Grupo Mexico SAB de CV

BMV:GMEXICOB

Earnings Call Analysis

Grupo México Posts Steady Growth, Plans CapEx

Grupo México reported a 3.7% increase in annual revenue to $14.4 billion, though EBITDA marginally declined by 1.4% due to inflationary pressures, settling at 48.5%. The company continues to be the lowest cash cost copper producer globally, bolstered by 2.3% higher copper production. Key infrastructure investments are on track, with a notable focus on the Buenavista zinc operations, expecting to double zinc output and generate significant jobs. Transportation division revenue grew by 17.9% to $3.2 billion with an EBITDA jump of 16%, thanks to strong automotive and intermodal segment performance. Grupo México is allocating MXN 8.6 billion for 2024 capital expenditures across segments to sustain growth and drive efficiency.

Grupo México Delivers Solid Performance Amidst Global Uncertainties

Grupo México's leadership came together to present a summary of the company's performance in the fourth quarter alongside the 2023 annual results, showing resilience amidst global uncertainties. Marlene de la Torre, together with top executives from the company's three divisions – Mining, Transportation, and Infrastructure – guided the discussion through achievements and challenges.

Exceptional Strides in Sustainability

The company made exceptional strides in Environmental, Social, and Governance (ESG) by securing a position in the top 5 performers within the Mining and Metals sector in the 2023 Corporate Sustainability Assessment, surpassing the sector's average by 122%. Their scorecard boasted a noteworthy 90 out of 100, indicating robust financial management of climate-related risks and opportunities. They reinforced their commitment to social responsibility with significant investments, including approximately $36 million in water infrastructure for Mexican communities and over $45 million in Peru, enhancing the well-being of thousands. The 'Dr. Vagón' initiative, a health train, also marked a success, traveling over 12,000 kilometers to provide health inclusion in 12 states and 39 communities.

Financial Resilience with Incremental Growth

Grupo México reported a year-over-year revenue increase of 3.7% to nearly $14.4 billion, despite market volatility. This achievement was tempered by a slight elevation in net cash costs, which reached $1.26 per pound for 2023, reflective of macroeconomic inflationary pressures. Production also saw a rise, with a 2.3% increase to around 1,030,000 tons, marking a recovery point with expectations for continued growth. The Board's approval of an $0.80 per share dividend illustrated a steady return to shareholders, averaging a 4.3% dividend yield for the year.

Copper Market Dynamics and Future Support

Surfacing from the fourth quarter, the London Metal Exchange (LME) copper price saw a moderate upturn of 2.2%, going from an average of $3.63 to $3.71 per pound, after production reductions shifted market expectations from a surplus to concerns over potential deficits. Looking towards 2024, copper prices are projected to remain stable despite uncertainties such as China's slow economic rebound, possible recession in Europe, and uncertain economic conditions in the U.S..

Fluidity Amidst Temporary Headwinds

The fourth quarter revealed several areas of contraction for Grupo México. Annual copper sales encountered lower volumes due to an increase in year-end temporary inventories, contributing to a 17% decrease in quarterly sales compared to the previous year. This was compounded by a 7.9% fall in copper sales and declining molybdenum and zinc prices. Additionally, marked-to-market adjustments shook up the quarter's sales figures, leading to a year-end EBITDA that was 6.8% lower than in 2022, totaling $5.27 billion.

Earnings Call Transcript 2023-Q4

[Operator]

Good afternoon, and thank you for holding, and welcome to Grupo México's Fourth Quarter Earnings Conference Call. With us this afternoon are all of Grupo México's top executives, who will discuss the financial performance of the company during the fourth quarter and 2023 annual results, giving you a summary of the latest news and addressing any questions you might 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. Now we'll begin with Ms. Marlene Finny.

[Marlene de la Torre, executive]

Thank you so much, Carolyn. Good afternoon, everyone, and thank you for joining us today for Grupo México's fourth quarter earnings conference call. Here with me today are the top executives from our 3 divisions. During the call, as Carolyn mentioned before, we will be following a presentation that can be downloaded from our website or through the web -- accessing the webcast.

Today's detailed program can be found on Slide #3. I'll kick off with Grupo México's ESG highlights, followed by the quarter's scorecard and financial highlights, then Leonardo Contreras will provide detailed information regarding our mining division's main highlight, project updates and comments on the industry's economic environment. He will then be followed by Mr. Isaac Franklin, who will go through the financial results and main events of the Transportation Division. And lastly, Francisco Zinser will comment on our Infrastructure division and relevant events, which occurred during the quarter. As usual, again, the line will be open for questions and answers.

So let me start by highlighting that as a consequence of our efficiency programs and investment plan, the Mining division was able to increase copper production for the year and materialize the Pilares project, which achieved full capacity during the year. Alongside these good news, our Transportation and Infrastructure division saw a relevant improvement in most of their financial metrics for 2023.

During 2024, we will continue with our intensive investment plan to our main business units, generating positive impact in the countries in which we operate and allowing continuous production growth. With that being said, let's go to our main ESG highlights on Slide #5.

Sorry, we have to -- it is very important, and I wanted to really highlight everything that we have been doing with our ESG strategy. So we have successfully positioned ourselves in the top 5 performers of the 2023 Corporate Sustainability Assessment in the Mining and Metals sector, which is surpassing the sector's average by 122%.

In addition to that, our CSA scorecard totaled 90 out of 100, including a perfect score in the [ CCS ] category, which focuses on the financial management of risks and opportunities related to climate change. On another topic, related to ESG. We doubled our social infrastructure investments during 2023. These investments include roughly $36 million, deploying water infrastructure improvements for the communities of Cananea and Nacozari, and more than 45 million installed in Peru, more specifically, [ Peñoles ] wastewater treatment plant and also in educational infrastructure benefited almost 9,000 students.

There are more highlights, so we have to keep this short. But you can go to our website. And also see, everything we have been doing with our ESG strategy and everything we have achieved. So I'm going to go now just the last highlights we have here, but there's much more to see, if you want to go through it.

During this last quarter, our Dr. Vagón initiative is successfully completed. The plant with the route of the Tren de la Salud, health train in English, providing inclusion in well-being in 12 states, 39 communities and traveling more than 12,000 kilometers.

And then I will finish with the ESG highlights and continue with our scorecard on Slide #6. Our revenues for the year totaled close to $14.4 billion, representing an increase of 3.7% when compared to 2022. The positive community result was mainly due to good metrics in our transportation and remarkable performance in our Infrastructure division, which offset a slight decrease in our Mining division.

Our EBITDA suffered a 1.4% decrease respectively, when compared to 2022 as amounting inflationary pressures continue through the fourth quarter of the year. Along this line, our net cash costs saw an increase over the year for the same reasons, netting of $1.26 per pound for 2023. We are still the lowest cash cost producer in the industry worldwide, so that's important, and we'll have the largest reserves of copper.

Our production increased 2.3% year-over-year, turning almost 1,030,000 tons during 2023. This year marks the start of our recovery in our production profile, and we expect to continue for the years to come. As for the last point on this slide, our Board approved a dividend of $0.80 per share, which translates into roughly 3.6% employee dividend yield.

[ Year 1 ] on the side. And as usual, you can find our summary of our financial highlights on Slide #7, which is there for you to have in case you need at any time during the presentation, but we already mentioned most of them. So we will continue to Slide #8.

As you can see here, Grupo México maintains a solid balance sheet with low leverage and net debt-to-EBITDA ratio of 0.3x, which is very low. The debt is mainly issued in U.S. dollars, which is 76% of the total debt. While [ our investors ] in Mexican pesos, mainly -- this is mainly from the Transportation and part of the Infrastructure division, and that's the pesos part. And 95% of our total debt was issued with a fixed rate.

We have very comfortable maturities. You can also see the dividends paid each quarter from 2021 to 2023 in this slide and implied it as yield. Including the $0.80 that we -- for this quarter or the fourth quarter that the Board approved, the dividend yield for 2023 was average 4.3%.

We continue to have a comfortable debt maturity profile, as pictured in Slide #9, which we mentioned very quickly with loan payments of over $1 billion until 2035. And our cash and equivalent position ended the year with $6.6 billion. Now I will let Leonardo Contreras comment on our Mining division portfolio.

[Leonardo Contreras Lerdo de Tejada, executive]

Thank you, Marlene. Good afternoon, everyone, and thank you again for joining us today. I will start today with a brief remark on the current copper market on Slide 11.

During the last quarter of 2023, the LME copper price increased 2.2% from an average of $3.63 per pound seen in the fourth quarter of 2022 to $3.71. After a significant production reduction announced by some producers during the fourth quarter of 2023, market expectations for a surplus seen at the beginning of last quarter ceased and were replaced with concerns about potential deficits due to the extremely low availability of inventories.

We believe copper prices should have good support throughout 2024 despite some still existing uncertainties, such as the slow recovery of the Chinese economy, a potential recession in Europe and a soft landing or minor recession in the U.S. Now let's continue with the Mining division's financial highlights on Slide 12.

As Marlene previously mentioned, we saw a slight decrease of 1% in revenues during 2023. And the reason behind this was lower copper and zinc prices, 3.7% and 24%, respectively, offset by higher molybdenum prices, along with an increase in copper and molybdenum volume sales. It is also important to mention that annual copper sales were affected by lower sales volume during the fourth quarter due to an increase in temporary inventories at the end of the year.

On a quarterly basis, we saw a 17% decrease versus the fourth quarter of 2022. And this decline is a result of a 7.9% decline in copper sales that accounts for $48 million and the decrease in the molybdenum and zinc prices that translates into $80 million.

In addition to this, fourth quarter sales were impacted by a $379 million mark-to-market adjustment in open sales contracts due to variations in metal prices at the end of the period. Our year-end EBITDA totaled $5.27 billion, 6.8% lower than 2022, setting our EBITDA margin at 48.5%, and this was mainly due to $107 million drop in sales caused by the aforementioned reasons, an increase in cost of sales and exploration expenses of $142 million and the decrease in other income variations of $134 million.

Now moving on to production. A 9.5% increase in Peru, along with a 5.9% increase in Asarco, offset the [ 2.9% ] decrease in our Mexican operations and allow us to end the year with a total copper production of 1,029,853 tons, a 2.3% increase compared to last year.

During 2024, [indiscernible] we exit production by 28,700 tons of copper and roughly 54,000 tons of zinc. I would like to add that during the second half of 2023, we experienced a reduction of freshwater in our Buenavista operation caused by the lack of permits, which we expect to receive to build a pipeline that transformed -- that transports water from the well to the operations and the nearby town sides. For this year, we have decided to transport water through other means to secure the needed supply, which we will ensure that Buenavista is able to operate at full capacity, both in copper production and the start of the zinc operations.

On our quarterly production, we saw a decrease of 1.9% due to lower ore grades in Buenavista, which was partially offset by a 14.5% production increase in Toquepala. In terms of production cost, due to inflationary pressures on byproduct credit reduction resulted in a 23% increase in net cash costs year-over-year, settling at $1.26 per pound and $1.43 during the fourth quarter of 2023.

The main elements that drove the cost increase, as we mentioned in our press release, were labor, maintenance, materials and contractors, as well as a reduction in sulfuric acid by product credits. It is important to say that we continue to be the cost leaders and have the largest copper reserves in the industry worldwide.

As for our CapEx, we invested nearly $1.1 billion during 2023. I would like to continue talking about our projects and their progress in both Slide 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 during mixing the expected 0.78% ore grade from the project and the 0.29% ore grade from La Caridad. Pilares is fully integrated into our operations and is delivering copper ore to La Caridad concentrator according to plans. So this will be the last time that we report Pilares as a project.

As per our Buenavista zinc project, we have invested most of the $439 million capital budget and have a 99% progress. This year, we expect to produce over 54,000 metric tons of zinc and 11,000 tons of copper at this facility. Once we finish the full ramp-up, this will double our zinc production capacity and will generate over 2,000 jobs on the operating front. At year-end, the project was materially completed and the ramp-up of the plant began in the first quarter of 2024 after technical adjustments to the mill.

In regards to Tía María, we foresee that the start of the activities in the near future will generate significant economic opportunities for the province of Islay and the Arequipa region. We believe it is essential to move forward with projects like Tía Marí with an estimated $1.4 billion capital budget to stimulate a sustainable growth cycle in Peru. Now let's continue with our long-term projects.

In Los Chancas, our project in Apurimac, Peru, the company has successfully engaged with the Peruvian authorities in an effort to eradicate the illegal mining activities at our concession and we have made significant progress. We will restart the environmental impact assessment and conduct a time on drilling campaign once these activities have ceased.

Finally, at our Michiquillay project. As of December 31, 2023, we have drilled 63,000 meters of a total campaign of 110,000 and have obtained over 20,000 core sample for its chemical analysis. Geological modeling, cross-section interpretation and drilling logging are underway.

Additionally, the company continues working within Michiquillay and La Encañada communities following the guidelines of the social agreements signed with them. On Slide 16, you can see our robust pipeline with all of our projects and their impact on production that will materialize in what we believe will be the best market yet for copper prices. 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.

[Isaac Franklin Unkind, executive]

Thank you, Leonardo, and good afternoon, everyone. Thank you 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 year.

During the last quarter of the year, we faced several challenges outside of the company's control. But due to a strong operational performance and volume growth, we were able to show positive valuations in revenue and EBITDA for the full year. We are ready to capitalize on additional volumes this year as a result of investments and infrastructure expansion we have seen in several segments. I am glad to share that we were able to see new volume traffic both on the Intermodal and Automotive segments, and we announced the signing of the joint venture of the rail ferry with Genesee & Wyoming, which will improve our connectivity in regions where important event and investments are being deployed.

As we mentioned in the GMXT call, we had also had a formal sign-off of the [ Cafaro Mediawan]. Now touching on the main tailwinds we had during last year. But what's most relevant, as you all know by now, what the situation with migrants and border shutdowns as well as the currency exchange that impacted results.

First, I am glad to announce that [indiscernible] having mixed results across segments. We have achieved excellent financial results with revenues totaling almost $3.2 billion during 2023, a 17.9% increase when compared with 2022. This was mainly driven by a strong performance of the Automotive and Intermodal segments.

Along this line, our EBITDA totaled over $1.4 billion for the year, a 16% increase when compared to 2022 and 3.2% higher when compared on a quarterly basis year-over-year. This translates into a 44.8% EBITDA margin, a 70 basis point contraction year-over-year.

Continuing with the good notes, our transported volumes saw a 3.6% increase in total net ton-kilometer with close to 1.9 million cars hauled during the year. Our net income totaled $482 million on a cumulative basis, in line with 2022's results.

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 submit results to our segment -- different segments during the quarter, with the Automotive segment above the rest with an increase of 26%, due to empty car availability along market share gains and increasing imports of Asian brands.

As a reminder, the evaluation and considering results in Mexican pesos, so this might vary using the different currency. In relative terms, this quarter's second top performance was Intermodal segment, which saw an increase of 13% as we saw in auto parts and cross-border freight with domestic volumes growing substantially with the incremental fleet and terminal expansion. With lower growth, we have the Agricultural segment increasing 5% as the volume of shuttle trains from the U.S. increased due to competitive prices, but offset by a decrease in local crop demands at the U.S. Mexican border closing.

The segment which saw a decrease in revenues were Minerals with a slight decrease of 1% due to lower mineral reserves on 1 of our -- of the major mines and a decrease in copper ore imports. Energy, which declined 4%, mainly due to the decrease in fuel oil volume, a trend that has been reverted during 2024 with refineries operating at or above 90% capacity. Demand also with a 4% decrease due to U.S. border complication. Industrial with a 6% decrease mainly affected by lower new rail car and wood freight due to border issues, which offset strong results in paper and metal was the only segment decreasing in double-digit numbers.

The 14% decrease was mainly due to less scrap imports lead to less demand and decrease in copper ingots rate due to a major oven maintenance. Now let's take a look at our operating metrics shown on Slide 19.

In general, metrics showed a sustaining growth performance during the year as we saw a good combination into a 2% increase in average train speed and a 4% reduction in dwell time. That resulted in an improvement of 1% in car velocity settling at 280.3 kilometers per day. As for the rest of the metrics, despite not showing improvement, they allow us to maintain competitiveness and provide an efficient and timely service for our clients.

On Slide 20, you can see our expected CapEx for 2024. GMXT's Board approved a plan to invest MXN 8.6 billion or $490.5 million during the year for maintenance growth, efficiency and special projects. The reason why you see higher CapEx in U.S. dollars is due to exchange rates, since we purchased it in Mexican pesos. This will allow GMXT to continue with the required levers of investment for infrastructure and service improvements. Around 63% of the yearly CapEx will be invested in nonpayment, including new rail and ties, locomotive and machinery, overhauls, bridges and services through which will also gain efficiency, speed and reliability of our reserves.

Our 51% million growth CapEx will be deployed for the construction of the Pesqueria branch, sales & marketing projects, siding enlargement or the Bowden-Sunbeam Double Track. For special projects, we expect an investment of $92 million, which will be invested in the El Mexicano Tunnel rehabilitation, the Celaya Bypass, the Monterrey Bypass and our safety program.

Lastly, our expected CapEx for efficiency projects during 2024 totals $44.3 million, including yard reconfiguration, digital, infrastructure and telecommunication equipment. This concludes a general overview of the Transportation Division. I will now like Francisco Zinser comment on the Infrastructure division.

[Francisco Gonzalez, executive]

Thank you very much, Isaac, and good afternoon, everyone. I will start by going through the financial highlights of the Infrastructure division shown in Slide 22. I am proud to announce that we continue to have a solid performance throughout 2023, generating value and growth in our 7 business units, both EBITDA and sales, with consolidated revenues increasing 7% year-over-year on a cumulative basis, thanks mostly to increased daily products in our 6 drilling rigs, larger traffic volumes and inflationary tariff adjustments with our toll roads business units, enhanced production levels in the engineering business unit and the successful integration of the real estate unit into our division 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 57.6% and 25.8%, respectively, on a cumulative basis compared to 2022, totaling $57 million of net income and $337 million of EBITDA.

It is important to mention that both sales and EBITDA figures are historical records or all-time highs for our Infrastructure division. To close the Infrastructure division highlights, I would like to go to some of our most relevant events depicted on Slide #23.

Perforadora Mexico, our oil rigs business unit continued showcasing outstanding operational efficiencies through the end of the year with a 97% rate, which coupled with cost reductions, resulted in a consistent profitability improvement. For year-end 2023, Perforadora Mexico reached $206 million in revenues and an EBITDA of $102 million, a 37% and 55% increase, respectively, when compared to 2022.

Continuing with the good notes, our Toll Road business unit net sales totaled $67 million on a cumulative basis, a 32% increase when compared to 2022 as we continue to experience a steady rise in daily traffic and higher tariff due to inflation. The business unit EBITDA totaled $45 million, showcasing a $45 million in overall profitability of our Toll Road business unit.

Lastly, our new real estate business unit has established itself as a key growth -- as a key contributor of growth, sorry, for the division, adding $51 million in revenues and $32 million in EBITDA by the end of 2023. These are only the consolidated numbers as the numbers on a full year basis are larger. This translates into an increase of 19% in revenues, when compared to the same period of last year, due to increased rental income and higher occupancy rates, which nowadays stand above pre-pandemic levels at 94.5%.

That will be all for the Infrastructure division. Now I will let Marlene give her closing remarks.

[Marlene de la Torre, executive]

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

[Operator]

[Operator Instructions] And it comes from the line of Regina Carrillo with GBM.

[Regina Carrillo Villasana, analyst]

Given your free cash flow generation, it looks like by the end of 2024, you might enjoy a net cash position. And I wanted to ask you, Marlene, how are you planing to prioritize the allocation of this cash going forward?

[Marlene de la Torre, executive]

Thank you so much for your questions, Regina. As you know, we are always looking for projects and we are always looking for opportunities in terms of M&A and inorganic growth, as well as our own organic growth in developing our own projects and deploying our CapEx. And that would mean growth for the business we're involved with.

Now it's interesting that you've mentioned the word priority. In your question because what I can tell you is that given the discount we see today by some of the parts of our businesses, the conversation of our buybacks is starting to become more important. This is obviously, as we have mentioned before, something that our Board has to decide as well as the dividend, but it's becoming more important. And we're finding few places where deploying capital will be as efficient as before. So we will try to keep on looking for opportunities and good opportunities at reasonable valuations, and we'll continue to deploy our CapEx to continue our growth plans, as we were mentioning before.

And we will also look at other opportunities or not opportunities, but other tools such as buybacks are review our plans and strategy there. I hope that answers your question.

[Regina Carrillo Villasana, analyst]

Perfect. And if I may ask a follow-up question. Is there anything you can tell us about the Las Cruces project in Spain, the one that First Quantum is rumored to be selling? .

[Marlene de la Torre, executive]

Sure. I don't know, Leonardo or Raul, if you want to answer this question? .

[Leonardo Contreras Lerdo de Tejada, executive]

Yes, Marlene. This is Leonardo. Hello, Regina. I mean, first of all, I mean, we have a robust team of individuals analyzing M&A opportunities. I don't know about Las Cruces. It doesn't look relevant for Grupo, and I don't think there's any further comment on that asset.

[Operator]

It comes from the line of Alfonso Salazar with Scotiabank.

[Alfonso Salazar, analyst]

I have 2 questions. One, the first one is regarding -- it's a follow-up on the water situation at Buenavista. I asked the question during the Southern Copper Conference Call. But then I realized, I want to understand the -- what's changed? And how are you sourcing water for Cananea before? And why this new pipeline is necessary? Is it because of more water required for the Buenavista zinc operation? Or is it that you are changing the well from where you are sourcing the freshwater? So just want to understand what changed?

The second question I have is regarding the Transismic railway. I understand that the Mexican government brought some locomotives from them from the U.K., locomotives and trains. And so is this -- I believe they are in diesel. But on the other hand, I think the government says that they want to use more electric trains going forward. Just want to know -- to understand first, what is happening there and the implications for your operations? Is it positive to this Transismic will bring more volumes for your Ferrosur operations, for example? Or how do you see that? And also regarding the use of diesel locomotives instead of electric locomotives for the Transismic?

[Leonardo Contreras Lerdo de Tejada, executive]

All right. If you don't mind, Marlene, and everyone, I will take the first one. This is Leonardo. In regards to your follow-up question as of the water at Buenavista. Basically, what changed? I think last year, we have an extraordinary year of less rain water. And coupled with that, we were expecting to receive a permit that would let us just put a pipeline from our wells that we currently have and that they are fully permitted by the water authorities in Mexico. And this is just a permit that we need to put the pipeline. I do think that we might have been a bit optimistic and we were waiting for the permit to come.

Once we realize the permit was, I mean, we haven't received the permit, then that's why we looked at other ways of moving the water. Let me just be very, very clear, and we are not requesting any additional concessions. These are our current conditions. And basically, it's fully permitted. We just need -- it's called a [indiscernible] to put the pipeline. And right now, what we will do is bypass it through other because it's fully permitted. I don't know if that answers your question.

[Alfonso Salazar, analyst]

Yes, that's very helpful. So no -- you don't need more, a new water concession. Just a follow-up on this. When do you expect the secondary law in which this -- the new law that requires the mining concession to have a water concession exclusively for what, for mining activities to be in place?

[Leonardo Contreras Lerdo de Tejada, executive]

I think it will be very aggressive in my part to give you an opinion. I don't think that there's a lot going on. So we might prefer to remain looking at how the situation evolves before we do any comments.

Regarding the Transismic line, but we are operating in normal as the regular operation and there's no infrastructure to run any electric trains over there. So everything will run on a diesel electric as we are running. We are servicing the [indiscernible] as we used to. We are using our traffic right and serving our customers. We were doing that before. So there's no intention at this point to run electric on the Transismic line.

[Operator]

[Operator Instructions] I'm not showing any further questions in the queue, sir.

[Marlene de la Torre, executive]

Thank you so much, everybody, and thank you, Carolyn. In case you have afterwards another question, let us know, we will keep in touch, and thank you for your time. And thank you, everybody. .

[Operator]

With that, we conclude our conference. You may now disconnect.