Stolt-Nielsen Limited (SOIEF) Q1 2025 Earnings Call Transcript

Good afternoon, and welcome to Stolt-Nielsen's First Quarter 2025 Results. As always, the earnings release and related materials are available on our website. We will also be recording this session, and playback will be available on the website from tomorrow. Included in this presentation are various forward-looking statements. Such forward-looking statements are subject to risks and uncertainties, and we will refer you to our latest annual report for further details. I'm Alex Ng, Vice President of Corporate Development and Strategy. Joining me today are Udo Lange, CEO; and Jens Grüner-Hegge, CFO. At the end of the presentation, there will be a Q&A session where you'll be able to take questions online. To ask a question, simply type into the Q&A function on your screen. Thank you, and over to you, Udo.

Thanks, Alex. Welcome, everyone, and thanks for joining us for our Q1 results today. The presentation will follow the usual format. I will begin with an overview of the group's results for the first quarter of 2025 and share some key highlights, then Jens will cover the financials before handing back to me to run through the performance of our divisions, our view of the market outlook and a few concluding remarks. I'll start by saying I'm proud of the whole Stolt-Nielsen team across our global footprint for their commitment to navigating the volatility in the markets, their dedication to pursuing our strategy and the stead focus on safety and protecting the environment. We all aspire to be simply the best for our people, customers and shareholders. And that comes through in all that we do. In the first quarter, we have achieved a solid performance, with EBITDA over $190 million. We have been facing significant uncertainty and volatility in our operating environment through early 2025, driven in the main by geopolitics. The USTR's proposed tariffs and port fees on maritime transport operations would directly impact the global chemical supply chain. And so we're seeing our customers delaying supply chain decision. This directly impacted volumes at Stolt Tankers. Our other businesses lines performed well, providing some stability to our group performance, with non-shipping EBITDA up 6% overall, to an extent, balancing, the 70% decline in Tankers EBITDA to deliver an overall performance of minus 9%. Stolthaven Terminals has seen improved utilization at ongoing strong margin versus the previous quarter. STC has also delivered an improved margin, and Sea Farm enjoyed an excellent Christmas season with sustained strong pricing. The diversification we have within our portfolio across both liquid logistics and agriculture, therefore, create some resilience to shocks in the shipping sector. As a reminder, nearly 70% of our top 100 customers buy more than one liquid logistics service from us. And for Q1, the contribution to EBITDA from our non-shipping businesses was around 40%. This is really the key takeaway from today's earnings call. Stolt-Nielsen is not a shipping business. We have a diversified portfolio consisting in the main of our differentiated liquid logistics department store and leading land-based agriculture. The company is and will continue to be more resilient in challenging times like these. We strongly believe this, and it underpins our announcement this morning of a relaunch of our share buyback program as an effective use of funds for shareholder distributions. To facilitate future growth and further diversification, we continue to invest in our businesses. We completed the acquisition of the remaining 50% of Hassel 4 joint venture and of small-scale LNG carrier Avenir, which not only created the one-off gain this quarter, but in aggregate should also deliver a positive contribution to EBITDA of around $50 million per year. You may have also seen recently that we announced a series of ongoing investments to expand and enhance our operations across the U.S. Since 2019, Stolthaven Terminals has invested more than $200 million in upgrading and expanding terminal assets, and we have further committed projected underway, which will increase investment in the U.S. by a further $200 million in the coming years. We continue to focus on the balance sheet to fund these investments, which will facilitate our future growth as well as meet debt service obligations and provide dividends with ample headroom. The final dividend of $1.25 per share was announced recently, subject to shareholder approval at the AGM. As you probably know, yesterday, there were a number of U.S. trade policy announcement. And last week, we also saw public hearings on proposed U.S. Port fees. These are likely to have an impact on global trade, but it is too early to know the full implications. We are working through these with our customers. Let's now turn the page to review our financial highlights. I said upfront that the operating environment has been challenging, and this has been reflected in this quarter's results. Moving along to the top [ row ]. Operating revenue was down nearly 5% or $31 million, predominantly driven by the lower volumes in Stolt Tankers. We achieved an EBITDA of $192 million, which is down from where we were last year, but a solid result, nonetheless, given the operating environment. The impact of the volume decline is also felt in operating profit, which was $108 million, down $24 million. And this is similarly reflected in the net profit on the bottom left. Free cash flow reflects the significant investments we made into Hassel 4 and Avenir in the quarter, as per the previous page. Net debt-to-EBITDA has increased to 2.8x, again as a result of our investments during the period, and significant headroom remains here. Over the page, we look at some of the key drivers of our performance. Average deepsea TCE revenue for the quarter was $27,620 per operating day, down nearly 8% compared to Q1 last year. This was mainly driven by lower volumes as customer sentiment was impacted by geopolitical uncertainty. On Stolthaven Terminals, utilization is trending upwards quarter-over-quarter, returning closer to the prior year's level. We expect utilization to continue to gradually trend up at healthy margin levels over the coming quarters, delivering earnings scores. Balancing of volumes and rates have driven gross profit per shipment higher, allowing Stolt Tank Containers to deliver an improved operating profit performance, and this is despite the decline in shipment volumes as tank container business pursues higher-margin business. And finally, performance on Stolt Sea Farm has been excellent, where the team have carried momentum from a seasonally strong system sales period into a strong quarter. As you can see here, sales volumes were up, this reflecting strong demand for our turbot and sole whilst also recording high pricing, which drove profit performance for the quarter. That's all for me now. Jens, over to you for the financials. Jens Grüner-Hegge: Thank you. Good afternoon, everyone, and good morning to those of you joining us from the United States. Just as a reminder, our first quarter runs from December 1, '24, through February 28, 2025. And I will compare the first quarter this year with the first quarter last year. So to reiterate what Udo has talked about, the first quarter was filled with uncertainty and volatility impacting sentiment in the tanker markets. And against this backdrop, the performance for the quarter was strong with EBITDA of $192 million, and the company finished the quarter with a strong balance sheet. So let's dive into the numbers. As mentioned, overall performance remains resilient. The drop in revenue was driven by the lower tanker revenue, reflecting reduced volume. This also caused a reduction in operating expense as the time charter hire expense was down, in line with the lower tanker pool results. Revenue in terminals was flat, as utilization was slightly down due to the margin optimization initiative, while rates and margins improved. Stolt Tank Containers revenue was marginally down due to a decrease in shipments, albeit at higher margins compared to the same quarter last year. At Stolt Sea Farm, we saw further improvements driven by higher prices. The quarter also included a $6 million increase in revenue from the consolidation of Avenir. Moving to depreciation. This was up by $6.2 million, driven by the capitalization of additional time charter ships as per IFRS 16 and the consolidation of Avenir and Hassel Shipping 4. Equity income from joint ventures was down compared to the same quarter last year, as both Avenir and Hassel Shipping 4 transitioned from equity accounting to consolidation during the quarter. A&G expense was up compared to last quarter, mostly reflecting the annual inflation impact on salaries. And then operating profit for the quarter was $107.9 million, down from $132.1 million driven by the lower tanker results, with the other businesses being flat to slightly up. The acquisition of Avenir and Hassel Shipping 4 had a minimal impact on this quarter. Our expectation is that these two businesses will contribute an annualized EBITDA of approximately $50 million combined, and that is, of course, subject to market conditions. Net interest expense was up $4 million due to an increase in debt following the acquisition as well as lower interest income. Note also, the $75.2 million gain on the step-up acquisition of Avenir and Hassel Shipping 4. This is a noncash gain and reflecting the step-up of values in the two companies on our original investment. Other nonoperating income was $8.2 million, and that reflects $7 million in dividends received on our investments in Odfjell and Golar. And therefore, net profit for the quarter ended up at $151.4 million with EBITDA of $192 million. And excluding the one-off gains, the net profit was $76.2 million, as mentioned by Udo. So let's move over to the cash flow. Cash generated from operations was up $17 million, as you see on the top line, reflecting a favorable change in working capital movement of about $30 million, partly offset by lower operating results. Interest paid was up $11 million, reflecting the increase in debt, whilst interest received was down $2.3 million following the use of cash on acquisitions, CapEx and other payments. With the increase in taxes paid, the net tax generated from operations was mostly flat. Capital expenditures were up substantially. $158 million was spent on the acquisition of HS4 and Avenir, net of cash received on consolidation. In addition, we spent $36 million on terminal CapEx for organic growth, almost $16 million on the purchase of tank containers and $6 million on dry dockings. We also had some debt movements during the quarter as we repaid $103 million on the facility secured by ships and refinanced another facility, resulting in a reduction in margins. We also drew down $150 million on our revolving credit facilities to support the capital expenditures. And finally, we paid $1.25 per share in interim dividends in early December, resulting in a net cash used in financing activities of $93 million versus $119 million same quarter last year. Consequently, our net cash flow was negative $178 million, resulting in cash and cash equivalents reducing from $334 million to $156 million. Just drawing attention to the graph on the bottom right, you can see our total liquidity position, which at the end of the first quarter was $454 million. Moving over to capital expenditures. The first quarter capital expenditures excluding drydock payments were $226 million, a significant increase from the $87 million we spent in the fourth quarter of '24. And that, of course, reflects the acquisitions we talked about. Remaining for the year, we have just over $300 million: $69 million for tankers, reflecting progress payments on newbuildings; $135 million for Stolthaven Terminals, reflecting additional organic growth and maintenance CapEx; $24 million in STC on the purchase of additional tanks and growth CapEx at Stolt Sea Farm and finally, progress payments made on Avenir's newbuilding program. Looking at the debt's maturity profile on the next slide. The maturity profile now includes the consolidated debt for both Hassel Shipping 4 and Avenir, adding in total, $324 million. This increased the balloon maturities in 2027 and 2028. In addition, we have the $140 million maturity in 2027 under the revolving credit facility drawn during the first quarter to fund the acquisitions. If you look at the bottom left graph, the increase in gross debt in the first quarter reflects the consolidation of the Avenir and Hassel Shipping 4 debt, the $140 million draw on the revolving credit facility, less repayments made during the quarter. And as pointing to the last bullet under the highlights, the $90 million in new debt agreed that we will draw in the second quarter will be used to partly repay the $140 million draw on the revolving credit facility, thereby extending our maturity profile as we have extended the maturity of this facility out to 2031. Overall, the average interest rate remains flat, and we don't expect any material swings in the average interest rate over the next quarters, as the bulk of our debt is fixed. And finally, moving to our financial KPIs. The continued steady performance of the company supports our covenants, but this quarter, the impact came from the acquisitions. The increase in net debt pushed out debt to tangible net worth margin above 1, but still well below our current limit of 2.25. At the bottom right, you can see the dip in EBITDA to $192 million for the quarter, but there was slight reduction in our EBITDA to interest expense at the top right. And at the bottom left, you can see that the net debt to EBITDA increased from 2.2 to 2.82. This is driven by a reduction in cash and increase in debt related to the acquisitions, as well as a slight drop in EBITDA. So overall, we are in compliance with all our debt covenants and have a strong liquidity and balance sheet position. And with this, I would like to hand it back to Udo for the segmental analysis of our businesses, our view of the market outlook and a few closing remarks. Thank you.

Thank you so much, Jens. I'll now take us through the divisional highlights. Let's start with Stolt Tankers. You've seen a decline in performance in our Tankers division this quarter. The chemical tanker market is facing elevated uncertainties from trade tariffs on potential Port fees in the U.S. The lack of clarity on these issues is resulting in deferred supply chain decision-making from our customers and has impacted volumes in Q1. Operating revenue for the quarter was down 9%. Deepsea freight rates came through strongly. However, this was more than offset by volume decline. The lower volume was also the key driver behind the decline in average TCE per operating day, which was $27,600 per day. Operating days increased 2%, with the fleet growth helping to buffer the volume decline. Operating profit was $67 million, with the decline on the year predominantly driven by the volume decrease. Shipping is inherently a cyclical market. We have been enjoying brilliant performance for a number of quarters, but these current macro factors have hurt customer sentiment, and we are feeling the impact. I'm immensely proud of the Tankers team for the way they are rising to these challenging market environments. They are working through many complex scenarios with unclear outcomes. And Maren and her team are tirelessly seeking the optimal solution for our customers. So I thank them all for their efforts. We now look closer at tanker redevelopment for the quarter. The TCE per operating day for Q1 was $27,620 per operating day which is a decline from the peak we saw during 2023-2024. However, rates remain well above the historical average, as you can see on the chart on the right side. We expect the current market sentiment to persist in the near term and for this to have an impact on spot rates in particular. This means that we do expect to see TCE decline into the second quarter by 2% to 5%. But we are seeing early signals that the rate of decline may start to level off. It is important to remind you though that due to the volatility and uncertain geopolitical backdrop, any predictions made are based on today's information and may change quickly as the markets evolve. As a reminder to our analysts, a $1,000 swing in the TCE impacts quarterly net profit by approximately $6 million. At Stolthaven Terminals, revenue and operating profit were flat year-over-year at record high levels. You might remember that in Stolthaven, we are focusing on replacing lower-margin contracts to optimize our portfolio. This has had a knock-on impact on utilization, which has been down over the past few quarters. Our margin improvement strategy is now paying off, and I'm pleased to say that we are seeing the trend on utilization continued to tick upwards, coming in this quarter at 91.9%, a one percent point improvement from the prior quarter. Guy and the Stolthaven team have been working hard to drive higher margins while pushing utilization rates up, and these efforts show in the earnings growth achieved. We have also been watching market developments with interest at the recent acquisition of LBC at a rumored 18x EV times EBITDA multiple, indicating market confidence in the value in the chemical storage market over the longer term. Over the last quarters, we have seen STC balancing volumes and margins, utilizing its global network to prioritize higher margins across all regions. I would like to remind you that for Tank Containers, Q4 is seasonally strong, and Q1, the weakest quarter. Hence, the year-over-year comparison is a better indicator and shows that we are in a good place here. And I'm pleased that through careful management by Hans and his team, our Tank Container business has delivered a stronger operating profit in the quarter whilst we continue to see a challenging market with elevated volatility. Revenues declined 2% year-over-year, and shipment volumes were down 9% due to the soft market conditions in some regions. However, our strategy of disciplined cost control, combined with the focus on improving spot rates in our key markets, have pushed up gross profit per shipment versus the same quarter last year and contributed to a 14% increase in operating profit, which is encouraging in a highly competitive market. And finally, we saw another excellent result at Stolt Sea Farm in Q1, driven by a strong Christmas sales period. Jordi and his team have been able to capitalize on market demand for our high-quality seafood, achieving both sustained higher prices and strong sales volume. Operating revenue was up 4% versus Q1 last year, with operating profit up 7% year-over-year. Owing to high recent demand, we see lower than usual inventory levels, which we will need to manage into the Easter season and the run into our peak summer season. I now want to cover our view of the market outlook before I wrap up for questions. The beginning of 2025 has seen an elevated level of macro uncertainty and supply chain uncertainty to continue as customers digest the implications of tariffs or fees on their trade flows. I'll touch more on this on the next slide. However, if we focus on our market fundamentals, then we believe that they remain supportive. Looking ahead, industry analysts continue to expect modest growth in the Seaborne chemical trade of around 2% to 3% through 2025, which should be supportive for demand for our liquid logistics operations. However, we are closely monitoring how GDP develops, as we see some downside risk based on market indicators and analyst expectations. From a supply side, we have seen declining MR rates since summer 2024, which has led to a softening in our market. Analysts [ see the ] crude and CPP markets as being balanced in 2025 and continue to expect MRs to earn rates in 2025 at a level that would typically keep them operating in the CPP market. We are starting to see green shoots in the MR market, and spot rates are pushing towards levels north of $25,000 per day, which we believe should be supportive for spot rates in our market. Newbuilding ordering continues to grow and is now around 70% of the global fleet. We are closely monitoring this development and what it means for our market. So we expect muted growth in newbuild orders in the near term due to high geopolitical uncertainty and still high newbuild prices. There's still also the opportunity for asset owners to pull back supply in case of a market downturn, with around 27% of stainless steel tankers aged 20 years and older in 2027, meaning that a significant percentage of the global fleet could be retired if necessary to manage supply. We are, of course, assessing the impact of yesterday's U.S. tariff announcement and its impact on global trade, and the team is working closely with our customers to support their supply chain needs in this uncertain global trade environment. Public hearings on Section 301, which contemplates Port fees on Chinese operator and Chinese build vessels, were also held last week. This is complex, with many moving parts. The key impacts on earnings within the shipping sector are going to be on the tonne miles and TCE rates. These are very difficult to accurately assess, as there are multiple potential scenarios as global trade flows adjust. So it's too early to know the full implications. We expect to understand more details in the coming weeks. However, let me give you some more context for consideration. USTR Section 301 could result in Port fees up to $3.5 million per port call compared to up to $40,000 today. Chemical tankers make more than 5,000 U.S. port calls per year, often making a large number of port calls during a single visit. Hence, this could potentially result in U.S. chemical prices to increase by more than 30%, having, of course, potential knock-on effects to the U.S. exports. At the same time, export trade flows from Asia or Middle East would then likely increase. Several scenarios may play out, but a quantifiable impact on tonne mile and freight rates is hard to predict as yet. In the event of an unfavorable outcome on the U.S. port fee hearings, we have a range of mitigating tactics that could offset some of the impact, including reducing port calls, prioritizing major ports, leaning into global trade shifts and passing costs through. Overall, the potential implications for our business are still evolving, and we are watching this closely. But it's important to note that this is an industry-wide challenge rather than a company-specific one. In this context, we are focused on working together with our customers to meet their evolving needs. Most important for us, the impact is somehow mitigated by our global footprint and diversified liquid logistics portfolio, which provides some resilience and flexibility in navigating these shifts. Despite market headwinds, we have executed well and shown resilience across our businesses, thanks to our strong logistics portfolio. In Tankers, we expect the market to remain volatile and heavily influenced by geopolitical events. TCE is likely to decline into Q2, but we see signs of green shoots in our as well as adjacent markets, indicating some potential leveling off of this trend, subject, of course, to potential impact from U.S. tariffs and Port fees. Utilization continued to improve at Stolthaven Terminals. And with the ongoing focus on margins paying off, it is supportive of ongoing positive earnings performance. We have begun to see a strengthening in demand in key geographies for our Tank Container business with stronger spot rates and volume expected. We continue to benefit from our scale of our operating platform and focus on operating costs. And finally, Stolt Sea Farm expects to be able to sustain higher pricing through Easter and into the pre-summer season. We continue to watch the geopolitics carefully, particularly the development of trade policies out of the U.S. and globally. Our strategy is to build sustainable EBITDA, reflecting investments across our portfolio to add industry-leading scale and services for our customers. As you can see in the right-hand chart, non-shipping accounted for just over 40% of the total EBITDA this quarter and provides resilience to market volatility. During times of market instability, our logistics portfolio differentiates us from shipping peers, providing earnings resilience through market cycles. We are surprised that our share price performance has mirrored pure-play shipping stock and is not yet reflecting our underlying earnings stability. This is partly -- while we also today announced the restart of our share buyback program as we see buying shares at today's current valuations as an effective use of funds for shareholder distributions. So I'd like to leave you with one final thought. We continue to believe that we are more resilient to market volatility than pure-play shipping. And that in combination with our clearly fine strategy, we are positioned well to navigate through this uncertainty. We are not a shipping company. We are a logistics department store adding significant value to our customers during these challenging times. Thank you for your attention, and we'll now pass you back to Alex for Q&A. A -Alex Ng: Thank you, Udo. As a reminder, please submit your questions online via the Q&A function, and we will shortly go to the next question. Our first question is for you, Udo. And it's in relation to our liquid logistics strategy. You made a reference to it earlier on in the presentation, but the question is in relation to how that strategy is progressing? And if you have any proof points that you can elaborate on during the presentation?

Yes. So thank you so much for the question. As I said, since I started, we are not a shipping business. We are logistics -- a liquid logistics department store. And what that means is we, over the years, have actually established businesses at scale in Tankers and Tank Containers in and our Terminal business as well. And in times where the supply chains were not as complex, this has actually been rightfully run more as two separate businesses. But now with the supply chain complexity, we really can not only operate independently, but we also compete collectively towards customer with this adds value. And I think the proof points are really customer by customer. So I can point you again back to our Capital Markets Day. I think there, we have three beautiful customer testimonials. And then what you're seeing there is continuing right now and even more so during times of this very high supply chain uncertainty. And of course, the need of our customers to drive down cost. And that is the reason why, again, as I mentioned in the presentation, close to 70% of our top 100 customers are actually buying already more than one service from us.

Very good. Thank you, Udo. A couple of questions for Jens. You're guiding for $50 million annually from both HS4 and Avenir. Could you provide an EBITDA guidance specifically for Avenir LNG? Jens Grüner-Hegge: Thank you for the question. Just as you can imagine, it's a little bit uncertain times, but yes, it is true. We are guiding for approximately $50 million, basis is what we're seeing today in the market for the two businesses combined. If you want an approximate split between the 2, you're probably looking at 1/3 for Avenir and 2/3 relating to Hassel Shipping 4.

Thank you, Jens. And then another question for you. It's a question relating to the share buybacks. If you could provide a bit more color around the rationale for the size and then timings? Jens Grüner-Hegge: So as we announced this morning, our initial buyback will commence first on Monday, February 7, when the blackout period begins. We have a total of $8.7 million available on the previous approvals to buy back shares. We have set a limit that we will go in buy at current levels to support the share price because we feel, one, as Udo mentioned, that being a logistics company, we feel that we're still being priced already close to shipping companies rather than reflecting our diversified portfolio. We also believe that this diversified portfolio will help us going forward. And it also reflects feedback that we have received from a number of investors on a desire to pass back money to investors in the form of buybacks as well, particularly when we look at how their share is priced relative to net asset value and relative to the cash flow that we generate. So that's why we have now embarked on this buyback.

Thank you, Jens. A question for you, Udo, now. Would you be able to add any comments regarding the order book in the stainless steel market and how that continues to grow?

Thank you so much for the question. As you've seen, it's now sitting at 70%. I think what you also see is the newbuild prices are quite significant still in this segment. And on the other hand, probably even more important, and I think that differentiates this segment from other segment is there's a significant opportunity to scrap ships because so many -- such a high percentage is already at a very old age. And so I think what we are seeing right now is as long as we have a healthy business, so far, we are still not seeing significant scrappings in the market. And so that's why, of course, you have this trend there. But this then suddenly TCE effected, I think there's a nice buffer effect there to offset the newbuild percentage. So it's not low anymore, but it's also not high. I would say it's in the medium level, and we are not concerned about this because of the significant scrapping opportunity in the industry. And then, of course, we also look very closely what is the order book in the MR segment, which is around 20. And so that also then is not yet concerning for us overall. So we still feel, in terms of supply, we are sitting in a good space.

Thank you, Udo. Another question for you from me. It's in relation to the Red Sea. We have a lot of volatility in the markets that you've talked about through the presentation. Where is your level of concern in Stolt Tankers in relation to the Red Sea situation?

Yes. So if you look at this year, so -- if everything -- every star aligns, so to say, we believe the earliest return could be in Q4. But based on recent developments, even that is probably not likely. So that we really will see an impact on this in 2025 is -- seems not very likely. I also want to unpack this a little bit more for you because, of course, there were different data sets around, well, how big of an impact was the Red Sea closure. And what it really was in 2024, it led to an increase in tonne mile of 3.3%. Why is that and I said lower than initially expected? Because still a significant amount of operators are actually going through the Red Sea. And that, of course, when then the Red Sea should open up, this -- which are probably not as reputable companies as we are, this type of volume will then become available really to the more reputable players like us. And so you'll see, of course, a reduction in distance because you're not going to go around the Cape anymore, but the impact on volume will be likely less due to this situation. And then also, don't forget there will be more output than also out of the -- out of the Middle East as well, which right now is not possible. So there will be a shift in trade flows. So again, 3.3% last year, likely not an impact on this year. And then going forward, probably also not as strong as an impact as people probably initially expected.

Thank you, Udo. Just as a reminder, to have everyone participating, please submit any questions via the Q&A function. We have one more for now. And it's a question in relation to the USTR potential fees. Should that lead to a reduction in U.S. Port calls? How do you see the potential impact to your Stolthaven Terminals business?

So I think this is overall for all businesses, just by far too early to tell. So we really need to understand what is the outcome. So we are working very closely with our customers and the associations and all the government, of course, on what is meaningful. So I think for this segment, what is particularly relevant, you can take a lot of similarities from how long it took China to build a chemical tanker. So that's not how where they started. This was more than 20 years into the making. And so we and the related associations are pushing actually very strongly for an exclusion of the tanker -- chemical tanker segment because it's probably going to take two decades to build the first chemical tanker in the U.S. And as a further fact, U.S., although in past has never built a sizable chemical tanker. So I think understand that then exactly for the Terminal business is really by far, too early. I think what you will -- what you can say is that out of ports will, of course, definitely hurt. So -- and then because Port call reduction will particularly be there because you can't bear the fees in the smaller ports. And then it leads to, well, what does that then mean for volume shifts overall, but just too early to tell.

Okay. Thank you very much. Well, that completes our questions for today. As a reminder, we will post a recording of the call on our website tomorrow. Udo, back to you for closing remarks.

Yes. Thank you so much, everybody, for dialing in. Really appreciate that, and thanks for joining us. I look forward to talking to you again when we present our results for the first quarter of 2025. Again, thank you, and I wish you all a good day.