Ternium S.A. (TX) Q1 2015 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Ternium First Quarter 2015 Earnings Call. [Operator Instructions] As a reminder, this call is being recorded. I'd like to introduce your host for today's conference, Sebastián Marti. Sir, you may begin. Sebastián Marti: Thank you. Good morning, and thank you for joining us today. My name is Sebastián Marti, and I'm Ternium's Investor Relations Director. Ternium issued a press release yesterday detailing its results for the first quarter 2015. This call is complementary to that presentation. Joining me today is Mr. Pablo Brizzio, the company's CFO, who will discuss our performance. At the conclusion of our prepared remarks, we will open up the call to your questions. Before we begin, I would like to remind you that this conference call contains forward-looking information and that actual results may vary from those expressed or implied. Factors that could affect results are contained in our filings with the Securities and Exchange Commission and in our press release issued yesterday. With that, I'll turn the call over to Mr. Brizzio.

Thanks, Sebastián. Good morning to everybody and thanks for participating in this call. Let me first describe our performance during the quarter, and then we will go to the Q&A session. EBITDA during the first quarter 2015 was $313 million, a 4% sequential increase, mainly reflecting a 3% increase in shipments. EBITDA margin increased slightly to 14.7% in the first quarter 2015, mainly as a result of $47 lower steel operating costs per ton, partially offset by $40 lower steel revenue per ton. Net sales were $2.1 billion in the first quarter, just 1% sequential decrease, as I mentioned, decrease in revenue per ton was mostly offset by the increase in shipments, which reached over 2.4 million tons in the quarter. In Mexico, shipments were 1.5 million tons, 8% higher sequentially and 9% higher than in the first quarter last year. As I commented in previous call, Mexican consumption of steel has been growing, mainly as a result of a healthy demand from consumers in the manufacturing industry. Despite a strong underlying demand, we may experience slight softening in shipments in this market in the second quarter 2015 due to destocking trend in the value chain. Steel revenue per ton in Mexico was 5% lower sequentially. And steel prices in the U.S. and Mexico began to trend downward during the fourth quarter 2014, as they continue to decline throughout the first quarter and during April due to the high level of steel imports in to the U.S. market and the destocking process in the value chain. In addition, as close to half of our sales in Mexico are under contracts, and this caused a lot of our quarter in our revenue line to reflect the changes in the steel market prices in the first quarter of 2015, did not draw the important price decrease that occurred in the last month in this region. We expect as a result to report in the second quarter a new reduction of revenue per ton in the Mexican segment, even though we have recently seen signs that prices maybe reaching a bottom in this market. Shipments in the southern region decreased 3% sequentially in the first quarter 2015, mainly due to lower seasonal demand in Argentina and we believe they will recover to the previous levels during the second quarter 2015. Realized price in the southern region also saw a 3% sequential decrease in this quarter, and we expect them to also have a downward trend in the coming quarter. Consolidated EBITDA per ton of steel increased 1% sequentially in the first quarter 2015 to $129 as both operating cost and revenue per ton had been trending down. As I explained before, mainly reflecting lower steel prices in our main steel market, a lower cost from -- for purchased steel -- excuse me, for purchased slab, raw materials and energy. Prices were at lower, but slab, scrap and energy continue to decrease during the first quarter 2015. Although this cost benefiting trend will not be entirely reflected in our cost sales in the second quarter 2015 due to the gradual pass-through of these inputs to costs, as Ternium consumes its inventories over time. Consequently, during the second quarter of the year, we expect the lower operating margin compared to the operating margin in the first quarter as we expect a decrease in revenue per ton will not be offset by a margin decrease in cost per ton. In addition, we expect that shipment across all our market will remain relatively stable in the second quarter 2015 as a decrease in Mexico will be offset by a recovery in Argentina. Equity in results of nonconsolidated companies was a loss of $133 million in the first quarter of the year. The results included a $110 million loss related to an impairment of Ternium's investments in Usiminas. Led by the expectation of lower prices of steel and iron ore, a weaker steel demand in Brazil, a weaker Brazilian real to U.S. dollar exchange rate, a lower operating margin and a higher discount rate compared to our previous value use estimation for our Usiminas investment. Let me comment about the pending issue that we have with the SEC staff that we have mentioned in our press release yesterday regarding our investment in Usiminas. The SEC staff issued comment as part of its regular reviews of our filing, regarding the current value of Ternium's investment in Usiminas, including a second explanation on Ternium's value use calculation under the difference between values used and certain fair values indicators. We provided additional information to the staff supporting the company's accounting treatment of the Usiminas investment and the IFRS as of September 30, 2014, and we have further discussed with the members of the staff which continue as of today. In the conclusion of this process, it is that an additional impairment of investment in Usiminas should be recorded in 2014, we could be required to restate our 2014 financial statements to adjust the current value of Usiminas to a lower level. Income tax in the first quarter 2015 was $88 million compared to $112 million in the previous quarter. The income tax penalties in the first quarter 2015 include deferred tax expenses related to a withholding tax on dividend distributions in Argentina in connection with the Siderar's increased reserve for future dividend and cash dividend payout. As you recollect, Siderar has paid dividend just a couple of weeks ago. Additional to that, there is a noncash effect on deferred tax related to the depreciation of Mexican peso and the Colombian peso against the U.S. dollar during the period. And the impact of nontaxable loss seen from the impairment of the investment in Usiminas. So net result decreased $82 million sequentially in the first quarter to a loss of $22 million, mainly as a result of the mentioned loss related to our investment in Usiminas, partially offset by a lower income tax expense, and of course the mentioned better operating income we showed during the quarter. Turning now to the cash flow statement. I'm glad to report that free cash flow reached $240 million in the first quarter of 2015 and net debt decreased to $1.5 billion from $1.8 billion as of the end of the fourth quarter last year. Our financial position continues to be strong, with a net debt to last 12 months EBITDA ratio of 1.1x. Net cash provided by operating activities in the first quarter was $324 million, included a $70 million lower working capital. Capital expenditure were $84 million, down from $109 million in the previous quarter and from $104 million in the same period last year. Important to mention that if the general shareholder meeting that will take place next week approved the proposal for director [ph] on paying dividends. Ternium will be paying in a couple of weeks a dividend of $0.90 per ADS, coming from $0.75 last year, which is a 20% increase. And with 3% -- a 39% payout ratio and around 5% dividend yield. So with this, that are my main issues I wanted to comment on. And now, please, let's go to the Q&A session. Thanks.

[Operator Instructions] And our first question comes from Leonardo Correa from PVQ Pactual.

My first question is regarding your cash flow generation and capital allocation. We've been seeing in this quarter again a very strong free cash flow generation, above $200 million, which is above more or less what you're spending in CapEx, and well above -- and above what you have in terms of dividends for the year. So just this is clearly a company generating a lot of cash flows. Just in terms of capital allocation, could you be thinking, going forward, of potentially increasing cash returns? And perhaps what would be the priorities in terms of capital allocation, region-wise or in terms of projects? That would be my first question. Second one regarding the slab spread versus HRC. Just if you can give us an update on where they are currently and what you're expecting for the next quarters in terms of the HRC versus slab spread, which will have a positive impact on your Mexican operations? So that's it, guys.

Okay. Leonardo, let me start with your first question. As you see, we have a positive result, in which we have a strong free cash flow generation, with a lower level of CapEx. Coming to next quarter, it's very important to mention and to understand and where this cash flow will be directed. First of all, that we will be paying dividend from Ternium. And the total amount of dividend will be close to $180 million. Additional to that, there is the dividend coming out of Argentina from our subsidiary in Argentina, Siderar, which pays over $80 million that was already paid. So part of that is going to minorities. So a portion of that is also increased the outflow of cash from the company. Together with that, as it was already described in the press release, we concluded the transaction of acquisition of the participation in our subsidiary in Colombia, Ferrasa, that it was now part of us, which is 46% of the total company that required asset payment of around $70 million. So the company will be utilizing a part of the cash flow generated during the first quarter in all the issues that I've mentioned, which is in line with one of your comments, which is that we have increased the dividend payment from last year. So as we have been mentioning also, we are expecting a decrease in our generation or our EBITDA generation for the quarter and of course quarter should be reflected in the cash flow during the coming quarters. So no additional projects or anything special to mention at this moment in respect to that. But the cash flow will be utilized at this moment to distribute to shareholder. And in the shares that we already acquired from Ferrasa and of course in CapEx and sustaining a very solid financial position. Entering into your second question, which is also very important. The spreads that we are still seeing between HRC and slab continues to be very healthy. And they are over a range of $150 per ton, which allow us to sustain a very good level of returns in our operations in Ternium. We continue to see, during the quarter and into beginning in April also, continually decreasing in pricing of HRC and this has been in sync with the decreases that we have been seeing in the prices of slab. And the gap between the 2 continues to be at a very healthy level. And let me also mention that we are still not seeing these decreases in slabs in our financials due to the usual comment that we make, which is first in, first out methodology of valuing our costs. So we are expecting to see that gradually coming into the second semester of the year. And that's why we are saying in our release and in our remarks that we will mostly not be able to match the reduction in prices that we're expecting to see in coming quarter with reduction in cost, that we know that they are there because we know that we are buying slabs at lower costs, but we are not be able to look or to see them going to cost. So I believe I answered both of your questions, Leonardo.

Perfect. Just if I may, just to reshape my first question. Given how low your leverage is now, right, net debt to EBITDA is now very close to 1x, would there be any level which you think is appropriate given the timing of the cycle and some of the options that you have of investments and some of the issues especially with Usiminas. What type of level would you be aiming of net debt-to-EBITDA. I mean would this be an appropriate level, or you think there's room to maybe increase it to 1.5x to 2x net debt to EBITDA?

We feel, as a company, very comfortable with this level of operation. Of course, this can move because as I mentioned, we have a reduction in the EBITDA in the coming quarter. The last 12 months will be reduced. And if we would have to pay all the issues that I mentioned, probably you have some increase in that ratio. But we always feel comfortable in low levels of operations because as usual, it allow us to, first of all, have a really strong financial position and not suffer during timings in which the industry goes through some difficulties. So we feel very comfortable with low levels of operations. Of course, this has happened in the past. We can't have higher levels. But that depends on certain projects. As we mentioned, we are not having any specific project at this moment. So just to be quite short in the answer, we feel very comfortable with these levels or these low levels of ratios.

Our next question comes from Carlos de Alba from Morgan Stanley.

Just, can you -- clearly a big issue on Ternium is what's happening in Usiminas? So I would like to understand one of the biggest issues is that the company, my understanding, it wants to bring the former executives of Usiminas back. But your partners don't want. And so to what extent would you be able to accommodate that request in order to move forward with that business and take this issue completely out of Ternium and realize the value that may be hidden in the stock?

Carlos, and thanks for the question. It's important to answer it. As you know, after the issue that happened in September last year, we went to court in order to claim that, our understanding that these issues were not right and we're against the agreement that we have. We are expecting very soon a resolution on these specific issues. And as you know, already one of the 3 judges that needs to decide have voted, and voted in favor of the reinstatement of the executives on -- back to the company. We need to wait until the other 2 judges, and as I said, this is expected very soon and this is very important data point in the situation of Usiminas, because it will clarify, if this is the case, who will be the managers of the company in the coming month. So that's very important. And this should be resolved very, very soon. With this resolved, and as we all said, even quoting Daniel Novegil, our CEO, we are still very confident that through good faith negotiation we can reconcile the position of parties and always take into consideration that we are all working for the best interest of the company. So this is something, the one -- the issue that you mentioned, it is important to move ahead in this situation in Usiminas. So the expectation is to have this resolved very, very soon.

And just -- if you allow me, I would like to just follow-up on that. So I see why it's very important to get the opinion of the court, right, to remove any potential interpretation or opinions that there was some unlawful payments that was received by these executives. So I see why the court decision is really important. But -- so even if the court rules in favor of Ternium or in favor of the executives, that may not help the situation with your partners, if Ternium wants to reinstate the executives. It would be good for them because they would be clear of any potential mispractice. However, it may not help the negotiations. So would the company be ready to -- even if the court resolution is in favor of the executives to maybe negotiate in good faith and say, right, let's move on, let's bring new executives or just keep the ones that have been appointed since the former ones left.

But Carlos, the resolutions that the judges needed to take if there should be -- these executives coming back to the company, they will not only or probably there is not an issue of clearing what they have done or have not. The issue is that if the judges vote in favor, what are -- and they voted in favor of the reinstallments of the executives unlawfully, this means from the company. So formally, they will need to go back to the company. For us, we understand this is also for the company, what is important is that we'll take out some uncertainties that are still there today. With that, we continue to believe that there is a good chance of a good faith negotiation with our partner to mull this situation over and work for the best interest of Usiminas altogether.

All right. Fair enough. Just a last question on these discussions with the SEC. Could you maybe give us a little more detail as to what specific -- why is the treatment – the accounting treatment that this SEC is recommending? Or why this difference of opinion arose between the way Ternium accounted for investment in Usiminas and the way the SEC may think that you should have done it?

Yes, the SEC has started to ask different questions regarding the way we calculated the value use, and why there is a difference between the value use and certain transactions in the market like the acquisition of trading shares or the market value of the ordinary shares. That's -- the question in hand though, of course, the SEC agrees on the way the company resists the investment in Usiminas because we are resisting it under the regulation of the IFRS, the specific rules, how we need to value this and specifically, we need to check if there's an indication of a possible impairment and, for example, reduction in the price of the share is an indicator that we need to pay the investments that we have doing a new value use calculation. And the regulation says that we need to apply the carrier between value use and fair value. That's why we have been persistent in our investment in Usiminas through the value use calculation. The SEC is -- must not be comfortable with the value use, vis-à-vis the comparison with fair -- or what they consider fair market transactions like, the quote in market price or the previous transactions. So this is the discussion. And the issue is back to September last year where they have been reviewing all our filings. And that is the data point where if there is no positive solution for the company, there should be probably a repayment at that point.

Our next question comes from Thiago Lofiego from Merrill Lynch.

Two questions. First one, could you share with us your view on Mexican market? What's your outlook for apparent steel demand growth in 2015? And also, if you could comment on imports competition in the U.S. Do you expect less competition now that prices have been coming down? And then the second question is regarding your, the strategy on your iron ore assets in Mexico. Are they generating enough returns at this point? Or should we expect you to shut down some of your mines? And maybe, what's the price level at which you could eventually decide to shut down?

Let me go first to your question on our mining activity. We keep working in our mine full capacity, because the construction cost and the cost of bringing that pellet, remember as we are pelletizing in our mining facilities, still better than bringing materials from imported sources. So we continue to do that. We -- in fact, what you have seen lately in the iron ore price is somewhat of a recovery, small recovery going back to prices of over or around $55 per ton. So we are not now in a position to stop that. It continues to be feasible for us to keep constructing the material, pelletizing that material and utilizing it in our facilities in Mexico. So we are planning to keep doing that. And regarding your question on Mexico, we continue to see a positive trend especially in the industry sector in Mexico. We are expecting to see and the [indiscernible] association projections that we have continues to show a positive trend in steel consumption in Mexico, close to around 3% compared to last year. We -- though we are seeing some reduction, possible reduction in shipment during this quarter, this second quarter due to destocking process, as is traditional, as is usual because when you are seeing a downturn price, the scenario traditionally customers will lift and utilize their stocks until they see the moment in which there should be a probable change in the trend of the price scenario. What we are seeing and is also mentioned in our press release is that there is an important increase on imports into the North American market, especially the U.S. And this reduction or significant reduction that you see in the U.S. reference prices, probably will help to reduce the level of imports into the market. We are expecting to see also some that basically we are reaching a bottom in the level of prices -- or that the bottom in the level of prices should be close to happen and basically because now the prices of the product have reduced to a level in which you could have spent differences between prices locally and prices -- international prices for the U.S. I mean, if you remember, for us the most important price in Mexico is the U.S. pricing. So with respect to volume, we continue to be positive and we'll continue to believe that we will reach or increase on a yearly basis and the number that we are shipping into Mexico in comparison to last year. Of course, thanks to the investment that we made and we finished last year including the new Corol line and the Tenigal facility.

Our next question comes from Alex Hacking from Citi.

Pablo, one quick question, if I may. The realized steel price in Mexico this quarter was down about $50 a ton compared with the fourth quarter. If you look at kind of the indexes on U.S. steel prices, they fell quite a bit more than that, like down $150 or something like that. Can you just remind us -- I mean, is that effectively because of steel priced under contracts, product mix and things like that? And can you just kind of remind us of your sensitivity of your realized prices versus actual prices?

Sure, Alex. Yes, you are totally right. We have around close to 50% of our shipments in Mexico under contract. So there is usually a traditional delay in prices that appeared in our sales line. And usually the delay in this part of our sales is around the quarter. That's why we are saying that we have not seen a good reduction in prices in our Mexican operation and that should continues to happen during the coming quarter. In fact, this will be the case for the whole Ternium operation, because prices have continued to go down through the quarter. So you're right, there should be an increase in the reduction on the pricing scenario for the company in the coming quarter.

And our next question comes from Marcos Assumpção from Itaú. Marcos Assumpção: Just a quick question here on the impairments at Usiminas. If you could mention to us what is the level that you have booked for Usiminas now, on a per share basis, following the impairments that you already made since 2012?

Okay. Yes, Marcos, we have reduced the value of our investment in Usiminas as of March 2015 to $6.1 per share. That's including the impairment charge of $110 million that we got and, of course, include the impact of the devaluation that occurred during the first quarter, as you know, has been quite important. Marcos Assumpção: Yes, for sure. So we're talking about nearly BRL 18 per share at Usiminas, right? My question here is given the difficulties here that were -- we have seen on reaching a peaceful agreement between Nippon and Ternium. Will Ternium be willing to accept potentially an offer from someone to sell their shares at some point, considering that you already have booked the shares at BRL 18 per share. And maybe the perspective that you have for the country today are lower than when you made the investment back in the end of 2011?

Marcos, well, that's -- first of all, that's speculating on a possible sale of share. As you know, we will not do. We have been invested or we have invested in Usiminas and we have entered in to shareholders’ agreement together with Nippon to jointly control this company. And we have further invested buying shares from Previ when they decided to sell, but shares, that basically reflect our commitment to the future of the company and to the future of our presence in Brazil. Of course, I mean, it's understandable that probably the short-term view on Brazil or the short-term view on the sector are not as good as we would like to have. But we believe that the presence in Brazil is important. We believe that as an American participant and with strong presence in Latin America, the presence in Brazil is important. So we are confident that we will find a solution in the negotiation with Nippon Steel to put over this situation that we are facing today, to work together in implementing the best solution for the company that we'll be facing, as you mentioned probably not the best of the situations in the coming quarter. So that's the situation. All other issues are basically speculating on possible issues that are not there at the moment. Marcos Assumpção: Okay, Pablo. And given that -- given you're interested in the Brazilian market, would you be considering eventually increasing your footprint in the country? Because we could see, given that the market is quite weak and some players are leveraged, and we could see other opportunities arising. So would you be interested in increasing exposure, maybe in -- only as slab player like CSA or eventually CSV could be for sale as well, the stake that value owns at the company?

Well, Marcos, you know that we have looked at that asset and we decided not to participate at the moment for these assets for sale. A couple of years ago, we have not seen this and that they have put already this asset for sale again. And we are not, at the moment, we are not interested in increasing our footprint in the country. Of course, any company in the region or any company in the world in their respective regions, if something appear, you need to look at it, as we did a couple of years ago with CSA and deciding not to participate on that. So nothing at the moment. No perspective of increasing our participation in the Brazilian market at the moment. And if something appear, we need to look at it as any company will do. But we are not expecting to do anything at this moment. Marcos Assumpção: All right, perfect. And last question on Argentina. Do you expect a significant demand improvement from 2016 onwards with potential increasing investments going into the country?

Well, we haven't seen -- first of all, we haven't seen a reduction or a significant reduction in volumes last year or this year. As we already mentioned, we are expecting a recovery of treatments to the local market in the second quarter, coming out of the seasonally lower quarter, which is the first one in Argentina. So reaching similar levels that we saw at the end of last year. Very early to tell how the situation in the country will be in the coming years. You know that we tend to be positive on the perspective of the country, but the shipment is -- are running at a very healthy level. And we have no reasons to believe that this should change in the coming quarters up to now. Noting of course, that the level of shipment is lower than it has been 2 years ago, but at a healthy level. So we continues to be positive in the expectation for Argentina.

Our next question comes from Ivano Westin from Crédit Suisse.

The first one is on the steel competition. Yesterday and today there are some news flows informing about anti-dumping investigation, Europe against steel imports from some countries. I just want your thoughts on this, in terms of is this a trend which we expect to continue? And as a result would you expect greater exports into the Latin American region? And also, if you could also place a comment on your full year guidance of volume of each of divisions, Mexico, Argentina and in other markets?

Ivano, we -- you're right. And this is a trend that we are seeing in anti-dumping cases in different countries, which is very normal, and especially when you see the increases in inflow of imports to different countries, it's very normal to see countries defending their markets if they believe that there is anti-dumping coming from other countries. So we expect to continue to see a trend on that line and we consider it normal. Respecting your question on volume, we -- last year, we were expecting to have shipments as of 2015, reaching a level close to 10 million tons coming out from 9.4 million tons in 2014. We are still working with this number. A number close to 10 million tons as a whole is a number that we are working with. Of course, this increase is coming out of Mexico and because we are not seeing much more -- much differences in volumes as we were commenting with Marcos’ question in our shipments in Argentina. So this increase should come from Mexico.

[Operator Instructions] Our next question comes from Christian Landi from Scotiabank.

So it was our understanding that the slab sales from Siderar to Mexico were going to increase in the quarter. But we actually didn't see this happen, and it was only 12.5. So what do -- what the slab sales say, do you expect going forward to be exported from Siderar. That's the first question. And then just a second quick question...

Excuse me, excuse me, Christian. We couldn't hear you very well. You were relating to Siderar, your question?

Yes. That's the question.

Okay. Go ahead. Go ahead, please.

Okay. The second question is regarding the CapEx breakdown between Mexico and Argentina, if you could give us a little bit guidance of going forward what should be that breakdown, that '15 in CapEx only?

Okay. I believe I understand your question. It was not very well heard. In relationship to what we are seeing in Argentina, we -- what we are seeing is, of course, during the first quarter, which is traditionally a lower quarter of the year, a decreased volume in comparison to the last quarter, last year. But we're expecting to recover that in the coming quarter. So volumes should go back to normal in Argentina, specifically in the second quarter of the year. In relationship to contract...

I'm sorry, what I meant was the slab sales, because we understood that the slab sales coming from Argentina to Mexico, so do you think that unfinished product in the Mexican plants were going to increase gradually. But we actually didn't see this happening in the first quarter, that's what I meant. Slab sales.

Okay. So we didn't hear your question before. Sorry about that. Yes, you're right. We are not at the moment -- we initiated the export or the shipment from Argentina to Mexico, but with the new level of prices, we are not doing that for the moment. So yes, you're right, you are not seeing additional volumes of slabs moving from Argentina to Mexico at the moment, yes. Going to the -- your second question, which I understood was in relationship to CapEx, we are -- we continue to work with a number of over or around $500 million for the year. So we are, this first quarter was below $100 million, we have different projects that we consider will reach this level of total CapEx for the year. Of course, we will update you in the coming quarters. And if there is any change, we'll let you know.

Okay. Just a follow-up on that. Regarding the sustaining -- on the sustaining CapEx, what would be the breakdown between Mexico and Argentina approximately, going forward?

The total sustaining CapEx for Ternium is around $300 million, $350 million per year.

And we have a follow-up from Carlos de Alba from Morgan Stanley.

Carlos?

Sorry, sorry, I was on mute. Sorry to come back to the same topic, Pablo. Just what exactly if there is a way to summarize it, is Ternium or Nippon -- are Ternium or Nippon negotiating on the Usiminas issue? Because clearly that will help us understand what are the possible outcomes. And if for instance, if a resolution is not reached, is it feasible that the shareholders’ agreement is terminated or not? So you can highlight for us what are the main topics of discussions in these negotiations, that would be very useful.

Well, Carlos, as you can imagine, I cannot comment on a specific issue that we are doing or we are having an ongoing negotiation. The idea is to clarify the situation, to clarify the issues that we -- in which we have different views, which are quite clear, and try to find a way we can continue to work together for the best of Usiminas. We understand that both companies have different strengths that are very helpful for Usiminas and especially into this situation. So we are trying to find a way in which we can continue working together, probably clarifying some of the issues that are not clear in the current shareholders’ agreement. But this is the issue that I can comment. And as I mentioned, we are confident that we can obtain through negotiation, a resolution for this situation that we have.

And there are no further questions in the queue. I would like to turn the call back over to Pablo Brizzio for any closing remarks.

Okay. Thanks. Before just saying goodbye, let me comment or let me add that we are having our Investor Day on the 18th of June, so very soon, in New York. And we are hoping to have you there. And as traditionally, we will comment on the company and especially Daniel Novegil will be commenting on the initiatives that we have for the company during the -- especially in the situations that this sector is facing. And as you know, we all -- we work in trying to get the best out of our assets and out of our company. So we are expecting to have you there in the 18th of June. And okay, so with that, thank you very much for the interest in the company. As usual and traditional, we are here to answer any further questions you may have. Thanks.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. Everyone, have a great day.