Ramaco Resources Inc (METC) 2022 Q4 法說會逐字稿

Good morning everyone and welcome to the Ramaco Resource Incorporated Fourth Quarter 2022 Earnings Conference Call. (Operator Instructions)

At this time, I'd like to turn the floor over to Jeremy Sussman, Chief Financial Officer. Sir, please go ahead.

Thank you. On behalf of Ramaco Resources, I'd like to welcome all of you to our fourth quarter 2022 earnings conference call. With me this morning is Randy Atkins, our Chairman and CEO; Chris Blanchard, our Chief Operating Officer, and Jason Fannin, our Chief Commercial Officer.

Before we start, I'd like to share our normal cautionary statement. Certain items discussed on today's call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramaco's expectations concerning future events. These statements are subject to risks, uncertainties and other factors, many of which are outside of Ramaco's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and except as required by law, Ramaco does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. I'd also like to remind you that you can find a reconciliation of the non-GAAP financial measures that we plan to discuss today in our press release, which can be viewed on our website ramacoresources.com.

Lastly, I'd encourage everyone on this call to go on to our website and download today's investor presentation under the Events Calendar. With that said, let me introduce our Chairman and CEO, Randy Atkins.

Thanks, Jeremy. Good morning to everyone and thanks for joining the call. The fourth quarter was another challenging quarter. Indeed, last year was one of the most volatile market environments the company has faced. We experienced two impactful operational setbacks that was sudden.

That was the ignition of Berwind to close the mine and cost us 20% of our '22 production. The other was more long-lasting. That was the continued logistical and rail performance issues we encountered throughout the year. Despite those headwinds, '22 was easily our best year financially.

We generated more than $200 million in adjusted EBITDA. It was almost 3x higher than '21. This was also more than we did cumulatively over the past 5 years as a public company. I can think of no other public coal group that has achieved that level of growth in that shorter period and also starting from scratch.

Looking ahead for '23, our goal is quite simple. We want to get back on track and execute. This year, we hope to print some meaningful increases not only in production, but also in overall processing and sales capacity. We will continue to focus on cost reductions. And despite a great deal of macro uncertainty, this year has already started with encouraging signs in sales and pricing.

Since we went public, we always spoke about a primary goal of returning capital back to our shareholders. We took the first steps there in '22 with our first regular phase dividend. We promptly doubled that payout amount and recently increased it again last December by a further 10%. We expect to discuss dividends again as the year progresses. We also have our tracking stock now in registration, which we will discuss once that is permitted.

But overall, we have tried to design our capital return policy to appeal to long-term investors. Simply put, as we grow, we intend to have regular steady increases in the amount of cash headed back to shareholders. I'm also extremely pleased that despite a volatile macro environment, our marketing team has booked significant new metallurgic sales since our last update in late '22.

We previously guided we would tailor our sales strategy to those markets that would yield the best netbacks and with a bias to retaining price optionality. We have now done that. Just over 20% of sales this year are committed to traditional domestic steel mills at fixed prices. At the high end of guidance, we have 2/3 of sales priced for export and mainly at floating index pricing. Our view is that in this market cycle, index prices will achieve higher margins than traditional fixed prices.

Adding more optionality, we still have almost 1 million uncommitted tons left to place. This represents about 30% of our total sales guidance, again, at the high end of the range. Again, these tons are expected to be sold for export and at index.

Summing up our '23 book, we've already placed 1.6 million tons of fixed prices over $200 a ton. This net back to triple-digit margins based on the midpoint of our cost guidance. At the same time, as I said, approximately 2 million tons or 2/3 of total sales will be priced at mostly index-based export business.

On financial performance, while '22 was a record year, we encountered headwinds. First, of course, was the unfortunate ignition at our Berwind #1 mine in July. (inaudible) and the West Virginia state regulators have recently confirmed that it was probably caused by a lightning strike near its surface mine portal.

Fortunately, that mine restarted last week. We expect by the third quarter, Berwind will hit full production from the first section. We also anticipate Berwind complex to become the second largest mine complex at over 1.5 million tons once we reach full production. Another issue was that last summer, we sold some tons into the niche crossover business of selling U.S. met coal to European utilities. This was for thermal use, but at that time, priced much higher than net realizations.

When we concluded a floating deal against the API2 index in July, the pricing was around $400 a ton. Unfortunately, the API2 dropped by roughly 2/3 during the contract term, and we took a large hit on that sale. We also estimate that the litany of rail and logistic issues negatively impacted adjusted EBITDA by an average of $14 million each quarter. It was almost like Murphy's law. We always seem to get rail delays just at a quarter's end. We are now hopeful that in '23, logistics will return to a more normalized cadence based on what we are hearing from our railroad partners.

Looking forward, based on simple fundamentals, '23 is poised to be a very positive year. Starting in the second quarter and building throughout the year, we have several near-term developments, which will begin to impact earnings. First is the 1 million ton expansion in processing and shipping capacity at the Elk Creek complex, which is matched with an increase in production to 3 million tons. Another is the reopening of the Berwind #1 mine.

Lastly, in the second quarter, we also expect to begin initial production at our new Maben mine. This will be a 250,000 ton per year low-vol mine mined at very attractive coal. In '23, at the high end of guidance, we now anticipate a 825,000 ton increase in production over '22. We also expect a 1 million ton increase in sales enhanced by the roughly 150,000 tons of carryover coal we did not ship by year-end because of rail logistics.

By the third quarter, we anticipate producing, shipping and selling north of a 4 million ton per annum run rate. This, of course, sets us up for some solid growth in 2024. In addition, this year, we hope to decrease cash mine costs by 5% or about $1 to $2 per quarter as well as have a significant $50 million or 43% decrease in capital expenditures versus '22. Over the past 18 months, we've made 3 accretive reserve royalty and infrastructure acquisitions.

At this point, we do not contemplate further acquisitions to reach our optimal level of 6.5 million tons of production over the coming years. Our fundamentals alone from adding the additional production, processing and sales capacity that we expect, we are confident that '23 will be another record year on both net income and adjusted EBITDA. We anticipate sufficient internal cash generation to meet all capital requirements for our production growth as well as for repayment of all term and acquisition debt by later this year.

As I said, we also expect to revisit our dividend levels as the year moves forward. In closing, our goal for '23 again is simply to execute. We have 2 main objectives: production growth and a steady increase in capital return to our shareholders.

With that, I would like to turn the floor over to the rest of the team, discuss more detail on finances, operations and markets. So Jeremy, please start with a rundown on our financial metrics.

Thank you, Randy. I'll start by going over our fourth quarter 2022 financial highlights. Adjusted EBITDA of $32 million was up 1% year-over-year. Quarterly net income of $14 million was down from $19 million in the same period of 2021. Adjusted EBITDA was negatively impacted by $4.4 million due to idle costs at our Berwind mine close to July ignition. Net income was negatively affected by $4 million.

On a full year basis, 2022 adjusted EBITDA was $205 million compared to our previous record adjusted EBITDA of $79 million in 2021. Adjusted EBITDA was negatively affected by roughly $9.5 million of Berwind idle costs. On a full year basis, net income was $116 million and diluted earnings per share were $2.60. These were both up by roughly 190% year-on-year.

Our fourth quarter results were negatively affected by extreme cold temperatures compared to expectations set in early December 2022, which caused almost 150,000 tons of shipments to be pushed into January of 2023 due to logistical challenges. We also saw a monthly 50% drop in API2 index pricing, which impacted margins on a large seaborne sale to Europe.

Turning to our full year 2023 outlook, I would like to touch on a few of the key areas in our guidance tables. First, we anticipate production of 3 million to 3.5 million tons with sales roughly 200,000 tons above production due to the impact of carryover tonnage.

At the high end of sales guidance, we anticipate more than a 50% increase in year-over-year sales. Second, we anticipate cash cost per ton of 97 to 103, which is a roughly 5% decrease from 2022 cash costs. Third, we anticipate CapEx of $60 million to $80 million, down from $123 million in 2022.

I would note that all of these annual figures are unchanged from the guidance we gave in December. One thing I want to point out is that given the ramp of production and sales expected in 2023, we are giving more granular quarterly guidance than normal. Specifically, we expect Q1 production of 625,000 to 700,000 tons and sales of 625,000 to 675,000 tons with realized pricing of $180 to $185 per ton and cash costs of $103 to $109 per ton. Q1 realized pricing guidance as a whole is negatively impacted by roughly $7 a ton due to the final January API2 index linked cargo.

Clearly, we anticipate Q1 to be the lowest quarter of the year in terms of adjusted EBITDA and net income. Our production and sales should increase meaningfully throughout the year on the back of Elk Creek's plant capacity increasing by 50% in the second quarter as well as on the back of the return of the Berwind mine, which occurred last week. We will also initiate production on the Maben mine in the second quarter. We would expect cash costs to decline as production and sales increase due to economies of scale.

Now turning to our longer-term growth outlook. We are maintaining our medium-term target of 6.5 million tonnes of production. I would like to point you to Slide 6 and 7 in our presentation. As a reminder, we believe we can get to 6.5 million tons of production at a very favorable CapEx intensity. Specifically, for a total of $121 million of growth capital split between 2023, '24 and '25, we anticipate completing the full build-out to 6.5 million tons of annual production. This is almost triple 2021 production of 2.2 million tons.

At these levels, we would envision Elk Creek growing to almost 3.5 million tons from 2 million tons last year. The Berwind complex as a whole growing to almost 2 million tons from 400,000 tons last year and the Knox Creek complex growing to more than 1 million tons from 200,000 tons last year. I would remind everyone that 2022 was peak CapEx for us with over $90 million of growth capital. We anticipate growth capital of less than $30 million this year with overall CapEx down by more than $50 million.

Importantly, as Randy detailed, in addition to our industry-leading production growth profile, we continue to anticipate returning increasing amounts of cash to shareholders while also paying down the majority of our remaining debt this year in order to maintain our strong balance sheet. In short, we view Ramaco as both a growth story and a capital return story, which we believe positions us uniquely among our peers.

I would now like to turn the call over to our Chief Operating Officer, Chris Blanchard.

Thanks, Jeremy. As Randy indicated in his remarks, we have had a number of transformational changes in the operations portfolio that have been completed recently or are imminent. Most importantly is the restart of the Berwind mine in just the past several days. The recovery of the mine was completed safely without any accidents to any employees or contractors. We want to thank (inaudible) in the state of West Virginia for their professionalism and working with us to recover the mine and complete our joint investigations.

We also thank and recognize the efforts of the mine rescue personnel and our own miners who worked tirelessly through challenging conditions. All of the mine infrastructure has been repaired and all section mining equipment is active and in production. During our extended outage, we took several additional steps to upgrade and add redundancies to our ventilation system.

As a reminder, the accident occurred during scheduled routine maintenance while the mine was idle. Although the mine has just returned to production, we are encouraged by the productivity levels reached in just the first few days. We have modeled a conservative ramp-up of production at the mine, but expect to be back at fully ratable levels by the third quarter of 2023.

Staying at the Berwind complex, during the fourth quarter of '22, we completed the upgrade and the modernization of the Berwind preparation plant. We commissioned the plant in November and saw overall immediate cost per ton reduction from the logistics savings. As the Berwind mine itself production ramps, these cost savings will become substantial. Given the scarcity of on-road coal trucks eliminate the hall to our Knox Creek preparation plant also eliminates another logistics problem.

Turning to Elk Creek, the 50% capacity upgrade of our preparation plant by up to 1 million clean tons per year is reaching the final stretch. We will complete the upgrade in the second quarter and should see an immediate improvement in processing throughput. The expansion of production at our mines at Elk Creek, which we put in place during the second half of '22, have all completed the ramp-up periods and are all now operating at full capacity. No additional growth capital or hiring will be required at these mines in 2023 to serve the larger preparation plant.

Importantly, we are seeing the financial impact of the full productivity of these mines. All of the 2022 advanced hiring and training of our coal miners is now bearing fruit in higher productivity and lower costs. We also continue to work closely with the CSX railroad and are confident that their systems are prepared for our additional trains and shipments from Elk Creek, which will start during the second half of the second quarter this year.

Finally, we will bring the Maben property acquired last year into production early in the second quarter this year. Our initial surface and highwall miner production is planned for processing and shipment from the Berwind plant. We are excited about the long-term potential on the Maben property and the high quality of the coals in this reserve. We continue to execute on our multiyear growth trajectory and our expanding portfolio of mining complexes to ultimately in excess of 6 million tons, with today's historically robust pricing supporting us.

For a deeper discussion of the coal markets, I'd like to turn the call over to our Chief Commercial Officer, Jason Fannin. Jason?

Thanks, Chris, and good morning, everyone. I will share what we are seeing in the markets in our current and forward sales outlook. As we begin 2023, global steel demand and pricing have rebounded. Hot-rolled pricing is up to $1,100 per ton in the U.S.

Lead times have extended to 8 weeks, which is the highest level since Q3 of 2021. Blast furnace capacity has started to return, which was idle during the second half of '22 in the U.S., Europe and parts of Asia. China has entered its 0 coded policy and is instituting growth initiatives, pushing its manufacturing PMI to a 10-year high last week and also in its 2-year de facto ban on Australian coals, all positives for coking coal markets.

At the same time, the supply response remains muted due to years long under investment in the coal space. Indeed, supply side tightness remains the dominant driver of elevated pricing for the foreseeable future. Since the start of the year, we have seen coking coal prices improved 25%.

Forward curves point to continued strong pricing for metallurgical coal through '23 and '24. Exports from the U.S. saw negligible growth during 2022. Output is still below pre-pandemic levels. In a year already fraught with rail challenges, extreme temperatures in the U.S. in December of '22 caused even further logistical delays. Our railway partners face many of the same challenges we did during 2022, particularly on the labor front. We applaud their hiring efforts and service improvement initiatives and continue to see improving performance.

Looking ahead to 2023, as Randy said, we have focused on attaining indexed price export met coal business to take advantage of what we feel will be a strengthening market as the year progresses. Roughly 2/3 of our forecasted sales will be sold into the export market. We currently have committed sales of 2.6 million tons, of which 1.6 million tons are booked at a fixed price just over $200 per net ton at the mine with the remaining 1 million tons priced against metallurgical indices.

This leaves us with about 1 million tons of unpriced export volume remaining to sale at the upper end of our forecast and sales volume. We have also executed on our plan to grow our position with domestic specialty and niche coal consumers, and this attractive market now represents over 10% of our forecasted sales. Just over 20% of our forecasted sales volume is placed with traditional coke makers in North America.

Additionally, we have recently performed our first trial shipment into India with excellent results and strong netback pricing and are in discussions with other Pacific market consumers for additional near-term test cargoes. In line with that, we are now seeing increasing interest from customers in Japan and other Pacific destinations.

As Ramaco continues to expand production, we view the Pacific market as a long-term strategic consumer, especially considering our growing portfolio of low ash, low sulfur, metallurgical coal, which spans the full spectrum of quality, low, medium and high volatile coking coals.

Overall, we like the current market conditions as they apply to Ramaco. We continue to see a protracted imbalance of coking coal supply and demand, which is supportive of a prolonged period of elevated cooking coal pricing levels. We also see a Pacific market lacking (inaudible) supply as their demand continues to grow, providing opportunities for expansion of U.S. market share.

With that said, I would now like to return the call to the operator for the Q&A portion of the call. Operator?

(Operator Instructions) And our first question today comes from Lucas Pipes from B. Riley Securities.

And good to hear about the progress of Brewind. My first question is about 2023 guidance in the context of the delays in Q4. Should we think about a degree of conservatism embedded in the guidance, especially for Q1, again, kind of thinking about the tons that were stuck at the end of the fourth quarter.

It's Jeremy here. So I mean, I think Randy mentioned in his prepared remarks that we basically had, on average, about a $14 million EBITDA impact from carryover tons each quarter. So I mean, certainly, we hope this trend reverses, but I'd say we're taking a bit of a wait-and-see approach there.

Lucas, this is Randy. I would call it a trust and verify approach, $14 million per quarter is a pretty decent hit to us. So we're definitely trying to approach this year with a little bit more conservatism towards what we expect on rail performance.

And then I may come back to that later in the queue. But for my second question, I wanted to focus a bit on the market. And sorry if I missed it, what is the API2 exposure in your 2023 sales today? And then with the strength of the domestic steel market, are you seeing any increased inquiries from domestic steelmakers -- would appreciate your perspective on those 2 points.

Lucas, I'll take the first part and then let Jason handle the second. So we have -- after January, we had 0 API2 exposure and frankly, we weren't even supposed to have any this year, but we had some carryover tons of about 50,000 tons that got shipped in January that were linked to the API2 index. So you certainly see an impact to our Q1 pricing guidance on the back of that. Jason?

Yes. Lucas, this is Jason. On the domestic inquiry, you're certainly seeing those pick up in the last, I would say, 4 to 6 weeks of additional volumes in Q2 and through the back half, certainly, again step with what we're seeing on the pricing side, the demand side and the lead times there. Yes.

Our next question comes from David Gagliano from BMO.

I want to ask about the '24, '25 outlook in the bar charts. It looks like the volumes in 2024 used to be -- or last quarter were 5.5 million tons, now 4.5 million. Can you explain what's changed in the last 3 months to reduce the targeted production growth in 2024?

Hey David, it's Jeremy. So I'd say, right now, we're targeting 4.5 million tons in '24, but we certainly have the ability to increase that to over 5 million tons should we pull forward some of the capital projects that we deferred. So we'll just kind of see how the year plays out, but that's the reality is it's based on the fact that we've deferred a few projects.

And then just on the near term, just a clarification question for the full year 2023. The commentary was about pricing that's open to index pricing on a go-forward basis. And I think there's what -- I'm going to hit these numbers wrong, but I think there's 1 million -- 1.6 million tons priced at $200 a ton or something like that. And then the common [ph] was another $1 million open for pricing. But obviously, the shipment volume is 3.2% to 3.7%. So that only adds up to 2.6 million. What's the -- isn't the rest also open for pricing or is some of this already sold under domestic contracts?

Yes. I think – David, this is Randy. I think the 1 million is open tons uncommitted. We've got another 1 million tons that's committed, but it's an debt index. That gets you to –- the higher end of our guidance.

And our next question comes from Nathan Martin from The Benchmark Company.

I appreciate the extra guidance for the first quarter as it relates to shipments like 625,000, 675,000 tons, including some purchased coal. Did you guys say you already shipped the 150,000 tons of carryover call in January? I think, Jeremy, you just mentioned that about 50,000 tons of the API2 linked coal that carried over have already been shipped as well. Is that correct?

Nathan, this is Jason. Yes, potentially within the first, I'd say, 10 to 15 days in January, all the carryover tons were ship and completed.

I appreciate that clarification, Jason. And then it appears you guys are estimating domestic sales about 1/3 of shipments this year are around 1.2 million tons at least for now. And then, obviously, that would mean 2/3 of shipments going to the export market, which I think will be the largest portion to date. Jason, I appreciate some of the color in your prepared remarks there on the new markets. I know you mentioned the first vessel into India, test shipments into Asia. Any more color there? And maybe curious which met coal indices you guys are pricing your various export shipments at today? Is it still mainly U.S. East Coast or do you have some tie to off the indexes now?

Sure. Yes, I guess an overarching comment would be in Slide 12 in the presentation, we have the geographic layout of where our shipments are heading. Breaking down your question a little bit there, we have seen increasing certainly interest in the Pacific as that market continues to grow. The challenges we faced last year, I think executing on some of the larger potentials we had at that time didn't occur, so we're breaking into that market now with good success, I would say, early here in Q1.

In terms of the breakout, I think Europe will remain our -- probably our heaviest concentration for seaborne sales. Also, Brazil as well, where we'll continue to maintain what we do have now and potentially grow that too. So in terms of the index basis, I don't have a percentage breakout on each. But I would say majority will remain off the U.S. Coast, the U.S. East Coast indices. And certainly, in the Pacific, most of that business is based on Pacific indices.

And then maybe coming back to the cost side, full year company produced cost for ton guidance maintained $97 to $103 a ton. They're down from $105 in 2022. So that's nice. Obviously, you guys put that target out there before the recent run-up in met indices the last few months. Curious, could you share kind of what met prices you assumed in that range? And could there be any pressure if we continue to see prices stay well above $300?

Nate, it's Jeremy. So I mean we generally look at the forward curve based on that range. So I mean, obviously, the spot prices stay where they are, I'd probably point you towards the higher end of the range, that would be a good problem to have, of course. Yes. I think, Nate, even though we've seen a run-up in prices, I don't think that we've seen any real increases in cost pressure in the intervening period. If anything, I think to the extent that there are those that forecast a much more recessionary environment, if the fed [ph] continues to increase rates, we think that, that's at least put a damper on cost increases.

And then maybe just on the labor front as well. I mean I think that was a big piece of some of the cost increases we've seen. Does that moderate a little bit, it sounds like, Randy? Or how are things on the labor front in general? I think Chris mentioned you guys are pretty well stock on the labor front, at least from the Elk Creek perspective, but just any final thoughts there would be great.

Yes. We staffed up last year, clearly in anticipation of both Berwind as well as increasing production at Elk. So this year, we do not anticipate adding to that number. And I think also with respect to the just wage increases, we expected, I said that to kind of ameliorate from the pressures that we got last year, certainly earlier in the year.

I appreciate the time and best of luck in '23.

And our next question is a follow-up from Lucas Pipes from B. Riley Securities.

I wanted to follow-up on the rail side. It's been a little bit more mixed recently in terms of commentary about performance. Obviously, there's been some tragic incidents recently. And so I wondered if you could comment on how you see rail performance today for you and what your outlook is kind of over the course of the year, specifically as it relates to rail.

Yes. Lucas, this is Jason. Certainly, just referring quickly back to the carryover tons there at the end of the year. We've seen kind of slow and steady improvement all year long, as they right size the labor and the rolling stock and to meet the demand. Just a series of unfortunate instance right at the end of the year. One was an unplanned outage at one peer that we had a vessel in the Q at [ph] and the other was just the extreme, extreme cold temperatures there around Christmas, just slow dumping and vessel loading to a crawl at another. We haven't had vessels on each of those 2 peers right at the end of the year. Since the start of the year, of course, we talked up those shipments very quickly. And I'll say our railroad partners have done an excellent job of keeping trains up against us at all 3 locations we're shipping from.

And as Chris mentioned in his remarks, and thinking about the rest of the year, we stayed close to both the Eastern railroads there as we're served by both at the one at Berwind and one Elk Creek, our expansion is coming this year and we're very confident in the meetings we've had since last year and going forward here that they're anxious and ready as we are to bring these tons on and get the move.

So again, as Randy mentioned, we're cautiously optimistic here as we come out of this quarter. But certainly, the cadence has much improved here in Q1 already, and the plans are there and the systems are there to make it happen here Q2 forward.

And Lucas, this is Randy. I mean, again, echoing Jason, the feedback we've got from the rails is that a lot of the issues that they had with us last year related to manpower issues, which they have now stepped forward and have done a great deal of hiring, particularly in the specific market area where the trains are serving us. We've seen the stats. And so therefore, we're hopeful with the additional manpower that they've got, the service levels will improve. Certainly, like anything going to happen overnight, but we think it's definitely moving in the correct direction.

And then I do have a follow-up question on labor. And sorry if I missed the response here to Nate's question, but do you still need to hire additional folks as you ramp up at Berwind? If so, what's roughly the magnitude. And then as it relates to Berwind, any equipment requirements or dependencies to hit the numbers there. Some of your peers have noted really long lead times on the equipment side. So I wanted to follow-up on that as well.

So Lucas, on the labor front, we do have a little bit of hiring that we'll do to fill a few slots at the Berwind complex, but we're talking less than a dozen miners to hit our guidance at Berwind. The bulk of our hiring that remains this year will be as we ramp up Maben in the second half of the year. And then on the equipment front, we do not have any dependencies on equipment deliveries for the Berwind ramp-up or for the ramp-up at any of the other locations. But the lead times on new equipment and rebuild equipment are -- have been accurately portrayed is extremely long. Unfortunately, we were far enough out in front of that, that we don't have any impact this year.

And I'll add to that, Lucas, last year, I can think of at least 2 occasions where we forward purchase equipment, frankly, in anticipation of production that was going to happen in '23. Obviously, we had a pretty heavy year on CapEx last year. And hopefully, that's one of the reasons why we'll see a decrease in that for '23.

And ladies and gentlemen, with that, we'll conclude today's question-and-answer session. I'd like to turn the floor back over to the management team for any closing remarks.

Well, once again, we appreciate everyone being on the call this morning. We look forward to getting together in a few months. And as I said in my earlier remarks, we look forward to executing. Thank you very much.

And ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.