Southern Copper Corp (SCCO) 2005 Q2 法說會逐字稿

Welcome to new SPCC. Today's conference call will of course cover results of SPCC, that combine our old Peruvian assets of course, plus the recent acquisition of the Mexican mining assets, formerly known as Minera Mexico. Southern Peru Copper Corporation, as in your stock listed Company, of course, reports all figures and everything we discuss today in full US GAAP.

With that in mind, gentlemen, there are various items that we would like to review today in this conference call. The first item will be the bond offering that was executed yesterday. The second item will be the equity secondary offering that we executed just about four or five weeks ago. The third item on the agenda is, of course, SPCC quarterly results and review of operations. We will then proceed with investments and dividends. So let me turn first to the bond offering.

We are certainly excited about the transaction that we executed and completed yesterday. We went through roughly one and half week road show throughout Europe and United States, in which a significant demand -- a significant amount of demand was attracted. A total of $4.3 billion or roughly over $4.3 billion of total demand was demonstrated by over 240 accounts across various continents, including of course, Europe, Asia and North America and Latin America. The bond was finalized at a total amount of $800 million, divided up into two traunches. This is larger than the initial amount that we announced of $600 million, and a reason for that is, of course, the important and increased demand that we saw, and of course, the ability to reduce and lock in a long, low fixed costs financing for the company throughout various cycles in the future.

The finalized transfers were $600 million in 30 year bonds at 7.5% coupon. The additional increase of $200 million is in 10 year bonds paying roughly 6 3/8% coupon. In any event with this we will of course use the entire proceeds to refinance existing indebtedness, albeit there might be a slight nonmaterial increase in net debt. But nothing that will be too material. The intention again, of all of these proceeds is to refinance all existing bank debt and increase our average duration currently running at about 5.2 years to about 20 years on average.

Our amortizations, as a result of this refinancing procedure or strategy, will eliminate practically all material amortizations until 2015 and 2035. We also completed in June 9 of last month a secondary offering that we consider to be highly successful. We also obtained for that secondary offering a considerable amount of demand across various continents. The transaction was over two times oversubscribed. We placed a total of roughly $950 million, almost a billion. And as a result of this placement, we have seen the liquidity and the daily trades of SPCC in terms of volumes of shares increased considerably.

Now, with that in mind, let me turn also -- or now to SPCC quarterly results. I will first review financial results with mine production, copper production sold for the three months ended June 30, but also for the six months ended June 30. We will do some comparisons based on the three months ended in June 30 to the three months in June 30 of last year. But we will also draw some comparison against the first quarter of this year so that you understand where the variances are and why these have occurred.

Now let me turn first to total copper production as mine production of new SPCC. In the second quarter of 2005 total mine production amounted to almost 169,000 metric tons of copper. And this compares to a figure of 183,000 metric tons produced in the second quarter of 2004. This leads to roughly a 4% decrease in mine production and as a result of course of lower ore grades that we had announced and have expected and that is temporarily lower ore grades at Cuajone mine.

However we compare the second quarter of 2005 to the first quarter of 2005, we have a slight increase in production. That is roughly 7.7%, and again the figure for the second quarter '05 amounts to 169,000 metric tons compared to 162,000 metric tons in the first quarter of '05. The slight increase from the first quarter of '05 is due primarily to slightly recovering ore grades as we have mentioned at the Cuajone mine. So let me repeat that so that we understand exactly where these variances come from.

Second quarter of '05 compared to last year has lower mine production due to the lower ore grades at Cuajone. But second quarter '05 production is higher than the first quarter due to slightly increased ore grades relative to that quarter. Our copper sales volume essentially rides this production profile, and of course, compared to last -- to the second quarter of 2004 total sales decreased by roughly 5% and amounted to a 172,000 metric tons for the second quarter of '05. And that is of course the result of the same explanation of the lower grades at Cuajone.

When we compare copper sales volume to the first quarter of '05 we have a slight increase in production sold, and that is again consistent with the behavior of the ore grades and the explanation I just gave for the copper mine production. As a result of these variances in the copper mine production and also significantly increased copper prices that averaged $1.53 for the second quarter of '05 compared to a $1.46 of the first quarter of this year and compares to $1.23 for the second quarter of 2004 we have across the board registered higher revenues. Total sales in dollar terms in the second quarter amounted to $958 million and compares favorably to last year's quarter of $722 million and to the first quarter of $946 million.

Cost of sales on the other hand has increased consistently from the second quarter of 2004, and the result of that is simply increased workers profit sharing because of [inaudible] prices. Compared to the first quarter we only have a very slight increase in cost of sales, that is $390 million of cost of sales in the first quarter compared to $410 million approximately of cost of sales in the second quarter and the result of this is simply slightly higher volume sold.

EBITDA for the second quarter of 2005, according to US GAAP, and please refer to the offering memorandum page 65 in order for you to understand how we calculate US GAAP EBITDA, and it's a little bit different than just simply adding operating income plus depreciation. But in any event US GAAP EBITDA was slightly higher in the second quarter of this year amounting to $546 million compared to $522 million of the first quarter of this year and $389 million of the second quarter of last year.

The increase in EBITDA is mainly due to higher metals prices, of course, of molybdenum and of copper, albeit a little bit mitigated or the higher performance in EBITDA was slightly mitigated by a smaller amount or a lower amount of molybdenum production sold during the second quarter. And this lower molybdenum production sold is consistent with lower molybdenum mine production and lower molybdenum ore grades. These are expected to recover in the next few quarters. Net income increased to $307 million in the second quarter of '05 and also compares favorably with the $298 million of net income in the first quarter and $240 million of net income in the second quarter of last year.

Consistently, earnings per share also have increased and demonstrate the same performance. Total earning per share in the second quarter of '05 amounted to slightly above $2 and amounted to exactly $2.09 compared to $2.03 of the first quarter of this year and compared to $1.63 in the second quarter of 2004. Capital expenditures have increased, total capital expenditure in the second quarter of '05 amounted to $96 million, almost $97 million and compares to $65 million of the first quarter, excuse me, of the second quarter of last year. The increased capital expenditure is mainly the result of CapEx going into the Ilo smelter modernization program which as many of you know is an environmentally aimed project.

We expect to spend a total amount of roughly $450 million in the smelter of which a $150 million had been spend last year, roughly $170 million should be spend this year and the remainder should be spend next year. The smelter should be up and running and fully operational by October of next year, having said that we will start running some parts of this smelter by October of this year. And we will already start showing some lower cost [inaudible] of smelter because of the new technologies going into that project.

Now let me turn also to the six months ended June 30, the six months ended June30 totaled sales amounted to $1.9 million in the backdrop -- $1.9 billion in the backdrop of 334,000 metric tones of copper production sold. Copper production in the six months was a little lower than the 346,000 metric tones that we sold last year. This demonstrates a decline of 12,000 metric tones mainly this is fore due to the lower [graded] performance as previous explained mitigated by higher throughput at our Mexican operations. Cost of goods sold amounted to $815 million and is a 40% increase from last year, the result is of course mainly 70% of this increase is due to increased mandatory workers profit sharing, the remaining 30% is focused primarily on higher fuel cost that is diesel fuel but also other smaller items such as higher steel cost for the mills and so on. But the vast majority of the increasing cost of goods sold again, roughly 70% of that increase is due to mandatory workers profit sharing in both Mexico and Peru and this obviously a result of the higher metals prices that we have registered across the Board.

EBITDA for the -- in accordance with GAAP for the six months ended June 30, 2005 amounted to $1.70 billion and compares favorably to the $729 million generated in accordance with GAAP EBITDA last year. Net income amounted to $606 million and compares to the $422 million generated last year during the same six months and demonstrated a 43% increase in net income. Capital investments for the six months ended in June amounted to $195 million compared to $133 million last year, that is again a 47% increase in [cap meters] mainly focused on the Ilo smelter modernization. I should also mention that we have already started conducting tests of the crusher and conveyor built system in the Toquepala mine, in this project we have spent a total of about $61 million and this is part of the capital expenditures that we have seen increasing throughout this, the first 6 months of this year. This new conveyer and crusher will of course crush over to a smaller degree, increase recoveries at or SX/EW operations but also at the same time reduce traveling costs, because we will avoid using trucks over long tunnels and use conveyor belt systems. As a result, we expect to save roughly $25 million a year, by operating this new crusher and conveyor belt system.

Let me also discuss future investments, we are currently reviewing certain expansions mainly focused in the Cananea mine, we expect in the next 24 to 36 months to add a total of between 66,000 to 88,000 metric tons of additional copper production, many of these projects are still under review and are subject to Board approval albeit we have already approved a 33,000 metric tons SX/EW expansion in Cananea. We are also reviewing a molybdenum circuit for the Cananea mine and as many of you probably know Cananea currently produces no molybdenum byproducts but with the molybdenum circuit built on there, we will produce molybdenum at our considerable low cost because it is as byproduct, and thereby improve significantly the competitive profile of the Cananea mine. That is in addition of course to SX/EW expansions.

The total amount of CapEx for these projects are ranging between 66,000 to 88,000 metric tons of additional copper production, should amount to an average of $300 million, over the next 36 months and we will of course be announcing exactly, which projects go ahead at the time these project are approved by our Board of Directors. As for dividends we have this quarter paid a total dividend of roughly 50% of net income, we see of course the dividend yield and the excess free cash flow, generated by SPCC as being quite significant and thereby in the last 12 months ending in June, we have paid total dividends now amounting to $700 million roughly compared to $600 million of total dividends in the last 12 months ended in March. So we have continued to increase the total dividend payout for the company and this is of course based on excess free cash flow. We will continue to implement the same strategy going forward as we believe that the excess free cash flow should be given back to shareholders after of course reviewing our project pipeline and subjecting the excess free cash flow to these investments.

Now ladies and gentlemen also I would like to express our commitment to improve our quarterly press releases that have been released to investors in this first or second quarter 2005. We have perhaps been a little bit too busy in the last couple of weeks unfortunately in a [road show to place] the $800 million in bonds and we were not able to completely review and revive our quarterly earnings release to something that is more appropriate and discloses more information. You will see considerable amount of further disclosure going forward and we will improve our quarterly press release significantly going forward and I encourage each and everyone of you to give us a call at the Investor Relations desk of SPCC and we will be happy to respond with information regarding any disclosure you may need. Secondly you may visit our website in the future that we are currently revising and should be up and running by September of this year which will of course present considerable information.

Now with this ladies and gentlemen I’d like to open it up for questions and answers. And I thank you again for joining us. Operator?

We’ll begin the question-and-answer session. I am asking anyone who wish to ask a question to dial "*" "1" on your touchtone phone. Your name will be automatically placed in the queue. To remove yourself from the queue, you may do so by dialing the "#" key. Again if anyone has a question, dial "*", "1" now. We have a question from Alberto Arias. Your line is open.

Yes. Good morning, Eduardo, and congratulations for the numbers. Just a couple of questions with regards to the first quarter results. I know we’re in the second quarter but my question is have you restated the first quarter? Because I was going through the press release that you reported, when you reported the first quarter, and we see that you've had a pro forma number of SPCC and Minera Mexico with net earnings for $324 million, when we compare what you have reported now and your six months number, 605 million for the combined entity, so we’ve subscribed the second quarter from the six months, so it seems that the number that you have presented now implies a net earnings of only $298 million for the first quarter. So that’s not consistent with what’s reported in the previous conference calls. So has these results restated the first quarter when you report your six months results?

Well, this is a result, Alberto, of a change in the law in Mexico that happened after the first quarter of this year. You may be aware that I believe that was around the month of April, Mexico -- or the Mexican government legislated a new law regarding the treatment of mandatory workers profit sharing for all companies in Mexico. This new law essentially dictates that the companies are no longer able to offset workers profit sharing by using net operating losses. So that we, of course, then revise that number, took out net operating losses and there is an impact in terms of lower EBITDA and lower net income that we, of course, appropriately registered in the first quarter and, of course, are now accounting for properly at this stage. So this is again a change in legislation that occurred after the first quarter, and you could say in some sense that it is a change in tax, and thereby not a restatement in the sense of numbers being wrong. It’s a restatement simply because of new legislation.

Second question with regard to the molybdenum production that you are going to have at Cananea. Could you quantify how much more reproduction is going to be and by when should we start to see some production from Cananea on moly?

The current moly circuit being considerate should produce about 7.5 million pounds a year in molybdenum and should start operating perhaps as soon as 20 months from today.

Okay, great. And a final question there was a tax recovery of Minera Mexico that was accounted for in the second quarter. Could you elaborate on the nature of that tax recovery charge or gain?

Yes. It is actually a return of asset tax, since Minera Mexico, our Mexican subsidiary, has a started to register a significant amount of net income, and also taxes payable to the government. We have far exceeded now the asset tax requirement and thereby we get a reimbursement of that tax that was paid in the past because we're paying, of course, higher taxes vis-à-vis earnings.

That is not recurring, right. This is something that we are going to see this quarter and not the following quarters or are we going to see these distributed over a period of time having a positive impact on your bottom line?

No, it is likely that it will be not as material as this quarter going forward.

Okay, great. Thank you.

You are welcome, Alberto.

Your next question comes from Daniel Salzmann. Your line is open.

Hi. Its Daniel from Bear Stearns.

How are you, Dan?

Good. Two questions. First of all just in terms of the disclosure issue. Can you provide a breakdown of revenue by copper, molybdenum, silver, etcetera? And also on the disclosure front if you could provide a breakdown of your copper volumes at Peru and Mexico? Then the second question I have is regarding the dividend strategy, is this -- the 50% payout ratio is, I guess, going to result and that continuing to decline. I am just wondering if that's the strategy of the Company or whether the -- whether the dividend could be even higher than the 50% that you talked about for this quarter?

Absolutely. Let me respond to your first question. Molybdenum in the last 12 months ended in June constituted almost 30% of our revenues. Also the difference and the breakdown in copper is, about 60% copper, silver should be roughly about 3.5%, zinc should be roughly about 3% to 4% and the remainder is other by-products which is a minimal amount. Obviously the increased participation in molybdenum in our total revenues is due to the quite material increases in molybdenum prices. Molybdenum averaging in the second quarter of '05 about $35.33 compared to $13.99 in the second quarter of last year. Now let me talk a little bit about the breakdown. The total copper production sold out of our SPCC Mexico division amounted to 85,400 metric tons in the second quarter, and this compares to a total production sold of SPCC Peru division of 83,220 metric tons. So you could say roughly 50-50 percent comes from each one of the companies. This quarter it was a little bit more skewed toward our Mexican division, but some quarters its more skewed to the other Peruvian division. In terms of the dividend, Daniel, we do expect to pay dividends as we do not target a 50% payment of net income per se. But we do view dividends basically on a 12 month moving average, and you will see this moving about to higher dividends some quarters, maybe 50% in one quarter, maybe 60% or 70% another quarter. But we intend, of course, to pay the excess free cash flow all to investors. On average throughout a 12 month period. A specific quarter, I don’t believe is -- targeting a specific quarter, I don’t believe is appropriate simply because we view things of course on a 12 month moving average in terms of dividends.

Okay, that’s great. And just one additional issue. On the hedging policy and I guess as one of the people really disappointed with your press release for the second quarter. You didn’t refer to the hedge that was referred to in the first quarter press release, I just want to make sure that the hedge of $1.51 for copper held for the entire second quarter, and I am wondering if you've hedged again into the third quarter.

Very good question. The response to that first is that we have hedged the second quarter. Our loss in the second quarter amounted to a little bit north of $4 million, again because copper prices were higher than the $1.51 that we hedged at. We have, however, not hedged anything for the second quarter as we had always viewed the -- I am sorry, the third quarter, as we had always viewed the third quarter as being stronger than the second quarter of this year. So we are not covered for the third quarter at all. Our policy usually is to do very short-term hedges to lock in quarterly profitability. We do not speculate but in this case we decided not to hedge any of the third quarter production.

Okay, great. Thanks a lot.

You are welcome, Daniel.

Your next question comes from Raphael Arkia (phonetic). Your line is open.

Thank you very much. Just two quick questions. I would like to know what kind of production levels could we expect to see in the different part of the years taking in to account the 32,000 SX/EW expansion in Cananea.

Absolutely. Well, the SX/EW expansion will, of course, not impact our production profile perhaps until 24 months from today. So that next year's production should be only effected by relative or great performance in the light. We do expect however that total mine production next year, just simply because of the behavior of our geology, will be higher or slightly higher than the production of this year. And this year's production, of course, should be lower than last year’s production due to the temporarily lower or greater, the Cuajone mine particularly. But these production levels should be recovering. Our mine production again in the second quarter amounted to a 169,000 metric tons. Production sold was about a 172,000 metric tons, and this should slightly but importantly continue to increase in the next few quarters and months.

Okay. Thank you very much.

You are welcome.

Your next question comes from Ed Molachager (phonetic) you line is open.

Yes, good morning. My question is related to your comments on the investments and their expansions. Of those expansions you mentioned, which ones are already considered, let say, in your offering memorandum raise to about 80,000. Things that you can expand in the past two -- in the coming three years.

In the offering memorandum we have disclosed a total of 88,000 per metric tones and this is broken down Ed into a 33,000 metric ton at SX/EW plant in La Caridad, a 33,000 metric tone concentrate expansion at Cananea, and excuse me, the 33,000 metric tones of SX/EW is also at Cananea, I apologize for the confusion. So again 33,000 SX/EW Cananea, 33,000 exactly an equivalent number in a concentrator expansion and 22,000 metric tone in La Caridad SX/EW expansion which was 88,000 metric tones. You all have probably noticed that I mentioned between 66,000 to 88,000 metric tones in the conference call of expansions and the reason being is that we may consider not expanding the SX/EW operation in La Caridad that is 22,000 tones because La Caridad may instead be more directed to a molybdenum mine in the future with copper as opposed to just a copper mine with molybdenum byproduct. We believe that if $4.90 long term molybdenum price is hold, this maybe a more appropriate view of how to manage La Caridad in the future. So that project is currently under review. One new project that we are currently reviewing and is not in the prospectus is in Cananea, the molybdenum circuit expansion, well not expansion, that is actually a new molybdenum circuit, so that Cananea would produce about 7.5 million pounds of molybdenum per annum.

Okay, this project is moly project in Cananea is not considered this $300 million figure you mentioned, or is it?

Yes it is.

Good, all right. Thank you.

You are welcome.

Your next question comes from Denise Fiallo. Your line is open.

Hi, thank you. It's Denise Fiallo from Merrill Lynch. I would like to know if you could just remind us what your debt net -- growth debt net and leverage ratios look like now, given your $800 million bond issuance? And my question relates to Minera Mexico, looking at your cost of financing, it's come down quite a bit with this is most recent issue and Minera Mexico seems to be the 200 basis points higher on average. So I am wondering if you can comment at all on what you might be thinking about from Minera Mexico? Thank you.

Absolutely. There is no significant incremental debt from the issuance of this $800 million, so that at the end of the day you should expect a total amount of debt not to exceed $1.2 billion, currently before the bond issuance we were above 1.1 billion. So, again no material increase in embedment but there is material improvement in average duration in the of course locking -- lock-in in a fixed rate of financing.

Next question comes form Daniel Altman. Your line is open.

I apologize Daniel, give me a second, so that I can finish responding to the bond question. So, again no incremental increase in debt, and proceeds to be used to refinance. I don’t understand however your question regarding particular Minera Mexico being 200 basis points of above SPCC, Minera Mexico unless of course you refer to the old yankee bonds Minera Mexico had, and those yankee bonds were issued many years ago from a different company. So, that you should expect the higher cost of financing from the old Minera. Let me however emphasize that this bond offering we were able to actually place it below the Peruvian country, southern west interest rate and that is a result of course our acquisition of the Mexican mining assets that allow us to pierce the ceiling of SP's or Peruvian southern [west] and we are rated triple B minus by SMP. Now Daniel -- would you, sorry for interrupting.

Daniel your line is open.

Daniel? Maybe we should move ahead to the next question, operator.

The next question comes from Alberto Arias. Your line is open.

Yes, a follow up question, Southern Peru has been saying that do you have the second largest copper operations in the world [inaudible]. And you have a lot of operations in two different countries that have a lot of potential and upside in terms of exploration. How can we reconcile that very large reserve base, that very attractive supply amount in the metals and prices for copper and feel a very slow decision making in terms of expanding, shouldn’t Southern Peru be the natural vehicle by which there is going to be more supply coming into end market given that there is an attractive cost efficient and attractive reserves and so on? Could you explain to us why these -- maybe there is going to be a new strategy now that you have finished these sale of the Southern Peru shares and the refinancing of Southern Peru could you help us explain that?

Absolutely Alberto, our strategy perhaps it's mainly focused on taking advantage of the main attributes of SPCC and it's tailored to that effect. What are these attributes of course very long life reserves in terms of life we probably have the largest reserves in the world and in terms of absolute value or volume in reserves we have the second largest but the largest of all the listed companies. We are also of course a very low cash [cost] producer. We are well within lower 25% of the industry cash cost curve. So this combination we believe allows us on [readily] to implement a that we refer to as being anti-cyclical in nature. What that means Alberto is that we would -- we like to prepare for the top of the cycle when we are at the bottom of the cycle as opposed to doing it the other way around. We believe that this is a way not to incur on significant increases in capital expenditures during the top of the cycle and the reason for that is of course that many companies, when they are at the top of the cycle start ordering the next concentrator and the next smelter, so to speak, driving up capital cost for the entire industry and of course by the time these projects come into fruition, we are usually at the bottom of the cycle again so these companies never return money to shareholders because they find themselves in a difficult situation. We on the other hand expect to do exactly the opposite, we have been very successful in the past for instance in the Toquepala expansion in the SX/EW operations expansion in both Toquepala, in Cananea and also in the expansion of the smelter in Ilo, by funding these projects and ordering all of these equipment at the bottom of the cycle bringing down capital costs very importantly. So when we come to the top of the cycle we think that we are better prepared to generate excess free cash flow and give it back to our shareholders. When we continue to go back to the bottom of the cycle or when we go back to the bottom of the cycle, we believe the company is still able to generate a material amount of free cash flow still pay perhaps a material dividend albeit lower than what we paid today of course, but still fund our project pipeline at that levels and expand then bringing down capital costs and increasing return for our shareholders. So this is a basic philosophy and this is why consistent with our philosophy you will see minimal expansions at the top of the cycle.

Yes. Some of your competitors are taking the strategy of accumulating huge amount of cash, some of them are very positive in terms of net cash position which is very unusual for this industry, it seems that some of them are preparing a war chest for the next cyclical downturn which would allow them to go aggressive into more acquisitions. It seems that from your comments that Group of Mexico has taken the strategy of not accumulating these war chest of financial capability for making an acquisition but that it seems that its all going to go to the shareholders. Am I reading that correctly or would you consider reducing your net debt levels to zero or even go net cash in preparation of that anti-cyclical strategy, that you just described?

That was a very good question and our intention is -- well let me explain it this way. We believe it is better to give excess cash back to shareholders, we do not need a war chest and this is exactly what had in those largest reserves in the industry that listed companies gives you. We have real options, we can grow on our own and we can continue to deliver value to our shareholders and capital appreciation for decades to come without acquiring other companies. So this puts us in a very important strategic position, whereby we do not need to accumulate [or just] incur on a negative carry and never give back money to shareholders. We do exactly the opposite. And we think again the attributes of this Company allows us to do that, because we don’t need cash for the bottom of the cycle. We will continue to generate cash at the bottom of the cycle still. So in a nutshell, if there may be an opportunity out there we think that our currency vis-à-vis our strong share price by paying strong dividends, by giving back money to shareholders, by prudently expanding, by prudently continuously adding value to them and knowing that if we do anything it will accretive to them, will be more important and better shown through a stronger share price than hoarding cash and then incurring a negative carry.

Okay, great. Thank you

You are welcome

Your next question comes from Reynard Ashe (phonetic). Your line is open.

Yes, hi. As you mentioned one of your great assets is that long life of mines that you have. I know it's a bit of a rough question, but can you give us a rough estimate of what the CapEx per ton for brownfields expansion is at each of your [working] mines, Cananea, Cuajone, and so on.

Well, as you appropriately stated, it is extraordinarily difficult to give you a rule of thumb. Because in some areas we have excess infrastructure or have certain infrastructure already in place and brownfield expansions would be minimal. In other cases you need to invest more. It depends on the capacity, of course. It depends on the amount of infrastructure lying around, and it depends on the type of plant. But to give you an idea and as we disclosed in the offering memorandum, as well as in the prospectus supplement, regarding the secondary offering. The concentrator plant expansion in Cananea, which is about an increase that will produce 33,000 metric tons of proper production per annum is a total investment of no more than $80 million. So you can work through the math there. But we have a range roughly between $4,500 per ton of copper produced on average in our brownfield expansions. Some however are as small -- some are smaller, some are larger, but roughly around that area.

Okay.

There are no further questions at this time.

Ladies and gentlemen, thank you very much for having joined us today at the new SPCC conference call. We will, of course, respond to any further questions you may have. Our IR Department is geared up to do so and we will continue to improve our quarterly press releases and disclosure aggressively in order for you to understand the Company better every quarter. Thank you very much again, ladies and gentlemen. We will see you next quarter.