Cementos Pacasmayo SAA (CPAC) 2015 Q2 法說會逐字稿

Good morning and welcome to the Cementos Pacasmayo second quarter 2015 results conference call. With us today are Humberto Nadal, Chief Executive Officer; Manuel Ferreyros, Chief Financial Officer and Claudia Bustamante, Head of Investor Relations. (Operator Instructions)

During the conference call, management will make forward-looking statements to assist you in understanding its expectations for future performance. These statements are subject to a number of risks that could cause actual results and events to differ materially and I refer you to the Company's press release of July 22, 2015 and the Company's most recent regulatory filings for discussion of those risks. The Company may at some point elect to update the forward-looking statements made today, but specifically disclaims any obligation to do so, expect where required by law.

I will now turn the call over to Ms. Claudia Bustamante, Head of Investor Relations.

Good morning everyone and welcome to Cementos Pacasmayo second quarter 2015 results conference call. Our presenters today will be Mr. Humberto Nadal, Chief Executive Officer and Mr. Manuel Ferreyros, Chief Financial Officer. After today's presentation, there will be a question-and-answer session. Please note that today's call is being recorded and that the contents of this call cannot be reproduced in whole or in part without expressed consent from the Company.

I will now turn the call over to Mr. Humberto Nadal, Chief Executive Officer.

Good morning, thank you Claudia. Good morning everyone and thank you for joining the Cementos Pacasmayo earnings conference call. Our results in the second quarter show the value of our strategy aimed at being a high margin producer with a focus on efficiency. This strategy has allowed us to expand margins even as we continue to feel the impact of weaker demand, mainly from the public sector. Nonetheless, we remain optimistic regarding the demand for the second semester, as we expect volumes related for infrastructure spending to increase in this period and the years to come.

Looking at growth, yes, the demand environment for cement, as many of you may know, there was a major deficit in terms of both infrastructure and housing. These deficits are estimated in about 2 million households and close to $19 billion in the infrastructure. So this is a market where there is a long runway for continued demand. In the northern part of Peru where we operate, the market has high barriers to entry. So Cementos Pacasmayo is in a solid position to supply large quantities of cement for large infrastructure projects and continue to serve the private sector, as well as the self construction market.

During the first half of this year, we have seen a significant slowdown in spending on large-scale infrastructure projects, as newly elected local governments are still in a bedding-in period. We expect this adjustment period to end soon and cement demand pick up accordingly. Looking specifically at another part of Peru where we operate, three are three large-scale infrastructure projects where we are contracted to provide cement. Firstly, the Talara Refinery. This is a multi-billion dollar project to upgrade existing [Talara] Refinery. We are being contracted to provide cement, concrete and piles for this project. Today, nevertheless, we estimate that only 10% of the total cement needed has been shipped.

Secondly, Chavimochic Project. This is also a large-scale renovation project, aiming to incorporate over 60,000 hectares of land into the irrigation system and improve such irrigation to a further almost 50,000 hectares. This will involve the construction of a dam and irrigation channels. We are in the final stages of negotiating a contract to provide all of the cement for this project and we expect to make the first shipment during the third quarter of this year. This project is not only relevant in the construction phase, as it demands cement, but it will be specially important in medium and long-term as well, it would generate employment that can eventually result in an increased amount consumption, especially to the self-construction segment.

Thirdly the Longitudinal de la Sierra Highway. This a key road for Peru, stretching over 3,500 kilometers. We are providing cement for this project. And we estimate that up to date less than 15% of total cement for this project has been shipped. In the first half of this year, there were delays in the construction of the road, due also to some weather issues. Shipments have now resumed and we hope that there will be no more significant delays in construction in the coming months and years.

Finally, I would like to mention that this week, the government announced a Public Week for the new city of Olmos, a city entirely planned around the Olmos irrigation project in Lambayeque, also in the north part of Peru. This is the largest urban project in Peruvian history and the first planned city in the North part of Peru. Investment is estimated at around PEN600 million, which includes the construction of almost 23,000 houses, as well as commercial and recreational common areas, hospitals, schools, roads, industrial parks among others. This I think is a fantastic example of what we will witness in the coming year, as both the housing and the infrastructure deficits are successfully tackled by well planned initiatives in Peru.

Moving on to the self-construction market, which accounts for close to 60% of our volumes, demand has been more resilient. We continue to innovate in this sector, leveraging our presence with various brands at retail outlets. While (inaudible) brand of cement, which is a value oriented brand, which complements our portfolio for us. Despite a sluggish demand environment, we were able to raise prices late in the quarter around 3% and have done an initial increase of close to 1.5% in July.

Before I turn the call over to Manuel for a closer look at our financials, I like also to give you an update on our Piura plant. This cement facility will be a landmark in our history, which is first new plant in several decades and the most modern plant in Latin America. We'll have a capacity of 1.6 million tons per year of cement, as well [a million] tons per year of clinker, meaning we will be able to eliminate completely the imports of clinker, giving us higher efficiency and visibility in our costs.

As of today, the plant is in its final phase -- I should say, date of construction and probably on time and on budget. In the second quarter, we finished the electromechanical set up of all the cement equipment and the beginning of the commissioning stage for cement line. We expect to begin production of cement in the coming weeks, our production of clinker in the fourth quarter, like I said, as planned. By the end of this year, we will reach an initial 65% production capacity utilization for cement, the level we've identified preliminary as appropriate for the current demand environment. Once we reach this initial capacity, we will be in a position to produce more cement at a lower cost and commercialize it more effectively. We will then be able to increase capacity utilization in line with demand goals.

Finally, I'd like to mention that this week we were once again recognized by the (inaudible), the Lima Stock Exchange as part of the Good Corporate Governance Index. For the [sixth] consecutive year since its creation, Cementos Pacasmayo was selected as part of this index, which is composed by [10 leading] companies, with the highest corporate governance standards. We are very proud to be part of this elite group and we will continue to work on sustaining and improving our corporate governance standards.

I will now turn the call over to Manuel for a closer look at our second quarter financial results. Manuel?

Thank you Humberto. As Humberto outlined, results for the second quarter reflect weaker than expected cement demand, mainly from the public sector, which lowered our revenues by 8.8%. Despite this lower sales, we achieved significant improvement in margins, in keeping with our long-term strategy to prioritize efficiency and high margins. So the decline in our gross profit was much smaller, down only 2.4% from the second quarter of 2014, while our gross margin grew to 43.2% from 40.4% a year early.

Taking a closer look at our results, sales of cement, concrete and blocks fell 8.2% to PEN239.9 million with gross margin expanding 2.6 percentage points to 48.1%. Quicklime sales were up 2.5% to PEN20.2 million with gross margin expanding 1.6 percentage points to 17.3%. Lastly, sales in construction supply fell 25.7% to PEN16.2 million with a gross margin rising [90] basis points to 3.7%.

Operating expenses in the second quarter were PEN46.5 million, compared with PEN54.1 million a year early. It is worth noting that in the second quarter we sold a real estate asset that generated an income of PEN8.8 million. Administrative expenses rose 7.6% to PEN49.3 million. This increase was largely due to our training and third-party services related to the startup of our Piura plant. Selling expenses, by contrast, fell 6.4%, as we reduced advertising and marketing expenses, in keeping with our strategy to maintain a lean corporate structure and [priorize] in margins.

Second quarter EBITDA was PEN89.3 million, a 6.4% increase from the second quarter of last year. EBITDA margin grew to 32.3%, up from 27.7% in the second quarter of 2014.

Turning to our expenses, we had a net financial cost of PEN11 million, compared to PEN7.2 million a year early. This is the result of our decision to hedge our [300 million] of dollar-dominated debt. If we had not hedged this debt, there would have been a loss of PEN33 million in our balance sheet. Net income for the quarter was PEN44.3 million, up from PEN41 million in the second quarter of 2014.

Turning now to results for the first half of 2015, we saw a 6% reduction in total revenues to PEN567.1 million, again reflecting weaker demand from the public sector.

Gross profit was flat at PEN244.6 million, as we expanded gross margin to 43.1% from 40.5%, largely through a reduction in the use of imported clinker, a lower clinker cement ratio.

Operating expenses for the first six months of 2015 totaled PEN99.4 million, down from PEN110.5 million. We saw slightly higher administrative expenses, largely due to Piura, while selling expenses dropped PEN1.4 million.

First half EBITDA was PEN178.5 million, up from PEN164.6 million during the first half of 2014, showing our ability to deliver improved financial results even in a challenging demand environment. Net income for the first half of the year was PEN96.5 million, up 19.4% from PEN80.8 million in the first half of 2014.

Before I turn the call back to Humberto, I'm going to take a look at our balance sheet. We ended the first half of 2015 with a cash of PEN430.3 million, which is equivalent to about $135.4 million. The cash position was down from PEN580.5 million at the end of 2014, because of capital expenses, which totaled PEN247.5 million in the first six months of this year, of which PEN219 million was expended in the Piura plant. The remainder CapEx for the Piura plant is about $90 million, which we should expend during the second half of this year. Leverage remains very low with net debt to EBITDA of 1.4 times at the end of the first half.

To sum up, we ended the first half in a strong financial position, boosted by positive trends in margins. We still sustain the operational efficiencies already implemented, which will allow us to maintain margins during this year and to further expand this once the Piura plant is fully operational.

I'll now turn the call back to Humberto.

Thank you, Manuel. Well, with that we conclude this part of presentation and we are open to questions.

(Operator Instructions) Marcos Assumpcao, Itau BBA.

Congratulations on the results. My first question is on the pickup in infrastructure spending in the second half of the year, how much could we expect in terms of cement demand in the second half? You mentioned that infrastructure could be offsetting the weak first months of the year, we saw that cement production was down 8% on a year-on-year basis. Could we see that reverting in second half or it's still strong? Second question is more of a long-term related question is where do you see cement consumption in the Northern region of Peru in five years time, as most of the infrastructure projects that you mentioned in the press release starts to materialize? Thank you.

Regarding the first part of the question, I'm positive right now. I mean we expect volumes for the year to be flat. That would mean, I mean in the second semester it should recover, while we have seen a drop in the first semester. I mean, (inaudible) I think this would happen, but it is all going to depend on the ability of the public authorities to really catch-up. That is something that it's beyond our control, and it's going to be dependent on that. That's what I say that I think the self-construction sector has been resilient. The name of the game for the second part in terms of volumes is going to be the capacity of the public spending, not only in the three projects I mentioned, but also in other projects that the public sector has.

Regarding second part of your question, we are very optimistic. The reason we mentioned almost, and this is something that should not be taken lightly, this is the first case where you have a city that's planned from day one, everything and you know to build a city you fundamentally need cement. We are talking homes, we are talking roads, we are talking alleys, we got hospitals and everything. And this is something, like I said, it is already in a public bid. And I think if we see more of these initiatives, in the north we have around $23 billion of infrastructure projects that are on the line. Some are on institution like the [three ones] are made, and the planning period, at the conceptional phase. I think these should give an interesting boost in demand for the next 10 years. So that is I say whenever I meet with any analysts or investors, I say Peruvian cement consumption per capita is pretty high, we were closer to the third largest cement market in Latin America last year. But still mainly driven by housing. I think if we have locked the infrastructure deficit with projects like Olmos, we're going to see much better absolute numbers in the coming 5 or 10 years.

Just another follow-up question here on the cost side. Could we see further efficiency gains? You did a very good job on improving gross and EBITDA margin in the quarter by reducing clinker imports and improving the clinker to cement ratio. Do you see further gains on that front?

Well, yes, definitely. This is Manuel. Yes, definitely, next year once we have the Piura plant fully operational, we should increase EBITDA margins around 4 points -- 4%. So we should jump from 31% to 35% or something like that.

My question was besides Piura, is there any further efficiency gains on what you just did in the previous quarters or that's pretty much where you wanted to be?

Two things. I mean first of all, the efficiencies we have achieved are sustainable, which we think is very important, and we'll keep pushing there. I mean besides the one -- the basic point Manuel associates to Piura, we're trying to scrape the pot, if we can find some more efficiencies in Pacasmayo (inaudible) and hopefully we'll find a little more before Piura comes into line.

Andres Soto, Santander.

My first question is regarding the incremental cost from the Piura plant. In the press release, you mentioned that you expect stable margins in 2015, however given the improvement that you're already delivered this year, stable margins will represent actually a deterioration versus first half of 2015. Can you please give us an idea of how much are the incremental fixed costs that you expect once Piura starts operations?

Yes. Basically the margin -- gross margin once Piura starts operations should have grown around 2%, so the rest is basically in fixed costs, compared with EBITDA margin.

I didn't fully get that Manuel, sorry, can you repeat that?

Yes. The gross margin next year 2016 should increase in around two additional percentage points.

Correct. No, my question is not regarding 2016. My question is regarding the remainder of 2015?

We expect margins being flat, exactly as the first semester and we are going to absorb additional cost of the Piura plant once they are up and running, but we're going to compensate it with other savings that we're going to have in the Company.

But given that you already had 31.5% EBITDA margin, a flat margins you mean versus 2014, which is 29.5%?

No. What I meant -- sorry if I didn't explain it clearly -- we are going to finish this year with a margin around 30.5%, not 29.5%.

And my second question is regarding the stock buyback program. I understand that the shareholders assembly already gave power today to the Board of Directors to define the terms of these buyback. Can you please give us an idea when we should have additional details on sizing and the price?

This is Humberto. The Shareholders Meeting basically approves, given the power to decide to the Board and here in the Shareholders Meeting, basically we were making this tool for the Board to evaluate permanently when there is an opportunity and a buyback program would add value to the shareholders. I mean in terms of pricing and size and everything, that is something for the Board to determine. Like I said in the Shareholders Meeting, we are not in the need of a buyback program. What we are planning for our shareholders to give the power to the Board to decide if there is a chance and an opportunity that makes sense for the Company through a buyback program. So whenever the Board thinks that the conditions are good, we'll do it. But like I say, we are not in the middle of a buyback program at all.

(inaudible), Bank of America Merrill Lynch.

This is actually Daniel Rojas. My question is regarding this new product, these lower price cement bags you've recently put in the market. Could you give us more color on your strategy regarding this product, what is your long-term strategy, where you want fit in the market, and where you see this in the future? Thank you.

Basically, I mean we saw what was going on with the other parts of the country, basically Lima, where were some low cost brands of cement was coming in. Really what we see here, if you wanted have a portfolio of cement. Of course, we have (inaudible) different kinds of cement, (inaudible) I mean, especially in cement and we felt that to complement their portfolio we need a low cost brand, just to be a part of the portfolio and that would allow us to manage the price structure in a better way. So, in the end, I mean, when we think of the portfolio, we're thinking as a one unit as a whole. I mean moving one (inaudible).

Thinking long-term, do you think, how much of your sales breakdown do you this quarter would be or what are you targeting?

This will be in one-digit, probably between 6% or 7%, no more than that.

Adrian Huerta, JPMorgan.

Congrats on the efficiency efforts. Sorry to be repetitive a little bit on the question on the margins. So what you're targeting for the second half is to have margins similar to what you had in the first half, which were somewhere around 31.5%, is that correct?

Yes.

So, to actually be for the full year above what you had in 2014?

This was within the [1.5%], excluding the asset that we've sold, this should be in around 30.5% whole year -- for the whole year.

And then my other question, you mentioned that you increased prices at the end of the quarter by [3%]. Has this been the only price increase that you had so far this year and are you planning to have any more price increases throughout the year?

This is Humberto. Like I said, we've had two price increases, one for -- the one you mentioned, initially 1.5% we did in July and we think some more price increases should be coming in the second part of the year.

And then just a last question. On this new city of Olmos, how do you think this is going to evolve, Humberto, when will this start and how quickly this could happen?

I mean I wish I will be better predicting the capacity of the public sector to develop, but this, I mean it's already in a public bid. From what I read and I've been talking to some of the authorities and the [consortium itself], they are looking at the end of the next year. They're being already in execution, it's going to take probably around three years. And again, the city is going to be an ongoing project once it starts to roll. But that's what we're looking at right now. I mean, the bidding going on the rest of this year and actually the execution of it starting late next year.

Francisco Suarez, Scotiabank.

Congrats on the results, great deliveries again gentlemen. I do have a question on how you handled your overall risk on foreign exchange mismatches. Does your currency swaps cover the -- not only the US dollar denominated debt, but also other US dollar denominated expenses or purchases in general. And if I may, what is the maturity of those derivatives? Do they have a maturity in line with your debt, or with your future commitments? Can you walk us a little bit with that?

This is Manuel again. We had fully hedged the debt of $300 million. Basically the capital is fully hedged and it's due the maturity of the bond.

Regarding your question, I mean that [currently] we have hedged. We don't hedge any other dollar obligations.

You haven't hedged any other US dollar obligations, isn't it? That's the only thing.

Not other. Only the $300 million bond.

Okay, got it, because I see that you have also other US dollar denominated expenses. For instance, I mean in addition to the overall payments that the Board receives, you have also other US dollar denominated expenses. So I wanted to see how able you have been to cover additional risk, considering that the Peruvian nuevo sol has been going so bad recently.

As Humberto clarified, we've stopped importing clinker, we are not going to use more imported clinker. That was the main dollar-based expense. And the total dollar expense that we have from all our costs are around 15%, so it is very little.

And to complement what Manuel is saying, I think that low dollar base purchases, I mean it is something that we should be able to easily translate in terms of price increase, so we don't get affected in terms of our margins.

And a follow-up question, if I may on the price hikes on cement. You mentioned 1.5% in July price hikes. What has been the status in pricing in Peru, because sometimes it is hard to increase prices in Peru. I see on one hand a lot of vulnerability for you guys, because the shipping rates in general and worldwide has been dropping so much. But on the other hand also the weakness of the nuevo sol has been worth considering. So do you think it is safe to increase prices and you wouldn't be losing market share? I mean, in other words on (inaudible) conducting price hikes?

(inaudible) has been increasing prices, I would say, pretty steadily over the last six to eight months. I mean that's always a driver at the national level. In our case, I mean you mentioned, I mean, we've been able to increase [3% and 1.5%] and keep our 96% market share. (inaudible) I mean we would not put at risk our dominance in the market. The thing is, I mean when you mention, we're always evaluating the possibility of competition coming from outside. We don't think it's probably the case at all. Even if the prices are lower, there is still, I mean, a big issue in terms of absence of ports, in terms of just being a very costly to get into our market. With pure operating, I think we have a footprint that really prevents us from any foreign competition. So I can say we are being more aggressive with prices, as you also mentioned and perfectly well our the known distribution network.

So I think, we're always going to be watching to our lesser price, our right to market share. We are only going to push in the sense, to the extent that we can keep our position. The Lima situation is different, because their market shares are not as strong as ours.

Lastly from me a final question. Thank you for sharing the information on Talara, Chavimochic and Longitudinal project. Is there any execution risks, including not only the legal, but also the funding side of the equation that may delay these infrastructure spending in these projects that you are aware of?

Let's see. I mean in that aspect the three are different, because refinery modernization is being conducted by a state-owned [company] to our concessions. I don't see any risk in the three of them. I think they are just having a hard time executing. If anything like I said, the refinery is having the hardest time of all, because sometimes unfortunately state-owned companies have a hardest time executing projects, but demand is there, the central government is backing them with a $1 billion credit line. So I think they are in pretty good shape, it's a matter of them just doing what they need to do. And in the case of Chavimochic and the Longitudinal, I mean they're going to take longer, because of permitting and everything. Some additional pilot consortiums are there to make a profit. So I'm sure they're going to deploy them as fast as they can. So, overall, do I see a risk of them not happening? No, really not.

Dario Valdizan, Onyx.

Just wanted to start first with the volume -- I'm sorry, the call is a little bit difficult (technical difficulty) what's going on, but it gets cut quickly. So if you don't hear me well, let me know -- question. Regarding (technical difficulty) the call that you expect to break even -- be flat year-on-year. But if I look, so far for the first half of the year, you have about 1,082,000 tons of cement production. That would mean that [might] flat -- to grow by (technical difficulty) [1.3 million]. Is that feasible, do you think it's still that feasible?

Dario, if I understood the question because there was some problem with the communication, what we expect is we should grow dispatches in the second of this year around 6%. But this would be -- it will depend on the execution of the public infrastructure.

Just to complement, Dario, I mean like I said before, I mean, and I think we said in the call we had few months ago, I mean we remain optimistic that these volumes are going to move faster. And they do and sometimes they don't. So in the end, I mean is it doable? Yes, it's doable. But it's not something that we have too much influence about it. I mean the capacity to execute, I mean we remain hopeful, we are there ready to dispatch all the cement they want as soon as it is feasible to do so, but it is going to depend more on third party than ourselves.

Samuel Bevan, Aberdeen Asset Management.

I just wanted to get an update on the phosphate project.

The phosphate project, the final -- final revision of basic engineers and of course the consequential (technical difficulty) will be ready September of this year, around that. Like I said, the second semester, we should for sure have the final figures in terms of CapEx, OpEx, of course, [BFS and IRR] and when those come away, we will make that public to the market.

(inaudible), Chase Morgan .

I just have two quick questions. First, given the additional CapEx needed to complete Piura, where do you expect your net leverage to, I guess, peak here this year and the coming years? And then my second question was, are there any other real estate assets that you're planning on selling?

To answer your question one, yes, we expect the net EBITDA should be around 2.3 times. So considering -- at the end of the year, after we gave -- we will distribute dividends, would finish with the Piura plant, we should be at 2.3 times. And this should go down in 2016 and 2017.

Regarding the second part of your question, we are revising, I mean permanently what assets we may have that are not really giving us a lot of value, or we don't have usage for them. I mean there are some small things, I mean, nothing really major, but we are in constant revision of things that sometimes that we [use for] certain things and we make a better decision of capital allocation, we may sell (inaudible) if we see anything really relevant.

Nothing like we saw this quarter, which had a positive impact on EBITDA?

Not really.

(Operator Instructions) Marcos Assumpcao, Itau BBA.

First question is regarding the expectation for your capacity utilization at Piura. I saw that you lowered a little bit your expectation from 70% capacity utilization pointed in the previous quarter report to 60%. Can you explain the rationale here?

And the second question here is, given that your leverage is as close to the peak level and then in 2016 may be that should be improving and CapEx would be reduced considerably. What will be the priorities for the use of cash going forward?

Regarding the utilization at the Piura plant, I mean when we mentioned 70% or 60%, I mean, really it should read between 60% and 70%, based on two things. I mean, how strong or weak demand will come in the -- in the coming months and also, if you have three plants, our theory here operating on multi plant companies, the last ton dispatch will come from the plant that gives us a highest contribution margin. This is a combination of cost, freight and the destination. So, sometimes the revision is really -- I mean you should think about within 60% and 70%. At this point it's hard to make a prediction, because we have to start the plant and then we can really make a couple of [comments] on the exact numbers.

And regarding the second part of your question, I mean, we have always been a very prudent company. I think we've even been blamed for being over-prudent in terms of our capital and debt management. I think once Piura is paid, we have to recall one thing, when we did IPO some three years ago, I went to the markets with the Piura project (inaudible) $86 million project and of course [inherit an] $86 million risk. I think now that is done on time and on budget that's out of -- that's out of the risk part of the company. So we have to attend to our prudent behavior. I think with our cash generation, we should able to lower the debt ratio Manuel mentioned. From there on, we're always going to be looking for opportunities in terms of cement. We said it also in IPO, we will selectively pursue acquisitions. We have not so far found something that we thought was value -- would create that value and made a difference, but doesn't mean that we don't remain committed to finding that. And of course I mean in the end if we don't find reasonable usage for the cash, in terms of profitability and risk, I strongly think that the cash belongs to our shareholders.

And just a follow-up here. For the new city of Olmos, so you have the potential size of investments that could be related to that big project?

The official number is [$600 million] to build the city, that is just to build the city. I think only once now the bidding is starting. I think we have to really understand what does this number imply and then only we can have a picture of what it's going to really mean (inaudible).

Dario Valdizan, Onyx.

I wanted to (technical difficulty) the capital. I saw a deterioration on working capital this quarter. Inventory increased in days from 167 to 186 days for receivables. Can you give me a little (technical difficulty) please.

We are basically preparing for the [lean] you know. The [lean] issues maybe will have some impact in the second half of this year, so we will be increasing our inventories, a little bit only, our clinker inventory.

And your answer regarding price for the rest of the year?

Yeah, like I said before, we have two price increases, one of 3%, one of 1.5% and we think that probably in the second part of year, we should be looking at one more price increase.

This concludes our question-and-answer session. I would now like to turn the conference back over to management for any closing remarks.

Thank you. To sum up, we have a very positive outlook for the second half of the year in terms of the demand environment, even though we don't control it, like I said before. This was based on the full year cement volumes being flat compared to the year before. That's all we are hoping for. We are very optimistic about (inaudible). I think we'll continue doing all our efforts to improve our margins through efficiency and in general to consolidate the competitive position in our markets. Once again, thank you everybody for being available for this call. And should have any further questions, like usual, Claudia, Manuel and myself, we are always here to absorb any doubts or any further question you may have. Thank you very much for your time.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.