Grupo Mexico SAB de CV

BMV:GMEXICOB

Earnings Call Analysis

Grupo México Q3 2023 Earnings Highlights

In Q3 2023, Grupo México demonstrated resilience amidst lower copper prices and inflationary pressures, achieving an increase in revenues by 8.7% YTD to nearly $11 billion, and a robust EBITDA of $4.16 billion, up 5.5% YTD. The Mining Division drove these results with a 4% YTD increase in copper production, reaching 765,000 tonnes. The Infrastructure Division also contributed significantly, with $33 million in revenues and $21 million EBITDA by September end. CapEx amounted to $837 million YTD. Net debt-to-EBITDA remained low at 0.3x. A dividend of MXN 1 per share, up from MXN 0.8, was declared, reflecting a strong cash generation and yielding one of the highest returns in Mexico at 5.4%.

Grupo México's Leadership Transition and Continued Growth Amid Challenges

In the realm of Grupo México, the company began the third quarter of 2023 on a somber note with the passing of Mr. Xavier Garcia de Quevedo, a prominent figure whose legacy becomes a part of its ongoing narrative. As the company advanced, a 8.7% boost in year-to-date revenues was reported, reaching the cusp of $11 billion. Factors like higher copper sales volume and increased moly and silver prices cushioned the impact of copper and zinc price dips, steering the total revenue to $8.3 billion for the initial nine months of the year.

Operational Achievements and Financial Fortitude

Grupo México's operational income and EBITDA have seen a notable surge of 7.6% and 9.2% respectively over the same period from the year before, showcasing a quarter's increase over 25%. An EBITDA margin standing proud at 50% attests to the operational efficiency and financial muscle of the company. A dividend increase to MXN 1 per share reflects not just confidence, but also an attractive 5.4% dividend yield for investors looking for steady returns.

Mining Division and ESG Initiative

The Mining Division of Grupo México, augmented by commendable ESG efforts including the ELSSA certification for their Buenavista del Cobre unit, embarked on several key projects. The Pilares project has seen substantial investments to elevate mineral ore grade and is already operational, while the Buenavista Zinc undertaking is inching closer to fruition with completion around the corner. Significant strides in copper exploration and the ambition to ramp up to 2 million tonnes per annum delineate the roadmap for the mining division's expansion.

Transportation and Infrastructure Divisions Ride High

Diversity of results did not deter the Transportation Division from recording almost $2.4 billion in revenues, bolstered by the Automotive segment's stellar performance with a 47% leap. A remarkable 20.4% hike in EBITDA year-over-year with an improved EBITDA margin of 46.2%, and a rising cumulative net income of 10.2% to $373 million, spotlight the Transportation Division's robustness. Expected CapEx investments are geared towards maintenance, growth, efficiency, and special projects, outlining a strategic path for sustaining and enhancing capabilities.

Stellar Performance and Future Trajectory

Closing on a high note, Grupo México's Infrastructure Division too reported revenue increments of 4.1% on a cumulative basis, with heightened expectations for closing the year at record sales and EBITDA levels. Noteworthy is the division's net income and EBITDA spurt of 70.6% and 31.6% respectively, testifying to cost-effectiveness and operational excellence. PEMSA's impressive operational efficiency and Revenue-EBITDA jump of 32% and 50% resonate with the overarching theme of success and expansion that pervades Grupo México's narrative.

Earnings Call Transcript 2023-Q3

[Operator]

Good afternoon, and thank you for holding, and welcome to Grupo México's Third Quarter 2023 Earnings Conference Call. With us this afternoon are all of Grupo México's top executives who will discuss the third quarter 2023 financial performance of the company, giving you a summary of the latest news and addressing any questions you may have at the end of the call.

Before we begin, I would like to remind you that information discussed on today's call may include forward-looking statements regarding the company's results and prospects, which are subject to risks and uncertainties. Actual results may differ materially, and the company cautions not to place undue reliance on these forward-looking statements.

Grupo México undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All results are expressed in full U.S. GAAP. The presentation may be followed through our webcast. [Operator Instructions] A copy of the slides that the company will be reviewing today is available on the website at grupomexico.com. [Operator Instructions] Now I will pass the call to Ms. Marlene Finny.

[Marlene de la Torre, executive]

Thank you so much, Kathleen. Good morning, everybody, and thank you for joining us today for Grupo México's Third Quarter Earnings Conference Call. Sitting with me today are the top executives from our 3 divisions. Unfortunately, I would like to take a moment to pay due respect to Mr. Xavier Garcia de Quevedo. So no, we are not all the top executives from our 3 divisions.

So we have to pay due respect to Mr. Xavier Garcia de Quevedo, who passed away recently. We [ can't believe ] we have to say goodbye far too soon. He will always be remembered as one of the early [ shapers ] of Grupo México and most importantly, as an extraordinary leader and even a better human being. May he rest in peace. He will be missed by everybody here, I think, definitely.

So after that, I will continue to our call. So during our call, we will be following a presentation that can be downloaded from our website or followed by accessing the webcast, as [ Carmine ] mentioned at the beginning. Today's detailed program can be found on Slide #3. I will kick off with Grupo México's ESG highlights followed by the quarterly scorecard and financial highlights. Then Mr. Leonardo Contreras will provide detailed information regarding our Mining Division's main highlights, project update and comment on the industry's economic environment.

He will be then followed by Mr. Isaac Franklin, who will go through the financial results and main events of the Transportation Division. Last but not least, Mr. Francisco Zinser will comment on the amazing results of our Infrastructure Division and relevant events which occurred during the quarter. As per usual, at the end, the line will be open for questions and answers.

Before continuing with our results, I want to highlight that besides lower copper prices and some inflationary pressures, Grupo México continues to show positive results in revenues, EBITDA and net income during this quarter and the year. These good operating results allow the company to continue its growth trend, focusing on long-term investments and create a positive impact on its stakeholders.

With that being said, let me start with our main ESG highlights on Slide #5. And on our safety prevention approach, our Buenavista del Cobre unit received the ELSSA certification after a thorough audit performance performed by the Mexican Social Security Institute. This is a very important recognition for the Buenavista mine.

Touching on our innovation in water usage and efficiency. I'd like to mention that our new tailings dam filtration plant in Quebrada Honda in Peru, reclaimed around 6,000 cubic meters of water per day, making this filter press the largest of its kind in the mining industry worldwide. We continue to promote health and wellbeing this time through strategic allowances between non -- 2 non-profit organizations and Tren de la Salud of Dr. Vagón.

And continue with that, let's continue to our scorecard on Slide #6. Our cumulative revenues for the first 9 months of the year total close to $11 billion, representing an increase of 8.7% when compared to the first 9 months of 2022 and 17% higher on a quarterly basis. This was mainly due to higher copper volumes sold, good metrics in our Transportation and remarkable performance of our Infrastructure Division.

Following the same trend, our operating income and EBITDA showing gains for the first 9 months of the year, increasing 7.6% and 9.2%, respectively, when compared to the same period of last year. These increases are even higher when comparing the quarterly results of 2022 versus 2023 with both metrics improvement over 25%, despite having a higher net cash cost, which amounted to $1.2 per pound, a 6% increase on a cumulative basis.

As for production, we continue to have higher copper production on a cumulative basis. Roughly a 4% increase when compared to the first 9 months of 2022, even though we saw a slight decrease of 1% on a quarterly basis. Leonardo will dive deeper into the Mining results afterwards.

It's important to say that our Board approved MXN 1 per share dividend. This increased from the last quarter of MXN 0.8 and translates into a 5.4% implied dividend yield, which is one of the highest in Mexico.

Moving forward to Slide #7. You can find a summary of our financial highlights there. So just [ not in hand ] in case you needed at any point during the presentation. So let's continue to Slide #8. Thank you. And as you can see here, Grupo México maintained a solid balance sheet with low leverage and net debt-to-EBITDA ratio of 0.3x. This is because of strong cash generation that we have seen in all of our divisions.

As you might already know, our debt is mainly issued in U.S. dollars, representing 77% of the total debt, while the rest is mainly denominated in Mexican pesos, and 95% of our total debt was issued with a fixed rate. On this slide, you can also see the dividends paid from 2021 to 2023 and the implied dividend yield, including the MXN 1 cash dividend for the quarter approved by our Board, which translates, as I mentioned before, into a 5.4% dividend yield.

We continue to have a comfortable debt maturity profile, as you can see on Slide #9, with no payments of over $1 billion until 2025, and our cash and equivalent position ended the quarter with $6.8 billion. Now I'll let Mr. Leonardo Contreras comment on our Mining Division's performance.

[Leonardo Contreras Lerdo de Tejada, executive]

Thank you, Marlene. Good morning, everyone, and thank you again for joining us today. I will start today with some remarks on the current copper market on Slide 11. Even though the average LME copper price increased 8% in the third quarter of 2023 compared to the same period of last year from an average of $3.51 to $3.79 per pound. We continue to see uncertainty in the basic metals markets due to the slow recovery of the Chinese economy, a potential recession in Europe and the expected soft landing or minor recession in the U.S.

We continued to see very low copper inventory levels despite the [ 24 ] increase by the end of September, closing the quarter at 295,000 tonnes. On the other hand, most copper market intelligence houses are now expecting a surplus of around 170,000 tonnes by year-end. We also believe that a stronger market -- stronger-than-expected U.S. dollar is reducing metals prices, including copper, which are expressed in that currency.

It is important to emphasize again that copper plays a leading role in a global shift to clean energy, correlating positively with our assertion that the underlying demand for copper will be strong in the long term and that the current cycle of relatively low prices will be short-lived. Now let's move on with the Mining Division and move on financial highlights.

[Operator]

Please stand by for some minor background noise.

You may continue.

[Leonardo Contreras Lerdo de Tejada, executive]

Now let's continue with the Mining Division's financial highlights. First, as Marlene previously mentioned, higher copper sales volume, along with important increases in moly and silver prices, helped mitigate the price decrease of copper and zinc and allowed us to reach $8.3 billion of revenue for the first 9 months of 2023, a 5% increase when compared to the same period of last year.

Our year-to-date EBITDA totaled $4.16 billion, 5.5% higher than 2022 and 29% higher than on the third quarter basis, setting our EBITDA margin at 50%. We ended the period with a total copper production of 765,000 tonnes, almost a 4% increase compared to the first 9 months of 2022 due to an increase in production in Peru and Asarco.

On a quarterly basis, we saw a slight decrease of 1% due to lower ore grades in Cuajone, which were partially offset by a 7.5% production increase in Asarco. Increases in production costs due to inflationary pressures resulted in a 6.2% increase in net cash costs year-to-date, settling at $1.20 per pound and $1.29 during the third quarter of 2023.

Nonetheless, we continue to be the cost leader in the worldwide industry. As for our CapEx, we invested $837 million during the first 9 months of 2023. I would like to continue talking about our projects and their progress in Slides 13 and 14. Let's first talk about our short-term projects. Our Pilares project in Sonora, Mexico will significantly improve the overall mineral ore grade. We have invested around $144 million of $176 million and is currently operating and delivering copper mineral to the Caridad facilities.

In our Buenavista Zinc project also located in Sonora, we have invested most of the $416 million and have around a 99% progress. Additionally, we have initiated a commissioning process. The planned ramp-up has been pushed back to the first quarter of 2024, given that we have some technical difficulties with the concentrators. As for El Pilar, the basic engineering has been completed, and the company continues to develop environmental activities on site, while external engineering and technology corporations develop the project engineering.

Now moving on to our long-term projects. In the Los Chancas, our project in Apurimac, Peru, as of September 30, we continue to have talks with the Tiaparo Community representatives to acquire part of the land required for the project. Hydrogeological and geotechnical studies will be set up to gather additional information regarding the deposit's characteristics.

In our Michiquillay project, we continue supporting Michiquillay and La Encañada communities, social programs, while exploration activities are underway. As of September 30, 2023, we have drilled 47,000 meters and obtained 15,000 core samples, which are currently under evaluation.

On Slide 15, you can see our robust pipeline with all of our upcoming projects and their impact on production as we continue our journey to reach roughly 2 million tonnes of copper produced per year. If you happen to have any follow-up questions, we will be pleased to address them during the Q&A session. Now I will let Isaac comment on our Transportation Division.

[Unknown]

Thank you, Leonardo, and good morning, everyone. Thanks again for joining us. Continuing with the Transportation Division's results on Slide 17. I would like to talk about our financial highlights for the first 9 months of the year. First, I'm glad to announce that although having mixed results across segments, we have achieved excellent financial results, with revenues totaling almost $2.4 billion during the first 9 months of 2023, mainly driven by a strong performance of the Automotive segment.

Along these lines, our EBITDA totaled over $1.1 billion for the first 9 months of 2023, a 20.4% increase when compared to the previous year and 10.1% when compared on a quarterly basis year-over-year. This translates into a 46.2% EBITDA margin, a 60 basis point expansion year-over-year.

Continuing with the good notes, our transported volumes saw a 5.2% increase in total net tons kilometers over 1.4 million cars hauled year-to-date. Our net income totaled $373 million on a cumulative basis, a 10.2% increase when compared to 2022. Lastly, as you might already know, a dividend of MXN 0.50 per share was approved by our Board.

Continuing with the main variation of our revenue on Slide 18. As I just mentioned, we saw mixed results through our different segments during the quarter, with the Automotive segment above the rest with an increase of 47% due to volume market share gains and empty car availability, along increased imports of Asia brands. As a reminder, these variations are considering results in Mexican pesos. So this might vary using a different currency.

In relative terms, this quarter's second top performance was Metals segment, which saw an increase of 17% as we continue to see higher scrap and slab imports as well as new freight of copper cathodes. The other segments, which saw double-digit revenue growth, was Cement, where local demand in Mexico and the U.S. continue to increase new construction projects. With low growth we have at the Agricultural segment increasing 0.2% as the volume of shuttle trains from the U.S. increased due to competitive prices, but offset by a decrease in local crops due to the market price difference.

The segments which saw a decrease in revenues were Industrial with 3% decrease, mainly affected by programmed maintenance in one of the largest beer plants during the third quarter; Minerals with 10% decrease caused by the shutdown of one of the largest steel plants in Mexico and less iron ore extraction in one of the mines served by GMXT; Intermodal, which saw an 11% decrease in revenue, [ as we ] are seeing recovery in September, a slowdown in the U.S. retail markets negatively affected strong results in Mexico, propelled by new capacity and market share gains; Chemicals, as the plant relocation resulted in less acrylic acid freight and major resin companies reduced their volumes due to plant maintenance. Lastly, the Energy segment saw a 14% decrease in revenue generation as a shutdown of one of the mines served by GMXT, resulted in reduced coal volumes along with reduced fuel oil volumes due to liquidity issues faced with one of our clients.

Now let's take a look at our operating metrics shown in Slide 19. In general, metrics showed a sustained improved performance as we saw a good combination between a 4% increase in average train speed and a 12% reduction in dwell time that resulted in an improvement of 6% in car velocity during the first 9 months of 2023, settling at 288.1 kilometers per day. As for the rest of the metric, despite not showing improvement, they allow us to maintain competitiveness and provide an efficient and timely service for our customers.

On Slide 20, you can see our expected CapEx for 2024. GMXT's Board approved a plan to invest $460 million during the year for maintenance growth, efficiency and special projects. This will allow GMXT to continue with the required levels of investment for infrastructure and servicing growth.

Around 60% of the yearly CapEx will be invested in maintenance, including new rail and ties, locomotive and machinery overhauls, bridges and servicing through which we also gain efficiency, speed and reliability of our service. Our $40 million growth CapEx will be deployed for the construction of the Pesqueria branch, sales and marketing projects, siding enlargement and the Bowden Sunbeam Double Track.

For special projects, we expect an investment of $88 million, which we invest in El Mexicano Tunnel rehabilitation, the Celaya Bypass, the Monterrey Bypass and our safety program. Lastly, our expected CapEx for efficiency projects during 2024 totals $41 million, including the yards reconfiguration, digital infrastructure and telecommunication equipment. This concludes a general overview of the Transportation Division. I will now let the Francisco Zinser comment on the Infrastructure Division.

[Francisco Gonzalez, executive]

Thank you very much, Isaac, and good morning, everyone. I will start by going through the financial highlights of the Infrastructure Division shown in Slide #22. I'm proud to announce that we continue to have a solid performance during the 2023 year and generating value and growth in our different business units, with revenues increasing over 4.1% on a cumulative basis year-over-year.

All our business units have achieved significant growth at the sales, EBITDA and net profit level, and we are on track to close 2023 at record levels of both sales and EBITDA, mostly thanks to increased daily progress in our 6 drilling rigs, increased traffic volumes and inflationary tariff adjustments within our Toll Roads business unit, enhanced production levels in the Engineering business unit and the successful integration of the real estate operations into our division's results since April 19.

Our unwavering commitment to operational excellence, along with strict cost effectiveness within the Energy business unit and substantial cost advantages in our Construction business unit allowed us to increase our net income and EBITDA 70.6% and 31.6%, respectively, on a cumulative basis compared to 2022, totaling $57 million of net income and $261 million of EBITDA. On a quarterly basis, the increases are even higher, netting 140% increase in net income and 37.7% in EBITDA versus the third quarter of 2022.

To close the Infrastructure Division highlights, I would like to go through some of our most relevant events depicted on Slide #23. Perforadora Mexico, PEMSA, continued showcasing outstanding operational efficiency as of the end of the third quarter of the year with a 96.1% rate efficiency and consistent profitability improvement. Year-to-date, PEMSA has reached $152 million in revenues and an EBITDA of $77 million, a 32% and 50% increase, respectively, when compared to the same period of last year.

Continuing with the good notes, I'm pleased to announce that our toll roads achieved a 34% net sales growth on a cumulative basis as we continue to experience a steady rise in daily traffic and higher tariffs due to inflation. The business unit revenues totaled $49 million, while EBITDA stood at $33 million. Lastly, our new Real Estate business unit has established itself as one of the main drivers of growth for the division by adding $33 million in revenues and $21 million in EBITDA by the end of September 2023, where increased rental income and fees, along with improved occupancy rates, which stands now above pre-pandemic levels at 94.4% resulted in a 21% increase in revenues. That would be all for the Infrastructure Division. Now I will let Marlene give her closing remarks.

[Marlene de la Torre, executive]

Thank you so much, Leonardo, Isaac and Francisco for your comments. And thank you, everybody, again, for your time and attention. Now we will open the line for the Q&A session.

[Operator]

[Operator Instructions] Our first question comes from the line of Carlos De Alba with Morgan Stanley.

[Carlos de Alba, analyst]

Maybe Isaac, I would like to ask you, what is the impression or what is the view of the group regarding the petition of the government to run or to offer a passenger service in the existing railways in Mexico? And to what extent is this a feasible option for the company? And could it be profitable even -- first, can it be done? Second, could it be profitable? And yes, just overall, what is the company's position on this petition?

[Unknown]

Thank you, Carlos, for your question. Well, regarding that, they -- we -- it's been very public from the presidency that their willingness to run and operate the passenger trains. We're in a very early stage of that. We'll take a look. There are many studies to be conducted regarding demand and regarding the need of infrastructure and all that. So we are open to do the studies and collaborate with the government regarding that. But this -- we are in a very early stage in order to tell profitability or visibility. So we're just starting with this. And maybe in the coming months, we'll be able to comment more on that.

[Operator]

The next question comes from the line of John Tumazos with Very Independent Research.

[Unknown Analyst]

My question is whether the unit costs at the Asarco division in Arizona rose or fell? And what are the 5-year plans for capital investment and output growth in it? I'm observing that the third quarter cash costs of Southern Copper fell $0.05 or 5%, but Grupo México rose 6%, while Asarco's output rose 7.5%...

[Operator]

We lost you, John.

[Unknown Analyst]

[ Was the ] cost hike was from a mix effect or whether Asarco's costs were rising?

[Leonardo Contreras Lerdo de Tejada, executive]

Good afternoon, John. This is Leonardo. In regards to your question about the unit costs at Asarco, when you compare quarter -- on a yearly basis quarter-over-quarter, we were 1.5% below. The outlook that we have for the next 5 years is we would be investing -- in maintenance CapEx, we have around $80 million to $100 million on a yearly basis. And we have an output of copper around 120,000 to 130,000 tonnes of copper, depending on the mine plans.

However, we have several analyses that we're doing at the 3 of our units in which we are foreseeing potential expansions. One is Silver Bell, transitioning from oxides to sulfides. And then Ray, we're potentially looking at an expansion and at Mission as well. So however, we're not at a feasibility level still. So hopefully, we can have more clarity and more visibility by next year.

[Operator]

The next question comes from the line of Sofía Martin with GBM.

[Sofía Martin, analyst]

I have three particular questions. First of all, could you give us any color on production per cycle for the rest of the year 2024 and any more guidance going forward? Two, could you also explain the rationale behind the increase in the dividend source to better understand these dynamics going forward? And my last question is related to the copper market, what do you see for next year?

[Leonardo Contreras Lerdo de Tejada, executive]

Sofía, you want to just jump in real quick on the production of Asarco, which should be north of 1 16, 1 17 for this year and the guidance for 2024 should be around 1 22, 1 23. I don't know, Marlene, if you want to answer the next question.

[Marlene de la Torre, executive]

Sure. I will answer regarding dividend. I will answer regarding dividend. We saw an increase in the Grupo México's dividend because of the cash generation that we had during the quarter and the cash needs that we are expecting for the fourth quarter. So as you know, we assess that during the Board meeting and this is the decision taken at the Board level on a quarterly basis. This is as we always do it. And we decided it was a good moment to increase the dividend from last quarter and because we -- because of the cash needs and the cash generation. I don't know if that answers your question. And sorry, I didn't get your third question. It was a copper market. I would let -- I'm going to let Leonardo or Raul if you want...

[Leonardo Contreras Lerdo de Tejada, executive]

Yes, Sofía. Just -- thank you, Marlene. Just on the copper market, again, as we mentioned before, now we're seeing China is struggling to reactivate a potential EU recession and slowdown in the U.S. That gives us insight that copper prices should be around where we are at the moment, probably north of them around the 3 80, 3 90 threshold, that's what we might be expecting for next year. But we're still waiting to see if China accelerates, which is possible.

[Operator]

The next question comes from the line of Camilla Barder with Bradesco.

[Camilla Barder, analyst]

Can you hear me?

[Operator]

Yes.

[Camilla Barder, analyst]

So I have one question on Southern Copper. It has a very strong performance in the quarter. But I think that part of that may be attributed to a $100 million revenue that is not explained by core revenues. So I was just wanting to check if it could be attributed to open sales -- provisional adjustments from molybdenum or if something else? And on that, if you also could comment on your expectations for moly prices in the upcoming quarters?

And the second one on Asarco. Asarco's cash costs have increased in the quarter. But I think it's because of lower byproduct revenues, right? So if you could provide some color on Asarco's cash cost before byproducts for Q3 and also your expectation for the upcoming quarters, it would be great.

[Leonardo Contreras Lerdo de Tejada, executive]

If you may -- let me answer on the first question. Yes, well, our sales has always received adjustments on open sales for mainly copper concentrates and molybdenum concentrates. We have seen some positive adjustments through the year because prices have been recovering, particularly for molybdenum if you look at where we were a year ago and copper also. But I would say that most of the positive adjustments are coming on the moly side.

And speaking about molybdenum, I understand that you want an outlook on the market. Is that your question?

[Camilla Barder, analyst]

On price -- on your price direction?

[Leonardo Contreras Lerdo de Tejada, executive]

Mainly what we're seeing now, it's that the molybdenum market, which is a very small one. It's very small relatively speaking with the copper. The size of the copper market is 10 or even more times the molybdenum market size in terms of volume. And in the case of molybdenum, we are expecting the market to be in deficit now. And the drivers of growth in demand will be mainly the defense and aerospace industries that are requiring the kind of steel alloys that are used for -- that are consumers of molybdenum, as part of the qualities that molybdenum has been allowing to enhance hardness as well as corrosion resistance of steels.

[Francisco Gonzalez, executive]

Thank you. Let me go on to question #2, and it's basically in the increase on the cash cost related to byproducts. Not necessarily. We basically have a small accounting adjustment relative to our slack processing that we were doing in Hayden. Basically, when we had it, it took us some time to weigh and to put into stabilization, our production facility. So I think that now going forward, we shouldn't have these metallurgical adjustments. That was one of the causes. And going forward, I mean, if we compare it to the last year, the 9 months, we're basically 1.5% above last year. And what we're foreseeing for next year is we should be lower. That's what we're aiming for, to be south of those $290 per pound. I don't know if you have any other further questions.

[Camilla Barder, analyst]

No. That's it.

[Operator]

Thank you and this concludes the Q&A period. I will turn the call over to Marlene Finny for her final remarks.

[Marlene de la Torre, executive]

Just want to thank everybody for being here today, for your questions. And if you need anything, let us know. Thank you so much. I hope to see you next quarter or hear you next quarter. Bye.

[Operator]

Thank you, everyone, for your participation, and you may now disconnect.