BRF SA (BRFS) 2003 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. If you should require assistance during the call, please press the star key followed by zero. As a reminder, this conference is being recorded. I would now like to turn the conference over to Miss. Medina

of Thomson Financial. Please go ahead, madam.

Good morning ladies and gentlemen, and welcome to Sadia's conference call to discuss 2003 results. I'd like to mention that a slide presentation has also been made available on the company's Web site at www.sadia.com,

financial reports during this call. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Actual performance could differ materially from that anticipated in any forward-looking comments as of results, of macro economic conditions, market risks, and other factors. With us today in Sao Paulo this afternoon is Mr. Luiz Murat, Chief Financial Officer. Mr. Murat will comment on the company's fourth quarter 2003 results. Afterwards he will be available for a question and answer session. It is now my pleasure to turn the call over to him. Mr. Murat, you may now begin.

Thank you very much for your tendency. It is seen in chart number two. You can see the consumers grow of Sadia gross operational revenue. From exporting less than 18% in '97, we have reached 45% of total export sales, and our gross operational revenue was able to grow about 25% in 2002 up to 2003. On chart number three, we have a resume of our most important numbers. Again, a 25% increase of gross operational revenue, our gross margin that is around 30% in the year, around 31% in the fourth quarter. A bit -- it is much better now, 52% higher 2003 against 2002. Same thing had happened on fourth quarter against 2002, with a good 143%.

Net income during the year was BRL446m, of which BRL155 was generated on the fourth quarter. This net margin up 8.4% in the year is much higher than the 5.5% of 2002. Please note that net margin in fourth quarter was even better; they are around 10% from a 5.5% on the same quarter on 2002. Cash generation translated in the EBITDA can be seen -- we had reached a record of BRL648m, up 40% against last year. That generated a 12.3% EBITDA margin. On the last quarter of the year, EBITDA margin was even better, 13.1% as a result of the product mix that were selling during the feast season. Important to notice are the last two lines. Net debt to equity. Now it is below 21% against 71% last year and net debt to EBITDA is now only 0.5% when it was 1.9% in 2002.

In chart number four, on that you can see the progress that we have been making since our strategic change back in '97. At that time, we were generally 45% of our revenues in Processed products, today it is 48%. The second best setter was Whole Poultry; at that time 20%, today our second most

products are the Poultry Cuts. So, among Poultry Cuts and Processed products, Sadia is having roughly 70% of its output -- each time making more value added products. The same condition had followed from 2002 to 2003. Now to please on chart five -- that's processed products from 47% went up to 48%. And Poultry Cuts from 20% to 22%. Well, I think a very good achievement; it can be seen on chart number six. Please note back in '98, 53% of our sales on the domestic market was done with processed products, nowadays it is around 79%. This is a continuous process, as you can see in chart number seven. Even from 2002 to 2003, we increased our processed products into domestic markets.

Please note on chart number eight. Back in '98, 48% of the sales were done with whole poultry. Right now, 42% of poultry cuts processed products are 11%. So, again in between processed products and poultry cuts, we are selling 53% of our sales, much better product mix. The same pattern

on chart nine, where we had enhanced our product portfolio on exports bringing poultry cuts from 40% of the total to 42% and processed products from 10% to 11% of the total.

Chart number 10 please. Note that looking at back in '98, 47% of our sales were done to the Middle East, mainly Saudi Arabia, Kuwait and Emirates. Today, 35% of our sales go to

countries, 24% to the Middle East. Eurasia and mainly Russia had become the third largest destination for exports.

Chart number 11 shows that the same pattern that started in '98 had also improved from 2002 to 2003. Please note that Europe that represented 30% in 2002, is 35% today. But in any case, we had fairly big increase on sales from BRL 2b to BRL 2.7b year-against-year in the external market in exports.

Let's move to chart number 12. Please look at the bottom line we sold 10.2% more tons in fourth quarter 2003 than the previous year. The biggest change was in the rate of exports and on that segment we had a very impressive growth of 68% of processed products exported in tons. Pay attention to the domestic markets reduction in tons sold. Please keep in mind that Brazilian economy was going very slow, mainly, income in the big cities dropped 13% year-against-year. Well, even with 13% drop in the income in the big cities, Sadia was able to keep growing.

In the processed products we went up 2.4%. Well, returning to the bottom line, we increased our tons sold 10.2% quarter-against-quarter. Next chart. Form number 13, such increase on tons generated a 25% increase in money. Our reserve of

can be seen in the next one, which is chart 14. So again, with that 10% growing volumes in total sales we increased 25% money wise, 28% in terms of export, 37% so on and so forth. Please note that the 2.4% increase in ton sold in the domestic markets for processed products generated 24% in revenues, resulted from two factors, much better product mix and increase in prices. We were able to better launch some price increases, passing along huge costs, which heated us at the end of 2002 and the first quarter of 2003. Remember last part of 2002, when dollar reached more than 350, a lot of packaging costs went up and they were pressing up our cost structure for a long time.

It took us a long of ton sold year against year. It has an increase of 2% year against year, again 7% in rough. I'm not going to go ahead on all the corporation, but go to chart 17 over there. Once again, you have with same explanation for the quarter. So, although we had reduced volumes sold in the domestic market the reduction of 6.4 was resulting from increase of processed products and reduction of poultry and pork, which on the other side were exported. So, the reduction on sales of poultry and pork products in Brazillia markets was resulting from greater exports. Lets move to chart number 18 please. Please note, that a processed product average price in the domestic market went up 32%, poultry 23%, and pork around 10%. Again, we repeat the comment we made just before. Sadia had suffered some major increases in some of our costs. Mainly plastic resins and soya. For example, plastic resins, which generated plastic packaging for us, we went up 60% in 2002 and we received an average 55% extra increasing costs during 2003.

In Soya, after a 78% increase in prices in 2002, we received another 21% increase in costs in 2003 and those are very important units of our costs. In the international average prices, please see chart number 19; please bear in mind that all those prices are in Reals. So, you must consider that average dollar during the fourth quarter 2003 against 2002 was down 21%. Well the drop of 54% on the average price on the export market is mainly resultant from a very different product mix on exports. We increased a lot of exports of some products,

products like bolognaise and margarines, which have a much lower price than the products that we were exporting before. As a consequence, the average price dropped so much. Well, in poultry and pork, products for exports, international prices in dollar were strong and product mix also was richer. So, besides a drop of 21% in dollars, we were able to grow 12% in poultry and 27% in pork average prices.

Please refer to slide number 20. During last year, as forecasted, we saw a drop in grain prices at a record jump last year. Well, we are just about to see a record crop in Brazil for both corn and Soya and for that reason, prices have been dropping a little bit for the last weeks. We are not forecasting any major change on corn prices in Brazil in the short-term. Also, we are just about to start harvesting. So, the entrance of our new crop normally presses the prices of grains down. We don't have still a totally clear reason of what is going to happen during the whole year. Consumption of grains are

, which, what is going to happen, which they also provision worldwide. After the Asian influenza, prices, we don't know yet how much the market is going to be reducing or increasing its demand due to such illness. In any case, in terms of Brazil, we are harvesting a huge crop and worldwide inventories are kind of balanced at this stage.

The slide number 21, you can see that when you convert Brazilian prices for a bag of corn and for a bag of Soya into dollars, the present value for corn is in line with historically number. So, back in December, average prices were around $6 per bag, while historical number is $5.85. That's not true in the Soya, where historical numbers are around $11.5, late six months Soya prices had been in the range of $16, mainly due to the China demand, which had been pressing Chicago, Chicago's prices. In any case, Brazil is harvesting a harvest crop and if states do plant and harvest another crop, we see the trend only for prices to go down not to go up.

Next slide 22, you'll see that Brazil, that is Sadia is the first company in all the segments where we are operating today. In frozen products, with 45% market share, refrigerated process products with 30%, margarine, chicken, turkey and pork also first ones. Very impressive, we gained leadership in the margarine business, after getting in this business something like 13 years ago. Also, it's important to note that chicken, turkey and pork are not considered anymore a

chicken, turkey and pork are raw materials for further processing as frozen or refrigerated. So, for the time being, Sadia will be not investing very much into any more production as it was in the past but rather into distribution and services.

Slide number 23, please. During the years, 98-2003, Sadia was able to launch 61 products average, per year more than one per week, and due to other worse economic situations in Brazil last year, weak demand, we decided not to be so aggressive. So, we launched only 53 products, again once a week. Most of those products are in our Sadia Lite in our ice cream line and in our pizza businesses. Capital expenditure, as I had already forecasted in our last conversation, Sadia kept the pace of milking its assets as much as we can. So, we are making our units much more productive and in such a way we are saving to make investments. Although not making heavy investments, we have been able to continuously improving our sales, so more volumes, part of such production is already buying parts and components from third parties in the market. That is something that Sadia is doing and will be doing

in the future.

Some of these can be seen as in the agreements we just made with, for example

that's just bought one of

plants and it's producing 100% for us. And meanwhile another company in southern Brazil, where one of its plant is 100% producing for Sadia and our quality standards supervising in our brand. Well, Sadia has been investing roughly around BRL 120m only, which is roughly the same amount of depreciation. That is another reason that helps the increase in our EBITDA and our profitability. For year 2004, we are forecasting investing something like BRL 115m, which is just a little bit higher than our depreciation for the year. 50% of such money is going to invested into the bottleneck in launching of new products and 50% is replacement of old equipment. We remind every time that we replace an old equipment, and we need to do it frequently in our industry. We always have a little bit more productivity and normally less maintenance, so better production. In chart number 25, as a consequence of better profitability and better run off of our assets, successes in our sales and so

we had reached a record BRL 649m of EBITDA, 40% more than what we had obtained last year 2002. Please move to chart number 26.

Also, as a result of all the improvements we made in the company, we had reached already 30% return to equity now and what is very important, we had been doing this in a continuous base since 1999 from 8% to 18%. In 2002 we obtained a 30% return to equity. Net income also a continuous development of profitability in the company, we had reached a record BRL 447m this year, something like 91% more than the previous. Please go to chart number 28. Okay, over there you are going to see in the left column, gross operating revenue went up 25%. We notice that gross profit is 29.4% this year against 30.7% last year. You will see that sales expenses went up 6.9%, and administrative expense is 6%, both much less than the 24.9% increase on sales. So, we're able to generate more revenues for the company without having the same percentage of expenditures in sales, and administratives. Other operational results, there's a change of 52% year-against-year.

Cash generation. No, before cash generation, now let me talk about financial results. When you talk about financial result in Sadia, you must consider that true financials plus the resultant from equity pick up. Don't forget, most of our equity pick up is a result from our operations offshore. A lot of finance operations are done in our trading companies, offshore Brazil. So, we think it's good now to compare summing the two numbers. So, financial results of equity pickup -- that was an expense of BRL 95m, realized in 2002 turns into an income of BRL 85m realized now in 2003. How we are able to do it. Well, towards each reduction of financial debt, reduction of financial costs, and a very good managing of the exchange rate variation over our inventories offshore.

Income tax, our income before taxation had reached a record 576m. So, up 134% higher than last year. Also we are obliged this year to make a big deduction due to income, and also on -- as to pension of employees and taxes. So, final number is 446m as I mentioned before. Well, back last year I had mentioned to your that in 2002, we had received a -- we won a lawsuit against our government, due to some tax which were paid some years ago. As a result of such lawsuit, we're able to make a credit in our costs, because in the previous year we had a tax owned as costs. So, it was interfering in the gross margin. So now, for the purpose of the right comparison and to be fair with the 2003 operational results, we made an adjustment.

So, please move to chart number 29. What is that? On that chart we only adjusted 78.2m of tax goal IPI. Again, a lawsuit that we won against our government, which we had credit as noncost, back in 2001. We turn it back to have the same base of operations to 2003. As a consequence, gross profit 2003 turned to be better than 2002, and not the opposite as you can see there. Please chart number 29, gross profit is 29.4% this year against 28% now. Also, these adjustments interfere with EBITDA. Note that now EBITDA is 12.3% against 9% the previous year, and if you don't look for it, but if you look for the nonadjusted number, it was 10.9% before. So, the adjustments in our point of view is the fair way for you to compare and to use to better qualify the good results of Sadia.

Please move to chart number 30. Over there, you will see that our total debt from BRL 2.2b went down to BRL 2.9b. Our financial investments went up from BRL 2.3b to BRL 2.6b. So, our net debt, today is only 307 against 192 the previous year. As a consequence, net debt to equity is now only 20.7% against 70.7% last year and net debt to EBITDA is only 0.5% against 1.9%. Very important to say, this year, we have reduced the net financial debt. We also were able to get all of our net debt today in Reals and third, we have no net debt due before 2007. So, payments of net debt only will be done in a very long-term. Please refer to chart 31. See that net debt is -- our net debt to equity is in a continuous dropping from 92% in 2000, up to 21% now. Please next chart 32 see that the same pattern occurred in net debt to EBITDA, from 3.9 times in 2000, it's only 0.5 times now in December.

Last chart number 33 shows back field on the left side, back in January 2000, our shares were traded at BRL 1.48, while our book value at that time was BRL 1.25. So, our shares were traded at 118% of book. Well, our shares have stayed back sometime during 2001 lower than BRL 1.05, and in December had reached BRL 3.98, you know, that today is more than that. In December, this BRL 3.98 against BRL 2.19 of book value brings stock price to book value for 182%. Chart number 34, Sadia remains the most traded share in the Brazilian market. We are presented everyday in the stock market. Everyday, those are traded with our shares and 64% of the volumes are traded in Sadia shares. Last but not least, Sadia is completing 60 years this year, 60 years of continuous growth. We had reached a level of very good profitability with 34,000 employees, very motivated on generation of value for the shareholders, with a very impressive growth into sales, domestic and international, launching new products and new concepts in

manner.

Sadia is forecasting year of 2004 much better than we had had in 2003. We had, in our point of view, we had reached the bottom of the economic cycle on the second quarter 2003, where demand was absolutely bad. During the whole year again of 2003, disposable income in the big cities went down 13%. Even with that situation, Sadia was able to grow in Brazil and we are convinced that we are prepared right now to have a growth in the domestic market, twice the number that will be obtained with GDP. So, if Brazilian economy follow our government forecast of growing between 3% and 4% for the year, very likely Sadia will be growing 6% to 8%.

In the internal market. Let me talk internationally. Internationally, we are following with a greater passion the Asian crisis of Influenza, which is already making big changes in the industry. Let me give an example. Prices for chicken legs in Japan, they went from 1500 in December to 2500 this week, that's a typical supply and demand crisis. Prices in Europe are also starting to go up. It moved something like 30% on the last seven weeks and we forecast that we will be having strong chicken prices for this year. Nobody knows the outcome of this crisis, but all technicians are not expecting that we are going to have

in less than three to four months. At least three or four months, we are never going to have the return of such countries that are producing for the international market. Sadia is giving the best -- as patient as possible to its long-term customers in the international market and trying to supply the lack of production that they were having from other suppliers worldwide. And Sadia also has a very, very liquid cash position today. We are looking for some investment opportunities and we already know what we are not going to do. We know for example that we are not going to be making any Greenfield investment.

We know that we are not going to be making hardware investments offshore Brazil, with production sites anyplace in Brazil. We know that we are not going to be investing into verticalization of the process. We are not going to be investing into buying a

just to save money in transporting chicken to Europe, we are not going to be making packaging companies to save on our packagings, because we believe that we need to be focused in our business. Sadia's business is frozen in refrigerated protein, what a technology. Distribution and services are competitive advantages. These are our most important points of attention. I think those are the comments for now. We are now ready for questions. Thank you.

Ladies and gentlemen. We will now begin the question and answer session. If you have a question, please press the star key followed by the one key on your touch-tone phone now. If at any time you would like to remove yourself from the questioning queue, press the pound key. Once again, if you would like to pose a question, please press the star key followed by the one key on your touch-tone phone now. Our first question comes from Mr. Gustavo

with Banc of

.

Hi Murat, good afternoon. Actually I have a couple of questions. First of them is regarding operating expenses. We saw some improvements, actually some increase in the fourth quarter when compared to the third quarter and I just would like to know if this is what we should assume as a percentage of net revenues for 2004? Or you think there is some room for reduction going into next year, actually into this year? And my other question would be regarding like you said, we already see higher international prices for chicken given the problems in Asia, and on the other hand, we see higher

prices in the beginning year as compared to the previous quarter. So, I would like to see your opinion if it is reasonable to assume say flat gross margins when compared to the last two quarters around 30%, do you think one thing will compensate the other or you think that we will be

higher pressure on the margins given the higher freight price in the short-term?

Thank you.

Thank you very much and your question is very well placed. We are forecasting a compensation. We believe that the ups are kind of compensation

will be the downs. You're correct on the ups, you are correct that prices are going better, you are correct that volumes are going to go better. But you're also correct that in the cost side, not some grains had increased, mini soya had increased, but we are going to have some impact on some other raw materials. For example, the plastic sector is in tremendous pressure. You know that petroleum prices are in very high level again, and unfortunately we have another new

, and in a company that buys product from a lot of producers and from a lot of people that have services to us, their services are directly hidden by almost 9% increase into piece coffins and no doubt we are going to have to observe, we're going to have to discuss but observe part of those increase. I think you are correct. For the time being, a good bet would be, let us freeze the margin the way they are. If we obtain that, we're going to be in very good shape.

Okay. Thank you. In regards to operating expenses as a percentage of net revenues, you think this fourth quarter would be a good

for the year 2004?

That's another good question. What is happening is that we have been able to increase our volumes of sales. We doubt the growth on the same pace on our other expenses mainly, save expenses. And once again we believe there is room for that possibility. We are receiving extra volumes, so we're going to generate extra sales, with production coming from

. These companies, for example, they are going to be supplying something like 13% of the total chicken that they are going to be selling in the market. So, this is going to generate an extra revenue without pressure in our fish costs in using the same sales structure. So, you are with a good guess. Thank you.

Thank you.

Ladies and gentlemen. As a reminder, if you like to pose a question, please press the star key followed by the one key on your touchtone phone now. Again, to make a question, please press star one. Our next question is coming from Masaryk

with American Century.

Hello, I have a couple of questions. First on the expense side, can you give me a little more color and what exactly the other operating expenses are? And then second, you just walk through the cost side and what you're seeing in terms of margins, and can you give a more formal, generally more formal outlook in terms of revenue EBITDA, profit projections for 2004? Thank you.

Okay. First question -- thank you again. We have made a special and very deep look this year. And we had provision, everything that had any slight chance of problem in the future. So, we had generated more -- fiscal provisions -- this -- a biggest part of is 70% of the total -- 80% of the total are fiscal contingencies that we accounting based on several discussions that we had with our governments. You know, Brazil keeps changing its tax laws very constantly, and every once in a while we need to discus, and now it's the moment to end some of the discussions. We are afraid that it could let us on some kind of losses. So, for that reason we deduct as expenses such provisions very conservative.

Okay.

Next question was -?

In terms of the revenue front and EBITDA growth for 2004, net profit growth for 2004, is there any broad outline in terms of what your budget is or what we can expect?

Broadly, yes, we believe that 2003 was a very good year. So, we are not expecting that some of the productivity indexes will be much more enhanced in the immediate future. No doubt, this will rely a little bit on the size -- on the crisis as I just mentioned before on Asia. But if we don't have dramatic changes, we believe that our profitability indexes will remain in 2004 in line with what we have at 2003. Do not expect major changes up or down. I think that we made the necessary changes in the company to get to this new level.

Okay. And in terms of revenues, you mentioned the multiple GDP for the domestic market. If you can talk a little bit about how much growth you can see in the international market and clarify for me where you are in terms of capacity utilization. I know you've sourced out some additional manufacturing or sourcing of products, which you mentioned earlier, but can you clarify for me how much you can grow from a volumes standpoint in 2004?

Okay. Well, first of all a general comment. Our perception is based on our track record. For the last 60 years, we have measured to grow larger than Brazil in GDP, and every time there's an expansion of income in Brazil, Sadia always grew more than the GDP twice. So, we have a very good track on that,

. Second, hold a second, so internationally all signs are showing that we are going to have a drive in Brazil from around 3% to 4%, though Brazil has

. Please consider a very important point here. Last year we have very definitively two Brazils, we had one Brazil in the countryside, which was growing at something like 6% per year and one big Brazil in the big cities, which by the way had reduced 4% its output. So roughly, plus six less four is plus two, roughly do you know I'm talking about? So why is that? As I mentioned before, income, profitable income in the big cities had evaporated, huge unemployment. In the opposite side, countryside demand, very strong. Well, we are again going to harvest another record crop in Brazil, not only the acreage is larger this year, but we are going to have, we are having a very good rainy season in the planting area. And the rain this year is also showering a lot at the end of summer. So, this

that we are going to have a very big plantation of the winter crop for corn. Unlike the North hemisphere countries, Brazil plants two corns in a year. We plant corn also at the end of summer and we harvest in the winter, due to the rains of December and we do have

winter. So then, everything shows that we are going to have our next trump, another record crop for the winter. Well, for the consideration, money is going to arrive in the countryside period, and this will go and enhance our sales. Sadia has the biggest distribution network in Brazil and is able to supply to all this market. Not too many companies in Brazil are able to deliver of. Mom and pop shops froze into the refrigerated product. So that's a very good opportunity that we are taking. Second internationally. Sadia has decided back in '97 to grow internationally. We are growing, we had made special office, we had to hire people. We have people now living in Dubai; we have people in China, in Peking. We have people in Moscow, in England, and so on, so forth. And in Germany, now. So, we have very qualified personnel developing relationship there. This relationship that we are developing is not

in the market. There is not one-stop shop. It's long-term relationship. We are developing distributors or producers that buy our product to further transform it to more value-added in their home country, or in the final destination. The progress has been very good. As an example of that, you can see the size we had, the extra taxation of salt in Europe one year ago, Sadia was able to grow its volume to Europe because we are exporting special products which are not taxable there. We are doing the same thing in Russia, exporting products that they like and for some years. Now we are having problems with the courts, our government is working very hard. There is good perspective, there is good alternative there, but there is a lot of work still to be done. China, we started exporting to China on the second semester, 2003, exporting chicken. We are already exporting 1500 tons per month, and very likely this is going to be growing very much over the next months, as a result of the lack of production, local production. So, international, we are going to have a strong demand for poultry, and we believe strong prices. So, I think that's the answer to your questions.

So, for a combined -- on a combined basis, what sort of volume growth are you showing when you charge the 10%?

Five to eight, again.

Okay, on a combined basis?

Yes, on a combined basis. Okay?

Okay, thanks.

You're welcome.

Sorry one moment. You asked me something. Again, we too can produce it, we are still operating something like 83% of capacity. So, we still have our own capacity, using the present scale of work, but we cannot also increment. You have -- we can put to work some more shifts of work, and we can keep enlarging the agreements of supply as we have done with Minuano and

. Okay?

All right, thank you.

You're welcome.

As a reminder, if you like to pose a question, please press the star key followed by the one key on your touchtone phone now. Our next question comes from Mr. Gustavo Guria with Banc of Patclov.

Hi Murat, I would just take the chance to ask you another question, and this time, regarding your net investments. We see that you have done a great job in reducing your net debt, and now you are at 0.5 times your EBITDA. I would just like to know if you have any targets to keep this net debt to EBITDA level, and if you have any plans to perhaps increase your payout ratio, pay more dividends or start a buyback program, or something like that? Thank you.

Okay. Thank you for the question. We are -- again, we know what we don't want. We know that we are very uncomfortable with 100% net debt to equity. Now, we believe that 50 is the number that we would like to stick on with. So, we are going to make our best not to have our debt to be bigger than 60% of equity in the future. Also, we don't believe that when we were at three times EBITDA to pay debt, is a good thing. We believe that below one is a good number, but then you see, well -- but you are very far below these limits. Yes, and exactly on that, we have a very good thinking process here, analyzing a lot of alternatives to invest. Sadia, we will be entering into growth cycle, and there are some alternatives which we are analyzing, and Sadia is already a continuous payer of dividends in excess of the minimal legal. We are always paying more than 28%. We are going to remain like that, but for this immediate future, we are not forecasting any major distribution in excess of what we have been distributing in average last year. Again, but we are saving to some good opportunities which are appearing, and we hope will materialize in the near future.

Okay, thank you very much.

Ladies and gentlemen, if you like to pose a question, please press the star key followed by the one key on your touchtone phone now. Again, if you like to pose a question, press the star followed by the one key. This concludes today's question and answer session. Mr. Murat, at this time you may proceed with your closing statement.

Well, Sadia and its 34,000 employees is very proud of what we had presented today. We are very proud of being a family that has built so much in the last 60 years, and we are convinced that our job is going to be continue generating income and development, and happiness through everybody involved in the Sadia family. Thank you very much for everybody. Bye.

That does conclude our Sadia's fourth quarter result 2003 conference for today. Thank you very much for your participation. You may now disconnect.