Mowi ASA

OSE:MOWI

Earnings Call Transcript 2022-Q2

[Ivan Vindheim, executive]

Good morning, everyone. My name is Ivan Vindheim, and I'm the CEO of Mowi. And it's my pleasure to wish you all welcome to the presentation of Mowi's second quarter results of 2022. With me today to present the financial figures and fundamentals, I have, as usual, our CFO, Kristian Ellingsen. And after the presentation, our IRO, Kim Dosvig, will routinely host the Q&A session. [Operator Instructions] Disclaimer, I think we'll leave for self-study.

Then we are ready for the highlights. The second quarter goes down in history as the best quarter ever for Mowi financially, both turnover-wise and earnings-wise, with a turnover of EUR 1.23 billion and operational profit of EUR 320 million, on record high salmon spot prices, driven by a strong post-pandemic demand and a global supply contraction of 6.7% year-over-year for the quarter when it includes a release of frozen inventory in Chile last year. So kudos to the organization for this achievement. It's, of course, much appreciated. For the sake, an operational profit of EUR 320 million is also in line with the trading update of the 18th of July. Furthermore, blended farming costs, i.e., weighted farming costs for our 6 farming countries, was EUR 5.10 per kilo in the second quarter, up from EUR 4.78 per kilo in the first quarter due to, first and foremost, underlying inflation. Speaking of which, inflation has hit more or less every corner of the global economy, and found Atlantic salmon has been no exception so far.

When opposed to note, however, several commodity prices have been on the retreat lately. So maybe we have at least seen some kind of a peak for now. We have, in particular, feed prices, which account for more than 40% of cost in books. Time will show. In terms of the farming volumes, we harvested 103,000 tonnes gutted weight in the second quarter, slightly above the guidance of 99,000 tonnes. And in general, seawater growth was good in the quarter with a good biological feed conversion ratio. When it comes to our other divisions, Consumer Products has delivered another set of satisfactory results, I would say, considering the record high raw material prices. And the Feed division on its part has been through low season with all that entails. So both our feed volumes and our feed profit are colored by that, although feed volumes were record high for our second quarter. Other than that, the Feed performance was very good in the second quarter. Last but not least, the Board of Directors has declared a quarterly dividend of NOK 2.30 per share, equivalent to 50% of underlying earnings per share and in line with the dividend policy. That's, I think, does it for highlights, then over to key financials. Kristian will, as usual, go in depth on financial figures under his session. So to not disrupt the course of events, we will just touch briefly upon the most important ones now. And first, turnover, which we have already been through. Mowi recorded an operational revenue of EUR 1.23 billion in the second quarter. And that was a record high, up by 23% year-over-year on 5% lower volumes. Operational EBIT of EUR 320 million, we have also already commented on, more than doubled compared with last year and all-time high by a wide margin. Cash flow was good in the quarter, at least when we adjust for a tie-up of working capital. And net interest-bearing debt came in at EUR 1.24 billion, well within our long-term target of EUR 1.4 billion. And equity ratio was a healthy 52.4%.

Furthermore, underlying earnings per share in the quarter was EUR 0.46 and annualized return on capital employed was 31.6%, well above our long-term target of 12%. In terms of region margins to the value chain, they range from good to great for all entities in the quarter, I would say, apart from Chile and Scotland. We will get back to the explanation shortly. But first, briefly about prices.

The Atlantic salmon standing in the market and its ability to set new records time and time again never ceases to amaze me, but what we witnessed in the second quarter was almost beyond comprehension. Reference prices of EUR 10.62 per kilo in Europe. And USD 8.25 and USD 9.45 per kilo in Americas for salmon of Chilean and Canadian origin are not only unprecedented, but also the highest on record by a wide margin, driven by, as I already said, a strong post-pandemic demand and the global supply contraction in the quarter. As you can see from the graph, prices have come down lately on higher season supply. This is in line with normal seasonal patterns. And prices are still at a reasonably good level, I would say. Then our own price performance. Overall, price achievement was 16% below the reference price in the quarter due to, first and foremost, the record high salmon spot prices and our fixed contracts at lower prices. In addition to that, price achievement was negatively impacted by knock-on effects of winter source in Norway earlier this year and quality downgrading.

So much about prices. Now briefly about the EBIT waterfall. Overall, operational EBIT increased from EUR 137 million to EUR 320 million year-over-year. This was in its entirety driven by increased earnings in farming as a result of higher prices. Farming volumes are in the same period somewhat down, and farming costs up due to inflation. Other businesses were approximately neutral year-over-year. Then it's time to address the various business entities. And as usual, we start with the largest and by far most important one, Mowi Norway. Operational EBIT was EUR 235 million for Mowi Norway in the quarter, up from EUR 93 million in the comparable quarter last year. Both prices and earnings are record high for Mowi Norway. EBIT margin was EUR 3.93 per kilo this year versus EUR 1.66 per kilo last year. As the graph clearly demonstrates, this was caused by higher prices and somewhat higher volumes. Having said that, at the same time, we did not truly benefit from the record high spot prices in the quarter in Mowi Norway due to a contract share of 27%, in addition to already mentioned winter source earlier this year. In terms of overall biology in the quarter, it was reasonably good. And we saw, among other, improvement in production and biological feed commercial ratio year-over-year. Then the breakdown of the margins for the different regions in Norway. Margin wise, it was a mixed bag also this time around following the coast line. Region North [indiscernible] the margin winter with EUR 4.45 per kilo, on lowest cost, although it was adversely impacted by, as I already mentioned, winter source earlier this year, in addition to a less favorable site mix year-over-year with a higher proportion from production Area 7 this year. Harvest volumes are also down by approximately 20% year-over-year, which has impacted dilution of costs negatively. Region Mid achieved a margin of 3 -- sorry, EUR 4.03 per kilo. Realized cost was like for Region North, negatively impacted by winter source earlier this year, in addition to CMS-related costs in the quarter.

Region West on its part achieved a margin of EUR 3.83 per kilo in the quarter and improved by that its relative position year-over-year on substantially higher volumes, although harvest profile was far from optimal as we harvested very low volumes in April when the prices were the highest. In general, production and biology has been better for Region West so far this year compared with last year. Last one out, Region South achieved a soft margin of EUR 3.06 per kilo in the quarter, heavily impacted by advanced harvesting of our Sotra sites due to issues with source and gills. In addition, harvest volumes were also very low, which impacted dilution of costs. On the positive side, over and that, the biology and biological performance was reasonably good for Region South in the second quarter with, in particular, very good seawater growth. Then our Norwegian contract portfolio. Due to optimistic market view, for this year, we decided last fall to keep our contract share at the low end for Mowi Norway to capitalize on this. This strategy obviously hit the bull's eye in the second quarter, with our contract share of as low as 27% in a quarter with record high spot prices. To be prepared for the coming autumn season and higher seasonal supply, we have upped our contract volumes by 8,000 tonnes since last time we met at attractive terms. When it comes to next year, for competitive reasons, we must keep our cards close to the chest for now. So we have unfortunately not -- no comments to it today. Scotland, operational profit from Mowi Scotland was EUR 21 million in the quarter, down from EUR 30 million in the second quarter last year due to higher -- sorry, due to substantially lower volumes, 13,000 tonnes versus 19,000 tonnes. Margin was stable year-over-year, EUR 1.60 per kilo versus EUR 1.56 per kilo, due to higher cost.

As we have touched upon previously, our 2022 harvest in Scotland is heavily impacted by pure production on stocks growing from externally sourced eggs. We introduced in Scotland in absence of other options in the aftermath for the Norwegian export ban on eggs in 2019.

On a positive note, however, the last part of the stock is harvested out in the third quarter, so we expect to start to see improvements from that point onwards, which hopefully will materialize in better cost performance in the fourth quarter. As far as prices are concerned, price achievement for our Scottish fish is also significantly up year-over-year, although obviously held back by a contract share of 69% in the quarter. Mowi Chile, on its part, saw stable earnings and margins year-over-year in the quarter. Operational profit was EUR 15 million, similar to last year, whereas margin was EUR 1.07 per kilo, both on the low side, unfortunately, due to higher costs and a high contract share of 63%. In the case of the latter, it negatively impacted by low seasonal volumes. Year-over-year, volumes are however stable, 14,000 tonnes versus 15,000 tonnes.

In terms of cost, cost level has been increasing for our Chilean operation over the past 2 years as issues with SRS and Tenacibaculum have increased in magnitude. The vaccine that was introduced a few years back seems to have lost some efficacy, and it's something we are looking into as we speak. SRS and Tenacibaculum are both bacterial diseases, so this is double unfortunate as it leads to more use of antibiotics with the negative consequences that has.

To conclude Mowi Chile, on a positive note, both production and overall biological performance was better in the second quarter this year compared with the second quarter last year. Then farther north to Mowi Canada. Mowi Canada turned a profit of EUR 31 million in the quarter against a loss of EUR 7 million in the second quarter last year. This was driven by significantly higher prices, 100% spot exposure and lower cost. Volumes on the brand are somewhat down from 13,000 tonnes to 10,000 tonnes as we harvested a minimum in Canada East in the quarter. Canada West, a healthy margin of EUR 3.87 per kilo. And overall production and biological performance was good for Canada West in the quarter. In terms of the political situation for Canada West, we have not much more to report today than what is already known. But to recap a little, we have just received our 2 years renewal of our license in British Columbia to allow for what the Canadian government calls a transition plan for salmon farming in this area. What the content of this transition plan is and what we are transitioning to are yet to be decided. Next step now is public consultations, including consultations with First Nations and the industry. And even on our side, we continue to work unabashed with all levels of the Canadian government and First Nations to secure our future for sustainable and viable salmon farming in this area.

So much about Canada West. As far as Mowi Canada East is concerned, we have, as already said, harvested minimum in the quarter. Perhaps most important now, biology has been on a reasonably good control this summer. In particular, the life situation is much better this year than previous years, knock on wood. We also used the quarter value organizationally and strengthened the team, with, among other, our new highly skilled and experienced MD from Scotland, who knows both Mowi and our best practices and standards in depth. I think this will be a valuable and important addition to our operation in Atlantic Canada. In the end of the day, it's all about the people. Finally, a heads up on costs for Mowi Canada for the third quarter as we harvest from sites with a higher cost level than in the second quarter. Then it's time to address Mowi Ireland and Mowi Faroes, our 2 smallest farming entities. For the salmon of Irish region, we made an operational EBIT of EUR 9 million in the quarter on EUR 2.80 per kilo in margin on 3,300 tonnes harvest volumes. Please note that the market for the organic salmon is, to a large extent, a contract market. So Mowi Ireland did not benefit from the fantastic spot prices we saw in the second quarter. Biology was reasonably good in Mowi Ireland in the first half of the year. So cost was down accordingly in the second quarter. In the third quarter, however, we expect higher costs as we have faced issues with pancreas disease compounded by compromise gill pathology due to sou plant. In Faroes, operating EBIT came to EUR 10 million by means of an impressive margin EUR 5.78 per kilo, enabled by 100% spot exposure on 1,800 tonnes harvest volumes.

So much about Mowi Farming, then over to Mowi Consumer Products. Consumer products made an operational profit of EUR 18 million in the quarter, up from EUR 16 million last year, thanks to higher margins in absolute terms. Volumes were down from 58,000 tonnes product weight last year to 53,000 tonnes product weight this year, following the drop in farming volumes. And return on sales in total and for value-added only were approximately neutral year-over-year at 2.4% and 2.5% -- not neutral, but stable. The higher raw material prices we have seen -- have undoubtedly made it more challenging for Consumer Products in the short term. Having said that, I think we have handled the situation reasonably well so far. So a big thanks to the organization for this. In terms of overall demand, it was strong in more or less all markets in the second quarter. We also see good development in demand so far in the third quarter, although summer holiday season has slowed it somewhat down in some markets. But nothing out of the ordinary. This is typical seasonal patterns. Then our latest addition to the Mowi family, Mowi Feed. I said initially this morning, the second quarter is characterized by low season for Mowi Feed with all that entails. Operational EBIT was stable year-over-year, EUR 2 million in the second quarter this year versus EUR 3 million in the second quarter last year. Feed volumes are, on the other hand, up significantly from 96,000 tonnes to 111,000 tonnes, on good seawater growth for Mowi Farming, which also has led to record high feed volumes for our second quarter. Overall, feed production was satisfactory in the quarter. The same was the Feed performance. Then Kristian, the floor is all yours for walking us through the financials and fundamentals. Thank you so far.

[Kristian Ellingsen, executive]

Thank you very much, Ivan, and good morning to everybody. I hope everybody is doing well. As usual, we start with the statement of profit and loss where the top line shows a record high revenue for both the second quarter and also for the first half of the year of 2022.

As we see from the table here, Q2 revenue was EUR 1.2 billion, up 23% from Q2 last year on higher prices, while sold volumes were slightly down compared with the second quarter last year. This was connected with lower harvest volumes in Scotland and Canada. When it comes to operational EBIT of EUR 320 million, that translates into an impressive return on capital employed of as much as 31.6% annualized in the second quarter and the underlying earnings per share of EUR 0.46. All of these figures are connected and are 2.3 to 2.4x the figure last year. Net cash flow per share includes an effect of increased working capital, which we will take a look at in the cash flow statement. Year-to-date, operational EBIT of EUR 527 million, that's higher than the full year of 2021 and also record high. And when it comes to the figures between operational EBIT and IFRS financial EBIT, we see that most of them cancel out, except the net fair value adjustment of biomass of EUR 140 million due to improved prices. Income from associated companies includes a very strong operational result from Nova Sea of EUR 4.60 per kilo. So we congratulate them on a good quarter this time around. When it comes to net financial items, they were as expected and minor in total. Then we move on to the balance sheet. The financial position is strong, with a equity share of 52%. Net interest-bearing debt, still below the long-term target of EUR 1.4 billion. Noncurrent assets, you see here in the first row, that's stable from year-end 2021 while there is some movement on current assets and current liabilities, i.e., working capital items. And as reflected here in the cash flow statement on this slide, we see that there is an increase in the net working capital items of EUR 101 million in the second quarter. That's related to [indiscernible], receivables on higher prices and feed inventory for preparation for the peak season for feed demand. As Ivan just showed us, we saw that produced volumes were higher than sold volumes in the Feed segment. We also see that tax payments increased from last year on higher earnings, and we see that we paid out almost EUR 100 million in dividend in the quarter. That's the NOK 1.95 based on the Q1 results. When it comes to the cash flow guidance for the year of 2022, we have lifted the estimated working capital tie-up for the year from EUR 90 million to EUR 200 million. This is due to higher salmon prices leading to increased accounts receivable. Cost inflation increases the biomass tie-up, and -- especially related to feed inflation.

Our cost-saving initiatives and activities, they continue unabated to at least partly offset some of this pressure. But of course, feed prices have increased now for the last 1.5 years. And we all know that feed is the single most important input factor in our salmon that we produce. We see a recent price decline on raw material commodities, and this might indicate an inflection point. We expect growth across the value chain with continued volume growth, and this ties up working capital. The other items are unchanged, as we see, from the previous time we met. CapEx at record high, EUR 300 million, where the freshwater investments represents the largest individual part, including the ongoing postsmolt program in Norway. Interest paid, EUR 35 million. Taxes at EUR 130 million. And the second quarter, a dividend of NOK 2.3 per share, which is payable in the third quarter. This slide gives an overview of our financing. And there are no changes here from the first quarter, and we see that no debt is maturing until June 2023. Then over to supply and demand fundamentals. And of course, with the best quarter financially ever, market fundamentals have played an important role. And we see from this table here that global supply declined in the quarter. The global supplier from the salmon producing regions was down by 3%, as reflected here. But this is only part of the story because we remember that last year, there was a release of 26,000 tonnes frozen inventory in Chile, built up during the pandemic year of 2020. And when factoring in this, the figure for Americas goes from plus 9% to minus 5%. And there was, in fact, a global supply contraction of 7%, shedding further light on the record high prices also in Americas in the quarter. Supply from Norway decreased 5% on lower opening biomass. This was as expected. Average harvest weights were quite stable, and so we're closing biomass in Norway for the market. Also in Scotland, supply decreased, as expected, on lower opening biomass and lower growth. In Chile, supply was higher than expected from the salmon producing companies. A higher number of fish was harvested as biological challenges caused some advanced harvesting. And the record high prices might also have accelerated some harvest plants in Chile. And here on this table, we see the consumption of salmon. And there, we see the 7% drop reflected here in the numbers. Nevertheless, the value of salmon consumed reached a new record high level in the second quarter. There was a strong underlying growth of salmon demand across all markets. The Food Service segment saw further reopenings in Europe and in the U.S. In Europe, there were good consumption levels in retail in the quarter, but of course, somewhat impacted by food service recovery and less volumes available. In the U.S., demand was strong in the quarter with continued focus on prepacked salmon and positive effects of e-commerce. In Asia, we see that consumption decreased by 19% on less supply and challenging logistics with the reduced air cargo capacity, and thereby high airfreight costs.

When it comes to prices, they were record high. Average spot price for Norwegian salmon reached EUR 10.6 per kilo in the quarter, up 72% year-on-year and reached a weekly peak of EUR 12.8 per kilo and record high prices also in Americas. Prices at these levels have never been experienced before and shows the potential to continue to increase the value of the salmon category, given that supply continues to grow.

We believe that the potential for salmon is fantastic. Consumption is still relatively low compared with other proteins. Salmon is 1% of land-based proteins in the world. Average salmon consumption in Europe, that's only once a month on average. Product features are excellent, and so is the alignment with important global mega trends. So we expect salmon to continue to stand out versus other proteins. Demand growth, strong in the quarter. And during the past 10 years, the annual growth rate for demand has been impressive, 9.1%.

And so much for demand. Supply, of course, played an important role. Supply reduction of 7% also contributed to the tight salmon market. And in the markets, we have recently seen that prices have adjusted somewhat down in Europe on higher seasonal supply. And summertime in Europe, a very hot summer. In Americas, higher seasonal supply. And we see that the Canadian price is also somewhat impacted by the record high sockeye wild catch. When it comes to industry supply growth, volumes in the second half of 2022 is expected to grow between minus 1% to plus 3%, giving a total for 2022 of minus 1%. So in the next 12 months, supply growth is estimated to a modest 2% on a global level, and this suggests a tight market.

When it comes to our own volume guidance, that's maintained at 460,000 tonnes for the year of 2022. So with that, Ivan, I leave the word to you to go through the outlook statement.

[Ivan Vindheim, executive]

Thank you for that, Kristian. Much appreciate. Then it's time to conclude with some closing remarks before we wrap it all up with a Q&A session hosted by our IRO, Kim Dosvig. I said a few times already, we are optimistic about the market prospects. And the supply side looks constrained in the next 12 months, with our global supply growth of as little as 2% according to Kontali. We also have a fantastic first half year behind us price-wise, which really demonstrates how strong the demand for the salmon is, in particular, when it's supply shortage. So all the higher seasonal volumes obviously have an impact of price achievement in the second half of the year compared with the first half of the year. We still believe in good prices going forward. And through Mowi's diverse and integrated value chain and organizational agility, we think we are in a great position to capitalize on this. In terms of cost and inflation, what we all were witnessed to, as we speak, use, of course, for concern to all sundry. There is no doubt about that. And hopefully, the recent decline in several commodity prices, at least singles, that we have reached some kind of a peak for now. Time will show. Meanwhile, we believe the salmon will continue to stand out versus other animal protein sources due to its great product features, its low feed conversion ratio, low energy use, and not to mention its superior sustainability credentials. In terms of harvest volume guidance for 2022, we have, as Kristian just showed us, maintained it at 460,000 tonnes. So no changes there.

And finally, the Board of Directors has declared a quarterly dividend of NOK 2.30 per share, equivalent to 50% of underlying earnings per share. Then I think we are ready for the Q&A session, Kim. So if Kristian please can join me on the stage.

[Stein Aukner, analyst]

Alex Aukner from DNB. So two questions. The first, are you seeing some switching between the various proteins given the price fluctuations? And the second question is on the cost side. In Norway, you don't really seem to give any guidance, and that normally means flat costs. Is that correct for Q3? Is the increase in feed cost basically canceled out by the higher volumes?

[Kim Dosvig, executive]

Thank you, Alexander. Maybe we should start with the last question, costs, Kristian.

[Kristian Ellingsen, executive]

Yes. So as we see it now, we see no indications that costs will increase from the level we are at in the second quarter to the third and the fourth quarter for the group. So that's the information we have at this point. So no cost increases on a blended level.

[Stein Aukner, analyst]

Okay. Then just a quick follow-up on that. Based on the outlook statement, you say you indicate an inflection point in terms of the price increases. So how long does it take for those prices to feed through your P&L?

[Kristian Ellingsen, executive]

Yes. So there is, of course, the fact that we buy raw materials to be covered in the near term. So we have operational security to have the feed we need. And then, of course, we buy for the coming months. And the raw materials, we purchase and feed. Then they will, of course, be less expensive over time given a reduction in these commodity prices. But it takes some time to -- yes, to, of course, first purchase those materials. And then it's part of the growth cycle for the summer. So it takes some time before it kicks into the P&L.

But yes, cash-wise, it has an immediate effect and then it takes some time before we see the cost decrease. But the point is that we think this latest reduction in the raw material commodities give some hope that we have seen the top at least.

[Stein Aukner, analyst]

And then the first question, Ivan?

[Ivan Vindheim, executive]

So far, the demand has been good. In the first half, we are obviously fantastic. Summer holiday season always plays a role in this part of the year. But so no, we haven't seen any switch to other proteins so far. So I think we are good, knock on wood.

[Carl-Emil Johannessen, analyst]

Carl-Emil Johannessen, Pareto. Two questions also here. First, on contracts. You have, as you say, been entering to some more contracts for the second half of this year. Is this something that you have done lately? And is it possible to -- or should we assume that the prices have been lifted from where the contracts have been earlier or, let's say, in the countries that you entered into last year? And second one, on dividend, maybe not you decide that. But previous quarters, you have been paying an extraordinary dividend because your debt level have been lower than, let's say, the guiding. No, you don't. Is this related to the working capital buildup? Or any other things that is leading to, let's say, less dividend than previous quarters in terms of percentage of EPS?

[Ivan Vindheim, executive]

Thank you, Carl-Emil. So we start with the first question in terms of contract volumes for Norway for the second half of the year. As we said under -- or during the presentation, we have opted by 6 -- 8,000 tonnes and at very different prices then for the rest of the portfolio. So we have taken advantage of a very good market to -- for those volumes, and yes. So in hindsight, the only thing I can say is that this contract market is unfortunately slim. So the limitation is actually how much you can do. So I think that will be a good business for us. In terms of dividend, then extraordinary dividend. So what the Board has committed to is the ordinary dividend, which is 50% of underlying earnings per share. So that happens by default, and that's something very special happens like the pandemic. In terms of the extraordinary dividend, that's to the Board's discretion. And it's a long list of assessment they do. And we cannot expect the extraordinary dividend every quarter. This is just an instrument to distribute surplus cash, right? So in some quarters, we have a break. I don't think you shall read so much into it, really. Yes.

[Kim Dosvig, executive]

Okay. Then we have one question from the web. Christian Nordby at Kepler is asking about demand. Do you see any difference in demand patterns between the 2 major regions, EU and U.S., given the overall strong inflationary pressure on consumers.

[Ivan Vindheim, executive]

Shall I start?

[Kristian Ellingsen, executive]

Yes.

[Ivan Vindheim, executive]

Yes. So it's very early days, really. And so far, as you have seen from the prices, et cetera, the demand has been -- was fantastic in the first half of the year. So -- and who knows what to come. But at least so far, as I said to Carl-Emil, we are good. And yes, going forward, normally, the American market is stronger than the European market. But I guess this depends on the slowdown and how it plays out. But we haven't seen any kind of weakness so far. So again, a little bit repetitive, I think they're good. So it's really hard to answer that question. Mutual so far.

[Kristian Ellingsen, executive]

And I guess we can also add that, historically, salmon demand has shown resilience also in time. Should there be more of a slowdown in the economy, you see that the demand value for salmon increased both in 2008, 2009, 2010. That was the last major crisis, financial crisis. I mentioned during my presentation some of the factors we think will, in any case, support salmon demand. It is only 1% of the proteins. It is relatively infrequently bought. So it doesn't represent a major part of household spending.

Also, we have the mega trends supporting this. People are more preoccupied with health than they were before, also before the pandemic. We see these good product features and, of course, also the sustainability credentials. So we also see, of course, any slowdown. It will also probably impact the airfreight, which is current at a very high level in certain markets like Asia, where we've seen a reduction in consumption in this quarter. And that, of course, could also be supported for demand there. So there are several factors, I believe, that in any case will support salmon on a global level.

[Ivan Vindheim, executive]

And that's demand side. And initial also are the supply side, which is very constrained, right? So I think we will work ourselves through this in good shape also this time around.

[Kim Dosvig, executive]

Okay. No further questions from the web. So that concludes the Q&A.

[Ivan Vindheim, executive]

Right. Then it only remains for me to thank everyone for the attention. We hope to see you back in November at our third quarter release. Meanwhile, take care, and have a great day ahead. Thank you.