Codere Online Luxembourg, S.A. (CDRO) Q2 2022 Earnings Report, Transcript and Summary

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Codere Online Second Quarter 2022 Earnings Presentation. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Guillermo Lancha, Head of Investor Relations. Please go ahead.

Thanks, operator, and welcome everyone to Codere Online’s earnings call for the second quarter of 2022. Today you will hear from CEO, Moshe Edree and CFO, Oscar Iglesias. Before turning the call over to Oscar, I’d like to remind everyone that during this call we will be referring to a presentation we uploaded to our website earlier today, which includes non-GAAP financial metrics such as Net Gaming Revenue or Adjusted EBITDA, for which you can find reconciliations in the appendix of the presentation. Finally, please note that a replay and transcript of this call will be available on our website at codereonline.com where you can also sign up to our Investor Email alerts. With this, over to you Oscar.

Great, thanks, Guillermo and good morning or good afternoon to everyone joining the call. Before moving into details regarding the quarter, let me again remind you that Codere Online is Luxembourg based and as a European company our accounting information is prepared under IFRS accounting standards and our functional currency is the euro. As such, throughout this presentation, all monetary figures will be in euro unless are expressed otherwise. Please also note that the historical consolidated income statements and accountable net gaming revenue and adjusted EBITDA figures have been moved to the back of the presentation. And we will be focusing on the quarter, year-to-date, and LTM figures in this and subsequent quarterly presentations, in each case versus applicable prior year periods. With that, I will go ahead and pass the call on to Moshe.

Thanks Oscar and thanks everybody for joining the call. For those of you who are new to the company, I would like to provide a quick overview of Codere Online. I joined the company in late 2019 when it was a wholly owned subsidiary of Codere Group, which is a Madrid based gaming operator over 30 years of retail gaming operation expertise in Spain, Italy, and Latin America. In November last year, we completed a merger with another listed SPAC, which resulted in Codere Online being a U.S. listed business and are raising over $100 million to finance our substantial opportunity we ever had to grow this business, in particular, throughout Latin America. Moving to the highlights of the second quarter of 2022, we are pleased to have delivered strong operational result -- operating results in this period with our net gaming revenues up to 41% to nearly €29 million and 15% versus Q1 2022. This growth was driven by significant increase in average monthly active customers to nearly 105,000 and a 10,000 increase in our monthly spend per active to €93. Mexico again drove most of this growth in active customer with 45% more in the period. In terms of our customer acquisition, we continue to see encouraging trend as our first time deposit increased almost in 47% to 85,000 at an average cost of around €150. Having now delivered two consecutive quarters of a strong performance, we believe that we are in a good position to meet our full year guidance of €110 million to €120 million euros of net gaming revenue. We expect that this growth will be continued to accelerate as it did in the second quarter, over the second half of the year with especially going into the fourth quarter where the World Cup should provide an additional uplift to our business. In terms of recent developments, in early August we applied for an online license in Province of Cordoba in Argentina. This is the second most populated region in the country, and we believe that if we are granted the license, it could be a very good market for us. We expect that the license be granted before year end, operations to start early next year. Finally, we took significant step forward with our sponsorship with River Plate becoming the main sponsor. Following our new agreement we have rebranded the shirt with the Codere logo now being placed in the front, which should give us an increased ability to improve our awareness of our brand in the country across Latin America.

With that, I will turn it again to Oscar.

With that, I will turn it again to Oscar.

Thanks Moshe. Turning to the financial results for the second quarter, and as Moshe mentioned, consolidated net gaming revenue grew 41% to €29 million, driven by an impressive 85% growth in Mexico to nearly €12 million and an equally impressive 12% growth in Spain to over €14 million, exceeding the levels we had prior to the regulatory restrictions that came into effect starting in May of last year. These restrictions impacted our advertising, sponsorship and promotional activities. So we are encouraged to see the positive trend we mentioned last quarter for our Spanish business continue in this most recent quarter and beyond.

As we discussed in last quarter's earnings call, the uptick in negative EBITDA versus the prior year quarter was primarily due to the higher levels of marketing and other operational investments to drive the accelerated net gaming revenue growth we are delivering and expect to continue delivering into year-end. At the country level the negative EBITDA generation in Latin America was partially offset by Spain, which generated €3.6 million of positive EBITDA in the second quarter, the highest level since the second quarter of 2020, despite the regulatory hurdles in place since last year. We have spoken with a number of you that are on this call and understand that you and the market in general are interested in having further information regarding our pathway to profitability in Latin America and overall as a company. We are expecting to be in a position to share additional information with you in our third quarter earnings call scheduled for mid-November once we have finalized our operating plan and budget for 2023 and updated our expectations for 2024. In the meantime, please note that this is a business where we make a significant upfront investment to acquire customers, none of which may be capitalized, and which on average generates net gaming revenue of between three and five times that upfront investment over a five-year period. In terms of the payback periods on that investment, this varies market-by-market that is it depends on how developed the market is and our strategic and financial objectives for that market. But generally we seek a contribution margin based payback of between one and two years. On a sequential basis however, our EBITDA decline from negative €13 million in the first quarter to just below €10 million in the second, partially due to timing issues in regards to marketing investments we made in Mexico in the second quarter. As a reminder, a significant portion of our overall marketing spend is discretional, that is, can be increased or decreased at any time based on what we are seeing across our markets and our objectives as a company in terms of balancing higher growth with acceptable levels of cash burn, minimum levels of liquidity, especially considering the current challenging state of the capital markets. Turning to the Spanish operating and financial metrics, we see net gaming revenue in the second quarter increase 12% versus the prior year quarter, despite having 4% fewer active customers as a result of the promotional restrictions in place. On an LTM basis, we are 2% below in revenue levels with 6% fewer average monthly actives in the period, reflecting the higher spend per active on the back of improved results, especially in our online casino business. In Mexico meanwhile, net gaming revenue reached €12 million in a quarter, an increase of 85% year-on-year and almost 20% sequentially. This strong performance is supported by both a higher number of active customers and a higher spend per active. In regards to our omnichannel activity, our online business benefits from Codere Group's leading retail presence in the country and sizable customer database, which allows us another channel to acquire customers, offer them a differentiated omnichannel customer experience, and improve our overall return on investment in the market. Moving to Colombia, we continue to see strong growth in the market with a 57% increase in net gaming revenue and 37% in number of actives. This continues to be a small business for us, but one that we expect to continue growing with an improved return on marketing investment. Turning to the balance sheet, as of June 30, we had approximately €80 million in available cash on the balance sheet having utilized approximately €11 million in the first half of 2022. In terms of our net working capital position, we ended the second quarter at negative €26 million, a quarter in which we did some catching up in regards to what is payable with third party providers. So we continue to be a few million extended in terms of payables to Codere Group, which we expect will be addressed here in the third quarter. On page 16, you have further details regarding the cash flow statement and the variation in net working capital in the first half of 2022. Please note that we have changed the way that foreign exchange impacts on cash balances are reflected. This is now included in the reconciliation of cash position located at the bottom of our cash flow statement, as opposed to reflected as cash flow from financing. That's all from my end. I will now hand it over to Moshe for closing remarks.

Thanks Oscar. I just want to stress again how pleased we are with second quarter results, which is in many ways has been ahead of our expectation and which give us a confidence that we are on track to deliver our guidance to investors for the year. We continue to encourage by potential of the business, and we're working hard to execute our plan and beginning to explore other exciting opportunities that may present themselves, like the one we're currently pursuing in the Province of Cordoba. With a strong first half of the year now behind us, we hope investors will share our view that the ambitious growth rates we set out to reach of this business are achievable and that Codere Online provide investors with a unique opportunity to invest in early innings of one of the fastest growing region for online gaming. We look forward to speak with you again in November when we're publishing our third quarter results. With that said, we'll turn it back to the operator to open up the call for Q&A. Thank you everybody.

[Operator Instructions] Our first question will come from the line of Jeff Stantial with Stifel. Please go ahead.

Hey, good morning, Moshe and Oscar. Thanks for taking our questions. I wanted to start off on customer acquisition trends in the quarter if possible. You discussed CPAs came in around €150 per customer acquired, looks like that's a nice sequential and year-on-year decline. I was hoping you might just unpack that a bit more as we had contemplated more of a €200 or so run rate moving forward? And then as a follow up to that, aggregate marketing spend was down sequentially, both in nominal terms, and as a percentage of revenues. Should we expect Q1 to be the peak in terms of marketing investments and EBITDA losses or is some of this just sort of natural ebbs and flows as you execute on your marketing plan? Thanks.

Yes. Moshe, do you want me to take that one?

Yes, take it and I will jump in if there is anything to add.

Yes, Jeff I think you picked up on something that clearly jumps off the page in terms of trend from Q1 to Q2 in terms of the blended Group CPA and some of the marketing spend. Some of this is I would say largely that that's driven by some of the timing issues that I alluded to in my prepared remarks specifically in Mexico where toward the, let's say the back half of the second quarter, we took our foot a little bit off the pedal in terms of some of the line marketing that doesn't necessarily have any immediate impact in terms of the top line revenue that we deliver. But, but it did, let's say a distortion a little bit that blended CPA that you're seeing in terms of the acquisitions that we delivered in the quarter on a blended basis, but that's driven primarily from, by timing issues. So I think that some of that investment that we didn't do in the second quarter, you'll see when we come back to the market in the third quarter what will have been made. And, and as you say, the €150 is I think our expectations this year in terms of a blended across all our geographies. Average cost of acquisition for this year was probably closer to the €200 per acquisition as opposed to the €150 that you saw in the second quarter. So I think it's largely timing differences. Moshe, anything to add on that?

No, the way that we are calculating the CPA obviously depends on a lot of changes that it's between the proportion that we spend above the line and below the line and that's why there's some changes that we see some kind of moving part in the cost of CPA. But I think that the main factor is that we are keeping the ratio between the lifetime value and the CPA, meaning that if the CPA will go higher, we'll make sure that the lifetime, the value of the group of the players will go higher. And then what we can do, we can just monetize in between spend that we have between any channels below the line, which is mainly digital cost per click in different platforms, Google and Facebook and so on or TV advertising. So we are monitoring that upon the results.

Great, that's helpful. And maybe just to kind of reiterate the second piece of that question, the aggregate marketing spend was off 10% or declined 10% or so quarter-on-quarter. The percentage of revenues was down considerably about 20%, went from 90% to 70% of net revenues. Is that mostly timing with Mexico or is some of that kind of sustainable declines in your reinvestment rate as you continue to mature along in your marketing plan?

Yes, I would say a significant part of that is timing difference as Moshe says, that there's always adjustments that are made within any given market above the -- between above the line and below line, but also across markets, depending on what we're seeing at any given time and the -- how the players that we're acquiring are performing in those early months after acquisitions. So there's a mix of both, but I would say largely it's timing differences. In the -- I guess in the front half, we did a minus €23 million in terms of, let's say an adjusted EBITDA of 13 in the first quarter, a little under 10 in the second. I think looking out to the back half of the year, I think it's, the quarterly trend will be something closer to what we did in the first quarter than necessarily what you're seeing in the second that benefited by some of that reduction in marketing spend Jeff.

Great, that's helpful, thank you, Oscar. Moving on to more of the competitive landscape, if you look at your, the two largest Latin American markets, Mexico and Colombia, just what are you seeing in terms of new competition coming in or existing competition ramping up or down investment in those two markets? And then similarly in Spain, are you starting to see some stabilization of competitive dynamics or does it feel like operators are still pulling investment there in light of some of the well discussed regulatory challenges?

So Jeff, in Spain we do see some reduction in competition and as stated that as a result of the advertising then in that small brand or a non-brand or international brand find it more and more difficult to build any market share without any opportunity to invest in marketing or in advertising, except the post-midnight between 1:00 AM to 5:00 AM, which is not anyhow, it's not like a big portion of anyone's budget. So we see that there we either maintain or even like growing our market share, but definitely we're growing our voice of shares in terms of the brand itself. In Mexico it's a bit different. We saw that in the beginning of the year, there was kind of like a trend of a small, medium operation entered to the market.

In Argentina on the other hand, we think that we have a very good opportunity to be one of the market leaders because we do have Escudero [ph], we do have the retail presence, although it's in the province, not in the city, but we're working toward to see what we can do in the province as well in terms of license. But we believe that together with Cordoba, as we mentioned in the presentation, having like the Province of Cordoba, hopefully that we'll get the license and with the City and maybe later on with the Province we'll cover like a very high percentage of the concrete in terms of the exposure. And we believe that there we will have the opportunity to be, if not the market leader, one of the first three market leaders in the country.

Great, that's really helpful. Thank you, Moshe. And then if I could just squeeze in one more on the technology front, you've been vocal that a portion of the IPO proceeds were earmarked for some upgrades to the tech stack. Could you just provide an update on where you are at in terms of some of the more discretionary improvements and what's still left to complete moving forward?

Are you referring to the platform itself?

Correct.

Right. So you obviously know in Mexico we are working mainly with Playtech as the main software provider. Although we add a lot of different processing vendors and different contents and that we initiate and we ask Playtech to integrate it into the platform. We just finished with Playtech a very big software upgrade of nine specs in last month. It was quite a complicated one, but it brought us to the level of I would say our main competitors in terms of all, I would say, the content and the cashier capabilities and the processing capabilities cashing in cashing out. So we are aligned with any other major competitors that we have in terms of the platform. In regards to the other market that we are maintaining and we are managing the platform with Codere Group which they are the platform provider for Codere Online. We see strong improvement. We keep investing in that, as we mentioned in the presentation on the roadshow we allocated budget for the software improvement. Thankfully in the past, I would say six months, we are not suffering from any downtime, any major down times and we are, again, we are in a industry standard, like in our first year industry standard in terms of the SLAs. Obviously we have a great advantage by managing our own IP in terms of amalgamating the software like in the City of Buenos Aires, like hopefully we'll have to do in the Cordoba, the Province of Cordoba, like we've been in Colombia and Panama. So all in all, we are satisfied, although we keep investing in improvements. At the same time, we started in a very low level big project that's called the Platform 2.0, which evaluate and have like overall, I would say thinking about where are the areas that we can either replace, improve, integrate, or buy any other IP in order to bring us to the next level of platform. So just to summarize it, I mean in Mexico, we're quite happy with the turnkey solution that we have from a third party provider. The rest of the countries we're in a good stage. There's always things to improve on the cashier side, on the player experience. We just launched last week the Android app in Colombia, Colombia is very challenging environment in terms of the regulators and in terms of amalgamating the software and we managed to do so, we're doing it quite well. So all in all, I think that me is the main, I would say client of the platform. I'm happy with what we achieved, but still investment in the pipeline for the next quarter.

Perfect, very helpful as always. Thank you both. I'll pass it on.

Great, thanks Jeff.

[Operator Instructions] Our next question comes from the line of Michael Kupinski with Noble Capital Markets. Please go ahead.

Hey, this is Pat McCann for rom Mike Kupinski. I had a few questions. First I just wanted to touch on the inflationary environment. Are there any higher costs associated with your expansion strategy that are causing you to make any tweaks with your strategy? Anything that's -- anything that you've really changed with how you're expanding the business associated with the inflation?

Yes, hi Pat. Okay, thanks. At a very high level there are different parts of the cost structure that obviously are more impacted by the inflationary pressures across different geographies than others. But we would typically expect it's not always the case and especially given that we're coming off several years of COVID and economic impact on some of the geographies that we operate in and somewhat weakened disposable income from certain pockets of our customers, it's not always easy to see that and to manage around and compensate by -- through pricing. Okay? So pricing is largely, it varies market-by-market, but is largely governed by the competitive landscape and where you are positioned within that competitive landscape and what your competitors are doing. So it's not always possible nor necessarily advisable that we, that's not a sector where we can necessarily just pass on that additional cost to our customers. And we have to be mindful also of that customer experience and the impact that the economic environment has on our customers to keep them playing, but playing at a level that allows them to continue to be engaged with us as a company. And so we can -- so our focus is really on consolidating more of their overall play with us as a group, as opposed to necessarily looking to drive higher revenues near-term from those players to offset different impacts that we're seeing in certain aspects of our cost structure. It's a very high level, but kind of generic answer. But I think it's a complex one, especially in the context of this market where we're, or this business where we -- or pricing is really managing around theoretical holes across both sports and the casino front.

Got it, makes sense. I have another question about Brazil. I know that things be, get delayed and everything, and maybe to some extent it's a watch and wait situation, but could you provide any commentary you might have on the situation there and what your expectations are with that being such a large market opportunity when it does come online?

Yes, Pat hi. I will start those currently and if you have anything to add, just jump in. So yes, Pat look from the last, I mean, the last call that we had again there was, that question was asked and we envision internally that the deal we had signed and that it will not be regulated in this quarter or the next quarter. So therefore we decided the moment that we will not enter to Brazil on the dotcom license. We will wait for the full regulation to happen. We are following closely. I mean, with lawyers, with advisors to see what is the landscape. Obviously, we appreciate that like any other Latin American operator to be one of the biggest and the most interesting market for us. We started in a very, I would say low level to search for potential channels that we can enter, want it to be regulated and we need to build our position slowly. We do have strategy. We do have strategy to initiate local operation, want it to be regulated. We do have the capability and the capacity in terms at least of knowledge and people that can work in Portuguese and to, I would say translate and to migrate the software, the Codere software to work in that region. Obviously when time comes and it will be regulated, then there will be the question of financing because it's a huge market. We assume that the big brands that are already operating such as Bet365 and 888, they will just increase their, they will increase the marketing spend, want it to be regulated so that we need to be prepared to see exactly how and in which position we are entering into that market and which part of Brazil. Brazil is a huge country and maybe start with some areas and not with all the whole overall continent. So again, we have it on the, I would say the blueprints. It's still in the stage of drawing and preparing things. We didn't do anything to start any operation on a dotcom level.

Great, thank you so much. That's all I have. Congrats on a great quarter.

Thank you.

Thanks Pat.

I appreciate it.

Your next question will come from the line of Mike Hickey with The Benchmark Company. Please go ahead.

Hey, Moshe, Oscar, good morning guys, great quarter. Thanks for taking my questions. I guess as a follow up to the question on inflation, I'm not sure I heard you exactly, but on your consumer, obviously you serve a lot of different geographies, but on your consumer, as you see them today, as you serve them today, are you seeing any impact on that consumer given economic inflation sentiment? Are you seeing any direct impact on the behavior?

Moshe, do you want to tackle that in terms of what we're seeing from an operating standpoint, in terms of generically across our markets, maybe player spends or what we're seeing in the unit -- players?

Yes, well, at the moment we don't see any real impact of the inflation or the macro economy trend in terms of the spend. We don't see that spend of customer is going down. On the other hand since during 2020 and 2021, there was inflation already on the advertising channels cost. So we don't see any real increase in cost in 2022 in the first six months of 2022, meaning that the advertising and the different media vendors that we are working with up until now didn’t increase prices thankfully. If any, I start seeing some mitigation in the cost of the sponsorship and hopefully we’ll soon have some other deal of sponsorship to announce, that we see that since some of the competitors are finding it’s hard to struggle and to sponsor some of those media channels, not necessarily by the way from the gaming, because the media channels that we're working with having other sponsor from other areas, and they are struggling to invest money and to spend money on advertising. So there's some mitigation in that cost. So we see even prices that either stable or even in some cases going down a bit. But in terms of the clear spend at the moment, we don't see any changes.

Thank you, Moshe. You mentioned profitability, obviously that's a narrative all operators are working to achieve now given the environment if they're not already there. And I realize you're probably not in the position, you said after 3Q you'll probably give us more visibility. But can you sort of talk about puts and takes on how you sort of think about rewiring your business to potentially accelerate profitability given capital restraints and everything else challenging the market that you're in? And I guess maybe as a lead into that, when you look at staying in particular, obviously that's a combination of both growth and profit for you, do you expect a continuation of that market, which I think would be pretty critical to achieving profitability in 2023, 2024, and then anything else you want to add that would be great?

Yes, maybe I'll take, Moshe if it's okay I'll take the first one and then if you want to speak to Spain. Mike, I think that the key here is, as you say, that we need to get through our, we now have, two full quarters, plus a couple of months under our belt post business combination. We need to work through, which is already a process is underway; our preliminary numbers for our 2023 budget and our estimates are reforecast for 2024. And see what that tells us in terms of that tradeoff between growth and cash burn, and see if from there as a company we feel that we need to make any adjustments, especially in the context of some of the new opportunities that are presenting themselves, that have already, that we've already discussed with the market, others that we're working on, and others that will present themselves will also govern what we do across the individual core markets. And how that may or may not affect, let's say that core market plan that we brought to the market last year, and that we've been speaking to, and that continues to be reflected in the revenue walk that we have at the, in the back part of our presentation. So I think today we have no indication or no view that the plan has changed at all versus what we set out to do. What we are trying to communicate after this second quarter to the market is that we've executed along that plan. And that we're going to, obviously in the context of we're mindful of the market conditions, where the capital markets are, how the shares are trading. But we continue to see the market opportunity across our core markets and some other things that we're taking a look at as great opportunities and where there's lots of room to grow. And I think that our focus is going to continue to be the same, even if around the edges, we start tweaking some of the priorities across existing and new markets. Moshe, do you want to touch on the…?

Yes, sorry, Oscar. Excuse me?

Do you want to speak to just Spain and how you're seeing Spain in terms of the capacity for the, for us to continue building off the positive results that we've seen in the last couple of quarters in the back of regulation?

Yes. So, as I mentioned in the previous questions in Spain although it's extremely challenging to acquire more customer because of the advertising ban and very few advertising channels, we are working now towards I would say creative regulated channel that will be able, that will allow us to increase exposure. At the same time, we are enhancing our omnichannel and cross channel activity, and I would say operational activity on the ground in order to increase the acquisition toward the retail side. I think that in Spain will happen two things. I think that we’ll see the trend of reductions of competitor toward next year as well. We know already that the mid small size operators are struggling to operate without any new I would say new customers database and therefore they decrease any other digital spend on that end, in that end and the big sea side and the affiliate side, on the SEO side, the Search Engine Optimization. And the same time we see that our, again our voice of share of the brand bit slowly, but surely toward the, I would say, the double-digit percentage of the market share, so that's a good trend. So we believe that the positive EBITDA will remain the same in the next quarter as well.

Nice, good to hear. Last question, definitely I think more longer term focused and Oscar probably not helping your profitability, but originally you guys sort of targeted the U.S. market sort of long-term, sort of into the baseball game maybe, but just curious, obviously there's a lot happening in California and California has about 16 million Hispanics and Latinos. And so it looks like that could be a really strong market extension of your brand to sort of enter the U.S. So obviously we don't know at this point, if they're going to legalize or not. But if they do, if they are successful in legalizing sports betting in California and given the demographic, that is certainly I would think a compelling entry spot for you given your player and brand base. Is there an opportunity for you to enter the U.S. market through California 2023, 2024? Thanks guys.

Yes. So for sure, I mean I think that the same answer that applied to Brazil. I think that, it's the same answer probably that we have for California or any other states that has like a big presence of Latin American population. We as a public company, we're looking for moving like a very big bricks into the business and trade like a very big alliances and we sync big and looking for a long-term. And definitely beyond Latin America, North America, this is the market to be we know, and we appreciated the size of the market, the capabilities and the spend per customer, based on those that are already operating in New Jersey and so on.

Thank you guys, good luck.

Thanks.

Thank you.

[Operator Instructions]

Okay. In the meantime, I will ask a couple of questions that we have on the webcast platform. The first one is on Q2 performance in Mexico, and if it was helped by any COVID related restrictions that we had on the retail side that may have played to the advantage of online?

That was more; I think that was more related to the second quarter of last year. I mean, this year we didn't have any restriction, I think if I am right Oscar, on the retail side from the COVID. I think that the retail is open more than six months. Is that right?

I think that's right. I think the retail operations largely were up and running and performing. And I think that we, in the second quarter of 2022, if that was the question that we necessarily got much of a benefit from the COVID impact on the retail business.

Okay. One final one on the webcast, can you comment on the terms of the Cordoba license, will the 10 licenses be awarded to the different applicants?

Yes, I can take that one. I mean, it's a good question. We'll see how the process evolves. We submitted our application the 5th of August. In theory we can hear something back in the early part of this month. I believe it's in the public domain, but we understand that one of the 10 applicants didn't have their second envelope opened, which we understand that they wouldn't have met the technical criteria for the applications. But I think we have no reason to believe that we, as one of nine or 10 are requesting up to 10 licenses wouldn't be granted a license, but we have to continue in the process, see how it evolves. It will probably unfold over the next couple of months and we'll see where we are from there. But in our mind, we are preparing to be up and running and operating into next year and starting to think about how we include this business and the priority we give it into our 2023 budget and beyond that.

Okay. So we have no more questions from the webcast. So I think we can…

Operator any other questions from the callers?

Not at this time.

Okay. Well, if there are no further questions, we will leave it here. Anyone feel free to reach out to myself or Oscar for any additional questions and we look forward to speaking with you again for our Q3 results in mid-November. Thank you.

Thank you. Thanks everyone.

Thank you everybody.

Ladies and gentlemen, this will conclude today's presentation. Thank you all for joining. You may now disconnect.