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DFDS AS
Earnings Call Analysis
Q3-2024 Analysis
DFDS AS
DFDS faced a challenging quarter in Q3 2024, as indicated by CEO Torben Carlsen. The company had anticipated difficulties, primarily driven by intense competition and shifting market dynamics. Nevertheless, they managed to achieve a 4% increase in organic revenue—7% from Logistics and 2% from Ferry operations—reaffirming their strength in customer focus and operational resilience.
Despite the 4% revenue growth, DFDS experienced an 11% drop in EBIT compared to the same quarter last year. This disparity was largely due to the pressure on margins, particularly in their Logistics segment, which faced significant challenges from external factors including competition and overcapacity in European markets. The Ferry segment held steady with only a slight decrease, even showcasing growth in passenger numbers on certain routes, notably in the Channel.
For Q3 2024, DFDS reported a revenue of DKK 8 billion, with an EBITDA of DKK 1.5 billion, marking a 3% decrease. It's noteworthy that adjusted free cash flow guidance has been revised downward to DKK 1.2 billion for the year. The rise in financing costs and a slight increase in leverage due to reduced EBITDA also impacted their financial positioning.
The Logistics segment's decrease in performance is alarming, as it constitutes about 30% of the company's revenue and is significantly impacted by market conditions, particularly in the Brexit and Nordic regions. However, 70% of their logistics operations maintain a stable EBIT margin of around 4%. On the Ferry side, favorable trends are observed in the Mediterranean and Strait of Gibraltar, which is expected to grow despite competitive pressures.
DFDS is adapting its strategy in response to the intensified competition, especially in the Turkish market, where new entrants have altered the landscape. The company plans to fortify customer relationships and strategic price adjustments amid a challenging environment, although there are indications that previously anticipated price increases might not materialize. Management emphasizes maintaining operational adjustments to stay competitive.
Looking ahead, DFDS has adjusted its EBIT guidance to a range of DKK 1.5 billion to DKK 1.7 billion, down from a previous estimate of DKK 1.7 billion to DKK 2.1 billion. They are also cautious about the European economic recovery, particularly sensitive to the performance in the automotive sector. The focus remains on achieving organic growth, turning around logistics earnings, and optimizing operational costs.
The recent termination of the Ekol acquisition has added uncertainty to the Mediterranean routes, which could potentially impact around 13% of DFDS's total volumes. Management insists they do not foresee a total loss of volumes, given their strong customer base and ongoing operational engagements.
To mitigate the financial strain, DFDS has reduced its CapEx outlook for 2024 by DKK 350 million, tightening their investment strategies. The management indicated a more conservative approach moving forward while still emphasizing the importance of investments in key growth areas. Their green transition goals remain intact, targeting a 45% reduction in emissions by 2030.
In conclusion, DFDS is at a crossroads, facing both challenges and opportunities. While the recent performance raises concerns, particularly in the Logistics segment, their strategic focus on customer relationships, market adaptation, and prudent cost management underscores a commitment to long-term growth and stability. Investors should monitor the company’s ability to navigate these turbulent waters while capitalizing on growth potentials in key markets.
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Ladies and gentlemen, welcome to the Q3 Report 2024 Conference Call. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Torben Carlsen, CEO. Please go ahead.
Thank you, and good morning, and welcome to DFDS' Q3 2024 Conference Call. I am joined here by Karen Boesen, our CFO; and Søren Brøndholt, our Head of Investor Relations. This morning, we released our Q3 numbers and last Friday, November 1, we lowered our 2024 outlook for EBIT and the adjusted free cash flow. The outlook change was partly driven by our financial performance and partly by the termination of the Ekol acquisition, which we also announced last Friday. The termination of the agreement is, of course, unfortunate, but we believe the right decision under the circumstances.
As many of you know, Ekol Logistics is a large and valued customer in our Mediterranean route network. Given our customer relationship and an ongoing dialogue about the future post determination, I cannot, at this stage, provide additional information about the situation. But we have a very strong Mediterranean ferry products, and we continue to see Turkey as a compelling growth market.
In the coming weeks, we'll continue the dialogue with the Ekol Logistics about the future relationship, both as a supplier and as a customer that the owners terminal in [indiscernible]. So let's now turn to our Q3 performance and the outlook for the rest of the year. If we turn to Page 3, we will, as usual, start with a reminder of our moving together towards 2030 overall elements to reach the strategy. It's about unlocking network value, it's about the green transition and it's about financial ambitions when it comes to adjusted free cash flow and ROIC and leverage in particular.
Obviously, as you can see on Page 4, the trend line for some of these financial ambitions are not getting in the right direction. Our ROIC is at 6% last 12 months. Our CapEx is reduced as we are tighter on our investments. And unfortunately, we also had to lower the adjusted free cash flow to DKK 1.2 billion expected for this year on the back of the reduced EBIT and leverage remains above 3 as EBITDA is slightly down.
Moving to Page 5 with a headline of working through market and operational headwinds. Q3 was a challenging quarter. We also expected that, but we had expected that during the quarter, we would start to see a rebound, which did not come. We have achieved organic revenue growth, particularly driven by Logistics and, of course, fully in line with our strategic focus. The growth is possible through our customer focus and our strong network.
Despite the growth, as mentioned, the financial performance was down, and this is due to the intensified price and margin pressures that we do experience in several markets. It's a pleasure to report that the first high season for our acquisition in the Strait of Gibraltar was performing -- was showing a great performance, in line with our expectations, and we continue to see relatively strong performance also in October.
The rebound did not happen in Q3, and we can now see that also Q4, we have a slowdown in the European economy. We are particularly sensitive to the automotive sector, where things are tough. We also see that the continued terrible war in Ukraine is putting damper of growth in the Baltic and it's also spreading a little bit to Eastern Europe with -- then with the trade between Baltic Eastern Europe and Sweden is a tough situation.
On the full load, this is primarily in the continent. We see continued lower capacity and therefore, also a very difficult environment to get the price increases that are necessary to cover the inflationary pressures that we experienced. And then -- when we look to the outlook, the Q3 results were below expectations. Obviously, Q4 is actually what drives the outlook change. And we have now lowered it to DKK 1.5 billion to DKK 1.7 billion from before DKK 1.7 billion to DKK 2.1 billion.
And as I mentioned, the outlook -- the cash flow reduced the same size. As we move forward, continues to be a strong organic growth focus. We have seen that from 11 Ferry operation on the [indiscernible], we are now down to 8 ferries. P&O have reduced 2. Irish ferries have reduced 1 ferry. And whether this is a permanent adjustment remains to be seen, but it means that we are in a stronger position when it comes to rate negotiations for '25.
We've seen a competitor entering the Turkish market. The existing landscape was that there were 2 Ro-Ro operators. Now there are 3 and that approximately half of the cargo moves by road and half by ferry. So that's, of course, a challenging situation. Compared to the overcapacity that we've seen in the Channel, it's 2 different markets. The Channel has been a market that has been reducing over the many years in the past, whereas Turkey is a growth market. And therefore, we also think that it is easier to handle new capacity. We completed the sale of the -- or the previously announced sale of the Oslo route. And as mentioned, we terminated the agreement with Ekol.
If we move to Page 6, we have an attempt of giving an overview of our Ferry network. And if we look at of our transport network, if we look at the, first, the Ferry network, we'll try to use some coloring here where the dark blue is a market that is a growth market. The light blue are more low growth, and then the gray is decreasing. And if we start with the market developments that we see throughout the system, then the North Sea is a relatively flat, but stable low-growth market. Mediterranean, a growth market, and we saw the numbers we released this morning on volume that despite the new competition, we still have growth in our system in October compared to last year.
Channel is a flat market last 12 months, I believe, down 0.2%. And Baltic Sea, of course, after a major revaluation of the market size, now also flattish to low growth. Strait of Gibraltar, a strong growth market. On the Passenger side, we see that the Channel continues to see a strong rebound from COVID, whereas the Baltic Sea is a decreasing passenger market on the back of less migrant workers, less activity levels. And Strait of Gibraltar, strong growth market.
In terms of the Logistics arena, we have split, for this purpose, the revenue in 2 buckets. One bucket, 70% of our revenue where we have reported a 4% EBIT margin, up 0.1% actually from last year, where we see good growth in the freight and where we are also then able to retain our margins. And then we see the challenge logistics areas is approximately 30% of our revenue where we see overcapacity and where we are in markets with low growth or no growth. So this is just to give a picture of our markets as we see them and as how we deal with the different parameters in the markets.
There are some comments here about the different elements in the market you can study those afterwards. Then if we turn to Page 7, just a reminder of who we are and why we have the Logistics and Ferry network the way we have it. It's network strength, it's customer focus that characterizes us. The unique combination of ferry, road, rail in the corridors and regions combined with logistics solutions provide a very strong offering to our customers. We have strong people. Our operational skills and resilience mean that customers get reliability, frequency, efficiency from DFDS.
We've talked now about new competitive situation in the Med. We talk a little bit about how the situation in the Channel is developing. And those of you who have been investors for many years have seen other situations like this, where we have a very good and strong track record of overcoming periods with intensified competition. So with those few words, then I will hand over to Karen for a more detailed walk-through of the numbers on Page 8.
Thank you, Torben, and good morning, everyone. As Torben said, challenging quarter. New was going to be challenging, but still challenging also in terms of the outcome. Overall, we do see a good revenue increase, which we are happy with. Overall across the group, a 4% increase in our organic revenue. This is split with 7% coming from Logistics and 2% from our Ferry operations. So happy with that. Unfortunately, does not translate into the same growth of the EBIT. Our EBIT is down compared to same quarter last year with about 11%.
And if you see the EBIT down, you will also see that Ferry is only slightly down and has an okay-ish performance for the quarter, given also the external circumstances that Torben also alluded to, whereas our Logistics business is significantly down compared to same quarter last year. And this is due to both external factors, but also some internal factors that we will come back to later in the presentation.
Moving to the next slide. Just very high level on our income statement. You can study it in details later. Obviously, revenue up, DKK 8 billion revenue for the quarter. EBITDA of DKK 1.5 billion, down 3%. However, I would have to remind everyone that we did have DKK 135 million of one-offs in our 2023 results of Q3. So that means that there is a gap there to be closed. But obviously, we also have Strait of Gibraltar now included in 2024. So they more or less go out against each other. Ultimately, we are down on our EBIT, as mentioned, and also our financing cost is slightly up compared to previous quarter.
Moving on to zooming in a little bit more on our 4% organic growth coming mainly from Logistics with the 7% and from Passengers within Ferry, where we, in particular, on Channel saw a good quarter for Passengers and our Channel Ferry routes. The Freight Ferry increased, you see here. It's mainly driven by our arrangements. And then you see the larger revenue driven coming in from Strait of Gibraltar and a little bit from So overall, a healthy top line, but as said, not translating into the results that we would like to see.
Zooming in on Ferry. We have an overall variance of only DKK 23 million, so not significant. Again, slight down slightly and then we see the positive uptick from our Passengers. If we look at the overall meters, they are decent and stable to somewhat. Obviously, we have the situation in Mediterranean and Ferry where we have seen a competitor entering on our Istanbul-Trieste route that was also mentioned previously and that we do see impacting this quarter slightly and will also impact the Q4.
Strait of Gibraltar is not listed here separately, but we are content with the result and it's fully in line with expectations from the acquisition of the Strait of Gibraltar route. Then moving to Logistics, Slide 12. If we look at the overall results, it's, of course, absolutely not a satisfactory for us. And what we do and what you would see both in our report and obviously also speaking to in this presentation is we can isolate the problem areas really to 30% of our revenue, and we have isolated those very clearly where they are from, and we have focused plans to turn those around, whereas we have 70% of the business that runs with an EBIT margin of on average 4%.
So a lot of attention going into these areas. These are impacted a lot by external factors: the Brexit Phase 3; the U.K. food import, which is continuing to be lower; margin pressure due to competition and overcapacity in the continent of Europe; and then in particular, our own Nordic Cold Chain that is challenged due to also market situations and as a consequence of that overcapacity in our own infrastructure.
If we move on Cash flow. Cash Flow was also lowered as part of our guidance as a consequence of the lower earnings, which means that we are managing our CapEx. We have also lowered our CapEx slightly for the year, but not to an extent that we can maintain our 1.5. Adjusted free cash flow for the quarter is around DKK 400 million, also reflecting that this is a good quarter for us generally in terms of seasonality in our business, but not enough to keep it. And our leverage is up due to the lower EBITDA, so we are slightly up this quarter.
And moving on to moving to Green, I'll pass on back to Torben.
Thank you, Karen. On Page 15, headline progress on green and social targets. We continue to reduce our emission intensity from our Ferries, 1% [indiscernible] 2% across route network when including the vessels. We had applied for EU funding for an Ammonia Green Ro-Ro Corridor project. Unfortunately, the application was not approved. So at the moment, we are not moving forward with those ammonia vessels.
In terms of e-trucks, we now have 117 in operation. Latest was a launch in the U.K. with 10 e-trucks and exciting customers. We expect to increase a further 10, 15 this year. We are rolling out shore power in the terminals we call and on the ships that call those terminals, which is part of living up to the EU regulatory framework that comes into effect in '25 where you need to have 2% of your fuel from sustainable fuels and where the electricity from the shore power is included. And that's also why we are expanding the investments here.
In terms of women ratios, the non-office positions increased 2 percentage points on the back of our wave of talent programs in Turkey, Spain, Morocco, where we've been able to attract significant numbers of women for our ship personnel. Safety, we have significantly increased. The focus we now have much more transparency. We still need to get more results, but we are on the right track.
Moving then to Page 17. Total capital distribution of DKK 600 million this year. The share buyback is close to complete with 384 million bought so far out of a total of 431 million. Then moving to Page 18, the outlook. Karen has already talked about it, but we don't expect the growth rebound in Europe this quarter, which is partly driven this. We have an increased competition situation in Turkey.
The margin pressure on our full load businesses continue, whereas Passenger is still delivering positive impact. Moving to Page 9 [indiscernible] reputation that the EBIT range and cash flow outlook is lowered, slight difference in revenue now that we don't have equal the last quarter. But more importantly, of course, the EBIT outlook now DKK 1.5 billion to DKK 1.7 billion rather than DKK 1.7 billion to DKK 2.1 billion and adjusted free cash flow of DKK 1.2 billion.
Then moving to the last page before the Q&A. What are our priorities? It continues to be the organic growth focus, protecting our key Ferry market positions and continue adding enterprise accounts. These just EUR 10 million accounts that typically buy several products from us. Strong focus on the logistics earnings trends. We have 7 targeted turnaround projects that are securing the turnaround. We have a strong cost focus. It's clear that the inflationary pressure is tough on us in markets where we cannot get similar price increases.
So we are taking out costs in our different entities throughout the network. Then the green transition will continue to deliver on our targets. And in the Mediterranean, we will, of course, adapt to the new situation to secure the continued profitability of our business. With that, I will turn over to Q&A.
[Operator Instructions] Our first question comes from Ulrik Bak, SEB.
First question on the Mediterranean segment. So in light of this intensified competition and now also the uncertainty related to Ekol, has anything changed to the way you approach this segment? And also, if you can guide us a bit in terms of the price impact from the intensified competition would be great.
I'm not sure what you mean by changed approach. But of course, it's different to navigate in a market where you have more competitors than we've been used to. So we have moved closer to our customers, making sure that they have the conditions that they need to continue to use us. And one element there is, of course, the price, as you mentioned. I cannot give you a specific what it means, but it's clear that price increases that we had planned are not coming through. To the contrary, we are instead seeing reduced prices in this area, primarily hitting our Italy-Istanbul line.
Okay. Just in terms of your capacity, can you please just remind us, so how much capacity do you have? And is there any considerations in terms of reducing it, moving it? Are there any charters that you would consider to hand back? Any thoughts along those lines, please.
Yes. I think we have chartered out 1 vessel that was coming back to the system, and now we are not bringing it back. And we have started a route from the European site in Istanbul, which also takes capacity. We have started the route from Italy to Egypt last week or this week. And then there may be 1 more vessel that will come out of the system depending on what happens in the next month.
Okay. And just a follow-up question to this new Italy-Egypt route. So what kind of ramp-up period should we expect from this? And when do you expect it to be EBIT positive?
As always, with routes like this, where there is no route today, it will take some time. So you should expect that there's no positive EBIT in '25 from this route.
Okay. And then a question on -- again, on Ekol I acknowledge that you commented at the beginning. But when you announced the Ekol deal, you postponed your 10% ROIC target to 2027 from 2026, which now still seems to be the case despite the termination. Can you please just elaborate on your thinking behind not moving it back to 2026?
I think, of course, we have had a tough 2024. We now have this new competitive situation in Turkey regardless of Ekol going through or not. So it would not be prudent to promise a 10% ROIC 2 years from now, given where we are. We are revising -- reviewing these ambitions, but we need to see how the -- especially the Mediterranean market pans out over the next quarter or so.
Understood. And then final question for me. Just the guidance downgrade. You -- the midpoint in Ferry on EBIT is reduced by DKK 160 million. Can you say what the rough split is among your different geographical segments? You mentioned Mediterranean is obviously a part of it. But what other segments are also revised down? And then if I can add, the nonallocated items are reduced by DKK 50 million. If you can also share what they relate to would be great.
Yes, the nonallocated, I don't know if I can cover that. But the Med is, of course, a significant part of the midpoint downgrade. And then we continue to see some weaknesses in the Baltic as well.
Okay. And no further comments on the nonallocated items?
I'm not sure, I think you can maybe reach out to -- maybe reach out to Søren afterwards for some details on that.
Our next question comes from Lars Heindorff of Nordea.
And also a few questions I have had. The first is a bit of a housekeeping. Karen, it's probably relate to you. It's on Page 11. There is the waterfall chart showing the impact from the acquisition, including one-off items, which is DKK 27 million. How much is one-off items and how much is M&A?
Yes. It's a fair question. It's a little bit of a mix because we are only looking at the EBIT impact. I think we'll have to come back to you on the specifics of that unless Torben can give me the numbers.
The one-offs are DKK 135 million.
And then we have Strait of Gibraltar with DKK 150 million.
Yes. So it's plus DKK 150 million for Strait of Gibraltar and then minus DKK 135 million for one-offs last year.
All right. And then if I can get back to some of the questions that we like to ask about the Mediterranean. The new routes, Torben, you said that it's not going to be EBIT positive in '25, but it's going to be -- I mean to what extent it's going to be [indiscernible]
It will be a minor impact. I really don't think you should always find -- we're excited about it. It is a development route. It's an immature market that are developing in this route, but it's nothing you can put in your models that will impact anything.
And how come because if I understand it correctly, normally, it takes 1 to 2 years before you get up to decide utilization, if you start up new routes, there are some costs related to chartering vessel or at least running the vessel? And then...
We understand that, but then put DKK 1 million loss in your model right? But I'm just saying let's -- it's not something that moves the needle here.
Okay. All right. And then on the guidance for the full year, which you lowered last week. You had a part of the explanation was also that you have included some costs related to the cancellation of the Ekol, which I need to that you don't really know how they're going to react yet and if I understand your comments from this call here earlier. Is this a something which is specifically related to the cost of canceling, i.e., vehicle cost and stuff like that? Or is it just the reaction, i.e., potential loss of volumes? And I mean what's the reasoning behind that?
It's a combination. So -- and again, an early estimate, of course. But we believe that with the new guidance, we can cover some variations to -- if we are not 100% correct.
Let's just for the sake of -- I don't hope it's going to end up there. But if they decide or Ekol decide to move away or volumes, I am correctly understood it's around about 22% of your volumes out of Turkey, what will the implications be?
It's -- last 12 months, it's 13% of our volumes. And the consequences are, of course, pretty Remember that even with the new competition, really only operator between Mersin and Italy and Eastern France, where Ekol is a large customer. So if we just look at '24, we don't think it's a realistic scenario that we will lose all volumes.
Would you said -- did I hear you correctly, 13%, 1-5 -- 1-3, sorry?
13%, yes.
And -- but if I recall correctly, earlier occasions, you've been stating, it's been above 20%?
In the past, it has been indeed above 20%.
Okay. And then on the Logistics side, and now the -- and the question, which I've been asked is you before is that if you have any considerations about the split between own production and just running it by sub-suppliers, given the market and the outlook also in particular, that part, which is in the Cold Chain, any further considerations on that part?
You're right that this is definitely one of the big attention areas in Logistics in these 7 projects that I mentioned. A number of those have that issue as one of the top priorities, and we are gradually reducing the percentage of own or the -- maybe I should rather say, the absolute own production in several areas.
And this is -- is this some -- I mean, how fast can you do that? Is something that you can do within a quarter, 2 quarters? Or -- and what is...
It's something that we do continuously. But there can be, of course, commitments on equipment and others that delay this. So -- but we are catching up with the wrong balance that we've had and whether it will be done in Q4 or whether it requires a little Q1 as well remains to be seen.
[Operator Instructions] Our next question comes from Dan Togo with Carnegie.
So a couple of questions from my side as well, starting with Turkey or Med. The Istanbul-Trieste routes where you now face competition, how much is that? I seem to recall it's around 50% of your network or your volumes down there. And in order for you to have actually reported growth here on the Med routes in October. Can you elaborate a bit on that? Is it because the other parts Italy and France is growing double digit at the moment and compensating? Or are you actually having somewhat success with keeping some of the volumes between Istanbul and Trieste so that the impact here, at least on the volume side is so far modest? Some comments here would be nice.
Normally, we, of course, don't go into this many details. But you are, of course, right. I think it's a little more than 50% the Trieste-Istanbul. But we are seeing relatively strong growth on the other routes. And we've also been relatively successful in maintaining customers. The new competition have been quite successful in converting road business and rail business as part of their volumes. But of course, have also tapped into our Trieste volumes.
And then maybe you can give some comments on the free cash flow guidance that you have of DKK 1.2 billion to DKK 1.5 billion or the long-term guidance of DKK 1.5 billion, how realistic is it that we will see that level again in 2025? And what will the levers be to reach the DKK 1.5 billion coming from DKK 1.2 billion here in '24?
Well, I had this Slide 6. However, it was where we tried to show how the network is maybe the fitness of the different areas. And we do, of course, expect that if we look away from Mediterranean that we will see improved results across our network next year. And then, of course, the question is, how impacted Mediterranean is before I can answer this question, Dan.
Understood. And then maybe on Logistics, you were pretty bold at the Q2 and expecting a rapid return in Q4 -- profitability in the logistics business Is that just postponed 1 quarter? Or are these levers simply not available to you, so we will see a long stretched downturn in Logistics going into '25? Just to get an understanding on how rapid we are going to see recovery.
Absolutely right. We are disappointed that we didn't see the recovery in Q4. I think we said that we would be better than last year in Q4. And now we are probably hoping that we can be at the same level as last year and then the recovery will come. The levers that we have in the different, we call them boost projects, the 7 projects that I mentioned are valid. Some of them, of course, are easier to implement than others, but we don't expect a prolonged recovery.
Our next question is a follow-up from Ulrik Bak.
So first one on CapEx. Now since July, you have cut your outlook for CapEx by DKK 350 million. So can you please just put some words on what is it that you're not spending money on in 2024 and whether we should foresee a pickup in CapEx in '25 instead?
It's -- there's not a one-to-one. Some of it is simply things that we will not be doing. Others may come back. Maybe we were too conservative in the first guidance. And also Logistics, we are changing a little bit the philosophy of CapEx versus OpEx.
All right. So OpEx should increase is that -- in Logistics, just clarify your last comment.
No. This is back to the question, I think it was from Lars about the balance between owned equipment and third-party volumes.
Okay. That makes sense. And then during the presentation, you mentioned that you will stop the ammonia vessel projects. How will this impact your medium-term green CapEx profile if any?
Yes, I'm not sure I said we would it or delay it, but we are not -- it will certainly be a delay of the ammonia vessels. In terms of our green targets, 45% reduction by 2030, there's no change.
But the CapEx need, the ones that you outlined on your Capital Markets Day in December last year, are they still firm? Or would they be postponed a bit?
They could be postponed. On the other hand, we are looking at whether some of the Channel Ferries could come earlier potentially. But there is, of course, a likelihood that CapEx will be slightly lower in the period running up to 2030.
Okay. Makes sense. And then the final question here is on the Gibraltar Strait. To my knowledge, there's a concession that's coming up for renegotiation on one of the routes. Can you please just share what route is it? And how much or larger share of your business down at Gibraltar does that make up today?
It's the -- you're absolutely correct. On the Spanish side, there is a tender of access to both. and that is [indiscernible] roue. It's a pure passenger route. The largest route we have down there is the [indiscernible], where it's When we made the acquisition, I think the [indiscernible] was 25% of the EBITDA. So we will see. We, of course, feel that we have a very good offering. It's a 15-year tender. So we'll have to see. They have delayed the decision until the end of the year.
And when will the new concession come into effect? Is it 1st of January or later?
I think it's April -- it's a little bit -- it's before the high season.
Ladies and gentlemen, this was the last question. I hand back to Mr. Carlsen for any closing remarks.
Thank you very much. I don't know if it's a good sign with so many questions. But I appreciate, of course, taking the time to dig a little bit deeper in our numbers. For the rest of the year, our top priorities are to continue to protect our key ferry market positions. Of course, Mediterranean is a top priority within that and priority to achieve continued organic growth and to turn the Logistics earnings trends around.
As you saw from the volume numbers this morning, we had pretty firm volumes, which is actually a little bit better than expected. But thank you very much for joining the call, and thank you for your questions. Look forward to speaking to you again soon. Have a good day.