Star Bulk Carriers Corp (SBLK) 2010 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the Star Bulk Carriers conference call on the fourth-quarter and full-year 2010 financial results. We have with us Mr. Petros Pappas, Chairman of the Board of Directors; Mr. Spyros Capralos, President and Chief Executive Officer; and Mr. George Syllantavos, Chief Financial Officer of the Company.

At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions). I must reply to you that this conference is being recorded today, Wednesday, February 23, 2011.

We now pass the floor to Mr. Paul Lampoutis, Vice President of Capital Link. Please go ahead, sir.

Thank you. I would like to remind that the Company publicly released its financial results last night, Tuesday, February 22, 2011, after the market closed in New York. And it is available to download along with today's presentation on Star Bulk Carriers website, which is www.starbulk.com.

If you do not have a copy of the press release or presentation, you may contact us, the investor relations advisor for Star Bulk Carriers at 212- 661-7566, and we will be happy to fax or mail you a copy. The conference is also being webcast, and it is user controlled and can be accessed through Star Bulk's website. I must advise you this conference is being recorded today, Wednesday, February 23, 2011.

I would like now to hand over the floor to your first speaker today, Mr. Spyros Capralos. Please go ahead, sir.

Thank you, Paul, and good morning, ladies and gentlemen. I am Spyros Capralos, the newly appointed President and Chief Executive Officer of Star Bulk Carriers. Welcome to the Star Bulk Carriers conference call to discuss the fourth quarter and full year ended December 31, 2010 financial results.

Along with me today to discuss our financial results is the Chairman of the Company's Board of Directors and major shareholder, Mr. Petros Pappas, and our Chief Financial Officer, Mr. George Syllantavos.

Before we begin today's presentation, I would like to pass the floor to Mr. Pappas for an opening statement.

Thank you Spyros, and good morning, ladies and gentlemen. Following Mr. Tsirigakis' departure from our company, our board elected Mr. Spyros Capralos as our new President and CEO. Spyros is a very prominent personality, both in Greece and in internationally, with extensive banking and more importantly, capital markets background, having served as the CEO of the Athens Stock Exchange and as a Chairman of the Federation of European Stock Exchanges, among many other important positions that he has held.

I feel we have chosen a strong person for this position, and I believe that the timing was very crucial, as I expect two years of challenge and opportunity to arise in dry bulk horizon. Challenge because of a full order book of vessels coming forth, and opportunity because the essence of shipping is investing at times when (inaudible) prices are low.

To turn challenge to opportunity, one needs to have a strong team put together. I am, therefore, intending to support him wholeheartedly. And although my role is that of a nonexecutive Chairman of the Board of Star Bulk, my intention is to align my family's private interests with interest of the public company and (indiscernible) my 33 years experience in the sector to assist this company to rise from a challenging period stronger in every possible respect.

We are in this together, and we are committed to the enhancement of shareholder value. In this shareholder value-building effort, we will not spare any effort based on our experience, our expertise, our well-established industry contacts, our goodwill and our creativity.

I would now like to pass the floor to Mr. Capralos to continue with the presentation of the Company's financial results. Thank you.

Thank you, Petros.. Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement on slide number 2 of the presentation. While you do that and before we commence the earnings presentation, I would like to take the time and introduce myself.

Before joining Star Bulk, I served as Chairman of the Athens Exchange and Chief Executive Officer of the Hellenic Exchanges Group, and was the President of the Federation of European Securities Exchanges. Prior to this, I held executive positions for the organization of the 2004 Olympic Games in Greece, following a banking career with National Bank of Greece and EFG Eurobank Group, as well as a 10-year international banking career with Bankers Trust Company, now Deutsche Bank, in Paris, New York, Athens, Milan and London.

I am starting my tenure at a challenging time for the shipping industry, and in particular in the dry bulk sector, characterized by substantial supply of vessels, softening of rates, but also growing demand and continued recovery of industrial economies.

I believe that my capital markets (inaudible) and experience will be valuable assets in the continued development of Star Bulk and the maximization of shareholder value. In the months to come, I intend to meet analysts and investors on road shows and conferences. Thus, we will get the opportunity to discuss further Star Bulk's strategic issues and developments.

Ladies and gentlemen, let us now turn to slide number 3 of the presentation to discuss some important financial data. On this slide, we present certain key data to illustrate why we continue to believe that while Star Bulk continues to enjoy a very comfortable financial position, it remains substantially undervalued.

As of yesterday, our minimum total contracted revenue was approximately $195 million and our market capitalization stood at $155 million. We estimate the charter free value of our fleet to be about $361 million, and the charter adjusted value to be about $400 million. These figures include approximately $64 million of down payments to our two newbuilding Capesize vessels consisting of around $43 million of company cash, as well as $21.5 million drawdown from our new loan.

Our senior debt currently stands at about $223 million, and our current cash position is approximately $38 million. According to the above, Star Bulk's net asset value amounts to $215 million, or $3.39 per share based on our charter adjusted fleet valuation. Based on a share price of $2.45 at yesterday's close, our price to net asset value ratio stands at 72%.

I would like to reiterate that Star Bulk has resisted exposure to interest rate swaps and has, therefore, taken the full benefit of the prevailing low interest rates.

We are also very pleased with the fact that our principal repayment commitments for this year are down by around 50% compared to last year, since our loan repayment schedules were intentionally frontloaded. Specifically during 2010, our loan repayments stood at $68 million, while our repayment commitments for 2011, '12 and '13 are $34 million, $32 million and $31 million respectively.

Please turn to slide 4 to discuss our fourth quarter and full year ended December 31, 2010 financial highlights. For the fourth quarter of 2010, gross revenues amounted to $31.9 million, and net income amounted to $20.7 million. Excluding non-cash items, our net income for the fourth-quarter 2010 amounted to $23.8 million.

Adjusted EBITDA for the fourth quarter was $37.3 million, while average daily operating expenses were $6,059 per day per vessel. The Time Charter Equivalent to the fourth quarter of 2010 was $26,644 per day.

The adjusted net income of $23.8 million represents $0.38 earnings per share basic and diluted, which is significantly above Bloomberg consensus. I would like to point out that most analysts in their reports do not include the $23.2 million the Company received for the settlement of the Star Ypsilon related claim, as this is considered a one-time extraordinary item. Nonetheless, this fund received comprised a very real part of our current NAV.

For the full year ended December 31, 2010, gross revenues amounted to $121 million. Net loss was $5.1 million, which includes a non-cash impairment charge of $35 million previously reported in the second quarter of 2010, due to the sale of the Star Beta. Excluding non-cash items, our net income for the full-year 2010 as adjusted amounted to $37.1 million.

Adjusted EBITDA for the full-year 2010 was $89.5 million, while the average daily operating expenses were $5,630 per day per vessel. The Time Charter Equivalent for the full-year 2010 was $26,859 per day. The adjusted net income of $37.1 million represents $0.60 earnings per share, basic and diluted.

Turning to slide number 5, I would like to provide an update on our company's recent developments. For the quarter ended December 31, 2010, we declared our seventh consecutive dividend of $0.05 per share. As of market close on February 22, 2011, this reflects approximately an 8.2% annualized yield.

In regards to our two Capesize newbuildings, we are pleased to enjoy the continued support of our senior debt lenders for our growth plans and have demonstrated the ability to source competitive financing. In this context, we signed commitment letters with a major European bank for senior debt financing of both newbuilding Capesize vessels currently under construction for up to 65% of the vessel's price at favorable financing cost and terms.

The loan's capital remaining payments to the shipyard for both vessels. Therefore, Star Bulk is not required to contribute any additional equity until their completion.

We also recently announced that we entered into a time charter contract with Norden for the Star Epsilon for one year, plus an option for one additional year at a gross daily rate of $16,100. The new contract will contribute a minimum of $5.8 million to a maximum of $11.6 million in gross revenues.

Currently, our fleet is contracted for 69% of 2011 operating days. This number includes a KLC charter of Star Gamma until December 2011. In addition, the Star Cosmo and Star Omicron after having completed their previous charters are now operating in the spot market, and we are opportunistically looking to fix these vessels on long-term contracts as the rate environment improves.

Regarding KLC, the Korean shipping company which filed for corp. receivership, we are closely following the developments with (inaudible) proceedings, and we will pursue the payments of all amounts owed to our company. For more information regarding this matter, we have issued a press release which is available on our website.

Turning to slide number 6, I would like to point out in this slide that since reinstituting the dividend in the second quarter of 2009, we have rewarded shareholders with a meaningful yield which currently is the highest within the dry bulk universe at 8.2%.

As you can see in the graph, only 5 out of the 11 dry bulk companies distributes dividends to their shareholders, with Star Bulk having currently the highest dividend yield. I would like to remind our investors that Star Bulk is one of the few companies in the dry bulk industry that has paid dividends for 11 out of the 13 quarters since inception three years ago.

Moving to slide 7, here we illustrate Star Bulk's growth overview. As you can see in the two graphs, we have managed to organically grow the original fleet of 8 vessels under 700,000 deadweight tons to 13 vessels and over 1.2 (technical difficulty).

Thank you for standing by. Your conference has restarted.

Thank you, ladies and gentlemen, sorry for this. We will go back again to slide 7 where we illustrate Star Bulk's growth overview. As you can see in the two graphs, we have managed to organically grow the original fleet of 8 vessels under 700,000 deadweight tons to 13 vessels and over 1.2 million deadweight tons, including our two newbuilding Capes within three years of going public.

This means that including our current newbuilding contracts, we have achieved fleet growth of 86% in terms of deadweight and 63% in terms of vessels. I would like to underline that this growth was achieved without significant dilution, while it is also worth noting that in the process of growing our fleet, we have also been renewing.

During this period we have sold three of our older ships and bought six younger vessels, while we have also contracted two newbuilding Capesize vessels to be delivered later in 2011. Our cash and debt situation gives us the possibility for further growth by conducting accretive transactions in the future.

Slide 8 illustrates the fleet employment chart and counterparties, which we also post in a transparent manner on our website. I won't go into further details, as I believe it is self-explanatory. With many charters expiring within 2011, we are aiming to opportunistically recharge our vessels as the freight rate environment improves.

If you now turn to slide 9, we provide an overview of our counterparties for our first-class charterers, while affording us an excellent counterparty risk profile. Mr. George Syllantavos, our CFO, will now discuss our financials and give you an update on the market developments. George?

Thank you, Spyros, and good morning to everyone. Let us now move to slide 11 for a view of our balance sheet as of December 31, 2010. Current assets were $23.9 million. Our fixed assets amounted to $654.3 million, and total assets amounted to $703 million. Current liabilities were $43.2 million, while noncurrent liabilities amounted to $171.8 million. Stockholders' equity was then $488.3 million.

If we can now turn to slide 12 to discuss the fiscal year 2010 income statement risk. I would like to point out that our 2010 results include non-cash items amounting to a total of $42 million, which is depicted in the middle column, and the adjusted figures exclude these non-cash items.

For the fiscal year 2010, total revenues amounted to $121 million and our operating income amounted to [$260,000]. The net loss for 2010 was $5 million, or $0.08 per share calculated on 61,489,162 weighted average number of shares basic and diluted. Excluding non-cash items, net income for 2010 amounts to a gain of $37 million, or $0.60 per share calculated on 61,489,162 weighted average number of shares, basic and diluted.

Turning to slide 13 for the fourth-quarter 2010, total revenues amounted to $32 million. Our operating income amounted to $22 million. Non-cash items (technical difficulty) million as depicted in the middle column, and the adjusted figures exclude these non-cash items.

The net income for the fourth-quarter 2010 was $20.7 million, representing a gain of $0.33 per share calculated on 62,167,272 and 62,682,939 weighted average number of shares, basic and diluted, respectively. Excluding non-cash items, net income for the fourth-quarter 2010 amounts to a gain of $23.8 million, or $0.38 per share calculated on 62,167,272 and 62,682,939 weighted average number of shares, basic and diluted, respectively.

I would like now to move to third and last part of our presentation, which includes the market commentary. Please turn to slide 15 for a supply update. According to data provided by Clarksons, 30% of the originally scheduled deliveries for 2010 did not take place, with the Capesize sector having the greatest percentage of such non-deliveries.

On the top-right graph, you can see a breakdown of scheduled versus actual deliveries for the four dry bulk vessel segments. This is why along with other leading brokers and industry insiders estimate a similar or even -- in some cases even greater percentage of non-deliveries for 2011.

As you can see on the bottom-right graph looking beyond the year 2011, scheduled deliveries for all vessel categories come down to much lower levels.

Condition in Australia has been on the rise recently, due to recent extreme weather conditions. However, the resulting cargo shortage has been dramatically more of a defining factor than the (inaudible) that has been building up in Australian ports.

Also during the last few months, there has been a slight pickup in scrapping of older vessels. A pickup in scrapping could slow down the fleet's growth rate, effectively providing some relief to rate pressures.

Please turn to slide 16 for an update on the global economy. As you can see in the top-right graph, world industrial production has recovered and is projected to continue an upward trend in the coming years. Looking at the bottom-right graph, you can see that PMIs for the developed economies project a continued recovery in industrial production during the months ahead.

This is not only an indicator of additional raw material demand and consequently shipping demand, but also indicates that the world is going back to a more balanced growth pattern, something a sense of stability and vessel sustainability of this growth environment.

The bottom-right graph bring some optimism for the future of the global economy. According to the IMS, global GDP is expected to grow by another to about 4.5% in the next five years. This is significantly higher than the last 10, 20 or 30-year averages. Taking into account the increased share of GDP contributed by emerging economies, combined with the intensity of raw material demand in these countries, we cannot help but feel some positivity about the prospects of future demand growth for raw materials.

Please turn to next slide, 17, on a view of the iron ore trade expected for our shipping activities. As you can see on the top-right graph, up to the end of 2010, both iron ore prices and global seaborne iron ore exports have been rising to record high levels.

However, what is not depicted in the graphs -- there are no final official data yet -- is the fact that Brazilian iron ore exports dropped to 22.7 million last month from 32.2 million tons in the prior month, mainly due to weather conditions and the Chinese year-end slowdown. This is expected to be reversed in the short term in front of us.

On the other hand, spot iron ore prices are updated daily, and currently stand at around $190 per ton. That is below its recent record high. The combination of record high prices and record high volumes implies strong and [short] underlying demand for this commodity.

On the bottom-left graph you can see that while China's imports have been rising to record highs, its global market share has come down to more balanced (inaudible) to precrisis levels. This makes us feel more confident on the sustainability of iron ore demand growth in the future, since part of the [weight] and activity is taken over by some other countries except China.

Indian exports have been slowing to a steady declining trend, which as you can see on the bottom-right graph is expected to continue in the future as India retains iron ore for its domestic consumption. This was significantly increased (inaudible) demand since India and China's closest major iron ore source, and this differential in [advance] is going to be taken into China from places further away, increasing ton miles.

Please turn to slide 18 for a look at the Chinese iron ore imports. This slide explains the fundamentals behind the recent boom trading of the dry bulk sector. It is well-known that China's domestic iron ore is of very low quality and thus very inefficient, and at the end of the day expensive to use.

The bottom-left graph shows the domestic iron ore production cost curve, depending on the total amount produced, and how this is estimated to involve the next five years. As one would expect due to the depletion of the low-cost mines, inflation, currency appreciation and other factors, the production cost curve is expected to move upwards.

So far China's reaction has been to import as much iron ore as possible, and since the nature of this need depends on the actual geological structure of the country, we feel this will not change in the future.

To put it in a few words, we believe that the fundamentals behind the recent boom are based on structural elements, and thus will be supporting dry bulk shipping demand for a long time ahead of us.

This is actually mirrored in the top right graph where you can see not only the expected growth of China's iron ore demand, but also the gradual decline of the domestically mined component of such a demand profile.

What is also worth noting is the exceptional Chinese import growth in the non-Big 4 countries, i.e., the countries as comprised by Brazil, Australia, South Africa and India. As we see imports from these countries have doubled in only the last three years, this seems more like a long-term strategic diversification attempt by the Chinese than a short-term unintended event, which supports overall ton mile growth.

Please turn to the last slide, number 19 of this presentation. It will give you an update on the recent weather related for disruptions. I am sure everyone has seen on the news or read in the papers about recent severe floods that have devastated Australia. It is true that in many cases, shippers have declared force majeure and many cargoes have been delayed or canceled.

What many people do not realize is that similar weather-related disruptions have occurred in practically all coal exporting regions. As you can see on the two graphs on the right side of the slide, disruptions during the first quarter is not something unusual for Australia and Brazil.

These graphs clearly indicate that the first quarter of every year is the most challenging for both Australia and Brazilian exports. Actually, they are going to issue the press release on Monday on their website stating that they expect the first-quarter shipments to be affected. However, the recent quote/unquote coordinated weather disruptions have had a tremendous impact on dry bulk rates. It is our belief that rates will show signs of rebounding once cargo flows return to more normalized patterns.

Now, I will not take any more of your time. Thank you. I will beg to pass the floor over to the operator. If you have any questions, please Mr. Pappas, Mr. Capralos and myself will be happy to answer them. Thank you.

(Operator Instructions). Your first question from Cantor Fitzgerald comes from Noah Parquette.

Thank you. I was just wondering, you know you talk, about with rates where they are and asset values expected to come down, you seem interested in growing the fleet. Do you think this might be an opportunistic time to do that? I mean how do you think about balancing growth for shareholder return in this environment? I mean will you focus on purchasing ships or will you consider it in your dividend?

Good morning, first of all. There are a lot of ways to do that. I am sure we are going to get another dividend question as we go along here, so I would like to say that we think that the dividend is at healthy levels. You know we always have thought that this company came to market paying a dividend, and we are believers that we should share some of the benefit with shareholders.

Of course, raising it or doing whatever with a dividend is a business of the board of directors. I would not like to approve that board of directors decision on what we do from now on. But certainly, we feel we have a healthy level of dividend for the circumstances and the environment as we are.

Now, the environment is challenging the fact that, yes, we have -- there is a disconnect always having lower asset prices; provides an opportunity but at the same time when you have prevailing very low asset prices, you also have low charter rates, also.

So I think it is up to the creativity and ability of the Company and the management team to go out and access accretive transactions at any point in time that it sees such opportunities arise. So we do feel there is room for expansion and with creative additions to the fleet, and we closely monitor the market to assess these opportunities.

In terms of leverage, what metrics do you look at? What level of leverage would you be comfortable with in terms to grow if there is a good opportunity to expand?

As you know, we have been always considerate with the levels of debt that we have been putting our assets on. Even at the high-rolling times of the past, as you know, we were a proponent of much more conservative levels of debt, even though banks were openly offering us more.

That was before we were looking at a very challenging type of order book during the years 2009 and '10, and we wanted to take a reasonable debt and paid upfront on a frontloaded basis while the rates were good.

Having said that, we still maintain our belief that, you know, leverage has to be in relatively realistic and conservative levels. And where asset values are currently, we think levels of around $0.55, $0.65 levels overall are reasonable for where asset values currently stand, which is not of the historical highs of the past. It is at more low levels.

And then just shifting gears, with the Korea Line situation, you have had a history of counterparty issues in the past. When you look at fixing your fleet, specifically under longer-term charters, can you talk about the credit process you go through and how you weed out counterparties now? How much more careful are you being?

We are very careful. And as you remember, yes, we had some issues, but we didn't really proactively pursue those with those instances of trouble. As you remember, the first issues were created at a time where it was very close to our company becoming operational.

Therefore, several of those charters were attached to the vessels prior to us receiving the vessels and becoming operational. So we really didn't have any choice or very little -- very limited choice on the type of charters we had at the time.

Now, as you know, and you have been following (inaudible) of the company very closely for the last few years, we have made a concise effort to really upgrade the level of quality of our charterers, bringing in the major/minors, etc., etc.

Now, regarding Korea Line, as you know, Korea Line was always seen, at least at the times when we fix a vessel, we reviewed them through our credit risk and [non-credit] risk profile activities, and they checked out fine. Korea Line is a company that has about 150 to 160 vessels chartered in, and another 50 to 60, depending on how it is using it with its COAs or which owned fleet operated.

So for a company that has about 8200, a fleet of 200 (inaudible) vessels plus at any one point in time out there, in a world fleet of 8000 vessels and it is one of the major operators, I think any major dry bulk company is bound to have at least a vessel on Korea, some exposure with Korea Line.

So I think Korea Line is a specific situation. It is an unfortunate situation because we're viewed as a major player and a very credible player, and it is a pity that a lot of people have issues here due to that in a kind of challenging time, but we will deal with it. We will do our best to handle it. We are keeping close to the situation, and we will do our utmost to not lose any value out of this (inaudible).

Thank you very much.

FBR Capital Markets, Doug Garber.

Good afternoon, guys.

Hi, Doug, how are you?

Doing well. My first question has to do with the bank covenants and your restricted cash of $24 million or so. At this time, are you guys in compliance with your covenants, and do you expect any of that restricted cash to be released? What is the minimum going forward that you need to keep as restricted?

Okay, we have been in compliance with covenants for about four quarters now. The issue has been always that when we conducted these agreements with the banks for the waiver period and waiving of covenant thresholds, this agreement was made for some specific period of time that is ending on our all waivers within the first quarter of this year.

So from this quarter onwards, we formally do not have any covenant issues. But in reality, we haven't had covenant issues. We went through that threshold for about four quarters now, and that is the reason why the banks have allowed us for the last four or five quarters to pay the dividends.

So in reality, while in reality we were in compliance, in formality we still were within the waiver type of period. Does that answer the question?

Yes, it does. My question was more about the waiver period being over than the covenant. I had known you were in compliance. (multiple speakers)

Go on, Doug. I am sorry.

Sure, sure. My second question is on Korea Line. I am not sure how much detail you guys can give out, but they have approached you for a new rate. Can you disclose how those negotiations are going and what that rate currently is that they are asking for?

Listen, I mean you understand that this is -- I mean they are going back to everybody and they have asked them to make some adjustments. However, since we are at a period where these changes go back and forth and it is a confidential matter, a matter between every company and Korea Line, I think at this time I would like to stick to the information that was included in our press release of yesterday. And I would like us to leave it at that for now.

Maybe in a few days or so, we will have more clarity on how the developments are. And as always, being very open with the market, we will come back with an announcement and explain to everybody what is going on. But for now, since we have nothing concrete, I would like us to stay with the contents of yesterday's press release, please.

Okay, great. I will wait for that press release. My next question is on the Star Ypsilon, the Capesize vessel that I think comes off in March. What are your plans for that? Have you guys looked at how much you could get for -- I mean when it is its next dry dock; what is light deadweight tonnage? Have you looked at the economics of scrapping for that vessel, and what is the future life of it?

Listen, scrapping -- the vessel has a few good years on it. It is rated four or five stars on the [right] ship valuation. It is operating very well. That is one set of the question.

Regarding our rates, we are continuously looking what we can get for all our vessels that are opening up, not just the Ypsilon, and we will opportunistically see what we are going to do. But for now, we are just reviewing the market. Maybe Mr. Pappas wants to --.

Plus, for that vessel we have a head forward for the next nine months after she is delivered, because we have fixed a COA with Vale for three cargoes. So the vessel is -- in reality heads through that COA through the end of the year.

That's very helpful. Thank you. And just a final housekeeping question, you guys for the two Capesize newbuilds, how much of a payment do you guys have remaining and do you expect to finance how much with equity and how much with debt?

Listen, the way that this is farming out right now is the following, is that we have a debt facility for about 65% of the value of the vessels. Now, you remember the two vessels have been contracted for about $107 million, give or take.

Now, in reality, what his happened on a free delivery basis is that the vessel is contracted five payments of 20% each. We have contributed last year two times 20% payments or 40% of the equity, and the banking institution will contribute the remaining up to delivery.

So, in reality, the equity that is needed for the vessels which is $43 million represented has already been put up, and we have no further exposure or CapEx requirement from now on, either on a predelivery period or postdelivery period.

Okay, great. And just my last question is on share repurchases versus dividends. I know you addressed this earlier, but a healthy cash balance. Have you guys considered share repurchases or are things on hold until you get more contract coverage?

We have considered and bought level share repurchases in the past. We have had some levels of repurchases that we will be willing to do overall until the end of this year. As you know, the way the period and bank covenants provided that some, blockage, let's call it, from even thinking these kinds of things because banks were not really willing to allow.

As they are tight on dividend payments, they are also tight on repurchases because they were not willing to allow such things or liquidity leaving the Company in that fashion. With the covenant period and the way that period ending this quarter, the board will discuss all these issues and will decide accordingly.

All right, great. Thank you, guys.

(Operator Instructions). As there are no further questions, we now pass the floor back to Mr. Spyros Capralos for closing remarks.

Ladies and gentlemen, I just want to thank everyone for participating on this call, and we look forward to you joining us again when we have our next quarter financial results conference call. Again, thank you very much and have a good day.

Thank you, sir. And with many thanks to all us today, that does conclude our conference. Thank you for participating. You may now disconnect.