Q2 2024 TORM PLC Earnings Call
Speaker Change: Thank you for watching!
Speaker Change: Good day and thank you for standing by. Welcome to the TORM first six months and second quarter 2024 results call.
Speaker Change: Please note that today's call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.
Speaker Change: If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. To withdraw your question, press star 1 again.
Speaker Change: Thank you.
Speaker Change: I will now turn the call over to Jacob Meldgaard, CEO. Please go ahead, sir.
Speaker Change: [inaudible]
Jacob Meldgaard: Thank you and thank you everybody for joining us on this call today. This morning we released our company announcement with the results for the second quarter of the year and I'm pleased to report that again this quarter Torum has achieved a strong financial performance.
Jacob Meldgaard: Our timeshare equivalent earnings increased to US$326 million and EBITDA improved to US$251 million as freight rates remained firm throughout most of the quarter.
Jacob Meldgaard: Again, we have witnessed a continuation of the market dynamics that we've seen in the previous quarters, i.e. geopolitical tension stemming from both the Ukrainian-Russian conflict and the escalating confrontations in the Middle East.
Jacob Meldgaard: that leads to rerouting of vessels, longer voyages, and higher ton-mile demand.
Jacob Meldgaard: This, of course, adds to an already tight supply-demand balance in the product-income market.
Jacob Meldgaard: We remain optimistic about the prospects for the coming years as we believe that the supported fundamentals for the positive rate environment is likely to stay intact.
Jacob Meldgaard: Thus, we expect longer-term model, higher utilization rates in the years to come, and at the same time, manageable new building deliveries.
Speaker Change: Consequently, and in line with what you have seen in previous quarters, in early July we entered into an agreement to acquire additional second-hand vessels.
Speaker Change: This time, 8 MR vessels to be delivered during the second half of this year for a total consideration of US$340 million.
Speaker Change: The vessels have all been built at Hyundai Meebo Dockyard in 2014-2015 and six of the vessels have been fitted with scrubbers.
Speaker Change: And then, as you would expect us to do when our vessels reach a certain age, we have divested one 2006-built MR tanker for delivery in the third quarter 2024 for a cash consideration of US$23.3 million.
Speaker Change: Thus, adding it all together, we are both expanding and replenishing our fleet, and as we've done for some time now, we are using our partly share-based structure to finance the transaction.
Speaker Change: By continuing this way forward, we believe that TORM will be in a strong position to further add to our value creation over the coming years.
Speaker Change: All in all, this has been a very satisfactory quarter and in line with our intention of distributing the cash flow net of debt repayment, TORM has declared a dividend for the quarter of US$1.80 per share.
Speaker Change: Thus adding to the positive dividend flow seen over the recent quarters.
Speaker Change: And here, please turn to slide five.
Speaker Change: In the past two and a half years, geopolitical tensions, first in Europe, then in the Middle East, have led to the product-tanker rates increasing to a new, higher average level.
Speaker Change: At the same time, we are also seeing increased volatility in rates as the fleet utilisation has moved closer to full utilisation.
Speaker Change: Please turn to slide eight.
Speaker Change: The main impact of these geopolitical tensions has been a reshaped product-sector trade towards longer distances.
Speaker Change: All while overall trade volumes have risen.
Speaker Change: supported by increasing oil demand and changes in the refinery landscape.
Speaker Change: The EU sanctions against Russia in 2023 led to a trade rerouting towards longer-haul trade both for European imports but also for Russian exports.
Speaker Change: This year, the product tanker market has been strongly affected by the hoochie attacks against commercial vessels at the BAP in Malte Strait.
Speaker Change: The share of global clean petroleum products trade transiting the Suez Canal has declined from 12% to only 4%, meaning 8% of the global trade has been redirected.
Speaker Change: The majority of this is going along the route around the Cape of Good Hope.
Speaker Change: While the Middle East situation is very dynamic, the recent escalation of the conflict between Iran and Israel suggests that the timeline for disruption continues to be drawn out.
Speaker Change: Now please turn to slide 7 for a closer look at the market development here in the second quarter of the year.
Speaker Change: In the second quarter of the year, trade volumes with refined oil powers increased by 2% compared to the same quarter last year, supported by higher oil demand and recent changes in the refinery landscape.
Speaker Change: Together with the longer trading distances, this has led to an overall increase in ton-mile demand for product tankers.
Speaker Change: At the same time, earnings for larger crew tankers have been subdued both seasonally but also given the fact that VLCCs have not directly benefited from geopolitical drivers.
Speaker Change: This has led to a clean-up of a number of VLCCs and SUISMAXes since the end of the second quarter.
Speaker Change: Alela
Speaker Change: As we move towards the fourth quarter.
TORM: TORM expects a seasonally improving crude strength market to significantly reduce incentives for crude cannibalization at the same time as both seasonality and volatility with continued market disruptions will keep clean trade distances longer.
TORM: Please turn to slide 8.
Speaker Change: When we combine the tonnage demand and supply drivers, our calculations show that the product anchor demand-supply balance has stayed on a much firmer footing than before the geopolitical tensions started.
Speaker Change: After an 8% increase in tonnemiles last year, the red seed disruption, together with organic growth and trade volumes, has so far this year added around 10% to tonnemile.
Speaker Change: This has been front-loaded, but actually more than what we had forecasted.
Todd Mile: What is important to mention here is that Todd Mile has grown significantly also on traits not directly related to the red seed disruption.
Todd Mile: At the same time, net feed growth has been much more limited.
Speaker Change: The cleanups of both LR2s as well as large crew carriers have increased the supply of tonnage, but even with this, the supply growth has been much more limited than the growth in tonnage miles.
Speaker Change: Please turn to slide 9.
Speaker Change: The product anchor ordering at shipyards has picked up after years of subdued new building activity. Currently, the order book stands at 19% of the fleet.
Speaker Change: As we have pointed out earlier, new building activity has largely concentrated around the LR2 segment.
Speaker Change: Given the versatility of the LR2 feed, which can trade both clean and dirty products, the LR2 order book should be seen in connection with the dirty AFROMAX order book.
Speaker Change: The combined order book is currently at 17%, which is equal to the share of the combined feed being candidates for recycling.
Speaker Change: Furthermore, it's important to mention that the current order book is spread over four years and with the increasing average delivery time, vessels ordered today will most likely not be delivered before 2028.
Speaker Change: And now kindly turn to the next slide, turn to slide 10.
Speaker Change: When we look further ahead in time, we now expect the potential additional order ring of the product tankers from 2028 onwards to be lower than our previous forecasts.
Speaker Change: This is predominantly due to Chinese CPIs opting to build container vessels, LNG carriers and other vessel segments where China has strategic import interests.
Speaker Change: This coincides with a period where an increasing share of the fleet reaches a natural scrapping age.
Speaker Change: Should a strong freight market result in less than expected scrapping activity, we still expect older vessels to leave the mainstream market and go into sanctioned or carbosserized trades.
Speaker Change: Please turn to the slide, 11.
Speaker Change: Lastly, behind the geopolitical factors that have reshaped refined products and industry, there is a refining industry influx.
Speaker Change: In recent years, new refining capacity has been added in net exporting regions such as the Middle East.
Speaker Change: On the other hand, a number of refineries have been closed in net importing regions, for instance, Europe and Australia.
Speaker Change: This has led to higher trade volumes and higher demand for product anchors.
Speaker Change: Beyond the already announced closures, the refinery environment remains dynamic.
Speaker Change: The risk of falling utilization rates in mature demand regions raises the likelihood of further capacity closures before the end of the decade.
Speaker Change: Here, especially Europe, stands out with older, relatively small and less complex refineries that are more open to international trade than in other regions.
Speaker Change: A new wave of refinery closures is likely to again increase trade with refined products.
Speaker Change: Hello.
Speaker Change: With these comments I conclude my part of the presentation. I'll hand it over to my colleague Kim, who will walk us through the financials.
Kim: Thank you, Jacob. Now, please turn to slide 12 for the financial highlights.
Kim: In the second quarter of the year, our time chart equivalent earnings increased to 326 million US dollars, and based on this, we achieved
Kim: 251 million U.S. dollars in EBDA and 194 million U.S. dollars in net profits.
Kim: When we adjust for the unrealized gains on derivatives in Q2 2023, the operating result is up around 30% year-on-year driven by both the firm's freight rate environment and the increased relative share of LI2s in our fleet.
Speaker Change: Torment Chief Fleetwide TCE rates of more than $42,000 per day with LR2s close to $52,000 per day, LR1s
Speaker Change: at more than 42,000 and Amarsh at more than 38,000.
Speaker Change: It should be noted that spot grades were at a relatively high level in the first part of the quarter, followed by some retreating towards the end of the quarter, as season de-softening started.
Speaker Change: Our fleet had a total of 7749 earning days, i.e. a little higher than the 7451 days we had in the same quarter last year. However, as previously mentioned, with LR2s accounting for a relatively higher part of the total compared to last year,
Speaker Change: We believe these are strong numbers and, added together, they reflect a very satisfactory performance, enabling us to realize TCE rates per day that have increased by $5,700 compared to Q2 2023.
Speaker Change: Further, the results that we have produced translate into a return on invested capital of 29.5%, thus underscoring the positive environment in which we are operating.
Speaker Change: And, as highlighted previously, you should expect us to maintain a stable and conservative financial leverage also in periods where we are increasing our operational leverage as we are using our shares as part of the consideration in connection with acquisition services.
Speaker Change: Again, this quarter our business is generating significant profit and cash flow, and again we remain firmly committed to returning a significant part of our earnings to our shareholders.
Speaker Change: Slide 13 please
Speaker Change: The chart in the upper left illustrates how vessel values have increased over the previous quarters leading to a total value of 3.7 billion US dollars, and it has set values showing a similar progression, reflecting higher broker valuations of the vessels as well as an increased fleet.
Speaker Change: Also, on this slide we show in the chart in the lower left corner, the developed in our net interest bearing debt, which now amounts to 737 million US dollars, thus 157 million US dollars lower than a year ago.
Speaker Change: As we have increased our cash position somewhat and thereby more than offset an increase in our gross debt.
Speaker Change: Based on this, we currently stand at a net loan-to-value ratio of 20.4. However, when subtracting the declared dividend for Q2, then it would be around 25%, but continuing the quarter-by-quarter decline in financial leverage.
Speaker Change: Slide 14, please.
Speaker Change: On this slide we have made an overview of per share development in recent quarters. The result we announce today translates into an EPS of 2.08 dollars, significantly higher than the same quarter last year.
Speaker Change: The share count has increased by 10 billion shares over the period since last year driven by our party share based transactions and is up from 84.9 to 94.9 over the same period.
Speaker Change: Based on our strong earnings, the Board of Directors has declared a Q2 2024 dividend of $2.8 per share, thus upping the dividend by 30 cents per share compared to same quarter last year.
Speaker Change: And now, please turn to slide 15.
Speaker Change: This slide gives you the full overview of the dividend distribution and the key dates to observe. Ex-dividend date for the shares on Nasdaq Copenhagen will be on 28th August and for the shares on Nasdaq New York on 29th August as shares are now trading T plus one in New York.
Speaker Change: but otherwise the same process as usual.
Speaker Change: And now turn to slide 16 for the Outlook.
Speaker Change: Based on the satisfactory results we have published today and the coverage we have for the third quarter of 2024, we increased the low end of our guidance range with 50 million US dollars, and thereby narrowing the guidance range, reflecting the increased transparency on full year numbers.
Speaker Change: Thus we expect TCE earnings for 2024 of 1.15 billion US dollars to 1.35 billion US dollars and EVDA of 850 million US dollars to 1.5 billion US dollars.
Speaker Change: The table shows that we in the third quarter of 2024 expect to have 7859 earning days, and as of 12 August 2024, we had fixed a total of 64% of those at a fleet-wide rate of $38,340 per day.
Speaker Change: Further, for the full year, we are now at 68% coverage at a fleet-wide rate of 42,205 per day.
Speaker Change: And with this, I conclude my part of the presentation, and I will hand it back to the operator who will take care of the Q&A session. Thank you.
Speaker Change: Thank you. We will now open the line for your questions. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. To withdraw your question, simply press star 1 again.
Speaker Change: If you have dialed in and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking a question.
Speaker Change: Our first question comes from John Chappell with Evercore. Please go ahead.
John Chappell: Thank you. Good afternoon. Jacob, I'd hate to start with a big macro one. Seasonality makes complete sense. We've seen it many years.
Speaker Change: I think your chart that explained the Cruden product was very interesting.
Speaker Change: But there is a little bit more, I think, macro uncertainty today. We've seen some softer numbers out of China.
Speaker Change: I think there's more concern about the consumer in general, IEA estimates for growth coming down.
Speaker Change: Your third quarter bookings have been good so far, but do you think that some of the weakness in August could be more than just seasonality and a little bit more cyclical headwinds as we think about how we come out of the summer and into the stronger winter?
Speaker Change: Yeah, thanks, John. Yes, certainly. That's that could be a scenario. If I look back, then it was exactly the same last year. We were experiencing if you if you plot, you know, in your
Speaker Change: data points. If you plot July, August, September last year, we saw exactly the same erosion in rates. So, you know, yeah, it could be that it's not seasonality and it's something more fundamental.
Speaker Change: I don't think that there's something that really points to that at this stage, but...
Speaker Change: Clearly, that would be a risk for our market, but that's not, you know, that's the risk that we are having all the time. When I look at it, sort of, if I take it a step, a notch up, and I think that the oil consumption globally,
Speaker Change: And sort of what we thought would be a potential risk, let's say a couple of years or three or four years ago, which would be a transformation of the underlying economies away, aggressively away from fossil fuels, I think that has
Speaker Change: that's not what I'm looking at right now. So there will be seasonality and there will be bumps, but sort of in the broad view, I don't think this is a sign of this. And looking back, as I say, to 23 numbers, it was exactly the same price mechanism.
Speaker Change: Okay.
Speaker Change: And if we tie that together, you know, now the fleet reaching 96 vessels, which is
Speaker Change: I think by anyone's estimation, certainly critical mass gives you some optionality and flexibility with the fleet.
Speaker Change: If I go back and look at, you know, 7% 10-mile benefit from Russia, 6% from Red Sea,
Speaker Change: It certainly seems like these issues have probably more duration than anyone would have anticipated when they first began. But given that great impact, given now 96 vessels, given maybe some of the macro concerns,
Speaker Change: Is there a desire, or maybe are you looking at a little bit more balance in the fleet? Because it does feel like the contract market has been far more steady and substantially more elevated than the weakness in the spot market we've seen recently.
Speaker Change: Clearly, the markets are not reflecting that there is this speed bump, you could say, currently.
Speaker Change: I think we are going to take it really opportunistically, you know, currently we are of the expectation that this is a seasonality and that it will come back. I think that's the time to actually make those calls rather than in the current environment.
Jacob Meldgaard: Okay. Thank you, Jacob.
Jacob Meldgaard: Thanks. Thank you. Good questions.
Speaker Change: Our next question comes from the line of Omar Nocta with Jeffreys. Please go ahead.
Omar Nocta: Thank you. Hi, Jacob and Kim. Good afternoon.
Omar Nocta: I am, you know, obviously nice earnings as usual and wanted to maybe piggyback a little bit on John's first question. You know, we've obviously, we're in a very strong market.
Speaker Change: Things have clearly cooled off a bit. They remain elevated, definitely from a historical perspective.
Speaker Change: I guess there's been some talk of refinery run cuts in Asia.
Speaker Change: and just wanted to get a sense from you if
Speaker Change: Do you feel like the spot market or the charter markets as they are today are reflecting that already?
Speaker Change: So...
Speaker Change: When we look at it, then actually I think we're starting to see that activity with our clients in Asia is actually coming back from the lows that we saw maybe a couple of weeks ago.
Speaker Change: It is on the back of the China demand have been slow as you pointed to, slower VLCC movements and also that the product.
Speaker Change: I would say flow internally in China has been relatively slow, of course, leading to that you are not calling on more crews into your facility.
Speaker Change: But it may actually lead to being a beneficiary that the product and market will have is that China is still running
Speaker Change: at a rate that is higher than what their local consumption would be, and that you could see that there would be additional export quotas likely.
Speaker Change: to be provided soon. Let's see. It's a political decision.
Speaker Change: But I think it's stacking up against that we will see more exports out of the region rather than less exports out of the region in the coming months.
Speaker Change: [inaudible]
Speaker Change: Okay, so it sounds like effectively, then, the market has been reflecting this for some time.
Speaker Change: The
Speaker Change: A couple questions just to follow up a bit more on TORM specifically. This is perhaps an easy one that I think you probably have answered in the past, but just wanted an update. You mentioned that the 68 scrubbers that are installed on your fleet of the 85 plan,
Speaker Change: I guess, is the plan still to move forward with those remaining installations and would you do those, I guess, as part of your ordinary dry dock of those ships?
Speaker Change: Yeah, so our plan is currently intact and it will be, as you say, also done in the ordinary course of the business. That's a mix of some of the acquisitions we've done.
Speaker Change: Over the last couple of years where it makes still financial sense, of course we will do it case by case.
Speaker Change: and sort of look at what we deem to be the net present value of making the investment. The time is actually not so relevant because we're doing it during the ordinary course, but of course, you know, the installation itself is costly and we do.
Speaker Change: take it case by case and look at whether the installation makes sense. For now, our plan is to go ahead.
Speaker Change: Okay, great. And then just a final one just regarding the dividend. I think this one, it's 87% of earnings this last $1.80. I guess just in terms of the policy.
Speaker Change: How should we think about it in terms of it being formulaic? And I know you get this question a lot, but is the dividend quarterly, is it still formulaic in regards to basically paying out excess cash that's above a reserve? Or has it become a bit more discretionary by the board?
Speaker Change: Yeah, it's always been up to the board for its discretion at the end of the day. But the way we sort of think about it is, as you're saying, and I think we should all think about like whatever we earn or we generate of liquidity,
Speaker Change: Unknown Executive, Kim Balle, Unknown Executive, Kim Balle, Unknown Executive, Kim Balle,
Speaker Change: So it's the same thinking, but of course, if the board deems together management that we should sort of...
Speaker Change: and So it will have another calibration of the final diplegm, we could do that, but in the outset it's the same way we are thinking. We just take the net cash generation per quarter and then we... that's the outset for us, that we will distribute that. We have not changed it per se.
Speaker Change: over the last many quarters.
Speaker Change: Okay. Well, very good. Thank you for that, Kalle. I'll turn it over.
Speaker Change: Our next question comes from the line of Clement Mullins with Value Investor's Edge. Please go ahead.
Clement Mullins: Good afternoon. Thank you for taking my questions.
Clement Mullins: I wanted to follow up on Omer's question on Chinese demand.
Speaker Change: I mean, diesel demand has been fairly weak year to date, as some trucks shift to LNG. And on the other hand, as EV adoption in the region increases, that could also weigh on gasoline demand.
Speaker Change: Could you provide some commentary on when do you expect gasoline and diesel demand in the region to plateau?
Speaker Change: And secondly, do you believe China's infrastructure is able to support continued LNG and EV adoption?
Speaker Change: Thank you for watching!
Speaker Change: Okay, thanks for those questions. I think I'll start with Chinese demand for products.
Speaker Change: Of course, there is, as you point to, a number of factors that is impacting.
Speaker Change: how is the Chinese infrastructure sort of developing both on EVs, adaption of that, and also on consumption of diesel and gasoline on the other side of the equation.
Speaker Change: We see that Chinese demand is going down, but that is obviously not necessarily bad for pork single flow.
Speaker Change: So we are more concerned, not so much about the internal.
Speaker Change: Distribution of Energy Sources
Speaker Change: in the Chinese Ecosystem.
Speaker Change: But rather, what is the impact on trade flows in or out of the refineries? And there, everything has been equal. We don't see that there is a threat from the EV adoption.
Speaker Change: Nor from how the sort of infrastructure issues that may or may not be there to build that further that that is having a negative impact on on the product market as such.
Speaker Change: [inaudible]
Speaker Change: That's very helpful. Thank you for taking my questions and congratulations for the quarter.
Speaker Change: Thanks a lot. Thanks for dialing in and for the question.
Speaker Change: Our next question comes from the line of Peter Hagen with ABG. Please go ahead.
Peter Hagen: Hello and good morning, or good afternoon, I'm wondering.
Speaker Change: [inaudible]
Peter Hagen: Okay, two questions from my side. In terms of the TC market these days, would you consider doing something longer on current levels? And current levels I'm reading is, well, just shy of 30,000 for MRs for three years or a little bit more than 40,000 per day for LR2s?
Speaker Change: Are those levels attractive, you think, for three-year chartering activities now?
Speaker Change: Yes, I think you are right. We did do that during the quarter, we stopped.
Ella: And Ella took for three years with one of our clients in the law.
Speaker Change: Unknown Executive, Kim Ballegaard, Jacob Meldgaard, Unknown Executive, Kim Ballegaard, Unknown Executive, Kim Ballegaard,
Speaker Change: Okay, understood. And in terms of the volumes done, would you sort of consider doing a larger share of your fleet to lock in those rates, or are you happy to trade spots still?
Speaker Change: We're happy either way, you know, so obviously...
Speaker Change: We are believers in that the market will offer, you know, good rewards.
Speaker Change: Good.
Peter Hagen: Until next time, Peter.
Speaker Change: In our opinion, attractive enough to also engage in. Yes.
Speaker Change: Okay, thank you. And a second question for myself. In terms of your presentation in slide 8, you're here showing, well, approximately 8 million deadweights on it.
Speaker Change: if I read it correctly, of crude tankers or LR2s and crude tankers moving into the product tanker fleet.
Speaker Change: Is this to be understood as your expectation for the full year or does this imply that you'll have some sort of reduction from what we now hear are, well, even the LCC's are doing a clean trade agreement.
Kim Balle: Pinn, Jadimett, Jadimett, Jadimett, Jadimett,
Speaker Change: Thank you, that's a good observation, good question. So this is the here and now, this is what we see, the portion of crew tankers that have migrated and you can see in force cannibalized on the product tanker tray. So this is not.
Speaker Change: Our estimation of where we will end the year, we do expect that
Speaker Change: You know a significant ratio of these versus will
Speaker Change: go back into the trade once you see a seasonal pickup also in the VLCC and in the Suez Max trades. So this is here now what we can identify as vessels that are carrying clean petroleum products as we speak.
Speaker Change: And just as a quick follow up on that, speaking for myself, I was pretty surprised when I heard about all those VLCs, in particular, trading clean. And to some extent, it makes me somewhat worry about
Speaker Change: about the product trade, of course, because the crude tanker fleet is larger and if all of them are capable of...
Speaker Change: Coming in and cannibalizing your market. I would think about that as a threat, but to what extent Have you been surprised to see the migrations coming into your part of the market of the past couple of months?
Speaker Change: Yeah, so for us, it is not surprising if the VE market is offering, let's say,
Speaker Change: you pick your number $20-25,000 for a VE and that you can in a way take two LR2 stands and the LR2s are trading at 50 and that you can then optimise your earning on the VE to
Speaker Change: and Jacob Meldgaard, Unknown Executive, Kim Balle, and Unknown Executive, Kim Balle.
Speaker Change: because it's simply not economically feasible. So there was a window where the V's were, where you could say the gap between what V were making and what are the two, were made that incentive.
Speaker Change: I don't think it is incentive, even today, to do it, because you are alternative.
Speaker Change: from, you know, going out of the V market is not attractive right now.
Speaker Change: So I think what it demonstrates is that crude and product is not two separate markets.
Speaker Change: And obviously, if you have no V market, Vs will try to cannibalize on CPPs if those rates are... So I think that's just a... I think it's more that there is a...
Speaker Change: You cannot have a differential, let's say, of three times LR2 to a V, because then it will be attractive to do two LR2 stems on a V and you get a higher TC.
Angelo Castillo: and Angelo Castillo.
Angelo Castillo: All the time.
Angelo Castillo: That doesn't make me nervous.
Speaker Change: Unknown Executive, Kim Ballegaard, Jacob Meldgaard, Unknown Executive, Kim Ballegaard,
Speaker Change: Yes, yes. Thank you. Fully, fully understood and agreed to. I was more speaking to the technical complications of actually cleaning up those, those tankers. I thought it was
Klaus: Kosti and Prasim
Klaus: Unknown Executive, Kim Balle Unknown Executive, Kim Balle
Klaus: Ever Trading, or Be Accepted by the Cargo owners to actually trade. But fully agreed
Klaus: and Sanchez. Yes, thank you.
Klaus: Thank you. That's a good question. Thank you.
Klaus: We have no further questions at this time. I will now turn the call back to Jacob Meldgaard for closing remarks.
Jacob Meldgaard: Okay, thank you very much for dialing in to the second quarter 2024. Have a great day.
Jacob Meldgaard: This concludes today's conference call. Thank you all for your participation. You may now disconnect.