DFDS AS

CSE:DFDS

Q2-2025 Earnings Call

[Operator]

Ladies and gentlemen, welcome to the DFDS Q2 Report 2025 Conference Call. I'm [ Morris ] chorus call operator.

[Operator Instructions] And the conference is being recorded. The presentation will be followed by a question and answer session. [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, sir.

[Torben Carlsen, executive]

Thank you. Good morning, and welcome to our Q2 conference call. I am as usual joined by Karen Boesen, our CFO; and Søren Brøndholt, our Head of Investor Relations.

The headline of our Q2 report is that the result was lowered by Mediterranean headwinds. On the one hand, the result for most of our network was broadly in line with our expectations. As I said before, the underlying strength of our network is intact. On the other hand, the adaptation of our Mediterranean Ferry business and the turnaround of logistics as Türkiye and Europe South progressed in Q2, but with less beat than expected.

As you know, this led us to update our earnings outlook with the rains introduced with a lower midpoint than previously expected. This is, of course, not a satisfactory situation, but I do take comfort from the actions that as we speak, are being rolled out to speed up the recovery. I also take comfort from the solid progress we made on our logistics Boost projects. We'll report more on progress and actions as we go through the slides.

Let's start with an overview of our market environment and Q2 results. If you turn to Page 3 we just repeat our -- moving together towards 2030 strategy in the 5 pillars, the Green transition and the commitment to reaching our goals there, plus the focus on reduction of leverage, reduction of debt, noncore asset review and working capital initiatives that Karen will talk more about.

On Page 4, the geopolitical market and competitor environment on the U.S. tariff talks, the disruptions are settling down some. The Ukraine war uncertainty, unfortunately, continues. Germany's commitment to lifting infrastructure, defense investments have not yet shown in the market, but will come. All in all, the near-shoring outlook is positive. Companies do move production closer and manufacturing closer to their customer base in Europe either Eastern Europe thrusters, Turkey, North Africa.

The markets in Europe still experienced a very little growth. The Turkish export see some challenges by the foreign exchange parity, i.e the Turkish lira has not weakened as much as the inflation would say, although clearly, the Turkish government is moving in that direction. We've seen lately some oil price spread increases that will help us in the latter part of the year where it has been a negative impact in Q2.

On the competitive side, the capacity on the Istanbul-Trieste

Corridor we are adjusting to meet demand. We see some increased capacity on some of the North Sea South routes from flooding into -- impacting our flooding in [ Felixstowe ] route. We continue to see oversupply of continent road, warehousing capacity impacting, of course, pricing power.

Turning to Page 5 and a walk-through of the background for the adjusted outlook, our Q2 earnings were lowered by Mediterranean headwinds, which means the Ferry Division result is below expectations due to this. The Logistics division result. On the other hand, is ahead of expectations, helped by good traction on the Boost projects and by transaction gains. Türkiye and Europe South. What we refer to as TES is below expectations.

We'll come back to that. And a very strong first half cash flow driven by targeted initiatives. The focus area has progressed less than expected. The logistic Boost projects showing a strong progress, as I mentioned. I'll come back to that. The Mediterranean Ferry volumes were in line with expectations, a little down versus last year.

The market is growing due to the lower Ferry prices, but our pricing initiatives were not effective. On the TES turnaround, the cost part rightsizing extra part is going as planned or better. Unfortunately, the volume development has disappointed and were weaker than expected. And also the ability to raise prices has been weaker than expected.

Stable network and initiative loans to correct the lagging progress on the focus areas. So on the Mediterranean, a new price model is launched and further capacity adjustments will come later in the quarter. We have turned our focus on TES on a profitable volume growth -- and for the rest of the network, we continue to see a relatively stable outlook, stable volumes, stable earnings. And then we continue to have a very strong focus on our working capital and on our CapEx spending.

With that, please turn to Page 7, where Karen will give you more details on the numbers.

[Karen Boesen, executive]

Thank you, Torben, and good morning, everyone, on the call. Turning to the numbers that we have published today. Overall, a slight growth in our revenue driven by the addition of BU TES compared to the same quarter last year. So overall, we see an uptick in revenue. If we take them sort of group by group, we also see a positive in the Ferry passenger.

It's up, and this includes -- the revenue includes onboard spend, which is a positive for us. Freight revenue on a like-for-like basis when we adjust for various routes and this, amongst others, means excluding the Oslo route, which we had included last year, freight is down. However, if we adjust for these things, then we stay on level more or less. Logistics organic revenue is down, but this is a deliberate choice, you can almost say. It's the result of shutdown of some unprofitable activities, mainly in the Nordics and a bit in the continent. So this is why that is slightly down.

And overall, you also see the net effect of the acquisitions, the addition of BU TES and the sale of Oslo. Turning to Page 8, income statement. I think we -- overall, it hits in our messages from the day, right, and revenue up, however, and EBITDA down due to the lower quality of earnings, so 28% down EBITDA for the quarter compared to last year. Depreciation is broadly in line.

We had last year in that line as well a reversal of impairment on the Oslo route, as the route had been sold by that time. So at a price that justifies the reversal of the impairment. So there was a one-off of DKK 33 million that we show here again. This quarter, we have a one-off of DKK 51 million, which is a result of a sale and leaseback transaction of two Swedish warehouses with a net gain of DKK 51 million in the Logistics division.

So comparing, there's a net effect of DKK 18 million here compared to same quarter last year.

EBIT at DKK 163 million, as we discussed, and I'll come back to that from the divisions in a minute. And then overall, we see an uptick in finance costs, which is driven by currency costs. Overall, our finance interest costs are down due to lower interest rates, and this is despite a higher debt in the -- compared to same quarter last year.

But we have some -- where last year, we had a gain, we have some losses on currency this quarter. Moving to Slide 9. A quick overview of the EBIT of the quarter, also seen in context of the past 4 years. So obviously not a satisfactory result, as Torben also said.

And in the bottom right on this slide, we show you that this is mainly driven by our challenges in Ferry in the Mediterranean, as Torben also presented. And then we have also a lower result in logistics driven by our new logistics division in Turkey as well as some one-off items. I'll come back to now in the EBIT on the next slide, Slide 10, Ferry division. We've chosen to show our EBIT variation in this way this time.

You will see rest of the network, which is the vast majority of the network. So if you -- apart from our BU Med is broadly in line with last year. Of course, there are some variations. But if overall, on the sum of the thing, we are broadly in line with last year's performance. We then have the loss in the Mediterranean due to the lower pricing and also some additional costs that we have faced in the Mediterranean.

So mainly the pricing. As we have also communicated, volumes are not that much down at all, but it is the pricing that hits us. And then we have a quite significant net effect of one-off items, which is a combination of some quite a lot of positive one-offs in last year's numbers and then negative numbers in this quarter's numbers, which gives a net effect of minus DKK 116 million.

Turning to Page 11, Logistics EBIT. We have tried to project it the same way. Again, the sum of Nordic Continent and U.K. and Ireland business units, if we exclude the impact of the Foot and Mouth Disease, which we have been included elsewhere, then that is broadly in line with our performance last year. So trying to show and demonstrate here that we are for a vast majority of our business in a good state.

Obviously, and as communicated from the beginning of the acquisition of Turkey, Europe South, the former Ekol, we are seeing losses. They are here slightly below our expectations, but not that far from what we were anticipating. And then a net effect of one-off of positive DKK 12 million.

This includes the warehouse sale that I mentioned before of the DKK 51 million and then a number of redundancy costs steaming out of both BU TES, but also when we have closed activities and traffic in the Nordic and the continent. So that leaves to DKK 33 million. Last page on the financials, our Q2 cash flow and capital. We had, despite our challenges, a relatively strong operating cash flow of DKK 1.1 billion.

We stayed on our CapEx, meaning that our CapEx were around DKK 300 million. And as you have also seen, we have slightly lowered our DKK 200 million, lowered our forecast of CapEx for the year. That leaves us with an adjusted free cash flow of DKK 0.5 billion for this quarter and year-to-date, DKK 800 million.

So that is supporting well our target that we also maintained in our outlook. This has been achieved not only by the CapEx discipline I mentioned, but also by a range of working capital initiatives and the factoring program that we have previously communicated.

We only added marginally about DKK 150 million of additional factoring in this quarter, but improved on our -- both on our payables and receivables to get to this result. As a consequence, our net interest-bearing debt is lower by DKK 1.1 billion compared to in 2024. But with the reduction in the last 12 months EBITDA pro forma, including BU TES for the last 12 months, we are now up at 4.2, where we at least know we will decrease by Q4.

So with that, I will turn back to Torben.

[Torben Carlsen, executive]

1

Thank you, Karen. Page 14, continue to reduce our emissions from our Ferry operations, 4.1%. And in addition, we have introduced biofuel on our Amsterdam-Newcastle and new route Vilagarcia Rotterdam routes. The way the emission systems work, we can benefit from those biofuel emissions also other places in e-trucks, another 7 e-trucks adding in Belgium and the U.K. Safety, a very significant improvement in lost time to 5.2 from 7.2 with improvements both in the Ferry and Logistics side and with reducing fluctuations month by month following the significant initiatives we have in this area.

Women in management positions up 1 percentage point. And on the [indiscernible] side, we have increased the female ratio from 4% to 10% over the last year. Moving to Page 16, three focused areas to resolve in '25. The logistics Boost projects, adaptation of the Mediterranean Ferry business and the turnaround of Turkey and Europe South. Starting on Page 17 with the Logistics Boost projects. We launched 8 projects that we talked about to you in 2024.

We started the year with a double-digit monthly loss from these projects. And by June, they collectively turned positive. 5 of the 8 are now above threshold level, which means they're exceeding 3% EBIT and have left the Boost program. 3 units are still in, but with significant initiatives already happened so that we expect also in a short time frame to see those projects leaving the Boost extra focus. A lot of initiatives have been carried through in terms of FTE reductions, traffic reductions, office close downs and office mergers to achieve these.

Moving to Page 18. We are, as the headlines say, launching a new pricing model effective September 2025. The Ferry capacity, as you know, as background was increased when three RoRo ferries was entered on the Istanbul-Trieste corridor by a competitor from mid-September '24. We have reduced capacity on our corridor to compensate for this. We have further redelivery of RoRo ferries in Q3.

On the volume side, as you can see in the table, our volumes have stayed relatively stable, some downturn, of course. This is not because the competitors have not gained market share, but because the market has grown as Ferry pricing have gone down. We have tried in first half to increase prices with less effectiveness than we had hoped. And this has led us to change our pricing model in this market for a more simple one, a more transparent one, and we will see a yield recovery from September 1 with the launch of this model.

Turning to Page 19, a quick recap of what Türkiye and Europe South is, the former Ekol basically entering a high-growth logistics market driven by Turkey's role as Europe's manufacturing hub, and replicating the model we've seen successfully applied in the North Sea, where we have both Ferry routes and Logistics. And with the combined offerings from Turkey, providing in our mind, unbeatable combination.

But on Page 20, a little details on how we are then doing. Turkey and Europe South turnaround slowed by weak volumes, as you can see in the headline. We have carried through with the rightsizing of the operations, reduced fleet, reduced assets, increased subcontracting. We have on the organization side, to the right, reduced staff by almost a 1,000 people. We are closing down three country organizations during this quarter to focus on the business that mostly support the Europe Turkey business and therefore, also our Ferry line.

Commercially, we have focused on a large portfolio review of customers, introduced price adjustments. The result of this has been that price adjustments have been hard to achieve to the extent we had hoped due to the competitive situation in the market and also the newly created dynamics from the Ferry competition and there's been so much focus by the organization on the rightsizing that maybe we've lost a little bit high on the commercial side that has been changed over the last couple of months.

And we are now ready to fill the system with more volumes. We have already seen some traction over the last couple of months on this. There is an operational challenge in intermodal. Ferry -- sorry, rail operations in general are less reliable than other modes of transport due to the failure of fraction for many different reasons.

As we have reviewed our contract portfolio, we don't have the right mix of risk sharing with our customers and suppliers when something goes wrong on the rail, and we are working also to improve this. It will take some time, but gradually, we'll see the improvement from this as well. So a number of initiatives ongoing, some with even more success than we had planned for and others with some delay that we have addressed.

Moving to Page 22 and our revised outlook, which now, of course, reflects the Mediterranean headwinds we've talked about here. We still see a revenue growth of around 5%. The EBIT is now expressed as a range of DKK 800 million to DKK 1 billion rather than around DKK 1 billion. We made the adjustments per division, as you can see, and we have reduced the CapEx guidance from around DKK 1.5 billion to DKK 1.3 billion, as Karen alluded to, so that we compensate basically for the missing EBITDA that we potentially face. In terms of free cash flow, this means that we maintain our guidance of DKK 1 billion of adjusted free cash flow. Key priorities for 2025, organic growth focus, profitable organic growth focus, obviously, deliver on the turnaround focus areas.

We still have three with the remaining Boost projects, of course, cost focus throughout the organization, cash flow focus with targeted initiatives, as Karen touched upon. We continue to be -- continued to be committed to the Green transition pathway required to meet EU and IMO requirements. And on the DEI side, full support from the Board to continue our initiatives in this area. And as you heard, good traction on several areas throughout the company.

With this, we will hand over to the operator to manage the Q&A.

[Operator]

[Operator Instructions] The first question comes from Dan Togo Jensen from DNB Carnegie.

[Dan Jensen, analyst]

Maybe some more flavor on what you expect with the price increases here from September. What is the reaction from your clients when you have approached them with this? What is the response you get? And then how do you expect [indiscernible] to react to this? Do you still depend, so to say, on them following suit? Or can you see that their prices have changed in any way? And maybe feeding that into your guidance, how much, so to say, of a volume drop from this higher price do you expect? And what is baked in, so to say, in the guidance range, I guess, reflected in the low end of the guidance? What is -- what kind of a volume drop is baked in? So that is the first question.

[Torben Carlsen, executive]

That's a long first question. Thank you for joining the call, Dan. The -- I think the lesson we have learned to address part of your question during this period is that we need to focus on our own network, on our own strength, our own customers rather than maybe so much on what the competition is doing and how they are responding. So that's answering part of your question. We have our eyes fully on our own network, our own customers and what we need to do to continue to provide an excellent service to these customers while also allowing us to make money.

So that's the discussions we've had with our customer base. We've explained that we tried some initiatives during the spring to increase prices, but due to the complexity of the very individual pricing agreements that were in place before, the effectiveness of increasing the headline price has not been sufficient. So now we are making a simplification in our pricing methodology that is transparent to the market, where basically if you are a small customer, you have one price.

If you fall in a mid-band, you have a slightly lower price. And if you're a big customer, you have again a slightly lower price. This will make our ability to understand the impact of what we are doing better. And of course, on average, this means that our price -- that our customers will experience price increases and to a very different impact for the customers, some relatively little impact, for others, a larger impact. So when we had the discussions with the customers about this, obviously, it has not been something that they've been looking for.

But in general, there is an understanding for this. And we expect relatively limited volume loss, but some volume loss. And in our Q3 planning, we have the ability to redeliver two ferries from the Turkish network so that we can still match capacity with demand. And it is much less expensive for us if we have a little bit less volume as long as we can match capacity than to endure a too low price. So the variability from some loss of volumes and if our expectations are a little bit off will not impact the guidance that we have come up with, if that answers the other part of your question, maybe.

[Dan Jensen, analyst]

But no doubt, it seems from the outside at least, normally, you would have had some kind of risk of lost volume with a significant or sizable increase in price, especially if you know the competitors still sales with relatively low utilization.

[Torben Carlsen, executive]

And that's what we have done, and that's why we are redelivering two ferries.

[Dan Jensen, analyst]

Okay. And then a follow-up on that because this feeds into the issues you have in Ekol that seems to suffer a bit from the relatively high price they have to pay on the ferries. If prices are increased further, how does that fit into your breakeven ambition in Ekol in 2025 at some point? Is that at all achievable?

[Torben Carlsen, executive]

Ekol, of course, is negatively impacted from this price increase as well, at least in the short run. I think in the longer run, the market in general, including our own logistics operation will benefit from a more transparent pricing system from DFDS. Of course, there's still a competition and our logistics is not planning on using the competition. So there may, of course, be some challenges there. But again, we have to rely on our own network, our own services and our own actions to fix the problems we have in the Mediterranean.

[Dan Jensen, analyst]

And just last one here. So the guidance range, does that bake in, that Ekol reaches breakeven in the course of this year or first, let's say, being achieved in first half '26, if possible?

[Torben Carlsen, executive]

I believe we may even have written that we will not reach breakeven lately. It may be delayed. So what stands is what we've said before that in 2026, Ekol should no longer overall lose money. So you can say the breakeven point is delayed. And for '26, the ambition is still to not lose money.

[Operator]

The next question comes from Lars Heindorff from Nordea.

[Lars Heindorff, analyst]

If I can start on Ekol, quite a bit of sequential drop in the revenue from the first quarter into the second quarter. And Torben, you mentioned the -- maybe the lack of commercial focus during the integration phase. So the question is, what kind of seasonality should we expect? Is this sort of the run rate in terms of revenue going into the third and the fourth quarter? And then in terms of the restructuring and the aim of reaching a full year '26 positive EBIT, what is the target for own production in Ekol and also FTE, if any further FTE reductions?

[Torben Carlsen, executive]

We have reduced FTEs by around 1,000. And there are still some different smaller deals where we outsource the running of the trucks ongoing, I believe. But more or less, we have achieved most of the adjustments in terms of own traction versus third-party traction. That's, of course, provided that we can reverse the trend of loss of volumes. And we do see that trend reversing as we speak. There is some seasonality. It's not huge. And yes, part of it was this loss of some focus on especially spot volumes that have hurt us. A different part was that we misread maybe the market a little bit in terms of our ability to get loss-making contracts profitable through price increases.

The competitive dynamics were such that, that meant some loss of volume. We believe that with the renewed transparency on the Ferry pricing and maybe with less swings, there will also be a benefit, not immediately, but over time for TES in terms of being able to be competitive. And then maybe again, to your actions you're talking about, we've also said we are closing three countries that is taking a little time, but they should be closed during this quarter to further reduce complexity.

[Lars Heindorff, analyst]

And so just to be clear about these things, so how much -- because it's a little bit unclear about the impact on EBITDA, how much is one-offs and how much exactly is Ekol? You did not disclose the Ekol EBITDA. Do you expect any other further special items on EBITDA level or restructuring costs into the second half?

[Torben Carlsen, executive]

You will have some one-offs still July, August. But in general, we've taken a lot of the one-offs. And the EBIT we show for TES is cleaned for one-offs.

[Lars Heindorff, analyst]

Okay. So just to get this right, so the minus DKK 68 million contribution on EBIT for the second quarter from TES, is that an adjusted number for one-off items?

[Torben Carlsen, executive]

Correct.

[Lars Heindorff, analyst]

So what would it would have been if you had not accounted for these redundancy costs and so forth?

[Torben Carlsen, executive]

We are not disclosing that. But it's not a dramatically different number that you would have seen.

[Lars Heindorff, analyst]

Okay. And are there any other business units in logistics besides TES, which is losing money on EBIT level?

[Torben Carlsen, executive]

No. The three other business units -- let me just check that. Yes. They are all making money, sorry.

[Lars Heindorff, analyst]

And is that adjusted or reported?

[Torben Carlsen, executive]

This is reported.

[Lars Heindorff, analyst]

Okay. So without taking into account that now you're closing some stuff in Belgium that you talked about and you have not adjusted for the costs related to those closures and so forth?

[Torben Carlsen, executive]

No, not in the reported, but I don't think -- you don't see the reported, of course.

[Lars Heindorff, analyst]

No, no. No, I'm just trying to get a clear picture of, I mean, because it's a little bit -- you talk about adjusted numbers in the text in the report, but it's a little bit difficult to see exactly what your adjusted.

[Torben Carlsen, executive]

What you can say is that the Nordic and the U.K. continent have relatively strong results in Q2, continent where we had the most boost and where we've seen the traction over the quarter really coming towards the end of the quarter, that's where you have the lowest result, but where we continue in July to see the progress coming through.

[Lars Heindorff, analyst]

Okay. And then last one on the free cash flow guidance. You are keeping your free cash flow guidance. You are lowering your CapEx by DKK 200 million and you are lowering your EBIT by DKK 100 million, which means that there's a gap -- what is the reason? And can you please explain that gap?

[Torben Carlsen, executive]

I think you're reading too much into your calculations there. We are basically keeping the DKK 1 billion, and that's coming through CapEx discipline and cash flow initiatives. And then we are losing EBITDA. And I think we're losing more EBITDA than EBIT, by the way, when you calculate.

[Operator]

The next question comes from Ulrik Bak from Danske Bank.

[Ulrik Bak, analyst]

The first one is on the price increases. So firstly, when did you first realize that the effectiveness wasn't as strong as you had expected? And then secondly, can you at all share what the average impact on revenue per unit will be in percentage terms? And thirdly, also in this relation, and the timing of the redelivery of ferries, is that also then from the 1st of September? And is there a potential that you will need to remove further capacity if you lose more volumes? That's the first one.

[Torben Carlsen, executive]

As always, Ulrik, thank you for this very specific questions. I think I will get in trouble with the competition authorities if I gave you the responses to this. But I can, in general, say that we, of course, found out as the quarter reporting came in month by month that the impact was not as expected. And we then started working with the first internally to develop a stronger model and then with the market to discuss this over the summer and explained that 1st of September, we would come with this new model.

Initially, we probably had an idea that we could wait a little bit longer with the next step but decided we had to speed this up. And that's, of course, also back to the first question, reason that some customers feel a little that it's a tough action that we come so early with changes again. But we saw no other way. In terms of redelivery of ferries, that's around mid-October.

[Ulrik Bak, analyst]

Okay. Then in terms of your Passenger business, obviously, you've sold Oslo, Copenhagen route and you've gained the Jersey route. So just in like-for-like comparison, Q3 this year versus Q3 last year, can you provide any guidance of whether you are earnings power or volumes will be slightly lower or slightly higher versus the route split you had last year?

[Torben Carlsen, executive]

So I'm not sure, maybe I just missed it. You don't want to know about Oslo Copenhagen, right? You want to know about our Passenger business or?

[Ulrik Bak, analyst]

Yes, of course. So just looking at Q3 last year, you obviously had Oslo, Copenhagen in those numbers. So the impact from those leaving the numbers in Q3 this year and then the Jersey coming in. So the net impact from this.

[Torben Carlsen, executive]

Yes. But we -- yes, and we have also, of course, lost the Tarifa route, which was a very strong passenger route. So net Jersey, Tarifa and Oslo is a negative on the Passenger. Then we have strong Passenger performance in Strait of Gibraltar, the existing route and also on the channel, excluding Jersey. So let's see. But of course, it's seasonality-wise, we are hard hit by the loss of -- or that we don't have the Oslo route in this quarter and the Tarifa route.

[Ulrik Bak, analyst]

Understood. And then a final question from me. You state that you experienced increased competition from P&O on the Netherlands, U.K. corridor. I've also noted that the CLDN has launched a new route between Belgium and the U.K. with the two new big RoRo vessels. So how is that affecting you? Is it also affecting prices? And what -- how important is that corridor for you?

[Torben Carlsen, executive]

The impact from the increased competition is primarily hitting our Rotterdam-Felixstowe route. And there, we've seen lower volumes. Modest pricing impact, but lower volumes, and we are trying to deal with that. Of course, it's a smaller route in the larger system, but we just wanted to mention that something is happening there.

[Operator]

And we do have one follow-up question from Lars Heindorff from Nordea.

[Lars Heindorff, analyst]

Also on the Jersey, I can see on some website that you have decided to pause a high-speed service from Jersey during the winter. Is that something which were originally planned? Or is this something new? Or how will that affect in terms of the capacity that you have deployed there and also the development for the passengers during the winter period?

[Torben Carlsen, executive]

There is, of course, a learning period for us as we have started this Jersey business, very close dialogue between us and the Jersey authorities as we learn things, as they learn things. And of course, for everybody, it's also a new experience that you have a separate operator to Guernsey. And the outcome of such discussions with the authorities have led us to agree that we can hold this service during the winter period. This positively impact our cost and results on the service. And it has been deemed that, that's an acceptable action for the Passengers.

[Lars Heindorff, analyst]

And the Jersey activities, if you look at those in total, are they contributing positively to EBITDA if you can indicate by how much?

[Torben Carlsen, executive]

They will -- there's been start-up costs. So the primary -- there would be a positive impact in Q3 from Jersey, yes.

[Lars Heindorff, analyst]

Size-wise, anything material?

[Torben Carlsen, executive]

Let's come back to that in Q3.

[Lars Heindorff, analyst]

Okay. And then the last one. If I recall correctly, you may correct me, but I think you started up a new routes also in the Med [ closer ] to Egypt, if I recall correctly. Is that correct?

[Torben Carlsen, executive]

That's correct. We've started two routes this year, one to Egypt and one from Rotterdam to Spain. They're both tracking as expected. And yes, so that's going well.

[Lars Heindorff, analyst]

Are they contributing positively on EBITDA?

[Torben Carlsen, executive]

Vilagarcia is very new. The Spain route is very new. The Egypt route is having a positive contribution.

[Operator]

So it looks like there are no further questions at this time. So I would like to turn the conference back over to Torben Carlsen for any closing remarks.

[Torben Carlsen, executive]

Thank you very much. Thank you for the many and many good questions. Let me wrap up the call. We are through most of our Passenger high season have so far performed as expected. As mentioned earlier, the outlook for most of the freight network is also stable. We have already completed a large part of the preparation and some of the -- also some of the execution of the actions we are taking up -- taking to speed up the recovery of our Mediterranean Ferry and Logistics activities.

Of course, the top priority for the remaining months of '25 is to see those improvements coming through. Thank you very much for joining the call and for your questions. Look forward to speaking to you again soon. Have a good day.