Central Puerto SA

BCBA:CEPU

Earnings Call Analysis

Central Puerto Struggles Amidst Expansion

Central Puerto faced a complex quarter contrasting acquisitions and financial metrics. With the recent tender offer, Proener's stake in Central Costanera now stands at 75.69%. The nation's power generation dipped by 7%, impacted by a 6% decline in energy demand due to milder weather. Meanwhile, Central Puerto's own output grew 11%; however, excluding Central Costanera, it would have fallen by 11%. Availability rates for steam and gas turbines and combined cycle units decreased to 57% and 84%, respectively, compared to 73% and 95% last year. Revenues decreased by 6% to Ps. 38.7 billion, and adjusted EBITDA plummeted by 34% to Ps. 17.1 billion. Net income also suffered, dropping 14% to Ps. 4.3 billion. Despite acquisitions, debt has been reduced by 22% to Ps. 87.2 billion, marking a continued deleveraging effort.

Central Puerto's Second Quarter 2023 Results Reflect Challenges Amid Economic Turbulence

Investors checking in on Central Puerto's performance in the second quarter of 2023 would note a financial landscape marked by several headwinds. The company navigated a 6% year-over-year decrease in consolidated revenues which totalled ARS 38.7 billion. This dip is primarily attributed to a terminated gas turbine PPA contract and broader economic pressures, including higher inflation rates compared to peso depreciation. Adjusted EBITDA also saw a significant contraction of 34% to ARS 17.1 billion in comparison to the same frame of the previous year, revealing a strain on operational efficiency.

Earning Highlights Indicate Inflation Pressures and Revenue Variations

The revenue reduction not only reflects the impact of the terminations and macroeconomic variables, but also includes ARS 4.9 billion from acquisitions like Central Costanera and ARS 1.8 billion from the Forestry segment. These new streams, however, couldn't cushion the 35% decline in contract sales and the 23% fall in steam sales due to lower demand from YPF's refinery. The Spot/Legacy energy sales also recorded a minor decrease, casting further light on the challenging business environment the company faced.

Leveraging for a More Stable Future Despite Current Debt Reductions

Positively, despite recent acquisitions, Central Puerto continued to deleverage, with total consolidated debt reducing by 22% to ARS 87.2 billion and net debt position declining to ARS 24.3 billion.

Cash Flow and Operational Challenges Amidst Maintenance and Asset Performance

Operational complexity was observed with the maintenance of gas turbines at Lujan de Cuyo plant and ongoing issues at the Buenos Aires combined cycle facility. These operational hiccups contributed to increased operating expenses and capital expenditure. EBITDA from businesses like the Forestry division provides a ray of hope, with expectations of an EBITDA ranging between $10 million to $15 million once the new planting process is complete, a considerable jump from the current $2 million to $3 million.

External Economic Factors and Devaluation Impact Financial Outcomes and Expectations

The 20% devaluation of the official exchange rate by the government casts uncertainty on CAMMESA payment delays and subsidy impacts, despite a reduction in payment delays from 60 days to around 30 days recently. With the winter period ending, it's expected that the financial burden on CAMMESA will decrease, potentially ameliorating some of the cost pressures Central Puerto faces.

Prospects Brighter for Future Availability Rates Post Maintenance

In terms of operational reliability, the maintenance work, particularly on combined cycles and steam turbines, is projected to lead to improved availability rates moving forward. Excluding the central Buenos Aires combined cycle, new units have shown robust availability rates, promising better performance once maintenance interruptions are resolved.

Earnings Call Transcript 2023-Q2

[Operator]

Good morning ladies and gentlemen. Welcome to Central Puerto's Second Quarter 2023 Earnings Webcast. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. If you do not have a copy of the press release, please refer to the Investor Relations support section on the company's corporate website at www.centralpuerto.com. In addition, a replay of today's call may be accessed by accessing the webcast link at the same section of the Central Puerto's website.

Before we proceed, please be aware that all financial figures were prepared in accordance with IFRS and are stated in Argentine pesos, unless otherwise noted. It is worth noting that the financial statements for the second quarter ended on June 30, 2023, include the effects of the inflation adjustment. Accordingly, the financial figures mentioned during the call, including the data from previous periods and the growth comparisons, have been stated in terms of Argentine pesos at the end of the reporting period.

Also, please take into consideration that certain statements made by the company during this conference call and answers to your questions may include forward-looking statements, which are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by industry remarks. Thus, we refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. Central Puerto assumes no obligation to update forward-looking statements, except as required under applicable securities laws. To follow the discussion better, please download the webcast presentation available on the company's website. Please be aware that some of the numbers mentioned during the call may be rounded to simplify the discussion.

On the call today from Central Puerto is Fernando Bonnet, Chief Executive Officer; Enrique Terraneo, Chief Financial Officer; and Pablo Calderone, Corporate Finance and Investor Relations Manager.

And now I will turn the call over to Pablo Calderone. Please, Pablo, you may begin.

[Pablo Calderone, Corporate Finance and Investor Relations Manager]

Thank you very much and good morning to you all. We are joining you today with our management team from Buenos Aires, Argentina to comment on our results of the second quarter of 2023. Taking a moment of your attention to review today's agenda, I would like to begin the presentation by addressing the latest development of the company during the period, then move on to analyze the evolution of the Argentine energy sector in the quarter, and finally, delve into Central Puerto's operating and financial results. At the close of my presentation, we will be happy to address any questions that you may have.

To begin with, and in line with our strategy to increase our environmental performance and contribute to the global decarbonization goals on May 3, 2023, Proener, one of our subsidiaries acquired 100% of the capital stock and votes of the forestry companies Empresas Verdes Argentina, Las Misiones and Estancia Celina S.A., which contributed a total of 88,000 hectares geographically located in the center of the province of Corrientes, of which approximately 36,000 hectares are productive and 26,000 on credit accounts with plantations. Following the recent acquisition of Central Costanera and in order to comply with the provision of the capital market law and the CMV rules on March 17, 2023, Proener promoted the tender offer to all the holders of voting shares of Central Costanera. The tender offer was opened from May 30 until June 12, 2023. And the notice of results was published on the following day, June 13, 2023, maybe on which it was informed by over 65,000 shares of the company participated in the tender offer.

Consequently, Proener’s shareholder in the company represents now 75.69% of the company’s capital stock. The shares of those holders of Central Costanera that did not participate in the tender offer continue to be outstanding and trading in the Buenos Aires Stock Exchange. With this acquisition, Central Puerto reinforces is growing in Argentina, consolidating its position as market leader in the power generation sector.

Now let’s use the next two slides to analyze the evolution of the Argentine energy market during this quarter. As we can see in Slide 5, the country’s installed generation capacity increased by 1% or 524 megawatts, reaching a total of 43,405 megawatts compared to 42,881 megawatts in the second quarter of 2022. This increase in capacity was mainly due to incorporation of 349 new megawatts from renewable sources, increasing 7% vis-à-vis the same period of 2022, of which 237 megawatts correspond to solar photovoltaic process 95 to wind farm; 12 to renewable and hydro projects; three megawatts to biomass; and finally, one megawatt of biogas generation units.

In turn, thermal capacity sources recorded a net 1% increase or 175 megawatts as a combination of the incorporation to the system of 780 megawatts of new combined cycles and the decommissioning of 567 megawatts and 38 megawatts of gas turbines and diesel engines, respectively.

Now, moving to the analysis of the power generation and demand of the period, in the second quarter of the year, energy generation in the local market decreased by 7% to 32,046 gigawatts per hour compared to the same quarter of 2022, with a 12% and 8% reduction in thermal and hydro generation, respectively, partially offset by an increase in energy supply flare new car sources of 3% and for renewables of 1%.

In addition, a 13% increase in imports from neighboring countries, mainly from Brazil contributed to the lower overall lower power generation of the period. This lower power generation second quarter 2023 vis-à-vis the same period of 2022 was a consequence of a 6% contraction in energy demand which was essentially driven by a 10% decline in residential demand as a result of milder temperatures recorded during the quarter compared to the same period of the last year. As an example of this phenomenon, the average temperature in May 2023 was 16.4 centigrade, while in the same month of the previous year, it was 13.8 centigrade, while historical average for the same month stands at approximately 14.5 centigrade.

The decrease in demand prompted the lower thermal dispatch, which was also negative in by the lower availability rates of certain power stations registering an average availability of 74% in the second quarter 2023, vis-à-vis 77% in the same period of last year. The lower thermal dispatch was compensated with more nuclear and renewable generation as commented before. The increase in nuclear generation was mainly due to greater energy production from the nuclear plant at Atucha I and to a lesser extent from Embalse, while the Atucha II nuclear plant is still under maintenance and is expected to be banking operations in coming months.

Regarding renewable energies, the increase in generation was related to the increase in installed capacity. Finally, the more hydro generation was primarily a result of a lower water flow in the Uruguay and Parana rivers, which was mainly driven by the lack of rainfalls and the consequent drought that hit the center and north of the country during the first half of 2023.

Going now to our key performance indicators for the quarter on Slide 7. During the second quarter of 2023, Central Puerto’s operated power generation increased by 11% to 4,762 gigawatts per hour compared to the 4,280 gigawatts per hour in the second quarter of 2022. It should be noted that this increase includes the incorporation of 953 gigawatts generated by Central Costanera, which was acquired during the previous quarter. Thus, when excluding the power generation from Central Costanera, power generation in the second quarter of 2023 decreased by 11%, representing a drop of 4 percentage points beyond the 7% contraction of the market as previously explained. This was mainly due to a 14% lower power generation as a consequence of a lower availability of the steam turbines at the Central Puerto site and lower dispatch of its combined cycle.

In turn, during the quarter, wind generation recorded a 2% increase in a year-over-year comparison due to a higher capacity factor of our wind farms on the back of higher wind rates, while power generation at Piedra del Aguila increased by 1%, driven by a higher water flow of the Limay and Collón Curá rivers.

Regarding thermal availability for a better understanding, let's break it down by technology. The availability of our steam and gas turbines was 57% in the quarter compared to 73% in the same period of 2022. Combined cycle availability reached 84% in the quarter compared to 95% in the same period of the previous year. It's worth to notice that the 2023 figures are impacted mainly by lower availability of some steam turbines, especially those of Central Costanera and the shutdown of the Buenos Aires Combined Cycle at the same power station.

Thus, when excluding Central Costanera, from a quarter-over-quarter comparison, the availability of Central Puerto’s steam and gas turbine would reach 73% and the metric for combined cycle will be 96%. It is worth to mention that the Buenos Aires Combined Cycle is expected to enter in maintenance by the end of this month and to be back in service by the end of the next quarter.

Finally, the steam production in the quarter decreased by 4%, amounting to 560 million tons compared to the 586 million tons in the second quarter of 2022. This was mainly due to the lower demand from YPF's Lujan de Cuyo refinery.

Before going into a more accepted analysis of the evolution of our main financial metrics, let me briefly review the consolidated results of the Central Puerto Group during the second quarter of 2023. Our consolidated revenues in the quarter amounted to Ps. 38.7 billion, decreasing 6% compared to the same period of the previous year.

Adjusted EBITDA, which excludes foreign exchange differences and interest related to foreign trade receivables by variation in fair value of biological assets from our Forestry segment totaled Ps. 17.1 billion being 34% lower to the adjusted EBITDA of the second quarter of 2022. Net income for the period was Ps. 4.3 billion recording a decrease of 14% vis-à-vis the Ps. 5.1 billion of the second quarter 2022. At the same time, during the quarter, we continue the leverage in the company despite the recent acquisitions. As a result, the group’s total consolidated debt was reduced by 22% to Ps. 87.2 billion while the net debt position as of June 30 declined to Ps. 24.3 billion.

Now assuming in our revenues analysis, as you can see on Slide 9, this amounted to Ps. 38.7 billion in the quarter as compared to Ps. 41.3 billion in the same period of 2022. First, it should be noted that in this quarter, revenues of the Central Puerto group include those corresponding to the recent acquisition of Central Costanera and the Forestry companies, which contributed with Ps. 4.9 billion and Ps. 1.8 billion, respectively.

Thus, when excluding these effects, the variation in revenues will be at 23% decrease or Ps. 9.3 billion mainly due to the following factors, a 35% or Ps. 8.3 billion reduction in sales on the contract mainly as a result of the end of the Brigadier López gas turbine PPA contract in August, 2022, and to a lesser extent to the negative impact of a higher inflation rate compared to the peso depreciation of the period, a 23% or Ps. 0.5 billion contraction in steam sales as production level decrease in line with the lower demand from YPF’s Lujan de Cuyo refinery and a 3% or Ps. 0.4 billion decreased in a Spot/Legacy energy sales, which amounted to Ps. 13.3 billion in the second quarter of 2023 compared to the Ps. 13.7 billion in the same period of year.

It was mainly driven by a 65% increase in remuneration by means of the resolution 826 that was below the inflation rate of the period. All of this being partially offset by the implementation of the Resolution 59 on March of this year, which partially dollarized combined cycles remuneration and to a lesser extent, the recognition of fuel cost from CAMMESA.

Moving now to Slide 10 for a better understanding of the evolution of our adjusted EBITDA during the second quarter of 2023. The groups adjusted EBITDA reached Ps. 17.1 billion, including the adjusted EBITDA of the recently acquired companies Central Costanera and the Forestry companies for Ps. 1.3 billion and Ps. 1.2 billion respectively.

Thus, on a consolidated basis, the adjusted EBITDA of the quarter recorded the contraction of 34% compared to the Ps. 25.8 billion in the second quarter of 2022 as explained before. When analyzing the adjusted EBITDA excluding acquisitions, we can observe that the variation is mainly explained by the previously mentioned drop in revenues at 21% or Ps. 3 billion increase in cost of sales, explained primarily by higher consumption of materials and spare parts due to the maintenance performed on the gas turbines at the Lujan de Cuyo plant and 8% increase or Ps. 0.2 billion in SG&A mainly driven by higher third-party services and personal costs. All of this partially offset by an 85% increase or Ps. 1.3 billion in other operating results mainly due to higher interest accrue or receivables from CAMMESA.

Moving to the next slide, consolidating net income for the quarter amounted to Ps. 4.3 billion decreasing 14% on a year-over-year basis. In addition to the lower adjusted EBITDA of the period the net income was impacted by a combination of a higher loss on net monetary position of Ps. 4.1 billion, partially offset by better results on our associated companies of the Ecogas Group for Ps. 0.2 billion, an increase of Ps. 2.1 billion in income tax, which is basically the result of higher deferred income tax and adjustment to the provision of the previous period with respect to the amount actually paid in the current period, partially offset by a lower current income tax for this period.

All of this was partially offset by a lower loss in net financial results, accounting for a positive variation of Ps. 6.2 billion driven by a gain in deferred value of financial assets, partially offset by higher net interest and negative foreign exchange differences, higher positive foreign exchange differences and interest related to the FONI receivables for Ps. 3.9 billion. And finally, higher positive results from an increase in the variation of the fair value of our biological assets from our Forestry segment.

Finally going to a Slide 12, we can see the evolution of our cash flow during the first half of the year. Operating cash flow total Ps. 26.4 billion as a result of the adjusted EBITDA period coupled with Ps. 5.9 billion in collection of interest from clients including FONI receivables and Ps. 3.8 billion in positive working capital variations, being all partial offset by income tax payments of Ps. 8.8 billion.

Net cash used in investing activities was Ps. 12.2 billion, mainly due to a Ps. 16.2 billion deployed in the acquisition of companies made during the first half of the year, coupled with Ps. 2.4 billion in investments in property planning equipment and Ps. 0.7 billion in inventory purchases, being all partially offset by Ps. 6.6 billion from the selling of short-term financial assets and a collection of Ps. 0.6 billion in dividends during the period.

Finally, net cash used in financing activities was negative in Ps. 21.5 billion. It was basically as the result of a Ps. 12.1 billion in debt service amortizations, primarily related to the Brigadier Lopez syndicated loan, along with Ps. 5.9 billion in interest and other financing costs related to our bank long-term loans and the cancellation of overdraft in checking accounts for Ps. 2.4 billion, and finally, Ps. 1.1 billion in dividends paid.

As a consequence, our cash position as assumed 2023 amounted to Ps. 4.5 billion, which is current investment in financial assets are included, our total current liquidity amounts to Ps. 24.3 billion.

With this, I would like to conclude my presentation. And now we invite you to ask any question to our team. Thank you for your attention.

[Operator]

We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Martín Arancet from Balanz Capital. Martín, your line is live. Please go ahead.

[Martín Arancet, Balanz Capital]

Hi. Well, first thank you for the materials as always and for taking my questions. I have five questions, sorry for the extent. I will try to be quick. I would like to run them one by one if that’s okay. My first question is regarding the Piedra del Águila concession. The government gave an extension on the concession of hydro assets, so it could be the next government, the one that determines the future of those assets. Do you think it is taking decision to move those plants to government control or could we still see any auction or an extension of the current concessions? And what is your estimate of Avda per year in Piedra del Águila?

[Fernando Bonnet, Chief Executive Officer]

Okay. Hi, Martin. Thank you for your interest and your questions. Regarding Piedra del Águila, as you say this government – the former government established an exchange – an extension of the concession in our case that extension have two phases, 60 days first and another 60 days coming after. And that will give our end of concession or put our end of concession in February or April next year.

So as you mentioned, the government that will analyze the extension or not extension will be a new government. And for the – for what we have been talking with different, of course, we need to know who will be the new government. Since yesterday it seems not so clear who will be the new government. But we have been talking with different reference from the candidates and the perception that we have is that they need to analyze in detail.

They don’t have an answer yet about what to do with this concession. But they need to answer to analyze that and deeply in indeed that not take a decision like the transfer to an OSA or to move statization process without analysis and taking in the consideration all the claims, that the concession – the actual concessioners have and the relation with the province. And the other thing is the investment that these concessions need to have to extend another 30 years of operation.

So in any case that we have been talking with the different reference of the opposition, we talk about taking this extension of one year that the concession has in – as a possibility not only two months or three months that the one that this government took. But taking this year of extension to analyze indeed all the aspects, so we are confident that we can have that extension and then start talking how to proceed with this concession in the near future. So we are optimistic that we have – we will have the opportunity to discuss that indeed with the next government. And the Avda – sorry, and the Avda that you mentioned you asked is around – that’s the pending because it’s in peso, so with the new devaluation we need to recheck, but it’s around $30 million per year.

[Martín Arancet, Balanz Capital]

Very clear. Thank you. My second question then regarding results this quarter. Revenue increased quarter-over-quarter probably partially due to the acquisition of Central Costanera, but results were affected by an increase in OpEx that more time compensated the additional revenue. Could you give us some color on the additional OpEx if it was related to Costanera? And what are your expectations of getting to more normalized levels?

[Fernando Bonnet, Chief Executive Officer]

Yes. No. Yes, it’s affected by not only Costanera, it’s affected by the big maintenance that we are doing in our combined cycles, especially in our combined cycles of cogeneration. In fact, our cogeneration of Lujan de Cuyo that we perform a big maintenance there. We are performing a big maintenance also in September in the Costanera combined cycle. And we are having an extraordinary maintenance in the small combined cycle of Costanera is Buenos Aires combined cycle, Siemens combined cycle is a small one that suffered a failure extraordinary failure in March. So we are having a big maintenance of our units, Costanera and Lujan de Cuyo plant, that are the reason of the increase that you see in the OpEx.

[Martín Arancet, Balanz Capital]

Okay. So in the maintenance of September, we could see increased OpEx also next quarter and probably going back to normalized levels by the year-end?

[Fernando Bonnet, Chief Executive Officer]

Yes. Yes, you will see some increasement, but we are being paying this big maintenance since or we and ENEL previously since the September or October last year, so we are paying in advance. So you will see an increase on CapEx but not the cash flow because we are – have been paying most of the cash of the CapEx in advance.

[Martín Arancet, Balanz Capital]

Okay. Perfect. Thanks. My third question then the government just devalued the official effects by more than 20%, as you just mentioned. Do you expect CAMMESA payments days to be the main tool that government could use to cushion the blow on the increased subsidy view?

[Fernando Bonnet, Chief Executive Officer]

I don’t know really. I don’t know. And in fact, CAMMESA was reducing the delays that we suffer in May and June, for example, we have a delay there of 60 days. And right now, we are in 30 days – around 30 days of delay in payments from CAMMESA. And also the government as you say, the devaluation impacts of course, because the cost of fuel and some contracts that are setting dollars. But in the other hand, the government increased the tariff or apply the full increase in the segmentation itself in tariff, that implies an impact of an increase on higher segments of the population.

So I don’t know really if we have – we can suffer. The good news is that we are ending the winter period in which the fuel and gas oil that we use increase. And that implies a huge quantity of money for CAMMESA. And we are ending that cold periods and the reduction of the build – of the CAMMESA build are unimportant. So I don’t know. I don’t know. We are not expecting for sure increase in delays more than 60 days. That was the higher that we see on May and June. But we are now, if we can go something like 40 days or 45 days, but not more than that.

[Martín Arancet, Balanz Capital]

Very clear. Thank you. And you were just talking about this big maintenance. So I want to ask about thermal availability. It came at 71% lower than in the previous quarter. Where do you see availability after this big maintenance works in 2024?

[Fernando Bonnet, Chief Executive Officer]

Yes. Well, the 71% is an average. So you have there a different combination of equipment and places. If you see only the combined cycles of Central Puerto’s spill in Costanera, you reach 95% or 96%, which is our normal availability. When you combined with the Costanera combined cycles, the one that I mentioned, the central monocytes combined cycle was affected, so the percentage will reduce to 84%. So whenever we can solve the problem of Buenos Aires, I think the – and Buenos Aires is all combined cycle. So we are suffering some problems of the life of this combined cycle. But on the other hand, the Mitsubishi combined cycle is very reliable. So if you exclude the Central Buenos Aires combined cycle the availability of the combined cycles and relatively new units are very, very good.

With Buenos Aires, well we are working to get online. But it's an all combined cycle. So for sure, we'll see some ups and downs with this unit. But not the big ones and Mitsubishi and GE and Siemens combined cycles are very, very reliable. In other hand, the steam turbines especially the Costanera ones have a very – a low available this quarter related to long periods of maintenance related to some problems with the boilers that we are hoping that we can reduce the frame, the timing of these interventions, of this maintenance and the boilers to replace the tubes that get broken.

And we expect to see better timing or better performance on that maintenance and reduce the availability for the next quarters. Of course, they are all units, as you know and the same as the steam turbines of Puerto. So the availability is not so high like combined cycles, but we expect to reach similar levels or close to similar levels to steam turbines of Central Puerto, which are around 70%, 75% of availability in terms of steam turbines. So we are confident that we can increase that availability in next quarters.

[Martín Arancet, Balanz Capital]

Okay. So probably closer to Central Puerto all normalized levels of around 80%, 85%, something like that?

[Fernando Bonnet, Chief Executive Officer]

Yes, yes. In average, yes, but you need to – if you separate this better because excluding Buenos Aires combined cycle, the one that Costanera, the small one that I mentioned that is unavailable right now. You will see availability around the – 90% in the owned combined cycles and between 88% and 90% for the combined cycles and for the steam turbines, we are expecting to see something related to 68% to 70% something. That are the numbers that we expect the Central Buenos Aires is more unpredictable, as I mentioned, because it's at the end of the its life and we don't have a full maintenance with Siemens. It's only as reduced target of maintenance because they are not, they are not produce all the parts of this combined cycle. So excluding that combined cycle, we are confident that we can reach good levels of availability.

[Martín Arancet, Balanz Capital]

Very clear. Thank you. And my last question then, you got additional land for forest. How much EBITDA per year do you expect for that line of business, all the forest together, the one that you already got and this new one?

[Fernando Bonnet, Chief Executive Officer]

Well, as I mentioned last quarter, this forest lands are almost cutting the same that they are planting. So the EBITDA right now is close to CEO [ph] is around $2 million or $3 million per year because we are increasing our hectares planted. So we are investing on new hectares planted. But right now is, as I mentioned, is $2 million or $3 million. We expect when we finish this process of planting new hectares, an EBITDA around $10 million, around $10 million and $15 million, between $10 million and $15 million.

[Martín Arancet, Balanz Capital]

Thank you. That's all in my side.

[Fernando Bonnet, Chief Executive Officer]

Yes.

[Operator]

Thank you. [Operator Instructions] And there are no further questions in queue at this time. This does conclude our question-and-answer session. I would now like to turn the conference back over to Mr. Fernando Bonnet for any closing remarks.

[Fernando Bonnet, Chief Executive Officer]

Okay. Thank you for your interest on Central Puerto. Have a good day. Bye-bye.

[Operator]

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.