Telecom Argentina SA (TEO) 2006 Q1 法說會逐字稿

Good day, everyone, and welcome to the Telecom Argentina first quarter 2006 earnings conference call. Today's call is being recorded. Participating on today's call, we have Carlos Felices, Chief Executive Officer; Valerio Cavallo, Chief Financial Officer; Pablo Caride, Finance Director; and Pedro Insussarry, Investor Relations Manger. At this time I'll turn the call over to Mr. Felices. Please go ahead, sir.

Good morning. I would like to thank everybody for participating in this conference call. I am Carlos Felices, and, together with me are Valerio Cavallo, our Chief Financial Officer; Pablo Caride, our Finance Director; and Pedro Insussarry, our manager of Investor Relation Division.

As an introduction to this conference call, I would like to go over some highlights of the quarter. As you were able to see in the press release distributed yesterday, our results continue to be positive. Our revenues continue to grow at a strong pace fueled by the expansion of our cellular and Internet business, and our operating profit before depreciation and amortization also show a positive evolution.

Yesterday we reported our earning results for the first quarter of fiscal year 2006 where consolidated revenues grew by 30% when compared to the same quarter 2005 reaching approximately 1.6 billion pesos. In a very competitive Argentine mobile market, our revenues grew by 60%. In the fixed line business revenues increased by 70%, lines in service grew by 4%, and ADSL connections increased by 79%.

Concerning our earnings and results we reported a consolidated net income for the quarter of 3 million pesos. Our bottom line was negatively affected by the FX losses related to the evolution of the change rate of the Argentine peso against [current] currency. Moreover, the company continues to deliver healthy levels of operating cash flow that allows us to finance the capex programs that will support the growth of our business and reduce our net debt.

With respect to the tariff renegotiation, in March we signed with the Argentine government a letter of understanding that set the fundamentals of the final contract renegotiation. This event represents the last phase of this process that we expect will end during this fiscal year.

Finally, during March Telecom Argentina obtained from its creditors consent to modify certain conditions contained in the indenture that governs its notes. These amendments imply that all the quantity limitation on Telecom Personal capital expenditures agreed upon in the debt restructuring process are no longer being placed, and Telecom Argentina eliminated the obligation to reinvest in Telecom Personal any dividends received from its subsidiary.

We would like to point out that these results are basically in line with the main developments that we expect for this fiscal year in terms of a rapid expansion of our cellular business together with a recovery of operation and margins and the consolidation of Telecom Argentina as a leader in the fixed line and Internet market.

After this introduction, I would like to pass the call to Valerio Cavallo and Pedro Isussarry, who will go into the specifics of the results that we have announced yesterday. Pedro?

Before we continue with the conference call, we would like to clarify that during the conference call and Q&A session, we may produce certain forward-looking statements about Telecom's future performance, plans, strategies and targets. Such statements are subject to uncertainties that could cause Telecom's actual results in operations to differ materially. Such uncertainties include but are not limited to the effects of the public emergency law and complementary regulation, the effects of ongoing industry and economic regulation, possible changes in demand for telecom products and services, and effects of more general factors such as changes in general market economic conditions and legislation or in regulations. Our press release dated May 10, 2006, a copy of which will be included in our Form 6-K report furnished to the SEC, describes certain factors that may affect any forward-looking statements that we may produce during this session. Furthermore, we urge the audience of this conference call to read the disclaimer clause contained in Slide 20 of the presentation.

As usual, we would like to remind you that for all those that have not received our press release or our presentation, you can call our office or download them from the our website at www.telecom.com.ar. Additionally, this conference call can be replayed through our webcast feature available in the Investor Relations section of our website.

Having done these clarifications, let me pass the call to Valerio Cavallo.

Thank you. Moving on with the conference call, today's agenda, as seen on Slide 1, is to go over first the evolution of Telecom group and the general overview. Then we will go through a brief description of the performance of our fixed line business and finally we will describe the evolution of our cellular business.

Going to Slide 2, we would like to briefly detail the issues affecting the macroenvironment in which a telecom operates. During the first quarter of 2006, the Argentine economy maintained the expansionary trend [unintelligible]. The GDP grew 9.2% during 2005.

Inflation is clearly the main concern in terms of macroeconomic scenario. EPI inflation amounted to 11.7% for the 12-month period ending April 2006. In order to monitor the CPI evolution, the Argentine government has taken several actions such as the sector agreement involving producers and retailers or a more general macroeconomic measures involving fiscal policy and wage and bargaining processes.

Consistently with the economic policy, focused on maintaining a depreciated currency, the Argentine peso depreciated by 2% in first quarter of 2006 to peso 3.8 per U.S. dollar mainly due to the intervention of the Central Bank acquired in dollars in the local fixed market that have contributed to increase its foreign currency [this our position].

Federal public sector, primary balance in the foreign trade remain positive in the first quarter of 2006. During 2005, federal public sector primary surplus was 19.6 billion pesos, equivalent to 3.7% of GDP, and foreign trade surplus was $11.3 billion, equivalent to 6.3 of GDP.

Going to Slide 3 and to the regulatory environment as Carlos Felices has mentioned, the company has signed a letter of understanding with the Argentine government that includes the confirmation that the Telecom has complied with the obligations included in the transfer contract, commitment from the government to set a stable regulatory framework to be enacted through a new telecommunication flow and certain adjustments to the tele structure. Additionally, Telecom Italia and the W Group agreed to suspend any legal action against the Argentine government with a consequence of emergency low.

This letter of understanding establishes the main fundamentals for the negotiation agreement that we expect will be in force by the end of the year.

In Slide 4 of the presentation, we are making an overview of the market environment. The cellular market continues to grow reaching a penetration of approximately 58% of population. This growth has resulted in incremental revenue but with higher commercial expenses -- advertising, handset subsidiaries, and vendor commissions, and accelerated capex plans. In a very competitive environment, the market continues to evidence a very strong innovative profile both in handset and services.

Despite the strong growth of the cellular market, the fixed line business continued to grow in a moderate base where the more dynamic item was the broadband service. Competition is mainly focused on long distance, corporate and the government accounts as well as broadband services.

Going to Slide 5, we can see the evolution of the consolidated income statement. During the first quarter of 2006, revenues grew by 375 million pesos, or 30%, reaching 1.6 billion pesos. This was mainly driven by the expansion of the mobile business in Argentina and Paraguay and, to a lesser extent, to the growth of the Internet and the fixed line operations.

Operating costs have increased by 340 million pesos, or 47% when compared to first quarter of 2005. It was mainly due to the higher commercial expenses where mobile subscriber acquisition costs have significantly increased, and network of access costs have also raised due to incremental traffic generated by our fixed line and mobile customers. Meanwhile, operating profit before depreciation and amortization amounted 543 million pesos, 7% higher to first quarter 2005.

The evolution of revenues and operating costs resulted in a reduction in the margin from 41% as reported one year ago to 34% for the first quarter of 2006. Without the operating profit, net income for the period was mainly influenced by the negative financial results related to foreign exchange fluctuations.

Finally, net financial debt declined by approximately 2.2 billion pesos, or 34% since third quarter 2005, or by 235 million pesos when compared to December 31, 2006, mainly due to the fact of the debt restructuring in Telecom Argentina and the cash generation of the group.

Going to Slide 6, we are showing the evolution in the composition of our consolidated revenues and operating profit before depreciation and amortization for the first quarter of fiscal year 2006 and compared to that registered for one year ago. The consequence of the rapid growth experienced in the cellular business, the participation of this business in the consolidated revenues has been consistently increasing in the recent years.

As you can see, in the first quarter of 2005, cellular telephony represented approximately 44% of our revenues. This participation has increased to 55% during the first quarter of 2006. In addition, the participation of the cellular activity in the consolidated operating profit before depreciation and amortization increased from 35% to 40% in the same period.

It is important to mention that these percentages are after the elimination of inter-company accounts.

Going to Slide 7, we can see our capex broken down by company. As we can see in the slide, capex for the first quarter of 2006 for Telecom Argentina, Telecom Personal and Nucleo, amounted to 69 million pesos, 66 million pesos, and 3 million pesos, respectively, with a total of 138 million pesos, equivalent to approximately $45 million.

As we have mentioned in previous conference calls, our capex margin for 2006 amounted to approximately $300 million. We estimate that we will comply with this capex plan.

The company continues to invest in the cellular business, increasing coverage and capacity of the GSM network, the introduction of new services, and the development of information technology to support the business of the main areas of focus. In particular, we continue expanding our coverage in the South consistently with our commercial objective of gaining market share in this region.

In the fixed line business, capex was mainly oriented toward the expansion of the ADSL network, the upgrade of information systems, and the maintenance of the network. In addition, resources as a real indicator to the upgrade of our fixed line network to the latest technology available such as the development of a next-generation network using IP technology that will permit us to enhance our portfolio of services and gain opex and capex efficiency.

Going to Slide 8, we can see the effects of the liberating policy followed by the Telecom Group in recent years, permitting a remarkable improvement of its great ratios that today are comfortably within investor standards. On December 2006, the Telecom Group returned to the capital market in a transaction where Telecom Personal announced successful refinanced $381 million including the issuance of $240 million benchmark note due in 2010. At the end of March, Telecom Argentina obtained unanimous approval of note all this to present at the extraordinary meeting in order to modify the conditions contained in the indenture of Series A and B notes.

These modifications were the elimination of the capital restrictions for Telecom Personal and Telecom Argentina's obligation to reinvest in Telecom Personal and a dividend or distribution payment received from that subsidiary. Moreover, only Telecom Argentina prepaid the equivalent of $215 million whereby all principal installments until April 2009 were canceled and leaving the next mandatory principal payment to being October 2009.

Having gone through the [unintelligible] of our consolidated figures, I will pass the call to Pedro, who will continue with the description of the fixed line and cellular businesses.

Thank you. Going to Slide 10, we can see the main items as our consolidated income statement of Telecom Argentina. In the first quarter 2006, revenues grew by 66 million pesos, or 9%, to 808 million pesos as compared to the same quarter of 2005. The most dynamic items were the Internet business and the interconnection revenues generated by incremental traffic coming from the cellular industry.

Regarding costs, opex rose by 51 million pesos, so 14%, mainly due to the increase in labor costs with the application of the agreements reached with the unions at the end of last year and the application of similar wage adjustments to non-unionized employees since March 2006.

Meanwhile, operating profit before DNA amounted to 403 million pesos with a growth of 4%. Furthermore, EBIT margin increased from 15% to 20% mainly due to the growth in OPBDA and the reduction in amortization charges.

Finally, net income of 3 million pesos was influenced by a loss in financial results of 182 million pesos as compared to earnings of 175 million pesos in the first quarter 2005. The [reversion] of the financial results is mainly due to the foreign exchange fluctuations partially offset by lower financial expenses.

In Slide 11, we can note that despite the growth of the cellular market, the fixed lines and service continued to increase growing year-over-year by approximately 138,000 lines. That represents a 4% annual growth rate. During this quarter, we have seen a 17% decrease when compared to the first quarter in 2005 in terms of public telephony revenues mainly related to the substitution effect due to the expansion of the cellular business.

In terms of rates, the average DLD and ILD rates have remained stable at similar levels of last year. This evolution is mainly due to the application of new plans and semi-flat products as the company aims to defend its participation in this highly competitive service. Local rates continue to be affected by the tariff fees imposed by the Argentine government.

In Slide 12 we can see that total traffic volumes is approximately 1% higher when compared to the first quarter 2005. This increase is mainly related to the higher number of lines and service. Compared to the fourth quarter 2005, traffic volumes showed decreases due to seasonality.

For the March 2006 quarter, the average revenue for fixed line customers remains stable at 38 pesos when compared to the first quarter 2005.

Moving to Slide 13, the ISP business has registered an increase of 24% in terms of customers when compared to the first quarter of 2005. ISP ADSL connections have more than doubled in the last 12 months, reaching 186,000 lines. Total lines with ADSL connections reached 244,000, 80% or 108,000 lines higher when compared to March 2005. Regional penetration of 6.2% of total lines and service up from 3.6% in March 2005. This is a consequence of the strategy of Telecom Argentina where the expansion of its broadband service is one of its main objectives. This is being achieved through market segmentation with specific products for each type of customers, whereby we aim to break the price orientation that other broadband operators are following.

Going to the description of the cellular business, in Slide 15 we can see how the consolidated income statement for Telecom Personal involves during the three-month period ended March 2006. Total revenues grew by 306 million pesos, or 60% to 815 million pesos. Meanwhile, service revenues excluding handset sales totaled 716 million pesos with an increase of 55%. This was mainly driven by the expansion of the number of subscribers of approximately 2.1 million net adds by high levels of traffic and an increase use of value-added services.

With regard to operating costs, these have increased by 299 million pesos, or 74%. This increase was driven by higher commercial costs aimed to capture the opportunities of the impressive growth of the market and to face higher levels of competition. Moreover, incremental traffic resulted in higher interconnection and network access costs such as roaming and termination charges.

Meanwhile, operating profit before depreciation and amortization amounted to 114 million pesos, or 7% higher compared to that registered one year ago. Regarding the margin, it has declined by 21% in the first quarter of 2005 to 14%. Nevertheless, it is important to mention that this margin is higher than the 11% reported for the last quarter fiscal year 2005. If we deduct the effects of subscriber acquisition costs, Telecom Personal would have reported a recurring pretax margin of 41%.

We can see in Slide 16 the evolution of the cellular subscriber base in Argentina. In the last year the cellular market in Argentina has experienced spectacular growth in terms of subscribers. At the same time, existing subscribers have massively migrated to the GSM technology. As of March 2006, customers of Telecom Personal have increased by 50% year-over-year and by 3% compared to December 2006. It is important to mention that the mix of postpaid and prepaid customers continues to improve. As of March 2006, postpaid subscribers accounted for 36% of the customer base, up from 28% one year ago.

In addition, subscribers operating in GSM technology already represent 73% of the subscriber base.

Going to Slide 17, we can see the significant subscriber growth was 7% increase in ARPU. This was a result of the strategy of Telecom Personal of focusing on high-value customers such as postpaid and mixed plans while the incremental use of value-added services continued during the first quarter 2006. For instance, outgoing SMS traffic increased by 225% when compared to the first quarter of 2005.

In terms of business strategy, the company continues to develop certain actions with the objective to consolidate our market position. Such actions includes the defense of our market leadership in the Northern region of Argentina, consolidate our position in the Buenos Aires region, and to gain market share in the Southern region.

In addition, these actions also include the development of new commercial channels, the investment in coverage and capacity of the GSM network, and the allocation of resources to customer support functions by enhancing call centers and information systems.

Moreover, considering the high penetration of the cellular service, we expect a change in the profile of the market where the new subscribers will predominantly come from the prepaid segment. We expect that this change will start to occur during the second half of 2006.

Going to Slide 18, we can see that gross additions in the cellular business increased at the rate of 54%, while churn has increased to 3.6% per month. It is important to mention that during the first quarter of 2006, Telecom Personal has increased the conditions to maintain active prepaid customers. This has resulted in an increase in the level of disconnection, a residual [unintelligible] in prepaid lines. Approximately 65% of disconnections were [unintelligible] prepaid lines.

Meanwhile, in order to sustain the growth in the subscriber base, acquisition costs have increased by 152%.

Finally, we can see in Slide 19 that our subsidiary, Nucleo, in Paraguay that operates in this market showed a 55% increase in revenues when compared to the first quarter 2005, maintaining a healthy level of operating profit before depreciation and amortization margin of 40%.

Moreover, Nucleo has expanded its customer base by 29% while it has increased its ARPU from $9 to $10 during the last year. Nucleo's operations are managed with a strong focus and profitability. The healthy level of cash flow generation of the company permitted a substantial deleveraging in the recent quarters.

And having concluded with the presentation let me pass the call back to Carlos Felices for final remarks.

As a conclusion of what we have been discussing during this conference call, we can see that our operations have all been positively, especially in the wireless and broadband services. Additionally, the cash flow of the company in the fixed line business remains very solid. Moreover, despite increasing customer acquisition costs, cash flows generated by our cellular unit allowed us to internally fund the expansion of our business.

Moreover, we continue working to fulfill the guidelines of our plan for the fiscal year in terms of the commercial actions to capture new cellular and broadband subscribers, the evolution in coverage and the capacity of our cellular and fixed line networks while maintaining our focus in long-term profitability.

Having concluded the presentation, we are more than pleased to answer any questions you might have. Thank you very much.

[OPERATOR INSTRUCTIONS] Miguel Garcia, Bear Stearns.

My question is regarding to the commitment from the government to develop a regulatory framework -- did you confirm that that regulatory framework to be included in the bill includes tariff increases and, if so, when do you think they could be reached? I know the question is about your wireless subscribers [unintelligible] in the quarter. They were, most of them, postpaid, right? I wanted to know if this represented a change in the strategy? If you're focusing more on postpaid subscribers or you're experiencing or you are actually encouraging migration of prepaid subscribers to postpaid -- your own subscribers? And, lastly, I want to ask you your market share, since you are now focusing on the Southern region, what's your market share in all number of subscribers right now in that region?

Okay, let me refer to the government agreement. The agreement did not touch the tariff question except for specific increases incoming calls -- international incoming calls and some changes in the time of the day that we have promoted tariffs.

The [spectative] is that the price situation will be discussed at one point after we are close to finalize what we have as a new law or have a new -- the new regulation for one industry. But for the time being, we don't have any specific points regarding tariff. Already is specific agreement regarding tariff with exception of the two points that I mentioned to you. I don't know to respond to your question.

Well, actually, no, it's just surprising to me that the government itself is not trying to establish more clearly a future framework for future tariff increases. I understand that there is an agreement that there is no one tariff increase this year, but, going forward, I don't see why you guys are not sitting with the telecom companies with the government and discussing how the future increases will be, if they are going to be based on inflation or exchange rate or things like that.

Okay, let me tell you something. I think it is not reasonable to think that we don't sit with the government to talk about tariff. The quarter here is that we have to reevaluate the company as a whole, and in this regard, we are putting our focus in protecting or trying that the activities that are free today and where we have the stronger growth will not be affected. That's why we accepted this position -- this position with the government to not to talk about tariff for the time being, especially considering that the government is very focused on inflation and having an increase in our regulated tariff will impact the inflation rate.

Another point to consider is that if you analyze other agreements that includes tariff increases, you will see that with few exceptions, the tariff didn't change. It means that our objective has been to try to maintain an open channel of communication with the government and trying to not affect with our negotiations import business that are growing in a very fast way, such as the mobile and the ADSL. But, again, we are permanently talking with the government and anytime that we have the chance, we talk with them about the need to have tariffs that are balanced with the rest of the tariff in the economy.

Okay, regarding to the second question, the disconnections are mostly focused in our old technology, EDMA, where we have a migration effect from the old technology to the new technology. And this is mostly the situation there. In the South, our presence is still reduced. We have a market share that is around 5% today. Our spectative in that once we have -- our network working, we will be able to increase substantially this market share, but we are not in conditions today to establish or to comment on a market share.

The second question I was actually referring to postpaid subscribers. I wanted to know if they increased -- the high increases in postpaid subscribers was because you are acquiring mostly postpaid subscribers or because there is also a migration from prepaid subscribers, maybe high traffic prepaid subscribers, to postpaid plans.

Miguel, what happened during this last question -- first of all, I mean, the strategy of Telecom Personal is to focus, as we mentioned on several occasions, to focus on the high-value customers in the premium market, okay? And that strategy basically implies that our growth compared to other operators is in the higher percentage, postpaid than prepaid. That doesn't mean that we are -- growth comes predominantly from the postpaid but in terms of share of postpaid, vis-à-vis prepaid, we have a higher percentage than the rest of the operators. As a matter of fact, the operator has grown most in the postpaid segment as compared to the other two operators.

Specifically what happened in the first quarter 2006 was that the company basically made its disconnection policies of prepaid customers more stringent than what it had previously. Basically, we increased the conditions to maintain inactive prepaid customers, and that what happened -- what resulted was that many prepaid TDMA customers were disconnected. As we mentioned during the presentation, close to 65% of our disconnections are related to this effect, okay? So what happened specifically in the quarter was that the growth, the net growth of prepaid is lower than what you would normally see if you wouldn't have this effect, okay?

And the last part of your question regarding migrations of prepaid to postpaid -- no. Basically, we don't see that effect, at least for the time being.

[Mark Estacaribba], Citigroup.

Can you just give us an update on the guidance for the net adds for Personal this year? And also on the margins -- I think previously your guidance for net adds for this year are 1.3 million, and the guidance for the margin for this year has run 16 and 17%. And also can you give us a percentage of the hybrid customer -- part of the postpaid space as well, please -- and the ARPU for that, please?

Mark, we haven't changed our guidelines, as Carlos Felices mentioned. We continue with a plan, and we haven't changed our expectation in terms of sub growth nor margins. The only comment I would add to that is that in terms of margins, margins should be similar -- on the overall fiscal year, margins should be similar to what you've mentioned, but obviously the trend will be basically increasing towards the second half of 2006, okay?

In terms of the hybrid product of our customer base, approximately 1.7 million subs are -- this hybrid product will be both Cuentas Claras, and in terms of the ARPU, no, we do not disclose the ARPU broken down by -- including this hybrid product.

Can you also comment on the dropoff in the MOUs? I notice that it's dropped sharply this quarter. Can you just comment on that and the trend going forward on -- is the traffic slowing or the reason for that, please?

Well, the reason is basically with a 50% growth in terms of subs, basically you tend to acquire more marginal customers as a counter effect to that, what we've seen is a dramatic increase in the SMS and basically in the customers that we've been acquiring, SMS is a higher effect than the existing base, and that's why you see a lower MOU, but you see higher ARPUs because basically MOU does not measure SMS traffic. MOU is basically related to voice traffic.

[OPERATOR INSTRUCTIONS] Dan Kwiatkowski, Schroders Asset Management.

Just a couple of other questions on your churn. Should we -- obviously, you added new accounting practice, which meant that churn went up in the quarter. Should we take it as given that the churn should be lower than this on a full-year basis in 2006? And the second question related to the churn was at what stage do you think you're going to have 100% GSM subscribers?

Regarding the expectations of our churn, basically that what we're seeing in the market -- basically we're seeing a very dynamic market growing pretty rapidly, and related to this dynamic, churn has increased together with what we've mentioned regarding the change in the disconnection policies. We expect that churn will go down, obviously, this will also be related to how the market evolves, and basically once we see that the market starts to slow down, this should also help to reduce our churn level.

Clearly, I would say in this first quarter, that churn has been high. We expect that churn will tend to go down during the rest of the year.

Regarding our percentage of GSM customers, today, 73% of our customers are in GSM standard, and this is changing pretty rapidly as we acquire 100% of the customers that we acquire are basically in GSM. And we expect that we, I would say, by the end of next year, close to all of our customers, we'll be in GSM standard. We will still have marginal TDMA customers that still generate traffic, and we will maintain that during a certain period of time. But, in general, I'd say that the migration will conclude to basically during -- by next year.

Ruth Mazzoni, Deutsche Bank.

Just two questions -- one is what was gross interest expense for the first quarter on a consolidated basis? And the second question is just so that I'm clear -- what is the length of time, the average length of time for the postpaid clients? The length of the contract?

Ruth, can you repeat your first question, please?

Gross interest expense.

Gross interest expense, okay. Give us two minutes, okay?

Okay.

Ruth, the average life of a postpaid customer is over five years currently, and the gross interest expense is approximately $28 million per quarter. Okay?

The contract that's signed for postpaid customers -- do they sign an annual contract or a two-year contract?

Basically, what you have is customers normally sign a one-year contract, and what is also true is that on the customer side, the customer paying the bill and everything, they have the right to terminate that contract and obviously paying certain charges, okay?

Okay.

It's nothing different than what you see in other countries, especially in the U.S.

[Roger Oye, Lenus Bank].

My question is regarding the government, the contract you signed. It seems they were very cautious to talk about it. Is there any risk of the tariffs going down instead of going up? Do you think that because of counter-inflation, inflation control, that [Kishner] might actually ask you to reduce tariffs instead of increase them? And a second question is regarding penetration to wireless segment. It's already around 58%. Do you think this can be achieved up to a certain level? What level do you think it's going to be that the market is going to be mature? Thank you.

Regarding the reduction in tariff, we don't see that. We are not expecting that the government will ask us to reduce our tariff from the levels that they are today. And I never heard that except for commercial reasons where you should have to compete. But the government is not requesting any tariff reduction.

Regarding the second question, while we are rejecting in our projections probably will depend upon the economic situation of the country is that the penetration in two years will reach levels around 75%.

And just a follow-up on this -- do you think competition will -- we assume will be based on handset subsidy or are you going to change in the future to three minutes or what's the status right now and what do you see, going forward?

Well, what we see is that competition is focusing in the subsidy. What we are seeing is that there are some plans that include some minutes free, but expect that in the future the subsidy will diminish.

At this time there are no further questions. I would like to hand it back to you, Mr. Felices, for any closing remarks.

Okay, what I would like is to thank you for participating in this conference call, and invite you to call our Investor Relations department for any additional questions or doubts. Thank you very much and good morning or good day to everybody.

Thank you, and this does conclude today's conference. We would like to thank everyone for your participation and have a wonderful day.