SK Innovation Co Ltd
KRX:096770
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SK Innovation Co Ltd
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[Interpreted] Good morning. I am [indiscernible], IR Project Leader at SK Innovation. Thank you for taking the time to join us today on this 2023 Q2 Earnings Call. On today's call, we have SK Innovation's CFO, Kim Yang-Sub; IR Manager, [indiscernible]; and C-level officers from different subsidiaries.
The agenda for today's call is as follows: CFO, Kim Yang-Sub will present the Q2 business results, which will be followed by Q&A. Also, please note that today's presentation has yet to be reviewed by our external auditor. So the results are subject to change based on such review. With that, let me invite our CFO, Kim Yang-Sub, to make the presentation.
[Interpreted] Good morning. I'm Kim Yang-Sub, CFO of SK Innovation. At the outset, I'd like to thank our shareholders, investors and analysts for your continued interest in the company. After the announcement of the capital increase decision on June 23, we have actively listened to the voices of our shareholders and investors through various channels. We're fully aware that many have voiced concerns.
Based on the diverse feedback we received, we are committed to minimizing any negative impact resulting from the capital increase decision and at the same time, making efforts to enhance intrinsic-based business value and increase shareholder value, we sincerely request unwavering interest and support from our shareholders and investors. In addition, after providing an update on the quarterly performance and outlook of each business, we will shed light on the new businesses that we aim to undertake.
First, let me highlight the 2023 Q2 business performance. The company's refinery business was affected by the decline in oil prices and refining margins are due to concerns of economic downturn and recorded an operating loss of KRW 411.2 billion in Q2. However, it is worth noting that the low oil prices and refining margins were driven more by the apprehensions over economic downturn rather than an actual oversupply in the market. In the second half of the year, it is anticipated that the U.S. monetary tightening stands will ease, which is expected to have a positive impact on oil prices and refining margins.
In addition, with [indiscernible] travel demand and the upcoming regular [indiscernible] season in Asia, a favorable operating environment is anticipated from the demand supply perspective. As of July, the refining product crack spreads are on the rise, and it is expected that such a trend will persist. Furthermore, SK On responsible for our battery business saw a steady sales growth following enhanced productivity in new factories and increased demand from key customers and achieved its highest quarterly revenue of KRW 3.6961 trillion in Q2. This is an increase of approximately 12% quarter-on-quarter and 187% year-on-year.
In the first half of the year, SK On achieved a revenue of KRW 7 trillion, up 175% year-on-year. We anticipate further revenue growth in the second half driven by increased sales volume. In addition, in the first half of 2023, our company reflected the benefits of the [ U.S. AMPC ] amounting to KRW 167 billion in our operating profit. We anticipate a significant increase in these benefits in the second half of the year, driven by substantial growth in sales volume. Furthermore, in 2025, we -- with the expected large-scale expansion of our U.S. production capacity, we foresee a considerable increase in benefits beyond 2026.
Best by such policy support, we aim to seamlessly advance our capacity expansion plans in the U.S. and cement our market position in the region through the expansion of our North American supply chain. That was a key innovation on Q2 business performance highlights. Next, I will elaborate on the company's Q2 business results.
In Q2 2023, despite the increased new battery factory productivity and higher sales volume, concerns of our economic downturn pushed down oil and refinery product prices. As a result, our revenue declined by KRW 415.7 billion quarter-on-quarter and recorded KRW 18,727.2 trillion. Operating profit dropped KRW 481.8 billion quarter-on-quarter, resulting in a loss of KRW 106.8 billion due to the declining refining margins.
Nonoperating profit improved by KRW 67.6 billion Q-on-Q, resulting in a loss of KRW 151.1 billion as reduced currency appreciation led to a decrease in fixed related losses. To elaborate, FX-related losses recorded KRW 900 million, product derivative gains to KRW 38.2 billion, net interest expenses KRW 106.7 billion, equity method gains of KRW 40.8 billion and other expenses, KRW 42.5 billion.
Next, let me go over the balance sheet. As of the end of Q2 2023, the total assets amounted to KRW 73,474.2 trillion, up KRW 6,255.3 trillion compared to the previous year-end. This increase was mainly attributable to the growth in tangible and intangible assets resulting from investments in new overseas battery factories.
Liabilities increased by KRW 3,336.1 trillion compared to the previous year-end, reaching KRW 47,312.1 trillion, primarily due to higher earnings to support expanded investment expenditures. The debt-to-equity ratio stood at 181%, down 8 percentage points compared to the previous year-end, mainly driven by a reduction in working capital resulting from the drop in oil prices. Furthermore, net debt increased by KRW 895.1 billion compared to the previous year and reaching KRW 15,409.9 trillion, mainly due to investments in overseas battery plant expansions.
Let me dive into the Q2 performance of each business. The refining business recorded an operating loss of KRW 411.2 billion, a decrease of KRW 686 billion Q-on-Q, due to the decline in the refining margins and concerns of an economic downturn. The refining business in the second half anticipates a gradual increase in refining margins, driven by the easing of the U.S. monetary policy, robust demand during the peak travel season and improved refinery product supply demand with the start of regular TA in the region.
Next, let me move on to the Petrochem business. Despite inventory-related losses and decreased revenue from byproducts which is hydrogen due to the decline in naphtha prices, the Petrochem business demonstrated an operating profit of KRW 170.2 billion in Q2, up KRW 61.3 billion Q-o-Q, thanks to a robust [indiscernible] market centered around [indiscernible]. Next is Q2 market outlook for key products. For PE and PP, despite ongoing supply side pressures and delays in demand improvement, a gradual uptick is expected due to the impact of Chinese National Day holiday demand in October, among others. For PX it is expected that spreads will remain flat due to the impact of increased supply resulting from the resumption of operations of large PX facilities in China, which have previously cut production due to troubles.
Next, I will brief our lubricants Q2 performance. The lubricant business saw an improvement in margin backed by cost reductions from lower oil prices despite a slight decrease in base oil sales Q-o-Q to achieve an operating profit of KRW 259.9 billion, up KRW 700 million Q-o-Q. For the second half of the year, base oil supply will rise again till with the completion of [ GAs ] and dampen prices. But the steady demand for this dropping season and China's reopening will help sustain a solid spread.
Next is our E&P business performance in Q2. Despite an increase in sales volume, the E&P business recorded an operating profit of KRW 68.2 billion, down KRW 45.3 billion Q-o-Q, mainly due to the impact of lower oil and gas prices.
Next, let me move on to the battery business. The battery business reached its highest quarterly sales of KRW 3.6961 trillion, an increase of KRW 390.8 billion Q-o-Q, [indiscernible] by improved productivity in new capacities that came online in 2022 and increased sales volume. Operating losses are narrowed by approximately KRW 213.2 billion Q-o-Q links to increased battery sales volume, enhanced yield in new factories and the effect of AMPC worth KRW 167 billion.
Also, the OP margin improved by around 7 percentage points. In the second half of the year, we anticipate further improvement in revenue and profitability through sustained productivity enhancements in new overseas factories and increased sales volume from key customers. In addition, profitability improvements are expected as the benefits from the U.S. AMPC increases substantially compared to the first half.
Next, let me take a look at SK IT's Q2 performance. SK IT saw a growth of KRW 3.9 billion in operating profit Q-on-Q that by increased sales to major customers. Looking ahead to Q3, a gradual improvement in profit is expected as sales to key customers continue to increase.
Next, let me discuss the recently disclosed ESG report. On July 14, SK Innovation released its 2022 ESG report, which includes its ESG management goals and results. With this report, the company has taken a step further in enhancing transparency by expanding the disclosure of annual goals and achievements for each ESG strategic test. This move is aligned with leading global ESG disclosure trend. The report shows yearly reduction targets for Scope 1 and 2 emissions until 2025 as well as the actual achievements compared to the targets for the past 3 years. Furthermore, it contains annual quantitative targets and results for ESG strategic tasks until 2025, such as achieving 0 safety accidents and managing ESG risks of partner companies.
The company industry in hand mid- to long-term credibility by actively responding to the demand of key external stakeholders such as investors and ESG rating agencies, Furthermore, we plan to strengthen the monitoring of the results vis-a-vis the targets, and we will ensure a progressive and continued achievement of our ESG goals. SK Innovations 2022 ESG report is available on our website, we kindly ask for your interest.
Next, I will talk about SK Innovation's future energy investment strategy in relation to the recently announced rights offering. Under the vision of carbon to green, we are committed to continuously strengthen our green portfolio, including batteries, and transitioning our existing petrochem business into a eco-friendly business model. Through this effort, we aim to transparently share our asset structure performance over the market, gain recognition and enhance corporate value.
In line with this, we have set a goal to double the proportion of green assets vis-a-vis the Energy & Chemicals by 2025 through portfolio innovation, to achieve this target, we are strategically promoting business opportunities to secure decarbonation -- decarbonization and low-carbon energy related technologies and to seek partnerships thereon. To achieve these goals, we're not only engaging in in-house R&D activities, but also fostering close collaboration through open innovation with relevant internal and external entities. This approach enables us to expedite the discovery of innovative technologies and shorten the development cycle.
SK Innovation recently announced in the ESG report its minimum term strategy to invest KRW 1.79 trillion in future energy technologies and businesses until 2026. Through this initiative, SK Innovation aims to transform its business portfolio and the company's leading green energy materials company. The company has already made a seeding investments in several start-ups with promising green energy technologies, including [indiscernible] Bioenergy and [indiscernible]. In addition, the funds are raised through the recent equity offering will be utilized to invest in and conduct during our R&D projects in areas such as ammonia utilization, waste gasification and CCUS.
We are currently in the process of selecting pricing companies in each business area through internal procedures and assessments. In particular, we are currently in the stage of identifying potential CCUS investment targets at home and abroad to execute investment in 2023. Please refer to the appendix for information in the background and market outlook for each business development opportunities.
[Interpreted] Thank you. This is the end of our prepared presentation. [Operator Instructions] Please note that the Q&A session will be conducted with consecutive interpretation. Prior to today's earnings call, the company has collected questions via our website for around 2 weeks. So before we open up the floor, we would like to provide answers to 2 most frequently asked questions, first.
So for the first question, it will be with regards to our battery business, the overall progress that has been being made in terms of securing new customers and also the plans that the company would have to expand its product portfolio. With regards to this question, we will have SK On to answer.
[Interpreted] So yes, this is the CFO of SK On, Kim Kyung-hoon, and maybe I can answer the first question. With regards to securing new customers and expanding our overall customer base, we do believe that there will be a lot of progress in this area. Focusing on the North American market, which we deem to be a high-growth area. Due to the IRA within North America, we again expect this to be a high-growth market. And because we would be applicable to various benefits under the AMPC, we do believe that we will be able to enjoy high profits going forward.
So to adjust the IRA, we do believe that one of most critical drivers in gaining more orders in North America would be whether we would be able to satisfy the conditions for critical mineral and battery components under the IRA to be eligible for benefits. In our company's perspective because in entering into the North American market and localizing our production, we have preparing beforehand and taking preemptive action. And as a result of that, we do believe that we have a relatively more advantage position within this area. So leveraging this position, we are continuously discussing with our existing customers about new or additional orders. And at the same time, also engaging with new OEMs that have a very strong presence in North America about possible future orders. So this is something that we are actively engaging upon. And because discussions are ongoing, of course, it would be difficult for us to share details with you. But once more details are available, we will make sure to communicate with you.
So in terms of expanding our overall product portfolio based upon the analysis that we have done about the internal and external environment as the EV market continues to grow, we do believe that the market is becoming more segmented across the premium volume and entry markets. And as a result of that, according to our customer needs and in line with the overall trends that we identified within the market, we are trying to act accordingly.
So based upon the high level of technical expertise that we have been able to develop not only for our flagship product, which would be the high nickel battery but also we have been able to develop a wide variety of cell chemistries, which would include the metal nickel, cobalt-free and LFP batteries. And as a result of that, we are able to deal with the demands that are in the various segments within the market space. So based upon this differentiated competitive edge, we will continue to develop our products so that we can meet the demands of a wide variety of markets and a wide variety of customers.
And in terms of form factors also by developing a prismatic battery, we have secured a readiness in terms of the technology. And in line with the orders that we will have forthcoming, we are going to further develop our plans for commercial production.
[Interpreted] So now maybe we can move on to the second question, which was about SK On's 2023 revenue and also profitability guidance, whether there would be any changes in light of the fact that recently, battery sales prices have been falling and that there is also a possibility of sales volume declining further.
[Interpreted] So if we look at our overall sales volume and productivity in the second quarter of 2023 on a Q-o-Q basis, we have seen improvement and we are close to the current target level that we have. If we look at the second half of the year, we do expect that the yield will continue to improve and that also our sales volume will increase driven by demand in the North American market. With this outlook, we do believe that if we look at our Q-o-Q revenue growth and also the improvements that we would be able to see on our profitability that we will be able to continue the current momentum.
So to discuss our top line and then in terms of profitability, it is true that there is some concern about the uncertainties related to volume with regards to the possibility of demand slowing down in the European EV market. However, we continue to engage with our customers and look at the target shipments that we have in terms of discussions to ensure that we can maintain the levels ongoing.
As a result of that, if we look at the full year 2023 top line. We do believe that on a Y-o-Y basis, it will represent a growth of around 2x. And as we have mentioned during the beginning of the year, we do continue to maintain the target of reaching a EBITDA plus for the full year of 2023 and also to ensure that we will be able to improve our operating profit quarter-after-quarter.
[Interpreted] Yes. Thank you very much. With that, we would like to wrap up the questions that we had received in advance and now take questions from those of you on the call. For those of you that are asking questions, we would appreciate if you first disclose your affiliation and also names.
[Interpreted] [Operator Instructions] The first question will be provided by Jae Sung Yoon from Hana Securities.
[Interpreted] There are 3 questions that I would like to ask you. First is about SK On. You did share the numbers related to the AMPC benefits that you have captured into your performance. Would it be possible to break down that number against the first quarter versus second quarter? And in addition to that, you did mention during the presentation that you believe that the benefits towards the second half of the year will grow significantly. So would it be possible to provide some guidance numbers about what level of benefits you are expecting?
The second question I have also is about SK On. You did mention that profitability is something that you do believe will improve going forward. If you look at the drivers behind that, I do believe that there could be a wide variety. So for example, as demand improves, it could be that for the fixed cost that you have, there would be a better coverage of that or it could be that logistical costs would decline or that there would be some benefits that you would be able to reap because of the sales price of cathodes. So for the main drivers and why you believe profitability will improve going forward, could you elaborate a bit more about what the reasons behind that would be specifically?
The third question that I have is about your non-SK On business for the remaining businesses that you have. I do believe that there were TAs that you conducted within the second quarter and that there would be an opportunity cost related to that. What amount was that in actuality? And in addition to that, it seems to be that across your PX, PE and PP facilities that you have, the utilization seems to be a bit low. So as a result of that, when do you believe that there could be a better performance in this area? And what would be the overall view?
[Interpreted] This is Kim Kyung-hoon, the CFO of SK On and maybe I can address your first question. So with regards to the first question about the AMPC effect or impact, it is true that the numbers that we have presented represent both the first quarter and second quarter impact combined. It would be difficult to give you a specific breakdown. However, what I can say is that if you look at which quarter had a larger impact, the second quarter was larger than the first.
And maybe the second part of your question or the second question that you asked in terms of revenue growth and also increase in volume of our products. Again, we do think that the trend will be represented by the third quarter, fourth quarter and then towards the second half of the year, in general, improving continuously. And if you look at the main driver behind that, as we have mentioned, it would be the stronger demand that we see coming from the U.S. market. And also maybe to talk about our profitability improvements.
So in terms of the overall drivers behind why we believe profitability going forward will improve. I do believe that, as you have mentioned, there could be a wide variety of different drivers or factors. If you look at it from a broad perspective, I believe the biggest would be the improvements in our overall productivity and the second, would be the lower cost. And as a result of that, the improvement in our margins as a result of that. We believe that the bigger driver will be from our higher level of productivity, and we think that, that will be the main factor contributing to the improvement.
Yes. Maybe I can address your second question about the opportunity cost related to the Q2 TAs that we had. This is [indiscernible], the performance management team leader from SKE.
So during the first half of the year at SK Energy's level, if we look at the facilities that were subject to turnaround, we had 1 FCC and also RFCC and the desulfurization units that went into [indiscernible]. And as a result of that, if you look at the opportunity to cost related to that, that would be KRW 110 billion. And in addition to that, if we look at the third quarter, we don't expect any facilities to be subject to turnaround. So as a result of that, there will be no opportunity cost related to any activities.
[Interpreted] Yes, this is [ Kim Yong-Su ], the Head of Management and Planning Office at SK Geo-centric and maybe I can address your question about the utilization of our PX, PE and PP facilities. So first to talk about our PX facility. The PX facility in the beginning of the second quarter did have a lower utilization. And the reason for that is because there was higher demand for [indiscernible] and [indiscernible] that was used for gasoline blending. So if you look at the utilization currently, it's running at full utilization. And during the second half of the year, we don't believe that there will be a possibility of us to adjust the utilization level.
In the case of our PE and PP facilities in the first half of the year, we did expect that there would be stronger demand coming from the reopening of China. However, in actuality, the demand recovery was slower than expected. And added to that, there was new capacity additions that took place within the region, which added to the overall supply. So as a result of that, we did adjust our overall utilization to a lower level. So if you look at the current situation, we are running at 100% utilization because we have depleted the inventory that we had helped.
[Interpreted] The following question will be presented by Hyunryul Cho from Samsung Securities.
[Interpreted] This is Cho Hyunryul from Samsung Securities. And I would like to ask you 3 questions. The first question would be about your overall refinery business, the second about SK On. And the third question would be about your green portfolio ambitions going forward.
First, to talk about the question about the refinery business. If you look at refinery margins recently, based upon focusing around the middle distillates, there seems to be a recovery that we have been seeing in the recent market. So what would be your overall outlook for refining margins in the second half of the year and also into next year?
Second question that I would like to ask you is about SK On. If you look at this quarter, as mentioned before, you did capture some of the AMPC benefit. And I do believe that at your competitor's level, that there are some companies that are talking about possible profit sharing or requests for credit sharing from their client base. So the question that I would like to ask is, do you actually see this? And do you feel this as a request or as a demand within your customer base also? And if you would compare your customer base against or if you would base it upon the facilities that you have built together with your JV partner versus the facilities that you have independently built are the overall demand level is different at these different sites?
The third question that I would like to ask you is about your green portfolio. You have shared with us the overall investment plans that you have until 2026, it seems to be that a lot of your investments will be concentrated in the ammonia area and also with regards to waste fuel-related gasification. So if that is the situation, then for the nature of these investments, would these be follow-on investments to already -- to prior investments that you have made in these start-ups? Would the nature investments be, for example, to build out manufacturing facilities that would actually generate revenue in the areas in which you are collaborating?
[Interpreted] So this is [indiscernible], the performance management team leader at SK Energy, and maybe I can address your question by talking about our overall view on the supply-demand dynamics in the middle [indiscernible] and also our view about refining margins for the latter half of the year. So if we start with diesel or light oil, we do believe that due to recovery in China and also more movement or travel demand that is taking place in addition to the TAs that are taking place in the third quarter, that this all will have an effect of supporting the diesel crack levels.
So on the [indiscernible] side also, we do believe that driven by the overall demand for jet fuel that there will be a recovery that we will be able to see in the third quarter. And as a result of these factors, if we look at our overall outlook for the refining margins, we do expect there to be a gradual recovery to take place driven by the production cuts of the OPEC+, also TAs that are taking place in Asia and Russia, which will lead to tighter supply and also the recovery and demand coming from -- domestic demand in China and also jet fuel demand.
[Interpreted] So maybe I can take your second question. This is [ Park Jeong Ah ], the Head of Global Alliance division and IR at SK On. So first, to talk about the production facilities that SK On has built out by itself because these are direct investments that we have made into these facilities. We don't have any plans to share the credit with our OEM customers.
So in the case of facilities that we have built with our JV partners, of course, for the AMPC benefits, it's not something that we would be sharing with our OEM customers, but rather the JV built facility itself would be the recipient of the AMPC credit.
[Interpreted] So this is Kim Ji-yong, Head of Business Development Office at SKI, and maybe I can talk about your third question about our green portfolio investment. So about your question about whether this would be a continuation of the investments that we have made before, I would have to say yes. That is true. So if we look at the overall situation, we initially made our investments last year. In the areas of ammonia and also waste to fuel, for example, in the investment that we had in [indiscernible]. And this year, if you look at the areas that we have invested in, we have made investments in the area of CCUS. So we do want to continue to broaden the overall areas that we are present in and that are included in our green portfolio. So that we can commercialize these various opportunities. So accordingly, we will continue to make follow-on investments in this area.
And in addition to that, I do believe that you also asked about whether we would be investing into production facilities to be able to generate revenues. I would have to say that the situation is different on a case-by-case basis. So first, if we look at [indiscernible], which would be our ammonia-related investment, the company right now is focusing on R&D right now. However, as a result of that, it is planning to build a production facility that would provide commercialization in 2025. So as a result of that, we currently are reviewing the possibility of participating in that overall investment.
In the case of [indiscernible], which would be the waste to fuel investment. Right now, that company is in a pre-IPO process. So as a result of that, in addition to the existing facilities that it has, it is planning to build additional capacity in the U.S. And as a result of that, we are currently exploring possibilities of participating maybe in a JV form or maybe a different type of format. In addition to that, for the CCUS company that we had invested in Korea, this is also a company that is preparing commercialization.
[Interpreted] The following question will be presented by Young Suk Shin from Morgan Stanley.
[Interpreted] So if I am not wrong, I believe that the comment was not made by Ford but Volkswagen. So as you have mentioned, I do believe that there is a possibility of more sluggish demand coming from China and Europe. However, if you look at our customer base and also the vehicles that we are providing batteries for, we do believe that the overall impact will be limited. In addition to that, for the U.S. EV demand and -- which is the overall area that we are focusing on, we actually believe that the overall situation will be very strong.
We conservatively assume some kind of percentage discount relating to the execution cost or the monetization costs when you try to monetize the AMPC and also, can you share with us if there's any change to your full year production guidance of 10 to 15 gigawatt hours in the U.S.? Because if I use first half production of 4 gigawatt hours multiplied by $45 per kilowatt hour, then you would get actually a higher number than $157 billion.
The second question is on Hyundai. So I think Hyundai currently accounts for a large portion of your revenue, maybe about 70%, 60%, 70% -- and recently, there has been talk that SDI might sign as much as 100 gigawatt hour joint venture with Hyundai. Given Sk shipments to Hyundai right now comes out of your Chinese plants, which are not joint ventures with Hyundai? Do you think this is a risk to your business? What do you think -- how much of a risk is solid-state batteries to your business in your opinion? And how much of your order backlog has a take-or-pay cost or a minimum volume guarantee cost? If we start to see -- if we lose orders from Hyundai for the China plant, what is the backup plan?
[Foreign Language]
[Interpreted] So with regards to your first question, maybe I can address this. This is the CFO, Kim Kyung-hoon. Maybe to cut to the answer, I would have to say that in conclusion on a per annum basis of around 10 to 15 gigawatt hours, we are maintaining that. When you did your calculation, the reason why the first half of the year looks small is because in terms of the overall sales volume, we do expect that the second half will be a much higher number than the first. In addition to that, in the overall 167 billion AMPC number that we have captured, this is not based upon conservative assumptions, but what we believe to be realistic consumption -- assumptions. I.e., what that means is that there has not been any execution cost or monetization cost, as you have said, built into these numbers.
So this is [ Park Jeong Ah ]. Maybe I can address your second question. So I think that what we can say to that point is that as you are probably aware, for EV batteries, EV batteries are very special and also tailor-made product to a specific vehicle and which cannot be easily replaced so as a result of that, any new battery orders that would be secured by our competitors would not have any impact on the existing order base that we have or our existing supply volume.
[Interpreted] The last question will be presented by Jin-Myung Lee from Shinhan Investment & Securities.
[Interpreted] I would just like to ask one question, which would be, if you look at the overall CapEx that would be required for this year and next year, what would that overall amount be? And in addition to that, in the recent conference call that you had about your rights offering, you did mention that in addition to the rights offering, you may explore various asset rationalization efforts. So if you could elaborate about what those efforts would be, that would be appreciated.
[Interpreted] So this is the CFO, Kim Yang-Sub, and maybe I can address your first question about our CapEx. So for the CapEx expectations for this year, as we had shared with you at the beginning of the year, we expect it to be at around KRW 10 trillion. And as of the current time, we are maintaining this guidance. And the second part of your question was about our asset rationalization efforts, which would be part of strengthening our overall financial position, in addition to the rights offering that we are currently conducting. In this area, what I would have to say is this is an ongoing process. So we are currently exploring various options available to us. In actuality, we don't have any detailed plans yet. But once we do have more details, then we will make sure to share them with you, whether it be through a disclosure or through other forms of communication.
So yes, thank you. We would like to wrap up the Q&A session and also our overall earnings conference call for the second quarter of 2023 SK Innovation. Once again, thank you for your attention.