Trinity Biotech plc (TRIB) Q1 2017 Earnings Report, Transcript and Summary

Good day, and welcome to the Trinity Biotech First Quarter Fiscal Year 2017 Financial Results 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]. Please note this event is being recorded. I would now like to turn the conference over to Joe Diaz of Lytham Partners. Please go ahead.

Thank you, Nicole. And thanks to all of you for joining us today to review the financial results of Trinity Biotech for the first quarter of calendar year 2017, which ended on March 31, 2017. With us on the call today representing the Company are Ronan O'Caoimh, Chief Executive Officer and Kevin Tansley, Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for question-and-answer session. Before we begin with today's prepared remarks, we submit for the record the following statement. Statements made by the management team of Trinity Biotech during the course of this conference call that are not historical facts are considered to be forward-looking statements subject to risks and uncertainties. The Private Securities Litigation Reform Act of 1995 provides the Safe Harbor for such forward-looking statements. The words believe, expect, anticipate, estimate, will and other similar statements of expectation identify those forward-looking statements. Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, the results of research and development efforts, the effect of regulation by the United States Food and Drug Administration and other agencies, the impact of competitive products, product development, commercialization and technological difficulties and other risks detailed in the Company's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements reflect management's analysis only as of today. The Company undertakes no obligation to publicly release the results of any revision to these forward-looking statements. With that said, let me turn the call over to Kevin Tansley, Chief Financial Officer, for a review of the results. After Kevin's remarks, we will hear from Ronan O'Caoimh with a wrap up on his perspectives on the quarter. Kevin?

Thanks very much, Joe. Today, I will take you all through the results for quarter one 2017. Beginning with our revenues, total revenues for the quarter were $23.5 million, which is adversely identical to quarter one of 2016’s revenues. As you can see from our press release, point-of-care revenues increased by 23% whereas clinical laboratory revenue decreased by 4%. Ronan will provide more details on revenues for the quarter later in the call. So I’ll now move on to discuss the other aspects of the income statement. Our gross margin for this quarter was 42%. While this is a reduction on the 43.1% in quarter one last year, it is higher than the margin we reported in quarter four of 2016 of 40%. Reduction in gross margin compares to equivalent quarter last year is principally due to lower production levels due to the product cull in quarter four. Given these lower production volumes, this has resulted in a level of under-absorbed fixed cost namely product, labor and overheads. We are also seeing some carry over impact from the U.S. dollar strength on distributor pricing effect, which we’ve mentioned in the last couple of quarters. Moving on to our indirect costs, our R&D expenses increased from $1.1 million in quarter one 2016 to $1.3 million this quarter. The $1.3 million this quarter is consistent with the quarterly average spends throughout 2016. Meanwhile, our SG&A expenses remained at $7 million and had no change for quarter one 2016. Operating profit for the quarter was $1.3 million compared to $1.8 million in quarter one 2016. This reduction is largely attributable to the combined impact of lower gross margins and the slightly higher indirect costs, which I mentioned earlier. However, when compared to quarter four last year, we have seen a significant recovery in operating profits. In this case, we’ve seen growth from $600,000 to let's say $1.3 million this quarter, i. e more than 100% increase. Moving on to our financing costs which includes the impact of the Company's convertible notes. Our financial income for the quarter was $177,000 versus $220,000 in the comparison period, which reflects lower cash deposit post share buyback and slightly lower interest rates. Financial expenses for the quarter were $1.2 million, which is consistent with quarter one 2016, a vast majority of which relates to the cash interest element of the convertible notes. Similarly, the non-cash financial income of $1 million also relates entirely to our convertible notes with non-cash interest of $200,000 and a gain of $1.2 million recorded for the change in the fair value of the derivatives embedded in these notes. This compares to a non-cash financial expense of $2 million in quarter one 2016. You would have seen that we’ve also reviewed our presentation of our income statement slightly this quarter, so that the non-cash items have been separately disclosed at the bottom of the statement close to age comparability. Our tax charge for the quarter was just under $100,000, and this represents an effective raise of 7% after adjusting for the certain nominal items, which currently do not attract tax. And in previous quarters, we continue to receive the combined benefit of the very competitive Irish corporation tax rate and tax credits arising in a number of other jurisdictions. Net result for the quarter is a profit of $1.2 million; however, excluding non-cash items, the profit of the quarter is just over $200,000. The basic EPS is $0.056 per share, and the EPS adjusted for non-cash items is $0.01. Meanwhile fully diluted EPS is $0.05 and this comparative $0.064 in the equivalent period last year. Finally, on the income statement, earnings before interest, tax, deprecation amortization and share option expense for the quarter was $2.7 million. I’ll now move on and to talk about the significant balance sheet movements since the end of December 2016. Operating plans and equipments have increased by $800,000. This is due to additions of $1.2 million being offset by depreciation of $400,000. In the same period, our intangible assets increased by $1.7 million and in this case, this was made up of additions of $2.4 million offset by amortization of $0.7 million. Moving on inventories, you would see that these have increased very slightly by $0.1 million to $32.7 million; however, we can expect the modest increase in the next two quarters due to the line season and the growth of our Premier business. Meanwhile, trade and other receivables have increased by $100,000 to $22.7 million, cash collections from customers remained healthy and the increase is actually due to an increase in pre-payments due in this case to renewal of certain annual contracts such as insurance, IT support, et cetera which tend to occur at the beginning of the calendar year. Meanwhile, our trade and other payables, which is both current and non-current payables have decreased from $26 million to $21.8 million. Of this, $1.1 million is due to the payment of the annual HIV license fee. Just to remind you, this is the second and last of these payments we made, a further $900,000 is due to payments related to the closure of the Swedish cardiac relation, including redundancy payments of another plant closure costs. The remaining movement is due to the timing of raw material purchases and other vendor payments. Finally, I will discuss our cash flows for the quarter. Cash generated from operations for the quarter was just under $100,000 compared to cash generated and equivalents to quarter last year of $1.9 million. Here you’re seeing the impact of the timing of supplier payments that I alluded to earlier. Capital expenditure for the quarter was 3.6%, which is a significant reduction from the $5.4 million in quarter one last year and this is obviously due to the elimination of the Meritas expenditure. The other major cash movements in the quarter was share repurchases of $1.8 million and HIV two license payments of $1.1 million. The net result is that we had a decrease in cash for the quarter of approximately $7.3 million with the quarter end balance being $69.9 million. I’ll now hand over to Ronan.

Thanks Kevin. I am going to review our revenues for quarter one before opening he call to question-and-answer sessions. Given that we announced our year-end results on the 14th of last month, six weeks ago as we brief. Our revenues for quarter one were $23.5 million which is virtually identical to our revenues in the corresponding quarter last year. Point-of-care revenues were $4 million compared to $3.3 million in corresponding quarter, which is an increase of 23%. Clinical laboratory revenues were $19.5 million compared to $20.2 million in the prior quarter, which is a decrease of 3.6% or $700,000. The impact during the quarter of the cull of our MicroTrak and Bartels infectious disease products amounted to $750,000 while the negative impact of currency movements was greatly reduced this quarter, but amounted to $250,000. Absent these two factors, our clinical laboratory business demonstrated organic growth of 1.5% during the quarter. Moving back to point-of-care, we were pleased with the growth of 23% during the quarter. The increase is entirely attributable to higher HIV sales in Africa. As you know, our HIV business in Africa is funded almost entirely by NGOs. Product orders from these agencies tend to be haphazard and are unpredictable in the context of 13-week reporting cycle. However, our Uni-Gold HIV products continues to be regarded as a gold standard and continues to be utilized as the confirmatory HIV test of choice across virtually the entire continent as it has done some more in a decade. Funding continues to increase as more and more Africans are put on to antiretroviral drugs with the number now exceeding 20 million. However, we’re going to concentrate entirely on the confirmatory market we have over the past two years developed HIV screening product, which is about to be launched on the African market. Given the quality of the products and given the prices which we can manufacture this product. And given our long-held reputation as a manufacturer of the gold standard on the continent, we believe that we can take significant market share in this segment. Moving back to Clinical Laboratory, I indicated earlier that our revenues have reduced $700,000 during the quarter. This is entirely explained by the impact of the costs, which had an impact of $750,000 during the quarter. And I also indicated that the negative impact of currency movements amounted to a reduced $250,000 during the quarter, given rise to 1.5% organic growth rate if these two factors in there. Looking at infectious disease, our revenues declined 16% during the quarter when compared to the prior year revenues. 12% of the 16% reduction arises due to the cull of the MicroTrak and Bartels products with 4% reduction arising from the rest of the infectious disease business. Our line revenues in the U.S. performed well as did our business is China; however, our revenues in Brazil, Russia, Turkey and Colombia, to mention just a few, continue to suffer due to weakness of these currencies against the U.S. dollar. Our diabetes and hemoglobin variant businesses performed strongly during the quarter with revenue increasing 8%. We had strong instrument placements in all of our principal markets and places to over 68 instruments during the quarter. The exception was Brazil where we made modest placements despite strong demand. This arises due to the weakness of the Brazilian real. However, we plan to reenter this market when we increase our level of manufacturing activity in Brazil, thereby saving on import duties on sales taxes and by creating a natural hedge. In addition, we are seeking price increases against the backdrop of a high inflationary environment. At the end of last year, we also launched our new Premier Resolution instrument, which served the hemoglobin variant market for sickle cell anemia and thalassemia. This is a high value market with few competitors and we believe that with our best in class instruments that we can take significant market share. Given the combination of our Premier instrument in the diabetes market and our Premier Resolution instruments in the variance markets, we are confident of achieving double digit growth in this segment in the coming years. Moving on to autoimmune disease, this business performed well during the quarter with 7% revenue increase. We have consistently grown this business since its acquisition and believe that it will be a real growth engine for the Company and that double digit growth can be achieved this year. The reference laboratory business has been the best performing part of the business with significant growth coming from our Sjögrens test and from the growth of our business with the two U.S. mega labs. However, greatest potential of our autoimmune business is in the product revenue side, where we continue to expand our instrument offering in both the U.S. and across the world. And we believe that with this added to our best-in-class immunofluorescence analyzer product range, we will deliver double digit growth. So in summary, when all the components of our business are taken together, we believe that we can achieve high single digit organic growth in our business over the coming year, and that this growth rate can accelerate into double digit growth thereafter. On the subject of our share buyback, you will have seen from our press release that we’ve been active in the market, both during the quarter at test and into April. So far this year, we have purchased 314,000 shares with a total value of $1.9 million. This brings the total amount spent since we initiated the program to just under $12 million. I’ll point out that most of the purchases that have been made this year have been made during a close period under a 10b-5 plan, which is effectively acted as constraint on our flexibility to buy shares and is therefore limited purchases. Now that we are about to exit a close period, we’ll benefit this to act more freely with the results that I expected volumes to increase in the weeks ahead. So I just want to reaffirm what we have been saying that it is our intention to buy heavily in the market with a view to buying substantial number of share and though making a meaningful reduction in our share count. So thank you all. I’ll have to now hand back and open up question-and-answer session.

Thank you. We will now begin the question-and-answer session [Operator Instruction]. And our first question comes from Larry Solow of CJS Securities. Please go ahead.

Just a couple of quickies just on the point-of-care side, Ronan, you’ve outlined the confirmatory and the screening market opportunities in Africa. Could you just update us on that, do you still think that you get potentially some screening market in this calendar ’17? Or what’s your thought on that?

I don’t think so, because we can’t move until we get WHO approval and that process is in training. But it’s probably -- I don’t think we’ll achieve that until before the end of this year.

Do you still think that the point-of-care can grow I know it’s quarterly, it’s lumpy, but it’s been sort of like three years or even down. I know that’s partially due to the U.S. funding, but most of your business is to Africa. So is that an aberration or is this really just a flat market? And maybe you’ll get a pick-up when you get into the screening side of it, initial screening?

Yes, I think that’s both fairly, I think the growth opportunity is -- let me take a share of the screening market, and I think we have the ability to that now. As we mentioned in the past, we have equipped our factory now to manufacture and for -- in the screening area. So I think we’re well positioned given our reputation, given the quality of the products and our manufacturing capability, I think we can take market share.

But just on syphilis, I realized it’s still a very small piece. Anything anecdotally that always going to pick-up or is that still in a lot of -- it sounds like red tape and what not that’s there?

The rollout of syphilis has been a disappointment -- I mean have been a significant disappointment. Having said that, we continue to make progress with very, very modest progress, I mean we’re in around just over $400,000 a quarter. And I think that, I do believe that there is -- the CDC are conducting a trial, just commencing a trial in which basically they’re trying to determine how effective syphilis testing is in the sense that to one extent there is a public health syphilis program actually to detect syphilis positives that otherwise wouldn’t be detected. And we’re absolutely confident the answer to that is very much in the positive, so it remained to be convinced. And I think that -- so they actually find a significant quantity from as we speak in all of these trials. And I think that the outcome of that trial all to be very positive for us. But obviously, there is no certainty on that one, but these will be positive. And so we still believe that syphilis can be significant and I do believe it to be less significant than we had originally indicated. We have seen is of the $10 million market, I don’t think it’s going to get there. But I think it’s probably has the potential to get to about 50% of that level.

And on the CDC side, is there a control room in agencies in your test or…

These are our tests…

And then just switching really quick on the clinical upside, it's been faster a couple of years, I mean you saw some nice growth in the diabetes side. But it just seems to be camouflaged by every other quarter, it's something else coming down. I know currency has hurt you guys, but looks like the infectious disease even outside of the culling activity doing, is a slow decline. Any thoughts to that and to that infectious disease business eventually slightly flatten out, so some of the growth in the Premier could chime through a little better? Well, I just find it hard to see how you’re going to get to this last couple of calls, you’ve spoken to a mid to high single digit sales growth. I just don’t see how it could happen when you have all these things that are declining.

Well, I mean I think if you look at the various components of our business, we have diabetes, hemoglobin growing 8% consistent to getting that or higher growth, we’ve also immune to getting 7% or higher consistently. The current side to be flat, but we believe with the screening part that we talked about that it can grow. We then have Fitzgerald’s antibody business which is consistently flat and they’re going to probably remain so. And then lastly we’ve infectious disease, which have been our best flat, or margin declining. Ironically, when you cull and in Bartels and in MicroTrak range, which are dropping at 14%, annually 14%, 15% annually, or in the high side 17% and one can -- and you cull them, you actually -- and we’ll end up in a situation by your infectious disease business but the -- I think we’ll probably hold its own maybe very, very marginally decline. Because as we look at the components, we got line, which I think is very healthy but China which is healthy. So basically -- you basically culled your weakest components and the other factor is it becomes a smaller percentage of the overall. So if you take infectious disease at flask and Fitzgerald and flask combined being only between only 30% of the business and then your HIV growing, autoimmunity growing and diabetes growing, which combined constitute 70% of the business, I think that the augment that you get 6%, 7% growth this year actually is solid, we believable.

Our next question comes from Nicholas Jansen of Raymond James and Associates. Please go ahead.

Just on that last topic, just trying to better bridge. Have you guys thought about strategic alternatives in certain areas of your business that aren’t growing to potentially further cull or get out of? Because it does feel like a lot of your stronger performance, your current valuation doesn’t necessarily reflect the growth in diabetes and other area. So just wanted the get your thoughts on the portfolio, the willingness to perhaps shrink more to grow faster longer term and any updates on the Meritas strategic alternatives process would be helpful?

I don’t believe that any more color would make sense. I think the particular part as we culled we had a 15% and I think a 17% decline in revenues. And we haven’t got to the point where given that the amount of support, technical support that was necessary, that it just wasn’t economical. But I think in general terms, if you look at those sort of $100 million revenue business, I mean it's as simple as this, every incremental million dollars of sales results in an incremental maybe $0.5 million of profitability. And unfortunately on the other side the same is true, certainly shortfall as a million dollars will give rise to half million dollars, so that’s a profit. So you are looking at a business where in essence most of your costs other than material are fixed. And I know it’s somewhat of a simplification, but it’s a reasonable tax realization of our business. And therefore even if you look at something say for example like the Fitzgerald’s antibody business; although, it hasn’t been growing, it’s a very, very significant contributor and it’s absence and business will go from being cash flow neutral to being significantly easing cash. So I don’t believe that the culls are indeed disposals of any individual components of our business would make sense. And then just with respect to Meritas we are still doing our review, but nothing to announce at this moment.

And then just quickly on the HIV screening, I think last quarter you talked about submitted to the World Health Organization for approval. I kind of fell like the timeline might be a little bit different today than six weeks ago. But just wanted to get your thoughts on what’s going on behind the scene there?

I don’t think there has been any move in the timelines. I mean we’re actually at a point of independent trials as opposed to submission at this moment in time. So I think we all have been to spaces that being -- that's a very latter end of this year that we’ll gain approval. I don’t believe that we’ve moved that timeline.

And then just two more, in terms of the Brazil dynamics I think last quarter you talked about within the next six months you plan to reenter. Is that still the case where we perhaps should see maybe better growth in Brazil, maybe in the fourth quarter this year to better trends in ’18?

Yes. I think, well I mean the currency has remained around level and somewhat is some price inflation in the market. We’ve identified the unit as factor, which we’re putting in place as we speak. But it’ll be realistically by time we’re up and running, it’ll be already’18. So I think at worst we’ll be back into the market in early ’18 there.

And then lastly if you kind of think about the cost structure today, the free cash flow burn today. I know 1Q is kind of seasonally a lighter quarter for you guys. But just wanted to kind of get your thoughts and how we should think about gross margin progress through the year? And is the flat to slightly negative free cash flow for the full year, still the expectations given where we ended up in the first quarter?

I mean to speak on the points you made and the point that Ronan made earlier on in quarter one is the slowest quarter for, just based on the seasonality of the products that we have, and then consequently given our cost base that does have an impact on margins. So even if that quarter one to be lower do expect an improvement then and throughout the year, to the extent that approval and then we’ll obviously be very much driven by the extent of the top-line itself. So I do think getting back of towards into the 43% type level. We’ve made a lot of progress in terms of getting from 40% toward that this quarter and I think we’ll be back on those levels quite soon.

Our next question comes from Jim Sidoti of Sidoti and Company. Please go ahead. Jim, your line is now open [Operator Instructions]. Our next question comes from Joy Mashaal of Senvest Management. Please go ahead.

Can you just walk me through the $7 million cash burn this quarter, and maybe talk about what your expectation are for the remainder of the year? The previous caller alluded to the fact that this is a high cash burn quarter. Just can you walk through the components that won't recur and then what your expectations are for the remainder of the year?

I’m going to actually start at the bottom of the cash flow statements, because that’s where you’re more likely to see this with the less recurring amount. So the first one that stands out is the license fee of $1.1 million, that’s an annual license fee and it's a second last with one more next year and that is -- and then you won't see it again in any of the quarters this year; you’ve got items thought items relates to closure costs; you’d seen that we had provided about $5.5 million for those at the end of last year, and we spent about $2.5 million further $900,000 net of approximate $3.3 million, $3.4 million; there’s still scope for further payments; and as between now and the end of the year, some of those could even drift into next year due to the nature of the commitments. And share buyback is obviously going to be feature at least that’s out as such, because that will be a feature of the -- just the availability of stock and what happens in the market, the share price et cetera. The other big factor this quarter in terms of contributing to the burn would have been the change in working capital, and that was primarily on our payables drive and I see that being less of a factor going forward. So I see that being reduced and that was the major factor that would have really pushed it negative in terms of free cash flow per se. And I would say an improvement on the free cash flow by virtue of the fact that this is our weakest quarter, so we should have enhanced cash from operations and anticipating less in terms of working capital drain. So there is a twin boost would come there. We’ll be overly specific as to what I think the actual outcome will be, but I do expect improvements in each of the quarters and there’ll be fewer then of the one off costs.

Can you just review how much of the one off costs are remaining from the initial amount that you expected?

Approximately 2…

And so the major components going forward will be your -- obviously your interest payments and the share buyback for the rest of the year?

Correct, absolutely yes.

Our next question comes from Jim Sidoti of Sidoti and Company. Please go ahead.

So, a couple of questions, one looks like the [indiscernible] deal is going to go through after all. Is there anything that you think it's further off from that that might be interesting for Trinity? And are there any other consequences to that deal that you think could be either positive of negative to Trinity?

Jim, I think it's going to make most difference, I mean with the only impossible impact will be enough where there dominate screening, but I don’t think it's making any differences necessarily.

You don’t think they’ll be asked by anything?

One thing that happened, obviously they’ve been asked to divest to cull in the part of our business. So as we speak Abbott are earlier are trying to sell their trials business, so it’s available in the markets and we had to look at it out of curiosity. But obviously, I think it’s there where nothing to own a business anymore. So they have been asked -- they’ve been forced by the European regulators to sell that -- I mean we just given them 30% to 100% of the point-of-care market. So borrowing that, I think that’s the only divestiture that we see coming out that’s obvious. And I don’t really believe it has been much different so earlier had 100% most of the screening market in Africa and which will have at June. So actually that’s why I think and originally if you remember and there is so they determine, obviously they’ll business under direct to earlier and now they’ve got it back.

And then in northeast U.S. it seems to be a bumpy year for tax. Do you anticipate any pick-up, any rising tax here as a result?

The previous one was a soft one as well. So I’d say similar size but certainly not going to be larger…

Our next question comes from Scott Hood of First Wilshire. Please go ahead.

This is actually Gregg Hillman for Scott Hood. Just real quick, what percentage of your business is from United States?

It’s close 70%.

And who are the major payers in the United States right now, at this point?

Major what payers do you say or players?

Payers…

So I mean this is as they dispersed and obviously the two biggest players in the U.S. market and the diagnostic market will be in terms of users will be Quest and LabCorp; and Quest, number one; LabCorp, number two. You mean the time it uses and after that then really it’s you disperse across 5,000 hospitals.

And in terms of -- is there any risk that hit -- does the government have any say in terms of what these entities pay for these tests? I mean, is there any regulatory risks from the government in terms of…

I mean, I think there’s downward pressure from, I think some of the ensuring entities in general with whom have government. In general, there’s downward pressure on pricing, but that’s an ongoing factor.

And then the point that you guys say, is that going down or up. Or how the pricing been overtime or [indiscernible]?

I mean, the pricing is going down. I mean if you look at the buying power of Medicaid, Medicare and then principally the joint company, they are always under downward pressure and reimbursement. And I think that’s an ongoing dynamic in the business.

So that means you’d have to increase your efficiencies from choosing the test overtime as we go forward. Is that correct?

I think that’s a fair characterization, yes.

And then finally, is there any like trade associations or periodical survey in the industry for critical testing for infectious diseases?

It is broad range of publication that we wouldn’t necessarily be promoting any particular publication. But I’d say, there’s a lot of publication dealing with each of those actions, whether it’d be infectious diseases on the chemistry side, and…

I mean from the commercial side, just your political side. Is there any organization that represent -- I think there’s a clinical laboratory organization in lobbies in Washington, but is there any…

There’s none that we’re unaware of…

And your comment on syphilis earlier, I think is syphilis on the rise in the United States right now?

Yes, very much so/

So it's probably natural that the testing for syphilis should go up. And then how is your test position relative to other syphilis test?

I mean there are many syphilis tests in the laboratory market. But in terms of the point of care market and public health, we are the only FDA approved test -- FDA approved point of care test. And in addition to that, we’re the only CDC -- we are the only FDA approved product. And in addition to that then we are the only products with CLIA waiver, so we have that double exclusive. So for a competitor to enter the market against us, they have to first get an FDA approval for the point-of-care test and then get a CLIA waiver in order that it could be utilized in the public health environment.

Okay, thanks for the comments.

Thanks very much, Greg. We look forward to meeting with them on Tuesday.

Our last question is from Larry Solow of CJS Securities. Please go ahead.

Just a real quick follow up. So, in terms of pricing, I mean, I know obviously there is lot of pressures from insurance companies have been going on forever. And a lot of noise on the political side about drug price cuts. But I mean it seems to be that some of that’s not actually happened yet. And in terms of diagnostic testing prices and your stuff, I mean I thought that was a little bit below the radar, it’s a lot cheaper, so what I am talking is several hundred thousand dollar drugs that you’re talking about needed tests that I don’t think are very expensive or what this political -- what I think a lot of hot air. But I don’t think that’s really been targeted. I mean is that really impacted your business per se so much, I think that’s really not true….

Our pricing policy isn’t sort of like Valiant. I mean I think you’re probably right there. But in general terms I think the last question at point of care. I mean I think in general terms, there’s downward pressure on pricing. I mean obviously look at for example the price that we would supply our line western block now compared to 15 years ago. I mean our price just gone up in the mean time but our cost have gone up and our selling price has gone down. There is a constant pressure.

Okay, fair enough. Thanks.

So thank you very much everybody. And we’ll speak to you again at the next call in July. Thank you. Bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.