talk to Søren afterwards. It's definitely not what we see on the individual routes. You also had lower volumes in Q2 2022, when there were still COVID restrictions, and that meant that you had the average spend was higher as opposed to when you have higher volumes. There's a dynamic there. Well. Okay. The implicit thing is that the drivers spent more than the regular passengers. You can get some details on that. When we just look at the route by route, and the segments, then there is a higher spend. Okay. All right. Thank you. Then on the, on the logistics side, the GP margin up to 38, almost 38% here in the second quarter, quite a step up compared to what we've seen in the, in the past 3, 4 quarters. I just want to hear, is this, is this a sustainable gross margin level as we head into the second half? We had a little bit of a change, with the acquisitions. The way that, that they are, set up, they come in with higher gross margins. As, as we talked about after Q1, it's a new, disclosure that we're making, and, and we should really look at, at the EBIT or EBIT margin when we look at it. The, the increase in the, in the gross margin right now, is impacted by, by the acquisitions. Can you say, can you ballpark say how much, I mean, of the, of the M&A, which is causing the increase? I don't have that number right now, but, we can probably- Okay. Oh, never mind. Okay. Then maybe a few, just sort of more nitty-gritty housekeeping questions. Karina, you talked about the closure in Norway. I mean, what, what effect does that have on in absolute numbers? You had, I think you said 300 and something, which were the M&A impact. I just wonder how much the Norwegian is, is- Yeah, I, Counterbalance in this. We, we could have shown it a net of acquisitions, but we didn't put it in there. We put it into the, the old, logistics business. It's, it's in round numbers, it was about DKK 50 million top line. That's per quarter? No, full year. Full year. Full year. Okay. The group. No, sorry, Mark. It was a quarter. It was the quarter. Sorry, Yeah. Okay. it's. Thank you. On the profit side, it was a, we don't, there was no impact, really. Yeah. No, no, I, I, I understand that. Then another just housekeeping. The interest impact from the higher interest rates on IFRS 16 related leasing costs. Can you give us any indication on what is, what is the impact on the, on the net financials? Sorry, at, at the impact of? On the- The higher leasing costs or the interest on. Yeah. The, it's, it's, it's less mechanical than, than when you're linked to Euribor or Cibor or whatever, but, but we do see an increase on the leasing, liabilities as well. Okay. And the impact in the quarter? We can get to that afterwards anyway. Maybe I can have a chat with Son. Okay, good. Thank you. Can I just... One, one more thing on Ekol? Also a follow-up on that. I mean, I guess this is, as you point out yourself, this is a defensive move if you decide to acquire Ekol. I guess, I mean, the interesting part here is, I mean, what kind of money you will pay for, for maintaining the volumes? As a part of that calculation, you probably need to come up with kind of assessment if you don't acquire it, and if someone else, could it be, I don't know, whoever it might be. Is this part of your assessment? Is the potential loss of volumes if someone else acquire Ekol? Can you give an idea, I mean, what, what to expect there? When we look at, at an acquisition like this, we, we, we, you know, the, the defensive part is a soft factor. Like, we'll have probably, you know, some, some, you know, a handful of things where we say, you know, other than the financial projections that we show here and the return, the shareholder value, et cetera, et cetera, are the things we should consider. In that, there will be, you know, there's a defensive move, embedded here. There are a number of other things. We will not, we will not go ahead and make an acquisition that, that, that is, that is not, you know, creating value on a, on an, on a standalone basis, if you call it that, or, you know, with the, with the financial-... benefits it can deliver to us. The other parts are soft factors that we will consider, and the board will consider when they decide to go for it or not. Okay, all right. Thank you. Very clear. Yeah. The next question is the line of Stefan Olsberg with Sydinvest. Please go ahead. Yeah, hi. Thank you. First and foremost, congratulations on the Q2 results. Yesterday's raised outlook for 2023 made me a bit curious to hear about your thoughts about ROIC and performance of invested capital. Given that invested capital increased 10% compared to Q2 2022, could you please try to elaborate a bit about your thoughts about reporting at this EBITDA level? That was question 1. I would very much appreciate it if you could take my 2 as well. I would appreciate if you could elaborate a bit about the, the ferry and logistics division. How is invested capital taken into consideration when you are calculating possible acquisitions or investments? Do you have a% EBIT target, or is it only at the EBITDA level? Thank you very much. I can, I can... Let me take the second, first. We, we have a ROIC target of 8% for the group. When we make acquisitions, we therefore obviously make ROIC predictions and calculations. Depending then on the strategic interest, you know, we've shown when we acquired in Turkey, for example, that we're willing to accept ROIC levels for 2, 3 years below the 8%, but that we would then expect it to reach the target. That's, that's not different across the divisions that we make those calculations. I'm not sure exactly if that answers your question or what your underlying thought is? No. My, my underlying question is that it's, it's a bit difficult to, as an investor, for me to see the value of an investment if it is at the EBITDA level. I would very much like to see if there is any difference between how much is actually performed as cash flow or at the EBIT level instead of the EBITDA level. Since what we had last year was that in this quarter, that you increased the capital 10%- Yeah. actually we have a decreased performance at cash flow and EBIT level. That makes me wonder if you kind of take the EBIT and the cash flow into consideration, or this is. Yes. primarily a question of ROIC, as I see it now. Well, well, I think actually, ROIC is, of course, the EBIT or a number close to the EBIT is used when making the ROIC calculations. The answer is yes, of course, we do. I know we report on the EBITDA a lot, and that's where we guide. We also report EBIT numbers, and of course, when we make the calculations, we do discount the cash flows, we do ROIC, we look at the EBIT, and the so-called NOPAT, so the net operating profit less adjusted taxes, which is, you know, at least on the ferry side, close to EBIT, and on the logistics, you just need to adjust for the taxes, typically to find these valuations. so I can assure you that, that we use, conventional valuation, models when we look at acquisitions. Thank you very much. Is there a specific target that you kind of would like to achieve on the EBIT level? We I don't think the EBIT level depends on the asset we acquire, because obviously there is a, it's different if you acquire a shipping company with significant vessels or whether you acquire a logistics company with no assets. So when you look at our divisions, you'll see that our EBIT level for our ferry division is significantly higher than for our logistics division, and that's, that's, that's of course, also taken into consideration when we, when we make the evaluations. Thank you very much. Thank you. We have a follow-up question from Ruairi Cullinane. Please go ahead. Yeah, thanks for taking the follow-up. So in Q2, passengers were at 87% of 2019 levels, and it looks like they were higher in July. What do you expect for the remainder of the year? Would you be able to quantify in any way the sort of headwind we should expect at current fuel prices, from bunker spreads going into 2024? Thank you. I, if you take the fuel, Yeah, we will have a slight upside on, on the passenger vessels from, from the lower fuel price. That's clear. Does it only relate to passengers, Rory, your question? Yes. It was just in the passenger recovery in H2. You know, in recent months, we had had a run rate of passengers around sort of 88% of 2019 levels. It looks to me that in July, passengers are much closer to 2019 levels. Is that a, a step up, or does that reflect the 2019 comp? Would you agree with my calculation that we are a lot closer? We're still, we're still behind 19, but, but we are closing in. We are also seeing that some of the high value Norwegian passengers are, are still behind 19, and the international segment on the Oslo ferry, and on the Channel, things have, have, have not recovered as fast as possible. There's still, in theory, there's still upside in, in, in, call it a COVID recovery in the number of passengers. Of course, when fuel goes down, that benefits our passenger business because we don't have any fuel, fuel surcharges in that on that side. I will just add that in our assumptions, we have assumed that we will, we will get closer to 2019, but we will not be on level with 2019 for the full year. Thank you very much. Thank you very much for your participation today and for the good and wide range of questions. As I mentioned in the introduction and, and through the presentation, we are optimistic about delivering our outlook. We continue to pursue development opportunities to, to further enhance our customer offerings, and we very much look forward to speaking to you again soon. Thank you very much, and have a good day.