Specialist
Former Managing Director at FRS/Iberia/Maroc
Agenda
- Authority requirements for ferry lanes and overcapacity in Spanish Ferries
- Route pricing across cargo and passenger
- Potential rebalancing of demand and supply
- Naviera and Trasmediterránea merger synergies and potential for asset sale
- Naviera asset outline and scrubber installation requirements
Questions
1.
What are your views on authority requirements on Spanish ferry routes and what that has really meant for capacity in the space?
2.
What are the requirements for operating on the Spanish ferry routes, from a regulatory perspective?
3.
How does the peak demand for capacity compare to average and low-season demand?
4.
How would the minimum rotations for the baseline of the year typically compare to the minimum rotations for the peak season?
5.
How much revenue does the Strait of Gibraltar contribute for Naviera?
6.
You say there are big overcapacity issues in the Strait of Gibraltar, what about the Canary Islands?
7.
There are, but not as severe, given that there’s not so much seasonal fluctuation?
8.
When you mentioned the 60-70% peak demand compared to average demand, is that specifically for the Strait of Gibraltar?
9.
What are the seasonal fluctuations on the Balearic routes and why are people using these routes?
10.
What would you say is the rough breakdown between local workers and tourism for the Canary Islands?
11.
What is the rough revenue contribution of the subsidies vs ticket sales from customers for Naviera?
12.
If assessing how the overcapacity in the subsidised routes impacts the non-subsidised routes, do the ferries in low season typically move from subsidised to non-subsidised? How do the two dynamics work?
13.
How would you describe Naviera's overcapacity? How many more ships are operating on the routes than necessary in the peak seasons?
14.
How seasonal is the Denmark Rødby-Puttgarden route?
15.
How would you compare margins for the businesses operating in the Strait of Gibraltar and Denmark areas? How does using 4-4.5 times more vessels impact the margins?
16.
What options are there for demand and supply rebalancing on the subsidised and non-subsidised routes for Naviera and competitors Spain?
17.
To what extent do the authorities want to keep Naviera afloat? Do you think authorities would reduce requirements on the lines if Naviera starts to struggle?
18.
What is the contribution difference between the cargo and the passenger, roughly for Naviera’s revenue?
19.
For Naviera ignoring Trasmediterránea , what is causing passenger prices to increase by 7.5% vs decreased freight prices?
20.
Looking at the Naviera and Trasmed merger, EUR 45m in synergies is outlined for the rest of 2019 and EUR 24m has been achieved. What operational costs can be trimmed?
21.
What do you think would be a more realistic amount of synergies to drive? It has already achieved EUR 24m, has this surpassed your expectations or been roughly in line?
22.
How would you define a deep integration for Naviera and Trasmed vs a halfway integration?
23.
Presumably the procurement on the bunkering is a relatively easy synergy to drive and I expect this would probably be done by now. In terms of negotiating with bunkering companies, what saving could typically be achieved if you double scale on that line item?
24.
What is your rough ballpark for crew adoption with improved utilisation, what is actually entailed if you still work the same number of routes? Are people on standby, waiting to be assigned to a different ship?
25.
Presumably the captains and crew members live in the ports of the routes they work for. How do you actually drive these synergies when the routes are different, is it possible?
26.
How does maintenance work and how difficult is that to drive? Do you think this is the least likely to happen, given the management team’s experience?
27.
Where are your key concerns and which line item on the Naviera-Trasmed merger do you think is most unlikely to come through?
28.
What will be the focus, making Trasmed profitable vs driving synergies on the merger? Do you think the management team have the capability to do both at once?
29.
Compared to competitors, how is Naviera’s strategy playing out in the number of scrubbers installed? What is the potential to pass through that scrubber installation cost in the higher prices – when might that occur? Compared to competitors who are not installing so much, will they try and pass through higher high-sulphur fuel oil costs?
30.
Do you think the scrubber cost will eventually be borne by the passenger? Or will the competitors try to keep prices pretty low and not pass on the low-sulphur fuel oil costs or the scrubber costs to customers?
31.
What do you expect for Naviera over the rest of 2019?
32.
What is the potential of route consolidation and who would be the likely buyers of ships?
