Companhia de Saneamento Basico do Estado de Sao Paulo - SABESP (SBS) 2012 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen. At this time we would like to welcome everyone to SABESP's conference call to discuss its results for the third quarter of 2012.

The audio for this conference is being broadcast simultaneously through the Internet on the website www.SABESP.com.br. In that same address you can also find the slide show presentation available for download.

We inform that all participants will only be able to listen to the conference during the Company's presentation. After the Company's remarks are over there will be a question-and-answer period. At that time further instructions will be given. (Operator Instructions)

Before proceeding let me mention that forward-looking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of SABESP's management and on information currently available to the Company.

Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of SABESP and could cause results to differ materially from those expressed in such forward-looking statements.

Today with us we have Mr. Rui Affonso, Chief Financial Officer and Investor Relations Officer; Mr. Mario Arruda Sampaio, Head of Capital Markets and Investor Relations; and Ms. Nara Maria Marcondes Franca, Head of Accounting. Now I will turn the conference over to Mr. Arruda Sampaio. Sir, you may begin your conference.

Okay, thank you. Good afternoon or good morning for some of you. Let's start this presentation.

To let you know, we have six slides. After we go through the slides and present the overall results for the company and a quick comment on the [ARESP] developments we will open for question and answers. Let's start on slide three.

Here we show the Company's billed water and sewage volume, which was 3.2% above the same quarter in 2011. This higher volume resulted from the 2.5% increase in water connections and the 3.3% upturn in sewage connections. This is in line with the Company's expectation to grow its billed water volume by around 2.5% and its billed sewage volume anywhere between 3% to 3.5%. This latter influenced by the high investment that the Company has been making in this segment, meaning in the sewage segment.

In the third quarter of 2012 the water loss ratio remained flat at 25.9% in relation to the same period in 2011. We understand that with the contracting of the investments that are financed under the Japan International Cooperation Agency program, our water loss reduction program, which is scheduled for conclusion somewhat early 2013, we should see a greater decline in this indicator as we move into next year.

Let's move to financial highlights on the next slide. Net revenue was positively affected by the 6.83% tariff increase as of September 2011 and the 3.2% upturn in billed volume as mentioned in the previous slide. Costs and expenses grew by 2.3% in the period as a percentage of net operating revenue. However, costs and expenses fell from 75% in third quarter 2011 and 73.4% in third quarter 2012.

EBITDA increased from BRL814.2 million in third quarter 2011 to BRL902 million in third quarter 2012. EBITDA margin increased to BRL33.3 million versus BRL31.4 million in last quarter -- sorry, third quarter 2011. If we exclude construction and revenue costs from the total revenue, EBITDA margin was 42.4% this quarter versus 41.6% in third quarter 2011.

EBIT moved up, as you can see, by 11.7% from BRL646 million in third quarter 2011 to BRL721.8 million in third quarter 2012. Net income increased from BRL68 million in third quarter 2011 to BRL361.8 million in third quarter 2012.

Now let's move to the next slide and discuss the variation in costs to help explain all the numbers we went through. Obviously this explanation will be in relation to the same period of the previous year. That is then in comparison with the third quarter of 2011 costs and expenses grew by 2.3%.

The main factors behind this upturn were the increases of 310.5% credit write-off, 8.5% in supply, 8% in general expenses, and 6.7% in service. Note that the somewhat small variation in cost and expenses was heavily impacted by the 0.1% reduction in payroll and benefits which accounts for a large portion of our total costs.

Expenses with credit write-offs increased by BRL53.4 million from BRL17.2 million in third quarter 2011 to BRL70.6 million this quarter, largely due to the additional provision for overdue agreements with private clients in the amount of 14.5 million and for the overdue debits with the state public entities in the amount of BRL26.7 million.

Expenses with supplies increased by BRL3.6 million, or 8.5%, when compared to the same period of the previous year from BRL42.5 million to BRL46.1 million. Mostly due to water and sewage operating systems preventive and corrective maintenance in the amount of BRL2.4 million and maintenance of water and sewage connections and networks totaling BRL1 million.

General expenses increased BRL15.5 million, or 8%, from BRL194.2 million to BRL209.7 million. Predominantly due to the increase of BRL4.7 million in the provision for transfer of funds, the municipal environmental infrastructure fund as defined by the service contract agreement we have signed with the government of Sao Paulo, also the increase in the provision for lawsuits amounting for BRL2.4 million, and the increase of BRL1.7 million due to the beginning of the billing for the use of water in Baixada Santista water basin -- this is the Santos port area water basin -- since February 2012.

Services increased BRL16.4 million, or 6.7%, from BRL245.1 million in third quarter 2011 to BRL261.5 million in third quarter 2012. Mostly explained by the BRL8.6 million increase related to the advertising campaign focused on social and environmental initiatives. This BRL5.9 million increase related to fleet renewal and growth performed through a rental program. The Alto Tiete water production system performed under a public and private partnership provided an increase of BRL4.1 million due to the start up in September 2011 of the additional 5 cubic meters per second water production capacity.

These increases mentioned above were partly offset by a BRL10.1 million reduction with social and environmental activities related to the agreement with the municipal government of Sao Paulo, remembering that this agreement is an agreement we established prior to signing the service contract. We have still commitments related to that agreement that we have to perform and undertake and impacts, as you can see.

Payroll and benefits fell BRL0.4 million, or 0.1%, from BRL427 million to BRL426 million, due to greater adjustments to the provision for severance pay in the amount of BRL15.7 million in the third quarter 2011. Explained, in that case, by the greater number of -- sorry, and also explained by the greater number of employees that applied for retirement and the approval of Law 12.506/11 which changed the notice period for without cause dismissals from 30 days to a maximum of 90 days.

Other factors that contributed to the reduction in payroll and benefits was the decline in the current cost base with the actuarial calculations for 2012 related to the defined benefit plan in the amount of BRL4.1 million. These decreases were offset by the 8% increase in salary since May 2011 and of 6.17% since May 2012 with an impact of approximately BRL19.4 million.

Let's move now to slide six; here you will analyze the items that affected the net income or net income. Net operating revenue moved up by BRL119.7 million, or 4.6%, over the third quarter of 2011. Costs and expenses grew by BRL45.5 million, or 2.3%, negatively impacting results yet at a lower expansion rate than the growth in revenue which compensates that.

Other operating revenues and expenses decreased by BRL45.4 million, chiefly due to the accounting provision related to impairment losses totaling BRL35.1 million and provision for intangible asset losses in the amount of BRL35.1 million, partly offset by the sale of scrap material in third quarter of 2011 in the amount of BRL11.7 million among other factors.

Net financial had a positive impact of BRL401.4 million in the third-quarter results. The bulk of this increase explained by the exchange rate variations resulting from the 0.4% depreciation of the Brazilian real versus the US dollar and the 2.8% depreciation of the Brazilian real versus yen in the third quarter 2012. This in comparison to a 15.8% depreciation of the Brazilian real versus the dollar and the 19.4% depreciation of the Brazilian real versus the yen in third quarter last year.

Financial expenses decreased by BRL0.6 million due to lower expenses with interest on domestic loans and financing of approximately BRL2.8 million versus the same period of 2011. This was mostly explained by the amortization of the ninth debenture in October 2011 and also a reduction of BRL0.7 million in interest and charges on international loans and financing. This reduction was in part offset by an increase in financial expenses, the high interest rate related to lawsuits in the amount of BRL2.9 million.

Financial revenues decreased by BRL41.5 million due to the gradual reduction of the market interest rates obtained in financial investments and the lower cash position compared during the difference in time. Finally, income tax and social contributions varied negatively by BRL136.5 million due to the exchange rate variation in the period of 2011 in relation to the period of 2012.

Let's move to our next slide. We will quickly go through two events related to our debt. In October the Board of Directors approved the general terms for the 16th non-convertible, unsecured, single-series debenture issuance for public distributions, but with restricted placement efforts for a total amount of BRL500 million. The proceeds of this debenture will be used to settle the Company's maturing financial obligations.

Also, now in November the Board of Directors again approved the general terms for the 17th not convertible, unsecured, with up to three series debenture issuance. This one for public distribution with no restrictions totaling up to BRL1 billion whose proceeds will be used to settle the Company's obligation in 2013, including the early redemption of its debentures or the payment of other debt throughout the year.

Let's now move to our last slide. Here will comment on ARSESP's implementation process for SABESP first tariff review. But before we start the discussion on the new schedule and the technical note related to the preliminary average initial tariff we would like to say that these two events as -- we'd like to say that we see these two events as a relevant part of the process of establishing a new tariff methodology that is in our view a very important institutional step for the future of this company and for its commitment, along with its client base, society, environment, employees, shareholders, and credit.

Now let's start by commenting first -- start by commenting on the new implementation schedule for SABESP's first tariff revision set out by ARSESP recently last week on November 9 and as shown and detailed in our slide.

According to ARSESP the new schedule was necessary in order for her to accommodate the bidding process for hiring the consultants that will audit the regulatory asset base presented by SABESP, at the same time provide more time for us, SABESP, to present a more detailed and robust tariff structure proposal. According to the new schedule, on November 13 the regulatory agency made public its proposal for the preliminary maximum average initial tariff, the efficiency gain factor, the X factor, and opens the matter for public discussion all the way until December 13 when will be held a public hearing and the entire process will be closed for that period.

The result of the public contribution and hearing related to the preliminary tariff and efficiency gains factor will be released on December 29. According to ARSESP, the preliminary tariff will be effective 30 days later of its release. That is on February 1, 2013.

As for the retroactive effect of the tariff as of September 2012, ARSESP would make no comment. But note September 2012 is the base date for our adjustment. So we understand that there should be some comment from ARSESP whether it will be or will not be retroactive.

The new schedule also establishes the release date for the final maximum average initial tariff and tariff structure, which will be on August 9 with implementation 30 days later on September 2013. We would like to highlight that the new schedule divided the process for implementing the first tariff review into two steps where now on the base assumptions and criteria for implementing the final methodology such as [OpEx], efficiency factors, and the remaining elements of the technical note released this November 13 will be defined. Remaining for next year only two points, which are the confirmation of the final regulatory asset base value and tariff structure.

In other words, the discussion that is taking place now and that will be concluded by December 13 will define the central elements of our ARSESP's proposed tariff model for the next four years. We believe this is very important for you to understand.

In relation to ARSESP's technical note on the preliminary maximum initial tariff and efficiency gains factor, also made public recently, for those who have the opportunity to read and analyze it probably serves the complexity and in a certain way and magnitude the lack of clearness of some base information, statements, assumptions, and definitions adopted.

On the Company's side, we are working on our company -- on our side we're working on the understanding of this document and will present our final comments and suggestions only on December 13 during the public hearing audit. Nonetheless, we would like to share with you some points that we have detected that have raised our attention and concern.

On the OpEx the cut in expenses is considered non-regulated related, was arbitrary in our understanding, and in some cases without even legal grounds, especially the ones related to salary and personnel. In the case of average monthly consumption volumes, we understand that the reference series adopted were extremely short, not to mention inaccuracies on its estimation. What we can see that led to an overestimated projected volumes with significant impact on the proposed tariff.

As for the proposed efficiency gains factor, the X factor, on one side the short series is adopted to the technological changes in our understanding are not sufficient and material for detecting a trend. And on the other, the selection of UK sanitation company as benchmark for determining the level and efficiencies for SABESP considering that the UK companies present different levels of regulatory maturity and full-service coverage compared to ours is inappropriate. Also, the exclusion of capitalized expenses from the regulatory asset base was unexplained and technically not supported by ARSESP's regulatory accounting manner. In other words, it's a technical flaw on their side.

Also, the lack of clearness and explanation in the treatment given to the depreciation in the cash flow estimate where ARSESP considered an asset life of 44 years, well above what the Company has knowledge and practice, resulted in an relevant impact in the preliminary average tariffs estimate.

Well, then to finalize we would like to reiterate the importance of the institutional advances that is taking place with the consolidation of this proposed methodology as confirmed once more by the technical note and assessment, and also by the indication of a real tariff increase of 1.94%. Although we disagree with this magnitude, in our view this tariff increase proposed is short of the necessary for the Company to sustain its long-term proposed investments and also desired and committed service levels.

That concludes our initial remarks. Now we would like to open the session for questions and answers.

(Operator Instructions) [Hasan Doza], Water Asset Management.

Good afternoon. So I just want to clarify three things. From your reading of the technical document, the tariff increase is how much?

1.94%.

Okay. So if I am a customer of SABESP and, for example, my bill is, for example, BRL100 per month, next year on February when this is into effect my bill in real terms would go up by 1.94%.

On average, yes, that's correct.

Okay, so my bill is not going from BRL100 to BRL115, it's going from BRL100 to BRL102?

That's the way we, so far, can understand the technical note and what is being proposed by the regulator.

Okay. On that comment, if I look it your 2012 revenues on an annualized basement basis, just based upon your first nine months' results, you are on pace to generate net revenue net of the (inaudible) and the [Sespi] taxes of around BRL8 billion. So when I look at your revenues for 2012 and I look at your potential revenues for 2013, on a real basis your revenues should go from, say, net revenues of BRL8 billion to up 1.94% next year, in real terms, right?

Yes, on real terms.

Okay.

I think you can infer that based what we can also infer on the technical [amount].

Okay, so your revenues are going from BRL8 billion plus on -- if you look at 1.94% plus 5% inflation, on a nominal basis your revenues are going up from BRL8 billion up 7%, not 15%?

No. Again, we don't know how much the revenue is going to go up next year due to inflation. Remember that we don't know the figure; we will only know that later in August.

So from a nominal standpoint I think it's a lot of guessing and we would not like to do that right now. But from a real term, we believe the 1.94% is the closest we can understand and infer from the technical note on how we see impacting in a very general term our revenue net.

Okay, that's helpful. So just on your example, if I assume for this year based upon your nine-month projected results you generate BRL8 billion of net revenues for 2013 it should go up 8 times 1.94%, correct?

But just consider that the last quarter is already going to be affect by the September 2012 tariff increase. So revenues from the last quarter you have to consider the increase, which was 5.15%, and you can't give it right off the that on September because it is a deferred implementation. Pretty much have to dilute it through the next -- through September -- sorry, November -- October, November, December, okay?

Okay. So that's what I was mentioning my 7%. If I take into account the full-year impact next year of the inflation that you got at the end of August of this year, you have the 5% increase for next year affected plus you have this real increase of 1.94%. And the way I look at it, okay, you approximately report revenues of approximately BRL8 billion, give or take a little bit, but your revenues then are going up by 5.15% on a full-year basis plus 1.94%, which is 7%.

It's not going up by 20%; it's going up in order of magnitude by 7%, right?

Yes.

Okay.

That would be roughly the same as (inaudible).

Okay, that's helpful to clarify. That's very helpful.

The third question I have is SABESP projected your OpEx to be in the note BRL4.6 billion for 2013 and, as you mentioned, ARSESP is proposing BRL600 million lower at BRL4 billion. So my question is if you, for example, don't reduce your OpEx by BRL600 million, what happens to your earnings? Like what is the impact to earnings if you don't reduce your OpEx by BRL600 million?

Let's put it this way, first, we're doing some guessing here because we're not totally in agreement with this reduction. I think it's really important for you to know, as I highlighted in the speech, that we are going to seriously discuss with ARSESP the cuts that they are proposing, especially the cuts in payroll and salary. Which to a great extent we don't even find the legal grounds in some cases for them to support that, the thought that this is not part of the regulatory operations and so forth.

So this is one point. Now, remember that the technical note is a parameter for estimating a tariff adjustment for SABESP and that to a great extent -- to some extent, not a great extent -- it is not so much correlated to our actual numbers. Now if, answering your question, in case it prevails that the regulator will require us to reduce that delta in terms of -- and we do not do it, certainly there will be an impact in net income.

Okay, that's helpful, because that is -- I wanted to clarify is that the way you read this proposal is that the 1.94% real increase is predicated upon having a regulatory OpEx of BRL4 billion, right?

Give or take, yes, although there is some slightly different dates when you look at the accounting numbers and the regulatory accounting numbers.

Sure, sure. But in terms of ballpark, we are talking about in terms of like order of magnitude, we're talking about like BRL500 million to BRL600 million delta.

Yes. It [nailed] us 13% in our OpEx. If you actually look at our current OpEx in theory, to make things simple, we would have to work in reducing it by 13%, which will not happen because we disagree with the bulk of the cuts in the payrolls and so forth.

Okay, I mean this is the math that I'm doing. It's very simple; is that I know that if the tariff is predicated -- tariff increase of 1.94% real is predicated upon an OpEx, regulatory OpEx of BRL4 billion and so hypothetically in the short run you were not able to reduce BRL600 million. So I mean, that's basically a delta of over -- close to [BRL1.50] per share of penalty that the shareholders would have to borne in the meantime, right?

Yes.

Okay. So the 1.94% tariff increase says that you must get to a regulatory OpEx of BRL4 billion and whatever is the delta that you are not being able to get to is going to be borne by shareholders?

Yes.

Okay. So essentially, theoretically what could potentially happen, at least in the short run, assuming that this BRL4 billion regulatory OpEx doesn't change, is that your top-line tariff increase of 1.94% could be negated by this BRL600 million OpEx delta.

Hasan, let's dig in a little there. The point is -- if we all agree on the approach that what he's really estimating is the allowed increase, it is that we are going to get 1.94% increase in revenue. If we keep ourselves all constant and we do the math using the accounting base numbers, you are going to find out that definitely we're not going to get the same return on -- the [walk] return that we are allowed on the regulatory accounting base.

So the point is we might not even have significant impact on the bottom line because, all constant, you are just adding 1.94% to the top line. But when you look from a return on the asset base from an accounting standpoint, we are not going to get the significant amount of increase we were expecting.

Right, right.

Now we're going into the, let's call it the complex ground, of translating the regulatory accounting numbers that were utilized to provide the estimation for the tariff increase and the remuneration of the asset base being the regulatory asset base with all the accounting numbers that you and we have access on a public base.

No, that's -- okay.

Just imagining that obviously if we do move forward and reduce in a great extent the OpEx as suggested, we would actually increase the dividend and the income that we will make. But if we don't we will have just this inefficiency that will not be shared with you guys.

Right. And you said at the end of the comment, and if I heard you correctly said that this 1.94% increase is not sufficient relative to the proposed CapEx that you guys are thinking about.

I mean if I heard you correctly, then my question is going to be a follow-up that, yes, if you look at the math you would be under earning the allowed return if you are not able to get your CapEx down to the regulatory OpEx, or I mean the OpEx. So if you have a 1.94% increase and then this OpEx hanging over your head, how does it impact your BRL2.5 billion of CapEx in terms of whether or not it is economic to spend that CapEx when you don't have a sufficient tariff increase plus you have this regulatory OpEx issue?

Hasan, basically were not going to get this high a return of 8.06% of anything like that on the additional CapEx. We are saying that. We don't see, based on the numbers he utilized on his technical notes, that although from a number crunching standpoint obviously it's correct, the numbers he put out there, we argue that the numbers do not reflect correctly, whether on the OpEx side, whether on the depreciation side, whether on the projection of the volume side, what we find proper.

The way we see it is that if you adjust these variables and assumptions to what we think are more actual, real, and operational related, the outcome will be a greater increase than the one provided by the regulator. Hasan, that's our point.

Okay. That's fine. I mean, it's a negotiation, but just to understand the technical note, your comments were very helpful and thank you very much, Mario.

Okay, and see you Friday.

Thank you.

[Enrique Taretti], UBS.

Mario, I would like to confirm one thing. Is the cost of the contract, the different policy (inaudible) 5% of revenues included as a pass-through in the tariff reset proposal?

No, it's not included; it is not included. All the -- it's called the legal obligations on the contract we have with the city of Sao Paulo and other municipalities we operate are not part of what the regulator considers a regulatory and an operational cost. So it's going to be treated in separate.

The way the regulator has set out is that he would allow us to charge on a specific line in our bill, in our water bill, but that is not the final conclusion for that and the implementation for that is not yet clear. The regulator is also working on the legality of that. Trying and working on obtaining a legal opinion from the state level lawyers, attorneys.

So it's not included and it's not yet finalized by the regulator how and when this is going to be applied. What we know is that it is not included.

Okay, but you are going to try to [get these in] your proposal in the public hearing, right?

No, we're not going to add it because we do agree with them that the 7.5% is not related to the operations, so we are not arguing so far with them how he is dealing with this. He moved from a very negative position to what we see as a very positive position. He recognizes that this is a legal obligation.

I will give an example. He is not including the (inaudible) in the pass-through or in the expenses for pass-through. He is not even including it. He has already actually the technical notes -- comments that he will allow that this will be a charge in separate.

So when I'm paying my bill I will know exactly how much (inaudible) will be paying, how much I'm paying for the service, and potentially whether we are paying for the legal obligation of the 7.5% for the municipal fund of the city of Sao Paulo. So it's going to be separate.

Okay, thank you Mario.

[Giovanna Veracruza], Barclays.

Mario, good afternoon; it's Francisco Navarrete. Thank you for the call. I know already addressed a bunch of questions in the Portuguese call. I just have one follow-up question.

If you could help us understand the disconnect between what you're saying is going to happen with the revenue of SABESP next year with the 1.94% increase and the regulator's statement just a few minutes ago saying that what should matter in page 51 of the technical note is the BRL10 billion that he is saying that you should achieve as revenue in 2013 with the tariff and structure that SABESP needs to decide and provide and inform the regulator about.

So in other words, he saying that the focus should be this BRL10 billion of revenue that you should be allowed to collect as opposed to a 1.94% tariff increase or whatever percentage tariff increase, or for that matter, whatever reais per cubic meter new tariff that you are being set. So if you could please help us understand that it would be very helpful for trying to model revenue and EBITDA. Thanks.

Francisco, let see if I understand what you said. We just said that on a fairly first approach we understand that the best way to see and look at the 1.94% is by it to the total revenue and move on from the accounting numbers as they are and we are now. This is what we said in the Portuguese and we just reiterated with Mr. Hasan now.

But let me understand, you mention that the regulator has just made a comment that we should consider the BRL10 billion revenue, is that it?

(multiple speakers) Correct. After the Portuguese call we are trying to understand -- as you mentioned, it is a very complex technical note and there is a lot of confusion by the market by analysts, probably even you guys are trying to deal with the new information that they are proposing to you. So we want to understand what is the revenue or how we should think about revenue for SABESP after the review is implemented in February, February 1.

And the comment -- the regulator has commented is that what we should focus on in page 51 of the technical note is not the [BRL2.92] per cubic meter, not the 1.94% tariff increase that it represents, but what the technical note points to is that SABESP is being allowed to collect a revenue amount of BRL9.9 million beginning 2013 once the regulation is implemented.

So this is -- and I don't really know how the technical note maybe translates to that or not. But clearly if this is sustained by the regulator then maybe we should think that the 1.94% written in the note doesn't really converge to the intention of the regulator which has allowed BRL10 billion revenue for you beginning next year. This is just our thoughts based on our discussion with the regulator and we want to try to connect the dots here. Thank you.

Okay, but, Francisco, truly speaking, we are not aware and we have had no information from the regulator -- if you had it that's great -- that what should be considered is the revenue he's proposing to start in February. I mean, in fact the way we read it, and I'm trying to find it here in the technical note, we are trying -- so if you have this information, we don't have that information, okay?

But the way we look at it is that on page 51 we actually see that -- let me see if it is on page 51. We are saying -- what we are looking at is on page 42 on Item 10.10, last paragraph, where he is basically saying that this new tariff level corresponds to a linear increase in tariffs of 1.94% given that the tariff -- the start, base tariff that he estimated is 2.87%. So that's the only thing we can understand.

We cannot understand from what he just -- he put out that our revenue starting next year will be BRL9.994 billion. So maybe we don't have the same information.

Thank you, Mario.

But again, Francisco, the way we looking at it maybe too much simplistic, but we cannot start inferring unless he has made any public statement that all of us are aware of it. We don't know.

Thank you, Mario. Well, yes, I understand the confusion. I mean, it's really difficult to -- for us to come up to a final conclusion. And I understand where you're coming from, because it is, in a way, poorly written and there is a big disconnect that we are trying to fill in the blank. But thank you very much for your answer.

Okay, Francisco. We will be working on this and hopefully we will be getting better and we can review all this as we move on. Thank you.

(Operator Instructions) We appear to have no further questions. Now I will turn the conference back to SABESP for their final remarks.

Okay, thank you, everybody, for your time. I know this is a -- we have fairly good results on one side. On the other side we do believe we have fairly good results in the process of establishing the methodology, but nonetheless, as we can all see, very complex.

We will be working to understand and bring more clarity to ourselves and to the market. Feel free to call us -- myself, Angela, and the IR team. We will be fully available. Thank you and goodbye.

The conference has now ended. You may now disconnect your lines.