Copa Holdings SA (CPA) 2012 Q2 法說會逐字稿

Welcome to Copa Holdings' second quarter 2012 earnings conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator instructions). As a reminder, this call is being webcast and recorded August 9, 2012.

Now I will turn the conference over to Joe Putaturo, Director of Investor Relations. Sir, you may begin.

Thank you very much, operator, and welcome, everyone, to our second quarter earnings call. Joining us today are Pedro Heilbron, CEO of Copa Holdings; and Victor Vial, our Chief Financial Officer. First, Pedro will start with our second-quarter highlights, followed by Victor, who will discuss our financial results. Immediately after, we will open up the call for questions from analysts. Copa Holdings' second quarter financial results have been prepared in accordance with International Financial Reporting Standards. In today's call, we will discuss non-IFRS financial measures. A reconciliation of the non-IFRS to IFRS financial measures can be found in our second-quarter earnings release, which has been posted on the Company's website, copaair.com.

In addition, our discussion will contain forward-looking statements not limited to historical facts that reflect the Company's current beliefs, expectations and our intentions regarding future events and results. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially and are based on assumptions that are subject to change. Many of these risks and uncertainties are discussed in our annual report filed with the SEC.

I would like to turn the call over our CEO, Pedro Heilbron.

Thank you, Joe. Good morning to all and thank you for participating in our second-quarter earnings call. Last night, we reported our second-quarter results, and as always, I want to congratulate our team for another quarter of solid operational and financial results.

Looking at our main second-quarter highlights, consolidate capacity for the quarter grew almost 25%. Our operating revenues and passenger traffic increased more than 20%, led by our international traffic, which expanded a very strong 25% during what is seasonally our weakest quarter.

We saw a slight year-over-year decrease in unit revenues as a result of lower load factors, which was partly offset by an increase in yields. This, along with an increase in our effective cost of jet fuel, led to an operating margin of 14%, which maintains our position among the most profitable airlines in the industry. During the quarter, we took delivery of five 737-800 aircraft and returned two of our 737-700 leases to end the quarter with 80 aircraft.

In June, we continued our network expansion by adding four new destinations -- Las Vegas, which is now our seventh city in the US; Recife, also our seventh city in Brazil; Liberia, serving the province of Guanacaste, our second destination in Costa Rica; and Curacao, our 15th Caribbean destination. More recently, on July 14, we launched service to Iquitos, our second destination in Peru. With these new cities, our network now covers 64 destinations in 29 countries, by far the most complete network for intra-Latin America travel.

In addition to launching these new destinations, we continued increasing daily frequency in important markets. For instance, in June we increased Lima, Medellin and Miami from four to five times daily service. Cancun increased to four times daily, and Guayaquil, Quito, San Juan and Cartagena went from two to three daily flights. We also increased to daily service several recently launched markets, such as Asuncion, Brasilia, Porto Alegre and Santa Cruz.

Another important highlight for the quarter was our formal entry into the Star Alliance. Our team is proud and excited to be part of the largest and most prestigious global airline network. This strategic step will enhance our network's global reach while assuring world-class passenger service through our access to the Alliance's benefits. At the same time, Copa Airlines' integration into Star will bolster the Alliance's presence in Latin America, one of the fastest-growing aviation markets. I want to take this opportunity to again thank all of those who have contributed to this successful integration.

Looking forward, we expect good results in our seasonally stronger second half of the year as we continue to see a healthy revenue environment with good trends in book load factors and average shares across most of the network. As a result, for Q3 and Q4, we expect RASM improvement over this quarter which, along with a lower fuel cost forecast, should allow us to deliver our operating margin guidance for the year.

Despite some global economic uncertainty, Latin American economies with few exceptions are healthy and growing. On top of that, Panama's economy is doing very well. For the first quarter, it grew above 9% and it's expected to grow at similar levels for the full year, supported by large capital investment projects including the expansion of the Panama Canal and the construction of the Metro system.

These and other infrastructure outreach as well as considerable private investments are part of a wider plans to further develop Panama to the leading business and logistics hub in the region. Furthermore, the government has already started planning the next expansion of the Tocumen Airport, which will involve an investment of between $350 million and $400 million and the addition of 20 more gates in its first phase. This expansion, which will be financed mainly through the concession of new duty-free retail space, will ensure that our hub has the necessary infrastructure to accommodate our future needs.

As you know, during the last couple of years, we have taken the opportunity to accelerate our growth and consolidate the regional leadership of our network, which included more than 20% growth per year for the last two years, and our transition from four to six connecting [bags] in June of last year. As a result, we have brought an unquestionable leadership in the intra-Latin America market, offering more convenience through more destinations and greater frequencies than other competing hubs. We are implementing many initiatives to strengthen our passenger experience. I will also add that this above-average growth has not come at the expense of our unit revenues.

Having set the base for our future growth, for 2013 and 2014 we expect to grow closer to historical levels, always maintaining flexibility to adjust capacity up or down if necessary. Additionally, our growth should be more focused towards increasing frequencies rather than adding destinations, as we give some opportunity for the 14 new destinations in the last 12 months or so to mature.

So, to summarize, the fundamentals of our business model are very strong. We continue to operate in growing and mostly underserved markets with an emerging middle class that can only be served efficiently through a hub. Our Panama Airport is better positioned to serve this market, and with 34 gates and two runways, Tocumen also has the infrastructure to accommodate our future growth.

With far more intra-Latin American destinations and frequencies, our network continues to be the best option for travel in the region. We continue to implement the necessary initiatives to improve our passengers' experience while maintaining very competitive cost and, most importantly, we have a very committed and dedicated team who, day in and day out, win the preference of our passengers through world-class operational performance and customer service. With that said, we feel confident of the opportunities ahead and our ability to continue delivering industry-leading results.

Thank you. Now I will turn it over to Victor, who will go over our second-quarter results.

Thanks, Pedro, and good morning, everyone. Thanks again for joining us. First, let me begin as usual by thanking all of our coworkers for their efforts and their unwavering commitment to running a world-class airline. We had another quarter of strong growth and solid results as we added five new aircraft to our fleet, expanded year-over-year capacity by 25%, increased year-over-year revenues by 20% and added four new destinations to our network and recently a fifth one to bring the network to a total of 64 destinations in 29 countries and are still maintaining one of the highest operating margins in the industry.

In terms of financial results, reported net earnings for the quarter came in at $32 million or EPS of $0.72 compared to last year's net income of $41.3 million or EPS of $0.93. And excluding a fuel hedge mark-to-market loss of $26.6 million, underlying net income for the quarter came in at $58.6 million compared to last year's second quarter underlying net income of $56.6 million, which excludes a fuel hedge mark-to-market loss of $15.3 million.

With respect to traffic, revenue passenger miles increased 27% year-over-year, driving the load factor for the quarter to 73.5%, a 2.8 percentage point drop compared to last year's second quarter load factor. On the other hand, yields increased 1% year-over-year. In fact, length of haul adjusted yields increased almost 6% as our average length of haul increased close to 10% on a year-over-year basis.

In terms of unit revenues, RASM decreased 3.3% year-over-year. However, on a length of haul adjusted basis, RASM actually increased more than 1%. It is worth mentioning that, though the second quarter is typically our low season. Last year's second quarter was very much an outlier with 41% year-over-year revenue growth and 23% year-over-year capacity growth. So we were, indeed, facing a tough year-over-year comp this quarter.

Operating revenues for the quarter came in at $560 million for a 21% year-over-year increase and 25% capacity growth, a solid revenue performance, especially considering that during the course of the last 12 months or so, we've added 14 new destinations to our network. On the expense side, second-quarter operating expenses increased 26% year-over-year while costs per average seat mile increased less than 1%.

Regarding CASM ex-fuel, it came in flat year-over-year at $0.069 as unit cost increases in maintenance and airport rentals were offset by other operating expenses. With regards to maintenance expense, unit costs increased mostly as result of provisions related to operating lease return conditions. And, with respect to aircraft rentals, unit costs increased as a result of nine new operating leases that were added to our fleet during the course of the past year.

Moving onto operating earnings, consolidated operating earnings for the quarter came in at $72.6 million for a 3% year-over-year decrease, which translates to an operating margin of 14.1%, below last year's second-quarter operating margin of 17.4%, though well within historical second-quarter operating margins.

In terms of nonoperating income and expense, second-quarter results reflect a net nonoperating expense of approximately $36.8 million, consisting mainly of a net interest expense of $5.8 million and a $31 million loss in the other net line, of which $26.6 million relates to fuel hedge mark to market and $5.3 million to foreign exchange.

As far as fuel hedging is concerned, we currently have coverage for 30% of our projected volume for the year, using crude oil swaps at an average price of $88 a barrel; for next year 23% and an average of $89; and for 2014, another 10% at an average price of $88 a barrel. With respect to our balance sheet, we continue to strengthen it as assets increased $227 million during the first six months of the year to reach $3.3 billion. Cash and cash equivalents have increased year to date by more than $100 million to a total of $718 million, which represents 35% of last 12 months' revenues. Owners' equity totaled approximately $1.4 billion, and total debt amounted to $1.2 billion with the Company's debt to equity ratio reaching a very solid 0.8 times at the end of the quarter.

Regarding our fleet, in addition to the four aircraft we received during the first quarter, we took delivery of an additional five new 737s 800s and returned two leased 700s during the quarter with a fleet of 80 aircraft -- 36 at 737-800s, 18 700s and 26 Embraer 190s. In terms of future deliveries, during the remainder of the year there are four scheduled deliveries -- two in the third quarter, and two in the fourth quarter. In addition, in the fourth quarter, we will be returning our leased 737-800 to end the year with a fleet of 83 aircraft.

So, to recap, demand for air travel in our region continues to expand and our hub continues to attract a growing number of passengers. We had another quarter of solid growth. Even in our low season, we command industry-leading margins and we continue to be well positioned to achieve another year of strong earnings.

In terms of our guidance for 2012, given our performance during the first half of the year and our outlook for air travel in the region, we are adjusting some of the elements of our guidance for the year as follows. We are maintaining our ASM year-over-year growth projection at approximately 23%. We're also keeping our full-year load factor guidance at 75%. With regards to RASM, we are adjusting it slightly from $0.138 to approximately $0.136. We still expect CASM ex-fuel to come in at plus or minus $0.067. With respect to fuel, we are now assuming for the year an expected price per gallon including (inaudible) [clean] and net of hedges of approximately $3.20 compared to our previous guidance of $3.40 per gallon. And with respect to our operating margin, we are maintaining our guidance in the range of between 18% to 20%.

Thank you, and with that, I will turn it over to Pedro for closing remarks.

Thank you, Victor. Now we will open up the call for some questions.

(Operator instructions) Michael Linenberg, Deutsche Bank.

Hey, everyone, good morning. I guess a couple of questions here. When I look at your change in your RASM guidance versus your change in your fuel guidance, the fuel number is down a bit more from previously. How much of that changes the function of just anticipating a lower fuel surcharge? Since I know you do have the fuel surcharge and a lot of your fares.

Obviously, when you look at the correlation of our fares to fuel prices in the past, they have shown a very good correlation. So some of it has to do with that, with the fact that we are lowering our assumptions vis-a-vis fuel prices for the year. And some of it has to do simply with more visibility. We are now looking at the high season; we have better visibility with respect to the rest of the year. So simply, since (inaudible), we simply have better visibility plus fuel obviously coming down helps justify the minor decrease in RASM guidance.

And just my second question, Victor -- your cash position, I refer to it as a hoard of cash. You do have a lot of cash; you are at 35%. What -- when you think about your CapEx requirements over the next few years, what is the appropriate percentage on an LTM basis? What should be, and are there opportunities to maybe redeploy some of that cash back to shareholders? And I would say that that's in the context of you raising your dividend, that payout ratio, several times since you've gone public. What can you tell us on that?

Yes, if you look at our CapEx requirements for the next few years, you will have seen the range of between $250 million to maybe $300 million per year. But we do have some important commitments looking forward. Obviously, they are related to our fleet plan, for the most part. We also have investments in airport facilities and IT. As you mentioned, we did increase our dividend policy. Initially, it was 10% of net income. It went up to 20% and now it's up to 30%. So we are returning some value to shareholders.

And as you mentioned, we also have to be mindful of the fact that at some point we have to make future fleet decisions. It's no news, or it's not a surprise to anybody that there is new a aircraft out there, the Max, and obviously us being an NG operator, that's something we're looking at. So having a healthy cash position, given the growth projections we have, the commitments we have in place right now and future decisions we have to make, it's a good thing and a bad thing.

Okay, very good, thanks.

Duane Pfennigwerth, Evercore Partners.

Just wondered, on your ex-fuel cost guidance, 23% growth this year. It looks like some of the local currencies of markets you sell into are depreciating against USD, which seems like it would help your expense. That fuel is very conservative. I wonder if you could give us any detail as to why your costs wouldn't decline this year.

When you look at our ex-fuel CASM guidance for the year, and obviously, again, we're having another year of phenomenal growth, 23%. I think growth in last year was 20%. So yes, you would expect perhaps the ex-fuel CASM number to be lower, but I think you do have to take into account the fact that there is somewhat of a structural change in the P&L in the sense that you are bringing more aircraft that are operating leases, and that's why you have such a big jump in aircraft rental expense, which would be a bigger impact to ex-fuel CASM than if you were doing financial leases and the amount of expense was reflected in the depreciation line. So if you were to adjust for that, actually for the year instead of having a 6.7 ex-fuel CASM guidance, you would be looking more at a 6.5 ex-fuel CASM guidance. So that's part of the answer.

The other part of the answer is maintenance return provisions, return condition provisions, which we have spoken about in the past, which we have increased regarding fleet that we already had in place looking forward. We look from time to time at the provisions to make sure that they are adequate. We did some adjustment to that. And also, we, again, have more operating leases that would impact also return condition provisions in the P&L, and that impacts your ex-fuel CASM as well. So that's why you don't see it any lower than you would expect it.

Okay, thanks, Victor, that's helpful. And then just on the -- I guess your July load factor, and then I look at the scheduling data, it looks like your capacity growth actually accelerates to the low 30% range in August and September. One, can you verify that, that that sounds correct, that we are going to be closer to 30% capacity growth here in the third quarter? And then any color you can put around the load factor decline in July would be appreciated.

Yes, actually, when you look at -- and let's talk about it in terms of quarters. When you look at the third quarter, you can expect capacity on a quarter-over-quarter basis to be higher, somewhere in the range between 9% to 10%. So you are seeing more capacity in the third quarter. And then in the fourth quarter, you're going to see an additional 4% or so, 4% to 5%. So that should give you some color on how capacity has been deployed, and that's how we get to the 23% year-over-year growth.

In terms of July, it's a 78% load factor in the context of 30% capacity growth in the international segment. So we are actually very pleased and encouraged by the numbers we are seeing, and it's reflected in our guidance. That's why we're guiding towards a 75% load factor number at the end of the year. We are not surprised; we expected it. And what we are trying to do here is build a hub for the long-term and not just for quarterly numbers or monthly traffic releases, and I think the guidance speaks for itself when we say we expect to end up at 18% to 20% operating margin.

Okay, thank you for that.

(Operator instructions) Eduardo Couto, Goldman Sachs.

I have two questions, guys. First one regarding second-half outlook and fuel. If you could tell us how is your fuel costs now versus the average, more or less the average of the second quarter. Is it like 5% lower, 10% lower, just to give us an idea of how much fuel prices can go down during the third quarter versus the second quarter?

And the second question is on the capacity side. You are adding around 25%-27% capacity; demand is growing 20%. So my question is, why don't you guys decelerate a little bit the capacity additions to better match the demand? Those are the two questions. Thank you.

I'll take the fuel question and I'll let Pedro take the capacity question. For the first half, fuel prices, the effective fuel price for us, which takes into account into plane and also the hedges we had in place, came in close to $3.32, $3.33. And what we are looking at for the second half of the year is something in the neighborhood of $3.10, $3.12. And that's based on recent curves. The only caveat to that is always that, as you know, everybody knows, fuel prices have been very volatile. So who knows where fuel prices are going to fall in? That's what we are seeing right now, based on curves that we saw a few days ago. But that will probably change in the future, but I can tell you that we have been very effective at adjusting pricing in light of higher fuel prices. So as the price of fuel goes up, then we will adjust accordingly.

Averaging capacity, we know it's grown over 20% in 2011 and again this year, in 2012. And it's all related, both due to the growing demand in Latin America, but also the fact that we have grown from a four-band hub to a six-band hub. So we have been strengthening some of the banks, and running from four to six is not something you can do overnight. You have to build up a frequency before you transition, and then at least for 18 or 24 months after that.

So that year, of course, demand in most of the year was way above capacity expansion. I would not say that that is normal or that we would see that every year. This year, demand has been more in line with capacity expansion and the second quarter was slightly below. But we are adding our flights that makes sense, where service is needed and at the same time, again, as I mentioned before, strengthening the six banks we have now at Tocumen Airport, which is given us tremendous leadership in terms of having the best hub and the most complete intra-Latin America network.

So we do manage capacity, not to have overcapacity and go into markets where our additional frequencies are not needed. But we are not looking to be exactly at the same point that demand is, because there are other strategic and hub-related needs that makes sense for us to add those frequencies.

It makes sense, Pedro. And for next year, can we expect capacity and demand to grow more or less in line, or do you expect also a mismatch like we have seen this year?

Well, last year, we expect to go back to historical capacity growth levels like what we did before 2011-2012. It should be a lot more aligned with demand. But again, actually this year, we are not off that much. And so next year, we should be thinking in the low teens in terms of capacity expansion.

Okay, thank you guys, very clear.

Jim Parker, Raymond James.

Good morning, guys. Just a question regarding if you are seeing any kind of softness in the system to the south, and I'm referring to Brazil, where I think you maybe have about 11% of your revenue because airline traffic is pretty weak in Brazil. And then also it appears that Avianca-Taca is really trying, I don't know how successful is, but trying very hard to get -- flow traffic over Lima going south. Are you seeing any impact of that?

We have not seen any softness in our Brazil airlines bookings, in our Brazil demand. So, so far, Brazil is behaving as expected.

In terms of our competitors, yes, they are building their hubs. They have been doing that for a while, and they always get their share, depending on the market, depending on the connection they are offering. But it's not something that's irrational or that's impacting our business model or our plans going forward. But obviously, if you have a competitor flying over some of the same markets, they're going to have their share.

But Latin America, at the same time, has been growing so much and we are always adding unique destinations that -- we have our own very strong niche and we feel there's room for all of us. At the end of the day, when we think of strong intra-Latin America networks, we are down to three or four consolidated group of airlines. So it's a growing, large pie that's been shared by not too many airline groups.

Okay, thank you.

Hunter Keay, Wolfe Trahan.

Pedro, can you give us a sense of the changing political landscape down there, if you think it's changing? There has been some articles recently about President Martinelli is sort of shifting a little bit, acting a little more maverick in some of the decisions he's been making. I've always thought of him as being pro-business. I know you've said the government is obviously supportive of the expansion at Tocumen. But do you think that there's any kind of evolving business or political risk to the business right now in Panama? And maybe give me your thoughts on how the government views -- an update, maybe, on how the government views the airline industry's place in Panama.

Okay, as you know, I think the first thing I should say is that Panama always has a very active political side. It's like our national sports. We did not win any medals at the Olympics, but if there had been political Olympics, we would have probably won a bunch of medals. So people love politics here.

But it does not affect the private sector. It's like a separate game that's always, again, very active. The private sector is usually left alone. All of our governments, no matter from which party, are pro-business and have pretty much the same business or economic platform. So -- and this has been going on for many years, more than 20 years.

So the business sector in Panama is growing. It's strong. Our investment grade was recently upgraded by Standard & Poor's. So we do not see -- you know, we don't see any changes to the fundamentals of what makes Panama a strong and growing economy. For the first quarter, we grew 9%, then the economy grew 9%. And for the year, it's expected to grow at similar levels. So again, in spite of the politics, Panama should continue growing, and there are a lot of things happening here that lead us to think that way.

And in terms of specifically aviation, this government recognizes the value of aviation to the business model of Panama as a leading logistics and investment hub for the region. So the south terminal, a new terminal, is going to add another 20 gates. It's going to take the airport from 34 to 54 gates. It's going to be put out for bid early this month. Actually, I think in a week will be the day that goes out to bid, and it should be ready in 2.5 to 3 years. And again, when the country needs to negotiate route rights, our government, our President is first in line negotiating the route rights we need. So I think there is an alignment between the business direction of Panama and the thinking of the government and the business of aviation, where we are obviously the main airline.

Let me just add one thing to that just to emphasize what Pedro is saying. When you look at Panama's economy, in terms of contribution to gross domestic product, to GDP, there's the canal and then there's Copa. We are right up there. We contribute -- aviation contributes 5% to 6% of GDP. So, as Pedro says, we are an important part of the model of Panama to become key logistics center for the region, and aviation is a big part of that.

Okay, I appreciate that color. And let's create a scenario here where your stock is flat for, let's say, a year. And despite the fact that you are paying out 25%-30% of your earnings in a dividend and you are growing your earnings on a steady basis, but your multiple just isn't expanding, because right now, by many measures, for what you guys do, your multiple is still very, very low. In that scenario, do you think you would be more inclined to take a business risk like, say, pursuing like an unbundling strategy or something? Or, would you be more inclined to, say, pay out -- to raise the payout ratio on the dividend? How would you think about getting that next step in investor interest if your stock is stagnant for an extended period of time?

I don't know if we can give you an answer today to that question, because we are focused almost 100% in running a solid business with good returns for our shareholders. And we think that, over time, our stock should be priced accordingly and fairly. And we are not really comparing ourselves to others. We do our thing; we want to do it well, as best as we can. And again, just trust that the stock will reflect that. And if there's an opportunity to increase dividends in the future, I'm sure we will look at it.

Okay, thank you very much.

Helane Becker, Dahlman Rose.

Could you just talk a little bit about how some of the new routes are doing, like Las Vegas? I think you just started service there a month or so ago, and I think you are carrying a lot of traffic over Panama City from south of your market. So maybe could you talk a little bit about that?

Yes. All of the new markets, we recently started five new markets and those are all performing according to expectations. We are actually happy with all five of them. Last year we started nine markets, and I think the proof of how well they've done is that actually I think all of the markets we started last year, like Porto Alegre and Brasilia in Brazil and others, most of them were started with four weekly frequencies and already at daily flights, at seven weekly frequencies. So I think that shows that they've performed better than expected, at least as expected.

So I would say that all 14 markets that we've opened in a little over 12 months are doing quite well.

Okay, have you announced any new markets for the second half of the year?

We have not, and after opening nine new markets last year and five this year for the first -- let's say, for the next 18 months or so, we will open a smaller number of new markets. We're going to focus more on increased frequency, and we will not be open as many new markets. There will be a few additional markets, but not as many as during the last 18 months.

Okay, and then for my last question, I think you guys officially are in Star now. And I know that you said that you didn't think you would see any change in the business because you already were getting the benefits from your code share agreement with the former Continental. Is that still true, or was there any difference?

I think that's the first statement. And I think what we said, Helane -- this is Victor, by the way -- is that we expect an incremental benefit to be realized more next year. As you know, the new code shares start to kick in. So what we said was that this year, whatever we get will be marginal. It's not reflected in the guidance, so it will be gravy. And any incremental benefit really we expect to see next year. But you are right. The bulk of the benefit we are already realizing with United Alliance, which have been in that alliance for the past decade or so.

Okay, thank you very much.

Stephen Trent, Citi.

I just wanted to get your take -- I'm interested; it was intriguing. You joined Star Alliance. You mentioned sort of large airline groups in the region. As you look at, let's say, medium-term capital deployment, you've got an Alliance partner, a big Alliance partner based in Colombia. You code share with Tame's Ecuador and -- Ecuador's Tame, rather, and some other carriers like that. Do you think, down the road, that you would consider another move like you did with AeroPublica in 2005, or that seems largely off the cards?

I would say that we will always have all of our options open and we will always look at opportunity where there is a strategic partnership that can add value to our business model. I don't see anything happening in the near future. But again, we will always be open to any possibility that make sense for us.

Great, thanks, Pedro, and just one very quick follow-up, if I may. To what extent, if any, are you seeing rational or irrational behavior from VivaColombia? Even though I know Colombia domestic is a much smaller piece of the pie than it was two years ago.

It's just such a different business model, the ultra-low-cost model they are following, that it's hard for a more traditional carrier like us to say that it's irrational or rational. It's just very different, but -- the way the price, I mean. But as you well said, Colombia domestic is less than 5% of total ASMs for Copa Holdings. So we are not too concerned with what goes on with VivaColombia and the domestic market of Colombia.

Okay, great, that's it for me. Thank you very much, Pedro, thanks, guys.

I am showing no further questions. I will now turn the call back over to Pedro Heilbron for closing remarks.

Okay. Thank you all. This concludes our second-quarter earnings call. Thank you for being with us and thank you for your continued support. We will see you next time. Have a great day and a great weekend.

Ladies and gentlemen, thank you for your participation. That concludes the presentation. You may disconnect, and have a wonderful day.