Nexa Resources S.A. (NEXA) Q1 2019 Earnings Report, Transcript and Summary

Good morning, and welcome to Nexa Resources conference call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Presenters in this call are Mr. Tito Martins, CEO of Nexa Resources; and Mr. Rodrigo Menck, CFO of Nexa Resources. Also joining the call, Nexa's Executive Team and Mr. Roberta Varella, Head of Investor Relations. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Tito Martins, CEO of Nexa Resources. Please go ahead.

Thank you. Good morning, everyone. And thank you in participating in another Nexa's earnings conference call. Today we will be talking about our results for the first quarter of 2019. Please let's move to Slide 3 where we will begin our presentation. Before we present our first quarter results and despite many of you are already familiar with Nexa, I would like to take the opportunity to reinforce who we are and our strategy for value creation. Just before our IPO in 2017 we have been addressing the market what we believe are very consistent speech. Our strategy was set looking for basically two targets. First, Nexa become self-sufficient using concentrate. And second, we want to produce more copper concentrate and have it as our second product. Of course, we understand our advantage in being for a long time in Brazil and Peru. So our priority is to grow our mining production in both countries through brownfield and greenfield projects. We have a very good pipeline of greenfield projects, and as you know, we are moving on with its development. Smelting remains important in our portfolio mainly because we enjoy numerous benefits for being the sole producer of zinc metal in LatAm, below Mexico. We are committed to be recognized as one of the safest, low cost and sustainable mining company in the world, contributing to the development of the communities and regions where we operate. Important to mention, in March 2019 all of our tailing dams in Brazil received declarations of stability. In other words, all of them were formally certified as safe and stable. Please move to the next slide. Here I would comment it on our main projects. Aripuanã, located in Brazil, is our most advanced greenfield project and is already in construction. With an estimate CapEx of $392 million Aripuanã is an underground polymetallic project containing zinc, copper and led. The life of for mine is 13 years and has the potential to be extended to at least 6 more years. Deepening project at Vazante reached 80% of physical completion. Project is evolving according to our plan, and we expect extend the mine life from 2022 to 2027. Also in Vazante the dry-stacking project has also advanced and is going to be in operation during the second quarter. We are glad to inform that the operational license for the new system was granted last week. The Cajamarquilla project is advancing. The conversion of the process to Jarosite is expected to be completed in the second half of the year. The conversion will improve the recovery and the economics of this smelter. Let's go to the next slide, please. I will comment a little bit about the zinc market. In the first quarter of 2019 average zinc price was $2,702 per ton, down 21% year-over-year, but up 2% when compared to the previous quarter. Low stock levels, easing trading war between China and U.S. and ongoing deficit in the refined market reversed the zinc price downward trend. Uncertainties around the smelters in China continue to persist and as a consequence metal supply has decreased while zinc concentrates supply increased along the quarter. As a result of it, treatment charges have moved up, improving smelters' margins as we can observe in the upper-right graph of this slide. Nexa also benefits from higher TCs. As you know, 40% of our concentrate needs we buy from the market. It's worth mentioning however we have long-term contracts based on the average benchmark price of the last three years which helps us to mitigate cost volatility. Meaning the increase TCs now we have a positive impact in our business, but will not be fully realized in 2019. For the year, we expect the refined zinc market to remain at a deficit, which should benefit the price. Actually along the last few months price have been very resilient in between $2,500 per ton and $3,000 per ton. Now please move to the next slide. Copper and lead price had a similar behavior. In the first quarter copper price averaged $6,215 per ton, down 11% from first quarter of 2018 and 1% compared to the previous quarter. And softer economic policies from Fed and other central banks, supply issues in Australia, Chile and Peru contributed to the price increase. Going forward, we still expect the positive scenario for copper price motivated basically by the gap in mine supply. Now I would like to pass to Rodrigo Menck, our CFO, who will comment on our quarter results. Menck, please?

Thank you, Tito. And good morning, everyone. On Page 7 we have our first quarter consolidated results. Beginning with the first chart on the left regarding mine production. We've had higher treated ore volumes, supporting a 3% increase of our zinc production year-over-year, partially offsetting lower zinc rate. Our Cerro Lindo mine had a better performance after all mine development initiatives carried out since last year. On copper, we ran into copper contaminants in the mining process and the copper production was also affected, decreasing 15% when compared to the first quarter of 2018. On the smelting side. In the first quarter of 2019 sales were relatively stable as you can see on this second graph from the left. And we continue to see a stable operational performance in our three smelters. In Peru, Nexa Cajamarquilla is increasing production year-over-year and has built up inventory in anticipation of our planned shutdown in the second half of the year when we will convert the plant process back to Jarosite. In Brazil, Tres Marias' production was affected by technical issues in the purification process in January, which was partially offset by better performance of the roaster in Juiz de Fora. On the next graph, mainly as a result of lower LME prices, Nexa's revenues were down 16% compared to one year ago. Adjusted EBITDA then totaled $108 million in the quarter, driven by lower revenues and higher mining costs, which were partially offset by the Brazilian real depreciation against the dollar. Looking forward, we're confident that our mining plan is on track and that we will deliver both our annual production and sales guidances. Let's please move to Slide 8. Regarding our debt profile and cash position, we continue to report a healthy balance sheet with extended debt profile and low leverage. As of March 31, the average maturity of our total debt was 5.9 years with an average cost of 4.8% per annum in U.S. dollar terms. On the pie charts on the lower left you can see the debt breakdown both in terms of category and currency. This profile remains unchanged from previous periods. On the right side we show net debt increasing from December 2018, mainly due to the reduction in our cash position. This was caused mainly by working capital changes as well as dividend payments, which I will explain in more details when describing the cash flow. As a result, at the bottom you can see our financial leverage measured by net debt to last 12 months adjusted EBITDA ratio, which stood at 1.07 times, an increase compared to the 0.5 times reported last quarter. Let's please move now to Slide 9. Here on this page you can see the breakdown of our $65 million CapEx, both by category and segment. We confirm our guidance of $420 million for the year. With regard to OpEx, which amount to $20 million, we continue our efforts to increase reserves and resources, aiming an average life of mine of 12 years for our current operations and also confirm guidance of $128 million for the year. Next, please go to the following, Slide 10. On this slide we demonstrate the free cash flow generation of Nexa. In the first quarter our EBITDA was $108 million. Negative working capital change was $112 million. Considering the usual payments we have tax, sustaining CapEx, and interest paid, free cash flow before dividends was negative in $63 million. It's worth mentioning working capital was affected by some very specific events, namely payments to suppliers and bonuses to employees related to the year of 2018 and increasing inventories of Cajamarquilla in anticipation for the maintenance stoppage to finalize the Jarosite conversion. Excluding these effects, working capital would have been around $29 million and operational cash flow would have been positive in $20 million. Finally, as a result of our commitment to our expansion projects which will contribute to additional cash generation in the future, as well as our practice of returning capital to the shareholders Nexa recorded a negative free cash flow of $169 million in the first quarter of 2019. Let's us move to Page 11. Regarding mining performance in the quarter, as already mentioned, treated ore volume increased to 5.5% year-over-year and production of contained zinc was 3% higher compared to the first quarter of 2018, mainly driven by Cerro Lindo's production up 14% year-over-year as there was an increase in both treated ore and zinc grade on the site. Guidance volumes are maintained. Net revenue for the mining segment amounted to $272 million, down 17% year-over-year primarily as a result of lower average zinc, lead and copper prices less than compensated by an increase of the zinc production volume. Financially, adjusted EBITDA for the mining segment amounted to $82.5 million in the quarter, 48% lower than the previous year, compounded both by the mentioned decrease of net revenues as well as higher production costs in Peru. These impacts were partially offset by the depreciation of the Brazilian currency, positively impacting costs in Brazil. And such, cash costs net of byproducts credits increased to $881 dollars per ton caused mainly by the increase of process volumes, as well as less by-products credits at Cerro Lindo and [indiscernible]. Moving to Slide 12. We represent our smelting segment performance. The sales volume of metallic zinc in the first quarter remains relatively stable compared to the first quarter of 2018. Our smelting business had a benefit of the flexibility of its sales strategy. With the economic slowdown in Argentina and maintenance shutdown of two main customers in Peru we're able to redirect our sales to Brazil as well as other regions. Thus, guidance for smelting is also maintained. Additionally, adjusted EBITDA for smelting amounted $26 million, down 14% on the same quarter of last year, impacted mainly by the drop in zinc metal prices year-over-year. This effect was partially offset by FX related gains in Brazil and higher treatment charges. On the other hand, the same effects of lower LME prices in the Brazilian real devaluation caused smelting cash cost to improve by 20%. Now I would like to hand over to Tito for his final remarks.

Thank you, Menck. Please, let's move to Slide 13 where we highlight some of our key initiatives for this year. We remain positive about the industry fundamentals and we are confident that once again we will achieve our guidance for the year. Under the current macro scenario, we can continue to extract gains in efficiency, productivity and costs. We do not see any issues that would prevent Nexa to advance the Aripuanã projects. Mine development and planned constructions are moving as planned. In the short term we expect to conclude Vazante's dry stacking project. And with it 70% of our mines will be operating with the dry stacking methodology. Also, after completing the second semester the Jarosite conversion in Cajamarquilla we intend to reach 97% of zinc recovery in the smelter. New technical reports of the Hilarion project and Cerro Lindo complex should be released to the market sometime in the next month. We expect to conclude FEL2 OF the Magistral and Pukaqaqa projects in the second half of the year when we should also file an update of their technical reports. Before I finish. I'm happy to announce our Board has just approved the creation of our sustainability and CSR committee showing once more Nexa's concerns and intentions in being a next-generation mining company. Thank you all for your time. And let's move to the Q&A session.

Thank you. [Operator Instructions] The first question will come from Arthur Suelotto with Bradesco. Please go ahead.

Thank you. My first question is regarding zinc TC levels. Are we continuing to see zinc TC at record high levels? But we started to see some reduction mostly due to some additional smelting capacity in China. So if there is anything you could share with us your view regarding TCs and if you expect this decline to continue in the coming months? And then my second question is regarding CapEx, reported $60 million CapEx for this quarter, but you maintain your guidance for $420 million for the year. So I just was wondering when we should expect to see an acceleration in CapEx for Nexa. Thank you.

Thank you, Arthur, for your question. Regarding TCs, what we are seeing right now is, as you said, TCs they went up significantly along the last I would say 5 to 6 months, since December. As you know, the benchmark is 245 today. But we have seen flat transactions with numbers above it, actually close almost to $260 per ton. You made a comment that we may see a decline in those TCs along the year, we haven't seen that yet. I personally I have been following some researchers and they are saying that they are believing that except more capacity will be available in China in the second half. But according to our source, we have not seen that happen yet and we don't think that would be - the speed that the market is working with for more capacity, we will actually beat the one that best should tend [ph] to the end of the year. I mean, we are not believing that we should have a surplus of metal in China or in anywhere at least until 2020. In terms of the CapEx. Yes, the CapEx question was a little bit below our expectations of first quarter, but we should be back on track on the second quarter. We are not expecting to see the level of growth in the CapEx expanding, growing only at the last quarter of the year as we saw last year. Our budget for CapEx is more balanced along with the next three quarters. Thank you.

Thank you, Tito.

The next question comes from Caio Ribeiro with Credit Suisse. Please go ahead.

Hi, good morning. Thank you for the opportunity. So my first question is on the zinc and copper grades where there was a decline across most of the operations this quarter. I just wanted to see if you could talk a little bit more about what your expectations are going forward regarding these grades. And what initiatives the company is taking to stabilize or boost zinc and copper grades? And then secondly, on the cost front, there were also a few factors here that impacted the cash cost per ton on the mining side this quarter, including the maintenance stoppages that we saw, the higher treatment charges, lower by-product revenues as well. If you could provide some more color on how you see the cash cost per ton evolving in the coming quarters that would be very helpful. Thank you.

Thank you, Caio. About the grades. What we are seeing is the following. Since last year we are seeing a drop in the grades mostly in Cerro Lindo which is the main mine we operate, right? And we in order to compensate that we are increasing the throughput in the plant. That's one of the reason why we saw our cost going up. And we have to consider as well that as we mentioned last year, by the end of the first semester of last year we decided to move with more aggressive programs in order to increase development of the Cerro Lindo mine exactly to increase the throughput and exactly to help us to balance the drop in the grades. So basically what happened there was we are performing more than 3,000 meters a month in Cerro Lindo exactly to have more ability to deal with the dropping grades. According to the report we have released, the technical reports we have released in the past, we're expecting to have the grades being at the level they are today. So this drop was already expected. Of course from time-to-time we may have some increase, mostly in the copper grade as we develop the mine along the years. In terms of cost, I'll pass to Menck, he will answer the question.

Hi, Caio. Regarding our cash cost, we don't provide guidance to the market. But in looking throughout the year you could assume that we'll be keeping this type of level because we are within this context of lower rates. It's pretty much maintaining throughout the year.

Okay, perfect. That's clear. Thank you.

The next question comes from Carlos De Alba with Morgan Stanley. Please go ahead.

Yes, hello. Thank you very much. So for me, something that is quite sort of important to understand is how does management and maybe the board and the controlling shareholders sees the liquidity of the stock. This is a constant theme of conversation with investors. And I understand that returning cash flow to shareholders is quite important but also your - the company already has a low liquidity. So how do you see, Tito, solving this situation? I mean clearly the stock price is quite low and so issuing more shares at this level I don't think is what [indiscernible] probably would like to do. On the other hand, the liquidity doesn't allow a lot of investors to participate in the stock as much as they would like. So I would like to understand how you and the Board and maybe the contract shareholders see this happening. And second, is there an expectation to change your three year contract term for TCs any time in the short-term? And finally, sorry, finally, regarding cost - cash cost, particularly on the mining side, if you then - there were - mining and smelting. There were a series of incidents during the quarter that may have affected - that affected cost as you describe in your press release. Is there any estimate or at least a ballpark figure that you can give us how much these issues affected the cost or what your cash cost would have been, in other words without these non-recurrent incidents?

Thank you. Thank you for the questions. The first one actually is the most difficult one among all of them. We've been discussing a lot about the liquidity issue at the board level and we also understand that [indiscernible] of course would like to see more liquidity in our shares. Everybody understands that the liquidity would help a lot for us. We've been talking to some investors. Investors say, you know, I would love to buy your share but I can't do that because of the certain level liquidity you're showing today. But on the other hand, we have the problem with price perception. I tend to be an optimist person, so I think if price go up as we think that they should go up, our share price should go up based on what we will be delivering not only in terms of production but in terms of what we - the guidance we have provide to the market, if this perception about the performance of the company increase, and I'm talking about the first quarter isolated, okay, I'm talking about the full year 2019. If everything goes as expected, the price of the share should go up. With the price of the shares going up there will be opportunities for us to think concretely about increasing liquidity. That's my view, that's the discussion we have had with the Board. The problem today is that our price is too low in our view. The price of our share is too low so as it is today even when we compare with other companies that are - have a similar portfolio production, or similar size of ours. I mean, our multiples based on other companies is, they are much lower, so we need to see something recovering this position or a better perception of the market in order to make an additional movement in the future about liquidity. In terms of the contracts. We discussed this in the past. We have - most of our concentrate contracts are what we call BRICS three year contract with a - every year one third of the contract is renewed based on the reference TC. Of course when TCs goes up, this affects negatively because not all of the contracts will be - the full contract will not be renewed, only one third. But on the other hand, when the TCs come down we are also protected. So it's a way actually to avoid volatility. I don't think that it would be good for us to have all the contracts in 1 - covering just one year. We would be under a lot of - we already have the volatility of the price of the zinc and copper and we will also have, would have the volatility of the TCs. If you look back, in the last 20 to 30 years, this is not necessarily reflected, the variation of the price of the zinc. It's a little bit different when you compare that with copper. TCs, they had a kind of independent behavior vis-à-vis zinc price. Cash cost, I'm going to pass to Menck.

On cash cost, as we don't provide guidance to the market on that I won't be able to provide you more color on the specific item. But considering that the incidents were cured, I expect you would see this difference in the second quarter on.

Yes, the incidents, mostly they affected volumes of - that were produced. I mean if we had - not had the setbacks in Vazante and in Atacocha, production would be higher than the one we showed you in the first quarter. I mean, we - our products increase in zinc in 3% could be higher if we had not had those problems. Naturally the cost will be lower, right?

Right. Okay. Thank you very much.

Thank you.

The next question comes from Orest Wowkodaw with Scotiabank. Please go ahead.

Hi, good morning. I wanted to get a little bit more clarity on zinc TCs and how to think about that with respect to Nexa. And just given we've had such a huge move in the benchmark from one year to another, when we look at your cash cost per pound in mining I assume that is including, even though that's inter-company - you're sending your concentrate to your own smelters, I assume you're reporting your zinc cash cost at kind of market terms. And I'm just curious whether that's already been reflected in the Q1 mining cash cost or whether that we'll start to see that in Q2 with then the flipside being an increase of profitability at the smelters with respect to their treatment charges.

Hi, Orest. This is Rodrigo. TC's evolution and its application within our base is different in the units we do have. For Vazante we use the benchmark once it is defined for the whole quarter, okay? Cajamarquilla as well. But on the 40% that we buy from third-parties. The benchmark of 2019 will make part of the average, the three year average that Tito was mentioning in the answer before, right. This $445 per ton will substitute the 2016 reference, which was $211. So this increase is in the average only $11 approximately.

Correct yourself. You said, $440, $245.

$245, substituted $211. So the average increased by $11 per ton, right? This is applied to all the base of contracts that we have with third-parties, which will not be effective immediately. Because each contract has its term, okay? So it will be reflected throughout the year, is that clear?

Right, on your - well, no, it's not. From my perspective - for example, if you reported in Q1 you reported $881 a ton for mining cash cost or $0.40 a pound. Does that reflect the new TC or the old TC?

Yes, in this case, yes.

Yes, but was 60% - 100% of the mining, you're right, yes, yes, you're right, you're right, 100% of the mine. And in the case of the smelting would be 60% of the consumption of the smelting.

Okay. So sorry, if I'm hearing you correct, the Q1 costs assumed on the mining the new TC already in that $0.40 a pound?

Yes.

Okay. And then at the smelter level with respect to TC, I understand about the three year rolling contracts. But my understanding also was that there was a discount that was applied to the benchmark because of how low TCs were in the spot market. And I'm just curious if that discount also is fixed for like a 3-year rolling average, or does that move around?

No, no, no. We have the three year average. There's no discount on that. 90% of this, approximately 90% of what we buy from third-parties is under those contracts. We have only 10% of our purchases under the spot basis. So maybe this discount you're referring to was related to this specific base. But, no, we don't really have the discount.

Okay. So 90% of the third-party concentrate purchases are effectively priced on the 3-year rolling benchmark?

Yes, which we have its effect throughout the year.

Yeah, okay. Thank you very much.

Thank you.

[Operator Instructions] The next question comes from Petr Grishchenko with Barclays. Please go ahead.

Good morning. And thanks a lot for taking my question. So I guess first I wanted to hear maybe any updates on your capital allocation strategy. I mean, given Zinc prices are likely to remain lower for the entire first half of this year. And you maybe not getting much relief on the treatment charges, like how are you thinking about your leverage and liquidity targets at around this year? Are you thinking of any steps to protect your liquidity? Maybe cutting exploration CapEx or dividends comes to mind. I'm just curious how you're thinking of those two variables?

Hi, Petr. Concerning liquidity and leverage, we are according to plans considering our long-term CapEx program, right. So we are now with 1.1 time's net debt-to-EBITDA, which we believe is the appropriate number for this. As you might recall, we do have a financial policy which can be accessed in our sites. And there you can see that we have a ceiling of two time's net debt-to-EBITDA. So we will always be looking for this type of limits throughout the investment cycle that we have in our many projects.

Yeah, and the first question was about how we see the capital allocation vis-à-vis price situation, price conditions. First, prices are actually around where we were expecting before. In our view, they should be a little bit higher than they are today given the stocks, not only the stocks of matter available in the board, but also the stocks of concentrate. People keep saying that the stocks in concentrate are high already in China, and the TC's went up because smelting in capacity in China was not there as expected. But we are still seeing the lack of concentrate. I mean, if we have an increase in demand above 1%, demand for zinc above 1% in 2019, there will be a deficit of metal and also deficit of concentrate based on what we have seen so far. So we should not change any of our plans along this year and surely next year.

Got it. And maybe another question I had is, I'm just curious, you have any conversations with the credit rating agencies? And the reason I'm asking, looking in your [indiscernible] Nexa bond, if I'm not mistaken is only high yield paper across the complex. I mean [indiscernible] is much higher levered but rated one notch above. Are you interested in getting IG at all and sort of any color would be helpful.

Well, Petr, we do have constant conversation with all rating agencies. We are eagerly pursuing our investment grade rating. That's how we see it. Especially the way we handle our finances. And each one of them has their specific point and methodology that hinders us from that. But we have a clear communication with them and we understand that the analysis are detailed described in their reports. But our intention is to have our investment grade in all three rating agencies as soon as possible.

Okay. That's helpful…

Yes, I would add to that one thing. Clearly, we are not fairly treated by them. When you look at our operations being in Peru and Brazil, most of all dependence on cash generation is done in Peru, Peru is investment grade and we should be treated as an investment grade company. Thank you.

[Operator Instructions] The next question is from Oscar Cabrera with CIBC. Please go ahead.

Thank you. Good morning, everyone. I was wondering if we can get back to the question on the breakdown of the mill in Vazante and the tertiary crusher in Atacocha. Are these problems being solved? And if not, when do you expect these operations to be back to normal throughput levels?

Hello, Oscar. Good to talk to you. I'll tell you what, the two problems we had was actually the placement of the mill in Vazante had been planned already. Unfortunately the mill stopped before we actually started to make the substitution. It was done in 15-days, sorted out. Everybody is back on the regular basis. The case of Atacocha was with one of the crushers, took a little bit more time, around 30 days to fix it. But it's also fixed already, so should not be a problem anymore. So production was, at the end of March was back in the regular level, yes.

Okay, great. No, that's great color. Tito, thank you. So cost should be coming down. Now just wanted to clarify, in the answer to Orest you said that the, on the mining side your treatment charges are effectively just the benchmark. But don't those have BRICS attached to them as well? Maybe they're not three year rolling average but is there a component to like delayed impact on the current year benchmark?

Hi, Oscar. Its Rodrigo here. No, on the mining side you see they're applied benchmark ever since the beginning of the year. So that's it.

There is no BRICS?

There's no, yes, average, and there is no timely, let's say, implementation of that ever since January.

Okay, great. Now that's very helpful. And then lastly if I may, you noted in your opening remarks that you want to be a sole integrated zinc producer in South America. I missed when you said your updated technical report for Hilarion was going to be ready. I was just wondering, from that perspective when do you think you can achieve the goal that you've set out to be sole integrated zinc producer? And if that's going to affect the way that you're viewing Magistral in your plans.

Oscar, we are planning to have Hilarion technical report sometime along the year. I would say it's going to be probably at the end of the first semester, okay. And we are also planning to renew the Cerro Lindo. Cerro Lindo should be ready by June or July. And on second half when we finish the sell-through for Magistral and Pukaqaqa, we would release as well a technical report. We want to update the market about all the resources and reserves we have available.

I mean, is there a timeframe when you think you can achieve your goal of full integration on the zinc side?

No, no, no. Our plan is based on the prices we have today. In terms of zinc equivalence, because some of those prices are in copper price. We should be reaching there in the next 5 to 7 years, yes, but in zinc equivalent, okay? If we, for example, I keep saying that we're going to have a good problem by 2020 because we should reach 2020 with Pukaqaqa and Magistral ready for construction. And of course we do not plan to have both constructions happening at the same time, right? Following those two projects, we have Hilarion. So Hilarion should be ready for construction by 2022. If we - when we will be actually finishing one of those two copper projects, when we finish one of those two copper projects, we have to choose either one, new copper project or the Hilarion one. Production at Hilarion actually will give us a lot of room, and depending on the size of Hilarion actually we can be almost there, almost there, I mean almost 100% integrated. So Hilarion plus - Hilarion as well as Aripuanã will give us almost some debottlenecking in our current production, could give us a full integration.

Great. Thanks very much.

Thank you very much.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to return the conference to Tito Martins, for any closing remarks.

Thank you. First of all, I would like to thank all of you for being with us here today. Secondly, I also want to thank you for the hit you gave in our price, share price yesterday. I think up to some point was deserved. But I want to guarantee you that we kept our guidance because we really believe that we will perform and we'll have a very good 2019. Things that happened in first quarter should not be repeating itself along the year. We will be increasing mining production, we will be increasing smelting production, so we are confident that we can achieve the guidance. The market will see it very soon. And once more, thank you very much and have a good day. Bye-bye.

And thank you, sir. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.