The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Sven Weier - UBS Equities - Analyst
: Yes. Good afternoon. Can you hear me?
Arjen Berends - Wartsila Oyj Abp - Chief Financial Officer, Executive Vice President, Member of the Board of Management
Yes.
Question: Sven Weier - UBS Equities - Analyst
: Okay. But it's not like a bigger share of the backlog currently? I guess it has come down over the last years now.
Arjen Berends - Wartsila Oyj Abp - Chief Financial Officer, Executive Vice President, Member of the Board of Management
No, then of course, it sits -- cruise building as such has let's just say, come down. So I think the exposure is much less than we would have had a
couple of years ago. Besides that, if something really happens, we have of course down payments, we have payment security arrangements in
place typically for all the contracts. And if the delivery is not taken -- these are not super tailored engines, if you would sell a propeller, which is a
build-to-order basically then it's a different story. But an engine, we potentially can reuse. And I think risk profile at least I don't consider it too high
at this point.
Question: Sven Weier - UBS Equities - Analyst
: Good. Thanks for this. The other question I had was just if you had any view from the political fallout in Brussels. I mean, Europe was quite a big
driver on fuel taxes, green agenda. I mean I know it's a bit early, maybe, but which you think that's a bit of a setback for the decarbonization agenda
at least as far as Europe is concerned.
Arjen Berends - Wartsila Oyj Abp - Chief Financial Officer, Executive Vice President, Member of the Board of Management
No, I don't think so. This climate was just approved earlier this week where -- when Austria swapped their opinion basically. So at least from what
we know today, and this is -- like you said, it's a bit early, but I would say it's probably not changing that dramatically. But of course, the details
already earlier, but now definitely need to be worked out and what exactly comes then through in details, difficult to say.
But I think many things will continue. I think many trains have been put in motion. And to stop them, I think, will also be very difficult and cumbersome.
So I do not expect too much changes with what I know today.
Question: Sven Weier - UBS Equities - Analyst
: Yeah. Thanks a lot for taking the follow-up question. I was going to follow up on the yard capacity comment you made. I mean if you look on the
merchant side, one way of mitigation was the slot conversions, right, from container vessels, like product tankers, for example. I was just wondering
if you see anything whether there is more limitations on that now that container rates are starting to go back up, the willingness maybe of
containership orders to convert? Do you have any view on that -- this one?
Arjen Berends - Wartsila Oyj Abp - Chief Financial Officer, Executive Vice President, Member of the Board of Management
To be honest, Sven, I have not heard at least through our channels at all that there is a big conversion going on orders for containers at yard that
are being converted, at least I'm not aware of any real case. People might have been thinking about it, but I have not heard of any real case, frankly
speaking. That doesn't mean that it doesn't exist, but at least I'm not aware of it and moreover has also not flagged this in bond conversations, for
example.
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Question: Sven Weier - UBS Equities - Analyst
: I think sometimes also on the option side, right, when it's not the real order yet, but some of the options you keep that these are being converted.
Arjen Berends - Wartsila Oyj Abp - Chief Financial Officer, Executive Vice President, Member of the Board of Management
Yes, okay. Of course, that is -- like the word said, it's an option to buy or not to buy. And of course, if container operators would decide, okay, I don't
execute on my option. Of course, you free up capacity. But I have not heard of any big size events like that. If it would be really big scale happening,
I think we would have, for sure, heard about it.
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