利安德巴塞爾 (LYB) 2007 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, welcome to the Basell first quarter conference call, hosted by Mr. Jean Gadbois. My name is Dylan, and I'm your conference coordinator for today. Throughout this conference, you will remain on listen-only. (Operator Instructions) I'd like to advise all parties, this conference is being recorded for replay purposes and now without further adieu, your host, Mr. Jean Gadbois, please go ahead, sir.

Actually, I'll start. Good afternoon, this is Alan Bigman, Chief Financial Officer of Basell. I'd like to start the call today by thanking Jean Gadbois for his exceptional work over the last two years as manager of Investor Relations for Basell. Jean has accepted an opportunity to move back to the front lines of our polyolefins business and has been promoted to Senior Vice President in Polyolefins Europe with responsibility for supply chain and logistics.

Thank you, Alan, thanks for the kind words. Today is my last day, and I must say that it's been a fantastic two years to work with all of you out there. It's a small world, and I'm sure we'll have the opportunity to work again together, and I look forward to that, thank you.

I am pleased to introduce you to Tom Boal, who will be replacing Jean as manager for Investor Relations. Like Jean, Tom brings a wealth of knowledge and experience to the Investor Relations role. Tom has worked for Basell and its predecessors for over 25 years and has also worked in many different business functions, most recently in strategic investments and business finance in Polyolefins North America.

Thank you, Alan. Jean, best wishes from all of us in your new role. Good afternoon. I am Tom Boal, Manager, Investor Relations, and it is my pleasure to welcome you to today's conference call with bondholders and analysts to discuss Basell's first quarter 2007 results.

On today's call, Alan Bigman, Chief Financial Officer, and I represent the Basell group of companies. Before we begin, I would like to give you some information concerning the first quarter release. The presentation prepared for today's call is available on our website at www.basell.com under the Investor Relations section. A link to a replay of this call will also be available on the Basell website on Thursday.

The presentation today may include forward-looking statements as that term is defined in securities law including but not limited to anticipated plans, litigation, and environmental matters, currency effects, profitability, and other commitments or goals. Such statements are subject to a number of risks and uncertainties many of which are listed in the now AFS/ARL offering memorandum.

Alan Bigman will comment on the state of the polyolefins industry during the first quarter of 2007. He will also review the performance of Basell's three businesses. Following this there will be a review of Basell's financial performance, a question-and-answer session will follow.

Before I turn the microphone over to Alan, let me quickly comment that Basell's execeptional performance since being acquired by the Access Industries Group has continued into the first quarter of 2007 yielding the highest quarterly EBITDA since the formation -- since the company's formation in 2000 and significantly ahead of the first quarter EBITDA reported in 2006. All three divisions continue at their excellent performances. Now let me turn the discussion over to Alan Bigman.

Thank you, Tom. Let me start with a few comments about Basell's 2007 first quarter achievements.

Our safety record as measured by total recordable rate for employees and contractors was marginally above what we achieved in 2006 but continues at a level that places Basell among the best in the industry. Basell also achieved its best quarterly ever financial results in the first quarter of 2007. This record-setting performance included an EBITDA of EUR374 million thanks to strong contributions from all three businesses.

Our company's technology and leadership in polyolefins was once again reaffirmed. We signed new agreements for almost 1 million tons of annual capacity in the quarter. The advanced polyolefins business had a very strong performance including an EBITDA result 23% ahead of first quarter 2006.

Sales volumes were 9% higher than the corresponding period of last year.

The periodic evaluation of the liability for North American pension and medical benefits had a positive EBITDA effect due to changes to align the plans to current industry practices.

And the steam cracker at the Munchmunster, Germany, petrochemical site, which we acquired in the fourth quarter of last year was smoothly integrated into our European operations.

Now a few comments on our industry. The favorable global supply/demand balance for polyolefins that we experienced in 2006 continued into the first quarter of 2007. North American demand was lackluster but overall growth in that market was fueled by strong exports.

As you will see in the following slides, the increase in naptha prices late in the quarter led to a reduction in cracker margins compared with Q4 of last year, but this had a relatively limited impact on Basell.

Volatility continues to affect the polyolefins market in North America, although we do have some stability from the improved overall demand picture.

Monomer and cracker feedstock volatility continues to pose a challenge as we progress through 2007.

Moving to the next slide, we see, in black, the naphtha price development over time and, in purple, the naphtha quarterly average price. We believe this is a useful way to view naphtha price development when analyzing cracker margins in Europe where monomer prices are set on a quarterly basis.

As you can see, the average first quarter price for naphtha increased at the end of the first quarter and matched the average levels seen in 2006.

With the naphtha pricing pattern in mind, let's look at how European cracker margins have evolved. This slide has the naphtha price plotted in red, and the European quarterly ethylene price displayed in black. Of course, the cracker margin calculation is not a straightforward one to our ratio, but what I am illustrating here are that the price trends of ethylene feedstock and ethylene during the quarter.

The first quarter ethylene price settlement was down EUR45 from the fourth quarter of 2006. Propylene was also lower by EUR45 a ton. Cracker margins stayed strong in the early part of the first quarter as prices for propylene and ethylene fell in anticipation and realization of lower naphtha pricing. When naphtha pricing rose later in the quarter against quarterly fixed propylene and ethylene prices, cracker margins were squeezed. The resulting margins were, on average, slightly better than the average margins in 2006 and ahead of the same period of the previous year.

Now I will view the performance of Basell's three businesses starting with technology. Our technology business, which licenses Basell's industry-leading polypropylene and polyethylene process technologies concluded three license agreements in the first quarter for a total of 980 kilotons of annual capacity. The good performance of the catalyst business also continued in the first quarter with sales volumes ahead of last year.

The Q1 2007 pro forma EBITDA for the technology business was 17% behind that of the extraordinary performance obtained in the same period of 2006 due primarily to lumpiness in license income reporting.

Moving on to advanced polyolefins, our first quarter results for APO were 23% ahead of the same period in 2006. The businesses performance was underpinned by strong volumes, which grew by approximately 9% compared to the first quarter of last year. This strong increase came mainly in our polypropylene-based composites and alloys business.

While Basell's proprietary Catalloy process grades continue to exhibit strong growth in sales volumes, competition has resulted in lower margins and slightly weaker results for this business. The technology in advanced polyolefins business has continued to perform exceptionally well. As a privately held company, we are sometimes a bit less obsessed with the distinction between commodity and specialty chemicals, but I would note that by traditional definitions, the share of specialties in our business is continuing to increase.

Now, moving on to the polyolefins business -- the first quarter pro forma EBITDA of the polyolefins business was EUR294 million which was EUR155 million ahead of the result for the same period last year. The excellent first quarter results of Basell's European and international polyolefin businesses, which were significantly ahead of last year's performance, were supported by much-improved results from our North American's polyolefins business.

Here is a look at the polyolefins business by region starting with Europe. European market conditions continue to be strong in the first quarter with good demand and tight supply. Polyolefin Europe's first quarter 2007 sales volumes and polymer spreads were ahead of the same period in 2006. First quarter Polyolefins Europe EBITDA was 65% ahead of the same period in 2006.

The North American domestic polypropylene market volume growth in the first quarter was essentially flat but strong export volumes absorbed excess capacity driving total growth up by 5.9% and supported margins.

Basell's sales volumes for the first quarter were up significantly compared to the same period last year. As a result, the first quarter polyolefins North America EBITDA results were significantly ahead of the performance achieved in the same period of the previous year.

The Polyolefins International results in the first quarter were ahead of the same period of the previous year mainly due to higher spreads.

Shall we take a pause while you --

I apologize, but we're having problems for those of you following on the Internet on the live meeting, the system seems to have blocked, so we apologize.

Why don't we pause for a moment, otherwise I'll continue.

How about this -- Dylan, can you hear this? Can you help us?

Yes.

It's stuck.

Okay, which --

Okay, it seems to be back up, okay.

Very good.

Sorry about this.

This slide showing how our joint ventures performed was prepared on a normalized basis by excluding the sold or fully consolidated JVs. This is done to facilitate comparisons between time periods.

The first quarter performance for the joint ventures was ahead of the same period last year, and Basell received EUR5 million of dividends from these associates in the first quarter.

So to summarize -- we're stuck again?

Dylan?

It seems to be stuck. Do you need Slide 13?

I need the next slide. Next one. Okay.

Okay, to summarize, the 2007 first quarter EBITDA result was 71% ahead of the same period in 2006. Our technology business was significantly ahead of the previous year. Advanced polyolefins continue to show strong sales growth value generation. Polyolefins Europe was ahead of last year supported by good polymer spreads, volumes and cracker margins. Polyolefins North America's performance was significantly ahead of last year. Polyolefins International performed well according to expectations and our joint ventures have achieved results ahead of our expectations.

Now let me move on to financial performance.

Dylan, next slide, thank you. Next slide again.

Okay. The first quarter pro forma EBITDA was EUR374 million, which was 155 million or 71% higher in the same period in 2006. This was the best single quarterly EBITDA ever for Basell, which was formed in the year 2000. We are pleased with this result and also to report that our LTM pro forma EBITDA at the end of this quarter is EUR1,135,000,000.

First quarter operating cash flow before investing cash flow in debt service was EUR201 million driven by the strong operating results. Despite volatility in feedstock and polymer prices, I believe we have managed our working capital exceptionally well. Projected spending for capex is tracking very well against the plan.

Our net debt position is EUR784 million lower than at acquisition in 2005. Our current net debt to EBITDA ratio stands at 2.1 times compared to 4.6 at acquisition closing. Basell's financial covenants include ratios with respect to EBITDA to net interest expense, net total borrowings to EBITDA, and senior borrowings to EBITDA. Financial covenants are calculated and tested quarterly. The group within compliance of financial covenants and the financial outlook for the year 2007 indicates that the group expects to meet all of its financial covenants.

Basell's achievements continue to make the headlines in many leading chemical industry publications. Our licensing success was highlighted by the press following the recent sale of our 50th Lupotech technology to Copco for a 250-kiloton-per-annum polyethylene plant in Qatar. Subsequent to this press coverage, we had a sale of another Lupotech key technology license to Polinter in Venezuela for a new 300-kta polyethylene plant.

Basell Polyolefins North America business continues to review an adjusted cost profile as seen in the announcement of its intention to relocate its headquarters to a smaller fit-for-purpose location. In addition to the announcement of the office relocation, Basell North America announced the restart of its 220-kta polypropylene line in Bayport, Texas.

This line will allow support for the growing demand for PP Metocene product lines being produced at Bayport.

Basell announced also the expansion of distribution roles in Europe for Albis and ultra-polymers, and we also established a new sales and marketing team to support plastic pipe customers in China.

Before we open the call to your questions, I'd like to provide you with an update on the operational performance of the first two weeks of the second quarter. Our safety performance year-to-date continues to be outstanding. Technology continues its good performance with strong catalyst sales and our licensing business has made good progress in many licensing projects, demand continues for our APO products across all markets and product lines.

In our polyolefins business, the second quarter has started very well. Fundamental supply and demand conditions across product lines are basically unchanged setting the stage for further strong earnings and cash flow throughout the year.

And, finally, a word on our senior secured financing. Because of the strong performance and continuous debt reduction over the past two years, we have been able to refinance our senior secured bank debt in the second quarter. We have negotiated much lower interest rates, which will allow us to save tens of millions of euros per annum on interest costs. In addition, our corporate rating has been upgraded one notch by Standard and Poor's to BB -, and has been put on watch for upgrade by Moody's.

S&P also upgrade its rating on our high yield by one notch to single B.

This concludes our presentation. Thank you for your continued interest in Basell, and the lines will now be open for your questions.

(Operator Instructions) Kristen McDuffy, Goldman Sachs.

I was wondering if you could tell us what your new interest rates are on the bank debt and how much -- the size of the new facility and how much cash you'll be using to repay a portion of your existing bank debt?

Well, if I gave all the details there would be nothing to talk about in the Q2 conference call. Well, actually, it's not publicly disclosable yet, but I can tell you that the interest margin is significantly below 1%, and the proceeds will, of course, be used to refinance the existing SFA that dates from the acquisition in 2005.

Okay, so the new facility will be close to the same size as your current bank facilities?

Yes, approximately.

Okay. And I was wondering, could you tell us what the FIFO benefit was during the quarter?

Actually, there was very little benefit from inventory, it was actually, I would say, immaterial. We do sometimes, if there are dramatic changes in monomer price, and the polymer prices react to that, you can sometimes have an inventory effect that goes through. So if, for example, if monomer prices were to go up, you would have an increase in earnings as you sold inventories produced with cheaper monomer or vice versa. The impact in the first quarter was negligible.

[Khali Ramachandra], State Street Global Advisers.

Thank you. I was wondering, now that your company, its leverage is down to 2.1, what type of leverage would you be -- and where we are in the cycle -- what type of leverage would you be willing to increase, I guess -- there's been a number of articles and papers about how you've looked at different companies, and I'm curious what type of leverage would be adequate at this point in the cycle for your company?

That's a very good question, of course. I think that there is no single correct answer for that. I think that most people would agree that our leverage now is very conservative even for this point of the cycle, if you believe in exactly the cycle that's predicted by consultants.

Some of our competitors are going to be entering that downturn with much, much higher leverage than we have if, indeed, the downturn comes when expected.

But I think if you think about Basell stand-alone, there aren't really that many choices that we have. The leverage we have is the leverage we have. Our ability to pay dividends is restricted by the high-yield bond indenture.

If we were to make acquisitions the amount of leverage we'd be willing to take would very much depend on the type of acquisition we were doing and how we felt about the cyclicality of it.

So I think that -- I would say a couple of things -- the leverage we have now is very conservative. We would be willing to have more going into the cyclical downturn, but how much more would very clearly depend on what the structure of our business would be, and I don't think we'd want to increase it just for the sake of increasing it.

So it's hard to answer that question in isolation.

So in any sort of acquisition would it be conceivable to think that you would be comfortable leveraging the company at, say, five times? Or anything greater than five times?

I wouldn't be able to answer that without really carefully looking at what kind of assets you were adding to Basell. I don't think that for our core polyolefins business, a five-time leverage would be something that we would consider to be completely normal going into a downturn, to put it mildly.

What about four times?

Well, there's a certain place where it gets to be normal. If you look at some of our competitors, they are four times leveraged. Clearly, being in the finance function of a company like Basell, you're happier being two times leveraged than four times leveraged going in. But it's really an academic discussion because there's not any way for us to change that leverage in our existing configuration.

Richard Edelman, Deutsche Bank.

A few questions -- in addition to lowering the margin on the bank debt, is there any other additional flexibility that you gained, either with respect to eliminating the cash flow sweep or any other terms, going forward? That's the first question.

And maybe I should wait and ask the questions in order then.

Yes, it's easier to do it that way. Yes, of course, the new facility is obviously more flexible, but, really, for the last several months we've looked at our primary restrictions as the ones that you know under the high-yield bond indenture, because yesterday was always repayable with no penalty so we knew that we could always eliminate those covenants if we needed to.

So, of course, there is no sweep in this. It's really basically a plain vanilla crossover commercial bank financing, if you want to look at it that way. So they are not the usual LBO types covenants in it. Those covenants remain under the high-yield bond indenture.

Sorry -- no financial covenants under the agreement?

No, no, there are some covenants, but more of the standard commercial banking type of covenants, not, you know, think of crossover investment-grade type of commercial bank financing. That's what you're looking at.

Okay, the next question was just related to the new cracker in Germany -- perhaps you could disclose how much EBITDA that would have contributed in the quarter -- just to try and position how much of that increase in the division was attributed to the new acquisition.

Yeah, I mean, it's not that significant. You're talking about something on the order of magnitude of EUR5 million or so.

Okay. And then I guess it's somewhat surprising with the strong environment that you've chosen not to increase dividends more significantly. Obviously, that's restricted by your partners and the minority stakes that you have there, but are there any plans or strategic holds in conjunction with those partners to begin to increase those -- the dividend payments more significantly in future periods?

Yes, of course, but I think that the -- if you were looking at the results for the first quarter in terms of dividends from associates, you would find that disappointing for the environment that we're in and rightly so. The expected dividends for this year are not the first quarter times four. They will be, we believe, very significantly higher than that.

Our first Saudi joint venture is now in a position to pay significant dividends, our Polish joint venture is now in a position to pay dividends, and a lot of our JVs will be paying reasonable dividends this year.

So the first quarter is not a guide to what you should expect for the year.

Okay, and obviously 2006 was a dropoff versus 2005 in terms of those dividends, so maybe even significantly above the 2005 level?

That would not be unreasonable to expect. There is some lumpiness in dividends but, in general, you should expect to see increasing dividends as joint ventures -- as new joint ventures come onstream and especially the Saudi joint ventures will be producing a lot of cash.

The second two Saudi joint ventures will not be in a position to produce cash in the next couple of years since they will only be starting up in 2008-2009. But the existing one will be -- and other JVs -- are also producing very nice cash flows.

Okay, and last question, if I might, there's been a lot in the press about Kazakhstan. We've talked about this in previous calls, and you've discussed project finance debt for this investment as well as sharing the equity with your partners. Can you just review the status of where that stands, the total costs, does it involve both polypropylene and polyethylene production because I think there's some different sources out there that are saying different things -- and what the potential funding requirement might be based on what you right now and negotiations where they are?

I don't think much has changed from previous calls, which would also lead you to conclude that it probably won't be quite as fast as we had maybe hoped earlier. The project is moving forward, but it is a greenfield with all that implies. It will be a PP and PE project with olefins as well. It is supposed to be fairly large, a several billion-dollar project, that's what you've seen in the papers.

However, we would expect -- we normally try to project financings up to 70%, and we normally take a minority stake in these things. So the funding requirement, you can do the math, it's certainly not in the billions, it's in the hundreds of millions, and hopefully in the low hundreds of millions financing requirements.

Those financing requirements will not be material in 2007, and probably would not be that significant in 2008, either, at this stage.

Bill Hoffman, UBS.

Just a couple of questions on the heels of that -- to Rich's question. Can you talk us through any other funding requirements you've got or the JVs this year as well as sort of a follow-on question that as you look through your asset base today, what, if any, jurisdictions do you want to increase your exposure? I would assume over in Asia, but I just wonder if you could sort of talk through how you're looking at your asset base as you go towards the next downturn a couple of years out?

Well, actually, we have no material investment commitments for JVs right now. So except for, obviously, the Kazakhstan investment, which will come in the future, there is nothing immediate that requires funding.

In terms of what jurisdictions we like, really, we like projects in places to have cost advantage feedstock. The traditional model of development has been for countries like Saudi Arabia to say we want to add value to our natural resources, therefore, we will give allocations of hydrocarbons at attractive prices, and what happens usually is that a local partner will take a majority and will bring in a strategic partner like Basell to help develop the project, to provide technology, to provide catalyst, and to provide marketing.

Those are the kinds of projects we like whether they're in Saudi Arabia, whether they're in other countries in the Gulf region, whether they're in North Africa, even in places that may sometimes be unusually like, for example, our Polish joint venture also benefited from cost advantage feedstock from our Polish partner, PKN Orlen.

So, really, we are pretty much, I would say, omnivorous in our taste for jurisdictions as long as you have the right feedstock arrangements, and we are consistently looking throughout the world for interesting opportunities.

Any thoughts of -- just from a pure acquisition standpoint as opposed to a joint venture type strategy -- you know, given the fact that you've got the debt capacity today to move into those markets in a bigger way?

We would love to do that. As you've probably seen from our recent performance, we tend to be reasonably conservative in our valuations, and that's difficult in today's environment where assets tend to be quite expensive.

So, yes, of course, we could consider expanding through acquisition but, in general, we have not seen very many attractively priced options in our industry to expand by acquisition.

Thank you, and then a final question, Alan, I wonder if you can address the parent company, Access Industry, purchases 8.3% Lyondell option there?

Well, it's obviously difficult for me to address that. That was something that was purchased by Len Blavatnik, and I think he made his intentions very clear in his public disclosure on that. You know, of course, in those public disclosures you generally disclose anything that you might possibly do, that's sort of the rules of the game, and he has disclosed that, but there is nothing that I am aware of that's imminent with regard to that.

[Marco Bowman], BlueBay Asset Management.

Hi, it's [Mike Brohm] of BlueBay Asset Management. Just very quickly, historically, the strategy of the group has always been to be less than three times leveraged at the peak of the cycle, which you definitively are, to basically expend capital as you've set in costs or feedstock cost advantage to countries and to look for value-enhancing acquisitions. Given the bank facility you just signed, which is obviously very attractive, all the speculation about some sort of large acquisition seems, to my mind, not really to fit with anything that's been said historically as to the strategy of this group.

Is that the case or is it effectively that negotiations have been going on between your owners and yourselves as to whether or not that needs to change?

Well, you know, I think, again, if the acquisition of Basell itself by Access Industries was kind of an example of where you did have more than three times leverage when it was done, where most of the people in the world did not see the value in the acquisition but Access did, there were acquisitions like that for Basell to do where we really believe that there was exceptional value. Then you could see something like that happen. But I think that your analysis of our strategy is correct and, indeed, that is what we have executed on if you look over the last two years.

So your recap of our strategy is correct. That does not mean that we would not continue to look at things that are larger, and that's what you see in the newspaper reports but, again, we will not execute unless we see exceptional value, and I don't think that there is any conflict between our owner and our management on that. I think there is a very good collaborative relationship where we talk about these things and look at them. We will look at things, but we will not act unless we see exceptional value.

So if we were to discuss a theoretical asset in North America, which has already been referred to, what theoretical value could you extract from that given that North America is effectively immature market? I mean, obviously, you are under-represented. I mean, you would get some back integration advantages through completing that acquisition, but it doesn't seem particularly significant given that you can put capital to work in low-cost raw material countries, whereby you can make significant leverage returns from startup without committing significant capital.

You know, again, I would hate to speculate on ongoing things like that and, clearly, Lyondell has taken a stake in that company. Again, I would just reiterate that there would have to be something that we saw in the value that is obviously being missed by other people.

Mature markets don't necessarily frighten us. If you look at the results that Basell is producing in those mature markets, they are quite attractive and, again, at the time of Basell acquisition this was not seen by other people in the industry and in the market. It was seen by Basell management and by Access Industries.

So, again, without commenting directly on that, I would say it would really depend on some kind of specific analysis.

Mike Siegel, Deutsche Bank Securities.

Staying in North America, I'm just curious about the restart of the Bayport facility. Basically, you're short monomer in North America now. Do you have a monomer supply high enough to feed that?

Yes, a monomer supply in North America is actually not problematic. It is available at market prices in quantity. So that's one very interesting thing about the North American market. There is a liquid and deep market for our raw materials. So that's not a problem at all for us in North America.

And staying North America, the export market was good in the first quarter. How would you characterize it now?

Well, it does fluctuate, of course, and it depends on the strength of the dollar, it depends on prices in Asia, it depends on a lot of things. So we're actually -- it's a good question. I think that we are expecting that in the second quarter it will be a bit weaker for various reasons, and it also depends on competitiveness of North American monomer.

The flip side to propylene being a liquid and deep market is that it's also subject demand for gasoline in North America and all sorts of other factors external to our industry. So I think that it's a good observation and that some of the export that we saw in the first quarter may be less attractive in the second quarter.

And just, lastly, on the relocation of the headquarters. How much do you expect to save?

It's a few million a year, actually, it's reasonably significant.

[Ben Darrington], Citigroup.

I've heard from a few sources the [Bedford G] plastics were actually made by Access and not by Zelitor. Can you just clarify that for us, please?

The Bedford G plastics was made by Access and not Basell at all?

Yes.

Again, the rule is that we're not -- we do not comment on M&A activity. The only thing I would say is that I would not characterize the newspaper reports of it as inaccurate. So basically you can somewhat believe what you read in the papers, and I believe the newspapers did refer to Basell being involved in it.

Okay, and any plans, near-term plans for the 500 million facility?

No.

Roger Spitz.

Thank you. Can you provide any sense of the split in EBITDA for polyolefins Q1 '07 among the three geographic regions excluding the 51 million [OPEB] gain which I assume was all North America?

You know we never give that geographical breakdown. I think that we did say, though, that North America performed significantly better than last year. We are very pleased with the turnaround in North America, and it's now contributing very nicely to our EBITDA results. But, beyond that, I would prefer not to give a breakdown.

Okay. Do you still look to spend capex of around EUR250 million to EUR275 million in 2007?

Yes, we're on target for our capex spend.

Okay. Can you give some guidance on cash taxes?

Some guidance on cash taxes. That's very interesting, actually. They're coming in a bit lower than we had expected, but I believe the guidance we gave before was in the range of about 150. I would say that you would leave that pretty much where it is, slightly maybe lower than expected but, of course, the higher EBITDA drives higher taxable income. So I would keep it about that level.

Okay, and, finally, on the last call you mentioned that you expected after midyear you might have around 100 million of RP basket available to make shareholder dividend. You'd obviously make the slight change. I guess you inferred or implied that you might make a shareholder dividend. Are you still thinking along those lines?

Yes, we will pay dividends to the extent that we are allowed to do so, and, in fact, the basket is about EUR140 million, and we will make that distribution.

Just a question -- does the 51 million gain on that OPEB thing, would that boost the RP basket?

The 51 million is actually classified under IFRS and under the indenture as ordinary income. So it would.

(Operator Instructions) No further questions.

Okay, well, I'd like to thank everybody for joining us today, and webcast will be available on the Internet as of tomorrow if you want to call again. Thank you and have a pleasant day.

Thank you, that does conclude your call. You may now disconnect, thank you very much.