All of those who have joined us today, welcome to Tallink Grupp Investor Webinar, introducing the financial results for the second quarter of 2024. My name is Anneli Simm. I am the Investor Relations Manager at Tallink, and I am moderating today's webinar. Today, Mr. Harri Hanschmidt, the member of the Management Board of Tallink Grupp, will walk you through the second quarter results and key takeaways. Mr. Paavo Nõgene, the CEO of Tallink Grupp, will take your questions after the presentation. Although we have already received a number of questions prior to this webinar, we encourage you to submit your questions also through the Q&A function of this webinar, and it would be also nice if you identify yourself when asking those questions. But enough said, I will now hand the microphone over to Mr. Harri Hanschmidt. Hello. Thank you, Anneli. Good afternoon from my side. My name is Harri Hanschmidt. I'm a board member for Tallink Grupp. I will be presenting today the second quarter financial results of the 2024 financial year. As Anneli mentioned, we will go through the results first, and afterwards, you can also ask questions from our CEO, Paavo Nõgene. Before we get to the results, we take a look at the key facts about Tallink. It's just good to remind, and also if there are new listeners. So Tallink Grupp is the leading European provider of leisure and business travel and sea transportation services in the Baltic Sea region. We connect the capitals in the northern Baltic Sea area, and we offer overnight cruises, leisure and business travel, and also Ro-Ro cargo transportation services. We own 14 vessels, and we operate five regular ferry routes. We also do charters. In the end of the second quarter, we had three vessels chartered out. Just to remind, in the end of the first quarter, we had five vessels, and if you look at the like-for-like period comparing to the year ago, then we had seven vessels in charter. We also operate four hotels, three in Tallinn and one in Riga. We have 21 Burger King restaurants in the Baltics. We also have two standalone restaurants called Nok Nok and Flavore. We're happy to say that Nok Nok received recognition and was accepted as a new entry in the Michelin Guide. Tallink had over 5,000 employees distributed between Estonia, Finland, Germany, Sweden, Latvia, and Lithuania, and we offer shopping on board the vessels, on shore, and online. We have strong brands, the Tallink brand, the Silja Line brand, and also our Club One membership program. We have different routes, and then as we are also active in chartering, then we have a slide here for keeping track where the vessels are operating, if something has been chartered out or has returned from the charter. There are some differences between the first quarter slide. For example, our cruise ferry, Victoria, that operates regularly between the Tallinn and Helsinki route, does different operation in summertime, for three months, from 31st of June to 31st of August. It operates together on the Tallinn-Stockholm route together with Baltic Queen. Also, Victoria does eight very popular special cruises to Gotland this year to Visby. Also, there was a name change. The vessel that we operated under the name Star was named by Irish Ferries the Oscar Wilde, and now renamed James Joyce. Also in second quarter, the Superfast IX returned and is currently in lay-up in Tallinn. If you look at the second quarter results, we can see that there was drop in revenue. So the revenues amounted to altogether EUR 210 million and, on a year-on-year, were lower by 8.5%. There are multiple reasons for that. One is that we have less vessels chartered out. Also, there was decreased passenger volume, especially between Finland and Sweden. And also we had an impact from Easter holidays being in the first quarter this year instead of the second quarter. The same reasons also affected the profitability. We ended up with a EUR 46.6 million EBITDA and a EUR 6.1 million net profit. These results were lower than last year, same period. The CapEx remained about the same level. And if you look at the table to the right, so we can see that the passenger numbers was down 5.8%. So we ended with positive EBITDA and positive net results, but lower than last year. The total assets remained about the same. Total equity decreased by almost 5%. This decrease is because we recorded the dividend payment in the second quarter. Interest-bearing liabilities decreased and the net debt was 5.5% lower. So the net debt between the first and second quarter decreased altogether by EUR 32.1 million and went from EUR 581 million to EUR 549 million. If you look at the year-over-year leverage situation, then the net debt decreased from EUR 665 million to EUR 549 million. So altogether, EUR 116 million. So we are clearly deleveraging. Also, net profit was affected by a dividend tax of EUR 9.2 million. That was also recorded in the second quarter of 2024. If you look at the sales by geographical results, we can see that there was in revenues a slight growth actually from Estonia-Finland route by EUR 4.6 million, and Estonia-Sweden, EUR 0.9 million euros. But we saw lower revenues from Finland-Sweden route by EUR 11.7 million. Other, that is, mainly connected to the charters, we saw EUR 13.6 million lower revenues. Result-wise, the Estonia-Finland remained flat. Estonia-Sweden and Finland-Sweden had a weaker result, and the other segment also EUR 7.7 million weaker results, and we ended up with EUR 35 million. If you look at our revenue structure, then this is quite regular, normal structure. We have 48% sales from restaurants and shops, 28% from ticket, 12% from cargo, and 8% from the charters. So the charter pie has decreased on a quarter-over-quarter and also year-over-year level. If you look at The Bridge, then the restaurant and shop sales decreased by EUR 6.5 million, ticket by EUR 1.2 million. There was an increase in sale of cruise cargo transportation by EUR 1.7 million, and accommodation sales were also slightly higher. Income from charters dropped by EUR 13.8 million, ending up in total revenue of EUR 210 million. The dynamics of the seasonality are also now very similar in the last three years. The first quarter is our low season, where we transport about 1.1 million passengers. The second quarter is a little bit warming up, but it's not yet the high season, so we saw 1.5 million passengers. Cargo on these quarters was on the same level as last year. Revenue was slightly lower, but from the dynamics perspective, quite similar to last year. And EBITDA, 34 million in the first quarter, 47 in the second. So half year, we ended up with a positive EBITDA of EUR 81 million. And the dynamics to the profit, we can see that the first quarter we had a EUR 3 million positive profit. But here, I would like to remind that we had one of positive effect from the successful sale of the ferry Isabelle. The second quarter, where we can see this year, EUR 6 million profit, we had negative effect because we started paying dividends, then the dividend tax went to the second quarter, so EUR 9.2 million effect for the second quarter. If you look at the consolidated income statement, sales were slightly lower than last year, same quarter, but the cost of sales remained on the same level. Marketing and administrative costs were also on the same level. We ended up with a positive EBITDA, and EBITDA margin was 22.2%. From the cash flow, although our net profit was lower, we can see that we generated a positive cash flow of EUR 56 million. If you take the capital expenditure, and that was the maintenance and of the ships, that was EUR 4 million. We ended up with a free cash flow of EUR 51 million. Debt financing was EUR 21 million, and interest on the debt was about EUR 8 million. So, the change in cash was positive EUR 22 million. Our total assets remain about the same level of EUR 1.5 million. That's mainly the vessels and the interest-bearing liabilities, as said, are decreasing. We are successfully deleveraging. Shareholders' equity dropped, that was the dividend recorded dividend payout, and we ended up on a very healthy level of 2.7x EBITDA. We have a slide about the loan portfolio structure. So we have long-term bank loans of EUR 522 million as of 30 June 2024, and we have three loan agreements outstanding, a syndicate loan, and two shipbuilding loans. The maturity dates are 4.5-10 years, and the loans are euro-denominated, fixed, and Euribor floating. We have not used overdraft, so we have unused overdraft of EUR 75 million, and total interest-bearing liabilities were EUR 620 million. This is all from my side, and I will give word to Anneli and also later Paavo, who will answer the different questions we have received by email and through the Teams view. Thank you very much. Thank you, Harri. We will now start with the Q&A session, but before we start, I'll hand the microphone over to Paavo, Mr. Paavo Nõgene, for a few welcoming words before we kick off with the Q&A. Yes, good afternoon also from my side. Generally speaking, the quarter two results reflect what is happening in the economy. We have seen decline in the economy in all our core markets, and this also having the impact to our results. Same time, as Harri already mentioned, the situation with the charter vessels and operating vessels are different from the last year, quarter two. Last year, we had 7 vessels chartered out, currently 3, and 2 vessels are without current work. So all in all, as we also calculated the dividend tax cost to the second quarter, we can say that before the dividend tax, our profit was half less compared last year. But also to remind that most of the profit Tallink Grupp normally generates in the third quarter and therefore it's most important that we are doing as well as possible in July, August, and September. But I'm happy to answer the questions. Anneli will read the questions, and I will give the answers as much as we can comment some questions. Thank you, Paavo, and I will start with the questions. The first one is regarding routes. Is Tallink planning to open new routes and, as an examples are routes to Poland or Germany, Denmark or Ventspils? Yes, thank you for questions. We are analyzing all the time different possibilities to open routes or not to open routes. Main principle is that we need to be absolutely sure that this is a profitable business. Why we closed down Riga-Stockholm route when the COVID started, and we haven't started or reopened the Riga-Stockholm route example again, is that we are not sure about profitability and we can see signs what we analyze also from the Tallinn-Stockholm or example, Helsinki-Stockholm, Turku-Stockholm routes. So we take all these aspects into calculations before we announce something new, and currently, we are not planning to open any new routes. Besides, of course, during the summer period, as also mentioned, we're making some special summer cruises to Visby, for example, which are very successful this year. All these eight cruises... But, yes, for regular service, 365 days per year, we don't plan currently to open any new routes. Thank you. Does Tallink plan to do some kind of collaboration or buying some companies, for example, as Viking Line did? If we see it's attractive, if the price is right, and we see that this will give some new benefit for the Tallink Grupp, for sure, we are ready for such kind activities. We are kind of, like, careful with going to buy up some routes or companies which has been kind long time closed as actually this what our competitor did, but not going to comment our competitor's work. We are open for new opportunities, but again, we need to be sure that this give us some extra asset or benefit to Tallink Grupp overall. Thank you. What route are you planning to build new ships on? This is big secret. Thank you. Would Tallink like to have its own cruise ship? We have several cruise ships. Welcome on board Tallin- Stockholm, Helsinki -Stockholm, Turku -Stockholm, and from 31st of August, also Tallin -Helsinki. Are you planning to sell any ferry from the fleet? Again, we sold this year very successfully one vessel, Isabelle. If the time and price is right, we are always ready to negotiate, but we don't want to sell the vessels with loss. Until we don't see that we really need to sell the vessels, we definitely want to get a price which is right in our perspective, and if such current moment is coming, we are again open for different negotiations. Please comment on the sale price of the cruise ship, Isabelle. All what we can say about this sale, we said in the quarter report already, after first quarter. Thank you. Is there any news about the Infortar's offer to buy Tallink shares? We don't know more than it has been published via the stock exchange. What we can say is that we know that Tallink will stay in the stock exchange in Tallinn and Helsinki. There are no plans to change it. On the other hand, we are happy that our main stakeholder want to have even bigger stake in Tallink Grupp, which means that they believe in company, and this is powerful message for Tallink Grupp and Tallink Grupp employees. So, we understand as much as it has been told publicly that it's more for the institutional investors who maybe want to exit, make the exit from Tallink Grupp, and it's not for the retail mainly. So let's see how it goes, but we are happy if our main stakeholder share will increase. This shows the trust for the company. Thank you. What will the board do in the long term to increase and maintain revenues? We work daily basis. We work hard. Actually, if you take this second quarter result and also the revenue, which was slightly down from the last year revenue, if we add the lay-off vessels and their potential revenue while being in the charter, we should be in the same level. So it's not a dramatic decline. This is more reason that we received back one vessel from Canada, which has been there 16 years. Of course, everyone need to understand that, after one vessel has been in charter 16 years, and we will get the notification that vessel is coming back, generally speaking, around three months beforehand, it takes time to find a new job for the vessel. Same happened with the Romantika, the company who chartered Romantika for long-term basis, went bankrupt, and our work was to save the vessel and bring her back to home. Now, we are working to find a new, new job for both vessels, and, when we succeed, actually, in that, in that case, we will see that the revenue is also back in the same level as it was, last year. What do you think of changing dividend policy and becoming first Estonian monthly dividend payer? Would this step attract new shareholders? Yeah, I think it will be headache for the accountant department to pay out the dividends every month. We have seen that, again, our main stakeholder, Infortar, actually are the first company who paying out the dividends twice a year in Estonia from this year. So, maybe this is something Tallink should consider as well. It will benefit for the cash flow, et cetera, but I'm not so sure that to pay out the dividends monthly basis is good practice. It's too much bureaucracy and less time for real work. Have you decided if Victoria will go back to Estonia-Finland route after August 31st? Yes. Victoria starting Tallinn-Helsinki trips after finishing the trips to Stockholm. Is there any way to say how long you will keep a ship in lay-up before changing the focus to divestment rather than chartering? We're working with both scenarios, and also the third scenario, to use the vessels ourselves in our routes. But currently, the layup is less expensive than operating vessels ourselves. So we're analyzing it all the time. We have different negotiations as well to charter out, or there has been also interest to buy the vessels. But as before, time and price need to be right to make the decisions, and if we're going to make such kind of decisions, we will let you all know via the stock exchange release. Thank you. Can investments around EUR 5 million per quarter be sustainable in Q3 and Q4? Any major non-maintenance investments that you see coming? It is kind of sustainable. 90% of our investments are the maintenance investments to the vessels. So, we see that bigger investments can come next year during the first and second quarter to the dry docking of some of our vessels. But, yes, the answer that Q3 and Q4 should be kind of like sustainable, EUR 3 million to EUR 5 million per quarter. Given the current state of our economy and your reductions in net debt to EBITDA, what is the maximum dividend payout that you believe is reasonable? Is 70%-80% possible? We work hard to keep our dividend policy, which means that, we started pay out the dividends again, this year after five years, we wasn't able to do it. So management board true wish is that we can pay out the dividends also next year. We don't have restrictions, from next year, or limitations, from our banks. If you're talking about is it 70% or 80% possible? Juridically, it's possible, but, it also depends what kind investment plans we see in the coming years, and, we need to make the decision, taking into account all such kind of aspects. Let's come back to this during next year, first quarter, when we announce our 2024 results, and then we also can say what we do with the dividends. But our aim is to continue dividend payments and make them back to be regular. There is another question about dividends. Will you keep your dividend policy promise with lower profitability, even if the net income doesn't cover the EUR 0.05 per share dividends? Our promise is to pay out at least EUR 0.05 if it's economically possible. This is how it is written. Mm-hmm. How, how do you plan to improve the profitability of the Swedish routes? Swedish routes has been under the pressure since January. We didn't see such kind pressure end of last year, third and fourth quarter. We all have seen what has happened in the economy in our core markets, Finland and Sweden, and especially this decrease and decline came from the first and second quarter. Currently, beginning in the third quarter, we see that revenues are in normal level. Of course, during the summer, it's also easier to attract people for traveling. But currently, we can say that in July the revenues in Finland, Sweden example, are in kind of normal level, but let's see what the end of the year is bringing to us. Of course, the competition is there, but we believe that if you take route per route, Helsinki-Stockholm, we have a market share higher than our competitor. So this means that we're doing better, and our premium product is loved by the travelers. The Turku-Stockholm route, we made strategic change. We operating just with one vessel. The Galaxy is chartered out from that route. Therefore, the market share is much, much lower. But and also for that one vessel, there has been a competition issue because on Turku-Stockholm route, there are also two new vessels from a third competition or second competitor. So market changing a bit, and there are the novelty effect, where some new vessels coming to the route, and people want to go and take a look of them. So we need to work harder, and we plan some investments to our Turku-Stockholm route, Baltic Princess vessel during dry dock next year, first half. Thank you. What is the company's current fuel price risk management policy? The policy is that we have not fixed, currently in the third quarter, any fuel prices, whether it is the marine gas oil or LNG. So we are buying the fuel market terms with the spot price TTF Rotterdam, I believe. Thank you. What is the competitive situation on the Tallinn-Helsinki routes? Are there any activities that are currently carried out that are actually unreasonable from a business point of view? In Tallinn-Helsinki route, I think that there are no unreasonable activities. Tallinn-Helsinki route is most important route for Tallink Grupp, and from the results also, you can see that we're doing very well on that route. Competition situation hasn't changed. We have two competitors in Tallinn-Helsinki route, and, of course, during the summer, one competitor adding the extra vessels which operating between Helsinki-Stockholm to come also to Tallinn. We don't see it financially reasonable. Our strategy has been that we keep our prices and not going to make huge discounts, what we can see our competitors doing. So we want to keep Tallinn-Helsinki very stable and, yeah, very stable route, financial-wise and also market share-wise. So we are kind of confident that we're doing right thing in Tallinn-Helsinki route, and our vessels are the most modern, our vessels are most green, using the LNG. So we have competitive advantage in Tallinn-Helsinki route, definite, and we have been investing to that route more than EUR 500 million in last 7 years to build Megastar and MyStar. It has been huge investment, but this pays back to the investor also rather well. Thank you. The following two questions have been already answered, but I read them out anyhow. Please explain the reasons why Finland-Sweden route generates less passengers, and the second question is why you don't charter the two ships which now generate purely cost? The next question is what is the nature of EUR 3 million short-term intangible assets are recorded for the first time in balance sheet? Yes, this is the CO2 quota. Maritime industry was added to the Emissions Trading System since first January this year, which means that we need to buy the CO2 quotas from the stock exchange. We're doing it the monthly basis, and that's as we need to give these quotas to the government next year, then it stays in our balance sheet until then, and the number is increasing in the next quarters as well as we buy the quotas monthly based. Any comments that you can give for the demand activity situation in Q3 this year versus last year? I have said somewhere that if our passenger number will stay in the last year level, in the situation where the economy in Europe and everywhere is, then it will be very good result. July has been so far kind of good. We will launch the exact passenger numbers in around 10 days of time. We will see some decline there, but not nothing dramatic. We also see that some passenger mix has changed compared to last year. There are more intercontinental travelers who traveling one way than cruise passengers. Example, Asian tourists who coming from Sweden to Finland, and this having the impact as well. So July has been so far kind of good. Thank you. When should we expect news about the destiny of Romantika and Atlantic Vision? Yes, as soon as someone will give us reasonable offer, we are ready to sign the contract. So if someone want to have the vessel, please contact us. But, as said, we have different negotiations. This takes time. Sometimes they succeed with the contract, sometimes not. We have been, in last months also, in the situations where we have been very, very close by to sign the contract, but then something happening politically or, or economically, and something's postponed. So, our team working hard to find work for these vessels. And, in one day, we definitely can announce that now they are doing something somewhere in the world. Thank you. If Galaxy's charter ends at the end of October and no extension occurs, then to which routes could you possibly deploy the vessel, and would it make economically sense at today's demand level? ... As we're talking here a lot today also about the competition, then we are not going to open these ideas here current at the moment. Thank you. Local news flow from Rotterdam has been that Silja Europa charter has been extended until 2026, yet you don't report this in the reports. Can you confirm the charter extension? Charter is not extended. This was published by some newspaper. Current contract ends thirty-first of December this year, but the partners have possibility to extend it. And as normally, it will happen or not happen around in time frame, two, maximum three months before the end of current contract. Thank you. The following two questions have also been answered, but I will read them out anyhow. Any potential for new charters in the coming months, quarters? And what is the plan with the vessels that are not in charter currently, any potential buyers? The next question is: How do the environmental fees affect you? Environmental fees affect all the industry. The key problem is that the technology is not there yet to invest into some zero-emission maritime fuel. So therefore, we need to buy the CO2 quotas. We forward this price to our clients. Until today, I can see that—I can say that we have done it successfully. Of course, the levels year by year are going to increase. In current year, we need to buy 40% from needed quotas. Next year, it is already 70% and further, 100%. So this brings again the question that what is the right capacity on different routes, how many passengers there can be, and with how many vessels we can operate? For us, it's daily business, and we need to analyze everything. But yes, environmental fees making living more expensive until there are technology which can replace the current technologies. Thank you. Again, this question has been answered, but I'll read it out. Where do you see a need for new ships, and when? The next question is: In what conditions are the ships that are currently not in traffic? The vessels which are not in traffic are in excellent condition and are ready to sail out tomorrow if we announce that they are going to do something. The last question is, do your competitors also have similar problems with Stockholm-Helsinki routes? What we can see from the data we have, that our market share on Helsinki-Stockholm route is around 55%, which means that we are market leader in the Helsinki-Stockholm route, which shows that even with much cheaper prices, they still having the lower market share. So market generally is tricky and has been tricky since beginning of this year. Let's see how the next months will be. But of course, there are operating currently four vessels between Helsinki and Stockholm daily basis, and maybe this is too much after COVID and during the geopolitical situation where we are. But Tallink will continue with both Silja Serenade and Silja Symphony operations year-round. As this was the last question today, we thank everybody for attending and for the questions. We wish you all a good rest of the day. Enjoy the summer and upcoming weekend, and we're looking forward to having you all on our third quarter webinar on October 24th. Thank you, and goodbye.