SLC Agricola SA

BOVESPA:SLCE3

Earnings Call Transcript 2022-Q1

[Rodrigo Gelain, executive]

This video conference is being recorded and will be available from the company's IR website, where you will also find the PowerPoint. In case you need translation, we have this tool available. Just click on the globe mark with interpretation that you find on the lower corner of the screen. There, you can choose your preferred language, Portuguese or English. For those listening to the video conference in English, you have the option to mute the original audio in Portuguese by clicking on mute original audio.

As for the Q&A, we suggest that you submit your questions using the Q&A button in the lower part of your screen. Your names will be announced so that you can ask your question in the air. At that time, you will be prompted to activate our microphone. If you prefer to have your question read, please write "No Mic" at the end of the question.

We would like to let you know that the information contained in the presentation and any statements that may be made during the conference relative to the business outlook, projections, operational and financial targets of SLC Agricola are based on the beliefs and assumptions held by the company's management as well on information that is currently available. Considerations about the future are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events. As such, they depend on circumstances that may or may not occur. Investors should understand that general economic conditions, market conditions and other operating factors may affect SLC's future performance, leading to results that materially differ from such considerations about the future.

With this, I would like to hand it over to our CEO, Mr. Aurelio Pavinato, who will begin the presentation.

[Aurelio Pavinato, executive]

Thank you very much, Gelain. Good morning to all. We would like to thank you all for joining us on the 1Q '22 earnings conference call of SLC Agricola.

Please, let's move to Slide 3 for some comments on the cotton market. The first quarter of 2022 was characterized by growing cotton quotes in the international and domestic market, a scenario of global logistic hurdles, coupled with resilient consumption, has been an important support factor for the maintenance of high commodity quotes internationally. Consumption of global fiber is expected to grow to 124.1 million bales according to USDA estimates, which is the highest level in the historical series. This has led to a deficit in supply-demand balance for the second consecutive year, representing approximately 3.9 million cotton bales in USDA's estimation.

Now we turn to Slide 4 to speak about soybeans. Soybean quotes in CBOT spot contracts and the prices paid for the oil seed at the Paranagua/CEPEA base continued to appreciate over the first quarter of 2022. The highs observed in Chicago plus the premiums and the exchange rate depreciation allows soybean quotes to reach levels that surpass those observed in the previous cycle.

In a quarter that was marked by losses caused by the adverse climate conditions in southern states of Brazil, the domestic production shrinked approximately 11% in relation to the previous season. This according to CONAB data. For the 2021, 2022 crop year, production of approximately 122 million tons of soybean is expected. This number is 21 million tons short of the initial expectations of 143 million tons of production. Globally, for the '21, '22 crop year, consumption is expected to outstrip production by approximately 11.2 million tons. This happens in the wake of the negative balance of 18 million tons, also observed in the 2019, 2020 cycle, effect that should sustain our price levels.

In Slide 5, we have some comments for you on the outlook for corn. Corn spot prices in CBOT and in the domestic market showed significant volatility over the first quarter of 2022. Throughout April, the trajectory favoring price increases was consolidated on the American stock market with the release of the report of intentions to plant in the United States. And this planted area is expected to decrease approximately 4%, resulting in an estimated acreage close to 89.5 million acres. Another key factor contributing to the increases was the unfolding of the Russia-Ukraine conflict. Ukraine is the world's fourth largest corn exporter.

Problems arising from this conflict can exacerbate the uncertainty around grain supply, spiking the demand for exports from other countries. Among them, Brazil, which is the second largest global corn exporter. And on the world stage, for the first time in 5 years, production volume will be higher than consumption, a surplus of approximately 28 million tons. However, there are some uncertainties related to the availability of Ukraine's '21/'22 crop and also some questions about the final yield in Brazil since some regions were under water stress in Mato Grosso in March and April. This will result in even firmer prices for the commodity.

Let's turn now to Slide 7, focusing on the company's recent corporate governance initiatives. We are working very hard on ESG. The company is using all of its resources to make its activities sustainable and responsible. SLC adopts the world's best practices to create a positive impact on environmental and social issues where we operate.

Through low carbon production, SLC is contributing to minimize climate change and acting in alignment with its big dream. We highlight that the company was included in the Carbon Efficient Index and the Great Place to Work Index in the end of 2021. The Carbon Efficient Index is composed of companies that adopt transparent practices with respect to their GHG emissions. As for The Great Place to Work Index, it comprises companies with certifications and that are considered to be the best companies to work for international ranking. The updated version of our integrated report is now available on the company's website. Please feel free to download this document. It compiles all of our ESG initiatives.

And lastly, in this section, on Slide 8, we would like to share with you the fact that SLCE3 is now on the IBOVESPA. In May '22, the company was added to the IBOVESPA Theoretical Asset Portfolio, B3's main indicator. This is the first time the company's shares appear on the index since its listing in June 2007.

And now I turn the floor over to my colleague, Rodrigo Gelain, Financial and Investor Relations Manager for comments on the main indicators which are connected to the pillars of financial soundness and shareholder value.

[Rodrigo Gelain, executive]

Thank you very much. Mr. Pavinato. We can now go to Slide 10 with some highlights of our income statement for the first quarter 2022. In the name of comparability, data for 1Q '21 reflect a combination of data released by SLC Agricola and by Terra Santa Agro in these periods.

Our net revenue in the quarter grew 96.3% in comparison with the same period of the previous year, a substantial hike that was due to the increase in unit prices for all crops. Additionally, all crops had greater volumes sold, highlighting soybean, which was the result of the company's sales strategy. And in the case of cotton, we had some volumes from the previous crop that were still being shipped. Adjusted EBITDA in the quarter reached almost BRL 1.3 billion, up 176.5%. The adjusted EBITDA margin was 52.3%, growing 15.2 percentage points compared to 1Q '21. The increase in gross profit was the principal variation with an increase of 886.8% ex biological assets. In addition, we had an EBITDA additional adjustment of BRL 1.4 million related to the sale of 39 hectares in the Paiaguas Farm to Kothe Logistica, as disclosed in material fact on February 17, 2022.

Net income grew by 152.5%, ending the period in BRL 797 million with a net margin of 33%. The main factor that contributed to this variation was the improvement in margins and the increased volume of cotton and soybean shipped.

Now we can advance to Slide 11, where we will present the net debt. We ended the first quarter of BRL 2,006,000,000. This represents a reduction of BRL 387 million compared to the end of 2021. The net debt reduction reflected mainly the period's cash generation.

To conclude this session, we go now to Slide 12. The good results of the company in recent years with strong free cash flow contributed to maintaining an adequate level of leverage. And on May 18, we will be paying dividends to our shareholders in a total of BRL 504.4 million, which represents 50% of the adjusted net income of the parent company, representing a dividend yield of 4.8%.

I will now turn it back to Pavinato, who will talk about the outlook for the '21/'22 crop year.

[Aurelio Pavinato, executive]

Okay. Please let's go to Slide 14. On the operational side, we ended another soybean season with record yield for the fifth consecutive year. This is 33.1% higher than the national average, as reported by CONAB. Since the '17/'18 crop year, despite weather instabilities and throughout the years, we have managed to maintain increasingly higher yields, leaving the national average well behind costs. This is the result of the company's mature land portfolio, crop rotation, varieties, soil management, geographical diversification and of a very well-trained team; in summary: processes, technology and people. We finished planting cotton, both first and second crops and off-season corn within the ideal window.

In terms of yield for the other crops, in Slide 15 we show our current estimates for the '21, '22 season. In keeping with our commitment to transparency, we are adjusting the estimated use of cotton first and second crop and second corn crop. For first crop cotton rising from 1,871 kilos per hectare to 1,807, 3% down, 3.4%. Second, crop cotton adjusted from 1,800 kilo hectare to 1,642 kilo, a 9% decrease in relation to budget. The second crop corn estimated yield changes from 7,786 kilo per hectare to 7,188 per hectare, that is down 6.8% lower than budget, but 22.5% higher than the previous harvest and 30% higher than the average national yield.

We had deficit rainfall in 3 farms in March and April in Bahia. The rainfall deficit in Western Mato Grosso at the same time is affecting the potential yield of the second crop cotton and corn in that region. This is the reason why we are reducing our projections.

On Slide 16, we present our updated hedge position. We have made advances in our hedge position for the 2021 crop year, reaching international price levels that are offsetting the increase in costs. This will preserve margins for 2022, just like in '21. Additionally, we have made progress in the hedging for the '22/'23 crop season by purchasing part of the inputs. We have so far acquired 83% of the needs for chloride potassium, 49% of phosphate, 70% of pesticides. Nitrogen was not purchased yet, but consumption occurs only at the end of the second half of 2022.

Considering the confirmation for '22, '23 and the prices we have locked in via hedging together with current prices and future commodity prices, we estimate an EBITDA margin in very high levels for the coming year.

Thank you very much. And with this, we open the Q&A session.

[Rodrigo Gelain, executive]

[Operator Instructions] Our first question is from Gabriel Barra, Citibank.

[Gabriel Coelho Barra, analyst]

I have 2 questions. The first of them focusing on the inputs for the '22, '23 crop years, as you have said in the release, you are really quite advanced as one should expect. And you're in the same level as in the previous quarter. However, there is a window of time in which you can start purchasing the input. But my question is about how this will be done in the market. I would like to understand how this will occur. We know that some distributors are accelerating the sale of fertilizer, some producers, some growers are making advanced purchases. So what do you envisage for this dynamic? What about nitrogen, what about the supply? Are you concerned about supply and availability? And what is the potential impact of this on your margins for the next crop year? And as we saw in the results, with this single acquisition and looking to the future, what other new avenues for growth can we expect you have been investing in seed production, we could also think of the spinoff. Could you please explore avenues for growth? It would be great to get a little more color on this.

[Aurelio Pavinato, executive]

Thank you very much, Gabriel, for the question. About fertilizers and inputs, well, as for -- we know that the crop protection market is doing business as usual, even though there is an influence of China, but we don't believe there will be a bottleneck in getting what we need. We don't believe that we'll have any shortages for the next crop year.

As for fertilizers, when we look to the world market and to Brazil, we are 4 months into '22, and Brazil has imported 11.1 billion tons of fertilizer, higher than last year. So there is a market. Ships are arriving in spite of the war. Russia is shipping fertilizers. So in our vision, Gabriel, fertilizer supply won't be a problem this year. The problem is the prices fertilizer is fetching. We used to have a level of $300 to $400 per ton. With the pandemic with high demand and shrinking supply, those prices doubled to $700 and $800. And now with the war in Ukraine, prices have increased by threefold, $1,000, $1,200. So now nitrogen, which is what's left on our buying list has dropped 14%. It had reached $95 FOB in Brazil, and now it's at $740 approximately. So we believe that there will be price adjustment for this input together with other products. Phosphorus has decreased 7% from peak prices and potassium is 3% down at now $1,040. We are now in phosphorus $1,205 for premium phosphorus. So prices are high. We believe that there will be price adjustments a long time because we will see shrinking demand.

Demand is now being estimated in Brazil at 9% to 10%, and it's estimated that there will be a decrease from 10% to 15% in the world. Demand has always been more sluggish when prices are too high. So it's a natural consequence. And this will help -- these adjustments in supply vary significantly. So with the slower demand and the tighter supply, the market will naturally adjust. This is what we expect for the year. And this is what will enable us to have lower production costs than we have now, ensuring, therefore, the adequate margins for next year because prices are also much higher.

Prices are very high. The prices on the future markets are not as high, but the ones that are being realized in the current crop year that has already been hedged, we're getting higher spot prices than future prices.

So considering the conflict and the conditions in Russia and Belarus, the volume that both of them make and export when we think of potassium, then we can know that they're really prominent in the market. They represent 30% of the world's production and 40% of world's exports. But now when the subject is phosphorus and nitrogen, they account for 6% of the world's production with 10% to 12% of exports in the world. So with the downward adjustment in consumption, and this is taking place in Brazil, a country where adjustments should be theoretically less. It's not the same as countries like Argentina and the United States or even Russia and the Ukraine, where the soil is so fertile and this gives them the ability to save on fertilizer. So we don't think that will be a strangle hold. What we see is an adjustment along the year.

As for growth, Gabriel, you know the Ag business, right? Sometimes simply not possible to have a major growth project in every single year. So we are producing corn, cotton and soybean. So we expect and we hope to continue growing through lease land and some acquisitions, and we continue to grow, and we continue to generate cash that will fuel our growth. It's not a linear growth curve and -- and sometimes opportunities do not emerge when everything is going well. Sometimes they appear when things are looking down. But we need to be prepared strategically to seize the right opportunities. So we'll continue to grow. And in the medium term, we will maintain the pace of growth we have achieved in recent years. But in addition to growing our business and seeing more maturity in our operations, we're also expanding in new businesses. The seed production project is something we have already talked to the market about and we are just waiting for the end of the harvest season. We have signed an agreement outsourcing with Kothe. They will build a plant in Mata Gross for us to produce 1 million more bags. So it's going to be a big business for us. In addition to soybean seeds, we'll have cotton seeds. We will produce 900,000 bags this year.

So the issue here is whether to make the spinoff or to maintain everything in integration. For now, we are keeping it in integration because of the synergies. We believe that like this, we'll add more value than if we make the spin off. However, we're not saying that depending on the opportunities that arise, we might not change that option. We are investing in a fifth product, which is cattle. This year, we are working on 35 head of cattle. Last year, we had 28,000 head of cattle. This is our fifth product line. And as I said, cash generation is performing very well. Our leverage is low. So we are well poised to enjoy new business opportunities and to continue growing the company in the future.

[Rodrigo Gelain, executive]

Our next question is from Lucas Ferreira, JPMorgan.

[Lucas Ferreira, analyst]

Firstly, in relation to the guidance on margin from 31% to 39%. What's implicit in each scenario? Let's do an exercise here. If fertilizer prices and commodity prices remained stable, do you think we should hit 31% or 39%. I'm trying to understand what spot prices represent in this range. And secondly, about capital allocation, with the very low leverage, are you thinking of buyback, operations or dividend payouts? Can we expect this in the short term? And just to follow up on the last question in which you discussed growth opportunities, considering your size, wouldn't it make sense to have a JV to make corn-based ethanol because one of the difficulties there is to have a constant source of biomass, maybe it would make sense for you to develop a project like this?

[Aurelio Pavinato, executive]

Thank you so much, Lucas. Well, this margin range -- in the current scenario, what will determine if we're going to be at the low or high side of the spectrum? Yield, in one word, because we had a complete or full crop last year. And this year, we are not having a full crop in cotton. When we have the full crop in the 3 products, even with high production costs, we can maintain our margins at a higher level. So that's why we are talking about a range. There are many open variables.

Production costs, as I have mentioned, it's possible that those costs will drop with every $100 slash out of a drum of fertilizers, they were at such high prices that it's quite likely to see -- that we'll be seeing a reduction, cost reductions of this magnitude. So when we think about the coming year, well, there's still a lot in store for us. Many things are up in the air. But if the current scenario is maintained, what would really make the difference is whether we have a full crop or not.

In relation to dividends, our policy has been to pay out 50% of our adjusted EBITDA. The dividend yield, and this is something we have been doing since 2015. Dividend yield has been 5.7% in average, this year 4.8%, which is well based on the dividend payout date. And with this perspective of continuing to grow and continuing to drive more net income, we believe that the dividend yield will continue to be high or maybe the stock price will go up and the dividend will shrink a little bit or it's going to be a high dividend yield. Either way, the scenario is very positive for our shareholders, whether they bet on the dividend yield or when they want our stock to appreciate.

Buyback is always a possibility. We have a buyback program. It's an opportunity to allocate capital. So considering our current business and the fact that 2/3 of our land is leased, 1/3 is owned, considering our EBITDA, when we consider the net value of our assets, we are now priced according to NAV, which was BRL 48 per stock, not considering the appreciation of the land that will probably take place this year.

So it's a very favorable situation in terms of appreciation of our assets. Our plans don't get rusty. In fact, they appreciate in price. I'm talking about the 22 farms. And this is a striking difference between ag business and industrial businesses because a long time, everything becomes rusty and depreciates, but this is not our case. Our asset base only appreciates in value. So if you compare buyback -- we will compare buyback with new projects and new opportunities. We have some alternatives to allocate capital and buyback is one of them.

As for ethanol, Brazil is becoming a huge player in corn-based ethanol. We could never have imagined that Brazil could take such a position. But now -- in fact, it's gaining market from sugarcane-based ethanol, but it's all about the opportunity and the return on investment. So we are thinking of working with high efficiency in our operations. So we're always considering the return on investment and comparing it to the current return on investment. And today, Brazil plants 52 million hectares of land on first crop cultures and then the second crop with another 22 million hectares. Just the first crop represents a huge amount of ag production. In the next 20 years, we'll continue to grow 1 million hectares more every year because Brazil has to meet the world's demand for ag commodities. So as a strong player in this sector, we will enjoy growth opportunities in the near future. So it's a range of opportunities, and we have to allocate our capital where the greatest return on investment lies.

[Rodrigo Gelain, executive]

We have a question from Guilherme Palhares, Bank of America.

[Guilherme Palhares, analyst]

We have 2 questions, and we would like to follow up on Gabriel's question. Firstly, about the volume sold in the quarter, very high volumes. Is this driven from the Terra Santa in corporation to the company? And what part is SLC, what part is coming from the new operation? And about your yield perspective, well, we know that the forecast for May in Mato Grosso is still uncertain, there is some unpredictability. So do the adjustments you have recently made consider this scenario, more stress scenario? And secondly, in relation to your use of fertilizers, you have talked about reducing the use of fertilizers. And I would like to understand how much of this reduction depends on soy reserves, and how much is coming of this reduction from the digital projects of the company?

[Aurelio Pavinato, executive]

Okay. Gelain will start answering.

[Rodrigo Gelain, executive]

Well, thank you very much Guilherme. About the volumes, we acquired Terra Santa and all of its production. So we sold their volume last year. We continued to sell their volume this year. Now the bulk of volume this year is due to 2 reasons. We had higher yield than expected in soybean and there was the cotton carryover from last year that was not marked all in 2021. So it was projected that we would be shipping this cotton last year, but it was shipped only in the first quarter 2022. That's why volume surpassed our expectations for the first quarter.

About the sources of our productivity and yield, in the numbers we have just disclosed, we are considering that there will be rainfall in May and we have a forecast of rain both in Maranhao and Mato Grosso, and everything is looking great in Maranhao.

Now in Bahia, there is low rainfall. This has been consolidated. We have accounted for those losses. It's already calculated in Maranhao. We have a high potential that if there is rainfall, we will reach even higher peak yield. And in Mato Grosso, in Perdizes where it's dryer, we're considering that there will be rainfall. If there is no rain fall in May, then maybe you will have to adjust yield.

As for the use of fertilizers, precision farming, well, for the past 5 years, we have intensified our application of variable rate and precision farming. Since we are not opening new land, our land is mature. We have cotton and soybean. Where we plant cotton, the soil is very fertile. And what is the nutrient that is important for the soil? It's phosphorus. So this is the only possibility we have to save on fertilizer without sacrificing yield, using the phosphorus in the soil. So this is -- we are doing this operation as a standard and the reduction this year will be very consistent and uniform for us to use up the soil stocks of phosphorus. This is our strategy, considering that in the near future -- well, when we look at prices, prices for fertilizer in the last 3 years, they were cheap. They were below the standard prices. And we -- for the last 2 crop years, we used a fertilizer to build up our stocks. But now we're going to get this phosphorus and how -- and maybe next year, we'll be able to use fertilizer as usual once fertilizer prices go back to normal.

Next year, we'll be able to apply fertilizer as usual. And this is part of the agriculture logic in low -- in years where prices are low, you build up your soil stocks. And this is part of our management strategies and something that enables us to maximize our results and use of inputs.

Now digital agriculture, what we are getting from it is savings in crop protection. We are investing in localized application of past sites. We firstly build the heat map and then we apply past sites in a very localized way. We also use the WeedSeeker to get a readout of the plot of land. So these are technologies that we're investing heavily and we bought 3 machines in China last year. We bought 10 more this year. So we are training our team so that they become experts at the localized application of crop protection.

We also have a product for cotton that is very expensive, and we'll be using satellite imagery to measure the NDVI of the crop. And like this, we'll reduce the use of exfoliators and maturing agents in cotton. This is what is helping us to lower crop protection expenses. With savings of BRL 20 million last year, our average is savings of BRL 50 million. And for the next year, this will be stepped up.

In addition to acquiring equipment, we'll train the team because there is a need of knowledgeable professionals and staff. Otherwise, we won't be able to seize the benefits provided by technology. And like this, we have been producing our production costs.

With the draft in cotton land, there has been a decrease in yield, but at the same time, a reduction of cost because we're not applying fungicide and other products. I remember that there was 1 year in 2016, there was a severe draft in Bahia. We had losses of 20% of our crop, and we were able to save 5% of the costs. So in fact, the net losses represented 15%. In this scenario, we will have some losses in cotton in our project, but at the same time, we'll have -- we'll get some cost savings. Primarily, I think it's important when we make the comparison between the realized, we're talking about actual versus budget, right, '20, '22. But when we consider -- actual '21 in compared to the forecast '22, there is a balance. Why? Because soybean in 2021, I think that the production was 66.4 bags per hectare. This year, 66.7 bags per hectare, 0.2% more. Remember, the draft last year in Paranagua and Mato Grosso do Sul, so last year, it was 95 bags per hectare only. That's why the actual this year, even though slightly lower than budget for corn and our key area for corn this year is Maranhao. So in corn, we are increasing yield by 22% in the comparison with last year, even with the slight crop failure that we had in corn.

And cotton, well, cotton productivity is 4.2% lower. So when you put everything in the same basket and make the comparison 2021 and '22, things will add up and be equivalent. So what will change our margin in '22 won't be yield. What will have an impact is production costs versus commodity crisis. And I think that probably one will offset. The other commodity prices will win. And that's why in our forecast, we predict that margins will be maintained in '21, '22.

We have another question from Thiago Duarte, BTG Pactual.

[Thiago Duarte, analyst]

I have a question, it's more of a provocation in fact. When you talk about the '22 margins, and we have talked a lot about margins because of the input situation. But when you say that we'll have very margins that will be very close to the ones we had in '21 and '22. Looking at the gross output of more than $3,000 per ton, $4,000 per ton in cotton, and we try to consider what you still have to build in soybean this year and also the sale of the cotton you'll be harvesting leaving corn aside, we can get the picture that margins could be much better than last year. We know that unit prices is not given in your guidance, but you have about 1/4 of unsold or unhedged volume growth in soybean and corn. So this is a provocation for you -- in relation to your -- are you being too conservative relative to the margins or the statements you're making about the margins? Is there something we're missing out?

[Aurelio Pavinato, executive]

Thiago, there's a lot that's up in the air, the yield for corn and in cotton, for example. The cotton is at a fantastic price today, but we don't know whether this will keep in the future. So many things may change until the end of the year. So I think that your interpretation is very coherent to the scenario. And that's why our vision is to maintain the margins, but there's a lot going on. It could go up. It could go down. This is my answer to your provocation.

When we're thinking about EBITDA margin, now in relation to net margins, then it depends on the volume you ship. Last year, we shipped less cotton. So this inflated our net margins. But the EBITDA margin, in our case, it's adjusted EBITDA margin is everything that's invoiced and shipped, so it's comparable we believe, and that's why it's tailwind for us.

Soybean is securing fantastic margins, and there's a lot of soybeans to be had. And as for corn and cotton, those variables that are still open. So our margins could be higher or lower at the end of the year.

[Thiago Duarte, analyst]

Pavinato, so which of those points, either prices that are open or any risks to the cotton and corn yields or costs, where do you detect the highest risk so that we don't get any surprises in relation to the margins?

[Aurelio Pavinato, executive]

I think that the top risk is price. Let's imagine, the war ends and interest rates climb in the world, creating an environment -- a completely -- the world scenario shifts and also climate; climate, let's imagine that the climate in the United States is perfect. In fact, it's not the case. It's adverse right now, but like to imagine that they have a record-breaking crop and the same for Brazil. And then there is a reversal, for example, cotton demand for some macroeconomic reason slows down and now the spot price, which is $1.20 per pound for delivery early next year goes back to $0.90. In corn, and there is lower risk, in fact, because with the failure in Mato Grosso do Sul, corn prices in Brazil will continue to be high. So I don't envisage this as the worst risk. Soy bean reached BRL 190 per bag, and then it went down to BRL 170. And so we have the FX effect as well.

For me, prices is where the risk is because they also affect the next crop year in terms of biological assets. You have to mark down your biological assets in relation to the next crop. So for me, among those variables, the top risk is price, especially with changes in the world stage.

[Rodrigo Gelain, executive]

[Operator Instructions] Since there are no more questions, our earnings conference call on the 1Q '22 results is now closed. The IR department will be very happy to answer any questions you might have. Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]