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Ladies and gentlemen, thank you for standing by, and welcome to the TORM's Q3 2020 Results Call. [Operator Instructions] I must advise you that this conference is being recorded today. And I would now like to hand the conference over to your speaker, Morten Agdrup. Please go ahead, sir.
Thank you. And thank you all for dialing in to TORM's conference call regarding the results of the third quarter and first 9 months of 2020. My name is Morten Agdrup, and I'm Head of Corporate Finance and Strategy in TORM. As usual, we will refer to the slides as we speak. And at the end of the presentation, we will open up for questions.Slide 2, please. Before commencing, I would like to draw your attention to our safe harbor statement. Slide 3. With me today I have Executive Director and CEO, Jacob Meldgaard; and CFO, Kim Balle. I will now hand the call over to Jacob.
Thank you, Morten. And please turn to Slide 4. A warm welcome, and good afternoon. Thank you to all for dialing in. Here today before we commence the review of our financial results I would like to express my gratitude to the seafarers. They are the foundation for TORM's operations. And while the restrictions on crew change have decreased all over the world, they continue to make great sacrifices during this troubled period. Today also a special gratitude goes to the crew onboard TORM Alexandra that over the weekend were attacked by pirates in the Gulf of Guinea. But due to their excellent seamanship and the excellent support from the Italian Navy, they managed to stay safe and in control of the situation.Turn now to the overall product tanker market. The freight rates here in the third quarter of 2020 have come down from what you can term unprecedented high levels during the second quarter, primarily impacted by the unwinding of floating and shore-based storage. The quarter was also characterized by a record-high regional rate disparity with the West market being significantly stronger than the East due to record-low vessel availability in the Western Hemisphere. I'll go into details on the market shortly.Now for the third quarter, the product tanker fleet realized an average TCE of $16,762 per day. And here for the first 9 months of 2020, the equivalent number was $21,942 per day. Looking at profit before tax here in the third quarter of 2020, we realized profit before tax of $1 million, with the number being $129 million for the first 9 months of the year. The number is negatively impacted by a nonrecurring IAS standard provision of $8 million related to cargo claims. Our return on invested capital, our earnings per share was 2.7% for the quarter, 12.5% for the 9 months.As announced in our second quarter earnings release, we sold 2 older MR vessels during the third quarter. Here after the quarter ended we then agreed to buy two 2010-built deepwell MR vessels for total consideration of $32.6 million. These vessels are built at the Korean well-known yard, at least in our industry, Hyundai MIPO. Here we are in advanced discussions for the financing of the vessels. And the purchase is expected to have only minimum impact on our liquidity position. Further, our scrubber program, this is progressing according to plan. And as of today we have installed a total of 43 scrubbers on our fleet.Lastly, I want to mention that we've refinanced debt related to 8 vessels, thereby postponing the maturity to 2027. For this particular facility, this further supports our strong financial position and the attractive debt repayment profile we have.In line with our environmental focus we have in this particular agreement managed to include a CO2 emission linked price mechanism that motivates us through monetary benefits to reduce our CO2 footprint and subsequently live up to IMO's 40% reduction target by 2030.Now let me turn to some of the drivers in the product tanker market. And please turn to Slide 5. As I already mentioned, the product tanker rate averaged $16,762 per day for the quarter. When we look at the individual segments, then on the LR2 rates were $23,854 per day, LR1 rates of $20,629. In the largest segment, the MRs, we achieved rates of $15,077 per day. And finally, in the Handysize segment, we achieved rates of $7,628 per day. Since the unprecedented freight levels that were reached in the second quarter, product tanker freights have come down. Also here in the third quarter, and this development has continued into where we sit today in the fourth quarter.We see there are 3 drivers from the third quarter that I want to highlight here. Firstly, the rebalancing of the oil market which started with the unprecedented shock to the global oil demand back in April. This led to a continued unwinding of floating storage, which released a large number of vessels into the market in the third quarter and obviously reduced the freight rate environment. Secondly, we saw an increase in number of crude newbuildings, taking clean cargo on the maiden voyage as the result of a weakening crude tanker market. Thirdly, here in the last quarter, it was really characterized by record-high regional rate disparity, as I already mentioned. While you can say generally freighter levels were on a weakening trend, the market in the West was actually still showing strong earnings as a result of record-low vessel availability here in the Western Hemisphere.So far into the fourth quarter we have experienced that the number of new COVID-19 cases unfortunately had been increasing fast, especially in Europe, but also a tendency in the United States. This has resulted in renewed lockdowns and a stalling oil demand recovery. It has kept refineries from ramping up their runs. And logically, this has subsequently limited trade flows, which is reflected also in the weak product tanker freight rates we are currently experiencing. I'll explain all these factors in more detail in a short while. But before I get to that, let me stress that the uncertainties around the COVID-19 impact on the global economy and oil demand specifically, that remains, not least in light of the second wave of COVID-19 cases, especially in Europe.Please turn to Slide 6. Obviously there are a number of different drivers behind the freight rate development this year, but a large part of this can be explained by developments in product stockpiles. Here on this slide this illustrates the dynamics of the COVID-19 impact on the oil demand on refinery runs and changes in the product stockpiles. Initially, as you can see, refinery runs were slow to react to declines in demand. This led to the unprecedented inventory builds, which in turn benefited TORM and benefited the broader product tanker market. By the end of the second quarter, oil markets actually started already then to rebalance as the lockdown measures were relaxed in many parts of the world and the oil demand started to recover.As refinery margins remained very weak, refinery runs did not ramp up as fast. And we moved from the stock-building phase into a stock-draw phase, which is generally associated with headwinds for the tanker market as vessels are being released from floating storage and destocking lessens the demand for transportation.Now in recent months we've seen this second wave of COVID-19 emerging in Europe which has resulted in new lockdowns, as we speak, put a break on the oil demand recovery. Similarly, the U.S. is facing a third wave of infections. However, what we see this time around refineries are they already running at a very low utilization and are basically just now keeping runs from ramping up. This will avoid a new large-scale stock build from emerging. And the market in general continues to rebalance. We do believe that it's difficult to estimate the exact timing, but the inflection point is expected to be reached once the countries reopen their -- from their current lockdowns, the demand recovery gains momentum, and this will bring product inventory back to normal levels.Slide 7, please. So let me say a few more words now about this stock-draw because we really think it's very important for the dynamic in our market. The destocking was initially driven by the offshore inventories. And most of the excess floating storage clean petroleum products, which peaked at around 14% back in May has cleared by now. The level of vessels in floating storage has stayed relatively stable. And what we see now is a ratio around 6% of the fleet. It's slightly above what we consider a normalized level, which would be at around 4%.It should be mentioned that we continue to see some volatility in floating storage as the COVID-19 continues to impact the market. But this is at a small scale compared to what we saw back in second quarter. For example, recently there have been floating storage picking up in with Africa. But the current oil structure does not provide for the contango necessary to significantly induce storage.If we look at onshore inventories, these have also started to decline, although this process has generally taken longer than in the case of offshore inventories, especially when we look at diesel as a particular product. For example, in main training hubs such as the U.S. and in North West Europe, Singapore, the middle distillate stock have reduced significantly since September, but are still around 10%, 12% above the 5-year average levels. Light distillates on the other hand are only 5% above the average levels.Looking at global stockpiles, the market continues to be impacted by excess inventories. And while a destocking means that part of the demand is being met by local stockpiles rather than being imported, it is important to mention that not all of the inventories are likely to compete with trade. We estimate that around 40% of the cumulative inventory built since March is actually accountable by China's clean product stock build, much of which is either trade-neutral or even trade-creating, considering that China is a net exporter of these products.And here, please turn to Slide 8. As already mentioned, one of the main characteristics of the third quarter was a record-high disparity between regional freight rates and more precisely a strong outperformance of the western market. This was driven by an unprecedented shift of the fleet balance from West to East back in March-April when the Atlantic basin demand for gasoline, for naphtha, it fell out a bit due to the COVID-19 lockdowns. This resulted in a large surplus of products being exported to Asia. Now when these vessels arrive back in Asia, refineries in China, North Asia cut their exports amidst the weak export demand and low refinery margins, meaning that basically the fleet balance increasingly became East-heavy as products moving back to the West were limited.Consequently, the share of MRs in the east in August peaked at 54% compared to a historical average around 45%. And that was what in turn led to a strong outperformance of rates in the West markets. Since then we've seen that the fleet in the East has started to normalize, although in historical terms the share of vessels in the West remains relatively low.Slide 9. The market in the fourth quarter has so far been affected by the increasing new cases of COVID-19 in Europe and United States. And this has stalled the demand recovery in these regions. On the other hand, if we look at countries which have not experienced a similar emergence of the second wave of infections like China, like India, these countries have seen a demand come back in recent months. This suggests that once the virus is under control, the vaccine becomes available to a wider population, and the affected country is reopened, we will see a wider oil demand recovery. And indeed the recent news of a potential coronavirus vaccine breakthrough from Pfizer gives a renewed hope for that.Slide 10, please. When we turn to post COVID-19 market drivers, we cannot avoid talking about the refinery dislocation yet again. Refinery margins have been under a historical pressure as a result of COVID-19. And this has actually resulted in an increasing number of refineries announcing closures here in recent months. Consequently, around 3 million barrels per day of refining capacity will potentially be removed from the market within the next 3 years. Most of it being located in regions that are already large importers of refined products. They'd be in Europe, on the West Coast of the U.S., also U.S. East Coast, Australia, New Zealand and even in South Africa. So at the same time as this development taking pace, approximately 5 million barrels per day of new capacity is scheduled to come online mainly in the Middle East and in China, the regions that are already today large export or of all products.Both these developments are clearly positive for trade flows and for ton-mile in the post '19 -- post COVID-19 world. There are only a few projects which are less positive for trade, most notably the large-scale Dangote refinery in Nigeria, which is nevertheless not expected to come online before 2022.And here let us go to Slide 11, please. What makes the current situation different from the other destocking periods we have seen over the past couple of decades is that the order book to feed ratio for product tankers is currently at a historically low level. It covers around 7% of the total existing fleet. This has been further supported by the relatively low interest for newbuilding ordering so far here in 2020, which is a result of the uncertainties, of course, due to the coronavirus, but also the uncertainty around the future propulsion system of the vessels. Although we have recently seen an increasing interest, especially for the crude tanker segment in the form of a letter of intent being signed with shipyards.It is unlikely that we'll see significant additional pressure on the market from newbuilding deliveries at a time of destocking. As opposed to the previous destocking periods and the slowing fleet growth rate, it's a key point to the fundamental positive development that we expect for the product tanker industry as a whole.Slide 12, please. To conclude our remarks here on the product tanker market, TORM expects to see volatility in the market in the short term that will be predominantly related to the COVID-19 development, and this virus impact and the health crisis impact on the global oil markets and economic activity. Aside from COVID-19 effects, we see that a number of key market drivers for the next 3 to 5 years will remain positive, such as mentioned, the refinery dislocation, the low order book. They will provide the support to product tankers over the long term.Slide 13, please. Looking at our commercial performance. I'm truly pleased that we, again, here in the third quarter of 2020 have outperformed the peer group average in our largest segment, the MRs. In the third quarter of 2020 we received -- achieved rates of $15,077 per day. This compares to a peer average of $14,016 per day. Looking at it on an aggregate basis, this translates into additional earnings of $36 million in the third quarter alone and $5 million for the first 9 months of 2020. In general, I am very satisfied that TORM's operational platform continues to deliver very competitive TCE earnings. I should correct myself that it is obviously EUR 5 million for the third quarter alone and EUR 36 million for the first 9 months.With that, Slide 14, please. A key deciding factor for delivering this above-average TCE earnings is driven by our continued focus on positioning our vessels in the basins with the highest earning potential. We have a balanced strategy where we generally do not position all our vessels in 1 basin, but instead have some over away in either East or West depending on our expectations to the future market. Towards the end of the first quarter and the beginning of the second quarter, we started a general repositioning of vessels towards the east of Suez in anticipation of stronger markets there during the second and third quarters.This materialized by strongly outperforming earnings in the Middle East, especially in the second half of Q2. However, as the extent of the MR fleet migration from the West to the East became apparent, we started to rebalance towards west of Suez during June in anticipation of potentially strong Western market in light of the thin supply side there. We are just below 50% of our MRs. Positioned West of Suez during the third quarter. And as I mentioned earlier, the market in the West has, during the quarter, seem significantly stronger and been significantly stronger than what we experienced in the East. The relatively stronger West markets have continued here into the fourth quarter, although to a lesser degree than what we saw in third quarter.Now let me hand it over to you, Kim, for the further elaboration on our operational leverage, the core structure and not least the balance sheet. Over to you.
Thank you, Jacob. Please turn to Slide 15. With our spot-based profile, TORM has significant leverage to increase its underlying product tanker rates. As of September 30, 2020, every $1,000 increase in the average daily TCE rate achieved translates into an increase in EBITDA of around $4 million in 2020. The corresponding figures increased to $23 million in 2021 and $26 million in 2022. As of 8 November, the coverage for the fourth quarter of 2020 was 66% at $13,274 per day.Slide 16, please. Before reviewing our cost structure and financial position, I would like to remind you of TORM's operating model where we operate a fully integrated commercial and technical platform, which we believe is a significant competitive advantage for TORM. Importantly, it also provides a transparent cost structure for our shareholders and eliminates related party transactions. Naturally, we are focused on maintaining efficient operations and providing a high-quality service to our customers. Despite this trade off, we have seen a gradual decrease of 18% in our OpEx per day over the last 6 years, which translates into a total decrease of around $36 million on an annual basis.OpEx was around $6,700 per day for the third quarter, reflecting an increase of around $700 per day compared to the second quarter. This increase is primarily a result of a very positive development TORM has experienced with respect to crew changes. During the third quarter TORM performed just below 1,000 crew changes or around 2/3 of our total crew onboard our vessels. This has reduced the number of crew with overdue employment contracts to a current level of around 6%, down from approximately 40% at the peak during the second quarter. TORM is still experiencing increased costs related to crude changes as a result of precautionary measures such as quarantine requirements. And it is expected that an element of these costs will continue throughout the COVID-19 pandemic.Slide 17, please. I would now like to review our financial position in terms of key metrics such as net asset value and loan-to-value. Vessel values have decreased by around 4% during the third quarter of 2020. And the value of TORM vessels, including newbuildings, was just around $1.6 billion as of 30 September, 2020. Outstanding gross debt amounted to $867 million as of 30th of September, 2020. And finally, we had outstanding committed CapEx of $86 million related to our newbuilding program and cash of $157 million as of 30 September, 2020. This gives TORM a net loan-to-value of 49% at the end of the third quarter, which we consider conservative level. The net asset value is estimated at $867 million as per 30th of September 2020. This corresponds to $11.7 or DKK 74.1 per share. In short, we have a balance sheet, which provides us with strategic and financial flexibility.On the following slides I would give some more insights into our liquidity position, CapEx commitments and our debt profile. So Slide 18, please. As of 30th of September, 2020, TORM had available liquidity of $289 million; cash totaled $157 million; and we had undrawn credit facilities of $132 million. Our total CapEx commitments related to our newbillings were $86 million as per 30 September, 2020. And in addition to the CapEx related to newbuildings, we also expect to pay $9 million for retrofit scrubber installations on vessels on the water.Our acquired MR secondhand vessels are expected to be delivered between November 2020 and February 2021. And the cash consideration of $32.6 million will be paid accordingly. As mentioned, we are in advanced discussions to finance these vessels. With TORM's strong liquidity profile, the CapEx commitments are fully funded and very manageable, while the liquidity position at the same time provides room for pursuing new opportunities should they arise.Slide 19, please. After having finalized the refinancing in the beginning of 2020, we have eliminated all major refinancing until 2026, which provides TORM with financial and strategic flexibility to pursue value-enhancing opportunities in the market. We have adjusted our 30 September, 2020 repayment schedule to reflect our recent concluded refinancing, as Jacob mentioned, which was agreed after the quarter ended. And as displayed on the slide, we have no major repayments until after 2025.With that, I will let operators open for questions.
[Operator Instructions] And your first question comes from the line of Ulrik Bak of SEB.
A few questions from my side. Firstly, we've now been witnessing quite depressed rate for some time. And usually, rates, they start to climb during Q4 as the winter season kicks in. Do you expect this to happen this year despite the high inventory levels and the new corona restrictions? And if so, when do you think will be the inflection point?
Yes. Thanks for that question, Ulrik. And actually, we did have the same dialogue at our last conference call back in August after our Q2 release where we were careful in saying that we thought that this year probably the seasonality in the freight rate environment would be subdued. That's unfortunately still our take on this. My instinct from the traits we see with our customers is that it is -- activity is not as strong as it normally is. This is -- it doesn't mean that we cannot climb from the current relatively weak freight rates. There could be some volatility. But we expect a big sharp increase in freight rates. I think that will coincide with the rollout as already discussed of a vaccine globally so that we get a consumer pattern that is more like the one we had pre-COVID-19.
Okay. Then my second question is on your vessel transactions during Q4. You have acquired 2 2010-built MRs for $32.6 million. How does that value compare to the price you received on the vessels you sold earlier this year if they are comparable in any way?
Yes. So that's a good question. They are not directly comparable since the vintage of the ones we've sold is around 2002, 2003 builds. But if you look at the price curve of 5-year-old that was also part of the -- some of the material we have, you will see that prices of vessels have gone down in the secondary market over the last 6 months. Even though they are not comparative of the same, we have sold previously at prices that would translate into higher prices then than what we are acquiring at today. But they are not the same vintage.
Okay. But it's fair to assume that the price, if you had bought the same MRs 6 months ago, the prices would be much different?
Significantly above, yes.
Your next question comes from the line of Jon Chappell of Evercore.
Jacob, I wanted to ask about the MRs in a different way. So 10-year-old vintage, I'm sure you got a very attractive price for those. But with all this focus recently on carbon emissions and new fuel propulsion, what was the thought process behind buying ships that will eventually -- essentially be 11 years old in the next couple of months? Was that strictly an opportunistic buy and -- but not really a strategic focus going forward?
Yes. No. So I think we -- the way we look upon this is that an acquisition of an asset should of course fit with the economic logic, as you point to. Where -- what is the sweet spot on return on invested capital over the coming years, that's one criteria. The second criteria is that it does fit with our CO2 emissions ambition around ultimately by 2030 to have a 40% relatively lower CO2 emission on our fleet. And this particular vessels are sisters to some of the others we have where we can see that some of the retrofits we can apply actually means that these vessels will sort of on a relative basis provide an even better performance on emissions than what we had without the vessels. We don't see them as a long-term part of our fleet. As you will have seen, the average age of the vessels that we are sort of recycling and going out of our fleet have a vintage of around 18 years. So before 2030, likelihood is that these vessels will not be part of it. But in the meantime, we actually think that they fit these 2 criteria strategically to be a good risk for the CapEx that would be employed. And number two, that they are actually meeting the CO2 emissions for this year. That's the way we will think about this investment and also any future moves that we will be taking.
And as it relates to future moves, I mean, that slide you put on the refinery closures and the new expansion. Obviously, a theme we've all been talking about for about 15 years now, but finally seems to be coming to fruition. Should we expect to see more…
Thanks for reminding me.
It's been painful for me too. Should we expect to see more LR2, LR1 investments as you think about your fleet over the next 5 years or so as opposed to your core MRs to kind of meet that lengthening of haul dynamic that should be hopefully occurring?
Yes, I think you are right to point to that the longer haul rates would qualify for the customer demand, will increasingly also move more towards long rate vessels. And I think we generally subscribe to that, that in the latter part of this decade that there could be a tendency to favoring larger vessels over smaller distribution vessels.
Okay. And then if I may, just 2 kind of nitpicky questions. I'm trying to understand the stock price reaction today, which doesn't seem to quite align with the results in the presentation. So first of all, the $8 million of cargo claims in the third quarter, which I think would obviously be considered nonrecurring, but may not be treated as such right now. Can you just explain what that is? And is that an issue going forward? Or does it really ring fence to the third quarter?
Yes, absolutely. So it is a number of [ card ] claims that we have accounted for, where it is in dispute whether we will actually ultimately be picking up the sort of the obligation to pay this or not, and it is ring-fenced to these particular events and nonrecurring item.
Okay. And then the second thing is, you obviously paid an $0.85 dividend almost 2 months ago to the day. But in the presentation it says in line with your dividend policy no dividends will be recommended by the Board for the 9 months ended September 30. So I want to be clear. I mean, the dividend policy is still 25% to 50% and the no dividend based on the 9 months, and you already paid $0.85. So you're effectively just saying based off the third quarter results, there's no recommendation from the Board, is that correct?
That is correct, Jon. Let me qualify that, that our distribution policy is to evaluate semiannually based on the net result to distribute. So that is either dividend or share buyback, 25% to 50% of net. So actually it was not even on the Board agenda to be discussed because that would be done at year-end where the second half of the year result will then be taking into account.
But you're right. I think that might have been a little bit misleading and may explain some of the actions.
Your next question comes from the line of Anders Karlsen of Danske.
A lot of my questions have been asked already, but I was thinking about scrapping. We haven't seen any big scrapping moves given the weak rate environment. Are you hearing? Or are you seeing any signs that, that is about to change?
Yes. Good question as well. The fleet and the percentage of the fleet that are going for scrap has not really changed over the past 12 months. You could say that what would lead that to materially be different would be some kind of regulation, either on the features of vessels and/or on a carbon tax, that could potentially lead to accelerated scrapping. But when we look at the vintage of product tankers, our opinion so far is that there will not be an acceleration necessarily of scrapping within the next couple of years. But when we come to the second half of this decade, so 2025 onward, then when you look at the pool of potential vessels that are meeting, the current average age for scrapping is 25. That pool of vessels will significantly increase as we move into the second half of this decade.
Okay. And the second question is relating to your scrubbers. I mean, it's a little bit over your history, that was done last year, but you still continue to install scrubbers on some of your ships and have a fair number of scrubbers. What is your experience so far? And could you quantify a little bit about the savings that we have seen, albeit the [ banke ] differentials are fairly low. But can you quantify anything about your savings so far?
Yes. So what we can say is, A, that operationally we are experiencing no sort of operational issues with the scrubbers itself. On the other side of the equation, the economic return, then we are looking at payback time depending on the size of vessel and depending on the -- whether it is a retrofit or whether it comes from newbuilds, it is generally a payback time of around 5 years for our total installed scrubber fleet.
Okay. Are you seeing any high maintenance cost? Or is it as expected?
Yes. So back to my point that I think on everything that we sort of -- it is under our control, you can say, operationally around the retrofit itself, around the subsequent operation of the scrubber. There's been no surprise that it is in line with what we had expected. And we are very pleased with that operational sort of performance that we see. And when we then look at the financial return of the scrubber, then it is with the current spread profile that we are experiencing and the forward curve, it is payback times around 5 years.
And your next question comes from the line of [ Philemon Mullins ] of [ Value Investors Edge ].
You've told about the current differences between East and West. And I was wondering if you could provide some more color on what you're seeing in the market as of now? Are lockdowns in Europe already having an effect?
Thanks for that question. So what we are experiencing is that currently freight rates in the Western Hemisphere are slightly stronger for MRs than what we are experiencing in the Eastern Hemisphere. But it is not to the same degree as what we saw only a couple of months ago. So the impact has been the lower demand for transportation in the Western Hemisphere, leading to lower freight rates, albeit that they are still somewhat above what we are experiencing in the East. To be very precise, the freight rate environment in the East is around, let's say, for an MR, $7,000, $8,000 per day. And it's probably around $10,000 in the West.
All right. All right. That's helpful. And I was surprised by your Q4 coverage for the [ Handymax ] class. And I was wondering if you could provide some comments. I mean, I know you have only 2 vessels, so.
Could you elaborate your question?
Yes. Sorry. I was wondering if you could provide some comments over your Handymax performance for Q4.
I think the rate that we have there is close to what is on the MRs, but it's for a very small portion. As you point to, it is rather position when we only have 2 units. So I think at the end of the day, over time, our freight rates will average out over several quarters. Whereas if you have a bigger pool of vessels, like, for instance, what we have in MRs, you will see that averaging up taking place within the quarter itself. So I think it's just a coincidence.
There are no further questions from the telephone lines.
Okay. We have 2 questions from the web. One question relates to the benefits of our public listing. Kim, would you elaborate on that?
Yes, I can take that one. Being listed has that -- several advantages. But the primary advantage is, of course, the ability -- the opportunity to raise equity, to raise capital in a public market. So that is one of the function, primary function. And secondly, it also provides the opportunity to issue new shares as a currency when making M&A transactions. And on top of that, being listed requires an extreme sense of transparency, a high degree of communication and extremely strong governance and hence also a strong control framework. So when you add all that up, in the end, that will give an insurance for all stakeholders broadly that we are living up to an utmost effort on all these accounts. So I think both are extremely valuable by being a listed company. So no, we have no intention as such of delisting our company. We are very happy to be listed.
Thank you. And we have a second and last question around our view on M&A and consolidation. Jacob, will you elaborate?
Yes, please. Well, we're always open for the dialogue. And I will say what we would be looking for is obviously that there is a commercial fit with a partner. We would be looking that to whether it creates additional value to our shareholders. And if these themes are in line, we are always open for discussions.
Okay. Thank you. There are no further questions from the web. So this concludes the earnings conference. Thank you all for dialing in. Have a good day.
Thank you, sir. Ladies and gentlemen, that does conclude your webcast for today. Thank you for participating, and you may now all disconnect.