Earnings call transcript: Havila Kystruten AS reports Q1 2025 earnings miss

Havila Kystruten AS, a coastal route cruise company, reported its Q1 2025 earnings, missing Wall Street expectations. The company posted an earnings per share (EPS) of -0.16, compared to the forecasted -0.1469, and reported revenue of 355.9 million USD, falling short of the anticipated 363.9 million USD. Following the earnings release, the company’s stock experienced a slight decline, with a 2.73% drop to 1.09 USD per share, reflecting investor concerns over the earnings miss. According to InvestingPro analysis, the company is currently trading slightly above its Fair Value, with a "FAIR" overall financial health rating of 2.2 out of 5.

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Key Takeaways

• Havila Kystruten missed both EPS and revenue forecasts for Q1 2025.
• The company achieved a positive EBITDA for the fourth consecutive quarter.
• Stock price fell by 2.73% after the earnings announcement.
• Havila plans significant price growth and high occupancy rates for 2025.

Company Performance

Havila Kystruten demonstrated a strong operational performance in Q1 2025, with a significant improvement in EBITDA, which reached 11.2 million USD compared to a negative 18 million USD in the same quarter of the previous year. The company has shown resilience with positive EBITDA for four consecutive quarters, reflecting effective cost management and operational efficiency. InvestingPro data shows impressive gross profit margins of 13.05% and revenue growth of 10.95% over the last twelve months. The company is focusing on enhancing customer experience and broadening its market reach, particularly in attracting younger and more sustainability-conscious travelers.

Financial Highlights

• Revenue: 355.9 million USD, a slight miss compared to the forecast.
• EPS: -0.16, below the forecast of -0.1469.
• EBITDA: 11.2 million USD, a significant improvement from the previous year’s negative 18 million USD.

Earnings vs. Forecast

Havila Kystruten’s Q1 2025 EPS of -0.16 fell short of the forecasted -0.1469, marking a miss of approximately 9%. The revenue of 355.9 million USD also missed expectations by 2.2%. This earnings miss contrasts with the company’s recent trend of improving financial health, as evidenced by its consistent positive EBITDA.

Market Reaction

The company’s stock declined by 2.73% to 1.09 USD following the earnings announcement, highlighting investor disappointment with the earnings miss. According to InvestingPro data, the stock has shown mixed performance, with a -4.86% return over the past six months but a positive 3.16% return over the last year. The stock’s decline positions it closer to its 52-week low of 0.46 USD, signaling cautious investor sentiment despite the company’s operational improvements.

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Outlook & Guidance

Havila Kystruten remains optimistic about its future financial performance, targeting an EBITDA of over 400 million USD for 2025. The company anticipates a 20-30% increase in prices and aims for a 75% occupancy rate, with 81% of capacity already booked. The medium-term EBITDA target ranges from 600 to 800 million USD, and the company is preparing for refinancing in 2026.

Executive Commentary

CEO Ben Martini expressed optimism for the future, stating, "We are very optimistic for the future." CFO Alexander highlighted the company’s pricing strategy, noting, "We have had a steep increase in pricing." Martini also emphasized the company’s efforts to attract a broader audience through shorter voyages.

Risks and Challenges

• Potential economic downturns affecting travel demand.
• Increased competition in the coastal cruise market.
• Environmental regulations impacting operational costs.
• Currency fluctuations affecting financial performance.
• Dependence on government contracts and regulatory changes.

Q&A

During the earnings call, analysts questioned the company’s refinancing strategy and occupancy seasonality. Executives addressed pricing and cost management strategies and discussed the potential for euro-denominated financial reporting in the future.

Full transcript - Havila Kystruten AS (HKY) Q1 2025:

Moderator: Due to today’s earnings call of the Havilah Kustruten AS following the publication of the q one figures of 2025. Havilah is represented today by the CEO, Ben Martini, and CFO, Alexander. So the management board will speak shortly and guide us through the presentation and the results. After the presentation, we will be happy to take your questions if you may have via the audio line or the chat. And having said this, Ben, I hand over to you.

Ben Martini, CEO, Havilah Kustruten AS: Thank you very much, and welcome to our quarterly presentation for first quarter twenty twenty five. Next, please. Yeah. Some pictures and some recognitions throughout last year and the first quarter. Nice to just show you that.

Next, please. I will take you through a general update, and then Alexander will go more into details when it comes to the figures. For those of you not knowing us and the coastal route, we are a part of the a concession with the Norwegian government. There are, in total, 11 vessels in this route. We have four of those 11 vessels, and we have a contract with the Norwegian government until 2030 or 2031 if the government will extend one year.

Presently, they are preparing the next concession from 2030 to 2040, and, certainly, we will do our utmost to participate in that contest and also have ambitions to grow into this route. Next, please. We have in the first the first quarter continued to to deliver on the performance, exceptional performance throughout the the first quarter. None kind of off hires. The weather is, of course, nothing you can do anything about.

But technical wise, the the vessels are fulfilling our expectations, and we have had % operational uptime for the first quarter. Next, please. We also see that we continue the improvements in all areas of the operations. We have been able to deliver on our targets when it comes to growing the average price per cabins. And in the first quarter, about 35% increase in average cabin revenue compared to last year.

And this is certainly a very positive for for the year end targets when it comes to EBITDA. Have a positive EBITDA of 11,000,000, 11 point 2 million for the first quarter. This could have been higher. We have used a bit more of the marketing budget in the first quarter than we have originally planned for, but this will kind of level out during the year. So this is a more kind of a upfront investment.

And we, of course, also, in the first quarter, have had a bit higher LNG costs that we prepared for. But we see now the forward market of LNG prices is down, and it will really help us for the second quarter. And the forward prices in third and fourth quarter is very positive for our figures. Yeah. And we continue to deliver on the reduction of c o two emissions and also on the food waste targets.

So it’s very positive when it comes to the environmental side of our operation. And the feedback from the customers is also very, very positive. So we still are able to keep a very high net promoter score for all the vessels and in average 70 plus for the first quarter. Next, please. One of the targets we had when we started was to really change kind of more of the sales, from agents, operators to our own channels.

We have had a lot of success doing that, and 2025 is continuing where we continue growing the the sales on our own in our own channels on the web and through our customer call center. Thus, we still have a lot of very good agents where we will keep, and and they are really also helping us filling up the the ships this year also. So we we are continuing the positive development on the sales. We have introduced the kind of campaigns for this fall, and we will, in June, July, start the campaigns also for next year. Yeah.

And we have in place now a CRM system, which also will help us in the kinda growing the product and sales activities both on board and Azure. Next, please. And the development of kind of the the cruise passengers, we we see even though we have still have a very strong customer base from German speaking countries, we we do see that we have been able to change or to develop the customer base. Base is people having a a much higher confident or focus on sustainability. We do see that people prefer shorter voyages, flexibility of choosing shorter voyages, and we have been able to attract kind of customers that are having a higher willingness to pay for our products.

And we also see that the average age of of our customers are continuing down. So last year, we had an average of 54 years of age, and and this is continuing down now in the first quarter. So so attracting kind of a broader audience is have been one of our priorities, and we do see that we have success on that also. Next, please. Yeah.

We as we report in in our first quarter, we have sold 61% of our total capacity for 2025. We if you look at the second quarter, ’70 ’3 percent is sold, and that is kind of secured volume. But we still are growing that volume and selling, especially in April, May is very, very good this quarter. June will also be quite good. So we we are looking forward to present second quarter later.

So this it looks positive, and and we also see that the the peak we’re picking up on the third quarter and the fourth quarter. So very positive trends as we see it. Next, please. Can I give the word to you, Alexander?

Alexander, CFO, Havilah Kustruten AS: Okay. Thank you, Ben. Okay. A couple of words on the financial performance and and the focus area is really on the on the operational part of it, the EBITDA, because I think that that’s the the that’s the focus of the company and and kind of the baseline for for achieving a refinancing down the road. We’re quite happy with having the fourth consecutive quarter with positive EBITDA contribution.

I think you what you see is is top of the seasonality where q one is is the lowest quarter in terms of occupancy and and revenue, while the second and and the third quarter is really the two quarters where we’re gonna make the the EBITDA for the year. So 11,000,000 this year compared to negative 18,000,000 last year. It’s posted. And it’s really driven by, as Ben mentioned, a steep increase in pricing or achieved price per cabin, which is, you know, partly a general price increase, but it’s also reflective of previous trips being rebooked into 2024. So we’re kind of coming off a low low base.

Next slide, please. A couple of words on on the key performance indicators, which we we all feel all are kind of moving in the right direction. We have occupancy has been built from kind of a low base. 2024, we increased 12% percentage points from from 2023. We had a pretty good occupancy at the at the end of last year.

And as Ben mentioned, the the the second quarter and the and the third quarter now look looks pretty good for this year. So we’re kind of aiming for that seventy five percent target for the full year. If you look at the the cabin factor, it’s been steadily increasing, which is which is also very positive. You know, it’s a reflection of how many passengers do we have on average in each cabin. And and the more passengers we have on board, the more onboard sales we’re we’re able to generate.

If you look at the cabin revenue and the ACR, the average cabin revenue, it’s up. Last year, it was up 30%. So we’re obviously coming from a low very low base. This year, in the first part of the year, it’s been sent in the first quarter, which is also very steep. We expect that to level off a little bit over the next over the coming quarters and end up somewhere between 20 to 30% increase in in 2025.

And the onboard spend per fax night is also showing a positive trend. I think the the first quarter was somewhat impacted by by a lot of weather weather. And and a big part of the the onboard sales are excursions. So we’re along a route which is very exposed to weather. And during the winter season, that sometimes poses a challenge.

So so I think the the onboard spend is is somewhat impacted by by the weather. And and we have, as we mentioned, I think, in the in the previous update, a lot of initiatives to drive onboard sales and and to to achieve a higher sale per passenger. And and so that’s an ongoing work that that is being implemented. Next slide, please. Couple of words on on the costs.

We have a of a very stable cost base in terms of of fixed costs, seeing that we are saving, you know, the same route twenty four seven, three sixty five days a year. So the the kind of operating cost is very stable. What we have flexibility on and which kind of is is more variable is the cost of goods sold, which is a reflection of onboard sales. But, also, the manning is somewhat related to office. I mean, we have a minimum manning that we need to maintain, but we can adjust the manning according to the the occupancy.

And then that’s the manning in in the hotel department. Next slide, please. So a couple of words on on the cost. As Bent mentioned, you know, we had some extraordinary costs in in the first quarter. And as you can see on the on the right side, First quarter twenty twenty five is is a bit of an outlier.

And it’s partly impacted by LNG cost being, you know, extremely high in in in the first quarter. The TTF, the the spot price, which is the reference price for gas, which we are exposed to, was peaked in the first quarter. It’s substantially lower at the moment, and forward pricing is positive in terms of expecting lower fuel cost in the coming quarters. And then we have some extraordinary sales and marketing costs. Some of it is prioritization, but there’s also some investments taken in the marketing side in the first quarter.

And we have had some higher admin costs related to to work on the refinancing, and I’ll I’ll get into that in one of the next slides. I think we we do expect costs to be more aligned with the trend line in the coming quarters as occupancy grows and as we will achieve lower fuel costs. Next slide, please. So update on on our guiding or our targets for this this year. What we see for 2025 based on kind of the results and occupancy in the first quarter, what we have on the books now, we have narrowed down the the range to an EBITDA greater than 400,000,000 for the year.

We target an occupancy of 75%, where we have 81% of that on the books at the moment. And we we were maintaining the price growth target of 20 to 30%, which gives us an EBITDA margin in the range of 20 to 30. And then 2026 is is the story of, I mean, there’s still some room to increase pricing, and we have 21% of the occupancy for 2026 on the books. And that is done at approximately 15% higher pricing than this year. So, I mean, we have already achieved the price growth on the volume that is booked.

So I think it is more of a steering steering this to achieve an occupancy closer to closer to the range between 7580%, which would kind of drive that last mile in in the in the EBITDA. And then we are we are also working on a number of initiatives for pre post voyage where we are adding services to our guests. It could be train. It could be hotel. Different kind of experiences that you can only get on on the coastal route.

You cannot get, you know, this type of experience sailing with one of the white big cruise ships, which cannot kind of combine a short cruise with the stay ashore in in Norway. So based on that, we are maintaining our, you know, medium to long term target for EBITDA of 600 to 800,000,000. Next slide, please. A couple of words on on the refinancing and and the overall debt situation. I think the everyone who has followed the company know that the the company was in a very difficult situation back in in 2023 and when the last two ships were delivered.

So we have an expensive bridge financing, And it it’s strict. It’s particularly lender friendly. So but it it’s it’s it it was a financing that enabled delivery of the ships, and it matures in in 2026. We have started the preparatory work for a refinancing process. We have engaged engaged adviser in in first quarter this year, Arctic Sigurdis, and who has been tasked with kind of mapping out the different alternatives that we have, be it the public bond, private bond, leasing structure, etcetera.

So we we’ve had positive discussions with potential lenders during the first quarter. And I think the the feedback is is kind of the same as it has been in our, you know, our own discussions is, you know, potential lenders. They like the assets. They are are very positive to the fact that there’s a state contract backing the cash flow. The improved operational track record is is there, and I think that’s one of the reasons why we have kind of pushed the refinancing a little bit out is all of these lenders are very focused on the operational results and kind of the track record and and and the results as well as the forward looking, but I think the the last twelve months EBITDA accounts in in in this regard.

And for those who have kind of tried the product, I think the the feedback is is very positive. So we’re optimistic about having a solution in a long term solution in in place during the year. And yeah. I think the next slide, please. Couple of words on on the on the balance sheet.

As we have presented earlier as well, the the the kind of value adjusted equity is substantially positive, And this is related to appreciation of of the the vessel values from construction of the ships and ordering until to now, and which is kind of a base for a refinancing of the existing mortgage debt. Next slide, please. So overall, looking at at the share price development, we have made a proposal for the the general meeting coming up now in in June to do a share, not a share split, but to to join 50 shares into one in order to kind of improve the pricing from both the Norwegian kroner perspective, but also a euro or foreign denominated pricing point of view. So we we think that that’s gonna be positive for for the share and for the interest in the share, Facilitating kind of a long term long term solution for the company and your Positive. Okay.

Moderator: Oh, Ben, Alexander, I guess you’re

Alexander, CFO, Havilah Kustruten AS: Can you hear us, Sara?

Moderator: Listening. We can hear you, but not see you anymore.

Alexander, CFO, Havilah Kustruten AS: Can you hear us?

Moderator: Yeah. Yeah. We can hear you.

Alexander, CFO, Havilah Kustruten AS: Okay. We have a bit of a power blackout, I

Ben Martini, CEO, Havilah Kustruten AS: think. Be honest.

Alexander, CFO, Havilah Kustruten AS: At the office. So could certainly disappear. So we can continue.

Moderator: So

Alexander, CFO, Havilah Kustruten AS: Okay. So at at the end, the the key performance indicators, I think we we’ve been through kind of the the main indicators, and this is more for for the analysts to to use in in their, you know, preparations of of of reports.

Ben Martini, CEO, Havilah Kustruten AS: Let

Alexander, CFO, Havilah Kustruten AS: me just see if we can get you up on the screen again, Tara.

Moderator: That’s okay. So when we’re now at the end of the presentation, we can move on to the q and a session anyway.

Alexander, CFO, Havilah Kustruten AS: Okay. Great. You’re you’re online on our screen again.

Moderator: Absolutely. So just for you all, I guess, you’re all fast readers, so this is the disclaimer. And now we would be happy to take your questions. So if you would like to speak directly to Ben and Alexander, just raise up your virtual hand. And you’ve dialed in by phone, you can use the key combination star key nine to enter the queue followed by pressing star key six to unmute yourself.

And as always, you can also submit your questions in the chat box, and we will read them out for you. And in the meantime, we received the first hand from Tim Kruse. So please go ahead.

Tim Kruse, Analyst: Yeah. Good morning, Ben, Alexander. Thanks for the update. Obviously, my question is on the guidance for this year. I’m wondering a bit why you sort of adjusted that because and I think there was a typo in the first version of the presentation.

Thanks for clarifying that you expect now EBITDA above 400, which would have been in the prior range of your guidance. So obviously, that implies a bit that you probably expect to be at the lower range of the original guidance or to 400 then maybe to 500. But even though why why did you adjust it? Is this sort of maybe you want the clean slate for your discussions with the with the with the refinancing partners? And then as an addition, I I presume this mainly comes from lower occupancy expectations.

And then you showed that you can adjust certain personal costs for for lower occupancy. So that, again, would imply that somehow that would have should have been factored in in your prior guidance as well. Yeah. Maybe you could just, you know, give shed some light on that for me. Thanks.

Alexander, CFO, Havilah Kustruten AS: I can I can give the result? And then then you touched upon it, Tim. I think the the main reason is occupancy. I think the initial guiding was between 75 to 80%. I think we’re based on on first quarter and on the booking status at the moment.

We feel more comfortable with with the lower end of that occupancy range. And with that, you know, trying to maintain the very positive pricing pricing picture that we have achieved. I don’t if you have any anything to add or not. Yeah.

Tim Kruse, Analyst: But my question remains that why did you I mean, this would have been in your former guidance, what you just what you just outlined. So that sort of that that’s I mean, I I appreciate that you are very sort of, you know, giving a clear clear picture, but in the end and the market has reacted, I think, slightly negative to that. So that that would have been just my my question why you felt that felt that necessary in in in that respect. But fair enough. Maybe maybe on on on the the contract revenues, they were only slightly increased.

Is this due to the fact that LNG only increased more sort of in the q one and and end of last year? I would have expected that you have maybe a bit higher contract revenue uptake from from price ever overall price increases.

Alexander, CFO, Havilah Kustruten AS: But then it’s related to the indexation of the of the state contract. It’s, you know, the the state contract is adjusted at the end of each year. And kind of the adjustment mechanism goes back to the fourth quarter of the pre which means that the drop in LNG LNG or fuel cost is about is about 25% or 30% of the indexation. And this is a reflection of of the steep fall in LNG pricing in from the peak in in 2223 and down. So that’s the reason, what to say.

Tim Kruse, Analyst: Okay. And that’s So I I

Alexander, CFO, Havilah Kustruten AS: think you would expect somewhat increase next year as the energy pricing in in last year was higher than the previous year.

Tim Kruse, Analyst: Okay. Okay. Understood. Could maybe could you could you give us a bit of a color on what you see sort of on the competitive environment, and that sort of adds to my question on occupancy. What’s what’s the main driver for you to influence occupancy levels?

And if you can, what is your take on on how occupancies compare to your competitor? Because, I mean, the the question remains, like, if you have 2% increase in occupancy this year, how realistic is sort of a 5% increase next year? And is that partially maybe a lower uptake in occupancy this year due to the sharper price increases? What are your thoughts on on that? And and maybe as an add on, the nationality split, is that is that something you would expect also from your competitor, the one you have, or do you think they are more European based, maybe more German customers than that you are able to attract sort of more foreign yeah.

Far far more far abroad sort of guests to your product.

Ben Martini, CEO, Havilah Kustruten AS: So it’s a big question. I think and, certainly, I don’t have the details for for our competitor on this route. But if you look at the the concept, the product we are trying to to develop is basically that we are offering shorter voyages, meaning that we would like to attract also a broader audience, people not necessarily having time to to travel eleven, twelve days, but are would like to have parts of their vacation on our our ships along the coast, and we are the ones offering that. And and that is part of our strategy to build kind of a concept where we could attract and and and and offer that kind of product. And and and going into 2025, it was extremely important for us to ensure that we have balance between the north and south routes.

Last year, it was a 10% kind of difference, unbalanced between north and south. And this year, we have been able to balance it, meaning that we can take the risk to offer shorter voyages, and that is what we are doing now on the kind of the the strategy during the summer, and and the the the sales are picking quite good up. Our competitor is very focused on round trip, and that is kind of also the reason why kind of there are kind of a the segmentation of customers or passengers are a bit different now between them and us. So and I really haven’t heard anything about our occupancy so far. But what I can say is that the occupancy we do see one thing is the first quarter a bit lower than last year.

Last year was, in February, very high due to a lot of the transfers from cancellations in 2022 and ’23 was moved to February. So it’s a very low ACR reflecting kind of the old prices and discounts. But now, like, last year, April, May was not very good for us. This year, we are far above the expectations. So so it’s and, also, like we showed in the presentation, the the customer base is is reflect reflecting an audience that are much more willing to pay up to get kind of to be able to choose their kind of product, how many days they would like to travel, etcetera.

So I’m not sure if that answered your question there.

Tim Kruse, Analyst: Yeah. Partly. But but I understand that data on the on the competitor, unfortunately, they’re not reporting anymore on a quarterly basis. So, yeah, the insights are a bit bit more opaque, but but, yeah, that’s that’s helpful. Okay.

Then then, yeah, for now, that’s the that’s that’s all my questions. All the best. Thanks.

Moderator: Thank you so much for your questions, Tim. So Tim was the only person in the queue, so then we move on to our chat box. And then, first of all, we have here a comprehension question. So did you say you will do a reverse split 50 to one of your shares?

Alexander, CFO, Havilah Kustruten AS: Yeah. It’s correct. 50 to one.

Moderator: Alright. So and then further question. Could you please provide some more details which services you actually provide for the government?

Ben Martini, CEO, Havilah Kustruten AS: Services for the government is, of course, the the the main service is to to keep up sailing the route twenty four seven done on three hundred and fifty six days a year. So so that’s that’s kind of the the main service. In in addition to that, we have to take passengers from port to port, meaning they passengers, not tourists, but locals that would like to travel with us as a ferry. And there’s a tariff from the Norwegian government that we have to follow on that. In addition to that, we have to carry cargo between each porch.

We are doing that in a kind of cooperation also with our competitor. So that’s a kind of ensuring the the the infrastructure for the local communities, especially important in the Northern part of Norway.

Moderator: Alright. Thank you. And then I guess Tim has a quick follow-up. So please go ahead, Tim.

Tim Kruse, Analyst: Yeah. Yeah. Thanks. Thanks for taking it again. Alexander, I just have a question in terms of the the refinancing.

How do we expect to sort of that maybe as a not a concrete timeline, but what is sort of the next next steps? Is it currently you are sort of in in loose contact with some interested parties, and does the the actual process start with bidding, etcetera? So how do we ex can we expect that to go over the next months? Because I think your plan was to have it sort of ideally secured until end of end of q three or reporting of q three. So maybe just sort of what what your current expectation would be in terms of of of sort of process and timeline?

Thank you.

Alexander, CFO, Havilah Kustruten AS: Yeah. So so so we have we have engaged adviser on on mapping out the the options. We have had, you know, preliminary discussions with a number of of interested parties over the over the quarter. I think the it’s a bit of we’re we’re kind of torn in different directions in terms of of of the existing call structure being very strict, which means that waiting has been kind of we have been incentivized to wait and not do this too early. And then at the same time, all of the potential lenders are quite occupied with not only kind of the target and and forward looking EBITDA, but also the historical twelve months EBITDA, which is kind of impacting pricing.

I think it’s it’s difficult to give kind of an exact answer, but discussions are positive. We will move when we feel the timing is right. And we feel that the structure is is good enough for the company. And we have a target to to have this in place this year and kind of do create a more long term long term financing that kind of supports the growth story and and supports the kind of development of the product, and also something that reflects the the underlying value of of both the ships and and and the contract with the government, which that that that’s the part. So I think that’s what we can say today, Alma, but I don’t anything to add.

Ben Martini, CEO, Havilah Kustruten AS: No. Can you say that we are using a lot of time on this. Okay.

Tim Kruse, Analyst: Okay. Yeah. Sure. But it and, I mean, all he was is walking in the right direction for you, I guess. That’s sort of as a reference rate.

I know of I don’t know if it it will be a reference rate, but as one reference rate, definitely, that’s going in the right direction. Yeah. Okay. Thanks, guys.

Alexander, CFO, Havilah Kustruten AS: We are we are seeking euro financing. So Yeah. Because of the revenue mix and and yeah.

Tim Kruse, Analyst: Oh, just just a final follow-up on on sort of housekeeping issues. Is is we changing reporting to Euro potentially something you would have to go through the AGM, or is that something you could, you know, change? Probably not this year, but but something you are still looking at. Yeah.

Alexander, CFO, Havilah Kustruten AS: Yeah. It’s a it’s a process that we need to to do, and it’s also something we need to to sort out towards towards the not government, but different authorities that and especially the tax authorities, etcetera. So it’s it’s could it could be implemented from next year, but it’s it’s not something which is doable this year.

Tim Kruse, Analyst: Okay. Thanks a lot. All the best to you.

Alexander, CFO, Havilah Kustruten AS: Thank you, Ted.

Moderator: Thank you so much. So we have two questions concerning the refinancing, but we missed them by now. So let’s move on as we have a lot of questions. So are there any initiatives to increase the free the free float?

Alexander, CFO, Havilah Kustruten AS: You mean the free float of of shares? No. No. Not not any particular initiatives at the moment other than other than trying to to give more frequent updates to the market. I mean, we have initiated monthly trading updates.

We have started guiding and or presenting our targets, which is which has been positive, but it’s it’s also you know, as as Tim mentioned, we have to be we have to be realistic, and sometimes you have to adjust that that targeting. We’re doing the reverse split on the shares, which we think is gonna be positive for for demand for the shares. But we’re not actively taking any any actions on on on the kind of ownership structure, if that’s the question.

Moderator: Alright. Thank you so much. Are you planning a secondary listing in Germany or elsewhere?

Alexander, CFO, Havilah Kustruten AS: I think at the moment, I think we we are more preoccupied with with building the operational track record and achieving refinancing. And I think when that is in place, secondary listing or listing on on the main exchange would be more more realistic. Yeah.

Moderator: Alright. Are you planning to participate in any investor conference?

Alexander, CFO, Havilah Kustruten AS: Yeah. We we are we are participating in in some of your investment investor conferences, and and I think we were we would like to attend to to the relevant relevant investor conferences that that are taking place, you know, in in Norway and and in kind of the regular places. So yes.

Moderator: Alright. Thank you. Have you done impairment tests of your ships?

Alexander, CFO, Havilah Kustruten AS: Impairment tests? I mean, we have every every quarter, we and in connection with our owner, we we collect broker values, which are about an assessment from a professional ship broker or ship valet valuator taking into account secondhand market, new billing, pricing, etcetera. So I think we are testing the market value of the ships. We have also indications for new building kind of a repeat of of the same ships. We got every marker.

We have this almost two times book value of of the ships, so I think that that should answer that question.

Moderator: Alright. And then we have a quite long question regarding the occupancy. Previously, it was communicated that the cruise business was focused on summer historically, but it changed to more of a year round business with the curve flattening. Looking to the occupancy in q one twenty five, was the flattening of the curve a post COVID catch up effect? So can we expect low winter but very strong summer business?

Ben Martini, CEO, Havilah Kustruten AS: Certificate questions. I I think, basically, for us, it was January was very low, only 51%. February, March, a bit more up. And average for norm if you look at the historical, at least five, six years back, 60 to 64% for the first quarter is quite natural. And the volume into second and third quarter is growing up up to 90%, and the fourth quarter mid sixties.

What we saw last year was that we had 78% in the fourth quarter. Certainly, that’s something we are also targeting this year. So it’s it’s a bit difficult to to to say correct necessarily answer on this. But I think the big differentiator during the seasonality is the price of the product, and that is kind of our main focus this year is to actually lift the average price per cabin so that the the the price of the product is more correct. So but I think this the coastal route is more this is seasonality is is more or less leveled out even though 60 to 70% in the lower seasons is still quite high.

Alexander, CFO, Havilah Kustruten AS: Yeah. I I think if you go back historically and look at the occupancy in the first quarter, I think the the outlook going forward is quite positive because the interest for tourism in Northern Norway is is rising, and it’s a lot higher than it was in the past, you know, to go and experience the northern light and and to see kind of the the wideness of of the Northern part of Norway. And we’re seeing a lot of Asian tourists coming in into Northern Norway, and there’s been opened up a couple of airline routes into from through Finland into, which is positive. And I think we we see that the I mean, the hotel pricing in in kind of the main cities in the North during that period is extremely high. So one area which we are focusing on is is to go try to compete with with this because we can offer a short wage, and then you get to see the northern light, and it’s actually not pricing wise, it it it’s competitive with with the hotel stay on land without any needs included.

So I think definitely there’s the potential there, but it relates to the short voyage concept that we are developing. Thank

Moderator: you. So what are the major catalyst investors can look forward to this year?

Alexander, CFO, Havilah Kustruten AS: I think it’s obviously the operational side of it, you know, achieving achieving that that occupancy and and pricing during the high season. So that’s one one of the things we we touched upon in in the press presentation is we are very balanced in terms of occupancy on the northbound versus the southbound route, which means that we have we have initiated some direct camp campaigns for for short voyage during the summer season, which we are seeing the effect of now in in the bookings, which is which is very positive. So I think the the delivery on the on the operational side is is, of course, a catalyst to to deliver on what we are saying we we think we can achieve. The refinancing is, of course is, of course, a potential trigger for an investor. And then once the I think it’ll be more long term.

Once the next concession around for the government contract is announced, we’ll know more about the competitive foundation for that that concession. And we’ll also have more clarity on on our position, which we we we think is very good for the four ships we have. And we we think we have a good platform for for growth within within the cost group.

Moderator: Thank you. Do you foresee some conversion of debt to equity given the rather high end EBITDA?

Alexander, CFO, Havilah Kustruten AS: I think, yeah, at the moment, we are focusing on on refinancing the mortgage debt, and we have not we have not gone for any equity or debt to equity. So we are working on refinancing on the on on the mortgage debt.

Moderator: Thank you. So by now, we have two questions left from the chat. When will you provide the annual report 2024? On Oslo, Boris, it’s announced as of May 27.

Alexander, CFO, Havilah Kustruten AS: Yeah. That that was provided yesterday. So it was announced yesterday. And I think the just to give a small comment on on the delay in the reporting. I mean, we we we’re a small organization.

We have had kind of a very steep growth in in in volume over the past year, which has kind of taken a toll on on the whole organization. We’re probably experiencing what you would call growth pains, so which is a positive thing. But we have been preoccupied with ensuring that the quality is good. And for that reason, to present the quality figures, we have we kind of delayed the reporting in. But it it was published yesterday along with the first quarter.

Yep. So it can be it’s it’s available in both Norwegian and English, And I think it’s it’s a very nice report. So it’s you can enjoy the reading.

Moderator: Alright. Thank you. And the last question, are you aiming to beat the law guidance?

Alexander, CFO, Havilah Kustruten AS: If we are aiming to beat the lower guidance, I think we are we have a I mean, we have a target guiding now of of more than 400,000,000 EBITDA, which is kind of a function of how we are able to steer the occupancy versus pricing. The pricing we have achieved, so it’s a matter of how do we kind of maneuver the occupancy into that range. We have some some some variability on on the operating cost side. So we are doing kind of we’re taking the initiatives that we can to to to support that target. So I think we the the target for this year is is about 400, and that’s what we’re sticking by.

Moderator: Alright. Thank you so much. So with this, as we did not receive any further questions, we will come to the end of today’s call. So thank you everyone for joining and all your questions. And a big thank you also to you, Ben and Alexander, for your presentation and your time.

So I wish you all a lovely remaining Wednesday and hand back for some final remarks, which concludes our call for today.

Ben Martini, CEO, Havilah Kustruten AS: Yeah. Thanks a lot for everyone that will have a listen and also ask questions. If there are other questions, please send them to us, and we will do our utmost to to answer. We are very optimistic for the future and looking very much forward to presenting the second quarter. So see you then.

Alexander, CFO, Havilah Kustruten AS: Thank you.

Tim Kruse, Analyst: Thank you.

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