Earnings call transcript: Havila Kystruten’s Q2 2025 revenue up 23%, stock dips

Havila Kystruten AS reported a 23% increase in revenue for Q2 2025, showcasing strong operational performance with an improved EBITDA margin. According to InvestingPro data, the company maintains impressive gross profit margins of 13.8% and has achieved a 13.87% revenue growth over the last twelve months. Despite these positive results, the company’s stock price fell by 4.23%, indicating potential investor concerns or broader market influences. Key operational improvements included a rise in occupancy rates and average cabin revenue. The company remains focused on achieving climate neutrality by 2028.

Key Takeaways

• Revenue grew by 23% year-on-year, with EBITDA reaching 79 million.
• Stock price decreased by 4.23% despite positive earnings results.
• Strong market performance in Germany, Austria, and Switzerland.
• Operational improvements include increased occupancy and reduced CO2 emissions.
• Targeting climate neutrality by 2028 through biogas blending.

Company Performance

Havila Kystruten AS demonstrated robust performance in Q2 2025, with significant revenue growth and an improved EBITDA margin of 19%. The company has successfully increased occupancy rates from 69% to 74% and achieved a 20% rise in average cabin revenue. This performance aligns with the broader industry trend of recovery and growth, particularly in the European market.

Financial Highlights

• Revenue: Increased by 23% year-on-year.
• EBITDA: Reached 79 million, with a margin of 19%.
• Occupancy: Improved from 69% to 74%.
• Average cabin revenue: Grew by 20%.

Market Reaction

Despite strong financial results, Havila Kystruten’s stock price fell by 4.23%, closing at 29.39 USD. This decline contrasts with the company’s positive operational metrics and may reflect broader market trends or specific investor concerns. InvestingPro analysis suggests the stock is currently trading slightly above its Fair Value, with a price-to-book ratio of 0.98. The stock has shown strong momentum over the last three months, though it remains within its 52-week range between 24.96 USD and 32.89 USD. Discover 8 more exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.

Outlook & Guidance

Havila Kystruten aims to achieve an EBITDA of 600 million in 2026, with further improvements projected in subsequent years. InvestingPro data reveals the company’s current EBITDA stands at 1.34 billion USD, with an overall Financial Health Score of 2.52 (rated as "GOOD"). The company is exploring multiple refinancing options and continues to focus on margin improvement strategies, particularly important given its current debt-to-equity ratio of 1.25. The ambitious goal of climate neutrality by 2028 remains a key strategic priority. Access the complete Pro Research Report for deep-dive analysis and expert insights on Havila Kystruten’s financial outlook.

Executive Commentary

CEO Bent Martini emphasized the positive development into the second quarter, highlighting operational successes. CFO Alexander Stahl noted the shift of working capital into negative territory as beneficial for the company. Stahl also reiterated the company’s commitment to climate neutrality by 2028.

Risks and Challenges

• Achieving climate neutrality by 2028 may present operational and financial challenges.
• The negative market reaction could indicate underlying investor concerns.
• Currency fluctuations and accounting challenges could impact financial performance.
• Maintaining growth in emerging markets like the US and Asia requires strategic focus.

Q&A

During the earnings call, analysts inquired about the company’s pricing strategy and demand elasticity, which were addressed in detail. CFO Alexander Stahl provided insights into currency accounting challenges and potential refinancing approaches. The implementation of biogas as part of the climate strategy was also discussed.

Full transcript - Havila Kystruten AS (HKY) Q2 2025:

Ingmar, Call Moderator: Call of the Havilah Kustruten IS following the publication of the q two financial figures of 2025. We are delighted to welcome the CEO, Bent Martini, and the CFO, Alexander Rene Stahl, who will speak in a moment and guide us through the presentation and the results. After the presentation, we will move on to a q and a session in which you will be allowed to ask your questions via audio line or the chat box. We are looking forward to the results. And having said this, Ben, please, the stage is yours.

Bent Martini, CEO, Havilah: Thank you very much, Simal, and welcome to this second quarter presentation from. We are quite delighted to continue to show you that we are continuing the positive development into second quarter and have a very positive kind of views also in the forward months to come. Next, please, Ingrid. Yeah. Just some pictures here to show that we have been quite successful in presenting this company and the the product to the market, achieving recognitions throughout the world.

Our customers are extremely satisfied, and that is, of course, something we are very proud of. Next, please. And then we’ll take a general update from the company, and then Alexander will go more in detail on the financial highlights. Next, please. Yeah.

For the newcomers in this session, we are sailing on the historical route between Bergen and Kkenaz. We have a concession with the Norwegian government operating four out of 11 vessels on this route. We have been operated now for the second year with full operations, and we are now also waiting for the government to come out with the next tender for the concession for 2,030 to 2,040. So that’s quite something we are looking forward to see, and we are very focused on continuing the positive development on this route. Next, please.

For the second quarter, we have a 100% operational uptime, a very positive uptime throughout the year, and the vessels are, technically wise, very fit for these operations, and the organization is has kind of grown into operating the modern fleets, the crew on board, and the support organization assured. So we are very happy that we are able to deliver a 100% operational uptime. Next, please. Some business highlights. We have been able to grow the revenues 23% year on year, driven by 20% increase in average cabin revenues and also increase in occupancy for the second quarter compared to last year.

And we are growing the EBITDA, the margins day by day, month by month, and have a very positive development into the second quarter. And as you might know, the third quarter is the best quarter in this operation. We are continuing developing the product on board sales activities, etcetera, and working with optimizing that the pro the products, creating more margins. It’s stable now, and we are putting more efforts into more activities, growing the day by day onboard sales. Also, on the cost side, we are quite stable.

The the cost is more varying with the the occupancy, and cost of goods are kind of the majority cost. LNG is stable. We are focusing on reducing energy and have been very successful in the second quarter reducing energy, also delivering 38% reduction in c o two compared to the 2017 kind of figures, which is requirement from the Norwegian government is to reduce 25%, and we are exceeding that a lot. That’s our focus to to really be good in reducing energy and, of course, reducing reducing emissions to air. Also, I’m continuing the focus on reducing food waste.

Second quarter, 57 grams per guest, which is extremely good. Our customers are extremely positive and satisfied with the product, and we are in average for the four vessels exceeding 70% 70 on the NPS Net Promoter Score, and that is extremely good in this segment. Next, please. Also, continuing the focus on selling through our own channels. I think we have now really found the balance between agents through operators and agents and selling through our own web page, direct sales, reducing our cost of commissions, creating the margins ourself, and that is, of course, something we will continue continue focus focusing on.

We have implemented now the a new CRM system, which is helping us to giving giving a much better support in the sales process towards the customers. So that is something that is day by day improving also the sales. The summer campaigns, which have been launched, where we introduced short watches, has been a great success in q two and also now in q three. So giving the customers much more flexibility, also attracting kind of a much broader audience or customers into this segment. Next, please.

On the booking side, we the the DAX, the the German market, Austria and Switzerland is a very strong market for us. We do see that we are attracting and growing in the The US market. And Australia, New Zealand, we also grow now in the Asian market and having a very, very positive development when you look at the segments or the different customers that we are focusing on attracting is a more younger audience. And we are have been able to to reduce the average kind of age of travelers with the activities we are presenting and also the focus on sustainable operations are attracting maybe a different customers than in ordinary industry to look at over time. So the balance is now very good for us, and the the mix of channels of sales is is very good.

Next, please. 90% of the targeted sales have been sold already. We are having occupancy now in average of 67% for the year. Very strong third quarter, and we are focusing on the fourth quarter. We have had a high focus on balancing the northbound and the southbound voyage.

Last year, it was a 10% on balance. And this year, it’s a balance which enable us to create much more revenues from each guest, each traveler. And the majority of our bookings now are FIT free independent travelers, which normally contributes with higher margins. And, of course, also the risk of cancellations in the in the group, the rest of reservations that normally are in this segment, having FIT bookings, then you reduce those risks. And we have also changed kind of the contracts with the agents and their operators.

So now the kind of all the bookings for the year is fixed. There are no risk for cancellation throughout this year. So the year is looking we are quite optimistic for the for the year end results. Next, please.

Alexander Rene Stahl, CFO, Havilah: Alexander, then Thank Thank you, Ben. Yeah. Next slide, Okay. A couple of words on on the operational performance. So you what you can see is the seasonality in our earnings and our EBITDA generation.

We are now going into high season. So second quarter is usually our our second best quarter in in kind of a cyclical perspective. We grew by more than more than 22% on the operational revenues. The contractual revenues are are somewhat lower and and kind of the that’s based on on indexation of of the contract, which is based on, you know, set of cost components. And the rise in q one twenty five is is related to an accounting effect from another auction year that we have.

So just to explain the difference in Q4 twenty twenty four and to now Q2 twenty five. And the the rise in margin is driven by price growth, but also by by occupancy growth. The second quarter was more than five percentage points better than the same period last year. Total EBITDA for the quarter ended at 79,000,000, and we have a margin EBITDA margin of of 19%, which is also better than what we had in the second quarter last year. Next slide, please.

So on the key performance indicators, so what you can see on the occupancy throughout the different quarters, 74% up from 69% same period last year. Cap in fact, there is trending upwards. You know, it’s ticking up quarter by quarter, which is very positive. It means that we have more passengers aboard ship, and we can we can sell onboard projects, excursions, other products, etcetera, to all of these guests that are are are traveling with us. So the rise in the cabin factor is is a positive for the especially for the onboard sales.

Average cabin revenue has grown rapidly from kind of a low base, and we have touched upon kind of the the background for that increase earlier in earlier earnings calls. But I think that the company started off with a low pricing to to to fill the ships. And then combined with cancellation a lot of cancellations, that was where we kind of offered our our clients to to travel at a later point at the same price. That price effect has kinda leveled off during the year. So I think you if you look at the price increase in q one, we have close to close to 40% price increase.

Second quarter is leveling off a little bit with with 20% increase in in the ACR. But we still see that for the year, we are kind of in that range of 20 plus ACR growth compared to last year. And then it’s that’s kind of driving the the increase in in margins. On the operating or the onboard sales per passenger night, q two, we we still haven’t seen the full effect for kind of the initiatives that we have implemented this year. It’s taking taking some somewhat more time to implement these these initiatives.

But we we are seeing now that for the latest summer season, onboard sales are picking up for guests. So that that’s a positive sign. And I think one of the key focus areas for the company, you know, to throughout third and fourth quarter and into ’26 is to drive that product development on board and and increase onboard sales. Next slide, please. A couple of words on the on the costs.

Costs have stabilized. We had some of the same costs in q two twenty five compared to q one twenty five at a higher a much higher occupancy. So that’s positive. If you look at the composition of the costs, crew, which is variable with with occupancy, is there is a large cost. And LNG and and the OpEx for the vessel and the hotel is kind of the second and third biggest cost elements.

Next slide, please. Looking at each cost category. So on the left hand side, you have the most variable cost components, which is the cost of goods sold directly related to how many passengers we we have on board and how much they are spending when they are on board. Payroll crew is also I mean, we have a minimum money that we have to adhere to, but the the the crewing is also related to the occupancy of the ship. And I think it is quite good that we have been able to to manage the crew costs compared to kind of the increases we saw last year.

I think we’ve had a lot of training of personnel, which have been leveling off somewhat. OpEx vessel is more stable. It’s more related to ongoing operation of the ship. We have a large component in the OpEx vessel, which is related to our powered by the hour agreement with Kongsberg. Port cost is a large component of the OpEx.

Then that kind of follows cost inflation. For the LNG, the LNG cost is directly linked to the LNG market price. As we announced in August, we renegotiated the LNG purchase contract in in August, where we kind of opened up for the ability to acquire one third of the volume through a second supplier in the North. And based on the the pricing formula and and the forward pricing that is at present, we see that this would lead to a 10% savings on the LNG on an annual basis. So we expect that to take effect from from the fourth quarter this year.

Admin payroll is also a fixed more fixed cost related to to cost inflation, but they could there are some swings from time to time, especially q four last year where we have extra initiatives on on the marketing side. So on the right hand side, you can see the kind of breakdown and chart occupancy compared to costs. So so we’re kind of following the line. Q two twenty five was on the line, and it kinda shows the sensitivity on occupancy and and operating costs. Next slide, please.

So on the outlook, we maintain a target EBITDA of 400,000,000 in 2025. We have a large focus on margin improvement for the year. I mean, that’s been been the main target to improve our margins. We have an occupancy target of of 75%. We still have some volume to sell to reach that target, you know, that show the occupancy for the year, which is at 67%.

But what we see is that the the the kind of behavior of our our customers have is changing a bit, especially with the increased offering of shorter voyages. So we see we see that the customers book their trips closer to the partner than than before. So we’re still optimistic on on on getting there on on the the occupancy for the year. ACR is still maintaining that plus 20% increase in ACR, which means that the overall margin will also improve substantially from from last year. 2026, still, you know, focused on improving that margin.

What we see on on the on the bookings that we have for next year is that we are more than 10% above the same time last year on the average cabin revenue. So we are within that 10 to 50% range in in pricing. We are working on on the occupancy and on the marketing campaigns for next year to reach a higher occupancy than than this year. And we have kind of an increased focus on developing additional revenue streams. What we see is that we we’ve kind of started to try a little or a lot on the on the additional revenue streams.

And we have started bundling trips where we offer, you know, a flight and a stay combined with with the voyage, and we see that and then this was implemented the at first last year. But what we see now is that the interest for this is taking off, and it it’s it’s it’s really a focus area for 2026 just to build on that that packaging. So I think that’s the with with those initiatives and and with that that price increase, we are looking for plus 600 on the EBITDA next year, and that we will, in the subsequent years, get into that range of of 6 to 800,000,000 in in EBITDA. And we see that the pricing is kind of a lot higher on on the short term voyages. So compared to, like, a half trip compared to a round trip, guests pay more per cabin per night, and they spend more while they are onboard.

So we we believe in that strategy. It’s just taking a little bit more time than than just filling the ships with with round trips. Next slide. Okay. A couple of word on on the financing side and and the refinancing process.

So we we signed an amendment agreement with the existing lender for our secured bond in in July. And what we did was extend maturity by by six months. So maturity is now in January 27. And we align the covenants of the agreements with kind of our operational operational ramp up phase, providing headroom in the covenants to our projections. And we reduced the interest rate for the first five months, where there’s a step up in in at the end of the year.

And again, you know, to achieve that, we we settled the core premium, the core protection of the loan, which means that the new principal amount is is $326,000,000, and this will be booked in the third quarter financials. But I think we we see this as a step in the refinancing process, so this is the first step. The next step is is to to find more firm footing, and and and we have engaged Arctic Securities to to drive that process, and we are working on a number of alternatives that on the on the financing side. Next slide, please. So on the with we get a lot of questions on the book equity and and and the negative results.

What we see is that our book equity is is it’s impacted by currency. So in the second quarter, we had 150,000,000 negative result from from changes in the euro lock exchange rate. And it’s unrealized losses. So what we see, a large part of the negative equity is related to currency. So if you look at the value adjusted balance sheet where you have kind of debt in euro and you take your the ships in euro at the quoted broker value, we had an average value or or a cumulative value of all the four ships at 688,000,000 in in the second quarter, which means that the the value adjusted book equity is is more than 3,000,000,000 NOK.

So I think we we still feel comfortable that there’s substantial value in in the balance sheet. And for us, it’s now, you know, a matter of improving the operating model and and building the operating results to match that value underlying value. Next slide, please. Yeah. A couple of words on the share.

As as we have as I mentioned, you know, we see substantial asset backing from the four ships and the contract with with the Norwegian government. We will continue to deliver on on sustainability, and we have an ambition to to become climate neutral by 2028. We are now looking into first phases of of blending in in biogas to to reduce our emissions further and to prove to the government that it’s possible to to achieve, you know, pretty hairy climate goals today without any modifications to our ships. And we we think that there’s kind of a good potential for us to grow on the coastal route with the forces we have who can comply with any stricter environment regulations that that can that can be implemented in the future. What kind of the signals we get is that the coastal route is a very important part of Norway’s environmental efforts, and and it’s kind of one of the top 10 areas where the government can really cut emissions that that will impact the CO2 balance of of the country.

A word on the share split that was that was and then then the reverse share split that was announced at the AGM. We have been working through the summer on practicalities, and we have the some obstacles with with the Norwegian holiday. And what we see is that because of the technicalities, we will need to do an DGM to to ratify all the details of of the reverse split. So we will get back to that. Hopefully, we can execute it in September.

And that would mean that one share 50 shares today will be become one share after the split. Next slide, please. Yeah. I I think the key performance indicators we’ve been through is more for for reading. The presentation has been published on the stock exchange, and and I think it’s more for analysts and and and shareholders to to have a track record of of our KPIs.

And just to to for everyone’s recollection, you know, the the KPIs are sourced from the company’s booking system, so there are discrepancies between the the figures the KPIs and the accounting figures because of some prioritization and and some some some currency effects. But it it shows kind of a a good picture of the operational performance of of the company. I think that concludes it in mind. So we we are open open for questions.

Ingmar, Call Moderator: Yes. Thank you very much for the presentation, and we now move on to the q and a session. For a dynamic conversation, we kindly ask you to ask your question in person via the audio line. To do so, click on the raise your hand button. And if you have dialed in by phone, please use the key combination star nine followed by star six.

And if you have not the opportunity to speak freely, you can use our chat box. We have already received a question. Mr. Kuse, you should be able to speak now.

Tim Kuse, Analyst: Yes. Good morning. Thanks, gentlemen. Thanks for taking my question. I have a few, actually.

I would start with sort of the, yeah, the the relation of occupancy and pricing. I would gather that overall compared to maybe what you projected last year occupancy is the KPI, which is maybe still lagging a bit behind your initial thoughts. What is your thought on sort of the pricing effect on demand and if you maybe overstep at the one or the other end or yeah. What what are your thoughts there? That would be really interesting.

Alexander Rene Stahl, CFO, Havilah: Yeah. So you can fill in, but if you have others. But I I think the a lot of the price increase is is kind of coming off a very low base. So so if we compare ourselves with with our competitor, we are not expensive at all. So and some of it is coming from from Gandhi’s cancel trips that were rebooked at at variable prices, but it’s you know, I I think we we see with the 10% increase that we have for next year that we were kind of reaching a level now that where where we see, you know, additional price increases over and above that.

It can be achieved by mix, you know, by improving the the mix of voyages, as I mentioned in in the presentation, we have a lot higher average cabin revenue for shorter trips and for half trips than round trips. So I think the way we will seek to grow pricing is further and and to grow the yield on the existing cabins is to develop shorter trips and and package that in a way that we can extract more value from from the cabins. So we we we are touching kind of a on an absolute pricing level. I think we we are kind of touch and go where we can where we can put it.

Tim Kuse, Analyst: Okay. Yeah. I saw that in the report, you mentioned that the shorter trip revenue was up 40%. I think that’s very encouraging. Could you maybe quantify what what more or substantially higher price for the shorter trips means?

Is that, like, 10 or 15 or 20% sort of on a like for like basis or more?

Alexander Rene Stahl, CFO, Havilah: I think yeah. I don’t have the number in my hand now, Tim, but it’s it’s around 20%, I think, for half trip compared to round trip.

Tim Kuse, Analyst: Okay.

Alexander Rene Stahl, CFO, Havilah: At least I think. At least. Yeah. I mean, it’s it’s a difference between northbound and southbound. So kind of the north half trip northbound is by far the best pricing.

Tim Kuse, Analyst: Okay. Yeah. Understood. Ben, maybe you could comment on sort of the relation. You mentioned that you have three individual travelers.

That’s the sort of strongest growing group. On the other hand, agency, the share of agencies was higher in q two. Is that like the normal seasonality, or does that not relate to each other? That means that three individual travelers could also book by an agency.

Alexander Rene Stahl, CFO, Havilah: Absolutely. Yeah.

Tim Kuse, Analyst: Okay. Yeah.

Bent Martini, CEO, Havilah: Yeah. So the the travel agents also provide it’s a conversion. They are selling FITs also. So it’s a so so the balance is as we see on the development, this is very positive. And the good thing is that, like, the travel agent agents and and tour operators, they are kind of those that are filling out the books quite ahead.

Like, for 2026, we already have about 30% of all capacities booked. And, of course, having good partners in agents and their operators, that is kind of very positive for the company.

Tim Kuse, Analyst: Excellent. Mhmm. Alexander, maybe two quick questions on the cost. Bunker costs were lower than q one. Was that the normal seasonality or also some, yeah, other effect?

You mentioned that the new contract will kick in in q four. So that’s nothing we can see here. And then maybe personal cost also was lower than in q one. Maybe you could just comment, is this a level we can expect going forward, or did you move some costs from so the personal cost to variable cost maybe, which was then in cost of materials to maybe external sailors? Yeah.

That would be interesting. Thanks.

Alexander Rene Stahl, CFO, Havilah: Yes. So so on the on the LNG cost, the spot LNG price was higher in in the first quarter than the second quarter. So it’s more of a market pricing. So we see that the market price or the TTF pricing for for L and D has come down quite a bit. It’s last time I checked, it’s it’s around 32, which is a lot lower than what it was in in in the first quarter.

So we can kind of expect that in the third as well. And then as we say from the fourth quarter, the the new arrangement kicks in, and we do expect to extract that that savings from from the fourth quarter onwards. On the personnel, I I presume you mean, you know, crewing. I think part

Tim Kuse, Analyst: of

Alexander Rene Stahl, CFO, Havilah: the crewing costs in the first quarter is gonna is also related to end of the year where some of the, like, you know, the very highly booked trips in late December is is kind of flowing into into the first quarter because some of the trips, you know, they start at the end of the year, and then they they end in the beginning of the first year. But we do see that we have better control on on the grading costs and on the amounting compared to occupancies. We are working hard to kinda optimize the amounting in accordance with with the occupancy.

Tim Kuse, Analyst: Okay. Perfect. Then maybe last question on on the cash flow, which was positive in in q two. Two questions there. Can you remind me, like, on the cash flow profile over the year?

And secondly, I remember that at least last year, you still had some issues with credit card issuers that the prepayments would didn’t really flow through to you due to you being, like, a start up in the due to the the, yeah, the young company age. Can you maybe comment on that and how that’s developed? And and yeah. That would be great. Thanks.

Alexander Rene Stahl, CFO, Havilah: Yes. So in terms of prepayments, you know, the level is usually at its highest at, you know, mid year, like, beginning in July, and then it’s at the low point at the end of the year. In the first half of the year, we managed to to release probably half of the withheld prepayments. So the payment provider, you know, originally had back almost everything, and then they reduced it to to 60. And then we have worked with the payment provider as our results have have improved.

So part of the improvement in working capital in in the first half is also related to release of these prepayments. And there’s still some some prepares being held back, approximately, you know, three three million euro, and we are working to get that released also now in in in the second half. So but this is that that’s kind of a positive on on the working capital.

Tim Kuse, Analyst: Okay. Thank you, guys. All the all

Alexander Rene Stahl, CFO, Havilah: the It means that it means that we will our working capital is moving into the negative territory, which is, in our case, good because we we we do sell far ahead. And we we would like all that prepayment to be paid to us and not held by a third party.

Tim Kuse, Analyst: Excellent. Thank you.

Ingmar, Call Moderator: Thank you very much. And we move on to a question from the chat box. First of all, the participant thanks you for the great presentation and is curious about how you can say anything about the performance compared to competitors. For example, how you can communicate the obvious advantages versus with existing and potential customers?

Bent Martini, CEO, Havilah: That was a tricky tricky question. I I think what we see is that both and us have a very positive development on the occupancy and and the number of guests choosing to to travel the coastal route. So so in in general, we are that’s that’s a very positive that both companies actually are having success. And, of course, the we we are trying to kind of do something different than our competitor, and now they are trying to do something different than us. So so that’s for us, it’s we are very focused on kind of giving the customers the flexibility to choose, like, shorter voyages and have a have a lot of focus on creating those opportunities.

And now we see that it’s giving us a very good development now in bookings. The those traveling on shorter voyages are also willing to pay a bit more, so that’s also helping us. And, of course, the flexibility of kind of doing this is also basis that we have four sister vessels that they are similar. And the pricing model we have on the bookings for following up the bookings, etcetera, enable us to to to manage kind of the whole year and the the continuing kind of filling up the vessels even though we are having shorter voyages. So so I think that’s a big difference between the companies today.

Ingmar, Call Moderator: Well, thank you very much. And there is a question from the same participant, if it would be possible to talk and clarify a bit more on the currency challenges, which had a big effect on Q1 and Q1 results, How to cope with such going forward?

Alexander Rene Stahl, CFO, Havilah: Yeah. So I think the the the challenge is that we have an account. We have accounts in Norwegian kroner, which is kind of related to our Norwegian setup and and the fact that we do operate on on the coastal route. And then but then we have assets which are priced, you know, balance sheet wise, are priced in in euro. But in our books, they are are booked in Norwegian kroner.

And, you know, since the assets or the ships, they are built kind of in a European context, they are priced in a kind of a secondhand market priced in euro. And we have probably in in last year, we have close to 400,000,000 in euro revenue equivalent revenues, which is which is covering currently interest expense. So so for us to borrow in euro is is the natural thing because you have a hedge on the on the debt service, and then you have balance sheet protection because the second time value is in Europe. But at at the same time, you know, we are operating in in Norway. We have revenues in all of the region from the Norwegian government in Kroner and from from a number of guests in kroner, which are matching with with the Norwegian cost.

So I think they it’s it’s noise. So over time, it should level out, but it’s noise, and it makes it difficult to read the bottom line. So so we have discussed a number of times, you know, to do as our our competitor have accounts in Europe. So that is certainly something we are looking at to to avoid having these large unrealized currency swings from from month to month or from quarter to quarter.

Ingmar, Call Moderator: Well, thank you. And we get back to Mr. Kuse, who has another question. You are able to speak now.

Tim Kuse, Analyst: Yes. Thanks. Sorry for for bothering you even more. But but I have I do have two questions or maybe the or three actually on the reporting. Is this something you’re looking into for 2026, Alexander, the euro switch?

Or is there any sort of regulatory topic, or is it just more an internal readiness that that that’s sort of the factor for that?

Alexander Rene Stahl, CFO, Havilah: I it’s kinda it’s the internal readiness. It it’s regulatory as well. You know, you know, we need to to apply for it. But it’s been it’s been under discussion for for some time, and it’s something we are evaluating on yeah. Yeah.

I I don’t have a timeline for it at this point in time.

Tim Kuse, Analyst: Okay. Then maybe also on the refinancing. Just a quick question there. Is it maybe you could just I don’t know. This is a moving target in the process, but sort of your tendencies, is it still mainly your thoughts on refinancing or how how are the chances or your thoughts on maybe sell a leaseback kind of options or or a mixture?

That would be interesting. And then the final question, you mentioned that you will be blending in biogas to further improve your your c o two profile. Is that on your account, or is this together with sort of a subsidy from or or yeah. Payments from from the government from that.

Alexander Rene Stahl, CFO, Havilah: Yeah. I can address your first question on the refinancing, and I’ll leave what we have to do then. So so we are I mean, we are with the amendment. We are positioned to to do a refinancing now. If the conditions are right, then our adviser is working on, you know, a number of alternatives.

They are are pursuing, you know, private placement or

Ingmar, Call Moderator: So we just lost the connection connection to Ben and Alexander, and I’ll wait a few seconds till they reconnect. I just stay online. Hopefully, they will be back with us in a few seconds. Well, there seems to be a problem with Ben and Alexander reconnecting. I’ll wait a few more seconds.

But I can tell, in the meantime, there have been no further questions. And unless Ben and Alexander get back to us, I would rather say that we come to the end of today’s earnings call. Thank you everyone for joining and your shown interest in Havilah. Should further questions arise at a later time ah, well, there is the reconnecting to Bend and Alexander. So, well, we move back to those, and if you unmute yourself, we can get back to you.

Maybe I just try to give you the opportunities to speak. Yes. That should work out. Yes. Now we can we can hear you and get back to you.

I’ll come back.

Bent Martini, CEO, Havilah: Sorry. The the power went up. Okay.

Alexander Rene Stahl, CFO, Havilah: Tim, are you still there?

Tim Kuse, Analyst: Yes. Yes. Thanks. So I think you mentioned that you are, yeah, that you’re working on all kinds of scenarios with Arctic.

Alexander Rene Stahl, CFO, Havilah: Yes. So we are working on on private placement, like private debt solutions. We have set up a syndicate for public bond. The public bond market is probably as good as it has been in a long time. So I think the the window for the public bond market is is certainly attractive for us.

So for us, it’s a balance of, you know, market conditions compared to our operating results and our ability to to get the acceptance for for kind of the ramp up phase of of the company. But we are we are also looking into leasing solutions, you know, leasing in in in a European context, and and also leasing from from other other places. So so we we are pursuing kind of a number of of options, and and we may do this in a two step approach, or we can or, you know, if the terms are alright, we’ll we we can do it more long term, but it’s it’s kind of dependent on on the market conditions also available and then also the progress of of of our ramp up. But we are positioned to do it now with the amendment, and we have more time, and and we are less, you know, stressed on on on time and and and covenants that than what we were.

Tim Kuse, Analyst: Okay. And then maybe just on that, is that the the the principal of the big loan you are looking to refinance or also part of the the shareholder loans?

Alexander Rene Stahl, CFO, Havilah: It’s primarily the the the secured bond. But depending on on the transaction, we may also kind of address the the shareholder loan as well.

Tim Kuse, Analyst: Okay. That’s good.

Alexander Rene Stahl, CFO, Havilah: Okay. That that on the biogas?

Bent Martini, CEO, Havilah: Yeah. As a company, we we do have ambitions to start blending in biogas already next year. The ambition is to be a 100% climb on your true in the 2028. We have dialogue with with the potential delivery of biogas along the Norwegian coast, and that is looking quite positive. We are, of course, in dialogue with the Norwegian government for doing this.

And, of course, they also are very focused on reducing their total c o two emissions. And we, as a company, could actually enable them to, yeah, at least deliver on the targets in this concession if you look at the 11 vessels. Today, there are we are the only one delivering on on the 25% reduction. We can actually reduce the the CO2 emission and and and help the government to to deliver on their targets. So so that’s kind of the the discussions we have, and it’s a very positive discussion with the Norwegian government.

Tim Kuse, Analyst: Okay. Understood. So you would be compensating for your competitor on the route in in in a way if you over over deliver on your yeah. Okay. Understood.

Well, thanks a lot, guys, and and all the best for for the upcoming projects. Thanks.

Ingmar, Call Moderator: Well, thank you for your question. And as I said to the participants and now to you guys as you are back, in the meantime, we have received no further questions. And therefore, we come to the end of today’s earnings call. Thank you very much for joining and showing your interest in Havilah. Should further questions arise at a later time, please feel free to contact investor relations.

Thank you, Bent and Alexander, for your presentation and the time you took to answer the question. I wish you all a lovely weekend. And with this, I hand over to Bent and Alexander for some final remarks.

Bent Martini, CEO, Havilah: Thanks a lot, Ingmar, and thanks a lot, everyone, for participating and listening in. And looking very much for present presenting the results in the third quarter for

Ingmar, Call Moderator: you guys. Thank you. Thank you.

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